MIRA
INFORM REPORT
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Report Date : |
06.06.2007 |
IDENTIFICATION DETAILS
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Name : |
RAJRATAN GLOBAL WIRE LIMITED |
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Registered Office : |
11 / 2 Meera Path, Dhenu Market, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
09.09.1988 |
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Com. Reg. No.: |
004778 |
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CIN No.: [Company
Identification No.] |
L27106MP1988PLC004778 |
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Legal Form : |
Public Limited Liability Company. The Company’s shares are Listed on
the Stock Exchanges. |
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Line of Business : |
Manufacturer of Carbon Steel Wires |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD1368088 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having satisfactory
track. Directors are reported as experienced and respectable businessmen.
Trade relations are reported as fair. Business is active. Payments are
usually correct and as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office : |
11 / 2 Meera Path, Dhenu Market, |
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Tel. No.: |
91-731-2533716 / 2534103 |
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Fax No.: |
91-731-2542534 |
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E-Mail : |
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Website : |
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Works : |
200 – B, Sector – 1, Pithampur, |
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Tel. No.: |
91-7292 – 253429 / 253375 |
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Fax No.: |
91-7292 – 253357 |
DIRECTORS
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Name : |
Mr. Chandanmal Chordia |
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Designation : |
Chairman and Whole Time Director |
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Name : |
Mr. Sunil Chordia |
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Designation : |
Managing Director |
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Name : |
Mr. Mofatraj Munot |
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Designation : |
Director |
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Name : |
Mr. Nihalchand Kothari |
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Designation : |
Director |
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Name : |
Mr. S. S. Mehta |
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Designation : |
Director |
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Name : |
Mr. P. D. Nagar |
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Designation : |
Director |
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Name : |
Mr. Abhishek Dalmia |
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Designation : |
Director |
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Name : |
Mr. Chandrashekhar Bobra |
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Designation : |
Director |
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Name : |
Mr. Dilip Deshmukh |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mrs. Anjali Javeri |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Categories |
No. of Shares |
Percentage of
Holding |
|
Promoters |
545140 |
12.52 |
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Directors |
664990 |
15.28 |
|
Person acting in concert |
1411070 |
32.42 |
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Financial Institutions, Banks |
1000 |
0.02 |
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NRIs/ OCBs |
9523 |
0.21 |
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Other Bodies Corporate |
973548 |
22.37 |
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Public |
746529 |
17.15 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Carbon Steel Wires |
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PRODUCTION STATUS
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Particulars |
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Unit |
Installed
Capacity |
Actual
Production |
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P.C. Wire Unit |
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MT |
10000 |
10000 |
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MT |
30000 |
40000 |
GENERAL INFORMATION
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Bankers : |
State Bank of Commercial Branch, IDBI Bank Limited Alankar Chamber, Ratlam Kothi, |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Trilok Jain and Company Chartered Accountants |
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Address : |
Bansi Trade Centre, |
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Associates/Subsidiaries: |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
5000000 |
Equity Shares |
Rs.10/- each |
Rs.50.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
4351800 |
Equity Shares |
Rs.10/- each |
Rs.43.518
millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
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 |
43.518 |
43.518 |
37.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
298.504 |
248.832 |
156.800 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
342.022 |
292.350 |
194.300 |
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LOAN FUNDS |
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1] Secured Loans |
265.569 |
278.469 |
132.900 |
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2] Unsecured Loans |
16.597 |
17.009 |
39.200 |
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TOTAL BORROWING |
282.166 |
295.478 |
172.100 |
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DEFERRED TAX LIABILITIES |
68.154 |
56.532 |
0.000 |
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TOTAL |
692.342 |
644.360 |
366.400 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
401.360 |
349.553 |
203.400 |
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Capital work-in-progress |
22.982 |
14.123 |
31.800 |
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INVESTMENT |
2.002 |
0.002 |
0.000 |
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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 |
76.349
|
99.438 |
44.900 |
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Sundry Debtors |
200.808
|
161.023 |
104.400 |
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Cash & Bank Balances |
3.745
|
19.158 |
07.200 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
28.641
|
24.930 |
35.200 |
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Total
Current Assets |
309.543
|
304.549 |
191.700 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
44.448
|
25.068 |
51.900 |
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Provisions |
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|
08.600 |
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Total
Current Liabilities |
44.448
|
25.068 |
60.500 |
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Net Current Assets |
265.095
|
279.481 |
131.200 |
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MISCELLANEOUS EXPENSES |
0.900 |
1.200 |
0.000 |
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TOTAL |
692.342 |
644.360 |
366.400 |
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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 |
1141.651 |
1037.419 |
708.800 |
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Other Income |
1.495 |
0.830 |
05.000 |
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Total Income |
1143.146 |
1038.249 |
713.800 |
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Profit/(Loss) Before Tax |
87.068 |
71.990 |
49.800 |
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Provision for Taxation |
27.456 |
26.334 |
14.400 |
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Profit/(Loss) After Tax |
59.612 |
45.656 |
35.400 |
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Earnings in Foreign Currency : |
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F.O.B. Value of Exports |
59.199 |
56.524 |
NA |
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Other Expenditure |
6.130 |
7.231 |
NA |
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Total Earnings |
65.329 |
63.755 |
NA |
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Imports : |
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Others |
18.353 |
419.620 |
NA |
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Total Imports |
18.353 |
419.620 |
NA |
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Expenditures : |
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Manufacturing Expenses |
159.847 |
138.997 |
35.200 |
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Administrative Expenses and Selling Expenses |
52.772 |
44.599 |
29.800 |
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Raw Material Consumed |
634.806 |
614.693 |
400.000 |
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Payment to and for Employees |
30.289 |
23.346 |
20.600 |
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Interest |
18.309 |
12.534 |
09.200 |
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Depreciation & Amortization |
22.727 |
17.057 |
11.900 |
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Total Expenditure |
918.750 |
851.226 |
506.700 |
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SUMMARISED RESULTS
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PARTICULARS |
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31.03.2007 Full Years |
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Sales
Turnover |
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|
952.400 |
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Other
Income |
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|
04.800 |
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Total
Income |
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|
957.200 |
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Total
Expenditure |
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|
852.300 |
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Operating
Profit |
|
|
104.900 |
|
Interest |
|
|
26.900 |
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Gross
Profit |
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|
78.000 |
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Depreciation |
|
|
27.500 |
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Tax |
|
|
07.200 |
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Reported
PAT |
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|
32.900 |
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Dividend (%) |
|
|
100.000 |
KEY RATIOS
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PARTICULARS |
|
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity
Ratio |
|
0.91 |
0.96 |
0.90 |
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Long
Term Debt-Equity Ratio |
|
0.54 |
0.59 |
0.43 |
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Current
Ratio |
|
1.41 |
1.53 |
1.31 |
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TURNOVER
RATIOS |
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Fixed
Assets |
|
2.46 |
3.00 |
2.87 |
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Inventory |
|
13.00 |
14.38 |
16.64 |
|
Debtors |
|
6.31 |
7.82 |
6.19 |
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Interest
Cover Ratio |
|
5.75 |
6.77 |
6.41 |
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Operating
Profit Margin(%) |
|
11.21 |
9.80 |
10.00 |
|
Profit
Before Interest And Tax Margin(%) |
|
9.22 |
8.16 |
8.32 |
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Cash
Profit Margin(%) |
|
7.21 |
6.05 |
6.67 |
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Adjusted
Net Profit Margin(%) |
|
5.22 |
4.41 |
4.99 |
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Return
On Capital Employed(%) |
|
17.41 |
17.75 |
17.22 |
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Return
On Net Worth(%) |
|
18.79 |
18.78 |
19.62 |
STOCK PRICES
|
Face Value |
Rs.10.00 |
|
High |
Rs.-0.01 |
|
Low |
Rs.-0.01 |
LOCAL AGENCY FURTHER INFORMATION
Company
Profile:
Subject
is a manufacturer of High Carbon Steel Wires in
RGWL’s has a most modern factory at Pithampur, which is 25 Km from Indore, a
prominent business city in Central India .The quest for quality , excellence
and progress driven by the total dedication of a competent and professional
management team is the hallmark of RGWL.
In a short span of time RGWL has achieved leadership position in Tyre Bead Wire
business in
The Company is committed to supply quality product as per the specific
requirement of its customers.
RGWL’s Tyre Bead Wire manufacturing unit is certified for ISO / TS 16949 : 2002
and P.C. Wire and Strands Unit is certified for ISO 9001 (2000) by M/s TUV Rheinland
Germany.
Tyre Bead Wire is
a high carbon bronze coated steel wire used in all tyres. The main function of
bead wire is to hold the tyre on the rim and to resist the action of the
inflated pressure, which constantly tries to force it off. The bead is the
crucial link through which the vehicle load is transferred from rim to the
tyre. It significantly affects the safety, strength, and the durability of
tyres
Following basic properties are required in the making of tyre bead wire :
- Consistency
in physical properties
- Combination
of high tensile and ductility,
- Uniform and
appropriate bronze coating,
- Strong
adhesion of wire to the rubber,
- Uniform
winding and proper coil dimensions
Following sizes of bead wire are being regularly manufactured by us
·
0.89 MM NT / HT
·
0.96 MM NT / HT
·
1.295 MM HT
·
1.60 MM HT
·
1.65 MM HT
·
1.83 MM NT / HT
·
2.00 MM NT
·
2.20 MM NT
·
2.40 MM NT
They can also supply Bead Wire in other
sizes and Higher Tensile grades as per the specific customer requirement
Fixed Assets:
- Freehold
- Site
Development and Shed
- Plant and
Machinery
- ETP and
Machinery
- Electrical
Instalation
- Office
Equipments
- Furniture and
Fixture
- Vehicles
- Computers and
Pheripherals
- ERP Software
R and D Assets
- Building
- Equipments
- Furniture
Fixture
Director’s Report:
PERFORMANCE
HIGHLIGHTS/OPERATIONS:
In line with the goal of becoming the leader in the country and global
supplier of bead wire, the installed capacity of tyre bead wire unit increased
from 25000 MT to 30000 MT .The overall sales turnover of the Company has
increased by 10.04% i.e. from Rs. 1037.400 millions to Rs. 1141.600 millions.
Profit before depreciation and tax also increased from Rs. 89.047 millions to
Rs. 109.795 millions thereby recording an increase of 23.30% from last year.
Net profit after current tax and deferred tax also rose to Rs. 59.612 millions
as against Rs. 45.657 millions in last year. This was possible because of
improved sales and Company's efforts to save cost of consumables, power and
selling and general administration overheads.
PROSPECTS:
The Indian economy continued to showcase buoyancy in its growth
parameters, in the presence of a strong backing from a robust industrial growth
rate achieved last year. This was reflected by a positively accelerated GDP
from 7.5 per cent in 2004-05 to 8.1 per cent in 2005-06
The business prospects of the Company move according to the growth and
performance of the Automobile and
While there are many positives as they enter FY07, given the current
volatile situation of steel prices, there is some uncertainty about raw material
availability and prices and its impact on margins. However their Company has
made adequate arrangements for its raw material requirements and has the
financial capability to import additional requirement should the need arise.
P.C. UNIT:
Company’s directors are discussing the long-term prospects of P.C. Wire
business and it is being deliberated that P.C. wire business does not fall in
line with philosophy and culture of the Company any more. It also takes away
valuable management time, which may otherwise be used for the speedy growth of
bead wire business. A final view and decision will be taken in the next
Financial year but slowing down of business will have an adverse effect on the
top line in the coming year though this will have overall positive effect on
the bottom line due to more focused efforts.
WIND MILL PROJECT:
During the year, the Company has purchased four additional wind mills
with a total capacity of 1 M.W. from Steel Tubes of India Limited at a cost of
Rs. 10.000 millions to further reduce their cost of energy. Investment made in
FY05 in one wind mill of 1.25 M.W. has contributed Rs. 8.157 millions as total
gross earning through power generation in FY 06
DIVIDEND:
The Directors are pleased to recommend a dividend @ 20% (Rs. 2.00 per
Equity Share of Rs. 10 each) for the financial year 2005-2006, which if
approved at the forthcoming Annual General Meeting, will be paid to the
shareholders whose name appears in the Register of Members as on 10th July
2006.
UTILISATION
OF PROCEEDS FROM PREFERENTIAL ALLOTMENT:
The Company has received Rs.61.322 millions on 31st March 2005, through
preferential allotment of 6, 01,200 shares Rs.10/- each at a premium of Rs.92/-
per share. Last year part of proceeds amounting to Rs. 28.750 millions have
been utilized to repay part of term loan and the balance was used in the
expansion project completed during the year.
MANAGEMENT
DISCUSSION AND ANALYSIS
1. INDUSTRY STRUCTURE AND DEVELOPMENTS:
Subject started making tyre bead wire 10 years back that time six more
companies were in the business and one more Company entered business after us.
Over these years, the Indian tyre bead wire industry has consolidated, while many
strong players decided to quit the business, their Company has come to occupy
prominent position in the industry which today has only three major players in
the Country. Their Company comes in at second position with a domestic market
share of 35%. As domestic market share increases, it becomes increasingly
difficult to grow at a rate faster than the market rate of about 10-12%. With a
view to enhancing their growth prospects, the Company has, over the years, been
working towards building an export market.
They are happy to report that they have now secured ten international
approvals including that from Pirelli, Europe. They would now be supplying to
three of the world's top five tyre manufacturers -Bridgestone, Goodyear and
Pirelli. They will continue to gain inroads into the remaining to namely German
Continental and French Michelin.
It has been understood during their interaction with multinational tyre
companies, that they like to buy from fewer suppliers who have big capacity and
technical capabilities. They also want their supplier to supply material to
multi locations.
As their vision is 'to become a favoured supplier of head wire to global
tyre companies' they have to align their efforts in-line with the customer
requirements, and to achieve this they need to continuously built their
capabilities to supply them at multi locations, which may require us to have
facilities overseas as well.
2. OPPORTUNITIES AND THREATS:
The fate of tyre bead wire industry is linked to the tyre industry, which
in turn is linked to the automobile industry, driven by a robust demand, the
tyre industry is growing at a rate of about 12% annually. Major demand (60%) of
tyres in
In the last few years, they have seen some of the Indian tyre companies
acquiring businesses overseas and their strong relationship with them will get
us more exports.
Budget 2006 has been rewarding for tyre industry by way of reduction in
custom duties on inputs and increase in duties on imported tyres. And with the
government's emphasis on development of infrastructure, particularly roads, the
demand for their product is bound to increase in proportion to the increase in
tyre production and their Company is well positioned to capitalize on this
opportunity.
3. FINANCIAL PERFORMANCE v/s
OPERATIONAL PERFORMANCE:
Financial year 2005-06 brought new opportunities of growth for the
Company. Simultaneously, operational efficiencies have shown encouraging
improvement. This resulted in an improvement in operating margins by 24%, in
PBT by 21% and PAT by 31%.
The raw material consumption to sales has come down to 64% due to
production of more value added product and reduction in wastages. The increase
in excise duty is due to increase in the rate by 4% during the year. The
manufacturing expenses to sales have increased by 1% due to increase in cost of
consumables and energy. The employee cost has increased by 30% on account of higher
salaries and increase in the no. of employees for expansion The increase in
interest and financial charges is due to interest on term loan for expansion of
installed capacity. The increase in depreciation cost is due to increase in
gross block by Rs.75.800 millions during the year.
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 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.40.55 |
|
|
1 |
Rs.80.89 |
|
Euro |
1 |
Rs.54.89 |
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 |
8 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
52 |
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 |
|