MIRA
INFORM REPORT
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Report Date : |
26.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
HOTHUR STEELS |
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Registered Office : |
Hothur Arcade, RTO Road, Cantonment, Bellary – 583104, Karnataka |
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Country : |
India |
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Financials (as on) : |
31.03.2007 (Provisional) |
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Date of Incorporation : |
2003 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRH01960A |
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PAN No.: [Permanent
Account No.] |
AADFH3591E |
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Legal Form : |
Partnership concern with an unlimited liability of the partners |
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Line of Business : |
Manufacturer of Sponge Iron |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 1200000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well – established and reputed concern having
satisfactory track. Partners are reported as experienced and respectable
businessmen. Trade relations are reported as fair. Business is active.
Payments are usually correct and as per commitments. The concern can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office : |
Hothur Arcade, RTO Road, Cantonment, Bellary – 583104, Karnataka |
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Tel. No.: |
91-8392-241786/200041/241796 |
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Fax No.: |
91-8392-241539 |
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E-Mail : |
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Website : |
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Area : |
3000 Sq. ft |
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Location : |
Owned |
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Factory 1 : |
Survery # 288/289,
Halkundi Village, Bangalore Road, Bellary, Karnataka |
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Tel. No.: |
91-839-2200041 |
PARTNERS
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Name : |
Mr. H Mohammed Asif |
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Designation : |
Partner |
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Date of Birth/Age : |
26 Years |
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Qualification : |
B.H.M. |
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Experience : |
5 Years |
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Name : |
Mr. Mohammed Tauseef |
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Designation : |
Partner |
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Date of Birth/Age : |
23 Years |
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Qualification : |
Bus, Mgmt (Australia) |
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Experience : |
3 Years |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Sponge Iron |
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Imports : |
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Products : |
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Countries : |
China and South Africa |
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Terms : |
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Selling : |
Local (10 – 15 days) |
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Purchasing : |
L/C (180 days) and Local 90 days |
GENERAL
INFORMATION
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Suppliers : |
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Customers : |
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No. of Employees : |
200 |
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Bankers : |
Ing Vysya Bank Limited, Main Branch, Bellary |
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Facilities : |
Credit Limit – Rs. 280.000 Millions |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
D V Saravar & Company Chartered Accountant |
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Memberships : |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
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Capital Investment : |
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Owned : |
Rs. 300.000 Millions |
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Borrowed : |
-- |
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Total : |
Rs. 300.000 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
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Particulars |
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31.03.2007
(Provisional) |
31.03.2006 |
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Sales Turnover |
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640.000 |
490.000 |
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Profit/Loss for the year |
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Indicated around
10% |
NA |
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Import Value |
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140.000 |
100.000 |
Inventories – Rs. 200.000 Million
LOCAL AGENCY
FURTHER INFORMATION
Business
Manufacturer of Iron based on Direct Reduction of Iron Technology,
Installed capacity of the Plant is around 90,000 MT/Annum. Application is in
induction furnace also for use as raw material along with scrap
Inegrated plant consisting of Bellary plant consists of Rotary Kiln, raw
material feeding systems, includes air fans, Rotary Cooler, products separation
systems waste gas handling systems. In house Laboratory well equipped to test
raw materials/ finished products etc
As per website
details
Profile
The birth of the company was a long cherished dream came in the wake of
being in the iron ore mining business for over three decades. Blessed with
richest and largest deposits of best iron ore with Hothur Steel's sister
concerns, Hothur Traders site situated at Sandur and Kariganur Mineral and
Mining Industries site at Kariganur, Hothur Group established a record in
export of iron ore. Launching a sponge iron plant was an obvious choice and a
stepping stone for setting up an integrated steel plant.
The company was incorporated in 2004. The Company has
set up for production of SPONGE IRON based on Direct Reduction of Iron (DRI)
Technology. The Plan was initially designed for 30,000 MT PA, and having
thought to enhance to double the capacity in couple of months.
Plant
The company was established in September 2004 to produce high quality sponge iron. This product was used initially in Induction furnace as a reducing agent for reducing Carbon in the scrap. Later on Sponge Iron is used as a raw material along with scrap.
They have an excellent track record of supplying high grade material of Sponge Iron. to major steel industries such as Ispat Industries Bombay, Jairaj Ispat Hyderabad, and so on.
They grew stronger by absorbing the technology and have been catering to the requirements of the customer.
Today The company stands for quality and trustworthiness. The company is one of the struggle, adventure and achievement a human chronicle of one determined man Mr. Darvesh Ahmed who is building a powerful and unique business along with two sons Mr. Mohammed Asif and Mr. Mohammed Tauseef gifted with vision and uncommon talents of officials and workers.
The plant to accomplish the task of solid reductant based DR consist of a Rotary Kiln which is the main process vessel, a raw material feeding system, air fans mounted on the shell and also on the ground to supply of oxygen required to the system, a rotary cooler to cool the Kiln discharge material, product separation system, to separate the products from by products and waste gas handling system to treat the Kiln flew gases and to maintain positive pressure in the Kiln and cooler system
Location
The plant is located 10Km away from Bellary city, the city of steel
making in survey no.288/289 Halkundi Village on Bangalore – Bellary national
highway Road. Nearest Railway station and port at Goa are 8 and 320 Km away
respectively.
The plant covers an area of 20 acres and another 200 acres is acquired
for further expansion of Blast Furnace and sinter plant.
Capacity
They have 100X3TPD Kilns and manufacture 90,000 mt per annum.
Pollution Control
First kiln: Their First Kiln is installed with Gas
Conditioning tower along with Electro static precipitator.
Second Kiln: They have installed Forced draught cooler with Venturi
scrubber.
Third Kiln: They have proposed to install to Forced draught cooler along with Electro static precipitator.
With the above pollution Equipments they have achived an environmental friendly atmosphere. Flue gases generated from the Sponge Iron Containing substantial quantity of dust and having a temperature of around 850 to 900 degree centigrade are to be cooled down to a temperature of about 180 to 200 degree Centigrade and then admitted into an ESP./VENTURE.
Lab
They are having a full fledged laboratory with quipments such as Muffle Furnace where gravimetric analysis is done, along with coal proximate analysis. Stolehrin apparatus for determination of carbon and sulphur. Hot air over for determination of moisture. Pulverizer where crushing of Sponge Iron is done for chemical analysis. Hot plant is used for heating up of solutions. Other chemicals are used for wet analysis. Electronic weigh balance is used for accurate weighing.
Sponge Iron
Process
Solid reductant based DR process to produce Sponge Iron needs Iron ore in hematite form and non coking coal of bituminous or sub-bituminous rank. The iron ore of 5 – 20mm size is reduced to form metallic iron in solid state itself by the CO gas generated from Boudouvard reaction involving carbon in coal and CO2 derived from its combustion.
The iron ore is crushed to the size of 5-20mm and 0-18mm. The coal fed along with iron ore would be subjected to combustion to raise the temperature of charge materials to the level where required reduction rate of iron ore would be possible. The CO2 generated out of this combustion would in turn react with the carbon present in the coal to generate Co, the reducing agent as per the Boudouvard reaction given below.
C + O2 = CO2
CO2+C = 2CO
Carbon monoxide thus generated will react with the Fe2 O3 present in the iron ore to form metallic iron, removing the oxygen Fe2 O3 is reduced to FE in three stages as represented below
3Fe O3+CO = 2Fe O4 + CO2
Fe3 O4 + CO = 3Fe O + CO2
Fe O + CO = Fe + CO2
Removal of oxygen (reduction) from the iron oxide particle in solid state leaves several pores behind, making the particle pores which looks Spongy when seen under a microscope and hence the name Sponge iron for the product derived from DR process.
A small quantity of limestone is also fed along with iron ore and coal so that Sulphur emitted by coal on heating is not picked up by reduced iron to from iron Sulphide as limestone on calcinations has more affinity towards sulphur than iron.
Management
Backbone
Hailing from an illustrious family from a small hamlet Hothur which had the nature's blessings of iron ore deposits and having strong entrepreneurial urge to excel in life and blessed with sharp business acumen, for Mr H. Ahamed after acquiring a degree in mechanical engineering from Siddaganga Institute of Technology, Tumkur, it was a natural progression for him to pursue a carrier in manufacturing of steel as a value addition to the existing sponge iron production with the support of his sons Mr H. Mohammed Asif after his degree in Business Management and Mr Mohammed Tauseef who has gone to Australia for his Master's Degree in Business Management.
Strength
Aspirations to be the best in the business and believing in their innate strength to face the challenges to bring out the best in them combined with the urge to serve the society, offering employment to the youth of the region, and safeguarding the environment by adopting latest technology in manufacturing, are the valuable and cherishable qualities of the promoters of the The company.
S. Ananda Raman
General Manager (Operations)
Panduranga, L.
General Manager (Admin)
N.G. Girish
Manager-Accounts
Ashok Kumar, N.
Consultant-Civil Engg
Vision
To set up an integrated steel plant of international standards and offer best steel to the global market and stand ahead among the steel manufacturers. They are in pursuit of this goal from day one and they are well on the way of achieving this pinnacle of glory. It would be their constant endeavour as they move ahead, to improve their standards to meet customer expectations by adopting innovative methods by keeping a constant vigil on the global market demands.
They also have Plans
are afoot to set up a power generation unit from the waste gas produced in the
sponge iron manufacturing process which is presently let in the atmosphere. The
Co-Gen project is likely to come up in the near future.
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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.41.07 |
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UK Pound |
1 |
Rs.81.69 |
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Euro |
1 |
Rs.55.84 |
SCORE & RATING
EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
3 |
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PAID-UP CAPITAL |
1~10 |
5 |
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OPERATING SCALE |
1~10 |
5 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
7 |
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--PROFITABILIRY |
1~10 |
4 |
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--LIQUIDITY |
1~10 |
6 |
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--LEVERAGE |
1~10 |
6 |
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--RESERVES |
1~10 |
5 |
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--CREDIT LINES |
1~10 |
5 |
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--MARGINS |
-5~5 |
- |
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DEMERIT POINTS |
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
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--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
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MERIT POINTS |
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
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--EXPORT ACTIVITIES |
YES/NO |
NO |
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--AFFILIATION |
YES/NO |
YES |
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--LISTED |
YES/NO |
NO |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
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46 |
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
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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