"Subsidy Bonds" adversely affects Coromandel's profits

Chennai, 22 April 2008: Coromandel Fertilisers Limited (CFL) has turned out yet another year of sustained performance. During the year, Godavari Fertilisers and Chemicals Limited (GFCL) was amalgamated with the Company. The results of the current financial year include those of GFCL and hence, are not comparable with the corresponding previous period.

The Board of Directors of Coromandel Fertilisers Limited approved the audited financial results for the year ended March 31, 2008. During the year the company achieved a total income of Rs.3800.11 crore (Previous year: Rs.2084.22 crore). The profit before depreciation, interest and taxes for the year is Rs.455.38 crore (previous year Rs.218.12 crore).

The Profit Before Tax is Rs.333.42 crore in 2007-08 compared to Rs.146.35 crore in 2006-07. The profit after tax for the year is Rs.209.76 crore (Previous year Rs.100.74 crore).

The Company continued to improve on its performance/profitability despite steep increase in the price of key raw materials. The improved profitability has been mainly due to improved operating efficiencies, recognition of raw material prices in subsidy with one month lag instead of three months lag reckoned earlier and increased share of contribution from non fertilizer businesses like Pesticides and Specialty nutrients divisions.

The Profit for the quarter was affected on account of loss of Rs.12.92 crore (previous Year Rs.Nil) due to Mark to Market valuation of ‘Special Bonds’ issued by Government of India, towards settlement of its subsidy dues.

During the year the scheme of amalgamation of Godavari Fertilisers and Chemicals Limited (GFCL) with the company was approved by the Hon’ble High Court of Andhra Pradesh effective April 1, 2007 and the order was filed with the Registrar of Companies, Andhra Pradesh to complete the process of amalgamation. In terms of the scheme the company has allotted 12037182 equity shares of Rs.2/- each as fully paid up to the shareholders of GFCL in the proportion of three fully paid up equity shares of Rs.2/- each of the company for every two fully paid up equity shares of Rs.10/- each of GFCL.

The Board of Directors recommended payment of dividend of 175 per cent as against 100 per cent paid last year.

A copy of the advice to the Stock Exchanges giving the highlights of the audited financial results for the year ended March 31, 2008 approved by the Board of Directors of the Company on April 22, 2008 is attached.

About the Murugappa Group
Headquartered in Chennai, the USD 2 billion (Rs.8500 crore) Murugappa Group is India’s leading business conglomerate. Market leaders in diverse areas of business including engineering, abrasives, finance, general insurance, sanitaryware, cycles, sugar, farm inputs, fertilizers, plantations, bio-products and nutraceuticals, its 29 registered companies have manufacturing facilities spread across 14 states in India. The organisation fosters an environment of professionalism and has a workforce of over 30,000 employees.

The Group has forged strong joint venture alliances with leading international companies like Roca, Cargill, DBS Bank, Mitsui Sumitomo and Groupe Chimique Tunisien and has consolidated its status as one of the fastest growing diversified business houses in India.

For further information, please contact:
P Nagarajan
Chief Financial Officer
Coromandel Fertilisers Ltd.,
Tel: 040– 27844118 / 098480 24311
nagarajp@cfl.murugappa.com

Chandrika Raman
Asst General Manager - Group Corporate Communications
Murugappa group
Tel: 25306535 / 98400 71172
chandrikaR@corp.murugappa.com

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