MIRA
INFORM REPORT
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Report Date : |
13.10.2007 |
IDENTIFICATION DETAILS
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Name : |
SUPREME PETROCHEM LIMITED |
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Registered Office : |
612, Raheja Chambers, Nariman Point, Mumbai - 400 021, |
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Country : |
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Financials (as on) : |
30.06.2007 |
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Date of Incorporation : |
14.12.1989 |
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Com. Reg. No.: |
11-54633 |
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CIN No.: [Company
Identification No.] |
L23200MH1989PLC054633 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMS01358A |
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Legal Form : |
Public Limited Liability Company. The company's shares are listed on the
Stock Exchanges. |
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Line of Business : |
Manufacturers, Importers and Exporters of Polystyrene. |
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 6852532 |
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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 has improved its performance in 2004-05 and 2005-06.
Subject has been promoted by well-known industrialists. Their trade relations
are fair. After initial problems, the company is doing well. Its payments are
usually correct and as per commitments. The company can be considered good
for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
612, Raheja Chambers, Nariman Point, Mumbai - 400 021, |
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Tel. No.: |
91-22-22883518-20 |
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Fax No.: |
91-22-22883521 |
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E-Mail : |
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Website : |
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Corporate Office : |
Solitaire Corporate Park, Building no. 11, 5th Floor, Andheri – Ghatkopar Link Road, Andheri (East), Mumbai – 400 093, Maharashtra |
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Administrative Office : |
17/18, Shah Industrial Estate, Mumbai - 400 053, |
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Tel. No.: |
91-22-26736196-99 |
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Fax No.: |
91-22-56935930 |
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Factory : |
Village Amdoshi/ Wangani, |
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Tel. No.: |
91-21942-2540-2548 |
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Fax No.: |
91-21942-2337/ 2537/ 2617 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. M. P. Taparia |
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Designation : |
Chairman |
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Age : |
66 Years |
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Qualification : |
B.A. |
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Date of Appointment : |
14.12.1989 |
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Other Directorships : |
·
Siltap
Chemicals Limited ·
The
Supreme Industries Limited ·
Dherand
Chemical Terminal Limited ·
Kabra
Extrusiontechnik Limited ·
Multilayer
Films Limited ·
Jagatguru
Investment & Trading Company Private Limited ·
Polystyrene
Producers Association ( ·
Siltap
Chemicals Limited, Member Shareholders Grievance Committee Supreme Capital Management Limtied |
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Name : |
Mr. S. J. Taparia |
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Designation : |
Director |
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Age: |
58 Years |
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Date of Appointment: |
22.11.1993 |
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Qualification : |
B.E. (Mechanical) |
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Other Directorships : |
·
The
Supreme Industries Limited ·
Supreme
Capital Management Limited Oriental Containers Limited |
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Name : |
Mr. Rajan B.
Raheja |
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Designation : |
Director |
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Age : |
49 years |
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Qualification : |
B. Com. |
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Date of Appointment : |
14.12.1989 |
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Other Directorships : |
·
Asianet
Satellite Communication Limited ·
Dherand
Chemical Terminal Limited ·
EIH
Associated Hotels Limited ·
EIH
Limited ·
H &
R Johnson ( ·
Futura
Polyesters Limited ·
Indus
Hotels Corporation Limited Juju Beach Resorts Limited Prism Cement Limited Sonata Software Limited |
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Profile : |
He is the promoter
of the R. Raheja Group. He started himself on a business career over 30 years
ago and is instrumental in constructing residential and commercial complexes
in Mumbai and also in outskirts. His business
range includes batteries, cable television, ceramic tiles, cement and petro
chemicals. |
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Name : |
Mr. A. H. Parpia |
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Designation : |
Director |
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Age : |
73 years |
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Qualification : |
LL.B. |
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Date of Appointment : |
14.12.1989 |
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Other Directorships : |
·
Exide
Industries Limited ·
Prism
Cement Limited ·
H
& R Johnson ( ·
Chika
Limited ·
Bayside
Exports Private Limited ·
Brindaban
Agro Industries Private Limited ·
R B R
Construction Private Limited |
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Name : |
Mr. Hasmukh Shah |
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Designation : |
Director |
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Age : |
67 years |
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Qualification : |
B. A. |
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Date of Appointment : |
18.10.1994 |
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Other Directorships : |
·
Gujarat
Gas Company Limited ·
Shaily
Engineering Plastics Limited ·
Oswal
Multimedia K I D Limited ·
Atul
Limited ·
Hindustan
Oil Exploration Company Limited ·
Hindustan
Inks & Resins Limited ·
Amal
Finance Private Limited ·
Feedback
First Urban Infrastructure Fund Limited · Sun Pharmaceutical Industries Limited |
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Name : |
Mr. B. L. Taparia |
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Designation : |
Director |
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Age : |
69 years |
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Qualification : |
B. Com. |
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Date of Appointment : |
22.11.1993 |
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Other Directorships : |
·
The
Supreme Industries Limited ·
Sitlap
Chemicals Limited ·
Supreme
Capital Management Limited |
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Profile : |
He started his
business career over 45 years ago, long experience in business management.
Also as associated with philanthropic activities. |
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Name : |
Mr. Satish B.
Raheja |
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Designation : |
Director |
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Age : |
39 years |
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Qualification : |
B. Sc., Business
Management. |
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Date of Appointment : |
22.11.1993 |
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Other Directorships : |
·
Exide
Industries Limited ·
Kamal
Ceramics Tiles Limited ·
Prism
Cement Limited |
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Profile : |
He is the brother
of Mr. Rajan B. Raheja and is a director of various companies like Exide
Industries Limited and Prism Cement Limited. He is a Non-Resident Indian. |
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Name : |
Mr. N. Chandar |
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Designation : |
Director (Nominee
– IDBI) |
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Name : |
Mr. S. C. Bhatia |
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Designation : |
Director (Nominee
– ICICI Bank Limited) |
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Name : |
Mr. M. S.
Ramachandran |
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Designation : |
Director |
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Name : |
Mr. Manoj Chhabra |
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Designation : |
Alternate
Director to Satish Raheja |
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Name : |
Mr. R. Kannan |
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Designation : |
ICICI Bank Ltd.
Nominee |
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Name : |
Mr. Nihalchand
Chauhan |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Rakesh Nayyar |
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Designation : |
Executive Director (Finance & Corporate Affairs) and Company Secretary |
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Name : |
Mr. Ravi V Kuddady |
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Designation : |
Secretary |
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Address : |
Solitaire Corporate Park, Building no. 11, 5th
Floor, Andheri – Ghatkopar Link Road, Andheri (East), Mumbai – 400 093,
Maharashtra |
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Tel No: |
91-22-67091900 / 66935927 |
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Fax No: |
91-22-40055681 |
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E mail: |
investorhelpline@spl.co.in |
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Name : |
Mr. Pratap P Jadhav |
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Designation : |
Secretary |
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Name : |
Ms. Jean Ruke |
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Designation : |
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
57876800 |
59.35 |
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Mutual Fund and UTI |
58300 |
0.06 |
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Banks, financial Institutions, Insurance companies (Central / State
Government, Institutional / Non Government Institutions) |
29900 |
0.03 |
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FIIS |
333429 |
0.34 |
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Private Corporate Bodies |
6501288 |
6.67 |
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30018924 |
30.78 |
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NRIs |
2580320 |
2.65 |
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Others |
113839 |
0.12 |
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Total |
97512800 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers, Importers and Exporters of Polystyrene. |
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Products : |
Ř GPPS – General Purpose Polystyrene Ř HIPS – High Impact Polystyrene Ř Speciality Polystyrene Ř Compound – Toughened Polystyrene Ř Polystyrene
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Brand Names : |
"SUPREME" |
PRODUCTION STATUS
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Particulars |
Unit |
Registered
Capacity |
Installed Capacity |
Actual Production |
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Styrene |
MT |
1,00,000 |
-- |
-- |
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Polystyrene |
MT |
554000 |
272000 |
179777 |
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Speciality polystyrene |
MT |
47000 |
17000 |
5813 |
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Expandable polystyrene |
MT |
120000 |
-- |
-- |
As certified by the management and not verified by the auditors.
Actual production excludes items produced on conversion basis for the
Company by third parties. Polystyrene Nil MT (Previous year 1,728 MT) and
Expandable Polystyrene 1,322 MT (Previous Year 1,004 MT).
GENERAL INFORMATION
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No. of Employees : |
700 |
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Bankers : |
v
State Bank of v
Bank of v
Central Bank of v ICICI Bank Limited v IDBI Bank Limited v ING Vysya Bank Limited v The Karur Vysya Bank Limited v
State Bank of v Indusind Bank Limited v Axis Bank Limited v Abn-Amro Bank N V |
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Facilities : |
Notes : 1. Working
capital facilities(including letters of credit) from banks are secured by hypothecation
of Company's stocks and book debts and by a second paripassu charge by way of
an. equitable mortgage on the Company's immovable properties (including plant
and machinery) situated at the plant site. 2. Rupee and
Foreign Currency Term Loans from Financial Institution and Banks are secured
by a first charge by way of an equitable mortgage on the Company's immovable
properties (including Plant and Machinery) Situated at the plant site and by
hypothecation of movable assets (except book debts) subject to prior charge
in favour of Company's Bankers for working capital facilities (except for
Rupee Term Loan of Rs. 2,00.000 millions from ING Vysya Bank Limited which is
secured by residual charge on the Company's movable assets and ECB borrowing
of US$ 5 mio equivalent to Rs. 2,15.000 millions from ICICI Bank (U.K.)
Limited. which is secured by first charge on the Company's movable and
immovable assets). Creation of equitable mortgage for Securing Foreign
Currency Term Loan Equivalent to Rs. 100.000 millions availed from Bharat
Overseas Bank is pending.
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Parikh & Shah Chartered Accountants Internal auditors
G. M. Kapadia & Company Chartered Accountants |
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Associates/Subsidiaries : |
Ř The Supreme Industries Limited - Engaged in manufacturing of moulded products, extruded products and PVC products. Ř R. Raheja Investments Private Limited Ř Siltap Chemicals Limited - Set up in the year 1982 - Engaged in manufacturing of cross
laminated film at Halol, Ř Supreme Vinyl Films Limited -
Subject was promoted in technical
collaboration with Klockner PentaPlast, in Malanpur in Madhya Pradesh Ř Supreme Oriented Films Limited - Engaged in manufacturing of bi-axially oriented polypropylene - (BOPP) films at Pithampur near of 2400 TPA. Ř Prism Cement Limited - Engaged in manufacturing of portland cement. Ř
H & R Johnson ( - Engaged in manufacturing of ceramic tiles Ř Aisanet Satellite Communication Limited - An integrated cable channel network company Ř Hathway Cable Company Ř Datacom Cable Company Ř Globus Stores Private Limited Ř Exide Industries Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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125000000 |
Equity shares |
Rs. 10/- each |
Rs.1250.000 millions |
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25000000 |
Redeemable cumulative preference shares |
Rs.10/- each |
Rs.250.000 millions |
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Total |
Rs.1500.000
millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
97512800 |
Equity shares |
Rs. 10/-
each |
Rs. 975.128
millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
975.128 |
975.128 |
975.128 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
738.005 |
519.603 |
465.461 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1713.133 |
1494.731 |
1440.589 |
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LOAN FUNDS |
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1] Secured Loans |
1377.270 |
1731.449 |
1603.328 |
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2] Unsecured Loans |
49.897 |
61.692 |
60.154 |
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TOTAL BORROWING |
1427.167 |
1793.141 |
1663.482 |
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DEFERRED TAX LIABILITIES |
475.463 |
493.635 |
387.320 |
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TOTAL |
3615.763 |
3781.507 |
3491.391 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2380.053 |
2486.704 |
2498.050 |
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Capital work-in-progress |
184.957 |
204.021 |
199.008 |
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INVESTMENT |
30.082 |
34.005 |
15.920 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
870.842 |
938.679 |
1295.435 |
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Sundry Debtors |
1122.318 |
1040.996 |
766.335 |
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Cash & Bank Balances |
187.054 |
197.325 |
71.355 |
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Other Current Assets |
0.000 |
0.000 |
0.000 |
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Loans & Advances |
523.186 |
659.922 |
580.850 |
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Total
Current Assets |
2703.400
|
2836.922 |
2713.975 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1360.649
|
1624.252 |
1901.989 |
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Provisions |
331.723
|
169.822 |
51.787 |
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Total
Current Liabilities |
1692.372
|
1794.074 |
1953.776 |
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Net Current Assets |
1011.028
|
1042.848 |
760.199 |
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MISCELLANEOUS EXPENSES |
9.643 |
13.929 |
18.214 |
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TOTAL |
3615.763 |
3781.507 |
3491.391 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
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Sales Turnover |
14948.471 |
14237.996 |
13504.343 |
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Other Income |
85.938 |
63.245 |
0.000 |
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Total Income |
15034.409 |
14301.241 |
13504.343 |
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Profit/(Loss) Before Tax |
474.673 |
275.228 |
612.131 |
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Provision for Taxation |
151.828 |
110.564 |
246.024 |
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Profit/(Loss) After Tax |
322.845 |
164.664 |
366.107 |
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FOB Value of Exports: |
6678.486 |
6632.355 |
5628.865 |
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CIF Value of Import Value |
12458.802 |
11409.174 |
11037.078 |
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Expenditures : |
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Manufacturing and other expenses |
14182.117 |
13657.749 |
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Interest |
207.331 |
201.311 |
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Depreciation |
166.002 |
162.667 |
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Amortization of miscellaneous Expenditure |
4.286 |
4.286 |
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Total Expenditure |
14559.736 |
14026.013 |
12848.583 |
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QUARTERLY /
SUMMARISED RESULTS
|
Year |
|
30.06.2007 |
|
Type |
|
1st quarter |
|
Sales Turnover |
|
3762.700
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Other Income |
|
41.400
|
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Total Income |
|
3804.100
|
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Total Expenditure |
|
3545.200
|
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Operating Profit |
|
258.900
|
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Interest |
|
55.600
|
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Gross Profit |
|
203.300
|
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Depreciation |
|
42.800
|
|
Tax |
|
57.900
|
|
Reported PAT |
|
120.800
|
KEY RATIOS
|
PARTICULARS |
|
30.06.2007 |
30.06.2006 |
30.06.2005 |
|
PAT / Total Income |
(%) |
2.14
|
1.15 |
2.71 |
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Net Profit Margin (PBT/Sales) |
(%) |
3.17
|
1.93 |
4.53 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
9.00
|
4.97 |
11.31 |
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Return on Investment (ROI) (PBT/Networth) |
|
0.27
|
0.18 |
0.42 |
|
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|
|
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|
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Debt Equity Ratio (Total Liability/Networth) |
|
1.82
|
2.39 |
2.51 |
|
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|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.59
|
1.58 |
1.38 |
LOCAL AGENCY FURTHER INFORMATION
ANNUAL
REPORTS:
REVIEW OF OPERATIONS
The Polystyrene market
grew marginally in the domestic market segment during the year under review.
However, the high price regime on account of high Styrene Monomer prices kept
the margins under pressure. On the export front the Company concentrated only
on those markets which gave a better netback. This resulted in lower exports
during the year compared to the previous year. The Company received an in
principle approval from Ministry of Commerce to establish sector specific
Special Economic Zone for processing of plastic products. The Company is in the
process of acquisition of approx. 500 acres of land for its SEZ project in
District Raigad,
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT
Management Discussion
and Analysis Report for the year under review as stipulated under clause 49 of
the Listing Agreement with Stock Exchanges is presented separately forming part
of the Annual Report.
ISO CERTIFICATION
The Company
continues to be certified with ISO 9001:2000, Environmental Management System
ISO 14001:1996 and 'with QHSAS 18001 Specification by BVQI. The Company is also
a signatory to Responsible Care and is taking active steps in implementation
and maintenance of all the applicable codes under Responsible Care.
The Company has
achieved following recognitions and awards during the year under review:
National Safety Award (Winner under longest Accident Free Period), from
Ministry of Labour and Employment, Government of India Maharashtra Safety Council
Award - First prize for lowest, Accident Frequency Rate from National Safety
Council, Maharashtra Chapter.
HEALTH and SAFETY
The Company has
continued the implementation of HSE
Management Systems under the guiding principles of declared 'Health and
Safety Policy' and 'Environmental Policy'. Both the Environmental Management
System and Occupational Health and Safety Management Systems are continued to
be maintained as per ISO 14001 standard and OHSAS 18001 Specification
respectively. HSE performance index for the year under review stood to be in
excellent range.
The Company has
completed 2449 accident free days and 6022367 accident free man-hours as on
June. 30, 2007.
SUBSIDIARY COMPANY
- SPL POLYMERS LIMITED
(i) Name of the
subsidiary Company has changed to SPL Polymers Limited (formerly known as Shin
Ho Petrochemical (
(iii) The Ministry
of Corporate Affairs, Government of India by letter dated August 03, 2007 has
exempted the Company from attaching a copy of the Balance Sheet and the Profit
and Loss Account of the subsidiary company and other documents required to be
attached -under Section 212(1) of the Companies Act, 1956 to the Annual Report
of the Company. Accordingly, the said documents are not being attached with the
Balance Sheet of the Company. A gist of the financial performance of the
subsidiary company is contained in the report. The Annual Accounts of the
subsidiary are open for inspection by any member/investor and the Company will
make available these documents/details upon request by any Member of the
Company or to any investor of its subsidiary who may be interested in obtaining
the same. Further, the annual accounts of the subsidiary company will also be
kept for inspection by any investor at the Corporate Office of the Company and
that of the subsidiary Company.
(iv) Consolidated
Group Accounts comprising of consolidated balance sheet of Supreme Petrochem
Limited and its subsidiary as at June 30, 2007, theconsolidated profit and loss
account and the consolidated cash flow statement of the group for the year
ended on that date are annexed in accordance with Accounting Standard 23.
(v) SPL Polymers
Limited has reported a loss of Rs.12.979 millions for the year ended June 30,
2007.
MERGER OF SPL
POLYMERS LIMITED WITH SUPREME
PETROCHEM LIMITED
The Directors at
the Meeting held on August 09,2007 have approved in principle and subject to
requisite approvals, the proposal to merge the subsidiary Company viz.
SPLPolymers Limited with the Company. M/s. G. M. Kapadia and Company, Chartered
Accountants have been appointed as valuers to value the shares to arrive at the
share exchangeratio. SPL Polymers Limited is engaged in the business of
manufacturing Expandable Polystyrene (EPS). The business of SPL Polymers
Limited and the Company are complementary to each other and there exist
operational synergies in integration of the business The domestic as well as
international market for EPS is growing well. The Company is therefore
proposing to set up EPS production facilities at its plant near Nagothane. In
view of SPL's increased focus on EPS and also consideringSPL Polymers Limited's
need for more management and financial resources it is considered that the
merger will be beneficial to both. This will help in faster revival of the
subsidiary. The proposed merger will therefore help in integrating, purchase,
marketing, finance and personnel functions leading to efficiencies in running
the business.
MANAGEMENT
DISCUSSION AND ANALYSIS
INDUSTRY OVERVIEW
Supreme Petrochem
Limited (SPL) is the largest Polystyrene manufacturer in
Polystyrene prices
remained high during the year as a consequence of high raw material prices
fuelled by the tight SM/Benzene supply position which is likely to continue
upto mid 2008. As a result the domestic Polystyrene market remained stagnant during
the year under review. However with the rising GDP and price of competing raw
materials the domestic Polystyrene market is estimated to grow @ 8-10% during
the year 2007-2008. The sectors driving this growth would be CTV, consumer
durables, stationery items, retail, food packaging and insulation of new
buildings. Moreover, there is good potential for exports of products made out
of various polymers including polystyrene from
NEW PROJECTS
Special Economic
Zone - SEZ
The Company having
received in principle approvals from both, the State Government and Ministry of
Commerce for setting up sector specific special economic zone for plastic
processing sector in District Raigad,
The Company had
acquired most of the required land needed for the project and actual
construction of the jetty was to begin by the end .of last year. However the
Government of Maharashtra notified this land for some other projects therefore
the work could not proceed. The GOM after hearing the Company has now agreed to
denotify the land needed for the minor port and the process of denotification
is in progress. The work will be taken up as soon as the land including land
for approach road is denotified.
Expandable
Polystyrene (EPS) The proposed expansion in the EPS capacity to 20,000 tons of SPL
Polymers Limited. the Company's subsidiary is being taken up on a
priority basis. The setting up of the EPS plant at the Company's
existing site at Amdoshi near Nagothane is also continuing. The EPS
plant at their existing site at Amdoshi is now likely to be commissioned
by last quarter 2008.
Speciality
Polystyrene (SPS)
One of the
Specialty Polystyrene lines has been revamped to produce value added products
like Master Batches for PE and PP film and injection moulding segments, as well
as reinforced Polypropylene for Automotive industry. Initial response from
customers for these products has been excellent from quality point of view.
Based on this success, plans have been drawn for further enhancing capacity by
installing a new line for manufacturing of wide variety of Master Batches as
well as PP compounds. Initiatives have also been taken to get their facilities
approved under TS 16949, a Quality Management System which is mandatory for
participating in Automotive segment.
Expanded
Polystyrene (XPS)
Expanded
Polystyrene (XPS) board is emerging as an important insulation medium for
residential as well as commercial buildings all over the world, due to renewed
efforts for environmental protection by reducing emission of greenhouse gases.
The Company proposes to set up a plant with a capacity of 5000 TPA for
producing XPS board at its existing plant site at Amdoshi,
FINANCE
Interest rates
hardened during the ,year under review. The Company however managed to maintain
the interest outgo during the financial year 2006-2007 by not resorting to
expensive working capital borrowing from banks and also by meeting the needs
from funds generated out of operations. SPL continues to be rated by Fitch
Credit Rating Agency for issue of commercial paper with rating of F1
(indicating strongest credit quality and capacity for timely payment of
financial commitments). Dun and Bradstreet has given the company a composite
credit approval rating of 2 (two) indicating a good stancmg.
OUTLOOK
Polystyrene
consumption is linked to growth of GDP and with GDP growth likely to exceed 10%
in the coming years the demand for Polystyrene may also see a robust growth.
The do'mestic growth is expected from sectors like consumer
durables,
stationery and writing instruments, CTV, food packaging and insulation whereas
growth would be less in sectors like
wall clock and food service ware which though on the growth path use re-cycled
material to some extent. This does not result in proportionate increase in
Polystyrene consumption. Internationally Polystyrene supply is expected to be
tight in the year 2007-2008 due to rationalization in Polystyrene capacities in
North America, Europe and
SUBSIDIARY COMPANY
- SPL POLYMERS LIMITED (SPPL)
The efforts to turn
around the subsidiary SPPL suffered a temporary setback when a fire broke out
on June 10, 2007 in the drying and bagging section of the Plant. The fire
caused major damage to the building and all the machinery in the said section.
There were no casualties or injuries to any person. The plant was adequately
insured. The manufacturing activities at
the plant have
therefore been disrupted and production is expected to commence only in January
2008. In view of the expected increase in EPS demand worldwide it is proposed
to enhance the capacity of this plant while 'restoring the production facility.
SPL's increasedon EPS and also considering SPPL's need for more management and
financial
resources after
its expansion has prompted the Board of Directors to approve in principle the
merger of SPPL with the Company w.e.f. July 1, 2007. The business of SPL and
SPPL are complimentary to each other and there exist operational synergies in
integration of both businesses. Valuers have been appointed to determine the share
exchange ratio.
OPPORTUNITIES
With the
rationalization of PS capacities in North America, Europe and
THREATS
With no barriers
to import including very low tariff barriers there is always a threat of
possible imports of Polystyrene into the country. With increased number of FTAs
and PTAs import of articles of Polystyrene may also increase particularly when
many
of the Polystyrene
articles are still reserved for the small scale and not able to compete with
cheap imports. It is hoped that the de-reservation will be taken up by
Government of India at the earliest which will bring in technology development
in this sector and thus increase polymer consumption.
AWARDS AND
RECOGNITION
The Company
continues to be certified with ISO 9001:2000, Environmental Management System
ISO 14001:1996 and with OHSAS 18001 Specification by BVQI. The Company is also
a signatory to Responsible Care and is taking active steps in
implementation and
maintenance of all the applicable codes under Responsible Care. The Company has
achieved recognitions and awards from prestigious organisations during the year
under review like the National Safety Award from Ministry of Labour and
Employment, Government of India and Maharashtra Safety Council Award from
National Safety Council, Maharashtra Chapter for longest Accident Free Period;
Maharashtra Safety Council Award for lowest Accident Frequency Rate from
National Safety Council, Maharashtra Chapter; Suraksha Puraskar, from National
Safety Council of India; First and Second Prize in State Level Fire Drill
Competition from Director, Maharashtra Fire and Emergency Services and Fire
Advisor, Mumbai; Second Prize at State Level Award for Excellence in Energy
Conservation and Management from Maharashtra Energy Development Agency and
Greentech Environment Excellence Silver Award from
Greentech
Foundation,
RISKS AND CONCERN
Polystyrene being
an internationally traded commodity, SPL's operations and performance is
vulnerable to global market forces. Other factors that influence price
volatility and fluctuations in raw material as well as in polystyrene also
impact SPL's operations. Raw material procurement contracts with inbuilt
flexibility, efficient inventory management, focus on sale of specialitygrades
and selling price linked to global polystyrene price are strategies drawn up by
SPL to minimise this risk. Foreign exchange risks are minimised by SPL's export
revenues and due to selling price parity of domestic product is in line with
the. landed cost of imported products. The surplus cash generated during the
course of business is invested in financial instruments from time to time. The
detailed guidelines for investment of such surplus have been laid down and
which are adhered to by the Management and also reviewed regularly by the
Board.
FIXED ASSETS:
·
Land
·
Buildings
·
Plant
and Machinery
·
Office
equipments
·
Computers
·
Air
conditioners
·
Vehicles
·
Furniture
and fixtures
CONTINGENT
LIABILITIES:
|
Contingent liabilities not provided for in respect of: |
2006-2007 (Rs. in millions) |
2005-2006 (Rs. in millions) |
|
i) Estimated value of contracts remaining to be executed on capital
accounts and not provided for |
52.818 |
86.740 |
|
ii) Letters
of Credit opened by Bankers and outstanding at the year end. |
830.561 |
438.610 |
|
iii) Bills
discounted but not matured. |
1298.501 |
1369.349 |
|
iv) Counter guarantees given to Banks against Banks' Guarantees
to Customs/ Sales Tax. |
19.361 |
17.053 |
|
v) Excise / Service Tax matters under dispute |
71.603 |
30.442 |
|
vi) Sales
Tax matter under dispute, |
17.759 |
17.759 |
|
vii) Other Claims. |
7.131 |
7.131 |
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.39.31 |
|
|
1 |
Rs.80.19 |
|
Euro |
1 |
Rs.55.86 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
66 |
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 |
|