MIRA
INFORM REPORT
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Report Date : |
15.04.2008 |
IDENTIFICATION
DETAILS
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Name : |
SURAJ STAINLESS LIMITED |
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Registered Office : |
Suraj House, Opposite Usmanpura Garden, Usmanpura , Ahmedabad – 380
014, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
20.01.1994 |
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Com. Reg. No.: |
21088 |
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CIN No.: [Company
Identification No.] |
L27100GJ1994PLC021088 |
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Legal Form : |
Public Limited Liability Company. The company shares are listed on the
stock exchange. |
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Line of Business : |
Manufacturer and Exporter of Stainless Steel Seamless and Welded
pipes, Tubes and “U” Tubes. |
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 1425116 |
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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 fine track.
Available information indicates satisfactory financial responsibility of the
company .Trade relations are fair. Business is active. Payments are reported
as 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 / Corporate Office: |
Suraj House, Vidhyanagar Society, Opposite Usmanpura Garden, Usmanpura
, Ahmedabad – 380 014, Gujarat, India
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Tel. No.: |
91-79-27540720 / 21 / 279510720 |
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Fax No.: |
91-79-27540722 / 27510722 |
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E-Mail : |
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Website : |
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Factory : |
Survey No. 779/A, Tholkadi – Sanand Highway, Taluka – Kadi, District
Mehsana , India |
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Tel. No.: |
91-2764-274216 / 274217 |
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Fax No.: |
91-2764-274419 |
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E-Mail : |
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Branches : |
7, Laxmi Nivas, 2nd Parsiwada, Mumbai – 400004, Maharashtra, India |
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Tel. No.: |
91-22-23891758 / 23891649 |
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Fax No.: |
91-22-23854979 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Ashok T Shah |
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Designation : |
Chairman and CEO |
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Name : |
Mr. Gunvant T Shah |
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Designation : |
Vice Chairman and Whole time Director |
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Name : |
Mr. Kunal T Shah |
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Designation : |
Managing Director |
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Name : |
Mr. Bipin K Prajapati |
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Designation : |
Director |
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Name : |
Mr. Dipak H Shah |
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Designation : |
Non Executive Director |
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Name : |
Mr. Ketan R shah |
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Designation : |
Non Executive Director |
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Name : |
Mr. Mahesh V Parikh |
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Designation : |
Non Executive Director |
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Name : |
Mr. Nimesh M Shah |
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Designation : |
Non Executive Director |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders (AS ON 31.03.2007) |
No. of Shares |
Percentage of
Holding |
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Promoters |
4140375 |
73.02% |
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OCB |
515000 |
9.08% |
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Companies |
201622 |
3.56% |
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Individual / Others |
812583 |
14.34% |
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NRI |
120 |
0.002% |
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Total
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5669700 |
100.00% |
BUSINESS DETAILS
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Line of Business : |
Manufacturer and Exporter of Stainless Steel Seamless and Welded
pipes, Tubes and “U” Tubes. |
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Products : |
· Heat Exchanger · Heating Elements · Surface Condensers · Evaporators · Digesters · Instrumentation and Fluid Pipings. |
PRODUCTION STATUS (as on 31.03.2007);-
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Particulars |
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Unit |
Installed
Capacity |
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Welded Tubes and pipe |
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MT |
4400 |
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Seamless Tubes |
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MT |
4400 |
GENERAL
INFORMATION
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Bankers : |
· Punjab National Bank · State Bank of India |
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Facilities: |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Pankaj K Shah Associates Chartered Accountants |
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Address : |
701/A, “Nirman”, B /H, Navrangpura Bus Stop, Ahmedabad -380 014,
Gujarat, India |
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Associates/Subsidiaries : |
· Suraj Impex Private Limited · Suraj Limited · Suraj Enterprises Limited · Kamla Mension Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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6000000 |
Equity Shares |
Rs. 10/- each |
Rs. 60.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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5669700 |
Equity Shares |
Rs. 10/- each |
Rs.56.697
millions |
(Including, 800 Equity Shares allotted as fully Paid Up pursuant to
scheme of amalgamation)
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
56.697 |
51.547 |
51.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
299.582 |
94.245 |
72.700 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
356.279 |
145.792 |
124.200 |
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LOAN FUNDS |
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1] Secured Loans |
634.140 |
300.554 |
159.600 |
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2] Unsecured Loans |
49.684 |
85.956 |
0.000 |
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TOTAL BORROWING |
683.824 |
386.510 |
159.600 |
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DEFERRED TAX LIABILITIES |
29.171 |
13.595 |
0.000 |
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TOTAL |
1069.274 |
545.897 |
283.800 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
449.520 |
318.648 |
87.700 |
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Capital work-in-progress |
0.000 |
0.000 |
9.000 |
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INVESTMENT |
0.494 |
0.000 |
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 |
567.447
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266.590 |
184.900 |
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Sundry Debtors |
189.535
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136.687 |
104.400 |
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Cash & Bank Balances |
45.794
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13.336 |
18.800 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
98.101
|
39.112 |
13.200 |
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Total
Current Assets |
900.877
|
455.725 |
321.300 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
246.819
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218.134 |
115.900 |
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Provisions |
34.949
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10.342 |
18.300 |
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Total
Current Liabilities |
281.768
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228.476 |
134.200 |
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Net Current Assets |
619.109
|
227.249 |
187.100 |
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MISCELLANEOUS EXPENSES |
0.151 |
0.000 |
0.000 |
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TOTAL |
1069.274 |
545.897 |
283.800 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
2332.848 |
1169.312 |
1002.300 |
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Other Income |
0.000 |
0.000 |
1.100 |
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Total Income |
2332.848 |
1169.312 |
1003.400 |
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Profit/(Loss) Before Tax |
123.958 |
46.099 |
31.300 |
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Provision for Taxation |
40.577 |
16.511 |
11.500 |
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Profit/(Loss) After Tax |
83.381 |
29.588 |
19.800 |
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Export Value |
159.859 |
868.492 |
NA |
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Import Value |
1544.769 |
722.269 |
NA |
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Expenditures : |
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Cost of Goods Sold |
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Manufacturing Expenses |
199.102 |
115.331 |
33.200 |
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Administrative Expenses |
0.000 |
0.000 |
52.500 |
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Raw Material Consumed |
1770.114 |
915.454 |
825.700 |
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Excise Duty |
129.115 |
45.906 |
42.700 |
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Personnel Expenses |
23.747 |
13.096 |
0.000 |
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Salaries, Wages, Bonus, etc. |
0.000 |
0.000 |
7.500 |
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Interest |
52.945 |
19.556 |
19.900 |
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Power & Fuel |
0.000 |
0.000 |
13.200 |
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Depreciation & Amortization |
0.000 |
0.000 |
12.800 |
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Other Expenditure |
0.000 |
0.000 |
2.600 |
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Total Expenditure |
2175.023 |
1109.343 |
1010.100 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
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Type
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1st
Quarter |
2nd
Quarter |
3rd
Quarter |
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Sales Turnover |
669.300 |
764.000 |
835.100 |
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Other Income |
1.500 |
3.700 |
1.700 |
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Total Income |
670.800 |
767.700 |
836.800 |
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Total Expenditure |
594.000 |
692.600 |
748.900 |
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Operating Profit |
76.800 |
75.100 |
87.900 |
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Interest |
19.600 |
22.100 |
23.800 |
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Gross Profit |
57.200 |
53.000 |
64.100 |
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Depreciation |
12.000 |
12.000 |
12.000 |
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Tax |
8.500 |
22.000 |
25.000 |
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Reported PAT |
36.700 |
19.000 |
27.100 |
KEY RATIOS
|
Year |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Debt-Equity Ratio |
2.13 |
2.02 |
0.97 |
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Long Term Debt-Equity Ratio |
1.08 |
1.06 |
0.18 |
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Current Ratio |
1.25 |
1.22 |
1.24 |
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TURNOVER RATIOS |
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Fixed Assets |
4.80 |
4.18 |
6.73 |
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Inventory |
5.57 |
5.16 |
6.72 |
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Debtors |
14.23 |
9.67 |
12.75 |
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Interest Cover Ratio |
2.84 |
2.84 |
2.57 |
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Operating Profit Margin(%) |
9.69 |
7.29 |
6.39 |
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Profit Before Interest And Tax Margin(%) |
8.23 |
6.10 |
5.11 |
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Cash Profit Margin(%) |
4.97 |
3.65 |
3.25 |
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Adjusted Net Profit Margin(%) |
3.51 |
2.45 |
1.98 |
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Return On Capital Employed(%) |
24.31 |
17.42 |
22.14 |
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Return On Net Worth(%) |
32.43 |
21.19 |
16.85 |
LOCAL AGENCY
FURTHER INFORMATION
Manufacturer, Exporter of Stainless Steel Seamless and Welded Pipes,
Tubes and 'Uf Tubes Their product is manufactured and tested to international standards,
under the supervision of qualified and experienced technocrats and quality is
certified, Approved ISO'9001-2000, AD 2000 MERKBLATT WO, and PRESSURE EQUIPMENT
DIRECTIVE 97/23/EC their product is certified as per 3.1.A, 3.1.B, 3.1.C, and
also available with the inspection of Sixteen internationally renowned
inspection agency.
Performance
Highlights :
The year witnessed a growth of about 99% in the sales
turnover, which is at Rs. 2321.400 millions (previous year Rs. 1165.500
millions) was the highest ever achieved by the company. During the year, the
company achieved a record export turnover of Rs. 1677.200 millions to various
destinations across the world inspite of competitive global market, registering
a growth of about 94% over the previous year as against export turnover of Rs.
864.600 millions.
This was possible due to better product mix. There has been
significant improvement in the product mix. The company will continue to
exploit the export opportunities for regular and value added products in the
European markets.
Subsidiary Company :
The company is having subsidiary company namely M/s. Suraj
Enterprise Limited. A statement pursuant to section 212 of the Companies Act,
1956 relating to company's Interest in subsidiary company is forming part of
the Annual Accounts.
Finance :
During the year company has issued 515000 shares at a
premium of Rs. 260 per share to Bsurinvest Bvba, Belgium aggregating to Rs.
139.000 millions.
The company has also availed increased working capital limit for Rs. 1050.000
millions from bank.
During current year the company has also availed working capital facility from
State Bank of India under consortium finance.
Performance
and Future outlook
Export business of the company had an excellent year with
sales growth of 94%.
During the year under review, the company has shown all time high performance
and, it has surpassed all the targets / estimates. Its performance has been
exemplary aided by enhanced efficiencies and stringent cost control efforts.
The steel sector offers a long term growth potential and the company looks
forward to a brighter future.
Provisions and Contingent Liabilities :
The Company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources and a
reliable estimate can be made of the amount of that obligation except Non provision/Non Payment of interest tax
liability of Rs.0.233 millions for assessment year 1996-1997 and Rs.0.423 millions for assessment year 1997-1998.
Contingent Liabilities which are considered significant and material by
the company are disclosed in the Notes to Accounts
Contingent liabilities not provided for:
Demand of Rs.2.243 millions raised by Sales Tax authorities, for the
accounting year 2003-04 which is disputed by the Company.
Demand of Rs.0.140 millions raised by Sales Tax authorities, for the
accounting year 2004-05 which is disputed by the Company.
Demand of Rs. 8.376 millions raised by Income Tax authorities, for
Assessment year 2004-05 which is disputed by the Company.
Estimated amount of contracts remaining to be executed on capital
account and not provided for in the Accounts (net of advances) Rs. Nil .
(Previous Year Rs. 14.533 millions)
In terms of accounting policy (K) for the accounting of export
incentives, estimated benefit of Rs 10.078 millions have been taken in to
account under DES Schemes. Steps are being taken to import raw materials and
utilise the same.
The company has received an export incentive in the nature of claim of
DFCE (Duty Free Credit Entitlement) for the status holders for total value of
Rs. 160.569 millions for F.Y. 2003-04 and export incentive in the nature of
target plus scheme of Rs. 215.018 millions for F.Y. 2004-05 during the year.
Further allthough the claim is with regard to incremental export made during
the earlier years, it has been accounted for in the F.Y. 2006- 07 since the
same is received during this fiscal year.
Securities :
a) Term Loan of Rs.240.00 millions availed from Punjab National Bank is
secured by way of first charge over company's block of assets including all the
immovable properties, both present and future situated at Survey No.
771,772,773,774,777 and 779/A, at
Village Thol, Tal. Kadi, Dist. Mehsana. It is further secured by equitable
mortgage on the office premises of the company at Office No. 1,2,3 and 4 on 6the floor Kalpana Complex, Nr.
Memnagar Fire Station, Navrangpura, Ahmedabad. And also land situated at Survey
No. 767/2 at Village Vanku Moti Sondholli Dist. Kutch.
b) The working capital Limits from Punjab National Bank are secured
against Hypothecation of Raw Materials, Finished and Semi-finished Goods,
Stores and spares, Book Debts of the company and personal guarantees of
promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah
and Gunvantbhai T. Shah and corporate
guarantee of M/s. Suraj Impex Private . Limited. It is further secured by First
charge on block of Assets of the Company both movable and immovable.
c) Term Loan of Rs. 20.000 millions from U.T.I. Bank Limited. is secured
by way of first charge over company's office building and furniture fixture and equipment therein, both present and future
situated at Suraj House Opp. Usmanpura Garden, Usmanpura, Ahmedabad - 13
d) Other Loan is secured by hypothecation of cars and other vehicles..
FIXED ASSTES:
· Land and Site Development
· Factory Building
· Office premises
· Plant and Machinery
· Furnitures and Fixtures
· Computer
· Vehicle
· Wind Mill
WEBSITE DETAILS;
Suraj Group established in 1960, the company has spearheaded the mini-revolution with the aim to be one of the market leaders in the country.
Stainless Steel Seamless and Welded Pipes, Tubes and ‘U’ Tubes are manufactured and tested to international Standards, under strict supervision of highly qualified and experienced technocrats, to satisfy and meet the most critical demands of reputed industrial users for various applications, sizes, grades and specifications as per ASTM and also conforming other international Grade\Standards Equivalent to ASME, DIN, NFA, and JIS etc. Subject has specialization in tubing for Heat exchangers, Heater, Condensers, Heating Elements and Instrumentation with facility of annealed, pickled, cold rolled and weld bead removed tubes upto 22-meters long tubes.
The company is a Govt. of India recognized Export House and is selling its premium products in India and abroad to more than 53 countries in all over the world.
They have
specialization in tubing for equipment like
-
Heat Exchanger
- Heating Elements
- Surface Condensers
- Evaporators
- Digesters
- Instrumentation and Fluid Pipings.
All products of the company have to meet a very high standard, set by stringent quality specifications and norms. All process parameters and conditions are developed and constantly monitored throughout the entire manufacturing process.
A quality system to ISO 9001 : 2000 , AD 2000 – Merkblatt / WO , and PED – 97 /23/EC as outlined in this manual has been developed and implemented to ensure that all the customer requirements is satisfied. The quality system is applicable to all departments and all activities undertaken by the company for manufacturing of Stainless Steel Seamless/Welded Pipes, Tubes and ‘U’ Tubes.
The quality policy of the company is very simple to perform work of the highest attainable quality in accordance with applicable codes / standards / specification and customers specification. Their products are subjected to various quality testing such as Eddy Current test, Hydrostatic test, UTS, Hardness test, Air under water test, Dimensional test, visual test etc.
Quality Control measures include chemical analysis, measurement of mechanical and metallurgical properties and close dimensional tolerances as per applicable codes / standards / specification.
They are a professionally run Public Limited. company. The company was founded by Mr. Tarachand Balaji Shah in 1960. It has been successfully and efficiently lead by Mr. Ashok Shah (Chairman and C.E.O.), with the strong support of his team mates Mr. Gunwant Shah (Vice Chairman and Wholetime Director) and Mr. Kunal Shah (Managing Director). They are been assisted by a strong professional team with an extensive experience in this industry.
Vision :
Subject will continuously strive to attain and sustain BEST IN CLASS status as a manufacturer of Steel Tubes. This achievement will be accomplished by committed and will trained people employing teamwork, communication, perseverance and customer service to the maximum in a safe and cooperative environment.
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.39.96 |
|
UK Pound |
1 |
Rs.78.71 |
|
Euro |
1 |
Rs.63.22 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
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|
--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 |
YES |
|
--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 |
|