MIRA
INFORM REPORT
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Report Date : |
28.04.2008 |
IDENTIFICATION
DETAILS
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Name : |
XPRO INDIA LIMITED |
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Registered Office : |
Barjora – Mejia Road, P.O. Ghutgoria
Tehsil : Barjora, District Bankura – 722202, West Bengal |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
26.11.1997 |
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Com. Reg. No.: |
085972 |
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CIN No.: [Company
Identification No.] |
L25209WB1997PLC085972 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALX00017D |
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Legal Form : |
Public Limited Liability Company. The company shares are listed on
stock exchange. |
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Line of Business : |
Manufacturing of thermoplastic films/ sheets, cotton yarn, thermosetting
powders, resins, etc. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 4142060 |
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Status : |
Very Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well – established and reputed company having fine track.
Available information indicates high financial responsibility of the company.
Trade relations are fair .General financial position is satisfactory.
Fundamental are strong and healthy. Payments are reported as usually correct
and as per commitments. The company can be considered good for normal business dealings. It can be regarded as a promising business
partner in a medium to long – run. |
LOCATIONS
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Registered Office : |
Barjora – Mejia Road, P.O. Ghutgoria
Tehsil : Barjora, District Bankura – 722202, West Bengal, India |
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Tel. No.: |
91-3241- 257263/4 / 33-23345326 / 26600931 |
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Fax No.: |
91-3241- 257266 |
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Email: |
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Website : |
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Corporate Office/ Exports/ Central
Marketing Office : |
1, Industrial Area, N.I.T., Faridabad –
121001, Haryana, India |
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Tel. No.: |
91-129-2233915/17 |
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Fax No.: |
91-129-4028300 or 4028290 / 25028300 / 25028290 |
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E-Mail : |
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Factory : |
Biax
Division: Barjora-Mejia Road, P.O. Ghutgoria Tehsil : Barjora, District: Bankura, West Bengal – 722202, India Tel.: 91-3241-257263/4 Email :brbhattacharya@xproindia.com
Coex
Division: Faridabad Unit: Xpro India Limited - Coex Division, 2-3, Industrial Area, N.I.T., Faridabad - 121001, India Tel.: 91-129-2233915/17 Email: mmk@xproindia.com
Greater
Noida Unit: Tel.: 91-120-2560739 or 2230890 Fax: 91-120-2560740 / 25028300 Email : uks@xproindia.com
Pune Unit: Xpro India Limited - Sheet Plant, Plot No. E-89, MIDC Industrial Area, Tel.: 91-2138-232821/24 Email : rbmuley@xproindia.com Thermosets
Division: ·
Xpro India Limited - Thermosets Division, Plot No.
E-89, MIDC Industrial Area, Email: aniljain@xproindia.com · Poisar Bridge, Kandivli (West), Mumbai - 400 067, Maharashtra Tel. No. 91-22-28051242/44 Fax. No. 91-22-28019917 E-mail.
adi@birlas.com Cimmco Spinners
Division B-1, MIDC, Chincholi-Kondi, Solapur - 413 006, Maharashtra, India Spinning
Division B-1, M.I.D.C, Chincholi-Kondi, Solapur - 413 255, Maharashtra Tel. No. 91-217-22357250/54 Fax. No. 91-217-22357258 E-mail. dpgoenka@birlas.com |
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Branches: |
Terxpro Films Private Limited, Plot No.78,
Industrial Area No. 3 Pitampur, Dist. Dhar, Madhya Pradesh, India |
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Tel. No.: |
91-7292-256908 |
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Fax No.: |
91-7292-256214 |
DIRECTORS
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Name : |
Mr. Sidharth Birla |
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Designation : |
Chairman Cum Promoters |
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Date of Birth/Age : |
44 yeas |
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Qualification : |
B. Sc. (Hons.), M.B.A. |
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Experience : |
23 years |
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Date of Appointment : |
01.03.2000 |
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Previous Employment: |
Cimmco Birla Limited |
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Designation : |
Director |
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Name : |
Mr. Amitabha Ghosh |
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Designation : |
Director |
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Name : |
Mr. Haigreve Khaitan |
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Designation : |
Director |
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Name : |
Mr. P Murrari |
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Designation : |
Director |
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Name : |
Mr. Utsav Parekh |
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Designation : |
Director |
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Name : |
Mr. S Ragothaman |
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Designation : |
Director |
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Name : |
Mr. C Bhaskar |
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Designation : |
Managing Director and Chief Executive Officer |
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Name : |
Mr. Debeneel Mukherjee |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mrs. Madhushree Birla |
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Designation : |
Promoters |
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Name : |
Mr. S C Jain |
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Designation : |
Company Secretary |
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Name : |
Mr. H Bakshi |
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Designation : |
President and Chief Operating Officer |
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Name : |
Mr. Manmohan Krishnan |
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Designation : |
Executive Vice president , Coex Division |
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Name : |
Mr. U K Saraf |
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Designation : |
Executive Vice President , Thermoforming Unit |
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Name : |
Mr. Anil Jain |
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Designation : |
Executive Vice president , Thermo sets Division |
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Name : |
Mr. V K Agarwal |
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Designation : |
Executive Vice president ( F and A ) |
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Name : |
Mr. D. P. Goenka |
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Designation : |
Joint President – Spinning Division |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders (as on 31.03.2007) |
No. of Shares |
Percentage of
Holding |
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Banks, FIS Insurance companies |
23 |
7.72% |
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Domestic Companies |
563 |
43.84% |
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Mutual Fund (Incl UTI) |
6 |
0.09% |
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Non –residents / OCBS |
80 |
0.79% |
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Resident Individual / Others |
49164 |
47.56% |
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Total |
49836 |
100.00% |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of thermoplastic films/ sheets, cotton yarn,
thermosetting powders, resins, etc. |
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Products : |
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PRODUCTION STATUS (as on 31.03.2007):-
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Particulars |
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Unit |
Installed
Capacity |
Actual
Production |
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Thermoplastic Films / Sheets / Liners |
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M/T |
21100 |
**12602 |
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Thermosetting Powders and Synthetics Resins |
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M/T |
9250 |
4855 |
Notes:
· Installed Capacities are as certified by the Management
· None of the products are covered under current 1DR licensing norms. Hence, "Licensed Capacity" not reported.
· Production includes outside job work for others.
· **Thermoplastic Films/Sheets/Liners production includes 739 MT inter-unit transfer/internal consumption
(previous year: 457 MT)
GENERAL
INFORMATION
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Suppliers : |
· Barjora Packaging Private Limited., · Bengal Corrugated Paper Industries, · Bishwakarma Saw Mill, · Bharat Organics, · Constructive Packaging, · Entak Corporation, · Geeseven Laminated Sacs (Private) Limited., · Hind Packaging, · Jai Ambe Plastics, · Jupiter Dyes, · Kamal Containers, · Khetan Plasto Pack, · Mahabir Plastic Industries, · Modern Petro Packaging, · Narendra Grinders, · Pertect Forms, · Penguin Plastics, · Poly Pack Ind., · Rama Packaging Industries, · Sarat Banerjee, · Shree Rang Ind., · Shree Rang Pulverisers, · Sidh Masterbatch.es (Private) Limited., · Samra Plastics Private. Limited., · Techno Board Private. Limited., · Reliance Electrical Private. Limited., · Vijay Packing Industries. |
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No. of Employees : |
415 |
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Bankers : |
· Bank of Baroda · ICICI Bank Limited · IDBI Bank Limited · IFCI Bank · Arab Bangladesh Bank |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Lodha and Company Chartered Accountants |
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Address : |
New Delhi |
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Joint Venture : |
Terxpro Films Private Limited |
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Associates/Subsidiaries : |
· Xpro Global Limited · Diamond Realty Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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15000000 |
Equity Shares |
Rs.10/- each |
Rs.150.000 millions |
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20000000 |
Unclassified Shares |
Rs.10/- each |
Rs.200.000 millions |
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Total |
Rs.350.000
millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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10074987 |
Equity Shares |
Rs.10/- each |
Rs.100.750
millions |
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(March 31,2005-.
10074987) (Of the above
shares, 7130431 Equity Shares (previous year-.7130431 Equity shares)
of Rs. 10 each fully paid up issued &. allotted pursuant to the Scheme of
Arrangement duly sanctioned by the Hon. High Courts, without payment being
received in cash and 2324999 equity shares of Rs. 10 each Issued as fully
paid-up bonus shares (in 2003-04) by capitalisation of general reserves and
securities premium) |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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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 |
100.750 |
100.750 |
100.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
934.765 |
893.830 |
892.900 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1035.515 |
994.580 |
993.700 |
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LOAN FUNDS |
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1] Secured Loans |
468.616 |
517.359 |
452.500 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
468.616 |
517.359 |
452.500 |
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DEFERRED TAX LIABILITIES |
45.329 |
52.545 |
0.000 |
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TOTAL |
1549.460 |
1564.484 |
1446.200 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
887.263 |
790.071 |
742.100 |
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Capital work-in-progress |
5.120 |
13.832 |
3.400 |
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INVESTMENT |
116.342 |
91.629 |
97.900 |
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DEFERREX TAX ASSETS |
3.205 |
10.870 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
159.293
|
142.945 |
160.800 |
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Sundry Debtors |
267.431
|
226.113 |
304.300 |
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Cash & Bank Balances |
301.259
|
245.630 |
257.200 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
147.584
|
327.295 |
256.700 |
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Total
Current Assets |
875.567
|
941.983 |
979.000 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
[305.992]
|
[243.874] |
338.300 |
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Provisions |
[32.045]
|
[40.027] |
37.900 |
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Total
Current Liabilities |
[338.037]
|
[283.901] |
376.200 |
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Net Current Assets |
537.530
|
658.082 |
602.800 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1549.460 |
1564.484 |
1446.200 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
1174.127 |
1079.199 |
1674.000 |
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Other Income |
32.912 |
17.655 |
152.000 |
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Total Income |
1207.039 |
1096.854 |
1826.000 |
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Profit/(Loss) Before Tax |
53.807 |
31.311 |
149.700 |
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Provision for Taxation |
4.809 |
7.359 |
53.600 |
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Profit/(Loss) After Tax |
58.616 |
23.952 |
96.100 |
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Export Value |
76.968 |
74.794 |
NA |
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Import Value |
181.520 |
171.075 |
NA |
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Expenditures : |
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Manufacturing Expenses |
368.441 |
364.637 |
72.300 |
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Administrative Expenses |
0.000 |
0.000 |
73.500 |
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Raw Material Consumed |
727.296 |
618.164 |
962.000 |
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Excise Duty |
0.000 |
0.000 |
217.500 |
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Increase/(Decrease) in Finished Goods |
0.000 |
0.000 |
22.800 |
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Salaries, Wages, Bonus, etc. |
0.000 |
0.000 |
112.600 |
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Interest |
34.383 |
24.173 |
52.200 |
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Depreciation & Amortization |
65.482 |
58.567 |
65.600 |
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Other Expenditure |
0.000 |
0.000 |
24.700 |
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Total Expenditure |
1195.602 |
1065.541 |
1603.200 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
318.600 |
312.100 |
317.900 |
|
Other Income |
1.400 |
1.000 |
3.600 |
|
Total Income |
320.000 |
313.100 |
321.500 |
|
Total Expenditure |
290.700 |
280.500 |
293.700 |
|
Operating Profit |
29.300 |
32.600 |
27.800 |
|
Interest |
7.700 |
8.300 |
8.600 |
|
Gross Profit |
21.600 |
24.300 |
19.200 |
|
Depreciation |
17.700 |
17.700 |
17.600 |
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Tax |
0.000 |
0.000 |
0.000 |
|
Reported PAT |
3.900 |
6.600 |
1.600 |
KEY RATIOS
|
Year |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.49 |
0.49 |
0.51 |
|
Long Term Debt-Equity Ratio |
0.23 |
0.26 |
0.34 |
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Current Ratio |
1.47 |
1.65 |
1.77 |
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TURNOVER RATIOS |
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Fixed Assets |
1.11 |
1.15 |
1.57 |
|
Inventory |
8.79 |
8.04 |
11.45 |
|
Debtors |
5.38 |
4.60 |
5.30 |
|
Interest Cover Ratio |
0.52 |
2.29 |
1.93 |
|
Operating Profit Margin(%) |
6.27 |
9.37 |
9.92 |
|
Profit Before Interest And Tax Margin(%) |
1.34 |
4.57 |
6.00 |
|
Cash Profit Margin(%) |
4.53 |
6.76 |
5.77 |
|
Adjusted Net Profit Margin(%) |
-0.40 |
1.97 |
1.85 |
|
Return On Capital Employed(%) |
1.18 |
3.77 |
6.97 |
|
Return On Net Worth(%) |
-0.52 |
2.41 |
3.24 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
The company was a part of Cimmco Birla Limited before it was
incorporated. Pursuant to a Scheme of Arrangement sanctioned by the Hon'ble
High Courts of Kolkata and Madhya Pradesh, the Biax division, Xpro India
division, Xpro India (Bombay) division and Cimmco Spinners division (Transfer
divisions) of Cimmco Birla Limited were transferred to and vested in the
company with effect from April 1, 1998 on a going concern basis. Pursuant to the scheme 7130443 equity shares
of Rs. 10 each fully paid up were to be issued to the shareholders of CBL in
the ratio of one equity share credited as fully paid up for every two equity
shares held by them in CBL. The company
has issued and allotted the year 6993330 equity shares to the resident
shareholders of CBL and balance 137113 shares to be issued and allotted to
non-resident shareholders of CBL pending receipt of RBI approval are lying in
Share Capital Suspense account.
Immovable properties and Investments are yet to be registered in the
name of the company.
Operating Profits at the Gross level continued to remain under severe pressure largely due to various external and market driven factors; the overall financial results for the year were also impacted on a one time basis owing to relocation of the Thermosets Division during the year they recommend for the approval a Dividend of Rs.1.50 per Share.
REVIEW OF KEY BUSINESS MATTERS:
The operations and results of the company for the year under review can be considered generally satisfactory and in line with the competitive market conditions in the Company's business sectors, the global volatility in petroleum product prices, and gradual increases in interest rates which kept margins depressed for the time being. Gross Sales at Rs.1328.200 millions was higher by almost 9% over the previous year, while overall volumes at 17,457 MT were marginally higher (after adjusting for inter-unit transfers).
Their strategic initiatives for the Thermosets Division have seen, following
the successful implementation of a settlement with the workers/employees, the
discontinuance, of production activities at Kandivili (Mumbai) and relocation
of the unit to world-class facilities at Ranjangaon - a high -profile
industrial area being well developed and positioned by the relevant Maharashtra
Government authorities. Most sections of the plant are in operation and
products from the new site have been well accepted in the market. Possession of
the Kandivili site has been handed over to the Developer with whom an agreement
in this respect had been entered into in 2003.
Their strategic intent for BOPP and Cast films is directed towards a continued
focus and specialization in special types of films (including thin films,
capacitor films, hygiene films and metallised films for special applications).
As a result the Company was able to operate its plants at high utilization
levels, particularly for BOPP Films. The Board has, in principle, approved the
substantial expansion of Biaxially Oriented Polypropylene Films (BOPP) capacity
by 50,000 MT per annum. Detailed preparatory work is in progress and final
steps are expected to be taken very soon.
After a few years of average performance, the domestic white goods industry
(mainly refrigerators) displayed a growth of over 16 percent. However, the
off-take of sheets and formed liners, and overall sheet production tonnage, was
only marginally higher than in the previous year as the refrigerator industry
under pressure to curtail cost has reduced sheet thicknesses. The industry
continues to face good growth prospects. Nevertheless with a view to the long
term and in order to offer customers the advantages of proximity, better
service levels and fiscal benefits, sheet capacity at Greater Noida was
strengthened and capacity at Ranjangaon also commenced commercial production.
Proactive steps continue to be taken by the management to preserve the market
standing and competitive edge, including through development, productivity
improvement, cost and financial discipline. Capacity enhancements are being
contemplated at Greater Noida and Ranjangaon in order to take advantage of
proximity to the several white goods producers in these clusters.
Through careful control on use of funds, the Company maintained significant
amounts as treasury liquidity essentially to support its future investment
plans. Also, some equity investments, where the Company did not have plans to
participate or contribute in the immediate future, were disposed off to
regenerate resources. The Company proposes to raise some capital from the
promoter group on a preferential basis, as per SEBI regulations and guidelines,
subject to shareholder approval. This would expand the equity capital by just
over 9% over two financial years. In order to promote employee involvement,
ownership and retention, the Board has proposed, subject to approval by
shareholders, the introduction of an Employee Stock Option Scheme in accordance
with SEBI Guidelines.
In August 2006, the joint venture company, Terxpro Films Private Limited
(`Terxpro') raised capital to meet its operational requirements and the Company
invested a sum of Rs. 25.500 millions at par in this issue. Terxpro then
required further infusion of capital of nearly Rs.120.000 millions in two
parts. However, in keeping with its own strategic investment plans, the Company
did not invest in the issue and accordingly its holding in Terxpro fell to
36.11% and will fall further to 32.40% after the second stage subscription in
September 2007. The status is fully described in Note 15 to the accounts. In
keeping with the joint Venture Agreement with the Rani Group, effective control
of Terxpro vests with the Rani Group who also has now a majority on the Board
and the Company continues to support Terxpro where needed.
COMPANY AND INDUSTRY
STRUCTURE:
Operations of the Company are focussed in their segment of core competence viz. Polymers Business and structured into 3 operating Divisions. Each operating division has been kept self-sufficient managerially to perform its own duties and functions, with support provided at a corporate level as and when required.
The industry structure in the field of polymers processing
is spread wide, from miniscule to fairly large capacities. There is no direct
thumb-rule in terms of 'size vs. profitability' and it is possible for players
to work out their own viable economics depending upon various factors, mainly a
combination of product mix and market segment or niche that the player focuses
on. Supply chain linkages to clients can play an additional role for some.
Since polymers are freely available at prices synchronized to global prices,
market focus besides technical and service competence has been the key to
success. It is fair to say that the Company is a mid-sized player, with
significant strengths in its market segments and subject to the usual market
pressures. In the overall, the Company's operations are relatively capital
intensive; raw material and power constitute the largest proportions of cost.
They believe that opportunities are substantial both in terms of market growth
and product diversity and that threats from replacement products are not
materially significant. The main raw materials used by the Company are
Thermoplastic Resins (such as Polypropylene, Styrenic Polymers, LD/LLD
Polyethylene, etc.), Phenol and Formaldehyde.
They firmly recognise that total customer satisfaction is the key to their
success. Their aim is to build sound customer relationships through creation of
value for them, and in the process to earn an equitable return for theirselves.
Quality is built into products through appropriate manufacturing technology and
work methods. Manufacturing at all units is carried out by suitably qualified
personnel under strict quality standards. Continuous product development for
specific applications has helped us in proactively developing technically
sustainable solutions with clearly apparent customer benefits. Biax Division's
Barjora Unit, Coex Division's Faridabad Unit, and Thermosets Division (at
Kandivali - with steps underway for certification at Ranjangaon) maintained the
certification of their Quality Systems under ISO 9001:2000 standards for the
manufacture of BOPP Films, Coextruded Multilayer Plastic Sheets and Cast Films
and for the development and manufacture of Phenolic Resins, Phenol Formaldehyde
Moulding Compounds and Amino Moulding Compounds, respectively.
Biax Division:
Biax Division manufactures a wide range of Biaxially Oriented Polypropylene ('BOPP') Films on state of art automated production lines, having multipurpose use in applications ranging from food packaging to specialized films for use in electronics, besides being used for print lamination, adhesive tape etc. India continues to have one of the most rapidly expanding flexible packaging industries in the world with continuing trends in replacement of glass, paper and aluminium foil with films/film based laminates. With BOPP films constituting a significant input into this industry and with development of new applications, the oriented films market in India continues to grow rapidly at about 20% annually (significantly higher than the global growth rate). This market expansion has however resulted in tremendous growth in indigenous BOPP films capacity from 54,750 MT pa in FY 2000 to over 200,000 MT pa at present, with a further 70,000 MT of capacity to be added in 2008 (excluding their capacities under consideration). Consequently, the market conditions for BOPP films remained fiercely competitive through the year with all players vying to maximise capacity utilization and market share enhancement. Their capacity however, remains essentially dedicated to special products and niche markets, largely thin films, which together with consistently high quality and service standards enabled the unit to achieve near full capacity utilization. Higher cost of inputs (partially due to the volatility in crude and petroleum prices) coupled with overall lower realizations contributed to lower value additions. Their products continue to be well received in domestic and export markets. Total production during the year was 2,882 MT (about 15% lower than in the previous year due to manufacture of thin gauge films and maintenance shutdown). During the year Biax also marketed 1157 MT of packaging grade BOPP films produced by Terxpro Films Private Limited.
Coex Division:
Coex Division manufactures coextruded sheets and coextruded cast films. Their products are usually custom-made to customer needs and based on various polymers including Polystyrene, Polypropylene and Polyethylene.
Applications for their product range are wide and their range includes a variety of sheets for refrigerator liners, disposable containers, automotive parts, etc. Cast films are high clarity films including stretch wrap and cling film, specially formulated films for medical disposables, hygiene films, polypropylene films, tyre-tread backing films and others for packaging applications. The refrigerator sector, the division's major market segment, displayed an improved growth of nearly 16% over the previous year in volume terms. However, this growth did not translate to corresponding volume growth in the sheet market due to (a) downgauging to meet cost pressures and (b) shift to ABS (and consequent lower sheet weight per refrigerator). They continue to hold their position as the leading supplier of sheets to the white goods industry, with plants at multiple locations and in close proximity to customer units, through consistent focus on product quality, development and service, which have also been recognised by major customers. In the cast films segment, significant capacity additions have led to price undercutting in commodity films- Therefore, their focus remains on. special films where there is good demand growth and continuous innovation. Total production of sheets, including as liners, (adjusted for inter-unit transfers) and cast films at this division was 9,720 MT during the year, marginally higher than during the previous year.
The sheet line located at Pune was shifted to the Ranjangaon site, in close proximity to refrigerator majors. Operations at the Faridabad unit are becoming increasingly uneconomic, aggravated due to the high cost and poor consistency of supply and quality of power, and high effective labour costs. Various steps are under consideration to arrest the decline at this location and/or evolve new solutions. Meanwhile, steps are being taken to enhance sheet capacity at Greater Noida and Ranjangaon and towards addition of a Speciality film line at Ranjangaon.
Thermosets Division:
Originally established over 50 years ago, at the Kandivili unit, the Thermosets Division was a pioneer in the field of thermosetting materials, including Phenol Formaldehyde and Melamine Formaldehyde besides Phenolic Resins. These products are widely used in electrical accessories and components, automotive parts, textile machinery, railway signaling parts, grinding wheels, friction materials, laminates, adhesives, inks and tyres/rubber industry. The unit is the largest producer in the country for Phenolic moulding compounds and Non-Foundry Phenolic resins. The ability to offer a comprehensive range of products, particularly custom-made, has enabled the division to hold market leadership. Following successful implementation of the settlement arrived at with the workmen, production at the Kandivili site was discontinued with effect from November 30, 2006 and all production equipment was subsequently relocated to the Ranjangaon site.
Capacity at Ranjangaon has been enhanced to 9250 MT per annum giving scope for growth in the next few years. The production facilities at Ranjangaon are modern, with improved process and plant layout, superior effluent recovery and treatment facilities, and upgraded testing and development facilities. Raw material prices (particularly for phenol, formaldehyde and hexamine) continued to be unstable and volatile throughout the year, with average cost for phenol higher by nearly 30% over the previous year.
Notwithstanding competitive market pressures and restrictions due to plant relocation sales during the year grew by over 25% to 5050 MT. Intense development continues to develop new grades of moulding compounds and resins with good domestic and export potential.
OTHER INFORMATION:
a. Term Loan from State Bank of India, outstanding Rs. Nil (previous year Rs.6.872 millions), is secured by first hypothecation/mortgage of specified plant and machinery and extension of second charge on the fixed and current assets of the company, both present and. future, ranking pari-passu with other term and working capital lenders;
b. Term Loan from State Bank of Patiala, outstanding Rs.3.642 millions (previous year Rs.18.988 millions), is secured by first hypothecation/mortgage of all the movable and immovable assets, present and future, of Thermoforming Unit of the Company situated at Greater Noida and second charge on all the current assets of the Company ranking pari-passu with other term lenders;
c. Term Loan from State Bank of Patiala, outstanding Rs.1.591 millions (previous year Rs.7.500 millions), is secured by first hypothecation/mortgage of all the movable and immovable assets, present and future, to the Thermosets Division to the Company situated at Ranjangaon, Pune and second charge on all the current assets of the Company ranking pari-passu with other term lenders;
d.Term Loan from State Bank of Patiala, outstanding Rs. 170.167 millions (previous year Rs.85.000 millions), is secured by first hypothecation/ mortgage of all the movable and immovable assets, present and future, of the Thermosets Division of the Company situated at Ranjangaon, Pune and second charge on all the current assets of the Company ranking pari-passu with other term lenders;
e. Term Loan from State Bank of Hyderabad, outstanding Rs.8.465 millions (previous year Rs.42.965 millions), is secured by first hypothecation/mortgage to all the movable and immovable assets, present and future, of the Coex Division of the Company situated at Faridabad and second charge on all the current assets to the Company ranking pari-passu with other term lenders;
f. Term Loan from Axis Bank Limited outstanding Rs.40.625 millions (previous year Rs.73.125 millions) is secured by first hypothecation/mortgage of all the movable and immovable assets, present and future (except specified assets in favour of State Bank of India) of the Biax Division of the Company situated at Barjora and second charge on all the current assets of the Company ranking pari-passu with other term lenders;
g. Term Loan(s) from others, outstanding Rs. Nil (previous year: Rs.0.016 millions), is secured by hypothecation of vehicles purchased thereunder. Amount repayable within one year Rs. Nil (Previous year: Rs.0.016 millions);
h. Working Capital Loans are secured/to be secured by first charge, ranking pari-passu, in favour of members of the consortium of bankers, on all current assets of the company both present and future and second charge, ranking pari-passu, on the entire fixed assets to the company wherever situated both present and future;
i. Over-draft against term deposits) outstanding Rs.32.694 millions (previous year Rs.92.546 millions) are secured by way of pledge of Term Deposit Receipts) with Bank(s).
Interest in Joint Venture:
The Company's equity ownership interest in joint venture company, Terxpro Films Private Limited (Terxpro'), incorporated in India, has reduced from 49.999% to 36.11% during the year and will further reduce to 32.40% by September 30, 2007 on completion of the already agreed issue of further capital to M/s Terichem a.s., Slovakia (representing Rani Group). As a consequence of these steps, in terms of the Joint Venture agreement, Rani Group now has a majority representation on the Board of Directors of Terxpro, and is responsible for management of Terxpro. The accounts of Terxpro for the period ended December 31, 2006 (pending audit) shows a loss after tax of Rs.73.400 millions for the period and an accumulated loss of Rs. 124.900 millions. In light of the said structural changes and also (in line with the joint Venture agreement) of the Company not having assumed any other liability in respect of Terxpro the accounts of Terxpro are not being consolidated with the accounts of the Company for the purpose of preparing consolidated accounts. The Company has a right, if so approved by the Board at a later date, to subscribe to further equity in Terxpro and as a consequence thereof restore a "joint-control' status in a 24 month period; in such case the Company will examine resuming the consolidation of Terxpro accounts or as may be appropriate in the circumstances. The Company's interest in the said Terxpro is reported in these accounts as long term investments and stated at cost in view of the fact that Terxpro has satisfactorily developed and commenced production of the intended specialized BOPP Film products; in the circumstances any fall in prima-facie value is viewed as temporary and accordingly no provision for diminution in this investment is considered necessary.
|
CONTINGENT
LIABILITES: |
31.03.2007 (Rs.
in millions) |
|
Claims against
the Company, not acknowledged as debts |
0.250 |
|
Sales Tax,
Excise 6k Customs matters under appeal |
15.753 |
|
- Income tax
matters under appeal (Based on opinion received, the
Management is of the opinion that possibility of the above Contingent liabilities crystallising are remote) |
0.417 |
|
Estimated amount
of contracts remaining to be executed
on Capital Account (Net of Advances) |
7.141 |
|
Bills -discounted |
17.398 |
|
Unpaid portion
of subscribed Equity Capital in subsidiary |
4.750 |
Trade Reference:
·
Amit and Amit
·
Hind Packaging
·
Krishna CFC Box (Private) Limited
·
Marathwada Packaging Private Limited
·
Swastik Packaging and Allied Industries Private Limited
·
Alok Industries
·
Hindustan Laminators Private Limited
·
SCJ Plastics Limited
·
Sidhant Spirals Private Limited
·
Shri Tara Timber Works
FIXED ASSETS:
· Freehold Land
· Leasehold Land
· Building
· Plant and Machinery
· Vehicles
· Computers
· Equipment and Fittings
WEBSITE DETAILS:
Corporate Profile
Subject is a diversified multi-divisional, multi-locational company with
a strong commitment to the polymer processing industry. Established as a
separate entity as recently as 1998, the units comprising Subject have long
been in existence. Subject thus brings with it years of experience while
embodying a robust and youthful organization.
Subject forms an integral part of India's largest and most reputed Industrial
House with a global presence in manufacturing and trading activities - the
BIRLA Group, a conglomerate comprising of many divisions, each consisting of a
number of publicly-listed Companies and headed by a member of the Birla Family.
These companies, sharing a common ancestry dating back over 140 years, are
engaged in a broad spectrum of business activities and possess an acknowledged
track record of achievements in their respective fields.
Subject has a dedicated and highly committed work-force of well-trained
employees placed at various locations. Manufacturing at all units is carried
out by a team of qualified personnel under stringent quality standards. At the
company, continuous product development and improvement are thrust areas and
the underlying philosophy is to provide the highest level of satisfaction to
customers through a deep commitment to excellence in every field. To offer
consistently superior quality plastic products and cotton yarn, backed by
exceptional services, to exceed customer expectations enabling them:
Manufacturing
Units:
Manufacturing units of Subject have been structured into operating
divisions as under:
|
Divisions |
Activities |
|
BIAX |
» Biaxially
Oriented Polypropylene (BOPP) Films |
|
COEX |
|
|
Thermoforming
Unit: |
» Thermoformed Components |
|
Ranjangaon, |
|
|
THERMOSETS |
|
|
Terxpro
Films Pvt Ltd |
» Capacitor Films |
The Biax and Coex Division are principally Polymer Processors and “PLASTICS
EXTRUSION” forms the key technology determining their activities.
Within the wide definition of Extrusion, the Biax and Coex Divisions
have built up special skills and competencies in the specialised field of
Coextrusion with application in the manufacture of Oriented Films, Multi-layer
Plastic Sheets and Multi-layer Cast Plastic Films. Metallising and
thermoforming capabilities have been set up essentially as downstream
processing units for films and sheets respectively.
The Thermosets Division has been among the pioneers in the field of thermosetting and moulding materials. The activities of the division are focused around chemical compounds based on phenolics or formaldehydes.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources including
but not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist organization
or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.18 |
|
UK Pound |
1 |
Rs.79.25 |
|
Euro |
1 |
Rs.62.90 |
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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>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. |
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 |
|