MIRA
INFORM REPORT
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Report Date : |
27.06.2008 |
IDENTIFICATION
DETAILS
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Name : |
THE
WESTERN INDIAN PLYWOODS LIMITED |
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Registered Office : |
Mill Road, P. O. Baliapatam, Cannanore – 670010, Kerala |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
15.01.1945 |
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Com. Reg. No.: |
09-1708 |
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CIN No.: [Company
Identification No.] |
L20211KL1945PLC001708 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHNW00038D |
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Legal Form : |
A
Public Limited Liability Company. The Company’s Shares are Listed on the
Stock Exchange. |
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Line of Business : |
Manufacturing of Plywood, Hardboard, Densified Wood. The company
also manufactures UF and PF Resins, Resorcinol Formaldehyde, Glass Reinforced
Plastics, Prefurnished Boards, DAP resin and Monomer, UV Top Coat and Base
Coat. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD
1500000 |
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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 having fine track. Trade relations
are fair. Financial position is good. Payments are usually correct and as per
commitments. The company
can be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office/ Factory : |
Mill Road, Baliapatam,
Cannanore – 670010, Kerala State, India |
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Tel. No.: |
91-497-2778151(4 lines) |
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Fax No.: |
91-497-2778181 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. P. C. D. Nambiar |
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Designation : |
Chairman |
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Name : |
Mr. G. S. A. Saldanha |
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Designation : |
Director |
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Name : |
Mr. N. L. Vaidyanathan |
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Designation : |
Director |
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Name : |
Mr. V. Ramachandran |
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Designation : |
Director |
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Name : |
Mr. Bhaskar Menon |
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Designation : |
Director |
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Name : |
Mr. A.J. Pai |
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Designation : |
Director (Ksidc, Nominee) |
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Name : |
Mr. N. U. Nampoothiri |
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Designation : |
Director (Ifci, Nominee) |
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Name : |
Mr. P.K. Mohamed |
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Designation : |
Managing Director |
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Name : |
Mr. P.K. Mayan Mohamed |
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Designation : |
Executive Director |
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Name : |
Mr. P H Kurian |
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Designation : |
Nominee (KSIDC) |
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Name : |
Mr. E. Ranjith Kuruvila |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. R. Balakrishnan |
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Designation : |
Company Secretary and Finance Controller |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
(As on 30.09.2005)
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoter's Holding |
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Promoters: |
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Indian Promoters |
345500 |
40.70 |
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Persons
acting in Concert |
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Non-Promoters Holding |
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Institutional
Investors: |
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Banks,
Financial Institutions, Insurance Companies (Central/State Govt. Institutions/
Non-Government Institutions) |
103013 |
12.14 |
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Sub-Total |
103013 |
12.14 |
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Others: |
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Private Corporate Bodies |
12521 |
1.48 |
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Indian Public |
387700 |
45.68 |
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Total |
848734 |
100 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Plywood, Hardboard, Densified Wood. The
company also manufactures UF and PF Resins, Resorcinol Formaldehyde, Glass
Reinforced Plastics, Prefurnished Boards, DAP resin and Monomer, UV Top Coat
and Base Coat. |
PRODUCTION
STATUS
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Particulars |
Unit |
Installed Capacity |
Actual Production |
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Plywood (on 3 ply 4 mm basis) |
Millions
Sq.Mts. |
3.75 |
7.35 |
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Hardboard |
M.T. |
52,125 |
43033 |
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Densified Wood |
M.T. |
3,000 |
2296 |
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UF & PF Resins |
M.T. |
3,600 |
911 |
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Resorcinol Formaldehyde |
Kgs. |
75,000 |
10 |
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Furniture |
Nos. |
N.A. |
10867 |
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Glass Reinforced Plastics |
M.T. |
1,200 |
-- |
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Diallylphthalate
Resins and its Moulding Composition |
Kgs. |
150,000 |
3731 |
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DAP Resins and Monomer |
Kgs. |
225,000 |
-- |
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Prefinished Boards (surface
area) |
Millions Sq. Mts. |
1.350 |
1.27 |
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UV Top Coat and Base Coat |
M.T. |
123.90 |
3.37 |
GENERAL
INFORMATION
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No. of Employees : |
400 |
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Bankers : |
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Facilities : |
The dues to Industrial Finance Corporation of India Limited (IFCI) on One Time Settlement (OTS) is to be settled by repayment of Rs.220.000 Millions as cash payment and the balance amount of Rs.92.327 Millions by issue of preference shares - See Note No. 11 of Schedule-17-B. 1) Term Loans from IFCI and Dena Bank are secured on a pari passu basis by Mortgage of all Fixed Assets, present and future and a floating charge on machinery spares of the company. 2) Term Loan from State Bank of India is secured on a pari passu first charge on Current Assets and second charge, on all Fixeci Assets of the company. 3) Term Loan from Bank of India is secured by deposit of title deeds of 3 acres and 86 3/4 cents of land at Baliapatarn and hypothecation of High Pressure Compreg press. 4) The Cash Credit/Packing Credit from the Banks are secured by Hypothecation of all Raw Materials, Work-in-Process, Finished Goods and receivables with a second charge on Fixed Assets of the Company. 5) All the above finances have been secured by personal guarantee of the Managing Director. 6) The Deferred Payment Liability on Plant and Machinery is secured by the Hypothecation of Boiler in favour of Bank of India. |
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Banking
Relations : |
Satisfactory
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Auditors : |
Varma
and Varma Chartered Accountants, Kochi Internal Auditors Krishnamoorthy & Krishnamoorthy Chartered Accountants, Kochi Legal Advisor Pushya
Sitaraman Advocate, Chennai |
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Subsidiaries : |
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Associates: |
Wood
Plast Industries and Western India Cottons Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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25000000 |
Equity Shares |
Rs.10/- each |
Rs.250.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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22320040 |
Equity Shares |
Rs.10/- each |
Rs.223.200
Millions |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
30.09.2005 (18 Month) |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
223.200 |
223.200 |
130.873 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
84.500 |
41.700 |
41.296 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
(52.285) |
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NETWORTH |
307.700 |
264.900 |
119.884 |
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LOAN FUNDS |
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1] Secured Loans |
480.000 |
480.400 |
584.549 |
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2] Unsecured Loans |
19.600 |
23.900 |
10.509 |
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TOTAL BORROWING |
499.600 |
504.300 |
595.058 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
807.300 |
769.200 |
714.942 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
450.700 |
494.500 |
477.999 |
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Capital work-in-progress |
3.500 |
0.000 |
40.153 |
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INVESTMENT |
5.600 |
5.600 |
3.611 |
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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 |
424.100
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383.100 |
366.324
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Sundry Debtors |
97.700
|
83.300 |
80.975
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Cash & Bank Balances |
29.300
|
13.400 |
11.930
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Other Current Assets |
0.000
|
0.000 |
0.000
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Loans & Advances |
42.500
|
46.700 |
37.054
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Total
Current Assets |
593.600
|
526.500 |
496.283 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
186.600
|
196.800 |
249.398
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Provisions |
59.500
|
60.600 |
53.706
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Total
Current Liabilities |
246.100
|
257.400 |
303.104 |
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Net Current Assets |
347.500
|
269.100 |
193.179
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
807.300 |
769.200 |
714.942 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
30.09.2005 (18 Month) |
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Sales Turnover |
719.300 |
328.100 |
858.200 |
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Other Income |
22.300 |
57.000 |
126.600 |
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Total Income |
741.600 |
385.100 |
984.800 |
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Profit/(Loss) Before Tax |
48.400 |
55.700 |
23.000 |
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Provision for Taxation |
5.600 |
3.000 |
1.200 |
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Profit/(Loss) After Tax |
42.800 |
52.700 |
21.800 |
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Expenditures : |
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Raw Material |
206.800 |
95.700 |
231.100 |
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Excise Duty |
82.000 |
37.400 |
99.600 |
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Power and Fuel Cost |
109.600 |
54.300 |
153.700 |
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Other Manufacturing Expenses |
22.800 |
11.000 |
31.300 |
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Employees Cost |
81.200 |
47.100 |
140.800 |
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Selling and Administrative Expenses |
74.900 |
36.600 |
109.500 |
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Miscellaneous Expenses |
7.700 |
1.900 |
60.200 |
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Interests and Financial Charges |
61.600 |
22.900 |
69.900 |
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Depreciation |
46.600 |
22.500 |
65.700 |
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Other Expenditure |
0.000 |
0.000 |
0.000 |
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Total Expenditure |
693.200 |
329.400 |
961.800 |
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KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
30.09.2005 (18 Month) |
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Debt-Equity Ratio |
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1.75
|
2.86 |
6.17
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Long Term Debt-Equity Shares |
|
0.92
|
1.61 |
3.96
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Current Ratio |
|
1.15
|
0.98 |
1.03
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TURNOVER RATIOS |
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Fixed Assets |
|
0.61
|
0.56 |
0.50
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Inventory |
|
1.78
|
1.75 |
1.54
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Debtors |
|
7.95
|
7.99 |
7.48
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Interests Cover Ratio |
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1.79
|
2.11 |
1.33
|
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Operating Profit Margin (%) |
|
21.77
|
21.58 |
18.48
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Profit Before Interests and Tax Margin (%) |
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15.29
|
14.72 |
10.82
|
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Cash Profit Margin (%) |
|
12.43
|
14.14 |
10.20
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Adjusted Net Profit Margin (%) |
|
5.95
|
7.28 |
2.54
|
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Return On Capital Employed (%) |
|
13.95
|
12.57 |
7.67
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Return On Net Worth (%) |
|
28.92
|
37.82 |
16.30
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LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The Kerala based Subject is the largest integrated wood processing complex in the country. And was incorporated in the year 1945. It is engaged in manufacturing of Plywood, Hardboard, densified wood. The company also manufactures UF and PF Resins, Resorcinol Formaldehyde, Glass Reinforced Plastics, Prefurnished Boards, DAP resin and Monomer, UV Top Coat and Base Coat.
The Hardboard plant with an installed capacity of 12.5 tonnes was set up in
1959-60 with West German technical collaboration. Now this division with a
total installed capacity of 34750 MTPA is the market leader in
Hardboards.
In 1978, WIP has set up a plant for manufacturing Di-allyl Phthalate (DAP)
Moulding powder, a thermoset which had to be imported until then, the
technology was developed in-house with support from Shree Ram Institute of
Industrial Research, Delhi.
In 1989, the company put up a pre-finishing plant for direct printing wood
grains and plain colours onto hardboards and plywoods using UV radiation cured
surface finishes. The pre-finishing plant is the only one of its kind in the
country and one of the few in the World.
WIP is the first company to obtain ISO 9002 certification for Hardboards and
pre-finished boards. In May,2003 there was major fire accident in the factory
which had destroyed substantial portion of the financial products and the
machinery items and equipments. The company is taking severe steps in
formulating aggresive marketing strategy especially for its premium products.
FINANCIALS:
The Company has achieved a turn over of Rs.719.300 Millions
and a profit before tax of Rs.48.398 Millions. After providing depreciation and
other adjustments, the net profit for the year was Rs.42.768 Millions. The
Company has already chalked out various action plans to further improve
performance in terms of turnover and profit. The ongoing construction boom has
driven the wood based panel industry into high growth and demand for
construction linked wood based products continues to rise. However the
availability of quality raw materials continues to be grim. The Company is
taking many proactive steps to source the required materials from available sources
and also exploring setting up a Joint Venture Company Overseas.
The Company has maintained satisfactory relationship with
bankers and term lending institutions. The Company has been regular in the
discharge of its interest and repayment obligations to these Banks and
institutions.
A term loan of Rs.200.000 Millions was availed from KSIDC to part settles the
dues to IFCI.
DIVIDEND:
In order to conserve the resources of the Company for further business as part
of their ongoing programme of diversification, the Board is not proposing any
dividend for the year under review.
DIRECTORS:
Mr. V. Ramachandran and Sri. Bhaskar Menon retires by rotation and is eligible
for re-appointment. Your Directors had passed the necessary resolution for
reappointment.
Mr. P.H. Kurian, IAS, joined the Board on 31.08.2006 as nominee Director of
KSIDC in place of Mr. A.J. Pai. IFCI had withdrawn the nomination of Mr. N.U.
Nampoothiri as director on 23.02.2007 The Board wishes to place on record its
appreciation of the significant contributions made by Mr. A.J. Pai and Mr. N.U.
Nampoothiri during their tenure as Directors of the Company.
Mr. Ranjith Kuruvilla was appointed as Additional Director in the Board on
25.01.2007 the appointment of Mr. Ranjith Kuruvilla as Director is being placed
before the shareholders for their approval at the ensuing AGM.
SUBSIDIARY COMPANIES:
The Annual Audited Accounts of the subsidiary companies viz. M/s. Southern
Veneers and Woodworks Limited and The Kohinoor Saw Mill Company Limited for the
period ended 31st March 2007 together with enclosures and other reports are
attached, as required under Section 212 of the Companies Act. The audited
consolidated financial statements as per accounting standard 21 are also
attached.
ISO
CERTIFICATION:
The ISO 9002-1994 Certification awarded to the Company in 1996 for the quality
management systems of Hardboard and WIPLAC pre-finished boards was
re-certified, in May, 1999 for another three years and the Company has also
received the same certification for its Plywood and Densified Wood, Flush doors
and Block boards. The next re-certification for ISO 9001-2000 was done by M/s.
Bureau Veritas Quality International and the certificate for manufacturing and
sales of Hardboard, WIPLAC, pre-finished boards, Plywood, Blockboard, Flush
door and Densified wood products was issued for a period of three years from
25.10.2002. The recertification has been done for a further period of three
years and is valid upto November 2008.
Industry
Structure and Development:
The Company is a Leading supplier to Railways, Defence, Electrical, Transport
and Automobiles, Civil Aviation and other industries. There is acute shortage
of good raw material, which has forced the company to import a substantial portion
of its main raw material Viz. timber at a considerable increase in price. The
Company has no control over the price prevailing in the overseas market.
Increase in price of petroleum products, Levies by the Government etc. has
escalated the cost of production. This increase in cost could not be fully
absorbed in the market price of the product. However by diversification into
new valued added products and by applying improved technology and Management
methods, the Company is trying to overcome these problems. s
FIXED ASSETS
- Land -Freehold
- Land -
Leasehold
- Buildings
- Plant and
Machinery
- Electric
Machinery
- Rolling and
Sundry Plant
- Computer
- Lab Equipments
- Furniture and
Fittings
- Vehicles
- Intangibles-Software
Website Details:
Profile:
Established in 1945 the company started manufacture of sawn timber and plywood on a modest scale with a few indigenous and lent-leased machinery. Due to the progressive outlook and relentless efforts of WIP’s founder Managing Director Shri. A.K. Kaderkutty, a doyen of the wood based panel industry in India, the company made steady progress over the years and business expanded to its present stature and is today one of the biggest wood based industrial integrated complexes in the country and also in South-East Asia with an employee strength of 1200.
From the humble beginnings in 1942 as a sawmill and a tea chest manufacturing facility, W.I.P grew steadily adding the latest in machinery and incorporating new manufacturing techniques. Products ranged from Plywoods, Block boards, Flush door, Shuttering and Marine Plywood, Aircraft Plywood etc. The Company planned and executed the hardboard plant between the years 1956 and 1958 with an initial installed capacity of 12.5 tonnes of hardboard per day. The Company also installed its own synthetic resin unit in 1959 with a capacity of 200 tonnes per annum, which gradually increased to 2400 tonnes per annum, by 1975. Manufacture of densified Wood was commenced on a small scale initially as a part of the plywood plant. An Industrial Licence was obtained in 1974 for manufacture of Densified Wood with a capacity of 2000 M.T. per annum. Since then, the Company has been producing components of densified wood required mainly by the electrical, textile and chemical industries, Railways, etc. In 1974 a plant for manufacture of furniture was added.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.42.73 |
|
UK Pound |
1 |
Rs.84.38 |
|
Euro |
1 |
Rs.66.97 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
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 |
|