MIRA
INFORM REPORT
|
Report Date : |
06.12.2008 |
IDENTIFICATION
DETAILS
|
Name : |
SHREE CEMENT LIMITED |
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Registered Office : |
Bangur Nagar, P O Box 33, Beawar, Ajmer-305901, Rajasthan |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
25.10.1979 |
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Com. Reg. No.: |
001935 |
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CIN No.: [Company
Identification No.] |
L26943RJ1979PLC001935 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
JDHS01295A |
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PAN No.: [Permanent
Account No.] |
AACCS8796G |
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Legal Form : |
A Public Limited Liability Company. The company’s shares are listed on
the stock exchange. |
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Line of Business : |
Manufacturing and Marketing of Cement |
RATING &
COMMENTS
|
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 33000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having satisfactory track.
Trade relations are fair. General financial position is good. Payments are
reported as usually made as per commitments. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office : |
Bangur Nagar, P O Box 33, Beawar, Ajmer-305901, Rajasthan, India |
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Tel. No.: |
91-1462-228101/ 06 |
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Fax No.: |
91-1462-228117/ 19 |
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Toll Free No.: |
18001806003-04 |
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E-Mail : |
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Website : |
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Corporate Office : |
21, Strand Road, Kolkata-700001, West Bengal, India |
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Tel. No.: |
91-33-22390601/ 05 |
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Fax No.: |
91-33-22434226 |
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E-Mail : |
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Factory 1 : |
Unit I and II Bangur Nagar, Bewar – 305901,
District Ajmer, Rajasthan, India |
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Tel. No.: |
91-1462-228101/ 06 |
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Fax No.: |
91-1462-228117/ 228119 |
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E-Mail : |
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Factory 2 : |
Unit IV , V and
VI Bangur City, Ras, Tehsil jaitaran-306107, District Pali, Rajasthan
(India) |
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Tel. No.: |
91-1462-228101-06 |
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Fax No.: |
91-1462-228117/ 228119 |
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E-Mail : |
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Factory 3 : |
Khushkhera
Cement Grinding Units Plot No. SP 3-II, A-1, RIICO Industrial Area, Khushkhera (Bhiwandi) – 301707,
District Alwar, Rajasthan, India |
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Tel. No.: |
91-1493-250521/ 22/23/ 24 |
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Fax No.: |
91-1493-517227 |
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Marketing Office : |
Shree Ultra
Cement 122-123, Hans Bhawan, 1, Bhadur Shah Zafar Marg, New Delhi-110002 |
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Tel. No.: |
91-11-23370828/ 23379218/ 23370776 |
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Fax No.: |
91-11-23370499 |
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Marketing Office
: |
A-6, Yudhisther Marg, Opposite Yojana Bhawan, C Scheme, Jaipur-302005,
Rajasthan, India |
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Tel. No.: |
91-141-2223918/ 2225950 |
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Fax No.: |
91-141-2381091 |
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E-Mail : |
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Marketing Office
: |
Bangur Cement 6B, 6 Floor, Hansalaya Building, 15, Barakhamba Road, New
Delhi-110001, India |
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Fax No.: |
91-11-23702794/ 96 |
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E-Mail : |
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Marketing Office
: |
91, Dulheshwar Garden, C Scheme, Jaipur-302005, Rajasthan, India |
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Tel. No.: |
91-141-2361735/ 2361696 |
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Fax No.: |
91-141-2360891 |
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E-Mail : |
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Marketing Office
: |
14 E, 14 Floor, Hansalaya Building, 15-Barakhamba Road, New
Delhi-110001, India |
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Tel. No.: |
91-11-23731085/ 61512430 |
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Fax No.: |
91-11-23731084 |
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Marketing Office
: |
14-15, Indira Plaza, Hawa Sarak, Sodala, Jaipur-302001, Rajasthan,
India |
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Tel. No.: |
91-141-2222032/ 6455692 |
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Fax No.: |
91-141-2222031 |
DIRECTORS
|
Name : |
Dr. Y. K. Alagh |
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Designation : |
Director |
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Date of Birth/Age : |
69 Years |
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Qualification : |
Doctorate in Economics |
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Expertise in specific functional area : |
Economist |
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Date of Appointment : |
29.10.2004 |
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Other Directorship: |
Tata Chemical Limited |
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Name : |
Mr. R L Gaggar |
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Designation : |
Director |
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Date of Birth/Age : |
76 Years |
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Qualification : |
B.A (Hons) LLB |
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Expertise in specific functional area : |
Solicitor and Advocate |
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Date of Appointment : |
25.01.1995 |
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Other Directorship: |
·
Somany Ceramics Limited ·
Sarda Plywood Industries Limited ·
TIL Limited ·
Peria Karmalai Tea and Produce Company Limited ·
Paharpur Cooling Towers Limited ·
International Combustion India Limited ·
Subhash Projects and Marketing Limited ·
Machino Plastics Limited ·
Sumedha Fiscal Services Limited ·
Financial and Management Services Limited ·
Machino Bassel India Limited ·
Eastern Silk Industries Limited |
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Name : |
Mr. M K Singhi |
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Designation : |
Director |
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Date of Birth/Age : |
56 Years |
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Qualification : |
B.Sc., L.L.B and F.C.A |
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Expertise in specific functional area : |
Company Executive |
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Date of Appointment : |
26.04.2002 |
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Other Directorship: |
Shree Cement Marketing Limited |
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Name : |
Mr. Bengur H. M |
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Designation : |
Managing Director |
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Date of Birth/Age : |
56 Years |
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Qualification : |
B.E (Chemical) |
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Experience : |
30 Years |
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Date of Appointment : |
01.01.1992 |
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Other Directorship: |
Shree Digvijay Cement Company Limited |
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Name : |
Mr. B.G. Bangur |
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Designation : |
Executive Chairman |
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Date of Birth/Age : |
74 Years |
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Qualification : |
B.Com |
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Experience : |
55 Years |
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Date of Appointment : |
13.08.1992 |
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Other Directorship: |
Hasting Mill A Division of Shree Digvijay Cement Company Limited |
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Name : |
Mr. O P Setia |
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Designation : |
Director |
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Name : |
Mr. Shrikant Somany |
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Designation : |
Director |
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Name : |
Dr. Abid Hussain |
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Designation : |
Director |
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Name : |
Mr. A Ghosh |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Prashant Bangur |
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Designation : |
Senior Executive |
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Date of Birth/Age : |
28 Years |
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Qualification : |
B.Sc.and MBA |
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Experience : |
4 |
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Date of Appointment : |
22.06.2004 |
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Name : |
Mr. Ashok Bhandari |
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Designation : |
Chief Finance Officer |
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Date of Birth/Age : |
55 Years |
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Qualification : |
B.Sc, (Hons) FCA |
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Experience : |
30 Years |
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Date of Appointment : |
01.04.1990 |
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Other Directorship: |
PT Indo Rama Synthetics |
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Name : |
Mr. Payal Diwarkar |
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Designation : |
Senior Vice President (Marketing) |
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Address : |
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Date of Birth/Age : |
50 Years |
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Qualification : |
B.Tech, PGDM |
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Experience : |
26 Years |
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Date of Appointment : |
23.10.2001 |
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Other Directorship: |
Gujarat Ambuja Cements Limited |
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Name : |
Mr. Vinay Wadhawa |
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Designation : |
Senior Vice Preseident (marketing) |
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Date of Birth/Age : |
52 Years |
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Qualification : |
B.A (Hons.), M.B.A (Marketing) |
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Experience : |
27 Years |
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Date of Appointment : |
01.12.2006 |
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Other Directorship: |
Binani Cement Limited |
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Name : |
Mr. H C Kabra |
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Designation : |
Senior Vice President (Power Plant) |
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Date of Birth/Age : |
62 Years |
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Qualification : |
B.E. (Mechanical) |
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Experience : |
40 Years |
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Date of Appointment : |
30.08.2001 |
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Other Directorship: |
Century Textile and Industries Limited |
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Name : |
Mr. S M Khira |
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Designation : |
Advisor (Technical) |
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Date of Birth/Age : |
62 Years |
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Qualification : |
Diploma (Mechanical) |
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Experience : |
41 Years |
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Date of Appointment : |
31.01.1997 |
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Other Directorship: |
Tororo Cement Industry Limited |
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Name : |
Mr. P K Tripathy |
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Designation : |
Vice President (Technical) |
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Date of Birth/Age : |
50 Years |
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Qualification : |
B.Sc. (Engineer) |
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Experience : |
25 Years |
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Date of Appointment : |
06.04.1997 |
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Other Directorship: |
Aditya Cement |
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Name : |
Mr. M M Sharma |
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Designation : |
Vice President (Projects) |
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Date of Birth/Age : |
58 Years |
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Qualification : |
B.Sc. (Chemical Engineer) |
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Experience : |
35 Years |
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Date of Appointment : |
15.06.1992 |
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Other Directorship: |
U.P State Cement Corporation Limited |
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Name : |
Mr. P N Chhangani |
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Designation : |
Vice President (Tehcnical) |
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Date of Birth/Age : |
48 Years |
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Qualification : |
B.Sc. (Chemical Engineer) |
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Experience : |
25 Years |
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Date of Appointment : |
03.04.2006 |
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Other Directorship: |
Holtec Consulting Private Limited |
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|
Name : |
Mr. C R Biyani |
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Designation : |
Advisor (Project) |
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Date of Birth/Age : |
57 Years |
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Qualification : |
B.E. Hons (Electronics) |
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Experience : |
36 Years |
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Date of Appointment : |
24.08.2002 |
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Other Directorship: |
BFL Infotech Limited |
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|
Name : |
Mr. A B Reddy |
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Designation : |
Senior Vice President |
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Date of Birth/Age : |
59 Years |
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Qualification : |
B.Sc. (Agriculture) MBA |
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Experience : |
35 Years |
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Date of Appointment : |
25.07.2007 |
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Other Directorship: |
Seshsayee Papers and Board Limited |
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Name : |
Mr. S S Khandelwal |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.12.2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters Group |
|
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|
Indian |
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Individuals / Hindu Undivided Family |
1209441 |
3.47 |
|
Bodies Corporate |
20988316 |
60.25 |
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Public
Shareholding |
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Institutions |
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Mutual Funds/ UTI |
2032322 |
5.83 |
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Financial Institutions/ Banks |
231758 |
0.67 |
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Insurance Companies |
219388 |
0.63 |
|
Foreign Institutinal Investors |
2542999 |
7.30 |
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Non Institutions |
|
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Bodies Corporate |
1700217 |
4.88 |
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Individuals |
|
|
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Individual shareholders holding nominal share capital up to Rs. 0.100
Million |
1564275 |
4.49 |
|
Individual shareholders holding nominal share capital in excess of Rs.
0.100 Million |
456411 |
1.31 |
|
NRIs |
238080 |
0.68 |
|
OCB |
3500 |
0.01 |
|
Foreign Company |
3600000 |
10.33 |
|
Directors and their relatives |
6762 |
0.02 |
|
Clearing Members |
43756 |
0.13 |
|
Total |
34837225 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Marketing of Cement |
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Products : |
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PRODUCTION STATUS
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Units |
|
Rs. In Millions |
|
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Installed Capacity ( As
certified by the Management (based on OPC)) |
MT |
|
|
6.825 |
|
Production (Includes Trial run Production 1257 MT |
MT |
|
|
6.337 |
GENERAL
INFORMATION
|
Bankers : |
·
State Bank of Bikaner and Jaipur ·
State Bank of India ·
ICICI Bank Limited ·
IDBI Bank Limited ·
Axis Bank Limited ·
BNP Paribas ·
Standard Chartered Bank ·
HSBC ·
Citi Bank |
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Facilities : |
1)
All term Loans (Except (a) Term Loans of Rs. 1.241 Millions (Previous
year Rs. 29.639 Millions) secured by way of hypothecation of specific assets purchased
theregainst (b) Loan of Rs. 2371.567 Millions (previous year Rs. Nil) from
IDBI Bank Secured by way of change on Current Assets subservient to working
Capital Lenders ) From Banks are secured by joint equitable mortgage on all
the immovable assets ranking pari passu with the Debenture holders and are
also secured by hypothecation of all the movable assets (save and except book
debts) of the Company both present and future subject to prior charges
created and / or to be created in favour of the company’s bankers on
inventories of stock – in trade, stores and spares, book debts and other
current assets of the company for working capital facilities. The above
changes rank pari passu inter se among lenders. 2)
20-7.40% Non Cohnvertible Debentures of Rs. 4.000 Millions each
aggregating to Rs. 80.000 Millions
(Previous year Rs. 140.000 Millions) redeemable fully on 24th
July, 2008 are secured by joint equitable mortgage over all the immovable
assets and by way of hypothecation of all the movable assets (save and except
book debts) of the Company both present and future subject to prior changes
created and / or to be created in favour of the company’s bankers on
inventories of stock-in trade, stores and spares, book debts and other
current assets of the Company for Working Capital borrowings. The charges
rank pari passu with the charges created/ to be created in favour of other
first charge holders for their respective loans. The above debentures are
also secured by a legal mortgage over immovable property of the company
situated at Jamnagar (Gujarat) 3)
Working Capital borrowings from banks are secured by hypothecation of
inventories of stock-in –trade, stores and spares, book debts and other
current assets of the Company on first charge basis and on whole of movable
fixed assets of the company on second charge basis. These borrowings are also
secured by joint equitable mortgage on all the immovable assets of the
company on second chares bais.
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Banking
Relations : |
Good |
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Auditors : |
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|
Name : |
B. R Maheswari and Company Chartered Accountant |
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Address : |
New Delhi |
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Cost Auditor: |
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Name : |
K G Goyal and Company Chartered Accountant |
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Address : |
Jaipur |
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Internal
Auditors: |
|
|
Name : |
P K Ajemera and Company Chartered Accountant |
|
Address : |
Ahmedabad |
CAPITAL STRUCTURE
As on 31.03.2008
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
60000000 |
Equity Shares |
Rs. 10/- each |
Rs. 600.000 Millions |
|
1500000 |
Cumulative Preference Shaers |
Rs. 100/- each |
Rs. 150.000 Millions |
|
|
Total |
|
Rs. 750.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
34837225 |
Equity Shares |
Rs. 10/-
each |
Rs. 348.372
Millions |
Notes:
Out of above Equity Shares:
(a) 240021 Equity Shares of Rs. 10 each fully paid-up issued for
consideration other than cash in pursuance of Scheme of Amalgamation
(b) 20480 are Forfeited Equity Share and
(c) 4395000 Equity Shares issued on the surrender of detachable optional share
warrents attached with 16% unsecured Non Convertible Redeemable Debentures of
Rs. 100 each vide Board Resolution dated 05.05.1995
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
348.372 |
348.372 |
348.400 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
6379.681 |
4689.424 |
3161.500 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
6728.053 |
5037.796 |
3509.900 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
11670.732 |
8482.702 |
3259.200 |
|
|
2] Unsecured Loans |
1636.250 |
830.983 |
468.200 |
|
|
TOTAL BORROWING |
13306.982 |
9313.685 |
3727.400 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
20035.035 |
14351.481 |
7237.300 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
7599.586 |
5481.854 |
6300.000 |
|
|
Capital work-in-progress |
179.599 |
3437.525 |
977.500 |
|
|
|
|
|
|
|
|
INVESTMENT |
5910.000 |
500.000 |
0.000 |
|
|
DEFERREX TAX ASSETS |
184.610 |
37.450 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1765.747
|
1560.732 |
1129.400 |
|
|
Sundry Debtors |
493.868
|
262.717 |
182.600 |
|
|
Cash & Bank Balances |
4674.343
|
3533.090 |
745.300 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
4026.301
|
2384.180 |
681.100 |
|
Total
Current Assets |
10960.259
|
7740.719 |
2738.400 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
2361.763
|
1962.906 |
2519.000 |
|
|
Provisions |
2437.256
|
883.161 |
259.600 |
|
Total
Current Liabilities |
4799.019
|
2846.067 |
2778.600 |
|
|
Net Current Assets |
6161.240
|
4894.652 |
[40.200] |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
20035.035 |
14351.481 |
7237.300 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
20658.680 |
13679.752 |
8241.300 |
|
|
Other Income |
732.666 |
212.733 |
70.000 |
|
|
Total Income |
21391.346 |
13892.485 |
8311.300 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
3683.092 |
1888.076 |
271.400 |
|
|
Provision for Taxation |
1079.372 |
[1581.947] |
87.400 |
|
|
Profit/(Loss) After Tax |
2603.720 |
1770.023 |
184.000 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
7628.235 |
5018.921 |
727.000 |
|
|
Emplyee Cost |
0.000 |
0.000 |
278.400 |
|
|
Raw Material |
0.000 |
0.000 |
959.800 |
|
|
Excise Duty |
0.000 |
0.000 |
1293.000 |
|
|
Power
and Fuel Cost |
0.000 |
0.000 |
1373.200 |
|
|
Administrative Expenses |
352.938 |
267.595 |
1588.800 |
|
|
Misc. Expenses |
0.000 |
0.000 |
328.300 |
|
|
Purchases made for re-sale |
61.856 |
68.629 |
0.000 |
|
|
Increase/(Decrease) in Finished Goods |
[90.318] |
[20.085] |
[289.600] |
|
|
Payment to and Provision for Employees |
736.043 |
580.097 |
0.000 |
|
|
Freight and Selling Expenses |
3165.193 |
1867.355 |
0.000 |
|
|
Interest |
497.239 |
103.737 |
141.300 |
|
|
Depreciation & Amortization |
4787.586 |
4330.533 |
1639.700 |
|
|
Exceptional Items |
[388.846] |
[212.373] |
0.000 |
|
Total Expenditure |
17708.254 |
12004.409 |
8039.900 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 1st
Quarter |
30.09.2008 2nd
Quarter |
|
Sales Turnover |
|
6143.200 |
6291.800 |
|
Other Income |
|
117.700 |
335.900 |
|
Total Income |
|
6260.900 |
6627.700 |
|
Total Expenditure |
|
4113.500 |
4561.200 |
|
Operating Profit |
|
2147.400 |
2066.500 |
|
Interest |
|
170.600 |
166.700 |
|
Gross Profit |
|
1976.800 |
1899.800 |
|
Depreciation |
|
460.600 |
537.000 |
|
Tax |
|
417.700 |
304.900 |
|
Reported PAT |
|
1109.000 |
1074.900 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
PAT / Total Income |
(%) |
12.17
|
12.74 |
2.21 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
17.83
|
13.80 |
3.29 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
19.84
|
11.07 |
3.00 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.55
|
0.37 |
0.08 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.69
|
2.41 |
1.85 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.28
|
2.72 |
0.99 |
LOCAL AGENCY
FURTHER INFORMATION
History:
Subject belonging to the Calcutta-based industrialists P D Bangur and B G
Bangur is one of the largest cement producer in Rajasthan was incorporated in
the year 1979. Shree has two plants in Beawar, Rajasthan with 2.6 million tonne
installed capacity. Shree's is the largest single location manufacturer with
production in Northern India. The company markets its products under two
brands- Shree Ultra Ordinary Portland Cement (OPC) and Shree Ultra Red Oxide
Cement (ROC).
The company has undertaken new activities in the field of leasing and
hire purchase during 1994-95. The company has tied up with Christian Pfeiffer
& Company, Germany, for installing a horizontal impact crusher to pre-crush
clinker before using it in the cement mill to upgrade cement output and save
energy.
It has also tied up with IKN, Germany, to incorporate their KIDS system
in the clinker cooler to improve efficiency of the clinker cooler and save
heat. The company has been awarded by KPMG Quality Registrar, USA certificate
of ISO 9002 durning the year. In Oct.'97, the Raj Cement was commenced production.
The company has successfully commissioned its new cement plant of 1.24 million
tonne capacity and has already attained 100% capacity utilisation.
The company's modernisation and expansion plan to increase its installed
capacity from 20 to 26 lakhs TPA was implemented in December 10,2001,three
weeks before the scheduled time.
During 2001-02 the company exerise to commission a captive 36 MW thermal
power project at a cost of Rs.1200.000 Millions. An EPC contract was signed
with Thermax Limited in September,2001 and the civil work commenced in October
2001 and the project is expected to be commissioned by December,2002.
During 2004-05 the company was in the process of setting up a new plant
with a capacity of 1.2 MTPA which is scheduled to start functioning by the
third quarter of this year at Village Ras, about 32 kms away from the existing
location. This plant is designed to produce a premium grade of cement 'Bangur
Cement'. The estimated project cost was Rs.3040.000 Millions
During August 2005 the company has commissioned a 6 MW Captive Thermal
Power Plant at its cement manufacturing facility Rajasthan. The total capacity
of its Captive Thermal Power Plant has gone up from 36 MW to 42 MW. The
additional capacity would enable Company to meet requirement of power for its
upcoming 'Bangur Cement Project'.
CAPACITY
EXPANSIONS
The year 2007-08 was a landmark year as significant capacity building
programmes undertaken by the Company came upstream and the Company has now
attained a total capacity of 6.83 Million Tonnes Per Annum (MTPA) on Ordinary
Portland Cement (OPC) basis. This year, the Company saw completion of two
clinkerization units i.e. Unit-V and VI at Bangur City, Ras and two grinding
units at Khushkhera in Alwar Rajasthan near Gurgaon. All these new lines were
completed well within the budget and schedule. In fact, Unit- VI at Bangur
City, Ras was commissioned in a record time of only 14 months against industry
average of 24 months.
To meet the power requirement of these expanded capacities, the Company has
commissioned two captive power plants at Bangur City, Ras. This enables it to
continue its self reliant status for power.
The Company, to expand its business and market share in Northern India, has
further decided to put up a new clinker manufacturing facility christened Unit
- VII at Bangur City, Ras together with a grinding unit at Suratgarh,
Rajasthan.
AWARDS
The Directors have pleasure to report the following prestigious awards
conferred during the yearon the Company in recognition of its achievements in
the field of Corporate Governance, Environment Management, Energy efficiency,
Quality Excellence etc.:
- Awards by National Council for Cement and Building Materials (NCCBM)
for:
* Best Improvement in Electrical Energy Performance for the year
2005-06.
* Best Improvement in Thermal Energy Performance for the year
2006-07.
* Best Environmental Excellence in plant operation for the year
2006-07.
* 40 Second Best Quality Excellence for the year 2006-07.
* 'National Award for Energy Conservation 2007' from Ministry of Power,
Govt. of India in respect of its Unit - II for achieving second best
performance in Indian Cement Industry.
* National Safety Award (Mines) for the contest year 2004 by Ministry of
Labour & Employement, Govt. of India for its Sheopura - Kesarpura Limestone
Mines under category of Lowest injury frequency rate.
* Golden PeacockAward for excellence in Corporate Governance - 2007 from
World Council for Corporate Governance.
* 'Golden Peacock Award - 2007' in recognition of its excellent
Environment Management Practices.
* Greentech Environment Excellence Gold Award - 2007 for the second time
in recognition of its best practices in Environment Management in consonance
with its economic growth and sustainable development.
* 'Indian Manufacturing Excellence Award - 2007' by Frost and Sullivan,
an international firm engaged in bench-marking.
* 'Water Efficient Unit Award' at the 'National Award for Excellence in
Water Management 2007' summit conducted by CII - Godrej GBC.
* 'Best Employer Award - 2007' by Employers'
MANAGEMENT
DISCUSSION AND ANALYSIS
ECONOMY OUTLOOK
Indian economy has been continuously growing at an average growth rate of 8.6% in
the last four years. The acceleration continued in 2007-08 with the economy
expected to grow at 8.7%. The structural transformation which commenced with
economic reforms since 1992 has led to this economic growth from a growth rate
of around 5.5% in the Eighties to 6.5% and now 8.5%. The expected growth of
over 8% in industrial sector in 2007-08 on top of impressive growth of 9.4%
registered over previous four years is predominantly contributed by the
manufacturing and the construction sector. Increased impetus on infrastructure
development with enhanced focus on public private partnership, considered as
the road to economic progress, is gradually translating into huge investments
to plug the wide gap between required and existent infrastructure in the country.
The major factors that are driving the growth in India are rising Domestic
Consumption, booming investment activity and increased capital and labour
productivity. Sustained approach of policy makers to foster the principles of
open market has promoted competition in almost all sectors which were earlier
protected, thus giving way to large scale private investment across all
verticals. Today India's manufacturing sector despite tougher competition from
within and outside sources has consolidated and venturing into taking over
global brands and making the foreign direct investment a two way street.
India is now the second fastest growing major economy in the world and moving
to become the third largest economy in terms of purchasing power parity from
the existing fourth position. It has now entered the league of trillion dollar
economy. The buoyant economy has significantly contributed to improvement in
revenue to government exchequer with tax receipts rising by 273% in the last
five years resulting in both the fiscal and revenue deficits on a steady
downward trajectory.
CEMENT OUTLOOK
Cement industry is intricately inter-linked with the GDP thus a rising economy
indicates strong cement demand. Led by thriving housing & construction
industry and booming infrastructure investment with overall strong economy has
resulted in huge demand for cement in the country creating supply constraints..
As such, industry had to withstand some policy measures taken by Government
like removal of import duty on cement imports, increase in Excise duty, removal
of export benefit and ban on cement exports. Coupled with this, the rising
energy costs, raw material prices and freight rates etc have made serious dent
on the performance of the industry. However, the cement industry did its best
to keep pace with demand and turned out its best production and capacity
utilization numbers during the year. The year FY 07-08 saw.
* Cement production growing by 8.1 % to reach 168 million tons.
* Cement consumption growing by 9.8% to touch 164 million tons.
* Additions of new capacity to the tune of 22 million ton recording a
13.3% increase over 165.5 million ton capacity at the beginning of the
year.
* Capacity utilization achieving an all time high mark of 96% across
India.
They believe that the drivers of cement demand viz., Housing, Infrastructure
and Industrial activity all are intact. Cement demand can be expected to
maintain its 10% growth rate in the near to medium term. Cement demand in North
India clocked a strong growth of 12.2% on top of double digits growth in the
last two years. The commonwealth games, the upcoming US$ 90 Billion Delhi
Mumbai Industrial Corridor (DMIC) and the 1483 kilometer high speed Dedicated
Freight Corridor (DFC) project will boost the demand for cement in North
India
In order to meet the growing demand, over 100 million ton of new capacity is
expected to come upstream in the next 4 - 5 years. In fact, as per data
compiled by Center for Monitoring Indian Economy, total outstanding investment
in cement sector as of March 2008 is Rs. 734390.000 Millions of which Rs.
250700.000 Millions is under implementation.
The new capacity may lead to bunching of capacities in some areas in near
future disturbing the demand supply equilibrium and cause softening of prices.
With incessant rise in coal / petcoke and other input material/ services costs,
the cost of production is likely to rise significantly. Thus, bottom-lines of
the cement companies are expected to be adversely affected in the coming
years.
Eminent economists who have worked on India's Infrastructure Investment have
agreed with the concerns of the Government to the effect that prices of the
commodities like cement, steel and aluminium should be in line with long term
efficiency costs. It is important to give signals for competition in the
industry and any attempt in the price fixing should be suitably dealt with.
Shree Cements follows the strategy of pricing its product to maximize the
satisfaction of demand in the different regional and quality markets. Serious
economic analysis has also established that to keep up long term supplies at
efficiency prices, manufacturers in the infrastructure industries have to be
given adequate returns to leverage labour efficiencies. The company is happy to
report that the era of reforms in India has given powerful incentives in this
direction and it is sure that Government support for this vital sector of the
economy and its future goal as it powers itself to be the third largest economy
of the world will always be available.
COSTS
Raw Materials
Company saw rising costs in almost all its raw materials. Fly Ash cost also
went up during the year. However, investment in silos and other infrastructure
incurred at power plant sites and with better inventory management, Company
could mitigate the impact of rising fly ash cost to some extent. Also the
Company has now started using wet fly ash as a result of much needed drying
equipment to ensure adequate availability of fly ash to maximize production of
Portland Pozzolona Cement. Shree Cement is also trying to reduce cost by
judicious monitoring of raw mix composition, use of alternative raw materials
and innovative work practices.
Power & fuel
Petcoke used as fuel in cement plant and for power generation, saw its price
rising significantly during the year. The Basic Price of Petcoke has jumped 59%
by end of the year thereby adversely effecting the cost of production. Power
and Fuel cost went up 20% to Rs. 586/- per ton from Rs. 487/- per ton last
year. Company's Power consumption also rose from 73 kwh/ton of cement to 79
kwh/ton while fuel consumption increased from 740 Kcal/kg of clinker to 773
Kcal/kg. The quantitative increases are mainly due to improvement in quality of
the product which involved finer grinding. The additional cost was well
recovered through better realisations. Commissioning of new units and the
resultant stabilization during the year also led to some increase in above
consumption levels. Major initiatives taken during the year to reduce the power
& fuel Cost were:-
To economize power cost and optimally utilize its power plant capacity,
the Company commenced wheeling its captive power from Beawar and Ras to its
grinding units at Khushkhera thereby replacing costly grid power.
Successfully implemented the waste heat recovery project to utilize waste heat
extruded from its pre-heater in Unit I at Bangur Nagar, Beawar to reduce the
cost as well as C02 emission.
Freight
Freight cost has gone up mainly on account of change of nature of sales from
Ex-works to FOR and rising petroleum product prices. The increased cost on
account of change of nature of sales has been neutralized by increase in
realization. However, efficient route management and delivery mechanism enabled
the company to optimize freight costs.. Company made increasing use of its
railway siding at Bangur Nagar Beawar and increased its share of rail
dispatches from Unit I & II from 40% to 50%. The setting up of Khushkhera
grinding unit close to marketing center and fly ash supply source has also
contained the freight cost.
FINANCE
The Company maintained its high credit ratings during the year organising for
higher debt required for expanded operations. With the hardening of interest
rates, its cost of borrowing saw a rise to 8.52% against 7.77% last year. This
is still quite competitive compared to prevalent interest rates. The High
Credit Rating of the Company enabled it to effectively use MIBOR linked
borrowing instruments to reduce the interest cost for working capital.
SALES & MARKETING
Company's well articulated marketing strategy of consolidating market share
with innovative brand management practices helped improve its market share from
13.93% to 16.36% in the North India market. It continued its leadership
position in the markets of Rajasthan, Delhi and Haryana.. The three popular
brands Shree Ultra Jung Rodhak, Bangur Cement and Tuff Cemento, continued to
attract the consumers. The capacity augmentation drive has now come to bear
fruit. In the last quarter of 2007-08, Company attained the highest market
share in entire North India. With new capacities into its fold and strong brand
management, the company aims to further consolidate its market share.
CAPACITY EXPANSION
Following were the additions made during the year:-
* Two Grinding Units at Khushkhera (Rajasthan), near Gurgaon
* Two Clinkerisation Units (Unit V and VI) at Bangur city, Ras and
* 2 Captive Power Plants at Bangurcity Ras- enabling Company to maintain
its self reliant status in power.
Unit VI at Bangur city, Ras was commissioned in a record time of 14 months
against industry average of 24 months. To further augment its market share, the
company has decided to set up another clinkerisation unit (Unit VII) at Bangur
city, Ras with grinding facility at Suratgarh, Rajasthan. Shree Cement is
continuously on a lookout for suitable investment opportunities both within and
outside India.
SUSTAINABILITY-TRIPLE
BOTTOM-LINE APPROACH
Enhancement of corporate value through innovation and sound business practice
is the cornerstone of the company's commitment to corporate sustainability.
Company always strives to integrate the economic, environmental and societal
aspects of its business to achieve sustained financial success, safeguard the
environment and develop the Company's reputation as a respected corporate
citizen. In pursuit of Sustainable Development, the company issued its third Corporate
Sustainability Report highlighting the work it has done across the three
dimensions of the triple bottom line. The report, accredited by Ernst and
Young, a leading international firm, was the first in the Indian Cement
Industry prepared in accordance with the Global Reporting Initiative's (GRI)
latest 'G3' guidelines and was accorded highest application level 'A+' rating
by GRI.
Company's contribution towards sustainable development during the year is
described as under: -
a) Economic Performance:
Shree Cement has recorded all round increase in its production, revenue
and profitability. It has maintained its cost and economic efficiency through
consistent optimization and innovative practices.
As a result of growing operations the business opportunities for
different stakeholders have also been growing thus contributing to growth of
local and national economy. The Company's contribution to exchequer has also
risen by 44% to Rs. 6820.000 Millions.
b) Environment Performance:
Initiatives undertaken during the year included:-
Waste Heat Recovery Project: The Company successfully commissioned waste
heat recovery project utilizing the waste gases from its pre-heater of Unit I
to generate steam which can be used for power generation and in the existing
power plant significantly reducing emission levels. The project bears testimony
to the commitment of the company towards maintaining the ecological balance. It
serves multiple purpose of:-
* Conserving the fast depleting fossil fuels which otherwise would have
been needed for power generation.
* Saving of water which is invaluable in this arid zone by eliminating
the usage of water in cooling the exhaust gases
* Saving of C02 emission from use of fossil fuels (i.e. pet coke), which
otherwise would be used to generate equivalent steam
Company now plans to install similar Waste Heat Recovery projects in its
other units.
Use of Agro waste:- To conserve the depleting natural resources, the company
put added thrust towards utilization of renewable sources such as agro waste
which was used during the year for power generation in its 3.5 MW power plant.
The use of Agro waste will also be tried out in other locations and already the
Agro waste feeding system, which was installed at 3.5 MW TG has been dismantled
for use at Ras for this purpose.
CDM Project:- Company's Clean Development Mechanism (CDM) project 'Optimal
utilization of Clinker' has the distinction of being the first such project in
World Cement industry to get the registration by United Nations Framework
Convention on Climate Change (UNFCCC). The project activity involves reduction
in clinker usage and thereby reduction in C02 emissions and helps in gainful
use of fly ash generated by Power plants, which is a hazardous waste causing
air and water pollution. Company has incurred considerable expenditure for
storage, collection & transportation of fly ash by construction of silos
and other facilities at its cost at the power plant site and deployment of
specially designed tankers for total pollution-free transportation. Project has
already delivered 0.350 Millions Certified Emission Reductions (CERs) upto
crediting period 31.12.2006, out of which 0.210 Million CERs have been sold
during the year generating revenues of Rs. 170.800 Millions for the Company.
For crediting period 1.1.2007 to 31.3.2008, Company expects to generate approx.
1.0 lac CERs.
c) Social Performance:
Company has been giving due consideration to the interests of the stakeholders,
including shareholders, customers, employees, suppliers, local communities and
other organizations. Social development activities during the year were as
under:
Corporate Social Responsibility:- In its endeavor towards social upliftment,
notable measures taken by the company are contribution towards setting up a
neurosurgical centre at Jawaharlal Nehru Hospital, Ajmer, Renovation of Budha
Pushkar, a religious site and financial aid to hospitals and other
institutions. Company arranges regular visit of doctors in the nearby villages
for medical checkup of villagers. Through its Ladies Club and Children Club,
the Company regularly undertakes welfare activities for local community like
eye camps, dental check ups, awareness campaigns, educational support etc. An
annual cultural fest organized on 26th February, acts as a great cultural
celebration for the employees as well as the local community.
Occupational Health and Safety:- Safety and occupational health is an
important area for the company as it strives to be a Zero accident work place.
The company's health and safety policies are widely circulated internally to
ensure appropriate attention to health and safety hazards, preventive measures
and awareness to build a safe working environment. Training related to safety
aspects is provided to all employees. A safety meeting is conducted on every 1
st day of the month to review measures related to health, hygiene and safety
and improvement of the working environment. A special safety committee with
equal participation of management and workers discusses these issues on monthly
basis. Annual medical checkup is mandatory for all employees.
Human Resources:- The Company endeavours to be recognized as the best place for
the best people to do the best work. Company ensures free and fair but
competitive working environment that rests on the principle of meritocracy,
executional excellence and professional integrity. Company participated in the
'Best Companies to work for in India' survey conducted by Business Today, Mercer
and TNS and out performed in 9 parameters against the best. In its efforts to
improve competence of its employees, Company engaged Ma Foi Consultants, an
international HR firm, to carry out a study where each employee provided vision
for himself and the company over 5 years. The vision was aligned with the
existing competency to study the gap and to identify the measures required to
plug the gap for vision attainment. The company was awarded the 'Best Employer
2007' award by the Employers' Association of Rajasthan.
Notes on Accounts
1.
Contingent liabilities not provided for:
-
Counter-guarantees in favour of banks: Rs.
343.095 Millions (Previous Year Rs. 138.159 Milions)
2. Estimated amount of contracts remaining to be executed on capital account
(net of advances ) Rs. 909.437 Millions (Previous Year Rs. 2444.816 Millions)
3.
Fixed Assets include Rs. 16.386 Millions
(Previous Year Rs. 3.552 Millions) paid towards cost of land in respect of
which conveyance deed are pending execution in favour of the company.
4.
Installments of secured Loans falling due for
repayment in next 12 months amounting to Rs. 890.076 Millions (Previous year
Rs. 715.250 Millions)
5.
Capital Work-in-Progress includes
Pre-operative expenses of Rs. 1.534 Millions (Previous Year Rs. 163.508
Millions which includes depreciation of Rs. 0.025 Million on assets during
construction period (Previous Year Rs. 39.886 Millions) and exchange
fluctuations of Rs. Nil (Previous Year Rs. 0.048 Million)
6.
Hitherto, while computing the income tax
provision, the Company had considered sales tax incentives as capital receipts
not liable to tax, based on expert advice
During the year, the above tax treatment has
been reconsidered in view of the contrary stand taken by assessing authority
(for which appeal has been filed) and as a matter fo prudence the Company has
recognized tax provision thereon. The company has also recognized tax liability
of Rs. 150.746 Millions of previous year which is included in prior period tax
expenses
7. Expenditures on consideration of assets for Company’s use at premises by
Government / Local Authorities / Others is being charged to Profit and Loss
Accounts in the year incurred with effect from current year, whereas such
expenses wer capitalized in previous years. Consequently, profit for the year
is lower by Rs. 388.846 Millions which included Rs. 84.764 Millions pertaining
to previous year.
8. The company has restated the revalued assets at their historical cost
which has resulted in reduction of gross block by Rs. 2273.031 Millions accumulated
depreciation by Rs. 1685.631 Millions and increase in profit for the year by
Rs. 45.054 Millions
9. Disclosure of Sundry Creditors under Current Liabilities is based on the
information available with the company regarding the status of the suppliers as
defined under the “Micro, Small and Medium Enterprises Development Act, 2006
and there are no delays in payments to Micro, Small and Medium Enterprises as
required to be disclosed under the said Act. This has been relied upon by the
Auditors
10. Employee Benefits:
(A) contribution to denined contribution plans recognized as expenses for the
year as under:
|
|
Rs. In Millions |
|
Superannuation |
38.269 |
|
Employees’ Pension Scheme |
13.310 |
|
Provident Fund |
21.991 |
|
Total |
732.570 |
Fixed Assets:
·
Freehold Land
·
Leasehold Land
·
Land and Site Development
·
Buildings
·
Plant and Machinery
·
Railway Siding
·
Furniture, Fixture and Office Equipments
·
Vehicles
AS PER WEBSITE:
Profile:
Subject is an energy conscious & environment friendly business
organization. Having Nine Directors on its board under the
chairmanship of Shri.B.G. Bangur, the policy decisions are taken under the
guidance of Shri. H.M. Bangur, Managing Director. Shri. M.K.Singhi, Executive
Director of the Company, is looking after all day-to-day affairs. The company
is managed by qualified professionals with broad vision who are committed to
maintain high standards of quality & leadership to serve the customers to
their fullest satisfaction.The board consists of eminent persons with
considerable professional expertise in industry and field such as banking, law,
marketing & finance.
Information
Technology:
Besides managing information and knowledge,businesses today
also need to work on processes that improve organizational efficiency,
functioning and decision-making. The IT vision at Shree goes beyond information
to impact business processes, especially in a scenario where the company
intends to diversify operations into multiple locations.
Shree earlier worked on in-house solutions on the latest technology platforms
to improve interface with distributors at one end and suppliers at the other.
But,in recent times, the company is also concentrating on making operations and
processes more efficient,viable and replicable at multiple sites.
Towards better logistics
The IT people at Shree have a cross-functional agenda and approach. For
instance, working with the logistics team, they implemented a Transport Freight
Bidding System, a first of its kind in the cement industry. In this system
based on the reverse auction model, transporters make online bids on
consignments available on different routes. The lowest bid for a particular
route wins that consignment. This lowered average freight rates and saved on
total freight payments for the company.
At its Ras location, the company launched an integrated, RFID (Radio Frequency
Identification) based, vehicular access system for truckers. Right from the
time the truck checks in at the entrance, for outbound loading or inbound
unloading, its movement till it checks out at the exit is governed by an
automated and RFID activated system. This helps cut truck turnarounds and
improves truck availability at the plant.
Robust systems
To make the system reliable, the backend has been made robust and failsafe.
V-SAT, Leased Lines and Broadband connectivity allow seamless online
communication between company locations, Kolkata, Beawar, Ras and more than 120
stock points across the country. To facilitate operations and coordination
between the companys plants at Beawar and Ras, redundant and backup
connectivity has been established on both leased line and wireless (RF) Radio
Frequency technology. To meet the demands of a rapidly expanding company,
networks and servers are geared with cutting-edge network management tools that
allow centralised management and monitoring of critical equipment, software and
databases.
Knowledge sharing
Intranet Discussion Boards and web-based Corporate Blogging were introduced to help
people exchange information, share knowledge, pen thoughts and boost morale in
general. For instance, technical problems or queries could now be addressed by
someone to a cross-section of people across the company rather than those in
immediate touch. This helps bring forth new answers and fresh
approaches.Departmental initiatives and thrusts could now be communicated to
everyone with the minimum need for meetings. Wi-fi spots have been set up at
different places inside the plant for mobile internet connectivity on laptops.
A high IT penetration among Shree people - with desktops, laptops and printers
available at its plant and depot locations -promotes connectivity and
efficiency throughout the organisation.
For the benefit of the lay public and visitors to the plant, information kiosks
with LCD touch screens have been installed at conspicuous locations inside the
plant.
Shrees expansion plans are based on replicating existing technology at
different sites. To help new project managers with blueprints, layouts and
technical diagrams, scanned images are available through the intranet for
various levels of authorisation.
ERP implementation
network that delivers online, real-time access to information and processes.
Towards this end, the company is adopting the Oracle e-Business Suite ERP with
Tata Consultancy Services as the implementation partner. Imbibing the best
practices of companies worldwide, this ERP suite will impact all processes of
the company, right from procurement, through operations, to sales and
distribution. It involves a complete re-engineering of business processes to
make them more high-performing and tuned towards the global order.
Progressive
Management:
Shree Cement supplemented its
attractively low capital investment per tonne with one of the lowest
manufacturing costs in the Indian cement industry.
Starting with 6 lac tonnes per annum of cement in 1985, the
capacity was upgraded to 7.6 lac tonnes in 1993. Second plant with installed
capacity of 1.24 million tonnes per annum was commissioned in 1997, in record
time of 18 months, raising total capacity to 2.0 MTPA. Even during recession in
the industry, it was possible for it to enhance capacity further to 2.6 MTPA
due to its strategic location and better brand image and is the largest single
location plant in North India.The company's installed capacity accounted for 15
percent of Rajsthan's total capacity in 2002-03 and 2.5 percent of Indian's
production in 2002-03. Cement production increased 3.42% from 2.747 million
tonnes in 2002-03 to 2.841 million tonnes in 2003-04.
Once again, the low cost was the result of scores of
initiatives across all levels within the company. Some resulting in small
savings. Some in big. But each primarily driven by the belief that what was
being done could be done better.
Cooler fans were configured to a higher capacity so that heat could recuperate
better. A better raw mix helped Shree reduce the proportion of high cost
limestone and saved the company Rs 4.400 Millions.
·
Achievements
·
Capacity Utilization
·
Manufacturing cost Cement
and clinker production
·
Power consumption
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.49.69 |
|
UK Pound |
1 |
Rs.72.96 |
|
Euro |
1 |
Rs.63.46 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
70 |
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 |
|