MIRA INFORM REPORT

 

 

Report Date :

21.05.2007

 

IDENTIFICATION DETAILS

 

Name :

RAK CERAMICS INDIA PRIVATE LIMITED

 

 

Registered Office :

C/o Price Waterhouse Coopers, 4th Floor, 6-3-550, Somjiguda, Hyderabad-500082, Andhra Pradesh

 

 

Country :

India

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

01-42401

 

 

Com. Reg. No.:

09.01.2004

 

 

CIN No.:

[Company Identification No.]

U26919AP2004PTC042401

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

HYDR02125E

 

 

PAN No.:

[Permanent Account No.]

AACCR6424N

 

 

Legal Form :

Private Limited Liability Company

 

 

Line of Business :

Manufacturers of Polished, Unpolished and Glazed Ceramic Wall and Floor Tiles, slabs, Gres Procellanato and Sanitary Ware.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 1200000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well-established and reputed company having satisfactory track records. 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

 

Registered Office :

C/o Price Waterhouse Coopers, 4th Floor, 6-3-550, Somjiguda, Hyderabad-500082, Andhra Pradesh, India

E-Mail :

officemail@rakceramindia.com

Website :

http://www.rakceram.com

 

 

Administrative Office :

H No.69-18-3, Road No.1, Plot No.27, Lalitha Nagar, Galgalapadu, Kakinada-533004, Andhra Pradesh, India

 

 

Factory 1 :

Ida Pedapuram, Adb Road, Samikot-533440, East Godavari District, Andhra Pradesh, India

Tel. No.:

91-884-5588334

Fax No.:

91-884-2356570

E-Mail :

officemail@rakceramindia.com

 

 

DIRECTORS

 

Name :

Dr. Khater Massaad

Designation :

Director

Address :

P O Box 4714, Ras Al Khaimah, United Arab, Emirates

Date of Birth/Age :

17.06.1953

Date of Appointment :

09.01.2004

 

 

Name :

Mr. Hamad Abdallah Al Mutawa

Designation :

Director

Address :

P O 4714, Ras Al Khaimah, United Arab, Emirates

Date of Birth/Age :

30.12.1946

Date of Appointment :

09.01.2004

 

 

MAJOR SHAREHOLDERS

 

Names of Shareholders

No. of Shares

Mr. R A K Ceramics

9999

Al Hamra Real Estate Development LLC

1

Total

10000

 

All the shares are held by directors or their relatives.

 

BUSINESS DETAILS

 

Line of Business :

Manufacturers of Polished, Unpolished and Glazed Ceramic Wall and Floor Tiles, slabs, Gres Procellanato and Sanitary Ware.

 

 

GENERAL INFORMATION

 

Bankers :
  • ABN Amro N.V.

             6-3-248/1/1A, Banjara Hill, Road No.1, Hyderabad-500034, Andhra

             Pradesh, India

  • Standard Chartered Bank

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Price Waterhouse

Chartered Accountants

Address :

6-3-550, 2nd Floor, L B Bhavan, Somajiguda, Hyderabad-500082, Andhra Pradesh, India

 

Holding Company : RAK Ceramics, UAE

 

Note : 24,497,492 Equity Share of RS. 10 – of RAK Ceramics India Private Limited are held by RAK Ceramics UAE (Holding Company )

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

45000000

Equity Shares

Rs.10/- each

Rs.450.000 millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

24497493

Equity Shares

Rs.10/- each

Rs.244.975 millions

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

 

31.03.2006

31.03.2005

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

 

244.975

0.100

2] Share Application Money

 

62.642

64.577

3] Reserves & Surplus

 

0.000

0.000

4] (Accumulated Losses)

 

0.000

0.000

NETWORTH

 

307.617

64.677

LOAN FUNDS

 

 

 

1] Secured Loans

 

999.012

218.600

2] Unsecured Loans

 

1274.727

880.856

TOTAL BORROWING

 

2273.739

1099.456

DEFERRED TAX LIABILITIES

 

0.000

0.000

 

 

 

 

TOTAL

 

2581.356

1164.133

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

 

77.057

48.619

Capital work-in-progress

 

2049.766

514.880

 

 

 

 

INVESTMENT

 

0.000

0.000

DEFERREX TAX ASSETS

 

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
 

236.383

0.000

 

Sundry Debtors
 

0.000

0.000

 

Cash & Bank Balances
 

119.966

177.159

 

Other Current Assets
 

0.000

0.000

 

Loans & Advances
 

106.407

495.160

Total Current Assets
 

462.756

672.319

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
 

236.735

102.868

 

Provisions
 

0.031

0.025

Total Current Liabilities
 

236.766

102.893

Net Current Assets
 

225.990

569.426

 

 

 

 

MISCELLANEOUS EXPENSES

 

0.000

0.000

Expenditure during Construction period

 

228.543

31.208

 

 

 

 

TOTAL

 

2581.356

1164.133

 

 

 

PROFIT & LOSS ACCOUNT

 

Note : The construction activities were in progress during the financial year 2005-06. Since the production activities have not started the Profit and Loss is not available for the financial year 2005-06 & 2004-05 respectively.

 

Expenditure during construction period

 

31.03.2006

31.03.2005

 

 

 

 

Opening Balance

 

31.209

 

Salaries & Wages

 

8.208

0.394

Staff Welfare Expenses

 

2.171

0.018

Travel & Conveyance

 

2.518

0.403

Stationery & Printing

 

0.195

0.070

Rent

 

0.203

0.059

Power

 

2.937

0.310

Rates & Taxes

 

2.177

4.048

Repair & Maintenance – Others

 

2.017

4.048

Postage, Telegraph & Communication

 

0.456

0.100

Bank  Charge

 

4.601

0.700

Insurance

 

6.365

1.056

Professional  & legal Fees

 

6.816

3.349

Auditor’s Remuneration

 

1.132

0.500

Depreciation

 

1.918

0.916

Loss / (Gain ) on Exchange Fluctuation

 

44.054

(3.764)

Loan Commitment Fees

 

0.453

12.355

Interest on Fixed Loan

 

97.932

9.648

Interest Others

 

1.228

0.000

Advertisement Expense

 

6.676

0.116

Miscellaneous Expenditure

 

5.076

1.001

Fringe Benefit Tax

 

0.519

0.000

Wealth Tax

 

0.015

0.000

Income Tax

 

0.046

0.000

Total

 

228.922

31.304

Less : Miscellaneous Income 

 

0.379

0.096

Total Expenditure during Construction period

 

228.543

31.208

KEY RATIOS

 

PARTICULARS

 

 

 

31.03.2006

31.03.2005

PAT / Total Income

(%)
 

NA

NA

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
 

NA

NA

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
 

NA

NA

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
 

NA

NA

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
 

8.16

18.59

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
 

1.95

6.53

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Form 8 Particular for creation or modification of charges 

Corporation identity number or foreign company registrations number of the company 

U26919AP2004PTC042401

Name of the company

RAK CERAMICS INDIA PRIVATE LIMITED

Address

C/o Price Waterhouse Coopers, 4th Floor, 6-3-550, Somjiguda, Hyderabad-500082, Andhra Pradesh

This Form is for

Creation of charge

Type of Charges

Book debts

Floating charge

Particular of the charge holder 

ABN Amro N.V.

6-3-248/1/1A, Banjara Hill, Road No.1, Hyderabad-500034, Andhra Pradesh, India

Nature or description of the instrument creating charge  

Facility cum Hypothecation agreement

Date of the instrument creating charge

01.12.2006

Amount Secure by the charge

Rs.200.000 millions

Brief of the principal terms and conditions and extent and operation of the charge

Rate of interest

Overdraft-Interest – At Bank Prime Lending Rate (Presently 12.75% p.a.) Less 2.75% p.a. i.e. 10.00% p.a. Short Term Prime Lending Rate Loans (STPLR) – Interest – AT negotiated rate.

 

Letter of credit (LC)/Bank Guarantee (BG) – Standard Tariff.

 

These rates are subject to change at the discretion of the Bank without prior intimation to the Borrower.

 

Terms of repayment

Overdraft – Repayable on demand

Short Term Prime Lending Rate Loans – Maximum 12 months

Letter of Credit – Validity / Usance – Max.180 days each

Bank Guarantee – Max.12 months including claim period.

 

Margin

25%. These can be change at the discretion of the bank.

 

Extent and operation of the charge

Hypothecation by way of pari passu charge on stocks and book debts of the company.

Particulars of the Property charged   

Hypothecation by way of pari passu charge on stocks and book debts of the company.

 

 

Website Details :

 

Incorporated in 1989, Subject within a short span of over ten years firmly established itself as one of the world's leading producers of high quality Ceramic wall & floor tiles, Gres Porcellanato, and Sanitary ware.
The company is located 20 km. south of Ras Al Khaimah city along the highway to Dubai and is an hour drive from the Dubai airport.


Subject went public in 1998 and received an overwhelming response from the general public who showed immense confidence in the company. With a total investment capital of over US $ 250 million, the company opted for a long-term policy; to produce quality products, to be a respectable partner and to keep its clients satisfied.


R.A.K Ceramics' drive for excellence and an insatiable appetite for quality and customer satisfaction were accredited with the ISO 9001 certification by CICS (Ceramic Industry Certification Scheme), UK in 1997 At present, the company's products are being exported to more than 135 countries across five continents. Subject started its operations with one production line in June 1991 with an output of 5000 sq.m. per day. With continued expansion programs and usage of sophisticated machinery from the world leaders in Ceramic technology such as Sacmi, Barbieri & Tarrozzi. R.A.K Ceramics, UAE, presently is engaged in the production of 200,000 sq.m. per day of Ceramic / Gres Porcellanato tiles.


Moreover, two presses and three kilns are being used exclusively to produce special items like decors, Listellos, skirting, etc.

 

Headquarters at Ras Al Khaimah


The Sanitary ware factories between them produce 7,000 pieces of quality products per day, including complete bathroom sets with water closets, wash basins, bidets, bathtubs, shower trays, and all related accessories in a wide range of colors and designs. The factories are equipped with five kilns, including one kiln dedicated exclusively for decoration. The company has also added the Robot Spraying Machine to give the pieces an even finish.

 

An Extremely Comprehensive Product Line


Subject offers one of the most comprehensive product lines in the ceramic tile industry, all manufactured by the company. The Company produces one of the industry's largest offerings of colors, textures and finishes as well as an extensive array of coordinating trim and angle pieces.

 

In the Ceramic range, the company produces ceramic wall tiles, ceramic floor tiles, matching decor tiles, listellos, and pencils & cappings and a few other related items.

             

In Gres Porcellanato (porcelain / vitrified tiles), the company produces thousands of models in soluble salt ,salt & pepper and glazed, covering finishes such as polished, semi polished, unpolished , rustic, stone, mosaic, travertino, etc. Some unique patterns and finishes are acquired through new technologies such as roto printing, double charge, Granitech ,advanced MDR, technoslate, twin press, glazed before pressing & dry glaze . Some unique "antique style" finishes in tiles have been possible due to advanced gresporcellanto technology. The company manufactures the largest slabs in the industry with sizes ranging up to 125cm x 185 cm (2 cm thick).

             

Water jet cutting technology also facilitates unique water jet designs and diamonds cutting machine tools help make beautiful vanity tops from gres porcellanato slabs. The tiles are manufactured in very wide range of sizes.

             

In Sanitary ware various models are produced in wash basins (mounted as well as pedestals), water closets
(WC), bidets, bathroom sets, bath tubs, shower trays, kitchen sinks, bathroom cabinets ,accessories and decorated sets.

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.40.90

UK Pound

1

Rs.80.78

Euro

1

Rs.55.18

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

4

--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

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

45

 

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

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions