MIRA
INFORM REPORT
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Report Date : |
19.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
JASCH INDUSTRIES
LIMITED |
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Registered Office : |
43/5, Bahalgarh Road, P.O. Bahalgarh, Distt. Sonepat - 131 021, Haryana, India. |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
11.12.1985 |
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Com. Reg. No.: |
05-22758 |
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CIN No.: [Company
Identification No.] |
L24302HR1985PLC022758 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELJ01886D |
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PAN No.: [Permanent
Account No.] |
AAACJ0766B |
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Legal Form : |
A Public Limited
Liability Company. The company share listed on the stock exchange. |
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Line of Business : |
The company is engaged in manufacture of Flexible PU Foam,
Waste, Parings Cutting of PU Foam, PU Resin & Adhesive, PU/PVC Leather
Cloth (Coated Fabrics), Fabric Laminated with Flexible PU Foam, Remnants of
Coated Fabrics, Flexible PU Foam, Remnants of Coated Fabrics, Flexible PVC
Film, Non Woven Fabric and Coated Fabric, Needle Loom Felt and Plastic Film
Lamination. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED
CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to
meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 550000 |
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Status : |
Satisfactory |
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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 satisfactory track. Directors are
reported as experienced and respectable businessmen. Trade relations are
fair. Business is active. Payments are usually correct and as per
commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office/ Factory: |
43/5, Bahalgarh Road, P.O. Bahalgarh, Distt. Sonepat - 131 021, Haryana, India. |
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Tel. No.: |
91-126-543 1363 / 542 3714 / 541 8205 |
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Fax No.: |
91-126-543 5484 |
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Corporate
Office : |
Jasch House,
Behind Khalsa Collage, 5105/01, Dev Nagar, Karol Bagh, New Delhi – 110 005,
India. |
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Branch: |
107, Shivlok House-II, Karampura Commercial Complex, New Delhi
- 110 015, India |
DIRECTORS
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Name : |
Mr. J. K. Garg |
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Designation : |
Chairman |
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Name : |
Mr. S. C.
Garg |
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Designation : |
Managing Director |
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Name : |
Mr. Satish
Kumar Garg |
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Designation : |
Whole Time Director |
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Name : |
Mr. Manish Garg |
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Designation : |
Whole Time Director |
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Name : |
Mr. Ramnik Garg |
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Designation : |
Whole Time Director |
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Name : |
Mr. Naveet Garg |
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Designation : |
Whole Time Director |
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Name : |
Mr. Gian Prakash,
IAS (Retd.) |
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Designation : |
Director |
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Name : |
Mr. S. K.
Khandelwal |
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Designation : |
Director |
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Name : |
Mr. Dr. K. C.
Varshney |
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Designation : |
Director |
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Name : |
Mr. Dr. Ashok
Mittal |
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Designation : |
Director |
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Name : |
Mr. Kuldeep
Singal |
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Designation : |
Director |
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Name : |
Mr. R. P.
Gupta |
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Designation : |
HSIDC Nominee Director |
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Name : |
Mr. O. P. Garg |
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Designation : |
Executive Director |
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Name : |
Mr. S. K. Verma |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
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Names of
Shareholders |
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No. of Shares |
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A)
Share holding of Promoter and Promoter Group2 |
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1) Indian |
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a) Individuals/Hindu
Undivided Family |
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6043340 |
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b) Central Government/State Governments |
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0 |
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c) Bodies
Corporate |
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0 |
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d) Financial
Institutions/ banks |
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0 |
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e) Any Other (specify) |
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0 |
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Sub Total: |
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6043340 |
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2) Foreign |
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a) Individuals
(Non- Resident)/ Individual/ foreign Individuals) |
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0 |
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b) Bodies
Corporate |
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0 |
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c) Institutions |
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0 |
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d) Any Other
(specify) |
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0 |
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SubTotal(A) (2) |
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0 |
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Total Share holding of promoter and promoter
Group (A)=(A) (1)+(A)(2) |
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6043340 |
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B) Public Shareholding3 |
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1) Institutions |
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a) Mutual Funds |
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1100 |
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b) Financial
Institutions/ Banks |
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0 |
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c) Central
Governmetn/ State Governments |
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0 |
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d) Venture Capital Funds |
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0 |
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e) Insurance
Companies |
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0 |
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f) Foreign Institutional Investors |
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0 |
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g)Foreign Venture Capital Investors |
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0 |
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h)any Other (specify) |
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0 |
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Sub Total(B)(1): |
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0 |
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2) Non
Institution: |
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a) Bodies Corporate |
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346171 |
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b) Individuals |
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1) Individual share holders holding nominal share capital up to Rs.
0.100 Millions |
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1612161 |
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2) Induividual Sahre holding Nominal Sahre Capitla in Excess of
Rs.0.100 Millions |
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1236614 |
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c) Any Other (specify) |
|
22149 |
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Sub Total: |
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3217095 |
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Total Public
shareholding(B)=(B) |
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3217095 |
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c) Shares held
by Custodians and against which Depository Receipts have been issued |
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0 |
BUSINESS DETAILS
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Line of Business : |
The company is engaged in manufacture Flexible PU Foam,
Waste, Parings Cutting of PU Foam, PU Resin & Adhesive, PU/PVC Leather
Cloth (Coated Fabrics), Fabric Laminated with Flexible PU Foam, Remnants of
Coated Fabrics, Flexible PU Foam, Remnants of Coated Fabrics, Flexible PVC
Film, Non Woven Fabric and Coated Fabric, Needle Loom Felt and Plastic Film
Lamination. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Installed
Capacity (Qty) |
Actual
Production (Qty) |
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Beta Guage and
Parts (44+126) |
Nos. |
-- |
203 |
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PU/PVC Leather Cloth (Coated Fabrics) |
Millions
Mtrs. |
1.800 |
1.411 |
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Non Woven |
Millions
Mtrs. |
-- |
0.082 |
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Needle Loom Felt |
Millions
Mtrs. |
-- |
0.211 |
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Cellular
Plastic Sheets |
Millions
Mtrs. |
-- |
0.094 |
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PU Resin & Adhesive |
Millions
Kgs. |
36000.000 |
0.030 |
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Fabric Laminated with Flexible PU Foam |
Millions
Mtrs. |
-- |
-- |
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Remnants of Coated Fabrics |
Millions
Kgs. |
-- |
0.067 |
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Various Cut
Pieces |
Millions
Kgs. |
-- |
0.034 |
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Raw Materials
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Kgs./ Mtrs.
|
-- |
-- |
Since the Industry
has been De-licensed, Licensed Capacity reporting is discontinued.
Classifications of products are as per Excise Tariff, Installed capacity is as
Certified by the management.
Originally the Installed capacity of PU/PVC Leather Cloth Division was estimated at 3.6 Millions Meter p.a. on the basis of the average thickness of Leather Cloth at 1.0mm & operation of the plant in three shifts. However the average thickness of Leather Cloth being produced by the company is not less than 1.5 mm & the plant is being operated for not more than 12 Hours per day. In view of this Installed capacity has been revised to 1.800 Millions Meter p.a. reflecting the current condition.
GENERAL
INFORMATION
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No. of Employees : |
200 |
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Bankers : |
Ø
Bank of Baroda Ø
Punjab National Bank Ø
State Bank of India |
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Facilities : |
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Banking Relations : |
Satisfactory |
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Auditors : |
Arora &
Choudhary Associates Chartered
Accountant |
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Address: |
8/28, W.E.A.,
Abdul Aziz Road, Karol Bagh, New Delhi – 110 005, India. |
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Sister Concern : |
Jesch Financial Services Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
12000000 |
Equity Shares |
Rs. 10/- each |
Rs. 120.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
11330000 |
Equity Shares |
Rs. 10/- each |
Rs. 113.000 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
113.300 |
113.300 |
113.300 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
33.010 |
26.510 |
21.300 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
146.310 |
139.810 |
134.600 |
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LOAN FUNDS |
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1] Secured Loans |
81.087 |
76.901 |
64.500 |
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2] Unsecured Loans |
2.005 |
2.000 |
0.000 |
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TOTAL BORROWING |
83.092 |
78.901 |
64.500 |
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DEFERRED TAX LIABILITIES |
14.326 |
6.066 |
0.000 |
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TOTAL |
243.728 |
224.777 |
199.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
127.066 |
114.652 |
109.500 |
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Capital work-in-progress |
0.000 |
12.137 |
6.200 |
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INVESTMENT |
0.067 |
0.067 |
0.300 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
73.934
|
70.848 |
71.600 |
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Sundry Debtors |
69.101
|
51.169 |
41.300 |
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Cash & Bank Balances |
4.278
|
3.281 |
1.900 |
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Other Current Assets |
4.896
|
4.896 |
0.000 |
|
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Loans & Advances |
7.766
|
3.949 |
7.800 |
|
Total Current Assets |
159.975
|
134.143 |
122.600 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
43.380
|
36.222 |
36.300 |
|
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Provisions |
0.000
|
0.000 |
3.200 |
|
Total Current Liabilities |
43.380
|
36.222 |
39.500 |
|
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Net Current Assets |
116.595
|
97.921 |
83.100 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
243.728 |
224.777 |
199.100 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other income] |
323.717 |
262.746 |
232.900 |
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|
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Profit/(Loss)
Before Tax |
16.820 |
12.311 |
4.000 |
|
Provision for
Taxation |
6.316 |
0.976 |
0.300 |
|
Profit/(Loss)
After Tax |
10.504 |
11.335 |
3.700 |
|
|
|
|
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Total Expenditure |
306.786 |
250.054 |
209.500 |
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
|
Sales Turnover |
84.200 |
96.000 |
97.800 |
|
Other Income |
00.000 |
00.000 |
00.000 |
|
Total Income |
84.200 |
96.000 |
97.800 |
|
Total Expenditure |
73.800 |
85.200 |
87.800 |
|
Operating Profit |
10.400 |
10.800 |
10.000 |
|
Interest |
03.100 |
02.300 |
02.400 |
|
Gross Profit |
07.300 |
08.500 |
07.600 |
|
Depreciation |
02.700 |
02.900 |
02.900 |
|
Tax |
00.500 |
00.600 |
00.500 |
|
Reported PAT |
04.100 |
04.800 |
04.100 |
200606 Quarter 1 --------------- Notes Expenditure Includes
(Increase)/Decrease in Stock in Trade Rs (5.576) million Consumption of Raw Materials
/ Consumables Rs 68.738 million Staff Cost Rs 1.942 million Other Expenditure
Rs 8.712 million Tax Indicates Provision for Tax (MAT) Status of Investor
Complaints for the quarter ended June 30, 2006 Complaints Pending at the
beginning of the quarter Nil Complaints Received during the quarter 03
Complaints disposed off during the quarter 03 Complaints unresolved at the end
of the quarter Nil 1. Previous Years / Period Figures have been regrouped
wherever necessary. 2. The results have been reviewed by the Audit Committee
and taken on record at the Board Meeting held on July 22, 2006. 3. These
results are subject to Limited Review by the Statutory Auditors.
200612 Quarter 3 --------------- Notes Expenditure Includes
(Increase)/Decrease in Stock in Trade Rs (1.408) million Consumption of Raw
Materials / Consumables Rs 74.319 million Staff Cost Rs 3.098 million Other
Expenditure Rs 11.786 million Tax Includes Provision for Provision for Tax
(MAT) Rs 0.529 million Provision for Deferred Tax, FBT etc. Rs 0.087 million
Status of Investor Complaints for the quarter ended December 31, 2006
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter Nil Complaints disposed off during the quarter Nil
Complaints unresolved at the end of the quarter Nil 1. Previous Years / Period
Figures have been regrouped wherever necessary. 2. The results have been
reviewed by the Audit Committee and taken on record at the Board
Meeting held on January 21, 2007. 3. These results are subject to Limited
Review by the Statutory Auditors.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Equity Ratio |
0.57 |
0.52 |
0.51 |
|
Long Term Debt-Equity Ratio |
0.15 |
0.14 |
0.14 |
|
Current Ratio |
1.33 |
1.37 |
1.46 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.57 |
1.42 |
1.30 |
|
Inventory |
4.47 |
3.72 |
3.55 |
|
Debtors |
5.38 |
5.73 |
6.21 |
|
Interest Cover Ratio |
2.81 |
2.19 |
1.65 |
|
Operating Profit Margin(%) |
11.34 |
12.19 |
11.33 |
|
Profit Before Interest And Tax Margin(%) |
8.06 |
8.53 |
7.44 |
|
Cash Profit Margin(%) |
6.52 |
7.92 |
6.62 |
|
Adjusted Net Profit Margin(%) |
3.24 |
4.26 |
2.72 |
|
Return On Capital Employed(%) |
11.65 |
10.82 |
8.61 |
|
Return On Net Worth(%) |
7.34 |
8.24 |
4.75 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs.7.90/- |
|
Low |
Rs.7.01/- |
LOCAL AGENCY
FURTHER INFORMATION
Engaged in the manufacture of PU foam and laminated products (inst. cap. : 240 tpa; 0.5 Million mtr pa), Jasch Industries (JIL) has set up manufacturing facilities for PU resin, PU synthetic leather and non-woven fabric for captive consumption in manufacturing PU leather.
While
the installed capacity for PU resins is 3600 tpa, that for synthetic leather and
non-woven fabric is 3.6 Million mtr pa each. Production of PU resin and PU
leather commenced in 1994 and that of non-woven fabric from 1995. The company
has a technical collaboration with Duck sung Chemical Company, Korea, which has
over two decades of experience in the manufacture of PU resin and PU leather.
Jasch Plastics, a firm managed by the promoters of JIL, manufactures PVC
synthetic leather. The promoters manage two other concerns, which produce PVC
foam leather and blowing agents for the PVC industry.
During 1997-98, the company has developed in-house and test marketed a product
known as Beta/Gamma Thickness Gauge. This product was initially designed to
measure the thickness of coated fabric being manufactured by the company.
However market enquiries made by the company have revealed that this product
has considerable market potential. Therefore the company now plans to produce
this product on commercial basis.
During the year 1999-2000, the Company has negotiated a package of relief and
concessions with ICICI Ltd. resulting in reschedulement of repayment period of
the term loan and reduction in rate of interest from 18.5% to 14.5 %, which
will substantially reduce the interest burden of the Company.
During the year 2000-01,the sale of the company has registered a growth of
9.20% over the previous year. Operating Profit of the company has also
registered a growth of 9.30% over the previous year and this would have been
higher, but for the increase in the prices of petro based raw material and fuel
oil during the year 2000-01.
The interest and finance charges have declined sharply by about 16.00% during
the year 2000-01,due to full impact of reduction in interest rate from 18.50%
to 14.50% on term loan of the financial institutions, repayment of term loans
and better inventory and working capital management.
OPERATIONS &
PERFORMANCE:
The company has achieved
sales of Rs.323.710 Millions during 2005-2006 which were 22.15% higher as
compared with the sales of previous year. The sales of Synthetic Leather
Division at Rs.213.785 Millions during 2005-2006 were substantially higher by
25.8% as compared with the sales of Rs.172.747 Millions in the previous year.
The Electronic Gauge Division also increased by 15.20% to Rs.106.332 Millions during
2005-2006 as compared with sales of Rs.92.265 Millions in the previous
year.
The exports including deemed exports of Electronic Gauges registered sharp
increase of 66% during the year at Rs.50.293 Millions as compared with export
of Rs.30.249 Millions in the previous year. In fact, exports constituted 47.3%
of sales of Electronic Gauges Division during the year under review.
The improvement in the sale of Synthetic Leather Division is mainly due to phased
implementation of modernisation scheme during 2004 to 2006 resulting in
widening of product range and improvement in quality of products. However,
Synthetic Leather Division continues to suffer cheap Imports from China and
Taiwan besides sharp escalation in prices of petroleum based raw materials and
chemicals.
The company could withstand competition successfully to a certain extent due to
reduction in the cost of inputs, particularly power & fuel due to
modernisation of machinery & improvement in productivity.
The performance of Electronic division was quite satisfactory during the year
with sharp increase in exports to China, Bangladesh, Egypt, South Africa,
Turkey, etc. The company has received recognization as approved vendor from LN
Mittal Group of Steel Companies in various countries for supply of Electronic
Gauges. The Company is also participating in National & International Trade
Fair displaying its Electronic Gauges, which is expected to result in more
order inflows and hence better performance in the next 2-3 years.
Operating profit before interest, depreciation, Income Tax, Fringe Benefit Tax,
Deferred Tax and exceptional items and prior period adjustments has increased
to Rs.36.784 Millions i.e. an increase of 12% over the previous year mainly due
to improved performance of Synthetic Leather Division. The interest &
Finance charges have marginally declined to Rs.92.90 despite substantial
increase in sales due to repayment of loan during the year and decline in
interest rate on cash credit facility & term loan.
The gross profit before depreciation has also increase to Rs.27.494 Millions
during the year as compared with Rs.22.420 Millions in the previous year. After
providing depreciation of Rs.10.565 Millions & provision of Income Tax,
Fringe Benefit Tax & Deferred Tax of Rs.6.185 Millions, the company has
earned net profit of Rs.10.504 Millions which is marginally less as compared to
previous years net profit of Rs.11.335 Millions mainly due to provision of
deferred tax of Rs.4.256 Millions during the year consequent to capitalization
of assets of modernization scheme. Excluding notional deferred tax the net
profit of the company would have been higher at Rs.14.508 Millions i.e. an
increase of 28.80% over the previous year's profit.
INSURANCE CLAIM:
As reported in the previous years, one of the Plants manufacturing PU Foam
Laminated products along with inventory was completely destroyed in a fire
accident in November 2001. Although the company had received the insurance
claim from the Insurance Company, the same was highly inadequate (claim of only
Rs.8.600 Millions was received during 2004-2005 against the book value of
Rs.13.500 Millions destroyed in fire) and was received after in ordinate delay.
As such, the Company has initiated legal proceedings against the Insurance
Company for recovery of balance amount of insurance claim and currently the
matter is pending in Delhi High Court.
Comprehensive insurance cover of adequate amount has been taken for the
company's building, plant & machinery and inventory.
EXPANSION
SCHEME:
Enthused by the improved
performance of the Synthetic Leather Division, the management has decided to
take up an expansion scheme envisaging installation of a high speed and fuel
efficient PU Coating Machine at a capital cost of Rs.41.000 Millions, proposed
to be financed by term loan of Rs.30.000 Millions from State Bank of India and
balance Rs.11.000 Millions from internal cash accruals. New, PU Coating Plant
would produce PU Synthetic Leather for use in Upholstery, garment, sports goods
and automobiles, besides footwear industry. The Expansion Scheme is expected to
be completed during the current financial year.
FUTURE PROSPECTS:
Despite tough competition from imported goods from China & Taiwan, the
management is hopeful of better performance of Synthetic Leather Division in
view of many initiatives taken for cost reduction and improved sales
realization consequent to development of new products. Performance will improve
further after completion of Expansion Scheme. Electronic Gauge Division is also
having domestic and export orders of more than 50.000 Millions. In view of
this, barring unforeseen circumstances, the management is hopeful of higher
sales and profits during the current year.
BACKGROUND:
Jasch Industries Ltd. manufactures PVC/PU Synthetic Leather & Allied
Products & Nucleonic & X-Ray based Thickness Gauging System in
Electronic Division. The major business segment & their product
applications are as follows:
|
Business Segment |
Product Applications |
|
PVC/PU Synthetic Leather & Allied Products (Non- Woven Fabrics, Needle Punched Felt, Laminated Products etc. |
Footwear, Garment, Upholstery, Luggage & Sport Goods. |
|
Electronic Automation Division |
On line measurement of Thickness, Grammage, Moisture & Ash content in Paper Industry. On line measurement of Coating/ Thickness in Plastic, Steel Sheet Rolling, Galvanized Sheet, Aluminum Foil & Non Ferrous Sheet Rolling Industries. |
|
Business
Distribution |
2005-2006 |
|
|
|
Rs. In
Millions |
(%) |
|
PVC/PU
Synthetic Leather |
217.386 |
67.15% |
|
Nucleonic &
X-Ray Thickness Gauding System |
106.332 |
32.85% |
|
Total: |
323.718 |
100.00 |
INDUSTRY STRUCTURE AND
DEVELOPMENT:
PVC & PU Synthetic Leather is mostly used in Footwear Industry as raw
material for Shoe-Upper, Lining, Insole, Chappal & Sandal Straps etc. It is
also used in Garment as Lining Material, as Automobile Seat Cover &
Furniture upholstery material, in Ladies & Gents Purses and Bags and in the
manufacture of sports goods.
Synthetic Leather Industry in India is badly fragmented & most of the
players are in small scale and unorganized sector manufacturing cheap quality
products. The Industry is suffering due to tough competition from imported
material from China, Taiwan, Hongkong & Korea, which enjoy the benefits of
economics of scale & hence lower cost of production.
RESOURCE
UTILIZATION:
(i) Fixed Assets:
The gross fixed assets (including capital work in progress) as at 31st March,
2006 were Rs.217.388 Millions as compared to Rs.206.675 Millions in the
previous year. The addition of fixed assets of Rs.10.713 Millions was mainly on
construction of additional factory building, installation of balancing machinery
& utility equipments under modernisation scheme of Synthetic Leather
Division.
(ii) Current Assets:
The net current assets as on 31st March, 2006 were Rs.116.597 Millions as
compared with Rs.97.922 Millions in the previous year resulting in increase of
Rs.18.675 Millions for sustaining higher level of production and sales.
(iii) Term Loan and Working Capital:
The Company changed its Bank from Bank of Baroda, New Delhi to Punjab National
Bank, Sonepat both for term loan and working capital for better operational
flexibility and lower rate of interest during July, 2005. The company is
regularly servicing its term loan liabilities. The working capital borrowing
from Bank increased by about Rs.6.600 Millions during the year, for financing
higher level of production and sales. Overall secured debt of the company
increased marginally from Rs.76.901 Millions as on 31-03-2005 to Rs.81.087
Millions against net worth of Rs.146.310 Millions indicating overall debt
equity ratio at 0.55:1 as on 31st March, 2006, reflecting quite satisfactory
debt profile of the company.
RISK MANAGEMENT:
Risk is an integral
part of any business, more so in India. A brief evaluation of business risk of
Jasch Industries Ltd. as perceived by the Management is as under:
i. Business Segment Risk:
a.
User Industry
Concentration:
PVC/PU
Synthetic Leather is used across a wide spectrum of Industries. However Jasch
Industries Ltd's products are mostly (upto 75% of total) used in Footwear
Industry. Therefore, the fortunes of the company are invariably linked with
that of Footwear Industry. Any downward trend in Footwear Industry will have
significant impact on the company. The company is making efforts to increase
usage of its products in other Industries such as Automobile & General
purpose Up-holstery, Sports Goods and Garment Industries & it is hoped that
over the next few years the share of Footwear Industry may come down to
60%.
b. Customer & Geographical concentration:
Excessive
exposure to a few large clients has the potential to adversely affect the sales
and profitability in view of failure/shift of clients to other manufacturers. Fortunately, the company's
customers and dealers are fairly spread out across the country.
FINANCIAL RISK:
(a)
Currency Risk:
The
currency risk emerges from the potential upward or downward fluctuations in
foreign currency. The Company's foreign exchange spending by way of import of
raw materials and consumables currently constitutes only 24.7% of total cost of
raw material and consumables. Therefore, there is no significant long term
currency risk. Further, the Thickness Gauging System has export orders on hand,
which will provide cushion by way of natural hedge on foreign exchange
transactions. The company incurred foreign currency expenditure of Rs.51.114
Millions during the year, against exports in foreign currency were Rs.39.770
Millions (excluding deemed exports), leaving a small deficit of Rs.11.344
Millions. The company's foreign currency transactions are on current account basis
and there is no deferred liability in terms of foreign exchange.
(b) Interest and Leverage Risk:
The interest rate on the company's debt is continuously declining with
repayments, which will have positive impact on the company's financial. The Company's
debt is also declining continuously and average rate of interest on term loan
and working capital borrowings has declined during 2005-2006.
Fixed Assets:
Land, Building, Furniture & Fittings, Plant & Machinery,
Vehicles, Fire Fighting Equipment, Air Conditioners, Computers, Generator Set,
and Office Appliances etc.
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.41.99 |
|
UK Pound |
1 |
Rs.84.22 |
|
Euro |
1 |
Rs. |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
54 |
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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|