Attachment 1

 

Report Update On

30th March, 1999

 

 

Report on

PROJECTS & DEVELOPMENT INDIA LIMITED

 

 

Registered Office

CIFT Buildings, P. O. Sindri, Dist. Dhanbad, Bihar – 828 122, INDIA

 

 

Tel. No.

91-326-512 87

Fax No.

91-326-512 72

E-Mail

--

Telex

0621-201 / 202

Gram

PLANDEV

 

 

Attachment 2

 

S U M M A R Y

 

 

Incorporated

1978

Status

Moderate

 

 

 

 

Registration No.

1221

Chief Executive

Mr. O. N. Kapur

 

 

 

 

Capital  (Rs.)

395.2 millions

Payments

Slow but correct

 

 

 

 

Sales   (Rs.)

771.4 millions

Litigation

--

 

 

 

 

Net Worth (Rs.)

(-) 120.8 millions

Banking Reputation

Satisfactory

 

 

 

 

No. of Employees

2,594

Auditors

--

 

 

 

 

Credit Rating

B (See attachment 3)

 

 

 

INDUSTRY

 

The much-talked about decline in growth sector is the outcome of a combination of factors affecting industry competitiveness and end user industry growth. The inverted duty structure (raw materials such as steel plates are at 30% while finished products are at 20% customs duty) alongwith special custom duty status for project impars in major end use sectors such as oil refining and fertiliser have hit the industry hard. Part of the problems is also due to the inability to offer financing options to the end use sectors.

 

The investments planned in the ninth plan for oil refining and fertiliser sectors are Rs.50-60 and Rs.10-15 billions respectively.  If the domestic industry is not made competitive, there is a good chance that their order book position will wersen and imports would increase. Key end use sectors such as process industry, textiles and cement are witnessing sluggish growth and threat of imports.

 

Poor investments in power transmission and distribution sectors have resulted in the poor performance of transformer manufacturers. The fortunes of engineering industry other than capital goods has been hit by the recent decline in the growth of the automobile sector, a major end use segments of bearings and machine tools. The machine tool and bearings sectors are also witnessing significant import threats.

 

************************

 

HISTORY

 

The company was incorporated on 7th March, 1978 at Dhanbad in Bihar having Company Registration Number 1221.

 

LEGAL FORM

 

It is a Public Limited Liability company. It is a Government of India Undertaking company.

 

MANAGEMENT

 

Mr. O. N. Kapur

Chairman & Managing Director

Mr. H. S. Walia (Baroda)

Executive Director

Mr. S. K. Sardar (Sindri)

General Manager

Mr. R. Prasad

General Manager

Mr. S. C. Mehra (Noida)

General Manager

Mr. R. K. Sinha (Baroda)

General Manager

Mr. P. N. Sinha

General Manager

Dr. S. K. Das

Company Secretary

Mr. N. K. Sinha

Public Relations Manager

 

BUSINESS

 

The company’s main activities are Engineering & Consultancy i.e. design engineering procurement and supervision of construction/commissioning of fertilizers, chemicals and other allied projects, production of catalysts and research & development in fertilizers, chemicals and allied fields. It is a leading consultancy organisation in the fertilizer sector and plays key role in the expansion/modernisation of the fertilizer industry. It has the following three divisions :

 

K                 Engineering & Consultancy Division

K                 Catalyst Division

K                 R & D Division

 

The company has registered a net profit of Rs.318.2 millions during the year as against Rs.41.9 millions during 1995-96.

 

ENGINEERING & CONSULTANCY DIVISION

 

The Engineering & Consultancy Division has its main offices at Sindri, Noida, Baroda and Inspection Offices at Calcutta, Mumbai and Chennai.

 

This division was also making losses in the past. This was primarily due to steep fall in the volume of work. However, as a result of a number of new fertilizer plants & expansion projects of existing plants which have come up during the Eight Five Year Plan, PDIL has sufficient engineering & consultancy jobs in hand which is under different stages of implementation.

 

RESEARCH & DEVELOPMENT DIVISION

 

This division contributed in the development of Process Know how for various requirements of industries and in execution of specialised Customer Oriented services.

 

CATALYST DIVISION

 

The production of three main catalysts i.e. H.T., L.T. and Nickel based catalysts during the year 1996-97 was 847 MT compared to 916 MT during the previous year. The sale of Catalyst Division during the year improved to 1036 MT as compared to 1012 MT during the previous year.

 

The turnover of Catalyst Division during the year 1996-97 was Rs.148.5 millions as compared to Rs.162.2 millions during the previous year.

 

PDIL was referred to BIFR in 1992 and was declared as a Sick Company in terms of Sector 3(1)(0) of the Sick Industrial Companies (special provisions) Act, 1985. BIFR appointed ICICI as the Operating Agency. ICICI have submitted their report, Ministry of C&F, Department of Fertilizers has already prepared a revival package, which includes capital restructuring and manpower restructuring.

 

As on 31st March, 1997, there were 2,594 employees on the rolls of the company.

 

SISTER CONCERNS

 

Nil

 

BANKERS

 

K                 State Bank of India, New Delhi

 

FINANCIAL INFORMATION

 

The company's last available financial information for the period ended 31st March, 1997 is enclosed herewith.

 

CAPITAL STRUCTURE

 

Authorised Capital :

Rs.400 millions divided into Equity Shares

Issued, Subscribed & Paid-up Capital :

Rs.395.2 millions divided into Equity Shares

 

COMMENTS

 

Subject is a Government of India Company. It has substantial accumulated losses. Payments are reported as slow but correct.

 

He company can be considered normal for business dealings at usual trade terms and conditions.

 

is a branch (Western Regional Office) P&D House, Rameshwar Estate, Subhanpura, Baroda – 390 007 (Tel. No. 91-265-390 007, Fax No. 91-265-382 276)

 

ABRIDGED BALANCE SHEET AS ON 31ST March, 1997

[figures are in Rupees Millions]

 

SOURCES OF FUNDS

 

31.03.1997

31.03.1996

31.03.1995

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

395.2

390.2

385.2

2] Reserves & Surplus

170.2

176.5

168.3

 

 

 

 

LOAN FUNDS

 

 

 

1] Secured Loans

513.3

569.4

360.6

2] Unsecured Loans

3.2

0.0

0.0

 

 

 

 
GRAND TOTAL

1,081.9

1,136.1

914.1

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

255.7

274.4

290.3

Capital work-in-progress

3.8

0.4

3.4

 

 

 

 

INVESTMENTS

0.0

0.5

0.0

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

Inventories

85.2

93.4

104.7

Sundry Debtors

263.3

238.3

197.2

Cash & Bank Balances

191.7

172.7

142.0

Other Current Assets

3.2

0.0

0.0

Loans & Advances

128.4

87.5

52.0

Total Current Assets

671.8

591.9

495.9

Less :

 

 

 

Current Liabilities & Provisions

537.5

737.0

1,105.2

Net Current Assets

134.3

(145.1)

(609.3)

 

 

 

 

MISCELLANEOUS EXPENSES

1.9

1.5

0.0

 

 

 

 

PROFIT & LOSS ACCOUNT

686.2

1,004.4

1,229.7

 

 

 

 
GRAND TOTAL

1,081.9

1,136.1

914.1

 

IMPORTANT FINANCIAL INFORMATION FOR Three PERIODS

[figures are in Rupees Millions]

 

PARTICULARS

 

31.03.1997

31.03.1996

31.03.1995

Sales Turnover

771.4

786.6

571.3

[including other income]

 

 

 

 

 

 

 

Profit/(Loss) Before Tax

318.2

225.2

(63.2)

Provision for Taxation

0.0

 

0.0

Profit/(Loss) After Tax

318.2

225.2

(63.2)

 

 

 

 

Dividend

0.0

0.0

0.0

 

 

 

 
Expenditures :

 

 

 
Purchase of Finished Goods

57.9

0.0

0.0
Consumption of Raw Materials, Stores & Spares

76.5

71.5

47.0
Salaries, Wages, Welfare, Benefits

573.0

321.7

289.9
Repairs & Maintenance

10.8

9.7

5.0
Power & Fuel

24.3

29.1

13.2
Miscellaneous Expenditure

82.3

182.7

100.1
Prior Period Adjustments (Net)

(437.1)

(183.3)

4.2
(Accretion)/Decretion in Stock of Finished Goods

3.7

(0.9)

20.1
(Accretion)/Decretion in Stock of Work-in-Progress

4.7

2.3

26.5
Total Expenditures

396.1

432.8

506.0

 

Attachment 3

 

 

SCORE SHEET

 

SCORE

CREDIT RATING

STATUS

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments. Maybe drawn to slightly difficult position as unfavourable conditions arise. Minimal assurance for timely payment on interest and principal sums

Moderate

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively limited or considered not known. Capability to pay both interest and principal sums is doubtful

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

 

Attachment 4

 

 

INDIA

 

In 1998, the Hindu-nationalist party, the BJP was elected and formed a new Government. Soon after, however, both India and Pakistan conducted nuclear tests and tension in Kashmir grew. 1999 is not likely to be much calmer with regard to neighbouring Pakistan, but it is believed that the tensions will be more loud than physical in nature. India is growing at a healthy 5% pace and is expected to continue its level for the coming year. Inflation has been high however and was 16.3% for the year, as of the end of September, 1998. 1999 inflation is expected to be reduced to 9.3%, still high. Foreign reserves have grown by $2.1 billion to $26.5 billion as of November, in comparison to one year earlier. The trade deficit and current account balance remain in red.

 

Ranked among the ten most corrupt nations in the world, the parallel economy is conservatively estimated to be Rs.300,000 millions – roughly equal to the Gross Domestic Product.