MIRA INFORM REPORT

 

 

Report Date :

25.03.2008

 

IDENTIFICATION DETAILS

 

Name :

R D WELD PRODUCTS PRIVATE LIMITED

 

 

Registered Office :

A – 1Guru Ashish C Marg, Chembur East, Mumbai – 400 071, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

25.03.1997

 

 

Com. Reg. No.:

11-106836

 

 

CIN No.:

[Company Identification No.]

U51909MH1997PTC106836

 

 

IEC No.:

0307027937

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMR08369E

 

 

PAN No.:

[Permanent Account No.]

AAACR4651D

 

 

Legal Form :

Private Limited Liability Company

 

 

Line of Business :

Importer of Welding Electrodes and consumables – ESAB, Royal ARC, Electrodes, GEE, D and H Sechron, Superon, modi Arc, D and H , India , Ador

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 52440

 

 

Status :

Satisfactory 

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well – established and reputed company having satisfactory track. Trade relations are fair. Business is active. Payments are reported as usually correct and as per commitments.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

INFORMATION PARTED BY

 

Name :

Mr. Manoj Balwani

Designation :

Director

Contact No.:

91-9821031953

Date :

20.03.2008

 

LOCATIONS

 

Registered Office :

A – 1Guru Ashish C Marg, Chembur East, Mumbai – 400 071, Maharashtra , India

E-Mail :

rdw@hotmail.com

 

 

Administrative  Office :

G -23 Municipal Market, Chembur Naka, Mumbai – 400 071, Maharashtra, India

Tel. No.:

91-22-25282491 / 25282491

Mobile No.:

91-9821031953

Fax No.:

91-22-25280645

 

rdweld@hotmail.com

Area :

320 sq fts

Location :

Leased

 

 

Branches/ Marketing

Office:

E -3 and 4, MIDC Premises, Pfizer Road, Turbhe Naka, Navi Mumbai -400 705, Maharashtra, India

Tel. No.:

91-22-27631666 / 27615107

Fax No.:

91-22-27622922

Area :

1000 sq.fts

Location :

Leased

 

 

Factory :

D-343, TTC Industrial Area, MIDC, Turbhe, Navi Mumbai -400 705, Maharashtra, India

Tel. No.:

91-22-27683214 / 65107234

Fax No.:

91-22-27622922

Area :

5000 sq.fts

Location :

Owned

 

DIRECTORS

 

Name :

Mr. Manoj Balwani

Designation :

Director

Address :

G Neelkanth Nilayam Society Road, No. 9, Sandu Garden, Chembur , Mumbai – 400 071, Maharashtra, India

Date of Birth/Age :

01.07.1966

Qualification :

Graduate

Experience :

18 years

 

 

Name :

Mrs. Rashmi Balwani

Designation :

Director

Address :

G Neelkanth Nilayam Society Road, No. 9, Sandu Garden, Chembur , Mumbai – 400 071, Maharashtra, India

Date of Birth/Age :

04.05.1967

Qualification :

MBA

Experience :

15 years

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

(As on 3.1.03.2007)

Names of Shareholders

 

No. of Shares

Mr. Manoj Balwani

 

100000

Mrs. Rashmi Balwani

 

157000

R D Gas Service

 

129600

R D Technical Services (HUF)

 

35000

Mrs. Sarojini Balwani

 

3400

Mr. Madanlal Kochar

 

50500

Mr. Sashi Kochar

 

11700

Others

 

1500

 

 

 

Total

 

488700

 

BUSINESS DETAILS

 

Line of Business :

Importer of Welding Electrodes and consumables – ESAB, Royal ARC, Electrodes, GEE, D and H Sechron, Superon, modi Arc, D and H , India , Ador

 

 

Agencies Held :
  • Shenzhen Jasic Technology Development Company Limited, China
  • Hyundai Welding Company Limited, Korea 

 

 

Imports :

 

Products :
  • Welding Equipments
  • Welding Electrodes
  • Consumables

Countries :
  • China
  • Korea

 

 

Terms :

 

Selling :

L/C, Cash, Credit (30-60-90 Days)

 

 

Purchasing :

L/C, Cash, Credit (30-60-90 Days), Others

 

GENERAL INFORMATION

 

Customers :
  • Wholesalers
  • Retailers
  • End Users
  • OEMs

 

Other Companies:

 

  • Afcons Limited
  • B E Billimoria and Company Limited
  • B G Shirke Contraction Technology
  • Das Offshore Engineering Limited
  • Dolphin Offshore Enterprises India Limited
  • Echjay Forging Limited
  • EWAC Alloys Limited
  • Furnace Enff and Projects Private Limited
  • G R Engineering Works Limited
  • Gammon India Limited
  • Hindustan Construction Company
  • Hindustan Platinum Limited
  • HYVA India Private Limited
  • Larsen and Turbo Limited
  • Mukand Limited
  • Punj Lloyd Limited
  • Ray Construction
  • Siemens Limited
  • Toyo Engineering India Limited
  • Voltas Limited
  • WMI Cranes Limited

 

 

No. of Employees :

52 (7 in Office, 10 in Factory, 35 in Branch)

 

 

Bankers :
  • The Saraswat Co-operative Bank Limited

Address: Plot No. 560, Shri Sunder CHS Limited, Sion Trombay Road, Chembur, Mumbai – 400 071, Maharashtra, India

 

 

Facilities:

 

Secured Loans

31.03.2007

Rs. In Millions

Working Capital Finance From Saraswat Bank

10.999

Cylinder Loan From Saraswat Banks

2.692

Vehical Loan From Saraswat Banks

0.693

Loan From Finance Company

(Repayable including interests within one year- Rs.2.577 Millions)

1.866

 

 

Total

16.252

 

Note:

Working Capital Finance From Saraswat Bank is secured against hypothecation of stocks of goods, sundry debtors, bank fixed deposits and premises at Turbhe, Navi Mumbai

 

Unsecured Loans

 

Cylinder Deposits

5.393

Loan From Shareholders

10.783

 

 

Total

16.176

 

 

Banking Relations :

Satisfactory 

 

 

Auditors :

 

Name :

M. M. Pol and Company

Chartered Accountants

Address :

106 Maitri Shopping Centre, V N Purav Marg, Chunabhatti (East), Mumbai – 400 022, Maharashtra, India 

Tel. No.:

91-22-24051287

Fax No.:

91-22-24052523

E-Mail :

mukundpol@yahoo.co.in

 

 

Associates/Subsidiaries :

·         Esteem Equipment

E-7 MIDC Premises, Pfizer, Turbhe Naka, Navi Mumbai – 400 703, Maharashtra, India

Activity: Manufacturer of Welding Equipments – Rectifiers and Transformers

 

·         Esteem Gases Private Limited

Address: Village Tambatti, Khopoli – Pen Road, District Raigad, Maharashtra, India

Activity: Manufacturer of Dissolved Acetylene Gas

 

·         RD Technical Services (HUF)

·         Akshay Enterprises

·         Esteem Enterprises

·         Mehak Consultancy Services

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

500000

Equity Shares

Rs. 10/- each

Rs. 5.000 millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

490200

Equity Shares

Rs. 10/- each

Rs. 4.902 millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

 

31.03.2007

31.03.2006

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

 

4.902

4.902

2] Share Application Money

 

0.000

0.000

3] Reserves & Surplus

 

8.208

5.811

4] (Accumulated Losses)

 

0.000

0.000

NETWORTH

 

13.110

10.713

LOAN FUNDS

 

 

 

1] Secured Loans

 

16.252

17.148

2] Unsecured Loans

 

16.176

6.708

TOTAL BORROWING

 

32.428

23.856

DEFERRED TAX LIABILITIES

 

3.671

2.589

 

 

 

 

TOTAL

 

49.209

37.158

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

 

21.992

17.956

Capital work-in-progress

 

0.000

0.000

 

 

 

 

INVESTMENT

 

0.063

0.062

DEFERREX TAX ASSETS

 

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
 

4.592

3.094

 

Sundry Debtors
 

27.624

21.788

 

Cash & Bank Balances
 

2.344

1.336

 

Other Current Assets
 

0.000

0.000

 

Loans & Advances
 

2.682

1.427

Total Current Assets
 

37.242

27.645

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
 

9.597

8.202

 

Provisions
 

0.493

0.307

Total Current Liabilities
 

10.090

8.509

Net Current Assets
 

27.152

19.136

 

 

 

 

MISCELLANEOUS EXPENSES

 

0.002

0.004

 

 

 

 

TOTAL

 

49.209

37.158

 

 

 

 

 

 

 

 

 

 

 

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

 

31.03.2007

31.03.2006

Sales Turnover

 

107.912

76.653

Other Income

 

2.580

0.933

Total Income

 

110.492

77.586

 

 

 

 

Profit/(Loss) Before Tax

 

4.027

3.039

Provision for Taxation

 

1.602

0.94

Profit/(Loss) After Tax

 

2.425

2.099

 

 

 

 

Expenditures :

 

 

 

 

Interests

 

2.723

1.524

 

Depreciation

 

3.674

2.634

 

Other Expenditure

 

100.068

70.389

Total Expenditure

 

106.465

74.547

 

KEY RATIOS

 

PARTICULARS

 

 

 

31.03.2007

31.03.2006

PAT / Total Income

(%)
 

2.19

2.70

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
 

3.73

3.96

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
 

6.80

6.66

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
 

0.31

0.28

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
 

3.24

3.02

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
 

3.69

3.25

 

 

LOCAL AGENCY FURTHER INFORMATION

 

TRADE REFERENCES:

 

·         Shenzhen Jasic Technology Development Company Limited

·         Hyundai Welding Company Limited

 

·         GR Engineering

Address: Poonam Chambers, Dr. A B Road, Worli , Mumbai – 400 008, Maharashtra, India

Tel No: 91-22-24960551/0552

 

·         Mr. V V Ved

Off Shore Hookup and Constn Serv India Private Limited

Address: 303 - 305, Vasant Vihar Commercial Complex, Dr. C G Road, Chembur, Mumbai – 400 074

Tel No: 91-22-25510076 / 6882

 

Fixed Assets:

 

 

 

OTHER INFORMATION:

 

·         R D Sales Corporation, Proprietor – Mrs. Rashmi Balwani

·         M/s R D Industrial Gases, Proprietor - Mr. Manoj Balwani

·         M/s R D Gas Services, proprietor – Mrs. S R Balwani  (mother of Mr. Manoj Balwani)

 

In totality the directors have 20 years experience in the same business.

 

In its present avatar, the company has moved with time, imbibed the changes which have swamped the welding industry and has come out with flying colours, despite all the competition, constrains and rise, fall and rise again in the demand for the products dealt by the company.

 

It is largely because of the astute insight with which the management was able to perform that today the company enjoys high reputation in the industry. It has expanded its operations on all fronts like industrial gases, electrodes, welding consumables and welding equipments. The company has now gone into distribution arrangements for welding equipments with a Chinese company. More such distribution arrangements with foreign companies are under consideration.

 

 

Its operation:

 

The RD Group presently operated from Chembur and Turbhe in Navi Mumbai. It basically trades in industrial gases and welding equipments of all types. In the welding segment there is nothing which is not available at the company‘s operation locations. It is virtually a one point centre fort all welding requirement.

 

Through its sister concern, Esteem Equipments, it Manufactures Welding transformers and rectifiers which it has been marketing under the Brand Name of Esteem “ for more than 10 years . The manufacturing activity is carried on from the company own premises at Navi Mumbai.

 

RD’s management has a partnership in M/s Esteem Gases Private limited. The factory is located at Khopoli (about 80 kms from Central Mumbai) and manufactures important industrial gas - namely Dissolved Acetylene Gas. The partnership company has been in operation for about a decade. This gas is supplied mostly bulk to several government organization including Mazagaon Dock Limited, Railways and other larger users of this gas R D Weld Products Private Limited itself purchases a part of the total gas , manufactured by M/s Esteem Gases Private limited.

 

Because of having been in the industry for a long time, R D Weld Products Private limited has a huge customer base throughout Mumbai and India. It supplies welding material to a large number of contractors, working with large fabricating houses at different cities within the country. Whether it is Uttaranchal Pradesh in North or Andhra Pradesh in South, RD reaches the users in time.

 

Their customer base in close to 400, including public sector companies, large engineering and construction companies operating in Mumbai and around.

 

It goes without saying that if they have such a large customer base which requires different industrial gases, welding electrode, materials welding transformers and rectifiers and all that has to be delivered within stipulated time schedules, they have the requisite infrastructure like commercial vehicles, transporting staff and so on . Nothing is left to chance.

 

 

The RD Team:

 

As noted above the company has about 400 customers. Even if most of them are their dedicated customers, there is always need for vigilance that somebody is not encroaching on their territory. Such efforts of their competitors and to procure viable business apart from meeting demands of their committed customers who are with them for long years, some as long as ten years the company has team of committed, Dedicated and motivated workers at Junior and Senior Level executives who always on the move.

 

 

The Management:

 

Even with all the progress they have made, the company remains a small company. The turn – over is projected to rise to Rs. 160.000 millions during the current financial year (April 2007 to March 2008) after having reached RS. 110.000 millions in the year 2006-2007.

 

The management -2 Director, husband and wife Mr. Manoj Balwani and Mrs. Rashmi Balwani have been at the helm of affairs ever since the formation of the company.

 

Both of the directors are young and ambitious and believe in taking the company’s operation to higher levels. They have come through the difficult times in which the industry found itself because of their perseverance, dedication and commitments.

 

The management takes all policy decision while keeping long term requirements and goals and short terms constraints in view.

 

 

Manufacturer sector:

 

In this overall growth scenario, Manufacturing, for the three consecutive years, has performed at a highly satisfactory. Capital goods industries especially in engineering sector, infrastructure and services have been riding the waves. Construction industry must be signaled out as one of the trend setting with construction activities in all part of India including Punjab, Rajasthan, Haryana, New Delhi, States in South and Maharashtra especially Mumbai registering sustained high pace. Real estate prices in all parets ogf the country are setting up new bench mark.

 

All projections from officials and non – official sources that the Indian economy will continue to perform at around 9% in 07-08. It is now being widely maintained that if the Indian economy continue to perform at this rate fro another 10 years it can easily emerge as one of the major economic manufacturing centre in the world . They expect that the cash easily frenzy, especially in the residential housing and commercial sector as well as transport infrastructure will continue and therefore the demand for welding products will be promising. To only question is whether those supplying these products will be able to meet requirements. The management has moved aggressively in certain fields to augment its which are likely in near future.

 

In a major move to have more operating premises, the company has purchases additional office space at Chembur at a leading industrial estate. Gull operations at these premises will start in the near future after giving a face lift.

 

The company has entered into distributing agreement with a leading Chinese company, Jasic International to market their welding machines in different sizes and capacities. The Chinese Company has its own operational office in Chennai. They have been appointed distributor for their machines for the whole of the Maharashtra and Goa. The first cargo of machines has already been received at Mumbai. All necessary steps are being taken to initiate the marketing process and appointing dealers at different but important commercial centers in Maharashtra. Efforts are on to appoint special marketing and services Engineers for theses products.

 

In addition to the marketing staff required for the new machine, the management is also trying its best to increases the manpower for their traditional sector.

 

The management is also taking active steps with the help of its bankers to purchases a sizeable number of cylinders for different gases in order to meet the demand for filled gases.

 

The management is trying to sign up with international companies to market their products in India.

 

Measures to stock welding products in order to meet timely supply continue and their efforts are aimed at stocking all those particulars products that are likely to remain in high demand.

 

They are continuing with their efforts to increase the segment of medical gases, a new product which they launched lat year. The progress is now slow some what yet their efforts to increases its volume are continuing.

 

 

Company performances:

 

The uptrend in the total income noticed during the previous year continued during the year ending March 31, 2007. Total sales net of VAT during the year aggregated Rs. 108.000 millions as against Rs. 77.000 millions in the previous year, marking an increase of almost 40% as against slightly more than 21% in the previous year. Encouraging as this result was it may be noticed that achieved sales fell below their projected target of Rs. 12.000 millions.

 

Their efforts to increase investments for the purchase4 of cylinders continued during the year under review, with total investment of almost Rs. 5.900 millions. As a result, the provision for depreciation rose to Rs. 3.670 millions as against Rs. 2.630 millions in the previous; an increase in depreciation of 39%. Substantially higher purchases of cylinder is necessitated because of rising demand for gases from their customers.

 

Profit before interest and taxes during the ear ending on March 31, 2007 aggregated to Rs. 6.750 millions as against Rs. 4.560 millions in the previous year. However, a much higher provision was necessitated for the payment of interest and other financial charges because of increased borrowings from the Bank and rising interest rates. The provision for payments of current tax and that of deferred tax also rose --- together Rs. 1.550 millions as against to Rs. 0.904 millions in the previous year.  Thus, there was a marginal increase in profit after tax available for appropriation at Rs. 2.405 millions as against Rs. 2.100 millions 2005-2006.

 

 

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.40.34

UK Pound

1

Rs.79.81

Euro

1

Rs.62.01

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

4

--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

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

45

 

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

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions