MIRA
INFORM REPORT
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Report Date : |
10.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
DEEPAK NITRITE LIMITED |
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Registered Office : |
9/10, Kunj Society,
Alkapuri, Vadodara - 390 007, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
06.06.1970 |
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Com. Reg. No.: |
04-001735 |
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CIN No.: [Company
Identification No.] |
L24110GJ1970PLC001735 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PNED03452B |
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PAN No.: [Permanent
Account No.] |
AAACD7468A |
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Legal Form : |
A public limited liability company. The company’s shares are listed on
the Stock Exchange. |
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Line of Business : |
Manufacturer of chemicals. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 8382000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having fine track.
Trade relations are fair. Business is active. Payments are reported as slow
but correct. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
9/10, Kunj Society, Alkapuri, Vadodara - 390 007, India |
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Tel. No.: |
91-265-2351013 / 2334481-82 |
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Fax No.: |
91-265-2330994 |
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E-Mail : |
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Website : |
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Corporate Office : |
Deepak Complex, National Games Road, Yerawada, Pune - 411 006, India |
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Tel. No.: |
91-20-66090200 |
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Fax No.: |
91-20-26685448 |
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Factory 1 : |
4-12, GIDC Chemical Complex, Nandesari-391340, Dist.
Vadodara |
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Factory 2 : |
Taloja Chemical Division, Plot Nos. K/9-10, MIDC
Taloia, District Raigad-410208 |
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Factory 3 : |
APL Division, Plot
Nos.1,2,26&27, MIDC Dhatav, Roha, District Raigad-402116 |
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Factory 4 : |
Hyderabad Speciamies Division, Plot Nos. 90-F/7O A
/ B, Phase II, Industrial Development Area, Jteedimetia, Tal. Qutbulapur
Madal, District Ranga Reddy, Hyderabad-500 055 |
DIRECTORS
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Name : |
Mr. Chimanlal Mehta |
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Designation : |
Chairman |
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Name : |
Mr. Deepak C Mehta |
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Designation : |
Managing Director |
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Name : |
Mr. Ajay C Mehta |
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Designation : |
Managing Director |
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Name : |
Mr. Shrenik Kasturbhai Lalbhai |
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Designation : |
Director |
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Name : |
Mr. S. S. Aggarwal |
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Designation : |
Director |
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Name : |
Mr. M. R. B. Punja |
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Designation : |
Director |
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Name : |
Mr. A. K. Dasgupta |
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Designation : |
Director |
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Name : |
Mr. Hasmukh Shah |
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Designation : |
Director |
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Name : |
Mr. Nimesh Kampani |
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Designation : |
Director |
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Name : |
Mr. Sudhin Choksey |
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Designation : |
Director |
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Name : |
Mr. Berjis Desai |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Sanjay Upadhyay |
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Designation : |
Vice President (Finance) and Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
4502049 |
50.23 |
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Mutual Funds |
1800 |
0.02 |
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Financial Institutions, Banks |
364719 |
4.07 |
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Bodies corporate |
676713 |
7.55 |
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Non Resident Individuals |
32217 |
0.36 |
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Resident Individuals and Trust |
3385735 |
37.77 |
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Total |
8963233 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of chemicals. |
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Products : |
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PRODUCTION STATUS [As on
31.03.2008]
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Particulars |
Unit |
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Installed
Capacity |
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Inorganic Salts |
MT |
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36430 |
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Dinitrosopentamethylene Tetramine |
MT |
|
1800 |
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Dye Intermediates |
MT |
|
660 |
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Nitro Aromatics |
MT |
|
35200 |
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Aromatics Amines |
MT |
|
12600 |
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Agro Chemical Intermediates |
MT |
|
8700 |
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Colour Intermediates |
MT |
|
6600 |
GENERAL
INFORMATION
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Suppliers : |
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No. of Employees : |
700 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
B.K. Khare and Company Chartered Accountants |
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Address : |
Mumbai, Maharashtra, India |
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Solicitors : |
M and M Legal Ventures Solicitors |
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Address : |
Mumbai |
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Collaborators : |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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30000000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 millions |
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2000000 |
Preference Shares |
Rs.100/- each |
Rs.200.000 millions |
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Total |
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Rs.500.000
Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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8963233 |
Equity Shares |
Rs. 10/- each |
Rs. 89.632
Millions |
Of the above Equity Shares:
a. 1980000 (1980000)
Equity Shares of Rs.10/- each were allotted as Bonus Shares by capitalisation
of General Reserve.
b. 2916000
(2916000) Equity Shares of Rs.10/- each fully paid up were allotted at a
premium of Rs. 40/- per share on conversion of Debentures.
c. 232062
(2,32,062) Equity Shares of Rs.10/- each fully paid up were allotted pursuant
to Schemes of Amalgamation without payment being received in cash.
d. 29,81,171
(29,81,171) Equity Shares of Rs. 10/- each fully paid up at a premium of Rs.
140/- per share were allotted on Rights basis, along with 14,90,586 detachable
warrants at a premium to be decided by the Board of Directors at the time of
fixing the Record date during the 42nd month, [i. e. November, 2009], from the
date of allotment.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
89.633 |
89.632 |
59.821 |
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2] Share Application Money |
0.000 |
0.000 |
10.401 |
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3] Reserves & Surplus |
1586.825 |
1562.212 |
830.742 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1676.458 |
1651.844 |
900.964 |
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LOAN FUNDS |
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1] Secured Loans |
967.544 |
1203.982 |
924.310 |
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2] Unsecured Loans |
382.677 |
500.567 |
415.033 |
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TOTAL BORROWING |
1350.221 |
1704.549 |
1339.343 |
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DEFERRED TAX LIABILITIES |
206.258 |
216.887 |
194.152 |
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TOTAL |
3232.937 |
3573.280 |
2434.459 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1654.875 |
1788.518 |
1327.938 |
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Capital work-in-progress |
26.754 |
26.358 |
36.067 |
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INVESTMENT |
20.863 |
20.863 |
15.613 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
642.319
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659.230
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461.155 |
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Sundry Debtors |
953.069
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1091.741
|
586.769 |
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Cash & Bank Balances |
65.464
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60.504
|
39.720 |
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Other Current Assets |
106.896
|
96.555
|
22.491 |
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Loans & Advances |
418.093
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590.672
|
278.476 |
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Total
Current Assets |
2185.841
|
2498.702 |
1388.611 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
606.154
|
691.504
|
294.596 |
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Provisions |
56.133
|
96.780
|
82.476 |
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Total
Current Liabilities |
662.287
|
788.284 |
377.072 |
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Net Current Assets |
1523.554
|
1710.418
|
1011.539 |
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MISCELLANEOUS EXPENSES |
6.891 |
27.123 |
43.302 |
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TOTAL |
3232.937 |
3573.280 |
2434.459 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
4680.608 |
4171.541 |
3472.883 |
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Operating Income |
24.396 |
31.948 |
52.888 |
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Other Income |
16.268 |
318.300 |
12.365 |
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Total Income |
4721.272 |
4521.789 |
3538.136 |
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Profit/(Loss) Before Tax |
67.380 |
379.005 |
204.463 |
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Provision for Taxation |
[2.863] |
22.209 |
63.099 |
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Profit/(Loss) After Tax |
70.243 |
356.796 |
141.364 |
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Earnings in Foreign Currency : |
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Total Earnings |
2025.567 |
1779.039 |
1647.578 |
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Imports : |
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Raw Materials |
930.955 |
732.883 |
569.061 |
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Stores & Spares |
0.000 |
0.000 |
0.936 |
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Capital Goods |
0.000 |
2.546 |
8.707 |
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Others |
22.926 |
97.454 |
53.627 |
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otal Imports |
953.881 |
832.883 |
632.331 |
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Expenditures : |
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Manufacturing Expenses |
613.667 |
0.000 |
0.000 |
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Administrative, Selling and General Expenses |
257.919 |
221.817 |
205.836 |
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Raw Material Consumed |
3043.488 |
2868.989 |
2249.800 |
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Increase/(Decrease) in Finished Goods |
55.019 |
[123.626] |
[83.928] |
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Employees Remuneration |
340.380 |
290.111 |
251.487 |
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Interest and Financial Chares |
178.572 |
162.956 |
127.840 |
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Power & Fuel |
0.000 |
0.000 |
0.000 |
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Depreciation & Amortization |
164.293 |
147.970 |
114.418 |
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Other Expenditure |
0.554 |
574.566 |
468.220 |
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Total Expenditure |
4653.892 |
4142.783 |
3333.673 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 |
30.09.2008 |
|
Type |
|
1st Quarter |
2nd Quarter |
|
Sales Turnover |
|
1263.100
|
1535.600
|
|
Other Income |
|
7.400
|
4.600
|
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Total Income |
|
1270.500
|
1540.200
|
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Total Expenditure |
|
1023.800
|
1327.700
|
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Operating Profit |
|
246.700
|
212.500
|
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Interest |
|
39.200
|
35.900
|
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Gross Profit |
|
207.500
|
176.600
|
|
Depreciation |
|
41.100
|
39.000
|
|
Tax |
|
49.300
|
42.300
|
|
Reported PAT |
|
117.100
|
95.300
|
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.93 |
1.21 |
1.61 |
|
Long Term Debt-Equity Ratio |
0.57 |
0.78 |
1.12 |
|
Current Ratio |
1.52 |
1.45 |
1.32 |
|
Fixed Assets |
1.68 |
1.67 |
1.61 |
|
Inventory |
7.83 |
8.16 |
8.36 |
|
Debtors |
4.96 |
5.42 |
5.82 |
|
Interest Cover Ratio |
1.38 |
1.54 |
2.86 |
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Operating Profit Margin(%) |
8.05 |
8.75 |
12.51 |
|
Profit Before Interest And Tax Margin(%) |
4.83 |
5.51 |
9.53 |
|
Cash Profit Margin(%) |
4.60 |
5.55 |
7.29 |
|
Adjusted Net Profit Margin(%) |
1.38 |
2.31 |
4.31 |
|
Return On Capital Employed(%) |
7.79 |
9.19 |
17.24 |
|
Return On Net Worth(%) |
4.27 |
8.41 |
20.10 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject the flagship company of the Deepak Group of
Companies, started with the manufacture of an import substitute chemical - Sodium
Nitrite in 1972. Today it is a multi product company with a diversified product
portfolio manufacturing basic and intermediate chemicals, Colourants and
Imaging Chemicals Intermediates, Agrochemical Intermediates, Pharmaceutical
Intermediates, Rubber Chemical Intermediates, Chemicals for the Refineries,
Cosmetics etc.
Subject manufacturing facilities at different locations in the Western part of
India. The company manufactures Inorganic, Organic and Fine and Speciality
chemicals. There are two units in the state of Gujarat and three units in the
state of Maharashtra. The Inorganic Chemicals are produced at one of the
facilities in Gujarat while the Organic and Fine and Speciality chemicals are
produced at the other facilities. One of the facilities is devoted to the
activity of Hydrogenation and Reductive Alkylation. Each of the facilities has
DCS controlled operations.
The company's technological growth has been achieved through its In-house
Research as well as assistance from premier Research Institutes like the
University Department of Chemical Technology, Mumbai, National Chemical
Laboratory, Pune, Indian Institute of Chemical Technology, Hyderabad as well as
Projects and Development India Limited, New Delhi.
Subject has a global presence in over 20 countries, including USA, European
Union and East European nations, Japan, ASEAN countries, South Korea and South
America. The company foresees a quantum leap in export turnover through Custom
Manufacturing for the specific needs of the end users and the manufacture of
high-value, speciality products either based on its own end products or
developed especially for the user. Subject has been ranked amongst the top 500
Body corporate by Dun and Bradstreet for the last three years.
With an investment of Rs.13 million the company began its operations with a
fully indigenous Sodium Nitrite and Nitrate plant at Nandesari, Baroda. The
acquisition of Sahyadri Dyestuffs and Chemicals brought into its fold a unit
for dyes, organic intermediates and fine chemicals in 1984. Guanidine nitrate
and hydroxylamine sulphate, vital ingredients for the drug industry, were
introduced in 1988-89. To intensify exports, subject set up a new division,
Deepak International in 1989.
To diversify into nitroaromatics and allied products in technical collaboration
with Biazzi, Switzerland, the company tapped the market with a rights issue in
1991. It proposed to produce a range of nitroaromatics like nitro
chlorobenzene, ortho nitro chlorobenzene, para nitro toluene, ortho nitro
toluene, ethyl hexyl nitrate and other nitrated esters which find application
in dyes, pharmaceuticals, Defence, agrochemicals, etc.
1999-2000, the Taloja Chemical Division and Sahyadri Dyestuffs and Chemicals
Division received a prestigious certificate under ISO 9002 from KPMG Quality
Register to its current range of products. The company having achieved the
Export House status showing a growth of 13% over the last year and hence
received a Merit Certificate by the Indian Chemical Manufacturers Association
(ICMA) in the category of export of chemical products
The company sucessfully completed a Public Offer to the Aryan Pesticides
Limited (APL) and thereby acquired about 8% of the paid up capital of APL. APL
is engaged in the manufacture of intermediates for agrochemicals and dyestuffs.
In 2002-03, the company acquired the additional equity in Aryan Pesiticides
Limited which stands at 76.92%.As a result Aryan Pesticides became subsidiary
of the company
During April 2004, Aryan Pesticides Limited has been amalgamated with the
company and according to the scheme of amalgamation, shareholders of Aryan
Pesticides Limited will get One Equity Share of Rs.10 each of Deepak Nitrite
Limited for every Five Equity Shares of Rs.10 each held in Aryan Pesticides
Limited.
During 2005-2006, the company is in the process of relocating/shifting its
manufacturing activities of Sahyadri Dyestuffs and Chemical Division located at
Sinhagad Road, Pune in view of the environmental considerations.
The companies’ production capacity of Aromatic Amines expanded during the year
from 9600 MT to 12600 MT and Dinitrosopentamethylene Tetramine expanded from
600 MT to 1800 MT.
REVIEW OF THE
YEAR:
For the fiscal
2007-2008, the Company earned Rs. 70.200 Millions profit after tax (PAT) on
total income of Rs. 4721.200 Millions. Total income grew by 12% over the last
year. The increase in domestic sales by 21 % from Rs. 2180.000 Millions to Rs.
2640 Millions was the major contributory to the rise in total income this year.
The exports sales showed a modest growth of 3% and grew from Rs. 1990 Millions
to Rs. 2040 Millions.
The performance of
the Company during the first half was severely affected due to non availability
of key inputs which forced the Company to close the respective plants for a
period of 75 days, increase in input prices and low realizations as a result of
unhealthy Chinese competition. The performance of the Company started improving
from the third quarter as a result of much improved realizations due to stricter
compliance policies of the Chinese Government for the local industry, change in
global macro-economic conditions as well as certain strategic initiatives taken
by the Company.
The Company has
planned investments for the purpose of augmenting the capacities of the
existing plants to satisfy the increasing demand for the Company's products,
and also in energy efficient utility equipment to reduce costs. These measures
will help in enhancing the revenues as well as profits for the future years.
FINANCE:
During the year,
the Company raised long-term Secured Loans of Rs.90.900 Millions and repaid
installments of Rs.159.800 Millions..
The Company, with
the approval from warrant holders, amended the terms of the Detachable Warrants
allotted on 5th May 2006 which would have been due for conversion in the month
of November 2007 in consultation with the Bombay Stock Exchange as under:
1) The Record Date
for conversion of the Warrants be fixed by the Board of Directors during the
42nd month from the Date of Allotment i.e. in the month of November 2009
instead of 18th month from the Date of Allotment.
2) The Warrants be
converted at a premium to be decided by the Board of Directors at the time of
fixing the Record Date.
3) The unexercised
Warrants out of the Warrants issued, instead of allowed to lapse, be offered
and allotted to the Warrant holders who are applying for additional shares at
the time of conversion of Warrants.
4) The remaining
unexercised Warrants be allowed to lapse.
5) In case of
over-subscription for such additional shares, the additional shares applied for
be allotted on pro-rata basis.
MANAGEMENT
DISCUSSION AND ANALYSIS
1. INDUSTRY
STRUCTURE AND RECENT DEVELOPMENTS:
The company is
emerging as a noticeable player in the Intermediates markets. As you know, we
operate in three major business segments - Inorganic intermediates, Organic
intermediates and Fine & Speciality intermediates.
The Inorganic
Intermediates contributed about 15% of the total sales turnover. Sodium Nitrate
and Sodium Nitrite - the two most significant products from this portfolio
enjoy dominating market shares in domestic markets. Large capital investment
has been the key entry barrier for any new entrant in the market.
The Organic
Intermediates is the largest business segment of their portfolio accounting for
53% of the sales turnover. Within the segment, Nitroaromatics and Aromatic
amines constitute the bulk of the sales in this segment. The global NCB
industry has consolidated largely around China and India with the Chinese
having a very clear edge in terms of capacities. However, as the fortune of
this segment is decided by the isomer market balance, the large capacities do
not seem to provide equivalent market advantage. The Company has created
multipurpose flexibility in the
plants which gives
the Company an ability to change the product mix to meet the changing market
requirements. For NT part of this business segment, European producers are
significant competitors besides the Chinese.
The Fine and
Speciality Chemical division is characterized by low volume knowledge intensive
performance chemicals. Close interaction with the markets and the customers is
the key to the success in this segment.
2. OPPORTUNITIES
AND THREATS:
Due to earlier
policies of the Chinese Government to support the smaller manufacturers through
financial incentives such as tax breaks, export incentives etc., and also
excessively liberal laws as regards effluent treatment, many Chinese
manufacturers could offer unrealistically low prices in the market place.
However, since September 2007, the Chinese Government has changed their
approach and basic policies, which has resulted in reducing unfair competition
on unrealistic prices. Also, they have become extremely serious as regards
pollution abatement and hence many manufacturers who did not have adequate
effluent treatment facilities and who were not spending money to effectively
treat the effluent, were forced to do so, resulting in increased cost of
manufacture and consequently increase in the prices of their products. This has
given a rise to great opportunities for Indian manufacturers. The Company has
made business plans taking into consideration this emerging opportunity.
Prices of many products
are on the rise and hence there is a great possibility that many companies
would see this great opportunity and would take a plunge into this business
resulting in additional capacities. This is really a serious threat.
The Company has
worked on short term, mid-term and long term strategy and decided upon a
product portfolio to exploit the opportunities as well as to handle the
threats.
3. SEGMENT-WISE
PERFORMANCE:
Inorganic
Intermediates
The turnover of
this segment has increased by 17% from Rs.600 Millions to Rs.710 Millions
during the year. This was largely due to increase in sales quantity and
improved realization mainly on account of increased prices from China which in
turn resulted in better margins for the segment.
Organic
Intermediates
The turnover of
this segment at Fts.2500 Millions has remained more or less at the same level
as that of the previous year.
The performance of
one of the agro intermediate products has improved in the current year as
compared to the previous year. This is mainly due to increase in demand for
corn / herbicides in Europe and USA required for bio-fuel. In order to meet the
demand in the second half, the Company converted other nitration plants to make
additional quantities in place of low margin products.
In this financial
year, the sale of paracumedine got adversely affected due to decrease in demand
of isoproturon whereas it has favourably impacted xylidine.
Fine and
Speciality Chemicals
The turnover of
this segment has increased by 46% from Rs. 1010 Millions to Rs.1480 Millions
mainly because of products of Hyderabad Specialities Division (HSD), which has
been added to this segment. The domestic turnover has significantly increased
by 85% from Rs.360 Millions to Rs.670 Millions whereas export turnover from
Rs.650 Millions to Rs.810 Millions. The margins have improved in this segment
because of shipment of another high value agro-chemical
intermediates.
OUTLOOK:
The Company is
active in the area of chemical intermediates which find applications in varied
industrial fields such as dyes, pigments, rubber chemicals, agro-chemicals,
Pharmaceuticals, fuel additives etc. The trend in this area of business
activity for the last 3 to 5 years is movement of manufacturing capacities out
of US and Europe towards Asia in general and China and India in particular.
China had been able to grab most of the opportunities due to its
infrastructure, friendly policies of the Government as well as cost advantages
offered in terms of labor and energy. However, lately these advantages seem to
have been negated by substantial changes in industrial and fiscal policies as
also on account of stricter environmental norms. As a result and with changes
in macro-economic conditions globally, India is emerging as a preferred option
as a reliable partner for outsourcing for many European and American companies.
The Company has,
therefore, made specific plans to consolidate its position taking advantage of
this emerging scenario and also strengthen its position in the competitive
market place.
FIXED ASSETS
- Freehold land
- Leasehold
land
- Plant and
Machinery
- Research and
Development Equipments
- Factory and
other buildings
- Research and
Development buildings
- Roads
- Office
Equipments
- Furniture and
Fixtures
- Vehicles
- Ammonia
Tankers
Contingent liabilities not provided for:
(a) Disputed
Income Tax, Sales Tax and Excise liabilities Rs.49.990 Millions.
(b) In respect of
the proceedings initiated by Gujarat Pollution Control Board, the Supreme Court
has since remanded back the matter to the High Court of Gujarat to re-examine
the compensation of Rs.8.669 Millions
(Rs.8.669 Millions) awarded earlier, after considering as to whether any
damage was caused due to alleged degradation to the environment. Pending
re-examination by the High Court, no provision is made in the accounts in
respect of the said liability.
(c) The Company
has received a demand notice for Rs.100.138 Millions (Rs.100.138 Millions) from
the Commissioner of Customs against which the appeal preferred by the Company
was rejected on procedural ground by the CESTAT. However the Hon'ble High Court
of Judicature, Mumbai set aside the order of CESTAT and directed it to hear the
case on merits. CESTAT vide its order dated 10th November 2005 has stayed the
recovery and waived the pre deposit of duty and penalty pending final hearing
of the case. Based on legal opinion, the Company is of the opinion that the
demand is not sustainable on merits.
AS PER WEBSITE
Products
The company's strength includes years of in-house expertise,
a proven track record of innovation and indigenous development, an R&D
facility with a range of sophisticated equipment and expertise in storing and
handling various types of chemicals.
Subject produces a spectrum of chemicals. It caters to a wide range of
industries including Colourants, Agrochemicals, Pharmaceuticals, Rubber,
Speciality and Fine chemicals.
It is
also a manufacturer of a wide range of intermediates for use in industrial
explosives, paints, cosmetics, lubricants, polymers, optical brighteners,
photographic chemicals, petroleum additives, specialty fibres and water
treatment chemicals. Other products manufactured are tailor made as per the
needs and specific requirements of the customer.
The
spectrum of Industries catered:
· Agrochemical Intermediates
· Intermediates for Colourants and Imaging Chemicals
· Pharmaceutical Intermediates
· Fine and Speciality Chemicals
· Rubber Chemical Intermediates
· Intermediates for OBA (Optical Brightening Agents)
From an import substitution company to an export powerhouse
Company
Profile
Subject is the flagship company of the Deepak Group of
Companies – has come a long way since it was set up in the 1970s to support
India's drive towards self-sufficiency and import substitution. Today, revenues
from its exports to over 20 countries, including the US, Japan, Korea and
Europe, contribute almost 40% of its turnover of Rs.2800- Millions. Subject
recently crossed a landmark in its export thrust - touching the Rs. 1000
Millions mark from its international business. For the year 2003-04, exports
rose an impressive 44% over the previous year to close at Rs.1120- Millions
driven by the strong performance of exports of fine chemicals. However, the
company has no plans to rest on its laurels, but has already set sights on the
next milestone of achieving 50% of its turnover from exports.
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. 47.76 |
|
UK Pound |
1 |
Rs. 74.87 |
|
Euro |
1 |
Rs. 60.81 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
56 |
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 |
|