MIRA INFORM REPORT

 

 

Report Date :

07.03.2008

 

IDENTIFICATION DETAILS

 

Name :

JAIN IRRIGATION SYSTEMS LIMITED

 

 

Registered Office :

Jain Fields, Jain Platic Park, National Highway No. 6, P. O. Box 72, Bambhori, Jalgaon – 425 001, Maharashtra.

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

30.12.1986

 

 

Com. Reg. No.:

11-42028

 

 

IEC No.:

0388080361

 

 

CIN No.:

[Company Identification No.]

L29120MH1986PLC042028

 

 

TAN No.:

(Tax Deduction & Collection Account No.)

NSKJ00066D

 

 

PAN No.:

(Permanent Account No.)

AAACJ7163Q

 

 

Legal Form :

A Public Limited Liability company. The company’s shares are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing and Marketing of Extruded-Moulded, Assembled / Fabricated Plastic Products / Items, Micro Irrigation Systems, Polytube and Laterals, Injection Moulded Components, Plastic Products, PVC Sheets, PC Sheets, HDPE Pipes and Fittings (for sprinkler systems), PVC Pipes and Fabricated Fittings, Metal Filter and Filtration Equipments, Dies & Moulds and Tools Dehydrated Onions and Vegetables, Papuan Powder, Tissue Culture Plants, Water Soluble Fertilisers and Solar Water Heating Systems.

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

USD 19038900

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well-established and reputed company of Jain Irrigation Group or Jain Group. The company’s shares are listed on the stock exchanges. Available information indicates high financial responsibility of the company and it’s directors. Their trade relations are fair. Payments are usually correct and as per commitments.

 

The company can be considered good for normal business dealings at usual trade terms and conditions.

 

LOCATIONS

 

Registered Office/ Head Office :

Jain Fields, Jain Platic Park, National Highway No. 6, P. O. Box 72, Bambhori, Jalgaon – 425 001, Maharashtra, INDIA.

Tel. No.:

91–257–2220022 / 2250011 / 2288011 / 22

Fax No.:

91–257–2221122 / 2251111 / 2258111 / 22

E-Mail :

jisl@jains.com

agricul@bom6.vsnl.net.in

plasticpark@jains.com

Website :

http://www.jains.com

Area :

71 Acres

Location :

Owned

 

 

Factory 1 :

Jain View

Dhobikuva, Muvad, Padra, Vadodra, Gujarat

Tel. No.:

91-2662-267281/267400

Fax No.:

91-2662-267363

E-Mail :

jianbaroda@jains.com

Area :

4 Acres

Location :

Owned

 

 

Factory 2 :

Jain Plastic Park,

N.H.No. 6, P.O. Box. 72, Bambhori, Jalgaon – 425 001, Maharashtra, India

Tel. No.:

91-257-2258011/22

Fax No.:

91-257-2258111122

E-Mail :

plasticpark@jains.com , jisl@jains.com

Area :

71 Acres

Location :

Owned

 

 

Factory 3 :

Jain Agri Park, Jain Hills

Shirsoli Road, P.O. Box: 72 Bambhori, Jalgaon – 425 001, Maharashtra, India

Tel. No.:

91-257-2260011122, 2260288

Fax No.:

91-257-2261111122/33

E-Mail :

agripark@jains.com

Area :

274 Acres

Location :

Owned

 

 

Factory 4 :

Jain Food Park, Jain Valley

Shirsoli Road, P.O. Box: 20, District Jalgaon-425001

Tel. No.:

91-257-2260033/44, 2260288

Fax No.:

91-257-2261144

E-Mail :

foodpark@jains.com

Area :

236 Acres

Location :

Owned

 

 

Factory 5 :

South Africa Office: Johannesburg-South Africa

JISAL Africa Pty Limited

Block “D” 367 Surrey Avenue, Randburg 2194

Tel. No.:

27-11-7870000

Fax No.:

27-11-7870453

E-Mail :

foodpark@jain.com

 

 

Factory 6 :

UK Office : UK (Tiwickenham)

Jain (Europe) Limited

Excel Plastic Distribution Limited

23-25 Kings Street, Twickenham, TWI 3 SD, UK

Tel. No.:

44-208-8928988

Fax No.:

44-208-8928988

E-Mail :

excel@exceluk.co.uk

 

 

Factory 7 :

Hyderabad (Food Plant)

Jain Orchards: Juice Park, S No. 587 & 588, Kondamadgu Village, Bibi Nagar Mandal, District : Nalgonda, Hyderabad – 508126, Andhra Pradesh

Tel. No.:

91-8685-277302,3

Fax No.:

91-8685-277305

E-Mail :

foodplanthyd@jains.com

Area :

11 Acres

Location :

Owned

 

 

Factory 8 :

Dindori

Tel. No.:

91-2557-289122, 289133

Fax No.:

91-2557-221399

E-Mail :

jaindindori@jains.com

 

 

Factory 9 :

Sinnar

Tel. No.:

91-2551-230717,230515

Fax No.:

91-2551- 230522

E-Mail :

jainsinnar@jains.com

 

 

Factory 10 :

Sendhwa

Tel. No.:

91-7281-228039/40

Fax No.:

91-7281-223099 PP

 

 

Factory 11 :

Udumalpet

Telefax :

91-4252-278401/2

Fax No.:

91-4252-278403

E-Mail :

jainudumalpet@jains.com

 

 

Factory 12 :

Vadodara

Tel. No.:

91-2662-267281, 267400

Telefax :

91-2662-267363

E-Mail :

jainbaroda@jains.com

 

 

Factory 13 :

Jain View

C/o Oroent Vegertexpo Limited

At. Post: Walkhed, Tal: Dindori, Nashik, Maharashtra

Tel. No.:

91-2557-289122/289133

Fax No.:

91-2557-221399

E-Mail :

jaindindori@jains.com

 

 

Branches :

Ahmedabad

Tel. No.:

91-79-26421704

Fax No.:

91-79-26421612

E-Mail :

jainahmedabad@jains.com

 

 

Branches :

Depot

Tel. No.:

91-2718-261691

E-Mail :

ahmedabaddepot@jains.com

 

 

Branches :

Ahmednagar

Tel. No.:

91-241-2415480

Fax No.:

91-241-2450909 PP

E-Mail :

jainahmednagar@jains.com

 

 

Branches :

Amravati

Tel. No.:

91-721-2674737, 2671486

Fax No.:

91-721-2670363 (PP)

E-Mail :

jainamravati@jains.com

 

 

Branches :

Depot

Tel. No.:

91-7221-227123

E-Mail :

amravatidepot@jains.com

 

 

Branches :

Aurangabad

Tel. No.:

91-240-2489666,2489777

Fax No.:

91-240-2470185 PP

E-Mail :

jainaurangabad@jains.com

 

 

Branches :

Bangalore

Tel. No.:

91-80-25361257, 25548920

Fax No.:

91-80-25548921

E-Mail :

jainbangalore@jains.com

 

 

Branches :

Baramati Depot

Tel. No.:

91-2112-243302

Fax No.:

91-2112-243738

E-Mail :

jainbaramati@jains.com

 

 

Branches :

Bijapur

Telefax No.:

91-835-222307 7, 2223222

E-Mail :

jainbijapur@jains.com

 

 

Branches :

Chennai

Tel. No.:

91-44-24339794, 52010501

Telefax No.:

91-44-24328710

E-Mail :

jainchennai@jains.com

 

 

Branches :

Coimbatore

Tel. No.:

91-422-2349318, 5587750

E-Mail :

jaincoimtaatore@jains.com

 

 

Branches :

Hyderabad

Tel. No.:

91-40- 23322476, 23394593

Fax No.:

91-40- 23327589

E-Mail :

jainhyderabad@jains.com

 

 

Branches :

Depot

Tel. No.:

91-8685-277302,3

Fax No.:

277305

E-Mail :

hyderabaddepot@jains.com

 

 

Branches :

Indore

Tel. No.:

91-731-2513189, 2524856, 5542288

Fax No.:

91-731-25066011

E-Mail :

J3inindore@jains.com

 

 

Branches :

Jaipur

Tel. No.:

91-731-2141-2203515

Fax No.:

91-731-2141-2207052 PP

E-Mail :

jainjaipur@jains.com

 

 

Branches :

Jalgaon • Jain Shop

Tel. No.:

91-731-2257-2220077

Fax No.:

91-731-22572221177

 

 

Branches :

Jalgaon - Jain Show Room

Tel. No.:

91-257-2228509,

E-Mail :

jainshowroom@jains.com

 

 

Branches :

Mumbai (India)

Jain House

41/43, Police Court Lane, Fore Mumbai-400001

Tel. No.:

91-22-22610011,22620011,22670011

Fax No.:

91-22-22621177,22641177

E-Mail :

jainmumbai@jains.com

 

 

Branches :

Nagpur

E-Mail :

jainnagpur@jains.com

 

 

Branches :

Handed

Tel. No.:

91-2462-274046

Fax No.:

91-2462-223952 (PP)

E-Mail :

jainnanded@jains.com

 

 

Branches :

Nasik

Tel. No.:

91-253-2592718,2590915

Fax No.:

91-253-2593188,|PP)

E-Mail :

jainnasik@jains.com

 

 

Branches :

New Delhi

Tel. No.:

91-11 -26493159,26493160, 51748412

Fax No.:

91-11-51748409

E-Mail :

jainnewdelhi@jains.com

 

 

Branches :

Pune :

Tel. No.:

91-20-25434872, 73 , 25440373

Fax No.:

91-20-25411920,

E-Mail :

jainpune@jains.com

 

 

Branches :

Pandharpur

Tel. No.:

91-2188-222637

 

 

Branches :

Raipur

Tel. No.:

91-771-5535987

E-Mail :

jainraipur@jains.com

 

 

Branches :

Ratnagiri

Telefax No.:

91-2352-221706

E-Mail :

jainratnagiri@jains.com

 

 

Branches :

Sangli

Tel. No.:

91-233-2333477

Fax No.:

91-233-2332194

E-Mail :

jainsangli@jains.com

 

 

Branches :

Solapur

Tel. No.:

91-217-2357395

Telefax No.:

91-217-2357220

E-Mail :

jainsolapur@jains.com

 

 

Branches :

Sivaganga

Tel. No.:

04575-243289

E-Mail :

jainsivaganga@jains.com

 

 

Branches :

Thane

Tel. No.:

91-22-25443992

Fax No.:

91-22-25443976

E-Mail :

jainthane@jains.com

 

 

Branches :

Vadodara

Tel. No.:

91-265-2356727, 2356737, 2356575

Fax No.:

91-265-2356525

E-Mail :

jaingujarat@jains.com

 

DIRECTORS

 

Name :

Mr. Anil Bavarlal Jain

Designation :

Managing Director

Address:

Jain House, 7/8, Suyog Colony, Near Girna Water Tank, Jalgaon – 425 002, Maharashtra, India

Date of Birth/Age :

40 years

Qualification :

B. Com., LL.B.

Date of Joining:

12th January, 1987

Experience:

22 years

Previous Employment:

Jain Brothers Industries – Partner

 

 

Name :

Mr. Ajit B. Jain

Designation :

Whole Time Director and Chief Operating Officer

Address:

Jain House, 7/8, Suyog Colony, Near Girna Water Tank, Jalgaon – 425 002, Maharashtra

Date of Birth/Age :

39 years

Qualification:

B.E.

Experience:

22 years

Date of Joining:

11th January, 1985

 

 

Name :

Mr. Bhavarlal H. Jain

Designation :

Chairman

Address :

Jain House, 7/8, Suyog Colony, Near Girna Water Tank, Jalgaon – 425 002, Maharashtra

Date of Birth/Age :

68 years

Qualification :

B. Com., LL.B.

Experience:

45 years

 

 

Name :

Mr. N.V. Khote

Designation :

Co-Chairman (Resigned w.e.f. 05.09.2005)

Address:

B-1, Bageshree Shanker Ghanekar Marg, Prabhadevi, Mumbai – 400 025

Qualification:

M.Sc.

Experience:

44 years

 

 

Name :

Mr. Anirudha Ramkrishna Barwe

Designation :

Director

Address:

B-1, Bageshree Shanker Ghanekar Marg, Prabhadevi, Mumbai – 400 025

Date of Birth/Age :

67 years

Qualification:

M.Sc. (Maths)

Experience:

47 years

 

 

Name :

Mr. Anup Mohan Jacob

Designation :

Director (Resigned w.e.f. 05,09.2005)

Address:

345, California Street, Suite 1770, Sanfrancisco Chartered Accountants 94104, USA

Experience:

10 years

 

 

Name :

Mr. Bhikhubhai Shantilal Trivedi

Designation :

Director (Resigned w.e.f. 05.09.2005)

Address:

C-603, Muni Darshan, Behind Sagar Plaza Building, Near Bank of Baroda, M. G. Road, Ghatkopar (West), Mumbai – 400 086

Qualification:

Chartered Accountants

Experience:

40 years

 

 

Name :

Mr. Bijash Jamnadas Thakker

Designation :

Director (Resigned w.e.f. 05.09.2005)

 

 

Name :

Mr. John George Sylvia

Designation :

Director (Resigned w.e.f. 05.09.2005)

 

 

Name :

Mr. Puneet Madanlal Bhatia

Designation :

Director (Resigned w.e.f. 05.09.2005)

 

 

Name :

Mr. Gerardo Benitez Pelaez

Designation :

Director (Resigned w.e.f. 06.09.2005)

 

 

Name :

Mr. Vasant V. Warty

Designation :

Director (Nominee SBII

Date of Birth/Age :

63 years

Address:

6 Umesh Society, N P thakur Road, New Rajpuriabaug, Vile Parle (E) Mumbai-400057

Qualification:

BA, LLB, CAIIB

Experience:

40 years

 

 

Name :

Mr. Ravendran Krishnasamy

Designation :

Additional Director (w.e.f. 10.01.2005)

 

 

 

 

KEY EXECUTIVES

 

Name :

Mr. Ashok B. Jain

Designation :

President

Address:

Jain House, 7/8, Suyog Colony, Near Girna Water Tank, Jalgaon – 425 002, Maharashtra

Date of Birth/Age :

42 years

Qualification:

M. Com.

Experience:

24 years

Date of Joining:

12.01 1987

Previous Employment:

Jain Brothers Industries – Partner

 

 

Name :

Mr. Atul B. Jain

Designation :

President and Chief Marketing Officer

Date of Birth/Age :

36 years

Address:

Jain House, 7/8, Suyog Colony, Near Girna Water Tank, Jalgaon – 425 002, Maharashtra

Qualification:

B. Com.

Date of Joining:

01.01.1991

Experience:

15 years

 

 

Name :

Mr. Manoj Lodha

Designation :

President- Banking Finance

Qualification:

CA

Experience:

9 years

Date of Joining:

05.11.1998

 

 

Name :

Mr. Rajnikant B. Jain

Designation :

Chief Technical Officer (Food Park)

Date of Birth/Age :

50 years

Address:

Jain House, 5/A, Suyog Colony, Near Girna Water Tank, Jalgaon – 425 002, Maharashtra

Qualification:

B. Tech

Experience:

29 years

 

 

Name :

R. Swaminathan

Designation :

Chief Technical Officer (Plastic Park)

Date of Birth/Age :

54 years

Address:

Jain House, 5/B, Suyog Colony, Near Girna Water Tank, Jalgaon – 425 002, Maharashtra

Qualification:

B. Tech (Chem)

Experience:

34 years

 

 

Name :

Mr. A.V. Ghodgaonkar

Designation :

Company Secretary

 

 

Name :

Mr. Ramesh C A Jain

Designation :

Director

Address:

6 Umesh Society, N P thakur Road, New Rajpuriabaug, Vile Parle (E) Mumbai-400057

Date of Birth/Age :

61 years

Qualification:

BA, LLB

Experience:

35 years

 

 

Name :

Mrs. Radhika C Pereira

Designation :

Director

Date of Birth/Age :

35 years

Address:

Dodhat Pereira and Associates, 1018, 10th Floor, Maker Chamber V, Nariman Point, Mumbai –400021

Qualification:

Bsc. LLB, LLM (Cambridge)

Experience:

15 years

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 30th June, 2007

 

Names of Shareholders

No. of Shares

Percentage of Holding

Shareholding of promoter and promoter Group

 

 

Indian

 

 

Individuals/Hindu Undivided Family

19845049

29.41

Public Shareholding

 

 

Institutions

 

 

Mutual Fund/ UTI

6098387

9.04

Financial Institutions /Banks

13606

0.02

Foreign Institutional Investors (FIIs)

27945606

41.41

Non Institutions

 

 

Bodies Corporate/Trusts

3345948

4.96

Individuals-shareholders holding nominal Share Capital up to Rs.0.100 Millions

2335544

3.46

Individuals shareholders holding nominal Share Capital excess of Rs.0.100 Millions

1525666

2.26

Any other-

 

 

NRI

78585

0.12

Non Domestic Company

6271557

9.29

Clearing Members

17411

0.03

Share held by Custodians and against which depository Receipts have been issued

172837

-

 

 

 

Total

67650196

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Marketing of Extruded-Moulded, Assembled / Fabricated Plastic Products / Items, Micro Irrigation Systems, Polytube and Laterals, Injection Moulded Components, Plastic Products, PVC Sheets, PC Sheets, HDPE Pipes and Fittings (for sprinkler systems), PVC Pipes and Fabricated Fittings, Metal Filter and Filtration Equipments, Dies and Moulds and Tools Dehydrated Onions and Vegetables, Papuan Powder, Tissue Culture Plants, Water Soluble Fertilisers and Solar Water Heating Systems.

 

 

Products :

Item Code No. (ITC Code)

842481.00

Product Description

Micro Irrigation Systems

 

 

Item Code No. (ITC Code)

392061

Product Description

Plastic Sheets

 

 

Item Code No. (ITC Code)

391723.09

Product Description

Plastic Extruded and Moulded Products such as Pipes, Fittings, Profiles, etc.

 

 

ITC Code

-

Product Description

MIS and Other Agricultural Related Goods

 

 

 

High-Tech Agri Products

·         Drip Irrigation

·         Sprinkler Irrigation

 

Plastic Piping Products

·         PVC Pipes and fittings

·         PE Pipes and fittings

 

Agri Processed Products

·         Dehydrated onions and vegetables

·         Processed fruit purees, concentrates and frozen fruits

 

Plastic Sheet Products

·         PVC Sheets

·         PC Sheets

 

Other Products and Services

·         Tissue Culture, hybrid and grafted plants

·         Solar water heaters and photovoltaic appliances

·         Education and training

·         Turnkey and consultancy services

 

 

Exports to :
  • Srilanka
  • Israel
  • South Africa
  • Australia
  • UK
  • Bangladesh
  • Argentina
  • Italy
  • UAE

 

 

Imports :

 

Countries:
  • Rohm and Hass
  • Germany
  • Singapore
  • USA
  • The Netherlands
  • Japan
  • Indonesia
  • South Africa
  • Saudi Arabia

 

 

Terms :

 

Selling :

L/C, Cash, Open Account Credit, Credit (30/60/90 days)

 

 

Purchasing :

L/C, Cash, Open Account Credit, Credit (30/60/90 days)

 

 

 

 

 

 

 

PRODUCTION STATUS

 

Particulars

Unit

Installed Capacity

Operational Capacity

Actual Production

Extruded Moulded Assembled/Micro Irrigation Systems

Polytube and Laterals

MT

11400

7200

4649

Injection Moulded Components

MT

2200

1800

1284

PVC Pipes and Fittings

MT

35,600

33400

30955

HDPE Pipe and Fittings

MT

14850

10200

8275

Plastic Products

MT

--

 

--

PVC Sheets

MT

21780

17400

14267

PC Sheets [$]

MT

4550

4100

2321

Dehydrated Onions & Vegetables

MT

9500

8500

6271

Fruit Puree & Concentrates

MT

28900

18000

12016

Refined Papain Powder

MT

25

 

--

Tissue Culture Plants

MT

7500000

7500000

5994190

Solar Water Heating Systems

MT

1200000

600000

395556

 

 

GENERAL INFORMATION

 

Customers :
  • Wholesalers
  • Retailers
  • OEM’s
  • End Users

 

 

No. of Employees :

2870

 

 

Bankers :
  • Bank of Baroda, Jalgaon.
  • Comm. Branch, Advance Division, Bank Street, Mumbai-400023
  • Centurion Bank of Punjab, Mumbai
  • Canara Bank, Jalgaon
  • Development Credit Bank Limited, Mumbai
  • Dena Bank, Mumbai
  • Export Import Bank of India, Mumbai
  • ICICI Bank Limited, Mumbai
  • State Bank of India, Jalgaon – 425001, Maharashtra, India
  • State Bank of Indora, Mumbai
  • Standard Chartered Bank, Mumbai
  • IDBI Bank Limited, Jalgaon
  • Axis Bank
  • The United Western Bank Limited, Jalgaon
  • Union Bank of India, Mumbai IFB Branch, Nariman Point, back Vidhan. Bhavan, Mumbai
  • Bank of Baroda Corporate Finance Branch, 1st Floor, Walchand, Hirachand Marg, Ballard Pier Mumbai –400001
  • Canara Bank, Visanji Nagar, Jalgaon-425001
  • Canara Bank, Calcot House, Fountain, Mumbai – 400023, Maharashtra, India
  • Credit Agrocole Indosuez, 115, Mahatma Gandhi Road, Mumbai – 400023, Maharashtra, India

 

Banking Relations :

Good

 

 

Auditors :

Dalal and Shah

Chartered Accountants

Address :

Office No.11, First Floor, National Library Road, Bandra (W), Mumbai – 400050, Maharashtra, India

Tel. No.:

91-22-22660115 / 22662110

Fax No.:

91-22-22661503

Email:

Dalal_shah@rediffmail.com

 

 

Associates :
  • JISL Overseas Limited, Mauritius
  • Excel Manufacturing Inc., USA
  • Excel Plastic Distribution Limited, UK
  • Jain Extrusion & Moulding Private Limited
  • Pixes Point Private Limited
  • Jain Vanguard Polybutelyne Limited
  • Labh Subh Securities International Limited
  • Atlaz Technology Private Limited
  • Jain Brothers Industries Private Limited
  • JAF Products Private Limited
  • Jain Sons Investment Corporation
  • Drip & Pipe Suppliers
  • Jain Computer & Allied Services
  • Jain Charities

 

 

 

Subsidiaries :
  • JISL Overseas Private Limited, Mauritius
  • Gowtham Granites Limited, Khammam, Andhra Pradesh, India

 

  • Jain (Europe) Limited

(Wholly Owned Subsidiary Company)

Excel Plastic Distribution Limited,

23-25 King Street, Twickenham, TWI 3 SD,

United Kingdom

Tel: 44-208-8928888

Fax : 44-208-8928988

Email: excel@exceluk.co.uk

Marketing Arm of Jain irrigation Systems limited, India (Parent) in Europe

 

  • Jain (America) Inc.

(Wholly Owned Subsidiary Company)

1819 Walcutt Road, Suite-I

Columbus, Ohio 43228

Tel : 1-614-8509400

Fax : 1-614-8508600

Toll Free Tel: 1-888-4737539

Toll Free Fax : 1-888-2891403

Email : sales@forexcel.com

Marketing Arm of Jain Irrigation Systems limited India (Parent) in USA

 

 

GLOBAL ALLIANCES:
  • Amcor Limited, Israel (Solar Systems)
  • Azrom Metal Industries, Israel (Green Houses)
  • Chapin Watermatics Inc, U.S.A (Sub-soil Tubing)
  • Plexite Limited (Glynwed Group), U.K. (Wood-alike Plastics)
  • Vanguard Plastics Inc, U.S.A. (Polybutylene Plumbing Systems)

 

 

 

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

528600000

Equity Share

Rs.10/- each

Rs.5286.000 Millions

 

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

150283000

Equity Share

Rs.10/- each

Rs.1502.830 Millions

 

 

 

 

 

 

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

1502.830

1494.424

1518.851

2] Reserves & Surplus

3256.895

2043.488

1765.611
NETWORTH

4759.725

3537.912

3284.462

LOAN FUNDS

 

 

 

1] Secured Loans

4781.956

4017.001

2994.832

2] Unsecured Loans

2715.026

2728.280

371.679
TOTAL BORROWING

7496.982

6745.281

3366.511
DEFERRED TAX LIABILITIES

0.000

0.000

0.000
 

 

 

 
TOTAL

12256.707

10283.193

6650.973
 

 

 

 
APPLICATION OF FUNDS

 

 

 
 

 

 

 
FIXED ASSETS [Net Block]

5287.887

3944.808

3117.388
Capital work-in-progress

645.731

417.971

100.227
 

 

 

 
INVESTMENT

1774.415

826.010

82.054
DEFERREX TAX ASSETS

447.318

730.340

743.178
 

 

 

 
CURRENT ASSETS, LOANS & ADVANCES

 

 

 
 
Inventories
2743.097
1837.332
1543.733
 
Sundry Debtors
4405.134
2830.571
2230.425
 
Cash & Bank Balances
356.686
2261.942
112.780
 
Other Current Assets
101.034
57.170
32.912
 
Loans & Advances
1075.196
757.797
727.155
Total Current Assets
8681.147
7744.812
4647.005
Less : CURRENT LIABILITIES & PROVISIONS
 
 

 
 
Current Liabilities
4320.335
3078.945
2001.932
 
Provisions
259.456
301.803
36.947
Total Current Liabilities
4579.791
3380.748
2038.879
Net Current Assets
4101.356
4364.064
2608.126
 

 

 

 
MISCELLANEOUS EXPENSES

0.000

0.000

0.000
 

 

 

 
TOTAL

12256.707

10283.193

6650.973

 

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005
Sales Turnover

12084.864

8590.110

7202.400
Other Income

308.852

176.407

100.900
Increase/ Decrease in Stock

372.355

135.714

167.100
Total Income

12766.071

8902.231

7470.400
 

 

 

 
Profit/(Loss) Before Tax

1294.065

691.539

322.200
Provision for Taxation

302.963

19.922

(1.700)
Profit/(Loss) After Tax

991.102

671.617

323.900
 

 

 

 

Earnings in Foreign Currency :

 

 

 

Export Earnings

3727.685

2690.775

0.000

Commission Earnings

0.000

0.000

0.000

Other Earnings

41.470

0.000

2103.681

Total Earnings

3769.155

2690.775

2103.681

 

 

 

 

Imports :

 

 

 

Raw Materials

2150.372

1864.531

0.000

Stores & Spares

0.000

0.000

0.000

Capital Goods

592.740

258.804

0.000

Others

0.000

0.000

998.145

Total Imports

2743.112

2123.335

998.145
 

 

 

 

Expenditures :

 

 

 

Cost of Materials Consumed, Purchases etc.

7902.624

5548.771

4460.300

Manufacturing Expenses

924.262

610.371

396.200
Payments to and provisions for employees

462.435

300.791

233.200
Selling and Distribution Expenses

899.514

622.135

1365.200
Administrative Expenses

311.820

267.143

7.500
Depreciation

0.000

0.000

220.000
Other Expenses

971.351

861.481

465.800
Total Expenditure

11472.006

8210.692

7148.200

 

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

1st Quarter

30.09.2007

2nd Quarter

31.03.2007

3rd Quarter

 

 

 

 

 Sales Turnover

3274.000

3292.600

4117.200

 Other Income

102.600

80.300

30.700

 Total Income

3376.600

3372.900

4147.900

 Total Expenditure

2732.500

2679.200

3297.400

 Operating Profit

644.100

693.700

850.500

 Interest

242.800

264.500

295.900

 Gross Profit

401.300

429.200

554.600

 Depreciation

91.900

95.200

102.000

 Tax

27.200

34.000

4.100

 Reported PAT

282.200

300.000

448.500

 

 

 

 

 

 

KEY RATIOS

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Debt Equity Ratio

1.72

1.48

1.08

Long Term Debt Equity Ratio

1.08

0.95

0.61

Current Ratio

1.30

1.46

1.40

TURNOVER RATIOS

 

 

 

Fixed Assets

2.11

1.92

1.48

Inventory

6.57

6.44

5.48

Debtors

4.16

4.29

3.74

Interest Cover Ratio

2.78

2.23

1.69

Operating Profit Margin (%)

15.52

12.46

14.00

Profit Before Interest and Tax Margin (%)

13.43

10.05

10.94

Cash Profit Margin (%)

8.67

7.79

7.55

Adjusted Net Profit Margin (%)

6.58

5.38

4.50

Return on Capital Employed (%)

17.95

12.96

12.58

Return on Net Worth (%)

29.39

18.64

15.68

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

HISTORY

 

Incorporated in December, 1986, subject was promoted by B H Jain. The company manufactures and supplies micro irrigation systems, which encompass irrigation through strip tubing, emitters, jets and mini-sprinklers. It also manufactures PVC foam / rigid sheets and polycarbonate sheets. Subject Overseas Limited is a subsidiary of the company.

 
The company's Biotech Tissue Culture is growing constantly and has created a brand image for BTC products, namely Banana Plants. Since the location of the company in banana belt is an added advantage it continues to invest in up gradation of its laboratories and also the expansion of its facilities. 


The company has a technical collaboration with RIS, Italy, to manufacture drip irrigation systems; and with Chapin Watermatios, US, for multi-chambered drip irrigation hoses with the brand name Turbulent Twinwall. A MoU has been signed with GE Plastics India (GEPI) to manufacture polycarbonate sheets. 


The drip irrigation method has a high efficiency of water usage (95%), compared to conventional methods (50%) and sprinkler irrigation systems (70%). The company has entered into a hitherto untapped area of large-scale commercial farming by implementing MIS in corporate agricultural projects. A new division for landscape irrigation for a golf course installation has been successfully completed. 

 

Growth in exports was mainly due to the addition of polycarbonate sheets. The company has bagged a prestigious order from GE Appliances, US, for supply of custom-moulded plastic parts. It has opened offices in the US for distribution of plastic sheets and irrigation components in North and South America. Plant tissue culture, greenhouses, seedling nurseries and liquid fertilizers are some of the green field projects being implemented by the company. It has also commenced manufacture of solar water heaters. 

 
The agri-irrigation products, plastic and PE piping system, dehydrated products divisions has received ISO 9001 certification. The merger between Jain processed foods Private Limited with the company was approved by the High Court. During 2002-03 the company has been selected along with six vendors who has been awarded GoAP APMI project. The Rs.12000 Millions project is to be implemented in 2 phases over a period of 2 years. Out of the seven vendors, subject has been allocated highest area of 36000 hectares in the Phase I of 135000 hectares. This project has been stabilized and is expected to continue at improved pace in the current year. 


May 2004 the company has decided to merge Gowtham Granites Private Limited (GGPL) with itself under the provisions of Sick Industrial Companies Act 1985 with effect from 1st January 2004. Since GGPL is a wholly owned subsidiary of the company the shares issued by GGPL to the company shall stand cancelled as a result of merger hence there is no share exchange ratio or impact of shareholding of the company post merger. 

 
The company decided to merge Terra Agro Technologies Limited (TATL), Coimbatore with itself with effect from 1st April 2005. According to the scheme of merger the company will issue 1 equity share to the shareholders of TATL for every 48 equity shares held by them in TATL. This scheme of merger is subject to necessary approvals. 

  
Subject has acquired the mango processing business from Parle Bisleri Private Limited during February 2006 for the total consideration of Rs.140.000 Millions as an on-going business. Through this acquisition, the company has acquired two mango processing facilities in South India and also subject has built capacity of about 58000-60000 tones of mango processing plants.

 

Milstones:

 

1937: Founder Mr. Bhavarlal Jain was born in the Village in Jalgaon District

1963: Began Trading with Rs. 7000 as seed capital

1978: Traded in agricultural inputes and equipments for first 15 years

1978: Trade in agricultural inputs and equipments for first 15 years

1980: Started manufacturing PVC Pipes for water conveyance in Farms

1986: Current flagship company, jain irrigation systems Limited was incorporated

1987:  Pioneered concept production and application of Micro irrigation

1989: Company made its maiden public issue of Rs. 30 million

1991: Company raised Rs. 540 millions through a right issue of partly convertible debentures

1992: Opened new frontier with production of Plastic Sheets

1994: Company made an offering of 2696600 European Depository Receipts representing 2696600 shares at price of US $ 11.125 per EDR which raised US$ 30 million.

1996: Ventured through its onion dehydration and fruit processing plants under 100 % EOU

1997: Group companies were restructured to bring about greater synergy

1997: From 1997 onwards company suffered financial distress and went into Restructuring and debt       rationalization

1999: Lenders approved Debt Restructuring Package based on LPMG Viability Study, Involving Rs. 4890 million

2002: Inducted strategic investor Aqua international LP a US Based private Equity fund and raised Rs. 1830 million through preferential allotment of Equity shares

2002: Jain processed Food private Limited was merged JISL and in December 2002 company sold PVC sheet manufacturing facility under a sale lease back transaction to GE plastics India Limited

2004: During December 03 and January 2004 Company raised

 

 

Operations: 
 
The sales and operating income have grown to Rs.12085.000 millions showing a 40% plus growth for the fourth year in succession. The domestic sales growth during the year was a shade under 40% at Rs.7956.000 millions. Export showed a slightly better 41.6% growth at Rs.4061.000 millions. The other operating income doubled to Rs.68.000 million. The other income has grown at 75% over the earlier year at Rs.309 million mainly on account of forex gains. The operating profit has grown 46% from Rs.1553.000 millions to Rs.2265 millions, reflecting better resource utilization. After providing for depreciation and amortization of Rs.314.000 millions and deferred tax liability of Rs.283.000 millions, current tax provision of Rs.8.000 millions and fringe benefit tax of Rs.12.000 millions, the profit for the year is reported at Rs.991.000 millions, showing a growth of almost 47.5% over the earlier year. 

 

Dividend: 
 
An amount of Rs.36.000 millions has to be paid out to Redeemable Preference shareholders as per coupon rate fixed on the preference shares and an amount of Rs.6.000 millions is the dividend tax payable on the said dividend. 
 
The Board recommends to the Shareholders for declaration at the ensuing AGM a dividend at Rs.2 per share to the Equity Shareholders. The said Equity dividend shall result in a cash outflow of Rs.132.000 millions and dividend tax payable on the said equity dividend will amount to Rs. 23.000 millions. 

 

 

Amalgamation of Eurissko Agro Limited: 

 
The Board proposed a Scheme at Arrangement with Eurissko Agro Limited, Pune including amalgamation on 1st September 2006 and the Court convened meetings were held on 25th January 2007. The High Court of Judicature at Bombay finally sanctioned the Scheme by an order dated 4th May 2007. The Company has allotted 270615 Equity Shares at Rs.  10 each as per the sanctioned scheme to eligible shareholders of Eurissko Agro Limited on 30th July 2007. The listing and trading permissions are being sought from the exchanges for the newly issued shares. The integration activities have started and the vegetable dehydration capacity of the Company stands increased from 10000 MT to 12500 MT as a result of this merger. 

 


Warrant Conversion, Capacity Expansion and FCCB Proceeds: 

 
The 3070000 Share Warrants of Rs.155 each issued to the select individuals of the Promoters' Group have been converted into Equity Shares at Rs.110 each for cash at premium at Rs.145 each by the holders of the warrants. An amount of Rs.427.000 millions was raised on conversion option being exercised by the holders. The amount has augmented the long term resources of the Company. 

 
The Company had successfully completed during the last year, an issue of $60 mn ZCCB, convertible into Equity Shares at a price of Rs.34559 per share. The proceeds of the issue have now been completely utilized for capital expenditure and acquisitions. The full year impact of some of these activities will be seen in FY 2008-09 operational results. 

 
It is pertinent to mention here that since end May 2007, little over 58% of the ZCCB issued have already been converted into Equity Shares at the fixed conversion price. This has resulted in issue of additional 4492601 Equity Shares of the Company. 

 


Further expansion and fund raising: 

 
The Company has further issued to select individuals at the Promoters Group, 2500000 Equity Warrants at Rs. 398.50 each with an option to convert each warrant into an Equity Share at Rs.10 each at a premium at Rs. 388.50 each within 18 months from date of allotment of the warrants. The proceeds of Rs. 100 million (10% security deposit) have been utilised for augmenting the long term resources of the Company. The balance inflow, it conversion option is exercised would be Rs.897.000 millions, Warrants have been issued under SEBI (DIP) guidelines for preferential issues. 

 
The Company has received underwriting commitments from some investment banks for long term External Commercial Borrowings to the extent of $50 million (Rs.2,050 million at present exchange rates) to support its next phase of capacity expansion. New capacities will partly came on stream during the last quarter FY 2007-08 and the full impact will be seen in FY 2008-09. Loan funds will he in place by September 2007. Similarly, the Company has firmed up plans to strengthen the production capacity and long term resources of recently acquired companies by committing additional funding/capital expenditure of $15 million in the next 06-09 months. Plans are in place to raise the resources with an international finance agency thru the debt route soon. 

 

 

Overseas acquisitions and operations of subsidiaries:


The Company has taken major steps during the year under review to achieve its long term objective of being amongst the top 3 companies in the world in each of the business segments it operates in. 

 
Thus with acquisition of controlling stake in Cascade Specialities Inc. based in Oregon, USA, the Company has become the third largest anion dehydrator in the world with a (end product) capacity of 25,000 MTPA. While the acquisition was completed towards end CY2006 the integration of the operations has begun in right earnest between the management teams in both countries.

 
In February 2007, the Company thru its US based subsidiary, acquired 100% control of Aquarius Brands Inc. California, USA, a 35 year old Company engaged in micro irrigation systems for agriculture, landscape and nursery with brands like API, PEPCO and Acu-Orip etc. The Company also has about 1,000 dealers network. The acquisition together with Watertown based Chapin Watermatics Inc. (acquired in April 2006) gives a strong foothold to the Company in the largest market for micro and sprinkler irrigation products in the world. 

 
In May 2007 the Company acquired joint control of the 70 year old Naandan Irrigation Systems C.S. Ltd., one of the pioneers of Drip and Sprinkler technology with worldwide manufacturing plants in USA, Spain, Mexico, Brazil, Chile and Australia besides the Israel based production facilities. The said Company has distribution arrangements in 70 countries of the world. This acquisition has catapulted the Company to a proud 2nd spot in the micro and sprinkler irrigation industry on a global basis. 

 
These acquisitions will provide access to global markets for the Company's products as well as bring additional product lines to improve the product portfolio in the domestic markets. In addition, the Company, with low cost skilled engineers, shall be able to participate in turnkey agricultural contracts in the developed and developing world. 
 
The Company has plans to revamp and restructure its overseas investment and holding structure. In the first phase, a Netherlands based Jain Overseas B.V. has been incorporated as a wholly owned subsidiary during the current calendar year, via JISL Overseas Limited, Mauritius. Subsequently, in the final phase the plan is to take into account the fiscal and cash flow considerations of the relevant jurisdiction and to finalise the ultimate holding structure. 
 
JISL Overseas Limited, the Mauritius based subsidiary has earned a profit of $155,287 for the year ended 31st March, 2007. More information about the subsidiary's performance is available in the brief audited financial statements of the subsidiary for the year ended 31st March, 2007 elsewhere in the Annual Report. The Company has further strengthened the capital resources of the subsidiary by remitting a sum of $21 million towards its capital contribution. After the year end, a further sum of $ 22.1 million has been invested as capital loan in Mauritius based JISL Overseas Limited for completing the investment acquisition in Naandan JV. 

 
The Second generation subsidiaries based in UK and USA are continuing their efforts to generate sales for the group companies and are supporting the growth efforts of the Company generally. 

 

 

Directors retiring and their background: 

 
Mr. A.R. Barwe and Mr. R.B. Jain are retiring by rotation and being eligible offer themselves for reappointment at the ensuing AGM. In terms of the Corporate Governance requirements given below are the brief resume of each of the retiring directors.

 
Mr. Anirudha R. Barwe (independent) is a Director and Chairman of the Audit Committee. He holds a graduate degree in Mathematics and is an associate of the Indian Institute of Bankers in Mumbai. He started his career as a lecturer in Northern Maharashtra in 1960 and was a Probationary Officer of State Bank of India (SBI) in 1961. He held several important positions within State Bank of India and in 1996 was named Managing Director of SBI Capital Markets Limited. Mr. Anirudha Barwe has also hold Directorships in various subsidiaries of SBI and stock exchanges such as NSE and OTCEI. Until recently, he held the position of Chief Financial Officer of IDFC Limited. He is currently advising a number of entities including foreign bodies in the financial field and is member Government economic committees and other listed company boards. 

 
Mr. R.B. Jain is a Director, in charge of the technical area of the food processing division. He graduated with a B.Tech (Hons.) from IIT in Chemical Engineering in 1978 and since then he has been associated with the Group. He has been the key person for major technical developments in almost all the industrial ventures. In 1978-1979, he was associated with Papain manufacturing and was responsible for developing the refining process. In 198 1, he was in charge of the development of PVC pipes. During the period from 1987 to 1993, he was Managing Director and helped establish foundation of drip irrigation division. Since 1994, he has been in charge of Agro Processing Activities. 

 

 

Technology Absorption: 

 
 i) Plastic Park:

 
Introduction of state of the art, high output extruders and moulding machines enhanced productivity and reduced energy consumption. The technology of manufacturing large diameter polyethylene pipes was developed and commercial sales of pipes of 1 meter diameter commenced during the year. 

 
 ii) Food Park:

 
The technology developed for processing of pomegranates into clarified pomegranate juice concentrate has been commercially stabilized and the Company is now producing internationally acceptable quality pomegranate juice concentrate. Company has also developed in-house technology to separate pomegranate arils from frozen pomegranate fruit. Company has developed in-house technology to make clarified juice concentrates of all the pulpy fruits such as Mango, Banana and Guava. 

 

 

Research and Development: 

 
 i) Patent application: 

 
A new product 'Sure Lock Plus' was developed for PVC piping division and a patent for the same has been applied and has been allocated application/registration number. 

 

A new product 'Snap Fit Pipe Joint' has been developed. It is a novel pipe joining system for use in sewer pipe systems carrying fluids under gravity. The joint is based on a snap-fit principle whereby two pipes whose ends are specially profiled can snap fit together by application of axial force. This finds application in joining plastic sewage pipes especially in rehabilitation of sewer lines. They have applied for the patent for this innovative pipe joint and have been allocated an application I registration number. 

 

ii) New Developments: 

 
They have been working on varietal identification of fruits and vegetable crops viz., Mango, Aonla, Pomegranate and Onion. 

 
Mango- Authentication of different varieties of Mango like Alphanso, Totapuri, Ratna, Kesar etc. has been done by Rapid Amplified Polymorphic DNA profile. 

 
Pomegranate- Elite varieties have been collected from areas of Maharashtra, Himachal Pradesh in India and also from abroad. The germplasm has been maintained at Jain Hill. By using molecular biology DNA fingerprinting different germplasm like G817011, Arakta, Mridula and Bhagawa have been identified and will be useful for parental lines for hybrid varieties.

 
Onion- DNA fingerprinting is done to find out the hybrid varieties of onion which have high TSS value. The parental lines for varieties of onion have been identified as a marker for further use. Hybrid varieties of onion have been multiplied by micro propagation for a large number of plants. Micro bulb from tissue culture has been developed and adopted the commercialized multiplication of onion sets for farmers. Commercialisation of the mini sprinkler on onion and other vegetable crops has been successfully done for better economics and higher yield. Project of cloning and sequencing of Banana Bunchy Top Virus gene for making disease resistant variety.

 

 

 

 

MANAGEMENT DISCUSSION AND ANALYSIS: 

 
Indian economy is on a sustained uptrend with GDP growth rate hovering around 9% for the last three years, with 2006-07 witnessing a 9.2% growth in GDP. Increased international competitiveness, increased pace of capital formation across sectors, rising domestic demand are all contributing to such sustained growth. The double digit GDP growth estimates for the 11th five year plan appear achievable. While on the one hand the strong capital expenditure momentum and reasonably high business confidence justify the growth aspirations, on the other, the rising oil prices, rising inflation, appreciating local currency and interest rates remain a cause of concern. 

 
Agriculture in 2006-07 according to Government estimates had grown by only 2.7%. The major reasons for such a poor performance were low investment, low water use efficiency, imbalance in fertilizer use, distorted incentive system and low post harvest value addition. The poor agricultural growth can lead to problems in price stability and supply side concerns in essential commodities. The Economic Survey has called for an inclusive growth in the economy which implies that a large population should participate in the growth. With just under 60% of the population engaged/dependent on agriculture, they share less than 20% of the output in terms of value, causing a grave imbalance. This imbalance can only be set right by following policies centered around the rural and agriculture population. While there is good intent in the Government to improve rural/agricultural economy, execution is tardy and beneficiaries at the bottom of the pyramid are hardly getting any benefits. Revival of this sector will require significantly higher resource allocation and an integrated development plan which will incorporate a holistic view of all round development.

 
The Company's overall business prospects are significantly integrated to the agriculture economy generally and horticulture sector in particular. The movements in the overall industrial economy and the external sector also have a significant effect and the business of the Company. Thus the Company's performance is subject to seasonality in the agriculture sector, and also dependent on Government policies at both Central and state level. To offset the risks of the agricultural sector the Company has built a diversified portfolio of industrial products. 


 
Overview of Business: 

 
The Company is one of India's agri-business companies, operating in diverse but integrated segments of the agri-business value chain. The Company is one of India's largest manufacturers of irrigation systems, polyethylene pipes and plastic sheets and now also the largest mango processor in the country. 

 
The Company's product range includes Micro Irrigation Systems ('MIS') consisting of drip and sprinkler irrigation systems; Piping Systems consisting of PVC pipe and polyethylene ('PE') pipe products- Plastic Sheets consisting of PVC sheet and polycarbonate ('PC') sheet products; Agro-Processed Products consisting of dehydrated onion and processed fruit purees and concentrates; and other products such as agricultural tissue culture and Solar Water Heater and Solar Lighting Systems. 

 
Strategy: 

 
The Company's primary business strategy is to increase the manufacturing capacities in each of the respective business lines to compete in the global market, through increased focus on cost-competitive and high quality manufacturing, commitment to R&D and penetrating new markets in India and the rest of the world. The principal elements of this strategy are: 

 

Growing the business organically and through select strategic partnerships and mergers and acquisitions:  

 
The aim of the Company is to be among the top three global players in each of its major business segments such as Micro Irrigation Systems, Plastic Sheets and Agro-Processed Products. In addition to organic growth, the Company will evaluate on a case-by-case basis potential acquisition targets that offer an opportunity to grow the business, production capacity and/or expand its capabilities or geographic reach. The Company intends to pursue those acquisitions that are related to its key strengths, are synergistic and in its assessment, have manageable integration risks. The Company may also enter into strategic partnerships with leading overseas manufacturers and distributors of similar products with coverage in markets where the Company is presently under-represented. 

 
Focusing an agri-supply chain:


The plan is to sell products and services at various levels of the agri-supply chain, leveraging the existing strong brand in India and established domestic and international distribution networks. For example, for the domestic farming customers the Company plans to provide an integrated 'full service' product offering assistance to them at every step of their crop growing cycle with products and services which are synergistic with the current products of the Company. The Company plans to help its customers to improve their crop yield such as, through Micro Irrigation Systems and higher quality planting material like the selected high yielding and hybrid onion varieties presently supplied to its contract farmers. 

 
The Company also plans to work with its customers to take their agricultural projects from conception to completion on a turnkey basis, providing services such as engineering, soil and water analysis, water resource estimation, crop planning, irrigation and fertigation scheduling, marketing assistance and other agronomical support. The Company believes that these activities are also complimentary to and synergistic with the vegetable and fruit dehydration and processing activities downstream in the agri-supply chain. The Company intends to achieve further vertical integration of its activities in the agri-supply chain such as through -expanded upstream contract farming arrangements to support the downstream Agro-Processed Products business. 

 


Expanding into new growth products and markets:

 
The Company will continue to expand its product range with new and innovative products in areas such as PVC window and door profiles and other building products made from PVC Sheets which are believed to have a cost advantage over traditional wooden (lumber) products. The Company also plans to further penetrate the urban and commercial applications for its PVC Piping Systems, focusing on India's increasing need for housing, sewerage, water supply, telecommunications and other infrastructure. The Company plans to enhance its distribution reach by adding new dealers and distributors to penetrate into new domestic and international markets, particularly in Africa, the Middle East and the East and West coasts of the US. Furthermore, there are plans to foster strategic alliances with global players so as to have access to their distribution reach for marketing the Company's products. 

 


Maintaining cost competitiveness:

 
The Company seeks to be a cost-competitive high-quality producer and is focused on maintaining its cost competitiveness in the domestic and international markets. There are plans to further increase productivity and production while reducing costs by continuing to invest in new equipment, improving the material management system to minimize wastage and production losses, improving the working capital cycle to reduce the interest costs, refinancing the higher cost debt with lower interest debt and exploring ways to use the solid waste produced by our food processing facilities to generate electricity etc. Since 2004, The Company has engaged in contract farming, whereby it sources the raw materials for its onion dehydration business by buying-back onions at pre-determined prices from over 1,700 farmers, covering approximately 2,600 acres of farm land. The Company provides such farmers with various agricultural inputs and services. 

 

 

Key Products

 

A brief synopsis of their products and their application is provided in the table below:

 

Product

Product Use and Applications

Brand Name

Drip Irrigation Systems

Farm Irrigation and Landscape

Jain Drip

Sprinkler Irrigation Systems

Farm Irrigation and Landscape

Jain Sprinkler

PVC Pipes

Water Supply, Farm Irrigation, Plumbing, Cable ducting

Jain Pipe

 

High Density Polyethylene ("PE") Pipes

Water, Sewerage, Effluents, Cable ducting, Gas distribution

Jain PE Pipe

 

PVC Sheets – Free Foam

 

– Integral Foam

 

– Rigid

 

 

 

Poly Carbonate (PC) Sheets

PC Compact

      PC Corrugated

 

 

Trim boards, display boards, sign boards, banners

Marine industry, advertising, signs boards, interior designs

Industrial applications, partitions, interior designs

 

 

Building, construction, transport, advertising

Greenhouses, stadium and industrial roofing

Ex-cel

 

 

 

 

 

 

 

Ex-cel

 

Dehydrated Onions

 

Processed food, soups, recipes, salads, retail

 

Farm Fresh

 

Fruit Puree and Concentrates

 

Juices, baby foods, confectionary

 

Farm Fresh

 

Tissue Culture Plants

 

Agriculture plantation

 

Jain Tissue Culture

 

Solar Water Heating and Solar Photo-voltaic

Domestic and industrial uses, Hospitals, Dairies

Jain Sun Watt and

Jain Jyot

 

 

Corporate Structure:

 

JISL Overseas Limited is a wholly owned subsidiary of the Company and was incorporated in 1994 under the laws of Mauritius. JISL Overseas Limited acts as a holding company for the overseas subsidiaries and all of the overseas subsidiaries are directly held by JISL Overseas Limited For the year ended 31st March, 2007, JISL Overseas had share capital of approximately US$39.65 million out of which $21 mn was infused in the year FY 2006-07. The said Company had a profit of $155,287 for the year ended 31st March, 2007. 

 
Jain (Americas) Inc. is a wholly owned subsidiary of the Company and was incorporated in 1994, under the laws of Ohio, US. It is our key marketing and distribution arm in the United States. For the year ended 31st March, 2007, Jain (Americas) Inc. had sales of US$26.14 million. The paid in capital was $30.22 mn on 31st March, 2007. 
 
Jain (Europe) Limited is a wholly owned subsidiary of the Company and was incorporated in 1996, under English laws. Jain (Europe) Ltd. is our key marketing and distribution arm in the UK and other European countries. For the year ended 31st March, 2007, Jain (Europe) Limited had sales of GBP 14.21 mn while its Capital stood at GBP 4.1 mn at the end of 31st March, 2007. 

 
Chapin Watermatics Inc. is a wholly owned subsidiary of the Company thru the Jain Americas Inc. Chapin is engaged in drip tape manufacturing and distribution business based in Watertown near New York. The Company has reported revenue of $8.6 mn in the 10 month period to March 2007 after its acquisition in May 2006, while it’s paid in capital is $2.5 mn. Chapin was valued at just under $6.8 mn at the time of acquisition and the acquisition was financed with the proceeds of ZCCB issue made by the Company in March 2006. 

 
Cascade Specialities Inc. is owned to the extent of 65% by the Company thru the Jain (Americas) Inc. It is engaged in onion and vegetable dehydration business with specialization in natural low bacteria and organic dehydrated products. The revenues for 3 months ended in March 2007 were 2.37 mn, the paid in capital is $7.9 mn. Cascade Specialities was valued at $ around $7.6 mn at the time of acquisition. The acquisition was financed with the proceeds of ZCCB issue made by the Company in March 2006. The Company has a right to acquire over the next 5 years remaining equity from other shareholders at an agreed EBIDTA multiple each year. 

 
NuCdear Mills Inc. is a start up venture engaged in the manufacture of PVG sidings thru a patentable product for the home building market in USA. The Company had a paid in capital of $ 1.1 mn and it will start commercial production in 2007-08. 

 
The acquisition was financed with the proceeds of ZCCB issue made by the Company in March 2006. The total capital infusion in form of equity & debthas was $3.1 mn. USD. 

 
Aquarius Brands Inc. is a California based manufacturer of drip irrigation systems for agriculture landscape and nursery applications and is a wholly owned subsidiary of the Company thru the Jain Irrigation Inc. In just under 2 months of ownership by the Company the said company has achieved a sales level of $4.7 mn, while the paid in capital was $21.5 mn at the end of 31st March, 2007. The acquisition was part financed with the proceeds of ZCCB issue and partly by means of long term debt. 

 

 

Competitive Strengths: 

 
The Company believes that the following are its principal competitive strengths to successfully execute the earlier mentioned strategy. 

 


Jain Irrigation is one of India's leading manufacturers of Micro Irrigation Systems, Piping Systems, Plastic Sheets and Agro-Processed Products. Since the Company commenced operations in 1986, it has built an extensive distribution network throughout semi-urban and rural India, selling flagship brands such as Jain Pipe and Jain Drip, which are well-known in the domestic markets. Company's MIS products are customized to assist in meeting the special requirements of its domestic customers. Management believes that the Company's strong brand, leading market position and understanding of the customers' needs, makes it well-placed to capitalize on growth opportunities in the domestic markets for its products. Formation of Jain Irrigation was preceded with other group companies that dealt with agriculture since 1963. Thus, there is 44 years of a strong relationship and mutual warmth with the larger agricultural community. 

 

 


Management believes that the flexibility and scalability of the Company's existing production facilities will help it meet increased demand for its products. The scalability of the Company's existing facilities enables it to increase its production capacity through the installation of new equipment and production lines. For example, the Company can increase the capacity to produce our PVC/PE pipes and Plastic Sheets by upgrading critical equipment such as scrows/barrels and gear boxes, or if greater capacity enhancement is required, by adding new extruders. The Company's flexible manufacturing facilities enable it to produce a wide range of products with different specifications, such as PVC I PE pipes with different diameters and working pressure ranges and processed and dehydrated fruits and vegetables using different organic feedstock. This flexibility assists the Company in meeting the specific demands of its customers and reducing the impact of seasonal changes in production volumes for specific products such as the Agro-Processed Products and Piping Systems. The ability to expand production across product streams is demonstrated by the achievements in the past 48 months in which Company has increased its PE pipe capacity, more than six times to 57,324 tons as of 31st March, 2007 from 8,676 tons as of 31 st March, 2003. It increased the PVC sheet capacity by almost 41/2 times to 36,300 tons from 7,735 tons as of 31st March, 2003 and it increased the PVC pipe capacity by 136% to 85,015 tons as of 31st March, 2007 from 35,600 tons as of 31st March, 2005. The Company plans to continue this aggressive capacity build up in current and coming year so as to maintain substantial organic growth across most of the divisions. 

 

 

 

The Company's modern, large-scale production facilities, the centralization of its plastics manufacturing facilities in Jalgaon, India, the increasing decentralization of the food processing and dehydration facilities throughout India, closer to the growing regions for the raw material and efficient working capital management, make the Company a cost competitive manufacturer of various products. While the Company is committed to maintaining international quality standards for all its products, the success in meeting the quality requirements of the international customers is demonstrated by the Company's increasing export sales. The overall export sales increased by 41% to Rs.4060.000 Millions in fiscal 2007. The Company's plastic processing, onion dehydration, fruit processing activities, tissue culture activities and solar division had achieved ISO 9001 certification. The Company's plastics processing was certified under ISO 14001-2004 Environment Management System certification by TUV NORD Germany in 2005-06. 

 

 

 
With an aggregate of 35 years experience in the plastics manufacturing, fruit and vegetable dehydration and/or fruit processing industries, the Company's senior management team has deep experience in the industries in which it operates. 

 
The Chairman, Mr. B.H. Jain is the founder and is acknowledged as one of the pioneers of micro irrigation in India. The experience of the Company's management team in international markets will help it increase the penetration of strategically selected countries and expand the range of its product offerings in existing export markets. The management team also has long-standing relationships with many of the major customers, distributors/dealers and suppliers. Further, the Company has a strong local sales force, which together with the management team gives the Company a deep understanding of the needs of the domestic customers. 

 

 

 

Although the Company's business and its prospects are significantly integrated with the Indian agricultural sector, the Company also derives a significant portion of its revenue from non-agricultural sources, such as from sales of piping systems to commercial, industrial and government customers, and sales of PVC sheets to the home building construction industry. In fiscal 2007, the Company derived a little over 49% of its revenues from non-agricultural sources. The revenues are further diversified across the wide range of products sold. This diversification can help insulate the overall sales and operations from adverse conditions affecting any one of the business segments or products. 

 

 

Overview of Segments: 

 
High-Tech Agri Input Products: 

 
The segment comprises of Micro and Sprinkler irrigation systems, PVC Pipes, bio tech tissue culture and other agri inputs. The segment has gown at almost 55% over the previous year at Rs. 6136 million. The main growth engine was the MIS/SIS business at a robust 75% growth. The segment profit has grown by an impressive 75% over the earlier year's level, while the capital employed grew at a little over 62% reflecting the creation of additional capacities during the year. 

 


Micro and sprinkler irrigation: 

 


The industry is broadly divided into the organized and unorganized segments in the country. The Company is the largest player in the organized sector. In view of the involvement of a large number of components in a system, all of which are not available with a single manufacturer, it is difficult to hazard a guess about the exact size of the industry as most of the figures are derived on the basis of information available from different sources. While the Company controls 55% of the Micro Irrigation business in the country, it has a market share of 35% in the Sprinkler irrigation business in the country. The current estimate of industry size is Rs.7 bn. currently only about 1.6mn Ha of possible 70 mn Ha are covered under the micro and sprinkler irrigation in the country. However, as per Government task force 17mn Ha of land can be easily brought under micro irrigation coverage in the country in the near future, say by 2011-12. 


The world over the MIS/SIS industry is undergoing a consolidation phase with M and A activity at its highest in the last 30 years or so. The Company has now got a firm foothold in the mature North American market with two significant acquisitions to gain a 10% market share. The JV with Naandan gives it strategic access to markets the world over, specially in Europe, South America, Australia and ME Asian countries, while it faces a demand explosion in the fastest growing Indian market. 

 

 

 
While the tonnage of the business has grown by a respectable 63% compared to the earlier year, 8% increased realizations led to growth in revenue terms at 75%. The business contributes a little over 30% of the Company's turnover. The division has been growing at a CAR of 63% plus on the back of projects in the States of Andhra Pradesh, Gujarat, Tamil Nadu and the philip provided by Maharashtra continues. The business added 9,185 MT of capacity during the year under review, while Fixed Assets addition was to the tune of Rs. 438 million.

 

 


Almost 60% of the arable land in the country is still rain fed. The Government (Central and State) provide 50% capital subsidy for promoting the use of Micro Irrigation by farmers The Task Force on Micro Irrigation had in 2003 recommended Rs.307 bn over a 5 year period of the XI five year plan, resulting in a business opportunity of Rs.61 5 bn over the period. The central government allocation for FY 2007-08 was pegged at Rs.6.9 bn. While targeting an agriculture growth of 4% per annum the government had also placed higher targets for farm credit and agriculture investments at 2% plus of the GOP for the XI plan period. 

 

 

 
The implementation of the Task Force on Micro Irrigation has started in right earnest in Andhra Pradesh, Gujarat, Tamil Nadu while the retail sales in Maharashtra continue to grow at a steady pace. Even assuming partial initiatives out of the measures in the above para, the industry has potential to grow from the present Rs.7 bn to Rs.20 bn i.e. almost 3 fold in the next 2-3 years. Hence, the outlook for the medium term for the industry is excellent. However, the growth in markets is very much dependent on Government policies and release of capital subsidy etc., in the short term. The growth in industry will need a large pool of trained sales people and a dedicated dealer network in the far flung areas of the country. The uneven distribution of rainfall in the country and fluctuations in the polymer prices are constant threats faced by the industry. 

 
PVC Piping: 

 


The Indian plastic industry uses almost 6 mn MT of resins as per a recent industry estimate. Out of this more than 71% is accounted for by extrusion of pipes, profiles and films. Out of the 4.3mn MT of extrusion capacity about a fifth (0.817 mn MT) is comprised of pipe extrusion. The industry is fragmented and scattered near the user belts in the country. A large part of the industry is unorganized, being small and medium scale in nature.

 

However, there are 3 major players in the organized sector and the Company is one of the players in the organized market with a 15 % share. In addition increased micro irrigation spends, push for urban infrastructure by government agencies, and Command Area Development Programme will improve the demand situation for the industry. 
 

 

 
This business contributed just under 19% revenue for the Company. While the business has grown at a steady 29% in revenues, the realizations were steady showing a marginal 1% growth, while the tonnage grew at a steady 27% to reach just under 46,000 MT. The business added 32,685 MT of capacity during the year under review, while the Fixed Assets addition was to the tune of Rs. 97 million. 

 

 

 

 
While the expansion of capacity undertaken last fiscal year is complete, in view of increased budgetary allocation from government, demand is expected to significantly increase over the medium term. Hence the Company has again decided to enhance the capacity by another 42,500 MT per annum, the full effect of which will he observed in FY2008-09. In a full year's operation the investment would generate Rs.2.3 bn of incremental revenues. 

 

 
While the government infrastructure spends are increasing all the time, the government programmes for safe drinking water, rural sanitation, integrated watershed management programme etc. are expected to generate substantial demand for piping products. Further in view of the housing and construction boom in the country, there are plans to start a complete range of PVC SWR pipes and moulded fittings to strengthen the product portfolio in the current year (2007-08) ' Additionally, the current year two more production centers would be established in the north part of country and in Tamil Nadu to move closer to demand centers. Of the Rs.630 bn reserved for urban infrastructure projects in the XIth five year plan, a large part is towards irrigation and drinking water supply. Delays in government decision/spending and prices of PVC resin are the potential threats to the otherwise rosy picture for the future of the industry. 

 


Biotech Tissue Culture: 

 

The industry is broadly divided into two segments: 

 
(1) Fruits and vegetables and

(2) Plants and flowers. 

 
The industry is not organized although some big names did start forays in this industry in the mid 1990's. Most of the players are engaged in tissue culture for cut flower exports, where the model of business is quite different. The Company started with banana as the main crop for tissue culture and the efforts have really paid off. The industry is still growing at an estimated 25% per annum. 

 

 
The sales in business crossed Rs.100 million for the first time during the year, reflecting a 51% growth over the previous year. The quantity increase at 9.4 mn plantlets contributed 47% of the growth while 3% increase in price realization was achieved during the year. 

 

 
The outlook continues to he excellent and demand shows improved offtake in the coming season. Now, many State Governments are evincing keen interest in promoting tissue culture. The Company has opportunity to diversify the business and produce ornamental and other fruit plants. There is also an export potential to other Asian countries which can he tapped. 

 

 
The focus has shifted on research and development during the year under review and geographical expansion into suitable parts of the country specially for Banana. Lack of skilled work force and the risk of legal problems in case of non-performance of the planting material in the farmer's field are the major challenges facing the business. 

 

 

Industrial Products: 

 
The segment business includes the varied business lines like PVC Sheets, Polycarbonate Sheets, PE pipes for industrial applications, Fruit processing, and onion and vegetable dehydration. Business in this segment has grown at just under 29% over the earlier year's level at Rs.5948 million. The major growth came from the fruit processing business at a whopping 102% level backed by a good Mango season and additional revenue from Pomegranate processing. The segment profit has grown by just under 7% over the earlier year's level, while the capital employed grew at a little over 24% reflecting the creation of additional capacities during the year. 

 
PVC Sheets: 

 

 
The PVC sheets industry is operating worldwide and has many players. When further divided into the market by application, the product is used in signage, display, insulation, marine and construction sectors. Of late, the most promising application has emerged in the area of lumber replacement.

 

Thus, trim board, bead board, bead sheet and extruded profiles find applications in windows, siding, roofing and fencing. The US market for trims 03.51:m) and siding ($12bn) alone provides a challenging opportunity for revenues. Lumber applications are equally relevant for new homes as well as for remodeling existing homes. The estimated market share of the Company in the market is close to 20% at present.  

 

 
The business reflected a deceleration in rate of growth from CAGR of over 50% plus and has grown only 25% over the previous year's level. While the tonnage has grown by 16% the realizations have increased 8% during the year under review. The business added 8,300 MT of capacity during the year under review, while Fixed Assets addition was to the tune of Rs.180 million.

 

 
While the US accounts for 65% of the revenues of the Company for this business, Europe accounts for nearly 30% of the revenues while all other countries contribute 5% of the revenues for the business. The Company has acquired a controlling stake in one of the downstream end users for the products of this business and hence has diversified its risk basket for the business. This is expected to increase demand for sheet products annually from FY 2008-09. The signage market is growing at a steady 5% pace per annum and is expected to grow similarly in the short and medium term. In view of the advent of digital printed sign boards, the Company's stringent quality system delivers excellent quality digital print on sheets. The Company hopes to expand its reach and customer base in the advanced countries by entering the cut to size and OEM (high guage) segments. The outlook for the housing market remains bleak for the next 18 months or so.

 

The only silver lining is the remodellers who are expected to provide value proposition in the upgradation of their existing homes. 

 

 

 
The threat to signage is the electronic signage developments but it would happen over a longer time as costs are prohibitive and a big deterrent to this shift at present. Low cost competition from China is also a threat.

The current slow down in the new home sales will impact this business. With diversified product range and applications the growth of the Company's business is not expected to be significantly impacted. However, the players who ride this downturn in a better shape will emerge stronger when the tide turns next time to convert the business opportunity into improved top lines and bottom lines. 

 

PC Sheets: 

 

 

PC sheets have multiple applications like building and construction, advertising signs and displays, transportation, greenhouses and security applications. While GE India Industrial Private Limited markets the products in the Asia Pacific region (including India but excluding Australia and New Zealand), the Company caters to its customers across the western world.

While there are not many domestic players as raw material is tightly controlled, the export market is driven by the 3 big players internationally. 

 

 
The business has grown marginally at 6% over the previous year's level on the back of 12% tonnage growth while the realizations suffered 5% decline in this business due to reduction in PC raw material prices world over. 

 

 
The construction boom in the world and specially in Asia Pacific markets augurs well for demand growth for the PC sheet products. The business is very small in size given the overall business volumes on a corporate basis and the Company operates the facility for GE. While it is learnt that GE Plastics is under a possible takeover by ME Asian entity, the arrangements with GE are to expire at the end of current calendar year. However there are strong indications that the arrangements would not only continue but will got enhanced in terms of size and investments.

 

 
The Company is working on new product development for the domestic and export markets. These products will create new market opportunities other than construction market for the Company. Resin prices seem to have settled down at current level and are expected to remain stable at this level for the next one year or so. 

 


PE Piping: 

 

 

The applications of PE pipes have grown at a very fast pace and yet new applications are being developed for the product. Due to tougher environmental laws and stricter application of the same, the replacement of cementimetal pipes by PE pipes is very relevant. Especially since the development of the extrusion process for larger diameter PE pipes, the possibilities are huge. The Company's presence in gas and cable duct segments of the PE pipe business is commanding and hence the overall industry share is 30%. The Company is operating in all segments of the industry like cable duct, sprinklers, gas distribution, water conveyance, house service connection, sand stowing, dust suppression etc. 

 

 
This business saw a marginal 4% growth in revenues over the last year's level reflecting a phase of consolidation in the industry. While the tonnage went down by 8% the price realizations saw an increase of nearly 13% over the earlier year's level. However, with all user industries like telecom, gas, water and sewerage having good plans for growth and capital expenditure, the future is very bright for this business. The business added 16,204 MT of capacity during the year under review, while Fixed Assets addition was to the tune of Rs.88 million. 

 

 
The Company has signed large continuous supply contracts with multinational companies for supply all over the world as a preferred supplier and the revenues in the first year of operation are very encouraging. The massive infrastructure projects undertaken under the Bharat Nirman Yojana, increased investments by telecommunication industry and plans for piped gas in cities are all potential demand drivers for the industry. Mahanagar Gas Limited, Indraprastha Gas Limited, Gujarat State Petrochemicals Limited, Petronet LNG Limited etc., is all growing their gas distribution plans.

 

The natural gas production at 95 mn cubic meters per day is expected to double to 190 mn cubic mtrs per day by 2009 as per the estimates of Ministry of Petroleum and Natural Gas. On the telecom side, in view of the ever expanding market, the government is expected to release additional spectrum for normal as well as 3G and 4G applications. The demand for next 18 months is expected to be around 250,000 kms of duct pipes. In water transmission and distribution business there are about 183 firms registered with BIS, only 5 are national players and Jain Irrigation is the only player to manufacture 1000 mm and above dia pipes. About 12 firms are registered with BIS for HOPE pipes for sewerage applications but again Jain Irrigation is the only player to manufacture 1000 mm and above dia pipes for sewerage applications. 

 

 
The capacity expansion undertaken earlier has been completed. Continued implementation by Government for schemes like Bharat Nirman Yojana, Swajaldhara Yojana etc., supplemented by drinking water distribution and telecommunication demand are the major growth drivers in the medium term.

 

Anticipating the demand growth the Company is in the midst of another capacity expansion plan. The unstable raw material prices and business cycles of the end users and delay in implementation of projects are major risks faced by the business segment. 

 

Onion and vegetable dehydration: 

 

 
Total capacity of Indian onion dehydrators is today second to USA. The Company is a large player and accounts for upwards of 40% of share in export of dehydrated vegetables from the country. Most of the domestic industry is unorganized. Unorganized producers supply semi-finished products in crude form, that many buyers in the EU and USA further process to make the finished products. The Company has an edge over unorganized producers because of backward linkages in seed production I distribution, contract farming, and its ability to supply processed finished products, ready to be used in the finished products of customers. Almost all big users of dehydrated onion in the world are either the customers of the Company or they are in the process of becoming customers soon. With the acquisition of controlling stake in Cascade Specialties Inc., the Company has also established its manufacturing presence in the USA, the world's biggest market for dehydrated onion. As the US market is protected by tariff barriers, having a production base in the country allows the Company to have access to that market as a local producer. Because of the location advantage, Cascade Specialties also specializes in production of naturally produced low microbiology laden products, which are in great demand from flavor and seasoning companies. Ability to produce large quantity of low micro products gives the Company an edge over all other competitors in USA and outside, who are unable to produce large quantities of natural low micro products. Cascade Specialties 'is also the only producer of organic dehydrated onions in the USA. 

 

 
The business has grown at an impressive 42% over the earlier year's level backed by a 31% quantity growth at just under 8,000 MT, while the appreciating rupee has impacted the realizations to some extent. Although The Company managed to get improved realization, the appreciation in the Rupee had an adverse impact to some extent. The Company achieved less than projected growth in sale and profitability due to general crop shortage in the country which resulted in shortfall in material available for dehydration as well. High raw onion prices between January and March 2007 impacted the margins significantly. The business added 7,060 MT of capacity during the year under review, while Fixed Assets addition was to the tune of Rs.237 million. In addition, to maintain very important food specific certifications, the, Company's two plants at Jalgaon and Baroda secured the renewal of ISO 9001:2000, HACCP and obtained ISO 22000, FSMS, BRC Global Standard food certifications during the year under review. The Jalgaon plant also secured EUREGAP's control points and compliance criteria for fruits and vegetables certification during the year under review. The Company is member of SGF, Germany.

 

 
Worldwide Onion dehydration industry is estimated to be around I 75,000mt.The industry is growing globally at 7-8% per annum. The Company now has capacity to produce approximately 25,000mt per annum of finished products between its three plants in two countries. This makes the Company the third largest dehydrated onion producer in the world. The acquisition of controlling stake in Cascade Specialties Inc., USA has further opened up the global customer base for the Company's products. The Company has rationalized the production process in India at 2 locations from 5 locations in earlier years, improving the efficiency and overhead absorption. The Company has also started making improvements in its plant in the USA by capacity expansion and operational improvements. Demand for naturally produced low micro products and organic dehydrated vegetables continues to grow. The Company estimates that with growing demand of its finished products and general upward movement of food prices globally, the Company will be able to achieve further growth in sale and better realization in the coming year. The Company is also looking at increasing production of value added products like toasted onion and the addition of new products like fried onion, frozen onion and other vegetables in the coming year. 
 


The major risks for the business are uncertain crop patterns in the country, low cost and low quality competition strengthening Rupee, rising energy costs etc. Growing interest in bio-fuels have further added pressure on food industry as more and more farm land is now getting used for bio-fuel crops. The acquisition of controlling stake in Cascade Specialities Inc., USA has opened up further the global customers for Company's products. Agro processing is a priority area for government in the country.

 

Europe had hitherto been a large consumption centre for the Company's products but now with a foothold in the US the servicing of a mature market is likely to become significant. 

 

 

Fruit processing: 

 


India is the world's second largest producer of fruits next only to China and has the potential of becoming the largest producer. India also ranks second in the world in the production of fruits and vegetables. Despite the large production of fruits and vegetables, fruit and vegetable processing was limited to only 2% of the production till 2001-02. 
 

This sector has been accorded a very high priority by the Government of India and fruit and vegetable processing industry has been encouraged.

 

Further, with the economic developments taking place in India, increasing health consciousness and with the coming of organized retail trade, the food industry is poised to grow rapidly. The Indian fruit processing industry is growing currently at the rate of 20% p.a. The demand for fruit juices and fruit drinks and other processed fruit products is growing rapidly in India. Further, Indian mango and other processed fruit products are getting popular in developed markets overseas. There are 4,000 fruit processing units in the country with an aggregate capacity of 1.2 mn tonnes per annum. It is estimated that 20% of the output is exported and the rest caters to domestic consumption. 
 
Realizing the opportunity and potential of fruit and vegetable processing, the Company established modern plants a decade ago for processing fruits and vegetables. The Company has also added new capacities, acquired a number of plants and also increased the product portfolio. Jain Irrigation is now the largest processor of fruits and vegetables from India. Apart from growth in mango pulp and the concentrate business, the Company has set-up the most modern and largest Pomegranate processing facility at Jalgaon. 

 
The rationalization of manufacturing locations was completed by the Company in the year under review by deciding to process the mangoes in season only at two locations. The 1OF and BF fruit products have further diversified the basket of fruits being processed by the Company. 

 
 India is the second largest producer of Pomegranates and Maharashtra is the major producer. Research in the developed countries in the past few years has established the health benefits of Pomegranate. Pomegranate is a rich source of Anthocynins, Ellagitanins and Polyphenols. Pomegranate juice drinks and other products are becoming increasingly popular in the Western world. 

 

 
This became the fifth business to cross the Rs.1 billion mark in yearly revenues during the year under review. The business grew at 102% with 95% growth in tonnage at just over 25,500 MT of processed fruits, while the realizations were steady showing 3% increase. The fruit processing division of the Company has grown significantly in this financial year. Two plants were acquired in Chittoor last year. These plants were upgraded and a large mango ripening facility was added. Further, new lines were added both at Chittoor & Jalgaon. This enabled the Company to process large quantities of mangoes in the 2006 season and at reduced cost of production. 

 
Recently, the facilities also secured EUREGAP, ISO 22000, FSMS, BFIC Global Standard- Food. The Company is member of SGF, Germany. 

 
Apart from the significant growth in the aseptic fruit purees and concentrate production, capacity for frozen pulp and concentrate has been added and production of frozen pulp and concentrate has been started. The demand for frozen mango pulp as well as pomegranate clarified juice concentrate is increasing rapidly in the international market. Similarly,the IQF capacity has been increased and now products have been developed. 

 
With the increased capacity, improved plant utilization and reduction in raw material transport cost, this division has become cost efficient and a high quality producer of fruit purees and concentrates. 

 
The Company produced 22,600 MT of Mango products, 1,300 MT of Banana products, 370 MT of pomegranate products, and 1,200 MT of other products like Tomato, Guava, Gooseberry, Papaya etc., during the year under review. The business added 32,500 MT of capacity during the year under review, while Fixed Assets addition was to the tune of Rs.405 million. 

 

 
The demand for tropical fruit purees and concentrates is continuously increasing both in domestic as well as overseas markets. Packaged fruit juices and drinks are now becoming popular in India. MNCs and large Indian corporates have started promoting the fruit based drinks in the domestic market. The Company is the largest mango processor in the country (and is probably also the largest mango processor in the world). 

 
Fruit processing is a priority area for the government and infrastructure for storage and transportation of fresh/processed fruits and vegetables is getting its due attention. Despite producing over 100 mn tonnes of fruits and vegetables the country barely processes 24% of the products and even less is exported. In comparison countries like Brazil, Malaysia, Israel and USA process between 50-80% of the fruits and vegetables grown, while exporting a majority of their product.

 

 
The Company has not only diversified its product range with RIF and BF on one hand and pomegranate and tomato on other and but also the markets to which it caters. The opening up of economy and higher disposable incomes have resulted in increased demand for juice and convenience products in the domestic market and this trend is likely to continue in medium to long term. Growing demand for processed fruit products is expected to continue for the next five years. The Company would continue to grow this business and proposes to add capacity, both in aseptic as well as in frozen pulp and concentrate as well as in OF and F and V production. 

 
The risks faced by t he fruit processing industry are uncertainty of the raw material (fruits) supplies and prices, varying raw material quality and Rupee appreciation. Uncertain raw material supplies and prices, increasing energy costs, short life cycle of product due to changing tastes are some challenges faced by the industry. 

 

Analysis of the Financial Performance: 

 

 

Net Sales on corporate basis increased by 40.4% to Rs.12017 million as compared to Rs.8556 million in previous year. This increase in revenue primarily reflected increased domestic sales of Micro Irrigation Systems, Piping systems and Agro Processed products and increased exports of Plastic Sheets, Agro processed products and piping systems. 

 
Their total domestic revenue increased by 39.8% in fiscal 2007 to Rs.7956 million from Rs.5689 million in fiscal 2006. The revenues from exports increased 41.6% in fiscal 2007 to Rs.40611 million from R.2867 million in fiscal 2006. Export sales accounted for 33.8% corporate sales in fiscal 2007 as compared to 33.5% in fiscal 2006. 

 

 
Revenues from domestic sales of their Micro Irrigation Systems increased by 74.5% in fiscal 2007 to Rs.3599 million from Rs.2062 million in fiscal 2006, primarily due to increased retail sales in States like Maharashtra, Karnataka and Madhya Pradesh and project sales in Andhra Pradesh, Gujarat and Tamil Nadu. During the same period, exports of Micro Irrigation Systems increased by 111.7% to Rs.163 million from Rs.77 million mainly due to project sales in African continent. 

 


Revenues from domestic sales of their Piping Systems increased by 17.7% in Fiscal 2007 to Rs.3942 million from Rs.3348 million in fiscal 2006. The implementation of projects by Indian water boards in Andhra Pradesh, Karnataka and Gujarat States contributed to the increased domestic sales of PVC pipes while demand from water & gas distribution segment led to an increase in domestic sales of our PE pipes. The revenues from export of Piping Systems increased by 29.0% in fiscal 2007 to Rs.298 million from Rs.231 million in fiscal 2006, mainly on account of increased exports of PE pipes to an MNC for telecom ducting to the African continent. 

 

 
Revenues from Plastic Sheets products increased by 20.5% in fiscal 2007 to Rs. 2,618 million from Rs.2172 million in fiscal 2006, mainly due to increased revenue of PVC sheets to US and European Markets and PC sheets to Europe, Middle East and India. 

 


Revenues from domestic sales of our Agro-Processed Products increased by 51.7% in fiscal 2007 to Rs.448 million from Rs.295 million in fiscal 2006, mainly due to higher off-take of mango puree by Indian arm of a MNC as a result of growing demand for their juice products. Revenue from exports of Agro-Processed Products increased by 82.3% in fiscal 2007 to Rs.1307 million from Rs.7117 million in fiscal 2006 mainly on account of higher exports of mango puree and dehydrated onions in their European and US markets. During Fiscal 2007, they have launched new value added product 'pomegranate juice concentrate' which has contributed - 5% to total revenue of this division. 

 

 
Other product includes Solar Water Heating systems, Solar Photovoltaic Systems, Banana Tissue Culture and Agricultural products. Revenues from domestic sales of other products increased by 79% in fiscal 2007 to Rs.299 million from Rs.167 million in the fiscal 2006, mainly due to higher sales of tissue culture plants and solar products. 

 

 

Trade Reference:

 

·         Aarem Engineering, Mumbai, Maharashtra

·         Akshay Heater, Aurangabad, Maharashtra

·         Chainlink and Wireneting Industries

·         Chaitanya Steel Shape Private Limited, Jalgaon, Maharashtra

·         Chemical and Mineral Industries Private Limited

·         Chhajer Packaging and Plastics Private Limited, Jalgaon, Maharashtra

·         Chinmaya Engineering Private Limited, Jalgaon, Maharashtra

·         Columbia Petrochemicals, Raipur, Madhya Pradesh

·         Courser Paints and Chemicals, Jalgaon, Maharashtra

·         Doshi Heaters Private Limited, Surat, Gujarat

·         Flexible House Company, Mumbai, Maharashtra

·         Flexobraid, Mumbai, Maharashtra

·         Garnet Tools, Devas, Madhya Pradesh

·         Gira Industries, Jalgaon, Maharashtra

·         Global Packaging Industries, Nashik, Maharashtra

·         Image Engravers Die Makers, Nashik, Maharashtra

·         Impact Safety Glass Works Private Limited

·         Indo Plast Industries, New Delhi

·         Indu Packaging (Daman) Private Limited

·         Jade Rubber Products Private Limited, Mumbai, Maharashtra

·         Jainsons Industries, Jalandhar, Punjab

·         Jaisons Steel Industries, Jalandhar, Punjab

·         Kamal Dies and Engineering Works, Jalgaon, Maharashtra

·         Krishna Rubber, thane, Maharashtra

·         Krypton Polymers Private Limited, Nasik, Maharashtra

·         Lalitha Chem Industries Private Limited, Mumbai, Maharashtra

·         Lalitha Industries, Mumbai, Maharashtra

·         Mahavir Packaging, Jalgaon, Maharashtra

·         Mayur Hi-Tech Industries, Jalgaon, Maharashtra

·         Meters India Corporation, Mumbai, Maharashtra

·         Navrang Plastics Private Limited, Jalgaon, Maharashtra

·         New India Engineering Tools Corporation

·         Omega Plasto Compounds, Baroda, Gujarat

·         Patkar Extrusions Limited, Ankleshwar, Gujarat

·         Peeaar Enterprises, Mumbai, Maharashtra

·         Pelican Carbon Products, Mumbai, Maharashtra

·         Perfect Engineering Works

·         Plastichemix Industries, Baroda, Gujarat

·         Poly Mech Components Private Limited, Thane, Maharashtra

·         Polymermann (Asia) Private Limited, Nashik, Maharashtra

·         Prakash Rubber Industries

·         Prochem Industries, Mumbai, Maharashtra

·         Protochem Indu Private Limited, Mumbai, Maharashtra

·         Quartz India Godhra

·         R. D. Enterprise, Kolkata, West Bengal

·         R. D. Enterprises, Mumbai, Maharashtra

·         R. G. Metal and Company, Jalgaon, Maharashtra

·         Rane Elastomer Processor, Mumbai8, Maharashtra

·         Real Hyrofit and Company, Mumbai, Maharashtra

·         Rupa Engineering Works, Jalgaon, Maharashtra

·         S. Kantilal and Company, Surat, Gujarat

·         Sanil Enterprises, Pune, Maharashtra

·         Space Age Electro Tech India Private Limited

·         Spectrum Electroplaters

·         Statlec India Electricals, Jalgaon, Maharashtra

·         Super Tech Industries, Mumbai, Maharashtra

·         Tirupati Fabricators (Private) Limited, Jalgaon, Maharashtra

·         Vikram Industries, Jalgaon, Maharashtra

 

 

Fixed Assets

 

 

PRESS RELEASE:

 

News @ Jains - Jain Irrigation Bags Rs. 840 Millions Mango Pulp Order

Jain Irrigation has bagged the largest order for Rs.840 millions from Hindustan Coca Cola Company for supply of mango pulp. Compared to the order of Rs.330 million last year, this is a quantum jump. Coke bottles Mango drink in India under the most popular brand name of Maaza.

The Mango pulp business is expected to exceed a turnover of Rs.1600 million this year based on additional export orders in hand. Entire order will be processed in the current mango season. The fruit & vegetable processing division is expected to register more than 50% growth in the current financial year.

JISL has five plants for fruit & vegetable processing in India and one in USA. JISL is expecting to process in excess of 75000 MTs of mangoes in the current season registering 60% growth in amount of quantity processed. The company is a major supplier to many MNCs and to global leading beverage & food brands. JISL has emerged as the largest processor of fruits & vegetables from India.

Company will continue to invest to expand product range and to strengthen backward linkage with farmers so as to become major supplier of frozen, aseptic and dehydrated fruit & vegetable products.

India is the largest producer of mangoes in the world with a share of more than 55% of the world production. India is also the producer of the most delicious mangoes such as Alphonso, Kesar, Dasheri, Totapuri, Chusa, etc. There is large potential for fresh mangoes as well as processed mango juice as consumers are preferring healthy drinks over other types of drinks. Fruit juice and fruit drink market in India is growing above 30% every year.

Jain Irrigation Systems Ltd is a diversified company with more than 5,000 employees worldwide and market capitalization in excess of INR 3.00 bn and a product portfolio encompassing Irrigation Products, Piping Products, Plastic Sheets, Dehydrated Foods, Fruit Puree, Pulp & Juices in India and other world markets. Jain Irrigation has been named as one of the eight Indian companies expected to emerge as challengers to the World’s leading companies by Standard & Poor’s recently in May 2007.

News @ Jains - Jain Irrigation acquires controlling stake in Switzerland based Thomas Machines S.A (THE) acquires 69.75% shareholding of THE

 

Highlights:

 

 

Mumbai March 03, 2008: We are pleased to inform you that Company has acquired of 69.75% shareholding of Thomas Machines S.A. of Switzerland (THE) with full management and operational control.

 

THE is a manufacturer of specialist machines and equipment including latest generation high technology drip irrigation lines, quality control and test equipment, automation equipment, laser machine centers and laser products and has been a supplier to our Company for over three years. The equipment manufactured by THE have enabled Jain Irrigation to achieve significantly improved production speed and meet the growing demand for its high quality “precision irrigation” products.

THE was established in 1984 and is located in the French part of Switzerland, in Yvonand. It has recently successfully introduced technology to produce laser welded “composite pipes” with application in wide variety of industrial applications. It holds valuable IPR’s and cutting edge technology for its business in both irrigation and composite pipes business. It has research and development capability to further build next generation equipment. The acquisition will help the Company and its subsidiaries all over the world to further invest in the field of irrigation to build its capacities and increase speed to market for new generation drip lines.

 

The existing management will continue to operate the Company on a day-to-day basis under the overall guidance of the Board. The outgoing shareholder shall be retained as Advisor. The Company has also call option on remaining 30.25% shares.

 

Mr. Ajit Jain, Joint Managing Director of Jain Irrigation Systems Limited said after closing the deal; ” We are excited about the potential of THE to contribute in the growth of our drip division. We have not only secured technology for its significant and growing division but now we are a step ahead of all our competition in terms of quality of products. This will further help to consolidate JISL’s leadership position in the industry worldwide.”

 

Mr. Eberhard Kertscher, CEO and continuing shareholder has said that "Our choice of partner is ideal because Jain is a leader in this industry worldwide and their knowledge based inputs as a user of the equipment, will help THE achieve an even higher quality standard for our products and we can tap the software skills of the Indian personnel in delivering tailor made solutions to our customers"

 

Mr. Thomas Bernauer, the Founder of the company said that "I have nurtured the Company over 25 years and I am happy to hand over it to Jain, who I am sure will develop the latent potential in the company further and secure from all the customers of THE a preferred supplier position for its product portfolio. I look forward to continue working with Jains".

 

Jain Irrigation is a diversified Company with more than 6,000 employees and a product portfolio encompassing Irrigation Products, Piping Products, Plastic Sheets, Dehydrated Foods, Fruit Puree and Juice concentrates. Jain Irrigation has pioneered drip irrigation for small farmers in India and has a major market share in one of the fastest growing irrigation markets in the world and is also the second largest drip irrigation Company in the world.

 

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.41.29

UK Pound

1

Rs.79.97

Euro

1

Rs.61.23

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

8

PAID-UP CAPITAL

1~10

8

OPERATING SCALE

1~10

8

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

9

--PROFITABILIRY

1~10

7

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

8

--RESERVES

1~10

8

--CREDIT LINES

1~10

8

--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

 

72

 

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/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

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions