MIRA
INFORM REPORT
|
Report Date : |
21.06.2008 |
IDENTIFICATION
DETAILS
|
Name : |
COSMO FILMS
LIMITED |
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Registered Office : |
30, Community
Centre, Saket, New Delhi – 110 017 |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
07.10.1976 |
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Com. Reg. No.: |
11-8355 |
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CIN No.: [Company
Identification No.] |
U92114DL1976PLC008355 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
NSKC01059C |
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Legal Form : |
Public Limited
Liability Company. Company's Shares are Listed on the Stocks Exchange |
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Line of Business : |
Manufacturer of
Plastic Films, Packing & Packaging, Printing Industry Services and BOPP
Film. |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
|
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 an
established company engaged in the business of manufacturing and marketing
Biaxiall Oriented Polypropylene Film and Synthetic Paper. The company’s expansion
projects have been completed as per schedule and within the budgeted cost.
Trade relations are reported as fair. Payments are usually correct and as per
commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered Office : |
30, Community
Centre, Saket, New Delhi – 110 017, India |
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Tel. No.: |
91-11-2686 3968 /
2686 3969 / 2668105 |
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Fax No.: |
91-11-2686 2969 /
2685 3166 / 26868093 |
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E-Mail : |
ashok@dl.cosmo.sprintsmx.ems.vsnl.net.in |
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Website : |
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Corporate
Office : |
30, Community
Centre, Saket, New Delhi – 110 017, India |
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Tel. No.: |
91-11-2686 3968 /
2686 3969 |
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Fax No.: |
91-11-2686 2969 /
2685 3166 |
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E-Mail : |
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Plants : |
J-4, MIDC
Industrial Area, Chikalthana, Aurangabad – 431 210, Maharashtra Tel. No. :
91-240-2485080 Fax No. :
91-240-2485581 E-mail :- cflchk@cosmofilms.com B-14/9, MIDC
Industrial Area, Waluj, Aurangabad – 431 136, Maharashtra Tel. No. :
91-240-2554612 / 13 Fax No. :
91-240-2554416 E-mail :- gopi@cosmofilms.com Vermardi Road,
Village Navi Hithardi, near Inox, Off. N.H. Road, Taluka-Karjan,
Vadodara-391240 Tel No :-
91-2666-232960/231635 Fax No :-
91-2666-232961 E-mail :- gks@cosmofilms.com Plot No. 359-B,
Baska Village, Taluka-Halol, Panchmahals, Gujarat, India Tel No :-
91-2676-247021/247128 Fax No :-
91-2676-247041 Cosmo
International (US) Inc. 24, Middleneck Road, Suite # 2H, Roslyn, New York, 11576
USA Phone : +516-869-8629 Fax : +516-869-0303 Cell : +917-834-211 Mr. Bittu Wallia E-mail : cosmofilmsusa@hotmail.com |
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Branches : |
30, Community
Centre, Saket, New Delhi – 110 017, India Tel. No. 91-11-2686 3968 / 2686 3969 Fax No. 91-11-2686 2969 Contact Person
: Mr. B. Suresh Flat No. 7, 3rd
Floor, 148,North Usman Road, T. Nagar, Chennai- 600017, Tamilnadu, India Tel No :-
91-44-28143998 / 28143636 Fax No :-
91-44-17141247 E-mails:- kcp@cosmofilms.com 1405/B, 14th
Floor, Babu Khan Estate, Basheer Bagh, Hyderabad – 550001, Andhra Pradesh,
India Tel. No. 91-40-2359 7620 / Fax No. 91-40-2323 2387 Contact Person
: Mr. P. K. Gupta 303, 3rd
Floor, Gokul Arcade A, Subhash Road, Vile Parle (East), Mumbai, Maharashtra,
India Tel. No.
91-22-2826 1195 Fax No.
91-22-2826 1201 Contact Person
: Mr. P. K. Gupta |
DIRECTORS
|
Name : |
Mr. Ashok
Jaipuria |
|
Designation : |
Chairman and Managing
Director |
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Date of
Birth/Age : |
52 years |
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Qualification
: |
Degree in
Associates of Arts in Business Administration & Diploma in Marketing
Science |
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Experience : |
34 years |
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Date of
Appointment : |
02.04.1980 |
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Name : |
Mr. B V Bhargava |
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Designation : |
Director |
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Qualification
: |
M Com, LLB |
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Other
Directorship : |
Former Managing
Director of ICICI Limited |
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Name : |
Mr. H K Agarwal |
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Designation : |
Director |
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Qualification
: |
B E and MBA (IIM),
Management Consultant |
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Name : |
Mr. Mahendra
Sanghvi |
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Designation : |
Director |
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Qualification
: |
Ph.D. in
Mechanical Engineering, A Polymer
Scientist, |
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Other
Directorship : |
Promoter and Managing
Director of Sona Koyo Steering System Limited, Baroda |
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Name : |
Dr. Surinder
Kapur |
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Designation : |
Director |
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Qualification
: |
Ph.D. in
Mechanical Engineering |
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Other
Directorship : |
Managing Director
of Sona Koyo Steering Systems |
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Name : |
Mr. Rajeev Gupta |
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Designation : |
Director |
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Qualification
: |
B E and MBA |
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Other
Directorship : |
Joint Managing
Director of DSP Merrill Lynch Limited Managing Director
– Carlyle India Advisors Private Limited |
KEY EXECUTIVES
|
Name : |
Mr. S K Mittal |
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Designation : |
Executive
Director, Chartered Accountant and Chief Executive Officer |
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Date of
Birth/Age : |
53 years |
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Qualification
: |
B. Com, ACA |
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Experience : |
29 years |
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Date of
Appointment : |
15.03.1996 |
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Other
Directorship : |
General Manager
of Samtel Color Limited |
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Name : |
Ms. Vimal
Bhandari |
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Designation : |
Director |
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Qualification
: |
Chartered
Accountant |
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Other
Directorship : |
Country Manager –
India, AEGON International N. V. |
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Name : |
Mr. Hasmukh Shah |
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Designation : |
Industry
Management (Polymer) |
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Name : |
Mr. R Mukherjee |
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Designation : |
President |
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Date of
Birth/Age : |
56 years |
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Qualification
: |
Mechanical
Engineering |
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Experience : |
31 years |
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Date of
Appointment : |
01.11.1997 |
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Other
Directorship : |
Senior General
Manager of Philips India |
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Name : |
Mr. A G Deshpande
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Designation : |
Vice President –
Operations |
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Name : |
Mr. Janardhan
Gupta |
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Designation : |
General Manager –
Commercial |
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Name : |
Mr. S D Gosavi |
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Designation : |
Dy. General
Manager – Manufacturing |
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Name : |
Mr. S C Maity |
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Designation : |
Dy. General Manager
– Manufacturing |
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Name : |
Mr. Mr. Sanjay
Chincholikar |
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Designation : |
General Manager –
Projects and Domestic Marketing |
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Name : |
Mr. P C Garg |
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Designation : |
Dy. General
Manager – Commercial |
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Name : |
Mr. H L Paranjpe |
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Designation : |
Director |
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Qualification
: |
M. Sc. (Chemical
Engineering), University of Birmingham, UK Polymer Technologist |
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Name : |
Mr. Badri Agarwal
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Designation : |
Director |
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Qualification
: |
C A, Corporate Director
– Bharti Enterprises Limited |
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Name : |
Mr. Avinash
Kulkarni |
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Designation : |
General Manager –
Manufacturing |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters |
8485717 |
43.65 |
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Institutional
Investors |
3237791 |
16.65 |
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Private Corporate
Bodies |
1197104 |
6.16 |
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Others |
9519464 |
33.54 |
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Total |
19440076 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of
Plastic Films, Packing & Packaging, Printing Industry Services and BOPP
Film. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Biaxially
Oriented Polypropylene (BOPP) Film & Synthetic paper |
MT |
80000 |
77000 |
63278 |
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Thermal
Lamination Machines |
Qty.(Units) |
100 |
NA |
NA |
GENERAL
INFORMATION
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No. of Employees : |
Around 250 |
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Bankers : |
v
Union Bank
of India, 26 / 28-D, Connaught Place, Delhi - 110 001 v
Canara Bank,
6, Bhagwandas Road, Delhi - 110 001 v
State Bank of
India, 11, Parliament Street, Delhi - 110 001, Indian v
International
Financial Corporation, Washinton v
Rabo Bank v
ING Vysya
Bank Limited v
HDFC Bank
Limited v
Bank of
Maharashtra v
Export
Import Bank of India v
Bank of
Bahrain and Kuwait v
Industrial
Development Bank of India v
ICICI Bank v
Cooperative
Centrale Raiffeisen – Boerenleenbank B. A. v
Landesbank
Baden – Wurttemberg |
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Facilities : |
Notes: (a) Secured
interse on pari-passu basis by way of mortgage of immovable properties both
present and future and hypothecation of all movable properties except those on
which charge has been created in favour of company's bankers for working
capital requirements. The loans are additionally secured by personal
guarantee of managing director. (b) Secured by
first pari-passu charge by way of mortgage of immovable assets and
hypothecation of all movable assets both presentand future and second pari
passu charge on receivables and inventories charged for short term debts
incurred in ordinary course of business. (c) Secured by
first pari-passu charge over the entire fixed assets of the company. (d) Secured by
hypothecation of stocks and book debts on pari-passu basis. (e) Secured by
hypothecation of raw materials, work-in-progress, stores and spares, finished
goods, book debts and second charge on fixed assets secured to financial
institutions. (f) Secured
against pledge of the fixed deposits of the company. (g) Secured against hypothecation of Vehicle financed out of the loan amount.
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
B.K. Shroff &
Company Chartered Accountants Mr. S. K. Mittal Chartered
Accountant, Executive Director and (Chief Executive Officer) Ma. Vimal
Bhandari Chartered
Accountant Mr. Badri Agarwal Chartered
Accountant |
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Memberships : |
Confederation of
Indian Industry |
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Collaborators : |
Nil |
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Associates/Subsidiaries : |
Ř
Cosmo
Plantgene Limited Hybrid Seeds Ř
Cosmo
Ferrites Limited Soft Ferrites Ř
Gujarat
Propack Limited Subsidiaries Ř
Cosmo
International Limited Ř
Cosmo
International Inc, US |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
25000000 |
Equity Shares |
Rs. 10/- each |
Rs. 250.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
19440076 |
Equity Shares |
Rs. 10/- each |
Rs. 194.401 millions |
Of the Above
a) 242051 shares have been allotted to
erstwhile shareholders of Gujarat Propack Limited on amalgamation.
b) 8486705 shares have been allotted as fully paid
bonus shares by capitalization of capital reserve and share premium account.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
SHAREHOLDERS
FUNDS |
|
|
|
|
1] Share Capital |
194.401 |
194.401 |
194.401 |
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2] Reserves &
Surplus |
1288.460 |
1128.905 |
1089.615 |
NETWORTH
|
1482.861 |
1323.306 |
1284.016 |
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
1696.689 |
1705.317 |
1820.365 |
|
2] Unsecured
Loans |
32.554 |
79.711 |
117.434 |
TOTAL
BORROWING
|
1729.243 |
1785.028 |
1937.799 |
|
DEFERRED TAX
LIABILITIES |
334.402 |
346.355 |
372.703 |
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|
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TOTAL
|
3546.506 |
3454.689 |
3594.518 |
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APPLICATION OF
FUNDS |
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FIXED ASSETS [Net
Block] |
2019.452 |
2025.802 |
2167.499 |
|
Capital
work-in-progress |
75.074 |
84.064 |
26.120 |
|
|
|
|
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INVESTMENTS |
55.545 |
67.684 |
469.414 |
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CURRENT ASSETS,
LOANS & ADVANCES |
|
|
|
|
Inventories |
559.568 |
743.610 |
576.381 |
|
Sundry Debtors |
833.503 |
760.460 |
583.736 |
|
Cash & Bank
Balances |
185.268 |
48.084 |
25.795 |
|
Loans &
Advances |
332.455 |
244.065 |
167.691 |
|
Total Current Assets |
1910.794 |
1796.219 |
1353.603 |
Less: CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
Current
Liabilities |
368.525 |
377.237 |
336.001 |
Provisions
|
146.466 |
143.316 |
88.432 |
Total Current Liabilities
|
514.991 |
520.553 |
424.433 |
|
Net
Current Assets |
1395.803 |
1275.666 |
929.170 |
|
|
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|
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|
MISCELLANEOUS
EXPENSES |
0.632 |
1.473 |
2.315 |
|
|
|
|
|
TOTAL
|
3546.506 |
3454.689 |
3594.518 |
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
|
|
|
|
|
|
Sales Turnover |
5356.058 |
4241.084 |
4001.830 |
|
|
Other Income |
42.681 |
38.597 |
0.000 |
|
|
Total Income |
5398.739 |
4279.681 |
4001.830 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
305.022 |
167.090 |
88.183 |
|
|
Provision for Taxation |
56.801 |
38.483 |
17.634 |
|
|
Profit/(Loss) After Tax |
248.221 |
128.607 |
105.817 |
|
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|
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Earnings in Foreign Currency : |
|
|
|
|
|
|
FOB Value |
2774.348 |
1706.348 |
1394.157 |
|
Total Earnings |
2774.348 |
1706.348 |
1394.157 |
|
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|
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Imports : |
|
|
|
|
|
|
Raw Materials |
768.521 |
535.681 |
526.314 |
|
|
Stores & Spares |
17.420 |
13.532 |
0.000 |
|
|
Capital Goods |
136.579 |
108.061 |
0.000 |
|
|
Others |
0.000 |
0.000 |
0.000 |
|
Total Imports |
922.520 |
657.274 |
526.314 |
|
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|
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|
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|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
4581.265 |
|
|
|
|
Purchases made for re-sale |
2.402 |
6.635 |
|
|
|
Increase/(Decrease) in Finished Goods |
99.599 |
[138.227] |
3913.338 |
|
|
Interest |
151.685 |
114.796 |
|
|
|
Depreciation & Amortization |
258.766 |
303.551 |
|
|
Total Expenditure |
5093.717 |
4112.591 |
3913.338 |
|
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 |
1393.100 |
1547.500 |
1474.400 |
1436.600 |
|
Other Income |
4.900 |
12.100 |
9.000 |
88.200 |
|
Total Income |
1398.000 |
1559.600 |
1483.400 |
1524.800 |
|
Total Expenditure |
1191.200 |
1320.700 |
1245.800 |
1218.100 |
|
Operating Profit |
206.800 |
238.900 |
237.600 |
306.700 |
|
Interest |
31.100 |
34.000 |
33.300 |
29.900 |
|
Gross Profit |
175.700 |
204.900 |
204.300 |
276.800 |
|
Depreciation |
58.200 |
59.700 |
58.900 |
76.300 |
|
Tax |
30.500 |
57.400 |
29.400 |
60.300 |
|
Reported PAT |
90.900 |
90.600 |
116.000 |
147.500 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
1.25 |
1.43 |
1.70 |
|
Long Term Debt-Equity Ratio |
0.76 |
0.94 |
1.30 |
|
Current Ratio |
1.19 |
1.08 |
0.98 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.35 |
1.13 |
1.10 |
|
Inventory |
8.77 |
6.97 |
8.81 |
|
Debtors |
7.17 |
6.84 |
8.29 |
|
Interest Cover Ratio |
2.75 |
2.27 |
1.84 |
|
Operating Profit Margin(%) |
12.92 |
13.11 |
13.60 |
|
Profit Before Interest And Tax Margin(%) |
8.39 |
6.50 |
4.96 |
|
Cash Profit Margin(%) |
8.88 |
9.40 |
11.30 |
|
Adjusted Net Profit Margin(%) |
4.35 |
2.80 |
2.66 |
|
Return On Capital Employed(%) |
15.17 |
9.45 |
6.52 |
|
Return On Net Worth(%) |
17.69 |
9.86 |
9.45 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was
incorporated on 7th October, 1976 at New Delhi having Company
Registration Number 8355.
The company is a part
of well diversified group with interest in plastics, chemicals and agro
industries. Mr. Ashok Jaipuria promoted
this group. Within a decade, he
promoted three companies.
The company was
promoted by Mr. Ashok Jaipuria (son of the late Mr. Sitaram Jaipuria, former
CMD of Swadeshi Polytex) is the pioneer in the manufacture of
biaxially-oriented polypropylene (BOPP) film which is widely used in the
consumer product industry for packaging. The company went public four years
after its incorporation in 1976.
The company, the
first ISO 9002 certified BOPP manufacturing company operates two plants at
Chikalthana and Waluj, both in Aurangabad district of Maharashtra with a
combined production capacity of 23100 MTPA of BOPP and Synthetic paper. The
company has taken up another expansion project of 10000 MTPA at the existing
location at Waluj. The company started exporting its products from 1994.
The company is
continuously scaling up its capacity in line with the demand and it has set up
a second plant (with an installed capacity of 2000 tpa) for manufacture of BOPP
film at the Waluj Industrial area in the Aurangabad district. Later the
combined installed capacity was increased to 10800 MTPA through an expansion
plan. In 1996-97 the company has undertaken a debottlenecking programme
(revamping of line III) thus increasing the installed capacity to 13200 MTPA.
And again in 1997-98 the installed capacity was increased to 14100 MT.
The company is in
the process of acquiring land at Nashik, Maharashtra for setting up a new unit
with an installed capacity of 17000 MTPA of BOPP film. The company has plans to
manufacture electrical-grade BOPP film in collaboration with General Electric,
USA. The company has won the Best BOPP Exporter Award from PLEXCONCIL for the
year 1998-99
The company
acquired 76.51% stake in Gujarat Propack (GPP) at a price of Rs. 29.25 per
share. The deal translates into an Enterprise Valuation of around Rs. 870
millions. In line with the take over the company shall make an open offer to
acquire a further 20% shareholding from public at the acquisition price of Rs.
29.25 per share.
Gujarat Propack was
established in 1986 and is the second largest player in the Indian BOPP films
industry with over 27% market share. GPP has an excellent track in developing
specialized products for high-end packaging applications and has an impressive
customer profile which includes Hindustan Lever, Nestle India, ITC, Britania
and Godfrey Phillips India among others. GPP has total of three manufacturing
lines and two plants located at Baroda with a capacity of 13000 MTPA.
During the year
2002, Gurarat Propack Limited merged with the company in the ratio of 2:1
equity shares held.
The company had
issued Bonus Shares in the Ratio of 1:1 to its shareholders and the allotment
was completed in 28.03.2003. The company has increased BOPP’s installed
capacity by 25500 MT and consequently the total capacity has now stood at 48600
MT.
INDUSTRY ANALYSIS
Cosmo Films is in the
business of manufacture and sales of BOPP films. World OPP films market has
been growing steadily in past several years. Growth in Asian region has been
the highest.
Indian domestic
BOPP market has been growing @ 12 to 15% per annum. Since per capita BOPP
consumption in India is much lower as compared to Western and other Asian
countries, potential for demand growth is quite high. In view of growth
potential, Cosmo as well as other BOPP manufacturers have expanded capacities.
Since the present
size of domestic market is quite small they have been focusing more to expand
their business in export market.
They have already
achieved full capacity utilization of their latest production line commissioned
in March 2004. They are continuously working with various FMCG and other end
user companies for development of new applications of BOPP to expand the market
size. Cosmo is one of the lowest cost BOPP producers in the world and can
expand its customer base by providing cost effective innovative packaging solutions
to its customers.
OPERATIONS
Worldwide over capacity in the industry continued to affect operating
margins. Due to internal cost cutting measures, increase in export sales,
significant improvement in quality and operational efficiencies, net profit
after tax has increased to Rs. 248.200 Millions during the year as compared to
net profit of Rs. 128.600 Millions in the previous year.
EXPORTS
Efforts towards exports have been further accelerated. Exports have grown
to a level of Rs. 2774.300 Millions during the year as compared to Rs. 1706.300
Millions during the previous year. Cosmo maintains its position of largest BOPP
film exporter from India.
R and D:
Continuous Efforts on R & D and Application Development activities
are being made to expand the domestic and export markets.
OUTLOOK / EXPANSION PROJECTS
- Extrusion Coating Line No.- V has been shipped and will be commissioned
in quarter ending June, 2007.
-
In view of encouraging response of thermal lamination film export, further
capacity expansion is being evaluated.
Cosmo Ferrites Limited is an associate of the company. The company's
investment in the associate is of Rs. 55.485 Millions (previous year Rs. 55.485
Millions).
Cosmo International (US) Inc., is a wholly owned subsidiary of the
Company. The company has an investment of Rs. 0.145 Millions (previous year Rs.
0.145 Millions) in the shares of the subsidiary. The company has also advanced
a sum of Rs. 0.325 Millions (previousyear Rs.nil Millions) for discharging its
liabilities. A sum of Rs. 0.273 Millions(previous year Rs. nil Millions) is
outstanding at the year end. The outstanding balances have been provided during
the year. No investments have been made by the subsidiary in the shares of the
company.
What they achieved
in 2006-2007
-
Net sales increased to Rs. 5356.100 Millions (Previous year Rs. 4241.100
Millions.)
-
Expanded their customer base and product range in world markets.
-
Expanded Thermal film capacity from 6500 MT to 12500 MlT
-
Achieved Export turnover of Rs2774.300 Millions, a growth of 63% over
previous year.
-
Gas Based capotive power Plant Commissioned at their Karjan (Vadodara)
unit.
An Interview with
CEO – S. H. Mittal
- Profit after
tax has increased to a level of Rs. 248.200 Millions as against Rs.
128.600 Millions in previous year? What are the major reasons?
Substantial improvement in product mix and
export base as well as continuous emphasis on cost reduction has resulted in
increased profit.
- Are there any
major implications of union budget 2007?
Custom duty on finished BOPP products has
been reduced 2.5%. Besides Central Sales tax has been reduced by 1%. Both these
reductions will have positive impact on demand growth.
- What is the
future outlook of exports?
Despite over capacity in the industry, their
exports have grown to Rs. 2774.300 Millions during this inancial year as
compared to Rs. 1706.300 Millions during the previous year 63% increase.
Presently we are exporting to every continent of the world. Besides, they have
also stepped up their exports of specialty products.
- What is the
status of Thermal Lamination film?
They have widened their product range of
Thermal Lamination film. Their present product range in this segment and
quality is comparable with leading global manufacturers. With encouraging
response, they have expanded their extrusion coating film capacity from 6500
Tons to 12500 Tons.
- What are the
expansion plans for the year07-2008?'
Having achieved full capacity utilization on
all 4 Lines of extrusion coating films, they are setting up one more extrusion
coating line by April 2007. Further enhancement of capacity is under
evaluation.
COMPETITION
BOPP industry is capital intensive industry. In a free market environment,
new capacities are created depending upon demand supply situation and return on
investment. Industry is cyclical in nature and at times there is over supply
situation leading to decline in operating margins. Risk Mitigation Company has
one of the largest product range in BOPP films through continuous investment in
R & D activity. They have also diversified their markets in various parts
of the world. Diversified product ranges as well as markets give us a
competitive edge to deal with downward business cycles in a better manner.
Cosmo continues to be the leader in Indian BOPP industry after its
existence of over two decades.
GLOBALISATION RISK
With WTO as well as various regional free trade agreements, Indian
markets are vulnerable to cheap imports.
Risk Mitigation
In fact Cosmo is one of the
beneficiaries of economic liberalization and has been able to increase its
exports substantially in past eight years. By building exports at reasonable
margins, they have countered any possible threats of imports in India. Present
level of BOPP imports in India is less than 5% of the total BOPP consumption.
Under WTO anti dumping duty provisions are also available for protecting Indian
industry from dumping of cheaper goods in India. This instrument has been
effectively used in past to avoid such imports. With continuous cost reduction
as well as emphasis on new product development, they are internationally
competitive and have created sustainable competitive advantage.
GEOGRAPHICAL RISK
- MARKETS & MANUFACTURING
LOCATION
Risfc Mitigation
Company has manufacturing units at Aurangabad (Maharashtra) and Vadodra
(Gujarat). As far as markets are concerned, we are focused on both
international and domestic markets. This also helps to hedge risks by being in
various regions of the world.
(A) INDUSTRY ANALYSIS
Industry structure
and developments
Cosmo Films is in the business of manufacture and sales of BOPP films.
World OPP films market has been growing steadily in past several years. Growth
in Asian region has been the highest.
Indian domestic BOPP market has been growing @ 15 to 20% per annum.
Since per capita BOPP consumption in India is much lower as compared to Western
and other Asian countries, potential for demand growth is quite high. In view
of growth potential, Cosmo as well as other BOPP manufacturers have expanded
capacities. Their capacity growth in last 7 years has been as under:
They are continuously working with various FMCG and other end user
companies for development of new applications of BOPP to expand the market
size. Cosmo is one of the lowest cost BOPP producers in the world and can
expand its customer base by providing cost effective innovative packaging
solutions to its customers
.
(B) OPERATIONS & FINANCIAL PERFORMANCE
Preparation of
Accounts
The Financial Statements have been prepared in compliance with the
requirements of provisions of Companies Act, 1956 and the Generally Accepted
Accounting Principles (GAAP) of India.
Sales
Net sales during the financial year were Rs. 5356.100 Millions.
(Previous year Rs. 4241.100 Millions.)
Exports have grown from Rs. 1706.300 Millions to Rs. 2774.300 Millions,
a growth of 63%. This growth has been achieved despite over capacity in
international markets.
Raw Material
Major Raw materials used for production are Hornopolymer, Copolymer, EVA
and certain additives. The ratio of Raw materialscost to net sales was 59.9 %
in 2006-07. (Previous Year 63.6%)
The Company is stheircing its raw material requirements fromoverseas as
well as domestic suppliers.
Research &
Developments
There is a continuous thrust on the research & development activity.
As a policy, the Company charges off revenue expenditure on Research &
Development in the Profit and Loss account of the year in which it is incurred.
Rs. 27.100 Millions (approx) have been spent on R & D during the last year.
Provision for Tax
During the year Company has made a provision of Rs. 64.900 Millions
(previous year Rs59.200 Millions) towards income tax. Further, an amount of
Rs3.900 Millions has been provided as Fringe Benefit Tax. Besides, Rs. 12.000
Millions has been written back from deferred taxliability.
Profit after Tax
(PAT)
Company has earned PAT of Rs. 248.200 Millions during FY 2006-07 as
against Rs. 128.600 Millions in previous year. The company is continuing its
efforts on cost reduction, improvement in product mix and market
diversification.
Reserves &
Surplus
The reserves & surplus of the Company were Rs. 1377.100 Millions (before
deducting dividend for this year) as on 31st March, 2007 (Previous years
Rs.1128.900 Millions)
FINANCIAL
PERFORMANCE RATIOS
|
Particulars |
2007 |
2006 |
2005 |
|
Export Sales/Net sales |
52% |
40% |
36% |
|
Cost of goods sold/Net sales |
80% |
80% |
80% |
|
Gross Profit Ratio |
20% |
20% |
20% |
|
Employee Costs /Net sales |
4% |
4% |
4% |
|
Selling and Administration exp./Net sales |
4% |
4% |
4% |
|
Cash Operating Profit (PBIDT)/Net sales |
14% |
14% |
14% |
|
Interest Cost/Net sales |
3% |
3% |
2% |
|
Operating Profit/Net sales |
11% |
11% |
12% |
|
Depreciation/Net sales |
5% |
7% |
9% |
|
Tax/Net sales |
1.06% |
0.91% |
[0.45]% |
|
PAT/Net sales |
5% |
3% |
3% |
BALANCE SHEET RATIOS
|
Particulars |
2007 |
2006 |
2005 |
|
Return on capital employed (ROCE) |
12% |
7% |
6% |
|
Total Debt/Equity Ratio |
1.10% |
1.35% |
1.51% |
|
Long Term Debt/Equity Ratio |
0.73% |
0.91% |
0.98% |
|
Current Ratio |
1.64% |
1.50% |
1.26% |
|
Asset Coverage Ratio |
1.94% |
1.74% |
1.74% |
|
Interest Coverage Ratio |
3.01% |
2.46% |
1.90% |
|
Return on Net Worth (RONW |
17% |
10% |
8% |
|
Fixed Assets Turnover |
2.56% |
2.01% |
1.78% |
|
Working Capital Turnover |
3.84% |
3.31% |
4.21% |
Fixed Assets:
Ř
Freehold Land
Ř
Leasehold Land
Ř
Land and
building
Ř
Building
Ř
Plant and
Machinery
Ř
Furniture,
Fixture and Fittings
Ř
Factory and
Office
Ř
Equipments
Ř
Vehicles
As Per Web Details
Profile
Cosmo Films was
started in 1980 to manufacture Bi-axially Oriented Polypropylene Films (BOPP)
for the first time in India. Since inception they have maintained market
leadership in the Indian market and also Continues to be largest BOPP film
exporter from the Country.
Their current
capacity is 68000 MT per annum. Including 8000 MT of Thermal lamination
film.
Apart from ISO
9000, they have also got accredited with American Institute of Baking (AIB) and
British Retail Consortium (BRC) Certification for Safety and Hygiene of Food
related products.
At their Waluj
campus, they have their own Captive Power Plant of 8 MW capacity which ensures
good quality uninterrupted power supply for their production at an economical
cost.
Over a period of
time, they have earned respect from their customers for being one of the most
innovative and quality conscious BOPP suppliers in the world. They have been
able to do this because they constantly innovate; not just with their products
and processes but also with their organization and their business practices.
Their core values
are their major driving force. They truly believe in customer orientation,
transparency, innovation and fair business practices with all their business
associates.
They are associated with leading FMCG Brands for providing cost-effective innovative packaging solutions to enhance their value.
In a recent survey
by "FORBES" Cosmo has been recognized one of the best 200 companies
out of 19000 listed companies with revenue of less than 1 Billion US$ outside
US.
Environmental Policy
Ř Their Policy, which applies to all parts of
their organization operating from the Waluj, Chikalthana, Karjan & Baska
sites is:
Ř To comply with all the applicable
environmental legislations and regulations
Ř To continuously improve their environmental
performance to prevent air, water and soil pollution
Ř To continuously reduce waste generated
Ř To continuously reduce the consumption of
restheirces such as water, energy and materials.
Ř To establish and maintain an Environmental
Management System according to ISO-14001 (1996)
Ř To train and involve all employees of CFL,
towards achieving the objectives derived from this policy
Product Safety and Hygiene
Policy
They, Cosmo Films Limited are India's premier export oriented enterprise
engaged in the manufacturing of BOPP film to be used for food packaging &
other applications.
They are committed to quality in all respects meeting customer
requirements and closely monitoring cost.
They shall strive to achieve this through their world-class facilities,
dedicated and trained personnel & continuous improvement programmes.
As an important link in the total food
chain, they accept their responsibility in processing, monitoring raw material
into hygienic and safe products for food packaging.
Being the industry leader they are committed
to preserving environment and ecological balance of the surroundings and ensure
that they surpass the applicable and statutory environmental standards.
This policy shall be revietheyd periodically for continuing suitability.
Awards and Recognition
PFFCASTAR 2005
Awarded to Cosmo
films Limited
Recognition of
Excellence for Thermal Lamination BOPP/BOPET Film in the Category of Product
Development & New Structures Presented at Mumbai on 24th November 2005
ISO 9001: 2000 :- ( Registration Certificate)
The Quality Management System of Cosmo Films Limited has been assessed
& found to comply with the requirements of ISO 9001 : 2000
The Quality management System is applicable to design, development,
manufacturing of BOPP films by biaxial orientation process & its marketing
for various applications
ISO 14001 :- (Registration Certificate)
The Management Systems of Cosmo Films Limited have been assessed by
International Certification Limited and found to comply with the requirements
of ISO 14001.
Department of Scientific and
Industrial Research, Ministry of Science and Technology, Government of
India, duly recognize their
center as a premier research laboratory. This is the only center of this nature
in
the entire Indian BOPP film
industry.
ISO 9001 certified: Joins the elite group of few BOPP film manufacturers
in the world.
1998-99: Best BOPP film
exporter by Plexconcil. Certificate of export recognition by Government of
Maharashtra
1998: "Highly Recommended" recognition by Montell for innovative
product development
1995: Award for best in house R&D efforts from Government of India.
Indiastar, 1994: Excellence in packaging from Indian Institute of
Packaging.
Got accredited with American
Institute of Baking (AIB) Certification for Safety and Hygiene of Food
related products.
Got best BOPP Exporter award for 1998-99, 1999-2000, 2000-2001.
Cosmo Films Listed in top 19 Indian companies by "Forbes
Magazine".
Awarded in Recognition of
Excellence for Exicusion Coatable BOPP Film by Paper, Film & Foil
converters' Association.
Global Presence
Their customers are
spread all across the globe. It is only due to their valued clientele that they
take pride in having a global presence.
HR Approch
Human Restheirce is
the most precious restheirces for the prosperity of the organization. This is
the key restheirce which differentiate one organization with other. They in
Cosmo have fundamental belief in the potential of Human beings.
"Growth
& excellence thru People" is their motto.
They have been
constantly innovating HR processes to create the climate in company, where
every employee is striving from within to excel individually and collectively
and thereby contributing in creating world class Business Institution.
As on date they
have approximately 400 employees at all over business location. These employees
are exposed to various technical, behavioral and managerial training programs
to upgrade there skills. Scientific performance appraisal system to ensure
constant development of employees as well as fare reward and recognition is in
place.
Job rotation and
multi-skilling processes are carried out through structured job evaluation and
job classification. Business operations are managed by empowered, competent
team of professional with structural review mechanism and best corporate
governance practices.
Core Values of
the company are:
Ř Transparency
Ř Customer Orientation
Ř Innovation
Ř Cost Consciousness
Ř Housekeeping
Ř Fair Business Practices
ISO
CERTIFICATION
Presently, they are
one among the only few ISO 9001 certified BOPP film manufacturers in the world.
The company has been certified by NQA QSR.
Excellent Scoring
by The American Institute of Baking for safety and Hygiene of food related
products.
IT
They believe Information
Technology is strategic tool for excellent customer service and sustainable
business growth.
The company has
following IT facilities:
Ř In all the plants Enterprise Restheirce
planning (ERP) Package implemented to process the business processes.
Ř Web base application for Customer order
management system using XML technology
Ř Web base application for Supplier order
Management system using XML technology
Ř Facility is also built into system to
exchange the Customer Invoices and Supplier Order in XML format
Ř Company has its on Web server and e-mail
facility to communicate effectively.
Ř It has well developed and informative web
site which is kept updated for the benefit of the information to the customer,
supplier and their business associates.
Press Releases
Cosmo Films
Limited, a leading player in BOPP flexible packaging industry has posted a net
profit after tax to the tune of Rs. 4.100 millions for the first quarter ending
30th June 2005 as against Rs. 23.500 millions in the corresponding
quarter of previous year.
The decrease in
performance has come due to overcapacity in the BOPP Industry – both globally
and domestically. Pressures on margins have continued during this quarter.
Volatility in raw material and crude oil prices have also affected the
operating margins during the quarter. Continuous efforts are on for reducing
the operating costs and improving the product mix for better realizations.
Despite
over-capacity, company’s export sales have increased to Rs. 335.100 millions as
compared to Rs. 265.600 millions during the corresponding quarter of last year.
The company is
focusing on the growth of Thermal films worldwide.
The second line for
Thermal films has been commissioned as per schedule in the EOU division. A MOU
has been signed for distribution of Thermal films in the USA with an
experienced and leading company. Major successes have been achieved in several
countries and they know believe that they are poised for break through in the
largest market in the world for Thermal films – The USA. Order for two more
such lines has been placed and the same will be commissioned before March
2006.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various stheirces including
but not limited to: The Ctheirts, 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] Ctheirt 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 :
Their
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.
Their 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.42.97 |
|
UK Pound |
1 |
Rs.84.75 |
|
Euro |
1 |
Rs.66.72 |
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 |
NO |
|
--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
unfavtheirable 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 |
Unfavtheirable & favtheirable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|