MIRA
INFORM REPORT
|
Report Date : |
20th
May, 2006 |
IDENTIFICATION
DETAILS
|
Name : |
GODFREY
PHILLIPS INDIA LIMITED |
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Registered Office : |
Chakala,
Andheri (East), Mumbai-400099, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2005 |
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Date of Incorporation : |
03.12.1936 |
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Com. Reg. No.: |
11-8587 |
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CIN No.: [Company
Identification No.] |
U16004MH1936PLC008587 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMG08521C |
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PAN No.: [Permanent
Account No.] |
AABCG4768K |
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Legal Form : |
It is a
Public Limited Liability company. The
company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing
and marketing of Cigarettes containing tobacco, Tea black in packets and
Unmanufactured tobacco |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD
13000000 |
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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 a well-established and reputed company having fine track. Available information indicates high
financial responsibility of the company.
Financial position is good.
Payments are usually correct and as per commitments. The
company can be considered good for any normal business dealings. |
LOCATIONS
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Registered Office : |
Chakala,
Andheri (East), Mumbai-400099, Maharashtra |
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Tel. No.: |
91-22-28367306 / 26832155/28367301/08 |
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Fax No.: |
91-22-28363761 / 26840775 |
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E-Mail : |
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Corporate
Office: |
Four Square House, 49, Community Centre, Friends Colony, New
Delhi-110065 |
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Leaf
Division: |
Godfrey
Phillips India Ltd. Godfrey Phillips
India Ltd. |
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Head
Office: |
49,
Community Centre, New Friends Colony, New Delhi-110065 |
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Tel
No.: |
91-11-26832155/26836468 |
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Fax
No.: |
91-11-26840775/26835803 |
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E-Mail: |
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Branches: |
306, Sakar, opp. Nehru Bridge, Ashram
Road. Ahmedabad-380009, Gujarat Tel No.: 91-79-6580290/6581817 Fax No.: 91-6583298
3 Cooper Street
15, Regal Building
Kermani Building
SCO-17 2nd Floor
11-5-423/1 Zafar Bagh, |
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Factory: |
Ghaziabad
Factory Andheri
Factory |
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DIRECTORS
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Name : |
Mr.
R.A. Shah |
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Designation : |
Chairman |
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Name : |
Mr.
L. K. Modi |
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Designation : |
Executive
Director |
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Age: |
38 years |
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Qualification: |
Dip. in
Business Administration & Elect. Engg. |
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Experience: |
18 years |
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Name : |
Mr.
Samir Kumar Modi |
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Designation : |
Executive
Director |
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Name : |
Mr.
K.K. Modi |
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Designation : |
President |
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Name : |
Mr.
Lalit Bhasin |
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Designation : |
Director |
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Name : |
Mr.
Anup N. Kothari |
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Designation : |
Director |
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Name : |
Mr.
C.M. Maniar |
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Designation : |
Director |
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Name : |
Mr.
O.P. Vaish |
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Designation : |
Director |
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Name : |
Mr. S
V Shanbhag |
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Designation : |
Wholtime
Director |
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KEY EXECUTIVES
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Name
: |
Mr. R
Joshi |
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Designation
: |
Company
Secretary |
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Name: |
Mr. R. N.
Agarwal |
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Designation: |
Director –
Finance |
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Age: |
55 years |
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Qualification: |
M.Com., LL.B.,
F.C.A. |
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Experience: |
29 years |
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Date
of Joining: |
01.08.1982 |
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Previous
Employment: |
Modipon Limited
– Controller of Accounts |
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Name: |
Mr. S. K. Modi |
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Designation: |
Executive
Director |
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Age: |
32 years |
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Qualification: |
B.A. |
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Experience: |
12 years |
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Date
of Joining: |
11.01.1994 |
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Previous
Employment: |
Indo Euro Ind.
Limited – Managing Director |
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MAJOR SHAREHOLDERS
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Names
of Shareholders |
No. of Shares |
Percentage of Holding |
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A]
Promoters Holding |
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1) Promoters |
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Indian Promotors |
3,826,533 |
36.80 |
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Foreign Promoters |
3,736,704 |
35.93 |
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2)
Person acting in concert |
Nil |
Nil |
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Sub
Total |
7,563,237 |
72.73 |
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B]
Non Promoters
Holding |
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Institutional
Investors |
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Mutual
Fund |
125 |
- |
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UTI |
Nil |
Nil |
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Banks |
9,134 |
0.09 |
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Insurance
Companies |
Nil |
Nil |
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State Governments |
4,800 |
0.05 |
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State
Financial Corp |
1,200 |
0.01 |
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FII’s |
628,483 |
6.04 |
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Sub
Total |
643,742 |
6.19 |
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Others |
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Private
Corporate bodies |
187,512 |
1.80 |
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Indian
Public |
19,31,418 |
18.57 |
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NRI’s/OCBs |
63,802 |
0.62 |
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Directives
& Relatives |
9,073 |
0.09 |
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Sub
Total |
21,91,805 |
21.08 |
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Grand
Total |
10,398,784 |
100.00 |
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BUSINESS DETAILS
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Line of Business : |
Manufacturing
and marketing of Cigarettes containing tobacco, Tea black in packets and
Unmanufactured tobacco |
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Products : |
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PRODUCTION
STATUS
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Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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Cigarattes |
millions |
18750 |
3377 |
4736 |
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GENERAL INFORMATION
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Bankers : |
• State Bank of India • Bank of Baroda • Bank of India • Citibank N. A. • State Bank of Hyderabad • State Bank of Travancore • The Hongkong and Shanghai Banking
Corporation • Union Bank of India |
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Facilities : |
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Banking Relations : |
Good |
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Auditors : |
A.F. Ferguson & Company Chartered Accountant |
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Internal Auditor: |
Lodha
& Company |
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Soliciters: |
Crawford
Bayley & Company |
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CAPITAL STRUCTURE
Authorised
Capital :
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No.
of Shares |
Type |
Value |
Amount |
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60000 |
Preference
Shares |
Rs. 100 each |
Rs. 6.000 millions |
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24400000 |
Equity
Shares |
Rs. 10 each |
Rs. 244.000 millions |
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Issued,
Subscribed & Paid-up Capital :
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No.
of Shares |
Type |
Value |
Amount |
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10398784 |
Equity
Shares |
Rs. 10 each |
Rs. 103.988 millions |
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FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
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SOURCES OF FUNDS |
|
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
|
103.988 |
103.988 |
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2] Reserves & Surplus |
|
3166.115 |
2790.988 |
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NETWORTH |
|
3270.103 |
2894.976 |
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LOAN FUNDS |
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1] Secured Loans |
|
592.022 |
53.719 |
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2] Unsecured Loans |
|
18.777 |
120.878 |
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TOTAL BORROWING |
|
622.360 |
206.881 |
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DEFERRED TAX LIABILITIES |
|
103.655 |
95.220 |
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TOTAL |
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3996.118 |
3197.077 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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1227.325 |
740.840 |
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Capital work-in-progress |
|
65.685 |
132.326 |
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INVESTMENT |
|
1991.578 |
1447.346 |
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DEFERREX TAX ASSETS |
|
261.289 |
219.067 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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1278.257 |
1248.758 |
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Sundry Debtors |
|
25.119 |
126.013 |
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Cash & Bank Balances |
|
52.030 |
682.221 |
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Income Accrued on Investments |
|
1.277 |
4.551 |
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Loans & Advances |
|
730.179 |
537.207 |
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Total Current Assets |
|
2086.862 |
1984.750 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
|
1207.195 |
995.303 |
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Provisions |
|
428.426 |
331.949 |
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Total Current Liabilities |
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1635.621 |
1327.252 |
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Net Current Assets |
|
451.241 |
657.498 |
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MISCELLANEOUS EXPENSES |
|
- |
- |
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TOTAL |
|
3996.118 |
3197.077 |
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PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
|
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other income] |
|
7126.355 |
6503.150 |
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Profit/(Loss)
Before Tax |
|
999.498 |
764.861 |
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Provision
for Taxation |
|
363.513 |
243.101 |
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Profit/(Loss)
After Tax |
|
635.985 |
521.760 |
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Export
Value |
|
738.720 |
723.627 |
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Import
Value |
|
393.861 |
175.397 |
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Total
Expenditure |
|
8894.921 |
7923.934 |
QUARTERLY
/ SUMMARISED RESULTS
|
PARTICULARS |
30.06.2005 [1st Quarter] |
30.09.2005 [2nd Quarter] |
31.12.2005 [3rd Quarter] |
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Sales Turnover |
1622.800 |
1692.900 |
1700.100 |
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Other Income |
49.400 |
123.700 |
64.500 |
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Total Income |
1672.200 |
1816.600 |
1764.600 |
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Total Expenditure |
1374.200 |
1422.300 |
1417.100 |
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Operating Profit |
298.000 |
394.300 |
347.500 |
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Interest |
2.800 |
6.100 |
9.000 |
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Gross Profit |
295.200 |
388.200 |
338.500 |
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Depreciation |
40.400 |
42.400 |
46.300 |
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Tax |
97.800 |
111.400 |
114.500 |
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Reported PAT |
157.000 |
234.400 |
177.700 |
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200506 Quarter 1: 1. The above results are as per stock exchange regulations and
have been taken on record by the Board of Directors at its meeting held on July
31,2005 after being reviewed by the Audit Committee. 2. As per past practice,
expenditure on cigarette advertising and sales promotion budgeted for the year
is evenly spread over the year for the purposes of quarterly results and any
excess or shortfall over the budgeted expenditure is adujsted in last quarter
of the financial year. 3. Staff cost of the quarter ended June 30,2004 includes
a non recurring pay out of Rs. 740 lacs. 4. Provision for taxation for the
quarter ended June 30,2005 includes tax on fringe benefits. 5. During the
quarter 5 investor complaints were received, all of which were responded to by
the Company. No complaints were pending either at the beginning or at the end
of the quarter. 6. The Board of Directors at its meeting held on June 30,2005
had recommended a dividend of Rs. 22 per equity share of Rs. 10 each for the
year 2004-05 which will be paid after declaration in the forthcoming annual
general meeting to be held on September 15,2005. 7. Figures have been regrouped
wherever considered necessary.
200509 Quarter 2: EPS is Basic & Diluted 1.The above results are as per stock
exchange regulations and have been taken on record by the Board of Directors at
its meeting held on October 27, 2004 after being reviewed by the Audit
Committee. 2. As per past practice, expenditure on cigarette advertising and
sales promotion budgeted for the year is evenly spread over the year for the
purpose of quarterly results and any excess or shortfall over the budgeted
expenditure is adjusted in last quarter of the financial year. 3.Staff Cost for
the half year ended September 30, 2004 includes a non recurring pay out of Rs
74.00 lacs. 4. Provision for taxation for the quarter and half year ended
September 30 2005 inludes tax on fringe benefits. 5. Exceptional items comprise
of: i) Provison fr luxury taxes on cigarettes and interest thereon made in
earlier year now reversed pursant to assessmen orders passed during the quarter by the authorities based on the Supreme
Court Judgement in Jan 2005. ii) Provision made out of abundant caution for
estimated additional purchase consideration payable to small scale cigarette
manufacturing units in view of the Supreme Court judgement in Sept 2005 which
has the effect of denying them the benefit of exemption from paymnet of excise
duty with retrospective effect. This provision recoverable from these
macufacturing units. 6. During the quarter 16 investor complaints wee received
all of which were responded to by the Company. No complaints were pending
either at the beginning or at the end of the quarter. 7.Figures have been
regrouped wherever considered necessary.
200512 Quarter 3: Expenditure Includes Increase/Decrease in excise duty on finished
goods Rs (47.40) million Increase/Decrease in stock in Trade Rs 62.10 million
Consumption of Raw & Packing Material Rs 395.20 million Purchases for
resale (including transferred from raw & packaging materials) Rs 138.10
million Staff Cost Rs 127.80 million Advertising and Sales Promotion Rs 250.40
million Other Expenditure Rs 484.10 million Tax indicates Provision for Current
Tax & Deferred Tax EPS is Basic & Diluted Status of Investor Complaints
for the quarter ended December 31, 2005 Complaints Pending at the beginning of
the quarter Nil Complaints Received during the quarter 28 Complaints disposed
off during the quarter 28 Complaints unresolved at the end of the quarter Nil
1. The above results are as per stock exchange regulations and have been taken
on record by the Board of Directors at its meeting held on January 29, 2006
after being reviewed by the Audit Committee. 2. As per past practice,
expenditure on cigarette advertising and sales promotion budgeted for the year
is evenly spread over the year for the purpose of quarterly results and any
excess or shortfall over the budgeted expenditure is adjusted in last quarter
of the financial year. 3. Staff cost for the nine months ended December 31,
2004 includes a non recurring pay out of Rs 74 million. 4. Provision for
taxation for the quarter and nine months ended December 31, 2005 includes tax
on fringe benefits. 5. Exceptional items comprise of: Rs million i) Provision
for luxury taxes on cigarettes and interest thereon made in earlier years,
428.60 now reversed pursuant to assessment orders passed during the quarter by
the tax authorities based on the Supreme Court Judgment in January, 2005. ii)
Provision made (Including Rs 10.2 million during the quarter ended December 31,
2005) for estimated additional purchase consideration payable to small scale
cigarette manufacturing units in Assam in view of the Supreme Court judgement
in September,2005 which has the effect of denying them the benefit of exemption
from payment of excise duty with retrospective effect. This provision has been
made in addition to Rs 273.30 million provided for as doubtful of recovery in
an earlier year in respect of dues recoverable from these manufacturing units.
(339.60) --------------------- Sub total 89.00 Less : Income Tax thereon
(current & deferred) (30.00) --------------------- Exceptional items (net
of tax) 59.00 --------------------- 6. Figures have been regrouped wherever
considered necessary. 7. The Limited review as required under clause 41 of Listing
Agreement has been completed by Statutory Auditors. The Limited Review Report
for the quarter ended December 31, 2005 does not have any impact on the above
results and notes in aggregate except in respect of matter explained in note 2.
KEY
RATIOS
|
PARTICULARS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
|
Debt Equity Ratio |
0.14
|
0.10 |
0.15 |
|
Long
term Debt Equity Ratio |
0.10
|
0.05 |
0.04 |
|
Current
Ratio |
1.35
|
1.37 |
1.33 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
7.76
|
9.03 |
9.11 |
|
Inventory |
10.25
|
10.30 |
10.56 |
|
Debtors |
171.50
|
97.15 |
158.67 |
|
Interest
Cover Ratio |
18.47
|
14.47 |
21.54 |
|
Operating
Profit Margin (%) |
9.43
|
7.83 |
8.03 |
|
Profit
before Interest and Tax Margin (%) |
8.16
|
6.98 |
7.18 |
|
Cash
Profit Margin (%) |
6.19
|
5.28 |
5.13 |
|
Adjusted
Net Profit Margin (%) |
4.91
|
4.44 |
4.28 |
|
Return On
Capital Employed (%) |
30.42
|
27.47 |
27.14 |
|
Return
on Net Worth (%) |
20.79
|
19.17 |
18.57 |
|
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STOCK PRICES
|
Face
Value |
Rs.10 |
|
High |
Rs.
1,434 |
|
Low |
Rs.1,331.05 |
LOCAL AGENCY
FURTHER INFORMATION
Godfrey Phillips is
a company driven by passion - the passion to excel, innovate and win, a passion
to be the leader, to emerge as the most respected company in the tobacco
industry, not just in India but all over the world.
Godfrey Phillips is today the second
largest player in the Indian cigarette industry with an annual turnover of over
US$ 265 million.
Incorporated in India in 1936, the
Company established its own manufacturing facilities in 1944. Today, the
operations span the entire northern and western part of the country, with two
manufacturing facilities located in Ghaziabad (near Delhi) and in Andheri
(Mumbai), a state of the art R&D centre in Mumbai and a tobacco-buying unit
in Guntur (Andhra Pradesh). Headquartered in Delhi, the Company has its sales
offices across the country at Ahmedabad, Mumbai, Delhi, Chandigarh and
Hyderabad.
The Company today is the proud owner
of some of the most popular cigarette brands in the country like Red and White,
Four Square, Jaisalmer, Cavanders, Tipper and Prince. Its products are
distributed through an extensive India wide network comprising 484 exclusive
distributors and over 800,000 retail outlets.
Over the years, Godfrey Phillips has
emerged as a professionally managed, highly efficient corporate entity. Today,
the Company has one of the highest productivity rates of workers in the entire
country and an enviable organisational structure. Over the years the Company
has also become an active player in overseas markets, with significant export
volumes.
Godfrey Phillips has two major
stakeholders, one of India's leading industrial houses - the K.K. Modi Group
and one of the World's largest tobacco companies, Philip Morris. Godfrey
Phillips has the strong backing of over 15,000 shareholders in the Country and
is today, through the sheer determination & passion of every employee of
the organization, growing from strength to strength.
Patners:
K. K. Modi Group
The K. K. Modi Group, through its
subsidiary Modi Enterprises joined Philip Morris and took over the management
of Godfrey Phillips India Ltd in 1979, with significant shareholding and
financial interests. The period that followed Modi Enterprises joining Philip
Morris saw the modernisation of the factories, the creation of "We Aim To
Satisfy" as the Company motto, and the Company moving from number five in
the market place to number two.
The K. K. Modi Group is part of the
broader Modi Group founded by Rai Bahadur Gujarmal Modi in 1933. This group
today has estimated sales revenue of US $2.4 billion and employees in excess of
25,000 people with interests that span a diverse range of businesses. These
businesses include steel, sugar, textiles, chemicals, tobacco, tea, tyres,
computers, copiers, cosmetics, network marketing, telecommunications,
entertainment, homecare, pharmaceuticals, on line lottery and education.
Many of these businesses are joint ventures with major international companies
such as Xerox (UK), Lurgi (Germany), Ten Sports, Sterling Drug Company (USA),
Revlon (USA), Philip Morris (USA) and Apollo International (USA).
The K. K. Modi Group, owned by the first son of Rai Bahadur Gujarmal Modi, has
businesses in agro-chemicals, tobacco, tea & beverages, education,
entertainment, direct selling (network selling) and gourmet restaurants. Its
strengths come from successful alliances with international players, national
distribution and communications network, professional and skilled workforce,
excellent relations & access with government and an entrepreneurial &
innovative business culture.
The experience and the network of connections, its distribution coverage
through tobacco, chemicals, network marketing and cable television; their deep
understanding of the diverse Indian markets and consumer behaviour has been
invaluable in assisting Godfrey Phillips in progressing in India.
For more details, visit the Modi Enterprises web site: www.modi.com
Philip Morris
Today Philip Morris, the owner of
some of the world's most respected brands including Marlboro, is one of the
largest shareholders in Godfrey Phillips and has an agreement with the Company
to provide technological services and assistance in all areas of business.
In 1967-68, Philip Morris acquired a
substantial holding in Godfrey Phillips Ltd. (UK) and Godfrey Phillips
Investment Corporation, which was holding substantial shares of Godfrey
Phillips India Ltd. In 1968 they all became affiliates of Philip Morris Inc.
Philip Morris Inc. joined hands with the K.K. Modi Group in 1979.
Altria Group, Inc.
Effective January 27, 2003, Altria Group, Inc., became the name of the parent
company of Kraft Foods, Philip Morris USA, Philip Morris International and
Philip Morris Capital Corporation. Collectively, these companies form the
Altria family of companies.
For more information on Philip Morris and related companies, please visit www.altria.com.
Philip Morris USA
Philip Morris & Co. Ltd. started as a small tobacco company in New York
City in 1902. Today, with its headquarters in New York, USA, Philip Morris has
its main manufacturing, processing and support facilities in Richmond
(Virginia), a manufacturing facility in Cabarrus County (North Carolina); a
materials conversion plant in Louisville (Kentucky) and sales offices across
the U.S. and The Commonwealth of Puerto Rico.
Philip Morris USA has a repertoire of some of the most trusted and best brands
in the country, if not the world. They include Marlboro, Virginia Slims, Benson
& Hedges, Merit, Parliament, Alpine, Basic, Cambridge, Bristol, Bucks, Chesterfield,
Collector's Choice, Commander, English Ovals, Lark, L&M, Players and
Saratoga.
For more information on Philip Morris USA, please visit www.pmusa.com.
Philip Morris International
In addition to Philip Morris USA, the Company has Philip Morris International,
based in Lausanne (Switzerland) and is the world's leading Tobacco Company
outside the United States.
The company holds a 14% share of the international cigarette market, employs
over 40,000 people worldwide and has more than 50 affiliated factories.
The company manufactures, markets, sells and/or distributes quality cigarettes
in more than 160 countries around the world, including India.
For more information on Philip Morris International, please visit www.philipmorrisinternational.com.
Altadis - The Worlds Best and Largest Cigar Manufacturer
In December 2002, Godfrey Phillips
India commenced as the exclusive distributor for the brands of the world's
largest cigar manufacturer, Altadis, in India, Nepal and Sri Lanka
Altadis has three major areas of
activity, which are:
Blond and dark cigarettes:
These are manufactured and marketed by the group itself, under well-established
brand names in France and Spain. It is a market leader in its segment. These
brands are also being exported to other countries worldwide, where its sales
are rapidly increasing.
Cigars: Which are produced and marketed worldwide, under prestigious brand
names and a wide product range, from machine-made cigars to hand-rolled premium
cigars
Distribution: Altadis's value-added logistical expertise in tobacco and
consumer-product services is extended to retailers to new sectors.
Altadis is ranked 3rd in Western Europe in cigarettes and 1st in the world in
cigars. It is also one of the foremost distributors to convenience outlets in
Southern Europe.
With a strong work force of 20,000 employees and activities spread across 35
countries, Altadis is today a truly multicultural and internationally
orientated group. More than a third of its sales are generated from foreign
markets. Altadis's present growth strategy is based on acquisitions and
international expansion to reinforce its leadership position and continuously
create value for its shareholders and employees.
Cigars
The worldwide No. 1, Altadis Group is today the undisputed leader in three of
the largest cigar markets, namely United States, Spain and France.
Some of the well known cigar brands of the company are: Farias, Fleur de
Savane, Phillies, Dutch Master, VegaFina, Pleiades, Don Diego, Longchamp,
Antonio y Cleopatra, Santa Damiana, Meccarillos, Cruzeros, Montecristo,
Partagás, Cohiba, La Gloria Cubana, H. Upmann, Picaduros, Ducados Mini, Van
Holden, Entrefinos, Tampa Nugget, Hav-a-Tampa, Backwoods and y otras marcas
The Cigar Division of the company consolidated its No.1 position worldwide in
2002, with a market share of nearly 25%, a sales volume of around 3.2 billion
units.
For more information on Altadis, please visit us at: www.altadis.com
Tobacco
in India:
India is the second largest producer
of tobacco in the world after China. It produced 572 million kgs of tobacco in
2002-2003. India only holds a meager 0.7% share of the US$30 billion global
Import-Export trade in Tobacco, with cigarettes/cigarette tobaccos accounting
for 85% of the Country's total tobacco exports.
The tobacco industry holds tremendous potential for India. For the government,
it means excise duties and export revenues, and for the Country in general, it
translates into huge employment opportunities.
Despite being the second largest
producer, India is only the ninth largest exporter of tobacco and tobacco
products in the world. Out of the total tobacco produced in India, only
one-third is flue-cured tobacco suitable for cigarette manufacturing. Most of
the tobacco produce is suitable for the manufacture of chewing tobacco, bidis
and other cheap tobacco products, which have no demand outside the country.
There is only an export demand for flue-cured tobacco, which is used for
cigarette manufacturing.
If India adopted a rational tax
policy for the tobacco industry that encouraged the growing of export tobacco,
tobacco farmer income would increase and export revenue would grow. If India
adopted China's tax policy on tobacco, tax revenue could rise from the current
Rs 6,031 crore to Rs 54,000 crore. China's economy-oriented tax policies have
given cigarettes 100% share of domestic tobacco consumption. This strong
domestic base has proved to be conducive to exports as well as revenue
generation.
The Indian tobacco industry makes a
very substantial contribution to employment. 35 million people are directly or
indirectly engaged in the production and selling of tobacco & tobacco
products as shown in the table below.
Economic Impact of Tobacco Industry -
Employment.
|
TYPE |
MILLIONS |
SOURCE |
|
Farmers |
6.0 |
22nd Report of
the Parliamentary Committee on Subordinate Legislation, 1995 |
|
Farmer Labour |
20.0 |
|
|
Bidi workers |
4.4 |
Lok Sabha reply
to question on 17.05.2000 |
|
Tendu Leaf
Pluckers |
2.2 |
M.P. Govt
Advertisement (TOI, June 8, 2000) |
|
Trade/Retailers |
2.0 |
ORG-MARG Research
data |
|
Total |
34.6 |
|
The production of tobacco is integral
to the economies of a number of Indian states and regions, where it is grown.
Tobacco is predominantly grown in Andhra Pradesh, Karnataka, Gujarat and Uttar
Pradesh. Andhra Pradesh & Karnataka traditionally produce flue-cured leaf.
Growing of tobacco is very lucrative owing to its short growing season and the
profitability in relation to other cash crops.
As can be seen from the pie chart
1(below), Indian consumption of tobacco does not follow western trends with 38%
of tobacco being consumed as bidi's, 48% as chewing tobacco, and only 14% as
cigarettes. That is, bidis, snuff and chewing tobacco such as gutka, khaini and
zarda form the bulk (86%) of India's total tobacco production. This low
percentage of consumption in cigarettes of 14% compares to 90% in the rest of
the world. In fact the per capita consumption of cigarettes in India is merely
1/10th of the world average.
This unique tobacco consumption
pattern is a combination of tradition and more importantly the discriminatory
tax imposed on cigarettes over the last 2 decades. Cigarette smokers pay almost
85% (Rs 5,181 crore) of the total tax revenues generated from tobacco. This
discriminatory tax is justified on the grounds that it is a "luxury"
tax. This is a misnomer because it is the discriminatory tax, which is causing
the difference in prices between cigarettes and other tobacco products.
Pie chart 2 (below) shows the revenue
contribution from each of the forms of tobacco consumption. Cigarettes, with
only 14% of the Indian consumption, account for more than 85% of the total
revenue from tobacco products. In reading this chart one should realize more
than 50% of the revenue from cigarettes is taxation.
Tobacco consumption and revenue split
2002/2003
The Bidi industry is relatively
unorganized, rural and labour intensive in nature, with very few large
producers. They wrap the product in tendu leaf and much of the industry volume
is hand rolled. The market is very regional in character with different brands
sporting different shapes and sizes dominating the market. The major centres of
production are:
1. Andhra Pradesh (A.P.)
2. Bihar
3. Gujarat
4. Kerala
5. Madhya Pradesh (M.P.)
6. Chattishgarh
7. Tamilnadu
8. Maharashtra
9. Karnataka
10. Orissa
11. Uttar Pradesh (U.P.)
12. West Bengal
The non smoking tobacco including chewing tobacco and gutka market, has grown
at a rapid rate from almost zero a decade ago to its current position. The
market is divided between chewing tobacco, snuff and hookah. The industry is
also very regional in character with only two brands having a national
presence, Pan Parag and Manikchand.
Chewing tobacco and hookah occupy
about 25% of the total tobacco grown in India and are consumed internally in
the form of chewing, hookah, paste, quiwam, candy and gutka purposes. There are
some 400-500 products of pan masala available in the market such as sented
supari, aromatic powder, khaini, mishri, mawa, snuff, zarda, cheroot, etc.
Gutka is banned in some states of
India.
On the cigarette side India is
rapidly seeing a growing demand for filter tipped cigarettes on account of the
rising middle class who are migrating from non-filter cigarettes to filter
tipped cigarettes, owing to the rise in the disposable income of the people.
The tax collection from cigarettes is
the highest in the tobacco industry: duty per kg for cigarettes is as high as
Rs. 722 per kg, while combined duty per kg for other tobacco products like
bidis and chewing tobacco is only Rs. 21 per kg.
In India, three major cigarette
players dominate the market, primarily ITC with 72% market share, Godfrey
Phillips with 12% and VST with 8% share of the market. However, for Godfrey
Phillips there exists huge untapped opportunity for growth on account of
geographical expansion possibilities (as it is presently available in only the
northern, western and certain southern parts of the Country) and product
portfolio expansion.
Fixed
Assets:
à
Goodwill
à
Patents
and trade marks
à
Land
à
Building
à
Plant
& Machinery
à
Electrical
installation and equipments
à
Computers
and information technology equipments
à
Furniture
& Fixtures
à
Motor
Vehicles
India's economic growth continues to be
impressive and one of the highest amongst the developing world. During the year
2004-05 India's GDP grew by 6.9% marginally higher than the budgeted estimate
of 6.2%, inspite of Tsunami, deficit monsoon and volatile oil prices. The
confidence level in the Indian economy is high and that is also reflected in
the stock market indices.
The manufacturing sector in 2004-05 registered a robust growth of 9.2% as against 6.9% in the previous year and it continues to grow at an impressive rate during the current year. The service sector, primarily supported by IT has also been registering a spectacular growth and today both manufacturing and service sectors account for more than 73% of the total GDP of the country. The current year is also witnessing a smart upturn in the FMCG sector which suffered an unprecedented decline in the previous two years. This is a welcome indicator.
The low
growth in agriculture continues to be a matter of concern. The erratic
monsoons, lack of technological inputs and other much needed reforms are some
of the factors responsible for this situation. There is an immediate need for
introducing drastic reforms, making major investment in technology,
consolidation and building infrastructure in the rural sector. If something is
not done immediately, India may find herself non-competitive with other
countries in the neighborhood in the now free WTO regime. Needless to say that
bulk of our population continues to remain dependent on agriculture. We may not
be able to meet our dream of taking the benefits of economic reforms to the
poor and the rural people until we are able to make our agricultural produce
much more competitive, both in cost and quality to help farmers improve their
earnings through productivity gains
India is the third largest grower of tobacco in
the world. It was heartening to see that the production of FCV tobacco used in
cigarettes account for 90% of the country's tobacco export, was at an all time
high of 255 million kgs. The farm prices were also attractive. The farmers in
Karnataka realized 15% higher yields than the previous year. India's export of
tobacco was also at a record level of 163 million kgs. against 151 million kgs.
in the previous year. It may, however, be noted that the recent political
turmoil in Zimbabwe and consequent sharp decline in the tobacco supply from
there has also helped India improve its export performance. The greatest
beneficiary of the shortfall in supply from Zimbabwe has, however, been Brazil
who has made major investments over the last few years and has built a high
quality base in growing the FCV tobaccos. The gradual withdrawal of agriculture
subsidies on tobacco in the European Union starting from next year offers an
added opportunity to India for becoming a major exporter of tobacco and tobacco
products in the world. Today our exports are less than 1/3rd of Brazil. It is high time that the Government
should start encouraging cultivation of the kind and variety of tobaccos that
the rest of the world needs rather than one that is used domestically for
producing bidis and chewing tobacco, peculiar to India. While the Government's
efforts in containing the consumption of tobacco in all categories is
appreciable, yet it is important to have a proper appreciation of this sector
that provides livelihood to as many as 36 million people of which 70% are
engaged in agriculture. Returns to the farmers on producing cigarette usable
types of tobaccos are known to be much higher than others. The Government
should provide a platform for helping consumers to gradually upgrade their
consumption from traditional low quality tobacco products to globally
acceptable varieties like cigarettes. This will help not only the farmers and
consumers but also help the country in realizing much higher revenues as well
as export earnings.
The last few years have seen a modest growth in
the volume of domestic cigarettes as a result of some stability in the rate of
excise taxes. During the year under review the cigarette industry started
looking up after many years of stagnation. The industry achieved a growth of
about 7.5% with significant gains in the filter and micro segments. The growth
in the regular filter segment also benefited your Company as this segment
constitutes nearly 61% of the Company's total sales. In the current year i.e.
2005-06, however, the Finance Minister has again raised the excise tax steeply
by 10%. Thanks to some relief in the total tax burden that has come to the
industry at the same time, from the recent verdict of the Supreme Court by
striking down the luxury tax being levied by number of states at varying rates.
Consequently, most companies including yours, have been able to maintain the
prices of their brands bought by masses by partly absorbing the increased
excise burden. Your company and the industry will continue to persuade trfe
Government to allow the cigarette industry to have its due share of the tobacco
consumption and help contribute to the Indian economy at a much greater
level than it is today.
The prohibitive and discriminatory taxation has been one of the greatest impediments to the users of other tobacco products to move up to using cigarettes. This kind of discrimination is again unique to India in the world market. As reported in the past, 85% of the total excise revenue collected by the Government from tobacco sector is taken from cigarette industry which accounts for only about 14% of the tobacco consumption. Not only that, as a matter of fact, the share of tobacco usage in cigarettes has fallen from 23% in 1971/72 to about 14% currently, even though the total tobacco consumption in the country has gone up. The anti-tobacco campaigns also primarily focus on cigarettes which by inference to the common man may mean that other products may be better than cigarettes.- The recent report on tobacco control in India prepared by the Ministry of Health and Family Welfare (Government of India) has stated that "bidis,... deliver more toxic products to the smoker than other smoked tobacco products. Thus, the burden of tobacco - related diseases is higher in this group. Increased taxes on cigarettes since 1970s resulted in increased consumption of bidis". Therefore, it is high time for the Government to be pragmatic and practical and should introduce such policies which help and benefit all the stake holders including the Government, farmers and the consumers on a durable and sustainable basis.
Cigarettes
During the year under report almost all the
major brands of the Company performed reasonably well and higher sales were
achieved compared to the previous year. The market share of the Company grew to
11.8%. Packaging of the Company's flagship brand 'Four Square' was upgraded in
all its formats. Tipper' 59MM brand was extended to new markets during the year
under report.
The productivity levels at both the
manufacturing locations of the Company at Mumbai and Ghaziabad continued to be
higher and continuously improving. Quality standards across all the franchises
and their respective formats were also upgraded and their indexes compared with
international specifications which are constantly monitored.
During the year under report a new modern state
of the art primary processing facility was set up at the manufacturing facility
of the Company's subsidiary, International Tobacco Company Limited at
Ghaziabad. In addition, all the outdated packing machines are being replaced
with latest generation packers at both the manufacturing plants at Mumbai and
Ghaziabad.
The new pilot Research & Development plant
set up at Andheri factory was operational during the year under report. It has
latest measuring and monitoring laboratory equipments and pilot processing facility.
It is a matter of great achievement that your Company has
been accredited by the National Accreditation Board for Testing and Calibration
Laboratories, Department of Science & Technology, India granting ISO/IEC
17025:1999 in respect of the Company's R & D laboratory at its factory at
Andheri, Mumbai.
During the current year the Company has also
test launched its new brand 'Force 10' in Nagpur and Ludhiana markets.
With the economy on a growth path and purchasing
power of the people rising, the Company feels reasonably convinced that cigarette
consumption should also improve provided the Government is pragmatic and stable
in its approach towards cigarette industry which offers more modern and
hygienic product in the form of cigarettes.
During the first quarter of the current
financial year the cigarette sales volume were higher at 3117 million
cigarettes as against 2853 million cigarettes sold during the corresponding
quarter last year registering an increase of 9.3%. Accordingly the value of
cigarette sales during the quarter were also higher by over 12% at Rs. 328.96
crore as against Rs. 293.48 crore in the corresponding
quarter last year.
The export of un-manufactured tobacco for the
financial year 2004-05 was 7099 MT valued at Rs. 51.75 crore as against 4940 MT
valued at Rs. 38.41 crore in the previous year registering an increase of 44%
in terms of quantity and 35% in terms of value. We are hopeful that the growth
momentum will continue during the current year and the Company would be able to
stretch its
tobacco exports further to achieve a target of
Rs. 58 crore during the financial year 2005-06.
Tea
During the year under report the Company
achieved a higher domestic sales turnover of 2889 tonnes valued at Rs. 396.100
million compared to 2214 tonnes valued at Rs. 291.600 millions in the previous
year registering an increase of 30% in terms of quantity and 36% in terms of
value.
Lower crop of tea in India led to bullish trends
in commodity price during the year under report. Retail Audit figures point to
a 2% decline in the domestic branded packet tea market against 8% decline last
year.
The Company's tea business, which was further
restructured in the year 2004-05, has shown encouraging results. The business
has achieved significant growth this year along with positive
cash flows.
During the first quarter of the current year, the domestic tea business has achieved sales of Rs. 79.600 millions, a growth of 2%. over the corresponding period last year. First two months were affected due to introduction of VAT.
Exports
During the year, the aggregate FOB value of
exports including tobacco, cigarettes and tea were higher at Rs. 725.300
millions as against Rs. 695.000 million in the previous year. The cut tobacco
exports increased significantly to Rs. 32.900 million as against Rs. 3.600 million
only in the previous year. The following major initiatives were taken by the
International Division to enhance exports of cigarettes
and cut tobacco :
(i) Prospecting diversified customer base for
contract manufacturing brands.
(ii) Introduced GPI brands of cigarettes in the
Republic of Guinea and Sierra Leone.
(iii) Appointed experienced agents in different
countries.
(iv) Marketing initiatives to popularize Godfrey
Phillips India Limited brands.
The Company is targeting an exports growth of 30%
of cigarettes and cut tobacco during the
current year.
The export of un-manufactured tobacco for the financial year 2004-05 was 7099 MT valued at Rs. 51.75 crore as against 4940 MT valued at Rs. 38.41 crore in the previous year registering an increase of 44% in terms of quantity and 35% in terms of value. We are hopeful that the growth momentum will continue during the current year and the Company would be able to stretch its tobacco exports further to achieve a target of Rs. 58 crore during the financial year 2005-06.
Cigar
Introduction of Altadis USA's Machine Made and
Hand Made Cigars, started in December 2002.
During the year under review GPI has established
leadership position with an enviable market
share of over 50% in the cigar market.
We are the first company to introduce organized
distribution of Cigars across various cities in
India. During last two years we have built a
trusting relationship with our channel partners and
taken numerous initiatives to develop customers
in the elite hotels and clubs across the country.
Live Cigar Rolling events were organized in
Mumbai, Delhi, Hyderabad and Bangalore and Altadis
USA arranged for a Master Torcedor Ms. Jessica
Maria from La Romana who rolled Don Diego
Anniversario Cigars for the aficionados. This
was a very popular event and received wide appreciation and acclaim.
Our efforts have resulted in three fold volume
growth of our famous brands namely Don Diego, Santa Damiana, Flor De Copan,
Phillies and Hav-A-Tampa Jewels, compared to last year. Our performance gives
the confidence to realize our vision "To make Godfrey Phillips India the
destination for Cigars in India"
During the year under report the cigarettes
sales volume rose to 12195 million cigarettes as against 11867 million
cigarettes in the previous year, recording an increase of 3%. The overall sales
turnover comprising of cigarettes, tobacco, cigar and tea was also higher at
Rs. 129.600 million as against Rs. 117.700 million in the previous year,
registering an increase of 10%. After providing for the taxation, the net
profit of the Company was higher at Rs. 636.000 million as against Rs. 521.800
million in the previous year.
ASSAM DUES
As stated in earlier years, the Company entered
into contracts in March 2000 with some manufacturing units in Assam for
purchase of certain quantities of cigarettes at economical prices, on account
of these units enjoying exemption from payment of excise duty in pursuance of
an exemption notification issued by the Central Government earlier. The Government
withdrew the said exemption in January 2001 and, thereupon the said units
closed down their operations. However, by Finance Act, 2003, Union of India
brought in a provision to retrospectively deny the benefit of the said
exemption notification for cigarettes and other tobacco products. Hence the
refunds earlier granted became repayable and this amendment was challenged by
the Assam Units before the Guwahati High Court. The Guwahati High Court was
pleased to admit the writ petitions filed by the said units and ordered
status-quo (i.e. neither excise duty amounts withheld by the Government to be
refunded nor any repayment to be made of the refunds already granted to the
Units). In the meantime Union of India challenged an earlier order of the
Guwahati High Court dated April 4, 2003 upholding the right of the Assam Units
to receive refund of excise duty, by way of Special Leave Petition (SLP) before
the Supreme Court, inter alia, on the ground of the retrospective legislation.
To avoid multiplicity of proceedings the Hon'ble Supreme Court directed
transfer of all pending writ petitions
(challenging the vires of retrospective legislation) at Guwahati High Court to
itself. In accordance with the directions of the Hon'ble Supreme Court of India
the writ petitions have been transferred and will be heard by the Hon'ble
Supreme Court of India along with the Union Of India's pending Special Leave
Petition. The case was heard by the Division Bench of Supreme Court of India
wherein the judgement was reserved, which is now expected sometime in the month
of September 2005.
Based on the legal opinion received from eminent
counsels, your Directors feel confident that the benefit of the Notification
cannot be legally denied consequent upon amendment thereto by the Finance Act,
2003. However, as a measure of precaution a provision for doubtful debts for
the sum aggregating to Rs. 22.70 crore recoverable from the said units had
already been made in the
accounts for the year ended March 31, 2003.
TREASURY OPERATIONS
The Company continues to deploy its surplus
liquidity primarily in debt oriented schemes of different reputed mutual funds.
Such investments are made based on the twin objective of capital preservation
and optimization of returns. A part of the
temporary surplus funds are also invested in liquid/short
term schemes of mutual funds so as to use the
same for monthly payment of excise duty in due
course.
To meet a part of the Company's capital
expenditure on modernization and upgradation of its
manufacturing facilities a foreign currency loan
of USD 10 Million was raised from BNP Paribas,
Singapore carrying interest @ USD 6 months libor
plus 120 basis point. Although libor has
considerably increased, US Dollar has
depreciated against Rupee thereby offsetting the effect of
increased libor to a large extent.
The Company keeps a close watch on the
developments in forex market and obtains forward
covers in respect of its receivables as and when
deemed necessary. Currently it is also considering
actively to enter into a hedging transaction to
safeguard its interest against any further increase in
libor rate.
Biodata:
Godfrey
Philips India(GPIL), promoted in 1936 by Godfrey Philips, London has business
presence in manufacture and marketing of Cigarettes and branded tea. The
company is now a part of KK Modi Group of companies.
Phillips Morris, a major cigarette producer in the world has acquired
full ownership in GPIL through its wholly owned subsidiary Phillips Morris
International Financila Corporation(PMIFC). Then in 1979 PMIFC along with five
other Non-resident Foreign Shareholders reduced their shareholding in GPIL to a
level not morethan 40%. Presently Phillips Morris holds 35.93% stake in
GPIL.
The subsidiaries of the company are International Tobacco Company Ltd,
Chase Investments Ltd, City Leasing and Finance Company Ltd, Manhattan Credity
and Finance Ltd, Kashyap Metal and Allied Industries Ltd, Unique Space
Developers Ltd.
The major Cigarette brands owned by the company are Black and White, Four
Square, Cavander Navy Cut, Red & White, Virgin Gold, Chesterfield,
Originals etc. The company added four new cigaratte brands to its stable i.e
Piper, Tipper, Prince and Jaisalmer in last two year during 2002-03. The Piper
and Tipper being a unique product in the industry is well accepted in the
market. During 2003-04, the company introduced a premium 69mm brand 'Maxus' a
king size quality regular size cigaratte and the company has test launched a
new brand 'Force10' in Nagpur and Ludhiana markets.
Further the company has also lauched three Cigar brands i.e Phillies,
Hav-a-tampa and Don Diego in 2002. These cigars are imported by the company
under an arrangement with altadis of USA, one of the World's leading cigar
manufacturers. The company has taken to outsource cigarettes and marketing
under its brands. In this regard the company has entered into arrangements with
some Assam based Small Scale Industries. In Sep.2003, the one more Cigar brand
Santa Damania was also introduced.
In 1987, it diversified into the blending and manufacture of branded tea
at Guntur, Andhra Pradesh. In 1987, the company commenced the sale of specially
blended and branded loose tea from an exclusive franchised outlet called Tea
City, in Delhi. Distribution network for Tea City was further expanded to
Bihar, Madhya Pradesh and Rajasthan. It also diversified into property
development.
The company's factory at Andheri, Mumbai has been awarded a certificate
of ISO 14001. The certification takes into account the Environmental Management
System in place in the factory enabling it to conserve natural resources.
During 2004-05, the company set up a new pilot Research & Development plant
in Andheri factory.
The company launched the Six-Sigma Initiative called Project 'Lakshya'
during 2004-05 and this will help to enhance the operational efficiency, fostor
innovation, new product development and to implement effective marketing and
distribution programs.
During 2004-05, the company expanded its installed capacity of Cigarettes
by 109 million Nos., and the installed capacity of cigarettes increased to 3377
million Nos.
Publication: TIMES NEWS NETWORK
Date: JULY 19, 2005
Wanna market your brand? Get a woman
for the job
MAYUR SHEKHAR JHA
NEW DELHI: Another bastion falls. All
those who thought that marketing and men were synonymous, need to do a reality
check. Women are making it bigger than ever before in the field of marketing.
The likes of Neeta Kapoor in Godfrey
Phillips, Punita Lal in Pepsi, Leanne Cuts in GlaxoSmithKline, Anne Engerant in
Reckitt Benckiser, Jessie Paul in Wipro, Hina Nagrajan in ICI and Sudipta
Sengupta in Cafe Coffee Day have all made it to the top rung in the marketing
segment in their respective organisations.
What’s driving more and more women to
chase their aspirations in the world of marketing ? And what’s catalysing this
transition?
Uday Chawla, managing partner of head
hunting firm Trans Search feels that there is a growing perception about women
being more responsive and understanding to the requirements of the customer —
the most important aspect of successful marketing.
“More CEOs say that the soft and
subtle approach of women is often more productive than the tried and tested
conventional means,” says Mr Chawla.
However, Purbi Seth of Shilputsi,
another head-hunting firm, feels that women have traditionally been good in
marketing. It’s just that more women are getting into the field now. “In the
past, Vibha Rishi, Chitra Talwar and Vinita Bali have excelled in marketing
roles,” says Ms Seth.
Isn’t it sometimes intimidating to
compete in an otherwise male-dominated sector? Neeta Kapoor of Godfrey Phillips
feels that there is no gender bias and eventually whoever performs is rewarded.
“I have never felt marginalised
despite the top management of my company being male-dominated. I have never
felt under the weather by the fact that we deal in tobacco, which is constantly
under government scrutiny,” says Ms Kapoor.
However, according to Leanne Cuts,
vice-president of marketing in GlaxoSmithKline Consumer Healthcare, some women
do feel intimidated by their male counterparts in the world of marketing.
“There are significant cultural
issues which make it difficult for women to pursue a career in marketing. At
times, women are also branded ambitious in a clearly derogatory sense, and I
have experienced it,” says Ms Cuts.
So is the situation amicable enough
for women to make it big? Ms Cuts feels that Indian organisations are rapidly
becoming more professional, and working to world-class standards, which has led
to a subsequent increase of the representation of women in marketing.
Additionally, Sudipta Sengupta, who
heads marketing operations at Cafe Coffee Day, feels that there has been a
gradual realisation, both among men and women, that no sphere of corporate
world is difficult enough for a woman to explore.
“It is this realisation that has
given women the confidence to take on the challenges of marketing. The
opportunities that women are getting are not out of any charity but a reward of
capabilities,” Ms Sengupta says.
Publication: e-Eighteen Newswire.
Provider: moneycontrol.com
Date: July 1, 2005
Godfrey Phillips Q4 net profit at Rs
21.36cr
Godfrey Phillips has announced its Q4
results. Its net profit is at Rs 21.36 crore (Rs 213.6 million) versus Rs 14.37
crore (Rs 143.7 million).
Its net sales is at Rs 179.15 crore
(Rs 1.79 billion) versus Rs 306.13 crore (Rs 3.06 billion). Its OPM is at
14.41% versus 4.96%. Its FY05 EPS is at Rs 62.66.
The company has declared dividend of
Rs 22 per share.
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 records 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.45.52 |
|
UK
Pound |
1 |
Rs.85.79 |
|
Euro |
1 |
Rs.58.46 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
66 |
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 |