MIRA
INFORM REPORT
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Report Date : |
13.08.2007 |
IDENTIFICATION DETAILS
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Name : |
ECOPLAST LIMITED |
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Registered Office : |
National Highway No.8, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
06.05.1981 |
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Com. Reg. No.: |
04-4375 |
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CIN No.: [Company
Identification No.] |
U25200GJ1981PLC004375 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
SRTE00049A / SRTE00181G |
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PAN No.: [Permanent
Account No.] |
AAACE5030H |
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Legal Form : |
Subject 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 selling polyethylene films for flexible
packaging and other specialty applications. |
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 470000 |
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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 records. 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 : |
National Highway No.8, |
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Tel. No.: |
91-2632-253796/249190 |
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Mobile No.: |
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Fax No.: |
91-2632-253633 |
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E-Mail : |
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Website : |
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Head Office : |
4 Magan Mahal, |
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Tel. No.: |
91-22-2683 0064, 2683 1403 |
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Fax No.: |
91 – 22-2684 0359 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. P. P. Kharas |
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Designation : |
Chairman and Managing Director |
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Name : |
Mr. J. B. Desai |
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Designation : |
Executive Director |
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Name : |
Mr. Bankim B. Desai |
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Designation : |
Director |
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Name : |
Mr. P. D. Karkaria |
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Designation : |
Director |
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Name : |
Mr. J. A. Moos |
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Designation : |
Director |
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Name : |
Mr. D. T. Desai |
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Designation : |
Director (Alternate to Mr. Bankim B.
Desai) |
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Name : |
Mr. N. J. N. Vazifdar |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. B. R. Tarafdar |
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Designation : |
Company Secretary |
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Tel. No. : |
91-2632-249190 |
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Email : |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and selling polyethylene films for flexible
packaging and other specialty applications. |
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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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Co-Extruded Film |
Mts. |
-- |
8030 |
4372 |
GENERAL INFORMATION
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Suppliers : |
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No. of Employees : |
About 300 |
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Bankers : |
Mumbai Samachar Marg Branch, Mumbai – 400 001,
Main Branch, Nani Khatriwad, Valsad – 396 001, |
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Facilities : |
Secured Loan (Rs.
in millions)
Unsecured Loan (Rs.
in millions)
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Akkad Mehta and Company Chartered Accountants |
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Address : |
Vile Parle (West), Mumbai-400 056, |
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Legal Advisors :
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Name : |
M. S. Bodhanwalla and Company |
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Address : |
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Associates : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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10,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 100.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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3,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 30.000 millions |
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[1,500,000 Equity Shares of Rs. 10/- each
have been allotted as fully paid up Bonus Shares by capitalizing Rs.
5,000,000 out of General Reserve and Rs. 10,000,000 out of Revalution
Reserve] |
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FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
30.000 |
30.000 |
30.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
87.400 |
85.300 |
86.200 |
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NETWORTH |
117.400 |
115.300 |
116.200 |
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LOAN FUNDS |
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1] Secured Loans |
46.600 |
30.500 |
23.800 |
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2] Unsecured Loans |
30.600 |
38.000 |
43.200 |
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TOTAL BORROWING |
77.200 |
68.500 |
67.000 |
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TOTAL |
194.600 |
183.800 |
183.200 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
101.400 |
102.400 |
108.600 |
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Capital work-in-progress |
0.000 |
3.600 |
0.000 |
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INVESTMENT |
0.000 |
2.200 |
2.200 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
45.100 |
38.500 |
45.500 |
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Sundry Debtors |
62.700
|
66.200 |
78.700 |
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Cash & Bank Balances |
33.000
|
6.200 |
4.500 |
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Loans & Advances |
7.800
|
6.000 |
8.600 |
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Total
Current Assets |
148.600
|
116.900 |
137.300 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
50.100
|
37.900 |
59.800 |
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Provisions |
5.300
|
3.400 |
5.100 |
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Total
Current Liabilities |
55.400
|
41.300 |
64.900 |
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Net Current Assets |
93.200
|
75.600 |
72.400 |
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TOTAL |
194.600 |
183.800 |
183.200 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
389.200 |
359.500 |
386.000 |
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Other Income |
0.100 |
3.300 |
0.500 |
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Total Income |
389.300 |
362.800 |
386.500 |
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Profit/(Loss) Before Tax |
10.900 |
2.200 |
12.300 |
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Provision for Taxation |
3.900 |
(0.400) |
5.100 |
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Profit/(Loss) After Tax |
7.000 |
2.600 |
7.200 |
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Earnings in Foreign Currency : |
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Export Earnings |
128.349 |
115.716 |
NA |
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Total Earnings |
128.349 |
115.716 |
NA |
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Imports : |
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Raw Materials |
107.275 |
69.134 |
NA |
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Stores & Spares |
1.035 |
0.175 |
NA |
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Total Imports |
108.310 |
69.309 |
NA |
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Expenditures : |
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Raw
Materials Consumed |
241.200 |
227.000 |
228.400 |
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Excise
Duty |
42.100 |
39.800 |
33.000 |
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Power
& Fuel Cost |
19.400 |
19.800 |
22.900 |
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Other
Manufacturing Expenses |
13.000 |
14.700 |
26.500 |
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Employee
Cost |
17.200 |
15.400 |
14.300 |
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Selling
and Administration Expenses |
16.700 |
16.700 |
19.100 |
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Miscellaneous
Expenses |
9.800 |
9.800 |
12.500 |
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Interest
& Financial Charges |
10.200 |
8.200 |
9.200 |
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Depreciation
|
8.800 |
9.200 |
8.300 |
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Total Expenditure |
378.400 |
360.600 |
374.200 |
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QUARTERLY RESULTS
|
PARTICULARS |
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|
30.06.2007 |
|
Type |
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1st
Qtr |
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Sales
Turnover |
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|
86.200 |
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Other
Income |
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|
0.100 |
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Total
Income |
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|
86.300 |
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Total
Expenditure |
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|
76.100 |
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Operating
Profit |
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|
10.200 |
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Interest |
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|
2.000 |
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Gross
Profit |
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|
8.200 |
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Depreciation |
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|
2.300 |
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Tax |
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|
2.500 |
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Reported
PAT |
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|
3.500 |
200706 Quarter 1 :--
Expenditure Includes (Increase) /Decrease in Stock in Trade Rs (4.065) million Consumption
of Raw Materials Rs 60.781 million Staff Cost Rs 4.898 million Other
Expenditure Rs 14.186 million Tax Includes Provision for Current Tax Rs 2.425
million Fringe Benefit Tax Rs 0.075 million Deferred Tax Rs (0.105) million.
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.63 |
0.59 |
0.55 |
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Long Term Debt Equity Ratio |
0.15 |
0.19 |
0.20 |
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Current Ratio |
1.28 |
1.29 |
1.26 |
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TURNOVER RATIOS |
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Fixed Assets |
2.10 |
1.99 |
2.17 |
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Inventory |
9.31 |
8.56 |
11.63 |
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Debtors |
6.04 |
4.96 |
5.11 |
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Interest Cover Ratio |
1.96 |
1.27 |
2.34 |
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Operating Profit Margin (%) |
7.40 |
5.45 |
7.72 |
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Profit Before Interest and Tax Margin (%) |
5.14 |
2.89 |
5.57 |
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Cash Profit Margin (%) |
3.91 |
3.28 |
4.02 |
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Adjusted Net Profit Margin (%) |
1.64 |
0.72 |
1.87 |
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Return on Capital Employed (%) |
10.57 |
5.67 |
12.09 |
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Return on Net Worth (%) |
5.50 |
2.25 |
6.27 |
STOCK PRICES
|
Face Value |
Rs. 10.00 |
|
High |
Rs. 25.25 |
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Low |
Rs. 25.00 |
LOCAL AGENCY FURTHER INFORMATION
History
Incorporated in
May 1981 as a private limited company, Subject
became a public limited company in Jun.'94. The company was promoted by Pheroze
P Kharas. The company commenced commercial production in 1982 with an installed
capacity of 540 TPA of plastic films (mainly LDPE/HDPE or a combination) for
flexible packaging. Subsequently, the capacity was expanded to 2000 TPA.
The company came out with a public issue (at a premium of Rs 30) in Nov.'94 to
part-finance the expansion of its multilayer film capacity to 4500 TPA by
installing a new multilayer blown film co-extrusion line of 2500 TPA. The new
plant went on-stream in Aug.'95.
The
Company commenced its commercial operation in Sept. 1982, with a plant of
annual capacity of 540 MT. The Company was initially registered as an SSI Unit.
The Company expanded its capacity in 1986 to 1400 MT/year and was registered as
a DGTD Unit. The two Co-extrusion lines were supplied by Paul Kiefel, GmbH,
Over the decade, the Company has been setting standards on
quality and innovating on multilayer film structures to provide the required
film properties critical to pack, preserve and display a wide range of
products.
During 2003-04 the company has replaced its old Blown Film line(installed in 1982 with a capacity of 670 MT Capacity) with a new Blown Film line with 1200 MT capacity per annum at a cost of Rs.11.1 Million.
Jampore Printers Ltd engaged in Multicolour Printing on Polyethylene Film
became a subsidiary company in the year 1999-2000.
Operations
During Q2 & Q3, 2006 the raw material prices increased by 30%, with a reduction of 5% to 10% (depending on the grade) in Q4.
Strong resistance from customers both domestic and export to film price
increase forced the Company to sacrifice some business which had become
unremunerative. Despite this, the over all growth in sales revenue was at 8.5%,
over the previous year.
During the year, a planned and successful beginning was made in shifting focus
to non-packaging applications resulting in an increase of 130% in volume, of
specialty films over the previous year. This trend is likely to continue in
2007- 08.
The Production team worked on improving the operational efficiency of plants,
bringing about cost reduction in power and lower scrap rates. The Plants
operated at optimum outputs with 20% improved efficiency over the previous
year.
Manpower efficiency in operations was improved by rationalizing and
reorganizing work, resulting in an enthused working environment and improved
interpersonal relationships.
Management Discussion
and Analysis
Operations:
The main reason for improvement in profits was the commercial introduction of
specialty high value films. A volume of 11% in specialties, contributed 35% to
the gross margin. This is just the beginning.
While sales income increased by 8.6%, the gross margin improved by 20%,
resulting in an increase in Operating Profit by 72%.
Export incomes were also higher by 10%, mainly due to the introduction and
acceptance of specialty films.
Direct Costs:
Raw materials costs over the last three years have increased by over 100% with
an increase of 20% to 26% (depending on the raw material grade), during the
year. The ratio of raw material cost to selling price of the film was at
69%.
After raw materials, power is the next highest cost component. With planned
efficiency improvements, the power cost per kg. of film reduced by Rs.0.37,
amounting to a significant annual savings despite a 9% increase in Electricity
Tariff and 13% increase in price of Light Diesel Oil, used for captive power generation.
Interest:
Despite the increase in raw material costs, the corresponding increase in film
prices, and a 2.25% increase in Bank interest rate, the interest cost was well
under control. Alternate, cheaper working capital funding was a part of the
cost control strategy.
Quality Acceptance:
Inspite of the introduction of specialty films, quality acceptance by customers
was at 99.5% of sales volume. One major European multinational customer in
India, has claimed that with supplies of over 1600 MT of film made by Ecoplast
since 2002, not a single customer complaint was received for the laminate,
related to the quality of film.
The company’s fixed asset of important value includes Land, Building, Plant
and Machineries, Equipments and Utilities, Electrical Installation, Vehicles,
Furniture and Fixtures and Office Equipments.
Contingent Liabilities
(Rs.
in millions)
|
|
31.03.2007 |
31.03.2006 |
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On account of capital commitments |
20.730 |
0.264 |
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Customs duty on raw materials imported under advance licensing,
against which export obligation is to be fulfilled |
0.484 |
0.019 |
The films currently manufactured
are known as multilayer films produced by the blown film Co-extrusion process.
Multilayer films, are a
combination of two or more thermoplastics co-extruded to form one homogenous
film, but with distinct individual layers, which depending on their structure,
can provide a range of properties not possible with monolayer films.
The
advanced Technology of the new line with respect to equipment design and
computerised process controls provided :
v Higher outputs per cm. of
die circumference.
v Narrower tolerance in
circumferential thickness of the film.
v
Improvement in film flatness (critical
for subsequent high speed
lamination process).
v
Improvement in yield tolerances, i.e.
weight per unit area of film.
v
Roll winding characteristics and
subsequent easy unwinding of films with "tack" or "very
low" coefficient of friction
(hitherto not possible).
v
Film widths upto 1.5 mts. thereby
opening up opportunities for new applications.
The
new line enabled the Company to make complex film structures such as those
required by :
v
Specialty Laminate Producers
v
Aluminum Foil laminators using co-polymer
based films for Jelly-Filled-Telecom-Cables.
v
Lamitube producers (Toothpaste and
Facial Creams).
v
Auto ancillaries for bonding different
substrates for manufacture of Automobile Hood Liners with
adhesive films.
The Pharmaceutical Industry for lamination to PVC
and subsequent "Blister" formation for packing tablets
The Company's multilayer co-extruded films are used for packaging of a
wide range of products, under the following categories:
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Agro-Products |
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Cable Wrap |
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Cosmetics & Toiletries |
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Food & Beverages |
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Pharmaceuticals |
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Speciality Applications |
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AWARDS:
v PFFCASTAR 2003
Awarded in Recognition of Excellence in Product Development and
Development of New Structures (Flexible) by Paper, Film and Foil
Convertors Association,
v PLEXCOUNCIL AWARDS
The Highest Recognition for Exports of Multilayer Films for 2001-2002 & 2002-2003,
awarded by PLEXCOUNCIL.
(SPONSOR: The Ministry of Commerce & Industry, Department of
Commerce, Government of
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources including
but not limited to: The Courts,
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.40.67 |
|
|
1 |
Rs.82.12 |
|
Euro |
1 |
Rs.55.60 |
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 |
|
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--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
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. |
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 |
|