MIRA
INFORM REPORT
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Report Date : |
14.01.2008 |
IDENTIFICATION
DETAILS
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Name : |
KUDREMUKH IRON AND STEEL COMPANY LIMITED |
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Registered Office : |
Kiocl Main building., II Block , Koramangala, Bangalore-560 034,
Karnataka |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
23.06.1995 |
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Com. Reg. No.: |
018118 |
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CIN No.: [Company
Identification No.] |
U02710KA1995PLC018118 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRK01100B |
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Legal Form : |
A closely held public limited liability company. |
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Line of Business : |
Manufacturers of Pig Iron, Auxiliary Products and Slag. |
RATING &
COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Status : |
Government Company – Moderate |
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a Government of India company and continue to incur substantial losses. Its payment are usually correct and as per commitments. Trade relations are fair. Lenders and creditors can feel confident of
Government’s exposure to the company
and can be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office / Factory: |
Kiocl Main Building, II Block, Koramangala, Bangalore-560 034,
Karnataka, India |
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Tel. No.: |
91-80-25531483/25537968 |
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Fax No.: |
91-80-25537634 |
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Website : |
DIRECTORS
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Name : |
Mr. P. Ganesan |
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Designation : |
Chairman |
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Name : |
Mr. K. P. Pandian |
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Designation : |
Director |
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Name : |
Mr. R. K. Gupta |
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Designation : |
Director |
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Name : |
Mr. R. K. Zaroo |
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Designation : |
Director |
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Name : |
Mr. P. N.
Viswanathan |
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Designation : |
Director |
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Name : |
Mr. M Sengupta |
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Designation : |
Director |
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Name : |
Mr. K Chandrayya |
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Designation : |
Director |
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Name : |
Mr. Navin Soi |
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Designation : |
Director |
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Name : |
Mr. Sreeman NS |
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Designation : |
Director |
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Name : |
Mr. N Kini |
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Designation : |
Director |
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Name : |
Mr. K Swaminathan |
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Designation : |
Director |
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Name : |
Mr. V Nanda Kumar |
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Designation : |
Director |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of
Pig Iron, Auxillary Products and Slag |
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Products : |
v Pig Iron – 7201.10 v Auxillary Products v Slag |
PRODUCTION STATUS
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Particulars |
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Unit |
Installed Capacity |
Actual Production |
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Pig Iron |
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Tonnes |
216,262.00 |
118,630.00 |
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Auxiliary Products |
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Tonnes |
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11,315.90 |
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Slag |
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Tonnes |
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29,969.00 |
GENERAL
INFORMATION
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No. of Employees : |
224 |
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Bankers : |
State Bank of India, Bangalore Commercial Branch, Hudson Circle, Bangalore - 560 001 |
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Facilities : |
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Banking Relations
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-- |
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Auditors : |
M/s Dagliya
& Company Chartered Accountants |
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Address: |
'L' Block Unity Buildings,
JC Road, Bangalore - 560 002 |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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135,000,000 |
Equity Shares |
Rs.10/- Each |
Rs.1350.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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200000 |
Equity Shares |
Rs.10/- Each |
Rs.2.000 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
0.100 |
0.100 |
0.002 |
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2] Share Application Money |
0.000 |
0.000 |
525.499 |
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3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
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4] (Accumulated Losses) |
(1221.500) |
(1105.100) |
(494.824) |
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NETWORTH |
(1221.400) |
(1105.000) |
30.677 |
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LOAN FUNDS |
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1] Secured Loans |
3280.400 |
3363.800 |
2561.707 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
3280.400 |
3363.800 |
2561.707 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
2059.000 |
2258.800 |
2592.384 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2258.400 |
2416.500 |
2493.120 |
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Capital work-in-progress |
1.600 |
1.600 |
0.000 |
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INVESTMENT |
0.000 |
0.000 |
0.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
1158.700 |
658.400 |
805.013 |
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Sundry Debtors |
126.900 |
91.200 |
215.545 |
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Cash & Bank Balances |
0.100 |
1.300 |
0.058 |
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Other Current Assets |
0.000 |
0.000 |
0.000 |
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Loans & Advances |
88.600 |
70.000 |
57.207 |
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Total
Current Assets |
1374.300 |
820.900 |
1077.823
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1503.000 |
940.300
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939.980
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Provisions |
72.300 |
39.900
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42.399
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Total
Current Liabilities |
1575.300 |
980.200 |
982.379
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Net Current Assets |
(201.000) |
(159.300) |
95.444
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
3.820 |
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TOTAL |
2059.000 |
2258.800 |
2592.384 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
2840.900 |
2059.400 |
2266.387 |
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Other Income |
141.800 |
40.500 |
-- |
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Total Income |
2982.700 |
2099.900 |
2266.387 |
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Profit/(Loss) Before Tax |
(116.000) |
(609.800) |
(185.424) |
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Provision for Taxation |
0.400 |
0.500 |
0.000 |
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Profit/(Loss) After Tax |
(116.400) |
(610.300) |
(185.424) |
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Export Value: |
NA |
NA |
78.357 |
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Import Value : |
NA |
NA |
1746.278 |
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Expenditures : |
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Increase/(Decrease) in Finished Goods |
(225.600) |
(47.200) |
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Raw Materials |
2376.500 |
1850.700 |
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Excise Duty |
398.500 |
288.400 |
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Power & Fuel Cost |
98.800 |
72.200 |
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Employee Cost |
58.300 |
67.000 |
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Selling and Administration Expenses |
48.800 |
28.700 |
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Miscellaneous Expenses |
6.000 |
11.800 |
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Interest & Financial Charges |
79.200 |
196.500 |
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Depreciation |
158.200 |
151.800 |
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Other Expenses |
100.000 |
89.800 |
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Total Expenditure |
3098.700 |
2709.700 |
2121.010 |
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KEY RATIOS
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PARTICULARS |
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31.03.2007 |
31.03.2006 |
31.03.2005 |
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PAT / Total Income |
(%) |
(3.90) |
(29.06) |
(8.18)
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Net Profit Margin (PBT/Sales) |
(%) |
(4.08) |
(29.61) |
(8.18)
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Return on Total Assets (PBT/Total Assets} |
(%) |
(8.44) |
(74.28) |
(5.19)
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Return on Investment (ROI) (PBT/Networth) |
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(0.09) |
(0.55) |
(6.04)
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Debt Equity Ratio (Total Liability/Networth) |
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(1.28) |
(0.88) |
115.52
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Current Ratio (Current Asset/Current Liability) |
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0.13 |
0.16 |
1.09
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LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets:
v Land
v Building
v Office Equipment
v Furniture & Fixture
v Vehicles
v Plant & Machinery
v Electrical Fitting
Business:
BACKGROUND:
As the members are aware, the year 2006-07 happens to be the sixth
financial year for the subject, after commencement of commercial operations of
the Pig Iron Plant in May 2001.
HIGHLIGHTS:
Some of the highlights of performance achieved by the
company during the financial year 2006-07:
Hot metal production - 180400 MT of Hot metal achieved during this financial
year is the highest yearly production since inception.
Pig iron production - 163219 MT achieved during this financial year is the highest since inception.
Pig iron despatch - 153544 MT despatched during the year is the highest
despatch in a year since inception.
15349 MT of auxiliary material despatched is the highest yearly despatch since
inception.
Granulated slag despatch of 27135 MT is the highest despatch in a year.
PHYSICAL PERFORMANCE:
During the period of 2006-07, even though the production of 180400 MT of
hot metal and 163219 MT of pig iron is the highest quantity achieved in the year,
it is below the targeted hot metal production of 218490 MT and pig iron
production of 205381 MT.
This financial year is the first year of production after capital repair
work was completed in the first week of December 2005. The capital repair work
has helped the Company to achieve highest production since inception during the
year. In fact, the hot metal production level even in the month of April 2006
is 18055 MT which is the highest in any April month and even in the monsoon
month; the Company could achieve the hot metal production of 17250 MT in August
2006 which is the highest monthly production in any monsoon months. In the
month of May 2006, the production level was lower at 10433 MT due to non
availability of metallurgical coke during the last week. From December 2006
problems were faced in the Pig casting machine. The conversion of hot metal to
Pig iron was lower due to gap between Pig casting machine moulds which was
created by elongation of chain links and problems in the carrier plate. This is
a major problem which requires replacement of the spares in the complete
machine and the same was ordered with the original supplier M/s Bhilai
Engineering Corporation, Bhilai. The material is expected in the first week of
July 2007 and after replacement of the spare, both the production level as well
as the conversion from hot metal to pig iron is expected to improve. The above
action is expected to reduce the production cost and improve sales realization.
During the year, the saleable pig iron was produced in 7 grades
differentiated on the basis of silicon content in the pig iron in accordance
with the market requirement.
In the area of specific consumption of raw material, the main parameters
i.e. dry coke rate and iron ore rate were higher than the budgeted norms due to
the problems faced in the Pig casting machine. With the rectification of Pig
casting machine during July 2007, the parameters are expected to improve.
FINANCIAL PERFORMANCE:
During the year under review, the net sales realization of pig iron was more than the budgeted figure. The average sales realization per tonne of pig iron was expected in the budget as Rs.13100/MT whereas actual average realization achieved was Rs.14647/MT in the year 2006-07.
During the year, the Company has made a cash profit of Rs.41.8 Millions
before providing depreciation. However, the Company posted a net loss of
Rs.116.4 Millions as against net loss of Rs.473.7 Millions during 2005-06
excluding interest on Loan drawn from KIOCL. This was mainly due to the
improved market scenario for the pig iron as well as improved operation of the
furnace after Capital Repair. The plant performance was better after capital
repair and the performance of the plant is expected to improve during 2007-08
after the repair of Pig casting machine and also with the improved marketing
trend for the Pig iron.
FINANCIAL
ARRANGEMENTS:
During the period under review, the Company availed Overdraft of Rs.1005.4 Millions. as against Rs.1374.0 Millions. sanctioned by State Bank of India which is secured by lien on Term Deposits of KIOCL.
MARKETING:
During this financial year, the Pig iron is completely sold by the
Company in the domestic market. The Company did not export pig iron due to less
realization and heavy demand in the domestic market. The Company had exported
18343 MT of iron ore fines to China in May 2005 and earned foreign exchange to
the tune of Rs.44.6 Millions
In addition to the direct marketing of Pig iron within and
outside Karnataka, the Pig iron was also sold through the company appointed
agents. During the year the company achieved Net sales realization of
Rs.14647/MT.
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 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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.39.27 |
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UK Pound |
1 |
Rs.76.88 |
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Euro |
1 |
Rs.58.40 |
SCORE & RATING
EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
6 |
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PAID-UP CAPITAL |
1~10 |
5 |
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OPERATING SCALE |
1~10 |
1 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
1 |
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--PROFITABILIRY |
1~10 |
- |
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--LIQUIDITY |
1~10 |
5 |
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--LEVERAGE |
1~10 |
6 |
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--RESERVES |
1~10 |
- |
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--CREDIT LINES |
1~10 |
6 |
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--MARGINS |
-5~5 |
- |
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DEMERIT POINTS |
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
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--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
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MERIT POINTS |
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
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--EXPORT ACTIVITIES |
YES/NO |
YES |
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--AFFILIATION |
YES/NO |
NO |
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--LISTED |
YES/NO |
NO |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
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30 |
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
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
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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 |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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