MIRA INFORM REPORT

 

 

Report Date :

15.02.2008

 

IDENTIFICATION DETAILS

 

Name :

UNITED PHOSPHORUS LIMITED

 

 

Formerly Name 

CHEM INDUSTRIES LIMITED

 

 

Registered Office :

3-11, GIDC, Vapi Valsad 396195, Gujarat

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

02.01.1985

 

 

Com. Reg. No.:

04-25132

 

 

CIN No.:

[Company Identification No.]

L24219GJ1995PLC025132

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMU03710A

 

 

PAN No.:

[Permanent Account No.]

AABCS1698G

 

 

Legal Form :

Subject is a public limited liability company.  The company's shares are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing of Chemicals such as Phosphorus Trichloride, Caustic Soda, Chlorine, etc.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

USD 45000000

 

 

Status :

Excellent

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

The company has turned the corner and wiped out all its previous losses during the year 2003-04. Directors are reported as experienced and respectable businessmen.

 

Trade relations are fair. Payments are usually correct and as per commitments.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

It can be regarded as a promising business partner in the long-run.

 

 

LOCATIONS

 

Registered Office :

3-11, GIDC, Vapi Valsad 396195, Gujarat, India

Tel. No.:

91-260-2432716 / 232720 / 2400717

Fax No.:

91-220-2401823

E-Mail :

info@uniphos.com

shroff@uniphos.com

thackerkm@uniphos.com

Website :

http://www.uplonline.com

 

 

Administrative Office :

Uniphos House, Madhu Park Centre, Opposite Madhu Park, Chitraker Dhurandar Marg, Khar (West), Mumbai - 400 052, Maharashtra, India 

Tel. No.:

91-22-22604111

Fax No.:

91-22-22401823

 

 

Factory :

Located at :

 

  • Vapi
  • Ankleshwar
  • Jhagadia
  • Halol
  • Jammu

 

 

DIRECTORS

 

Name :

Mr. R. D. Shroff

Designation :

Chairman & Managing Director

Date of Birth/Age :

66 years

Qualification :

B.Sc.

Date of Appointment :

29.05.1969

 

 

Name :

Mrs. S. R. Shroff

Designation :

Vice Chairperson

Date of Birth/Age :

59 years

Date of Appointment :

29.05.1969

 

 

Name :

Mr. J. R. Shroff

Designation :

Executive Director

Date of Birth/Age :

35 years

Qualification :

B.Sc.

Date of Appointment :

01.01.1990

 

 

Name :

Mr. A. C. Ashar

Designation :

Director – Finance

Qualification:

B.Com, ACA

Last Employment:

Finance Controller Excel Industries Limited

 

 

Name :

Mr. K. Banerjee

Designation :

Wholetime Director 

Date of Birth/Age :

57 years

Qualification :

B. Tech.

Date of Appointment :

21.10.2003)

 

 

Name:

Mr. Pradeep Goyal

Designation:

Director

 

 

Name:

Dr. P. V. Krishna

Designation:

Director

 

 

Name:

Dr. (Mrs.) R. Ramachandran

Designation:

Director

Date of Appointment:

21.10.2003

 

 

Name:

Mr. Pradip Madhavji

Designation:

Director

Date of Appointment:

29.01.2004

 

 

Name:

Mr. A. L. Bongirwar

Designation:

Nominee Director

Date of Appointment:

21.10.2003

 

 

Name:

Mr. A. A. Panjwani

Designation:

Director

Date of Appointment:

21.10.2003

 

 

Name:

Mr. P. N. Devarajan

Designation:

Director

Date of Appointment:

21.10.2003

 

 

Name:

Dr. Nitish Sengupta

Designation:

Director

Date of Appointment:

21.10.2003

 

 

Name:

Mr. D. A. Anandpura

Designation:

Director

Date of Appointment:

21.10.2003

Deceased On:

4.11.2003

 

 

Name:

Mr. Vikram R Shroff

Designation:

Director

 

 

Name:

Mr. Vinod Sethi

Designation:

Director

 

 

Name:

Mr. Chirayu R Amin

Designation:

Director

 

 

KEY EXECUTIVES

 

Name:

Mr. M B Trivedi

Designation:

Company Sectary

 

 

Name:

Mr. K. R. Srivastva

Designation:

Chief Operating Officer

Qualification:

B. Chem, PGDBMA (IIM), DSM

Last Employment:

President- Pharmaceutical Products of India Limited

 

 

Name:

Mr. Vishnu Bhat

Designation:

President Profit Center

Qualification:

B. Tech (Chemical Engineering)

Last Employment:

CEO-Shaw Wallace Agrochemical Limited

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders

 

Percentage of Holding

Indian Public

 

9.98 %

NRIs/OCB

 

4.54 %

Promoter

 

29.55 %

Mutual Funds / LIC / Banks

 

18.14 %

Corporate Bodies

 

4.22 %

FII

 

33.57 %

Total

 

100.00 %

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Chemicals such as Phosphorus Trichloride, Caustic Soda, Chlorine, etc.

 

 

Product :

Item Code No. (ITC Code)

Product Description

380810.24

Cypermethrin Technical

2815.11.00

Caustic Soda

291900.09

Trimet.Hyl Phosphite

 

 

Export to:

Europe, Italy, Korea, Malaysia, South Korea, Sri Lanka, UK and USA.

 

 

Import From:

Europe and China.

 

PRODUCTION STATUS

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

Speciality Chemicals

Tonnes

5470

5318

86

Chloro-Alkaline Products

Tonnes NM3

101700

112500

109640

12015623

Industrial Chemicals

Tonnes

51000

39480

30558

Power

MW

48

48

2919  (Lacs KWH)

Pesticides

Tonnes

36735

45205

30076

Mercury Salts

Tonnes

100

100

--

Pesticides Intermediates

Tonnes

KL

24701

27667

15617

378

 

Notes:

 

1. Licensed and Installed Capacities are as certified by a Director on which the -Auditors have relied, being a technical matter.

 

2. Licensed capacity represents registered capacity with Directorate General of Technical Development (D.G.T.D.), capacity intimated to D.G.T.D. under Industrial Licensing Policy and/or capacity intimated to Secretary for Industrial Approvals.

 

3. Production includes quantities produced for captive consumption.

 

4. During the year, the Company has produced 98,47,265 Litres (Previous Year: 81,44,186 Litres), 1,96,18,501 Kilograms (Previous Year: 1,30,20,857 Kilograms) 1,53,240 pounds (Previous Year: 1,40,200 pounds) and 25,61,575 numbers (Previous Year: 12,09,480 numbers) of formulations out of Technical Grade products manufactured/ purchased by the Company.

 

5. Production includes 2,408 Tonnes (Previous Year: 2,614 Tonnes) produced on Job-Work basis for outside parties.

 

 

GENERAL INFORMATION

 

No of Employees:

2149

 

 

Bankers :

v      Dena Bank

v      Bank of Baroda

v      State Bank of India

v      Union Bank of India

v      Canara Bank, 84, Dr. Annie Besant Road, Worli – 400018, Mumbai

v      Indian Overseas Bank. Sir P M Road, P O Box – 354, Mumbai – 400001

v      Centurion Bank Limited

v      IDBI Bank Limited

v      Punjab & Sind Bank

v      Global Trust Bank Limited

v      Karur Vysya Bank Limited

v      Axis Bank Limited

v      Andhra Bank Limited

v      State Bank of Hyderabad

v      Oriental Bank of Commerce

v      Export Import Bank of India

v      ICICI Bank Limited

v      ING Vysya Bank Limited

 

 

Facility

SECURED LOANS:

31.03.2007

Secured Redeemable Non-convertible Debentures:

 

100- 7.2% 7 year

100.000

500 - Floating Rate 7 year

500.000

Rs. 1,00,00,000 each fully paid up

 

25 (Previous Year Nil) - 6.75%

--

From Banks:

 

On Term Loan Accounts

805.000

Under Vehicle Finance Schemes

25.100

On Cash Credit and Working Capital

Demand Loan Accounts

1011.600

From Others:

 

From Technology Information Forecasting and Assessment Council

2.100

From Industrial Development Bank of India

31.400

External Commercial Borrowing from

International Finance Corporation

628.400

From C. E. Capital Services India

187.500

 

 

Notes:

 

1. Debentures referred to in Clause 1(a) are redeemable at par in three annual instalments in the ratio of 30%, 30% and 40% commencing from 1st October, 2009 and have a put and call option at the end of 5th year i.e. 1st October, 2009.

 

2. Debentures referred to in Clause 1 (b) are redeemable at par in three annual instalments in the ratio of 30%, 30% and 40% commencing from 1st October, 2009 and have a put and call option at the end of 3rd year i. e 1st October, 2007 and 5th year i.e. 1st October 2009. Further, interest on these debenture will be paid at a rate which will vary based on the Indian

Bench Mark.

 

3. Debentures referred to in Clauses 1 (a) and 1(b) above, are secured by a first mortgage and charge on immovable property at Ahmedabad,. Gujarat and further are to be secured by way of first charge on intangible assets of the Company.

 

4. - (a) Term Loan from The Karur Vysya Bank Limited amounting to Rs.105 Millions is secured by hypothecation of specific plant alid machinery, present and future, situated at Vapi, Ankleshwar Unit I, Unit II, Unit III and Halol Unit of the Company.

 

(b) Term Loan from Axis Bank Limited amounting to Rs. 200 Millions is secured by first charge on all movable Plant and Machinery, Equipments, Furniture and Fixtures etc. of the Company situated at Vapi, Ankleshwar, both present and future, ranking pari-passu with existing charge holders except fixed assets on which specific charge has been created in favour of other Financial Institutions/Banks.

 

(c) Term loan from State Bank of India amounting to Rs. 500 Millions is secured by way of a first charge on pari-passu basis by hypothecation of movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future, whether installed or not, situated at Vapi, Ankleshwar and Halol units of the Company excluding assets on which specific first charge is already created/to be created in favour of other lenders. Further, the aforesaid loan is further secured by way of first mortgage and charge on leasehold land situated at Vapi and Ankleshwar units and land at Halol Unit together with all buildings and structures thereon and all plant and machinery attached to. earth.

 

5. Term Loans from IGICI Bank Limited and Citibank Limited under Vehicle Finance Schemes amounting to Rs. 23.900 Millions and Rs.1.200 Millions, respectively, are secured by an exclusive charge by way of hypothecation of vehicles purchased under the said Schemes.

 

6. Cash Credit and Working Capital Demand Loan Accounts from Banks are secured by hypothecation of present and future inventories, book debts, etc. of the Company wherever situated.

 

7. (a) Term loan from Technology Information Forecasting and Assessment Council (TIFAC) amounting to Rs. 2.100 Millions is to be secured by a first charge by way of hypothecation of all movable assets other than book debts, both' present and future, except stock*of raw materials, stores, semi-finished and finished goods, on which charge has been created and/or is to be created in favour of Company's bankers and such other movables which may be agreed to by TIFAC.

 

(b) Term loan from Industrial Development Bank of India amounting to Rs. 31.400 Millions is secured:

 

(i) Exclusively by way of hypothecation of plant and machinery of Aluminium Phosphite Plant, Pesticides Technical Plant, D. V. Ester Plant and D. G. Set situated at Vapi and Phosphomidon Plant and Para Chloro Ortho Cresol Plant situated at Ankleshwar.

 

(ii) By way of first charge by hypothecation of movable properties of the Company including movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future, situated within the Company's factories, premises and godowns or elsewhere.

 

(iii) By way of first mortgage and charge on leasehold land situated at Vapi, Ankleshwar and Halol Units.

 

(c) External Commercial Borrowing from International Finance Corporation amounting to Rs. 628.400 Millions and term loan from G. E. Capital Services India amounting to Rs.187.500 Millions respectively, are secured by pari-passu first charge by way of hypothecation of specific movable assets, present and future, situated at Jhagadia Unit of the Company.

 

 

UNSECURED LOANS:

 

Term Loans from Banks

1950.000

Commercial Papers

700.000

Foreign Currency Convertible Bonds

3451.900

External Commercial Borrowing

6572.300

Syndicated Notes

3407.600

From Housing Development Finance Corporation Limited' under Employees Housing Loan Scheme

0.100

 

Banking Relations :

Good

 

 

Auditors :

S. V. Ghatalia And Associates

Chartered Accountant

 

 

Subsidiaries :
  • Agrodan Aps
  • Biowin Corporation Limited
  • United Phosphorus De Mexico S.A. De C.V
  • United Phosphorus Limited (Australia).
  • United Phosphorus Limited (Hong Kong)
  • United Phosphorus Limited (Russia).
  • United Phosphorus Limited (Shanghai)
  • United Phosphorus, Inc. (USA)
  • United Phosphorus Limited, Japan
  • United Phosphorus Limited U.K.
  • United Phosphorus Limited (Zambia)
  • United Phosphorus De Argentina S.A.
  • United Phosphorus Belgium S P R L
  • United Phosphorus South Africa Limited
  • United Phosphorus (Korea) Limited
  • United Phosphorus Limited New Zealand
  • PT. United Phosphorus Indonesia
  • Shroffs United Chemicals Limited
  • United Phosphorus Limited, Gibraltar
  • Inventa Corporation
  • AgValue Enterprises, Inc.
  • AgValue, Inc.
  • AgValue-Etho, LLC
  • AgValue, D.P., LLC
  • AgValue - Clopyr, LLC
  • AgValue - Oryza, LLC
  • AgValue - Metri, LLC
  • AgValue-Bromacil, LLC
  • AgValue - Propyzamide, LLC
  • AgValue - Propargite, LLC
  • AgValue - Picloram, LLC
  • United Phosphorus Do Brazil Ltda.
  • Advanta Finance BV
  • Advanta India Limited
  • Advanta International BV
  • Advanta Netherlands Holding BV
  • Advanta Semi las SAIC, Argentina
  • Agrindustrial, S.A.
  • Advanta Holdings BV
  • Compania Espanola Industrial Quimica de Products Agricolas Y. Domesticos, S.A.
  • Iberotam, S.A.
  • Pacific Seeds Holding Limited, Thailand
  • Pacific Seeds Limited, Thailand
  • Pacific Seeds Pty Limited, Australia
  • Phosfonia, S.L.
  • Reposo S.A.I.C
  • SWAL Corporation Limited
  • Transterra Invest, S.L.U.
  • United Phosphorus Sole Partner Limited, Greece
  • United Phosphorus (Taiwan) Limited
  • Universal Pestochem Industries Limited
  • PT Catur Agrodaya Mandiri

 

 

Associate Company:
  • Agrinet Solution Limited
  • Uniphos Agro Industries Limited
  • Uniphos Enterprises Limited
  • Nivi Trading Limited
  • Bloom Packaging Private Limited
  • Bloom Industrial Plastics Private Limited
  • Kline Chemicals Private Limited
  • Nerka Chemicals Private Limited
  • Equator Holdings Private Limited
  • Shroff Envirotal Private Limited
  • Ultima Search
  • Jai Research Foundation
  • Vikram Farm

 

 

Joint Venture Company:

United Phosphorus Limited Bangladesh

 

 

Membership:

Confederation of Indian Industry

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

27,50,00,000

Equity Shares

Rs. 2/- Each

Rs. 550.000 millions

1,40,00,000

Preference Shares

Rs. 10/- Each

Rs.1400.000 millions

50,00,000

Preference Shares

Rs. 10/- Each

Rs. 50.000 millions

 

Total

 

Rs.2000.000 millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

18,75,22,068

Equity Shares

Rs. 2/- Each

Rs. 375.000 millions

 

Notes:

 

1. Of the above, 12,73,31,215 Equity Shares of Rs.2 each fully paid-up have been allotted pursuant to a Scheme of Arrangement, without payments being received in cash.

 

2. During the year, out of Foreign Currency Convertible Bonds (FCCB) of Series 'B' issued in financial years 2005 and 2006 and outstanding as on 31st March, 2006 amounting to USD 81.24 million, FCCB amounting to USD 2 million have been converted into 3,87,261 equity shares of Rs. 2 each fully paid-up. ,The said equity shares shall rank pari-passu with the other equity shares. In respect of the balance FCCB aggregating to USD 79.24 million, the . bond holders have an option to convert the said FCCB into equity shares.

 

 

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

375.000

375.500

369.079

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

10892.500

10329.700

6310.825

4] (Accumulated Losses)

0.000

0.000

0.000
NETWORTH

11267.500

10705.200

6679.904

LOAN FUNDS

 

 

 

1] Secured Loans

3291.100

3535.100

3330.110

2] Unsecured Loans

16081.900

7773.700

2312.156
TOTAL BORROWING

19373.000

11308.800

5642.266

DEFERRED PAYMENT LIABILITIES

415.300

659.500

423.559

DEFERRED TAX LIABILITIES

461.700

0.000

0.000
 

 

 

 
TOTAL

31517.500

22673.500

12745.729
 

 

 

 
APPLICATION OF FUNDS

 

 

 
 

 

 

 
FIXED ASSETS [Net Block]

5087.000

4864.700

4782.234
Capital work-in-progress

607.900

350.900

368.401
 

 

 

 
Intangible Assets

5742.900

1554.100

1113.008
INVESTMENT

3923.900

8597.500

413.596
DEFERREX TAX ASSETS

0.000

40.800

344.282
 

 

 

 
CURRENT ASSETS, LOANS & ADVANCES

 

 

 
 
Inventories

2594.200

1985.000

1510.662
 
Sundry Debtors

3805.600

3873.100

3816.783
 
Cash & Bank Balances

1837.700

3419.200

46.502
 
Other Current Assets

837.700

451.700

458.467
 
Loans & Advances

14065.800

2974.800

3963.484
Total Current Assets

23141.000

12703.800

9795.898
Less : CURRENT LIABILITIES & PROVISIONS
 
 
 
 
Current Liabilities

6985.200

5220.400

3929.356
 
Provisions

0.000

222.500

157.969
Total Current Liabilities

6985.200

5442.900

4087.325
Net Current Assets

16155.800

7260.900

5708.573
 

 

 

 
MISCELLANEOUS EXPENSES

0.000

4.600

15.635
 

 

 

 
TOTAL

31517.500

22673.500

12745.729

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

12672.900

12101.800

10847.465

Other Income from Operations

841.600

491.000

 

Other Income

1037.400

346.400

--

Total Income

14551.900

12939.200

10847.465

 

 

 

 

Profit/(Loss) Before Tax

1616.600

1494.600

972.305

Provision for Taxation

528.400

329.500

669.705

Profit/(Loss) After Tax

1088.200

1165.100

302.600

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Export Earnings

6931.700

7154.100

 

Interest / Dividend

672.000

267.800

5941.759

 

Other Earnings

52.400

0.300

 

Total Earnings

7656.100

7422.200

5941.759

 

 

 

 

Imports :

 

 

 

 

Raw Materials

2749.600

2438.200

 

Stores & Spares

2.100

1.800

2176.172

 

Capital Goods

73.500

38.000

 

Total Imports

2825.200

2478.000

2176.172

 

 

 

 

Expenditures :

 

 

 

 

Manufacturing and Other Expenses

11512.600

10107.800

 

Amortisation/Depreciation

951.700

790.000

 

 

Interest and Other Financial Costs

869.600

847.700

9875.16

 

Amortisation of Deferred Revenue-Expenses

4.600

11.000

 

 

Increase/(Decrease) in Finished Goods

[403.200]

[311.900]

 

Total Expenditure

12935.300

11444.600

9875.16

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

30.09.2007

31.12.2007

Type

1st Quarter

2nd Quarter

3rd Quarter

Sales Turnover

3361.300

3728.400

3996.600

Other Income

231.300

222.500

264.900

Total Income

3592.600

3950.900

4261.500

Total Expenditure

2902.200

3232.400

3598.300

Operating Profit

690.400

718.500

663.200

Interest

[36.900]

481.800

245.000

Gross Profit

727.300

236.700

418.200

Depreciation

284.600

289.400

304.800

Tax

4.500

6.800

6.000

Reported PAT

295.300

[42.500]

70.800

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2007

31.03.2006

31.03.2005

PAT / Total Income

(%)
7.48

9.00

2.79

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
12.76

12.35

8.96

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
5.73

8.51

6.67

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.14

0.14

0.15

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
2.34

1.56

1.46

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
3.31

2.33

2.40

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

HISTORY

 

United Phosphorus Limited (formerly Search Chem Industries Limited), a subsidiary of erstwhile United Phosphorous Limited (presently Unipros Enterprises Limited) is into manufacture of Chlor alkali products, Industrial chemicals and speciality chemicals. The company is a leading manufacturer of chlorine and Phosphorous based industrial chemicals and speciality chemicals like Phosphorus Pentachloride, Phosphorus Trichloride, Phosphorus Oxychloride, HEDP, Tri Phenyl Phosphite, Tri Phenyl Phosphate, ATMP etc. The comapany is also into power generation. The surplus power after captive consumption is sold to Gujarat Electricity Board. 


The company incorporated as Vishwanath Commercials on 02.01.1985 was originally promoted by Debisingh Shekhawat, Lalit Kumar Sharma and Associates and went public in Feb 1985.  


R D Shroff (alongwith his family and investment companies), acquired majority stake in erstwhile Viswanath Commercials in Feb 1994 and changed its name to Search Chem Inds Limited. As a result of reorganisation with in the group, United Phosphorus (UPL) acquired 75% equity in Search Chem in March 1995 and UPL acquired further shares in August 1995 and became the promoter of the company. 


The company until the takeover was engaged in the business of trading in shares/debentures. Subsequent to takeover it diversified into manufacture of chemicals. The company's plants are located at Vapi and Jhagadia in Gujarat. The company entered into manufacture of Chlor-alkali products by commercialisation of Phase I of its Caustic and Chlorine and Phosphorus Trichloride plants in 1995-96. During 1998-99, the company has installed a new plant to manufacture POCI (Phosphorus Oxychloride) and also installing a plant to manufacture Elemental Phosphorus, which is main input of the company. 


The company has entered an agreement with General Electric Energy Plant Operations LP for operation and maintenance of power plant.  

 
The company has been referred to BIFR as the networth was fully eroded. The capacity utilisation of both Speciality Chemicals and Industrial Chemicals was higher compared to 1999-2000.  

 
In attempt to restructure the business in the group, the manufacturing facilities of erstwhile United Phosphorous is transferred to this company (formerly Search Chem Industries Limited). The High Court of Gujarat has approved this scheme of demerger effective from March 31, 2003. According to the scheme of demerger the company has reduced its share capital and has issued to its shareholders one equity share of Rs.10/- each for every twelve equity share of Rs.10/- each held by them in the company. Further one equity share or 14 preference shares of Rs.10/- each of the company were alloted to the shareholders of Uniphos Enterprises Limited for every one equity share of Rs.10/- each held by them in Uniphos Enterprises Limited. 


During the 2004-05 the company has enhanced its installed capacity of Pesticides and Pesticides Intermediates by 9940 Tonnes and 890 Tonnes. With this expansion the total installed capacity of Pesticides and Pesticides Intermediates has increased to 28040 Tonnes and 17546 Tonnes respectively. 


 In June 2005 the company has acquired 100% stake of SWAL (Formerly known as Shaw Wallance Agrochemicals Limited) for a consideration of Rs.234 Million and also acquired CEQUISA, a distributor and registrant of crop-protection products located in Barcelona Spain & its subsidiaries . In October 2005 the company sub-divided its equity share face value from Rs.10/- per share to Rs.2/- per share. Further the company has acquired 100% stake through its UK subsidiary of REPOSO S.A.I.C. (REPOSO) a manufacturer and distributor of crop protection products located in Buenos Aires, Argentina. The company has also acquired Agvalue in USA during November 2004.

 

OPERATIONAL PERFORMANCE: 

 
The year witnessed good rainfalls in India, resulting into higher sales.

However, parts of U.S.A. experienced droughts during the year. The Company's exports to U.S.A. therefore, reduced substantially. This reduction was partly set off by directing sales to Europe and other countries. However, overall exports during the year were less than the exports of previous year. 

Total sales during the year stood at Rs.14509.400 Millions as against Rs.13621.200 Millions, registering a growth of 6.5%. 

The growth has been quite lower. However, in the current year, it is expected that the sales will again go up. 
 
FUTURE OUTLOOK:  

Like last year, the weather forecast for the current year in India is of near-normal monsoon. This will help in increased sales in India. However, the margins will be under pressure due to competition. Exports are likely to go up in the current year as rainfall in U.S.A. are expected to be normal this year. 

REDEMPTION OF PREFERENCE SHARES: 

 

During the year, the Company redeemed 7% Non-convertible Non7cumulative Preference shares, which were allotted pursuant to the Scheme of Arrangement in 2003. 

 
FINANCE: 
 
During the year, External Commercial Borrowings were made of US $ 150 millions. The proceeds were used for long-term working capital requirements of the company. 

 

RESEARCH AND DEVELOPMENT: 

 
The Company is giving maximum importance to research and development. A large number of formulations are developed, some of them for the first time in India, by the R&D team. 

 
With the constant endeavour to improve quality, bring down costs and penetrate new local and global markets, research is carried out continuously at the Company's R&D Laboratories at Vapi and Thane. 

 
A new research centre with modern facilities is set up at Thane, where new products are being developed. The Company is also working on producing the molecules which are going off patent in near future. 

 
The research team is continuously working and developing on new eco-friendly formulations of various pesticides. Research is also carried out in developing new combinations of pesticide formulations for which patents are obtained in India and in other countries. Lots of field trials and data generation for various pesticides is undertaken by the research team, alongwith agriculture universities, with a view to further improve their quality. 
 
SOCIAL ACTIVITIES: 

 
The Company is a socially responsible company. It is contributing its bit for the upliftment of the society in the areas of education, medical help or any other just cause. Whenever there is any calamity in any part of the country, the company has provided necessary help at all times. In Vapi and Ankleshwar, where the company's factories are located lots of social welfare activities are taken up. 

 
The Directors are very proud to state that the social activities started by the company some time back have now shown remarkable growth in last few years. Sandra Shroff Gyan Dham School at Vapi which was started a few years ago is now considered as one of the best schools of Gujarat. A small clinic started to help the villagers in Vapi is now a full-fledged hospital 'f with the best medical facilities, and modern equipments. 

 
The Company is also conscious of the requirements of the society of the day. Keeping in mind the increasing demand for skilled managers, the Company has started Rajju Shroff BBA Management College. 

 
With the help and guidance from the Company, new management diploma college is started in Vapi: The Company has also committed to set up a new chemical engineering college in Ankleshwar. I The Directors are very happy to be associated in various social activities, and play a significant role in social upliftment of the society. 

INDUSTRY STRUCTURE AND DEVELOPMENT: 

The company is engaged in the business of agrochemicals, industrial chemicals, chemical intermediates and speciality chemicals. The company also has a captive power plant at Jhagadia. 

During the year, the company acquired Cerexagri group of Companies. With this acquisition, now the company is figuring among the top three global generic agrochemical companies in the world. 

A number of products of the company are manufactured for the first time in India with indigenous research and development. The company is very uniquely positioned because of its forward and backward integration for all stages of production of various chemicals and agrochemicals. It has got the largest range of agrochemicals. In India, it is the largest agrochemical company dealing in insecticides, rodenticides, herbicides, fungicides, weedicides, fumigants, etc. 

The company has a large network of dealers and distributors in India. The company has 26 depots throughout the country to cater to the requirements of Indian farmers. 

The company's products are sold throughout the world. It has got subsidiary companies across the globe and also stock points in strategic countries.

The company is the largest exporter of pesticides from India. 

The company's manufacturing plants are located at Vapi, Ankleshwar, Jhagadia, Halol and Jammu in India. Its subsidiaries have plants in U.K., France, Netherlands, Spain, Italy, China, Israel, U.S.A., Argentina, Vietnam and Zambia. 
 
Agrochemical business depends on the monsoon, as the pest attacks will be more during rainy season. However, some of the Bt seeds now used for cotton crop are resistant to such pest attacks. 

One essential requirement for sale of agrochemicals is the registration of the agrochemical in various countries. No sale can be made without holding requisite registration. 

The company is very conscious of the needs of farmers. Hence, new pesticides and pesticide formulation combinations are offered to the farmers and this proves very effective on different crops. 

Farmer education is also a very important aspect for the agrochemical industry. The company, therefore, provides training to farmers in its demonstration farms to increase yield of crops like sugarcane and rice. 

OPPORTUNITIES AND THREATS: 

Indian agrochemical industry has a very good growth potential. The cost of production of agrochemicals is lower in India as compared to Europe or America. Even though this industry was dominated by overseas multinationals earlier, now some of the Indian companies are also playing significant role in the industry. 

In India, the market for agrochemicals grew by about 10% every year.

However, there are lot of opportunities for increase in India. The average per hectare consumption of agrochemicals in India is extremely low as compared to their usage in Japan or USA. 

Indian agrochemical industry is in position to supply agrochemicals of good quality at economical price, and hence, there are lot or opportunities to increase the exports. 

The threat that the industry faces are indifferent weather conditions and negative perceptions for the industry. The company is no%% exporting to all countries in the world and hence, the problems of floods or droughts in some parts of the world are neutralized by diverting sales elsewhere. As regards negative perception for the industry, the industry is taking steps to educate and improve communication with actual users. 

SEGMENTWISE PERFORMANCE: 

a. Agrochemicals: Agrochemicals accounts for 75% of total sales of the company. The Company's growth in this segment locally as well as globally is excellent. 

b. Industrial Chemicals and Intermediates: This segment accounted for 21 % of total sales of the company. This segment is fairly steady. 

c. Power: Power generated is mainly used for captive purposes only. Sale to Gujarat Electricity Board is made as and when the power is required by the Board. 

d. Exports: In the year under review, exports from India accounted for 55% of total sales, which was 61% last year. Normally this segment grows every year. 

BUSINESS OUTLOOK: 

Business outlook is very favourable for the company. With proper education and training to farmers, consumption of agrochemicals is increasing in India and other parts of the world. Further, R & D team of the company is successful in improving quality of various products and reduction in the costs of manufacturing. This will increase the company's market share in India and abroad. Overall, the business outlook is good. 

FINANCIAL AND OPERATION PERFORMANCE: 

During the year 2006-07 the turnover has gone up from Rs.13621.200 Millions to Rs.14509.400 Millions. In line with increase in turnover, profits (before taxes) have gone up from Rs.1494.600 Millions to Rs.1616.600 Millions. 

 

FIXED ASSETS

 

·         Land

·         Factory Building

·         Plant & Machinery

·         Furniture, Fixtures & Office Equipment

·         Vehicles

 

AS PER WEBSITE

 

EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 198 Complaints disposed off during the quarter 198 Complaints unresolved at the end of the quarter Nil 1. The above Unaudited Financial Results were reviewed by the Audit Committee and thereafter approved at the Meeting of the Board of Directors held on July 22, 2005. The Statutory Auditors have carried out a Limited Review for the quarter ended June 2005. 2. The Company made an issue of Foreign Currency Convertible Bonds (FCCB's), aggregating to US $ 75 million on October 06, 2004, Bond holders holding FCCB's aggregating to US $ 58.23 million have converted Bonds into equity shares resulting into increase in the paid up capital of the Company to Rs 335.20 million. 3. During the quarter, the Company has acquired, through it subsidiary, the business of M/s CEQUISA, located in Spain, for a price of Euro 11.50 million. 4. During the quarter, the Company has acquired all the shares of M/s SWAL Corporation Limited (formerly known as Shaw Wallace Agrochemicals Limited) for a consideration of Rs 234 million. 5. The Board of Directors have recommended sub-division of 1(one) Equity Share of Rs 10/- each to 5 (five) Equity Shares of Rs 2/- each. 6. Previous period / year's figures have been regrouped / rearranged wherever necessary.

 

UPL’s Chemo Electronic Lab wins national award for environmental cause.

 

In recognition of its R & D efforts in the area of Pollution Control and Environmental Protection, the national award for the year 2007 was presented to United Phosphorus Limited; Chemo Electronic Laboratory (CEL), Vapi, Gujarat.

 

The CEL of United Phosphorus has successfully designed, developed and commercialized Gas Monitoring Devices for the fumigation industry along with Flammable Gas Detection Devices for the industrial and the domestic sectors as well as Breath Alcohol Analyzer for the traffic police, railways and hospitals. For the first time

indigenous technology was developed to produce Electrochemical Sensors for many gases like Phosphine (PH3), Carbon Monoxide (CO), Sulphur Dioxide (SO2), Hydrogen Sulphide (H2S), Chlorine (Cl2) and Nitrogen Dioxide (NO2) etc.

 

The fumigation industry which uses highly toxic fumigants like Phosphine (PH3), Methyl Bromide (MBr) etc., requires a variety of detection devices. There was no single point source for these products. With five developed instruments for this application, UPL has recently become the only manufacturer in the world to produce all the

necessary detection devices for the fumigation industry. The other products developed for flammable gases and breath alcohol analysis is unique in their features and till date no other Indian company produces similar instruments.

 

The instruments and sensors have a tremendous market potential in India and all over the world.

 

UNITED PHOSPHORUS LIMITED ACQUIRES ADVANTA’S SEED BUSINESS FROM FOX PAINE & COMPANY

 

Mumbai, India (February 14, 2006) United Phosphorus Limited (UPL) announced today that its subsidiary, Biowin Corporation Limited based in Mauritius, has acquired Advanta Netherlands Holdings BV, based in the Netherlands, in an all cash transaction from the US-based private equity firm, Fox Paine & Company, LLC. UPL will finance the transaction with funds raised through the recent foreign currency convertible bond (FCCB) issues and bank borrowings. YES Bank served as the exclusive financial and strategic advisor to UPL.

 

Advanta is a leading supplier of seeds and seed technologies to major global and regional markets, providing added value to farmers, downstream industries and consumers by combining superior genetics with essential technologies and techniques. With operations in Australia, Asia and South America, the Company’s research and development consists of superior breeding programs and bioscience techniques that have driven the development of a portfolio of elite, proprietary and highly differentiated germplasm. Advanta had total sales of EUR 61 million in [FY] 2005. Established in 1996 through the combination of Royal Vanderhave Group of the Netherlands and Zeneca Seeds of the United Kingdom, Advanta’s corporate heritage extends back to the 19th century with important R & D programs in rice, maize, sunflower, sorghum and canola. Commenting on the transaction, Mr. Jai Shroff, Executive Director of UPL, said, “The acquisition of Advanta allows UPL to jump start their entry in the high end of the seeds business where the future of agriculture growth lies. This transaction not only makes us the largest player in some segments but also gives us leadership position in many important products. At the same time, it allows us further their relationship with distributors and farmers in these markets. They welcome the Advanta employees to the UPL family of companies, and will look for a smooth, quick integration.” Mr. Kevin Schwartz, Managing Director of Fox Paine, said, "They believe the combination of Advanta and UPL will help both companies accelerate their corporate strategies for growth. This transaction successfully concludes their investment work with Advanta, which was to develop and invest in its market positions, product portfolio and technologies and ultimately find the strategic acquirers best positioned to further develop Advanta's diverse global business units. The success of this endeavor is due to the substantial efforts of many people within Advanta and Fox Paine who shared this vision."

 

United Phosphorus Limited (UPL) is the largest Indian agrochemical company and among the top five generic companies globally in this industry. It is engaged in research, manufacture and distribution of agrochemicals and specialty chemicals across the globe. The Company’s revenue’s for the last 12 months ending Dec 2005 were in excess of USD 375 mm.(Rs. 16610.000 Millions)

 

About UPL

 

Through acquisitions, strategic alliances and network of over 36 subsidiaries, UPL has built a marketing network across the globe and its international revenues account for over 70% of its total revenues. It exports to over 100 countries, with primary markets in Europe and North America. UPL has over 2400 employees and has 10 operating plants (8 in India and 1 in UK and Argentina) all of them are ISO compliant to the highest standards of Quality, Safety, Environment and Occupational Health.

 

UNITED PHOSPHORUS LIMITED (UPL) SIGNS AGREEMENT FOR PRODUCTION OF CERTAIN AGROCHEMICALS WITH ISHIHARA SANGYO KAISHA LIMITED. (ISK)

 

Ishihara Sangyo Kaisha, LIMITED (ISK) has signed the agreement for the production of  certain agrochemicals with United Phosphorus LIMITED (UPL) Mumbai, India and furthermore is exploring the possible business alliance of distribution in India and certain other countries.

 

UPL has been entrusted by ISK with manufacture of certain products developed by ISK . ISK, UPL and Mitsui & Co., Limited.(Mitsui) have a plan to establish a joint venture company  for the development, registration and distribution of ISK products in India. In addition, the companies continue the discussion about the possible co-operation in the countries other than India.

 

ISK is intending to continue to focus on the Research and Development, especially creating the new novel molecules and more than ninety (90) percentage of the total turnover for agrochemical sales (turnover of 41.0 Billion Japanese Yen and net earning of 8 Billion in March, 2006 as consolidated basis) is coming from their proprietary products. ISK’s target for its agrochemical business is turnover of 48.0 Billion Japanese Yen and net earning of 9 Billion Japanese Yen on a consolidated basis in March 2009 expecting contribution of new products (IKF-916/cyazofamid and IKI-220/flonicamid).   ISK has commenced on full-scale development work of its new fungicide (powdery mildew fungicide) IKF-309 ( a common name to be proposed).

 

With this venture, ISK will be able to access the world class manufacturing base of UPL as well as UPL’s domestic marketing network. UPL presently has 8 manufacturing facilities in India, one each in UK and Argentina. UPL currently has a 8% market share in India.

 

This partnership will continue to allow UPL to grow organically, inorganically and through business alliances. Current revenue of UPL for the year, 2005-2006 have been USD 480 million. 

 

As stated by Mr. Jai Shroff, CEO of United Phosphorus Limited “They believe that this alliance is of strategic importance and this business model will differentiate UPL from other generic companies as being the most cost competitive manufacturer with an access to new patented chemistries which can be leveraged by the global distribution network set up by us.  This will also compliment some of the recent brand acquisitions”

 

ISK intends to implement their new manufacturing business model for their agrochemicals products as their one of the business strategies in addition to the R & D aiming at increasing its global competitiveness and profitability.

 

ISK, therefore, is strengthening the stability and global competitiveness of their production through establishing the multi- production sites of technical materials. Most of its agrochemical products already have been locally produced not only in Japan but also in Europe, North America, Korea, China and Brazil.   

　

It is currently estimated that 70 percentage of total products used globally are off-patent products while the cost of the development and commercialization with new molecule have been increased significantly. UPL has been recognized as one of the most competitive producer of agrochemicals in India and the fastest growing Generic company in Agrochemical industry with direct presence in 35 countries and a sales in more than 80 countries

 

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.39.65

UK Pound

1

Rs.77.84

Euro

1

Rs.57.78

 

 

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

 

 

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