Madras Fertilizers Limited (MFL) was incorporated in December 1966 as a Joint Venture between GOI and AMOCO India Incorporation of USA (AMOCO) with GOI holding 51% of the equity share capital. In the year 1972, NIOC acquired 50% of the AMOCO’s share and the shareholding become 51% GOI and 24.5% each of AMOCO and NIOC.
In 1985, AMOCO dis-invested their shares, which were purchased by GOI and NIOC in their respective proportions on 22.07.1985. The revised share holding pattern was GOI 67.55% and NIOC 32.45%. Subsequent to the Issue of Rights shares in 1994 for part financing the Project, the holding GOI & NIOC stands at 69.78% and 30.22%.
During 1997, MFL has gone for Public Issue of 2,86,30,000 shares with face value of 10 and a premium of 5 per share. Of these, 2, 58, 09,700 shares were subscribed. Sector-wise Paid up share capital and the shareholding pattern are as follows:
Shareholder in Cr %
GOI 95.85 59.50
NIOC 41.52 25.77
Public 23.73 14.73
Total 161.10 100.00
Though the Company has an authorized share capital of 365 Cr comprising of 175 Cr as equity and 190 Cr as preference share capital, the preference share capital is yet to be issued and subscribed. As on 30.11.2010, the paid up equity was 161.10 Cr.
MFL commenced commercial production in 1971, with an annual installed capacity of 2,47,500 MT of Ammonia, 2, 92,050 MT of Urea and 5, 40,000 MT of NPK. A major revamp / expansion was carried out in 1998 at a cost of 601 Cr, enhancing the annual installed capacity to 3, 46,500 MT of Ammonia, 4, 86,750 MT of Urea and 8,40,000 MT of NPK. With effect from 01.04.2003, GOI introduced a New Pricing Scheme I and adopted Tariff Committee Recommendations for the Complex fertilizers. In the year 2003-04, the accumulated loss eroded the total net worth and therefore the Company was referred to BIFR. On account of implementation of New Pricing Scheme (NPS) – Stage III amendment by GOI restricting the reduction in fixed cost to 10%, the Company’s operation for the financial year 2009-10 ended with a profit of Rs.6.88 Cr. During the year 2009-10, the Company produced 4, 36,100 MT of Urea with capacity utilization of 90%. The Company produced 7335 MT of 20:20:0:13 to IPL on tolling basis by restarting NPK ‘A’ Train.
The Company has been referred to Board for Industrial and Financial Reconstruction (BIFR) of the total erosion of net worth and its current negative value. The BIFR had registered the Company as Case No.501/ 2007. In the first hearing held on April 2, 2009, MFL was declared as Sick Company under Section 15 of SICA and State Bank of India (Commercial Branch, Chennai) was appointed as the Operating Agency (OA) to prepare a Draft Revival Scheme (DRS) by BIFR
In order to prepare a viable proposal for DRS, PDIL was engaged for preparation of viability proposal for MFL and PDIL submitted the same to OA and Company. Company forwarded the viability proposal to DOF with due approval of Board. In the PDIL’s Viability proposal for MFL, the technical viability of the Company was covered in detail and the financial viability has been slightly touched upon. In Order to firm up the financial rehabilitation, OA engaged SBI CAPS for preparing financial rehabilitation proposal and SBI CAPS accordingly prepared and forwarded the same to OA and Company, who in turn forwarded the report to DOF after obtaining approval from Board, for further proceedings.
The annual installed Capacity of MFL is as follows:
During the period April to December 2010, the Company produced 3,34,071 MT of Urea with the capacity utilization of 91.5%. The Company is hopeful of producing 4, 60,000 MT of Urea with capacity utilization of 94.5% during the year. The company is also planning to produce 40,000 MT of Vijay 20:20:0:13.During the year 2010-11, the Company shall achieve a Bio Fertilizer production of 450 MT.
During the year 2009-10, the Company ended up with a profit of Rs.6.88 Cr and the total accumulated losses as on 31st March, 2010 was 787.05 Cr. During the period April – December 2010, the Company has estimated to earn a profit of 52.59 crores out of the total turnover of 1042.56 crores.
We have been following GOI guidelines on inclusion of representative from minorities in selection committee for Recruitment of more than ten candidates. Mr. R Lawrence, General Manager (HR & M&D) was nominated in the selection committee as P&A nominee, OBC representative and Minority representative in the recent recruitment of Technical Assistant Trainee during 2010. The Company has a dealer strength of 5900 including 1614 SC/ST dealers which works out to 27.14% of total strength. The SC/ST dealers are allowed waiver of security deposit of5000/- and exemption from minimum sales norms
MFL do not have any problems related to gender issues. However, a wing of Women in Public Sector (WIPS) is functioning in MFL and women employees are nominated for the programs organized by WIPS.