Abstract

This report has been done with the help of the Prowess Software which compares various financial factors of the Fertiliser companies in India. It also gives an overview of the major players of the industry in India.

Fertilisers
Fertilizers (or fertilisers) are substances that supply plant nutrients or amend soil fertility. They are the most effective (30 -80 per cent increase in yields) means of increasing crop production and of improving the quality of food and fodder. Fertilizers are used in order to supplement nutrient supply in the soil, especially to correct yieldlimiting factors. Fertilizers are applied to promote plant growth; the main nutrients present in fertilizer are nitrogen, phosphorus, and potassium (the 'macronutrients') and other nutrients ('micronutrients') are added in smaller amounts. Fertilizers are usually directly applied to soil, and can also be sprayed on leaves as a foliar feeding. Organic fertilizers and some mined inorganic fertilizers have been used for many centuries, whereas chemically synthesized inorganic fertilizers were only widely developed during the industrial revolution. Increased understanding and use of fertilizers were important parts of the pre-industrial British Agricultural Revolution and the industrial Green Revolution of the 20th century.

Inorganic fertilizer use has also significantly supported global population growth it has been estimated that almost half the people on the Earth are currently fed as a result of artificial nitrogen fertilizer use. Fertilizers typically provide, in varying proportions: The three primary macronutrients: nitrogen (N), phosphorus (P), and potassium (K). The three secondary macronutrients: calcium (Ca), sulfur (S), magnesium (Mg).and the micronutrients (trace minerals): boron (B), chlorine (Cl), manganese (Mn), iron (Fe), zinc (Zn), copper (Cu), molybdenum (Mo) and selenium (Se). The macronutrients are consumed in larger quantities and are present in plant tissue in quantities from 0.2% to 4.0% (on a dry matter weight basis). Micronutrients are consumed in smaller quantities and are present in plant tissue in quantities measured in parts per million (ppm), ranging from 5 to 200 ppm, or less than 0.02% dry weight. The nitrogen-rich fertilizer ammonium nitrate is also used as an oxidizing agent in improvised explosive devices, sometimes called fertilizer bombs, leading to sale regulations.

Fertilizer industry in India

Fertilizer in the agricultural process is an important area of concern. Fertilizer industry in India has succeeded in meeting the demand of all chemical fertilizers in the recent years.The Fertilizer Industry in India started its first manufacturing unit of Single Super Phosphate (SSP) in Ranipet near Chennai with a capacity of 6000 MT a year. India's green revolution in late sixties gave a positive boost to the sector. The sector experienced a faster growth rate and presently India is the third largest fertilizer producer in the world. According to Given Statistics, total capacity of the industry as on 30.01.2003 has reached a level of 121.10 lakh MT of nitrogen (inclusive of an installed capacity of 208.42 lakh MT of urea after reassessment of capacity) and 53.60 lakh MT of phosphatic nutrient.

Presently there are 57 large fertilizers plants in the country producing urea, DAP, Complex fertilizer,Ammonium Sulphate (AS) and Calcium Ammonium Nitrate (CAN). Indian government formulated policies favorable to the fertilizer suppliers, consumers and manufacturers. This was supported by numerous committees and was formulated by the Indian government to determine the policies regarding fertilizers. The increase in the fertilizer industry is approved to favorable policies. Now, there are many fertilizer units and supply a wide range of fertilizers. This is apparent from the steady global demand for Indian fertilizers that is being fulfilled. Recent years is viewing a demand for organic fertilizers besides inorganic fertilizers. Many private fertilizer companies are showing positive gesture by setting plants in various countries and are elevating the demand for chemical and bio fertilizers. The fertilizers industry in India has a good and bright future in the market. The Indian government is offering optimal support by subsidizing raw materials as well as by relaxing the export policies and this is found to be favorable to the fertilizer companies. The manufacture and fertilizers supply is viewed as the most energy process in the Indian industry. The nitrogenous as well as bio fertilizers have great impact on the use of energy and the determining factors for efficiency of energy in the industry are feedstocks, technology, capacity utilization and plant age.

Global demand for Indian fertilizer

Global demand for Indian fertilizer has been on steady rise and so has been its demand for fertilizer imports. India at present holds the fourth position as an exporter of fertilizer in the global market. But its own demand for fertilizer almost equals its exporting capacity. The rapid rate of population growth and the rising demand for food products has increased the demand of fertilizer in India. The primary factor behind the demand of fertilizer in India is the nature of Indian soil. Although the soil for agriculture is rich in silt, it is deficient in nutrients such as potassium, phosphate and nitrogen. To supplement these nutrients, India has to produce and also import fertilizers. Apart from the inorganic fertilizers, the demand for organic fertilizers produced in India has increased in recent years. One of the major players in the field of organic manures and bio-products is M.J. Exports. U.K is a major importer of organic fertilizer from India.

Many countries prefer organic fertilizers because of the lower risks of environmental hazards. The private fertilizer companies in India are now taking their business to foreign shores, setting up plants in other countries. This is a positive gesture towards increasing the global demand for Indian fertilizer and also meeting the same. Soon after Reliance Industries' declaration of building two two-million ton capacity fertilizer units, National Fertilizer Limited has announced its negotiations and talks with International Chemical Group to start joint ventures in Brunei, Qatar and Egypt. Kribhco is planning to set up plants in collaboration with a Tunisian fertilizer company named GCT. The venture will see increased production of phosphoric acid and Muriate of Potash (MOP). The future, thus, looks bright for the Indian fertilizer industry in the global market. The global fertilizer demand as a whole shows a sharp rise in recent years. 2005-2006 registered a 1.5% growth which increased sharply to 5% in 2006-2007. The demand for nitrogen fertilizers is the highest, surpassing the demand for potassium and phosphate fertilizers. If the demand is analyzed on the basis of regions, then North America shows the greatest demand for fertilizer with an annual demand growth of 9.9%, followed by West Asia (8.1%) and South Asia (5.5%)

Some of the public sector companies in Indian fertilizer market.

National Fertilizers Limited Fertilisers and Chemicals Travancore Ltd. Rashtriya Chemicals & Fertilizers Limited Madras Fertilizers Limited Paradeep Phosphates Limited Pyrites, Phosphates & Chemicals Limited Fertilizer Corporation of India Limited Projects & Development India Limited

Some of the Cooperative Sector companies in Indian fertilizer market.

Indian Farmers Fertiliser Cooperative Ltd. Krishak Bharati Cooperative Limited

Some of the Private Sector companies in Indian fertilizer market.

Gujarat State Fertilizer Company Limited Coromondel Fertilisers Limited Shriram Fertilisers & Chemicals Limited Zuari Industries Limited Southern Petrochemicals Inds. Corpn. Ltd Indo-Gulf Fertlizers & Chemicals Corpn. Ltd. Godavari Fertilizers & Chemicals Limited Nagarjuna Fertilizers & Chemicals Limited Chambal Fertilizers & Chemicals Limited Tata Chemicals Limited Oswal Chemicals & Fertilizers Limited

Highlights from audited financial reports(2006) Based on Income

Below table shows the audited financial reports for the year 2006 which is ranked on the basis of income. Top 5 Fertiliser companies on the basis of income generated are Indian Farmers Fertiliser Co-Op. Ltd, Tata Chemicals Ltd., National Fertilizers Ltd., Southern Petrochemicals Inds. Corpn Ltd. And Rashtriya Chemicals & Fertilizers Ltd. Here we will be analyzing the reports of these 5 companies till 2009.

Company Name Indian Farmers Fertiliser Co-Op. Ltd. Tata Chemicals Ltd. National Fertilizers Ltd. Southern Petrochemical Inds. Corpn. Ltd. Rashtriya Chemicals & Fertilizers Ltd.

Annual Annual Annual Rs. Crore Rs. Crore Rs. Crore Dec-06 Dec-06 Dec-06 Income Sales Profit after tax 10028.44 9957.96 341.35 3766.03 3639.58 353.03 3663.25 3626.12 116.4 3393.52 3333.76 -390.83 3212.23 3129.55 147.96

2007

Company Name Indian Farmers Fertiliser Co-Op. Ltd. Tata Chemicals Ltd. National Fertilizers Ltd. Southern Petrochemical Inds. Corpn. Ltd. Rashtriya Chemicals & Fertilizers Ltd. 3662.33

Annual Annual Annual Rs. Crore Rs. Crore Rs. Crore Dec-07 Dec-07 Dec-07 Income Sales Profit after tax 10589.29 10344.66 175.02 4310.5 4124.66 444.21 3916.59 3889.45 176.1 3592.67 148.74

Southern Petrochemicals data for 2007 are not available in prowess software.

2008

Annual Rs. Crore Dec-08 Company Name Income Indian Farmers Fertiliser Co-Op. Ltd. 12525.07 Tata Chemicals Ltd. 4884.95 National Fertilizers Ltd. 4229.32 Southern Petrochemical Inds. Corpn. Ltd. 1593.15 Rashtriya Chemicals & Fertilizers Ltd. 5354.83

Annual Annual Rs. Crore Rs. Crore Dec-08 Dec-08 Sales Profit after tax 12173.39 257.59 4208.57 949.18 4167.15 108.65 1511.78 -566.82 5266.58 158.15

2009

Annual Annual Annual Rs. Crore Rs. Crore Rs. Crore Dec-09 Dec-09 Dec-09 Company Name Income Sales Profit after tax Indian Farmers Fertiliser Co-Op. Ltd. 33475.93 32948.43 360.01 Tata Chemicals Ltd. 8725.83 8538.01 452.05 National Fertilizers Ltd. 5222.19 5062.05 97.46 Southern Petrochemical Inds. Corpn. Ltd. 453.67 405.29 -707.21 Rashtriya Chemicals & Fertilizers Ltd. 8574.71 8487.92 211.58

Brief profile Indian Farmers Fertiliser Co-Op. Ltd. Website: Industry Mixed fertilisers ROC Reg. No. Ownership Co-operative Sector Registered office address IFFCO Sadan, C-1, District Centre, Saket Place, New Delhi - Delhi Tel no. Fax no. ISIN Code BSE Demat Code BSE Listing group NSE Scrip Code Face value (Rs) Beta Company Background Indian Farmers Fertiliser Co-Op. Ltd (IFFCO) was incorporated in the year 1967 as a multi co-operative society under the Multi State Co-operative Society's Act 1984 and 2002. The main activity of the company is production and distribution of mixed fertilizers. It is also engaged in the production of fertilizers, quality seeds, agro-chemicals and implements modern technology for farmers. It is making substantial contribution to the Indian government to increase food grain production in the country. The various product types manufactured and traded by IFFCO are Ammonia, Urea, Dap, NPK, Dry Ice, Malathion, Seeds & Chemicals etc, and liquid Co2. The company is having various plants at Aonla ( Bareilly, UP), Kalol (Mehsana,Gujarat), Kandla (Kachch, Gujarat), Phulpur (Allahabad, UP). It has also completed another plant at Kandla Phase II. The fertilizer distribution of IFFCO is undertaken by 36,000 co-operative societies in India. The entire activities of distribution, sales and marketing are co-coordinated by Marketing Central Office, at New Delhi assisted by the marketing offices in the field. In addition, essential agro-inputs for crop production are made available to the farmers through a chain of 167 Farmers Service Centre (FSC). IFFCO nurtures its relations with farmers and undertakes a large number of agricultural extension activities for their benefit every year. The chairman of the organization is Mr. Surinder Kumar Jakhar. The entire equity holding of the organization is among the members of the organization. Industry P/E Incorporation Year www.iffco.nic.in 13.8 1967

10000

ORIGIN OF IFFCO
Till mid sixties cooperatives in India had no production facility despite marketing nearly 70% of fertilizers. IFFCO was established as the farmers own initiative in Cooperative Sector on 3rd Nov. 1967 with the proposed plants at Kalol & Kandla. With the enactment of Multi State Co-operative Societies Act 2002, IFFCO is deemed to be registered as a Multi State Co-operative Society. The Society is fully owned by Cooperatives.

PRODUCTION CAPACITY (As on March 2010)

Largest producer of fertilizers in the country No. of Plant Locations : Five Installed Annual Capacity (000 MT) UREA - 4242.2 NPK/DAP - 4335.4 TOTAL N - 2628.2 TOTAL P2O5 - 1712.8 Contributed about 21.7% to the total N and 27.5% to the total P2O5 produced in the country during the year 2009-10

PLANT HIGHLIGHTS OF 2009-10

KALOL

Produced highest ever 6.00 lakh MT of Urea with capacity utilisation of 110%. Achieved lowest specific energy consumption of 5.796 Gcal/MT of Urea during 2009-10.
PHULPUR

Produced highest ever 17.23 lakh MT of Urea with capacity utilisation of 101%. Phulpur-I and Phulpur-II produced highest ever 7.23 LMT and 10.00 LMT of Urea, respectively, with lowest specific energy consumption of 6.6872 Gcal/MT of Urea by Phulpur-I and 5.6660

 Gcal/MT of Urea by Phulpur-II.

AONLA

Produced 20.01 lakh MT of Urea with capacity utilisation of 100%. Best production was 20.05 lakh MT of Urea in 2008-09. Aonla I produced highest ever 10.00 lakh MT of Urea and operated with specific energy consumption of 5.690 Gcal/MT. Aonla-II also produced 10.0 lakh MT of Urea and operated with specific energy consumption of 5.5439 Gcal/MT. The Best production was 10.18 lakh MT of Urea during 2008-09.

KANDLA

The unit produced 23.74 lakh MT of NPK/DAP. Best production was 26.86 lakh MT of NPK/DAP in 2005-06. The plant operated with specific energy consumption of 0.244 Gcal/MT of P2O5 Best was 0 222 Gcal/MT of P2O5 in 2005-06

PARADEEP

P2O5. 0.222 06. Produced highest ever 15.00 lakh MT of NP/DAP during the year 2009-10 registering a rise of 14.9 % over last year. The plant operated with lowest specific energy consumption of 1.784 Gcal/MT of P2O5. It has come down from 3.164 Gcal/MT of P2O5 in 2006-07 to 1.784 Gcal/MT in 2009-10.

MARKETING CHANNELS
Distribution of fertilisers mainly through the Cooperative System: State level Apex Cooperative Marketing Federation acts as wholesaler Direct supplies to Societies in some States IFFCO-NCDC Cooperative Societies Small quantities to institutional agencies like Agro Industries Corporation etc 158 IFFCO Farmers Service Centres

Executive Summary

Indian Farmers Fertiliser Co-Op. Ltd.

Rs. Crore (Non-Annualised) Total incom e Sales Income from financial services Total expenses Raw material expenses Pow er, fuel & w ater charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT Net w orth Paid up equity capital (net of forfeited capital) Reserves & surplus Total borrow ings Current liabilities & provisions Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Grow th (%) Total income Total expenses PBDITA PAT Net w orth Total assets Profitability ratios (%) PBDITA Net of P&E/Total income net of P&E PAT Net of P&E/Total income net of P&E PAT Net of P&E/Avg. net w orth PAT/Avg. net w orth PAT Net of P&E/Avg. total assets PAT/Avg. total assets Liquidity ratios (tim es) Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) Efficiency ratios (tim es) Total income / Avg. total assets

Mar 2006 12 m ths 10028.44 9957.96 32.92 9926.77 5966.02 622.96 281.61 9.51 549.09 0 0 876.76 724.75 482.44 341.35 3555.39 422.51 3132.66 5041.16 1355.83 10433.72 7515.5 4869.92 776.16 4567.63 181.36

Mar 2007 12 m ths 10589.29 10344.66 155.53 11168.27 6429.31 635.31 316.47 3.44 659.36 0 0 1022.36 647.93 256.44 175.02 3641.84 422.69 3218.92 6480.71 1206.64 11891.53 8036.12 5029.7 747.9 5901.57 172.27

Mar 2008 12 m ths 12525.07 12173.39 274.41 11131.27 6663.65 763.6 409.61 0 669.92 0 0 1205.22 792.96 382.03 257.59 3688.66 423.79 3264.73 6770.22 1376.99 12442.94 8569.83 5169.79 1416.73 5619.76 155.98

Mar 2009 12 m ths 33475.93 32948.43 440.43 33396.43 13988.97 988.72 599.86 0 706.59 0 0 1999.34 939.16 468.76 360.01 3958.87 426.15 3532.59 12802.11 3183.56 20558.69 9098.98 5256.82 7552.95 7417.93 255.06

Mar 2010 12 m ths 17651.5 16823.94 752.94 16961.79 8615.7 697.33 706.02 0 872.92 0 0 1794.25 1022.19 564.25 401.1 4270.5 426.11 3844.26 11524.51 2199.28 18609.75 9433.6 5157.28 7531.28 5575.86 246.65

33.9932044 5.59259466 18.2805457 41.3459718 12.5065857 -0.33129572 30.7153293 16.606597 17.8860675 6.79201602 -48.7271129 47.1774654 7.84668586 2.55333094 1.39914657 89.916361 13.972102 4.63699793

167.2714 200.023537 65.890045 39.7608603 7.446901 65.2237333

-47.2710691 -49.2107689 -10.2578851 11.4135718 7.97806304 -9.47988418

8.59898122 3.25129844 9.49516812 9.95691705 4.08750362 4.28627845

9.50005252 1.48155018 4.35056265 4.86353778 1.40253749 1.56791077

9.51265005 1.93325932 6.59463884 7.02789714 1.98656474 2.11707919

5.86176796 0.95772604 8.37263796 9.41506604 1.9402072 2.18177102

10.4663244 2.56954848 11.0171252 9.7480123 2.31472073 2.04807748

0.92255411 1.42418121 4.06960068 14.7576712 46.0819271

1.07551183 1.78528513 1.63557941 14.8425274 35.8850342

0.99090515 1.83930386 1.88815311 11.6653537 37.3083016

0.53010659 3.23696766 1.40455394 4.54864845 33.0038195

0.46291867 2.69863248 1.79847421 5.15989566 42.39134

1.26200491

0.94980666

1.03023825

2.02946354

0.90140214

Income & expenditure

Indian Farmers Fertiliser Co-Op. Ltd.

Rs. Crore (Non-Annualised) Total incom e Sales Industrial sales Income from non-financial services Income from financial services Interest Dividends Treasury operations Other income Prior period income & extraordinary income Change in stock Total expenses Raw material expenses Packaging expenses Purchase of finished goods Pow er, fuel & w ater charges Compensation to employees Indirect taxes Royalties, technical know -how fees, etc. Lease rent & other rent Repairs & maintenance Insurance premium paid Outsourced mfg. jobs (incl. job w orks, etc.) Outsourced professional jobs Directors' fees Selling & distribution expenses Travel expenses Communication expenses Printing & stationery expenses Miscellaneous expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises Share of loss in subsidiaries/JVs,etc. Lease equalisation adjustment Loss on securitisation of assets/loans Fee based financial service expenses Treasury operations expenses Total provisions Write-offs Less: Expenses capitalised Less: DRE & expenses charged to others Prior period & extraordinary expenses Interest paid Financial charges on instruments Expenses incurred on raising deposits/debts Depreciation Amortisation Provision for direct taxes PAT PBDITA PBDTA PBT

Mar 2006 12 m ths 10028.44 9957.96 9947.4 10.56 32.92 11.38 21.54 0 21.12 16.44 239.68 9926.77 5966.02 145.23 1633.74 622.96 281.61 9.51 0 23.75 58.8 36.27 0 12.39 0.16 549.09 15.37 6.2 2.23 46.63 0 0 0 0 0 3.05 3.36 0.95 1.74 28.31 0 0.61 152.01 0 0 242.31 0 141.09 341.35 876.76 724.75 482.44

Mar 2007 12 m ths 10589.29 10344.66 10333.55 11.11 155.53 10.54 124.62 20.37 67.12 21.98 754 11168.27 6429.31 173.46 1875.34 635.31 316.47 3.44 0 29.72 74.57 44.34 0 12.69 0.23 659.36 29.15 5.75 2.52 28.98 0 0 0 0 0 9.53 0 0.08 7.65 20.49 0 3.52 374.43 0 0 391.49 0 81.42 175.02 1022.36 647.93 256.44

Mar 2008 12 m ths 12525.07 12173.39 12162.82 10.57 274.41 26.66 132.53 115.22 54.92 22.35 -1136.21 11131.27 6663.65 170.43 1245.44 763.6 409.61 0 0 21.42 75.54 41.04 0 16.96 0.27 669.92 32.43 7.42 2.68 45.9 0 0 0 0 0 10.4 20.57 0.31 2.47 22.89 0 6.47 412.26 0 0 410.93 0 124.44 257.59 1205.22 792.96 382.03

Mar 2009 12 m ths 33475.93 32948.43 32933.3 15.13 440.43 166.01 274.42 0 39.28 47.79 280.51 33396.43 13988.97 200.39 14539.23 988.72 599.86 0 0 22.81 99.36 36.57 0 21.24 0.3 706.59 35.92 6.22 2.81 56.41 0 0 0 0 0 28.77 232 0.09 219.89 36.98 0 7.93 1060.18 0 0 470.4 0 108.75 360.01 1999.34 939.16 468.76

Mar 2010 12 m ths 17651.5 16823.94 16808.57 15.37 752.94 450.78 196.89 105.27 65.13 9.49 -288.61 16961.79 8615.7 204.49 4017.85 697.33 706.02 0 0 23.61 103.55 39.92 0 21.56 0.49 872.92 46.99 5.75 2.74 58.17 0 0 0 0 0 36.56 0 20.58 39.78 7.08 0 61.71 772.06 0 0 457.94 0 163.15 401.1 1794.25 1022.19 564.25

Brief profile

Tata Chemicals Ltd.

Website: w w w .tatachemicals.com

Industry Fertilisers ROC Reg. No. Ownership Tata Group Registered office address

2893

Industry P/E Incorporation Year

13.8 1939

Bombay House, 24, Homi Mody Street, Fort, Mumbai - Maharashtra Tel no. Fax no. ISIN Code BSE Demat Code BSE Listing group NSE Scrip Code Face value (Rs) Beta Listed On INE092A01019 500770 A TATACHEM 10 1.136

22049131 66658143

Ahmedabad , Bombay , Calcutta , Delhi , Madras , National , Uttar Pradesh (Kanpur)

Company Background Incorporated in 1939 Tata Chemicals limited, a Tata Group Company is one of the most prominent producer of inorganic chemicals such as urea and phosphatic fertilizers in India. The company also produces fertilizers, food additives.

Currently Mr. Ratan N. Tata is the Chairman of the company. The promoters hold around 71 percent of the total share capital of the company whereas institutional investors share about 34 percent and individuals have a significant share of about 29 percent. The products manufactured by TCL are broadly categorised into Chemicals, Fertilisers, food additives and others. TCL manufactures inorganic chemicals such as Soda ash, Caustic soda, Gypsum, Cement both ordinary portland and pozzolana portland cement, Bromine and its variants like liquid bromine technical, potassium bromide PQ, sodium bromide PQ, methyl bromide, ethyl bromide and hydrobromic acid. The fertilisers manufactured by the company are called nitrogenous fertilisers (or urea), Phosphatic fertilisers and Potassic fertilisers. The fertilisers are sold under the brand name 'Paras'. The food additives produced by TCL include salt, sodium bicarbonate and cooking soda. The other TCL products are ethyl bromide, hydrobromic acid, hydrochloric acid, liquid bromine, liquid chlorine and sodium bromide (photographic grade). The above products have applications in the sectors such as agriculture, animal nutrition, construction, food products, glass, metals, pharmaceuticals, safety and environment, soaps and detergents, textile and leather. The company also supplies various farming equipment and solutions including know-how and innovative techniques such as satellite mapping and geographical information system. The registered office of TCL is at Mumbai and its plant are located in Barbala in Uttar Pradesh, Mithapur in Gujarat and at Haldia in West Bengal.

Tata Chemicals Limited (TCL) is a global company with interests in businesses that focus on LIFE living, industrial and farming essentials. It is the world's second-largest producer of soda ash. With manufacturing facilities in India, UK, US and Kenya, TCL is the worlds most geographically diversified soda ash company, with an efficient supply chain that can service customers across the globe. Established in 1939 at Mithapur (in Gujarat, India), TCL is a part of the Tata group. It is a leading player in the agribusiness sector with a strong presence in crop nutrients (urea and phosphatic fertilisers) and crop protection products. The company is a pioneer and market leader in the Indian branded iodised salt segment through its pioneering brand Tata Salt. TCLs global soda ash capacity is around 5.5 million tonnes per annum, out of which 60 per cent capacity is from natural soda ash deposits at Wyoming in the US and Lake Magadi in Kenya. Along with soda ash (sodium carbonate), the company also manufactures sodium bicarbonate and bulk chemicals such as sulphuric acid, phosphoric acid, and sodium tripoly phosphate (STPP). The company has extended its operations into the services sector and touches lives through applications in agriculture, animal nutrition, construction, consumer products, glass, metals, pharmaceuticals, soaps and detergents, and textiles and leather industries. In India Tata Chemicals is present in all three crop nutrition groups through its fertiliser product base that spans: Urea (a nitrogenous fertiliser) DAP (contains both nitrogen and phosphorus) NPK complexes (contains all three nutrients) SSP (phosphorus based). TCL is the market leader in the urea and phosphatic fertiliser segments. Additionally, the company imports and sells MOP and DAP and supplies organic materials and other specialty fertilisers such as calcium nitrate and zinc sulphate. TCL has an established presence in the states of Uttar Pradesh, Punjab, Haryana, Bihar and Uttaranchal, which account for 48 per cent of the total domestic demand for urea.

Executive Summary Tata Chemicals Ltd. Rs. Crore (Non-Annualised) Total income Sales Income from financial services Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus Total borrowings Current liabilities & provisions Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (% ) Total income Total expenses PBDITA PAT Net worth Total assets Profitability ratios (% ) PBDITA Net of P&E/Total income net of P&E PAT Net of P&E/Total income net of P&E PAT Net of P&E/Avg. net worth PAT/Avg. net worth PAT Net of P&E/Avg. total assets PAT/Avg. total assets Liquidity ratios (times) Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) Efficiency ratios (times) Total income / Avg. total assets Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 12 mths 12 mths 12 mths 12 mths 12 mths 3766.03 3639.58 83.72 3500.44 1481.08 320.83 128.76 140.3 336.19 0 0 686.63 649.8 510.87 353.03 2167.7 215.1 1952.54 1454.49 792.76 4756.04 3123.13 1550.97 713.74 1300.93 1165.24 4310.5 4124.66 156.55 3858.12 1671.85 392.24 154.36 160.41 362.08 0 0 826.92 784.19 633.84 444.21 2392.84 215.1 2177.68 1041.77 1034.85 4785.31 3220.71 1514.74 1350.28 1341.51 550.45 4884.95 4208.57 637.43 3961.48 1703.8 479.66 173.97 182.38 372.21 0 0 1326.36 1305.86 1157.1 949.18 3571.68 234 3337.62 2343.84 1322.45 7541.29 3354.96 1512.58 3741.4 1665.56 596.13 8725.83 8538.01 117.8 8369.32 3541.78 609.52 200.29 184.31 456.9 0 0 970.08 824.84 661.42 452.05 3859.3 235.17 3624.07 3676.1 2143.7 9976.16 3860 1852.2 4473.73 2954.36 501.83 5772.07 5514.61 187.73 5166.12 2137.33 430.14 205.66 108.9 514.56 0 0 965.31 775.6 588.13 434.78 4282.96 243.26 4039.64 2946.51 1506.64 9040.4 3988.57 1830.09 4906.66 1983.5 206.08

16.5884979 22.883251 10.7271291 3.66466011 8.2418243 6.02387078

14.4573994 10.218144 20.4316735 25.8278333 10.5735232 0.61542796

13.3267602 78.6268027 -33.8507626 2.67902502 111.267506 -38.2731214 60.3976201 -26.8614856 -0.49171202 113.678215 -52.3746813 -3.82037385 49.4742878 8.06882937 10.9776384 57.5925071 32.2871816 -9.37996183

17.7401662 8.81470026 15.8183573 16.9500233 7.12973363 7.63980411

18.7397955 9.80050033 18.4004526 19.4805878 8.79498184 9.31126099

26.856936 19.0973558 31.1270647 31.8275402 15.0615742 15.400516

10.6033643 4.62877211 10.8018054 12.1666321 4.58217378 5.16113932

16.5589801 7.31449342 10.3108965 10.6795902 4.41478375 4.57264616

0.91535501 0.67316308 14.2310616 55.323437 51.9991631

0.98168367 0.43604393 15.2571963 58.663211 66.4620133

1.18105557 0.65632639 56.424878 58.9696975 98.4720793

1.03210886 0.95253025 5.20483338 36.1791184 85.2122182

1.33418983 0.68796113 4.0210321 53.9040204 90.2095216

0.81576188

0.9045572

0.79285884

0.99627446

0.60705722

Income & expenditure Tata Chemicals Ltd. Rs. Crore (Non-Annualised) Total income Sales Industrial sales Income from non-financial services Income from financial services Interest Dividends Treasury operations Other income Prior period income & extraordinary income Change in stock Total expenses Raw material expenses Packaging expenses Purchase of finished goods Power, fuel & water charges Compensation to employees Indirect taxes Royalties, technical know-how fees, etc. Lease rent & other rent Repairs & maintenance Insurance premium paid Outsourced mfg. jobs (incl. job works, etc.) Outsourced professional jobs Directors' fees Selling & distribution expenses Travel expenses Communication expenses Printing & stationery expenses Miscellaneous expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises Share of loss in subsidiaries/JVs,etc. Lease equalisation adjustment Loss on securitisation of assets/loans Fee based financial service expenses Treasury operations expenses Total provisions Write-offs Less: Expenses capitalised Less: DRE & expenses charged to others Prior period & extraordinary expenses Interest paid Financial charges on instruments Expenses incurred on raising deposits/debts Depreciation Amortisation Provision for direct taxes PAT PBDITA PBDTA PBT Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 12 mths 12 mths 12 mths 12 mths 12 mths 3766.03 3639.58 3164.31 475.27 83.72 27.54 51.95 4.23 14.32 28.41 87.44 3500.44 1481.08 107.56 457.7 320.83 128.76 140.3 5.93 16.7 40.82 10.25 0 0 0 336.19 0 0 0 101.06 0 0 0 0 0 0 16.05 0 0 1.23 0 4.84 36.83 0 0 138.93 0 157.84 353.03 686.63 649.8 510.87 4310.5 4124.66 3620.36 504.3 156.55 37.75 90.58 28.22 0 29.29 -8.17 3858.12 1671.85 118.11 390.5 392.24 154.36 160.41 8.93 19.81 40.46 11.51 0 1.47 1.29 362.08 0 0 0 118 0 0 0 0 0 1.88 17.05 0 0.89 0.09 0 4.66 42.73 0 0 150.35 0 189.63 444.21 826.92 784.19 633.84 4884.95 4208.57 3870.72 337.85 637.43 29.26 85.01 523.16 14.83 24.12 25.71 3961.48 1703.8 123.36 304.35 479.66 173.97 182.38 0 24.75 43.62 10.11 0 2.14 3.68 372.21 0 0 0 136.36 0 0 0 0 0 17.52 9.46 0.09 0 0.14 6.25 3.23 20.5 0 0 148.76 0 207.92 949.18 1326.36 1305.86 1157.1 8725.83 8538.01 6265.45 2272.56 117.8 36.87 80.12 0.81 14.74 55.28 95.54 8369.32 3541.78 151.09 2055.07 609.52 200.29 184.31 0 20.34 48.97 7.67 0 2.43 4.24 456.9 0 0 0 185.41 0 0 0 0 0 45.99 289.84 1.76 55.86 2.65 12.1 4.57 145.24 0 0 163.42 0 209.37 452.05 970.08 824.84 661.42 5772.07 5514.61 4509.69 1004.92 187.73 11.93 81.29 94.51 36.54 33.19 -171.17 5166.12 2137.33 157.45 702.86 430.14 205.66 108.9 0 15.51 39.49 6.06 0 2.46 6.22 514.56 0 0 0 158.34 0 0 0 0 0 16.02 130.76 0 0 0.28 14.07 18.18 189.71 0 0 187.47 0 153.35 434.78 965.31 775.6 588.13

Tata Chemicals established the Innovation Centre in Pune, India in 2004. The centre was set up with the objective of developing world class R&D capabilities in new knowledgebased products, cutting edge technologies and emerging areas of nanotechnology and biotechnology. The centre would thus help develop a wider range of value added products and build new business lines for the future. TCL has recruited world renowned scientists with high levels of capabilities in their field of specialisations. The centre has built a state-of-the-art infrastructure with latest equipment for development work. The success and capability of the Innovation Centre has already become very clear it has filed for 36 patents (including 14 international filings), and is in the process of filing several more. New products: Since inception, the Innovation Centre has interfaced with TCL's business units and explored the development of new products higher up the value chain. The centre has contributed significantly in the development of the nanotechnology-enabled cartridge (or bulb), in Tata Swach. New areas: The centre has established a young, highly experienced, and technologically advanced team that is eager to make its mark through innovation and patenting. The centre has now moved from being TCL-centric to a having a much wider base of clients, from the Tata group as well as external companies. The team: The Innovation team currently comprises of nanotechnologists, biotechnologists, chemical engineers, business development and IPR personnel, and is nearly 40 members strong. The scientists have trained in the best facilities in the world. Most of them have worked with leading Nobel Laureates and personalities in the field of science and technology. All of them have very impressive credentials and have reached positions of value in their fields. Their work has been recognised and valued by their peer group world over. As evidence of this, Innovation Centre is working with some leading institutes like CSIR, MIT, Purdue University, IIT Chennai among others developing radically different technologies.

Brief profile National Fertilizers Ltd. Website: Industry Urea ROC Reg. No. Ownership Central Govt. - Commercial Enterprises Registered office address Industry P/E Incorporation Year www.nationalfertilizers.com 13.8 1974

7417

SCOPE Complex, Core-III, 7, Institutional Area, Lodhi Road, New Delhi - Delhi Tel no. Fax no. ISIN Code BSE Demat Code BSE Listing group NSE Scrip Code Face value (Rs) Beta Listed On INE870D01012 523630 A NFL 10 1.405 Bombay , Calcutta , Madras , National

24360821 24361553

Company Background National Fertilizers Ltd (NFL) is the leading player of Indian Fertilizer Industry. This Urea producing company is a Mini Ratna Category I company. It was started in 1974 to be operated under the Department of Fertilizer in the Ministry of Chemical and Fertilizers. With an installed capacity of 35.49 lakh MTs of Nitrogenous Fertilizers the company operates through its 5 plants located at Nangal, Bhatinda, Panipat, Indore and Vijaipur. In addition to its popular brands Kisan Urea and Kisan Khad, NFL also manufactures and markets Bio fertilizers and a wide range of industrial products like Methanol, Nitric Acid, Sulphur, Liquid Oxygen, Liquid Nitrogen etc. NFL has newly developed Neem coated Urea which has proven capacity to increase the crop yield. The company efficiently markets its products through its strong distribution channel spread all over the country. NFL has provided specialized services in the fields of Project Management, Plant Operation and Maintenance etc in countries like Brazil, Bahrain and Libya. For Indian farmers too, NFL provides soil testing services, other farm services like fertilizer demonstration, field days, farmers Mela, pilot projects etc and farmer training centres to educate the farmers on the proper use of fertilizers. On the occasion of 50th anniversery of India's Independence NFL has undertaken an integrated rural development program called 'Sulabh', which aims at eradication of poverty and sustaining economic welfare. Central Government owns nearly 98 percent stake in the company and the current chairman and MD is Mr.P.S.Grewal.

NFL, a Schedule A and Mini Ratna Company, is the second largest producer of Nitrogenous Fertilizers in the Country with 15.8% share in domestic production of Urea achieved in the country during 2009-10. NFL was incorporated on 23rd August 1974 with two manufacturing Units at Bathinda and Panipat. Subsequently, on the reorganization of Fertilizer group of Companies in 1978, the Nangal Unit of Fertilizer Corporation of India came under the NFL fold. The Company expanded its installed capacity in 1988 by installing and commissioning of its Vijaipur gas based Plant in Madhya Pradesh. The Vijaipur Plant was a landmark achievement in project management in India. The plant was completed well within time and approved project cost. In recognition of this achievement, the project was awarded the First Prize on Excellence in Project Management by Govt. of India. Subsequently the Vijaipur plant doubled its capacity to 14.52 lakh MTs by commissioning Vijaipur Expansion Unit i.e. Vijaipur-II in 1997. The annual capacity was subsequently re-rated w.e.f. 1.4.2000 from 7.26 lakh MT of Urea to 8.64 lakh MT for Vijaipur-I & Vijaipur-II Plants each. Three of the Units Three of the Units are strategically located in the high consumption areas of Punjab and Haryana. The Company has an installed capacity of 32.31 lakh MT of Urea. The company produced 33.30 lakh tonnes of Urea and recorded an annual sales turnover of Rs.5091crores during 2009-10. NFL, a profitable public sector undertaking operates under the administrative control of Department of Fertilizers in the Ministry of Chemicals & Fertilizers. The Company is consistently making profits and registered a profit (PBT) of Rs.260 crores for the year 2009-10.The Companys strength lies in its sizeable presence, skilled manpower, Marketing and strong distribution network nationwide. Aiming towards further growth, NFL is already in the process of revamping its three fuel oil based plants for change over its feedstock from FO/LSHS to NG/R-LNG and Capacity Augmentation of Urea at Vijaipur Unit. Towards reduction of Green House Gases, Company has already initiated action for various CDM (Clean development Mechanism) Projects so as to earn revenue in terms of carbon credits. NFL in collaboration with M/s KRIBHCO & RCF has formed a joint venture company (JVC) named as Uravarak Videsh Limited (UVL) to explore investment opportunities abroad and within country in Nitrogenous, Phosphatic & Potassic sectors and to render

consultancy services for setting up Projects in India & Abroad. A brown field gas based Urea plant at Barauni in Bihar has been entrusted to the above Joint venture Company. Kisan Urea NFLs popular brand is sold over a large marketing territory spanning the length and breadth of the country. The Company also manufactures and markets Biofertilizers and a wide range of industrial products which include Methanol, Sodium Nitrate, Sodium Nitrite, Nitric Acid, Sulphur, Liquid Oxygen, Liquid CO2, Liquid Nitrogen etc. The Company has also developed Neem coated Urea which on demonstration has shown improved results in terms of increase in yield by 4-5% and environment friendly. Accordingly Company has been manufacturing and selling Neem Coated Urea from its manufacturing plants since 2002-03 The Company is further focusing its thrust to widen the marketing operations of Neem coated Urea. The company has also taken initiative to make available other agro inputs under single window like quality seeds, Insecticides and Bio-pesticides by collaboration with other reputed organizations. R&D trials are under way for testing the efficacy of Biopesticides, elemental Sulphur, in collaboration with Agriculture Institutes. NFL over the years has developed a team of dedicated professionals in the areas of production, maintenance, project management, safety and environment control. These professionals are sought after in the Industry both in India & abroad for their Specialized Services. NFL is known in the industry for its work culture, value added human resources, Quality Management, Safety, Environment, Concern for Ecology and its commitment to social upliftment and to ensure their compliance, All NFL plants are certified and being maintained under ISO-9001 (2000), ISO-14001 & OSHAS-18001 by conforming to International Quality, Environmental & Occupational Safety & Hazards standards. With the certification of Corporate Office/Marketing operations under ISO-9001: 2000, NFL has become the first Fertilizer Company in the country to have its total business covered under ISO-9001 Certification. Urea is an essential commodity under the Essential Commodities Act, 1955. The Department of Fertilizers (DoF) plans and monitors production, import and distribution of fertilizers and manage the subsidy for indigenous and imported fertilizers in the country. In this regard, DoF has set up an on line web based Fertilizers Monitoring System (FMS). Presently Fertilizer companies are allowed to market 50% of their total Urea produce out side EC allocation.

Bio Fertilizers
NFL manufactures and markets three types of Bio-Fertilizers, Rhizobium, Phosphate Solubilishing Bacteria (PSB) and Azetobactor. Starting with a mere 23 MT production in 1995-96, the production has risen to 204 MT (Approx) in 2007-08. The Company presently markets its bio-fertilizers in Madhya Pradesh, Maharashtra, Uttar Pradesh, Uttrakhand, Chattisgarh, Bihar, Jharkhand, Himachal Pradesh, Jammu & Kashmir, Punjab, Haryana & Rajasthan. Bio-fertilizers are used to supplement chemical fertilizers as also to maintain soil fertility; besides the following:Bio-Fertilizers are Supplement to Chemical Fertilizers. Bio-Fertilizers are cheap and can reduce the cost of cultivation. Fix Biological Nitrogen in the soil, which is readily available to the plant. Increase crop yield by 4-5% on an average. Improve soil properties and sustain soil fertility. Provides plant nutrient at low cost and useful for the consecutive crops.

Kisan Urea
Kisan Urea is a highly concentrated, solid, nitrogenous fertilizer, containing 46.0%. It is completely soluble in water hence Nitrogen is easily available to crops. It contains Nitrogen in amider form which changes to ammonical forms and is retrieved by soil colloides for longer duration. Urea is available in granular form and can eb applied by drill and broadcasting. Kisan Urea is ideally suitable for all types of crops and for foliar spray which instantly removes nitrogen deficiency. Kisan Urea also has a strong and long lasting effect on crop resulting in bumper crops Carbonic acid present in Kisan Urea helps in absorption of other nutrients like phosphate and Potash by roots of crop.

Executive Summary National Fertilizers Ltd. Rs. Crore (Non-Annualised) Total income Sales Income from financial services Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus Total borrowings Current liabilities & provisions Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (% ) Total income Total expenses PBDITA PAT Net worth Total assets Profitability ratios (% ) PBDITA Net of P&E/Total income net of P&E PAT Net of P&E/Total income net of P&E PAT Net of P&E/Avg. net worth PAT/Avg. net worth PAT Net of P&E/Avg. total assets PAT/Avg. total assets Liquidity ratios (times) Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) Efficiency ratios (times) Total income / Avg. total assets Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 12 mths 12 mths 12 mths 12 mths 12 mths 3663.25 3626.12 17.49 3525.43 2543.91 763.21 180.8 16.13 214.32 0 0 311.48 303.74 179.23 116.4 1256.42 490.58 765.84 227.39 636.79 2358.77 2864.82 973.71 0 1338.05 17.72 3916.59 3889.45 4.47 3742.21 2091.07 820.26 174.7 17.89 213.39 0 0 392.81 376.08 269.22 176.1 1370.75 490.58 880.17 326.42 692.64 2609.85 2881.61 893.29 0 1676.5 15.18 4229.32 4167.15 31.29 4134.08 2260.41 890.72 303.3 19.86 228.47 0 0 267.14 250.5 161.35 108.65 1407.67 490.58 917.09 524.66 823.99 2962.06 2895.23 821.73 633.32 1436.17 14.87 5222.19 5062.05 50 5154.31 2851.38 1248.42 330.34 16.55 245.29 0 0 290.91 250.02 153.61 97.46 1470.7 490.58 980.12 264.87 886.65 2806.99 2923.46 751.9 460.43 1509.94 15.57 5164.4 5068.5 32.33 4917.18 2643.11 1074.94 357.02 11.03 243.47 0 0 364.87 353.91 260.16 171.51 1582.14 490.58 1091.56 403.16 797.65 2946.42 2953.24 695 121.8 2069.75 16

3.33510107 5.21002134 -12.8946559 -27.6614256 6.83879793 8.49309146

6.91571692 7.98475204 23.4758779 -1.10662385 6.14903714 10.4716197 24.6785258 -4.6006158 26.1108257 -31.9925664 8.89795613 25.4236706 51.2886598 -38.3021011 -10.2991256 75.9798892 9.69079095 2.6941652 4.47761194 7.57734412 10.6445308 13.4954116 -5.23520793 4.96724249

8.33554509 2.99777547 8.96970392 9.52969638 4.83400215 5.13579637

9.76385011 4.21330328 12.522981 13.4060605 6.62155689 7.08848735

5.8643926 2.09855012 6.35757013 7.82099179 3.1701876 3.89991942

3.8593569 0.08620992 0.30711826 6.77188826 0.15323147 3.3787192

6.10969715 2.32700994 7.79274381 11.2360949 4.13493911 5.96202947

1.64079265 0.18196441 23.2726098 64.706339 42.9856103

1.71300412 0.23813415 16.398685 96.4580853 57.2561457

1.09954446 0.3727152 9.47475962 87.9270605 60.2530526

1.50002484 0.18009791 2.48129127 62.444884 49.4447986

1.8005498 0.25481942 19.9416058 67.5295008 44.7913917

1.62475689

1.5786877

1.51808898

1.81041593

1.79524838

Income & expenditure National Fertilizers Ltd. Rs. Crore (Non-Annualised) Total income Sales Industrial sales Income from non-financial services Income from financial services Interest Dividends Treasury operations Other income Prior period income & extraordinary income Change in stock Total expenses Raw material expenses Packaging expenses Purchase of finished goods Power, fuel & water charges Compensation to employees Indirect taxes Royalties, technical know-how fees, etc. Lease rent & other rent Repairs & maintenance Insurance premium paid Outsourced mfg. jobs (incl. job works, etc.) Outsourced professional jobs Directors' fees Selling & distribution expenses Travel expenses Communication expenses Printing & stationery expenses Miscellaneous expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises Share of loss in subsidiaries/JVs,etc. Lease equalisation adjustment Loss on securitisation of assets/loans Fee based financial service expenses Treasury operations expenses Total provisions Write-offs Less: Expenses capitalised Less: DRE & expenses charged to others Prior period & extraordinary expenses Interest paid Financial charges on instruments Expenses incurred on raising deposits/debts Depreciation Amortisation Provision for direct taxes PAT PBDITA PBDTA PBT Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 12 mths 12 mths 12 mths 12 mths 12 mths 3663.25 3626.12 3618.2 7.92 17.49 17.49 0 0 11.1 8.54 -21.42 3525.43 2543.91 73.2 4.46 763.21 180.8 16.13 0 7.46 63.28 11.39 0 17.05 0.25 214.32 10.56 1.6 1.08 18.57 0 0 0 0 0 2.83 0 2.46 49.73 653.64 0 1.7 7.74 0 0 124.51 0 62.83 116.4 311.48 303.74 179.23 3916.59 3889.45 3880.17 9.28 4.47 4.44 0 0.03 10.38 12.29 1.72 3742.21 2091.07 80.55 0.74 820.26 174.7 17.89 0 5.24 58.97 11.88 0 14.47 0.02 213.39 10.35 1.52 1.11 14.8 0 0 0 0 0 3.21 0 0 4.64 0 0 0.69 16.73 0 0 106.86 0 93.12 176.1 392.81 376.08 269.22 4229.32 4167.15 4151.41 15.74 31.29 31.24 0 0.05 10.18 20.7 13.41 4134.08 2260.41 81.31 6.58 890.72 303.3 19.86 0 6 66.12 7.64 0 23.63 0.01 228.47 10.82 1.49 1.07 15.46 0 0 0 0 0 3.22 0.45 46.78 1.88 0 0 0.37 16.64 0 0 89.15 0 52.7 108.65 267.14 250.5 161.35 5222.19 5062.05 5048.39 13.66 50 50 0 0 14.97 95.17 29.58 5154.31 2851.38 85.9 3.38 1248.42 330.34 16.55 0 5.82 65.57 3.54 0 19.87 0.02 245.29 13.74 1.41 1.17 16.03 0 0 0 0 0 3.99 10.46 27.5 8.35 0 0 2.13 40.89 0 0 96.41 0 56.15 97.46 290.91 250.02 153.61 5164.4 5068.5 4903.35 165.15 32.33 30.61 0 1.72 10.88 52.69 -75.71 4917.18 2643.11 80.11 153.71 1074.94 357.02 11.03 0 5.33 76.57 3.66 0 24.92 0.03 243.47 16.24 1.27 1.3 19.61 0 0 0 0 0 3.4 0 3.35 4.62 0 0 0.13 10.96 0 0 93.75 0 88.65 171.51 364.87 353.91 260.16

Brief profile Southern Petrochemical Inds. Corpn. Ltd.

Industry ROC Reg. No. Chidambaram M.A. Group Ownership Registered office address 73, Armenian Street, Chennai - Tamil Nadu Tel no. Fax no. ISIN Code BSE Demat Code BSE Listing group NSE Scrip Code Face value (Rs) Beta Listed On INE147A01011 590030 B SPIC 10 1.185 Bangalore , Bombay , Cochin , Calcutta , Delhi , Hyderabad , Luxembourg , Madras , National 22352336 22352163 Diammonium phosphate (DAP)(18-46-0) 5778 Incorporation Year 1969

Website:
Industry P/E

www.spic.in
13.8

SPIC is a leading name in the field of Fertilizers for more than three decades in India. Over the years SPIC has grown & diversified to other fields like Pharmaceuticals, Engineering Services, Petrochemicals, Seeds, Tissue culture, Plant growth Promoters and Micronutrients. SPIC brand is well accepted today by farmers across the country. SPIC's multichannel network has 2200 retail outlets in South India. It's current annual production capacity is about 6.20lakh MT of UREA, 3.10lakh MT of DAP,2.40 lakh MT of NPK (20:20:0:13) and 1 lakh MT of SSP. SPIC plays a significant role to enhance agricultural productivity and profitability of millions of farmers through training program and comprehensive soil health services.

Products
SPIC Urea

Single stream urea plant, with a rated capacity of 6,20,400 MTPA. Main raw materials for the production of UREA are Ammonia and Carbon Dioxide for which the feedstocks are Naphtha and fuel oil.
Product Description

Synthetic organic compound containing 46.2% Nitrogen in Amide forms. A white solid uniform & high crushing strength prills with free flowing for easy application. Being Hygroscopic, urea is packed in moisture proof High Density Poly Ethylene bags.
Product Applications

Used as nitrogenous fertilizer.

(a) Can be applied to soil. Also suitable in solution form as spray. (b) Application is recommended in split doses for better use efficiency.

In processing of cotton and textile mills and also used as a raw material for chemical products, dyes and pharmaceuticals. Could be used as cattle feed.

SPIC DAP

Two stream DAP plant, with a total rated capacity of 6,06,100 MTPA. Main raw materials for the production of DAP are Sulfur & Rock Phosphate.
Product Description

Contains the second most important primary nutrient element, Phosphorous besides Nitrogen. (Nutrient: 18% N, 46% P2O5.) Unique black color and uniform size granules. Contains micro nutrients such as iron, zinc, manganese and molybdenum, and important plant nutrients such as sulphur, calcium, magnesium, nitrogen and phosphate.
Product Applications

Used as complex fertilizer for supply of N and P2O5 nutrients. Recommended for basal application of fertilizers due to slow releasing nature of DAP.

SINGLE SUPER PHOSPHATE

SPIC brings about its versatile version of Single Super Phosphate called the S P I C S U P E R
Product Applications

SSP helps to treat Sulphur deficiency in soils (40% of Indian soils are Sulphur deficient). Continuous application of SSP reclaims Alkali soils. Improves root formation and ensures quality product output.

Field promotion
SPICS field campaigns educate farmers in the latest agricultural trends and in making the best use of limited resources using a mix of fertilizer, technology and organic and inorganic inputs..

To uplift the farmers and to increase their knowledge base Intensive Farmer Contact Program (IFCP), Village Level Meeting (VLM), field demonstration, DAP workshops, soil testing campaigns, seminars, fertilizer festival and AV van campaigns are conducted. To reach all the farmers mass media publicity, ad films in rural theaters and television, participation rural festivals, shandy display, rural sports are carried out. Exclusive service programme like farm advisory service are done to diagnose nutrient deficiency by organizing soil testing and fertilizer recommendation campaigns.

Soil Management
SPICs soil testing laboratory at Tuticorin analyzes Macro and Micronutrients, organic carbon, soil texture etc. Apart from analysis of soil irrigation water and leaf analysis are also carried out. After analysis farmers are advised about corrective steps to be taken to reclaim the problematic soils. An exclusive programme for SOIL HEALTH is in operation. Farmers are given soil health cards and advises are given on soil management for continuous five years. Our mobile soil testing van drives into the rural interiors to help small farmers to get their soils analysed and get recommendations on the spot.

Agri Clinic
20 Backward villages around Tuticorin are adapted and given special attention for development. A model farm is established at the Agri Clinic to demonstrate cultivation of high-income generating crops with latest technology. A Vermicompost production yard is set up to supply quality Vermicompost to the nearby farmers. A green house is established for hybrid seedlings probagation An Agricultural Input retail store is going to be started functioning under Agri clinic.

Tissue culture
SPIC high-yielding, micro propagated bananas, gerberas,produced from its advanced tissue culture plant have a global market. The market leader in tissue culture bananas, SPIC produces all major varieties--Robusta, G-9, Red Banana,and Nendran. SPIC is the exclusive representative of Schreurs, Netherlands, world leaders in gerbera.

Corporate governance
SPIC Limited is conscious that a business run on principles of fairness, transparency and accountability aids in fostering a healthy relationship with all stakeholders. SPIC considers ethical conduct of business as one of the most important factors which will contribute to fulfilment of the companys corporate objectives.
Code of conduct for directors

SPICs code of conduct envisages that every member of the board of directors, individually and, the board of directors, collectively, will, at all times, pursue and uphold ethical standards and values as vigorously as their pursuit of the companys business objectives. In line with these principles, the board of directors of the company has adopted this code as a guide to the high ethical standards and values expected from its members.
Code of conduct for senior management

SPIC's CEO/Managing Director, CFO/Finance Director, other whole-time directors and all functional heads are bound under this code of conduct to pursue and uphold ethical standards, professional integrity and values at all times.
Corporate citizenship

SPIC strives to build mutually beneficial, interactive and trusting relationships between the company and its many stakeholdersemployees, customers, communities, suppliers, governments and investors.

Executive Summary Southern Petrochemical Inds. Corpn. Ltd. Rs. Crore (Non-Annualised) Total income Sales Income from financial services Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus Total borrowings Current liabilities & provisions Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (% ) Total income Total expenses PBDITA PAT Net worth Total assets Profitability ratios (% ) PBDITA Net of P&E/Total income net of P&E PAT Net of P&E/Total income net of P&E PAT Net of P&E/Avg. net worth PAT/Avg. net worth PAT Net of P&E/Avg. total assets PAT/Avg. total assets Liquidity ratios (times) Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) Efficiency ratios (times) Total income / Avg. total assets Sep 2006 18 mths 3393.52 3333.76 32.26 3789.71 2020.68 612.05 93.12 57.17 205.84 126.86 0 -6.13 -306.91 -389.48 -390.83 183.06 107.95 62.61 2069 1083.22 3335.28 2783.28 1453.78 1078.58 735.41 63.54 Mar 2008 Mar 2009 Mar 2010 18 mths 12 mths 12 mths 1593.15 1511.78 49.16 2178.69 688.71 239.6 97.87 63.82 71.38 197.61 0 -54.65 -439.77 -565.67 -566.82 -383.76 107.95 -504.21 2389.35 1028.73 3034.32 2725.24 1342.15 1036.54 603.44 50.79 453.67 405.29 30.94 1155.67 89.31 57.22 68.78 23.62 10.49 73.47 0 -496.47 -624.22 -706.68 -707.21 -1090.97 107.95 -1211.42 2476.43 1092.15 2660.31 2763.32 1261.64 575.63 586.21 54.13 812.1 427.87 132.45 910.35 194.59 45.91 56.7 6.78 22.17 37.46 0 -7.41 -27.9 -124.57 -124.57 -1135.55 131.17 -1317.41 2022.29 958.08 1963.85 2654.56 1077.16 238.55 480.81 48.3

3.00252316 -39.5952854 -57.2855663 11.08539 -30.8604883 -20.4336092

79.006767 -21.227513

284.213828 -6.3526588 -6.10998965 -12.3259907 -26.1796558

-0.03094132 -11.3672529 -77.7282985 -78.7519142 -10.9968741 -11.1416936

-3.35966146 -108.58645 -39.2114196 -35.5166005 -155.139279 -59.6065802 0 0 0 0 0 0 -17.7618689 -24.6653426 -14.8096087 -17.7976639 -24.8377858 -5.38778935

0.55429851 11.5528505 -0.27801051 19.5733571 106.271777

0.50054331 0.4726509 0.47145631 0 0 0 -0.4658548 -4.49330724 -15.7110786 41.3243991 101.514471 73.4316498 182.159531 668.331714 580.147512

1.09012294

0.50065758

0.15937175

0.35124217

Income & expenditure Southern Petrochemical Inds. Corpn. Ltd. Rs. Crore (Non-Annualised) Total income Sales Industrial sales Income from non-financial services Income from financial services Interest Dividends Treasury operations Other income Prior period income & extraordinary income Change in stock Total expenses Raw material expenses Packaging expenses Purchase of finished goods Power, fuel & water charges Compensation to employees Indirect taxes Royalties, technical know-how fees, etc. Lease rent & other rent Repairs & maintenance Insurance premium paid Outsourced mfg. jobs (incl. job works, etc.) Outsourced professional jobs Directors' fees Selling & distribution expenses Travel expenses Communication expenses Printing & stationery expenses Miscellaneous expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises Share of loss in subsidiaries/JVs,etc. Lease equalisation adjustment Loss on securitisation of assets/loans Fee based financial service expenses Treasury operations expenses Total provisions Write-offs Less: Expenses capitalised Less: DRE & expenses charged to others Prior period & extraordinary expenses Interest paid Financial charges on instruments Expenses incurred on raising deposits/debts Depreciation Amortisation Provision for direct taxes PAT PBDITA PBDTA PBT Sep 2006 18 mths 3393.52 3333.76 3321.95 11.81 32.26 1.67 30.41 0.18 27.5 0 5.36 3789.71 2020.68 0 16.68 612.05 93.12 57.17 0 15.93 45.01 15.46 21.34 0.53 0 205.84 0 0 0 75.02 126.86 0 0 0 0 0 0 11.91 82.33 0 0 5.08 300.78 0 0 82.57 0 1.35 -390.83 -6.13 -306.91 -389.48 Mar 2008 Mar 2009 Mar 2010 18 mths 12 mths 12 mths 1593.15 1511.78 1507.26 4.52 49.16 2.77 21.43 24.96 31.78 0.43 18.72 2178.69 688.71 0 9.62 239.6 97.87 63.82 0 11.58 37.39 10.84 47.3 6.47 0 71.38 8.58 0 0 37.9 197.61 0 0 0 0 0 0 123.32 15.12 0 2.16 1.57 385.12 0 0 125.9 0 1.15 -566.82 -54.65 -439.77 -565.67 453.67 405.29 405.29 0 30.94 20.7 8.8 1.44 16.46 0.98 -5.21 1155.67 89.31 0 8.99 57.22 68.78 23.62 0 4.1 20.06 3.23 24.74 4.4 0 10.49 3.85 0 0 19.39 73.47 0 0 0 0 0 69.25 447.73 12.96 0 2.55 5.89 127.75 0 0 82.46 0 0.53 -707.21 -496.47 -624.22 -706.68 812.1 427.87 427.87 0 132.45 8.3 8.83 115.32 14.13 237.65 -26.32 910.35 194.59 0 16 45.91 56.7 6.78 0 3.85 26.53 2.53 17.27 2.26 0 22.17 3.44 0 0 12.27 37.46 0 0 0 0 0 0 317.21 9.58 0 1.17 19.81 20.49 0 0 96.67 0 0 -124.57 -7.41 -27.9 -124.57

Rashtriya Chemicals & Fertilizers Ltd. Website: Industry Urea ROC Reg. No. Ownership Central Govt. - Commercial Enterprises Registered office address Industry P/E Incorporation Year www.rcfltd.com 13.8 1978

20185

Priyadarshini', Eastern Express Highway, Sion, Mumbai - Maharashtra Tel no. Fax no. ISIN Code BSE Demat Code BSE Listing group NSE Scrip Code Face value (Rs) Beta Listed On INE027A01015 524230 A RCF 10 1.573 Bombay , Calcutta , Madras , National

24045173 24045197

Company Background The erstwhile Fertilizer Corporation of India was reorganized to form Rashtriya Chemicals and Fertilizers Ltd in the year 1978. RCF's ownership lies with Central Government, Commercial Enterprises group. RCF is into the business of manufacturing and marketing of fertilizers and industrial chemicals. It produces Nitrogenous, Phosphatic and Potash fertilizers and sells them under the brand names Ujjawal urea, Suphala, Sujala, Microla, Biola. The range of its industrial chemicals include Methanol, Sodium Nitrate, Sodium Nitrite, Ammonium bicarbonate, Methylamines, Dimethyl Formamide, Dimethylacetamide. Fertilizers account for 80 percent and industrial chemicals for 20 percent of its turnover. RCF finds major market for its products in Maharashtra, Andhra Pradesh, RCF has 20 operating plants at Trombay unit, Mumbai and 5 at Thal Fertilizer unit, Raigarh. RCF has a good marketing network with its dealers covering all major states in the country for fertilizer marketing. The Industrial Products Division of RCF is exclusively responsible for the marketing of industrial chemicals manufactured by the company. RCF's industrial products are readily available for exports also.

Central government holds around 92 percent of its total equity shares, general public holds less than five per cent and the remaining lies with Institutional investors and others. The present Chairman and MD of RCF is Shri U.S Jha.

RCF as a corporate body and Government of India undertaking is responsible to the people of India, the Government as owner, Government as Government, Consumers, Employees, the Society at large and Posterity. The company is simultaneously accountable to all these agencies who have a stake in it's successful operation, growth and welfare.
Keeping these aspects in view, RCF has set for itself the following corporate goals

To help increase the national agricultural productivity by providing agricultural inputs and services. To provide the above inputs and services with least consumption of real resources and at least cost. To obtain for it's employees as decent a standard of living and as good a quality of life as possible, consistent with the general socio-economic conditions in the country. To secure as high a return on the rate of investment as possible, keeping in view the requirements of other competing objectives. To promote self-reliance in all activities in relation to company's operations including process know-how, design and engineering, erection, commissioning, operations, maintenance of plants and marketing of products. To manufacture and market industrial chemicals related to agricultural inputs and also others based on similar technology and intermediates, by-products, coproducts and waste from the main operations. To promote, organise, and perform research and development in products, technology, engineering, soil science and agronomy in furtherance of various corporate objectives. To improve the environment and minimise to the maximum extent technologically possible, the harmful emissions, atmospheric discharges and effluents. To continuously upgrade the quality of human resources and promote organisational and management development. To co-operate nationally and internationally in exchange of information and services of personnel. To have corporate growth at a pace consistent with availability of resources and developmental needs of the economy. To promote specific social objectives such as development of entrepreneurs, ancillary industries, special assistance to SC / ST and other backward classes.

Products and Services

RCF is one of the leading producers of Fertilizers in India. Sujala, Suphala 15:15:15, Suphala 20:20:0, Ujjwala, Microla and Biola are its major fertilizers. All the products can be used with different soil types and in various climatic conditions.

Suphala (15:15:15)

RCF produces two grades of complex fertilizers at its Trombay unit. They are commonly known as Suphala, which has almost become a generic name for NP/NPK complexes in the farming households of the country. It is concentrated fertilizer containing the plant nutrients in chemical combinations which reduces the cost of application, transportation, handling and storage. Suphala leaves a residual effect in the soil which is beneficial to all crops.
Ujwala Urea (46%)

RCFs Ujjwala urea is a chemical fertilizer produced in white round prill form containing 46% nitrogen. It is 100% water soluble and is suitable for any type of soil or crop. It can be applied through sowing, broadcasting or spraying. Ujjwala urea should be applied to different crops in two to three split doses.
Biola (PSB)

This multifaceted bio-fertilizer solublizes the fixed phosphorus in the soil and makes it available to the crops. Bacteria multiply very fast in the soil and this helps to improve the texture and structure of the soil. This also helps to enhance the growth of the crops and also induces resistance against various pests and diseases.
Microla (Micronutrients)

Over a period of years, we have been cultivating different crops in the field which has resulted in the depletion of essential micro-nutrients in the soil. This has in turn affected the productivity of the soil. This fact has also been validated in the soil analysis reports drawn over a period of time indicating that the micronutrients in the soils are on the decline, resulting in lowering the quality and yields of the crops.
Sujala 19:19:19

Rashtriya Chemicals & Fertilizers Ltd, manufactures 100% water soluble fertilizers containing all the three major plant nutrients i.e. Nitrogen, Phosphorus and Potash for crops grown in green houses as well as other field crops. Sujala is available in two forms Foliar grade and drip grade.

Farmers Training
The adoption of Agricultural technology for increasing crop yield and land productivity is greatly facilitated by training and adequate dissemination of knowledge. RCF sought to bridge the gap between Research Scientist and the farmer by by setting up dedicated training facilities at Nagpur and Thal. The programmes are designed to cover both general aspects as well as region specific aspects of farming technology. In addition, means of supplementing farm income through subsidiary occupation as well as the upcoming technologies of food processing are also discussed. These institutes are equipped with the latest audio-visual aids, classrooms and also hostels providing residential accommodation to the farmers.

Soil Testing Services

Soil testing helps diagnose soil health and evolve soil specific and crop specific solutions. It helps to identify problematic soils, their nutritional status, texture and structure. Based on the analysis, farmers are advised on soil fertility management through rational use of manure, fertilizers and amendments to make agriculture more productive and sustainable. Soil testing becomes indispensable to assure national food security, nutritional security, maintenance of soil health, enhancement of soil fertility and to leave a good heritage for the future generations. Recognizing this paramount need, RCF has established six static soil testing laboratories since 1967 and three mobile testing vans. Soil testing reports(or Soil Health Cards) are mailed directly to farmers after analysis. This enables farmers to make informed decisions about soil health management and maintenance depending on the crop to be sown. Soil testing reports(or Soil Health Cards) are mailed directly to farmers after analysis. This enables farmers to make informed decisions about soil health management and maintenance depending on the crop to be sown. This service is rendered free of cost to farmers.

Executive Summary Rashtriya Chemicals & Fertilizers Ltd. Rs. Crore (Non-Annualised) Total income Sales Income from financial services Total expenses Raw material expenses Power, fuel & water charges Compensation to employees Indirect taxes Selling & distribution expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises PBDITA PBDTA PBT PAT Net worth Paid up equity capital (net of forfeited capital) Reserves & surplus Total borrowings Current liabilities & provisions Total assets Gross fixed assets Net fixed assets Investments Current assets Loans & advances Growth (% ) Total income Total expenses PBDITA PAT Net worth Total assets Profitability ratios (% ) PBDITA Net of P&E/Total income net of P&E PAT Net of P&E/Total income net of P&E PAT Net of P&E/Avg. net worth PAT/Avg. net worth PAT Net of P&E/Avg. total assets PAT/Avg. total assets Liquidity ratios (times) Current ratio Debt to equity ratio Interest cover Debtors (days) Creditors (days) Efficiency ratios (times) Total income / Avg. total assets Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 12 mths 12 mths 12 mths 12 mths 12 mths 3212.23 3129.55 31.7 3031.33 1041.23 908.54 167.61 60.79 277.4 0 0 301.37 284.2 215.67 147.96 1366.1 551.69 814.41 437.24 685.89 2682.57 2637 1079.99 0.17 1534.13 14.31 3662.33 3592.67 27.99 3854.16 1192.66 1178.64 188.2 76.44 314.1 0 0 369.08 316.88 241.46 148.74 1450.3 551.69 898.61 955.23 628.47 3250.91 2750.53 1135.29 0.17 2052.61 9.92 5354.83 5266.58 27.09 5326.63 1285.9 1312.08 238.26 95.17 564.51 0 0 397.71 330.85 247.67 158.15 1538.91 551.69 987.22 1241.94 866.81 3870.95 2862.09 1168.82 359.69 2276.41 7.3 8574.71 8487.92 46.77 7978.38 1860.2 1432.47 395.2 93.76 632.35 0 0 527.66 412.33 325.7 211.58 1673.04 551.69 1121.35 1430.06 1916.17 5239.42 3075.94 1313.74 670.18 3163.91 19.53 6015.54 5733.05 159.04 5688.24 1615.91 575.42 383.09 60.33 598.39 0 0 526.85 452.16 346.6 234.87 1837.14 551.69 1285.45 1334.71 1542.45 4934.25 3249.9 1382.76 628.36 2833.14 33.78

9.99017281 9.27925362 3.4285126 4.96594779 7.08499158 14.9516851

14.0120726 27.1441908 22.4673989 0.52716951 6.30187293 21.1863996

46.2137492 38.2046931 7.75712583 6.32647573 6.22400332 19.0728135

60.130387 49.7828834 32.6745619 33.7843819 8.78377499 35.3523037

-29.8455575 -28.7043234 -0.15350794 11.0076567 9.84920056 -5.82449966

9.15405816 4.36032523 10.5426989 11.1788572 5.56355184 5.89926279

9.73181149 3.6877635 9.54693936 10.5624201 4.53157338 5.01358393

7.13010539 2.63773769 9.41118222 10.5813911 3.95009169 4.44125551

6.09199334 2.40226744 12.8140226 13.1745513 4.51770894 4.64481684

6.99937135 2.05184079 6.89936129 13.3822197 2.38045858 4.61721286

1.77674446 0.3211458 13.0704718 76.2516496 62.0717617

1.55949704 0.66000829 5.35172414 85.8600915 41.8912156

1.23227036 0.8078289 4.44271612 72.794095 42.2645044

1.02844224 0.85508425 3.7738663 64.700386 79.8176659

1.14669991 0.72651513 4.11715089 86.4312844 89.8792742

1.28437825

1.23604595

1.50473

1.88285088

1.18264237

Income & expenditure Rashtriya Chemicals & Fertilizers Ltd. Rs. Crore (Non-Annualised) Total income Sales Industrial sales Income from non-financial services Income from financial services Interest Dividends Treasury operations Other income Prior period income & extraordinary income Change in stock Total expenses Raw material expenses Packaging expenses Purchase of finished goods Power, fuel & water charges Compensation to employees Indirect taxes Royalties, technical know-how fees, etc. Lease rent & other rent Repairs & maintenance Insurance premium paid Outsourced mfg. jobs (incl. job works, etc.) Outsourced professional jobs Directors' fees Selling & distribution expenses Travel expenses Communication expenses Printing & stationery expenses Miscellaneous expenses Other operational exp. of indl. enterprises Other oper. exp. of non-fin. service enterprises Share of loss in subsidiaries/JVs,etc. Lease equalisation adjustment Loss on securitisation of assets/loans Fee based financial service expenses Treasury operations expenses Total provisions Write-offs Less: Expenses capitalised Less: DRE & expenses charged to others Prior period & extraordinary expenses Interest paid Financial charges on instruments Expenses incurred on raising deposits/debts Depreciation Amortisation Provision for direct taxes PAT PBDITA PBDTA PBT Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 12 mths 12 mths 12 mths 12 mths 12 mths 3212.23 3129.55 2992.99 136.56 31.7 15.62 0.04 4.75 38.97 12.01 -32.94 3031.33 1041.23 62.84 218.94 908.54 167.61 60.79 0 20.11 60.95 7.08 0 0.15 0 277.4 0 0 0 44.87 0 0 0 0 0 0 2.84 7.46 2.31 7.81 0.98 3.59 17.17 0 0 68.53 0 67.71 147.96 301.37 284.2 215.67 3662.33 3592.67 3412.86 179.81 27.99 1.29 0.05 15.36 24.91 16.76 340.57 3854.16 1192.66 69.56 478.88 1178.64 188.2 76.44 0 18.07 63.16 4.64 0 0.14 0 314.1 0 0 0 46.58 0 0 0 0 0 0 8.96 2.79 1.63 12.29 0.8 2.46 52.2 0 0 75.42 0 92.72 148.74 369.08 316.88 241.46 5354.83 5266.58 4345.79 920.79 27.09 6.93 0.06 8.81 38.93 22.23 129.95 5326.63 1285.9 108.23 1284.39 1312.08 238.26 95.17 0 24.92 76.34 6.08 0 0.19 0 564.51 0 0 0 84.37 0 0 0 0 0 0 0.5 1.64 3.26 2.35 1.16 4.74 66.86 0 0 83.18 0 89.52 158.15 397.71 330.85 247.67 8574.71 8487.92 7330 1157.92 46.77 35.74 1 0.73 31.8 8.22 -384.75 7978.38 1860.2 113.66 2740.41 1432.47 395.2 93.76 0 26.96 69.95 4.65 0 0.2 0 632.35 0 0 0 69.37 0 0 0 0 0 0 250.6 10.64 1.76 40.76 1.55 2.43 115.33 0 0 86.63 0 114.12 211.58 527.66 412.33 325.7 6015.54 5733.05 4921.08 811.97 159.04 49.74 0.73 106.09 9.44 114.01 -92.43 5688.24 1615.91 96.54 1846.09 575.42 383.09 60.33 0 10.15 73.44 4.91 0 0.22 0 598.39 0 0 0 75.09 0 0 0 0 0 0 21.98 6.58 65.95 35.64 2.42 0.23 74.69 0 0 105.56 0 111.73 234.87 526.85 452.16 346.6

Growth of Indian Fertilizer Industry

The Indian fertilizer industry has come a long way since the setting up of the manufacturing unit of Single Super phosphate (SSP) near Chennai in 1906 A new impetus to the growth of Indian Fertilizer industry was provided by the set up the two fertilizer plants- Fertilizer & Chemicals Travancore of India Ltd. (FACT) in Kerala and the Fertilizers Corporation of India (FCI) in Bihar. This was during the forties and the fifties. The aim was to create an industrial base that would provide India with self reliability in food grains. India witnessed significant growth of the fertilizer industry during the sixties and the seventies. By 2003, India had an installed capacity of 12.11 million MT of nitrogen and 5.36 million MT of phosphate. Today, with 57 large sized fertilizer plants manufacturing a wide variety of the nitrogenous, complex and phosphatic fertilizers, the Indian fertilizer industry is the 3rd largest producer in the world. One of the major factors that have led to the rapid increase in the production capacity of fertilizers in India is the policy environment. With the formulation and implementation of investor friendly policies, large investments poured into the private, public and cooperative sectors and this propelled the growth of the Indian fertilizer industry. Reports showed the total installed capacity of fertilizer production in 2004 to be 119.60 LMT of nitrogen and 53.60 LMT of phosphate. These figures went up to 120.61 LMT of nitrogen and 56.59 LMT of phosphate in 2007. The production of fertilizers was 113.54 LMT of nitrogen and 42.21 LMT of phosphate during 2005-06. The target of production for 2006-07 was set at 114.48 LMT of nitrogen and 48.20 LMT of phosphate. Though the target production was not met, there was a growth in production during 2006-07 as compared to the production during 2005-06. Indian fertilizer industry has reached international levels of capacity utilization by adopting various strategies for increasing the productions of fertilizers. These include the following:
Expansion and increase in efficiency through modernization and revamping of existing

fertilizer units.
Reviving some of the closed fertilizer plants.

 Using alternative sources, such as coal or liquefied natural gas for the production of

fertilizers, especially urea.

Establishing joint venture projects with companies in countries that abound in cheaper

resources of raw materials. In order to meet the demand for gas, which is one of the prime requirements for the production of nitrogenous fertilizers, India has entered into joint ventures with foreign companies in a number of countries. Joint ventures have also been established for the supply of phosphoric acid. Indian fertilizer manufacturing companies has joined hands with companies in Senegal, Oman, Jordan, Morocco, Egypt, Tunisia and other countries. It is, therefore, evident that the Indian fertilizer industry has witnessed extensive growth and development in a short span of time. With such extensive growth, it is not surprising that the India ranks among the leading fertilizer manufacturing countries of the world.

Government Policies and Indian Fertilizer Industry

Government policies and Indian fertilizer industry share a direct nexus, with pricing mechanisms, productive growth and subsidies forming the crux of the economic objectives of the government. The government policies for the fertilizer industry are devised to ensure a sustainable growth and development path in one of the most intensive sectors of the Indian economy. Growth, production and usage of the fertilizer industry are directly dependent on the government policies. Production of food grain in India derives the main stimulus for its growth from the fertilizer industry. The government has intervened time and again in determining the prices, movement and distribution of the fertilizers and its successful policies have pitted India as the third largest consumer and producer of the agro-input in the world after China and the United States. The policies pursued by the government are devised in response to the recommendations of the high-powered committees of the country. The Sivaraman Committee Report (1966) highlighted the importance of the balanced use of fertilizers along with providing adequate credit support for its distribution and usage. The committee also provided inputs for realizing the importance of liberalization of fertilizer marketing that would promote the production of the domestic companies.

The Retention Price Scheme introduced by the government followed the recommendation of the Marathe Committee that explored the possibilities of maintaining the farm gate prices of fertilizers. This would enable the government to maintain prices of the fertilizers during the time of crisis. The first decontrol policies of the government were introduced in 1992 on the recommendations of the Joint Parliamentary Committee. Phosphatic and potassic fertilizer industries were decontrolled by the government while urea industry continued to produce under subsidized rates. The complex fertilizer industries were subdivided onto two categories in 2001 after the modification of the 1998 Tariff Commission. Group I comprised of imported ammonia or industrial units using gas while Group II included industries using naphtha or fuel oil. Concessions to the naphtha based units were more than the other group as this showed lesser efficiency. Other committees provided recommendations on the methods of promotion, marketing, distribution and pricing of the fertilizers in India. Change in government policies is however often responsible for hampering new investments in the industry. Although the investment in this sector was Rs 20, 677 crore in September, 2007, most of the bottlenecked projects have not been cleared by the Department of Fertilizers. The industry will soar up new heights and create a new growth story with the clearance of the projects and the approval of the new policies. The production of phosphatic fertilizers in India is heavily dependent on imports as the country is not endowed with phosphate raw materials. The present objective of the government policies is to develop a long term program that would protect the interests of the domestic manufacturers and reduce the dependence of this industry on foreign imports. Reaching stagnancy, the health of this industry can be restored with a more realistic policy pursued by the government.

Challenges before Indian Fertilizer Industry

The growth trajectory of the Indian fertilizer industry has camouflaged the impending challenges with which it is faced. Growth and development of agriculture in India derives a significant stimulus from the fertilizer industry. Agricultural milieu in India could be jeopardized by the uncertainties in the fertilizer industry. The government is faced with the piquant situation, which demands a balance between the needs of the farmers and the fertilizer manufacturers.

The challenges before the Indian fertilizer industry relate to the incertitude in the supply of fertilizers. There has been a surge in the demand for fertilizers in the past few years. Good monsoonal showers have led to the growth in agriculture, inadvertently increasing the consumption rate of fertilizers. However, the robust growth in consumption propensity has not been met with the required surge in fertilizer production. This has widened the gap between the demand and supply of fertilizers, which has led to an increase in the dependence of the country on imports. This also reflects on the lack of realizing of the domestic capacity utilization of the reserves in the country. Another important factor that has led to the stunted growth of the fertilizer industry is the rise in prices of the feedstock. The fertilizer industry is dependent on gas for the production of urea and phosphoric acid for the production of phosphatic fertilizers and DAP. The country imports its inputs from other countries. The overseas suppliers of raw materials realize the predicament of the Indian fertilizer industry and have started exploiting the shortage through clever pricing. In recent years, some of the private companies, dedicated to the production of fertilizers have affectively taken stakes in the overseas sources of raw materials. Although this has aided the industry, it has however been unable to reduce the government's burden of subsidizing the rates. The fertilizer industry is remained protected under the umbrella of the Retention pricing scheme of the Indian government. The government has introduced policies to decontrol the prices but delayed the implementation of the parameters that have not augured in favor of the industry. As a result, fertilizer subsidies continue to mount and are expected to cross Rs. 50,000 crore in the year 2008. The pricing of the fertilizers are also dependent on the freight charges that are Baltic dry index. The small size of the older plants and the low efficiency of the public sectors also pose as drawbacks of the industry. Recent policies of the government are directed towards revamping of these industries and restoring them to health. The fertilizer industry is faced with other challenges inter alia infrastructural bottlenecks and the uncertainties in government policies. The delay in decision making and obscurity in setting parameters are among some of the major drawbacks of the government policies directed towards the industry. To retrieve the health and growth of the fertilizer industry, the government of India is in need of long term realistic policies that would enable the industry to overcome the challenges and survive the present impasse.

Concluding remarks on Indian Fertilizer Industry

The Indian fertilizer industry has helped in the growth of the Indian economy. The fertilizer sector by enhancing the agricultural productivity has in turn resulted in providing a major support to the farmers who are primarily dependent on agriculture. Fertilizers have also played a pivotal role in India's food Security. For the Indian government, food has been the primary objective owing to its huge population. In India, therefore the fertilizer industry has wielded immense influence, like no other sectors in India. To cater to the needs of the individual, government top priority has been towards production of food grain. Since the poor farmers could not afford to buy expensive fertilizing agents, the government's interventionist policy helped in providing the farmers fertilizers at a reasonable cost. The government formulated the Retention Price-Cum Subsidy scheme which has been a major impetus for the fertilizing industry since 1977 to 1992. Today, India stands as the third largest fertilizer consumer and producer of the world. It has been observed that the subsidies on Indian fertilizer have been rising at constant rate. This is due to the rise in the cost of production and the inability of the government to raise the maximum retail price of the fertilizers. The population of the country is rapidly increasing at 1.5% annually. This requires higher production of food grains. The total cropped area is only 30% of the net geographical area, which is not enough for increasing the agricultural productivity. Now, the main focus is on the improvement of the farm income, for which the fertilizer industry needs to lay more stress on the agricultural activities in the country. This will also help to improve terms between the government agencies and the fertilizer industry in India.

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