MIRA
INFORM REPORT
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Report Date : |
26.12.2008 |
IDENTIFICATION DETAILS
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Name : |
P I INDUSTRIES LIMITED |
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Registered Office : |
Post Box No. 20, |
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Country : |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
31.12.1946 |
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Com. Reg. No.: |
17-469 |
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CIN No.: [Company
Identification No.] |
L24211RJ1946PLC000469 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
JDHP01697D |
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Legal Form : |
Public limited
liability company. The company's
shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and
Marketing of Pesticides, Industrial Chemicals and Polymers, 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 3500000 |
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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 a
well-established and reputed company whose profit margin is under severe pressure.
General Financial position is satisfactory. Payments are reported as correct
and as per commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office : |
Post Box No. 20, |
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Tel. No.: |
91-294-2492451-55 |
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Fax No.: |
91-294-2491946 /
2491384 |
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E-Mail : |
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Website : |
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Corporate Office : |
4th
Floor, Tower – A, |
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Tel. No.: |
91-124-5159000 |
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Fax No.: |
91-124-5081247 |
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Factory : |
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Tel. No.: |
91-124-4159000 |
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Fax No.: |
91-124-4081247 |
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Plants : |
·
Post
Box No. 20, Tel. 91-294-2492451-55 Fax. 91-294-2491946 Telex. 0335-202-COMP IN ·
Plot
No. 237, GIDC, Panoli, Ankleshwar, Tel. No. 91-2646-272105/399 Fax. No.: 91-2646-272313 ·
Lane
IV, |
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Regional
Offices : |
Located at :- ·
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Kolkata, ·
Jalandhar, ·
·
·
Ahmedabad, |
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Branches : |
Located at:- ·
·
·
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DIRECTORS
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Name : |
Mr. Salil Singhal
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Designation : |
Chairman and
Managing Director |
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Address : |
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E-Mail: |
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Date of
Birth/Age : |
21.08.1946 |
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Date of
Appointment : |
03.12.1984 |
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Name : |
Mr. Mayank
Singhal |
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Designation : |
Joint Managing
Director |
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Address : |
P P Singhal Marg,
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E-Mail: |
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Date of
Birth/Age : |
03.04.1973 |
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Date of
Appointment : |
28.09.1998 |
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Name : |
Mr. Gautam
Ramanlal Divan |
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Designation : |
Director |
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Address : |
134, Mittal
Towers, Nariman Point, Mumbai – 400 021, |
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Date of
Birth/Age : |
22.07.1940 |
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Date of Appointment
: |
17.02.1998 |
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Name : |
Mr. Arvind
Singhal |
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Designation : |
Director |
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Address : |
P P Singhal Marg,
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Date of
Birth/Age : |
29.11.1947 |
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Date of
Appointment : |
03.12.1984 |
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Name : |
Mr. Pradhuman
Natvarlal Shah |
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Designation : |
Director |
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Address : |
Maker Bhawan No.
2, 18 new Marine Lines, Mumbai – 400 020, |
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Date of
Birth/Age : |
01.01.1929 |
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Date of
Appointment : |
07.09.1990 |
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Name : |
Mr. Amiya Kumar
Mukherjee |
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Designation : |
Director |
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Address : |
Bunglow No. 20,
Amrakadamb Co-operative Housing Society Limited, Ramdev Nagar, |
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Date of
Birth/Age : |
11.02.1929 |
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Date of Appointment
: |
12.03.1993 |
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Date of
Ceasing: |
30.09.2005 |
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Name : |
Mr. Satya Prakash
Vishnoi |
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Designation : |
Director |
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Address : |
C 9/9106 Vasant
Kunj, |
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Date of
Birth/Age : |
23.11.1934 |
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Date of Appointment
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29.01.2004 |
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Name : |
Mr. Anurag Surana
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Designation : |
Whole Time
Director |
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Address : |
Ameya Plot No. 1
/ 2, B/H Sagar Darshan Apartment, Devali, |
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E-Mail: |
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Date of
Birth/Age : |
22.01.1965 |
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Date of
Appointment : |
30.09.1998 |
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Name : |
Mr. Yatin Ajitrai
Mankad |
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Designation : |
Nominee Director
of IDBI Limited |
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Address : |
IDBI Ahmedabad
Branch, IDBI Complex, Near |
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Date of
Birth/Age : |
22.04.1957 |
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Date of
Appointment : |
08.04.2004 |
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Name : |
Mr. G G Agarwal
(Doctor) |
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Designation : |
Director – Finance
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Name : |
Mr. Junichi
Nakano |
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Designation : |
Whole-Time
Director |
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Name : |
Mr. Narayan K
Seshadri |
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Designation : |
Director |
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Name : |
Mr. Raj Kaul |
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Designation : |
Additional
Director |
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Name : |
Mr. Sukhdev
Nayyar |
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Designation : |
Additional
Director |
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KEY EXECUTIVES
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Name : |
Mr. Sanjay Kumar
Tiwari |
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Designation : |
Company Secretary
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Address : |
31C, CPWD
Complex, Vasant Vihar, |
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E-Mail: |
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Date of
Birth/Age : |
11.09.1973 |
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Date of
Appointment : |
20.12.2004 |
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Name : |
Mrs. Sujata
Sharma |
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Designation : |
Secretary |
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Address : |
D – 650,
Saraswati Vihar, |
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Date of
Birth/Age : |
22.05.1965 |
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Date of
Appointment : |
24.04.2007 |
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Name : |
Ms. Payal M Puri |
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Designation : |
Company Secretary
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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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Overseas
Corporate Bodies |
457400 |
12.91 |
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Promoters |
2657579 |
74.99 |
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Others |
428775 |
12.10 |
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TOTAL |
3543754 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and
Marketing of Pesticides, Industrial Chemicals and Polymers, etc. |
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Products : |
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Exports : |
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Countries : |
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Imports : |
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Countries : |
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Terms : |
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Purchasing : |
L/C, D/A and D/P
(90 days) |
PRODUCTION STATUS
(As on 31.03.2007)
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Particulars |
Unit |
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Actual
Production |
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Chemical including by products |
Tones |
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38537 |
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Others |
Tones |
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3823 |
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Total |
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42360 |
GENERAL INFORMATION
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No. of Employees : |
Around 800 |
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Bankers : |
·
State
Bank of ·
State
Bank of ·
State
Bank of ·
ICICI
Bank Limited, 9 A, ·
Canara
Bank, ·
Canara
Bank, ·
Bank
of Rajasthan Limited, ·
Axis
Bank Limited, 151-152, Chetak Marg, |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
B. D.
Gargieya and Company Chartered
Accountants, |
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Address : |
Bank of |
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Name : |
S. S. Kothari and
Company Chartered
Accountants |
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Address : |
146 – 149, Tribhuvan
Complex, Ishwar Nagar, Mathura Road, New Delhi – 110065, India |
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Cost
Auditors : |
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Name
: |
K. G. Goyal and
Company Chartered
Accountants, |
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Address: |
8, Chitra Gupta
Nagar, Jyoti Nagar Railway Crossing, Jaipur – 302 005, |
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Associates : |
·
Wolkem
Limited It exports Wolkastonite to ·
Secure
Meters Limited Manufacturer of highly sophisticated and accurate solid state electronic
energy meters and energy management systems ·
Samaya
Investment and Trading Private Limited ·
Parteek
Finance and Investment Company Limited ·
Lucrative
Leasing Finance and Investment Company Limited ·
Binarvi
Holding Private Limited ·
Nansjay
Investment Private Limited ·
Polymeters
Response International Limited ·
Lipi
Data Systems Manufacturers of large size heavy-duty line printers for computers in
technical collaboration with a |
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Subsidiaries : |
Pill Finance and Investment Limited Board of Director Mr. A K Mukherjee Mr. Salil Singhal Mr. Anurag Surana Mr. R Srinivasan Banker ICICI Bank
Limited IDBI Limited Auditors Kishan M Mehta
and Company Chartered
Accountant Registered Office – 209, Himalaya Ahmedabad –
380015, |
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PI Life Science Research Limited Board of Directors Dr. S P Vishnoi Mr. Anurag Surana Mr. R Srinivasan Bankers: Axis Bank Limited Auditors K S Mehta and
Company Chartered
Accountant Registered Office: 603 – C, Philips
CGHS Limited, Plot No. 3, Sector – 23, Dwarka, |
CAPITAL STRUCTURE
(As on
31.03.2008)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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23000000 |
Equity Shares |
Rs.10/- each |
Rs.230.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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3543800 |
Equity Shares |
Rs.10/- each |
Rs.35.438
millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
35.400 |
35.438 |
35.438 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
667.800 |
607.701 |
563.525 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
703.200 |
643.139 |
598.963 |
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LOAN FUNDS |
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1] Secured Loans |
1643.600 |
1459.948 |
952.645 |
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2] Unsecured Loans |
134.300 |
143.061 |
126.473 |
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TOTAL BORROWING |
1777.900 |
1603.009 |
1079.118 |
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DEFERRED TAX LIABILITIES |
0.000 |
201.700 |
174.413 |
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TOTAL |
2481.100 |
2447.848 |
1852.494 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1562.100 |
1476.538 |
1180.833 |
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Capital work-in-progress |
74.100 |
0.000 |
0.000 |
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INVESTMENT |
25.800 |
27.141 |
25.281 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
654.200 |
692.359 |
596.407 |
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Sundry Debtors |
887.400 |
822.612 |
468.935 |
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Cash & Bank Balances |
29.800 |
29.911 |
22.993 |
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Other Current Assets |
0.000
|
0.000
|
0.000 |
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Loans & Advances |
239.200 |
238.184 |
154.757 |
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Total
Current Assets |
1810.600 |
1783.066 |
1243.092 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
998.900 |
849.316 |
608.030 |
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Provisions |
0.000 |
0.674 |
5.330 |
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Total
Current Liabilities |
998.900 |
849.990 |
613.360 |
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Net Current Assets |
811.700 |
933.076 |
629.732 |
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MISCELLANEOUS EXPENSES |
7.400 |
11.093 |
16.648 |
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TOTAL |
2481.100 |
2447.848 |
1852.494 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
4554.600 |
3175.687 |
2592.457 |
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Other Income |
50.100 |
23.886 |
20.647 |
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Total Income |
4604.700 |
3199.573 |
2613.104 |
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Profit/(Loss) Before Tax |
97.200 |
89.913 |
72.088 |
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Provision for Taxation |
34.300 |
45.288 |
32.297 |
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Profit/(Loss) After Tax |
62.900 |
44.625 |
39.791 |
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Export Value |
NA |
898.134 |
672.099 |
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Import Value |
NA |
709.866 |
558.951 |
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Expenditures : |
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Cost
of Materials |
2335.100 |
1976.845 |
1566.820 |
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Operating
Expenses |
0.000 |
208.255 |
175.383 |
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Payment
to and Provisions for Employees |
0.000 |
255.659 |
219.041 |
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Increase/(Decrease) in Finished Goods |
(2.800) |
0.000 |
0.000 |
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Excise Duty |
385.600 |
0.000 |
0.000 |
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Power & Fuel Cost |
112.900 |
0.000 |
0.000 |
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Other Manufacturing Expenses |
115.700 |
0.000 |
0.000 |
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Employee Cost |
331.300 |
0.000 |
0.000 |
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Miscellaneous Expenses |
36.400 |
0.000 |
0.000 |
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Administrative,
Selling and Other Expenses |
918.700 |
442.792 |
405.033 |
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Interest
and Other Financial Charges |
177.300 |
139.487 |
101.597 |
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Depreciation |
97.300 |
87.071 |
73.651 |
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Less:
Transferred from Revaluation Reserve |
0.000 |
(0.449) |
(0.509) |
|
Total Expenditure |
4507.500 |
3109.660 |
2541.016 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2008 |
30.09.2008 |
|
Type |
1st
Quarter |
2nd
Quarter |
|
Sales
Turnover |
1008.300 |
1342.300 |
|
Other
Income |
0.900 |
0.700 |
|
Total
Income |
1009.200 |
1343.000 |
|
Total
Expenditure |
868.600 |
1167.000 |
|
Operating
Profit |
140.600 |
176.000 |
|
Interest |
60.400 |
41.500 |
|
Gross
Profit |
80.200 |
134.500 |
|
Depreciation |
27.400 |
27.500 |
|
Tax |
7.000 |
14.700 |
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Reported
PAT |
41.200 |
83.400 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
PAT / Total Income |
(%) |
1.37
|
1.39 |
1.52 |
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Net Profit Margin (PBT/Sales) |
(%) |
2.13
|
2.83 |
2.78 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
2.88
|
2.76 |
2.97 |
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Return on Investment (ROI) (PBT/Networth) |
|
0.14
|
0.14 |
0.12 |
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Debt Equity Ratio (Total Liability/Networth) |
|
3.95
|
3.81 |
2.83 |
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Current Ratio (Current Asset/Current Liability) |
|
1.81
|
2.10 |
2.03 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject manufactures pesticides and insecticides. Piyush Singhal is the
Chairman and Salil Singhal is the Managing Director of the company. The
manufacturing unit is located in
PILL Finance and Investment is a 100% subsidiary of the company. As a part of
its diversification, it has set up a plant to manufacture polyurethane
compounds used in the adhesive industry at a project cost of Rs 23 millions and
also put up a compounding unit for supplying plastic and polymer moulders.
In 1999, the expansion which was undertaken at the Company's plant at Panoli
including state of art multi product plant for manufacturing of industrial
chemicals has been completed and is now fully operational.
The polymer business witnessed a revival and growth in business after a
prolonged recessionary situation with the industrial climate showing positive
trends.
SUBSIDIARY
COMPANIES
The Company has three subsidiary companies as on March 31, 2008.The members may
refer to the statement under section 212 of the Companies Act, 1956 and
information on the financials of subsidiaries appended to the above statement
under section 212 of the Companies Act, 1956 in this Annual Report, for
detailed information on these subsidiary companies. The key highlights of these
subsidiary companies are as under:
PILL Finance and Investments Limited (PILL-F):
The company posted a profit of Rs.2.109 millions during the year.
PI Life Science Research Limited (PILSR)
During the year, the company has posted a loss of Rs.2.042 millions, which was
incurred on account of various R and D activities for developing new
products.
PI Japan Company Limited
The Company posted a profit of JPY 10,18,691.00 (Rs.0.408 millions) during the
year.
MANAGEMENT
DISCUSSION AND ANALYSIS
REPORT
ON CORPORATE GOVERNANCE
A detailed report on the Corporate Governance code and practices of the Company
along with a certificate from the Auditors of the Company regarding compliance
of the conditions of Corporate Governance as stipulated under clause 49 of the
Listing Agreement are given in a separate section in this Annual Report.
EVENTS SINCE THE END OF THE FINANCIAL
YEAR 2007-08
The following events have been authorized by the Board of Directors of the
Company in their meeting held on June 13, 2008. These events are subject to the
approval of the members in the forthcoming Annual General Meeting to be held on
July 21, 2008.
Increase in the Authorised Capital of
the Company
To enable the Company to expand its activities for seeking the emerging
opportunities for growth and to give effect to the recommendations of certain corporate
actions like issue of rights and bonus shares to meet any future requirements,
the Board of Directors considered necessary to increase the share capital of
the Company to Rs.230.000 millions divided into 20.000 millions Equity Shares
of Rs.10/-each; 0.300 million Preference Shares of Rs.100/-each.
Issue of Equity Shares to the Members on
Rights basis
The Board of Directors have considered to augment the financial resources of
the Company in order to take up some of the projects for which it is thought
fit to raise the equity share capital from the existing shareholders of the
Company in the ratio of 1 (One) equity share for every I (One) equity share
held on rights basis.
Issue of Bonus Shares to the
Members
The present level of Reserves and Surplus of the Company is nearly nineteen
times of the Paid-up Equity Capital of the Company. Considering this position
of reserves and surplus the Directors have proposed to the issue shares by way
of bonus shares to the members of the Company in the ratio of 1 (One) Bonus
Share of Rs.10/- (Rupees Ten Only) each for every 1 (One) fully paid-up Equity
Share of Rs.10/-(Rupees Ten Only) each.
Besides, the above events which are subject to the approval of the members of
the Company, the Board of Directors have authorized the appointment of Karvy
Computer share Private Limited as Registrar and Share Transfer Agents of the
Company in their meeting held on May 30, 2008.The Company is in the process of
applying to CDSL and NSDL for demateriization of equity shares of the
Company.
INTERNAL
CONTROL SYSTEM
The Company's internal control system comprises audit and compliance by
in-house internal audit team supplement by internal audit checks from K S M N
and Company, Chartered Accountants, the internal auditors of the Company. The
internal auditors independently evaluate the adequacy of internal controls and
concurrently audit the majority of the transactions in value terms.
CODE
OF CONDUCT
It is hereby confirmed that all Board members and senior management personnel
have affirmed compliance with the code of conduct during the financial year
ending March 31, 2008.
INDUSTRIAL RELATIONS
The Company has a team of able and experienced staff and executives at
different levels. Industrial relations at all the Company's work and plants
remained cordial throughout the year. The Board places on record its deep
appreciation for the efforts and contribution made by all the employees for
continued high level of performance.
RESEARCH
AND DEVELOPMENT (R AND D)
Future
plan of action
Pursuant to its philosophy of innovating cost effective, environment friendly
routes of synthesis using advanced and sophisticated analytical and laboratory
instruments, the Company plans to add new and technologically advanced
instrumentations for increasing research capabilities along with skilled and
experienced manpower to create a sophisticated creative environment. To enhance
the existing skills and knowledge base of the existing set of scientists, the
Company also regularly organize training programs for it R and D, which assist
them in improving their skills on a continuous basis.
The thrust of the R and D has been apart from value add on all existing
products we manufacture, to synthesize and manufacture molecules with
increasing complexities involving more recent and novel chemistry and
technologies such as Suzuki Coupling, Chiral synthesis, low temperature,
moisture sensitive reactions, and prepare products with challenging
specification requirements. These include not only pharma ceutically useful
intermediates and products but also chemicals used for sensitive photo-imaging
and electronic uses.
The Company plans to collaborate in partnership with customers around the world
to leverage its capabilities and experiences to generate intellectual property
(IP) for developing new processes.
ECONOMICTRENDS
The global economy saw turbulence in the year. The largest economy in the
world, the
Oil prices rose to over a $100 a barrel during the financial year, nearly times
the prevalent price 4 years age, increasing input costs specially for the
chemical industry and slowing down the GDPs of practically every country.
Food prices increased at double digits, fueled by increasing demand for corn
for use in bio-fuels combined with shrinking agricultural acreages and also
apparently by increasing consumption in the emerging economies such as
Contrary to earlier claims about the Indian Economy being 'Decoupled'from the
Inflation touched a 4 year high in the fourth quarter of the last fiscal and
the Reserve Bank intervened to curb inflation by curtailing inflow of foreign
funds and liquidity through interest rates and CRR hike. This had an impact in
terms of slow-down in retail consumption. The interest rate hike, combined with
subdued equity market sentiments has increased the cost of capital for
industry. The impact of the devaluating dollar was felt by export oriented
industries and companies. Rising oil prices had an impact on the manufacturing
sector that slowed down to about 7% and the overall GDP growth was well below
the targeted 9%.
The demand for agricultural produce and the growth in the agricultural sector
has been higher than expectations. Despite rising prices, shrinking acreages
and growth in population has made agriculture and rural
In the Chemicals arena,
The
In the years ahead, about 7 to 8 Mn Tonnes of production is expected to shift
out of
COMPANY'S PERFORMANCE OVERVIEW
Financial Performance
Overall, gross revenues were Rs.4555.000 millions, a 16.5% rise over the
previous year. The rise in raw material costs has led to erosion in gross margins
by nearly 5%. With an increased focus on capitalizing on the CRAMS
opportunities, the Company has made investments both in physical assets with a
new multi-purpose plant being commissioned this year and in human assets.
Despite the investments, with control in general and administrative expenses,
PAT has grown y-o-y by41 % to Rs.62.900 millions.
Operational Performance of Business
Segments
Agri Inputs Business
The Company is in the business of providing inputs and solutions to the farmer
in the key areas of crop protection chemicals, specialty products and plant
nutrients.
Fine Chemicals (CRAMS)
The Company provides end to end solutions in the speciality chemicals and fine
chemicals and ranging from Process Research and Development to Custom Synthesis
to Kilo - Pilot and Commercial manufacture in partnership with MNCs from
Engineering Polymer Compounding
The Company manufactures custom tailored application solutions backed with
strong R and D base of engineering plastics for injection molding components,
office automation equipment and automobile components.
Some of the highlights of the operational performance in
each of the segments are:
Agri Business
The fiscal year 2007-08 witnessed a normal monsoon in most parts of the
country, baring a few regions. Kharif saw a well spread monsoon over the North,
albeit with some dry spells. Some parts of Central India, especially Central
MP, Maharashtra and
There was a shortage in fertilizers and therefore an increase in fertilizer
prices aggrevated in the third and fourth quarter of the year.
Bt Cotton picked up inmost part of the country, due to the cost benefit ratio
being favourable for the farmers. Bt 2 was launched to cover approximately 8000
acres on a trial basis. The industry had predicted that with the proliferation
of Bt cotton, the usage of inputs would reduce. The Company continued on a
premeditated strategy of reduced dependence on the bollworm segment in cotton,
which is the mainstay of the industry, fresh impetus was given to rice and
vegetables as focus crops. In fact, rice as a crop now contributes to over 25%
of PI's product focus and is a keymitigant to cotton dependence. During the
year, Bt Cotton yielded newer opportunities through the sucking pest segment
and PI was amongst the few to benefit from the same.
The cotton crop in the northern region saw a major infestation of mealy bug
initially in
Sugar production was in excess of forecasts by over 15% leading to low prices
of sugar, reduced cane crushing and consequently decline in input consumption.
Sugarcane declined in UP, Maharashtra,
The rabi season saw an almost non eventful year, as against a record crop
expectation from wheat in most of the wheat growing areas, Punjab, Haryana, UP
and
PI Agri Business managed to do well in all the zones, with exceptional growth
being achieved in Punjab, MP, Chattisgarh, Tamil Nadu and
Overall the year witnessed good demand for Agri products. PI Agri business
attempted initiatives such as improving WC cycles and throughputs to address
this demand. Increased liquidity and thereby material availability would have
yielded nearly 15% greater revenues.
KEY ACHIEVEMENTS
Some of the key achievements during the year:
·
One novel product launched in
·
Lurit (Dimethomorph), an ovel molecule
of one of the largest global chemical companies was launched.
·
Pre-launch field trials (1050) carried
out across the country for new products.
·
Tied up for Water Soluble Fertilizers,
generating encouraging sales and the market response indicates healthy growth
in the future years.
·
Tested 2 new ranges of speciality
products to launch in this year.
·
Signed exclusive agreement for the
development of an agro chemical to be launched in the year 2010.
·
The marketing organization was restructured
to consolidate into 4 zones to bring operational efficiencies.
·
Two new Bchannel partners were added to
our retail busines schannel to take the total number of partners to 8.
·
The only company in the industry to
automate complicated Customer Incentive Schemes in SAP, enabling monthly
statements of accounts to customers.
·
The business planning tools developed
during the previous year were enhanced and implemented. A key benefit wasthat
market intelligence and customer information was captured and helped in
creating regional, cropwise, pestwisestrategies.
Agri
Business Outlook 2008-09
The outlook for the Agri business in 2008-09 is very positive. A normal monsoon
is predicted and the food prices are expected to sustain their growth yielding better
realization for the farmer. Trends indicate that a 6-7% increase is expected in
crop acreages in field crops. With Rs.600,000 millions loan waiver announced by
the government, the farmer sentiment has also improved. Thus the demand for
inputs is expected to show a highly positive trend. With the expected shift of
manufacturing from
The Company will continue to augment its product and solutions portfolio to the
farmer and look to mitigate the input costs through pricing and commercial
strategies.
Fine Chemical (CRAMS)
The Company sustained the momentum of growth in fine chemical revenues.
Significant investments were made in augmenting manufacturing, research and
analytical infrastructure, strengthening the overseas office in
Some of the key highlights of Pl's Fine Chemical business
for the year 2007-08 are as follows:
Business Development
·
80 new inquiries were received
during the year of which 65 are patented products.
·
A new leader has been inducted to drive
this business and the long-term plans for the division laid out.
·
The focus has been to take up high
value outsourcing projects and partnering global majors through innovation and
technology leadership.
R AND
D
·
Synthesis of 20 chemicals was done in
the areas of pharmaceutical intermediates, imaging chemicals, agro
intermediates and liquid crystal intermediates.
·
Complexity in chemistry for projects increased
considerably not only with increasing number of steps for synthesis but also
incorporation of difficult technologies as well.
·
Worked on new chemistry such as
moisture sensitive reactions, use of sensitive catalyst and use of difficult to
handle chemicals such as Grignard reagents, n-butyllithium reagents, Photo
chlorination, Butyl lithium, cryogenic reactions (-600C to-700C), Fluoro
methylation, metal content organics etc.
QC/QA
·
New impurities isolated by preparative
HPLC for new projects.
·
800 samples characterized by GC/LC
Mass; 10 quality manuals prepared for commercial production of new
products.
·
38000 samples analyzed during the
year.
·
Investment was made in instrumentation
to meet stringent specifications of products and intermediates in the near
future.
Process
Development
·
Techno-Commercial feasibility study
done for 75 new molecules.
·
KiloLab: Scale up study done for 20 new
molecules in kilo lab and process optimization done for 2 existing
products.
·
Commercialized and new molecules which
were taken up for commercial production including and step reaction.
Projects and Engineering
·
A new plant added to Panoli plant that
effectively enhanced capacity in reactor volume by about 30%.
·
10 new projects completed for adding
new molecules or expanding existing products to the product line.
·
A new MEE Plant was added to Panoli
plant for effluent treatment.
·
Total investment on these projects was
approximately Rs.200 millions.
Operations and Production
·
High HETP columns were set up for
fractionation.
·
Cryogenic reactions were carried out in
semi-commercial setups.
·
Streamlined efforts at pipeline
building, multi-year contracting and the successful commercialization has seen
capacity utilization improve by about 25%.
CRAMS Business Outlook 2008-09'
Subject remains committed to grow the CRAMS business with a focus on high value
chemical manufacturing. With the focus on quality services beyond the ordinary,
9l Fine chemical will continue to invest and work on early stage partnerships
especially for new chemical entities through custom synthesis and contract
research area as well specially to leverage a 100 plus R and D talent pool. The
model represents the best solution for clients requiring quick development
support to launch their new products in the market and aiming to develop a
competitive source of supply.
The Fine chemical group plans to focus on increasing efficiency by further
increasing the utilization, improving throughput and efficiencies of the plant
and other resources thereby growing both the top line and the bottom line and
create a proactive ability -.o meet the aggressive growth. Fine chemical team
also would be focusing on proper selection of compounds and strategic
partnership development putting its resources to grow with value addition to
its customers and partners to build sustainable long-term relationships.
PI Fine Chemicals team plans to further improve the systems and business
process in order to remain competitive in the market. Based on the challenges coming
up from the increasing raw materials, attrition and difficult to attract
talented workforce, increasing issues with timely delivery of materials from
China, the focus is now on developing talent internally wherever possible,
guild vendor relationship within the country and dependable partners around the
world, develop a more transparent and tenuous business relationship with
customers.
Polymer
The major customer segments of Engineering Plastic Compounds are auto
components and the electrical and electronics industry, and both these
industries are slowing down after a great growth in past 3-4 years. The
automotive and construction -industry have shown lowerthan expected growth
rates due to increase in retail finance interest rates.
At one side the RM cost going up, the demand is sluggish and also there is a
pressure from customers to reduce the prices, this has cut the compounding
industry in tight spot. Hence compounders have to compete with cheaper
economies and lower margins Which have come under pressure from
customers.
Performance
In a tight and high pressure market, the Polymer Division clocked a sales
growth over the previous year; the profit margins were i under pressure due to
intense competition and soaring polymer prices.
The thrust on R and D as a key business enabler continued and some of the
achievements were:
·
Savings on RM costs through recipe
modification.
·
Achieved supply of newly developed
samples within seven days of approval of the same.'
·
Commercialized two products for supply
to one of the most reputed moulder of auto parts in
·
Developed new blends both for FR and
Non FR compounds.
Capacity utilization was 100% and sales growth could have
been higher in 2007-08 but for capacity constraints.
Polymer Outlook 2008-09
The road map for 3 year growth plan is already made with a shift in focus from
a volume driven strategy to a margin driven strategy. This is possible by
targeting high value niche segments through intense development work and
partnership with key end customers.
A careful selection of customer and application segments and products has been
made to ensure the shift in the future growth focus.
Considering the road map for the next 3 years and to support the envisioned
growth, another manufacturing extruder line has been installed and commissioned
in January-2008 and subsequently became commercially operational.
Given these growth strategies and new initiatives, all round improved
performance is expected in the current year by:
·
Entering higher value added sectors by
developing new customer lines.
·
Savings in RM Cost through recipe
modifications in products.
·
Introducing value added products.
·
Reduction in wastage, manpower cost and
electricity consumption.
HEALTH
SAFETY AND ENVIRONMENT
Subject vision in Health, Safety and Environment goes far
beyond compliance, to predict and proactively manage emission and waste and
create green and clean workplace and factory surroundings.
In the year 2007-08 they aimed at further consolidating the HSE performance,
fulfilling the HSE vision of the Company. The biggest achievement for the year
had been successfully qualifying the stringent overseas customer HSE audits.
The audit was mainly focused on the performance of HSE management system of the
Company. The Company has also planned to get audited under Responsible Care
system in near future, the recognized standard in the area of Occupation Health
arid Safety in
The Company has formed a full fledged 73 person Emergency Response Team last
year with continuous training and emergency response simulation.
The Company has installed a Multiple Effect Evaporator with an investment of
Rs.50 millions to treat high Total Dissolved Solids bearing waste and
ultimately to improve the efficiency of existing effluent treatment plant to
maintain sustainable development.
Like in the past, the representatives of Company actively participated and
played a proactive role in formulation of government policies related to environment
specially during formulation of draft Hazardous Waste Management Rules and
development of Emission Standards and Guidelines for Incineration of Pesticide
Industry at various national level forums.
The Company has donated 500 tree guards during the past
monsoon to local forest department and other agencies for maintaining
plantation in and around residential areas.
The Company has placed an order for a high capacity Effluent Treatment Plant at
a cost of Rs.30.000 millions and its construction work is under progress. This
effluent treatment plant will provide help to meet the requirements of
disposing additional load due to increased production demands as well as to
achieve higher standards of disposal norms for the future need.
The Company has a well chalked out plan for further improvements in HSE systems
and to achieve sustainable development. They believe that by implementing
those, the Company will achieve its mission of becoming one of the best
chemical companies in Safety, Health and Environment.
SOCIAL RESPONSIBILITIES
Recognizes the fact that social responsibility does not end at protecting the
health and safety of its employees alone; it extends to the neighboring communities.
They actively participate in corporate initiatives in rural development and
social upliftment programs along with Government and institutional bodies.
Continuous efforts are made to provide support to underdeveloped areas in terms
of medical and educational aids which assist livelihoods.
During the year, activities such as farmer meetings were conducted for safe and
judicious use of pesticides. The meetings also have active participation from
local agricultural department officials and progressive farmers.
RISKS AND CONCERN AREAS
In the course of the business, Subject is exposed to a variety of market and
other risks including the effects of demand dynamics, currency exchange rates,
and interest rates as well as risk associated with financial issues, hazard
events and specific assets risk. Macro economic factors like slowdown,
unforeseen political and social upheaval, natural calamities, may affect the
Company as other companies in the Indian Industry.
Subject has developed a strong risk management framework that enables active
monitoring of the business environment and identification, assessment and
mitigation of potential internal and external risks. The management sets the
overall tone and risk culture of the organization through defined and
communicated corporate values, clearly assigned risk responsibilities,
appropriately delegated authority and a set of processes and guide lines.
For the Agri business of the Company, the monsoon as usual continues to play
the most important role in agriculture. Any significant changes in rainfall,
deficit or excess will affect the performance of the business. Raw material
availability and price poses a new risk dimension. The rising price of the
crude oil poses significant challenges in the management of input cost and
output logistics. Due to intense competition, the Company may not be able to
pass on all the costs to customers. The Fine Chemical business faces the risk
of rising prices of crude oil in terms of raw material costs. Any strengthening
of the rupee also has an impact on the revenues. The polymer sector continues
to witness the surging oil prices thereby creating uncertainties regarding both
the availability and prices of raw materials. This in itself poses a major
challenge in procurement and logistics.
The company is in
trade terms with:-
·
Kaiser Industries Limited,
·
Mipak Plastics Private Limited,
Mumbai
·
Maldar Barrels Private Limited,
Mumbai
·
Paper Plast Industries (
·
Vimal Chemicals,
·
Ameeja Enterprises, Mumbai
·
Akry Organics (Private)
Limited, Mumbai
·
Ajay Packaging,
·
Jalaram Box Makers Private
Limited, Ankleshwar
·
Krishna Organics (Private)
Limited, Vadodara,
·
Mineral and Matel Industries,
·
Maharashtra Metal Works Private
Limited, Mumbai
·
Neogen Chemicals Limited,
Thane,
The company's
important overseas trading partners are Mitsubishi and Marubeni of Japan.
WEB
DETAILS
Profile
Subject is in the business of – Agri inputs, Fine Chemicals (CRAMS - Contract Research and
Manufacturing Services), Polymers and Engineering Services.
Founded in 1947 in
the city of lakes -
Subject is committed to growth, driven by its corporate philosophy, and aims to
achieve the highest standards in all its endeavors.
Subject’s strength lies in:
·
More than 30 years of strong business associations
with large number of leading multinationals across the globe.
·
One of the oldest, largest and most credible
distribution networks in rural
·
Strong management capabilities, research and
development and world class manufacturing infrastructure.
·
One of the leading companies in Contract Research
and Manufacturing Services (CRAMS), having long term tie-ups with leading
chemical companies across the globe for newly invented products.
·
Amongst the top 5 and fastest growing companies in
polymer compounding by providing innovative solutions.
Corporate
philosophy
Subject derives its strength from a formally adopted Corporate Philosophy
which, amongst other things, impels subject to:
·
Uphold a reputation for integrity,
honesty, straight-forward and just
dealings.
·
Be committed to the quality
of its products.
·
Be committed to its customers
·
Be innovative in
approach and thought.
·
Be open, friendly,
sincere and human in behavior and attitude.
·
Contribute to the community
as a part of our social responsibility
Safety
and Environment
They are committed to provide total environment safety and cleanness
measures, excellent house keeping, congenial working environment and regulatory
compliance.
·
Facilities are fully compliant with regular
approvals backed up with strong environment and regulatory management.
·
Recycling and recovery of by-products and
solvents.
·
Excellent house keeping and congenial working
environment.
·
Environment laboratory works on innovative
processes to minimize waste, in order to achieve high standards of
environmental safety.
·
Extensive training program to farmers on safe and
judicious use of pesticides.
·
Exclusive safety leaflets distributed to farmers in
the regular meetings to educate them on safe handling of pesticides.
·
Equipped with powerful dust collectors and filters.
·
Volatiles from extruders are vented through a
caustic scrubber.
·
Plastic waste products are disposed off to
recyclers.
·
Continuous efforts for Energy Saving.
·
Lubricating Oil wastages burnt in incinerator.
·
Cooling water recycling to conserve water.
·
Safety guards on all machines.
·
Soothing landscaping and greenery.
Subject is committed:
·
To adopt sound manufacturing practices to minimize
pollutants, occupational health and safety risks.
·
To continuously work for cost effective
technological improvements to minimize risks to human beings, property and
reduce adverse environmental impact.
·
To comply with all regulations and statutes
concerning safety, health and environment.
·
To ensure safe and pleasant work environment within
the premises by following exemplary house-keeping practices.
·
To continually improve health, safety and
environmental performance.
·
To inculcate the principles of safety in its people
and processes on a continuous basis.
Quality
To be the best quality producer
To control all processes which impact the quality of the end product.
·
Independent QA Team which prepares quality
management plan for each molecule.
·
Regular quality system checks and audit.
·
Manufacturing plant is certified ISO 9001:2000 for
quality management system.
·
Both analytical labs at process development center
and commercial plant are certified ISO 17025 for analytical abilities.
·
Complete documentation for input traceability and
batch logs.
·
Subject as a part of its culture constantly
evaluates its quality assurance system on a regular basis in order to keep up
to its goal.
Quality Control
·
Online lab facilities in plants for in-process
quality check and control.
·
Lab staffed with dedicated and experienced PhDs and
Chemists.
·
Development and validation of analytical methods.
·
All work regulated with fully documented standard
operating procedures.
·
Well equipped packaging laboratory.
·
Regular up-gradation of lab facilities.
·
Easy access to top labs in
·
Continuous training to people on latest quality
management systems while updating their knowledge on the latest technologies.
Quality
Policy
Subject shall be committed:
·
To Its
Reputation for integrity, honesty, just dealings and compliance to
applicable regulatory requirements.
·
To customers
for top quality products at competitive prices.
·
To Innovative
Approach for continual improvements due to its belief that there are
better ways of doing things.
·
To The
Employees for their personal and professional growth.
·
To The Community
as a part of its social commitment.
Business
·
Fine Chem
·
Agri Input
·
Polymer
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No 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 :
The 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.
The 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.48.99 |
|
|
1 |
Rs.72.49 |
|
Euro |
1 |
Rs.68.44 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
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 |
|