MIRA INFORM REPORT

Report Date :

08.09.2014

IDENTIFICATION DETAILS

Name :	CAVINKARE PRIVATE LIMITED GARDEN NAMKEENS PRIVATE LIMITED (AMALGAMATED WITH CAVINKARE PRIVATE LIMITED)
Formerly Known As :	BEAUTY COSMETICS PRIVATE LIMITED
Registered Office :	No.12, Cenotaph Road, Teynampet, Chennai – 600018, Tamilnadu
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	22.03.1990
Com. Reg. No.:	18-046613
Capital Investment / Paid-up Capital :	Rs. 250.000 Millions
CIN No.: [Company Identification No.]	U24246TN1990PTC046613
TAN No.: [Tax Deduction & Collection Account No.]	CHEB02612B
PAN No.: [Permanent Account No.]	AAACB3754B
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer, Trader, Wholesaler, Exporter and Supplier of Herbal Hair Wash Powder, Coconut Oil, Hair Colors, Hair Shampoos, Vegetable Pickles, Milk Products, Fruit Drinks, Snack Foods, Face Creams, Mixed Pickles, Body Powder, Deodorant Sprays, Toilet Cleaners etc.
No. of Employees :	Information declined by management

RATING & COMMENTS

MIRA’s Rating :

Ba (53)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a well-established FMCG Company having fine track record. The company possesses an acceptable financial profile marked by improvement in capital structure as a result of infusion of funds Chrys Capital a private equity investor, in May 2013 which has been utilized to repay more than half of its dept leading to strengthening the liquidity position. Management has witnessed a decent revenue base as the fourth largest company in the Indian FMCG Industry whereas, has reported a loss from its operations during FY 13. The ratings also take into consideration, the company’s established position in the personal care business along with well diversified strong product brands. Trade relations are fair. Business is active. Payment terms are reported as regular and as per commitments. In view of extensive experience of the promoters, the company can be considered for business dealing 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.

INDIAN ECONOMIC OVERVIEW

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes that many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long term rating : “A”
Rating Explanation	Adequate degree of safety and low credit risk.
Date	25.07.2013

Rating Agency Name	CRISIL
Rating	Short term rating: “A1”
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	25.07.2013

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 DECLINED

MANAGEMENT NON-COOPERATIVE (Tel. No.: 91-44-66317560)

LOCATIONS

Registered / Corporate / Regional Office  (South) / Dairy Division :	No.12, Cenotaph Road, Teynampet, Chennai – 600018, Tamilnadu, India
Tel. No.:	91-44- 24317560/ 24317550
Fax No.:	91-44-24362879
E-Mail :	md.sudharsan@cavinkare.com swaminathan@cavinkare.com corpcomm@cavinkare.com openings@cavinkare.com exports@cavinkare.com sales@cavinkare.com ckgcompliance@gmail.com consumerfeedback@cavinkare.com
Website :	www.cavinkare.com
MANUFACTURING PLANTS :
Dairy and Beverage Plant – Erode :	Amudham Dairy Product Private Limited, SF No. 532,  Bhavani to Aaaanthiyur Main Road, Mylampadi, Kannadipalayam Post, Bhavani Taluk, Erode District – 638314, Tamilnadu, India
Mumbai Factory :	Survey No. 31B/32A, Hissa No. 4, Dhamangaon, Old Agra Road,  Taluka - Bhiwandi, District Thane - 421302, Maharashtra, India
Tel. No.:	91-2522-662100
CKPL, Pondy :	R S No. 81/1, Korkadu Village, Netapakkam Commune, Puducherry – 605110, Union Territory, India
Tel. No.:	91-413-2665146
Beverages Plant :	Hasnabad Village, Kodangal Mandal, Mahabub Nagar District, Andhra Pradesh, India
CavinKare Research Centre :	No. 12, Poonamalee Road, Ekkatuthangal, Chennai – 600097, Tamilnadu, India
Tel. No.:	44-22251011/ 12/ 13
Fax No.:	44-22250130
Regional Office (North) :	306-308, Pragatideep Building, Laxmi Nagar District Centre, Delhi – 110092, India
Tel. No.:	11-22454001/ 4007
Regional Office (East) :	Cavinkare Private Limited, 24, Lansdown Terrace, Near National School for Girls, Kolkata – 700026, West Bengal, India
Tel. No.:	33-24660492/ 0498
Regional Office (West) :	B-201, 2nd Floor, Raheja Plaza 1, LBS Marg, Ghatkopar (West), Mumbai 400086, Maharashtra, India
Tel. No.:	22-40072400

DIRECTORS

As on 17.12.2013

Name :	Chinni Krishnan Ranganathan
Designation :	Managing director
Address :	58/5, Dr. Seshadri Avenue, Injambakkam, Chennai – 600041, Tamilnadu, India
Date of Birth/Age :	01.05.1960
Qualification :	B.Sc.
Experience :	31 Years
Date of Appointment :	22.05.1990
PAN No.:	AACPR1620B
Voter ID No. :	EZZ0931188
DIN No. :	00550501
Name :	Devarajan Mohan
Designation :	Managing director
Address :	4, 14th Avenue, Harrington Road, Chetpet – 600031, Tamilnadu, India
Date of Birth/Age :	25.05.1963
Qualification :	M.A
Experience :	28 Years
Date of Appointment :	01.12.2006
PAN No. :	AAGPM9252N
Voter ID No. :	TN/12065/0003/287
DIN No. :	00682941
Name :	Ranganathan Thenmozhi
Designation :	Whole-time director
Address :	58/5, Dr. Seshadri Avenue, Injambakkam, Chennai – 600041, Tamilnadu, India
Date of Birth/Age :	17.05.1970
Experience :	22 Years
Date of Appointment :	01.09.2006
PAN No. :	AACPR1619Q
Voter ID No. :	EZZ0931063
DIN No. :	00550884
Name :	Nellaiappan Thiruambalam
Designation :	Whole-time director
Address :	9A, Manek Apartment, L.D. Ruparel Marg, Malabar Hill, Mumbai – 400006, Maharashtra, India
Date of Birth/Age :	16.09.1957
Date of Appointment :	01.04.2013
Voter ID No. :	TN110630198698
DIN No. :	02121182
Name :	Mrs. Ranganathan Amudhavalli
Designation :	Director
Address :	58/5, Dr. Seshadri Avenue, Injambakkam, Chennai – 600041, Tamilnadu, India
Date of Birth/Age :	22.03.1988
Date of Appointment :	01.04.2013
DIN No. :	01885853
Name :	Mr. R. Manuranjith
Designation :	Director
Address :	58/5, Dr. Seshadri Avenue, Injambakkam, Chennai – 600041, Tamilnadu, India
Date of Birth/Age :	05.01.1994
Date of Appointment :	31.05.2013
DIN No. :	06590425
Name :	Gulpreet Singh Kohli
Designation :	Director
Address :	A-81, Nizamuddin (East), New Delhi – 110013, India
Date of Birth/Age :	15.12.1972
Date of Appointment :	31.05.2013
DIN No. :	00242027

KEY EXECUTIVES

Name :	Sudharsan Madhavachari Durairaghavan
Designation :	Secretary
Address :	T-29, Luz Golden Enclave, 180, Luz Church Road, Mylapore, Chennai – 600004, Tamilnadu, India
Date of Birth/Age :	25.07.1965
Date of Appointment :	15.12.2005
PAN No.:	AJVPM6697H

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 17.12.2013

Names of Shareholders	No. of Shares	Percentage of Holding
C K Ranganathan	6243750	23.74
Chik India Investments Private Limited, India	4688628	17.83
Kranes India Investments Private Limited, India	4688628	17.83
Chinni Investments Private Limited, India	4688628	17.83
Nyle India Investments Private Limited	4688628	17.83
R. Thenmozhi	6250	0.02
Nivesh Investments Limited, Mauritius	1290555	4.91
Total	26295067	100.00

As on 17.12.2013

Equity Share Break up (Percentage of Total Equity)

Category	Percentage of Holding
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	4.91
Bodies corporate	71.32
Directors or relatives of Directors	23.77
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer, Trader, Wholesaler, Exporter and Supplier of Herbal Hair Wash Powder, Coconut Oil, Hair Colors, Hair Shampoos, Vegetable Pickles, Milk Products, Fruit Drinks, Snack Foods, Face Creams, Mixed Pickles, Body Powder, Deodorant Sprays, Toilet Cleaners etc.

Products :

Item Code No. (ITC Code)	Product Description
33051090	Hair Shampoos (Non-Spirituous)

GENERAL INFORMATION

No. of Employees :

Information declined by management

Bankers :

· DBS Bank Limited, 806, Anna Salai, Chennai - 600002, Tamilnadu, India

State Bank of India, Commercial Branch, No.232 NSC Bose Road, Chennai - 600001, Tamilnadu, India

IDBI Bank Limited, 115, Anna Salai, Saidapet, Chennai - 600015, Tamilnadu, India

Punjab National Bank, Mahatma Gandi Road Nungambakkam Branch, Nungambakkam, Chennai - 600034, Tamilnadu, India

Standard Chartered Bank, 19, Rajaji Salai, Chennai - 600001, Tamilnadu, India

Facilities :

SECURED LOANS	31.03.2013 (Rs. In Millions)	31.03.2012 (Rs. In Millions)
LONG TERM BORROWINGS
Rupee term loans from banks	192.000	33.333
Foreign currency term loans from bank	917.939	1349.019
Loans taken for vehicles	3.208	5.655
Other loans and advances, others	0.000	20.625
SHORT TERM BORROWINGS
Term loans from banks	751.396	320.000
Term loans from others	0.000	75.257
Working capital loans from banks	202.304	199.634
Total	2066.847	2003.523

Banking Relations :	--
Financial Institution :	First Leasing Company of India Limited, 749 Anna Salai, Chennai - 600002, Tamilnadu, India
Auditors :
Name :	BSR and Company LLP Chartered Accountants
Address :	Chennai, Tamilnadu, India
Income-tax PAN of auditor or auditor's firm :	AAAFB9852F
Subsidiary Company :	· Cavinkare (Bangladesh) Private Limited Cavinkare Middle East FZE CavinKare Lanka Private Limited United Agro Care (India) Private Limited CIN No.: U01111PY2007PTC002031 Vale Foods Private Limited CIN No.: U01407TN2009PTC071567
Others:	· Trends In Vogue Private Limited CIN No.: U70101TN1995PTC049637 Hemalatha Enterprises Private Limited CIN No.: U24246TN1995PTC051029 Sujatha Biotech Sri Jayaram Educational Trust JSJV Educational Trust Chinni Krishnan Memorial Trust Kranes India Investments Private Limited CIN No.: U65993TN1995PTC054024 Nyle India Investments Private Limited CIN No.: U65993TN1995PTC054026 Chik India Investments Private Limited CIN No.: U65993TN1995PTC054025 Ability Foundation Give Life trust Chinni Investments Private Limited CIN No.: U65993TN1995PTC054023 Kranes Industries India Private Limited CIN No.: U01403TN1990PTC086986 Cavin Solai Private Limited CIN No.: U70109TN2011PTC083620

CAPITAL STRUCTURE

As on 17.12.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
45,350,000	Equity Shares	Rs.10/- each	Rs. 453.500 Millions
14,250,000	Preference Shares	Rs.10/- each	Rs. 142.500 Millions
	Total		Rs. 596.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
26,295,067	Equity Shares	Rs.10/- each	Rs. 262.951 Millions

As on 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
43,000,000	Equity Shares	Rs.10/- each	Rs. 430.000 Millions
14,250,000	Preference Shares	Rs.10/- each	Rs. 142.500 Millions
	Total		Rs. 572.500 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
25,000,000	Equity Shares	Rs.10/- each	Rs. 250.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	250.000	250.000	250.000
(b) Reserves & Surplus	967.888	1352.628	1248.118
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.045	0.000	0.000
Total Shareholders’ Funds (1) + (2)	1217.933	1602.628	1498.118
(3) Non-Current Liabilities
(a) long-term borrowings	1113.147	1408.632	1588.094
(b) Deferred tax liabilities (Net)	0.000	0.000	70.938
(c) Other long term liabilities	69.879	82.185	23.373
(d) long-term provisions	49.495	63.370	30.217
Total Non-current Liabilities (3)	1232.521	1554.187	1712.622
(4) Current Liabilities
(a) Short term borrowings	1127.771	1016.885	442.407
(b) Trade payables	1521.769	1282.499	981.276
(c) Other current liabilities	1021.188	893.087	695.804
(d) Short-term provisions	67.779	68.932	72.218
Total Current Liabilities (4)	3738.507	3261.403	2191.705
TOTAL	6188.961	6418.218	5402.445
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	4033.762	2899.833	2709.126
(ii) Intangible Assets	43.178	66.016	67.235
(iii) Capital work-in-progress	42.681	652.046	244.088
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	45.077	401.834	407.405
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	227.499	281.632	186.727
(e) Other Non-current assets	90.467	67.667	0.676
Total Non-Current Assets	4482.664	4369.028	3615.257
(2) Current assets
(a) Current investments	0.009	0.114	0.622
(b) Inventories	904.545	1011.993	1042.812
(c) Trade receivables	497.728	720.333	270.976
(d) Cash and cash equivalents	133.374	131.889	120.782
(e) Short-term loans and advances	100.305	141.401	350.830
(f) Other current assets	70.336	43.460	1.166
Total Current Assets	1706.297	2049.190	1787.188
TOTAL	6188.961	6418.218	5402.445

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income
		Other Income
		TOTAL (A)	11539.578	9816.144	9167.989
Less	EXPENSES
		TOTAL (B)	11740.192	9733.250	9351.944
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		(200.614)	82.894	(183.955)
Less	TAX (H)		4.175	(50.938)	1.646
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		(204.789)	133.832	(185.601)
	EARNINGS IN FOREIGN CURRENCY
		FOB value of Exports	177.365	213.006	243.580
		Freight and Insurance	5.977	7.698	13.773
	TOTAL EARNINGS		183.342	220.704	257.353
	IMPORTS
		Raw materials and packing materials	107.978	94.482	NA
		Trading goods	349.744	308.890	NA
		Capital goods	5.745	99.907	NA
	TOTAL IMPORTS		463.467	503.279	NA
	Earnings / (Loss) Per Share (Rs.)		(8.19)	5.35	(7.42)

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(1.77)	1.36	(2.02)
Return on Total Assets (PBT/Total Assets}	(%)	(3.29)	1.55	(3.87)
Return on Investment (ROI) (PBT/Networth)		(0.16)	0.05	(0.12)
Debt Equity Ratio (Total Debt/Networth)		1.84	1.51	1.36
Current Ratio (Current Asset/Current Liability)		0.46	0.63	0.82

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	250.000	250.000	250.000
Reserves & Surplus	1248.118	1352.628	967.888
Share Application money pending allotment	0.000	0.000	0.045
Net worth	1498.118	1602.628	1217.933
long-term borrowings	1588.094	1408.632	1113.147
Short term borrowings	442.407	1016.885	1127.771
Total borrowings	2030.501	2425.517	2240.918
Debt/Equity ratio	1.355	1.513	1.840

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Total Income	9167.989	9816.144	11539.578
		7.070	17.557

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Total Income	9167.989	9816.144	11539.578
Profit	(185.601)	133.832	(204.789)
	(2.02%)	1.36%	(1.77%)

LOCAL AGENCY FURTHER INFORMATION

CURRENT MATURITIES OF LONG TERM DEBTS

Particulars	31.03.2013 (Rs. In Millions)	31.03.2012 (Rs. In Millions)	31.03.2011 (Rs. In Millions)
Current Maturities of Long Term Debts	714.275	643.411	435.378

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	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	-----
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	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	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	Yes
34]	External Agency Rating, if available	Yes

LITIGATION DETAILS

CHENNAI COURT
CASE STATUS INFORMATION SYSTEM

Case Status:	Pending
Status Of:	APPLICATION
Case No.:	1798
Year :	2010
Petitioner :	WIPRO LIMITED.,
Respondent :	CAVINKARE PRIVATE LIMITED
Pet's Advocate :	M/S. C. DANIEL AND GLADYS
Res's Advocate :	M/S.SATISH PARASARAN
Category :	Trade Marks Act, 1999
	Last Listed on: No Date Mentioned
Case Updated on :	Jan 30 2013

INDEX OF CHARGES

S.NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	10390950	16/10/2012	150,000,000.00	STANDARD CHARTERED BANK	19, RAJAJI SALAI, CHENNAI, TAMILNADU - 600001, INDIA	B63721617
2	10346096	20/02/2012	100,000,000.00	IDBI BANK LIMITED	115, ANNA SALAI, CHENNAI, TAMILNADU - 600015, INDIA	B36499234
3	10327665	05/11/2012 *	467,900,000.00	DBS BANK LIMITED	806, ANNA SALAI, CHENNAI, TAMILNADU - 600002, INDIA	B63593131
4	10327662	05/11/2012 *	677,550,000.00	DBS BANK LIMITED	806, ANNA SALAI, CHENNAI, TAMILNADU - 600002, INDIA	B63596076
5	10294282	10/08/2012 *	150,000,000.00	DBS BANK LTD	806, ANNA SALAI, CHENNAI, TAMILNADU - 600002, INDIA	B56692056
6	10229261	28/06/2010	460,000,000.00	DBS BANK LIMITED	806, ANNA SALAI, CHENNAI, TAMILNADU - 600002, INDIA	A90032020
7	90004664	21/05/2008 *	112,600,000.00	STATE BANK OF INDIA	COMMERCIAL BRANCH, 232, N.S.C. BOSE ROAD, CHENNAI, TAMILNADU - 600001, INDIA	A41547274
8	90286167	04/04/2012 *	1,430,400,000.00	STATE BANK OF INDIA	COMMERCIAL BRANCH, NO.232 NSC BOSE ROAD, CHENNAI,  TAMILNADU - 600001, INDIA	B38314415
9	90286166	26/10/2004 *	10,000,000.00	ICICI BANK LTD	LANDMARK RACE COURSE CIRCLE, VADODRA, GUJARAT - 390007, INDIA	-
10	90285636	13/12/2003	1,400,000.00	PUNJAB NATIONAL BANK	NUNGAMBAKKAM BRANCH, CHENNAI, TAMILNADU - 600034,  INDIA	-
11	90285345	27/01/2001 *	55,000,000.00	ICICI BANK LTD	110 PRAKASH PRESIDUM MAHATMA GANDHI SALAI, NUNGAMBAKKAM, CHENNAI, TAMILNADU - 600034, INDIA	-
12	90285017	31/03/2007 *	100,000,000.00	PUNJAB NATIONAL BANK	MAHATMA GANDI ROAD NUNGAMBAKKAM BRANCH, NUNGAMBAKKAM, CHENNAI, TAMILNADU - 600034, INDIA	-

* Date of charge modification

UNSECURED LOANS

PARTICULAR	31.03.2013 (Rs. In Millions)	31.03.2012 (Rs. In Millions)
SHORT TERM BORROWINGS
Term loans from banks	0.000	272.655
Term loans from others	173.878	96.913
Working capital loans from banks	0.193	52.426
Total	174.071	421.994

SCHEME OF AMALGAMATION:

(a) Composite Scheme of Arrangement :

The Company (a) in terms of a resolution passed by its Board of Directors at its meeting held on 1st March, 2013 and (b) in terms of Consent Affidavits executed by the Members of the Company dated 8th March, 2013 and 3rd June, 2013, filed before the Hon’ble High Court of Judicature at Madras, a Composite Scheme of Arrangement between CavinKare Private Limited (CKPL), Hemalatha Enterprises Private Limited (HEPL) and Cavin Estate Private Limited (CEPL) and their respective Shareholders and Creditors (Scheme 1), seeking their approval and sanction, inter alia, for:-

a. Amalgamation of HEPL with CKPL with effect from 1.4.2012 (the appointed date);

b. Demerger of Real Estate division of CKPL into CEPL with effect from 1.4.2013 (the appointed date); and

c. Financial restructuring of remaining assets of CKPL with effect from 31.03.2013 (the appointed date)

The said Scheme 1 has duly been approved / sanctioned by the Hon’ble High Court of Judicature at Madras vide its Order dated 21st October 2013. The Company has duly filed the certified copy of the Order with the Registrar of Companies, Chennai on 29th October, 2013. Thus, the Scheme 1 has come into force on 29th October, 2013 with effect from the respective appointed dates for the respective transactions as stated above. The Annual Accounts of the Company for the year ended 31st March, 2013 reflects the impact of the aforesaid Scheme 1, as applicable.

(b) Scheme of Amalgamation :

The Company (a) in terms of a resolution passed by its Board of Directors at its meeting held on 31st May, 2013 and (b) in terms of Consent Affidavits executed by the Members of the Company dated 23rd July, 2013, filed before the Hon’ble High Court of Judicature at Madras, a Scheme of Amalgamation of Garden Namkeens Private Limited (GNPL) with CavinKare Private Limited (CKPL) and their respective Shareholders and Creditors (Scheme 2) seeking their approval / sanction for the said Amalgamation with effect from 1st April, 2013, being the appointed date for the transaction.

The said Scheme 2 has duly been approved / sanctioned by the Hon’ble High Court of Judicature at Madras vide its Order dated 30st October 2013. The Company has duly filed the certified copy of the Order with the Registrar of Companies, Chennai on 14th November, 2013. Thus, the Scheme 2 has come into force on 14th November, 2013, with effect from 1st April, 2012, being the appointed date for the Amalgamation. The Annual Accounts of the Company for the year ended 31st March, 2013 reflects the impact of the aforesaid Scheme 2, as applicable.

(c) Change in Authorised Share Capital of the Company:

Consequent to the filing of certified copies of the subject Orders of the Hon’ble High Court with the Registrar of Companies on 29th October, 2013 and 14th November, 2013 respectively, bringing into force Scheme 1 and Scheme 2, the Authorised Share Capital of the Company stands enhanced from Rs.57,00,00,000 (comprising of 4,30,00,000 Equity Shares of Rs.10/- each and 1,40,00,000 Preference Shares of Rs.10/- each) to Rs.59,60,00,000 comprising of 4,53,50,000 Equity Shares of Rs.10/- each and 1,42,50,000 Preference Shares of Rs.10/- each.

OPERATIONS AND OVERALL PERFORMANCE:

The company operates in the FMCG industry in India which is estimated to be over Rs.2 Trillion and is the fourth largest in the Indian Economy. This industry primarily includes the production, distribution and marketing of consumer packaged goods, that is those categories of products which are consumed at regular intervals. The FMCG’s promising markets include middle class and the rural segments of the Indian population, and give brand makers the opportunity to convert them to branded products. It includes food and beverage, personal care, household products etc.

This industry with more than 24,000 brands and 1,78,000 SKUs (Stock Keeping Units) caters to more than 200 million households through 8.4 million stores .More than a third of the revenue is contributed by Rural India. With growth of the industry driven by both demand and supply related factors (see diagram), the company is well placed to grow further.

Note- There is a technical problem in XBRL which is not allowing them to incorporate a diagram as appearing in the signed directors report The industry is estimated to have grown by 11% in FY 2012-13 amidst slowdown in the economy. The company grew by 18% during the year.

The performance of the economy and the industry in the first half of 2013-14 has been below satisfactory levels. India’s GDP growth, estimated at 4.8% for 2013-14 is the lowest in several years. Pressure on exchange rate and rising inflation are also hindering India’s ability to provide fiscal/ monetary stimulus to support growth. Against this backdrop, the company has grown by 3.57% during the year 2013-14 till date.

SALES PERFORMANCE ACROSS CATEGORIES / BRANDS

Chik Shampoo

Chik Shampoo is the 4th largest brand in India, in terms of volume market share (Source: Nielsen; 2013). With aggressive competition and the pressure on the 50p price point where Chick is dominant, sales of Chik continues to remain subdued. The brand has been re-launched with new packaging and powerful messaging as Chik Advanced Shampoo with natural ingredients like badam and amla (Vital Oil Nutrients), which reduces hair fall and gives thick hair. The new initiatives are likely to help improve sales in the coming years.

Meera Shampoo / Powder / Hair-oil

Meera is a strong brand in the company’s portfolio. The brand grew at a healthy rate of 13% in 2012-13 and is set to repeat its performance in 2013-14 also. The reason for the strong consumer connect being the brand?s delivery of effective traditional hair care for the modern women. Meera is a complete hair care brand for consumers with products spanning shampoo, hair wash powder and hair oil.

Karthika Shampoo / Powder

Karthika brand has seen aggressive growth in the last 2 years. The brand has a strong presence in Andhra Pradesh and Tamil Nadu.

Karthika along with Meera brands, make the traditional hair care portfolio of the Company. During the year ended 31st March 2013, both the brands have made an impressive performance and have jointly contributed to the tune of about Rs 165 Crores to the revenue of the Company.

Nyle Shampoo

Nyle Shampoo is positioned to offer Natural Hair Care for the evolved sophisticated consumers and is available mainly in self-serviced outlets in bottle format. Nyle naturals range is available in six variants Strong and Smooth, Dryness-Control, Hairfall-Defense, Damage-Prevent, Clean and Shine, Long and Bouncy

Indica Hair Colours

Indica range of hair-colours grew by 24% in 2012-13. With the addition of Crème Colours to the range, the brand is expected to grow faster in 2013-14 and would represent one of their biggest growth platforms during the coming years

Spinz and Fairever

Successful positioning of Spinz talc on the pack size-pricing matrix helped the brand grow sales and shares in 2012-13 and the growth trend continues in 2013-14 too. Performance of their Deodorants and Fairness Cream businesses have been below par and plans are afoot for re-launching their brands in these categories

Alliances / Distribution business

The performance of the Alliances Division, where the company distributes products of other principals has been excellent. This division comprises of brands like Adidas, Jovan and Tiger Balm which grew by about 44% in 2012-13 and is growing by nearly 20% in the year 2013-14, till date.

Foods

Foods business consisting of pickle, chikki etc and is concentrated in the Southern States. With consumers oving away from the 50p price-point, the Company had to discontinue several SKUs. A revamped plan, addressing the changing needs of the consumers and the challenges of procurement and manufacturing in a high inflation environment is in the process of being implemented.

Snacks

The investment made by the company in the Garden branded snacks business is beginning to yield results. The initial transition challenges of 2012-13 have been addressed and the business is growing at healthy double digits, in the year 2013-14.

Cavin’s Brand - Dairy Business

Dairy business segment is India is predominantly dominated by co-operatives. The Company is able to create a niche in the dairy products market by offering innovative and quality products at affordable rates to make meaningful difference to the consumers.

During the financial year, the company performed well and demonstrated its outstanding marketing prudence by registering a turnover of Rs.2240.000 Millions (an impressive growth of about 27% over the previous year).

The Company, with a view to bring out innovative and unique products for redefining dairy products in the industry introduced UHT Milk and value added milk beverages category viz., Cavin’s milk shake. Both the products are getting good response from the consumers and Cavin?s Milkshake has emerged as a leader in the milk beverages category with a market share of 24% in South India.

With a view to increase the portfolio of the products covered by Dairy business, the Company has launched yet another innovative product viz., Cavin?s Diet Panneer. The Company is also exploring the possibility of entering the exports market.

Maa Brand - Beverages Business

During the year under review, the beverage business of the Company has contributed a turnover of Rs.880.000 Millions and has recorded a growth of about 15 %. The beverage segment is witnessing tremendous growth in India and is expected to record a double digit growth in the coming years. The Company is expected to reach newer heights by exploring new markets and devising new strategies in this segment of business..

MANUFACTURING EXCELLANCE

The Company’s cosmetics manufacturing plant at Haridwar, Uttarakhand continues to be leading in operational andquality excellence. The Haridwar plant which participated in the International Convention on Quality Circles won two,three-star awards from the Malaysian Productivity Council. It also won Excellent Presentation citation at the National Level Quality Circle competition held at Kanpur. These awards stand testimony to the efforts that go in building operational excellence of the Company. The other plants of the Company at Pondicherry, Erode, Kanchipuram and Hasnabad are also competing with each other in operational excellence. The Company’s state of the art green field manufacturing facility set up at Bhiwandi has commenced producing of snacks and sweets during the year. With this plant, the Company’s ability to produce multiple rang of high quality food / snacks / sweet items including extruded chips / other food products has grown multifold. The company has strengthened and enhanced its milk procurement capacity by establishing direct contact with farmers and also by

establishing localized chilling centers. The Company is currently focusing on enhanced sales of innovative and differentiated dairy products, increasing product mix of dairy products in preference to liquid milk and exploring export potential for milk products to augment its top line and profit margins.

FIXED ASSETS

TANGIBLE ASSETS

· Land

Buildings

Machinery and Equipment

Furniture and Fixtures

Vehicles

Office Equipment

Livestock

INTANGIBLE ASSETS

· Trademarks and Non Compete Fees

Computer Software

PRESS RELEASE

CAVINKARE EYES RETAIL PUSH FOR DAIRY PRODUCTS

Chennai, September 2:  

The diversified fast moving consumer goods major CavinKare bets big on its dairy business, and plans to focus more on expanding its retail horizon for its dairy products.

“Considering the ever-expanding demand for dairy products and the innovation strength our company has, I have enough reasons to believe that our dairy business will lead us to the next phase of growth,” said CK Ranganathan, Chairman and Managing Director, CavinKare.

The company’s dairy products, such as milk, curd, milk powder, cheese, ghee and paneer under the brand Cavin, are currently available across Tamil Nadu.

It recently took its ‘milkshake’, which does not require a cold-chain to distribute, to the North. At present, this segment contributes roughly Rs. 2500.000 Millions, which is 20 per cent of the company’s turnover of Rs.12500.000 Millions.

It is also exploring possibilities of exporting its dairy products to milk-starved countries such as Singapore, Malaysia and Indonesia.

“We have already sent a few consignments of milkshake and milk powder to these countries, and hope to bag some big orders from there.”

Before expanding is retail footprint, the company wants to ensure manufacturing facilities are in place.

It currently owns two facilities – in Kanchipuram and Erode.

“Henceforth, our expansion will be through outsourcing. There are a lot of co-operatives willing to come onboard. We are currently in talks with such co-operatives in Dindigul and Pollachi in Tamil Nadu,” Ranganathan said.

According to him, the market for dairy products in the country is close to Rs.2 lakh crore, with not many big players at the national level. Of course, there are brands such as Amul and Nestle.

But barring its curd, Nestle is predominantly a non-cold chain player, he said.

CAVIN'S TO TAKE ON BIG BOYS

CavinKare presses the accelerator to make its dairy brand the second largest national player

Chennai August 17, 2014

CavinKare, which went into the dairy business with Cavin's brand five years ago, wants half of its revenue to come from this segment in future.

CavinKare, the maker of Chik shampoo sachet, Fairever fairness cream, Spinz deo and Nyle herbal shampoo, closed FY14 with around Rs 12500.000 Millions revenue, of which the dairy business contributed around 20 per cent, food and beverages around 15 per cent and the balance came from personal care products. "While personal care will remain important for us as it is the growth driver for the group, we see tremendous growth opportunities in dairy products," says C K Ranganathan, chairman and managing director, CavinKare.

Ranganathan, who had once revolutionised the shampoo market by launching it in sachets, says his ambition is to make CavinKare the second largest national dairy brand after Amul and believes the company is well positioned to become a national player.

While that will be a tall order, to support this growth, the company plans to spend about Rs 2000.000 Millions in brand building.

Ranganathan says Nestle is also a leading company in the dairy sector, but it is more of a non-cold chain player, except for curd. Cavin's products include milk, milk powders, curd, lassi, butter, cheese, paneer and the company has options to extend to others.

The company forayed into this segment in 2009 and one of its successful products is milkshakes. In one year, it managed to capture around 24 per cent share in the southern market. While at present, only the milkshake is available across the country, the rest of the dairy products are expected to go national in the coming months.

The company, which has about a million distribution outlets, is planning to double the network to support the expansion. The effort is to focus more on value added products, where margins are also better. "We built an equity through milkshake. Considering that milkshake is a strong product in the dairy segment, the company is expecting to build the dairy business around it," says Ranganathan.

On the anvil are branded outlets and a trial will start in the next three months. "We need to have a right model, you have to strike a win-win as the investor and company need to make money," he says, adding the company will look at a franchisee model, which it is familiar with through its salon business, the Green Trends.

To address the supply chain issue, CavinKare plans to join hands with co-operative societies across the country. The company will give assured volume and will share technology and culture.

In Tamil Nadu, it is in talks with co-operative societies in Dindigual, Pollachi and other places. Currently, it has its own facilities in Erode and Kanchipuram districts.

To support the aggressive expansion, CavinKare plans to increase its brand building expenses to Rs 2000.000 Millions from the current Rs 1500.000 Millions. It has roped in cricketer Ravichandran Ashwin and will spend about two per cent of its revenue on research and development.

According to Rabo India Finance, the market size of organised dairy is around $14 billion (Rs 787000.000 Millions), with various sub-categories growing at 15-30 per cent. According to other market estimates, the milk market in volumes in Tamil Nadu and Kerala is around nine million litres a day, growing at 4 per cent, while the curd market in Tamil Nadu is estimated to be 160,000 litres a day, growing at 33 per cent.

CavinKare is also open to more equity dilution to support its aggressive growth plans. Last year, the company raised Rs 2500.000 Millions from Chryscapital and the money was used to pay debt and on brand building. Ranganathan says the company, which had a debt of about Rs 3750.000 Millions, is expected to become debt-free by end of this fiscal.

Ranganathan also sees a lot of potential in exports of milk-related products. While getting the codes for exports took some time, it would now look at South East Asian countries, including Singapore, Malaysia and Indonesia for exports. Demand is more for UHT milk (ultra-high temperature)."We have specific demand for our milk powders because of the processing technology edge," he says.

According to Ranganathan, in 2013-14, the company reported around 12 per cent growth, against the original target of around 21-22 per cent. That's because the company went in for consolidation, whereby all divisions were merged for better distribution synergy.

The process, though, should have been completed earlier." The company should have merged the divisions earlier. Each of the divisions had their own separate network and was operating like a separate company. You are weak in the market place, when you go as a separate company,"Ranganathan says.

Three or four salesmen used to go to the same store, leading to a lot of duplication of efforts. From now on, only one salesman will visit that store, offering a bouquet of products of the company.

"Some of the distributors said they wanted only one of our products, and we had to let them go. At some point, we had to bite the bullet," Ranganathan says, adding the company spent Rs 8 crore in technology to make the transition.

FRESH HOPE SPRINGS FOR FMCG FIRMS

Mumbai July 3, 2014

Dhirendra Singh, chairman and managing director of Vadodara-based Manpasand Beverages, has had a fairly hectic schedule these past few weeks. Along with his usual engagements, he has had to find time for a series of meetings with his investment bankers - Kotak Mahindra Capital and Indiainfoline. The maker of the Mango Sip brand of juice drinks, which competes with the likes of Maaza from Coca-Cola, Slice from PepsiCo and Frooti from Parle Agro, is looking at an initial public offering (IPO) of about Rs 4000.000 Millions in six to eight months from now.

Singh's business is growing, necessitating capital for expansion. "We closed 2013-14 with a turnover of Rs 3000.000 Millions. We are eying a turnover of Rs 400-500 crore this year on the back of new launches in categories such as natural mineral water and carbonated drinks," he says. "We want to expand our juice portfolio and add more flavours. This will require investment in manufacturing, distribution and marketing, which explains the IPO. I will be taking a final call on the amount to be raised along with my bankers shortly."

He also says that besides the need for growth capital, the desire to give existing investor SAIF Partners an exit route helped his decision to consider a public offer at this stage. "This is the right time to tap the capital markets. As the stock markets climb, it will increasingly become expensive to get in," he adds.

The uptick in the stock markets has created fund-raising options for a number of companies, including those in the Rs 2.5 lakh crore fast-moving consumer goods (FMCG) sector. The buzz around small and mid-sized FMCG firms going public is growing by the day.

Improved sentiment

The bid to raise public funds comes as companies anticipate better times ahead after the installation of a new government at the Centre, voted to power on the assurance that it would put the slowing economy back on track. "Growth in FMCG depends on how the economy performs. When economic growth picks up, consumption improves, which helps consumer goods companies grow," says Abheek Singhi, senior partner and director, The Boston Consulting Group (BCG).

While the next few quarters are expected to be challenging for most FMCG companies due to rising inflation and deficient rainfall, which are likely to put margins under pressure in the near term, analysts say that the tide will change by the next fiscal when economic activity is expected to pick up.

Green shoots are already beginning to show. Manufacturing activity rose to a four-month high in June. The HSBC Purchasing Managers' Index (PMI), widely tracked by companies, investors and policy makers to gauge the health of the economy, stands at 51.5. A reading above 50 denotes expansion, while one below 50 implies contraction. Analysts say that PMI has been picking up pace since April this year and is expected to gather momentum going forward. Many companies, say analysts, are preparing for this period of recovery by tapping into channels for funds, IPO being one avenue available to them.

Like Singh, billionaire bottler Ravi Jaipuria is also contemplating listing two key companies of his RJ Corp over the next one year. This includes Varun Beverages, which represents his bottling interests, and Devyani International, the fast-food and beverage operations. Jaipuria has not specified the amount he is looking to raise (some reports suggest it is Rs 500 crore), but says this is the right time to tap the capital markets, given its current buoyancy. Other regional firms such as the Rajkot-based Balaji Wafers as well as national players such as Cafe Coffee Day, headquartered in Bangalore, too are considering IPOs.

"Tapping the primary market was long overdue and the change of government has acted as a catalyst," says Navroz Mahudawala, founder of Mumbai-based investment firm Candle Partners. "India's consumption story still attracts takers, notably among institutional investors, and if the IPO is not huge and overpriced, there should be retail participation as well."

CavinKare, the company that pioneered the use of sachets in hair care, may not be interested in IPOs at the moment, but its promoter, C K Ranganathan, agrees about this being the right time to go public. "We raised money last year from ChrysCapital and at the moment we are sufficiently funded," he says about why he isn't going public.

Private equity link

Ranganathan was fortunate to have tied up with ChrysCapital last year because private equity (PE) investors are not too keen on investments in FMCG companies citing steep valuations. Data bears this out. Between January and May 2014, PE investments in FMCG, as tracked by advisory firm Grant Thornton, were down 17.04 per cent to $101.62 million (Rs 6100.000 Millions) from $122.5 million (Rs 7350.000 Millions) for the same period last year. Compared with the previous year (2012), the drop was even steeper at nearly 59 per cent. According to Grant Thornton, PE investments in FMCG between January and May 2012 were worth $246.6 million (Rs 14800.000 Millions).

Sanjeev Krishnan, leader, private equity and transaction services, PricewaterhouseCoopers, says, "Typically, a company goes through much less intensive diligence when raising funds through an initial public offer. This could be a trigger for the rush. As a result, it is possible that many companies which have tried PE funding over the last few months and haven't succeeded for various reasons could go in for an IPO now."

Disclosing that he has been routinely receiving queries from food companies on the prospect of raising money through listing, R Laddha, director, investment banking, J R Laddha Financial Services, a Mumbai-based financial consultancy, says that companies, notably in food, need capital to invest in supply chain and back-end operations besides distribution, manufacturing and marketing. "IPOs," he says, "are one way through which they can raise money, now that investor sentiment is improving."

What has also buoyed the sentiment of promoters is the recent easing of IPO norms by the Securities and Exchange Board of India. It has allowed companies with a market capitalisation of under Rs 40000.000 Millions to sell 25 per cent of their stake or stocks worth Rs 4000.000 Millions, whichever is lower. In other words, explain merchant bankers, the issue size needn't be Rs 10000.000 crore as was the norm earlier for companies with a market capitalisation below Rs 40000.000 Millions.

This, say experts, is aimed at giving the primary markets a push with an eye on getting even small- and mid-sized unlisted firms (besides the larger ones) to come out with public issues. In the last two months, the Bombay Stock Exchange's benchmark Sensex has moved up nearly 15 per cent in comparison to the same time last year when the rise was down 2 per cent, a pointer to the interest in the equity market that FMCG companies can cash in on.

BHARATIYA MAHILA BANK TIES UP WITH CAVINKARE'S TREND IN VOGUE

The bank has also announced tie up with Naturals beauty salon and spa this week for the same purpose

Chennai April 17, 2014

Soon after partnering with hair and beauty salon Naturals, to offer loans to women entrepreneurs to become franchisee of the salon, Bharatiya Mahila Bank has tied up with CavinKare's salon business arm, Trends In Vogue Private Limited (TIV) to offer the same loan facility to women entrepreneurs.

Usha Ananthasubramanian, CMD of Bharatiya Mahila Bank (BMB), has signed a memorandum of understanding with C K Ranganathan, CMD of CavinKare Private Limited As per the MoU, BMB would provide a loan amount between 65-75% of the total project cost and is available for franchises to avail across India. The rate of interest will be from 11.5% to 12.5%, with one% concession to the women entrepreneur.

This would help TIV in expanding its franchisee model, under which the company selects women entrepreneurs to start the salon under its brand. The company has the responsibility to identify the right place for the salon and would train the staff to offer standardised service to the customers.

"We see tremendous potential in the Indian beauty industry for women to establish themselves as entrepreneurs. Loans below Rs 10.000 Millions does not require collateral," said Ananthasubramanian.

She added that lending to franchisees of a brand like TIV would assure the repayment of loan, since there is a stength coming from the brand.

CK Ranganathan, CMD, CavinKare, who said that the company is happy to associate with BMB in providing collateral free loans to prospective franchises across the country, especially women, said that the company would take the responsibility of finding right place for salon for its franchisees, negotiate with the land owner for rent, would bring in cost efficient service providers and suppliers, which would bring down the cost for the franchisee.

TIV currently has 200 salons, of which 140 are franchisee run while the rest is company own facility. Plans are to increase the presence to a total of 500 salons by end of current fiscal year. Of the new 300 salons expected to start operation this fiscal, around 260 would be franchisee run salons.

TIV is also looking at similar tie up with other banks to make the facility available, but tie up with BMB would ensure women participation in business, he added.

The expansion plans also include increase in number of its premium salon, Limelight. The number of Limelight salons would go up from current nine to 33 by end of the financial year, he added. While the investment for Green Trends salon would be around Rs 30-40 lakh depending upon the location, Limelight would require double the investment.

It may be noted that the Bank, has tied up with Naturals, a unisex beauty salon, to promote women entrepreneurs in the organised beauty salon industry. The women who are planning to star Naturals spa and salon or lounge can avail loans from BMB, it announced.

Box

Bharatiya Maghila Bank, incorporated on August, 2013, is in the process of tieing up with various associations to promote entrepreneurship among women. It has tied up with Institute of Chartered Accountants of India (ICAI) to provide loans to students and also financial support for the women Chartered Accountants to start their own firms.

The Bank is also expecting its model of mobile van for bank services in another two to three months. The mobile van, with an ATM and an officer for cash transactions is under pilot study in Delhi and Bombay.

"Almost 40% fo the CAs are women, but they start as partners in one of the firms and end up their career as partner itself. We want more of them to come up with own firms," said Usha Ananthasubramanian, CMD of Bharatiya Mahila Bank.

The Bank is also planning to tie up with Institute of Cost and Works Accountants of India (ICWAI) and Institute of Company Secretaries of India (ICSI) to offer similar support, she said. It is also providing various products and insurance in tie up with New India Assurance Company Limited, to working women and their family. It has made advance of around Rs 870.000 Millions for the period ended March 31, 2014 and has to get board approval for the plans for the current fiscal year, she added.

BMB was incorporated with an initial capital of Rs 10000.000 Millions fully funded by the Government and currently has 23 branches across the country.

LOW-COST WARRIOR CAVINKARE REBOOTS FOR BETTER PROFITS

Plans to become a Rs 3,000-cr company in three years from Rs 12000.000 Millions now

Chennai June 10, 2013

Three years ago when Chennai-based consumer products maker CavinKare decided to shift its focus from low-priced goods to premium products, it was clear the company had embarked on a journey to reinvent itself.

CavinKare was known for catering to the bottom of the pyramid. Started as a small partnership firm from a village near Chennai in 1983, it pioneered the concept of selling shampoos in sachets at a time when shampoos were available only in bottles. In no time, it swept through the rural market, forcing others such as market leader Hindustan Unilever to follow suit. As of last year, 87 per cent of shampoos sold in the country were in sachets, of which CavinKare had 25-30 per cent share. Also, until three years ago, nearly 80 per cent of CavinKare's revenue came from low-priced goods.

However, now the company is in the midst of redesigning itself, changing its growth strategy and rejigging the top management as it plans to become a Rs 30000.000 Millions company in three years. It had a turnover of Rs 1,200 crore in 2012-13. To fuel this growth, the company has raised Rs 2500.000 Millions from ChrysCapital, the private equity fund. Besides, it has also changed its value proposition from offering low-end products for the rural market to premium products that offer the promise of higher margins (CavinKare is a closely held company, so its financials are not in the public domain).

What's prompting the rethink? It all started in June 2010 when Chairman and Managing Director C K Ranganathan, then 50, suffered a drug allergy which affected his immune system, forcing him to take a long medical leave. Ranganathan used the six-month break to reflect on the business and came up with insights that are now being implemented in the company.

CavinKare had changed drastically in the last ten years. From being a purely personal care company, it had started diversifying by early 2000. It entered the food business by buying out Andhra Pradesh-based Ruchi Agro Foods' Ruchi brand in 2003 for Rs 1550.000 Millions. It followed it up with Mumbai-based Garden Namkeens, a snack maker, in 2009, and Salem-based soft drinks maker, Maa Fruits India, for Rs 2760.000 Millions in 2008. It also entered the dairy business through acquisition. In 2009, it bought a small dairy farm in Kanchipuram. The idea was to scale up the dairy business by buying small units.

The flip side

However, the strategy had its drawback. CavinKare's competency level was not keeping pace with its whirlwind diversification plans. "Competency grows at a certain level and speed," says Ranganathan. Many of its new forays did not yield the desired result. Its restaurant business was particularly a non-starter as the company did not have the skills to make it work and had to eventually shut it down. By 2009, the company had entered into homecare, food, salons, restaurants and dairy businesses. But in the din of new businesses, say analysts, its core business got neglected. Also, while the market was moving towards premium brands, CavinKare was steadfast in its focus on the bottom of the pyramid, a strategy that wasn't helping anymore.

Ranganathan realised that having too many things on his plate was a drain on the company's talent and cash reserves. Generating cash to build a brand was also proving to be difficult. CavinKare realised that while the low-end segment was behind its initial success, making up about 80 per cent of its revenues, the premium segment was the way of the future.

"We have decided to focus on products which will not be affected by inflation. Not that we have vacated the low-price segment altogether; we've only reduced the dependency drastically," says Ranganathan. Barring its shampoo brands Chik and Karthika, the company has moved up all other products-shampoo brand Nyle and skin cream Fairever-to the premium category by raising their prices by nearly 60 per cent. The revenue contribution of the low-priced segment too has fallen from 80 per cent in 2008-09 to 20 per cent. Surprisingly, the move came at a time when consumers were cutting back on spending amid the slowdown and most companies were moving to smaller pack sizes to boost demand."We took our birth on 50-paise and Rs -1 shampoo sachets and we are not ashamed of it; in fact, we are proud of it, it was very good for us," says Ranganathan. However, the company could not increase the price when inflation rose as the scope for raising prices for low-end products is limited. Having understood that chasing turnover has its limitations, CavinKare has now turned its focus to chasing margins instead.

Fixing the gaps

It has plugged two of its biggest handicaps: lack of cash and shortage of talent. In April this year, it roped in two senior people from Heinz India. Nellaiappan Thiruambalam, the chairman and managing director, was appointed as director and chief executive for the personal care and foods division, while Rahul Shankar was brought in to head sales. In addition, the funding fromChrysCapital has boosted its cash reserves. Ranganathan says with the infusion of capital and strengthening of manpower, the company is set for faster growth.

"Three sectors-personal care (which will be fundamental), dairy segment and food and beverages-will be the growth drivers in both national and international markets," he says. In the personal care segment, besides launching new products in the premium segment such as the Raaga range of skin care, massage oil and hair colour products, the company also plans to set up a new factory in north India.

CavinKare is also aspiring to become the leader in the Rs 70000.000 Millions salon market. It plans to launch a new brand of salons for women, a new brand of spa, and expand the brand overseas, particularly to the US, Europe and West Asia. As of now CavinKare has two brands in the salon segment-Green Trends, which caters to the middle-class, and Limelite, positioned as a premium brand. In the next two years, it plans to increase the number of outlets from 120 at present to 350. The company will invest over Rs 800.000 Millions in the expansion. At present costs, it takes about Rs 40 lakh to set up a Green Trends saloon and Rs 6.500-7.000 Millions to set up a Limelite outlet, says the company. After the expansion, revenue from the salon business is expected to increase from Rs 700.000 Millions now to Rs 2500.000 Millions by 2013-14. Part of the revenue (7-8 per cent) will be invested in building the brand.

As regards its dairy business, CavinKare plans to take its products to markets beyond south India in the next 18 months. It has roped in cricketer Ravichandran Ashwin as the brand ambassador. To add a local twist to its brands, it also plans to get some local celebrities on board to endorse its products. The dairy business is expected to generate Rs 10000.000 Millions in revenue in the next 2-3 years, a huge jump from Rs 2500.000 Millions at present. To grow the business further, Rs 2500.000-3000.000 Millions will be invested in expansion, which includes setting up a plant in northern India. In addition, CavinKare also plans to raise the contribution of value-added products to the revenue from 40 per cent at present to 60 per cent. At present, its dairy offerings include milk, curd, yoghurt, paneer and lassi.

ROAD AHEAD

* Plans to become a Rs 30000.000 Millions company in three years from Rs 12000.000 Millions now

* Has moved all low-priced products except Chik shampoo and Karthika to the premium segment

* Launhed Raaga range of premium skin care, hair colour and massage oil

* Wants to become the number one player in salon industry; to increase total outlets from 120 to 350

* Wants to expand market for its dairy products to north India in the next 18 months.

* Intends to raise share of value-added products like yoghurt, paneer to 60 per cent of revenue from 40 per cent at present

ENGINEERING A TURNAROUND AT CAVINKARE

May 17 2013

Chennai: For years, CavinKare Private Limited’s C.K. Ranganathan, whose company once threatened consumer products heavyweight Hindustan Unilever Limited’s (HUL’s) dominance with low-cost offerings from whitening creams to shampoos, resisted pitches from private equity (PE) funds keen to take a slice of his upstart start-up.

Now, years of underinvestment in the brands, the lack of management bandwidth, and an unwise diversification into foods and dairy products have taken their toll, and it is Ranganathan—one of the three C.K. brothers who are behind the sachet revolution in India’s consumer goods industry—who is doing the pitching.

Ranganathan declined comment for this story and said he wouldn’t answer an email questionnaire sent to him on 6 May. In a March interaction, he confirmed the attempt to raise money and said it would be used to expand all businesses and repay debt. Back then, he mentioned that CavinKare was looking to raise around Rs.350 crore by selling 10% of the company.

A person familiar with the matter and a Chennai-based investment banker, both of whom didn’t want to be identified, questioned the valuation.

The person said CavinKare’s implied valuation of Rs.35000.000 Millions was at least two times what the company was worth and added that Ranganathan was looking to raise close to Rs.8000.000-10000.000 Millions, which would mean selling nearly 50% of the company.

The investment banker said the valuation was aggressive. “If CavinKare is diluting 10% for Rs.3500.000 Millions, the company is valued at Rs.35000.000 Millions, which is a premium for a consumer goods company whose margins have been shrinking and has debt on its books.”

As of 31 March, Chennai-based CavinKare had debt of Rs.2410.000 Millions on its books, of which close to Rs.1490.000 Millions represents foreign currency loans.

To be sure, CavinKare was profitable, but only just, in 2011-12. According to filings with the Registrar of Companies, the company earned a profit of Rs.133.000 Millions on revenue of Rs.980 crore. The previous year, it had a loss of Rs.185.000 Millions on revenue of Rs.9080.000 Millions. In 2009-10, it had a profit of Rs.360.000 Millions on revenue of Rs.7640.000 Millions.

The numbers reflect a significant comedown for a poster boy of the local consumer goods business that was wooed by the who’s who of the country’s PE funds. Several months ago, as the debt started to pinch, Ranganathan appointed Mumbai-based JM Financial to find an investor. JM Financial did not respond to an email from Mint.

The first person said that while several funds had talked to CavinKare, some had walked away citing the high valuation.

Undoing the harm

A third person familiar with the matter said the company’s whitening cream Fairever gave HUL, which has a competing product called Fair and Lovely, sleepless nights in the 1990s and early 2000s. Yet, CavinKare failed to translate Fairever’s potential into market gains.

Fair and Lovely’s share of the market was 46.9% in 2012, declining from 50.9% in 2007, according to market research firm Euromonitor International. The second leading brand was L’Oreal’s Garnier, which raised its share to 7.3% in 2012 from 4.2% in 2007. Fairever’s share of the market declined to 3.5% from 3.7%.

In the last five years, the face and skincare market more than doubled to Rs.117890.000 Millions from Rs.50510.000 Millions, according to Euromonitor.

Still, with several strong, but sub-scale brands, CavinKare can effect a turnaround, experts said.

Ranganathan is also clearly trying to strengthen the company’s management and hired N. Thiruambalam as director and chief executive officer of the personal care and foods business last month.

Thiruambalam was previously chairman and managing director of the Indian unit of HJ Heinz Co., which makes Heinz tomato ketchup, energy drink Complan, Nycil prickly heat powder and Sampriti ghee. At the time of his appointment, he said: “It is my ambition to help make CavinKare a top three player in the personal care and food segments in India.”

Ranganathan is also trying to undo the harm done by a move by the company to create an alternative distribution network by employing 550 sales people. The exercise cost around Rs.35 crore and didn’t work, said a former employee who didn’t want to be identified.

It was a good try, said an expert.

CavinKare has always been disruptive with its ideas and it was trying to do something similar in distribution, said Ankur Bisen, vice-president and head of consumer and retail products at Technopak Advisors Private Limited, a retail consultancy.

Describing the attempt as brave, Bisen said it wasn’t a model that could be scaled “over large geographies”.

In the March interaction, Ranganathan said the company was reviewing the new distribution model and would take a decision on continuing with it.

That willingness to remain open to new ideas and drop them when they don’t work may well help the company. A Chennai-based entrepreneur describes Ranganathan as a “role model” who is neither “flashy” nor “arrogant”. He doesn’t behave like a person who has built a Rs.10000.000 Millions business, added this entrepreneur, who didn’t want to be identified.

Ranganathan is part of the entrepreneurship cell of industry lobby Confederation of Indian Industry (CII). (Mint has been working closely with Ranganathan and CII to profile relatively unknown entrepreneurs from the southern part of the country.)

Pitfalls of diversification The company that is CavinKare began life as Chik India in 1983 with a single product—a shampoo called Chik that was also available in a satchet.

It then became Beauty Cosmetics Ltd before finally taking its current name in 1998. The company owns brands including Nyle shampoo, Meera and Kathika soap nut powder, Fairever fairness cream, and Spinz talc and deodorant.

In 2009, it diversified into the dairy business and restaurants (branded Veg Nation; the three that were part of the chain were sold last year). It also set itself an ambitious goal of doubling revenue to Rs.15000.000 Millions by 2011.

CavinKare had already entered the foods business by buying out Andhra Pradesh-based Ruchi Agro Foods’ Ruchi brand in 2003; Salem-based soft drinks maker Maa Fruits India Private Limite for Rs.2760.000 Millions in 2008; and Mumbai-based Garden Namkeens, a snack food maker, in 2009.

Its entry into the dairy business was also acquisition-led. In 2009, it bought a small sick dairy farm in Kanchipuram. The idea was to scale up the milk business by buying such units as it would take time to set the business up from scratch, Ranganathan said in a 2009 interview.

CavinKare is a classic example of a company that understood its customers deeply and tasted success before entering non-core businesses and being caught up in operational issues, said Abraham Koshy, a professor of marketing at the Indian Institute of Management, Ahmedabad (IIM-A). As a result, it seems to have lost focus on personal care products, he added.

Indeed, many of the diversifications required skills the company didn’t have.

An executive at a PE firm that focuses on consumer products said CavinKare had no business diversifying into restaurants because they require “a different set of skills”.

The former employee said the company’s assumption that it could leverage its distribution network for dairy products was proved wrong because “time is a key factor in the distribution of perishables”.

Again, dairy isn’t an entirely bad idea, said Bisen of Technopak. It is capital-intensive, but lucrative, and largely unorganized, he said.

IIM-A’s Koshy points to a larger issue—of a focus on what the company was not capable of doing at the cost of what it had done well in the past.

And the personal care business needs constant focus, said an analyst.

Companies in the business need to launch new products every six months, said V. Srinivasan, who tracks packaged consumer goods companies at Angel Broking Limited

CAVINKARE TO LAUNCH NEW PRODUCTS BY FY14

MUMBAI, JAN 1:  

Diversified FMCG company CavinKare plans to launch 2—3 products in the food and hair-care segments by FY-2014, a top company executive has said.

“We are in the final stages of developing innovative products in the food and hair-care segments and by FY’14, we will launch 2—3 products. We will begin this journey by unveiling an innovative product in the foods segment next year (2013),” CavinKare Executive Vice—President (Human Resources), Mr Murali Santhanam said here.

Innovation will be the company’s focus not only for developing products, but also in the corporate culture for the next two years, he added.

On international expansion, he said after establishing a foothold in the national market, CavinKare is also increasing its popularity in the global arena.

“We are present in South Asian countries Bangladesh and Sri Lanka, the Middle East and Africa. We want to strengthen it further and are now looking at Egypt, West Africa and the US, mainly for the personal care and food product segments,” he added.

CavinKare also has marketing tie-ups with international companies like Coty Inc and Adidas to distribute their deodorants and perfumes.

Mr Santhanam said the company signed a marketing agreement with Haw Par recently to distribute Tiger Balm in India.

The company has six manufacturing units, including one in Sri Lanka, and a research and development centre in Chennai equipped with the latest technologies to support various divisions in their endeavours.

The CavinKare brand portfolio consists of shampoos (Chik, Meera, and Nyle), fairness creams (Fairever), deodorants and talc (Spinz and Hi5), pickles and snacks (Ruchi, Chinni’s), hair colour (Indica), beverages (Maa), dairy (Cavins), restaurants (CK’s Foodstaurant and Vegnation) and beauty salons (Green Trends and Limelite).

CAVINKARE TO USE CHRYSCAPITAL FUND TO STRENGTHEN BRANDS

CHENNAI, JUNE 3:  

The Chennai-headquartered fast-moving consumer goods major CavinKare Private Limited has announced a private-equity investment of Rs 250 crore from ChrysCapital, a Mauritius-based firm in a structured deal. JM Financial acted as the sole financial advisor to CavinKare. This deal was reported by Business Line on May 23.

However, the company did not mention anything about the equity dilution.

A press release from the company says this investment will be used to strengthen and expand its existing brand portfolio ranging from shampoos, fairness cream, hair colours, deodorants, dairy, snacks, foods and beverages.

Commenting on the development, C.K. Ranganathan, Chairman and Managing Director of CavinKare, said the investment from ChrysCapital will give a strong financial boost to the Company, given the rapid expansion and diversification undertaken in the last few years. “Our objective is to rapidly grow the company’s brand portfolio by a few notches across different markets,” he said in a statement.

Gulpreet Kohli, Nominee of ChrysCapital on the CavinKare board, said, “ChrysCapital is very optimistic about its latest investment. The FMCG market in India is looking at exponential growth with the size and demographic potential. We chose CavinKare because it has high quality, system-driven and highly transparent business practices and is innovative and differentiated in its approach in building product categories.”

With a turnover of Rs 12000.000 Millions, CavinKare has brands in personal care, dairy, snacks, foods and beverages. The brand portfolio consists of shampoos (Chik, Meera and Nyle), fairness creams (Fairever), deodorant and talc (Spinz), hair colours (Indica), dairy (Cavin’s), food and snacks (Ruchi, Chinni’s and Garden), and beverages (Maa).

CMT REPORT (Corruption, Money Laundering and Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

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 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.60.44
UK Pound	1	Rs.98.64
Euro	1	Rs.78.20

INFORMATION DETAILS

Information Gathered by :	HNA
Analysis Done by :	SUB
Report Prepared by :	MRI

SCORE and RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		53

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 and 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	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.