MIRA INFORM
REPORT
|
Report
Date : |
21st
February, 2007 |
IDENTIFICATION DETAILS
|
Name : |
KANORIA
CHEMICALS AND INDUSTRIES LIMITED |
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Registered
Office : |
"Park Plaza" 71, Park Street, Kolkata- 700016, West
Bengal, India |
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Country
: |
India |
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Financials
(as on) : |
31.03.2006 |
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Date
of Incorporation : |
17.12.1960 |
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Com.
Reg. No.: |
21-24910 |
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CIN
No.: [Company
Identification No.] |
L00000WB1960PLC024910 |
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TAN
No.: [Tax
Deduction & Collection Account No.] |
CALK00137E |
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Legal
Form : |
A public limited liability company. The Company’s shares
are listed on the stock exchanges. |
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Line
of Business : |
Manufacturer of Caustic Soda 1 00% (NaOH), Pentaerythritol,
Aluminium Chloride and other 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 |
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Maximum
Credit Limit : |
USD
7250000 |
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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 company having satisfactory
track. Financial position is good. Payments are correct and as per
commitments. The company can be considered good for any normal business
dealings at usual trade terms and conditions. |
LOCATIONS
|
Registered
Office : |
"Park Plaza" 71, Park Street, Kolkata- 700 016 |
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Tel.
No.: |
91-033-22806692 , 2499472, 22499473, 22499474 |
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Fax
No.: |
91-033-22470263, 22499466 |
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Email
: |
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Website
: |
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Corporate
Office : |
Indra Prakash, 21 Barakhamba Road, New Delhi - 110001 |
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Tel.
No.: |
91-11-23716580 / 81 / 83, 23722582, 23755174, 23357192, 23357194 |
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Fax
No.: |
91-11-23717203, 23355824 |
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Factory
: |
v
Renukoot Chemical Works P.O. Renukoot, Distt. Sonebhadra, Uttar Pradesh - 231217 Tel:
+91-5446-252075, 252044, 252055 Saltworks P.O. Samakhali-370 150, Gandhidham
(Gujarat) Alco Chemicals Segment Ankleshwar Chemical Works 3407, GIDC Industrial Estate, P.O.
Ankleshwar-393 002, Dist. Bharuch (Gujarat) Bio-Compost Plant Village Sengpur, Taluka:
Ankleshwar-393 002, District Bharuch (Gujarat). Wind Farm Vill: Dhank Jaluka: Upleta, Dist:
Rajkot (Gujarat) v
Ankleshwar Chemical Works Kanoria Chemicals & Industries Limited Tel: +91-2646-253012 - 14, 251960 - 61, 252041 - 42 |
DIRECTORS
|
Name : |
Mr. R.V. Kanoria |
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Designation
: |
Chairman & Managing Director |
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Name : |
Ms. Supriya Gupta |
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Designation
: |
Director |
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Name : |
Mr. H.K. Khaitan |
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Designation
: |
Director |
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Name : |
Mr. Ravinder Nath |
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Designation
: |
Director |
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Name : |
Mr. G. Parthasarathy |
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Designation
: |
Director |
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Name : |
Mr. S L Rao |
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Designation
: |
Director |
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Name : |
Mr. B.D. Sureka |
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Designation
: |
Director |
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Name : |
Mr. A. Vellayan |
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Designation
: |
Director |
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Name : |
Mr. T D. Bahety |
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Designation
: |
Wholetime Director |
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Name : |
Mr. O P. Patodia |
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Designation
: |
Wholetime Director |
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OTHER
PERSONAL |
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Name : |
Mr. N K Sethia |
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Designation
: |
Company Secretary |
MAJOR SHAREHOLDERS
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
|
FII/Foreign Nationals &
NRIs/OCB |
102866 |
0.61
% |
|
Financial Institutions |
1293471 |
7.73
% |
|
Banks & Mutual Funds |
604285 |
3.61
% |
|
Promoters, Directors & their Relatives
and Associated Companies |
10739622 |
64.19
% |
|
Other Bodies Corporate |
2144817 |
12.82
% |
|
Individuals and Clearing Members |
1846439 |
11.04
% |
|
Total |
16731500 |
100.00 % |
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
|
Vardhan Limited |
82,44,292 |
49.27% |
|
Mega Resources Limited |
15,41,380 |
9.21% |
|
RV Investments Dealers Limited |
10,70,040 |
6.40% |
|
Life Insurance Corporation of
India |
4,33,483 |
2.59% |
|
IFCI Limited |
4,00,000 |
2.39% |
|
Kirtivardhan Finvest Services
Limited |
3,84,969 |
2.30% |
|
Punjab National Bank |
3,60,000 |
2.15% |
|
Aekta Limited |
3,33,401 |
1.99% |
|
United India Insurance Co. Limited |
2.66.581 |
1.59% |
|
Saumya Vardhan Kanoria |
1,85,480 |
1.11% |
|
Total |
1,32,19,626 |
79.00% |
BUSINESS DETAILS
|
Line
of Business : |
Manufacturer of Caustic Soda 1 00% (NaOH),
Pentaerythritol, Aluminium Chloride and other chemicals. |
|
|
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Products
: |
ITC Code No. 281512.00 Product Description Caustic Soda 1 00% (NaOH) ITC Code No. 290542.00 Product Description Pentaerythritol ITC Code No. 272832.000 Product Description Aluminium Chloride |
PRODUCTION STATUS
|
Particulars |
|
Unit |
Installed Capacity |
Actual Production |
|
1) Caustic Soda 1 00% (NaOH) |
|
M.T. |
52,000 |
48,051 |
|
By-Products |
|
|
|
|
|
(a) Liquid Chlorine |
|
M.T. |
40,560 |
35,743 |
|
(b) Hydrochloric Acid (Commercial
Grade) |
|
M.T. |
11,284 |
25,069 |
|
2) Stable Bleaching Powder |
|
M.T. |
15,000 |
17,089 |
|
3) Lindane |
|
M.T. |
330 |
177 |
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4) Power Generation (Net)
(Electricity)(MW/MU) |
|
M.T. |
50 |
19,795 |
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5) Aluminium Chloride |
|
M.T. |
17,000 |
11,635 |
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6) Salt (Salt Works) |
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M.T. |
- |
37,810 |
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7) Pentaerythritol |
|
M.T. |
6,000 |
6,025 |
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8) Sodium Formate |
|
M.T. |
3,900 |
3,572 |
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9) Acetaldehyde |
|
M.T. |
10,000 |
10,203 |
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10) Formaldehyde (37%) |
|
M.T. |
75,000 |
71,261 |
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11) Hexamine |
|
M.T. |
4,000 |
4,486 |
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12) Industrial Alcohol (KL) |
|
M.T. |
22,500 |
14,777 |
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13) Acetic Acid |
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M.T. |
6,000 |
5,098 |
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16) Ethyl Acetate |
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M.T. |
3,300 |
319 |
GENERAL INFORMATION
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No. of
Employees : |
About 400 |
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Bankers
: |
v Allahabad Bank v UCO Bank |
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Facilities : |
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Banking Relations : |
Satisfactory |
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Auditors
: |
Singhi & Co. Chartered Accountants 1-B, Old Post office Street,
Kolkata - 700001 |
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Associates/Subsidiaries
: |
Ř KPL International Limited Ř Prajapati Chemicals & Allieds
Limited |
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
25000000 |
Equity Shares |
Rs. 10/- each |
Rs. 250.000 millions |
|
1000000 |
Cumulative Preference Shares |
Rs. 100/- each |
Rs. 100.000 millions |
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Total |
|
Rs. 350.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
|
Issued |
|
|
|
16785600 |
Equity Shares |
Rs. 10/- each |
Rs. 167.856 millions |
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|
|
|
|
|
|
Subscribed & Paid-up Capital |
|
|
|
16731500 |
Equity Shares |
Rs. 10/- each |
Rs. 167.315 millions |
|
|
Add : Forfeited Shares |
|
Rs. 0.026 millions |
|
|
|
|
Rs. 167.341 millions |
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|
1000000 |
13.5% Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs. 30.000 millions |
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Less : Redeemed during the year |
|
Rs. 30.000 millions |
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|
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Total |
|
Rs. 167.341 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 |
167.341 |
197.341 |
237.341 |
|
|
3]
Reserves & Surplus |
1648.257 |
1444.039 |
1325.004 |
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NETWORTH
|
1815.598 |
1641.380 |
1562.345 |
|
|
LOAN
FUNDS |
|
|
|
|
|
1]
Secured Loans |
2619.316 |
1637.428 |
1309.235 |
|
|
2]
Unsecured Loans |
100.000 |
130.000 |
-- |
|
TOTAL
BORROWING
|
2719.316 |
1767.428 |
1309.235 |
|
|
DEFERRED
TAX LIABILITIES |
404.066 |
394.250 |
384.462 |
|
|
|
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|
|
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TOTAL
|
4938.980 |
3803.058 |
3256.042 |
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APPLICATION OF FUNDS
|
|
|
|
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|
|
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FIXED ASSETS [Net Block]
|
3383.562 |
2670.239 |
2663.872 |
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Capital work-in-progress
|
1085.649 |
672.813 |
227.634 |
|
|
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INVESTMENT
|
56.817 |
56.107 |
56.112 |
|
DEFERREX TAX ASSETS
|
|
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CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
471.439
|
381.633
|
316.467 |
|
|
Sundry Debtors
|
373.578
|
330.543
|
284.394 |
|
|
Cash & Bank Balances
|
19.697
|
18.627
|
28.424 |
|
|
Loans & Advances
|
211.337
|
144.629
|
118.017 |
Total Current Assets
|
1076.051
|
875.432
|
747.302 |
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
552.299
|
357.713
|
331.844 |
|
|
Provisions
|
110.800
|
113.820
|
107.034 |
Total Current Liabilities
|
663.099
|
471.533
|
438.878 |
|
Net
Current Assets
|
412.952
|
403.899
|
308.424 |
|
|
|
|
|
|
|
TOTAL
|
4938.980 |
3803.058 |
3256.042 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
3161.058 |
2932.012 |
2619.877 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
302.760 |
279.524 |
252.315 |
Provision for Taxation
|
39.195 |
52.947 |
54.348 |
Profit/(Loss) After Tax
|
263.565 |
226.577 |
197.967 |
|
|
|
|
|
|
Export Value |
126.464 |
173.608 |
NA |
|
|
|
|
|
|
Import Value |
155.803 |
33.834 |
NA |
|
|
|
|
|
Total Expenditure
|
2534.404 |
2352.190 |
2095.990 |
QUARTERLY
RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
|
Type |
1st
Qtr |
2nd
Qtr |
3rd
Qtr |
|
Sales Turnover |
931.400 |
1097.000 |
1158.700 |
|
Other Income |
11.700 |
12.100 |
13.800 |
|
Total Income |
943.100 |
1109.100 |
1172.500 |
|
Total Expenditure |
783.500 |
904.600 |
943.700 |
|
Operating Profit |
159.600 |
204.500 |
228.800 |
|
Interest |
59400 |
69.200 |
60.500 |
|
Gross Profit |
100.200 |
135.300 |
168.300 |
|
Depreciation |
70.600 |
70.800 |
73.800 |
|
Tax |
3.900 |
8.100 |
11.700 |
|
Reported PAT |
18.300 |
48.100 |
74.300 |
200606 Quarter 1 – : Gross Sales includes Gross
Sales Rs 1304.53 million Inter Unit Transfer Rs (237.30) million Expenditure
Includes (Increase) / Decrease in Stock in Trade Rs (0.53) million Consumption
of Raw Materials Rs 417.11 million Finished Goods Purchase Rs 4.16 million
Power & Fuel Rs 155.45 million Staff Cost Rs 66.61 million Other
Expenditure Rs 140.74 million Tax Includes Provision for Current Tax Rs 3.28
million Fringe benefit Tax Rs 0.68 million Deferred Tax Rs 7.41 million.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
1.30 |
0.96 |
0.78 |
|
Long Term Debt-Equity Ratio |
1.25 |
0.87 |
0.64 |
|
Current Ratio |
0.93 |
0.83 |
0.72 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
0.70 |
0.72 |
0.68 |
|
Inventory |
8.22 |
9.44 |
9.84 |
|
Debtors |
9.95 |
10.72 |
10.36 |
|
Interest Cover Ratio |
3.52 |
3.42 |
3.35 |
|
Operating Profit Margin(%) |
17.88 |
17.59 |
18.03 |
|
Profit Before Interest And Tax Margin(%) |
12.07 |
11.99 |
12.38 |
|
Cash Profit Margin(%) |
13.33 |
12.47 |
12.47 |
|
Adjusted Net Profit Margin(%) |
7.52 |
6.87 |
6.82 |
|
Return On Capital Employed(%) |
10.65 |
12.59 |
13.36 |
|
Return On Net Worth(%) |
15.38 |
14.18 |
13.11 |
STOCK PRICES
|
Face Value |
Rs. 10.00 |
|
High |
Rs. 94.90 |
|
Low |
Rs. 94.90 |
LOCAL AGENCY FURTHER
INFORMATION
FIXED ASSETS
v Goodwill
v Land and Site
v Development
v Lease hold land & Site
Development
v Biddings
v Plant & Machinery
v Railway Siding & Weigh Bridge
v Vehicles and Forklifts
v Furniture and Fixture
v Offices Laboratory
v
Capital
Work In Progress
v
Equipments etc.
Kanoria Chemicals and Industries (KCIL) is one
of the leading chemical manufacturing companies in India producing aloc
chemicals and Chloro Chemicals.
KCIL's Renukoot Chemical works (located at UP) is a fully integrated chemical
complex primarily concentrating on manufacture of Chloro chemicals, to name a
few alkali products like Caustic Soda and its bye product chlorine, Lindane,
Aluminium chlorate. This unit was erected in collaboration with Krebs &
Company, Switzerland to produce caustic soda. Since then the KCIL is
continously-adding capacity of this unit along with forward and backward
integration.
Since power and salt are the major cost component involved int the Chlor alkali
business the company has undertaken backward integration project and
implemented 25 MW Coal based captive power plant at Renukoot salt works at
Gandhidham at Gujarat. Under this forward/backward integration programme the
6875 tpa anhydrous aluminium chloride plant was commissioned during the year
1996-97 and the 25 MW power plant was commissioned on April 1997.
This plant also manufactures benzene hexachloride in technical collaboration
with Kureha Chemical Industry and C Itoh and Company, Japan and stable
bleaching powder with technical know-how from Nobel Dynamit and Friedrich Unde,
Germany.
The Alco chemical unit of the company is located at Ankleshwar, Gujarat. Is the
first plant to adopt the membrane technology to manufacture pentaerythritol. It
entered into an agreement with Asahi Glass Company, Japan, for modernisation
and further research and development. Its pentaerythritol plant is the first
manufacturer of nitration grade erythritol in India. The company's product
range includes formaldehyde and acetaldehyde.
The company's Ankleshwar division was awarded ISO 9002 for all its products in
Apr.'96. It also received an export house status in Apr.'96.
During April, 2002 the company entered into a MOU with Sachtleben Chemie GmBH
of Germany for which the latter will supply know-how and also to provide
technical and marketing assitance of Water Treatment Chemicals. It is also in
the process of expanding the Formaldehyde capacity.
The eventful year that has gone by, witnessed high pace of
action at both Divisions of KCI, the Chlor Alkali complex at Renukoot and the
Alco Chemicals manufacturing facility at Ankleshwar.
The Company continued to reap benefits from its strategy to
reduce costs, improve efficiencies in operations and enhanced production of
certain product lines.
Expansion projects at Renukoot have nearly doubled Chlor
Alkali manufacturing capacity to 90,000 TPA of Caustic Soda. Power generating
capacity has been enhanced by adding a 25MW thermal plant. These projects were
undertaken on a turnkey basis by Uhde India Limited and Thermax Limited
respectively, with an investment of approximately Rs. 1800 millions. Since
these projects were commissioned towards the end of the year, real impact on
turnover and profitability would be visible in the coming year.
The upsurge in the Aluminium industry has considerably
increased the demand for Caustic Soda. KCI is positioned well to cater to this
demand. The next phase of expansion is expected to be taken this year and would
increase the Caustic Soda manufacturing capacity to 1,30,000 TPA by December
2007. The projects, including additional production of Chlorinated products,
envisage a capital deployment of about Rs. 1500 millions.
This expansion initiative will further de-risk their
existing business and enable us to cater to the increased demand for Caustic
Soda in the Eastern region of India and also for value added Chlorinated
Derivatives. Improved Chlorine utilization and enhanced energy efficient
Caustic Soda capacity is likely to result in improved profitability.
The operations at the Alco Chemicals Division of the Company
during the year under review progressed well. Increasing efficiencies in
manufacturing processes led to higher production. The endeavour of the Division
to become a 'zero effluent1 chemical complex is expected to fructify soon. Some
environment technologies developed and employed at the complex for the first
time in the country, have today become industry benchmarks.
The Company has always taken pride in its central ethos of
sustainability. It has forged ahead in innovative use of technologies and a
desire to excel that goes beyond merely adhering to statutory requirements.
Internally this has been a rewarding experience for the Company, which has
demonstrated that environment friendliness, and efforts to utilise waste can
positively impact profitability. KCI's initiatives in environment management
have received a string of awards. Last year they reported about the two ICMA
awards for water resource management and introduction of environment management
technology with widespread impact on the chemicals industry, and the TERI award
for excellence in environment management. During the year 2005-06, KCI was
conferred three awards, namely the Golden Peacock Eco-lnnovation award, the
Greentech Environment Excellence award for outstanding achievement in
environment management in the Chemical sector, and the National Award for Fly
Ash Utilisation jointly awarded by the Ministry of Power, the Ministry of
Environment & Forests and the Department of Science & Technology,
Government of India for commercial utilisation of fly ash generated by the
Company's power plant at Renukoot.
The otherwise commendable performance of the Company during
the year under review was marred by an accident at the Chlorine filling section
of KCI's Chloro Chemicals Division at Renukoot. The accident, which appears to
have been caused by a rupture in one of the Chlorine tonners, proved fatal for
six employees of the Company and injured some others. The Company has made
every effort for compensation and rehabilitation of the affected people and
their families. It has also undertaken comprehensive investigations to pinpoint
the cause of the accident and would take all necessary safety measures to
minimise the possibility of such events occurring in future.
Management Discussion And Analysis
Financial Performance With Respect To Operational
Performance
The focus of the Company
continues to remain in taking proactive measures to gain market share while, at
the same time, steadily improving profits and value to stakeholders. To achieve
these objectives KCI has pursued technologies and processes in an integrated
manner to keep costs low.
The Company during the
year under review has for the second year in succession posted an all time high
sales and profits. This has been achieved despite interruptions to facilitate
expansion programmes and the difficult phase it is witnessing in its Alco
Chemicals operations. Backed by an upward cycle in the realisations of Chlor
Alkalies during the first half of the year under review as also with the
surplus power emerging as a new source of revenue for the Company, the net
sales increased by 6.16% to Rs. 3051.3 millions from Rs.2874.3 millions in the
previous year. The profit aftertax was up by 16.32% to Rs.263.6 millions
compared to Rs.226.6 millions in 2004-05.
The operating margins
improved to 20.54% during the year under review as compared to 20.17% in the
previous year. The net profit margin in the same period improved to 8.64% from
7.88% in spite of higher depreciation due to large capitalisation mainly
related to expansion in Power Generating capacity of the Company.
The EPS and Book Value
per share increased from Rs.13.10 and Rs.96.31 respectively in the year 2004-05
to Rs.15.63 and Rs.108.51 respectively in the year 2005-06. The Return on
Capital Employed decreased from 10.39% to 8.56%, as there was a substantial
increase in Capital Employed from Rs.3800 millions in 2004-05 to Rs.4940
millions in 2005-06 mainly due to large capital expenditure programme
undertaken by the Company. Increased return, however, should be visible in the
current year's result. The Return on Net Worth continued to improve from 13.80%
in 2004-05 to 14.52% in 2005-06.
The Company made fresh
capital expenditures of Rs.1380 millions during the year under review. The long
term secured loans during the period increased by Rs.940 millions to fund the
capital expenditure Programme. Despite fresh borrowings, the Debt to Equity
ratio still stood at a comfortable level of 1.38:1.
CHLORO CHEMICALS SEGMENT
Industry structure and development
The Chlor Alkali industry in India has strengthened
significantly based on the strong growth witnessed in its user base. Caustic
Soda is used widely in diverse industries such as, pulp & paper, aluminium,
soaps & detergents, petroleum refining, rayon, power plants, chemicals and
Pharmaceuticals. While Chlorine is an important product used
for water purification, health and hygiene, Caustic Soda is a core building block
for the chemicals industry.
The industry continued to display robust growth during the
year.
AMAI (Alkali Manufacturers' Association of India) has
proactively signed the Charter on Corporate Responsibility for Environment
Protection (CREP) with the Government of India. The Indian Chlor Alkali
industry is successfully implementing this Charter.
KCI's integrated chemicals manufacturing complex at Renukoot
in Uttar Pradesh has the largest installed Caustic Soda capacity in Eastern
India. In keeping with KCI's business strategy of backward and forward
integration, the complex manufactures several downstream Chlorine based
products.
Performance
At the Chloro Chemicals Division, the production of Caustic Soda
Lye was at 48,051 MT as against 47,166 MT in the previous year. Production of
Aluminium Chloride was at 11,635 MT as against 13,006 MT in the previous year
and is backed by technological upgradation.
Poly Aluminium Chloride has enabled the Company to enter
into the business of speciality chemicals for water treatment. The plant has
produced 8,942 MT this year. Positive cash flows from this business are
expected only in the ensuing years, when volumes increase substantially.
At the time of printing this report, the membrane cell
technology based 110 TPD Caustic Soda plant had commenced commercial
production. The performance at the Company's captive power plant was stable.
The second 25 MW power generation unit was commissioned on 23rd October 2005. The
net generation grew by 12% from 176.81 MU to 197.95 MIL
Outlook
With sustained economic growth, demand for both Caustic Soda
and Chlorine have also grown, which augurs well for improvements in the
characteristics and constitution of the market.
Growth in the production of Alumina and expansion in
capacities for manufacturing Aluminium would continue to spur demand for
Caustic Soda.
Growth in the steel industry has contributed to increased
demand for Caustic Soda and Hydrochloric Acid.
ALCO CHEMICALS SEGMENT
Opportunities
Sources of raw materials and markets for finished products
are available in close proximity to the Company's Alco Chemicals Division at
Ankleshwar. The Division enjoys the advantage of being well connected to major
commercial ports.
The totally integrated nature of operations at the Division
makes it a highly efficient and cost effective manufacturer. The plant produces
most of its own inputs and also generates power from biogas released in the
course of treatment of its industrial effluent.
Performance
The Alco Chemicals Division reported steady progress through
the year. The year under review was, however, difficult with prices of raw
materials, particularly molasses, remaining at high levels. Dumping of products
from overseas markets continued to remain a threat. The Division relied on its
intrinsic strengths in terms of high degree of operational efficiency,
excellent energy management and low wastage to remain competitive in adverse
conditions. The Division used its knowledge of market dynamics and resumed
production of Ethyl Acetate. This created a source of sustainable revenue
generation.
Outlook
The outlook for the Alco Chemicals Division of the Company
continues to remain stable. Operational and technological expertise insulates
it from the vagaries of the market. • Achievement of higher purity of products
opens up new markets for the products of the Division.
The Division's leadership in some of the products it manufactures
provides an edge in marketing and procurement of raw materials.
With sound effluent and waste management practices,
bolstered by installation of a Multiple Stage Evaporation plant during the year
under review, the Division is well equipped to become a 'zero effluent'
facility in the nearfuture.
CAPACITY EXPANSIONS DURING THE YEAR
The Chloro Chemicals Division of KCI enhanced its Caustic
Soda production capacity from 50,000 MT per annum to 90,000 MT per annum by
adding a Membrane Cell based Chlor Alkali plant with a capacity of 110 MT per
day. This is one of the twin complimentary expansion projects implemented this
year. The captive power generating capacity increased to 50 MW at the Renukoot
complex by adding another 25 MW thermal power plant based on the Internally
Recirculating Fluidised Bed Combustion Boiler technology. The new Chlor Alkali
plant would be consuming approximately half the power generated by the new
power plant and the balance power would be sold to Uttar Pradesh Power Corporation
Limited (UPPCL). An agreement to this effect was signed on 15th
December2005.
The expansion projects are part of the Company's de-risking
strategy. KCI has committed to the Alkali Manufacturer's Association of India
(AMAI) Charter on Corporate Responsibility for Environment Protection (CREP).
Towards this end, KCI proposes to phase out the existing Mercury Cell based
technology in favour of Membrane Cell technology for the manufacture of Chlor
Alkalis in a progressive manner. This project is also in line with the
Company's core ethos of all round sustainability of its operations.
The expansion of Aluminium Chloride manufacturing capacity
is under progress and the capacity is expected to go up to 17,000 TPA by
October 2006.
INITIATIVES DURING THE YEAR
CHLORO CHEMICALS
To sustain efficiencies in the production of Caustic Soda,
the following steps were undertaken:
Condition based cell maintenance in place of scheduled
maintenance. Ensuring minimum variations in Caustic Soda concentration.
Utilisation of 100% saltfrom Rajasthan. Regarding Chlorine
production, 74% liquefaction efficiency was achieved against target of 76% in
order to cater to the growing demandfor Hydrochloric Acid.
Following actions were
taken to sustain the efficiency:
Ř Improving Chlorine purity from 94.0%
to 96.5%.
Ř Reduction in Hydrogen percentage at
the appropriate point of control.
ALCO CHEMICALS
Technology infusion
This year, they have introduced improved reaction system in
Pentaerythritol plant. This system is introduced to reduce impurity thereby
improving product quality. Quality of Mono Pentaerythritol has subsequently
improved along with increase in quantity of Mono Pentaerythritol produced.
Multi Stage Evaporation System (MSES): As a commitment to the
environment, an MSES plant has been installed. This system reduces quantity of
effluents through multiple evaporation process. The water is recycled into
process thereby reducing the requirement of fresh water.
Production & business process upgradation
After a gap of about three years, Ethyl Acetate plant has
been restarted in December 2005. The consumption of steam has been reduced
substantially. The product quality is also established and well accepted in the
market.
Marketing Development
Bio-sulphur recovered from H2S plant was hitherto used as
filler for their bio-organic manure. They have recently identified and engaged
a customer, who is using this Bio-sulphur as filler to other fertilizers.
Similarly after a gap of about three years, market has been re-established for
Ethyl Acetate. The quality of the product is appreciated and compares best in
the industry.
Procurement and supply chain functions
Press Mud procured from sugar mills is the primary
requirement for bio-composting. The sugar factories are not interested to sell
Press Mud because their own farmer members require it. They have been able to
convince the sugar factories to supply Press Mud in exchange of Bio-compost,
which is well accepted.
Social projects
Being committed to the well being of the society, the
Company has contributed for construction of culverts on the road connecting
Village Sengpur, where their Bio-composting plant is located, to the state
highway. This project is likely to be completed by PWD Department within next three
months.
QUALITY ACCREDITATION & OHSAS
All products manufactured at the two divisions of KCI at
Ankleshwar and Renukoot are certified under ISO 9000 Quality Management System.
The Company successfully renewed these certificates during the year.
Both the plants at Ankleshwar and Renukoot have been
accredited with ISO 14001 certification for implementing effective
environmental systems and practices. Activities in this area are coordinated by
full-fledged Environment Departments at both plants.
During the year, the Alco Chemicals Division of the Company
at Ankleshwar was accredited with OHSAS 18001 for occupational health and
safety. The Chloro Chemicals Division at Renukoot already has this
certification, which was renewed for the year.
The Directors have pleasure in presenting the Forty-sixth
Annual Report along with the Audited Accounts of the Company for the year ended
31st March 2006.
The detailed information on the performance of the Company appears in three
sections of the Annual Report under the titles The year in Review, Beyond
Business and Value. A discussion on the operations of the Company is given in
the section titled 'The year in Review'. Some of the statutory disclosures,
however, appear in this Report. Read along with the other sections, this would
provide a complete picture of the plans and performance of KCI.
As always, their focus remains to be proactive in their efforts to gain market
share while steadily improving profits and value to their stakeholders. The
success of their efforts is reflected in the results for the year, which have
been achieved despite interruptions due to facilitation of their expansion
programmes.
After a cyclical peak in the Chlor Alkali industry for a short period last
year, prices have now settled at substantially lower levels. In the Company's
expansion plans, however, this factor had already been anticipated and planned
for. Now that the Company's new 25 MW captive power plant, as also the new
Chlor Alkali membrane cell project, are commissioned, stabilisation and
improved capacity utilisation is likely to add considerably to the
profitability for the ensuing accounting period.
The Alco chemical business continues to generate steady returns.
EXPANSIONS
Power Plant
The Company has successfully commenced commercial production at its second 25
MW Power Plant at Renukoot from 15 December 2005. With this, the Company's
power generating capacity has increased to 50 MW. Surplus power is being sold
to Uttar Pradesh Power Corporation Limited (UPPCL) under an agreement to this
effect entered into with them.
Chlor Alkali Plant
Another hallmark achieved during the year was successful mechanical completion
of the Company's environment friendly Membrane Cell technology based Chlor-
Alkali plant with an installed capacity of 110 TPD at Renukoot. This has
commenced commercial production at the time of writing this report, that is 24
April 2006. With this, the total capacity has increased from 145 TPD to 255 TPD
and the Company has become the leading Chlor-Alkali chemical manufacturer in
Eastern India.
As per website
Over the years, Kanoria Chemicals & Industries (KCI) has
emerged as a leading manufacturer of Chlor-alkali and Alco-chemical based
intermediates catering to the needs of a cross section of Indian industry.
Their tenet of sustainability and transparency is reflected in the
latest ISO certifications for quality, environment and organizational health
and safety. KCI has received the CRISIL GVC Level 3 rating for its 'strong'
capability of wealth creation for all stakeholders through sound corporate
governance practices.
They have consciously built their product portfolio through global
best-in-class technological adaptations combined with a steady focus on
backward and forward integration to emerge as a low cost manufacturer. They
also have long term supply commitments with their customers both in India and
abroad.
As a responsible corporate citizen, they have gone much beyond
what is required by us by statutes. Their state-of-the-art effluent treatment
and its commercial utilization provides us with one of the greenest environs
around a chemical plant. Their community development initiative in partnership
with Business & Community Foundation of the Prince of Wales Business
Leaders' Forum, UK has built us lasting trust with the people in and around
their facilities
Their experimentation with the Reverse Osmosis (RO) technology for
treatment of distillery effluent at their Ankleshwar Chemical Works in the
state of Gujarat, has achieved heartening success in this pioneering effort in
the country. The treatment plant is up and running and has received accolades
from several quarters including the Indian Chemical Manufacturers' Association
(ICMA) award for water conservation in the fiscal year 2004-05.
I extend an invitation to learn more about Kanoria Chemicals &
Industries Limited. Do browse their website. They welcome the comments at info@kanoriachem.com.
R.V. Kanoria
Chairman & Managing Director
Kanoria Chemicals & Industries Limited
Overview
KANORIA CHEMICALS & INDUSTRIES LIMITED
Kanoria Chemicals & Industries Limited (KCI) is an ISO 9001,
ISO 14001 and OHSAS 18001 certified leading manufacturer of chemical
intermediates in India.
KCI has two manufacturing facilities, one at Renukoot in Uttar
Pradesh, which manufactures Chlor-Alkalis, Chlorine derivatives and water
treatment chemicals; and the second at Ankleshwar in Gujarat, which
manufactures Alcohol based intermediates. The company's portfolio comprises of
over 15 products, with a market leadership in three and substantial shares in
all others. KCI also operates a 25MW thermal power plant in Renukoot, and
enjoys cost advantage as a result of backward and forward integration.
KCI has been rated 'CRISIL GVC Level 3' for its strong capability
with respect to wealth creation for all its stakeholders while adopting sound
corporate governance practices.
KCI steadfastly believes in the core values of sustainability,
transparency, ethical business practices, and maintaining high standards of
corporate governance. The company's vision statement "To be India's
leading manufacturer of chemical intermediates with a focus on sustainability
and transparency" summarises its ethos.
The Indian Chemicals Manufacturers Association (ICMA) has awarded
Kanoria Chemicals & Industries Limited (KCI) the prestigious ICMA Award for
Water Resource Management in Chemical Industry for the year 2003-04. In
addition, KCI has also been awarded the ICMA D.M. Trivedi Award for Introducing
Advancement in Technology having a Widespread Impact on Chemical Industry for
the year 2003-04, through a certificate of merit.
KCI was awarded the TERI Award for Corporate Excellence in
Environment Management for the year 2003-04 in recognition of its leadership
efforts towards environmental management and sustainable initiatives.
Vision
To be India's leading manufacturer of chemical
intermediates with a focus on sustainability and transparency
Mission
To achieve global standards of excellence
in their operations with focus on consumer satisfaction;
To set up high standards of product
leadership, quality and cost efficiency;
To pioneer growth through technological
innovations;
To manage financial operations of the
company optimally;
To foster a well knit human resources
culture with focus on empowerment and leadership;
To function as a
responsible corporate citizen and work towards sustainable development.
Manufacturing Location
This division manufactures Caustic Soda as the main product; and
Liquid Chlorine, Hydrochloric Acid, and Hydrogen as by-products; and Stable
Bleaching Powder, Lindane and its formulations, Aluminium Chloride,
Trichlorobenzene and Chlorinated Paraffin wax as forward integrated products.
The division also has the company's 25 MW captive thermal power
plant at Renukoot and its Salt Works at Gandhidham (Gujarat), which supplies
part of the industrial salt required for the manufacture of Caustic Soda.
KCI's Renukoot
facility is situated in a township spread over 335 acres, which also
accommodates a school, hospital, temple, guesthouse, staff quarters and
clubhouse.
Alco Chemicals Division
(Located at Ankleshwar in the state of
Gujarat)
This division comprises of an integrated organic chemical complex
set up with the finest technology that was on offer, and is producing chemicals
such as Pentaerythritol and its by-product Sodium Formate, Acetaldehyde,
Formaldehyde, Hexamine, Industrial Alcohol, Acetic Acid, Ethyl Acetate and
Carbon Dioxide.
The Alco Chemicals division also has a biogas power plant, a dual
fuel (natural gas and biogas) power plant, a wind farm and a bio-compost
manufacturing complex.
Awards and Certificates
Kanoria
Chemicals & Industries Limited (KCI) attaches great significance to
quality, safety, corporate governance and environment management.
KCI is an ISO
9001, ISO 14001 and OHSAS 18001 certified company.
KCI is rated by
CRISIL at Level 3 for Governance and Value Creation.
KCI is widely
recognised for its initiatives in environment management and technological
innovations. Some of the awards that the company has won include:
'Indian
Chemical Manufacturers' Association (ICMA) Award for Water Resource
Management in Chemical Industry 2003-04
ICMA
D.M. Trivedi Award for Introducing Advancement in Technology having a
Widespread Impact on Chemical Industry 2003-04
The
Energy & Resources Institute (TERI) Corporate Environmental Award
2003-04
The
Golden Peacock Eco-Innovation Award for Environment Management 2005,
instituted by the World Environment Foundation
Click on the picture for
Zoom View of Certificate / Award
v
ISO 9001:2000
v
ISO 14001:1996
v
ISO 14001:1996
v ICMA-Award
v ICMA-Award
v TERI Award
Major milestones in the history of
KCIL
in terms of expansions and diversifications
Year
Milestone
2005
Commissioning of a new 110 TPD plant for
manufacture of Caustic Soda through the environment-friendly Membrane Cell
technology, thus almost doubling the company's Caustic Soda manufacturing
capacity
Commissioning of the second 25 MW coal based
power plant at Renukoot, taking the total power generation capacity of the
company to 50 MW.
Signed a power purchase agreement with Power
Trading Corporation of India to gainfully utilise surplus power
2004
Further
expansion of Formaldehyde plant to 75,000 TPA
Further
expansion of Aluminium Chloride plant.
2002
Further
expansion of Penta plant to 6,000 TPA
Further
expansion of Formaldehyde plant to 50,000 TPA
Further
expansion of Acetaldehyde plant to 10,000 TPA
2000
Started
producing Hydrogen for commercial purposes
1999
Expansion
in capacity of Distillery to 225 million litres per annum
Commissioned
a 2 MW Bio-gas plant at Ankleshwar
1998
Commissioned
a 25 MW coal based power plant at Renukoot
Further
expansion in capacity of Acetaldehyde plant to 9,000 TPA
Commissioned
Acetic Acid plant with a capacity of 6,000 TPA
Commissioned
Ethyl Acetate plant with a capacity of 3,300 TPA
1997
Further
expansion in capacity of Lindane plant to 875 TPA
Commissioned
Aluminium Chloride plant with a capacity of 6,875 TPA
Further
expansion of Penta plant to 5,000 TPA
Further
expansion of Hexamine plant to 4,000 TPA
1995
Expansion
in capacity of Lindane plant to 660 TPA
1994
Started
producing Industrial Alcohol (15 million litres per annum)
1993
Expansion
in capacity of Formaldehyde plant to 33,000 TPA
1992
Commissioned
Hexamine plant with a capacity of 1,500 TPA
1991
Commissioned
a plant to manufacture Lindane with a capacity of 33 TPA
Expansion
in capacity of Acetaldehyde plant to 2,500 TPA
1988
Commissioned Formaldehyde plant with a capacity
of 16,500 TPA
Expansion in capacity of Penta to 3,000 TPA and
consequently Sodium Formate plant to 1,650 TPA.
Commenced
production of Acetaldehyde with a capacity of 6,000 TPA
1983
Commissioned another chemical complex in
Ankleshwar in the state of Gujarat, with initial capacity of 1,200 TPA of
Pentaerythritol (Penta) and 660 TPA of Sodium Formate
1980
Further
expansion of SBP plant to 15,000 TPA
1977
Expansion
in capacity of SBP to 10,000 TPA
1973
Further
expansion in capacity of Caustic Chlorine plant to 33,000 TPA
1973
Expansion
in capacity of Caustic Chlorine plant to 21,000 TPA
Added
Stable Bleaching Powder (SBP) plant with a capacity of 5,000 TPA
Started
producing own Salt.
1965
Caustic Chlorine plant commissioned at Renukoot
in the state of Uttar Pradesh with a capacity of 16,500 TPA of Caustic Soda
Products
Kanoria Chemicals & Industries Limited (KCI) is a
leading player in the Indian chemicals and intermediates market.
KCI has two manufacturing facilities, one at Renukoot in Uttar
Pradesh, which manufactures Chlor-Alkalis, Chlorine derivatives and water
treatment chemicals; and the second at Ankleshwar in Gujarat, which
manufactures Alcohol based intermediates. The company's portfolio comprises of
over 15 products, with a market leadership in three and substantial shares in
all others.
The categories
of products manufactured by KCI are:
Ethos
Kanoria Chemicals & Industries Limited (KCI), guided by its core
ethos of sustainable development. The company's vision "To be India's
leading manufacturer of chemical intermediates with a focus on sustainability
and transparency" summarises its guiding philosophy and business
objectives.
Consistently driven by its ethos, KCI has invested carefully in
augmenting its business in areas of strength and streamlining focus in areas
that have future potential. At KCI, sustainability encompasses the product mix,
technology and processes that the company has adopted, financial working,
marketability, human resources and above all the environment in which the
company operates.
KCI has evolved and honed its strategy to excel in its business
segments. This strategy engages all stakeholders in a manner that promotes
efficiency and collaborative partnerships.
In its quest for becoming the leader in the country, the company
is steadfastly pursuing newer technologies and expanding its backward and
forward linkages in manufacturing processes. This approach has enabled the
company in becoming the lowest cost manufacturer in several product categories
that the company manufactures.
The company focuses on transparency in its relationships with its
stakeholders. These relationships have been built over years and have evolved
on the dictates of the heart rather than the mind and look beyond just
conforming to statutory compliance.
KCI believes in ethical
business practices and maintains high levels of corporate governance standards.
More than three-fourths of the Board of Directors consists of Independent
Members comprising of experts with multi-disciplinary background. Recognising
such governance practices at KCI, CRISIL has rated the company at 'GVC Level
3', indicating KCI's strong capability to create wealth for its stakeholders
while adopting sound corporate governance practices.
As a responsible corporate citizen, KCI has
developed a scientific basis for providing sustainable livelihoods to people in
and around its manufacturing locations. Both KCI units at Renukoot and
Ankleshwar are ISO 14001 certified and undertake extensive greening projects.
KCI's ethos also guides the company to continuously empower its
employees for germination and cross-pollination of ideas, creation of a pool of
talent to eventually provide leadership and continuity in the ideology and
culture of the company.
Innovation in approach is critical to the success of the company,
be it technological innovations to enhance the manufacturing process,
innovations in environment sustainability; innovation in the company's
community outreach programme; or innovation in managing their human resources.
Press Releases
Kanoria
Chemicals & Industries (KCI) announces
excellent First Quarter FY 2005-06 results
-Twin
complimentary Rs. 1800 millions Chlor-Alkali and
Power expansion projects in advanced stage of completion-
-Company to
add Rs. 440 millions to its operating profit post expansion by 2007 -
Kanoria
Chemicals & Industries Limited (KCI), one of the leading Indian
manufacturers of chemical intermediates, announced the financial results for
the first quarter of the current financial year.
Net profit for Q1, FY '06 has risen by 230 % to Rs. 100.50
millions from Rs. 30.50 millions in the corresponding quarter of the previous
year on the back of an 18 % increase in turnover to Rs. 744.20 millions from
Rs. 630.60 millions in the previous year. Cash Profit for the quarter under
review stood at Rs. 154.80 millions against Rs. 81.10 millions in the previous
year, while EPS is at Rs. 5.93 versus Rs. 1.67.
Commenting on the first quarter results, Mr. R.V. Kanoria,
Chairman & Managing Director, Kanoria Chemicals and Industries Limited
(KCI), said,
"The company has posted excellent results on the basis of
improved realizations from the Chlor-Alkali segment.
Their Rs. 1800 millions
twin complimentary expansion projects at Renukoot for a greenfield 110 tons per
day state-of-the-art environment-friendly Membrane Cell Technology based
Chlor-Alkali plant and doubling of the existing power generating capacity to 50
MW are at an advanced stage of implementation. These projects are part of their
de-risking strategy and also fulfil the objective of expanding capacity to meet
the anticipated market requirement for Chlor Alkali products.
Additional power generation will enable us to meet power requirement
for the new Chlor-Alkali capacity and do away with the need for external power
even in case of planned shutdown or outages in the existing power plant. The
surplus will be sold, ensuring additional revenue stream for the company.
Similarly, the new Chlor-Alkali plant, based on environment friendly Membrane
Cell Technology, will almost double the existing caustic soda manufacturing
capacity and facilitate a smooth transition from the existing Mercury Cell
technology without impacting the bottom line.
On completion, these projects will enable KCI to firmly establish
its regional leadership in its Chlor-Alkali segment of business and strengthen
its position in Chlorine derivatives besides ensuring a quantum leap in
profitability of the company. KCI expects to add Rs. 720 millions to its
turnover and Rs. 440 millions to its operating profit at the end of fiscal
2006-07, the first full year of operation after the commissioning of these new
plants."
KCI had embarked on a twin-complimentary expansion projects at its
integrated chemical manufacturing complex in Renukoot, Uttar Pradesh in 2004.
The two projects will enhance the company's power generating capacity to 50 MW,
from existing 25 MW, with a capital outlay of Rs. 870 millions. M/s. Thermax
Limited is implementing the project on a turnkey basis for setting up of the
additional state-of-the-art 25 MW Power plant with the compact, efficient and
environment friendly Circulating Fluidised Bed Combustion (CFBC) technology.
The 110 tons per day state-of-the-art environment-friendly
Membrane Cell Technology based Chlor-Alkali plant is being implemented by M/s.
Uhde India Limited with a capital outlay of Rs. 930 millions.
This additional Caustic Soda production facility will consume
about half the power generated by the new power plant and the surplus power
will be sold to PTC India Limited under a MoU that has already been signed.
The company had earlier tied up Rs. 1500 millions debt component of
the project with State Bank of India, UTI Bank and UCO Bank. The balance Rs.
300 millions is being funded through internal accruals.
The power plant will be
eligible for a tax holiday of 10 consecutive years under Section 80-IA of the
Income Tax Act. The company's estimated future financials reflect a healthy
operating growth with sufficient margins for meeting its debt obligations and
creating wealth for its stakeholders.
Growth Strategy and Outlook for FY 2006
Kanoria Chemicals and Industries (KCI) aims to emerge as a leading
manufacturer of chemical intermediates in India. KCI has been aggressively
investing in technological innovations to improve plant level efficiencies and
adding capacity based on user industry demand. The company also acquired and re-located
the Poly Aluminium Chloride plant in Renukoot to manufacture most modern water
treatment chemicals.
KCI's Rs. 1800 millions twin-complimentary expansion
project is at an advanced stage of implementation is scheduled for
completion by December 2005. These projects will add a 110 TPD modern,
environment friendly Membrane Cell Chlor Alkali plant and double the power
plant capacity to 50 MW. This project is focused towards de-risking the company
and ensuring sustainability, the core ethos of the company.
Earlier in 2003, KCI had completed its financial
re-structuring, which released resources for fresh investment in existing
product capacities and new products. The company continues to focus on cost
control and operational optimisation across all product categories. As a
result, KCI has emerged as a low cost manufacturer of Chlor Alkalis and Alco
Chemical intermediates backed by conscious backward and forward integration in
production line. KCI also enjoys proximity to both raw materials and power giving
the company a definite competitive advantage.
Currently, the Chlor - Alkali cycle is on the upswing with
excellent growth in demand and firm prices. The cycle is expected to peak in
the current financial year and likely to remain stable in FY '07. The company
is well poised to benefit from this upturn both from the existing capacity as
well as from the addition of capacity based on Membrane Cell Technology.
On the other hand, prices of molasses, the key raw material for
the Alco Chemical, is on an upswing and is expected to remain so for the
next couple of months. This has severely impacted the Alco Chemical unit, but
the company is geared to face this challenge.
The company expects to considerably improve both its topline and
bottomline during FY '06, with the full impact of the expansions being
reflected in FY '07.
In addition, KCI will be adding new revenue streams to its topline
with-:
Poly Aluminium Chloride
(PAC):
Demand for this next generation water treatment chemical is growing and the
company aims to leverage this by virtue of being one of the largest
manufacturers of PAC.
Power: Around 10 MW surplus
power will be available with the doubling of the present power generation
capacity by December 2005. KCI has already entered into a contract with PTC
India to sell this surplus power, and wheeling into power deficient but revenue
yielding locations.
Fly ash utilization: In line with KCI's core
ethos of sustainability, the company aims to commercialise utilization of fly
ash generated by the power plant. Significant progress has been achieved in
this area. Currently the company is utilizing 100% of the fly ash of which 25%
is being used in-house. It is expected that this potential problem area would
eventually emerge as an environment-friendly, revenue yielding activity for the
company.
Kanoria Chemicals raises US$20 million through
FCCBs
New Delhi, May 31, 2006: Kanoria Chemicals & Industries Limited announces the successful
raising of US$20 million through Zero coupon Foreign Currency Convertible Bonds.
The Bonds will be convertible into equity shares at a conversion price of INR
160.00 which represents a 51.73% premium to the NSE closing price of INR 105.45
as on 30th May, 2006. The bonds have tenure of 5 year 1 week and bear a
yield-to-maturity of 7.5%.
Silverdale Services Limited, London was the Sole Lead Manager for the offering.
The money raised will be utilised to fund inter
alia expansion of Chlor Alkali capacity with simultaneous
expansion in capacities of various chlorinated derivatives.
R. V. Kanoria, Chairman and Managing Director of Kanoria Chemicals &
Industries Limited said: “We are pleased that global investors have
recognized the potential of their Company and its excellent growth prospects.
This has enabled us to raise monies at significant premium over their current
share price. The commissioning of additional 25MW power project in December
2005 and 40,000 TPA Caustic Soda plant in April 2006 has boosted the
fundamentals of the Company. With this funding, KCI is fully equipped to implement
its next phase of expansion.”
Sanjay Guglani, Managing Director of Silverdale Services said: “We are
delighted at the confidence of quality global investors in Kanoria Chemicals
convertible bond issuance. Despite tremulous market conditions, the Company has
been able to attract savvy global investors. We, at Silverdale, are proud to be
associated with the issuance as sole Lead Manager.”
Kanoria Chemicals & Industries (KCI)
is a leading manufacturer of Chlor-alkali and Alco-chemical based intermediates
with a portfolio comprises of over 15 products. Emerging as a market leader in
three and with substantial market share in all others, it is ISO 9001, ISO
14001 and OHSAS 18001 certified besides being rated a 'CRISIL GVC Level 3' for
its strong capability with respect to wealth creation for all its stakeholders
while adopting sound corporate governance practices.
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.44.20 |
|
UK Pound |
1 |
Rs.86.72 |
|
Euro |
1 |
Rs.58.23 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP
CAPITAL |
1~10 |
5 |
|
OPERATING
SCALE |
1~10 |
5 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--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 |
|
46 |
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 |
PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions