MIRA INFORM REPORT

 

 

Report Date :

31.03.2011

 

IDENTIFICATION DETAILS

 

Name :

KANSAI NEROLAC PAINTS LIMITED (w.e.f.11.07.2006)

 

 

Formerly Known As :

GOODLASS NEROLAC PAINTS LIMITED

 

 

Registered Office :

Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400013, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

02.09.1920             

 

 

Com. Reg. No.:

11-825

 

 

CIN No.:

[Company Identification No.]

L24202MH1920PLC000825

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMG00234D

 

 

Legal Form :

A Public Limited Liability Company. Company's Shares are Listed on the Stocks Exchange on the Stock Exchanges.

 

 

Line of Business :

Manufacturing and Marketing of Paints, Varnishes and Enamels, Oils and Synthetic Resins.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A (63)

 

RATING

STATUS

PROPOSED CREDIT LINE

 

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

 

 

Maximum Credit Limit :

USD 30000000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and reputed company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments.

 

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

 

 

NOTES:

 

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – April 1, 2010

 

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

A1

A1

 

 

 

 

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

LOCATIONS

 

Registered Office :

Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400013, Maharashtra, India

Tel. No.:

91-22-2493 4001/ 24992500/ 24992585

Fax No.:

91-22-24919439

E-Mail :

info@nerolac.com

gtgovindarajan@nerolac.com

Website :

http://www.goodlassnerolac.com

http://www.nerolac.com

 

 

Factory  :

·         B 1 , B2, Jainpur Industrial Estate, Kanpur Dehat, Kanpur, Uttar Pradesh, India

·         F/2, MIDC, Lote Parshuram, Taluka Khed, District Ratnagiri, Maharashtra, India

·         Bibi Talav Vatva, Ahmadabad, Gujarat, India

·         142, Tiruporur Road, Perungudi, Chennai, Tamil Nadu, India

·         36, Sector-7, HSIDC IGS, Bawal, District Rewari, Haryana, India

 

 

Sales Depot :

B-19, Meerut Road, Industrial Area, Meerut Road, Ghaziabad-201003, Uttar Pradesh, India

 

 

Branches :

Located at :

 

·         Jammu

·         Jalandhar

·         Ludhiana

·         Bhatinda

·         Patiala

·         New Delhi

·         Mumbai (Goregaon)

·         Parwanoo

·         Chandigarh

·         Ambala

·         Dehradun

·         Ghaziabad

·         Sahibabad

·         Faridabad

·         Bareilly

·         Agra

·         Lucknow

·         Kanpur

·         Patna

·         Siliguri

·         Guwahati

·         Varanasi

·         Jamshedpur

·         Kolkata

·         Vishakhapatnam

·         Vijayawada

·         Trichy

·         Madurai

·         Trivandrum

·         Thiruvalla

·         Cochin

·         Calicut

·         Mangalore

·         Bangalore

·         Hubli

·         Tirupati

·         Panji

·         Gulbarga

·         Kolhapur

·         Hyderabad

·         Pune

·         Bhiwandi

·         Nagpur

·         Cuttack

·         Raipur

·         Jabalpur

·         Varanasi

·         Surat

·         Baroda

·         Narol

·         Ahmedabad

·         Chennai

·         Rajkot

·         Indore

·         Udaipur

·         Gwalior

·         Bhopal

·         Jaipur

·         Jodhpur

 

 

DIRECTORS

 

(AS ON 17.06.2010)

 

Name :

Mr. Jamshed Jiji Irani 

Designation :

Chairman

Address :

221, A-Wing, NCPA Apartment, Nariman Point, Mumbai – 400021, Maharashtra, India

Date of Birth :

02.06.1936

Date of Appointment :

29.10.2002

 

 

Name :

Mr. Devendra Motilal Kothari

Designation :

Vice Chairman

Address :

8-4, Seaface Park CHS Society, Bhulabhai Desai Road, Mumbai – 400026, Maharashtra, India

Date of Birth :

30.03.1930

Date of Appointment :

01.04.1973

 

 

Name :

Mr. Harishchandra M. Bharuka

Designation :

Managing Director

Address :

A-II, Twin Towers Premises CHS Limited, Off V S Marg, Mumbai – 400025, Maharashtra, India

Date of Birth :

22.06.1960

Date of Appointment :

01.04.1999

 

 

Name :

Mr. Susim M. Datta

Designation :

Director

Address :

104, Bakhtavar Lower Colaba Road, Opposite Colaba Road, Colaba, Mumbai – 400005, Maharashtra, India

Date of Birth :

01.07.1936

Date of Appointment :

17.05.2000

 

 

Name :

Mr. Yasuo Tajiri

Designation :

Director

Address :

269-26, Makazooshi – CHUO, Kashiwara – SHI, Japan

Date of Birth :

08.12.1951

Date of Appointment :

26.06.2001

 

 

Name :

Mr. Hiroshi Ishino

Designation :

Director

Address :

3-14-15, MI Nani Meguro-HU, Tokyo, Japan

Date of Birth :

10.04.1951

Date of Appointment :

19.01.2005

 

 

Name :

Mr. Pradip P. Shah

Designation :

Director

Address :

72-A, Embassy Apartment, 7th floor, 46 Nepeansea Road, Mumbai – 400036, Maharashtra, India 

Date of Birth :

07.01.1953

Date of Appointment :

30.01.2007

 

 

Name :

Mr. Noel Naval Tata

Designation :

Director

Address :

Windmere – 55, Cuffe Parade, Mumbai – 400005, Maharashtra, India

Date of Birth :

12.11.1956

Date of Appointment :

27.10.2007

 

 

Name :

Mr. Pravin D. Chaudhari

Designation :

Whole Time Director

Address :

12, Juhu Goldmist, JUPD Scheme, Mumbai – 400049, Maharashtra, India

Date of Birth :

17.05.1968

Date of Appointment :

30.04.2008

 

 

Name :

Mr. Yoshikazu Takahashi

Designation :

Director

Address :

7-Chome 6-1-4, Okamoto Higashinada – KU, Kobe, Hyogo, Japan

Date of Birth :

11.01.1953

Date of Appointment :

26.03.2010

 

 

Name :

Mr. Hitoshi Nishibayashi

Designation :

Director

Address :

7-Chome 6-1-4, Okamoto Higashinada – KU, Kobe, Hyogo 6580072, Japan

Date of Birth :

31.05.1963

Date of Appointment :

30.07.2010

Email :

nisiba@als.kansai.co.jp

 

 

 

 

Management Committee Members :

 

Name :

Mr. H. M. Bharuka

Designation :

Managing Director

 

 

Name :

Mr. Pravin Chaudhari

Designation :

Director

 

 

Name :

Mr. Shrikant Dikhale

Designation :

Vice President-HR

 

 

Name :

Mr. Anuj Jain

Designation :

Vice President - Marketing (Decorative)

 

 

Name :

Mr. Mahesh Mehrotra

Designation :

Vice President - Technical

 

 

Name :

Mr. Hitoshi Nishibayashi

Designation :

Director Supply Chain and Auto Marketing

 

 

Name :

Mr. P. D. Pai

Designation :

Vice President - Finance

 

 

Name :

Mr. Jason Gonsalves

Designation :

Vice President - Corporate Planning and IT

 

 

Name :

Mr. Sudhir Rane

Designation :

Vice President – Automotive Coatings

 

 

KEY EXECUTIVES

 

Name :

Mr. Gomatam Thirumalai Govindarajan

Designation :

Company Secretary

Address :

F-203-Lloyds Estate, VIT College Marg, Wadala (East), Mumbai – 400037, Maharashtra, India

Date of Birth :

16.11.1964

Date of Appointment :

01.10.1993

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

(AS ON 31.12.2010)

 

Category of Shareholder                                               

 

Total No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

--

--

 

 

 

(2) Foreign

 

 

Bodies Corporate

37,329,760

69.27

Sub Total

37,329,760

69.27

 

 

 

Total shareholding of Promoter and Promoter Group (A)

37,329,760

69.27

 

 

 

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

257,355

0.48

Financial Institutions / Banks

1,150

--

Insurance Companies

2,475,596

4.59

Foreign Institutional Investors

3,258,472

6.05

Sub Total

5,992,573

11.12

 

 

 

(2) Non-Institutions

 

 

Bodies Corporate

5,820,495

10.80

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs.0.100 Million

3,892,436

7.22

Individual shareholders holding nominal share capital in excess of Rs.0.100 Million

794,460

1.47

 

 

 

Any Others (Specify)

62,248

0.12

Non Resident Indians

56,898

0.11

Trusts

5,350

0.01

Sub Total

10,569,639

19.61

 

 

 

Total Public shareholding (B)

16,562,212

30.73

 

 

 

Total (A)+(B)

53,891,972

100.00

 

 

 

(C) Shares held by Custodians and against which Depository Receipts have been issued

--

--

 

 

 

Total (A)+(B)+(C)

53,891,972

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Marketing of Paints, Varnishes and Enamels, Oils and Synthetic Resins.

 

 

Products :

Product Description

 

Item Code No.

Paints

320890.03

 

 

Exports :

 

Products :

·         Paints

·         Coating Material.

Countries :

·         Asian

·         Far East countries

 

 

Imports :

 

Products :

·         Raw materials and Packing Materials

·         Stores and Spares

·         Capital Goods and Finished Goods

Countries :

·         Japan

·         Germany 

·         U.S.A.

 

 

Terms :

 

Selling :

L/C terms

 

 

Purchasing :

L/C, D/P or D/A terms

 

 

PRODUCTION STATUS (AS ON 31.03.2010)

 

Particulars

Unit

Installed Capacity

 

Actual Production

 

 

 

 

Paints, Varnishes and Enamels and Powder Coatings

MT

208420

163368

Synthetic Resins

MT

79380

40699

Pretreatment Chemicals

MT

2400*

--

 

NOTE

 

* used for processing goods on behalf of an associate company

 

 (a) Installed capacity has been certified by the Works Manager and accepted by the Auditors without verification, being a technical matter.

 

(b) Production does not include goods processed outside. Sales, opening stock and closing stock include goods processed and purchased from outside. The closing stock is after adjustments for obsolescence and shortages. Closing stock figures, if derived from opening stock plus production / purchases and less sales would therefore be different.

 

 

GENERAL INFORMATION

 

Customers :

·         Bajaj Auto Limited

·         Whirlpool of India Limited

·         Hero Honda

·         Godrej

·         Maruti - 70% of Maruti's paint requirement-accounts for 12% of sales

 

 

No. of Employees :

2000 (Approximately)

 

 

Bankers :

·         Union Bank of India

·         Standard Chartered Bank

·         Bank of Tokyo-Mitsubishi UFJ, Limited

·         HDFC Bank Limited

·         BNP Paribas

 

 

Facilities :

Particulars

31.03.2010

 

31.03.2009

 

(Rs. In Millions)

Secured Loans

 

 

Sales tax deferral, secured by a charge on the fixed assets of the factory at Jainpur [Including Rs.42.208 millions due within one year]

114.348

142.473

Cash credit from banks, secured by hypothecation of stocks and book debts

220.980

18.356

 

 

 

Total

335.328

160.829

 

 

Unsecured Loans

31.03.2010

 

31.12.2009

 

(Rs. In Millions)

 

 

Sales Tax Deferral [Including Rs.18.558 millions due within one year]

764.519

775.433

 

 

 

Total

764.519

775.433

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

B S R and Company

Chartered Accountant 

Address :

Mumbai, Maharashtra, India

 

 

Memberships :

Paint Manufacturers Association of India

 

 

Collaboration :

·         E.I. du Pont de Nemours and Company Inc., USA – for manufacture of sophisticated coatings for automotive sector

·         Kansai Paint Company Limited, Japan-for manufacture of sophisticated architectural coatings

·         Oshima Kogyo Company Limited, Japan – for manufacture of heat resistant paints.

·         DuPont Performance Coatings GmbH and Company, KG, Germany – for know-how relating to the manufacture of anodic Electro-deposition coatings system.

 

 

Holding Company :

·         Kansai Paint Company Limited, Japan

 

 

Subsidiary Company :

·         Kansai Coatings Malaysia SDN. BHD, (Upto 30th June, 2008)

 

 

Fellow Subsidiary Company :

·         PT. Kansai Paint Indonesia

·         Kansai Paint Philippines Incorporation

·         Chongqing Kansai Paint Company, Limited

·         Kansai Resin (Thailand) Company, Limited

·         Kansai Coatings Malaysia SDN. BHD. (w.e.f. 1st July, 2008)

 

 

Associates :

·         Nipa Chemicals Limited

 

 

CAPITAL STRUCTURE

 

(AS ON 17.06.2010)

 

Authorised Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

60000000

Equity Shares

Rs.10/- Each

Rs.600.000  millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

53891972

Equity Shares

Rs.10/- Each

Rs.538.920 millions

 

 

 

 

 

 

(AS ON 31.03.2010)

 

Authorised Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

30000000

Equity Shares

Rs.10/- Each

Rs.300.000  millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

26945986

Equity Shares

Rs.10/- Each

Rs.269.460 millions

 

 

 

 

 

NOTE

 

Of the above:

 

a. 14,81,820      Equity shares of Rs.10 each are allotted as fully paid-up pursuant to contracts / arrangements for consideration other than cash.

 

b. 14,38,320      Equity shares of Rs.10 each fully paid-up are allotted to the shareholders of the erstwhile Polycoat Powders Limited pursuant to the scheme of amalgamation sanctioned by the High Court of judicature at Bombay, for consideration other than cash; and

 

c. 1,56,19,316   Equity shares of Rs.10 each are allotted as fully paid-up by way of Bonus Shares by capitalization of Share Premium, Profits and Reserves].

 

1, 86, 64,880 Equity shares are held by the holding company Kansai Paints Company Limited, Japan

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2010

31.03.2009

31.03.2008

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

269.460

269.460

269.460

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

7458.710

6275.025

5667.441

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

7728.170

6544.485

5936.901

LOAN FUNDS

 

 

 

1] Secured Loans

335.328

160.829

191.811

2] Unsecured Loans

764.519

775.433

787.726

TOTAL BORROWING

1099.847

936.262

979.537

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

8828.017

7480.747

6916.438

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

2893.256

2374.354

2072.044

Capital work-in-progress

96.952

309.436

200.067

Advance for capital expenditure

67.331

46.804

66.288

 

 

 

 

INVESTMENT

4015.372

2944.255

2321.400

DEFERREX TAX ASSETS

115.230

105.957

103.912

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
2474.444
1706.339
1734.111

 

Sundry Debtors
2323.662
2095.729
2129.330

 

Cash & Bank Balances
410.825
761.639
333.754

 

Other Current Assets
0.000
0.000
0.000

 

Loans & Advances
410.930
417.070
481.481

Total Current Assets
5619.861

4980.777

4678.676

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
2940.440

2300.112

 

Other Current Liabilities
102.804
142.237
1688.950

 

Provisions
936.741
838.487
836.999

Total Current Liabilities
3979.985

3280.836

2525.949

Net Current Assets
1639.876
1699.941
2152.727

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

8828.017

7480.747

6916.438

 

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2010

31.03.2009

31.03.2008

 

SALES

 

 

 

 

 

Income

17063.836

13745.192

12223.810

 

 

Other Income

203.821

221.950

240.477

 

 

TOTAL                                     (A)

17267.657

13967.142

12464.287

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Cost of Material / Products

10718.223

8995.828

7783.290

 

 

Employees Remuneration

750.489

733.030

595.690

 

 

Operating and Other Expenditure

2958.254

2441.964

2130.454

 

 

TOTAL                                     (B)

14426.966

12170.822

10509.434

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

2840.691

1796.320

1954.853

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

11.999

18.380

9.615

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

2828.692

1777.940

1945.238

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

442.598

376.050

335.574

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

2386.094

1401.890

1609.664

 

 

 

 

 

Less

TAX                                                                  (H)

731.089

416.000

533.074

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

1655.005

985.890

1076.590

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

2714.388

2205.393

NA

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Proposed Dividend 

404.189

323.352

NA

 

 

Tax on Proposed Dividend

67.131

54.954

NA

 

 

General Reserve

166.000

98.589

NA

 

BALANCE CARRIED TO THE B/S

3732.073

2714.388

NA

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

6.959

41.594

42.730

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

2712.547

1687.112

1830.681

 

 

Stores & Spares

7.573

30.800

12.030

 

 

Capital Goods

7.578

41.725

35.223

 

 

Others

100.326

18.365

43.062

 

TOTAL IMPORTS

2828.024

1778.002

1920.996

 

 

 

 

 

 

Earnings Per Share (Rs.)

61.42

36.59

--

 

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2010

30.09.2010

31.12.2010

Type

1st Quarter

2nd Quarter

3rd Quarter

 Sales Turnover

5254.000

5345.100

5603.800

 Total Expenditure

4446.200

4504.300

4916.300

 PBIDT (Excl OI)

807.800

840.800

687.500

 Other Income

52.100

46.400

43.300

 Operating Profit

859.900

887.200

730.800

 Interest

3.100

2.000

2.400

 Exceptional Items

0.000

0.000

0.000

 PBDT

856.800

885.200

728.400

 Depreciation

112.200

121.400

127.900

 Profit Before Tax

744.600

763.800

600.500

 Tax

225.400

227.700

184.600

 Reported PAT

519.200

536.100

416.900

Extraordinary Items       

0.000

0.000

0.000

Prior Period Expenses

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

Net Profit

519.200

536.100

416.900

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2010

31.03.2009

31.03.2008

PAT / Total Income

(%)

9.58

7.06

8.64

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

13.98

10.20

13.17

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

28.03

19.06

23.84

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

0.31

0.21

0.27

 

 

 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 

0.66

0.64

0.59

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

1.41

1.52

1.85

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

HISTORY

 

Goodlass Nerolac Paints Limited, the Indian subsidiary of Japan based Kansai Paint Company Limited, is the second largest paint company in India with presence in decorative paints as well as industrial paints and marine paints, enamels, varnishes, coatings, resins etc. It is the second largest coating company in India. The company markets its products under the brand names Nerolac, Glossolite, Goody, Allscapes, Excel, in decorative. The Company was established in 1920 as Gahagan Paints and Varnish Company Limited at Lower Parel in Bombay. In 1930, three British companies merged to formulate Lead Industries Group Limited In 1933, Lead Industries Group Limited acquired entire share capital of Gahagan Paints in 1933 and thus, Goodlass Wall (India) Limited was born.  

 
Subsequently, by 1946, Goodlass Wall (India) Limited was known as Goodlass Wall Private Limited. In 1957, Goodlass Wall Private Limited grew popular as Goodlass Nerolac Paints (Private) Limited. Also, it went public in the same year and established itself as Goodlass Nerolac Paints Limited. It came into the fold of Tata Forbes Group in 1976, as its foreign holdings were acquired by Forbes Gokak. It turned into Joint Venture Company in 1986 as the foreign collaborator Japan based Kansai Paints picking 36% of equity capital of the company. With the acquisition of entire stake of Forbes Gokak and its associates by Kansai Paints it became the subsidiary of the latter in 1999. The stake of Kansai Paints in the company now stood at 64.52% of the total equity of the company. The company has five manufacturing facilities at Kanpur, Ratnagiri, Ahmedabad, Perungudi, Rewari spread across India. The Company serves its customers through 66 Sales locations and five strategically located factories. 

 
Technical Assistance Agreements of the company with renowned players in paint industry at international level puts the company in a strong position to offer products which meets stringent international specifications. It started in 1993 when the company tied-up with Kansai Paints of Japan (for manufacture of sophisticated architectural Coatings) and Nihon Tokushu Torya Company Limited also of Japan (for body seal and under seal coatings). and the latest being the technical assistance agreement with DuPont Performance Coatings GmbH and Company KG, Germany for know-how of manufacture of Anodic Electro-deposition Coatings System during the year 2000-01. The company's other Technical Assistance agreements include E.I. Dupont De Nemours and Co. Inc. of USA for automotive coatings; Oshima Kogyo Company Limited, of Japan for heat resistant paints; Valspar Corporation of US for powder coatings; Drew Chemicals Corporation of US for water and fuel treatment chemicals and Ameron Inc. USA for high performance coatings.  

 
The company has strong presence in automotive paints as it controls 45% of the organized Industrial paint segment. Its major clients include OEMs like Maruti Udyog, Bajaj Auto, TELCO and Mahindra and Mahindra. It was a pioneer in introducing electro-deposition (ED) technology for Maruti, capturing a sizeable share of the automotive paint market. The company has two wholly owned subsidiaries namely Saurashtra Paints and GNP (Madras). The above subsidiary companies were amalgamated with the company from April, 2002 with consent approval from both the states High courts. 

 
It has the software package, computerized colour dispensing machine from Fluid Management Holland, Gyroshaker of 10-Litre capacity touch screen monitor, 136 column palette-share display unit and a Kirloskar Champion UPS 1 KVA. The system has an ability to supply over 1305 shades accurately, consistently and instantly in several products covering a variety of application viz doors, windows, walls, exteriors, gates, grills etc. 

 

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

Subject, a subsidiary of Kansai Paint, Japan was established in the year 1920. It is the second largest coating company in India and the market leader in Industrial Coatings. In the 90th year in the paint business, Nerolac is a well known brand with a strong recall proposition.

 

The journey through these 9 decades has been momentous for Subject. From its humble beginnings in 1920, it has grown to be a leader in the Paint Industry thanks to the support and patronage of its shareholders, customers, vendors and employees.

 

Over the last 9 decades, subject has been a front runner in the paint industry bringing in numerous innovations and technologies to the Indian market that have added significant value to its esteemed customers and has also ensured technology leadership within the Industry. Subject has numerous firsts to its credit, like the introduction of Automotive Coatings in India, introduction of bumper coatings for the automotive industry as well as numerous innovations in automotive coatings which have contributed to the aesthetic appeal and technology offering to consumers. In decorative also Nerolac has often taken the lead in bringing new consumer products and concepts to the market over the years.

 

Subject operates through 69 sales locations and 5 factories. Subject's manufacturing operations are spread across lndia at state of the art factories located in Bawal in Haryana, Lote in Maharashtra, Jainpur in UP, Chennai in Tamil Nadu and a new one at Hosur in Tamil Nadu. The proximity of the plants to its customers' plants has offered logistic advantage and enabled high service levels. For the Industrial Coatings, it has a wide range of products in the Automotive, Powder, General Industrial High performance Coatings and Pretreatment Chemicals domain. For the Decorative business, it has been known for its innovative products and services.

 

With a strong commitment to innovation, style and consumers' needs, Subject has I embarked on several initiatives like introduction of lead free (no lead added) paints, opening of Colour - Stylers and Impressions Style Zone outlets.

 

Subject has also invested in IT interventions involving a slew of product implementations across the entire value chain of the organization. These will be enablers for effective and speedier transactions to various stake holders.

 

Over the years, the organization has been credited with numerous awards in the field of Corporate Governance, Environment, Products, Information technology and overall management

 

 

INDUSTRY PROGRESS

 

The year 2009-10 began against the background of the slow down. While initially there was a lot of skepticism on the recovery, with time those doubts evaporated and they saw the Indian economy do really well.

 

The industry is estimated to have grown around 15% with all players recording good growths. The size of the industry is estimated at Rs.21,0000 millions  as on Mar 2010 wherein the organized sector accounts for 65%  while the remaining is with the unorganized sector.

 

Subject  had  taken a series of steps in the  previous  year  much before  the  recession  effect started and that helped subject  to  take  full benefit of the recovery in the Indian economy. It has been able to increase its presence in the decorative sector and consolidate its leadership in the industrial, automotive and powder coatings.

 

Towards the end of the last financial year they have seen a gradual rise in raw material costs. In addition there has been a tightening of liquidity through the gradual withdrawal of the stimulus package.  With this, the outlook for the near term future remains cautiously optimistic.

 

Over  the  long term, industry is expected to do well  with  many  positive factors  like  internal demand, favorable demographics  and  expected  good monsoon which should see the GDP grow at 8%. The just released figures for the twelfth five year plan also envisage good investments and as such the long term story for the Industry appears favorable.

 

 

MARKETING INITIATIVES

 

Subject has been at the forefront in introducing new products and technologies in the paints industry. The organization has been proactively involved  in eliminating  use of hazardous materials in paints and making  the  products Environment  friendly through the Lead Free (no lead added)  Campaigns  and launch of Eco friendly products. Subject has been the pioneers in introducing the lead free (no lead added) campaigns.

 

A number of campaigns were done in the current year. The 'Impressions' television  campaign, aired on all leading channels, with the base line  of 'Apke  Rang,  Apki  Pehchan' aimed at  rediscovering  oneself  through  the process  of painting. Similarly, the Ad campaign for Nerolac  Excel  Total, started  on leading television channels focuses on 'anti peel' property  of the  paint  that ensures that the paint bonds strongly with the  walls  and doesn't peel off, irrespective of weather conditions. Awareness Campaigns through Beauty TVC Advertisement have focused on the economy range of products with aesthetic results. The tag line of the advertisement, 'Beauty kare hairan, jeb par bhi asaan' suggests that the product is economical and value for money. With the Beauty Ad campaign, the Nerolac jingle was also introduced to drive recall.

 

For the consumers of the present times, it is important to make the process of buying paint an involved experience wherein they can touch and feel the products.  These aspects have been catered by the opening of the Nerolac Colour Stylers in a few select zones wherein these are formed on shop-in-shop model, opened by the combined effort of the dealers and subject.

 

Considering the current trend of the customers being engaged while buying paints, Impression Style zone outlets have been launched.  These shops provide end to end solution, beginning from helping the consumers to choose the right kind of paint and finishes to how the products will look in their living space. The company believes that the Impression Style zone is a game changer from the Industry perspective, once again outlining subject's leadership role.

 

In the industrial business, both in the Automotive and Non Automotive Coatings the organization has done well and the prospects are huge.

 

Subject participated in various exhibitions and trade fairs related to the Industrial business both in the Automotive and Non Automotive space of Industrial Coatings. subject  has continued to work with  its customers  in offering  greater  value  addition  through the  launch  of  new  products, technologies and value engineering. Subject has also been awarded approvals at various agencies like Nuclear Power, Thermal Power for its High Performance coatings.

 

Several CED lines awarded this year to Nerolac indicate that subject's position is further strengthened in the industrial sector.

 

 

OPPORTUNITIES AND THREATS

 

Some  of  the  global economies are yet to revive  from  the  slowdown  and uncertainty  still  persists due to inflation, withdrawal of  the  stimulus packages  and raising of interest rates. Subject is cautious and is geared to take the challenge.

 

It continues to identify the gaps in the consumers' needs and the products available. It  aims to  increase the brand  portfolio  so  that  all  the requirements  of the Decorative and  Industrial customers  are catered effectively.  Growth plans have been devised balanced with investments in production capacity enhancements, introduction of new products, services and people development initiatives.

 

Environmental legislations are also a threat wherein subject is prepared to face the challenge through introduction of Eco friendly products.

 

The industry is also witnessing an influx of foreign players in various segments of the market. The company is striding ahead to provide value additions, customer responsiveness and satisfaction for higher performance and retention of market share.

 

Subject, in the backdrop of the emerging favorable market conditions is geared to meet the challenges and sustain the leadership in the industrial sector and gain higher market share in the decorative sector.

 

 

SEGMENT WISE PERFORMANCE

 

The company has only one segment of activity named paints, in  accordance with  the definition of 'Segment' as per the Accounting Standard 17  issued by the Institute of Chartered Accountants of India. The performance of the company is discussed separately in this Report.

 

 

INDUSTRY PROGRESS

 

The year 2009-10 began against the background of the slow down. While initially there was a lot of skepticism on the recovery, with time those doubts evaporated and they saw the Indian economy do really well.

 

The industry  is  estimated  to have grown around  15%  with  all  players recording good growths. The size of the industry is estimated at Rs. 21,000 millions as on Mar 2010 wherein the organized sector accounts for 65% while the remaining is with the unorganized sector.

 

Kansai  Nerolac,  had  taken a series of steps in the  previous  year  much before  the  recession  effect started and that helped subject  to  take  full benefit of the recovery in the Indian economy. It has been able to increase its presence in the decorative sector and consolidate its leadership in the industrial, automotive and powder coatings.

 

Towards the end of the last financial year they have seen a gradual rise in raw material costs. In addition there has been a tightening of liquidity through the gradual withdrawal of the stimulus package.  With this, the outlook for the near term future remains cautiously optimistic.

 

Over  the  long term, industry is expected to do well  with  many  positive factors  like  internal demand, favorable demographics  and  expected  good monsoon which should see the GDP grow at 8%. The just released figures for the twelfth five year plan also envisage good investments and as such the long term story for the Industry appears favorable.

 

 

MARKETING INITIATIVES

 

Subject has been at the forefront in introducing new products and technologies in the paints industry. The organization has been proactively involved  in eliminating  use of hazardous materials in paints and making  the  products Environment  friendly through the Lead Free (no lead added)  Campaigns  and launch of Eco friendly products. Subject has been the pioneers in introducing the lead free (no lead added) campaigns.

 

A number of campaigns were done in the current year. The  'Impressions' television  campaign, aired on all leading channels, with the base line  of 'Apke  Rang,  Apki  Pehchan' aimed at  rediscovering  oneself  through  the process  of painting. Similarly, the Ad campaign for Nerolac  Excel  Total, started  on leading television channels focuses on 'anti peel' property  of the  paint  that ensures that the paint bonds strongly with the  walls  and doesn't  peel off, irrespective of weather conditions. Awareness Campaigns through Beauty TVC Advertisement have focused on the economy range of products with aesthetic results. The tag line of the advertisement, 'Beauty kare hairan, jeb par bhi asaan' suggests that the product is economical and value for money. With the Beauty Ad campaign, the Nerolac jingle was also introduced to drive recall.

 

For the consumers of the present times, it is important to make the process of buying paint an involved experience wherein they can touch and feel the products.  These aspects have been catered by the opening of the Nerolac Colour  Stylers in a few select zones wherein these are formed on  shop-in-shop model, opened by the combined effort of the dealers and subject.

 

Considering the current trend of the customers being engaged while buying paints, Impression Style zone outlets have been launched. These shops provide end to end solution, beginning from helping the consumers to choose the right kind of paint and finishes to how the products will look in their living space. The company believes that the Impression Style zone is a game changer from the Industry perspective, once again outlining subject's leadership role.

 

In the industrial business, both in the Automotive and Non Automotive Coatings the organization has done well and the prospects are huge.

 

Subject  participated  in various exhibitions and trade fairs related  to  the Industrial  business  both in the Automotive and Non Automotive  space  of Industrial  Coatings. Subject has continued to work with its customers in offering greater value addition through the launch of new products, technologies and value engineering. Subject has also been awarded approvals at various agencies like Nuclear Power, Thermal Power for its High Performance coatings.

 

Several CED lines  awarded  this year to Nerolac  indicate  that  subject's position is further strengthened in the industrial sector.

 

 

OPPORTUNITIES AND THREATS

 

Some of  the  global economies are yet to revive  from  the  slowdown  and uncertainty  still  persists due to inflation, withdrawal of  the  stimulus packages  and raising of interest rates. Subject is cautious and is geared to take the challenge.

 

It continues to identify the gaps in the consumers' needs and the products available.  It  aims  to  increase the brand  portfolio  so  that  all  the requirements  of the Decorative and Industrial customers  are  catered effectively.  Growth plans have been devised balanced with investments in production capacity enhancements, introduction of new products, services and people development initiatives.

 

Environmental legislations are also a threat wherein subject is prepared to face the challenge through introduction of Eco friendly products.

 

The industry is also witnessing an influx of foreign players in various segments of the market. The company is striding ahead to provide value additions, customer responsiveness and satisfaction for higher performance and retention of market share.

 

Subject, in the backdrop of the emerging favorable market conditions is geared to meet the challenges and sustain the leadership in the industrial sector and gain higher market share in the decorative sector.

 

 

SEGMENT WISE PERFORMANCE

 

The company has only one segment of activity named paints,  in  accordance with  the definition of 'Segment' as per the Accounting Standard 17  issued by the Institute of Chartered Accountants of India. The performance of the company is discussed separately in this Report.

 

AWARDS AND RECOGNITION

 

Subject takes pride in the recognition it has received in various fields.  The Awards given by the External Agencies are:

 

* Golden Peacock Innovative Product / Service Award.

 

* Lote Plant was awarded with Golden Peacock Environment Management GOLD Award.

 

* Nerolac Excel Total won Product of the Year Award in the paints category.

 

*A 'Silver Certificate of Merit' was awarded to Jainpur Plant by Frost and Sullivan for Asia Manufacturing Excellence Award (AMEA).

 

* Readers Digest Award.

 

 

Some of the Awards by their Customers:

 

* 'Best Delivery Performance Award to Bawal Plant for the  year  2009  by Whirlpool India.

 

* MSIL awarded  'Overall  Vendor Performance  Award'  during  the  Annual Suppliers Meet.

 

* Award of Excellence was presented to subject in recognition of outstanding performance by Krishna Group of Companies (M/s Krishna Maruti / SKH Metals) during their Vendor Performance.

 

Financials:

 

Gross sales for the year aggregated to Rs. 19720 millions reflecting a growth of 18.5% over the previous year. Sales net of excise duty grew by 24%.

 

The Company had undertaken a lot of initiatives during the slow  down  to reduce  procurement  cost and reduce operational costs.  These initiatives helped the Company in the current year to keep the operational costs under control and improve the bottom line.

 

Depreciation is higher due to commissioning of the plant at Hosur and  CED project  at  Bawal. Current year's depreciation is at Rs. 442.600 millions as compared to Rs. 376.100 millions of the previous year.

 

Interest was lower at Rs.12. 000 millions as compared to Rs. 18.400 millions of the previous year due to effective cash management.

 

Profit Before Tax is higher at Rs. 2386.100 millions as compared to Rs.  1401.900 millions of  the  previous  year reflecting a growth  of  70.2%.  This good improvement in the bottom line was mainly due to robust sales  growth  and effective cost management.

 

 

CORPORATE GOVERNANCE

 

As required by the existing Clause 49 VII of the Listing Agreements entered into with the Stock Exchanges, a detailed report on Corporate Governance is given as  a part of the Annual Report. The Company is in  full  compliance with the requirements and disclosures that have to be made in this  regard. The  Auditors'  Certificate  of the compliance  with  Corporate  Governance requirements  by  the  Company  is attached  to  the  Report  on  Corporate Governance.

 

 

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31st DECEMBER 2010

 

(Rs. In millions)

Sr.

No.

Particular

Unaudited

Unaudited

 

 

Quarter ended

31.12.2010

Quarter ended

31.12.2010

1.

Gross Sales / Income 

6514.900

18868.600

 

a. Net Sales / Income from Operations

(Net of Excise and Discounts)

5601.300

16181.900

 

b. Other Operating Income

2.500

21.000

 

Total Income (a+b)

5603.800

16202.900

 

 

 

 

2.

Expenditure

 

 

 

a) (Increase) / Decrease in Stock in Trade and Work In Process

115.900

(313.300)

 

b) Consumption of Raw Materials (Net)

3437.200

10359.900

 

c) Purchase of Traded Goods

164.800

466.200

 

d) Employee Cost

235.500

674.000

 

e) Depreciation

127.900

361.500

 

f) Other Expenditure

962.900

2680.000

 

g) Total Expenditure (a to f)

5044.200

14228.300

 

 

 

 

3.

Profit From Operations before Other Income, Interest and Exceptional Items (1-2)

559.600

1974.600

 

 

 

 

4.

Other Income

43.300

141.800

 

 

 

 

5.

Profit Before Interest and Exceptional Items (3+4)

602.900

2116.400

 

 

 

 

6.

Interest

2.400

7.500

 

 

 

 

7.

Profit After Interest but before Exceptional Items (5-6)

600.500

2108.900

 

 

 

 

8.

Exceptional Items

--

--

 

 

 

 

9.

Profit from Ordinary Activities before Tax (7+8)

600.500

2108.900

 

 

 

 

10.

Tax Expense

 

 

 

a) Current tax

187.200

632.000

 

b) Deferred tax

(2.600)

5.700

 

Total

184.600

637.700

 

 

 

 

11.

Net Profit from Ordinary Activities after Tax (9-10)

415.900

1471.200

 

 

 

 

12.

Extraordinary Item (net of expense)

--

--

 

 

 

 

13.

Net Profit for the period (11-12)

415.900

1471.200

 

 

 

 

14.

Paid-up Equity Share Capital (Face Value of Rs.10/- Each)

538.900

538.900

 

 

 

 

15.

Reserves Excluding Revaluation Reserve

--

--

 

 

 

 

16.

Basic and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised

 

 

 

a) Basic and diluted EPS before extraordinary items

7.72

27.30

 

b) Basic and diluted EPS after extraordinary items

7.72

27.30

 

 

 

 

17.

Public Shareholding

 

 

 

-Number of Shares

16562212

16562212

 

- Percentage of Shareholding

30.73

30.73

 

 

 

 

18.

Promoters and Promoter Group Shareholding

 

 

 

a) Pledged/Encumbered

 

 

 

- Number of Shares

Nil

Nil

 

- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)

 

Nil

Nil

 

- Percentage of Shares (as a % of the Total Share Capital of the Company)

 

Nil

Nil

 

 

 

 

 

b) Non Encumbered

 

 

 

- Number of Shares

37329760

37329760

 

- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)

100

100

 

- Percentage of Shares (as a % of the Total Share Capital of the Company)

69.27

69.27

 

 

NOTES

 

1.       Consequent to the receipt of the approval from the shareholders by postal ballot on 12th June 2010, the Company has approved the issue of Bonus Shares, in the ratio of 1:1, i.e. one additional new share for every share held. Accordingly the number of equity shares shown under 'Public Shareholding' has increased from 8281106 to 16562212 and 'Promoters and promoter group shareholding' has increased from 18664880 to 37329760. Further in accordance with Accounting Standard 20 'Earnings Per Share' (EPS) prescribed by Rule 3 of the Companies (Accounting Standards) Rules, 2006 the EPS for the comparative periods has been recomputed taking into account the bonus issue.

2.       On 14th January, 2011, the Company has divested its entire stake in its associate company, Nipa Chemicals Limited, for a consideration of Rs. 257.250 millions. The effect of this transaction is not incorporated in this result.

3.       As the Company's business activity falls within a single segment viz. 'Paints' and the sales substantially being in the domestic market, the disclosure requirements of Accounting Standard-17 "Segment Reporting", notified under the Companies Act, 1956, are not applicable.

4.       There were no investor complaints pending at the beginning and at the end of the quarter. Three complaints were received during the quarter and were duly attended.

5.       Figures of the previous period / year have been regrouped wherever necessary.

6.       The above results have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on 27th January, 2011. These results have been subjected to a "limited review" by the statutory auditors of the Company.

 

FIXED ASSETS

 

·         Land

·         Buildings   

·         Building Plant and Machinery

·         Plant and Machinery

·         Laboratory Equipment

·         Furniture Fittings and Equipment

·         Furniture Fittings

·         Electrical Installation

·         Electrical Installation

·         Motor Cars and Vehicles

 

 

AS PER WEBSITE DETAILS

 

PROFILE

 

Subject is a headquartered in Mumbai was established in 1920. Over the years, the Company has enjoyed market leadership in Industrial Coatings with a clear dominance in the Automobile segment and a good standing in Architectural coatings business. On overall basis it enjoys number two position. GNP is known for its innovative products, superior coating technology with a clear emphasis on high quality of service. GNP has five manufacturing facilities spread across India. The Company services customers through 66 marketing offices in India.

 

Established on 2nd of September 1920, subject has been a forerunner in Industrial and Automotive coating business. GNP has a good reputation and its brands are well known in the Architectural coatings business as well. On an overall basis, GNP enjoys number two position in the market and is renowned for its technologically superior and innovative products, processes, value engineering and service to its customers. 

 
The Company serves its customers through 66 Sales locations and five strategically located factories. It operates on SAP R-3 platform and uses advanced tools like Advanced Planning Optimizer (APO) for demand planning and Supplies, Data Intelligence Warehousing (DIW) for informed decision making, Employee Portal to harness Knowledge Management (KM) and Balanced Score Card (BSC) of performance. 

 

In 1976, Goodlass Nerolac Paints Limited became a part of the Tata Forbes Group on acquisition of a part of the foreign shareholdings by Forbes Gokak.


In 1983, Goodlass Nerolac Paints Limited strengthened itself by entering in technical collaboration agreements with Kansai Paint Company Limited, Japan and Nihon Tokushu Toryo Company Limited, Japan. 


In 1986, Goodlass Nerolac Paints Limited turned into a joint venture of the Tata Forbes and the Kansai Paint Company Limited, with the latter acquiring 36% of its share capital.


In 1999, Kansai Paint Company Limited, Japan took over the entire stake of Tata Forbes group and thus GNP became a wholly owned subsidiary of Kansai Paint Company Limited 


In 2006, on the 11th of July, Goodlass Nerolac Paints Limited name has been changed to Kansai Nerolac Paints Limited during the journey of continuous performance excellence, they have entered in to many technical collaborations with other industry leaders such as E.I. Du-Pont de Nemours and Company Inc., USA and Oshima Kogya Company Limited, Japan for their different products.

 

Their incessant journey of successes will go on backed by their present human asset of over 2000 professionals and a sales turnover of Rs.14840 millions They are esteemed to be a subsidiary of Kansai Paint Company Limited, which is the largest paint manufacturing company in Japan and among the top ten coating companies of the world.


They are the second largest coating company in India with a market share of over 20%.


They are the market leader in industrial / automotive segment supplying over 90% of the OEM requirements.


They are the leader in powder coatings.

 

PRESS RELEASE

 

KANSAI NEROLAC APPOINTS SHAHRUKH KHAN AS NEW BRAND AMBASSADOR

 

SUPERSTAR TO ENDORSE COMPANY’S NEW CAMPAIGN ON ECO-FRIENDLY PRODUCTS

‘KUCH CHANGE KAREIN, CHALO PAINT KAREIN’

 

Mumbai, September 6th, 2010: Kansai Nerolac Paints Limited, India’s leading paint manufacturer, today announced Shahrukh Khan as their new brand ambassador. Kansai Nerolac has successfully used celebrity icons in the past, and this announcement comes just ahead of the festive season that will see the superstar highlight the company’s several eco-friendly decorative paint solutions.

 

The company has recently launched ‘Healthy Home Range of Paints’ that are safer, lead free, odour free, low VOC (Volatile Organic Compound) and eco friendly. With an increased focus on health and wellness related to paints, Kansai Nerolac has undertaken an initiative to change the perception of paints from just ‘beauty’ to ‘health and safety’. Kansai Nerolac’s new campaign ‘Kuch Change Karein, Chalo Paint Karein’ will focus on communicating this change to consumers by using Shahrukh Khan in the upcoming television, print and outdoor commercials.

 

The Superstar will endorse Nerolac’s eco-friendly products with children in the new advertising campaign designed by Publicis Ambience and directed by Uzer Khan. The company has effectively used film personalities in the past to endorse and represent its brands. Some of the previous super stars include mega star Amitabh Bachchan, and Mohanlal.

 

Announcing this landmark development, Mr. H. M. Bharuka, Managing Director - Kansai Nerolac Paints Limited, said, “We have significantly improved our product offering with a new range of eco-friendly products that have been produced using advanced technology, conforming to highest norms of health and environment safety. At this point we felt the need of an ambassador who reflects this and who could help us effectively communicate this to our consumers. Shahrukh Khan was a perfect choice for us and we are extremely happy to have him.”

 

Some of the new advanced products launched by the company include Nerolac Impressions Eco-clean and Nerolac Excel Total with heat guard and now the entire range of Nerolac’s water based products is Low VOC. Shahrukh Khan will endorse a wide range of eco-friendly products amongst the other initiatives undertaken by the company.

 

Commenting on the marketing initiatives planned, Mr. Anuj Jain, Vice President – Marketing and Sales (Decorative), Kansai Nerolac Paints Limited Said, “Shahrukh Khan enjoys a mass appeal and is amongst the most popular personalities in the country. We have launched paints that will not only enhance the consumer’s life but will also benefit the painters and industry at large. For this purpose, we have planned a nationwide television campaign as well as outdoor and print in select markets across India. He will also front a series of strategic marketing initiatives of the company.”

 

About Kansai Nerolac Paints Limited:

 

Kansai Nerolac Paints has been at the forefront of paint manufacturing for more than 90 years pioneering a wide spectrum of quality paints. Kansai Nerolac is the second largest paint company in India and is the leader in Industrial segment, having a turnover of Rs19000.000 Millions. The company has five strategically located manufacturing units all over India and a strong dealer network across the country. The company manufactures a diversified range of products ranging from architectural coatings for homes, offices, hospitals and hotels to sophisticated industrial coatings for most of the industries.

 

 

 

 

 

 

 

 

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.44.77

UK Pound

1

Rs.71.69

Euro

1

Rs.63.02

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

7

--PROFITABILIRY

1~10

7

--LIQUIDITY

1~10

7

--LEVERAGE

1~10

7

--RESERVES

1~10

7

--CREDIT LINES

1~10

7

--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

 

63

 

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

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

--

NB

New Business

--

 

 

 

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.