MIRA
INFORM REPORT
|
Report Date : |
05.11.2011 |
IDENTIFICATION DETAILS
|
Name : |
LINC PEN AND PLASTICS LIMITED |
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Registered
Office : |
Satyam Towers, 1st Floor, 3, Alipore Road, Kolkata-700027,
West Bengal |
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Country : |
India |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
24.10.1994 |
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Com. Reg. No.: |
21-065583 |
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Capital Investment
/ Paid-up Capital : |
Rs. 127.860 Millions |
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CIN No.: [Company Identification
No.] |
L36991WB1994PLC065583 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
CALL00761F |
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Legal Form : |
Public Limited Liability Company. The Company Shares are Listed to the
Stock Exchange. |
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Line of Business
: |
Company is engaged in the manufacturing, marketing and
exporting of writing instruments and stationery products. |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (46) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 1800000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having satisfactory track. Trade relations
are reported as fair. Business is active. Payments are reported to be usually
correct 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 – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
Satyam Towers, 1st Floor, 3 Alipore Road, Kolkata-700027,
West Bengal, India |
|
Tel. No.: |
91-33-30412100 / 24790248 |
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Fax No.: |
91-33-24790253 |
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E-Mail : |
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Website : |
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Factory 1 : |
Linc Estate,
Usthi Road, Serakole, 24 Paragans (South)-743513, West Bengal, India |
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Tel. No.: |
91-33-24204275 / 76 |
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Fax No.: |
91-33-24204441 |
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E-Mail : |
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Factory 2 : |
Falta SEZ,
Sector II, Shed No.2, Falta, 24 Paragans (South)-743504, West Bengal, India |
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Tel. No.: |
91-3174-222925 |
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Branch Office : |
403/404, Tanishka Building, Off Western Express Highway, Near Big
Bazaar, Kandivali (East), Mumbai-400 101, Maharashtra, India |
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Tel. No.: |
91-22-66924155 / 4255 |
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Fax No.: |
91-22-66942963 |
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E-Mail : |
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Branch Office : |
Also Located At: ·
Goa ·
Mumbai ·
Delhi ·
Ranchi ·
Noida ·
Sarigam |
DIRECTORS
AS ON 31.03.2011
|
Name : |
Mr. Kedar Nath Ranasaria |
|
Designation : |
Independent, Non-executive Director |
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|
Name : |
Mr. Naresh Pachisia |
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Designation : |
Independent, Non-executive Director |
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Name : |
Mr. Prahlad Rai Agarwala |
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Designation : |
Independent, Non-executive Director |
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Name : |
Dr. Ranjan Das |
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Designation : |
Independent, Non-executive Director |
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Name : |
Mr. Sohan Lal Kochar |
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Designation : |
Independent, Non-executive Director |
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Name : |
Mr. Prakash Jalan |
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Designation : |
Non-executive Director |
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Name : |
Mr. Aloke Jalan |
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Designation : |
Whole Time Director |
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Name : |
Mr. Deepak Jalan |
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Designation : |
Managing Director |
KEY EXECUTIVES
|
Name : |
Mr. N. K. Dujari |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.06.2011
|
Category of
Shareholder |
Total No. of
Shares |
Total
Shareholding as a % of total No. of Shares |
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|
(A) Shareholding
of Promoter and Promoter Group |
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Individuals / Hindu Undivided Family |
7,311,439 |
57.18 |
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Bodies Corporate |
1,555,631 |
12.17 |
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Sub Total |
8,867,070 |
69.35 |
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Total
shareholding of Promoter and Promoter Group (A) |
8,867,070 |
69.35 |
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(1) Institutions |
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Bodies Corporate |
1,497,776 |
11.71 |
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Individuals |
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Individual shareholders holding nominal
share capital up to Rs. 0.100 million |
1,540,419 |
12.05 |
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|
804,547 |
6.29 |
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Any Others
(Specify) |
76,148 |
0.6 |
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|
75,592 |
0.59 |
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Clearing Members |
556 |
- |
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Sub Total |
3,918,890 |
30.65 |
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Total Public
shareholding (B) |
3,918,890 |
30.65 |
|
|
|
12,785,960 |
100 |
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(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
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|
- |
- |
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(2) Public |
- |
- |
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Sub Total |
- |
- |
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Total
(A)+(B)+(C) |
12,785,960 |
- |
BUSINESS DETAILS
|
Line of Business : |
Company is engaged in the manufacturing, marketing and exporting
of writing instruments and stationery products. |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Actual
Production |
|
Pens and Plastics components |
Pcs. |
2777.668 |
|
Refills |
Pcs. |
3940.309 |
* The company's
products are non standardized and are of various shapes and sizes, hence there
is no proper measure to assess and indicate the same.
Note:
I.
No specific license is required for the manufacture
of products mentioned above.
II.
Production includes products manufactured on job
basis.
GENERAL INFORMATION
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Bankers : |
·
State Bank of India ·
IDBI Bank Limited ·
HDFC Bank Limited |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
G P Agarwal and Company Chartered Accountant |
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Associates : |
·
Linc Retail Limited |
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|
Proprietorship
Concerns owned by Smt. Bindu Jalan wife of Director |
·
Linc Marketing Services (Goa) ·
Linc Engineering ·
S.M. Homes |
CAPITAL STRUCTURE
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
13000000 |
Equity Shares |
Rs.10/- each |
Rs. 130.000 Millions |
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|
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
12758960 |
Equity Shares |
Rs.10/- each |
Rs. 127.860
Millions |
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Notes:
(Of the above
4,785,660 Equity Shares have been issued to the members of erstwhile Shree Writing
Aid Private Limited pursuant to the Scheme of Amalgamation as fully paid up
without payment received in cash)
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
127.860 |
127.860 |
127.860 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
345.825 |
288.665 |
231.640 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
473.685 |
416.525 |
359.500 |
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LOAN FUNDS |
|
|
|
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1] Secured Loans |
413.547 |
206.481 |
272.161 |
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2] Unsecured Loans |
21.950 |
21.921 |
25.741 |
|
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TOTAL BORROWING |
435.497 |
228.402 |
297.902 |
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DEFERRED TAX LIABILITIES |
18.551 |
16.449 |
15.849 |
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|
|
|
|
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TOTAL |
927.733 |
661.376 |
673.251 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
260.645 |
175.490 |
159.524 |
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Capital work-in-progress |
21.627 |
20.096 |
19.465 |
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INVESTMENT |
0.000 |
0.000 |
0.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
666.847
|
475.417 |
586.904 |
|
|
Sundry Debtors |
219.581
|
199.163 |
191.202 |
|
|
Cash & Bank Balances |
3.268
|
4.312 |
5.752 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
64.098
|
65.642 |
50.749 |
|
Total
Current Assets |
953.794
|
744.534 |
834.607 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
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|
Sundry Creditors |
258.742
|
225.602 |
308.330 |
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Other Current Liabilities |
16.690
|
8.514 |
3.447 |
|
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Provisions |
32.901
|
44.628 |
28.568 |
|
Total
Current Liabilities |
308.333
|
278.744 |
340.345 |
|
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Net Current Assets |
645.461
|
465.790 |
494.262 |
|
|
|
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|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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|
|
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|
|
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|
TOTAL |
927.733 |
661.376 |
673.251 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
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|
SALES |
|
|
|
|
|
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|
Net Sales |
2484.461 |
2220.586 |
1875.804 |
|
|
|
Other Operating Income |
51.948 |
33.881 |
31.746 |
|
|
|
Other Income |
4.019 |
2.051 |
16.298 |
|
|
|
TOTAL (A) |
2540.428 |
2256.518 |
1923.848 |
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|
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Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Material and Components Consumed |
713.917 |
877.330 |
819.972 |
|
|
|
Purchases of Trading Goods |
1140.596 |
543.497 |
460.386 |
|
|
|
Manufacturing, Administrative, Selling and General Expenses |
644.565 |
614.016 |
605.773 |
|
|
|
Increase / (Decrease) in Stocks |
(122.336) |
58.477 |
(90.223) |
|
|
|
TOTAL (B) |
2376.742 |
2093.320 |
1795.908 |
|
|
|
|
|
|
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|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
163.686 |
163.198 |
127.940 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
19.342 |
16.975 |
28.591 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
144.344 |
146.223 |
99.349 |
|
|
|
|
|
|
|
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|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
36.195 |
30.737 |
30.929 |
|
|
|
|
|
|
|
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|
PROFIT BEFORE
TAX (E-F) (G) |
108.149 |
115.486 |
68.420 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
24.152 |
31.535 |
18.038 |
|
|
|
|
|
|
|
|
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|
PROFIT AFTER TAX
(G-H) (I) |
83.997 |
83.951 |
50.382 |
|
|
|
|
|
|
|
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|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
19.580 |
12.555 |
19.611 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
50.000 |
50.000 |
35.000 |
|
|
|
Proposed Dividend |
23.015 |
23.015 |
19.179 |
|
|
|
Tax on Proposed Dividend |
3.822 |
3.911 |
3.259 |
|
|
BALANCE CARRIED
TO THE B/S |
26.740 |
19.580 |
12.555 |
|
|
|
|
|
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EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
547.950 |
517.602 |
389.083 |
|
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TOTAL EARNINGS |
547.950 |
517.602 |
389.083 |
|
|
|
|
|
|
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IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
155.492 |
107.287 |
85.704 |
|
|
|
Trading Goods |
261.515 |
135.613 |
212.026 |
|
|
|
Capital Goods |
52.519 |
16.998 |
8.289 |
|
|
|
Spares |
0.302 |
0.356 |
0.259 |
|
|
TOTAL IMPORTS |
469.828 |
260.254 |
306.278 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
6.57 |
6.57 |
3.94 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
|
|
1st
Quarter |
|
Net Sales |
602.020 |
|
Total Expenditure |
581.950 |
|
PBIDT (Excl OI) |
20.070 |
|
Other Income |
0.240 |
|
Operating Profit |
20.310 |
|
Interest |
8.450 |
|
PBDT |
11.860 |
|
Depreciation |
10.380 |
|
Profit Before Tax |
1.480 |
|
Tax |
(0.260) |
|
Provisions and contingencies |
0.000 |
|
Profit After Tax |
1.740 |
|
Extraordinary Items |
0.000 |
|
Prior Period Expenses |
0.000 |
|
Other Adjustments |
0.000 |
|
Net Profit |
1.740 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
3.31
|
3.72 |
2.61 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
4.35
|
5.20 |
3.65 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
8.90
|
12.55 |
6.88 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.23
|
0.28 |
0.19 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.61
|
1.26 |
1.82 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.09
|
2.67 |
2.45 |
LOCAL AGENCY FURTHER INFORMATION
FINANCIAL
PERFORMANCE
PERFORMANCE:
During the year,
the Company’s Sales (including Other Operational Income) increased by 12.5% to
Rs.2536.409 millions as compared to Rs. 2254.468 millions during the preceding
year. The Company spend Rs.136.827 millions (5.5% of Sales) on Advertisement
and Promotion in 2010-11 as compared Rs.970.23Lacs (4.3% of Sales) in 2010-11.
The Profit after Tax during the year was Rs.83.997 millions which is almost
same as previous year.
FINANCE COST:
The Interest cost
was up by 13.9% at Rs.19.342 millions in 2010- 11 from Rs.16.975 millions in
2009-10. The Interest / Turnover was 0.8% and Interest Cover is 8.5 in 2010-11,
which were 0.8% and 9.6 respectively in 2009-10.
The CRISIL
retained its “P1” rating as regards to Rs.100 Million Commercial Paper
Programme of their Company. As per them, this rating indicates that the degree
of safety with regard to timely payment of interest and principal on the
instrument is very strong.
MANAGEMENT DISCUSSION
AND ANALYSIS
INDUSTRY OVERVIEW
The global writing
instrument market is estimated at USD 38 bn, of which the pen market accounts
for a major portion of USD 30 bn. Though the Indian writing instrument market
is comparatively small, in terms of quality the country ranks among the best in
the world. However, India’s annual exports are a low Rs. 2 bn, while China
exports Rs. 50 bn worth of pens every year.
Annual global pen
demand is estimated at 1,600 – 2,400 mn units. The Indian market comprises around
15 large, 100 mid- and 900 small-scale manufacturing units, which have a
combined daily production capacity of over 10 mn pieces. India’s writing
instrument industry is largely unorganized with small regional players. The
organized industry is estimated at over Rs. 20000.000 millions while Linc’s
market share stands at 10%.
INDIAN STATIONERY
MARKET
Stationery
encompasses a wide material range comprising paper and office supplies, writing
instruments, greeting
cards, glue and pencil
cases, among others. There are over 50 brands in India’s organized and
unorganized sectors. With economic liberalization, many premium international
brands entered India either independently or in
collaboration with
Indian manufacturers and distributors. These include Reynolds, Parker, Cross,
Mont Blanc, Cartier, Pierre Cardin and other designer pens from Episode, Frazer
and Haws, Christian Dior and Waterman.
Over the years,
the market share flowed from the unbranded to the branded sector. The market is
segmented according to the following target audience:
• Students (many
of whom depend only on pencils and ball point pens)
• Frequent users
(in offices across commercial and public establishments)
• Occasional users
(housewives and literate manual workers)
While India’s
literacy rate is a high 74%, all literates occasionally use ball or fountain
pens. While pen demand among the employed is relatively stagnant, demand among
students is experiencing a healthy growth as this segment is more brand-conscious.
|
Category |
% user share |
|
Students |
55-60 |
|
Commercial |
20-25 |
|
Multi-level |
15-20 |
The writing
instrument market is dominated by ball point pens accounting for 70% of India’s
total pen demand, followed by gel pens at 20% and fountain pens at 4%. Fountain
pen domination (once the only writing instrument preferred by the rich and
poor) has now almost disappeared and is confined to only luxury brands. An even
more remarkable transition is evident in the present generation, using
different inks, colours and tips. Nearly 85% of users use blue, black and red
ink.
One of the major
components of the writing instrument industry is the pricing of pens and
stationery products
• About 80% of
India’s pen industry revenue comes from pens with a price range of up to Rs. 15
• A small
percentage of pens are priced in the range of Rs. 100-300
• The
super-premium segment where prices extend beyond Rs. 100,000 or more
contributes a small portion
• While the market
for lower price range pens (up to Rs. 15) is growing at 7-8% annually, the
mid-range pen market is growing faster at 8-10%
INDIAN STATIONERY
MARKET
|
|
Mass |
High-value |
Premium |
|
Price range |
Below Rs. 20 |
Rs. 20-400 |
Above Rs. 400 |
|
Market players |
Cello, Linc and Reynolds, among others |
Uni-ball, Pilot and Parker, among others |
Parker, Mt.
Blanc, Cross, Lamy and Sheaffer, among others |
Pen no longer a writing instrument
According to a AC Nielsen
survey, sunglasses (41%) are the most sought-after accessory in India, followed
by belts (35%) and stationery (20%).
GROWTH ENABLERS
Growing literacy: The key enabler for the writing instrument
and stationery market is increasing literacy rates.
Increasing income: India’s per
capita income grew 17.9% to Rs. 0.055 million in 2010-11 from Rs. 0.046 million
in 2009-10, leading to higher literacy and growing stationery demand.
OUTLOOK
Despite a
burgeoning popularity of electronic gadgets (particularly computers),
stationery product demand is not facing a threat, owing to growing demand
emanating from students.
The global
stationery product market is expected to touch USD 155.4 bn by 2015, driven by technological
advancement, increasing literacy rates and rising population. The Indian
stationery industry is poised to grow 20% annually over the next three years.
With the Indian government laying an emphasis on education, more schools are
being built, driving stationery product demand. With India being an outsourcing
hub for numerous multinationals, the office stationery market is growing
rapidly.
LITERACY IN INDIA
India’s effective
literacy rate recorded a 9.2% rise from 64.83% to 74.04% (provisional data of
2011 census). Interestingly, literacy improved sharply among females when
compared with males. While the effective male literacy rate rose from 75.26% to
82.14%, it increased from 53.67% to 65.46% for females.
GOVERNMENT
INITIATIVES
Sarva Shiksha Abhiyan (SSA): SSA is a
comprehensive plan to provide free education to children between the 6-14 year
age group. It was launched in 2001 with an initial outlay of Rs. 70000.000
millions.
SSA objectives
• To ensure that
all secondary schools are equipped with physical infrastructure, staff and
supplies according to prescribed standards, through financial support in case
of government/local body/government aided schools and through appropriate
regulatory mechanisms for others
• To improve
access to secondary schooling for all youngsters according to norms (secondary
schools within 5 km
and higher
secondary school within 7-10 km), providing safe transport
arrangements/residential facilities
• To ensure that
no child is deprived of secondary education due to gender, socio-economic
status, disability and
other barriers
Rashtriya Madhyamik Shiksha Abhiyan (RMSA): RMSA is a
Government of India initiative to achieve the universalisation of secondary
education (USE) and was implemented during the Eleventh Plan at a total outlay
of
Rs. 201200.000
millions, aimed at expanding and improving secondary education standards
(classes VIII to X). RMSA also expects to spread secondary education to every
corner of the country by ensuring the establishment of a secondary school (up
to class X) within a radius of 5 km in every neighborhood.
LITERACY GROWTH
(%)
|
Census Year |
Population |
Male |
Female |
|
1951 |
18.33 |
27.16 |
8.86 |
|
1961 |
28.30 |
40.40 |
15.35 |
|
1971 |
34.45 |
45.96 |
21.97 |
|
1981 |
43.57 |
56.38 |
29.76 |
|
1991 |
52.21 |
64.13 |
39.29 |
|
2001 |
64.84 |
75.26 |
53.67 |
|
2011 |
74.04 |
82.14 |
65.46 |
BUDGET, 2011-12
• Over Rs. 520 bn
was allocated for education (24% increase over 2010-11)
• Increased allocation
for school education to Rs. 389.57 bn in 2011-12 from Rs. 310.36 bn in 2010-11
• Increased SSA
allocation from Rs. 150 bn to Rs. 210 bn
• Implementation
of revised centrally sponsored ‘vocationalization of secondary education’ from
2011-12 to improve youth employability
• Allocation of
Rs. 103.80 bn for school mid-day meals
• Allocation of
Rs. 52.54 bn for the University Grants Commission, Rs. 56.60 bn for technical
education and Rs. 9.43 bn for National Mission in Education
• Introduction of
scholarships for underprivileged students belonging to scheduled castes and
tribes, studying in
standard IX and X
RAW MATERIAL MANAGEMENT
In a business
where Raw Material prices are volatile, it is Imperative that the best input
Quality be consistently Maintained, procured, stored and used.
Subject is a
quality-driven manufacturer. The Company uses plastic granules, ball and gel
pen tips, ink, springs and stamping foil as raw material. The Company imports
quality ink and tips. The Company is also focused on quality packaging
material.
PLASTIC GRANULES
Plastic granules
are used for making pen shells. Subject uses five varieties of plastic
granules:
Polypropylene (PP): The major
polyolefin used in Subject is polypropylene, a hard, tough and mouldable
polymer. This material is used mostly in the barrels of use-and-throw models. A
random copolymer PP is also used in the barrel of Ocean Gel Pen on account of
its transparency.
High Density Polyethylene (HDPE): HDPE is used in
caps, plugs and adopters of ball pens where flexibility and strength are
needed.
Polystyrene (PS): Polystyrene is a versatile plastic that is
rigid or foamed. General-purpose polystyrene is clear, hard and brittle with a
relatively low melting point suitable for injection moulding applications. This
material is used for making transparent barrels of ball pens.
Styrene Acrylonitrile Copolymer (SAN): This material is
used for making transparent barrels of expensive pens on account of its
strength and clarity.
Polyacetal: This novel material is used on account of
its toughness and compressive strength in the pen mechanism.
Acrylonitrile Butadiene Styrene (ABS): This terpolymer is
used on account of its toughness and lower density among engineering plastics.
Subject uses this material for making clips, plugs and knobs, an excellent
choice on account of its electroplating applications.
Thermoplastic
elastomer: This material combines the properties of elastomers and
thermoplastics. Elastomers are rubbers that can stretch easily; thermoplastics
can be moulded with heat and used in the grips of many models to enhance
writing comfort.
Polycarbonate: This is the toughest of all transparent
plastic materials, used in transparent caps, where the locking mechanism is durable
despite repeated cap opening and closing.
Masterbatches: These granular colour concentrates are
mixed with a high flow polymer vehicle, normally LDPE or EVA, useful in making
coloured plastic parts.
TIPS
The Company's
import dependence for this product declined as India emerged as a quality tips
manufacturer. Indian tips proved popular
abroad and whenever exports rose, the paucity in the Indian market tended to
strengthen prices.
Brass tips: These
tips are cheap, easy to produce and suitable for ordinary writing quality among
economically priced pens. Normally, the tip is made of brass with a 0.8 and 1mm
stainless steel ball.
Brass nickel plated: These tips have
been produced for more than two decades, with a brass wire and coated with
nickel for a better look. These tips are widely accepted as they provide
writing consistency. These tips are used in normal ball pens (including
retractable pens) with a 0.7 to 1.20 mm ball diameter.
Nickel silver: For better writing quality, a new wire NS
was developed in the last decade, more expensive than brass wire. This tip
lasts longer and the writing quality is better. Normally, these types are made
with 0.5 and 0.6 mm balls for fine writing but 0.7 to 1.0 mm balls are also
used. The NS wire and TC balls are of a high quality and imported from
Switzerland, Germany and the US.
Stainless steel tips: These tips, made
of stainless steel wire with TC ball, are the most expensive of all tips.
Gel tips: Gel tips are used with gel ink, which is
basically water-based and developed in the mid Eighties. Gel pens were accepted
across the world and replaced fountain pens. These tips were developed with
SS/NS wire and a special TC ball and ceramic, which makes them look like a ball
pen and yet write like high quality fountain pens. These are made with 0.28 mm
to 1 mm special balls.
INK
The choice of the
ink supplier is critical to pen quality. Different ink varieties are imported
to feed a wide product array. Subject uses the following ink types in ball pens
and gel pens:
High viscosity ink: This thick ink is
most common, the kind found in most stick pens.
Liquid ink: This is held in a reservoir within the
pen's barrel. It normally occupies most of the length and width of the barrel,
giving greater ink capacity and longer write-out length. This type of ink flows
smoothly, providing a constant colour density.
Oil-based ink: This innovative ink is low in viscosity,
provides friction-free and vivid ink delivery. It is water-resistant, quick
drying and smear-proof.
Gel ink: This is thinner than oil-based ink with a
smooth flow and dense colour. It allows brighter and more vivid colours to be
produced.
MARKETING AND DISTRIBUTION
EXPORTS
• Exports grew 6.4%
from Rs. 521.800 millions in 2009-10 to Rs. 555.000 millions in 2010-11 despite
several adversities:
Political
instability across the Middle Eastern countries affected the off take
Sudden imposition
of excise duty on writing instruments from March 2011 impacted exports in the
last month of the financial year, owing to time-consuming documentation
Expanded presence
in 10 new countries.
• Export revenue
split between Linc brand and OEM changed from 67:33 in 2009-10 to 91:9 in
2010-11.
DOMESTIC MARKET
• Increased sales
from Rs. 2220.600 millions in 2009-10 to Rs. 2484.500 millions in 2010-11;
India remained the largest market for Linc products
• Enhanced
domestic sales proportion to overall sales from 76.5% in 2009-10 to 77.7 % in
2010-11
• Introduced seven
new products during 2010-11
• Thwarted
competition from use-and throw pen segments
• Focused on
creating brand visibility through Just Linc and Office Linc stores
• Invested Rs.
84.800 millions in advertising as against Rs. 72.100 millions in 2009-10
CONTINGENT
LIABILITIES
Contingent Liabilities Not Provided For :
(Rs. In Millions)
|
|
31.03.2011 |
31.03.2010 |
|
a) Bank
Guarantees issued in favour of the President of India and others* |
3.170 |
6.024 |
|
*Fixed Deposit lodged
as Margin Money against the above |
1.031 |
1.585 |
|
b) Income Tax
demands under appeal Income Tax Paid
against demands |
62.152 5.000 |
21.880 0.000 |
|
c) Bills
Discounted from Bank |
0.000 |
2.122 |
UNAUDITED FINANCIAL
RESULTS (PROVISIONAL) FOR THE QUARTER ENDED JUNE, 2011
(Rs. In Millions)
|
Particulars |
Quartet Ended |
|
30.06.2011 |
|
|
1.
Net Sales |
586.827 |
|
2.
Other Operating Income |
15.186 |
|
3.
Total Income (1+2) |
602.013 |
|
|
|
|
4.
Expenditure |
|
|
a. (Inc.)/Dec. in Stock in Trade |
(16.221) |
|
b. Consumption of Raw Material |
166.865 |
|
c. Purchase of Traded Goods |
282.338 |
|
d. Processing Charges |
20.512 |
|
e. Employees Cost |
37.419 |
|
f. Depreciation |
10.382 |
|
g. Other Expenditure |
91.030 |
|
Total |
592.325 |
|
|
|
|
Profit from operations before other income and Net Finance
Charges (3-4) |
9.688 |
|
Other income |
0.240 |
|
Profit before Interest & Exceptional Items |
9.928 |
|
Interest |
8.454 |
|
Profit after
Interest but before Exceptional Items |
1.474 |
|
Exceptional Items |
-- |
|
Profit from ordinary activities before tax |
1.474 |
|
Tax Expense |
(0.265) |
|
Net Profit from ordinary
activities after tax |
1.739 |
|
Extraordinary Items |
-- |
|
Net Profit for the period |
1.739 |
|
Paid up Equity
Capital (Face Value of the Share - Rs.10/- each) |
127.860 |
|
Reserves (excluding Revaluation Reserve) |
|
|
Basic & Diluted EPS (not annualised) |
0.14 |
|
Public Shareholding |
|
|
- Number of Shares |
3918890 |
|
- Percentage of Shareholding |
30.65% |
|
Promoters and Promoters group Shareholding |
|
|
a) Pledged /Encumbered |
Nil |
|
|
|
|
b) Non Encumbered |
|
|
Number of shares |
8867070 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
100% |
|
Percentage of shares (as a % of total share capital of the
company) |
69.35% |
Notes:
1.
The figures for the previous year have been
regrouped wherever necessary.
2.
The business of the Company falls under single
segment-"Writing Instruments and Stationery" for the purpose of
Accounting Standard AS-17.
3.
There were no investor complaints unresolved at the
beginning of the quarter. During the quarter the Company received and resolved
1 (one) investor complaint.
4.
The above results have been taken on record at the
meeting of the Board of Directors held on 30th July, 2011.
FIXED ASSETS
·
Freehold Land
·
Buildings
·
Plant and Machinery
·
Other Equipments
·
Furniture and Fixtures
·
Vehicles
·
Computer Software
WEB SITE DETAILS
BUSINESS
DESCRIPTION
Subject
is an India-based company. The Company is engaged in the manufacturing, marketing
and exporting of writing instruments and stationery products. It manufactures
ballpoint and gel pens, refills, pencils and stationery accessories. Its
product portfolio consists of 50 products. It manufactures various types of
ball point pens, which includes ball pen, gel pen, stationery, retractable ball
pens, stickball pens, designer pens and rubber grip ball point pen. The Company
is also engaged in marketing products manufactured by Mitsubishi Pencil Company
Limited Uniball and C. Joseph Lamy GmbH’s Lamy. Its products are sold in 30
countries. During the fiscal year ended March 31, 2010 (fiscal 2010), the
Company produced 4,188.84 pieces of pens and plastic components, and 4,380.39
pieces of refills. Its products are available across 12 direct retail fronts,
which include Office Linc and Just Linc stores. The Company supplies its
products to Sanford, Wal-Mart, TESCO and Poundland. For the nine months ended
31 December 2010, Subject revenues increased 15% to RS1.88B. Net income
decreased 9% to RS62.1M. Revenues reflect an increase income from operations
and higher income from other operating income. Net income was offset by an
increase in purchase of traded goods, increase in employees cost, higher
depreciation expenses and increase in other expenditure.
MANAGEMENT
PRAHLAD RAI AGARWALA - INDEPENDENT NON-EXECUTIVE DIRECTOR
Shri. Prahlad Rai
Agarwala is an Independent Non-Executive Director of Line Pen and Plastics
Limited. He is a Commerce and Law graduate, possesses experience in the
manufacturing and marketing of fast-moving consumer goods. He is the Chairman
of Rupa and Company Limited, a well known inner and casualwear company.
RANJAN DAS - INDEPENDENT NON-EXECUTIVE DIRECTOR
Dr. Ranjan Das
serves as Independent Non-Executive Director of Line Pen and Plastics Limited.
He has an M. Sc (Applied Mathematics) and a Doctorate in Strategic Management.
He is currently a Professor of Strategic Management at the Indian Institute of
Management, Calcutta. He has an impeccable record as an advisor in strategic
planning and management to several corporates. He has over 15 years experience
in strategic and functional management, teaching, training, consulting and
research. Prior to that, he had 20 years of industry experience during which he
held senior positions as GM of an MNC and MD of a joint sector company.
DEEPAK JALAN - MANAGING DIRECTOR, EXECUTIVE
DIRECTOR
Shri. Deepak Jalan
serves as the Managing Director, Executive Director of Line Pen and Plastics
Limited. He is a Commerce graduate with 25 years of experience in the business,
is responsible for the overall operations of the Company with a specialization
in international operations.
PRAKASH JALAN - NON-EXECUTIVE DIRECTOR
Shri. Prakash
Jalan is the Non-Executive Director of Line Pen and Plastics Limited with
effect from April 15, 2010. He is a commerce graduate with 23 years of
experience in the business, looks after Goa operations and advices on
manufacturing functions of the Company.
SOHAN LAL KOCHAR - INDEPENDENT NON-EXECUTIVE
DIRECTOR
Shri. Sohan Lal
Kochar serves as Independent Non-Executive Director of Line Pen and Plastics
Limited. He is a postgraduate in commerce and LLB, is an advisor on income tax
matters. He has been a guiding force since the inception of the Company.
NARESH PACHISIA - INDEPENDENT NON-EXECUTIVE
DIRECTOR
Shri. Naresh
Pachisia serves as Independent Non-Executive Director of Line Pen and Plastics
Limited. He is a Certified Financial Planner (CFP) is the Promoter- Managing
Director of SKP Securities Ltd, a stock broking and wealth management service
provider.
KEDAR NATH RANASARIA - INDEPENDENT NON-EXECUTIVE
DIRECTOR
Shri. Kedar Nath
Ranasaria serves as Independent Non-Executive Director of Linc Pen and Plastics
Limited. He is is a post-graduate and brings with him over four decades of
experience in finance, manufacturing and other allied areas. He is associated
with Balrampur Chini Mills Limited, one of India’s sugar companies.
N. K. DUJARI - COMPLIANCE OFFICER, COMPANY
SECRETARY, GENERAL MANAGER – FINANCE
Mr. N.K. Dujari is
the Compliance Officer, Company Secretary, General Manager - Finance of Linc
Pen and Plastics Limited.
NEWS
Linc Pen and Plastics Limited Declares Dividend
Sep 14, 2011
Linc Pen and Plastics Limited announced the declaration of
dividend at INR1.80 (18%) per equity share for the year ended March 31, 2011.
Linc Pen and Plastics Limited
Recommends Dividend
May 30, 2011
Linc Pen and Plastics Limited announced that the Board of
Directors of the Company at its meeting held on May 30, 2011, inter alia, has
recommended a Dividend of INR1.80 per equity share, (18% on equity shares)
subject to approval of the members at the ensuing AGM.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 49.08 |
|
|
1 |
Rs. 78.65 |
|
Euro |
1 |
Rs. 67.79 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
46 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
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 |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.