MIRA
INFORM REPORT
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Report Date : |
22.03.2007 |
IDENTIFICATION
DETAILS
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Name : |
COROMANDEL FERTILISERS LIMITED |
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Registered Office : |
`Coromandel House’, 1-2-10, Sardar Patel Road, Secunderabad – 500 003, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
16.10.1961 |
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Com. Reg. No.: |
01-892 |
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CIN No.: [Company
Identification No.] |
L24120AP1961PLC000892 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDC00011E |
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PAN No.: [Permanent
Account No.] |
AAACC785ZK |
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Legal Form : |
Public Limited Liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and marketing of fertilisers and ammonium phosphates |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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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 Southern India. Available information indicates high financial responsibility of the company. Financial position is good. Trade relations are fair. Payments are usually correct and as per commitments. The company can be considered good for any normal business dealings. |
LOCATIONS
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Registered Office : |
`Coromandel House’, 1-2-10, Sardar Patel Road, Secunderabad – 500 003, Andhra Pradesh |
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Tel. No.: |
91-40-2784 2034 |
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Fax No.: |
91-40-2784 4117 |
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E-Mail : |
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Website : |
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Factory 1 : |
Fertiliser Plants :
v Sriharipuram, Fax: 91-891-2577665 v Fertilisers / Pesticides Factory Fax :
91-4172-272264 v Compound Fertilisers Factory Pesticide Plant :
Plot No. 22/1, TTC Industrial Area, Thane Balapur Road, Ghanasoli
P.O., Navi Mumbai - 400 701, Maharashtra, India. |
DIRECTORS
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Name : |
Mr. K. Anil Nair |
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Designation : |
President and
Whole time Director Godavari
Fertilisers and Chemicals Limited |
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Name : |
Mr. J. Jayaraman |
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Designation : |
Former Chairman
and Managing Director Cochin Refineries
Limited |
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Name : |
Mr. M. M. Murugappan |
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Designation : |
Director- Technical
and HR Murugappa Group |
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Name : |
Mr. T. M. M. Nambiar |
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Designation : |
Former Managing
Director Associated Cement
Companies Limited |
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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 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 (India) Limited. (Fertiliser Division), Kanpur |
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Name |
Mr. R. S. Nanda |
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Designation |
President & Managing Director |
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Age |
58 Years |
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Qualification |
B.Sc. Engineering (Mechanical) |
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Experience |
36 Years |
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Date of Joining |
27th April, 1992 |
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Previous Employment |
Cyanamid India Limited, Atul, Bulsar Dist., Gujarat, India – Production Director (Agro-Chemicals Division) |
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Name |
Mr. A. Vellayan |
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Designation |
Senior Manager - Marketing |
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Age |
58 Years |
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Qualification |
B.Sc. (Ag), M.Sc. (Ag) |
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Experience |
30 Years |
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Date of Joining |
03rd November, 1967 |
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Previous Employment |
Managing Director – Tube Investments of India Limited |
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Name |
Mr. E. Chennakesavulu |
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Designation |
Senior Manager – Marketing |
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Age |
58 Years |
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Qualification |
B.Sc. (Ag.),M.Sc. (Ag) |
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Experience |
30 Years |
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Date of Joining |
24th April, 1973 |
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Previous Employment |
Tobacco Research Assistant, Andhra Pradesh Agricultural University, Kavati |
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Name |
Mr. N. V. Jagan Mohan |
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Designation |
Chief Engineer |
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Age |
58 Years |
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Qualification |
B. E. (Mechanical), M. E. (Mechanical Designer) |
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Experience |
34 Years |
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Date of Joining |
03rd November, 1967 |
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Previous Employment |
Associate Lecturer, Andhra University, Waltair |
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Name |
Mr. A. Sambasiva Rao |
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Designation |
Senior Manager – Safety, Health and Enviornment |
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Age |
42 Years |
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Qualification |
B. Tech., PGD in Energy Engineering & Industrial Safety (AU), PGD in Energy Engineering IIT (Delhi) |
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Experience |
20 Years |
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Date of Joining |
01st June, 1996 |
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Previous Employment |
Assistant Manager – Safety, Voltas Limited, Patancheru |
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Management Team
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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 India § State Bank of Travancore § Standard Chartered Grindlays Bank § Citibank N.A. § IDBI Bank Limited § HDFC Bank Limited § ICICI Bank Limited |
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Facilities : |
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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Memberships : |
Nil |
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Collaborators : |
Nil |
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Associates/Subsidiaries : |
v Carborandum Universal Limited v Tube Investments of India Limited v E.I.D. Parry (India) Limited 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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25,405,557 |
Equity Shares |
Rs.10/- each |
Rs. 254.056 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES
OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
254.056 |
254.056 |
254.056 |
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2] Reserves & Surplus |
4125.814 |
3598.248 |
3124.044 |
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NETWORTH
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4379.870 |
3852.304 |
3378.100 |
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LOAN FUNDS |
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1] Secured Loans |
2109.306 |
1731.195 |
1862.161 |
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2] Unsecured Loans |
2153.293 |
947.930 |
1093.735 |
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TOTAL BORROWING
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4262.599 |
2679.125 |
2955.896 |
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DEFERRED TAX LIABILITIES |
751.641 |
889.527 |
889.038 |
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TOTAL
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9394.110 |
7420.956 |
7223.034 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
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3580.064 |
3653.091 |
3824.332 |
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Capital work-in-progress
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56.635 |
122.035 |
18.949 |
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INVESTMENT
|
1618.093 |
1348.782 |
1361.682 |
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DEFERREX TAX ASSETS
|
0.000 |
20.227 |
17.461 |
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CURRENT ASSETS, LOANS &
ADVANCES
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Inventories
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3953.077 |
1910.989 |
1969.600 |
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Sundry Debtors
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1067.501 |
999.995 |
1611.735 |
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Cash & Bank Balances
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243.308 |
328.394 |
28.986 |
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Loans & Advances
|
4434.478 |
2202.667 |
1248.350 |
Total Current Assets
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9698.364
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5442.045
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4858.671
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Less :
CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
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4982.562 |
2716.151 |
2463.781 |
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Provisions
|
576.484 |
449.073 |
394.280 |
Total Current Liabilities
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5559.046
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3165.224
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2858.061
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Net Current Assets
|
4139.318 |
2276.821 |
2000.610 |
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
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TOTAL
|
9394.110 |
7420.956 |
7223.034 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other
income]
|
18747.063 |
15541.696 |
12225.874 |
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Profit/(Loss) Before Tax
|
1153.632 |
928.670 |
707.736 |
Provision for Taxation
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|
236.723 |
276.680 |
Profit/(Loss) After Tax
|
835.464 |
691.947 |
431.056 |
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Export Value
|
218.546 |
390.303 |
308.445 |
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Import Value
|
13500.326 |
9307.041 |
6561.485 |
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Total Expenditure
|
17593.431 |
14600.126 |
11518.138 |
QUARTERLY /
SUMMARISED RESULTS
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PARTICULARS |
30.06.2006 (1st
Quarter) |
30.09.2006 (2nd
Quarter) |
31.12.2006 (3rd
Quarter) |
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Sales Turnover |
3561.600 |
7313.600 |
5090.100 |
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Other Income |
19.900 |
60.300 |
27.900 |
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Total Income |
3581.500 |
7373.900 |
5118.000 |
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Total Expenditure |
3222.500 |
6407.200 |
4617.400 |
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Operating Profit |
359.000 |
966.700 |
500.600 |
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Interest |
75.300 |
67.300 |
73.600 |
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Gross Profit |
283.700 |
899.400 |
427.000 |
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Depreciation |
88.400 |
91.100 |
91.100 |
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Tax |
87.000 |
288.600 |
129.800 |
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Reported PAT |
123.700 |
520.200 |
217.600 |
200606 Quarter 1 - The above financial results are drawn in accordance with the accounting policies consistently adopted by the Company. 2. In view of the seasonal nature of the farm inputs business, the results of the first quarter are not indicative of the overall performance of the Company for the whole year. 3. Net Sales/Income from operations for the current quarter include Rs.121.400 Millions (quarter ended 30.06.2005: Rs.78.800 Millions) relating to the previous year received on account of announcement of the final rates of concession for complex fertilisers by the Government of India. For the current quarter, pending announcement by the Government of India of final rates of concession for the Complex Fertilisers, income has been recognised having regard to the existing concession scheme and according to management estimates of price concession receivable. 4. During the current quarter, the Company has acquired 50.72% of the equity share capital of M/s Ficom Organics Limited, Ankaleshwar. Consequently, M/s Ficom Organics Limited has become a subsidiary of the Company effective 30.05.2006. 5. Pursuant to the adoption of Accounting Standard 15 (revised 2005) - Employee Benefits, the valuation of obligation and plan assets in respect of long term employee benefits is being carried out by the management. Adjustment in respect of employee benefits upto 31.03.2006 shall be made out of the opening revenue reserve. However, additional charge for the current period on account of employee benefits amounting to Rs.03.700 Millions as estimated by the management have been provided for in the above results. 6. The Company is engaged in the Farm Inputs business which, in the context of the Accounting Standard-17, is considered the only business segment. 7. During the current quarter, 45 investor complaints were received and were resolved. There were no complaints pending, both at the beginning and at the end of the quarter. 8. The results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on 18.07.2006. 9. The auditors of the Company have carried out a Limited Review of the Unaudited Financial Results (Provisional) for the quarter ended 30.06.2006. 10. Figures have been regrouped wherever necessary
200609 Quarter 2 -: Earnings per share-Basic and diluted 1. The above results are drawn in accordance with the accounting policies consistenly adopted by the Company. 2. The results were reviewed by the Audit Committee and taken on record/approved by the Board of Directors at their meeting held on 17.10.2006. 3. The Auditors of the company have carried out a Limited Review of the unaudited Financial Results (Provisional) for the quarter/half year ended 30.09.2006. 4. The company is engaged in the Farm Inputs Business which, in the context of the Accounting standard 17, is considered the only business segment. 5. Other income for the year - quarter and half year ended 30.09.2005 includes interest received on income tax refund (Net) amounting to Rs. 105.200 Millions (Current half year ended 30.09.2006 Rs Nil). 6. Pending announcement by the Government of India of final rates of concession for the complex fertilisers, for the Quarter, income has been recognised having regard to the existing consession scheme and according to Management estimates of price concession receivable. 7. During the quarter, the company made an initial remittance of Rs 119.300 Millions (Tunisian Dollars 3.375 million) towards part of its 15% equity stake in the new joint venture company 'Tunisian Indian Fertilisers SA (TIFERT) formed for setting up a phosphoric acid plant in Tunisia. 8. In respect of long term employee benefits upto 31.03.2006, the valuation of obligation and plan assets in terms of Accounting standard 15 (revised 2005) is being carried out by the management and Adjustment if any, will be made out of the opening revenue reserves. 9. During the current quarter 7 investor complaints were received and were resolved. There were no complaints pending, both at the beginning and at the end of the quarter. 10. Figures have been regrouped wherever necessary
200612 Quarter 3 - EPS is Basic & Dilutes 1 The above financial results are drawn in accordance with the accounting policies consistently adopted by the Company. 2 The results have been reviewed by the Audit Committee and taken on record/ approved by the Board of Directors at their meeting held on January 23,2007. 3 The auditors have carried out a limited review of the unaudited financial results(pro visional) of the Stand-alone Company for the quarter/nine months ended December 31,2006. 4 The consolidated results appearing in columns (6) and (7) above, though not mandatory, have been provided by the management as an additional information to the shareholders and hence, have not been reviewed by the auditors of the company 5 The Company is engaged in the Farm Inputs business which, in the context of the Accounting Standard-17, is considered the only business segment. 6 Other income for the previous year- nine months ended December31,2005 includes interest received on Income tax refund (net) amounting to Rs. 105.200 Millions (Current nine months ended December 31, 2006: Rs. Nil). 7 Pending announcement of final rates of concession for the complex Fertilisers for the quarter ended December31,2006andquarterendedSeptember30, 2006, income has been recognised having regard to the existing concession scheme and according to management estimates of price concession receivable. 8 The Company has formulated a Scheme of Amalgamation of M/s.Ficom Organics Limited and its wholly owned subsidiary M/s.Rasilah lnvestments Limited., with the Company, Pursuant to the provisions of Section 394 ofthe Companies Act, 1956, the Company is in the process of obtaining the necessary approvals for the said scheme. 9 In respect of long term employee benefits upto March 31, 2006, the valuation of obligation and plan assets in terms of Accounting Standard 15 (Revised 2005) is being carried out by the management and adjustment, if any, will be made out ofthe opening revenue reserve, 10 During the current quarter, 1 investor complaint was received and resolved. There were no complaints pending ,both at the beginning and at the end of the quarter. 11 Figures have been regrouped wherever necessary.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt Equity Ratio |
0.85 |
0.79 |
0.84 |
|
Long Term Debt
Equity Ratio |
0.46 |
0.55 |
0.57 |
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Current Ratio |
1.12 |
1.08 |
1.19 |
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TURNOVER RATIOS |
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|
Fixed Assets |
2.87 |
2.45 |
2.61 |
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Inventory |
6.51 |
8.15 |
7.86 |
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Debtors |
18.46 |
12.12 |
8.82 |
|
Interest Cover
Ratio |
5.80 |
5.96 |
3.46 |
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Operating Profit
Margin (%) |
9.24 |
9.27 |
10.45 |
|
Profit Before
Interest and Tax Margin (%) |
7.30 |
7.05 |
7.87 |
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Cash Profit
Margin (%) |
6.32 |
6.59 |
5.99 |
|
Adjusted Net
Profit Margin (%) |
4.38 |
4.37 |
3.41 |
|
Return on Capital
Employed (%) |
18.44 |
17.52 |
19.25 |
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Return on Net
Worth (%) |
20.45 |
19.49 |
15.38 |
STOCK PRICES
|
Face Value |
Rs.2/- |
|
High |
Rs.66.00/- |
|
Low |
Rs.65.00/- |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY :
Subject, a
subsidiary of Murugappa group company EID Parry was originally promoted by EID
Parry, Chevron Chemical Company, US and International Minerals & Chemicals
Corporation(IMC) of US in 1964. The US partners in the venture Chevron Chemical
Company and IMC have divested their shareholding in favour of EID Parry India Limited
in 1995 and 1998 respectively. As on Dec 2001, EID -Parry (India) and its
subsidiaries hold 78.21% of equity in company.
Subject from its fully integrated fertiliser plant at Visakhapatnam
manufactures complex phosphatic fertilisers using imported Rock Phospate and
Sulphur. The company imports Rock Phospate from Africa, the pacific countries
and China while the sulphur is imported from Japan and Middle East. The company
has supended its ammonia and urea production facilities due increase in prices
of hydrocarbans and start importing urea, ammonia and liquid sulphur. The
company has also written off the value of the ammonia plant Rs.254.200 millions
against the profit of FY2001-02.
Subject has continuously enhanced the
capacity from the modest start it made on 1967 with 0.25 million MTPa. The
capacity was further enhanced to 3 lakh MTPA. Again in 1995, the production
capacity was increased to 0.400 millionMTPA by retro-fitting the two existing
trains(A&B) of complex fertilzers plant with the retrofitting of B train
alone costing 75 million. The production capacity has increased to 0.600
million MTPA with the commissioning of Third Granualation Train in July 2000 at
a cost of Rs.400.000 million. The company has tested and commissioned the
liquid ammonia terminal/pipeline project in march 1999.
The company has diversified into manufacturing of cement and has also
commissioned a 1 million TPA cement plant in 1982. However, due to recurring
losses, the unit was sold to India Cements in Nov.'90.
The Company aims to increase its market share in the phosphatic fertilisers
segment through mergers and acquisitions. It is targetting East-coast companies
such as Godavari Fertilisers Limited, Madras Fertilisers Limited and Paradeep
Phosphates Limited.
The company has signed MOU with FOSKAR of South Africa for supply of
rawmaterial and also for transferring of 5% equity shares held by Coromandel.
This is subject to approvals.
During 2003-04, the Company acquired 25.88% stake in M/s.Godavari Fertilisers
& Chemicals Limited (GFCL) from Government of Andhra Pradesh. With this
acquisition the combined capacity is 2 million tonnes along with associate of
GFCL.
MILESTONES:
1959 - Independent India realised that
its largely agrarian economy needed a thrust in the right direction for its
people to benefit and prosper. Prime Minister Jawaharlal Nehru invited
the Ford Foundation to carry out a comprehensive study of India agriculture and
give its recommendations. The study revealed a crucial need to produce indigenous
chemical fertilisers to increase agricultural output to meet the country's ever
increasing food demand.
1961 - An industrial license was granted to
three companies - IMC ((the world's largest producer of fertilisers
then), Chevron Chemical Company (a major American player in fertilisers /
industrial chemicals) and E.I.D.Parry (I) Limited (India's largest private
fertiliser producer with 60 years' standing)) to set up a giant chemical
fertiliser complex.
The first board of Directors was constituted on October 16,
with Mr. H V R Iengar as its Chairman. Others on the Board included J Q
Cope, Charles Dennison, J K John, Dr L Bharat Ram, A W Horton, J T
Gibson, S C Dholakia, V K Rao and Raja Rameswar Rao. L L
Powell and P J Davies were the first Managing Director and Dy. Managing
Director respectively. Donald I Meikle was the first Company Secretary.
1962 - Market development commenced in
the form of a 'seeding programme'. E.I.D.Parry was appointed CFL's principal
sales agent in India for their product
aptly name 'GROMOR' epitomising the idea of GROwing MORe food for the nation.
A sprawling 483.5 acres site was identified at Visakhapatnam
along the 'Coromandel' cost (India's east coast), from where the Company
derived its name. The land, taken under a 50-year lease from
Visakhapatnam Port Trust, has a private jetty just 5 km from the plant
site. With a capital investment of Rs.50 crores, Lumus Company undertook
construction of the plant.
1964 - On March 2, Dr. Bharat Ram
was elected Chairman of CFL's Board of Directors. He was the
longest-serving Chairman, with an innings of 37 years. Addressing the AGM as
Chairman on July 15, 2004, he nostalgically commented, "In my long innings
in public life, business and industry, I have the varied experience. But
I would like to affirm today, the last occasion when I shall address you as the
Chairman of CFL, that no assignment has given me such pleasure and a sense of
fulfillment as working with you all. CFL has been a role model, a
commonwealth, in a co-operative effort to build a great company, anchored in
values and every aspect of what is commonly known today as 'corporate
governance'. You have indeed won many prizes; but the most precious
treasure is the loyalty and sense of belonging of the men and women who were
with you earlier, and who are happily still with you".
1967 - On December 10, Mr. Morarji Desai, the
then Deputy Prime Minister of India, dedicated the fertiliser plant to the
nation, in the presence of Mr. Kasu Brahmananda Reddy, the then Minister of
Andhra Pradesh. Grandhi Ramamurthy, a local farmer, was given the honour
of cutting the ribbon. The 245 ft high Urea prill tower was on of the
tallest industrial structures in India then. Though not operational today,
it still presents a formidable sight, towering against the skyline, recalling
old memories for those who were associated with its operation.
1970 - The 'GROMOR farmer' was
developed as a marketing symbol and introduced on their bags to spread the message of 'higher yields,
bigger profits'. Today, farmer households across their addressable markets identify CFL's brand by
this symbol.
1971 - The 'Cormondel Lecture' was
instituted to provide a forum for thinker, economists, social and agricultural
research scientist around the world to share their thoughts on issues of global
concern such as food security, environment and extension activity. The
'Borlaug Award' , instituted in honour of Nobel Laureate Dr Norman Borlaug
(father of the Wheat revolution), honours eminent men of science and industry
for their distinctive contribution to the cause of agriculture. This
reflects CFL's concern to develop a symbiotic interaction between agriculture,
industry and academia.
1976 - Their fertiliser retail outlet at Secunderabad got a boost with garden
lovers fervently seeking small quantities of fertilisers for bigger and richer
blooms and fruit.
1977 - CFL completed a decade of
participation in augmenting agricultural production for the nation. Its
vital role covered soil nourishment, sharing agronomic expertise, supporting
agricultural education and rewarding research - all of which had progressively
grown in width and depth during the decade.
1980-90 - Plans to diversify were
afoot. A 'groundbreaking' ceremony was performed in November 1980 at
Chilamkur (Andhra Pradesh), which is rich in limestone deposits, to set up a
one million tonne cement plant. The fully computerised plant (designed by
world-renowned cement manufacturer Krupp Polysius of West Germany) was commissioned
in 1984. It was later sold to India Cements in 1990.
1995-99 - Chevron Chemical Company
divested its stake in favour of E.I.D.Parry (I) Limited in 1995, followed by
IMC in 1999. E.I.D.Parry (I) Limited acquired majority shareholding in
CFL, making it a part of Murugappa Group, a highly reputed industrial
conglomerate.
2000 - CFL's growth over the years has been
punctuated with several path-breaking modernisation / upgradation programmes.
Begun in 1975, the programme gathered momentum in 1992-95, when the
Sulphuric Acid, Phosphoric Acid and Complex Granulation plant were
debottlenecked. Production capacity went up from the original 247,000 MT
to 400,000 MT. On September 29, Mr N Chandrababu Naidu, the then
Chief Minister of Andhra Pradesh, inaugurated a new complex granulation
train. This further augmented capacity to 600,000 MT, a boon to the
entire farming community.
2003 - On July 12, CFL consolidated its
business by acquiring controlling stake in Godavari Fertilisers & Chemicals
Limited (GFCL).
To optimise synergy of operations in the Group, the Farm
Inputs Division of E.I.D.Parry (I) Limited was merged with CFL on December 1.
2004 - Mr. V Ravichandran took over as
President & WTD on January 22. Mr A Vellayan took over as Chairman on
September 1. Other Directors on the Board are Mr. J Jayaraman, Mr M M
Murugappan, Mr T M M Nambiar, Mr M K Tandon, Mr D E
Udwadia, Mr S Viswanathan and Mr K A Nair. The first post merger
AGM of the company was held on July 15.
Future Plans :-
The company is on the look out for opportunities for growth through
acquisition of existing phosphatic fertiliser units, especially in the eastern
coast. It will consider opportunities for trading in finished fertilisers at
the appropriate time. The members would be informed of further developments in
this regard as and when they materialise.
Awards / Recognition :-
In recognition of the efforts put in by the company towards higher
productivity, energy conservation, better environment and better management practices,
the company was given the following awards during the year :-
·
FAI’s “Best Operating Phosphoric Acid Plant” for the year 2001. This is
the 5th time the company has received this award in the last 7
years.
·
CII’s “National Award for Excellence in Energy Management” for the year
2001. This is the 2nd consecutive year company has received the
award.
·
A. P. Pollution Control Board’s award for “Waste Minimisation at Source
and Adopting Cleaner Technologies.”
·
A. P. Government’s “Best Management Award for Industrial Relations,
Labour and Productivity.
·
CII’s award for “Best Rainwater Harvesting Practices”.
The company imports raw materials, stores & spare parts, capital
goods and trading goods from Europe and Far East against L/C, D/A and D/P
terms.
It employs around 2000 persons in its' set up.
The company’s fixed assets of important value include :
v
Land-Freehold,
v
Leasehold,
v
Buildings, Roads,
v
Railway Siding,
v
Plant & Machinery,
v
Technical know-how,
v
Office Equipment,
v
Furniture & Fittings
v
Vehicles
Operations
Both Visak and Ennore Plants achieved new all time high levels of production
with improved efficiencies. Production of Complex fertilisers registered an
increase of 27% over the previous year. This has been possible through sweating
of the assets, strengthening of infrastructure facilities and entering into
long term alliances with raw materials suppliers.
The seasonal conditions were satisfactory throughout the year in the
Company's addressable markets. The Company achieved new in terms of sales of
Complex Fertilisers. During the year under review, the sale volume of Complex
Fertilisers registered an increase of 18.5% over the previous year. This could
be achieved due to optimal product-mix, brand building efforts and better
logistics management. The performance of the Pesticides business was
satisfactory despite negative growth recorded by the Industry.
Total sales for the year was Rs.18470.000 Millions compared to Rs.15250.000
Millions in the previous year, recording a growth of about 21%. The Profit
Before Interest and Taxation for the year was Rs.1393.700 Millions (previous
year Rs.1116.000 Millions). The Profit After Tax for the year was Rs.835.500
Millions compared to Rs.692.000 Millions in the previous year.
Outlook:
With increased water storage levels in the reservoirs and also better
ground water availability, the demand for phosphatic fertilisers is expected to
go up further in the coming year. There is also an increase in the area under
irrigation in CFL's addressable markets. The shift in cropping pattern in the
country from traditional food grains to crops such as maize, sugarcane, pulses,
oil seeds etc., besides increased usage of BT seeds, will also lead to
increased fertiliser consumption. While there will be an increase in the
country's domestic production of phosphatic fertilisers, this will be absorbed
by the increased demand. It is also expected that there will be an increase in
the usage and demand for micronutrients like sulphur.
The availability of phosphoric acid will be a critical factor with no
fresh phosphoric acid production capacity coming up and production/supply
constraint in some producing countries. CFL expects to make progress in respect
of its joint venture in Tunisia for manufacture of phosphoric acid for which an
MOU has been concluded during 2005-2006.
As regards the pesticides operations, CFL will continue to focus on
marketing of specialty products in domestic markets and aggressive market
expansion in the export market esp. for Phenthonate and Profenofos. In this
context, the proposed acquisition of equity stakes in
Ficom Organics Limited will help in expanding the product range and
strengthening the customer base.
In domestic market, the company will continue to introduce new molecules
in growing product segments like fungicides and herbicides to reduce its
dependence on generic products. Through co-marketing tie-ups and alternate
source registrations, CFL has built a portfolio of specialties and this will
remain the focus in the future years also.
FINANCE:
The company continued to maintain its healthy credit rating of P1+ from
CRISIL for short-term borrowings and 'AA' for long-term borrowings with a
'stable' outlook.
During the year, CFL generated Rs.1677.600 Millions from its operations
before working capital changes. There was however a significant increase in the
subsidy outstanding from Government of India as subsidy dues from November 2005
remained unsettled till end March 2006. There was also an increase in the
inventory levels of certain key raw materials and finished products. As a
result of this, the net working capital recorded an increase of Rs.2049.400
Millions, thus resulting in a net deficit cash flow of Rs.371.800 Millions from
operating activities for the year.
In view of the aforesaid increase in the level of subsidy receivables and
inventory, there was an increase in the working capital borrowings during the
last quarter of the year, which in turn resulted in higher interest cost.
Through a judicious mix of foreign currency, Buyer's Credit, Export
Packing Credit and short-term rupee borrowings at sub MIBOR rates, the company
was able to finance its working capital needs at a highly competitive rate in spite
of a sustained rise in interest rate.
Business:
CFL is one of the leading producers of phosphatic fertilisers in India.
It produces and sells complex fertilisers of different grades and Single Super
Phosphate (SSP). The company also manufactures and sells 'Bentonite Sulphur'
which provides 'sulphur' to the soil. The company also trades in potash,
another key plant nutrient. These products are sold under well established
brand names 'Gromor', 'Paramfos', 'Parry Super' and 'Parry Gold'. CFL has a strong
market presence and dealer network in Andhra Pradesh, Orissa, Chattisgarh,
Tamil Nadu, Karnataka, parts of Madhya Pradesh and West Bengal.
The company's fertiliser plants are located at Visakhapatnam (Andhra
Pradesh), Ennore and Ranipet (both in Tamil Nadu) and has a combined production
capacity of 1.175 Millions tonnes of complex fertilisers and 0.132 Millions
tonnes of SSP.
The company is also in the business of manufacturing and marketing of
pesticides with a technical manufacturing unit at Thane (Maharashtra) and a
formulation plant at Ranipet (Tamil Nadu). Pesticides account for nearly 10% of
the company's total turnover. The company is proposing to set up a formulation
unit at Jammu (J&K). The company has begun the process of acquiring majority
stake in Ficom Organics Limited, subject to regulatory and other
approvals.
ORGANISATION - PROFILE:
Coromandel Fertilisers Limited (CFL), a leading manufacturer of farm inputs
comprising of phosphatic fertilisers and pesticides, is a constituent of the
Murugappa Group and is a subsidiary of EID Parry (India) Limited (EIDP), which
holds 69.05% of the equity of CFL.
CFL holds 45.07% of equity in Godavari Fertilisers and Chemicals Limited
(GFCL), another leading manufacturer of phosphatic fertilisers in the state of
Andhra Pradesh.
The company has 5 manufacturing/formulation units located in the States
of Andhra Pradesh, Tamil Nadu and Maharashtra. The company's products are
marketed through 13 marketing offices and a network of over 7,000 dealers, who
act as an interface between the company and the ultimate consumers, viz.,
farmers.
Promoters belonging to the Murugappa Group:
1EID Parry (India) Limited, and subsidiaries
2Dodavari Fertilisers and Chemicals Limited
3Parry Engineering
and Exports 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 Foundation
22 AMM Medical
Foundation
News :
Coromandel Fertilisers Limited to provide Technical and Management
Expertise to South African Major
Murugappa Group’s Fertiliser Forays into South Africa
Coromandel Fertilisers Limited (CFL), a leading manufacturer of
phosphatic fertilisers in India has entered into an agreement with Foskor Limited,
wholly owned subsidiary of Industrial Development Corporation (IDC), South
Africa for acquiring 2.5% of its equity stake. Coromandel Fertilisers Limited
has also entered into a business assistance agreement with Foskor Limited to
provide assistance in the areas of plant performance, procurement, logistics,
etc to improve Foskor’s financial performance.
Foskor Limited is one of the largest producers of phosphoric acid in the
world and exports large quantities of phosphoric acid to India. Foskor Limited
holds 5% equity in Godavari Fertilisers and Chemicals Limited (GFCL), India, a
part of Murugappa Group with an agreement to supply phosphoric acid to CFL and
GFCL. This strategic alliance cum business assistance arrangement entered by
Coromandel Fertilisers Limited with Foskor will lead to improved availability
of phosphoric acid to the Indian sub-continent and especially to CFL &
GFCL. This strategic tie up will also help CFL and GFCL to further consolidate
its market position in South East coast of India. Further the business
assistance arrangement with Foskor gives CFL option to increase its stake up to
16.5% over a period of time.
At the announcement of the agreement at Johannesburg, Mr. Raishibe
Morathi, IDC’s acting Chief Executive and President said, “They are pleased
that they have concluded this agreement with Coromandel Fertilisers Limited who
has a sound track record in turnaround strategies and going forward, they hope
that the relationship will yield mutually beneficial results among all the
stakeholders.
Mr. A Vellayan, Director – Marketing, Murugappa Group and Chairman,
Coromandel Fertilisers Limited, said “This is a culmination of a process of IDC
to seek a strategic equity partner, to inject strategic technical skills and
access to better technology. The capability of Coromandel Fertilisers to manage
a diverse supply chain, and its expertise to increase productivity of quality
products under environmental friendly operations will assist Foskor to
improvising its competitiveness to global best practice.” “This has
strengthened the long standing and proven relationship between the two
companies. This agreement will also help Coromandel and Godavari to further
consolidate its market position in India,” he further added.
CMT REPORT (Corruption,
Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.43.70 |
|
UK Pound |
1 |
Rs.85.90 |
|
Euro |
1 |
Rs.58.25 |
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 |
|