MIRA
INFORM REPORT
|
Report Date : |
26.04.2013 |
IDENTIFICATION DETAILS
|
Name : |
NOCIL LIMITED (w.e.f 29.11.2007) |
|
|
|
|
Formerly Known As : |
NATIONAL ORGANIC CHEMICAL INDUSTRIES LIMITED |
|
|
|
|
Registered
Office : |
Mafatlal House, H T Parekh Marg, Backbay Reclamation, Churchgate,
Mumbai – 400020, |
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Country : |
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Financials (as
on) : |
31.03.2012 |
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|
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|
Date of
Incorporation : |
11.05.1961 |
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Com. Reg. No.: |
11-012003 |
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Capital Investment / Paid-up Capital : |
Rs.1607.870
Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L99999MH1961PLC012003 |
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|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
MUMN00133A mumn10739b |
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PAN No.: [Permanent Account No.] |
AAACN4912E |
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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
: |
Manufacturing and Trading of Rubber Chemicals. |
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|
|
|
No. of Employees
: |
445 [Approximately] |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (55) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 13300000 |
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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 and a reputed company having
satisfactory track. Directors are reported to be experienced and respectable
businessmen. 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 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 – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
|
Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
A+ (Long Term) |
|
Rating Explanation |
Having adequate degree of safety regarding timely servicing of
financial obligation it carry low credit risk. |
|
Date |
January 2012 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter in
the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered/ Head Office/ Export Department : |
Mafatlal House, H T Parekh Marg, Backbay Reclamation, Churchgate,
Mumbai – 400020, |
|
Tel. No.: |
91-22-66364062 |
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Fax No.: |
91-22-66364060/ 56364056 |
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E-Mail : |
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Website : |
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Factory/ Marketing Technical
Service : |
v
Petrochemical
Plant C-37, Trans Thane Creek Industrial Area, Off. Thane Tel : 91-22-27672735 /
66364062 / 66730551 Fax : 91-22-27671865 /
66364060 / 27671862 E-mail: investorcare@nocilindia.com Websites: www.natocil.com v
Rubber
Chemicals Plant C-37, Trans-Thane Creek Industrial Area, Off Thane Belapur Road, Navi, Mumbai -400705, Maharashtra, India.
v
Plastic
Products Plant C-1, MIDC Industrial Area, Post Shivani, District |
DIRECTORS
AS ON 31.03.2012
|
Name : |
Mr. Hrishikesh A. Mafatlal |
|
Designation : |
Chairman |
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|
Name : |
Mr. Rohit Arora |
|
Designation : |
Director |
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|
Name : |
Mr. Berjis Desai |
|
Designation : |
Director |
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|
Name : |
Mr. V. R. Gupte |
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Designation : |
Director |
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|
Name : |
Mr. Vishad P. Mafatlal |
|
Designation : |
Director |
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|
Name : |
Mr. D.N. Mungale |
|
Designation : |
Director |
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|
Name : |
Mr. N. Sankar |
|
Designation : |
Director |
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|
Name : |
Mr. C.R. Gupte |
|
Designation : |
Managing Director |
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|
Name : |
Mr. C. L. Jain |
|
Designation : |
Director - (GIC Nominee) |
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|
Name : |
P. V. Bhide |
|
Designation : |
Director (w.e.f 26.10.2010) |
KEY EXECUTIVES
|
Name : |
V. K. Gupte |
|
Designation : |
Company Secretary |
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|
|
|
Name : |
Mr. S. R. Deo |
|
Designation : |
Vice President - Technical |
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Name : |
Mr. R. M. Desai |
|
Designation : |
Assistant Vice President – Production and Personnel |
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|
Name : |
Mr. N.D. Gangal |
|
Designation : |
Assistant Vice President – QA and Analytical Research |
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|
Name : |
Mr. Rakesh Srivastava |
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Designation : |
Assistant Vice President – Export
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Name : |
Mr. Ashwin Bhende |
|
Designation : |
Assistant Vice President – Technology |
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Name : |
Mr. A. Sivaraman |
|
Designation : |
Assistant Vice President - Purchase |
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|
Name : |
Mr. P. Srinivasan |
|
Designation : |
Vice President - Finance |
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|
Name : |
Mr. C Nandi |
|
Designation : |
Assistant Vice President – Research and Development |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.03.2013
|
Category of
Shareholder |
Total No. of
Shares |
Total
Shareholding as a % of total No. of Shares |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
727040 |
0.45 |
|
|
58224739 |
36.21 |
|
|
58951779 |
36.66 |
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|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
58951779 |
36.66 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
44480 |
0.03 |
|
|
2251092 |
1.40 |
|
|
880 |
0.00 |
|
|
5170161 |
3.22 |
|
|
639518 |
0.40 |
|
|
8106131 |
5.04 |
|
|
|
|
|
|
14997421 |
9.33 |
|
|
|
|
|
|
60047807 |
37.35 |
|
|
16938640 |
10.53 |
|
|
1745202 |
1.09 |
|
|
5000 |
0.00 |
|
|
1740202 |
1.08 |
|
|
93729070 |
58.29 |
|
Total Public shareholding (B) |
101835201 |
63.34 |
|
Total (A)+(B) |
160786980 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
160786980 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Trading of Rubber Chemicals. |
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Products : |
|
PRODUCTION STATUS [As On 31.03.2011]
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
|
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|
Rubber Chemicals and their Intermediaries |
MT |
N.A. |
38950@ |
38264* |
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|
NOTE:
·
@ Installed capacity is as certified by the
management.
·
* Includes 5358 MT (previous year 5,174 MT)
converted for the Company by third parties.
GENERAL INFORMATION
|
No. of Employees : |
445 [Approximately] |
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Deloitte Haskins and Sells Chartered Accountants |
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Solicitors and Advocates : |
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Subsidiaries : |
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Related Parties : |
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CAPITAL STRUCTURE
As on 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1200000000 |
Equity Shares |
Rs.10/- each |
Rs.12000.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
160786980 |
Equity Shares |
Rs.10/- each |
Rs.1607.870
Millions |
RIGHTS ATTACHED TO EQUITY SHARES
The company has a
single class of equity shares. Each shareholder is eligible for one vote per share
held. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders. In the event of liquidation, the equity
shareholders are eligible to receive the assets of the company, in proportion
to their shareholding.
SHAREHOLDERS
HOLDING MORE THAN 5% EQUITY SHARES IN THE COMPANY ARE SET OUT BELOW:
|
|
As on 31st
March, 2012 |
As on 31st
March, 2011 |
|
Mishapar
Investments Limited |
|
|
|
No. of shares |
10536300 |
10536300 |
|
% Holding |
6.55 |
6.55 |
|
Arvi Associates Private
Limited |
|
|
|
No. of shares |
10867990 |
10813930 |
|
% Holding |
6.76 |
6.73 |
|
No. of shares
reserved for issuance as employee stock options |
2796200 |
1823200 |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1607.870 |
1607.870 |
1607.870 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1720.503 |
1492.720 |
1271.662 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
3328.373 |
3100.590 |
2879.532 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
804.588 |
0.000 |
0.000 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
167.107 |
|
|
TOTAL BORROWING |
804.588 |
0.000 |
167.107 |
|
|
DEFERRED TAX LIABILITIES |
219.016 |
209.582 |
216.735 |
|
|
|
|
|
|
|
|
TOTAL |
4351.977 |
3310.172 |
3263.374 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
753.185 |
784.897 |
793.407 |
|
|
Capital work-in-progress |
1265.533 |
455.974 |
236.639 |
|
|
|
|
|
|
|
|
INVESTMENT |
250.558 |
248.313 |
248.313 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1139.151
|
1066.519
|
826.547
|
|
|
Sundry Debtors |
1037.949
|
866.753
|
861.138
|
|
|
Cash & Bank Balances |
350.676
|
432.528
|
503.096
|
|
|
Other Current Assets |
1.007
|
0.000
|
0.000
|
|
|
Loans & Advances |
703.829
|
599.924
|
764.366
|
|
Total
Current Assets |
3232.612
|
2965.724
|
2955.147
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
675.966
|
536.418
|
410.628
|
|
|
Other Current Liabilities |
166.506
|
30.625
|
244.734
|
|
|
Provisions |
307.439
|
302.068
|
314.770
|
|
Total
Current Liabilities |
1149.911
|
1144.736
|
970.132
|
|
|
Net Current Assets |
2082.701
|
1820.988
|
1985.015
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
4351.977 |
3310.172 |
3263.374 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
4833.596 |
4485.889 |
4359.864 |
|
|
|
Other Income |
213.769 |
135.195 |
100.905 |
|
|
|
TOTAL (A) |
5047.365 |
4621.084 |
4460.769 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Manufacturing and Other Expenses |
-- |
4203.434 |
3893.223 |
|
|
|
Purchase of Trading Products |
26.489 |
21.567 |
19.817 |
|
|
|
Cost of Materials Consumed |
2992.983 |
-- |
-- |
|
|
|
Employee Benefits Expense |
344.151 |
-- |
-- |
|
|
|
Other Expenses |
1193.482 |
-- |
-- |
|
|
|
Diminution in Value of Investment, Reversed |
(2.245) |
-- |
-- |
|
|
|
Increase / Decrease in Stock |
(70.868) |
(165.130) |
(31.308) |
|
|
|
TOTAL (B) |
4483.992 |
4059.871 |
3881.732 |
|
|
|
|
|
|
|
|
Less |
PROFIT
/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
563.373 |
561.213 |
579.037 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
2.829 |
1.245 |
1.473 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
560.544 |
559.968 |
577.564 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
89.934 |
79.851 |
76.253 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS)
BEFORE TAX (E-F) (G) |
470.610 |
480.117 |
501.311 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
130.704 |
146.936 |
161.043 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS)
AFTER TAX (G-H) (I) |
339.906 |
333.181 |
340.268 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
NA |
438.570 |
211.169 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend on Equity Shares |
NA |
96.472 |
96.472 |
|
|
|
Corporate tax on dividend |
NA |
15.651 |
16.395 |
|
|
BALANCE CARRIED
TO THE B/S |
NA |
659.628 |
438.570 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
1943.973 |
1780.836 |
1834.441 |
|
|
TOTAL EARNINGS |
1943.973 |
1780.836 |
1834.441 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
1284.759 |
1338.418 |
1203.988 |
|
|
|
Stores & Spares |
1.470 |
4.429 |
0.826 |
|
|
|
Capital Goods |
7.794 |
5.674 |
7.213 |
|
|
TOTAL IMPORTS |
1294.023 |
1348.521 |
1212.027 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) Per Share (Rs.) |
2.11 |
2.07 |
2.12 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 |
30.09.2012 |
31.12.2012 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
1282.300 |
1273.200 |
1140.700 |
|
Total Expenditure |
1211.400 |
1222.200 |
1078.000 |
|
PBIDT (Excl OI) |
70.900 |
51.000 |
62.700 |
|
Other Income |
74.100 |
46.200 |
20.200 |
|
Operating Profit |
145.000 |
97.200 |
82.900 |
|
Interest |
02.800 |
05.700 |
08.600 |
|
PBDT |
142.200 |
91.500 |
74.300 |
|
Depreciation |
17.800 |
18.000 |
17.700 |
|
Profit Before Tax |
124.400 |
73.500 |
56.600 |
|
Tax |
37.500 |
16.000 |
02.500 |
|
Profit After Tax |
86.900 |
57.500 |
54.100 |
|
Net Profit |
86.900 |
57.500 |
54.100 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
6.73
|
7.21
|
7.63
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
9.74
|
10.70
|
11.50
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
11.80
|
12.80
|
13.37
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.14
|
0.15
|
0.17
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.24
|
0.00
|
0.05
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.81
|
2.59
|
3.05
|
LOCAL AGENCY FURTHER INFORMATION
|
Check List by
Info Agents |
Available in
Report (Yes / No) |
|
1) Year of Establishment |
Yes |
|
2) Locality of the firm |
Yes |
|
3) Constitutions of the firm |
Yes |
|
4) Premises details |
No |
|
5) Type of Business |
Yes |
|
6) Line of Business |
Yes |
|
7) Promoter’s background |
Yes |
|
8) No. of employees |
Yes |
|
9) Name of person contacted |
No |
|
10) Designation of contact person |
No |
|
11) Turnover of firm for last three years |
Yes |
|
12) Profitability for last three years |
Yes |
|
13) Reasons for variation <> 20% |
-- |
|
14) Estimation for coming financial year |
No |
|
15) Capital in the business |
Yes |
|
16) Details of sister concerns |
Yes |
|
17) Major suppliers |
No |
|
18) Major customers |
No |
|
19) Payments terms |
Yes |
|
20) Export / Import details (if applicable) |
Yes |
|
21) Market information |
-- |
|
22) Litigations that the firm / promoter involved in |
-- |
|
23) Banking Details |
Yes |
|
24) Banking facility details |
Yes |
|
25) Conduct of the banking account |
-- |
|
26) Buyer visit details |
-- |
|
27) Financials, if provided |
Yes |
|
28) Incorporation details, if applicable |
Yes |
|
29) Last accounts filed at ROC |
Yes |
|
30) Major Shareholders, if available |
No |
|
31) PAN
of Proprietor/Partner/Director, if available |
No |
|
32) Date
of Birth of Proprietor/Partner/Director, if available |
No |
|
33) Voter
ID No of Proprietor/Partner/Director, if available |
No |
|
34) External Agency Rating, if available |
Yes |
PERFORMANCE OF THE COMPANY:
The year was most
challenging for the entire manufacturing sector. The business sentiment was most
often negative and at best stable. The adverse news about some countries of
European Union (EU) coupled with slowdown in the Automobile sector in India as
well as most major markets in the world resulted in considerable fluctuations
in supply of rubber chemicals to key customer accounts. Despite this, the
turnover of the Company for the year touched Rs.5130.000 Millions as compared
to Rs.4800.000 Millions in the previous year, representing an increase of about
7%. The production of rubber chemicals and their intermediates was 37169 MT for
the year as against 38264 MT, representing a marginal decrease of about 3% as
compared to the previous year. The growth in turnover, in volume terms in the
domestic market was more or less flat as compared to the previous year. This
was primarily due to the production cuts effected by their customers on account
of the high and volatile price of natural and synthetic rubber for most part of
the year. Continuing dumping and large imports of Rubber Chemicals at unrealistic
prices also contributed to the lack of growth.
As mentioned last
year, they initiated a Mid Term Review about the continued Dumping, more
particularly concerning Imports sourced from Korea and also a Safeguards Petition
for one of the main products of the Company against its imports from various
countries. Whilst they are pleased to inform you that the concerned Authorities
have upheld their contention about the dumped and injurious imports and have
imposed Anti Dumping Duty/Safeguard Duty on the key products. However, due to
further intensified aggressive pricing/dumping adopted by the concerned
competitors, the expected improvement in the domestic off take and margins did
not materialize. As a result, their capacity utilization for the year suffered
and was in fact, somewhat lower than that of previous year.
Further, unlike
during the previous slowdown in 2008, crude oil price has not shown any signs
of softening and even today its price is over US $100 per barrel. Consequently,
this has pushed up the prices of practically all their major inputs. Moreover,
on some of the inputs, anti dumping and safeguard duties have also been levied.
General inflationary conditions have added to this burden. To mitigate the effect
of this burden, even though only partially, the Management of the company
undertook various initiatives including that of better managed utilities
through a more economic source of fuel (Natural Gas). Besides, efforts were
also made to recover some of these cost increases by way of price corrections;
however, these were only partially successful due to the continued stiff
competition from various international competitors more particularly from China
and Korea at totally unrealistic price levels.
EXPORTS:
The adverse impact
of the economic slow-down in the European economies due to sovereign debt
related issues and the severe effect of the natural disaster in Japan affected
overall Indian Industry export scenario. The Company however, managed to
maintain more or less similar volumes as those of the previous year. The export
sales turnover of Rs.1950.000 Millions was higher by about 8.20% as compared to
Rs. 1800.000 Millions achieved in the previous year. The downgrading of some of
the European Countries by the ratingagencies is likely to extend the
recessionary trend further and some experts predict a larger and sustained weak
trend in the global economy as a whole. The company has however made efforts to
tap newer markets due to which, despite these adverse conditions, they hope to
achieve at least some growth in Export Sales Volumes in the coming year.
BUSINESS SCENARIO:
The global
economic scenario has shown some mixed signs and they therefore need to watch
the developments in this regard carefully in the coming year. The Rubber
Chemicals market remains competitive and continued dumping by international
suppliers into India remains a matter of serious concern. Company’s competitors
from China, Korea and the European region continue to be very aggressive in low
pricing of their products in the Indian Market. The Company, in response to
this aggressive approach, decided to selectively participate in markets where
the prices were at less unrealistic levels. The Management, as a prudent policy
feels, it is better to stay away rather than participate in contracts which are
highly loss making propositions. Despite these problems, the Board is pleased
to convey that most of the domestic and international tyre customers continue
to do healthy business with the Company for their regular requirements of
rubber chemicals. The Company enjoys a very good acceptance of its products
with all its customers and they in turn have accepted the status of the Company
as a dependable manufacturer of rubber chemicals with very high technological
capabilities. The setting up of the new state of the art plant at Dahej will
not only strengthen their relationship with all their major customers but is
also expected to improve their competitiveness and their market share in the
overall rubber chemicals market. Certain recent international developments
which have resulted in the restructuring of some of the capacities and closing
down of operations by some of the company’s competitors are likely to bring
down the surplus supply of a few important rubber chemicals. This, they hope
will correct the existing unrealistic pricing scenario for these products. They
would like to assure their shareholders that the company will continue to
strike for improving its margins and its market share despite all odds with
continued improvements in its manufacturing process, further optimizing its
product mix and by offering a wider range of products to its customers through
its technological strengths.
PROJECT:
As mentioned in
their last annual report, the new Project at Dahej is nearing completion and is
expected to go on-stream by August 2012. They are pleased to inform you that
the total expenditure committed on this project is well within the original
sanctioned amount of Rs.2500.000 Millions. They are also proud to mention that
the entire project, right from the conceptualization stage to execution, was
executed by the company’s own team with no foreign technical know-how. Further
you would be happy to learn the debt component of the project will be less than
the originally earmarked amount. Preliminary discussions have already been
initiated by the company’s Management with Major Domestic and International
tyre companies for the product approvals necessary for the new Dahej plant.
They inform you that the response from these customers has been very positive.
MANAGEMENT
DISCUSSION AND ANALYSIS:
ECONOMIC REVIEW:
The Indian Economy
on account of inflationary pressures coupled with rising interest rates
experienced a lower growth in comparison to the previous years. The sensex
witnessed a dip of 10% - 11% in comparison to the levels which prevailed at the
beginning of the financial year. On the other hand, the price of Crude Oil did
not experience such corresponding dips. India, being a large importer of Oil,
suffered heavily and this along with various other negative macroeconomic
factors resulted in significant depreciation of the Rupee vis-a-vis US Dollar.
Over the financial year the Rupee has depreciated by about 20% - 25%. The
ballooning trade deficit and the current account deficit also put significant
pressure on the exchange rate. Adverse news from EU also affected growth in
that market. In light of the above, RBI has taken the first step in cutting
down key interest rates which are expected to help the Indian economy.
RUBBER CHEMICALS
INDUSTRY:
In view of the
slow- down on the economic front the world over and its corresponding impact on
Automobile / Tyre Industry across the globe, the rubber chemicals business
experienced very challenging conditions during the year. With high natural /
synthetic rubber prices and the slowing down in end-product demand, customers,
both from the Tyre as well as the Non-Tyre segments, undertook production cuts
at periodic intervals. This did impact the demand for rubber chemicals
adversely, as the same is directly dependent on performance of the rubber
processing industries. The resultant mismatch in supply and demand of certain
key rubber chemicals, impacted their selling prices, resulting in pressure on
margins. Cost increases on account of various inputs for rubber chemicals,
aggravated the situation further. Despite this, the Company managed to retain
its volumes at the previous year’s levels on both domestic as well as on the
international front, through its wide range of products and well diversified
customer base.
INDUSTRY STRUCTURE AND DEVELOPMENTS:
The Company is
engaged in the manufacture and sale of rubber chemicals and has its
manufacturing facilities in the Trans Thane Creek Industrial area at Navi Mumbai,
Maharashtra. The Company is currently in the final stage of completing its
expansion project at Dahej in the State of Gujarat. In addition, the company
has its wholly owned subsidiary viz. PIL Chemicals Private Limited, having
dedicated ancillary manufacturing facilities in the GIDC industrial area at
Vapi, Gujarat. The Company’s regional sales offices are located in Mumbai,
Delhi, Chennai and Kolkata. The setting up of additional production facilities
will enable the Company to capture a higher market share out of additional
production volumes. The products manufactured by the Company are used by the
tyre industry and all other segments of the rubber-processing industry. These
chemicals not only accelerate the vulcanisation of rubber, but also extend the
life of rubber products in addition to improving their performance.
BUSINESS OUTLOOK:
The Company is
continually working towards achieving further improvements in the quality of
its products as well as in technological and operational efficiencies of its
manufacturing processes. It also strives to develop new products to improve its
participation in the market and enlarge its product range. The company is also,
through its strong research initiatives, engaged in developing new products
which would meet the emerging needs of its customers and the environmental
challenges of the future.
The objective
behind the expansion project at Dahej is to create a long term commercial and
technological advantage for their business. The first phase of the project is
in the final stage of completion and is expected to go on-stream by August
2012. The additional capacity will enable the Company to participate more
aggressively due to the cost competitiveness arising out of a vastly superior
process technology, which will enable it to capture additional market share.
The presence of multiple input sources around Dahej, in addition to the
logistical advantage of this location, will further enhance the cost
competitiveness and will also enable the Company to mitigate the risk arising
out of single-source dependence for certain inputs. Thus, the plant location in
Dahej is also expected to give much greater opportunity to the Company to
improve its operating margins for new products which are proposed to be
developed through advanced in-house technology.
The recent news of
restructuring of rubber chemicals business of some international competitors
and the closing down of capacities of certain key intermediates and products by
some others is expected to largely neutralise the imbalance in the global
supply demand scenario of rubber chemicals in the medium term. The pricing
scenario of rubber chemicals, accordingly, is likely to undergo a positive
change with the reduction in the global supply position. However, in the short term,
due to the pressure of liquidating inventories and quick exit from rubber
chemical business by some competitors, they are likely to experience
unrealistic low prices from them. The Indian Government authorities have also
justifiably imposed Anti-dumping duties and Safeguard Duty on certain key
products, which to some extent, protects domestic pricing from dumped imports.
Besides, the Company will continue to strive for improvement in the market
share of rubber chemicals by optimising the product mix and offering wide range
of products to its customers. The Company is one of the few players in the
rubber chemicals business, offering such a wide range of products to the end
users. On the other hand, the continuing aggressive export promotion policies of
China and Korea, aided by the undervalued Chinese currency and the continued
dumping of unrealistically priced rubber chemicals from China, S. Korea and
Europe into India, continues to remain a matter of concern as these may
adversely impact their capacity utilisation and margins.
PERFORMANCE OF THE
YEAR:
The adverse
business sentiments coupled with slowdown in the domestic Automobile sector
resulted in fluctuating demand for rubber chemicals from key customer accounts.
The continued dumping by their competitors from China, Korea and Europe further
aggrevated this situation. Despite this, they succeeded in maintaining their
volumes more or less of the same levels as in the previous year. The turnover
witnessed an increase of nearly 7% in value terms with an improvement in
selling prices of some of their products. These were necessitated on account of
steep increase in their input costs, which to some extent, they managed, to
pass on to the customers. Their Export business too has not been able to
witness any growth due to the uncertain and fragile nature of the economic
situation in the developed markets, more particularly in the European markets.
CONTINGENT
LIABILITIES IN RESPECT OF:
|
Particulars |
31.03.2011 (Rs. in millions) |
31.03.2010 (Rs. in millions) |
|
Central excise duty and Customs duty demands disputed |
15.342 |
10.563 |
|
Income tax demands disputed |
281.688 |
381.681 |
|
Sales tax demands disputed |
79.487 |
79.487 |
|
Claims against the Company not acknowledged as debts |
20.288 |
21.055 |
|
Total |
396.805 |
492.786 |
FIXED ASSETS
·
Land Leasehold
·
Building
·
Plant and Machinery
·
Office Equipments
including computers
·
Furniture, Fixtures and
Equipment
·
Vehicle
·
Patents
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 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.54.17 |
|
|
1 |
Rs.82.99 |
|
Euro |
1 |
Rs.70.62 |
INFORMATION DETAILS
|
Report Prepared
by : |
TPT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
55 |
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.