MIRA
INFORM REPORT
|
Report Date : |
24.06.2008 |
IDENTIFICATION
DETAILS
|
Name : |
SIMPLEX
INFRASTRUCTURE LIMITED |
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Formerly Known As : |
SIMLEX CONCRETE
PILES INDIA LIMITED |
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Registered Office : |
Simplex House,
27, Shakespeare Sarani, Kolkata – 700 017 |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
19.12.1924 |
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Com. Reg. No.: |
21-4969 |
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CIN No.: [Company
Identification No.] |
L99999WB1924PLC004969 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALS00978F |
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PAN No.: [Permanent
Account No.] |
AAECS0765R |
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Legal Form : |
A public limited liability company. The company’s shares are listed on
the stock exchange. |
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Line of Business : |
Civil Engineering
Company doing mainly the Contractors Business. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 14000000 |
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Status : |
Excellent |
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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 having fine track. Financial position of the
company is good. Trade relations are fair. Payments are usually correct and
as per commitments. The company is doing very well. It can be
considered good for any normal business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered Office : |
Simplex House,
27, Shakespeare Sarani, Kolkata – 700 017, India |
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Tel. No.: |
91-33-23011600 /
22839953/5967 |
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Fax No.: |
91-33-2283 5966 /
65 /64 / 22835964/65/66 |
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E-Mail : |
simplexkolkata@simplexinfrastructures.com banwari.bajoria@simplexinfrastructures.com
simplexcal@simplexindia.com calpersonnel@simplexindia.com calpurchase@simplexindia.com calaccts@simplexindia.com |
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Website : |
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Area : |
Owned |
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Branches : |
Delhi Office Vaikunth’, 2nd floor, 82-83, Nehru Place, New Delhi – 110 019, India Fax: 91-11-2646 5869 / 91-22-24912735 Email: scpl.del@smj.sril.in delpersonnel@simplexindia.com delpurchase@simplexindia.com delaccts@simplexindia.com Mumbai Office 502-A, Poonam Chambers, Shiv Sagar Estate A wing, Dr. A.B. Road /24922064/ 24929034/ 24913481/ 8397/ 1849/ 3537 bompersonnel@simplexindia.com bompurchase@simplexindia.com bomaccts@simplexindia.com Chennai Office: Doha office: Doha, Qatar. Tel: 974-4435408 / 4421545 / 4328843 Dubai office: 21,Casa
Major Road, Egmore, Chennai - 600 008, India Tel. No.: 91-44-8584802/03/04 Fax No. :91-44-8584802/05 E-Mail chenpersonnel@simplexindia.com chenpurchase@simplexindia.com chenaccts@simplexindia.com
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DIRECTORS
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Name : |
Mr. B.D. Mundhra |
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Designation : |
Chairman and
Managing Director bdm@simplexindia.com |
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Name : |
Mr. H.B. Guha
Biswas |
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Designation : |
Director hguhabiswas@simplexindia.com |
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Name : |
Mr. A.D. Mundhra |
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Designation : |
Director adm@simplexindia.com |
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Name : |
Mr. A. Mukherjee |
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Designation : |
Director amukherjee@simplexindia.com |
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Name : |
Mr. Rajiv Mundhra |
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Designation : |
Director rajivmundhra@simplexindia.com |
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Name : |
Mr. A. K. Chatterjee |
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Designation : |
Director akchatterjee@simplexindia.com
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Name : |
Dr. R. Natarajan |
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Designation : |
Director |
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Name : |
Mr. B. Sengupta |
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Designation : |
Director |
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Name : |
Mr. S. Dutta |
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Designation : |
Director |
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Name : |
Mr. P.K. Nandy |
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Designation : |
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Name : |
Mr. N.N.
Bhattacharyya |
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Designation : |
Director |
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Name : |
Mr. Sheokishan
Damani |
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Designation : |
Director |
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Date of Appointment : |
06.10.2005 |
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Name : |
Mr. Ashish Dhawan |
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Designation : |
Director |
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Date of Appointment : |
06.10.05 upto 19.05.2006 |
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Name : |
Mr. Kunal Shroff |
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Designation : |
Director |
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Date of Appointment : |
19.05.2006 |
KEY EXECUTIVES
|
Name : |
Mr. S. Ray |
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Designation : |
Chief Technical
Manager |
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Name : |
Mr. D. N. Basu |
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Designation : |
General Manager |
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Name : |
Mr. S. Guha |
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Designation : |
Technical
Director |
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Name : |
Mr. C. N. Raman |
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Designation : |
Joint General
Manager cnraman@simplexindia.com |
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Name : |
Mr. J. S.
Raghavan |
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Designation : |
Chief Commercial
Manager jsraghavan@simplexindia.com |
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Name : |
Mr. B.L. Bajoria |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of
Shareholders (as on 31.03.2007) |
No. of Shares |
Percentage of
Holding |
|
Promoters and
Director |
22023522 |
51.37% |
|
UTI and Mutual
Funds |
4744452 |
11.07% |
|
Banks and FIs |
4341827 |
10.12% |
|
NRI / OCBs |
462809 |
1.08% |
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Corporate |
6910459 |
16.12% |
|
Individuals |
4389261 |
10.24% |
|
Total |
42872330 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Civil Engineering
Company doing mainly the Contractors Business. |
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Products : |
·
Piling ·
Concrete
Works ·
Structural
Steel ·
Road
Work ·
Miscellaneous
Works |
PRODUCTION STATUS
|
Particulars |
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|
Unit |
Actual
Production |
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Electricity Dialysis
Unit |
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Nos. |
12 |
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Electricity |
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KW |
820 |
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Production
Electricity |
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KW |
219 |
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Sales electricity
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KW |
219 |
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GENERAL
INFORMATION
|
Suppliers : |
·
Monsa
Industries, ·
Sanjoy
Engineering Co., ·
Scaffs
Engineering & Fabricators, ·
K.K.
Engineering Works, ·
Gamzen
Plast (P) Ltd., ·
Steel
Industries Corporation of Bombay, ·
Dossisen
Fabrico, ·
Ashok
Engineering and Construction Limited, ·
Air
Bridge and ·
SAS
Computers Pvt. Limited. |
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Customers : |
Private Sector Ø Alsthom Export Ø G.K.W. Limited Ø Piramal Group Ø Apeejay Group Ø General Electric Technical Services
Company Inc. Ø RPG Group Ø Asea Brown Boveri Limited Ø Hindusthan Lever Limited Ø Siemens AGUB KWU Ø Backau Wolf India Limited Ø ICI Limited Ø Siemens Limited Ø Bajaj Auto Limited Ø Indian Aluminium Company Limited Ø Spic Capag - NKK - Toyo Consortium Ø Bata India Limited Ø ITC Limited Ø SPIC Fine Chemicals Limited Ø Bausch and Laumb (India) Private Limited Ø Jenson and Nicholson Limited Ø Tata Chemicals Limited Ø Bindal Agro Chem. Limited Ø Larsen and Toubro Limited Ø Tata Consultancy Engineering Ø Bira Jute Ø LML Limited Ø Tata EBASCO Ø Birla Bros Limited Ø Lupen Chemicals Limited Ø Tata Electric Company Limited Ø Birla Carbide factory Ø Mallya Group Ø Tata Iron and Steel Company Ø Birla Industrial and Technological Museum Ø Mcnally Bharat Engineering Limited Ø Tata Ore Bin Ø Birla Linoleum Factory Ø Mitsubishi Heavy Electrical Limited Ø Tata Power Company Limited Ø Birla Textile Machinery Corporation Ø Modi Group Ø Tata Projects Limited Ø Chhabria Group Ø MRF Limited Ø Tata Robins Fraser Limited Ø DCM Group Ø Nagarjuna Fertilisers and Chemicals
Limited Ø The Associated Cement Company Limited Ø Dodsal Limited Ø Nippon Denro Ispat Limited Ø Toyo Engineering (India) Limited Ø EID Parry Limited. Ø Orient Cement Ø TVS Group Ø Elcon Engineering Company Limited Ø Orient Paper Mills Ø Walchand Group Ø Essar Construction Ø Peerless Group Public Sector Ø Bhaba Atomic Research Centre Ø India Tourism Development Corporation
Limited Ø National Aluminium Corporation Limited Ø Bharat Electronics Limited Ø Indian Aluminium Company Limited Ø National Thermal Power Corporation Limited Ø Bharat Heavy Electricals Limited Ø Indian Farmers and Fertilizer Co-operative
Limited Ø Nippon Denro Ispat Limited Ø Bharat Petroleum Limited Ø Indian Iron and Steel Company Limited Ø Oil and Natural Gas Commission Limited Ø Bindal Agro Chem. Limited Ø Indian Oil Corporation Limited Ø Port Trusts of Calcutta, Bombay, Madras
Central and State PWDs Ø Director Gen. Naval Projects Ø Indian RailwaysIndian Railways Ø SPIC Fine Chemicals Limited Ø Fertilizers and Chemicals Travancore
Limited Ø Jenson and Nicholson Limited Ø State Bank of India Ø Food Corporation of India Limited Ø Larsen and Toubro Limited Ø State Electricity Boards Ø Gujrat State Fertilizer Corporation
Limited Ø Madras Refineries Limited Ø Steel Authority of India Limited Ø Hindustan Paper Corporation Limited Ø Military Engineering Services Ø Indian Aluminium Company Limited Ø Hindustan Steelworks Construction Company
Limited Ø MRF Limited Ø Hindusthan Petroleum Limited |
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Bankers : |
Ø
United Bank
of India Ø
Standard
Chartered Bank Ø
UCO Bank Ø
ING Vysya
Bank Limited Ø
The Federal
Bank Limited Ø
ICICI Bank
Limited Ø
UTI Bank
Limited Ø
Induslnd
Bank Limited Ø
HDFC Bank
Limited Ø
Allahabad
Bank Ø
IDBI Bank
Limited Ø
Canara Bank Ø
Centurion
Bank of Punjab Limited Ø
Punjab
National Bank Ø
Indian Bank Ø
Central Bank
of India Ø
Oriental
Bank of Commerce Ø
Exim Bank Ø
Karur Vysya
Bank Limited Ø ABN Amro Bank |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Price Waterhouse Chartered
Accountant |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
374900000 |
Equity Shares |
Rs. 2/- each |
Rs. 749.800 millions |
|
20000 |
15 % Cumulative Preference Shares |
Rs. 10/- each |
Rs. 0.200 millions |
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|
|
|
Rs. 750.000 millions |
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TOTAL |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
42872330 |
Equity Shares |
Rs. 2/- each |
Rs. 85.745 millions |
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Add: |
Equity Shares (Forfeited) |
|
Rs. 0.386 million |
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|
|
|
Rs. 86.131 millions |
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TOTAL |
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Notes :
1 Pursuant to the approval of the Shareholders
at the Annual General Meeting held on 18th August, 2006, the authorised share
capital of the Company stands increased and reclassified as indicated above
with denomination of shares being subdivided into Equity Shares of Rs.2/- each.
Accordingly, the equity shares of the Company of face value of Rs.10/- each
were subdivided into Equity Shares of Rs.2/- each, on 20th September, 2006.
Of
the year-end paid-up shares
a) 13925 shares of Rs.10/- each (equivalent
of 69625 shares of Rs.2/- each) allotted as fully paid up pursuant to a
contract without payments being received in cash.
b) 1844321 shares of Rs.10/- each
(equivalent of 9221605 shares of Rs.2/- each) allotted as fully paid Bonus
Shares by capitalisation of Reserves, Undistributed Profit and Securities
Premium Account.
c) 1996530 shares of Rs.10/- each
(equivalent of 9982650 shares of Rs.2/- each) allotted at par on conversion of
Partly Optionally Convertible Debentures on 1st January, 1998 and on 1st January,
1999.
d) 1285000 shares of Rs.10/- (equivalent of
6424000 shares of Rs.2/- each) issued in October, 2005 on preferential basis.
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 |
86.131 |
86.131 |
73.281 |
|
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2672.618 |
2246.053 |
990.693 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
2758.749 |
2332.184 |
1063.974 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2829.355 |
1073.458 |
1016.324 |
|
|
2] Unsecured Loans |
4047.432 |
3378.080 |
2526.602 |
|
|
TOTAL BORROWING |
6876.787 |
4451.538 |
3542.926 |
|
|
DEFERRED TAX LIABILITIES |
180.847 |
122.661 |
104.844 |
|
|
|
|
|
|
|
|
TOTAL |
9816.383 |
6906.383 |
3113.000 |
|
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|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3390.673 |
2222.622 |
1144.700 |
|
|
Capital work-in-progress |
228.286 |
47.503 |
49.500 |
|
|
|
|
|
|
|
|
INVESTMENT |
52.626 |
3.069 |
0.700 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2851.884 |
1800.529 |
918.900 |
|
|
Sundry Debtors |
8563.266 |
5441.510 |
2597.800 |
|
|
Cash & Bank Balances |
424.842 |
444.859 |
148.200 |
|
|
Other Current Assets |
408.140 |
445.510 |
0.000 |
|
|
Loans & Advances |
1706.823 |
783.062 |
562.500 |
|
Total
Current Assets |
|
|
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
7729.347 |
4232.898 |
2297.000 |
|
|
Provisions |
80.810
|
49.383
|
12.300 |
|
Total
Current Liabilities |
7810.157
|
4282.281 |
2309.300 |
|
|
Net Current Assets |
6144.798 |
4633.189 |
1918.100 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
9816.383 |
6906.383 |
3113.000 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
2433.236 |
1711.563 |
1187.485 |
|
|
Other Income |
106.266 |
32.808 |
0.000 |
|
|
Total Income |
2539.502 |
1744.371 |
1187.485 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
701.617 |
581.027 |
344.047 |
|
|
Provision for Taxation |
164.493 |
164.583 |
92.285 |
|
|
Profit/(Loss) After Tax |
537.124 |
416.444 |
251.762 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
Total Earnings |
2591.152 |
1200.638 |
433.384 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
|
|
|
|
|
Stores & Spares |
42.732 |
106.002 |
|
|
|
Capital Goods |
689.498 |
501.766 |
|
|
|
Others |
5.517 |
68.799 |
|
|
Total Imports |
737.747 |
676.567 |
212.227 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Administrative Expenses |
814.550 |
530.480 |
|
|
|
Interest |
632.252 |
403.562 |
|
|
|
Depreciation & Amortization |
240.045 |
129.326 |
843.438 |
|
|
Other Expenditure |
151.038 |
99.976 |
|
|
Total Expenditure |
1837.885 |
1163.344 |
843.438 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
|
Sales Turnover |
5944.300 |
5711.300 |
7039.800 |
|
Other Income |
36.400 |
63.300 |
40.900 |
|
Total Income |
5980.700 |
5774.600 |
7080.700 |
|
Total Expenditure |
5360.600 |
5139.300 |
6334.400 |
|
Operating Profit |
620.100 |
635.300 |
746.300 |
|
Interest |
240.800 |
250.600 |
295.600 |
|
Gross Profit |
379.300 |
384.700 |
450.700 |
|
Depreciation |
126.400 |
142.200 |
167.300 |
|
Tax |
41.000 |
35.000 |
38.100 |
|
Reported PAT |
196.900 |
191.000 |
220.300 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
2.23 |
2.35 |
3.03 |
|
Long Term Debt-Equity
Ratio |
1.67 |
1.08 |
1.03 |
|
Current Ratio |
1.49 |
1.27 |
1.13 |
|
TURNOVER
RATIOS |
|||
|
Fixed Assets |
4.74 |
5.60 |
5.69 |
|
Inventory |
7.34 |
7.99 |
8.06 |
|
Debtors |
2.44 |
2.84 |
3.02 |
|
Interest Cover
Ratio |
2.09 |
2.37 |
2.01 |
|
Operating Profit
Margin(%) |
9.28 |
8.45 |
7.74 |
|
Profit Before
Interest And Tax Margin(%) |
7.87 |
7.48 |
6.85 |
|
Cash Profit
Margin(%) |
4.55 |
4.06 |
3.41 |
|
Adjusted Net
Profit Margin(%) |
3.14 |
3.10 |
2.52 |
|
Return On Capital
Employed(%) |
16.38 |
17.64 |
17.72 |
|
Return On Net
Worth(%) |
21.10 |
24.53 |
26.32 |
LOCAL AGENCY
FURTHER INFORMATION
History
Incorporated
in Calcutta in 1924, as a British-owned firm, Simplex Concrete Piles (India) pioneered
the introduction and development of the latest foundation engineering practices
in India and south-east Asia. Since the 1930s, it has proved its competence in
civil engineering, catering primarily to the core sector.
In 1947, the year of independence, the company was taken over by M D Mundhra.
Its earlier achievements include significant projects like steel plants at
Jamshedpur and Burnpur, K G Dock in Calcutta, piling for Bally and Howrah
Bridge Approaches.
Subject
was also involved in the foundation construction of a number of landmarks all
over India. Supreme Court in New Delhi, Tata Centre and the Salt Lake Stadium
in Calcutta, Alexander Docks in Bombay and Tata Power Station at Trombay are a
few of the landmarks.
The company also designed and constructed the first and highest reinforced
concrete frame skyscraper (18 stories) -- The National Tower - in Calcutta.
With such a varied background, it is today, one of the foremost construction
companies in India. International giants like Mitsubishi, Siemens, ABB, Davy
Mcker, GEC Aslthom have given preference to Subject for turnkey construction
projects.
The company during 1996, issued Rs 247 Millions fresh equity shares and 17% secured
partly optionally convertible debenture through Rights-cum-Public Issue to meet
capital expenditure requirements.
During the year 1999-2000, the activity in the housing and power sector was
slow and the company had to take more infrastructure projects like bridges,
port work etc.
In the year 2000-01, has concluded a Joint Venture Agreement with a foreign
company possessing necessary know-how and expertise in Road Work to enhance its
expertise in the high value Roads and Highway projects for which the Government
is giving large thrust now.
Review of operations
The
turnover of the Company at Rs.17082.14 million has shown an increase of 27.22%
as compared to Rs.13427.39 million in the previous year. Cost of inputs and
capital costs showed an upward trend. Profit before tax increased by 20.75%
from Rs. 581.03 million to Rs.701.62 million. Profit after tax increased by
28.98% to Rs.537.12 million compared to Rs. 416.44 million in 2005-06.
The EBIDTA of the Company has shown a significant increase at 42.10% from
Rs.1213.89 million in the previous year to Rs. 1724.95 million in the year.
EBDTA has also shown a healthy rise of 34.85% at Rs.1092.70 million from
Rs.810.33 million in the last year.
The Company has bagged several prestigious orders in various segments of
construction business viz., Ground engineering, Power, Marine, Industrial,
Building and Housing, Highways, Railways, Bridges and Urban infrastructure.
Present order book position of
the Company is about Rs. 70000 millions.
The Company has emerged as one
of the leading construction companies of repute in India and has now
established its presence in the foreign markets specially the Middle East. The
Company has recently acquired overseas contracts of Rs.16470.000 millions which
includes construction of cement plant in Qatar and high rise, commercial and
residential towers in Dubai. Presently the share of the overseas contracts is
over 30% of the order book, as against 15% last year.
New business initiatives
Considering the
opportunities in the oil sector, the Company has decided to foray into contract
onshore oil drilling services business. The Company has already signed a
two-year contract with Oil India Limited. A rig worth Rs.500 million has
already been ordered and is expected to be commissioned by October 2007.
Capital Expenditure
During the year,
the Company has made additions of Rs. 1454.40 million
to its fixed assets.
Sub-division of Equity Shares
The
face value of the Company's equity shares was subdivided from Rs.10/- each to
Rs.2/- each effective from 21st September 2006 in order to enhance the
liquidity of its shares. The sub-division was approved by the members at the
Annual General Meeting of the Company held on 18th August 2006.
Postal Ballot
To reap
the benefits of globalisation and rapid advancements in information and
communication technology, two special resolutions, one for change in object
clause by insertion of new Clauses 5(o) and 5(p) in the Memorandum of
Association to carry out inter-alia the business of all kinds in the field of
information and communication technology and setting up educational and
training institutions respectively, and the other for commencement of new
business under Section 149(2A) of the Companies Act, 1956 were passed through
postal ballot by an overwhelming majority.
Management discussion and analysis
Economic overview
Accelerated growth
and strong macroeconomic fundamentals characterised the Indian economy in
2006-07, despite the inflation cloud looming large. The booming economy shot
past the 9% growth projected by the Eleventh Five-Year Plan. The surge fuelled
the industry to record a 10% growth during the year.
The upbeat mood of the capital markets, reflecting the improved growth prospects
of the economy, was partly also a result of steady progress made on the
infrastructure front. Investment requirements for infrastructure during the
Eleventh Five Year plan are estimated to be around US$ 320 billion. While
nearly 60% of these resources would come from the public sector, the balance
would need to come either from the private sector and/or through public-private
partnership (PPP). Infrastructure, that constrained for years the growth
performance of the economy, appears to be improving. There are signs of
tangible progress in areas such as power, roads, ports, and airports.
Opportunities
The investment in the infrastructure sector is expected to rise from 4.5 to
8% of the GDP to achieve the projected 10% growth rate for the domestic economy
by 2012. The planned infrastructures spend of Rs.12.7 trillion (49% of India's
FY06 GDP) is likely to be funded through a mix of government and private
investments. The Committee on Infrastructure, headed by the Prime Minister, has
allocated the investment in some of the key sectors such as, Rs.2200000.000
millions for modernisation and up-gradation of highways; Rs.400000.000 millions
for civil aviation, Rs.500000.000 millions for ports, and Rs.3000000.000
millions (of which 40% is expected to come from the private sector through
public-private partnership) for the railways. Subject is a key player in all
these areas.
In roads, the National Highways Development Project (NHDP) is being implemented
in four phases NHDP - I, NHDP - II, NHDP - IIIA and NHDP - V comprising over
25,785 k.m. NHDP - I, II and IIIA are targeted to be completed by December
2009. As on 31st March 2007 only 10.30% of NHDP I, II and IIIA are complete,
with 27.1% yet to be awarded. Moreover, the National Highway Authority of India
(NHAI) has drawn out a seven stage NHDP programme with the target of covering
almost 46,000 k.m. of National Highways by 2015 at an estimated cost of
approximately US$49 billion. The Company is prepared and looking forward to
harness these opportunities.
In the power sector, it is
estimated that, India's per capita electricity consumption will spike to 2,643
kwh by 2032 - more than four times the existing level - and India's total power
generation capacity will need to increase to 778 GW - more than six times the
existing capacity - to address that demand. The government has embarked on an
ambitious goal - Mission 2012: Power for all - a comprehensive blueprint for
the power sector development. A capacity addition of 22,900 MW has been
identified for the private sector out of total target of around 107,000 MW for
the 'Power for All' projects. Subject had an eye for the potential of this
sector and has positioned itself comfortably to capitalise the
opportunity.
The major and small seaports
dotting the coastline of India are poised to open up for further development to
cater to increasing domestic and international trade fuelled by rapidly growing
economy of a populous country. Subject has created the marine construction
capabilities having been associated over long with almost all past expansions
of major ports in India. Subject will thus, be able to capitalise on the future
construction boom expected in the marine sector in India.
Apart from the huge
infrastructure construction opportunities in India as narrated above, the
following more Construction sectors in India and the Middle East are growing at
a rapid pace in which Subject is a major construction player.
(a) Housing sector: Both
residential and commercial housing demand is rising in keeping with the rising
population, growing disposable income, improved financing, a robust and growing
services sector, rising living standards and growing aspirations of people for
better quality residential, commercial and office space. No wonder then that this
sector today accounts for over 25% of the order book of Subject.
(b) Industrial
construction: In the GDP growth of 9.4%, the manufacturing sector is growing
nearly at 12%. The corporates are producing increasing volumes and higher
profits and cash surpluses. The increasing demand is giving rise to higher
investments in the manufacturing sector. Subject is wellplaced in getting
repeat orders from industrial groups in almost all basic industrial sectors
with its long standing presence. This sector also accounts for around 25% of
the order book of Subject.
(c) Overseas projects: Subject
is now established in the Middle East over the last 3 years and is well poised
to participate in the construction boom. Both housing and industrial
construction sectors in the Middle East are growing rapidly and Subject has
increased its order book share of overseas projects from 15% last year to 30%
in the current financial year.
New business initiative
The growing economy of the
second largest populous country in the world has significantly increased the
demand for energy, especially oil. The country imports 70% of its oil
requirements. The rise in global oil price has increased the annual oil import
bill to over US $ 50 billion. In order to reduce the dependence on oil imports
and to ensure energy security; the government is expediting the process of
domestic oil exploration by opening up the oil sector for private
investment.
With such big opportunities in
oil drilling services, Subject has decided to foray into contract on-shore oil
drilling services business. The Company has already signed a two-year contract
with Oil India Limited. A rig worth Rs.500 million has already been ordered and
expected to be commissioned by October 2007.
Threats, risks and concerns
The construction industry is no
less challenging as it is exciting.
Projects with massive outlays
encounter challenges ranging from financial closure to execution problems of
time and cost overruns. Infrastructure projects in India battle with problems
ranging from low construction margins to scarcity of skilled manpower,
escalation of input costs to long payback period. Subject has designed its
business model and the risk management framework to mitigate such business
risks.
Thanks to its robust financial
positioning, strong planning and monitoring mechanism and technological edge,
Subject is well positioned to address the threats of the project execution
risks. The Company has also succeeded in expanding its business domain to
overseas markets. Subject has strengthened its human resource development
activities and leadership programmes to reduce the risk of attrition and enrich
its talent pool.
Business approach
Subject business model revolves
around judicious diversification both sectorally and geographically. Subject is
present in all possible verticals of civil and structural construction, both in
India and the Middle East.
Subject also lays more stress on
execution than building of the order book.
In this direction they lay
emphasis on fast and medium moving orders and on reducing the slow moving ones.
The current order book has the average gestation period of a little over two
years. Some orders have an execution period of more than two years, but the
same are compensated by piling jobs (average six months) and bulk of the orders
having less than two years construction period. This business model built on
diversification, quick execution and the capabilities to execute over 130
projects at a time in different geographies insulates them from the business risks
normally associated with construction business.
The caution and due diligence
exercised while accepting the orders, coupled with the strong execution
capabilities and commitment help them adhere to the project execution
parameters of the time, cost and quality to the satisfaction of the
clients.
No wonder then that they are the
construction contractors of the choice and keep getting repeat orders.
Outlook
The government
spending on infrastructure is a very important growth driver for infrastructure
construction companies. The proposed increase in the budget allocation will
translate into more projects for companies like company from the government.
Leveraging of foreign exchange reserves for infrastructure development will
also result in increased availability of funds with the government, making room
for infrastructure growth in the country. Most of the infrastructure-related
sectors in India offer tremendous growth potential for the medium to long term.
The most optimistic of them are transport, power and urban infrastructure with
huge demand for growth.
Apart from the bright prospects of infrastructure construction there is surge
in demand for housing and industrial construction in India as well as the
Middle East. Subject has a very significant presence in all these sectors.
Internal control systems and adequacy
Subject has established a sound
system of internal control over the last eight decades of internal checks,
balances and MIS-based management system.
Introduction of modern IT
technologies, including Primavera, MS Projects, Oracle 11i (E business
suite), Oracle 10g Application Service, Oracle 10g Database, Lotus Note
mailing system, etc. have strengthened the Company's MIS and project management
system. The Company's connectivity with various outfits and project sites using
technologies like MPLS VPN, VSAT and broadband has facilitated in keeping
better checks and controls of various projects and sites.
The Internal Audit and the
Internal Control Procedures adopted in the Company are adequate and
commensurate with the size and complexity of its business.
Financial performance
The turnover of the Company at
Rs.17082.14 million has shown an increase of 27.22% as compared to Rs.13427.39
million in the previous year. The EBIDTA of the Company has shown a significant
increase at 42.10% from Rs.1213.89 million in the previous year to Rs.1724.95
million in the year. EBDTA has also shown a healthy rise of 34.85% at
Rs.1092.70 million from Rs.810.33 million in the last year. The profit before
tax has increased by 20.75% from Rs.581.03 million to Rs.701.62 million. Profit
after tax increased by 28.98% to Rs.537.12 million compared to Rs.416.44
million in 2005-06.
The Company has consistently
achieved growth in both the topline and the bottomline over the years. The CAGR
in turnover is 33% over 5 years and 19% over 10 years. The CAGR in profit
after tax is 69% over 5 years and 22% over 10 years. The Company has bagged
several prestigious orders in various segments of construction business viz., Ground
engineering, Power, Marine, Industrial, Building and Housing, Highways,
Railways, Bridges and Urban infrastructure. Present order book position of the
company is about Rs.70000 million and is growing. This ensures that the growth
momentum continues into the future.
Trade Terms with
Canada
ND Lee Associates
Sandweil International Inc.
Denmark
Haldor Topsoe A/S
France
Alsthom Export
Technip
Germany
Dr C Otto Limited
Walter-Bau AG
Siemens Limited
Lurgi
Holland
Stork Contractors
Aarding Group
Italy
Snam-Progetti
Ansaldo
Spie CAPAG
Technimont
Japan
Taisei Corporation
TOYO Engineering
Mitsui and Company
Mitsubishi Heavy Industries
Korea
Hyundai Corporation
Daelim
Daewoo Engineering Company
Sri Lanka
Hidelsi Investments Limited
A.M. Oreta and Company (Philippines)
International Construction Consortium
Trans Asia Hotel
M Peterson and Company Hamburg (Germany) In Colombo
Sweden
Asea Brown Boveri Limited
USA
Hewitt Robins
Tarmac Black and Veatch Raytheon
Kaiser Corporation
General Electric Technical Services Inc.
UAE
Al Qusaliy Building and
Construction, Abu Dhabi
UK
Davy Mckee Stockton
Rolls Royce
Foster Wheeler Inc.
General Electric Company
Balfour Beatty Limited
Tarmac
Its construction activities comprise of :
Ø
Huge
industrial projects
Ø
Piling jobs
Ø
Marine
constructions of ports and bridges
Ø
Ground
strengthening
Ø
Soil
investigations
Ø
Power
projects
Ø
Processing
plants
Ø
Commercial and
residential complexes and many others.
Objectives :
The Company does not
rest on the past laurels. The Company’s cherished objective is to continue
always at the peaks of the engineering professions viz., Excellence, Expediency
and Economy. The Company is proud to say that it can carry out the construction
works in keeping with these three E’s.
Fixed Assets
Ø
Freehold Land
Ø
Leasehold Land
Ø
Buildings
Ø
Plant and
Machinery
Ø
Furniture and
Fittings
Ø
Motor Vehicles
Ø
Computers
Ø
Electrical
Equipment
Ø
Motor Vehicles
Ø
Plant and
Machinery
Other Details:
|
Contingent Liabilities |
31.03.2007 (Rs. In millions) |
|
Claims not
acknowledged as Debts, Disputed Interest (others) |
0.600 |
|
Professional Tax |
0.434 |
|
Uncalled
liability on partly paid shares |
0.100 |
|
Disputed Sales
Tax |
41.257 |
|
Disputed Entry
Tax |
0.079 |
WEBSITES DETAILS:
Important domestic projects
·
Prestigious
assignment from Reliance Infrastructure Limited involving civil, structural,
mechanical, piping, fabrication and erection work for its refinery and
petroleum complex in Jamnagar, India.
·
Roadways
project from the National Highways Authority of India for widening and
strengthening a road to a four-lane carriageway in Bihar, India.
Important overseas projects
·
Trenching
assignment for Afcons Infrastructure Limited for two cofferdams for a pump
house in Qatar.
·
Project
for Qatar Petroleum entailing enabling work for the construction of the Al
Shaqab Academy, Qatar’s Foundation Education City.
·
Project
for Qatar Petroleum to construct a fire station, safety building, corrosion and
inspection lab at Dukhan, Qatar.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.42.97 |
|
UK Pound |
1 |
Rs.84.72 |
|
Euro |
1 |
Rs.66.99 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
|
81 |
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 |
|