MIRA
INFORM REPORT
|
Report Date : |
22.03.2007 |
IDENTIFICATION
DETAILS
|
Name : |
CHEMPLAST SANMAR LIMITED |
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Registered Office : |
No. 9, Cathedral Road, Chennai – 600 086, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
29.09.1962 |
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Com. Reg. No.: |
18-11637 |
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CIN No.: [Company
Identification No.] |
U24230TN1985PLC011637 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHEC00051C |
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PAN No.: [Permanent
Account No.] |
AAACC3000F |
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Legal Form : |
Subject is a Public Limited Liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturer and Seller of Polyvinyl Chloride and other
chemicals, fabricating PVC Pipes, Fittings & Other Extrusions &
Moulding, etc. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ca |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Exist |
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Comments : |
Financial position is poor. Payments are slow and delayed. Directors are reported as experienced, respectable and resourceful industrialist. Their trade relations are fair. The company can be considered for any business dealings on safe and secured trade terms and conditions. |
LOCATIONS
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Registered Office : |
No. 9, Cathedral Road, Chennai – 600 086, Tamilnadu, India |
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Tel. No.: |
91-44-28118300 / 28273333 / 28273334 / 28273335 / 28273336/ 28128500 |
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Fax No.: |
91-44-28111902 / 28269359/282777411 |
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E-Mail : |
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Website : |
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Main Office: |
Bangalore Genei 6, VI Main, BDA Industrial Suburb, Near SRS
Road, Peenya, Bangalore - 560 058,
India |
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Sales Office: |
Chemplast Sanmar
Limited Harsha Bhavan, II Floor, E Block,
Connaught Place, New Delhi 110 001, India 302, III Floor, Ashoka Chambers, House No
5-9-22/1/1, Adarsh Nagar, Hyderabad - 500 063, India 407, Swastik Chambers, Sion-Trombay Road,
Chembur, Mumbai - 400 071, India EDC Installation, Behind SPIC Ammonia
Plant, Red Gate Port Trust, Tuticorin 628 004 Cabot Sanmar
Limited
Harsha Bhavan, 2nd Floor, Block ‘E’,
Connaught Place, New Delhi - 110 001. 407-412, Swastik Chambers Sion-Trombay
Road, Chembur, Mumbai - 400 071. Bangalore Genei
57, Vellalar Street, Adambakkam,
Chennai-600 088, India 106, S.R.Complex, Opp CCMB, Hubsiguda,
Hyderabad 500 007, India 407-412, Swastik Chambers, Sion Trombay
Road, Chembur C31, Mohammadpur, Near Bikaji Cama Place,
New Delhi 110 066 'Chitralaya', C12, Ambanagar Vanchiyoor
PO, Thiruvananthapuram 695 035, Kerala 701, Alkapuri Arcade, Tower B, 7th Floor,
R.C.Dutt Road, Vadodara 390 007 238A, Jodhpur Park, Kolkata 700 068 Shop No.28, 1st Floor, Rama Dhene Singh
Shopping Complex J13, West High Court Road, Laxmi Nagar,
Nagpur 440 022 406-408, 4th Floor, Century Arcade,
Narangi Baug Road, Off Boat Club Road, Pune 411 001
Sanmar
Engineering Corporation Limited
M – 2 (Third Floor), South Extension
Part-II, New Delhi –110 049 India
407, Swastik Chambers, Sion-Trombay Road,
Chembur, Mumbai - 400 071, India
Chowringhee Court, IV
Floor, 55, Chowringhee Road, Kolkata 700 071
701, Alkapuri Arcade Tower B, 7th Floor
406-408, 4th Floor, Century Arcade,
Narangi Baug Road, Off Boat Club Road
302, III Floor, Ashoka
Chambers, House No.5-9-22/1/1 Adarsh Nagar, Hyderabad 500 063, India
3, Sangna Society, I Floor, Gurukripa
Buildings, Rander Road, Surat 395 009, India
Ratnaveni Complex 48-9-18/29, 1st Floor,
Dwaraka Nagar I Lane,
39/2453, Neeti Nikethan Warriar Road,
Ernakulam, Kochi 682 016, India
J-13, West High Court Road, Laxmi Nagar,
Nagpur 440 022, India |
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Corporate Office: |
Intec Polymers 407-412, Swastik Chambers, Sion-Trombay
Road, Chembur, Mumbai - 400 071, India Sanmar
Engineering Corporation Limited 147 Karapakkam Village, Old Mahabalipuram
Road, Chennai - 600 096 89/1, Vadugapatti Village, Viralimalai 621
316, Pudukottai District |
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Regional Office : |
· Harsha Bhavan, 2nd Floor, Block ‘E’, Connaught Place, New Delhi – 110 001 Tel. 91-11-23413112 Fax. 91-11-23418164 · 407-412, Swastik Chambers, Sion-Trombay Road, Chembur, Mumbai – 400 071, Maharashtra Tel. 91-22-25973390 Fax. 91-22-25973395 |
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Plants : |
·
Plant II, Raman Nagar PO, Mettur Dam – 636 403, Sales, Tamilnadu >
PVC : Tel.
91-4298-231982 Fax.
91-4298-231986 >
Chlorochemicals : Caustic soda, chlorine, chlorinated solvents,
refrigerant gases and silicon wafers ·
Krishnagiri & Panruti, Tamilnadu >
Industrial Alcohol ·
Vedaranyam, Tamilnadu >
Industrial Salt PVC
Plant II :
Karaikal Plant: Industrial
Alcohol Plant II :
Caustic Chlor
Plant III : Karaikal Plant: Salt Works :
Metkem Silicon
Plant IV :
Mettron
Plant I :
Solvents
Plant III : Raman Nagar PO, Mettur Dam 636 403, India |
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Branches : |
Located at :- · Bangalore, Karnataka · Kolkata, West Bengal · Mumbai, Maharashtra · New Delhi |
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Other Office: |
Cabot Sanmar
Limited
Raman Nagar PO, Mettur Dam - 636 403, Salem, Tamil Nadu.
Sanmar Speciality Chemicals Limited
No.44, Suligunta Village, Theertham Road, Berigai Post, Hosur Taluk -
635 105, Dharmapuri District. Plot Nos.: 16, 17, 31 & 32, SIDCO Pharmaceuticals Industrial
Estate, Alathur Village, Chengalpattu Taluk - 603 110, Kancheepuram District.
Cell: 98410-09013
Research Centre 38, Old Mahabalipuram Road, Perungudi, Chennai - 600 096, Tamil Nadu,
India.
Intec Polymers
130/1, Jayanthbhai Desai Marg, Village Dadra, Dadra Nagar
Sanmar Engineering Corporation Limited
Asco (India) Limited
147, Karapakkam Village, Chennai - 600 096.
BS&B Safety Systems (India) Limited
147, Karapakkam Village, Chennai - 600 096.
Fisher Sanmar Limited
147, Karapakkam Village, Chennai - 600 096.
Flowserve Sanmar Limited
147, Karapakkam Village, Chennai - 600 096.
Sanmar Engineering Services Limited
Survey No. 38/2A, Old Mahabalipuram Road, Perungudi, Chennai - 600
096.
Sanmar Foundries Limited
87/1, Vadugapatti Village, Viralimalai - 621 316, Pudukottai District.
Sensortronics Sanmar Limited Survey No.38/2A, Old Mahabalipuram Road, Perungudi,
Chennai - 600 096.
Tyco Sanmar Limited
88/1B, Vadugapatti Village, Viralimalai - 621 316, Pudukottai
District.
Xomox Sanmar Limited
89/2, Vadugapatti Village, Viralimalai - 621 316, Pudukottai District.
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DIRECTORS
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Name : |
Mr. P. S. Jayaraman |
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Designation : |
Managing Director |
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Name : |
Mr. M. K. Kumar |
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Designation : |
Director |
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Name : |
Mr. C. H. Mahadevan |
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Designation : |
Director |
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Name : |
Mr. V. K. Parthasarathy |
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Designation : |
Director |
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Name : |
Mr. M.S. Sekhar |
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Designation : |
Director |
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Name : |
Mr. V. V. Subramanian |
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Designation : |
Director |
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Name : |
Mr. S V Money |
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Designation : |
Director |
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Name : |
Mr. B Natraj |
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Designation : |
Director |
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Name : |
Mr. M N Radhakrishnan |
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Designation : |
Director |
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Name : |
Mr. P U Aravind |
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Designation : |
Company Secretary |
KEY EXECUTIVES
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Name : |
Mr. R. Sukumaran |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters Holdings |
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Indian Promoters |
35986458 |
75.00 |
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Foreign Promoters |
-- |
-- |
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Persons acting in concert |
-- |
-- |
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Sub Total |
35986458 |
75.00 |
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Non- Promoters Holdings |
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Institutional Inverstors |
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1] Mutual Fund and UTI |
10962 |
0.02 |
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2] Banks, Financial Institutions, Insurance Companies |
5955826 |
12.42 |
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3] Foreign Institutional Investors |
2260 |
-- |
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Sub Total |
5969048 |
12.44 |
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Others |
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1] Private Corporate Bodies |
1189851 |
2.48 |
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2] Indian Public |
4767817 |
9.94 |
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3] NRIs/ OCBs |
62931 |
0.13 |
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4] Foreign Nationals |
5839 |
0.01 |
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Sub Total |
6026438 |
12.56 |
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GRAND TOTAL |
47981944 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer and Seller of Polyvinyl Chloride and other
chemicals, fabricating PVC Pipes, Fittings & Other Extrusions &
Moulding, etc. |
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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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Caustic soda |
MT |
|
79200 |
78985 |
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Chlorine |
MT |
|
70080 |
70421 |
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Chloromethanes |
MT |
|
22000 |
34731 |
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Trichloroethylene |
MT |
|
5000 |
2982 |
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Polyvinyl chloride |
MT |
|
60000 |
48889 |
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Refrigerant gases |
MT |
|
2500 |
1279 |
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Hydrogen gas |
MT |
|
1386 |
1823 |
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Silicon ingots (kgs.) |
MT |
|
12000 |
27118 |
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Silicon wafers (‘000 nos.) |
MT |
|
2000 |
1134 |
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Ethyl silicate |
MT |
|
600 |
374 |
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Bromine |
MT |
|
120 |
61 |
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Silicon tetrachloride |
MT |
|
600 |
513 |
GENERAL
INFORMATION
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No. of Employees : |
Around 2021 |
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Bankers : |
v Indian Overseas Bank, Chennai, Tamilnadu v State Bank of India, Chennai, Tamilnadu v Standard Chartered Grindlays Bank, Chennai, Tamilnadu |
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Facilities : |
-- |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Price Waterhouse & Company Chartered Accountants |
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Address : |
Chennai, Tamilnadu |
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Memberships : |
Nil |
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Collaborators : |
Nil |
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Associates : |
˜ Chemplast Speciality Chemicals Limtied ˜ Bangalore Genei Limited ˜ Sanmar Shipping Limited ˜ Sanmar Properties and Investments Limited ˜ Sanmar Holdings Limited ˜ Cabot Sanmar Limited ˜ Sanmar Engineering Corporation Limtied ˜ Asco (India) Limited ˜ BS & B Safety Systems (India) Limtied ˜ Fisher Sanmar Limtied ˜ FMC Technologie Sanmar ˜ Sanmar Engineering Serives Limtied ˜ Sanmar Foundries Limited ˜ Sanmar Weighing Systems Limited ˜ Sensortronics Sanmar Limited ˜ Tyco Sanmar Limited ˜ Xomox Sanmar Limited ˜ AMP Sanmar Assurance Company Limited ˜ Atofina Peroxides India Limited ˜ Cathedral Corporate Finance ˜ Cathedral Properties (Alpha) Limited ˜ Dragoco India Limited ˜ Indchem Software Technologies Limited ˜ Kalamkriya Limited ˜ Epsilon Properties Limited ˜ Fisher-Xomox Sanmar Limited ˜ Flowserve Sanmar Limited ˜ FMC Technologies Sanmar Limited ˜ Pluto Consolidations Limited ˜ Sanmar Alloy Castings Limited ˜ Sanmar Electronics Corporation Limited ˜ Sanmar Micropack Limited ˜ Sanmar Industrial Filters Limited ˜ Sanmar Securities Trading Limited ˜ Sanmar Shipping Limited ˜ Sanmar Speciality Chemicals Limited ˜ Fortis Investments (Beta) Limited ˜ Bay View Properties Limited ˜ Sanmar Group Corporate Finance ˜ Sanmar Realty Limited |
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Subsidiaries: |
v Polygon Holdings Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
75000000 |
Equity Shares |
Rs.10/- |
Rs. 750.000 millions |
|
3500000 |
Preference Shares |
Rs.100/- |
Rs. 350.000 millions |
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GRAND TOTAL |
|
Rs.1100.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
47981944 |
Equity Shares |
Rs.10/- |
Rs. 479.819 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 |
479.800 |
479.819 |
684.800 |
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3] Reserves &
Surplus |
1803.400 |
1436.200 |
1183.900 |
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NETWORTH
|
2283.200 |
1916.019 |
1868.700 |
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LOAN FUNDS |
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1] Secured Loans |
2291.400 |
2094.681 |
1781.200 |
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2] Unsecured
Loans |
421.400 |
0.000 |
362.700 |
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TOTAL BORROWING
|
2712.800 |
2094.681 |
2143.900 |
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TOTAL
|
4996.000 |
4010.700 |
4012.600 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
3908.100 |
3671.100 |
3524.300 |
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Capital work-in-progress
|
822.600 |
249.800 |
89.300 |
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INVESTMENT
|
0.300 |
0.300 |
43.400 |
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CURRENT ASSETS, LOANS &
ADVANCES
|
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Inventories
|
489.400
|
352.300
|
500.300 |
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Sundry Debtors
|
524.000
|
651.300
|
626.200 |
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Cash & Bank Balances
|
53.300
|
49.800
|
44.500 |
|
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Loans & Advances
|
917.500
|
696.100
|
542.200 |
Total Current Assets
|
1984.200
|
1749.500
|
1713.200 |
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Less :
CURRENT LIABILITIES & PROVISIONS
|
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Current Liabilities
|
1452.400
|
1392.600
|
1099.500 |
|
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Provisions
|
271.000
|
278.600
|
267.900 |
Total Current Liabilities
|
1723.400
|
1671.200
|
1367.400 |
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Net Current Assets
|
260.800
|
78.300
|
345.800 |
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MISCELLANEOUS EXPENSES
|
4.200 |
11.200 |
9.800 |
|
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|
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TOTAL
|
4996.000 |
4010.700 |
4012.600 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover
[including other income]
|
7043.400 |
6138.500 |
5840.500 |
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Profit/(Loss)
Before Tax
|
460.200 |
306.000 |
82.300 |
Provision for
Taxation
|
|
49.200 |
36.000 |
Profit/(Loss) After
Tax
|
367.100 |
256.800 |
46.300 |
|
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Export Value
|
NA |
173.013 |
236.941 |
|
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|
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Import Value
|
NA |
465.799 |
921.356 |
|
|
|
|
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Total Expenditure
|
6058.400 |
5832.500 |
5758.200 |
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 (1st
Quarter) |
30.09.2006 (2nd
Quarter) |
31.12.2006 (3rd
Quarter) |
|
Sales Turnover |
1539.900 |
1629.900 |
1460.200 |
|
Other Income |
2.700 |
14.400 |
16.000 |
|
Total Income |
1542.600 |
1644.300 |
1476.200 |
|
Total Expenditure |
1373.100 |
1411.600 |
1247.100 |
|
Operating Profit |
169.500 |
232.700 |
229.100 |
|
Interest |
39.900 |
51.700 |
53.700 |
|
Gross Profit |
129.600 |
181.000 |
175.400 |
|
Depreciation |
79.200 |
84.800 |
85.000 |
|
Tax |
5.700 |
15.300 |
25.500 |
|
Reported PAT |
44.700 |
80.900 |
64.900 |
200606 Quarter 1 - Expenditure Includes Consumption of Raw Materials Rs 1085.30 million (Increase)/Decrease in Stock Rs 2.10 million Staff Cost Rs 122.50 million Other Expenditure Rs 163.20 million Tax Indicates Provision for Current, deferred and fringe benefit tax Consumption of Raw materials Includes power and fuel and stores consumed. 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 04 Complaints disposed off during the quarter 04 Complaints unresolved at the end of the quarter Nil 1. These financial results were taken on record by the Board of Directors at their meeting held on July 25, 2006. 2. The statutory auditors have carried out a limited review of the accounts for the quarter ended June 30, 2006. 3. As all the products of the Company are basically chemicals and the increased interdependence of operations results in similar risks and rewards for the entire business, it has been decided to report the results under one segment as 'Chemicals' effective April 01, 2006. 4. Prior period figures have been regrouped, wherever necessary.
200609 Quarter 2 - Expenditure Includes Consumption of Raw Materials Rs 1091.40 million (Increase)/Decrease in Stock Rs 8.10 million Staff Cost Rs 116.60 million Other Expenditure Rs 195.50 million Tax Indicates Provision / (Reversal) for Current, deferred and fringe benefit tax 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 09 Complaints disposed off during the quarter 09 Complaints unresolved at the end of the quarter Nil 1. These financial results were taken on record by the Board of Directors at their meeting held on November 23, 2006. 2. The company is principally engaged in a single business segment viz., Chemicals and operates in one geographical segment as per Accounting Standard 17 on 'Segment Reporting' issued by the Institute of Chartered Accountants of India. 3. The Company entered the PVC products business by acquiring two PVC Pipes business undertakings on September 07, 2006. The financial results consider this acquisition and the operations of the PVC Pipes business undertakings from September 07, 2006 and consequently the figures for previous periods are not comparable with those for the quarter and half-year ended September 30, 2006. 5. The Board of Directors have approved, subject to compliance with all related formalities, the company raising equity resources on rights basis (share capital and premium) not exceeding Rs 2000 million. The company is in the process of filing draft offer documents with SEBI. 6. Prior period figures have been regrouped, wherever necessary.
200612 Quarter 3 - Expenditure Includes Consumption of Raw Materials Rs 783.10 million (Increase)/Decrease in Stock Rs 165.10 million Staff Cost Rs 126.60 million Other Expenditure Rs 172.30 million Tax Indicates Provision for Current, deferred and fringe benefit tax Consumption of Raw Materials includes power & fuel and sores consumed. 1. These financial results were taken on record by the Board of Directors at their meeting held on January 20, 2007. 2. The statutory auditors have carried out a limited review of the statement of unaudited financial results for the quarter ended December 31, 2006. 3. The company is principally engaged in a single business segment viz., Chemicals and operates in one geographical segment as per Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountants of India. 4. The Company entered the PVC products business by acquiring two PVC Pipes business undertakings on September 07, 2006. The financial results consider this acquisition and the operations of the PVC Pipes business undertakings from September 07, 2006 and consequently the figures for previous periods are not comparable with those for the quarter and nine months ended December 31, 2006. 5. The Board of Directors have approved, subject to compliance with all related formalities, the company raising equity resources on rights basis (share capital and premium) not exceeding Rs 2000 million. The company is in the process of filing draft offer documents with SEBI. 6. Prior period figures have been regrouped, wherever necessary.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt Equity Ratio |
1.14 |
1.12 |
1.39 |
|
Long Term Debt
Equity Ratio |
1.06 |
0.97 |
1.08 |
|
Current Ratio |
1.00 |
0.96 |
0.87 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.08 |
1.05 |
1.06 |
|
Inventory |
16.06 |
14.15 |
12.66 |
|
Debtors |
11.50 |
9.44 |
9.19 |
|
Interest Cover
Ratio |
3.79 |
2.04 |
1.23 |
|
Operating Profit
Margin (%) |
14.57 |
12.89 |
13.41 |
|
Profit Before
Interest and Tax Margin (%) |
9.24 |
8.53 |
7.70 |
|
Cash Profit
Margin (%) |
10.76 |
8.01 |
6.51 |
|
Adjusted Net
Profit Margin (%) |
5.43 |
3.64 |
0.81 |
|
Return on Capital
Employed (%) |
13.90 |
12.85 |
11.46 |
|
Return on Net
Worth (%) |
17.48 |
12.06 |
1.78 |
STOCK PRICES
|
Face Value |
Rs.1/- |
|
High |
Rs.7.15/- |
|
Low |
Rs.7.00/- |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was incorporated on 29th September, 1962 at Chennai in Tamilnadu having Company Registration Number 4893 under the name & style of CHEMICALS & PLASTICS INDIA LIMITED. The company merged with URETHANS (INDIA) LIMITED w.e.f. 1st October, 1991 and the name was changed to CHEMPLAST SANMAR LIMITED.
A new Registration Number was obtained by the company after the change of name. The new Company Registration Number is 11637.
Subject was formerly known as Chemicals & Plastics India Limited and was promoted by Urethanes India by Chemplast, the flagship company of the Sanmar Group.
It became a fully owned subsidiary of Chemplast in 1991 when the name was changed to the present one.
The company set up a 2500 tpa thermoplastic polyurethane plant in Tamilnadu in technical collaboration with BF Goodrich Company, USA. It manufactures caustic soda, chlorine, chlorinated solvents, PVC, refrigerant gases and industrial alcohol.
In 1991-92, the capacity of PVC was enhanced to 48000 tpa making it the third largest manufacturer of PVC resin in the country. The company formed Peroxides India in collaboration with Atochem, USA for a wide variety of polymerisation intitiators and Drechem Speciality Chemicals, in technical collaboration with Dragoco, Germany to manufacture aromatic chemicals.
The PVC capacity is being enhanced from 48000 tpa to 60000 tpa and that of chloromethanes is being enhanced to 25000 tpa. In 1995-96, Metkem Silicon, a subsidiary of the company manufacturing poly and mono crystalline silicon was merged with the holding company. During the same period, the thermoplastics polyurethane division of the company was spun off into a joint venture with Bayer, Germany. It also has entered into a joint venture with Cabot Corporation, USA for the manufacture of fumed silica as a springboard.
The company is in advanced stage of discussing raw material tie-ups for its proposed shore-based PVC project. As a measure of conservation of power, the company is replacing shell and tube acid cooler and condensers with plate heat exchangers in the chlor-alkali process.
The company has taken on hand a backward integration captive project for setting up an oxychlorination with the capital outlay of over Rs. 600 millions. This will help the company to improve captive feedstock (EDC) capacity, leading to lower dependence on imported feedstock.
During 2000-01, the company brought on stream an oxychlorination plant which would increase captive production of EDC and reduce dependence on imports and also significantly reduce the environmental impact of its operations.
Subject to necessary approvals the company planned to amalgamate Sanmar Properties and Investments (SPIL) excluding its investment and shipping business w.e.f. November 2, 2003. SPIL’s investment and shipping division would be demerged to Sanmar Holdings Limited effective from November 1, 2003. SPIL shareholders get one equity share of company for every share in SPIL.
Chloromethane production had registered an all time high at 32851 MT during the year 2001.
The project to set up a 150000 TPA PVC plant in a Greenfield location is under discussion with financial institutions. Selection of technology and EPC contactor is in final stage. The project will be kick started after the funding is tied up.
The company is engaged in manufacture and sale of poly vinyl chloride (PVC) and chlorochemicals. While all its manufacturing facilities are located at Mettur Dam near Salem in Tamilnadu, the PVC division has two industrial alcohol plants at Panruti and Krishnagiri and the chlorochemicals division a salt facility at Vedaranyam, both in Tamilnadu, demonstrating the company’s forethought vis-à-vis achieving self-sufficiency in feedstock.
The company originally had an installed capacity of 6,000 tpa of PVC that was expanded to 60000 tpa. The company has may to its credit like one of the largest manufacturers of polycrystalline silicone and among the top two largest manufacturer of chloromethanes. Over the years, the company diversified into areas like manufactures of Chloromethanes, refrigerant gases along with backward integration. The company made a major diversification decision by getting into shipping business in 1994 to protect itself from the cyclical chlorochemicals business.
The company is in advanced stage of discussing raw material tie-ups for its proposed share-based PVC project. Project implementation would start once these arrangements are in place.
The company continued to maintain
its all-round good performance during the year under review. Sales and other income
increased by 14% over the previous year. The Profit before tax for the year at
Rs.460.2 Millions inclusive of Montreal Protocol compensation receipts of
Rs.184.0 Millions registered a healthy growth of 50% over the previous year.
The performance of the company could have been substantially better but for the
increase in the fuel cost due to steep increase in oil prices which had a
negative impact of Rs.350.000 Millions on the profits for the year. The company
has drawn up plans to address this issue. With a view to conserving resources
to meet the capital expenditure programmes of the company, the Directors do not
recommend payment of dividend on equity shares for the year 2005-06.
MANAGEMENT DISCUSSION AND ANALYSIS:
The year under reference was a representative year demonstrating the cyclical
nature of the businesses the company is engaged in.
The uptrend seen in the realizations for the products manufactured such as Poly
Vinyl Chloride (PVC), Caustic Soda and Chloromethanes witnessed a reversal of
trends in the second half of the year. With escalating feedstock prices, the
margins came under pressure during this period. The focus laid by the
management in recent years on strengthening the backward integration strategy,
the acquisition of the Caustic soda facility at Karaikal which made available
low cost chlorine for operations, and the continuous investments being made to
bring in more flexibility in feedstock management, are all steps in the right
direction to manage efficiently the cyclical nature of the business. Several
investment proposals, discussed elsewhere in this report, are now under
implementation and these initiatives will further strengthen the fundamentals
of the company.
PVC Business:
The company has an integrated facility at Mettur Dam to produce 64,000 TPA of
PVC. Ethylene Di-chloride (EDC), the feedstock required to manufacture PVC is
also produced in this location.
The company continues to be the only manufacturer with capability to produce
four major PVC product groups. This has given it the flexibility to quickly
change its product mix based on comparative contribution.
Suspension Resin:
Demand for Suspension resin in the country peaked to nearly 11.5 lac tons in
the year 2005-06, registering a high growth of 25% over the previous year.
During this year, the country imported nearly 2.50 lac tons of Suspension
resin. The main driver for PVC demand continues to come from the Pipes &
Fittings sector where nearly 70% of Suspension PVC is consumed in the country.
Implementation of several irrigation, water supply and sewerage schemes by
various Governments, and the boom in the housing, construction and
infrastructure sectors will continue to drive Pipes and PVC demand in the
coming years.
Paste Resin:
Demand for Paste resin (a speciality resin) in India is at present around
65,000 MT and growing at a modest rate of 5% per year. Leather cloth production
consumes a major portion of Paste resin. With the growth in the automobile
sector, increase in leather cloth production is expected to result in higher
demand for Paste resin. The Paste resin produced by the company continues to
remain the preferred grade and is in good demand.
Battery Separator Resin (BSR):
The country's BSR demand continues to be around 6000 MT per year. The company
continues to be the sole manufacturer of BSR in India.
Copolymer Resin:
Growth in demand for Copolymer resins in the major sectors - inks and adhesives
- continues to remain modest. The company is the only manufacturer of Copolymer
resin in South Asia.
Raw Materials and Intermediates:
EDC is the key intermediate to produce PVC. Though the company has an EDC
production facility at Mettur Dam to meet its entire requirement to produce
PVC, actual production of EDC depends on the price/cost of raw materials i.e.,
Denatured Spirit (DNS) and Chlorine. While the cost of chlorine has been
minimised with the enhanced captive production at the Karaikal facility, the
cost of DNS depends upon the vicissitudes of the sugar industry, which
determines availability of molasses for alcohol production, demand of alcohol
from the potable sector and the Gasohol programme of the Government of India.
These factors have posed a question mark on the availability of DNS to the
industrial sector on a sustained basis at affordable prices. Also, the
international price of DNS has increased to high levels making imports
prohibitive. To find a long-term solution to this problem and ensure
availability of EDC at an appropriate cost, the company, as informed, is
setting up an 84,000 TPA EDC production facility at Karaikal to produce EDC
from imported ethylene, using the chlorine available at this location. Towards
this end, Ethylene storage and Marine Terminal facilities are under
construction. The project to be completed by end of 2006 will make available
about 84,000 tonnes of EDC at a low cost for the PVC production at Mettur Dam.
The balance requirement of EDC of around 25,000 TPA will be met from the
Oxychlorination facility operating at Mettur Dam, for which the required DNS
will come from the company's Industrial Alcohol plant.
As regards the Caustic soda facility at Karaikal, a shore based location in the
Union Territory of Pondicherry acquired in August '03, the company has taken
several initiatives. The capacity of Caustic soda was ramped up to 100 TPD last
year and has been further expanded to 150 TPD in March '06. Power is the
predominant raw material in the manufacture of Caustic soda, and the company
has installed an 8.5 MW power plant with natural gas as fuel. The captive power
source through natural gas is being further augmented. Thus, Chlorine is made
available at this location for captive consumption at an attractive low
cost.
Risks and concerns:
a) The Government of India has been continuously reducing the customs duty on
PVC imports and the spread between import duty on PVC and the intermediate
(EDC) has reduced substantially as under:
Year Month Import Duty %
PVC EDC Spread %
2002 March 30 15 152003 March 25 15 102004 January 20 15 52004 September 15 10
52005 March 10 5 52006 March 5 2 3
b) Imported DNS prices have increased to unviable levels. The company is now
forced to depend on domestic DNS at least till commissioning of the EDC
facility at Karaikal.
c) High cost of power mainly due to increase in LSHS cost, which follows the
trend of International crude oil prices is putting pressure on margins.
Review of operations:
PVC production during the year
2005-06 was 60,177 MT. During the beginning of the year, PVC production was
moderated by availability of EDC. However, with the imported parcels of EDC
landing from June '05, PVC production volume was maintained to the capacity. In
line with the international price of Suspension PVC, domestic prices started
falling substantially from October '05. Such a drop in selling price and
increase in feedstock cost affected the margins during the year.
As stated earlier, the PVC Division was benefited by the low cost chlorine from
Karaikal facility and the timely import of DNS and EDC, but for which the
operations of the Division would have been severely affected.
As per web Details
About Group
The Sanmar Group, with its corporate headquarters at Chennai, the capital city of Tamil Nadu state in south India, has set the benchmark for global partnerships—in chlorochemicals, speciality chemicals, and engineering.
These businesses are grouped and managed in industry segmentFINANCE:
The company has established a good
track record with the bankers and financial institutions, thereby enjoying
their confidence fully. The increase in interest cost in recent period is a
matter of concern, however with good standing of the company with the lenders,
the company is confident of securing loans at optimum costs.
With a view to enhance liquidity of company's shares on the stock exchanges and
facilitate easier accessibility to the company's equity shares by small
investors, during the year, the company carried out a stock split by
sub-dividing each equity share of Rs.10 of the company into 10 equity shares of
Re.] each.
as follows:
In addition to significant or majority holdings in all these businesses, the group has also made major investments in life insurance and cement manufacture.
Professionally managed
In the course of its well planned professionalisation initiatives over the years, the group has successfully separated ownership and management by establishing a broad-based, empowered Group Corporate Board comprising eminent persons from varied backgrounds. The GCB oversees all Sanmar businesses, but is involved only on a strategic level, with the management of the businesses fully delegated to professional managing directors and run by over 600 highly qualified managers.
Group Strengths
The Sanmar Group has over three decades of experience in running and managing a large industrial organisation with multiple businesses. It is renowned for its exceptional management skills covering diverse and complex businesses, strong and conservative financial practices, and its ability to source, assimilate and apply complex technologies in different fields.
Some of the group’s major strengths are: Its leading edge HR practices and reputation as a preferred employer; its high level of IT integration, with SAP ERP in place in all the businesses; and its successful relations with the government, based on professional merit and integrity.
A history of consistent profit making
The group entered into its first international joint venture back in the 1960s when it started Chemicals and Plastics India Limited to manufacture PVC resins in joint venture with B F Goodrich of the USA.
Today, it has a turnover of around Rs.10 billion and a presence in some 25 businesses, with 25 manufacturing units spread over 10 locations in India.
Characterised by strong and conservative financial
practices, it has a track record of steady growth and consistent profitmaking
over the last three decades, enjoying an excellent reputation in the financial
markets. The group is known for its high ethical standards and healthy respect
for intellectual property rights.
At Chemplast Sanmar Limited, the flagship company of the
Sanmar Group, integration - forward and backward - is the key.
The company has two main businesses – PVC and Chlorochemicals. The basic feedstock for its PVC plant, ethylene and chlorine, come from its industrial alcohol plant at Panruti and its own chloralkali facilities.
The Chlorochemicals Division of Chemplast, itself the result of backward integration by the group, manufactures a wide range of products using a highly integrated manufacturing process. These downstream products are either chlorine derivatives or chlorine users in the production process. The feedstock for the refrigerant gases is supplied by the solvents division.
The salt needed for chlorine manufacture is supplied by Chemplast's own salt fields at Vedaranyam. The process being capital intensive, Chemplast is fully equipped to generate sufficient captive power to meet its entire requirements, thus making it one of the most integrated chemical plants in the country with a closed manufacturing loop.
Between the two main businesses, Chemplast's product range falls into five distinct groups — PVC Resins, Caustic Soda/ Chlorine, Chlorinated Solvents, Refrigerant Gases and Silicon Wafers.
The manufacturing facilities are located at Mettur in Tamil
Nadu and Karaikal in Pondichery.
The Sanmar Group, with its corporate headquarters at Chennai, the capital city of Tamil Nadu state in south India, has set the benchmark for global partnerships in niche technology areas.
The group has significant or majority holdings in all its businesses.
These businesses are grouped and managed in industry
segments as follows:
In addition, the group has also made major investments in cement manufacture.
Professionally managed
Sanmar’s businesses are professionally managed, thanks to the group’s ability to attract, motivate and retain high calibre staff. Ownership and management have been separated through a series of top level initiatives, including the formation of a broadbased, empowered Group Corporate Board, which oversees all businesses, including strategies and policies. The businesses are managed by professional managing directors, with highly qualified managers working under them.
Group Strengths
The Sanmar Group has over three decades of experience in running and managing a large industrial organisation with multiple businesses.
The group’s innate strengths include:
An ability to source, assimilate and apply complex
technologies in different fields.
Leading edge HR practices and a reputation as a
preferred employer
A high level of IT integration with an SAP ERP
platform across businesses
A global outlook highlighted by successful JVs with
world leaders, and a high level of cross border trade
Blazing a trail
The group entered into its first international joint venture back in the 1960s when it started Chemicals and Plastics India Limited to manufacture PVC resins in joint venture with B F Goodrich of the USA.
Today, it has a turnover of over Rs.13 billion and a presence in some 25 businesses, with manufacturing units spread over numerous locations in India.
Characterised by strong and conservative financial
practices, it has a track record of steady growth and consistent profitmaking over
the last three decades, enjoying an excellent reputation in the financial
markets. The group is known for its high ethical standards and healthy respect
for intellectual property rights.
Where integration is the key
At Chemplast Sanmar Limited, the flagship company of the Sanmar Group, integration - forward and backward - is the key.
The company has two main businesses – PVC and
Chlorochemicals. The synthesis that underlies the polymer chemistry of PVC
manufacture is also reflective of the company’s approach to business. The basic
feedstock for its PVC plant, ethylene and chlorine, come from its industrial
alcohol plant at Panruti and its own chloralkali facilities at Mettur and
Karaikal.
The Chlorochemicals Division of Chemplast, itself the result of backward integration by the group, manufactures a wide range of products using a highly integrated manufacturing process. These downstream products are either chlorine derivatives or chlorine users in the production process.
The salt needed for chlorine manufacture is supplied by Chemplast’s own salt fields at Vedaranyam.
The electrolysis process of manufacturing chlorine, is power-intensive, but Chemplast is fully equipped to generate sufficient captive power to meet its entire requirements.
All this makes Chemplast one of the most integrated chemical plants in the country with a closed manufacturing loop.
Between the two main businesses, Chemplast's product range falls into five distinct groups — PVC Resins, Caustic Soda/ Chlorine, Chlorinated Solvents, Refrigerant Gases and Silicon Wafers.
The manufacturing facilities are located at Mettur and Panruti in Tamil Nadu and Karaikal in Pondichery.
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.43.70 |
|
UK Pound |
1 |
Rs.85.90 |
|
Euro |
1 |
Rs.58.25 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
2 |
|
OPERATING SCALE |
1~10 |
2 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
2 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
2 |
|
--LEVERAGE |
1~10 |
2 |
|
--RESERVES |
1~10 |
2 |
|
--CREDIT LINES |
1~10 |
2 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
22 |
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 |
|