MIRA INFORM REPORT

 

 

 

Report Date :

12.11.2008

 

IDENTIFICATION DETAILS

 

Name :

WIMCO LIMITED

 

 

Registered Office :

1st Floor, Indian Mercantile Chambers K Marg, Ballard Estate, Mumbai - 400038, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2008

 

 

Date of Incorporation :

07.09.1923

 

 

Com. Reg. No.:

001082

 

 

CIN No.:

[Company Identification No.]

U24291MH1923PLCC001082

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

SHLW00001B

MUMW02212A

 

 

PAN No.:

[Permanent Account No.]

AAACW3082B

 

 

Legal Form :

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

 

 

Line of Business :

Manufacturer of Safety Matches.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Maximum Credit Limit :

USD 7000000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments.

 

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

 

 

LOCATIONS

 

Registered Office/

Safety Matches Division :

1st Floor, Indian Mercantile Chambers K Marg, Ballard Estate, Mumbai - 400038, Maharashtra, India

Tel No:

91-22-56316600 / 56310828

Fax No:

91-22-66314525 / 56314513

Email :

wimcobom@bom3.vsnl.net.in

investor@wimco.in

Website :

http://wimcoltd.tradeindia.com

 

 

Factory [Matches] / Engineering Division:

Kalyan Badlapur Road, Ambarnath - 421 505, Thane District, Maharashtra, India

Tel No.:91-251-2682281/2683982

Fax No.:91-251-2682665/2681874

 

 

Factory [Matches] :

Clutterbuckganj, Bareilly - 243 502, Uttar Pradesh

 

 

Factory [Matches] :

Tiruvottiyur, Chennai-600019, Tamilnadu

 

 

Factory [Matches] :

Alambazar, Kolkata - 700 035, West Bengal

 

 

Factory [Matches] :

Amco Road Post Office, Dhubri - 783 323, Assam

 

 

Engineering :

Kalyan Badlapur Road, Ambarnath - 421 505, Thane District, Maharashtra

 

 

DIRECTORS

 

Name :

Mr. H. N. Sethna

Designation :

Chairman

 

 

Name :

Mr. R. Gopal

Designation :

Managing Director

 

 

Name :

Mr. R. L Auddy

Designation :

Director

 

 

Name :

Mr. C. R. Dua

Designation :

Director

 

 

Name :

Mr. D. Dutta

Designation :

Director

 

 

Name :

Mr. S. Mathur

Designation :

Director

 

 

Name :

Mr. R. K. Singhi

Designation :

Director

 

 

Name :

Mr. R. Srinivasan

Designation :

Director

 

 

Name :

Mr. R. Tandon

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr. Vikram Jain

Designation :

Manager - Legal & Company Secretary

 

 

Audit Committee :

Mr. H. N. Sethna

 

Mr. R. L Auddy

 

Mr. C. R. Dua

 

Mr. D. Dutta

 

Mr. R. Tandon

 

 

Name :

Mr. Surendra Sipani

Designation :

Head of Finance

 

 

Name :

Mr. L. B. Singh

Designation :

Vice President – Sales and Head of Marketing

 

 

Name :

Mr. A. Saha

Designation :

Vice President - Human Resources

Date of Birth :

47 years

Qualification :

B. Sc., MA (Eco), M.A. (PM and IR)

Experience :

22 years

 

 

Name :

Mr. C. R. Sivaramakrishnan

Designation :

Vice – President – Financial Control

Date of Birth :

43 years

Qualification :

B. Com, C.A.

Experience :

15 years

 

 

Name :

Mr. A. Mukhrjee

Designation :

General manager – Finance

 

 

Name :

Mr. Vikram Jain

Designation :

Manager – Legal and Company Secretary

 

 

Name :

Mr. Anshul Kumar Jain

Designation :

Company Secretary 

 

 

Name :

Mr. Cherian George

Designation :

Vice President – Finance

Date of Birth/Age :

58 Years

Qualification :

C. A.

Experience :

31 Years

Date of Appointment :

15.05.1975

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of Safety Matches.

 

 

Products :

Product Description

Item Code No:

 

 

Matches

3605000110

Machinery

84223000

 

Cardboard matches

  • 40 matchsticks of 42mm/matchbox
  • 50 matchsticks of 42mm/matchbox
  • 50 matchsticks of 47mm/matchbox
  • 240 matchsticks of 47mm/matchbox

 

Veneer matches

  • 50 matchsticks of 42mm/matchbox

o        Matchbox with Veneer Inners

o        Matchbox with Cardboard Inners

 

  • 40 matchsticks of 38mm/matchbox

o        Matchbox with Veneer Inners

 

Wax matches

  • 40 matchsticks of 29mm/matchbox
  • 40 matchsticks of 32mm/matchbox
  • 50 matchsticks of 32mm/matchbox
  • 35 matchsticks of 27mm/matchbox

 

 

PRODUCTION STATUS (31.03.2008)

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

Matches

Million Boxes

5000

5000 (on 3 Shift basis 300 working day)

4540

Machines

Numbers

-

-

67

 

 

GENERAL INFORMATION

 

Bankers :

ABN AMRO BANK N.V.

 

 

Facilities :

Secured Loans

31.03.2008

(Rs. In Millions)

 

 

Cash Credit (Including working capital demand loan) with Banks.

 

(Secured by hypothecation of all stock in trade present and future of the company including raw materials, finished goods, trading products and stock-in-process and present and future book debts, outstanding receivables, claims and bills)

5.730

Total

5.730

 

Unsecured Loans

31.03.2008

(Rs. In Millions)

 

 

Loans and Advances from Subsidiary

32.284

Total

32.284

 

 

Sub – Total

38.014

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

BSR and Company

Chartered Accountants

 

 

Ultimate Holding

Company :

ITC Limited

 

 

Holding Company :

Russell Credit Limited

 

 

Subsidiaries :
  • Wimco Seedlings Limited
  • Pavan Poplar Limited
  • Prag Agro Farm Limited
  • Wimco Boards Limited
  • Swedish Match Consumers Products Limited
  • Swedish Match Lighters BV
  • Swedish Match Arenco AB
  • ITC Infotech India Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

550000000

Equity Shares

Re.1 /- each

Rs.550.000 Millions

9300000

Preference Share

Rs.100/- each

Rs.930.000 Millions

 

 

 

 

 

Total

 

Rs. 1480.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

94230000

Equity Shares

Re.1/- each

Rs. 94.230 Millions

6000000

Preference Shares

Rs.100/- each

Rs. 600.000Millions

 

 

 

 

 

Total

 

Rs. 694.230 Millions

 

Note:

 

Of the above:

 

A] Pursuant to the provisions of section 100 of the companies Act, 1956, Articles of the Articles of Associates of the company and high Court order dated February 11, 2005, the issued, subscribed and paid up capital of the company has been reduced from Rs.1040.000 Millions to Rs.572.000 Millions by reducing the paid up value of Equity Shares by Rs.9 per Equity Shares and the amount so cancelled has been utilized for reducing the accumulated losses as at March 31, 2004 to the extent of Rs.468.000 Millions. To give effect to the above, the composition of the Authorised Capital has been modified from 55000000 Equity Shares of Rs.10 each to 550000000 Equity Shares of Re.1 each.

 

 

B] 43908340 Equity shares have been allotted as fully paid up pursuant for consideration other than cash.

 

Of the Equity Shares:

   

I] 1250000 Equity shares have been allotted pursuant to the scheme of amalgamation of the Assam Match Company Limited with the company.

 

II] 42230000 Equity shares have been allotted pursuant to the scheme of amalgamation of Wimco Boards Limited with the company.

 

III] 120000 and 80000 Equity shares have been allotted pursuant to the agreement with ICICI Bank Limited and trustee of debenture holders respectively.

 

 

C] 4250000 Equity shares have been allotted as fully paid by way of bonus shares by capitalization of reserves.

 

 

D] 91238170 Equity Shares of Re.1 each and 6000000, 5% Redeemable Cumulative Preference Shares of Rs.100 each are held by Russell Credit Limited, the holding company. Out of these, 500000 Preference Shares will be due for redemption on or before March 15, 2009.

 

 

E] 5200000, 0.05% Redeemable Cumulative Preference Shares of Rs.100 each have been redeemed during the year out of fresh issue of 5% Redeemable Cumulative Preference Shares of Rs.100 each fully paid up.

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2008

31.03.2007

31.03.2006

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

694.230

572.000

572.000

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

771.376

769.397

757.722

4] (Accumulated Losses)

0.000

(162.910)

(231.210)

NETWORTH

1465.606

1178.457

1098.512

LOAN FUNDS

 

 

 

1] Secured Loans

5.730

5.492

258.875

2] Unsecured Loans

32.284

48.000

45.000

TOTAL BORROWING

38.014

53.492

303.875

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

1503.620

1231.949

1402.387

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

1144.033

993.668

959.874

Capital work-in-progress

67.241

61.960

7.476

 

 

 

 

INVESTMENT

1211.274

1055.629

0.002

DEFERREX TAX ASSETS

59.910

0.002

0.000

Plantation Work–In–Progress

22.414

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
423.491
310.118
269.658

 

Sundry Debtors
50.730
24.407
102.774

 

Cash & Bank Balances
14.312
6.037
8.728

 

Other Current Assets
0.000
0.000
0.000

 

Loans & Advances
288.851
305.621
363.111

Total Current Assets
777.384
646.183
744.271

Less : CURRENT LIABILITIES & PROVISIONS
 
 
 

 

Current Liabilities
549.686
465.455
270.990

 

Provisions
17.676
9.871
38.246

Total Current Liabilities
567.362
475.326
309.236

Net Current Assets
210.022
170.857
435.035

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

1503.620

1226.487

1402.387

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2008

31.03.2007

31.03.2006

Sales Turnover

1984.253

1742.653

1403.684

Other Income

69.091

21.365

35.449

Total Income

2053.344

1764.018

1439.133

 

 

 

 

Profit/(Loss) Before Tax

73.326

72.587

(125.329)

Provision for Taxation

9.962

3.850

6.117

Profit/(Loss) After Tax

63.364

68.737

(131.446)

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Export Earnings

44.901

8.482

0.028

 

Commission Earnings

0.000

0.000

4.371

Total Earnings

44.901

8.482

4.399

 

 

 

 

Imports :

 

 

 

 

Raw Materials

16.516

52.473

25.288

 

Capital Goods

3.150

16.964

0.000

Total Imports

19.666

69.437

25.288

 

 

 

 

Expenditures :

 

 

 

 

Cost of Trading Product

31.913

42.461

35.412

 

Cost of Seeds

0.319

0.000

0.000

 

Raw Material Consumed

1216.646

955.056

683.664

 

Increase/(Decrease) in Finished Goods

(63.121)

17.225

52.154

 

Employee Costs.

325.351

277.674

340.972

 

Other cost

429.455

363.878

406.794

 

Interest

1.346

10.736

21.964

 

Depreciation & Amortization

38.109

24.401

23.502

Total Expenditure

1980.018

1691.431

1564.462

 

 

KEY RATIOS

 

PARTICULARS

 

31.03.2008

31.03.2007

31.03.2006

Debt-Equity Ratio

0.05

0.47

0.75

Long Term Debt-Equity Ratio

0.00

0.00

0.00

Current Ratio

1.25

1.20

1.23

TURNOVER RATIOS

 

 

 

Fixed Assets

1.30

1.62

1.29

Inventory

5.86

6.70

5.59

Debtors

58.95

30.54

17.26

Interest Cover Ratio

44.18

7.60

(4.64)

Operating Profit Margin(%)

5.13

5.56

(5.09)

Profit Before Interest And Tax Margin(%)

3.39

4.30

(6.59)

Cash Profit Margin(%)

4.60

4.79

(6.89)

Adjusted Net Profit Margin(%)

2.86

3.54

(8.40)

Return On Capital Employed(%)

7.02

13.00

0.00

Return On Net Worth(%)

13.64

(123.90)

0.00

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

HISTORY:

 

Incorporated in 1923 as The Western India Match Company, company got its present name in 1973 when it diversified into other areas.  

 
In Feb.'89, company came out with an Rs 45.700 Millions rights issue of 4.574 Millions equity shares at par to augment its long-term resources. Its product portfolio includes safety matches and machines. Its subsidiaries are Wimco Boards Limited, Wimco Seedlings Limited, Pavan Poplar Limited, Prag Agro Farm Limited.  

 
The Company has the factories located at Ambarnath-Maharashtra, Bareilly- Uttar Pradesh, Tiruvottiyur-Chennai and Alambazar-West Bengal. During 2000-01, Ambarnath factory obtained ISO 9002:1994 Certification by KEMA. 
 
The company also has a sizeable export turnover through exports to Africa, South America, West Asia, Japan, Europe, Australia, and other countries. It tied up with Heinz India Private Limited to produce tomato paste. It also undertook an Rs 2800.000 Millions diversification in 1994-95 to manufacture medium-density fibre boards and oleoresins and implemented a backward integration programme for its match division. During 2002-03, The Company launched 'Homelites' brand mosquito coils to add to the portfolio of matches and also entered into arrangements of third party products. 

 
The authorised share capital of the company was increased from Rs.550.000 Millions to Rs.1480.000 Millions in addition thereto of 700000 0.05% RCP shares of Rs.100 each were issued and allotted to Svenska Tandsticksbbolaget Forsaljningsaktiebolag, a subsidiary of Swedish Match AB Sweden. Consequently the paid up capital of the company stands increased to Rs.1040.000 Millions. In 2000-01, the management of the company has been changed from the Jatia Group to Swedish Match AB, Sweden. During 2004-05, Swedish Match Singapore Pte Limited with Swedish Match AB (Publ), Haravon Investment Pte Limited and Seed Trading Pte Limited acquired 13,517,719 Equity Shares of Re.1/- each representing 26% of total equity share capital of the company. 

 
During 2001-02, The Company divested its entire equity stake comprising 50000 shares of Singapore $1 each, which amounts to Rs.1.304 Millions in the wholly owned subsidairy, Wimco International Pte Limited, Singapore. Wimco Greenbelts Limited and Gladhill Trading Limited amalgamated with Wimco Seedlings Ltd, a subsidiary of the company with effect from April 1, 2001. 

 

 

Company Performance 

 
The Company has recorded a turnover of Rs.2053.400 Millions as against Rs.1755.800 Millions in the previous year registering a growth of 16.95%. 

 
The Company has earned a net profit after tax of Rs. 63.300 Millions during the financial year 2007-08 as against net profit after tax of Rs.68.700 Millions in the previous year. 

 
The income from match business for the year has increased by 9.53% to Rs.1798.500 Millions from Rs. 1642.000 Millions earned in the previous year. The income from engineering business has increased by 35.31% to Rs. 120.700 Millions in the year as compared to Rs.89.200 Millions in the previous year. The income from seedling business pertaining to erstwhile Wimco Seedlings Limited, amalgamated to the Company during the year, was Rs.64.600 Millions. 

 
The company is facing a challenge in its main business of matches due to a steep increase in all input costs on one hand and a growing competition from the small scale and cottage sector on the other. The company is attempting to increase value capture through continuous focus on product development and strategic cost management. 
 
Rationalisation of the excise duty structure is called for to provide a level playing field to all manufacturers in the industry. This will accelerate the rate of mechanization of the industry and make it more competitive. 

 

 

Conservation of Energy 

 

The Company continues to emphasize on conservation of energy, power and other energy sources and also promoting the use of renewable energy sources. As a part of continuous efforts, the Company has taken following steps: - 

 

 
New boilers have also been installed at all factories to improve the efficiency and to achieve reductions in fuel consumed per unit of steam generated. 

 
The electricity generated through 4 windmills with capacity of 250 KW each in the District Nellai, Kattabomman, Tamil Nadu, feeds the electric grid in Tamil Nadu. The Company continues to receive credit for this towards consumption of electricity by the Chennai factory, thereby reducing the energy cost by harnessing non-conventional energy sources. 

 
The particulars in Form A regarding consumption of energy are not provided as the activity of the Company does not fall under the list of industries specified in the Schedule annexed to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. 

 


Technology Absorption 

 

The match manufacturing and skillet printing technologies have been fully absorbed by the Company, thereby enhancing the quality and productivity of all processes. The Company's expenditure on Research and Development was Nil.  

 

 

Fixed Assets:

 

Intangible Assets

 

Tangible Assets

 

 

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.39.38

UK Pound

1

Rs.76.90

Euro

1

Rs.57.27

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

9

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

9

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

7

--LEVERAGE

1~10

7

--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

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

61

 

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/normal.

 

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