MIRA
INFORM REPORT
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Report Date : |
27.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
TODAYS WRITING
PRODUCTS LIMITED |
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Registered Office : |
Survey No 251/2,
Valsad Falia, Near Jain Temple, Dadra, Dadra and Nagar Haveli – 396193, Union
Territory |
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Country : |
India |
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Financials (as on) : |
31.03.2007 [15
Months] |
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Date of Incorporation : |
29.04.1992 |
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Com. Reg. No.: |
56-000041 |
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CIN No.: [Company
Identification No.] |
U74999DD1992PLC000041 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
SRTT00791A |
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PAN No.: [Permanent
Account No.] |
AABCT1487E |
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Legal Form : |
Public Limited
Liability Company. Company’s shares are listed on the stock exchanges. |
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Line of Business : |
Subject is engaged in Manufacturing of Pens. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 2700000 |
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Status : |
Satisfactory |
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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 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/Factory : |
Survey No 251/2,
Valsad Falia, Near Jain Temple, Dadra, Dadra and Nagar Haveli – 396193, Union
Territory, India |
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Tel. No.: |
91-260-2668538 /
2668574 |
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Fax No.: |
91-260-2668536 |
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E-mail : |
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Administrative Office : |
201, Hari Om Chambers, B-16, New Link Road, Andheri (W), Mumbai -
400053, Maharashtra, India |
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Tel. No.: |
91-22-66954900 |
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Fax No.: |
91-22-66954910 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Rajesh Kumar Drolia |
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Designation : |
Director |
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Name : |
Mr. Mukesh Gupta |
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Designation : |
Director |
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Name : |
Mr. Parag Sanghvi |
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Designation : |
Director |
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Name : |
Mr. Ronald Netto |
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Designation : |
Director |
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Name : |
Mr. Rahul Gupta |
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Designation : |
Director |
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Name : |
Mr. Sanjeev Shah |
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Designation : |
Director |
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Name : |
Mr. Arun Beswal |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr Navin
Choudhary |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
7592358 |
59.26 |
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Individuals |
2469440 |
19.27 |
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Banks and FI’s |
913244 |
7.13 |
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Corporate |
1599537 |
12.48 |
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NRI and OCBs |
238721 |
1.86 |
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Total |
12813300 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Subject is engaged in Manufacturing of Pens. |
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Products : |
Company's product
portfolio includes
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GENERAL INFORMATION
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Customers : |
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No. of Employees : |
About 2000 |
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Bankers : |
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Facilities : |
Notes: A. Term Loan 1. Term Loan
from Axis Bank is secured by a) Pari passu first charge on the entire movable
and immovable fixed assets of the company both present and future b) Pari
passu second charge on the current assets of the company both present and
future c) Personal guarantee of Managing Director (Mr. Rajesh K Drolia) d)
and any other security available to the other lenders for the EOU project
shall also be made available to Axis Bank Present outstanding Rs 51.243
Millions. 2. Corporate
Loan from State Bank of India is secured by Pari passu first charge on assets
being acquired through term loan and collaterally secured by extension of a)
Equitable mortgage of office premises at 1 Lamp light, 9th Extn. Road, JVPD
Scheme, Mumbai b) Equitable mortgage of factory land and building at Survey
No- 251/2 Valsad Falia ,Dadra c) Equitable mortgage of new office premises at
Flat No- 201 to 205 , 2nd Floor , Hari Om Chambers , New Link Road , Andheri
(W) Mumbai d) First charge on the company's other movable, Machinery &.
Assets. The Corporate loan has been converted into FCNR (B) TL for Rs. 59.854
Millions. (Present outstanding Rs. 16.047 Millions) and Indian currency loan
for Rs. 0.146 Millions. (Present outstanding Rs. Nil) 3. Term Loan
from State Bank of India is secured by first charge on assets being acquired
through term loan and collaterally secured by extension of a) Equitable
mortgage of office premises at 1 Lamp light, 9th Extn. Road, JVPD Scheme,
Mumbai b) Equitable mortgage of factory land and building at Survey No- 251/2
Valsad Falia , Dadra c) Equitable mortgage of new office premises at Flat No-
201 to 205 , 2nd Floor, Hari Om Chambers , New Link Road, Andheri (W) Mumbai
d) First charge on the company's other movable , Machinery &. assets. 4. Term Loan
from ICICI Bank Limited . is secured by First part passu charge over the
entire fixed assets of the company and residual second pari passu charge over
the entire current assets of the company (subject to RBI approval). The
borrower shall maintain a minimum security cover of 1.50 times during the
entire tenure of the facility. Present outstanding USD 1 million (INR 43.170
Millions) 5. Vehicle loans
aggregating to Rs. 2.418 Millions taken from various banks are secured by
hypothecation of respective vehicles purchased. B. Cash Credit 1. Cash Credit Loan
from State Bank of India is secured by Pari passu first charge by way of
hypothecation of Company's entire current assets including goods in transit
and collaterally secured by a) Equitable mortgage of office premises at 1
Lamp light, 9th Extn. Road, JVPD Scheme, Mumbai b) Equitable mortgage of
factory land and building at Survey No- 251/2 Valsad Falia, Dadra c)
Equitable mortgage of new office premises at Fiat No- 201 to 205 , 2nd Floor,
Hari Om Chamber, New Link Road , Andheri (W) Mumbai d) First charge on the
company's other movable , machinery and assets and future Personal guarantee
of Director and their relatives.
Present outstanding is Rs 224.543 Millions. 2. Stand by Line
of Credit from State Bank of India is secured by Pari passu first charge by
way of hypothecation of Company's entire current assets including goods in
transit and collaterally secured by a) Equitable mortgage of office premises
at 1 Lamp light, 9th Extn. Road, JVPD Scheme, Mumbai b) Equitable mortgage of
factory land and building at Survey No- 251 /2 Valsad Falia, Dadra c)
Equitable mortgage of new office premises at Flat No- 201 to 205 , 2nd Floor,
Hari Om Chamber, New Link Road , Andheri (W) Mumbai d) First charge on the
company's other movable, machinery and assets and future Personal guarantee
of Director &. their relatives. Present outstanding is Rs. 40.458
Millions. 3 Cash Credit Loan
from HDFC Bank Limited is secured by
a)First pari passu charge by way of hypothecation of Company's entire
(domestic as well as EOU unit) current assets including stocks of raw
materials, semi- finished and finished goods, consumable stores and spares
and such other movables, book debts, bills whether documentary or clean,
outstanding monies, receivables both present and future b) Second pari passu
charge over the entire movable and immovable fixed assets of the company
including those of the EOU unit, c) Personal guarantee of Managing
Director (Mr. Rajesh K Drolia).
Present outstanding is Rs. 99.827 Millions. 4. Cash Credit
from DBS Bank Limited is secured by a) Pari passu hypothecation charges over
inventory, receivables and other current assets of the company b) Personal
guarantee of Managing Director (Mr. Rajesh K Drolia). Present outstanding is
Rs 74.500 Millions. 5. Overdraft
facility from HSBC Limited is secured by Personal guarantee of Managing
Director (Mr. Rajesh K Drolia). and post dated cheques of Rs. 10.000
Millions. Present outstanding is Rs.
13.780 Millions.
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Ø Chaturvedi Sohan
and Company Chartered
Accountants Ø Ajay Shobha and
Company Chartered
Accountants |
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Associates/Subsidiaries : |
Ø Todays
Stationery Mart Limited Ø Todays Petrotech
Limited Ø Todays
Infrastructure and Construction Limited Ø Premium Writing
Products Ø Millennium
Writing Products Private Limited Ø Jai Durga
Engineering Company |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
25000000 |
Equity Shares |
Rs 10/- each |
Rs 250.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
12813300 |
Equity Shares [Includes : 4125000 Equity Shares of Rs.10/- each issued as fully paid
up pursuant to the scheme of amalgamation without payment being received in
cash) |
Rs. 10/-
each |
Rs. 128.133
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 [15 Months] |
31.12.2005 [9 months] |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
128.133 |
128.100 |
119.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
563.782 |
450.600 |
333.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
691.915 |
578.700 |
453.400 |
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LOAN FUNDS |
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1] Secured Loans |
589.428 |
223.500 |
236.100 |
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2] Unsecured Loans |
98.827 |
33.000 |
21.600 |
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TOTAL BORROWING |
688.255 |
256.500 |
257.700 |
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DEFERRED TAX LIABILITIES |
33.556 |
0.000 |
0.000 |
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TOTAL |
1413.726 |
835.200 |
711.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
289.470 |
254.100 |
261.100 |
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Capital work-in-progress |
70.942 |
31.300 |
27.400 |
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INVESTMENT |
1.750 |
0.000 |
0.000 |
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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 |
367.710
|
252.300
|
222.400 |
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Sundry Debtors |
495.051
|
450.400
|
311.800 |
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Cash & Bank Balances |
372.757
|
25.300
|
24.300 |
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Other Current Assets |
0.000
|
0.000
|
0.000 |
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Loans & Advances |
185.676
|
101.000
|
33.900 |
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Total Current Assets |
1421.194
|
829.000 |
592.400 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
328.017
|
232.500
|
137.800 |
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Provisions |
41.635
|
46.800
|
48.500 |
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Total Current Liabilities |
369.652
|
279.300 |
186.300 |
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Net Current Assets |
1051.542
|
549.700
|
406.100 |
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MISCELLANEOUS EXPENSES |
0.022 |
0.100 |
16.500 |
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TOTAL |
1413.726 |
835.200 |
711.100 |
PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 [15 Months] |
31.12.2005 [9 months] |
31.03.2005 |
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Sales Turnover |
1928.531 |
944.588 |
934.100 |
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Other Income |
3.374 |
1.696 |
0.000 |
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Total Income |
1931.905 |
946.284 |
934.100 |
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Profit/(Loss) Before Tax |
141.504 |
105.689 |
95.700 |
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Provision for Taxation |
20.234 |
31.987 |
18.200 |
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Profit/(Loss) After Tax |
121.270 |
73.702 |
77.500 |
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Earnings in Foreign Currency : |
469.262 |
21.834 |
NA |
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Imports : |
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Raw Materials |
112.121 |
9.444 |
NA |
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Finished Goods |
430.795 |
0.000 |
NA |
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Capital Goods |
28.993 |
0.024 |
NA |
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Total Imports |
571.909 |
9.468 |
NA |
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Expenditures : |
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Material Cost |
1433.454 |
655.967 |
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Manufacturing and other Expenses |
224.798 |
122.678 |
NA |
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Interest |
79.473 |
32.344 |
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Depreciation |
52.676 |
29.606 |
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Total Expenditure |
1790.401 |
840.595 |
NA
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
322.400 |
493.000 |
629.600 |
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Other Income |
0.600 |
0.800 |
0.800 |
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Total Income |
323.000 |
493.800 |
630.400 |
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Total Expenditure |
270.300 |
410.200 |
546.600 |
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Operating Profit |
52.700 |
83.600 |
83.800 |
|
Interest |
7.700 |
12.400 |
20.700 |
|
Gross Profit |
45.000 |
71.200 |
63.100 |
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Depreciation |
11.200 |
13.000 |
13.000 |
|
Tax |
5.200 |
14.500 |
13.400 |
|
Reported PAT |
28.600 |
43.700 |
36.700 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 [15 Months] |
31.12.2005 [9 months] |
31.03.2005 |
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Debt-Equity Ratio |
0.74 |
0.50 |
0.52 |
|
Long Term Debt-Equity Ratio |
0.17 |
0.17 |
0.22 |
|
Current Ratio |
1.60 |
1.78 |
1.70 |
|
Fixed Assets |
3.60 |
3.35 |
2.59 |
|
Inventory |
4.98 |
5.31 |
4.74 |
|
Debtors |
3.26 |
3.30 |
3.30 |
|
Interest Cover Ratio |
2.72 |
4.10 |
3.48 |
|
Operating Profit Margin (%) |
14.33 |
17.63 |
18.05 |
|
Profit Before Interest And Tax Margin (%) |
11.60 |
14.49 |
14.49 |
|
Cash Profit Margin (%) |
9.02 |
10.70 |
11.92 |
|
Adjusted Net Profit Margin (%) |
6.29 |
7.57 |
8.36 |
|
Return On Capital Employed (%) |
16.16 |
23.87 |
21.50 |
|
Return On Net Worth (%) |
15.27 |
18.47 |
18.24 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
Subject
incorporated in April 29, 1992 as Creative Stationery Products Private Limited
and promoted by Rajesh K Drolia, a first generation Entreprenuer is one of the
leading manufacturers of pens in India. The company has changed its name to the
present one in October 1995. The company came out with its maiden public issue
in April 1996.
The company markets its products under the 'Today's' brand name both
domestically and internationally. The company's product portfolio includes Ball
pens, gel pens, roller pens, markers and highliters. The company owns two
production facilities at Dadra both equipped with inhouse tool room, design and
moulding and quality control facilities.
Today's Writing Instruments Limited (TWIL), a group company was amalgamated
with TWPL effective from Oct 4, 2000 as a part of business synergy plan.
To market its
products Todays entered signed an agreement with its joint venture partner M/s
Mon Ami Company Limited, Korea. It is having 330 distributors spread over 145
countries.
During the period
under review, the company has witnessed an increase in turnover by 1.91 % to
Rs. 944.588 Millions (previous year Rs. 926.855 Millions). However on prorata
basis the growth is 42.97% This was possible due to the continuous effort of
consolidation, infusion of new technologies, reorientation of marketing
strategies and thrust on production of low price valued pens with higher volume
production. This was a challenging process and company had to make it with
reduction in cost, use of innovative technologies and optimum use of plant
capacities. However the Net profit for the period is, Rs.71.513 Millions
(previous year Rs. 77.542 Millions). However on Prorata basis the Net profit is
increased by 54.25%.
During the period under review company launched various new models in the price
segment of Rs. 5 to Rs. 7 and has achieved the no. 1 position in this category
and was thus able to penetrate the market very successfully. This low value
high volume strategy is now being followed up with several product launches at
the frequent intervals of Rs 5 price point. During the current year the company
expects to achieve a very good turnover and profit barring any unforeseen
circumstances
- One of the leading manufacturers of
writing products.
- Promoted by Rajesh Drolia, an entrepreneur
with a passion for pens and a renowned name in the industry globally.
- Decade long presence
- One of the most visible brands in India
- Covering over 35 varieties of pens
- Recently extended to cover school and
office stationery.
- Delivering consistent profits and
dividends ever since its going public in 1996
1995
- Commenced operations in the name of
Today’s
- Became profitable in the first year of
operations
1996
- Went public
- Launched the Zee Khushboowala pen
- Stocks listed on 6 bourses
1996-1997
- Turnover exceeds Rs 2500 lacs
1998-99
- Network coverage increased from 50,000
retail outlets to 300,000
- Began the campaign Jeetna hai today
2000
- Turnover exceeds Rs 5000 lacs
- Ball pens and refills production
crosses 1 mn per day
2001
- Turnover exceeds Rs 7500 lacs
- Coverage extended to 400,000 outlets
2002
- Production expanded to 1.5 mn pens per
day
- Entered into an agreement with Mon Ami
- Launched the Rs 5 gel pen
- Mon Ami picks up equity stake
2003
- Entered into an agreement with
Poundland of UK
- Pens sold under the brand name of
Today’s by Poundland in UK
2005
- Brand extended to pencils, notebooks,
and other stationery products
- Preferential allotment of 8.44 lac
shares to Bennett Coleman & CompanyLimited
2005
- Entered into an agreement with Style
Asia, for marketing products in USA through retail stores
- Agreement entered into JL Morrison for
marketing products in Sri Lanka
OVERVIEW:
The over all industrial growth has been strong during the year under review and
all the numbers indicate that this is likely to continue albeit at a lower
rate. The strong growth of the economy and the substantial allocation of the
Government in the education sector will give further fillip to the writing
instrument industry. The focus on adult literacy, education of the girl child
and a host of other initiatives of the Government in increasing the literacy
rate will in due course result in higher off take of pens and related products
in due course.
The increasing interest in India from Companies in Europe and US has thrown
open opportunities that were Thitherto not available. These opportunities
provide an ideal platform for exponential growth in the writing instrument
business. The cost and quality of the pens manufactured in India has evoked
interest among American and European Companies and the opportunity for OE
supplies appears promising.
The Company has been focusing on increasing average realization without in
various price points. This has yielded rich dividends. The strong creative
strength of the Company has resulted in new varieties being launched regularly.
INDUSTRY STRUCTURE
AND DEVELOPMENT:
The size of Indian writing instruments industry is approximately Rs.
25000 Millions and is expected to grow at the pace of 20% per annum. The gel
pen segment has carved a significant niche and the growth rate is almost 100%
annually due to increased preference by the consumers. A significant change has
been seen during last few years that the market shares of organized segment has
increased drastically on account of better quality, competitive economical
prices, better marketing of their branded products. The organized sector still
commands 75% market share.
The Writing Instruments manufacturing industry in India is reserved for the
small-scale sector. Faced with a quantitative restriction on the investments in
plant and machinery, the industry is facing difficulties in upgrading its
machinery & technologies, which are essential for competing with
international players in global market. Recently the government has enhanced
the quantitative restriction in the investment in plant & machinery which
is a good sign for the industry. Further liberalization in May 07 has resulted
in the Component manufacture for non captive consumption being exempted from
the restrictions. This opens up another source of revenue for the
Company.
The Writing Instruments Industry is not of cyclic nature and is not affected by
any environmental or external factors, which is quite evident from the overall
growth shown by the industry &the company in particular over the past
years. Further the wide ranges of products are an added advantage to the
company in competing with other players.
OPPORTUNITIES AND THREATS:
The biggest opportunity has come from the growth of India and the
interest of Europe and America in doing business with India. This is opening up
large markets for Indian products in these continents and this is also true for
the writing instrument business. The Company is actively exploiting these
opportunities in the current year.
The other opportunity has come from the growing economic strength of the 300 mn
strong Indian middle class whose purchasing power is increasing by leaps and
bounds. The sharp increase in the disposable income and the sharp spike in the
savings rate is expected to have multiplier effect and exponential growth is
expected in most of the sectors of the economy in the next few years.
The Company has been able to tap these opportunities due to the large
distribution chain of the Company with 57 Super Channel Partners, 1500
distributors and 5,00,000 retail outlet. Further in order to cater to the
ever-changing taste of the target market the Company has set up a complete
in-house modern desing centre with latest in software and hardware to introduce
new designs at a faster pace.
They expect further fillip to the industry in due course with restriction on
investments being phased out in line with the current thinking of the
Government. However, it would be risky to hazard a guess on the timelines for
this to materialse.
PRICE SEGMENT WISE
OR PRODUCT WISE PERFORMANCE:
The Company operates in Writing Instrument business only i.e. plastic
ball pens and its components and caters to various price segments ranging from
Rs. 2 to Rs.20 MRP.
The Company has developed several value added products and ranges for
various economic segments. As per the Market survey conducted by internal
sources the company enjoys commendable Status in Rs.5 to 7/- price segment. In
domestic market Company's products are available all over India more
appropriately depicted by the graph.
EXPORT:
The Company exported Rs. 469.262 Millions in comparison of Rs. 21.834
Millions during the last period. A growth of 2049.23% is evidenced which is
possible due to the company's ability to provide competitive products,
innovative packaging as theyll as the ability to customize products to the
buyers requirements. The company is regularly participated in various trade
fairs which helped it to reach prospective international customers and also
helped in knowing their taste & liking of products & the recent
developments in the writing instrument industry. The company has bagged a very
big prestigious order from a multinational departmental stores in Europe, which
is only possible due to better quality standard and economy followed by the
company.
The
company has adopted the marketing oriented strategy towards exports. Rather
than sell at a rock bottom price, the company has instead chosen to develop
partners in various countries, and progress slow and steadily in these
markets.
PROMOTIONAL / CORPORATE SALES:
Promotional
/ Corporate Sales now a days plays a big role in marketing of products because
the concept of getting anything extra along with the product is becoming
popular day by day with the consumers and the corporate manufacturers are
utilizing this marketing strategy. The Writing instrument is a most suitable
promotional item & hence various industries are especially providing the
same along with their products. The company's promotional department has become
a major contributor to its turnover. Various multinational FMCG &
Pharmaceutical Companies like Hindustan Lever Limited Philips India, Warner
Lambert, Fuji Film, Cipla, FDC etc. are the major customers of the company &
they are regularly purchasing their plastic pens & the company is very
optimistic about this business.
Pens
make the perfect advertising vehicle, especially the models with a good
printing area on the barrel or the clip. Today's Pens have also found very good
value in trade schemes with the distribution channels of these large
multinationals. The more famous marketing campaigns were with HLL's Fair and
Lovely, in which Today's Pens were part of the scheme to the trade. In the case
of Phillips, Today's Pens made for a very successful consumer offer.
With
more and more corporate houses discovering the importance of using pens to
further their communication needs, the future for this department indeed looks
very bright. Further with many FMCG companies looking at writing instruments as
a source of visibility creation and promotion of goodwill they expect many of
them to introduce branded writing instruments to cater to their niche markets
DIRECTORS PROFILE:
Mr. Rajesh Kumar Drolia, Chairman &.
Managing Director
Mr. Rajesh Kumar
Drolia (47 years) is a Commerce graduate and a self-made young and dynamic
entrepreneur having 24 years experience in the Writing Instruments Industry. A
first generation entrepreneur, he actively participates in effective
segmentation of the market and comes out with new concepts and innovative
designs. He looks after the overall day-to-day activities of the Company. His
main strength and ability to innovate and bring new designs, models and
concepts, suitable for every segment of the market. Under his leadership the
Company has achieved tremendous growth and. aims for more and more growth.
Mr. Mukesh Gupta, Non Executive Director
Mr. Mukesh Gupta
(51 years), is a Commerce graduate and having vast experience in the field of
Writing Instruments industry. His marketing exposure of more than 29 years is
very fruitful for the Company in forming major marketing strategies.
Mr. Ronald Netto, Non Executive Director
Mr. Ronald Netto
(47 years) is an experienced strategist, began his career in the creative
field. As an advertising professional, he has experience of launching over 100
successful brand-building campaigns. He runs a successful advertising and
marketing consultancy agency. Over 2 decades, as a strategist he has gained
experience in the fields of Finance, Advertising, Marketing and Corporate
Management. He is active in corporate planning and new project planning and
development.
Mr. Rahul Gupta, Non Executive Director
Mr. Rahul Gupta
(47 years) is a Commerce graduate having vast experience in the field of
marketing, designing and communication. His practical experience in the field
of marketing is very helpful in forming various marketing strategies
Mr. Sanjeev Shah, Non Executive Director
Mr. Sanjeev Shah
(47 years), is a Chartered Accountant in practice and vast experience in the
field of auditing, taxation and finance and he is Director of various
companies.
PERFORMANCE:
The
Company's performance during the year has been reasonably good. The growth in
the topline on an annualized basis was 22.47%. The bottom line reflected
consisted trend and the PAT as a % of sales was 6.28 compared to 7.79 in Dec.,
2005. This has been archived despite serious set back due to fire in the
factory which affected production and consequently sales. The impact of the
fire was much larger as it not only affected the production by a quarter of the
year but also choked up supplies to the channel due to loss of stocks in fire
and consequent loss of business. However, due to the dynamic efforts of the
sales team and the export division the Company was able to post a reasonable
growth by stepping up outsourced exports and stationery sales. The export sales
was Rs. 469.262 Millions compare to Rs.21.834 Millions in the previous period.
Despite these set backs the company managed to increase average realization
from Rs.2.25 to Rs.2.40 in the year under review. This is further expected to
go up with the scheduled launch of higher end pens in the market during this
year. However during the current year the growth till date has been robust and
the Directors are confident of a better performance during this year. The
market trends also supports such optimism.
CAPACITY
EXPANSION:
The completion of the capacity expansion plans by setting up of the
export unit has been delayed due to the delay in disbursement of funds by the
Consortium banks pending completion of security creation in their favour due to
process delays in view of the fact that 6 consortium banks are involved. The
process is expected to be completed during the month of October, 2007 and the
additional capacity is likely to go on stream during the month of December,
2007.
EXPORT:
The
company exported Rs. 469.262 Millions in comparison of Rs. 21.834 Millions
during the last period. A growth of 2049.23% is evidenced which is possible due
to the company's ability to provide competitive products, innovative packaging
as well as the ability to customize products to the buyers requirements. The
company is regularly participated in various trade fairs which helped it to
reach prospective international customers and also helped in knowing their
taste & liking of products & the recent developments in the writing
instrument industry. The company has bagged a very big prestigious order from a
multinational departmental stores in Europe, which is only possible due to
better quality standard and economy followed by the company.
The company has adopted the marketing oriented strategy towards exports. Rather
than sell at a rock bottom price, the company has instead chosen to develop
partners in various countries, and progress slow and steadily in these
markets.
EXPORT ORIENTED UNITS:
The
Company had setup a Export Oriented Unit in the under report period.
The
project was under erection and ready for commencet with all necessary
permission taken / applied from various authorities, but since various
incentives like Tax Benefits and Export Benefits are no more in the Export
Oriented Units, the Company decided to put up a Export Unit instead of Export
Oriented Unit. The Company has achieved a good Export turnover during the
period under review and hope to achieve excellent exports from this Export Unit
in the coming year, barring unforseen circumstances.
OUTLOOK:
The
most pertinent aspect of the writing instruments business is assured growth.
With the increase in population and literacy in the country, demand for writing
instruments will always increase. Apart from this is the growth in their
economy, which is moving at a rapid pace. Along with this, as seen in the trend
in developed economies, the writing instruments need escalates. The USA for
example boasts of a $4.4 Billion market, that services a population of a mere
300 Million. Compare that with India's population of over 1 Billion consuming
just half a billion dollars worth the same.
With
the advent of the retail boom, the purchase pattern of the consumer is
changing. For the writing instrument industry this promises to boost growth
rates, simply because the pick-and-drop shopping behavior necessitates the
purchase of a pack of pens rather than a single unit. This is the basic reason
why the developed world is able to show much more higher turnover.
With
the gap in prices between India and China closing in, the international buyer
is now even more inclined to source writing instruments from India. All of
these points are reason for their very optimistic view of the future.
CHANGE OF ACCOUNTING YEAR
Due to fire their
books of accounts were destroyed and the company could not able to get is a
accounts for the year ended 31st March, 2006 and hence applied for change of
accounting year from 31st March 2006 to 31st December 2005 with ROC, Gujarat
and got their permission and accordingly on the basis of earlier audit report
for the period ended 31st December 2005, prepared for the company follow their
propose, public issue, the auditors of the company based their reports.
BUSINESS OF THE NEWLY SET UP SUBSIDIARIES:
The
Company has set up three subsidiaries during the course of the year and they
have entered new business areas which are by themselves very promising in
nature. Brief details of the subsidiaries are as follows:
Today's Stationery
Mart Limited:
This Company has been set up with a
view to tap the growing Stationery business in the Country. The estimated market
size is in the region of Rs.500000 Millions and this is growing at a healthy
pace. The Company has a strong distribution network with the sales team
reaching out to the retail level and as such understands this market well and
has the strong will to tap this market. After careful evaluation and market
study it has been decided to launch a Corporate supply and Services business
under the brand name 'OFFIX' and create visibility and provide convenience to
the customer with a nearby store. The plan is to set up a chain of Company
owned stores and also warehouses initially and later on have franchised stores
across the country. The Company is also in serious discussion with Similar
European chains for joint venture and outsourcing opportunities. The Company in
the course of the next few years is targeting to be among the top stationery
retail chains in India.
Today's Petrotech Limited:
This
company was set up with a view to tap the emerging opportunities in the Oil and
Gas Sector to leverage on the engineering skills acquired over the last 20
years by the Company. An agreement has been entered in to with ITT Corporation
of the US which is a $ 8 Billion multinational and is the world leader in
Hydrocarbon pumps. Under the 10 year agreement the Company will be setting up
the test bench facility for them which will be handed over to them for a lease
rent, a unit to take care of all the machining requirements and will also
handle the complete distribution of the pumps In India. The Capital outlay for
the project is expected to be in the region of Rs.250 Millions. The day to day
management of the Company will be handled by professionals with wide experience
in the Oil and Gas sector. The Company will be holding about 55% stake in this
subsidiary and the rest will be held by those associated from the project since
conceptualization.
Today's Infrastructure and Construction
Limited:
This
Company was set up with a view to tap the emerging opportunities in the
Construction sector. The Company is in the process of developing a team with
specialization in the infrastructure and construction sector. In the meantime
the company is looking at joint development opportunities to tap the potential
of this sector.
Fixed Assets
Ø
Freehold Land
Ø
Building
Ø
Plant and Machinery
Ø
Furniture and Fixtures
Ø
Technical Knowhow
Ø
Electrical Installations
Ø
Moulds
Ø
Office Equipments
Ø
Vehicles
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 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
54 |
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 |
|