MIRA INFORM REPORT
|
Report Date : |
18.06.2008 |
IDENTIFICATION
DETAILS
|
Name : |
ADHUNIK METALINKS LIMITED |
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Registered Office : |
14 N S Road, 2nd Floor, Kolkata – 700 001, West Bengal |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
20.11.2001 |
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Com. Reg. No.: |
093945 |
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CIN No.: [Company
Identification No.] |
L28110WB2001PLC093945 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
RCHN00117F |
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PAN No.: [Permanent
Account No.] |
AABCN5676P |
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Legal Form : |
Public Limited liability company. Company’s shares are listed on the
Stock Exchange. |
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Line of Business : |
Manufactures a wide variety of Special Steel of International
Quality for different applications in Automobile ,Construction and
Engineering. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 13000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company meetings its normal commitments
timeously. Trade relations are fair. Business is active. General financial
position is good. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office : |
14 N S Road, 2nd Floor, Kolkata – 700 001, West Bengal,
India. |
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Tel. No.: |
91-33-22428551 |
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Tele Fax No. : |
91-33-22428553 |
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Corporate Office : |
Lansdowne Towers, 2/1A, Sarat Bose Road, Kolkata – 700 020, India. |
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Tel. No.: |
91-33-30517100 |
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Fax No.: |
91-33-22890285 |
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E-Mail : |
info@adhunikgroup.com |
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Factory 1 : |
Adhunik Metaliks
Limited Chadri Hariharpur, Kuarmunda,
Dist: Subdargarh, Orissa – 770039, India |
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Tel. No.: |
91-661-3051300 |
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Factory 2 : |
Adhunik Alloys
and Power Kandra, Seraikela, Kharsa, Jharkhand, India |
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Factory 3 : |
Adhunik
Corporation Limited Haniman Sarani, Angadpur, Durgapur – 713215, West Bengal, India |
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Tel. No.: |
91-343-2590831 / 840 |
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Factory 4 : |
Adhunik Ispat
Limited Raturia, Angadpur, Durgapur – 713 215, West Bengal, India |
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Tel. No.: |
91-343-2591105 |
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Branch Offices : |
208-209, II Floor, Padma Tower-II, Rajendra Place, New Delhi – 8,
India 91-11-25860809/10 404, Centre Point, Near Hotel Kohinoor Continental, J. B. Nagar,
Andheri Kurla Road, Andheri East, Mumbai – 400 059, India 91-22-28256948 K-25, Ambattur, Industrial Estate, Chennai – 600 058, India 91-44-43108225 Shivam Chamber, Opp. Old Post Office Road, Mandi Gobindgarh, Punjab –
14730 91-1765-255181 / 182 2, Inner Circle Road, Shanti Hari Tower, Bistupur, Jamshedpur – 831
001, India 91-657-2224678 / 4622 / 7001 442, Overlock Road, 1st Floor, Ludhiana, India 91-161-2530458 House No. 30A, Plot-1, Manoj Building, Central Bazar Road, Ramdespeth,
Nagpur, India 91-712-2440113 Raturia, Village – Angadpur, Durgapur – 713215, India 91-343-2590831 / 840 Plot No. 19-23, EPIP Zone, Raja Bagan, Distt. RI-BHOI, Byrnuhat,
Meghalaya – 793 101, India 91-9954196165 C/11, Sunderpur, (Near Namghar), R. G. Barua Road, P.O. Dispur,
Guwahati, India 91-361-2200265 Tele Fax No. : 91-361-2201054 A/85, 1st Floor, Sahid Nagar, Bhubaneshwar, India 91-674-2540441 401/A, City Tower, 17, Boat Club Road, Dhole Patil Road, Pune – 01,
India 91-20-32413600 |
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DIRECTORS
|
Name : |
Mr. Ghanshyamdas Agarwal |
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Designation : |
Chairman |
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Date of Birth/Age : |
16.10.1957 |
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Name : |
Mr. Jugal Kishore Agarwal |
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Designation : |
Director |
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Date of Birth/Age : |
05.10.1951 |
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Name : |
Mr. Nirmal Kumar Agarwal |
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Designation : |
Director |
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Date of Birth/Age : |
11.11.1962 |
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Name : |
Mr. Mohanlal Agarwal |
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Designation : |
Director |
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Date of Birth/Age : |
10.05.1964 |
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Name : |
Mr. Mahesh Kumar Agarwal |
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Designation : |
Director |
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Date of Birth/Age : |
10.05.1966 |
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Name : |
Ms. Supriya Gupta |
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Designation : |
Director |
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Name : |
Mr. Nihar Ranjan Hota |
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Designation : |
Director |
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Name : |
Mr. Lalit Mohan Chatterjee |
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Designation : |
Director |
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Name : |
Mr. Manoj Kumar Agarwal |
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Designation : |
Managing Director |
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Date of Birth/Age : |
06.08.1969 |
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Name : |
Mr. Ram Gopal Agarwal |
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Designation : |
Additional Director and Indirect Director |
KEY EXECUTIVES
|
Name : |
Ms. Sougata Sengupta |
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Designation : |
Director |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
(As on 31.03.2007)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoter and Promoter Group |
58409412 |
64.02 |
|
Mutual funds and Axis Bank |
10076035 |
11.05 |
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Financial institutions and banks |
380 |
0.00 |
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Foreign institutional investors |
4617925 |
5.06 |
|
Bodies corporate (other than those covered above) |
9471879 |
10.38 |
|
NRI / OCB’s |
95643 |
0.10 |
|
Indian public |
8491105 |
9.31 |
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Others (Trusts and clearing members) |
68868 |
0.08 |
|
Total |
91231247 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufactures a wide variety of Special Steel of International
Quality for different applications in Automobile ,Construction and
Engineering. |
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Products : |
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PRODUCTION STATUS
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Sponge Iron |
Tonnes |
150000 d |
112564 |
|
Pig Iron |
Tonnes |
178160 d |
63185 |
|
Hot Metal |
Tonnes |
|
64364 |
|
Billets |
Tonnes |
250000 d |
178269 |
|
Rolled Product |
Tonnes |
|
36743 |
|
Silco Manganese |
Tonnes |
16880 d |
29 |
|
Oxygen Gas |
M. Cu. |
9792000 d |
7899658 |
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By-Product : Nitrogen Gas |
Tonnes |
|
1782140 |
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By-Product : Iron Ore Fines |
Tonnes |
|
121054 |
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By-Product : Coal Fines |
Tonnes |
|
10508 |
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By-Product : Coal Midding |
Tonnes |
|
47162 |
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By-Product : Nut Coke |
Tonnes |
|
2021 |
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By-Product : Coke Fines |
Tonnes |
|
7901 |
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By-Product : Runner and Skull / Scrap |
Tonnes |
|
3237 |
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By-Product : End Cutting and Internal Scrap |
Tonnes |
|
2314 |
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By-Product : Granulated Slag |
Tonnes |
|
52672 |
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Job Charges |
Tonnes |
|
- |
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Trading Goods |
Tonnes |
|
- |
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Miscellaneous |
Rupees |
|
- |
Notes:
·
Includes excise duty, transportation and
delivery charges
·
Afetr adjusting shortages.
·
Includes Captive consumed Sponge Iron –
107595.550 MT, Pig Iron – 3186 MT, Hot Metal – 64364 MT, Oxygen – 7896228 M.Cu,
Nitrogen – 1782020 M.Cu, Billet – 38199 MT, Scrap 1414 MT, Coal Midding 22478
MT, Nut Coke 414.43 Mt, Runner Scrap 3170MT
·
Installed Capacity is as certified by the
Management and relied upon by the Auditors.
·
Excluding own consumption / transferred to Raw
Material after rescreening.
·
Includes Pig Iron Nil , Billet 5546 MT, Rolled
Products 767 MT, Scrap 175 MT in Transit and Billet 61.193 and 3747.95 MT,
Rolled Product 345.907 and 2743.76 MT lying with consignment ag.
·
Includes Billet Nil, Iron Ore Fines 16923 MT
lying in siding.
GENERAL
INFORMATION
|
Alliances : |
·
Telco ·
SKF Bearings Limited ·
Fag Bearings India Limited ·
MICO ·
Sundaram Fastners Limited ·
Siemens (India) Limited ·
Tractor Engineers Limited ·
Ashok Leyland ·
Widia (India) Limited ·
Sandvik Asia Limited ·
Shriram Rings and Pistons Limited ·
Kirloskar Oil Engines Limited ·
M M Forgings Limited ·
Rane Engine Valves Limited ·
Videocon Narmada Glass ·
Hindalco Insustries Limited ·
NRB Bearings Limited ·
Cummins India Limited ·
Auto Field Engineers Private Limited |
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Bankers : |
·
State Bank of India ·
Indian Overseas Bank ·
Punjab National Bank ·
State Bank of Mysore ·
Standard Chartered Bank ·
Indusind Bank ·
IDBI Bank |
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Facilities : |
(Rs. In
Millions)
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Banking
Relations : |
Good |
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Auditors : |
S R Batliboi and Company Chartered Accountants |
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Associates : |
·
Sungrowth Shares and Stock Limited ·
Mahananda Suppliers Limited ·
United Minerals ·
Adhunik Corporation Limited ·
Adhunik Steels Limited ·
Adhunik Alloys and Power Limited ·
Zion Steel Limited ·
Adhunik Meghalaya Steels Private Limited ·
Futuristic Steels Private Limited ·
Pragati Ispat Udyog ·
Swarnarekha Steel Industries ·
Ganesh Enterprises ·
Adhunik Infotech Limited ·
Ashunik Ispat Limited ·
Sri. M. P. Ispat and Power Private Limited ·
Shivalik Transport Company |
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Subsidiaries : |
Unistar Galvanisers and Fabricators Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
100000000 |
Equity Shares |
Rs. 10/- each |
Rs. 1000.000 millions |
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|
|
|
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Total |
|
Rs. 1000.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
91231247 |
Equity Shares |
RS. 10/-
each |
Rs. 912.312
millions |
|
|
|
|
|
|
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Total |
|
Rs. 912.312 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
912.312 |
912.312 |
580.700 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1718.299 |
1278.762 |
180.000 |
|
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
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NETWORTH |
2630.611 |
2191.074 |
760.700 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
4129.608 |
1740.048 |
897.500 |
|
|
2] Unsecured Loans |
482.183 |
419.425 |
42.400 |
|
|
TOTAL BORROWING |
4611.791 |
2159.473 |
939.900 |
|
|
DEFERRED TAX LIABILITIES |
426.887 |
218.920 |
0.000 |
|
|
|
|
|
|
|
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TOTAL |
7669.289 |
4569.467 |
1700.600 |
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APPLICATION OF FUNDS |
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|
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|
|
|
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FIXED ASSETS [Net Block] |
3565.963 |
2015.262 |
509.200 |
|
|
Capital work-in-progress |
1902.492 |
478.882 |
1018.200 |
|
|
Capital Expenditure |
131.779 |
21.073 |
0.000 |
|
|
|
|
|
|
|
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INVESTMENT |
80.635 |
0.765 |
0.800 |
|
|
DEFERREX TAX ASSETS |
|
|
|
|
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|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2021.114
|
785.998 |
128.100 |
|
|
Sundry Debtors |
829.623
|
964.251 |
136.100 |
|
|
Cash & Bank Balances |
328.665
|
1178.752 |
58.700 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
678.784
|
335.940 |
184.100 |
|
Total
Current Assets |
3858.186
|
3264.941 |
507.000 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
1732.789
|
1142.778 |
333.200 |
|
|
Provisions |
137.346
|
69.430 |
2.500 |
|
Total
Current Liabilities |
1870.135
|
1212.208 |
335.700 |
|
|
Net Current Assets |
1988.051
|
2052.733 |
171.300 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.369 |
0.752 |
1.100 |
|
|
|
|
|
|
|
|
TOTAL |
7669.289 |
4569.467 |
1700.600 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
7357.528 |
4237.802 |
1421.400 |
|
|
Other Income |
83.256 |
27.700 |
2.700 |
|
|
Total Income |
7440.784 |
4265.502 |
1424.100 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
Export Earnings |
233.102 |
0.000 |
0.000 |
|
|
Commission Earnings |
0.000 |
0.000 |
0.000 |
|
|
Other Earnings |
0.000 |
0.000 |
0.000 |
|
|
Total Earnings |
232.102 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
Raw Materials |
940.302 |
628.856 |
0.000 |
|
|
Stores & Spares |
19.437 |
8.740 |
0.000 |
|
|
Capital Goods |
63.082 |
22.792 |
0.000 |
|
|
Total |
1022.821 |
660.388 |
0.000 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
857.709 |
551.025 |
106.300 |
|
|
Provision for Taxation |
83.022 |
213.948 |
35.400 |
|
|
Profit/(Loss) After Tax |
774.687 |
337.077 |
70.900 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Excise Duty on Stocks |
11.150 |
14.741 |
119.700 |
|
|
Manufacturing Expenses |
1492.681 |
504.704 |
57.200 |
|
|
Administrative Expenses |
591.973 |
210.284 |
126.900 |
|
|
Personnel Expenses |
104.709 |
37.894 |
0.000 |
|
|
Raw Material Consumed |
2128.629 |
1165.122 |
872.200 |
|
|
Purchases of Trading Goods |
2274.767 |
1601.229 |
0.000 |
|
|
Increase/(Decrease) in Finished Goods |
(405.207) |
(4.028) |
14.100 |
|
|
Interest |
261.841 |
114.849 |
31.000 |
|
|
Preliminary Expenditure Written Off |
0.383 |
0.383 |
0.000 |
|
|
Power and Fuel |
0.000 |
0.000 |
50.200 |
|
|
Share of Loss in Partnership Firm |
0.321 |
0.000 |
0.000 |
|
|
Depreciation & Amortization |
113.430 |
68.837 |
22.100 |
|
|
Other Expenditure |
8.398 |
0.462 |
24.400 |
|
Total Expenditure |
6583.075 |
3714.477 |
1317.800 |
|
SUMMARISED RESULTS
|
PARTICULARS |
|
|
|
31.03.2008 |
|
|
|
|
|
(Full Year) |
|
Sales Turnover |
|
|
|
10045.900 |
|
Other Income |
|
|
|
111.000 |
|
Total Income |
|
|
|
10156.900 |
|
Total Expediture |
|
|
|
8443.600 |
|
Operating Profit |
|
|
|
1713.300 |
|
Interest |
|
|
|
567.600 |
|
Gross Profit |
|
|
|
1145.700 |
|
Depreciation |
|
|
|
232.500 |
|
Tax |
|
|
|
104.200 |
|
Reported PAT |
|
|
|
804.500 |
|
Dividend (%) |
|
|
|
120.000 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity
Ratio |
1.4 |
1.05 |
1.23 |
|
Long Term
Debt-Equity Ratio |
0.95 |
0.7 |
1.19 |
|
Current Ratio |
1.2 |
1.33 |
1.31 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
2.75 |
3.47 |
3.41 |
|
Inventory |
5.78 |
10.09 |
9.5 |
|
Debtors |
9.05 |
8.38 |
17.72 |
|
Interest Cover
Ratio |
3.88 |
5.36 |
4.43 |
|
Operating Profit
Margin(%) |
15.64 |
16.18 |
11.21 |
|
Profit Before
Interest And Tax Margin(%) |
14.24 |
14.69 |
9.66 |
|
Cash Profit
Margin(%) |
10.94 |
8.8 |
6.54 |
|
Adjusted Net
Profit Margin(%) |
9.55 |
7.31 |
4.99 |
|
Return On
Capital Employed(%) |
19.94 |
22.4 |
12.49 |
|
Return On Net
Worth(%) |
32.13 |
23.15 |
14.95 |
LOCAL AGENCY
FURTHER INFORMATION
Overview:
·
The
Company produces special and alloy steel through the EAF-LR-CCU method. The SMS
unit consists of an electric arc furnace (250,000 MTPA), ladle refining furnace
and continuous casting machine for the production of billet and rounds.
·
Sponge
iron, the output from the DRI unit, constitutes about 60 per cent of the input
for steel making. The Company has one unit, comprising five kilns for the
manufacture of the sponge iron. Almost 100 per cent of the output is used
internally.
Highlights, 2006-07:
Achieved the longest
casting duration (43 hours) and maximised the quantity of heat tapped and cast
in a day at 24.
Commercialised new grades of steel 16CrNi4/V2525-95/36Si7 - used by the
auto-component sector.
Successfully established
the 200 sq. section casting in the first attempt.
Improvement initiatives:
The Company reported the
following improvements in its steel melting shop:
·
Commissioned
the electro magnetic stirrer, facilitating a homogenous composition of billets
and blooms, improving product quality.
·
Commissioned
the vacuum degassing unit, which enabled the manufacture of clean specialty
steel.
·
Improved
the design and drive optimisation, reduced down-circuit training time from 24
to 14 hours and improved machine utilisation in the sponge iron unit.
·
Modified
the dust settling chamber (DSC) and wet scrapper unit in the DRI plant, which
ensured a proper handling of the dust particles emitted from the production
process.
The way ahead:
·
Commissioning
of the additional second steel making facility as an initiative to move into
value-added rolled products.
·
Backward
integration initiatives like setting up the sinter plant, oxygen plant, railway
siding and ferro-alloy facility will strengthen margins when dovetailed with
the rolling mills.
·
Waste
heat generated by the DRI plant will be used to generate power in the Company's
captive power plants.
Quality management:
Overview:
Quality - purity and consistency - is of critical importance in a business
where the products address sophisticated downstream and fail-safe
applications.
The Company's commitment to
quality is driven by its quality policy, where:
·
Raw
materials (ore and coal) are checked for their properties at the source and
within the plant.
·
Necessary
parameters are checked for material in process at various units for an
adherence to quality specifications, with a special emphasis in the EAF and
ladle furnace (during alloy addition).
·
Every billet
being rolled out is tested across various parameters and colour-coded according
to the chemical composition for proper stacking and seamless client
delivery. This culture has been reinforced through the following
quality initiatives:
·
Two
departments for enhancing and protecting quality across products, grades and
batches.
·
Necessary
investments in quality control laboratories within the plant, operated by 18
qualified professionals.
·
Over
the years, the Company has created a quality-testing infrastructure that ranks
among the best in the Indian steel industry comprising the following:
·
State-of-the-art
testing facility with specialised equipment like an OE spectrometer,
metallurgical microscope, muffle furnace, brinnel/ rockwell hardness tester, impact
testing machine, ultrasound flaw detector and profile projector, among
others.
·
Facilities
for undertaking macro and micro examination; the former undertakes the analysis
of segregation, internal soundness, grain flow and dendrites while the latter ascertains
grain size, inclusion rating, microstructure, de-carburisation as well as
conducts hardness testing, step down test and blue fracture test.
Highlights, 2006-07:
* Commissioned the
vacuum degassing unit during the year, enabling the Company to obtain the
approval of OEMs for meeting their steel requirements.
*Installed the
electro magnetic stirrer at the continuous casting unit for a homogenous mix of
the hot metal before being cast into billets and blooms.
*Working towards
obtaining the coveted TS 16949 quality certification.
* Total product management
(TPM) initiative that will deliver total customer satisfaction through
continuous process improvement. It requires a streamlined, modular structure
allowing a rapid implementation aligned to international standards.
Quality analysis:
* Raw materials (ore
and coal) are checked for their properties at the source and within the
plant.
* Necessary parameters are checked in process at the various units for an
adherence to quality specifications, with a special emphasis on the EAF and
ladle furnace (during alloy addition).
* Every billet being
rolled out is tested across various parameters and colour-coded according to
chemical composition for proper stacking and seamless client delivery.
Quality enhancement initiatives:
* Created a new
quality control laboratory with a gas analysis expertise, especially in the
vacuum degassing unit for an investment of Rs. 1.20 crore.
* An investment in
the rolling mill is expected to strengthen the Company's quality commitment.
Previously, the Company outsourced the rolling of its billets to nearby rolling
mills.
Marketing:
Overview:
The Company manufactures auto and non-auto grade special steel.
Auto-grade special steel is marketed to large consuming markets in Delhi,
Ludhiana, Mumbai, Chennai and Nagpur, while non-auto grade special steel is
marketed to engineering companies, TMT bar makers and the Railways. The Company
differentiates itself from competitors through an ability to customise products
according to requirements.
Highlights, 2006-07:
* Received the TS-16949 certification, which will enable the Company to
supply products to US-based OEM manufacturers.
* Successfully supplied steel for the manufacture of critical auto-component
parts to Tier 11 auto companies during the year.
Way ahead:
The Company expects to emerge as the number-one manufacturer of
auto-grade special steel in terms of volume, variety, quality and profitability
through its ability to customise products in line with specific needs.
Opportunities in
alloy steel:
According to Industrial Development Services Pvt. Ltd. (IDSPL) estimates, the
availability of alloy and special steels in India is likely to fall short of
requirements from 2008-09 onwards, The gap in domestic availability is likely
to increase to almost I . 6-2.0 million tonnes per annum by 201314 in the
relative absence of new capacities.
With Adhunik's product mix being skewed towards the automobile and the
autocomponent sector, it would be relevant to highlight the demand expected in
this sector.
Automobile:
The Indian automobile industry registered an attractive growth, driven by
a growing economy, increasing industrial requirement, growing individual needs
and strengthening earning propensity. Most automobile companies are increasing
capacities, which is expected to grow the domestic market significantly.
Two-wheelers:
Hero Honda is planning to invest Rs. 0.8 billion over the next three
years to increase its production capacity by 1.5 million units. Bajaj Auto is
targeting a volume of 2.85 million units, including exports of about 3,65,000
units for 2007.
Commercial vehicles (CV):
The CV sector is expected to almost double its output by 2008, considering the
expansion plans announced by CV makers. The industry, which produced around 3.5
lacs CVs in 2005-06, is expected roll out an additional 2.35 lacs CVs by
2008.
Cars:
Automobile companies in India will roll out more than double the number of cars
- three million - that they make today.
Auto-components:
The Indian auto components industry possesses the potential to record a
CAGR of 16.48 per cent to a range of USD 33-40 billion by 2015. including USD
20-25 billion of exports (Source: McKinsey). India's USD 6.8 billion industry
recorded a CAGR of 17 per cent between 1998 and 2003 and is expected to post a
15 per cent CAGR till fiscal 2012 (Source: Auto Components Manufacturers
Association of Indict).
The exponential growth in exports is largely due to the emergence of India as a
sourcing hub for the global OEMs owing to its advantage of low cost and the
full-service supply of quality products. India is set to become the
manufacturing hub for the USD1-trillion global auto-component industry.
Other
applications:
Other end-users of alloy steel include railways, Defence, seamless steel and
pipes. These segments are also likely to do well on the back of buoyancy in the
country's economic growth and favourable government-aided initiatives.
Railways:
The demand for alloy and special steels by the railway sector is expected
to record a CAGR of about four per cent till 2013-14 to about 1,07,000
MTPA.
Defence:
An increased budgetary allocation for India's Defence sector, improvement
in equipment and the replacement of conventional infrastructure with
contemporary versions are expected to grow the country's alloy steel deman(
cent until 2013-14.
Seamless steel pipes and tubes:
One of the major applications of seamless steel pipes is in the transportation
of petroleum products and gas. Considering the growing demand for petroleum
products and gas, the opening up of India's oil and gas sector to the private
sector and permission to international majors to participate in the business
space have catalysed the demand for these pipes and tubes. ONGC, the largest
producer of oil in the country, plans to invest over USD 2 billion for
undertaking an enhanced oil recovery programme in 14 oilfields, which means
that an estimated 12,000 km of pipeline will be needed over five years.
Opportunities in stainless steel:
According to ISSF estimates
(as revised in October 2006), the global stainless steel industry is expected
to grow by 14.3 per cent annually. The production of stainless steel in India
is estimated to reach 4 million tonnes by 2010-11. This optimism is based on
the following realities:
* Potential for high
growth in India: Higher expected growth in GDP above eight per cent,
existing low per capita consumption, being progressively corrected, the
availability of key natural resources like manganese and chrome ore, low
manpower cost and a projected stainless steel demand growth of 12 per cent per
annum.
* Potential for stainless steel in architecture, building and
construction (ABC) in India:
Railways:
The Indian Railways has a fleet of 300 stainless steel coal wagons under trial.
Having assessed their benefits, the Railway Budget for 2006-07 paved the way
for the introduction of light-weight, corrosion-free stainless steel (and
aluminium) coal and ore wagons in place of corten steel wagons.
There will be no new orders
for corten steel wagons for hauling coal and ores. The better payload to tare
weight (weight of the empty wagon along with the materials loaded) ratio of 4:1
(2.5:1 for corten steel wagons) will offset the higher initial cost of
stainless steel wagons. So, the Indian Railways will be able to step up its
load-carrying capacity against a higher investment in stainless steel wagons
and, in turn, save Rs. 6 billion over the long run.
In the long-distance passenger cars section, plans are afoot to replace the
present corten-steel long-distance coaches with lightweight all-stainless steel
coaches. These will be in unpainted stainless steel grade (301 LN) like the
Delhi Metro. Initially, the replacement will be for the German-designed coaches
but later will extend to all long-distance passenger coaches. RCF and ICF roll
out 1,000 coaches per year and with the consumption of approximately 6.5 tonnes
of stainless steel per coach, the replacement can potentially increase
stainless steel usage by 13,000 tonnes per annum in the railways sector
alone.
Airports:
In Mumbai and Delhi, the existing airports are being modernised and new
large capacity terminals are under construction with overseas participation.
Similarly, new airports in Bangalore, Hyderabad, Chennai and Kolkata are coming
up or are to begin work. About 40 other airports in the country are also slated
for upgradation and modernisation. Many established items like handrails,
signage, column cladding, counter tops, doorlwindow frames, baggage carousels
and tens of thousands of baggage trolleys, interior and street furniture
canopies, roofs, washroom facilities, etc. will utilise stainless steel for the
revamped and new airports.
Commonwealth Games:
As part of the preparation
for the Commonwealth Games in 2010, the New Delhi Municipal Council (NDMC) has
embarked upon sprucing New Delhi. It is replacing all the existing bus shelters
in its jurisdiction (about 200) with sleek stainless steel shelters. It is also
replacing a large number of road dividers with stainless steel barriers. Other
items slated for stainless steel use include playground slides, swings and
seating in public parks and public spaces, handrails, planters, litter bins,
signage for marketplace and shopping areas, pictograms (indicating location of
public utilities) among other utilities. The Delhi Transport Corporation (DTC)
is replacing about 225 old bus stops along its routes with high-tech bus
shelters in stainless steel. Stainless steel usage per bus shelter is expected
to be about 900 kg. The Municipal Corporation of Delhi (MCD), on its part, is
cladding about 800 painted carbon steel bus stops with stainless steel
sheets.
Malls:
The Indian retail sector is expected to be an important driver of India's urban
infrastructure. With India likely to emerge as the youngest nation by 2020, it
is expected that consumption patterns will complement growth coming out of its
organised retail sector, leading to additional investments and space
requirements. Most of these malls sport stainless steel staircase handrails,
handles, locks, public seating and balcony railings as well as used in food
courts, etc. Some of them also extend the usage to wal claddings and landscape
architecture. This market will grow further as malls, multiplexes and plazas
come up in large numbers in Tier-2 cities as well.
Accounting Policies
and Notes on Accounts
Miscellaneous Expenditure
Preliminary expenses
are amortised over a period of five years.
(Rs. In Millions)
|
|
31.03.2007 |
|
Estimated amount of contracts remaining to be executed on
capital account and not provided for (Net of advances). |
826.379 |
|
Contigent Liabilities not provided for in respect of |
|
|
Claims and Government demands against the Company not
acknowledge as debt: |
|
|
Excise |
2.899 |
|
Sales tax |
26.325 |
|
Outstanding Bank Guarantee |
33.580 |
|
Corporate guarantee issued to Bank on behalf of Adhunik
Infotech Limited, a company under the same management. |
20.000 |
The Cash Credit and other workin capital facility from banks
are secured by the hypothecation of consumable stores, raw materials, finished
goods, process stock, book debts (both present and future).
Both Rupee Term Loan and working capital facility from banks
are further secured by extension of equitable mortgage of landed properties at
village – Jugiana, Dist. – Ludhiana, Punjab, registered in the name of M/s.
Adhunik Steels Limited, extension of equitable mortgage of landed properties at
Jamshedpur, registered in the name of M/s. Unistar Galbanisers and Fabricators
Private Limited; Corporate guarantee of M/s. Adhunik Steels Limited and M/s.
Unistar Galvanisers and Fabricators Private Limited and personal guarantee of
all the directors of the Company.
Term loan and Equipment/Vehicle Finance loan aggregating to
Rs. 283.421 millions are payable within one year.
Short term loan from Banks are secured by personal guarantee
of the Managing Director of the Company. Moreover, short term loan from ABN
Amro Bank is secured by personal guarantee of the Chairman of the Company.
The Captive Power Plant, Extension of the Steel Melting Shop
and Ferro Alloy Plant having achieved the technical parameters of operation and
stabilization of production efficiency, has commenced commercial operations.
Accordingly, assets of Rs. 1541.559 millions (including proportionate
allocation of preoperative expenditure of Rs. 137.106 millions have been
capitalized during the year.
The Hon’ble Calcutta High Court vide its Dictated Order
dated 7th May, 2007 has allowed the Company to utilise the Securities
Premium Account shown under the head ‘Reserve and Surplus’ towards meeting the
Net Deffered Tax liability computed as per the Accounting Standard on’
Accounting for Taxes on Income’ (AS-22) prescribed by the Institute of
Chartered Accountants of India. Accordingly, the Securities Premium Account has
been utilized towards meeting the Net Deffered Tax Liability arising during the
year amounting to Rs. 208.347 millions. Due to aforesaid accounting treatment,
the Profit for the year is higher by and Securities Premium Account is lower by
Rs. 208.347 millions.
A fire broke out in one of the record keeping godown at
Company’s division at Rourkela on 4th
February, 2007 where certain supporting documents relating to freight inward for
the financial year 2003-04, 2004-05, 2005-06 and for the period upto 31st
January, 2007 have been destroyed by fire. The supporting documents destroyed
for the current financial period amounts to Rs. 85.000 millions
(approximately).
Fixed Assets :
·
Freehold
Land
·
Buildings
·
Plant
and Machinery
·
Vehicles
·
Computers
·
Furniture
and Fixtures
·
Office
Equipments
·
Intangible
·
Intangible
Assets
Web Details :
Subject is a renowned name in Iron &
Steel and Ferro Alloys industry with over four decades of extensive as well as
in-depth knowledge in manufacturing and marketing the finest quality of Iron
and Steel products. The Group was founded by the late Mahadeo Prasad
Agarwal, under whose stewardship the group grew from strength to strength.
The group has manufacturing facilities located in Eastern India in the States
of West Bengal, Orissa, Jharkhand and Meghalaya which are having major
locational advantages in terms of availability of row material, power, skilled
manpower and logistics.
With on integrated
business model from Iron are finished products, the group manufactures a chain
of value added products for the Automobile ,Construction and Engineering
Industry. The State of Art technology employed by the group and a continuous
focus on Cast Optimization and Waste Management makes it one of the most
competitive suppliers of high quality steel products to the utmost satisfaction
of its discerning customers.
Subject is the
Flagship Company of “ADHUNIK GROUP” of industries and represents on integrated
Steel Plant located at Rourkela, Orissa engaged in the production of value
Added Steel, Alloy Steel and Stainless Steel products catering to the
automobile, construction engineering and household industry. The State of Art
technology plant includes DRI plant, Coal Washery, Blast Furnace, Electric Arc
Furnace, Ladle Refining Furnace ,Continuous Casting facility ,Oxygen plant and
a Captive Power plant.
The Company
manufactures wide range of products in Carbon, Alloy, and Spring Steel
confirming National & International standard / specifications. The Company
strongly focuses on reduction of production cost and zero waste management
practices to make it one of the lowest cost producers of best Quality steel
internationally with commitment to deliver products & services to the entire
satisfaction of our customers.
PROMOTERS:-
Name : Jugal
Kishore Agarwal
Date of Birth:
05.10.1951
Profile : He is a
law graduate from Calcutta University. He has more than two and half decades of
experience in the steel sector. Mr. Agarwal has been a guiding force behind the
Group and has played a key role in envisioning the various business initiatives
of the group. He possesses expertise in financial matters and has been an
important contributor in all the financial matters of the group. He is one of the
Directors of the Group.
Name: Ghanshyam
Das Agarwa
Date of Birth:
16.10.1957
Profile: He is a commerce
graduate from Calcutta University. He has over 25 years of experience in the steel
sector. He is looking after group activities in the state of Assam and
Meghalaya and the social activities being undertaken by the group. He is one of
the Directors of the Group.
Name: Nirmal
Kumar Agarwal
Date of Birth:
11.11.1962
Profile: He is a science
graduate. He has about 20 years of experience in the steel sector and has been
mainly involved in the marketing activity of the Group. Under his guidance the
Group started operations in Mandi Gobindgarh, Punjab the hub of steel trading
in India. He is keenly involved with various Industrial Associations. He is
also looking after the mining activities of the Group. He is one of the
Directors of the Group.
Name: Mohan Lal
Agarwal
Date of Birth:
10.05.1964
Profile: He is a
commerce graduate. He has over 17 years of experience in the steel sector. He
is looking after group's day to day Administrative activities. He is one of the
Directors of the Group
Name: Mahesh
Kumar Agarwal
Date of Birth:
10.05.1966
Profile: He is a commerce
graduate from Calcutta University. He has over 16 years of experience in the
steel sector. He has hands on experience in all the accounting and financials
of the Company. He is accredited for setting up the first sponge iron plant and
rolling mill of the Group in the year 2001. He is looking after the plants
situated at Durgapur. He is one of the Directors of the Group.
Name: Manoj
Kumar Agarwal
Date of Birth:
06.08.1969
Profile: He is a graduate
in engineering from REC Kurukshetra. He has more than 13 years of experience in
the steel industry. He has visualised the road map of growth for the group. He
is a dynamic entrepreneur and has had a major influence in shaping up the
future operations of the group. He is one of the Directors of the Group.
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.42.92 |
|
UK Pound |
1 |
Rs.84.48 |
|
Euro |
1 |
Rs.66.66 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
67 |
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 |
|