MIRA
INFORM REPORT
|
Report Date : |
25.02.2008 |
IDENTIFICATION
DETAILS
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Correct Name : |
KANSAI NEROLAC
PAINTS LIMITED |
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Formerly Known As : |
GOODLASS NEROLAC
PAINTS LIMITED |
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Registered Office : |
“Nerolac House”, Ganpatrao
Kadam Marg, Lower Parel, Mumbai – 400 013, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
02.09.1920 |
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Com. Reg. No.: |
11-825 |
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CIN No.: [Company
Identification No.] |
L24202MH1920PLC000825 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMG00234D |
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Legal Form : |
Public Limited
Liability Company. The company’s shares are listed on the Stock Exchanges |
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Line of Business : |
Manufacturing and
Marketing of Paints, Varnishes and Enamels, Oils and Synthetic Resins. |
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 -- |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established company having fine track. Available information indicates high
financial responsibility of the company. Fundamentals are strong and healthy.
The company is doing very well. It’s payments are always correct and as per
commitments. The company can
be considered good for your proposed business dealings at usual trade terms
and conditions. |
LOCATIONS
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Registered
Office : |
“Nerolac House”,
Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India |
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Tel. No.: |
91-22-2493 4001 /
2493 4003–08 / 2493 4010 |
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Fax No.: |
91-22-2493 6296 /
24973704 |
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E-Mail : |
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Website : |
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Factory : |
• B 1 , B2, Jainpur
Industrial Estate, Kanpur Dehat, Kanpur, Uttar Pradesh, India • F/2, MIDC, Lote
Parshuram, Taluka Khed, District Ratnagiri, Maharashtra, India • Bibi Talav
Vatva, Ahmedabad, Gujarat, India • 142, Tiruporur Road,
Perungudi, Chennai, Tamil Nadu, India • 36, Sector-7,
HSIDC IGS, Bawal, District Rewari, Haryana, India |
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Branches : |
Located at :- Jammu, Jalandhar,
Ludhiana, Bhatinda, Patiala, New Delhi, Mumbai (Goregaon), Parwanoo,
Chandigarh, Ambala, Dehradun, Ghaziabad, Sahibabad, Faridabad, Bareilly,
Agra, Lucknow, Kanpur, Patna, Siliguri, Guwahati, Varanasi, Jamshedpur,
Kolkata, Vishakhapatnam, Vijayawada, Trichy, Madurai, Trivandrum, Thiruvalla,
Cochin, Calicut, Mangalore, Bangalore, Hubli, Tirupati, Panji, Gulbarga,
Kolhapur, Hyderabad, Pune, Bhiwandi, Nagpur, Cuttack, Raipur, Jabalpur,
Varanasi, Surat, Baroda, Narol, Ahmedabad, Chennai, Rajkot, Indore, Udaipur,
Gwalior, Bhopal, Jaipur and Jodhpur. |
DIRECTORS
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Name : |
Dr. J.J. Irani |
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Designation : |
Chairman |
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Name : |
Mr. D. M. Kothari
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Designation : |
Vice Chairman |
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Name : |
Mr. Y Kawamori |
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Designation : |
Director |
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Name : |
Mr. K. C. Mehra |
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Designation : |
Director |
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Name : |
Mr. H. M. Bharuka |
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Designation : |
Managing Director |
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Name : |
Mr. S. M. Datta |
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Designation : |
Director |
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Name : |
Mr. Y Tajiri . |
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Designation : |
Director |
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Name : |
Mr. V K. Khurana |
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Designation : |
Director -
Industrial Marketing |
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Name : |
Mr. H. Ishino |
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Designation : |
Director |
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Name : |
Mr. P. P. Shah |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. G. T Govindarajan |
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Designation : |
Company Secretary |
SHAREHOLDING
PATTERN
As on 31.12.2007
|
Category of Shareholders |
No.
of Shares |
%
of Holding |
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Shareholding of
Promoter and Promoter Group2 |
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Indian |
-- |
-- |
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Sub Total(A)(1) |
-- |
-- |
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Foreign |
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Individuals (Non-Residents Individuals/
Foreign Individuals) |
17895400 |
66.41 |
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Sub Total(A)(2) |
17895400 |
66.41 |
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Total
Shareholding of Promoter and
Promoter Group (A)= (A)(1)+(A)(2) |
17895400 |
66.41 |
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Public
shareholding |
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Institutions |
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Mutual Funds/ UTI |
2137006 |
7.93 |
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Financial Institutions / Banks |
575 |
0.00 |
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Insurance Companies |
1339862 |
4.97 |
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Foreign Institutional Investors |
1973547 |
7.32 |
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Sub-Total (B)(1) |
5450990 |
20.23 |
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Non-institutions |
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Bodies Corporate |
972459 |
3.61 |
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Individuals |
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Individuals -i. Individual shareholders
holding nominal share capital up to Rs 0.100 million |
2369950 |
8.80 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 million |
229004 |
0.85 |
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Any Other (specify) -- NRI Non-Rep -- NRI –REP -- Trust |
11594 14164 2425 |
0.04 0.05 0.01 |
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Sub-Total (B)(2) |
3599596 |
13.36 |
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Total Public
Shareholding (B)= (B)(1)+(B)(2) |
9050586 |
33.59 |
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TOTAL (A)+(B) |
26945986 |
100.00 |
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GRAND TOTAL
(A)+(B)+(C) |
26945986 |
100.00 |
BUSINESS DETAILS
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Line of
Business : |
Manufacturing and
Marketing of Paints, Varnishes and Enamels, Oils and Synthetic Resins. |
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Products : |
Item Code
No. 320890.03 Product Description:
Paints |
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Exports to : |
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Product : |
Paints and
Coating Material. |
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Country : |
Asian and Far
East countries |
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Imports from : |
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Product : |
Raw materials
& packing materials, stores & spares, capital goods and finished
goods. |
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Country : |
Japan, Germany
and U.S.A. |
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Terms : |
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Selling : |
L/C terms |
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Purchasing : |
L/C, D/P or D/A
terms |
PRODUCTION STATUS
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Particulars |
Unit |
Installed Capacity |
Actual Production |
|
Paints, Varnishes
and Enamels |
MT |
158700 |
100819 |
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Synthetic Resins |
MT |
36250 |
28648 |
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Pretreatment
Chemicals |
MT |
2400 |
-- |
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Thermo Setting
Coating Powders |
MT |
4800 |
5266 |
GENERAL
INFORMATION
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Customers : |
v Bajaj Auto Limited v Whirlpool of India Limited v Hero Honda v Godrej v Maruti - 70% of Maruti's paint
requirement-accounts for 12% of sales |
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No. of
Employees : |
2000 |
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Bankers : |
v Union Bank of
India v Standard
Chartered Bank v Bank of
Tokyo-Mitsubishi UFJ, Limited v HDFC Bank Limited v
BNP Paribas |
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Facilities : |
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Banking Relations : |
Good |
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Auditors : |
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Name : |
A. F. Ferguson and Company Chartered Accountants |
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Address : |
Mumbai,
Maharashtra, India |
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Subsidiaries : |
Ø Chemguard Coatings Limited (Associate-upto 31.10.2004 Ø P.T. Kansai Paint Indonesia Ø Saurashtra Paints Limited Ø GNP (Madras) Limited Ø Kansai Coatings Malaysia Sdn. Bhd. Ø Kansai Paint Philippines Inc. Ø
Polycoat
Powders Limited, amalgamated with the Company with effect from 1st April,
2006 (Associate upto 24.10.05 and Fellow subsidiary upto 31.03.06) |
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Associates : |
Ø Anupam Silk &
Chemical Industries Limited, (upto 25.03.2004) Ø Nipa Chemicals
Limited Ø
Polycoat Powders Limited Ø
Drewtreat Chemicals
Limited In financial and technical collaboration
with Drew Chemicals, New Jersey, U.S.A., subject is a leading company
offering Water and Fuel treatment Chemicals. On the lines of the American
partner, the company manufactures Water Treatment Chemicals. Ø
Nipa
Chemicals Limited This company specializes
in the manufacture of Pre-Treated Chemicals. It is a joint venture of Nihon
Parkerizing Company Limited, Tokyo, Japan, and Goodlass Nerolac. The
technical and the marketing support is provided by the subject company. |
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Memberships : |
Paint
Manufacturers Association of India |
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Holding Company : |
Kansai Paint Company Limited, Japan |
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Collaboration
: |
Ø E.I. du Pont de Nemours and Company Inc., USA
– for manufacture of sophisticated coatings for automotive sector Ø Kansai Paint Company Limited, Japan-for
manufacture of sophisticated architectural coatings Ø Oshima Kogyo Company Limited, Japan – for
manufacture of heat resistant paints. Ø DuPont Performance Coatings GmbH &
Company, KG, Germany – for know-how relating to the manufacture of anodic
Electro-deposition coatings system. |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
30,000,000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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2,55,07,666 |
Equity Shares fully paid-up |
Rs. 10/- each |
Rs. 255.077
millions. |
|
14,38,320 |
Capital Suspense: Equity Shares of
Rs. 10 each are fully paid -up to be issued to the shareholders of the
erstwhile Polycoat Powders Limited pursuant to the scheme of amalgamation
sanctioned by the High Court of judicature at Bombay Of the above:
1,64,57,080
Equity Shares are held by the Holding Company, Kansai Paint Co. Limited,
Japan |
|
Rs. 14.383 millions |
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Total |
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Rs. 269.460 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS
FUNDS |
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|
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1] Share Capital |
269.460 |
255.077 |
255.077 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
4847.845 |
3805.452 |
2978.885 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
5117.305 |
4060.529 |
3233.962 |
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LOAN FUNDS |
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1] Secured Loans |
300.218 |
385.565 |
325.939 |
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2] Unsecured
Loans |
799.751 |
712.184 |
545.491 |
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TOTAL BORROWING
|
1099.969 |
1097.749 |
871.430 |
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DEFERRED TAX
LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL
|
6217.274 |
5158.278 |
4105.392 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
1898.213 |
1598.893 |
1316.300 |
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Capital work-in-progress
|
126.633 |
155.935 |
175.974 |
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Advance for capital expenditure
|
49.699 |
23.674 |
116.607 |
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INVESTMENT
|
1548.225 |
1639.349 |
1791.249 |
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DEFERREX TAX ASSETS
|
65.077 |
82.266 |
97.237 |
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CURRENT ASSETS, LOANS & ADVANCES
|
|
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Inventories
|
1804.217
|
1782.438
|
1145.569
|
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Sundry Debtors
|
1946.904
|
1439.159
|
1048.412
|
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Cash & Bank Balances
|
214.927
|
157.862
|
133.179
|
|
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Other Current Assets |
0.000
|
0.000
|
0.000
|
|
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Loans and Advances
|
527.146
|
576.199
|
486.158
|
Total Current Assets
|
4493.194
|
3955.658
|
2813.318
|
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Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
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Current Liabilities
|
1523.427
|
1520.514
|
1439.924
|
|
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Provisions
|
440.340
|
776.983
|
765.369
|
Total Current Liabilities
|
1963.767
|
2297.497
|
2205.293
|
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Net Current Assets
|
2529.427
|
1658.161
|
608.025
|
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
|
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TOTAL
|
6217.274 |
5158.278 |
4105.392 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
12223.810 |
10095.799 |
9016.879 |
|
|
Other Income |
240.477 |
750.108 |
0.000 |
|
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Total Income |
12464.287 |
10845.907 |
9016.879 |
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|
|
|
|
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Profit/(Loss) Before Tax |
1609.664 |
1995.965 |
1372.580 |
|
|
Provision for Taxation |
533.074 |
610.070 |
453.000 |
|
|
Profit/(Loss) After Tax |
1076.590 |
1385.895 |
919.580 |
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Earnings in Foreign Currency : |
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Export Earnings |
17.572 |
32.680 |
159.697 |
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Total Earnings |
17.572 |
32.680 |
159.697 |
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Imports : |
|
|
|
|
|
|
Raw Materials |
1568.237 |
1363.349 |
|
|
|
Stores & Spares |
8.475 |
6.932 |
|
|
|
Capital Goods |
24.068 |
12.055 |
91.164 |
|
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Others |
56.119 |
35.574 |
|
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Total Imports |
1656.899 |
1417.910 |
91.164 |
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Expenditures : |
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Cost of Goods Sold |
7783.290 |
6109.562 |
|
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Managerial Remuneration |
595.690 |
559.177 |
|
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Interest |
9.615 |
7.802 |
10389.459 |
|
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Depreciation & Amortization |
335.574 |
317.760 |
|
|
|
Other Expenditure |
2130.454 |
1855.641 |
|
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Total Expenditure |
10854.623 |
8849.942 |
10389.459 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 [1st Quarter] |
30.09.2007 [2nd Quarter] |
31.12.2007 [3rd
Quarter] |
|
Sales Turnover |
3175.300 |
3484.200 |
3453.900 |
|
Other Income |
94.700 |
65.300 |
48.700 |
|
Total Income |
3270.000 |
3549.500 |
3502.600 |
|
Total Expenditure |
2724.300 |
2972.500 |
2956.200 |
|
Operating Profit |
545.700 |
577.000 |
546.400 |
|
Interest |
2.800 |
4.000 |
3.800 |
|
Gross Profit |
542.900 |
573.000 |
542.600 |
|
Depreciation |
88.200 |
96.200 |
103.300 |
|
Tax |
136.400 |
151.200 |
147.100 |
|
Reported PAT |
324.700 |
331.200 |
302.400 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.24 |
0.27 |
0.27 |
|
Long Term Debt-Equity Ratio |
0.22 |
0.25 |
0.26 |
|
Current Ratio |
1.92 |
1.49 |
1.39 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
3.81 |
3.78 |
4.02 |
|
Inventory |
8.27 |
8.37 |
9.58 |
|
Debtors |
8.76 |
9.86 |
9.82 |
|
Interest Cover Ratio |
168.67 |
186.44 |
179.236 |
|
Operating Profit Margin(%) |
13.17 |
14.45 |
149.400 |
|
Profit Before Interest And Tax Margin(%) |
10.91 |
11.86 |
129.900 |
|
Cash Profit Margin(%) |
9.52 |
10.74 |
106.00 |
|
Adjusted Net Profit Margin(%) |
7.26 |
8.15 |
86.500 |
|
Return On Capital Employed(%) |
28.47 |
31.40 |
370.100 |
|
Return On Net Worth(%) |
23.50 |
27.40 |
312.600 |
LOCAL AGENCY
FURTHER INFORMATION
History
Goodlass Nerolac Paints Limited (GNPL), the Indian subsidiary
of Japan based Kansai Paint Company Limited, is the second largest paint
company in India with presence in decorative paints as well as industrial
paints & marine paints, enamels, varnishes, coatings, resins etc. It is the
second largest coating company in India. The company markets its products under
the brand names Nerolac, Glossolite, Goody, Allscapes, Excel, in decorative.
The Company was established in 1920 as Gahagan Paints and Varnish Company
Limited at Lower Parel in Bombay. In 1930, three British companies merged to
formulate Lead Industries Group Limited In 1933, Lead Industries Group Limited
acquired entire share capital of Gahagan Paints in 1933 and thus, Goodlass Wall
(India) Limited was born.
Subsequently, by 1946, Goodlass Wall (India) Limited was known as Goodlass Wall
Private Limited. In 1957, Goodlass Wall Private Limited grew popular as
Goodlass Nerolac Paints (Private) Limited. Also, it went public in the same
year and established itself as Goodlass Nerolac Paints Limited. It came into
the fold of Tata Forbes Group in 1976, as its foreign holdings were acquired by
Forbes Gokak. It turned into Joint Venture company in 1986 as the foreign
collaborator Japan based Kansai Paints picking 36% of equity capital of the
company. With the acquisition of entire stake of Forbes Gokak and its
associates by Kansai Paints it became the subsidiary of the latter in 1999. The
stake of Kansai Paints in the company now stood at 64.52% of the total equity
of the company. The company has five manufacturing facilities at Kanpur,
Ratnagiri, Ahmedabad, Perungudi, Rewari spread across India. The Company serves
its customers through 66 Sales locations and five strategically located
factories.
Technical Assistance Agreements of the company with renowned players in paint
industry at international level puts the company in a strong position to offer
products which meets stringent international specifications. It started in 1993
when the company tied-up with Kansai Paints of Japan (for manufacture of Sophisticated
architectural Coatings) and Nihon Tokushu Torya Company Limited also of Japan
(for body seal and under seal coatings). And the latest being the technical
assistance agreement with DuPont Performance Coatings GmbH & Co. KG,
Germany for know-how of manufacture of Anodic Electro-deposition Coatings
System during the year 2000-01. The company's other Technical Assistance
agreements include E.I. Dupont De Nemours & Co. Inc. of USA for automotive
coatings; Oshima Kogyo Company Limited, of Japan for heat resistant paints;
Valspar Corporation of US for powder coatings; Drew Chemicals Corporation of US
for water and fuel treatment chemicals and Ameron Inc. USA for high performance
coatings.
The company has strong presence in automotive paints as it controls 45% of the
organized Industrial paint segment. Its major clients include OEMs like Maruti
Udyog, Bajaj Auto, TELCO and Mahindra & Mahindra. It was a pioneer in
introducing electro-deposition (ED) technology for Maruti, capturing a sizeable
share of the automotive paint market. The company has two wholly owned
subsidiaries namely Saurashtra Paints and GNP (Madras). The above subsidiary
companies were amalgamated with the company from April, 2002 with consent
approval from both the states High courts.
It has the software package, computerized colour dispensing machine from Fluid
Management Holland, Gyroshaker of 10-Litre capacity touch screen monitor, 136
column palette-share display unit and a Kirloskar Champion UPS 1 KVA. The
system has an ability to supply over 1305 shades accurately, consistently and
instantly in several products covering a variety of application viz doors,
windows, walls, exteriors, gates, grills etc.
Company
Goodlass Nerolac Paints Limited (GNP),
headquartered in Mumbai was established in 1920. Over the years, the Company
has enjoyed market leadership in Industrial Coatings with a clear dominance in
the Automobile segment and a good standing in Architectural coatings business.
On overall basis it enjoys number two position. GNP is known for its innovative
products, superior coating technology with a clear emphasis on high quality of
service. GNP has five manufacturing facilities spread across India. The Company
services customers through 66 marketing offices in India.
Established on 2nd of September 1920, Goodlass Nerolac
Paints Limited (GNP) has been a forerunner in Industrial and Automotive coating
business. GNP has a good reputation and its brands are well known in the
Architectural coatings business as well. On an overall basis, GNP enjoys number
two position in the market and is renowned for its technologically superior and
innovative products, processes, value engineering and service to its
customers.
The Company serves its customers through 66 Sales locations and five strategically
located factories. It operates on SAP R-3 platform and uses advanced tools like
Advanced Planning Optimizer (APO) for demand planning & Supplies, Data
Intelligence Warehousing (DIW) for informed decision making, Employee Portal to
harness Knowledge Management (KM) and Balanced Score Card (BSC) for review of
performance.
In 1976, Goodlass Nerolac Paints
Limited became a part of the Tata Forbes Group on acquisition of a part
of the foreign shareholdings by Forbes Gokak.
In 1983, Goodlass Nerolac Paints
Limited strengthened itself by entering in technical collaboration
agreements with Kansai Paint Company Limited, Japan and Nihon Tokushu Toryo
Company Limited, Japan.
In 1986, Goodlass Nerolac Paints
Limited turned into a joint venture of the Tata Forbes and the Kansai
Paint Company Limited, with the latter acquiring 36% of its share capital.
In 1999, Kansai Paint Company Limited, Japan took over the entire stake of Tata
Forbes group and thus GNP became
a wholly owned subsidiary of Kansai
Paint Company Limited
In 2006, on the 11th of July, Goodlass Nerolac Paints Limited name has been
changed to Kansai Nerolac Paints Limited During the
journey of continuous performance excellence, they have entered in to many
technical collaborations with other industry leaders such as E.I. Du-Pont de
Nemours & Company Inc., USA and Oshima Kogya Company Limited, Japan for our
different products.
Their incessant journey of successes will go on backed by our present
human asset of over 2000 professionals and a sales turnover of Rs. 14840
millions They are esteemed to be a subsidiary of Kansai Paint Company Limited,
which is the largest paint manufacturing company in Japan and among the top ten
coating companies of the world.
They are the second largest coating company in India with a market share of
over 20%.
They are the market leader in industrial / automotive segment supplying over
90% of the OEM requirements.
They are the leader in powder coatings.
Amalgamation of Polycoat
Powders Limited with the Company:
Polycoat Powders Limited (PPL), a Company engaged in the manufacture of powder
coatings, has been amalgamated with the Company with effect from let April,
2006, pursuant to the approval of the Hon'ble High Court of Judicature at
Bombay. The amalgamation is expected to result in better internal economies
such as reduction in administrative costs, exercise of effective control,
synergistic operational advantages, better use of infrastructure facilities and
increased productivity of the combined resources. The figures of PPL for the
financial year ended 31st March, 2007 are included in the financial results of
the Company for the current year. For the above reason, financial results for
the current year are not comparable with those of the previous year.
Management
Discussion and Analysis
Information about
the Company:
Kansai Nerolac Paints Limited (formerly Goodlass Nerolac Paints
Limited), established on 2nd September 1920, is an 86 years old company Being
India's second largest paint company it enjoys clear market leadership in
Industrial, Automotive and Powder Coating business. The main strength of the
organization lies in its employees and the technological superiority of the
products manufactured, which has enabled the Company to maintain a steady
growth over the years.
The Company has an open culture with transparency in operations and a
professional approach. The stated purpose is 'Innovations for evolving
surfaces'. Innovation here means new ways of looking at business, which also
implies innovation in products, work and processes, Evolving surfaces indicates
future possibilities. The Company has a strong value system that serves as
guidelines for exhibiting appropriate behaviour, internally and externally.
This year, Kansai Nerolac Paints Limited (KNP) re-looked at the changing
business environment and the organizations core values.
The Company has 67 sales locations to serve its customers and is well
supported by five strategically located factories. The proximity of plants to
the customers' base offers logistical advantage and an edge over others, when
it comes to service. The Company operates on SAP R-3 platform and uses Advanced
Planning Optimizer for Demand Planning, Forecast and Demand Fulfillment. While
Data Intelligence Warehousing supports day to day decisions within the Company,
Knowledge Portal serves as repository of accumulated knowledge within the
organization. Information Technology (IT) is centralized with online
connectivity and security framework. The performance at all levels of employees
is reviewed on the platform of the Balanced Score Card.
Management Committee (MC) comprising of Top Management decides on broad
policies and sets direction of organization and reviews results. Business
Analysis Team (BAT) analyzes business problems, opportunities and supports
MC.
KNP has been consistently meeting challenges of the dynamic business, rising
costs, industry demands and competitive scenario, in order to meet
profitability objectives, by taking measures to increase productivity and
manage the resources more effectively, meeting customers' expectations at the
same time.
How the industry fared:
Paint industry continues to do well riding high on the growth in housing and
the automobile sectors. GDP growth of 8.5% for the year has been supporting and
so has been the growth of 10.5% in Manufacturing and 3% in agriculture. These
are the indicators of the buoyant economy. Only concern has been the inflation,
which has been hovering around 6%. The Raw Material prices for the majority of
the period in this year have been on a rise.
The paint industry growth of 15% has not been surprising, thus taking the
industry size to Rs.100000 millions, both for organized and unorganized sectors
put together. The share of the organized sector is estimated to be Rs.74000
millions.
Sales growth for KNP is in line with the industry growth. The growth this year
is led by decorative business and within the decorative business, by Interior
and Exterior emulsions. The paint industry is likely to do well in the next two
years as well. the management therefore looks to the future with confidence,
even though there is increasing competition from international paint
companies.
Marketing initiatives:
The Company went though the exercise of new brand architecture as a part of its
Corporate Identity (CI) initiative. Products were re-branded as per new
classification/brand architecture and the pack designs changed. The new product
packs now look more contemporary, futuristic and have been well accepted by the
consumers. Continuing to take the platform of Innovation, new products have
been launched in the decorative business like Nerolac Impressions Metallic and
plain finishes, Excel Total with seven years warranty for exterior application.
Suraksha Advanced with four years warranty for exteriors. Beauty Flexi Coat, a
crack free finish Emulsion in premium range for the interiors has also been
launched along with Designer finishes.
The back end support service, under Nerolac Assured Paint Service
(NAPS), in select towns, is doing well with more and more consumers passing on
supply & apply contracts to KNP's trained applicators. The Company's
Institutional cell has also done extremely well by lapping up more contracts.
Setting up an Impressions Experience Center, at the Company's Head Quarters has
been another major initiative to provide touch & feel facility for the
consumers and serve as a learning centre before this concept is taken to the
retail market.
In Industrial business, General Industrial, High Performance Coatings and
Powder coating business has done extremely well. The growth in automotive
business has been in line with sector growth.
The new technology introduced of three coats- one bake has been well accepted
by the automobile industry, resulting into high productivity and savings in
power cost at the customers' end. UV cure technology has been introduced in the
market paving the path for KNP to make rapid strides into the futuristic
technology.
Multiple CED lines have been awarded in this year at the new and existing
plants of the Automobile manufacturers, thus further strengthening the
Company's position in this area.
Opportunities & Threats:
The Company continues to identify gaps in the customers' needs and the products
available and has been expanding its brand portfolio. The current customer is
well enlightened, demanding, is clear on the choice of finishes unique to his
personality and is open on experimentation. More over, customer is looking for
a back end support. The Company is geared up to exploit these opportunities and
grow its business.
Value additions, customer responsiveness and satisfaction are keys to
performance and for retaining the market shares. Delivering the products at the
prices which are competitive, inspite of rise in raw material cost and still
maintain profitability is an ongoing challenge requiring a continuous working
on improving internal operational efficiencies. KNP has been therefore
continuously working in the areas of product improvements, innovation in
products and services. Various products and finishes have been offered both in
decorative and industrial business, addressing the needs of customers both on
quality and price.
There is a growing competition visible with more and more international players
entering the industry and the way business is being transacted getting
redefined.
Research & Development (R&D) and
Technology:
Research & Development department of the Company continued carrying out research
to specific areas like development of new coatings/paints, quality upgradation
of existing products, development of resins and polymers for paints, value
engineering, process development and import substitution.
The benefits derived as a result of R&D have been in development and
commercialization of new products. This year, developments have been:
* 3 wet coat automobile coating system.
* Hybrid Technology for Automotive metallic base coats.
* Glass clear lacquer.
* Premium Exterior Architectural Paint.
* Advanced Economy Exterior Emulsion.
* Interior Flexi Stain Resistant Architectural Paint.
* Premium Interior Water Borne metallic finish Architectural
paint.
R&D has played a crucial and a supportive role in KNP maintaining
leadership in Industrial/automotive coatings and making inroads in the
decorative sector.
Internal control systems and their adequacy:
KNP has an adequate internal control system at place, which ensures that:
* The transactions are authorized, recorded and reported correctly.
* The operations are conducted in an efficient and cost effective manner
abiding by the law of the land.
* The assets of the Company are adequately protected.
The key elements of the internal control system of the Company are:
* Organization structure is well defined and limits of authorization are
assigned.
* The Key Result Areas (KRAs) at all the levels are well defined and
reviewed systematically.
* Annual business plans at department level and for the Company is well
structured and plans reviewed monthly through Balanced Score Card (BSC).
* SAP R3 operating system for recording real time transactions.
* Monitoring of statutory compliances through BSC.
* New Product Development process strictly followed.
* Capital Expenditure sanction process through Request For Sanction
(RFS) and Return On Investment (ROI) basis.
Information
Technology (IT):
The Company continued to make investment in technologies which are directed
towards simplifying and making the business processes robust. The Company has
commenced the process of moving towards using IT to build an extended
enterprise.
Improved productivity was the key in simplifying the business processes. The
Company's Vision and the Business Process Maturity Model continued to be the
drivers on which current years initiatives were based upon. Security, Disaster
Recovery (DR) and improved connectivity speeds were also the focus areas for
the current year.
Last year, during R/3 upgrade, a lot of Business Process optimization was done
and new tunctionalities were implemented. This year considerable time has been
invested in realizing the business benefit from the same. The focus of the
initiatives in the application space has been oriented towards improving productivity
and providing analytical support at the end user level.
Vendor Portal was implemented to bring in efficiency in the process of Vendor
Management and having online connectivity with the Company's vendors.
There has been a thrust on imbibing ISO standards as far as security is
concerned. Various security tools are implemented to improve the data and
assets security. The ISO 27001 standard for data security has been adopted for
IT. The Company has been awarded the ISO 27001 certificate by Intertek.
The Company also upgraded its Wide Area Network connectivity and has migrated
to RF connectivity (on MPLS) which has considerably improved the performance of
the Wide Area Network.
Community Development:
The activities in this area are carried out to improve the quality of life of
the community around, encouraging and engaging employees in volunteering,
wherever possible. Various interesting projects have been carried out in the
area of focus like Education, Health, Community Development and Environment
Preservation.
Major focus at all the plants has been in the areas of health and nine camps in
all have been conducted, covering locals and volunteered by staff members.
Themes covered are like general health check-up, densitometry test, Dental
check-up, lipid profile, health check-up camp for the students and Senior
Citizens.
In education area, support has been provided to the institutions that harness
education to students of all backgrounds with a specific focus on the education
of girl child. In backward areas starved of reading material, the Company
provided books for reference to the students at their school libraries. This
will keep reading skills alive, and be a focal point for education, information
and recreation.
In the areas of Community development, the Company focused on providing the
basic drinking water facility in the villages. Drinking water scarcity in the
villages around Bawal in Haryana is well known; therefore the Company supported
the villages here by creating facility to draw water and then sustain the
activity through the intervention of the local village bodies. Focus also has
been on supporting activities like Senior Citizens' outreach program,
encouraging under privileged students studying in Municipal Schools of Mumbai by
preparing and providing platform to them to show their talent in the areas of
sports.
On Children's Day, Little Masters Champion Trophy cricket match event was
carried out, witnessed by over 2000 municipal school children from Mumbai. All
the spectators were wearing Tshirts carrying a social message against use of
tobacco.
Environment preservation has been another area of focus where the Company
initiated a water conservation scheme of constructing a check bund, in
association with Bombay Chamber of Commerce & Industry. Development of
Children's Park at Rewari near Bawal in Haryana has been another activity in
this area.
The activities selected are focused clearly and consistently on issues those
resonate in the community that the Company wants to touch. Annual Corporate
Social Responsibility (CSR) Report has been published for this year as well,
covering the activities carried out in detail.
Financials:
Gross sales for the year aggregated to Rs.14840 millions reflecting a
growth of around 21% over the previous year. During the year, Polycoat Powders
Limited (PPL), a 100% subsidiary of Kansai Paint Co. Limited, Japan was merged
with Kansai Nerolac Paints Limited Thus current year's sales includes sales of
PPL. The growth on a stand alone basis is at 14.9%. Raw material inflation
during the year was high at 7% impacting profitability of the Company.
Overheads were kept under control. Overall overheads as a percentage to sales,
dropped from 13.3% to 12.4%. Profit Before Depreciation, Interest and Taxes
(PBDIT) (without other income) for the year is higher at Rs.171.44 cores as
compared to Rs.1571.400 millions of previous year reflecting a growth of 9.1%.
Depreciation for the year is slightly higher at Rs.335.600 millions as against
Rs.317.800 millions of previous year. Other income is lower at Rs.240.500
millions as compared to Rs.750.100 millions of previous year. Previous year's
other income includes extraordinary gain of Rs.504.000 millions by way of
profit on sale of shares of Poll Powders Limited to Kansai Paint Company
Limited, Japan.
If this is excluded, then other income for the current year is more or less at
the same level as the previous year. Profit Before Tax is at Rs.1609.700
millions as compared to Rs.1492.000 millions (normal profit) of the previous
year which is a growth of 7.9%.
Collaboration
The Directors record their appreciation for the contribution made and support
provided by Kansai Paint Company Limited, Japan (Kansai). Kansai continues to
provide support on process design, quality improvement, world class technology,
which has helped the Company in maintaining market leadership in the industrial
business including automotive coatings, by servicing existing customers better
and adding new lines. Kansai also provides technology for manufacture of
architectural coatings.
The Company also has Technical Assistance Agreement with E.I. du Pont de
Nemours and Company Inc., USA for automotive coatings, Oshima Kogyo Company
Limited, Japan for manufacturing heat resistant paints, Dupont Performance
Coatings GmbH & Company KG, Germany, for Anodic Electrode position Coating
System and Ameron International Performance Coatings and Finishes, USA for high
performance coatings. The Directors record their appreciation of the cooperation
from these collaborators.
Fixed Assets:
v Freehold Land
v Leasehold Land
v
Buildings
v Building for
Scientific Research
v Plant &
Machinery
v Plant &
Machinery for Scientific Research
v Laboratory
Equipment
v Furniture Fittings
and Equipment
v Furniture Fittings for
Scientific Research
v Electrical
Installation
v Electrical
Installation for Scientific Research
v Motor Cars and
Vehicles
v Assets acquired on
Finance : Lease — Motor Cars
v
Asset given on Operating : Lease - Colour Dispensers
It is in trade
terms with:
v Aryavart Chemicals Limited
v Apollo Plastic Industries
v Alpha Chemie
v H.A.H. Bachooali Tin Factory
v Dimple Drums & Barrels Limited
v Delta Industrial Resins Private Limited
v The Good Earth Chemicals
v Gujarat Containers Limited
v Gopal Metals Containers Private Limited
v Hem Paints Private Limited
v Kamani Oils Industries
v Kromiium & Chemicals Private Limited
v Lachemi Organics
v Laxmi Organics Industries Limited
v Maharashtra Metal Works Private Limited
v Mercury Containers Private Limited
v Span Chemicals
v Soujesh Chemicals Private Limited
v Unicat Chemical Private Limited
v Vidya Metals Containers
v Vapi Pigments Chemicals & Allied
Products
v Mountain Minerals & Microns Limited
v Suvidha Drums
v Raymer Engineering
v Sanchem Engineers Private Limited
v Durga Paints
v Soujnya Enterprises
v Metal Seam Company Private Limited
As Per
Website Details
Kansai Nerolac Paints Limited Announces Q1
Results IQ-FY 2006-07
Net Sales up 18% to Rs. 2676.000 Millions , Net Profit up 23.2 %
to Rs.271.000 Millions
Mumbai, July 27,
2006
Kansai Nerolac Paints Limited, one
of the leading Paint companies in the country announced
its unaudited financial results for the first quarter ended 30th
June 2006 at the Board Meeting held today.
The Company has
registered gross sales of Rs. 3263.400 millions, an increase of 18.1% as
compared to Rs 2762.500 Millions in the previous period while the Profit Before
Tax increased by 19.1% to Rs 399.000 Millions. The net profit of the
company for the quarter increased by 23.2% over the corresponding period last
year and stood at Rs.271.000 Millions.
Commenting on the growth, Mr. H.
M. Bharuka, Managing Director, Kansai Nerolac Paints Limited said, “They are
looking forward to an eventful year ahead, with a Corporate Identity makeover
in the anvil. They have had a very fruitful year the last fiscal and what kept
us ahead in the industry was their relentless effort to continue with their
research, community development initiatives, technology in developing new
products & shades and keeping abreast of all the latest trends in the
sector. The boom in housing & automobiles sector continues to accentuate
the sales both in decorative & industrial. The company has also bettered
its performances because of its cost efficiencies and has hence been able to
perform amply well, which has been the highlight of the quarter gone by.”
NEROLAC & DISNEY PRESENT
WALLS THAT TELL A STORY
Mumbai,
January 3, 2006
The New
Year began with an announcement from one of the biggest paint companies in the
country, Goodlass Nerolac Paints Limited who declared the launch of their
latest range of products for kids, ‘Nerolac Disney’ today at a Press Conference
in Mumbai.
With a buoyant 50%
population in India that is young and below the age of 20, ‘Catch them Young’
seems to be the tagline of this age. Nerolac has always understood the
decision making power and the importance of communicating to children and hence
creating a product for them was always a part of the marketing strategy.
In this day and age
when home decor is beyond just a clean house and is indicative of personal
style statements, dressing up children’s dens is fast catching up as a
necessity. Decorating children’s rooms is getting more attention today then
ever before because of two major trends:
v
The average number of children in Indian homes today is two or less which
leaves with more
resources to indulge in materializing
the fantasies of their little ones
v
Across the board, there is more disposable income today. With houses generally
smaller and with
fewer rooms to absorb the resources,
more money can be spent making each room a delight unto
itself
Research conducted
by Nerolac threw up facts of parents being more than eager to dress up their
kids’ rooms, which was one of the biggest motivations for Nerolac to start
working on a concept around Kids’ Rooms.
While working on
the concept of ‘Kids Room Decor’ the idea of tying up with Disney Consumer
Products and using their characters to beautify the ‘Kids Room was found to be
very exciting and hence the birth of the partnership between - Nerolac &
Disney.
Speaking about the
partnership, Mr. H. M. Bharuka, Managing Director – Goodlass Nerolac Paints
Limited said, “Disney was considered due to its high awareness, especially of
characters like Mickey, Donald and Pluto among children. Besides, none other
than Disney brings childhood imagination and fantasies alive. In fact what
makes this association so endearing is that they too have grown up with an
entire generation of Disney characters.”
Mr. Rajat Jain,
Managing Director, The Walt Disney Company (India) said, “Ensuring an
enriching, engaging and relevant brand experience for kids in India has been an
important agenda for us. The Nerolac-Disney product provides an outlet for families
to magnify their imagination and experience the real magic. On their part, they
are excited about this partnership with Nerolac in providing this creative,
high quality and reasonably priced solution for kids and their families across
India.”
Nerolac Disney is
being positioned as a paint that helps you ‘Bring The Kids Dreams Alive’
through wall designs that tells a story of their own. Initially only to be
launched in 8 markets viz; Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Pune,
Hyderabad and Bangalore, the product pack will contain Wall designs which
consists of a ‘Paint for the wall’ and ‘Custom made Stencils’ to capture the
designs on the wall. In spite of being a premium product, the product has been
economically priced for the Indian Household. For design and painting of one
wall with Nerolac Disney design will cost around Rs 2,500/-.
An elaborate
service model has been put in place for implementation. A call center is being
set up with a toll free number in Mumbai to take calls from any consumer from
the eight launch cities, to begin with. At each city level ‘Relationship
Officers’ have been recruited who will consult households individually going in
for ‘Nerolac Disney’. A panel of contractors and painters is being constituted
in each city who will be specially trained by Nerolac for executing the job as
per highest quality standards and in a hassle free manner. One can avail of
this service by calling in to the toll free number 1600 2200 24 and also SMS to
4646 “Kids aspire to live in an imaginary world of their own. And Nerolac found
lot of opportunity in helping kids getting an imaginary world by
conceptualizing this product. The key insight being used, which will create a
need in the minds of the consumer is that each one of us aspires to provide the
best to their kids. The initiative will be rolled out in the launch cities with
TV & Print, which will be the core communication tools. To reach out to a
larger audience base they will also drive the entire venture in creating an
experience for their consumers in each city for which they are targeting
multiplex, malls and other such attractive venues for children.” Added Mr. Anuj
Jain – Vice President Sales and Marketing, Goodlass Nerolac Paints Limited.
Kansai Nerolac
Paints Ltd announces its Q3 Results
Registers 8% growth in turnover, Net profit
up by 17.1%
Mumbai, January 21, 2008
Kansai Nerolac Paints Limited the country’s second largest paint company
announced its financial results for the third quarter ended 31st December, 2007
at the Board Meeting held today.
The Company has registered net sales of Rs. 3453.900 millions, an
increase of 7.1% as compared to Rs 3225.600 millions in the corresponding
period while the Profit Before Tax increased by 12.7% to Rs 439.300
millions. The net profit of the company for the quarter increased by
17.1% over the corresponding period last year and stood at Rs 302.400 millions
as compared to Rs 258.200 millions during the corresponding quarter of the
previous year.
Cumulatively, the net sales for nine months ended as on December 31,
2007, has increased to Rs 10113.400 millions showing a jump of 7.9 as against
Rs 9371.700 millions for the same period in the previous year. Profit After Tax
for nine months ended December 31, 2007, also increased by 13.6% to Rs. 958.300
millions as against Rs 843.600 millions in the corresponding period of the
previous year.
Commenting on the growth of the company, Mr. H. M. Bharuka, Managing
Director, Kansai Nerolac Paints Limited, said “We are concerned about the negative
growth in automobile sector and rising crude oil prices. In architectural,
however, we have done well. Inspite of the rising cost pressures, we have even
grown on profits. We will continue to focus on our research, technology in
developing new Colors, shades, finishes and products, keep abreast of all the
latest trends in the sector.”
About Kansai Nerolac Paints Limited:
Kansai Nerolac Paints has been at the forefront of paint manufacturing
for more than 87 years pioneering a wide spectrum of quality paints. Kansai
Nerolac is the second largest paint company in India and undisputed leader in
Industrial segment, having a turnover of Rs. 14840 millions. The company has
four strategically located manufacturing units all over India and a strong
dealer network of over 11000 dealers across the country. The company
manufactures a diversified range of products ranging from architectural
coatings for homes, offices, hospitals and hotels to sophisticated industrial
coatings for most of the industries. Please see www.nerolac.com
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.39.73 |
|
UK Pound |
1 |
Rs.78.96 |
|
Euro |
1 |
Rs.59.60 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--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 |
|
78 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|