MIRA INFORM REPORT
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Report Date : |
14.11.2008 |
IDENTIFICATION DETAILS
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Name : |
RASHTRIYA CHEMICALS AND FERTILIZERS LIMITED |
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Registered Office : |
Priyadarshani, Eastern |
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Country : |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
06.03.1978 |
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Com. Reg. No.: |
11-20185 |
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CIN No.: [Company Identification No.] |
L24110MH1978GOI020185 |
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TAN No.: (Tax Deduction & Collection Account No.) |
MUMRO953E / MUMR15728G |
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PAN No.: (Permanent Account No.) |
AAACR2831H |
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Legal Form : |
Public limited liability company.
The company's shares are listed on the Stock Exchanges. Subject is owned by Government of India. |
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Line of Business : |
Manufactures and Markets a wide range of chemical fertilisers and a series
of industrial chemicals |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 77000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a Government of India Company having moderate track. However, available information indicates
high financial responsibility of the company, since it is a Government of
India Company. The company's profitability is under severe pressure. General financial position is
satisfactory. Payments are usually
correct and as per commitments. The company can be considered good for normal business dealings at
usual trade terms and conditions. Lenders and creditors may feel confident due to the exposure of
Government of India to the company. |
LOCATIONS
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Registered Office : |
“Priyadarshini”, 10th Floor, Eastern |
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Tel. No.: |
91-22-24070968/0223/8590/24070024/24045024/25522260 |
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Fax No.: |
91-22-2407 0386/24070028/25522320 |
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E-Mail : |
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Website : |
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Manufacturing Complexes At: |
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Regional Offices : |
Administrative Building, Chembur, Mumbai – 400 074, Contact Person: Mr. P. K. Ghai – General Manager Tel. No.: 91-22-2556 2164 Thal Unit, Alibaug, Contact Person: Mr. H. N. Gakhar Tel. No.: 91-2141-238001 Shri Laxmi Complex, 10-2-289/25, Shantinagar, Contact Person: Mr. S. S. Bobdey, CMM Tel. No.: 91-40-2331 4251 Contact Person : Mr. S. Thangraj, Deputy General Manager Tel. No.: 91-80-225 4920 51, Contact Person : Mr. N. Subramanian, Marketing Manager Tel. No.: 91-44-2826 6245 B-63, Mandir Marg, Mahanagar Extn. Contact Person : Mr. S. B. Selote, Marketing Manager Tel. No.: 91-522-2323 238 Contact Person: Mr. M. K. Gera, AMM Tel. No.: 91-11-2696 8662 / 2681 5149 Pune Regional Office, 68/5/2 A, Mahalaxmi Complex, Bibavewadi, Satara
Road, Pune – 411 037, Maharashtra, India Contact Person : Mr. D. T. Barkhud, MM Tel. No.: 91-20-52511545 |
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Resident Representative at |
A-1, Qutab Hotel, Off Aurobindo Marg, Contact Person: Mr. M. K. Gera (Chief Marketing Manager) |
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Tel. No.: |
91-11-2685 1419 (Office) / 2723 2637 (Res.) |
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Guest House: |
Contact Person: Mr. A. N. Borkar, Chief Executive Officer Tel. No.: 91-22-2558 3981 (Office) / 2555 1242 (Res.) Swagat Guest House, Kihim, District Raigad, Alibaug, Contact Person: Maj. Ranade, Tel. No.: 91-2141-238028 (Office) / 238019 (Res.) |
DIRECTORS
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Name : |
Mr. S. Balan |
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Designation : |
Chairman and Managing Director (Up to
31.07.2005) |
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Name : |
Mr. |
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Designation : |
Chairman and Managing Director |
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Name : |
Mr. M. Sundararaman |
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Designation : |
Director (Finance) (upto 13.06.2008) |
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Name : |
Mr. H.S. Karangle |
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Designation : |
Director (Technical) |
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Name : |
Ms. Swatantra K. Sekhon |
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Designation : |
Executive Director |
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Address : |
FICC, Sewa Bhavan, |
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Name : |
Mr. K. P. Fabian |
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Designation : |
Director (upto 29.11.2005) |
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Address : |
C/45, I.F.S. Apartments, Mayur Vihar,
Phase I, |
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Name : |
Mr. Ashok Misra |
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Designation : |
Director |
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Address : |
III, Powai, Mumbai – 400076 |
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Name : |
Dr. (Mrs.) Hemlatha Santhanam |
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Designation : |
Director (upto 29.11.2005) |
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Address : |
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Name : |
Lt. Gen. (Retd) M.S. Bhullar |
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Designation : |
Director (upto 29.11.2005) |
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Address : |
House no. 138, Section 38, Arun Vihar,
Noida - 208 303 |
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Name : |
Mr. Sanjay Kaushik |
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Designation : |
Director (upto 29.11.2005) |
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Address : |
E-14/22, Vasant Vihar, New Delhi-110057 |
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Name : |
Mr. J Kohareswaran |
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Designation : |
Director (Marketing) |
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Name : |
Mr. Gautam Sen |
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Designation : |
Director (Finance) (From 14.07.2008) |
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Name : |
Mr. I C Srivastava, (IAS Retd.) |
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Designation : |
Director |
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Address : |
4 ka-26, Jawahar Nagar, Jaipur – 302 004, |
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Name : |
Mr. Anil Agrawal |
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Designation : |
Director |
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Address : |
B-139, Kalkaji, |
KEY EXECUTIVES
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Name : |
Mr. K. C. Prakash |
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Designation : |
Company Secretary |
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Name : |
Dr. Jivtesh Singh Maini |
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Designation : |
Additional Secretary and Financial Advisor (w.e.f. 27.10.2005) |
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Address : |
Department of Fertilizers, |
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Name : |
Mr. B.K.Sinha |
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Designation : |
Joint Secretary (up to 12.07.2006) |
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Address : |
Department of Fertilizers, |
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Name : |
Mr. Balvinder Kumar |
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Designation : |
Joint Secretary |
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Address : |
Department of Fertilizers, |
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Name : |
Mr. Deepak Singhal, IAS |
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Designation : |
Joint Secretary |
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Address : |
Department of Fertilizers, |
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Name : |
Mr. Mathew C Kunnumkal, IAS |
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Designation : |
Additional Secretary and Financial Advisor |
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Address : |
Department of Fertilizers, |
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Name : |
Dr. J S Maini |
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Designation : |
Additional Secretary and Financial Advisor |
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Address : |
Department of Fertilizers, |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(As on 31.03.2008)
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Names
of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters (Government Of |
510314900 |
92.50 |
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Institutions |
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Mutual Funds and Axis Bank |
3579105 |
0.65 |
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Financial Institutions, Banks, etc |
7258531 |
1.32 |
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FII’s |
2253104 |
0.41 |
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Others |
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Private
Corporate Bodies |
5339463 |
0.97 |
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Indian
Public |
22114532 |
4.00 |
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NRIs/OCB |
828465 |
0.15 |
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Total |
551688100 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufactures and Markets a wide range of chemical fertilisers and a
series of industrial chemicals |
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Products : |
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PRODUCTION STATUS
(As on 31.03.2008)
Metric Tonnes
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Products |
Licensed
Capacity (MT) |
Installed
Capacity (MT) |
Actual
Production |
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Ammonia (Trombay-I) |
116000 |
115500 |
16520 |
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Ammonia (Trombay-V) |
297000 |
297000 |
265250 |
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Ammonia (Thal) |
NA |
990000 |
1054905 |
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Urea (Trombay-V) |
427500 |
330000 |
-- |
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Urea (Thal) |
NA |
1706800 |
1832334 |
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Suphala15:15:15 (Complex Fertilizers) |
300000 |
300000 |
468200 |
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Suphala 20:20:20 (Ammonium Nitrate Phosphate) |
361000 |
361000 |
-- |
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Methanol |
37500 |
49500 |
62673 |
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Ammonium Bicarbonate |
NA |
4000 |
21250 |
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Argon (million NM3) |
NA |
3 |
2.7 |
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Nitric Acid (100%) |
101600 |
105600 |
79190 |
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Nitric Acid (100%) (Trombay IV) |
255000 |
247500 |
235555 |
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Sulphuric Acid (98%) |
99000 |
99000 |
83716 |
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Phosphoric Acid |
32000 |
30000 |
23485 |
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Dilute Sulphuric Acid |
NA |
0 |
77054 |
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Sodium Nitrate/Nitrite |
4000 |
4000 |
5422 |
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Concentrated Nitric Acid |
NA |
20000 |
22054 |
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Methylamines - (Trombay) |
4000 |
4000 |
6020 |
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Methylamines - (Thal) |
NA |
11400 |
9610 |
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Hydroflurosilicic Acid |
NA |
1400 |
-- |
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Ammonium Nitrate (100%) |
54000 |
54000 |
122398 |
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Dimethyl formamide |
NA |
2500 |
1200 |
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N-15 (Grams) |
NA |
800 |
-- |
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T. G. Urea (Thrombay) |
NA |
0 |
0 |
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T. G. Urea (Thal) |
NA |
0 |
18046 |
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Di Methyl Acetamide |
NA |
5000 |
1964 |
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Carbon Monoxide Plant (million NM3) |
NA |
9.5 |
2.4 |
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Biola (Bio Fertilizer) |
150 |
150 |
132 |
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Microla (Ltrs) |
100000 |
100000 |
75880 |
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Formic Acid |
NA |
10000 |
3504 |
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Sujala 19:19:19 |
NA |
150 |
1831 |
GENERAL INFORMATION
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No. of Employees : |
4600 |
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Bankers : |
·
State Bank of ·
Swastik Chamber, Chembur, Mumbai |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
Statutory
Auditors: ·
J. Shah and Company Chartered Accountants Address : Mumbai ·
S. Mohan and Company Chartered
Accountants Address : Ahmedabad ·
Batliboi and Purohit Chartered Accountants Address : Mumbai ·
K S Aiyar and Company Chartered Accountants Address : Mumbai |
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Associates : |
All Government of India Undertaking Companies |
CAPITAL STRUCTURE
(As on
31.03.2008)
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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800000000 |
Equity Shares |
Rs.10/- each |
Rs. 8000.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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551688100 |
Equity Shares |
Rs.10/- each |
Rs. 5516.900 millions |
(Of the above 112528100 shares were allotted as
fully paid-up pursuant to a contract without payment being received in cash)
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
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SOURCES
OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
5516.900 |
5516.900 |
5516.900 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
9872.200 |
8986.100 |
8144.100 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
15389.100 |
14503.000 |
13661.000 |
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LOAN FUNDS |
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1] Secured Loans |
11040.400 |
2209.600 |
3372.400 |
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2] Unsecured Loans |
1394.400 |
7342.700 |
1000.000 |
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TOTAL BORROWING
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12434.800 |
9552.300 |
4372.400 |
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DEFERRED TAX LIABILITIES |
1660.900 |
1669.900 |
0.000 |
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TOTAL
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29484.800 |
25725.200 |
18033.400 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
10541.400 |
10159.100 |
8724.100 |
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Capital work-in-progress
|
1146.800 |
1193.800 |
2075.800 |
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INVESTMENT
|
3596.900 |
1.700 |
1.700 |
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DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS &
ADVANCES
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Inventories
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8655.200
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7202.500
|
4135.800
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Sundry Debtors
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11410.900
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8825.400
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7197.900
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Cash & Bank Balances
|
493.100
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2305.400
|
665.700
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Other Current Assets
|
0.000
|
0.000
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0.000
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Loans & Advances
|
2313.200
|
2292.000
|
4069.500
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Total Current Assets
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22872.400
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20625.300
|
16068.900 |
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Less : CURRENT LIABILITIES &
PROVISIONS
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Current Liabilities
|
5929.100
|
4211.600
|
6823.900
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Provisions
|
2758.900
|
2073.100
|
2059.200
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Total Current Liabilities
|
8688.000
|
6284.700
|
8883.100
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Net Current Assets
|
14184.400
|
14340.600
|
7185.800
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MISCELLANEOUS EXPENSES
|
15.300 |
30.000 |
46.000 |
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TOTAL
|
29484.800 |
25725.200 |
18033.400 |
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PROFIT &
LOSS ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
26290.200 |
18284.600 |
31020.900 |
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Other Income |
26142.700 |
17449.000 |
1030.800 |
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Total Income |
52432.900 |
35733.600 |
32051.700 |
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Profit/(Loss) Before Tax |
2420.700 |
2412.400 |
2156.700 |
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Provision for Taxation |
839.200 |
925.000 |
677.100 |
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Profit/(Loss) After Tax |
1581.500 |
1487.400 |
1479.600 |
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Earnings in Foreign Currency : |
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Export of Goods calculated on FOB basis |
1.300 |
6.600 |
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Freight and Insurance recovered |
0.000 |
0.100 |
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Tech. manpower fees |
0.000 |
3.200 |
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Total Earnings |
1.300 |
9.900 |
10.400 |
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Imports : |
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Raw Materials |
2424.000 |
5266.000 |
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Stores & Spares |
152.800 |
176.000 |
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Capital Goods |
185.200 |
664.200 |
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Total Imports |
2762.000 |
6106.200 |
2964.600 |
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Expenditures : |
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Transfer of Finished Product Stock from
trail run |
0.000 |
2.500 |
0.000 |
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Purchases of Finished Products / Bought out
Products |
12843.900 |
4788.800 |
0.000 |
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Manufacturing Expenses |
0.000 |
0.000 |
1512.700 |
|
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Administrative Expenses |
0.000 |
0.000 |
3099.400 |
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Material Consumed |
13936.500 |
12572.400 |
12326.900 |
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Research and Development |
12.300 |
8.300 |
0.000 |
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Increase/(Decrease) in Finished Goods |
(1299.500) |
(3408.200) |
329.400 |
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Salaries, Wages, Bonus, etc. |
2294.000 |
1792.500 |
0.000 |
|
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Employee Cost |
0.000 |
0.000 |
1672.600 |
|
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Repairs and Maintenance |
762.600 |
631.600 |
0.000 |
|
|
Excise Duty |
(3.400) |
2.100 |
571.000 |
|
|
Miscellaneous Expenses |
0.000 |
0.000 |
596.300 |
|
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Interest |
662.500 |
487.700 |
170.500 |
|
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Freight and Handling charges |
5083.600 |
2749.100 |
0.000 |
|
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Power & Fuel |
12964.900 |
11241.600 |
9085.400 |
|
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Depreciation & Amortization |
831.800 |
754.200 |
687.600 |
|
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Preoperative Expenditure
Capitalised |
0.000 |
0.000 |
(156.800) |
|
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Other Expenditure |
1923.000 |
1698.600 |
0.000 |
|
Total Expenditure |
50012.200 |
33321.200 |
29895.000 |
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QUARTERLY RESULTS
|
Year |
30.06.2008 |
30.09.2008 |
|
Type |
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
15606.800 |
26142.200 |
|
Other Income |
143.100 |
155.500 |
|
Total Income |
15749.900 |
26297.700 |
|
Total Expenditure |
14996.400 |
24602.100 |
|
Operating Profit |
753.500 |
1695.600 |
|
Interest |
247.300 |
198.400 |
|
Gross Profit |
506.200 |
1497.200 |
|
Depreciation |
210.000 |
211.800 |
|
Tax |
99.600 |
500.400 |
|
Reported PAT |
190.600 |
843.700 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.74 |
0.49 |
0.31 |
|
Long Term Debt-Equity Ratio |
0.11 |
0.11 |
0.08 |
|
Current Ratio |
1.17 |
1.32 |
1.37 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.92 |
1.39 |
1.27 |
|
Inventory |
6.53 |
6.23 |
7.25 |
|
Debtors |
5.17 |
4.44 |
5.16 |
|
Interest Cover Ratio |
4.65 |
5.95 |
13.65 |
|
Operating Profit Margin(%) |
7.49 |
10.27 |
9.72 |
|
Profit Before Interest And Tax Margin(%) |
5.9 |
8.15 |
7.5 |
|
Cash Profit Margin(%) |
4.62 |
6.3 |
6.99 |
|
Adjusted Net Profit Margin(%) |
3.02 |
4.18 |
4.77 |
|
Return On Capital Employed(%) |
11.90 |
13.81 |
13.51 |
|
Return On Net Worth(%) |
10.58 |
10.56 |
11.18 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject was incorporated in 1978 with the reorganisation of the erstwhile
Fertiliser Corporation of
Subject set up purge gas recovery units in order to recover ammonia, hydrogen,
methane and argon from the purge gas coming out of the ammonia plants at
Trombay and Thal. A dimethyl formamide plant (cap. : 2500 tpa) and a
methylamine plant with a capacity of 5000 tpa were installed at Thal in
1991-92. It commissioned a dimethyl acetamide plant at Thal in 1993-94. In
1994-95, Subject signed a MoU with Saudi Formaldehyde Chemical Company, to set
up a chemical complex in
During 1998-99, the company has signed MOU with UCB S.A. Chemicals,
The Company is envisaging a joint venture project for manufacturing DAP at
Udaipur in Rajashtan with Hindustan Zinc Limited, Udaipur and Rajasthan State Mines
and Minerals Limited and the final decision on feasibility project is awaiting.
The company has invested around Rs 5000 millions for the upgradation of its
plants at Trombay and is converting most of its existing plants to operate on
natural gas.
During 2000-2001, the company entered into an agreement with Metgas a
subsidiary of Enron , for long term supply of regassified LNG. The Company has
also recently commissioned the Naptha Feed Supplement Project at Thal, which
would enable the plant to run at enhanced capacity by utilising alternate feed
Naptha partly alongwith available gas from GAIL. To reduce steam consumption
from Urea Plant at Thal the company implemented an energy saving optimization
scheme at a cost of Rs.400 millions.
A major expansion plan at Thal plant consisting of 1350 MTPD Ammonia and 2200
MTPD urea plan is under awaiting the final approval from the Government of
India at an estimated capital outlay of Rs.14460 millions. The Techno-economic
Feasibility of Methylamine for expansion is under preparation. The total cost
for the expansion is esimated to be Rs.250 millions. The Disinvestment Ministry
has started the process of disinvestment of the company and the Government is
proposing to reduce 51% of its equity to a strategic partner, with transfer of
Management Control.
Subject has completed the project of modernization of the front end of H.P.
Nitric Acid Plant at its Trombay unit, consisting of air compressor,reactor etc
at cost of Rs.858.100 millions in January 2005. The Company has planned to
revamp the Trombay- V Ammonia Plant by upgrading the technology to improve
efficiency and reduce energy consumption at an estimated cost of Rs.2490
millions and this project will be completed by April 2006. The company has also
planned to increase the production capacity of Methylamine plant at Thal to
produce additional 6400 MTPA and this project is estimated at a cost of
Rs.297.800 millions. Further the company has planned to setup 1 X 2000 MTPD
Ammonia Plant and 1 X 3200 MTPD Urea Plant along with power generation,
offsite, utilities and product handling facilities at Thal and this project is
estimated at a cost of Rs.18410 millions. The company has also planned for
adopting Cryogenic separation of tail gas generated in Hydrogen Recovery Unit
of Ammonia Plants at Thal, at an estimated cost of Rs.700 millions.
HIGHLIGHTS FOR THE
YEAR 2007-2008:
The Company's overall performance was highly satisfactory during the financial
year 2007-08. The Company achieved highest ever turn over of Rs.52289.700
millions. The total income from operations was Rs.53250.600 millions as against
Rs.36431.500 millions during the previous year registering a growth of 46.17%.
The Company achieved a Gross Profit of Rs.3886.100 millions as against
Rs.3635.200 millions during the previous year, thus recording an increase in
the operational profits by 6.90%. The Company undertook substantial trading
activity, especially that of imported Urea. This has helped in increasing
Company's market share and brought tremendous Strategic advantage, even though
profitability has not increased in that proportion. The profit margin in
trading is very low. The net Profit before Tax at Rs.2420.700 millions as
against Rs.2412.400 millions registered an increase of 0.34%. However, the
Profit after Tax during the current year, is higher at Rs.1581.500 millions as
against Rs.1487.400 millions in the previous years an increase of 6.33% over
previous year. The net Interest cost during the year has increased to
Rs.593.200 millions compared to Rs.469.300 millions during the previous year
since the borrowing for working capital has gone up, largely due to the delayed
subsidy payments by Government and also receiving part of the same in the form
of Government Bonds. However, considering the substantial increase in the
turnover, the increase of interest cost by only Rs.123.900 millions reflects
the efficient manner in which the working capital of the Company has been
managed in the year under consideration.
The Company's operations remained highly satisfactory despite being affected
due to constraint in the availability of feedstock gas and increased input
costs and delay in subsidy re-imbursements. Inspite of all these set backs the
Company's performance has been laudable.
PRODUCTION
Fertilizers
The Company produced 23.00 lakh MT of fertilizers during the year as against
23.71 lakh MT produced in the previous year and achieved overall capacity
utilisation of 85.30% as against 88% during the previous year. The capacity
utilisation of the Urea plants was to the extent of 86.96% only, since the
plant at Trombay was not operated due to gas limitation and Thal Plant
underwent scheduled shutdown. As regards complex fertilizers, Suphala
[15:15:15] plant produced to the extent of 156.07%. In terms of nutrients, the
Company produced 9.13 lakh MT of Nitrogen (N), 0.70 lakh MT of Phosphate (P2O5)
and 0.70 lakh MT of Potassium (K2O) during the year as compared to 9.32 lakh MT
of N, 0.79 lakh MT of P2O5 and 0.72 lakh MT of K2Oduring the previous year.
The production was affected due to the constraint in feedstock gas supply. The
performances of the units are given below:
Thal Unit
Thal unit produced 18.32 lakh MT of Urea during the year compared to 18.53 lakh
MT produced in the previous year. The unit achieved a capacity utilisation of
107.35% as compared to 108.57% during the previous year. The unit produced
10.55 lakh MT of Ammonia compared to 10.79 lakh MT during previous year. The
energy consumption per MT of Urea was 6.561 Goal and for Ammonia produced, the
consumption was 9.334 Gcal. In terms of nutrients the unit produced 8.43 lakh
MT of N during the year compared to 8.52 lakh MT during the previous
year.
Trombay Unit
Trombay Unit produced 4.68 lakh MT of Suphala 15:15:15 during the year under
report compared to 5.18 lakh MT of complexes produced (4.83 lakh MT of Suphala
15:15:15 and 0.35 lakh MT of Suphala 20:20:0) during the previous year. The
unit, during the year did not produce Urea due to the constraint in the
availability of feed stock gas. Presently ANP plant is being reengineered and
major work is being undertaken hence the unit did not produce Suphala 20:20.
The achieved an overall capacity utilization of 47.25% compared to 52.27%
during the previous year. In terms is of Nutrient values, the unit produced 0:7
lakh MT of N during the year (previous year 0.79 lakh MT), produced 0.72 lakh
MT P2O5 ( previous year 0.79 MT) and 0.72 lakh MT K2O (previous year 0.72
MT).
Industrial
Products
For chemicals also the Company is one of the major manufacturers in the
country producing several Industrial Chemicals at the two units. During the
year the Company produced 1.34 lakh MT of various major Industrial Chemical
products compared to 1.32 lakh MT during the previous year. The Company produces,
amongst others, Methanol, Methylamines and derivatives, Ammonium Nitrate,
Sodium Nitrate / Nitrate Ammonium Bi-Carbonate, Formic Acid etc.
MARKETING
PERFORMANCE:
Fertilizer
Division
The Company took a quantum Jump in the sale of Fertilizers to 40:50 lakh MT
during 2007-08 as compared to 25.67 lakh MT in the previous year. The Company
sold 17..67 lakh MT of Urea, 4.91 lakh MT of Suphala 15:15:15, and 17.92 lakh
MT of bought out products such as Urea, DAP, MOP, etc. compare to 17.76 lakh MT
of Urea, 4.59 lakh MT of Suphala 15:15:15, 0.54 lakh MT of Suphala 20:20 and
2.78lakh MT of bought out products during the previous year.
The Company did not sell Suphala 20:20:0 during the year under reference, due
to shutdown of the plant.
At the level of 31.01 lakh MT, urea sales have been the highest ever achieved
in any year. The Company has emerged as the largest supplier of urea in the
states of
Sales of traded products constituted 43% of the total sales volume of the
Company marking a shift toward the changing market trends. All states
registered impressive increase in market share over the previous years. In
order to increase its product range, the Company entered into the marketing of
Industrial
Products Division
The Industrial Products Division achieved a record sale of Rs.6558.000 millions
during the year, compared to Rs.5616.400 millions during the previous year,
achieving a growth rate of 16.77% despite persistent fierce competition both
from domestic and international players.
Exports
The Export turnover for the year 2007-08 was Rs.1.300 millions as against
Rs.6.700 millions achieved during the previous year. Considering the products
line of the Company and realisation from domestic market, scope for exporting
and earning foreign exchange is very limited.
NEW INITIATIVES
ADOPTED:
In its commitment to service the farming community, the Company continued
Strategic alliance with major Companies like ITC e-choupal and Godrej Aadhar
which are active in promoting rural retail as well as other services to the farmers
to improve the farm productivity. Marketing through channels like e-choupal has
tremendously increased the reach of the Company. More than 4000 field
demonstrations were carried out during the year in association with ITC's
e-choupal.
The Fertilizer
Industry
The Company is manufacturing nitrogenous and phosphatic fertilizers. While Urea
is under price and movement control, the phosphatic fertilizers continue to be
under the indirect control of the Government. Government of
·
The same grouping as was followed during the NPS-I
and II would continue.
·
Reduction in capital related charges by Rs.50/- PMT
for pre-92 naphtha and FO/LSHS units, Rs.75/- PMT for all other units.
·
Capacity utilization norms increased to 93% for
pre-92 naphtha and FO/LSHS units and 98% for all other units.
·
Inputs for manufacture of fertilizers such as gas,
naphtha and FO/LSHS to be declared goods of special importance for concessional
rate of Sales Tax.
·
Cost of bags, which was frozen during NPS-I and II,
would be allowed based on 3 years moving average.
·
All functional non-gas based units to get converted
to gas within a period of 3 years.
·
A committee under the chairmanship of Secretary
(Petroleum and Natural gas) to oversee the aspects of supply, connectivity and
pricing of gas to fertilizer units.'
·
The concept of de-bottlenecking has been abolished.
No permission would be required from the Government for production beyond 100%
of reassessed capacity. Government to make merit order procurement of
production between 100% and 110% and would be incentivized on the net gain
sharing formula of 65:35 where 65% would go to the Government. For production
beyond 110%, the unit gets its own concession rates or the import parity price
whichever is lower.
·
Decontrol the distribution of urea upto 50% of
reassessed capacity. States would be required to allocate the entire quantity
of planned Urea arrivals i.e. both under ECA and non-ECA in a district-wise,
supplier-wise. and month-wise manner. Freight subsidy to the units would be
reimbursed based on conformity to planned movement up to the district level for
both ECA as well as Non-ECA quantity.
·
Primary freight would be reimbursed based on the
actual leads for Rail Movement. For the Road component of the primary freight,
road leads would be as per actual distance to the primary godowns and would be
suitably escalated based on the composite road transport index. One time
enhancement of 33% would be granted on the road component of primary
freight.
·
Units which are currently not in operation such
Generally the policy is favourable to the Thai unit. However, the policy is not
favourable to the Trombay unit since the unit would be considered under pre-92
gas group'. The outlier benefit which was available to Trombay unit would no
longer be available. The Company has represented to the Government to consider
a separate policy for Trombay unit, since it is a producer of low cost urea. A
favourable dispensation is expected from the Government shortly.
Government of India vide its notification dated 12th June, 2008 has introduced
nutrient based pricing and has notified new MRPs for all P and K fertilizers
based on its nutrient content. These new MRPs are effective from 18th June,
2008. As a result of this notification the prices of these fertilizers have
gone down by about Rs.474/PMT to about Rs.2296/- PMT. The reductions in the
MRPs will lead to higher payment of subsidy.
The rationalization of MRPs based on the nutrient content is desirable. Now
farmer has to pay for the nutrients in any product. This will avoid skewed
Competition in various products and nutrients.
Company has formed a joint venture M/s Rajasthan State
Minerals and Mines Limited (RSMML) for the manufacture of Di-Ammonium Phosphate
near
As per agreement with M/s. Hindustan Petroleum Corporation
Limited (HPCL) for supply of naphtha, company is eligible to receive 20% of
actual Deemed Export Benefit received by M/s HPCL on issue of Project Authority
Certificate. During the year, company has received an adhoc payment of
Rs.75.000 millions from M/s HPCL in this regard. The Same has been accounted on
receipt basis pending final settlement.
FIXED ASSETS
·
Land (Freehold)
·
Land (Leasehold)
·
Roads and Culverts
·
Buildings
·
Railway sidings
·
Plant and Machinery
·
Water System, Sewerage and Drainage
·
Miscellaneous Equipments
·
Furniture, Fixtures and Office Appliances
·
Transport Vehicles
·
Computer Software
CMT REPORT [Corruption, Money laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The
Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] 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.48.79 |
|
|
1 |
Rs.75.41 |
|
Euro |
1 |
Rs.61.48 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
68 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|