MIRA
INFORM REPORT
|
Report Date : |
08.02.2007 |
IDENTIFICATION
DETAILS
|
Name : |
KOHINOOR
FOODS LIMITED |
|
|
|
|
Formerly Known as : |
SATNAM
OVERSEAS LIMITED |
|
|
|
|
Registered Office : |
201, J. K.
Apartments, Vipps Centre, 2, Community Complex, Masjid Moth, Greater Kailash
II, New Delhi – 110 045 |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2006 |
|
|
|
|
Date of Incorporation : |
26.07.1989 |
|
|
|
|
Com. Reg. No.: |
55-37097 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L52110DL1989PLC037097 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
DELS20513D |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACS2470D |
|
|
|
|
Legal Form : |
Public limited liability company. The
company’s shares are listed on the stock exchange |
|
|
|
|
Line of Business : |
Manufacturing and Exporting of Basmati
Rice, Spices, Pickles, Papad, Cook-in-Sauces, Curry Pastes, etc. |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD
4750000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject
is a well-established and reputed company having satisfactory track.
Directors are reported as experienced and respectable businessmen. Trade
relations are reported as 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
|
Registered/ Corporate Office : |
201, J. K.
Apartments, Vipps Centre, 2, Community Complex, Masjid Moth, Greater Kailash
II, New Delhi – 110 045, India |
|
Tel. No.: |
91-11-26465757 (10 Lines)/251635757 |
|
Fax No.: |
91-11-26465959 / 26483054/ 41638586/87 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Factory
1 : |
Ø 50-51 Milestone, G. T. Road, Murthal District, Sonepat, Haryana Ø O/S Gate Bhagtanwala, Amritsar, Punjab Ø
71,
Libaspur, Bahalgarh, District Sonapet, Haryana |
DIRECTORS
|
Name : |
Mr. Jugal Kishore Arora |
|
Designation : |
Chairman |
|
Date of Birth/Age : |
60 Years |
|
Experience : |
41 Years |
|
Date of Appointment : |
01.04.1991 |
|
|
|
|
Name : |
Mr. Satnam Arora |
|
Designation : |
Joint Managing Director |
|
Date of Birth/Age : |
55 Years |
|
Qualification : |
M. A. (Eco) |
|
Experience : |
31 Years |
|
Date of Appointment : |
01.04.1991 |
|
|
|
|
Name : |
Mr. Guman Arora |
|
Designation : |
Joint Managing Director |
|
Date of Birth/Age : |
54 Years |
|
Qualification : |
Graduate |
|
Experience : |
31 Years |
|
Date of Appointment : |
01.04.1991 |
|
|
|
|
Name : |
Mr. Vijay Burman |
|
Designation : |
Non-Executive Director |
|
|
|
|
Name : |
Mr. Anil Bhatia |
|
Designation : |
Non-Executive Director |
|
|
|
|
Name : |
Mr. Vijay Prakash Aggarwal |
|
Designation : |
Non-Executive Director |
KEY EXECUTIVES
|
Name
: |
Ms. Kanika Verma |
|
Designation
: |
Company Secretary |
MAJOR SHAREHOLDERS
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Promoters |
8646565 |
44.12 |
|
Mutual Funds & UTI |
1691818 |
8.63 |
|
Banks, Financial Institution |
NIL |
NIL |
|
FIIS |
1435208 |
7.32 |
|
Corporate Bodies Public |
2425016 |
12.37 |
|
Public |
5401393 |
27.56 |
|
Total |
19600000 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Exporting of Basmati
Rice, Spices, Pickles, Papad, Cook-in-Sauces, Curry Pastes, etc. |
PRODUCTION
STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
Rice |
|
|
40 M.T.P.H. |
63951 M.T. |
|
Ready to Eat |
|
|
50000 Pouches/Day |
5789652 Pouches |
GENERAL
INFORMATION
|
No. of Employees : |
200 |
||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||
|
Bankers : |
Ø Oriental Bank of Commerce, Corporate Branch, New Delhi Ø Canara Bank, Corporate Service Branch, New Delhi Ø UTI Bank, New Delhi Ø Punjab National Bank, New Delhi Ø Corporate Bank Ø State Bank of India Ø State Bank of Patiala Ø Indian Overseas Bank Ø HSBC Limited Ø Standard Chartered Bank |
||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||
|
Facilities : |
Secured Loans :
Unsecured Loans :
|
|
|
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors : |
Mayur
Batra & Company Chartered
Accountants |
|
|
|
|
Subsidiaries : |
Ø Sachdeva Brothers Limited, 50-51, Milestone, G.T. Road, Murthal, District Sonapet, Haryana Ø Satnam Overseas Limited, Inc., 400, Apgar Drive, Suite F, Somerset, NJ08873, USA Tel. No.: 91-732-8684400 Fax No.: 91-732-8684404 E-Mail : info@kohinoorfoods.com Ø Indo European Foods Limited, Kohinoor House, 40, Langer Road, Felixstowe Sufflok, P1, 2BW, United Kingdom Tel. No.: 1394-276700 Fax No.: 1394-276711 E-Mail : info@kohinoorfoods.co.uk |
|
|
|
|
Joint Venture Company : |
Rich Rice Raisers Factory L.L.C. Post Box No.15542, Al Quoz Industrial Area, 3rd Interchange, Sh Zayed Road, Dubai, UAE Tel. No.: 9714-3382800/ 2262644 Fax No.: 9714-3382900/ 2262282 E-Mail : richrice@emirates.net.ae |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
5,00,00,000 |
Equity Shares |
Rs. 10/- each |
Rs. 500.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
1,96,00,000 |
Equity Shares |
Rs. 10/- each |
Rs. 196.000 millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
196.000 |
196.000 |
196.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1022.515 |
863.837 |
753.745 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1218.515 |
1059.837 |
949.745 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2620.256 |
2496.748 |
2307.528 |
|
|
2] Unsecured Loans |
932.920 |
167.977 |
19.471 |
|
|
TOTAL BORROWING |
3553.176 |
2664.725 |
2326.999 |
|
|
DEFERRED TAX LIABILITIES |
29.546 |
36.746 |
31.046 |
|
|
|
|
|
|
|
|
TOTAL |
4801.237 |
3761.308 |
3307.790 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
461.197 |
419.738 |
365.395 |
|
|
Capital work-in-progress |
106.751 |
27.490 |
38.215 |
|
|
|
|
|
|
|
|
INVESTMENT |
206.693 |
129.329 |
65.187 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3026.279
|
2708.048 |
2222.151 |
|
|
Sundry Debtors |
620.276
|
554.029 |
382.504 |
|
|
Cash & Bank Balances |
310.568
|
38.301 |
54.340 |
|
|
Other Current Assets |
6.683
|
4.802 |
5.624 |
|
|
Loans & Advances |
515.633
|
350.377 |
403.332 |
|
Total Current Assets |
4479.439
|
3655.557 |
3067.951 |
|
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
206.976
|
273.585 |
102.877 |
|
|
Provisions |
280.550
|
197.221 |
130.579 |
|
Total Current Liabilities |
487.526
|
470.806 |
233.456 |
|
|
Net Current Assets |
3991.913
|
3184.751 |
2834.495 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
34.683 |
0.000 |
4.498 |
|
|
|
|
|
|
|
|
TOTAL |
4801.237 |
3761.308 |
3307.790 |
|
PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2003 |
|
Sales Turnover [including other income] |
5428.436 |
5079.312 |
7490.788 |
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
277.030 |
214.990 |
174.221 |
|
Provision
for Taxation |
69.000 |
60.200 |
40.000 |
|
Profit/(Loss)
After Tax |
208.030 |
154.790 |
134.221 |
|
|
|
|
|
|
Export
Value |
NA |
NA |
3065.755 |
|
|
|
|
|
|
Import
Value |
760.465 |
438.955 |
1236.467 |
|
|
|
|
|
|
Total
Expenditure |
5151.405 |
4864.322 |
6674.631 |
QUARTERLY
RESULTS
|
PARTICULARS |
30.06.2005 |
30.09.2005 |
31.12.2005 |
|
Sales Turnover |
1166.300 |
1159.400 |
1816.200 |
|
Other Income |
3.600 |
7.800 |
5.100 |
|
Total Income |
1169.900 |
1167.200 |
1821.300 |
|
Total
Expenditure |
1049.100 |
1040.200 |
1630.600 |
|
Operating
Profit |
120.800 |
127.000 |
190.700 |
|
Interest |
40.500 |
44.400 |
55.300 |
|
Gross Profit |
80.300 |
82.600 |
135.400 |
|
Depreciation |
20.000 |
22.500 |
30.000 |
|
Tax |
10.000 |
12.500 |
25.000 |
|
Reported PAT |
50.300 |
47.600 |
80.400 |
200606 Quarter 1
Notes
EPS is Basic &
Diluted 1. The above results were taken on record by the Board of Directors in
their meeting held on 31.07.2006. 2. The Company is primarily engaged in the
business of manufacturing, trading & marketing of food products which is a
single segment, as per Accounting Standard (AS) 17 issued by the Institute of
Chartered Accountants of India. 3. The Limited Review of above un audited
financial results as required under Clause 41 of Listing Agreement has been
carried out by the Statutory Auditors. 4. Information on Investor complaints
for the quarter Received -12 Outstanding-Nil
200609 Quarter 2
Notes
Expenditure Includes
(Increase)/Decrease in stock in Trade Rs 148.90 million Consumption of Raw
Material Rs 627.00 million Staff Cost Rs 24.60 million Other expenditure Rs
239.70 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 16 Complaints disposed off
during the quarter 16 Complaints unresolved at the end of the quarter Nil 1.
The above results were taken on record by the Board of Directors in their
meeting held on October 30, 2006. 2. The Company is primarily engaged in the
business of manufacturing, trading & marketing of food products which is a
single segment, as per Accounting Standard (AS) 17 issued by the Institute of
Chartered Accountants of India. 3. The Limited Review of above un audited
financial results as required under Clause 41 of Listing Agreement has been
carried out by the Statutory Auditors.
200612 Quarter 3
Notes
EPS is Basic &
Diluted 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 11 Complaints disposed off during the quarter 11 Complaints
unresolved at the end of the quarter Nil 1. The above results were taken on
record by the Board of Directors in their meeting held on 22.01.2007. 2. The
Company is primarily engaged in the business of manufacturing, trading &
marketing of food products which is a single segment, as per Accounting
Standard (As) 17 issued by the Institute of Chartered Accountants of India. 3.
The Limited Review of above un audited financial results as required under
Clause 41 of Listing Agreement has been carried out by the Statutory Auditors.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2003 |
|
Debt-Equity Ratio |
2.73 |
2.48 |
2.64 |
|
Long Term Debt-Equity Ratio |
0.59 |
0.29 |
0.19 |
|
Current Ratio |
1.38 |
1.30 |
1.26 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
6.65 |
7.14 |
8.60 |
|
Inventory |
1.88 |
2.04 |
2.35 |
|
Debtors |
9.20 |
10.75 |
12.15 |
|
Interest Cover Ratio |
2.75 |
2.56 |
2.22 |
|
Operating Profit Margin(%) |
9.61 |
8.24 |
6.93 |
|
Profit Before Interest And Tax Margin(%) |
8.06 |
7.00 |
5.95 |
|
Cash Profit Margin(%) |
5.40 |
4.31 |
3.41 |
|
Adjusted Net Profit Margin(%) |
3.85 |
3.07 |
2.44 |
|
Return On Capital Employed(%) |
10.29 |
10.07 |
9.67 |
|
Return On Net Worth(%) |
18.26 |
15.41 |
14.39 |
STOCK PRICES
|
Face
Value |
Rs.10.00/- |
|
High |
Rs.78.00/- |
|
Low |
Rs.76.00/- |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject
was incorporated as a private limited company in July, 1989. It was converted
into a public limited liability company in December, 1992. The company is an
associate of the Satnam Group, known for its’ presence in the rice trade since
1979.
In
October, 1992, the Satnam Overseas, a partnership firm belonging to the same
group merged/amalgamated with the company. At present, it has two running mills
in rice-growing areas, one Murthal, Haryana and other at Amritsar, Punjab, with
an installed capacity of 12 tph. In addition, it is located on the national
highway and was close to the major grain markets.
In
January, 1993 it went public to part-finance the modernisation of the plants.
The company forays into allied areas like pulses, rice-based snacks, etc. It
has already launched premium-quality branded pulsed at the national level and
plans to launch a product Rice and Spice (rice mixed with dehydrated vegetables
and spices in ready-to-cook pouches).
Company
has bagged award from World Economic Forum in view of its excellent
contribution towards global growth, also bagged the prestigious APEDA Award for
the recognition for its outstanding contribution to promoting exports of
agriculture and processed food product and product development.
The company has started joint venture company Indo European Foods Limited with
Headquarters in United Kingdom and the operations have already started. To
penetrate into the Middle East region a new joint venture company Rice Rice
Raisers Factory L L C have been established with the head quarters in
Dubai.
Under the brand name of 'Kohinoor' the company is planning to launch ready
to-eat and ready-to-cook food products both in the domestic as well as the
overseas markets.
BUSINESS
Subject
is engaged in manufacturing and exporting of Basmati Rice, Spices, Pickles, Papad,
Cook-in-Sauces, Curry Pastes, etc.
The
company sells its’ products under the brand name “Kohinoor” and “Namkeen”.
Its’
products range includes :-
Ø
Rice
Ø
Pulses
Ø
Seasame
Seeds
Ø
Ground
Nuts
Ø
Dill
Seeds
Ø
Sugar
Ø
Cummin
Seeds
Ø
Soyabeen
Ø
Fennel
Seeds
Ø
Coriander
Seeds
Ø
Juices
Ø
Spices
Ø
Soap
The
company has bagged award from World Economic Forum, under report of its’
excellent contribution towards global growth, also bagged the prestigious Apeda
Award for the recognition for its’ outstanding contribution to promoting exports
of agriculture and processed food products and product development.
The
company has started joint venture company Indo European Foods Limited with
Headquarters in United Kingdom and the operations had already started. To
penetrate into the Middle East region a new joint venture company Rice Rice
Raisers Factory LLC had been established with the head quarters in Dubai.
Under
the brand name of ‘Kohinoor’ the company is planning to launch ready-to-eat and
ready-to-cook food products both in the domestic as well as the overseas
markets.
Company’s
fixed assets include Land, Factory building, Office building, Plant and
Machinery and Office equipments, Vehicles, Vehicles – Solar, Wooden, Plastic
Crates and Tarpaulins, Computers and Furniture and Fixture.
Director's Report
and Management Discussion & Analysis
This report contains forward looking statements, which may be identified
by their use of words like 'plans', 'expects', 'will', 'anticipates',
'believes', 'intends', 'projects', 'estimates' or other words of similar
meaning. All statements that address expectations or projections about the
future, including but not limited to statements about the company's strategy
for growth, market position, expenditures, and financial results, are forward
looking statements. Forward –looking statements are based on certain
assumptions and expectations of future events. The company cannot guarantee
that these assumptions and expectations are accurate or will be realized. The
company's actual results, performance or achievements could thus differ
materially from those projected in any such forward - looking statements. The
company assumes no responsibility to publicly amend, modify or revise any
forward looking statements, on the basis of any subsequent developments, information
or events.
Overview
Kohinoor Foods Limited ("KFL") is an emerging global food
company with a strong flagship brand "Kohinoor". Having established
its leadership in the area of Basrnati rice, the company forayed into branded
packaged food sector and ventured into high margin ready-to-eat food segment in
F Y04, organizing marketing capabilities in both domestic and the global
markets. Having been a listed company in 1994, Kohinoor Foods is committed to
global quality standards and has one of India's largest rice factories in
Murthal (Haryana) and a state-of-the-art world-class food processing facility
in Bahalgarh (Haryana). The company has established 2 wholly owned subsidiaries
in US and UK and a joint venture company in Dubai to look after these markets,
whichjointly form the largest market for food. With a turnover of Rs 540
millions KFL today is the undisputed leader in Indian branded basmati rice
category and enjoys tremendous credibility in the international market.
During FY06, the turnover of Kohinoor Foods increased to Rs 5410
millions from Rs 5070 millions in FY05, an increase of 6.71%. Of the total
turnover, 55% was own brand sales (with 34% from Domestic Basmati rice, 17%
from Branded Basmati Exports, 4% from Branded Foods) and balance, from the
commodity business segment.
TURNOVER FROM
BRANDED SEGMENT
The turnover from the Branded segment has shown a spectacular increase
of 55% in total turnover as compared to 35% in FY 2004. The company is
operating in line with its business vision of being known as a "global
branded food company" and concentrating on generating revenues from the
total branded sales was Rs. 2960.8 Cr. in compression of 2476.7 in last year
TURNOVER FROM
BRANDED BASMATI RICE
The operating profit of Kohinoor Foods increased by 22.16% YoY to Rs 485
millions from Rs 397.1 millions.
The operating profit margin of the company increased to 8.97% in FY06
from 7.83% in the previous year due to higher growth in the more profitable
ready to eat business and the increase in total branded sales. The net profit
increased to Rs 207.9 millions from 154.8 millions, an increase of 34.30% YoY,
due to higher branded sales and improved operating profit margin.
The basic and diluted EPS increased to Rs 10.61 in FY 2006 from Rs 7.90
in FY 2005. Return on equity
increased to 17.56% in FY 2006 from 14.6% in FY 2005.
Operational
Highlights
After establishing its brand in the ready to eat (ambient food
category), KFL has also started commercial production of frozen foods with a
capacity of 20 MT per day in the first phase. The portfolio in frozen foods
include: gourmet ready meals, snacks (samosas, vada, aloo bonda, dosa, idli
etc.), traditional Indian breads like naans, parathas, kulchas and frozen
vegetables etc. In the past year, the company has introduced 3 more product
lines with more than 35 SKUs (Stock Keeping Units) in the overseas markets.
KFL today commands 52% market share in branded basmati rice in modern
format stores in India. "Kohinoor
Basmati Rice" the flagship brand of the company has got the "Super
brand" status.
The company has recently set up a new cell to augment its marketing
strengths in the modern retail format in the domestic market.
Business Highlights
Ø
The company commands 52% market share in organized retail in Branded
Basmati Rice as per a recent survey by AC Nielsen (December 2005)
Ø
The flagship brand Kohinoor has been named as a "Super brand"
in Rice Category
Ø
Market leader with a 38% share in the $ 100 million domestic branded
basmati rice industry (Source : AMGF Brand Study - Ernst & Young 2004)
Ø
The company has commenced export of Kohinoor branded basmati to Saudi
Arabia, the largest market for basmati rice in the world after establishing its
brand in rest of the world.
Ø
Entered into two more mainstream chain stores in UK; Costco and Best way
Cash & Carry with range of microwaveable rice 'Rice Treat'
Ø
The Company has now established its own distribution network in 45
Countries.
Ø
The Company has Infrastructure facility in 3 countries (India, UK &
Dubai) and also marketing offices in 4 countries (India, UK, Dubai and USA)
Ø
The company has started commercial production of basmati rice in UK
through its subsidiary Indo European Foods Limited with a capacity of 8 MT per
hour.
Major Clientele
International
Ø
TESCO - One of the world's leading and UK's no. 1 retail chain stores
Ø
Somerfield - UK's no. 4 retail chain stores
Ø
ASD A - UK's no. 2 retail chain stores
Ø
Best way Cash & Carry - UK's leading Cash & Carry Outlet
Ø
Krogers- Leading chain stores of US
Ø
Whole Foods - Leading chain stores of US
Ø
BJs-Leading chain stores of US
Ø
Costco- Leading chain stores of US, Canada and UK
Ø
Coles and Woolworths - Leading chain stores of Australia
Ø
Hankyu, Daimaru, Seijo Ishi - Leading chain stores of Japan
Ø
Tiger Food Brands - Leading FMCG conglomerate of South Africa
Ø
Malaysia Airlines
Ø
Emirates
Domestic
Ø
Taj Group
Ø
Oberoi Group
Ø
Pizza Hut
Ø Big Bazaar
Ø
Reliance R-etail
Ø
Spencer's
Ø
Shoprite
Ø
Hyper City
Ø
Twenty Four Seven
FCCB Proceeds
The company raised US $ 20 million through FCCB last year, of which US S
6 million is retained as cash on 31.03.2006. US $ 14 million were used to
strengthen overseas operations, to finance frozen food facility and to retire
long term debt in India.
Business Segments of
the company
Subject has emerged as a leading food company with a commitment to
provide quality-oriented and value added offerings to its customers through its
various business segments:
Focused Areas
Ø
Branded Basmati Rice
Ø
Branded Foods
De-focused Area
Ø
Commodities Exports
Branded Basmati Rice
("BBR")
Basmati rice can be produced only by two countries in the world viz
India and Pakistan. Indian basmati rice enjoys a good premium over Pakistani
basmati rice. Therefore, this business does not have any global competition.
The global production of basmati rice is approximately 2.3 million tons, out of
which India's share is 74%. Out of the total production of rice in India,
approximately 60% is being exported and balance 40% is being consumed in Indian
market. With the recent addition of Super Kernel basmati in India's kitty (a
variety of basmati rice grown in Pakistan and quite popular in the world
market) through its inclusion as a scheduled category in basmati exports from
the country, India's share is slated to increase in the world market. The
company is prepared to cater to additional demand from the overseas markets for
Super Kernel basmati rice and take additional market share.
The company's branded basmati sales increased by 14.7% YoY to Rs 2737.1
millions in FY'06 compared to Rs.23857 millions in FY'05. Of this in the
domestic market branded basmati sales increased by 10% to Rs 1808 millions as
compared to Rs 1642 millions in the previous fiscal. The branded basmati
exports increased by 25% to Rs.929 millions. At present, the company has 175
distributors and its products are available at more than 240000 retail outlets
across the world.
Domestic Market
Total basmati rice market in India is estimated at Rs.10000 millions.
Out of which branded basmati rice market is approximately 50% in value and 33%
in volume terms. According to a survey conducted by TNS, KFL enjoys a share of
38% in the branded basmati rice market. KFL also commands a 52% market share in
the modern retail format in the domestic market as per recent survey of AC
Nielsen. KFL is aggressively tapping organized retail market and believes that
major growth shall be led by the Big Retail Formats in the coming years. The
company expects to take it to 60% by FY 2009. KFL also plans to increase its
total market share in the organized branded basmati market from 38% to 42% by
FY 2009. To achieve this objective, KFL has already set up a separate division
to look after Big Retail Formats. The company has also made a strategic plan to
enter the upcoming rural Indian market on a large scale.
The Branded Domestic Basmati Sales increased by 10% to 1808 millions as
compared to Rs. 1642 millions in the previous fiscal. The company's products
are available in more than 215000 retail outlets. The company has 130
distributors and 470 stockists. The changing consumption patterns, organized
retail and rising disposable income are the primary growth drivers for the
domestic branded basmati rice segment. KFL expects that the growth rate of
branded basmati rice market in India will be 8-10% every year at least for next
3 years and major growth driver will be the emerging organized retail.
Export Market
Subject's focus is to export basmati rice under its own brands. To
achieve this objective, the company has set up two wholly owned subsidiaries in
UK and USA and established a joint venture company in Dubai. The company has
appointed its own Distributors in 45 countries. Presently, the company is
exporting to 60 countries. Out of that the company branded basmati goes to 45
countries. The company intends to appoint its own distributors in remaining 15
countries by FY 2009. The Branded Basmati Exports increased by 25.0% in FY06 to
Rs. 928 millions from Rs 742 millions. The CAGR of the company for the last two
years for branded basmati export has been close to 80%. Kohinoor Basmati rice
is today retailed across the world in prestigious stores like Mustafa Centre
(Singapore), TESCO and Somerfield (UK), Coles and Woolworths (Australia),
Carrefour and Giant Stores (Middle East)
Saudi Arabia is the largest market of basmati rice in the world. The
market size of Indian Basmati rice in Saudi Arabia is approx. Rs.30000
Millions. KFL has appointed a distributor to market basmati rice under Kohinoor
brand there after establishing its brand in rest of the world. The company has
been exporting basmati rice to Saudi Arabia under private labels since last 10
years and understands the market very well. KFL intends to increase its own
branded basmati share out of total basmati exports to 90% by FY 2009 in
comparison to 60% in FY 2006.
TOTAL BRANDED
BASMATI RICE
Food Business
At global level, the market size of food business is approximately US $
4 trillion out of which 70% is from processed foods. In UK alone, the market
size of food is 508 million pound which is approximately Rs.40000 millions.
Subject ventured into the food business segment through ambient food in
FY 2004. The company has increased its 'ready to eat' meal capacity to 50,000
meals per day by setting up its factory at Bahalgarh. This plant has been
conceptualized and conceived with a view of serving all type of consumers and
marketers around the world. Within a span of two years, the company is
exporting its food products to 20 countries in the world, including stores
TESCO, ASDA and SOMERFIELD in UK, KROGERS, TARGET and WHOLE FOODS in the US,
COLES and WOOLWORTHS in Australia, premium stores like HANKYU, DAIMARU, SEIJO
ISHI in Japan and prestigious client like Malaysia Airlines and many more. The
'ready to eat' food sales showed a remarkable increase of 146% YoY to Rs 223.7
millions from Rs 91 millions in the previous fiscal.
FOOD SEGMENT
Subject believes that its foods business will be major growth driver in
the coming years. The company expects its food business to contribute 25-30% of
its turnover by FY 2009.
To achieve this subject has ventured into frozen foods business whose
potential is 3 times bigger than the 'ready to eat' ambient business. KFL has
set up its own frozen foods facility at Bahalgarh wiih a capacity of 20 MT per
day which has started commercial production. In this category company will
offer gourmet ready meals, snacks (samosas, vada, aloo bonda, dosa, idli etc.),
traditional Indian breads like naans, parathas, kulchas and frozen vegetables
etc. KFL plans to increase its capacity of ready to eat business (ambient
foods) from 50000 pouches to 75000 pouches by the end of this financial year.
KFL aims to add at least another 30 countries to its ever increasing list of
customer countries in the next 3 years.
The company believes that the domestic market will play a very important
role in the food business. With the onset of modern retail chains in India
coupled with lifestyle change, the domestic market for RTE category is
witnessing significant growth. The market will be approximately Rs. 5000 millions
by FY 2009 with a CAGR of 100% the next 3 years. To get substantial share in
the Indian market, the company is augmenting its domestic distribution network
and launching a slew of new products.
Commodity Business
Segment
Subject has put in efforts to move out of commodity business, and as a
result, over the years, it has been reducing the share of unbranded and
commodity sales. The major turnover in the commodity business is coming from
the non- basmati rice, which the company is supplying to certain buyers who are
buying the basmati rice exclusively from KFL. Accordingly to latest reports
there may be a huge change in non basmati rice scenario and if there will be
any short term good opportunity, the company is geared up to explore that.
Production Facilities
At present they have the following two facilities
Murthal - To process basmati rice with a capacity of 40 MT per hour.
This is one of the largest Basmati Rice mill in India. They are using most
sophisticated machinery to process the rice.
Bahalgarh - Their another factory is located at Bahalgarh to manufacture
Food Products. This factory is manufacturing ambient food products with a
capacity of 50000 meals per day and the capacity of frozen food is 20 MT per
day. The factory has acquired adequate space for future expansion also.
Quality Certificates attained by KFL
Commitment to global
quality standards
Ø
HACCP certified
Ø
ISO 9001:2000 certified
Ø
US-FDA and EU-FSA compliant
Ø
Kosher Certified
Ø
BRC Certified (British Retail Consortium
Ø
Certified)
Robust Business
Model
Subject enjoys competitive strengths in the global market because of its
global distribution network, brand equity, global manpower. The company also
has global infrastructure with manufacturing facilities in India, UK and Dubai.
Subject is the only player to have a presence in the super premium
segment of the market. The company's exposure to variety of segments makes its
growth independent from reliance on any one segment of business or any
particular customer and therefore de risks business, ensuring stronger returns.
The company has been associated with various firsts in the industry such
as:
Ø
Branding of basmati rice
Ø
Introduction of smaller value packs to expand market base
Ø
Innovative packaging to attract customers
Ø
Use of print media and celebrity endorsement of products
Ø
Entry into the international markets with its own brand
OVERSEAS OPERATIONS
UK Operations
In the financial year 2001, KFL had established its wholly owned
subsidiary in U.K. with the name of Indo European Foods Limited
("IEFL"). IEFL owns a rice processing facility with a milling
capacity of 8 MT per hour in UK. It has a covered area of 140,000 sq feet and
has adequate space for future expansion. This has already started commercial
production in July, 2005, full effects of which will be reflected by the
financial year 2007 onwards after achieving economies of scale. The company has
logged a turnover of 4.6 million pounds in FY 05-06. IEFL currently sells its
food products and Basmati Rice to retailers in ethnic market and organized
retailers such as TESCO, Somerfield, Costco, Bestway and plans to sell its
products to ASDA, SAINSBURY and Morrisons, by March 2007. KFL has invested
Rs.290 millions in its wholly owned subsidiary in U.K.
US Operations
In the financial year 2000, KFL had established its wholly owned
subsidiary in U.S.A. Satnam Overseas Limited Inc. ("SOLI"). The
company has logged a turnover of US $3.6 million in FY 05-06. At present SOLI
is marketing its products through distributors. The company plans to open its
own distribution offices. With the new system company will approach retailers
directly instead of approaching them through distributors. This step will
reduce the dependence of the company on the distributor who are creating and
promoting their own brands. KFL has also set up a different division to get big
retail outlets. At present, SOLI is selling its products through a number of
mainstream stores like Whole Foods, BJs, Costco, Krogers apart from the ethnic
stores.
Dubai Operations
KFL had established a joint venture company Rich Rice Raisers Factory
L.L.C. (RRR) in the financial year 2001 in Dubai to augment its marketing
strengths in the middle-east region. RRR has a small rice processing facility
in Dubai besides a full fledged marketing office. The company is marketing its
Kohinoor range of basmati rice and other food products in mainstream stores
like Carrefour, Lulu's Chain and Giant Stores. KFL caters to the market of Iran
from its Dubai base and intends to tap the Iraqi market from there.
Business Outlook
A progressing economy with changing consumption patterns presents a
wonderful opportunity to the company going forward. Concerted efforts would be
made persistently from the company to realize the target of becoming a leading
global food company.
Ø
The company aims to achieve a top line of Rs 10000 millions by FY 2009,
of which 90% would come from the Branded segment (Basmati rice and Food
business) and balance 10% from private labels and commodity business.
Ø
By March 2007, the company's products would also find entry into leading
stores of UK, like SAINSBURY and Morrisons.
Ø
The company's products would be sold in more than 400 stores of TESCO by
the end of current financial year.
Ø
The company will open its own distribution stores in USA.
Website Details :
India apart from her rich culture and heritage is known for many
premium agro products, unique to its land. Basmati rice is one of these prized
possessions. World over people savour the unique aroma and flavour of premium
Indian basmati rice and amongst the most revered names in Indian basmati, comes
subject. Loved and adored by millions of countrymen in India and abroad,
subject is appreciated for its divine aroma, supreme purity and extraordinary
quality.
In India, subject enjoys more than 32% share of the branded
basmati rice market, estimated at about US $ 100 million. It is the leader in
the premium segment and has emerged as the largest selling brand in the
country. Today, subject is also shipped round the globe covering all the
continents.
Processed and packed in state-of-the-art rice plant with latest
technology from around the world, Kohinoor Basmati Rice is brought to the world
stage by them at Satnam Overseas
Limited, one of the respected food companies in India.
Apart from subject, the flagship brand of the company, Satnam
Overseas has other notable brands like Trophy,
Charminar, Rose, Shehanshah and Falcon in its portfolio.
Catering to different market segments (as per their pricing and appeal) these
brands have now become popular everywhere.
KOHINOOR BASMATI RICE - PRODUCT DETAILS
Ø
Length : 7.4 mm
Ø
Colour : Creamy White
Ø
Whiteness : 42 degree on Kett Scale
Ø
Elongation : 2 and ½ times of uncooked rice
Ø
Taste : Naturally Sweet (with most authentic Indian flavour)
Ø
Grain : Long, thin and slender
Ø
Purity : 98%
Ø
Maturity : At least 12 months under controlled conditions
Ø
Source of procurement :From the foot-hills of Himalayas
(The best Indo
Gangetic Plains - Particularly the belt of Punjab)
A WIDE RANGE OF PACKAGING OPTIONS
Ø
Poly Laminated Pouches : 1/2 and 5 Kg. size
Ø
Natural and White Jute : 5,
10 and 25 Kg. size
Ø
Re-cycled & Eco Friendly Paper Bags : 5, 10 and 20 Kg. size
Ø
Pet Jars : 5 Kg. size
The Kohinoor saga commenced in the year 1976, with a rice factory
in the fertile plains of Punjab. Thereon started a celebration of the
motherland's richness in food products and spices, fuelled by India's
multicultural culinary heritage. A quest that is continuing for more than 25
years now.
Today, Satnam Overseas has emerged as a leading food company from
India, offering a diverse range of authentic Indian food products, with offices
and customers in over 55 countries around the globe.
Age - old Indian traditions merge with world class standards,
ensuring products that in India and countries across the world, when
connoisseurs want to indulge in fine taste and finer traditions, Kohinoor is
the only thing that comes to mind.
Awards and Acclaim
Satnam Overseas’ excellence has received worldwide
acknowledgement and acclaim in the form of numerous awards and honours.
Agricultural & Processed Foods Export Development
Authority (APEDA) has bestowed the export excellence award for fifteen consecutive
years since 1991 behalf of Ministry of Commerce, Government of India.
Apart from this, Company has also won the National
Award for Excellence from the President of India and "Brand Equity"
Award from the Government of India.
The company has also been honoured by World Economic Forum, Delhi State
Government and many more prestigious organizations.
Their
Network
A quality product has little value if it does not
reach its consumer. It is with this in mind Satnam Overseas has developed an
extensive distribution network that covers not only India, but also a
significant chunk of the international market.
Over the years, Satnam Overseas has emerged as a key
player in the global market of Indian agro products. The company is recognized
as a leading supplier of premium quality Basmati rice. In the last few years,
the company has made exceptional efforts to encourage sale of basmati rice
under its flagship “Kohinoor” in the overseas market. And, they have met with
considerable success on this front.
They have now penetrated global frontiers and
established themselves as a leading player in the Basmati rice market globally.
Today, “Kohinoor”, is visible in the retail counters in a number of countries
like U.S.A., U.K., Canada, France, Saudi Arabia, Kuwait, United Arab Emirates,
etc.
In India, the company has more than a hundred
distributors, 450 stockists and over 200000 retailers, giving it a reach that
is unrivalled in the Indian market.
THE US OPERATION
S.O.L Inc, the company’s fully owned subsidiary, is
based in New Jersey and overlooks the needs of the US and Canadian markets.
THE UK OPERATION
Indo European Foods Limited, The company’s fully owned
subsidiary, is headquartered in London and looks after the European market. The
company is setting up a rice processing mill at felixtowe, U.K., Which is going
to be in commercial production by first week of July.
THE MIDDLE EAST OPERATION
Another joint venture company, Rich Rise Raisers
Factory LLC, operates from Dubai and caters to the needs of the markets in the
Middle East.
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.44.06 |
|
UK
Pound |
1 |
Rs.86.34 |
|
Euro |
1 |
Rs.57.46 |
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 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
58 |
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 |
|