MIRA INFORM REPORT
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Report Date : |
12.01.2007 |
IDENTIFICATION DETAILS
|
Name : |
JK LAKSHMI CEMENT LIMITED |
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Formerly known as : |
JK
CORP LIMITED |
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Registered Office : |
Jaykapuram-307019,
Basantgarh, District Sirohi (Rajasthan) |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
06/08/1938 |
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Com. Reg. No.: |
15-427 |
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CIN No.: [Company Identification No.] |
L4999RJ1938PLC019511 |
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TAN No.: [Tax Deduction & Collection Account No.] |
JDHJ02087B |
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PAN No.: [Permanent Account No.] |
AAACJ6715G |
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Legal Form : |
Public limited liability
company. Company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturers
of cement and audio magnetic tapes. |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
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 8500000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is well established
company of JK Group a medium sized diversified industrial house. Trade
relations are fair . General financial position is satisfactory. Payments are
usually correct and as per commitment. The company can be
considered normal for business dealings at usual trade terms &
conditions. |
LOCATIONS
|
Registered Office : |
Jaykapuram-307019,
Basantgarh, District Sirohi (Rajasthan) |
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Tel. No.: |
91-6856-220213 / 220263 |
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Fax No.: |
91-6856-222238 / 242682 |
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E-Mail : |
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Administrative Office: |
Nehru House, 4, Bahadur
Shah Zafar Marg, New Delhi – 110 002, India |
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Plant : |
Lakshmi Cement Jaykaypuram, Basantgarh, Dist.
Sirohi – 307 021, Rajasthan, India JK Magnetics B-4, Surajpur Industrial
Area II, Surajpur – 203 207, District Gautam Budh Nagar, Uttar Pradesh, India |
DIRECTORS
|
Name : |
Hari
Shankar Singhania |
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Designation : |
Chairman |
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Name : |
Bharat
Hari Singhania |
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Designation : |
Vice
Chairman and Managing Director |
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Name : |
B.
V. Bhargava |
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Designation : |
Director |
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Name : |
Nand
Gopal Khaitan |
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Designation : |
Director |
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Name : |
Pradip
Roy |
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Designation : |
Director |
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Name : |
Pravinchandra
V. Gandhi |
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Designation : |
Director |
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Name : |
Raghupati
Singhania |
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Designation : |
Director |
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Name : |
U.
Mahesh Rao |
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Designation : |
Director |
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Name : |
V.
K. Guruswamy |
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Designation : |
Director |
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Name : |
Vinita
Singhania |
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Designation : |
Managing
Director |
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Name : |
Shailendra
Chouksey |
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Designation : |
Whole
Time Director |
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Name : |
S.
K. Wali |
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Designation : |
Whole
Time Director |
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Name: |
Brijesh
K. Daga |
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Designation: |
Company
Secretary |
MAJOR SHAREHOLDERS
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
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Shareholding of Promoter and Promoter Group |
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Indian |
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Individuals/Hindu Undivided Family |
5,09,514 |
0.89 |
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Bodies Corporate |
2,29,93,554 |
40.29 |
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Any Other(Specify) |
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Sub-Total |
2,35,03,068 |
41.18 |
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Institutions |
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Mutual Funds/UTI |
10,215 |
0.02 |
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Financial Institutions / Banks |
94,51,605 |
16.56 |
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Central Government/ State Government
(IPICOL) |
5,42,665 |
0.95 |
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Insurance Companies |
26,09,364 |
4.57 |
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Foreign Institutional Investors |
7,48,838 |
1.31 |
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Any Other (Specify)- Foreign Banks |
5,702 |
0.01 |
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Sub-Total |
1,33,68,389 |
23.42 |
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Non-institutions |
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Bodies Corporate |
68,70,660 |
12.04 |
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Individuals- Individual shareholder holding nominal share capital up to
Rs.0.1 million Individual shareholders holding nominal share capital in excess
of Rs.0.1 million |
81,59,136 35,23,291 |
14.30 6.17 |
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Any Other ( specify)- 1. NRI 2. HUF |
8,70,182 2,69,160 |
1.52 0.47 |
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Sub-Total |
1,96,92,429 |
34.50 |
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Total Public Shareholding |
3,30,60,818 |
57.92 |
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Total |
5,65,63,886 |
99.10 |
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Shares held by Custodian and against which Depository
Receipts have been isuued |
5,13,076 |
0.90 |
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Grand Total |
5,70,76,962 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject
is engaged in as manufacturers of cement and audio magnetic tapes. |
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Actual Production |
|
Cement |
Tonnes |
2400000 |
2663459 |
GENERAL INFORMATION
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Bankers : |
Ø
State Bank of India Ø
Punjab National Bank Ø
Canara Bank Ø
Bank of Baroda |
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Facilities : |
Secured Loans :
Notes : A. Terms of redemption of Debentures/Bonds 13.5% Secured Non-Convertible Debentures of Rs.1,000/-
each - Series B, C, D & E and Series UB, UC & UD aggregating to Rs.21
69.21 millions existing as on the Appointed Date (hereinafter referred to as
the "earlier 13.5% NCDs"), stand reorganised into eight new Series
designated as Series I to VIII carrying varying interest rates with effect
from 30.9.2003 (Appointed Date under the Scheme, refer note 10(a) of schedule
19). The aforesaid Non-convertible Debentures (NCDs) of Rs.1000
each aggregating to Rs.21 692.1 millions are redeemable as under : VIR Series - I (Rs.1735.4 millions) in 2 equal quarterly
installments falling due from quarter ending December-2006, VIR Series - II
(Rs. 1084.8 millions), VIR Series - III (Rs.1301.6 millions), VIR Series - IV
(Rs.1301.6 millions),'VIR Series - V (Rs.434.0 millions), VIR Series - VI
(Rs.65.08 millions), VIR Series - VII (Rs.10846.0 millions), VIR Series –
VIII (Rs.4337.9 millions) in 4 equal quarterly installments falling due from
quarter ending June-2007, June-2008, June- 2009, June- 2010, June- 2011,June-
2012 and June- 2013 respectively. These NCD's are redeemable together with
premium on redemption @ 16.7%, 9.05%, 9.6%, 9.8%, 9.95%, 10.15%, 10.35% and
10.60% respectively. (ii) Deferred interest on (i) above Rs.425.21 millions
(Previous year Rs. 389.31 millions) included in Schedule 3 (e) above. (iii) Non-convertible portion of Zero Coupon Debentures
(earlier Partly Convertible Debentures) of Rs.121 59.0 millions are
redeemable as under: (a) Series A (Rs.985.8 millions), Series B (Rs.657.2
millions), Series C (Rs.2629.0 millions), Series D (Rs. 1643.1 millions)
aggregating to Rs. 5915.1 millions in equal quarterly installments in financial
years 8% in 2006-07 (Oct.06-March-07); 10% in 2007-08; 25% in 2008-09; 25% in
2009-10; 10% in 2010-11; 22% in 2011-12. (b) Series E (Rs.1314.5 millions), Series F (Rs.1971.7
millions) Series C ( Rs.1314.6 millions) in four equal quarterly installments
falling due from quarter ending June- 2007, June- 2008 and June- 2009
respectively and (c) Balance of Series D (Rs. 1643.1 millions) in two equal
quarterly installments falling due from quarter ending December 2006. (iv) Optionally Convertible Bonds (OCBs) of Rs.1000/- each
aggregating to Rs.1394.87 millions are redeemable as under : (a)
Series
A (Rs.697.4 millions), Series B (Rs.2092.3 millions), Series C (Rs.1 743.6
millions), aggregating to Rs. 4533.3 millions in equal quarterly instalments
in financial years 8% in 2006-07 (Oct.06- March-07); 10% in 2007-08 ; 25% in
2008-09; 25% in 2009-10; 10% in 2010-11; 22% in 2011-12. (b) Series D
(Rs.2789.7 millions), Series E (Rs.2092.3 millions) and Series F ( Rs.2789.8
millions) in four equal quarterly instalments falling due from quarter ending
June- 2007, June- 2008 and June- 2009 respectively and (c) Balance of Series
C (Rs. 1743.6 Millions) in two equal quarterly installments falling due from
quarter ending December 2006. The above OCBs include an amount of Rs.618.9 millions
which is optionally convertible into 6,18,900 equity shares of Rs. 1 01- each
at par. Upon such conversion, the outstanding OCBs (Rs. 13948.7 millions) shall stand reduced by Rs. 618.9 millions and shall become
interest free w.e.f. 1st April 2000 till these are fully paid. (v) a) Zero Coupon Bonds - I of Rs.1000/- each aggregating
to Rs.11 34.34 millions are redeemable as under : Series I-A (Rs.5671.7 millions) and Series I-B (Rs.5671.7
millions) in 2 equal half yearly instalments falling due from half year
ending September 2010 and September 2011 respectively. b) Zero Coupon Bonds - II (a) of Rs.1000/- each
aggregating to Rs.967.00 millions are redeemable as under: Series II-A ( Rs.4835.0 millions) and Series II-B
(Rs.4835.0 millions) in 2 equal half yearly instalments falling due
from half year ending September 2010 and September 2011 respectively. c) Zero Coupon Bonds - II (b) of Rs.100/- each aggregating
to Rs.4561.1 millions out of which Rs. 3672.7 millions are redeemable at the
end of 10th year from the date of issue j.e 1.4.2000 and Rs. 888.4 millions
are redeemable, in equal quarterly intalments in financial
years 8% in 2006-07 (Oct.06- March-07); 10% in 2007-08; 25% in 2008-09; 25%
in 2009-10; 10% in 2010-11; 22% in 2011-12. Each quarterly/ half yearly
instalments as stated in (i) to (v) above falls due on the 1st day of the
succeeding month of the relevant quarter / half year. 2 Term Loans aggregating to Rs.3731.1 millions from
Financial Institutions/Banks are optionally convertible into 37,31,100 Equity
Shares of Rs. 10/- each at par. Upon such conversion, the outstanding Term
Loans aggregating to Rs. 8410.13 millions shall stand reduced by Rs. 3731.1
millions and shall become interest free w.e.f 1st April 2000 till these are
fully paid. B. Security 1. Subsisting charges in respect of Term Loans and
Debentures over immovable and movable assets of the Company shall continue to
be in full force and effect as before upto the date fresh charges for
Restructured debt are created in terms of the Restructuring Scheme. The
charges to be created over immovable and movable assets of the Company shall
rank pari passu subject to prior charges of the Company's bankers for working
capital on specified movables. Necessary steps and formalities to extinguish
the charges of debts relating to erstwhile Paper Undertaking over the assets
of the Company are being taken in consultation with the Financial
Institutions/Banks. 2. Term Loans from Banks include Rs.27961.1 millions
(including deferred interest Rs.6901.1 millions) towards Working Capital Term
Loans which is to be secured. 3. Working Capital Loans are secured by hypothecation of
Stores, Raw Materials, Finished Goods, Stock-in- Process and Book Debts etc.
and by way of second charge on the immovable assets. Unsecured Loans :
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Banking Relations : |
Unknown |
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Auditors : |
Lodha
And Company Chartered
Accountants |
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Subsidiaries : |
Ø
Mayfair Finance
Limited Ø
Sidhi Vinayak
Investment Limited Ø
Terrestrial Finance
Limited Ø
Yashodhan Investment
Limited Ø
Panchmahal Properties
Limited Ø
Mayfair Finance
Limited Ø
Terrestrial Finance
Limited |
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Associates: |
Ø
Nav Bharat Vanijya
Limited Ø
J. K. Industries
Limited Ø
The Central Pulp Mills
Limited Ø
Param Shubham Vanijya
Limited Ø
J. K. Udaipur Udyog
Limited Ø
J. K. Pharmachem
Limited Ø
J. K. Sugar Limited Ø
J. K. Investors
(Bombay) Limited Ø
J. K. Synthetic
Limited Ø
Ferro Alloys
Corporation Limited Ø
J. K. Chemicals
Limited Ø
Juggilal Kamlapat Jute
Mills Company Limited Ø
The Industrial Credit
and Investment Corporation of India Limited Ø
JK Paper Limited Ø
JK Agrigenetics
Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
125000000 |
Equity
Shares |
Rs. 10 Each |
Rs. 1250.000 millions |
|
5000000 |
Preference
Shares |
Rs. 100 Each |
Rs. 500.000 millions |
|
|
Unclassified
Shares |
Rs. 100 Each |
Rs. 250.000 millions |
|
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Total |
|
Rs.2000.0000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
49756162 |
Equity Shares |
Rs.10/- each |
Rs.497.562 millions |
|
|
Add
: Forfeited Shares |
|
Rs.0.106 millions |
|
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Total |
|
Rs.497.668 millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 (12 months) |
31.03.2004 (18 months) |
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|
SHAREHOLDERS FUNDS |
|
|
|
|
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1] Share
Capital |
497.700 |
552.900 |
552.900 |
|
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2] Share
Application Money |
0.000 |
-- |
-- |
|
|
3] Reserves
& Surplus |
1634.400 |
1422.100 |
1555.200 |
|
|
4] (Accumulated
Losses) |
0.000 |
(340.900) |
(613.900) |
|
NETWORTH
|
2132.100 |
1634.100 |
1494.200 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured
Loans |
6066.200 |
6164.300 |
6592.400 |
|
|
2] Unsecured
Loans |
850.700 |
811.000 |
828.300 |
|
TOTAL
BORROWING
|
6916.900 |
6975.300 |
7420.700 |
|
|
DEFERRED TAX
LIABILITIES |
|
|
|
|
|
|
|
|
|
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TOTAL
|
9049.000 |
8609.400 |
8914.900 |
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APPLICATION OF FUNDS
|
|
|
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|
|
|
|
|
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FIXED ASSETS [Net Block]
|
6373.900 |
5796.700 |
6328.800 |
|
Capital work-in-progress
|
878.900 |
203.100 |
8.300 |
|
|
|
|
|
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INVESTMENT
|
1.100 |
1716.100 |
1736.800 |
|
DEFERREX TAX ASSETS
|
380.400 |
380.400 |
376.100 |
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
366.400 |
327.500 |
335.500 |
|
|
Sundry Debtors
|
209.900 |
162.400 |
294.000 |
|
|
Cash & Bank Balances
|
120.900 |
225.600 |
106.300 |
|
|
Other Current Assets
|
0.000 |
-- |
-- |
|
|
Loans & Advances
|
1242.900 |
342.000 |
315.000 |
Total Current Assets
|
1940.100 |
1057.500 |
1050.800 |
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
525.400 |
554.400 |
603.300 |
|
|
Provisions
|
|
-- |
-- |
Total Current Liabilities
|
525.400 |
554.400 |
603.300 |
|
Net
Current Assets
|
1414.700 |
503.100 |
447.500 |
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
0.000 |
10.000 |
17.400 |
|
|
|
|
|
|
|
TOTAL
|
9049.000 |
8609.400 |
8914.900 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 (12 months) |
31.03.2004 (18 months) |
Sales Turnover [including other income]
|
5850.500 |
4965.500 |
7188.800 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
562.500 |
240.500 |
(546.800) |
Provision for Taxation
|
|
20.000 |
(231.000) |
Profit/(Loss) After Tax
|
554.500 |
260.500 |
(315.800) |
|
|
|
|
|
Import Value
|
58.914 |
57.942 |
NA |
|
|
|
|
|
Total Expenditure
|
4562.400 |
4238.700 |
8967.200 |
QUARTERLY
RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
Sales Turnover
|
1887.4 |
1632.1 |
Other Income
|
4.7 |
7.0 |
Total Income
|
1892.1 |
1639.1 |
Total Expenditure
|
1292.8 |
1236.5 |
Operating Profit
|
599.3 |
402.6 |
Interest
|
62.6 |
57.5 |
Gross Profit
|
536.7 |
345.1 |
Depreciation
|
109.2 |
109.4 |
Tax
|
39.0 |
2.0 |
Reported PAT
|
388.5 |
233.7 |
Notes
200606 Quarter 1
Expenditure
Includes (Increase)/Decrease in Stock in Trade Rs (50.30) million Consumption
of Raw Materials Rs 199.50 million Consumption of Stores, Spares & Packing
Material Rs 127.70 million Power and Fuel Rs 494.80 million Staff Cost Rs 85.60
million Transport, Clearing & Forwarding charges Rs 293.60 million Other
Expenditure Rs 141.90 million Tax Includes Current Tax Rs 38.00 million Fringe
Benefit Tax Rs 1.00 million EPS is Basic Status of Investor Complaints for the
quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter
Nil Complaints Received during the quarter 04 Complaints disposed off during
the quarter 04 Complaints unresolved at the end of the quarter Nil 1.
Production for the quarter increased by 12%.Operating Profit is higher by 140%
over corresponding quarter of the previous year. 2. Provision for deferred tax
liability / asset for the current year shall be reviewed at year end. 3. The
Company has allotted 37,31,100 Equity Shares at par to the Secured lenders (FIs
and Banks) on their exercising the option for conversion of convertible portion
of Term Loans. 4. Depreciation for the quarter amounting to Rs 26.00 million
pertaining to revaluation / business valuation of assets hitherto being charged
to Profit & Loss Account now charged to Revaluation Reserve. 5. The
shareholders have approved allotment of 3589700 Equity Shares at a price of Rs
97.50 (including a premium of Rs 87.50 ) per Equity Share by way of
preferential allotment to a group Company. 6. The Figures for the previous
quarter are inclusive of demerged Investment Division hence not comparable and
have been regrouped / rearranged wherever necessary. 7. The Company has only
one business segment i.e. Cement. 8. The quarterly results have been taken on
record at the Board meeting held on July 27, 2006 and reviewed by auditors
Notes:
200609 Quarter 2
1.
Operating Profit and Profit after Tax is higher by 86% and 174 % respectively
over corresponding quarter of the previous year. 2. Due to unprecedented heavy
rains in and around the Company's Plant in the month of August 2006, the
production and despatches were affected. Normalcy has since been restored and
the impact thereof is not expected to go beyond the current quarter. 3.The
promoter group has inducted Rs. 350 millions crores against issue of Equity
shares (including premium) and has also subscribed to convertible Warrants of
Rs 400 millions (10% advance received) both by way of preferential allotment in
accordance with SEBI guidelines to help the Company's capex and for further
growth and development. The proceeds from the Equity issue have been used for
captive power plant and other ongoing capital expenditure. 4. Depreciation for
the quarter and for six months amounting to Rs 26 millions and Rs. 52 millions
respectively pertaining to revaluation / business valuation of assets hitherto
being charged to Profit & Loss Account now charged to Revaluation Reserve.
5. Provision for deferred tax liability / asset for the current year shall be
reviewed at year end. 6. There were no investor complaints pending atthe
beginning of the quarter. The Company has received eleven complaints during the
current quarter and all were resolved. 7. The Figures, for the quarter and six
months ending 30.09.2006 are after demerger hence not comparable and have been
regrouped / rearranged wherever necessary. 8. The Company has only one business
segment i.e. Cement. 9. The quarterly results have been approved by the Board
of Directors attheir meeting held on 27.10.2006 and reviewed by auditors.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt
Equity Ratio |
4.54 |
6.36 |
6.71 |
|
Long
Term Debt Equity Ratio |
4.49 |
6.15 |
6.43 |
|
Current
Ratio |
2.01 |
1.58 |
1.41 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
0.65 |
0.57 |
0.45 |
|
Inventory
|
20.18 |
17.85 |
10.67 |
|
Debtors |
37.61 |
25.93 |
13.98 |
|
Interest
Cover Ratio |
3.52 |
3.90 |
(0.75) |
|
Operating
Profit Margin (%) |
18.80 |
13.01 |
6.70 |
|
Profit
Before Interest and Tax Margin (%) |
11.22 |
4.74 |
(4.01) |
|
Cash
Profit Margin (%) |
15.50 |
11.87 |
4.67 |
|
Adjusted
Net Profit Margin (%) |
7.92 |
3.60 |
(6.04) |
|
Return
on Capital Employed (%) |
9.09 |
3.31 |
0.00 |
|
Return
on Net Worth (%) |
32.63 |
16.34 |
0.00 |
LOCAL AGENCY FURTHER INFORMATION
The
company’s valuable Fixed Assets includes Land, Leasehold Land, Buildings, Plant
and Machinery, Furniture, Fixtures and Equipments, Vehicles and Locomotives,
Railway Siding
Generic names of the
principal products of the company are:
|
Item Code
No. (ITC CODE) |
Products
Description |
|
2523.29.01 |
Grey Portland Cement |
Expenditure
Includes (Increase)/Decrease in Stock in Trade Rs 21.70 million Consumption of
Raw Materials Rs 133.00 million Consumption of Stores & Spares &
Packing Material Rs 118.90 million Power and Fuel Rs 413.60 million Staff Cost
Rs 75.90 million Transport, Clearing & Forwarding charges Rs 171.60 million
Other Expenditure Rs 100.70 million Tax Indicates Provision for Fringe Benefit
Tax EPS is Basic & Diluted Status of Investor Complaints for the quarter
ended June 30, 2005 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 Company
has only one business segment, i.e. 'Cement'. 2. Despite improvement in sales
realization, substantial hike in Power & Fuel coat have affected
profitability. 3. Other Income includes interest for earlier period amounting
to Rs 44.40 million no longer required, pursuant to the sanctioned scheme. 4.
Provision for deferred tax liability / asset for the current year shall be
reviewed at year end. 5. The quarterly results have been reviewed by the
Auditors and taken on record at the Board meeting held on July 26, 2005.
JK Corp,(formerly Straw Products), the flagship of Hari Shankar Singhania, which was originally incorporated in 1938 to manufacture Straw Board from Wheat straw has grown into a multi-product corporation by diversifying into manufacture of paper, Cement, Magnetic Tapes, Polyester Staple Fibres(PSF) and Polyester Filament Yarn(PFY).
Lakshmi Cement, the cement division of the company which commenced production
with an installed capacity of 0.5 million tonne at Sirohi,Rajasthan was set up
in Rajasthan in 1982 has enhanced the capacity to 15 lac tonne in 1996-97 and
further to 19.69 lac tonne by March 1999. The capacity currently stands
enhanced to 2.4 million tones by way of debottlenecking.
JK Magnetics is one of the leading manufactures of audio tapes in India. It's
Surajpur plant put up in 1989, currently has an installed capacity of 3240
MRM.
The company's JK Paper Mills, started in 1962, has a diversified
product range and was the first to manufacture surface-sized paper in India. It
promoted an independent Pulp and Paper Research in 1971. In September 2000, the
company has hived off its JK Paper division to Central Pulp Mills Ltd, a group
company, to form a focussed paper company, called JK Paper Ltd.
Orissa Synthetics; originally a separate company was merged with the JK Corp as
per the BIFR restructure plan. Orissa Synthetics has commenced manufacturing of
PSF in 1987. It further diversified into polyester filament yarn with
technology from Chiel Synthetics, a Samsung group company. JK Corp has taken
foriegn collaboration for sophisticated process control and quality control
systems by Tata Honeywell and Gamma-Metrics, USA. In 1998-99, the company has
sold the Orissa Synthetics division to Reliance Industries during the year
1998-99.
The Board of Directors of the company has approved the merger of of JK Udaipur
Udyog, which has an 1MTPA cement capacity with JK Corp in it's meeting in Sep
2000. The company made capacity enhancement from 19.60 to 2.4 millions MT
without any capex.
OPERATIONS
Their
Company continued to move forward on almost all the fronts in the year 2005-06,
once again achieving healthy growth in production, sales and profits. The
Company's Sales and Other Income grew to Rs.7080 millions. The Operating Profit
(PBIDT) at Rs.1288.1 millions was higher by 66%. The Profit after Tax was
Rs.554.5 millions as against Rs.260.5 millions in the previous year,
registering a growth of 11 3%.
The
Company's cement production including clinker for sale has been at a record
high of 294.1 millions MT, against 271.8 millions MT in the previous year.
Sales for the year crossed 3 million tones.
The
overall cement demand at national as well as our zonal levels registered a
growth of over 10%. This has led to healthy balance between demand and supply,
leading to improved cement prices.
Company's
continued emphasis on improvement of efficiency parameters and cost compression
has helped it to contain the increase in cost of production to just about 1%
when the petroleum prices rose by as much as 20% besides increase in the cost
of other inputs.
During
the year, the Cement Industry, especially in the State of Rajasthan, witnessed
a steep increase in the road freight due to almost 50% reduction in the truck
availability. This was due to and as a consequence of a Supreme Court ruling in
November 2005 prohibiting overloading of trucks. However, the Company was able
to improve its realization by continuing its efforts to reduce the distribution
cost and improve market mix.
The
Projects initiated by the Company to improve its operating efficiencies and
cost reduction have been progressing well and are expected to be completed by
September 2006, ahead of schedule. On completion of these projects, in addition
to the improvement in the operating efficiencies, Company's cement production
will also stand raised to 3.2 million tones per annum. Work on setting up of
the Captive Thermal Power Generation Plant of 36 MW capacity in the Company, is
in full swing and is expected to be completed by the end of this financial
year. Captive power will result in considerable savings in cost.
With
further improvement in operating parameters and buoyant outlook in the cement
market, it is expected that Company's operating profits will improve further in
the coming years.
As
approved by the Shareholders, the Company's name has been changed to Jk Lakshmi Cement Limited. w.e.f. 06.10.2005.
SCHEME OF RECONSTRUCTION, ARRANGEMENT
AND DEMERGER
The
Company's Scheme of de-merging its Investment Division to another company has
been completed.
The
Scheme of Reconstruction, Arrangement and Demerger between JK Lakshmi Cement
Limited (the Company) and Ashim Investment Company Limited (AICL), and their
respective Shareholders and Creditors (the Scheme) was sanctioned by the
Honorable High Courts of Rajasthan (Jodhpur) and Delhi. The said Scheme has
become effective on 31st March 2006 and operative w.e.f. 1st April 2005 (the
Appointed Date). Pursuant to the Scheme –
(i)
The Investment Division of the Company comprising investments, fixed assets,
current assets, loans and advances and inter-divisional loan and current
liabilities stood transferred to and vested in AICL w.e.f. 1st April 2005.
(ii)
The investments of the Company in the subsidiary companies were also
transferred to AICL and consequently the said companies ceased to be its
subsidiaries and became subsidiaries of AICL with effect from the Appointed
Date. As such, the Company is no longer required to comply with the
requirements of Section 212 of the Companies Act 1956.
(iii)
All the profits accrued and/or losses incurred in respect of the business of
the said Investment Division, carried on by the Company from 1st April 2005 for
and in trust for AICL, were transferred to AICL.
(iv)
The pre-Scheme paid up Equity Share Capital of the Company of Rs.5528.462
millions comprising 552,84,624 fully paid Equity Shares of Rs.10/- each (after
adjustment of 25,678 Equity Shares forfeited during the year), stood
reorganized and reduced to Rs.497.561 millions comprising 4,97,56,162 fully
paid Equity Shares of Rs.10/- each.
(v)
Full impact of the Scheme has been given in the Audited Accounts of the Company
for the year ended 31st March 2006.
OVERVIEW
Ø
Sales Turnover Rs.7000
millions against Rs.5920 millions in the previous year viz. a growth of 18%.
Ø
Capacity utilization
123%.
Ø
Cement production of
294.1 millions MT (including clinker for sale) against 271.8 millions MT in the
previous year, a growth of 8%.
Ø
Cash Profit has
increased to about Rs.1090 millions from Rs.730 millions in the previous year.
Ø
Significant improvement
in the Profit after Tax by 113% from Rs.260.5 millions in the previous year to
Rs.554.5 millions.
INDUSTRY SCENARIO
The
Cement Industry has recorded a healthy growth of about 10% against the previous
year's growth of 8%. This growth is keeping in line with the healthy growth
that the Indian economy is registering. Their marketing zone registered a
demand growth of 10% of which Northern region achieved a growth 11.9% while
Gujarat, a major constituent of their market, grew by a nominal 4.7% only.
COMPANY'S PERFORMANCE
The
Company's production (including clinker sale) increased to 294.1 millions MT
from 271.8 millions MT thereby achieving 123% capacity utilization. The
Company's cement and clinker sales increased from 278.4 millions MT to 301.2
millions MT, a growth of 8.2% while the cement sales grew by 9%. The Company's
turnover at Rs.7000 millions has registered a growth of about 18%.
The
demand growth of 10% in their marketing zone has been impressive viewed against
the growth of 7.50% and 6.45% in 2004-05 and 2003-04 respectively. The
corresponding increase in the capacity during the year 2005-06 has been only
about 3%. The lower capacity addition has helped in reducing the overhang of
the supplies thereby bringing about the much needed improvement in the cement
prices during 2005-06. The improved prices, however, had to bear the burden of
steep hike in the freight cost, especially in the road sector, which was
firstly impacted by the increase in the petroleum prices and secondly in the
last quarter due to a Hon'ble Supreme Court's order in November which
restricted the loading capacity of the trucks, on which the road transportation
sector has been working so far. This has led to severe shortage of truck
availability especially in the State of Rajasthan and hence impacted the
freight rates. During 10 the year the petroleum prices were hiked twice, the
cumulative effect of which was 20%. The increase in the petroleum prices
impacted cost of the fuel which is mainly
based
on Petcoke, a crude by-product, as also the cost of the captive power
generation which isdiesel based. The Company's un-interrupted efforts to
improve its efficiencies have been yielding positive results year on year and
this year too has been no exception.
The
power consumption have been brought down by 2 units to 82 Kwh/MT of cement from
84 Kwh/MT of cement in previous year. Similarly coal consumption has been
reduced to 84 Kg/MT of cement from 93 Kg/MT of cement in the previous year.
These improvements during the year have helped the Company to contain the
increase in cost of production to just 1 % despite the cost of inputs going
much higher.
Marketing
The
Company's thrust on prime positioning of JK Lakshmi brand and redistribution of
marketing areas to contain the logistic cost have largely been successful. A
major percentage of Company's sale is now coining from the near by markets of
Rajasthan and Gujarat.
The
Company's consistently high quality and its continuous efforts to improvise the
services have been instrumental in the high level of satisfaction amongst their
customers. Efforts are also being made to increase the basket of construction
related product offerings so as to provide a single window solution to all our
customers for their construction related requirements. The sale of blended
cement during the year has increased by nearly 50% from 81.1 million MTto 120.6
million MT.
The
sale of JK Lakshmi Ready Mix Concrete has increased to nearly 0.1 millions
cu.mt. with the increase of three more RMC plants in the Company's fold.
The
Company also won the Group's prestigious "People Management Award",
making it the unbeaten recipient on four times. This award is given to that
company in the J.K. Organisation which adopts the best People Management
practices as evaluated against rigorous critieria laid down by a committee
involving outside agency as well.
OUTLOOK
Cement
sector during the year has contributed significantly to the growth in the
manufacturing sector as well as to the growth of country's GDP. The increase in
the consumption indicates that the much required investment in the
infrastructure development of the country is finally being deployed. The demand
supply position being in a healthy situation, the price environment has
improved considerably and it is expected that sufficient investment would flow
in, in creating new capacities, to enable the industry to keep pace with the
increased requirement of the economy.
The
emerging strong position of Indian economy and the ever increasing requirement
of the infrastructure sector indicate a continuous growth in the cement
consumption in the range of 8% to 10% for at least next few years. The
Company's expected completion of the ongoing projects during the coming year
would give further fillip to Company's track record of maintaining a healthy
growth. The Company's favorable location enabling it to cater to both Northern
and Western markets, its ability to continuously improve its operation with a
constant customer focus and a very strong brand position promises a bright future
for their Company.
Press Release
New Delhi,
October 7:
The Company is in the final leg of its restructuring exercise. JK
Corp is hiving off its financial investments into a separate company to become
a pure cement company, rechristened as JK Lakshmi Cement Limited.
A multi-business entity with interests in strawboard, paper,
cement, polyester fiber, audio magnetic tapes, and others, JK Corp initiated
the restructuring exercise in the year 2000 in its drive to establish different
businesses into strong and focused entities. The demerger of the financial
holdings division would complete this restructuring exercise and reflect its
positioning as a pure cement company.
As the company's businesses grew in size it was deemed appropriate
to hive off the businesses into strong and focused entities. Consequent to this
restructuring exercise the paper division was merged with another group
company, Central Paper Mills, to form JK Paper. The interests of JK Corporation
Limited has been mainly cement along with a financial holdings company, which
is now being demerged into a separate company to complete the restructuring as
a cement-focused company, said Mrs. Vinita Singhania, Managing Director, JK
Corporation.
The restructuring has enabled the company to focus on its cement
business achieving significant growth. The company has already undertaken a
Rs.400 millions capacity enhancement and cost reduction project. It has
already completed its first phase of this project ahead of schedule raising its
capacity from 2. 7 million tone to a level of 3 million tone. The second
phase of this project would be completed by middle of next year which would
further enhance its capacity to 3.3 million tones.
The Company has been consistently improving its performance, last
year with a turn over of Rs.5920 millions ( an increase of 28% over the
previous on an annualized basis). Its Profit after Tax is Rs.260.5
millions as against a loss of Rs.315.8 millions over the previous year
(Rs.21.05 on annualized basis). Even in the first quarter, viz.
April-June 2005 it maintained the tempo of its growth with a turnover of Rs.
1512.6 millions (corresponding to Rs.1465 millions in the first quarter of the
previous year) and its Profit after Tax was Rs.118.9 millions as against Rs.96.1
millions in the corresponding quarter of the previous year.
“The restructuring will enable ‘Lakshmi Cement’ to emerge as a
more strengthened cement company with renewed focus on manufacturing and
marketing cement. We are glad that the market has responded very favorably and
the future holds much promise,” Mrs. Singhania added.
About JK Corporation:
JK Corporation, a member of the JK Organization, has been as
multi-product company with interests in strawboard, paper, cement, polyester
fiber, audio magnetic tapes, etc. As part of the restructuring exercise to
establish each businesses as strong and focused entities, the paper division
was merged with another group company, Central Paper Mills, to form JK Paper.
Subsequent to which the core business of JK Corp has been in cement, along with
a financial holdings division.
Lakshmi Cement - the cement division of JK Corp which is a blue
chip company with an annual turn over in excess of Rs 5920 millions, is a giant
in the Indian cement industry. Lakshmi Cement has acquired the latest
technology from M/S Blue Circle Industries, PLC of UK and the ultra modern
equipments from Fuller International of America. The present annual installed
capacity of the two state of the art plant at Jaykaypuram in Sirohi district of
Rajasthan is 3 million tones.
The restructuring is targeted at:
Ø To emerge as a focused cement company
Ø Clean balance sheet reflecting only the
operation of cement thereby capturing the true potential of its business
Ø Enable the company to raise resources for
further growth.
Ø Synergize with the brand name thereby
moving up its brand positioning
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 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. 44.34 |
|
UK
Pound |
1 |
Rs. 87.61 |
|
Euro |
1 |
Rs. 57.61 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
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
|
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 |