MIRA
INFORM REPORT
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Report Date : |
23.10.2008 |
IDENTIFICATION DETAILS
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Name : |
ICI INDIA LIMITED |
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Registered Office : |
Geetanjali
Apartment, 1st floor, 8-B, |
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Country : |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
12.03.1954 |
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Com. Reg. No.: |
21-21516 |
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CIN No.: [Company
Identification No.] |
L24292WB1954PLC021516 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMI04848E |
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PAN No.: [Permanent
Account No.] |
AAACI6297A |
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Legal Form : |
It is
a Public Limited Liability Company.
The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturer
and Marketing of Paints, Speciality Chemicals, Catalysts, Nitrocellulose,
Rubber Chemicals, Pharmaceuticals, Adhesives and Industrial Starch. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 38000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established company and a subsidiary of Imperial Chemical Industries Plc of
U.K. engaged in manufacturing and marketing of Paints, Industrial Chemicals,
Rubber Chemicals, textile auxiliaries, adhesives etc. The Company’s
performance during the financial year 2005-06 has been good. Trade relations
are fair. Payments are correct and as per commitments. It can be considered
good for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered
Office : |
Geetanjali
Apartment, 1st floor, 8-B, Middleton Street, Kolkata – 700 071,
West Bengal, India |
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Tel. No. |
91-33-22267462 |
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Fax No. |
91-33-22277925 |
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E-Mail |
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Website |
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Corporate
Office / Factory : |
10th
Floor, DLF Plaza Tower, DLF Qutab Enclave, Phase – I, Gurgaon – 122 002,
Haryana |
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Tel. No.: |
91-124-2540400 |
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Fax No.: |
91-124-2540849 |
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E-Mail : |
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Factory 2 : |
Located at · Mohali, Punjab · Hyderabad, Andhra Pradesh ·
Thane, Maharashtra |
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Headquarters : |
Located at Gurgaon, Haryana |
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Research and Technology Centre : |
Located at Thane, Maharashtra |
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Branches : |
National Starch And Chemicals
Plot
No. 1/1 TTC Industrial Area, Thane Belapur Road, Kopar Khairane, Navi Mumbai –
400 709, Maharashtra |
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Tel. No.: |
91-22-27787352-53 |
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Fax No.: |
91-22-27780025 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Aditya
Narayan |
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Designation : |
Chairman |
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Age |
50 years |
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Qualification |
MS, LLB, B.E. |
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Experience |
16 years |
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Date
of Joining |
01.05.1994 |
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Previous
Employment |
·
Chand Chaap Fertilisers and Chemicals
Limited ·
Hindustan Unilever Limited ·
BHP Billiton Marketing Services India Private
Limited |
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Name: |
Mr. M R Rajaram |
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Designation: |
Whole time
Director and Chief Financial Officer |
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Age: |
59 years |
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Qualification: |
ACA, B.Com |
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Experience: |
36 Years |
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Date of
Appointment: |
1.101984 |
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Name: |
Mr. David S
Whtewood |
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Designation: |
Director |
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Name: |
Mr. Rajiv Jain |
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Designation: |
Managing Director
and Chief Executive officer. |
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Age: |
54 Years |
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Qualification: |
MBA, B Tech |
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Experience: |
33 years |
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Date of
Appointment: |
18.04.1983 |
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Name: |
Mr. David J Gee |
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Designation: |
Director (w.e.f.
28 January, 2005) |
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Name: |
Mr. R.
Gopalakrishnan |
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Designation: |
Director |
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Other Directorship
: |
·
Rallis India Limited ·
Tata Chemicals Limited ·
Tata Sons Limited ·
Tata Motors Limited ·
Tata Power Co. Limited ·
Tata Teleservices Limited ·
Tata AutoComp Systems Limited ·
Tata Technologies Limited ·
Castrol India Limited ·
ABP Private Limited ·
IMACID S.A. ·
Advinus Therapeutics Private Limited |
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Name: |
Ms. Renu S Karnad
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Designation: |
Chairperson |
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Name: |
Mr. M V Subbiah |
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Designation: |
Director |
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Name: |
Mr. Sandeep Batra |
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Designation: |
Wholetime
Director and Chief Financial Officer |
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Name: |
Mr. Andy M. Ransom |
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Designation: |
Director |
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Name: |
Mr. Anthony J
Britt |
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Designation: |
Director |
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Other Directorship
: |
·
ICI Swire Paints (Shanghai) Limited ·
ICI Swire Paints (China) Limited ·
ICI Swire Paints Limited |
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Name: |
Mr. A M Ransom |
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Designation: |
Director |
KEY EXECUTIVES
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Audit Committee : |
Ms. Renu S Karnad (Chairperson) |
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Mr. David J Gee |
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Mr. R Gopalakrishnan |
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Mr. M V Subbiah |
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Mr. A J Britt |
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Remuneration and Nominations Committee : |
Mr. M V Subbiah (Chairman) |
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Mr. A J Britt (Chairman) |
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Mr. David J Gee |
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Mr. R Gopalakrishnan |
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Ms. Renu S Karnad |
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Shareholders/Investors Grievance
Committee : |
Mr. David J Gee (Chairman) |
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Mr. Rajiv Jain |
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Mr. M R Rajaram |
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Name : |
Mr. R Guha |
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Designation : |
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(As on 31.03.2007)
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Imperial
Chemical Industries PLC |
20776000 |
50.8 |
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Domestic
Financial Institutions and Mutual Funds |
2674000 |
6.5 |
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Foreign
Financial Institutions |
1458000 |
3.6 |
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Banks
and Insurance Companies |
6749000 |
16.5 |
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Other
categories, incl individuals |
9214000 |
22.6 |
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Total |
40871000 |
100.00 % |
BUSINESS DETAILS
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Line of
Business : |
Manufacturer
and Marketing of Paints, Speciality Chemicals, Catalysts, Nitrocellulose,
Rubber Chemicals, Pharmaceuticals, Adhesives and Industrial Starch. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Installed
Capacity |
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Adhesives |
Tonnes |
50000 |
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Catalysts |
Tonnes |
2480 |
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Paints |
K
Liters |
63040 |
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Paints |
Tonnes |
10000 |
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Rubber Chemicals and
Diphenylamine |
Tonnes |
-- |
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Textiles Auxiliaries and Surfactants |
Tonnes |
@ |
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Thinners |
K
Liters |
4460 |
GENERAL INFORMATION
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No. of
Employees : |
952 |
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Bankers : |
·
Central Bank of India ·
Citibank NA ·
Deutsche Bank AG ·
Hongkong and Shanghai Banking Corporation ·
Standard Chartered Bank ·
HDFC
Bank Limited ·
State
Bank of India |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
BSR and
Associates Chartered
Accountant |
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Associates/Subsidiaries : |
ASSOCIATES: ·
Elotex AG ·
Gidden, USA ·
ICI Paints Asia Pacific, Singapore ·
ICI Autocolor ·
ICI Espana, S. A. ·
ICI Paints, Thailand ·
ICI Paints, UK ·
ICI Paints, Indonesia ·
ICI Paints, Vietnam ·
ICI Swire Paints, Hong Kong ·
ICI Woobang Company Limited, Korea ·
Kaohsiung Monomer Company Limited ·
National Starch and Trading Company ·
National Starch, Malaysia ·
National Starch, Thailand ·
National Starch, UK ·
National Starch, USA ·
National Starch, China ·
National Starch, Italy ·
National Starch, France ·
National Starch, Indonesia ·
National Starch, Phillipines ·
National Starch, Singapore ·
National Starch, Taiwan ·
Quest International Flavours, USA ·
Quest International, Canada ·
Quest International, Egypt ·
Quest International, The Netherlands ·
Synetix, Emmerich ·
Synetix, UK ·
Synetix, USA ·
Uniqema, GmbH ·
Uniqema, Indonesia ·
Uniqema, Malaysia ·
Uniqema, Spain ·
Uniqema, UK ·
Uniqema, USA ·
Unichema Chemicals Limited ·
Uniquema Asia Pacific ·
Uniquema Chemie B. V. ·
Uniqema, South Africa ·
Uniqema, Chemie BV ·
Berger Paints India Limited ·
Zeneca Limited, UK SUBSIDIARIES: ·
Indian Explosives Limited Pressman House, 1st Floor, 10A, Lee Road,
Kolkata - 700 020, West Bengal Tel. No. 91-33-2873035 Fax No. 91-33-2872973 E Mail: manik_paul@ici.com ·
Imtiating Explosives Systems India Limited (a subsidiary of
Indian Explosives Limited) ·
Quest International India Limited ·
Polyinks
Limited |
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
41690000 |
Equity Shares |
Rs.10 each |
Rs.416.900 millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
38379950 |
Equity Shares |
Rs.10 each |
Rs.383.800 millions |
1.
Of the above equity shares : -
·
8532667 were allotted as
fully paid up bonus shares by capitalization of share premium and reserves
(2006-07 : 8532667 shares)
·
2968824 were issued on
part conversion of debentures. (2006-07 : 2968824 shares)
·
8918121 were issued as
fully paid up otherwise than for cash, issued pursuant to a contract. (2006-07
: 8918121 shares)
·
20776213 shares are held
by the holding company Imperial Chemical Industries Limited, England. (2006-07
: 20776213 shares). On 2 January 2008, AkzoNobel N V has become the owner of
the entire equity share capital of Imperial Chemical Industries Limited, which
makes it the ultimate holding company
2. During the year 2490662 shares were bought back (2006-07 : nil). The
shares have been extinguished and face value thereof of Rs.24.900 millions has
been adjusted against share capital
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS
FUNDS |
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1] Share Capital |
383.800 |
408.700 |
408.700 |
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2] Share
Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves &
Surplus |
7245.900 |
8287.800 |
5104.600 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
7629.700 |
8696.500 |
5513.300 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured
Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING
|
0.000 |
0.000 |
0.000 |
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DEFERRED TAX
LIABILITIES |
94.800 |
81.000 |
130.400 |
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TOTAL
|
7724.500 |
8777.500 |
5643.700 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
1332.500 |
1297.600 |
1453.100 |
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Capital work-in-progress
|
104.700 |
35.300 |
48.800 |
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INVESTMENT
|
6926.000 |
8257.200 |
4356.500 |
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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
|
1239.500
|
1321.500
|
1217.100
|
|
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Sundry Debtors
|
1040.000
|
1646.500
|
1120.700
|
|
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Cash & Bank Balances
|
169.900
|
139.000
|
158.300
|
|
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Other Current Assets
|
0.000
|
0.000
|
0.000
|
|
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Loans & Advances
|
544.300
|
444.600
|
466.600
|
Total Current Assets
|
2993.700
|
3551.600
|
2962.700
|
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Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
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Current Liabilities
|
2659.700
|
2340.400
|
2112.800
|
|
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Provisions
|
972.700
|
2023.800
|
1076.700
|
Total Current Liabilities
|
3632.400
|
4364.200
|
3189.500
|
|
Net
Current Assets
|
(638.700) |
(812.600)
|
(226.800)
|
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
12.100 |
|
|
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|
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TOTAL
|
7724.500 |
8777.500 |
5643.700 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
Sales Turnover
|
9301.400 |
8882.200 |
9078.300 |
Other Income
|
341.900 |
661.000 |
|
Total Income
|
9643.300 |
9543.200 |
9078.300 |
|
|
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|
|
Profit/(Loss) Before Tax
|
904.100 |
5862.300 |
855.100 |
Provision for Taxation
|
302.000 |
1378.100 |
353.600 |
Profit/(Loss) After Tax
|
602.100 |
4484.200 |
501.500 |
|
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Earnings in Foreign
Currency :
|
|
|
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Export Earnings |
56.600 |
89.600 |
|
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Commission Earnings |
8.600 |
18.200 |
|
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Other Earnings |
3.400 |
2.400 |
|
Total Earnings
|
68.600 |
110.200 |
227.700 |
|
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Imports :
|
|
|
|
|
Raw Materials |
888.300 |
1440.400 |
|
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Capital Goods |
9.400 |
5.400 |
|
|
Others |
445.700 |
342.900 |
|
Total Imports
|
1343.400 |
1788.700 |
1803.600 |
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Expenditure:
|
|
|
|
Materials Consumed
|
5516.800 |
5330.900 |
|
Depreciation
|
225.100 |
224.700 |
|
Interest
|
(5.000) |
22.900 |
|
Exceptional items
|
187.300 |
(4461.200) |
|
Other Expenditure
|
2815.000 |
2563.600 |
|
Total Expenditure
|
8739.200 |
3680.900 |
8113.100 |
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2008 |
|
Type |
1st
Quarter |
|
Sales
Turnover |
2275.200 |
|
Other
Income |
626.700 |
|
Total
Income |
2901.900 |
|
Total
Expenditure |
2065.800 |
|
Operating
Profit |
836.100 |
|
Interest |
(7.500) |
|
Gross
Profit |
843.600 |
|
Depreciation |
54.200 |
|
Tax |
80.000 |
|
Reported
PAT |
708.800 |
KEY RATIOS
|
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.00 |
0.00 |
0.01 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
0.81 |
0.84 |
0.90 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed Assets |
3.90 |
3.69 |
3.16 |
|
Inventory |
9.04 |
8.62 |
8.55 |
|
Debtors |
8.62 |
7.91 |
9.13 |
|
Interest Cover Ratio |
31.65 |
46.25 |
23.15 |
|
Operating Profit Margin(%) |
10.00 |
14.52 |
10.35 |
|
Profit Before Interest And Tax
Margin(%) |
8.06 |
12.47 |
8.32 |
|
Cash Profit Margin(%) |
7.14 |
11.54 |
6.70 |
|
Adjusted Net Profit Margin(%) |
5.20 |
9.49 |
4.67 |
|
Return On Capital Employed(%) |
11.46 |
19.28 |
16.43 |
|
Return On Net Worth(%) |
7.39 |
14.65 |
9.33 |
Note :
ICI India Limited has obtained the Central Government’s
approval for not publishing the full accounts of its subsidiary Polyinks
Limited (‘Polyinks’) as a part of Annual Report, in terms of section 212(8) of
the Companies Act, 1956. The full accounts of Ployinks will be available for
inspection by any investor at the registered office of the Company. Members who
are interested in having a full set of the audited of Polyinks, may write to
the Company Secretary.
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject a subsidiary of Imperial Chemical Industries Plc of UK, deals in
Paints, Industrial Specialities (like Uniqema, Adhesive, Starch and Polymers)
and Industrial Chemicals. Imperial Chemical Inds Plc of UK holds 51% equity
stake and Asian Paints 9.2% stake in the Company as on Oct 24, 2003. Asian
paints has picked its entire holding of 9.2 % in the company from Govt. of
India which was offloaded by a auction of public notice. The company which came
into existence in 1953 as Indian Explosives was renamed as IEL in 1984-85 and
ICIL in 1989-90.
RESTRUCTURING OF BUSINESS PORTFOLIO
:
Subject is restructuring its portfolio simililar to that of ICI Group as a
whole is about to complete its restructuring process thus transforming itself
to an leading Speciality Products and Paints company. As part of this exercise
it has hived off its seeds, fibre and fertiliser businesses.
The Explosive business of the company which was first transferred to Indian
Explosives Limited, a JV between the company and Orica Investments Pty Limited
of Australia in 1999 and latter has divested its 51% holding in JV to Orica
Investments Pty Limited for a consideration of Rs.666.400 millions.
The Synetix (Catalyst) business was divested to Johnson Matthey Group of UK
with effect from Dec 2, 2002. The company has acquired the Catalyst Business
(Edible Oils and oleochemicals applications) from HLL for a consideration of
Rs.210 millions.
The Pharmaceutical Business was sold to Nicholas Piramal India for a
consideration of Rs.700 millions including working capital.
The company is in the process of selling its nitrocellulous business, which was
acquired from Asha Nitrochem Inds Limited in 1998 and Trading business to an
affiliate of CDC Group Plc of UK for an consideration of Rs.750 Million.
The Company's Polyurethanes business was sold to Huntsman International India
Private Limited, a wholly owned subsidiary of M/s Huntsman Corporation of USA
on March 31, 2001.
The company has also completed acquisition of majority stake in Quest JV
and have formed Quest International India Limited, a joint venture between ICI
India, Quest International BV and Hindustan Lever Limited Today Quest
International India Limited is a subsidiary of the company.
PAINTS BUSINESS :
Subject markets its paints under the brand name Dulux portfolio. As of March
2003 ICIL has an installed capacity to produce 40740 KL of Liquid Paints, 10000
tonnes of Stiff Paints and 4460 KL of Thinners.
To strengthen its range of procucts Subject has commissioned a Paint plant at
Thane. The decorative paint manufacturing facility at Mohali, Chandigarh was
commissioned on schedule in Mar'98.
The Motors and Industrial Paints business along with production facility at
Rishra was transferred to Berger Auto and Industrial Coating Limited, a Joint
Venture with Berger Paints India Limited in 2001. Further the company has
decided to divest its holding in the JV company in favour of the other JV
partner i.e Berger Paints.
INDUSTRIAL SPECIALITIES :
This business division consists of Uniqema, Adhesives, Starch and Polymer
businesses.
Consolidation of the Adhesives Business (a sub-unit of Speciality Chemicals
Division of HLL) which was purchased for a consideration of Rs 90 millions in
Dec 2001 is completed during FY2002-03. Further the company has also completed
and commissioned the expansion of Adhesive plant in September 2002. Subject's
Adhesive products has significant market share in book binding, soap-wrapper
and wood-working industry. Its plymers are used in the personal care segment
and Starches are used by FMCG industry.
Some units of ICI have obtained the ISO 9002 certificate.
The company has increased its installed capacity of Adhesives and Polymers by
2500 tonnes and with this expansion the total installed capacity of Adhesives
and Polymers has increased to 5000 tonnes.
BUSINESS
ENVIRONMENT
The business environment in India remained positive during 2007-08 with the GDP
growing by nearly 9%, keeping up the trend established in the recent years. However
the global slowdown, soaring international crude oil prices and spurt in
inflation rate in early 2008 dampened the growth momentum. Going forward, while
the growth fundamentals of the Indian economy continue to be intact, the rate
of growth in 2008-09 is likely to be tempered compared to the past few
years.
FINANCE AND ACCOUNTS
During 2007-08 sales and profit from businesses on a comparable basis grew by
19% and 26% respectively. However, due to changes in the portfolio of
businesses, the total income at Rs 9640 millions and PBIT from operations at Rs
1090 millions were only marginally higher than last year.
Exceptional items during the year amounting to a net charge of Rs 187.000 millions
consist mainly of refund of part of the purchase consideration for Advanced
Refinish business divested in March 2007, whereas the previous year had an
exceptional income of Rs 4460 millions from divestments. Consequently, the
Profit after tax of Rs 602.000 millions for the year is not comparable with the
previous year's corresponding figure of Rs 4484.000 millions.
Following its prudent dividend policy, the Board has recommended a dividend of
Rs 8.00 per share for the year 2007- 08 (previous year: Rs 7.00 per share, plus
an additional one off special dividend of Rs 20.00 per share), which will paid
after the approval of the members at the forthcoming Annual General
Meeting.
No fresh public deposits were accepted by the Company during the year. Unclaimed
deposits and unclaimed dividends amounting to Rs 1.800 millions were remitted
into the Investor Education and Protection Fund of the Central Government as
required under section 205C of the Companies Act, 1956.
SIGNIFICANT
DEVELOPMENTS
With effect from 2 January 2008, AkzoNobel NV, Netherlands has become the owner
of the entire equity capital of Imperial Chemical Industries, UK, the majority
shareholder of theCompany, through a scheme of arrangement under section 425 of
the UK Companies Act, 1985. Consequently, the Company became an AkzoNobel
company effective that date.
The Board had, at its meeting held on 28 March 2008, recommended a proposal to
divest the Adhesives business of the Company; this has since been approved by
the shareholders through postal ballot on 17 May 2008. The initial
consideration of Rs 2600 millions, including Rs 300 millions towards the
Company's shareholding in its subsidiary Polyinks Limited, has been received
subject to certain agreed adjustments for cash, debt and working capital. The
financial effect of this divestment will be reflected in the Company's results
on completion of the transaction.
MANAGEMENT DISCUSSION AND ANALYSIS
Paints
Market conditions were, on the whole, good for the Paints business and there
was robust demand in most parts of the country. Backed by the strong demand for
its products, the Paints business continued to grow aggressively and delivered
a much higher performance over the previous year.
The Paints business initiatives in building the premium Dulux portfolio,
placement of in-store tinting machines, innovative and new colour offers and a
demand-generation initiative with painters/contractors helped improve the
Company's channel relationships whilst achieving higher consumer satisfaction.
In the Decorative segment, exteriors continued to be the fastest growing range
and the business further strengthened its portfolio in this category.
WeatherShield Max, a premium exterior paints, was renovated to improve its
water resistant properties and the new formulation has gained wide acceptance
with trade and consumers. The Company now has the full range of products and
services in this category and is poised to improve its position.
The Company has also maintained its focus on the interior finishes. New
products - low cost Acrylic Distemper, Primer and Putty - were launched in this
category. The Enamel segment has been witnessing a slowdown for some years
since other materials on signboards, hoarding and the like are replacing the enamel
paint. Woodcare is emerging as an attractive opportunity and the business
renovated its products to participate in this segment. The Company continues to
use its research and development base to bring to the consumer new products
with improved features and for special applications.
The refinish business continued to do well. The market continues to witness the
trend of customer upgrading from conventional refinish paints to PU based
paints. Company's PU based products viz. Eterna, Vektor and Duco PU have found
good acceptance with the dealers and users.
Overall, the outlook for 2008-09 appears positive. The government's thrust on
infrastructure and continuance of tax incentives on home loans and reduced
excise duties will have a favourable impact on the paints industry. However,
high crude oil prices and inflation will impact input costs leading to pressure
on margins. The increase in interest rates could adversely affect the housing
sector. The automobile sector too is expected to grow. While the reduction in
excise duties should promote growth, inflation and higher prices could create
negative pressures.
Chemicals / Others
The Adhesives, Polymer and Starch businesses performed well with sales growing
by 20%. The Adhesives business grew by 19% with good growth in Tobacco and Wood
working segments. The Speciality Polymer group also grew by 28% with excellent
growth in the Elotex segment. The food and pharmaceutical starch business
growth was flat during the year.
With customs duty nearing ASEAN levels, competition will further intensify from
imports as well as from low cost players. To effectively counter these factors,
the business intensified its focus on value selling and leveraging its first
mover advantage to enhance its market position.
Ythe Company has entered into a contract with Henkel CAC Private Limited, an
affiliate of the Henkel Group, to divest its Adhesives business. In line with
the contract, the risk and reward from the Business has been assumed by the
purchaser with effect from 3 April 2008.
SUBSIDIARY
COMPANY
The statement of particulars relating to the Company's subsidiary Polyinks
Limited ('Polyinks'), pursuant to Sec 212 of the Companies Act, 1956
The Company has obtained the approval of the Central Government for not
attaching the full accounts of Polyinks to its annual accounts. A summary of
the Balance Sheet of Polyinks as on 31 March 2008 and its performance for the
year ended on that date.
FUTURE PLAN OF
ACTION
RandD efforts of the Company will continue to focus on development of
new products and applications, efficiency improvements, waste reduction, saving
in energy consumption and introduction of environment friendly products.
TECHNOLOGY
ABSORPTION, ADAPTATION AND INNOVATION
Efforts
And Benefits
- New and innovative products in response to changing customer needs,
like Polyputty, Hi-endurace exterior emulsions and Weathershield Clear for
alternate surfaces were launched.
- Based on customer feedback, some products in the woodcare range were
renovated and re-launched.
- Usage of raw materials in some product lines were optimized.
DIRECTOR’S PROFILE
i. Mr Rajiv Jain
Mr Rajiv Jain
joined the ICI Group in 1974 and was appointed to the Board of the Company in 1997.
He had held a number of senior positions in Corporate Finance, Information
Technology and headed the Specialty Chemicals, Rubber Chemicals, Catalysts and
Explosives businesses. He was appointed Chief Financial Officer in December
1997 and Chief Operating Officer of the Company in February 2000. He was
appointed Managing Director and CEO Paints in April 2003 for a term of 5 years
and has since been re-appointed w.e.f. 1 April 2008. Mr Jain, born in January
1951, has done his B Tech (Hons) in Chemical Engineering from IIT Kharagpur and
MBA from USA. Apart from ICI India Limited, Mr Jain is the Chairman of ICI
India Research and Technology Centre and a Director of CIC Paints Private
Limited, Colombo.
ii. Mr Aditya
Narayan
Mr Aditya Narayan
was appointed Chairman of the Board in April 2003. Starting as a management
trainee in 1973, he worked in diverse functions and has held several senior
positions including those of the Chief Executive of Fertilizer and Explosives
businesses. He served as the Managing Director of the Company from August 1996
to April 2003, during which period he played a key role in reshaping the
Company's business portfolio. Just before becoming the Managing Director, he
served as the Corporate Planning Manager at the ICI Group headquarters in
London. Mr Narayan, born in January 1952, is a B Tech from IIT, Kanpur. He also
holds formal qualifications in Law, Multidisciplinary Sciences and Strategic
Management.
iii. Mr R
Gopalakrishnan
Mr R
Gopalakrishnan is a Non-Executive Director of the Company since May 1999. Mr
Gopalakrishnan, born in December 1945, is a graduate in Physics from Calcutta
University and in Engineering from IIT, Kharagpur. In 1967 he joined Hindustan
Lever as a Management Trainee and went on to become a member of Hindustan
Lever's Management Committee as Executive Director (Exports) in mid 1980s. In
1991, he was appointed Chairman, Unilever Arabia, based in Jeddah to establish
and manage Unilever's consumer products business in the GCC countries. Upon
return to India in 1995, he became the Managing Director of Brooke Bond Lipton
India Limited, Unilever's foods and beverages company in India. After the
merger of that company with Hindustan Lever Limited, he was appointed
Vice-Chairman of the merged entity. After 31 years with Levers, he joined Tata
Sons in August 1998 as an Executive Director.
iv. Mr Anthony J
Britt
Mr Anthony J Britt
joined the Board of the Company as a Non Executive Director w.e.f. 12 May 2008,
in the casual vacancy caused by the resignation of Mr A M Ransom. Born in
Sydney in 1960, Mr Britt is currently the Chief Executive Officer, Decorative
Paints Asia for AkzoNobel, prior to which he held various general management
positions in both the Decorative Paints and Marine and Protective Coatings
businesses with AkzoNobel. Currently based in Singapore, Mr Britt has extensive
international experience. He spent six years from 1998 in New Jersey as the
Global Director, Yacht Coatings with AkzoNobel. Whilst based in Brisbane, he
was the General Manager, Marine Coatings and later became the General Manager,
Decorative Paints, Central Europe. During this period he held various
directorship roles in Korea, Japan, Australia and Germany. Mr Britt holds a
Bachelor of Engineering (Chemical), Honors degree from Sydney University and
MBA from Macquarie University.
FIXED ASSETS
·
Land
- Leasehold
- Freehold
·
Buildings
·
Plant and Machinery
·
Plant and Machinery – under operating lease
·
Rolling stock, motor vehicles etc.
·
Furniture, fittings and equipment
·
Data processing equipment
·
Intangible assets
·
Patents, trademarks, knowhow etc.
WEB SITE DETAILS
PROFILE
Subject manufactures and markets paints, speciality chemicals, adhesives
and starch.
With an employee strength of about 900, Subject's manufacturing sites, business
and sales offices and distribution network span the length and breadth of the
country.
The Subject story
began way back in 1911 when Brunner Mond and Co, one of the four companies that
combined in 1926 to form ICI in UK, opened a trading office in Calcutta to sell
alkalis and dyes. In 1923, it became Brunner Mond and Co (India) and in 1929
the name was changed to Imperial Chemical Industries (India) Limited This was
followed by a period of sustained expansion, diversification and growth.
Subject's
manufacturing activities in India commenced in 1939 with the setting up of
Alkali and Chemical Corporation of India Limited in Rishra, West Bengal. Indian
Explosives Limited was set up in Gomia in 1954, the result of an agreement with
the government of India. Chemical and Fibres of India Limited came up in Thane
in 1963, manufacturing polyester staple fibre. When fertilizer manufacturing
operations began in Panki near Kanpur in 1969 it was the largest private sector
investment in fertilizers in India. On completion of the 3rd stream, the plant
had a capacity to manufacture 675,000 tpa of urea fertilizer.
The company also
commissioned its catalyst business at Panki in 1984.
The Subject
Research and Technology Centre was established in Thane in 1976 and a Crop
Protection Chemicals and Pharmaceuticals unit came up in Ennore, near Chennai
in 1978.
CONSOLIDATION AND
RESTRUCTURING
In 1984, the ICI
group companies in India were merged in what was one of corporate India's
largest mergers of that time.
Nalco Chemicals
India Limited was formed in 1987 with Nalco Chemical Company USA and ICI India
Limited, each holding 40% of the equity.
The first phase of
Subject's restructuring was completed in 1993 with the divestment of the seeds,
fibres and fertilizers businesses while the agrochemicals business was
transferred to a joint venture with Zeneca Limited of UK in 1995.
1996 saw the
establishment of a joint venture, Initiating Explosives Systems India Limited,
with The Ensign-Bickford Company of the USA for the manufacture of Initiating
Explosives Systems. The company has exited from the joint venture in late 2003.
While the new
paints plant and polyurethanes systems house were commissioned at Thane in
1997, another paints plant was commissioned at Mohali near Chandigarh and the
Uniqema Innovation Centre opened at Thane the following year.
In 1998 ICI exited
from its joint ventures with Nalco Chemical Company, USA and Zeneca, UK, as
part of its continuing restructuring exercise.
The explosives
business was transferred to Indian Explosives Limited, a joint venture between
the company and Orica Investments Pty Limited, Australia in 1999. The company
has exited from the joint venture in late 2003.
Trading in
National Starch Adhesives products commenced in 1999, followed by the
commissioning of a plant at Thane in 2000. The business has since been
strengthened with the acquisition of the portfolio from Hindustan Lever Limited
and the plant has further been strengthened through de-bottlenecking.
In line with
Subject's strategic objective, the Polyurethanes business was sold to the
Huntsman Group of USA in 2001.
The Motors and
Industrial Paints business was transferred to a Joint Venture with Berger
Paints India Limited, also in 2001, from which the company exited in 2002.
The flavours and
fragrances business was taken over as a joint venture (with ICI India holding a
majority stake) with Hindustan Lever Limited and Quest International B.V. in
2001. The company was converted into a wholly owned Subsidiary in 2006, from
which the company has exited in 2007 by sale of its shareholding to Givaudan
Group.
The Pharmaceuticals business of the company was divested to Nicholas Piramal
India Limited in 2002.
The catalyst
business of the company has been divested to Johnson Matthey Group in late
2002.
The Nitrocellulose
and Trading businesses were divested in 2004 to Nitrex Chemicals India Limited
(owned / funded by ACTIS), in which the company holds a minority stake.
The Rubber
Chemicals business was transferred to a subsidiary of PMC Group International, USA
in December 2005, where the company holds a minority stake.
The company has
acquired controlling interest during 2006 in Polyinks Limited, Hyderabad, which
manufactures Hot Melt Adhesives; which has been integrated with the National
Starch operations in India.
The Uniqema
business was divested to Croda Group of UK in early 2007.
The Advanced
Refinish Paints Business ("2K") was divested in March 2007 to an
affiliate of PPG Industries, USA.
The continuing
portfolio of businesses with the company currently consists of:
·
Paints
·
National Starch
ICI WORLD
The Subject name
is synonymous with product innovation, superb marketing, quality people,
commercial science and operational excellence.
One of the world's
largest producers of speciality products and paints, the key to Subject's
growth has been a deep understanding of consumer needs as well as the ability
to meet these needs with creative ideas and innovative products.
Subject creates,
develops and markets ingredients for food and personal care, specialty polymers,
electronic materials, fragrances and flavours and has some of the world's top
paint and decorative product brands. In fact, Subjects products touch the lives
of almost everyone in the world everyday.
ICI Group has
become a part of the Akzo Nobel Group with effect from 2 January 2008.
SECURITY, SAFETY, HEALTH AND ENVIRONMENT
The Company’s on-site safety performance continued to be
amongst the best with lowest ever injury rates.
Implementation of ‘Responsible Care Management System’ (RCMS)
has helped in achieving an excellent performance in the field of safety, health
and environment across the various operations of the Company. Waste reduction
achieved good sustained performance.
INNOVATION
Innovation gives Subject the competitive edge in the
marketplace. And in India, Subject leverages Science and Technology
capabilities to deliver market led innovation, world-class operational and SHE
excellence and cost effective new investment.
The innovation process linking consumer and customer understanding
to technological know-how and its deployment for creating value for customers
and shareholders continues to make good progress year after year.
The prime focus areas for innovation remained introducing new
products and brands, relentlessly improving operational excellence and
improving cost competitiveness.
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 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.49.29 |
|
UK Pound |
1 |
Rs.80.40 |
|
Euro |
1 |
Rs.63.35 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
|
72 |
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 |
|