MIRA
INFORM REPORT
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Report Date : |
14.09.2007 |
IDENTIFICATION DETAILS
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Name : |
MONNET ISPAT AND ENERGY LIMITED |
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Formerly Known As : |
MONNET ISPAT LIMITED |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
01.02.1990 |
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Com. Reg. No.: |
009826 |
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CIN No.: [Company
Identification No.] |
L02710CT1990PLC009826 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELM09084F |
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PAN No.: [Permanent
Account No.] |
AAACM0501D |
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Legal Form : |
Public limited liability company. Company’s shares are listed on the Stock
Exchange |
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Line of Business : |
Manufacturers of Sponge Iron |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 16400000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well – established 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/Corporate Office : |
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Tel. No.: |
91-11-26176705/26176706/26176707 |
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Fax No.: |
91-11-26102567 |
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E-Mail : |
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Website : |
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Factory 1 : |
Monnet House, 11 Masjid Moth, Greater Kailash Part II, |
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Tel. No.: |
91-11-29218542-46 |
DIRECTORS
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Name : |
Mr. M S Gujral |
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Designation : |
Chairman |
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Name : |
Mr. P L Nene |
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Designation : |
Director |
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Name : |
Mr. G C Mrig |
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Designation : |
Director |
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Name : |
Mr. Ajay Relan |
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Designation : |
Director |
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Name : |
Mr. V N Kedia |
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Designation : |
Director |
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Name : |
Mr. J P Lath |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Sandeep Jajodia |
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Designation : |
Executive Vice Chairman & Managing Director |
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Name : |
Mr. M P Kharbanda |
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Designation : |
Company Sectary |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of Sponge Iron |
GENERAL INFORMATION
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Bankers : |
Not Available |
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Facilities : |
-- |
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Banking
Relations : |
Satisfactory |
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Associates/Subsidiaries : |
v
A P Coal Washenies Private Limited v
Monnet Danielscoal Washeries Private Limitedc v
Monnet Power Limited v
Monnet Mining Comp. Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
112000000 |
Equity Sharers |
Rs. 10/- Each |
Rs. 1120.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
32500000 |
Equity Sharers |
Rs. 10/- Each |
Rs. 325.000
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 |
325.000 |
315.000 |
261.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
3775.900 |
2773.900 |
1243.200 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
4100.900 |
3088.900 |
1504.700 |
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LOAN FUNDS |
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1] Secured Loans |
3303.900 |
2336.000 |
2626.500 |
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2] Unsecured Loans |
5353.200 |
2624.700 |
14.900 |
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TOTAL BORROWING |
8657.100 |
4960.700 |
2641.400 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
12758.000 |
8049.600 |
4146.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
5009.800 |
4030.900 |
3425.800 |
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Capital work-in-progress |
1810.800 |
455.900 |
354.500 |
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INVESTMENT |
184.900 |
90.100 |
6.700 |
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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 |
1033.200
|
836.100 |
541.700 |
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Sundry Debtors |
459.000
|
591.000 |
387.600 |
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Cash & Bank Balances |
4542.100
|
2734.500 |
137.000 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
1066.000
|
572.300 |
301.600 |
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Total
Current Assets |
7100.300
|
4733.900 |
1367.900 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1184.200
|
1031.800 |
936.200 |
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Provisions |
163.600
|
229.400 |
72.600 |
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Total
Current Liabilities |
1347.800
|
1261.200 |
1008.800 |
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Net Current Assets |
5752.500
|
3472.700 |
359.100 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
12758.000 |
8049.600 |
4146.100 |
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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 |
6181.600 |
5900.900 |
2817.800 |
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Other Income |
411.600 |
199.000 |
25.700 |
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Total Income |
6624.4306 |
6131.1305 |
2874.7304 |
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Profit/(Loss) Before Tax |
1226.900 |
1321.800 |
497.400 |
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Provision for Taxation |
165.200 |
103.700 |
214.000 |
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Profit/(Loss) After Tax |
1061.700 |
1218.100 |
283.400 |
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Expenditures : |
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Cost of Goods Sold |
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Manufacturing Expenses |
230.500 |
198.300 |
64.200 |
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Administrative Expenses |
263.300 |
151.400 |
86.300 |
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Raw Material Consumed |
3196.200 |
2845.200 |
1396.400 |
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Salaries, Wages, Bonus, etc. |
162.800 |
131.600 |
62.700 |
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Interest |
234.000 |
312.100 |
114.300 |
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Power & Fuel |
161.900 |
173.800 |
173.200 |
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Depreciation & Amortization |
248.800 |
216.100 |
94.200 |
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Total Expenditure |
4497.500 |
4028.500 |
1991.300 |
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SUMMARISED RESULTS
|
PARTICULARS |
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|
31.03.2007 (Full
Year) |
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Sales Turnover |
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|
6378.000 |
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Other Income |
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|
246.800 |
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Total Income |
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|
6624.800 |
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Total Expenditure |
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4636.200 |
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Operating Profit |
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|
1988.600 |
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Interest |
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(2.900) |
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Gross Profit |
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|
1991.500 |
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Depreciation |
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|
330.500 |
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Tax |
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|
187.400 |
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Reported PAT |
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|
1347.800 |
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Dividend |
|
|
450.000 |
QUARTERLY
|
PARTICULARS |
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|
30.06.2007 (1st
Quarter) |
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Sales Turnover |
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|
2345.300 |
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Other Income |
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|
35.600 |
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Total Income |
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|
2380.900 |
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Total Expenditure |
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|
1725.900 |
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Operating Profit |
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|
655.000 |
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Interest |
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|
0.200 |
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Gross Profit |
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|
654.800 |
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Depreciation |
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|
106.000 |
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Tax |
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|
63.300 |
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Reported PAT |
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|
460.400 |
200706
Quarter:
EPS is Basic & Diluted. 1.These results were taken on
record by the Board of Directors in its meeting held on 30.07.2007, after
limited review by the auditors and review by the Audit Committee of the
company. 2.The company deals in single segment of steel and therefore, no
segment results are required to be given. 3.There were 54 complaints under
process as on 01.04.2007. During the quarter, 30 complaints were received. 38
complaints were disposed off before the end of the quarter and 46 complaints
are in the process of being resolved. 4.Previous figures have been
regrouped/rearranged wherever necessary.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
1.89 |
1.65 |
1.57 |
|
Long Term Debt-Equity Ratio |
1.76 |
1.50 |
1.33 |
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Current Ratio |
3.30 |
2.04 |
1.02 |
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TURNOVER RATIOS |
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Fixed Assets |
1.15 |
1.36 |
1.10 |
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Inventory |
6.61 |
8.57 |
6.40 |
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Debtors |
11.77 |
12.06 |
10.94 |
|
Interest Cover Ratio |
6.24 |
5.24 |
5.35 |
|
Operating Profit Margin(%) |
27.66 |
31.35 |
25.05 |
|
Profit Before Interest And Tax Margin(%) |
23.63 |
27.69 |
21.71 |
|
Cash Profit Margin(%) |
21.20 |
24.30 |
13.40 |
|
Adjusted Net Profit Margin(%) |
17.18 |
20.64 |
10.06 |
|
Return On Capital Employed(%) |
14.04 |
26.79 |
21.51 |
|
Return On Net Worth(%) |
29.53 |
53.03 |
25.64 |
STOCK PRICES
|
Face Value |
Rs. 10/- |
|
High |
Rs.334.00/- |
|
Low |
Rs.330.50/- |
LOCAL AGENCY FURTHER INFORMATION
History
Monnet Ispat (MIL) promoted jointly by Sandeep Jajodia and Jindal
Strips in 1990 to manufacture sponge iron has set up a plant to manufacture
0.100 Millions tonnes of sponge iron per annum at Village Kurd in the state of
Madhya Pradesh.,
To part finance this project the company came out with a public issue aggregating
Rs.46.000 Millions in Jun 1993. The estimated cost was Rs.360.000 Millions. MIL
entered into a 100% buy-back agreement for its output for a period of five
years with Jindal Strips.
In 1994-95, MIL successfully commissioned steel-making facilities with an
installed capacity of 50,000 tpa. As part of forward integration, the company
proposed to make steel billets and various finished steel products. It also
proposed to set up power generation facilities. MIL decided to double the
capacity of Sponge Iron plant from 0.100 Millions tonnes per annum to 0.200
Millions tonnes per annum.
The company has increased the capacity of Sponge Iron from 0.230 Millions TPA
to 0.360 Millions TPA during the year 2000-01. The capital outlay for this
expansion is expected to be around Rs.410.000 Millions.
The company has decided to merge Monnet Power Limited with itself. The swap
ratio is fixed at one equity share of Monnet Ispat for 10 equity shares of
Monnet Power Limited.
CHANGE OF NAME
The company has changed its name from Monnet ISpat Ltd., to Monnet Ispat &
Energy Ltd. The fresh Certificate of Incorporation regarding change of name was
issued by Registrar of Companies on 21st March 2006. The new name reflects the
true nature of the activities in which the Company is engaged.
OPERATIONAL REVIEW
During the year under review, the Company produced 301084 MT of Sponge Iron,
222675 MT of M.S. Products and 29344 MT of Ferro Alloys as against production
of 240133 MT of Sponge Iron, 145109 MT of M.S. Products and 37813 MT of Ferro
Alloys.
RISK MANAGEMENT
The Company's Risk Management Policy is backed by strong internal control
systems. The risk management framework consists of centrally issued policies
and divisionally laid down procedures to ensure that the business risks are
adequately covered including their monitoring and implementation. The policy is
periodically reviewed by the Board and Audit Committee with emphasis on
maintaining its effectiveness in dynamic business environment.
MANAGEMENT DISCUSSION
AND ANALYSIS
INDUSTRIAL STRUCTURE
The steel industry was passing through global boom for the last 2-1/2 years
till mid of 2005 and started to consolidate towards the second half of
Financial Year 2005-06. The prices had risen sharply up to 2004-05 but started
to correct through the Financial Year 2005-06 by as much as 20-25%. However the
consumption of steel continues to be strong particularly in
They had stated in their previous report that industry dynamics are
likely to change owing to emergence of price disparity of raw material and end
products. The shrinking margins have posed a big challenge to the steel
companies, exposed to external raw materials, whereas the integrated players
may see decline in the operating margins, but the profitability levels would
still continue to be close to industry standards. This emergence of dichromatic
situation, where the raw material would continue to trade closer to peak prices
and end product will sell relatively cheap is going to prevail for a while.
Therefore it is incumbent for the industry to pass through this challenge by
attempting to rationalize the cost through the process of integration of
operations.
There is expected to be huge economic development in the country with focus on
infrastructure development. Keeping this in the view the demand for the steel
in the country would continue to be buoyant. Not with standing the threat of
imports, the efficient and integrated steel companies would be able to do well
and take advantage of this expected robust demand for steel in the foreseeable
future.
OPPORTUNITIES AND THREATS
The major threats in steel company today would come from within the company in
the sense that if the companies are not able to manage the effective cost
control and be competitive through integration of raw materials, they will
remain exposed to the threat of getting adversely effected in the market and
eventually may stand wiped-off. Therefore, this threat will make the companies
to look for opportunities wherein they integrate themselves backward and
forward significantly to improve their cost competitiveness and increase the
volume growth.
They also see an era of consolidation in the industry, which was hitherto
not seen. The takeovers and mergers will become much more active in the
industry on the back of having higher volumes and cost efficiency to take on to
the global challenges. This could be a major threat for many less performing
companies and opportunity for the more efficient ones.
SEGMENT-WISE OR
PRODUCT-WISE PERFORMANCE
The company has done very well in the area of product segment viz. sponge
iron, steel and power. The company has reported excellent volume growth in all the
three divisions. The sponge iron has reported over 100% capacity utilization
and the steel division has reported a growth of 50% in the operations compared
to the preceding year. The power division continue to do well and has reported
growth of about 15% during the year.
OUTLOOK
Outlook of the company from the current financial year will have a major
change in the backdrop of capacity expansion and focus on the energy sector.
The company is going to complete major expansions in sponge iron and power
during the current financial year, which will move it to the pedestal of second
largest coal based sponge Iron Company in the country. The increase in the
volumes would be a growth impetus in the profitability of the company. The
power generation capacity in the company will reach to 150MW by the end of the
financial year and coal-mining operations are expected to reach above one
million ton capacity making it the single largest underground coalmine in the
country. The combined impact will mean a significant portion of the bottom line
getting contributed from the energy sector. The energy portfolio comprising of
coal and power will henceforth be a key driver to the future growth of the
company.
RISKS AND CONCERNS
The availability of iron ore continue to be a challenge to the company. The
iron ore mining arrangement done in the previous year may partly address the
concern. However, their efforts for looking for additional iron ore mines are
on.
As per website details
Their Strong conviction and belief in the basic human values has helped us to grow into a multifaceted conglomerate with a diverse portfolio ranging from Steel, Ferro Alloys, Power, Mining etc.
A young group, Monnet has come a long way in a very short span of time. They view the human resource as their most valuable asset, much more valuable than the other factors of productions i.e. money, materials and machinery. A Product can be duplicated, technology is available for a price, but human being are non-duplicable. In the 21st century, the human resource is going to be the competitive advantage of any company, be it in the manufacturing or the service sector. A customer driven company, they at Monnet, are as much concerned about their external customers as they are about their internal customers.
It is assured that with the given growth potential of the group, opportunities for personal and professional development will be plentiful, but each opportunity is like a door, of which "accepting challenges" is the key.
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.39.91 |
|
|
1 |
Rs.79.88 |
|
Euro |
1 |
Rs.55.88 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|