MIRA
INFORM REPORT
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Report Date : |
02.03.2007 |
IDENTIFICATION
DETAILS
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Name : |
REI AGRO LIMITED |
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Registered Office : |
Everest House, 46C Chowringhee Road, 15th Floor, Room No.
15 B, Kolkata – 700071, West Bengal |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
14.09.1994 |
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Com. Reg. No.: |
21-104573 |
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CIN No.: [Company
Identification No.] |
L99999WB1994PLC104573 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALR02394A |
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PAN No.: [Permanent
Account No.] |
AABCR4929H |
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Legal Form : |
Public Limited Liability Company.
The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Producers of Basmati Rice. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 13000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having fine
track. The company is progressing
well. 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. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual
trade terms and conditions. The company can be regarded as a promising business partner in a
medium to long-run. |
LOCATIONS
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Registered Office : |
Everest House, 46C Chowringhee Road, 15th Floor, Room No.
15 B, Kolkata – 700071, West Bengal, India |
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Tel. No.: |
91-33-32925061 / 5062 |
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Fax No.: |
91-33-22882241 |
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E-Mail : |
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Website : |
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Corporate Office : |
58A/1, Sainik Farm, New Delhi – 110062, India |
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Tel. No.: |
91-11-32905030/6030 |
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Fax No.: |
91-11-29552403 |
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Factory : |
Basmati Rice
Segment : Plot NO. 691, Sector 2, 94.8 K.M. Mile Stone, Delhi-Jaipur Road, NH –
8, Bawal Growth Centre, District Rewari, Haryana Plot No. 180D, E. F. G. H. I. J. & 181A, Sector – 3, 94.8 KM
Milestone, Delhi – Jaipur Road, Bawal Growth Centre, District Rewari, Haryana Wind Mills : Village Soda-Mada, District Jaisalmer, Rajasthan Village Dhulia, Titane & Brahmanwel, District Dhule, Maharashtra |
DIRECTORS
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Name : |
Mr. Sanjay Jhunjhunwala |
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Designation : |
Chairman |
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Name : |
Mr. Sandip Jhunjhunwala |
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Designation : |
Vice Chairman cum Managing Director |
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Name : |
Dr. ING N. K. Gupta |
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Designation : |
Director |
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Name : |
Mr. A. Chatterjee |
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Designation : |
Director |
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Name : |
Mr. K. D. Ghosh |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Raju Paul |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoter Director and Relatives |
17159500 |
44.19 |
|
Body Corporates |
5668123 |
14.60 |
|
NRIs |
1260091 |
3.24 |
|
FIIs |
10714393 |
27.59 |
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Banks, FIs, Insurance Companies |
1727147 |
4.45 |
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Public |
2301933 |
5.93 |
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TOTAL |
38831187 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Producers of Basmati Rice. |
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Brand Names : |
Premium
- Kasauti, Real Magic Mid-range
- Mr Miller, Hungama, and Ikon Economy
- Hansraj, Rain Drop |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed
Capacity |
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Basmati Rice Processing |
TPH |
49 |
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Wind Farm |
MW |
29.90 |
GENERAL
INFORMATION
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Bankers : |
Industrial Development Bank of India UCO Bank Bank of Maharashtra State Bank of Bikaner & Jaipur Dena Bank Allahabad Bank IndusInd Bank Limited State Bank of Hyderabad Indian Overseas Bank ICICI Bank Limited Corporation Bank HDFC Bank Limited United Bank of India |
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Financial Institutions : |
Indian Renewable Energy Development Agency Limited Infrastructure Development Finance Company Limited |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
Statutory
Auditor : P. K. Lilha & Company Chartered Accountants Internal Auditor
: S. Jaikishan Chartered Accountants |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
80000000 |
Equity Shares |
Rs. 10/- each |
Rs. 800.000 millions |
|
4000000 |
Preference Shares |
Rs. 100/- each |
Rs. 400.000 millions |
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TOTAL |
|
Rs. 1200.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
38831187 |
Equity Shares |
Rs. 10/-
each |
Rs. 388.311 millions |
|
4000000 |
4% Non-Convertible Redeemable Preference
Shares |
Rs. 100/-
each |
Rs. 400.000
millions |
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TOTAL |
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Rs. 788.311 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
788.311 |
734.467 |
696.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
2470.971 |
935.996 |
279.500 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
3259.282 |
1670.463 |
975.500 |
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LOAN FUNDS |
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1] Secured Loans |
5980.796 |
4259.705 |
2203.500 |
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2] Unsecured Loans |
1551.727 |
863.039 |
670.500 |
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TOTAL BORROWING |
7532.523 |
5122.744 |
2874.000 |
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DEFERRED TAX LIABILITIES |
502.556 |
230.103 |
0.000 |
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TOTAL |
11294.361 |
7023.310 |
3849.500 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2510.890 |
1573.585 |
686.500 |
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Capital work-in-progress |
559.100 |
4.848 |
0.200 |
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INVESTMENT |
5.827 |
2.246 |
0.800 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
5960.921
|
5130.871 |
3143.500 |
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Sundry Debtors |
2385.185
|
1460.207 |
977.800 |
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Cash & Bank Balances |
44.215
|
153.155 |
105.800 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
323.522
|
121.485 |
48.000 |
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Total
Current Assets |
8713.843
|
6865.718 |
4275.100 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities & Provisions |
495.299
|
1423.718 |
1114.300 |
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Total
Current Liabilities |
495.299
|
1423.718 |
1114.300 |
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Net Current Assets |
8218.544
|
5442.000 |
3160.800 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.631 |
1.200 |
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TOTAL |
11294.361 |
7023.310 |
3849.500 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
Sales Turnover |
9587.650 |
8450.152 |
6023.200 |
|
|
Other Income |
2.201 |
0.077 |
5.800 |
|
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Increase / [Decrease] of Inventory |
1377.438 |
451.085 |
216.300 |
|
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Total Income |
10967.289 |
8901.314 |
6245.300 |
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Profit/(Loss) Before Tax |
1023.306 |
541.279 |
230.800 |
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Provision for Taxation |
363.012 |
162.770 |
72.900 |
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Profit/(Loss) After Tax |
660.294 |
378.509 |
157.900 |
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Earnings in Foreign Currency : |
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Export Earnings |
708.406 |
464.604 |
N.A. |
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Interest Earned |
11.914 |
0.000 |
N.A. |
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Total Earnings |
720.320 |
464.604 |
N.A. |
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Total Imports |
38.141 |
5.933 |
N.A. |
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Expenditures : |
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Manufacturing, Administrative & Selling
Expenses |
614.047 |
510.608 |
140.000 |
|
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Power & Fuel |
0.000 |
0.000 |
40.300 |
|
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Employee Cost |
0.000 |
0.000 |
55.500 |
|
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Raw Material Consumed |
8863.036 |
7517.031 |
5597.200 |
|
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Interest |
373.472 |
291.398 |
151.600 |
|
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Depreciation & Amortization |
92.795 |
40.365 |
21.400 |
|
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Other Expenditure |
0.631 |
0.631 |
8.500 |
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Total Expenditure |
9943.981 |
8360.033 |
6014.500 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 [1st
Qtr.] |
30.09.2006 [2nd
Qtr.] |
31.12.2006 [3rd
Qtr.] |
|
Sales Turnover |
2354.300 |
2402.400 |
2407.300 |
|
Other Income |
00.000 |
00.200 |
00.000 |
|
Total Income |
2354.300 |
2402.600 |
2407.300 |
|
Total Expenditure |
1896.900 |
1979.900 |
1798.400 |
|
Operating Profit |
457.400 |
422.700 |
608.900 |
|
Interest |
131.200 |
126.600 |
188.300 |
|
Gross Profit |
326.200 |
296.100 |
420.600 |
|
Depreciation |
34.200 |
42.800 |
36.900 |
|
Tax |
33.000 |
28.700 |
44.600 |
|
Reported PAT |
193.500 |
167.700 |
253.000 |
Notes:
2006-06 Quarter 1
1. The above results have been reviewed by Audit Committee
and taken on record by the Board of Directors at their meeting held on
31.07.2006. 2. The statutory Auditors have carried out a Limited Review of the Unaudited
Financial results for the quarter ended 30.06.2006. 3. Figures have been
regrouped/rearranged wherever considered necessary. 4. Status of Investor
Complaints for the quarter ended June 30, 2006 Complaints Pending at the
beginning of the quarter Nil Complaints Received during the quarter 02
Complaints disposed off during the quarter 02 Complaints unresolved at the end
of the quarter Nil
200609 Quarter 2
Expenditure Includes (Increase)/Decrease in stock Rs 758.156
million Consumption of Raw Materials Rs 1116.441 million /Purchase of Goods
Personnel Cost Rs 19.693 million Administrative & Selling Cost Rs 85.579
million Tax include Provision for Taxation - Current Rs 28.425 million Fringe
Benefit Tax Rs 0.312 million Deferred Tax Rs 56.880 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 01 Complaints disposed off during the quarter 01 Complaints
unresolved at the end of the quarter Nil 1. The above results have been
reviewed by audit committee and taken on record by the Board of Directors at
their meeting held on October 31, 2006. 2. The Statutory Auditors have carried
out a Limited Review of the Unaudited financial results for quarter ended
September 30, 2006. 3. The Company has completed the second phase of expansion
with installation of 12 TPH Rice Milling Unit w. e. f. September 23, 2006. The
Company has also installed 6 mw wind farms in the state of Tamil Nadu during
the quarter. 4. Figure have been regrouped/rearranged wherever considered
necessary.
200612 Quarter 3
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 01 Complaints disposed off
during the quarter 01 Complaints unresolved at the end of the quarter Nil 1.
The above results have been reviewed by audit committee and taken on record by
the Board of Directors at their meeting held on January 29, 2007. 2. During the
quarter 1890433 Equity Shares of Rs. 10/- Each have been allotted at Rs.120.75
Per share on Conversion of Rs. 5251.5% FCCB's of USD 10000 Each. 3. The Board
of Directors of the company have recommended 1st interim Dividend of Rs. 1.50
per Equity Share for the financial year 2006-2007. 4. Figure have been
regrouped/rearranged wherever considered necessary.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
2.57 |
3.02 |
3.88 |
|
Long Term Debt-Equity Ratio |
1.40 |
1.23 |
1.18 |
|
Current Ratio |
1.86 |
1.48 |
1.34 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
4.33 |
6.84 |
10.14 |
|
Inventory |
1.73 |
2.04 |
2.17 |
|
Debtors |
4.98 |
6.93 |
7.00 |
|
Interest Cover Ratio |
3.62 |
2.73 |
2.52 |
|
Operating Profit Margin(%) |
15.73 |
10.58 |
6.70 |
|
Profit Before Interest And Tax Margin(%) |
14.76 |
10.10 |
6.35 |
|
Cash Profit Margin(%) |
7.86 |
4.96 |
2.98 |
|
Adjusted Net Profit Margin(%) |
6.89 |
4.48 |
2.62 |
|
Return On Capital Employed(%) |
16.08 |
16.05 |
11.57 |
|
Return On Net Worth(%) |
31.98 |
41.01 |
33.08 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs.194.75/- |
|
Low |
Rs.193.25/- |
LOCAL AGENCY
FURTHER INFORMATION
Basmati rice segment:
The company reported healthy growth during the year under report derived from
brand building and efficiency enhancement. Turnover for the year under report
stood at Rs. 9587.600 millions, an increase of 13.46% over the previous year's
turnover of Rs. 8450.200 millions; the company's profit before tax for 2005-06
was Rs. 1023.300 millions, an increase of 89.04% over the previous year.
Wind power segment:
During the year under report, the company expanded its capacity from 20 MW to
29.90 MW. The revenue generated from this segment accounted for Rs. 147.427
millions in revenues in 2005-06, higher by 134% over Rs. 63.007 millions in
2004-05. The profit before tax from the energy generation business during the
year under report amounted to Rs. 29.727 millions, an increase of 25% over Rs.
23.811 millions in 2004-05.
Operations:
The year 2005-06 was a significant one for the Company as it reflected the
consolidation of business gains. During the year under report, the Company
recorded a net production of 265632 MT of basmati rice (branded and unbranded),
reflecting an increase of 15.16% compared to the previous year's production of
230672 MT. The increase in production volumes was the result of an enhanced
production capacity by the Company in recent years with subsequent expansion
under way.
Encouraged by the results in the wind power segment, the Company increased its
generation capacity to 29.90 MW.
Capital of the company:
The Company issued 3220 numbers of 1.5% foreign currency convertible bonds
(FCCBs) of US$ 10,000 each aggregating US$ 32.20 mn in July 2005. Out of the
total FCCBs issued (US$32.2 mn), FCCBs amounting to US$6.26 mn were converted
into equity shares; the remaining bonds amounting to US$25.94 mn were
outstanding for redemption/conversion as on 31.03.2006. The Company's FCCBs
were listed on the Singapore Stock Exchange.
In November 2005, the Company issued 37,70,000 numbers of Global Depository
Receipts (GDRs) at US $8.00 each aggregating US $30.16 mn. Each GDR, listed
with the London Stock Exchange, represented two equity shares and consequently
the Company issued 75,40,000 underlying equity shares.
Outlook:
The Company is optimistic of healthy growth in view of the robust nature of the
Indian economy. Relevantly, the company embarked on an expansion in its plant
capacity by 12MT per hour; this enhanced capacity is scheduled to be operative
for commercial production in the first half of the current fiscal. After
consolidating its position through capacity enhancements and extending
production line, the total capacity of the Company will be 61 MTPH. This plant
will also possess a captive co-generation power plant, which will utilize
paddy-husk, substantially reducing power cost.
Again, the company plans to increase investments in wind power generation
through the installation of wind turbine generators at different locations in
western and southern India.
Fixed Assets :
Land, Building, Plant & Machinery, Wind
Farm Generators, Office Equipment, Tubewell, Computer, Vehicles and Furniture
& Fixtures
WEBSITE DETAILS
REI Agro is a Rs. 9580 millions basmati rice processing and marketing company. From modest beginnings 9 years ago, the company has grown to hold nearly 20% of the basmati rice segment worldwide.
Today, REI Agro is an integrated player, undertaking activities right from contract farming to procuring paddy to drying, de-husking, milling and polishing, colour sorting, grading, inspection, packing, branding, distribution and retailing.
REI Agro is the largest purchaser of basmati paddy, with the largest milling capacity in India. The company has two processing units in North India with an aggregate capacity of 61 mt/ hr and expansion plan of 24 mt/ hr done in the current year. It sells its basmati in bulk in the domestic market and in well known brands like Kasauti, Real Magic, Mr Miller, Hungama, Hansraj and Al-Tahaan under its fold. REI Agro has the unique distinction of being present in all price points in the domestic market.
With 75% of the world's basmati rice being produced in India, REI Agro has proactively embarked on strengthening its branding, processing and production capabilities. It has revamped its processing capacity to 61 tonnes per hour, making it one of the largest basmati processors in India. The state - of - the - art facilities and ISO - conforming quality initiatives have resulted in superior quality grain at an excellent value proposition.
REI Agro has strengthened its team with competent and experienced professionals, leading to increased product variations, enhanced value, deepened market penetration, stronger brand and expanded global presence.
Financials
REI Agro's innovative approach in branding has resulted in higher realization across the value chain.
During Fiscal 2006, the company achieved a turnover of Rs. 9587.65 Millions. The net profit of the company surged to Rs. 660.27 Millions during the quarter.
The operating margins & net profit margins of the company have consistently improved over the past years. The company is expected to sustain these profitability margins as it continues to expand its capacities.
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.44.28 |
|
UK Pound |
1 |
Rs.86.62 |
|
Euro |
1 |
Rs.58.32 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
|
68 |
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 |
|
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