CRISIL SME Ratings. Sigma Instruments. NSIC-CRISIL Rating: CRISIL MSE 4 Financial Strength: Above Average Operating Performance: High

Transcription

1 Sigma Instruments NSIC-CRISIL Rating: CRISIL MSE 4 Financial Strength: Above Average Operating Performance: High Report Date Valid Till May 14, 2017 May 13, 2018 Indicates 'Above Average' creditworthiness in relation to other Micro & Small Enterprises CRISIL SME Ratings

2 Important Notice This rating has been assigned under the scheme for Rating of Small-Scale Industries, formulated, and subsidised by the National Small Industries Corporation Limited, New Delhi (NSIC). A copy of the rating report has been submitted to NSIC. The rating is to be used solely for the purpose for which this rating was assigned under NSIC s scheme, and for no other purpose. The rating is a one-time exercise and the rating will not be kept under surveillance. This rating is valid for one year from the report date, subject to no significant changes/events occurring during this period that could materially affect the business or financial parameters of the organisation as mentioned in the report. CRISIL, however, recommends that the user of the rating seeks a review of the rating, if the organisation experiences significant changes/events during this period, which could impact the organisation/its rating. For verifying if this is an accepted and valid rating, please visit: The rating and this report are based on the information provided to CRISIL by the organisation and/or obtained by CRISIL from sources it considers reliable including published annual reports, management meetings, industry data and discussions with bankers, customers and suppliers. CRISIL does not guarantee the accuracy, adequacy or completeness of any information on which the rating and the report are based and is not responsible for any errors or omissions for the results/opinions obtained from the use of the rating or the rating report. The rating does not constitute an audit of the organisation by CRISIL. The rating is also not a recommendation to enter into or not enter into any transaction with the organisation. CRISIL reserves the right to disclose the organisation s rating and the 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 others associated with the rating assignment do not have any financial liability whatsoever including but not limited to attorney s or consultant s fees to the users of this rating or this rating report. No part of this report may be reproduced by any means without CRISIL s prior written approval.

3 Index NSIC-CRISIL PERFORMANCE AND CREDIT RATING... 2 KEY RATING DRIVERS... 3 BUSINESS AND MANAGEMENT... 3 FINANCIAL... 3 FACT SHEET... 4 BUSINESS PROFILE... 5 BUSINESS DESCRIPTION... 5 CUSTOMER PROFILE AND DEMAND-SIDE ANALYSIS... 7 SUPPLIER PROFILE AND SUPPLY-SIDE ANALYSIS... 7 TRADING FACILITIES... 7 OWNERSHIP AND MANAGEMENT... 9 DIRECTORS PROFILE... 9 KEY MANAGEMENT PERSONNEL... 9 ORGANISATIONAL STRUCTURE, CONTROLS AND SYSTEMS... 9 OWNERSHIP PATTERN GROUP COMPANIES AND FIRMS FINANCIAL PROFILE...11 CURRENT FINANCIAL PERFORMANCE PAST FINANCIAL PERFORMANCE PROFIT AND LOSS ACCOUNT BALANCE SHEET KEY FINANCIAL RATIOS FUND FLOW STATEMENT GRAPHS BANKING FACILITIES SITE VISIT...18 ANNEXURE A (As stipulated by NSIC)...20 FINANCIAL PROFILE

4 2 NSIC-CRISIL PERFORMANCE AND CREDIT RATING

5 KEY RATING DRIVERS BUSINESS AND MANAGEMENT Strength Management expertise: The firm s proprietor, Mr. Souvanik Dey Sarkar, has been involved in its management since With multiple years of experience, the firm has developed adequate understanding of the area of operations. This helps it cater to the business of various customers. CRISIL believes that this will also help the firm expand its business into new areas. Well-defined organisational structure: The firm has a qualified and experienced second-tier management with decision-making powers. Hence, it is expected to benefit from the management's ability to ensure smooth flow of operations. Well-spread reach: The firm s presence across India mitigates the risk of geographic concentration. Risk factors Moderate scale of operations: The firm has not significantly scaled up in the last 21 years, as reflected in its modest net sales of Rs lakh in The management s ability to scale up and demonstrate a growth trajectory while maintaining operational efficiency thus remains to be seen. Margin may be constrained in future due to competition from organised and unorganised players. FINANCIAL Strength Adequate profitability: The firm registered an adequate operating profit before depreciation, interest, and tax (OPBDIT) margin of 7.41 per cent, profit after tax (PAT) margin of 6.82 per cent, and return on capital employed (RoCE) of per cent in Financial flexibility: The firm was debt-free for the years ended March 31, 2016, March 31, 2015, and March 31, This has protected its profitability from being eroded through interest pay-outs. Good working capital management: Receivables and payables for the past 3 financial years were in line with the firm s credit terms. 3

6 FACT SHEET Name of the firm Sigma Instruments Year of establishment 1996 Commencement of operations April 1, 1996 Legal status Proprietorship Legal history Sigma Instruments was established as a proprietorship by Mr. Souvanik Dey Sarkar, in There has been no change in the business, management, and constitution of the firm since its inception. Registered with Not applicable Registration number Not applicable Company Identification Number (CIN) Not applicable Udyog Aadhaar Number WB08D Proprietor Mr. Souvanik Dey Sarkar Category of entrepreneur General Registered, administrative office, and Baltikuri Surkimill Amta Road trading facility address Howrah , West Bengal Tel.: / Mobile: info@sigmainstrumentsindia.com Website: Number of employees Permanent: 4 Contractual: 10 Total: 14 Certification and award ISO 9001: 2008 (validity sought by CRISIL, not provided by company) Brand None Statutory compliance Income tax filing: Regular and timely Excise duty filing: Not applicable (trading) Service tax filing: Regular and timely Wealth tax filing: Not applicable ESIC and EPF dues: Not applicable (As provided by the management, not independently verified) 4

7 BUSINESS PROFILE BUSINESS DESCRIPTION Nature of business : Services and trading Industry : Diversified Industry prospects : Strong Business description : Business operations: The firm trades in scientific equipment. Variants: Laboratory balance Laboratory hot plate Laboratory hot air oven Different types of microscope Laboratory muffle furnace Metallurgical micro sample polishing machine Microscopic image analyser Carbon and sulphur apparatus Bomb calorimeter (isothermal type) Margins: The firm maintains margin of per cent on trading of scientific equipment. Inventory holding period: The average inventory holding period of scientific equipment is about 30 days each. Warehouse: The firm has a warehouse admeasuring 1,600 sq. ft. located in Howrah, West Bengal, where it stocks the scientific equipment. Selling price: The selling price of the scientific equipment varies from product to product. Quality inspection: The firm purchases scientific equipment from its suppliers in advance. The scientific equipment are delivered to the firm s warehouse, where its personnel subject it to pre-delivery inspection (PDI). The firm conducts a second quality check at the time of sale of scientific equipment, before it is finally sent to the customer. The firm has one executive to undertake quality inspections. Warranty: The firm provides warranty of 1 year on scientific equipment. The firm also provides free after-sales service as per the schedule, bound by the period. Logistics support: The firm has tie-ups with local transport providers to avail logistic support. The transportation cost is borne by the customer. 5

8 Shift: The labour operates in a single shift of 8 hours. Experience in the business : 21 years Service range : Diverse Degree of competition : High; entry barriers are low Plans : The firm does not have any capital expansion of diversification plan in near future. Customer profile : Direct customers Installed capacity/facility : Not applicable as the firm is in to trading Utilised capacity : Not applicable as the firm is in to trading 6

9 CUSTOMER PROFILE AND DEMAND-SIDE ANALYSIS Customer s name Address Product Length of relationship % share in sales Techma Engineering West Bengal 21 years Enterprise Private Limited Scientific AD Electrosteel Company Varies annually West Bengal equipment 17 years Private Limited Siva Enterprise West Bengal 15 years Notes: The firm caters to more than 50 customers across India. Each customer accounts for less than per cent of its total sales. Terms of credit : Advance and credit up to 90 days Process of getting orders : Regular orders from customers Exports : Nil Marketing network : The firm does not have any formal marketing set-up. Word-of-mouth publicity and references form an integral part of the marketing strategy. The firm has established contacts with customers, and also gets repeat orders from existing customers. Geographic reach : Well spread SUPPLIER PROFILE AND SUPPLY-SIDE ANALYSIS Supplier s / Wholesaler s name Address Product Length of relationship Lab Technologies Delhi 9 years Scientific S D Scientific Company Delhi 3 years equipment Testmaster Delhi 2 years % share in sales Varies annually Terms of purchase : Advance and credit up to 90 days Traded goods availability : Ample Traded goods price volatility : High Ability to pass on traded goods price increases : Yes Import : Nil TRADING FACILITIES Employee-oriented operations : Yes Employee union : No Employee relationships : Cordial CNC machines, CAD, CAM, automation : Not applicable In-house R&D, designing/quality facilities : Yes Facility layout : Spacious and well organised 7

10 Photograph Image 1: Inner view of facility Image 2: Inner view of facility Image 3: Nameplate of firm Image 4: Inner view of facility 8

11 OWNERSHIP AND MANAGEMENT DIRECTORS PROFILE Proprietor s name : Mr. Souvanik Dey Sarkar Father s name : Mr. Amarendranath Dey Sarkar Age : 49 years Qualification level : Graduate Designation / responsibilities : Proprietor/Overall management Previous experience : None Relevant experience : 21 years through the rated firm Personal net worth : Rs lakh as on March 31, 2017 Proprietor's residence address : 24, Srihari, Napara Lane Shibpur Howrah , West Bengal Telephone No. : Ownership of residence : Owned Succession plan: After retirement of Mr. Souvanik Dey Sarkar, son of Mr. Sattarshi Sarkar will take over the business. KEY MANAGEMENT PERSONNEL Name : Mr. Depnkar Majumdar Age : 52 years Qualification level : Graduate Designation / responsibilities : Manager/Overall management Relevant experience : 19 years through the rated firm Address : Baltikuri Surkimill Amta Road Howrah , West Bengal Telephone No. : / ORGANISATIONAL STRUCTURE, CONTROLS AND SYSTEMS Proprietor : Mr. Souvanik Dey Sarkar Constitution : Proprietorship Second-tier management : Qualified and experienced Decision-making powers : Decentralised with the proprietor Reporting system or MIS : Yes Type of reporting system : Computerised Frequency of MIS / reporting : Daily Litigations against the SSI : Litigations against the proprietor : None Severity of litigations : Susceptibility to foreign exchange fluctuations : Hedging against foreign exchange risks : Not applicable Susceptibility to commodity price fluctuations : Hedging against commodity prices : Asset insurance : Adequate 9

12 OWNERSHIP PATTERN Proprietor s share of capital as on: March 31, 2016 Name of the partners Relationship with proprietor Share in capital (%) Mr. Souvanik Dey Sarkar Self Total GROUP COMPANIES AND FIRMS There are no group companies and associate firms. 10

13 FINANCIAL PROFILE CURRENT FINANCIAL PERFORMANCE Performance for the period ended April 29, 2017 Net sales Rs. Lakh OPBDIT Rs. Lakh Current order book Rs. Lakh Debtors Rs. Lakh Details sought by Creditors Rs. Lakh CRISIL, not provided Capital Rs. Lakh by company Total debt Rs. Lakh Total debt- equity ratio Times Projected performance in Net sales Rs. Lakh PBT Rs. Lakh Details sought by PBT margin % CRISIL, not provided by company 11

14 PAST FINANCIAL PERFORMANCE Performance in Net sales Rs. Lakh PBT Rs. Lakh Details sought by PBT margin % CRISIL, not provided by company PROFIT AND LOSS ACCOUNT For the year ended Audited Audited Audited Number of months Net sales Rs. Lakh Operating income Rs. Lakh Cost of sales Rs. Lakh OPBDIT Rs. Lakh Interest and finance costs Rs. Lakh OPBDT Rs. Lakh Depreciation Rs. Lakh OPBT Rs. Lakh Non-operating income/(expense) Rs. Lakh PBT Rs. Lakh Extraordinary income/(expense) Rs. Lakh Reported PBT Rs. Lakh Provision for taxes Rs. Lakh Deferred tax liability/(asset) Rs. Lakh PAT Rs. Lakh Drawings Rs. Lakh Net cash accrual Rs. Lakh Notes: Net sales increased for the years ended March 31, 2016, and March 31, 2015, on account of higher number of orders received from customers. Interest and finance costs for the years ended March 31, 2016, March 31, 2015, and March 31, 2014, refer to bank charges of Rs lakh. Depreciation for the years ended March 31, 2016, March 31, 2015, and March 31, 2014, was charged according to the provisions of the Income Tax Act, Depreciation costs declined for the years ended March 31, 2016, and March 31, 2015, on account of no major addition made in fixed assets base. Taxes for the years ended March 31, 2016, March 31, 2015, and March 31, 2014, were paid according to the Income Tax Act, Taxes for the years ended March 31, 2016, March 31, 2015, and March 31, 2014, were paid in personal capacity of proprietor. Drawings for the years ended March 31, 2016, March 31, 2015, and March 31, 2014, refer to withdrawal of profit for personal use. 12

15 BALANCE SHEET 31-Mar Mar Mar-2014 Audited Audited Audited Liabilities Capital/Tangible net worth Rs. Lakh Deferred tax liabilities/(assets) Rs. Lakh Long-term debt Rs. Lakh of which, current portion of long-term Rs. Lakh debt Short-term debt Rs. Lakh of which, working capital borrowing from Rs. Lakh banks Other liabilities and provisions Rs. Lakh Total liabilities Rs. Lakh Assets Net fixed assets Rs. Lakh Investments Rs. Lakh Inventory Rs. Lakh Receivables (total) Rs. Lakh of which, receivables greater than 6 Rs. Lakh months Cash and bank balance Rs. Lakh Other current assets Rs. Lakh Total assets Rs. Lakh Note: Other liabilities and provisions as on March 31, 2016, comprised: o Creditors for goods of Rs.8.05 lakh o Expenses payable of Rs.0.44 lakh 13

16 KEY FINANCIAL RATIOS For the year ended / as at 31-Mar Mar Mar-2014 Audited Audited Audited OPBDIT margin % PAT margin % Return on capital employed % NM Gross current assets days Days inventory (on COP) days Days receivable (on gross sales) days Days payable (on materials) days Current ratio Times PBDIT interest cover Times Mora than 100 Mora than 100 Mora than 100 Net cash accrual/total debt % Mora than Debt service coverage ratio Times NM Average cost of borrowing % More than NM Total outside liabilities/capital Times Gearing - total debt/ Capital Times Gearing (considering promoter loans as Times neither debt nor equity) NM: Not meaningful Notes: Receivables and payables as on March 31, 2016, March 31, 2015, and March 31, 2014, were in line with the credit terms of the firm. Current ratio was high for the year ended March 31, 2016, on account of high inventory. 14

17 FUND FLOW STATEMENT For the year ended 31-Mar Mar-2015 Sources of funds Net cash accrual Rs. Lakh Equity infusion / Share application money Rs. Lakh - - Long-term debt borrowed (net) Rs. Lakh - - Short-term debt borrowed (net) Rs. Lakh - - Decrease in net current assets Rs. Lakh - - Sale of investments/fixed assets Rs. Lakh Other sources Rs. Lakh - - Total sources of funds Rs. Lakh Uses of funds Investment and fixed assets purchased Rs. Lakh Decrease in tangible net worth Rs. Lakh - - Long-term debt repaid (net) Rs. Lakh - - Short-term debt repaid (net) Rs. Lakh - - Increase in net current assets Rs. Lakh Other uses Rs. Lakh - - Total uses of funds Rs. Lakh Note: Increase in net current assets for the years ended March 31, 2016, and March 31, 2015, was primarily due to net increase in inventory. CONTINGENT LIABILITIES Contingent liabilities as on March 31, 2016: Nil AUDITOR Pratap De & Associates, Chartered Accountants 2 nd Floor 6, Robert Street Mohim Chandra Sarani Between Bowbazar, P S & B B Ganguly Street Kolkata , West Bengal Membership Number Auditor s comments and observations in their audit report for , , and : No adverse comments and observations Change in auditor, if any: None 15

18 16 GRAPHS

19 BANKING FACILITIES Name and location of the bank United Bank of India Kolkata, West Bengal Length of relationship 20 years Facilities availed Current account Type of facility Loan amount sanctioned Not applicable Rate (%) Feedback: The firm has only current account and does not enjoy any loan facility. 17

20 SITE VISIT Address of the site visited : Baltikuri Surkimill Amta Road Howrah , West Bengal Date of site visit : April 15, 2017 CRISIL representative : Mr. Rupesh Kumar Shaw Unit official contacted : Mr. Souvanik Dey Sarkar : Proprietor : : info@sigmainstrumentsindia.com No. of floors occupied : 1 Size of premises : sq ft Number of employees at the location : 4 (present at the time of site visit) Child labour at the site : No Locality : Commercial Location area : Semi-urban Site location : Main road Site used as : Administrative office Regional office Sales office Warehouse Site layout : Spacious and well organised Space around the building / structure : Front porch State of infrastructure : Power: Stable Back-up power: Available Water: Available Labour unions: None Transportation: Easily available Overall infrastructure: Satisfactory Electricity consumption : January 2017: 350 units February 2017: 355 units March 2017: 375 units Building structure : Permanent structure Ownership of premises : Rented Sharing premises with group : No firm/company Facilities available at the site : Telephone Internet Fax Name or sign board Generator Drinking water Boundary wall Drainage and sewerage Installed capacity : Not applicable as the firm is in to trading Utilised capacity : Not applicable as the firm is in to trading Raw material used : Not applicable as the firm is in to trading Source of raw material : Not applicable as the firm is in to trading 18

21 Environmental clearance obtained by unit : Not applicable as the firm is in to trading 19

22 ANNEXURE A (As stipulated by NSIC) FINANCIAL PROFILE Profit and loss account For the period ended Number of months Net sales Rs. Lakh Operating income Rs. Lakh Operational expenses: Rs. Lakh Raw material cost Rs. Lakh Employee cost Rs. Lakh Electricity cost Rs. Lakh Other direct expenses Rs. Lakh Cost of sales Rs. Lakh Depreciation Rs. Lakh Cash profit Rs. Lakh Net profit / loss after tax Rs. Lakh Notes: Cost of sales is the sum of operational expenses, selling expenses, general administrative expenses and other indirect expenses. Cash profit is computed as profit after tax + depreciation + noncash expense. Balance Sheet 31-Mar Mar Mar Liabilities Capital Rs. Lakh Deferred tax liabilities / (assets) Rs. Lakh Long-term debt Rs. Lakh Short-term debt Rs. Lakh Other liabilities and provisions Rs. Lakh Total Liabilities Rs. Lakh Assets Fixed assets (land and building) (net) Rs. Lakh Plant and machinery (net) Rs. Lakh Other fixed assets (net) Rs. Lakh Investments Rs. Lakh Inventory/work-in-progress/finished goods Rs. Lakh Receivables upto 6 months Rs. Lakh Receivables greater than 6 months Rs. Lakh Cash and bank balance Rs. Lakh Other current assets Rs. Lakh Total assets Rs. Lakh

23 Key Financial Ratios For the year ended / as at 31-Mar Mar Mar Sales growth % N/A Receivable -collection period Days Return on capital employed % NM Current ratio Times Debt service coverage ratio (If applicable) Times NM Gearing-Debt/Equity Times Total outside liabilities/net worth Times Net profit %

24 22 THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

25

26 CRISIL SME Ratings Contacts Head Office CRISIL House Central Avenue Hiranandani Business Park Powai, Mumbai Tel: Fax: Contact: Mr. Abhishek Singh Mr. Avinash Gidwani Mr. Sujit Agrawal Mr. Avinash Jha CRISIL Branch Offices Ahmedabad 706, 7th Floor, Venus Atlantis Vejalpur, Near Reliance Petrol Pump Anandnagar to Prahladnagar Road Satellite, Ahmedabad Tel: Fax: Contact: Mr. Anand Nair Bengaluru W 101, Sunrise Chambers 22, Ulsoor Road, Bengaluru Tel: Fax: Contact: Mr. Siva Sekhar siva.sekhar@crisil.com Chennai Thapar House, Mezzanine Floor No. 37 Montieth Road, Egmore Chennai Tel: Fax: Contact: Mr. Surendran Jayasankaran surendran.jayasankaran@crisil.com Mr. Lakshamanan V v.lakshamanan@crisil.com New Delhi Plot no: 46, Sector: 44 Opposite Provident Fund Office Gurgaon, Haryana: Tel: /09 Fax: Contact: Mr. Salil Chaturvedi salil.chaturvedi@crisil.com Mr. Rahul Sondhi rahul.sondhi@crisil.com Mr Kunal Raman kunal.raman@crisil.com Mr. Chayan Gulati chayan.gulati@crisil.com Hyderabad 3 rd Floor, Uma Chamber Plot no 9 & 10, Nagarjuna Hills, Punjagutta, X Road Hyderabad Tel: /05 Fax: Contact: Mr. Giri Ganti giri.ganti@crisil.com Kolkata Convergence Building, 3rd floor, D2/2 EPGP Block, Sector V, Salt Lake City, Kolkata Tel: Fax: Contact: Ms. Sona Singh sona.singh@crisil.com Pune 1187/17, Ghole Road Shivaji Nagar Pune Tel: Fax: Contact: Mr. Rahul Prasad rahul.prasad@crisil.com Mr. Uday Revankar uday.revankar@crisil.com Ms. Renu Chauhan renu.chauhan@crisil.com Other Contact Points Bhubaneswar Contact: Mr. Abhik Sen abhik.sen@crisil.com Coimbatore Contact: Mr. Kishore Kumar kishor.kumar@crisil.com Tel: Guwahati Contact: Mr. Biswajit Saha biswajit.saha@crisil.com Mr Padmakishore Sharma padmakishore.sharma@crisil.com Indore Contact: Mr Amit Shrivastava amit.shrivastava@crisil.com Tel: Jaipur Contact: Mr. Ankit Modi ankit.modi@crisil.com Jalandhar Contact: Mr. Sandeep Miglani sandeep.miglani@crisil.com Kanpur Contact: Mr. Sameer Singh sameer.singh@crisil.com Ludhiana Contact: Mr. Amrit Pal Singh amrit.singh1@crisil.com Mr. Sukhjeet Singh sukhjeet.singh@crisil.com Tel: Mohali/ Chandigarh Contact: Mr. Tejinder Pal Singh tejinderpal.singh@crisil.com Tel: Nashik Contact: Mr. Pratik Shukla pratik.shukla@crisil.com Tel: Vadodara Contact: Mr. Sharad Pillai sharad.pillai@crisil.com Tel: Visakhapatnam Contact: Mr. Giri Ganti giri.ganti@crisil.com CRISIL Limited CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai Phone: Fax: crisilsmeratings@crisil.com