MIRA
INFORM REPORT
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Report Date : |
30.07.2008 |
IDENTIFICATION
DETAILS
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Name : |
SADHANA NITROCHEM LIMITED |
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Registered Office : |
207, Kakad Chambers, 2nd Floor, 132, Dr. A B Road, Worli, Mumbai-400018,
Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
21.07.1973 |
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Com. Reg. No.: |
11-16698 |
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CIN No.: [Company
Identification No.] |
L24110MH1973PLC016698 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMS37459C |
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PAN No.: [Permanent
Account No.] |
AABCS1231R |
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Legal Form : |
A public limited liability company. The company’s shares are listed on
the stock exchange |
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Line of Business : |
Manufacturer of Nitrobenzene, Mata Enemo Phenol, Metallic Acid,
Aniline, Disulphonic Acid, Resist Salt |
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 1029990 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a well established company having satisfactory track.
Profit margin was under pressure. Payments are reported as slow but correct. The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office : |
207, Kakad Chambers, 2nd Floor, 132, Dr. A B Road, Worli,
Mumbai-400018, Maharashtra, India |
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Tel. No.: |
91-22-24974405/66604881-5 |
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Fax No.: |
91-22-24950448/66604147/46 |
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E-Mail : |
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Website : |
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Factory: |
47, M.I.D.C Industrial Area, 51,Roha-402116,Raigad District,
Maharashtra, India |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Arvind Doshi |
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Designation : |
Director |
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Name : |
Mr. Arvind Apte |
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Designation : |
Director |
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Name : |
Mr. Ramesh A Shroff |
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Designation : |
Director |
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Name : |
Mr. Priyam Jhaveri |
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Designation : |
Director |
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Name : |
Mr. Dhirendra M Shah |
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Designation : |
Director |
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Name : |
Mr. Abhishek A Jhaveri |
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Designation : |
Additional Director |
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Name : |
Mr. Nitin R Jani |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Nitin.R Jani |
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Designation : |
Company Secretary |
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Name : |
Mr. A.D Javeri |
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Designation : |
Chairman |
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Name : |
Mr. Asit Javeri |
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Designation : |
CMD |
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Name : |
Mr. Viren Gopal |
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Designation : |
Marketing Manager |
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Name : |
Mr. K. Venkataramanan |
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Designation : |
Export Manager |
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Name : |
Mr. V.J. Modi |
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Designation : |
Sales Manager |
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Name : |
Mr. M.T Doshi |
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Designation : |
Purchasing Manager |
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Name : |
Mr. V. Raamakrishnan |
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Designation : |
Administrative Manager |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Nitrobenzene, Mata Enemo Phenol, Metallic Acid,
Aniline, Disulphonic Acid, Resist Salt |
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Products : |
ITC Code:29171990
ITC Code:29222912
ITC Code: 29214233 |
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Exports : |
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Countries : |
Europe and far East , China, Japan, South Africa |
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Imports : |
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Countries : |
Europe and far East , China, Japan |
PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Organic Chemicals |
MT |
9036 |
9036 |
2839 |
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Chemicals Intermediates |
MT |
3575 |
3575 |
14365 |
GENERAL
INFORMATION
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No. of Employees : |
300 |
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Bankers : |
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Banking
Relations : |
Satisfactory |
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Facilities: |
SECURED LOANS: From Banks: On Cash Credit/ Packing Credit Account
Term loan from Bank:
UNSECURED LOANS:
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Auditors : |
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Name : |
V. Sankaraiyar and Company (Chartered Accountant) |
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Address : |
2-C, Court Chambers, 35, New Marine Lines, Mumbai-400023, Maharashtra,
India |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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4000000 |
Equity Shares |
Rs. 10/- each |
Rs.40.000 millions |
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1000000 |
Unclassified Shares |
Rs. 10/- each |
Rs. 10.000 millions |
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Total: |
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Rs. 50.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
2045451 |
Equity Shares |
Rs. 10/-
each |
Rs.20.454
millions |
Includes capitalization by issue of fully paid Bonus Shares of Rs. 10/-
each
|
No of Shares |
Face value |
Capitalised From |
Year |
Ratio |
|
162500 |
Rs. 1.625 millions |
General Reserve |
1987-88 |
2:5 |
|
487012 |
Rs. 4.870 millions |
Share Premium |
1995-96 |
1:2 |
|
584414 |
Rs. 5.844 millions |
Share Premium |
2002-03 |
2:5 |
FINANCIAL DATA
[all figures are in Rupees Millions]
.
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
20.454 |
20.455 |
20.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
185.544 |
184.901 |
181.400 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
205.998 |
205.355 |
201.900 |
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LOAN FUNDS |
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1] Secured Loans |
365.431 |
281.769 |
145.900 |
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2] Unsecured Loans |
17.760 |
22.311 |
19.900 |
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TOTAL BORROWING |
383.191 |
304.080 |
165.800 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
589.189 |
509.436 |
367.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
328.043 |
235.691 |
193.400 |
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Capital work-in-progress |
92.923 |
131.447 |
29.100 |
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INVESTMENT |
5.430 |
5.507 |
11.800 |
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DEFERREX TAX ASSETS |
4.323 |
2.406 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
152.871
|
113.501 |
106.000 |
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Sundry Debtors |
39.321
|
82.565 |
75.100 |
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Cash & Bank Balances |
2.663
|
3.800 |
5.300 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
102.068
|
77.596 |
47.800 |
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Total
Current Assets |
296.923
|
277.462 |
234.200 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
124.089
|
127.753 |
86.800 |
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Provisions |
14.364
|
15.324 |
14.000 |
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Total
Current Liabilities |
138.453
|
143.077 |
100.800 |
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Net Current Assets |
158.470
|
134.385 |
133.400 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
589.189 |
509.436 |
367.700 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
670.507 |
563.035 |
452.800 |
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Other Income |
0.000 |
0.000 |
18.100 |
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Total Income |
670.507 |
563.035 |
470.900 |
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Profit/(Loss) Before Tax |
3.116 |
12.995 |
26.600 |
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Provision for Taxation |
0.800 |
2.500 |
4.000 |
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Profit/(Loss) After Tax |
2.316 |
10.495 |
22.600 |
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Export Value |
555.060 |
458.680 |
0.000 |
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Import Value |
0.702 |
2.481 |
0.000 |
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Expenditures : |
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Manufacturing Expenses |
0.000 |
0.000 |
16.800 |
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Administrative Expenses |
22.703 |
18.957 |
0.000 |
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Raw Material Consumed |
410.400 |
334.399 |
157.500 |
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Increase/(Decrease) in Finished Goods |
7.200 |
(1.800) |
(2.500) |
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Salaries, Wages, Bonus, etc. |
32.780 |
29.626 |
0.000 |
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Managerial Remuneration |
3.610 |
2.902 |
0.000 |
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Payment to Auditors |
0.317 |
0.254 |
0.000 |
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Power & Fuel |
81.684 |
55.342 |
34.600 |
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Depreciation & Amortization |
39.478 |
33.961 |
32.800 |
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Other Expenditure |
69.219 |
76.399 |
205.100 |
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Total Expenditure |
667.391 |
550.040 |
444.300 |
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QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2007 1st
Quarter |
30.09.2007 2nd Quarter |
31.12.2007 3rd Quarter |
31.03.2008 4th Quarter |
|
Sales turnover |
164.200 |
144.400 |
195.000 |
236.200 |
|
Other income |
2.500 |
6.300 |
3.200 |
3.500 |
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Total income |
166.700 |
150.700 |
198.200 |
239.700 |
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Total
expenditure |
158.000 |
148.400 |
187.200 |
214.300 |
|
Operating profit |
8.700 |
2.300 |
11.000 |
25.400 |
|
Interest |
10.200 |
10.000 |
10.000 |
10.700 |
|
Gross profit |
(1.500) |
(7.700) |
1.000 |
14.700 |
|
Depreciation |
9.500 |
10.000 |
10.400 |
11.100 |
|
Tax |
0.200 |
0.300 |
0.200 |
0.000 |
|
Reported PAT |
(11.200) |
(18.000) |
(9.600) |
3.300 |
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KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
1.67
|
1.15 |
0.78 |
|
Long Term Debt – Equity Ratio |
1.07
|
0.76 |
0.56 |
|
Current Ratio |
1.10
|
1.27 |
1.66 |
|
TURNOVER RATIOS |
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|
Fixed Assets |
0.93
|
0.92 |
0.85 |
|
Inventory |
5.00
|
5.11 |
4.83 |
|
Debtors |
10.92
|
7.11 |
7.45 |
|
Interest Cover Ratio |
1.13
|
1.52 |
3.29 |
|
Operating Profit Margin (%) |
10.11
|
10.54 |
17.56 |
|
Profit Before Interest And Tax Margin (%) |
4.18
|
4.48 |
8.44 |
|
Cash Profit Margin (%) |
6.28
|
7.26 |
12.92 |
|
Adjusted Net Profit Margin (%) |
0.35
|
1.20 |
3.80 |
|
Return On Capital Employed (%) |
5.06
|
5.72 |
11.00 |
|
Return On Net Worth (%) |
1.12
|
3.29 |
8.80 |
LOCAL AGENCY
FURTHER INFORMATION
History
In 1973, a small beginning was made in the field of chemicals
with the establishment of (SNCL) - a subject was committed to producing
high quality chemical intermediates by setting up with 12,000 TPA plant in
Roha, 135 Kms. from its Head Office in the metropolis of Mumbai, SNCL, an
existing listed, public limited subject was promoted by its founder Chairman
Mr. D.T.Javeri with other co-promoters for the manufacture of 9000 TPA of
Nitrobenzene based on the technology from AB Chematur Division of the Nobel
Industries, Sweden.
In
1979 the subject diversified into the manufacture of downstream products viz.,
Metanilic Acid and Sodium Meta Nitrobenzene sulphonate. Based on the in-house
technology. Subject has also set up projects for manufacture of 3,3 Dinitro
Diphenyl Sulphone, Aniline 2,5 Disulphonic acid, Aniline 2,4 Disulphonic acid.
In 1995 subject commissioned a 550 TPA plant to manufacture Meta Amino Phenol.
This project was set up in technical collaboration with Biazzi S.A.,
Switzerland. As a reputed manufacturer subject has been able to enter into
contracts with foreign companies for custom and toll manufacturing. In the year
2000 a new 350 TPA plant to produce Butane Tetra 1,2,3,4 Carboxylic Acid was
commissioned. In its R & D Laboratory, there is development work is going
on for new chemical intermediates.
Since
inception, subject has devoted its resources exclusively for manufacture and
sale of intermediates. Production of intermediates under rigid quality
standards has been the hallmark of company’s success in attuning and propelling
it to customer requirements.
The transition of product line, with reliance on its well-equipped quality
control laboratory has been the motivating force in sustaining growth and
export, in competition with giants in the international market, satisfying
highly discerning and quality conscious clients, including multinationals,
spread across the world.
Subject is a Government Recognized Golden Export House, actively engaged in the
Exports.
In recognition of its export performance subject has been awarded number of
export awards.
Subject also has its Research & Development Laboratory, housing
sophisticated instruments / equipments / pilot plant etc., for carrying out
developmental work on various downstream derivatives and chemical
intermediates. Some of the intermediates developed in the R & D Laboratory
have been commercialised and few more intermediates are under developmental
stage.
Review
of operation:
During the year under review subject has achieved of Rs.
670.500 millions as against Rs. 563.000 millions in the previous year
registering an year on year growth of more than 19%
Market condition during the year continued to be highly
price competitive. Due to the power shortage the supply of electricity was
highly irregular which necessitated use of costly diesel generated power. These
irregularities and interruption hampered continuous production resulted in
escalated cost of production.
The profit before depreciation was at Rs. 42.600 millions.
After providing for depreciation of Rs. 39.500 millions and Tax provision of
Rs. 0.800 millions the profit after tax was at Rs. 2.300 millions
Dividend:
The Directors considering a dividend of Rs. 1.50 per Equity
Share of Rs. 10/- each for the year 2006-07
The proposed dividend if approved will entail an outflow of Rs.
3.590 millions inclusive of dividend distribution Tax
Exports:
Subject is having status of a “TWO STAR EXPORT HOUSE”
granted by ministry of commerce government of India.
Aggressive marketing strategy along with thrust on high
value products has resulted in escalating the exports of company to a new peak.
Exports during year were Rs. 567.500 millions compared to Rs. 466.000 millions
in the previous years registering a handsome increase of more than 22%
Exports constituted more than 87% of the overall sales.
Company’s exports are well diversified in terms of product range as well as the
countries of exports.
Subsidiary:
During the year Lifestyle Networks Private Limited has
become Public Limited. The Project of providing Metro wide Wi-Fi Network in the
city of Mumbai has been held up for delay in issue of requisite licence by
department of Telecommunication.
Pursant to the provisions of Section 212 of the companies
Act 1956, the Annual Accounts of subject, a wholly owned foreign subsidiary and
LNPL a partly owned Indian subsidiary of company are attached.
In compliance with accounting standard AS-21, subject has
attached the consolidated statement of account giving therein the consolidated
financial statement relating to the company and its subsidiaries.
Contingent
Liability:
|
Particulars |
31.03.2007 (Rs. In Millions) |
31.03.2006(Rs .In Millions) |
|
Estimated amount of contracts remaining to be executed on
capital accounts (Net of Payments) |
7.000 |
41.506 |
|
In respect of Guarantee given by the company’s Bankers for Central Excise and other purposes |
0.075 |
3.375 |
|
Disputed Central Excise claim in appeal |
---- |
0.704 |
|
In respect of Bill discounted |
109.068 |
90.468 |
|
Disputed Income Tax demand (Hon’ble Bombay high court was pleased to issue rule in
company’s writ petition challenging the assessment order in re- opened
assessment. Based on legal advice company is hopeful of succeeding in the
writ proceedings and accordingly no provision is made.) |
27.060 |
27.060 |
|
Amount outstanding in respect of guarantee given to bank
for term loan availed by subsidiary. |
68.154 |
----- |
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. 42.54 |
|
UK Pound |
1 |
Rs. 84.86 |
|
Euro |
1 |
Rs. 66.95 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
45 |
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 |
|