MIRA
INFORM REPORT
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Report Date : |
23.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
SUDARSHAN
CHEMICAL INDUSTRIES LIMITED |
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Registered Office : |
162, Wellesley Road, Pune – 411 001, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
19.02.1951 |
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Com. Reg. No.: |
25-1082 |
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CIN No.: [Company
Identification No.] |
L24119PN1951PLC008409 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PNES06998F /
NGPS01977D |
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Legal Form : |
A Public Limited
Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of
Inorganic Pigments, Organic Pigments & Dyestuffs, Intermediates and
Pesticides. |
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 3800000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established and reputed company having fine track. Financial position is
good. Payments are correct and as per commitments. Trade relations are fair.
The company is doing well. It can be
considered good for normal business dealings at usual trade terms and
conditions. The company can be regarded as a promising business partner in a
medium to long run. |
LOCATIONS
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Registered Office : |
162, Wellesley Road, Pune – 411 001, Maharashtra, India |
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Tel. No.: |
91-20-2612 7334 / 26058888 / 26058046 |
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Fax No.: |
91-20-2612 5900 / 26058222 |
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E-Mail : |
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Website : |
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Factory 1 : |
162, Wellesley
Road, Pune – 411 001, Maharashtra, India |
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Factory 2 : |
46 MIDC Estate,
Dhatav, Roha - 402 116, Raigad, Maharashtra, India |
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Factory 3 : |
Plot No. A-19/1+2, MIDC Estate, Mahad - 402 301, Raigad,
Maharashtra, India |
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E-mail
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Pigment technical enquiry: pts@sudarshan.com Pigment domestic sales enquiry: pgmtscm.home@sudarshan.com Pigment international sales enquiry: pgmtscm.export@sudarshan.com Agro enquiry: agro@sudarshan.com Specialty (pearl) pigments enquiry: pearl@sudarshan.com Careers: careers@sudarshan.com Investor Relations: shares@sudarshan.com Other enquiries: contact@sudarshan.com |
DIRECTORS
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Name : |
Mr. Kishore Laxminaryan Rathi |
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Designation : |
Executive Chairman |
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Qualification : |
B.Sc. , B. Sc.(Tech), M. A. (Chem.) Columbia |
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Date of Appointment : |
19.05.2007 |
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Name : |
Dr. N. A. Kalyani |
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Designation : |
Director |
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Name : |
Mr. B. S. Mehta |
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Designation : |
Director |
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Name : |
Mr. Pralhad Parsram Chhabria |
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Designation : |
Director |
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Name : |
Mr. Dara Nadirshaw Damania |
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Designation : |
Director |
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Name : |
Mr. Shrikrishna Narhar Inamdar |
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Designation : |
Director |
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Name : |
Mr. Abhay Navalmal Firodia |
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Designation : |
Director |
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Name : |
Mr. Subramanian Padmanabhan |
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Designation : |
Director |
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Name : |
Mr. Balkrishna Jagannath Rathi |
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Designation : |
Executive Chairman |
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Qualification : |
B.E. |
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Date of Appointment : |
01.10.1956 |
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Name : |
Mr. Pradeep Ramwilas Rathi |
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Designation : |
Vice Chairman and Managing Director |
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Qualification : |
M.S.(M.I.T.), M.B.A. (Columbia) |
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Date of Appointment : |
19.05.2007 |
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Name : |
Mr. Narayandas Jagannath Rathi |
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Designation : |
Director and Company Secretary |
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Qualification : |
M.Com, M.B.A. (U.S.A.) |
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Date of Appointment : |
01.06.1972 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
Promoters Group – Rathis
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3471437 |
50.15 |
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Non Promoters |
3451288 |
49.85 |
Total
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6922725 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of
Inorganic Pigments, Organic Pigments & Dyestuffs, Intermediates and
Pesticides. |
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Products : |
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Exports : |
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Countries : |
Australia, Canada, Japan and United States |
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Imports : |
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Countries : |
Japan, Germany, United States, Hungary |
PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Inorganic Pigments |
MT |
6530 |
5430 |
6192 |
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Organic Pigments |
MT |
6400 |
6805 |
6457 |
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Intermediates |
MT |
4100 |
2320 |
130 |
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Pesticides (100%) |
MT |
3460 |
3520 |
1864 |
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High performance Speciality dyes |
MT |
310 |
- |
- |
GENERAL
INFORMATION
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No. of Employees : |
1181 |
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Bankers : |
v
Bank of
Maharashtra v
State Bank
of India v
Bank of
Baroda v
ICICI Bank
Limited v
HDFC Bank
Limited v
Export –
Import Bank of India v
BNP Paribas v Mizuho Corporate Bank Limited |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
B. K. Khare &
Company Chartered
Accountants |
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Address : |
Mumbai,
Maharashtra |
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Associates/Subsidiaries : |
Prescient Color Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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8000000 |
Equity Shares |
Rs. 10/- each |
Rs. 80.000 Millions |
Issued, Subscribed
& Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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6922775 |
Equity Shares |
Rs. 10/- each |
Rs. 69.227 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
69.227 |
69.227 |
69.227 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
890.246 |
918.953 |
856.747 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
959.473 |
988.180 |
925.974 |
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LOAN FUNDS |
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1] Secured Loans |
563.184 |
417.979 |
432.995 |
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2] Unsecured Loans |
387.006 |
448.432 |
418.912 |
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TOTAL BORROWING |
950.190 |
866.411 |
851.907 |
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DEFERRED TAX LIABILITIES |
109.198 |
123.922 |
139.569 |
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TOTAL |
2018.861 |
1978.513 |
1917.450 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
718.196 |
800.855 |
837.204 |
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Capital work-in-progress |
61.387 |
24.700 |
22.857 |
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INVESTMENT |
47.666 |
5.666 |
5.675 |
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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 |
745.186 |
788.829 |
822.782 |
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Sundry Debtors |
883.639 |
862.621 |
703.735 |
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Cash & Bank Balances |
85.044 |
91.153 |
91.801 |
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Other Current Assets |
28.814 |
23.673 |
29.904 |
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Loans & Advances |
79.706
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148.454
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104.339
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Total Current Assets |
1822.389 |
1914.730
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1752.561
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
558.395
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711.462
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664.775
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Provisions |
89.449
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55.976
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36.072
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Total Current Liabilities |
647.844 |
767.438
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700.847
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Net Current Assets |
1174.545 |
1147.292
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1051.714
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MISCELLANEOUS EXPENSES |
17.067 |
0.000 |
0.000 |
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TOTAL |
2018.861 |
1978.513 |
1917.450 |
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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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Income from Operations and Other Income |
4296.760 |
4463.549 |
3871.044 |
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Less : Excise Duty |
389.421 |
450.824 |
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Total Income |
3907.339 |
4012.725 |
3871.044 |
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Profit/(Loss) Before Tax |
56.263 |
149.245 |
213.398 |
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Provision for Taxation |
15.376 |
46.753 |
65.473 |
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Profit/(Loss) After Tax |
40.887 |
102.492 |
147.925 |
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Earnings in Foreign Currency : |
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Export Earnings |
1342.071 |
1241.238 |
978.695 |
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Other Earnings |
1.936 |
3.154 |
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Total Earnings |
1344.007 |
1244.392 |
978.695 |
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Imports : |
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Raw Materials |
609.152 |
581.530 |
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Stores & Spares |
1.319 |
2.201 |
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Capital Goods |
6.390 |
3.882 |
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Total Imports |
616.861 |
587.613 |
466.127 |
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Expenditures : |
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Raw Material Consumed |
2313.561 |
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Manufacturing and Other Expenses |
984.411 |
965.249 |
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Administrative and Selling Expenses |
397.120 |
499.151 |
3657.645 |
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Finance Cost |
93.129 |
73.355 |
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Depreciation & Amortization |
117.303 |
117.561 |
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Increase/(Decrease) in Finished Goods |
[54.448] |
42.763 |
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Total Expenditure |
3851.076 |
3863.481 |
3657.645 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
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Type
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
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Sales Turnover |
879.400 |
1045.500 |
903.000 |
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Other Income |
9.600 |
16.000 |
17.100 |
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Total Income |
889.000 |
1061.500 |
920.100 |
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Total Expenditure |
826.000 |
970.600 |
858.500 |
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Operating Profit |
63.000 |
90.900 |
61.600 |
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Interest |
26.400 |
29.400 |
29.500 |
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Gross Profit |
36.600 |
61.500 |
32.100 |
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Depreciation |
29.000 |
29.500 |
29.800 |
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Tax |
4.700 |
15.700 |
5.500 |
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Reported PAT |
5.700 |
18.100 |
-0.100 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Debt-Equity Ratio |
0.93 |
0.90 |
0.95 |
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Long Term Debt-Equity Ratio |
0.22 |
0.32 |
0.43 |
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Current Ratio |
1.19 |
1.26 |
1.26 |
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TURNOVER
RATIOS |
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Fixed Assets |
1.62 |
1.72 |
1.64 |
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Inventory |
5.49 |
5.44 |
5.80 |
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Debtors |
4.82 |
5.60 |
6.97 |
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Interest Cover Ratio |
1.56 |
2.80 |
4.47 |
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Operating Profit Margin(%) |
6.51 |
7.98 |
9.60 |
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Profit Before Interest And Tax Margin(%) |
3.73 |
5.29 |
6.69 |
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Cash Profit Margin(%) |
3.76 |
5.02 |
6.51 |
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Adjusted Net Profit Margin(%) |
0.97 |
2.34 |
3.60 |
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Return On Capital Employed(%) |
8.39 |
12.80 |
16.17 |
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Return On Net Worth(%) |
4.21 |
10.74 |
16.94 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was
incorporated on 19th February, 1951 at Pune in Maharashtra having
Company Registration Number 1082.
Subject is
controlled by Mr. R. J. Rathi.
The company offered
shares to public at par in December, 1976.
Until the seventies, the company manufactured organic / inorganic
pigments and intermediates. But in
1980, it diversified into pesticides.
In January, 1991,
it commenced manufacture of a new range of organic pigments such as
pthalocyanine with technology from Dainippon Ink and Chemicals, Japan. The Japanese collaborator apart from
providing technology, also holds a 29.03% stake in the company. The company entered the area of
environmental engineering in collaboration with Radian Corporation, USA. It went public with a rights offer at a
premium of Rs. 100 to set up a plant to manufacture 1125 tpa of organic
pigments at Mahad.
The company
announced bonus shares (1:2). Its quality management has been designed to meet
the requirements of ISO 9001 certification by BVQL. During the year 1994-95,
exports amounted to Rs. 458.00 millions has received ISO 9001 certification in
respect of its Pigment division. The Government has selected the best industry
for Top Excellence Safety Awards. Pune factory has won "First Best Safety
Performance Award" in Industrial Safety Competition five times in the last
six years.
During the year
2000-01, the company has received the prestigious ISO 9001 re-certification in
respect of its Pigment Division by Bureau Verities Quality International
(BOQI). During the year 2000-01, Mahad factory has been awarded the covted ISO
14000 certification by Bureau Veritas Quality International (BVQI) which
reconfirms the emphasis given by the company to safety and environment aspects
and strict adherence to safety and environment standards.
The company has
received the following awards :
v
The Government
has been selected as the best industry for Top Excellence Safety Awards.
v
Pune factory
has won "First Best Safety Performance Award" in Industrial Safety
Competition five times in the last six years.
v
During the
year 1999-2000, The National Safety Council has selected Mahad factory for
coveted "Top Excellence Safety Award".
The company is
in trade terms with :
v
Blue Crystals
Chemicals Limited
v
Nichrome Metal
Works
v
Techno Filters
Private Limited
v
Besto
Container Industries
v
The Coronation
Arts Crafts
v
Deccan
Chromates Limited
v
Chemac
Equipments Private Limited
v
J. P.
Enterprises
v
Heritage
Associates
v
Inwac Metals
and Chemicals Private Limited
v
Jaju Chemicals
Private Limited
v
Oriental
Agency
v
Royal Plastics
v
Shiv Chemicals
v
PCI Services
v
Som
Phytopharma (India) Limited
v
Spectrum
Ethers Limited
v
Shri Ambuja
Metallic
v
Serve Al
v
Shree Tirupati
Enterprise
v
Silvo Liacal
Chemicals Limited
v
Makwana
Brothers
v
Monga
Electronics Private Limited
v
Daman Ganga Paper Converters (Private) Limited
v
Innovative Technomics Private Limited
v
Maharastra Metal Works Private Limited
v
Metaltek Techno-Projects (India) Private Limited
v
Premier Orgochem Ind. Private Limited
v
Protchem Industries (India) Limited
v
Sahyadri Graphics Private Limited
v
Shree Shivshankar Drugs and Pharmaceuticals Private Limited.
v
Shree Siddhi Poly Sacks
v
Silvo Liacal Chemicals Limited
v
Sudarshan Engineering and Chemical Corporation
New Relationship With Danippon INK and Chemicals INC, Japan:
Members
are aware that Dainippon Ink and Chemicals Inc. (DIC) Japan have for global and
strategic reasons entered into an Agreement terminating the Collaboration
agreement with the Company and the Shareholders Agreement with Rathi Group
(Promoters). Consequentially, DIC has divested 14,51,700 equity shares of Rs.
10% each aggregating 20.97% of the paid up equity capital of the Company in
favour of Rathi Group and will continue to hold 5,57,989 equity shares
aggregating 8.06% of the paid up capital. Consequent to the Agreement, DIC has
withdrawn their nominees on the Board of Directors of the Company.
The
Company appreciates the harmonious relationship it has enjoyed with DIC in the
past and is confident that the same spirit of co-operation will continue in the
future also.
DIC will continue to import the pigments manufactured by the Company and
also entrust the Company with Toll Manufacture of certain pigments as well as R
and D work to develop specific pigments.
THE
YEAR IN RETROSPECT:
Sales:
Gross Revenue for the year ended 31st March 2007 amounted to
Rs.3907 million as against Rs.4013 million achieved during the previous year.
Profit
after tax for the year ended 31st March, 2007 was Rs.41 million as against
Rs.103 million earned during the previous year.
The
Pigment Division has performed well given the constraints within which it is
operating. Overall, Pigment Sales rose in 2006-2007 from Rs.2632 million to
Rs.2946 million registering a growth of 12% as compared to the previous year.
High Performance Pigments and Effect Pigments will be important components for
future growth, as new premium range is introduced at home and overseas.
The
performance of the Agro Division was largely dented on account of various
factors ranging from adverse climatic conditions, increased usage of BT Cotton
seeds which are pest resistant as also due to extreme competitive conditions
prevailing in the domestic market. Apart from affecting sales growth these has
had a greater impact on the profitability. Sales of Agro Division during the
year amounted to Rs.877 million as compared to Rs.1301 million in the previous
year.
Exports:
Revenues from exports for the year ended 31st March 2007
amounted to Rs.1347 million as against Rs. 1185 million for the previous year
showing a growth of 14%. About 95% of the exports were accounted by Pigments.
This year Agro Division could achieve a small but significant export turnover
of Rs.65 million. Excellent contribution to the top line has been seen from
direct sales of Pigments to the Middle East and the SAARC regions. Sales of
Pigments to SUN Chemical and DIC in Europe, NAFTA and Far East regions have
also remained strong this year. Initial sales of Pigments from new regions were
seen this year, with strong sales expected in Africa and Latin America next
year. Members will be pleased to note that the Company has been selected for an
award in recognition of excellent performance in exports of Pigments by a large
scale unit for 2006-2007 by the Dyestuff Manufacturers Association of India.
This indeed is a great recognition for the Company.
The Company has evolved a strategy to enter into a strategic tie up with
overseas companies for exporting it's Products. The objective being to
establish a firm presence as a niche player in the export market aimed at
achieving good growth in volumes and profitability.
OUTLOOK FOR THE
FUTURE:
The future outlook for the domestic Pigment Industry looks good as there is a continuing growth in the printing ink. paint, plastic and textiles market as established multinationals locate manufacturing plants in India to take care of the emerging opportunities of growth. Export of Pigments also continues to be promising. Sudarshan's relationship with its strategic partners Dainippon Ink and Chemicals. Inc., Japan and SUN Chemicals, U.S.A. continues to be very good. Sudarshan and EHC have affirmed to work together in the developed markets to maximise the opportunities open as partners.
As
environmental drivers increase the world demand for High Performance Pigments,
the Company sees an opportunity to differentiate from most local competitors by
offering an extended range of quality High Performance Pigments that command
premium prices. Consequently, the Company sees less demand for the traditional
heavy-metal based colorants, and are evolving capabilities to meet this trend.
Sale of Effect Pigments also continue to hold promise and will be a key
component in the overall growth.
The functioning
and performance of the Agro Division continues to be affected by several
adverse factors including in particular severe competition and changing market
scenario. The Board has appointed a committee to explore ways and means to
arrest losses in the Agro Division and to examine other related issues. The
committee is expected to submit their report with recommendations soon.
The Company has
also implemented Six Sigma, Lean Sigma and host of other management tools aimed
at cost reduction, productivity improvement and increasing overall
efficiencies. This it is expected will contribute to the bottom line and lead
to operational excellence.
Barring
unforeseen circumstances, it is expected that the Company will register higher
growth rate in terms of revenues and profitability.
MANAGEMENT DISCUSSION
AND ANALYSIS:
Business of the
Company - an overview:
The Company is mainly engaged in the manufacturing and processing of a wide range of Organic and Inorganic Pigments, Effect Pigments, Pesticides, Agro Chemicals and other products with manufacturing facilities at Pune, Roha and Mahad, Dist. Raigad, Maharashtra. The Company was the first chemical Company in India to be awarded the ISO 9001 Certificate in the year 1991. Its Pune, Roha and Mahad plants have also been awarded the ISO 14001 Certificate. The Roha and Mahad plants have been certified for OHSAS 18000. The Mahad plant has been certified as OHSAS 18001 by BVQI for implementing systems aimed at reducing occupational risks in work areas besides focusing on health and safety. The Company has well established R and D laboratories recognised by Department of Scientific and Industrial Research (DSIR). Also the Labs are ISO 17025:2001 certified by National Accreditation Board for Testing and Calibration Laboratories (NABL), Government of India. Company has a wide distribution net work in India as well as abroad with stock points at more than 20 places in the country.
All the manufacturing plants and offices in the country are well connected with
the help of Enterprise Resource Planning system ( ERP).
Financial review - 2006-2007:
The Total
Revenue for the year ended 31st March, 2007 amounted to Rs.3907 million as
against Rs.4013 million for the previous year. The Net Profit after tax for the
year ended 31st March. 2007 amounted to Rs.41 million against Rs.102 million
for the previous year.
Pigment
Division has posted a growth in sales to the extent of 12% as compared to the
previous year. Profitability of the division was also higher as compared to the
previous year.
The performance
of Agro Chemicals Division was affected on account of adverse climatic and
market conditions. Sales during the year under review declined by about 33% as
compared to the previous year.
The Company has
an internal audit system and procedures commensurate with the size and nature
of its business.
Pigments:
Industry Structure and Developments:
The Company is
one of the largest manufacturers of Pigments in India. The Pigment Division
manufactures a wide range of Organic, Inorganic and Effect Pigments catering to
domestic and export markets. The Company's Pigments are exported to most of the
discerning markets in Europe, America and Asia.
The
manufacturing activity is carried out at Pune, Roha and Mahad factories.
There is an
excess of pigment capacity worldwide. This results in intense price competition
especially in the commodity segments.
Opportunities and Threats:
Pigment
manufacturers in the developed countries, owing to high manufacturing costs and
stringent environment control regulations are shifting their manufacturing
bases to developing countries. India has been one of the beneficiaries with the
overseas companies setting up their manufacturing bases in India or tying up
with domestic companies. This provides an opportunity to Indian
manufacturers.
The Indian
manufacturers, however, face major threat from global manufacturers who price
their products aggressively, mainly with the aim of warding off competition. The
unorganized sector also poses a major threat as they are able to manufacture
Pigments with lesser overheads as compared to established players.
The year under
review has seen an increase in steel and lead prices. These metals are used in
the manufacture of Inorganic pigments and effect pigments and has resulted in
substantial increase in raw material costs.
This has
affected margins, as the increase in the raw material costs could not be
totally passed on to the consumers.
Performance:
The Pigment Division increased its sales revenue in the 2006-07 to Rs.2946
million from Rs.2632 million in 2005-06, thereby showing an increase of 12%.
Sales from exports for the year under review amounted to Rs.1282 million as
against Rs.1183 million achieved during the previous year showing a marginal
growth of 8%. Reduced fixed costs and increase in high margin domestic sales
contributed to increased profitability in the year under review.
Domestic sales
were buoyant, reflecting increased demand in all regions, and have gone up by
15%. Sales to SUN chemical and DIC Europe, NAFTA and Far East regions have
remained strong this year. Exports to the Middle East, SAARC regions also
performed well. Initial sales from new regions were seen this year, with strong
sales expected in Africa and Latin America next year.
Outlook:
As a strategic supplier to DIC, Japan and SUN Chemicals, USA there are many
opportunities which are being studied. Extensive cost reduction programs have
been undertaken with the help of techniques such as Six Sigma.
Research and
Development is focused more on producing high performance pigments and pigments
required for niche markets. Many new effect Pigments are also being launched
for cosmetic and coating markets. As a consequence of all these actions, the
Company expects better results during the current year.
Pesticides:
Industry Developments:
The year under
review witnessed adverse climatic conditions coupled with a sharp increase in
the area planted with Bt cotton. The prices of Bt cotton seeds reduced by about
half. Consequently, sale of insecticides in cotton area, which consumes more
than 50% of insecticides, was adversely affected.
The products
manufactured by the Company also witnessed competition from cheaper imports of
pesticides from China. Consequently, the prices as well as volumes of locally
manufactured pesticides were adversely affected.
Opportunities and Threats:
For the first
time, exports crossed a figure of Rs.60 Millions. The Company has exported to
Far East countries such as Taiwan, Malaysia, Singapore and also to the Middle
East. Some exports have also been effected to Latin America. The number of
pesticides imported from China is increasing.
Performance:
Sales have declined to a level of Rs.877 million from a level of Rs.1301
million - a decline of Rs.424 million. This is mainly due to contraction in the
sales of formulations and simultaneous reduction in the sales of technical and
bulk formulations. However, the Company expects to improve performance as a
result of increased exports as well as of technical and bulk sales this year.
As far as formulation sales are concerned, the focus will be on consolidation
of brand sales and increased focus on the most profitable products.
Outlook:
The functioning
and performance of the Agro Division continues to be affected by several
adverse factors including in particular severe competition and changing market
scenario. The Board has appointed a committee to explore ways and means to
arrest losses in the Agro Division and to examine other related issues. The
committee is expected to submit their report with recommendations soon.
Fixed Assets:
- Freehold and
Leasehold Land
- Buildings
- Plant and
Machinery
- Vehicles
- Furniture and
Fixtures
- Office
Equipments
ABOUT ORGANIZATION
Subject has been a leading player in the Pigment and Agrochemical sector for over 50 years. This success is a result of their adherence to international standards and efficient practices in every aspect of their operations. They are the first chemical company in India to be awarded the ISO 9001 certificate for their Pigment Division in 1993. The high quality standards are maintained at every level of the company even as they continuously change to improve themselves.
Production of
their Pigments is carried out at plants in Pune, Roha, Mahad and that of
Agrochemicals is carried out at Roha. Their vast range of products includes
organic and inorganic pigments, speciality pigments, intermediates and
pesticides. Great emphasis is placed on Research and Development activities.
There are over 100 qualified scientists currently working in their
laboratories.
In order to
improve their customer service, they have implemented many planning tools. One
such tool is SAP R/3, which is the world’s leading Enterprise Resource Planning
software. They are also the first company in India to implement the Customer
Relationship Module to this software. Their factories, branch offices and
depots are now constantly connected with each other, allowing for better
response to customer needs. Supply Chain solutions are currently being
implemented to further increase the value of their goods. Further they are in
process of implementing SAP HR Module to strengthen the HR practices within the
organization.
VISION
· World Class Manufacturer of Pigments, Agro Chemicals and Speciality Chemicals in terms of quality and service.
· Cost of delivered product at par with China.
· No.1 in volumetric terms in Pigment business in South Asia and Middle East.
· Among top three in South Asia in Agrochemicals in categories they are in.
CORPORATE VALUES
Sudarshan has three divisions - Pigments, Agrochemicals and Environment Management.
Pigment Division
Established in 1952, this division is the flagship SBU of Sudarshan and manufactures various Organic, Inorganic and Speciality Pigments which are produced in its three plants of Pune, Roha and Mahad. The Pigment Division contributes approx. 70% of the total turnover of the company and caters to paints, printing inks, plastics and several other industries like cosmetics, textiles, leather etc. The Division has an excellent domestic and international network.
It also has the distinction of being the first to be ISO 9001 certified as well
as the first to set up indigenous R and D facilities. The R and D laboratories
offer excellent facilities with modern equipment and highly qualified manpower
which is further strengthened by various technology tie ups with International
leaders in the Chemical Industry.
Speciality Pigments Division
Subject is the only manufacturer of Pearl Pigments (also known as “effect” pigments) in India for the last 3 decades and has an installed capacity of 1500 tons / year.
Pearl pigment particles are thin, transparent platelets of high refractive index, which partially reflect and partially transmit light. Simultaneous reflections from many layers of oriented platelets create a sense of depth that is characteristic of pearl luster.
They manufacture two kinds of Pearl Pigments:
Mica Based Pearl
Pigments:
These types of Pearl Pigments are manufactured by coating Mica with either Titanium Dioxide or Iron Oxide. The transparency of pigment particles is due to extremely thin transparent coating of Titanium Dioxide in the form of micro-crystals.
There are several applications which use Mica Pearl Pigments such as textile
printing, paints, plastics, inks and cosmetics.
Lead Carbonate Based
Pearl Pigments:
“Lead Pearls” are basically Lead Carbonate hexagonal crystals having high refractive index. Simultaneous reflection and refraction of the light from many microscopic layers produce a kind of ‘shimmery luster’, called ‘Pearl essence’.
Lead Pearl Pigments are used in applications like spray coating, dip coating, brush coating, roller coating and printing on paper, plastic material, leather, wood, etc. The pearl crystals are dispersed in different vehicles such as hydrocarbon, MEK, toluene or water and are available as dispersed pastes containing about 50% crystals by weight. The paste containing a particular vehicle is to be selected on the basis of the end use.
Agrochemicals Division
Emergence of
Agrochemicals:
The Agrochemicals division, started in 1982, has made rapid strides and has catapulted Sudarshan into one of the leading companies in India through its innovative and quality products. Their research and development team has kept pace with the latest technology and has consistently introduced newer molecules with a more favorable environmental profile. From a level of around US $18 million in fiscal 2002-2003, the division has grown to over US $ 31 million by 2004-2005. Presently they are manufacturing various range of technical grade insecticides, fungicide, plant growth regulator and their formulations, for their both domestic and international customers.
Sudarshan, an ISO 9001 and ISO 14001 company with a total turnover of
approximately US$ 90 million, is aiming for OHSAS 18001 in the near future.
The SBU contributes 30% of the total turnover of the company. The division has
an excellent network of over 1000 distributors and 19 depots in the domestic
market and is backed by a very strong RandD team. Today, all the products
manufactured in this division are leading brands in their respective categories
and Sudarshan is the only Indian Company to introduce Triazoplus - a product made
by only a handful of companies worldwide.
Environment
Management Division
Started in technical collaboration with Radian Corporation, USA, the Environment Management Division offers consultancy in the fields of :
· Waste Water Treatment,
· Solid / Hazardous Waste Management,
· Gaseous Emission Control,
· Microbial Culture and,
·
Safety Services.
Special training has been imparted to the divisions scientists in the
Radian labs, USA. Besides designing the in house effluent treatment plants, the
division has helped in designing a wide variety of treatment plants for clients
such as Bajaj Auto, Telco, Cummins India, Manikchand Packaging, Tetra Pak India
and Marathwada Chemicals. To its credit it has also developed common effluent
treatment plants at Vatva, Ahmedabad.
Subject is the first chemical company in India to be awarded the ISO
9001 certificate for its Pigments Division.
BVQI (UK) conducted the first training course for ISO 9001 in 1991 and
subsequently the quality system was designed and developed in line with the ISO
requirements. In 1993, the pigment division of Sudarshan was awarded the ISO
9001 certification by BVQI and since then two surveillance vists are conducted
every year. Sudarshan was recertified in 1996 and in 2001 for the latest version
(ISO 9001:2000). Today, this well documented system consists of over 20
manuals, 400 procedures, thousands of work instructions and formats.
BVQI (UK) has recently certified the Mahad Plant for ISO 14001 for Enviornment
standards. Their Pune Plant is recently certified for ISO 14001 in July 2003.
Business of the
company – an overview
The Company is
mainly engaged in the manufacturing and processing of a wide range of Organic
and Inorganic Pigments, Pearl Pigments, Intermediates, Pesticides, Agro Chemicals
and other products with manufacturing facilities at Pune, Roha and Mahad,
Dist.Raigad, Maharashtra.
The Company was the first chemical Company in India to be awarded the ISO 9001
Certificate in the year 1991. Its Pune, Roha and Mahad plants have also been
awarded the ISO 14001 Certificate. The Mahad plant has been recently certified
OHSAS 18001 by BVQI for implementing systems aimed at reducing occupational
risks in work area besides focussing on health and safety. The Company has well
established R and D laboratories approved by CSIR for pigments and pesticides.
It has a wide distribution net work in India as well as abroad with stock
points at more than 20 places in the country.
All the manufacturing plants and offices in the country are well connected with
the help of Enterprise Resource Planning system (ERP).
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.39.91 |
|
UK Pound |
1 |
Rs.78.44 |
|
Euro |
1 |
Rs.59.13 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
|
81 |
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 |
|