MIRA INFORM REPORT
|
Report Date : |
08.05.2013 |
IDENTIFICATION DETAILS
|
Name : |
CLARIANT CHEMICALS (INDIA) LIMITED |
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Formerly Known
As : |
COLOUR – CHEM LIMITED |
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Registered
Office : |
Kolshet Road, P.O. Sandoz Baug, Thane – 400607, Maharashtra |
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Country : |
India |
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Financials (as
on) : |
31.12.2012 |
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Date of
Incorporation : |
27.12.1956 |
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Com. Reg. No.: |
11-010806 |
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Capital Investment
/ Paid-up Capital : |
Rs. 266.607
Million |
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CIN No.: [Company Identification
No.] |
L24110MH1956PLC010806 |
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Legal Form : |
A Public Limited Liability company. The company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Manufacturing of Dyes and Chemicals. |
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No. of Employees
: |
1077 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa (72) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
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Maximum Credit Limit : |
USD 20000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a part of ‘Clariant Group’. It is an old, well-established
and a reputed company having an excellent track record. The company enjoys comfortable financial risk profile. It operates on
its own fund. Directors are reported to be well-experienced and knowledgeable
businessmen. There appears some dip in the profitability of the company during
2012. However, trade relations are trustworthy. Business is active. Payment
terms are regular and as per commitment. The company can be considered excellent for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – 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 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
Long term bank facilities : AAA |
|
Rating Explanation |
Highest degree of safety and lowest credit risk |
|
Date |
June 25, 2012 |
|
Rating Agency Name |
CARE |
|
Rating |
Short term bank facilities : A1+ |
|
Rating Explanation |
Very strong degree of safety and lowest credit risk |
|
Date |
June 25, 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 Office : |
Kolshet Road, P.O. Sandoz Baug, Thane – 400607, Maharashtra, India |
|
Tel. No.: |
91-2225-315111/12/25315412 |
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Fax No.: |
91-2225-315303 |
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E-Mail : |
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Website : |
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Factory
1 : |
113/114, MIDC Industrial Area, P O Dhatav, Roha, District Raigad – 402116, Maharashtra, India |
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Factory
2 : |
Kudikada. SIPCOT, P.O. Cuddalore – 607005, Tamilnadu, India |
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Factory
3 : |
Singadiovakkam Village, Attuputtur Post Enathur, Kanchipuram – 631561, Tamilnadu, India |
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Factory
4 : |
Kolshet Road, Thane – 400607, Maharashtra |
DIRECTORS
As on: 31.03.2012
|
Name
: |
Mr. Rajendra Ambalal Shah |
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Designation
: |
Chairman cum Managing Director |
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Address
: |
Panorama, |
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Date
of Birth/ Age: |
07.07.1931 |
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Date
of Appointment : |
19.04.2007 |
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Name : |
Mr. Peter Palm |
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Designation : |
Vice Chairman and Management Director |
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Name : |
Mr. Deepak Parikh |
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Designation : |
Managing Director |
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Name
: |
Mr. Bansidhar Sunderlal Mehta |
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Designation
: |
Director |
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Address
: |
C – 37, Fifth Floor, |
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Date
of Birth/ Age: |
19.09.1935 |
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Date
of Appointment : |
27.07.2006 |
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Name : |
Mr. Diwan Aruhn Nanda |
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Designation : |
Director |
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Name : |
Mr. Henri Schloemer |
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Designation : |
Director |
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Name
: |
Mr. Alfred Muench |
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Designation
: |
Director |
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Name
: |
Mr. Philipp Hammel |
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Designation
: |
Director |
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KEY EXECUTIVES
|
Name
: |
Mr. B L Gaggar |
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Designation
: |
Director in Finance and Company Secretary |
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Audit Committee: |
·
Mr. R A Shah, Chairman ·
Mr. Diwan A Nanda ·
Mr. Henri Scholmer |
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|
Investors’ Grievance Committee |
·
Mr. Diwan A Nanda, Chairman ·
Mr. Peter Palm |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on: 31.03.2013
|
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
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|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
|
|
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|
16902080 |
63.40 |
|
|
16902080 |
63.40 |
|
Total
shareholding of Promoter and Promoter Group (A) |
16902080 |
63.40 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
1686282 |
6.32 |
|
|
16192 |
0.06 |
|
|
443777 |
1.66 |
|
|
202118 |
0.76 |
|
|
2348369 |
8.81 |
|
|
|
|
|
|
803141 |
3.01 |
|
|
|
|
|
|
5773524 |
21.66 |
|
|
642955 |
2.41 |
|
|
190676 |
0.72 |
|
|
172214 |
0.65 |
|
|
16612 |
0.06 |
|
|
1850 |
0.01 |
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|
7410296 |
27.79 |
|
Total Public
shareholding (B) |
9758665 |
36.60 |
|
Total (A)+(B) |
26660745 |
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) |
26660745 |
0.00 |
%20LIMITED%20-%20219307%2008-May-2013_files/image010.gif){kind=small}
%20LIMITED%20-%20219307%2008-May-2013_files/image011.gif){kind=small}
%20LIMITED%20-%20219307%2008-May-2013_files/image012.gif){kind=small}
BUSINESS DETAILS
|
Line of Business : |
Manufacturing of Dyes and Chemicals |
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Products : |
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PRODUCTION STATUS (AS ON 31.12.2011)
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity M. Tonnes # |
Actual Production M. Tonnes * # |
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|
Intermediates and Colours |
M.T |
NA |
12002 |
9570 |
|
Dyes and specialty chemicals |
M.T |
NA |
74986 |
49044 |
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|
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|
* Excluding captive Consumption
# At different Concentrations
NOTES:
·
The classification between
the class of goods and the installed capacities have been certified by the
Vice -Chairman and Managing Director on
which the auditors have placed reliance, this being a technical matter.
·
Licensed capacity per annum not indicated
due to the abolition of Industrial Licenses as per Notification No. 477(E)
dated 25th July, 1991 issued under The Industries (Development and Regulations)
Act 1951.
GENERAL INFORMATION
|
No. of Employees : |
1077 (Approximately) |
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|
|
|
Bankers : |
·
Standard Chartered Bank Limited Branch M G Road, Fort, Mumbai, Maharashtra, India ·
Citi Bank N.A., Branch M G Road, Fort, Mumbai, Maharashtra, India ·
HSBC Bank, Branch M G Road, Fort, Mumbai, Maharashtra, India |
|
Banking
Relations : |
-- |
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Auditors : |
|
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Name : |
Deloitte Haskins and Sells Chartered Accountants |
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Solicitors : |
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Name : |
Crawford
Baylor and Company Solicitors
and Advocates |
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Holding Company: |
·
EBITO Chemiebeteiligungen AG ·
Clariant International AG ·
Clariant Participations AG |
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Ultimate Holding
Company: |
·
Clariant AG, Switzerland |
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Subsidiary : |
· Chemtreat Composites India Private Limited |
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Fellow Subsidiaries : |
· Clariant (Australia) Pty. Limited · Clariant (Canada) Inc. · Clariant (China) Limited · Clariant (Colombia) SA · Clariant (Egypt) SAE · Clariant (Gulf) FZE · Clariant (Japan) K.K. · Clariant (Korea) Limited · Clariant (Malaysia) Sdn Bhd · Clariant (Maroc) S.A. · Clariant (Mexico) S.A. de C.V. · Clariant (Pakistan) Limited · Clariant (Perú) S.A. · Clariant (Singapore) Pte. Limited · Clariant (Thailand) Limited · Clariant (Tianjin) Limited · Clariant (Uruguay) SA · Clariant Chemicals (China) Limited · Clariant Chemicals (Taiwan) Company Limited · Clariant Corporation · Clariant Ibérica Producción S.A. · Clariant Masterbatch Ibérica S.A. · Clariant Masterbatches (Deutschland) GmbH · Clariant Masterbatches (Malaysia) Sdn Bhd · Clariant Masterbatches (Italia) S.p.A. · Clariant Masterbatches (Saudi Arabia) Limited · Clariant Masterbatches (Shanghai) Limited · Clariant Masterbatches (Thailand) Limited · Clariant Masterbatches Benelux SA · Clariant Masterbatches Ireland Limited · Clariant Masterbatches Norden AB · Clariant Pigments (Korea) Limited · Clariant Pigments (Tianjin) Limited · Clariant Prodotti (Italia) S.p.A. · Clariant Produkte (Deutschland) GmbH · Clariant Produkte (Schweiz) AG · Clariant S.A. · Clariant Southern Africa (Pty.) Limited · Clariant Specialty Chemicals (Zhenjiang) Company Limited · Clariant Trading (China) Limited · Clariant (Türkiye) Boya ve Kimyevi Maddeler Sanayi ve Ticaret A.S. · PT Clariant Indonesia · The Egyptian German Company for Dyes and Resins SAE (Egcodar SAE) |
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CAPITAL STRUCTURE
As on: 31.12.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
30000000 |
Equity Shares |
Rs.10/- each |
Rs.300.000 Million |
|
|
|
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|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
26660745 |
Equity Shares |
Rs.10/- each |
Rs. 266.607
Million |
|
|
|
|
|
RECONCILIATION OF
NUMBER OF EQUITY SHARES OUTSTANDING AS AT THE BEGINNING AND AT THE END OF THE
YEAR
|
|
As on 31.12.2012 |
|
|
|
Number |
Rs. In Millions |
|
Equity shares : |
|
|
|
Outstanding as at the beginning of the year |
26660745 |
266.607 |
|
Add : Issued during the year |
|
|
|
Outstanding as at the end of the year |
26660745 |
266.607 |
SHAREHOLDERS HOLDING
MORE THAN 5% EQUITY SHARES
|
|
As on 31.12.2012 |
|
|
Name of Shareholder |
Number |
Percentage |
|
EBITO Chemiebeteiligungen AG. * |
8167080 |
30.63% |
|
Clariant International AG. * |
6075000 |
22.79% |
|
Clariant Participations AG. * |
2660000 |
9.98% |
NOTE: * Subsidiaries of the ultimate holding company Clariant AG, Switzerland.
The company has not allotted any equity shares for consideration other than cash, bonus shares, nor have any shares been bought back during the period of five years immediately preceding the Balance sheet date.
Rights, preferences
and restrictions attached to the shares
The Company has only one class of equity share having a par value of Rs.10/- per share. Each shareholder has the following voting rights (i) On a show of hands: one vote for a member present in person and (ii) On a poll: one vote for each equity share registered in the name of the member or held by the beneficial owner. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend. In the event of winding up, the liquidator may, with the sanction of a special resolution of the company and any other sanction required by the Act, divide amongst the members, in specie or kind, the whole or any part of the assets of the company, whether they shall consist of property of the same kind or not.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2012 |
31.12.2011 |
31.12.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
266.607 |
266.607 |
266.607 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
4748.549 |
4587.653 |
3404.351 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
5015.156 |
4854.26 |
3670.958 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
0.000 |
0.000 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
10.528 |
|
|
TOTAL BORROWING |
0.000 |
0.000 |
10.528 |
|
|
DEFERRED TAX LIABILITIES |
53.786 |
45.643 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5068.942 |
4899.903 |
3681.486 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1743.096 |
1704.872 |
1355.782 |
|
|
Capital work-in-progress |
91.498 |
130.670 |
198.787 |
|
|
Fixed assets held for disposal |
0.000 |
0.000 |
37.870 |
|
|
|
|
|
|
|
|
INVESTMENT |
2346.523 |
2665.126 |
1918.391 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
10.808 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1623.251
|
1155.943 |
907.262
|
|
|
Trade receivable |
1483.422
|
1341.222 |
1256.093
|
|
|
Cash & Bank Balances |
142.739
|
284.455 |
209.148
|
|
|
Other Current Assets |
33.741
|
48.776 |
0.000
|
|
|
Loans & Advances |
749.768
|
651.167 |
789.574
|
|
Total
Current Assets |
4032.921
|
3481.563 |
3162.077 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1845.541
|
1505.697 |
1664.315 |
|
|
Other Current Liabilities |
411.857
|
426.410 |
510.659
|
|
|
Provisions |
887.698
|
1150.221 |
827.255
|
|
Total
Current Liabilities |
3145.096
|
3082.328 |
3002.229 |
|
|
Net Current Assets |
887.825
|
399.235 |
159.848 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5068.942 |
4899.903 |
3681.486 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.12.2012 |
31.12.2011 |
31.12.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
10962.821 |
9789.237 |
9747.128 |
|
|
|
Other Income |
191.420 |
220.902 |
312.345 |
|
|
|
TOTAL (A) |
11154.241 |
10010.139 |
10059.473 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of materials consumed |
5472.388 |
|
|
|
|
|
Purchase of stock-in-trade |
1674.802 |
1316.838 |
|
|
|
|
Changes in inventories |
(291.025) |
(127.216) |
|
|
|
|
Employee benefits expenses |
906.147 |
733.043 |
|
|
|
|
Other expenses |
1830.642 |
1627.768 |
|
|
|
|
Exceptional items |
(92.047) |
(2413.320) |
|
|
|
|
TOTAL (B) |
9500.907 |
5862.470 |
8235.001 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1653.334 |
4147.669 |
1824.472 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
14.152 |
12.335 |
2.320 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1639.182 |
4135.334 |
1822.152 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
216.035 |
181.243 |
168.916 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE TAX
(E-F) (G) |
1423.147 |
3954.091 |
1653.236 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
410.143 |
913.701 |
529.086 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
1013.004 |
3040.390 |
1124.150 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
General reserve |
101.300 |
304.039 |
112.415 |
|
|
|
Interim dividend |
266.607 |
799.822 |
266.607 |
|
|
|
Proposed dividend (Final) |
466.563 |
799.822 |
533.215 |
|
|
|
Corporate tax on dividend
(Interim & Final) |
118.938 |
259.502 |
132.840 |
|
|
|
Corporate tax on dividend of
Previous period |
0.000 |
(2.058) |
(1.545) |
|
|
BALANCE CARRIED
TO THE B/S |
1322.644 |
1263.048 |
383.785 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export (F.O.B.) |
2574.226 |
|
|
|
|
|
Others (insurance, freight, commission, claims, exchange
gain etc.) |
324.479 |
255.847 |
|
|
|
TOTAL EARNINGS |
2898.705 |
2416.837 |
2172.554 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
1788.389 |
1441.691 |
2079.542 |
|
|
|
Components and spare parts |
6.519 |
9.184 |
4.786 |
|
|
|
Capital Goods |
23.770 |
83.372 |
11.993 |
|
|
TOTAL IMPORTS |
1818.678 |
1534.247 |
2096.321 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
38.00 |
114.04 |
42.16 |
|
%20LIMITED%20-%20219307%2008-May-2013_files/image005.gif){kind=small}
%20LIMITED%20-%20219307%2008-May-2013_files/image006.gif){kind=small}
KEY RATIOS
|
PARTICULARS |
|
31.12.2012 |
31.12.2011 |
31.12.2010 |
|
PAT / Total Income |
(%) |
9.08 |
30.54
|
11.17
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
12.98 |
41.36
|
16.96
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
24.63 |
76.47
|
36.59
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.28 |
0.81
|
0.45
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
0.000 |
0.00
|
0.00
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.28 |
1.12
|
1.05
|
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
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 |
No |
|
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 |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm / promoter involved in |
-- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
No |
|
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 |
Yes |
|
31] |
Date of Birth of Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN 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 |
REVIEW OF OPERATIONS
The business sentiments, confronted with the challenges of market conditions and slowdown in global demand, remained extremely challenging and the recessionary economic conditions led initial slowdown in sales growth. Thanks to the sustained efforts of the marketing team, improved marketing performance of the second half resulted into record sales and growth. The performance in terms of net working capital was affected by built-up of inventory and the profitability is significantly impacted by inflation led cost push in most of the operating areas. Directors are pleased to inform that in spite of challenging conditions, the Company has registered best ever performance in terms of sales growth over previous year.
The Company registered sales of Rs.10712.300 million as compared to Rs. 9560.800 million registering a record growth of 12.0 percent sales. Out of the total sales revenue of the Company for the year, 25.3 percent is contributed by exports. The increased cost of raw materials and inflationary rise in other expenses resulted into lowering of PBDIT margin before exceptional items from 17.7 percent to 14.6 percent. Net profit after accounting for exceptional items and tax is lower over the previous year. The Company remains focused to improve its core business and look for higher market share in the business segments in which it operates.
In view of prolonged litigation, the Company could not implement its project for manufacturing of Masterbatches at Ambernath, the site acquired by the Company in 2008 from MIDC.
SALE OF BUSINESSES
Clariant AG Switzerland, the ultimate Holding Company has announced that USA based SK Capital has agreed to purchase the business units textile chemicals, paper specialties and business line emulsions from Clariant and that this will include the transfer of the whole R&D, applications, sales and marketing organization along with production plants and sites worldwide.
Subject has production facilities for manufacture of textile chemicals and produces paper specialties and emulsion products at its Roha plant. The textile chemicals, paper specialties and emulsion businesses, included in dyes and specialty chemicals segment, together contribute about 35% of the net sales of the Company. The decision to sell the businesses including a manufacturing plant for textile products situated at Roha and other assets dedicated to the businesses under divestment, at a value to be arrived at by the professional valuers, will be considered by the Board and approval of shareholders will be sought at appropriate time in accordance with the requirements of the Companies Act, 1956. The Directors would like to assure its shareholders that given the present market conditions prevailing for the businesses under sale, the decision will be in the best interest of the Company and its shareholders.
MANAGEMENT DISCUSSION
AND ANALYSIS
FINANCIAL AND
OPERATIONAL PERFORMANCE
In spite of extremely challenging business environment, slowdown in global economic growth and the recessionary economic conditions, the Company for the year 2012 registered a record growth of 12.0% in sales over previous year.
Of the total sales revenue of the Company for the year, 25.3% is contributed by exports. In view of rising cost of raw materials and inflation led upsurge in other operating costs, profit before depreciation, interest, exceptional items and tax (PBDIT) is lower as compared to the previous year. After considering the exceptional income including those arising from sale of premises in the current year and sale of land and infrastructure at Balkum, Thane in the previous year, the profit after tax (PAT) is lower from Rs. 3040.400 million to s. 1013.000 million. The following ratios reflect the financial performance for the year in relation to the previous year.
The Company remains a zero debt company with no long-term borrowings. The rating for the Company is rea3rmed ‘CARE AAA’ for long term bank facilities and ‘CARE A1+’ for short term bank facilities and this endorses the confidence on the financial standing of the Company. Short-term bank borrowings are restricted to the need based working capital requirements. The business environment has impacted the net working capital of the Company as compared to previous year. Inspite of challenging environment, the year-end ratio of inventory to sales of 15.2%, receivables to sales of 13.8% and net working capital to sales of 11.8% is one of the best in the specialty chemical industry. Net cash flow from operating activities during the year was Rs. 765.768 million Funds surplus to the operational needs have been prudently invested to earn reasonable returns with a high degree of safety. A sum of Rs.2269.800 million (previous year Rs. 2655.100 million) stands invested in debt schemes of mutual funds at the end of the year.
During the year , all the plants had smooth operations and the capacity utilisation was better than the previous year.
BUSINESS SEGMENTS AND
PERFORMANCE
In accordance with the Accounting Standard-17 notified by Companies (Accounting Standards) Rules, 2006 and based on characteristics of products, production processes and the class of customers, and in view of sale of its intermediates business in the past, the Company has reclassified its range of products into two reportable business segments as under :
1. PIGMENTS AND
COLORS:
The business segment earlier named as Intermediates and colors is renamed as Pigments and Colors to correctly reflect the product group, as the Company is no more engaged in intermediates business after divestment of its Diketene and Intermediate business in 2010. The segment now comprises of pigments, additives and masterbatches.
Clariant is a leading global provider of organic pigments, pigment preparations and dyes and based on extensive experience and expertise in color, the pigment business helps to provide vibrant and safe colors to the world. The product portfolio meets the demands for key market segments of coatings, plastics and special applications and printing that include automotive, industrial, decorative and architectural paints and coatings, plastic applications including films, fibers, detergent coloration, cosmetics, aluminum finishing, traditional and non impact printing and electronic displays.
Clariant’s additives create value by improving the e3ciency, safety, protection, durability and appearance of products such as plastics, coatings and printing inks. Clariant is a leading provider of flame retardants, waxes and polymer additives and serves customers across a wide range of applications and sectors including electronic, construction and automotive.
Clariant is a global leader in masterbatches for color, additive concentrate and innovative performance solutions for plastics.
Its customers span a broad range of markets that include packaging for home, personal care, food, drink and industrial; consumer goods appliances, electrical, sports, toys and construction; medical devices and pharmaceutical packaging; carpets, non-woven textiles and sports apparel; interior and exterior parts, engine and components for automotive sector.
The manufacturing facilities and fully equipped technical service laboratories provide application support to the customers in adjusting to the changing needs of end users. The Company is a pioneer in the promotion of lead and chrome free pigments and in spreading the awareness on use of non-halogenated flame retardants. The capability of the Company to develop and produce new masterbatches with accuracy and consistency has helped in achieving high growth rates over the period.
The total sales under this segment comprises of pigments, additives and masterbatches. The ratio of domestic sales to export sales was 65:35. The segment contributes 39% to the total sales and registered a growth of 10.7% over the previous year. The Company could not implement its project to set up the green field manufacturing facility for masterbatches in MIDC, Ambernath due to ongoing litigations.
2. DYES AND SPECIALTY
CHEMICALS:
The dyes and specialty segment includes dyestu.s, synthetic resins, binder materials, functional e.ects and coatings, auxiliaries and chemicals, comprising of specialty chemicals, emulsions and dyes for the textile, leather and paper industry and performance chemicals for personal care and industrial applications.
Clariant is a leading producer of dyes and chemicals for the textile industry and meets the frequently changing specifications of brands and mills in apparel andfashion, automotive, home and technical textiles. Clariant provides dyes and specialty chemicals for pre-treatment, dyeing, printing and finishing of textiles, optical brighteners and chemicals for functional treatment of technical textiles and thus plays a key role throughout the entire textile supply chain. The Company o.ers solutions including colour trends analysis, color matching technology combined with processing efficiency, nanotech effects, environment friendly solutions and unique concepts that add to the ability of customers to fast move their products to markets and stay ahead of competition.
Clariant is a leading provider of chemicals, technical services and solutions over the entire value chain of leather production. From beamhouse to finishing, Clariant provides high quality and environment friendly leather processing chemicals and services and world class knowledge of leather upgrading and chrome free tanning solutions. Their customers in the shoe, automotive, furniture and garment segments benefit from customized technical solutions and expertise in performance leather and environmentally compatible solutions.
Clariant aims to provide knowledge and expertise in the management of whiteness, coloration, special coatings and strength for all kinds of paper and paper board, offering the most cost effective product choices and solutions. Key markets for Clariant products include printing and writing copy papers, coated papers and board, tissue papers, recycled papers, newsprint, packaging and specialized applications.
Clariant’s emulsions business is a major supplier of solutions in water based emulsions/polymer based dispersions. Being water based, the products are more suitable with less impact on environment avoiding the use of solvents. Key market areas for emulsions are decorative interior and exterior paints, primers, varnishes, anti-corrosion and industrial applications, concrete applications, roofing, tiling sealants and primers in construction, wood, paper, lamination, packaging and pressure sensitive adhesives and wide range of functional effects and coating applications for textiles, leather and paper.
Industrial andConsumer Specialties business is a leading provider of specialty chemicals and ethylene oxide derivatives for industrial and consumer care applications. With a strong focus on ecologically sustainable solutions, their key market segments include additives for concrete and mortar, dispersing agents, defoamers, biocides and emulsifiers for emulsion polymerization, ingredients for skin andhair care cosmetics, wet wipes and pharmaceutical applications, ingredients for household and industrial cleaning solutions, ingredients for hydraulic, metal working and other performance fluids, special solvents and fluids for heat transfer, gas scrubbing, formulations for fungicides, herbicides and seed treatments.
With a wide range of products, the strong brand image of Clariant, knowledge and expertise of providing technical services and solutions in product development and application process to meet the needs of end users, the Company is well positioned in the business segment. The total sales under the dyes and specialty chemicals segment comprises of mainly textile chemicals, leather services, paper specialties, emulsions, industrial and consumer specialties. The ratio of domestic sales to export sales was 81:19. The segment contributes 61% to the total sales and registered a growth of 12.9% over the previous year.
OUTLOOK,
OPPORTUNITIES AND CHALLENGES
The deceleration in growth, high inflation and twin deficits (current account deficit and trade deficit) are major challenges for the Indian economy. The real GDP grew by 5.4% year on year in the first half of the current fiscal year, much lower than the average growth rate of about 8% achieved in last decade. Manufacturing sector has been hit by weak domestic demand, consumption as well as investment, and sluggish exports owing to the fragile global economic scenario. The advanced estimates for GDP peg manufacturing growth at 1.9 per cent in 2012-13, the slowest in the past 14 years. The ability of Indian economy to return to its pre-crisis growth era in the absence of fully conducive global environment has been severely tested over last couple of years. Sub 5% GDP growth rate could be a cause of concern for an economy widely tipped to become the next global growth engine after China.
The domestic chemical sector in general and the specialty chemical sector in particular are witnessing the double impact of sluggish domestic demand and increased competition from global and domestic players. The Indian chemical industry was witnessing deceleration in the past few years. The production index for chemicals and products recorded a growth rate of 3.46% during April-December, 2012 compared to 0.17% fall recorded during the same period a year ago.
Despite the current economic conditions and challenges, since GDP is expected to rise from the current level, the growth potential for Indian economy over the next few years is likely to be better. India’s urban population is expected to grow substantially and increase in income levels; increasing awareness on quality, fashion and trend, adoption of new product specifications and environmental standards is expected to result in increased need for better products and services resulting into consumption-led double-digit growth in key end markets over the next decade. Chemicals constitute more than 13% of India’s total exports and India has strong presence in the export market in the dyes, Pharma and agro chemical segments.
Currently specialty chemicals account for lesser share in Indian chemicals industry as compared to global scenario. The per capita consumption of such chemicals is also very low as compared to global levels. For example the per capita consumption of colorants in India is only 50 gm. vis-a-vis the world average of 250 gm. The industry shows comparative promise when compared to the advanced countries and has the potential to emerge as a major manufacturing hub for the global market. The specialty chemical segment which caters to several key applications will be increasingly important for India and with expanding economic growth and per capita income; it is poised to grow more than the economic growth. As the economy develops, India will need to regulate products more stringently, and strengthen consumption standards, which in turn will promote increased usage of specialty chemicals. Consumption standards are policies implemented by the government to promote the safe use of products. These standards are necessary for both improving society’s standard of living and enhancing consumer safety. Most developed countries (e.g. the US, Germany) have implemented stringent consumption standards across various end-use markets. India still uses enamel paints with high VOC content. Mandating the usage of waterbased paints will help ensure health and safety of consumers, and encourage the consumption of higher cost, water based paints. This will result in consumption-led double-digit growth in key end markets over the next decade and an increased need for better products and services. Based on the assessment of future demand of specialty chemicals, this segment is expected to reach value of $38 billion by the end of 12th Five Year Plan (2012-2017). Driven by potential growth in end-use industries, availability of large pool of technical man-power, scientists and researchers, the segment is poised for substantial growth and offers immense potential for investment as well as employment generation. The REACH and other European legislation o.er unique opportunities to the industry players to register themselves, innovate and move up the value chain and compete effectively with global players both in the domestic and export markets and bring the Indian specialty chemical industry on the global map while meeting the needs of enhanced quality of life for growing affluent population of India.
Dyes and Pigment is the major sub-segment of the Indian colorants industry. Global demand for dyes and pigments is expected to increase from $14.40 billion in 2010 to $16.2 billion by 2014. This is likely to have a direct impact on the Indian dyes and pigments industry as majority of the dyes and pigments produced in the domestic market are exported. Majority of global dyes and pigment manufacturers are shifting their operations to India and China, as REACH regulation is increasing their cost of production in majority of the European countries. Decreasing profitability of the manufacturers is a major concern of the colorants industry in India.
India is one of the major participants in the global paints and coatings industry. The market size for this sector is about $3.40 billion. The Indian paints industry is consolidated where the organised sector accounts for about 80 percent of the market share. The industry is classified into decorative paints and industrial paints, which accounted for 70 percent and 30 percent of the total paints industry revenues, respectively in 2010. The average annual growth rate of the paints industry was 13.5 percent between 2005 and 2010 and is expected to improve in coming years.
Per capita consumption of paints in India is about 1.3 kg compared to 38 kg in Singapore and 26 kg in the United States. The demand for paints is strongly backed by growth of the automotive industry which is expected to have an average annual growth rate of 15 percent between 2010 and 2014. The residential, commercial real estate market is expected to grow rapidly, as 100 percent FDI is allowed in this industry. Further, there is increasing demand for water-based paints and companies are introducing lead-free and low-volatile organic compound products, which are environment friendly. Heavy metal pigments are getting replaced with organic pigments in premium paints. Industry outlook for paint, plastics, inks and special applications remains good. The challenges in this segment are from rising costs of utilities whereas customers are increasingly becoming sensitive to price rise. Clariant has positioned itself as preferred supplier of pigments, pigment preparations, additives and intermediates to major paint, coatings and ink manufacturing companies in the country and is well equipped to meet the requirements.
The per capita use of plastics in India may still be quite low compared to the developed countries; the Indian plastic industry is one of the largest in the world and promises a steady double digit growth for next few years. The overall plastic consumption in India per person has gone up to 8 kg as compared to 40 kg in developed countries. Demand from automobile sector and white goods industry is huge despite the economic slowdown and the use of plastic components in auto industry, agriculture and many other industries is expected to increase significantly. In view of strong potential for growth of the industry, the specialty polymer chemicals segment is expected to grow from current market share of $ 2.3 billion to $ 5.3 billion by 2017. With focus on global standards, Clariant addresses Indian plastics sector’s push to create innovative, safer, and environmental compatible products. It’s specialty chemicals and masterbatches provides broad portfolio of high-quality, cost-effective pigments, and performance additives and its innovative products provide cost-e3cient processing, advanced functionality and aesthetic possibilities to meet the challenges of a wide range of segments including food and cosmetics packaging, electronic and electrical (E&E), infrastructure, agriculture, medical and pharmaceutical.
The dyes segment is highly fragmented in India due to excise concession provided for the market participants. This segment has an inherent element of value addition to a wide variety of products like textiles, leather, paper etc. The Indian textile industry which accounts for about 4% of Gross Domestic Product (GDP), accounted for 14 percent in Index of Industrial Production in 2010 and acts as one of the main drivers of the economy. The industry consumes about 80 percent of the total dyes consumed in India. The growth of the dyes sector thus depends considerably on the performance of this industry. Clariant is a major player in the filed of dyes and chemicals and plays a key role in providing innovative and sustainable solutions throughout the entire supply chain and all segments from fiber to finishing of textiles and retanning to finishing of leather. Clariant provides knowledge and expertise in the management of whiteness, coloration, special coatings and strength and o.er products to improve optical and functional properties of all kinds of paper and board.
The industrial, home and personal care market in India is expected to grow at a rapid pace surpassing the growth of other segments in this sector although competitive pressure has intensified. With growing affluence, Indian consumers are able to spend more on hygiene and personal care products. Increasing consumption is driving demand for wide range of cosmetic chemicals, health care products as well as hygiene products using specialty chemicals, polymers and oleo chemicals. This goes along with an increased customer demand for chemical ingredients that provide enhanced functionality and multiple benefits at lower prices. To meet the demands, the Company has established new state of the art consumer care and crop protection laboratories and enhanced its biocide laboratory to tailor its products specifically for the local market requirements.
The major challenge that the Indian chemical industry continue to face is the perception that it affects the environment negatively. Though there are other industries, which are equally or more polluting, colorant industry is considered to be the most polluting due to visibility of color. The industry is viewed with misapprehensions on the pollution and sustainability fronts and thus safety, health and environment protection issues have become the major talking point in the Indian chemical industry. The existing effluent discharge norms need to be re-evaluated. Inspite of Indian chemical sector taking a significant lead over other sectors, in R&D spending and utilisation, it lags behind other emerging economies. While chemical industry addresses growing need for materials required by different sectors, the industry employs highly complex manufacturing processes that involve handling of often toxic and hazardous chemicals. The process being energy intensive, the importance of safety, security and environmental protection can not be underestimated. There is a lack of ideal, dedicated and adequate availability of land at suitable locations. Inadequate availability of water is a limiting factor as water is an important component in the manufacturing of colorants. Availability of power is inadequate and cost is very high. Various government duties and levies add to the cost substantially. Unavailability of good quality roads with excellent connectivity to ports is a severe constraint. Port facilities and long turnaround time affect efficiency and competitiveness of the specialty chemical industry. Spending on research and development (R and D) is the lowest by India’s specialty chemical industry. For a nation aspiring to be a major manufacturing center for specialty chemicals, there is an need to increase R&D activities. Availability of feedstock is very poor and the industry is import dependent for many dyeinter mediates. The export performance of specialty chemicals so far has been good. However, regulations like REACH may impact export performance.
The Indian chemical industry can deliver on an accelerated growth phase, provided a clearly defined vision along with a strategic roadmap is developed to enable it. If this is not done, they may see the growing market increasingly being served through manufacturing done outside India. The various segments of the chemical industry (such as organic chemicals, specialty chemicals, chlor-alkali, pesticides, colorants and alcohol based chemicals) have their own unique set of challenges. The industry can grow only if these individual segments overcome their challenges and move swiftly along the growth path.
CONTINGENT
LIABILITIES AND COMMITMENTS
(Rs. In Millions)
|
|
As on 31.12.2012 |
As on 31.12.2011 |
|
CONTINGENT LIABILITIES
AND COMMITMENTS (to the extent not provided for) |
|
|
|
(a) Contingent
liabilities : |
|
|
|
(i) in respect of income tax matters |
|
|
|
- decided against the Company, in respect of which the Company is in further appeal |
76.305 |
116.979 |
|
- decided in favor of the Company against which the department is in appeal |
59.375 |
38.919 |
|
(ii) in respect of sales tax/VAT matters |
476.510 |
495.864 |
|
(iii) in respect of excise/service tax matters |
106.254 |
89.211 |
|
(iv) in respect of bills of exchange discounted with banks (since realised Rs. 219.857 million [Rs.84.051 million]) |
220.022 |
134.813 |
|
(v) Other matters in dispute |
0.225 |
0.225 |
|
(vi) Disputed labour matters - Amount not ascertained. |
|
|
|
In respect of items (i) to (iii), (v) and (vi) future cash outflows in respect of contingent liabilities is determinable only on receipt of judgements pending at various forums/authorities. |
|
|
FIXED ASSETS:
· Land Freehold
· Land Leasehold
· Building
· Plant and Machinery
· Office Equipment
· Furniture and Fixture
· Vehicles
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. 54.28 |
|
|
1 |
Rs.84.31 |
|
Euro |
1 |
Rs. 70.99 |
INFORMATION DETAILS
|
Report Prepared
by : |
DPH |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
YES |
|
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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
|
|
|
|
TOTAL |
|
72 |
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.