MIRA INFORM REPORT

 

 

Report Date :

10.04.2008

 

 

IDENTIFICATION DETAILS

 

Name :

NESCO LIMITED

 

 

Registered Office :

Nesco Complex, Western Express Highway, Goregaon [East], Mumbai 400063, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

15.04.1946

 

 

Com. Reg. No.:

004886

 

 

CIN No.:

[Company Identification No.]

U17100MH1946PLC004886

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMN09333C

 

 

Legal Form :

Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges

 

 

Line of Business :

Manufacturer of Engineering Equipments

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

USD 1750000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and reputed company having fine track.  Available information indicates satisfactory financial responsibility of the Company. Trade relations are fair.  General financial position is satisfactory. .  Payments are reported as usually correct and as per commitments.

 

The Company can be considered good for normal business dealings at usual trade terms and conditions

 

 

LOCATIONS

 

Registered Office :

Nesco Complex, Western Express Highway, Goregaon [East], Mumbai 400063, Maharashtra, India

Tel. No.:

91-22-66450123

Fax No.:

91-22-66450101

E-Mail :

bec@nesco.in

 

 

Plant 1 :

NSE Complex, Western Express Highway, Goregaon (East), Mumbai 400063, Maharashtra, India

 

 

Plant  2 :

Anand Sojitra Road, Karamsad, Gujarat, India

 

 

Plant 3 :

Nadiad Khambat Road, Vishnoli Taluka, Gujarat, India

 

 

Sales Offices:

NEW DELHI OFFICE :

B-l -102,10th Floor, Himalaya House, Curzon Road, New Delhi 110 001, India

Phone : 91-11-30422644

Fax : 91-11-30424679

 

CHENNAI OFFICE :

Fagun Mansion, 26, Commander-in-Chief Road, Chennai 600 015. India

Phone : 91-44-28271108, 28721821

Fax : 91-44-28272648, 28277429

 

KOLKATA OFFICE:

Benoy Bhavan, 27 - B, 5th Floor, Camac Street, Kolkata 700 016, India

Phone / Fax : 91-033 - 22809703

 

KARMASAD OFFICE :

Anand Sojitra Road, Karamsad

Phone : 91-2692 - 237992, 233458

Fax : 91-2692-237991

 

VISHNOLI OFFICE :

Nadiad Khambat Road, P.O. Vishnoli, Tal. Pethlad, Dist - Anand

Phone : 91-2697-235347

 

 

 

DIRECTORS

 

Name :

Mr. Sumant J. Patel

Designation :

Chairman & Managing Director

 

 

Name :

Dr. Ram S. Tarneja

Designation :

Director

 

 

Name :

Mr. Bharat Patel

Designation :

Director

 

 

Name :

Mr. Abbas Nakhoda

Designation :

Director

 

 

Name :

Mr. K. S. Shrinivasa Murthy

Designation :

Director

 

 

Name :

Mr. Mahendra K. Chouhan

Designation :

Director

 

 

Name :

Mrs. Sudha S. Patel

Designation :

Director

 

 

Name :

Mr. Mohan P. Parikh

Designation :

Managing Director

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

[As on 31.03.2007]

 

Names of Shareholders

No. of Shares

Percentage of Holding

Promoters Holding

 

 

Promoters

 

 

Indian Promoters

4371258

62.039

Banks, Financial Inst, Insurance Company (Central / State Govt. Inst /

Non-Government Inst)

253910

 

3.604

 

Fii(S)

1580

0.022

Others

1815487

25.776

Private Corporate Bodies

137164

1.947

NRIS/Ocbs

460588

6.537

Any Other (Foreign-Comp Aines) Clearing Members

6009

0.075

Total

7045996

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of Engineering Equipments

 

 

Products :

Item Code No. (ITC Code)

8445

Product Description

Engineering Equipment

 

Item Code No. (ITC Code)

8462

Product Description

Exhibition Centre

 

Item Code No. (ITC Code)

8413

Product Description

Reality

 

Item Code No. (ITC Code)

7325

Product Description

NA

 

 

GENERAL INFORMATION

 

Bankers :
  • Axis Bank
  • HSBC Bank

 

 

Facilities :

                                                                                                 [Rs. in Millions]

Particulars

31.03.2007

31.03.2006

 

SECURED LOANS

 

 

From Banks

 

 

ICICI Bank Limited

---

0.017

HDFC Bank Limited

--

0.394

Total

 

0.411

 

Notes:

1. ICICI Bank Limited against Hypothecation of Xerox Machine repayable in 18 equated monthly installments (Amount repayable within one year Rs. Nil previous year Rs. 0.017 Millions)

 

2. HDFC Bank Limited against Hypothecation of Vehicle repayable in equated monthly installments not exceeding 36 months (Amount repayable within one year Rs. Nil previous year 140,000/-)

 

                                                                                             [Rs. In Millions]

UNSECURED LOANS

31.03.2007

31.03.2006

Term Loan in Foreign currency from Engg Imports

and Export Pte. Ltd. Repayable in 20 installments

(Repayable within a year Rs. Nil previous year

22,057,500 Rs. 22.057 Millions)

-----

22.057

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Shah and Company

Chartered Accountants

Address :

Mumbai

 

 

Associates/Subsidiaries :
  • NSE Housing And Investments Private Limited
  • Chandler and Price (India) Private Limited 
  • Sudha Garments
  • Jethabai V. Patel and Company

 

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

7250000

Equity Shares

Rs. 10/- each

Rs. 72.500 Millions

250000

11% Cumulative Redeemable Preference Shares

Rs. 10/- each

Rs. 2.500 Millions

 

Total

 

Rs. 75.000 Millions

 

 

Issued Capital:

No. of Shares

Type

Value

Amount

 

7046186

Equity Shares

Rs. 10/- each

Rs. 70.461 Millions

 

250000

11% Cumulative Redeemable Preference Shares

Rs. 10/- each

Rs. 2.500 Millions

 

Total

 

Rs. 72.961 Millions

 

 

 

Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

7045996

Equity Shares

Rs. 10/- each

Rs. 70.459 Millions

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2007

31.03.2006

31.03.2005

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

70.459

35.210

35.200

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

367.446

231.219

137.900

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

437.905

266.429

173.100

LOAN FUNDS

 

 

 

1] Secured Loans

0.000

0.412

4.100

2] Unsecured Loans

0.000

22.057

22.400

TOTAL BORROWING

0.000

22.469

26.500

DEFERRED TAX LIABILITIES

8.551

5.634

0.000

 

 

 

 

TOTAL

446.456

294.532

199.600

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

295.679

274.148

169.100

Capital work-in-progress

0.000

0.000

0.000

 

 

 

 

INVESTMENT

356.480

132.849

35.100

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
36.615

43.585

45.000

 

Interest accrued on investments

0.358

0.246

0.000

 

Sundry Debtors
84.651

24.712

62.800

 

Cash & Bank Balances
61.458

60.274

21.500

 

Other Current Assets
0.477

1.123

0.000

 

Loans & Advances
100.278

54.736

54.800

Total Current Assets
283.837

184.676

184.100

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
524.418

352.731

260.500

 

Provisions
0.000

0.000

9.700

Total Current Liabilities
524.418

352.731

270.200

Net Current Assets
[240.581]

[168.055]

[86.100]

 

 

 

 

MISCELLANEOUS EXPENSES

34.878

55.590

81.500

 

 

 

 

TOTAL

446.456

294.532

199.600

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover [including other Income]

716.134

454.049

298.000

Total Income

716.134

454.049

298.000

 

 

 

 

Profit/(Loss) Before Tax

276.653

135.955

67.700

Provision for Taxation

73.569

10.782

5.400

Profit/(Loss) After Tax

203.084

125.173

62.300

 

 

 

 

Earnings in Foreign Currency :

13.108

NA

NA

 

 

 

 

Total Imports

NA

5.897

NA

 

 

 

 

Expenditures :

 

 

 

 

Manufacturing Expenses

181.617

155.520

13.200

 

Administrative Expenses

240.636

144.759

26.500

 

Interest

1.204

4.091

8.000

 

Depreciation & Amortization

16.024

13.724

9.500

 

Stock Adjustment

0.000

0.000

[2.000]

 

Other Expenditure

0.000

0.000

175.100

Total Expenditure

439.481

318.094

230.300

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

30.09.2007

31.12.2007

Type

1st Quarter

2nd Quarter

3rd Quarter

Sales Turnover

130.000

209.800

276.800

Other Income

6.600

32.400

18.700

Total Income

136.600

242.200

295.500

Total Expenditure

87.800

125.800

124..400

Operating Profit

48.800

116.400

171.100

Interest

0.300

0.600

0.700

Gross Profit

48.500

115.800

170.400

Depreciation

4.000

4.000

4.300

Tax

0.100

0.100

0.100

Reported PAT

44.400

111.700

166.000

 

KEY RATIOS

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Debt-Equity Ratio

0.04

0.17

0.54

Long Term Debt-Equity Ratio

0.04

0.17

0.24

Current Ratio

0.53

0.59

0.57

Fixed Assets

1.47

1.07

1.03

Inventory

17.22

9.47

7.61

Debtors

12.63

9.59

5.74

Interest Cover Ratio

68.41

17.64

9.46

Operating Profit Margin(%)

36.01

31.02

29.33

Profit Before Interest And Tax Margin(%)

33.69

27.75

26.06

Cash Profit Margin(%)

25.96

26.87

24.72

Adjusted Net Profit Margin(%)

23.64

23.61

21.45

Return On Capital Employed(%)

94.65

113.62

311.52

Return On Net Worth(%)

58.35

69.92

96.14

 

LOCAL AGENCY FURTHER INFORMATION

 

Fixed Assets:

 

OVERVIEW: 


Income increased by 57.72% from Rs. 454.049 Millions to Rs. 716.133 Millions, while net profit increased by 83.99% from Rs. 98.977 Millions to Rs. 182.113 Millions.

Earnings per share amounted to Rs. 26 (on doubled capital after issue of 1:1 bonus shares) compared to Rs. 28 in 05-06. Borrowings went down from Rs.22.469 Millions to nil while interest costs came down to Rs.1.204 Millions from Rs. 4.091 Millions. At the same time the Company's reserves increased from Rs.231.219 Millions to Rs.367.446 Millions. 

Realty Division: 

During the year the Company finalized plans for construction of IT Tower no.1, admeasuring 500,000 sq. ft. Now process for securing various permissions is on, the construction is expected to start around August 2007. Demand for space continues to be good. IDBI has sanctioned financing for the IT Tower no. 1.

Industrial Capital Goods Group: 

Income increased by 40%. Company's both units at Karamsad & Vishnoli in Gujarat worked to optimum capacity, increasing supplies to both domestic & export markets. Recently the Company has started construction of a third unit in Gujarat at Vishnoli, which is expected to be operational by July 2007. This unit will need an investment of about Rs. 60.000 Millions, which will also be financed from internal resources. This division is expected to show good growth in 2007-08. 

Opportunities and Threats: 

Opportunities:

·         There are opportunities to increase the production capacity to meet greater inflow of new orders for shot blasting, peening & other surface preparation equipment and forging equipment. 

·         Due to growth of IT sector, there is increased demand for IT space. 

·         India being a large market, number & size of exhibitions are increasing. 

·         The large scale operations can improve the margins of the Company. 

Threats: 

·         Competition is on the increase, both from domestic & foreign players in the Industrial Capital goods segment.

·         Due to stiff competition, prices are under pressure. Costs need to be controlled. 

 

·         Competition is likely to increase in the Convention & Exhibition center segment. 

·         Significant new construction is taking place for IT space. 

Risks and Concerns: 

a) Rising prices of raw materials, fuels, freight and other inputs, resulting in lower margins. 

b) Lower realization on the export front due to strengthening of the rupee against US Dollar. 
c) Competition from new domestic & foreign players who are likely to enter markets in all three segments. 
 
Outlook: 
 
The Company is aiming for higher levels of performance in all its segments. Large investments for modernization & upgrading of Bombay Exhibition Centre, and setting up of a third unit in the ICGG are expected to significantly increase the Company's revenues & profits in 2007-08. Effect of IT Tower no. 1 should be felt in 2008-09. 

 


 

 

 

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. 40.02

UK Pound

1

Rs. 78.77

Euro

1

Rs. 62.97

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

8

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

8

--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

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

65

 

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

 

 

 

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