MIRA INFORM REPORT

Report Date :

17.11.2007

IDENTIFICATION DETAILS

Name :	ZUARI INDUSTRIES LIMITED
Registered Office :	Jai Kisaan Bhawan, Zuarinagar, Goa – 403 726
Country :	India
Financials (as on) :	31.03.2007
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 31250000
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

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	Installed Capacity	Actual Production
Ammonia	Tones	660	231490
Urea	Tones	1140	400178
Compounded fertilizers of the grades : N.P.K. 28:28:0 19:19.19 14:35:14 18:46:0	Tones	1100
D.A.P. 18:46:0 20:20:0 10:26:26 19:19:19 17:17:17 12:32:16	Tones	1100	141109 219118 326496 26682
Argon (SM3)	Tones	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 :

	As on 31.03.2006 Rs. in Millions
Cash credits including demand loans	1960.975
Banks	1728.563
Total	3689.538

Unsecured Loans :

	As on 31.03.2006 Rs. in Millions
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
Memberships :		Confederation of Indian Industry
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

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, 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		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		294.400	294.400	294.400
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		7519.300	3670.000	3475.400
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		7813.700	3964.400	3769.800
LOAN FUNDS
1] Secured Loans		4049.300	3689.500	3819.300
2] Unsecured Loans		4530.600	4520.500	2050.600
TOTAL BORROWING		8579.900	8210.000	5869.900
DEFERRED TAX LIABILITIES		0.000	0.0000	0.000
TOTAL		16393.600	12174.400	9639.700
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1731.800	1725.800	1734.700
Capital work-in-progress		55.900	119.800	49.600
INVESTMENT		6743.200	4959.200	5086.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3340.000	2457.400	2250.900
	Sundry Debtors	5626.600	6631.300	4316.700
	Cash & Bank Balances	1837.400	344.600	178.900
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	1983.600	1502.300	1036.600
Total Current Assets		12787.600	10935.600	7783.100
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	4669.500	5410.700	4926.400
	Provisions	255.400	213.700	168.900
Total Current Liabilities		4924.900	5624.400	5095.300
Net Current Assets		7862.700	5311.200	2687.800
MISCELLANEOUS EXPENSES		0.000	58.400	81.500
TOTAL		16393.600	12174.400	9639.700

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		23972.400	21806.323	17571.061
Other Income		3956.300	339.327	348.238
Total Income		27928.700	22145.650	17919.299
Profit/(Loss) Before Tax		4079.300	347.702	279.612
Provision for Taxation		143.900	86.000	11.400
Profit/(Loss) After Tax		3935.400	261.700	268.200
Imports :
	Raw Materials		7435.116	5377.510
	Stores & Spares		3.468	24.411
	Capital Goods		0.000	5.416
	Others		2305.907	951.409
Total Imports			9744.491	6358.746
Expenditures :
	Manufacturing Expenses	835.900	821.000	776.600
	Increase/(Decrease) in Finished Goods	488.400	(23.704)	(182.696)
	Interest	610.300	549.300	546.500
	Depreciation & Amortization	173.100	160.200	161.000
	Other Expenditure	0.000	23.766	23.594
Total Expenditure		2107.700	1530.562	1324.998

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2006 1 Quarter	30.09.2006 2 Quarter
Type
Sales Turnover	4018.600	8327.800
Other Income	106.600	129.200
Total Income	4125.200	8457.000
Total Expenditure	3922.400	7802.300
Operating Profit	202.800	654.700
Interest	116.600	54.400
Gross Profit	86.200	600.300
Depreciation	42.700	42.800
Tax	2.200	2.300
Reported PAT	26.600	409.800

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	14.09	1.18	1.49
Net Profit Margin (PBT/Sales)	(%)	17.02	0.02	1.59
Return on Total Assets (PBT/Total Assets}	(%)	42.51	4.94	6.32
Return on Investment (ROI) (PBT/Networth)		0.52	0.08	0.07
Debt Equity Ratio (Total Liability/Networth)		1.72	3.48	2.35
Current Ratio (Current Asset/Current Liability)		2.59	12.61	1.52

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 subject 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.

Directors Report:

Capital Projects: 

 During the year, the 31 year old NPK Plant Dryer was replaced. During this replacement, the shell diameter was

increased from 3.5 metres to 4.0 metres to increase its effectiveness. 

 Besides the above, the following Energy Saving Projects were implemented during the year: 

 (i) In the Ammonia Plant, the raw naphtha heater as well as the feed stock heater were revamped to improve

their efficiencies to 85% from 75%. 

 (ii) In the NPK Plant, an air heater was installed for heating the dryer inlet air by using waste heat from the Urea

Plant. This resulted in putting off the dryer furnace in the NPK Plant and consequent saving in Furnace oil. 

Indian Furniture Products Limited (IFPL): 

IFPL, a wholly owned subsidiary of the Company, is engaged in manufacturing Ready-To-Assemble (RTA) furniture of international quality through its state-of-the-art plant at Kakkalur near Chennoi. The factory has a floor area of 225,000 sq. ft. and has a capacity to produce 200,000 units of furniture annually. The Company has been awarded with ISO 9001:2000 Certification by TUV Suddeutschland accredited by TUV Germany. 

The Company has achieved a turnover of Rs. 776.300 Millions during the current financial year. It has strengthened its mass distribution channel under 'ZUARI' brand which is an all India reach. The Company is also strengthening its business under Office system segment and is poised for a quantum jump in turnover in the next financial year. 

 b) Zuari Seeds Limited (ZSL): 

ZSL, a subsidiary of the Company, is engaged in R&D, Production & Marketing of hybrid seeds. The Company

has achieved a turnover of Rs. 242.9 Millions  

During the current financial year the company continues to focus on providing superior quality hybrid seeds to the farming community. The Company is in the process of releasing the BT Cotton which it has developed for commercial sales. The Company's seeds are also exported to Bangladesh and other neighbouring countries. 

c) Simon India Limited (SIL): 

SIL, a wholly owned subsidiary of your Company, is engaged in Engineering Procurement Construction (EPC) activities has achieved a turnover of Rs.248.2 Millions during the current financial year. SIL has supplied and successfully commissioned a new Drying Tower for Hindustan Zinc Ltd. at their Sulphuric Acid Plant in Chittorgarh. 

SIL continued to provide the Project Management Consultancy services to Saudi Formaldehyde Chemical Company Ltd. (SFCCL) Saudi Arabia. 

SIL has orders for providing detailed Engineering & Procurement Assistance, Engineering Services and Technical Consultancy for Gujarat Narmada Fertiliser Corporation and Durgapur Chemicals. 

d) Zuari SEZ Limited: 

Zuari SEZ Limited was incorporated on 6th December, 2006, with an objective to set up and develop Special Economic Zone (SEZ) for Information Technology (IT) and Information Technology Enabled Services (ITES). Zuari SEZ Limited has become 100% subsidiary of the Company effective 21stFebruary, 2007. The Company is yet to commence its business. 

Joint Venture Companies: 

a) Zuari Investments Limited: 

Zuari Investments Limited, a joint venture with Chombal Fertilisers & Chemicals Limited, is a member of National Stock Exchange (NSE) for equity as well as Futures & Option (F&O) segment, a depository participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). The company is also a member of Over the Counter Exchange of India and o Category-II Registrar and Share Transfer Agent registered with Securities and Exchange Board of India. 

During the year, the Company has become the member of Bombay Stock Exchange (BSE) to complete its bouquet of Braking Services. 

The Company has promoted Zuari Chambal Insurance Solutions Limited (ZCISL) as its wholly owned subsidiary. ZCISL has commenced operations as a Direct Broker for Life and Non-Life segment after receiving the license from Insurance Regulatory and Development Authority (IRDA). 

Zuari Investments Limited has become one stop shop for Stock Braking, Depository Services, Investment Advisory Services and Insurance Braking Services (through its subsidiary) and is fully poised to reap the benefits of buoyant capital market. 

b) Zuari Maroc Phosphates Limited (ZMPL) : 

Zuari Maroc Phosphates Limited (ZMPL) was floated as a Special Purpose Vehicle (SPV) and was 51:49 joint venture with Maroc Phosphore S.A., Morocco, which acquired majority stake in Paradeep Phosphates Limited (PPL), under the Scheme of Disinvestment. 

ZMPL ceased to be a subsidiary of Zuari Industries Limited effective 71h September, 2006, following transfer of 1% shareholding in favour of Maroc Phosphore S.A. 

PPL is a subsidiary of ZMPL. PPL sales and operating revenue including subsidy for the year 2006-07 was Rs.20670.000 Millions (previous year- Rs.19770.000 Millions) 

PPL continues to improve its sales and marketing efficiency by increasing the marketing share in the primary market. The sales for the year including traded fertilizers were 14,60,267 MT as compared to 14,40,356 MT during the previous year. 

c) Zuari Indian Oil Tanking Limited (ZIOL): 

ZIOL a 50:50 joint venture between Zuari Industries Limited and Indian Oiltanking Limited (IOTL) has state-of-the-art terminalling facility for petroleum products namely Naphtha, Motor Spirit, High Speed Diesel & Superior Kerosene. The Terminal at Goa with 71000 KL tankage is situated 85 M above sea level with a 14 KM long piggable pipeline from Mormugao Port Trust (MPT) jetty. 

The Company provides terminalling services to Zuari Industries Limited, Hindustan Petroleum and Bharat Petroleum. ZIOL also provides value added services like ethanol blending in petrol to the oil companies. 

 In the year 2006-07, the terminal has achieved a throughput of 605,000 KL, an increase of 4.5 over last year. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

The Board of Directors is pleased to present the business analysis and outlook for Zuari Industries Limited (ZIL) based on the current Government policies and market conditions. The Company's business is manufacture and sale of fertilisers and trading in agri inputs including pesticides. 

(i) Industry Scenario: 

 The agricultural sector has seen an overall growth in the year 2006-07 on account of satisfactory monsoon in the country. However, the fertilizer industry had to face significant challenges in receipt of its dues from Central Government on account of inadequate provision of subsidy in the Central Government budget. 

Government of India constituted a Working Group under the Chairmanship of Dr. Y.K. Alagh to review the performance of Stage I and Stage II of the New Pricing Scheme for urea and recommend the policy for Stage III commencing from 1st April, 2006. Based on the review of these recommendations, Government of India on 8th March, 2007 announced the policy for Stage Ill which is effective from 1st October, 2006 to 31st March, 2010. In Stage III, the concept of six groups has been continued with certain modifications in energy norms, capacity utilization, updation of conversion and capital related costs and equated freight. Government of India has provided some incentives for additional low cost urea production from gas based plants and also set in milestones for conversion of non-gas based units to natural gas/LNG. 

Government of India has entrusted the job of cost price study of DAP (imported and indigenous), MOP and Complex Fertilisers to Tariff Commission to recommend the delivered price of these fertilizers after conducting a detailed study of various parameters such as capacity, utilization, nutrient efficiency, working capital requirements etc. Tariff Commission is expected to complete the study and submit the recommendations during the year. 

 (ii) Opportunities: 

Area under high fertiliser consuming crops like sugarcane, Bt cotton and soyabean is increasing steadily in Zuari's marketing territory. Coverage under irrigation is likely to increase further owing to higher allocation for water shed/ irrigation schemes by GOI. This will lead to further increase in demand for complexes as well as urea in the coming years.

Company plans to increase capacity of complexes by 25% in next three years. 

(iii) Threats:

Company's urea and complex fertiliser plants are based at Zuarinagar Goa, which is on the western coast. Plant vicinity to sea port facilitates imports of raw material like naphtha, ammonia, potash etc.; however the company does not have a market in the neighborhood of Konkan region, owing to geographical reasons. Finished products are required to be transported to upcountry areas of western Maharashtra and northern Karnataka entailing a minimum dead run of about 150 kilometers. This puts pressure on logistics and increases the freight cost. 

(iv) Future Outlook: 

Government policy on urea stipulates conversion of Company's naphtha based urea plant to gas/RLNG by 31/3/2010. With increase in domestic gas production from Krishna - Godavari basin, availability of gas for fertiliser industry is expected to increase substantially from 2008.

Company is hopeful of switching over to gas in line with the schedule stipulated by the Government. 

Agreement wherein there will be a review of the various risks that have been ascertained by the management. 

(v) Operating results of the Company: 

Urea production during the year was 402,581 MT: 

In the NPK Plant, 305,793 MT of Sampurna (19:19:19) and 34,792 MT of Samarth (10:26:26) grade were produced. The combined production of 340,585 MT in the NPK Plant is an all time record. This was achieved inspite of the shutdown of the plant for nearly a month in April 2006 for replacement of the Dryer shell. 

In the DAP Plant, Samrat, Samarth and Sampatti (12:32:16) grades were produced, totalling to 395,989 MT which is again an all time record. 

Argon Recovery Unit remained under shutdown throughout the year due to unremunerative market conditions. 

(vi) Company's strength: 

As per the brand evaluation research conducted by the Company recently, 'aaikisaan' is seen as a well developed and preferred brand in Maharashtra, Karnataka and Goa. Company's 'Jaikisaan Sangam' programme has been a valuable tool in building the customer relationship, which the Company plans to extend to the entire marketing territory covering over 50,000 farmers. Company has also commenced toll-free telephone service known as 'Hello Jaikisaan' to provide advisory services to farmers. With wide network of dealers and broad range of agro inputs and services, the Company enjoys lead over others in brand recall and top of mind awareness. 

(vii) Material development in human resources: 

The Company continued to give priority to employees training and development across all levels. Several initiatives have been taken for unlocking human resources potential, developing higher linkages of compensation with individual performance, cost optimization and resource leveraging. 

Marketing: 

Company's marketing areas are Goa, Karnataka, Maharashtra and parts of Andhra Pradesh and Tamil Nadu. Monsoon during the year was favourable in most parts of the marketing area resulting in company achieving sales of 14,42,486 MT. Company's complex grade Samorth (10:26:26) registered highest sales of 2,23,246 which is 7.5% increase over last year. Sales of Samrat (18:46:0) at 1,91,904 MT recorded an increase of 30% over previous year.

Sale of Sampurna at 2,76,804 MT was 17% lower compared to last year. Total sale of indigenous complexes at 7,10,600 MT nearly equaled last year sale of 7,13,066 MT. 

Company further consolidated its trading operations in peripheral markets of Tamil Nadu and Andhra Pradesh besides achieving highest ever sales of 1,67,557 MT in MOP i.e. 29% increase over previous year. Company sold 79,874 MT of imported DAP compared to 60,213 MT during the previous year.

In the category of speciality fertilisers and agro chemicals, the Company strengthened its position with increased volume (1 188 MT v/s 604 MT of previous year in speciality fertilisers and 3000 KL v/s 2000 KL of previous year in case of agro chemicals). 

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

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. 39.35
UK Pound	1	Rs. 80.52
Euro	1	Rs. 57.56

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	9
--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		72

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING 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.	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