1. Summary Information
|
|
|
Country |
|
|
Company Name |
MADRAS FERTILIZERS LIMITED |
Principal Name 1 |
Mr. M Sagar Mathews |
|
Status |
Poor |
Principal Name 2 |
Mr. Mansoor Rad |
|
|
|
Registration # |
005469 |
|
Street Address |
Manali, Chennai-600068, Tamilnadu |
||
|
Established Date |
08.12.1966 |
SIC Code |
-- |
|
Telephone# |
91-44-25941001 |
Business Style 1 |
Manufacturer |
|
Fax # |
91-44-25941010 |
Business Style 2 |
-- |
|
Homepage |
-- |
Product Name 1 |
Urea |
|
# of employees |
-- |
Product Name 2 |
Potassium Chloride Commercial |
|
Paid up capital |
Rs. 1,621,400,000/- |
Product Name 3 |
-- |
|
Shareholders |
-- |
Banking |
State
Bank of |
|
Public Limited Corp. |
Yes |
Business Period |
44 Years |
|
IPO |
Yes |
International Ins. |
- |
|
Public |
Yes |
Rating |
Ca (11) |
|
Related
Company |
|||
|
Relation
|
Country
|
Company
Name |
CEO |
|
Note |
- |
||
2. Summary
Financial Statement
|
Balance Sheet as of |
31.03.2010 |
(Unit: Indian Rs.) |
|
|
Assets |
Liabilities |
||
|
Current Assets |
2,081,100,000 |
Current Liabilities |
3,526,000,000 |
|
Inventories |
1,609,600,000 |
Long-term Liabilities |
9,091,900,000 |
|
Fixed Assets |
2,889,500,000 |
Other Liabilities |
113,000,000 |
|
Deferred Assets |
000 |
Total Liabilities |
12,730,900,000 |
|
Invest& other Assets |
25,500,000 |
Retained Earnings |
123,900,000 |
|
|
|
Net Worth |
(6,125,200,000) |
|
Total Assets |
6,605,700,000 |
Total Liab. & Equity |
6,605,700,000 |
|
Total Assets (Previous Year) |
6,026,700,000 |
|
|
|
P/L Statement as of |
31.03.2010 |
(Unit: Indian Rs.) |
|
|
Sales |
2,106,600,000 |
Net Profit |
68,800,000 |
|
Sales(Previous yr) |
1,981,000,000 |
Net Profit(Prev.yr) |
(1,452,100,000) |
MIRA
INFORM REPORT
|
Report Date : |
15.03.2011 |
IDENTIFICATION DETAILS
|
Name : |
MADRAS FERTILIZERS LIMITED |
|
|
|
|
Registered
Office : |
Manali, Chennai-600068, Tamilnadu |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2010 |
|
|
|
|
Date of
Incorporation : |
08.12.1966 |
|
|
|
|
Com. Reg. No.: |
005469 |
|
|
|
|
CIN No.: [Company Identification
No.] |
L32201TN1966GOI005469 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHEM00055G |
|
|
|
|
Legal Form : |
Public Limited Liability Company. The company’s shares are listed on the
Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturers of customized fertilizers and mixture
fertilizers. |
RATING & COMMENTS
|
MIRA’s Rating : |
Ca (11) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Status : |
Poor |
|
|
|
|
Payment Behaviour : |
Slow |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an old and established company but seems to be passing
through difficult times at present. The company has declared as a sick
company under the provision of Sick Industrial Companies (Special Provision) Act,
1985. Payments are reported to be slow. Initially, the company can be considered for business dealings on a
secured trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office / Factory: |
Manali, Chennai-600068, |
|
Tel. No.: |
91-44-25941001 |
|
Fax No.: |
91-44-25941010 |
|
E-Mail : |
DIRECTORS
As on 31.03.2010
|
Name : |
Mr. M Sagar Mathews (from February 17, 2010 - holding
additional charge) |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. S Muralidharan (up to February 16, 2010) |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Dr V Rajagopalan IAS (from May 3, 2010) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sudhir Bhargava, IAS (up to May 3, 2010) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Satish Chandra, IAS |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Mansoor Rad |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Mohammed Hassan Ghodsi (from April 25, 2009) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Hashem Pouransari (from April 25, 2009) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P N Swaminathan (from June 27, 2009) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. M Sagar Mathews (from August 24, 2009) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. M Sagar Mathews |
|
Designation : |
Director – Technical (from August 24, 2009) |
|
|
|
|
Name : |
Mr. K Lakshminarayana Rao |
|
Designation : |
Executive Director - Finance |
KEY EXECUTIVES
|
Board Sub Committee
/ Management Committee |
|
|
Name : |
Mr. M Sagar Mathews (from February 17, 2010) Mr. S Muralidharan (up to February 16, 2010) Dr. V Rajagopalan, IAS (from May 3, 2010) Mr. Sudhir Bhargava, IAS (up to May 3, 2010) Mr. Satish Chandra, IAS Mr. Hashem Pouransari (from April 25, 2009) |
|
|
|
|
Audit Committee: |
|
|
Name : |
Dr V Rajagopalan, IAS (from May 3, 2010) Mr. Sudhir Bhargava, IAS (up to May 3, 2010) Mr. Satish Chandra, IAS Mr. Mansoor Rad Mr. Hashem Pouransari (from April 25, 2009) Mr. P N Swaminathan (from June 27, 2009) |
|
|
|
|
Name : |
Mr. Ajoy Kumar, IAS |
|
Designation : |
Chief Vigilance Officer |
|
|
|
|
Name : |
Mr. R Lawrence |
|
Designation : |
General Manager (HR and M&D) |
|
|
|
|
Name : |
Mr. P R Kosalaram |
|
Designation : |
General Manager – Plant (Acting) |
|
|
|
|
Name : |
Mr. G Alagarsamy |
|
Designation : |
Company Secretary (Acting ) |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers of customized fertilizers and mixture
fertilizers. |
||||||
|
|
|
||||||
|
Products : |
|
PRODUCTION STATUS (AS ON 31.03.2010)
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Ammonia |
MT |
346500 |
258150 |
|
Urea |
MT |
486750 |
436100 |
|
NPK |
MT |
840000 |
-- |
|
Bio fertilizers |
MT |
400 |
437 |
GENERAL INFORMATION
|
Bankers : |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking Relations
: |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
S Venkatram and Company Chartered Accountant |
|
Address : |
“ Sri Vigneshwara”, 2nd Floor, 218, |
CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
175000000 |
Equity Shares |
Rs.10/- each |
Rs.1750.000 Millions |
|
190000000 |
Preferences Shares |
Rs. 10/- each |
Rs.1900.000 Millions |
|
|
Total |
|
Rs.3650.000
Millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
165998200 |
Equity Shares |
Rs.10/- each |
Rs.1660.000
Millions |
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
161101300 |
Equity Shares |
Rs.10/- each |
Rs.1611.000
Millions |
|
|
Shares Forfeited |
|
Rs.10.400
Millions |
|
|
Total |
|
Rs.1621.400 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1621.400 |
1621.400 |
1621.400 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
123.900 |
123.900 |
123.900 |
|
|
4] (Accumulated Losses) |
(7870.500) |
(7939.300) |
(6485.500) |
|
|
NETWORTH |
(6125.200) |
(6194.000) |
(4740.200) |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3665.700 |
4343.600 |
3784.600 |
|
|
2] Unsecured Loans |
5426.200 |
4222.500 |
4126.600 |
|
|
TOTAL BORROWING |
9091.900 |
8566.100 |
7911.200 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
2966.700 |
2372.100 |
3171.000 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
2889.500 |
3289.400 |
3702.100 |
|
|
Capital work-in-progress |
21.300 |
13.800 |
11.800 |
|
|
|
|
|
|
|
|
INVESTMENT |
4.000 |
4.000 |
4.000 |
|
|
DISMANTLED ASSETS |
0.200 |
1.900 |
1.800 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1609.600
|
1253.600 |
1411.300 |
|
|
Sundry Debtors |
14.000
|
22.000 |
26.200 |
|
|
Cash & Bank Balances |
483.300
|
99.500 |
129.400 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
1583.800
|
1330.400 |
1616.700 |
|
Total
Current Assets |
3690.700
|
2705.500 |
3183.600 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
2647.000
|
2766.500 |
2943.100 |
|
|
Other Current Liabilities |
879.000
|
761.200 |
719.800 |
|
|
Provisions |
113.000
|
126.900 |
100.000 |
|
Total
Current Liabilities |
3639.000
|
3654.600 |
3762.900 |
|
|
Net Current Assets |
51.700
|
(949.100) |
(579.300) |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
12.100 |
30.600 |
|
|
|
|
|
|
|
|
TOTAL |
2966.700 |
2372.100 |
3171.000 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
2106.600 |
1981.000 |
2771.200 |
|
|
|
Subsidy |
10921.800 |
9254.900 |
8629.400 |
|
|
|
Other Income |
61.800 |
39.600 |
86.300 |
|
|
|
TOTAL (A) |
13090.200 |
11275.500 |
11486.900 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Materials Consumed |
6803.600 |
6190.100 |
6836.400 |
|
|
|
Power, Water and Fuel |
3778.900 |
3681.400 |
3526.100 |
|
|
|
Stores, Spares and Packing Materials |
215.100 |
215.900 |
216.700 |
|
|
|
Repairs and Maintenance |
195.700 |
220.300 |
158.400 |
|
|
|
Transportation and Warehousing |
237.800 |
235.400 |
270.200 |
|
|
|
Salaries and other benefits to employees |
437.300 |
447.500 |
388.400 |
|
|
|
Potash |
72.000 |
0.000 |
53.700 |
|
|
|
NPK Mixture |
0.000 |
0.000 |
85.100 |
|
|
|
Urea |
0.000 |
0.000 |
25.800 |
|
|
|
Agrochemicals |
9.900 |
9.900 |
8.700 |
|
|
|
Volume/Special Rebate |
3.400 |
3.600 |
3.700 |
|
|
|
Other Expenses |
188.300 |
128.500 |
177.000 |
|
|
|
Deferred Revenue Expenses Written Off |
12.100 |
25.700 |
40.300 |
|
|
|
Arrears |
68.000 |
0.000 |
0.000 |
|
|
|
Cost of Sales |
(309.000) |
227.900 |
(193.700) |
|
|
|
Provision for Bad and Doubtful Debts |
8.900 |
0.400 |
2.300 |
|
|
|
Provision for Bad and Doubtful Debts - Written back |
(0.400) |
(0.200) |
(0.100) |
|
|
|
Prior Period Adjustments (Net) |
5.500 |
0.400 |
15.800 |
|
|
|
TOTAL (B) |
11727.100 |
11386.800 |
11614.800 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1363.100 |
(111.300) |
(127.900) |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
884.500 |
924.500 |
791.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
478.600 |
(1035.800) |
(918.900) |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
409.800 |
416.300 |
428.400 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
68.800 |
(1452.100) |
(1347.300) |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
0.000 |
1.700 |
1.200 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
68.800 |
(1453.800) |
(1348.500) |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
(7939.300) |
(6485.500) |
(5137.000) |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
(7870.500) |
(7939.300) |
(6485.500s) |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Components and Spares Parts |
86.098 |
64.781 |
NA |
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
0.43 |
(9.02) |
(8.37) |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
3537.400 |
2515.400 |
4372.800 |
|
Total Expenditure |
3244.100 |
2605.300 |
3636.600 |
|
PBIDT (Excl OI) |
293.300 |
(89.900) |
736.200 |
|
Other Income |
14.000 |
11.400 |
34.700 |
|
Operating Profit |
307.300 |
(78.500) |
770.900 |
|
Interest |
188.900 |
133.400 |
151.500 |
|
PBDT |
118.400 |
(211.900) |
619.400 |
|
Depreciation |
109.000 |
112.700 |
112.700 |
|
Profit Before Tax |
9.400 |
(324.600) |
506.700 |
|
Tax |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
9.400 |
(324.600) |
506.700 |
|
Extraordinary Items |
0.000 |
0.000 |
475.100 |
|
Net Profit |
9.400 |
(324.600) |
981.800 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
0.53
|
(12.89) |
(11.74) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
3.27
|
(73.30) |
(48.62) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
1.05
|
24.22 |
19.57 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.01)
|
0.23 |
0.28 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
(2.07)
|
(1.97) |
2.46 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.00
|
0.74 |
0.85 |
LOCAL AGENCY FURTHER INFORMATION
FINANCIAL RESULTS
The Company’s operations for the year ended with a profit of Rs.68.800
Millions against loss of Rs.1453.800 Millions in the previous year mainly on
account of implementation of New Pricing Scheme (NPS)-Stage III amendment by
GOI restricting the reduction in fixed cost to 10% for 2009-10. The total
accumulated loss as of 31.3.2010 is Rs.7870.500 Millions.
REFERENCE TO BIFR
Consequent on total erosion of net worth, the BIFR has registered the Company
as Case No. 501/2007. It has declared MFL as a Sick Company under the provision
of Sick Industrial Companies (Special Provisions) Act, 1985
(SICA) in its meeting held on 2.4.2009 and appointed State Bank of India
(SBI), Commercial Branch, 232 N.S.C Bose Road, Chennai 600 001 as Operating
Agency (OA) to prepare a Draft Rehabilitation Scheme (DRS) for the Company.
BIFR held hearings on 15.10.2009, 12.1.2010 and 22.3.2010. GOI Nominee
Directors attended the meeting held on 22.3.2010 and expressed the view that
DOF is keen on revival of the Company. On the advice of DOF, M/s Project and
Development India Limited (PDIL) was appointed to undertake a study on
rehabilitation proposal for the Company. Accordingly, PDIL submitted its report
on Viability Proposal on MFL and the same was forwarded to DOF after obtaining
approval from Board. The proposal is under active consideration of GOI for
revival of the Company. However, BIFR advised the Company to submit its
Viability Proposal at the earliest.
CAUSES FOR ACCUMULATED
LOSSES
The main reasons for the recurring losses from 2003-04 and the sickness
of the Company are due to cost over run during the revamp of Ammonia and Urea
Plants, delay in stabilization of revamped Plants due to technology related
problems, high energy consumption and changes in the Pricing Policies of DOF.
Introduction of NPS of Urea from 1.4.2003 had a deleterious effect on the
Company as there was an inherent under recovery of about Rs 1995 / MT under New
Pricing Scheme (NPS) Stage I and II which has increased to Rs 3991/MT during
Stage – III (w.e.f. 1.10.2006) due to withdrawal of outlier benefit. Based on
Deloitte Report, the DOF has restricted the reduction in fixed cost in respect
of Urea to 10% for 2009-10. Also, the Price Concession Scheme (PCS) for complex
fertilizers applicable from 1.4.2002 did not adequately compensate the Company
for cost of ‘N’ in its flagship product NPK 17-17-17. The Company does not have
adequate funds to procure raw materials for production of complex fertilizers.
NPK capacity utilization has drastically fallen from 51% in 2003- 04 to 40% in
2004-05 to 4% in 2007-08 and “Nil” in 2008-09. However, the Company has started
manufacture of NPKS 20-20-0-13 for Indian Potash Limited on tolling basis from
March 2010 and produced 7,335 MT during the month.
GOING CONCERN
CONCEPT
As future operations do not suggest there would be reduction of debts,
increase in flow of revenue and improvement in net worth, the Statutory
Auditors have qualified that the Company should not have compiled the accounts
on Going Concern basis in their Audit Report for 2009-10. Whereas the Company
accounts for the year 2009-10 was audited by C and AG of India and have cleared
the Accounts with ‘NIL’ comments for the fifth consecutive year.
REVISED PROPOSAL
FOR RESTRUCTURING
As per the directives of Department of Fertilizers (DOF), PDIL was
engaged in July’ 09 to undertake a project study of the Company and prepare
Viability study report for making the operations sustainable.
The report submitted by PDIL suggesting short term measures, long term
measures and financial restructuring
are given below:
- Conversion of
GOI loan portion of Rs 2938.000 Millions as on 31.3.2009 to equity.
- Continuation
of special dispensation in pricing mechanism under New Pricing Scheme
Stage III (NPS III) beyond 31.3.2010 and up to the conversion of Natural
Gas.
- Cash
induction of Rs 3465.400 Millions by amendment in NPS III from 1.10.2006
to 31.3.2009.
- Waiver of GOI
loan interest amounting to Rs 1230.900 Millions as on 31.3.2009 along with
penal interest.
- Release of Rs
3768.400 Millions through Plan Loan for implementation of the Capital
Schemes from 2009-10 to 2013-14.
- Initiate
proposal for purchase of NICO shares by GOI.
Based on the report of PDIL, DOF is in the process of finalizing the
revised restructuring proposal for submission to BRPSE and BIFR to bail out the
Company from sickness.
ONE TIME
SETTLEMENT (OTS) WITH FINANCIAL INSTITUTION
The Company entered into One Time Settlement (OTS) with IFCI Limited for
Rs.440.600 Millions as against Rs.915.700 Millions of Principal and Interest as
of March 31, 2010. Company made an upfront payment of Rs.200.000 Millions on
31.03.2010 and balance Rs.240.600 Millions will be paid in monthly installments
commencing July to December 2010. The Company gained Rs.475.100 Millions
through the OTS.
PLANT PERFORMANCE
Urea production exceeded the day’s installed capacity of 1475 MT on 207
days and 436100 MT of Urea produced during the year is the 4th best since
revamp. Also, Urea production of 49261 MT during Dec 2009 is the 3rd best
record.
Specific Energy consumption of 7.834 Gcal/MT of Urea is the 3rd lowest
since revamp. Ammonia energy of 9.5372 Gcal/MT and Urea energy of 6.9452
Gcal/MT on December 30, 2009 are the lowest ever since revamp. Specific Energy consumption of 9.581 Gcal/MT
of Ammonia during Dec 2009 is the lowest since inception surpassing the
previous record of 9.715 Gcal/MT in December 2004.
Specific Energy consumption of 6.974 Gcal/MT of Urea in Dec 2009 is the
lowest since inception surpassing the earlier record of 7.199 Gcal/MT in August
2008 and below the derived design energy of 7.004 Gcal/MT of Urea for a full
month.
NPK ‘A’ train was restarted after 3 years and production of NPKS complex
20-20-0-13 commenced on March 8, 2010 for M/s Indian Potash Limited on tolling
basis. During March 2010, 7335 MT of complex fertilizer was produced.
GAS CONVERSION
MFL Ammonia Plant with minor modifications is compatible to use Natural
Gas and the Feedstock conversion can be completed in about 12 months time. The
requirement of CNG will be 1.54 MMSCMD (Cal. Value 8600 Kcal/SM3) and the
requirement may go up to 2.5 MMSCMD. MFL’s requirement of 1.54 MMSCMD of
Natural Gas has been forwarded by Department of Fertilizers to Ministry of
Petroleum and Natural Gas for
allocation. M/s Gas Authority of India Limited (GAIL) has come up with an offer
to supply RLNG to the Company at Market Driven Prices, by laying a dedicated
branch line (250 km long) from Krishnagiri to Chennai on its
MARKETING
PERFORMANCE
Agricultural situation was extremely favourable during the year also in
view of the widespread rains received throughout our marketing territories. The
demand for products were continued to be high and products were sold
in good quantities. During the year, Company sold a total of 4.41 lakh
MT of fertilizers compared to 4.15 lakh MT last year. There was an increase of
6% in sale of fertilizers over the last year. During this year, 4.34 lakh MT of
Urea was made available for sale as against 4.15 lakh MT during last year,
which is 5% increase over CPLY sales, whereas market share of Urea is
maintained at 8% in
Company continued to embark upon various policies for reduction of
marketing costs. Efforts for streamlining logistics operations continued this year
also and 99% of the products were directly delivered to the dealers whereas it
was only 96% during the CPLY. Rationalisation of territories and regions and manpower reduction was another
area of cost saving. There has been a manpower reduction of 4%. Marketing Team
put up a creditable performance in sales realization by making 98% cash sales.
95% of the cheques realized within 7 days. Further, it goes to their credit
that there has not been a single bad debt during this year also.
AGROCHEMICALS,
BIO-FERTILIZERS AND CARBON-DI-OXIDE
Company continued to market environment friendly neem based
Agrochemicals. A total of Rs.14.200 Millions
of Agrochemicals were traded during the year 2009-10 as against the CPLY
of Rs.13.400 Millions . MFL sold 435 MT of Bio-fertilizers during 2009-10 as
against 463 MT in the previous year. Company has sold Carbon-di-oxide valuing
Rs.33.000 Millions during the year
2009-10 against Rs.23.700 Millions
during the last year.
MANAGEMENT
DISCUSSIONS AND ANALYSIS
Business
Madras Fertilizers Limited (MFL) incorporated in the year 1966 is a PSU
under the administrative control of the Department of Fertilizers (DOF),
Ministry of Chemicals and Fertilizers, Government of India. MFL is engaged in
the manufacture of Ammonia, Urea and Complex Fertilizers (N:P and N:P:K) at Manali, Chennai. MFL is also
engaged in manufacturing Biofertilizers and marketing Fertilizers,
Bio-fertilizers and eco friendly Agro Chemicals under the brand name “ VIJAY “.
Introduction
Ensuring food security for the growing population is our prime duty. The
sudden increase in the food price is due to production loss owing to poor
agricultural situation in some states invites the attention on the development
of Agriculture both intensively and extensively. For increasing the
productivity and upliftment of farming community, fertilizers have been
considered as an essential input in Indian Agriculture. The continuous and
concentrated efforts for self sufficiency and self reliance maximize the
production of food grains, pulses, vegetables, fruits and other commercial
crops.
Fertilizer Sector
Out of the 16 plant nutrients, Nitrogen, Phosphorous and Potash (NPK)
are the major three nutrients that contribute more on the productivity. The
governments aimed at achieving the maximum self sufficiency in the production
of Nitrogenous Fertilizers. In the case of Phosphatic fertilizers, there has
been a constraint in attainment of self-sufficiency in the Country due to
paucity of domestic raw materials. Regarding Potassic fertilizers, the entire
demand for direct application as well as for production of Complex fertilizers
are met only through imports. Conversion of Naphtha based Urea units to gas
based will bring down the production cost of indigenous urea resulting in reducing
the burden of subsidy to some extent. Government of
Demand
The quick response and price factor of urea make the farmers to use urea
extensively (more than the recommended/required level) resulting in heavy
subsidy burden to Government and also attract pest attack on the crops. Care to
be taken while forecasting NPK demand to overcome this problem. Apart from
this, the farmers are also to be educated through suitable awareness programs
for the effective and efficient use of plant nutrients as inadequate and
imbalanced fertilizer use is one of the main reasons for declining crop
response to the fertilizer. In order to improve the soil fertility and sustain
the crop productivity, GOI introduced Nutrient Based Subsidy (NBS) Policy w.e.f
01.04.2010 for various grades of complex fertilizers. Apart from complex
fertilizers, the fertilizers with secondary and micro nutrients (except ‘S’) as
provided under FCO, will also be eligible for subsidy. The demand is based on
current consumption pattern which may change in the next five years depending
upon the cropping pattern and area under each crop.
FEEDSTOCK SCENARIO
At present, natural gas based Plants account for more than 66% of Urea
capacity, Naphtha is used for less than 30% Urea production and the balance
capacity is based on fuel oil and LSHS as feedstock. Natural gas has been the
preferred feedstock for the manufacture of Urea over other feedstock viz.,
Naphtha and FO/LSHS, firstly, because it is clean and efficient source of
energy and secondly, it is considerably cheaper and more cost effective in
terms of manufacturing cost of Urea which also has a direct impact on the
quantum of subsidy on Urea. Whereas MFL is constrained to use only Naphtha as
feedstock due to nonavailability of Natural Gas as of now.
The cost of feedstock constitutes about 60 to 75% of the total cost of production
of Urea. In respect of gas based units, the feedstock accounts for 60% of cost
of production, whereas for Naphtha based and FO/LSHS based units, it accounts
for about 75% of the cost of production. MFL has carried out the feasibility
study for feed stock conversion from Naphtha to Natural gas by the Ammonia
Plant Process licensor M/s HTAS,
PRICING POLICY FOR
UREA
A New Pricing Scheme (NPS) for Urea units replacing the RPS was
formulated and notified 30.01.2003 which took effect from 01.04.03 and
implemented in Stages. Stage I was implemented from 01.04.2003 to 31.03.2004.
Stage II was implemented from 01.04.2004 to 30.09.2006. NPS III was given
effect from 01.10.2006 to 31.03.2010. The formulation of a Pricing Policy for
Stage IV of New Pricing Scheme for Urea units commencing from 01.04.2010 is
under consideration of the Government and it may take some more time before the
policy for Stage IV of NPS is communicated. The provisions of the NPS Stage III
policy dated 08.03.07 including conversion of Naphtha, FO/LSHS based units to gas,
the payment of subsidy to Urea units with effect from 01.04.2010 at the present
rate of concession based up on the Stage III of NPS has been extended till
further orders on provisional basis. After a long gap, effective April 1, 2010,
Government increased the sale price of Urea, Zincated Urea and Anhydrous
Ammonia. The Government fixed the price of Urea (46% N) as Rs. 5,310/MT,
Zincated Urea as Rs.5,852/MT and Anhydrous Ammonia as Rs. 8,480/MT.
NUTRIENT BASED
SUBSIDY (NBS) POLICY FOR PHOSPHATIC AND POTASSIC FERTILIZERS
The Government of India introduced the first phase of the Nutrient Based
Subsidy with effect from 01.04.2010. This scheme is applicable for DAP, MOP,
MAP, TSP and other twelve grades of Complex fertilizers and also the
fertilizers containing Sulphur ‘S’ is eligible for this scheme which will
encourage the application of Sulphur along with primary nutrients (N, P
and K). An Inter Ministerial Committee
(IMC) will recommend a per tonne additional subsidy on fortified subsidized
fertilizers carrying secondary (other than S) and micro-nutrients. The
committee will also recommend inclusion of new fertilizers under subsidy regime
based on the application of manufacturers / importers and its need appraisal by
ICAR, for decision by the Government. 20% of the price decontrolled fertilizers
produced / imported in
Manufacturers of customized fertilizers and mixture fertilizers will be
eligible to source subsidized fertilizers from manufacturers / importers. There
would be no separate subsidy on sale of customized fertilizers and mixture
fertilizers. The NBS is permitting the companies to use the subsidized
fertilizers for manufacturing of various grades of fertilizers.
Contingent
Liabilities:
|
Particular |
As
on 31.03.2010 (Rs.
in Millions) |
As
on 31.03.2009 (Rs.
in Millions) |
|
Contingent Liabilities in respect of claims against the
Company not acknowledged as debts in respect of Income Tax, Excise Duty, Sales
Tax and others (Includes Customs duty on Imported Urea Rs 658.600 Millions ,
Penal Interest on GOI Loans Rs 547.900 Millions , and interest on delayed
payment of Excise Duty Rs 54.200 Millions ). |
1354.222 |
1119.752 |
|
L/Cs outstanding (not provided for) |
23.817 |
46.852 |
|
Estimated amount of contracts remaining to be executed on
Capital Account and not provided for (after adjusting advance made therefor) |
30.714 |
31.303 |
|
ESI Liability not provided for the period Oct. 1999 to
Sep. 2000 based on Court’s interim injunction and interest for the earlier
period. |
4.254 |
4.254 |
|
Total |
1413.007 |
1202.161 |
UNAUDITED FINANCIAL
RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2010
Rs. in millions
|
Particular |
3 Months Ended |
Year to date figures for current period ended |
|
|
31.12.2010 |
31.12.2010 |
|
|
|
|
|
(a)
Net Sales / Income from operations |
4372.800 |
10425.600 |
|
(b)
Other Operating Income |
0.000 |
0.000 |
|
Expenditure |
|
|
|
a)
(Increase) / Decrease in stock in trade and work in progress |
(375.600) |
(493.100) |
|
b)
Consumption of raw materials |
2429.900 |
5650.400 |
|
c) Purchase
of traded goods |
4.500 |
9.000 |
|
d)
Employees cost |
129.200 |
461.300 |
|
e)
Power, Water and Fuel |
1132.800 |
3063.800 |
|
f)
Depreciation |
112.700 |
334.400 |
|
g)Other
expenditure |
315.800 |
794.600 |
|
Total |
3749.300 |
9820.400 |
|
Profit
from operations before other income, interest and exceptional Items |
623.500 |
605.200 |
|
Other
income |
34.700 |
60.100 |
|
Profit
before interest and exceptional Items |
658.200 |
665.300 |
|
Interest |
151.500 |
473.800 |
|
Profit after Interest but before
Exceptional Items |
506.700 |
191.500 |
|
Exceptional
Items |
-- |
-- |
|
Profit (+)/Loss(-) from
Ordinary Activities before tax |
506.700 |
191.500 |
|
Tax
expense |
-- |
-- |
|
Net Profit (+)/Loss(-) from
Ordinary Activities after tax |
506.700 |
191.500 |
|
Extraordinary items |
475.100 |
475.100 |
|
Net
Profit (+) / Loss (-) for the year period |
981.800 |
666.600 |
|
Paid
up equity share capital (Face value of Rs.10/- per share) |
1611.000 |
1611.000 |
|
Reserves
excluding revaluation reserves as per balance sheet of previous accounting
year |
123.900 |
123.900 |
|
Earning
per share (EPS) |
|
|
|
(a) Basic and diluted
EPS before Extraordinary items for the period, for the year
to date and for the previous year (not to be
annualised) |
3.15 |
1.19 |
|
(a) Basic and diluted EPS
before Extraordinary items for the period, for the year
to date and for the previous year (not to be
annualised) |
6.09 |
4.14 |
|
Public
shareholding |
|
|
|
Number of shares |
23733100 |
23733100 |
|
Percentage of shareholding |
14.73 |
14.73 |
|
|
|
|
|
Promoters
and Promoters group Shareholding- |
|
|
|
a)
Pledged /Encumbered |
|
|
|
Number
of shares |
Nil |
Nil |
|
Percentage
of shares (as a % of total shareholding of the promoter and promoter group) |
Nil |
Nil |
|
Percentage
of shares (as a % of total share capital of the company) |
Nil |
Nil |
|
|
|
|
|
b)
Non Encumbered |
|
|
|
Number
of shares |
137368200 |
137368200 |
|
Percentage
of shares (as a % of total shareholding of the promoter and promoter group) |
100.00 |
100.00 |
|
Percentage
of shares (as a % of total share capital of the company) |
85.27 |
85.27 |
Note:
1 Urea Plant was Shutdown for 2 days due to
TNEB power failure and Exchanger leak during the quarter. Ammonia and Urea
Plants were shutdown for 36 days and 50 days respectively during the period on
account of Statutory inspection of Boilers, Annual HP CO2 compressor
maintenance, TNEB power failure etc.
2 The Company produced 22275 MT and 35670 MT
NPKS 20-20-0-13 during the quarter and during the period respectively on
tolling basis with Indian Potash Limited.
3 The Company completed payment under One Time
Settlement (OTS) with IFCI Limited . and the benefit amounting to 47.51 Cr on
of OTS is accounted as Extra Ordinary item during the quarter on full
settlement.
4 The Company has entered into an One Time
Settlement (OTS) with Stressed Assets Stabilisation Fund (SASF)-a unit of IDBI,
LIC and Industrial Investment Bank of India Limited (IIBI) during the year for
58.00 Cr, 2,21 Cr and 2.04 Cr as against their total dues of 134.33 Cr, 2.66 Cr
and 2.44 Cr respectively. The benefit on account of OTS will be accounted on
full settlement.
5 Fertilizer manufacture is the only main
business segment and trading operations are less than 10% of the total revenue.
Further, the Company is engaged in providing and selling its products in single
economic environment in
6 In view of the carry forward losses and
allowances available for set off, provision for current tax is not considered
necessary. Also, as prudent policy no deferred tax asset has been recognized
per AS 22 (Accounting for Taxes on Income).
7 Details of Investors complaints and services
during the quarter: Pending at the beginning of the Quarter: Nil, Received: 10,
Disposed Off: 10 and Pending at the end of the Quarter: Nil.
8 Audit observations on the Accounts for
2009-10 and Management clarification thereon stand.
9 The unaudited results have been subjected to
Limited Review by Statutory
10 The above results have been reviewed and
recommended by the Audit Committee and approved by the Board of Directors at
their meeting held on January 25, 2011.
AS PER WEBSITE DETAILS:
SERVICES
Service to Farmers
"Remember always the half starved and sunburnt farmer, toiling on
his little piece of land in the scorching heat to earn an honest living-all you
do, do for his good". MFL has rightly realised this and is extending all
support to the farmers. MFL always strives to serve him. It enables him to
increase the productivity from his land and contribute to the Nation's
production. Since its inception, MFL has been organising various Rural
Development and Farmer Education Programs. The Integrated Rural Development Programs/Area
Development Programs organised by MFL are aimed at educating farmers in the
latest agricultural technique and Key management practices through various
field level programs like Soil Testing Service, Method Demonstrations, Field
Visits, Group Meetings, Field Days, Farmers visit to Research Stations etc.
Compact Block Demonstrations are laid out to demonstrate the
effectiveness and profitability of adopting the key management practices as per
the recommendations of respective State Agricultural Departments. In additional
agricultural development in such projects, MFL also extends its assistance in
organising allied agricultural activities like sheep, poultry, dairy farming,
gobar gas plants, smokeless chulahs etc. and also social welfare activities
like providing drinking water facility, arranging veterinary camps for farm
cattle, human health campaigns, etc. By these programs, MFL aims at improving
the overall socio economic status of farmers, besides all round agricultural
development. MFL also takes special efforts to involve SC/ST farmers in all
these programs. Tribal Development Programs organised exclusively for tribal
farmers on the above lines also need special mention.
Conducting business with social responsibility presupposes contributions
to the community development. Based on
this objective, MFL has taken keen interest in fulfilling the needs of the
community in Manali area. MFL’s
contribution to the community include
Rs.7.500 Millions for the construction of an overbridge across the
railway line in the link road to Manali and a modern community centre at
Manali. MFL has also constructed class
rooms for about 400 school children in
the
OTHER SOCIAL
COMMUNITY SERVICES BY THE COMPANY
- Providing
vocational training to Diploma in Commercial Practice /
Graduate Engineer Apprentices / Trade Apprentices (ITI). There are 25
Diploma Commercial Practice Trainees, 50 Graduate Engineers Apprentices
and 70 Trade Apprentices.
- Renovated and
Repaired 70 noon meal centers in
Kancheepuram District.
- Deputed one
Sr Officer for National Literacy Campaign for 2 years
Housing Complex for CISF Personnel
MFL constructed a self-contained housing complex for 95 families of the
Central Industrial Security Force (CISF) in an area of 3.3 acres at Manali New
town, 4 km from the MFL Plant. This complex is unique in
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 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.45.15 |
|
|
1 |
Rs.72.59 |
|
Euro |
1 |
Rs.62.95 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
2 |
|
OPERATING SCALE |
1~10 |
2 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
2 |
|
--PROFITABILIRY |
1~10 |
- |
|
--LIQUIDITY |
1~10 |
- |
|
--LEVERAGE |
1~10 |
- |
|
--RESERVES |
1~10 |
2 |
|
--CREDIT LINES |
1~10 |
- |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
11 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.