MIRA
INFORM REPORT
|
Report Date : |
21.02.2008 |
IDENTIFICATION
DETAILS
|
Name : |
UNITED PHOSPHORUS LIMITED |
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Formerly Name |
CHEM INDUSTRIES LIMITED |
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Registered Office : |
3-11, GIDC, Vapi Valsad 396195, Gujarat |
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Country : |
India |
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Financials (as
on) : |
31.03.2007 |
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Date of Incorporation : |
02.01.1985 |
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Com. Reg. No.: |
04-25132 |
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CIN No.: [Company
Identification No.] |
L24219GJ1995PLC025132 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMU03710A |
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PAN No.: [Permanent
Account No.] |
AABCS1698G |
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Legal Form : |
Subject is a public limited liability company. The company's shares are listed on the Stock Exchanges. |
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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 |
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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 45070000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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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 |
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Tel. No.: |
91-260-2432716 / 232720 / 2400717 |
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Fax No.: |
91-220-2401823 |
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E-Mail : |
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Website : |
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Administrative Office : |
Uniphos House, Madhu Park Centre, Opposite Madhu Park, Chitraker Dhurandar Marg, Khar (West), Mumbai - 400 052, Maharashtra, India |
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Tel. No.: |
91-22-22604111 |
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Fax No.: |
91-22-22401823 |
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Factory : |
Located at :
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DIRECTORS
|
Name : |
Mr. R. D. Shroff |
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Designation : |
Chairman and Managing Director |
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Address : |
202, Parishram, Nargis Dutt Road, Pali Hill, Mumbai – 400050, India |
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Date of Birth/Age : |
74 years |
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Qualification : |
B.Sc. Diploma in Ind. Engineer NITIE |
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Experience : |
50 years |
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Date of Appointment : |
29.05.1969 |
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Name : |
Mrs. S. R. Shroff |
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Designation : |
Vice Chairperson |
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Address : |
202, Parishram, Nargis Dutt Road, Pali Hill, Mumbai – 400050, India |
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Date of Birth/Age : |
67 years |
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Qualification : |
SR Cambridge |
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Experience : |
40 years |
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Date of Appointment : |
29.05.1969 |
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Name : |
Mr. J. R. Shroff |
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Designation : |
Executive Director |
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Address : |
4/B Summer Palace, Pali Hill, Nargis Dutt Road, Mumbai – 400050, India |
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Date of Birth/Age : |
42 years |
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Qualification : |
B.Sc. |
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Experience : |
21 years |
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Date of Appointment : |
01.01.1990 |
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|
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Name : |
Mr. A. C. Ashar |
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Designation : |
Director – Finance |
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Address : |
Muktanagar, 10th Floor, Sarojini Road, Santacruz (West), Mumbai - 400054 |
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Date of Birth/Age : |
59 years |
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Qualification: |
B.Com, A.C.A. |
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Experience : |
34 years |
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Last Employment: |
Finance Controller Excel Industries Limited |
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Name : |
Mr. Kalyan Banerjee |
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Designation : |
Wholetime Director |
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Address : |
B 1903, Lake Castle, Hiranandani Gardens, Powai, Mumbai - 400076 |
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Date of Birth/Age : |
65 years |
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Qualification : |
B. Tech. |
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Experience : |
40 years |
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Date of Appointment : |
21.10.2003 |
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Name: |
Mr. Pradeep Goyal |
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Designation: |
Independent Director |
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Address : |
43, Dharam Jyot No.2, New Kantwadi Road, Bandra (West), Mumbai – 400050, Maharashtra, India |
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Date of Birth/Age : |
52 years |
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Qualification : |
B. Tech, M.S.,US |
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Experience : |
27 years |
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Name: |
Dr. P. V. Krishna |
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Designation: |
Independent Director |
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Address : |
17 Ashiyana Apartment, Opp. Cadila House, Near Kalpana Society, Navrangpura, Ahmedabad - 380009 |
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Date of Birth/Age : |
70 years |
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Qualification : |
B. Sc, PHD (Tech) |
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Experience : |
36 years |
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Name: |
Dr. (Mrs.) Reena Ramachandran |
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Designation: |
Director |
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Address : |
53 – C, H Block, Saket, New Delhi – 110017, India |
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Date of Birth/Age : |
70 years |
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Qualification : |
M. Sc, D. Phil, D. Sc |
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Experience : |
36 years |
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr. Pradip Madhavji |
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Designation: |
Director |
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Address : |
Ashiana, 1st Floor, 5 Altamount Road, Mumbai – 400026, India |
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Date of Birth/Age : |
71 years |
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Qualification : |
B. Sc, BA, B. Com, LLB |
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Experience : |
45 years |
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Date of Appointment: |
29.01.2004 |
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Name: |
Mr. A. L. Bongirwar |
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Designation: |
Nominee Director |
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr. A. A. Panjwani |
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Designation: |
Director |
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr. P. N. Devarajan |
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Designation: |
Director |
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Date of Appointment: |
21.10.2003 |
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Name: |
Dr. Nitish Sengupta |
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Designation: |
Director |
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Date of Appointment: |
21.10.2003 |
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Name: |
Mr. D. A. Anandpura |
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Designation: |
Director |
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Date of Appointment: |
21.10.2003 |
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Deceased On: |
4.11.2003 |
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Name: |
Mr. Vikram R Shroff |
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Designation: |
Executive Director |
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Address : |
4/B Summer Palace, Pali Hill, Nargis Dutt Road, Mumbai – 400050, India |
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Date of Birth/Age : |
34 years |
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Qualification : |
B. Sc |
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Experience : |
13 years |
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Name: |
Mr. Vinod Sethi |
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Designation: |
Director |
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Address : |
210, Neel Tarang, Flat No.11, Veer Savarkar Marg, Mahim, Mumbai – 400016, India |
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Date of Birth/Age : |
45 years |
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Qualification : |
B. Tech, MBA – Finance, Beta Gamma Sigma, US |
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Experience : |
18 years |
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Name: |
Mr. Chirayu R Amin |
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Designation: |
Director |
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Address : |
F/10/195, Race Course Circle, Gotri Road, Vadodara – 390007, Gujarat, India |
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Date of Birth/Age : |
61 years |
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Qualification : |
B. Sc, MBA |
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Experience : |
36 years |
KEY EXECUTIVES
|
Name: |
Mr. M B Trivedi |
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Designation: |
Company Sectary |
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Name: |
Mr. K. R. Srivastva |
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Designation: |
Chief Operating Officer |
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Qualification: |
B. Chem, PGDBMA (IIM), DSM |
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Last Employment: |
President- Pharmaceutical Products of India Limited |
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Name: |
Mr. Vishnu Bhat |
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Designation: |
President Profit Center |
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Qualification: |
B. Tech (Chemical Engineering) |
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Last Employment: |
CEO-Shaw Wallace Agrochemical Limited |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of. Share |
Percentage of
Holding |
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A) Shareholding of Promoter and Promoter Group |
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India |
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Individuals/ Hindu Undivided Family |
12125290 |
5.68 |
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Bodies Corporate |
40852965 |
19.13 |
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Foreign
(Individuals) |
2427375 |
1.13 |
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B) Public
Shareholding |
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Institutions |
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Mutual Funds/ Axis |
28939886 |
13.55 |
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Financial Institutions/ Banks |
14391 |
0.01 |
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Central Government/ State Government(s) |
- |
- |
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Venture Capital Funds |
- |
- |
|
Insurance Companies |
2045086 |
0.96 |
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Foreign Institutional Investors |
95002778 |
44.49 |
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Foreign Venture Capital Investors |
- |
- |
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Any Other (Specify) |
- |
- |
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Non-Institutions |
|
|
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Bodies Corporate |
8329995 |
3.9 |
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Individuals |
15641386 |
7.32 |
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Any Other |
- |
- |
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Overseas Corporate Bodies |
4238244 |
1.98 |
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Non-Resident Indians |
3506800 |
1.64 |
|
C) Shares held by Custodians and against which Depository Receipts
have been issued |
434460 |
0.21 |
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|
|
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Total |
213558656 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing of Chemicals such as Phosphorus Trichloride, Caustic Soda, Chlorine, etc. |
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Product : |
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Export to: |
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Countries : |
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Import From: |
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Countries : |
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PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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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 (KWH) |
|
Pesticides |
Tonnes |
36735 |
45205 |
30076 |
|
Mercury Salts |
Tonnes |
100 |
100 |
-- |
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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
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No of Employees: |
2149 |
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Bankers : |
84, Dr. Annie Besant Road, Worli – 400018, Mumbai
Sir P M Road, P O Box – 354, Mumbai – 400001
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Facility |
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Banking Relations
: |
Good |
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Auditors : |
S. V. Ghatalia And Associates Chartered Accountant |
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Subsidiaries : |
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Associate Company: |
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Joint Venture Company: |
United Phosphorus Limited, Bangladesh |
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Membership: |
Confederation of Indian Industry |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
275000000 |
Equity Shares |
Rs.2/- Each |
Rs.550.000 millions |
|
14000000 |
Preference Shares |
Rs.10/- Each |
Rs.1400.000 millions |
|
5000000 |
Preference Shares |
Rs.10/- Each |
Rs.50.000 millions |
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Total |
|
Rs.2000.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
18,7522068 |
Equity Shares |
Rs.2/- Each |
Rs.375.000 millions |
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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 |
|
|
|
|
|
|
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TOTAL
|
31517.500 |
22673.500 |
12745.729 |
|
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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 |
|
|
|
|
|
|
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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 |
0.000 |
|
|
Other Income |
1037.400 |
346.400 |
0.000 |
|
|
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 |
0.000 |
|
|
Interest / Dividend |
672.000 |
267.800 |
5941.759 |
|
|
Other Earnings |
52.400 |
0.300 |
0.000 |
|
Total Earnings |
7656.100 |
7422.200 |
5941.759 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
2749.600 |
2438.200 |
0.000 |
|
|
Stores & Spares |
2.100 |
1.800 |
2176.172 |
|
|
Capital Goods |
73.500 |
38.000 |
0.000 |
|
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
Subject (formerly Search Chem Industries Limited); a subsidiary of erstwhile subject (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 specialty chemicals like Phosphorus Pentachloride, Phosphorus Trichloride, Phosphorus Oxychloride, HEDP, Tri Phenyl Phosphite, Tri Phenyl Phosphate, ATMP etc. The company 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 (along with his family and investment companies), acquired majority
stake in erstwhile Viswanath Commercials in Feb 1994 and changed its name to
Search Chem Industries Limited. As a result of reorganisation with in the
group, subject acquired 75% equity in Search Chem in March 1995 and subject
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 subject are 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 rainfalls in U.S.A. are expected to be normal this year.
- REDEMPTION OF PREFERENCE SHARES:
During
the year, the Company redeemed 7% Non-convertible Non 7cumulative 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 and 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 and 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, along with 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, feticides, 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 lots 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 lots 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 and 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 and Machinery
· Furniture, Fixtures and Office Equipment
· Vehicles
Scheme of Arrangement
Subject is a listed public limited company and the shares
are listed on Mumbai Stock Exchange and national Stocks Exchange. It is engaged
in the business of manufacture of agrochemicals. It is a growth oriented profit
making company with turn over of more than Rs.13000.000 Millions during the
financial year ended on 31.03.2007. It has built up Reserves of more than
Rs.10000.000 Millions. The De-merged company which is a wholly owned subsidiary
of the Applicant Company is engaged in various activities through three
divisions. Haldia Division being the manufacturing division of agrochemicals,
Fertilizerd division having processing and packaging facility at Karmadi,
Kottayam and Calicut and a Marketing Division. With a view to increases its
operational synergies, the Board of directors of both companies decided to
de-merge the Haldia division of SWAL Corporation in to Subject. Further,
Pursuant to the de-merger, the applicant company would be in a position to
utilize the resources of the de-merged company viz. employees, manufacturing
facilities, access to necessary raw materials, etc. in a more efficient manner.
Subject, the Resulting Company simultaneously proposes to
carry out financial restructuring. It has a sum of approx. Rs.5368.700 Millions
towards intangible assets in the form of product registration and product
Acquisition Costs (net of Deferred Tax) The Company having realized that these
assets may not reap the benefits to the company, as anticipated earlier, intends
to streamline its financial statements by writing of the same. It is proposed
to adjust the same against Rs.5332.700 Millions standing towards the balance in
its securities premium account and the residue against the general reserve. The
Scheme of Arrangement envisages the said financial restructuring as an integral
part of the scheme of arrangement in accordance with section 391 to 394 read
with section 78,100 to 103 of the companies Act, 1956 subject to the approvals
of shareholders and Hon’ble High Court of Gujarat.
The Board of Directors of Subject and SWAL Corporation
has, at their respective board meetings held on 20th December, 2007,
approved the proposed scheme for arrangement in the nature of de-merger of the
Haldia Division of SWAL Corporation into Subject and Reduction of Capital in
the form of Utilisation of Securities Premium Account of Subject.
SWAL Corporation Limited (“SWAL Corporation” or
“De-merged Company” or “Transferor Company”)
The De-merged company, SWAL Corporation was incorporated
on 12th day of October, 1979 under the name and style of Shaw
Wallace Consultants Limited in consequence thereof a certificate of
incorporation was issued by the Registrar of Companies at Tamilnadu.
Subsequently, on 8th June 2001, the name was changed to Shaw Wallace
Agrochemicals Limited and then to the present name SWAL Corporation Limited on
17th May, 2004. As on today, SWAL Corporation is a wholly owned
subsidiary of subject.
The Registered Office of SWAL Corporation is situated at
167, Ready Money Terrace, Dr. A. B. Road, Worli and Mumbai – 400018
The Authorised Share Capital of SWAL Corporation as on
the date of dispatch of this explanatory statement is Rs.110.000 Millions
divided in to 3000000 Equity Share of Rs.10/- each and 800000 6% Non-Cumulative
Redeemable Convertible Preference shares of Rs.100/- each. The Issued,
Subscribed and Paid-up Share Capital of De-merged Company is Rs.80.200 Millions
divided into 1000007 Equity Shares of Rs.10/- each fully paid-up and 702000 6%
Non Cumulative Redeemable Convertible Preference Share of Rs.100/- each.
The Objects for which SWAL Corporation was established
are set out in its Memorandum of Association and Articles of Association. It is
engaged in the manufacture of agrochemicals, fertilizers and trading of
agrochemicals, fertilizers and others. SWAL currently has three division viz.
Haldia Division being the manufacturing division of agrochemicals, Fertilizers
Division having processing and packaging facility at Karamadai, Kottayam and
Calicut and a Marketing Division.
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 and 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.
SUBJECT ACQUIRES ADVANTA’S SEED BUSINESS FROM FOX PAINE
AND COMPANY
Mumbai, India (February 14, 2006) Subject 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 and Company, LLC. Subject 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 subject.
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 and D programs in rice, maize, sunflower, sorghum and canola.
Commenting on the transaction, Mr. Jai Shroff, Executive Director of subject,
said, “The acquisition of Advanta allows subjectto
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 subject 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 subject 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."
Subject 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 subject
Through acquisitions, strategic alliances and network of
over 36 subsidiaries, subject 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. Subject 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.
SUBJECT 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 Subject Mumbai, India and furthermore is exploring the possible business alliance of distribution in India and certain other countries.
Subject has been entrusted by ISK with manufacture of certain products developed by ISK. ISK, Subject and Mitsui and 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 subject as well as Subject’s domestic marketing network. Subject presently has 8 manufacturing facilities in India, one each in UK and Argentina. Subject currently has an 8% market share in India.
This partnership will continue to allow subject to grow organically, inorganically and through business alliances. Current revenue of Subject 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 and 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. Subject 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 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.40.15 |
|
UK Pound |
1 |
Rs.78.26 |
|
Euro |
1 |
Rs.59.06 |
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 |
|