MIRA
INFORM REPORT
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Report Date : |
06.06.2008 |
IDENTIFICATION
DETAILS
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Name : |
MODERN DAIRIES LIMITED |
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Registered Office : |
SCO 98-99, Sub City Centre, Sector – 34, Chandigarh – 160022, Union
Territory |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
22.04.1992 |
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Com. Reg. No.: |
012208 |
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CIN No.: [Company
Identification No.] |
L15201CH1992PLC012208 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PTLM11163F |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business : |
Manufacturers of Pasteurised Milk, Skimmed Milk Powder, Full Cream
Milk Powder, Dairy Whitener, Table Butter, Pure Ghee, Cheddar and Mozzarella
Cheese etc. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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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 and reputed company meeting its normal
commitments timeously. Trade relations are fair. General financial position
is good. Business is active. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office/ Corporate Office : |
SCO 98-99, Sub City Centre, Sector – 34, Chandigarh – 160022, Union
Territory, India |
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Tel. No.: |
91-172-2609001/ 2/ 3 |
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Fax No.: |
91-172-2609000 |
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E-Mail : |
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Website : |
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Factory : |
136 KM G T Road, Karnal – 132001, Haryana, India |
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Tel. No.: |
91-1745-242901/ 2/ 3 |
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Fax No.: |
91-1745-242900 |
DIRECTORS
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Name : |
Mr. Krishan Kumar Goyal |
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Designation : |
Chairman Cum Managing Director |
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Date of Birth/Age : |
50 years |
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Qualification : |
B. Com and LLB |
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Experience : |
27 years |
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Date of Employment : |
22.04.1992 |
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Name : |
Mr. Amarjit Goyal |
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Designation : |
Director |
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Name : |
Mrs. Alka Goyal |
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Designation : |
Director |
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Name : |
Mr. B N Mathur |
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Designation : |
Director |
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Name : |
Mr. Ashok Kumar Grover |
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Designation : |
Director |
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Name : |
Mr. H S Oberoi |
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Designation : |
Director |
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Name : |
Mr. Satish Tandon |
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Designation : |
Director |
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Name : |
Mr.Pawan Kumar Bansal |
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Designation : |
Nominee Director |
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Name : |
Mr. Harvinder Singh Oberai |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Ms. Anubha Garg |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
(As on 30.06.2007)
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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 |
2373100 |
27.11 |
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Bodies Corporate |
2372459 |
27.1 |
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Public Shareholding |
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Institutions |
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Mutual Funds/ Axis |
6800 |
0.08 |
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Non-Institutions |
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Bodies Corporate |
435666 |
4.98 |
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Individuals |
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Individuals shareholders Holding Nominal Share Capital Up to Rs.0.100 Millions |
2571976 |
29.38 |
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Individuals shareholders Holding Nominal Share Capital in excess of
Rs.0.100 Millions |
844674 |
9.65 |
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NRIs |
148425 |
1.7 |
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Total |
8753100 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of Pasteurised Milk, Skimmed Milk Powder, Full Cream
Milk Powder, Dairy Whitener, Table Butter, Pure Ghee, Cheddar and Mozzarella
Cheese etc. |
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Products : |
· Milk Powders · Liquid Milk · Pure Ghee
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GENERAL
INFORMATION
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Customers : |
· Glaxo
SmithKline Consumer Healthcare · Nestle
India · Britannia
- New Zealand Milk · Mother
Dairies · Domino's
Pizza · Pizza
Hut · Britannia
Industries · Coca
Cola - India · Cadbury's
· Raptakos
Brett · Hindustan
Lever |
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Bankers : |
· Punjab National
Bank · Canara Bank · State Bank of
India |
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Facilities : |
Note: 1. Term Loan from Punjab National Bank, Canara Bank and State Bank of India are secured byway of equitable mortgage of Land and Building located at Village Shamgarh, Distt. Karnal (Haryana) of the Company and hypothecation of moveable assets forming part of the Fixed Assets and Capital Work in progress of the Company on pari-passu moveable assets forming part of the Fixed Assets and Capital Work in progress of the Company on pari-passu basis and also guranteed by Managing Director of the Company. 2. Working Capital borrowings from Banks is secured by hypothecation of stock of Raw Materials, Stock in Process, Finished Stock, other current assets & Book Debts on pari-pasu basis and also secured by first charge on fixed assets along with Term Loan on pari-pasu basis and guaranteed by Managing Director of the Company. 3. The Interest Free Loan from Director of Industries, Haryana is secured by way of Bank Guarantee and personal sureties provided by the company.
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
A Goel and Associates Chartered Accountant |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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30000000 |
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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8753100 |
Equity Shares |
Rs.10/- each |
Rs.87.531
Millions |
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Add : Forfeited Shares |
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Rs.0.390
Million |
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Total |
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Rs.87.921 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
87.921 |
87.921 |
87.900 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
134.045 |
105.565 |
40.200 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
221.966 |
193.486 |
128.100 |
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LOAN FUNDS |
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1] Secured Loans |
936.195 |
329.613 |
198.900 |
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2] Unsecured Loans |
191.862 |
25.125 |
12.800 |
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TOTAL BORROWING |
1128.057 |
354.738 |
211.700 |
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DEFERRED TAX LIABILITIES |
30.124 |
18.118 |
0.000 |
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TOTAL |
1380.147 |
566.342 |
339.800 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
882.247 |
150.385 |
142.600 |
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Capital work-in-progress |
132.445 |
368.146 |
1.200 |
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INVESTMENT |
2.816 |
34.590 |
100.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
269.130
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84.391 |
87.700 |
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Sundry Debtors |
232.112
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72.063 |
75.300 |
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Cash & Bank Balances |
32.808
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7.798 |
6.700 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
58.501
|
21.779 |
18.800 |
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Total
Current Assets |
592.551
|
186.031 |
188.500 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
225.884
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166.769 |
90.500 |
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Provisions |
4.028
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6.041 |
2.000 |
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Total
Current Liabilities |
229.912
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172.810 |
92.500 |
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Net Current Assets |
362.639
|
13.221 |
96.000 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1380.147 |
566.342 |
339.800 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
1713.762 |
917.256 |
909.300 |
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Other Income |
22.756 |
64.723 |
11.200 |
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Total Income |
1736.518 |
981.979 |
920.500 |
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Profit/(Loss) Before Tax |
41.605 |
72.403 |
7.300 |
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Provision for Taxation |
13.124 |
6.989 |
(4.600) |
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Profit/(Loss) After Tax |
28.481 |
65.414 |
11.900 |
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Export Value |
0.949 |
3.086 |
NA |
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Import Value |
143.911 |
50.173 |
NA |
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Expenditures : |
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Cost of Goods Sold |
0.000 |
0.000 |
708.600 |
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Manufacturing Expenses |
158.761 |
97.583 |
39.200 |
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Consumption of stores and spares parts |
1671.029 |
784.642 |
56.600 |
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Increase/(Decrease) in Finished Goods |
(175.132) |
4.420 |
20.900 |
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Salaries, Wages, Bonus, etc. |
0.000 |
0.000 |
34.700 |
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Managerial Remuneration |
0.000 |
0.000 |
8.700 |
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Interest and Financial Expenses |
21.267 |
10.152 |
12.000 |
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Power & Fuel |
0.000 |
0.000 |
19.900 |
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Depreciation & Amortization |
18.988 |
12.779 |
12.600 |
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Other Expenditure |
0.000 |
0.000 |
0.000 |
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Total Expenditure |
1694.913 |
909.576 |
913.200 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 1st
Quarter |
30.09.2007 2nd
Quarter |
31.12.2007 3rd
Quarter |
31.03.2008 4th
Quarter |
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Sales turnover |
746.900 |
1045.300 |
1091.600 |
1232.400 |
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Other income |
19.100 |
3.200 |
0.100 |
1.600 |
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Total income |
766.000 |
1048.500 |
1091.700 |
1234.000 |
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Total expenditure |
694.900 |
946.800 |
1044.700 |
1172.900 |
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Operating profit |
71.100 |
101.700 |
470.000 |
61.100 |
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Interest |
25.000 |
28.000 |
30.100 |
31.100 |
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Gross profit |
46.100 |
73.700 |
16.900 |
30.000 |
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Depreciation |
12.200 |
12.200 |
13.300 |
13.500 |
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Tax |
0.200 |
12.600 |
0.800 |
(12.200) |
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Reported PAT |
22.500 |
41.000 |
2.100 |
10.400 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
3.57 |
1.76 |
1.72 |
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Long Term Debt Equity Ratio |
2.68 |
1.29 |
1.20 |
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Current Ratio |
0.95 |
0.86 |
1.19 |
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TURNOVER RATIOS |
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Fixed Assets |
2.64 |
3.44 |
3.57 |
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Inventory |
7.92 |
10.66 |
9.84 |
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Debtors |
11.30 |
12.45 |
12.56 |
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Interest Cover Ratio |
2.72 |
2.70 |
0.83 |
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Operating Profit Margin (%) |
4.48 |
4.39 |
2.47 |
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Profit Before Interest and Tax Margin (%) |
3.37 |
3.00 |
1.09 |
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Cash Profit Margin (%) |
2.58 |
3.03 |
1.67 |
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Adjusted Net Profit Margin (%) |
1.48 |
1.64 |
0.29 |
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Return on Capital Employed (%) |
6.10 |
6.19 |
2.98 |
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Return on Net Worth (%) |
12.23 |
9.33 |
2.13 |
LOCAL AGENCY
FURTHER INFORMATION
PERFORMANCE
The Company implemented its Expansion Project and
successfully started commercial production of its 1st line of Casein Plant from
February 2007. The sales and other income was Rs.1736.500 Millions as against
Rs. 982.000 Millions in previous year. It has earned net profits before tax of
Rs.41.600 Millions as compared to Rs.72.700 Millions during the previous year
(previous year income comprises Rs 58.600 Millions as investment income).
Profit before tax from Operations was Rs. 35.300 Millions as compared to Rs.14.100
Millions during the previous year.
The operations of the Company have improved substantially in
this year because of higher capacity utilization of existing facilities and
further commissioning of the new product line.
BONUS
ISSUE
The Directors have recommended issue of one Bonus Share for
every one Equity Share held, subject to confirmation by the shareholders at the
forthcoming Annual General Meeting. Keeping in mind Company's investments in
Expansion Project, the directors have decided not to recommend any dividend.
PROJECT
The Company has undertaken a major Expansion Project at the
cost of Rs.910.000 Millions for the manufacture of edible grade casein, WPC and
edible grade lactose. These products were targeted for the Export Market.
The Directors have pleasure to inform you that the Company
has successfully commissioned its 1st Line of Production from February, 2007.
The 2nd Line is also undertrial and is expected to start commercial production
from August, 2007. The Company exports improved to Rs.182.200 Millions the year
as compared to Rs.77.300 Millions during the last year. The new products of
your Company have been well accepted by the international buyers in USA,
Europe, Middle East and China.
To strengthen the operations of the Company, it has further
undertaken the investments to manufacture Pharma grade lactose, Cogeneration of
power and Milk procurement infrastructure etc. The earlier project cost of
Rs.910.000 Millions has been enhanced to Rs. 1550.000 Millions.
CURRENT
OPERATIONS
The Company achieved a turnover of Rs.748.800 Millions as
compared to Rs.217.200 Millions in the same period, previous year. The Company
earned a profit before tax of Rs. 33.900 Millions as compared to Rs.0.700
Millions in the same quarter, previous year. The improvement in the working
during the current quarter is due to better margins available to the Company
from its new products. This quarter being a Lean period, the Company is hopeful
to perform better during the current year.
ACCREDIATIONS
ISO 9001, IS014001 and HACCP Certifications. The Company's
manufacturing facilities continue to maintain the prestigious ISO 9001,
IS014001 and HACCP Certification by DNV Netherlands, a leading International
Certification Company. It is an indicator of the Company's commitment for
quality, food safety and maintaining environment standards. To take care of the
international customer requirements the Company has taken KOSHER Certification
from the ORTHODOX Union, USA, for its products such as edible Acid Casein, WPC
and Lactose.
MANAGEMENT
DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE & DEVELOPMENTS
The dairy industry in India is growing at a rapid pace. With
India maintaining its status as largest producer of milk in the World with
annual growth rate of 3-4%, the dairy industry in India is poised for major
development. It is expected that 15-20% of the total milk produced in the
country is processed by organized sector.
Looking at the bright prospects, more and more corporate are
entering in this field, which will give a further boost to this sector.
Due to the growing demand of nutritional products from milk
in the world market, the Company has diversified in the production of value
added products like edible grade casein, WPC, edible grade lactose etc. To take
care of growing demand, the Company has taken firm steps to go for production
of pharma grade lactose.
OPPORTUNITIES
AND THREATS
The world dairy market is also under tremendous change. On
one side, the demand has gone up due to economic growth and on the other side
subsidies available to the developed nations are phased out resulting into
lower production of milk in those countries. With this background, Indian milk
industry has tremendous edge by way of export to world market.
The Indian industry is still facing trade barriers like
restriction on export of edible grade milk products to certain markets of the
developed markets (the whole of EU and Mexico etc.).
The international casein market is going strong. Globally there
is a shortage of milk solids and milk is diversified away from Casein
manufacturing towards the manufacture of other dairy products. The situation
may change when milk production will increase in the milk major countries like
Australia, New Zealand etc.
FINANCIAL
PERFORMANCE AND RESULTS OF OPERATIONS
The Company achieved a turnover of Rs.1713.8 Millions as
against Rs. 917.3 Millions in the previous year. It has earned net profits
before tax of Rs. 41.6 Millions as compared to Rs.72.7 Millions during the
previous year. The Company exported products worth Rs 182.2 Millions during the
year under review as compared to Rs.77.3 Millions during the last year.
Gratuity
The retirement benefits in the form of Gratuity Scheme has
been provided for the year ended as on 31s1 March 2007
Business
Segment
The company is engaged in the business of Milk products
which in context of Accounting Standards 17- "Segment Report" issued
by the institute of Chartered Accountants of India is considered the only
business segment. So separate segment reporting is not necessary.
Contingent
Liabilities
(31.03.2007 Rs. In Millions)
|
Bank Guarantee |
11.700 |
|
Custom Duty under EPCG
availed |
253.218 |
|
Milk Cess |
20.250 |
|
Capital Commitment |
1.499 |
Fixed Assets:
· Land Building
· Plant and Machinery
· Furniture and Fixture
· Office Equipment
· Vehicles
Website details:
Profile:
Subject is a part of the Modern Business Group, headquarted
in Chandigarh, established in 1973. Prestigious ISO: 9001-2000, HACCP (Food Safety),
and ISO:14001- 2004, (Environment Management) certification to its credit. The
company manufactures a wide range of milk and milk products.
Strategic
Location
Strategically located at the centre of milk rich belt in
Karnal, on the National Highway No.1, just 136 Kms. from North Delhi. Abundant
milk supply ensures a healthy regular working for the company.
Group of Companies:
Modern
Steels Limited
The flagship company of the group, is a fully equipped
Special & Alloy Steel manufacturing plant with a proven track record of
over three decades.
Modern
Automotives
Modern Automotives is setting up a world class manufacturing
facility for supply of automotive components. Headquartered in
Chandigarh,India.
PHI
Business
Offers End to End Technology, BPO services to Fortune 1000
& Inc and caters to a 2000 strong base of domestic and international
customers.
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 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.42.86 |
|
UK Pound |
1 |
Rs.83.58 |
|
Euro |
1 |
Rs.66.17 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
67 |
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 |
|