MIRA
INFORM REPORT
|
Report Date : |
31.07.2008 |
IDENTIFICATION
DETAILS
|
Name : |
EXCEL CROP CARE
LIMITED |
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Formerly Known
As : |
West Coast Oxygen Limited |
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Registered Office : |
184-87, Swami
Vivekanand Road, Jogeshwari (West), Mumbai – 400 102, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
21.03.1964 |
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Com. Reg. No.: |
11-12878 |
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CIN No.: [Company
Identification No.] |
L74999MH1964PLC012878 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUME04609D |
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PAN No.: [Permanent
Account No.] |
AAACW3810D |
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Legal Form : |
A Public Limited
Liability Company. Company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
The company is
engaged in the business of agrochemicals comprising insecticides, herbicides,
fungicides, lumigants and rodenticides. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
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 5900000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an established
company having fine track. Directors are reported as experienced, respectable
and resourceful industrialists. Their trade relations are fair. Financial
position is good. Payments are correct and as per commitments. The company is
doing well. It can be regarded as a promising business partner in a medium to
long run. |
INFORMATION PARTED
BY
|
Name : |
Mr. Shakti C Mehta |
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Designation : |
Account Manager |
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Date : |
29.07.2008 |
LOCATIONS
|
Registered
Office/ Head Office : |
184-87, Swami
Vivekanand Road, Jogeshwari (West), Mumbai – 400 102, Maharashtra, India |
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Tel. No.: |
91-22-66464200 /
56464200 |
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Fax No.: |
91-22-26783657 |
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E-Mail : |
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Website : |
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Corporate
Office : |
Plot No. B/ 5,
Gaiwadi Industrial Estate, Goregaon (West), Mumbai - 400 062, Maharashtra,
India |
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Tel. No.: |
91-22-28713031 /
28713032 / 28713033 / 2871 3034 / 28713035 / 66122200 |
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Fax No.: |
91-22-28713037/
28712523 |
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E-Mail : |
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Manufacturing
Units / Factories : |
Located at: ·
6/2,
Ruvapari Road, Bhavnagar – 364 005. ·
Kaira Gajod
Highway, Gajod, Kutch ·
Plot No. 60,
B, Nanji Industrial Estate, Kharadpada, Silvassa – 396 230, Union Territory
of Dadra and Nagar Haveli |
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Windmills : |
Located at: ·
Plot No.
A/2, Village Dhank, Taluka Upleta, District Rajkot. ·
Survey No.
160, Village Navadra, Taluka Kalyanpur, District Jamnagar ·
Survey No.
16/1, Jodhapar, District Jamnagar |
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Zonal Offices:
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Located at: ·
Indore ·
Ahmedabad ·
Delhi ·
Kolkata ·
Secunderabad
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Branches : |
Located at: Akola, Cuttack,
Gulbarga, Guwahati, Hissar, Hubli, Jaipur, Kottayam, Madurai, Punjab, Patna,
Pune, Raipur, Ranchi, Indore, Siliguri.
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International
Office: |
Excel N. V. |
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Tel. No.: |
0032-3-5425722 |
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Fax No.: |
0032-3-2323735/2398269 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. A C Shroff |
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Designation : |
Chairman |
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Name : |
Mr. Deepak K.
Shroff |
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Designation : |
Managing Director
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|
03.02.1960 |
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Qualification : |
D.C.E., Cert. in M.E.P. |
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Date of
Appointment : |
01.09.2003 |
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Other
Directorships : |
·
Excel
Industries Limited ·
Agrocel
Industries Limited ·
Kamaljyot
Investments Limited ·
Shroffs
Engineering Limited ·
Transpek
Industry Limited ·
Excel
Industries (Europe) N.V. ·
Paul
Chemicals Limited ·
Hyderabad Chemicals
Limited ·
Hyderabad
Chemicals Products Limited ·
Kutch Crop
Services Limited ·
Transmetal
Limited ·
Oasis
Agritech Limited |
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|
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Name : |
Mr. Prakash K
Shroff |
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Designation : |
Executive
Director |
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Date of Birth/Age : |
18.03.1946 |
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Qualification : |
D.E.E., Cert. in
M.E.P. |
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Date of Appointment : |
01.07.1985 |
|
Other Directorships : |
·
Transmetal
Limited ·
Shroffs
Engineering Limited ·
Parul
Chemicals Limited ·
ECCL
Investments and Finance Limited ·
Good Rasayan
Limited |
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|
Name : |
Mr. J R Naik |
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Designation : |
Director |
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Name : |
Mr. M L Shah (up
to 19.01.2008) |
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Designation : |
Director |
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Name : |
Mr. Mukul G Asher
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Designation : |
Director |
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Date of Birth/Age : |
17.12.1943 |
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Qualification : |
B.A. (Hons.)
M.A., Ph.D. |
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Date of Appointment : |
03.09.2003 |
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|
Name : |
Mr. Sandeep
Junnarkar |
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Designation : |
Director |
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Date of Birth/Age : |
02.07.1951 |
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Qualification : |
B. Sc. (Hons),
LL. B. |
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Date of Appointment : |
03.09.2003 |
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Other Directorships : |
·
Everest
Industries Limited ·
IL and FS
Infrastructure Development Corporation Limited ·
Indian
Petrochemicals Corporation Limited ·
Jai
Corporation Limited ·
Reliance
Industrial Infrastructure Limited ·
Reliance Industrial
Investments and Holdings Limited ·
Reliance
ports and Terminals Limited ·
Sterlite
Industries India Limited ·
Sunshield
Chemicals Limited ·
Tilaknagar
Industries Limited |
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|
Name : |
Mr. B V Bhargava |
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Designation : |
Director |
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Date of Birth/Age : |
16.04.1936 |
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Qualification : |
M. Com., LL. B. |
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Date of Appointment : |
29.10.2003 |
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Other Directorships : |
·
CRISIL
Limited ·
Grasim
Industries Limited ·
ICICI
Lombard General Insurance Company Limited ·
IREVNA Research
Services Limited ·
J K Lakshmi
Cement Limited ·
National
Commodity and Derivatives Exchange Limited ·
Raymond
Limited ·
SI Group –
India Limited ·
Supreme
Industries Limited ·
L and T
Infrastructure Finance Company Limited |
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|
Name : |
Mr. Douglas J
Rathbone |
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Designation : |
Director |
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Date of Birth/Age : |
03.11.1945 |
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Qualification : |
B. Com. (Melb.),
ARMIT (Chem. Eng.) and Diploma in E. D. |
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Date of Appointment : |
31.03.2004 |
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Other Directorships : |
Nufarm Limited |
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Name : |
Mr. Kevin Martin |
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Designation : |
Director |
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Name : |
Mr. Sharad L
Patel |
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Designation : |
Director |
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Date of Birth/Age : |
25.11.1933 |
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Qualification : |
Master’s degree in
Mechanical Engineering from the University of Michigan, Ann Arbor, USA |
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Date of Appointment : |
28.12.2004 |
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Name : |
Mr. Vinayak B
Buch |
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Designation : |
Director (w.e.f.
25.01.2006) |
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Name : |
Mr. L.
Rajagopalan |
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Designation : |
Alternate
Director of Dr. Mukul G Asher |
KEY EXECUTIVES
|
Name : |
Mr. Pravin D
Desai |
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Designation : |
Vice President
(Finance and Accounts) and Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.06.2008
|
Category of Shareholders |
No.
of Shares |
%
of Holding |
|
Shareholding of
Promoter and Promoter Group2 |
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Indian |
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Individuals/ Hindu Undivided Family |
431179 |
3.92 |
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Bodies Corporate |
1621368 |
14.73 |
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Sub Total(A)(1) |
2052547 |
18.65 |
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Foreign |
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Individuals (Non-Residents Individuals/
Foreign Individuals) |
81830 |
0.74 |
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Sub Total(A)(2) |
81830 |
0.74 |
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Total
Shareholding of Promoter and
Promoter Group (A)= (A)(1)+(A)(2) |
2134377 |
19.39 |
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Public
shareholding |
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Institutions |
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Mutual Funds/ UTI |
950 |
0.01 |
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Financial Institutions / Banks |
16390 |
0.15 |
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Insurance Companies |
1468302 |
13.34 |
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Foreign Institutional Investors/ Foreign Banks |
181834 |
1.65 |
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Sub-Total (B)(1) |
1667476 |
15.15 |
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Non-institutions |
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Bodies Corporate |
512417 |
4.66 |
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Individuals |
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Individuals -i. Individual shareholders
holding nominal share capital up to Rs 0.100 million |
4432616 |
40.28 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 million |
598145 |
5.43 |
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Non-Resident Indians (NRIs) |
43599 |
0.40 |
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Nufarm Limited – Foreign Company |
1617000 |
14.69 |
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Sub-Total (B)(2) |
7203777 |
65.46 |
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Total Public
Shareholding (B)= (B)(1)+(B)(2) |
8871253 |
80.61 |
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TOTAL (A)+(B) |
11005630 |
100.00 |
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GRAND TOTAL
(A)+(B)+(C) |
11005630 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
The Company is
engaged in the business of agrochemicals comprising insecticides, herbicides,
fungicides, lumigants and rodenticides. |
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Products : |
·
Insecticides ·
Herbicides ·
Fungicides ·
Lumigants ·
Rodenticides
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Exports : |
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Countries : |
·
Brazil ·
Europe ·
Argentina |
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Imports : |
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Products : |
Raw-Material |
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Countries : |
·
China ·
USA |
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Terms : |
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Selling : |
90 days L/C Advance |
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Purchasing : |
L/C – 75 days / L/C Advance |
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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|
|
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Pesticides |
Tonnes |
16303 |
14900 |
12461 |
|
Pesticides Intermediates |
Tonnes |
*5000 |
5000 |
3 |
Notes:
·
Installed Capacity is as certified by the
Managing Director on which the Auditors have relied, being a technical matter.
·
Production includes quantities produced for
internal consumption.
·
Includes capacity as acknowledged by
Directorate General of Technical Development/Secretariat for Industrial
Approvals, and capacity intimated/being intimated to Secretariat for Industrial
Approvals, for acknowledgement.
·
Production excludes formulations produced out
of captive/bought out Technical grade materials.
GENERAL
INFORMATION
|
Suppliers : |
·
Aryan Paper
Containers ·
Dimple Drums
and Barrels Limited ·
Hindcomp
Private Limited ·
Mullackal
Polymers ·
Unitop
Chemicals Private Limited ·
Bharat Tin
Works ·
Packaging
Remedies ·
Omni Cans
and Printers Private Limited |
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|
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|
Customers : |
·
Wholesalers ·
End Users |
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No. of Employees : |
1239 |
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Bankers : |
·
Bank of
India, Andheri (W) ·
Syndicate
Bank, Industrial Finance ·
State Bank
of India, Commercial Branch ·
Citibank –
Bandra Kurla Barnch ·
Axis Bank
Limited ·
Standard Chartered
Bank, Fort Branch ·
ICICI Bank -
Bandra Kurla Barnch |
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Facilities : |
Secured Loans (Rs. in millions)
Notes: Loans from Banks on Cash Credit and Working Capital Demand Loan / Term
Loan Accounts are secured by way of hypothecation of all tangible movable
assets, both present and future, including stock of raw materials, finished
goods, goods-in-process, stores, book debts etc. and by a charge on the
immovable property situated at Bhavnagar. Of the Working Capital Demand Loans/Term Loans and loans in the form
of Cash Credit Limits, loans aggregating to Rs.519.900 millions (Previous Year: Rs.378.767 millions)
are further secured by Corporate Guarantee given by Excel Industries Limited. Term Loans from ICICI Bank Limited for purchase of vehicles amounting
to Rs. 17.635 millions (Previous
Year: Rs.15.675 millions) is secured by an exclusive charge by way of
hypothecation of cars purchased under the said scheme. Unsecured Loans (Rs. in millions)
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
S V Ghatalia and Associates
Chartered
Accountants |
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Joint Venture : |
Multichem Industries (a Partnership Firm) |
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Subsidiaries : |
·
Excel Industries (Australia) Pty. Limited ·
Excel Industries (Europe) N. V. ·
ECCL Investments and Finance Limited |
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Associates : |
Aimco Pesticides Limited |
CAPITAL STRUCTURE
(As on
31.03.2008) :-
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
12000000 |
Equity Shares |
Rs. 5/-Each |
Rs. 60.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
11005630 |
Equity Shares |
Rs. 5/-Each |
Rs. 55.028 millions |
Note:
Of the above,
a.
92000 Equity Shares of Rs. 5/- each fully paid-up have been issued by
way of Bonus Shares by capitalisation
of the surplus in the Profit and Loss Account.
b.
10905630 Equity Shares of Rs. 5/- each fully paid-up have been issued
pursuant to a Scheme of Arrangement, without payments being received in cash.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
55.028 |
55.028 |
55.028 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1125.282 |
973.793 |
811.128 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1180.310 |
1028.821 |
866.156 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
733.031 |
173.807 |
306.217 |
|
|
2] Unsecured Loans |
508.634 |
814.162 |
567.590 |
|
|
TOTAL BORROWING |
1241.665 |
987.969 |
873.807 |
|
|
DEFERRED TAX LIABILITIES |
124.545 |
131.213 |
108.566 |
|
|
Deferred Government Grants |
6.137 |
6.869 |
7.601 |
|
|
|
|
|
|
|
|
TOTAL |
2552.657 |
2154.872 |
1886.130 |
|
|
|
|
|
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|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
884.862 |
783.533 |
701.769 |
|
|
Capital work-in-progress |
9.722 |
12.083 |
27.118 |
|
|
|
|
|
|
|
|
INTANGIBLE ASSETS |
12.360 |
0.000 |
0.000 |
|
|
INVESTMENT |
63.357 |
12.361 |
7.740 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
931.389
|
678.919
|
624.154 |
|
|
Sundry Debtors |
1135.656
|
897.248
|
776.517 |
|
|
Cash & Bank Balances |
132.633
|
152.793
|
101.559 |
|
|
Other Current Assets |
72.886
|
54.302
|
39.791 |
|
|
Loans & Advances |
403.005
|
273.951
|
183.352 |
|
Total
Current Assets |
2675.569
|
2057.213
|
1725.373 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
993.775
|
724.753
|
615.262 |
|
|
Provisions |
99.438
|
61.555
|
55.197 |
|
Total
Current Liabilities |
1093.213
|
786.308
|
670.459 |
|
|
Net Current Assets |
1582.356
|
1270.905
|
1054.914 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
4.517 |
16.243 |
|
|
|
|
|
|
|
|
TOTAL |
2552.657 |
2154.872 |
1886.130 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
5196.973 |
4237.929 |
3875.324 |
|
|
Other Income |
82.916 |
58.289 |
66.503 |
|
|
Total Income |
5279.889 |
4296.218 |
3941.827 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
376.367 |
294.989 |
341.004 |
|
|
Provision for Taxation |
129.388 |
110.047 |
123.252 |
|
|
Profit/(Loss) After Tax |
246.979 |
184.942 |
217.752 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
1763.455 |
1411.397 |
1155.302 |
|
Total Earnings |
1763.455 |
1411.397 |
1155.302 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
1297.657 |
916.627 |
934.448 |
|
|
Components and Spare Parts |
0.783 |
0.000 |
0.000 |
|
|
Capital Goods |
17.601 |
0.378 |
6.138 |
|
|
Packing Materials |
3.761 |
0.000 |
0.000 |
|
|
Others |
0.000 |
2.928 |
0.000 |
|
Total Imports |
1319.802 |
919.933 |
940.586 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
4810.857 |
3819.961 |
3440.068 |
|
|
Interest |
99.261 |
95.858 |
84.077 |
|
|
Intangible Assets |
11.236 |
0.000 |
0.000 |
|
|
Increase/(Decrease) in Finished Goods |
(93.916) |
0.000 |
0.000 |
|
|
Depreciation & Amortization |
71.567 |
63.693 |
53.459 |
|
|
Expenses |
4.517 |
0.000 |
0.000 |
|
|
Other Expenditure |
0.000 |
21.717 |
23.219 |
|
Total Expenditure |
4903.522 |
4001.229 |
3600.823 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2008 1st
Quarter |
|
Sales Turnover |
2179.000 |
|
Other Income |
10.100 |
|
Total Income |
2189.100 |
|
Total Expenditure |
1850.900 |
|
Operating Profit |
338.200 |
|
Interest |
30.500 |
|
Gross Profit |
307.700 |
|
Depreciation |
21.900 |
|
Tax |
86.200 |
|
Reported PAT |
187.700 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt Equity Ratio |
1.11 |
0.96 |
1.09 |
|
Long Term Debt Equity Ratio |
0.02 |
0.07 |
0.17 |
|
Current Ratio |
1.09 |
1.10 |
1.13 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
4.14 |
3.65 |
3.86 |
|
Inventory |
6.91 |
6.76 |
6.35 |
|
Debtors |
4.91 |
5.26 |
5.17 |
|
Interest Cover Ratio |
4.66 |
4.07 |
5.05 |
|
Operating Profit Margin (%) |
9.81 |
10.54 |
11.60 |
|
Profit Before Interest and Tax Margin (%) |
8.32 |
8.87 |
10.16 |
|
Cash Profit Margin (%) |
5.7 |
5.87 |
6.65 |
|
Adjusted Net Profit Margin (%) |
4.21 |
4.20 |
5.21 |
|
Return on Capital Employed (%) |
19.76 |
20.66 |
25.12 |
|
Return on Net Worth (%) |
21.08 |
19.08 |
26.49 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject [ formerly West Coast Oxygen Limited ] is engaged in
manufacture and trading of Pesticides. The agri business of Excel Industries
Ltd was transferred to and vested with ECCL as a going concern w.e.f April 1,
2002.
It may be recalled that prior to the scheme of arrangement, Subject was
operating as a wholly owned subsidiary of EIL under its earlier name West Coast
Oxygen (WCOL). Hence this is the 39th AGM of the company. The name was changed
from WCOL to Company with effect from 30th January 2003. Further as per the
scheme of arrangement Subject has issued to the shareholders of EIL one equity
share of Rs 5/- each fully paid-up for every one equity share of Rs 5/- each
held by them in EIL. The paid-up equity capital after completion of entire
demerger process stood at Rs 55.000 millions.
The company's product are being exported to most of the countries in the world.
The new market recently added by the company are Latin America and
Africa.
The company has taken various initiatives on development of new value added
branded formulations in the existing molecules and new molecules in the area of
Herbicides and Acaricides. In terms of markets, the company has already made
inroads indo new geographics particularly Latin America and West Africa. The
company has been making investments in data generation and registrations for
the domestic and international markets. The company has been putting special
emphasis on total agriculture focussing on solutions rather than merely selling
products, and encompassing the entire value chain from farmers to ultimate
consumers and the processors and intermediates in between.
OPERATIONS:
During the year, the net sales increased from Rs. 4049.600 millions in the
previous year to Rs.5096.400 millions growth of about 26%. Domestic sales
increased from Rs. 2582.800 millions in the previous year to Rs.3307.600
millions in the year registering a growth of 28% whereas the export turnover
rose by 22% from Rs. 1466.800 millions to Rs.1788.800 millions.
The Company's profit before tax in the year is Rs. 376.400 millions as compared
to Rs. 295.000 millions (including the income of exceptional nature of Rs.
63.500 millions) in the previous year.
NEW
PROJECTS/EXPANSIONS/IMPROVEMENTS:
During the year, the Company implemented the project for backward integration
for Glyphosate Technical manufacturing facility at Bhavnagar. The Company also
set up Glyphosate Formulation Plant at Bhavnagar to meet the increasing export
and institutional customer requirements. The Company also improved productivity
of two major products through modernisation and de-bottlenecking process.
As a part of the Company's efforts to help farmers in the area of soil health
management, a Soil Health Research Laboratory has been established in
Bhavnagar. This state of the art research facility is aimed at research in the
areas of soil health, soil rejuvenation and soil nutrition with a view to help
farmers improve farm productivity.
The Company continues its efforts at energy conservation and energy cost
reduction. In recognition of its energy conservation efforts, the Company's
Bhavnagar Plant was awarded prestigious Certificate of Merit in the Chemicals
Sector for the National Energy Conservation Award - 2007 - instituted by the
Ministry of Power. Government of India.
OUTLOOK:
The year was highly dynamic and eventful for the Agrochemicals Industry.
Various pull and pressure factors, which influence industry dynamics, witnessed
quick and high magnitude changes in the course of the financial year.
Agriculture sector in India continues to receive focussed attention both from
the Government and the Private Sector. It offers immense potential for common
public good of the rural population as far as Governments are concerned. For
the private sector, it offers immense growth prospects. The farmers are receiving
attractive minimum support prices and firm open market prices for their
produce. The last Union Budget lays special emphasis on growth of farming and
improving the economic condition of the farming community through various
measures with large financial outlays. The recent worldwide spurt in food grain
prices and food grain shortages have brought farming into sharp focus. The
agriculture sector is expected to receive due importance, funding and growth
impetus. With forecast of near-normal monsoon in the current year, the
short-term outlook for the agrochemicals industry and the Company appears
reasonably good. Exports continue to remain focus area of growth for the
Company. The Company continues to make efforts to strengthen its presence in
the existing export markets, and penetrate new markets.
SAFETY, HEALTH AND ENVIRONMENT:
The Company continues to maintain its ISO-14000 and OHSAS:18000 Certificates
for Occupational Health and Safety Management Systems for the Bhavnagar Plant.
The Company has initiated ISO-14000 Environment Systems Certification process
for its other two plants at Gajod and Silvassa. The Company obtained the
coveted Social Accountability Management System SA - 8000 Certification during
the year signifying its commitment to the society at large in its operations
and business practices.
QUALITY:
The Company continues to maintain ISO:9000:2000 Quality Management System at
all its three manufacturing sites at Bhavnagar, Gajod and Silvassa. The Company
continues to maintain and adhere to the applicable national and international
quality standards for its products and continues to enjoy the reputation of a
consistent quality supplier. The Company's Quality Management System is
continuously updated to meet with ever changing domestic and export market
requirements and expectations.
SUBSIDIARIES:
Pursuant to Section 212 of the Companies Act, 1956,
the Accounts of Excel Industries (Australia) Pty Limited., Excel Industries
(Europe) N.V., and ECCL Investments and Finance Limited, subsidiaries of the
Company, are annexed.
MANAGEMENT
DISCUSSION AND ANALYSIS:
Industry Structure and Developments:
The Company is engaged in the business of
agrochemicals comprising insecticides, weedicides (herbicides), fungicides, fumigants
and rodenticides. The Company has taken over from Excel Industries Limited the
business of marketing Soil Enricher, Bio-Pesticides and Plant Growth Promoters.
The Company has also entered into seeds business on a small scale and started
seeds distribution in a few States.
Among the agrochemicals, insecticides have dominated consumption pattern in
India. However, in recent years, consumption of weedicides has been increasing
significantly and offers a good growth potential. Cotton crop used to be the
single largest consumer of agrochemicals in India. However, with the advent of
genetically modified cotton crop, it is no longer a major consumer of
insecticides. Rice, wheat, soya, plantation crops, fruits and vegetables are
the other major consumers of agrochemicals in India.
The fortunes of the agrochemicals industry are directly linked to agriculture.
With the slow pace of growth of agriculture in India, the agrochemicals
industry too is growing at a low rate.
The industry comprises of diverse players ranging from small and medium ones
dealing in generic molecules to large multinationals with high priced patented
products.
The industry has built up large capacities and has many manufacturers,
especially in formulation business. The industry has a fairly high level of
competition. Several small and medium producers are under immense pressure due
to competition and the steadily rising raw materials costs which are not fully
passed on to the consumers. The industry is passing through a consolidation
phase and is undergoing transformation in terms of products, players, crop
focus and trade practices. Due to the seasonal nature of the business and the
uncertainties of time and adequacy of rains, the Industry is required to carry
a large inventory for long periods.
The supply of high quality products at competitive prices, development of new
products/formulations and their registration, particularly of generic products,
are emerging as key success factors.
The domestic industry is continuously striving to increase exports by providing
quality products at competitive prices with a view to ensure better utilisation
of capacities as also to hedge against uncertain climatic conditions within the
country. Over the years, India has emerged as a major supplier of agrochemicals
in the international market. However, globally the agrochemicals business is
not growing much and this leads to intense competition, especially in generic
molecules segment. dropping prices and declining margins.
Opportunities and Threats:
Recently, the impact of food grain shortages and food
inflation is being felt all across the world and focus is back to farming. The
Hon'ble Finance Minister, in the course of his last budget, announced several
measures and initiatives to improve agricultural economy. He also announced a
scheme for waiver of farm loans. Private sector also visualises good growth
potential for investment in agriculture and agro-based businesses. Attractive
minimum support prices have been announced for many farm produce. The open
market prices of several crops are also fairly remunerative. All these factors
point to reasonably good growth prospects for agriculture and by extension, for
the agrochemicals industry. On the whole, the consumption of agrochemicals in
India is fairly low and underlines its growth potential.
Genetically modified cotton crop now accounts for a lion's share of the cotton
acreage in India. Introduction of genetically modified cotton has adversely
impacted the industry as it needs much lower insecticide dosages because of
in-built immunity against bollworm - the major cotton pest. Of late, in India,
genetically modified cotton crop is witnessing attack by other pests. This has
opened up opportunity for some different variety of insecticides. Also
genetically modified crops offer scope for growth in consumptions of
weedicides.
The Company, with its vast experience in pest control practices and wide
product range, has been taking various steps like launching new products and
formulations, combination of products, improving processes to enhance yield and
quality and reducing costs in order to maintain its lead in the industry and
stay competitive. The Company has also introduced a formulation for weed
control which is gaining new markets and customers. The Company is also finding
application of its products for the newer crops through field trials and this
is helping it to widen coverage for its existing products to more crops.
In the current year, the Company has begun to market bio products such as Soil
Enricher, Bio-Pesticides and Plant Growth Promoters. These products, though
small in market size, have niche market position. This product group has
enriched the Company's product range and is useful in the area of plant and
soil nutrition, organic farming and soil health management the areas in which
the Company is making intensive efforts.
The Company has set up a state of the art soil health research laboratory to
develop products for soil rejuvenation and nutrition. The Company has also
taken small but firm steps for establishing seeds business.
The Company has been working closely with farmers through its programmes 'Excel
& Me' and 'Excel Kisan Mitra' and provides comprehensive package of
products, services, knowledge and solutions to farmers.
The export market continues to offer good growth opportunities to the Company.
The Company has been strengthening its presence in the overseas market by
promoting existing and new products, especially branded products, protecting
its existing product registrations and making investment in new product
registrations. Recently, the Company obtained product registrations for markets
in several SAARC, East Asian countries and China in Asia and some countries in
Africa which open up new markets for it. During the year the Company set up a
Representative Office in China as a part of its strategy to explore and develop
Chinese market for its products.
Segment-wise performance and
outlook:
The Company's domestic sales increased from Rs. 2582.800
Millions in the previous year to Rs. 3307.6 Millions in the year. Exports also
grew from Rs.1466.800 Millions in the previous year to Rs.1788.8 Millions in
the year.
Share of various product classes in the Company's sales turnover in
2007-08:
Fungicide (4.1%)Fumigants/Rodenticides (5.7%)Weedicides (23.0%)Insecticides
(64.1%)Other (3.1%)
Of late, the distribution channel in the industry has been playing safe-placing
orders closer to season and consumption and thereby avoiding maintaining long
inventory. The practice of making advances against future supplies also is on
wane. These trends necessitate the manufacturers to invest larger capital in
stocks.
With increased emphasis on agriculture in public policies and near normal
monsoon forecast, the current year outlook for the industry and the Company
appears reasonably good.
Over the years, the Company has been making sustained efforts to increase share
of branded formulation products in its sales turnover. Branded products give
long term advantages and consolidate market position. The branded products,
however, need higher investment in inventories and book debts.
The initiatives taken by the Company in promoting Integrated Pest Management
(IPM) and Integrated Crop Management (ICM) and its investment in brand
promotion, developing closer ties with farmers and corporate image building are
expected to help it in maintaining leading position in the industry. The
Company's recent intiatives in Soil health management are expected to bring it
closer to the farmers.
Risks and Concerns
:
In the last two decades, Indian economy has posted
spectacular growth. However, agriculture, which supports about 7000 of the
population, accounts for less than 25% of the GDP The rate of agriculture growth
declined to 2.6% in 2007-08 from 3.8% in 2006-07. This is a cause for concern
for the agrochemicals industry.
The agrochemical industry is directly affected by climatic conditions, both
within the country as well as in the importing countries. Again, different
climatic conditions throw up different and complex needs and requirements and
the demand for different molecules and products changes accordingly. All these
factors point to a high degree of uncertainties.
Large capacity built up in the industry leading to skewed demand - supply
position and significant imports are resulting in high competition, ultimately
leading to undercutting of prices and gradually falling margins, high credit
periods and receivables and the attendant costs and risks.
China is the virtual sole manufacturer and supplier of key raw materials and
intermediates for the global agrochemicals industry. In the past one year, a
large number of chemical plants have been closed in China owing to
environmental issues. Owing to this, supply of raw materials and intermediates
to the agrochemicals industry has been disrupted. The prices of these materials
are undergoing frequent and wild fluctuations. This volatility in raw materials
availability and prices is causing a great deal of worry to the industry and
has become a source of destability.
Availability of cheap spurious products in the market and the negative image
created in the public mind through misinformation campaign about the adverse
impact of pesticides on food, water, environment etc., continues to be a cause
of concern for the industry.
The Company is taking necessary measures to safeguard the environment in its
area of operations and in educating dealers, farmers and users, in safe and
correct use of pesticides. The Company is also working closely with some
voluntary agencies in addressing the issues relating to soil and water
management, which are of prime importance to the farmers and the nation.
Some of the developing countries in Asia, Africa and South America offer good
export opportunities with attractive returns. However, exports to these
countries also expose the Company to higher credit and political risks.
In the past couple of years, US Dollar has steadily and significantly
depreciated against Indian Rupee and other currencies.
The Company is a net foreign exchange earner and almost all its import and
export transactions are denominated in US Dollars. Like other exporters, this
is adversely affecting the profitability of the Company.
Financial Performance
and Analysis:
The net sales increased from Rs. 4049.600 Millions in
the previous year to Rs. 5096.400 Millions in the year registering a growth of
about 26%. The profit before tax increased from Rs. 295.000 Millions (including
income of exceptional nature of Rs. 63.500 Millions) in the previous year to
Rs. 376.400 Millions in the year.
Fixed
Assets
The Company’s Fixed and Intangible Assets of important value includes:
·
Freehold Land
·
Leasehold Land
·
Buildings
·
Plant and
Machinery
·
Electrical
Installations
·
Laboratory
Equipments
·
Furniture and
Fixtures and Office Equipments
·
Vehicles
·
Technical
Books
Intangible Assets
·
Data
Registration Expenses
·
Data
Compensation Charges
It is in trade terms with:
·
Agrocel
Industries Limited
·
Anshul Agencies
·
Anshul
Chemicals Limited
·
C.C. Shrofl
Research Institute
·
C.C. Shroff
Self Help Centre
·
Divakar
Chemicals Limited
·
Excel
Industries Limited
·
Hyderabad
Chemical Supplies Limited
·
Hyderabad
Chemical Products Limited
·
Parul
Chemicals Limited
·
Parul
Industries
·
Shroff
Engineering Limited
·
Shroff
Foundation Trust
·
Shrujan
·
Transmetal
Limited
·
Transpek
Industry Limited
·
Vivekanand
Research and Training Institute
Contingent Liabilities
(Rs in millions)
|
Particulars |
31.03.2008 |
|
Disputed excise-duty liability |
0.277 |
|
Disputed service-tax liability |
3.445 |
|
Disputed Income-tax liability |
9.266 |
|
Disputed Sales-tax liability |
1.302 |
|
Guarantees given by Company's bankers on behalf of the Company to
third parties |
2.976 |
|
(i) Guarantees given by Company in respect of loans taken by Excel
Industries Limited (ii) Balance of loans outstanding as at 31st March |
750.000 509.766 |
|
Liability in respect of employee(s) disputes |
Amount unascertainable |
|
Claims against the Company not acknowledged as debts |
0.270 |
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is or
was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.43.17 |
|
UK Pound |
1 |
Rs.86.26 |
|
Euro |
1 |
Rs.68.78 |
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 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--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 |
|
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 |
|