MIRA INFORM REPORT

 

 

Report Date :

12.03.2008

 

 

IDENTIFICATION DETAILS

 

Name :

HINDUSTAN SANITARYWARE AND INDUSTRIES LIMITED

 

 

Registered Office :

2, Red Cross Place, Post Box 2359, Kolkata - 700 001, West Bengal

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

8.0.2.1960

 

 

Com. Reg. No.:

21-24539

 

 

CIN No.:

[Company Identification No.]

U99999WB1960PTC024539

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

HYDH00554B

 

 

Legal Form :

A public limited liability company.  The company’s shares are listed on the Stock Exchanges

 

 

Line of Business :

Manufacturing of Sanitaryware & Fittings, Plaster of Paris, Refractories, Zirconium Opacifier, Heat Rings, Acid Resistance Tiles, Glass Bottles / containers & tumblers and Crystalware.

 

 

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 8067468

 

 

Status :

Excellent

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well – established and reputed company having fine track. The company’s financial position is satisfactory. Trade relations are fair. Payments are usually correct and as per commitments.  

 

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

 

 

LOCATIONS

 

Registered Office :

2, Red Cross Place, Post Box 2359, Kolkata - 700 001, West Bengal, India

Tel. No.:

91-33-2248 7406 / 2248 7407

Fax No.:

91-33-2248 7045 / 2248 2367

E-Mail :

hindware@somanyent.com

Website :

http://www.hindwarebathrooms.com

 

 

Works

SANITARYWARE DIVISION

 

v      Bahadurgarh - 124 507, Dist. Jhajjar, Haryana

v      Somanypuram, Brahmanapally, Bibinagar - 508 126, Andhra Pradesh

v      Raasi Ceramics - Sitarampur, Isanpur P.O., Patancheru Mandal, Medak District - 502 329, Andhra Pradesh.

 

GLASS DIVISION

 

Varadanagar, Kukatpally, Sanatnagar, Hyderabad - 500 018, Andhra Pradesh.

 

 

Branches :

Located at :

 

14,Vaswani Mansions, 2nd Floor, Dinshaw Vachha Road, Back Bay Reclamation, Mumbai - 400 020

Tel No. 91-22-2886681 / 2829301 / 2022247 / 2044776

Fax No. 91-22-2022247

 

2nd Floor, Tewari House, 11-B/8, Main Pusa Road, New Delhi - 110 005

Tel. No. 91-11-5750027 / 5819142 / 5854656 / 57 / 5755212

Fax No. 91-11-5785278

E Mail : del.hindware@gndel.global.net.in

 

Ceramic Division - II, 304, 3rd Floor, Ashoka Bhoopal Chambers, Sardar Patel Road, Secunderabad - 500 003, Andhra Pradesh

Tel. No. 91-40-7848416 / 17

Fax No. 91-40-7848418

E Mail : hindware_hyd@gescl.com

 

 

 

DIRECTORS

 

Name :

Mr. R. K. Somany

Designation :

Chairman & Managing Director

 

 

Name :

Mr. Sandip Somany

Designation :

Joint Managing Director

 

 

Name :

Mr. S. S. Kanoria

Designation :

Director

 

 

Name :

Mr. N. G. Khaitan

Designation :

Director

 

 

Name :

Mr. Binay Kumar

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr. G. L. Sultania

Designation :

Executive Director & Secretary 

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders (AS ON 31.03.2005)

No. of Shares

Percentage of Holding

Domestic Companies t

773882

4.14

Financial Institutions/Banks

156927

0.84

Mutual Funds

923410

4.93

Foreign Institutional Investors & Foreign Companies

1365090

7.30

Non-Residents Indians

23404

0.12

Promoters, Directors and Relatives

12268833

65.57

General Public

3198657

17.10

Total

18710203

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Sanitaryware & Fittings, Plaster of Paris, Refractories, Zirconium Opacifier, Heat Rings, Acid Resistance Tiles, Glass Bottles / containers & tumblers and Crystalware.

 

 

Products :

Product Description

Item Code No.

Sanitarywares

6910-10

Glass Bottles

7010-90

 

 

Exports :

 

Countries :

Lebanon, New Zealand, Yemen, Cyprus, Mozambique, Jordan and Europe.

 

PRODUCTION STATUS (as on 31.03.2007):-

 

Particulars

 

Unit

Installed Capacity

Actual Production

Sanitary Ware , Fitting and other allied products

 

MT

32000

28618

Plaster of Paris

 

MT

3000

36

Refractories

 

MT

1200

---

Zirconium Opacifier

 

MT

600

---

Hear Rings

 

Nos

500000

55250

Acide Resistant Tiles

 

Nos

650000

---

Glass bottles / Containers

 

Lac Pcs.

9531

7849

Crystal Ware

 

MT

1500

---

 

 

GENERAL INFORMATION

 

Customers :

v      Amrutanjan Limited

v      Glaxo India Limited

v      Parke-Davis India Limited

v      Ranbaxy Laboratories Limited

v      Smithkline Beecham Pharmaceuticals (India) Limited

v      TTK Pharma Limited

v      Cadbury (India) Limited

v      Hindustan Lever Limited

v      Smithkline Beecham Consumer Healthcare Limited

v      Coca Cola India

v      Pepsi India

v      Mcdowells & Company Limited

v      Maharashtra Distillery Limited

v      Shaw Wallace & Company Limited

v      United Breweries Limited

 

 

No. of Employees :

7000

 

 

Bankers :

v      Central Bank of India, Kolkata, West Bengal.

v      Andhra Bank, Kolkata, West Bengal.

v      Bank of Baroda, Kolkata, West Bengal.

 

 

Facilities :

SECURED LOANS

31.03.2007

(Rs. in millions)

From banks

Cash credit accounts

764.907

Packing credit accounts

22.400

Export bill discounting accounts

(The above loans from banks are secured by hypothecation of stocks and book debts and further secured by second charge on all the fixed assets of the Company, except certain assets at Isnapur, Medak district, Andhra Pradesh)

0.000

Buyers credit

(Secured by hypothecation of stocks and book debts and further secured by second charge on all the fixed assets of the Company, except certain assets at Isnapur, Medak district, Andhra Pradesh)

113.351

Term loans from banks

(Secured by way of hypothecation of the whole of fixed assets including moveable plant & machinery, machine spares, tools and accessories (both present and future) pertaining to the Glass division of the Company and further secured by mortgage by way of deposit of title

deeds of immovable properties of the Glass division of the Company, ranking pari-passu with the security created in favour of debenture holders)

(Term loans of Rs. 3,182.81 lacs (Previous year Rs. 2,075.00 lacs) are payable within one year)

738.748

750,000-13.50% Non-convertible redeemable debentures*

Of the face value of Rs. 100 each issued in favour of Central Bank of India on private placement basis. These debentures were redeemed during the year as per the redemption plan.

0.000

800,000-13.50% Non-convertible redeemable debentures*

Of the face value of Rs. 100 each issued in favour of Canara Bank on private placement basis. These debentures were redeemed during the year as per the redemption plan.

0.000

Car finance loans from banks and bodies corporate (Secured by hypothecation of vehicles financed out of proceeds of loans) (Amount payable within one year Rs. 51.20 lacs (previous year Rs. 94.74 lacs))

10.451

Total

1649.857

 

Notes:

* Non convertible redeemable debenture were secured by first legal mortgage on the assets at Indrad, Gujarat and further secured by way of hypothecation of the whole of moveable plant and machinery, machine spares, tools and accessories and other moveable assets (except certain assets at Isnapur, Medak district, Andhra Pradesh exclusively hypothecated to Unit Trust of India and vehicles hypothecated to banks and bodies corporate) both present and future, subject to prior charges created and/ or to be created in favour of bankers of the Company in respect of stocks of semi-finished and finished goods and further secured by mortgage by way of deposit of title deeds of immovable properties of the Company, except certain assets at Isnapur, Medak district, Andhra Pradesh.

 

These charges were ranking pari-passu with the security created in favour of financial institutions/banks for the term loans. Debentures of Rs. Nil (previous year Rs. 51.667 millions) are payable within one year.

 

UNSECURED LOANS

31.03.2007

(Rs. in millions)

Short term

 

Trade deposits from dealers

65.891

Interest accrued and due on above

0.182

From banks:

 

Commercial paper

0.000

Supplier bills discounted

8.518

Export bills discounted

0.000

Other Loan

0.000

Others

 

Deferred sales tax credit

204.855

3,300,000 - 4% Fully convertible debentures of Rs. 160.25 each

0.000

Total

279.446

 

Notes:

·         Maximum amount outstanding on commercial paper during the year Rs. 600.000 millions (previous year Rs. 600.000 millions).

 

·         The amount of deferred sales tax credit is subject to assessment by sales tax authorities.

 

·         As per agreement with Commercial Tax Department, Hyderabad deferred sales tax credit relating to the Glass Division amounting to Rs. 106.816 millions (previous year Rs. 96226 millions) is secured against the moveable and immoveable properties of the Company. However, the charge is pending registration with the Registrar of Companies, West Bengal.

 

 

Banking Relations :

Good

 

 

Auditors :

 

Name :

Walker Chandiok & Company

Chartered Accountant

 

 

Associates/Subsidiaries :

·         Textool Mercantile Private Limited

·          Bigoo Investments Limited

·          Paco Exports Limited

·          New Delhi Industrial Promotors and Investors Limited

·         Soma Investments Limited

·         AGI Glasspack Limited

·         Hindware Home Retail Private Limited

·         Soma Plumbing Fixtures Limited

·         Somany Pilkingstons

·         Ceramic Services Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

75000000

Equity Shares

Rs. 2 /- each

Rs.150.000 millions

 

Issued Capital :

No. of Shares

Type

Value

Amount

55029333

Equity Shares

Rs. 2 /- each

Rs.110.058 millions

 

Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

55025508

Equity Shares

Rs. 2 /- each

Rs.110.051 millions

Add;-

Forfeited Shares

 

Rs. 0.003 millions

 

 

Total

Rs.110.054 millions

 

Notes:

Of the above shares, 24268638 equity shares of Rs. 2 each (previous year 24268638 equity shares of Rs. 2 each) were allotted as fully paid-up by way of bonus shares by capitalisation of revenue reserves, 337500 equity shares of Rs. 2 each (previous year 337500 equity shares of Rs. 2 each) fully paid up were issued to the equity shareholders of the erstwhile The Associated Glass Industries Limited pursuant to the scheme of amalgamation and 1828225 equity shares of Rs. 2 each (previous year 1828225 shares of Rs. 2 each) fully paid-up were issued to the equity shareholders of the erstwhile Krishna Ceramics Limited pursuant to the scheme of amalgamation.

 

On 24th July, 2006, the holders of 3300000 - 4% fully convertible debentures (FCDs) exercised the option to convert these FCDs into 8250000 equity shares of Rs. 2 each, as per the terms of the issue.   

 

 

 

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

110.054

93.554

93.554

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

1906.813

1200.629

1022.808

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

2016.867

1294.183

1116.362

LOAN FUNDS

 

 

 

1] Secured Loans

1649.859

812.966

945.389

2] Unsecured Loans

279.447

1580.804

761.931

TOTAL BORROWING

1929.306

2393.771

1707.320

DEFERRED TAX LIABILITIES

348.531

317.061

325.670

 

 

 

 

TOTAL

4294.704

4005.015

3149.352

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

2222.108

2048.723

1989.262

Capital work-in-progress

220.281

38.034

13.441

 

 

 

 

INVESTMENT

484.151

577.960

235.576

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
1218.182

1082.729
752.653

 

Sundry Debtors
770.392

916.553
706.813

 

Cash & Bank Balances
86.081

123.946
107.598

 

Other Current Assets
0.907

11.887
9.799

 

Loans & Advances
272.745

141.269
142.208

Total Current Assets
2348.307

2276.384

1719.071

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
891.064

837.763
694.519

 

Provisions
89.079

98.323
113.479

Total Current Liabilities
980.143

936.086

807.998

Net Current Assets
1368.164

1340.298
911.073

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

4294.704

4005.015

3149.352

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

4777.640

3965.218

3144.594

Other Income

62.242

74.171

0.000

Total Income

4839.882

4039.389

3144.594

 

 

 

 

Profit/(Loss) Before Tax

456.148

403.999

289.738

Provision for Taxation

165.030

147.318

99.391

Profit/(Loss) After Tax

291.118

256.681

190.347

 

 

 

 

Export Value

281.473

236.991

198.984

 

 

 

 

Import Value

503.284

426.234

424.659

 

 

 

 

Expenditures :

 

 

 

 

Cost of Goods Sold

742.639

557.560

 

Manufacturing Expenses

2856.540

2570.358

2537.752

 

Personnel Cost

489.146

423.649

 

 

Increase/(Decrease) in Finished Goods

[95.365]

[296.873]

 

Total Expenditure

3992.960

3254.694

2537.752

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

30.09.2007

31.12.2007

Type

1St Quarter

2nd Quarter

3rd Quarter

Sales Turnover

1170.600

1160.600

1318.000

Other Income

23.000

17.900

10.400

Total Income

1193.600

1178.500

1328.400

Total Expenditure

986.700

959.700

1115.200

Operating Profit

206.900

218.800

213.200

Interest

45.000

37.400

41.100

Gross Profit

161.900

181.400

172.100

Depreciation

62.600

64.400

65.000

Tax

39.400

43.300

41.000

Reported PAT

64.400

76.000

67.000

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2007

31.03.2006

31.03.2005

PAT / Total Income

(%)
6.01

6.35

6.05

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
9.55

10.18

9.21

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
8.65

8.18

7.32

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.23

0.31

0.25

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
1.44

2.57

2.25

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
2.39

2.43

2.13

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Nil

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.40.77

UK Pound

1

Rs.82.10

Euro

1

Rs.64.48

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

9

PAID-UP CAPITAL

1~10

9

OPERATING SCALE

1~10

9

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

10

--PROFITABILIRY

1~10

8

--LIQUIDITY

1~10

9

--LEVERAGE

1~10

9

--RESERVES

1~10

9

--CREDIT LINES

1~10

9

--MARGINS

-5~5

---

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

YES

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

81

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

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