MIRA
INFORM REPORT
|
Report Date : |
03.02.2007 |
IDENTIFICATION
DETAILS
|
Name : |
SI
GROUP INDIA LIMITED |
|
|
|
|
Registered Office : |
Plot
No. 2/1, TTC Industrial Area, Thane Belapur Road, Navi Mumbai – 400073,
Maharashtra, India |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2006 |
|
|
|
|
Date of Incorporation : |
01.07.1963 |
|
|
|
|
Com. Reg. No.: |
11-12674 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L99999MH1963PLC012674 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
MUMS04774A |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACH7323L |
|
|
|
|
Legal Form : |
Public
Limited Liability Company The
Company’s shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturer of Heavy Organic Chemicals |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD
5000000 |
|
|
|
|
Status : |
Satisfactory
|
|
|
|
|
Payment Behaviour : |
Slow
by average 30 days |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject
is an established company having moderate track. Financial position is
moderate. Payments are slow by average 30 days. The
company can be considered moderate for business dealings at usual trade terms
and conditions. |
LOCATIONS
|
Registered Office : |
Plot
No. 2/1, TTC Industrial Area, Thane Belapur Road, Navi Mumbai – 400073,
Maharashtra, India |
|
Tel. No.: |
91-22-27681153
/ 27672038 / 27611901 / 27681154 / 27683328 |
|
Fax No.: |
91-22-27671848
/ 27685653 / 27682589 |
|
E-Mail : |
|
|
Website: |
|
|
|
|
|
Corporate
Office : |
Air
India Building, Nariman Point, Mumbai – 400021, India |
|
Tel.
No.: |
91-22-22024224 |
|
Fax
No.: |
91-22-22042379 |
|
E-Mail
: |
|
|
Website : |
|
|
|
|
|
|
|
|
Import
/ Export Department: |
Post
Office Box 27, Thane Belapur Road, Navi Mumbai – 400703, India |
|
Tel.
No.: |
91-22-27683328
/ 27681153 / 27681154 |
|
Fax
No.: |
91-22-27611508 91-22-27671848
/ 27685653 |
|
E-Mail
: |
|
|
Website : |
|
|
|
|
|
Rasal Unit : |
Village
Rasal, Post Office Pali, Taluka Sudhagad, District Raigad – 410205 |
|
Tel No.: |
91-2142-242225
/ 242210 |
|
Fax No.: |
91-2142-242996 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Lote Unit : |
Plot
No D-1/3, MIDC,Lote Parshuram, Taluka – Khed, District – Ratnagiri – 415722 |
|
Tel No.: |
91-2356-272246
/ 272129 |
|
Fax No.: |
91-2356-272006
|
|
E-Mail : |
|
|
Website : |
|
|
|
|
DIRECTORS
|
Name : |
Mr
Charles G Griswold (upto 16.06.2006) |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr
Ashley Palm (upto 03.03.2006) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. G C Vasudeo |
|
Designation : |
Director
– Finance (Alternate to Mr Heather Ward) |
|
|
|
|
Name : |
Mr. Suresh N Talwar |
|
Designation : |
Alternate
Director (Alternate to Mr Malcom MacCormick) |
|
|
|
|
Name : |
Mr. R M Pandia |
|
Designation : |
Vice
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. B Chakrabarti |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. A Malcolm MacCormick |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Richard Barlow |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Heather Ward |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. B V Bhargava |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P N Ghatalia |
|
Designation : |
Additional
Director |
|
|
|
|
Name : |
Mr. D Paul Tilley |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ravindra
V Nagarkar |
|
Designation : |
Additional
Director |
KEY EXECUTIVES
|
Name
: |
Mr K
Shankar |
|
Designation
: |
Executive
Vice President – Marketing |
|
|
|
|
Name
: |
Mr D B
Satam |
|
Designation
: |
General
Manager – Human Resource |
|
|
|
|
Name
: |
Mr P S
Kumbhar |
|
Designation
: |
General
Manager – Research and Development |
|
|
|
|
Name
: |
Mr S S
Gokhale |
|
Designation
: |
General
Manager – Exports |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of Heavy Organic Chemicals |
|
|
|
|
Products : |
Petro
- Chemicals
Perfumary
Chemicals
Pharmaceutical
Intermediates ·
Isobutyl
Benzene ·
2,6
– Diisopropyl Phenol Performance
Resin
|
|
|
|
|
Exports to : |
The company’s Exports are
mainly of speciality chemicals. These cover several destinations including
south East Asia, the Far East, the U S A, Western Europe, Australia, the
Middle East and South Africa. The company already has the status of an export
House. In additional some exports were routed through third party as part of
a strategic alliance. |
PRODUCTION
STATUS
|
Particulars |
Unit |
|
Installed Capacity |
Actual Production |
|
Basic Chemical |
Matrix Tones |
|
31.03.2006 – 81300 31.03.2005 - 78300 |
31.03.2006 – 57223 |
|
Industrial Solvents |
|
|
31.03.2006 - 33360 31.03.2005 – 33360 |
31.03.2006 – 29872 |
|
Performance Resins |
|
|
31.03.2006 – 2000 31.03.2005 – 2000 |
31.03.2006 – 2576 |
|
Others |
|
|
31.03.2006 – 49270 31.03.2005 – 49270 |
31.03.2006 – 29975 |
|
|
|
|
|
|
GENERAL
INFORMATION
|
No. of Employees : |
About
300 |
|
|
|
|
Bankers : |
|
|
|
|
|
Auditors : |
BSR
and Company Chartered
Accountants |
|
|
|
|
Associates : |
|
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
6,00,00,000 |
Equity
Shares |
Rs. 10/- each |
Rs. 600.000 Millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
4,23,06,250 |
Equity
Shares |
Rs. 10/- each |
Rs. 423.063 Millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 (12 months) |
31.03.2005 (15 months) |
31.12.2004 (12 months) |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
423.063 |
423.063 |
241.800 |
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
3] Reserves & Surplus |
920.149 |
804.503 |
280.900 |
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH |
1343.212 |
1227.566 |
522.700 |
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
761.271 |
170.975 |
110.300 |
|
2] Unsecured Loans |
646.198 |
1098.115 |
1215.200 |
|
TOTAL BORROWING |
1407.469 |
1269.090 |
1325.500 |
|
DEFERRED TAX LIABILITIES |
166.665 |
228.465 |
|
|
|
|
|
|
|
TOTAL |
2917.343 |
2725.121 |
1848.200 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1338.031 |
1135.693 |
1175.000 |
|
Capital work-in-progress |
109.298 |
205.957 |
131.900 |
|
|
|
|
|
|
INVESTMENT |
10.867 |
11.367 |
23.500 |
|
DEFERREX TAX ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
1152.688
|
1257.078 |
619.000 |
|
Sundry Debtors |
938.366
|
1127.650 |
632.500 |
|
Cash & Bank Balances |
127.364
|
28.725 |
44.400 |
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
Loans & Advances |
453.031
|
289.014 |
261.000 |
|
Total Current Assets |
2671.449
|
2702.467 |
1556.900 |
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
Current Liabilities |
1183.270
|
1307.912 |
1000.500 |
|
Provisions |
29.029
|
22.451 |
38.600 |
|
Total Current Liabilities |
1212.299
|
1330.363 |
1039.100 |
|
Net Current Assets |
1459.150
|
1372.104 |
517.800 |
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
TOTAL |
2917.346 |
2725.121 |
1848.200 |
PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 (12 months) |
31.03.2005 (15 months) |
31.12.2004 (12 months) |
|
Sales Turnover [including other income] |
5707.951 |
7170.756 |
4386.600 |
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
68.598 |
317.024 |
222.300 |
|
Provision
for Taxation |
(50.815) |
120.479 |
94.800 |
|
Profit/(Loss)
After Tax |
119.413 |
196.545 |
127.500 |
|
|
|
|
|
|
Export
Value |
1028.572 |
1276.985 |
NA |
|
|
|
|
|
|
Import
Value |
2527.914 |
3238.490 |
NA |
|
|
|
|
|
|
Total
Expenditure |
5640.353 |
6855.178 |
NA |
QUARTERLY
/ SUMMARISED RESULTS
|
PARTICULARS |
|
30.06.2006 1st Qtr |
30.09.2006 2nd Qtr |
|
Sales
Turnover |
|
1482.700 |
1492.300 |
|
Other Income |
|
10.300 |
10.300 |
|
Total Income |
|
1493.000 |
1502.600 |
|
Total
Expenditure |
|
1470.400 |
1469.800 |
|
Operating
Profit |
|
22.600 |
32.800 |
|
Interest |
|
23.200 |
31.700 |
|
Gross Profit |
|
(0.600) |
1.100 |
|
Depreciation |
|
30.900 |
31.400 |
|
Tax |
|
1.500 |
0.700 |
|
Reported PAT |
|
(19.300) |
(20.200) |
|
|
|
|
|
200606 Quarter 1 --------------- Notes Expenditure Includes
(Increase)/Decrease in stock in Trade Rs 11.400 million Consumption of Raw
Material Rs 1093.500 million Staff Cost Rs 88.900 million Fuel, Power &
Water Rs 147.000 million Other expenditure Rs 129.600 million Tax Includes
Provision for Fringe Benefit Tax Rs 1.500 million Deferred Tax Rs(13.70)million
EPS is Basic & Diluted 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 07 Complaints disposed off during the quarter 07
Complaints unresolved at the end of the quarter Nil 1. The Company's response
on the remarks contained in Auditors Report for the year ended March 31, 2006
is as follows: I) In respect of capitalization of Para Tertiary Butyl Phenol
(PTBP) Project during the year, the Company is not in agreement with the view
of the Auditors. a) The statement that amount of Rs 82.00 million could not be
recovered under the insurance claim is factually inappropriate as it did not
form part of the insurance claim submitted. b) The appropriateness of the
accounting treatment of CWIP amounting to Rs 99.00 million was never qualified
by the past Auditors. c) As regards the book value of 'destroyed assets' in
excess of the insurance claim amounting to Rs 13.70 million, the same was duly
recognized in the Profit & Loss Account and written off. Since the amount
of Rs 82.00 million was never apart of asset destroyed, it did not figure in
the claim to the insurance company and hence was not required to be written
off. d) The Company believes that the CWIP taken over from Schenectady
Specialties Asia Pvt Ltd (since merged with the Company) amounting to Rs 99.00
million is valuable to the Company in the recently completed PTBP Project.
Accordingly, and also based on an experts opinion, the amount of Capital work
in Progress of Rs 99.00 million was capitalized in the books of the Company
without any adjustments as per the scheme of Amalgamation approved by the Hon.
Bombay High Court in the year 2002. II) During be year under review the Company
had claimed and received export benefit amounting to Rs 46.70 million under the
Target Plus Scheme of Government of India. The Scheme was notified in June 2005
and the benefit accruing to the Company, is on the basis of incremental export
performance during the year 2004-05. Based on the principles of prudence and
supported by an expert opinion, the Company had not accrued the benefits in the
previous year in line with its accounting policy to accrue benefits only after
submission of the relevant applications to the Government and their final
acceptance. Hence, the Company has accounted for it during the current year on
the same basis and disclosed the same under Other Income. III) As regards the
salary paid to the Managing Director and Director-Finance, the company has initiated
the process of obtaining the approval of shareholders and the Central
Government wherever applicable. IV) The Company has a 'one year revolving line
of credit' amounting to Rs 850 million. The revolving line of credit backed by
a guarantee from the parent company will continue as long as it is supported by
the said guarantee. Apart from providing for working capital needs, the loan is
also meant for 'General Corporate Purposes'. Out of the aforesaid amount the
Company has used Rs 16.190 million for long term purposes. 2. An amount of Rs
43.60 million being the expenditure incurred towards repairs/replacement of
assets at the Company's N.M. plant damaged due to flood, net of n account'
payment received from the insurance company, is further receivable by the
Company. The Company has initiated arbitration proceedings and accordingly
filed a petition in the High Court of Bombay. 3. The statutory auditors have
carried out a limited review of the results for the quarter ended June 30,
2006. 4. These results have been reviewed by the Audit Committee of the Board
and approved by the Board of Directors of the Company at its meeting held on
July 28, 2006. 5. The Company has only one primary segment of activity, namely
'Chemicals'. 6. Previous period figures have been regrouped / rearranged
wherever considered necessary. w
200609 Quarter 2 --------------- Notes Expenditure Includes
(Increase)/Decrease in stock in Trade Rs (53.00) million Consumption of Raw
Material Rs 1145.80 million Staff Cost Rs 85.10 million Fuel, Power & Water
Rs 157.40 million Other expenditure Rs 134.50 million Tax Includes Provision
for Fringe Benefit Tax Rs 0.70 million Deferred Tax Rs(10.80)million EPS is
Basic & Diluted Status of Investor Complaints for the quarter ended September
30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints
Received during the quarter 04 Complaints disposed off during the quarter 04
Complaints unresolved at the end of the quarter Nil 1. The Company's response
to the remarks contained in the Auditors Report for the year ended March 31,
2006 is as follows: i) In respect of capitalization of the Para Tertiary Butyl
Phenol (PTBP) Project during the year, the Company is not in agreement with the
view of the Auditors. a) The statement that the amount of Rs 82.00 million
could not be recovered under the insurance claim is factually inappropriate, as
it did not form part of the insurance claim submitted. b) The appropriateness
of the accounting treatment of CWIP amounting to Rs 99.00 million was never
qualified by the past Auditors. c) As regards the book value of 'destroyed
assets' in excess of the insurance claim amounting to Rs 13.70 million, the
same was duly recognized in the Profit & Loss Account and written off Since
the amount of Rs 82.00 million was never a part of the assets destroyed, it did
not figure in the claim to the insurance company and hence was not required to
be written off. d) The Company believes that the CWIP taken over from
Schenectady Specialties Asia Pvt. Ltd. (since merged with the Company),
amounting to Rs 99.00 million is valuable to the Company in the recently
completed PTBP Project. Accordingly, and also based on an expert opinion, the
amount of capital work in progress of Rs 99.00 million was capitalized in the
books of the Company without any adjustments as per the Scheme of Amalgamation
approved by the Hon. Bombay High Court in the year 2002. ii During the year
under review, the Company had claimed and received export benefits amounting to
Rs 46.70 million under the Target Plus Scheme of Government of India. The
Scheme was notified in June 2005 and the benefit accruing to the Company, is on
the basis of incremental export performance during the year 2004-05. Based on
the principles of prudence and supported by an expert opinion, the Company had
not accrued the benefits in the previous year in line with its accounting
policy to accrue benefits only after submission of the relevant applications to
the Government and their final acceptance. Hence, the Company has accounted for
it during the year 2005-06 on the same basis and disclosed the same under Other
Income. iii) The company has initiated the process of obtaining approval of
Central Government for salary paid to the Managing Director. In respect of the
salary paid to Director- Finance, the Company has obtained the requisite
approval of shareholders at the Annual General Meeting held in September 2006.
iv) The Company has a 'one year revolving line of credit' amounting to Rs
850.00 million. The revolving line of credit backed by a guarantee from the
parent company will continue as long as it is supported by the said guarantee.
Apart from providing for working capital needs, the loan is also meant for
'General Corporate Purposes'. Out of the aforesaid amount, the Company has used
Rs 640.00 million for long term purposes. 2. An amount of Rs 43.90 million
being the expenditure incurred towards repairs/replacement of assets at the
Company's N.M. plant damaged due to flood, net of 'on account' payment received
from the insurance company, is further receivable by the Company. The Company
has initiated arbitration proceedings and accordingly filed a petition in the
High Court of Bombay. 3. These results have been discussed by the Audit
Committee / Board. The same are subject to limited review by the auditors. 4.
The Company has only one primary segment of activity, namely 'Chemicals'. 5.
Previous period figures have been regrouped / rearranged wherever considered
necessary.
KEY
RATIOS
|
PARTICULARS |
|
31.03.2006 |
31.03.2005 |
31.12.203 |
|
Debt-Equity
Ratio |
|
1.05 |
1.50 |
2.96 |
|
Long
Term Debt-Equity Ratio |
|
0.36 |
0.23 |
0.44 |
|
Current
Ratio |
|
1.14 |
0.89 |
0.69 |
|
Fixed
Assets |
|
2.51 |
3.00 |
2.16 |
|
Inventory |
|
4.86 |
6.88 |
8.78 |
|
Debtors |
|
5.66 |
7.33 |
7.51 |
|
Interest
Cover Ratio |
|
(1.72) |
3.70 |
2.95 |
|
Operating
Profit Margin(%) |
|
(0.86) |
6.96 |
9.80 |
|
Profit
Before Interest And Tax Margin(%) |
|
(2.70) |
5.39 |
7.67 |
|
Cash
Profit Margin(%) |
|
(1.45) |
4.01 |
5.03 |
|
Adjusted
Net Profit Margin(%) |
|
(3.28) |
2.44 |
2.91 |
|
Return
On Capital Employed(%) |
|
(6.04) |
16.07 |
18.83 |
|
Return
On Net Worth(%) |
|
(15.02) |
18.15 |
28.02 |
STOCK PRICES
|
Face
Value |
Rs.10/-
each |
|
High |
Rs.36.00 |
|
Low |
Rs.35.35 |
LOCAL AGENCY
FURTHER INFORMATION
Promoted
in 1965 by EID-Parry (India),Chennai, in collaboration with Distillers Company,
UK, and Hercules Power, US, Schenectady Herdillia (SHL) was earlier known as
Herdillia Chemicals. It manufactures heavy organic chemicals such as phenol,
cumene, acetone, diacetone alcohol, phthalic anhydride, phthalates and their
derivatives. In Mar.'65, SHL entered into an agreement with Distillers Company
to supply technical information for manufacturing phenol, cumene, diacetone
alcohol and phthalates.
In 1984, the interests of EID-Parry were taken over by Duncans Agro
Industries and it is now a part of the Goenka-Duncan group. In 1994, SHL entered
into a strategic alliance with Bayer, Germany, for setting up a facility to
produce heat transfer media. The heat transfer media plant was commissioned in
Feb.'94. The isophorone plant was commissioned in Apr.'94. The company expanded
phenol capacity from 20000 tpa to 22500 tpa in a phased manner.
In 1994-95, SHL increased the capacity for IBB from 1000 tpa to 2000 tpa.
It received the ISO 9002 certification from BVQI in Dec.'95.
During 1995-96, SHL increased the capacity for DPO, phenol and acetone to
3000 tpa, 24000 tpa and 14400 tpa respectively. HCL has set up a greenfield
plant to produce 1 lac tpa of phenol and 60000 tpa of acetone at Dahej,
Gujarat.
SHL further increased the capacities of the Phenol, Acetone, Iso Butyl
Benzene and Isophorone plant to 26,500, 16,170, 2,500 and 2,500 MT in the year
96-97. It has set up a captive cogeneration plant. The capacity of Phenol and
Acetone plants was increased to 34,000 and 20,400 MT/year respectively in the
year 1999-2000.
The company was renamed Schenectady Herdillia consequent to acquistion of
81.19% of equity capital by Schenectady (India) Holdings Ltd during April 2002.
Consequent to the approval by Hon'ble Bombay High Court, Schenectady
Specialities Asia Private Ltd was merged with the company with effect from
28th Noember,2002 and the appointed date was 27th September,2002
OPERATIONS REVIEW:
The sales turnover at Rs. 5850.000 Millions was lower by 9% on an
annualized basis than that of the previous year. The decrease in turnover was
mainly due to the unprecedented floods caused by torrential rains in July 2005,
resulting in the suspension of operations at Navi Mumbai from July 26, 2005
until the phased commencement over a period ending mid September 2005. Apart
from this loss of production, the volumes of Alkyl Phenol sales were also
affected due to lower exports.
DIVIDEND:
After taking into consideration the financial results of the year,
planned capital expenditure at Navi Mumbai and Rasal Units and the recent steep
increase in the costs of petroleum based feedstocks, the Directors are unable
to recommend any dividend for the year under review.
PRODUCTION:
In
respect of the Navi Mumbai unit, total production during the year ended March
31, 2006 was 97,888 MT, being lower by 14% compared to 1,13,242 MT during the
previous period on an annualized basis. As stated earlier, the operations were
adversely affected by floods caused by heavy rains in July 2005.
New production records were established in respect of Diacetone Alcohol,
Isobutyl Benzene, Alpha Methyl Styrene, Alpha Methyl Styrene Dimers, and
Acetophenone. During the year, Trimethyl Cyclohexanone was successfully
launched as a new product.
Exports from Rasal were impacted by the acute competition faced by the
Company from South-East Asian suppliers. The Lote unit continued its
encouraging performance and the volumes showed an upward trend from 1,311 MT to
2,576 MT, an increase of 97%.
The combined production at the Navi Mumbai, Rasal and Lote units was
1,19,888 MT as against 1,36,782 MT in the previous period, recording a decrease
of 12% on an annualized basis.
SALES AND EXPORTS:
During the year under review, prices of some of the Company's major
products fell steeply on account of new larger capacities which came up in
Asia. With high prices of raw materials, driven by high crude oil prices, the
margins were under severe pressure.
During the year, exports were at Rs. 1001.700 Millions FOB.
FINANCE:
Company did not accept any fresh deposits or renew any existing deposits from
the public or shareholders during the year. As of March 31, 2006, 80 deposits
aggregating Rs. 1.019 Millions had
matured
for payment but not been claimed by the depositors.
In view of the extensive damage caused by the floods on July 26, 2005,
the Company had lodged its claim with the insurance company under the 'Loss of
Profit' policy and the fire policy for damage to equipment and property.
The 'Loss of Profit' claim has been settled by the insurance company for
Rs.80.280 Millions. As regards the property damage claim, the same is being
pursued with the Insurance Company.
In line with the Memorandum of Understanding signed for transfer of part
of the leasehold land at Navi Mumbai, the Company received the entire
consideration of Rs. 335.200 Millions and the same has been accounted as of
March 31, 2006.
The following products of the Company, viz. Phenol, Acetone, Diacetone
Alcohol and Performance Resins, come under the purview of Cost Accounting Records
(Chemical Industries), Rules, 1987. However, cost audit in respect of only
Acetone, Diacetone Alcohol and Performance Resins is applicable to the year
under reference. The Company has maintained relevant records and the cost audit
is in progress.
In respect of
capitalization of the Para Tertiary Butyl Phenol (PTBP) Project during the
year, the Company is not in agreement with the views of the Auditors as: (a)
The statement that the amount of Rs. 82.0 Millions could not be recovered under
the insurance claim is factually incorrect, as it did not form part of the
insurance claim submitted,
(b) The
appropriateness of the accounting treatment of CWIP amounting to Rs. 99.0
Millions was never qualified by the past Auditors, (c) As regards the book
value of 'destroyed assets' in excess of the insurance claim amounting to Rs.
13.7 Millions, the same was duly recognized in the Profit & Loss account
and written off. Since the amount of Rs.82.0 Millions was never a part of the
assets destroyed, it did not figure in the claim to the insurance company and
hence was not required to be written off. (d) The Company believes that the
CWIP taken over from Schenectady Specialities Asia Pvt. Ltd. (since merged with
the Company), amounting to Rs. 99.0 Millions is valuable to the Company in the
recently completed PTBP project. Accordingly and also based on an expert
opinion, the amount of capital work in progress of Rs. 99.0 Millions was
capitalized in the books of the Company without any adjustments as per the
Scheme of Amalgamation approved by the Hon. Bombay High Court in the year 2002.
During the year
under review, the Company had claimed and received export benefits amounting to
Rs. 46.7 Millions under the Target Plus Scheme of Government of India. The
Scheme was notified in June 2005 and the benefit accruing to the Company, is on
the basis of incremental export performance during the year 2004-05. Based on
the principles of prudence and supported by an expert opinion, the Company had
not accrued the benefits in the previous year in line with its accounting
policy to accrue benefits only after submission of the relevant applications to
the Government and their final acceptance. Hence, the Company has accounted for
it during the year under review on the same basis and disclosed the same under
Other Income.
As regards the
salary paid to the Managing Director and Director-Finance, the company has
initiated the process of obtaining the approval of shareholders and the Central
Government, wherever applicable.
The Company has a
"one year revolving line of credit" amounting to Rs. 850 Millions.
The revolving line of credit backed by a guarantee from the parent company will
continue as long as it is supported by the said guarantee.
Apart from providing
for working capital needs, the loan is also meant for "General Corporate
Purposes". Out of the aforesaid amount, the Company has used Rs. 80
Millions for long term purposes.
A report on
Corporate Governance in terms of Listing Agreement and a note on Management
Discussion and Analysis with respect to the Company's business are provided in
the Annual Report.
BUSINESS OF THE
COMPANY
The Company is
engaged in the manufacture and marketing of organic chemicals and phenolic
resins that find a wide range of industrial applications. There is no
segmentation of products manufactured by the Company. Applications of these
products cover laminates, tyres, resins, paints, surfactants, Pharmaceuticals,
lubricating oil additives, surface coating, paper and downstream chemicals. The
Company has three manufacturing units situated at Navi Mumbai, Rasal and Lote.
2. REVIEW OF
OPERATIONS
Capacity utilization
was 75% during the year under review as against 84% in the previous year on a
pro-rata basis. The reduction was primarily due to the impact of flooding in
the Navi Mumbai unit during the recent quarter of the year under review.
Sales turnover of
Rs. 5850 Millions (including excise duty) was lower by 9% (on pro-rata basis).
Pro-rata sales volume was lower by 11% compared to th previous year. Exports
aggregated Rs. 1000 Millions, about the same level as in the previous period on
a pro-rata basis. Phenol and Acetone continued to face severe competition from
imports on account of new larger capacities which came up in Asia. While
selling prices were volatile during the year, margins were under pressure due
to steep increases in input costs. This partly reflects the cyclicity of the
commodity chemical business.
The total operating
cost, excluding depreciation and interest aggregated Rs. 5472.40 Millions as
compared to Rs. 5301.60 Millions during the previous year, on pro-rata basis, a
marginal increase of 3.22%. This increase was largely on account of higher cost
of raw materials and utilities.
PBIDT to sales ratio
was 4% compared to 6.3% in the previous year.
The staff cost was
Rs. 292.60 Millions compared to Rs. 350 Millions of the previous year showing
4.5% increase (on a pro-rata basis), essentially because of provisions for
retirement benefits and wage settlement.
The cost of fuel,
power and water was Rs. 485.10 Millions - 19% higher (on a pro-rata basis) than
the previous year due to increase in energy costs globally.
Interest cost of Rs.
56.50 Millions was lower on a pro-rata
basis compared to Rs. 100.30 Millions during the previous year. This reduction
was on account of continuing efforts to access cheaper funds.
Other income was Rs.
539.80 Millions compared to Rs. 74.70 Millions for the pervious year. The
former figure includes gain on sale of leasehold land (Rs. 318.60 Millions) and
export incentives (Rs. 46.70 Millions).
Profit before tax
(PBT) and profit after tax for the year were Rs. 68.60 Millions and Rs. 119.40
Millions respectively, as against Rs. 317.00 Millions and Rs. 196.50 Millions
for the previous period.
Earning per equity
share (EPS) was Rs. 2.82 for the year under review as against Rs. 7.00 for the
previous period.
5. BUSINESS OUTLOOK
Additional capacity
build up in East Asia coupled withhigh inventories of finished products put a
downward pressure on prices. The input prices have shown a higher rise than the
finished goods realization and consequently the margins were under pressure.
The Company is ceaselessly striving to maintain/improve realizations and to
provide products at competitive prices through various cost cutting measures
and downstream value addition. Phenol prices have started firming up in the
international markets. This trend will impact the domestic prices and improve
margins in the coming quarter. The Company has also taken several initiatives,
including use of a new catalyst in one of its plants and application to the
Government under WTO norms and safeguarding its interests. It also proposes to
increase the use of solid fuels in its boilers to reduce the effect of
volatility in prices of petroleum based fuels.
|
SECURED LOANS |
31.03.2006 Rs in Millions |
31.03.2005 Rs in Millions |
|
1]
Term Loans: |
|
|
|
Foreign Currency Loan from Caterpillar Financial Services Corporation,
U.S.A. ('CFSC') |
3.820 |
29.977 |
|
2]
Other Loans : |
|
|
|
From
Banks: |
|
|
|
Demand cash credit (including demand loan Rs. 1,000 lakhs; 2004-05 —
Rs. 500 lakhs) |
119.146 |
140.998 |
|
Rupee Loan from Bank of America |
638.305 |
0.000 |
|
|
761.271 |
170.975 |
|
UNSECURED LOANS |
|
|
|
|
|
|
|
Deposits from holding company — Schenectady (India) Holdings Private
Ltd. (amount repayable within one year Rs. 1 ,300 lakhs; 2004-05 — Rs. 995
lakhs) |
130.000 |
99.500 |
|
|
|
|
|
Short term non-revolving loan from banks (amount repayable within one year Rs. 5,038.41 lakhs; 2004-05 — Rs.
7,642.99 lakhs) |
503.841 |
764.299 |
|
|
|
|
|
Deferred sales tax liability |
12.357 |
6.654 |
|
Others-buyers' credit arrangement |
0.000 |
227.662 |
|
|
646.198 |
1098.115 |
Fixed Assets
- Goodwill
- Leasehold
- Land and Development
- Intangible Assets
- Freehold Land and
Development
- Buildings
- Plant and Machinery
- Furniture , Fixtures and
Vehicle
- Equipment
Mission
- Become a top performer in niche area in the chemical industry
- Focusing on the growth and development of the people, surroundings and society
- Encouraging the spirit of discovery and research
- Weaving the values of integrity in all the activities
- Reiterating the commitment to safety and quality with emphasis
on customer delight.
Quality, Environment, Health & Safety Policy
Schenectady Herdillia Limited (SHL), having manufacturing facilities for Cumene, Phenol, Acetone and their derivatives, Phthalic anhydride, Isobutylbenzene, Acetophenone, Fumaric acid, Alphamethyl styrene and its dimers at Navi Mumbai, Alkyl Phenols at Rasal and Performance Resins at Lote is committed to :
Quality Priority
Strive for leadership in all the products by aligning itself with changing expectations as also both stated and implied needs of the customers. In this context company shall endeavor to :
Delight the customers, strive for business growth and
profitability and work towards mutually beneficial relationships with the
stakeholders.
Guiding
Principles
Conduct the business following the Guiding Principles of Responsible Care, in a manner designed to prevent pollution, protect the environment, health and safety of the employees, the customers and other interested parties.
EHS
Priority
Exceed norms and make Environment, Health, Safety and Resource conservation critical considerations for all new and existing products and processes.
Compliance
Comply with all applicable legal and other environmental, health and safety requirements.
Training
Develop required competencies among the employees and others as applicable. Educate and train them regarding QEHS systems.
Involvement
Involve employees at different levels and promote safety and health through safety committees, review of safety systems and participation in implementation / follow-up actions to make SHL a clean and safe work place. Appreciate and motivate employees through rewards and recognition systems.
Communication
Provide information on health and environmental risks and pursue protective measures.
Continual
Improvement
Strive for continual improvement in all aspects of the organizational activities with special emphasis on QEHS performance.
QEHS policy and objectives are reviewed in Apex committee meetings for their continuing suitability. It is ensured that these are understood, implemented and maintained at all levels in the organization.
Community Development
Schenectady Herdillia Limited (SHL) organises and participates in several community service projects. A few of the activities out of the several community development tasks are listed here:
- Regular training programs for school teachers, municipal corporators, media representatives and police staff on awareness about SHL, its products, safety measures and related issues.
- A minimum of two free medical camps every year for the benefit of people residing in the surrounding communities. Moreover, free medical check-up is provided to traffic police staff who are exposed to vehicular pollution.
- The company has a distinguished history of sending its volunteer employees to places affected by natural calamities. In 1989 a nearby village was affected by floods. SHL's team of volunteer employees played a significant role in this village by providing clothes, blankets and vessels to the affected population, cleaned and repaired several water wells and constructed a school room for the children. In 1993, the district of Latur in the state of Maharashtra (India) suffered a severe earthquake. SHL's volunteers visited the earthquake affected villages and provided blankets, clothes and other items of necessity.
All employees contribute generously for providing relief to people affected by natural calamities and war.
- SHL funds and operates a charitable foundation which is a vehicle for granting scholarships to students, financing medical treatment for those in need and upgrading the assets of educational institutions.
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.44.13 |
|
UK
Pound |
1 |
Rs.86.40 |
|
Euro |
1 |
Rs.56.99 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
|
41 |
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 |
|