MIRA
INFORM REPORT
|
Report Date : |
11.11.2008 |
IDENTIFICATION
DETAILS
|
Name : |
TORRENT CABLES LIMITED |
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Formerly Known As : |
TORRENT GUJARAT BIOTECH LIMITED |
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Registered Office : |
Torrent House’, Off Ashram Road, Ahmedabad – 380 009,
Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
26.11.1960 |
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Com. Reg. No.: |
1004 [Old] 15279 [New] |
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CIN No.: [Company
Identification No.] |
L99999GJ1960PLC001004 / L24230GJ1991PLC015279 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BRDT00603B |
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PAN No.: [Permanent
Account No.] |
AAACT6739Q |
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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 : |
Manufacturing
and marketing of XLPE insulated PVC Sheathed Cables, PVC Insulated & PVC
Sheathed Cables and Rubber Cables. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 4700000 |
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Status : |
Good |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having satisfactory track. Trade relations
are fair. Business is active. No complaints have been heard from market
sources. The company can be considered good for normal business dealings. |
LOCATIONS
|
Registered Office : |
`Torrent House’, Off Ashram Road, Ahmedabad – 380 009,
Gujarat, INDIA |
|
Tel. No.: |
91-79-2405 090 / 2527 630 |
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Fax No.: |
91-79-2463 484 / 2460 048 |
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E-Mail : |
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Website : |
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Corporate Office : |
Chanakya, 7th
Floor, Off Ashram Road, Ahmedabad – 380 009, Gujarat |
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Factory : |
Yoginagar,
Mission Road, Nadiad (Dist. Kheda), Gujarat |
DIRECTORS
|
Name : |
Mr. Rohit C Mehta |
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Designation : |
Chairman |
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Name : |
Mr. V S Parikh |
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Designation : |
Director |
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Name : |
Mr. Prafull Anubhai |
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Designation : |
Director |
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Name : |
Mr. R S Agarwal |
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Designation : |
Director |
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Name : |
Mr. V A Shah |
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Designation : |
Director |
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Name : |
Mr. P K Adhikary |
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Designation : |
Director |
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|
Name : |
Mr. Prafull Anubhai |
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Designation : |
Director |
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|
Name : |
Mr. C R Shah |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. B K
Patel |
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Designation : |
Company
Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters |
|
|
|
a) Holding
Company |
4366439 |
58.38 |
|
b) Others |
303798 |
4.06 |
|
Financial
Institutions, Nationalised and other
Banks |
35100 |
0.47 |
|
Directors
& their relatives |
595 |
0.01 |
|
Corporate
Bodies |
242312 |
3.23 |
|
NRIs |
40135 |
0.54 |
|
General Public
|
2491383 |
33.31 |
|
Total |
7479762 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing
and marketing of XLPE insulated PVC Sheathed Cables, PVC Insulated & PVC
Sheathed Cables and Rubber Cables. |
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Products : |
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PRODUCTION STATUS
|
Particulars |
Unit |
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Licensed
Capacity |
Installed
Capacity |
|
XLPE
Insulates PVC |
Core Kms |
|
2000 |
6200 |
|
PVC Cabls |
Core Kms |
|
21.95 |
25000 |
|
Rubber Cables |
Core Kms |
|
0 |
2400 |
GENERAL
INFORMATION
|
No. of Employees : |
700 |
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|
|
|
Bankers : |
v
Bank of
Baroda, Ahmedabad, Gujarat. v
Union Bank of
India, Ahmedabad, Gujarat. v
State Bank of
India, Ahmedabad, Gujarat. v Axis Bank Limited, Ahmedabad, Gujarat |
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Banking
Relations : |
Satisfactory |
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Auditors : |
|
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Name : |
C C Chokshi and Company Chartered
Accountants |
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Associates/Subsidiaries : |
v
Torrent
Pharmaceuticals Limited v
Torrent Power
Limited v
Torrent
Gujarat Biotech Limited v
Torrent
Exports Limited v
Gujarat Lease
Financing Limited v
Torrent
Financiers v
The Ahmedabad
Electricity Company Limited v The Surat Electricity Company Limited |
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|
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Holding Company : |
v
Torrent
Private Limited |
CAPITAL STRUCTURE
AS ON 31.03.2008
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
25000000 |
Equity Shares |
Rs. 10/- each |
Rs. 250.000 Millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7490700 |
Equity Shares |
Rs. 10/- each |
Rs. 74.907
Millions |
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|
|
|
|
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
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 |
74.907 |
74.907 |
74.907 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
857.336 |
589.703 |
424.357 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
932.243 |
664.610 |
499.264 |
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|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
39.367 |
31.185 |
|
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
|
|
TOTAL BORROWING |
0.000 |
39.367 |
31.185 |
|
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DEFERRED TAX LIABILITIES |
0.000 |
6.453 |
14.016 |
|
|
|
|
|
|
|
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TOTAL |
932.243 |
710.430 |
544.465 |
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APPLICATION OF FUNDS |
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|
|
|
|
|
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FIXED ASSETS [Net Block] |
171.281 |
139.302 |
165.056 |
|
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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|
|
|
|
|
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INVESTMENT |
227.181 |
0.350 |
0.000 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
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|
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|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
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Inventories |
211.341
|
227.663 |
149.959 |
|
|
Sundry Debtors |
466.538
|
416.235 |
325.864 |
|
|
Cash & Bank Balances |
15.871
|
2.239 |
3.807 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
52.396
|
36.220 |
33.520 |
|
Total
Current Assets |
746.146
|
682.357 |
513.150 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities and Provisions |
212.365
|
111.579 |
133.741 |
|
Total
Current Liabilities |
212.365
|
111.579 |
133.741 |
|
|
Net Current Assets |
533.781 |
570.778 |
379.409 |
|
|
|
|
|
|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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|
|
|
|
|
|
|
TOTAL |
932.243 |
710.430 |
544.465 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
|
|
|
|
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Sales Turnover |
2188.493 |
1900.009 |
1465.323 |
|
|
Other Income |
29.870 |
12.559 |
2.765 |
|
|
Total Income |
2218.363 |
1912.568 |
1468.088 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
455.228 |
303.035 |
269.838 |
|
|
Provision for Taxation |
152.591 |
107.837 |
92.651 |
|
|
Profit/(Loss) After Tax |
302.637 |
195.198 |
177.187 |
|
|
|
|
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|
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Expenditures : |
|
|
|
|
|
|
Material Cost and other consumptions |
1576.690 |
1453.484 |
1035.389 |
|
|
Employees’ Remuneration |
56.251 |
52.194 |
45.924 |
|
|
Increase/(Decrease) in Finished Goods |
(5.291) |
(28.767) |
2.882 |
|
|
Other Expenses |
93.989 |
91.955 |
71.047 |
|
|
Interest to Banks and others |
0.774 |
7.540 |
7.783 |
|
|
Depreciation & Amortization |
35.551 |
32.188 |
33.591 |
|
|
Provision for doubtful debts |
5.171 |
0.939 |
1.634 |
|
Total Expenditure |
1763.135 |
1609.533 |
1198.250 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2008 |
|
Type |
|
|
1st
Quarter |
|
Sales Turnover |
|
|
515.400 |
|
Other Income |
|
|
22.600 |
|
Total Income |
|
|
538.000 |
|
Total Expenditure |
|
|
477.400 |
|
Operating Profit |
|
|
60.600 |
|
Interest |
|
|
0.000 |
|
Gross Profit |
|
|
60.600 |
|
Depreciation |
|
|
6.800 |
|
Tax |
|
|
19.500 |
|
Reported PAT |
|
|
34.300 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.02 |
0.06 |
0.07 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
3.81 |
3.46 |
2.42 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
5.31 |
4.94 |
4.01 |
|
Inventory |
11.84 |
12.12 |
12.53 |
|
Debtors |
5.89 |
6.17 |
6.71 |
|
Interest Cover Ratio |
85.30 |
25.64 |
25.54 |
|
Operating Profit Margin(%) |
19.10 |
15.19 |
17.47 |
|
Profit Before Interest And Tax
Margin(%) |
17.73 |
13.78 |
15.60 |
|
Cash Profit Margin(%) |
13.02 |
9.94 |
11.71 |
|
Adjusted Net Profit Margin(%) |
11.65 |
8.53 |
9.84 |
|
Return On Capital Employed(%) |
56.30 |
51.10 |
61.84 |
|
Return On Net Worth(%) |
37.90 |
33.54 |
41.84 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Torrent Cables Limited incorporated in 1960 as Mahendra
Electricals and was promoted by J C Patel. After the takeover of the company by
the Torrent group in Jul.'89, the company, with active support of John Royle,
US, started commercial production of XLPE cables in Sep.'91. It also
manufactures PVC power and control cables, and elastomeric rubber cables along
with HT XLPE cables.
These cables are used by various electricity boards and utilities to distribute
power from generating stations as also by industries and households for
internal use. Elastomeric cables are extensively used in mining, railways,
ships, elevators, etc. The company also undertakes turnkey contracts to supply
and install electric cables.
The company has successfully developed, manufactured and marketed elastomeric
cables and 66-kv high-voltage cables. It commissioned a PVC compounding plant
which will go a long way in meeting its requirements of raw material-PVC
compounds. The company has also ventured into the manufacture of EHV cables. In
1997-98, the properzi plant which extrudes aluminium rods from ingots has been
commissioned and subjected to trial runs.
The Rehabilitation Scheme for the company which was sanctioned by BIFR on
April,2002 came into effective from 1999 which entails sacrifices on part of
various stakeholders. The demand for cables has increased gradually from
previous year to current year and the company is still focusing on operational
efficiency to gain a competitive edge.
OPERATIONS:
Gross turnover for the year 2007-08 was Rs. 2598.100 Millions, as against
Rs.2288.600 Millions in 2006-07, registering a growth of 14%. The Company has
achieved Profit Before Tax (PBT) of Rs. 455.200 Millions compared to last
year's PBT of Rs. 303.100 Millions registering 50% growth. This was possible
because of the favourable input price market conditions, higher operational
efficiency and good product mix.
FUTURE PROSPECTS AND PLANS:
The power cable industry is expected to grow over the coming years. The demand
is expected from various sources such as power sector, industries, EPCs, Govt.
& Semi-Govt. sector, etc. A large number of industries have earmarked
aggressive capital expenditure plans, in order to add more capacity or to setup
green-field projects. This would, in turn, increase their power requirement.
There would also be a significant increase in captive power plants and
substations. Hence, the total demand for cables would rise.
In order to capitalize on the growing HT/EHV cable demand, the Company has
embarked on a major expansion program in the HT cable segment with product
capability ranging upto 132 KV cables. The new line is expected to be
commissioned by July 2009.
Raw material prices have increased during the start of the year and are likely
to rise, further, during the year. This would impact the margins, relatively.
The company will continue to focus on operational efficiency in all facets of
manufacturing.
FINANCE:
During the year, the Company has paid off all the bank borrowings and as on
31st March, 2008 the borrowings are zero. The Company has invested Rs.220
Millions in Mutual Funds.
MERGER:
The Directors at their meeting held on 5th April, 2008 have approved
unanimously the merger of the Company with Torrent Gujarat Biotech Ltd. The
merger would enhance the reputation of Torrent Group, will reduce the number of
operating Companies and will enlarge the shareholders' base. Further, it would
enhance value of the Company's shareholding. It would be fair to shareholders,
creditors, employees and other stakeholders.
Application has been made to Bombay Stock Exchange for necessary approval.
Shareholders shall be informed about the further developments at appropriate
time.
MANAGEMENT
DISCUSSIONS AND ANALYSIS REPORT:
Power Sector Industry Outlook:
The The power cable industry is expected to grow steadily, over the coming
years. Several market segments are expected to generate this demand.
Industries, for one, will play a vital role in the surge in demand for cables.
Since, they have planned substantial investments, either to add capacities or
to setup green-field projects. Their power requirement is expected to increase.
A significant rise in the number of captive power plants and substations will
also add to the demand.
Investment in infrastructure is positive and is expected in various segments,
ranging from manufacturing to service industry. The service industry is one of
the fastest growing sectors in India. Demand for cables will be originating
from the development of new industrial parks and office complexes. Power sector
is expected to become the second largest consumer of power cables.
HT power cable segment has witnessed a lot of capacity addition, due to a major
emphasis on the electrification programs and Power on demand by 2012' program.
Based on the predicted growth of HT power cables, capacity additions are being
planned. In order to capitalize on the growing HT/EHV cable demand, the Company
has embarked on a major expansion program in the HT cable segment with product
capability ranging upto 132 KV cables. The new line is expected to be
commissioned by July 2009.
Company Outlook:
Gross turnover increased from Rs 2288.600 Millions in 2006-07 to Rs. 2598.100
Millions, registering a growth of 14%. PBT increased from Rs 303.100 Millions
in 2006-07 to Rs. 455.200 Millions, registering a 50% growth
Despite high volatility in the raw material prices and its availability in
2007-08, the Company has been able to plan efficiently and achieve the above
results.
In order to capitalize on the growing market demand in the power sector, the Company
has embarked on expanding its HT cable manufacturing capacity. Commissioning of
the new line is expected to be completed by July 2009. As a part of the
ground-work to market the increased output, the Company has planned a major
restructuring of its marketing setup along with a revised marketing strategy in
2008-09. This will ensure a wider market reach and cater to a wider Client
base.
AS PER WEBSITE
v They continues to be an established source of cables since 1989.
v They is one of the market leaders in HT Power Cable segment with a manufacturing capability of up to 132 kV XLPE Cables.
v They is the first company in the cable industry to get ISO 9001 : 2000 certification.
v They has maintained its competitive edge, while operating in a market segment that includes SEBs, Utilities, EPCs, Government/Semi-Government/Private Companies.
v They has a track record in maintaining delivery commitments and offering quality products.
v They is among the top and one of the very few profitable power cable companies in India, today.
v They has the capability to manufacture EHV, HT-XLPE, LT-XLPE/PVC Power Cables and Control Cables.
v They has an in house facility to cater to all Routine, Type, Acceptance and Special Tests.
v They has a very well equipped R&D centre, which has made it possible to develop new products, new compounds and analyse material & products.
v They is commited to maintaining high quality standards. Hence, all EHV and HT XLPE Cables (both single & multi-core) of different types and sizes get regularly tested at CPRI and at ERDA laboratories.
v They products are BIS certified and generally comply with IEC standards.
v They are an established player in the Indian cable market since 1989, with a very exhaustive customer base spread over State Electricity Boards, Utilities, EPC Contractors, Private Companies, Dealer Network, Consultants and many more.
v They have capability to manufacture EHV & HT XLPE cables using Dry Cure technology with inert gas (Nitrogen) in CCV line.
v They are ISO 9001 : 2000 certified.
v They certify all products to comply with BIS specification & generally comply with IEC standards.
v They have in-house facility catering to all routine, type, acceptance & special tests.
v They have in-house capability to manufacture PVC compounds.
v They ensure that all the prdoucts pass through very rigorous quality tests.
v They have a proven track record in executing turnkey orders which include cable supply & execution.
v They are continuously expanding in order to meet the needs of the accelerated demand in the power sector.
v They are highly competitive due to efficient planning & optimum utilization of resources.
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.47.59 |
|
UK Pound |
1 |
Rs.74.55 |
|
Euro |
1 |
Rs.60.57 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--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 |
O |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
O |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
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 |
|