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MIRA INFORM REPORT
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Report No. : |
516128 |
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Report Date : |
25.06.2018 |
IDENTIFICATION DETAILS
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Name : |
KRISHI SAMAGRI COMPANY LIMITED |
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Registered Office : |
GPO Box : 195 Kuleshwor, Kathmandu |
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Country : |
Nepal |
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Date of Incorporation : |
25.01.2002 |
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Com. Reg. No.: |
105721 |
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Legal Form : |
Public Limited Company |
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Line of Business : |
Procure and distribute high quality and improved agricultural inputs (fertilizers, seeds, agro-chemicals and implements) |
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No. of Employees : |
Not Available |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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
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Country Name |
Previous Rating (31.12.2017) |
Current Rating (01.04.2018) |
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Nepal |
B1 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
NEPAL - ECONOMIC OVERVIEW
Nepal is among the least developed countries in the world, with about one-quarter of its population living below the poverty line. Nepal is heavily dependent on remittances, which amount to as much as 30% of GDP. Agriculture is the mainstay of the economy, providing a livelihood for almost two-thirds of the population but accounting for less than a third of GDP. Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain.
Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of commercially feasible capacity. Nepal has signed trade and investment agreements with India, China, and other countries, but political uncertainty and a difficult business climate have hampered foreign investment. The United States and Nepal signed a $500 million Millennium Challenge Corporation Compact in September 2017 which will expand Nepal’s electricity infrastructure and help maintain transportation infrastructure.
Massive earthquakes struck Nepal in early 2015, which damaged or destroyed infrastructure and homes and set back economic development. Although political gridlock and lack of capacity have hindered post-earthquake recovery, government-led reconstruction efforts have progressively picked up speed, although many hard hit areas still have seen little assistance. Additional challenges to Nepal's growth include its landlocked geographic location, inconsistent electricity supply, and underdeveloped transportation infrastructure.
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Source
: CIA |
Company
name and summery
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Name : |
KRISHI SAMAGRI COMPANY LIMITED |
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Address : |
GPO Box : 195 Kuleshwor, Kathmandu, Nepal |
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Phone No: |
4279715, 4279716, 4279717, 4279719, 4279361, 4279362,
4279363 |
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Fax No.: |
00977-1-4278790 |
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E-mail: |
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Website : |
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Com. Reg. No.: |
105721 |
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Date of Establishment : |
25.01.2002 |
Company
history
Nepal is an agricultural country.
Agriculture is the most important sector in terms of income and employment
generation Agricultural sector accounts for about 32 percent of national GDP.
About 75 percent of total population derive it’s livelihood from agriculture
and unallied activities. Agriculture Inputs Corporation (AIC) was established
in 1965 as a public sector enterprise to procure and distribute high quality
and improved agricultural inputs (fertilizers, seeds, agro-chemicals and
implements) at a reasonable price across the country.
Initially, AIC was named Agriculture Supply
Corporation (ASC) before it was merged with the Food Management Committee under
the new outfit, Agriculture Marketing Corporation (AMC). AMC dealt with both
agricultural inputs and food grains for about two years. In 1974 the government
decided to split AMC into AIC for the management of agricultural inputs and
Nepal Food Corporation for the marketing of agricultural produce.
On May 8, 2002 government converted AIC into
Agriculture Inputs Company Ltd. (AICL) and National Seed Company Ltd. under
Company Act 1997 as a state owned enterprises. AICL has been assigned by the
government to procure and distribute fertilizers across the country. As Nepal
does not have indigenous production of mineral fertilizers, demand for
fertilizers is met through importation. The government has retained hundred
percent equity of AICL and intends to divest it to the private and cooperative
sector in the near future.
In a major policy decision to boost agricultural
production and to ensure smooth supply of mineral fertilizers, the Government
of Nepal has decided to reintroduce subsidy on mineral and organic fertilizers
on March 25, 2009. AICL has been entrusted with the procurement and
distribution of subsidized fertilizers across the country.
Fertilizer Policy
Until 1972, cost plus basis of fertilizers policy was adopted owing higher
price in the hills than in the terai plains. The retail price of hills was made
higher in proportion to the actual transportation cost incurred. Following the
oil crisis of 1972 and rise in the international price of fertilizers the
government fixed the maximum retail price across the country and introduced
subsidy regime.
In 1997, the government announced policy reforms in
the fertilizer sector eliminating subsidy on non-urea fertilizers and phase
wise withdrawal on urea. Likewise, the government established Fertilizer Unit
under Ministry of Agriculture and Cooperatives to facilitate favorable policy
and institutional environment for the participation of public and private
sector.
Deregulation policy largely failed to bring
desirable impact on improving supply situation and quality control of
fertilizer. External factors such as rise in price in international market,
heavy subsidy enjoyed by the farmers across the porous border and inflow of
illegally traded fertilizers aggravated the situation. The government finally
decided to provide subsidy on mineral fertilizers on March 25, 2009.
Silent features of current fertilizer Policy:
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AICL will be the sole agency to import fertilizers
under subsidy scheme. |
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Provision of a high level “Subsidy Allocation
Management Committee” under the chairmanship of Secretary of MOAC. The
committee is mainly responsible for fixing retail price and subsidy
reimbursement to AICL. |
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Subsidized fertilizers will be available for up
to 0.75 ha and 4 ha in the hills and terai respectively for three crops a
year. |
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Fertilizers will be retailed through AICL field
offices and cooperatives. |
Fertilizer Pricing
Under the new fertilizer policy uniform retail price of fertilizers is fixed
for five entry points by the high level Subsidy Management Allocation Committee
chaired by the Secretary at Ministry of Agriculture and Cooperatives. But at
present as fertilizers is being imported through three entry points so the
retail price of three entry points (Biratnagar, Birgunj and Bhairahawa) is
fixed with due consideration of import cost, transportation cost, handling cost
as well as effective retail price in India. Actual transportation cost incurred
from three entry points to other districts will be added to determine the
retail price of fertilizers for all districts except 26 hilly districts
eligible for transport subsidy.
Ministry of Agriculture and Cooperatives advances subsidy amount to Agriculture
Inputs Company Ltd. in three instalments and subsidy account is settled by the
high level committee at the end of the fiscal year.
Fertilizer Distribution
AICL field offices as well cooperatives are involved in the distribution of
fertilizer across the country. AICL administers retailers under dealership
regulation as approved by the Board of Directors. At present 1378 cooperatives
and cooperative shops are retailing fertilizers.
Fertilizer Supply and Distribution Management
Committee headed by Chief District Officer of the respective districts is being
empowered to look after the affairs related to the supply and distribution of
fertilizers at the district level. It is believed that district based committee
acts promptly to ensure free, fair and smooth supply and distribution of
fertilizers.
Government of Nepal has been providing transport subsidy apart from price
subsidy to 26 hilly districts inaccessible by motor able roads. As a result,
fertilizers are available in those 26 hilly districts at par with the price of
corresponding feeder districts point. Transport subsidy is being administered
by concern District Agriculture Development Office of Department of Agriculture
Fertilizer Procurement
AICL is being made responsible to procure
subsidies fertilizer from 2009. Fertilizer is being imported from the
international market through global tender on the basis of CIF Kolkata/Haldia
(India) port or CIF Nepal AICL border warehouses entry points. (I.e.
Biratnagar, Birgunj, Bhairahawa).
AICL invites sealed tenders for
the supply of fertilizer by publishing global tender notice in the reputed
national newspaper. Invitation of global tender is based on seasonal demand.
Normally AICL invites six to eight global tenders in a fiscal year. It takes
four to five months to import fertilizer through global tender. At present AICL
have imported fertilizer from Turkey, Peoples Republic of China, Egypt, and
India.
Beside global tender, AICL is also
importing fertilizer from India on government to government basis on Import
Parity Price (IPP) of India. AICL also procures as directed by the government
fertilizer received on grant/aid by the donor government as buffer stocks and
distribute it.
Objectives
The government of Nepal has re-introduced fertilizer subsidy scheme from 2009
to boost up agricultural production and to ensure food security, and AICL is
fully geared up to fulfill the expectation of the government.
Objectives of AICL as set out in the memorandum of association are as follow:
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Produce, procure and import different types of
mineral fertilizer and distribute it across the country on the basis of local
demand. |
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Import raw materials for the production of
different product mix of fertilizers and distribute and export as well. |
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Maintain buffer stock of fertilizers received
under grant/aid from the government, donor countries and organizations to
control supply interruption. |
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Procure and distribute the subsidized fertilizer
across the country. |
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Conduct other business and service oriented
activities to ensure reasonable profit. |
Board
of directors
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Name |
Designation |
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Toya Nath Thapaliya |
Chairman |
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Yag Prasad Dhungel |
Director |
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Suresh Babu Tiwari |
Director |
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Bhagwat P. Yadav |
Director |
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Ammar Raj Khair |
Managing Director |
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Phone No.: |
01-4249715 (O) |
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Fax. No.: |
01-4278790 |
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Email : |
Spokes
Person and Information Officer
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Name |
Designation |
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Bishnu P. Pokhrel |
Information Officer |
Principal
Officers
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INFORMATION
DENIED
Management
non-cooperative
Tel. No.: 0977-1-427915 / 0977-1-4279717 / 0977-1-4279719
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 67.76 |
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1 |
INR 89.95 |
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Euro |
1 |
INR 78.85 |
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NPR |
1 |
INR 0.63 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Information Gathered
by : |
KAM |
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Analysis Done by
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NIY |
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Report Prepared
by : |
DNS |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
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Company
background and operations size
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Promoters
/ Management background
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Payment
record
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Litigation
against the subject
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Industry
scenario / competitor analysis
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Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.