MIRA
INFORM REPORT
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Report Date : |
24.11.2008 |
IDENTIFICATION DETAILS
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Name : |
FINOLEX INDUSTRIES LIMITED |
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Formerly Known As : |
FINOLEX PIPES |
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Registered Office : |
Gate No.399, Village Urse,
Taluka Maval, District Pune – 410506, |
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Country : |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
28.03.1981 |
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Com. Reg. No.: |
11-24153 |
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CIN No.: [Company
Identification No.] |
L25191MH1981PLC024153 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
KLPF00119A |
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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 : |
Manufacturers of PVC Pipe |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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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 30000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company and part of Finolex
Group. The company is progressing well. Directors are reported as experienced
and respectable businessmen. Trade relations are reported as fair. Business
is active. Payments are reported as slow due liquidity crunch. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual
trade terms and conditions. The company can be regarded as a promising business partner in a
medium to long run. |
LOCATIONS
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Registered Office : |
Gate No.399, Village
Urse, Taluka Maval, District Pune – 410506, |
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Tel. No.: |
91-2114-237251 |
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Fax No.: |
91-2114-237252 |
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E-Mail : |
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Website : |
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Corporate Office : |
P-14/1, |
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Tel. No.: |
91-20-27408200 |
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Mktg. Tel No.: |
91-20-27408254 / 27408267 /59 |
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Fax No.: |
91-20-7477217 / 7475232 |
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E-Mail : |
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Factory 1: |
D1/ 10, M.I.D.C.,
Chinchwad, Pune – 411 019, |
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Tel. No.: |
91-20-27474381/ 4384/ 27477817/ 27408200 |
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Fax No.: |
91-20-27477217/ 27475232 |
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E-Mail : |
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Factory 2 : |
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Tel. No.: |
91-2352-238027 / 28 / 29 / 30 / 31 |
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Fax No.: |
91-2352-238033 / 238045 |
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E-Mail : |
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Branches : |
Located at:
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DIRECTORS
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Name : |
Mr. P. P. Chhabria |
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Designation : |
Non Executive Chairman |
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Name : |
Mr. K. P. Chhabria |
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Designation : |
Managing Director |
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Name : |
Mr. Prakash P. Chhabria |
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Designation : |
Deputy Managing Director |
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Name : |
Mr. J. S. Arora |
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Designation : |
Director (Operations) |
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Name : |
Mr. S. S. Dhanorkar |
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Designation : |
Assistant Managing Director and Chief Operating Officer |
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Name : |
Mr. M. G. Bhide |
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Designation : |
Independent Director |
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Name : |
Mr. S. N. Inamdar |
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Designation : |
Independent Director |
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Name : |
Dr. N. A. Kalyani |
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Designation : |
Independent Director |
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Name : |
Mr. S. S. Marathe |
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Designation : |
Independent Director |
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Name : |
Mr. P. Subramaniam |
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Designation : |
Assistant Managing Director and Chief Financial Officer |
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Name : |
Mr. K. N. Atmaramani |
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Designation : |
Independent Director |
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Name : |
Mr. Proshanto Banerjee |
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Designation : |
Independent Director |
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Name : |
Mr. S. S. Math |
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Designation : |
Director (Manufacturing) |
KEY EXECUTIVES
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Name : |
Mr. Anil Atre |
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Designation : |
Company Secretary & General Manager (Administration) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(As on 31.03.2008)
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Indian Promoter |
64638341 |
52.11 |
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FII |
3619066 |
2.92 |
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Banks/ FIs/ Insurance Companies/ Mutual Funds |
1145364 |
0.92 |
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Private Corporate Bodies |
9383397 |
7.57 |
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Indian Public |
42341380 |
34.14 |
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NRI/OCB |
1600652 |
1.29 |
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Others |
1298267 |
1.05 |
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Total |
124026467 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of PVC Pipe |
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Products : |
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Brand Name : |
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PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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PVC |
M.T. |
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260000 |
212714 |
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PVC Pipes |
M.T. |
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69600 |
72728 |
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PVC Fittings |
M.T. |
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735 |
5022 |
GENERAL INFORMATION
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No. of Employees : |
1016 |
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Bankers : |
v
Bank of v
Bank of v
Bank of v Citibank N.A. v Corporation Bank v
State Bank of v ICICI Bank Limited v BNP Paribas v
Bank of Ground Floor, Mittal Tower B Wing, Nariman Point, P O Box 11507, Mumbai-400021, Maharashtra, India |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
B.K. Khare and Company Chartered Accountants |
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Associates/Subsidiaries : |
SUBSIDIARIES v Finolex Polymers Limited ASSOCIATES v Finolex Cables Limited v Finolex Finance Limited v Creole Holding Limited v Finolex Wire Products Limited v Finolex Plastro Plasson Limited v Finolex Proprietary Limited v Katara Dental private Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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150000000 |
Equity Shares |
Rs. 10/- each |
Rs.1500.000 millions |
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Unclassified Share Capital |
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Rs.850.000 millions |
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Total |
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Rs.2350.000
millions |
Issued, Subscribed
& Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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124026467 |
Equity Shares |
Rs.10/- each |
Rs.1240.264 millions |
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Subscribed &
Paid-up Capital
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No. of Shares |
Type |
Value |
Amount |
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124026467 |
Equity Shares |
Rs.10/- each |
Rs.1240.264 millions |
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Less : Amount in
Arrears, other than from Directors |
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Rs.0.249 millions |
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Total |
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Rs.1240.015 millions |
Note:
367650 Equity Shares have been allotted for
consideration other than in cash to the shareholder of the erstwhile Finolex Plastics
Private Limited pursuant to the scheme of amalgamation.
5511093 Equity Shares have been issued as
fully paid up Bonus Shares by Capitalisation of General Reserve.
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 |
1240.015 |
1239.928 |
1239.890 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
4299.972 |
4046.700 |
3797.097 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
5539.987 |
5286.628 |
5036.987 |
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LOAN FUNDS |
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1] Secured Loans |
1581.713 |
2050.642 |
1819.332 |
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2] Unsecured Loans |
5335.747 |
2738.304 |
3443.493 |
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TOTAL BORROWING |
6917.460 |
4788.946 |
5262.825 |
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DEFERRED TAX LIABILITIES |
980.598 |
1047.098 |
1066.509 |
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TOTAL |
13438.045 |
11122.672 |
11366.321 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
5570.097 |
5654.794 |
5787.462 |
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Capital work-in-progress |
2094.834 |
942.406 |
269.461 |
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INVESTMENT |
2521.429 |
2456.268 |
3673.297 |
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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 |
2044.589
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2163.979 |
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Sundry Debtors |
763.437
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377.783 |
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Cash & Bank Balances |
409.962
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282.883 |
4542.029 |
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Other Current Assets |
0.3000
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0.000 |
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Loans & Advances |
4186.520
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2955.131 |
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Total
Current Assets |
7404.508
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5779.776 |
4542.029 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1333.337
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1277.260 |
2905.928 |
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Provisions |
2819.486
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2433.312 |
0.000 |
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Total
Current Liabilities |
4152.823
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3710.572 |
2905.928 |
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Net Current Assets |
3251.685
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2069.204 |
1636.101 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
13438.045 |
11122.672 |
11366.321 |
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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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Total Income |
16755.025 |
12525.213 |
7779.872 |
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Profit/(Loss) Before Tax |
1017.747 |
1017.151 |
650.979 |
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Provision for Taxation |
306.197 |
318.324 |
227.893 |
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Profit/(Loss) After Tax |
711.855 |
698.827 |
423.086 |
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Imports : |
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Raw Materials |
8969.448 |
6383.501 |
4106.278 |
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Stores & Spares |
18.334 |
21.727 |
29.584 |
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Capital Goods |
94.364 |
11.204 |
153.837 |
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Total Imports |
9082.146 |
6416.432 |
4289.699 |
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Expenditures : |
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Manufacturing Expenses |
11326.568 |
8108.898 |
5627.599 |
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Salaries, Wages, Bonus, etc. |
346.666 |
261.591 |
212.405 |
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Finance Charges |
303.193 |
137.320 |
254.183 |
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Depreciation & Amortization |
574.577 |
546.081 |
468.207 |
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Other Expenditure |
784.594 |
644.469 |
566.499 |
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Excise Duty |
(2401.680) |
(1809.703) |
0.000 |
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Total Expenditure |
15737.278 |
11508.062 |
7128.893 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 1st
Quarter |
30.09.2008 2nd
Quarter |
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Sales Turnover |
|
4201.000 |
2830.000 |
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Other Income |
|
52.000 |
53.900 |
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Total Income |
|
4253.000 |
2883.900 |
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Total Expenditure |
|
3783.200 |
2907.000 |
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Operating Profit |
|
469.800 |
[23.100] |
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Interest |
|
157.100 |
117.200 |
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Gross Profit |
|
312.700 |
[140.300] |
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Depreciation |
|
150.300 |
152.200 |
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Tax |
|
62.500 |
[57.500] |
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Reported PAT |
|
117.400 |
[217.500] |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Debt-Equity Ratio |
1.08 |
0.97 |
1.07 |
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Long Term Debt-Equity Ratio |
0.30 |
0.34 |
0.69 |
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Current Ratio |
0.72 |
0.68 |
0.80 |
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TURNOVER RATIOS |
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Fixed Assets |
1.47 |
1.13 |
0.89 |
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Inventory |
7.77 |
6.11 |
5.11 |
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Debtors |
28.65 |
36.94 |
31.67 |
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Interest Cover Ratio |
4.36 |
7.34 |
3.25 |
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Operating Profit Margin(%) |
11.59 |
12.86 |
12.52 |
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Profit Before Interest And Tax
Margin(%) |
8.08 |
8.34 |
7.11 |
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Cash Profit Margin(%) |
7.87 |
9.49 |
8.58 |
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Adjusted Net Profit Margin(%) |
4.35 |
4.97 |
3.17 |
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Return On Capital Employed(%) |
11.72 |
9.89 |
5.88 |
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Return On Net Worth(%) |
13.15 |
11.62 |
5.44 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY:
Subject formerly Finolex Pipes, incorporated in 1981 a part
of the Finolex group (FG) is the largest PVC pipe manufacturer in the country. It
is also the second public venture of the FG after Finolex Cables (FCL). The
company offers a wide range of PVC pipes and fittings suitable for diverse
applications in agriculture, housing, telecommunication and for other segments
of the industry.
The company latter integrated backward to manufacture PVC resin which finds
application in pipes, fittings, electric cables, packaging film, etc. For this
the company came out with a rights issue to part-finance its project to
manufacture 0.130 Million TPA of PVC resin at Pawas,
The main raw material of the company is Ethylene Di-Chloride (EDC) apart from
Ethylene. The company depends heavily on imported EDC for the manufacture of
PVC.
Finolex Polymers is a wholly-owned subsidiary of the company. Pipes division of
the company has been granted Quality Systems Certification Licence as per
IS/ISO 9002 by the Bureau of Indian Standards. The PVC plant of the company has
undertaken work to obtain ISO 14001 (Environment Management System)
certification. It has divested its holdings in Finolex Polymers, subsequent to
this effect the Finolex Polymers has ceased to be a subsidiary of the company.
The company has proposed to expand PVC manufacturing capacity at its Ratnagiri
plant. It has already in the process of increasing the capacity PVC pipes at
Ratnagiri. The company is also planning to increase 26000 mts p. a at Ratnagiri
taking the total installed capacity of pipes to 52000 mts p.a. The Company is
also proposed to expand its PVC capacity at Ratnagiri from 130 000 tons to 260
000 tons. In this regard it has signed agreements with OXY
In April, 2002 the buy-back of equity shares to the extent of Rs.553.945
million consisting 1,99,78,977 equity shares at average price of Rs.27.73 per
share. It has also made a second buy back of 2829128 equity shares at average
price of Rs.30.83 per share at a consideration of Rs.87.2 million. During the
year 2003, the Company successfully completed its second buy back of shares by
buying and extinguishing 5200347 Equity Shares at an average price of Rs.34.24
per share at a consideration of Rs.178.072 million. With this buyback, the
total paid up share capital of the company decreased to Rs.1240.179 million as
on 27th July 2003.
During the year 2004-05, the company's jetty at Ratnagiri has achieved the
distinction of being an ISPS Code (International Code for the Security of Ships
and of Port Facilities) compliant Jetty and this is the first private ports to
receive this distinction. Also KPMG Quality Registar (Accredited by the Dutch
Council for Accreditation has approved company's Ethylene Terminal Facility for
registration to ISO 9001:2000 and has issue a certificate of registration for
the scope of port management for handling liquid and cryogenic cargoes.
In the year 2004-05, the company has increased its installed
capacity of PVC Pipes by 1450 MT. With this expansion, the total installed
capacity of PVC Pipes has increased upto 59400 MT.
MANAGEMENT
DISCUSSION AND ANALYSIS
INTRODUCTION
The Company has just completed one more year of good growth.
The gross income has shown a growth of 34%.
FINANCIAL REVIEW
Both the divisions of the Company i.e. PVC Resin and PVC Pipes and Fittings
have shown steady growth. However, the volatility in the raw material and
currency markets has had an impact on the margins.
The Company's operations continue to reflect the positive factors experienced
by the Indian economy. The GDP growth was 9.6% during 2006-07 but has moderated
a bit to 8.7% in 2007-08. Increased allocation by the Union Government on
Irrigation, the higher growth experienced by the Construction Industry and a
good monsoon during 2007-08 all contributed to increased demand for the
Company's products.
INDUSTRY
OUTLOOK PVC RESIN BUSINESS:
Backed by a strong growth in demand for the PVC Pipes, the PVC Resin demand in
The availability of raw material continues to be tight in the international
market which has had impact on the Company's ability to fully utilize its
capacity. The Company has signed Long Term Contracts for a substantial part of
its raw material requirements.
The Company is watching the international raw material situation very
carefully. The rising Crude Oil price is a matter of great concern.
PVC
PIPES BUSINESS:
The Company continues to maintain the leadership position in the PVC pipes
business in
The Company turned out a modest growth during the year. It is heartening to
note that the growth has come from all segments of demand viz. agriculture,
drinking water, plumbing and sanitation. This policy of diversified growth has
helped the Company to reap the benefits of a growing Indian economy.
The demand for PVC Pipes is expected to continue growing on the background of
increased spending on infrastructure sector. The irrigation potential in
FINANCE
The interest and finance charges for the year were
Rs.303.193 million as against Rs.137.320 million for the previous year.
TRADE REFERENCE:
v Alok Equipments Private Limited
v Chlorination Systems Engineering
v Figi Industries
v Gaurav Agencies
v General Foundries
v Hot Watt Industries
v Jade Rubber Products Private Limited
v Leak-Proof Engineering Private Limited
v Pioneer Engineering Industries
v R S B Chemical Industries
v Solid Packaging Industries
Fixed Assets:
v Land (freehold and leasehold)
v Buildings
v Plant & Machinery
v Furniture & Fixtures
v Vehicles
v Aircraft
WEBSITE
DETAILS:
PROFILE:
In July 1945, two young brothers P.P Chhabria and K.P Chhabria came to
Pune from
Starting as a small-scale industrial unit in 1957, they manufactured PVC
insulated cables for the automobile industry. Subject brand was born from
"Fine" & "Flexibles" and "O" with an electric
arc across it - signifying the electrical cable business the company was in.
Their relentless search for growth and doughty perseverance saw them through
some difficult times and in 1972 the enterprise turned into a limited company.
Since then, there has been no looking back and following a public
offering in July 1983, Finolex Cables Limited embarked on a continuous process
of expansion and modernization which enabled it to become the most diversified
largest cable manufacturer in the country.
Their relentless quest for growth saw the brothers establishing subject
in 1981. The company sought to manufacture Rigid PVC Pipes and Fittings at
Pune, which find large-scale application in the agriculture sector. In a shrewd
move towards backwards integration, the company has set up a PVC resin
manufacturing facility at Ratnagiri on the west coast of
The early nineties saw the Finolex Group expanding into new business
domains to manufacture Optic Fibre Cables and Copper Rods. Today the Group
turnover exceeds Rs.20 Billion (about US $ 450 million)
FCL and FIL are the two group companies whose equity shares are listed
on the Bombay Stock Exchange and National Stock Exchange. Global Depository
Receipts of FCL are also listed on the Luxembourg Stock Exchange.
Professionally managed, with continuous updating of technology and strict
quality controls, company strives for maximum customer satisfaction. Over the
years, it has attained a significant position on the industrial map of
Subject is the largest PVC pipe manufacturer in
Subject has commissioned its PVC plant near Ratnagiri (350
Kms. South of Mumbai) on the West Coast of Maharashtra State. Subject is one of
the largest PVC manufacturers in
Subject's PVC plant enjoys many locational advantages, the
important one being proximity to the market. Further, the Pipes division of
Subject and Subject's associated concern consumes captively about 45,000 metric
tonnes of PVC per annum; a distinct advantage available only to Subject.
As a part of its PVC complex, Subject has set up an open sea
cryogenic jetty. The Finolex jetty is the first of its kind in the private
sector in
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.50.03 |
|
|
1 |
Rs.74.42 |
|
Euro |
1 |
Rs.62.71 |
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 |
6 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
|
49 |
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 |
|