MIRA
INFORM REPORT
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Report Date : |
17.03.2007 |
IDENTIFICATION
DETAILS
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Name : |
HINDUSTAN PENCILS LIMITED |
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Registered Office : |
510, Himalaya House, 79, Palton Road, Mumbai, Maharashtra, India |
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Country : |
India |
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Financials (as on) : |
31.03.2005 |
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Date of Incorporation : |
15.03.1955 |
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Com. Reg. No.: |
11-9500 |
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CIN No.: [Company
Identification No.] |
U36991MH1955PLC009500 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMH06973B |
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Legal Form : |
A closely held public limited liability of the company |
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Line of Business : |
Manufacturer of Pencil, Erasers and Sharpeners. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 1750000 |
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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 an old well established and closely held public limited company engaged in manufacturing and marketing of Pencils having popular brands “APSARA” and “NATARAJ”. It has well knitted marking facilities all over the country. It is making steady progress in its turnover and profits. Trade relations are reported as fair. Payments are usually made as per commitments. It can be considered normal for business dealings. |
LOCATIONS
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Registered Office : |
510, Himalaya House, 79, Palton Road, Mumbai, Maharashtra, India |
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Tel. No.: |
91-22-22614505/22614506/07/2700858 |
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Fax No.: |
91-22-22626444/22614508 |
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E-Mail : |
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Website : |
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Head Office : |
712-7113, Tulsiani Chambers, 212, Nariman Point, Mumbai –400021, Maharashtra, India |
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Tel. No.: |
91-22-66308500 |
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Fax No.: |
91-22-22872703 |
DIRECTORS
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Name : |
Mr. B. J. Sanghavi |
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Designation : |
Chairman |
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Name : |
Mr. Hiralaxmi B. Sanghavi |
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Designation : |
Director |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Pencil, Erasers and Sharpeners. |
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Products : |
Pencil, Erasers and other stationery items |
PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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Pencils |
Boxes |
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9000000 |
5194895 |
GENERAL
INFORMATION
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Suppliers : |
v PCL Oil and Solvent Limited v Studio Art Process v Coronet Packaging Industries v Jasmine Art Printers v Mahavir Packaging – Maruti Gums v Magnish Packaging Industries- v Printers India v Smash Colour Prints and Packaging v Apsara Art Materials Private Limited v Sanghvi Wood Limited v Kirti Stationers Private Limited v Apsara Plastic Private Limited v Gandhi Pencils Private Limited v Patel Stationers Private Limited v Camco Stationers Private Limited v Hardik Paints Private Limited v Nachik Colour Private Limited v J. K. Enterprises |
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No. of Employees : |
1200 |
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Bankers : |
v The Saraswat Co-operative Bank Limited v Bharat Overseas Bank v Union Bank of India |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Chaturvedi and Shah Chartered Accountant |
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Address : |
Mumbai, Maharashtra, India |
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Memberships : |
Nil |
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Collaborators : |
Nil |
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Associates/Subsidiaries : |
v Apsara Art Materials Private Limited v Apsara Plastic Private Limited v Kirit Stationers Private Limited v Patel Stationers Private Limited v Gandhi Pencils Proc. Private Limited v Sanghvi Management Services Private Limited v Umesh Pencils Proc. Private Limited v Bhaumik Colours Private Limited v Nachik Colours Private Limited v J. K. Enterprises v Sanghvi Agencies v Sanghvi Corporations v Laxmi Distributors v Harsha Haren Investment Company Private Limited v Parul Dhruvi Investment Company Private Limited v Hiralaxmi Investment Company Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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25000 |
Equity Shares |
Rs.1000/- each |
Rs. 25.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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23475 |
Equity Shares |
Rs. 1000/- each |
Rs. 23.475 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
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SHAREHOLDERS
FUNDS |
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1]
Share Capital |
23.475 |
23.475 |
23.475 |
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2]
Reserves & Surplus |
430.761 |
377.715 |
345.839 |
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NET WORTH |
454.236 |
401.190 |
369.314 |
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LOAN
FUNDS |
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1]
Secured Loans |
274.895 |
238.775 |
242.897 |
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2]
Unsecured Loans |
1.214 |
8.723 |
14.108 |
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TOTAL BORROWING |
276.109 |
247.498 |
257.005 |
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Deferred
Tax Liability |
18.232 |
16.241 |
15.708 |
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TOTAL
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748.577 |
664.929 |
642.027 |
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APPLICATION
OF FUNDS |
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FIXED
ASSETS [Net Block] |
360.714 |
398.858 |
384.440 |
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Capital
work-in-progress |
17.243 |
0.000 |
11.594 |
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INVESTMENTS |
0.068 |
0.065 |
0.065 |
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CURRENT
ASSETS, LOANS & ADVANCES |
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Inventories |
346.093 |
293.464 |
253.417 |
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Sundry
Debtors |
133.789 |
129.217 |
169.970 |
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Cash
& Bank Balances |
44.486 |
9.743 |
23.899 |
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Loans
& Advances |
122.869 |
97.285 |
97.958 |
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Total Current
Assets |
647.237 |
529.709 |
545.244 |
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Less
: |
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Current
Liabilities |
175.888 |
185.909 |
238.175 |
Provisions
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106.822 |
83.007 |
65.497 |
Total
Current Liabilities
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282.710 |
268.916 |
303.672 |
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Net Current Assets |
364.527 |
260.793 |
241.572 |
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MISCELLANEOUS
EXPENSES |
6.025 |
5.213 |
4.356 |
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GRAND TOTAL
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748.577 |
664.929 |
642.027 |
PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
Sales Turnover
[including other income]
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1889.566 |
1807.437 |
1648.815 |
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Profit/(Loss)
Before Tax
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80.439 |
52.456 |
93.013 |
Provision for
Taxation
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25.816 |
18.423 |
24.516 |
Profit/(Loss) After
Tax
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54.623 |
34.033 |
68.497 |
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Export Value
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160.026 |
75.457 |
75.762 |
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Import Value
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30.171 |
27.641 |
80.511 |
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Total Expenditure
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1809.127 |
1754.982 |
1555.800 |
KEY RATIOS
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PARTICULARS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
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Debt-Equity Ratio |
0.65 |
0.70 |
0.75 |
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Long Term Debt-Equity Ratio |
0.65 |
0.70 |
0.75 |
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Current Ratio |
1.99 |
1.75 |
1.67 |
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TURNOVER RATIOS |
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Fixed Assets |
3.84 |
3.49 |
2.84 |
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Inventory |
8.06 |
7.86 |
6.55 |
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Debtors |
19.59 |
14.37 |
9.76 |
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Interest Cover Ratio |
4.48 |
2.74 |
4.05 |
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Operating Profit Margin(%) |
6.49 |
7.37 |
10.87 |
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Profit Before Interest And Tax Margin(%) |
4.02 |
3.84 |
7.26 |
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Cash Profit Margin(%) |
4.60 |
5.11 |
7.61 |
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Adjusted Net Profit Margin(%) |
2.12 |
1.58 |
3.99 |
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Return On Capital Employed(%) |
15.70 |
13.60 |
20.19 |
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Return On Net Worth(%) |
13.54 |
9.44 |
19.26 |
LOCAL AGENCY
FURTHER INFORMATION
Conservation Of
Energy s
l. The Company is
consuming electricity and power supplied by the Electricity Board and the
energy is utilised at the optimum level hence,-there are no measures taken for
conservation of energy
2. In view of
the(t)above,there are no additional investments or proposals for reduction in
energy consumption and the question of its impact on reduction of cost of
production of goods does not arise.
3.The disclosure
in respect of total energy consumption and energy consumption per unit of
production does not. apply to the company.
Fixed
assets
v
Lands
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Leasehold Land
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Plant and Machinery
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Moulds
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Electrical Installation
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Other Equipments
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Vehicles
v
Technical Knowhow
AS PER WEBSITE
Established in 1958, Hindustan Pencils has perfected the process of
manufacturing pencils to a fine art. With the latest machinery in place, today
their state-of-the-art manufacturing units Manufacture upto 3.5 million
pencils, 0.45 million sharpeners, 1.2 million erasers and 0.12 million scales
daily.
Their obsession with quality has driven us to build their own manufacturing
infrastructure. Every little component like pencil lacquer, Sharpener blade
& screw that goes into the making of their products, are produced in-house.
Their brands 'Apsara' and 'Nataraj' have emerged as household names. In other
words, Hindustan Pencils Ltd has come to personify quality at a competitive
price.
Their success goes hand in hand with their societal responsibilities. By
growing trees specifically for wood used in pencil making, and using
environment friendly raw materials, they ensure that trees are insulated from
the hazards of pencil manufacture.
Their Mission
Delighting consumers with globally recognised stationery.
Quality Policy
Hindustan Pencils is committed to manufacture and market quality products of
international standards at competitive prices, in the stationery field.
Constant effort will be made by the company to meet international safety
standards and to prevent degradation of the environment.
Environment Policy
Constant effort will be made by the company in improving processes and
maximizing utilization of inputs to prevent degradation of environment. All
ingredients used by the company are non-toxic in nature. Wood being one of the
main inputs for pencils, efforts are being made to develop plantations to
ensure renewal of this precious natural resource. Research & Development
efforts are also being made to switch over to eco-friendly water based lacquers
and PVC-free formulations.
Manufacturing
Given that enduring reliability is the hallmark of their products,
understandably, they are manufactured using the most stringent quality controls
backed by years of research and development. Their 7 factories at 5 locations
in India employ the latest in technology and the best of raw materials to grant
to their products the quality, so ingrained in their product development
philosophy. Besides developing the machines for manufacture indigenously, every
component that goes into the making of their products are produced in-house.
Their concern for the environment has led us to grow their own trees to
satisfy their requirements for wood, an essential ingredient in pencil
manufacture. This practice in turn ensures an uninterrupted supply of wood of
consistent quality from their own plantations. All said and done, the outcome
of their manufacturing process are products that offer their customers
excellent "value for money".
Pencils Manufacture
The 'pencil', derived from the Latin word penicillum, seems humble
enough to be hurriedly put together in one's backyard. In this aspect, the
simplicity of the pencil is truly misleading. The common pencil uses about 40
different raw materials, the basic ones being wood, graphite and clay. The
indigenously grown wood brought specifically from the state of Jammu and
Kashmir, is first cut into slats that are as long as but only half the width of
the pencil. The slats are then subjected to wood staining and grooves are cut
into the slats.
Next, the lead, which is a mixture of micronised graphite and ball
clay, is dried and inserted into these grooves. The leads are bonded, shaped
and compressed to ensure that they are breakage resistant and long lasting.
Each of these slats with lead is then stuck together with another slat without
lead to complete the pencil. Once the pencil is created through this
"sandwich" method, they are then meticulously shaped, lacquered and
printed as per requirement.
The process results in bonded lead pencils of high calibre, about 18 cms long
that can draw a line 55 kms long and on an average write about 45,000 words.
The pencils that write smooth and dark are tipped at one end to indicate the
end that has to be sharpened, ensuring maximum utilization. Every stage of the
process is executed with maximum controls and quality checks to ensure that the
product is truly world-class.
Distribution
Their large manufacturing capacity at 5 locations across India is backed by an
impressive distribution network, which ensures that their products find their
way to every household in India.
25 depots/C & F agents, 2,500 distributors, 1,50,000 retail outlets and a
formidable field force complete the supply chain.
Their depots are spread across the length and breadth of the country and are
located at Ahmedabad, Sewree, Bhivandi, Nagpur, Indore, Raipur, Delhi,
Gaziabad, Jaipur, Kanpur, Pabhat, Ranchi, Cuttak, Gauhati, Chandigarh,
Dehradun, and Goa.
Global Sales
Their commitment to quality, competitive pricing and their enormous
manufacturing capacities have carried their products well beyond Indian shores.
At present, they export to over 32 countries which includes Bahrain,
Bangladesh, Belgium, Botswana, Brazil, Burkina Faso, Canada, Chile, Costa Rica,
Cyprus, Dominican Republic, Dakar, Egypt, El Salvador, Gabon, Gambia, Ghana,
Guinea, Guatemala, Hungary, Honduras, Italy, Iran, Israel, Ivory coast,
Jamaica, Jordan, Kenya, Kuwait, Mali, Mauritius, Mexico, Morocco, Myanmar,
Nicaragua, Niger, Nigeria, Oman, Panama, Peru, Philippines, Portugal, Puerto
Rico, Saudi Arabia, Senegal, South Africa, Spain, Sri Lanka, Suriname,
Tanzania, Thailand, Togo, Turkey, U A E, U K, U S A, Venezuela, Vietnam, West
Indies.
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.44.17 |
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UK Pound |
1 |
Rs.85.58 |
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Euro |
1 |
Rs.58.67 |
SCORE & RATING
EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
8 |
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PAID-UP CAPITAL |
1~10 |
8 |
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OPERATING SCALE |
1~10 |
8 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
8 |
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--PROFITABILIRY |
1~10 |
8 |
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--LIQUIDITY |
1~10 |
8 |
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--LEVERAGE |
1~10 |
8 |
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--RESERVES |
1~10 |
8 |
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--CREDIT LINES |
1~10 |
8 |
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--MARGINS |
-5~5 |
-- |
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DEMERIT POINTS |
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
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--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
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MERIT POINTS |
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
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--EXPORT ACTIVITIES |
YES/NO |
YES |
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--AFFILIATION |
YES/NO |
YES |
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--LISTED |
YES/NO |
NO |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
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72 |
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 |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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