r fertilizers & chemicals travancore ltd. · 2017. 8. 23. · kochi – 683 501, kerala the...

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STAKEHOLDERS EMPOWERMENT SERVICES

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SECTOR: FERTILIZERS REPORTING DATE: 14TH AUGUST, 2017

FERTILIZERS & CHEMICALS TRAVANCORE LTD. www.fact.co.in

Fertilizers & Chemicals Travancore Ltd. NSE Code - FACT TABLE 1 - MARKET DATA (STANDALONE) (AS ON 10TH AUGUST, 2017)

Sector - Fertilizers NSE Market Price (`) 36.05 NSE Market Cap. (₹ Cr.) 2,242.10

Face Value (`) 10.00 Equity (` Cr.) 647.07

Business Group - Government of India 52 week High/Low (₹) 63.80/19.30 Net worth (₹ Cr.)* -1,424.81

Year of Incorporation - 1943 TTM P/E (TTM) N.A. Traded Volume (Shares) 52,752

TTM P/BV N.A. Traded Volume (lacs) 19.02

Registered Office: Source - Capitaline, TTM - Trailing Twelve Month, N.A - Not Applicable *As on 30th September, 2016

Eloor (Fact Town), Udyogamandal, COMPANY BACKGROUND

Kochi – 683 501, Kerala The country's oldest fertiliser plant, Fertilisers and Chemicals Travancore (FACT) which

was incorporated in 1943, has emerged as an efficient public sector unit. FACT

Udyogmandal started production of Ammonium Sulphate with an installed capacity of

10,000 MT Nitrogen. It became Kerala State PSE on 15th August, 1960 and from 21st

November, 1962 the GOI became the major shareholder. FACT diversified over the

decades from fertiliser into petrochemicals, fabrication, engineering, design and

consultation services. By setting up a new Ammonium Sulphate Plant in 1965 FACT had

completed 3rd stage of expansion.

In 1994-95, FEDO was accredited with the ISO-9001 certification. The company is

putting up a 900-tpd ammonia project at Udyogamandal. In 1995-96, the company was

awarded the Export House status based on the export of caprolactam. During the year,

its petrochemical division was awarded the ISO 9002 certification by RW TUV,

Germany.

Company Website:

www.fact.co.in

Revenue and Profit Performance

The revenue of the Company decreased from ₹ 650.90 crores

to ₹ 631.48 crores from quarter ending Sep’15 to quarter

ending Sep’16. The Company made a loss of ₹ 33.59 crores in

quarter ending Sep’16 vis-a-vis making a loss of ₹ 60.87 crores

in quarter ending Sep’15.

Source: Moneycontrol

Performance vis-à-vis Market

TABLE 2- Returns

1-m 3-m 6-m 12-m

FACT Ltd. -16.26% -64.77% -2.57% 59.16%

Nifty -0.72% 3.00% 12.56% 13.63%

Source: Capitaline

0.00

0.50

1.00

1.50

2.00

2.50

3.00

Aug 16 Oct 16 Dec 16 Feb 17 Apr 17 Jun 17

Fertilizers & Chemicals Travancore Ltd NIFTY

631.48

257.06

650.90

-33.59

-153.95

-60.87

-200

0

200

400

600

800

Sep'16 Mar'16 Sep'15

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

http://www.fact.co.in/




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TABLE 3 - FINANCIALS

(₹ Cr.) Sep’16 Mar’16 % Change

Sep ’16 vs Mar’16

Net Worth -1,424.81 -1,308.89 N.A.

Current Assets 1,249.77 1,327.79 -5.88%

Non-Current Assets 290.90 303.72 -4.22%

Total Assets 1,540.67 1,631.50 -5.57%

Investments 3.67 3.67 0.00%

Finance Cost 75.65 77.59 -2.50%

Long Term Liabilities 1,870.80 1,758.69 6.37%

Current Liabilities 1,094.68 1,181.70 -7.36%

Turnover 628.66 242.26 159.50%

Profit After Tax (PAT) -33.59 -153.95 N.A.

EPS (₹) -0.52 -2.38 N.A.

Source - Money Control/Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Auditors have not raised any qualifications in last 3 years viz. FY 2015-16, FY 2014-15 &

FY 2013-14.

However, the Statutory Auditors have drawn attention to the following matter as stated below:

Emphasis of Matter for FY 2015-16:

Auditor have drawn attention to Note No. 33 to the standalone financial statement. The Company has accumulated loss

amounting to ₹ 1,956.60 Crores and its net worth has been fully eroded, the Company has incurred a net loss during the

current and previous years. This condition indicates the existence of material uncertainty which may cast significant doubt as to

the Company’s ability to continue as a going concern. However, the financial statements of the Company have been prepared

on a going concern basis for the reasons stated in the said note.

Response Comment

Frequency of Qualifications Not Applicable

Have the Auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited financial statements? No -

TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT 2015-16)

Regulatory Norms Company

% of Independent Directors on the Board 50% 40%

% of Promoter Directors on the Board - 40%

Number of Women Directors on the Board At least 1 None

Classification of Chairman of the Board - Executive Director

Is the post of Chairman and MD/CEO held by the same person? - Yes

Average attendance of Directors in the Board meetings (%) - 97.30%

Composition of Board: As per Regulation 17(1)(b) of the Listing Regulations, 2015, the Company should have at least 50%

Independent Directors as the Chairman of the Board is an Executive Director. The Company has only 40% of Independent

Directors on the Board and hence, it does not meet the regulatory requirement.




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Board Diversity: The Company has 5 directors and all are male. The Company does not have a single woman Director on the

Board. The Company is non-compliant as per Clause 17 of the Listing Regulations, 2015 regarding the requirement of at least

one woman director on the Board.

Management Reply with regards to Board Composition/Diversity:

FACT is a Central Public Sector Undertaking. As per the Articles of Association of the Company, Government of India is the

competent authority to appoint Directors on the Board of Directors of FACT. The Company has requested the Government of

India to nominate non-official part-time Directors including Woman Director on the Board of FACT.

Government of India vide Order No. 87/08/2016-HR-1 dated 10th June, 2016 appointed Shri K.P.S. Nair, Nazreth Lane, Aluva and

Dr. S. Murali, 2, Lakshmi Nivas, Bangalore-85 as non-official part time Directors on the Board of FACT. The Company has

inducted Shri K.P.S. Nair, and Dr. S. Murali to the Audit Committee/ Nomination and Remuneration Committee and Corporate

Social Responsibility committee.

TABLE 5 - FINANCIAL RATIOS

Ratios Sep’16 Mar’16 % Change

Sep ’16 vs Mar’16

Turn

ove

r

Rat

ios

Inventory Turnover 1.33 34.11 -96.10%

Debtors Turnover 35.22 4.21 737.01%

Fixed asset Turnover 2.16 0.80 170.93%

Current Asset Turnover 0.50 0.18 175.70%

Ret

urn

Rat

ios Operating Profit Margin 9.99% -35.90% N.A.

Net Profit Margin -5.34% -63.55% N.A.

Return on Assets (ROA) N.A. N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 1.14 1.12 1.61%

Quick Ratio 0.71 1.12 -36.52%

Cash Ratio 0.69 1.07 -35.15%

Working Capital Turnover ratio N.A. N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio N.A. N.A. N.A.

Interest Coverage Ratio 0.83 N.A. N.A.

Trad

ing

Rat

ios Market Cap / Sales 2.34 5.69 -58.84%

Market Cap/ Net Worth N.A. N.A. N.A.

Market Cap/PAT N.A. N.A. N.A.

Market Cap/EBITDA 23.44 N.A. N.A.

Source - Money Control

TABLE 6 - TRADING VOLUME Jun'17 Dec'16 Jun'16

% Change

Jun’17 Vs

Dec’16 Dec’16 vs Jun’16

Trading Volume (shares) (avg. of 1 qtr) 7,28,482 75,288 1,24,089 867.59% -39.33%

Trading Volume (shares) (high in 1 qtr) 62,99,321 5,32,156 11,28,931 1,083.74% -52.86%

Trading Volume (shares) (low in 1 qtr) 17,491 8,751 20,858 99.87% -58.04%

Ratio - High/low trading volume 360.15 60.81 54.12 492.24% 12.35%

Ratio - High/average trading volume 8.65 7.07 9.10 22.34% -22.31%

Source: Capitaline


http://www.sebi.gov.in/cms/sebi_data/attachdocs/1441284401427.pdf



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TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

Jun'17 Dec'16 Jun'16 Comments

Shar

eho

ldin

g (%

)

Promoter shareholding 90.00 90.00 90.00 • No new equity shares were issued during the

period from Jun’ 16 to Jun’ 17.

• Promoter shareholding remains unchanged

during the above period.

• No other changes were observed in the

shareholding pattern during the said period.

• Promoters have not pledged/ encumbered any

shares.

Public - Institutional shareholding 8.56 8.56 8.56

Public - Others shareholding 1.44 1.44 1.44

Non-Promoter Non-Public

Shareholding 0.00 0.00 0.00

Promoter of the Company holds 90% of the equity capital. In line with the Securities Contract (Regulation) Act, 1956, and Amendment 2014,

the Promoter has to reduce their Shareholding below 75%, however, the Company had time till 21st August, 2017 to comply with the law.

Further, the Ministry of Finance vide Securities Contracts (Regulation) (Third Amendment) Rules, 2017, has further granted extension of 1

more year for PSUs, to comply with the minimum Public shareholding of 25%.

Source: NSE

MAJOR SHAREHOLDERS (AS ON 30TH JUNE, 2017)

S. No. Promoters Shareholding Public Shareholding

1 Central Government/ State

Government(s) 90%

Special National Investment Fund 8.56%

Source: NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters Promoters have not sold/bought any shares in last one year

Preferential issue to promoters No preferential issue was made to promoters in last one year

Preferential issue to others No preferential issue was made to other shareholders in last one year

GDRs issued by the Company The Company did not issue any GDRs in last one year

Issue of ESOPs/Issue of shares other

than Preferential allotment

The Company does not have any ESOP Scheme. Further, no new equity shares were

issued by the Company in last one year.

Source - Annual Report 2015-16

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1 Complex Fertilisers 85%

2 Ammonium Sulphate 10%

Source - Annual Report 2015-16


http://sesgovernance.com/pdf/SECURITIES%20CONTRACTS%20(REGULATION)%20ACT,%201956%20AMENDMENT%202014.pdf



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Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover




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Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



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𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year




8 | P A G E



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