MIRA INFORM REPORT

 

 

 

Report Date :

18.09.2008

 

IDENTIFICATION DETAILS

 

Name :

ASHOK ALCO-CHEM LIMITED

 

 

Registered Office :

406, Sharda Chambers, 33, Marine Lines, Mumbai-400020, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

30.06.2007

 

 

Date of Incorporation :

18.11.1992

 

 

Com. Reg. No.:

69615

 

 

CIN No.:

[Company Identification No.]

L24110MH1992PLC069615

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMA07864D

 

 

Legal Form :

A Public Limited Liability Company. Company’s Shares are listed on Stock Exchange.

 

 

Line of Business :

Manufacturer of Industrial Chemicals

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

USD 130000

 

 

Status :

Sick Unit

 

 

Payment Behaviour :

Slow

 

 

Litigation :

Clear

 

 

Comments :

Subject is a Sick Unit and has been referred to BIFR. Company’s profitability is low. It has accumulated losses. Payments are reported as slow and delayed.

 

The company can be considered for any business on safe and secured only.

 

 

INFORMATION PARTED BY

 

Name :

Mr. Nand Kumar

Designation :

Accountant

Date :

17.09.2008

 

 

LOCATIONS

 

Registered Office :

406, Sharda Chambers, 33, Marine Lines, Mumbai-400020, Maharashtra, India

Tel. No.:

91-22-22002236/ 56/ 22009565/ 2006410

Fax No.:

91-22-22009456

E-Mail :

jayconsultancy@hotmail.com

Area :

Owned

 

 

Factory  :

Plot No. A-22/2/1 Mahad Industrial Area, Villlage Kamble, Mahad-402301, Raigag, Maharashtra, India

Area :

Owned

 

DIRECTORS

 

Name :

Mr. Ashok M Kadakia

Designation :

Chairman

 

 

Name :

Mr. Pankaj M Kadakia

Designation :

Vice Chairman

 

 

Name :

Dr. Anil M Kadakia

Designation :

Managing Director

 

 

Name :

Mr. Vipin P Shah

Designation :

Independent Director

 

 

Name :

Dr. Umesh S Kulkarni

Designation :

Independent Director

 

 

Name :

Mr. Subramaniam Ayyar

Designation :

Independent Director

 

 

Name :

Mr. Shyam P Kadakia

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mulla and Mulla and Craige Blunt an Caroe

Designation :

Solicitors

Address :

Mumbai

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 30.06.2007

 

Names of Shareholders

No. of Shares

Percentage of Holding

Directors or relatives

2312743

70.61

Mutual Funds

100

0.01

Non Residents

6330

0.19

Corporate Bodies

46205

1.41

Indian Public

909263

27.76

Others

702

0.02

Total

3275343

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of Industrial Chemicals

 

 

Products :
  • Industrial Alcohal
  • Acetic Acid
  • Ester
  • Alcohol Based Chemicals
  • Chlor Alkali Products
  • Petroleum Prouducts
  • Dyes
  • Chemicals

 

 

Terms :

 

Selling :

Cash

 

 

Purchasing :

Cash

 

GENERAL INFORMATION

 

No. of Employees :

165 (Office 15, Factory 150)

 

 

Bankers :

Dena Bank

 

 

Facilities :

SECURED LOAN

30.03.2007

(Rs. In Millions)

1. Working Capital Borrowings from Dena Bank, Secured by hypothecation of Inventories, Book Debts and Documentary DA Bills and third party cheques drawn in favour of the company and Guaranteed by some Directors

--

2. Deferred Credit Loan from Walchandnagar Industries Limited secured by first charge (second charge till the first charge created by WIL in favour of consortium of Banks is Satisfied) upon all movable and immovable assets at the Distillery unit at Walchandnagar

1.600

3. 15.75% Secured Redeemable Non-Convertible Debentures (Debentures are due for redemption)

--

4. Term Loan From SICOM Limited (Borrowing at Sr. No. 3 and 4 for expansion/down stream projects and are secured by mortgage of immovable properties and plant and machineries, both present and future, at MIDC, Mahad)

86.750

5. ICICI bank

--

Total

88.350

 

 

UNSECURED LOANS

30.06.2007

(Rs. In Millions)

Short Term Loan - Directors

4.027

Total

4.027

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

N P Patwa and Company

Chartered Accountant

Address :

Mumbai

 

 

Associates/Subsidiaries :

Ashok Organic Industries, Ahmedabad

Line of Business : Manufacturer of Industrial Chemicals

 

 

CAPITAL STRUCTURE

 

As on 30.06.2007

 

Authorised Capital :

No. of Shares

Type

Value

Amount

5000000

Equity Shares

Rs. 10/- each

Rs. 50.000 Millions

2000000

11% Cumulative Redeemable Preference Shaeres

Rs. 10/- each

Rs. 20.000 Millions

 

Total

 

Rs. 70.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

3275343

Equity Shares

Rs. 10/- each

Rs. 32.753 Millions

 

Note:

 

Of the above, 800112 Equity Shares of Rs. 10/- each were allotted on 07.10.1993 as Bonus Shares by capitalization of Rs. 8.001 Millions form revaluation reserves in terms of resolutions passed by the members at Annual General Meeting held on 30.09.1993

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

30.06.2007

(15 Months)

31.03.2006

(12 Months)

31.03.2005

(12 Months)

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

32.753

32.753

32.800

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

140.272

98.204

[89.900]

4] (Accumulated Losses)

[145.397]

[173.868]

0.000

NETWORTH

27.628

[42.911]

[57.100]

LOAN FUNDS

 

 

 

1] Secured Loans

88.350

263.164

291.900

2] Unsecured Loans

4.027

0.347

3.200

TOTAL BORROWING

92.377

263.511

295.100

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

120.005

220.600

238.000

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

119.203

138.288

205.000

Capital work-in-progress

4.655

2.302

6.900

 

 

 

 

INVESTMENT

0.014

31.709

0.200

DEFERREX TAX ASSETS

17.924

35.925

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
6.233

24.457

26.000

 

Sundry Debtors
5.030

6.042

3.300

 

Cash & Bank Balances
1.385

2.811

3.300

 

Other Current Assets
0.000

0.000

0.000

 

Loans & Advances
33.437

32.455

59.200

Total Current Assets
46.085

65.765

91.800

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
63.105

48.638

51.400

 

Provisions
4.771

4.751

14.500

Total Current Liabilities
67.876

53.389

65.900

Net Current Assets
[21.791]

12.376

25.900

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

120.005

220.600

238.000

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

30.06.2007

(15 Months)

31.03.2006

(12 Months)

31.03.2005

(12 Months)

Sales Turnover

156.451

261.893

262.000

Other Income

98.168

48.791

3.200

Total Income

254.619

310.684

265.200

 

 

 

 

Profit/(Loss) Before Tax

26.602

15.878

[46.600]

Provision for Taxation

[1.869]

[6.578]

[7.000]

Profit/(Loss) After Tax

28.471

22.456

[39.600]

 

 

 

 

Expenditures :

 

 

 

 

Manufacturing and Establishment Expenses

171.701

250.455

4.800

 

Employees costs

0.000

0.000

10.900

 

Administrative Selling and General Expenses

10.759

19.613

24.900

 

Miscellaneous Expenses

0.000

0.000

7.000

 

Financial Cost

23.120

18.388

26.500

 

Increase/(Decrease) in Finished Goods

10.480

[6.307]

[3.600]

 

Depreciation & Amortization

14.076

12.044

17.300

 

Raw Material

0.000

0.000

153.000

 

Excise Duty

0.000

0.000

34.400

 

Power and Fuel

0.000

0.000

36.600

 

Prior Period Adjustment

[2.119]

0.613

0.000

Total Expenditure

228.017

294.806

311.800

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.09.2007

1st Quarter

31.12.2007

2nd Quarter

31.03.2008

3rd Quarter

30.06.2008

4th Quarter

 Sales Turnover

47.600

68.800

39.600

20.000

 Other Income

2.000

0.400

49.700

0.600

 Total Income

49.600

69.200

89.300

20.600

 Total Expenditure

39.200

66.800

49.600

22.100

 Operating Profit

10.400

2.400

39.700

[1.500]

 Interest

1.800

0.100

1.800

1.700

 Gross Profit

8.600

2.300

37.900

[3.200]

 Depreciation

3.700

2.800

2.800

2.800

 Tax

0.000

0.000

0.000

0.000

 Reported PAT

4.900

[0.500]

35.100

[6.000]

 

KEY RATIOS

 

PARTICULARS

 

30.06.2007

(15 Months)

31.03.2006

(12 Months)

31.03.2005

(12 Months)

Debt-Equity Ratio

0.00

0.00

0.00

Long Term Debt-Equity Ratio

0.00

0.00

0.00

Current Ratio

0.77

0.59

0.47

TURNOVER RATIOS

 

 

 

Fixed Assets

0.52

0.92

0.65

Inventory

9.65

12.51

12.84

Debtors

26.92

67.96

91.93

Interest Cover Ratio

2.15

[0.51]

[0.57]

Operating Profit Margin(%)

34.47

0.85

0.84

Profit Before Interest And Tax Margin(%)

26.85

[2.94]

[5.76]

Cash Profit Margin(%)

12.21

[2.88]

[6.60]

Adjusted Net Profit Margin(%)

4.59

[6.68]

[13.21]

Return On Capital Employed(%)

12.50

[3.12]

0.00

Return On Net Worth(%)

4.85

[111.05]

0.00

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Operation in Retrospect: 

 

The production of Ethyl Acetate remained closed for part of the year, due to the non availability of adequate Power and Raw Material at reasonable price, adverse then prevailing market conditions and non availability of requisite working Capital for operation of the Company. Despite thereof, the Company could produce 4412 MT of Glacial Acetic Acid (i.e. decreased by 46.62% compared to past Year) During the current year, all possible efforts are being made to run the plant at its optimum capacity and generate Higher revenue.

 
 Extension of Financial Year 

 
In order to reflect correct business performance of the Company, the Board of Directors extended the financial Year by Three months to end, on 30th June, 2007, in place of 31st March, 2007, thereby making the financial year of 15 ( Fifteen ) Months. Performance of Financial Year is therefore not comparable in absolute terms. 

 
 Reference u/s. 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 

 
The Company, being SICK Company, continues to be registered with BIFR under reference Case No. 291/2003 of the Board for Industrial and financial reconstruction (BIFR) for rehabilitation. 

 

CONSERVATION OF ENERGY

 
 Measures taken 

 
 The company undertook various energy conservation measures at its manufacturing units which, inter alia, include 

 
 (i) Cooling tower at Mahad shows improved performance by use of non-conventional parts and accessories. 
 
 (ii) Power factor improved. by Installation of capacitors. 
 
 (b) Additional Investments and Proposals 
 
 (i) Painting and insulation of pipelines and equipments periodically. 
 
 (ii) Replacement of out-dated/old parts and accessories on regular basis 
 
 Impact of the measures 
 
The measures have benefited the company in optimizing the energy consumption per unit of production under continuous operation. 

 

MANAGEMENT DISCUSSION AND ANALYSIS 

 
Industry Structure and Development: 

 
The overall growth of the Indian Economy and higher industrial. Growth augur well for the future. The industrial climate is also positive for an enhanced role in the global economy. In this scenario, markets for the Company’s products have improved substantially and this development is expected to continue in the future. 
 
 The improvement at macro-level helped the Company to restart the industrial activity which was otherwise standstill. 

 
 Outlook 

 
Organic chemical Industry in India continues to face competition within it self,from petro-route vis-a-vis the alcohol route. Again the pricing of petro-route had direct relation with the movements in crude prices internationally whereas the pricing of alcohol route had effects of government policies of using alcohol in automobile fuel, molasses controls and so on. 

 
 Segment-wise Performance 

 
The Company has one segment of Organic Chemicals. The period saw the Company out of activity for some part thereof. The Company faced myriads of problems including paucity of Working Capital, which had cumulative effects making it more-difficult for the Company to restart activities in any of its plants. Inspite of this modest attempt was made to start operations at the Company's unit. 

 
 Opportunities, Threats; Risks and concerns 

 
The Organic Chemical Industry in India look forward with optimism on account of tremendous potential of using Alcohol in automobile fuel/ petrol. When implemented fully, this will give tremendous boost to the overall demand in this sector.

 
The uncertainties faced by the Indian economy through movements in crude prices in international market as well as changes in government policies with respect to controls on molasses prices and movements represent threats and risks to be reckoned in the Industry. The Company being a part of the Industry is affected by these threats, risks and uncertainties. 

 
 Financial Performance 

 
Due to Non-availability of Credit facilities, the Company's profitability has suffered and also resulted in lower margin, this has led to low profit but, due to cost reductions efforts, the Company has achieved relatively better results: 

 

Trade References:

 

 

Fixed Asserts:

 

 

Product List


Alcohol Based Chemicals:


Glacial Acetic Acid - Food, Pharmaceutical , Chemical, Plastic, Textile.
Ethyl Acetate - Bulk Drugs, Paints , Aromatic Chemicals.
Ethyl Alcohol - Pharmaceuticals, Chemicals , Cosmetics , Paint
( Absolute , Industrial , Extra Neutral)
Acetic Anhydride - Drugs , Pharmaceuticals, Dyes and Dyes.
Monochloro Acetic Acid - Dyes, Pharmaceuticals, Dyes, CMC, Pesticides.
Sodium Monochloro Acetate - Dyes, Resins , Pesticides.
Carboxy Methyl Cellulose - Textile, Printing, Detergents, Paints ,Paper , Oil Drilling ,
Cosmetics, Food , Pharmaceuticals .
Sodium Acetate - Photography, Textile, Dye Intermediate, Pharmaceuticals.
Glycine - Chemicals, Re search, Pharmaceuticals, Fertilizers
Acetaldehyde( 99% and 20% ) - Pharmaceutical, Perfumery , Food , Ceramic
Paraldehyde(99% ) - - Pharmaceutical , Perfumery , Food , Pesticides

Chlor Alkali Products :


Hydrochloric Acid ( 31-33%) - Making Amino Acids, Cleaning, Water Treatment, Chemical
Poly Aluminium Chloride - Water Treatment.
Salt - Food, Pharmaceuticals, Industrial

Petroleum Products :

Naptha, Kerosene, Jet Al, Gas Oil, Fuel Oil, Bitumen, Lubricating Oil, Sulpher, Paraffin Wax Chlorinated Paraffin Wax, Slack Wax.


Dyes:

Solvent Dyes - Liquid solvent dyes for petroleum colouring.
Food Colours - Food Industry

Other Chemicals :

Guar Gum - Sliding , Printing, Detergent.
Activated Carbon - Beverages , Pharmaceuticals, Solvent

 

They are manufacturing and marketing the above chemicals and can also source for any other chemical as per the requirement from any Indian/Overseas suppliers. Kindly forward the requirements and specifications of the chemicals required by you to give the best prices.

 

 

 

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 records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.46.34

UK Pound

1

Rs.82.96

Euro

1

Rs.65.82

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

3

OPERATING SCALE

1~10

3

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

2

--LIQUIDITY

1~10

3

--LEVERAGE

1~10

3

--RESERVES

1~10

1

--CREDIT LINES

1~10

--

--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

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

25

 

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

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions