MIRA INFORM REPORT

 

 

Report Date :

14.03.2008

 

 

IDENTIFICATION DETAILS

 

Name :

EVEREADY INDUSTRIES INDIA LIMITED

 

 

Registered Office :

1, Middleton Street, Kolkata – 700 071, West Bengal

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

20.06.1934

 

 

Com. Reg. No.:

21-7993

 

 

CIN No.:

[Company Identification No.]

L31402WB1934PLC007993

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

CALE01744B

 

 

PAN No.:

[Permanent Account No.]

AAACE5778N

 

 

Legal Form :

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

 

 

Line of Business :

Manufacturing of Dry Cell Batteries, Flashlights, Electrolytic Manganese Dioxide, Cinema Arc Carbons and Black Tea.

 

 

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 24449064

 

 

Status :

Excellent

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is an old and well established company having two segments of business namely production and sale of batteries, flashlights and packet tea and production, sale and export of bulk tea, from the tea estates owned by the company.

 

Trade relations are reported as fair. Payments are reported as correct and as per commitments.

 

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

 

 

LOCATIONS

 

Registered Office :

1, Middleton Street, Kolkata – 700 071, West Bengal, India

Tel. No.:

91-33-22882147/3950 / 22476922 / 22883950

Fax No.:

91-33-22884059 / 22884059

E-Mail :

info@evereadyindustries.com

Website :

http://www.evereadyindustries.com

 

 

Corporate Office :

2, Rainey Park, Kolkata – 700 019, West Bengal

Tel. No.:

91-33-24764995 / 24751961 / 24559213

Fax No.:

91-33-24753673 / 24864673

E-Mail :

rm_menon@eveready.co.in

feedback@eveready.co.in  

Website :

http://www.evereadyindustries.com

 

 

Factory  :

Manufacturing locations:

 

ò          BATTERY MANUFACTURING UNITS:

 

National Carbon Plant

 

·         5, Rustomjee Parsee Road, Cossipore, Kolkata – 700 002, West Bengal

 

·         1, Taratola Road, Kolkata – 700 088, West Bengal

 

·         1075, Tiruvottiyur High Road, Chennai – 600 019, Tamil Nadu

 

·         Industrial Area, Moula Ali, Hyderabad – 500 040, Andhra Pradesh

 

·         B-1, Sector-80, Noida Phase-II, Gautam Budh Nagar - 201 305, Uttar Pradesh –

 

Battery Plant

 

  • Developed Plot No. 1, Industrial Estate, Guindy, Chennai – 600032, Tamilnadu

 

  • B-1, Sector 80, Noida, Phase – II, Gautam Budh Nagar - 201305, Uttar Pradesh

 

ò          PLASTIC PROCESSING UNIT

 

Plastics Processing Plant,

B-2, Sector-80, Phase-II, District Gautam Budh Nagar – 201 305, Uttar Pradesh

 

ò          FLASHLIGHT MANUFACTURING UNIT:

 

The Eveready Flashing Plant,

Mill Road, Aishbaug, Lucknow – 226 004, Uttar Pradesh

 

ò          METALS & ALLOYS MANUFACTURING UNITS:

 

·         Metals & Ores Plant

P-4, Transport Depot Road, Kolkata – 700 088, West Bengal

           

·         Metals & Ores Plant

123/2 & 3 Ponneri Road, Vaikadu Village, Manali New Town, Chennai - 600103

 

ò          ELECTROLYTIC MANGANESE DIOXIDE MANUFACTURING UNIT:

 

Electrolytic Manganese Dioxide Plant

Plot D-4, Trans Thane Creek, Industrial Area, Thane Belapur Road, Turbhe, Navi Mumbai – 400 705, Maharashtra

 

ò          MACHINERY & PARTS MANUFACTURING UNIT:

 

Central Machine Shop

Developed Plot No. 1, Industrial Estate, Guindy, Chennai – 600 032, Tamil Nadu

 

Central Machine Shop

1075 Tiruvottiyur High Road, Chennai - 600 019

 

Packet Tea Factory

Chuapara, Dist. Jalpaiguri, West Bengal

 

 

Overseas representative

15, Scotts Road, # 03-01, Thong Teek Building, Singapore – 228 128

Tel. No.:

91-65-22359290/22359844

Fax No.:

91-65-22357950

E-Mail :

calsin@singnet.com.sg

 

 

Branches : 

Ahmedabad

 

Shop No.126/1-6,Shri Raghuvir, Estate,National Highway No.8, Aslali,Ahmedabad-382425
91-2718-267118, 261118
91-79-55122308

 

Bangalore  

 

21D,2nd Cross,1st.Stage, Peenya Industrial Area, Banglore - 560058
91-80-57661459, 57661464, 41122267

 

Cuttack       

 

Plot no.2658,AT/PO - Bhanpur, Cuttack - 753011
91-671-2686928, 2686914

 

Chennai      

 

748, Anna Salai, Chennai - 600035
91-44-28524265, 28523043

 

Cochin        

 

V/759, Edapally Muvattupuzha Road, Club Junction, Edapally, Cochin 682 024
91-484-5580913, 5580914

 

New Delhi   

 

UCO Bank Building, 5,Parliament Street, New Delhi - 110001
91-11-23716341, 23716342, 30480385, 30480386

 

Guwahati    

 

Ashirwad, House No. 291, Juri Path, Zoo Narangi Road, Guwahati - 781024
91-361-2410797, 2410798, 24638691

 

Hyderabad  

 

D.NO.7-20/65, A - Block, Opp. Eenadu Press, Moosapet, Sanathnagar, Hyderabad - 18
91-40-30947813, 23813800

 

Indore         

 

2-10,T.T.Nagar, Dewas Naka,  Indore-452010 (MP)

91-731-5021719, 4065960

 

Jaipur         

 

F-527,Road No.6, VKI Area, Jaipur - 13
91-141-5114232, 5115253

 

Kolkata       

 

Jeevan Deep Building,3rd. Floor, 1, Middleton Street, Kolkata - 700071
91-33-22815005, 22815006

 

Lucknow     

 

6/A, Jeet Palace,Sapru Marg, Lucknow - 226001
91-522-2273184, 2272329, 3018794

 

Mumbai      

 

Laxmi Building, Ist. Floor, Sir P.M.Road, Fort, Mumbai - 400001
91-22-22844371,  22021412

 

Patna          

 

S.P.Verma Road, Patna - 800001
91-612-2231279, 2222910,  2228580

 

 

DIRECTORS

 

Name :

Mr. B. M. Khaitan

Designation :

Chairman

Qualification :

B. Com.

Date of Appointment :

01.04.2000

Previous Employment

The Bishnauth Tea Company Limited – Chairman & Managing Director

 

 

Name :

Mr. Deepak Khaitan

Designation :

Executive Vice Chairman and Managing Director

Qualification :

B. Com MBA (Geneva)

Date of Appointment :

01.06.1999

Previous Employment

The Bishnauth Tea Company Limited- Manager T.E.

 

 

Name :

Mr. A. Roy

Designation :

Whole Time Director

Qualification :

B. Tech., (Hons)

Date of Appointment :

02.04.1971

Previous Employment

GEC of India Limited-Executive Assistant

 

 

Name :

Mr. V. Bhandari

Designation :

Director

 

 

Name :

Mr. Sanjiv Goenka

Designation :

Director

 

 

Name :

Mr. P. K. Kaul

Designation :

Director

 

 

Name :

Mr. A. Khaitan

Designation :

Director

 

 

Name :

Mr. Bhaskar Mitter

Designation :

Director

 

 

Name :

Mr. Diwan Arun Nanda

Designation :

Non-Executive Directors

 

 

Name :

Mr. P. H. Ravikumar

Designation :

Nominee of ICICI Bank Limited

 

 

Name :

Mr. A. Roy

Designation :

Wholetime Director

 

 

Name :

Mr. S. Saha

Designation :

Wholetime Director

 

 

Name :

Mr. S R Dasgupta

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mrs. T. Punwani

Designation :

General Manager Legal & Company Secretary

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders (As on 31.03.2007):-

No. of Shares

Percentage of Holding

Promoters holdings

 

 

Promoters

26382135

36.30%

Persons acting in concert

3111233

4.28%

Sub-Total

29493368

40.58%

Non Promoter Holdings

 

 

Institutional investors

 

 

Mutual Funds and UTI

10342752

14.23%

Banks, Financial Institutions , Insurance Companies

(Central / State Government Institutions / Non Government Institutions)

4978511

6.85%

FIIs

15537958

21.38%

Sub-Total

30859221

42.46%

Others

 

 

Private Corporate bodies

2220175

3.05%

Indian Public

9734782

13.39%

NRIs / OCBs

379714

0.52%

Sub-Total

12334671

16.96%

 

 

 

TOTAL

72687260

100.00%

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Dry Cell Batteries, Flashlights, Electrolytic Manganese Dioxide, Cinema Arc Carbons and Black Tea.

 

 

Products :

Product Description

Item Code No. (ITC Code No)

Primary Batteries

850610.00

Flashlights

851310.01

Tea Black Leaf in Bulk

090230.02

 

PRODUCTION STATUS (as on 31.3.2007):-

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

Batteries (2)

Million PCs

1624.50

1350.00

1131.01

Flashlights (2)

Million PCs

23.00

12.50(3)

8.29

Carbon Electrodes (2) & (4)

Million PCs

470.00

580.00

461.69

Casting , Hard Facing And Tube Rods

Tonne

150.00

150.00

2.19

Electrolytic Manganese Dioxide

Tonne

---

5000.00

---

Machinery  (2)

Nos.

50.00

50.00

---

Machinery Parts (2)

Nos.

500.00

500.00

---

Moulded Plastics Components (2) & (4)

Tonne

1500.00

375.00

155.25

Packet Tea

Tonne

NA

9000.00

7494.63

 

 

GENERAL INFORMATION

 

Suppliers :

·         Ajit Industries,

·         Ambica Chemical and Industrial Corporation,

·         Anand Industries,

·         Global Printing and Packaging Company Private Limited

·         Hunan Jmc Xinshao Company Limited 

·         Binay Lamps and Lighting,

·         Lakshmi Industries,

·         Neman! Poly Products Private Limited 

·         Pet Metal Private Limited 

·         Paharimata Packaging Industries,

·         Petrocarb,

·         Pigments and Chemical Industries Private Limited .

·         Sohoni Metal Craft Private Limited.

 

 

No. of Employees :

5182

 

 

Bankers :

v      Allahabad Bank

v      American Express Bank Limited

v      Central Bank of India

v      Citibank N. A.

v      HDFC Bank Limited

v      ICICI Bank Limited

v      Indian Bank

v      Standard Chartered Grindlays Bank Limited

v      State Bank of Bikaner and Jaipur

v      State Bank of India

v      UCO Bank

v      United Bank of  India

 

 

Facilities :

SECURED LOAN

Rs In Millions

31.03.2007

Banks -

 

Cash Credits and Working Capital Demand Loans -

Secured by hypothecation of stocks, stores and book debts relating to businesses of the Company and ranking pari passu with the charges created and/or to be created in favour of other banks in the consortium and first/second charge on the fixed assets of the company.

852.410

Working Capital Loan from Foreign Currency Non-Resident (Bank) Funds - NIL [31.03.06 - US$ 5.33 million]

0.000

Term Loans from ICICI Bank

 

Loan denominated in Foreign Currency (NIL, 31.03.06 - US$ 3.46 million)

0.000

- External Commercial Borrowing denominated in Foreign Currency (US$16 million, 31.03.06-NIL)

 

Secured/to be secured by exclusive mortgage on movable and immovable properties and by deposit of title deed of the plant located at Haridwar, Uttaranchal.

740.400

Rupee Loan

Secured/to be secured by a pari passu first charge by way of equitable mortgage over certain movable & immovable properties of the company and exclusive charge on certain brand belonging to the Company.

197.580

Term Loans from UCO Bank

Secured/to be secured by a pari passu first charge by way of equitable mortgage over certain movable & immovable properties of the company and by pari passu first/second charge by way of equitable mortgage over certain tea estates belonging to MRIL.

485.699

Term Loan from UTI Bank

0.000

Term Loan from IDBI Limited .

Secured/to be secured by a pari passu first charge by way of equitable mortgage over certain movable & immovable properties of the company and exclusive charge on certain brand belonging to the Company.

1146.563

Others-

Housing Development Finance Corporation Limited

Secured/to be secured by equitable mortgage by way of deposit of Title Deeds of Noida Battery Plant and Windmill Lands of the Company and certain residential properties located at Mumbai & Kolkata and by pari passu first charge by way of equitable mortgage over a tea estate belonging to MRIL.

578.000

Total

4000.652

 

 

UNSECURED LOAN

Rs In Millions

31.03.2007

Fixed Deposits

7.426

Inter Corporate Loans

29.470

Short Term Loans

550.046

ICICI Bank - Car Loan

1.312

Total

588.254

 

 

 

Banking Relations :

Good

 

 

 

 

Auditors 1 :

S. B. Billimoria & Company

Chartered Accountants

 

 

 

 

Auditors 2:

Deollitte Haskins and Sells

Chartered Accountants 

 

 

 

 

Membership:

Confederation of Indian Industry

 

 

 

 

Associates/Subsidiaries :

v      Williamson Magor Group

v      Murablack India Limited

v      McNally Bharat Engineering Company Limited

v      Williamson Financial Services Limited

v      Worthington Pump (India) Limited

v      Kilburn Engineering Limited

v      Light Metal Industries Limited

v      India Foils Limited

v      Standard Batteries Limited

v      Kilburn Reprographics Limited

v      Energizer India Limited

v      Babcock Borgig Limited

v      Dewrance Macneill and Company Limited

v      Macneill Engineering Limited

v      Kilburn Electricals Limited

v      McNama Consultant Limited

v      Veco India Limited

v      Project India Blend Limited

v      Dakorji Properties Limited

v      Deutsche Babcock Limited and others

 

SUBSIDIARIES

 

v      Nepal Battery Company Limited

v      Dufflaghur Investments Limited

 

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

111560000

Equity Shares

Rs. 5/- Each

Rs.557.800 millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

72687260

Equity Shares

Rs. 5/- Each

Rs.363.436 millions

 

 

 

 

Of the above Shares:-

576514 Shares were allotted as fully paid up pursuant to a contract without payment being received in cash.

 

21329782 Shares were allotted as fully paid up Bonus Shares by Capitalisation of General Reserve and 2892700 Shares were issued out of Share Premium Account.

 

23196002 Shares were allotted as fully paid up other than in cash pursuant to Scheme of Amalgamation.

 

15968258 shares represent 15968258 Global Depository Receipts.

 

940000 shares represent warrants converted into equity shares.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

363.436

358.736

278.895

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

5748.830

5983.232

4157.083

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

6112.266

6341.968

4435.978

LOAN FUNDS

 

 

 

1] Secured Loans

4000.652

3471.656

4961.444

2] Unsecured Loans

588.254

320.107

125.239

TOTAL BORROWING

4588.906

3791.763

5086.683

DEFERRED PAYMENT LIABILITY

0.000

0.000

0.000

DEFERRED TAX LIABILITY (NET)

42.452

60.459

26.976

SHARE WARRANT

55.195

64.125

0.000

 

 

 

 

TOTAL

10798.819

10258.315

9549.637

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

8247.769

8594.763

8925.941

Capital work-in-progress

788.862

214.032

102.374

 

 

 

 

INVESTMENT

474.687

474.687

14.729

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
1757.118
2027.643
1459.856

 

Sundry Debtors
452.465
446.176
247.353

 

Cash & Bank Balances
164.093
65.926
114.725

 

Other Current Assets
0.000
0.000
0.000

 

Loans & Advances
820.710
689.126
287.207

Total Current Assets
3194.386

3228.871

2109.141

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
1417.333
1592.269
1284.644

 

Provisions
499.809
675.184
321.527

Total Current Liabilities
1917.142

2267.453

1606.171

Net Current Assets
1277.244
961.418
502.970

 

 

 

 

MISCELLANEOUS EXPENSES

10.257

13.415

3.623

 

 

 

 

TOTAL

10798.819

10258.315

9549.637

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

7725.244

7328.114

6808.307

Other Income

5.773

766.410

0.000

Total Income

7731.017

8094.524

6808.307

 

 

 

 

Profit/(Loss) Before Tax

[131.980]

994.943

482.958

Provision for Taxation

[2.310]

198.369

19.849

Profit/(Loss) After Tax

[134.290]

796.574

463.109

 

 

 

 
Export Value

142.473

95.998

58.087
 

 

 

 
Import Value

1474.262

776.540

666.301

 

 

 

 

Expenditures :

 

 

 

 

Manufacturing Expenses

6877.652

7051.709

 

Interest

411.812

496.047

 

 

Works in progress

412.054

[608.141]

6325.349

 

Provision – others

64.357

40.000

 

 

Depreciation & Amortization

199.451

183.051

 

Total Expenditure

7965.326

7162.666

6325.349

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

30.09.2007

31.12.2007

Type

1st Quarter

2nd Quarter

3rd Quarter

Sales Turnover

1849.300

2039.100

2260.600

Other Income

4.900

3.600

26.500

Total Income

1854.200

2042.700

2287.100

Total Expenditure

1778.300

1838.400

2061.900

Operating Profit

75.900

204.300

225.200

Interest

132.000

125.600

140.000

Gross Profit

-56.100

78.700

85.200

Depreciation

53.400

52.700

64.900

Tax

2.400

14.300

5.100

Reported PAT

-123.200

11.700

-27.000

 

KEY RATIOS

 

Year

31.03.2007

31.03.2006

31.03.2005

Debt-Equity Ratio

0.82

1.10

2.28

Long Term Debt-Equity Ratio

0.56

0.83

1.62

Current Ratio

0.91

0.87

0.83

TURNOVER RATIOS

Fixed Assets

0.81

0.77

0.66

Inventory

4.62

4.74

5.57

Debtors

19.45

23.85

23.91

Interest Cover Ratio

0.68

1.45

1.59

Operating Profit Margin(%)

5.59

11.09

11.21

Profit Before Interest And Tax Margin(%)

3.30

8.88

8.72

Cash Profit Margin(%)

0.75

4.15

5.72

Adjusted Net Profit Margin(%)

-1.54

1.93

3.24

Return On Capital Employed(%)

3.12

8.66

7.30

Return On Net Worth(%)

-2.64

3.95

8.78

 

 

 

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

History:

The company is a leading player in Indian dry cell batteries market. Incorporated in 1934 the company was - formerly a subsidiary of Union Carbide Corporation, US and was subsequently taken over by B M Khaitan and the Williamson Magor group of companies. The name of the company was changed to EVEREADY INDUSTRIES LIMITED eleven years after its Bhopal plant was involved in one of the world's worst industrial disasters. 

The Company manufactures and markets Carbon Zinc Batteries, Rechargeable Batteries, Alkaline Batteries, Flashlights and Packet Tea. The Company was the first to introduce batteries in India in 1905. The Company has completed 100 years of its services and leads the market, in the segment of Dry Cell Batteries and Flashlights with a market share of 46%. The company is the world's third largest producer of Carbon Zinc Batteries and selling more than a billion units a year. The company is the owner of popular drycell brand 'Eveready' and markets Carbon Zinc Batteries, Rechargeable Batteries, Alkaline Batteries and full range of brass,aluminum and plastic flashlights under this brandname in India. The packet tea is marketed under the brand name 'Greendale'.  

The capacity of the company to produce batteries stood at 1350 Million Pcs as on Mar 31, '05 and 12.5 Million Pieces for flashlights including the expansion carried out during the fiscal 2004-05. The company  entered alkaline batteries segment in 2001-02 by launching alkaline batteries under its own umberlla brand 'Eveready'. But before that in 1995 the company through Energizer India Private Limited, a 50:50 JV between EIL and Ralston Purina Overseas Battery Company of US, manufactures reowned Energizer brand of alkaline batteries in India. In 1995, a MoU was signed with Gold Peak Industries, Hong Kong, to develop rechargeable Ni-Cd and Ni-Mg batteries in India. The company has already commenced marketing miniature watch batteries. During 1999-2000, the company commissioned a new poly sleeve jacketed battery line at Camperdown Works at Calcutta.  

EIL battery plant and metal processing plant at Calcutta, as well as the electrolytic manganese dioxide plant at Bombay have received the ISO 9002 certification. 

Since 1996-97 the company under goes series of mergers and demergers. In 1996-97, McLeod Russel India (MRIL) and Faith Investments were amalgamated with the company. The business of MRIL is being carried on by the company as its tea division in the trading name of Mcleod Russel. Later Bishnauth Tea Company was amalgamated with Eveready Industries India Limited And recently the company demerged its Bulk Tea division to McLeod Russel India Limited (formely Eveready Company India Limited, a Company floated to facilitate demerger) effective April 1, 2004. 

The company has decided to set up a factory in Uttaranchal for the manufacture of dry cell batteries with a capacity of 400.000 Millions pieces per annum at an estimated investment of Rs.600.000 Millions .The project is envisaged to be implemented before September 2006. 

The company has shifted its entire manufacturing facilities at Guindy, Chennai to its another existing unit at Chennai on Tiruvottiyur High Road. The integrated plant will have a capacity of upto 450 Million batteries per annum. As a result of this shifting, 8.39 acres of prime land at Guindy will be released and the company has entered into an agreement with Khivraj TechPark Limited of Chennai for development of this site as a building complex particularly suitable for the Information Technology Sector, having a Information Technology sector, having a built-up area in excess of 10,00,000 Sq.ft. and build at a cost of the developer company Khivraj Techpark but towards consideration for the land the copany will in return gets an upfront payment of Rs.250.000 Millions and 20% of the built-up area together with proportionate car parking spaces. Williamson Magor and Co Limited was ceased to be associate from 10th January 2005.

Fixed assets

v      Goodwill

v      Estate and development

v      Land freehold

v      Patents/trade marks

v      Land leasehold

v      Buildings

v      Plant

v      Machinery

v      Equipments

v      Motor and other vehicles

v      Furniture

v      Fixtures

v      Office appliances

 

The company is in trade terms with :

 

OPERATIONAL REVIEW:-

Net sales for the year were higher by 5.4% over the previous financial year. However, Profit before Depreciation, Interest and Taxation (PBDIT) was lower at Rs.479.200 millions as compared to Rs.1674.000 millions in the previous year. Ignoring extra-ordinary income, PBDIT from operations stood at Rs.473.400 millions against Rs.907.600 millions in the previous year. 

 

 

 

The lower PBDIT from operations was contributed by a very steep and unprecedented increase in raw material prices and lower volumes due to consumer resistance to price increases necessitated by the cost push. 
 

Batteries and Flashlights: 

The operational performance of the Company during the year in review was marked by continuing steep and unprecedented increase in raw material costs - mainly that of zinc - which the Company uses in significant quantity in the manufacture of batteries and also brass flashlights.

 
This cost push not only put pressure on margins but also necessitated taking price increase actions to mitigate the impact. The series of these pricing actions met with stiff resistance from the consumers. This manifested itself in consumers lowering or deferring consumption, which resulted in lower sales volumes. The combined impact of cost push and lower volumes resulted in poor financial results. 

 
The Company believes that the phenomenon as explained above is only a temporary one caused by assignable reasons beyond its control. The pillars behind the Company's sustained good performance over time continue to be its fundamental strengths on distinct quality edge, penetrative distribution and effective marketing. These strength areas will eventually take the Company to a path of sustainable growth and accordingly these were persisted with during the year under review.


The Company met the schedule of construction of its new state-of-the-art plant at Haridwar during the year under review and it eventually commenced commercial production on April 2, 2007 - as per plan. The plant will not only augment battery capacity by 360 million units, but also expand margins due to excise and tax benefits available to it. 
 
The manufacturing operations of the Company continued to focus on total quality management, safety, energy conservation and cost control. This helped the Company in achieving manufacturing excellence.

 
Green Star Quality Circle of Hyderabad unit won the excellence award in the '20th National Convention of Quality Circles', held at IIT Kanpur. 


As mentioned in the last Report for the year ended, March 31, 2006, the EMD manufacturing operations at Thane, Maharashtra had become completely un-remunerative on account of higher quality imported EMD being available in the market for battery manufacturing at costs lower than the said EMD manufacturing costs. Accordingly, the EMD operations had been suspended and as a measure of cost protection, since the same was uneconomical and unviable, actions were put in place by which the manufacturing facilities was totally closed from the close of March 31, 2007. 

 
Packet Tea: 

The packet tea business of the Company continued to leverage the wide and deep national distribution reach. The business had a value growth of 17%, which was contributed by a very healthy volume growth of 9%. The market continues to be severely competitive. However, the Company remains focused on this business as a driver for revenue growth. 


Insect Repellents: 

During the year under review, the Company diversified its product portfolio in to a new product range, viz., insect repellents. This is in line with the Company's plans to grow organically in newer FMCG products using its distribution chain. Mosquito coils are the first products in the repellents range of products. 

 
The criterion applied for the selection of this product range included the large size of the insect repellent market - given India's perennial problems with mosquito and attendant diseases. Large-scale usage of coils in the rural mass market also was of particular interest, where the Company's distribution network is extremely strong. The launch of the product took place close to the beginning of the year under review and this was the first year of operation. Initial response to the launch was encouraging and this segment will offer handsome revenue growth and profitability for the Company in future. 

 
Prospects: 
Financially, the year under review was a disappointing one. The immediate targets for the Company are a swift revival and thereafter create a path for sustainable growth. This seems quite within realms of feasibility for a number of reasons: 

 

The buoyant India economy will sustain consumerism growth, which will benefit the FMCG segment. The Company will take advantage of this growth. 

 
It is firmly believed that there has not been any change in the basic fundamentals of the market. The demand drivers and the potential offered by the presently low-consuming Indian market will continue to offer major potential for growth. 

 
After the consumer's initial difficulty in adjusting to the new high cost regime, the market will gradually come back to the consumption levels. 

 
Input costs will continue to put pressure - at least in the short to medium term. However, the Company having already taken adequate pricing measures and its metal cost hedging mechanisms will ensure perhaps only an insignificant impact. 

 
The Company's bouquet of products is uniquely positioned to address consumer needs at the base of the hierarchy of needs. New people coming to consumerism will easily take to these products.

 

Management Discussion and Analysis: 

The Business: 

The company is one of India's most renowned and enduring FMCG companies, with the operations entrenched in the country for over 100 years. Over the decades, it has strengthened its position as the dry cell battery and flashlight industry market leader in the second most populous country in the world. 

 
The Company's contemporary product portfolio comprises the following:  

·         Dry cell batteries, flashlights and rechargeable batteries under brand 'Eveready. 

·         Packet tea under brands Tez', 'Jaago', 'Premium Gold', 'Classic'. 

·         Insect repellents under brand 'Eveready Poweron'. 

 
The Indian operations started through import of dry cell batteries and then marketing the same across major Indian cities. This eventually led to setting up manufacturing facilities and a distribution network across India. 

 
Subsequently, this manufacturing presence was integrated forward into the manufacture of flashlights, the largest consumer of batteries. 


Over time, the Company evolved into the largest dry cell battery player in India with a market share of 45.6 per cent and virtually the only flashlights player in the market. 

 
The Company possesses one of the widest and deepest distribution networks among FMCG companies in India, reflected in its premium brand equity and customer loyalty. To leverage the growth of this pan-national distribution pipeline, the Company extended its product category to the marketing of packet tea and insect repellents. The Company's existing share of packet tea market is limited. However, the Company expects that quality level of its product and its strength of retail penetration will eventually translate into a significant market share over the foreseeable future. Mosquito coils were launched by the Company close to the beginning of the year under review The first year of operation was encouraging and the Company expects to garner significant share in this market within a reasonable time frame based on its rural reach and tangible differentiation from other products available in the market. Given the buoyant Indian economy robust product outlook and a proactive management, Subject  expects to strengthen its presence across these products  through increasing value and volumes. 

 

 


India Economic Overview: 

The off-take of the Company's products is influenced by the health of the Indian economy. According to the Economic Survey 2006-07, the country's economy was estimated to have grown at a healthy 9.2 per cent during the year under review.

 

The country took rising input material costs of non-ferrous metal, petroleum etc. in its stride and key sectors like infrastructure, steel and cement grew at a healthy trot. But for the agriculture sector, which grew at a modest 2.7 per cent, the overall economy would have turned out even better results. This healthy growth in the economy led to higher income levels and consequently growing consumerism. The FMCG sector is set to take full advantage of this. 

FMCG Industry In India: 

The past proved to be challenging for India's FMCG sector on account of volatility in agricultural incomes, increased competition, price discounts and the growing affordability of lifestyles and durable products. This led to concerns on retaining the share of consumer wallet for FMCG goods. 

 
However, this trend has significantly changed during recent times, with many FMCG categories showing healthy growth. The sectoral outlook continues to be positive mainly on account of the projected increase in per capita income. It is now firmly believed that the positive factors of the economy is finally having its impact on per capita consumption pattern. All parameters seem to indicate that this trend is sustainable over the coming years.


Batteries: 
Industry size and structure: 

The Indian market for dry cell batteries is estimated at 2.5 billion pieces by volume and Rs.15 billion by value. The battery market has only a few players. Out of which Subject has a market share of 45.6 per cent, and the next player lags by more than 17 per cent points. During the year under review however, the market had the adverse impact of a very aggressive rise of the input material costs, particularly that of zinc.

 

These adverse impacts had to be passed on to the consumer. A significant part of the dry battery market is in the rural and poorer segments of the economy which are resistant to stiff price increases. The consumers reacted adversely to these price increases and resorted to reducing or deferring consumption. This resulted in a market de-growth of about 8 per cent in battery volumes during the year. This phenomenon was most significant in the 'D' size battery segment, which had to bear the highest impact of the cost push. These batteries are predominantly used in the price-resistant rural sections of the society and saw the largest quantum of volume drop. 'D' segment de-grew by nearly 21 per cent. On the other hand, the 'AA' batteries which are more in use in the urban areas and historically the growth champion had a positive growth of 9 per cent. Handsome growth exceeding 20 per cent was seen in the newly emerging 'AAA' segment - however it has to be seen in the perspective of this growth coming off a smaller base. 

 
As stated before, the growth rates for the year under review should be taken to reflect temporary consumer sentiment and is not seen to have any permanent impact. 

 
The segment pattern within the industry underwent change on account of the relative growth phenomenon as explained above. The share of 'D' size batteries reduced to 44 per cent and the 'AA' size batteries increased towards the 50 per cent mark. The split of technology within the dry batteries market also remained constant with zinc carbon batteries virtually possessing the entire market with 99 per cent share. The alkaline batteries have minimal share of the market at 0.5 per cent and are present in only some premium urban outlets.

 

Rechargeable batteries, which have the balance 0.5 per cent of the market seems to have made its mark on a loyal customer base but rising slowly. 

 
Off take of batteries is driven largely by growth in the off take of its applications. 


A growing need for portable power and the advent of a number of battery operated gadgets catalyse consumption. Since these address everyday use, batteries have enjoyed a non-cyclical demand and have been largely untouched during the past general downturns. The phenomenon of consumption reducing on account of large-scale price increases is unique to the year under review and is expected to be only a temporary one. 
 
Performance review: 

Volume in the battery market in India was estimated to have reduced by 8 per cent. Sales volume of Subject  also reduced by a similar margin. As a result, the market share pattern remained by and large consistent with the previous year - with Subject  remaining at 45.6 per cent.

 

In the product mix of Subject  in the year under review, 'D' size had a share of 47 per cent and 'AA' at 45 per cent. During the year, the 'D' segment degrew by 21 per cent and 'AA' grew 12 per cent. 

 
Marketing and distribution: 

The Company continued to put emphasis in strengthening its distribution network. Of the total FMCG universe of 7.3 million outlets, penetration of batteries stocking universe was at 70 per cent. Eveready batteries were stocked in 66 per cent of such outlets, higher than any other battery brand by a wide margin. 

 
Eveready's brand campaign featuring continued to add positive qualities to its brand value. Subject  will persist with these efforts to further strengthen its brand salience. 

 
Opportunities and threats: 

India has a low per capita consumption across a number of product groups, batteries included, indicating a latent potential for sustainable growth.

 

Since dry cell batteries represent the cheapest source of portable power, consumption is expected to increase over time. Besides, growing income levels, changing lifestyles and an increased convenience have resulted in proliferation of gadgets (remote controls, torches, toys, cameras, FM radio sets and portable music systems) run by batteries.

 
The Company's 'D' segment is being driven primarily by a need for light (flashlights) and entertainment (radio) in rural India. The proven durability and quality assurance of the Company's brand will continue to capitalize on this long-standing opportunity. Growth in the 'AA' segment will continue to be fuelled by proliferation of clocks, remote control devices and growth of newer devices across both rural and urban India. The new 'AAA' segment will take higher share of the battery market, with introduction of smaller size devices. 

 
Besides, the introduction of high drain equipment (digital cameras and CD players) is expected to enhance the demand for more powerful rechargeable batteries. The Company reinforced its presence in this segment by becoming the first organized entrant. Subject expects rechargeable to be one of the drivers of the Company's revenues in the future. 


Batteries do not face any serious threat because they are an item of recurring use, providing portable energy at an affordable cost. Subject is adequately protected from competition due to its enduring brand equity, tangible quality and ease of availability due to its deep distribution. 

 
Cheap imports have also not proved to be a threat because of their inherently poor quality While these low cost products did invite initial use on the basis of the price differential, their sustained use is unlikely as price and quality have been proved as directly proportionate. 

 
Alkaline batteries, popular in the West, also do not pose a threat because of price-sensitive nature of the Indian consumer leading to a mere 0.5 per cent share of the market despite being present for over 12 years. In any case Subject has presence in this segment and will be able to participate in any opportunity the market presents. 
 
Given the overall positive scenario, a tangible threat to battery consumption lies in making the product unaffordable to poorer segments of the economy as was evidenced in the year under review (explained more fully in the next section). 

 
Risks and concerns: 

Aggressive raw material price increase represents an area of concern. A key raw material, Zinc, grew by more than 100 per cent during the course of the year under review this of course is a general phenomenon, not limited to the company alone. The Company mitigated the adverse impact by passing this to the market through a series of price increases. Yet, there were timelags between incurring of the increased cost impact and implementation of the price increase. This kept margins under continuous pressure. 

 
The more disturbing side to this phenomenon was the products becoming unaffordable to large sections of the consuming class due to the above aforesaid price increases. There was finally stiff resistance to these and consumers decided to reduce or defer consumption. 


There has, however, not been any change in the basic fundamentals of the business. The demand drivers continue to be the same and the Indian market continues to offer major potential for growth being a consumer of perhaps the lowest number of batteries in the world. The current downturn relates to a severe cost push and consequential price hikes which the consumers were not able to absorb immediately. It is expected that after the initial difficulty of adjusting to the new high cost regime, the market will gradually come back to consumption levels as determined by fundamental demand. Input costs will continue to put pressure - at least in the short to medium term. However Subject  has already taken adequate pricing measures and has also resorted to material hedging mechanisms. So the impact on this account is perhaps not going to be significant. 

 
Apart from the above, the Company has a well documented Risk Management System, which is reviewed by an active Steering Committee appointed by the Board of Directors. The risk registrar does identify a few risks, which are purely routine in nature and none of any significant impact. There is a mitigation system in place which addresses these risks as part of routine management process. 


Flashlights: 
The flashlight market is determined by Subject  because it is virtually the only organized player in the market. 
 
The segments in the flashlights market were traditionally determined by the material used for manufacturing the flashlight viz., Brass, Plastic, and Aluminum. 

 
Historically the 'brass' segment was the most popular among consumers -especially in the rural areas. However, during the year under review prices of brass flashlights had to be increased manifold on account of the cost push of the underlying base metals - zinc and copper. This was thoroughly resisted by the consumers and brass flashlights volume de-grew by a significant 39 per cent. Also, aggravated by the price increases in batteries, the entire flashlights market de-grew by more than 20 per cent. 

 
As a mitigation measure and with a view to giving consumers a cheaper option, the year under review saw the advent of a new segment which became determined by the type of light source used. This new segment has popularly come to be known as the 'LED' segment due to usage of LED bulbs being used as the light source. Subject  has been at the forefront of introduction of this new segment and has encouraged consumers to take to it due to the advantage of lower battery consumption in these flashlights.

 
While 'LED' flashlights do not fully meet all functionalities of the traditional flashlights, this new segment has been taken on enthusiastically by the extremely price conscious segment of consumers and Subject  believes that offering products right across the span will grow user-ship and will also provide boost to battery demand. 

 
As mentioned earlier, the industry is dominated by Subject . There are a few marginal players, none of whom have any significant position and no new trend seems to be emerging in this respect. 

 
Performance review: 

During 2006-07, Subject  had revenue de-growth of nearly 21 per cent. This was mostly contributed by the volume de-growth across the segments - most pronounced in the 'brass' segment. As already explained in the previous section, this is attributed to consumer's reaction to the steep price increases of flashlights and also that of batteries which power the same.

 

The price increases were unavoidable due to very steep cost increase of zinc and copper. 

 

Opportunities and threats: 

Moving beyond the temporary setback of the year under review - caused by assignable reasons beyond control - India's flashlights industry is expected to grow at a steady pace across all its segments. However, a vast dormant population (almost 45 Million rural households) of non-users represents a large flashlights opportunity, which the Company expects to convert into users over the foreseeable future. 

 
Risks and concerns: 

Rising metal prices of zinc and copper continue to be an area of concern in the manufacture of brass flashlights. The problem is not only in suffering a squeeze on margins, but also getting lower demand in reaction to price increases. Prices of popular brass torches went up steeply during the year and consumption came down significantly. Given that nearly all of brass torch consumption comes from he price-sensitive rural segment, this remains a concern. 

 
As a mitigation measure, the new generation 'LED' flashlights have been introduced for the price-sensitive consumers. The initial reaction has been encouraging and it is expected to fill the void left by de-growth of the 'brass' segment till the market restores its equilibrium.

 
Packet Tea:

Tea is the staple Indian beverage, sold either in loose, unbranded or packaged branded forms. In India, consumption is hugely skewed towards loose tea with a 60 per cent market share. India's packet tea industry is fragmented with a few large players occupying a significant share and several localized players accounting for regional competition. 

 
Subject  is leveraging its distribution pipeline to market this product and thus growing additional revenues on virtually no additional costs. Subject  has not really put any advertising money behind the four brands viz. Tez, Jaago, Premium Gold and Classic, which are positioned for different consumer segments. Yet these brands have gradually grown in consumer acceptance due to a tangible differentiation in quality, which has been a hallmark of Subject 's packet tea branding strategy. 

 
Given the industry's potential, fragmented nature and limited number of national players, Subject  is confident that it will soon emerge as one of the larger Indian players in this category Besides, the Company is confident that its superior quality at a competitive price will accelerate demand, strengthen its presence in potentially attractive markets and emerge as a significant revenue driver. 

 
Subject  has been growing this business at fairly brisk pace - though from a small base. It had value and volume growth of 17 and 9 per cent respectively in the year under review. 


Insect Repellents: 

The market for insect repellents is significantly large in India, which has a perennial problem in a large mosquito population and the serious diseases that mosquitoes inflict on mankind. The repellent market is primarily divided into the following segments:

  

·         Coils

·         Vaporizers

·         Skin cream 


Coils seemed immediately attractive because it is more used in the rural sectors, where Subject 's distribution set up is particularly strong. Subject  has thus started this diversification effort with coils and is now ready to enter the vaporizer market and perhaps later the niche skin cream segment.


The coils market is dominated by a few dominant players. Given the overwhelming dependence of these players on the wholesale channel, Subject  is confident that it will be able to break into the market successfully through its direct penetration in the rural areas. 

 
The coils market is unique in the sense that all the large players routinely outsource their products and there is really not much tangible differentiation across the products offered by the various companies. The larger players have been successful in establishing their franchise essentially through brand spending. While Subject  also is outsourcing the product, it is confident of gaining consumer acceptance through consciously thought-out product differentiation values. 


The business was launched close to the beginning of the year under review.


The reaction has been quite encouraging, but it is too early to comment on its performance. However, Subject  is confident that it is in a position to emerge as one of the larger players in this product category.


Information Technology: Subject  has traditionally invested in Information Technology (IT) to provide effective business solutions amenable to informed decision making. The IT process at the company is one of continuous improvement.


During the year, subject  standardized all its major applications across all locations on the Oracle Business Suite as an ERP solution. This exercise was not without the usual teething problems. However, the process seems to have been internalized well in the organization. Needless to state, the ERP system will bring the expected benefits associated with it in the forthcoming years.

 

Outlook: 
Financially the year under review was a disappointing one. The immediate targets for the Company are a swift revival and thereafter create a path for sustainable growth. This seems quite within realms of feasibility for a number of reasons: 


The buoyant India economy will sustain consumerism growth, which will benefit the FMCG segment subject  will take advantage of this growth. 

 

It is firmly believed that there has not been any change in the basic fundamentals of the market. The demand drivers and the potential offered by the presently low-consuming Indian market will continue to offer major potential for growth. 

 
After the consumer's initial difficulty in adjusting to the new high cost regime, the market will gradually come back to the consumption levels. 


Input costs will continue to put pressure - at least in the short to medium term. However, subject  having already taken adequate pricing measures and its metal cost hedging mechanisms will ensure perhaps only an insignificant impact. 

 

subject 's bouquet of products is uniquely positioned to address consumer needs at the base of the hierarchy of needs. New people coming to consumerism will easily take to these products. 

 
The new plant at Haridwar will expand margins due to excise duty benefits and will render higher net profitability on account of income tax being free. 


subject 's efforts in diversifying in to new products will add scale and profitability. To this effect the Company entered into an Agreement with Phoenix Lamps Limited . for sales and distribution of the latter's General Lighting Lamps (GLLs) excluding automotive applications under the brands of 'Halonix' from Phoenix and 'Eveready'.

 

 

OTHER INFORMATION:

The company has been accredited with ISO 9002 Certification.

 

Trial proceedings before the Crv^f Judicial Magistrate, Bhopal, on the modified charges framed under the directions of the Supreme Court that commenced in September 1997, are yet to be concluded. As per advice of legal counsel, allegations against the Company are without any firm basis and the possibility of proceeding against the Company succeeding is extremely remote. Since the charges are very likely to fail, no provision is necessary at this stage.

 

Based on valuation made by Professional Valuers, Brand 'Eveready' was valued at Rs. 6600.000 millions and was taken into books in 2004-2005.

 

Expert opinion was received whereby the working life of brand 'Eveready' was estimated at more than 100 years. However, as a measure of prudence the amortization period of the brand has been kt pt at 40 years only.

 

'Brand' included as Intangibles in Fixed Assets (Schedule 5) includes purchased brand [Gross Block Rs. 160.000 millions (31.03.2006 - Rs. 160.000 millions), Net Block Rs. 112.000 millions (31.03.06 - Rs.128.000 millions)].

 

Contingent Liabilities

Claims against the Corij any not acknowledged as debts :

- Excise- Rs. 119.740 millions net of tax, Rs. 79.458 millions (31.03.06- Rs. 91.066 millions net of tax, Rs. 60.414  millions)

 

- Sales Tax - Rs. 6C " 0 Lakhs net of tax. Rs. 4.027 millions (31.03.06 - Rs. 1.227 millions net of tax, Rs. 0.814 millions)

 

Income Tax :

• The Departrre it is in appeal in regard to matters decided in favour of the Company, the tax effect whereof is Rs. 7.205 millions (31.03.06 - Rs. 7.205 millions).

 

• The Company s in appeal in regard to assessment made the tax effect whereof Rs. 59.970 millions, (31.03.06 - Rs. 59.970 millions).

 

• In respect of matters relating to erstwhile The Bishnauth Tea Company Limited . (BTCL) (amalgamated with the Company effective 1st April, 2000), Rs. 12.548 millions is (31.03.06-Rs. 12.548 millions).

 

Based on professional advice, the Company is of the view that the provisions made for taxation are adequate and no further provision is needed.

 

Others-Rs. 19.139 millions net of tax, Rs. 12.697 millions (31.03.06 - Rs. 18.986 millions net of tax, Rs. 12.595 millions).

 

Bank guarantees Rs. 1.178 millions (31.03.06 - Rs. 22.203 millions).

 

The Company has given guarantees aggregating to Rs. 232.900 millions (31.03.06 - Rs. 229.900 millions) to financial institutions, banks and others on behalf of its subsidiary and another company. The amount outstanding against these guarantees as on 31.03.07 is Rs. 136.431 millions (31.03.06 - Rs. 144.597 millions).

 

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 22.098 millions (31.03.06 - Rs. 4.716 millions).

 

 

 

 

 

WEBSITE DETAILS:

The company is one of India’s most reputed FMCG companies.

 

The company has a portfolio comprising dry cell batteries (carbon zinc batteries, rechargeable batteries and alkaline batteries), flashlights (torches) and packet tea. It has recently forayed into the mosquito repellant industry under the brand name, ‘Poweron’.

 

The company is India’s largest selling brand of dry cell batteries and flashlights (torches), with dominant market shares of about 46% and 85% respectively.

 

Subject is the world’s third largest producer of carbon zinc batteries, selling more than a billion units a year. Its carbon zinc batteries dominate the Indian market with a complete range for all equipment types.

 

The turnover in the financial year 2005-06 for the company. was approx. US $ 176 million.

 

The Eveready brand is synonymous with power, with a durable franchise that has spanned over a century.

 

Subject  is celebrating its centenary year in India in 2005.

 

The new tagline “The Next Century of Power” affirms Eveready’s commitment to being technology leaders well into the future, evolving with consumers to meet their changing needs.

 

From small beginnings with an import consignment in 1905 of Rs 500, the company today dominates the Indian market and stands for portable power and light to millions of consumers.

 

As a brand, the War cry promises empowerment to young consumers in urban India.

 

The iconic symbol similarly stands for the assurance of power to rural consumers.

 

The Company’s packet tea business is also a fast-growing business and poised for greater gains in market share.

 

Management Team :-

Chairman (Non-Executive)

Mr. B.M. Khaitan

Eminent industrialist with more than 50 years of experience. Heads the Williamson Magor group of Companies. Entrepreneur of national repute.

 

Executive Personnel

Executive Vice Chairman and Managing Director

Mr. Deepak Khaitan

Chief Executive Officer of the Company
MBA from IMI, Geneva
Over 28 years of experience in steering diverse business enterprises in India

 

Whole time Directors

Suvamoy Saha

In charge of Finance, I T, Corporate Communications and New Business initiatives
B.Com (Hons.), A.C.A
Over 23 years of experience in corporate management in diverse fields

 

 

Non-Executive Personnel

Aditya Khaitan

Industrialist with expertise in steering diverse businesses.
Experience in Corporate Finance and Management of tea and Engineering industries

 

Bhaskar Mitter

Barrister-at-law (London)
Eminent professional with 60 years of experience.
Former Chairman of Andrew Yule group, CESC Ltd, BOC Ltd.
Has held positions as president of Bengal Chamber of Commerce & Industry and Associated Chamber of Commerce & Industry

 

Diwan Arun Nanda

MBA from IIM Ahmedabad
Eminent advertising and marketing professional with 38 years of experience
Been an entrepreneur who founded Redifussion India

 

P H Ravikumar

Eminent banking professional with 32 years of experience
Has held senior positions in Bank of India and ICICI Bank.
Currently, the Managing Director and Chief Executive Officer of National Commodity and Derivatives Exchange Ltd

 

Sanjiv Goenka

Vice Chairman of RPG Enterprises
Chairman of Board of Directors of IIT, Kharagpur.
Has been the youngest member of Confederation of Indian Industry and Indian Chamber of Commerce

 

Vimal Bhandari

Chartered Accountant.
Country Head for AEGON International N.V, the large Dutch life insurance, asset management and pension Company.
Has several years experience in corporate finance, investment banking, project finance and asset management,
Was Executive Director of Infrastructure Leasing & Financial Services Ltd and is on the Board of various Companies.

 

Mr. S. R. Dasgupta

Area Chairman for Eveready Battery Company for all Asia and Africa operations (1998-99),
Vice-President/Managing Director of Eveready Singapore Pte. Ltd. (1996-98)
and President Director - PT Eveready Company Indonesia, Jakarta (1986-95)

 

 

 

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.40.62

UK Pound

1

Rs.81.29

Euro

1

Rs.64.09

 

 

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

YES

--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