MIRA INFORM REPORT
|
Report Date : |
21.09.2007 |
IDENTIFICATION DETAILS
|
Name : |
SRF LIMITED |
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Registered
Office : |
C – 8, Commercial Complex, Safdarjung Development Area, |
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Country : |
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Financials (as
on) : |
31.03.2007 |
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Date of
Incorporation : |
09.01.1970 |
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Com. Reg. No.: |
55-5197 |
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CIN No.: |
L18101DL1970PLC005197 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELS33266C |
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PAN No.: [Permanent
Account No.] |
AAACS0206P |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges |
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Line of Business
: |
Manufacturers and Marketers of synthetic filament yarn including industrial
yarn/tyre cord, nylon tyre cord
fabric/industrial yarn fabric,
fishnet twine, engineering plastic, nylon moulding powder, leather
auxiliaries, (organic chemicals) (dry weight), fluorocarbon refrigerant
gases, hydrochloric acid (anhydrous), gypsum (by product), hydrochloric acid
(by product), halon, chloromethanes and spectacle lenses of other materials
(plastics) castings. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit
Limit : |
USD 35000000 |
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Status : |
Satisfactory |
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Payment
Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having satisfactory
track. Directors are well-known industrialists having good means of their
own. Their trade relations are reported as fair. Financial position of the
company is satisfactory. Business is active. The company's payments are
reported as slow but correct. The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered
Office : |
C – 8, Commercial Complex, Safdarjung Development Area, |
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E-Mail : |
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Website : |
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Corporate Office : |
Block – C, Sector – 45, Gurgaon -122 003, |
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Tel. No.: |
91-124 - 4354400 |
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Fax No.: |
91-124 - 4354500 |
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IT Business: |
"Amar Sindur", 4th Floor, No. 43, |
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Divisonal Offices: |
International Division
C-8, Commercial Complex, Safdarjung Development Area, Industrial Synthetics
Division
Manali Industrial Area, Chennai – 600 068, Tamilnadu Industrial Fabrics Division:
Viralimalai, Podukottai District – 621 316, Tamilnadu - 621 316 polyester film business
C-8, Commercial Complex, Safdarjung Development Area, PHARAMA
CHEMICALS BUSINESS 3rd Floor, Sanskrit Bhawan, A – 10, Aruna Asaf Ali Marg,
Qutub Institutional Area, |
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Factory: |
TECHNICAL TEXTILES Business
Industrial
Fabrics Business
Chemicals Business / PHARMA CHEMICALS
BUSINESS
polyester film business
FLUORO
CHEMICALS BUSINESS/ CHEMICAL BUSINESS
PACKAGING FILMS BUSINESS; §
SEZ §
Plot No. 12, Rampura, §
Plot No. C – 1-8, C 21 – 30, |
DIRECTORS
|
Name : |
Mr. Dr. Bharat Ram |
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Designation : |
Chairman Emeritus |
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Name : |
Mr. Arun Bharat Ram |
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Designation : |
Chairman |
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Name : |
Mr. Ashish Bharat Ram |
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Designation : |
Managing Director |
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Name : |
Mr. Kartikeya Bharat Ram |
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Designation : |
Deputy Managing Director |
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Name : |
Mr. S. P. Agarwala |
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Designation : |
Director |
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Name : |
Mr. K. Ravichandra |
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Designation : |
Director (Safety & Environment) |
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Name : |
Mr. V. R. Mehta |
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Designation : |
Director |
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Name : |
Mr. M. V. Subbiah |
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Designation : |
Director |
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Name : |
Mr. Satish K. Kaura |
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Designation : |
Director |
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Name : |
Mr. Vinayak Chatterjee |
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Designation : |
Director |
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Name : |
Mr. Subodh Bharagava |
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Designation : |
Director |
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Name : |
Dr. Omkar Goswami |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Anoop K. Joshi |
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Designation : |
Company Secretary |
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Name : |
Mr. N. Ramanathan |
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Designation : |
President (TQM) |
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Date of
Birth/Age : |
55 years |
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Qualification : |
B.E. (MECH),
PGDBM |
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Experience : |
32 years |
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Date of
Appointment : |
01.04.1989 |
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Name : |
Mr. W. M. De'Souza |
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Designation : |
President & Chief Executive Officer
(Industrial Synthetics Business) |
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Name : |
Mr. S. Y. G. Narayanan |
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Designation : |
Senior Vice President (Legal, Shares &
Secretarial) |
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Name : |
Mr. Sushil Ramola |
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Designation : |
Senior Vice President & Chief
Executive Officer (Information Technology Business) |
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Name : |
Mr. Rajdeep Anand |
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Designation : |
Senior Vice President & Chief
Executive Officer (Chemicals Business) |
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Name : |
Mr. T. Sanyal |
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Designation : |
Senior Vice President & Chief
Executive Officer (Industrial Fabrics Business) |
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Name : |
Mr. Roop Salotra |
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Designation : |
Vice President & COO (Chemicals
Business) |
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Name : |
Mr. Sushil Kapoor |
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Designation : |
Senior General Manager & COO
(Industrial Synthetics Business) |
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Name : |
Mr. Suresh Dutt Tripathi |
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Designation : |
Senior General Manager (Human Resources) |
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Name : |
Mr. |
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Designation : |
Chief Executive Officer & Group Head |
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Date of
Birth/Age : |
54 years |
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Qualification : |
B.Sc. (Eng)., PGDMS |
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Experience : |
34 years |
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Date of Appointment
: |
01.01.1977 |
MAJOR SHAREHOLDERS
As on 30.06.2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Indian |
|
|
|
Individuals/ Hindu Undivided Family |
118175 |
0.17 |
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Central Government/ State Government(s) |
0.000 |
0.000 |
|
Bodies Corporate |
28678463 |
42.25 |
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Financial Institutions/ Banks |
0.000 |
0.00 |
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Any other (specify) |
0.000 |
0.00 |
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Sub-Total (A)(1) |
28796638 |
42.42 |
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Foreign |
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Individuals (Non-Resident Individuals/ Foreign Individuals) |
0.000 |
0.00 |
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Bodies Corporate |
0.000 |
0.00 |
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Institutions |
0.000 |
0.00 |
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Any other (specify) |
0.000 |
0.00 |
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Sub-Total (A)(2) |
0.000 |
0.00 |
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Total Shareholding
of Promoter and Promoter Group (A) = (A)(1)+(A)(2) |
28796638 |
42.42 |
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Public
Shareholding |
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Institutions |
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Mutual Funds/ UTI |
4006084 |
5.90 |
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Financial Institutions/ Banks |
140601 |
0.21 |
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Central Government/ State Government(s) |
584024 |
0.86 |
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Venture Capital Funds |
0.000 |
0.00 |
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Insurance Companies |
2787454 |
4.11 |
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Foreign Institutional Investors |
7038799 |
10.37 |
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Foreign Venture Capital Investors |
0.000 |
0.00 |
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Any other (specify) |
0.000 |
0.00 |
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Sub-Total (B)(1) |
14556962 |
21.44 |
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Non-Institutions |
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Bodies Corporate |
7399208 |
10.90 |
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Individuals - i) Individual shareholders holding nominal share capital upto Rs. 1
lakh |
14605368 |
21.51 |
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ii) Individual shareholders holding nominal share capital in excess of
Rs. 1 lakh |
1604791 |
2.36 |
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Any other (specify) Non-Resident Indians |
308700 |
0.45 |
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Any other (specify) Clearing Member |
499689 |
0.74 |
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Any other (specify) Trusts |
113649 |
0.17 |
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Sub-Total (B)(2) |
24531405 |
36.14 |
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Total Public Shareholding (B) =
(B)(1)+(B)(2) |
39088367 |
57.58 |
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Shares held by
Custodians and against which Depository Receipts have been issued |
0.000 |
0.00 |
|
GRAND TOTAL
(A)+(B)+(C ) |
67885005 |
100.00 |
BUSINESS DETAILS
|
Line of Business
: |
Manufacturers and Marketers of synthetic filament yarn including
industrial yarn/tyre cord, nylon
tyre cord fabric/industrial yarn
fabric, fishnet twine, engineering plastic, nylon moulding powder, leather
auxiliaries, (organic chemicals) (dry weight), fluorocarbon refrigerant
gases, hydrochloric acid (anhydrous), gypsum (by product), hydrochloric acid
(by product), halon, chloromethanes and spectacle lenses of other materials
(plastics) castings. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Registered
Capacity |
Installed
Capacity |
Actual
Production |
|
Synthetic Filament Yarn including
Industrial Yarn/ Tyre Cord |
MT |
49400 |
49400 |
6434.54 |
|
Nylon |
MT |
52280 |
52280 |
43183.03 |
|
Fluorocarbon Refrigerant Gases |
MT |
25000 |
25000 |
12432.01 |
|
Hydrofluoric Acid (Anhydrous) |
MT |
11500 |
11500 |
6136.47 |
|
Gypsum (By Product) |
MT |
44550 |
44550 |
23580.66 |
|
Hydrochloric Acid (By Product) |
MT |
77220 |
77220 |
54821.49 |
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Chloromethane |
MT |
32000 |
32000 |
29716.74 |
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Packaging Films |
MT |
25350 |
25350 |
25075.41 |
GENERAL INFORMATION
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No. of Employees
: |
4000 |
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Bankers : |
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Facilities : |
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Banking Relations
: |
Satisfactory |
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Auditors : |
Thakur, Vaidyanath Aiyar and Company Chartered Accountants |
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Address: |
212, Deen Dayal Marg, |
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Tel. No.: |
91-22-23236958-60/23237772 |
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Fax No.: |
91-22-23230831 |
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E-Mail : |
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Associates: |
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Subsidiaries: |
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Membership: |
Confederation of Indian Industry |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
120,000,000 |
Equity Shares |
Rs.10/- each |
Rs.1,200.000
millions |
|
10,00,000 |
Preference Shares |
Rs.100/- each |
Rs.100.000
millions |
|
12,00,000 |
Cumulative Convertible Preference Shares |
Rs.50/- each |
Rs.60.000
millions |
|
2,00,00,000 |
Cumulative Preference Shares |
Rs.100/- each |
Rs.2,000.000
millions |
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TOTAL |
|
Rs. 3.360
Millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7,38,30,327 |
Equity Shares |
Rs.10/- each |
Rs.738.303
millions |
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
6,78,85,005 |
Equity Shares |
Rs.10/- each |
Rs. 678.850
millions |
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Add : |
Amount Paid on Forfeited
Shares |
|
Rs. 10.151
millions |
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Add : |
Share Capital Suspense
|
|
Rs. 0.054
million |
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TOTAL |
|
Rs. 689.055 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
|
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|
|
|
1] Share Capital |
689.055 |
684.154 |
655.466 |
|
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2] Reserves & Surplus |
8048.805 |
5312.145 |
4228.884 |
|
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NETWORTH |
8737.860 |
5996.299 |
4884.350 |
|
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LOAN FUNDS |
|
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|
1] Secured Loans |
4831.122 |
6024.661 |
4033.957 |
|
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2] Unsecured Loans |
2.272 |
13.768 |
233.812 |
|
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TOTAL BORROWING |
4833.394 |
6038.429 |
4267.769 |
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DEFERRED TAX LIABILITIES |
1272.257 |
1080.541 |
1018.036 |
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TOTAL |
14846.511 |
13115.269 |
10170.155 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
10479.369 |
8517.363 |
7139.961 |
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Capital work-in-progress |
1144.984 |
2455.001 |
1147.883 |
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INVESTMENT |
990.653 |
960.737 |
984.987 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
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Inventories |
1840.882
|
1573.018
|
1762.635
|
|
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Sundry Debtors |
2049.336
|
1200.665
|
909.562
|
|
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Cash & Bank Balances |
179.126
|
84.275
|
90.792
|
|
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Loans & Advances |
969.488
|
922.807
|
781.962
|
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Total
Current Assets |
5038.832
|
3780.765
|
3544.951 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
2333.655
|
2181.380
|
2257.314
|
|
|
Provisions |
473.672
|
417.217
|
390.313
|
|
Total
Current Liabilities |
2807.327
|
2598.597
|
2647.627 |
|
|
Net Current Assets |
2231.505
|
1182.168
|
897.324 |
|
|
|
|
|
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TOTAL |
14846.511 |
13115.269 |
10170.155 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Sales Turnover [including other income] |
18159.494 |
13040.115 |
10779.427 |
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|
|
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Profit/(Loss) Before Tax |
4431.113 |
1584.284 |
843.110 |
|
Provision for Taxation |
1621.416 |
|
242.591 |
|
Profit/(Loss) After Tax |
2890.697 |
1047.724 |
600.519 |
|
|
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|
Export Value |
7982.993 |
3288.586 |
1505.792 |
|
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Import Value |
3134.977 |
4181.535 |
4043.334 |
|
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|
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|
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Total Expenditure |
13728.381 |
11455.831 |
9936.317 |
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2007 |
|
Type |
|
|
1st
Quarter |
|
Sales Turnover |
|
|
4046.500 |
|
Other Income |
|
|
107.800 |
|
Total Income |
|
|
4154.300 |
|
Total Expenditure |
|
|
3000.600 |
|
Operating Profit |
|
|
1153.700 |
|
Interest |
|
|
72.600 |
|
Gross Profit |
|
|
1081.100 |
|
Depreciation |
|
|
268.900 |
|
Tax |
|
|
231.800 |
|
Reported PAT |
|
|
560.200 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.81 |
1.07 |
0.82 |
|
Long Term Debt-Equity Ratio |
0.73 |
1.07 |
0.82 |
|
Current Ratio |
1.00 |
0.99 |
0.99 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.31 |
1.15 |
1.13 |
|
Inventory |
11.50 |
8.63 |
8.75 |
|
Debtors |
12.08 |
13.63 |
12.60 |
|
Interest Cover Ratio |
13.17 |
5.03 |
4.29 |
|
Operating Profit Margin (%) |
28.33 |
18.11 |
13.93 |
|
Profit Before Interest And Tax Margin (%) |
24.42 |
13.74 |
9.46 |
|
Cash Profit Margin (%) |
18.63 |
11.65 |
9.63 |
|
Adjusted Net Profit Margin (%) |
14.72 |
7.28 |
5.17 |
|
Return On Capital Employed (%) |
39.33 |
19.85 |
14.96 |
|
Return On Net Worth (%) |
42.81 |
21.80 |
14.91 |
LOCAL AGENCY FURTHER INFORMATION
The company’s Registered Office has been
shifted from A – 16, Aruna Asaf Ali Marg, Qutab Industrial Area,
HISTORY
Incorporated in 1970 with its plant at Manali and in
Tamilnadu, SRF was promoted by DCM. SRF manufactures nylon tyre cord fabric,
fishnet twine, engineering plastics, etc. Its products include methyl chloride,
methylene chloride, chloroform and carbon tetrachloride.
The company is the 8th largest producer of Nylon Tyre Cord Fabric globally and
is the market leader in
The Subsidiaries of SRF are SRF Overseas Ltd, SRF Americas, Inc., SRF
Transnational Holdings Ltd and SRF Properties Limited. During 2004-05 SRF
Technologies Inc., a wholly owned subsidiary established in US was
dissolved.
SRF's nylon tyre cord plant was set up in collaboration with
In April 1994, SRF came out with a rights issue of 15% FCDs to finance certain
projects and to meet long-term working capital requirements, at a project cost
of Rs 1460 millions. SRF received the R&D award for its success in
developing and commercialising a polyamide dispersion based on
micro-crystalline polymer technology. The company took over Shriram Needle
Bearings in 1988 and in 1994, it amalgamated Flowmore Polyesters, a BIFR
company. SRF acquired the nylon cord division of Ceat, of the RPG group, at a
cost of over Rs 3000 millions in 1995. The industrial fabrics division received
the ISO 9002 certificate and the nylon tyre cord division acquired from Ceat,
received the ISO 9000 certificate.
During 1999-2000, the Company acquired 100% shares of M/s Tyre Cord Fabric Ltd
(formerly Du Pont Fibres Limited.
The court has approved scheme of amalgamation, arrangement and reconstruction
between the company, Tyrecord Fabric Limited, SRF Chemicals Limited and their
respective shareholders. The scheme, envisages amalgamation of Tyrecord Fabric
Limited, a wholly owned subsidiary of the company, with SRF Limited and
de-merger of smaller business comprising of Polyester, Films, Fish Net
Twine/yarns and Engineering Plastics (together constituting approx. 15% of
sales) and transfer of these business to SRF Chemical Limited The company has
set up the IT facility centre at Chennai to foray into BPO and IT enabled
services.
The company has chalked out a new project in speciality chemicals whereby it
will set up two plant at an investment of Rs. 200 millions. The plant is
expected to be commissioned by January, 2004. The two plants will be set up in
the existing Chemicals complex of Jhiwana, Rajasthan.
The 20,500 MT polyester film project will also be commissioned by
September,2004. The cost involved for the polyester film project is estimated
to be Rs. 1600 millions. The company has decided to sell/ divest/ restructure
'SRF Infotel' and is in the process of getting the requisite approval.
The Company has increased the installed capacity of Nylon Tyre Cord
Fabric/Industrial Yarn Fabric, Hydrofluoric Acid(Anhydrous) and Gypsum by 944
MT, 800 MT and 7800 MT respectively during 2004-05. With this expansion the
total installed capacity of Nylon Tyre Cord Fabric/Industrial Yarn Fabric,
Hydrofluoric Acid(Anhydrous) and Gypsum has increased to 39730 MT, 8300 MT and
33300 MT respectively. Further the company has installed a new capacity of
Polyester Films with a capacity of 25650 MT.
During 2004-05 the company has started the Packaging Films Business by
acquiring a group companies facilities in Kashipur (Uttaranchal) and the
setting up of a new plant in the Indore Special Economic Zone. Further the
company has entered into manufacturing of specialised pharma chemicals at
Bhiwadi in Rajasthan.
The Company is engaged in adding 13300 TPA of fibre capacity at its Gwalior
Plant and has de-bottlenecked dipping facilities at the Manali Plant to add
6000 TPA of dipping capacity. Further the company has planned to add another
7000 TPA of fabric capacity and to set up a new 14600 TPA Nylon-6 fibre plant
at Manali. The company is also setting up a manufacturing facility for HFC-32
and HFC-134a which is expected to be commissioned by 2005-06 and also a
coal-based power generator at its plant in Bhiwadi which is expected to be
commissioned by 2005-06.
During 2005-2006, the companies production capacity of Synthetic
Filament Yarn including Industrial Yarn/Tyre Cord expanded from 21500 MT to
34800 MT.
milestones :
|
1970 |
Incorporation of Shriram Fibres (promoted by DCM Limited) |
|
1974 |
Commissioning of Nylon Tyre Cord fabric plant at Manali |
|
1977 |
Introduction of fishnet twine at Manali |
|
1979 |
Introduction of Nylon engineering plastics at Manali |
|
1983 |
Commissioning of the industrial fabrics plant at Viralimalai for
production of Chafer and Belting fabrics |
|
|
Expansion of Nylon tyre cord capacity at Manali |
|
1985 |
Management takeover of Shriram Bearings Limited and Shriram Needle
Bearing Industries Limited |
|
1986 |
Commencement of Coated Fabrics project at Viralimalai. |
|
|
Commencement of commercial production at SRF Nippondenso Limited |
|
|
Commencement of operations at SRF Finance Limited |
|
1989 |
Commencement of commercial production of Fluorochemicals at Jhiwana |
|
1990 |
Shriram Fibres become SRF Limited |
|
1993 |
Divestment of SRF Nippondenso Limited. |
|
|
Adoption of Total Quality Management |
|
1994 |
Commencement of operations at SRF International |
|
|
Commencement of Halon plant at Jhiwana |
|
|
Takeover of Flowmore Polyester Limited |
|
1995 |
Takeover of Nylon Tyre Cord plant of Ceat |
|
|
Commencement of Vision Care Project at |
|
|
Incorporation of SRF |
|
|
Dipping facility commissioned at Manali |
|
|
Backward integration into chloormethanes |
|
1996 |
Commencement of tyre cord fabric production at SRF Overseas plant at |
|
1997 |
Divestment of SRF Finance Limited to GE Capital |
|
1998 |
Divestment of Vision Care Division |
|
|
Closure of SRF International Division (Trading Business) |
|
1998 |
DCM divests SRF stake in favour of Mr. Arun Bharat Ram |
|
|
SRF Limited emerges as an independent entity |
|
|
Acquisition of Dupont Fibers Limited, subsequently renamed Tyrecord
Fabric Limited |
|
2000 |
Divestment of Shriram Bearings Limited and Shriram Needle Bearing
Industries Limited |
|
2001 |
Doubling of capacity at Tyrecord Fabric Limited, Gummidipoondi |
|
|
Closure of SRF International (Emeritus) |
|
2002 |
Merger of Tyrecord Fabric Limited with SRF Limited |
|
|
Polyester Films, Fishnet Twine & Engineering Plastic business spun
off as a separate entity, SRF Polymers Limited (Closure of SRF International
( |
|
|
Debottlenecking Chloromethanes to 210% of initial capacity |
|
2003 |
The company emerges as the 5th largest Belting Fabrics
manufacturer in the world. |
The Rs. 9800 millions SRF Group is an Indian market leader in industrial
yarn and fabric as well as refrigerant gases.
Since its inception in 1974, the SRF Group has emerged as an industrial major
in its core business areas, which has about 2500 employees operating out of 14
locations in
In 2001, the company de-merged three small businesses that manufacture
engineering plastics, fishnet twine and polyester films into a separate company
- SRF Polymers Limited.
MANAGEMENT
DISCUSSION AND ANALYSIS
The Indian economy embarked on a high growth path in 2003-04 with a GDP growth of 8.5 per cent. 2006-07 saw a growth of 9.2 per cent, and marked the fourth consecutive year of excellent economic performance - taking the compounded annual growth rate during this four year period to over 8.5 per cent.
There are two very important aspects of this growth. First, there has been a
resurgence of manufacturing across all sectors, accompanied by an
across-the-board buoyancy in investments. As a result of several quarters of
consistent double-digit growth, the share of manufacturing has increased by
over one percentage point to 26.4 per cent of GDP. Second, there has been a
marked reduction in the impact of agricultural cycles on the overall growth of
the economy. As an example, 2006-07 has been an extremely good year for the
economy notwithstanding below-average performance of agriculture.
Recognising
As a result of these investments, SRF was well positioned to benefit from the favourable market situation in 2006-07, and consequently achieved even better results. Even as the Company continues to assess its needs for modernisation and expansion across businesses, SRF's improved capacities coupled with its commitment to Total Quality Management (TQM) have enabled it accomplish a much better performance for the year under review.
The highlights of SRF's financial performance in 2006-07 are:
* Net sales from operations increased by 39.5 per cent - from Rs.12920 millions
in 2005-06 to Rs.18020 millions
in 2006-07.
* Profit before depreciation, interest and tax rose by 114 per cent - from Rs.2590 millions in 2005-06 to Rs.5550
millions in 2006- 07.
* Profit before depreciation and tax (PBDT) grew by 135 per cent - from Rs.2210 millions in 2005-06 to Rs.5200
millions in 2006-07.
* Profit after tax (PAT) also increased by 176 per cent - from Rs.1050 millions in 2005-06 to Rs.2890 millions in
2006-07.
* Return on capital employed (ROCE) increased from 17.8 per
cent in 2005-06 to 35.8 per cent in 2006-07.
* Return on net worth (RONW) increased from 17.9 per cent in 2005-06 to 36.4
per cent in 2006-07.
* Earnings per share rose by 169.5 per cent from Rs.16.2 in 2005-06 to Rs.43.8 in 2006-07.
In what follows, we will discuss the performance of SRF's business, initiatives taken and overall financial
performance during the year under review and its outlook for the future.
Businesses
SRF has a portfolio of established businesses in industrial intermediates.
In the last few years, the Company has also developed new businesses in packaging films and speciality chemicals as a part of its long-term strategy for growth. It classifies its main businesses as: Technical Textiles Business (TTB), Chemicals Business (CB) and Packaging Films Business (PFB).
Technical Textiles Business
Technical Textiles Business (TTB), which includes tyre reinforcements, belting fabrics and coated fabrics, continues to be SRF's largest business segment. Sales of the business grew by 9.4 per cent from Rs.7950 millions in 2005-06 to Rs.8700 millions in 2006-07. TTB contributes approximately 48 percent to the total sales of the Company.
The main product of SRF in the TTB is nylon tyre cord fabric (NTCF), which is used as a reinforcement material in nylon tyres. With the buoyancy in both commercial vehicles and passenger car segments, the demand situation continued to be favourable during the year under review.
With this in mind, SRF embarked on a comprehensive expansion programme for the
business in 2005-06, which was discussed in last year's Annual Report.
As a result of the completion of this modernisation and
expansion drive, total capacity of the Company (including its wholly owned
subsidiary) has increased to 50,000 TPA of Nylon 6 yarn and 46,000 TPA of
fabric. This positions SRF as the industry leader in the country, and the third
largest Nylon 6 producer of NTCF in the world.
With the above expansions, the Company has been able to bridge the demand-supply
gap for NTCF in the domestic market; and consequently increase its market share
from 31 per cent in 2005-06 to 36 per cent 2006-07. SRF is also well placed to
meet the growing demand of NTCF in the country arising out of continued high
growth in the economy.
Nylon industrial yarn, which is an intermediate output in the production of
NTCF, is also used in non-tyre applications - which are expected to increase
with economic growth. This will also provide opportunity for SRF to grow and
diversify its offerings in this business. Keeping this in mind, the Company is
in the process of developing its competencies in these market segments. During
2007-08, SRF expects to make inroads into some of these markets, and to widen
its portfolio in the nylon industrial sector.
Last year's Annual Report had also mentioned about setting-up of a R&D
facility for this business. This is now in place for the entire value chain
from polymerisation to spinning to dipping - and work has begun to develop new
products and processes which will further enhance competitiveness. This R&D
facility is one of its kinds in the globe, and SRF expects it to play a very
important role to further strengthen its ability to grow the business.
Given the recent ramp-up of capacity in this business segment, the Company
expects further gains accruing from full utilisation of additional capacities,
improvements in operational efficiencies to global benchmark levels, and
widening of the product portfolio through R&D efforts in the next year.
Belting Fabrics
Belting Fabrics are used as reinforcement material for conveyor belts, and have
been witnessing robust growth in demand. During the last four years, volume in
this segment has increased at a compounded annual growth rate of over 27 per
cent. With a growth of 17 per cent in sales turnover during 2006-07, SRF
continue to be the market leader in
Given the particularly favourable outlook for the mining and infrastructure
sectors which are important end-user industries for such products, SRF expects
this buoyancy in domestic demand to continue. The Company currently receives 63
per cent of its revenues from exports spread across approximately 30 countries,
and is well positioned to make further in roads into international markets in
the future.
Before launching the next round of expansion in this business, SRF plans to focus
on modernisation and technological upgrading of its facilities to improve
productivity and operational performance. In view of the increasing
commoditisation of the business, the Company also plans to shift its focus to
development of higher value added products with better margins in the coming
years.
Coated Fabrics
Coated fabrics are used in a wide range of applications including protective
dynamic tarpaulins, static covers, auto-canopies, signages and awnings. During
2006-07, the Company was able to bring about substantial improvements in the
performance of this business through rationalisation of the existing product
portfolio and development of new products.
Consequently, sales turnover increased by 18 per cent in 2006-07. SRF continues to enjoy a leadership position in the sub-segments in which it operates. Approximately 22 per cent of the total sales came from new products introduced during the last two years.
In terms of target markets, the primary focus of this business continues to be
Outlook
Radialisation in the bus and truck segment, which accounts for over two-thirds
of SRF's NTCF sales, has been at 2 per cent for quite a few years now. Based on
the current assessment of the progress of radialisation, SRF expects that
demand will continue to grow at least for the next decade. The Company is well
placed to benefit from this growth. Even so, to de-risk itself from the
impending increase in radialisation, SRF has started exploring opportunities to
diversify its Technical Textiles Business by developing non-tyre applications
of nylon industrial yarn.
In belting fabrics, the outlook is very positive given the expectation of high
growth in the domestic mining industry and infrastructure sectors such as power
and construction. In fact, expectation of the industry is that capacities may
not be able to keep pace with this anticipated growth. This augurs well for
SRF, which has over 50 per cent share of this business in the country.
Although coated fabrics continue to be relatively small in terms of its size,
SRF is actively exploring possibilities of growing this business by
diversifying its product portfolio. The Company also expects to benefit from
high growth in this segment in the future.
Buoyed by the strong demand outlook and improvements in operational
efficiencies as a result of modernisation and investment in cost-effective
sources of energy, the outlook of the Technical Textiles Business is
encouraging. During 2007-08, SRF will be drawing up its plans for the next
round of investments in this segment.
Chemicals Business
The Chemicals Business of the Company comprises refrigerants, chloromethane and
the newly developed fluoro specialties. It also includes receipts from transfer
of CERs (Carbon Emission Reductions also known as Carbon Credits).
The Company's initiative in this regard has been discussed in the section on Clean Development Mechanism. On the one hand, sales and profitability of the business came under pressure due to the time-bound phasing out of ozone-depleting emissions, as mandated by the Montreal Protocol. On the other, the global market for carbon credits continued to remain encouraging. SRF has taken concrete steps to counter the eventuality arising out of the Montreal Protocol, and is well poised to deal with it in the years to come.
Refrigerants
Refrigerants are primarily used by the air-conditioning and refrigerant industry
as the cooling medium in compressors. SRF continues to be one of the largest
and credible players in the industry globally. It is the market leader with
around 40 per cent share in the domestic market. Exports of the business are
spread across over 60 countries, and account for 80 per cent of the
volume.
SRF's current refrigerants portfolio includes hydro-chlorofluorocarbons
(HCFC-22), chlorofluorocarbons (CFC-11 and CFC-12) and HFC 134a. With CFCs and
HCFCs being gradually phased out by 2010 and 2040 respectively, the market for
refrigerant gases in
SRF has been aligning its product-mix in line with the changing market
trends. The Company has developed indigenous technology for the production of
HFC, and holds a process patent for HFC-32 by the United States Patent and
Trademark Office. The semicommercial swing plant for manufacturing HFC
(134a/32) has undergone successful trials, and the product has been well
received by potential customers. SRF has been successful in getting its own
manufactured HFC 134a approved by most automobile, air conditioner and
refrigerator manufacturers in
The manufacturing operations of SRF's Chemicals Business are located at Bhiwadi
in Rajasthan. During the year, the anhydrous hydro fluoric acid (AHF) capacity
was de-bottlenecked from 23 metric tons (MT) per day to 35 MT per day to
support the higher requirement arising out of the newly set-up HFC 134a plant,
and the growth in the fluoro specialities business. The power plant
commissioned during 2005-06 also stabilised during the year, and helped bring
down energy costs.
SRF takes pride in the fact that the business was chosen as one of the first
six corporate entities in India to be allowed to use the `Responsible Care'
logo in recognition of its commitment to international standards of safety,
health and environment. During 2006-07, the Company was also awarded the
`Greentech Platinum Award for Safety'.
Chloromethanes
SRF's main products in the chloromethanes business are methylene chloride,
chloroform and carbon tetrachloride (CTC). The Company entered these areas as a
backward integration project for its fluorochemicals business. Today, it has a
capacity of over 30,000 MT per annum. While most of the chloroform and CTC is
internally consumed to produce HCFCs and CFCs respectively, methylene chloride
is sold in the domestic market.
With new capacities coming up globally, especially in
To reduce the impact of this development, the Company plans to implement technological changes in the plant during 2007-08, and thereby reduce the proportion of CTC in its product mix.
Fluoro Specialities
SRF entered into the fluoro specialities business in 2003-04 as a natural
progression of its expertise in fluorochemicals, and strong knowledge of
halogen chemistry. The focus is to leverage its expertise to produce
intermediates and advanced intermediates required to manufacture active
pharmaceutical ingredients (APIs) and agro-chemicals.
This business is in the process of being developed by targeting both pharmaceuticals
and agro-chemicals sector. During 2006-07, this division sold products to major
pharmaceutical companies in
During 2007-08, the focus of this business will be to develop the market for
existing products and build the momentum for new offerings. As R&D will be
critical for the success of this business, the Company has established two
fully equipped state-of-the-art R&D centres at Bhiwadi (Rajasthan) and
Chennai (Tamil Nadu). Currently, these centres have close to 20 scientists.
This number is expected to increase in the future.
Outlook
SRF has been working on a well thought out strategy to counter the complete
phase-out of CFCs and CTC by 2010 and HCFCs by 2040, as mandated by the
Montreal Protocol. There are two key elements of this strategy. First,
compensate the loss of revenue from CFCs by increase in HCFCs and HFC134a.
Second, enter higher value added segments by introducing new generation products in the market, such as the development of the fluoro specialities business.
In terms of the demand, the Company expects refrigerants in
Packaging Films Business
PET films are primarily used in packaging of food, cosmetics, personal and
health care products. With the increase in disposable income of households in
The full benefit of downstream metallisation plant commissioned in the previous
year also accrued to the Company during 2006-07, and the entire production was
sold out. In the domestic market, SRF is an important player in the packaging
films business with a market share of 10 per cent.
However, with over 200 KTPA of capacities in
In the export market, SRF has a significant presence in the SAARC region, Middle
East, Africa, West Asia and
Outlook
Buoyant demand for packaging films is expected to continue with its high
double-digit growth rates - aided by large increases in household incomes and
trends in favour of greater usage. SRF's strategy for the business is to
diversify into more value added and specialty products, and establish a strong
presence in lucrative global markets. In line with this strategy, the Company
plans to expand the capacity of metallised films, and enter the specialty
holography segment during the next year. Overall, the long-term prospects of
this business are encouraging.
Operations
Review
Net sales of the Company grew by 39.5 per cent from Rs.12920 millions in
2005-06 to Rs.1802 millions in 2006-07. Profit before interest, depreciation
and tax (PBIDT), including `other income' increased from Rs.2590 millions in
2005-06 to Rs.5550 millions in 2006-07.
Profit before tax (PBT) increased by 180 per cent from Rs.1580 millions in
2005-06 to Rs.4430 millions in 2006-07. After accounting for the provision on
taxation of Rs.1540 millions, which includes both fringe benefit tax and
deferred tax liability, profit after tax (PAT) grew by 176 per cent from
Rs.1050 millions in 2005-06 to Rs.2890 millions in 2006-07.
Subsidiary
Companies
SRF Overseas Ltd. (SRFO) :
SRFO, a wholly owned subsidiary operating out of
There is no permanent diminution in the value of investment by SRF in SRFO
considering that :
* SRFO has been making profits for the last three years and,
* NPV of future cash flows of SRFO is more than carrying amount of assets as per audited result as on
31.03.2007.
SRF Americas, Inc. (SRFA) :
SRFA, a wholly owned subsidiary, has been the marketing arm of the coated
fabrics segment of TTB in
Receivables amounting to USD 0.6 million fully provided earlier have been
written off in accordance with RBI regulations.
Other Subsidiaries
SRF Transnational Holdings Limited
(SRFTH) :
SRFTH made a profit of Rs.4.810 million during the year 2006-07. This profit
was mainly on account of interest income and realisation of certain old
outstandings.
SRF Properties Limited earned a net profit of Rs.0.538 million during the year
2006-07.
The Central Government vide its letter No. 47/151/2007-CL-III dated 4 April
2007 has under section 212(8) of the Companies Act, 1956, exempted SRF from
attaching a copy of balance sheet, profit and loss account, auditor's report
and directors' report of its subsidiary companies and other documents required
to be attached under Section 212(1) of the Act to the balance sheet of the
Company.
Joint Ventures
During the year, company entered into a Joint Venture Agreement for setting up
a plant in
Captive Power Company
The company has invested an amount of Rs.39.900 millions in equity of a company
incorporated for setting up a group captive power plant in Malanpur Industrial
Area near
Safety, Health and
Environment
* Most of SRF's facilities have ISO 14001 certification for environment management.
* The chemical business plant at Bhiwadi has been certified for the Integrated Management System covering
Quality Management (ISO-9001), Environment Management (ISO - 14001 : 2004), Safety & Health Management
(OHSAS 18001). This plant is also certified for Social Accountability (SA - 8000).
* During the year, the chemical business plant was awarded the Greentech Platinum award in Chemical Sector
Safety Management and Gold award for the Environment Management.
* SRF was awarded Responsible Care logo on 22nd Dec 2006. Indian Chemical Council (formerly known as
ICMA, now ICC) had organized a programme on 'Launch - Responsible Care' in Vadodara on 22nd Dec-2006.
Mr. Arvind Aggarwal, IAS, Industries Commissioner - Government of Gujarat, presented the honour to SRF to
use RC Logo.
* Various Projects on the water conservation in Chemicals Business undertaken in 2006-07 yielded a saving of
about 450 m3/day of the ground water abstraction.
* The
Management (ISO-9001), Environment Management (ISO - 14001), Safety & Health Management (OHSAS
18001).
* The TTB plant at Manali was awarded `Safety star' by `National safety council- Tamil Nadu chapter' for safety
practices for the year 2005-06 announced in Dec 06.
* The TTB Plant at Gummidipoondi and
Financials
Net sales of the Company increased by 39.5 per cent from Rs.12920 millions in 2005-06 to Rs.18020 millions in 2006-07. This increase was driven by continued growth in all core businesses of the Company - Technical Textiles, Chemicals and Packaging Films.
During the year, the demand situation for key product segments was good and
realisations remained firm. SRF also benefited from improvements in operational
efficiencies, especially reduction in cost of energy due to its captive power
plant going on-stream.
As a result, the Company registered a healthy growth in its operating profits
(PBDIT) from Rs.2590 millions in 2005-06 to Rs.5550 millions in 2006-07.
Depreciation costs increased on account of recent investments in expansion of capacities. However, interest cost came down as a result of rationalisation of loans owing to good cash flows. Profit after tax almost tripled from Rs.1050 millions in 2005-06 to Rs.2890millions in 2006-07.
As a result of this performance, all indicators of profitability have
registered a considerable improvement during the year. As shown in Table 2
below, PBDIT margin increased by 10.8 percentage points from 20 per cent in
2005-06 to 30.8 per cent in 2006-07. ROCE and RONW also increased from 17.8 per
cent and 17.9 per cent in 2005-06 to 35.8 per cent and 36.4 per cent in
2006-07, respectively.
Fixed Assets:
Free Hold Land, Leasehold Land, Road, Buildings, Plant & Machinery,
Furniture & Fixtures, Office Equipments, Vehicles and Intangible Assets
etc.
Further strong progress at SRF’s CDM project
SRF announces further sales of 2.5 million carbon credits
New contracts include significant sales to two large European Utilities
SRF expects to realize around Rs 2500 millions from the sales contracted
to date in FY 2006-07
SRF accounts for more than 50% of global CER issuances as on date
The latest contracts include sales to two new buyers, who are large
European Utilities and to two existing buyers. These contracts have been
finalised at fixed prices. PricewaterhouseCoopers acted as financial adviser to
SRF Limited on the transactions.
The CDM Executive Board under the United Nations Framework Convention on
Climate Change (UNFCCC) approved the issuance of a further 1,984,947 carbon
credits to the project last week. A total of 3.8 million carbon credits have
now been issued to the SRF project, accounting for more than 50% of all carbon
credits issued globally by the CDM Executive Board to date.
The implementation of SRF’s CDM project for the incineration of HFC – 23
by thermal oxidation is well ahead of its planned schedule. The company had
initially planned to receive its first cash flows from the project during the
2006–07 financial year. However, following early commissioning and
registration, it realised around Rs 950 millions during 2005-06 and expects to
book around Rs 2500 millions from the sale of carbon credits contracted so far
for the financial year 2006 – 07. Depending on the carbon markets and SRF’s
fund requirements, the company will decide on further sale of carbon credits,
during the current financial year 2006-07.
Commenting on the recent developments, Mr. Ashish Bharat Ram, President
and Executive Director, said “They are delighted to have concluded contracts
with the two new prestigious buyers. The carbon markets have been very volatile
in recent weeks, but demand for carbon credits from quality projects like they
remains strong. They are very pleased with the prices they have achieved.”
SRF has also taken significant initiatives in relation to the
sustainable development goals of the project and has commenced work in the
field of Natural Resources Management with a well known Non Governmental
Organisation (NGO) in areas near the Project site in Rajasthan. Mr. Roop
Salotra, President and CEO of the SRF Fluorochemicals business, said “They have
made substantial progress in the fields of Health and Education, besides
initiating the NRM project. This project demonstrates what can be achieved
through the CDM, not just in reducing greenhouse gas emissions, but towards
sustainable development more generally.”
About SRF Limited
SRF Limited, a leading industrial group, manufactures Technical
Textiles, Fluorochemicals, Packaging Films and Pharma Chemicals. Commencing
operations in 1974, SRF today operates from eight plant locations in India and
abroad and has attained market leadership position in Nylon Tyre Cord Fabric
(8th largest in the world & approx 32 per cent market share in India),
Belting Fabrics (3rd largest in the world & approx 60 per cent market share
in India) Refrigerant Gases (approx 40 per cent market share in India) and
Chloromethanes. Currently, SRF’s products cater to industrial customers in more
than 55 countries globally. SRF’s relentless focus on TQM techniques has
resulted in the company winning the prestigious Deming Application Prize in
2004 for the erstwhile Industrial Synthetics Business of SRF (now integrated
with Technical Textiles business), the first nylon tyre cord company outside
Japan to be awarded this prize.
SRF’s CDM Project
Highlights:
The project was registered by the UNFCCC on December 24, 2005.
The project is expected to achieve up to 3.8 million CER per annum.
SRF has been storing HFC 23 since July 1, 2004.
SRF started the incineration process in late August 2005.
The sustainable development activities under the project have commenced
in the areas of Education and Health. SRF is working with a well known NGO for
the Natural Resources Management initiative.
The project has realised Rs 950 millions in March 2006 through transfer
of 1.4 million CERs
Press Releases :
SRF Limited Receives
Greentech Environment Excellence Platinum Award 2007
August 30, 2007, New Delhi: SRF Limited, a leading Indian player in Technical Textiles, Refrigerant Gases and having operating interests in Packaging Films and Pharma Intermediates sectors, has been conferred with the prestigious "Greentech Environment Excellence Platinum Award 2007" at a function held in Goa last evening.
On receiving the award from Honourable Chief Minister of
The award was conferred on SRF Limited by a panel of judges comprising eminent scientists and technocrats of the country in recognition of its outstanding achievements in environment protection and pollution control over the last few years.
In particular, SRF won appreciation for its efforts to reduce production of Ozone Depleting Substances, Choloro Fluoro Carbons (CFCs) in line with Indian Government’s commitment under Montreal Protocol to phase out its production completely by 2009. The award also highlighted SRF’s efforts to combat the global warming through Clean Development Mechanism (CDM) under Kyoto Protocol.
About SRF Limited
SRF Limited is a leading Indian player in Technical Textiles, Refrigerant Gases and having operating interests in Packaging Films and Pharma Intermediates sectors. Since its inception in 1974, SRF has emerged as an industrial major in its core business areas. The company comprises a group of different businesses like Technical Textile Business, Chemical Business and Packaging Films Business.
About Greentech
Foundation
Greentech Foundation is a non-profit organisation established to promote education, training, research and dissemination of knowledge, advancing the scientific, technical and practical aspects of wastes management and climate change to safeguard environment. Greentech Foundation’s main objective is to promote education, training and research in all matters of environment management.
SRF Q1 Revenues at
Rs. 4050 millions, PAT at Rs. 560 millions
• Q1 PBIDT at Rs.
1154 millions
• Q1 PBT at Rs.
812 millions
• Interest charges
at Rs. 72.600 millions, a reduction of Rs. 11.000 millions over CPLY
• SRF Board approves
capital expenditure worth approx. Rs. 2700 millions
Pressure on margins, higher depreciation charges due to additional
impact of change in depreciation policy and reduction in the sales of carbon
credits are some of the key reasons for the company’s lower profitability as
compared to CPLY.
Reflecting on the financial performance of the company, Mr. Ashish
Bharat Ram, Managing Director, SRF Limited, explained: “The strengthening of
the rupee has adversely impacted all our businesses with lower revenues and
lower margins. In spite of seeing the lowest margins historically, we managed
to generate a marginal profit. Volumes are picking up and we expect to see a
corresponding increase in margins subsequently. The heartening factor in our
results was the turnaround of the Packaging Film Business. While short term
volatility will continue, the demand growth remains extremely robust. The other
significant event for us was the commissioning of our 134-a refrigerant gas
plant. This is expected to add to the topline and bottomline of the Chemical
Business going forward.”
PERFORMANCE
OVERVIEW:
The company’s PBIDT during the first quarter of 2007-08 was 20.7% lower
at Rs. 1154 millions against Rs. 1455 millions during CPLY and its PBT at Rs.
812 millions was down by 32.3% over Rs. 1200 millions recorded during CPLY. The
company’s cash profit at Rs. 849 millions during April-June’07 was lower by 19%
against Rs. 1054 millions recorded during CPLY. SRF’s earnings per share (EPS)
for the first quarter of the current financial year was Rs. 8.25 while Cash EPS
was Rs. 12.51 for the quarter ended on 30th June 2007. SRF brought its interest
charges down to the level of Rs. 72.600 millions against Rs. 83.600 millions
recorded at the end of Q1 last year.
CAPEX PLAN
The SRF board also approved four capital expenditure proposals at the
total investment of approximately Rs. 2700 millions in a meeting held today.
One of the major facilities will be the installation of the Polyester
Industrial Yarn Spinning Unit with downstream facilities for usage in Technical
Textiles at a total investment of approx Rs.2500 millions. This will enable
SRF, a leading tyre cord and belting fabric producer, to leverage the growing
demand for belting fabrics on account of spurt in the user industries in
infrastructure and mining globally. Besides, SRF will also be able to
participate in fabric business for radial tyres for the new generation
automobiles.
Responding to a query on the prospect of the expansion projects in
Technical Textiles Business, Mr. Ashish Bharat Ram, said, “We believe that
investing in Polyester Industrial yarn will open new business horizon for us in
an exciting new area.”
Installation of a second Metalliser Project for its Packaging Films
Buisness at an investment of approx Rs.160 millions is another important
project that was approved today. The metallisation of the packaging films,
which are primarily used in packaging of food, cosmetics, personal and health
care products, will improve the films’ quality mainly in terms of barrier
property. When completed, the project will increase SRF’s market share in the
growing market of the quality Mettalised Films in
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 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.39.82 |
|
|
1 |
Rs.80.85 |
|
Euro |
1 |
Rs.56.22 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
64 |
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 |
|