MIRA INFORM REPORT

 

 

 

Report Date :

02.05.2008

 

 

IDENTIFICATION DETAILS

 

Name :

PODDAR PIGMENTS LIMITED

 

 

Registered Office :

Plot No. E – 10, 11 and F – To 16 Riico Industrial Area, Sitapura, Jaipur 303905, Rajasthan

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

11.11.1991

 

 

Com. Reg. No.:

006307

 

 

CIN No.:

[Company Identification No.]

L241117RJ1991PLC006307

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

JPRP00449B

 

 

Legal Form :

Public Limited Liability company. Company’s Shares are Listed on the Stock Exchange

 

 

Line of Business :

Manufacturing of specially Masterbatches and Engineering Plastic Compound

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

USD 1200000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well – established and reputed company having satisfactory track. Trade relations are fair. Business is active. Payments are reported as usually correct and as per commitments.

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

 

 

LOCATIONS

 

Registered Office / Factory :

Plot No. E-10, 11 & F-14 to 16, RIICO Industrial Area, Sitapura P. O., Shri Ram Ki Mangal, Via Vatika, Jaipur – 302 022, Rajasthan

Tel. No.:

91-141-22580202 / 22580203 / 22580291 / 22580287 / 22770202 / 22770203

Mobile No.:

 

Fax No.:

91-141-22582922/22771922

E-Mail :

ppljpr@datainfosys.net

jaipur@poddarpigments.com

 

 

Head Office :

8A and 8B, `Satyam Towers’, 3, Alipore Road, Kolkata – 700 027, West Bengal India

Tel. No.:

91-33-4399485, 91-33-4399486

Fax No.:

91-33-4399489

E-Mail :

headoffice@poddarpigments.com

 

 

Corporate Office :

301,’Abhishek’ Off New Link Road, Andheri (west), Mumbai – 400 053 

 

 

DIRECTORS

 

Name :

Smt. Kusum Poddar   

Designation :

Board of Director

 

 

Name :

Mr. M. K. Sonthalia

Designation :

Board of Director

 

 

Name :

Mr. N. Gopalaswamy

Designation :

Board of Director

 

 

Name :

Mr. R. K. Sureka

Designation :

CEO

Qualification :

B.Com.(Hons.), FCA, ACS

Date of Appointment :

8th October, 1994

Previous Employment :

Hindustan Development Corporation Limited – Assistant Vice President (Finance), Mayuka Investment Limited, Trustline Capital Finance Limited

 

 

Name :

Mr. S. S. Poddar

Designation :

Managing Director

Other Directorships

Lanco Industries Limited, Express Publications (Madurai) Limited, Trustline Capital Finance Limited

 

 

Name :

Mr. V. K. Fogla

Designation :

Director

Date of Appointment :

Since 1994

Other Directorship

Express Publications (Madurai) Limited, Express Publications (Chennai) Limited, Siddhartha Media Holdings Private Limited, Sterling Newspapers Private Limited, Express News Services Private Limited

 

 

KEY EXECUTIVES

 

Name :

Mr. N. D. Dujari

Designation :

Company Secretary

Address :

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders (As on 31.03.2007)

No. of Shares

Percentage of Holding

Resident Individual

5048245

41.38%

Domestic Company

7082915

58.06%

Non Resident Indian

4900

0.04%

Mutual Funds

62700

0.51%

Others

1240

0.01%

Total

12200000

100.00%

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of specially Masterbatches and Engineering Plastic Compound

 

 

 

Products :

Item Code

Product Description

320619, 381230.19, 320630.00

Speciality Masterbatches

390799, 390890

Engineering Plastic Compounds

 

 

 

PRODUCTION STATUS

 

Particulars

Unit

Installed Capacity

Actual Production

 

Speciality Masterbatches [including Engineering Plastic compounds]

M.T.

7200

--

Speciality Masterbatches

M.T.

--

5530.74

Engineering Plastic Compound

M.T.

--

30.14

 

 

GENERAL INFORMATION

 

No. of Employees :

320

 

 

Bankers :
  • State Bank of India, I South Exth Branch, Delhi 110049
  • Bank of Baroda, 16 Community Centre, East of Kailash, New Delhi
  • Indian Overseas Bank, Nehru Place Branch, New Delhi 110019
  • Punjab National Bank

 

 

Facilities :

Secured loan

As on 31.03.2007

From Bank

(Rs. In Millions)

(a) Term Loan :-

 

- Foreign Currency Loan

17.678

- Interest accrued and due

0.139

 

17.817

(b) Working Capital Borrowings

43.175

 

60.992

Notes :

  1. Item No. (a) is secured by first charge by way of equitable mortgage on the Company’s present and future immovable properties except that equitable mortgage on Chennai property ranks pari-passu with the working capital lenders hypothecation of movable properties (except specified movable properties and Book Debts for which charge has been created in favour of Bankers of the Company for working capital borrowings.) Item No. (a) is also guaranteed by a Director of the company and second charge on current assets of the company.
  2. Item No. (b) is secured by hypothecation of inventories, Book-debts, Bills Receivables and other movables both present and future and first charge on Chennai property {ranking pari-passu with item No. (a) and the second charge on other immovable properties of the Company. It is also guaranteed by Director of the Company.
  3. Term Loan repayable within one year Rs.17.818 Millions (previous Year Rs. 18.080 Million)

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

M/s. K. N. Gutgutia and company

Chartered accountant

Address :

New Delhi

 

 

Associates/Subsidiaries :
  • Uddhav Trading Private Limited
  • Genex Commercial Company Limited
  • Trustline Capital Finance Limited
  • Pluto Tradelinks Limited
  • G. K. S. Holdings Limited
  • Rajasthan Petro Synthetics Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

12500000

Equity Shares

Rs. 10/-each

Rs.125.000 (Millions)

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

12200000

Equity Shares

Rs. 10/-each

Rs.122.000 (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

122.000

122.000

122.000

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

182.247

165.179

153.700

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

304.247

287.179

275.700

LOAN FUNDS

 

 

 

1] Secured Loans

60.992

75.622

68.900

2] Unsecured Loans

0.000

0.000

0.000

TOTAL BORROWING

60.992

75.622

68.900

DEFERRED TAX LIABILITIES

33.389

34.002

0.000

TOTAL

398.628

396.803

344.600

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

163.944

187.603

200.500

Capital work-in-progress

0.000

0.316

0.300

 

 

 

 

INVESTMENT

0.023

10.039

1.900

DEFERREX TAX ASSETS

0.000

0.000.

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
191.343

186.061

141.000

 

Sundry Debtors
117.140

89.602

77.700

 

Cash & Bank Balances
28.070

16.379

10.800

 

Loans & Advances
61.270

37.149

51.700

Total Current Assets
397.823

329.191

281.200

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
96.088

84.670

102.300

 

Provisions
67.074

45.676

37.000

Total Current Liabilities
163.162

130.346

139.300

Net Current Assets
234.661

198.845

141.900

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

398.628

396.803

344.600

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

916.904

753.827

716.800

Other Income

9.711

7.917

29.000

Total Income

926.615

761.744

745.800

 

 

 

 

Profit/(Loss) Before Tax

30.050

16.765

15.800

Provision for Taxation

0.000

0.000

4.100

Profit/(Loss) After Tax

17.068

8.761

11.700

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Export Earnings

241.882

144.854

N.A

 

Insurance Claim

0.026

0.003

N.A

 

Other Earnings

0.497

0.176

N.A

Total Earnings

242.405

145.033

N.A

 

 

 

 

Imports :

 

 

 

 

Raw Materials

395.597

335.253

N.A

 

Stores & Spares

1.948

165.8

N.A

 

Capital Goods

2.251

0.000

N.A

Total Imports

399.796

501.053

N.A

 

 

 

 

Expenditures :

 

 

 

 

Interest

9.998

8.193

 

Depreciation & Amortization

22.559

714.459

730.000

 

Trading, manufacturing and Other Expenditure

864.007

22.327

 

Total Expenditure

896.564

744.979

730.000

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

30.09.2007

31.12.2007

Type

1st Quarter

2nd Quarter

3rd  Quarter

Sales Turnover

243.700

248.500

240.000

Other Income

0.600

01.100

12.200

Total Income

244.300

249.600

252.200

Total Expenditure

226.000

228.200

221.000

Operating Profit

18.300

21.400

31.200

Interest

01.600

01.800

2.000

Gross Profit

16.700

19.600

29.200

Depreciation

05.600

06.100

05.900

Tax

02.000

04.700

06.400

Reported PAT

09.100.

08.800

16.900

 

KEY RATIOS

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Debt-Equity Ratio

0.23

0.26

0.28

Long Term Debt-Equity Ratio

0.09

0.16

0.25

Current Ratio

1.64

1.70

1.84

TURNOVER RATIOS
 

 

 

Fixed Assets

2.46

2.05

1.81

Inventory

5.31

5.10

4.94

Debtors

9.69

9.97

10.42

Interest Cover Ratio

2.76

2.41

3.13

Operating Profit Margin(%)

6.12

6.12

7.06

Profit Before Interest And Tax Margin(%)

3.86

3.44

2.79

Cash Profit Margin(%)

3.64

4.10

5.76

Adjusted Net Profit Margin(%)

1.39

1.43

1.49

Return On Capital Employed(%)

10.63

8.11

5.79

Return On Net Worth(%)

4.70

4.23

3.97

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

HISTORY

 

The company was incorporated on 11th November 1991 at Jaipur in Rajasthan having Company Registration Number 6307.

 

Set up in 1991, Subject, is the first company in India to manufacture fibre-grade masterbatches for spin-colouration of filament yarns/fibres of polypropylene, polyester and nylon. The company commenced production in Mar.'95 at its manufacturing unit at Jaipur, Rajasthan. The plant is backed up by self-generation of power. 

 
The company has developed Polyester Masterbatches in its Laboratory. The work on implementation of new extruder line for manufacture of Masterbatches is in progress. It is increasing the installed capacity to 3280 MT pa at a cost of Rs. 65.000 millions which is funded through term loan from IDBI. 

 
During the year 1998-99, the Company's project for increasing installed capacity of Polyester Masterbatches was implemented successfully and commercial production on the New Extruder commenced on 18.03.99. 
 
The company has been awarded ISO 9002 Certificate during the year 1999-2000

 

 

 

OPERATIONS


During the year, the Company has earned gross revenue of Rs.1017.600 Million as against Rs. 850.700 Million in the previous year registering an increase of 19.62% over the previous year. Although the margins continued to be under pressure due to severe competition and increase in overall expenses due to general increase in in-put cost, the Company has achieved much better results during the current financial year due to implementation of various cost-cutting measures and improvement in the product mix. This trend is expected to continue. 
 
 MARKETING 


Demand for the Company's products remained buoyant and has helped in facing price competition in both domestic and international markets and also increase in sales. The direct exports have registered an increase of 67% over the last year. With sustained continuous efforts and international quality standards, we expect further improvement in performance during the current year. The Company will continue seeking newer markets and consolidate it's hold over the existing customers.

 

 EXPANSION 
 
 Considering the global scenario and the increased demand for the Company's products, further expansion in the capacity is under consideration. 

Industry Structure and Developments 

Masterbatch 
 
 Masterbatches are colour concentrates dispersed in a polymer media like Polyester, polypropylene, etc and available in granular form. Other than the use as a colouring agents, masterbatches also impart functional properties like fire retardancy, anti-microbial, light fastness, etc. 

Masterbatches are used widely in textile industries, plastics, commodity and automotive industries. The advantages of use of masterbatch is manifold compared to other alternative methods. Being granules, it is easy to transport, have a very long shelf-life, clean working condition and is environment friendly. Furthermore, due to advancement in technology and intensive research and development, the acceptability and necessity of materbatches is on the increasing trend. 

The masterbatch industry can be broadly classified into three: organised, medium and small sector. A substantial part of the market is catered to by the small sector, comprising of a large number of small manufacturing units spread throughout the country. These units mostly cater to their respective localised markets. The medium sector is much smaller in size though it caters to a larger market. The organised sector comprises of select players including your Company and caters to the organised and quality conscious market. Due to high technology and quality requirement of the product, imports also play a major role. It is felt that the organized sector is taking over the market share from the small and medium sector due to increased quality consciousness. 

Over the years, the customers have gained confidence in the company for being a quality conscious and technology-driven corporate. Your Company has constantly endeavoured to innovate and take various measures to reduce cost and pass on the benefit of such reduction to its customers and this is the reason why the company has not only maintained its existing customers but have also added new customers. The exports of the Company during the year has increased by 67% over the previous year. The policy of the company is to provide 'niche' products to the industry and to maintain its novelty and exclusivity which has paid rich dividend even in the highly competitive market. 

The outlook in terms of growth in Masterbatch industry is bright due to its unique features. It has been estimated that the Masterbatch industry will grow at the rate of 15% for the next few years. To meet the increasing demand of the products on timely basis, your Company is planning further expansion of capacity during 2007-08. 

Engineering Plastic Compounds 

Inspite-of stiff competition, the Company's products have been well accepted by users and results are encouraging. However, the company could not achieve its target as estimated while venturing in this new activity due to non-availability of adequate production capacity. It is expected that the year 2007-08 will be promising for Company's new products. 

 The Company will leverage on quality and consistency of its products as well as on its R&D strength to meet the requirements of the customers. 

 
Opportunities and Threats 

 
 (i) The key opportunity includes: 

The Company is pioneer in manufacturing masterbatches for the synthetic fibre industry for speciality and general purpose applications such as automotive, carpets, home-furnishings, apparels, non-woven fabrics, technical fibres, etc. 

 

Due to superior quality of its products, the Company has been recognised by the market and it is expected that the demand of Quality Masterbatches and EPC products shall continue to grow. 


 
(ii) Key threats includes:

 

Any sudden slump in user industries may affect demand for the products of the Company and cut-throat competition may increase pressure on margins.

The relaxation in import tariff is likely to result in increased import and competition from Global players. Fluctuation in foreign currency also plays important role in the profitability of the company. 
 
 With continuous improvement in the technology and measures taken for cost effectiveness, the Company is expected to face the emerging challenges in a confident and optimistic manner. 

Business Outlook 

 
 As a forward looking statement it can be noted with greater optimism that Company's coming years appear to be heading for quantum growth and better allround performance. The Company is considering for further enhancement of its capacities. 

 
 The Company's emphasis on development of next generation products will enable it to stay ahead of competition in times to come. 

 
 In exports, the Company has made in-roads into some of the world's largest consumers of masterbatches. This has added to its credibility and recognition as a quality producer of masterbatches. 

 

 

 

(a) Contingent liabilities not provided for in respect of:-

 

As on 31.03.2007

(Rs. In Million)

(l) Bank Guarantees

2.136

(ii) Bonds Executed with Customs Authorities

43.000

(iii) Excise duty demand pending with adjudication authority for necessary order

1.712

(iv) Income Tax matter in appeals

3.762

(v) Sales Tax demands not admitted by the Company and for which appeals have been filed with appropriate authorities.

0.615

(vi) Bill discounting with banks

59.551

(vii) Service Tax demands not admitted by the Company.

0.024

 

 

Business Segment (Secondary Segment)

 

The company is in the business of manufacture of Masterbatches and Engineering Plastic Compounds. Since the operations of Engineering Plastic Compounds contributes less than 10 % of the company's total revenue/profits , the operations of Masterbatches is treated as one reportable business segment.

 

 

FIXED ASSETS

 

 

AS PER WEBSITE

 

Profile

 

The company's strength comes from the adaptation of proven technology from Europe and state-of-the-art manufacturing facilities, with production equipment from world leaders like Coperion Werner & Pfleiderer, C.F. Scheer , Brabender , Pallman from Germany.


A highly developed advanced Research & Development facility, manned by professionals, has been set up to extract the best results from sophisticated equipment for quality Control and Product Development. It also houses various facilities to conduct experiments on pilot scale.

 

The R & D facilities are used in conjunction with testing equipment from world leaders like Spinboy, Llyod, Macbeth, Ceast etc. These are used to test degree of dispersion, filterability, mechanical, rheological, thermal, optical & coloristic properties of incoming raw materials and outgoing furnished products. Tests are carried out Conforming to internationally accepted test methods.

The Company has its Head Office at Kolkata(Calcutta), Capital city of the eastern state of West Bengal. In addition there are well established branch offices manned by Technical/Commercial professionals in the three other metropolitan cities of India, namely New Delhi (North), Mumbai/Bombay(West) and Chennai(South). The company has further strengthened its presence in the country through a strong dealer network spread all over the country. Together, these ensure faster distribution of all the Company's products and quick response to the Customer's needs.

 

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 :

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

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

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

 

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

 

 

CONTRAVENTION

 

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

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.40.46

UK Pound

1

Rs.79.50

Euro

1

Rs.63.09

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

9

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

8

--RESERVES

1~10

7

--CREDIT LINES

1~10

7

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

Yes

--LITIGATION

YES/NO

No

--OTHER ADVERSE INFORMATION

YES/NO

No

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

Yes

--EXPORT ACTIVITIES

YES/NO

Yes

--AFFILIATION

YES/NO

Yes

--LISTED

YES/NO

Yes

--OTHER MERIT FACTORS

YES/NO

Yes

TOTAL

 

66

 

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