MIRA
INFORM REPORT
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Report Date : |
26.07.2008 |
IDENTIFICATION
DETAILS
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Name : |
ISMT LIMITED |
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Registered Office : |
Lunkad Tower, Viman Nagar, Pune – 411014, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
01.09.1999 |
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Com. Reg. No.: |
016417 |
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CIN No.: [Company
Identification No.] |
L27109PN1999PLC016417 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PNEI00099B |
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PAN No.: [Permanent
Account No.] |
AAACJ9917A |
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Legal Form : |
Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Excesses. |
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Line of Business : |
Manufacturer of Seamless Tubes |
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 24000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company and has improved it’s performance
and financial status in 2006-07. Trade relations are fair. The company’s shares are listed on the stock exchanges. Payments are
reported as slow but correct. The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office : |
Lunkad Tower, Viman Nagar, Pune – 411014, Maharashtra, India |
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Tel. No.: |
91-20-26630144 |
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Fax No.: |
91-20-26630779 |
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E-Mail : |
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Website : |
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Factory 1: |
MIDC Industrial Area, Ahmedabad – 414111, Gujarat, India |
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Factory 2: |
MIDC Industrial Area, Baramati – 413133, India |
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Factory 3: |
Jejuri – Morgaon Road, Jejuri – 412303, India |
DIRECTORS
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Name : |
Mr. Khushroo Rustumji |
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Designation : |
Chairman (upto July 31, 2007) |
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Name : |
Mr. V. Balasubramanian |
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Designation : |
Joint Managing Director |
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Name : |
Mr. O. P. Kakkr |
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Designation : |
Managing Director |
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Name : |
Mr. A. K. Jain |
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Designation : |
Director |
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Name : |
Mr. Virendra Kapoor |
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Designation : |
Director |
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Name : |
Mr. J P Sureka |
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Designation : |
Director |
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Name : |
Mr. K. D. Hodavdekar |
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Designation : |
Nominee Director (IDBI Nominee) |
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Name : |
Mr. K. K. Rai |
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Designation : |
Nominee Director (ICICI Nominee) |
KEY EXECUTIVES
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Name : |
Mr. Jayan Nair |
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Designation : |
Company Secretary |
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Name : |
Mr. B. R. Taneja |
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Designation : |
Chief Executive Officer |
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Name : |
Mr. Rajiv Goel |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Nirmal Chandra |
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Designation : |
President (Projects and Product Development) |
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Name : |
Mr. Salil Taneja |
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Designation : |
President (Corporate Secretary and Development) |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Seamless Tubes |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Installed
Capacity* |
Production |
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Seamless Hollows and Tubes |
Tonnes |
158000 |
**161181 |
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Components and Spares, Plugs and Dies Rolls and Mandrels |
Nos. |
10000 |
***41902 |
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Cold Rolled Rings |
Nos. |
8000000 |
4289755 |
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Steel Bars |
Tonnes |
250000 |
247351 |
Licensed capacities are not given, as the respective industries are
de-licensed.
* The installed capacities as stated above are
certified by the management and relied upon by the auditors.
** Captive consumption for the year Nil Tones
(Previous years 52 Tonnes)
*** For captive consumption within division.
GENERAL
INFORMATION
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No. of Employees : |
200 |
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Financial Institutions : |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
P. G. Bhagwat Chartered Accountant |
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Name : |
J. K. Shah and Company Chartered Accountant |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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175000000 |
Equity Shares |
Rs.5/- each |
Rs.875.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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144381756 |
Equity Shares |
Rs.5/- each |
Rs.721.900
Millions |
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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 |
721.900 |
1191.100 |
1545.700 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
3980.400 |
3100.200 |
2018.900 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
4702.300 |
4291.300 |
3564.600 |
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LOAN FUNDS |
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1] Secured Loans |
6168.800 |
6733.500 |
7163.200 |
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2] Unsecured Loans |
2168.700 |
1107.300 |
833.900 |
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TOTAL BORROWING |
8337.500 |
7840.800 |
7997.100 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
13039.800 |
12132.100 |
11561.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
7863.900 |
8063.700 |
8459.900 |
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Capital work-in-progress |
236.700 |
165.300 |
121.800 |
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INVESTMENT |
0.100 |
0.100 |
0.700 |
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DEFERREX TAX ASSETS |
507.800 |
915.800 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.000
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0.000 |
1273.000 |
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Sundry Debtors |
0.000
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0.000 |
1948.700 |
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Cash & Bank Balances |
0.000
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0.000 |
793.200 |
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Other Current Assets |
6907.400
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5334.700 |
0.000 |
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Loans & Advances |
0.000
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0.000 |
2916.700 |
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Total
Current Assets |
6907.400
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5334.700 |
6931.600 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
2572.300
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2422.800 |
3807.700 |
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Provisions |
0.000
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0.000 |
207.200 |
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Total
Current Liabilities |
2572.300
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2422.800 |
4014.900 |
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Net Current Assets |
4335.100
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2911.900 |
2916.700 |
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MISCELLANEOUS EXPENSES |
96.200 |
75.300 |
62.600 |
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TOTAL |
13039.800 |
12132.100 |
11561.700 |
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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 |
11971.400 |
10671.100 |
9938.700 |
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Other Income |
36.300 |
181.600 |
176.400 |
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Total Income |
12007.700 |
10852.700 |
10115.100 |
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Profit/(Loss) Before Tax |
1376.600 |
1254.000 |
258.500 |
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Provision for Taxation |
75.400 |
103.500 |
(70.400) |
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Profit/(Loss) After Tax |
1301.200 |
1150.500 |
328.900 |
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Imports : |
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Raw Materials |
698.900 |
843.700 |
NA |
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Consumables |
105.800 |
102.400 |
NA |
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Capital Goods |
39.800 |
9.700 |
NA |
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Total Imports |
844.500 |
955.800 |
NA |
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Earnings in Foreign Currency : |
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Export Earnings |
2124.000 |
1936.100 |
NA |
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Other Earnings |
136.500 |
136.100 |
NA |
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Total Earnings |
2260.500 |
2072.200 |
NA |
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Expenditures : |
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Cost of Goods Sold |
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Manufacturing Expenses |
271.900 |
236.000 |
819.000 |
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Selling and Administrative Expenses |
330.600 |
285.100 |
309.200 |
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Raw Material Consumed |
170.300 |
154.700 |
4734.000 |
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Excise Duty |
0.000 |
0.000 |
1031.700 |
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Consumption of stores and spares parts |
6273.000 |
5648.300 |
0.000 |
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Increase/(Decrease) in Finished Goods |
0.000 |
0.000 |
12.700 |
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Energy |
1651.000 |
1372.800 |
0.000 |
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Personnel |
625.400 |
514.600 |
0.000 |
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Employees Cost |
0.000 |
0.000 |
400.700 |
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Interest and Financial Charge |
711.400 |
878.000 |
944.800 |
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Insurance Expenses |
0.000 |
0.000 |
71.400 |
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Power & Fuel |
0.000 |
0.000 |
1106.000 |
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Depreciation & Amortization |
597.500 |
509.200 |
427.100 |
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Total Expenditure |
10631.100 |
9598.700 |
9856.600 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2007 1st Quarter |
30.09.2007 2nd Quarter |
31.12.2007 3rd Quarter |
31.03.2008 4th Quarter |
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Sales Turnover |
2706.600 |
3057.600 |
3193.000 |
2959.400 |
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Other Income |
11.400 |
9.300 |
11.300 |
149.100 |
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Total Income |
2718.000 |
3066.900 |
3204.300 |
3108.500 |
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Total Expenditure |
2187.200 |
2470.400 |
2662.900 |
2526.300 |
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Operating Profile |
530.800 |
596.500 |
541.400 |
582.200 |
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Interests |
112.100 |
101.100 |
84.400 |
123.300 |
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Gross Profit |
418.700 |
495.400 |
457.000 |
458.900 |
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Depreciation |
136.100 |
137.100 |
139.100 |
139.700 |
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Tax |
0.700 |
1.900 |
65.800 |
1.500 |
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Reported PAT |
224.500 |
287.600 |
252.100 |
317.700 |
KEY RATIOS
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PARTICULARS |
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31.03.2007 |
31.03.2006 |
31.03.2005 |
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Debt-Equity Ratio |
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1.80
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2.02 |
2.16 |
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Long Term Debt-Equity Shares |
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1.49
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1.74 |
1.93 |
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Current Ratio |
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1.58
|
1.35 |
1.33 |
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TURNOVER RATIOS |
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Fixed Assets |
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1.38
|
1.26 |
1.48 |
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Inventory |
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6.55
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7.66 |
12.27 |
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Debtors |
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5.00
|
5.41 |
6.14 |
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Interests Cover Ratio |
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2.81
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2.28 |
1.21 |
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Operating Profit Margin (%) |
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20.03
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20.90 |
15.85 |
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Profit Before Interests and Tax Margin (%) |
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16.01
|
16.76 |
11.55 |
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Cash Profit Margin (%) |
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13.76
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12.78 |
7.11 |
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Adjusted Net Profit Margin (%) |
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9.74
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8.64 |
2.81 |
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Return On Capital Employed (%) |
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17.10
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17.01 |
13.42 |
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Return On Net Worth (%) |
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30.53
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32.41 |
14.24 |
LOCAL AGENCY
FURTHER INFORMATION
History:
Indian Seamless Steels and Alloys Limited (formerly Jejuri Steels and Alloys Limited), the new name which come into effect on March 27, 2002 subsequent to the amalgamation of erstwhile Indian Seamless Steels and Alloys Limited with Jejuri Steels and Alloys Limited on Sep 30, 2001.
Indian Seamless Steels and Alloys (ISSAL), produces Hot Rolled Bars and Rods of
Alloy/Non-Alloy Steels and Cast Rolled of Alloy steel from its steel plant at Jejuri
in Pune District. The steel plant has an installed capacity of 190000
MTPA.
ISSAL is the main supplier of steel to The Subject giving ISSAL the advantage
of assured base load. The company is planning to broad banding its product
range and customer base. It is supplying alloy steel products to companies in
automobile, forging and engineering companies in India.
The Company is having one wholly owned subsidiary Company called Indian
Seamless Power Limited
The company is considering a Corporate Debt Restructuring proposal, which also
envisages the merger of Subject and ISSAL. In this regard the company has
constituted a commitee to negotiate the CDR and evaluate the Merger plan.
The Company is certified and Registered to QS 9000 and ISO 9002.
Subject was promoted in 1977 by a group of technocrats to
produce specialized seamless tubes in India. Beginning with an installed
capacity of 15,000 metric tons per annum, company commenced production in 1980
with the installation and commissioning of an Assel mill in technical
collaboration with Mannesman Demag Meer of Germany. Subsequently, in 1990 the
production capacity was raised to 50,000 metric tons per annum with the
addition of a second Assel Mill. In 1995. The company promoted another company,
Indian Seamless Steels and Alloys Limited (ISSAL), to produce alloy steel, the
raw material used in the manufacture of seamless tubes, giving ISMT better
control over product quality as well as deliveries.
In April 2000 the comoany acquired Kalyani Seamless Tubes Limited (KSTL), the
other major Indian manufacturer of seamless tubes. The combined entity which
retained the name The Indian Seamless Metal Tubes Limited emerged as not only
the largest producer of seamless tubes in India but also as one of the largest
and most diversified producers of specialized seamless tubes worldwide with -
an installed capacity of 150,000 metric tons of tubes per annum in the size
range of 6mm to 273mm.
In 2005 the company and Indian Seamless Steels and Alloys Limited merged to
form company. This Company is the largest integrated manufacturer of
specialized seamless tubes in the Asia Pacific Region. Company has an installed
capacity of 155,000 tpa and 250,000 tpa for seamless tubes and alloy steel
respectively.
Companies are manufactured through the Assel Mill route. This process yields
tubes of very high dimensional accuracy and excellent concentricity thus
minimizing the requirements of final machining. As a result, these tubes are
ideal for applications such as the manufacture of bearings, automobile parts,
drill rods, hydraulic cylinders, gas cylinders, boilers, etc. Apart from tubes,
Company also manufactures a wide range of value added products for each of
these industries. These include items such as bearing rings, gear blanks,
shifter sleeves, cages for constant velocity joints, swaged and machined axles,
threaded and coupled casings, couplings and a host of similar products.
Dividend:
The Directors are pleased to recommend maiden
dividend of 10% for the year. They sincerely thank the shareholders for their
support during the initial difficult years of the Company.
Operations:
Plant efficiencies were high with all the three plants operating at near 100% capacity
utilization. The yields at both the tube plants have improved whereas steel
plant was successful in attaining upto 17 heats per day against 15 heats per
day in the previous year.
Market:
Tube sales witnessed a strong
growth of 25% across segments largely led by domestic demand.
The
increase in sales to Power segment was especially encouraging with sales going
up by about 45%. The planned growth in power generating capacity in the country
shall lead to a quantum jump in demand for seamless tubes.
The penetration in export market has widened and deepened and the recent
European acquisition is expected to provide a big fillip to their
exports.
Expansion:
The expansion project at Baramati is moving rapidly towards commissioning.
Civil construction is at an advanced stage, equipments both Imported and
Indigenous have started arriving at site and after assembly and erection, the
commissioning trials are slated to commence by end March 2008.
The expansion project at Baramati has bee accorded 'Mega Project' status by the
Government of Maharashtra which entitles the Company to incentive upto
Rs.1950.000 Millions on VAT payable to the State Government over a period of
Seven years.
The Company is also augmenting the steel manufacturing capacity from the
present 2,50,000 tpa to 3,50,000 tpa by adding a new Ladle refining furnace and
related balancing equipments.
Acquisition:
With the objective of moving towards its goal of being a global leader in
precision seamless tube manufacturing, the Company in June 2007, has acquired
Structo Hydraulics AB, Sweden, a leading producer of precision seamless tubes
and components for hydraulic cylinder in Europe. The acquisition will lead to a
multi fold increase in off take of seamless tubes both by Structo and by other
European markets and would also help meet the demand of fast growing
construction equipment industry in India.
Management
Discussion and Analysis:
Overview:
The Company ended the year with Net Sales at Rs.11970.000 Millions, up by 12%,
while Net profit and Earning per share before Extra Ordinary items at
Rs.1300.000 Millions and Rs.9.010 Millions respectively, up by 27%.
Industry Structure and
Developments:
Seamless tube industry has exhibited strong growth across the globe. The Indian
players are benefiting both from the global up-trend and the strong growth in
the domestic economy.
Market:
Tubes sales on a net basis registered a healthy growth of 25% in value terms to
touch sales of Rs.8790.000 Millions. The continuous endeavor of the company is
to cater to niche segments across industries rather then being dependent on a
single industry commodity product.
Industry Mix 2006-07:
Auto and General Engineering 34%OCTG 25%Bearings
13%Construction Equipment 10%Power 7%Others 11% (Based on: Tubes Sales
Value)
The proposed expansion is ideally timed to meet the much higher domestic and
global demand which would help the Company to become competitive in the value
added lower diameter thin walled tubes market.
The increased capacity shall focus on following industry segments;
Automotive, General Engineering and Bearings Industry:
Continue to be key contributors for the Company. Sales from these industry
segments should continue to grow at the overall economic growth rate.
Oil
Exploration:
Globally, the higher oil prices have led to a big leap in oil exploration
activity and the private participation in India has further accelerated it.
Together this has led to unprecedented demand for seamless tubes.
Construction Equipment:
Thrust on Infrastructure development and a gradual shift towards higher
automation within the construction and earth moving equipment sector, provides
immense scope for sustained long term growth in the hydraulic cylinders
segment.
Power:
India faces a major challenge in meeting the energy needs to sustain the
present economic growth of 8% to 9%. The targeted addition in generating
capacity would mean large and sustained growth in seamless tubes
requirement.
Exports:
Europe and US remain the dominant export revenue earners for the Company.
Acquisition of Structo Hydraulics AB, Sweden would further strengthen company's
position in value added hydraulic cylinder segment, specifically in the
European market.
Opportunities:
In India, Power and Infrastructure sectors are witnessing unprecedented growth
which is expected to be sustained for a longer term leading to higher demand
for seamless tubes within the country itself. The company is well poised to
capitalize on the long term growth opportunities resulting from the same, with
expanded capacity.
Not only are the existing industry segments witnessing good growth but also
seamless tubes is finding newer applications across industries, with
opportunities shifting in favor of high value added alloy steel tubes (v/s
carbon steel tubes) for which the company is well positioned to reap the
benefits.
Outlook:
Though constrained by capacity in the current year, the expanded capacity is
scheduled to start contributing to sales from Q1 of FY 2008-09.
The company shall aim at accelerated ramp up of production given the strong
market outlook.
Financial
Performance:
Despite higher raw material cost and 25% increase in unit cost of power,
contribution margins were sustained as a result of improved productivity,
better yields and measures taken to reduce unit consumption of power.
EBIDTA margins was marginally lower largely on account of increased fixed
cost.
Energy
Cost:
Power is the largest cost after raw material for the company. Sharp rise in
unit cost of power has led to pressure on margins which was partially mitigated
through increased efficiency.
Finance
Cost:
Finance cost for the year came down by 19% on account of loan repayments and
refinance of high cost debt by low cost debt. Finance Cost as % to sales has
come down over last couple of years and now stands at 5.94% of sales.
The financial gearing is now touching 1 and together with Debt to EBIDTA ratio
of less than 2, demonstrates the financial soundness of the Company.
Given the natural hedge of large exports, the Company has
actively pursued to convert Rupee Loan into Foreign Currency Loan. As on March
2007, 50% of the loans were in Foreign Currency thereby lowering the overall
cost.
Working
Capital:
The working capital requirement of the Company went up in line with increased
production, and was met by internal accruals.
Fixed Assets:
- Leasehold Land
- Freehold Land
- Building
- Plant and
Machinery
- Furniture and
Fixture
- Office
Equipment
- Vehicles
- Intangible
Assets
- Technical Know
– How
- Software
Development
Website Details:
Company Profile:
Milestones
1977 The Company Incorporated
1980 The Company Starts commercial production
1988 Taneja Aerospace and Aviation Limited Incorporated
1989 Indian Seamless Steels and Alloys Limited Incorporated
1994 Taneja Aerospace and Aviation Limited. First
certification of airworthy flight/ commercial production
1994 Indian Seamless Steels and Alloys Limited Starts
commercial production
1999 Kalyani Seamless Tubes Limited merges with the Indian
Seamless Metal Tubes Limited
2005 Subject formed through the merger of The Indian
Seamless Metal Tubes Limited and Indian Seamless Steels and Alloys Limited
Group
Companies
ISMT
North America
ISMT North America is a wholly owned subsidiary of company
and provides a wide spectrum of seamless tube products, steel and a hands-on
level of service for the diverse North American marketplace.
Website: www.ismtna.com
Taneja
Aerospace and Aviation Limited (TAAL)
Taneja Aerospace and Aviation Limited (TAAL), a group
company of company, is the first and the only private sector aircraft
manufacturing company in the country. In addition to manufacturing a six seat
aircraft TAAL manufactures advanced aero-structures and parts for the Indian
and international aerospace industry. It is also the sole marketing representative
for Cessna in India for its business class jets.
Website: www.taal.co.in
Structo
Hydraulics AB, Sweden
Structo Hydraulics AB, Sweden, a subsidiary of Company., is
among Europe's leading suppliers of tubes and engineering products for the
hydraulic cylinder industry. Structo has more than 400 years experience in the
field of iron and steel processing. The company’s product range includes cold
drawn seamless tubes, cold drawn welded tubes, roller burnished cylinder tubes
and cold formed tubes and components.
Website: www.structo.se
ISMT
Europe, Sweden
ISMT Europe has been established in Storfors, Sweden by company
to revitalize the European tube market. The Company is building long term
business relationships with European industry to provide quality tubes and
technical services for a wide range of applications.
Website: www.ismteurope.com
Management
B. R.
Taneja - Chief Executive Officer
B. R. Taneja is one of the founders of the company. He has
degrees in engineering and management and started his career with the Indian
Tube company. He is a technocrat - manager and has led the company from the
front to its current position. He has also founded Taneja Aerospace and
Aviation Limited (TAAL) which is the first and the only private sector company
in India to manufacture civil aircraft. In addition to focusing on corporate
strategy he takes a keen interest in public policy.
O. P.
Kakkar - Managing Director
O. P. Kakkar has been associated with company since its
inception. He has degrees in mechanical engineering management and was working
with the Indian Tube company before joining the company. He has played a key
role in the founding of the company and he currently manages and oversees its
entire operations.
Rajiv
Goel - Chief Financial Officer
Rajiv Goel is a qualified Chartered Accountant. He is responsible
for the entire Financial Management of ISMT including fund management,
accounts, administration. He has been a significant contributor to the design
and implementation of the growth strategies of the Company.
Salil
Taneja - Joint Managing Director
Salil Taneja has degrees in mechanical engineering and
management. He is responsible for Corporate Strategy and Human Resource
Development in the company. In addition he plays an active management role in
ISMT's group company, Taneja Aerospace and Aviation Limited (TAAL), the only
private sector aircraft manufacturing company in India.
Nirmal
Chandra - President (Projects & Product Development)
Nirmal Chandra has been associated with company since its inception.
He is a graduate in Mechanical Engineering and started his career with the
Indian Tube Company. He has a very strong technology/manufacturing as well as
commercial background. Today he occupies a key position in the company and
manages the expansion project of the tube as well as steel mills.
Company
Announces Results for FY 2005-06
PAT
Increases by 250 Percent to Rs.1150.000 Millions
Mumbai, May 5, 2006: The Pune based engineering company,
ISMT Limited (BSE Code: 532479), announced its financial results for FY
2005-06.
The Company is the only integrated and diversified manufacturer of specialized
seamless tubes and alloy steels in India. The Company offers an unmatched range
of specialized tubes to Tier I suppliers of auto components, bearings, and
other engineering OEM's. Additionally, the products are used for applications
such as drilling of oil wells, high pressure boilers, and mining. The specialty
steels manufactured by the Company is preferred by the most discerning buyers
in the domestic bearing and forging industries.
Highlights of FY 2005-06 results
vis-ŕ-vis the last year are:
Net sales grew by 19 percent to Rs.10610.000 Millions.
EBIDTA
increased by 58 percent to Rs.2510.000 Millions
PAT
increased by 250 percent to Rs.1150.000 Millions
Operating
margin improved from 17.7 to 23.6 percent.
Exports
increased by 40 percent to Rs.2100.000 Millions
Mr. O.P. Kakkar, the Managing Director of ISMT Limited, is of the opinion that
"The customer-centric integrated nature of the Company, the increasing
presence in the international market, and the focus on continuously improving
the quality of products and product mix has made it possible for the Company to
reach this level of performance". He concluded by adding that, "the
sustained improvement in our order book position is an indicator of how the
future would unfold for us and we have, therefore, already initiated work on
increasing our capacity in tube making from 155,000 TPA to 475,000 TPA and
alloy steel manufacturing from 250,000 TPA to 500,000 TPA to sustain growth in
the years to come".
Mr. Rajiv Goel, the CFO of the Company added that "The improvement in the
performance of the Company over the two years clearly establishes that it has
acquired the growth momentum - which is based on strong performance
fundamentals - required to get closer to becoming 'the most sought after'
specialized seamless tube manufacturer in the world".
The Company would be able to meet its growth plans for the next two years and,
thereafter, the increase in capacity that is under implementation and expected
to be completed by the fourth quarter of 2007-08 would support the sustained
medium-term growth. It is expected that the top-line after capacity
augmentation would treble to over Rs.30000.000 Millions
ISMT Limited
Commences Capacity Expansion Project
Equipment
Order for Euro 18 Million Placed
Mumbai, May 11, 2006: The Pune based integrated specialized
seamless tubes and specialty steel manufacturer, ISMT Limited, has commenced
the implementation of its expansion project.
The Company has placed a firm order for basic PQF Mill on SMS Meer of Germany
at a cost of Euro 18 Million (Rs.1000.000 Millions) and the equipment would be
delivered between 12-15 months. The total cost of the expansion project is
Rs.2500.000 Millions. This new finishing mill will be installed in tandem with
the existing Assel mill at Baramati. At 80% operating efficiency the new mill
with, an installed capacity of 400,000 TPA, should produce 320,000 tonnes of
tubes annually.
The company is also upgrading its tube making facilities at Ahmednagar from the
present 60,000 TPA to 75,000 TPA. The Ahmednagar and Baramati plants, together,
would thus have an installed capacity of 475,000 TPA.
The Company has been able to ensure that the delivery period is compressed to
12-14 months enabling the Mill to be commissioned by December, 2007. Thus, the
last quarter of 2007-08 will, also, have production coming from the new Mill
and, accordingly, will make a significant difference to the top-line as well as
the bottom-line of the Company.
Simultaneously Alloy Steel production is being taken up from the present
250,000 TPA to 500,000 TPA in modular fashion in the next 2 to 3 years in
tandem with its increased requirement of steel for tube making.
Apart from increase in capacity, the project will be able to bring about
significant cost reduction in terms of material usage and process costs and
make the Company more competitive. The new capacity is geared to cater to fast
growing market segments of power generating equipment, construction equipment,
oil exploration etc., apart from consolidating the Company's position in
automobile, bearing and other specialized segments.
The above cost reduction together with the volume growth are expected to lead to
further improvement in operating margins which are already at a healthy 24%.
Implementation of this project will place the Company among the front ranking
global specialized seamless tube producers with a gross turnover of over USD 1
Billion - Rs.45000.000 Millions
ISMT
works with Prithvi, an NGO, to promote AIDS awareness
Since November 2005, as part of
its social responsibility initiative, ISMT Limited has joined with PRITHVI in
the development of an innovative partnership in Industry / NGO cooperation to
combat the HIV epidemic in India.
ISMT has given Prithvi a grant to develop basic infrastructure and programs for
2006. During that time Prithvi was able to expand its programs into 20 villages
and reach 0.250 Millions people with its message that: "HIV / AIDS Touches
Us All!" The ISMT grant has now been extended through 2007, when Prithvi
trainers and counselors are developing programs and services to be implemented
in ISMT plants and surrounding villages. These include on-going HIV awareness programs,
targeting line staff, development of volunteer workers at ISMT to work in house
with HIV issues, counseling services, and the development of long-term
intervention strategies.
Prithvi, working in comprehensive rural empowerment, is developing a
multi-level strategy to tackle the HIV epidemic through strengthening rural
communities, enabling them to effectively tackle the terrible issues that the
HIV epidemic is highlighting. ISMT believes that by joining forces, the
industrial and NGO sector can develop far more effective intervention
strategies than either sector alone.
ISMT
Limited acquired a 100% stake in Structo Hydraulic AB, Sweden
This is to announce that ISMT Limited ("ISMT")
has, through its subsidiaries and affiliates, acquired a 100% stake in Structo
Hydraulics AB ("Structo"), one of the largest and most well renowned
manufacturers of tubular components for the hydraulic cylinder industry. These
are downstream products made from seamless tubes manufactured by ISMT.
Structo Hydraulics AB's factory is located at Storfors in Sweden and the
company has an extensive marketing network throughout Europe. The company has
an annual turnover of SEK 450 million (Rs. 300 crores) and is an established
supplier to many multinationals particularly those in the construction and
agricultural equipment industry.
This acquisition brings ISMT one step closer to its strategic objective of
becoming the largest producer of Tubes and Tubular Components for Hydraulic
Cylinders in Europe and Asia. In addition, it provides ISMT quick access to the
growing demand for Hydraulic Cylinder Tubes and Components within India and
China. The two companies have already chalked out a plan to expand
manufacturing operations to India and subsequently to China in an effort to
support Structo customers in those countries and in the neighbouring regions.
Many of Structo's customers in Europe already have factories in India and
China.
Structo's marketing network in Europe will also be utilized to market other
ISMT products in Europe. Structo's market positioning in Europe will be
strengthened as a result of access to a captive raw material base through ISMT.
In the near term ISMT expects that this acquisition will create a captive
market of roughly 100,000 tonnes per annum of high value seamless tubes.
Following this acquisition ISMT will be introducing Structo's product line in
India thereby offering Indian customers a full range cold drawn tubes, Skived
and Roller-burnished tubes and Components for Hydraulic Cylinders.
ISMT's strategy is to provide customers in India, namely manufacturers of
Hydraulic Cylinders, a line of value added products that reduces their
manufacturing costs, improves their delivery times and thereby increases their
throughput.
ISMT Limited is a leading global producer of Precision Seamless tubes and Alloy
Steels. The company operates three manufacturing plants based in India and
supplies precision seamless tubes and steel to the Bearing, Automotive, Mining,
OCTG and Energy (Pressure and Boiler tubes) industries worldwide. ISMT is
currently in the process of increasing its Steel Making capacity from 250,000
MT per annum to 500,000 MT per annum and its seamless tube making capacity from
150,000 MT per annum to 450,000 MT per annum. For more information on ISMT
please refer to its website at www.ismt.co.in or contact Rakesh Duda at
Rduda@ismt.co.in
Structo Hydraulics AB, with a production facility in Storfors in Sweden, is
among Europe's leading suppliers of tubes and engineering products for the
hydraulic cylinder industry. Structo Hydraulics AB has more than 400 years
experience in the field of iron and steel processing.
Structo's product range includes cold drawn seamless tubes, cold drawn welded
tubes, roller burnished cylinder tubes, cold formed tubes and components. The
product selection covers a wide and comprehensive range of dimensions. Structo
Hydraulics AB also offers also technical support, customised solutions and
logistics system for integrated manufacturing. For more information on Structo Hydraulics
AB please refer to www.structo.se or contact Mr. Kaj Hagman at
Kaj.hagman@structo.se
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
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.42.23 |
|
UK Pound |
1 |
Rs.83.88 |
|
Euro |
1 |
Rs.66.41 |
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 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
46 |
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 |
|