MIRA
INFORM REPORT
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Report Date : |
26.07.2007 |
IDENTIFICATION DETAILS
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Name : |
PANCHMAHAL STEEL LIMITED |
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Registered Office : |
Plot No. 117, GIDC Industrial Estate, Kalol, District Panchmahals –
389 330, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
12.09.1972 |
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Com. Reg. No.: |
04 - 002153 |
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CIN No.: [Company
Identification No.] |
L2710GJ1972PLC002153 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BRDP01051B |
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Legal Form : |
Subject is a Public Limited Liability Company. The Company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of Rolled Products, Forged Products, Bright Bars and Steel Billets. |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
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Maximum Credit Limit : |
- |
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Status : |
Moderate |
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Payment Behaviour : |
Slow and delayed |
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Litigation : |
Clear |
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Comments : |
Financial position of the company is moderate. Payments are reported as slow and delayed. The company is listed on the Stock Exchanges. The company is expected to wipe out previous losses in a short span due to favourable market conditions. The company can be considered normal for business dealings at usual trade terms and conditions with some caution. |
LOCATIONS
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Registered
Office / Factory : |
Plot No. 117, GIDC Industrial Estate, Kalol, District Panchmahals – 389
330, |
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Tel. No.: |
91-2676-238999
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Fax No.: |
91-2676-235738 |
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E-Mail : |
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Website : |
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Head Office : |
Kothari Chambers, 3rd Floor, |
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Corporate Office : |
"Landmark", 7th Floor, |
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Tel. No.: |
91–265–2343141-49/2310046/42/43/39 |
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Fax No.: |
91-265-2343150 |
DIRECTORS
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Name : |
Mr. Ashok Malhotra |
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Designation : |
Chairman & Managing Director |
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Date of Birth : |
27.08.1952 |
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Date of Appointment : |
18.02.1976 |
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Qualification : |
B. Com |
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Other Directorships : |
v Honey Vick Enterprises (Private) Limited v Amil Enterprises (Private) Limited |
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Name : |
Mr. N. K. Bharal |
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Designation : |
Wholetime Director |
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Name : |
Mr. Nilesh B. Mehta |
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Designation : |
Director |
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Date of Birth : |
24.04.1962 |
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Date of Appointment : |
26.12.1997 |
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Qualification : |
FCA, MBA (IIM-A) |
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Other Directorships : |
v Shaily Engineering Plastics Limited v Transpek Finance Limited v JMC Projects Limited v Jyothy Laboratories Limited v Vikalpa Financial & Management Services (P) Limited v
Venture v
Infinity v Sky Zen Capital Advisors (Private) Limited v Elindia Venture Fund Limited v Elindia Venture Fund Management Limited v Elindia Venture Holding Company Limited v MD Anywhere Inc |
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Name : |
Mr. Amal Dhru |
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Designation : |
Director |
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Date of Birth: |
17.09.1951 |
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Date of Appointment : |
31.01.2004 |
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Qualification : |
FCA, MBA (IIM-A) |
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Other Directorships : |
v Sirhind Steel Limited v Comprehensive Finance Services (Private) Limited v Satellite Engineering Limited |
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Name : |
Mr. Mohanraj M. Singhi |
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Designation : |
Director |
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Date of Birth : |
19.12.1939 |
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Date of Appointment : |
24.03.1992 |
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Qualification : |
B.Com. LLB. |
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Other Directorships : |
Vishal Exports Overseas Limited |
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Name : |
Mr. Ambalal C. Patel |
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Designation : |
Nominee of GIIC |
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Name : |
Mr. Hanish Malhotra |
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Designation : |
Director (Marketing) |
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Name : |
Mr. Pradeep Sharma |
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Designation : |
Director (Operation) |
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Name : |
Mr. Milan Shah |
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Designation : |
Additional Director |
KEY EXECUTIVES
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Name : |
Mr. Dipak Nagar |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters / Promoters Group |
12000000 |
85.78 |
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FIIs |
2500 |
0.02 |
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NRIs |
1100 |
0.01 |
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Mutual Funds |
17300 |
0.12 |
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Bodies Corporate |
99436 |
0.71 |
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Public |
1868964 |
13.36 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Rolled Products, Forged Products, Bright Bars and Steel Billets. |
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Products : |
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Purchasing : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Steel Billets |
MT |
150000 |
50000 |
34503 |
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Rolled Products |
MT |
-- |
72000 |
34586 |
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Bright Bards |
MT |
150000 |
12000 |
8903 |
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S. S. Wires |
MT |
-- |
7200 |
4801 |
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Forged Products |
MT |
6000 |
4200 |
1005 |
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Oxygen Gas |
M3 |
3000000 |
3000000 |
2111380 |
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Nitrogen Gas |
M3 |
10000000 |
10000000 |
1410040 |
GENERAL INFORMATION
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No. of Employees : |
7000 |
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Bankers : |
˛ State
Bank of ˛ State Bank of Saurashtra |
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Facilities : |
Financial Institutions: K ICICI Bank Limited Facilities : Term Loan : Rs. 266.593 millions Other Loans : Rs. 239.500 millions K Gujarat Industrial Investment Corporation Limited Facility : Term Loan : Rs. 98.000 millions K
Life Insurance Corporation of Facility : Term Loan : Rs. 49.000 millions NOTES: All term loans are secured by first charge by way of hypothecation of movable properties, subject to the prior charge of bankers over current assets for working capital advances. All term loans are also secured by first joint equitable
mortgage over all the immovable properties situated at the Registered office
of the company at Kalol District Panchmahal, Terms loans from SBI, SBS and foreign currency loan from ICICI Bank Limited are guaranteed by Director of the company. Working capital advances from SBI and SBS are secured by first charge over the current assets, second charge over the immovable properties and is further guaranteed by Director of the company. Funded interest on term loan for new SMS Project represents the amount of interest deferred upto 31.03.2004 in respect of loans from ICICI Bank Limited and upto 31.03.2001 in respect of loan from LIC as per their respective sanctions for the rehabilitation plan of the company. In respect of other term loan providers, the sanction of the revised rehabilitation plan is awaited and therefore the amount of interest arrears on those loans is shown under Interest Outstanding. |
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Banking
Relations : |
Unknown |
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Auditors : |
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Name : |
K V Thakkar and Company Chartered Accountants |
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Address : |
Mumbai, |
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Memberships: |
v All v Indian Institute
of Metals v International Stainless Steel Forum v Association of
Indian Forging Industry v Engineering and
Export promotion Council v Export Import
Club of v Indian Stainless
Steel Association v Indo American
Chamber of Commerce v Indo German
Chamber of Commerce v v Australian Stainless Steel Development Association |
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Associates/Subsidiaries : |
˛ Amil Enterprises Private Limited ˛ Honeyvick Enterprises Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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2,00,00,000 |
Equity Shares |
Rs. 10.00 each |
Rs. 200.000 millions |
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20,00,000 |
Preference Shares |
Rs. 100.00 each |
Rs. 200.000 millions |
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TOTAL |
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Rs. 400.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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1,39,89,300 |
Equity Shares of each |
Rs. 10.00 each |
Rs. 139.893 millions |
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Add : |
Forfeited Equity Shares |
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5600 Equity Shares (Paid up) |
Rs. 3.00 each |
Rs. 0.016 million |
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4600 Equity Shares (Paid up) |
Rs. 6.00 each |
Rs. 0.028 million |
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500 Equity Shares (Paid up) |
Rs. 7.00 each |
Rs. 0.003 million |
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TOTAL |
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Rs. 139.940 millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
139.900 |
139.900 |
139.940 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
(154.400) |
(432.400) |
177.094 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
(426.495) |
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NETWORTH |
(14.500) |
(292.500) |
(109.461) |
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LOAN FUNDS |
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1] Secured Loans |
1477.300 |
1716.900 |
1706.146 |
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2] Unsecured Loans |
8.400 |
34.800 |
109.190 |
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TOTAL BORROWING |
1485.700 |
1751.700 |
1815.336 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1471.200 |
1459.200 |
1705.875 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
454.400 |
455.900 |
422.135 |
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Capital work-in-progress |
731.400 |
755.000 |
1149.344 |
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INVESTMENT |
0.000 |
0.000 |
0.008 |
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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 |
698.100
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753.100 |
652.787 |
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Sundry Debtors |
260.000
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226.700 |
202.366 |
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Cash & Bank Balances |
27.200
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21.900 |
16.770 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
105.700
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92.600 |
139.996 |
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Total
Current Assets |
1091.000
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1094.300 |
1011.919 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
800.200
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841.300 |
872.983 |
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Provisions |
5.400
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4.700 |
4.548 |
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Total
Current Liabilities |
805.600
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846.000 |
877.531 |
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Net Current Assets |
285.400
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248.300 |
134.388 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1471.200 |
1459.200 |
1705.875 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover |
3226.800 |
3249.500 |
2730.574 |
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Other Income |
169.800 |
52.200 |
0.000 |
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Stock Adjustments |
77.800 |
7.200 |
0.000 |
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Total Income |
3474.400 |
3308.900 |
2730.574 |
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Profit/(Loss) Before Tax |
279.000 |
(183.000) |
(102.758) |
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Provision for Taxation |
1.000 |
0.000 |
0.000 |
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Profit/(Loss) After Tax |
278.000 |
(183.000) |
(102.758) |
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Export Value |
986.800 |
986.800 |
878.210 |
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Import Value |
1227.600 |
1369.600 |
1211.032 |
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Expenditures : |
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Raw Materials |
2085.800 |
2041.100 |
1661.745 |
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Excise Duty |
332.200 |
245.700 |
208.352 |
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Power and Fuel Cost |
309.000 |
305.400 |
0.000 |
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Other manufacturing Expenses |
185.900 |
223.800 |
503.488 |
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Employee Cost |
105.600 |
99.100 |
90.308 |
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Selling and Administration Expenses |
86.600 |
93.100 |
130.575 |
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Miscellaneous Expenses |
0.300 |
365.300 |
0.000 |
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Interest and Financial Charges |
55.200 |
83.800 |
43.296 |
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Depreciation |
34.800 |
34.600 |
30.787 |
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Total Expenditure |
3195.400 |
3491.900 |
2668.551 |
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SUMMARISED RESULTS
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PARTICULARS |
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31.03.2007 (Full Year) |
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Sales Turnover |
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4319.600 |
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Other Income |
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3.100 |
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Total Income |
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4322.700 |
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Total Expenditure |
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3782.200 |
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Operating Profit |
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|
540.500 |
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Interest |
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|
67.100 |
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Gross Profit |
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|
473.400 |
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Depreciation |
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|
33.400 |
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Tax |
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|
111.500 |
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Reported PAT |
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|
328.500 |
KEY RATIOS
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PARTICULARS |
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31.03.2006 |
31.03.2005 |
31.03.2004 |
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Debt Equity Ratio |
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0.00
|
0.00 |
0.00 |
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Long Term Debt
Equity Ratio |
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0.00
|
0.00 |
0.00 |
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Current Ratio |
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1.15
|
0.98 |
0.81 |
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TURNOVER RATIOS |
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Fixed Assets |
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3.32
|
3.52 |
2.83 |
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Inventory |
|
4.45
|
4.62 |
4.95 |
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Debtors |
|
13.26
|
15.15 |
11.30 |
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Interest Cover
Ratio |
|
3.77
|
2.95 |
1.75 |
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Operating Profit Margin |
(%) |
7.53
|
8.67 |
7.10 |
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Profit Before
Interest and Tax Margin |
(%) |
6.46
|
7.60 |
5.85 |
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Cash Profit
Margin |
(%) |
5.79
|
6.09 |
3.75 |
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Adjusted Net
Profit Margin |
(%) |
4.71
|
5.02 |
2.51 |
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Return on Capital
Employed |
(%) |
12.77
|
0.00 |
0.00 |
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Return on Net
Worth |
(%) |
1241.63
|
0.00 |
0.00 |
STOCK PRICES
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Face Value |
Rs. 10.00 |
|
High |
Rs. 0.01 |
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Low |
Rs. 0.01 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject was incorporated on 12th September 1972
at Panchmahal in
Subject was incorporated as a private limited liability company to manufacture 18000 tpa of mild steel ingots. Subsequently it was converted into a public limited liability company.
It became a sick unit and a winding up petition was filed by the creditors. In February, 1976 the Gujarat High Court sanctioned the takeover of the company by Mr. R. L. Malhotra and Mr. Ashok Malhotra from the previous management.
After the takeover, the company turned around. Rolling facilities were set up in 1982 and secondary refining facilities were commissioned in 1986. The company switched over from production of mild steel to carbon, alloy and stainless steel.
The company has facilities to manufacture 750000 tpa of
steel billets and 120000 tpa of rolled products at the GIDC Industrial Estate,
Panchmahal District,
The first stage of technological upgradation and expansion of the rolling mill division commenced commercial production in March, 1994, while the second stage was commissioned in March, 1995. The capacity of the forgings division had also been expanded from 1800 tpa to 4200 tpa in 1994-95.
The company is putting up a modern steel melting shop with a capacity to produced 0.2 million tpa of stainless steel billets.
Company exports had registered a growth of 20% during the year 2000-01, as the figures stood at Rs. 493.000 millions in the previous year.
The company’s quality system had been accredited with ISO 9002 certification during the year 2000-01.
OPERATIONS:
The Company achieved a turnover of Rs.3275.100 millions as
against to Rs.3301.600 millions during the previous year. Your Company is
mainly in production of Stainless Steel Long Products and is concentrating on
value added cold finished Stainless Steel Bright Bars and Wires.
The Company's products are used in the construction, engineering and consumer
durable sectors. Your company has earned a reputation for quality and reliability,
both in international and domestic markets. Globally, the Stainless Steel
markets are expected to grow at an average of about five percent, while the
domestic market is expected to grow at an average of ten to fifteen
percent.
DIVIDEND:
The Directors do not recommend any dividend in view of accumulated
losses.
REHABILITATION AND FINANCIAL SCHEMES:
The Company had made reference under Section 15 (1) of the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA) and was registered with Board
for Industrial and Financial Reconstruction (BIFR).
The Company has been in discussion with financial institutions for its
debt restructuring.
During the year, State Bank of India (SBI) has assigned its term debt to
Asset Restructuring Company (
ARCIL has approved the restructuring package consisting of a term debt of
Rs.1162.300 millions (assigned to ARCIL by ICICI Bank and SBI). LIC has also
approved the restructuring scheme consisting of a term debt of Rs.96.100
millions.
The Company has started making payments to ARCIL and LIC as per the
sanctioned schemes.
NEW SMS PROJECT:
The Directors are optimistic about the Company's future and growing
business prospects. Plans to commission the new SMS Project are being prepared.
Performance:
The performance of the Company has been satisfactory during the year. The
Company has continued its thrust on increasing value added products and
broadening market base.
Opportunities, Threats and Future
Outlook:
The Company has established itself as a quality producer and a reliable
supplier of Stainless Steel long products internationally. This provides the
Company an opportunity to further strengthen its customer base and improve
volumes.
However, the Company's main raw material viz. Nickel is subject to high
price volatility. This puts the Company in a vulnerable situation when the
sales realizations do not match the changes in nickel prices. The Company is
also required to compete established competitors on the international arena.
The Government Policy in relation to export benefits and import duties
has a bearing on the profitability of Company.
The Company has established stringent quality system and produces world class
products. It has also established cost effective production practices. It is,
therefore, hopeful of meeting the threats and challenges and show imp roved
performances in future.
Internal Control System and their
adequacy:
The Company has a proper and adequate system of internal controls developed
over a period of time. The system is supported by management and internal
audits.
The company is in trade terms with:
˜
Ajay Metachem Limited,
˜ Anant Refractories Private Limited
˜ Apex Engineers & Contractors
˜ Assomac Machines Limited
˜ Joglekar Refractories & Ceramics Private Limited
˜ Metech Engineering
˜ Metaflux Company Private Limited
˜ Metallurgical Services
˜ Metropolitan Equipments Consultants
˜ National Engineering Corporation
˜ Neo Power Electronics & Projects
˜ Patel Furnace & Forgings Private Limited
˜ Pratap Enterprises
˜ Polycab Industries
˜ Radha Swami Industries
˜ Radsun Enterprises
˜ Shubham Minerals & Chemicals
˜ Surat Ammonia Supply Co
˜ S I T Hydraulic Engineers
˜ Spare Age India Private Limited
˜ Calcium Chemicals
˜ Deep Engineering Corporation
˜ Dogra Chemical Company (Private) Limited
˜ Encon Furnace Private Limited
˜ G. S. Gases Private Limited
˜ Jaina Industries
˜ Jatan Engineers
˜ Khurana Wire Drawing Dies
˜ Midfield Steels Private Limited
˜ Neo Power Electronics & Project
˜ Niketa Insulators Private Limited
˜
Suony Fibre Glass (
Fixed Assets
Land
& Development
Buildings
Plant
& Machinery
Furniture
& Fixtures
Motor
Vehicles.
Website details attached:
Subject
was established in 1972 and is a leading Stainless Steel focused long product
manufacturer. Their product range includes Austenitic, Martensitic, Ferritic
and Precipitation Hardening grades in various sizes and finishes in the form of
billets, wire rod, hot rolled bars, cold finished bars (bright bars) and wires
and forgings.
With state-of-the-art production facilities they are the only company in
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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. 40.48 |
|
|
1 |
Rs. 82.59 |
|
Euro |
1 |
Rs. 55.55 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
3 |
|
--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 |
NO |
|
TOTAL |
|
31 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|