|
Report Date : |
05.05.2012 |
IDENTIFICATION DETAILS
|
Name : |
DEEPAK NITRITE LIMITED |
|
|
|
|
Registered
Office : |
9/10,
Kunj Society, Alkapuri, Vadodara – 390007, Gujarat |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
06.06.1970 |
|
|
|
|
Com. Reg. No.: |
04-001735 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.104.538
Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L24110GJ1970PLC001735 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
PNED03452B |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACD7468A |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on the Stock
Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturer of chemicals. |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
A (59) |
|
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 9600000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Exist |
|
|
|
|
Comments : |
Subject is a well established and reputed company having fine track.
Financial positions 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 good for normal 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) |
|
|
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 : |
9/10,
Kunj Society, Alkapuri, Vadodara – 390007, Gujarat, India |
|
Tel. No.: |
91-265-2351013/ 2334481-82 |
|
Fax No.: |
91-265-2330994 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office : |
Deepak Complex,
National Games Road, Yerawada, Pune – 411006, Maharashtra, India |
|
Tel. No.: |
91-20-66090200 |
|
Fax No.: |
91-20-26685448 |
|
|
|
|
Marketing Office : |
8-1, First Floor, Panchshila Park, New Delhi – 110017, India |
|
Tel No.: |
91-11-26015548 |
|
|
|
|
Factory 1 : |
Baroda division 4/12, GIDC Chemicals Complex, Nandesari, Gujarat, India |
|
Tel. No.: |
91-265-2840639/-47 |
|
|
|
|
Factory 2 : |
Roha: Plot No 1-6/26,27,29,31MIDC Dhatav, Roha-402116 District Raigad,
Maharashtra, India |
|
Tel. No.: |
91-2194-263550/263750/264777/78/79 |
|
|
|
|
Factory 3 : |
Taloja:. Plot No. K-10, MIDC, Taloja, A.V. District Raigad-410208, Maharashtra,
India |
|
Tel. No.: |
91-22-27411125/26/27 |
|
|
|
|
Factory 4 : |
Hyderabad Specialties Division: 90F, IDA, Phase II, Jeedimetla, Hyderabad-500055, Andhra Pradesh,
India |
|
Tel. No.: |
91-40-23097401 |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. C.K. Mehta |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. M.R.B. Punja |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. A.K. Dasgupta |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Hasmukh Shah |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sudhin Choksey |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sudhir Mankad |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. A.C. Mehta |
|
Designation : |
Managing Mehta |
|
|
|
|
Name : |
|
|
Designation : |
Vice Chairman and Managing Director |
|
|
|
|
Name : |
Mr. Shrenik K. Lalbhai |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Nimesh Kampani |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Berjis Desai |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Richard H. Rupp |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Umesh Asaikar |
|
Designation : |
Chief Executive Officer |
|
|
|
|
Name : |
Mr. Sanjay Upadhyay |
|
Designation : |
Vice President (Finance) and Company Secretary |
|
|
|
|
Name : |
Mr. Singanallur Ramakrishnan |
|
Designation : |
Vice President - Supply Chain |
|
|
|
|
Name : |
Dr. Pramod Garg |
|
Designation : |
Vice President - Operations |
|
|
|
|
Name : |
Mr. Pramod
Talegaon |
|
Designation : |
Vice President
(Technology) |
|
|
|
|
Name : |
Mr. Vijay Tikekar |
|
Designation : |
Vice President
(Marketing) |
|
|
|
|
Audit Committee: |
|
|
Name : |
Mr. A.K. Dasgupta |
|
Designation : |
Member |
|
|
|
|
Name : |
Mr. Sudhin Choksey
|
|
Designation : |
Member |
|
|
|
|
Name : |
Mr. Sudhir Mankad |
|
Designation : |
Member |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 31.03.2012)
|
Names of Category |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
2,190,107 |
20.95 |
|
|
3,657,070 |
34.98 |
|
|
5,847,177 |
55.93 |
|
|
|
|
|
|
|
|
|
Total
shareholding of Promoter and Promoter Group (A) |
5,847,177 |
55.93 |
|
|
|
|
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
1,800 |
0.02 |
|
|
425 |
- |
|
|
353,567 |
3.38 |
|
|
652,891 |
6.25 |
|
|
1,008,683 |
9.65 |
|
|
|
|
|
|
|
|
|
|
699,699 |
6.69 |
|
|
|
|
|
|
|
|
|
|
2,279,078 |
21.80 |
|
|
598,064 |
5.72 |
|
|
|
|
|
|
21,118 |
0.20 |
|
|
21,021 |
0.20 |
|
|
97 |
- |
|
|
3,597,959 |
34.42 |
|
|
|
|
|
Total Public
shareholding (B) |
4,606,642 |
44.07 |
|
|
|
|
|
Total (A)+(B) |
10,453,819 |
100.00 |
|
|
|
|
|
(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
|
|
|
Total
(A)+(B)+(C) |
10,453,819 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of Chemicals. |
||||||||||||
|
|
|
||||||||||||
|
Products : |
|
PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Unit |
Installed Capacity |
Actual Production Qty. MTS. |
|
Inorganic Salts |
MT |
44350 |
48459 |
|
Dinitrosopentamethylene Tetramine |
MT |
1800 |
551 |
|
Dye Intermediates |
MT |
660 |
-- |
|
Nitro Aromatics |
MT |
38750 |
36072 |
|
- By Products |
MT |
-- |
29101 |
|
Aromatics Amines |
MT |
18000 |
11447 |
|
Agro Chemical Intermediates |
MT |
9900 |
9384 |
|
Colour Intermediates |
MT |
6600 |
7526 |
|
- By Products |
MT |
-- |
8756 |
GENERAL INFORMATION
|
No. of Employees : |
Not Available |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
Bankers : |
·
State Bank of ·
Dena Bank, Mumbai ·
Bank of ·
ICICI Banking, Mumbai ·
Axis Bank Limited ·
ING Vysya Bank ·
Standard Chartered Bank |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
Facilities : |
Note: *Amount restated based
on revision of repayment schedule of installments during the year. 1. The Term Loans
obtained from the Financial Institutions/ Banks are secured by mortgage of
the immovable properties of the Company, both present and future and Hypothecation
of movable assets of the Company. 2. The Working
Capital Loans from Banks are secured by a prior charge over Company's stocks
of Raw Materials, Semi-Finished and Finished Goods, Consumable Stores and
Book Debts and by second charge on all Fixed Assets by way of mortgage. |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
B.K. Khare and Company Chartered Accountants |
|
Address : |
Mumbai, |
|
|
|
|
Associates: |
· Blue Shell Investment Private Limited · Check Point Credits and Capital Private Limited · Crossover Advisors Private Limited · Crossover Trustees Private Limited · Deepak Asset Reconstruction · Deepak Cleantech Limited · Deepak Fertilisers and Petrochemicals Corporation Limited · Deepak International Limited · Deepak Medical Foundation · Deepak Novochem Technologies Limited · Forex Leafin Private Limited · Grey Point Investments Private Limited · Hardik Leafin Private Limited · Kawant Developers Corporation · Nucore Capital Management Private Limited · Pranawa Leafin Private Limited · Prolific Credits and Capital Private Limited · Skyrose Finvest Private Limited · Sofotel Infra Private Limited · Stepup Credits and Capital Private Limited · Stiffen Credits and Capital Private Limited · Stigma Credit and Capital Private Limited · Storewell Credits and Capital Private Limited · Sundown Finvest Private Limited · Superpose Credits and Capital Private Limited · The LakakiWorks Private Limited · Yerowada Investment Limited |
CAPITAL STRUCTURE
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
30000000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 Millions |
|
2000000 |
Preference Shares |
Rs.100/- each |
Rs.200.000 millions |
|
|
|
|
|
|
|
Total |
|
Rs.500.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
10453819 |
Equity Shares |
Rs.10/- each |
Rs.104.538
Millions |
Note:
*Of the above Equity Shares:
a. 19,80,000 Equity Shares of Rs.10/- each were allotted as Bonus Shares
by capitalization of General Reserve.
b. 29,16,000 Equity Shares of Rs.10/- each fully paid up at a premium of
Rs.40/ per share were allotted on conversion of Debentures.
c. 2,32,062 Equity Shares of Rs.10/-each fully paid up were allotted
pursuant to Schemes of Amalgamation without payment being received in cash.
d. 29,81,171 Equity Shares of Rs.10/- each fully paid at a premium of
Rs.140/- per sharewere allotted on Right basis.
e. 14,90,586 Equity Shares of Rs.10/- each fully paid at a premium of
Rs.90/- per share were allotted on Conversion of Detachable Warrants issued
with Right Shares.
# Excludes 9,860 (9,860) Equity Shares of Rs.10/- each, kept in
abeyance.
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 |
104.538 |
104.538 |
89.632 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2274.554 |
2089.829 |
1816.732 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
2379.092 |
2194.367 |
1906.364 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
247.484 |
530.059 |
574.991 |
|
|
2] Unsecured Loans |
348.346 |
395.537 |
320.478 |
|
|
TOTAL BORROWING |
595.830 |
925.596 |
895.469 |
|
|
DEFERRED TAX LIABILITIES |
160.759 |
180.495 |
178.808 |
|
|
|
|
|
|
|
|
TOTAL |
3135.681 |
3300.458 |
2980.641 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1628.587 |
1660.728 |
1646.749 |
|
|
Capital work-in-progress |
77.349 |
19.719 |
77.318 |
|
|
|
|
|
|
|
|
INVESTMENT |
13.291 |
273.332 |
13.292 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
590.726
|
630.407
|
641.955 |
|
|
Sundry Debtors |
1279.838
|
1022.499
|
683.715 |
|
|
Cash & Bank Balances |
39.250
|
51.764
|
38.835 |
|
|
Other Current Assets |
51.024
|
96.531
|
87.191 |
|
|
Loans & Advances |
452.567
|
460.230
|
388.555 |
|
Total
Current Assets |
2413.405
|
2261.431
|
1840.251 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
821.316
|
732.322
|
428.454 |
|
|
Other Current Liabilities |
62.137
|
78.808
|
72.771 |
|
|
Provisions |
113.498
|
103.622
|
95.782 |
|
Total
Current Liabilities |
996.951
|
914.752
|
597.007 |
|
|
Net Current Assets |
1416.454
|
1346.679
|
1243.244 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.038 |
|
|
|
|
|
|
|
|
TOTAL |
3135.681 |
3300.458 |
2980.641 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
6604.606 |
5323.590 |
5723.521 |
|
|
|
Operating Income |
117.835 |
98.520 |
94.231 |
|
|
|
Other Income |
51.721 |
42.468 |
11.191 |
|
|
|
TOTAL (A) |
6774.162 |
5464.578 |
5828.943 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Material |
4373.079 |
3335.808 |
3695.000 |
|
|
|
Employees' Remuneration and Benefits |
430.910 |
374.976 |
368.725 |
|
|
|
Operational Expenses |
860.264 |
758.529 |
690.232 |
|
|
|
Administrative, Selling and General Expenses |
325.217 |
304.660 |
331.814 |
|
|
|
Research and Development Expenses |
49.698 |
56.317 |
62.629 |
|
|
|
Impairment Loss |
15.664 |
0.000 |
0.000 |
|
|
|
Increase / Decrease in Stocks |
96.005 |
71.623 |
0.000 |
|
|
|
Wealth Tax |
1.000 |
1.036 |
0.000 |
|
|
|
TOTAL (B) |
6151.837 |
4902.949 |
5148.400 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
622.325 |
561.629 |
680.543 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
71.418 |
83.348 |
178.999 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
550.907 |
478.281 |
501.544 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
181.338 |
175.102 |
72.977 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
369.569 |
303.179 |
428.567 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
111.597 |
103.043 |
145.767 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
257.972 |
200.136 |
282.800 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
954.522 |
865.393 |
685.083 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Dividend - Proposed |
62.782 |
52.318 |
0.000 |
|
|
|
Corporate Dividend Tax |
10.185 |
8.689 |
0.000 |
|
|
|
Transfer to General Reserve |
50.000 |
50.000 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
1089.527 |
954.522 |
967.883 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
2763.121 |
2459.102 |
3009.923 |
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
694.292 |
314.126 |
625.926 |
|
|
|
Components, Spares Part and Stores |
0.276 |
0.751 |
11.252 |
|
|
|
Capital Goods |
1.559 |
2.379 |
0.861 |
|
|
|
Finished Goods for Resale |
0.000 |
9.348 |
162.513 |
|
|
TOTAL IMPORTS |
696.127 |
326.604 |
800.552 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
24.65 |
21.82 |
31.55 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
31.03.2012 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
4th Quarter |
|
Net Sales |
1678.220 |
1827.920 |
2127.150 |
2270.000 |
|
Total Expenditure |
1544.910 |
1730.750 |
1997.280 |
2077.670 |
|
PBIDT (Excl OI) |
133.310 |
97.170 |
129.870 |
192.330 |
|
Other Income |
6.570 |
14.120 |
6.920 |
7.770 |
|
Operating Profit |
139.880 |
111.290 |
136.790 |
200.100 |
|
Interest |
13.390 |
29.200 |
31.280 |
20.460 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
126.490 |
82.090 |
105.510 |
179.640 |
|
Depreciation |
43.690 |
43.930 |
44.270 |
45.960 |
|
Profit Before Tax |
82.800 |
38.160 |
61.240 |
133.670 |
|
Tax |
21.850 |
10.070 |
15.210 |
37.910 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
60.950 |
28.090 |
46.030 |
95.760 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
60.950 |
28.090 |
46.030 |
95.760 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
3.81
|
3.66
|
4.85 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
5.60
|
5.70
|
7.49 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
9.14
|
7.73
|
12.29 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.16
|
0.14
|
0.22 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.67
|
0.84
|
0.78 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.42
|
2.47
|
3.08 |
LOCAL AGENCY FURTHER INFORMATION
GUJARAT HIGH COURT
Deepak Nitrite Limited
vs Commissioner of Income Tax on 6 May, 2008
Author: D Mehta
Bench: D Mehta, Z
Saiyed
JUDGMENT
D.A. Mehta, J.
1. This Reference involves cross References by the assessee and the
Revenue. The Income-Tax Appellate Tribunal, Ahmedabad Bench 'A' has drawn up a
consolidated statement of case under Section 256(1) of the Income-Tax Act, 1961
('the Act') and referred the following questions:
RA No. 645/Ahd/98 BY ASSESSEE
1. Whether, on the facts and in the circumstances of the case, the
Tribunal was justified in law in holding that the detachable warrants which
authorised the holders to obtain the equity shares of the investee company
after a period of four years from the date of allotment, had a monetary value?
2. Whether, on the facts and in the circumstances of the case, the
Tribunal has any materials on record to hold that the detachable warrants had a
monetary value?
3. Whether, on the facts and in the circumstances of the case, the
Tribunal took into account irrelevant and extraneous material into
consideration to come to a finding that the detachable warrants had a monetary
value?
4. Whether the Tribunal was justified in law in restoring the question
of quantification of loss on the sale of non-convertible portion Part-C of the
debentures of Rs. 50/- each to the Assessing Officer with a direction to take
the cost thereof as reduced by the cost of detachable warrants?
RA NO 656/Ahd/98 BY REVENUE
Whether, on the facts and in the circumstances of the case, the Income Tax
Appellate Tribunal was right in law in allowing the assessee's claim for
depreciation on the factory building and office building of the Sahyadri
Dyestuff and Chemical Units at Pune although the said factory building and
office building were not transferred in favour of the assessee, and the
ownership of the said factory building and office building was not vested with
the assessee?
RA No. 657/Ahd/98 BY REVENUE
Whether, on the facts and in the circumstances of the case, the
Income-tax Appellate Tribunal was right in law in upholding the CIT(A)'s order
allowing deduction under Section 32AB of the Act claimed by the assessee
through a subsequent return of income in lieu of the deduction under Section
32A of the Act claimed by the assessee in the original return of income ?
Whether, on the facts and in the circumstances of the case, the
Income-Tax Appellate Tribunal was right in law in restoring the matter relating
to quantification of loss on the sale of investment to the file of the
Assessing Officer for fresh adjudication and in directing the Assessing Officer
to take the cost price of the non-convertible portion Part-C of the debenture
at Rs. 50/- minus the cost of detachable warrant which was not transferred and
then work out the capital gain/loss on the aforesaid transaction and also in
directing the Assessing Officer to restrict the cost of detachable warrant to
Rs. 2.175 and to restrict the capital gain/loss on the said transaction at
'NIL' ?
The Assessment Year in question is 1989-90, the relevant Accounting
period being Financial Year ended on 31.3.1989. The assessee-company claimed
loss on sale of investments amounting to Rs. 24,43,750/-. The said loss was
disallowed by the Assessing Officer for the reasons stated in Paragraph No. 13
of the Assessment Order dated 28.2.1992. The assessee carried the matter in
Appeal. The Commissioner (Appeals), for the reasons stated in his Order dated
12.11.1992, allowed the claim of loss. Thereupon Revenue preferred Appeal
before the Tribunal and the ground in relation to allowance of loss reads as
under:
On the facts and in the circumstances of the case and in law, the
learned CIT(A) erred:
vi. in allowing the claim of loss of Rs. 24,43,750/- on sale of
non-convertible portion of debentures, which was held by the Assessing Officer
as a colourable device with the sole purpose of reducing the taxable income.
The Tribunal has framed the order in relation to these claims after
recording the facts and contentions by issuing following directions:
Accordingly we will restore the question of quantification of loss on
the sale of investment to the file of the Assessing Officer for fresh
adjudication in accordance with law directing him to take the cost price of the
non convertible portion PART-C of the debentures at Rs. 50/- minus the cost of
detachable warrants which was not transferred to the Unit Trust of India and
then work out the capital gain/loss on the transaction of sale of Part C
non-convertible portion of debentures by the assessee to U.T.I. We may point
out that in case the cost of detachable warrant determined by the AO is more
than Rs. 2,175/- then the same is to be restricted to Rs. 2.175/- and the
capital gain/loss on this transaction may be determined at NIL because the
assessee cannot be worse of having filed appeal against the order of the
Assessing Officer and the Tribunal do not have any power of enhancement as held
by the Supreme Court in the case of State of Kerala v. Vijaya Stores. In the
result this issue is set aside to the file of the AO and is deemed to have been
allowed for statistical purposes.
The aforesaid directions issued by the Tribunal are found to be
unacceptable both by the Assessee and the Revenue, as can be seen from the four
questions raised by the assessee and the question No. 2 raised by Revenue in
Reference Application No. 657/Ahd/98. All the cross questions involve only one
issue and, therefore, are taken up together. The learned Advocate for the
assessee Mr. J.P. Shah and learned Senior Standing Counsel for Revenue Mr. M.R.
Bhatt have been heard.
The facts as recorded by the Assessing Officer and the findings in
relation to the claim of loss read as under:
Loss on sale of investment –
Loss of Rs. 24,43,750/-:
Along with the return, the assessee has filed details of loss incurred
of Rs. 24,43,750/- on sale of investment. The assessee has furnished following
details to explain the loss on sale of investment:
Part C - Non-convertible part only (face value Rs. 50/-each) of Rs. 11,50,000
Convertible Debenture of Deepak Fertilizers and Petrochemicals Corpn. Limited
Cost 5,75,00,000
Sales Price at Rs. 17.875 per
Part C of 11,50,000 Debenture as above 5,50,56,250
Loss 24,43,750
During the course of assessment,it transpired that the assessee company
is one of the promoters of M/s. Deepak Fertilizers and Petrochemicals Corpn.
Ltd. (DFPCL). By virtue of their shareholding, the assessee company were
allotted debentures to the extent of 11,50,000 by DFPCL. The debentures were
divided into three parts, viz. (A), (B) and (C). Part A and B were convertible
whereas Part C was non-convertible. However, as per the terms of the issue, the
shareholders were required to subscribe to the debentures in a composite form.
As per the terms of payment of the Right Issue, Rs. 25/- was payable on
application, Rs. 25/- on allotment and balance Rs. 50/- on First and Final
Call. The Non-convertible portion of Part C of the debenture of face value of
Rs. 50/- was issued with a detachable warrant, attached to it and the holder of
the warrant had a right to apply one Equity Share of Rs. 10/- at such a price
not exceeding Rs. 50/- as may be fixed by the C.C.I., in between the period of
four to six years from the date of allotment of debentures. An option w3as given
to the applicant of the Right Issue to pay the full amount on application or on
allotment. The call money was payable on or before 16.10.1989.
The assessee company made the payment of Rs. 11,50,00,000/- to M/s.
Deepak Fertilizers and Petrochemicals Corpn. Limited as under:
06.01.89
2,87,50,000
On application @ Rs. 25/- for 1150000 debentures
27.03.89
1,87,50,000
Balance @ Rs. 75/- for 250000 debentures
28.03.89
2,62,50,000
Balance @ 75/- for 200000 debentures
29.03.89
2,62,50,000
Balance @ 75/- for 350000 debentures
11,50,00,000
During the course of assessment, the assessee company has furnished
copies of letters sent by M/s. DFPCL to the assessee company, Deepak Nitrite
Limited, wherein it has been stated that the allotment letters were actually
delivered to the assessee company, M/s. Deepak Nitrite Limited. The assessee
company has also furnished the copy of the share transfer from dated 29.3.89,
wherein it has been mentioned that the assessee company M/s. Deepak Nitrite
Ltd., has sold the non-convertible portion of Part 'C' of the debenture to the
Unit Trust of India. In view of it, it was the contention of the representative
of the assessee company that the delivery of these shares/debentures were duly
received by them and thus, the shares were sold by actual delivery to Unit
Trust of India at the price of Rs.47.875 per debenture. It is relevant to
mention here that these debentures were not quoted in the Stock Exchange till
31.3.90 and both the Companies namely DFPCL and M/s. Deepak Nitrite Limited,
are under the same management.
The contention put forth by the assessee company has been duly
considered. However, the loss declared by the assessee due to sale of
investment cannot be accepted for the following reasons:
1. Under the terms and conditions of the Right Issue, there was no
obligation on the part of the assessee to make the full payment before 31.3.89.
However, the assessee company has made the full payment for debentures before
the Final Call. It is not understood that on the one hand, the assessee company
is claiming that the Part C of the debentures were sold since the funds
required for subscribing the debentures were of very high order and beyond its
capacity. However, on the other hand, the assessee company has paid full
amounts on the debenture issue before the final call was made.
2. As per payment schedule, the assessee company has made last payment
on 29.3.89 to its sister concern, DFPCL. The delivery letter of M/s. DFPCL is
also dated 29.3.89. The share transfer form is also dated 29.3.89. It is not
understood as to how these transactions can be completed so early ? It is
highly improbable that the assessee company received debentures by 'actual
delivery' on the same day, i.e. On 29.3.89 and these were transferred to Unit
Trust of India on the same day. The part C of the Debenture issue of DFPCL was
not quoted in the Share market as on the day of sale i.e. 29.3.89. It is thus
clear that the assessee company has shown undue hurry in this transaction
without any justifiable reasons. Thus, the loss declared in the transaction is
contrived loan and not a normal business loss.
3. Part C of the Debenture comprises of two parts:
a) Debenture of face value of Rs. 50/-, and
b) Detachable warrant which entitles the holder of the warrant to
subscribe to the share of DFPCL after four to six years. The shares of M/s.
Deepak Fertilizers and Petrochemicals Corpn. Limited, was listed under
'Specified category' as on date of Right Issue.
4. Thus, though no specific value can be assessed to the detachable
warrant, however, it is an instrument which carries some value. The assessee
company yas detained the detachable warrant with themselves and the same has
not been sold. Thus, the loss as claimed by the assessee in this transaction is
attributable because they have not transferred the detachable warrant to the
seller, i.e. Unit Trust of India.
5. From the above discussion, it is clear that the whole transaction is
colourable. It is hardly believable that a person can get the debenture on the
same day and sell it through a broker on the same day. It is thus clear that it
is a contrived and manipulated loss which has got no nexus with the free
transaction of the market. The loss claimed to be incurred on such manipulated
transaction are not allowable under the provisions of the I.T. Act. Thus, the
assessee's claim of loss on the sale of investment amounting to Rs. 24,43,750/-
is not acceptable and the same is ignored in the computation of income.
6. The Commissioner (Appeals) has merely held that the loss in question
is an allowable loss. The ground of Appeal raised by Revenue which is
reproduced hereinbefore also assails the order of Commissioner (Appeals)
allowing the claim of loss which was held by the Assessing Officer to be a colourable
device with the sole purpose of reducing the taxable income. Therefore, the
only controversy between the parties was whether the loss in question is based
on a genuine transaction or is a colourable transaction only for the purposes
of reducing the taxable income.
7. The Tribunal was therefore expected to record a decision after
appreciating the facts and evidence on record as to whether the Assessing
Officer was justified in holding that the transaction was not a genuine
transaction and the loss was thus disallowable, or whether the Commissioner
(Appeals) was justified in holding that the loss was a result of genuine
transaction. In fact, before the Tribunal, no ground was raised by the Revenue
and none could be raised by the assessee as the Appeal on this Issue was in
favour of the assessee, yet the Tribunal without deciding the Issue raised
before the Tribunal undertook an exercise as to what would be the cost of
detachable warrants for the purposes of working out the correct quantum of
loss. The Tribunal failed to appreciate that at no stage was the Issue of
quantification ever in dispute between the parties. The Assessing Officer had
categorically recorded that for the reasons stated in his order the claim of
loss 'is not acceptable and the same is ignored in the computation of income.'
If the Assessing Officer had not undertaken quantification of the loss, the
Commissioner (Appeals) had not undertaken such an exercise, there was no ground
raised by the Revenue before the Tribunal in the Appeal, the Tribunal on its
own could not have undertaken the said exercise without first deciding the
controversy brought before it by the parties, more particularly, the Appellant.
Merely because during the course of argument some contentions were raised as to
whether detachable warrants had any cost or not was not sufficient for the
Tribunal to embark upon such an exercise in absence of any controversy between
the parties. The Tribunal failed to appreciate that in absence of any exercise
of quantification by the Assessing Officer there was no occasion for the
assessee to carry the matter any further and therefore the said Issue could not
arise out of the order of Commissioner (Appeals). Once that was the position
the Tribunal could not have taken it upon itself to raise the Issue and decide
the same which did not properly arise out of the Order of Commissioner
(Appeals) as no ground could be taken by either side in absence of any findings
by the Commissioner (Appeals).
8. In the aforesaid set of facts and circumstances of the case all the
four questions raised on behalf of the assessee and question No. 2 raised on
behalf of Revenue in Reference Application No. 657/Ahd/98 are required to be
left unanswered leaving it open to the Tribunal to decide the ground of Appeal
raised by the Revenue and determine, in the first instance, whether the loss in
question was a genuine transaction or not.
9. In so far as the solitary question raised in Reference Application
No. 656/Ahd/98 at the instance of Revenue is concerned, it is in agreed
position between the parties that the Tribunal has followed its own decision in
assessee's own case for earlier years. That the said earlier order of the
Tribunal was brought before this Court by way of Reference and the issue stands
concluded by the Judgment in the case of Commissioner of Income-tax v. Deepak
Nitrite Limited.
10. Hence, it is not necessary to set out the facts and contentions in
detail. For the reasons recorded in the earlier Judgment in assessee's own case
the question is answered in the affirmative i.e. in favour of the assessee and
against the Revenue.
11. That leaves Question No. 1 in Reference Application No. 657/Ahd/98,
at the instance of Revenue. The facts in relation to this claim is that
originally the assessee claimed deduction for investment allowance under
Section 32A of the Act in the Return of income filed on 29.12.1989.
Subsequently a revised Return of income tax filed on 31.12.1990 wherein
deduction under Section 32AB of the Act was claimed instead of deduction under
Section 32A of the Act. The stand of Revenue was that claim for investment
allowance had already been granted when the Return was processed under Section
143(1) (a) of the Act and, therefore, there was no question of entertaining the
claim under Section 32AB of the Act. The assessee succeeded before the
Commissioner (Appeals) and Revenue challenged the order made by the
Commissioner (Appeals).
12. The Tribunal has come to the conclusion that the intimation issued
under Section 143(1)(a) of the Act is not an Assessment Order and the assessee
was, therefore, entitled to file revised Return under Section 139(5) of the
Act.
13. It is an admitted fact that the assessee, being a limited Company,
was entitled to file Return of Income on or before 31.12.1989 for the
Assessment Year in question. That original Return of income had actually been
filed on 29.12.1989. Therefore, the assessee was entitled, as a matter of
right, to file revised Return in terms of Section 139(5) of the Act. The
Tribunal was correct in holding that mere intimation under Section 143(1)(a) of
the Act could not be equated with an Assessment Order more particularly when
the Assessing Officer himself has framed Assessment Order under Section 143(3)
of the Act after issuance of Notice under Section 143(2) of the Act. Hence,
there is no error committed by the Tribunal in so far as the Tribunal has come
to the conclusion that the Commissioner (Appeals) had rightly upheld the claim
for deduction under Section 32AB of the Act on the basis of revised Return of
income in lieu of deduction claimed under Section 32A of the Act in original
Return of income.
14. Hence, question No. 1 in Reference Application No. 657/Ahd/98 is
answered in the affirmative i.e. in favour of the assessee and against the
Revenue.
15. The Reference stands disposed of accordingly with no order as to
costs.
|
Check list by info
Agents |
Available in Report (Yes/ No) |
|
|
|
|
Year of Establishment |
Yes |
|
Locality of the Firm |
Yes |
|
Constitution of the Firm |
Yes |
|
Premises details |
No |
|
Type of Business |
Yes |
|
Line of Business |
Yes |
|
Promoter’s Background |
Yes |
|
No. of Employees |
No |
|
Name of Person Contacted |
No |
|
Designation of Contact person |
No |
|
Turnover of Firm for last three years |
Yes |
|
Profitability for last three years |
Yes |
|
Reasons for variation <> 20% |
----- |
|
Estimation for coming financial year |
No |
|
Capital in the business |
Yes |
|
Details of sister concerns |
Yes |
|
Major Suppliers |
No |
|
Major Customers |
No |
|
Payments Terms |
No |
|
Export/ Imports Details (If applicable) |
No |
|
Market Information |
----- |
|
Litigations that the firm/ Promoters Involved in |
Yes |
|
Banking details |
Yes |
|
Banking Facility Details |
Yes |
|
Conduct of the Banking Account |
----- |
|
Buyer visit details |
----- |
|
Financials, if provided |
Yes |
|
Incorporation details is applicable |
Yes |
|
Last Accounts filed at ROC |
Yes |
|
Major Shareholders, if available |
No |
YEAR IN RETROSPECT
This financial year 2010-2011 has laid an excellent foundation for the
Company’s plans for the year ahead. The Company revenue has grown by 24% to
Rs.6604.600 millions when compared to revenues of Rs.5323.600 millions in the previous year. This was largely driven
by strong demand in the domestic market which saw its domestic revenues increase
from Rs.2928.800 millions in FY 2009-10 to Rs.3903.400 millions in FY 2010-11.
The share of overall revenue contributed by the domestic market has increased
from 54% to 58%. While the share of exports to total revenues has reduced to
42% when compared to 46% in the previous year, the gross revenue has increased
significantly on an absolute basis to Rs.1300.300 millions. This portrays
significant expansion in the top line numbers which has crossed the Rs.6000.000
millions mark during the year. The strong growths in revenues were largely
driven by expansion in volumes which grew by 23%.
The Profit before Interest, Depreciation, Impairment and Tax for the
year was Rs.621.700 millions compared to Rs.544.900 millions in previous year
and Profit after Tax for the year was Rs.258.000 millions compared to
Rs.200.100 millions in FY 2009-10. The Earnings per Share was 24.65 in FY
2010-11 compared to 21.82 per share in FY 2009-10.
The global economy encountered has many unsettling events in the past
year. Events like the unrest in the
The Company continues to make significant inroads into
By catering to markets such as
The Company continues to strive for in-house development of its
products. The focus to develop new products, through expenditure of around 1%
of its revenues, has led to successful creation of products like Fuel
Additives, Xylidine Derivatives and Nitro Sulphuric Acid.
The business outlook remain strong as the Company anticipates the
healthy demand for its products to continue. It has drawn up an expansion plan
which will incorporate
The Company has maintained its policy of taking adequate measures to
hedge currency risk as a significant part of its revenues comes from exports.
FINANCE
Effective Working Capital management has always been a key aspect in the
s company’s operations, especially in the last few years. The company has been
able to reduce its interest costs
significantly and debt to equity ratio has been more or less stable, being 0.25 as compared to 0.30 for
the preceding year As a result the cash flows of the Company have improved and ha enough
leveraging ability for its capacity expansion plans at Dahej.
MANAGEMENT
DISCUSSION AND ANALYSIS
ECONOMIC OUTLOOK
Global Economy
The fiscal year 2010-11 began on an encouraging note, as developed
economies have picked up and showed signs of growth. There was steady and
gradual improvement in the economic indicators of the leading world economies
as they were aided by economic stimulus. Though there have been several
challenges like debt restructuring of European countries and political unrest
in the
The Indian economy continues to display remarkable resilience to the
lingering effects of the global recession in 2008-2009, as the GDP continues to
grow at an accelerated rate between 8.5% and 9%. Improved levels of savings and
investment coupled with increased private consumption provide a critical
component to the Indian growth story, contributing significantly towards GDP
growth.
However, higher interest rates and the disconcertingly high levels of
inflation during the second half of FY 2010-11 threatened to hamper the growth
momentum.
The developments on
developed countries is gradually taking root, our trade performance has
improved. Exports have grown at 29.4% to reach USD 184.6 billion, while imports
at USD 273.6 billion have recorded a growth of 17.6% during April-January
period of FY 2010-11, over the corresponding period last year. The current
account deficit is around the 2009-10 level and poses some concerns because of
the composition of its financing.
Real GDP growth was driven mainly by rebound in the industrial and
services sector growth, after a period of noticeable fall in the wake of the
global recession.
However, the near term outlook remains mixed as sharp rise in prices of
commodities and food articles put pressure on emerging nations while the
developed nations will have to deal with effects of withdrawal of fiscal
stimulus.
INDUSTRY STRUCTURE
AND RECENT DEVELOPMENTS
The chemical industry world-wide as well as in
The chemical industry globally was estimated at USD 3.5 trillion in 2009
and is one of the fastest growing sectors in the manufacturing sector. The
industry is also estimated to have grown by 3% annually from 2005 which
signifies the vast opportunities that the industry has to offer. Major markets
for chemicals are North America,
In
OPPORTUNITIES
New Products
R and D as well as new products go hand in hand and the Company has been
able to successfully manufacture new products through its R and D efforts. Some
of the new products developed by the Company last year were Fuel
Additives and Xylidines. These products have been good contributors to
the Company’s top line. In the long run, these products will put the Company on
a higher growth trajectory.
End-User
Industries
The Chemical Industry globally as well as in
New Technology
Cutting edge technology is a need for any company to make progress in
today's cut-throat environment. The Company continues to upgrade its
technologies with the help of its R and D/ Technical team.
COMPANY
PERFORMANCE
During the FY 2010-11 the turnover of the Company has increased to
Rs.6604.600 millions from Rs.5323.600 millions in FY 2009-10. Profit before Tax
for FY 2010-11 was Rs.369.600 millions compared to Rs.303.200 millions in FY
2009-10. Profit after Tax was higher at Rs.258.000 millions in FY 2010-11
compared to Rs.200.100 millions in FY 2009-10.
The Company has performed
exceedingly well during the year, as volumes of products have increased leading
to higher top line and bottom line numbers. Also prices of raw materials have
been fairly stable.
SEGMENTAL
PERFORMANCE
Organic
Intermediates
Revenues for Organic Intermediates stood at Rs.3812.300 millions for FY
2010-11 compared to Rs.2965.600 millions for FY 2009-10.
Organic Intermediate sales were higher due to increase in sales of
recently introduced Fuel Additives and Xylidine
Intermediates.
Inorganic
Intermediates
Revenues for Inorganic Intermediates stood at Rs.1221.100 millions for FY
2010-11 compared to Rs.1121.400 millions for FY 2009-10.
In FY 2010-11 the Inorganic Intermediate segment has operated at almost
full capacity utilisation on the back of increased demand in the domestic
market and increased market share.
Fine and Speciality
Chemicals
Revenues for Fine and Speciality Chemicals stood at Rs.2049.600 millions
for FY 2010-11 compared to Rs.1661.900 millions for FY 2009-10.
Fine and Speciality Chemicals revenue has increased mainly on account of
increase in volume and prices of Colour Intermediate products and
re-introduction of product having application in colour former.
OUTLOOK
The global epicenter of manufacturing has slowly been shifting towards
The Company caters to many end-user industries like paints, dyes,
pigments, etc. The needs of these end-user industries is increasing, which is
slowly and steadily contributing to the Company’s growth as well.
Innovation has been an area that the Company continuously focuses on
through development of new products. This has enabled the Company to
manufacture products like Fuel Additives and Xylidines which provide the
Company higher revenues. Revenues from Fuel Additives and Xylidines were Rs.
630.000 millions and Rs.190.000 millions respectively, for the year and the
Company is confident of strong revenues from these products in the current
financial year as well.
De-bottlenecking initiatives and augmentation at all the Company’s four
existing plants are taking place as planned. The Company has also drawn up
plans for a
The Dahej expansion will require an estimated investment of around
Rs.1500.000 millions and shall be completed by FY 2012-13. The Company will
manufacture a Fine and Speciality Chemical at this facility. For Inorganic
Intermediates segment the Company shall expand the capacity at Nandesari with
an estimated investment of around Rs.500.000 millions and is also likely to be
commissioned by FY2012-13.
The Company continues to make significant progress into difficult
markets like
Lastly, the Company continues to be a process-driven company with
expertise in processes like hydrogenation, chlorination, absorption, etc. It is
due to its capabilities in these processes that the Company is able to
manufacture a variety of different products to meet the growing needs of its
customers. The Company’s strong customer base domestically and globally is a
testament to this fact.
CONTINGENT
LIABILITIES NOT PROVIDED FOR:
|
Particulars |
31.03.2011 (Rs. in millions) |
31.03.2010 (Rs. in millions) |
|
a) In respect of Income Tax matters |
7.743 |
21.482 |
|
b) In respect of Sales Tax / VAT matters |
1.711 |
17.251 |
|
c) In respect of Excise matters |
6.465 |
6.465 |
|
d) Bank Guarantees: |
|
|
|
- Financial |
51.379 |
32.012 |
|
- Performance |
33.959 |
32.967 |
|
e) In respect of disputed liability relating to non-utilisation of industrial plot within specified time frame |
2.547 |
0.000 |
|
f) disputed labour matters |
0.000 |
0.000 |
|
Total |
103.804 |
110.177 |
Note:
In respect of (a) to (c) and (e) to (f) future cash outflow
in respect of contingent liabilities is determinable only on receipt of
judgments pending at various forums/authorities.
FIXED ASSETS:
·
Goodwill
·
·
·
Plant and Machinery
·
Factory and Other
Buildings
·
Roads
·
Office Equipments
·
Furniture and Fixtures
·
Vehicles
WEBSITE DETAILS:
ACHIEVEMENTS
Company has many a firsts to its
credit and these have been earned through its constant endeavour for identification
of products that are required by the end user industries. Company’s R&D
centre in Pune aims to provide specialised products that add value and enhance
every aspect of life.
Mentioned here are some of the
company's achievements:
· Sir P. C. RAY Award for the Best Chemical Manufacturing Unit in India
· Awarded the "Export House" status by the Govt. of India in 1998 and is in force till date.
· The Federation of Indian Chambers of Commerce and Industry (FICCI) award was presented, by the then Prime Minister of India, Mr. I. K. Gujral, to the then Vice-Chairman of DNL Mr. C. K. Mehta 1997-98.
· The company won the Certificate of Merit, at the "ENVIROTECH '93", for sustainable development for adopting environment friendly practices 'in house' for the treatment and disposal of the effluent generated at its various manufacturing facilities, from the CHEMTECH Foundation, India. The company is one of the first to display the figures of the pollution emitted at the gate of each of its manufacturing facilities on a daily basis.
MILESTONES
In a short span of 30 years
company has steadily climbed the steps of excellence and is continuing in its
efforts to reach the top and be the best. Mentioned here are some of its
milestones:
|
Beyond 2000 |
Diversification and Consolidation in
related product areas |
|
1996 |
Catalytic Hydrogenation plant commissioned |
|
1993 |
Merit Certificate from CHEMTECH Foundation |
|
1991 |
Nitro Aromatics plant commissioned |
|
1984 |
Company acquires Dyestuff and
Intermediates Unit |
|
1982 |
Company Promotes Deepak Fertilizers and
Petrochem. Limited |
|
1974 |
P.C. Ray award |
|
1972 |
Sodium Nitrite Plant commissioned |
|
1971 |
Company went Public |
|
1970 |
Company Promoted |
PRESS RELEASE
Deepak Nitrite Limited launches products in the Fuel Additives space
Pune, January 12,
2010: Deepak Nitrite Limited (DNL), a leading manufacturer of organic,
inorganic, fine and specialty chemicals and preferred business partner of
global chemical companies, has announced that it has launched new products in
the fuel additives space.
Fuel additives are
compounds formulated to enhance the quality and efficiency of fuels. Fuel
Additives act as anti-oxidising agents and are useful in the improvement of
cetane thereby reducing emissions, and improving the overall quality of
different types of fuels like gasoline, diesel, aviation turbine fuel and
lubricants.
Internationally,
exponential growth is expected in diesel additives, due to the requirement of
ultra low sulphur diesel and from the increasing use of biodiesel. Fuel
additives in the US are expected to be a $1.2 billion industry by 2012. Since
Indian refineries are net exporters of diesel, the domestic demand for fuel
additives is also likely to go up significantly.
In India, diesel
consumption far exceeds petrol consumption, except in the metros. The emission
regulations for the diesel fuel quality are expected to be significantly
tightened in the coming years. While the Indian regulators currently apply Euro
– I norms, they are expected to transition to Euro II and Euro IV norms in the
near future. This reinforces the opportunity available to DNL through these
products.
The company
anticipates healthy demand for these products and is strategically positioned
to exploit the available opportunity.
By venturing into
development of these products, the company has forward integrated into a new
segment. Due to in house availability of the building blocks and DNL’s
expertise to undertake the complex manufacturing process, the company is
expected to enjoy a significant competitive advantage in the manufacture of
these products. This advantage is further enhanced as the major demand centres
for these products would be in the Asia Pacific region.
DNL has bagged
business from some of the domestic refineries and is bidding for business from
other leading refineries. In the domestic market DNL is the only Indian
manufacturer for many of these products and globally also there are very few
manufacturers of fuel additives. Samples of these products have been approved
by international and domestic customers. The annualised revenues expected from
this segment will be in the range of Rs.750.000 -1000.000 Millions.
DNL has adequate manufacturing capacity in place to meet initial demand
and expects any future growth in demand to be met from its planned capacity
expansion at Dahej.
ABOUT DEEPAK NITRITE LIMITED
Deepak Nitrite
Limited [NSE - DEEPAKNITR, BSE - 506401] is a leading manufacturer of organic,
inorganic, fine and speciality chemicals and is the partner of choice for
several global chemical majors. Headquartered at Pune, DNL is a multi-division
and multi-product company with manufacturing facilities at Nandesari in
Gujarat, Roha and Taloja in Maharashtra, and at Hyderabad in Andhra Pradesh.
The organic
intermediates segment consists of Nitro Aromatic plants and Multi Purpose
Aromatic Amines Plant based on Catalytic Hydrogenation Technology. The
inorganic intermediates segment consists of manufacture of Sodium Nitrite and
Sodium Nitrate by the ammonia oxidation process, where DNL is the largest on
purpose manufacturer. The Fine and Speciality Chemicals segment produces a
broad and innovative range of Effect Chemicals meeting customized needs of
Speciality Producers.
The end user
industries for DNL range from agro-chemicals, dyestuffs, pigments, inks,
whiteners, pharmaceuticals to fuel additives. DNL prioritises R&D
activities and invests over 1% of its annual revenues in this area. It has a
government approved central R&D facility in Pune which has a sophisticated
analytical laboratory, state-of-the-art equipment and advanced facilities. The
company expects to launch new products through its R&D
efforts. As a part
of it’s growth strategy, the company anticipates that it will be able to add
around 15% of its revenue through new products. This will help the company to
broad base its presence in the market segment.
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.53.72 |
|
|
1 |
Rs.86.98 |
|
Euro |
1 |
Rs.70.65 |
INFORMATION DETAILS
|
Report Prepared
by : |
NIT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--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 |
|
59 |
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.