MIRA
INFORM REPORT
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Report Date : |
25.01.2008 |
IDENTIFICATION
DETAILS
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Name : |
CHANDAN STEEL LIMITED |
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Registered Office : |
504, Sukh Sagar, N S Patkar Marg,
Mumbai-400007, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
08.11.1989 |
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Com. Reg. No.: |
11 - 54206 |
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CIN No.: [Company
Identification No.] |
U99999MH1989PLC054206 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMC03758G |
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PAN No.: [Permanent
Account No.] |
AAACC4713B |
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Legal Form : |
Closely Held Public Limited Liability Company |
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Line of Business : |
Buy, sell, manufacture, assemble repairs, design, alter, research & improve, develop, exchange, warehouse, let on hire, import, export & deal in all sorts ferrous & non-ferrous metals, castings ingots & flats, press, forgings structural & rolling work of all kinds, implements, machinery, tubes, pipes & fittings, furnace rollers, heat treatment to metals, static castings, such as crosshead PC steel valve, yoke, impeller, valve body, duct panel spinner thermoalloy, furnace tray, charge trays & furnace, fixtures in high alloy steel, etc. Subject is engaged in as manufacturers of stainless steel bars, flats, flanges and angels. |
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 1200000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow by average 30 days |
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Litigation : |
Clear |
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Comments : |
Subject is an old established company having moderate profit margin. Directors are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are fair. Payments are reported as slow by above 30 days. The company can be considered normal for business dealings at usual trade terms and conditions with slight caution. |
LOCATIONS
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Registered Office : |
504, Sukh Sagar, N S Patkar Marg,
Mumbai-400007, Maharashtra |
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Tel. No.: |
91-22-6629 0600 |
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Fax No.: |
91-22-6629 0633 / 34 |
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E-Mail : |
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Website : |
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Administrative Office : |
74, 1st Floor, C. P. Tank Road, Mumbai – 400 004, Maharashtra, India |
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Tel. No.: |
91–22–2389 0403 / 0477 / 0294 |
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Fax No.: |
91–22–2389 0514 / 374 1971 |
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E-Mail : |
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Location : |
Owned |
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Factory : |
Plot No. 35, GIDC, Umbergaon, District Valsad, Gujarat – 396 171, India |
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Tel. No.: |
91-260-2562066 / 4367 / 1166 |
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Fax No.: |
91-260-2562287 / 0103 |
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E-Mail : |
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Location : |
Owned |
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Overseas Offices : |
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DIRECTORS
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Name : |
Mr. Dilip C. Chandan |
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Designation : |
Director |
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Name: |
Mr. Prabhat Kumar Kaushik |
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Designation: |
Additional Director |
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Name: |
Mr. Praveen Kumar Kaushik |
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Designation: |
Director |
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Name : |
Mr. Vijay C. Chandan |
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Designation : |
Director |
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Name : |
Mr. Jagdish Joshipura |
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Designation : |
Director |
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Name : |
Mr. Prahalad Acharya |
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Designation : |
Director |
BUSINESS DETAILS
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Line of Business : |
Buy, sell, manufacture, assemble repairs, design, alter, research & improve, develop, exchange, warehouse, let on hire, import, export & deal in all sorts ferrous & non-ferrous metals, castings ingots & flats, press, forgings structural & rolling work of all kinds, implements, machinery, tubes, pipes & fittings, furnace rollers, heat treatment to metals, static castings, such as crosshead PC steel valve, yoke, impeller, valve body, duct panel spinner thermoalloy, furnace tray, charge trays & furnace, fixtures in high alloy steel, etc. Subject is engaged in as manufacturers of stainless steel bars, flats, flanges and angels. |
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Products : |
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Exports to : |
USA, Europe, Australia, New Zealand and South America |
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Imports from : |
Gulf countries |
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GENERAL INFORMATION
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No. of Employees : |
540 |
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Bankers 1: |
Dena Bank Gulalwadi Branch, Mumbai – 400 002, Maharashtra |
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Facilities : |
Term Loan : Rs. 18.940
millions Cash Credit : Rs. 83.947
millions Temp Credit : Rs. 18.046
millions Packing Credit : Rs. 25.590
millions |
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Bankers 2: |
Dena Bank Industrial Finance Branch, Maker Towers, Mumbai – 400 005,
Maharashtra, India |
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Facilities : |
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Financial Institutions
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GSFC Corporate Loan
: Rs. 12.432 millions |
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Banking Relations
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Satisfactory |
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Auditors : |
Shah & Taparia Chartered Accountants 12, Navjeevan Wadi, Dhobi Talao, Mumbai – 400 002 |
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Associates : |
· M. Chunilal & Company |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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18000000 |
Equity Shares |
Rs.10/- each |
Rs.180.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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17930000 |
Equity Shares |
Rs. 10/- |
Rs.179.300 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 |
179.300 |
179.300 |
149.300 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
213.600 |
135.900 |
82.500 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
392.900 |
315.200 |
231.800 |
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LOAN FUNDS |
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1] Secured Loans |
807.000 |
587.000 |
497.300 |
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2] Unsecured Loans |
100.700 |
98.600 |
132.800 |
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TOTAL BORROWING |
907.700 |
685.600 |
630.100 |
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DEFERRED TAX LIABILITIES |
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TOTAL |
1300.600 |
1000.800 |
861.900 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
686.200 |
497.200 |
339.00 |
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Capital work-in-progress |
0.000 |
8.400 |
31.300 |
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INVESTMENT |
0.500 |
0.400 |
0.300 |
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DEFERREX TAX ASSETS |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
688.500 |
331.500
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398.800 |
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Sundry Debtors |
574.700 |
548.100
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507.800 |
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Cash & Bank Balances |
119.300 |
76.500
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41.100 |
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Other Current Assets |
0.000 |
0.000
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0.000 |
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Loans & Advances |
332.000 |
281.700
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172.00 |
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Total
Current Assets |
1714.500
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1237.800
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1119.700 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1082.700 |
729.00
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599.400 |
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Provisions |
18.000 |
14.200
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29.400 |
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Total
Current Liabilities |
1100.700
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743.200
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628.800 |
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Net Current Assets |
613.800
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494.600
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490.900 |
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MISCELLANEOUS EXPENSES |
0.100 |
0.200 |
0.400 |
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TOTAL |
1300.600 |
1000.800 |
861.900 |
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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 |
3168.700 |
2341.600 |
2348.500 |
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Other Income |
114.300 |
117.200 |
222.900 |
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Total Income |
3283.000 |
2224.400 |
2571.400 |
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Profit/(Loss) Before Tax |
159.400 |
76.300 |
55.800 |
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Provision for Taxation |
56.200 |
22.900 |
21.600 |
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Profit/(Loss) After Tax |
103.200 |
53.400 |
34.200 |
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Expenditures : |
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Raw
Materials |
2318.500 |
1698.300
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1906.3
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Excise
Duty |
431.600 |
268.700
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218.200
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Power
& Fuel Cost |
31.900 |
35.100
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37.800
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Other
Manufacturing Expenses |
164.400 |
144.300
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138.900
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Employee
Cost |
28.100 |
07.700
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06.300
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Selling
and Administration Expenses |
161.200 |
127.300
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132.200
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Miscellaneous
Expenses |
4.100 |
3.900 |
5.600 |
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Other Expenditure |
0.000 |
0.000 |
0.000 |
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Total Expenditure |
3139.800 |
2285.300 |
539.000 |
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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 |
(%) |
3.14
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2.40 |
1.33 |
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Net Profit Margin (PBT/Sales) |
(%) |
5.03
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3.25 |
2.37 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
6.63
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4.39 |
3.82 |
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Return on Investment (ROI) (PBT/Networth) |
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0.40
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0.24 |
0.24 |
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Debt Equity Ratio (Total Liability/Networth) |
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5.11
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4.53 |
5.43 |
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Current Ratio (Current Asset/Current Liability) |
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1.55
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1.66 |
1.78 |
LOCAL AGENCY
FURTHER INFORMATION
Director Report:
NEW PROJECTS - INTEGRATION
The outlook for the future is positive and the management is optimistic and
expect good opportunities for the Iron and Steel companies. To explore the
further opportunities, the Company, in tune with its ongoing development plans
has undertaken following capital projects.
- The Company has envisaged the installation of two Rolling Mills of size
20' and 10' in addition to the existing rolling mill of size 16' and 12' so as
to cater the new export emerging market.
- To add high value to its product, as a part of forward integration the
company has started a state of the art technology wire drawing unit in the new
premises in September, 2005.
- As a part of cost saving measure, In addition to the existing wind mill
of 1.25 MW capacity, the Company has installed one more windmill of 1.25 MW
capacity to generate 26 lacs units /per annum in March, 2006 which would be
utilized for captive consumption.
These projects will contribute very high sales turnover and
profitability. The Company is also in the process introducing more innovative
value added products and enhancing their product mix with the higher capacities
to cater the export market. Further to economies the scale of operation, the
Company is in the process of identifying the cost reduction measures involved
in various processes and initiate the cost reduction techniques
accordingly.
The above steps will augur a bright future for the company in terms of
healthier growth rate in topline, export and bottom line.
Subject is a Government of India Recognised Export House.
The company had saught permission for merger with the following companies with the company from the Hon’ble Mumbai High Court and Hon’ble Gujarat High Court.
+ Umargam Metal Rolling Mills Private Limited
+ Chandan Tubes & Metals Private Limited
+ Chaitanya Steel Rolling Mills Private Limited
+ Chaitanya Metal Industries Private Limited
The company has been accredited with ISO 9002 certificate.
It is in trade terms with :-
+ Edel Stahl GmbH, Germany
+ Praory Woodfield Engineering Limited, UK
+ Toyoto Tshuso America Inc. USA.
Profile
The strength of the company lies in the fact that the promoters are having an experience of 4 decades in marketing of stainless steel products. Funtioning under the eagle eye of its chairman, Mr. Chunilal Chandan along with his two sons Mr. Dilip Chandan & Mr. Vijay Chandan, who are the executive director have gathered a team of qualified experts in the organisation. The company is making rapid strides, by its concentration in the stainless steel sector, which has great popularity and a vast future potential with its combination of experience in marketing and expertise in production, chandan steel is looking forward to an era of rapid expansion and increasing profitability.
The company provides following production facilities :-
v Melting
A 8.5 ton melting capacity induction furnance, a 10 ton argon Oxgen decarbonization vessel with microprocessor based gas mixxing station, two jarrel ash spectrometer with 32 channels, Laddle Refining furnace, 6/11 metre radius double strand concast machine with submerged castings and ems are key equipments used in melting. the billets produced are in size 100mm to 180mm.
v Rolling
Semi automatic mills consisting of 400mm stands roughing group followed by 6 stands 300mm intermediate and finishing mill. size range of products is 10mm to 108mm with plan to extend the range on higher side. sections produced are rounds, flats, square & hexagons. with undergoing expansion for angles to be added to the product range.
v Annealing
The annealing section includes a 12 point temperature controlled by bogey hearth annealing furnace capable of operating at 1200 c, with a state of the art water quenching facility.
v Cold Processing
The cold processing section comprises of pickling, precision-drawing, peeling and centreless grinding machine. h-11 or quuivalent tolarance is offered in drawing, peeling and grinding. In centreless grinding h-9 or equivalent tolerance can be offered.
- Cold Drawing
Clod Drawing consists of drawing a pickled solution & annealed stainless steel Bar or Coil through a die of the desired size and shape on a draw bench.
Peeling
Peeling consists of reducing the surface of the Hot Rolled i.e. Solution
Annealed Bar in a Peeling machine. Bars are usually Polished after Peeling.
Centreless Grinding
A Ground surface finish is obtained by centreless grinding.
The company’s fixed assets of important value include Leasehold Land, Factory Building, Plant & Machinery, Furniture & Fixtures, Scooter, Motor Car, Office Equipment's, Computer and Air Conditioner.
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.39.40 |
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UK Pound |
1 |
Rs.77.95 |
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Euro |
1 |
Rs.58.14 |
SCORE & RATING
EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
5 |
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PAID-UP CAPITAL |
1~10 |
5 |
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OPERATING SCALE |
1~10 |
4 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
4 |
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--PROFITABILIRY |
1~10 |
4 |
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--LIQUIDITY |
1~10 |
4 |
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--LEVERAGE |
1~10 |
5 |
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--RESERVES |
1~10 |
5 |
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--CREDIT LINES |
1~10 |
5 |
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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 |
YES |
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--LISTED |
YES/NO |
YES |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
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41 |
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 |
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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/normal. |
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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