MIRA
INFORM REPORT
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Report Date : |
02.03.2007 |
IDENTIFICATION
DETAILS
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Name : |
FINOLEX INDUSTRIES LIMITED |
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Registered Office : |
D1 / 10, M.I.D.C., Chinchwad, Pune – 411 019, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
28.03.1981 |
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Com. Reg. No.: |
11-24153 |
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CIN No.: [Company
Identification No.] |
U25191MH1981PTC024153 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
KLPF00119A |
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Legal Form : |
Private Limited Liability Company |
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Line of Business : |
Manufacturers of PVC Pipe |
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 20000000 |
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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 and part of Finolex
Group. 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/ Factory : |
D1 / 10, M.I.D.C., Chinchwad, Pune – 411 019, Maharashtra, INDIA |
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Tel. No.: |
91-20-27474381 / 4384 / 27477817/ 27408200 |
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Fax No.: |
91-20-27477217 / 27475232 |
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E-Mail : |
aa@finolexind.com,kbf@finolexind.com,fil@finolexind.com, pipes@finolexind.com,
pvc@finolexind.com |
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Website : |
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Factory 1 : |
Pawas Road, Pawas, Ratnagiri 415 612, Maharashtra, India |
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Tel. No.: |
91-2352-238027 / 28 / 29 / 30 / 31 |
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Fax No.: |
91-2352-238033 / 238045 |
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E-Mail : |
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Branches : |
108/109, Mahakant
Complex, Opp. V.S Hospital, Ellisbridge, Ashram Road 320, Raheja Chambers,
Bangalore - 560001 Pioneer Sudarshan Plaza,
3rd Floor, Mohan Kumarmangalam Street, Off. Nungambakkam High Road, Chennai -
600034 49/195 A-1,
Puthukkalavattam Road, Elmakkara, Cochin - 682026 202, ROYAL DIAMOND (2nd
Floor), 3, Yashwant Colony, Y.N.Road, Indore Madhya Pradesh - 452001 54, Mittal Court A Wing, Nariman Point, Mumbai – 400021 Tel:91-22- 22820062 /
22882095 14th Floor, 'A' Wing,
Statesman House, 148, Barakhamba Road, New Delhi - 110001 Ranpar Pawas Road, P.O
Box No 11, Ratnagiri - 415612 Minerva Complex, 403,
4th Floor, Sarojini Devi Road, Secunderabad - 500003 |
SOLE
PROPRIETOR/PARTNERS/DIRECTORS
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Name : |
Mr. P. P. Chhabria |
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Designation : |
Non Executive Chairman |
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Name : |
Mr. K. P. Chhabria |
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Designation : |
Managing Director |
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Name : |
Mr. Prakash P. Chhabria |
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Designation : |
Deputy Managing Director |
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Name : |
Mr. J. S. Arora |
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Designation : |
Director (Operations) |
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Name : |
Mr. S. S. Dhanorkar |
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Designation : |
Assistant Managing Director and Chief Operating Officer |
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Name : |
Mr. M. G. Bhide |
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Designation : |
Independent Director |
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Name : |
Mr. S. N. Inamdar |
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Designation : |
Independent Director |
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Name : |
Dr. N. A. Kalyani |
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Designation : |
Independent Director |
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Name : |
Mr. S. S. Marathe |
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Designation : |
Independent Director |
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Name : |
Mr. P. Subramaniam |
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Designation : |
Assistant Managing Director and Chief Financial Officer |
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Name : |
Mr. K. N. Atmaramani |
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Designation : |
Independent Director |
KEY EXECUTIVES
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Name : |
Mr. Anil Atre |
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Designation : |
Company Secretary & General Manager (Administration) |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Indian Promoter |
23368351 |
18.84 |
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Associate Companies |
40192597 |
32.41 |
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FII |
1472096 |
1.19 |
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Banks/ FIs/ Insurance Companies/ Mutual Funds |
3845259 |
3.10 |
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Private Corporate Bodies |
10029602 |
8.09 |
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Indian Public |
42949195 |
34.63 |
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NRI/OCB |
1660817 |
1.34 |
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Others |
500000 |
0.40 |
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Total |
124017917 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of PVC Pipe |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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PVC |
M.T. |
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139000 |
145064 |
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PVC Pipes |
M.T. |
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66600 |
59.713 |
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PVC Fittings |
M.T. |
|
735 |
2720 |
GENERAL
INFORMATION
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No. of Employees : |
707 |
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Bankers : |
v Bank of India v Bank of Baroda, India v Bank of Nova Scotia (Scotia Bank), Ground Floor, Mittal Tower B Wing, Nariman Point, P O Box 11507, Mumbai-400021, Maharashtra, India v Bank of Maharashtra v Citibank N.A. v Corporation Bank v State Bank of India v ICICI Bank Limited v BNP Paribas |
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Facilities : |
Secured Loan :
Unsecured Loans
: Other Loans and
Advances Acceptances – Banks : Rs.3443.493 millions |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
B.K. Khare & Company Chartered Accountants |
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Associates/Subsidiaries : |
SUBSIDIARIES v Finolex Polymers Limited ASSOCIATES v Finolex Cables Limited v Finolex Finance Limited v Creole Holding Limited v Finolex Wire Products Limited v Finolex Plastro Plasson Limited v Finolex Proprietary Limited v Katara Dental private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
150,000,000 |
Equity Shares |
Rs. 10/- each |
Rs.1500.000 millions |
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Unclassified Share Capital |
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Rs.850.000 millions |
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Total |
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Rs.2350.000
millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
124026467 |
Equity Shares |
Rs.10/- each |
Rs.1240.264
millions |
Subscribed & Paid-up Capital
|
No. of Shares |
Type |
Value |
Amount |
|
124017917 |
Equity Shares |
Rs.10/- each |
Rs.1240.179
millions |
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Less : Amount in Arrears, other than from
Directors |
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Rs.0.289
millions |
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Total |
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Rs.1239.847 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
|
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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1239.890 |
1239.847 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
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3797.097 |
3814.646 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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5036.987 |
5054.493 |
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LOAN FUNDS |
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1] Secured Loans |
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1819.332 |
1877.988 |
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2] Unsecured Loans |
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3443.493 |
3695.073 |
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TOTAL BORROWING |
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5262.825 |
5573.061 |
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DEFERRED TAX LIABILITIES |
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1066.509 |
1062.966 |
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TOTAL |
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11366.321 |
11690.520 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
|
5787.462 |
4645.595 |
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Capital work-in-progress |
|
269.461 |
784.584 |
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INVESTMENT |
|
3673.297 |
4131.900 |
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DEFERREX TAX ASSETS |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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Sundry Debtors |
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Cash & Bank Balances |
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4542.029 |
4530.675 |
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Other Current Assets |
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Loans & Advances |
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Total
Current Assets |
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4542.029 |
4530.675 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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2402.234 |
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Provisions |
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Total
Current Liabilities |
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2905.928 |
2402.234 |
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Net Current Assets |
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1636.101 |
2128.441 |
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MISCELLANEOUS EXPENSES |
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0.000 |
0.000 |
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TOTAL |
|
11366.321 |
11690.520 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
|
31.03.2006 |
31.03.2005 |
|
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Total Income |
|
7779.872 |
8583.909 |
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Profit/(Loss) Before Tax |
|
650.979 |
1347.432 |
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Provision for Taxation |
|
227.893 |
388.262 |
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Profit/(Loss) After Tax |
|
423.086 |
959.170 |
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Imports : |
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Raw Materials |
|
4106.278 |
4273.659 |
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Stores & Spares |
|
29.584 |
28.307 |
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Capital Goods |
|
153.837 |
111.508 |
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Total Imports |
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Expenditures : |
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Manufacturing Expenses |
|
5627.599 |
5854.035 |
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Salaries, Wages, Bonus, etc. |
|
212.405 |
231.873 |
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Finance Charges |
|
254.183 |
122.808 |
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Depreciation & Amortization |
|
468.207 |
443.572 |
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Other Expenditure |
|
566.499 |
584.189 |
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Total Expenditure |
|
7128.893 |
7236.477 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
|
Sales Turnover |
2297.600 |
1961.200 |
2946.500 |
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Other Income |
69.200 |
90.200 |
190.000 |
|
Total Income |
2366.800 |
2051.400 |
3136.500 |
|
Total Expenditure |
2007.800 |
1559.600 |
2659.400 |
|
Operating Profit |
359.000 |
491.800 |
477.100 |
|
Interest |
94.300 |
42.000 |
32.200 |
|
Gross Profit |
264.700 |
449.800 |
444.900 |
|
Depreciation |
134.200 |
136.400 |
136.300 |
|
Tax |
47.500 |
134.600 |
93.200 |
|
Reported PAT |
95.600 |
199.900 |
228.800 |
200606 Quarter 1
Notes
EPS is Basic & Diluted Non promoter shareholding includes 40192597 shares
(32.41%) held by Associate Company - Finolex Cables Limited 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 13
Complaints disposed off during the quarter 13 Complaints unresolved at the end
of the quarter Nil 1.Figures in respect of the previous periods have been
regrouped or rearranged wherever necessary to conform to the current period's
classification. 2. The Limited Review of the financial results of the Company
for the quarter ended June 30, 2006 has been completed by the statutory
auditors. 3. The above results were taken on record by the Board at its meeting
held on July 21, 2006.
200609 Quarter 2
Notes
EPS is Basic & Diluted Status of Investor Complaints for the quarter
ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 04 Complaints disposed off during the
quarter 04 Complaints unresolved at the end of the quarter Nil EPS is as per
weighted average number of shares outstanding during the period. Non Promoter
shareholding includes 40192597 shares (32.41%) held by Associate Company -
Finolex Cables Limited 1. The above results have been reviewed by the Audit
Committee and taken on record by the Board of Directors at its meeting held on
October 14, 2006. 2. The Limited Review of the financial results of the Company
for the quarter and half year ended September 30, 2006 has been carried out by
the statutory auditors. 3. Consequent to the grounding of a ship carrying LPG
for Bharat Petroleum Corporation Limited near the Company's jetty at Ratnagiri,
the Honourable High Court of Judicature of Bombay had passed an order on
September 28, 2006 restraining the Company from using the jetty. This order has
since been vacated on October 12, 2006 and normal operation of the jetty is
resumed. 4. Figures have been regrouped, wherever necessary.
200612 Quarter 3
Notes
Expenditure Includes (Increase)/Decrease in Stock in Trade Rs (48.521)
million Consumption of Raw Materials Rs 2196.237 million Power & Fuel Rs
273.280 million Staff Cost Rs 68.603 million Other Expenditure Rs 169.808
million 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 04 Complaints disposed off
during the quarter 04 Complaints unresolved at the end of the quarter Nil 1.
The above results have been reviewed by the Audit Committee and taken on record
by the Board of Directors at its meeting held on January 29, 2007. 2. The
'Limited Review' of the financial results of the Company for the quarter and
the nine months ended December 31, 2006 has been carried out by the Statutory
Auditors. 3. Figures have been regrouped, wherever necessary
KEY RATIOS
|
PARTICULARS |
|
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
|
1.07 |
0.90 |
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Long Term Debt-Equity Ratio |
|
1.03 |
0.86 |
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Current Ratio |
|
1.15 |
1.10 |
|
TURNOVER RATIOS |
|
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Fixed Assets |
|
0.89 |
1.12 |
|
Inventory |
|
5.11 |
6.76 |
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Debtors |
|
31.67 |
34.10 |
|
Interest Cover Ratio |
|
2.68 |
11.97 |
|
Operating Profit Margin (%) |
|
13.28 |
19.50 |
|
Profit Before Interest And Tax Margin (%) |
|
7.87 |
14.98 |
|
Cash Profit Margin (%) |
|
8.59 |
14.29 |
|
Adjusted Net Profit Margin (%) |
|
3.18 |
9.77 |
|
Return On Capital Employed (%) |
|
6.51 |
15.93 |
|
Return On Net Worth (%) |
|
5.45 |
19.78 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.73.90/- |
|
Low |
Rs.72.10/- |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was incorporated on 28.03.1981 at Pune in Maharashtra as a Finolex Pipes Limited and changed name to Finolex Industries Limited.
It’s Company Registration No. is 24153.
The company is a part of the Finolex group (FG) and is the largest PVC pipe manufacturer in the country. It is also the second public venture of the Finolex group after Finolex Cables (FCL). The company offers a wide range of PVC pipes and fittings suitable for diverse applications in agriculture, housing, telecommunication and for other segments of the industry. It also has introduced new products at regular intervals.
The company later integrated backward to manufacture PVC resin which finds application in pipes, fittings, electric cables, packaging films, etc. For this the company came out with a rights issue to part-finance its project to manufacture 1.30 TPA of PVC resin at Pawas, Maharashtra. It also entered into a technical collaboration with UHDE, Germany, for licensing and technical know-how of Hoechs’t process to manufacture PVC resin and provide basic engineering.
The main raw material of the company is Ethylene Di-Chloride (EDC) part from Ethylene. The company depends heavily on imported Ethylene Di-Chloride for the manufacture of PVC. Nearly 90% of the raw material is imported.
Finolex Polymers is a wholly owned subsidiary of the company. Pipes division of the company has been granted Quality Systems Certification Licence as per IS/ISO 9002 by the Bureau of Indian Standards. The PVC plant of the company has undertaken work to obtain ISO 14001 (Environment Management Systems) certification.
Further, the company is in a position to increase its capacity, by de-bottlenecking and adding balancing equipments at a very low cost. However it has put on hold its proposed captive co-generation power project for various reasons. Also recently the company got the approval from its members for the buyback of equity shares worth Rs 600 millions. The maximum price of the buyback has been fixed at Rs 40 per share and will be implemented through the methodology of open market purchases through the stock exchange in accordance with sebi’s buyback regulations.
BUSINESS
The company is mainly engaged in the business of manufacturing and marketing PVC pipes and fittings and PVC.
The company has technical collaboration with Uhde GmbH, Germany.
The company is in trade terms with:
v Alok Equipments Private Limited
v Chlorination Systems Engineering
v Figi Industries
v Gaurav Agencies
v General Foundries
v Hot Watt Industries
v Jade Rubber Products Private Limited
v Leak-Proof Engineering Private Limited
v Pioneer Engineering Industries
v R S B Chemical Industries
v Solid Packaging Industries
The company’s fixed assets of important value include Land (freehold and leasehold), Buildings, Plant & Machinery, Furniture & Fixtures, Vehicles and Aircraft.
Management
Discussion and Analysis
Introduction
The year under review has been one of the mixed fortunes for
the Company. On the positive side, the expansion of PVC Resin manufacturing
capacity has been completed during the year and the Company is set to take
advantage of the surge in demand of PVC Resin.
On the negative side the profit for the year has been lower
as compared to the previous year due to various reasons explained below.
Financial
Review
The year did not start on a very positive note for the
Company. The net profits for the first two quarters were severely impacted by
the steep increase in the prices of Company's raw materials. In addition the
international prices of PVC Resin declined sharply resulting in reduced
margins. There was considerable fall in production of PVC Resin during the
first quarter because of an unexpected extension of the annual maintenance
shutdown. The third and fourth quarters were however, better from the demand
and margin perspective. Overall volumes as well as margins for the year under
review for the PVC Resin business have been lower as compared to the previous
year.
The volumes and margins for the PVC Pipes business have
improved during the year under review and this bodes well for the long-term
prospects of the Company.
Indian Economy and Effect on the Company India's GDP growth
for the financial year 2005-06 is expected to be higher at 8.1 per cent as
against 7.5 percent during the previous year 2004-05. The major driver of
higher growth this year is revival in agriculture. The industrial sector too
has been on a high. Industrial growth is driven by robust performances from
manufacturing and construction sectors.
The Union Budget 2006-07 has laid an emphasis on
accelerating irrigation and agriculture. Initiatives have been targeted at
improving rural infrastructure through various Programs. The continued increase
in farm credit with interest rate on short term credit fixed at 7% as well as
efforts to improve microfinance will boost rural incomes and facilitate the
trickle down process. These measures will have positive impact on the PVC pipes
as well as PVC resin business of the company in the future.
The Union Budget 2006-07 has given a renewed thrust on rural
sector by allocating 186.96 billion rupees for rural infrastructure projects in
2006/07 and raising corpus for rural infrastructure development fund to 100
billion rupees from 73 billion. Additionally, 0.6 million hectares of
irrigation potential is expected to be created this year.
The Bharat Nirman Program, which aims at bringing basic
amenities to rural India is a key focus. Rs 186960 millions has been provided
for this program, which represents a hike of 54 %. The program aims to bring an
additional 10 million hectares under assured irrigation, construct 6 million
additional houses for the poor and provide drinking water to 74000 uncovered
habitations. Additionally, the World Bank has approved two credits for a total
of US$200 million for the National Agricultural Innovation Project.
The continued increase in farm credit as well as efforts to
improve microfinance will boost rural incomes and will have positive impact on
the demand for PVC pipes.
The company's strong and widely spread distribution network
and appropriate marketing policies have resulted in impressive growth in PVC
pipes sale.
Impact
of Globalization
The Government of India has continued its objective of
reducing import tariff to bring Indian economy in line with economies of other
Asian countries. In fact, in the case of PVC Resin and other Polymers the import
duty has been brought down to 5% in March 2006 which is probably the lowest in
Asia. The import duty on raw materials i.e. Vinyl Chloride Monomer [VCM] and
Ethylene Di-Chloride [EDC] has been brought down to 2% whereas the import duty
on another raw material Ethylene has been retained at 5%. The net duty
protection is, therefore, lowest in Asia. Though this may have some impact on
the margins, the Company is confident of standing up to the competition,
domestic as well as overseas.
On the brighter side the reduction in import duty is
expected to give a boost to the demand for downstream products, which will make
the Company's position stronger.
PVC
Expansion Project
The ongoing project of expansion of the company's PVC resin
capacity was completed during the year under review. The impact of the
additional capacity on the company's topline will be seen during 2006-07.
Subsequent to the expansion, the company's market share in the domestic market
is expected to grow to 28%.
Finance
The interest and finance charges for the year were Rs.
254.183 million as against Rs. 122.808 million of the previous year. The
increase is due to hardening of interest rates.
Finolex Industries (FIL) formerly Finolex Pipes,
incorporated in 1981 a part of the Finolex group (FG) is the largest PVC pipe
manufacturer in the country. It is also the second public venture of the FG
after Finolex Cables (FCL). The company offers a wide range of PVC pipes and
fittings suitable for diverse applications in agriculture, housing, telecommunication
and for other segments of the industry.
The company latter integrated backward to manufacture PVC resin which finds
application in pipes, fittings, electric cables, packaging film, etc. For this
the company came out with a rights issue to part-finance its project to
manufacture 0.130 million TPA of PVC resin at Pawas, Maharashtra. It also
entered into a technical collaboration with UHDE, Germany, for licensing and
technical know-how of Hoechst's process to manufacture PVC resin and provide
basic engineering.
The main raw material of the company is Ethylene Di-Chloride (EDC) apart from
Ethylene. The company depends heavily on imported EDC for the manufacture of
PVC.
Finolex Polymers is a wholly-owned subsidiary of the
company. Pipes division of the company has been granted Quality Systems
Certification Licence as per IS/ISO 9002 by the Bureau of Indian Standards. The
PVC plant of the company has undertaken work to obtain ISO 14001 (Environment
Management System) certification. It has divested its holdings in Finolex
Polymers subsequent to this effect the Finolex Polymers has ceased to be a
subsidiary of the company.
The company has proposed to expand PVC manufacturing capacity at its Ratnagiri
plant. It has already in the process of increasing the capacity PVC pipes at
Ratnagiri. The company is also planning to increase 26000 mts p.a at Ratnagiri
taking the total installed capacity of pipes to 52000 mts p.a. The Company is
also proposed to expand its PVC capacity at Ratnagiri from 130 000 tons to 260
000 tons. In this regard it has signed agreementswith OXY Vinyl, USA, Aker
Kvaerner, Netherlands and with Udhe India Limited. The expansion project is
progressing as per Schedule. Civil work is in the last stage of completion and
more than 85% of the equipments have been ordered which are arriving as per
schedule.
In April, 2002 the buy-back of equity shares to the extent of Rs.553.945
million consisting 1,99,78,977 equity shares at average price of Rs.27.73 per
share. It has also made a second buy back of 2829128 equity shares at average
price of Rs.30.83 per share at a consideration of Rs.87.2 million. During the
year 2003, the Company successfully completed its second buy back of shares by
buying and extinguishing 5200347 Equity Shares at an average price of Rs.34.24
per share at a consideration of Rs.178.072 million. With this buyback, the
total paid up share capital of the company decreased to Rs.1240.179 million as
on 27th July 2003.
During the year 2004-05,the company's jetty at Ratnagiri has achieved the
distinction of being an ISPS Code (International Code for the Security of Ships
and of Port Facilities) compliant Jetty and this is the first private ports to
receive this distinction. Also KPMG Quality Registrar (Accredited by the Dutch
Council for Accreditation has approved company's Ethylene Terminal Facility for
registration to ISO 9001:2000 and has issue a certificate of registration for
the scope of port management for handling liquid and cryogenic cargoes.
In the year 2004-05, the company has increased its installed capacity of PVC
Pipes by 1450 MT. With this expansion, the total installed capacity of PVC
Pipes has increased up to 59400 MT.
Website
Details :
Subject was incorporated in 1981 and has been in the
"Plastics" business since then. Beginning as a modest rigid PVC (Poly
Vinyl Chloride) pipe manufacturer, subject went on for backward integration and
now manufactures PVC too.
Subject is the largest PVC pipe manufacturer in India. The
Pipes division of Subject is the first Indian IS/ISO 9002 manufacturer.
Production capacity of the Pipes division is 40,000 metric tonnes per annum
spread over its two ultra modern plants at Pune and Ratnagiri. Subject offers a
wide range of PVC pipes and fittings, for diverse applications in agriculture,
housing, telecom, industry, etc., ranging between 20 mm diameter to 400 mm
diameter. Subject also manufactures specialty pipes and fittings, namely SWR
(Soil, Waste and Rain Water) pipes and fittings for construction industry. The
Pipes division of Subject has won the PLEXCONCIL "Top Exporter Award"
on five occasions.
Subject has commissioned its PVC plant near Ratnagiri (350
Kms. South of Mumbai) on the West Coast of Maharashtra State. Subject is one of
the largest PVC manufacturers in India. The 130,000 metric tonnes PVC plant has
been set up in technical collaboration with Uhde GmbH of Germany under
technology licence from Hoechst AG. Subject manufactures suspension PVC as well
as emulsion/paste PVC.
Subject's PVC plant enjoys many locational advantages, the
important one being proximity to the market. Further, the Pipes division of
Subject and Subject's associated concern consumes captively about 45,000 metric
tonnes of PVC per annum; a distinct advantage available only to Subject.
As a part of its PVC complex, Subject has set up an open sea
cryogenic jetty. The Finolex jetty is the first of its kind in the private
sector in India. It is located near the PVC plant and is presently utilized for
importing the feedstock for manufacture of PVC as well as for importing LPG.
The strength of Subject lies in its quality products and
satisfied customers. Over the years, Subject has built a very large
distribution net work which adds to it's strength. The name "Finolex"
is synonymous with "Quality" not only in India but also with
Subject's international customers.
Products
Finolex Industries manufacturing program includes a variety
of PVC in Suspension and Paste grades to meet requirements of end uses in rigid,
semi-rigid and flexible applications. Finolex PVC is available in a wide
variety of K-values suitable for all types of applications. Finolex is the
largest manufacturer of rigid PVC pipes in India and the first to get the
prestigious IS/ISO 9002 certification.
News Release :
Finolex
Industries Q3 turnover at Rs 3470 millions
Finolex Industries Limited [FIL], the leading PVC Pipes and
PVC Resin manufacturer has turned out excellent results for the quarter ended
December 31, 2006 with a net profit of Rs.228.8 millions, an increase of 56%,
as compared to the corresponding quarter of the previous year. Net sales soared
to Rs.3473.4 millions indicating a 68% increase over the previous year’s
corresponding quarter level of Rs.2063.6 millions.
Earnings Per Share (EPS) for the quarter was Rs.1.85
(corresponding quarter of the previous year Rs.1.18).
The Company’s net profit for the first nine months of the
current financial year stood at Rs.524.3 millions as compared to Rs.269.4
millions in the corresponding period of the
last year. The sales too indicated a healthy rise to Rs.8490.3 millions
during the latest period as compared to Rs.6180.1 millions in the corresponding
period of the previous year.
Commenting on the Q3 performance, Mr. S.S. Dhanorkar, Asst.
Managing Director, Finolex Industries Limited, said “sustained demand pull
coupled with increase in quantity consequent to expansion and increase in other
income have resulted in better bottom line as well as top line growth. The
Company’s wide distribution network across the country is enabling increasing
the market share from all the regions”.
FIL is the largest manufacturer of PVC Pipes and second
largest manufacturer of PVC Resin in India.
FIL has ISO/14001 Certification for Environmental Management System for
PVC Resin and PVC Pipes plants at Ratnagiri.
The Company has also been accredited with the new ISO Certification
IS/ISO 9001:2000 for PVC Pipes plant at Pune and Ratnagiri.
Outlook
PVC
Resin
The long term outlook for the industry continues to be
bright. Global demand for PVC Resin is
growing at around 3.5% p.a. while demand in India is expected to show double
digit growth in the current year. The
Company’s expanded capacity of PVC Resin has been fully absorbed in the
domestic market. The domestic demand
for PVC Resin continues to outstrip the domestic capacity.
PVC
Pipes
The demand for PVC Pipes is expected to grow significantly
in the coming years due to various Government initiatives at Central and State
levels. The strong demand growth seen
in the 3rd quarter is expected to continue in future.
Financial Highlights
|
|
Quarter ended 31.12.2006 |
Quarter ended 31.03.2005 |
Half year ended 2006 |
|
|
(Rs. In millions) |
(Rs. In millions) |
(Rs. In millions) |
|
Net Sales/ Income from Operations |
3473.400 |
2063.600 |
8490.300 |
|
Profit before Interest, Depreciation and Tax |
477.100 |
338.600 |
1327.900 |
|
Deductions for : |
32.200 |
55.700 |
168.500 |
|
Interest/ Finance Charges |
136.300 |
108.200 |
406.900 |
|
Depreciation |
79.800 |
28.000 |
228.200 |
|
Provision for Taxation |
228.800 |
146.700 |
524.300 |
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 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.44.49 |
|
UK Pound |
1 |
Rs.85.71 |
|
Euro |
1 |
Rs.58.53 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
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 |
8 |
|
--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 |
|
70 |
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 |
|