MIRA
INFORM REPORT
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Report Date : |
15.12.2008 |
IDENTIFICATION
DETAILS
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Name : |
HISAR METAL INDUSTRIES LIMITED |
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Registered Office : |
Near I D C Road, Hisar – 125005, Haryana |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
14.05.1990 |
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Com. Reg. No.: |
30937 |
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CIN No.: [Company
Identification No.] |
U74899HR1990PLC030937 |
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Legal Form : |
Public Limited Liability Company. The Company’s Shares Are Listed On
Stock Exchanges. |
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Line of Business : |
Manufacturer of Stainless Steel Strips. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 510000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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. Business is active. No complaints have been
heard. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office : |
Near Industrial Development Colony Road, Hisar – 125005, Haryana,
India. |
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Tel. No.: |
91-1662-220067 / 220367 / 220738 |
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Fax No.: |
91-1662-220265 |
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E-Mail : |
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Website : |
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Corporate Office : |
Delhi Office 18, Central Market, Punjabi Bagh West, New Delhi (India) |
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Tel. No.: |
91-11-25220005-7 / 25228608 / 25228609 |
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Fax No.: |
91-11-25227023 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Abhiram Tayal |
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Designation : |
Managing Director |
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Name : |
Mr. Anubha Tayal |
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Designation : |
Director |
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Name : |
Mr. Shital P. Jain |
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Designation : |
Director |
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Date of Birth/Age : |
62 years |
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Qualification : |
Advocate |
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Chairmanship/Membership of the Board
Committees : |
Hisar Metal Industries Limited Chairman of the Audit Committee & Remuneration Committee |
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Name : |
Mr. Sajjan Singh |
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Designation : |
Director |
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Name : |
Mr. M.P.Jindal |
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Designation : |
Promoter Director |
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Date of Birth/Age : |
59 years |
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Qualification : |
Graduate |
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Experience : |
37 years experience as industrialist. |
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Outside Directorship : |
Jindal Industries Limited, Hisar -Director Adhipathi Properties & Investments Private Limited
- Director Pridhi Properties & Investments Private Limited - Director Ravindra Tubes Limited - Director |
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Chairmanship/Membership of the Board
Committees : |
Hisar Metal Industries Limited Chairman of the Board Remuneration Committee - Member |
KEY EXECUTIVES
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Name : |
Mr. V.K.Jain |
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Designation : |
Company Secretary |
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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(A) Shareholding of Promoter and Promoter Group 2 |
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(1) Indian |
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(a) Individuals / Hindu undivided family |
1686021 |
46.834 |
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© Bodies Corporate |
414200 |
11.505 |
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(2) Non – Institutions |
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(a) Bodies Corporate |
193606 |
5.378 |
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(b) Individuals – |
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i.Individual shareholders holding nominal share capital up to Rs.0.100
million |
789782 |
21.99 |
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ii. Individual shareholders holding nominal share capital excess of
Rs.0.100 million |
515243 |
14.312 |
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© Any Other (specify) (NRI) |
1148 |
0.032 |
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Grand Total |
3600000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Stainless Steel Strips. |
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Products : |
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GENERAL
INFORMATION
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Bankers : |
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Facilities : |
Secured Loans As
On 31.03.2008
Unsecured Loans As
On 31.03.2008
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Ram Sanjay and Company Chartered Accountants |
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Address : |
95-97, Green Square Market, Hisar – 125001, Haryana, India. |
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Associates/Subsidiaries : |
Ř Ravindra Tubes
Limited, Hisar Ř Quality
Foils India Private Limited, India. |
CAPITAL STRUCTURE
AS ON 31.03.2008
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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5000000 |
Equity Shares |
Rs. 10/- Each |
Rs.50.000
Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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3600000 |
Equity Shares |
Rs. 10/- Each |
Rs. 36.000 Millions |
Note:
of the above shares 306960 Equity shares of Rs.10/- each have been
issued as fully paid up bonus shares by capitalization of surplus in Profit
& Loss A/c.
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 |
36.000 |
36.000 |
36.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
66.198 |
58.980 |
44.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
102.198 |
94.980 |
80.600 |
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LOAN FUNDS |
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1] Secured Loans |
309.412 |
342.352 |
284.600 |
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2] Unsecured Loans |
59.889 |
47.648 |
68.400 |
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TOTAL BORROWING |
369.301 |
390.000 |
353.000 |
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DEFERRED TAX LIABILITIES |
16.159 |
17.715 |
0.000 |
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DEALER SECURITY |
66.000 |
28.000 |
0.000 |
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TOTAL |
553.658 |
530.695 |
433.600 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
139.783 |
156.980 |
166.200 |
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Capital work-in-progress |
1.311 |
0.000 |
01.200 |
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INVESTMENT |
0.084 |
1.184 |
00.100 |
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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 |
154.783
|
177.339 |
131.500 |
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Sundry Debtors |
364.169
|
279.443 |
177.100 |
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Cash & Bank Balances |
26.223
|
11.529 |
03.900 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
34.477
|
29.991 |
26.200 |
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Total
Current Assets |
579.652
|
498.302 |
338.700 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
162.862
|
121.153 |
68.300 |
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Provisions |
4.310
|
4.618 |
04.300 |
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Total
Current Liabilities |
167.172
|
125.771 |
72.600 |
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Net Current Assets |
412.480
|
372.531 |
266.100 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
553.658 |
530.695 |
433.600 |
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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 |
1728.748 |
1952.184 |
1238.700 |
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Other Income |
0.000 |
0.000 |
33.100 |
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Total Income |
1728.748 |
1952.184 |
1271.800 |
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Profit/(Loss) Before Tax |
15.784 |
28.332 |
09.000 |
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Provision for Taxation |
4.355 |
9.742 |
1.700 |
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Profit/(Loss) After Tax |
11.429 |
18.590 |
07.300 |
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Earnings in Foreign Currency : |
146.842 |
171.075 |
NA |
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Expenditures : |
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Manufacturing Expenses |
115.595 |
131.608 |
35.800 |
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Administrative Expenses |
12.004 |
15.676 |
15.600 |
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Raw Material Consumed |
1251.688 |
1465.372 |
900.300 |
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Increase/(Decrease) in Finished Goods |
29.739 |
(22.543) |
25.800 |
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Power & Fuel |
0.000 |
0.000 |
62.100 |
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Depreciation & Amortization |
15.576 |
15.293 |
09.300 |
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Other Expenditure |
288.362 |
318.446 |
213.900 |
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Total Expenditure |
1712.964 |
1923.852 |
1262.800 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 |
30.09.2008 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
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Sales Turnover |
|
395.100 |
290.500 |
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Other Income |
|
07.500 |
03.300 |
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Total Income |
|
402.600 |
293.800 |
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Total Expenditure |
|
378.300 |
281.800 |
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Operating Profit |
|
24.300 |
12.000 |
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Interest |
|
15.300 |
10.900 |
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Gross Profit |
|
09.000 |
01.100 |
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Depreciation |
|
03.900 |
04.000 |
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Tax |
|
02.200 |
00.500 |
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Reported PAT |
|
03.400 |
(02.800) |
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity
Ratio |
4.33 |
4.39 |
4.64 |
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Long
Term Debt-Equity Ratio |
4.33 |
3.53 |
2.86 |
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Current
Ratio |
3.30 |
2.28 |
1.62 |
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TURNOVER
RATIOS |
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Fixed
Assets |
7.31 |
8.49 |
5.58 |
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Inventory |
10.18 |
12.60 |
7.65 |
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Debtors |
5.25 |
8.53 |
8.02 |
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Interest
Cover Ratio |
1.04 |
1.53 |
1.25 |
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Operating
Profit Margin(%) |
4.22 |
4.97 |
4.38 |
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Profit
Before Interest And Tax Margin(%) |
3.29 |
4.19 |
3.62 |
|
Cash
Profit Margin(%) |
1.09 |
1.74 |
1.34 |
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Adjusted
Net Profit Margin(%) |
0.17 |
0.96 |
0.59 |
|
Return
On Capital Employed(%) |
10.60 |
17.22 |
10.09 |
|
Return
On Net Worth(%) |
2.94 |
21.18 |
9.24 |
LOCAL AGENCY FURTHER
INFORMATION
HISTORY
Incorporated on 14 May
'90 as a private limited company, Hisar Metal Industries set up a project for
manufacturing cold rolled stainless steel strips. It was converted into a
public limited company in Jun.'92. Commercial production commenced at its plant
in Hisar, Haryana, in Mar.'91 with an installed capacity of 1800 tpa, which was
raised to 3600 tpa in 1993-94. The company was promoted by M P Jindal and Abhi
Ram Tayal.
The company expanded its operations by enhancing the installed capacity of cold
rolled stainless steel from 3600 to 6000 tpa in 1995. The project was part
financed by a public issue made by the company in Nov.'95.
The company is going to setup a Bright Annealing and a 6 Hi Mill which has good
potential to boost exports and domestic sale
MANAGEMENT DISCUSSION AND ANALYSIS:
Industry Structure and
Developments:
Stainless Steel (SS), a combination of Steel, Nickel and Chromium is recognized
for its anti-corrosive nature, long life glossy outlook. Today it has emerged
as the specialty version of common steel. Almost 70% of the country's demands
comes from Kitchen segment and the rest 30% comes from industrial and other
segments. In 2007, the world production of Stainless Steel increased by 9.1%
while the Asian Region showed the strongest increase at 21% (China +54% and
India +7%). Indian producers anticipate demand to multiply in near future due
to the demand from Railways, infrastructure projects including those from
Stadia, Shopping malls, high rise buildings etc.
OPPORTUNITIES:
India and China share 40% of the world's population while China has surged
ahead in stainless steel per capita consumption (1.6 Kg. in 2000 to 5.3 Kg.in
2006) India's per capita consumption is far lower 1.6 Kg. Even in developed
countries the per capita consumption of S.S. is in the range of 15-20 Kg. This
highlights the potential for high growth in view of higher expected growth in
GDP, higher industrial production, existing low per capita consumption,
availability of key natural resources such as manganese and chrome ore and
competitive manpower costs. While in automotive and transport sectors the major
countries share nearly 14%, the construction sector takes around 12% of
stainless steel. Against this India's present consumption in both these segment
put together is just one percent. Therefore the industry possesses vast
potential especially looking at the fast growing consumption.
The Company has 3 Nos. of 4 Hi Mill and One 6 Hi Mill and it is now planning to
setup one more 6 Hi Rolling Mill to produce wider width thinner material.
Besides, they always look forward to cope with any technological
advancement.
THREATS:
Nickel accounts for more than 60% of the cost of making the 300 series of
stainless steel and therefore, the volatility in its price has always been
affecting the growth of S.S. although it is likely to settle down in the second
half of the financial year 2008. Indian Stainless Steel manufacturers for the
past few years have been focusing on low nickel stainless steel grades in a bid
to offset rising costs of the metal. Morever, there are other deterrents also
like rise in rupee value, poor availability of power and the concern of the
government over rising steel prices.
The poor availability of power, the fluctuations in the prices of raw materials
due to fluctuation in the paces of nickel and chrome are the main reasons for
lower performance during the financial year 2007-08.
OUTLOOK:
Stainless steel has gained impressive recognition and achieved quantum progress
over the past decade. With the improvement in the lifestyle of the average
Indian and the burgeoning middle class with a higher propensity to spend on
life style products the per capita consumption of S.S. in India is expected to
improve significantly. Steel without stainless recorded only 1.38% growth and
so did other metals aluminium, copper, zinc and lead within the range of 2.99%
to 1.26% while there is 5.20% growth in Stainless Steel. The rising costs of
the key inputs such as Chromium and nickel have triggered substitution efforts
world-wide with low nickel content grades (Cr-MN 200 series) and ferritic
grades gaining momentum. Indian Stainless Steel Manufacturers for the past few
years have been focusing on low nickel stainless grades.
During the financial year 2007-08, the low nickel material production is the
56% of the total production of the financial year 2007-08.
RISK AND CONCERNS:
Though India is a small importer of Stainless Steel now, rising input costs is
affecting the competitiveness of the industry. The imports have grown by 50% It
is suggested that custom duty on CRC should be increased so that India does not
turn into a dumping ground for Chinese manufacturers. The major factors for the
lower per capita consumption of S.S. in India are lack of awareness about its
use and benefits, non-availability of steel fabricators, under developed
production technology etc. Though ISSDA's efforts has helped to increase the
consumption of S.S. in the country, more efforts are required from the Industry
players.
The growing demand from the infrastructure industries is expected to increase
the demand for their product and they hope to have better performance in the coming
financial year.
FINANCIAL PERFORMANCE WITH RESPECT
TO OPERATIONAL PERFORMANCE:
This year the production and turnover both are down by 22% and 21% respectively
in terms of volume. The Company has produced 9407 M.T. of prime CRSS Strips as
compared to 12083 M.T. in the previous financial year while the Company has
sold 9549 M.T. of prime CRSS Strips as compared to 12084 M.T. in the previous
financial year. The turnover in terms of value is down by 11% to Rs.17287
Lac.
The Profit before tax has decreased to Rs.15.800 millions and Profit after tax
has decreased to Rs.11.400 millions
down by 44% and 38.5% respectively.
Capital Expenditure during the year stood to Rs. 2.300 millions
The Reserve and Surplus stood to Rs. 66.200 millions.
The Earning per share is Rs. 3.18 and the Book value per share is
Rs.28.39.
The Board of Directors have recommended a dividend of 10% for the
financial year 2007-08.
COMPANY'S BUSINESS
GROWTH AND PROSPECTS
This year the performance is not good although satisfactory. The production is down by 22% and the Sales in terms of quantity by 21%.The Sales in terms of value is down by 11% approx. to Rs. 1728.700 millions and the result is that the PBTand PAT both are down by 44% to Rs.157.84 and 38.5% to Rs.1143.000 millions respectively. The reasons are price fluctuation in the raw material throughout the year causing poor demand of their finished product, poor export demand and poor availability of power throughout the year. They hope to do better in the coming financial year.
EXPENDITURE ON NEW
PROJECTS AND SUBSTANTIAL EXPANSIOAN
Expenditure
directly relating to construction activity is capitalized. Indirect expenditure
incurred during construction period is capitalized as part of the indirect
construction cost to the extent to which the expenditure is indirectly related
to construction or is incidental thereto. Other indirect expenditure (including
borrowing costs) incurred during the construction period, which are not related
to the construction activity nor is incidental thereto are charged to the
Profit and Loss Account. Income earned during construction period is deducted
from the total of the indirect expenditure.
All direct capital expenditure
on expansion is capitalized. As regards indirect expenditure on expansion, only
that portion is capitalized which represents the marginal increase in such
expenditure involved as a result of expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the asset beyond
its originally assessed standard of performance.
FIXED ASSETS
- Shed and
Building
- Plant and
Machinery
- Generator
- Vehicles
- Furniture and
Fixture
- Office
Equipments
- Computer
- Land
- Land (Ntpc)
- Land (3)
- Land (4)
CONTINGENT LIABILITIES AS ON 31.03.208
|
Particulars |
Rs. In Millions |
|
|
|
|
a) Cheques/Bills/LCs/FLCs discounted with Company's Banker |
78.740 |
|
b) Guarantee issued by banker for which counter Guarantee given by the Company. |
1.198 |
|
c) Debts not acknowledge as debt |
|
|
i) In respect of Excise Duty |
0.385 |
|
ii) In respect of Electricity |
0.210 |
|
iii) In respect of Sales Tax |
0.667 |
|
d) Capital Commitments (Net of Advances) |
37.526 |
|
e) Local Area Development Tax |
4.333 |
AS PER WEB SITE DETAILS
COMPANY PROFILE
Subject was set up at Hisar in the year 1991 to produce High Precision, Ultra Thin Stainless Steel Strips, located in the state of Haryana, 160 kms. from New Delhi, the capital of India. Hisar is popularly known as the ‘Stainless Steel City of India’.
Over the years, Hisar Metal has achieved a phenomenal growth. Utilising
state-of-the-art-technology and high precision imported machinery, they are
able to manufacture ultra thin, upto 0.05mm, high precision Stainless Steel
Strips with dimensional accuracy, excellent flatness and smooth surface finish.
Backed by a dedicated, skilled technical workforce and a flair to excel in
providing services and quality made it possible for Hisar Metal to stand out as
one of the leading suppliers of high quality Stainless Steel Strips to the
Industry, domestic as well overseas.
To evolve, is the only way to stand against the fierce onslaught of global
competition. Undaunted for growth has never allowed slightest leniency in
obeying their stringent quality control, and pursuing dynamic Research and
Development.
Perseverance, die hard quality consciousness, further augmented their business
acumen and empowered us to meet demanding international standards.
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.48.71 |
|
UK Pound |
1 |
Rs.72.85 |
|
Euro |
1 |
Rs.64.70 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
50 |
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 |
|