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CRISIL SME Ratings                                              Universal Medicap Limited                                 ...
Important NoticeThe rating is a one-time exercise and the rating will not be kept under surveillance. This rating is valid...
INDEXCRISIL SME RATING.......................................................................................................
CRISIL SME RATING                                      CRISIL SME   Definition                                        Rati...
1    FACT SHEETName of the company                     Universal Medicap Limited (Universal Medicap)Year of incorporation ...
Industry                           PharmaceuticalsChief executive                    Mr. Jagdish Bhagwanbhai PatelBranch o...
STRENGTH AND RISK FACTORS                  STRENGTHS                                            RISK FACTORS•   Competent ...
•   Forward contracts undertaken to cover    foreign exchange (forex) fluctuation risks.•   Strong financial risk profile ...
MANAGEMENT PROFILE(Promoters/Directors)                Name                       Mr. Jagdish Bhagwanbhai Patel           ...
Name                       Mr. Ileshkumar Bachubhai Patel (cousin of Mr.                                           Jagdish...
Name                         Mr. Bhanubhai Ramanbhai Patel (cousin of Mr.                                              Jag...
OWNERSHIP PATTERNAs on September 30, 2006Authorised capital : Rs.200 lakhPaid up capital    : Rs.150 lakh                 ...
BUSINESS PROFILEPRODUCT PROFILE               Name of the product                                                Applicati...
SUPPLIER INFORMATIONDomestic sourcing in 2005-06 (per cent)         : 22.00Imports in 2005-06 (per cent)                  ...
CUSTOMER INFORMATIONDomestic sales in 2005-06 (per cent)                 : 84.00Exports in 2005-06 (per cent)             ...
ORDERS IN HANDThe total order book position was at Rs.177.88 lakh as in November, 2006Sales registered till October 31, 20...
OTHER INFORMATION1) Availability of raw materials          :   Ample2) Price fluctuation in raw materials     :   High3) P...
INDUSTRY OVERVIEW   •   The Indian pharmaceutical market is growing at an annual rate of 8-9 per cent per annum and       ...
Competition Scenario:   •   The organised sector can be classified into multinational companies (MNCs) and Indian       co...
BANK AND INSURANCE DETAILSBank Details                              Facilities               Loan/limit           Rate of ...
FINANCIAL PERFORMANCEPROFIT AND LOSS ACCOUNT                For the year ended March 31                   2006        2005...
Dividends                                                                  60.00    45.00          -Transferred to reserve...
GRAPHS                          Turnover trends                                                        Margin trends      ...
LIABILITIESAs on March 31,                               2006          2005          2004(Rs. lakh)                       ...
Notes to the Liabilities:   • Reserves include subsidies of Rs.23.01 lakh received from the state government for setting u...
ASSETSAs on March 31,                                      2006             2005               2004(Rs. lakh)             ...
installation of gamma radiation plant.   •   Receivables greater than six months are considered to be good.   •   Other cu...
KEY FINANCIAL RATIOS                                                         2006       2005       2004                 Fo...
Notes:Universal Medicap maintains high inventory level (imported rubber) to cover the exchange fluctuationrisks. The compa...
SITE VISIT INFORMATIONAddress of the site visited                  : Village Rania, Taluka Savli, District Baroda         ...
PROMOTERS DETAILSName                                         Mr. Nilesh R. Patel                                         ...
CRISIL OFFICESHead Office:CRISIL House,121-122, Andheri-Kurla Road,Andheri (East),Mumbai – 400 093, India.Tel.: +91 (022) ...
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Universal crisil rating_report_11dec06

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Universal crisil rating_report_11dec06

  1. 1. CRISIL SME Ratings Universal Medicap Limited CRISIL # Rating – SME 1* # CRISIL is a majority-owned affiliate of Standard & Poors, a division of The McGraw-Hill Companies. Standard & Poors is the worlds foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. ‘Highest’ indicates the level of creditworthiness, adjudged in relation to other SMEs Report Date Valid Till * November 29, 2006 November 28, 2007 * Please refer to important notice on page 2© 2006 CRISIL Limited. All Rights Reserved 1
  2. 2. Important NoticeThe rating is a one-time exercise and the rating will not be kept under surveillance. This rating is validfor one year from the report date, subject to no significant changes/events occurring during this periodthat could materially affect the business or financial parameters of the organisation as mentioned in thereport. CRISIL, however, recommends that the user of the rating seeks a review of the rating if theorganisation experiences significant changes/events during this period which could impact theorganisation / its rating.The rating and this report are based on the information provided to CRISIL by the organisationand/or obtained by CRISIL from sources it considers reliable including published annual reports,management meetings, industry data and discussions with bankers, customers and suppliers. CRISILdoes not guarantee the accuracy, adequacy or completeness of any information on which the rating andthe report are based and is not responsible for any errors or omissions for the results/opinionsobtained from the use of the rating or the rating report. The rating does not constitute an audit of theorganisation by CRISIL. The rating is also not a recommendation to enter into or not enter into anytransaction with the organisation. CRISIL reserves the right to disclose the organisation’s rating andthe rating report to Government and / or Regulatory Authorities / Courts of Law if required to do so.It is especially stated that CRISIL, its Directors, Rating Committee members, employees and othersassociated with the rating assignment do not have any financial liability whatsoever including but notlimited to attorney’s or consultant’s fees to the users of this rating or this rating report. No part of thisreport may be reproduced by any means without CRISIL’s prior written approval.© 2006 CRISIL Limited. All Rights Reserved 2
  3. 3. INDEXCRISIL SME RATING................................................................................................................. 4FACT SHEET............................................................................................................................... 5STRENGTH AND RISK FACTORS........................................................................................... 7MANAGEMENT PROFILE ....................................................................................................... 9BUSINESS STRATEGY..............................................................................................................11OWNERSHIP PATTERN ......................................................................................................... 12BUSINESS PROFILE ................................................................................................................ 13 PRODUCT PROFILE...................................................................................................................................13 CAPACITY UTILISATION:........................................................................................................................13 SUPPLIER INFORMATION ......................................................................................................................14 CUSTOMER INFORMATION ..................................................................................................................15 OTHER INFORMATION...........................................................................................................................17INDUSTRY OVERVIEW .......................................................................................................... 18BANK AND INSURANCE DETAILS ...................................................................................... 20FINANCIAL PERFORMANCE................................................................................................ 21 PROFIT AND LOSS ACCOUNT ..............................................................................................................21 GRAPHS ..........................................................................................................................................................23 LIABILITIES...................................................................................................................................................24 ASSETS.............................................................................................................................................................26 KEY FINANCIAL RATIOS ........................................................................................................................28 AUDITORS .....................................................................................................................................................29SITE VISIT INFORMATION................................................................................................... 30PROMOTERS DETAILS ......................................................................................................... 31© 2006 CRISIL Limited. All Rights Reserved 3
  4. 4. CRISIL SME RATING CRISIL SME Definition Rating SME 1 SME 1 Highest indicates SME 2 High Highest SME 3 Above Average level of credit worthiness SME 4 Average adjudged in relation to SME 5 Below Average other SMEs SME 6 Inadequate SME 7 Poor SME 8 Default© 2006 CRISIL Limited. All Rights Reserved 4
  5. 5. 1 FACT SHEETName of the company Universal Medicap Limited (Universal Medicap)Year of incorporation 1989Business Manufactures rubber and plastic products used in healthcare applications. Products: Rubber closures for glass moulded/tubular vials, rubber plungers for disposable syringes, rubber gaskets, rubber discs, rubber stoppers, and other pharmaceutical packaging material. All the products are available as: • Bioclean – RFS (ready for sterilisation) rubber stoppers. • Bioclean – RFU (ready for use) gamma radiated rubber stoppers.Legal history • Incorporated in 1989 as a partnership firm, Universal Medicap was originally named Medicap and managed by three families. • In 1992, the families split amicably and the Patel family took over the entire business. Following this, the firm was converted into a closely held public limited company.Legal status Public limited company (closely held)Registered with Registrar of Companies, GujaratRegistration number 18009Administrative office UML House, Parag Park, near Ranoli Crossing, At Dasrath – 391 740, Baroda, Gujarat, India Tel.: (265) 2243055, 2240230, 2240004, 6540105/6, Fax: (265) 2240507l: E-mail: universal.medicap@sril.net, medicap@satyam.net.in Website: www.umlindia.comRegistered and Village: Rania, Taluka: Savli,manufacturing facilities District Baroda – 391 780, Gujarat, India, Tel.: (2667) 244228, 244318, 244768 Mumbai office Tel.: (022) 261287131DMF approvals were taken for the formulations of rubber closures. These were for the compatibility of the formulationswith preservatives and other ingredients of the products.© 2006 CRISIL Limited. All Rights Reserved 5
  6. 6. Industry PharmaceuticalsChief executive Mr. Jagdish Bhagwanbhai PatelBranch offices NilNumber of employees Permanent: 150 Contractual: 80 Total: 230Certifications/awards ISO 9001:2000 Approval of DMF (Drug Master File), USA for six productsBrands NoStatutory compliance Income tax returns filed on: July 31, 2006 Sales tax returns filed on: not applicable (NA)(As informed by the Wealth tax filed on: September 9, 2006management, not independently Excise duty: NAverified) Employees Provident Fund dues paid on timeKey financials Year ended March 31, 2006 2005 2004 Net sales Rs.lakh 1,706.40 1,321.02 1,194.91 Profit after tax Rs.lakh 221.88 145.49 94.39 Net worth Rs.lakh 680.92 527.13 432.52 Total debt Rs.lakh 1,173.94 767.96 513.34 Gearing Times 1.72 1.46 1.19 Interest Cover Times 4.99 4.11 3.91 • Projected sales for 2006-07 (refers to financial year, April 1 to March 31): Rs.30 crore. • Sales registered till October 31, 2006: Rs.16 crore. • Total debt as on March 31, 2006 includes Rs.2.03 crore of unsecured loans taken from the promoters, their relatives and friends.DIVISION OF UNIVERSAL MEDICAPUniversal ISO-MED is a division of Universal Medicap, and was started in March 2006. The divisionacts as a gamma radiation sterilization facility for agro, food, and healthcare products. UniversalMedicap utilises this facility for in-house sterilisation and also undertakes job work for otherpharmaceutical companies in a smaller proportion. As on March31, 2006, job work income constituted0.11 per cent of Universal Medicap’s total turnover.© 2006 CRISIL Limited. All Rights Reserved 6
  7. 7. STRENGTH AND RISK FACTORS STRENGTHS RISK FACTORS• Competent management with business • Faces stiff competition from international experience of more than 20 years in the same players. line of business. • High inventory levels at 187 days, 192 days,• Experienced and qualified second line of and 193 days for the year ended March 31, management. 2006, 2005, and 2004, respectively. The• Diversified product and customer profile company maintains a high level of imported enhance stability in revenues rubber stocks.• Good growth prospects linked to: o Growth of Indian pharmaceuticals industry; domestic formulations market is likely to grow at a 15 to 18 per cent compounded annual growth rate (CAGR); injectables (accounting for 9 per cent of the formulations market) segment is expected to grow at a CAGR of 15 per cent. o Good order book position at Rs.177.88 lakh as in November 2006; sales of Rs.16 crore already registered in the current year.• The company has registered drug master files (DMF) for six products, including different polymers and formulations, which have improved its export market.• Strong marketing network with in-house team and agents catering to various parts of the globe.• In-house research and development (R&D) facility – developed a gamma radiation facility in the division.© 2006 CRISIL Limited. All Rights Reserved 7
  8. 8. • Forward contracts undertaken to cover foreign exchange (forex) fluctuation risks.• Strong financial risk profile characterised by a high profitability margin at 13 per cent, return on capital employed (RoCE) at 26.05 per cent, net cash accruals/total debt at 20 per cent, and interest cover at 4.99 times as on March 31, 2006.© 2006 CRISIL Limited. All Rights Reserved 8
  9. 9. MANAGEMENT PROFILE(Promoters/Directors) Name Mr. Jagdish Bhagwanbhai Patel Designation Chairman and Managing Director Current responsibilities Overall management Age 47 years Qualification BCom Experience • Twenty nine years in the same line of business • Previously, Mr. Patel was a partner in Nobel Rubber, a family-owned business which manufactured rubber enclosures. However, the firm is currently non- operational. Net worth* Rs.245.70 lakh as on March 31, 2006 Name Mr. Nilesh Ramanbhai Patel (cousin of Mr. Jagdish Bhagwanbhai Patel) Designation Director Current responsibilities Overall management Age 43 years Qualification BCom Experience Twenty years in the same line of business Net worth* Rs.58 lakh as on March 31, 2006* As informed by the management, not certified.© 2006 CRISIL Limited. All Rights Reserved 9
  10. 10. Name Mr. Ileshkumar Bachubhai Patel (cousin of Mr. Jagdish Bhagwanbhai Patel) Designation Director Current responsibilities Production management Age 49 years Qualification BCom Experience Twenty years in the same line of business Net worth* Rs.68.59 lakh as on March 31, 2006 Name Mr. Rameshbhai Gordhanbhai Patel (cousin of Mr. Jagdish Bhagwanbhai Patel) Designation Director Current responsibilities Not active in day to day operations Age 50 years Experience NA Net worth* Rs.1.31 lakh as on March 31, 2006 Name Mr. Ashwinibhai Maganbhai Patel (cousin of Mr. Jagdish Bhagwanbhai Patel) Designation Director Current responsibilities Not active in day to day operations Age 52 years Experience NA Net worth* Rs.3.38 lakh as on March 31, 2006* As informed by the management, not certified.© 2006 CRISIL Limited. All Rights Reserved 10
  11. 11. Name Mr. Bhanubhai Ramanbhai Patel (cousin of Mr. Jagdish Bhagwanbhai Patel) Designation Director Current responsibilities Not active in day to day operations Age 51 years Experience NA Net worth* Rs.56.62 lakh as on March 31, 2006* As informed by the management, not certified.BUSINESS STRATEGYUniversal Medicap plans to expand the facility by purchasing additional land adjacent to the existingfacility. Universal Medicap also plans to install machinery (three) in the new facility. The total cost ofland and building is about Rs.3 crore and the cost of installation is Rs.4.5 crore. The fundingrequirement will be partly me through the company’s internal accruals (to the extent of 30 per cent)and partly through bank loans (to the extent of 70 per cent). The company’s revised gearing is likely tobe 1.29 times, which has been factored in the rating. The proposed capital expenditure (capex) plan islikely to materialise by 2006-07.VISIONUniversal Medicap’s objective is to achieve a turnover of Rs.500 crore by the end of 2016. Thecompany plans to grow at a rate of 20 per cent per annum. Further, the management plans toundertake an additional investment of Rs.130 crore towards the expansion of its existing facility andinstallation by the end of 2015-16.© 2006 CRISIL Limited. All Rights Reserved 11
  12. 12. OWNERSHIP PATTERNAs on September 30, 2006Authorised capital : Rs.200 lakhPaid up capital : Rs.150 lakh Per cent of shares Name held Mr. Jagdish Bhagwanbhai Patel 8.10 Mr. Nilesh Ramanbhai Patel 6.21 Mr. Bhanubhai Ramanbhai Patel 3.65 Mr. Ileshkumar Bachubhai Patel 1.50 Mr. Ashwinibhai Maganbhai Patel 1.00 Mr. Rameshbhai Gordhanbhai Patel 0.23 Friends and relatives 29.16 Directors’ family 50.15 Total 100.00Total number of equity shares stands at 15,00,000 at Rs.10 each© 2006 CRISIL Limited. All Rights Reserved 12
  13. 13. BUSINESS PROFILEPRODUCT PROFILE Name of the product Application • Rubber closures: Used as pharmaceutical o for glass moulded/tubular vials packaging material o for large volume, glass moulded/tubular vials, o for blood collection tubes/vacutainers • Special closures for freeze-fried lyophilised products • Rubber plungers for disposable syringes and pre-filled syringes • Rubber gaskets for bulk drugs • Rubber discs for caps and bottles • Special high technology formulations compatible with preservatives and other ingredients of injectable products • Rubber coated stoppersUniversal Medicap’s manufacturing facility offers RFU and RFS rubber closures and stoppers(sterilized by gamma irradiation).CAPACITY UTILISATION:Universal Medicap manufactures a wide range of products which cater to the customers’ requirements.Hence, capacity utilisation is not applicable.© 2006 CRISIL Limited. All Rights Reserved 13
  14. 14. SUPPLIER INFORMATIONDomestic sourcing in 2005-06 (per cent) : 22.00Imports in 2005-06 (per cent) : 78.00 CIF value of imports ( Rs. lakh) : 2005-06 Rs.409.41 lakh 2004-05 Rs.380.30 lakhName of the supplier Product Length of Per cent share in State/country relationship total purchases (years) (2005 - 06)20 Microns Ltd. Rubber 11 2.10 Gujarat chemicalsIndian Petrochemicals Rubber 11 3.16 GujaratCorporation Ltd. (IPCL)Darshanik Mktg. & Rubber and 12 7.57 GujaratServices P. Ltd. (agent of rubberIPCL) chemicalsTrigon Gulf FZCO Rubber 11 28.04 RussiaExxonmobil Chemical 10 32.89 EuropeAsia PacificTerms - domestic : Credit for 30 to 45 daysTerms - imports : Letter of credit for 60 days, payment against documentsSuppliers feedback : Payment is on time. Suppliers are satisfied with the relationship.on the rated entity© 2006 CRISIL Limited. All Rights Reserved 14
  15. 15. CUSTOMER INFORMATIONDomestic sales in 2005-06 (per cent) : 84.00Exports in 2005-06 (per cent) : 16.00 FOB value of exports( Rs. lakh) : 2005-06 Rs.298.14 lakh 2004-05 Rs.220.42 lakh Name of the Product Length of Per cent share City State/country customer relationship in total sales* (years)Fresenius Kabi Rubber 10 3.83 Pune MaharashtraIndia Private closures,Limited stoppers, andCadila other products 25 4.43 Ahmedabad GujaratHealthcareLimitedStrides Arcolab 10 4.84 Bangalore KarnatakaLimitedNicholas 10 5.26 Mumbai MaharashtraPiramal IndiaLimitedIpca 10 7.45 MumbaiLaboratories LtdANB 9 25.00 per cent of - ThailandLaboratories the total exportsRenata 8 30.00 per cent of BangladeshAcme 9 the total exportsLaboratoriesLibra 9* The per cent share in total sales of all customers keeps fluctuating every year.Terms - domestic : Credit for 30 to 70 daysTerms - exports : Letter of credit for 45 daysCustomers feedback : Product quality is good. No delays in the delivery.on the rated entity© 2006 CRISIL Limited. All Rights Reserved 15
  16. 16. ORDERS IN HANDThe total order book position was at Rs.177.88 lakh as in November, 2006Sales registered till October 31, 2006 was at Rs.16 crore.MARKETING ARRANGEMENT • Universal Medicap has a dedicated sales team of four personnel based in Baroda. The team conducts personal visits to the target customers. The company develops new customers through product development and sales promotion. • Universal Medicap also participates in various pharmaceutical fairs and exhibitions held in Thailand, Malaysia, Taiwan, and Bangladesh. • The company has developed an agent network spread across the globe. Universal Medicap has six exclusive agents, based in South Africa, Thailand, Malaysia, Bangladesh, and Jordan. The company pays a commission of about 5 to 10 per cent to these agents.COMPETITORSUniversal Medicap faces limited competition from the domestic market. A few of the domestic playersare Bharat Rubber, Jamnadas, and Paragon. The prices of Universal Medicap’s stoppers are 25 to 30per cent higher as compared to other domestic players. The company, in technical collaboration withNaniwa, Jaipan, has developed internationally acknowledged products.Universal Medicap has to compete with international players, a few of them being Helvoet, Belgiumand West Pharma, Singapore. However, Universal Medicap is able to compete with the internationalplayers due to the superior quality of its products.© 2006 CRISIL Limited. All Rights Reserved 16
  17. 17. OTHER INFORMATION1) Availability of raw materials : Ample2) Price fluctuation in raw materials : High3) Product range : Diversified4) Marketing network : Adequate5) Competition risk : Average6) Power availability : Stable7) Research and development : Undertaken8) Ability to raise funds : Good9) Expansion/diversification plan : YesTECHNICAL COLLABORATIONIn 1996, Universal Medical had entered into a technical collaboration with Naniwa Rubber CompanyLimited (Naniwa). Established in 1996, Naniwa is a leading Japanese company engaged in themanufacturing of rubber packaging products and other rubber and plastic healthcare products.Universal Medicap has already assimilated the technology, and hence the company has not renewed theagreement, which was dissolved in 2005.The company, in technical collaboration with Bhabha Atomic Research Centre, developed a gammairradiation system. This has enabled the company to provide value addition to its customers byproviding sterilised products, thereby saving time and cost for the customers.TECHNOLOGY – COMPUTER AIDED DESIGN (CAD) CENTREThe company has a computerised cell that creates custom-made designs for its customers. Using thelatest CAD technology, optimal design solutions are used to meet the specific requirement of thecustomers.© 2006 CRISIL Limited. All Rights Reserved 17
  18. 18. INDUSTRY OVERVIEW • The Indian pharmaceutical market is growing at an annual rate of 8-9 per cent per annum and a CAGR of 20 per cent, and is expected to rise to Rs.390 billion by the end of 2009. India’s healthcare expenses, one of the lowest in the world, constitute 0.8 per cent of the country’s gross domestic products (GDP). • The pharmaceuticals sector comprises active pharmaceutical ingredients (API) and formulations manufacturers. The formulations market is growing at a CAGR of 15-18 per cent. The domestic formulations market is estimated to grow at a moderate 5-7 per cent over the medium term, driven largely by a growth in lifestyle segments like cardiovascular, diabetes and neurology. Injectables account for 9 per cent of the formulations market, and are likely to grow at a CAGR of 15 per cent. • Universal Medicap manufactures a wide range of rubber stoppers and rubber closures: o Considering the growth in injectables and formulations, the market for rubber stoppers is likely to grow at a CAGR of 15 per cent for the next five years. The future demand for rubber stoppers are likely to grow to 2,400 million in 2009-10 from 1,203 million (numbers) in 2004-05. Further, the demand for RFS stoppers is likely to grow to 420 million in 2009-10 from 208 million in 2004-05. Ninety four per cent of the domestic demand for rubber closures is catered to by the domestic market and about 6 per cent is sourced from the international market. • Given the increasing trend of outsourcing by global pharmaceutical majors of their API requirement, the global contract manufacturing market is estimated to grow at a CAGR of 22 per cent to US$5 billion (about Rs.22,500 crore) by 2009-10 (Source: CRIS INFAC- a research arm of CRISIL). While India currently accounts for a fraction of this large pie, it is expected to garner a higher share over the medium term. Low cost of manufacturing, reverse engineering skills, and expertise in process chemistry are the main drivers of this expected growth.© 2006 CRISIL Limited. All Rights Reserved 18
  19. 19. Competition Scenario: • The organised sector can be classified into multinational companies (MNCs) and Indian companies. The share of MNCs declined over a period of time. Sixty one per cent of industry sales are generated by the Indian firms, 38 per cent comes from the multinational firms and the remaining 1 per cent is generated from the public sector. A part from Universal Medicap, some of the domestic manufacturers of rubber stoppers are Jamnadas Industries, Paragon Industries, Bharat Rubber, Rubber Industries India, and others. The international players are Helvoet, Belgium, West Pharma, Singapore, and Stelmi France. • The unorganised sector accounts for 30 per cent of the total industry sales. The unorganised sector is mainly involved in formulation manufacturing, with a fragmented production base across the country. • Success in this competitive market is determined by strong R&D capabilities and large capacities to cater to the huge demand. Certification of facilities and manufacturing processes by independent agencies (USFDA, WHO-GMP) is the basic requirement for players to be meaningful exporters to the regulated markets.© 2006 CRISIL Limited. All Rights Reserved 19
  20. 20. BANK AND INSURANCE DETAILSBank Details Facilities Loan/limit Rate of interest Length of Name of the availed (Rs. lakh) (per cent) relationship bank (Years)State Bank of Cash credit/ 575.00 9.50 1India Working credit Standby line of 100.00 credit Term loan 750.00 Corporate loan 100.00 Open term loan 50.00 Letter of credit 150.00 0.25 per cent Bank guarantee 25.00 commissionUntil 2005, Universal Medicap was banking with HDFC Bank Ltd. The company shifted to State Bankof India for a better localised service facility. The company had a term loan and cash credit facilitywith its former bank at a rate of 10 per cent.Feedback: The account’s performance is excellent.Insurance Details Insurer Date of Sum insured Asset insured validity (Rs. lakh)Analytical Bajaj Allianz General Insurance Co. Ltd September 562.04Laboratory 14, 2007Building, furniture 1,065.60and fixtures, plantand machinery,stocks, electricalinstallations,transformers, dieselgenerator sets, andcontrol systemTotal 1,627.64All policies are in force; information as provided by the management.© 2006 CRISIL Limited. All Rights Reserved 20
  21. 21. FINANCIAL PERFORMANCEPROFIT AND LOSS ACCOUNT For the year ended March 31 2006 2005 2004 (Rs. lakh) Audited Audited Audited Net sales 1,706.40 1,321.02 1,194.91 which includes exports of 298.11 220.43 161.98Other operating income - - -Total operating income 1,706.40 1,321.02 1,194.91 Raw materials, stores, and spares consumed 709.21 583.01 536.57 Power and fuel 78.12 66.83 60.35 Direct labour 41.04 33.73 27.68 Other manufacturing expenses 60.62 60.14 62.27 General and administration expenses 113.64 128.32 101.11 Selling and distribution expenses 107.00 75.37 68.06 Employee expenses 105.07 81.89 75.72Cost of sales 1,214.70 1,029.29 931.76OPBDIT 491.70 291.73 263.15 Interest expense 76.28 60.86 59.97 Other finance charges 21.36 18.45 7.45Total finance cost 97.64 79.31 67.42OPBDT 394.06 212.42 195.73 Depreciation (net) 80.56 58.54 60.39OPBT 313.50 153.88 135.34 Interest income 0.77 0.81 1.26 Other income/expense (including gain/loss on asset sales) 16.42 52.10 6.45Total nonoperating income/(expense) 17.19 52.91 7.71Profit before tax 330.69 206.79 143.05 Extraordinary income/(expenses) 0.60 10.69 0.45 Tax provision 109.41 71.99 49.11Profit after tax 221.88 145.49 94.39© 2006 CRISIL Limited. All Rights Reserved 21
  22. 22. Dividends 60.00 45.00 -Transferred to reserves 161.88 100.49 94.39Notes to the Profit and Loss Account: • Other non-operating income mainly includes revenues from trading of imported raw materials, namely, rubber (Rs.8.13 lakh in 2005-06, Rs.53.87 lakh in 2004-05, and Rs.7.46 lakh in 2003-04) in the domestic market, exchange rate fluctuation, bad debts recovered, and dividend received. There were also some intangibles written off and loss on sale of assets. • Selling and distribution expense for the year ended March 31, 2006 has increased as the company undertook huge investment in sales promotion activities such as conducting an exhibition for scientists and participating in trade exhibitions.© 2006 CRISIL Limited. All Rights Reserved 22
  23. 23. GRAPHS Turnover trends Margin trends 1,800 1,706.4 35.0 30.0 28.8 1,600 1,321.0 1,400 1,194.9 25.0 22.0 Per cent 1,200 20.0 22.1 Rs. lakh 1,000 15.0 13.0 800 10.0 11.0 600 5.0 7.9 400 - 200 2003-04 2004-05 2005-06 0 2003-04 2004-05 2005-06 OPBDIT margin (%) PAT margin (%) Where a rupee is spent Direct Other labour Gen. and Power mfg. 3% admin. and fuel exps. exps. 6% 5% 9% Selling and distn. Raw exps. materials 9% 59% Employe e exps. 9% Total outside liabilities/Tangible net Capital employed worth 100 2.5 2.2 80 54 59 2.0 2.0 63 60 1.6 % Times (x) 1.5 40 1.0 20 46 41 37 0.5 0 31-Mar-04 31-Mar-05 31-Mar-06 - Debt/Capital employed (%) 31-Mar-04 31-Mar-05 31-Mar-06 Net worth/Capital employed (%)© 2006 CRISIL Limited. All Rights Reserved 23
  24. 24. LIABILITIESAs on March 31, 2006 2005 2004(Rs. lakh) Audited Audited AuditedEquity share capital 150.00 150.00 150.00Preference share capital - - -Reserves and surplus 530.92 377.13 282.52Reported net worth 680.92 527.13 432.52 Less: intangible assets - - - less: revaluation reserve - - - Less: miscellaneous expenditure not - - -written offTangible net worth 680.92 527.13 432.52Deferred tax liability (Net) 73.28 69.49 73.10Long-term debt Loans from banks 322.06 259.09 95.86 Borrowings from group 202.67 189.90 140.32companies/promoters. Other term debt - - -Total long-term debt 524.73 448.99 236.18Short-term debt Cash credit loans from banks 620.01 305.84 225.34 Borrowings from group - - -companies/promoters Other short-term loans 29.20 13.13 51.82Total short-term debt 649.21 318.97 277.16Total debt 1173.94 767.96 513.34Other current liabilities Accounts/notes payable 119.50 72.19 129.29 Net tax provision - - - Dividends payable 68.08 50.88 - Advances from customers - - - Others 165.04 175.41 68.78Total other current liabilities 352.62 298.48 198.07Total liabilities 2280.76 1663.06 1217.03© 2006 CRISIL Limited. All Rights Reserved 24
  25. 25. Notes to the Liabilities: • Reserves include subsidies of Rs.23.01 lakh received from the state government for setting up the unit in a backward area. • Loans from bank included term loan for the purchase of machinery and vehicles. • Borrowings from group companies/promoters are paid an interest of 11.25 per cent per annum. • Other short-term loans are the bills payable/discounted against personal guarantees of directors. • Other current liabilities include sundry creditors for expenses and capital goods, provision for expenses, and other outstanding liabilities.© 2006 CRISIL Limited. All Rights Reserved 25
  26. 26. ASSETSAs on March 31, 2006 2005 2004(Rs. lakh) Audited Audited AuditedFixed assets Land and building 569.07 387.91 222.66 Plant and machinery 510.52 331.52 321.81 Other fixed assets 438.17 277.08 235.79 Less: revaluation reserve - - - Gross block 1,517.76 996.51 780.26 Less: accumulated depreciation 425.89 345.33 299.68 Net block 1,091.87 651.18 480.58 Capital work in progress 69.71 222.83 24.63Net fixed assets 1,161.58 874.01 505.21Deferred tax asset (Net) - - -Current assets Total inventory 464.34 418.06 365.06 Receivables 441.39 323.88 281.82 of which receivables greater than 6 months are 11.19 6.96 13.08 Cash and bank 12.53 3.14 2.90 Investments in liquid instruments - - -(including gilts) Advances to suppliers - - - Others 43.35 19.33 22.46Total current assets 961.61 764.41 672.24Non current assets Investment in group companies - - - Loans and advances to group companies - - - Other loans and advances 143.08 14.74 15.43 Other non current assets 14.49 9.90 24.15Total non current assets 157.57 24.64 39.58Total assets 2,280.76 1,663.06 1,217.03Notes to the Assets: • In 2005 and 2006, Universal Medicap has been acquiring land, which reflects in the additions to its existing land and building. • Capital work-in-progress (WIP) as on March 31, 2006 reflects the installation of new plant and machinery for manufacturing rubber closures. As on March 31, 2005 and 2004, it was the© 2006 CRISIL Limited. All Rights Reserved 26
  27. 27. installation of gamma radiation plant. • Receivables greater than six months are considered to be good. • Other current assets include DEPB license, balance with central excises, public bodies, and others. • Other loans and advances include advance tax, and other advances. • Other non-current assets include margin money and fixed deposits with bank.© 2006 CRISIL Limited. All Rights Reserved 27
  28. 28. KEY FINANCIAL RATIOS 2006 2005 2004 For the year ended Audited Audited AuditedPerformance growth Net sales growth (per cent) 29.17 10.55 - OPBDIT growth (per cent) 68.55 10.86 - PBT growth (per cent) 59.92 44.56 -Profitability OPBDIT/Net sales (per cent) 28.82 22.08 22.02 PBT/Net sales (per cent) 19.38 15.65 11.97 PAT/Net sales (per cent) 13.00 11.01 7.90 PAT/Total assets (ROA) (per cent) 11.25 10.10 7.76 PAT/Tangible net worth (RONW) (per cent) 36.73 30.32 21.82 ROCE (per cent) 26.05 24.90 20.70Depreciation/Average gross block 0.06 0.07 -Activity Asset conversion cycle (days) 217 232 188 - Days inventory (on COP) 187 192 193 - Days receivable (on gross sales) 89 82 80 - Days payable (on materials) 59 42 86 Working capital turnover 2.80 2.84 2.52 Gross block turnover 1.12 1.33 1.53 Total asset turnover 0.75 0.79 0.98Coverage PBDIT/Interest 4.99 4.11 3.91 Dividend cover (PAT/Dividend) 3.70 3.23 - Debt cover 4.10 3.60 3.30 Average cost of borrowing (per cent) 7.86 9.50 -Balance sheet structure (Total outside liabilities + DTL)/Tangible net worth 2.35 2.15 1.81 Current ratio 0.95 1.23 1.39 Quick ratio 0.49 0.55 0.62 Long-term debt/Tangible net worth 0.77 0.85 0.55 Total debt/Tangible net worth 1.72 1.46 1.19 Total outside liabilities/Tangible net worth 2.24 2.02 1.64Without considering unsecured loans as debt: Total debt/Tangible net worth 1.42 1.09 0.86© 2006 CRISIL Limited. All Rights Reserved 28
  29. 29. Notes:Universal Medicap maintains high inventory level (imported rubber) to cover the exchange fluctuationrisks. The company’s inventory also includes goods-in-transit.AUDITORSShah Mehta & Bakshi, Chartered AccountantsPrasanna House, Associated Society, opposite to Radhakrishna Park, Baroda – 390 020, Gujarat.The auditors had made no adverse comments in the past three financial years.© 2006 CRISIL Limited. All Rights Reserved 29
  30. 30. SITE VISIT INFORMATIONAddress of the site visited : Village Rania, Taluka Savli, District Baroda 391780Size of the premises : 46,070 sq. mt.Locality : IndustrialLocation area : Semi-urbanOffice/Factory location : Side lanesDistance from railhead : 20 kmDistance from highway : 12 kmProximity to the consumption centre : YesProximity to raw material source : NoProximity to centre supplying manpower : YesInfrastructure development state : SatisfactoryBuilding type : Permanent structureOwnership of office/factory/works : OwnedOwned by whom : Universal Medicap LimitedGroup companies located in the same : Nopremises, if anyNumber of employees at the location : Permanent: 23 Contractual: 80Competitors located nearby, if any : Bharat Rubber and Jamnadas Rubber IndustriesFactory layout : Spacious and well-organisedFacilities available at the site : • Telephones • Fax • Internet • Generators • Security guards • Name/Sign boards • Fire extinguishers • Drinking water facility • Drainage/Sewers • Pantry/Canteen facility • Transport • Boundary wall© 2006 CRISIL Limited. All Rights Reserved 30
  31. 31. PROMOTERS DETAILSName Mr. Nilesh R. Patel Panch Bangla, At: Dashrath, District.: Baroda -Residential address 391 740Whether the residence is owned or rented OwnedIf owned, whether it is mortgaged NoVehicle used Toyota CorollaAny default with credit cards NoAny litigation against promoters NoName Mr. Jagdish B. Patel 4 - Vasudha Society, Near Shrinathjis Haveli,Residential address Nizampura, Baroda - 390 002Whether the residence is owned or rented OwnedIf owned, whether it is mortgaged NoVehicle used Hyundai Sonata and Chevrolet TaveraAny default with credit cards NoAny litigation against promoters NoName Mr. Ilesh B. Patel Near Shankar Villa, Vallabh - Vidyanagar - 388Residential address 120Whether the residence is owned or rented OwnedIf owned, whether it is mortgaged NoVehicle used Skoda OctaviaInsurance value of assets Rs.8.33 lakhAny default with credit cards NoAny litigation against promoters NoInformation as provided by the management.© 2006 CRISIL Limited. All Rights Reserved 31
  32. 32. CRISIL OFFICESHead Office:CRISIL House,121-122, Andheri-Kurla Road,Andheri (East),Mumbai – 400 093, India.Tel.: +91 (022) 66913142Fax: +91 (022) 66913030Contact: Mr. Rakesh PingulkarBranch Offices :Ahmedabad Kolkata301, Paritosh, ‘Horizon’, Block – B,Usmanpura, 4th floor, 57, Chowringhee Road,Ahmedabad – 380 013 Kolkata – 700 071Tel.: (079) 27550317 / 1533 Tel.: (033) 22823541Fax: (079) - 27559863 Fax: (033) 22830597Contact: Mr. Nitin Mahajan Contact: Mr. Arnab ChandaBangalore New DelhiW-101, 1st floor, Sunrise Chambers, Hindustan Times Building, 9th floor,22, Ulsoor Road, 18-20, K. G. Marg,Bangalore – 560 042 New Delhi – 110 001Tel.: (080) 25580899 / 25594802 / 6708 Tel.: (011) 23721603 / 23320980 / 23736541Fax: (080) 25594801 Fax: (011) 23721605Contact: Mr. Sudhir Narayan Contact: Ms. Sangeeta RaoChennai PuneMezzanine floor, Thapar House, 1187/17, Ghole Road,43/44 Montieth Road, Shivajinagar,Egmore, Pune – 411 005Chennai – 600 008 Tel.: (020) 25539064-67Tel.: (044) 28546205 / 06 / 28546093 Fax: (020) 25539068Fax: (044) 28547531 Contact: Mr. Pramod BangContact: Mr. B. VenugopalHyderabadUma Chambers, 3rd floor,Banjara Hills,Near Punjagutta Cross Roads,Hyderabad – 500 082Tel.: (040) 23358103 / 8105Fax: (040) 23357507Contact: Mr. Rahul Deshpande© 2006 CRISIL Limited. All Rights Reserved 32

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