MIRA INFORM REPORT
|
Report Date : |
12.04.2007 |
IDENTIFICATION DETAILS
|
Name : |
ULTRATECH CEMENT LIMITED |
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Formerly Known
As : |
ULTRATECH CEMCO LIMITED |
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Registered
Office : |
B Wing, 2nd Floor, Ahura Centre, Mahakali Caves Road,
Andheri [East], Mumbai – 400093, Maharashtra |
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Country : |
India |
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Financials (as
on) : |
31.03.2006 |
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Date of
Incorporation : |
24.08.2000 |
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Com. Reg. No.: |
11-128420 |
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CIN No.: [Company
Identification No.] |
L26940MH2000PLC128420 |
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TAN No.: [Tax Deduction
& Collection Account No.] |
MUMU03782C |
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PAN No.: [Permanent
Account No.] |
AAACL6442L |
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Legal Form : |
A Public Limited Liability Company. The company’s Share
are listed on the Stock Exchange. |
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Line of Business
: |
Manufacturers, Dealers and Sellers of Cement, Clinker,
Lime, Plasters, Whiting, Clax, Granule, Sand Coke, Fuel, Artificial Stone,
Builders requisites and Convenience of all kinds and any products or things
which may be manufactured out of or with cement or in which the use of cement
may be made. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
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Maximum Credit
Limit : |
USD 41500000 |
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Status : |
Good |
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Payment
Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having fine track. Financial
position is good. Payments are correct and as per commitments. Trade
relations are fair. Payments are correct and as per commitments. Fundamental
are strong and healthy. The company can be considered good for any normal business dealings.
It can be regarded a promising business partner in a medium to long-run. |
LOCATIONS
|
Registered Office
: |
B Wing, 2nd Floor, Ahura Centre, Mahakali Caves Road,
Andheri [East], Mumbai – 400093, Maharashtra, India |
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Tel. No.: |
91-22-66917800 |
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Fax No.: |
91-22-66928109 |
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E-Mail : |
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Website : |
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Central marketing office: |
A Wing, Ahura Centre, Andheri
(East), Mumbai 400 093 |
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Tel. No.: |
91-22-6691 7360 / 6691 8400 |
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Fax No.: |
91-22-6691 7361/ 6692 8401 |
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Zonal marketing offices: |
Located at : v
Ahmedabad v
Bangalore v
Chennai v
Hyderabad v
Kolkata |
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Plant
locations : |
Awarpur Cement Works, P.O. Awarpur Cement
Project, Taluka: Korpana, Dist. Chandrapur, Maharashtra 442 917 Hirmi Cement Works, P.O.Hirmi, Taluka:
Simga, Via: Neora, Dist. Raipur, Chhatisgarh 493 195 Gujarat Cement Works, Village: Kovaya,
Taluka: Rajula City, Dist. Amreli, Gujarat 365 541 A.P.Cement Works, Village: Bhogasamudram,
Tadipatri, Anantapur District, Andhra Pradesh 515 415 Jafrabad Works (NCCL), Village: Babarkot,
Taluka: Jafrabad, Dist. Amreli, Gujarat 365 540 West Bengal Cement Works, Near EPIP plot,
Muchipara, Post: Rajbandh, Durgapur 713 212 (West Bengal) Magdalla Works (NCCL), Magdalla Port, Dumas
Road, Surat, Gujarat 395 007 Ratnagiri Works (NCCL), MIDC Industrial
Estste, Zadgaon Block, Ratnagiri, Maharashtra 415 639 Arakkonam Cement Works, Chetteri Village, Jharsuguda Cement Works, Near Dhutra
railway station, |
DIRECTORS
|
Name : |
Mr. Kumar Mangalam Birla |
|
Designation : |
Director |
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|
Name : |
Mr. G. M. Dave |
|
Designation : |
Director |
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Name : |
Mrs. Rajashree Birla |
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Designation : |
Director |
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Name : |
Mr. R C Bhargava |
|
Designation : |
Director |
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|
Name : |
Mr. Yashwant M. Deosthalee |
|
Designation : |
Director |
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Address : |
1001, Prabhu Kutir, 15
Altamount Road, Mumbai – 400 026, Maharashtra |
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Date of
Birth/Age : |
6th September, 1946 |
|
Date of
Appointment : |
24th August, 2000 |
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Name : |
Mr. S Misra |
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Designation : |
Managing Director |
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|
Name : |
Mr. V T Moorthy |
|
Designation : |
Director |
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Name : |
Mr. J P Nayak |
|
Designation : |
Director |
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Address : |
Gilder House, 67-F,Bhuleshwar Desai Road, Mumbai - 400
026, Maharashtra |
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Date of
Birth/Age : |
13th November, 1943 |
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Date of Appointment
: |
24th August, 2000 |
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Name : |
Mr. S Rajgopal |
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Designation : |
Nominee (UTI) |
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Name : |
Mr. D D Rathi |
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Designation : |
Director |
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Address : |
Flat No. 82, Jolly Maker
Apartments-II, Cuffe Parade, Mumbai – 400 005, Maharashtra |
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Date of Birth/Age : |
11th January, 1947 |
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Date of Appointment : |
4th February, 2004 |
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Name : |
Mr. S K Chatterjee |
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Designation : |
Company Secretary |
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Name : |
Mr. N J Jhaveri |
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Designation : |
Additional Director |
KEY EXECUTIVE
|
Name : |
Mr. K. C. Birla |
|
Designation : |
Executive President and Chief Financial Officer |
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|
Name : |
Mr. S. K. Maheshwari |
|
Designation : |
Chief Manufacturing Officer |
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Name : |
Mr. O. P. Puranmalka |
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Designation : |
Chief Marketing Officer |
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Name : |
Mr. S. K. Chatterjee |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
Distribution
of shareholding as on 31 December 2006
|
Category
of shareholder |
Total
number of |
Total
shareholding as |
|
Shareholding
of promoter and promoter group2 |
|
|
|
Indian |
|
|
|
Individuals / |
800 |
0.0006 |
|
Bodies corporate |
65,285,327 |
52.4440 |
|
Sub-total (A)(1) |
65,286,127 |
52.4446 |
|
Total shareholding of promoter
and promoter group |
65,286,127 |
52.4446 |
|
Public |
|
|
|
Institutions |
|
|
|
Mutual funds / UTI |
2,796,454 |
2.2464 |
|
Financial institutions / banks |
31,038 |
0.0249 |
|
Insurance companies |
7,396,278 |
5.9415 |
|
Foreign institutional
investors |
11,332,560 |
9.1035 |
|
Sub-total (B)(1) |
21,556,330 |
17.3163 |
|
Non-institutions |
|
|
|
Bodies corporate |
17,070,399 |
13.7127 |
|
Individuals |
17,250,525 |
13.8574 |
|
ii. Individual shareholders
holding |
2,127,831 |
1.7093 |
|
Any other (specify) |
|
|
|
Non-resident (REP) |
502,559 |
0.4037 |
|
Non-resident (non-REP) |
200,168 |
0.1608 |
|
Non-domestic cos |
722 |
0.0006 |
|
Foreign nationals |
51,776 |
0.0416 |
|
Sub-total (B)(2) |
37,203,980 |
29.8861 |
|
Total public shareholding of |
58,760,310 |
47.2024 |
|
Total |
124,046,437 |
99.6470 |
|
Shares held by custodians and against
which depository receipts have been issued |
439,442 |
0.3530 |
|
Grand total (A)+(B)+(C) |
124,485,879 |
100.0000 |
BUSINESS DETAILS
|
Line of Business
: |
Manufacturers, Dealers and Sellers of Cement, Clinker,
Lime, Plasters, Whiting, Clax, Granule, Sand Coke, Fuel, Artificial Stone,
Builders requisites and Convenience of all kinds and any products or things
which may be manufactured out of or with cement or in which the use of cement
may be made. |
GENERAL INFORMATION
|
No. of Employees
: |
500 |
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|
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Bankers : |
Not Available |
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Banking
Relations : |
Good |
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Auditors : |
S B Billimoria and Company /G P Kapadia and Company Chartered Accountants
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Associates/Subsidiaries
: |
·
Narmada Cement Company Limited (NCCL) ·
Dakshin Cement Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
130000000 |
Equity Shares |
Rs. 10/- |
Rs. 1300.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
124485900 |
Equity Shares |
Rs. 10/- |
Rs. 1244.859
millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1244.900 |
1244.000 |
1249.100 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
9137.800 |
9427.300 |
9505.400 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
10382.700 |
10671.300 |
10754.500 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
12219.300 |
12533.500 |
12450.100 |
|
|
2] Unsecured Loans |
2299.000 |
2780.300 |
3906.300 |
|
|
TOTAL BORROWING |
14518.300 |
15313.800 |
16356.400 |
|
|
DEFERRED TAX LIABILITIES |
|
|
|
|
|
|
|
|
|
|
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TOTAL |
24901.000 |
25985.100 |
27110.900 |
|
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|
|
|
|
|
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APPLICATION OF
FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net
Block] |
25371.700 |
25489.000 |
27279.000 |
|
|
Capital
work-in-progress |
1410.300 |
481.800 |
240.600 |
|
|
|
|
|
|
|
|
INVESTMENT |
1723.900 |
1847.900 |
2380.900 |
|
|
|
|
|
|
|
|
CURRENT ASSETS,
LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3795.700
|
2837.100 |
2231.700 |
|
|
Sundry Debtors |
1725.500
|
1719.500 |
1775.700 |
|
|
Cash & Bank
Balances |
616.000
|
562.600 |
418.300 |
|
|
Other Current
Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans &
Advances |
1682.300
|
3388.600 |
3084.100 |
|
Total Current Assets |
7819.500
|
8507.800 |
7509.800 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current
Liabilities |
11032.600
|
10102.700 |
10255.400 |
|
|
Provisions |
391.800
|
238.700 |
199.200 |
|
Total Current Liabilities |
11424.400
|
10341.400 |
10454.600 |
|
|
Net
Current Assets |
[3604.900]
|
[1833.600] |
[2944.800] |
|
|
|
|
|
|
|
|
MISCELLANEOUS
EXPENSES |
0.000 |
0.000 |
155.200 |
|
|
|
|
|
|
|
|
TOTAL |
24901.000 |
25985.100 |
27110.900 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other income] |
38580.300 |
31025.500 |
27444.700 |
|
|
|
|
|
|
Profit/(Loss) Before Tax |
2855.200 |
[336.200] |
492.000 |
|
Provision for Taxation |
557.600 |
[364.700] |
103.700 |
|
Profit/(Loss) After Tax |
2297.600 |
28.500 |
388.300 |
|
|
|
|
|
|
Total Expenditure |
32668.400 |
28075.100 |
23657.400 |
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 (1st
Qtr.) |
30.09.2006 (2nd
Qtr.) |
31.12.2006 (3rd
Qtr.) |
|
Sales Turnover |
11803.200 |
10045.400 |
12604.5 |
|
Other Income |
134.000 |
119.000 |
166.8 |
|
Total Income |
11937.200 |
10164.400 |
12771.3 |
|
Total Expenditure |
8057.400 |
7500.500 |
8802.3 |
|
Operating Profit |
3879.800 |
2663.900 |
3969.0 |
|
Interest |
225.900 |
237.400 |
201.6 |
|
Gross Profit |
3653.900 |
2426.500 |
3767.4 |
|
Depreciation |
543.500 |
547.400 |
571.0 |
|
Tax |
1079.500 |
676.500 |
1037.1 |
|
Reported PAT |
2108.400 |
1274.400 |
2124.6 |
200606 Quarter 1 –
Expenditure Includes (Increase) / Decrease in Stock Rs
(99.00) million Raw Material Consumed Rs 909.00 million Purchases of Finished
Goods Rs 257.70 million Payment to and Provision for Employees Rs 275.00
million Power and Fuel Rs 2855.50 million Freight and Handling Expenses Rs
2455.40 million Other Expenditure Rs 1403.80 million Tax Includes Provision for
Current Tax Rs 1070.30 million Deferred Tax Rs (77.50) million Fringe Benefit
Tax Rs 9.20 million EPS is Basic and Diluted Status of Investor Complaints for
the quarter ended 30.06.2006 Complaints Pending at the beginning of the quarter
Nil Complaints Received during the quarter 05 Complaints disposed off during
the quarter 05 Complaints unresolved at the end of the quarter Nil 1. The Board
for Industrial and Financial Reconstruction (BIER), at its meeting, held on
15.05.2006 has approved the Scheme of Amalgamation (the Scheme) of Narmada
Cement Company Limited (NCCL) with the Company, with effect from 1.10.2005. In
view of the aforesaid amalgamation, the figures for the quarter ended
30.06.2006 are not comparable with those of the corresponding quarter of the
previous year. 2. Pursuant to the Accounting Standard 15 (Revised) on 'Employee
Benefits (AS-IS) issued by the Institute of Chartered Accountants of India
being mandatory With effect from 01.04.2006, the. Company has debited an
additional amount of Rs 3.8 million for the quarter ended 30.06.2006 in respect
of provision for employee benefits. The adjustments on account of transitional
provisions will be dealt with in the General Reserves at the year end. 3. The
Company is engaged in one primary segment viz. Cement Business- The Company's
operations are solely situated in India. 4. The figures or the previous year /
period have been regrouped wherever necessary. 5. The above results have been
reviewed by Audit Committee and thereafter approved by Board of Directors at
the meeting held on 25.07.2006. The statutory auditors have performed a limited
review of the financial results for the quarter ended 30.06.2006.
200609 Quarter 2 –
Expenditure Includes (Increase) / Decrease in Stock Rs
(11.10) million Raw Material Consumed Rs 841.70 million Purchases of Finished
Goods Rs 241.60 million Payment to and Provision for Employees Rs 294.20
million Power and Fuel Rs 2484.80 million Freight and Handling Expenses Rs
2062.10 million Other Expenditure Rs 1587.20 million Tax Includes Provision for
Current Tax Rs 669.70 million Deferred Tax Rs (71.80) million Fringe Benefit
Tax Rs 6.80 million EPS is Basic and Diluted Status of Investor Complaints for
the quarter ended 30.09.2006 Complaints Pending at the beginning of the quarter
Nil Complaints Received during the quarter 07 Complaints disposed off during
the quarter 07 Complaints unresolved at the end of the quarter Nil 1. The Board
for Industrial and Financial Reconstruction (BIER), at its meeting, held on
15.05.2006 has approved the Scheme of Amalgamation (the Scheme) of Narmada
Cement Company Limited (NCCL) with the Company, with effect from 0110.2005. In
view of the aforesaid amalgamation, the figures for the three months and six
months ended 30.09.2006 are not comparable with those of the corresponding
quarter of the previous year. 2. Pursuant to the Accounting Standard 15
(Revised) on 'Employee Benefits (AS-15) issued by the Institute of Chartered
Accountants of India being mandatory With effect from 01.04.2006, the Company
has debited an additional amount of Rs. 0.1 Millions for three months Rs 3.90
million for the six months ended 30.09.2006 in respect of provision for
employee benefits. The adjustments on account of transitional provisions will
be dealt with in the General Reserves at the year end. 3. The Company is
engaged in one primary segment viz. Cement Business- The Company's operations
are solely situated in India. 4. The figures or the previous year / period have
been regrouped wherever necessary. 5. The above results have been reviewed by
Audit Committee and thereafter approved by Board of Directors at the meeting
held on 1610.2006. The statutory auditors have performed a limited review of
the financial results for the quarter and six months ended 30.09.2006.
200612 Quarter 3
Notes
Expenditure Includes
(Increase) / Decrease in Stock Rs 39.90 million Raw Material Consumed Rs
1044.30 million Purchases of Finished Goods Rs 490.20 million Payment to &
Provision for Employees Rs 315.40 million Power & Fuel Rs 2893.30 million
Freight & Handling Expenses Rs 2508.70 million Other Expenditure Rs 1510.50
million Tax Includes Provision for Current Tax Rs 1024.30 million Deferred Tax
Rs 34.70 million Fringe Benefit Tax Rs 12.80 million EPS is Basic and Diluted
Status of Investor Complaints for the quarter ended December 31, 2006
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 05 Complaints disposed off during the quarter 05 Complaints
unresolved at the end of the quarter Nil 1. The Board for Industrial &
Financial Reconstruction (BIFR), at its meeting held on May 15, 2006 had
approved the Scheme of Amalgamation (the Scheme) of Narmada Cement Company Ltd
(NCCL), with the Company, with effect from October 01, 2005. Comparative
figures for the three months end nine months ended December 31, 2005 do not
include those of NCCL, as NCCL was an unlisted subsidiary and its figures were
not statutorily required to be published. Accordingly figures for the three
months and nine months ended December 31, 2005 and December 31, 2006 are not
strictly comparable. 2. Pursuant to the Accounting Standard 15 (Revised) on
Employee Benefits (AS-15) issued by the Institute of Chartered Accountants of
India being mandatory with effect from April 01, 2006, the Company has debited
an additional amount of Rs 2.10 million for three months and Rs 6.00 million
for the nine months ended December 31, 2006 in respect of provision for
employee benefits. The adjustments on account of transitional provisions will
be dealt with in the General Reserves at the year end. 3. The Company is
engaged in one primary segment viz. Cement Business. The Company's operations
are solely situated in India. 4. The figures of the previous year / period have
been regrouped wherever necessary. 5. The above results have been reviewed by
Audit Committee end thereafter approved by Board of Directors at the meeting
held on January 18, 2007. The statutory auditors have performed a limited
review of the financial results for the nine months ended December 31, 2006.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
1.42 |
1.48 |
1.52 |
|
Long Term Debt-Equity Ratio |
1.34 |
1.32 |
1.33 |
|
Current Ratio |
0.70 |
0.66 |
0.61 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
0.85 |
0.71 |
1.26 |
|
Inventory |
11.41 |
12.07 |
24.14 |
|
Debtors |
21.98 |
17.50 |
30.33 |
|
Interest Cover Ratio |
4.19 |
0.69 |
1.43 |
|
Operating Profit Margin(%) |
15.62 |
9.65 |
14.06 |
|
Profit Before Interest And Tax Margin(%) |
9.91 |
2.40 |
6.10 |
|
Cash Profit Margin(%) |
11.78 |
7.35 |
9.41 |
|
Adjusted Net Profit Margin(%) |
6.07 |
0.09 |
1.44 |
|
Return On Capital Employed(%) |
14.75 |
2.77 |
12.17 |
|
Return On Net Worth(%) |
21.83 |
0.27 |
7.20 |
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs.732.00 |
|
Low |
Rs.718.00 |
LOCAL AGENCY FURTHER INFORMATION
Subject was incorporated as L and T Cement Limited now
changed to the present name with effect from 19th November, 2003.
History
Subject (Formely Subject)
is a subsidiary of Grasim Industries Limited, the flagship company of the
Aditya Birla Group. UltraTech Cemco was formed to carry on the cement business
hither to carried on by Larsen and Toubro. The cement division of L and T came
to UltraTech Cemco effective from 24th August 2004. The company was
incorporated in the year 2000.
Ultratech Cemco is the second largest in the Indian Cement industry by
capacity, with installed capacity of 15.5 million tonne on stand alone basis
and 17.0 million tonne, including 1.5 million tonne capacity of Narmada Cement
Company, in which it has 97.0% equity stake. On a consolidated basis, UltraTech
Cemco has 11.76% share of the All India large cement capacity of 144.54 million
tonne as of Mar'04.
The company produces Portland cement, Portland Blast Furnace slag cement,
Portland Pozzolana cement and Grey Portland cement. Ultratech has five
integrated plants, five grinding units and three terminals two in India and one
in Sri Lanka.
The subsidiaries of the company are Narmada Cement Company
Limited, Dakshin Cements Limited and UltraTech Ceylinco Private Limited.
Subject has very low capacity utilisation of 76.26% (excluding clinker operations)
while its subsidiary operates at 24.3%. Incidentally, Narmada Cement company
generated nearly 62% of revenues in FY 2002-03 from clinker and only 38% from
cement. Overall, the UltraTech group operated its 18.5 million capacity at
71.7% levels (excluding clinker) in FY 2003-04. In contrast, Gujarat Ambuja
operated at 105.6%, Grasim operated at 88.7%, ACC at 91.3% in FY 2003-04. This
evidences significant scope of improving capacity utilisation, which can lead
to scaling up of revenues, margins and profits. Also, once Grasim gains
management control, there will also be significant synergy benefits, in terms
of cross branding, cross marketing etc.
The cement division of the L and T has been demerged and transferred to
Ultratech effective from 24th August 2004. Accordingly, For every 10 shares of
Rs 10 each held in Larsen and Toubro (before demerger), the shareholders will
get (a) 5 shares of Rs 2 each of demerged L and T (residual entity) and 4
shares of Rs 10 each of UltraTech. L and T holds 20% stake in Ultratech as of
31st March 2004. However, as per the scheme of arrangement, the
company will divest 8.5% stake in Ultratech to Grasim Industries.
The demerger of cement division into Ultratech has become effective from 14th
May 2004. The shares of Ultratech will be listed on the bourses within 40 days
from the above effective date. Meanwhile, Grasim has made open offer to share
holders of UltraTech to acquire 30% stake amounting to 3,73,19,587 equity
shares of Rs 10 each of UltraTech for Rs 342.60 per share. Grasim has already
deposited the entire open offer consideration in an escrow account. The open
offer opens on 7th June 2004 and closes on 21st June
2004.
The company has decided to merge Narmada Cement Company Limited (NCCL) with
itself with effect from 1st October 2005. According to the Scheme of
Merger, the shareholders of NCCL will be allotted 1 equity share of Rs.10/-
each of the company for every 18 equity share of Rs.10/- each held by them in
NCCL. The Scheme of Merger is subject to approval.
The name of the company has been changed from Ultratech Cemco Limited to Ultra
Tech Cement Limited with effect from 10th December 2004.
During 2004-05 the company has acquired 40 Millions shares in UltraTech
Ceylinco Private Limited From Larsen and Toubro Limited for value of Rs.230.3
Millions. Further the company has modernisized /replaced its existing assets at
an capital expenditure of Rs.688.5 Millions.
Financial Results:
(Rs. in Millions) 2005-06
Gross Turnover 3,7852.9 Gross Profit 5016.2 Less: Depreciation 2160.3 Profit
before Tax and Diminution 2855.9 Provision for diminution – 768.4 Profit/(Loss)
before Tax 2855.9 Tax expenses 558.3 Profit after Tax 2297.6 Add: Balance
brought forward from Previous Year 101.1 Surplus available for Appropriation
2398.7 Appropriation: Debenture Redemption Reserve 94.5 -General Reserve 250.0
-Proposed Dividend 217.9 Corporate Tax on Dividend 30.6 Balance transferred to
Balance Sheet 1805.7
(The accounts for the year under review include the performance of the
erstwhile Narmada Cement Company Limited (NCCL) for the period 1st October,
2005 to 31st March, 2006 and are therefore not comparable with the previous
years' figures)
For the year under review, the Company earned revenues of Rs.3,2994.5 millions
compared to Rs.2,6069.0 millions in the previous year. After providing for
Interest of Rs.896.4 Millions and Depreciation of Rs.2160.3 Millions , the
Profit before Tax stood at Rs.2855.9 Millions. Profit before tax and provision
for diminution in value of investments Rs. NIL stood at Rs.2855.9 Millions.
Profit after tax stood at Rs.2297.6 Millions.
Review Of
Operations:
During the year under review, the Company's aggregate sales volumes recorded a
growth of 2.5%, increasing from 15.17 MMT in the previous year to 15.55 MMT.
Realisation was also up by 23.50%. The exports mix saw a rising share of
cement, which constitutes 57% of exports.
Lower clinker exports and extended shutdowns at the Company's plants have
resulted in lower effective capacity utilisation at 89% compared to 91% during
the previous year. Unprecedented floods in Maharashtra and Gujarat, which
constitute around 50% of the Company's domestic market, constrained the
performance of the Company during the second quarter of the year under review.
Increase in power and freight costs also had an adverse impact on the operating
costs at the Company's plants.
To address the issue of increasing power costs, the Directors have approved the
setting up of captive thermal power plants at the Company's Units in Kovaya
(Gujarat) and Hirmi (Chhattisgarh). These are expected to be commissioned by
March, 2008. Once commissioned, these power plants will lead to reduced power
cost.
To optimise freight costs, the Company continuously revisits its despatch mix
off rail, road and water ways.
Corporate Governance:
A separate section on Corporate Governance, in line with Clause 49 of the
Listing Agreement with the stock exchanges, forms a part of this Report. The
relevant Certificate dated 12th July, 2006 from the Company's Statutory Auditor
is annexed and forms part of this Report.
Subsidiary
Companies:
In terms of Section 212 of the Companies Act, 1956, the Accounts along with the
Report of Directors and the Auditors' Report of the Company's subsidiaries viz.
Dakshin Cements Limited (Dakshin) and UltraTech Ceylinco (Private) Limited
(UltraTech Ceylinco) are annexed to this Report.
In keeping with the provisions of Accounting Standard 21 (AS-21) and Clause 32
of the Listing Agreement, the duly audited Consolidated Financial Statements
have been prepared after considering the financial statements of the Company's
subsidiaries viz. NCCL (for the period 1st April, 2005 to 30th
September, 2005), Dakshin and UltraTech Ceylinco.
Management Discussion and Analysis:
Overview:
The Cement Industry is a part of the Construction Sector, which represents 6%
of the country's GDP. The Construction Sector is growing at 15% p.a. and
attracts 40% of the overall investment in the economy.
The Cement Sector is, consequently, showing signs of growing at a faster rate
than the 8% CAGR recorded over the past 2 decades. The principal demand drivers
have been housing, roads and government expenditure. It is expected that
renewed corporate investment in capacity creation and government spending on
infrastructure will likely accelerate the demand for cement. The per capita
consumption of cement in India is just 125 kgs, which is modest when compared
to neighbouring countries in East Asia. For instance, the comparable figure is
- 366 kgs in Thailand, 606 kgs in Malaysia, 626 kgs in China and as much as
1,216 kgs in South Korea.
The medium term prospects for the Cement Sector in India are satisfactory, as
demand and supply are expected to be in balance, with another 2 years before
the next cycle of new capacity enters the market. However, the industry is
vulnerable to volatility in energy prices as this represents nearly two-thirds
of the total cost of operations, including logistics. The position is
aggravated by a growing shortfall on supplies of indigenous coal against
linkages, the rising price of imported fuels, and the short term impact of
restrictions imposed on the loads traditionally carried by trucks.
The Company has a capacity of 17 million tpa comprising 5 integrated Cement
Plants, supported by 5 Grinding Units and 3 Terminals, one of which is located
in Sri Lanka. The Company has focused on improving Plant productivity as a
means of mitigating inflationary pressures. It has also endeavoured to address
escalating power costs by investing in Captive Thermal Power Plants at its 2
major Plants in Kovaya, (Gujarat) and Hirmi, (Chattisgarh); introduction of
alternative fuels; greater reliance on rail and sea transport and an expected
reduction in the average lead distance to markets.
Business and Financial Performance Review:
Merger of subsidiary:
A Scheme of Amalgamation of Narmada Cement Company Limited (NCCL) with the
Company was approved by the Board for Industrial and Financial Reconstruction (BIFR)
at its hearing held on 15th May, 2006. Pursuant to the BIFR Order,
NCCL stands amalgamated with the Company with effect from 1st
October, 2005 (the Appointed Date). The Effective Date of the Scheme is 1st
June, 2006. NCCL is now a Division of the Company. NCCL's results are
incorporated in the accounts of the Company for the period from 1st
October, 2005 to 31st March, 2006 and hence the current year's
results are not strictly comparable with those of the previous year.
Subject,
makers of premier cement, is a subsidiary of Grasim Industries Limited, the
flagship company of the Aditya Birla Group. The group is the eleventh largest
cement manufacturer in the world and number one in India. Its basket of
products includes ordinary Portland cement, Portland blast furnace slag cement,
Portland Pozzolana cement and Grey Portland cement. It also exports clinker and
cement.
UltraTech
has five integrated plants, five grinding units, and three terminals — two in
India and one in Sri Lanka. All the plants have ISO 9001 certification. Most of
the plants have also been certified for ISO 14001 and OSHAS 18001.
UltraTech
is the country's largest exporter of cement clinker. The company exports over
2.5 million tonnes per annum, which is about 30 per cent of the country's total
clinker exports. The export market comprises of countries around the Indian
Ocean, Africa, Europe and the Middle East. Export is a thrust area in the
company's strategy for growth.
The
cement division of L and T was demerged in 2004 after Grasim made the 30 per
cent open offer for equity shares, gaining control over the new company,
christened UltraTech. Besides the long term strategic value in the wake of
rising demand for cement, with the growth of housing and infrastructure sectors
in the country, the acquisition brings significant synergy gains to the parent
company. Narmada Cement Company Limited, a subsidiary, was amalgamated with
UltraTech in May 2006.
Details of UltraTech's production capacities
|
A |
Composite integrated plants |
|
|
|
|
Andhra Pradesh Cement Works |
8000 |
2.3 |
|
|
Awarpur Cement Works |
9500 |
3.3 |
|
|
Gujarat Cement Works |
15000 |
5.3 |
|
|
Hirmi Cement Works |
8050 |
1.6 |
|
|
Narmada Cement — Jafrabad Works |
4350 |
0.4 |
|
B |
Grinding units |
|
|
|
|
Arakkonam Cement Works |
|
1.2 |
|
|
Jharsuguda Cement Works |
|
0.8 |
|
|
Narmada Cement — Ratnagiri Works |
|
0.4 |
|
|
Narmada Cement — Magdala Works |
|
0.7 |
|
|
West Bengal Cement Works |
|
1.0 |
|
|
Total |
|
17.0 |
As part of the eighth biggest cement manufacturer in the
world, UltraTech Cement has five integrated plants, five grinding units as well
as three terminals of its own (one overseas, in Colombo, Sri Lanka). These
facilities gradually came up over the years, as indicated below:
2006 : Narmada Cement Company Limited amalgamated with
UltraTech pursuant to a Scheme of Amalgamation being approved by the Board for
Industrial and Financial Reconstruction (BIFR) in terms of the provision of
Sick Industrial Companies Act (Special Provisions)
2004 : Completion of the implementation process to
demerge the cement business of L and T and completion of open offer by Grasim,
with the latter acquiring controlling stake in the newly formed company
UltraTech
2003 : The board of Larsen and Toubro Limited (L and T)
decides to demerge its cement business into a separate cement company (CemCo).
Grasim decides to acquire an 8.5 per cent equity stake from L and T and then
make an open offer for 30 per cent of the equity of CemCo, to acquire
management control of the company.
2002 : The Grasim
Board approves an open offer for purchase of up to 20 per cent of the equity
shares of Larsen and Toubro Limited (L and T), in accordance with the
provisions and guidelines issued by the Securities and Exchange Board of India
(SEBI) Regulations, 1997.
Grasim increases its stake in L
and T to 14.15 per cent
Arakkonam grinding unit
2001 :Grasim
acquires 10 per cent stake in L and T. Subsequently increases stake to 15.3 per
cent by October 2002
Durgapur grinding unit
1998-2000 :Bulk cement terminals at Mangalore, Navi Mumbai
and Colombo
1999 : Narmada Cement Company Limited acquired
Ratnagiri Cement Works
1998 : Gujarat Cement Works Plant II
Andhra Pradesh Cement Works
1996 : Gujarat Cement Works Plant I
1993 : Jharsuguda grinding unit
1987 : Awarpur Cement Works Plant II
1983 : Awarpur Cement Works Plant I
UltraTech is India's
largest exporter of cement clinker. The company's production facilities are
spread across five integrated plants, five grinding units, and three terminals
— two in India and one in Sri Lanka. All the plants have ISO 9001
certification, and all but one have ISO 14001 certification. While two of the
plants have already received OSHAS 18001 certification, the process is underway
for the remaining three. The company exports over 2.5 million tonnes per annum,
which is about 30 per cent of the country's total exports. The export market
comprises of countries around the Indian Ocean, Africa, Europe and the Middle
East. Export is a thrust area in the company's strategy for growth.
UltraTech's products
include Ordinary Portland cement, Portland Pozzolana cement and Portland blast
furnace slag cement.
v
Ordinary
Portland Cement
v
Portland Blast
Furnace Slag Cement
v
Portland
Pozzolana Cement
v
Cement to
European and Sri Lankan norms
Ordinary Portland cement
Ordinary portland cement is the
most commonly used cement for a wide range of applications. These applications
cover dry-lean mixes, general-purpose ready-mixes, and even high strength
pre-cast and pre-stressed concrete.
Portland blast furnace slag cement
Portland blast-furnace slag
cement contains up to 70 per cent of finely ground, granulated blast-furnace
slag, a nonmetallic product consisting essentially of silicates and
alumino-silicates of calcium. Slag brings with it the advantage of the energy
invested in the slag making. Grinding slag for cement replacement takes only 25
per cent of the energy needed to manufacture portland cement. Using slag cement
to replace a portion of portland cement in a concrete mixture is a useful
method to make concrete better and more consistent. Portland blast-furnace slag
cement has a lighter colour, better concrete workability, easier finishability,
higher compressive and flexural strength, lower permeability, improved
resistance to aggressive chemicals and more consistent plastic and hardened
consistency.
Portland Pozzolana cement
Portland pozzolana cement is ordinary portland cement
blended with pozzolanic materials (power-station fly ash, burnt clays, ash from
burnt plant material or silicious earths), either together or separately.
Portland clinker is ground with gypsum and pozzolanic materials which, though
they do not have cementing properties in themselves, combine chemically with
portland cement in the presence of water to form extra strong cementing
material which resists wet cracking, thermal cracking and has a high degree of
cohesion and workability in concrete and mortar.
press
clipping
6th July, 2004
L
and T completes cement restructuring; Grasim acquires majority stake in
UltraTech.
Larsen and Toubro Limited (L and T) and Grasim Industries
Limited (Grasim) today announced that the implementation process of the
demerger of the cement division of L and T has been completed, and Grasim has
acquired majority stake in UltraTech CemCo Limited (UltraTech), the demerged
cement business of L and T.
The scheme of arrangement for the demerger of the cement
business, sanctioned by the Honorable High Court of Bombay, became effective
from Friday, 14 May, 2004. Accordingly, the cement business undertaking was
transferred to and vested in UltraTech CemCo Limited.
Grasim had made a successful open offer bid for 30 per cent
of the equity of UltraTech with a view of taking management control.
Concurrently, Grasim acquired 8.5 per cent equity stake of UltraTech from L and
T, and Grasim and its associates have sold 14.95 per cent of their holding in
the demerged L and T to the L and T Employee Welfare Foundation.
Speaking on the occasion, Mr. A.M. Naik, Chairman and
Managing Director, L and T, said " This transaction, one of the biggest in
corporate India, has helped to unlock value for its shareholders and position
the demerged L and T as a more focused engineering and construction
Company"
Says Mr. Kumar Mangalam Birla, Chairman, The Aditya Birla
Group, "This transaction reflects our commitment to build a leadership
position in cement. We believe that it will take about two to three years for
UltraTech to provide a competitive return on the aggressive price offered to
its shareholders."
New Management of Company
The company carved out of Larsen and Toubro’s demerged
cement business and now part of the Aditya Birla Group, on Tuesday constituted
a new management team.
Rajashree Birla, Kumar Mangalam Birla, Saurabh Mishra and D.
D. Rathi are part of the new management team from the Aditya Birla grouop. The
nominees of the financial institutions includes S. Rajagopalan and S. Khare,
while Y. S. Deosthale and J. P. Nayak are from L and T.
Mr. R. C. Bhargava and Mr. Arun Gandhi are the two
independent nominees.
Under the new shareholding pattern, AV Birla Group flagship
Grasim holds a majority 51% equity in Ultra Tech, while the balance is with the
FIs (12%), L and T (11.50%) and 25.50% with the employees and other public
shareholders.
The company’s share is to be listed shortly on the bourses.
Going forward, the Aditya Birla Group plans to phase out the
L and T brand by the end of current fiscal 2004-05.
The group is expecting Rs. 1000 millions savings for both
Grasim as well as Ultra Tech on account of synergies in the cement business.
Talking about the business, Birla said” the first quarter
dispatches had been disappointing. They expect a pick-up post-monsoon.
The transaction is expected to provide UltraTech an
opportunity to leverage synergies with Grasim and strengthen their ability to
compete in the Indian and overseas markets.
CMT REPORT
(Corruption, Money Laundering & 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 records 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 records 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.42.74 |
|
UK Pound |
1 |
Rs.84.90 |
|
Euro |
1 |
Rs.57.79 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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 & 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 |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|