PRELIMINARY INFORMATION MEMORANDUM (PIM) 

 

FERTILIZERS AND CHEMICALS TRAVANCORE LIMITED(FACT) 

November 2002

 

Deloitte Touche Tohmatsu India Private Limited

 

 

LIMITATIONS AND DISCLAIMERS  

 

1.        This document is being provided in connection with the proposed disinvestment of  51.00% equity by the Government of India (hereinafter referred as “GoI”), in Fertilisers and Chemicals Travancore Limited (hereinafter referred as “FACT”).

 

2.         Deloitte Touche Tohmatsu India Private Limited (herein after referred as “Deloitte”) has been appointed as the Advisors for the disinvestment by the GoI.

 

3.         The sole purpose of this document is to assist the recipient in deciding whether they wish to proceed with a further investigation of the proposed transaction, but it is not intended to form the basis of any investment decision or any decision to purchase the equity offered for sale by GoI.  This document does not constitute nor should it be interpreted as an offer or invitation for the sale or purchase of securities described herein.

 

4.         This document is meant to provide information only and upon the express understanding that recipients will use it only for the purposes set out above.  It does not purport to be all-inclusive or contain all the information about FACT or be the basis of any contract.  No representation or warranty, expressed or implied, is or will be made as to the reliability, accuracy or the completeness of any of the information contained herein. It should not be assumed that there shall be no deviation or change in any of the herein mentioned information on FACT.  While this document has been prepared in good faith, neither FACT nor GoI nor Deloitte nor any of their respective officers or employees make any representation or warranty or shall have any responsibility or liability whatsoever in respect of any statements made or omissions herefrom.  Any liability is accordingly expressly disclaimed by FACT, GoI, Deloitte and any of their respective officers or employees even if any loss or damage is caused by any act or omission on the part of FACT, GoI, Deloitte or any of their respective officers or employees, whether negligent or otherwise.

 

5.                By acceptance of this document, the recipient agrees that any information herein will be superseded by any later written information on the same subject made available to the recipient by or on behalf of FACT and GoI. GoI, Deloitte, FACT and any of their respective officers or employees undertake no obligation, among others, to provide the recipient with access to any additional information or to update this document or to correct any inaccuracies herein which may become apparent, and they reserve the right, at any time and without advance notice, to change the procedure for the sale of all or any part of the Interest or terminate negotiations or the due diligence process prior to the signing of any binding purchase agreement.

 

6.         Accordingly, interested recipients should carry out an independent assessment and analysis of FACT and of the information, facts and observations contained herein.

 

7.         This document has not been filed, registered or approved in any jurisdiction.  Recipients of this document resident in jurisdictions outside India should inform themselves of and observe any applicable legal requirements.

 

 

   

   

 

 

 

Section	Title	Page no.
Part A	Submission of Expression of Interest (EoI)	3
Part B	The Fertilisers and Chemicals Travancore Limited	9
	Annexure 1 – A copy of the Advertisement	15
	Annexure 2 – Expression of Interest	16
	Annexure 3 – Statement of Legal Capacity	18
	Annexure 4 – Request for Qualification	19
	Annexure 5 – Government of India Guidelines for                         Qualification of Bidders	20

 

 

 

 

1.                  INTRODUCTION

 

1.1       The declared policy of the Government of India is to bring down Government’s equity in all non-strategic Central Public Sector Enterprises to 26% or lower, if necessary, with increasing emphasis on strategic sale of identified public sector undertakings.

 

1.2       Like wise many of the State Governments have also initiated the process of disinvestment of their shareholding in State Level Public Enterprises. In this regard, the Government of Kerala has released an “Approach Paper for State Level Public Enterprises” on 4 April, 2002 which states that the State Government would not continue to prop up loss making public entities and indicated its intention for a time-bound restructuring plan on a case-by-case basis.

 

1.3       As a part of its disinvestment programme, the Government of India (“GoI”) intends to disinvest 51.00% equity in The Fertilisers and Chemicals Travancore Limited (“FACT”) along with transfer of management through a strategic sale.  The company was incorporated in 1943 and is under the administrative control of Ministry of Chemicals and Fertilizers, Government of India.

 

1.4       Deloitte Touche Tohmatsu India Private Limited (“Deloitte”) has been appointed as the Advisors for the disinvestment by the GoI.

 

2.         ADVERTISEMENT INVITING EOI

 

An advertisement has been issued in leading business and other newspapers inviting interested parties to submit their ‘Expressions of Interest’ (“EoI”) to participate in the disinvestment process, a copy of which is enclosed as Annexure-I.

 

3.         EXPRESSION OF INTEREST

 

            The process of participating in the disinvestment process and the requirements relating to information to be provided by interested parties when submitting their EoI is set out in the ensuing sections. 

 

 

4.         ELIGIBILITY/ PRE-QUALIFICATION CRITERIA
 

4.1       The interested party(ies)/consortium should have a combined net worth in excess of Rs. 2.00 billion as well as a sales in excess of Rs. 6.00 billion as per the annual accounts of financial year 2001-02. The definition of networth and sales for the purpose of the qualifying criteria are set out below:

 

Definitions

 

Ø      Net Worth

Net Worth = Equity Share Capital + Reserves & Surplus (excluding Revaluation Reserves)

As per Part I of Schedule VI of the Companies Act, 1956 (Vertical Form of Balance Sheet)

 

Ø      Sales  

Sales = Sales including subsidies and net of any taxes and duties levied, such as excise duty, sales tax, etc., if any.

Where sales in the Balance Sheet is inclusive of any taxes and duties, a statement showing sales net of such levies need be provided.

 

4.2       In case of a consortium bid, the financial parameters of the lead bidder must be at least 51.00% of the amount indicated in para 4.1 above.

 

 4.3      In choosing between prospective strategic partner(s), GoI will pay due attention, inter-alia to the security requirements of the country.

 

4.4       Where the financial statements are expressed in currency other than the Indian Rupee, the eligible amount as described above shall be computed by taking the equivalent US Dollars at the exchange rates (as stipulated by Foreign Exchange Dealers Association of India) prevailing on the date(s) of such financial statements.

 

4.5       Interested parties should note that in terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,1997, the strategic partner selected to acquire shares of FACT from GoI, may be required to make a public offer to acquire further shares of FACT in accordance with these regulations.  For further details, interested parties may refer to the Securities and Exchange Board of India regulations in this regard.

 

4.6       This Preliminary Information Memorandum (“PIM”) along with its enclosures does not constitute any commitment on the part of the GoI or FACT or Deloitte, whether in respect of the disinvestment process or otherwise.  Furthermore, this invitation confers neither any right nor expectation to any party to participate in the said process.

 

4.7       The GoI and FACT reserve the right to withdraw from the process or any part thereof, to accept or reject any or all offers at any stage of the process and/or modify the process or any part thereof or to vary any terms at any time without assigning any reason whatsoever.  No financial obligation whatsoever shall accrue to the GoI or FACT or Deloitte in such an event.

 

5.         INITIAL PROCESS

 

5.1       Following receipt of this PIM, interested parties will be required to submit an EoI Package comprising an Expression of Interest, a Statement of Legal Capacity and a Request for Qualification in formats specified in Annexures II, III, and IV.

 

5.2       Based on an evaluation of the EoI Package received, interested parties which are deemed to be qualified by the GoI (“Qualified Interested Parties” or “QIPs”) will be allowed to participate in the subsequent selection process (without conferring any right or expectation whatsoever to the QIPs).

 

5.3       Following signing of a Confidentiality Undertaking (“CU”) by duly authorised personnel, QIPs will be provided with the Bid Packet comprising the Confidential Information Memorandum (“CIM”) and the Request for Proposal (“RFP”) and will be invited to participate further in the process as detailed in the RFP.

 

6.         FILING REQUIREMENTS

 

6.1       Interested parties must submit, in duplicate, their EoI accompanied by a Statement of Legal Capacity and Request for Qualification (“RFQ”) the “EoI Package”, as per the formats given in Annexures II, III & IV of this PIM.

 

6.2       EoIs must be signed by a duly authorised representative of the interested party.  In the case of a consortium or joint venture the EoI must be signed by a duly authorised representative for the group.  In addition, Statements of Legal Capacity and RFQs have to be submitted by interested parties and each member of any consortium or joint venture.  This comprises the EoI Package.

 

6.3       All EoI Packages must be in English and each copy shall be bound in a separate volume.  Submission of the aforesaid documents by fax, e-mail or other electronic means will not be acceptable.  It is the responsibility of the interested party(ies) alone to ensure that its EoI with required documents is delivered at the address given below by the stated time and date.  The covering envelope containing the aforesaid document should be clearly marked “Expression of Interest - FACT”.  Neither the GoI nor FACT nor Deloitte shall be responsible for non-receipt of correspondence.

 

6.4              The EoI Package must be submitted by no later than 17.30 hours (Indian Standard Time), 4^th December, 2002 at the following address:

 

                    

The Director

Deloitte Touche Tohmatsu India Private Limited

14^th Floor, Dr. Gopal Das Bhawan

28, Barakhamba Road

New Delhi 110 001.

 

7.         EOI FILED BY CONSORTIA/JOINT VENTURES

 

7.1              If a Consortium or Joint Venture is formed, or proposed to be formed, specifically for the purpose of this investment, details of the members of the Consortium or Joint Venture and the extent of their interest herein must be provided in the EoI Package.

 

7.2              In case of a Consortium or a Joint Venture, there will be a lead bidder, which will acquire not less than 51.00% of the total equity disinvested.

 

7.3        Any change by way of withdrawal/substitution/inclusion of any member of the consortium/joint venture or any change affecting the composition of the consortium may be permitted prior to the stage of submission of financial bid, but only with the specific approval of the GoI. GoI or FACT or Deloitte have the sole discretion to determine the impact of the change in membership on the quality of the consortium and reject a proposal for such reason.

              The RFQ should be duly filled in and accompanied by the following details:

 

 

Ø      In case of a sole bidder

 

Ä      The Audited Balance Sheet and Profit & Loss Account of the sole bidder (Indian company/Foreign company) for the last 3 financial years.

 

Ä      Write-up on:

·         Profile of the sole bidder

·         A statement of reasons for strategic interest in FACT

·         Any other information considered material

 

Ø      In case of a consortium bid

 

Ä      The Audited Balance Sheet and Profit & Loss Account for the last 3 financial years of the lead bidder and other member companies associated in the bid.

 

Ä      Write-up on:

 

·         Lead bidder

 

o                 Profile of the lead bidder

o                 A statement of reasons for strategic interest in FACT

o                 Any other information considered material by the lead bidder

 

·         Other member companies

 

o                 Profile of member companies in the consortium

o                 Any other information considered material

 

 

8.         DISQUALIFICATION

 

8.1       The GoI shall not consider for the purpose of qualification, an EoI which is found to be incomplete in content and/or attachments and/or authentication, etc.

 

8.2       Without prejudice to any other rights or remedies available to GoI, a company/consortium/joint venture may be disqualified and its EoI dropped from further consideration for any reason whatsoever including those listed below:

 

Ø      Material misrepresentation by such company/any member of such consortium/joint venture whether, in the EoI along with the RFQ or otherwise.

 

Ø      Failure by such company/consortium/joint venture to provide the information required to be provided in the EoI, along with the RFQ, pursuant to relevant sections of the PIM.

 

Ø      Submission of an EoI along with RFQ in respect of any company/consortium/joint venture, where such company or any member of such consortium/ joint venture which has already submitted an EoI.

 

8.3       If information becomes known which would have entitled the GoI to reject or disqualify the relevant company/ consortium/ joint venture, even after the interested party has been qualified to receive the Bid Packet, the GoI reserves the right to reject the interested party at the time, or at any time after, such information becomes known to the GoI.

 

8.4       Where the interested party is a consortium/ joint venture, the GoI may disqualify the entire consortium/ joint venture for any of the reasons set out above, even if it applied to only one member of the consortium/ joint venture.

 

8.5       Further, GoI has issued guidelines for disqualification of bidders seeking to acquire any public sector enterprises through the process of disinvestment vide Department of Disinvestment OM No.6/4/2001-DD-II dated 13 July, 2001, a copy of which is enclosed as Annexure-V.  The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in FACT through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in FACT in the Expression of Interest to be submitted by them.  Interested parties would be required to provide the information on the criteria, laid down in the guidelines of 13 July 2001 along with their Expressions of Interest.  The Interested parties shall be required to provide with their EoI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government.  For other criteria also, a similar undertaking shall be provided along with EoI.

 

8.6       The company/consortium/joint venture not satisfying the eligibility and requisite qualification criteria specified in the above sections is not eligible.

 

 9.        FUTURE PROCESS

 

9.1       Based on the EoI submitted by the interested parties, GoI, advised by Deloitte will carry out an evaluation of the qualification of such interested parties. If at any time during the evaluation process, GoI or Deloitte requires any clarification in order to carry out the evaluation, it reserves the right to request such information from any or all of the companies/ consortium/ joint ventures and the companies/ consortium/ joint venture will be obliged to respond to any reasonable request for such information and to supply the same to Deloitte within such reasonable timeframe as GoI or Deloitte may require.

 

9.2       Based on an evaluation of EoIs received, interested parties, which are deemed fit will be  (“Qualified Interested Parties” “QIP”), to participate in the subsequent selection process (without conferring any right or expectation whatsoever to QIPs).  QIPs will be provided with the Request For Proposal (RFP) and the Confidential Information Memorandum (CIM) and shall be invited to participate further in the process described in detail in the RFP.  QIPs will get an opportunity to conduct a due diligence and take up plant visits and will also have access to data rooms and hold discussions with the management of FACT/officials of Ministry of Chemicals and Fertilizers/Ministry of Disinvestment, Government of India.  The rules regarding access to information in the data rooms will be provided to QIPs later.  QIPs will be invited to submit their proposal and a binding price bid.

 

9.3       This document constitutes no form of commitment on the part of the GoI or FACT other than to provide further information on FACT.  Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed disinvestment process.  The GoI and FACT reserve the right to withdraw from the process or any part thereof or vary any terms at any time without assigning any reasons.  The GoI reserves the right to accept or reject any/all offer(s) without assigning any reasons.

 

10.       ENQUIRIES

 

10.1     The GoI and Deloitte reserve the right, in their sole discretion, not to respond to any questions raised or provide clarification sought, if it is considered that it would be inappropriate to do so. Nothing in this section shall be taken or read as compelling or requiring the GoI and Deloitte to respond to any question or to provide any clarification. No extension of any time and date referred to in this PIM shall be granted on the basis or grounds that the GoI and Deloitte has not responded to any question/ provided any clarification.

 

11.       GOVERNING LAWS/ JURISDICTION/ ARBITRATION

 

11.1     All matters relating to the disinvestment process and the bidding procedure shall be governed by the law of Union of India. Only Courts at New Delhi (with exclusion of all other Courts) shall have the jurisdiction to decide or adjudicate on any matter, which may arise.

 

 

 

Name	:	THE FERTILISERS AND CHEMICALS TRAVANCORE LIMITED
Registered Office	:	Eloor, Udyogmandal-683 501, Kerala, India
Year of incorporation	:	1943
Liaison Offices	:	Mumbai, New Delhi
Marketing Area Offices	:	Chennai, Thiruvananthapuram, Hyderabad, Bangalore

 

1.                  HISTORY

 

1.1              Formation

 

The Fertilisers & Chemicals Travancore Limited was incorporated in 1943 and was set-up as India’s first large-scale fertiliser plant on the banks of the river Periyar at Udyogamandal near Alwaye (Ernakulam District of Kerala State).  Initially promoted by the Seshasayee Brothers, FACT became a Public Sector Company in 1960 and by 1962 the GoI became the major shareholder. At present GoI holds 97.38% of total paid-up equity of FACT.

 

FACT is the largest manufacturer of Ammonium Phosphate Sulphate (a complex phosphatic fertiliser) in India, with backward integrated plants for production of Sulphuric Acid, Phosphoric Acid and Ammonia. The company also manufactures nitrogenous fertilisers namely, Urea and Ammonium Sulphate. It is also one of the only two manufacturers of Caprolactam (a petrochemical product) in India.

 

While the Company has performed well in the past, its financial performance has been affected in the last four years primarily on account of high interest rate loan and increasing raw material prices. Keeping in mind the long term sustainability of the Company, the GoI has provided financial assistance in terms of waiver of outstanding interest amounting to Rs. 2,268.80 Millions during the year ended 31 March, 2002.  GoI may be prepared to consider further financial restructuring at the appropriate time.

 

1.2              Development  

 

The Cochin Division was established in two phases at Ambalamedu near Kochi Refineries Limited (Ambalamedu is about 30 km away from Udyogamandal).  In Phase-I, an Ammonia-Urea Complex was commissioned in 1973 and in Phase-II Sulphuric Acid Plant, Phosphoric Acid Plant and Complex Fertiliser Plant was commissioned during 1976-78.

 

In 1990-91 FACT diversified into the petrochemical sector. The Petrochemical Division was set-up at Udyogamandal with a production capacity of 50,000 MT per annum for manufacture of Caprolactam, 2.25 lacks MT per annum of Ammonium Sulphate as co-product, 4,750 MT per annum of Soda Ash and 3,800 MT per annum of Nitric Acid as bye-products.

 

Ammonia is a basic input for FACT’s fertilisers and Caprolactam product and the total  requirement is about 4.50 lakh MT per annum.  Until 1998 this was being met from the production from the Ammonia Plants of Cochin Division (capacity: 198,000 MT per annum) and Udyogamandal Division (Capacity:  85,800 MT per annum ) and imports  (2.10 lakhs MT per annum). In 1998 an additional Ammonia Plant with a capacity of 900 MT per day and 90 MT per day equivalent Synthesis Gas was set-up in Udyogmandal Division.

 

2.         PRODUCT PROFILE

 

The details of the products are given below:

 

Product	Type	Grade
Ammonium Phosphate Sulphate (APS)	Complex Phosphatic Fertiliser	20:20:0:15
Urea	Straight Nitrogenous Fertiliser	46% Nitrogen
Ammonium Sulphate	Straight Nitrogenous Fertiliser	21% Nitrogen
Caprolactam	Petrochemical

 

FACT is the market leader in its main product market, Ammonium Phosphate Sulphate which  is sold under the brand name “Factomphos”. Further, it is the only other company manufacturing Caprolactam apart from Gujarat State Fertlizers and Chemicals Limited with which it shares the domestic Caprolactam market equally.

 

3.         SALES AND MARKETING

The sales break-up of FACT for the year ended 2002 is set out below:

 

Product	Sales Quantity (in MT)	Sales* (in Rs Millions)
Ammonium Sulphate	229,125	1,112.27
Factamfos (Ammonium Phosphate Sulphate)	810,370	5,581.31
Mixed Manures	18,775	100.86
Urea	53,951	247.71
Caprolactam	45,106	2,720.60
Nitric Acid	4,344	19.37
Soda Ash	6,226	45.60
Others		21.89
Total		9,849.61

            *Excluding subsidies

 

3.1       Fertilisers

 

FACT’s fertilisers are sold in the southern states of India namely Kerala, Tamil Nadu, Karnataka and Andhra Pradesh through a dealer network which has been extensively developed over the years.  The dealer network is serviced through the regional offices of the Company at important cities in the said four southern states. FACT’s fertilisers enjoy brand equity in its area of operation.

 

3.2       Caprolactam

 

Caprolactam is the basic monomer for the production of the polymer Nylon.  There are currently 10 consumers in India, the major ones being SRF Limited with its units at Chennai and Gwalior as well as Century Enka Limited with its unit at Pune.

 

3.3       Other Chemicals

 

Nitric Acid & Soda Ash are by-products from the Caprolactam Plant are sold at rates, which the market can take. Other Chemicals like Ammonia, Sulphuric Acid and Oleum are sold in small quantities at cost.

 

3.4       MOU rating

 

From the year 1992-93, FACT has been signing a Memorandum of Understanding (MOU) every year with the Government of India for overall performance.  Performance of the Company was rated “ Excellent “ under the MOU system, for three consecutive years from 1994-95 to 1996-97.  For year 2000-01 also the Company’s performance has been rated “Excellent” under the MOU system.

 

4.                  MANUFACTURING FACILITIES

 

4.1       Manufacturing Facilities

 

The manufacturing units of FACT are organised as two distinct divisions, the details of which are mentioned in the table below:

 

Division	Location	Products	Capacity (TPA)
Udyogamandal Complex                   Cochin	Udyogamandal                                                Ambalamedu	NP20:20 Ammonium Sulphate Ammonia + Syn Gas Sulphuric Acid, Oleum, SO2 Phosphoric Acid Composite Ammonia Caprolactam Soda Ash Nitric Acid                                               Urea NP 20:20 Ammonia Sulphuric Acid Phosphoric Acid	148,500 225,000 326,700 379,500 33,000 39,600 50,000 4,750 3,800     330,000 485,000 198,000 330,000 115,000

 

 

 

Total installed capacity in terms of nutrients:

 

Nutrients	Capacity (TPA)
Nitrogen P2O5	324,500 131,900

 

FACT has achieved utilisation above the rated capacity, for its major products, Ammonium Phosphate Sulphate and Caprolactam. 

 

4.2       Land Details

 

FACT has land, on leasehold and freehold in Kerala, Tamil Nadu and Karnataka totaling to about 2200 acres. The Company enjoys locational advantage in term of its proximity to Cochin port, which facilitates the import of raw materials.

 

4.3       ISO (International Organization for Standardization) Certification

 

Most of the divisions of the company are ISO certified in recognition of satisfactory environmental management and quality control systems as set out below:  

 

Division	Certification
Udyogmandal Division Petrochemical Division Cochin Division (Phase I) Cochin Division (Phase II) FEDO FEW	ISO 14001, ISO 9002 ISO 14001, ISO 9002 ISO 14001 ISO 14001, ISO 9002 ISO 9001 ISO 9001

 

4.4       Other Facilities

 

It has 2 townships, 1 each at Udyogamandal and Ambalamedu with a total of around 2200 housing units. These townships are well developed with conveniently located market places, banks, postal services etc. Further, recreation clubs, theatres, community hall, guesthouse and places of religious worship are also located within the township.

 

FACT operates 3 schools, 2 at Udyogamandal and one at Ambalmedu as well as runs two hospitals, one each at Udyogamandal and Ambalamedu.

 

5.                  FINANCIAL PERFORMANCE

 

5.1              Financial Statements

 

An abstract of the financial statements of FACT for the past three years is presented in the following tables:

 

     (In Rs million)

BALANCE SHEET	As at	As at	As at
	31-March-00	31- March -01	31- March -02
Sources of funds
Share capital	3,547.70	3,547.70	3,547.70
Reserves and surplus	2,199.30	680.60	634.60
Long term borrowings	4,396.20	4,743.80	4,879.50
Short term borrowings	2,535.70	2,152.30	1,826.00
Total sources of funds	12,678.90	11,124.40	10,887.80
APPLICATION OF FUNDS
Net block	8,141.60	7,912.50	7,601.60
Capital work in progress	178.30	280.80	211.40
Current assets:
Finished goods	1,534.50	1,431.50	1,451.00
Work in progress	42.80	21.70	41.20
Raw materials	751.40	442.20	350.10
Stores, spares and loose tools	1,473.60	964.50	845.90
Materials in transit	56.60	113.10	296.30
Sundry debtors	2,776.40	2,850.90	2,128.40
Cash and bank balances	1,089.80	637.20	432.40
Loans and advances	445.10	667.50	874.40
Other current assets	217.60	129.90	66.90
Total current assets:	8,387.80	7,258.50	6,486.60
Current liabilities and provisions	4,035.30	4,333.90	3,417.30
Net current assets	4,352.50	2,924.60	3,069.30
Investments	6.50	6.50	5.50
Misc. expenditure to the extent not written off
Total application of funds	12,678.90	11,124.40	10,887.80
Net worth	5,747.00	4,228.30	4,182.30

                                                                                                                  

 

                                                                                               

                                                                                                                 (In Rs million)

Profit and Loss Account	1999-2000	2000-01	2001-02
Sales	10,455.70	11,807.10	9,468.20
Income from contracts and services	178.70	293.10	199.10
Subsidy	5,046.70	5,521.90	2,305.50
Other Income	184.70	223.60	249.70
Accretion/Decretion of stock	960.80	(124.10)	38.90
Interest waived by Government of India	0.00	0.00	1671.70
TOTAL INCOME	16,826.60	17,721.60	13,933.10
Cost of goods sold	15,825.80	17,288.30	12,869.30
Gross margin	1,000.80	433.30	1,063.80
Depreciation	634.20	965.00	668.30
Interest	764.60	987.80	389.20
Profit/(Loss) before taxation	(398.00)	(1,519.50)	6.30
Provision for tax/Refund of tax(-)	0.00	0.00	0.60
Net Profit/(Loss)	(398.00)	(1,519.50)	5.70

 

 

 

 

ANNEXURE 1  

 

GOVERNMENT OF INDIA

 

INVITATION FOR “EXPRESSION OF INTEREST” FOR STRATEGIC SALE OF SHAREHOLDING IN THE FERTILISERS AND CHEMICALS TRAVANCORE LIMITED

 

This announcement is neither a prospectus nor an offer or invitation to the public for sale of securities

 

Government of India(GoI) intends to induct a Strategic Partner (SP) to hold 51% of the equity in The Fertilisers And Chemicals Travancore Limited (FACT), a GoI enterprise. Deloitte Touche Tohmatsu India Private Limited (Deloitte) has been appointed as Advisors to assist the GoI in inducting the Strategic Partner.

 

FACT is mainly in the business of manufacturing fertilisers and petro chemicals. Its fertiliser products include a complex phosphatic fertiliser namely, Ammonium Phosphate Sulphate and nitrogenous fertilisers namely, Urea and Ammonium Sulphate. Its petro chemical product is Caprolactam.

 

For additional information on FACT, including the copy of the Preliminary Information Memorandum (PIM) can either be accessed at the websites www.fact.co.in , www.fert.nic.in, www.divest.nic.in or can be obtained from Deloitte Touche Tohmatsu India Private Limited, 14 Floor, Dr. Gopaldas Bhawan, 28 Barakhamba Road, New Delhi 110 001.

 

Interested party (ies), either individually or as a consortium, may submit their Expression of Interest (EoI) along with a Request for Qualification (RFQ) and other related documents in the format specified for the purpose in the PIM so as to reach the designated official specified in the PIM before 17:30 hours on 4^th December, 2002.

 

This announcement is neither a prospectus nor an offer or invitation for sale of equity shares or any securities to any institution/public. The GoI as well as FACT reserves the right to withdraw from the process or any part thereof, to accept or reject any or all offers at any stage of the process and /or modify the process or any part thereof or to vary any terms at any time without assigning any reason whatsoever. No financial obligation whatsoever shall accrue to GoI or FACT or Deloitte, in such an event. Neither GoI, nor FACT nor Deloitte shall be responsible for non-receipt of correspondence sent by post/courier/e-mail/fax.

 

 

ANNEXURE II

EXPRESSION OF INTEREST (‘EOI’)

 

(To be forwarded on the letterhead of the interested parties/members of the consortium/joint venture submitting the EoI).

 

 Ref: _________                                                                                   Date: _________

 

 The Director

Deloitte Touche Tohmatsu India Private Limited

14^th Floor, Dr. Gopal Das Bhawan

28, Barakhamba Road

New Delhi  - 110 001

             

 Sir,

 

Sub:    EXPRESSION OF INTEREST FOR STRATEGIC SALE OF SHAREHOLDING

IN THE FERTILISERS AND CHEMICALS TRAVANCORE LIMITED

 

 

We refer to the advertisement dated____________ inviting Expression of Interest for The Fertilsers and Chemicals Travancore Limited.

 

We have read and understood the contents of Preliminary Information Memorandum (PIM) and the advertisement and wish to participate in the above disinvestment process.

 

* We propose to submit our EoI in an individual capacity for and on behalf of (insert company name)

 

* We have formed / propose to form a consortium/joint venture comprising the following members:

 

1.          __________________(Insert company name)

2.          __________________(Insert company name)

3.          __________________(Insert company name)

 

We confirm that we/our consortium/joint venture/proposed consortium / proposed joint venture* satisfy the eligibility criteria set out in the relevant sections of the PIM including the guidelines for qualification of bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment issued by the Government of India vide Department of Disinvestment OM No. 6/4/2001-DD-II dated 13^th July, 2001.  The Statement of Legal Capacity and Request for Qualification as per formats, indicated hereinafter duly signed by us/ respective members, who jointly satisfy the eligibility criteria, are enclosed.

 

We certify that in regard to matters other than security and integrity of the country, we have not been convicted by a Court of law or indicted or adverse orders passed by a regulatory authority which would cast a doubt on our ability to manage the public sector unit when it is disinvested or which relates to a grave offence that outrages the moral sense of the community.

 

We further certify that in regard to matters relating to security and integrity of the country, we have not been convicted by a court of Law for any offence committed by us or by any of our sister concerns and no charge sheet has been filed by any agency of the Government for any offence committed by us or by any of our sister concerns.

 

We further certify that no investigation by a regulatory authority is pending either against us or against our sister concerns or against our CEO or any of our Directors/Managers/employees.

 

The request of Qualification as per format duly signed by us/respective members, who jointly satisfy the eligibility criteria, is enclosed.

 

We shall be glad to receive further communication on this subject.

 

Yours faithfully,

 

 

Authorised Signatory

For and on behalf of

* strike off whichever is not applicable.

 

 

Enclosure: 1. Statement of Legal Capacity

                  2.  Request for Qualification

 

 

ANNEXURE -III

STATEMENT OF LEGAL CAPACITY

 

(To be forwarded on the letterhead of the interested party and /or each member of the consortium/ joint venture submitting the EoI).

 

Ref: _________                                                                                  Date: _________

 

 The Director

Deloitte Touche Tohmatsu India Private Limited

14^th Floor, Dr. Gopal Das Bhawan

28, Barakhamba Road

New Delhi  - 110 001

             

 Sir,

 

Sub:    EXPRESSION OF INTEREST FOR STRATEGIC SALE OF SHAREHOLDING

IN THE FERTILISERS AND CHEMICALS TRAVANCORE LIMITED

 

We refer to the advertisement dated________of the Government of India (GoI) and the Preliminary Information Memorandum (PIM) in connection with the proposed disinvestment of The Fertilisers and Chemicals Travancore Limited (FACT).

 

We have read and understood the contents of the PIM and the advertisement and pursuant to this hereby confirm that:

 

We satisfy the eligibility criteria laid out in the PIM and the advertisement.*

 

We are a member of the consortium (constitution of which has been described in the Expression of Interest), which jointly satisfies the eligibility criteria as detailed in the PIM. *

 

We have agreed that (insert individual’s name) will act as our representatives on our behalf and has been duly authorised to submit the EoI. Further, the authorised signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the same. *

 

We have agreed that (insert the name of the individual) chosen as representative of our consortium and on our behalf and has been duly authorised to submit the EoI.  Further, the authorised signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the same. *

 

Yours faithfully,

 

Authorised Signatory

 For and on behalf of

* strike off whichever is not applicable.

 

                                                                       

 

ANNEXURE-IV

REQUEST FOR QUALIFICATION (“RFQ”)

 

(To be submitted in the respect of the interested parties/ each member of the consortium/ joint venture).

 

Name of the interested Party (ies)/Member (s): ____________________

 

 

Constitution (Check, where applicable)		Sector (Check, where applicable)
·         Public Limited Company	q	·         Public sector	q
·         Private Limited Company	q	·         Joint sector	q
·         Co-operative Societies	q	·         Private sector	q
·         Others, if any	q
·         If others, please specify

 

Nature of business	:
Date of incorporation	:
Date of commencement of business	:
Full address including telephone numbers/fax	:
Registered office	:
Head office	:
Address for correspondence	:

 

Basis of eligibility for participating in the proposed disinvestment in the FACT: (Please mention details of your eligibility as per the PIM requirements))

 

(Please attach supporting documents including the latest Certified Provisional/ Audited/ Unaudited Statement of Accounts and Annual Reports for the last 3 years).

 

Contact Persons:

 

Yours faithfully,

 

 

Authorised Signatory

For and on behalf of

Place:

Date:

 

ANNEXURE-V

 

No. 6/4/2001-DD-II

Government of India

Department of Disinvestment

Block 14, CGO Complex

New Delhi.

Dated 13^th July, 2001.

OFFICE MEMORANDUM

 

Subject: Guidelines for qualification of Bidders seeking to acquire stakes in  

          Public Sector Enterprises through the process of disinvestment

 

Government has examined the issue of framing comprehensive and transparent guidelines defining the criteria for bidders interested in PSE-disinvestment so that the parties selected through competitive bidding could inspire public confidence.  Earlier, criteria like net worth, experience etc. used to be prescribed.  Based on experience and in consultation with concerned departments, Government has decided to prescribe the following additional criteria for the qualification / disqualification of the parties seeking to acquire stakes in public sector enterprises through disinvestment: -

 

(a)    In regard to matters other than the security and integrity of the country, any conviction by a Court of Law or indictment / adverse order by a regulatory authority that casts a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, or which relates to a grave offence would constitute disqualification.  Grave offence is defined to be of such a nature that it outrages the moral sense of the community.  The decision in regard to the nature of the offence would be taken on case-to-case basis after considering the facts of the case and relevant legal principles, by the Government.

 

(b)    In regard to matters relating to the security and integrity of the country, any charge-sheet by an agency of the Government / conviction by a Court of Law for an offence committed by the bidding party or by any sister concern of the bidding party would result in disqualification.  The decision in regard to the relationship between the sister concerns would be taken, based on the relevant facts and after examining whether the two concerns are substantially controlled by the same person/persons.

 

(c)    In both (a) and (b), disqualification shall continue for a period that Government deems appropriate.

 

(d)    Any entity, which is disqualified from participating in the disinvestment process, would not be allowed to remain associated with it or get associated merely because it has preferred an appeal against the order based on which it has been disqualified.  The mere pendency of appeal will have no effect on the disqualification.

 

(e)    The disqualification criteria would come into effect immediately and would apply to all bidders for various disinvestment transactions, which have not been completed as yet.

 

(f)      Before disqualifying a concern, a Show Cause Notice why it should not be disqualified would be issued to it and it would be given an opportunity to explain its position.

 

Henceforth, these criteria will be prescribed in the advertisements seeking Expression of Interest (EOI) from the interested parties. The interested parties would be required to provide the information on the above criteria, along with their Expressions of Interest (EOI).  The bidders shall be required to provide with their EOI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government.  For other criteria also, a similar undertaking shall be obtained along with EOI.

(A.K. Tewari)

Under Secretary to the Government of India.

NOTE:

 

The following would be treated as grave offence:

 

(i)  Only those orders of SEBI are to be treated as coming under the category of “grave offences” which directly relate to “fraud” as defined in the SEBI Act and/or regulations.

 

(ii) Only those orders of SEBI that cast a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, are to be treated as adverse.

 

(iii) Any conviction by a Court of Law.

 

(iv) In cases in which SEBI also passes a prosecution order, disqualification of the bidder should arise only on conviction by the Court of Law.