r fertilizers & chemicals travancore ltd. · 2017. 8. 23. · kochi – 683 501, kerala the...
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STAKEHOLDERS EMPOWERMENT SERVICES
1 | P A G E
SECTOR: FERTILIZERS REPORTING DATE: 14TH AUGUST, 2017
FERTILIZERS & CHEMICALS TRAVANCORE LTD. www.fact.co.in
Fertilizers & Chemicals Travancore Ltd. NSE Code - FACT TABLE 1 - MARKET DATA (STANDALONE) (AS ON 10TH AUGUST, 2017)
Sector - Fertilizers NSE Market Price (`) 36.05 NSE Market Cap. (₹ Cr.) 2,242.10
Face Value (`) 10.00 Equity (` Cr.) 647.07
Business Group - Government of India 52 week High/Low (₹) 63.80/19.30 Net worth (₹ Cr.)* -1,424.81
Year of Incorporation - 1943 TTM P/E (TTM) N.A. Traded Volume (Shares) 52,752
TTM P/BV N.A. Traded Volume (lacs) 19.02
Registered Office: Source - Capitaline, TTM - Trailing Twelve Month, N.A - Not Applicable *As on 30th September, 2016
Eloor (Fact Town), Udyogamandal, COMPANY BACKGROUND
Kochi – 683 501, Kerala The country's oldest fertiliser plant, Fertilisers and Chemicals Travancore (FACT) which
was incorporated in 1943, has emerged as an efficient public sector unit. FACT
Udyogmandal started production of Ammonium Sulphate with an installed capacity of
10,000 MT Nitrogen. It became Kerala State PSE on 15th August, 1960 and from 21st
November, 1962 the GOI became the major shareholder. FACT diversified over the
decades from fertiliser into petrochemicals, fabrication, engineering, design and
consultation services. By setting up a new Ammonium Sulphate Plant in 1965 FACT had
completed 3rd stage of expansion.
In 1994-95, FEDO was accredited with the ISO-9001 certification. The company is
putting up a 900-tpd ammonia project at Udyogamandal. In 1995-96, the company was
awarded the Export House status based on the export of caprolactam. During the year,
its petrochemical division was awarded the ISO 9002 certification by RW TUV,
Germany.
Company Website:
www.fact.co.in
Revenue and Profit Performance
The revenue of the Company decreased from ₹ 650.90 crores
to ₹ 631.48 crores from quarter ending Sep’15 to quarter
ending Sep’16. The Company made a loss of ₹ 33.59 crores in
quarter ending Sep’16 vis-a-vis making a loss of ₹ 60.87 crores
in quarter ending Sep’15.
Source: Moneycontrol
Performance vis-à-vis Market
TABLE 2- Returns
1-m 3-m 6-m 12-m
FACT Ltd. -16.26% -64.77% -2.57% 59.16%
Nifty -0.72% 3.00% 12.56% 13.63%
Source: Capitaline
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Aug 16 Oct 16 Dec 16 Feb 17 Apr 17 Jun 17
Fertilizers & Chemicals Travancore Ltd NIFTY
631.48
257.06
650.90
-33.59
-153.95
-60.87
-200
0
200
400
600
800
Sep'16 Mar'16 Sep'15
Quarterly revenue and Profit (₹ CRORE)
Revenue Profit
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SECTOR: FERTILIZERS REPORTING DATE: 14TH AUGUST, 2017
FERTILIZERS & CHEMICALS TRAVANCORE LTD. www.fact.co.in
TABLE 3 - FINANCIALS
(₹ Cr.) Sep’16 Mar’16 % Change
Sep ’16 vs Mar’16
Net Worth -1,424.81 -1,308.89 N.A.
Current Assets 1,249.77 1,327.79 -5.88%
Non-Current Assets 290.90 303.72 -4.22%
Total Assets 1,540.67 1,631.50 -5.57%
Investments 3.67 3.67 0.00%
Finance Cost 75.65 77.59 -2.50%
Long Term Liabilities 1,870.80 1,758.69 6.37%
Current Liabilities 1,094.68 1,181.70 -7.36%
Turnover 628.66 242.26 159.50%
Profit After Tax (PAT) -33.59 -153.95 N.A.
EPS (₹) -0.52 -2.38 N.A.
Source - Money Control/Stock exchange filing
AUDIT QUALIFICATIONS
Audit Qualifications in last 3 years: The Auditors have not raised any qualifications in last 3 years viz. FY 2015-16, FY 2014-15 &
FY 2013-14.
However, the Statutory Auditors have drawn attention to the following matter as stated below:
Emphasis of Matter for FY 2015-16:
Auditor have drawn attention to Note No. 33 to the standalone financial statement. The Company has accumulated loss
amounting to ₹ 1,956.60 Crores and its net worth has been fully eroded, the Company has incurred a net loss during the
current and previous years. This condition indicates the existence of material uncertainty which may cast significant doubt as to
the Company’s ability to continue as a going concern. However, the financial statements of the Company have been prepared
on a going concern basis for the reasons stated in the said note.
Response Comment
Frequency of Qualifications Not Applicable
Have the Auditors made any adverse remark in last 3 years? No -
Are the material accounts audited by the Principal Auditors? Yes -
Do the financial statements include material unaudited financial statements? No -
TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT 2015-16)
Regulatory Norms Company
% of Independent Directors on the Board 50% 40%
% of Promoter Directors on the Board - 40%
Number of Women Directors on the Board At least 1 None
Classification of Chairman of the Board - Executive Director
Is the post of Chairman and MD/CEO held by the same person? - Yes
Average attendance of Directors in the Board meetings (%) - 97.30%
Composition of Board: As per Regulation 17(1)(b) of the Listing Regulations, 2015, the Company should have at least 50%
Independent Directors as the Chairman of the Board is an Executive Director. The Company has only 40% of Independent
Directors on the Board and hence, it does not meet the regulatory requirement.
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Board Diversity: The Company has 5 directors and all are male. The Company does not have a single woman Director on the
Board. The Company is non-compliant as per Clause 17 of the Listing Regulations, 2015 regarding the requirement of at least
one woman director on the Board.
Management Reply with regards to Board Composition/Diversity:
FACT is a Central Public Sector Undertaking. As per the Articles of Association of the Company, Government of India is the
competent authority to appoint Directors on the Board of Directors of FACT. The Company has requested the Government of
India to nominate non-official part-time Directors including Woman Director on the Board of FACT.
Government of India vide Order No. 87/08/2016-HR-1 dated 10th June, 2016 appointed Shri K.P.S. Nair, Nazreth Lane, Aluva and
Dr. S. Murali, 2, Lakshmi Nivas, Bangalore-85 as non-official part time Directors on the Board of FACT. The Company has
inducted Shri K.P.S. Nair, and Dr. S. Murali to the Audit Committee/ Nomination and Remuneration Committee and Corporate
Social Responsibility committee.
TABLE 5 - FINANCIAL RATIOS
Ratios Sep’16 Mar’16 % Change
Sep ’16 vs Mar’16
Turn
ove
r
Rat
ios
Inventory Turnover 1.33 34.11 -96.10%
Debtors Turnover 35.22 4.21 737.01%
Fixed asset Turnover 2.16 0.80 170.93%
Current Asset Turnover 0.50 0.18 175.70%
Ret
urn
Rat
ios Operating Profit Margin 9.99% -35.90% N.A.
Net Profit Margin -5.34% -63.55% N.A.
Return on Assets (ROA) N.A. N.A. N.A.
Return on Equity (ROE) N.A. N.A. N.A.
Return on Capital Employed (ROCE) N.A. N.A. N.A.
Liq
uid
ity
Rat
ios
Current Ratio 1.14 1.12 1.61%
Quick Ratio 0.71 1.12 -36.52%
Cash Ratio 0.69 1.07 -35.15%
Working Capital Turnover ratio N.A. N.A. N.A.
Solv
ency
Rat
ios Debt to equity ratio N.A. N.A. N.A.
Interest Coverage Ratio 0.83 N.A. N.A.
Trad
ing
Rat
ios Market Cap / Sales 2.34 5.69 -58.84%
Market Cap/ Net Worth N.A. N.A. N.A.
Market Cap/PAT N.A. N.A. N.A.
Market Cap/EBITDA 23.44 N.A. N.A.
Source - Money Control
TABLE 6 - TRADING VOLUME Jun'17 Dec'16 Jun'16
% Change
Jun’17 Vs
Dec’16 Dec’16 vs Jun’16
Trading Volume (shares) (avg. of 1 qtr) 7,28,482 75,288 1,24,089 867.59% -39.33%
Trading Volume (shares) (high in 1 qtr) 62,99,321 5,32,156 11,28,931 1,083.74% -52.86%
Trading Volume (shares) (low in 1 qtr) 17,491 8,751 20,858 99.87% -58.04%
Ratio - High/low trading volume 360.15 60.81 54.12 492.24% 12.35%
Ratio - High/average trading volume 8.65 7.07 9.10 22.34% -22.31%
Source: Capitaline
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SECTOR: FERTILIZERS REPORTING DATE: 14TH AUGUST, 2017
FERTILIZERS & CHEMICALS TRAVANCORE LTD. www.fact.co.in
TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS
Jun'17 Dec'16 Jun'16 Comments
Shar
eho
ldin
g (%
)
Promoter shareholding 90.00 90.00 90.00 • No new equity shares were issued during the
period from Jun’ 16 to Jun’ 17.
• Promoter shareholding remains unchanged
during the above period.
• No other changes were observed in the
shareholding pattern during the said period.
• Promoters have not pledged/ encumbered any
shares.
Public - Institutional shareholding 8.56 8.56 8.56
Public - Others shareholding 1.44 1.44 1.44
Non-Promoter Non-Public
Shareholding 0.00 0.00 0.00
Promoter of the Company holds 90% of the equity capital. In line with the Securities Contract (Regulation) Act, 1956, and Amendment 2014,
the Promoter has to reduce their Shareholding below 75%, however, the Company had time till 21st August, 2017 to comply with the law.
Further, the Ministry of Finance vide Securities Contracts (Regulation) (Third Amendment) Rules, 2017, has further granted extension of 1
more year for PSUs, to comply with the minimum Public shareholding of 25%.
Source: NSE
MAJOR SHAREHOLDERS (AS ON 30TH JUNE, 2017)
S. No. Promoters Shareholding Public Shareholding
1 Central Government/ State
Government(s) 90%
Special National Investment Fund 8.56%
Source: NSE
TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS
Market Activity of Promoters Promoters have not sold/bought any shares in last one year
Preferential issue to promoters No preferential issue was made to promoters in last one year
Preferential issue to others No preferential issue was made to other shareholders in last one year
GDRs issued by the Company The Company did not issue any GDRs in last one year
Issue of ESOPs/Issue of shares other
than Preferential allotment
The Company does not have any ESOP Scheme. Further, no new equity shares were
issued by the Company in last one year.
Source - Annual Report 2015-16
TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
Sr. No. Name and Description of main products / services % to Total turnover of the Company
1 Complex Fertilisers 85%
2 Ammonium Sulphate 10%
Source - Annual Report 2015-16
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FERTILIZERS & CHEMICALS TRAVANCORE LTD. www.fact.co.in
Glossary
Equity: The equity shares capital of the Company
Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company
Turnover: The revenue earned from the operations of the Company
EPS: Earning Per Share is net profit earned by the Company per share
𝐸𝑃𝑆 =Profit After Tax
Number of outstanding shares
P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company
𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share
Earnings per share
Current Assets: Cash and other assets that are expected to be converted to cash in one year
Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,
buildings, and equipment
Total Assets: Current Assets + Fixed Assets
Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in
the future.
Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges
incurred during the year in relation to borrowed money.
Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.
Current Liabilities: A company's debts or obligations that are due within one year.
Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced
over a period.
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Inventory
Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business
can turn its accounts receivable into cash during a period
𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Accounts recievables
Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets
𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Fixed Assets
Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Current Assets
Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after
paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating
income (also known as “operating profit”) during a given period by its sales during the same period.
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit
Sales Turnover
Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit
Sales Turnover
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Return on Assets: ROA tells you what earnings were generated from invested capital (assets)
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit
Total Assets
Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’
equity.
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit
Net worth
Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability
and the efficiency with which its capital is employed.
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit
Total Debt + Equity share capital
Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts
over the next 12 months. It compares a firm's current assets to its current liabilities.
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets
Current Liabilities
Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories
Current Liabilities
Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables
Current Liabilities
Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates
a Company's effectiveness in using its working capital.
𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟
Current Assets − Current Liabilities
Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets.
𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡
𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ
Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a
Company can pay interest on outstanding debt.
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥
𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡
Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is
calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-
share stock price by the per-share revenue.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟
Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ
Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡
Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.
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𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝐸𝐵𝐼𝑇𝐷𝐴
Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year
Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year
Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year
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