MIRA
INFORM REPORT
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Report Date : |
15.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
POLYPLEX CORPORATION LIMITED |
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Registered Office : |
Lohian Head Road, Khatima, Dist. Udham Singh Nagar - 262 308, Uttaranchal |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
18.10.1984 |
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Com. Reg. No.: |
11596 |
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CIN No.: [Company
Identification No.] |
L25209UR1984PLC011596 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELP08882G |
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PAN No.: [Permanent
Account No.] |
AAACP0278J |
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Legal Form : |
It is a Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and Selling of Polyester Films, Polyester Chips and Solar PV Modules. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 4222000 |
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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 having satisfactory
track. Directors are reported as experienced and respectable businessmen. Trade
relations are reported as fair. Business is active. Payments are usually
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 / Works : |
Lohian Head Road, Khatima, Dist. Udham Singh Nagar - 262 308, Uttaranchal, India |
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Tel. No.: |
91-5943-250136 / 91-120-2443716 |
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Fax No.: |
91-5943-250281 / 91-120-2443723 |
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E-Mail : |
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Website : |
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Head Office : |
2, Ring Road, Kilokri, Opposite Maharani Bagh, New Delhi – 110 014, India |
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Tel. No.: |
91-11-2463 1761 |
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Fax No.: |
91-11-2462 0729 |
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Corporate Office : |
B-37, Sector I, Noida, District – Gautam Budh Nagar – 201 301, Uttar Pradesh |
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Tel. No.: |
91-120-2443716 to 19 |
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Fax No.: |
91-120-2443723 / 24 |
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E-Mail : |
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Factory 1 : |
Lohia Head Road, Khatima, Dist. Udham Singh Nagar - 262 308, Uttaranchal |
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Tel. No.: |
91-5946-255165/66 |
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Fax No.: |
91-5943-250069 |
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Factory
2 : |
Siam Eastern Industrial Park
60/24, Moo 3, Tambol Mabyangporn, Amphur Pluakdaeng, Rayong 21140, Thailand |
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Tel. No.: |
66-38-891352-4 |
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Fax No.: |
66-38-891358 |
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Branch 1 : |
Polyplex
(Thailand) Public Company Limited |
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Tel. No.: |
66-2-6652706-8 |
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Fax No.: |
66-2-6652705 |
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Branch 2 : |
Polyplex
Europa Polyester Film San. ve Tic. A.S. |
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Tel. No.: |
90-282-6911241,44 |
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Fax No.: |
90-282-6911052 |
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Branch 3 : |
Polyplex
(Americas) Inc. |
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Tel. No.: |
1-972-247-3836,47,58 |
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Fax No.: |
1-972-243-1039 |
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E-fax: |
1-240-371-8479 |
DIRECTORS
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Name : |
Mr. Sanjiv Saraf |
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Designation : |
Chairman |
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Name : |
Mr. S. G. Subramanyan |
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Designation : |
Vice Chairman |
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Name : |
Mr. Ramesh Bhatia |
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Designation : |
Director |
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Name : |
Mr. Mukesh Kumar Jain |
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Designation : |
Nominee Director – IDBI Limited |
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Name : |
Air Chief Marshal O. P. Mehra (Retd.) |
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Designation : |
Director |
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Name : |
Mr. Brij Kishore Soni |
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Designation : |
Director |
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Name : |
Dr. Suresh Surana |
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Designation : |
Director |
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Name : |
Mr. Sanjiv Chadha |
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Designation : |
Director |
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Name : |
Mr. Pranay Kothari |
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Designation : |
Executive Director |
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Date of Birth/Age : |
41 years |
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Qualification : |
B.Com (H), FCA, ACS |
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Experience : |
18 years |
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Date of Appointment : |
01.08.1985 |
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Other Directorships : |
Optima Consultants Private Limited – Consultant |
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Name : |
Mr. Ranjit Singh |
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Designation : |
Chief Operating Officer |
KEY EXECUTIVES
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Name : |
Mr. A K Gurnani |
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Designation : |
Company Secretary |
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Name : |
Mr. Ranjit Singh |
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Designation : |
President (Film Business) |
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Date of Birth/Age : |
49 years |
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Qualification : |
B. E. (Mechanical), PGDBM |
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Experience : |
24 years |
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Date of Appointment : |
13.11.1996 |
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Other Directorships : |
SRF Limited, Dy. General Manager Marketing and Planning. |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(As on 31.12.2007) |
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Promoters |
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Indian |
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Individuals/ Hindu Undivided Family |
23099 |
0.14 |
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Bodies Corporate |
901101 |
5.63 |
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Foreign |
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Individuals |
2000 |
0.01 |
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Bodies Corporate |
6579067 |
41.14 |
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Institutional
Investors |
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Mutual Funds/UTI |
784880 |
4.91 |
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Financial Institutions, Banks |
3900 |
0.02 |
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Insurance Companies |
567406 |
3.55 |
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FIIs |
25123 |
0.16 |
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Non Institutions |
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Bodies Corporate |
2188147 |
13.68 |
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Individuals |
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Shareholding nominal share capital upto Rs.0.100 million |
2302347 |
14.40 |
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Shareholding nominal share capital in excess of Rs.0.100 million |
1204357 |
7.53 |
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Any Other |
1398673 |
8.75 |
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OCB/ Foreign Company |
1200 |
0.01 |
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Trust |
11000 |
0.07 |
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Total |
15992300 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and Selling of Polyester Films, Polyester Chips and Solar PV Modules. |
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Products : |
Generic Names of the Principal Products of the Company (as per monetary terms) are as under:
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PRODUCTION STATUS (as on 31.03.2007):-
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Plain Film |
MT |
20000 |
20000 |
--- |
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Metallised Film |
MT |
4800 |
4800 |
--- |
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Polyester Chips |
MT |
20000 |
20000 |
--- |
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Silicone Coated Film |
MT |
2900 |
2900 |
--- |
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Plain / Metallised Film |
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Net production |
MT |
--- |
--- |
20589 |
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Packed Production |
MT |
--- |
--- |
20702 |
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Polyester Chips |
MT |
--- |
--- |
19935 |
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Silicones Coated
Film |
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Net production |
MT |
--- |
--- |
97 |
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Packed Production |
MT |
--- |
--- |
96 |
GENERAL
INFORMATION
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No. of Employees : |
About 1000 |
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Bankers : |
Ø State Bank of India, Nainital Branch, Uttar Pradesh Ø HDFC Bank Limited Ø State Bank of Patiala Ø The Federal Bank Limited Ø Chinatrust Commercial Bank Ø State Bank of Hyderabad Ø State Bank of Mysore |
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Facilities : |
Notes: 1) Debentures of
Rs. Nil (Previous Year Rs.100.000 millions), Foreign Currency (FC) Term loan
of Rs.260.820 millions (Previous Year Rs.267.750 millions) and Corporate
Rupee Loan (incl. interest) of Rs.427.248 millions (Previous Year Rs.306.154
millions) are secured / to be secured on a pari passu basis by a first
equitable mortgage in respect of Company's immovable properties at Khatima,
both present and future, and a charge by way of hypothecation of Company's
movables (save and except book debts) both present and future, subject to
prior charges created and/or to be created in favour of the Company's bankers
on specified movables for working capital facilities. (2) Debentures
at (a) are also secured on a pari passu basis by registered mortgage in respect
of Company's freehold immovable property at Village Budasan,
Kadi,Taluka,Distt. Mehsana,Gujarat and are further secured by irrevocable
guarantee of a Director / Promoter. (3) The
Debentures at (a) above were redeemable in 3 annual installments of Rs.
23.530 millions, Rs.38.235 millions and Rs.38.235 millions payable at the end
of 3rd, 4th and 5th year respectively commencing from the date of allotment
i.e. 23.05.2003, which were fully redeemed during the year. (4) Vehicle Loan
of Rs.5.652 millions (Previous year Rs. 3.289 millions) from Banks are
secured by hypothecation of Vehicles purchased therefrom. (5) Foreign
Currency Term Loan at (b) includes Rs. 130.410 millions (Previous year Rs.
178.500 millions) which is in the nature of External Commercial Borrowing
availed from Chinatrust Commercial Bank which is secured by exclusive charge
by way of equitable mortgage of land and building at Noida. (6) Working
Capital Loans from Banks aggregating to Rs.201.877 millions (Previous Year
Rs.201.477 millions) are secured / to be secured by way of hypothecation of
inventories, book debts and other current assets both present and future,
besides second charge on company's immovable properties at Khatima and are
further secured by irrevocable guarantee of director/ promoter to the extent
of Rs. 170.306 millions (Previous year Rs. 134.781 millions).
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Lodha & Company Chartered Accountants |
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Address : |
New Delhi |
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Group Companies : |
· Polyplex Corporation Limited (Polyplex India) Year of Incorporation : 1984 Nature of Business : Manufacturing of PET
Film · Polyplex (Asia) Pte. Limited (PAPL) Year of Incorporation : 2004 Nature of Business : Investment Company · Polyplex (Thailand) Public Company Limited (Polyplex Thailnad) Year of Incorporation : 2002 Nature of Business : Manufacturing of PET
Film · Polyplex Singapore Pte. Limited (PSPL) Year of Incorporation : 2004 Nature of Business : Investment Company · Polyplex Europe Polyester Film Sanayi Ve Ticaret Anonim Siketi (Polyplex Europe) Year of Incorporation : 2004 Nature of Business : Manufacturing of PET
Film · Polylex (America) Inc. (Polyplex America) Year of Incorporation : 1995 Nature of Business : Sales and Distribution
Company |
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Associates/Subsidiaries : |
Associates v Polyplex Infotech Private Limited v Manuputra Information Solutions Private Limited v Punjab Hydro Power Limited v Beehive Systems Limited v Sanjiv Sarita Investments Private Limited v Altivolus Infotech Private Limited Subsidiaries v Excel International Limited v Global Solar Energy (India) Limited v Polyplex (Thailand) Public Company Limited, Thailand v Polyplex (Asia) Pte. Limited, Singapore v Plolyplex (Singapore) Pte. Limited, Singapore v Polyplex Europe Polyester Film Sanayi Ve Ticaret Anonim Sirketi, Turkey v Polyplex (America) Inc., USA |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
30000000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 millions |
Issued, Subscribed:
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No. of Shares |
Type |
Value |
Amount |
|
15838000 |
Equity Shares |
Rs.10/- each |
Rs.158.380
millions |
Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
14642300 |
Equity Shares |
Rs.10/- each |
Rs.146.423
millions |
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Add : Share Forfeiture Account |
|
Rs.5.786
millions |
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Total |
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Rs.152.209 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
152.209 |
152.209 |
152.209 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
903.279 |
936.184 |
1007.195 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1055.488 |
1088.393 |
1159.404 |
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LOAN FUNDS |
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1] Secured Loans |
1026.007 |
1057.170 |
825.315 |
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2] Unsecured Loans |
173.880 |
178.500 |
175.000 |
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TOTAL BORROWING |
1199.887 |
1235.670 |
1000.315 |
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DEFERRED TAX LIABILITIES |
159.100 |
156.216 |
171.824 |
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TOTAL |
2414.475 |
2480.279 |
2331.543 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1108.329 |
970.244 |
1039.391 |
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Capital work-in-progress |
0.307 |
169.022 |
10.811 |
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INVESTMENT |
836.193 |
752.633 |
671.951 |
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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 |
189.294
|
174.895
|
206.545 |
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Sundry Debtors |
247.785
|
272.807
|
350.455 |
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Cash & Bank Balances |
114.432
|
37.989
|
48.170 |
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Other Current Assets |
0.000
|
0.000
|
0.000 |
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Loans & Advances |
127.951
|
263.345
|
175.824 |
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Total
Current Assets |
679.462 |
749.036 |
780.994 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
138.392
|
140.965
|
118.837 |
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Provisions |
71.424
|
19.691
|
52.767 |
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Total
Current Liabilities |
209.816 |
160.656 |
171.604 |
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Net Current Assets |
469.646 |
588.380 |
609.390 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
2414.475 |
2480.279 |
2331.543 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
1864.434 |
1706.760 |
2052.879 |
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Other Income |
143.002 |
112.204 |
106.891 |
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Total Income |
2007.436 |
1818.964 |
2159.770 |
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Profit/(Loss) Before Tax |
62.445 |
11.120 |
187.876 |
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Provision for Taxation |
29.405 |
(0.802) |
56.412 |
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Profit/(Loss) After Tax |
33.040 |
5.961 |
131.464 |
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Earnings in Foreign Currency : |
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Export Earnings |
374.103 |
705.358 |
840.956 |
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Other Earnings |
45.149 |
49.045 |
0.000 |
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Total Earnings |
419.252 |
754.403 |
840.956 |
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Imports : |
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Raw Materials |
81.268 |
34.086 |
71.072 |
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Stores & Spares |
24.378 |
33.905 |
64.092 |
|
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Capital Goods |
20.794 |
101.073 |
94.737 |
|
Total Imports |
126.440 |
169.064 |
229.901 |
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Expenditures : |
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|
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Manufacturing Expenses |
1439.976 |
1301.955 |
1431.387 |
|
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Interest |
94.584 |
85.587 |
98.779 |
|
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Depreciation & Amortization |
77.362 |
96.227 |
91.830 |
|
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Other Expenditure |
333.528 |
313.672 |
344.798 |
|
Total Expenditure |
1945.45 |
1797.441 |
1966.794 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type
|
1stQuarter
|
2ndQuarter
|
3rdQuarter
|
|
Sales Turnover |
480.700 |
480.300 |
471.800 |
|
Other Income |
58.800 |
60.400 |
23.300 |
|
Total Income |
539.500 |
540.700 |
495.100 |
|
Total Expenditure |
419.700 |
433.100 |
437.700 |
|
Operating Profit |
119.800 |
107.600 |
57.400 |
|
Interest |
23.300 |
17.400 |
14.900 |
|
Gross Profit |
96.500 |
90.200 |
42.500 |
|
Depreciation |
22.300 |
18.000 |
20.400 |
|
Tax |
25.000 |
22.000 |
8.900 |
|
Reported PAT |
49.200 |
50.200 |
13.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
PAT / Total Income |
(%) |
1.64
|
0.33 |
6.08 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
3.35
|
0.65 |
9.15 |
|
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|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
3.49
|
0.59 |
10.25 |
|
|
|
|
|
|
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Return on Investment (ROI) (PBT/Networth) |
|
0.05
|
0.01 |
0.16 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.33
|
1.28 |
1.01 |
|
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|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.23
|
4.66 |
4.55 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was incorporated on 18th October, 1984 at Udham Singh
Nagar in Uttaranchal having Company Registration Number 11596.
Subject obtained the Certificate of Commencement of Business on July 22,
1985.
The main object of the company was to set up an industrial undertaking for
the manufacture of polyester film (general purpose, balanced and tensilised).
Promoted by Sanjiv Saraf in association with Mahalaxmi Trading and
Investment Company, non-resident corporate body, the company currently operates
a polyester film plant (cap. : 6000 tpa) at Khatima, Nainital district, Uttar
Pradesh. The plant was commissioned in 1988 with a capital outlay of about Rs.
400 millions. The company's product is biaxially-oriented polyester film, a
thermoplastic film used in a range of products including audio, video, computer
tapes, flexible packaging, metallised yarn, stamping foils, graphic arts,
X-rays, electrical insulations, sun-control films, capacitors and other
applications.
With good prospects for the polyester film industry, the company expanded its
capacity 14,830 tpa at a cost of around Rs. 700 millions. The capacity
expansion was funded by a private placement of shares (in November, 1994, it
made a private placement of shares at a premium of Rs. 130) and internal
accruals.
The company has imported equipment from leading international suppliers such as
Lindauer Dorner, Barmag and Kampf, Germany; Nishimura, Japan; Nucleometre FAG,
France; and Extrusion of Dies, USA. This, coupled with the technical skills of
its operating personnel and emphasis on quality control, has enabled it to
produce films which enjoy a premium position not only in India but also in the
international market.
The company has entered into a Joint Venture Agreement with Global Solar Energy
LCC for its PV Project, with the terms and agreement of both have equal equity
position of 50% each, assets of PV division transferred to going concern, Funds
will met by partners in the ratio of proposed shareholding and Global Solar
Energy used as an implementing entity. Company’s corporate office project is at
an advanced stage.
A forward integration programme for setting up a Metallizer is in the
process at a cost of Rs.100 millions.
This has been financed by way of term loan to the extent of Rs.70.000
millions from IDBI and the balance through internal accruals. An expansion programme of polyester film is
in an active stage. This project was earlier planned to be located in UAE but
due to social uncertainty in the Middle East the company has decided to
relocate the project in Thailand. The total project cost of US$ 30 million,
including US $ 6 million towards working capital is proposed to be financed by
way of debt to the tune of US $ 20 million and the balance by way of equity
/preference shares. The Metalliser project has been delayed and has been
scheduled to be in the financial year 2002-03.
DIRECTOR REPORTS:
The Company's Film and Chips plant in India continued to work at high operating rates with a marginal increase in Film production and 8.4% increase in Chips production over the previous year.
The Company's off-line silicone coating facility, set up at Khatima, to cater
to requirements of overseas customers, commenced commercial production in
March, 2007. This unit qualifies for Income Tax benefits under Section 80 IC of
the Income Tax Act.
Despite competitive pricing pressures in the domestic as well as international
markets, resulting from new capacity creation there has been an increase of Rs.
30.595 millions in EBIDTA. Interest and finance charges were higher by Rs.8.997
millions due to higher interest rates. The depreciation charge was lower by Rs.
18.865 millions primarily on account of the fact that the first polyester film
line has been fully depreciated.
The Company has earned a Profit before tax of Rs.62.445 millions. After making Provision for Tax including prior period adjustment of Rs.10.986 millions, the Profit after tax is Rs.33.040 millions as against Rs. 5.961 millions in the previous year.
More details on operations and a view on the outlook for the current year are given in the 'Management Discussion and Analysis Report', which forms part of the Annual Report.
Subsidiary
Companies
Polyplex (Thailand)
Public Company Limited, Thailand (Polyplex Thailand)
The Company, together with its wholly owned subsidiary
Polyplex (Asia) Pte. Limited., Singapore (PAPL) owns Polyplex Thailand to the
extent of 70%.
Polyplex Thailand is listed on The Stock Exchange of Thailand.
Profit for the year was lower due to pressure on margins, particularly due to
higher raw material costs, adverse market situation and depreciation in the
export currencies as compared to Thai Baht. Between the beginning and end of
year the depreciation of USD versus Baht was 9.86% with an average of 8.55%.
The decline in Rupee term has been lower because of the appreciation of the
Thai Baht versus the Indian Rupee.
The Board of Directors of Polyplex Thailand, in line with its stated policy,
has recommended a dividend of Baht 0.17 per share, taking into account economic
conditions, growth plans, future deployment opportunities, the Company's
financial position and liquidity.
As reported last year, in order to improve its product mix towards more value
added products, Polyplex Thailand is in the first phase, setting up an extrusion
coating line at an estimated total cost of U.S. Dollars 8 million. Production
is expected to commence by third quarter of 2007-08. In addition, a Metalliser
with a width of 2.85 meter and capacity of 5,700 TPA has been ordered and is
scheduled to come on stream in the first quarter of next year.
Polyplex (Asia) Pte.
Limited., Singapore (PAPL)
PAPL is a wholly owned subsidiary of the Company. The Company holds the entire ordinary share capital of
PAPL comprising of 100000 ordinary shares of U.S. Dollars 10 each at par.
Polyplex India is engaged in the manufacture and sale of
Polyester (PET) Film with an installed capacity of 20,000 TPA at its works
located at Khatima, Distt. Udham Singh Nagar, Uttarakhand. In addition, it has
an installed capacity of 20,000 TPA of PET Chips for captive consumption and
4,800 TPA of Metallised Film at the same location. An offline silicone coating
facility was commissioned in March, 2007 with a capacity of 2,900 TPA.
Polyplex Thailand, the Company's subsidiary operates two thin film lines with
the first line having been commissioned in April 2003 and the second one in
November 2003. During 2004-05 two Polyester chips plants were commissioned
successfully - a batch process plant with a capacity of 7000 TPA in September
2004 and a continuous process plant with a capacity of 45,500 TPA in February
2005. In August 2005, Polyplex Thailand successfully commissioned a Metalliser
with a capacity of 5,000 TPA.
During December 2005 Polyplex Europa, Polyplex Thailand's wholly owned
subsidiary commissioned a new PET Film line with an annual capacity of 24,000
TPA along with a 4 MW captive co-generation power plant. Polyplex Europa has
also installed a metalliser with a capacity of 5,000 TPA which commenced
commercial production in March 2006. In December 2006, a continuous process
chips plant of an annual capacity of 45,500 TPA started commercial production
in Turkey. With the startup of this plant, Polyplex Europa is now self
sufficient for its current needs and would also be able to substantially meet
the requirement for the next line scheduled to commence commercial operations
in first quarter of 2008-09. In the intervening period the 'surplus' capacity
is being utilized to merchandize chips.
Consequent upon the subscription of additional Common Stock by Polyplex
Thailand, Spectrum Marketing Inc. (Spectrum) which distributes PET film for the
Polyplex group has become a Group subsidiary with effect from January 1, 2006
and has now been renamed as Polyplex (Americas) Inc. (Polyplex America).
PRODUCT
PET film is a high performance film made from polyethylene terephthalate resin (generally known as Polyester Chips), which in turn is produced from Dimethyl Terephthalate (DMT) / Purified Terephthalic Acid (PTA) and Mono-Ethylene Glycol (MEG).
The five main categories of PET film applications are as under:
a) Packaging: Commodity films and specialty film used primarily for flexible
packaging.
b) Imaging: Printing films- layout base, masking film and printing plates, as
well as reprographic, microfilms etc.
c) Electrical: Wire and cable wrap, membrane switches, flexible printed
circuits, capacitors and motor insulation.
d) Magnetic media: Audio and video tape, as well as computer tape and floppy
discs.
e) Others (Industrial): Comprising Hot stamping foils, Thermal Lamination,
Release films, Air conditioning ducts, photo-resist, labels and many
more.
Another broad categorization made by the industry is Thin (including Magnetic
media) and Thick films. The Company operates in the Thin film segment focusing
on the Packaging, Industrial and Electrical (PIE) segments.
INDUSTRY SCENARIO
GLOBAL
1)
Demand
The worldwide merchant market of PET film in 2006 was estimated at 1.61 million tons, up from 1.19 million tons in 2001, which represents a CAGR of 6.23%. Of this about 80% is estimated to be accounted by thin films. The sector with highest demand for thin PET film is Packaging, followed by Industrial and Electrical films respectively. The combined demand for these segments accounted for 74% of the total demand in 2001 going up to 91% in 2006. This represented a growth of 65% during 2001-2006. Electrical segment recorded the highest growth of 119% followed by Packaging (61%) and Industrial (49%). The CAGR for these segments between 2001 and 2006 has been 10.55%.
Classified by region, demand for PET film was the highest in Americas, West
Europe and Japan, accounting for 26%, 20% and 18% of world consumption
respectively in 2001. Because of higher growth rates between 2001-2006, 'Other
Asia' (Asia other than India, Japan and Korea) has emerged as the largest
market with a share of 24% followed by America and Japan with 21% and 19%
respectively.
2) SUPPLY
The global merchant capacity for PET film in 2006 was approximately 2.27 million tons up from 1.49 million tons in 2001, which represents a CAGR of 8.78%. Thin film capacity was estimated at 1.74 million tons in 2006, about 77% of the total. Since 2001, there has been a shift of production towards Asia (excluding Japan and Korea) whereas the capacity in all the other markets has remained largely unchanged.
Classified by region, 'Other Asia' had the highest capacity in 2006 accounting
for 48%, followed by Americas (14%), Korea and Japan (13% each).
During 2001-2006, 'Other Asia' also was the region that had the highest growth rate of PET film production capacity with growth of 170% due to the setting up of new lines by existing and new manufacturers in India, China and other developing countries in Asia.
3) Industry Structure and
Evolution
After a period of PET film shortage in the mid- 90's, which led to high profitability for all producers worldwide, the industry saw a huge capacity build up resulting in a significant oversupply situation. Competitive pressure further aggravated by the East Asian currency crisis in mid-1997 led to a severe erosion of prices to unprecedented levels and all producers of PET film went through an extremely difficult period between 1997 and 2000. Limited capacity creation, large-scale consolidation as also the rationalization of capacity by closure of uneconomic old lines by some players, helped restore a semblance of stability to the PET film markets worldwide towards the end of 2000.
With proliferation of technology and capacity, the emphasis has moved to
evolving a competitive cost structure. This, along with increasing concerns on
optimizing return on capital has led to consolidation among the World 'Majors'
and has created businesses which are truly global in scope in terms of
capacity, geographical reach and product offering.
Several new lines have been setup in China in the recent past as a consequence
of which it is estimated that the capacity in this country has almost quadrupled
from around 136,000 MT in 2003 in four years time.
However, till date, the impact of producers from China in the international markets in not pronounced, perhaps as a reflection of typical start-up / quality problems faced by several first-time producers as also the high domestic demand growth rates. Given that the capacity addition has slowed down considerably and continued demand growth rates of more than 15%, the demand supply gap has shrunk somewhat. During the latter part of the year there has been a sustained improvement in pricing in China reflecting the underlying correction in the demand supply balance. Further, the likely appreciation of the local currency as well as reduction in export incentives would also constrain the ability of Chinese manufacturers to under-sell in the international markets. The current demand is estimated at about 350,000 MT with an estimated capacity utilization of a little over 50% in thin film. While the capacity overhang is a matter of continued concern the actual experience of the past few years would seem to indicate that the 'threat' from China is not as severe as it would appear to be from the data on demand and capacities. The new entrants are also limited by their ability to achieve good quality, high operating levels and build up distribution capabilities. It is understood that there are ongoing discussions for putting in new lines in China.
There are currently three broad classes of PET film manufacturers classified by size of production :
World majors with production levels of over 100,000 tons per year (e.g.
Dupont-Teijin, Mitsubishi, Toray and SKC) ;
Mid-size players with production between 50,000 - 100,000 tons per year (e.g.
Kolon, Polyplex, Cifu and Jindal) ; and Small / local producers with
production of less than 50,000 tons per year.
In order to further improve its product mix towards more value added products, the Company proposes to expand its Metalliser production capacity at its existing location with a machine of 2.85 meter width besides additional slitters. The estimated capital cost of the project is USD 6 million with commercial production in first quarter of
2008-09.
OTHER PROPOSALS UNDER
CONSIDERATION
As is evident from the earlier discussion, current sales are
predominantly in the packaging segment. The Flexible Packaging industry at a
global level is large and offers opportunities for growth, particularly in
associated film substrates.
After considering various alternatives in depth the Company is at an advanced
stage of evaluation of the following product lines:-
· Biaxially Oriented Polypropylene (BOPP) films.
· Cast Polypropylene (CPP) films.
The rationale for these expansion programs is based on the following:
· To establish presence in related products with a large market size - the market for BOPP is several times the size of PET.
· The demand supply balance for these products warrants creation of additional capacity.
· Demand is growing between 5% and 10% at a global level with much higher growth rates in Asia being offset by lower growth rates in North America, Western Europe and Japan.
· Broad base its offering to the Packaging converting industry.
· Leverage the existing sales and distribution network.
· Benefits of integration with the existing manufacturing operations.
Means of risk diversification.
BUSINESS ALLOCATION
With a view to balancing the interests of the shareholders in the Thai subsidiary and the shareholders in India, the Company has adopted the following policies:
a) Market Segmentation Policy
Main factors affecting the allocation methodology of sales between PolyplexIndia, Polyplex Thailand and Polyplex Europa are as under:
Product Range: Products which are not common can be sold by Polyplex India,
Polyplex Thailand or Polyplex Europa anywhere.
Logistics: Proximities and quicker deliveries.
Landed Cost: Customers will be served based on lower delivered costs including Freight, duties etc.
Credit Limits of customers fixed by Export Credit Insurance companies in India,
Thailand and Turkey.
Off-Grade material will be sold based on generation of such material at each
plant in China / India / other outlets.
Availability of material to fulfill customer requirement as an exception
only.
As per this policy, Polyplex Thailand would be servicing North America, South
East Asia, Far-East, Australia / NZ, China and Pakistan. Polyplex India would
be servicing South Asia. Polyplex Europa would be serving Europe, Africa, and
CIS/Russia markets.
b) Future Investment Policy
Polyplex India will undertake investments in India/SAARC region only either directly or through its subsidiaries. All other investments will be done by Polyplex Thailand either directly or through its subsidiaries.
RISK MANAGEMENT
Industrial
cycles
The volatility in earnings resulting from the cyclical nature of the business is a concern. This stems from the fact that capacity additions tend to be bunched whereas the growth in demand is more even. The Company has sought to mitigate this risk through a number of actions and initiatives.
Some of the steps are:
i) The Company believes that it has an attractive value proposition for its customers with an appropriate balance of price, quality and service.
The rapid acceptance of the Company's offerings in the South East Asian markets and its current leadership in key markets in the region has validated the Company's strategy of providing services which are superior to those provided by the regional producers.
ii) The Company's experience in Turkey has also been satisfactory where it
seeks to compete with the European producers who have a much higher cost
structure including high levels of legacy costs resulting from the fact that
they have been in the industry for a long time and therefore have several older
and uneconomic lines given the evolution of technology and also because of the
erosion of some of the traditional market segments which were important in the
past e.g. Magnetic media.
iii) The distributed manufacturing strategy ensures that the Company has a much
deeper access to the markets than if all the capacity was at one single
location.
iv) The Company seeks to ensure that its costs are lower than regional competitors
through the sustained focus on improving productivity and keeping a close watch
on all elements of costs. Internal and external benchmarking is an ongoing
activity. Illustratively, with no investments in fresh capacity, production at
the plant at Khatima has increased from 12,398 MT in 1998-99 to 20,638 MT in
the year under review, an increase of 66%. A further improvement in the current
year is anticipated. Programs like TPM have been critical to this
success.
Important elements of the cost structure-apart from raw material include
packing, power and fuel and freight. Sustained efforts are underway to exercise
control on these costs.
Aggregating purchases of material and services, to the extent possible
strengthens negotiating positions.
v) With the commissioning of Chips plant and Metalliser in Thailand and Turkey,
the value additions have been better than what they otherwise would have
been.
vi) Several initiatives are underway to broaden the product portfolio. This
comprises of the following:
New Product development through modifications in Chips, Processing conditions
and In-line coatings
Downstream activities - An off-line coating project has been setup in India and
a Thermal Lamination project in Thailand is under implementation.
vii) Manufacturing facilities in Thailand enable quick access to the fast
growing Asia-Pacific region. There is a preferential duty treatment in some
countries within the ASEAN region.
viii) Similarly, the facility in Turkey ensures speedy deliveries to the
markets in the hinterland- EU, CEE, Russia / CIS and Mediterranean rim.
Turkey has Customs union with EU which enables duty free
movement of material between Turkey and EU.
ix) Scaling up in each manufacturing location along with integration both
backward and forward helps achieve economies as well as capturing a larger
portion of the value chain.
x) Accessing customers operating across countries in the flexible packaging and
industrial segments by presenting alternative sourcing options from India,
Thailand and Turkey and thereby mitigating their risks. This enables a more
stable pricing regime.
xi) Deepening of the distribution reach is an important objective, which is
sought to be accomplished by an appropriate mix of channel partnerships, direct
presence and dealer representation and strengthening of the sales team. The
investment in distribution in USA is another key step in this direction.
xii) The Company has, in the past, built strong relationships with customers,
which has helped it in adverse market conditions. It intends to forcefully
extend this strategy to new customers.
xiii) Geographically diversified manufacturing should moderate the influence of
varying market conditions in different regions.
xiv) Diversification, as planned into other barrier films, would moderate the
impact of cyclicality given the different nature of the product markets.
b) Product Concentration
The Company operates only in one product line - i.e. Polyester films. This should be viewed in the context of the following factors:
i) Polyester film has a range of applications and a decline in one can be
offset by increase in another. Illustratively, while the magnetic media has
been witnessing a decline, the overall demand continues to increase as
applications such as packaging have exhibited a strong and sustained
growth.
ii) Further, recent initiatives in forward integration should minimize this
risk.
iii) The company has successfully developed new products for special
applications like antistatic, low haze and special purpose coated films which
will allow the company to increase its margins.
In addition, as mentioned elsewhere in the report, the Company is actively
evaluating various other substrates of the flexible packaging market including
BOPP and CPP. A foray into these products would not only provide an impetus for
next round of growth but would also increase the strength of the Company in
withstanding volatile market conditions.
Financial Risk
Foreign
Exchange:
The Group's activities have a high export orientation. In the first instance the risk on account of currency mismatches is sought to be minimized by aligning inflows and outflows in the same currency so that the exposure is limited to the net flows. In addition, depending on the outlook forward currency sales are undertaken.
While India and Thailand have a net US Dollar inflow, operations in Turkey
would indicate a surplus in Euros and deficit in US Dollar. Should the trading
currencies depreciate versus Indian Rupees (INR) there would be an adverse
impact on consolidated profitability.
Interest rate risk:
Loans in India are on a fixed as well as floating rate
basis. US dollar denominated loans in India carry a LIBOR linked rate and
therefore potentially higher outgoes are possible in the event there is an
upward movement in LIBOR. Euro loans for Polyplex Thailand and Polyplex Europa
are on floating rate basis linked to EURIBOR. Appropriate swaps from floating
to fixed rates have been done based on estimated movements in interest
rates.
Leveraging:
The consolidated total debt equity ratio was 0.45:1 at the end of 2006-07
as compared to 0.52:1 at the end of 2005-06. The standalone debt-equity stood
at 0.46:1 (previous year 0.72:1). With the committed/planned level of
investments in India, Thailand and Turkey, this ratio is likely to go up
substantially as most of the financing will be done from debt route and also
all excess cash (currently placed in short term liquid investments) will be
utilized. However, the debt-equity ratio is still likely to be within
comfortable range especially with the stronger earnings expected in the current
year.
Although, debt service requirement are going up year by year and peaking in 2009-10, higher volumes and expected improvement in market conditions will help the company in reducing this risk.
Project risk
As mentioned earlier, Polyplex Europa has successfully implemented one Thin Film line, along with Metalliser and Co-generation plant in Turkey. During the year under review it successfully implemented a captive chips generation facility at the existing location in Turkey. As at the year end, one thin film line at Turkey and a Thermal lamination project at Thailand are under implementation. The successful implementation of the three PET film lines and three chips production plants outside India has demonstrated its project execution skills. The fact that firm financing arrangements are in place and most of the Project cost and delivery schedules are firm mitigate this perceived risk sufficiently.
Further, post the balance sheet date two Metallizers have been ordered which
would be operational by early next year.
Country risk
The capacity in Thailand is twice that of India. They have made major investments in Turkey. Therefore fortunes for the parent company in India are intricately interwoven with the success of the operations in Thailand and Turkey. Based on the Company's experience so far, as well as, that of a whole spectrum of foreign owned businesses present in Thailand and Turkey for a long time, it would appear that the risks are not significant. Though some political problems were faced during the year both at Thailand and Turkey, it has had no impact on business activities. In the event these problems escalate, there may be some impact for a short duration. However, no adverse long term impact is envisaged.
With exposure now being spread to three countries, the overall locational risk
for the Company stands well diversified.
Trade defense measures
As mentioned elsewhere in the discussion, international trade in PET film has been the subject of several anti-dumping and countervailing duty investigations and actions. The high export orientation of the industry makes this an important business risk. An understanding of these measures resulting from the past investigation against exports of PET film from India and a geographically well-diversified sales portfolio will help mitigate the adverse fall-out of such an action.
Future Outlook
Recent announcements of new lines could result in an over-supply situation in the short to medium term. However, the continued growth of demand should bring the demand-supply balance in equilibrium over time. As explained elsewhere, moderating the influence of cyclical nature of the industry is an important challenge. The Company is constantly striving to position itself in a manner that while following broad industry trends, it is able to consistently deliver better performance than its competitors. The expansion in Thailand and Turkey, new investments in downstream projects and efforts towards enhancing the product portfolio and capacity are consistent with this strategy.
FIXED ASSETS:
· Freehold Land
· Buildings
· Leasehold Land
· Plant and Machinery
· Electrical Installation
· Vehicles
· Office Equipments
· Furnitures and Fixtures
WEBSITE DETAILS:
With its headquarters in NOIDA, New Delhi the Company has
three PET Film manufacturing facilities– one located in Khatima in the state of
Uttaranchal, India, another at Rayong province in Thailand (owned and operated
by Polyplex (Thailand) Public Company Limited. (PTL), its subsidiary) and the
latest facility at Çorlu, Tekirdag in Turkey (owned and operated by Polyplex
Europa Polyester Film San. ve Tic. A.S. (PE), which is a wholly-owned
subsidiary of PTL).
Polyplex has established itself as one of the most
profitable producers of PET Film by way of cost efficient operations resulting
from high productivity and low overheads. Its products have gained wide
acceptance in the Global markets, such as USA, Europe, South-East Asia, South
America, North America and Australia, where the Company has been consistently
exporting about 75% of its production.
The Company has a dynamic workforce of about 400 employees
in India, more than 250 employees in Thailand and more than 150
employees in Turkey.
With its expansion in Turkey, Polyplex has a capacity of
83,000 TPA. The capacity enhancement in Turkey has made Polyplex the 5th
largest Thin Film Producer in the world.
Polyplex was incorporated in 1984 and commenced commercial operations
with its first Film line of 4000 TPA in May 1988, which was subsequently
increased to 6000 TPA. With its operations stabilizing, by the mid 90’s,
Polyplex was able to emerge as one of the most profitable producers of
Polyester Film in India.
Polyplex undertook an expansion in film capacity by adding another film
line of 9000 TPA in March 1996. It also integrated backward into the
manufacture of Polyester Chips meant for captive consumption, and commenced
production in March 1997.
While mirroring industry trends, the Company’s financial performance has
been consistently better than the industry, resulting from the Company’s focus
on Polyester Films, its strategic understanding of the PET Film market and
operational efficiencies. Initiatives such as TPM, BPR and implementation of
ERP have lead to sustained improvements in productivity. A turnaround in market
conditions since mid-2000 has seen a significant improvement in the
profitability of their operations, thus creating conditions for further growth.
Following from the Company’s objective of being a PET Film manufacturer
of Global significance, Polyplex expanded its film capacity further by
investing in a new film line of 15000 MT in Thailand. The new line was
commissioned on April 2, 2003 within the budgeted costs and ahead of time.
Following this, PTL has set up its next PET film line with a capacity of 15000
MT in a record time of nine months. The line commenced commercial production in
November 2003.
The Company also commissioned a Metallizer in India in December 2002.
This has enabled the Company to broaden its product portfolio and improve value
additions.
These investments have strengthened the Company’s competitive position
in the PET Film business ensuring continued cost leadership. This together with
the current demand-supply situation, would enable Polyplex to provide an
attractive value proposition to its customers and investors.
Production in both the India and the Thailand units has been more than
rated capacity. Consequently in 2003-04 capacities were restated at 20,000 MT
for India and 39,000 MT for Thailand.
During 2004-05, the Company took steps to implement a Polyester film
plant in Turkey and has formed a Company in Turkey, Polyplex Europa Polyester
Film San. Ve Tic. A.S., for this purpose. This unit successfully started
commercial production in December 2005.
During 2005-06, Company planned to set up a Silicone Coater Plant with an
investment of around Rs. 220 millions. Currently Trial runs are being
undertaken.
Plants Installed
Capacity (MT) Remarks
Polyplex
Corporation Limited. (PCL)
PET Film 20000 -
Polyester Chips 20000 For
captive use
Metallizer 4800 -
Silicone Coater 2000 Scheduled
to
commence production in July 06.
Polyplex
(Thailand) Public Company Limited (PTL)
PET Film 39000 -
Polyester Chips - Batch Polycondensation 7000 For
captive use
Polyester Chips - Continuous Process 45500 Commenced
production in February 2005
Metallizer 4800 Commenced
production in June 2005
Polyplex Europa
San. ve Tic. A.S. (PE)
PET Film 24000 Commenced
production in December 2005
Metallizer 5000 Commenced
production in March 2006
Polyester Chips - Continuous Process 45500 Commencement
scheduled in Third Quarter of 2006-07.
Polyplex in Thailand (PTL)
Polyplex (Thailand) Public Company Limited is a subsidiary of Polyplex
Corporation Limited. The Company commenced commercial production on April 2,
2003 from its first Polyester Film line located in Rayong province. With the
start of production at their second PET film line on November 13, 2003, they
have a total capacity of 39000 MT. In September 2004, they also successfully
started operations of their batch polycondensation PET chips plant. After the
startup of the continuous process PET chips plant, the company has become
self-sufficient in its raw material requirement and improved its value
addition. The total investment in these projects is about USD 60 million.
Polyplex in Turkey (PE)
A wholly-owned subsidiary of PTL, Polyplex Europa Polyester Film Sanayi
ve Ticaret A.S. has been formed in 2004-05 for setting up a Thin Film line with
a capacity of 24000 MT in the Free Zone in Çorlu, Tekridaag in Turkey. The Film
line successfully started commercial production in December 2005. Metallizer
has also successfully started production in March, 2006. PE is now in the
process of implementing a Chips plant at the existing location. The total
investment in these projects is about USD 55 million.
Polyplex in USA
Polyplex (Americas) Inc. is a subsidiary of
PTL. This company is a distributor of Polyplex Corporation Limited for North
American Region.
Milestones
1984 Polyplex
Corporation Limited is incorporated.
1987 Became
a listed company in India.
1988 Commences
commercial operations with its first Film line of 4000 TPA.
1996 Polyplex
undertakes expansion in Film capacity by adding a new Film line of 9000 TPA.
1997 Commences
integrated backward manufacturing of Polyester Chips meant for captive
consumption.
2002 Polyplex
commissions a Metalliser in India with a capacity of 4800 TPA.
2003 Polyplex
(Thailand) Public Company Limited (PTL) commences operations in Thailand with a
39,000 MT PET film plant.
2004 PTL’s
Batch Polycondensation PET chips plant commences in September.
2004 PTL
successfully floated an IPO and is listed on Stock Exchange of Thailand.
2005 PTL’s
Continuous Process PET chips plant commences in February.
2005 PTL
commissions a Metallizer in Thailand with a capacity of 4800 TPA in June.
2005 PE
commences operations in Turkey with a 24,000 MT PET film plant in December.
2006 PE
commissions a Metallizer in Turkey with a capacity of 5000 TPA in March.
2006 PTL
invested USD 1 Mn in Polyplex America to Acquire 90% stake in the
Company.
Product Description
Biaxially oriented PET film (BOPET) is used successfully in a wide range
of applications, due to its excellent combination of optical, physical,
mechanical, thermal, and chemical properties, as well as its unique
versatility.
v
Optically brilliant, clear appearance
v
Unequaled mechanical strength and toughness
v
Excellent dielectric properties
v
Good flatness and coefficient of friction (COF)
v
Tear-resistant and puncture-resistant characteristics
v
Wide range of thickness-as thin as 1 micron up to 350 micron
v
Excellent dimensional stability over a wide range of temperatures
v
Very good resistance to most common solvents, moisture, oil, and grease
v
Excellent barrier against a wide range of gases
PET film can also be modified:
v
from extremely low shrinkage (<0.1%) to as high as about 75%-in any
direction;
v
with pigments and fillers into a wide range of colors, haze,
translucency, or opacity; and
v
to change surface textures from very smooth to any desired roughness.
A wide range of chemical treatments (in addition to corona) can be
applied to PET film during its manufacture to help it adhere to various
coatings, such as inks, adhesives, metalization, etc. Surface treatments can
also be applied to incorporate properties like surface-slip and anti-static.
Yet another approach is co-extrusion, where different polyester layers are
combined to obtain properties like built-in heat sealability, rough surface
with high clarity, etc.
Details on Surface Treatment
In addition to its versatility in properties and applications, PET film
is also among the most environmentally friendly materials offered. Hundreds of
film grades are currently available to meet the needs.
Quality and Services
Their commitment to Total Customer Satisfaction through consistent
Quality, reliable Delivery and prompt Service reflects in their ISO 9002 and 14001 accreditation, as also in
the institutionalization of a Quality Assurance System, based on
Standardization, Customization, Conformance, and Continuous Training and
Improvement. Implementation of Total Productive Maintenance (TPM), with its
focus on Productivity and Quality and utilization of an Enterprise wide
Resource Planning (ERP) platform, SAP R/3, enables them to proactively monitor
and control their business processes.
Environment Statement
PET is considered to be a "green" or environmentally friendly
polymer. The reason being that PET and PET-based products are –
v
Safe
v
Non-toxic
v
Do not contains heavy metals
v
Do not use plasticizers
v
Lightweight
v
Easily recycled
As the demand for PET grows, more and more applications are being
developed. This will allow industries throughout the world the ability to use PET
Film to make stronger, lighter products-thus helping them replace other heavier
materials that have undesirable environmental characteristics.
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.39.66 |
|
UK Pound |
1 |
Rs.78.16 |
|
Euro |
1 |
Rs.58.09 |
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 |
8 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--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/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|