S EPORTING ATE ANUARY Ind-Swift Ltd....781 Industrial Area Phase-II, COMPANY BACKGROUND Ram Darbar,...

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SECTOR: PHARMACEUTICALS REPORTING DATE: 24TH JANUARY, 2018

IND-SWIFT LTD. www.indswift.com

Ind-Swift Ltd. NSE Code - INDSWFTLTD TABLE 1 - MARKET DATA (STANDALONE) (AS ON 23RD JANUARY’ 2018)

Sector - Pharmaceuticals NSE Market Price (₹) 8.90 NSE Market Cap. (₹ Cr.) 47.66

Face Value (₹) 2.00 Equity (₹ Cr.) 10.83

Business Group – N.A. 52 weeks High/Low (₹) 12.25/4.75 Net worth (₹ Cr.)* -639.48

Year of Incorporation - 1986 TTM P/E (TTM) N.A. Traded Volume (Shares) 12,627

TTM P/BV N.A. Traded Volume (lacs) 1.12

Registered Office - Source - Capitaline, TTM - Trailing Twelve Months, N.A. - Not Applicable, * As on 30th September 2017

781 Industrial Area Phase-II, COMPANY BACKGROUND

Ram Darbar, Ind-Swift Limited is a manufacturer of formulations. The Company operates through

pharmaceutical products segment. Its geographic segments include domestic and

export. The Company has a portfolio of over 750 products in therapeutic segments, such

as cardiology, diabetology, anti-depressant, anti-allergic, anti-infective, neurology,

oncology and dermatology. Its portfolio of active pharmaceutical ingredients (APIs) in

pipeline include Fluvastatin; Risedronate; Ezetimibe; Acamprosate; Montelukast Na;

Cinacalcet; Duloxetine and Naratriptan HCl. The Company operates through divisions,

including Megaswift division, which offers chest (anti- tuberculosis); dentistry; anti-

infective; cardio-diabetic and orthopedic products; Gyno Swift division, which produces

a range of gynecology and dermatology products, such as Suprox SR and Voranin and

Malswift-D; Generic division, which includes Agile, Maxcare and Healthcare divisions,

and Institutional division, which caters to government dispensaries.

Chandigarh – 160 002

Company Website:

www.indswift.com

Revenue and Profit Performance

The revenue of the Company decreased from ₹ 72.18

crores to ₹ 71.31 crores from quarter ending Sep’16 to

quarter ending Sep’17. The Company made a loss of ₹

14.25 crores in quarter ending Sep’17 vis-a-vis making a

loss of ₹ 69.93 crores in quarter ending Sep’16.

Source: Moneycontrol

Performance vis-à-vis Market

TABLE 2- Returns

1-m 3-m 6-m 12-m

Ind-Swift Ltd -5.82% -20.22% 1.14% 61.82%

Nifty 5.63% 6.50% 10.68% 29.46%

Nifty Pharma 4.73% 0.13% 0.98% -4.58%

Source - Capitaline/NSE

71.31 62.25 72.18

-14.25

-83.94-69.93

-100

-50

0

50

100

Sep'17 Mar'17 Sep'16

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov 17

Ind-Swift Ltd NIFTY NIFTY PHARMA

http://www.indswift.com/



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TABLE 3 - FINANCIALS

(₹ Cr.) Sep’17 Mar’17 Sep’16 % Change

Sep ’17 vs Mar’17 Mar’17 vs Sep’16

Net Worth -639.48 -609.33 -340.48 N.A. N.A.

Current Assets 276.66 267.84 535.84 3.29% -50.01%

Non-Current Assets 383.30 402.44 428.57 -4.76% -6.10%

Total Assets 659.97 670.28 964.41 -1.54% -30.50%

Investments 43.91 45.12 45.12 -2.68% 0.00%

Finance Cost 1.74 2.83 5.70 -38.52% -50.35%

Long Term Liabilities 677.26 672.22 673.45 0.75% -0.18%

Current Liabilities 622.20 607.39 624.75 2.44% -2.78%

Turnover 71.31 62.25 72.18 14.55% -13.76%

Profit After Tax -14.25 -83.94 -69.93 N.A. N.A.

EPS (₹) -2.63 -15.50 -13.89 N.A. N.A.

Source - Money Control/Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: Statutory Auditor have not made qualification in their Report on financial statements for FY

2014-15.

Audit Qualifications for FY 2016-17 (as stated by the Company):

1) The company has not provided interest on cash credit, term loans, working capital term loans and funded interest term loans with some banks since these banks have not charged interest on these accounts post such accounts becoming NPAs. The unaccounted interest liability in respect of the same for the financial year is ₹ 111.21 cr. (Refer Note No.36 of Notes to Accounts) Had the provision for the same been made, the loss for the year and accumulated losses would have been higher by ₹ 111.21 cr.

2) The company has not booked Accrued Interest on Fixed Deposit during the year for ₹ 289.93 Lacs as per the scheme approved by Company Law Board. (Refer Note No.35 (ii) of Notes to Accounts) Had the provision for the same been made, the loss for the year and accumulated losses would have been higher by ₹ 289.93 lacs.

3) The management is in process of getting an impairment study done in respect of units where the activities have been suspended (refer note no. 39 of notes to accounts). In view of this impairment loss in respect of these units have not been provided in accounts, being not ascertainable.

Management Response:

1) In view of the financial crisis being faced by the company, Company is finding difficulties in making payment of dues to the banks/ financial institutions i.e. interest and instalments in terms of the CDR package approved by CDR EG vide letter dated 27.12.2012. Hence, accounts pertaining to Cash Credit (CC), Term Loans (TL), Working Capital Term Loans (WCLT), and Funded Interest Term Loans (FITL) with some banks have been declared as NPAs by respective banks due to non payment of dues on time. Such banks have not charged interest on CC, TL , WCTL & FITL accounts post such accounts becoming NPAs. The interest on such loan accounts will be accounted for by the company as and when the bank charges the same in account.

2) Interest Accrued on fixed deposit during the year for ₹ 289.93 lacs has not been provided in accounts as the same is payable to fixed deposit holders at the time of maturity of fixed deposits as per the scheme approved by the Company Law Board as mentioned above.

3) The impairment study is still an ongoing process and no estimation is possible at this stage.

Audit Qualifications for FY. 2015-16: The Statutory Auditors have given similar Qualifications in their Report for FY 2015-16.

Response Comment

Frequency of Qualifications Same Qualification for FY 2015-16 and FY 2016-17.

Have the auditors made any adverse remark in last 3 years? No

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited financial

statements? No

-




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TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT - FY 2016-17)

Regulatory Norms Company

% of Independent Directors on the Board 50% 42%

% of Promoter Directors on the Board - 50%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - Yes

Average attendance of Directors in the Board meetings (%) - 66.67%

Composition of Board: As per Regulation 17(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,

2015 "Listing Regulations, 2015", the Company should have at least 50% Independent Directors as the Chairman of the Board is

a Promoter Executive Director. The Company has 42% of Independent Directors and hence, it does not meet the regulatory

requirements.

Board Diversity: The Company has 12 directors out of which 11 are male and 1 is female.

TABLE 5 - FINANCIAL RATIOS

Ratios Sep’17 Mar’17 Sep’16

% Change

Sep ’17 vs

Mar’17

Mar’17 vs

Sep’16

Turn

ove

r

Rat

ios

Inventory Turnover 2.07 1.59 0.97 30.07% 65.07%

Debtors Turnover 0.67 0.57 0.23 16.95% 152.67%

Fixed asset Turnover 0.19 0.15 0.17 20.27% -8.16%

Current Asset Turnover 0.26 0.23 0.13 10.90% 72.54%

Ret

urn

Rat

ios Operating Profit Margin -5.75% -130.47% -77.09% N.A. N.A.

Net Profit Margin -19.98% -134.84% -96.88% N.A. N.A.

Return on Assets (ROA) N.A. N.A. N.A. N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 0.44 0.44 0.86 0.83% -48.59%

Quick Ratio 0.39 0.38 0.74 3.37% -48.96%

Cash Ratio 0.22 0.20 0.23 10.36% -13.63%

Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio N.A. N.A. N.A. N.A. N.A.

Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales 0.85 0.65 0.39 30.95% 66.98%

Market Cap/ Net Worth N.A. N.A. N.A. N.A. N.A.

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A.

Source - Money Control/Stock exchange filing

TABLE 6 - TRADING VOLUME

Particulars Dec’17 June’17 Dec’16 % Change

Dec ’17 vs June’17 June’17 vs Dec’16

Trading Volume (shares) (avg. of 1 qtr) 27,485 67,557 23,443 -59.32% 188.18%

Trading Volume (shares) (high in 1 qtr) 2,34,641 7,68,249 1,42,626 -69.46% 438.65%

Trading Volume (shares) (low in 1 qtr) 400 2,117 392 -81.11% 440.05%

Ratio - High/low trading volume 586.60 362.90 363.84 61.65% -0.26%

Ratio - High/average trading volume 8.54 11.37 6.08 -24.93% 86.91%

Source - Capitaline




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TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

Dec-17 Jun-17 Dec-16 Comments

Shar

eho

ldin

g (%

)

Promoter shareholding 55.56 55.56 52.18 • The Company issued 38,17,712 shares to

promoters on a preferential basis pursuant to

CDR during the period from 1st Jan’ 17 to 31st

Dec’ 2017.

• The promoter shareholding increased from

52.18% to 55.56% due to issue of shares on

preferential basis.

• The shareholding of public institution decreased

by 0.24% and that of public others decreased by

3.14% during the same period.

• The promoters have pledged 73.46% of their

shareholding.

Public - Institutional

shareholding 3.14 3.14 3.38

Public - Others shareholding 41.30 41.30 44.44

Non-Promoter Non-Public

Shareholding 0.00 0.00 0.00

Source - NSE

MAJOR SHAREHOLDERS (AS ON 31st DECEMBER 2017)

S. No. Promoters Shareholding S. No. Public Shareholders Shareholding

1 Essix Biosciences Limited 31.45% 1 Panchkula Finvest Private Limited 2.58%

2 S R Mehta 3.76% 2 United India Insurance Company Ltd 1.84%

3 Gopal Munjal 3.61% 3 Justin Pharmaceuticals Private Limited 1.59%

4 V R Mehta 3.55% 4 Sharwan Singh Guleria 1.41%

5 Sunita Jain 3.35% 5 Gravity Systems Private Limited 1.38%

Source - NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares during FY 2016-17.

Preferential issue to promoters 38,17,712 shares have been allotted to promoters on preferential basis during FY 2016-17.

Preferential issue to others No preferential issue of shares was made to other shareholders during FY 2016-17.

GDRs issued by the Company The Company did not issue any GDRs during FY 2016-17.

Issue of ESOPs/Issue of shares

other than Preferential allotment

The Company did not issue any shares to the employees under its ESOP Scheme during FY

2016-17.

Source - Annual Report FY 16-17

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1. Manufacture of formulations 100%

Source - Annual Report FY 16-17




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Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover




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Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



7 | P A G E



𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year




8 | P A G E



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