MIRA
INFORM REPORT
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Report Date : |
24.11.2008 |
IDENTIFICATION DETAILS
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Name : |
JBF INDUSTRIES LIMITED |
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Registered Office : |
Survey No. 273, Village
Athola, Silvassa, Dadra and Nagar, Haveli-396230, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
12.07.1982 |
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Com. Reg. No.: |
000128 (New)
027772 (Old) |
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CIN No.: [Company
Identification No.] |
U99999DN1997PLC000128
/ L99999DN1982PLC000128 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMJ08465C |
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PAN No.: [Permanent
Account No.] |
AAACJ2575J |
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Legal Form : |
A public limited
liability company. The company’s
shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and
Selling of Yarn, Bulk Drugs and Drug Intermediates, P.O.Y., etc. |
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 19000000 |
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Status : |
Good |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is a part
of Arya Group, a small industrial house of Mumbai. Directors are reported as experienced,
respectable and resourceful businessmen. However, subject is not faring well
and continues to incur substantial losses in recent times. Payments are
reported as slow at times. The company can
be considered for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
Survey No. 273,
Village Athola, Silvassa, Dadra and Nagar, Haveli-396230, |
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Tel. No.: |
91-260-2642745/46/2643861/62 |
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Fax No.: |
91-260-2642297 |
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E-Mail : |
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Website : |
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Corporate
Office : |
8th Floor,
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Factory : |
v Plot No. 273, Village Athola, Silvassa,
Dadra Nagar, Haveli, v Plot No. 53 & 43, Piparia Industrial
Estate, Silvassa, Dadra Nagar Haveli, Union Territory v Plot No, 65-B, Piparia Industrial Estate,
Silvassa, Dadra Nagar Haveli, v Plot No. 6301, 6312 and 6313, GIDC, Vapi,
District Valsad, v Plot No. 408, GIDC, Vapi, District Valsad,
v Plot No. C-6, MIDC, Mahad, District
Raigad, v
Plot
No. 11 and 215 to 231, Sarigam GIDC Indl. Area Tal: Umbergaon, Sarigam, Vapi, v
Plot
Nos.130, 133, & 138, Village Athal Silavassa, Dadra Nagar Haveli. |
DIRECTORS
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Name : |
Mr. Bhagirath
Arya |
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Designation : |
Chairman |
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Age |
57
Years |
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Qualifications |
B.E.
ELECTRICAL |
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Nature
Of Duties |
Overall
Management & Control |
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Commencement
Of Employment |
Since
Inception I.E. 1982 |
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Experience |
32
Years |
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Name : |
Mr. Rakesh Gothi |
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Designation : |
Managing Director |
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Name : |
Ms. P. N. Thakore |
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Designation : |
Executive Director |
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Name : |
Mr. N. K. Shah |
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Designation : |
Executive Director |
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Name : |
Mrs. Veena Arya |
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Designation : |
Director |
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Name : |
Mr. Krishen Dev |
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Designation : |
Director |
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Name : |
Mr. S. Pandey |
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Designation : |
Nominee LIC |
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Name : |
Mr. Prakash Mehta |
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Designation : |
Director |
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Name : |
Mr. B R Gupta |
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Designation : |
Director |
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Name : |
Mr. Shailesh
Haribhakti |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Ujjwala G. Apte |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
21122812 |
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Institutions |
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35.46 |
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Mutual Funds / Institutions / Banks |
3379025 |
5.67 |
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Venture Capital Funds |
2940000 |
4.94 |
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Foreign institutional investors |
792798 |
1.33 |
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Public |
11860802 |
19.91 |
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Foreign Company |
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1. Citigroup Venture Capital international Growth Partnership |
13024190 |
21.87 |
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2. FCCB – Full Conversion |
6440368 |
10.81 |
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Total |
59559998 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and
Selling of Yarn, Bulk Drugs and Drug Intermediates, P.O.Y., etc. |
GENERAL INFORMATION
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Suppliers : |
v Aero Pack
Products v Computech v Macrotherm Industries v MAS Sealing
Systems Private. Limited v Manokamna
Packaging v Met-Pro Qhemicals v Paras Alloys
& Salts Private. Limited v
Sathi
Industries |
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No. of Employees : |
1800 |
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Bankers : |
v Bank of v State Bank of v Sumitomo Mitsui Banking Corporation v HSBC Limited v Andhra Bank v Standard Chartered Bank v Central Bank of v Indian Overseas Bank v SBI Commercial & International Bank
Limited v Industrial Development Bank of v State Bank of v Bank of v The Mitsui Taityo |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Chaturvedi
& Shah Chartered Accountants |
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Associates/Subsidiaries : |
© All companies of Arya Group © JBF Finance Limited © Lunia Brothers subsidiaries
©
Gharpure Pharmachem Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
100000000 |
Equity Shares |
Rs.10/- each |
Rs.1000.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
54375000 |
Equity Shares |
Rs.10/- each |
Rs.543.800
millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
543.800 |
490.000 |
310.233 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
3333.500 |
2524.600 |
1644.084 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
3879.300 |
3014.600 |
1954.317 |
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LOAN FUNDS |
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1] Secured Loans |
3474.600 |
2491.300 |
1118.264 |
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2] Unsecured Loans |
1720.100 |
1775.600 |
423.181 |
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TOTAL BORROWING |
5194.700 |
4266.900 |
1541.445 |
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DEFERRED TAX LIABILITIES |
929.200 |
655.300 |
496.417 |
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TOTAL |
10003.200 |
7936.800 |
3992.179 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
6354.400 |
3017.800 |
3179.075 |
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Capital work-in-progress |
287.400 |
2170.400 |
141.900 |
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INVESTMENT |
1105.700 |
1271.300 |
2.170 |
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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 |
772.400
|
446.700 |
164.402
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Sundry Debtors |
1377.000
|
729.800 |
581.425
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Cash & Bank Balances |
119.200
|
563.700 |
100.079
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Other Current Assets |
0.000
|
0.000 |
0.000
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Loans & Advances |
1100.500
|
465.900 |
63.779
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Total
Current Assets |
3369.100
|
2206.100 |
909.685 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
788.200
|
529.100 |
150.009
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Provisions |
325.200
|
199.700 |
90.642
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Total
Current Liabilities |
1113.400
|
728.800 |
240.651
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Net Current Assets |
2255.700
|
1477.300 |
669.034
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
10003.200 |
7936.800 |
3992.179 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
14795.800 |
7223.500 |
7383.910 |
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Other Income |
113.600 |
54.100 |
0.000 |
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Total Income |
14909.400 |
7277.600 |
7383.910 |
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Profit/(Loss) Before Tax |
1205.600 |
599.700 |
503.416 |
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Provision for Taxation |
181.800 |
136.400 |
210.990 |
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Profit/(Loss) After Tax |
1387.400 |
736.100 |
292.426 |
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Expenditures : |
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Cost of Goods Sold |
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Manufacturing Expenses |
12932.700 |
6636.929 |
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Administrative Expenses |
104.200 |
60.300 |
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Personal Expenses |
127.200 |
836.00 |
6880.494 |
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Purchases made for re-sale |
3.600 |
6.500 |
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Selling and Distribution Expenses |
278.200 |
118.300 |
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Interest |
268.800 |
109.500 |
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Total Expenditure |
13714.700 |
7199.500 |
6880.494 |
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SUMMARISED RESULTS
|
PARTICULARS |
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|
31.03.2008 Full Yearly |
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Sales Turnover |
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|
21499.200 |
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Other Income |
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|
106.500 |
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Total Income |
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|
21605.700 |
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Total Expenditure |
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|
19002.200 |
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Operating Profit |
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|
2603.500 |
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Interest |
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|
465.500 |
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Gross Profit |
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|
2138.000 |
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Depreciation |
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|
457.300 |
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Tax |
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|
293.400 |
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Reported PAT |
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|
1387.300 |
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Dividend (%) |
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|
150.000 |
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 1st
quarter |
30.09.2008 2nd
Quarter |
|
Sales Turnover |
|
6039.900 |
5864.900 |
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Other Income |
|
31.400 |
44.800 |
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Total Income |
|
6071.300 |
5909.700 |
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Total Expenditure |
|
5367.300 |
5122.200 |
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Operating Profit |
|
704.000 |
787.500 |
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Interest |
|
101.600 |
402.000 |
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Gross Profit |
|
602.400 |
385.500 |
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Depreciation |
|
111.000 |
111.300 |
|
Tax |
|
171.000 |
[5.400] |
|
Reported PAT |
|
316.600 |
178.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
|
1.38
|
1.18 |
0.82 |
|
Long Term
Debt-Equity Ratio |
|
1.20
|
0.95 |
0.67 |
|
Current Ratio |
|
1.21
|
0.96 |
0.81 |
|
TURNOVER RATIOS |
|
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|
Fixed Assets
Ratio |
|
2.51
|
1.83 |
1.96 |
|
Inventory |
|
26.44
|
27.45 |
53.24 |
|
Debtors |
|
15.30
|
12.79 |
17.59 |
|
Interest Cover
Ratio |
|
5.48
|
6.46 |
3.76 |
|
Operating Profit
Ratio (%) |
|
11.42
|
11.17 |
10.25 |
|
Profit Before
Interest And Tax Margin (%) |
|
9.15
|
8.45 |
7.67 |
|
Cash Profit
Margin (%) |
|
7.28
|
7.83 |
5.85 |
|
Adjusted Net
Profit Margin(%) |
|
5.01
|
5.12 |
3.27 |
|
Return on capital
employed (%) |
|
18.05
|
13.16 |
20.32 |
|
Return on net
worth (%) |
|
23.49
|
17.34 |
15.74 |
LOCAL AGENCY FURTHER INFORMATION
History
Subject conceived as a private limited company in 12th July of the year 1982
by the mind and work of Bhagirath Arya. Now stands on a gleaming pinnacle of
success as an industry leader in Polyester Chips & as one of the top 5
players in the polyester Partially Oriented Yarns (POY) in
The production of dyed yarn & fancy fabrics of the company was
commenced in the year 1985. JBF had attained the corporate status by becoming
public limited company in the year 1986 under the JBF Synthetics Ltd. The
texturising facilities of the company were started in the year 1987 with a
capacity of 3,000 TPA at Silvassa. The Company had changed its name to present
one as JBF Industries Limited in the year 1989. JBF had sold its Dyes & Dye
intermediate business in the year of 1993-94. The commercial production of
Partially Oriented Yarn was started in June of the year 1996. During the year
2000-01, the company had embarked into a process of backward integration for
production of polyester chips from PTA/DMT. JBF made its foray into SSP Chip
manufacturing as a new project under the development activity in the period of
2002-03, it gave the good result to the company.
The Company obtained certification under Environmental Management System
in the year 2004-05, which fulfills the requirements of standard ISO 14001:1996.
The Company had began its RAK plant production, a USD 90 million plant in
Emirates, a joint venture with RAKIA (Ras Al Khaimah Investment Authority) for
setting up a world scale Polyester PET resin packaging in the Emirate of Ras Al
Khaimah. The facility was started its first production in July of the year
2007. JBF had entered into Memorandum of Understanding (MoU) with CVCIGP II
Clien Rosehill Ltd, Mauritius and their affiliates (which are within the
structure of Citigroup Venture Capital International Growth Funds, managed by
Citigroup) in the year same year 2007, whereby they hade agreed to invest a sum
of USD 118 million into JBF Global Pte Ltd., Singapore, subsidiary of the
company by way of fully convertible securities.
The BOD of the company had approved the take over of assets of Microsynth
Fabrics (
ACHIEVEMENTS:
Performance:
The overall production of Polyester Chips during the' year has increased
from 1,17,589 MT in 2005-06 to 2,43,129 MT in 2006-07, reflecting an increase
of 106.76%.
There was an impressive rise in sale of Polyester Chips from 57,866 MT in
2005-06 to 1,54,700 MT in 2006-07 reflecting an increase of 167.34%
The overall net profit of the Company rose from Rs, 426.9 millions to
Rs.805.9 millions, reflecting an increase of 88.78%.
The Company has shown excellent performance in the international market and
shown the increase in export from Rs.158.1 millions in 2005-06 to Rs. 1489.000
millions in 2006-2007.
Expansion:
During the course of year the Company has successfully commissioned the project
to manufacture 2,16,000 MT per annum Polyester Chips at Sarigam.
The
Company has also implemented and commissioned project to manufacture 90,000 MT
per annum POY at Athola.
CAPITAL STRUCTURE:
During
the year the Company has completed conversion of 3 million Foreign Currency
Convertible Bonds, out of 34.5 million Foreign Currency Convertible Bonds (
issued on 30th November, 2005) into 15,25,000 equity shares on 29th July,
2006.
Promoter
Group and Citigroup have exercised option of warrant conversion for 38,48,100
balance warrants allotted to them on 10th June, 2005, into equal number of
equity shares at Rs. 46.50 per share on 18th October, 2006.
Both the conversions resulted the increase in issued capital to
Rs.54,37,50,000.
SUBSIDIARY COMPANY:
A. The
name of joint venture subsidiary is changed from JBF RAK LLC to JBF RAK FZ LLC,
with effect from the date of issue of the relevant certificates by the
competent authorities in that behalf.
The
project undertaken by JBF RAK FZ LLC for setting up a world scale PET Polymer
Resin Plant in the Emirates of Ras A] Khaimah is nearing completion. The plant
is expected to start production of PET Chips by middle of June, 2007.
B. The
Company has incorporated a wholly owned subsidiary in Singapore JBIF Global
Pte. Ltd., for its international operations.
MANAGEMENT DISCUSSION AND
ANALYSIS:
WORLD SCENARIO:
The
Global Polyester demand continues to be buoyant, fuelled by high economic
growth. Polyester production was estimated at 42.3 Million Tonnes in 2006, a growth
of about 2.3 Million Tonnes. The forecasted growth for the period 2007-08 is
over 7%.
Globally,
the scenario for raw material also seems to be getting advantageous with more
PTA and MEG capacities getting commissioned. That raw material prices depend on
Oil prices is now proved to be a myth, with raw material prices varying more in
relation to demand and supply phenomenon.
PTA capacity increases in the World in 2007 end 2008 are expected to be
more than 7 Million tones, leading to an adequate surplus situation for the
consuming industry. It is expected that PTA availability will in future be
comfortable and at prices leading to a better profitability for the polyester
industry.
Similarly,
in the case of MEG, the other raw material, there is a projected surplus by
2008 when new capacities to the extent of over 3.5 Million Tonnes materialize.
This will further lead to easing of prices by the next year on MEG.
INDIAN POLYESTER SCENARIO:
The
Synthetic Textile Industry in
During
the year 2006-07, synthetic yarn producers paid 16% duties on inputs, they
could recover only 8% duty on output, leading to an accumulation of Cenvat
credit. The Government finally yielded to the repeated demands of the industry
and reduced duties for raw materials PTA and DMT to 8% and on MEG to 12%. This
reduced burden of accumulation of cenvat credit to a great extent. The
Government also reduced import duties on raw material in the previous year from
15% to 10% and subsequently, this year from 10% to 7.5%. Since the pricing of
Raw Materials is on import parity basis, this helps in bringing down the cost
of raw materials and leads to improvement in profit margins.
In
view of the above, Polyester has now become cheaper than cotton and this augurs
well for the Industry. In terms of usage, Polyester has the inherent advantage
of easy maintenance, better fall , and dyeing and finishing characteristics.
Statistics have now shown that Polyester is now the most preferred item
especially by the lower income strata of consumers.
In
India, 2006-07 saw capacity expansions getting commissioned for PTA by 2 major
suppliers in the country, additions being to the order of nearly 1 .2 Million
Tonnes per annum. In keeping with the international scenario, and with excess
capacity, there was a fall in PTA prices.
In
comparison to cotton, non cottons have shown a consistent growth of around 10%
per annum, whereas cotton growth has been only in the range of 3%. Subject to
weather conditions and restrictions on arable land, the incremental requirement
for the country's fibre needs will have to be made through non-cotton,
dominated by Polyester.
As of now , share of synthetics has gone up to 44% as compared to 26% a decade
ago. World over however, the share of synthetics is 60% and it is expected that
In
With specific reference to one of the main products at JBF, Polyester
Chips, even as of today there are a relatively few producers of Chips in the
domestic market, selling polyester Chips. As of 2006-07, the demand estimate
was nearly 440,000 Metric Tonnes, outstripping supply at 300,000 Metric Tonnes.
It is expected that the demand supply gap will continue to exist even up to
2010-11, in spite of proposed expansion in Chips capacity coming in from JBF.
With
reference to the other key product at JBF, Polyester partially Oriented Yarn
(POY), the total capacities in India have increased from 1.3 Million Tones in
2005 to 1.8 Million Tonnes in 2006 and expected to touch 2.5 Million tones by
2010 at a CAGR of 12.81%. Exports of POY are expected to take a major leap
forward following some of the conventional suppliers such as
Polyester chips Expansion:
New
Small Chips based capacities for POY are being set up and will also be on
expansion spree over the next one or two years. Foreseeing the requirement of
Chips in view of this additional growth, and as indicated earlier, the supply
demand gap in case of chips is likely to continue over the next 3 to 4
years.
Looking at this scenario, the company has gone ahead with additional
expansion of Polyester chips production, and it was decided to double the
capacity from 216,000 MT per annum at Sarigam Gujarat, to 432, 000 MT per
annum. JBF's total capacity of Chips, at the end of this expansion will be
550,000 MT per annum and will lead to consolidation and retaining its market
share in the Polyester Chips market in
Polyester PET Chips and Polyester Film plant at U.A.E.:
The
erection and installation activities for the proposed plant at Ras Al Khaimah
(RAK) in
OPPORTUNITIES:
* With the commencement of Production activities at RAK in UAE, the company has
now established a wider network for sourcing of Raw material internationally.
Considering higher volumes; of intake of Raw Material, JBF, both in
* With certain countries such as
* In case of Chips as well, huge potential with the existing Batch lines,
JBF can produce a wide array of specialized grades of Chips for new
applications and for diverse export markets.
* The increase in stand alone plants for producing POY from Chips gives
the opportunity to the company for catering to an enlarged market and company
will be exploiting this by putting up additional capacity for Chips
production.
THREATS:
* Certain quantities of Chips are still being imported at Under invoiced
Rates. This creates a non-level playing field in the market place.
Authorities are
seized of this situation and it is expected that such imports will be
controlled in future.
* Overcapacity in the POY industry can affect margins. JBF is attempting
to export larger quantities in case of POY and Chips to mitigate this
threat.
* Low priced imports of Polyester yarn from
ADEQUATE INTERNAL CONTROLS:
The Company, in
consultation with its Auditors, periodically reviews and ensures the existence
of adequate internal control procedures and systems for the orderly conduct of
business.
The Internal
control systems are so designed to safeguard assets of the Company against
loss, unauthorized use or disposition and also include a review to ensure
overall adherence to management policies and applicable laws and regulations.
Cost control measures, with special emphasis on Cost cutting measures
especially on major cost determinants, have been implemented.
The Audit
Committee of Board of Directors actively reviews the adequacy and effectiveness
of internal control systems and suggests improvements for strengthening them.
The Company has strong Management information System which is an integral part
of control mechanism
Fixed Assets:
²
²
²
Building
²
Plant
and Machinery
²
Furniture
and Fixtures
²
Office
Equipments
²
Vehicles
²
Equipments
As per website
Corporate Profile:
Subject, stands on a gleaming pinnacle of success as an industry leader
in Polyester Chips & as one of the top 5 players in the polyester Partially
Oriented Yarns (POY) in
The company conceived as a private limited company in 1982, attained the corporate
status by becoming public limited company in the year 1986. The company's
growth can be imagined by the fact that company's turnover has increased by
about 250 times since it became public limited.
It was not only the corporate status and turnover, which changed but also the
company's product profile engorged with the vibrant polyester industry in
Starting its operations as a consumer of POY for texturising yarns to become a
leading supplier of POY in
Despite company's focus on Indian market, it never lost the opportunity to
cater to the growing polyester markets globally and made its due presence in
global polyester markets . These efforts were duly recognized by the govt of
Subject’s commitment to the quality and customer is driven by ISO 9001 system
of quality standards. JBF has also been accredited with ISO 14001 certificate
for environmental management.
JBF INDUSTRIES
LIMITED
UNAUDITED
STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE 2008
(Rs. In Millions)
|
Particulars |
Year ended |
|
|
|
|
31.03.2008 |
|
|
|
Audited |
|
1 a) |
Turnover |
22636.700 |
|
b) |
Excise Duty recovered on sales |
1640.800 |
|
c) |
Net Turnover |
2095.900 |
|
2 |
Other Income |
101.00 |
|
3 |
Total Income |
21096.900 |
|
4 |
Total Expenditure : |
|
|
|
a) (Increase) /Decrease in Stock in trade and work in progress |
109.600 |
|
|
b) Consumption of Raw Materials |
16523.700 |
|
|
c) Purchases of Traded Goods |
2.800 |
|
|
d) Employees Cost |
169.700 |
|
|
e) Depreciation & Amortisation |
438.200 |
|
|
f) Exchange Difference (net) |
[12.000] |
|
|
g) Other Expenses |
1568.200 |
|
|
Total Expenditure |
18800.200 |
|
5 |
Interest & Finance Charges |
418.800 |
|
6 |
Exceptional Items |
-- |
|
7 |
Profit from Ordinary Activities Before Tax |
1877.900 |
|
8 |
Provision for: a) Current tax |
595.300 |
|
|
b) Deferred tax |
49.100 |
|
|
c) Fringe Benefit Tax |
1.900 |
|
9 |
Net Profit from Ordinary Activities After Tax |
1267.600 |
|
10 |
Extraordinary Items (net of expenses Rs. Nil) |
-- |
|
11 |
Net Profit for the period |
1267.600 |
|
12 |
Paid Up Equity Share Capital (Face Value of Share Rs. 10/- each) |
620.600 |
|
13 |
Reserves Excluding Revaluation Reserve (As per unaudited Balance Sheet
of previous accounting year) |
5272.600 |
|
14 |
Earning Per Share - Basic (Rs.) (*Not Annulised) |
22.02 |
|
|
Diluted - (*Not Annulised) |
17.51 |
|
15 |
Public
Shareholding |
|
|
|
-No of Shares |
38528286 |
|
|
-Percentage of Shareholding |
62.08 |
Notes
- The above standalone
results have been reviewed by the Audit Committee and taken on record by
the Board of Directors at their meeting held on 30th July, 2008.
- The financial
results are in accordance with the recognition and measurement principles
laid down in Accounting Standard ( AS-25)- "Interim Financial
Reporting" as notified in Companies ( Accounting Standards)
Rules,2006.
- The Statutory
auditors of the Company have carried out a Limited Review of the results
for the quarter ended 30th June, 2008 in accordance with clause
41 of the Listing Agreement.
- Based on the
legal opinion obtained by the Company, the Company during this quarter has
decided to capitalise the foreign currency exchange differences on amount
borrowed for aquisition of fixed assets as stipulated in Schedule- VI to
the Companies Act, 1956 as against charging the same to the Profit &
Loss Account. This is at variance to the treatment prescribed in the
Accounting Standard -11 on "The Effect of Changes in Foreign Exchange
rates " notified in the Companies (Accounting Standards) Rules ,2006.
Had there been no change in the accounting policy , profit before tax for
the quarter ended 30th June, 2008 would have been lower by Rs. 194.400
Millions.
- As per the
terms of offer, Foreign Currency Convertible Bonds (FCCB) issued by the
Company, the Bond holders have option to convert these bonds into equity
shares at initial conversion price of Rs 90 per share, with a fixed
exchange rate of 1 USD = Rs. 45.75. Considering the market price of the
Company’s Shares, it is more likely that bondholders’ will exercise their
option to convert these bonds into equity shares. Hence the FCCB have been
considered more in the nature of Non-monetary items. Consequently, the
exchange gain of Rs.28.200 Millions for the quarter ended 30th June, 2008
on reinstatement of FCCB has not been recognized.
- The scheme of
amalgamation of Microsynth Fabrics (India) Limited into the Company has
been submitted to the Hon'ble High Court of Judicature at Mumbai for
sanctioning under section 391 and section 394 of the Companies Act, 1956.
The Company held meetings of Equity share holders & the secured
creditors on 15th July, 2008 as directed by The Hon'ble High Court of
Judicature at Mumbai. The scheme has been approved in both the above refered
meetings and subsequently Company has filed petition for amalgamation to
The Hon'ble High Court of Judicature at Mumbai. In terms of the scheme the
appointed date for the aforesaid scheme is April 1, 2007. Upon receipt of
statutory approvals, the scheme will be given effect to in the financial
results for the quarter ended 30th June, 2008 and year ended
31st March,2008 and will be accordingly restated.
- In respect of
the Auditors' qualification on the Financial results for the year ended
31st March,2008 regarding nonprovision of marked to market loss of Rs
934.000 Millions for derivative contracts entered by the Company to hedge
its exposure to foreign exchange and interest rate, during the quarter the
Company has unwound one of the contracts having marked to market loss of
Rs 712.100 Millions and the net realised loss of Rs 10.700 Millions on the
same has been charged to the Profit & Loss account. The information
about the marked to market loss as on 30th June, 2008 in respect of other
contract equivalent to USD 20 million is not available and hence the
effect on the Profits for the quarter ended 30th June,2008 due to non
provision of marked to market loss cannot be quantified.
- The
Construction of 2nd Phase of polyester Chips Plant at Sarigam,
- In the
opinion of the management, the company is engaged only in the business of
Synthetic Yarn, including polyester chips. As such, there are no separate
reportable segments.
- Figures in
respect of the previous period/Year have been regrouped or rearranged
wherever necessary to make them comparable.
- There were no
investors complaints pending as on 1st April, 2008. 5 Complaints received
during the quarter. All complaints were resolved & no complaints were
outstanding as on 30th June, 2008.
Additional information in respect of Consolidated Accounts ( unreviewed)
not forming part of above results :
|
Particulars |
Year ended |
|
|
|
|
31.03.2008 |
|
|
|
Audited |
|
|
Turnover |
29053.400 |
|
|
Profit before Tax |
1795.800 |
|
|
Profit for the period after tax &
Minority Interest |
1219.000 |
|
|
Earnings Per Share (Rs.)- Basic (*Not
Annulised) |
21.18 |
|
|
-Diluted (*Not Annulised) |
16.80 |
Press Release:
Polyester Industry- Turnaround sector
Writing a column implies that you possess the sesame to investor
problems, that MDs share their results with you even before the quarter has
ended and that your shoulder is broad enough to play Agony Uncle.
So consider the fallout of putting my email address at the bottom of
this page:
“When will you, Mudarji, write about an industry that is turning
around?”
“When will you help me treble my money so that I can get my son married?
“What valuable advice will enable me to recover the losses incurred over
the years?”
Friends, please consider this column as a humble one-stop reply.
So read carefully on. For years, one steered clear of the POY (partially
oriented yarn) industry on the grounds of over-competition and erratic
profitability. From now on, you may overlook the industry’s prospects only at
your own risk. Reason: the turnaround has begun, manufacturers are making money
hands over fist (cliché!) and investors who buy into selective stocks will
stand to make handsome gains a year from now. I intend to finally buy my peace
with this column.
But wait, I claim no privileged information. I have simply drawn from
the most widely circulated annual report (Reliance Industries 2006-07) in
This is what it states: “The ability of polyester producers across
Multi-year! Reliance’s argument is based on the interplay of diverse
developments. First, the macro argument: Polyester production has moved from
the west to
Secondly, as capacity addition peaked in 2003-05 and almost 12 million tonne
of effective polyester capacity was added in Asia, the older players – with
higher production costs of $ 40-70 a tonne – were edged out of the business,
reflected in more than a million tonne of capacity closure from 2003 to 2007
and polyester production decline by around 1.8 million tonne in these
countries.
Thirdly, only one new polyester player is expected to go on-stream in
2007 compared to an average of nine during 2003-2005 in
Fourthly, more than 10 million tonne of polyester capacity is perceived
to be batch, sub-economical and outdated, awaiting closure, while only 3 to 4
million tonne of batch capacities were similarly considered during the last
uptrend.
Turn to demand-side economics. The demand in
Relatively low inventory levels may prompt restocking. The 2008 Beijing
Olympics is expected to drive enhanced Chinese demand. The removal of residual
quotas in 2008 on
So much for a continental perspective. Come home. Over 55 per cent of
the 4.6 million tonne of textiles produced by
So where does one put one’s money?
Reliance Industries (Rs 2567): The great thing about Reliance is that when
paraxylene supplies tighten, Reliance’s captive supply will translate into
higher margins; when POY turns buoyant, Reliance will simply recruit more
people to count the cash.
The problem: with a number of diverse businesses at play, it will be
difficult for a simple POY analyst to even make a reasonable estimate of
Reliance’s profits. Besides, a staggering market cap of Rs 3623740.000 Millions
supporting a multi-business company means you need to know clearly what you are
doing. Skip.
Filatex
That’s the decoy. Because if you lost interest at that point –
understandably – you might have missed out on the makings of an interesting
play. Check the EBITDA levels across the last two announced quarters: a profit
of Rs 46.300 Millions and Rs 47.600 Millions. A rise in interest cover from
2.48 to 3.22. Rock-steady EBITDA margin of 6 per cent.
Look ahead. The company expects to report a top line of Rs 3700.000
Millions for the current year, a financial restructuring has increased equity
to Rs 170.000 Millions in exchange for an inflow of net worth while term loan
debt is expected to be completely repaid.
My calculation is a cash profit of Rs 200.000 Millions for the current
year against a market cap of a little over Rs 600.000 Millions and if
Reliance’s long-term trend call is correct, then you can live off the cream of
subsequent growth and read subsequent editions of this column from Bali, Hawaii
or Mauritius. Only don’t forget to send me a thank you post card from there.
JBF Industries (Rs 161): Engaged in the manufacture of polyester
chips and partially oriented yarn. The chips are used to make yarn, resulting
in integration. Besides, JBF is an industry leader in polyester chips in
Let us take a quick look at the numbers. EBITDA margin has steadied
around 12 per cent across the last five quarters; EBITDA strengthened from Rs
350.000 Millions to Rs 610.000 Millions simply because the top line
strengthened from Rs 2900.000 Millions to Rs 4950.000 Millions during this
period. My inference: a buoyant industry environment.
But what excites me about JBF is not just the realisations play but its
volume proposition. Its existing annual yarn and chips capacity of 150,000
tonne and 334,800 tonne will grow to 258,000 tonne and 766,000 tonne
respectively (including its
The UAE operation commenced in July 2007, attracting tax benefits, low
raw material cost, lower fuel cost by 50 per cent and the absence of customs
duty. By the time this translates into full-blooded numbers, you could have an
attractive proposition on your hands: an EBITDA of a shade under Rs 5000.000
Milliona in 2008-09 (we are still looking only at Rs 2400.000 Millions if you
annualise the numbers of the first quarter of the current year) on a fully
diluted equity of Rs 750.000 Millions
So, figures over the coming quarters might prompt you to conclude that
newspapers need better proofreaders. Compare that with a prevailing market
capitalisation of Rs 1230.
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 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 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.67.71 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
46 |
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 |
|