MIRA
INFORM REPORT
|
Report Date : |
01.07.2014 |
IDENTIFICATION DETAILS
|
Name : |
ITC LIMITED |
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Registered
Office : |
Virginia House 37, |
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Country : |
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Financials (as
on) : |
31.03.2014 |
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Date of
Incorporation : |
24.08.1910 |
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Com. Reg. No.: |
21-001985 |
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Capital
Investment / Paid-up Capital : |
Rs. 7953.200 Millions |
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CIN No.: [Company Identification
No.] |
L16005WB1910PLC001985 |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchange. |
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Line of Business
: |
Manufacturer of
Cigarettes and Tobacco. It is also engaged in Hotel Business. |
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No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa (81) |
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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 1050000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Exist |
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Comments : |
Subject is a well-established and a reputed company having excellent
track record. Financial position of the company seems to be sound. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payment
terms 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 – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
India |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
N E W S
The economy grew 4.7 %in 2013/14, marking a
second straight year of sub-5 % growth – the worst slowdown in more than a
quarter of a century. The data was below an official estimate of 4.9 % annual
growth and compared with 4.5 % in the last fiscal year. However, the current
account deficit narrowed sharply to $ 32.4 billion at 1.7 % of gross domestic
product, in 2013/14 from a record high of $ 98.8 billion or 4.7 %, the year
before.A sharp fall in gold imports due to restrictions on overseas purchases
and muted import of capital goods helped shrink the current account deficit.
Online retailer Flipkart has acquired fashion
portal Myntra as it prepares to battle with the rapidly expanding India arm of
the global e-commerce giant Amazon. The company raised $ 210 million from
Russian Investment firm DST Global which has also invested in companies like
Facebook, Twitter and Alibaba Group.
General Motors will start exporting vehicles
from its Talegaon plant near Pune in the second half of 2014. GM was one of the
few global carmakers that was using its India plant only for the domestic
market.
Google has overtaken Apple as the world’s top
brand in terms of value, according to global market research agency Millward Brown.
Google’s brand value shot up 40 % in a year to $ 158.84 billion. The top 10 of
the 100 slots were dominated by US companies.
Infosys lost another heavy weight when B G
Srinivas, a board member put in his papers. He is the third CEO-hopeful to quit
after Chairman N R Narayana Murthy’s return to the company – Ashok Vemuri and V
Balakrishnan being the other two.While Vemuri went on to lead IGate,
Balakrishnan joined politics.
Naresh Goyal – promoted Jet Airways posted
biggest quarterly loss – Rs 2153.37 crore – in the three months ended March 31,
mainly because it has been offering discounts to passengers to fill planes.
William S Pinckney – Chairman and CEO of
Amway India was arrested by the Andhra Pradesh Police in connection with a
complaint against the direct selling firm. This is the second time that he has
been taken into custody. A year, ago the Kerala Police had arrested Pinckney
and two company directors on charges of financial irregularities.
China has told its state-owned enterprises to
sever links with American consulting firms after the United States charged five
Chinese military officers wih hacking US companies. China’s action which
targets consultancies like McKinsey & Co. and the Boston Consulting Group,
sterns from fears that the first are providing trade secrets to the US
governments.
India has emerged as a country with some of
the highest unregistered businesses in the world. Indonesia has the maximum
number of shadow businesses, says a study of 68 countries by Imperial College
Business School in London.
Pfizer has abandoned its attempt to buy
AstraZeneca for nearly $ 118 billion after the latter refused an offer of 55
pounds a share.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CRISIL |
|
Rating |
AAA [Long Term] |
|
Rating Explanation |
Have the highest degree of safety and Carry lowest credit risk. |
|
Date |
27.06.2014 |
|
Rating Agency Name |
CRISIL |
|
Rating |
A1+ [Short Term] |
|
Rating Explanation |
Have very strong degree of safety and Carry lowest credit risk. |
|
Date |
27.06.2014 |
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
31-03-2014.
INFORMATION DENIED
Management non-cooperative (91-33-22886426)
LOCATIONS
|
Registered Office : |
Virginia House,
37, Jawaharlal Nehru Road, Kolkata – 700071, West Bengal, India |
|
Tel. No.: |
91-33-22886426/
22880034/ 22889371 |
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Fax No.: |
91-33-22882358 |
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E-Mail : |
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Website : |
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Plants: |
Cigarette Factories ·
Meenakunte
Village, Jala Hobli, Bengaluru - 562 157, Karnataka, India Kolkata ·
93/1,
Karl Marx Sarani, Kolkata - 700 043, West Bengal, India Munger ·
Basdeopur
P. O., District Munger - 811 202, Bihar, India Ranjangaon ·
Plot No. B-27, MIDC Ranjangaon, Taluka Shirur
District Pune 412 220, Maharashtra , India ·
Sardar
Patel Marg, Saharanpur - 247 001, Uttar Pradesh, India Paper and
Paperboard Mills Bollaram ·
Anrich
Industrial Estate, Bollarum Village, District Medak, Andhra Pradesh – 502 325 Sarapaka ·
Sarapaka
village, District Khammam - 507 128, Andhra Pradesh, india Thekkampatty ·
Thekkampatty
Village, Vivekanandapuram Post, Mettupalayam Taluk, District Coimbatore – 641
113, Tamilnadu, India Tribeni ·
Village
and Post Chandrahati, District Hooghly – 712 504, West Bengal, India FOODS FACTORIES Haridwar ·
Plot No. 1, Sector 11 Integrated Industrial
Estate Haridwar - 249 403 Uttarakhand, Inda Ranjangaon ·
Plot No. D-1, MIDC Ranjangaon, Taluka Shirur
District Pune – 412 220, Maharashtra, India PERSONAL CARE
PRODUCTS FACTORIES Haridwar 1. Plot No. 1,
Sector 11, Integrated Industrial Estate, Haridwar -249 403, Manpura 2. Village
Manpura, Tehsil Baddi, District Solan - 174 101, HOTELS Owned Hotels 1. ITC Mughal*
Taj Ganj Agra - 282 001, Bengaluru 2. ITC Gardenia*
1, Residency Road, Bengaluru-560 025, 3. ITC 4. My Fortune, Bengaluru 46, Richmond Road
Bengaluru – 560 025 Chennai 5. ITC Grand Chola* 63, Mount Road, Guindy Chennai – 600 032, Tamilnadu
India 6. My Fortune,
Chennai, Jaipur 7. ITC
Rajputana* Kolkata 8. ITC Sonar*,
1, Mumbai 9. ITC Maratha*,
Sahar, Mumbai - 400 099, 10. ITC Grand
Central*, 287, 11. ITC Maurya*,
Sardar Patel Marg, Diplomatic Enclave, 12. Sheraton New
Delhi Hotel, District Centre, Saket, Licenced Hotels 13.
WelcomHeritage, Umed Port Blair 14. Vadodara 15. WelcomHotel
Vadodara, Hotels Under
Operating Services 16. WelcomHotel
Rama International, R-3, Chikalthana, Chennai 17. Sheraton
Park Hotel & Towers, 132, 18. ITC
Kakatiya*, 6-3-1187, Begumpet, Kollam 19. WelcomeHotel raviz Thevally, Mathilil P.O.
Kollam 691 601, India Kozhikode 20. welcomeHotel Raviz Kadavu NH 17,
Callcut Bypass Road Azhinjilam P.O. Malappuram District Kozhikode – 673 632 New Delhi 21. WelcomeHotel
Dwarka Plot No. 3, Sector – 10, District Centre, Dwarka New Delhi – 110 075 Panchkula 22. WelcomeHotel
Bella Vista SM – 8, Sector - 5
Panchkula 134 109 23. Green Leaf
Threshing Plants Anaparti ·
East
Godavari District, Anaparti - 533 342, Andhra Pradesh, India Chirala ·
Prakasam
District ,Chirala - 523 157, Andhra Pradesh, India Nanjangud 3. Immavu and
Adakanahalli Village Nanjangud Taluk, District Mysore - 571 302, Karnataka,
India Packaging and
Printing Plants Chennai ·
Tiruvottiyur,
Chennai - 600 019, Tamilnadu, India Haridwar ·
Plot No.
1, Sector 11, Integrated Industrial Estate, Haridwar – 249 403, Uttarkhand,
India Munger · Basdeopur P. O., District Munger - 811 202, Bihar, India CHOUPAL SAAGARS
- RURAL SERVICES CENTRES Located At: ·
Amravati ·
Badaun ·
Bahraich ·
Chandouli ·
Chindwara ·
Dewas ·
Dhar ·
Gonda ·
Hardoi ·
Hathras ·
Itarsi ·
Jagdishpur ·
Mandsaur ·
Mhow ·
Nagda ·
Parbhani ·
Pilibhit ·
Ratlam ·
Sehore ·
Ujjain ·
Vidisha ·
Wardha ·
Washim ·
Yavatmal LIFESTYLE RETAILING Design and Technology Centre ·
Manesar Wills Lifestyle Stores Located At: ·
Agra ·
Ahmedabad ·
Bengaluru ·
Bhopal ·
Bhubaneshwar ·
Chandigarh ·
Chennai ·
Coimbatore ·
Dehradun ·
Ernakulam ·
Ghaziabad ·
Gurgaon ·
Hyderabad ·
Indore ·
Jaipur ·
Jammu ·
Jodhpur ·
Kanpur ·
Kolkata ·
Lucknow ·
Ludhiana ·
Meerut ·
Mumbai / Thane ·
Nagpur ·
Nashik ·
New Delhi ·
Noida ·
Panjim ·
Patiala ·
Patna ·
Pune ·
Raipur ·
Ranchi ·
Siliguri ·
Surat ·
Vadodara ·
Visakhapatnam John Players Stores* ·
Bengaluru ·
Chennai ·
Hyderabad ·
Kolkata ·
Mumbai / Thane · New Delhi / NCR |
DIRECTORS
AS ON 31.03.2014
|
Name : |
Mr. Yogesh
Chander Deveshwar |
|
Designation : |
Chairman |
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Name : |
Mr. Nakul Anand |
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Designation : |
Executive Director |
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Name : |
Mr. Pradeep Vasant Dhobale |
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Designation : |
Executive Director |
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Name : |
Mr. Kurush Noshir Grant |
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Designation : |
Executive Director |
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Name : |
Mr. Anil Baijal |
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Designation : |
Non Executive Director |
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Name : |
Mr. |
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Designation : |
Non Executive Director |
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Name : |
Mr. Serajul Haq Khan |
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Designation : |
Non Executive Director |
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Name : |
Mr. Robert earl Lerwill |
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Designation : |
Non Executive Director |
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Name : |
Mr. Suryakant Balkrishna Mainak |
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Designation : |
Non Executive Director |
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Name : |
Mr. Sunil Behari Mathur |
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Designation : |
Non-Executive Directors |
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Name : |
Mr. Pillappakkam
Bahukutumbi Ramanujam |
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Designation : |
Non-Executive Director |
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Name : |
Sahibzada Syed Bahib-Ur-Rehman |
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Designation : |
Non-Executive Director |
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Name : |
Mr. Anthony Ruys |
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Designation : |
Non-Executive Director |
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Name : |
Meera Shankar |
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Designation : |
Non-Executive Director |
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Name : |
Mr. Krishnamoorthy Vaidyanath |
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Designation : |
Non-Executive Director |
KEY EXECUTIVES
|
Name : |
Mr. Rajiv Tandon |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Biswa Behari
Chatterjee |
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Designation : |
Executive Vice
President and Company Secretary |
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Name : |
Kannadiputhur Sundararaman Suresh |
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Designation : |
General Counsel |
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Audit Committee : |
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CSR And Sustainability
Committee |
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Nomination and
Compensation Committee |
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Stakeholder
Relationship Committee |
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Independent Directors
Committee |
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Corporate
Management Comittee |
Executive Directors
Executives · A Nayak, Member · T V Ramaswamy, Member · S Sivakumar, Member · K S Suresh, Member · R Tandon, Member · B B Chatterjee, Member and Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2014
|
Category of
Shareholder |
Total No. of Shares |
Total Shareholding as
a % of Total No. of Shares |
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|
As a % of (A+B) |
|
(A) Shareholding of Promoter and Promoter
Group |
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(B) Public Shareholding |
|
|
|
|
|
|
|
|
1034921991 |
13.04 |
|
|
6571035 |
0.08 |
|
|
1742850407 |
21.97 |
|
|
1530323687 |
19.29 |
|
|
4314667120 |
54.38 |
|
|
|
|
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|
329028616 |
4.15 |
|
|
|
|
|
|
680719308 |
8.58 |
|
|
133406576 |
1.68 |
|
|
309 |
0.00 |
|
|
2476418791 |
31.21 |
|
|
2413387716 |
30.42 |
|
|
523908 |
0.01 |
|
|
10315501 |
0.13 |
|
|
8193635 |
0.10 |
|
|
43998031 |
0.55 |
|
|
3619573600 |
45.62 |
|
Total Public shareholding (B) |
7934240720 |
100.00 |
|
Total (A)+(B) |
7934240720 |
100.00 |
|
(C) Shares held by Custodians and against
which Depository Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
20775620 |
0.00 |
|
|
20775620 |
0.00 |
|
Total (A)+(B)+(C) |
7955016340 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of
Cigarettes and Tobacco. It is also engaged in Hotel Business. |
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Products : |
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GENERAL INFORMATION
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No. of Employees : |
Not Available |
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Bankers : |
· State Bank of India, 38, Chowringhee Lane, Kolkata - 700071, Theyst Bengal, India |
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Facilities : |
Note: Cash Credit facilities are secured by hypothecation of inventories of
the Company, both present and future. |
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
Deloitte Haskins and Sells Chartered Accountants |
|
Address : |
Kolkata, India |
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Subsidiaries : |
·
Srinivasa Resorts Limited ·
Fortune Park Hotels Limited ·
Bay Islands Hotels Limited ·
WelcomHotels Lanka (Private) Limited, Sri Lanka ·
Landbase India Limited ·
Russell Credit Limited and its subsidiary
Greenacre Holdings Limited ·
Technico Pty Limited, Australia and its
subsidiaries ·
Technico Agri Sciences Limited ·
Technico Technologies Inc., Canada ·
Technico Asia Holdings Pty Limited, Australia and
its subsidiary ·
Technico Horticultural (Kunming) Co. Limited,
China ·
Wimco Limited and its subsidiaries ·
Pavan Poplar Limited ·
Prag Agro Farm Limited ·
ITC Infotech India Limited and its subsidiaries ·
ITC Infotech Limited, UK ·
ITC Infotech (USA), Inc. and its subsidiary Pyxis
Solutions, LLC, USA ·
Wills Corporation Limited ·
Gold Flake Corporation Limited ·
ITC Investments and Holdings Limited ·
Surya Nepal Private Limited ·
King Maker Marketing, Inc., USA ·
BFIL Finance Limited and its subsidiary ·
MRR Trading and Investment Company Limited ·
North East Nutrients Private Limited (w.e.f. 06.02.2014) The above list
does not include ITC Global Holding Pte. Limited, Singapore (in liquidation) |
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Associates |
·
Gujarat Hotels Limited ·
International Travel House Limited- being
associates of the Company, and ·
Tobacco Manufacturers (India) Limited, UK- of
which the Company is an associate |
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|
Joint Venture |
·
Maharaja Heritage Resort Limited ·
Espirit Hotels Private Limited ·
Logix Developers Private Limited |
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Joint Venture of the Company’s subsidiary : |
·
ITC Filtrona Limited - being joint venture of
Gold Flake Corporation Limited |
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·
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Associates of the Company’s Subsidiaries |
·
Russell Investments Limited ·
Classic Infrastructure and Development Limited ·
Divya Management Limited Antrang Finance Limited- being associates
of Russell Credit Limited, and ATC Limited- being associate of Gold Flake
Corporation Limited |
CAPITAL STRUCTURE
As on 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
10000000000 |
Equity Shares |
Rs.1/- each |
Rs.10000.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
7953182950 |
Equity Shares |
Rs.1/- each |
Rs.7953.182 Millions |
|
|
|
|
|
A) Reconciliation of number of Ordinary Shares outstanding
|
|
31.03.2014 (No. of Shares) |
31.03.2014 (Rs. In Millions) |
|
As at beginning of the year |
7901833110 |
7901.800 |
|
Add: Issue of Shares on exercise of options |
51349840 |
51.400 |
|
As at end of the year |
7953182950 |
7953.200 |
B) Shareholders holding more than 5% of the Ordinary Shares in the
Company
|
|
31.03.2014 (No. of Shares) |
31.03.2014 Percentage |
|
Tobacco Manufactures (India) Limited |
1985564880 |
24.96 |
|
Life Insurance Corporation of India |
1102829844 |
13.87 |
|
Specified Undertaking of the Unit Trust of
India |
896724540 |
11.28 |
C) Ordinary Shares Allotted as fully paid up Bonus Shares for the period
of five years immediately preceding 31st March
|
|
2014 (No. of Shares |
|
Bonus Shares issued in 2010-11 |
3826701530 |
D) Rights, preferences
and restrictions attached to the Ordinary Shares
The Ordinary Shares of the Company, having par value of ` 1.00 per share, rank pari passu in all respects including voting rights and entitlement to dividend.
E) Shares Reserved for
issue under Options
|
|
31.03.2014 (No. of Shares) |
|
Ordinary Shares of Rs. 1.00 each |
265813470 |
Terms and Conditions
of Options Granted
Each Option entitles the holder thereof to apply for and be allotted ten Ordinary Shares of the Company of Rs. 1.00 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the Options and expires at the end of five years from (i) the date of grant in respect of Options granted under the ITC Employee Stock Option Scheme (introduced in 2001) and (ii) the date of vesting in respect of Options granted under the ITC Employee Stock Option Scheme -2006 & the ITC Employee Stock Option Scheme -2010.
The vesting period for conversion of Options is as follows:
On completion of 12 months from the date of grant of the Options: 30% vests
On completion of 24 months from the date of grant of the Options: 30% vests
On completion of 36 months from the date of grant of the Options: 40% vests
The Options have been granted at the ‘market price’ as defined from time to time under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
94
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
|
|
|
|
I.
EQUITY AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
7953.200 |
7901.800 |
7818.400 |
|
(b) Reserves &
Surplus |
254667.000 |
214976.700 |
180100.500 |
|
(c) Money received
against share warrants |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application
money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total Shareholders’ Funds
(1) + (2) |
262620.200 |
222878.500 |
187918.900 |
|
|
|
|
|
|
(3) Non-Current
Liabilities |
|
|
|
|
(a) long-term borrowings |
510.000 |
664.000 |
773.200 |
|
(b) Deferred tax
liabilities (Net) |
12969.600 |
12037.200 |
8727.200 |
|
(c) Other long term
liabilities |
50.900 |
31.100 |
129.400 |
|
(d) long-term provisions |
1100.000 |
1256.200 |
1071.200 |
|
Total Non-current
Liabilities (3) |
14630.500 |
13988.500 |
10701.000 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
1.400 |
0.000 |
17.700 |
|
(b) Trade payables |
19875.900 |
16689.800 |
14492.200 |
|
(c) Other current
liabilities |
36318.800 |
35286.200 |
33712.700 |
|
(d) Short-term provisions |
58847.100 |
51331.300 |
43039.500 |
|
Total Current Liabilities
(4) |
115043.200 |
103307.300 |
91262.100 |
|
|
|
|
|
|
TOTAL |
392293.900 |
340174.300 |
289882.000 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
119486.900 |
111185.500 |
89836.600 |
|
(ii) Intangible Assets |
640.500 |
907.900 |
1155.300 |
|
(iii) Capital
work-in-progress |
22729.400 |
14728.000 |
22692.600 |
|
(iv) Intangible assets
under development |
227.900 |
149.900 |
74.900 |
|
(b) Non-current
Investments |
25121.700 |
20008.600 |
19532.800 |
|
(c) Deferred tax assets
(net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
14800.200 |
17279.700 |
11959.300 |
|
(e) Other Non-current
assets |
0.000 |
0.000 |
0.000 |
|
Total Non-Current Assets |
183006.600 |
164259.600 |
145251.500 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
63112.600 |
50594.300 |
43633.100 |
|
(b) Inventories |
73595.400 |
66002.000 |
56378.300 |
|
(c) Trade receivables |
21653.600 |
11633.400 |
9823.700 |
|
(d) Cash and cash
equivalents |
32893.700 |
36150.000 |
28189.300 |
|
(e) Short-term loans and
advances |
7835.100 |
5121.400 |
5194.300 |
|
(f) Other current assets |
10196.900 |
6413.600 |
1411.800 |
|
Total Current Assets |
209287.300 |
175914.700 |
144630.500 |
|
|
|
|
|
|
TOTAL |
392293.900 |
340174.300 |
289882.000 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
SALES |
|
|
|
|
|
Income |
332386.000 |
299012.700 |
251474.600 |
|
|
Other Income |
11071.400 |
9387.000 |
8253.400 |
|
|
TOTAL (A) |
343457.400 |
308399.700 |
259728.000 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
Cost of Materials
Consumed |
102632.800 |
89362.100 |
76598.100 |
|
|
Purchases of
Stock-in-Trade |
30214.700 |
33759.200 |
20372.100 |
|
|
Changes in inventories of
finished goods, work-in-progress and Stock-in-Trade |
(1284.100) |
(2463.500) |
(655.900) |
|
|
Employees benefits
expense |
16083.700 |
13870.100 |
12576.200 |
|
|
Other expenses |
60190.500 |
58209.700 |
54097.900 |
|
|
TOTAL (B) |
207837.600 |
192737.600 |
162988.400 |
|
|
|
|
|
|
|
Less |
PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION (C) |
135619.800 |
115662.100 |
96739.600 |
|
|
|
|
|
|
|
Less |
FINANCIAL EXPENSES (D) |
29.500 |
864.700 |
779.200 |
|
|
|
|
|
|
|
|
PROFIT / (LOSS) BEFORE
TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
135590.300 |
114797.400 |
95960.400 |
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
8999.200 |
7955.600 |
6985.100 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE TAX (E-F) (G) |
126591.100 |
106841.800 |
88975.300 |
|
|
|
|
|
|
|
Less |
TAX (H) |
38739.000 |
32657.900 |
27351.600 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) AFTER TAX
(G-H) (I) |
87852.100 |
74183.900 |
61623.700 |
|
|
|
|
|
|
|
Add |
PREVIOUS YEARS’ BALANCE
BROUGHT FORWARD (J) |
37881.000 |
19725.900 |
5486.700 |
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
Transfer to General
Reserve |
8800.000 |
7500.000 |
6500.000 |
|
|
Proposed Dividend |
47719.100 |
41484.600 |
35182.900 |
|
|
Income Tax on Proposed Dividends Current
Year |
8109.900 |
7050.300 |
5707.500 |
|
|
Income Tax on Proposed Dividends Earlier
Year’s Provision |
(286.800) |
(6.100) |
(5.900) |
|
|
Total (K) |
64342.200 |
56028.800 |
47384.500 |
|
|
|
|
|
|
|
|
Balance Carried to the
B/S (I+J-M) |
23509.900 |
37881.000 |
19725.900 |
|
|
|
|
|
|
|
|
EARNINGS IN FOREIGN
CURRENCY |
|
|
|
|
|
Export of Goods (F.O.B.) |
37436.900 |
32053.200 |
20999.900 |
|
|
Hotel Earnings |
4964.100 |
5495.100 |
4867.200 |
|
|
Freight and Insurance Recoveries |
283.000 |
259.200 |
277.500 |
|
|
Interest |
32.500 |
143.000 |
0.000 |
|
|
Dividend |
130.500 |
55.700 |
0.000 |
|
|
Other Earnings* |
56.800 |
67.800 |
62.100 |
|
|
TOTAL EARNINGS |
42903.800 |
38074.000 |
26206.700 |
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
Raw Materials |
11022.500 |
11211.000 |
9251.600 |
|
|
Components and Spare Parts (Including Stores) |
823.500 |
817.000 |
877.100 |
|
|
Capital Goods |
7296.900 |
6206.200 |
7058.800 |
|
|
Others |
320.800 |
226.600 |
270.300 |
|
|
TOTAL IMPORTS |
19463.700 |
18460.800 |
17457.800 |
|
|
|
|
|
|
|
|
Earnings / (Loss) Per
Share (Rs.) |
|
|
|
|
|
Basic |
11.09 |
9.45 |
7.93 |
|
|
Diluted |
10.96 |
9.33 |
7.84 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
|
|
|
|
|
PAT / Total Income |
(%) |
25.58 |
24.05 |
23.73 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
38.09 |
35.73 |
35.38 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
36.78 |
35.00 |
35.94 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.48 |
0.48 |
0.47 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.00 |
0.00 |
0.00 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.82 |
1.70 |
1.58 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs. In Millions) |
(Rs. In Millions) |
(Rs. In Millions) |
|
Share Capital |
7818.400 |
7901.800 |
7953.200 |
|
Reserves & Surplus |
180100.500 |
214976.700 |
254667.000 |
|
Net worth |
187918.900 |
222878.500 |
262620.200 |
|
|
|
|
|
|
long-term borrowings |
773.200 |
664.000 |
510.000 |
|
Short term borrowings |
17.700 |
0.000 |
1.400 |
|
Total borrowings |
790.900 |
664.000 |
511.400 |
|
Debt/Equity ratio |
0.004 |
0.003 |
0.002 |
YEAR-ON-YEAR GROWTH
|
Year on Year Growth |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs. In Millions) |
(Rs. In Millions) |
(Rs. In Millions) |
|
Sales |
251474.600 |
299012.700 |
332386.000 |
|
|
|
18.904 |
11.161 |
NET PROFIT MARGIN
|
Net Profit Margin |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs. In Millions) |
(Rs. In Millions) |
(Rs. In Millions) |
|
Sales |
251474.600 |
299012.700 |
332386.000 |
|
Profit |
61623.700 |
74183.900 |
87852.100 |
|
|
24.50% |
24.81% |
26.43% |
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 |
No |
|
8] |
No. of
employees |
No |
|
9] |
Name of
person contacted |
Yes |
|
10] |
Designation
of contact person |
Yes |
|
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 |
No |
|
20] |
Export /
Import details (if applicable) |
No |
|
21] |
Market
information |
---------------------- |
|
22] |
Litigations
that the firm / promoter involved in |
Yes |
|
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] |
Date of Birth
of Proprietor/Partner/Director, if available |
No |
|
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 |
LITIGATION DETAILS:
|
CALCUTTA HIGH
COURT CASE STATUS
INFORMATION SYSTEMS CASE STATUS:
---- STATUS OF: TEMP APO (APOT) 25 OF 2011 GODFREY PHILLIPS (INDIA) LIMITED VS.
ITC LIMITED PET’S ADV.: VIPUL KUNDALIA RES’S ADV.: ----- COURT NO.: 0 LAST LISTED ON: NO DATE MENTIONED CATEGORY: FINAL DECREE
CASE UPDATED ON: MONDAY, JANUARY 17, 2011 |
|
Press Release Comment from Y C Deveshwar, Chairman, ITC on the Union Budget 2014 10 July 2014 “Within the constraints of time and a challenging economic
environment, the FM has presented a comprehensive Budget which addresses some
key reforms with a welcome focus on physical and social infrastructure. This
should put in place the drivers for long –term growth whilst meeting some of
the critical needs of the weakest in society.” |
UNSECURED LOANS:
|
PARTICULAR |
31.03.2014 (Rs.
in Millions) |
31.03.2013 (Rs.
in Millions) |
|
LONG TERM
BORROWINGS |
|
|
|
Term loans from Banks |
0.000 |
0.200 |
|
Sales tax Deferment loans |
510.000 |
663.800 |
|
Total |
510.000 |
664.000 |
Term loans from Banks
Repayable in equated periodic instalments upto a 5 year period from the date of respective loan. These are repayable by 2014-15 and carry an interest of 11.25% p.a.
Sales tax deferment
loans
Repayable after a period of 10 to 14 years from the end of the month of respective loans. These are repayable by 2025-26 and are interest free.
The scheduled maturity of the Long-term borrowings are summarised as under:
|
|
Term Loans |
Deferred Payment
Liabilities |
Term Loans |
Deferred Payment
Liabilities |
|
Borrowings
repayable |
|
|
|
|
|
In the first year |
0.200 |
153.800 |
1.000 |
111.700 |
|
Current maturities
of long-term debt |
0.200 |
153.800 |
1.000 |
111.700 |
|
In the second year |
0.000 |
123.100 |
0.200 |
153.800 |
|
In the third to fifth year |
0.000 |
275.600 |
0.000 |
330.000 |
|
After five years |
0.000 |
111.300 |
0.000 |
180.000 |
|
Long-term borrowing |
0.000 |
510.000 |
0.200 |
663.800 |
CONTINGENT
LIABILITIES:
Claims against the Company not
acknowledged as debts Rs. 3615.000 Millions (2013 – Rs. 4665.400 Millions).
These comprise:
·
Excise
duty, sales taxes and other indirect taxes claims disputed by the Company
relating to issues of applicability and classification aggregating Rs. 2549.900
Millions (2013 – Rs. 3777.400 Millions).
·
Local
Authority taxes/cess/royalty on property, utilities etc. claims disputed by the
Company relating to issues of applicability and determination aggregating Rs.
636.200 Millions (2013 – Rs. 451.600 Millions).
·
Third
party claims arising from disputes relating to contracts aggregating Rs.
373.600 Millions (2013 – Rs. 390.700 Millions).
·
Other
matters Rs. 55.300 Millions (2013 - Rs 45.700 Millions).
It is not practicable for
the Company to estimate the closure of these issues and the consequential
timings of cash flows, if any, in respect of the above.
SOCIO-ECONOMIC
ENVIRONMENT
The global economic scenario in 2013 remained challenging with output growth estimated at 3.0% - lower than the 3.2% growth recorded in 2012. Global economic activity picked up in the second half of the year, with much of the impetus coming from the Advanced Economies, raising hopes for an improved performance in 2014. The US economy grew by 1.9% in 2013, with the continued recovery of private domestic demand partly offset by the impact of heavy fiscal consolidation, which is estimated to have subtracted around 150 basis points from GDP growth. While the Euro Area contracted by 0.5% during 2013 as compared to 0.7% in the previous year, the region finally emerged from recession with output growth being positive from the middle of 2013 on the back of less fiscal drag and some buoyancy in private domestic demand. The Emerging Market & Developing Economies, as a group, saw a further slowdown in growth rates - from 5.0% in 2012 to 4.7% in 2013. While Brazil grew by 2.3% in 2013 against 1.0% in 2012 driven by strong consumer spending and investments, growth in China remained flat at 7.7% and other major constituent economies like India, Russia and South Africa recorded deceleration.
Global growth is expected to improve in 2014-15 following the late recovery observed in 2013. As per IMF estimates, world GDP growth is projected to strengthen from 3.0% in 2013 to 3.6% in 2014 and 3.9% in 2015, largely driven by the Advanced Economies, where growth is expected to increase from 1.3% in 2013 to 2.2% in 2014 and 2.3% in 2015. Within Advanced Economies, growth is likely to be strongest in the US at about 2.8% in 2014 driven by supportive monetary conditions and lower impact on account of fiscal consolidation. Euro Area growth is likely to be varied with the core Euro countries expected to register stronger growth. Emerging Markets & Developing Economies are likely to grow modestly - from 4.7% in 2013 to 4.9% in 2014 and 5.3% in 2015. GDP growth in China is projected to remain at around 7.5% in 2014 as the government seeks to rein in credit growth and push through reforms towards achieving a more balanced and sustainable growth trajectory.
Despite the improved prospects as stated above, global economic recovery remains fragile with significant downside risks. New geopolitical risks emanating from the Ukrainian crisis, impact of a faster-than-anticipated withdrawal from monetary easing by the US and other developed countries on Emerging Markets & Developing Economies, continuing concerns of deflationary conditions and weak sovereign balance sheets in the Euro Area, and weakening growth in China are some of the key challenges facing global economic recovery.
Closer home, the Indian economy witnessed a rather challenging year with GDP growth slowing down to sub-5% for the second year in succession. The slowdown in the pace of growth is largely attributable to weakness in Industry which grew by only 0.7% during the year as per Advance Estimates released by the Ministry of Statistics and Programme Implementation. The Manufacturing sector, which accounts for 55% of Industry, de-grew by 0.2%. Growth in the Services sector stood at 6.9%, well below the trend growth levels. The only bright spot in an otherwise lacklustre economy was the Agriculture sector which grew by 4.6%, with record agricultural output.
Inflation remained high and sticky for most part of the year leading to the RBI hiking the Repo rate by 75 basis points since May ’13. While headline inflation has moderated in recent months, Core CPI inflation remains elevated at around 8% leaving little room for the RBI to ease policy rates to spur growth. Food inflation remains a key monitorable in the ensuing months given the likelihood of El Nino weather conditions and sub-par rainfall.
From a demand side perspective, growth in Private Final Consumption Expenditure (PFCE), the largest component of aggregate demand, slowed down further to only 2.5% during the first 9 months of 2013-14 as compared to 5.0% in 2012-13 and well below the 8.4% average growth recorded during the period 2007-08 to 2011-12. Deceleration in the growth of Investments continued unabated, plummeting to 0.2% in 2013-14. The key causes for this sharp downturn include the cumulative impact of persistently high and sticky inflation levels in the economy leading to a high interest rate regime, lack of political consensus on policy reforms and weak investor sentiment in the backdrop of a sluggish global economy.
There was good news on the ‘twin deficit’ front. As per Revised Budget Estimates, Fiscal Deficit for the year was contained within target at 4.6% of GDP. Such fiscal consolidation was, in large measure, driven by a significant compression in Government expenditure rather than buoyancy in revenue collection given the slowdown in economic activity. The quality of fiscal consolidation leaves room for improvement with further curtailment of non-essential subsidies and better targeting of major subsidies being the key imperatives. The Current Account Deficit recorded significant improvement during the year, narrowing to an estimated 2.0% of GDP as compared to 4.7% in the previous year. Regulatory curbs on gold imports, higher exports on the back of a weak Rupee and import compression aided such improvement. Measures announced by the Ministry of Finance and the RBI during the year to attract capital flows, particularly from non-resident Indians, helped shoring up foreign exchange reserves and arresting the sharp depreciation of the Rupee Vs. the US Dollar witnessed during the period May ’13 to August ’13, and restoring stability in the currency markets.
As per median estimates, based on the Survey of Professional Forecasters conducted by RBI, the Indian economy is likely to post a moderate recovery in 2014-15. GDP growth is estimated to improve to around 5.5% supported by an anticipated pick up in investment activity in view of the part resolution of stalled projects, improved business and consumer confidence and expectation of lower inflation. External demand is expected to improve further during 2014-15 stemming from encouraging growth prospects in Advanced Economies. Tighter global financial and monetary conditions, risks to agricultural growth due to the likelihood of sub-normal monsoons given the impending El Nino weather conditions, possibility of a reversal in capital flows with the interest rate cycle picking up in Advanced Economies represent some of the key downside risks going forward. A stable government at the Centre, greater clarity and certainty in policies and fast track clearances of large projects would go a long way in engendering a much needed boost to investor sentiment and reviving the private investment cycle in particular.
Private Consumption remains one of the major growth engines of the Indian economy. With a large and growing population, significant additions to the working age population over the medium to long-term, rising affluence and literacy, increasing urbanisation and higher outlays on social schemes to foster inclusive growth – the structural drivers for rapid growth in consumption are in place. Even so, the continued deceleration in Private Consumption in 2013-14 is a cause of concern. One of the key reasons for such deceleration is the elevated level of inflation in the economy especially for food items due to the inadequate supply side response by the agricultural sector in the face of growing demand for value-added items. The need of the hour is to boost agricultural productivity and value addition by encouraging investments and adoption of best practices in agricultural value chains while simultaneously improving market linkages. Equally, there is an need to focus on new job creation, which has averaged a dismal 2.3 million per annum during the 7 year period ended 2011-12 as compared to 12 million per annum during the 5 year period ended 2004-05, to address the unsustainable levels of unemployment especially amongst the youth. Stagnation in the manufacturing sector needs to be reversed at the earliest since robust industrial growth is essential for the creation of sustainable livelihoods and absorption of the increasing working age population of the country. Revival of industrial growth would be a critical boosting factor for domestic consumption as well.
While India remains one of the fastest growing major economies in the world, the slowdown in economic growth in the last 2 years is a cause of concern, being far below the desired levels and the country’s potential. Given the low levels of per capita income and the fact that a significant proportion of their population lives in poverty, it is imperative that the economy reverts to its 8% to 9% growth trajectory sooner than later.
For a country like India which has a disproportionately low share of global natural resources relative to its large population, where millions continue to live in abject poverty, and a young demographic profile which entails 12 million people entering the job market every year, the focus both at the national and corporate level should be on fashioning strategies that foster sustainable, equitable and inclusive growth. Policies and regulations must be aligned towards encouraging businesses to adopt a low-carbon growth path and support the creation of sustainable livelihoods and societal capital. Differentiated and preferential incentives, in the form of fiscal or financial benefits to companies that adopt sustainable business practices would act as a force multiplier towards achieving this critical national goal. It is the Company’s belief that businesses can bring about transformational change by pursuing innovative business models that synergise the creation of sustainable livelihoods and the preservation of natural capital with enhancing shareholder value. This ‘Triple Bottom Line’ approach to creating larger ‘stakeholder value’, as opposed to merely ensuring uni-dimensional ‘shareholder value’, is the driving force that defines the Company’s sustainability vision and its growth path into the future.
The Company is a global exemplar in ‘Triple Bottom Line’ performance and is the only enterprise in the world of comparable dimensions to have achieved and sustained the three key global indices of environmental sustainability of being ‘water positive’ (for 12 years), ‘carbon positive’ (for 9 years), and ‘solid waste recycling positive’ (for 7 years). The following sections outline the Company’s progress in pursuit of the ‘Triple Bottom Line’.
FINANCIAL PERFORMANCE
The Company continued to deliver strong financial performance with healthy growth in revenues and high quality earnings. This performance is particularly commendable when viewed against the backdrop of the extremely challenging business context in which it was achieved, namely, a sluggish macro-economic environment which saw GDP growth remaining below 5% for the second year in succession, high inflation and a marked deceleration in the rate of growth of Private Final Consumption Expenditure; steep increase in taxes/duties on Cigarettes for two years in a row; weak demand conditions in the FMCG industry; gestation costs relating to the new FMCG businesses; sharp escalation in input costs in the Paperboards, Paper & Packaging Businesses and a weak demand & pricing environment in the Hotels business.
Gross Revenue for the year grew by 11.7% to Rs. 467126.200 Millions. Net Revenue at Rs. 328825.600 Millions grew by 11.1% primarily driven by a 16.0% growth in the non-cigarette FMCG segment, 14.7% growth in Paperboards, Paper and Packaging segment and 10.6% growth in the Cigarettes segment. Profit Before Tax registered a growth of 18.5% to Rs. 126591.100 Millions while Net Profit at Rs. 87852.100 Millions increased by 18.4%. Earnings Per Share for the year stood at Rs. 110.900 Millions (previous year Rs. 94.500 Millions). Cash flows from Operations aggregated Rs. 107595.000 Millions compared to Rs. 95962.400 Millions in the previous year.
The Company is one of India’s most admired and valuable corporations with a current market capitalization of over Rs. 2700000.000 Millions and has consistently featured amongst the top 10 private sector companies in terms of market capitalisation and profits. Over the last 18 years, the Company’s Net Revenue and Profit After Tax recorded an impressive compound annual growth rate of 15.3% and 21.6% respectively. During this period, Return on Capital Employed improved substantially from 28.4% to 45.8% while Total Shareholder Returns, measured in terms of increase in market capitalization and dividends, grew at a compound annual rate of 25.9%, placing the Company amongst the foremost in the country in terms of efficiency of servicing financial capital.
The Directors are pleased to recommend a Dividend of Rs. 6.00 per share (previous year Rs. 5.25 per share) for the year ended 31st March, 2014. Total cash outflow in this regard will be Rs. 55829.000 Millions (previous year Rs. 48534.900 Millions) including Dividend Distribution Tax of Rs. 8109.900 Millions (previous year Rs. 7050.300 Millions).
The Board further recommends a transfer to General Reserve of Rs 880.000 Millions (previous year Rs. 7500.000 Millions). Consequently, the Surplus in Statement of Profit and Loss as at 31st March, 2014 would stand at Rs. 61390.900 Millions (previous year Rs. 37881.000 Millions).
BUSINESS SEGMENTS
A. FAST MOVING
CONSUMER GOODS
FMCG – Cigarettes
The Cigarette industry had to contend with a steep increase in Excise Duty for the second year in succession along with discriminatory and punitive increases in Value Added Tax (VAT) rates by some States. Such tax increases not only undermine the legal domestic cigarette industry and sub-optimise revenue potential from this sector but also fail to achieve the objective of tobacco control in the country.
According to various independent reports, there is a high degree of dual consumption with a significant number of cigarette consumers in India also consuming other forms of tobacco. High incidence of taxation and a discriminatory regulatory regime on cigarettes have, over the years, led to a significant shift in tobacco consumption to cheaper and revenue inefficient forms like bidis, chewing tobacco etc. Consequently, while India accounts for over 17% of world population, it has a miniscule share of only 1.8% of global cigarette consumption but constitutes nearly 84% of the global consumption of smokeless tobacco.
That demand for cigarettes is highly price elastic is borne out by the fact that tobacco consumption in the form of legal cigarettes declined from 86 million kg. in 1981-82 to 68 million kg. in 2013-14 even as total tobacco consumption in the country increased from 406 million kg. in 1981-82 to 577 million kg. in 2013-14 during the same period. Thus, while overall tobacco consumption is increasing in India, the share of legal cigarettes in overall tobacco consumption has declined from 21% to below 12%. In fact, India’s annual per capita consumption at 96 cigarettes is amongst the lowest in the world compared to 2786 in Russia, 1841 in Japan, 1711 in China and 1028 in USA. The annual per capita cigarette consumption in neighbouring countries like Pakistan and Nepal at 468 and 420 respectively is also far higher than in India.
The requirement therefore is an India-centric tax and policy framework for tobacco that cognises for the unique consumption pattern in the country. The policy of high taxation narrowly focused on cigarettes has also led to the rapid growth of illegal cigarettes in India. According to independent studies, illegal cigarette sales volumes increased by 7% during 2012 with India continuing to be the 5th largest market for illegal cigarettes. The size of the illegal industry in India, comprising smuggled foreign and domestic tax-evaded cigarettes, is currently estimated at 24.3 billion sticks per annum representing 19% of the overall cigarette market.
Cigarettes are a regulated industry with manufacturing permissible only with a government licence. However, under the Industries (Development & Regulation) Act, 1951 there is no requirement for obtaining an industrial licence for units which employ fewer than 50 workers with the aid of power or fewer than 100 workers without the aid of power. Taking advantage of this lacuna, many small units are manufacturing and offering to consumers regular size filter cigarettes at a convenient and low price of Rs. 1 per stick. Such low consumer prices are feasible only if taxes are evaded, as the Excise Duty component alone on a regular size filter cigarette is significantly higher than the price point. The Company continues to represent to policy makers that all cigarette manufacturing units within the country, irrespective of size, be brought under compulsory licensing.
High taxes on domestic cigarettes have also led to an increasing demand for cheaper tax-evaded cigarettes. The revenue loss to the Government on account of this trade is estimated at over Rs. 6000 crores. In addition, as per various international studies, illegal tobacco trade ranks among the top three organised criminal activities in the world. Various research reports indicate that cigarettes are the largest contraband product in the world with the tax arbitrage being used for funding anti-social and terrorist activities. Studies such as the ones undertaken by the U.S. Committee on Homeland Security and the Centre for Public Integrity link cigarette smuggling internationally to organised criminal syndicates and terrorist organisations which utilise the funds for anti-social and unlawful activities.
The menace of illegal trade is compounded by the imposition of high VAT rates by States. Despite a consensus amongst the Empowered Committee of State Finance Ministers that all tobacco products would be taxed at Revenue Neutral Rates applicable to general category of goods, there are 29 different tax rates currently applicable on cigarettes.
Uttar Pradesh and Punjab, which had increased VAT rates to punitive levels of 50% and 55% respectively, witnessed a huge decline in legal cigarette volume seven as illegal and duty-evaded cigarettes gained significant traction leading to loss of potential tax revenues. The recent pragmatic decisions of the State Government of Uttar Pradesh and Punjab to rationalise VAT on cigarettes is a step in the right direction and is already showing positive results in terms of revenue buoyancy and arresting the growth of illegal trade. The Company continues to engage with other State Governments for reduction of VAT rates to moderate levels.
Till the introduction of VAT in 2007, cigarettes were subject to single point taxation by the Central Government. As per the provisions of Additional Excise Duty (Goods of Special Importance) Act, 1957, apart from Basic Excise Duty, tobacco products were subject to Additional Excise Duty (AED) in lieu of State level taxation. The proceeds from this component were exclusively distributed among States.
For a revenue sensitive product like cigarettes and given that about 90% of the value addition takes place at the
manufacturers’ end, several committees such as the Taxation Reforms Committee headed by Dr. Raja Chelliah and the Task Force on Indirect Taxes headed by Dr. Vijay Kelkar have recommended a single point Central taxation model for cigarettes in India. In addition, such a revenue efficient single point taxation system would help removing inter-state trade distortions and barriers in alignment with the principles of the proposed National Competition Policy which seeks to create a single unified national market.
If State level taxation of cigarettes needs to continue, it would be appropriate to implement and adhere to the original principle enunciated by the Empowered Committee of State Finance Ministers on VAT where all goods (other than goods that were exempt or subjected to concessional rate) were to be taxed at a common Revenue Neutral Rate. Going forward, the implementation of the proposed Goods and Service Tax (GST) should ensure that revenue sensitive goods like cigarettes are subjected to uniform standard rates of tax applicable to general category of goods. The combined incidence of Excise Duty and GST should be revenue neutral i.e. maintained at current levels and all existing State level taxes should be subsumed into GST.
The Company continues to engage with the authorities highlighting the need for moderation in tax rates across States to counter illegal products and to also ensure that State Governments are not deprived of their legitimate revenue dues. A new segment of filter cigarettes of ‘length not exceeding 65 mm’ which was announced in the Union Budget 2012 has enabled the industry to continue making offers at the Rs. 2 per stick price point and partially contain the growth in the illegal segment.
While the response from the market has been encouraging, the high central Excise Duty rate of Rs 689 per thousand applicable to this segment coupled with a steep increase in the rate and incidence of VAT, have made it difficult for the legitimate industry to fully counter the menace of illegal cigarettes. The industry continues to engage with policy makers for seeking a reduction in Excise Duty in this segment to enable making viable offers at competitive price points. The Tobacco industry provides direct and indirect employment to 38 million people in India, primarily in the agriculture sector and contributes around Rs 280000.000 Millions to the Government exchequer apart from generating valuable foreign exchange earnings of more than Rs. 60000.000 Millions.
Domestic illegal cigarettes use tobaccos of dubious and inferior quality while smuggled foreign cigarettes do not use any Indian tobaccos. This not only has an adverse impact on demand for high quality Indian tobaccos, but also a cascading impact on incomes of Indian farmers, long-term viability of the legal cigarette industry and Government revenues.
Representations continue to be made to policy makers to introduce a base level Customs Duty on imported cigarettes to prevent undervaluation, placement of tobacco and tobacco products including cigarettes in the restricted list of imports, exclusion of tobacco and tobacco products from preferential treatment under Free Trade Agreements that India is party to and a ban on manufacture of tobacco products in EOU and SEZ units.
The Company believes that there is no inherent conflict between maximising the economic potential from tobacco and addressing tobacco control objectives. This can be achieved through moderation of taxes on cigarettes, minimisation of discriminatory taxes between different classes of tobacco products and a regulatory framework which addresses the genuine concern of all the stakeholders of the tobacco industry. Despite a challenging business scenario, the Company, through a well-balanced portfolio of products, deep consumer insight and strong trade marketing capabilities successfully enhanced its market standing. During the year, the Company continued to make rapid strides towards building a future-ready business through a holistic approach towards portfolio planning and development of best-in-class products which offer superior and differentiated value propositions to consumers.
The year also saw the Company’s entry into the Nicotine Replacement Therapy (NRT) space with the launch of KwikNic - a Nicotine chewing gum - in August 2013. In a category which has been traditionally dominated by the pharmaceutical industry and distributed primarily through chemist outlets, KwikNic has received encouraging market response based on its superior product and packaging quality.
The Company’s manufacturing facilities continue to meet the needs of an agile and flexible supply chain with globally benchmarked operating metrics and world-class quality.
In line with the Company’s endeavour to adopt a low carbon growth path, the Munger and Ranjangaon factories achieved Platinum Rating by the Indian Green Building Council (IGBC). During the year, the Business also commissioned an additional 6 MW of wind turbines in Maharashtra and set up a solar power plant (80 KWp) on a pilot scale at its Kolkata factory. Work on commissioning large scale solar power plants at the Munger and Kolkata factories is in progress while a bio-waste based boiler is being commissioned at the Bengaluru factory.
During the year, the Bengaluru factory received the ‘Solid Waste Management Award’ for effective management of solid waste from Bangalore Chamber of Industry and Commerce and the ‘Water Award’ for sustainable water management practices from Federation of Indian Chambers of Commerce and Industry. Munger factory received the first prize for Industrial Pollution Control from Bihar State Pollution Control Board and Saharanpur factory received Prashansa Patra Award for industrial safety from National Safety Council.
Harmonious employee relationships across units amidst a dynamic and challenging business environment enabled smooth operations during the year. The first Long Term Agreement (LTA) was successfully concluded at the Ranjangaon factory enabling greater flexibility and responsiveness in operations.
The regulatory environment is expected to be uncertain and the year ahead will indeed be challenging. To serve the interests of all stakeholders, the Company will continue to engage with policy makers for a balanced regulatory and fiscal framework for tobacco, equitable VAT rates across States and implementation of a uniform GST rate. The Company remains confident that despite the severe pressures, its robust product portfolio, focus on world-class quality, innovation in processes, investments in cutting-edge technology and superior execution of competitive strategies will enable it to sustain its market standing in the years to come.
FMCG – Others
The FMCG industry witnessed a marked slowdown during the year in the backdrop of a challenging macroeconomic environment which, inter alia, saw deceleration in the rate of growth in Private Final Consumption Expenditure (PFCE) for the second consecutive year. Categories involving higher discretionary spends or with relatively high penetration levels were impacted the most. The trend of premiumisation witnessed in recent years in most major categories also did not carry through as strongly. While, in the near term, the industry is not expected to revert to its high growth trajectory witnessed over the last 10 years, the structural drivers of long-term
growth remain firmly in place. Driven by increasing affluence, urbanisation and a young workforce on the one hand and relatively low levels of penetration and per capita usage on the other, the FMCG industry is poised to bounce back over the medium-term.
The Company continues to rapidly scale up its new FMCG businesses leveraging its institutional strengths viz. deep consumer insight, proven brand building capability, a deep & wide distribution network, strong rural & agri-sourcing linkages, paper and packaging expertise and cuisine knowledge. In addition, the Company continues to make significant investments in Research & Development to develop and launch disruptive and breakthrough products in the market place.
The new FMCG businesses comprising Branded Packaged Foods, Personal Care Products, Education and Stationery Products, Lifestyle Retailing, Incense Sticks (Agarbattis) and Safety Matches have grown at an impressive pace over the past several years, with Segment Revenue crossing the Rs 80000.000 Millions mark during the year.
Despite a challenging operating environment, Segment Revenue grew by a healthy 16% during the year while profitability continued to show an improving trend. The FMCG-Others Segment recorded its maiden profit during the year with a PBIT of Rs. 220.000 Millions representing a positive swing of Rs. 1030.000 Millions over FY13 driven by enhanced scale, operating leverage, supply chain efficiencies and strategic cost management initiatives.
The Company has established a vibrant portfolio of brands such as ‘Aashirvaad’, ‘Sunfeast Dark Fantasy’, ‘Sunfeast Dream Cream’, ‘Sunfeast Delishus’, ‘Bingo!’, ‘YiPPee!’, ‘Candyman’, ‘mint-o’, ‘Kitchens of India’ in the Branded Packaged Foods space; ‘Classmate’ and ‘Paperkraft’ in Education & Stationery products market; ‘Essenza Di Wills’, ‘Fiama Di Wills’, ‘Vivel’, ‘Superia’ and ‘Engage’ in the Personal Care Products segment; ‘Wills Lifestyle’ and ‘John Players’ in the Lifestyle Retailing business; ‘Mangaldeep’ in Agarbattis, ‘Aim’ in Matches and so on. These brands, which have been built organically by the Company, have attained considerable size in a relatively short period of 10 years and in aggregate currently represent over Rs.100000.000 Millions in terms of annualised consumer spend - a feat perhaps unrivalled in the Indian FMCG industry. These worldclass Indian brands, which continue to garner increasing consumer franchise support the competitiveness of domestic value chains of which they are a part and create and retain value within the country.
The Company’s relentless focus on quality, innovation and differentiation backed by deep consumer insights, world-class R&D and an efficient and responsive supply chain will further strengthen its leadership position in the Indian FMCG industry. Highlights of progress in each category are set out below.
Branded Packaged
Foods
The Branded Packaged Foods industry recorded a deceleration in growth rates during the year with consumers curbing discretionary spending and seeking value-for-money offers. Notwithstanding such sluggish demand conditions, the Company’s Branded Packaged Foods Businesses recorded improvement in market standing, growing well ahead of the overall industry. The Branded Packaged Foods Businesses had to contend with unprecedented inflation in input costs, particularly during the second half of the year. Such cost pressure was, however, mitigated through a combination of product mix enrichment, value engineering, proactive sourcing and supply chain optimisation.
The Branded Packaged Foods Businesses continue to invest in consumer insight discovery, focused R&D andproduct development initiatives, and differentiated technology platforms to launch winning products catering to the ever evolving consumer tastes and preferences. Investments towards enhancing the manufacturing and sourcing footprint continue to be made across categories with a view to improving market responsiveness and reducing the cost of servicing proximal markets. The Businesses remain focused on delivering world-class quality across product categories and price points.
In the Bakery and Confectionery Foods Business, the Company increased the scale of its operations and improved market standing in a year that saw significant deceleration in industry growth and volume declines in certain segments. The Company continued to enrich its portfolio of products under the ‘Sunfeast’ range despite the challenging environment with the launch of ‘Sunfeast Delishus’ gourmet cookies in two delectable variants viz., ‘Nut Biscotti’ and ‘Nuts & Raisins’, and ‘Dark Fantasy Choco Fills Luxuria’ in the super premium segment. The Business enhanced its offerings in the Health segment with the launch of the ‘Sunfeast Farmlite’ range in 2 variants - ‘Oats & Raisins’ and ‘Oats & Almonds’. The Business sustained its market leadership position in the highly competitive cream biscuit segment leveraging its strong portfolio of brands and products.
In the Confectionery category, growth was driven by ‘Candyman Jellicious’ - a new jelly variant - and the fruit flavour portfolio. The Business has developed a number of new products/platforms and continues to focus on growing the ‘Re. 1 & above’ portfolio with a view to enhancing profitability.
In the Snack Foods Business, the Company recorded impressive gains in market standing in the fast-growing Savoury Snacks, Noodles & Pasta categories. In the Noodles category, ‘Sunfeast YiPPee!’ registered a robust growth of nearly three times the industry average cementing its position as the fastest growing brand in the market. The Business also launched an innovative premium variant of Sunfeast YiPPee! Noodles with a Chinese Masala flavour and ‘Tricolor pasta’ format in 2 exciting variants. These products have received encouraging consumer response in launch markets.
In the Savoury Snacks segment, while industry growth was impacted by the overall slowdown, ‘Bingo!’ registered a robust growth primarily driven by the finger snacks portfolio comprising unique product formats and flavours under the ‘Mad Angles’, ‘Tangles’ and ‘Tedhe Medhe’ sub-brands. In line with its strategy of introducing innovative products catering to region-specific consumer tastes and preferences, the Business launched ‘Bingo! Galata Masti’ in the finger snacks sub-category for the southern markets, and ‘Apnu Mithu’ & ‘Masala Jalsa’ in the potato chips sub-category for the western markets. The Business also re-launched the potato chips range under the ‘Bingo! Yumitos’ sub-brand with a view to sharpening its positioning in the market. The potato chips range was augmented with the launch of Bingo! Yumitos flat cut chips in select markets with the product receiving good response from consumers. Use of digital media to spur word-of-mouth and clutter-breaking communication continued to improve brand salience.
The Company’s
Staples, Spices and Ready-to-Eat Foods Business continued to grow at a
rapid pace during the year. In the
Staples category, ‘Aashirvaad’ atta
consolidated its leadership position aided by strong performance of the value-added variants comprising Aashirvaad ‘Multigrain’, ‘Select’ and
‘Superior MP’ atta. Aashirvaad atta
continues to gain consumer franchise aided
by increasing preference for branded packaged atta, higher level of household consumption and focused campaigns that reinforce the brand’s
superior quality and blend
attributes.
Given the relatively low levels of per capita consumption of processed food products in India,
the Branded Packaged Foods industry
is poised for rapid growth in the years
ahead driven by favourable demographics,
rising disposable incomes, increasing demand for healthy and hygienic products, increasing
urbanisation and awareness. The
Company is well positioned to establish itself
as the ‘most trusted provider of food products in the Indian market’ leveraging a strong portfolio of world-class brands, deep understanding
of the diverse tastes and
preferences of Indian consumers, focus on
best-in-class quality and operational excellence across the value chain.
INDEX OF CHARGES:
|
S. No. |
Charge ID |
Date of Charge Creation/Modification |
Charge amount secured |
Charge Holder |
Address |
Service Request Number (SRN) |
|
1 |
90048469 |
18/06/2001 * |
1,400,000,000.00 |
ITC LIMITED |
VIRGINIA HOUSE, 37;CHOWRIGHEE, KOLKATA, WEST BENGAL - 700071, INDIA |
- |
|
2 |
90249950 |
16/12/1992 |
100,000,000.00 |
INDUSTRIAL FINANCE CORPORATION OF INDIA |
BANK OF BARODA BUILDING, 16; SANSAD MARG, NEW DELHI, DELHI - 110001, INDIA |
- |
|
3 |
90249944 |
14/10/1992 |
1,150,000,000.00 |
STATE BANK OF INDIA |
CHOWRINGHEE BRANCH, 38; CHOWRINGHEE ROAD, KOLKATA, WEST BENGAL - 700071, INDIA |
- |
|
4 |
90249931 |
14/05/1992 |
8,600,000.00 |
THE INDUSTRIAL
CREDIT & INVESTMENT CORPORATION OF |
163; BACKBAY RECLAMATION,
BOMBAY, MAHARASHTRA - 40 |
- |
|
5 |
90251696 |
03/12/1998 * |
7,000,000,000.00 |
STATE BANK OF INDIA |
34; JAWAHARLAL
NEHRU ROAD, KOLKATA, WEST BENGAL - |
- |
|
6 |
90249861 |
26/03/1990 |
11,500,000.00 |
INDUSTRIAL FINANCE CORPORATION OF INDIA |
2; FAIRLIE PLACE, KOLKATA, WEST BENGAL - 700001, INDIA |
- |
|
7 |
90249828 |
16/04/1998 * |
7,000,000,000.00 |
STATE BANK OF INDIA |
38; CHOWRINGHEE, KOLKATA, WEST BENGAL - 700071, INDIA |
- |
|
8 |
90251676 |
15/07/2010 * |
6,000,000,000.00 |
STATE BANK OF INDIA |
RELIANCE HOUSE, 34 J. L. NEHRU ROAD, KOLKATA, WEST BENGAL - 700071, INDIA |
A93676666 |
|
9 |
90249593 |
20/10/1981 |
1,750,000.00 |
TATA BURROUGHS LIMITED |
MANISH COMMERCIAL CONTRE, 216;-A; DR. ANNIE DESANT ROAD WORLI, BOMBAY, MAHARASHTRA - 400025, INDIA |
- |
|
10 |
90250976 |
18/04/1980 |
2,700,000.00 |
STATE BANK OF INDIA |
JEEVAN DEEP. 1-MIDDLETON STREET, KOLKATA, WEST BENGAL - 700071, INDIA |
- |
* Date of charge modification
FIXED ASSETS
·
Land
·
Building
·
Plant and Equipment
·
Furniture and Fixtures
·
Vehicles
·
Office Equipment
·
Railway Sidings Etc.
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. 60.24 |
|
|
1 |
Rs. 101.92 |
|
Euro |
1 |
Rs. 80.69 |
INFORMATION DETAILS
|
Information
Gathered by : |
GYA |
|
|
|
|
Analysis Done by
: |
RAS |
|
|
|
|
Report Prepared
by : |
TRU |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--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 |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
81 |
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 |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.