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MIRA
INFORM REPORT
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Report Date : |
03.12.2008 |
IDENTIFICATION
DETAILS
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Name : |
DALMIA CEMENT (BHARAT) LIMITED |
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Registered Office : |
P. O. Dalmiapuram, District Tiruchirapalli District - 621651, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
01.11.1951 |
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Com. Reg. No.: |
18-640 |
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CIN No.: [Company
Identification No.] |
L26942TN1951PLC000640 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHED03385E |
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Legal Form : |
Public limited liability company. The company's shares are listed on the
Stock Exchanges |
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Line of Business : |
Engaged in manufacturing of cement, magnesites, sugar, electronics, wind energy and refractories with an installed capacity of 1034000 tons of cement per annum. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 50000000 |
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Status : |
Excellent |
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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 high financial responsibility of the company. Their trade relations are fair. Financial position is good. Payments are correct and as per commitments. Subject can be considered good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
P. O. Dalmiapuram, District Tiruchirapalli District - 621651, Tamilnadu, India |
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Tel. No.: |
91-4329- 235123 / 235131 |
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Fax No.: |
91-4329-235111 |
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E-Mail : |
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Website : |
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Head Office : |
11th & 12th Floors, 'Hansalaya’, 15, Barakhamba Road, New Delhi – 110 001, India |
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Corporate
Office : |
P. O. Dalmiapuram, Tiruchirapalli Dist - 621651, Tamilnadu, India |
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Tel. No.: |
91-4329-235123 |
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Fax No.: |
91-4329-235111 |
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E-Mail : |
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Plant : |
Cement Plant Dalmiapuram (Tamil Nadu) Dalmiapuram -621651, Dist. Tiruchirapalli, Tamil Nadu Tel No: 91-4329-235123 91-4329-235111 Dalmia Magnesite
Corporation Salem (Tamil Nadu) Vellakkalpatti, P.O. Karuppur, Salem-636012. Dalmia Wind Farm Muppandal (Tamil Nadu) Aralvaimozhy -629301 District Kanyakumari (Tamil Nadu) Dalmia Chini Mills Ramgarh (Uttar Pradesh) Village Ramgarh - 261403, Tehsil Misrikh, District Sitapur (Uttar Pradesh) Tel No:.91-5865-236116 Electronics
Divisions Bangalore (Karnataka), Plot No. 53, 54A, Electronics City, Hosur Road, Bangalore - 560100 |
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Branches : |
Dalmiapuram - 621651, Distt.
Trichy (Tamilnadu) Ramgarh Chinni Mills Farun Mansion IV floor 26,
Ethiraj Salai Egmore, Chennai - 600008 (Tamilnadu) 11th floor, Hansalaya Building,
Barakhamba Road, New Delhi 110001 |
DIRECTORS
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Name : |
Mr. P. K. Khaitan |
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Designation : |
Chairman and Non Executive Director |
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Name : |
Mr. N. Gopalaswamy |
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Designation : |
Whole Time Director |
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Name : |
Mr. Nilratan Khaitan |
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Designation : |
Director |
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Name : |
Mr. M Sankaranarayanan |
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Designation : |
Nominee of Unit Trust of India |
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Name : |
Mr. M. Raghupathy |
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Designation : |
Director |
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Name : |
Mr. Jagdish Sharan Baijal |
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Designation : |
Director |
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Name : |
Mr. M. H. Dalmia |
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Designation : |
Director |
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Name : |
Mr. Jai Hari Dalmia |
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Designation : |
Vice Chairman |
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Name : |
Mr. Yadu Hari Dalmia |
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Designation : |
Vice Chairman |
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Name : |
Mr. Gautam Dalima |
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Designation : |
Joint Managing Director |
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Name : |
Mr. Puneet Dalmia |
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Designation : |
Managing Director |
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Name : |
Mr. N Khaitan |
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Designation : |
Director |
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Name : |
Mr. J S Baijal |
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Designation : |
Director |
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Name : |
Mr. Donald M Peck |
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Designation : |
Director |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
AS ON 31.03.2008
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
44346190 |
54.85 |
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Central State Governments |
128155 |
0.16 |
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Financial Institutions |
1809752 |
2.24 |
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Mutual Funds |
2500 |
0.01 |
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Foreign Institutional Investors |
1772912 |
2.19 |
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Insurance Companies |
1245421 |
1.54 |
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Bodies Corporate |
10470080 |
12.95 |
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Overseas Body Corporate |
6220806 |
7.69 |
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Foreign Corporate Bodies |
4470588 |
5.53 |
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NRI / Foreign Nationals |
145002 |
0.18 |
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Individuals / Others |
10232237 |
12.66 |
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Total
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80843643 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Engaged in manufacturing of cement, magnesites, sugar,
electronics, wind energy and refractories with an installed capacity of 1034000
tons of cement per annum. |
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Products : |
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PRODUCTION STATUS (as on 31.03.2008):-
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Particulars |
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Unit |
Installed
Capacity * |
Actual
Production |
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Cement |
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(‘000 Tonnes) |
3500.00 |
3293.74 |
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Refractory Products |
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(‘000 Tonnes) |
79.50 |
26.75 |
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Multilayer Ceramic Chip Capacitors |
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(Million Nos.) |
120.000 |
16.20 |
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Chip Resistors |
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(Million Nos.) |
100.000 |
0.94 |
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Sugar |
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(‘000 Tonnes) |
22.50** |
245.94 |
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Refractories etc # |
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(‘000 Tonnes) |
NA |
37.80 |
Note:
Licenced capacity not furnished as the above industries are delicenced.
· * As certified by the Management and accepted by the Auditors.
· ** Sugarcane crushed in Tonnes per day.
· # Production on job-work basis.
GENERAL
INFORMATION
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No. of Employees : |
Over 3300 |
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Bankers : |
Ø Punjab National Bank Ø Canara Bank Ø Corporation Bank Ø United Bank of India Ø State Bank of Travancore Ø BNP Paribas Ø ICICI Bank Limited Ø Axis Bank Limited Ø State Bank of India Ø Indian Bank Ø BNP Paribas Ø Union Bank of India Ø Yes Bank Limited |
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Facilities: |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
S. S. Kothari Mehta & Company Chartered Accountants |
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Memberships : |
Confederation of Indian Industry |
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Associates/Subsidiaries : |
Subsidiaries · Kanika Investment Limited, · Ishita Properties Limited, · D.I. Properties Limited, · Geetee Estates Limited, · Avnija Properties Limited, · Shri Rangam Properties Limited, · Hemshila Properties Limited, · Himshikhar Investment Limited · Dalmia Minerals and Properties Limited, · Shri Radha Krishna Broker and Holdings Limited, · Seeta Estates and Brokers Limited, · Shri Rangam Brokers and Holdings Limited, · Arjuna Brokers and Minerals Limited, · Sri Kesava Mines and Minerals Limited, · Sri Madhava Minerals and Properties Limited, · Sri Shanmugha Mines and Minerals Limited, · Sri Swaminatha Mines and Minerals Limited, · Sri Subramanya Mines and Minerals Limited, · Sri Trivikrama Mines and Properties Limited (w.e.f. 26.09.06), · Sri Dhandauthpani Mines and Minerals Limited (w.e.f.4.10.06), · Sri Madhusudana Mines and Properties Limited (w.e.f. 04.10.06), · Eswar Cements Private Limited (w.e.f. 1.11.06), · Dalmia Cement (Mehgalaya) Limited (w.e.f. 27.03.07) and Anupama Investment Limited (up to 20.07.06). · Anupama Investment Limited (w.e.f. 21.07.06) Associates · Rama Investment Company Private Limited, · Puneet Trading and Investment Company Private Limited, · Kavita Trading and Investment Company Private Limited, · Sita Investment Company Limited, Mayuka Investments Limited, · Kanodia Commercial Limited, · Ankita Pratishtan Limited, · Kajal (India) Limited, · Himgiri Commercial Limited, · Valley Agro Industries Limited, · Alirox Abrasives Limited, · Shri Nataraj Ceramic and Chemical Industries Limited, · Shri Chamundeswari Minerals Limited, · Shree Nirman Limited, · Dalmia Electrodyne Technologies Limited, · Keshav Power Private Limited, · Avanee and Ashni Securities Private Limited, · OCL India Limited and ZipAhead.Com Limited. |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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114631160 |
Ordinary Shares |
Rs. 2/- each |
Rs.229.260 Millions |
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85368840 |
Unclassified Shares |
Rs. 2/- each |
Rs.170.740 Millions |
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Total |
Rs 400.000
millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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80843643 |
Ordinary Shares |
Rs. 2/- each |
Rs.161.690
Millions |
Notes:
1. Of the above
Shares:
(i) 6651410 Shares
were allotted as fully paid-up pursuant to arrangements/scheme of conversion,
without payments being received in cash; and
(ii) 27631245
Shares were allotted as fully paid-up by way of Bonus Shares by capitalisation
of Reserves.
2. During the year
2001-02, the Company had issued 7651621 Non-Convertible debentures of
Rs.10/-each along with detachable tradeable warrants. The holders of these
warrants have the option to subscribe to equity shares of the Company (5
ordinary shares of Rs.2/- each) at Rs. 23.764 per Share upon the call option
being exercised by the Board of Directors or on 11-9-2008, whichever is earlier
in terms of the Letter of Offer dated 26th June, 2001. During the year the
board of director have exercised the call option in respect of the warrants and
called upon all the existing warrant holder to submit their application for
conversion of the warrant held by them in to ordinary shares of the company.
Warrant holders holding 7622990 warrants exercised the optioned and
consequently the company allotted 38114950 ordinary shares of rs.2/- each fully
paid up. The board has decided to give another opportunity to the warrant
holders holding the balance 28631 warrants to convert their warrant into shares.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
161.690 |
85.460 |
76.520 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
11309.740 |
7449.370 |
4206.140 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
11471.430 |
7534.830 |
4282.660 |
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LOAN FUNDS |
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1] Secured Loans |
10500.700 |
9306.260 |
6373.110 |
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2] Unsecured Loans |
5332.660 |
839.600 |
458.670 |
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TOTAL BORROWING |
15833.360 |
10145.860 |
6831.780 |
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DEFERRED TAX LIABILITIES |
1630.180 |
1063.080 |
729.980 |
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TOTAL |
28934.970 |
18743.770 |
11844.420 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
13247.240 |
12271.510 |
6305.530 |
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Capital work-in-progress |
5012.990 |
1164.800 |
1580.320 |
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INVESTMENT |
6138.270 |
3785.610 |
1752.830 |
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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 |
4915.990
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1975.380
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1916.820 |
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Sundry Debtors |
1050.590
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820.810
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597.540 |
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Cash & Bank Balances |
870.370
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1037.650
|
589.000 |
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Other Current Assets |
0.000
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0.000
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0.000 |
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Loans & Advances |
4331.980
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2691.330
|
1459.420 |
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Total
Current Assets |
11168.930
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6525.170 |
4562.780 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
5483.090
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4453.610
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2037.930 |
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Provisions |
1149.370
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549.710
|
325.850 |
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Total
Current Liabilities |
6632.460
|
5003.320
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2363.780 |
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Net Current Assets |
4536.470
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1521.850
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2199.000 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
6.740 |
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TOTAL |
28934.970 |
18743.770 |
11844.420 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
14806.680 |
9864.730 |
5697.460 |
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Other Income |
1645.540 |
1701.960 |
808.210 |
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Total Income |
16452.220 |
11566.690 |
6505.670 |
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Profit/(Loss) Before Tax |
4340.970 |
2963.850 |
1089.380 |
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Provision for Taxation |
869.450 |
674.510 |
240.930 |
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Profit/(Loss) After Tax |
3471.520 |
2289.340 |
848.450 |
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Export Value |
102.700 |
74.620 |
37.910 |
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Import Value |
2034.650 |
1590.290 |
434.050 |
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Expenditures : |
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Raw Material Consumed |
4663.810 |
2403.500 |
1704.510 |
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Excise Duty |
0.000 |
0.000 |
0.000 |
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Purchases made for re-sale |
37.620 |
12.250 |
25.040 |
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Increase/(Decrease) in Finished Goods |
(1895.120) |
[178.780] |
91.300 |
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Salaries, Wages, Bonus, etc. |
848.660 |
486.260 |
320.690 |
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Power & Fuel Cost |
0.000 |
0.000 |
0.000 |
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Employee Cost |
0.000 |
0.000 |
0.000 |
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Selling & Administration Expenses |
0.000 |
0.000 |
0.000 |
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Miscellaneous Expenses |
0.000 |
0.000 |
0.000 |
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Interest & Financials Charges |
0.000 |
0.000 |
0.000 |
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Depreciation & Amortization |
864.030 |
550.750 |
279.290 |
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Other Expenditure |
7592.250 |
5328.860 |
2995.460 |
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Total Expenditure |
12111.250 |
8602.840 |
5416.290 |
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QUARTERLY RESULTS
|
Year |
|
30.06.2008 |
30.09.2008 |
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Type |
|
1st Quarter |
2nd Quarter |
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Sales Turnover |
|
4145.900 |
4492.100 |
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Other Income |
|
84.500 |
32.200 |
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Total Income |
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4230.400 |
4524.300 |
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Total Expenditure |
|
2925.200 |
3382.200 |
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Operating Profit |
|
1305.200 |
1142.100 |
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Interest |
|
344.100 |
303.600 |
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Gross Profit |
|
961.100 |
838.500 |
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Depreciation |
|
205.200 |
213.300 |
|
Tax |
|
50.400 |
135.100 |
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Reported PAT |
|
504.600 |
401.900 |
200806 Quarter 1 --------------- Notes Status of Investor
Complaints for the quarter ended June 30, 2008 Complaints Pending at the
beginning of the quarter Nil Complaints Received during the quarter 35 Complaints
disposed off during the quarter 35 Complaints unresolved at the end of the
quarter Nil 1. Provision for Taxation has been made u/s 115JB of The Income Tax
Act, 1961 (MAT) based on the anticipated taxable income for the year as a
whole. 2. Figures for corresponding previous year/quarter have been regrouped
and rearranged wherever considered necessary. 3. Share of Profit in Associate
Company OCL India Ltd for the quarter ended June 30, 2008 is Rs82.80 million
which is not included in the above results. 4. The above results have been
taken on record by the Board of Directors in their meeting held on July 22,
2008 and have been reviewed by the Statutory Auditors of the Company.
200809 Quarter 2 --------------- Notes EPS is Basic Status
of Investor Complaints for the quarter ended September 30, 2008 Complaints
Pending at the beginning of the quarter Nil Complaints Received during the
quarter 46 Complaints disposed off during the quarter 46 Complaints unresolved
at the end of the quarter Nil 1. The above results have been taken on record by
the Board of Directors in their meeting held on October 31, 2008 and have been
reviewed by the Statutory Auditors of the Company. 2. Figures for corresponding
previous year/periods have been regrouped and rearranged wherever considered
necessary. 3. Share of Profits in associates Company OCL India Ltd for the
quarter/half year ended 30.09.2008 is Rs.4800 Millions and Rs.13080 Millions
respectively, which is not included in the above results.
KEY RATIOS
|
Year |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
1.48 |
1.67 |
1.95 |
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Long Term Debt-Equity Ratio |
1.39 |
1.61 |
1.87 |
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Current Ratio |
1.10 |
1.13 |
1.44 |
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TURNOVER
RATIOS |
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Fixed Assets |
0.99 |
0.87 |
0.80 |
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Inventory |
4.91 |
5.74 |
3.39 |
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Debtors |
18.07 |
15.76 |
11.68 |
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Interest Cover Ratio |
3.66 |
4.08 |
3.16 |
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Operating Profit Margin(%) |
29.54 |
24.63 |
15.68 |
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Profit Before Interest And Tax
Margin(%) |
24.43 |
19.70 |
11.39 |
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Cash Profit Margin(%) |
19.27 |
16.37 |
10.28 |
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Adjusted Net Profit Margin(%) |
14.16 |
11.44 |
5.98 |
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Return On Capital Employed(%) |
19.00 |
16.22 |
8.29 |
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Return On Net Worth(%) |
27.38 |
25.15 |
12.82 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
Subject incorporated in 1951, is into manufacture of Cement, Sugar and Dead Burnt Magnetics. Apart from these the company is also into manufacture of Colour Television sets, radios, tape recorders and allied instruments.
Cement Division with 1.2 million tonne cement plant in Tamilnadu contributes
around 62% of the sales. Subject is one of the oldest players in Cement
Industry in Tamilnadu is known for the manufacture of special cements. These
basically find applications in airstrips, railway sleepers and oil wells. The
company has well known brands such as Dalmia Super Roof, Dalmia Foundations and
Vajram. Further the company is also in talks with couple of Cement Companies
operating mini cement plant in and around Andhra Pradesh, TamilNadu and Kerala
to market their products under its portfolio. In last two years the Company has
increased the proportion of its blended cement production to 53%. The rest is
split between OPC (ordinary portland cement), PPC (pozzolan portland cement),
slag and oil well cement. The company is also contemplating to expand the
cement capacity to 3.5 million tonne by setting up a brownfield project near
its existing facility at Dalmiapuram, Trichy and a 29 MW captive thermal power
plant at a total cost of Rs.5000 millions.
Sugar Division of the company is contributing around 30 % to the top line. The
sugar unit of the company with 5000 tonnes/ day crushing capacity is located at
Ramgarh in Uttarpradesh.
The Magnetic Division of the Company, which manufactures Dead Burnt Magnesite,
Monoliths and Magnesia Carbon Bricks. The demand for all the above three
products are closely linked to the fate of Steel Industry as the latter is the
exclusive consumer of Monoliths and Magnesia Carbon Bricks and major consumer
of Dead Burnt Magnesite. This division's contribution to the company’s topline
is mere 3 percent. The magnesite ore benefication plant of the company was
installed during FY 1984-85.
Other business operation of the company which includes Travel Agency(Govan
Travels), Electronic Goods, Multilayer Ceramic Chip Capacitors, Chip Resistors
etc contributes around 5 percent to the topline of the company. The Govan
Travels, an diversification of operation was started in 1970 in New Delhi. The
diversification into manufacture of Electronic Goods under the name of Dalmia
Electronics Corp was made in 1980 but commercial production starete in 1981.
The company has roped in Palomer System and Machines of USA as its technical
Collaborator for manufacture of Multi-layer Ceramic Chip Capacitors (MCCC), the
letter of intent is obtained in this regard on 1987-98, DCBL has also purchased
a Cashew factory at Kundara(in Kerala) in 1965 and renamed it as Dalmia
International.
The R and D of the company, through its own research, developed oil well
cement, class 'G' and also obtained rights to use the API (American Petroleum
Institute) monogram on its oil well cement.
During 1999-2000, Shri Rangam Investment ceased to be the subsidiary of the company due to merger of the same with Mayuka Investments.
Founded in 1935 by Jaidayal Dalmia; the cement division was
established in 1939 and enjoys a heritage of 70 years of expertise and
experience. The company is headquartered in New Delhi with cement, sugar,
travel agency, magnesite, refractory and electronic operations spread across
the country.
The Dalmia Group established four cement plants in
pre-independence years, two of which were affected by partition
and Independence. The two remaining plants operate as Dalmia Cement and the
other as an independent company called Orissa Cements Limited. Managed by a
professional team,
DCBL
sustained has the path to innovation and growth for seven decades.
Early
in their history they learnt the importance of strong relationships. They
learnt that the key to maintaining relationships with their – employees,
shareholders and customers was to learn from each other, to enjoy a spirit of
camaraderie, and to understand and to empathize with their needs. Understanding
their needs led subject to broaden its horizon to include a holistic approach
to best practices in the industry.
Subject
prides itself on having been at the forefront of pioneering and introducing
many new technologies, which exist today, which are followed by others in the
industry. Subject has been and continues to be an industry leader in the niche
market segments.
This
timeline highlights some of the significant moments that took place over the
years and shows how their business has evolved.
Pioneer
in cement manufacturing since 1939, DCBL has been synonymous with super
specialty cements. Undoubtedly the leader, subject with an ISO 9002
certification for its products has always stood for the highest quality cements
for over seven decades. All from a highly modernized plant with R and D backup,
has elevated Subject to the status of the best in the industry today.
Over
the years, they have been at the forefront of innovation and technological
advances in the cement.
Sugar
is a key focus area of the company and has been potentially growing.
At the
company, special emphasis is placed on Research and Development facilities to
augment product quality.
BUSINESS
Subject is engaged in manufacturing of cement, magnesites, sugar, electronics, wind energy and refractories with an installed capacity of 1034000 tons of cement per annum.
CHANGE IN
CAPITAL STRUCTURE AND LISTING OF SHARES
The Company decided
to infuse more equity by issuing forty four lakh seventy thousand five hundred
eighty eight (4470588) shares of face value Rs. 2 each at a premium of Rs.
260.43 per share to Actis and/or their nominees, a leading private equity
investor in emerging markets. Formal agreement to this effect was signed on 24.04.2006 and the entire amount of
approximately Rs.1173 million has been received by the Company.
In terms of the
resolution passed by the Shareholders in the Annual General Meeting held on
27.09.2003, the Company applied for delisting of its securities from dealings
on the Calcutta Stock Exchange. The Company has received an 'in principle'
approval from the' Calcutta Stock Exchange in response to its application for
delisting of the securities.
DIRECTOR REPORT
MANAGEMENT
DISCUSSION AND ANALYSIS
Indian Economy Overview:
What proved to be a challenging year for the global economies turned out to be
a year of manifestation of might for the Indian economy. While there were
increased global uncertainties and fear of slow down of the US economy with
crude oil prices reaching all time highs, Indian Economy maintained its growth
momentum in FY 2008.
According to the data released by the Central Statistical Organisation, Indian
Economy has posted GDP growth of 9%. As per the said report, manufacturing
registered growth of 8.8%, agriculture 4.5% and construction 9.8%. Services,
contributing almost 63% to the GDP recorded another year of double digit
growth.
Despite the overall pressure of global uncertainties and the inflation reaching
beyond 7%, this GDP growth is a true reflection of the sound fundamentals and
the maturity of their economy. They, at Dalmia Cement, believe that their
economy will sustain its growth momentum over the next three to five
years.
Financial
Highlights
The Company posted Consolidated Gross Sales of Rs.16908 million in FY
2008, up from Rs.11176 million in the previous year, depicting a growth of 51%.
Consolidated Profit after Tax improved to Rs.3688 million this year from Rs.
2,290 million, up 61% (after taking into account the share of profit from
associates of Rs.184 million).
Stand alone Net Sales in FY 2008 were up from Rs.9865 million to
Rs.14807 Million for the Company. EBITDA for the Company grew from Rs.4054
million to Rs.6334 million, depicting a growth of 56%.
Share of contribution at Net Sales level of each business to the total net
sales has not changed much over last year. However, EBITDA contribution from
the cement business has significantly improved, as is evident from the table
above.
The net sales of cement business grew by 49% to Rs.11322 million in FY 2008.
Net Sales from the integrated sugar business of the Company increased to
Rs.2720 million in FY 2008, up 61%. Net Sales from other businesses, which
include magnesite and refractory amongst others, were up from Rs.556 million in
FY 2007 to Rs.765 million.
In the Earnings before Interest, Tax and Depreciation, huge surge was witnessed
in cement and integrated sugar businesses in FY 2008 as compared to previous
year. Cement EBITDA has grown last year on account of higher volumes as well as
improved realisations taking margins to 44% from 37% last year. Sugar business
EBITDA improved due to profitability contribution from the co-generation
unit.
Cement
Business
Industry
Indian Cement industry added 23 MnTPA (Million Tonne Per Annum) to its
installed capacity in FY 2008 to take it to 189 MnTPA, showing a year on year
growth of 14% with utilizations improving to 96% for the same period.
Production grew by just over 8% over the last fiscal to reach 168 MnTPA. Cement
consumption In India registered an encouraging double digit growth of 10 %
backed by a similar growth in the Construction activity. Southern states of
Andhra Pradesh, Karnataka, Kerala and Tamil Nadu accounted for almost 30% of
the All India Domestic Demand of 164 MnTPA.
However, per capita cement consumption in India is still very low at around 130
kg against the world average of 260 kg and China at 450 kg. This underlines the
tremendous scope for growth of the Indian cement industry in the long
term.
Cement Operations
Cement operations contribute 77% to the revenues of the company. The plants are
currently at a single location in Dalmiapuram, District Trichy in Tamil Nadu,
which falls in the southern region of India where cement demand in last one
year has grown 10% year on year, which is at almost the same rate as the
country. The Company services the southern states of Tamil Nadu, Kerala and
Karnataka. Revenue contribution from Tamil Nadu in FY 2008 is 60% while Kerala
and Karnataka contribute 27% and 9% respectively. Balance 4% contribution is
from other areas.
There has been a notable growth in capacity utilization of cement business
which has increased from 78% in FY 2007 to 94% in FY 2008. This is on account
of brown field expansion of 2 MnTPA that was undertaken in FY 2007 which yielded
the benefit of enhanced operations for the entire year.
The company with its continued zest to improve efficiency and benefit from
economies of scale worked ceaselessly to optimise cost. While efficiency was
reflected in better performance in terms of cement and clinker production and
capacity utilizations, margins improved with higher realizations and better
cost management.
The installed capacity of the company stands at 3.5 MnTPA at its
Dalmiapuram plant. In order to take advantage of the growing domestic demand
for cement, two new cement plants at Cuddapah (Andhra Pradesh) and Ariyalur
(Tamil Nadu) of 2.25 MnTPA each are being set up. The commissioning of these
will take the installed capacity of the company to 8 MnTPA, an increase of 129%.
To expand its footprint in Southern region Rs.1550 crore of capital expenditure
has been outlined in these two upcoming cement plants. The Greenfield project
at Cuddapah in Andhra Pradesh is expect? d to be commissioned in second half of
CY 2008 and the one in Ariyalur (Tamil Nadu) will be operational within first
half of CY 2009.
To mitigate the increase in energy costs, the company uses its wind mills with
16 MW capacity at Muppandal in Tamil Nadu. This ensures generation of
inexpensive and eco-friendly captive power supply to its plant through the
State grid route. Existing thermal power capacity of Dalmia is 27MW which in
near term would increase to 45 MW this year.
The viability of locations plays a pivotal role in the economics of cement
manufacturing. It is determined by certain factors such as proximity to raw
material, availability of continuous power supply and distance to market. With
plants located in close proximity to the raw material, the freight and
transportation costs are also kept at lower level resulting in higher
productivity and better net realizations.
The Company continued to enjoy goodwill in its market place and its brands such
as Dalmia Superroof and Vajram continued to be preferred products and commanded
premium over other products in the market. The most prominent aspect of
company's market is its significant presence in infrastructure applications
which includes cement used for constructing airstrips, oil wells and railway
sleepers. The Company's oil well cement is the first cement in the country to
receive the prestigious American Petroleum Institute (API) certification. It is
used for cementing the walls of on-shore and off-shore oil wells of ONGC,
Reliance and other oil exploration companies.
Outlook
Realty will continue to play a major role as the development of commercial
space including malls, hotels, SEZs will go on full swing. Residential realty
has seen a slight moderation in demand as the cost and availability of retail
finance has adversely impacted its growth. This slowdown is momentary.
Recommended pay hike of government employees by the Sixth Pay Commission and
the otherwyse rising prosperity of the Indian middle class segment with
improved economic conditions will drive the growth momentum of the retail
realty sector.
Going forward, dedicated rail freight corridor, rapid expansion of airport
network to cover tier II and III cities, ongoing up-gradation of important
ports and airports, slew of capacity expansion in steel, power and other
manufacturing sectors and 2010 Commonwealth Games to be held in Delhi will all
continue to augment the growth momentum in key infrastructure areas. The
country is likely to double its infrastructure spending over the next five
years towards creating and modernising its infrastructure and sustaining its
growth momentum.
In light of above and based on the last 3 year CAGR of 10% in cement demand,
the Company estimates that the industry shall continue to see double digit
demand growth.
The Cement Manufacturers Association estimates addition of over 75 MnTPA
capacity spread across India, in next two years. This would take the country's
cement capacity to over 260 MnTPA, to meet its rising demand growth. The
Company would endeavour to maintain its market share in its core geographies
and expand network in its new market, State of Andhra Pradesh.
Sugar Business
Industry
India continues to remain the largest consumer of sugar followed by China,
Brazil and USA. In fact consumption in above countries is growing at a rate
higher than the world average. Consequently these topographies are expected to
play a pivotal role in global sugar trade in coming years.
Sugar is now perceived as an energy crop owing to derivation of ethanol
which is increasingly being used as a mixture in petrol. With rising crude
prices but softer sugar prices, Brazil has been increasingly diverting the
sugarcane juice for manufacture of ethanol. Currently about 55-56 % of the
total sugarcane production of Brazil is used for manufacturing ethanol.
The Indian Sugar industry is the country's second largest agro processing
industry with an estimated production of 27 MnT (Million Tonnes) in the 2007-08
sugar season. This sector is a key driver of rural development, supporting
India's economic growth. The industry, in the past two to three seasons has
shown respectable growth in terms of quantities produced. This was primarily on
account of good climatic conditions, remunerative sugar cane prices, setting up
of new production capacities and on time payments to farmers. The cane acreage
grew by 4.4% in 2007-08 across India and by 7% in UP where the company operates
its three units.
In FY 2008, sugar prices remained slightly soft as production in India was at
28.3 MnT in sugar season 2006- 07. Delayed commencement of crushing on account
of uncertainty in cane prices and lower per hectare yield of sugar cane has
moderated production estimates for the season. Crushing days reduced
significantly in 2007-08 season and is expected to favourably impact the
realisations.
Sugar Operations
Dalmia embarked on the manufacture of sugar in the mid-nineties and set up its
first unit at Ramgarh (Distt. Sitapur) U.P. The installed capacity at the time
of diversifying into sugar business was 2500 TCD (tonnes cane crushing per
day), which has been expanded to 7500 TCD. From a single sugar-manufacturing
unit the Company has now grown to three operational units with total installed
capacity of 22500 TCD leading to sugar manufacturing of about 300,000 TPA. With
co-generation capacity of 79MW and distillery capacity of 80 KL per day, it is
a forward integrated sugar manufacturing set up.
The sale of sugar accounts for more than 10% of Company's revenues and it aims
to build deep capabilities in this segment. The sugar manufacturing plants
incorporate state-of-the-art technology that ensures high productivity and
efficiency, across all plants. Due to emphasis on quality throughout the
processes, the Company produces high quality sugar both in terms of grain size
and colour, which leads to better realizations.
In this challenging business environment of huge sugar stocks and high
administered sugarcane prices, the Company's sugar business performance is
noteworthy.
Sugar
Sugar production and cane crushed has grown substantially in FY 2008 as
compared to the previous year. Sugar production grew by 128% to 24.600 Millions
tons in FY 2008. Crushed cane increased by 142% to 244.500 Millions tons.
Volumes jumped due to the fact that two new sugar plants at Jawarharpur and
Nigohi started operating at full scale in FY 2008. Though sugar recovery rate
in FY 2008 was at 10.06%, the business saw 53% growth in sales volumes at
14.100 Millions tones.
Co-generation
The Cogeneration plants at three locations Ramgarh, Jawaharpur and Nigohi with
total installed capacity of 79 MW started operating at full scale last year.
Power generated during FY 2008 was 299 million units and gross Power exported
during the year was 201 million units. Cogeneration is major contributor to top
and bottom line of business and it helped to pull up sugar contribution in the
overall Company revenues and profits.
Distillery
Distillery plant at Jawaharpur (U.P.) with capacity of 80 KLPD too is now
operational and contributing to the top-line of the Company. Distillery
Production in FY 2008 touched 9557 KL and sales volume during this period was
at 7490 KL
Being highly regulated, the performance of the sugar industry in India is
largely dependent on Government policies and regulations. This year, free level
of buffer stock of 20 million tonnes for free sale was released by the
Government and it has impacted the realizations. Sugar prices which had fallen
to historically low levels during last year have only recently shown slight
signs of recovery.
Outlook
This season, it is expected that sugar production would be lower in the range
of 25- 26 MnT against the earlier estimates of 30-31 MnT and this should bode
well for sugar realisations to inch upwards.
The industry has been under tremendous pressure on various issues of cane
sourcing, cane pricing and lower sugar realisations. Thorat Commission was set
up by the Central Government to look into various aspects of sugar industry
including cane prices, reservation of cane area, dispensing with monthly
release mechanism, abolishing of levy sugar and distance criteria between the
factories. The industry is hopeful that the issues would be resolved in a
manner that is beneficial to all stakeholders.
Going forward the shift of sugar towards manufacture of ethanol would be
crucial for the volume of sugar available for international market. Within
their country, the government's fiat that with effect from 1st Oct'08, oil
marketing companies will have to blend 10 per cent ethanol with petrol from
existing 5% will provide value-addition to the sugar by-product, molasses. This
will open up further opportunities for the company.
Other
Businesses:
Other businesses of Subject accounted for Rs.805 million or 7% of the Company's gross sales in 2006-07. These comprise mainly the refractory and the magnesite divisions. Though comparatively small, businesses of both divisions have shown improvement mainly on account of growth in the steel and cement industry, the two main consuming sectors.
On the back of significant capacity additions and strong demand for cement, the Company recorded a growth of 73.1% in net sales from Rs.5698 million in 2005-06 to Rs.9865 million in 2006-07. Total income increased by 77.8% from Rs.6506 million in 2005-06 to Rs.11567 million in 2006-07 due to increase in other income primarily from interest and profit from sale of investments.
As mentioned earlier, the Company was able to realise significant operational
efficiencies with increased scale. In fact, total expenditure as a share of net
sales has decreased from 95.1% in 2005-06 to 87.2% in 2006-07. This occurred
despite an increase of 130% in interest costs from Rs.235 million in 2005-06 to
Rs.540 million in 2006-07.
Cash profits (PBDT) increased by 156.9% from Rs.1368 million in 2005-06 to
Rs.3515 million in 2006-07. Profit before tax (PBT) rose by 172.2% from Rs.1089
million in 2005-06 to Rs.2964 million in 2006-07. Profit after tax (PAT) grew
by 169.9% from Rs.848 million in 2005-06 to Rs.2289 million in 2006-07. This
has translated into earnings per share on a fully diluted basis of Rs.29.18 in
2006-07 from Rs.11.78 in 2005-06. Cash EPS has increased to Rs. 40.40 from
Rs.17.60.
There has been a significant improvement in all profitability ratios (Table 2).
Cash ROCE (return on capital employed) defined as PBDIT minus current tax and
FBT as a percentage of average capital employed during the year, increased by
almost 10 percentage points to 24.28%. Return on average net worth also registered
a substantial increase from 21.60% in 2005-06 to 38.76% in 2006-07.
The debt-equity ratio has declined over the last one year from 1.6 at the end of 2005-06 to 1.35 at the end of 2006-07. This can be attributed to the issue of 4.47 million shares of face value of Rs.2 each at a premium of Rs.260.43 per share to affiliates of Actis, a leading private equity investor in emerging markets.
DIRECTOR PROFILE
Pradip Kumar
Khaitan
Chairman and Non Executive Director
industry for over
41 years. He was co-opted as a Director of the Company in 1996. He holds an
LL.B. degree from the University of Calcutta. As a partner of Khaitan and Co.,
Solicitors and Advocates, he has extensive experience in legal and commercial
matters. He is a Director of several leading public limited companies in India.
Jai Hari Dalmia
Vice Chairman
Mr. J. H. Dalmia,
63, holds a B.E. degree in electrical engineering from Jadavpur University and
a Master's degree in electrical engineering from the University of Illinois,
Urbana Champagne. He has more than 36 years of experience cutting across
various industries which includes wide knowledge and experience of refractory,
sugar and cement businesses. Mr. J.H. Dalmia has vast experience in research
and development having personally received several patents for the Company's
businesses and has been instrumental in establishing the Company's research and
development efforts more than 20 years ago.
Yadu Hari Dalmia
Vice Chairman
Mr. Y. H. Dalmia,
60, holds a B.Com (Hon) degree from Delhi University and is a Fellow Member of
the Institute of Chartered Accountants of India. He has more than 35 years of
experience in the cement industry. Mr. Y.H. Dalmia has served as President of
the Cement Manufacturers Association and is a known figure in the cement
industry.
Puneet Dalmia
Managing Director
Mr. Puneet Dalmia,
35, holds a B.Tech. degree from the Indian Institute of Technology, Delhi and
is a gold medalist from the Indian Institute of Management, Bangalore in strategy
and marketing. He has eleven years of experience in the industry having started
his career as the co-founder and Chairman of one of the most profitable
e-recruitment websites in India, JobsAhead.com, which was later acquired by
Monster.com, a Nasdaqlisted multinational company. Mr. Puneet Dalmia
conceptualized the growth strategy and governance architecture for the Company
to focus on its core businesses and is spearheading the growth plans for the
group.
Gautam Dalmia
Joint Managing Director
Mr. Gautam Dalmia,
40, holds B.S. and M.S. degrees in electrical engineering from Columbia
University. He has 15 years of experience in the cement and sugar industries.
He was part of the team that led the diversification of the Company into sugar
business in 1994. He was personally responsible for implementing a new strategy
to turnaround the sugar business. He has led the effort to design and implement
the Company's integrated sugar, ethanol and cogeneration business. He is
directly responsible for managing the sugar business and is leading all
operations and execution of cement projects besides providing leadership to the
commercial functions for the group.
Mridu Hari Dalmia
Non- Executive Director
Mr. Mridu Hari
Dalmia, 66, is a gold medallist in chemical engineering from Jadavpur
University. He was co-opted as a Director of the Company in 2005. In his
present capacity he is the President and CEO of OCL having been associated with
the Company since 1970. He brings with him wealth of over 38 years of experience
in the cement industry and has led the Group in various sectors in national and
international operations. He has held leadership positions in various Indian
business associations and has been associated with various industry
organisations in the past including those as Managing Committee member of the
Federation of Indian Chambers of Commerce and Industry, President of Indian
Refractories Manufacturers Association, Cement Manufacturers Association and
National Council for Cement and Building Materials. Currently he is a member of
the Management Committee and the Expert Committee on Direct Taxes of the
Associated Chambers of Commerce and Industry.
Nil Ratan Khaitan
Independence Non- Executive Director
Mr. Nil Ratan
Khaitan, 71, holds an LL.B. degree from the University of Calcutta. He has over
22 years of experience in the cement industry. He was co-opted as a Director of
the Company on August 24, 1979. He is an advocate by profession and has
extensive experience in legal, taxation and commercial matters. He holds
directorships in two public companies, namely, Universal Conveyor Belting
Limited and Jay Cylinders Limited.
J. S. Baijal
Independence Non- Executive Director
Mr. J. S. Baijal,
77, holds an M.A. degree in economics from Allahabad University. A senior
fellow in Harvard University, USA, he joined the Indian Administrative Service
(IAS) in 1954 and has held the posts of Secretary, Finance, Government of
Orissa; Joint Secretary to the Government of India, Ministry of Finance,
Department of Economic Affairs; Director of National Fertilizers Limited,
IFFCO; Minister
Economic, Embassy
of India, Washington D.C.; Chairman of the Industrial Development Corporation
of Orissa; Officer on Special Duty with the Reserve Bank of India; Secretary,
Irrigation and Power, Government of Orissa; Additional Secretary to the
Government of India, Health and Family Welfare; Additional Secretary to the
Government of India, Ministry of Finance, Department of Economic Affairs;
Exofficio Director of the Mineral and Metals Trading Corporation of India
Limited, ONGC Limited, and Punjab National Bank; Secretary to the Government of
India, Planning Commission; and Executive Director, World Bank, International
Finance Corporation, and International Development Association, Washington.
After his retirement, he has held positions as Director of HDFC Bank Limited,
before being appointed as a Director of the Company on May 31,1999. He is a
Trustee of Morgan Stanely Mutual Fund since 1994 and has over eight years of
experience in the cement industry.
M. Raghupathy
Independence Non- Executive Director
Mr. M. Raghupathy,
71, holds an M.A. degree in Economics from Madras University, with Statistics
as the special subject. He was Co-opted as a Director of the Company in 1997.
He is the Chairman of the Audit Committee and Shareholders' Committee of the
Company. He joined the Indian Administrative Service (IAS) in 1960 and has held
various positions in the Government of Tamilnadu such as Deputy Secretary to
Government in the Revenue Department, Collector of Salem District, Director of
Rural Development, Managing Director of TamilNadu Dairy Development
Corporation, Commissioner of Animal Husbandry Department, Commissioner and
Secretary to Government of TamilNadu in various departments like Transport
Housing and Urban Development, Agriculture (as Agriculture Production
Commissioner) and Textiles, Principal Commissioner of Land Administration, Land
Reforms and Revenue departments of the Government of Tamilnadu, Chairman of
Thiruvalluvar Transport Corporation Limited, Chairman of the Tamilnadu
Transport Development Finance Corporation, Chief Electoral Officer of
Government Of Tamilnadu, Principal Vigilance Commissioner and Principal
Commissioner of Revenue Administration. He has over 11 years of experience in
the cement industry.
Donald Peck
Independence Non- Executive Director
Mr. Donald Peck,
54, holds an M.A. degree and a doctorate in economic history from Oxford
University. He was nominated as a Director of the Company in July, 2006. Mr.
Peck's expertise lies in emerging markets investing, both in the equity
investment/fund management business, experience in which was acquired by him
when he was with International Finance Corporation in Washington and prior to
that in the investment banks of Lloyds Bank and Morgan Grenfell. He joined CDC
Capital Partners and was responsible for helping it to develop its equity
investment business and setting up its fund management business worldwide. He
went on to become a Director in 1999. Having run the CDC/Actis private equity
business in India from 1995 to 2007, Mr Peck became one of the seniorfounding
partners in Actisin 2004.
N. Gopalaswamy
Non- Executive Director
Mr. N.Gopalaswamy,
76, holds a B.Sc. degree in chemistry from Madras University and a B.E. degree
in chemical engineering from Annamalai University. Having joined the company in
1980 he was co-opted as a Whole-time Director in 1989. He is a member of the
Institute of Industrial Engineers, USA, the Indian Institution of Industrial
Engineering, the Indian Institute of Chemical Engineering, and the Institution
of Engineers (India). Having held the position of President for 25 years, since
last year, he is a Council Member of the Tiruchirapalli Productivity Council.
He has over 40 years of experience in the cement industry. He ceased to be a
Whole-time Director of the Company and was appointed as an Additional Director
with effect from 1-8-2007.
T. Venkatesan
Whole Time Director
Mr. T. Venkatesan,
55 years, Whole-time Director, is a B.A. (Economics) and a fellow member of the
Institute of Chartered Accountants of India. He brings with him a rich
experience of over 28 years having commenced his career with Thiru Arooran
Sugars Limited in the finance and accounts department. He has worked with
reputed companies such as Eicher Tractors Limited, Triveni Engineering Limited
and the Aditya Birla group. In his previous assignment with the Sterlite Group,
he was instrumental in spearheading the expansion from 180 KTPA to 400 KTPA, as
CEO for Sterlite Industries' copper business. In addition he was also holding
additional charge as CEO and director on the Board of Vedanta Alumina Limited
and has successfully implemented a Rs. 5000 crores project in the State of
Orissa. His expertise lies in accelerating growth and building organisational
capability to ensure delivery of business goals. In his present capacity he is
responsible for operations and future growth of cement segment.
BIODATA
Subject, incorporated in the year of 1951, is into
manufacture of Cement, Sugar and Dead Burnt Magnetics. Apart from this, the
company is also engaged in the manufacture of electronics and its allied
instruments. DCBL has purchased a Cashew factory at Kundara (in Kerala) in 1965
and renamed it as Dalmia International. Dalmia Electronics Corp was made in
1980 but commercial production started in 1981. The company has roped in
Palomer System and Machines of USA as its technical Collaborator for
manufacture of Multi-layer Ceramic Chip Capacitors(MCCC). The magnesite ore
benefication plant of the company was installed during financial year 1984-85.
In the year 1993, DCBL became the first company in South India to obtain ISO
9002 certification and second in the country among the Indian Cement Plants.
During 1999-2000, Shri Rangam Investment ceased to be the subsidiary of the
company due to merger of the same with Mayuka Investments.
The company has been an ISO 14001 Certified company since 2004. The company has
given its nod to merge its whollyowned subsidiary Dalmia Cement (Meghalaya)
into OCL India Ltd in the year 2007.
Subject doubling its production capacity to 12 million tonnes by commissioned
three Greenfield projects in Tamil Nadu, Andhra Pradesh and Orissa. The plant
capacity increased to 2.25 million in each Kadapa plant and Cuttack plant
respectively and it has plant in Tamil Nadu which have the production capacity
of 3.5 million tonnes per annum. The company has invested over $500 million in
these projects. Dalmia adopted the Leveraging Information Technology (IT) tools
to enable productivity improvement. Through its own research and development
developed oil well cement, class 'G' and also obtained rights to use the API
(American Petroleum Institute) monogram on its oil well cement.
The company has won the numerous awards from the government and independent
agencies such as National Council for Cement and Building Material (NCCBM) and
Confederation of Indian Industry (CII) for energy efficiency and energy
conservation in its cement business . The company also received awards for
environment excellence in plant operations and limestone mining from NCCBM, and
acclaim for its initiatives in the area of safety, health and environment from
the CII.
In the year 2008, though DCBL, which ranks seventh among the top cement
companies in India, is exporting oil well cement (used in drilling process) to
the Gulf region. As part of its Corporate Social Responsibility (CSR)
initiative, Subject has launched the Dalmia Institute of Construction to
empower rural youths with employable skills in the year 2008.
The future enhancement of the company is ramping up its production capacity to
25 million tonnes in two phases with the aims to become a national player. Under
phase I, the company, along with its associate Orissa Cement, will expand
production capacity to 15 million tonnes over the next few years. Under phase
II, the company plans to start production units in Belgium, Gulbarga, Rajasthan
and Megalaya.
Web Details Attached
Since its inception in 1935 Subject has been paving the way for
excellence over a period of 7 decades. Blending the enthusiasm of the young
with the experience of the old it has been their people and their management
that has been the driving force behind their growth story. They believe in
providing a friendly and open door culture as well as the steady opportunity to
work in the best areas as well as explore their employee’s individual capacity
which keeps them motivated and increases their efficiency.
Their Essence
The year 1939 saw the establishment of one of India’s first cement
plants with an installed capacity of 250 tonne cement per day-they as DCBL had
just arrived. The plant today has grown by manifolds in terms of capacity. They
as a group too have expanded both in terms of vision as well as business
interests ranging from harnessing of the bounty of iron-ore and magnesite in
the country, Travel and export activities. These diversifications were an
effort to build and contribute to the development of basic industrial
materials. The year 1993 saw them foraying into the Sugar business with an
installed capacity of 2500 TCD. Today alongwith the Cement business, Sugar
business is one of the key growth engines of DCBL.
Apart from establishing their footprints across various business segments they
have also kept up their pace of excellence. In 1993, DCBL became the first
company in South India to obtain ISO 9002 certification and second in the
country among the Indian Cement Plants. In 2004, they became an ISO 14001
Certified company. Their efforts in sustaining growth with responsibility have
merited them many notable awards for Energy Conservation and Efficiency,
Safety, Health and Environment issues from the Government and other reputed
agencies.
Today, they stand as one of the most profitable players in the industry,
with sustainable high margins and strong financials backing their efforts.
Their vision which balanced the changing needs with their corporate
imperatives, their organization has grown over the years taking them to new
heights and building onto their strengths. Today they stand on a strong
foundation of high organizational values and business ethics through which they
have cemented their growth.
Their business has year on year moved up the value chain with a
consistent record of making profits and paying dividends, making the company
financially strong and stable. With a total income of over Rs 1287 crores DCBL
has business interests in two major segments, Cement and Sugar. Their objective
is to grow further and be among the top manufacturing industries today. In this
course, their cement business has grown with an increased production capacity
from 1.5 million tonnes [MT] last year to more than 3.5 MT before the mid of
this year. Also their sugar business, since its commencement in 1994 has shown
an expansion from an installed capacity of 2500 TCD to 7500 TCD and has grown
from a single unit operation to three Integrated Sugar Mills in the State of
Uttar Pradesh. With cogeneration capacity of 80MW and distillery capacity of 80
KLPD, it is an integrated manufacturing set up. DCBL is expanding its cement
footprint in the Southern India with the launch of its 2 Greenfield projects,
each of 2.25MN tonnes capacity, at Kadapa, Andhra Pradesh and at Ariyalur,
Tamil Nadu. This parabolic growth in last 1-2 years is a testament of their
determination to grow into a leadership position.
Their aim is to sustain the growth that they have witnessed for the past
years as well as forge ahead with the ambitious plan they have envisioned for
theirselves with the help of professional Management team under the guidance of
the experienced promoters of the Group.
FIXED ASSETS:
· Land
· Buildings
· Plant and Machinery
· Railway Sidings
· Vehicles
· Furniture and Fixtures
· Other Assets
OTHER INFORMATION:
· Prior period expenses amounting to Rs Nil (Rs. Nil) and prior period income amounting to Rs. 2.97 Million ( Rs.7.11 Million) representing excess provision written back credited to Miscellaneous Receipts, have been accounted for under the relevant heads of account.
· In the opinion of the Board and to the best of their knowledge and belief, the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.
· The Company is in the process of identifying the suppliers who would be covered under the Micro, Small and Medium Enterprises Development Act, 2006. In the circumstances, the information, if any, required to be disclosed under the said Act, is not yet ascertained.
· There are no Small Scale Industries, to whom the Company owes dues, which are outstanding for more than 30 days at the Balance Sheet Date
· The Company is a lessor in respect of certain items of buildings, plant and machinery, etc. The said fixed assets have been given on an operating lease for a period of 10 years. The lease is non-cancellable by the lessee and the lease rental in respect of the said lease is Rs. 22.05 Million per annum. The lease rentals recognised in the accounts for the year is Rs. 22.05 Million and no contingent rent has been recognised in this regard.
· Dalmia Sugars Limited, a wholly owned subsidiary was amalgamated with the Company with effect from the date of incorporation of that company i.e.8th June, 2005 as per the Scheme of Amalgamation approved by the members and subsequently sanctioned by the Honourable High Court of Madras and Delhi. The amalgamation has been accounted for under the pooling of interests method as prescribed in AS 14 – “Accounting for Amalgamations”. The accounts of the transferor company for the year ended 31st March,2006 is already audited and approved by the members, hence the assets and liabilities of the company as at 1st April,2006 have been taken over at their book values. The Loss of Rs.1901220 for the period ended 31st March,2006 has been transferred to the debit of Profit and Loss account of the Company. As per scheme, 100000 Equity shares of Dalmia Sugars Limited of Rs.10 each, fully paid up, stand cancelled.
· Particulars of Foreign currency exposures that are not hedged by derivative instruments or otherwise are as under: Sundry Creditors USD 11.29 Million equivalent to Rs.483.08 Million, JPY 10 Million equivalent to Rs.3.60 Million (Previous year USD 7.72 Million equivalent to Rs.330.22 Million, JPY 175 Million equivalent to Rs 63.04 Million, SEK 29.92 Million equivalent to Rs.182.73 Million, CHF 0.02 Million equivalent to Rs. 0.79 Million).
Awards and
Recognitions
Ø
Dalmia Cement
has won numerous awards from the government and independent agencies such as
National Council for Cement and
Ø
Building
Material (NCCBM) and Confederation of Indian Industry (Cll) for energy
efficiency and energy conservation in its cement business.
Ø
The company
also received awards for environment excellence in plant operations and
limestone mining from NCCBM, and acclaim for its initiatives in the area of
safety, health and environment from the Cll.
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.50.52 |
|
UK Pound |
1 |
Rs.75.08 |
|
Euro |
1 |
Rs.63.72 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
|
81 |
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 |
|