MIRA
INFORM REPORT
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Report Date : |
17.12.2007 |
IDENTIFICATION
DETAILS
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Name : |
PRAJ INDUSTRIES
LIMITED |
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Registered Office : |
"PRAJ HOUSE",,
Bavdhan,
Pune 411 021, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
08.11.1985 |
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Com. Reg. No.: |
11-38031 |
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CIN No.: [Company
Identification No.] |
L27101PN1985PLC038031 |
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Legal Form : |
A Public Limited Liability
company. The company’s shares are listed on the stock exchanges. |
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Line of Business : |
Design,
Manufacture, Supply and Commissioning of Fermentation and Distillation
Equipment for Manufacture of Alcohol, Using latest continuous Fermentation
Technology. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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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Maximum Credit Limit : |
USD 6300000 |
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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 a well
– established company having satisfactory track. Trade relations are fair.
General financial position is satisfactory. Payments are usually correct and
as per commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered/Head Office : |
"PRAJ HOUSE",,
Bavdhan,
Pune 411 021, Maharashtra, India |
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Tel. No.: |
91-20-22951511/22952214/39806666 / 22905000 |
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Fax No.: |
91-20-22951718 / 22951515 |
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E-Mail : |
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Website : |
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INDIA |
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Address 1: |
2nd Floor, City Mall,
Ganeshkhind Road, Near National Informatics Centre, Chaturshrungi, Pune-411
016 |
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Tel No.: |
91-20-66248400/66248699 |
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Fax No.: |
91-20-66248417 |
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Email: |
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Address 2: |
201, Sukhdev Vihar, Near Escorts Heart Institute, Opposite - Police
Station, New Delhi - 110 025. |
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Telfax No.: |
91-11-26911583/26911584/26911586 |
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Email: |
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Address 3: |
No.173, 10th Cross, 10th `A` Main, Indira Nagar,IInd Stage, Bangalore 560 038 |
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Tel No.: |
91-80-25251680/25251484 |
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Fax No.: |
91-80-25202432 |
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Email: |
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Factory 1: |
Sanaswadi, Pune 412 207, Maharashtra.. |
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Factory 2: |
Rabale, Navi Mumbai 400 701, Maharashtra. |
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Factory 3: |
EOU-. Dhanori, Pune 412 105, Maharashtra. |
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Factory 4: |
Kandla SEZ: Gandhidham, Kutch 370 230, Gujarat. |
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Export Oriented Unit |
Gat No. 105, Taluka Khed, District – Pune Alandi Markal Road, Dhanori, Pune 412 105. |
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R and D Centre |
Matrix - The Innovation Center "PRAJ HOUSE1, Bavdhan, Pune 411 021 |
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INTERNATIONAL |
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Address: |
Calle 70 A, No. 7-36. Apto 502, Edificio Luby, Santafede Bogota, D.C.
Colombia, Sur America |
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Telefax
No.: |
91-57-1-2122162. |
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Email: |
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Address: |
Post Box # : 41738 Sharjah, United Arab Emirates. |
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Tel
No.: |
91-971-6-5263371 |
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Fax
No.: |
91-971-6-5557302 |
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Email: |
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Address: |
C/o Darmniti Law Office, 4th floor, Ni-lert tower, 2/4 Wireless Road. Lumpini, Pathumwan,
Bangkok 10330, Thailand |
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Tel
No.: |
91-66-2-6553346 |
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Fax
No.: |
91-66-2-6553347 |
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Email: |
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Address: |
Post Box No. 650847, Benmore, 2010, Johannesburg Republic of
South Africa. |
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Tel
No.: |
91-27-11-8838297 |
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Email: |
DIRECTORS
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Name : |
Mr. Pramod Chaudhari |
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Designation : |
Chairman |
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Name : |
Mr. Shashank
Inamdar |
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Designation : |
Managing Director |
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Name : |
Mr. Venkatachala
Datar |
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Designation : |
Director |
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Name : |
Mr. Berjis Desai |
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Designation : |
Director |
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Name : |
Mr. Sivaramakrishnan
Iyer |
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Designation : |
Director |
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Name : |
Mr. Rakesh
Jhunjhunwala |
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Designation : |
Director |
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Name : |
Mr. Anil Joshi |
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Designation : |
Director |
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Name : |
Mr. Parimal Chaudhari |
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Designation : |
Director |
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Name : |
Mr. Daljit Mirchandani |
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Designation : |
Director |
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Date of Appointment : |
18.04.2007 |
KEY EXECUTIVES
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Name : |
Mr. Deepak Mogal |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.06.2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
25801384 |
28.24 |
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Mutual Funds |
6779020 |
7.42 |
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Banks |
36464 |
0.04 |
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Foreign
Institutional Investors |
10666298 |
11.67 |
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Bodies Corporate |
9208062 |
10.08 |
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Indian Public |
28318273 |
30.99 |
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Clearing Members |
1029019 |
1.13 |
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Non-Resident
Indians |
8723234 |
9.54 |
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OCB |
811125 |
0.89 |
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Total |
91372879 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Design,
Manufacture, Supply and Commissioning of Fermentation and Distillation
Equipment for Manufacture of Alcohol, Using latest continuous Fermentation
Technology. |
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Products : |
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GENERAL
INFORMATION
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No. of Employees : |
About 1200 |
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Bankers : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
B. K. Khare and Company Chartered Accountant |
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Address: |
706/708, Sharda Chambers, New Marine Lines, Mumbai 400 020 |
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Internal Auditors |
G. D. Apte and Company Chartered Accountants, 1202/17E, Shivajinagar, Off Apte Road, Pune 411 004. |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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135,000,000 |
Equity Shares |
Rs. 2/- Each |
Rs. 270.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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83,900,066 |
Equity Shares |
Rs. 2/- Each |
Rs. 167.800
Millions |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
167.800 |
162.225 |
81.113 |
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2] Share Application Money |
90.333 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1314.728 |
387.292 |
340.814 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1572.861 |
549.517 |
421.927 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
0.000 |
0.000 |
0.000 |
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DEFERRED TAX LIABILITIES |
41.363 |
29.978 |
24.097 |
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TOTAL |
1614.224 |
579.495 |
446.024 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
371.686 |
270.955 |
207.214 |
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Capital work-in-progress |
82.842 |
8.067 |
3.569 |
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INVESTMENT |
1806.998 |
387.649 |
114.445 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
971.294
|
203.534
|
300.268 |
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Sundry Debtors |
1236.410
|
394.580
|
223.540 |
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Cash & Bank Balances |
373.844
|
294.746
|
201.187 |
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Other Current Assets |
258.903
|
107.189
|
49.822 |
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Loans & Advances |
313.220
|
163.738
|
129.609 |
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Total Current Assets |
3153.671 |
1163.787
|
904.426 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
3788.916
|
1126.625
|
714.838 |
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Provisions |
12.057
|
124.338
|
68.792 |
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Total Current Liabilities |
3800.973 |
1250.963
|
783.630 |
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Net Current Assets |
[647.302] |
(87.176)
|
120.796 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1614.224 |
579.495 |
446.024 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
6074.744 |
2674.985 |
2383.232 |
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Other Income |
89.328 |
25.326 |
0.000 |
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Total Income |
6164.072 |
2700.311 |
2383.232 |
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Profit/(Loss) Before Tax |
1103.649 |
323.871 |
279.125 |
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Provision for Taxation |
238.356 |
79.746 |
61.548 |
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Profit/(Loss) After Tax |
865.293 |
244.125 |
217.577 |
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Earnings in Foreign Currency : |
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Export Earnings |
1336.295 |
674.728 |
0.000 |
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Consultancy ad Others |
1.125 |
35.150 |
0.000 |
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IT Software and IT enables Services |
517.584 |
160.468 |
1259.539 |
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Total Earnings |
1855.004 |
870.346 |
1259.539 |
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Imports : |
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Raw Materials |
518.066 |
189.665 |
201.901 |
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Components |
258.722 |
79.884 |
0.000 |
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Total Imports |
776.788 |
269.549 |
201.901 |
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Expenditures : |
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Cost of
Operations |
4,398.702 |
1,995.457 |
0.000 |
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Personnel Expenses |
286.190 |
171.265 |
0.000 |
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Other Expenses |
341.406 |
177.907 |
2104.107 |
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Finance Charges |
2.517 |
5.309 |
0.000 |
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Depreciation |
31.608 |
26.502 |
0.000 |
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Total Expenditure |
5,060.423 |
2,376.440 |
2104.107 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
1384.900
|
1703.000
|
|
Other Income |
|
197.900
|
114.300
|
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Total Income |
|
1582.800
|
1817.300
|
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Total Expenditure |
|
1191.300
|
1567.800
|
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Operating Profit |
|
391.500
|
249.500
|
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Interest |
|
0.200
|
0.000
|
|
Gross Profit |
|
391.300
|
249.500
|
|
Depreciation |
|
9.800
|
14.100
|
|
Tax |
|
98.000
|
[35.500]
|
|
Reported PAT |
|
283.500
|
270.900
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.00 |
0.00 |
0.07 |
|
Long Term
Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
0.84 |
0.99 |
1.15 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
13.71 |
7.89 |
8.53 |
|
Inventory |
8.10 |
8.24 |
11.01 |
|
Debtors |
7.65 |
8.81 |
10.56 |
|
Interest Cover
Ratio |
44.11 |
14.11 |
15.03 |
|
Operating Profit
Margin(%) |
18.60 |
13.78 |
13.48 |
|
Profit Before
Interest And Tax Margin(%) |
18.10 |
12.80 |
12.65 |
|
Cash Profit
Margin(%) |
14.37 |
9.94 |
10.04 |
|
Adjusted Net
Profit Margin(%) |
13.86 |
8.96 |
9.21 |
|
Return On Capital
Employed(%) |
111.15 |
71.77 |
77.27 |
|
Return On Net
Worth(%) |
85.17 |
50.26 |
59.96 |
LOCAL AGENCY
FURTHER INFORMATION
History
Incorporated as
subject in November 1985 and subsequently converted into a public limited
company with its present name in March 1993, Subject was promoted by Pramod Chaudhari,
Shashank Imandar and Associates. Currently, Pramod Chaudhari is the Chairman
and Managing Director.
The company is in the business of design, manufacture, supply and commissioning
of fermentation and distillation equipment for manufacture of alcohol, using
latest continuous fermentation technology. It has a technical collaboration
with Vogelbusch, Austria; Reheat, Sweden; Dab Brav Consult, Germany and Mcbain
Consultancy, UK.
The subsidiaries of subject are Pacecon Engineering Projects Limited, Praj Far
East Private Limited, Yaan eSites Limited and Process IT LLC
Subject came out with its initial public issue in January 1994, comprising
0.775 Millions equity shares at a premium of Rs. 70 each, aggregating Rs.
62.000 Millions. The public issue highlighted setting up independent marketing
design and engineering facilities at Pune and modernising the existing
manufacturing equipment.
Subject has been awarded ISO Certification from TUV Cert, for its hi-flux range
of plate heat exchangers. The growing demands of the process industry for
effective systems, and cost-effective solutions are a key to the company's
growth in the future.
The company has made diversification in the areas of dairy plant and equipment,
fruit processing and bio-technology. It has sought international collaboration
in the field of dairy engineering and has already entered into an agreement
with 'Packo' of Belgium
The company was awarded ISO 9002 during 2000 for its manufacturing facility.
During August 2005 the company has sub-divided its equity share face value from
Rs.10 per share to Rs.2 per share. Further the company has also issued bonus
equity shares to its equity shareholders in the ratio of 1:1.
The company has
merged Praj Engineering Limited (PEL) with itself. According to the Scheme of
Merger the company has issued 54 equity shares of Rs.10/- each to the
shareholders of PEL for every 10 equity shares of Rs.10/- held by them in
PEL.
Financial Performance
In the year
under review, the company has recorded a total income of Rs. 6,164 million
(previous year Rs. 2,700 million). This represents an increase of over 128%
when compared to the previous financial year. Profit Before Tax also increased
from Rs. 325 million in FY 2005-06 to Rs. 1104 million in FY 2005-06. There is
a decided upward mobility in the key performance parameters. The Quantum Growth
Strategy employed by the management has resulted into this performance level in
the very first year.
In addition,
the management has shown great flexibility in seizing opportunities in new
(overseas) markets where larger capacity plant orders have resulted into better
realization per transaction. The composition of orders in terms of technology
and services has also been significant.
Acquisitions
In September
2006, the company acquired C. J. Schneider Engineering Company
Inc, based in Omaha, Nebraska, USA.
During the year under review the company has invested in a Thai Company,
Praj Far East Company Limited
Assignment
During the year the erstwhile subsidiary of the company process IT LLC USA,
which was engaged in development and marketing of IT enabled client information
system and related engineering package for ethanol industry, is dissolved. As
per the understanding with the other stakeholders, the IPR relating to the
software system mentioned above have been assigned to praj for the value of Rs
20.12 Million.
Management
Discussion and Analysis
Financial
Review
In the financial year 2006-07, turnover more than doubled at Rs.6164 mln (Rs. 2700
mln) with EBIDTA margin of 18% (13%)
Earnings Per Share was at Rs. 10.38 (Rs. 3.01) on a Rs. 2/-
share.
Return on Net worth is at 59% on an increased equity base (together with
converted warrant options).
Return on Net worth is at 59% on an increased equity base (together with
converted warrant options).
Overall Review
The Year
2006-07 as the year in which Praj changed its trajectory.
In their
consolidation year during 2005-06, they have been building the blocks for
quantum growth. And now in 2006-07, they have finally made the transition into
a global entity in every sense of the word. In 2006-07, they have demonstrated
several initiatives which will show them differently in years to come.
Operating Environment and Opportunities
They present
here the dynamics in their two main business lines - Ethanol Technology and
Brewery Plant and Engineering.
Ethanol Technology, Plants &
Equipment
Distillery
(Ethanol) plants and equipment and related wastewater treatment systems
continue to form more than 85% of the revenues. Brewery and other process
equipment account for the balance 15%.
Ethanol is here
to stay. This is borne out by the fact that it has a wider spread, with many
more countries adopting ethanol programmes than before, and that many countries
have demonstrated their commitment by supporting R and D programmes for newer
raw materials and enhanced technologies.
The growth
drivers for ethanol are multifarious, as is well known. However, environment
scores the highest when it comes to ethanol blending. This is borne out by the
fact that countries which are not very high gasoline consumers like Peru
and
Colombia in
South America, Philippines and Indonesia in Asia or even OPEC countries like
Nigeria have announced ethanol programmes. Large users of gasoline like USA,
China, Japan and EU nations, continue to promote ethanol despite the volatile
crude oil prices and concerns about availability of energy crops.
One of the explanations for this phenomenon is the fact that as ethanol becomes
more prevalent in its use, so does the potential to produce it more
competitively by investing into research and development. They already see this
trend wherein companies, including Praj, are investing into identifying newer
energy crops like sweet sorghum and the next frontier of ethanol, cellulosic
raw materials, new micro-organisms, new plant models which will be more energy
efficient. The business model will become more sustainable as more and more
fronts open up and more companies become active in driving this sustainability.
Moving forward, they will see per acre (hectare) cost of ethanol production
moving down, per litre cost of ethanol production moving down and other
initiatives which will make ethanol an integral part of the fuel barrel. It
will be perhaps more competitive and less fraught with strife than hydrocarbon
fuels.
The other
explanation comes from the fact that ethanol is user-friendly and easy to
adopt.
·
Ethanol is a much more viable option for blending with gasoline
(petrol) as it is easily miscible.
·
Most part of the infrastructure from farm to dispensing unit is
well-understood.
·
Production of ethanol will always have a lower learning curve. New
technologies will enhance the performance across the delivery chain and thus
make it more sustainable.
Praj has a good
brand image as technology provider for ethanol plants, globally.
Beer Plant and Equipment
Beer
consumption in India is slated to grow YOY basis at 20%. India has the lowest
per capita consumption which is likely to move up to 0.8-1.0 by 2010. This
presents a clear opportunity for beer capacities to go from current 100 mln
cases to beyond 200 mln cases by 2010.
Growth in
working population as also, changing life style, greater disposable income and
influx of business and tourist groups has also led to the boom in this sector.
Some states have come up with a policy which promotes beer production thereby
attracting investment opportunities in new production facilities. It is
expected that further significant growth is still to be witnessed in this
sector.
Modernization
as well consolidation of brewery plant ownership will see clear opportunities
for refurbishment and greenfield breweries. Currently, Subject has about 50% of
the market share in India. They will aim to increase the marketshare.
In an effort to offer technologies in line with international practices,
Subject has entered into an association with Meura, Belgium for advanced
filtration systems which enhance performance of the brewhouse, the key section
of a brewery. As capacities grow, there will be more business for such
equipment.
New Business, New Markets
The quantum
strategy involves pursuit of both, organic and inorganic growth avenues.
Entry into Bio-diesel Technology, Plant and
Equipment
Praj's entry into
bio-diesel is an organic growth model which will extend Subject ethanol
technology leadership to bio-diesel technology solutions.
Nearly 60% of
world's transport fuel growth will come from diesel. Not only transport, but
certain static machines also utilize diesel which can be easily replaced with
bio-diesel. This opens up vistas of opportunity.
Matrix, their R
and D centre is ready with the technology and equipment package which is
totally home grown. With Europe and even USA now pursuing bio-diesel earnestly,
they hope to capitalize on their presence in the region.
JV for Europe
Praj has been
active in European markets for bioethanol technology solutions for over two
years, where Subject has already contracted a number of orders. Subject and
Aker Kvaerner Netherlands BV had earlier entered into an alliance for
Europe.
With Europe
getting ready to follow a binding guideline of 10% biofuels blending by 2020,
the opportunity matrix for biofuel plants will expand.
Looking at this
opportunity, the two companies have now proposed to extend their association
and position themselves for greater gains in Europe, by forming a JV.
The Boards of
both the companies have given consent to implement the JV to be located in
Netherlands. Praj will hold 60% and Aker Kavaerner will hold 40% of the
shareholding in this JV. Aker Kvaerner is a leading global provider of
engineering and construction services, technology products and integrated
solutions. The JV will also combine the technological expertise of Praj with the
execution capabilities of Aker Kvaerner and their knowledge of European work
regulations, etc.
Subsidiary in USA
During the
year, Subject acquired 100% shares of C J Schneider Engineering Company
Inc, an
engineering company based in Omaha, Nebraska, USA. The Company is active in the
field of detailed engineering for ethanol plants (other than in Praj scope).
Their role complements that of Subject.
Research, Development and
Innovation
R and D
facility, Matrix-The Innovation center, is under a major upgradation.
Keeping in view
the critical role of R and D in strengthening Praj's prospects, a capex of Rs.
400 million has been allocated. Land for an entirely new facility, measuring
about 4 acres, supporting biofuels as well as industrial biotech (white biotech)
related R and D, has been purchased.
Work is already
underway at the site. Meanwhile, programmes already on hand will continue at
the current location.
Manufacturing
Apart from the existing facilities, Subject has added two more manufacturing
facilities including a unit in SEZ. Focus is on deploying modern tecquniques in
the units to build in more efficiency.
The total area
under manufacturing is now at over 4,50,000 sq. ft. subject will be in a
position to handle double the manufacturing load as compared to the previous
year.
Processes and Systems
The company
selected mySAP ERP ECC 6.0 system which includes Project Life Cycle Management,
Corporate Performance and ERP and HR Management Systems.
The system has
'gone live' in April 2007. Full benefit of the system will be seen in the
coming financial years. PwC is the implementation partner.
Pride Human Resources
Recruitment and
Retention are key parts of Praj's HR strategy. The company intensified its
talent seek programme, adding 50% to its staff. Today, they have more than 600
personnel, making them one of the largest resource for biofuels. In future
also, the company will continue to seek manpower at various levels to make its
hierarchy more robust. Recruitment is continuing at all levels.
As an equal
opportunity employer, the company is seeking more candidates from the pool of
trained professional women. The first batch has been recruited under this
policy in order to widen women in workplace.
The
company's engineering / technical staff forms 80% of the workforce.
The Employee
Stock Option Plan, launched in 2005, has been well received.
The first
option was exercised in October 2006.
The Grievance
Committee to review and settle cases under 'Prevention of Sexual Harassment
Policy' did not receive any complaints.
Corporate Social Responsibility
Subject
Foundation has been actively working towards fulfilling social responsibilities
of the company.
Many
initiatives were undertaken during the year which includes areas like environment,
education, health and art.
The Nalla Park project is awaiting clearances from local authority. The
blueprint is ready. The project is expected to progress in this financial year.
As mentioned before, the project envisages construction of an eco-friendly park
which will also serve as a demonstration project for such programmes.
Future Outlook
By 2010, fuel ethanol production will cross 90 bln litres
per annum from the current 59 bln litres. Quantum growth is largely being seen
in Brazil, USA and Europe.
Subject has
covered pretty much all fronts in terms of geography.
They are
exploring ways to present PRAJ in these markets. The picture will be clearer on
the Brazil front, very soon with plans to set up operations through the
acquisition route.
The company is
also exploring the possibility locating of overseas sourcing hubs, wherein
China will play a critical role.
Awards, Certification and
Recognition
Pramod
Chaudhari, Chairman, Subject, was conferred an award for 'Outstanding Contribution
through Innovation' for leading the company in the development of technology
for production of renewable fuel ethanol from Sweet Sorghum.
The award was
conferred by Chemtech Foundation.
Recognition for
Innovation was also received from Pune Alumni Cell of IIT Bombay together with
The Indus Entrepreneur.
As a member of premier forums in the world, including the Global Growth
Company's (part of World Economic Forum), Praj will continue to take its brand
equity to higher levels.
As member of
CII and other institutions and through his personal involvement with various
other institutes of public interest, Chairman, Pramod Chaudhari represents
subject civic responsibilities.
Subject
participation in world's leading biofuel forum through its sponsorships has
seen Subject gain in brand value. Subject is one of the few companies in this
field who represent India in biofuel technologies.
ASME and ISO
In addition to
ASME H and U accredition for the existing facility at Sanaswadi, Subject also
received accredition for its Rabale facility. The facility was established
during the year and within a short span of six months it received recognition
from ASME. Subject has supplied many equipment under CE marking.
Concerns and Challenges
As the company
is moving deeper into different geographies, Scaling Up is no. 1 challenge. Not
only in terms of resources, but also knowledge of industries and applicable
standards. However, with the recent gains in USA and Europe, it is prudent to
say that this phase is also taken up in right earnest and confidence in its
ability is at a high.
Cultural Ethos and business practices can vary according to different regions.
Also, the company is actively looking at making its employee base more
culturally diverse. The European JV and the US acquisition is one way in which
the company will aim to assimilate culturally.
Geo-Political
Risk Management is top on the agenda. The company has initiated Enterprisewide
Risk Management Exercise which will focus on geo-political risks but as also
other business related risks.
Whilst
investments into the sector continue, some areas of concern have remained. A
major input in the manufacture of equipment, stainless steel prices continued
to spiral. The Company had adopted a policy of inventory build-up to hedge
against increased prices. However, some impact is sure to be present, depending
upon the project execution cycle.
Employee
Retention is another area which will continue to pose a challenge as the
trained pool of talent is becoming smaller. However, the company is looking at
multi-pronged approach to retaining and recruiting talent. The company grew its
manpower pool by more than 50% during the last year.
Forward Looking Statement
Statements in
this report particularly those which relate to Management Discussion and
Analysis, describing the company's future plan, projections, estimate and
expectations may constitute into 'Forward Looking Statements' within the
meaning of applicable laws and regulations. Actual results might differ materially
from those either expressed or implied.
In case of accounts receivable and payable where statements
of account have been received, book balances have been generally reconciled and
adjusted appropriately. In other cases balances have been taken as per books of
accounts.
Sundry debtors include retention amount Rs.366.539 millions
(Previous year Rs. 89.343 millions)
The company has raised Rs. 380.397 millions through
preferential allotment of equity shares and warrants during
the year. Out of this, Rs. 316.574 million is deployed
towards expansion of R and D, other manufacturing facilities and acquisition of
US based company. The balance of Rs. 63.823 millions is invested in liquid
mutual funds and banks.
Erstwhile subsidiary of the company Process IT LLC USA which
was engaged in development and marketing of IT enabled client information
system and related engineering package for ethanol industry, is dissolved
during the year. As per the understanding with the other stakeholders, the IPR
relating to the software system mentioned above have been assigned to the
company for the value of Rs 20.12 million.
Fixed
Assets
·
Land Freehold
·
Building
·
Plant & Machinery
·
Furniture and Fixture
·
Computer
·
Office Equipment
·
Vehicles
PRESS RELEASE
Praj successfully commissions
British Sugar Bioethanol Plant
Written by vinci
Tuesday, 11 December 2007
Pune – December 5, 2007
Praj awarded global recognition
- Praj awarded the Forbes Best Under A Billion
Company in Asia
Subject leaders
in biofuels technology, has been awarded the Forbes ‘Best Under A Billion
Company’ in Asia. Praj is amongst the 17 companies from India who have made it
to the list having demonstrated its performance in terms of sales,
profitability and returns for shareholder.
The Forbes list
draws from over 22,500 publicly listed mid-sized companies in Asia and the
Pacific. Those with less than $1 billion in sales are vetted for consistent growth
of both sales and profits over three years. Praj has done this in an
emerging field like biofuels technology where there has been no precedence.
“The award represents our performance for the
last three years and it feels good to be recognized. It is a reward
deserved by all the Prajites and I am truly happy to receive it on their
behalf, said Pramod Chaudhari,
Chairman Subject
at the recently held award ceremony in Singapore.
Subject is also
proud to be included on the world economic forum’s official list of founding
members of the community of global growth companies. Subject was chosen by
because of its constant drive for innovation, its sustainable solutions for an
emerging technology like biofuels and it’s ability to scale up in a new and challenging
business like green technology and its demonstrated leadership.
“By joining the
group of Global Growth Companies, we look forward to learning and sharing
experiences in order to scale up quickly as well as to incorporate global best
practices. The world is very dynamic and we hope this participation will help
us cross-fertilize ideas for the larger good of our planet,” added Pramod Chaudhari.
World Economic Forum Founder and Executive Chairman Klaus
Schwab said, “This is a truly global community made up of companies destined
to join the ranks of the multinationals in the next five to ten years. They are
successful because they are able to challenge the status quo and drive their
industry forward while nurturing the values of global corporate citizenship
which the World Economic Forum is built upon.”
The community
of Global Growth Companies is based on the premise that visionary companies can
expand more rapidly at any time in history, helped by new factors such as
global financing, instant communications, rapidly scaleable technologies and
integrated logistical networks. In this environment, an increasing number of
new players are building a global reach and competitive advantage. This group
of highly influential companies is reshaping the global business landscape.
While Global Growth Companies do not have the size and international reputation
of traditional multinationals, they succeed through speed, flexibility and
constant innovation. Some of the key indicators of these companies are:
- Growth rates exceeding 15% year-on-year
- Revenues typically between US$ 100
million and US$ 2 billion
- Demonstrated leadership in a particular
niche or industry
Subject has
been gaining a firm footing worldwide. Starting with acquisition of an
Engineering Company in the US, known as Subject Schnieder, it is creating a
more on-ground presence to serve customer globally with a deeper local
understanding. It has formed a Joint Venture Company in The Netherlands,
BioCnergy Europa B.V., along with Aker Kvaerner, the leading Engineering,
Procurement and Construction Company, to offer customized solutions to European
biofuels industry. Subject has entered into Brazil with the intention of
creating a larger base to serve the growing brazilian biofuels market Subject
is also working in the cellulosic biomass to ethanol processing technology and
is investing over US$ 10 million in enhancing its research and technology base
in India.
About
Praj
Subject a
global biofuels technology company, offers innovative solutions to significantly
add value to clean technology businesses like bio-ethanol and bio-diesel as
well as for breweries systems for customers, worldwide. Subject is a
knowledge based company with expertise and experience in bioprocesses and
engineering. It delivers end-to-end solutions including wastewater management.
Led by an accomplished and caring leadership, Subject is a socially responsible
corporate citizen. Praj is listed on the Bombay and National Stock Exchanges of
India with a market capitalization of close to USD 1 billion.
About
the World Economic Forum
The World
Economic Forum (http://www.weforum.org), based in Geneva, Switzerland, is an
independent organization committed to improving the state of the world. Funded
by the contributions of 1,000 of the world's foremost corporations, the Forum
acts in the spirit of entrepreneurship in the global public interest to further
economic growth and social progress. The Forum serves its members and society
by creating partnerships between and among business, political, intellectual
and other leaders of society to define, discuss and advance key issues on the
global agenda. Incorporated in 1971 as a foundation, the World Economic Forum
is impartial and not-for-profit, and is tied to no political, partisan or
national interests. In 1995 the Forum was awarded NGO consultative status with
the Economic and Social Council of the United Nations.
Subject is a successfully commissions British Sugar
Bioethanol Plant
Written by vinci
Monday, 05 November 2007
Pune, November
5, 2007
Subject successfully commissions British Sugar Bioethanol
Plant - U.K. ’s First Bioethanol Plant commissioned.
Subject global
biofuels technology company recently commissioned United Kingdom’s first
Bioethanol plant for British Sugar at Wissington, Norfolk. The plant will
produce 70 mln litres fuel grade ethanol from beet sugar syrup.
We are very
pleased to work with British Sugar. Not only is it their first ethanol
plant, but it is also UK’s very first ethanol plant,” said Shashank Inamdar, CEO and MD, Subject
British Sugar,
the leading supplier of sugars to U.K., is part of the £6.0 bln Associated
British Foods (ABF). ABF recently entered into an agreement with BP and
DuPont on an investment to build a world-scale wheat based biofuel plant in UK.
ABF will hold 45% of the JV. Praj Technology has been selected for the
Project while its JV partner Aker Kvaerner is currently carrying out Frond End
Engineering and Design (FEED) assignment for this project.
The Renewable
Transport Fuel Obligation (RTFO) is due to become the UK's primary mechanism to
develop a market for transport biofuels as well as delivering the objectives of
the Biofuel Directive. The RTFO will require road transport fuel suppliers to
ensure that a proportion of the road fuel they supply in the UK comes from
renewable sources. The UK Government is due to introduce the RTFO in
April 2008 which will also require suppliers to report against environmental
and sustainability measures such as ‘reduction in emissions of GHG, e.g. carbon’.
“British Sugar selected subject based on
their cost competitiveness, expertise in sugar ethanol plants and progressive
approach to R and D. Subject have delivered to the design standards required
for UK manufacturing”, said Karl Carter, Group Development Director – British
Sugar.
Subject is a
global Indian company that offers innovative solutions to significantly add
value in ethanol, bio-diesel and brewery technology and related wastewater
treatment systems for customers, worldwide.Subject is a knowledge based company
with expertise and experience in Bioprocesses and engineering. It delivers know
how, License, engineering design, plant and equipment, project management,
commissioning and customer care and turnkey projects. Led by an accomplished
and caring leadership, Subject is a socially responsible corporate citizen.
Subject is listed on the Bombay and National Stock Exchanges of India with a
market capitalization of close to USD 1 billion.
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.39.35 |
|
UK Pound |
1 |
Rs.80.36 |
|
Euro |
1 |
Rs.57.62 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
64 |
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. |
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 |
|