MIRA
INFORM REPORT
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Report Date : |
17.12.2008 |
IDENTIFICATION
DETAILS
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Name : |
COROMANDEL FERTILISERS LIMITED |
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Registered Office : |
1-2-10, Sardar Patel Road, Coromandel House’, Secunderabad, Hyderabad – 500 003, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
16.10.1961 |
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Com. Reg. No.: |
01-00892 |
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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 : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 40000000 |
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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 : |
1-2-10, Sardar Patel Road, Coromandel House’, Secunderabad, Hyderabad – 500 003, Andhra Pradesh, India |
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Tel. No.: |
91-40-2784 2034 / 7212 |
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Fax No.: |
91-40-2784 4117 |
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E-Mail : |
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Website : |
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Factory : |
Fertiliser Plants :
v Sriharipuram, Po Box No. 1116, Malkapuram
Post, Visakhapatnam - 530 011. Andhra Pradesh, India. Fax: 91-891-2577665 v Fertilisers / Pesticides Factory Ranipet -
632 401. Fax :
91-4172-272264 v Compound Fertilisers Factory Ennore,
Chennai - 600 507. Tamilnadu, India. 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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Name : |
Mr. M. K. Tandon |
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Designation : |
Former Chairman
and Managing Director National
Insurance Company Limited |
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Name : |
Mr. D. E. Udwadia |
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Designation : |
Solicitor and
Advocate |
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Name : |
Mr. S. Viswanathan |
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Designation : |
Former Group
Director Finance Murugappa Group |
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Name : |
Mr. V. Ravichandran |
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Designation : |
President and
Wholetime Director |
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Name: |
Mr. A Vellayan |
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Designation: |
Chairman |
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Name: |
Mr. V
Ravichandran |
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Designation: |
President and
Wholetime Director |
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Name: |
Mr. P Nagarajan |
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Designation: |
Chief Financial
Officer |
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Name: |
Mr. Arun leslie
George |
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Designation: |
General Manager |
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Name: |
Mr. S
Govindarajan |
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Designation: |
General Manager |
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Name: |
Mr. S Navaneetham |
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Designation: |
General Manager |
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Name: |
Mr. N Seetaram |
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Designation: |
General Manager |
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Name: |
Mr. G
Veerabhadram |
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Designation: |
General Manager |
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Name: |
Mr. K Warriar |
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Designation: |
General Manager |
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Name : |
Mr. M M. Venkatachalam |
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Designation : |
Director |
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 |
20.11.1992 |
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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 |
18.10.1993 |
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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 |
09.06.1997 |
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Previous Employment |
Senior Vice President – Visaka Industries Limited |
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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 |
02.09.1991 |
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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 |
27.04.1992 |
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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 |
03.11.1967 |
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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 |
24.04.1973 |
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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 |
03.11.1967 |
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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 |
01.06.1996 |
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Previous Employment |
Assistant Manager – Safety, Voltas Limited, Patancheru |
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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. N Seetaram |
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Designation |
General Manager |
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Name |
Mr. M 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 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
(As on 30.09.2008):-
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Names of
Shareholders |
No. of shares |
Percentage of Holding |
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Shareholding of
Promoter and Promoter Group2 |
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Indian |
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Individuals/Hindu
Undivided Family |
1354305 |
0.97 |
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Bodies Corporate |
87742745 |
62.72 |
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Any Other |
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- Trust |
12570 |
0.01 |
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Public shareholding3 |
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Institutions |
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Mutual Funds/UTI |
9126957 |
6.52 |
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Financial Institutions/
Banks |
68933 |
0.05 |
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Insurance Companies |
6248985 |
4.47 |
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Foreign Institutional
Investors |
3616613 |
2.59 |
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Any Other |
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- Foreign Bank |
920 |
0.00 |
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Non-institutions |
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Bodies Corporate |
2502061 |
1.79 |
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Individuals |
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I. Individual
shareholders holding nominal share capital up to Rs. 0.100 million |
14837048 |
10.61 |
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II. Individual
shareholders holding nominal share capital in excess of Rs. 0.100 million |
7687142 |
5.49 |
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Any Other |
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- Foreign Nationals |
47905 |
0.03 |
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- Foreign Companies |
250 |
0.00 |
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- Overseas Corporate
Bodies |
4979280 |
3.56 |
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- Trust |
220938 |
0.16 |
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- NRI's |
1270591 |
0.91 |
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- Clearing Members |
179705 |
0.13 |
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Total |
139896948 |
100.000 |
Statement showing Shareholding of persons belonging to
the category "Promoter and Promoter Group"
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Names of Shareholders |
No. of Shares |
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E.I.D.Parry (India) Ltd. |
87719035 |
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Mr. M M Veerappan |
188865 |
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Mr. M V Muthiah |
108165 |
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Mr. M V Subramanian |
107875 |
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Mr. M M Muthiah |
94500 |
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Mr. A V Arunachalam |
76505 |
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Mr. M V Valli Murugappan |
70000 |
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Mr. S Vellayan |
63850 |
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Mrs. Lalitha Vellayan |
56700 |
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Mr. Arun Alagappan |
51470 |
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Mr. A A Alagammai |
51450 |
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Mr. M V Subbiah |
47865 |
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Mr. V Narayanan |
47685 |
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Mr. V Arunachalam |
44885 |
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Mr. M M Murugappan |
43000 |
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Mr. A M Meyyammai |
41420 |
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Mr. Meyyammai
Venkatachalam |
40400 |
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Mr. M A M Arunachalam |
39330 |
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Mr. M V Ar Meenakshi |
35650 |
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Mr. A Vellayan |
29255 |
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Mr. Sigapi Arunachalam |
27165 |
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Mr. A Venkatachalam |
26335 |
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A M M Arunachalam Sons Private
Ltd |
23500 |
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Mr. M V Murugappan |
20285 |
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Mr. M V Seetha Subbiah |
16280 |
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Mr. M.A.Alagappan |
15000 |
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Ar Lakshmi Achi Trust |
12570 |
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Mrs. Lakshmi
Venkatachalam |
3085 |
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Mr. M.V.Murugappan |
2835 |
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Mr. Alagappan M A |
2270 |
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Mr. M V Murugappan |
1030 |
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Mr. M Seethalakshmi |
705 |
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Mrs. Meenakshi Murugappan |
330 |
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Carborundum Universal
Limited |
165 |
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Mr. M M Venkatachalam |
80 |
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M. M.Muthiah Sons Private
Ltd |
45 |
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Mr. M M Seethalakshmi |
35 |
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TOTAL |
89109620 |
Statement showing
Shareholding of persons belonging to the category "Public" and
holding more than 1% of the total number of shares
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Name of the
shareholder |
Number of shares |
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Mr. Hitesh Satishchandra Joshi |
3352981 |
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Life Insurance Corporation Of India |
2927628 |
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Icici Prudential Dynamic Plan |
2471142 |
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Foskor Limited |
2400000 |
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Group Chimique Tunisien |
2400000 |
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Icici Prudential Fusion Fund Series Ii |
1873000 |
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Total |
15424751 |
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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PRODUCTION STATUS
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Particulars |
31.03.2008 Metric Tones |
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Capacity, Production, Sales, Consumption and stocks |
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Quantitative information in respect of goods
manufactured/ purchased |
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(A) Licensed Capacity per annum |
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I] Fertilisers |
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Amonium Phosphatic Fertilisers |
2310000 |
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Di-Ammonium Phosphate (DAP) |
815000 |
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Single Super Phosphate |
132000 |
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In terms of plant nutrients,
this works out to |
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N (Nitrogen) |
572600 |
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P2O5 (Phosphorus Pentoxide) |
1035770 |
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The above capacities for the year
ended March 31, 2008 include 685,000 MT of Ammonium Phosphatic Fertilisers
and 8,15,000 MT of DAP capacity taken over, pursuant to the amalgamation of
Godavari Fertilisers and Chemicals Limited with the Company. (Refer Note II
on Schedule 17). In terms of plant nutrients these work out to 242,600 MT of
N and 614,650 MT of P2O5. |
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II] Plant Protection Products Plant Protection Products are
not covered by the list of industries in respect of which industrial
licensing is compulsory. |
Not Available |
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(B) Installed
Capacity per annum |
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(as certified by the management and not verified by the auditors,
being a technical matter) |
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(i) Fertilisers - Phosphatic fertilisers of various grades equivalent
in terms of plant nutrients |
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N (Nitrogen) |
411100 |
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P2O5 (Phosphorus Pentoxide) |
758520 |
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The installed
capacity in terms of products is capable of being varied within the overall
capacity in terms of nutrients shown above. The above capacities for the year
ended March 31, 2008 include 172,600 MT of N and 439,650 MT of P2O5 taken
over, pursuant to the amalgamation of Godavari Fertilisers and Chemicals
Limited with the Company. (Refer Note II on Schedule 17). |
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(ii) Plant Protection Products |
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Technicals |
13905 |
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Formulations - Liquids (in KL) |
10900 |
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Formulations - Others |
5600 |
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(C) Production |
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(i) Fertilisers |
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Ammonium Phosphatic
Fertilisers |
1381524 |
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Di-Ammonium Phosphate
(DAP) |
567785 |
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Single Super Phosphate |
67829 |
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In terms of plant
nutrients, this works out to |
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N (Nitrogen) |
346146 |
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P2O5 (Phosphorus
Pentoxide) |
620679 |
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(ii) Plant Protection Products (including third party
production) |
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Technicals |
6483 |
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Formulations - Liquids
(in KL) |
4916 |
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Formulations - Liquids (in KL) |
2829 |
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Formulations - Others |
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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 § Andhra Bank |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name 1 : |
Price Waterhouse Chartered Accountants |
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Address : |
6-3-550, II Floor, L.B. Bhavan, Somajiguda, Hyderabad-500 082, Andhra Pradesh, India |
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Name 2 : |
Mr. V
Kalyanaraman Chartered
Accountant |
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Name 3 : |
Mr. Dantu Mitra Chartered
Accountant |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
175000000 |
Equity Shares |
Rs.2/- each |
Rs.350.000 Millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
139896948 |
Equity Shares |
Rs.2/- each |
Rs.279.794 Millions |
Notes:-
(A) Of the above since
inception:
i)
5806100 Equity Shares of Rs. 2/- each fully
paid-up have been allotted pursuant to contacts without payments being received
in cash
ii)
69278790 Equity Shares of Rs. 2/- each fully
paid-up have been issued as Bonus Shares by capitalization of a part of General
Reserve.
iii)
4409440 Equity Shares of Rs. 2/- each fully
paid-up have been issued at a premium of Rs. 2/- per share to the Debenture
Holders and Public Financial Institutions pursuant to the right exercised by
them for converting a part of their Debentures/ Loan amounts into fully paid-up
Equity Shares.
(B) 4864000 Equity Shares of Rs. 10/- each full paid-up have been brought
back at a price of Rs. 65/- per share from the shareholders pursuant to the
offer for buy back of equity shares made during the year March 31, 2000.
(C) 29749505 Equity Shares of Rs. 2/- each fully paid-up have been allotted
to the shareholders of E.I.D Parry (India) Limited I the ratio of one share of
the Company for every three shares of E.I.D Parry (India) Limited, pursuant to the
scheme of arrangement (demerger) between E.I.D Parry (India) Limited and the
company for the acquisition of Farm Inputs Division of E.I.D Parry (India)
Limited
(D) 831981 Equity Shares of Rs. 2/- each fully paid-up have been allotted to
the shareholders of Ficom Organics Limited in the ratio of 3 shares of the
company for every 11 shares of Ficom Organic Limited pursuant to the Scheme of
Amalgamation between Ficom Organics Limited and Rasilah Investments Limited and
the Company.
(E) 12037182 Equity Shares of Rs. 2/- each fully paid-up have been allotted
to the shareholders of Godavari Fertilizers and Chemicals Limited in the ratio
of 3 shares of the company for every 2 shares of Godavari Fertilizers and
chemicals Limited pursuant to the scheme of Amalgamation between Godavari
Fertilisers and Chemicals Limited and the company.
(F) Of the total Equity Shares Capital, as at March 31, 2008, E.I.D. Parry
(India) Limited (Holding Company) holds 87719035 Equity Shares of Rs. 2/- each
fully paid-up ( 2007: 87719035 Equity Shares)
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
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SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
279.794 |
254.056 |
254.056 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
7664.556 |
4868.621 |
4125.814 |
|
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4] Capital suspense account |
0.000 |
1.664 |
0.000 |
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5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
7944.350 |
5124.341 |
4379.870 |
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LOAN FUNDS |
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1] Secured Loans |
5122.665 |
2664.391 |
2109.306 |
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2] Unsecured Loans |
4897.087 |
2825.213 |
2153.293 |
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TOTAL BORROWING |
10019.752 |
5489.604 |
4262.599 |
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DEFERRED TAX LIABILITIES |
824.671 |
713.434 |
751.641 |
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TOTAL |
18788.773 |
11327.379 |
9394.110 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
8145.480 |
3711.408 |
3580.064 |
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Capital work-in-progress |
108.410 |
112.694 |
56.635 |
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INVESTMENT |
3513.371 |
1740.839 |
1618.093 |
|
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
8648.683
|
4047.265 |
3953.077 |
|
|
Sundry Debtors |
125.895
|
1605.159 |
1067.501 |
|
|
Cash & Bank Balances |
663.164
|
1694.916 |
243.308 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
5939.949
|
4389.333 |
4434.478 |
|
Total
Current Assets |
15377.691
|
11736.673 |
9698.364 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
7319.588
|
5359.884 |
4982.562 |
|
|
Provisions |
1036.591
|
614.351 |
576.484 |
|
Total
Current Liabilities |
8356.179
|
5974.235 |
5559.046 |
|
|
Net Current Assets |
7021.512
|
5762.438 |
4139.318 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
18788.773 |
11327.379 |
9394.110 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
21684.535 |
13673.468 |
18747.063 |
|
|
Other Income |
427.703 |
6981.436 |
0.000 |
|
|
Government Subsidies |
15888.869 |
187.349 |
|
|
|
Total Income |
38001.107 |
20842.253 |
18747.063 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
3334.181 |
1463.475 |
1153.632 |
|
|
Provision for Taxation |
1236.581 |
456.110 |
318.168 |
|
|
Profit/(Loss) After Tax |
2097.600 |
1007.365 |
835.464 |
|
|
|
|
|
|
|
|
Export Value |
608.552 |
653.977 |
218.546 |
|
|
|
|
|
|
|
|
Import Value |
26275.281 |
13108.371 |
13500.326 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
33447.363 |
18661.025 |
|
|
|
Interest |
398.311 |
319.327 |
17593.431 |
|
|
Depreciation & Amortization |
821.252 |
398.426 |
|
|
Total Expenditure |
34666.926 |
19378.778 |
17593.431 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 (1st
Quarter) |
30.09.2008 (2nd
Quarter) |
|
|
|
|
|
|
Sales Turnover |
|
14003.900
|
33914.800
|
|
Other Income |
|
1721.700
|
256.700
|
|
Total Income |
|
15725.600
|
34171.500
|
|
Total Expenditure |
|
12382.300
|
31169.100
|
|
Operating Profit |
|
3343.300
|
3002.400
|
|
Interest |
|
155.500
|
200.500
|
|
Gross Profit |
|
3187.800
|
2801.900
|
|
Depreciation |
|
124.200
|
130.900
|
|
Tax |
|
1125.000
|
846.900
|
|
Reported PAT |
|
1938.600
|
1824.100
|
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt Equity Ratio |
1.19 |
1.03 |
0.85 |
|
Long Term Debt
Equity Ratio |
0.48 |
0.47 |
0.46 |
|
Current Ratio |
1.11 |
1.17 |
1.12 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
4.15 |
3.04 |
2.87 |
|
Inventory |
6.05 |
5.33 |
6.51 |
|
Debtors |
29.18 |
15.95 |
18.46 |
|
Interest Cover
Ratio |
5.77 |
5.58 |
5.80 |
|
Operating Profit
Margin (%) |
11.86 |
10.23 |
9.24 |
|
Profit Before
Interest and Tax Margin (%) |
10.50 |
8.36 |
7.30 |
|
Cash Profit
Margin (%) |
6.82 |
6.59 |
6.32 |
|
Adjusted Net
Profit Margin (%) |
5.46 |
4.73 |
4.38 |
|
Return on Capital
Employed (%) |
28.22 |
18.52 |
18.44 |
|
Return on Net
Worth (%) |
32.11 |
21.20 |
20.45 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
Subject is a leading fertilizers manufacturing company. It
produces wide range of fertilizers and pesticides (technical and formulations).
The company is a subsidiary company of Murugappa group company's EID Parry
(India) Limited EID Parry (India) Limited, along with its subsidiary companies
i.e. Santhanalakshmi Investments Private Limited holds 69.05% equity of the
company.
Subject has production facilities in several places. The company manufactures
Phosphatic Fertilisers of different grades at three plants. The Visakhapatnam
plant is one of India's integrated complex fertilizer unit. This plant has a
sulphuric acid plant, a phosphoric acid plant, a complex granulation plant and
a bagging plant with automatic machines. The Ennore plant has commissioned in
1963, the compound fertilizer unit of this plant was the first integrated
complex fertiliser factory in the private sector. It has two sulphuric acid
plants, a phosphoric acid plant, a complex granulation plant and a bagging
plant. There is a mid-sea facility for loading ammonia and transferring it to
the plant through a submarine pipeline. The Ranipet plant set up in 1906 as
India's first fertilizer plant, this facility is one of India's most modern
'Single Super Phosphate' (SSP) manufacturers today.
The pesticide business of the company encompasses over 35 types of
insecticides, fungicides and herbicides. The company produces pesticides at
Navi Mumbai and Ranipet plant. The first one produces technical-grade
pesticides such as Endosulfan, Monocrotophos, Phenthoate, Cypermethrin,
permethrin and Fenvalarate. The Ranipet plant produces 24 liquid formulations
and 11 powder formulation.
The company is continuously working on to develop its infrastructures and
reduction of operating cost. To achieve this, the company has set up its own 19
MW captive power plant to cater its needs and to reduce dependence on state
power. This facility assures continuous good quality supplies, simultaneously
reducing cost of power. The company has its own jetty. This helps receive cargo
at the plant doorstep and reduces the cost of handling. The jetty is hired out
earning a decent income.
The company quickly identifies opportunities and using the same for their
progress. Looking to the demands of the farmers, when required, the company
imports fertilizers, acting as a trader, and meets market requirement.
The company is managed by top level management professionals.
Their timely decisions have made the organization more efficient one. The
company has exited from high cost operations and stopped running the urea plant
following decontrol of hydrogen prices, the plant having become unviable.
Ammonia plant operations were also suspended after steep increase in naphtha
prices. The company has diversified into manufacturing of cement and has also
commissioned a 1 million TPA cement plant in 1982. However, due to recurring
losses, the unit was sold to India Cements in Nov' 1990.
During the year 2003-04, the company has undergone a merger plan. According
this, the Farm Inputs Division (FIND) consisting of fertilizers and chemical
pesticides business of EID Parry (India) Limited (holding company) merged with
the company. FIND has fertilizer capacity 0.357 million tonnes including single
Super Phosphate (SSP) of 0.132 million tonnes
As part of company's growth plans, it decided to acquire existing phosphatic
fertilizer units, especially in the eastern coast such as Godavari Fertilisers
and Chemicals Limited (GFCL), Madras Fertilisers Limited and Paradeep
Phosphates Limited To give this effect, it has acquired 25.88% of the equity
capital of GFCL from Government of Andhra Pradesh. Further the company acquired
14.93% of the equity capital from the shareholders of GFCL through a public
offer. The company disinvested 10% of the GFCL in favour of strategic Partners,
viz., M/s Foskor Limited, South Africa (5%) and M/s Group Chimique Tunisien,
Tunisia (5%). GFCL has an installed capacity of 0.832 million tonnes of DAP and
complex (NP/NPK) fertilizer at its located in Kakinada, Andhra Pradesh. This
acquisition has enabled both CFL and GFCL to leverage on the combined strength
and reap the synergy benefits in term of raw materials sourcing, product range,
market realization and financing costs.
In the year 2004-05, the company has entered a Business Assistant Agreement
(BAA) with M/s Foskor Limited, a wholly owned subsidiary of Industrial
Development Corporation of South Africa Limited (a state owned undertaking) and
a leading manufacturer of phosphoric acid. According this agreement, the
company will provide technical and managerial assistance to Foskor for a period
of three years. The company will receive fees for the services partly by way of
shares in Foskor and partly in cash, based on results. The company has, on
April 6, 2005, acquired an initial equity stake of 2.5% in Foskor for an
investment of 37.5 million South African Rand equivalent to about Rs.280.000
millions.
The company voted as one of the ten greenest companies in India, it reflects
the company's commitment to the environment and society.
The results for the current year include those of Godavari
Fertilisers and Chemicals Limited, which has been amalgamated with the Company
pursuant to a Scheme of Amalgamation approved by the Hon'ble High Court of
Andhra Pradesh at Hyderabad. The Company's performance for the year under
review has been satisfactory despite steep increase in the price of key raw
materials especially Sulphur, which resulted in suspension of production of
Sulphur based Complex Fertilisers and Single Super Phosphate, resulting in
lower production and sales volume and lower turnover. The seasonal conditions
remained generally satisfactory in all the addressable markets of the Company.
Operations
The Company continued to improve on its performance. The
improved profitability has been mainly due to improved operating efficiencies,
change in subsidy policy resulting in recognition of raw material prices with
one month lag instead of three months lag and higher freight neutralisation.
The higher contribution from Pesticides and Speciality nutrients divisions also
resulted in improved profitability.
Total sales for the year were Rs.37570.000 Millions compared
to Rs.20650.000 Millions in the previous year. The Profit before Interest and
Taxation for the year was Rs.4032.500 Millions (previous year Rs.1782.800
Millions). The Profit after Tax for the year was Rs.2097.6000 Millions compared
to Rs.1007.400 Millions in the previous year.
Fertiliser Subsidy
The uncertainty on the fertiliser subsidy front continues to
be an area of concern for the Company. This assumes particular importance in
the context of significant increase in the prices of key raw materials and
intermediates like Rock Phosphate, Sulfur and Phosphoric Acid. During the year,
the Government of India has settled a part of the subsidy dues in the form of
Special Bonds. At this juncture, these bonds are being traded at a discount.
The Company had accounted for the potential loss in respect of these Bonds on
'Mark to Market Basis'. The significant increase in the price of all raw
materials and the delay in settlement of the subsidy dues has put a strain on
the Company's Working Capital and will increase the interest cost in the coming
year. Added to these, the Government’s Policy to give part of subsidy in the
form of bonds may affect the liquidity
position of the Company.
Rural Retail Centres
During the year under review, the Company has set up 20
Rural Retail Centres in the name and style of "Mana Gromor Centres"
(MGC) in various District/Mandal Head Quarters of Andhra Pradesh and sold
Fertilisers, Pesticides and other products to the rural customers. The Company
through these MGC also provides services such as Technical Training, Soil
Testing Facilities etc. The response from the rural customers has been
encouraging. Based on the experience from these Centres, the Company proposes
to expand the number of Centres in the Financial Year 2008-09.
Joint Venture Project
The Joint Venture Company 'TIFERT' formed in Tunisia to set
up a phosphoric acid plant has achieved technical closure and work on the
Project is expected to commence soon. The revised Project Cost is estimated at
US $ 515 Million and CFL's equity contribution to this Project is expected to
be US $ 29 Million. The plant is expected to be commissioned by 2010. This
strategic investment is aimed at securing uninterrupted supply of phosphoric
acid for the operations.
Amalgamation of Godavari Fertilisers and Chemicals Limited
The Scheme of Amalgamation of Godavari Fertilisers and
Chemicals Limited (GFCL) with the Company was approved by the Hon'ble High
Court of Andhra Pradesh. Pursuant to the Scheme of Amalgamation, 12037182
equity shares were issued and allotted to the shareholders of GFCL on a fully
paid up basis, in the ratio of 3 (three) equity shares of Rs.2/- each of the
Company for every 2 (two) equity shares of Rs.10/- each of GFCL. Consequent to
this, the paid up equity capital of Company has become Rs.27.98 Millions. The
current year's result, therefore, incorporates the results of GFCL and to that
extent, is not comparable with previous year's figures.
Subsidiary Company - Parry Chemicals Limited (PCL)
PCL achieved a turnover of Rs.10.068 millions for the year
ended March 31, 2008 and the Profit After Tax was Rs.3.366 millions.
Awards/Recognition
The
Company continues to receive a number of awards/accolades from the Government
of AP and Industry associations. During this year the Company received the
following awards:
· FAI's Award for 2006-07
· For Consistent Excellent Production of Phosphoric Acid Plant at Visak, and
· For Best Production Performance Award for Complex Fertilisers (P2O5 category) for Kakinada Plant
· Certificate of Merit for Energy Efficient Practices in Fertiliser Industry for the year 2007 from Bureau of Energy Efficiency for both Visak and Kakinada Plants.
· Certificate of Appreciation by NSC, A.P. Chapter, on the occasion of National Safety Day for Best Process Safety Management Practices at Visak and Kakinada Plants.
· May Day Award - 2007 for Best Management and for Outstanding Contribution in Maintenance of Industrial Relations, Labour Welfare and Productivity by Government of Andhra Pradesh.
· Prestigious CNBC TV 18 Employer of Choice Award for "Most Engaged Workforce" for erstwhile Godavari Fertilisers and Chemicals Limited
MANAGEMENT DISCUSSION AND ANALYSIS
ORGANISATION - PROFILE:
The company engaged in the business of Farm Inputs
(Fertilisers, Pesticides and Speciality Nutrients) is a constituent of the
Murugappa Group and is a subsidiary of EID Parry (India) Limited (EIDP), which
holds 62.7% of the equity in the company.
During the year, Godavari Fertilisers and Chemicals Limited
(GFCL) was amalgamated with the Company after obtaining all necessary
approvals. GFCL was a leading Phosphatic Fertiliser manufacturing Company with
the Plant located at Kakinada and CFL was holding 74.92% of the equity in GFCL
just before merger. The merger is expected to bring about greater synergy and
help in consolidation and growth of business of the Company.
The Pesticides Formulation Unit at Jammu was commissioned
during the year. With this, the Company has now 8 manufacturing / formulations
units located in the States of Andhra Pradesh, Tamil Nadu, Maharashtra, Gujarat
and Jammu and Kashmir. The Company's products are marketed all over the country
through a network of over 10,000 dealers, who act as an interface between the
Company and ultimate consumer viz farmer.
During the year, the Company set up 20 Retail Centres in the
various District/Mandal head Quarters of Andhra Pradesh under the name 'Mana
Gromor Centre'.
The Company's Farm inputs Business comprise of three main
divisions viz.
· Phosphatic Fertilisers
· Pesticides and
· Speciality Nutrients
The
Management Discussion and Analysis given below discusses the key issues
concerning each of the divisions.
FARM INPUTS:
PHOSPHATIC FERTILISERS:
BUSINESS:
Subject is one of the leading manufacturers of Phosphatic
Fertilisers in India. It produces and sells Phosphatic Fertilisers of various
grades of complex fertilisers and Single Super Phosphate (SSP). The Company
also trades in Potash, another key plant nutrient. These products are sold
under the well-established brand names 'Gromor', 'Godavari', 'Paramfos', 'Parry
Gold' and 'Parry Super'. The company has a strong market presence and dealer
network in Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra, Orissa,
Chattisgarh, parts of Uttar Pradesh, Madhya Pradesh and West Bengal.
The Company's fertiliser plants are located at Visakhapatnam
and Kakinada in Andhra Pradesh, Ennore and Ranipet in Tamil Nadu and has a
combined production capacity of 23.10 lakh tonnes of complex Fertilisers, 8.15
lakh tonnes of DAP and 1.32 lakh tones of SSP.
INDUSTRY SCENARIO:
After achieving two years of over 9% growth in GDP, India is
expected to record a real GDP growth rate of 8.7% in the fiscal year 2007-08
(2006-07 - 9.6%). Growth rate in agricultural sector fell sharply during the
year to just 2.6% (2006-07 - 3.8%), which is well below the desired level of 4%
per year, deemed pre-requisite for achieving the target GDP growth of 8% CAGR
on a 'sustainable basis'.
In the recent Economic Survey Report submitted to
Parliament, Government of India has admitted that a healthy plant growth is
possible only if all 16 nutrients including Sulphur, Zinc, Calcium, Iron, Boron
and other micronutrients are also available, besides 'N','P' and 'K'.
The Govt. has admitted that though NPK requirements are made
available, micronutrient deficiency continues to affect the productivity of
crops significantly. Government has emphasized that acceleration of growth in
agricultural sector will not only push the overall GDP growth upward, it would
also make the growth more inclusive. Increasing farm incomes is necessary for
an equitable growth. Further, with uncertainties in global markets and
hardening of the international prices of food, fuel and edible oils, domestic
price stability and food security critically depend on the growth in the
agricultural sector. In this context, food and fertiliser subsidies have
supported agriculture sector. The Government has emphasized on the need for
better targeting of these subsidies with a view to optimize the resource
allocation and return there from. With area under cultivation remaining
stagnant, improving the productivity of crops is necessary for strengthening
the farm sector.
While there has been an increase in the overall consumption
of chemical fertilisers from a mere 89.63 KG per hectare in 2000-01 to 113.26
KG per hectare in 2006-07, there is still considerable scope for increasing
fertiliser consumption esp. phosphatic fertilisers. In this context, subject
continued to focus its work on the project 'Green Leap Programme' with a view
to educate the farmer on the need for increasing fertilizer consumption and
providing balanced nutrition to the crops in order to improve the farm yields
and maintain soil health. This programme was extended to 1700 villages in the
States of Andhra Pradesh and Orissa and in the villages covered by the
Programme, the yields have improved by about 15 to 20%.
Fertiliser Industry in India
India's current fertiliser production is 32.7 million MT,
Nitrogen, Phosphates and Potash combined, while the demand is about 37.4
million MT. During 2007-08, the country imported 6.92 million MT of Urea, 2.9
million MT of DAP and MAP and 2.8 million MT of MOP. With a number of units in
the country not producing phosphatic fertilisers to their full capacity for
various reasons including non-availability of raw materials, the volume of DAP
imports is expected to go up further in the year 2008-09.
During the year, the fertiliser consumption showed a growth
of 4.1% compared to the previous year. While the phosphatic fertiliser (DAP and
MAP) usage recorded a growth of 5.9%, the complex fertiliser usage recorded a
drop of 3.36% during the year 2007-08. There is obviously a strong case for higher
usage of chemical fertilisers for improving farm productivity.
COMPANY'S FERTILISER BUSINESS:
The company's Fertilisers enjoyed a market share of about
65% - 70%, in the State of Andhra Pradesh. The Company achieved a total
fertiliser sale volume of 21.71 lakh MTs, including 0.78 lakh MT of imported
MOP. With a view to leverage on the relationship and goodwill created with the
farmers over the years and to further strengthen the same, the Company had
during the year set up 'Mana Gromor Centres' - a rural retail centre initiative
in 20 District/Mandal head Quarters of Andhra Pradesh. These centres will
essentially sell the Company's fertilisers, pesticides and speciality nutrients
besides other companies' fertilisers and other products directly to the rural
population. These centres will also impart technical training besides providing
soil testing facilities to the farmers. During the year, the Company achieved a
total sales turnover of Rs. 56 Millions through these centres.
PESTICIDES
Industry Scenario:
The global market for crop protection for the first time
registered a real growth since 2004. The sales volume grew by 9% to reach US $
33.2 billion. The major contributor for this growth was the Latin American market
which grew by almost 18%. Europe also registered a double digit growth. Asia
registered a growth of 5.1%, mainly boosted by a shift from generics to
speciality molecules. NAFTA consisting of USA was the only region which
registered a de-growth in real terms, but this is expected to change this year
with the demand for bio-fuel increasing and the planting of Maize going up by
19%.
The generic molecules saw an upbeat in the price in the last
quarter of the year, mainly due to the increase in the cost of raw materials,
especially those based on sulphur and phosphorous and the constrained supply
from the Chinese manufacturers, being affected by the change in their
government's manufacturing and export policy. Indian pesticides industry is
dominated by MNCs with their new chemistry molecules and Indian companies with
widespread network in different states, serving the varied needs of regional
agriculture. Of the three major product groups, Industry witnessed positive
growth in insecticides, herbicides volumes (but de-growth in value due to
reduction in prices of wheat herbicides) and de-growth in fungicides during the
year.
Adoption of BT cotton reached a new high with 65% of total
acreage cultivated in the country coming under genetically modified varieties.
The year witnessed a bounce back for business especially for insecticides due
to severe attack of sucking pests in BT cotton and growth in volume of
herbicides. However industry faced shortages in supplies of major products like
Monocrotophos, Acephate and Acetaimiprid due to curtailed supplies from China.
Prices of products also increased due to cost escalation reversing the trend
seen in the last 3 years.
COMPANY'S PESTICIDES BUSINESS:
The formulation business achieved a significant growth of
36% in turnover contributed by expanded network through a special accelerated
growth marketing plan launched in Andhra Pradesh and Maharashtra. Co-marketing
tie-ups have been forged with leading MNCs for accessing speciality chemicals
and strengthen portfolio in new crop segments like Wheat.
Commencement of production from Jammu factory helped in
achieving higher turnover and profitability. As regards exports, Endosulfan and
Malathion continue to be the major contributors to the turnover. The growth in
consumption in Latin America helped in improving sales of Endosulfan in the
region. Phenthoate and Terbufos also registered substantial growth, mainly
contributed by sales in the Asian markets. The Company's sales of Endosulfan
and Profenofos registered good growth in domestic market powered by severe
incidence of sucking pests in BT cotton and generally good pesticide season in
the country. Overall the Pesticides division registered a turnover growth of
26% over the previous year.
SPECIALITY NUTRIENTS:
The Company's thrust on Speciality Nutrients including
'Bentonite Sulphur’ (Gromor Sulphur), Water Soluble Fertilisers and other micro
nutrients continued during the year. During the year, the Company could scale
up the volume of 'Bentonite Sulphur' significantly, despite a steep increase in
the price of sulphur. This has been possible due to the various brand building
measures taken up in the market place and improvement in the Plant operations.
During the year, the Company commissioned a 10 TPD and a 3 TPD Water Soluble
Fertilisers (WSF) plant at Visak and Kakinada respectively. The Company also
launched a new product 'Sulpho Zinc' during the year.
Trading in imported 'BORON' a micro nutrient, also commenced
during the year. There was a good market response for all the new products
including the Municipal Compost which has been launched in the market under the
brand name 'Godavari Gold'. The Company also achieved significant sales volume
in Zinc based micro nutrient fertilisers. With these new products, the Company is
able to provide a wide range of farm inputs and service the farming community
through balanced fertilization.
Company's Performance:
The Company continued to improve on its performance and
deliver better results. This has been achieved despite lower production / sales
volume of fertilisers during the year mainly resulting from non availability of
raw materials. The Company also had to curtail the production of Sulphur based
Complex fertilisers. viz., Complex 20:20:0:13, 16:20:0:13 and SSP in view of
the steep increase in the price of Sulphur which was not being compensated
under the current subsidy policy.
The Company's performance for the year has been satisfactory
considering the steep increase in the prices of some of the key raw materials
viz., Rock Phosphate and Sulphur. While the Price of Rock Phosphate nearly
doubled by the last quarter of the year, the price of Sulphur went up by nearly
nine times compared to the price prevailing at the beginning of the year. The
improved profitability has been mainly due to improved operating efficiencies,
change in subsidy policy resulting in recognition of raw material prices with
one month lag instead of three months lag and higher freight cost
neutralisation. The higher contribution from Pesticides and Speciality
Nutrients Divisions also resulted in improved profitability. The financial
results for the year include those of the erstwhile Godavari Fertilisers and
Chemicals Limited which has been merged with CFL effective April 1, 2007 and
hence the figures for the current year are not comparable with that of the
previous year.
STRENGTHS AND OPPORTUNITIES:
The company's leadership position in the Industry is
essentially due to its efficient cost structure and consumer focus. The Company
continues to focus on improving the infrastructure and supply chain management
in order to reduce the costs further. The tie-ups with M/s Foskor, South Africa
and M/s Groupe Chimique Tunisien, Tunisia and other major raw material
suppliers would enable the Company to maximize the production of Complex
Fertilisers from its existing plants. To support the higher volumes, the
Company is expanding its infrastructural facilities further by investing in
material handling equipments, material storage facilities etc. The Company also
continued its efforts at brand building and expanded its retail network and
developed relationship with ‘Self Help Groups’ (SHG) to strengthen the
distribution channel. The rural retail initiative through Company's 'Mana
Gromor Centres’ will help in further strengthening the bond with the farming
community. It is proposed to open more number of such retail centres during the
year to leverage on the relationship and goodwill create with the farmers.
The Company also plans to expand the product base in the
Speciality Nutrient segments and increase its revenue and profitability from
non-subsidy related activities.
The new Joint Venture Company Tunisian Indian Fertilizer Company S.A (TIFERT) set up in
Tunisia along with Gujarat State Fertilisers and Chemicals Limited (GSFC) and
two leading Tunisian Companies viz., Groupe Chemique Tunisien (GCT) and
Campagnie De Phosphates de Gafsa (CPG) to set up a Phosphoric acid plant in
Tunisia has very recently achieved technical closure and work on the Project is
expected to commence soon. The revised cost of this Joint Venture Project is
estimated at US $ 515 million and CFL's investment in the equity of this Joint
Venture Company will now be US $ 29 million i.e. about Rs.118 Millions. This
project is expected to go on stream by end of 2010.
OUTLOOK:
There has been a steep increase in the prices of almost all
raw materials and intermediaries required for manufacture of phosphatic
fertilisers during the last one year. The increase in the prices of Sulphur, Rock
Phosphate, Potash, Sulpuric Acid and Phosphoric Acid has been alarming. There
is also the issue of short supply with respect to availability of some of the
key raw materials like Sulphur, Rock Phosphate and Phosphoric Acid. With the
farm gate prices of raw materials remaining unchanged, the steep increase in
the prices of raw materials and intermediates and the Govt's proposal to extend
subsidy to micro-nutrients, it is expected that there will be a quantum jump in
the fertiliser subsidy outgo of the Government of India. The initial allocation
made in the current year's Central Budget towards fertiliser subsidy is
inadequate and like in earlier years, the expectation is that the Government
will supplement with further allocations during the year. This is critical to
enable the fertiliser companies to order for the required raw materials in time
and continue the operations. With substantial increase in the price of raw
materials and likely delay in settlement of subsidy dues, the Company's working
capital will go up significantly and this will be a major challenge for the
business. With increased thrust on irrigation and increased water storage
levels in the reservoirs, the demand for phosphatic fertilisers is expected to
go up further in the coming year. The shift in cropping pattern in the country
from traditional food grains to high yielding and profitable crops such as
maize, pulses, oilseeds etc. besides increased usage of BT seeds, will also
lead to increased fertiliser consumption. As regards the Pesticides business,
efforts will be made to improve the productivity and production levels at the
Ankaleswar plant and also introduce new products to meet the market needs and
fill gaps. Latin American market will continue to be the focus area for growth
by improving the presence of Company's existing molecules and also introducing
new molecules.
In respect of formulation business the accelerated growth
Plan Model which was implemented successfully in Andhra Pradesh and Maharashtra
will be repeated in Punjab and Karnataka. Also efforts will be made to
strengthen co-marketing tie ups for new product introduction. The 'Mana Gromor
Centres' will be fully leveraged to scale up the volume of formulations esp.
the speciality products. Further efforts will also be made to enhance service
level to the channel partners through buffer godowns, dedicated van delivery
system and automation of operations in godowns etc.
Amalgamation of
Godavari Fertilisers and Chemicals Limited with the Company
a) Pursuant to the Scheme of Amalgamation ('the Scheme') of the
erstwhile Godavari Fertilisers Chemicals Limited (GFCL) with the Company, as
approved by the Hon'ble High Court of Judicature of Andhra Pradesh on December
18, 2007, the entire business and undertaking of GFCL including all assets,
liabilities, duties and obligations have been transferred to and vested
in the Company with effect from April 1, 2007.
b) GFCL is engaged in the business of manufacture and sale of phosphatic
fertilisers.
c) The Amalgamation has been accounted for under the 'Purchase Method'
as prescribed by counting Standard 14, "Accounting for
Amalgamations", notified under Sec 211 (3C) of the Act.]
d) In accordance with the Scheme, the assets and liabilities of GFCL
have been taken over at their fair values as on April 1, 2007, determined by an
independent valuer and Rs.1032.800 Millions being the excess of the fair value
of the net assets over the paid-up value of the shares issued to the
shareholders of GFCL and the cost of investment in GFCL, has been credited to
the Capital Reserve in the books of the Company. Further as per the terms of
the scheme , the identity of 'Capital Reserve' and 'Investment allowance
(utilised) Reserve' accounts amounting to Rs.1.497 Millions and Rs.142.842
Millions respectively of erstwhile GFCL is required to be retained in the books
of the company. Accordingly, corresponding amount has been debited to
'Amalgamation Adjustment Account' and the same is disclosed under Reserves and
Surplus (Schedule 2).
e) As per the Scheme, 23975212 Equity Shares of Rs.10 each of GFCL held
by the Company, stand cancelled.
f ) In terms of the Scheme, the Company has allotted 12037182 Equity
Shares of Rs.2 each as fully paid-up to the shareholders of GFCL in the
proportion of three fully paid-up Equity Shares of Rs.2 each of the Company for
every two fully paid-up Equity Shares of Rs.10 each of GFCL.
g) Investments, assets, liabilities and licenses held in the name of
erstwhile GFCL are in the process of being transferred in the name of the Company.
h) In view of the aforesaid amalgamation with effect from April 1, 2007,
the figures of the current year are not strictly comparable with those of the
previous year.
Secured Loans
(A) Debentures
525 numbers, 6.10% Privately Placed Secured redeemable Non-Convertible
debentures of face value of Rs.1.000 millions each as at March 31, 2008 are to
be redeemed at par on October 27, 2008.
Security:
The debentures are secured by a first mortgage in English form on the Company's
specified property in the State of Gujarat and further secured by specified
immovable assets in the plant of the Company situated at Visakhapatnam.
(B) Loans
a) The term loans from banks and others are secured by an exclusive
first charge on the specific assets.
b) The term loans from banks taken over pursuant to the amalgamation of
Godavari Fertilisers and Chemicals Limited with the Company, are secured by way
of first charge on fixed assets and current assets ranking pari-passu with
other lending institutions and banks holding first charge and second charge on
their assets.
c) The working capital facilities from banks are secured by a
hypothecation of stock of raw materials, work-in-process, finished goods,
stores and spare parts and book debts of the Company. These are further secured
by a second charge on the movable fixed assets of the Company.
In respect of working capital facilities taken over from GFCL, they are
further secured by second mortgage charge on the company's immovable and movable
properties, both present and future, ranking pari-passu among financing banks
and institutions except short term lenders.
|
(a) Contingent
Liabilities |
31.03.2008 (Rs.
In Millions) |
|
In respect of matters under dispute |
|
|
Income Tax |
30.104 |
|
Excise Duty |
25.618 |
|
Sales Tax |
14.089 |
|
Others |
108.642 |
|
(b) Land: Liability for additional compensation payable in respect of
land purchased from M/s. Nagarjuna Fertilisers and Chemicals Limited has not been
provided for, pending court orders and determination of the amount payable. |
|
Segment Reporting
(A) Business
Segment
The Company has considered business segment as the primary segment for disclosure.
The Company is primarily engaged in the manufacture and trading of Farm Inputs,
which in the context of Accounting Standard 17 notified under Sec 211 (3C) of
the Act is considered the only business segment.
(B) Geographical
Segment
The Company sells its products mainly within India where the conditions
prevailing are uniform. Since the sales outside India are below the threshold
limit, no separate geographical segment disclosure is considered necessary.
The Government of India grants price concession on sale of Phosphatic
Fertilisers. Pending announcement of final rates of concession for the period
October 2007 to March 2008, differential subsidy income (in excess of the base
rate) of Rs.268.991 Millions has been recognised having regard to the
prevailing concession scheme and according to the management estimates of final
price concession receivable.
Other Matters
(a) Based on the information available with the company, there are no
dues/interest outstanding to Small and Micro enterprises as at March 31, 2008.
(b) Sales are net of discounts, other than usual trade discounts,
Rs.374.426 Millions (2007: Rs.297.585 Millions).
(c) The net difference in foreign exchange (i.e., difference between the
spot rate on the dates of the transactions and the actual rate at which the
transactions are settled / appropriate rates applicable at the year end)
credited to Profit and Loss Account is Rs.3883.060 Millions (2007: Rs.17.946
Millions).
(d) Exchange difference in respect of forward exchange contracts to be
recognised in the Profit and Loss Account in the subsequent accounting period
is Rs.8.176 Millions Debit (2007: Rs.4.874 Millions-debit). The company has
four open swap contracts equivalent to USD 15 million outstanding as at March
31, 2008. Considering that these contracts are specific hedges for converting
dollar liability to fixed rupee liability including interest thereon, mark to
market has not been carried out for these contracts.
(e) Research and Development expenses included under schedule 14 -
Rs.9.990 Millions (2007: Rs.3.425 Millions)
(f ) Land - Lease deed in respect of land admeasuring 9.80 acres taken
on lease from Visakhapatnam Port trust by the erstwhile GFCL, is pending
execution.
(g) During the year, the Government of India, Ministry of Chemicals and
Fertilisers, has issued 'Government of India Special Bonds' towards the subsidy
receivable. These bonds have been treated as Current Investments (included in
Schedule 6).
Disclosures as per
Clause 32 of the listing agreement
|
Particulars |
Name of the
Company |
As at March 31,
2008 |
Maximum amount outstanding
during the year |
|
Amounts receivable from Subsidiary Company |
Parry Chemicals Limited |
26.984 |
28.462 |
|
|
|
[26.190] |
[63.980] |
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.500.000 millions, 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 and 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 and 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 and 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 and Machinery,
v
Technical know-how,
v
Office Equipment,
v
Furniture and Fittings
v
Vehicles
Promoters belonging to the Murugappa Group:
- EID Parry
(India) Limited, and subsidiaries
- Dodavari
Fertilisers and Chemicals Limited
- Parry Engineering and Exports Limited
- Parry Agro Industries Limited
- Parry Nutraceuticals Limited
- New Ambadi Estates Private Limited and
subsidiaries
- Ambadi Enterprises Limited
- Tube Investments of India Limited and
subsidiaries
- Pressmet Private Limited
- Carborundum Universal Limited and
subsidiaries
- Cholamandalam Investment and Finance
Company Limited and subsidiaries
- The Coromandel Engineering Company
Limited and subsidiaries
- AMM Educational Foundation
- AMM Arunachalam and Sons P Limited
- AMM Vellayan Sons P Limited
- MM Muthiah Sons P Limited
- Murugappa and Sons
- Kademane Estates Company
- MM Muthiah Research Foundation
- A R Lakshmi Achi Trust
- AMM Foundations
- AMM Medical Foundations
News:
24th October 2007
The unaudited financial results for the quarter/half-year ended September 30, 2007 were approved by the Board of Directors at its meeting held on October 23, 2007.
Sales turnover during this period is Rs.11668.4 millions, as against Rs. 11203.8 millions in the corresponding period last year.
The gross profit before depreciation, interest and taxes for the half-year is Rs.1607.2 million as against Rs.1331.6 millions during the same period last year; depreciation provided is Rs.198.4 millions (previous half-year Rs.192.8 millions), interest charged Rs.205.3 millions (Previous half year Rs. 148.3 millions). Profit before tax has gone up by 21.5% to Rs.1203.5 millions (Previous half year: Rs.990.5 millions)
Provision for taxation (including Fringe Benefit Tax) is Rs.411.1 millions (previous half-year Rs.359.8 millions). The net profit is Rs.792.4 millions as against Rs.630.7 millions during the corresponding period last year, representing an increase of 25.6% over the previous year.
The improvement in profitability has been achieved, thanks to various initiatives taken in manufacture, distribution and sales fronts resulting in higher contributions and increase in subsidy compensation for freight cost.
The Scheme of Amalgamation of M/s Godavari Fertilisers And Chemicals Limited (GFCL) with Coromandel Fertilisers Limited (CFL) which has earlier been approved by the Board of Directors at the meeting held on July 24, 2007, has since been approved by the Shareholders and the Unsecured Creditors of the Company. The Company Petition has been filed in the High Court seeking approval for the Amalgamation.
The Company, pursuant to amendment of the Objects Clause of the Memorandum of Association, commenced Retail Business to cater to the needs of farmers, the Company’s customer.
The consolidated results for the half year ended September 30, 2007 (including the results of GFCL, a subsidiary of CFL) also shows an increase in Net Profit from Rs.760.2 millions in the corresponding period of the previous year to Rs.1158.1 millions, increase of 52.3%.
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 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.47.82 |
|
UK Pound |
1 |
Rs.73.08 |
|
Euro |
1 |
Rs.65.56 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
|
81 |
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 |
|