MIRA
INFORM REPORT
|
Report Date : |
09.11.2011 |
IDENTIFICATION DETAILS
|
Name : |
DHARANI SUGAR AND CHEMICALS LIMITED |
|
|
|
|
Registered
Office : |
PGP House 57, Sterling Road, Nungambakkam, Chennai-600034, Tamilnadu. |
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Country : |
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|
|
|
Financials (as
on) : |
31.03.2011 |
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|
|
|
Date of
Incorporation : |
04.06.1987 |
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|
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|
Com. Reg. No.: |
18-014454 |
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Capital
Investment/ Paid-up Capital: |
Rs.293.898 millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L15421TN1987PLC014454 |
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|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHEDO0220D |
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PAN No.: [Permanent Account No.] |
AAACD1281F |
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|
Legal Form : |
A Public Limited Liability company. The company’s Shares are Listed on
the Stock Exchange. |
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Line of Business
: |
Manufacturer of white sugar as main product in two forms: crushing of
sugarcane and processing of imported raw sugar. |
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|
|
|
No. of
Employees: |
801 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (45) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 4400000 |
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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 a well established company having satisfactory track. There
appears some dip in the profitability of the company. However, networth
appears to be satisfactory. 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 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
“PGP” House, No.57, sterling Road, Nungambakkam, Chennai-600034, Tamilnadu,
India. |
|
Tel. No.: |
91-44-28311313 / 28207480 / 81 / 82 |
|
Fax No.: |
91-44-28232074 |
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E-Mail : |
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|
Website : |
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Factory 1 : |
Sugar Unit-I Dharani Nagar, Vasudevanallur, Tiruneveli District-327760, Tamilnadu,
India. |
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Tel No. : |
91-4636-241370 / 72 |
|
E-mail Id : |
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|
Factory 2 : |
Sugar Unit-II Located at: Karaipoondi Village, Polur-606803, Thiruvannamalai,
Tamailnadu, India. |
|
Tel No. : |
91-4181-223161 / 162 / 223170 |
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E-mail Id : |
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Factory 3 : |
Sugar Unit III Located at: Kalayanallur Village, Sankarapuram Taluk, Villupuram
District-606206, Tamilnadu, India. |
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|
|
Tel No. : |
91-4151-248208 / 248277 |
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E-mail Id : |
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Factory 4 : |
Distillery (in Unit I) Located at: Dharani Nagar, Vasudevanallur, Tiruneveli District-627760,
Tamilnadu, India. |
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Tel No. : |
91-4636-241370 / 72 |
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E-mail Id : |
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Factory 5 : |
Distellery (in Unit II) (Under Implementation) Located at: Kalayanallur Village, Sankarapuram Taluk, Villupuram
District-606206, Tamilnadu, India. |
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|
|
|
Tel No. : |
91-4151-248208 / 248277 |
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E-mail Id : |
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Factory 6 : |
Co-Generation Power (In Unit I) Located at: Karaipoondi Village, Polur-606803, Thiruvannamalai,
Tamailnadu, India |
|
Tel No. : |
91-4181-223161 / 162 / 223170 |
|
E-mail Id : |
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|
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|
Factory 7 : |
Co-Generation Power (In Unit II) Located at: Kalayanallur Village, Sankarapuram Taluk, Villupuram
District-606206, Tamilnadu, India. |
|
Tel No. : |
91-4151-248208 / 248277 |
|
E-mail Id : |
DIRECTORS
(AS ON 31.03.2011)
|
Name : |
Mr. Palani G. Periasamy |
|
Designation : |
Executive Chairman |
|
|
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|
Name : |
Mr. M. Ramalingam |
|
Designation : |
Managing Director |
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|
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|
Name : |
Mr. K.N. Sivasubramanian |
|
Designation : |
Director |
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|
Name : |
Mr. A. Sennimalai |
|
Designation : |
Director |
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|
Name : |
Mr. P. S. Gopalakrishnan |
|
Designation : |
Director |
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|
Name : |
Mr. T. Ramabhadran |
|
Designation : |
Director |
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|
Name : |
Mr. K. C. Reddy |
|
Designation : |
Nominee director-IREDA |
KEY EXECUTIVES
|
Name : |
Mr. E. P. Sakthivel |
|
Designation : |
Company Secretary |
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|
|
|
Name : |
Mr. Paul Dhass |
|
Designation : |
Human Resource Manager |
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|
|
|
Name : |
Mr. A. R. Sundaram |
|
Designation : |
Information Technology Manager |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.06.2011)
|
Name of Shareholders |
No. of shares |
Percentage of
Holdings |
|
|
|
|
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
1095427 |
3.73 |
|
|
7776567 |
26.46 |
|
|
8871994 |
30.19 |
|
|
|
|
|
Individuals
(Non-Resident Individuals / Foreign Individuals) |
6514144 |
22.16 |
|
Sub
Total |
6514144 |
22.16 |
|
Total shareholding of Promoter and Promoter Group (A) |
15386138 |
52.35 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
14800 |
0.05 |
|
|
3350 |
0.01 |
|
|
18.150 |
0.06 |
|
|
|
|
|
|
1539733 |
5.24 |
|
|
|
|
|
|
3331563 |
11.34 |
|
|
3469295 |
11.80 |
|
Any Other (Specify) |
5644967 |
19.21 |
|
Clearing Members |
6904 |
0.02 |
|
Hindu Undivided Families |
155077 |
0.53 |
|
Non Resident Indians |
5464183 |
18.59 |
|
Directors and their relatives and Friends |
18803 |
0.06 |
|
|
13989558 |
47.59 |
|
Total Public shareholding (B) |
14003708 |
47.65 |
|
Total (A)+(B) |
29389846 |
100.00 |
|
(C) Shares held
by Custodians and against which Depository Receipts have been issued |
|
|
|
|
-- |
-- |
|
|
-- |
-- |
|
|
-- |
-- |
|
Total
(A)+(B)+(C) |
29389846 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of white sugar as main product in two forms: crushing of
sugarcane and processing of imported raw sugar. |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Actual
Production |
|
Sugar |
Quintals |
2010300 |
|
Molasses |
MTs |
70148 |
|
Industrial Alcohol |
ltrs |
12576175 |
|
Power |
Units |
214629100 |
GENERAL INFORMATION
|
No. of Employees : |
801 (approximately) |
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Bankers : |
·
ICICI bank Limited ·
Indian bank ·
State Bank of India ·
Bank of India ·
The Federal Bank Limited ·
The South Indian Bank Limited ·
Central Bank of India ·
Union Bank of India ·
Indian Overseas Bank ·
IREDA |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Facilities : |
(Rs.
in millions) Note: 1.
Cash, Credit, Demand Loan for Working Capital from
Banks [(a) above] availed are secured by Hypothecation of stocks of sugar,
stores and spares, stocks in Process and Book Debts and second charge on the
Fixed Assets of the Company. 2.
Term Loan from ICICI Bank Limited, Bank of India,
Union Bank of India, Indian Bank, State Bank of India, The South India Bank
Limited, Central Bank of India, Indian Overseas Bank and The Federal Bank
Limited are secured on a pari passu basis by an equitable mortgage of all the
immovable properties of the Company,
both present and future, and a charge on Company’s movable assets including
plant and machinery and also save and except inventory and book debts and
subject to prior charge of specified items in favour of the Company’s bankers
for securing working capital facilities and joint mortgage by deposit of
title deed with the Banks. Further pledge of 5121500 Equity shares of Rs.10/-
each held by the Company in M/S Appu Hotels Limited in favour of above
mentioned Banks as additional securities. 3.
Term Loan from IDBI is secured on a pari-passu
basis by equitable mortgage of all the immovable properties of the company,
both present and future, and a charge on Company’s movable assets including
plant and machinery and also save and except inventory and book debts and
subject to prior charge of specified items in favour of the Company’s bankers
for securing working capital facilities and joint mortgage by deposit of
title deed with the Banks. 4.
Term Loan from Sugar Development Fund, Government
of India, is secured through a guarantee from Indian Bank to the extent of
Rs.Rs.135.000 millions, which is secured by an equitable mortgage on Pari
Passu basis of all the immovable properties of the Company and by a charge on
Company’s movable assets including Plant and Machinery. 5.
Excise Duty loan from Indian Bank is secured by
an equitable charge of all the immovable properties of the company, both
present and future on residual charge basis and by a charge on Company’s
movable assets including Plant and Machinery 6.
The Executive Chairman Dr. Palani G. Periasamy
has given Personal guarantee for the loans/working capital facilities availed
from financial institutions/Banks. 7.
The company has received Rs.41.000 millions from
SDF for cane development and raw sugar machinery. 8.
During the year the Company has received Term
Loan of Rs.749.200 millions from Indian Renewable Energy Development Agency
Limited, Term Loan of Rs.236.584 millions from sugar Development Fund –
Government of India and Bridge loan of Rs.240.000 millions from State Bank of
India is secured by an equitable charge of all the immovable properties of
the Company both present and future on residual charge basis and by a charge
on the Company’s movable assets including Plant and Machinery. (Rs.
in millions)
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Srinivasan and Shankar Chrtered Accountants |
|
Address : |
Chennai-600028, Tamilnadu, India. |
|
|
|
|
Associates : |
·
Dharani Finance Limited ·
Appu Hotels Limited ·
PGP Educational and Welfare Society ·
Dharani Developers Private Limited |
|
|
|
|
Enterprises
significantly influenced by Key Management Personnel : |
·
Ananthi Developers Limited |
CAPITAL STRUCTURE
(AS ON 31.03.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
50000000 |
Equity Share |
Rs.10/- each |
Rs.500.000
millions |
|
10000000 |
Preference Share |
Rs.10/- each |
Rs.100.000
millions |
|
|
|
|
|
|
|
Total |
|
Rs.600.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
29389846 |
Equity Share |
Rs.10/- each |
Rs.293.898 millions |
|
|
|
|
|
|
|
Total |
|
Rs.293.898 millions |
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 |
293.898 |
253.898 |
253.898 |
|
|
2] Share Application Money |
0.000 |
160.011 |
0.000 |
|
|
3] Reserves & Surplus |
814.232 |
661.236 |
250.480 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1108.130 |
1075.145 |
504.378 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
4084.749 |
4364.069 |
2963.018 |
|
|
2] Unsecured Loans |
251.343 |
477.916 |
624.040 |
|
|
TOTAL BORROWING |
4336.092 |
4841.985 |
3587.058 |
|
|
DEFERRED TAX LIABILITIES |
218.599 |
243.780 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5662.821 |
6160.910 |
4091.436 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3492.668 |
3557.757 |
1263.768 |
|
|
Capital work-in-progress |
587.719 |
302.220 |
1400.879 |
|
|
|
|
|
|
|
|
INVESTMENT |
52.042 |
52.042 |
52.042 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
54.030 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1271.410
|
5026.366 |
1680.659 |
|
|
Sundry Debtors |
426.849
|
259.870 |
82.252 |
|
|
Cash & Bank Balances |
86.741
|
395.119 |
317.786 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
378.982
|
461.750 |
245.131 |
|
Total
Current Assets |
2163.982
|
6143.105 |
2325.828 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
390.818
|
3475.365 |
774.427 |
|
|
Other Current Liabilities |
199.473
|
301.613 |
171.792 |
|
|
Provisions |
43.299
|
117.236 |
58.692 |
|
Total
Current Liabilities |
633.590
|
3894.214 |
1004.911 |
|
|
Net Current Assets |
1530.392
|
2248.891 |
1320.917 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5662.821 |
6160.910 |
4091.636 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
8405.856 |
5783.030 |
2226.096 |
|
|
|
Other Income |
23.035 |
34.810 |
4.168 |
|
|
|
TOTAL |
8428.891 |
5817.840 |
2230.264 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Material consumed |
5050.936 |
5218.567 |
1979.857 |
|
|
|
Excise duty movement in inventory |
(70.822) |
34.029 |
55.515 |
|
|
|
Manufacturing and other expenses |
1086.916 |
813.145 |
374.765 |
|
|
|
Increase / (Decrease) in Inventory |
1545.741 |
(1467.140) |
(722.640) |
|
|
|
TOTAL |
7612.771 |
4598.601 |
1687.497 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION |
816.120 |
1219.239 |
542.767 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES |
581.710 |
332.696 |
225.615 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION |
234.410 |
886.543 |
317.152 |
|
|
|
|
|
|
|
|
|
Less |
DEPRECIATION |
214.605 |
139.800 |
69.862 |
|
|
|
|
|
|
|
|
|
Add |
AMORTISATION OF
USAID GRANT |
1.125 |
1.125 |
1.125 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX |
20.930 |
747.868 |
248.415 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
14.951 |
291.578 |
147.833 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX |
35.881 |
456.290 |
100.582 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
446.120 |
84.240 |
23.363 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
0.000 |
50.000 |
10.000 |
|
|
|
Dividend |
0.000 |
38.085 |
25.390 |
|
|
|
Tax on Dividend |
0.000 |
6.325 |
4.315 |
|
|
BALANCE CARRIED
TO THE B/S |
482.001 |
446.120 |
84.240 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Sales Income (FOB value) |
288485.700 |
0.000 |
148.630 |
|
|
TOTAL EARNINGS |
288485.700 |
0.000 |
148.63 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
0.000 |
4601.873 |
503.404 |
|
|
|
Capital Goods |
0.000 |
163.892 |
0.000 |
|
|
|
Components and spare parts |
0.000 |
0.000 |
0.076 |
|
|
TOTAL IMPORTS |
0.000 |
4765.765 |
503.48 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
1.31 |
17.97 |
3.96 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2011 |
|
Type |
|
|
1st
Quarter |
|
Net Sales |
|
|
2012.210 |
|
Total Expenditure |
|
|
1754.790 |
|
PBIDT (Excl
OI) |
|
|
257.420 |
|
Other Income |
|
|
0.000 |
|
Operating
Profit |
|
|
257.420 |
|
Interest |
|
|
116.970 |
|
Exceptional
Items |
|
|
0.280 |
|
PBDT |
|
|
140.730 |
|
Depreciation |
|
|
51.010 |
|
Profit
Before Tax |
|
|
89.720 |
|
Tax |
|
|
5.810 |
|
Provisions
and contingencies |
|
|
0.000 |
|
Reported PAT |
|
|
83.920 |
|
Extraordinary Items |
|
|
0.000 |
|
Prior Period Expenses |
|
|
0.000 |
|
Other Adjustments |
|
|
0.000 |
|
Net Profit |
|
|
83.920 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
0.43
|
7.84 |
4.51 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
0.25
|
12.93 |
11.16 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
0.37
|
7.71 |
6.92 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.02
|
0.69 |
0.49 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
4.48
|
8.13 |
9.10 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.42
|
1.58 |
2.31 |
LOCAL AGENCY FURTHER INFORMATION
PRODUCT-WISE PERFORMANCE:
Sugar:
During
the year, the company has crushed 1.329 million tonnes of cane as against 1.223
million tonnes of cane in the previous year. The increase in cane crushing is
mainly due to Sankarapuram unit crushing for the full year. During the year,
the Company has processed 90685 Tonnes of Raw Sugar as against 116215 Tonnes of
Raw Sugar in the previous year.
The
total sugar production was 2.010 millions qtls as against 2.130 million qtls in
the previous year. The sugar recovery from the cane was 8.93 % as against 8.49%
in the previous year. The company has sold 2.614 million qtls as against 1.883
million qtls in the previous year. During the year the company has exported
0.890 million qtls of sugar. The average realization for the year 2010-11 was Rs. 2801/qtl as against Rs. 2678/qtl
in the Previous year.
Power:
During
this period, the total power generation was 214.629 million units as against
121.429 million units in the previous year. The export to the TNEB grid was
1535.04 lakh units as against 76.537 million units in the previous year.
Accordingly, the total value of the power exported to the grid has increased to
Rs. 699.218 millions as against Rs. 306.253 millions in the previous year.
Industrial Alcohol:
The
production of industrial Alcohol was 12.576 million litres as against 15.059
million litres in the previous year. The decrease in the production was mainly
on account of not operating the Sugar Plant for longer duration from where
steam for the distillery unit is supplied. The Alcohol sale was 11.911 million
litres as against 14.229 million litres in the previous year. Consequent to
this, the Alcohol sales has come down to Rs. 343.554
millions as against Rs.424.810 millions in the
previous year. The average realization was Rs. 28.81/
ltreas against Rs. 29.80 /ltre in the previous
year.
Financial Performance:
During
the year, the company has achieved a record turnover of Rs.
8588.400 millions as against Rs. 5966.700
millions in the previous year. However, the Gross operating profit decreased to Rs. 816.100 millions from Rs. 1219.200
millions in the previous year. The reduction in the GOP was mainly on account
of reduced margin in 2010-11 as compared to the previous year. After adjusting
interest and depreciation, the operations resulted in a net profit of Rs. 20.900 millions, as against the profit of Rs. 747.900 millions in the previous year. Taking into
account the Deferred Tax Asset of Rs.25.100 millions and Tax of Rs.10.200
millions, the net profit comes to Rs. 35.900
millions as against the profit of Rs. 456.300
millions in the previous year.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT:
Company profile
The
Company is engaged in the business of manufacture of Sugar, Co-generation of
power and Alcohol including Ethanol. The operations are spread over in three
locations in TamilNadu namely, at Dharani Nagar in Tirunelveli District, at
Karaipoondi Village, Polur in Thiruvannamalai District and at Kalayanallur
Village, Sankarapuram Taluk in Villupuram District.
Indian Sugar Scenario
India,
the world's biggest consumer of sugar is the second largest producer of sugar
in the world after Brazil. It is also the India's second largest Agro based
industry after textiles. It employs about 50 million farmers and supports
another 50 million people by providing direct/indirect employment. The Industry
pays about Rs. 500000.000 millions to the farmers
as cane payment, which constitutes about two thirds of the cost of production
of sugar. The sugar industry contributes an estimated Rs. 50000.000
millions annually by way of excise duty and purchase tax on sugar cane.
As
per the study by A.C. Nielson, about 70% of sugar consumption is accounted for
by the bulk consumers like beverages, biscuit/confectionery and sweet meat
manufacturers,etc. and the balance 30% is equally consumed by BPL families and
the middle income families. Out of this, the supplies to the BPL families are
ensured through PDS supply. Despite this, Indian Sugar Industry may be the
highly controlled and regulated Industry in the World. These controls are being
exercised in the name of protecting the consumers,(which includes the bulk
consumers also), whereas it really hurts the Industry and the farmers. In fact
our Sugar Industry may be the only Industry in the world, which subsidizes the
Indian consumers, subsidizes the Government by carrying the inventory to meet
the supply throughout the year, and subsidizes the international consumers by
exporting the surplus sugar at a huge loss. Also imports during deficit period
at high cost which benefits the international farmers and the trade.
Despite
the above, the Indian Sugar production has bounced back and the sugar
production for the season 2010-11 is expected to be 242 lakh tonnes as against
181 lakh tonnes in the previous season. Improved Free sale sugar price during
the earlier season has enabled the industry to increase the cane price
substantially. It has helped to attract more farmers back to sugar cane
cultivation. If the sugar price in India is not artificially controlled, competition
among the mills will ensure fair and remunerative price to the farmers which
will ensure consistency in the production of sugar.
Government Policies
Sugar
is one of the highly controlled and regulated commodity in India. Levy
obligation reduced to the previous year level of 10%. Though the balance 90% is
called as free sugar, it is also regulated through monthly release mechanism.
The Central Government continuously monitors the free sale sugar price in the
market and depending upon the price, the Government, now and then varies the
release quantity to control abnormal increase in the price. Some of the major
moves taken during the last year are given below:
1.
Permitted export of sugar against the export obligation of raw sugar imported
in the earlier years.
2.
Release of Sugar for exports under Open General Licence in a phased manner with
restriction on the quantity.
3.
Increase in the stock holding limit.
Outlook for 2011-12
The
sugar production for 2011-12 season is expected to witness a substantial jump
and is likely to be around 270 lakh tonnes as against the previous season's
expected production of 242 lakh tonnes. This quantum jump in production would
not have been possible, but for the attractive cane price paid during the
seasons 2009-10 and 2010-11, which has encouraged cane growers.
Correspondingly, the cane availability for The units have also increased
excepting the Dharani Nagar unit, where the availability of the cane is less on
account of drought in the cane commend area.
INTRODUCTION:
Subject
is a group company of PGP. Dr. Palani G. Periasamy an N.R.I based in U.S.A is
the Executive Chairman of the PGP group of Industries headquarters at in
Chennai. Dr.Palani G. Periasamy is a Doctrate in Advanced micro / macro
Economics from the University of Pittsburg U.S.A. He was a professor of
Economics and Director of the graduate School of Management at the University
of Baltimore, Maryland U.S.A from 1974 – 1987.
Subject is a member of well known PGP group. The other members of the PGP group of
Industries are as follows
Subject,
Unit – I Dharani Nagar, Tirunelveli District. Distillery Unit, Dharani Nagar,
Tirunelveli. Subject, Unit – II Polur, Thiruvannamalai District. Dharani
Finance Limited, Chennai. Hotel Le Royal Meridian, Chennai. Anandhi Developers
Limited, Chennai. P.G.P Educational Welfare Society, Chennai.
Subject,
a group company of PGP is promoting 22 MW cogeneration plant in Kalayanallur
village, Sankarapuram Taluk, Villupuram District in Tamil Nadu. Fully aware of
the contribution that DSCL can make towards generation of green power, they
have decided to install a 22 MW bagasse based cogeneration plant. The company
has interests across integrated fields such as Sugar, Distillery, Power.
Subject–Unit
III is proposed to set up a Co-gen power plant at S.F. Nos. 50, 51, 52.
Kalayanallur village, Sankarapuram Taluk, Villupuram District, which is located
17 km away from Kallakurichi. This unit proposes to install the Co-gen Plant
with the capacity of 22.0 MW/hr using Bagasse to fulfill the requirements in
Tamil Nadu. The gross assets value of
the proposed total unit is Rs.1119.600 millions.
FIXED ASSETS:
·
Land and Site Development
·
Buildings
·
Plant and Machinery
·
Furniture and Fixtures
·
Office Equipments
·
Vehicles
BUSINESS DESCRIPTION:
Subject is an India-based company. The Company is engaged in
the manufacture of white sugar as main product in two forms: crushing of
sugarcane and processing of imported raw sugar. The other activities of the
Company are generation of electricity, production of molasses and production of
industrial alcohol. The Company has three segments: sugar, distillery and
power. Sugar segment includes molasses and other by-products. The Company’s
products include cane sugar, industrial alcohol and power. As of March 31,
2010, the Company had an installed capacity of 2,500 tons of cane in Dharani I
at Dharani Nagar, 4,000 tons of cane in Dharani II at Polur and 3,500 tons of
cane in Dharani, III at Sankarapuram, all in Tamil Nadu. For the nine months
ended 31 December 2010, Subject’s revenues increased 22% to RS5.82B. Net loss
totaled Rs.2660.700 millions vs. a profit of Rs.612.900 millions. Revenue
reflect increased income from Sugar, higher revenue from Distillery and a rise
in income from Power segments. Net loss reflects increase in consumption of raw
materials, increase in employee cost, increase in depreciation expenses and
higher other expenditure
MANAGEMENT
Biography of Directors
1. Dr. Palani G. Periasamy
Title: Executive Chairman of the Board
Function: Chairman
Dr. Palani G.
Periasamy is the Executive Chairman of the Board of Dharani Sugars and
Chemicals Limited. He is a Professor of Economics, USA and a Financial Consultant
and Industrialist. He holds M.A., M.A.,Ph.D.(U.S.A.).
2. P. S. Gopalakrishnan
Title: Non-Executive Independent Director
Function: Director/Board Member
Shri. P. S. Gopalakrishnan is Non-Executive Independent Director of Dharani Sugars and Chemicals Limited. He is B.COM, LLB, AIB (Associate of Institute of Bankers) (London), Fellow of Economic Development Institute of World Bank, Washington. He has more more than 35 years in Banking and Development financial institutions. His Other Directorships includes: Kothari Sugars and Chemicals Limited., Sakthi Finance Limited., Shriram General Insurance Co. Limited.
3.
M. Ramalingam
Title: Managing Director, Executive
Director
Function: Director/Board Member
4.
K. C.
Reddy
Title: Non-Executive Independent
Director - Nominee of IREDA
Function: Director/Board Member
5.
A.
Sennimalai
Title: Non-Executive Director
Function: Director/Board Member
Shri. A. Sennimalai serves as Non-Executive Director of Dharani Sugars and Chemicals Limited. He holds M.Sc., M.B.A degrees
6.
Mr. K. N.
Sivasubramanian
Title: Non-Executive Independent Director
Function: Director/Board Member
Dr. K. N. Sivasubramanian is the
Non-Executive Independent Director of Dharani Sugars and Chemicals Limited. He
holds M.B.B.S, F.A.AP.A.B (FED), A.B (NEO) USA. He has experience in Medicine.
SIGNIFICANT DEVELOPMENTS:
CARE reaffirms the
assigned ratings to the bank-facilities of Dharani Sugars
Accord Fintech (India)
06 May 2011
[What follows is the full text of the news story.]
India, May 06 -- Credit rating agency, CARE has reaffirmed the assigned
'CARE BBB' ratings to the long-term bank facilities of Dharani Sugars and Chemical
(DSCL) for Rs 3720.400 millions, reduced from Rs 4299.300 millions. The agency
has also reaffirmed the assigned 'PR3' ratings to the short-term bank
facilities of the company for Rs 2080.000 millions, enhanced from Rs 80.000
millions. The company's ability to achieve relatively stable revenue stream and
profitability and timely completion of its distillery unit which is likely to
increase the level of integration are key rating sensitivities. The ratings are
however constrained by high levels of leverage, concentration risk arising on
account of location of all its plants in the state of Tamil Nadu (TN) and
cyclical and highly regulated nature of the sugar industry. Dharani Sugars and
Chemicals is engaged in the manufacture of sugar and its by-products like
bagasses and molasses, industrial alcohol, co-generation of power, and export
of TNEB grids. It operates in three segments: sugar, distillery and power.
Published by HT Syndication with permission from Accord Fintech.
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.49.38 |
|
|
1 |
Rs.79.19 |
|
Euro |
1 |
Rs.67.84 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
45 |
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.