draft offer document for shelf registration · labour cases: cfl has 4 labour cases pending against...

STRICTLY PRIVATE & CONFIDENTIAL (Not for circulation - For the specific use of the Addressee only)

INFORMATION MEMORANDUM

Registered Office: Coromandel House, 1-2-10, Sardar Patel Road, Secunderabad – 500 003

Telephone: 27842034 Fax: 27844117 Website: cfl.india.com

PRIVATE PLACEMENT OF

750 SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES OF FACE VALUE RS. 10,00,000/- EACH AGGREGATING RS. 75 CRORES

Rating ‘AA’ by CRISIL This rating indicates high degree of safety with regard to timely payment of interest and principal.

The rating is not a recommendation to buy, sell or hold securities and investors should their own decisions. The rating may be subject to revision, or withdrawal at any time by the assigning rating agency on the basis of new information.

General Risks: Investors are advised to read the Risk Factors carefully before taking an investment decision in the offering. For taking an investment decision, investors must rely on their own examination of the Issuer and the Offer including the risks involved. The Debentures have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investor is invited to the Risk Factors on page 4 of the Information Memorandum.

Issuer’s Absolute Responsibility: The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Information Memorandum contains all information with regard to the Issuer, and the Issue, which is material in the context of the Issue, that the information contained in this Information Memorandum is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document or any of such information or the expression of any such opinions or intentions misleading in any material respect.

ISSUE OPENS ON: October 22, 2003 ISSUE CLOSES ON: October 23, 2003

Registrar to the Issue

Karvy Consultants Limited, Karvy House,

46, Avenue 4, Street No.1. Banjara Hills, Hyderabad-500 034.

Note: This Information Memorandum does not constitute an offer or an invitation to subscribe to the Debentures proposed to be issued by Coromandel Fertilisers Ltd. The Information Memorandum is not intended to form the basis for the evaluation for the potential investors to whom it is addressed and who are willing and eligible to subscribe for the Debentures. Potential investors are required to make their own independent evaluation and judgement before making the investment. The contents of this Information Memorandum are intended to be used by the persons to whom it is distributed. It is not intended for distribution to any person and should not be reproduced by the recipient Dated 21-10-2003

Table Of Contents

ABBREVIATIONS USED ..............................................................................................................................3 RISK FACTORS ...............................................................................................................................................4

INTERNAL FACTORS:.............................................................................................................. 4 EXTERNAL FACTORS:............................................................................................................. 8 GENERAL RISKS..................................................................................................................... 9

PART I: THE ISSUE......................................................................................................................................10 DISCLAIMER .................................................................................................................... 10 GENERAL INFORMATION............................................................................................. 11 TERMS OF THE ISSUE .................................................................................................... 15

PART II: COMPANY AND MANAGEMENT ...............................................................................................24 THE COMPANY................................................................................................................ 24 PROMOTERS AND THEIR BACKGROUND................................................................. 24 MANAGEMENT AND ORGANISATION....................................................................... 30 SHARE CAPITAL HISTORY OF CFL............................................................................. 34 THE PRODUCTS............................................................................................................... 35 ACQUISITION OF GODAVARI FERTILISERS AND CHEMICALS LIMITED.......... 37 FINANCIAL PERFORMANCE OF THE COMPANY .................................................... 41 MANAGEMENT DISCUSSION AND ANALYSIS......................................................... 46 FINANCIALS OF GROUP COMPANIES........................................................................ 47 AUDITOR’S REPORT ....................................................................................................... 49 RATING LETTER & RATING RATIONALE ................................................................. 50 TRUSTEE’S CONSENT LETTER .................................................................................... 51 APPLICATION FORM ...................................................................................................... 52

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ABBREVIATIONS USED AY Assessment Year Bps Basis points BSE The Stock Exchange, Mumbai CBDT Central Board of Direct Taxes CDSL Central Depository Services Ltd. CFL Coromandel Fertilisers Limited CIT(A) Commissioner of Income Tax (Appeals) CRISIL Credit Rating Information Services of India Ltd. DER Debt Equity Ratio FII Foreign Institutional Investors FY Financial Year GOI GFCL

Government of India Godavari Fertilser & Chemicals Limited

HUF Hindu Undivided Family ITAT Income tax Appellate Tribunal LIBOR London Inter Bank Offered Rate MF Mutual Fund NSDL National Securities Depository Ltd. NSE National Stock Exchange of India Ltd. OCB Overseas Corporate Body PAN/GIR Permanent Account No./General Index Registration No. RBI Reserve Bank of India SEBI Securities and Exchange Board of India SWIFT Society for Worldwide Interbank Financial Telecommunication TDS Tax Deducted at Source

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RISK FACTORS Internal Factors: (a) High exposure to imports: The Company imports most of the basic raw materials required for phosphatic

fertilizers like rock phosphate, sulphur, ammonia etc. Since raw material costs comprise about 60% of CFL’s operating income and with more than 90% of its raw materials are being imported, the Company’s profitability is vulnerable to price and currency fluctuations.

Management perception: CFL enjoys strong operating efficiencies on account of its integrated operations and superior raw material sourcing and handling facilities and its profit margins are higher than the industry average. CFL’s profitability provides a sufficient cushion against any upward trend in the international prices.

(b) Financial risk: The Company’s financial risk profile has been negatively affected by the additional Rs 1.25

billion debt raised to fund the acquisition of Godavari Fertilisers and Chemicals Limited (GFCL). Management perception: Given the absence of any major capital expenditure and that the synergy gains expected from the acquisition of Godavari Fertilisers & Chemicals Limited is expected to improve the cash flow and reduce it debt, the financial risk profile is expected to recover.

(d) Decrease in profit: The net sales of CFL dropped by 11.4% from Rs 650.60 crores in the year ended March 31, 2002 to Rs 576.25 crores in the year ended March 31, 2003. The profit after tax of the Company also declined from Rs 45.54 crores in the year ended March 31, 2002 to Rs 27.03 crores in the year ended March 31, 2003.

Management perception: The Company’s performance during the year 2002-03 is reasonably satisfactory considering the adverse seasonal conditions encountered in company’s addressable markets, resulting in a drop in the sales volume and corresponding lesser profit. The operating results for the year ended takes into account the adverse impact of the new subsidy policy enunciated by Government of India for complex fertilisers based on the recommendation of the Tariff Commission.

(c) Loss making Promoter/ Promoter group companies: The following companies belonging to the Promoter group have made losses exceeding Rs. 1 Crore in any of the last three financial years:

(Rs lakhs) Name of the Company 2002-03 2001-02 2000-01

Parry Confectionery Ltd. 47.70 (522.80) Kartik Investment Trust Ltd. (225.50) (136.10) Net Access (India) Pvt. Ltd. (107.70) (64.30) Parry Nutraceuticals Ltd. (703.50) (630.10) Confectionery Specialities Ltd. 0.90 19.70 Santhanalakshmi Investments Pvt. Ltd. 300.00 (233.60) Management perception: The performance of these companies will not affect the operations of CFL.

(e) Pending Litigations against the Company: Criminal cases: There are 15 criminal cases pending against CFL before various judicial authorities

primarily relating to Fertiliser Control Order (FCO). The cases under the Fertiliser Control Order, 1985 pertain to reported failure of the fertiliser samples taken from some of the dealer outlets of the company.

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Civil cases: There are two civil cases pending against CFL, one filed by Maheshwari Associates before Principal District Judge, Visakhapatnam for damages on cancellation of Tender for purchase of Urea Plant (amounting to Rs 20 lakhs), and the other filed by Mr. Md. Moosa before Senior Civil Judge, Visakhapatnam for damages on cancellation of contract for scrap removal (amounting to Rs 5 lakhs and for which an appeal is pending before High Court, Andhra Pradesh).

Labour cases: CFL has 4 labour cases pending against it before various courts, the amounts for which are not quantifiable.

Central Excise cases: 3 cases amounting to Rs 563 lakhs Income tax cases: 2 cases amounting to Rs 835 lakhs Sales tax cases: 1 case amounting to Rs 119 lakhs

Management perception: These cases are not expected to have any material impact on the financials / operations of the Company.

f. Outstanding litigations against the Promoter/ Promoter group companies or Defaults

Name of Company Matter Amount

(Rs. Lakhs) Tube Investments of India Ltd. (“TII”)

Civil cases: 1. Filed by Finishing Furnace Pvt. Ltd. before City Civil Court, Chandigarh. Petition for appointment of Arbitrator in arbitration proceedings initiated for settlement of claim. 2. Filed by S Bose an ex-employee of TII before Supreme Court for recovery of money. 3. Filed by David before Sub Court, Ponamalle seeking injunction regarding disputed land. 4. Filed by United Bank of India before Small Causes Court, Mumbai, for eviction of premises. 5. Impleaded by Cynosure Investments Private Ltd as a party in a petition filed by them against Das Lagerway Windturbines Ltd under Sec.397 & 398 of the Act for oppression and mismanagement before Company Law Board. (Das Lagerway Windturbines Ltd is a company which has provided some services to TII in connection with setting up a windfarm)

8.64

2.07

N.A.

N.A.

N.A.

Labour cases: Total of 11 cases pending before various courts, amounts are not quantifiable. N.A.

Income Tax cases: 3 cases wherein appeals are pending before Tribunal

25.45

Carborundum Universal Ltd. (“CUMI”)

Criminal case: One case filed by Apprentice Advisor / Inspector before Civil Court, Dwarka regarding non-fulfilment of Apprentice Act, filling of vacancies as per allotment decided by the Apprentice Advisor

N.A.

Civil Cases: 1. Filed by Millstock & Co before MRTPC Commission, New Delhi, challenging termination of dealership. 2. Filed by Manisha Enterprises before Civil Judge, Jhamkhambalia, for recovery of amount payable by CUMI for some excavation work. 3. Filed by Nobeltech before Sub Court, Pathinamthitta, for appointment of Arbitrator for civil work carried out at Maniyar Hydel Project. 4. Filed by CUMI before Supreme Court challenging order of Kerala State Electricity Board (KSEB) for payment of electricity tariff at an increased rate. 5. Filed by K M Majeed and K M Abdu before Munsif

N.A.

60.00

N.A.

53.11

5

Name of Company Matter Amount (Rs. Lakhs)

Court, Eranakulam, claiming damage to certain houses during an explosion at EMD plant. 6. Filed by Paramananth Nadar before Munsif Court, Valliyur, for injunction against CUMI putting up windmill close to plaintiff’s site. The entire structure has since been moved away from the site. 7. Filed by M D Shah before Civil Court, Jamkalyanpur regarding mining matters with Ex mining Contractor. 8. Four cases wherein the suits have been filed for injunction on transfer of CUMI shares/deposits. CUMI has been made a party to the case by virtue of CUMI’s shares/ deposits being the matter under litigation.

1.50

N.A.

N.A.

N.A.

Labour cases: Total of 102 cases, comprising 2 cases where the amount under dispute aggregates Rs1.49 lakhs. In the balance cases amounts are not quantifiable.

N.A.

Central Excise cases: 19 cases pending 97.21 Income tax cases: 13 cases pending 497.28 Sales Tax cases: 28 cases pending 218.03 EID Parry (India) Ltd. (“EID”)

Labour cases: Total of 66 cases pending before various courts, amounts are not quantifiable.

N.A.

Income Tax cases: 8 Appeals pending before Tribunal/ High Court

1168.14

Sales Tax case: Penalty on delayed payment of purchase tax on sugarcane subsidy

17.13

49 Quality Control cases filed by Agriculture Development Authority relating to Farm Inputs Division. Amounts are not quantifiable

N.A.

Parry and Company Ltd. (“P&Co”)

Civil cases: 1. P&Co had filed a special summary suit against M Venkat Rao & another before City Civil Judge, Vadodara, claiming an amount of Rs85.44 lakhs. M Venkat Rao has filed a Special Civil Suit against P&Co before City Civil Judge, Panvel, claiming an amount of Rs1157 lakhs. An application has been filed for stay of proceedings of the case pending at Vadodara. 2. Filed by National Rayon Corporation Ltd. before the Registrar of Trade Marks, opposing application to proposed trade mark “Netlon”, alleging that “Netlon” is similar to NRC’s trade mark – “Natlon”. 3. Filed by Narottam Liladhar Somaiya and 6 others against Mr. Dilip and 8 others before Small Causes Court, Mumbai. P&Co has been impleaded as one of the parties. The Suit seeks to evict the teneant, P&Co from the premises at Mazagaon Dock.

1157.00

N.A.

N.A.


N.A.

Income Tax cases: 7 cases wherein appeals are pending before the Tribunal and 1 case pending before the Commissioner

49.94

Parrys Confectionery Ltd. Criminal case: Filed by Imam Agency before Judicial Magistrate, Himatnagar, for non supply of stocks against DD sent

0.72

Civil cases: 1. Filed by Vengara Petroleum Agency before Sub-judge, Triur, claiming compensation for termination of agency

1.25

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2. Filed by Shaw Kumarpal Padamsi & Co. Karad before Magistrate Court, Karad, challenging termination of agency 3. Filed by Coforma before City Civil Court, Chennai, regarding amount claimed for supply of materials 4. Filed by Distributors Association before MRTP Commission, regarding termination of distributorship 5. Filed by Vairam Marketing before Magistrate Court, Coimbatore, seeking injunction against termination of dealership and reinstatement

2.33

5.60

N.A.

N.A.

Labour cases: Total of 19 cases, comprising 10 cases where the amount under dispute aggregates Rs70.50 lakhs plus arrears/ interest and balance cases amounts are not quantifiable.

N.A.

Central Excise cases: 1 case pending 20.90 Income Tax cases 233.84 Sales Tax cases: 4 cases pending 54.18 T I Diamond Chain Ltd. Filed by Board of Trustee, Mumbai Port before High Court,

Mumbai regarding dispute on demurrage 5.43


N.A.

Central Excise case regarding Modvat Credit dispute 62.55 Wendt (India) Ltd. Civil case: Filed by Bank of Tokyo before Debt Recovery

Tribunal (DRT), Mumbai, claiming amount from the Wendt - as acceptor of hundies, since the drawer has not paid the amount.

25.92

Labour cases: 13 cases pending before Labour Court, Salem and one before High Court, Chennai

N.A.

Income Tax cases: 3 cases pending 20.00 Sterling Abrasives Ltd. Labour cases: 27 cases pending before various Labour

Courts and 3 cases before ESI Court. Amounts are not quantifiable.

N.A.

Central Excise cases: 2 cases pending 0.45 Income Tax cases: 2 cases wherein amounts are not

quantifiable N.A.

Sales Tax cases: Total of 2 cases, wherein one case is not quantifiable

17.58

Cholamandalam Factoring Ltd.

An appeal pending before Supreme Court regarding reinstatement and back wages preferred by certain employees of erstwhile Cholamandalam Software Ltd. (which was merged with this company).

N.A.

Murugappa Morgan Thermal Ceramics Ltd.

Filed by Mr.Palavesa Kannu Thevar before Munsif Court, Valliyur, seeking interim injunction for the windmill land suit

0.80

Labour cases: Total of 4 cases, comprising 2 cases where the amount under dispute aggregates Rs23.10 lakhs and balance 2 cases amounts are not quantifiable.

N.A.

Customs Duty case: one case pending before Commissioner of Customs - Appeals, Chennai

7.00

Central Excise cases: 3 cases pending 5.00 Income Tax case: one case regarding refund of interest for

assessment year 1995-96 2.00

Sales Tax cases: 6 cases in respect of C forms relating to concessional rate of tax

17.80

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Southern Energy Development Corporation Ltd.

Demand notice from Chief Electrical Inspector to the Government of Tamil Nadu towards: - Electricity Tax (inclusive of additional tax) - Electricity Duty. The company has applied to Government of Tamil Nadu seeking exemption from payment of Electricity Tax (inclusive of additional tax).

287.95 15.88

Cholamanalam Investment And Finance Company Ltd.

• Civil Cases: 19 civil cases filed by customers primarily relating to injunction on selling off of vehicles, whereof amounts are not quantifiable. • Consumer Disputes: 8 consumer dispute cases aggregating Rs.10.09 lakhs and 10 other cases where amounts are not quantifiable. The cases primarily relate to seeking refunds or deficiency in services from the Company and are pending before various Consumer Forums/ Courts. • Income Tax Cases: 8 cases aggregating to Rs.143.12 lakhs, wherein appeals are pending with the Income Tax Appellate Tribunal.

Coromandel Engineering Company Ltd.

Excise duty appeals pending 23.78

Income tax cases: 1. 6 cases pending relating to investment allowance 2. Appeals filed by the Tax department against favourable order passed by CIT (Appeals), pending before Income Tax Appellate Tribunal

34.79

109.50

Sales tax cases pending 4.93 External Factors:

(a) Changes in Government policies: The Indian fertilizer industry was fully regulated by the Government till 1992 after which, the Government policy started moving towards decontrol. The players in the fertilizer industry are considerably exposed to changes/ uncertainties in the policies and an extreme case phase out of Government subsidy, which would have a significance bearing on the business risk profile of the companies.

Coromandel Fertilisers Limited is one of the least cost producers of phosphatic fertiloises in the country and is well positioned to absorb the shock of withdrawal of subsidy. Further, the acquisition of Godavari Fertilisers and Chemicals Limited has made Coromandel Fertilisers Limited the largest phosphatic fertilizer player in South India and one of the largest private players in the country. In the event of complete decontrol, as a result of the competitive cost structure, economies of scale and strong operating efficiencies enjoyed by Coromandel Fertilisers Limited, the Company will be well placed to survive in a free market, and face upto the competition. In fact the Company has been advocating for total decontrol of the industry in its true sense and allowing market prices to determine selling prices.

(b) Uncertainty of monsoons: Unfavorable monsoons would impact the agricultural sector, which in turn

would affect the fertilizer industry.

Management perception: CFL enjoys a strong marketing network in Tamil Nadu, Karnataka, Andhra Pradesh, Orissa, West Bengal, Chattisgarh and Madhya Pradesh. The Company also has developed Uttar Pradesh and Maharastra as its insurance market The wide distribution network places CFL in a relatively better position since it is less likely to be affected by the vagaries of monsoon in a few of its addresable markets.

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(c) Working capital intensity: The Indian fertilizer industry is working capital intensive, due to the delay in disbursement of subsidies by the Government.

Management Perception: The Company enjoys strong operating efficiencies on account of its integrated operations and superior raw material sourcing and handling facilities. As a result of the acquisition of GFCL, the merged entity would enjoy significant sourcing leverage as buying volumes of major raw materials would double and order sizes too would become economic. The merged entity would also benefit from marketing, distribution and collection synergies and enjoy greater leverage in terms of controlling discount levels and collecting receivables. The Phosphatic fertilsers manufactured by CFL are covered by an adhoc concession scheme operated by Department of Fertilsers, Government of India and not by the retention price scheme.

General Risks Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, the investor must rely on his/her own examination of the issuer and the issue including the risks involved. The Debentures have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document.

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PART I: THE ISSUE

Registered Office: Coromandel House, 1-2-10, Sardar Patel Road, Secunderabad – 500 003 Telephone: 27842034 Fax: 27844117 Website: cfl.india.com

DISCLAIMER

Coromandel Fertilisers Limited (“CFL”/“Company”/”Issuer”) proposes to issue 750 Secured Redeemable Non-Convertible Debentures (hereinafter referred to as “NCDs/ Debenture(s)”) of the face value of Rs 10,00,000 (Rupees Ten lakhs) each, on basis of private placement aggregating Rs. 75 crores ("the Issue"). This Debenture Issue is being made strictly on a Private Placement basis. It is not, and should not be deemed to constitute, an offer to the Public in general. It cannot be acted upon by any person other than to whom it has been specifically addressed. It is not intended to be offered to more than forty-nine persons. Multiple copies hereof, given to the same entity, shall be deemed to be offered to the same person. The information contained in the Memorandum of Private Placement is believed by CFL to be accurate in all material respects as of the date hereof. CFL does not undertake to update this Memorandum of Private Placement to reflect subsequent events. This Memorandum of Private Placement has been prepared to provide general information on CFL to potential investors engaging in transactions with CFL and it does not purport to contain all the information that any such potential investor may require. Potential Investors should conduct their own due diligence, investigation and analysis of CFL. Prior to applying for the Debentures, investors should verify if they have the necessary power and competence to apply for the Debentures under their constitutional documents as well as all relevant laws and regulations in force. They should also consult their own tax advisors on the tax implications of the acquisition, ownership and sale of Debentures, and income arising thereon. Disclaimer in respect of jurisdiction This offer of Debentures is made in India to persons resident in India on a private placement basis. This Information Memorandum does not constitute an offer to sell or an invitation to subscribe to the debentures offered herein, in any jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person, in whose possession this Information Memorandum comes, is required to inform himself about and to observe any such restrictions. General Disclaimer CFL accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisements or other material issued by or at the instance of CFL and any one placing reliance on any other source of information would be doing so at their own risk.

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GENERAL INFORMATION Target Amount This Issue is intended to raise an amount of up to Rs 75 crores. Issue Schedule The Issue will open for subscription at the commencement of business hours and close at the close of business hours on the dates indicated below:

Opening date :October 22, 2003 Closing date :October 23, 2003 Pay in date :October 27, 2003 Deemed date of Allotment :October 27, 2003

(The issue may, at the option of the Issuer, close earlier than the aforementioned closing date) Force Majeure Coromandel Fertilisers Ltd (CFL) reserves the right to withdraw the issue prior to the closing date in the event of any unforeseen development adversely affecting the economic environment. In such an event, the Issuer will refund the application money, if any, along with interest payable on such application money, if any. This Information Memorandum is issued by Coromandel Fertilisers Ltd (CFL) and is signed by its authorised signatory. Authority for the Issue This issue of Debentures is pursuant to the resolution passed under section 292 of the Companies Act, 1956, by the Board of Directors of the CFL, at its meeting held on October 21, 2003, subject to the Memorandum and Articles of Association of the CFL. The Issue is within the general borrowing limits set out in the resolution passed under section 293 (1) (d) of the Companies Act, 1956, at the Annual General Meeting of the CFL held on 4th August 2003. Eligibility of CFL to come out with the issue CFL, its directors or any of its subsidiaries have not been prohibited from accessing the market under any order or directions passed by SEBI. Terms of the Issue The Debentures will be subject to relevant statutory guidelines and regulations allotment and issue of securities from time to time by the Government of India (GoI), SEBI, and the Stock Exchanges concerned, the terms of this Information Memorandum and Application Form. Objects of the Issue/Utilisation of funds The purpose of this Issue is for raising funds for general corporate purposes including financing the acquisition of the shares of the Godavari Fertlisers & Chemicals Limited and for replacing outstanding high cost debt of the company.

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Fictitious Applications As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (1) of Section 68A of the Companies Act, 1956 which is reproduced below: Any person who -

(a) makes, in a fictitious name, an application to a body corporate for acquiring, or subscribing to, the debentures, or

(b) otherwise induces a body corporate to allot, or register any transfer of, debentures therein to them, or any other person in a fictitious name,

shall be liable for legal consequences of such action. Consents Consents in writing from the Trustees to the Debenturholders and the Registrars to the Issue to act in their respective capacities have been obtained. M/s. G.M.K. Associates, Chartered Accountants, have given their written consent to the inclusion of their report in this Information Memorandum in the form and context in which they appear herein and such consent has not been withdrawn upto the date of issue of this Information Memorandum. Minimum – Maximum Target The Issue size is Rs 75 crores. Intermediaries and auditors

a) Name and address of auditors

A.F. Ferguson & Co. 24, Krishi Nagar P.O. Manovikas Nagar, Hashmatpet Road, Secunderabad – 500 009 M/s. G.M.K. Associates 607, Raghava Ratna Towers, Chirag Ali Lane, Abids Hyderabad –500 001 b) Name and address of registrars to the issue Karvy Consultants Limited Karvy House, 46, Avenue 4, Street No.1. Banjara Hills, Hyderabad-500 034.

c) Name and address of Trustees under debenture trust deed

IL&FS Trust Company Limited IL&FS Financial Centre, Plot C-22, G Block, Bnadra-Kurla Complex, Bandra(E), Mumbai-400051

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Credit Rating The proposed Debentures have been assigned “AA” (pronounced as Double A) by CRISIL. This rating indicates high degree safety with regard to timely payment of interest and principal.

The rating is not a recommendation to buy, sell or hold securities and investors should their own decisions. The rating may be subject to revision, or withdrawal at any time by the assigning rating agency on the basis of new information.

Rating History The following is the Rating History of the credit rating assigned by CRISIL

Borrowing Program Rating Date of Rating 50 Cr - CP Program P1+ Oct 09, 2000 50 Cr - CP Program(Reaffirmed) P1+ Dec 06, 2000 70 Cr - CP Program P1+ Feb 07, 2000 70 Cr - CP Program(Reaffirmed) P1+ Apr 05, 2001 70 Cr - CP Program(Reaffirmed) P1+ Jun 01, 2001 70 Cr - CP Program(Reaffirmed) P1+ Jul 23, 2001 70 Cr - CP Program(Reaffirmed) P1+ Nov 07, 2001 70 Cr - CP Program(Reaffirmed) P1+ Jan 17, 2002 70 Cr - CP Program(Reaffirmed) P1+ Mar 13, 2002 70 Cr - CP Program(Reaffirmed) P1+ May 06, 2002 70 Cr - CP Program(Reaffirmed) P1+ Jul 01, 2002 80 Cr - CP Program P1+ Aug 14, 2002 80 Cr - CP Program(Reaffirmed) P1+ Oct 18, 2002 80 Cr - CP Program(Reaffirmed) P1+ Jan 16, 2003 80 Cr - CP Program(Reaffirmed) P1+ Jun 06, 2003 80 Cr - CP Program(Reaffirmed) P1+ Aug 05, 2003 25 Cr- NCD Program AA Jul 07, 2000 25Cr- NCD Program(Reaffirmed) AA Jul 30, 2001 50Cr- NCD Program (fresh) AA Jul 30, 2001 45Cr- NCD Program(Reaffirmed) AA Sep 15, 2003 30Cr- NCD Program(Reaffirmed) AA Sep 18, 2003 50Cr- NCD Program(fresh) AA Sep 18, 2003

Date Rating Action by CRISIL 07-Jul-03 Coromandel Fertilisers Ltd: AA rating of NCD put on RatingWatch with developing implications

and P1+ rating of CP programme reaffirmed 12-May-03 Coromandel Fertilisers Ltd : AA rating of NCD programme & P1+ rating of CP programme, both

reaffirmed 03-Feb-03 Coromandel Fertilisers Ltd : AA rating of NCD programme & P1+ rating of CP, both reaffirmed 20-Aug-02 Coromandel Fertilisers Ltd - all outstanding ratings of NCD reaffirmed, P1+ rating assigned to

enhanced CP Programme 23-Aug-01 Coromandel Fertilisers Ltd - NCD rating of AA assigned & all outstanding ratings of NCD

reaffirmed, P1+ rating of CP Programme reaffirmed 24-Feb-01 Coromandel Fertilisers Ltd - NCD rating of AA reaffirmed, P1+ assigned to enahnced CP

Programme 23-Feb-00 Coromandel Fertilisers Ltd. - AA assigned to NCD issue, P1+ reaffirmed for CP programme 26-Oct-98 Coromandel Fertilisers Ltd. - P1+ assigned for enhanced CP programme

07-Aug-98 Coromandel Fertilisers Ltd. - P1+ assigned to enhanced CP programme 19-Mar-98 Coromandel Fertilisers Ltd. - P1+ assigned to CP programme 19-Aug-97 Coromandel Fertilisers Ltd. - P1 assigned to CP programme

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Underwriting of the issue The Issue of Debentures has not been underwritten. Compliance Officer CFL has appointed a Compliance Officer for the issue whose name and address for correspondence is given below. Investors may contact the Compliance Officer at the address and telephone/Fax numbers mentioned below in case of any pre-issue / post-issue related problems.

Mr. M.R. Rajaram, Company Secretary, Coromandel Fertilisers Ltd. Coromandel House, 1-2-10, S.P. Road, Secunderabad – 500 003 Phone: 040 – 27842034 Fax : 040 – 27844117

Undertakings by the Company CFL undertakes as follows: a. that the complaints received in respect of the Issue shall be attended to by CFL expeditiously and satisfactorily b. that necessary cooperation with the credit rating agency(ies) shall be extended in providing true and adequate information till the debt obligations in respect of this NCD issuance are outstanding. c. that it shall forward the details of utilization of the funds raised through the debentures duly certified by the Chartered Accountants of the company, to the debenture trustees at the end of each half-year. d. that it shall disclose the complete name and address of the debenture trustee in the annual report. e. that it shall provide a compliance certificate to the debenture holders (on yearly basis) in respect of compliance with the terms and conditions of issue of debentures as contained in the offer document, duly certified by the debenture trustee. f. that it shall furnish a confirmation certificate that the security created by the company in favour of the debenture holders is properly maintained and is adequate enough to meet the payment obligations towards the debenture holders in the event of default.

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TERMS OF THE ISSUE Under the present issue, CFL proposes to raise a total amount of Rs 75 crores (Rupees seventy-five crores) through an issue of 750 (seven hundred and fifty) Secured Redeemable Non-Convertible Debentures of Rs 10,00,000/- (Rupees ten lakh) each. This offer of Debentures is made in India to persons resident in India on a private placement basis. The Debentures are governed by and shall be construed in accordance with the existing Indian laws. Any dispute arising thereof will be subject to the jurisdiction at the city of Secunderabad / Hyderabad. The Debentures are also governed by the Terms and Conditions to be incorporated in the Debenture certificate to be issued to the allottees, the Debenture Trust Deed / Trustee Agreement, Application Form, Memorandum and Articles of Association of the Company and the applicable laws. Minimum Investment Each Debenture has an issue price of Rs 10,00,000 (Rs ten lakhs). The minimum investment shall be 1 debenture. i.e. Rs 10,00,000 and in multiples of 1 debenture i.e. Rs 10,00,000 thereafter. Terms of Payment The full amount of issue price of the Debentures applied for should be paid along with the application. Maturity The Final Maturity of the Debentures shall be 5 years from the Deemed Date of Allotment which shall be 27th October 2008. Repayment The Debentures shall be repaid as under: a) 30% on the face value on the expiry of 4 years from the Deemed Date of Allotment, i.e., on 27th

October 2007. b) 70% on the face value on expiry of 5 years from the Deemed Date of Allotment, i.e., on 27th October

2008. Interest Rate The Debentures shall carry interest at 6.10% p.a. payable on the outstanding amount of the face value of Debentures, from the Date of Allotment (subject to deduction of tax at source at the rates prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof for which a certificate will be issued by the CFL). Payment will be made by way of cheque(s)/demand drafts/interest warrant(s), which will be despatched to the Debenture holder(s) by registered post/ speed post/ courier or hand delivery on or before the interest payment dates. Interest on Application money Interest at the Applicable Coupon Rate (subject to deduction of tax at source at the rate prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof) will be paid on the application money to the applicants. Such interest shall be paid from the date of realisation of Cheque(s)/Demand draft(s) upto but not including the Deemed Date of Allotment. The relative interest warrants along with the letters of allotment/refund orders, as the case may be, will be despatched by registered post/ speed post/ courier or hand delivery to the sole/first applicant, at the sole risk of the applicant.

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Computation of interest Interest for each of the interest periods shall be computed on the principal outstanding on the Debentures at the Interest Rate on a 365-days-a-year basis and on a 366 days a-year basis for a leap year Payment of interest The interest will be payable each year to the registered Debenture holder(s) recorded in the books of the Company and in case of joint holders, to the one whose name stands first in the Register of Debenture holder(s) on the Record Date. In the event of the Company not receiving any notice of transfer along with the original Debenture certificates by the Record Date, the transferee(s) for the Debentures shall not have any claim against the Company in respect of interest so paid to the registered Debenture holder(s). Wherever the transfer is deemed to be defective by the Company, the Company will keep all payments of remaining interest on such Debenture(s) in abeyance till such time the defects are rectified to the satisfaction of the Company. Interest period The first interest period is defined as the actual number of days starting from the Deemed Date of Allotment i.e. 27th October 2003 till 27th October 2004 (including both the first and the last date). Subsequent interest periods are defined as the actual number of days falling between 27th October, 2004 and 27th October, 2005 and so on, including the last but not the first date of each interest period till the final maturity. Tax deduction at source (TDS) Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source. For seeking TDS exemption/lower rate of TDS, relevant certificate/ document must be lodged at the registered office of the Company, at least 15 days before the interest payment becoming due (30 days in case of the last interest payment before early/ final redemption). Tax exemption certificate/declaration of non-deduction of tax at source on interest on application money, should be submitted along with the application form. Issue of Debentures in dematerialised form CFL has entered into depository arrangements with National Securities Depository Limited (NSDL) and Central Depository Services Ltd. (CDSL). Investors will have the option to hold the security in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 (as amended from time to time) CFL has signed two tripartite agreements in this connection viz. 1. Tripartite Agreement dated 24th December 1997 between CFL, National Securities Depository Limited

(NSDL) and the Registrar Karvy Consultants Limited. 2. Tripartite Agreement dated 28th January 2000 between CFL, Central Depository Services Limited (CDSL)

and the Registrar Karvy Consultants Limited. Procedure for opting for demat facility 1. Investor(s) should have / open a Beneficiary Account with any Depository Participant of NSDL or CDSL 2. Responsibility for correctness of investor’s age and other details given in the Application Form vis-à-vis

those with the investor’s Depository Participant would rest with the investors. Investors should ensure that the names of the sole/all the applicants and the order in which they appear in the application form should be same as Registered with the Investor’s Depository Participant.

3. For opting for Debentures in dematerialized form, the beneficiary account number and depository participants ID shall be specified in the relevant columns of the Application Form.

4. If incomplete/incorrect Beneficiary Account details are given in the application form or where the investor does not opt for the option to receive the Debentures in dematerialized form, the Debentures will be issued in the form of physical certificates.

5. The Debentures allotted to investor opting for dematerialized form, would be directly credited to the Beneficiary Account as given in the application form after verification. Allotment advice/refund order (if

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any) would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Debentures to the investor’s Depository Account will be provided to the investor by the investor’s Depository Participant.

6. Investors may choose to opt for part of the total number of Debentures applied for in demat form and the balance in physical form. In case of partial allotment Debentures will first be allotted in demat form and the balance if any in physical form. Separate applications in physical and dematerialized form would be considered as multiple applications and are liable to be rejected at the sole discretion of CFL.

7. Interest or other benefits with respect to the Debentures held in dematerialized form would be paid to those Debentureholders whose names appear on the list of beneficial owners given by the depositories to CFL as on the Record Date. In case, the beneficial owner is not identified by the depository on the Record Date due to any reason whatsoever, CFL shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the depository and intimated to CFL. On receiving such intimation, CFL shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.

8. Investors may please note that the Debentures in demat form can be traded only on the stock exchanges having electronic connectivity with NSDL or CDSL.

Payment at par The interest as well as redemption payments shall be made through instruments payable at par at Mumbai, Delhi, Calcutta, Chennai, Ahmedabad, Hyderabad or Bangalore at the option of the investors. Security The Debentures together with interest thereon, costs, charges, remuneration of Trustees and all other moneys payable by the Company in respect of the Debentures shall be secured by a registered mortgage on the Company’s land in Gujarat and pari passu charge on the fixed assets of the Farm Inputs Division being demerged from EID Parry (India) Ltd. and merged into the Company. These charges will be on such other terms as may be mutually decided between the Company and the Trustees, without requiring the consent of the Debenture holders. The Company will, however, maintain a minimum security cover of 1.25 times of its net fixed assets in respect of the aggregate value of the Debentures proposed to be issued through this Information Memorandum. The Security will be created by the Company as aforesaid in favour of the Trustees within three months from the actual Date of Allotment or such extended period, with permission of Trustees and such authorities, as may be applicable, but not exceeding twelve months from the Deemed Date of Allotment of Debentures. Incase the Issuer does not comply with these conditions it shall pay a penal interest of 2.00% over the Interest Rate to the Debenture holders till the time the security condition is complied to. Debenture Redemption Reserve (DRR) CFL shall, create Debenture Redemption Reserve (DRR) out of its profits and transfer to DRR suitable amounts in accordance with relevant guidelines issued from time to time and in force during the currency of the Debentures. Amendment of the Terms of the Debentures CFL may amend the terms of the Debentures at any time by a resolution passed at a meeting of the debentureholders with the consent of the debentureholders holding in the aggregate more than 50% in nominal value of the Debentures held and outstanding under the respective schemes from those present and voting. Right to Purchase/ Reissue Debentures CFL may purchase the Debentures in the open market, through market makers or otherwise. Such Debentures may be cancelled (extinguished), held, resold or reissued to any person at the discretion of CFL. Where CFL purchases Debentures, CFL shall have and shall be deemed always to have had the right to keep such Debentures alive for the purposes of resale or reissue and in exercising such right, CFL shall have and deemed

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always to have had the power to resell or reissue the same Debentures or by issuing other Debentures in lieu thereof. Future Borrowings/ Issues CFL will be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue debentures / debentures / other securities in any manner having such ranking in priority, pari passu or otherwise and change the capital structure including the issue of shares of any class, on such terms and conditions as CFL may think appropriate, without the consent of, or intimation to, the debentureholders or the Trustees. Trustee to the Debentureholders CFL has appointed IL&FS Trust Company Limited to act as Trustees to the holders of the Debentures (hereinafter referred to as ‘Trustee’). CFL and the Trustees will enter into a Trustee Agreement / Trust Deed, specifying inter-alia, the powers, authorities and obligations of CFL and the Trustee. All debentureholders shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Debentures as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the debentureholders. It is proposed that in terms of the agreement, the Trustees will endeavor to protect the interest of the debentureholders, in the event of default in regard to timely payment of interest or repayment of principal by CFL. Any payment made by CFL to the Trustees on behalf of the debentureholders shall discharge CFL pro tanto to the debentureholders. No Debentureholder shall be entitled to proceed directly against CFL unless the Trustees, having become so bound to proceed, fail to do so. The events of default under the trustee agreement are as follows: Events of default which occur and continue without being remedied for a period of 30 days after the dates on which the monies specified in (i) and (ii) below become due and will necessitate repayment before maturity are as follows: (i) Default in payment of monies due in respect of interest owing upon Debenture(s); (ii) Default in payment of any other monies including costs, charges and expenses incurred by the Trustees. Additional events of default 1. Default is committed in the performance or observance of any covenant, condition or provision contained

in the trustee agreement and/or the financial Covenants and Conditions (other than the obligation to pay principal and interest) and, except where the Trustees certify that such default is in their opinion incapable of remedy (in which case no notice shall be required), such default continues for thirty days after written notice has been given thereof by the Trustees to CFL requiring the same to be remedied.

2. Any information given by the CFL in its applications to the Debentureholders, in the reports and other information furnished by the CFL and the warranties given/ deemed to have been given by it to the Debentureholders/Trustees is misleading or incorrect in any material respect.

3. CFL is unable to or has admitted in writing its inability to pay its debt as they mature. 4. Receiver or a Liquidator has been appointed or allowed to be appointed of all or any part of the undertaking

of the CFL and such appointment is not dismissed within 60 days of appointment. 5. CFL ceases to carry on its business. Rights of Debentureholders a) The Debenture(s) shall not, except as provided in the Act, confer upon the holder(s) thereof any rights or

privileges available to the members of the CFL including the right to receive notices or Annual Reports of, or to attend and/or vote, at the General Meeting of the CFL. However, if any resolution affecting the rights attached to the Debenture(s) is to be placed before the shareholders, the said resolution will be first placed before the concerned registered debentureholder(s) for their consideration. Holder(s) of the Debenture(s) shall be entitled to a copy of the Annual Report on a specific request made to the CFL.

b) The registered debentureholder or in the case of joint-holders, the one whose name stands first in the register of debentureholder(s) shall be entitled to vote in respect of such Debenture(s), resolution(s), either in person or by proxy, at any meeting of the concerned debentureholder(s) and every such holder shall be

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entitled to one vote on a show of hands. On a poll, his/her voting rights shall be in proportion to the outstanding nominal value of Debenture(s) held by him/her on every resolution placed before such meeting of the debentureholder(s). The quorum for such meetings shall be at least five debentureholder(s) present in person.

c) The Debenture(s) are governed by and shall be construed in accordance with the existing Indian laws. Over and above such terms and conditions, the Debenture(s) shall also be subject to the other terms and conditions as may be incorporated in the Debenture Trust Deed/ Trustee Agreement/ Application Form /Debenture Certificates, Memorandum and Articles of Associtaion of the Company, guidelines, notifications and regulations relating to the issue securities from time to time by the Government of India and/or other authorities and other documents that may be executed in respect of the Debenture(s).

d) A register of debentureholder(s) will be maintained in accordance with the aforesaid provisions of the Act and all interest and principal sums becoming due and payable in respect of the Debenture(s) will be paid to the registered holder thereof for the time-being or in the case of joint-holders to the person whose name stands first.

e) The debentureholders will be entitled to their Debentures free from equities and/or cross claims by CFL against the original or any intermediate holders thereof.

f) Debentures can be rolled over only with the positive consent of the debentureholders. Role, Power and Obligations of Trustees The major clauses relating to the general rights, powers and discretions of the Trustees shall be as under. These are in addition to other powers conferred on the Trustees and provisions for its protection. a. The trustees shall not be bound to give notice to any person of the execution of the Trustee Agreement or to

see to the performance or observance of any of the obligations hereby imposed on the CFL or in any way to interfere with the conduct of the CFL's business unless and until the rights under the Debentures shall have become enforceable and the Trustees shall have determined to enforce the same.

b. Save as otherwise expressly provided in the Agreement, the Trustees shall, as regards all trusts, powers, authorities and discretions, have absolute and uncontrolled discretion as to the exercise thereof and to the mode and time of exercise thereof and in the absence of fraud shall not be responsible for any loss, costs, charges, expenses or inconvenience that may result from the exercise or non-exercise thereof and in particular they shall not be bound to act at the request or direction of the debentureholders under any provisions of these presents unless sufficient monies shall have been provided or provision to the satisfaction of the Trustees made for providing the same and the Trustees are indemnified to their satisfaction against all further costs, charges, expenses and liability which may be incurred in complying with such request or direction;

c. With a view to facilitate any dealing under any provision of these presents the Trustees shall have full power to consent (where such consent is required) to a specified transaction or class of transactions conditionally;

d. The Trustees shall not be responsible for the monies paid by applicants for the Debentures; e. The Trustees shall not be responsible for acting upon any resolution purporting to have been passed at any

meeting of the debentureholders in respect whereof minutes have been made and signed even though it may subsequently be found that there was some defect in the constitution of the meeting or the passing of the resolution or that for any reason the resolution was not valid or binding upon the Debentureholders;

f. The Trustees shall have full power to determine all questions and doubts arising in relation to any of the provisions of the trustee agreement and every such determination bonafide made (whether or not the same shall relate wholly or partially to the acts or proceedings of the Trustees) shall be conclusive and binding upon all persons interested hereunder;

g. The Trustees shall not be liable for anything whatsoever except a breach of trust knowingly and intentionally committed by the Trustees;

h. The Trustees shall not be liable for any default, omission or delay in performing or exercising any of the powers or trusts under the trustee agreement expressed or contained or any of them or in enforcing the covenants or in giving notice to any person or persons of the execution hereof or in taking any other steps which may be necessary, expedient or desirable for any loss or injury which may be occasioned by reason thereof unless the Trustees shall have been previously requested by notice in writing to perform, exercise or do any of such steps as aforesaid by the holders representing not less than three fourths of the nominal amount of the Debentures for the time being outstanding or by a Special Resolution duly passed at a meeting of the Debentureholders and the Trustees shall not be bound to perform, exercise or do any such

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acts, powers or things or to take any such steps unless and until sufficient moneys shall have been provided or provision to the satisfaction of the Trustees made for providing the same by or on behalf of the Debentureholders or some of them in order to provide for any costs, charges and expenses which the Trustees may incur or may have to pay in connection with the same and the Trustees are indemnified to their satisfaction against all further costs, charges, expenses and liabilities which may be incurred in complying with such request PROVIDED NEVERTHELESS that nothing contained in this clause shall exempt the Trustees from or indemnify them against any liability for breach of trust nor any liability which by virtue of any rule or law would otherwise attach to them in respect of any negligence, default or breach of trust which they may be guilty of in relation to their duties under the trustee agreement.

Retirement or Removal of Trustee The trustees shall not retire without other Trustees being appointed. a) The Trustees hereof may retire at any time after giving at least one month's previous notice in writing to the CFL in that behalf. b) The Trustees hereof may be removed by the Debentureholders by a Special Resolution duly passed at the meeting of the debentureholders. The CFL shall appoint such person or persons as may be nominated by such Resolution as new Trustee or Trustees hereof. c) For the purposes aforesaid, forthwith upon receipt of the notice of retirement from the Trustees for the time being hereof or on the occurrence of the vacancy in the office of the Trustee or Trustees hereof, the CFL shall convene a meeting of the debentureholders. Deemed Date of Allotment The deemed date of allotment of the Debentures will be October 27, 2003. All the benefits under the Debentures will accrue to the investor from this date even though the actual allotment may take place on a date other than the specified deemed date of allotment. Basis of Allotment The basis of allotment shall be decided by the Issuer. Letter of allotment and debenture certificate The Company will make allotment to the investors in due course after verification of the Application Form(s), the accompanying documents and on realisation of the application money. The Company will despatch the Letter(s) of Allotment to the investors within 7 days from the actual Date of Allotment. The Letter(s) of Allotment shall be exchanged for Debenture Certificates, to be issued after completion of all statutory/ legal formalities. Right to accept or reject applications CFL reserves the right to accept or reject any application in whole or in part and in either case without assigning any reason therefore. In the event the Debentures applied for are not allotted in full, the excess application money, without interest, in respect of any application will be refunded. Any application for debentures, which is not complete in all respects, may be rejected. The various reasons for rejections could be, but not limited to following: incomplete or illegible applications, number of debentures applied for less than minimum required number, no information about PAN/GIR. Mode of Refunds In case of rejection of applications or non-allotment of the Debentures, refunds will be made by cheque or by pay order drawn on any Bank payable at centres where the applications were received within 7 days from the Deemed Date of Allotment.

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Transferability of Debentures For the transfer of Debentures, the normal procedure applicable for dematerialized securities shall be followed. The seller will give delivery instructions containing details of the buyer’s DP account to his Depository Participant. Registration of Transfer The necessary transfers will be effected by the depository, NSDL/CDSL. The concerned depositories shall inform the Registrars about the rightful owners of the debentures for payment of interest and principal amount. Record date The Record Date for interest payments will be 15 days prior to each interest payment date(s) except the last interest payment before early/ final redemption. In case of early or final redemption of principal and the last interest payment before early/ final redemption, the record date will be 30 days prior to the date of early/ final redemption. Payment to Registered Debentureholders In case of transfer of debentures, the transferee is required to register his/her name with CFL or Registrars to the Issue as interest payments or redemption amount on the Debentures are paid or credited only to Registered debentureholders. Interest payments will be made by way of post-dated warrants sent in advance. Transferees should register transfers with CFL or Registrars to the Issue at least one month prior to the date on which the interest is due. If the request for registration of transfer is not received by CFL or the Registrars to the Issue before the record date, payments shall be made to the Registered Debentureholders (as on the record date) and claims, if any, shall be inter-se among the parties and shall not be against CFL. Registration in the event of Redemption of Debenture The Debentureholder must get his name registered with CFL if he/she decides to exercise early exit or redemption option. The Debentures will be redeemed only on the surrender of the duly discharged Debenture certificates by Registered Debentureholders. The record date in such instances will be one month prior to the deemed date of encashment/redemption. Investors may note that this is necessary as the Debentures are transferable by endorsement and delivery. However, CFL shall be deemed to have a right to dispense with the requirement of surrender of Debenture certificates for redemption, at its sole discretion. CFL shall exercise the option to dispense with the requirement of surrender of debenture certificates after giving a public notice through one English and one Hindi National daily at least 15 days prior to the record date. In case of such dispensation, CFL shall be discharged of its liability if the redemption proceeds are remitted to the Debentureholders appearing in its register of debenture holders as on the record date. Register of debentureholders The Company shall maintain a Register of debenture holders containing necessary particulars at its Registered Office. Investor Relations and Grievance Redressal Arrangements have been made to redress investor grievances expeditiously. All grievances related to the Issue quoting the Application Number (including prefix), number of Debentures applied for, amount paid on application and Bank and Branch / CFL Collection Centre where the Application was submitted, may be addressed to the Registrars at the following address.

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Notices The notices to the Debenture holder(s) required to be given by the Company shall be deemed to have been given if sent by ordinary post to the sole/first allottee or sole/first registered holder of the Debentures, as the case may be. All notices to be given by the Debenture holder(s) shall be sent by registered post or by hand delivery to the Registered Office of the Company or to such persons at such address as may be notified by the Company from time to time. All transfer related documents, tax exemption certificates, intimation for loss of Letter of Allotment/ Debenture(s) etc., requests for issue of duplicate debentures, interest warrants etc. and/ or any other notices/ correspondence by the Debentureholder(s) to the Company with regard to the proposed issue should be sent by Registered Post or by hand delivery at the Registered Office of the Company at Coromandel Fertilisers Ltd, Coromandel House, 1-2-10, S.P. Road, Secunderabad – 500 003 or to such persons at such persons at such address as may be notified by the Company from time to time. Interest warrants, principal repayments and refund orders will be despatched by registered post/ speed post or hand delivery to sole/ first applicant, at the sole risk of the applicant/ Debentureholder. The Company shall be fully discharged of its obligations once payments are effected as stated above and the Company shall not be held responsible for non-delivery, delayed delivery, misdelivery or loss in transit. The Company shall despatch notices, transfer documents and any other document by post or hand delivery to sole/ first applicant, at the sole risk of the applicant/ Debentureholder and shall not be held responsible for any non-delivery, delayed delivery, mis-delivery or loss in transit of any of the above documents. Any notices, transfer document and other document shall be deemed to have been served/ delivered to the Company only when they are received by the Company. Who can apply Only the persons who are specifically addressed through a communication directly are eligible to apply for the Debentures. No other person may apply. In the following paragraphs, the procedure for making applications along with enabling provisions is given. However, the applicants should verify independently their eligibility to make an application under this issue. Application under Power of Attorney A certified true copy of the power of attorney or the relevant authority, as the case may be, alongwith the names and specimen signatures of all the authorised signatories and the tax exemption certificate/ document, if any, must be lodged with the completed application form. Further modifications/ additions in the power of attorney or authority should be notified to the Company at its Registered Office. Application by Commercial Banks The applications must be accompanied by certified true copies of (i) Document authorising investment, (ii) Specimen signatures of authorised signatories and (iii) Power of Attorney. Application by corporate bodies/companies/financial institutions The application must be accompanied by certified true copies of (i) Memorandum and Articles of Association/Constitution/Bye-laws (ii) Resolution authorising investment and containing operating instructions (iii) Specimen signatures of authorised signatories and (iv) Order, if any, under section 197 of the Income Tax Act, 1961 from the Assessing Officer for claiming exemption from deduction of tax at source on the interest income. Application by Mutual Funds The application must be accompanied by certified true copies of (i) SEBI Registration Certificate (ii) Resolution authorising investment and containing operating instructions and (iii) Specimen signatures of authorised signatories.

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How to apply Investors are required to send application for investing in the Debentures, to the office of the Sole Arranger. The format of the Application Form is enclosed. Applications for the Debentures must be made in the prescribed form, and must be completed in block letters in English. Application forms must be accompanied by a demand draft or a cheque, drawn or made payable in favour of “Coromandel Fertilisers Ltd” payable at the office of the Banker to the Issue. Cheques/demand drafts may be drawn on any bank including a co-operative bank, which is a member or sub-member of the Banker’s Clearing House, located at Mumbai. For detailed instructions, please see the enclosed application form. Governing Law The Debentures are governed by and shall be construed in accordance with the existing Indian laws. Any dispute arising thereof will be subject to the jurisdiction at the city of Secunderabad / Hyderabad. General Over and above the aforesaid terms and conditions, the said Debentures issued under this Information Memorandum shall also be subject to the Terms and Conditions to be incorporated in the Debenture certificate to be issued to the allottees, the Debenture Trust Deed / Trustee Agreement, Application Form, Memorandum and Articles of Association of the CFL and the applicable laws.

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PART II: COMPANY AND MANAGEMENT THE COMPANY

Coromandel Fertilisers Ltd (CFL) belongs to the south-based Murugappa group, which has diverse interests in Engineering, Food Processing, Sugar, Fertilisers, Pesticides, Building Materials, Plantations, Abrasives, Refractors and Finance. The company is engaged in the production and sale of complex fertilisers. Over 85% of the produce of CFL are marketed though group company EID Parry Ltd under the brand name ‘Gromor’. Over the years, CFL has emerged as one of the leading and least cost producers of phosphatic fertilisers. Amongst producers of Phosphatic Fertilisers, CFL enjoys the key advantage of captive phosphoric acid production vis-à-vis most other phosphatic fertiliser manufacturers who are dependent on imported phosphoric acid. After the Buy Back of 20% of CFL’s equity shares in July 1999, Murugappa Group’s holding in CFL has increased to 78.31%. In order to create focussed businesses, the Murugappa Group had embarked upon a restructuring exercise, as a part of which, the Farm Inputs Division of EID Parry (India) Ltd., a Murugappa Group company, consisting of fertilisers and pesticides businesses, is being demerged into CFL through a Scheme of Arrangement. The said Scheme has received the approval of the shareholders of both the companies concerned and is before the High Courts of Madras and Andhra Pradesh for approval. CFL had, on July 12, 2003, also acquired the 25.88% of the Equity Share Capital of Godavari Fertilisers & Chemicals Limited (GFCL), divested by the Government of Andhra Pradesh through an open bid process and acquired management control of GFCL. The process of mandatory open offer to acquire 20% shares from the public pursuant to SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, is under way. With this acquisition, CFL has positioned itself as a leading player in the phosphatic fertiliser segment in its addressable markets. PROMOTERS AND THEIR BACKGROUND

Murugappa Group

Murugappa group started 100 years ago as a small family run business in indigenous financing and today is a Rs 4200 crores USD 880 million) corporate with diversified interests in abrasives, engineering, farm inputs, confectionery, plantations, sugar, bio-products, chemicals, nutraceuticals, insurance and financial services.

The Murugappa Group is today an industry leader in many fields and enjoys a high degree of credibility in the market place. The group is also one of the first Indian corporates to begin the process of transformation from being a family owned business to a professionally run organisation. In April 2001, Mr. M V Subbiah, a family member, stepped down as chairman and handed over the reins to Mr. N S Raghavan, a non-family professional who became the non-executive chairman of the Board - a landmark in the history of family run businesses where chairmanship is handed over to a professional non-family member. Now with the appointment of Mr. P S Pai, former Vice Chairman of Wipro, as Executive Chairman, the Murugappa Group has once again reiterated its commitment to practice a high degree of corporate governance.

The group is also the first and only business group in Asia to have been awarded the ‘IMD Distinguished Family Business Award’ by the internationally famous Management Development Institute located in Lausanne, Switzerland.

Right through its one hundred years of evolution, the group has maintained transparency in all its activities and enjoys an excellent reputation for high ethical standards in whatever business it is in. Highly people oriented, the group has a workforce of nearly 20,000 satisfied employees. Traditional in values but innovative and

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modern in its outlook, the group is also known to be very environment conscious and eco friendly. Nearly half of its turnover is from agro based products. As part of its globalisation, some of the companies in the Murugappa Group have already started moving towards international accounting practices.

Highlights of some of the Murugappa Group companies are:

Carborundum Universal Ltd., is one of the first manufacturing ventures of the group. A pioneer and an industry leader in abrasives, electrominerals, refractories, and industrial ceramics, the company is also the first to have an R&D center recognised by Government of India. Ball master, ajax and jawan, some of the products of CUMI enjoy a premium and continue to be market leaders for the last four decades. EID Parry India Ltd. a group in itself has interests in sugar & bio chemicals, fertlisers and sanitaryware. Together with Coromandel Fertilzers, EID Parry is a major force in farm inputs. Development of large integrated complex with co- generation of power from bagasse and production of ethanol from spirit has made the sugar division of the company an excellent working example of the concept ‘waste to wealth’. The ‘glamourooms’ of the Parry sanitaryware is part of graceful living style. Tube Investments of India Ltd. has over 50 years of reputation as a company offering high quality engineering products & services. The company is into manufacturing of bicycles, exercisers, steel strips, tubing and auto components. Together with Cholamandalam, a sister concern in the Murugappa Group, TI is entering into the new and exciting area of General Insurance. TI Diamond Chain Ltd. is a market leader in the chain industry and makes automotive, industrial and agricultural chains. The company recently entered into a joint venture with Borg Warner of USA for the manufacture of world class silent chains and associated systems. Parrys Confectionery Ltd. has set trends in the sugar confectionery market with several successful brands like coffee bite and lacto king. It is the country’s first to launch laminated and deposited confectionery. Cholamandalam Investment & Finance Co Ltd. is a financial service conglomerate and has achieved a compound annual growth rate higher than the industry average. Cholamandalm is widening its activities by diversifying in to mutual funds and has also entered the insurance sector. Recently it has entered into a joint venture with the renowned Japanese Insurance company Mitsui Sumitomo. Cholamandalam already has a very strong presence in automobile financing. Parry Agro Industries Ltd., part of the Group’s plantation business, has many firsts to its credit. It is the first tea factory in the world to be computerized and the first CTC factory to obtain the ISO 9000 certification. The group’s presence in the tea market has been further strengthened by Kadamane estates, which has won the prestigious tea boards award for the highest yield. Alert and always on the look out for new avenues of business, the Murugappa Group has recently entered into the field of health and nutrition through Parry Nutraceuticals Ltd., manufacturers of beta carotene and spirulina, both nutritional supplements. Huecera, a ceramic colour developed by Carborundum Universal Ltd., using solgel technology is the first of its kind in the world and finds application largely in sanitaryware.

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http://www.huecera.com/

Shareholding pattern of CFL as on date is as follows :

Sl. Shareholders Category Number of Percentage No. Shares held

1 Promoters: EID Parry (India) Ltd. & its subsidiaries - E I D Parry (India) Ltd. 7427808 38.18 - Santhanalakshmi Investments Private Limited 5200000 26.73 - Parry & Co. Limited 2587803 13.30 - The Mofussil Warehouse & Trading Co. Ltd. 25 --

Other persons in the Promoter Group

- New Ambadi Investments Pvt. Ltd. 20000 0.10 - Mrs. M V Seetha Subbiah 200 -- - Mr. A. Arunachalam 1700 0.01 - Mr. V. Narayanan 1750 0.01 - Mr. A. V. Arunachalam 1750 0.01

Sub - Total 15241036 78.34

2 FII/Mutual Funds/FIs/Banks 1261025 6.48

3 Public 2953595 15.18

Total Paid up Capital 19455656 100.00

The promoter group of CFL viz. E.I.D. Parry (India) Limited, Santhanalakshmi Investment Co. Ltd., Parry & Co. Ltd., the majority shareholders (holding 78.21 % of equity shares capital of CFL) and details of the promoter companies are given below:

A. EID Parry (India) Ltd.

Date of Incorporation : 22 /09/1975 Nature of Business : The Company is a diversified company comprising of four

major business segments namely Farm Inputs, Sugar, Parryware and Bio Products.

Board of Directors : Mr. M.V. Subbiah Mr. A. Vellayan Mr. Biswajit Choudhuri Mr. S.M. Dutta Mr. L.N. Jayaraman Mr. R. S. Nanda Mr. P. Rama Babu Mr. R. A. Savoor Mr. R. Seshasayee Mr. S. Vishwanathan

The equity shares of the company are listed on the Stock Exchange, Mumbai (BSE), The National Stock Exchange of India Limited (NSE) and the Madras Stock Exchange (MSE). The shareholding pattern of the Company is as follows :

Category of Shareholder Number of Shares % of shareholding Promoters

- Indian Promoters

7269600

40.73 Institutional Investors 4717192 26.43 Others 5862911 32.84

TOTAL 17849703 100.00

26

Brief financial details of EID Parry (India) Ltd. as per the audited accounts for the past three years is as follows:

(Rs. in lacs) Profit and Loss Account

(For the year ended 31st March) 2000-01 2001-02 2002-03

Income from operations 134807.00 144905.00 128992.00 Other income 1851.00 2057.00 3184.00 Total 136658.00 146962.00 132176.00 Expenditure 121012.00 131449.00 120689.00 Profit/ (Loss) before Interest, Depreciation & Tax 15646.00 15513.00 11487.00 Interest 6585.00 5278.00 3282.00 Depreciation 4187.00 4369.00 4502.00 Profit / (Loss) Before Tax 4874.00 5866.00 3703.00 Provision for Taxation 410.00 390.00 300.00 Deferred Tax - 1993.00 720.00 Profit / (Loss) After Tax 4464.00 3483.00 2683.00

(Rs. in Lacs)

Balance Sheet (As at 31st March) 2000-01 2001-02 2002-03 Sources of funds Paid up share capital 1781.00 1784.00 1784.00 Share Capital Suspense 63.00 - - Reserves and Surplus (excluding revaluation reserves) 39118.00 35620.00 37095 Networth 40962.00 37404.00 38879.00 Revaluation Reserve 1022.00 1009 985.00 Secured loans 37022.00 23625.00 24487.00 Unsecured loans 13714.00

15482.00 8982.00

Deferred Tax Liability -- 7682.00 8402.00 Total 92720.00

85202.00 81735.00

Use of funds Net fixed assets 53120.00 51630.00 48963.00 Investments 7695.00 7689.00 7663.00 Net current assets 31751.00

25863.00 24803.00

Miscellaneous Expenses 154.00 20.00 306.00 Total 92720.00

85202.00 81735.00

Other Financial Data 2000-01 2001-02 2002-03

Dividend (%) 70 70 60 Earning Per Share (Rs.) 24.72 19.48 15.03

Return on Networth (%) 10.94 9.32 6.95

Book Value Per Share (Rs.) 228 209.00 216.00

27

The Company is not a sick industrial unit within the meaning of clause (O) of subsection (1) of the section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

B. Santhanalakshmi Investments Pvt. Ltd.

Date of Incorporation : 12/09/1983 Nature of Business : The company is engaged in investment activities Board of Directors : Mr. P. Rama Babu

Mr. S.K. Subramanian Mr. K. Balasubramanian

The company has become a subsidiary of E.I.D. Parry (India) Limited w.e.f. 31/01/2002. Brief financial details of Santhanalakshmi Investments Pvt. Ltd. as per the audited accounts for the past three years is as follows:



Income from operations 4.13 606.78 390.27 Other income -- -- -- Total 4.13 606.78 390.27 Expenditure 2.54 1.80 0.69 Profit/ (Loss) before Interest, Depreciation & Tax 1.59 604.98 Interest 235.20 304.77 231.73 Depreciation -- -- -- Profit / (Loss) Before Tax (233.61) 300.20 157.86 Provision for Taxation -- -- 12.00 Deferred Tax -- 2.00 3.00 Profit / (Loss) After Tax (233.61) 298.21 142.86

(Rs. in Lacs) Balance Sheet (As at 31st March) 2000-01 2001-02 2002-03 Sources of funds Paid up share capital 500.00 500.00 500.00 Reserves and Surplus (excluding revaluation reserves)

-- -- --

Networth 500.00 500.00 500.00 Revaluation Reserve -- -- -- Secured loans -- -- -- Unsecured loans 2961.13 2184.90 2164.83 Total 3461.13 2684.90 2664.83 Use of funds Net fixed assets -- -- -- Investments 2628.52 2212.75 2212.75 Net current assets 13.00 (47.24) (46.47) Deferred tax -- 130.00 127.00 Profit & Loss A/c 819.61 389.40 371.54 Total 3461.13 2684.90 2664.83

Other Financial Data 2000-01 2001-02 2002-03 Dividend (%) -- -- -- Earning Per Share (Rs.) -- 5.96 2.86 Return on Networth (%) -- 269.63 111.21 Book Value Per Share (Rs.) (6.39) 2.21 2.57


28

C. Parry & Co. Ltd.

Date of Incorporation : 19/06/1928 Nature of Business : The company is engaged in manufacture of polymer meshes

and trading of Acetic Acid and Citric Acid Board of Directors : Mr. A. Vellayan

Mr. M. M. Murugappan Mr. P. Rama Babu Mr. V. Ravichandran Mr. N.C. Venugopal

The equity shares of the company are not listed on any stock exchange. The company is a wholly owned subsidiary of E.I.D. Parry (India) Limited. Brief financial details of Parry & Co. Ltd. as per the audited accounts for the past three years is as follows:



Income from operations 1965.00 1706.00 1757.00 Other income 459.00 1139.00 1797.00 Total 2424.00 2845.00 3554.00 Expenditure 1937.00 2456.00 1913.00 Profit/ (Loss) before Interest, Depreciation & Tax 487.00 389.00 1641.00 Interest 114.00 89.00 62.00 Depreciation 97.00 103.00 122.00 Profit / (Loss) Before Tax 276.00 197.00 1457.00 Provision for Taxation 40.00 70.00 120.00 Deferred Tax -- (46.00) 136.00 Profit / (Loss) After Tax 236.00 173.00 1201.00

(Rs. in Lacs) Balance Sheet (As at 31st March) 2000-01 2001-02 2002-03 Sources of funds Paid up share capital 40.00 40.00 40.00 Reserves and Surplus (excluding revaluation reserves) 1346.00 1738.00 2239.00 Networth 1386.00 1778.00 2279.00 Revaluation Reserve 629 626.00 554.00 Secured loans 83.00 129.00 70.00 Unsecured loans 1067.00 1035.00 321.00 Total 3165.00 3568.00 3224.00 Use of funds Net fixed assets 1882.00 2268.00 2333.00 Investments 1583.00 2683.00 1260.00 Net current assets (300.00) (1648.00) (497.00) Deferred tax -- 265.00 128.00 Total 3165.00 3568.00 3224.00

Other Financial Data 2000-01 2001-02 2002-03 Dividend (%) -- -- 1750 Earning Per Share (Rs.) 59.00 43.25 300.25 Return on Networth (%) 17.03 9.73 52.70 Book Value Per Share (Rs.) 346.50 444.50 569.75


29

MANAGEMENT AND ORGANISATION Corporate Governance Corporate governance is administered in CFL through the Board and three major committees of the Board, i.e. the Management Committee, Audit Committee and Shareholders/ Investors Grievances Committee. However the primary responsibility of upholding high standards of corporate governance in its operations and providing necessary disclosures within the framework of legal provisions and banking conventions with commitment to enhance the shareholders’ value, lies with the Board of CFL. CFL has complied with SEBI guidelines in respect of Corporate Governance specially with respect to broad basing of Board, Constituting the Committees such as Shareholders/ Investors Grievances Committee and Audit Committee etc. The Board The general superintendence, direction and management of the affairs and business of CFL is vested in the Board of Directors which exercises all powers and does all acts and things which may be done by CFL. The Board may direct that any power exercisable by it may also be exercised by the Managing Director or Wholetime Director. The primary responsibilities of the Board include: 1. Maintaining high standards of corporate governance and compliance with various laws and regulations. 2. Shaping the policies and procedures of the Company. 3. Monitoring performance of the organization and evolving the growth strategy. Audit Committee Audit Committee presently comprises of 5 directors including 4 independent professional directors. The Audit Committee acts as an interface between the management and the statutory and internal auditors overseeing the internal audit functions. The functions of the Audit Committee are as follows: 1. To provide direction and oversee audit functions of the Company. 2. To review periodically financial statements before submission to the Board focusing primarily on:

- Any changes in accounting policies and practices. - Major accounting entries on exercise of judgement by management. - Qualification in draft audit report. - Significant adjustments arising out of credit. - The going concern assumption - Compliance of accounting standards. - Compliance with stock exchange and legal requirements concerning financial statements. - Any related party transactions i.e. transactions of CFL of material nature, with promoters or

the management, their subsidiaries or associates etc. that may have potential conflict with the interests of the bank at large.

30

3. Review with management, external and internal auditors, adequacy of internal control system. 4. Discussions with internal auditors and in house Audit Committee. 5. Review action taken on inspection reports of RBI and Statutory Auditors Report. 6. Review action taken on major findings of internal audit reports having bearing on policy, business risk, control and corporate governance. 7. To review cases of fraud and action taken. 8. Such other matters as may be delegated by the Board. Shareholder/ Investor Grievances Committee The Committee presently consists of 2 directors and is chaired by an independent director. The Committee looks into the redressal of shareholders’ and investors’ grievances mainly relating to transfer of shares/Debentures, non-receipt of annual accounts and dividend, interest etc. Board of Directors Names, address and occupation of manager, managing director and other directors (including nominee-directors, whole-time directors (giving their directorships in other companies) Name/Designation/Age Residential Address Qualification Other Directorships Dr. Bharat Ram Chairman 88 years

25 Sardar Patel Marg New Delhi 110 021

Graduate in Economics

•

with Honours

SRF Limited • SRF Polymers Limited

Mr. J Jayaraman Director 70 years

Ashwin Apartments 39/4 C P Ramasamy Road Chennai 600018

Masters Degree in Science

• • • • • •

John Crane Sealot (India) Ltd. Andhra Cements limited Oil & Natural Gas Corporation Ltd Sundaram Clayton Limited Videocon Petroleum Limited National Rayon Corporation Ltd

Mr. R S Nanda President & MD 59 years

“Sheesh Mahal” 8-2-546 Road No 7 Banjara Hills Hyderabad 500 034

Graduate in Mechanical

•

Engineering Bsc. Engg (Meh)

Parry Chemicals Limited • • • • • •

Parry Agrochem Exports Limited Parry Monsanto Seeds Pvt. Ltd Indian Potash Limited The Fertiliser Association of India EID Parry (India) Limited Prathyusha Chemicals & Fertilisers Ltd.

Mr M M Rao Director 81 years

No. 403-C, Sfs Flats Sheikh Sarai Phase I New Delhi 110 017

Masters Degree in Arts

• •

Timex Watches Limited Texas Instruments Pvt. Ltd.

31

Name/Designation/Age Residential Address Qualification Other Directorships Mr D E Udwadia Director 63 years

Express Court Dinshaw Vacha Road Mumbai 400 020

Masters Degree in Arts LL.B

• •

• • • • • • • • • • • • • • • • • • • • •

AstraZeneca Pharma India ltd R & P Management Communications Pvt Ltd

Macmillan India Ltd. ADF Foods Ltd. Bombay Burmah Trdg. Corpn. Ltd. Mahendra Hybrid Seeds Co. Pvt. Ltd. Escotel Mobile communications ltd. Eureka Forbes Ltd. Habasit lakoka Pvt. Ltd. J. M. Financial & Investment Consultancy J. M. Trustee Company Pvt. Ltd. Skanska Cementation India Limited Sundaram Clayton Limited Trumac Engineering Co. Pvt ltd. Vista Travels Pvt. Ltd. VSC International Pte. Ltd. Wyeth Lederle Ltd. J M Morgan Stanley Pvt. Ltd AztraZeneca India Private Ltd Mechanalsis (India) Limited Geoffrey manners & Co. Ltd. Avestha Gengraine Technologies Pvt ltd Taj Asia Limited, Hong Kong

Mr M V Subbiah Director 64 years

10, Boat Club Road Chennai 600 028

Studied at the University of Aston

•

And attended a Programme on Management Development At the Harvard Business School

•

• •

• • • • • • • • • •

E.I.D. parry (India) Limited M M Muthiah Research foundation Parry Confectionery Ltd Parry Confectionery Investments & Finance Co. Ltd

Parry Nutraceuticals Ltd Parry Agro Industries ltd Parry Murray & Co. Ltd Triveni Engineering & Industries ltd. Lakshmi Machine Works Ltd ICI India Ltd Confectionery Specialities Ltd Chennai Willingdon Corporate Foundation Chennai Heritage (Sec. 25 Co.) SRF Ltd

32

Name/Designation/Age Residential Address Qualification Other Directorships Mr A Vellayan Wholetime Director 50 years

5, Ambadi Road Kotturpuram, Chennai 600 085

Diploma in Industrial Administration, UK and Masters in Business Studies, UK

• • • • • • •

• • • • •

•

Laserwords Pvt. Ltd Parry Engineering & Exports Ltd. Ambadi Enterprises Ltd. Parry Murray & Co. Ltd. UK EID Parry (India) Ltd. Bundy India ltd. The Mofussil Warehouse & Trading Co.Ltd.

Indfrag Biosciences Ltd. Parry & Co. Ltd. Kanoria Chemicals & Industries Ltd. The Fertilizer Association of India Cholamandalam Investment & Finance Co.

AMM Educational Foundation

M K Tandon Director 61 years

Flat No 205, Challenger Tower 4 Thakur Village Samta Nagar Kandivali (East) Mumbai –400 101

Masters Degree in Commerce and Degree in Law

• • •

Saw Pipes Ltd Atul Ltd GIC Housing Finance Ltd

Key Managerial Personnel Overall control vests with the Board of Directors. Day to day affairs are managed by the Managing Director, Vice President (Finance & Administration), and General Managers (Maufacturing, Marketing and Commercial), who are assisted by professional managers in different functional areas. Mr R S Nanda, took over as President and Managing Director in 1993. Finance is headed by Mr P Nagarajan as Vice President. He is assisted by Mr R.V.V. Satyanarayana, .Dy. General Manager – Finance.

Name, age and Qualification

Designation and nature of duties Date of commencement of employment

Experience in years

P Nagarajan, 52 B.Com., BGL. A.C.A.

Chief Financial Officer 09.06.97 28

R S Nanda, 59 B.Sc. Engg. (Mech.)

President and Managing Director 27.04.92 37

A Vellayan, 50 B.Com, Dip. in Ind. Admin (UK) Masters in Business Studies(UK)

Wholetime Director 01.11.99 27

33

SHARE CAPITAL HISTORY OF CFL

List of Top 10 Shareholders Name No. of Shares

1 EID Parry (I) Ltd 74278082 Santanalakshmi Investments Ltd. 52000003 Parry & Co. 25878034 New India Assurance Co. Ltd. 2291225 Life Insurance Corpn. Of India Ltd 2267926 Oriental Insurance Co. Ltd. 1809347 P.V.G.Raju 1419088 United India Insurance Co. Ltd. 1385499 Dunbridge Investments Ltd. 136169

10 Jhujhunwala R. Radheshyam 135900 Stock Market Data The Shares of Coromandel Fertilser Limited is listed on the National Stock Exchange (NSE) and the Mumbai Stock Exchange. The following is a snap shot of the stock price movement & the number of shares traded on the NSE.

High Stock Traded Low Stock Traded In Rs In Rs Traded

2000-2001 65.00 6454 Feb 01 37.10 605 Aug 01 2001-2002 85.20 25793 Feb 02 44.15 520 May 01 2002-2003 93.35 16153 May 02 53.55 1603 Aug 02

Apr-03 68.80 2565 60.00 500 May-03 78.00 7375 60.90 10569 Jun-03 83.95 18287 67.50 25135 Jul-03 76.80 10759 68.25 2825

Aug-03 77.75 25245 69.15 12725 Sep-03 82.05 45214 71.05 4375

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THE PRODUCTS CFL produces high analysis fertilisers like Urea Ammonium Phosphate 28:28:0, NPK 14:35:14 and NPK 10:26:26 as well as low analysis fertilisers like Ammonium Phosphate Sulphate 20:20:0. These fertilisers are sold in the market to farmers under the brand name ‘GROMOR’. The states where they are sold are Andhra Pradesh, Orissa, Chattisgarh, Madhya Pradesh, West Bengal, Karnataka, Maharashtra and UP. The brand enjoys a very strong equity and is a household name among the farming community in the above states, particularly in Andhra Pradesh and Orissa. The product ‘GROMOR’ 28:28:0 is the first and still the highest 1:1 complex fertiliser being produced in India. Brief on the Industry All India Production of fertilisers (in terms of nutrients) (‘000 MT)

Year ‘N’ Nutrient ‘P’ Nutrient

1997-98 10,083 3,076 1998-99 10,477 3,205 1999-00 10,873 3,448 2000-01 10,942 3,734

2001-02 10,690 3,836 Source : FAI Fertiliser Statistics, 2001-02 Imports of fertilisers (in terms of nutrients) (‘000 MT)

Year ‘N’ Nutrient ‘P’ Nutrient ‘K’ Nutrient

1997-98 1,071 715 1,437 1998-99 256 956 1,559 1999-00 245 1,531 1,774 2000-01 Nil 422 1,594 2001-02 101 492 1,697

Source : FAI Fertiliser Statistics, 2001-02 Exports of fertilisers (in terms of nutrients) (‘000 MT)

Year ‘N’ Nutrient ‘P’ Nutrient ‘K’ Nutrient

1997-98 7 6 -- 1998-99 -- 12 -- 1999-00 -- -- -- 2000-01 26 -- 8 2001-02 7 -- --

Source : FAI Fertiliser Statistics, 2001-02 Note : ‘N’ export is mainly urea and ‘P’ export is mainly SSP

35

All India Consumption of fertilisers (in terms of nutrients) (‘000 MT)

Year ‘N’ Nutrient ‘P’ Nutrient TOTAL

1997-98 10,902 3,914 1,372 1998-99 11,354 4,112 1,331 16,797 1999-00 11,593 4,798 1,678 18,069

10,920 4,215 1,567 16,702 2001-02 4,382 1,667 17,359

Source : FAI Fertiliser Statistics, 2001-02

(‘000 MT)

Year ‘N’ Nutrient ‘P’ Nutrient ‘K’ Nutrient TOTAL

2002-03 12,297 5,505 1,864 19,666

‘K’ Nutrient

16,188

2000-01

11,310

Demand Forecast of fertilisers (in terms of nutrients)

2003-04 12,718 5,907 1,948 20,573 2004-05 13,116 6,277 2,026 21,419 2005-06 13,514 2,646 2,104 22,264 2006-07 13,923 2,183 23,133

Source : FAI Fertiliser Statistics, 2001-02

(Ammonium Phosphate of various grades equivalent in terms of plant nutrients) a) Table showing the capacity utilisation of CFL for the previous 3 years is as below

7,027

Installed Capacity & Capacity utilisation per annum

In Metric Tonnes. Existing Capactity Utilisation as at March 31

Plant Nutrients Installed Capacity 2001 2002 2003

Nitrogen (N ) 124000 113484 124330 111777 Phosphorus Pentoxide (P O 2 5) 166000 145750 154113 150137 The capacity utilisation is lower than the installed capacity, particularly with respect to Phos acid, mainly due to change in product mix that has lower Phos acid content and

b) Table showing the estimated capacity utilisation of CFL for the future 3 years is as below

adverse seasonal conditions.

In Metric Tonnes.

Existing Installed

Capactity Utilisation as at March 31 Plant Nutrients

Capacity 2004 2005 2006 Nitrogen (N) 124000 133000 139100 142000 Phosphorus Pentoxide (P2O5) 166000 176600 189050 196600 Note : The Company has envisaged achieving stretched capacities and shift towards higher Phosphorus acid mix in future years due to which the capacity utilisation is higher in the projected years

36

ACQUISITION OF GODAVARI FERTILISERS AND CHEMICALS LIMITED A part of the issue proceeds from this issuance shall be used for financing the acquisition of shares of the Godavari Fertilisers and Chemicals Limited by the Company. A brief on the acquisition is provided below: a) Godavari Fertilisers and Chemicals Limited (‘GFCL’ or ‘Target Company’) has been jointly

promoted by the Government of Andhra Pradesh (“GOAP”) and Indian Farmers Fertiliser Co-operative Ltd. (“IFFCO”) for the manufacture of phosphatic fertilsers.

As a part of its ongoing public enterprises reforms programme, the GOAP had vide an invitation to bid dated 10/05/2003, expressed its desire to divest its entire stake of 82,80,000 equity shares of GFCL, being 25.88 % of the paid up equity share capital of GFCL ,through a competitive bid process.

b) Coromandel Fertilisers Ltd. (‘Acquirer’ or “CFL”) had expressed their interest in acquiring the

stake of GOAP in GFCL and tendered their bid in terms of the procedure prescribed, on 21/06/2003. Subsequently, CFL, having been notified as the Preferred Bidder in the bidding process has entered into a Sale and Purchase Agreement (hereinafter referred to as “SPA”) dated 12/07/2003 with the GOAP for acquisition of 82,80,000 equity shares of GFCL, being 25.88 % of the paid up equity share capital of GFCL at a price of Rs. 124/- per share being the accepted Bid Price which aggregates to Rs.102,67,20,000/-

c) Pursuant to the aforesaid SPA, CFL has paid the total purchase consideration to GOAP

on 12/7/2003 and 4 (four) nominees of CFL have been appointed as Directors of GFCL and the nominees of GOAP have resigned.

d) CFL was holding 45,63,103 equity shares of GFCL being 14.26% of the paid up equity share

capital of GFCL before entering into SPA with GOAP. Pursuant to the SPA the holding of CFL in GFCL has increased to 1,28,43,103 equity shares of Rs. 10/- each constituting 40.14% of the paid up equity share capital of GFCL.

e) Pursuant to the acquisition of the stake of GOAP. The Acquirer announced an open offer under

Regulation 10 read with Regulation 12 of the Regulations, to acquire by tender upto 64,00,000 fully paid-up equity shares of Rs.124/- each of GFCL representing 20% of the equity share capital from the remaining equity shareholders of GFCL (other than the ‘Acquirer’, PDACs and other parties to SPA) on the terms and subject to the conditions set out in this Letter of Offer, at a price of Rs. 124/- (Rupees One Hundred Twenty Four Only) per fully paid-up equity share (the “Offer Price”) payable in cash (the “Public Offer”).

A part of the issue proceeds from this issuance shall be used for financing this Public Offer Background of GFCL a) GFCL was incorporated as Private Limited Company on 17/12/1981 under the Companies Act,

1956 and was subsequently converted into Public Limited Company on 21/05/1984. GFCL has its registered office at Vani Nilayam, 50, Sebastian Road, Secunderabad- 500003, Andhra Pradesh, India. The main business of GFCL is to manufacture Phosphatic Fertilisers and in particular Di-Ammonium Phospate (DAP).

37

b) GFCL made its maiden issue to the public in May 1986. The paid-up equity share capital of GFCL comprises of 3,20,00,000 equity shares of Rs. 10/- each aggregating to Rs. 3200.00 Lacs.There are no partly paid up shares in GFCL.

c) As per the audited results for the year ended 31/03/2003, GFCL has reported a Net Loss of Rs.

1362.40 Lacs. The networth of GFCL as on 31/03/2003 is Rs. 6123.12 Lacs and the Book Value of the shares is Rs. 19.13 per share.

d) The equity shares of GFCL are listed on the Stock Exchanges at Ahmedabad, Chennai,

Hyderabad, Mumbai (BSE), National Stock Exchange (NSE) and New Delhi. The equity shares of GFCL are frequently traded on BSE and NSE in terms of explanation (i) to Regulation 20(5) of the Regulations.

e) There are no outstanding instruments in the nature of warrants / fully convertible debentures /

partly convertible debentures etc. which are convertible into equity at any later date. There are no equity shares under lock-in period. There has been no merger / demerger or spin off in the Company during the past three years.

f) The Company has been complying with the provisions of the listing agreement entered into with

the stock exchanges and is complying with the provisions of Chapter II of the SEBI (SAST) Regulations, 1997. No action punitive or otherwise has been initiated by SEBI or the Stock Exchange against the Company.

g) The composition of the Board of Directors as on the date of Public Announcement (15/07/2003)

is as follows:

Name Designation Residential Address Dr. P.L. Sanjeev Reddy Nominee Director – IDBI Indian Institute of Public Admn. Campus

Indraprastha Estate, Ring Road, New Delhi – 110002

Mr. K. Srinivasa Gowda Director M B Road, Near Water Tank, Kolar, Karnataka

Mr. U. S. Awasthi Director 49, Pocket “B”, Sheikh Sarai, Phase I, New Delhi – 110017

Mr. Rakesh Kapur Alternate to Mr. U.S. Awasthi D 2/307, Vinay Marg, Chanakyapuri, New Delhi – 110021

Mr. M.H. Avadhani Director 1-35/4, Malladi Vari St, Nazerpet, Tenali – 523 201

Mr. A. Vellayan Director 5, Ambadi Road, Kotturpuram, Chennai – 600085

Mr. R.S. Nanda Director “Sheesh Mahal”, 8-2-546, Road No. 7, Banjara Hills, Hyderabad – 500034

Mr. V. Ravichandran Director Old No. 3/New No. 5, Devadi Street, Mylapore, Chennai

Mr. P. Nagarajan Director No 24, Rukmini Devi Colony (Phase II) Opposite A O C, West Marredpally, Secunderabad – 500026

38

h) The brief audited financials of the Target Company for the past three years are as follows:


(For the year ended 31st March)

2000-01 2001-02 2002-03

Income from operations 101647.21 98073.68 73785.12 Other income 264.43 442.14 542.39 Increase/(Decrease) in stocks (3580.62) 902.53 (1792.04) Total 98331.02 99418.35 72535.47 Expenditure 96450.17 95852.12 71735.46 Profit/ (Loss) before Interest, Depreciation & Tax 1880.85 3566.23 800.01 Interest 2321.77 2459.30 2059.90 Depreciation 744.46 756.25 764.04 Profit / (Loss) Before Tax (1185.38) 350.68 (2023.93) Provision for Taxation -- 30.34 -- Deferred Tax -- 125.19 (661.53) Profit / (Loss) After Tax (1185.38) 195.15 (1362.40)

(Rs. in Lacs)

Balance Sheet (As at 31st March) 2000-01 2001-02 2002-03 Sources of funds Paid up share capital 3200.00 3200.00 3200.00 Reserves and Surplus (excluding revaluation reserves) 4761.47 4285.52 2923.12 Total 7961.47 7485.52 6123.12 Secured loans 9332.75 13777.34 19049.01 Unsecured loans 7000.00 1333.33 666.67 Total 24294.22 22596.19 25838.80 Application of funds Net fixed assets 7987.23 10244.21 9705.02 Investments 753.75 753.75 753.75 Net current assets 15553.24 12394.52 15514.79 Deferred Tax 0.00 (796.29) (134.76) Total 24294.22 22596.19 25838.80

Other Financial Data 2000-01 2001-02 2002-03

Dividend (%) -- -- -- Earnings Per Share (Rs.) -- 0.61 --

Return on Networth (%) -- 2.61 --

Book Value Per Share (Rs.) 24.88 23.39 19.13

39

i) Pre and Post- Offer equity shareholding pattern of GFCL will be as follows:

Shareholder’s category Shareholding & voting rights prior to the offer.

(A)

Shares / voting rights agreed to be acquired through SPA which

triggered off the Regulations.

(B)

Shares/voting rights to be

acquired in open offer (Assuming full acceptances)

(C)

Share holding / voting rights after the

acquisition and offer

(D)

No.

%

No.

%

No.

%

No.

%

1. Promoter Group a) Parties to the SPA b) Promoters other than (a) above (IFFCO)*

82,80,000

79,70,000

25.88

24.91

-

79,70,000

-

24.91 Sub Total 1(a + b) 1,62,50,000 50.79 79,70,000 24.91 2. Acquirer

CFL 45,63,103 14.26 82,80,000 25.88 64,00,000 20.00 1,92,43,103 60.14

3. Parties to agreement other than (1) (a)

Not applicable

4. Public (other than parties to the agreement, Acquirer and PDACs)

47,86,897

14.95 a) FIs/MFs/FIIs/ Banks, SFIs

13,600 0.04

b) Others

1,11,73,297 34.91

Sub-total 3 (a + b) 1,11,86,897 34.95 47,86,897 14.95 Total (1+2+3) 3,20,00,000 100.00 82,80,000 25.88 64,00,000 20.00 3,20,00,000 100.00

*IFFCO one of the original promoters of GFCL is eligible to tender the equity shares in this offer. In such an event the post offer shareholding pattern will change accordingly.

40

FINANCIAL PERFORMANCE OF THE COMPANY Profit & Loss Account The Table below presents the Profit and Loss Account of Coromandel Fertilisers Ltd for the Years ended March 31, 1999 to March 31, 2003. Rs. In CrsYear ended March 31 1999 2000 2001 2002 2003 Income Sales 345.34 413.60 427.46 477.52 460.15 Government Subsidies 133.77 189.99 171.33 173.08 116.10 Others 5.37 10.27 14.03 29.11 13.53 TOTAL 484.47 613.85 612.82 679.71 589.77 Expenditure Manufacturing & other expenses 386.15 508.08 506.33 546.28 514.80 Interest 18.13 19.99 21.55 17.69 12.88 Depreciation 11.36 12.27 14.55 17.24 15.60 TOTAL 415.64 540.34 542.44 581.21 543.28 Profit Before Extraordinary Item and taxation 68.83 73.51 70.38 98.50 46.49 Extraordinary item * (1.66) (1.97) - (25.42) -Profit Before Tax 67.17 71.54 70.38 73.09 46.49 Taxation - Current tax 20.30 23.50 17.50 35.00 14.85 Deferred tax - - - (7.46) 4.61 Net Profit after tax 46.87 48.04 52.88 45.54 27.03 The above figures have been rounded off to the nearest Crore. * They are: (1)write off of fixed assets at net book value(urea plant -Rs.1.66 Cr & ammonia plant-Rs.25.42 Cr) which no longer are required. (2)payment made to Tamil Nadu S T authorities for settlement of demands pertaining to erstwhile Cement Division.

Key Financial Ratios Year ended March 31 1999 2000 2001 2002 2003 Operating Profit Margin % ( PBIT / TO) 17.61 14.91 15.00 13.35 10.07 ROCE % (Return on Capital Employed) 29 29 24 25 14 Total Debt to Equity ( ratio) 0.67 0.74 0.84 0.52 0.77 Book Value per Share (Rs.) 79.37 101.56 121.57 110.46 117.98 Earnings per Share (Rs.) 19.27 22.79 27.18 23.41

13.90

Interest cost (% of Turnover) 3.74 3.26 3.52 2.6 2.18

41

Balance Sheet The Table Below presents the Summarised Balance Sheet of Coromandel Fertilisers Ltd as at March 31, 1999 to March 31, 2003 Rs. In CrsAs at March 31st 1999 2000 2001 2002 2003 I. SOURCES OF FUNDS 1. Shareholders' Funds (a) Capital 24.32 19.46 19.46 19.46 19.46 (b) Reserves & Surplus* 168.72 178.14 217.08 195.45 210.08 2. Loan Funds (a) Secured Loans 104.97 111.56 102.04 80.68 118.81 (b) Unsecured Loans 24.07 34.77 96.58 31.41 59.05 3. Deffered Tax Liability 0.00 0.00 0.00 45.60 50.21 3. Current Liabilities (a) Current Liabilities 99.82 89.19 98.43 70.94 78.75 (b) Provisions 20.41 25.13 16.43 29.64 25.39 TOTAL 442.31 458.25 550.02 473.18 561.75 II. APPLICATION OF FUNDS 1. Fixed Assets (a) Net Block* 185.36 179.35 242.51 222.34 215.06 (b) Capital Work in Progress 4.33 40.37 7.53 0.35 3.16 2. Investments 0.23 0.23 0.63 2.98 12.65 3. Current Assets, Loans & advances (a) Inventories 98.80 107.68 111.66 101.83 124.83 (b) Sundry Debtors 17.76 23.38 68.89 78.56 125.38 (c) Cash and Bank Balances 6.91 6.28 5.80 6.42 10.11 (d) Loans and Advances 128.92 100.96 113.00 60.70 70.56 TOTAL 442.31 458.25 550.02 473.18 561.75 (*) Excluding Revaluation Reserve, if any.

42

Capital Structure (As on March 31, 2003) Rs. In Crores (a) Authorised Capital Equity Capital (2,50,00,000 shares of Rs.10/- each) 25.00 (b) Issued, Subscribed & Paidup Capital (1,94,55,656 Equity Shares of Rs.10/- 19.46 each fully paid) © Reserves, Funds & Surpluses 210.08 (d) Loan funds: Secured Loans 1) Debentures 45.00 2) Banks - Cash Credit 53.81 3) Term Loans 20.00 118.81 Unsecured Loans 1) Fixed deposits 2.19 2) Short Term Loans including CPs 55.53 3) Others 1.33 59.05 (e) Present Issue through this offer document 75.00 Notes: 1. The present issue of Debentures is made under Guidelines for Issue of Debt Instruments, SEBI Guidelines

2000. 2. CFL has raised bridge loans from banks part of which shall be repaid out of the proceeds of this proposed

issue of Secured Debentures. 3. The number of shareholders of CFL as on March 31, 2003 was 5028

43

Cash Flow Statement

Rs In Lakhs.

Year ended March 31, 2003 2002 A.CASH FLOW FROM OPERATING ACTIVITIES: Net profit before tax & extraordinary items 4,648.65 9,850.45

Adjustments for:

Depreciation 1,559.83 1,724.00 (Profit)/Loss on sale of Investments - (1.52) Interest Expense 1,288.30 1,769.48 (Profit)/Loss on sale of fixed assets (0.70) 136.81 Interest Income (291.85) (1,055.44) Dividend Income (0.71) (6.01) Provisions no longer required written back (353.64) (1,487.21)

2,201.23 1,080.11 Operating profit before working capital changes: 6,849.88 10,930.56 Adjustments for: (Increase)/Decrease in Trade & Other receivables (5,668.00) 4,262.71 (Increase)/Decrease in Inventories (2,299.89) 982.84 Increase/(Decrease) in Trade Payables 1,107.98 (1,290.11) Increase/(Decrease) in Others - leave encashment (29.94) 20.56

(6,889.85) 3,976.00 Cash generated from operations: (39.97) 14906.56 Interest received 291.85 1,052.71 Direct Taxes paid (net of refunds ) (1,661.52) (1,680.71)

(1,369.67) (628.00) Cash flow before extraordinary items (1,409.64) 14,278.56

Extraordinary items - (see note below)

Net cash flow from operating activities (1,409.64) 14,278.56 B.CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets (net of adjustment for (1,124.69) (1,699.91) capital work in progress and capital advances) Sale of fixed assets 13.57 31.40 Purchase of investments-In Associates - (103.00) -Others (966.12) (3,306.30) Sale/Redemption of Investments - 3,175.26

44

Interest received - 2.73 Dividends received 0.71 6.01 Inter-corporate Deposits given - (1,050.00) Inter-corporate Deposits realised - 1,050.00 Net cash used in investing activities (2,076.53) (1,893.81) C.CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from borrowings 2,000.00 2,000.00 Repayment of borrowings (2,226.42) (2,625.33) Increase/(Decrease) in working capital finance 6,801.77 (8,026.74) Dividends paid (1,403.04) (1,724.59) Tax on Dividend - (178.60) Interest paid (1,317.55) (1,767.90)

Net cash inflow/(outflow) from financial activities 3,854.76 (12,323.16

) Net increase in cash & cash equivalents 368.59 61.59 CASH AND CASH EQUIVALENTS AT THE COMMENCEMENT 642.06 580.47 OF THE YEAR-CASH AND BANK BALANCES CASH AND CASH EQUIVALENTS AT THE END 1,010.65 642.06 OF THE YEAR -CASH AND BANK BALANCES

45

MANAGEMENT DISCUSSION AND ANALYSIS The following discussion and analysis should be read in conjunction with the CFL’s Financial Statements which appear on the foregoing pages. Results of operations for the year ended March 31, 2003 compared with the year ended March 31, 2002.

• On a year on year basis, the Company’s income declined by 13.2% to Rs.590 Cr. This reduction is primarily due to the impact of new subsidy policy for Complex Fertilisers based on Tariff Commission’s Recommendations and the reduced sales of Complex Fertilisers following the drought situation that prevailed in most parts of the addressable markets.

• Profit before tax was Rs.46.49 Cr as against Rs.73.08 Cr in the previous year 2001-02. The impact of the change in subsidy formula on the year’s profitability (before tax) was approximately Rs.25.50 Cr. Because of the drought situation in the Company’s addressable markets, sales of complex fertilizers was about 37,000 Mts lower than the previous year and this in turn, affected the profitability of the Company. These were partially offset by improved plant efficiencies, lower fixed costs and reduced interest burden.

• The Company earned Rs.3.25 Cr from sale of Ammonia Plant, which was decommissioned in the previous financial year due to economic reasons.

• The Company continues to enjoy a high credit rating (P1+ for short term and ‘AA’ for long term) and credibility in the financial market and was able to access working capital funds at very low rates of interest. These factors enabled the Company to reduce its interest liability for the year by about Rs.4.80 Cr compared to the previous financial year.

Results of operations for the year ended March 31, 2002 compared with the year ended March 31, 2001.

• The Company achieved a gross total income of Rs.680 Cr representing an increase of about 10.9% over the previous year.

• Profit before extraordinary item and taxation was Rs.98.50 Cr (previous year Rs.70.38 Cr). The Company has decided to write off the value of its ammonia plant, viz., Rs.25.42 Cr as it was found that manufacture of ammonia based on naptha is no longer a viable proposition.

• The Company has initiated measures for selling the plant and connected stores & spares and the value realized on sale will be accounted in the year of sale.

• Profit after extraordinary item and taxation for the year was Rs.45.54 Cr as compared to Rs.52.88 Cr in the previous year. The drop in profit after tax is mainly due to the write off the value of the ammonia plant and increased provision for taxation for the year. Hence, the earnings per share is lower at Rs.23.41 compared to Rs.27.18 in the previous year.

• The year under review had witnessed some improvement in the matter of settlement of subsidy dues by Government of India, especially in the second half of the year. This enabled the company to reduce its working capital. The Company also exercised strict control on the level of inventory of raw material and stores & spares.

• The Company continues to enjoy a high credit rating (P1+ for Short Term and AA for Long Term) and credibility in the financial market and was able to access working capital funds at lower rates of interest. These factors enabled the company to reduce its interest costs for the year by about Rs.4 Cr compared to the previous financial year.

Results of operations for the year ended March 31, 2001 compared with the year ended March 31, 2000

• The Company achieved a turnover of Rs.613 crores during the year, close to the previous year’s turnover of Rs.614 Cr.

• The Company also achieved excellent financials i.e., Profit before tax of Rs.70.38 and highest Profit after tax of Rs.52.88 Cr. The earnings per share also increased from Rs22.79 of last year to Rs27.18 Cr for the year.

• Through sustenance of high credit rating and increased access to Commercial Borrowing Programme, the company reduced its average cost of borrowings.

46

FINANCIALS OF GROUP COMPANIES Financials of five largest Listed Companies in the Group 1 TUBE INVESTMENTS OF INDIA LTD (TII) TII was incorporated on September 9, 1949. TII is primarily engaged in the manufacture and sale of bicycles/components, precision tubes and metal forming. The audited financial performance of TII of the last 3 years is as follows: (Rs. In lacs) As on March 31, 2003 2002 2001 Share Capital 1847 2462 2462

Reserves and Surplus (excluding revaluation reserve) 31518 34700 35798 Total Income 121261 107884 99360 Profit after Tax 4589 3627 3284 Earning per Shre (Rs.) 19.46 14.73 14.69 Book Value( Rs.) 163.46 137.55 151.69 2 EID PARRY (INDIA) LTD (EID) EID ws incorporated on 22nd September 1975. EID is primarily enganged in the manufacture and sale of farm inputs (fertilisers & pesticides), sugar, chemicals, generation of power, bio, products and sanitary ware. The audited financial performance of EID of the last 3 years is as follows: (Rs. In lacs) As on March 31, 2003 2002 2001 Share Capital 1784 1784 1844

Reserves and Surplus (excluding revaluation reserve) 37095 35620 39118 Total Income 137636 152759 136658 Profit after Tax 2683 3483 4464 Earning per Shre (Rs.) 15.03 19.48 24.72 Book Value( Rs.) 217 209 228 3 CHOLAMANDALAM INVESTMENT & FINANCE COMPANY LTD (CIFCL) CIFCL was incorporated on 17 August 1978. CIFCL is primarily enganged in the retail asset financing like auto finance products,'and finance against shares to high networth individuals through its capital market finance division.

47

The audited financial performance of CIFCL of the last 3 years is as follows: (Rs. In lacs) As on March 31, 2003 2002 2001 Share Capital 4994 1693 1693

Reserves and Surplus (excluding revaluation reserve) 15965 14092 15189 Total Income 22212 20039 11766 Profit after Tax 2814 1878 1206 Earning per Shre (Rs.) 16 11 9 Book Value( Rs.) 106 95 100 4 CARBORUMDUM UNIVERSAL LTD (CUMI) CUMI was incorporated on April 21, 1954. CUMI is primarily engaged in the manufacturing of abrasives, refractories and related products. The audited financial performance of CUMI of the last 3 years is as follows: (Rs. In lacs) As on March 31, 2003 2002 2001 Share Capital 934 934 934

Reserves and Surplus (excluding revaluation reserve) 14033 12400 12690 Total Income 31531 29309 29630 Profit after Tax 3655 2152 2320 Earning per Shre (Rs.) 39 23 21 Book Value( Rs.) 161 135 136 5 PARRY CONFECTIONERY LTD (PCL) PCL was incorporated on March 26, 1954. PCL is primarily engaged in the manufacture of confectioneries including a wide rate of tofees, boiled sweets, lozenges and eclairs. The audited financial performance of PCL of the last 3 years is as follows: (Rs. In lacs) As on March 31, 2002 2001 2000 Share Capital 377 377 377

Reserves and Surplus (excluding revaluation reserve) 4503 4518 5003 Total Income 9957 10626 10664 Profit after Tax 48 (523) (1658) Earning per Shre (Rs.) 39 23 21 Book Value( Rs.) 161 135 136

48

AUDITOR’s REPORT

49

RATING LETTER & RATING RATIONALE

50

TRUSTEE’S CONSENT LETTER

51

APPLICATION FORM

Coromandel Fertilisers Limited ‘Coromandel House’, 1-2-10, Sardar Patel Road, Secunderabad-500 003

Sr. No. Dear Sirs, We have read and understood the contents of the Information Memorandum dated 21st October 2003 for the Private Placement of Non-Convertible Debentures and apply for allotment of Debentures to us. The amount payable on application as shown below is remitted herewith. On allotment, please place our name on the Register of Debentureholders. We bind ourselves to the terms and conditions as contained in the Information Memorandum. We note that the CFL is entitled in its absolute discretion, to accept or reject this application in whole, or in part, without assigning any reason whatsoever. (PLEASE READ THE INSTRUCTIONS CAREFULLY BEFORE FILLING THIS FORM)

The application shall be for a minimum of 1(One) Debenture and in Multiples of 1(One) thereafter No. of Debentures applied for (in words) No. of Debentures applied for (in figures) Amount (Rs.) (in words) Amount (Rs.) (in figures) Date of Cheque Cheque/DemandDraft drawn on (Name of Bank & Branch) Cheque/Demand Draft No.

We are applying as (Tick (√) whichever is applicable) * 1 Commercial Bank 2 Financial Institution 3 Insurance CFL 4 Mutual Fund 5 Others Applicant Details NAME & ADDRESS of the Applicant (Post Box No. alone is not sufficient)

Tel No. Fax No. TAX DETAILS

PAN or GIR No. IT Circle/Ward/District Not Allotted

DETAILS OF BANK ACCOUNT (for incorporation in Interest warrants) Bank Name & Branch__________________________________________________________________________ Account No._______________________________ Nature of Account ___________________________________ REQUEST FOR NON CONVERTIBLE SECURED DEBENTURES (NCDs) IN ELECTRONIC FORM I/We, the undersigned, want delivery of Non Convertible Debentures of Coromandel Fertilisers Ltd, in Electronic Form. Details of my/our Beneficiary (Electronic) account are given below: Depository Name NSDL Depository Participant Name DP – ID I N Beneficiary Account Number Name of Applicant I/We understand that: (1) in case of allotment of NCDs to me/us, my/our Beneficiary Account as mentioned above would get credited to the extent of allotted NCDs; (2) In case of allotment of NCDs to me/us, if NCDs can not be credited to my/our Beneficiary Account, for any reason whatsoever, I/We will be given Physical Certificate(s); (3) if the names of applicants in this application are not identical and also in the same order with the Beneficiary Account details with the above mentioned DP, only physical certificates will be issued; (4) Applicants must ensure that the sequence of names as mentioned in the application form matches that of the Account held with the DP.

Names of the Authorised Signatories Designation Signature 1.

2.

3.

TAX STATUS PLEASE ( ) EXEMPT K NON EXEMPT K (IF EXEMPT PLEASE PROVIDE SUPPORTING DOCUMENTS FROM TAX AUTHORITIES)

4.

52

Coromandel Fertilisers Limited APPLICATION FORM ‘Coromandel House’, Sr. No. 1-2-10, Sardar Patel Road, Secunderabad-500 003

ACKNOWLEDGEMENT SLIP (To be filled in by Applicant)

Received from ___________________________________________________________________________________________ Address _________________________________________________________________an application for ________ Debentures alongwith cheque/Demand Draft No.__________________ Dated ________________ Drawn on ___________________ For Rs. ________________________ (Rupees only) (Note : Cheques and Drafts are subject to realisation)

53

INSTRUCTIONS

1. Application Forms must be completed in BLOCK LETTERS IN ENGLISH. A blank space must be left between two or more parts of the name.

2. Signatures should be made in English or in any of the Indian languages. Signatures in a language other than

English and thumb impressions must be attested by an authorised official of a bank or by a Magistrate /Notary Public under his/ her official seal.

3. Minimum application shall be for 1 Debenture (application amount Rs. 10,00,000 (Rupees Ten Lakhs).

The full face value of the Debenture has to be paid along with the application form. 4. Applications should be submitted during banking hours at the Registered Office of the CFL. The investor

can also submit the application through the office of the Sole Arranger to the Issue, mentioned in the Information Memorandum.

5. Forms must be accompanied by either a demand draft or a cheque, drawn and made payable in favour of

“Coromandel Fertilisers Ltd” and crossed “Account payee Only”. Cheques/Demand Drafts, must be drawn on any bank including a Co-operative Bank, which is a member or a sub-member of the Bankers’ Clearing House, located at Mumbai.

6. Cash, Stock Invest, Outstation cheques, Money orders or Postal orders will not be accepted. 7. The PAN/GIR No. and IT Circle/Ward/District of the Sole/First Applicant and Joint Applicant(s) should be

mentioned in the Application Form. In case neither the PAN nor GIR number has been allotted, the fact of non-allotment should be mentioned in the application form in the space provided.

8. Income-tax as applicable will be deducted at source including at the time of payment of interest on

application money. Those desirous of claiming exemption from deduction of tax at source from interest on application money are required to submit relevant tax exemption certificate or declaration as prescribed in the Income-tax Rules, 1962 along with the Application Form.

9. In order to be complete the application form needs to be accompanied by the Memorandum and Articles of

Association, Board Resolution/ Power of attorney for investment, authority for investment, delegation of powers and authority to authorised signatories in case of Limited Companies or corporate bodies. Attestation of signatures of the authorised signatories is also required. If applicable, a specific approval from income tax authorities for non deduction of tax is required (refer to Tax Deduction at Source in offer document). All documents submitted need to be in original or certified to be true by a Notary Public or CFL Secretary.

10. Investors are advised to mention their Phone and/or Fax Number in the application form. 11. The applications would be scrutinised and accepted as per the Terms and Conditions of the Private

Placement. The CFL is entitled, at its sole and absolute discretion, to accept or reject any application, in part or in full, without assigning any reason. An application, which is not complete in any aspect, is liable to be rejected.

Investors are requested to contact the offices of the Sole Arrangers as mentioned earlier for any clarifications. All future communication should be addressed to the CFL at its Registered Office at ‘Coromandel House’, 1-2-10, Sardar Patel Road, Secunderabad-500 003

54

draft offer document for shelf registration · labour cases: cfl has 4 labour cases pending against...

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