MIRA INFORM REPORT
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Report Date : |
9TH June, 2006 |
IDENTIFICATION DETAILS
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Name : |
HINDUSTAN PENCIL LIMITED |
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Registered Office : |
510, Himalaya House, 79,
Palton Road, Mumbai, Maharashtra, India |
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Country : |
India |
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Financials (as on) : |
31.03.2005 |
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Date of Incorporation : |
15th
March 1955 |
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Com. Reg. No.: |
11-9500 |
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CIN No.: [Company Identification No.] |
U36991MH1955PLC009500 |
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TAN No.: [Tax Deduction & Collection Account No.] |
MUMH06973B |
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Legal Form : |
A closely held public limited liability of
the company |
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Line of Business : |
Manufacturer of Pencil,
Erasers and Sharpeners. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
RATING
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STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate
working capital. No caution needed for credit transaction. It has above
average (strong) capability for payment of interest and principal sums |
Large |
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Maximum Credit Limit : |
USD 1750000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an old well
established and closely held public limited company engaged in manufacturing
and marketing of Pencils having popular brands “APSARA” and “NATARAJ”. It has
well knitted marking facilities all over the country. It is making steady
progress in its turnover and profits. Trade relations are reported as fair.
Payments are usually made as per commitments. It can be considered normal
for business dealings. |
LOCATIONS
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Registered Office : |
510, Himalaya House, 79,
Palton Road, Mumbai, Maharashtra, India |
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Tel. No.: |
91-22-22614505/22614506/07/2700858 |
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Fax No.: |
91-22-22626444/22614508 |
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E-Mail : |
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Website : |
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Head Office : |
712-7113,
Tulsiani Chambers, 212, Nariman Point, Mumbai –400021, Maharashtra, India |
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Tel. No.: |
91-22-56308500 |
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Fax No.: |
91-22-22872703 |
DIRECTORS
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Name : |
Mr. B. J. Sanghavi |
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Designation : |
Chairman |
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Address : |
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Date of Birth/Age : |
Mr. Hiralaxmi B. Sanghavi |
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Qualification : |
Director
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BUSINESS DETAILS
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Line of Business : |
Manufacturer of Pencil,
Erasers and Sharpeners. |
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Products : |
Pencil,
Erasers and other stationery items |
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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Pencils
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Boxes |
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9000000 |
5194895 |
GENERAL INFORMATION
|
Suppliers : |
v
PCL Oil and Solvent
Limited v
Studio Art Process v
Coronet Packaging
Industries v
Jasmine Art Printers v
Mahavir Packaging –
Maruti Gums v
Magnish Packaging
Industries- v
Printers India v
Smash Colour Prints
and Packaging v
Apsara Art Materials
Private Limited v
Sanghvi Wood Limited v
Kirti Stationers
Private Limited v
Apsara Plastic Private
Limited v
Gandhi Pencils Private
Limited v
Patel Stationers
Private Limited v
Camco Stationers
Private Limited v
Hardik Paints Private
Limited v
Nachik Colour Private
Limited v
J. K. Enterprises |
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No. of Employees : |
1200 |
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Bankers : |
v
The Saraswat
Co-operative Bank Limited v
Bharat Overseas Bank v
Union Bank of
India |
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Facilities : |
Secured
loans (Figures Rs. in millions)
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Banking Relations : |
Good |
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Auditors : |
Chaturvedi and Shah Chartered Accountant Mumbai,
Maharashtra, India |
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Associates: |
v
Apsara Art Materials
Private Limited v
Apsara Plastic Private
Limited v
Kirit Stationers
Private Limited v
Patel Stationers
Private Limited v
Gandhi Pencils Proc.
Private Limited v
Sanghvi Management
Services Private Limited v
Umesh Pencils Proc.
Private Limited v
Bhaumik Colours
Private Limited v
Nachik Colours Private
Limited v
J. K. Enterprises v
Sanghvi Agencies v
Sanghvi Corporations v
Laxmi Distributors v
Harsha Haren
Investment Company Private Limited v
Parul Dhruvi
Investment Company Private Limited v
Hiralaxmi Investment
Company Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
25000 |
Equity Shares of |
Rs.1000/-
each |
Rs. 25.000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
23475 |
Equity
Shares |
Rs. 1000/- each |
Rs. 23.475 millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF
FUNDS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
|
SHAREHOLDERS FUNDS |
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1] Share Capital |
23.475 |
23.475 |
23.475 |
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2] Reserves & Surplus |
430.761 |
377.715 |
345.839 |
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NET WORTH |
454.236 |
401.190 |
369.314 |
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LOAN FUNDS |
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1] Secured Loans |
274.895 |
238.775 |
242.897 |
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2] Unsecured Loans |
1.214 |
8.723 |
14.108 |
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TOTAL
BORROWING |
276.109 |
247.498 |
257.005 |
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Deferred Tax Liability |
18.232 |
16.241 |
15.708 |
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TOTAL
|
748.577 |
664.929 |
642.027 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
360.714 |
398.858 |
384.440 |
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Capital work-in-progress |
17.243 |
0.000 |
11.594 |
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INVESTMENTS |
0.068 |
0.065 |
0.065 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
346.093 |
293.464 |
253.417 |
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Sundry Debtors |
133.789 |
129.217 |
169.970 |
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Cash & Bank Balances |
44.486 |
9.743 |
23.899 |
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Loans & Advances |
122.869 |
97.285 |
97.958 |
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Total
Current Assets |
647.237 |
529.709 |
545.244 |
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Less : |
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Current Liabilities |
175.888 |
185.909 |
238.175 |
Provisions
|
106.822 |
83.007 |
65.497 |
Total Current Liabilities
|
282.710 |
268.916 |
303.672 |
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Net Current Assets |
364.527 |
260.793 |
241.572 |
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MISCELLANEOUS EXPENSES |
6.025 |
5.213 |
4.356 |
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GRAND TOTAL
|
748.577 |
664.929 |
642.027 |
PROFIT & LOSS ACCOUNT
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PARTICULARS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
Sales Turnover [including other income]
|
1889.566 |
1807.437 |
1648.815 |
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Profit/(Loss) Before Tax
|
80.439 |
52.456 |
93.013 |
Provision for Taxation
|
25.816 |
18.423 |
24.516 |
Profit/(Loss) After Tax
|
54.623 |
34.033 |
68.497 |
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Export Value
|
160.026 |
75.457 |
75.762 |
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Import Value
|
30.171 |
27.641 |
80.511 |
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Total Expenditure
|
1809.127 |
1754.982 |
1555.800 |
KEY RATIOS
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PARTICULARS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
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Debt-Equity Ratio |
0.65 |
0.70 |
0.75 |
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Long Term Debt-Equity Ratio |
0.65 |
0.70 |
0.75 |
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Current Ratio |
1.99 |
1.75 |
1.67 |
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TURNOVER RATIOS |
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Fixed Assets |
3.84 |
3.49 |
2.84 |
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Inventory |
8.06 |
7.86 |
6.55 |
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Debtors |
19.59 |
14.37 |
9.76 |
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Interest Cover Ratio |
4.48 |
2.74 |
4.05 |
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Operating Profit Margin(%) |
6.49 |
7.37 |
10.87 |
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Profit Before Interest And Tax
Margin(%) |
4.02 |
3.84 |
7.26 |
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Cash Profit Margin(%) |
4.60 |
5.11 |
7.61 |
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Adjusted Net Profit Margin(%) |
2.12 |
1.58 |
3.99 |
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Return On Capital Employed(%) |
15.70 |
13.60 |
20.19 |
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Return On Net Worth(%) |
13.54 |
9.44 |
19.26 |
LOCAL AGENCY FURTHER INFORMATION
Conservation Of Energy s
l. The Company is consuming
electricity and power supplied by the Electricity Board and the energy is
utilised at the optimum level hence,-there are no measures taken for
conservation of energy
2. In view of
the(t)above,there are no additional investments or proposals for reduction in
energy consumption and the question of its impact on reduction of cost of
production of goods does not arise.
3.The disclosure in respect
of total energy consumption and energy consumption per unit of production does
not. apply to the company.
Fixed assets
v
Lands
v
Leasehold Land
v
Plant and Machinery
v
Moulds
v
Electrical Installation
v
Other Equipments
v
Vehicles
v
Technical Knowhow
AS PER WEBSITE
Established in 1958,
Hindustan Pencils has perfected the process of manufacturing pencils to a fine
art. With the latest machinery in place, today their state-of-the-art
manufacturing units Manufacture upto 3.5 million pencils, 0.45 million sharpeners,
1.2 million erasers and 0.12 million scales daily.
Their obsession with quality has driven us to build their own manufacturing
infrastructure. Every little component like pencil lacquer, Sharpener blade
& screw that goes into the making of their products, are produced in-house.
Their brands 'Apsara' and 'Nataraj' have emerged as household names. In other
words, Hindustan Pencils Ltd has come to personify quality at a competitive
price.
Their success goes hand in hand with their societal responsibilities. By
growing trees specifically for wood used in pencil making, and using
environment friendly raw materials, they ensure that trees are insulated from
the hazards of pencil manufacture.
Our Mission
Delighting consumers with globally recognised stationery.
Quality Policy
Hindustan Pencils is committed to manufacture and market quality products of
international standards at competitive prices, in the stationery field.
Constant effort will be made by the company to meet international safety standards
and to prevent degradation of the environment.
Environment Policy
Constant effort will be made by the company in improving processes and
maximizing utilization of inputs to prevent degradation of environment. All
ingredients used by the company are non-toxic in nature. Wood being one of the
main inputs for pencils, efforts are being made to develop plantations to
ensure renewal of this precious natural resource. Research & Development
efforts are also being made to switch over to eco-friendly water based lacquers
and PVC-free formulations.
Manufacturing
Given that enduring
reliability is the hallmark of their products, understandably, they are
manufactured using the most stringent quality controls backed by years of
research and development. Their 7 factories at 5 locations in India employ the
latest in technology and the best of raw materials to grant to their products
the quality, so ingrained in their product development philosophy. Besides
developing the machines for manufacture indigenously, every component that goes
into the making of their products are produced in-house.
Their concern for the
environment has led us to grow their own trees to satisfy their requirements
for wood, an essential ingredient in pencil manufacture. This practice in turn
ensures an uninterrupted supply of wood of consistent quality from their own
plantations. All said and done, the outcome of their manufacturing process are
products that offer their customers excellent "value for money".
Pencils Manufacture
The 'pencil', derived from
the Latin word penicillum, seems humble enough to be hurriedly put together in
one's backyard. In this aspect, the simplicity of the pencil is truly
misleading. The common pencil uses about 40 different raw materials, the basic
ones being wood, graphite and clay. The indigenously grown wood brought
specifically from the state of Jammu and Kashmir, is first cut into slats that
are as long as but only half the width of the pencil. The slats are then
subjected to wood staining and grooves are cut into the slats.
Next, the lead, which
is a mixture of micronised graphite and ball clay, is dried and inserted into
these grooves. The leads are bonded, shaped and compressed to ensure that they
are breakage resistant and long lasting. Each of these slats with lead is then
stuck together with another slat without lead to complete the pencil. Once the
pencil is created through this "sandwich" method, they are then
meticulously shaped, lacquered and printed as per requirement.
The process results in bonded lead pencils of high calibre, about 18 cms long
that can draw a line 55 kms long and on an average write about 45,000 words.
The pencils that write smooth and dark are tipped at one end to indicate the
end that has to be sharpened, ensuring maximum utilization. Every stage of the
process is executed with maximum controls and quality checks to ensure that the
product is truly world-class.
Distribution
Their large
manufacturing capacity at 5 locations across India is backed by an impressive
distribution network, which ensures that their products find their way to every
household in India.
25 depots/C & F agents, 2,500 distributors, 1,50,000 retail outlets and a
formidable field force complete the supply chain.
Their depots are spread across the length and breadth of the country and are
located at Ahmedabad, Sewree, Bhivandi, Nagpur, Indore, Raipur, Delhi,
Gaziabad, Jaipur, Kanpur, Pabhat, Ranchi, Cuttak, Gauhati, Chandigarh,
Dehradun, and Goa.
Global Sales
Their commitment to quality,
competitive pricing and their enormous manufacturing capacities have carried
their products well beyond Indian shores.
At present, they export to over 32 countries which includes Bahrain,
Bangladesh, Belgium, Botswana, Brazil, Burkina Faso, Canada, Chile, Costa Rica,
Cyprus, Dominican Republic, Dakar, Egypt, El Salvador, Gabon, Gambia, Ghana,
Guinea, Guatemala, Hungary, Honduras, Italy, Iran, Israel, Ivory coast,
Jamaica, Jordan, Kenya, Kuwait, Mali, Mauritius, Mexico, Morocco, Myanmar,
Nicaragua, Niger, Nigeria, Oman, Panama, Peru, Philippines, Portugal, Puerto
Rico, Saudi Arabia, Senegal, South Africa, Spain, Sri Lanka, Suriname,
Tanzania, Thailand, Togo, Turkey, U A E, U K, U S A, Venezuela, Vietnam, West
Indies.
CMT REPORT [Corruption, Money laundering
& Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION ON DESIGNATED PARTY
No exist designating subject or any of its beneficial
owners, controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or
assets of the subject are derived from criminal conduct or a prohibited transaction.
4] Record on Financial Crime :
Charges or conviction registered
against subject: None
5] Records on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal Records
No available information exist that suggest that
subject or any of its principals have been formally charged or convicted by a
competent governmental authority for any financial crime or under any formal
investigation by a competent government authority for any violation of
anti-corruption laws or international anti-money laundering laws or standard.
8] Affiliation with Government :
No record exists to suggest that any director or
indirect owners, controlling shareholders, director, officer or employee of the
company is a government official or a family member or close business associate
of a Government official.
9] Compensation Package :
Our market survey revealed that the amount of
compensation sought by the subject is fair and reasonable and comparable to
compensation paid to others for similar services.
10] Press Report :
No press reports /
filings exists on the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.45.92 |
|
UK
Pound |
1 |
Rs.84.62 |
|
Euro |
1 |
Rs.58.03 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP
CAPITAL |
1~10 |
8 |
|
OPERATING
SCALE |
1~10 |
8 |
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FINANCIAL
CONDITION |
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|
--BUSINESS
SCALE |
1~10 |
8 |
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--PROFITABILIRY |
1~10 |
8 |
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--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT
LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
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DEMERIT
POINTS |
|
|
|
--BANK
CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER
ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT
POINTS |
|
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--SOLE
DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT
ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER
MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk and to set
the amount of credit to be extended. It is calculated from a composite of
weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial condition (40%) Ownership background (20%) Payment record (10%)
Credit history (10%) Market trend (10%) Operational size
(10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses
an extremely sound financial base with the strongest capability for timely
payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses
adequate working capital. No caution needed for credit transaction. It has
above average (strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial
& operational base are regarded healthy. General unfavourable factors
will not cause fatal effect. Satisfactory capability for payment of interest
and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable
& favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse
factors are apparent. Repayment of interest and principal sums in default or
expected to be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute
credit risk exists. Caution needed to be exercised |
Credit not recommended |