MIRA
INFORM REPORT
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Report Date : |
05.06.2008 |
IDENTIFICATION
DETAILS
|
Name : |
INDOFIL CHEMICAL COMPANY DIVISION OF MODIPON LIMITED |
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Registered Office : |
Hapur Road, Modinagar - 201204, Ghaziabad, Uttar Pradesh |
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Country : |
India |
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Financials (as on) : |
30.09.2007 |
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Year of Establishment : |
19.08.1965 |
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Com. Reg. No.: |
3082 |
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CIN No.: [Company
Identification No.] |
L65993UP1965PLC003082 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MRTM 00650G |
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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 Synthetic Filament Yarn (Nylon and Polyester), Yarn Waste (including derived) and By-Products and Mancozeb Indofil M-45/ other agro formulations, Speciality industrial chemicals and other chemicals. |
RATING &
COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Maximum Credit Limit : |
USD 670000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is an old and established company having moderate track. The
company is passing through difficult times and the business shows downward
trends. Payments are reported as slow and delayed at times. The company can be considered for small to mediocre business dealings
with slight caution initially. |
LOCATIONS
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Registered Office/ Factory : |
Hapur Road, Modinagar - 201 204, Ghaziabad, Uttar Pradesh |
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Tel. No.: |
91-1232-242201 to 242209 |
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Fax No.: |
91-1232-242084 |
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E-Mail : |
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Website : |
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Corporate Office : |
E-3, 2nd Floor, Kailash Colony, New Delhi – 110 048 |
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Tel. No.: |
91-11-41627019 |
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Fax No.: |
91-11-41733389 |
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E-Mail : |
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Factory : |
Kolshet, Off. S. V. Road, Sandoz Baug P.O., Thane - 400 607, Maharashtra |
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Tel. No.: |
91-22-2534 1877 |
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Fax No.: |
91-22-2534 3771 |
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Factory 2 : |
Modinagar -
Modipon Fibres Company
(Fibres Division) |
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Branches : |
Nirlon House, Dr. Annie Besant Road, Mumbai - 400 025, Maharashtra |
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Tel. No.: |
91-22-2493 7391 / 2496 0000 |
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Fax No.: |
91-22-2493 5667 |
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E-Mail : |
DIRECTORS
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Name : |
Mr.M. K. Modi |
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Designation : |
Chairman and Managing Director
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Qualification : |
B.Sc. (Chem. Engg.) A.I.C.E., Ph. D. |
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Date of Appointment : |
15.07.1967 |
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Name : |
Mr. Manish K. Modi |
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Designation : |
Director |
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Name : |
Mr. Avinash Kumar Srivastava, IAS |
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Designation : |
Director (Nominee of UPSIDC) |
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Name : |
Mr. M. V. S. Rami Reddy, IAS |
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Designation : |
Director (Nominee of UPSIDC) |
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Name : |
Mr. O. P. Makkar |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Me. M. K. Goel |
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Designation : |
Company Secretary |
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Name : |
Mr. C. S. Panda |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.06.2006
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Names of
Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group |
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Indian |
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Individuals/Hindu Undivided Family |
3,98,774 |
5.09 |
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Bodies Corporate |
35,90,484 |
45.81 |
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Public Shareholding |
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Institutions |
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Mutual Funds/ U T I |
7,600 |
0.10 |
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Financial Institutions/ Banks |
275 |
0 |
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Central Government/ State Government(s) |
13,01,974 |
16.61 |
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Insurance Companies |
2,38,453 |
3.04 |
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Foreign Institutional Investors |
3,00,000 |
3.83 |
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Non-Institutions |
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Bodies Corporate |
4,54,302 |
5.80 |
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Individuals : |
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(i) Individual Shareholders holding nominal Share Capital upto
RS.0.100 Millions |
7,09,938 |
9.06 |
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(ii) Individual Shareholders holding nominal Share Capital in excess
of Rs 0.100 Millions |
1,66,484 |
2.12 |
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Any Other (specify) : |
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-NRIs/OCBs |
3,32,613 |
4.24 |
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-Clearing Members |
3,37,160 |
4.30 |
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Grand Total (A)+(B)+(C) |
78,38,057 |
100.00 |
SHAREHOLDING MORE THAN 1%
AS ON 30TH JUNE, 2006
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Name of the
Shareholder |
Number |
Percentage |
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Modi Industries Limited |
7,00,000 |
8.93 |
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Modi Spg. and Wvg. Mills Company Limited |
7,00,000 |
8.93 |
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Aspen Developers Private Limited |
6,58,000 |
8.40 |
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K K Modi Inv. and Fin. Ser. Private Limited |
4,31,302 |
5.50 |
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Status Mark Finvest Limited |
3,38,714 |
4.32 |
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Modi Trading and Indl. Syn. Private Limited |
1,75,000 |
2.23 |
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Modi Care Limited |
1,49,110 |
1.90 |
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Transnational Growth Funds Limited |
1,42,522 |
1.82 |
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Gemini Trade Links Limited |
1,28,350 |
1.64 |
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U. P. State Industrial Development Corporation Limited |
13,01,974 |
16.61 |
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Accord Capital Markets Limited |
3,47,470 |
4.43 |
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OHM Stock Brokers Private Limited |
3,36,800 |
4.30 |
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Empire International Holdings Limited |
3,30,000 |
4.21 |
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The Indiaman Fund (Mauritius)
Limited |
3,00,000 |
3.83 |
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Life Insurance Corporation of India |
1,97,655 |
2.52 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and Marketing of Synthetic Filament Yarn (Nylon and Polyester), Yarn Waste (including derived) and By-Products and Mancozeb Indofil M-45/ other agro formulations, Speciality industrial chemicals and other chemicals. |
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Products : |
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Brand Names : |
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Agencies Held : |
MAS Services Limited, AB-4, Safdarjung Enclave, New Delhi-110029,
Maharashtra, India |
PRODUCTION STATUS
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Particulars |
Unit |
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Actual
Production |
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FIBERS DIVISION |
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Synthetic Filament Yarns (Nylon) |
MT |
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4718 |
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Yarn Waste (including derived), By-Products and Others |
B |
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560 |
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CHEMICALS DIVISION |
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Indofil M-45/Mancozeb |
MT |
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5673 |
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Other Agro Formulations |
KL/MT |
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2111 |
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Speciality Industrial
Chemicals |
MT |
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4667 |
GENERAL
INFORMATION
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Suppliers : |
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No. of Employees : |
1000 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Messrs P. R. Mehara and Company Chartered Accountant |
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Address : |
56, Darya Ganj, New Delhi-110002 |
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Name : |
Messrs M. M. Bilimoria and Company Chartered Accountant |
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Address : |
101, Sharda Chambers, Plot No. 15, Vithaldas Thackersey Marg, Mumbai-400020,
Maharashtra, India |
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Memberships : |
Ø All India Plastic Manufacturers' Association Ø Indian Paint Association Ø India Speciality Chemical Manufacturers' Association Ø CHEMEXCIL Ø Indian Crop Protection Association Ø Pesticides Association of India Ø Indian Chemical Manufacturers' Association |
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Associates : |
Ø Modi Alkalies and Chemicals Limited Ø Spark Plugs Company India Limited Ø Ambuja Cement Eastern Limited Ø Modi Rubber Limited Ø Modi Carpets Limited Ø Ashoka Mercantile Limited Ø Modi Industries Limited Ø Indofil Organic Industries Limited Ø Modi Care Limited Ø K K Modi Investment and Financial Services Private Limited Ø Beacon Travels Private Limited Ø Bina Fashions N Food Private Limited Ø Exevo India Limited Ø Godfrey Philips India Limited Ø H. M. A. Udyog Limited Ø Modi Entertainment Network Limited Ø W. D. India Private Limited Ø Premium Merchant Limited |
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Subsidiaries |
Ø Quick Investment (India) Limited Ø Good
Investment (India) Limited Ø Sparko
Credits Private Limited Ø Indofil
Organic Industries Limited Ø Modipon
Estate Private Limited |
CAPITAL STRUCTURE
As on 30.09.2007
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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20000000 |
Equity Shares |
Rs. 10/- each |
Rs .200.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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7838057 |
Equity Shares |
Rs.10/- each |
Rs. 78.381
Millions |
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Of the above Shares |
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(I) 12,14,990 Equity Shares were Issued as Partly Paid up to the
extent of Rs.3.050 Millions for Consideration other than Cash, |
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(II) 50,00,000 Equity Shares were allotted as Fully Paid up Bonus
Shares by Capitalisation of General Reserve and |
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(III) 8,38,057 Equity Shares were Issued to the Shareholders of
erstwhile Indofil Chemicals Limited
as Fully Paid up on merger without pay payment being received in Cash |
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71,792 |
15% Redeemable Convertible Cumulative Preference Shares |
Rs.100 each /- |
Rs. 7.179 Millions |
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Fully Paid up issued to the Shareholders of erstwhile Indofil
Chemicals Limited as Fully Paid up on merger without payment being received
in Cash |
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Total |
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Rs. 85.560 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
30.09.2007 18 Months |
31.03.2006 12 Months |
31.03.2005 12 Months |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
85.560 |
85.560 |
85.600 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
48.714 |
280.766 |
511.900 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
134.274 |
366.326 |
597.500 |
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LOAN FUNDS |
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1] Secured Loans |
586.819 |
1725.304 |
1583.00 |
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2] Unsecured Loans |
77.964 |
106.939 |
91.900 |
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TOTAL BORROWING |
664.783 |
1832.243 |
1674.900 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
799.057 |
2198.569 |
2272.400 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
256.461 |
1053.675 |
1145.900 |
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Capital work-in-progress |
0.000 |
0.000 |
18.000 |
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INVESTMENT |
0.284 |
3.478 |
11.400 |
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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 |
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|
1100.800 |
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Sundry Debtors |
101.121
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2675.201 |
995.700 |
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Cash & Bank Balances |
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|
316.800 |
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Other Current Assets |
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0.000 |
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Loans & Advances |
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|
722.700 |
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Total
Current Assets |
101.121
|
2675.201 |
3136.000 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
654.763
|
1608.211 |
1907.600 |
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Provisions |
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|
139.200 |
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Total
Current Liabilities |
654.763
|
1608.211 |
2046.800 |
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Net Current Assets |
[553.642]
|
1066.990 |
2046.800 |
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MISCELLANEOUS EXPENSES |
1095.954 |
74.426 |
7.900 |
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TOTAL |
799.057 |
2198.569 |
2272.400 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
30.09.2007 18 Months |
31.03.2006 12 Months |
31.03.2005 12 Months |
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Sales Turnover |
3356.006 |
4189.822 |
5489.200 |
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Other Income |
0.000 |
0.000 |
523.800 |
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Total Income |
3356.006 |
4189.822 |
6013.000 |
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Profit/(Loss) Before Tax |
[705.786] |
[222.650] |
169.700 |
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Provision for Taxation |
[16.175] |
[0.020] |
58.700 |
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Profit/(Loss) After Tax |
[689.611] |
[222.670] |
111.000 |
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Earnings in Foreign Currency : |
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Export Earnings |
377.614 |
544.258 |
820.706 |
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Imports : |
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Raw Materials |
521.113 |
571.562 |
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Stores & Spares |
4.552 |
3.043 |
684.330 |
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Capital Goods |
0.000 |
2.223 |
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Others |
0.000 |
0.000 |
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Total Imports |
525.665 |
576.828 |
684.330 |
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Expenditures : |
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Material, manufacturing and Others Expenses |
2716.409 |
2991.817 |
471.100 |
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Raw Material |
0.000 |
0.000 |
2657.900 |
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Excise Duty on Stocks |
[2.265} |
2.074 |
692.200 |
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Power and fuel |
0.000 |
0.000 |
334.800 |
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Employees Cost |
0.000 |
0.000 |
365.500 |
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Personnel |
314.623 |
350.126 |
0.000 |
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Administrative Expenses |
631.279 |
942.948 |
1006.500 |
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Miscellaneous Expenses |
0.000 |
0.000 |
28.500 |
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Interest and Financial Charges |
0.000 |
0.000 |
136.900 |
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Managerial Remuneration |
1.500 |
1.800 |
0.000 |
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Depreciation & Amortization |
115.517 |
147.038 |
149.900 |
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Exceptional items |
284.729 |
2976.669 |
0.000 |
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Total Expenditure |
4061.792 |
7412.472 |
5843.300 |
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QUARTERLY /
SUMMARISED RESULTS
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PARTICULARS |
|
31.12.2007 1st
Quarter |
31.03.2008 2nd
Quarter |
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Sales Turnover |
|
1.900 |
0.900 |
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Other Income |
|
0.300 |
1.100 |
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Total Income |
|
2.200 |
2.000 |
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Total Expenditure |
|
10.400 |
12.100 |
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Operating Profit |
|
[8.200] |
[10.100] |
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Interest |
|
1.900 |
2.500 |
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Gross Profit |
|
[10.100] |
[12.600] |
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Depreciation |
|
16.000 |
0.000 |
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Tax |
|
0.200 |
0.200 |
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Reported PAT |
|
[26.300] |
[12.800] |
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KEY RATIOS
|
PARTICULARS |
30.09.2007 18 Months |
31.03.2006 12 Months |
31.03.2005 12 Months |
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Debt-Equity Ratio |
0.00 |
5.27 |
4.61 |
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Long Term Debt-Equity Ratio |
0.00 |
3.00 |
2.79 |
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Current Ratio |
0.74 |
1.13 |
1.15 |
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TURNOVER RATIOS |
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Fixed Assets |
0.81 |
1.42 |
1.58 |
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Inventory |
4.95 |
4.78 |
6.34 |
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Debtors |
4.87 |
4.93 |
6.02 |
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Interest Cover Ratio |
[2.04] |
[0.77] |
2.24 |
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Operating Profit Margin(%) |
[4.54] |
0.61 |
8.32 |
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Profit Before Interest And Tax Margin(%) |
[7.73] |
[2.40] |
5.59 |
|
Cash Profit Margin(%) |
[7.87] |
[2.51] |
4.75 |
|
Adjusted Net Profit Margin(%) |
[11.06] |
[5.52] |
2.02 |
|
Return On Capital Employed(%) |
0.00 |
[5.74] |
14.27 |
|
Return On Net Worth(%) |
0.00 |
[82.97] |
29.41 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Modipon was established in 1965 as a joint venture between
the Modi group and Rohm and Haas (RandH), Philadelphia, US. Indofil Chemicals
was amalgamated with Modipon with effect from Jul.'82. Initially, the company
manufactured only synthetic yarn (nylon and polyester filament yarn).
Subsequent to the amalgamation, Modipon entered into the field of leather
chemicals, agro-chemicals and other industrial chemicals, previously
manufactured by Indofil.
Modipon has entered into a technical collaboration with NOY Engineering, Italy,
for the latest technology in nylon and polyester filament yarns.
It undertook an expansion programme of its fibres division which will increase
the production capacity of synthetic filament yarn by 7500 TPA. The chemicals
division is carrying on a debottlenecking and technological upgradation
programme which will increase the capacity to manufacture mancozeb fungicide at
its Thane plant while controlling effluent and pollution levels at the
plant.
The Fibres Division has become the first manufacturing unit in synthetic
Filament Yarn industry to get ISO 9001:2000 certifications during 2000-01.
RESTRUCTURING OF
THE BUSINESS OF THE COMPANY
As approved by the Members under Section 293(t)(a) of the Companies Act,
1956, Chemicals business of the Company alongwlth certain specified assets
("[CC Division) had been transferred to Indofil Organic Industries Limited
(TOIL) as a going concern on Slump Sale basis with effect from tat October,
2006 at a Value of Rs.1246.600 Millions In leans of the Slump Sale Agreement
and the Resolution passed by the shareholders of the Company, part
consideration amounting to As. 489.900 Millions has been applied for allotment
end distribution of 1,17,57,086 Equity Shares of Rs. 10/each by TOIL directly to
the Equity Shareholders of the Company in the ratio of 3 Equity Shares of IOIL
for every 2 Equity Shares held In the Company. The shares had been duly
allotted by TOIL to the Shareholders of the Company on 28.03.2007.
SCHEME OF ARRANGEMENT
As advised, the Company has, post re-structuring, filed a Scheme of
Arrangement U/s 391/393/394 of the Companies Act, 1956 before Hon'ble Allahabad
High Court seeking Its approval to the accounting treatment to the direct
allotment of shares of TOIL by TOIL to the shareholders of the Company in part
discharge of the purchase Consideration. Hon'ble High Court has, on 28.01.2008
passed an Order for holding a meeting of the Shareholders of the Company on
08.03.2008.
CHANGE IN ACCOUNTING YEAR
The Company had decided to extend, the current Accounting Year by six
months. Accordingly, the current Accounting Year has ended on 30th September,
2007 (18 months period) Instead of 31st March, 2007. The next Accounting Year
will close on 31st December, 2008. Thereafter the Accounting Year of the
Company will close on 31st March every year.
OPERATIONS
During the year, the Company registered total revenue of Rs.2997.843
Millions lace and Loss afterTax and Write Back of Excess Provision forTaxatlon
of Rs.689.611 Millions. The Sales and Production Volume of Nylon Filament Yarn
were 4,866 M.Tons and 4,718 M.Tons as against 6,596 M.Tons and 6,215 M.Tons
respectively in the Previous Year.
EXPORTS
The Exports (FOB Value) of the Fibres Division for the year were Rs.
87.000 Millions as against Rs.58.800 Millions In the Previous Year.
CONSERVATION OF
ENERGY
(a)
Energy Conservation measures taken:
FIBRES DIVISION
1. Increase in Polymerisation capacity has resulted in reduction of Power
consumption per M.Ton Chips production.
2. D G Set energy audit resulted into lower fuel consumption.CHEMICAL
DIVISION
CHEMICAL DIVISION
During the period the Division has received full bonus subsidy by
achieving the power factor.
(b)
Energy Consumption and Energy Consumption per unit of Production:
SUBSIDIARY
COMPANIES
The Company had acquired entire Equity Share Capital of M/s Sparko
Credits Private Limited Liability Company Limited [Name changed to Modipon
Estates Pvt. Limited (MEPL)] on 9th May, 2007 and consequently, MEPL has become
a wholly-owned Subsidiary of the Company.
During the year the Company has sold its entire investment in Equity
Shares of two wholly owned subsidiaries i.e. Good Investment (India) Limited
and Quick Investment (India) Limited w.e.f. 1 st October, 2006 on account of
Slump Sale of ICC Division. Accordingly, these two subsidiaries are no longer
subsidiaries of the company as at
the year end i.e. 30th September, 2007.
The Company had received without any consideration 50,000 Equity Shares
of Rs. 10/- each of Indofil Organic Industries Limited (IOIL) on 28"
October, 2006 which resulted in IOIL becoming wholly-owned subsidiary.
Subsequently, consequent upon allotment of further Equity Shares by IOIL to the
shareholders of the Company on 28'" March, ,2007, IOIL ceased to be the
subsidiary of the Company.
MANAGEMENT
DISCUSSION and ANALYSIS REPORT
The performance of Nylon and Polyester Yarn Industry has in general
remained dismal and sluggish during the Financial Year. There has also been
competition from Import of Yarn at cheaper rates, which resulted into under
utilization of capacities. On account of continuous losses incurred in the
past, the Company has laced acute financial shortage and had to operate with
negative working capital which has deteriorated the performance of the Company
to a level beyond rectification. The Company has been finding it difficult to
service the interest liability of the Banks and was forced to suspend the
manufacturing operations w.e.f. 19th May, 2007. The outlook has not been very
bright with the ever increasing input costs, having no reflection in sales
realisation. Therefore, it was thought expedient to permanently close down the
manufacturing operations;of the Company. Accordingly,after seeking approval
from the Govt. of Uttar Pradesh under U. P. Industrial Disputes Act, 1947 tine
manufacturing operations of the company have been permanently closed w.e.f. 8th
September, 2007 and accordingly the account have not been prepared on going
concern basis.
Notes :
|
Particulars |
30.09.2007 |
31.03.2006 |
|
Depreciation on Machinery Spares |
0.249 Millions |
0.166 Millions |
|
Cops Written off |
5.329 Millions |
2.581 Millions |
2. Amount kept with IFCI Limited in No-lien Deposit Account received
during the year.
3. The Company has sold its Chemicals Division alongwlth certain Other
Immovabl Properties and Investments in the Shares of its two Wholly-owned
Subsidiaries ("ICC Division") as a going concern w.e.f. 1st October,
2006 to Indofil Organic Industries Limited (IOIL) for a total Consideration of
Rs. 1246.600 Millions (arrived at by aggregating Tax Written Down Value in case
of Depreciable Assets and Net Book Values for Other Assets/Liabilities). Sale
Consideration has been discharged by IOIL by way of (a) Payment of Rs. 178.300
Millions by Cheques; (b) taking over the Liabilities of Fibres Division of
Rs.578.400 Millions due to the Financial Institutions and (c) Subscription to
1,17,57,086 Fully Paid up Equity Shares of Rs. 10 each of IOIL for Rs.489.900
Millions (Note 8 of Schedule 13).
4. Proceeds from/Payment of Long/Short Term Borrowings does not include
Renewal of Public Deposits due after One year.
5. Cash and Cash Equivalents exclude Fixed Deposits pledged with Banks
Rs.17.493 Millions Previous year (Rs.17.493 Millions).
6. In view of the Sale of the Chemicals Division, as stated in Note 3
above and Closure of the Manufacturing Operations of the Fibers Division w.e.f.
19th May, 2007 (Closure has become Operative from 8th September, 2007), the
above Cash Flow Statement fully represent Cash Flows of Discontinued Operations
since the Company was operating in two Segments only. ' .
7. (a)ln view of Notes 3 and 6 above and Current Year's Period of 18
Months, the figures are not comparable with the Previous year's figures of 12
Months Period
(c) Previous year's figures have been regrouped/recast wherever necessary.
"Since the Slump Sale of Chemicals Division as a going concern w.e.f. 1st October. 2006 has been shown as "Cash Flow from Investing Activities", the adjustments of Working Capital Changes and Cash Flows from Investing/Financial Activities include Adjustments/Cash Flows of the Chemicals Division for Six Months Period ended 30th September, 2006 .which have been arrived at by comparing Opening Assets and Liabilities as on 1st April, 2006 with Closing Balance as on 30th September,2006 of Division
Contingent
Liabilities and Notes
- (a) Claims against the company not acknowledged
as debts (excluding unascertainable amounts) in respect of:
|
Particulars |
As
on 30.09.2007 Rs.
In Millions |
|
Sales Tax/Excise/Customs Duty |
8.621 |
|
Electricity Dues |
0.000 |
|
Water Tax |
0.711 |
|
Income Tax |
16.545 |
|
Others |
36.857 |
|
The Following are the particulars of above Dues on account of Sales
Tax, Excise Duty, Customs duty, water tax, and income tax as at 30th
September 2007 that have been disputed by the company in Appeals pending
before the Appellate Authorized. |
|
Claims from two suppliers towards Interest on late payments amounting to
Rs.115.329 Millions upto 31st March, 2007 (Previous year Rs.93.521 Millions),
the amount not ascertained tor the period form 1st April, 2007 to 30th
September, 2007. The Management has taken up the matter for waiver of the above
amounts and is of the opinion that no provision In respect of above is called
for in view of the representations made by the Company.
(a) Pursuant to Slump Sale of Chemicals Division, as mentioned in Note 8
below and Closure of Manufacturing Operations of the Fibres Division's Plaint
with effect from 19th May, 2007, the figures for the Current year {18 Months
Period) ended 30th September, 2007 are not comparable with the Previous year's
figures of 12 Months Period.
Undertakings given to certain Financial Institutions and/or Banks :
(a) ln respect of Lords Chloro Alkali Limited and Spark Plugs Company
(India) Limited to procure funds jointly/severally with others to meet
(i) any shortfall in financing their Projects and/or for Working Capital
and
(ii) Cash Losses in case of Spark Plugs Company (India) Limited. The
funds made available/to be made available can only be withdrawn with the prior
approval of the said Institutions and shall not involve any charge or lien on
the Assets of the said Companies.
(b) Who have given Loans to Modi Carpets Limited and Lords Chloro Alkali
Limited that the Company shall not transfer, assign, pledge, hypothecate or
otherwise dispose off in any manner its Shareholding in the Capital of these
Companies without their prior consent in writing. However, in view of the Slump
Sale Agreement, 1,00,000 Equity Shares of Rs. 10 each of Modi Carpets Limited
were transferred to IOIL.
With the Intention of restructuring (he Operations, the Company vide
Agreement dated 28th October, 2006 has sold its Chemicals Division alongwith
certain other . Immovable Properties and Investments in the Shares of Quick
Investment (India) Limited and Good Investment (India) Limited, the two
Wholly-owned Subsidiaries of the Company ("ICC Division") as a .going
concern with effect from 1st October, 2006 to Indofil Organic Industries
Limited (IOIL) for a total consideration of Rs.1246.000 Millions (arrived at by
aggregating Tax Written Down Value in case of depreciable Assets and Net Book
Values for other Assets/Liabilities) pursuance to the Resolution passed at its
Board Meeting held on 28th October, 2006 and subsequent approval of its
Shareholders by Postal Ballots on 23rd December, 2006. Sale consideration has
been discharged by IOIL by way of : (a) Payment of Rs.178.300 Millions by
Cheques; (b) taking over the Liabilities of Fibres Division of Rs.578.400
Millions due to the Financial Institutions and (c) Subscription to 1,17,57,085
Fully Paid up Equity Shares of Rs.10 each of IOIL for Rs.489.900 Millions i.e.
at a Premium of Rs.372.000 Millions which were issued and distributed
directly to the Equity Shareholders of the Company. The Company legally advised
that the issue and distribution of above Shares to its Shareholders don't
tantamount to Payment of Dividend under the Companies Act, 1956. The
Shareholders of the Company has approved the abovetransaction of Sale of ICC
Division and Issue of Equity Shares of IOIL to themselves under sections 293 (1
)(a) and 293(3) respectively of the Companies Act, 1956. The Company has huge
accumulated Losses i.e. no distributable Profits. Keeping this in view, the
Company has also now sought approval under Section 391 of the Companies Act,
1956 of the Hon'ble Allahabad High Court for treating Rs.489.900 Millions as
"Goodwill" in the Books of Account for which the approval of the
Court is yet to be received. Pending final determination of the matter by
Hon'ble Allahabad High Court, the above amount of Rs.489.900 Millions has been
shown as "Eiquity Shares of IOIL issued to Shareholders" on the face
of the Balance Sheet under the head "Miscellaneous Expenditure (to the
extent not,written off or adjusted)". The accounts for the year have been
prepared without giving effect to the above state. Consequent adjustments in
the accounts i.e. the above amount of Rs.489.900 Millions wilt be charged to
Revenue as per Accounting Standard (AS) 26 i.e. Intangibl Assets on receipt of the final approval of
Hon'ble Allahabad High Court for treating/ accounting Rs.489.900 Millions as
Goodwill in the Books of account.
The Manufacturing Operations of the Fibres Division's Plant have been
closed with effect from 19th May, 2007 and the Company had applied on 7th June,
2007 to the Government of Uttar Pradesh for Closure Permission under Section
6-W of the Uttar Pradesh Industrial Disputes Act, 1947 which had been approved
by the Board of Directors of the Company in their Meeting held on 23rd June,
2007. In terms of the provisions of the Uttar Pradesh Industrial Disputes Act,
1947, the Closure has become operative from the date of expiration of tha
period of 90 days from the date of application i.e. on 8th September, 2007.
The Company has lodged Claim for Recovery of Rs.23.587 Millions being
un-utilised CENVAT Credit available. The Management is hopeful to recover the
same and shown as "CENVAT Receivable" in the Balance Sheet and
accordingly, no provision for Doubtful is considered necessary at this stage.
Discontinuing Operations : The Company was operating in two Segments
i.e. Chemicals and Synthetic Filament Yarns. As the Company vide Agreement
dated 28th October, 2006 has sold its Chemicals Division alongwith certain
Other Immovable Properties and Investments in the Equity Shares of two
Wholly-owned Subsidiaries ("ICC Division") as a going concern with
effect from 1st October, 2006.
Further, as stated in Note 13 above, the Company has closed the
Manufacturing Operations of the Synthetic Filament Yarns Plant with effect from
19th May, 2007 and the Closure has become operative from 8th September, 2007.
Since .the operations of both the above Segments are discontinued during
the current year, carrying amount of total Assets to be disposed off, total
Liabilities to be settled as on 30th September, 2007, Revenues and Expenses and
Cash Flows appearing in the Annual Accounts are of the discontinuing operations
and ' accordingly no separate disclosure is required to be furnished.
CONSOLIDATED
FINANCIAL STATEMENTS
a.
The company (Parent Company) had two wholly-owned Subsidiaries as on 1st
April 2006 i.e. Quick Investment (India) Limited and Good Investment (India)
Limited. Further, these wholly-owned Subsidiaries also held Investments in two
Associates i.e. Modern Home Care Products Limited and International Research
Park Laboratories Limited as on 1st April, 2006. Consolidated
Financial Statements of the Group i.e. above two Subsidiaries and two
Associates along with the Parent Company were presented till the previous year.
b.
During the current year the Company has sold its entire Investments in
Equity Shares of these two Subsidies w.e.f.1st October, 2006 on
account of Slump sale of ICC Division. Accordingly, these two Subsidiaries as
well as two Associates as stated in Para (a) Above are no longer Subsidiaries /
Associates of the Parent Company as at the year-end i.e. 30th
September 2007
c.
The Company had received without any Consideration 500000 Equity Shares
of Rs. 10 each of Indofil Organic Industries Limited (IOIL) on 28th
October, 2006 which resulted in IOIL becoming wholly-owned Subsidiary.
Subsequently Consequent upon allotment of further Equity Shares by IOIL to the
Shareholders of the Company on 28th March, 2007, IOIL ceased to be
the Subsidiary of the Company.
d.
The company acquired the entire Equity Share Capital of Sparko Credits
Private Limited (Name changed Modipon Estate Private Limited i.e. MEPL) on 9th
May 2007. The above Subsidiary is operating under severe long term restrictions
which significantly impair its ability to transfer funds to the Parent. In view
of changed circumstances i.e. Sale of Land and Residential Buildings to MEPL by
the Company during the year ended 30th September 2007 and reversal
of this Sale transaction ab initio, the Management is also now considering disposal of these Equity Shares during the
Accounting year ending on 31st December 2008
In view of the above facts and the changed
circumstances as stated above, as permitted by Accounting Standard (As-21) i.e
Consolidated Financial Statements, the Company is not required to prepare
Consolidated Financial Statements for the Year (18 Months Period) ended 30th
September 2007.
FIXED ASSETS:
- Land
(Freehold)
- Factory
Building
- Non-Factory
Buildings
- Plant and
Machinery
- Electric
Installations
- Furniture and
Fixture
- Livestock
- Vehicles
- Office and
Other Equipments
- Library
- Building
- Plant and
Machinery
- Furniture and
Fixture
- Softwares
The company is in trade terms with:
Ø
A B C Corporation
Ø
A I C Chemicals
Ø
Agarwal Containers
Ø
R K Corporation
Ø
Purab Printers
Ø
Asiatic Chemicals
Ø
Atcon Engg.
Ø
Namdev Silicates
Ø
Laxmi Sales
Ø
Nova Plast
Ø
Versatile Chem
Ø
S B Enterprises
CMT REPORT
(Corruption, Money Laundering and 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.42.63 |
|
UK Pound |
1 |
Rs.83.40 |
|
Euro |
1 |
Rs.65.80 |
SCORE and RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
3 |
|
--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 |
|
32 |
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 |
|