MIRA
INFORM REPORT
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Report Date : |
27.03.2008 |
IDENTIFICATION
DETAILS
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Name : |
SUJANA METAL PRODUCTS LIMITED |
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Registered Office : |
Survey Nos.296/7/9, IDA Bollaram, Jinnaram Mandal, Medak District, Andhra Pradesh |
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Country : |
India |
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Financials (as
on) : |
30.06.2007 |
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Date of Incorporation : |
02.05.1988 |
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Com. Reg. No.: |
01-8610 |
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CIN No.: [Company Identification No.] |
L28120AP1988PLC008610 |
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Legal Form : |
A Public Limited Liability Company. The Company shares are listed in the Stock Exchanges. |
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Line of Business : |
Company is in engaged in producing Re-Rolled products, Mild Steel Ingots and others. |
RATING &
COMMENTS
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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 11424100 |
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Status : |
Very 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 having satisfactory track. Directors are reported as experienced, respectable, and resourceful industrialists. Their trade relations are fair. General financial position is satisfactory. Payments are correct and as per commitments. The company can be considered normal for business dealings
at usual trade terms and conditions. |
LOCATIONS
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Registered Office/ Factory : |
Survey Nos.296/7/9, IDA Bollaram, Jinnaram Mandal, Medak District, Andhra Pradesh, India |
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Corporate Office : |
18, Nagarjuna
Hills, Panjagutta, Hyderabad - 500 082, Andhra Pradesh, India |
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Tel. No.: |
91-40-23351882, 23351887 |
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Factory : |
* Survey Nos.296/7/7, IDA Bollaram, Jinnaram Mandal, Medak District, Andhra Pradesh, India * Plot No.159B & C I.D.A.Bollaram, Jinnaram Mandal, Medak District Andhra Pradesh, India * Plot No.128/A, I.D.A.Bollaram, Jinnaram Mandal, Medak District Andhra Pradesh, India * Manjankaranai Village, Chengai G. R. District, Chennai, Tamilnadu, India |
DIRECTORS
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Name : |
Mr Y.S. Chowdhary |
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Designation : |
Chairman |
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Name : |
Mr. R.K. Birla |
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Designation : |
Managing Director |
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Name : |
Mr. G. Srinivasa Raju |
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Designation : |
Director |
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Name : |
Mr. S. Hanumantha Rao |
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Designation : |
Director |
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Name : |
Mr. J. Ramakrishnan |
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Designation : |
Independent Director |
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Name : |
Mr K Kameshwara Rao |
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Designation : |
Independent Director |
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Name : |
Mr V Malakonda Reddy |
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Designation : |
Independent Director |
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Name : |
Mr K Srinivas Rao (Dr.) |
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Designation : |
Independent Director |
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Name : |
Mr. B. P. Mandal |
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Designation : |
Independent Director |
KEY EXECUTIVES
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Name : |
Mr Y S Chowdary |
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Designation : |
Management Committee Member and Shareholder Grievance Committee |
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Name : |
Mr G Srinivasa Raju |
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Designation : |
Management Committee Member and Share Transfer Committee and Shareholder Grievance Committee |
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Name : |
Mr R K Birla |
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Designation : |
Management Committee Member and Share Transfer Committee |
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Name : |
Mr S Hanumantha Rao |
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Designation : |
Management and Audit Committee Member and Shareholder Grievance Committee |
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Name : |
Mr K Srinivasa Rao |
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Designation : |
Audit Committee Member and Remuneration Committee |
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Name : |
Mr V Malakonda Reddy |
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Designation : |
Audit Committee Member and Remuneration Committee |
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Name : |
Mr K Kameshwara Rao |
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Designation : |
Audit Committee Member |
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Name : |
Mr. Y. S. Chowdary |
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Designation : |
Share Transfer Committee |
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Name : |
Mr. J. Ramkrishnan |
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Designation : |
Remuneration Committee |
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Name : |
Mrs Shaik Razia |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.06.2007
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters and their Relatives |
23480804 |
45.18 |
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Bodies Corporate |
1922882 |
3.70 |
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Public – Individuals |
6404991 |
12.32 |
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Flls and OCBs |
17111408 |
32.92 |
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Institutional Investors and others |
3053439 |
5.87 |
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Total |
51973524 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Company is in engaged in producing Re-Rolled products, Mild Steel Ingots and others. |
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Products : |
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PRODUCTION STATUS
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Particulars |
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Unit |
Installed
Capacity |
Actual
Production |
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a) Castings
Division: |
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M.S. Ingots |
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MT |
26400 |
-- |
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b) Re-Rolling
Units |
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CTD/ TMT/ Bars |
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MT |
290000 |
261247610 |
GENERAL
INFORMATION
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Customers : |
Following are some of the key customers of the company 1] Towers Bharti Tele-Ventures Limited 2] TMT Bars Larsen & Toubro
Limited Shapoorji Paloonji
& Company Limited IVRCL
Infrastructures & Projects Limited., IRCON International AP Transco & AP Genco Grid corporation of Orissa Limited BSES Limited AP State Road Transport Corporation Nagarjuna Construction Company Limited Global Tele Systems Limited Tata Projects Limited Hindustan Steel Works Constructions Limited National highways project, AP-ii package (JV between IVRCL & SPCL) Singapore township
(JV between NCC |
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No. of Employees : |
About 2000 |
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Bankers : |
* Bank of Baroda * Bank of Rajasthan Limited * IndusInd Bank Limited * IFCI Limited *
IDBI Limited *
Indian Overseas Bank *
Indian Bank *
Karnataka Bank Limited *
Industrial Investment Bank of India Limited |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
G.V.
Suryanarayana Murthi Chartered Accountant |
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Address : |
B-166, Sanjeeva Reddy Nagar, Hyderabad, Andhra Pradesh, India |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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130000000 |
Equity Shares |
Rs. 5/- each |
Rs. 650.000 millions |
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4000000 |
Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs. 400.000 millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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51973524 |
Equity Shares |
Rs. 5/- each |
Rs. 259.868
millions |
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3531625 |
Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs. 353.162
millions |
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Total |
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Rs. 613.030 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
613.030 |
597.346 |
277.393 |
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2] Share Application Money |
292.694 |
0.000 |
18.220 |
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3] Reserves & Surplus |
1950.296 |
2275.987 |
1091.589 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
NETWORTH
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2856.020 |
2873.333 |
1387.202 |
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LOAN FUNDS |
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1] Secured Loans |
1795.837 |
898.395 |
1416.918 |
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2] Unsecured Loans |
32.653 |
8.740 |
20.199 |
TOTAL BORROWING
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1828.490 |
907.135 |
1437.117 |
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DEFERRED TAX LIABILITIES |
283.511 |
371.081 |
321.568 |
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TOTAL
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4968.021 |
4151.549 |
3145.887 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
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2689.460 |
1801.266 |
1548.505 |
Capital work-in-progress
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0.000 |
347.285 |
51.704 |
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INVESTMENT
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0.564 |
214.478 |
214.478 |
DEFERREX TAX ASSETS
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0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES
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Inventories
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901.065 |
565.847 |
384.060 |
Sundry Debtors
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1816.161 |
1656.888 |
1552.261 |
Cash & Bank Balances
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80.600 |
32.390 |
13.887 |
Other Current Assets
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0.000 |
0.000 |
0.000 |
Loans & Advances
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956.979 |
517.536 |
328.625 |
Total Current Assets
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3754.805 |
2772.661 |
2278.833 |
Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities and Provisions
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1476.808 |
984.141 |
947.633 |
Total Current Liabilities
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1476.808 |
984.141 |
947.633 |
Net Current Assets
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2277.997 |
1788.520 |
1331.200 |
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MISCELLANEOUS EXPENSES
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0.000 |
0.000 |
0.000 |
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TOTAL
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4968.021 |
4151.549 |
3145.887 |
PROFIT & LOSS
ACCOUNT
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PARTICULARS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
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Sales Turnover |
7509.206 |
7262.414 |
7030.768 |
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Other Income |
409.123 |
136.306 |
0.000 |
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Total Income |
7918.329 |
7398.720 |
7030.768 |
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Profit/(Loss) Before Tax |
349.584 |
364.687 |
224.856 |
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Provision for Taxation |
120.113 |
82.421 |
72.749 |
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Profit/(Loss) After Tax |
229.471 |
282.266 |
152.107 |
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Earnings in Foreign Currency : |
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Export Earnings |
597.575 |
1186.479 |
740.667 |
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Total Earnings |
597.575 |
1186.479 |
740.667 |
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Imports : |
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Raw Materials |
563.858 |
1131.141 |
200.809 |
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Total Imports |
563.858 |
1131.141 |
200.809 |
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Expenditures : |
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Manufacturing Expenses |
305.138 |
209.405 |
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Raw Material Consumed |
6869.973 |
6587.545 |
6805.911 |
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Financial Charges |
242.338 |
122.330 |
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Depreciation & Amortization |
151.295 |
114.752 |
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Total Expenditure |
7568.745 |
7034.033 |
6805.911 |
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QUARTERLY RESULTS
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PARTICULARS |
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30.09.2007 |
31.12.2007 |
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Type |
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1st
Quarter |
2nd
Quarter |
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Sales Turnover |
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3426.600 |
3437.400 |
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Other Income |
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4.000 |
8.100 |
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Total Income |
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3430.600 |
3445.500 |
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Total Expenditure |
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3223.500 |
3185.600 |
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Operating Profit |
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207.100 |
259.900 |
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Interest |
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55.100 |
107.400 |
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Gross Profit |
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152.000 |
152.500 |
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Depreciation |
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39.400 |
37.500 |
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Tax |
|
14.400 |
65.400 |
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Reported PAT |
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98.200 |
49.600 |
KEY RATIOS
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PARTICULARS |
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30.06.2007 |
30.06.2006 |
30.06.2005 |
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PAT / Total
Income |
(%) |
2.89
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3.81 |
2.16 |
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Net Profit Margin (PBT/Sales) |
(%) |
4.41
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4.92 |
3.19 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
5.42
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7.10 |
5.49 |
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Return on Investment (ROI) (PBT/Networth) |
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0.12
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0.13 |
0.16 |
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Debt Equity Ratio (Total Liability/Networth) |
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2.25
|
1.78 |
2.95 |
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Current Ratio (Current Asset/Current Liability) |
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2.54
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2.81 |
2.40 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was earlier known as Steels Steels Limited (SSL) was
incorporated on 2 May '88 as a private limited company and was converted into a
public limited company on 4 Apr.'92. The company was promoted by Y S Chowdary,
V Malakonda Reddy and others. Y S Chowdary is the Chairman & Managing
Director. Other group companies include Sujana Industries, Sujana Corporation,
Sujana Holdings and Sujana Pharma.
A public issue was made for Rs.29.200 Millions to finance the expansion
programme of ingot. The company increased the installed capacity by 16400 TPA
and the expansion was completed in 1992. The company manufactures steel and
re-rolled steel products. The products of the company are mainly for
construction and industrial use and they enjoy a very good demand.
The company's new hot re-rolling mill for the production of additional 125000
TPA of steel products at Gummidipundi,Chennai was successfully completed.
The company's new Hot Re-rolling Mill for the production of 125000 tonnes per
annum has been transferred to Padmini Steel Corporation Limited, a subsidiary
company, production in this unit was started by the last quarter of 1997.
The company modernised its Re-rolling Mills by way of increasing its
manufacturing capacity to 110000 TPA at an cost of Rs 360.000 Millions. The
company has taken up Wind Farm Power project for 2 MW capacity in Ananthpur
District Andhra Pradesh at a cost of Rs.84.300 Millions and has met with
financial assistance from IREDA and Equity.The project which was flagged off in
1999-2000 has not completed and the company is taking necessary steps to
complete the Project as per schedule.
Operational
Review:
During the year the Company has achieved a turnover of Rs. 7509.206 millions
earning profit after tax of Rs.229.472 millions. The gross block as on
30.06.2007 stood at Rs.3185.916 millions and the Net Block as on 30.06.2007
stood at Rs.2689.460 millions.
Subsidiary Company:
Alpha Ventures Limited, is a wholly owned subsidiary company incorporated on
6th March, 2007 in Cayman Islands for carrying on any business / activity of
trading in different commodities which is not prohibited by the Company's Law
(2004 Revision) or as the same may be revised from time to time, or any other
law of Cayman Islands. The Company's Financial Year is not coinciding with the
Financial Year of the Subsidiary Company. The Subsidiary Company has not
carried on any business activity / transactions from its incorporation till
30th June 2007.
Therefore, the Financial Statements relating to Subsidiary Company as
required under Section 212 of Companies Act, 1956 are not presented and there
is no difference between the consolidated and stand alone Financial Statements
for the year ended 30th June 2007.
Scheme of Arrangement for demerging the
Towers Division of the Company into "M/s Sujana Towers Limited" and
Amalgamation of "M/s Sujana Steels Limited" with the Company.
The Scheme of Arrangement and Amalgamation had been approved by the Hon'ble
High Court of Andhra Pradesh at Hyderabad vide their Order dated 10.04.2007 and
the Scheme has become effective w.e.f.04.05.2007 and the appointed date was on
01.07.2006. As per the terms of the said Scheme the Towers Division emerged as
M/s Sujana Towers Limited and the same got the listing status at Bombay Stock
Exchange Limited, Mumbai w.e.f. 21.08.2007 and M/s Sujana Steels Limited was
merged with the Company and the total capital of the Company after the
implementation of the Scheme of Arrangement and Amalgamation has been listed at
Bombay Stock Exchange Limited, Mumbai w.e.f 12.07.2007.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT
Industry structure and development and Business Overview:
The global steel scenario has stabilized by the end of 2006-07 and it is
expected to grow steadily with increased demand for steel from China and USA
followed by India due to increase in infrastructural and manufacturing
activities. Globally, restocking activity was under way in the last quarter of
the fiscal leading to higher apparent demand. Most global mills operated at
maximum capacity in January 2007. The global steel demand outlook for 2007
remains favourable. From a macro point of view the key factor is rising fixed
asset investment as a share of global GDP, which is good news for the steel
industry and the company.
Sharp economic growth in the country is being built on a frame of steel. Rising
demand by sectors like infrastructure, real estate and automobiles have put
Indian steel industry on world map. The Indian Steel Sector has shown an
accelerated growth rate of over 9% in the last five years and is all set to
grow further backed by strong economic growth. A National Steel Policy under
the able stewardship of the Hon'ble Minister for Steel, Chemicals and
Fertilizers has been evolved to facilitate smooth growth of the steel industry.
The long term goal of the National Steel Policy is to develop India as a modern
and efficient steel producer and achieve global competitiveness not only in
terms of cost, quality and product mix but also in terms of efficiency in
productivity.
The Company deals in re-rolled long iron and steel products and the company has
been restructured by demerging its Towers Division to Sujana Towers Limited and
merging of Sujana Steels Limited into the Company pursuant to the scheme of
Arrangement and Amalgamation as approved by the Hon'ble High Court of Andhra
Pradesh on 10.04.2007 which has come into effect from 04.05.2007.
Opportunities and Strengths:
The demand for iron & steel long products is expected to be higher on
account of the huge investments being planned on infrastructure projects.
The Company has capabilities to quickly adapt to the changing market
conditions and sustain the projected growth in sales and profits.
Threats and Risks:
There is severe competition from the other secondary re-rolling manufacturers
and the prices are expected to be volatile.
Internal control systems and their
adequacy:
The Company has in place adequate internal control systems and procedures
commensurate with the size and nature of business. These procedures are
designed to ensure that:
- All assets and resources are acquired economically, used efficiently and are
adequately protected;
- Significant financial, managerial and operating information is
accurate, reliable and is provided timely; and
- All internal policies and statutory guidelines are complied with.
The effectiveness of internal control is continuously monitored by the Audit
Committee of the Company. The Company has an Audit Committee which regularly
reviews the reports submitted. All significant audit observations and follow-up
actions thereon are reported to the Audit Committee. The Committee also met the
Company's Statutory Auditors to ascertain their views on the adequacy of
internal control systems in the Company and their observations on financial
reports. The Audit Committee observations are acted upon by the Management. The
Company has implemented the corporate governance requirements and the Audit
Committee periodically reviews the systems and procedures of the Company.
Financial Performance:
The Gross Block as on 30.06.2007 stood at Rs.3185.916 millions and the Net
Block as on 30.06.2007 stood at Rs.2689.460 millions.
The deferred tax liability has been provided in accordance with the
requirements of Accounting Standard 22 - Accounting of Taxes on Income, issued
by the Institute of Chartered Accountants of India and the Provision for Fringe
Benefit tax was created as per Income-Tax Act, 1961
Operational Performance:
The Company has achieved a turnover of Rs.7509.206 millions earning a Profit
before tax of Rs. 349.585 millions.
Segment Wise Performance &
Geographical Information:
The Company operates predominantly only in one Business Segment viz: Iron &
Steel Products. The sale of the Company is mostly in India and there are no
reportable geographical segments.
Material developments in Human
Resources:
The development of Human Resources is a key strategic challenge in order to
prepare people for future responsibilities in terms of professional skills as
well as business skills. Sujana Metal Products Limited has conducted training
programmes to it's employees enabling them to improve / upgrade their
skills.
Persons
constituting Group coming within the definition of `group' as defined in the Monopolies
and Restrictive Trade Practices Act, 1969 include the following :
01. Shri YS Chowdary and his relatives
02. Shri G Srinivasa Raju and his relatives
03. Shri S.Hanumantha Rao and his relatives
04. Shri R K Birla and his relatives
05. Sujana Metal Products Limited
06. Sujana Towers Limited
07. Sujana Capital Services Limited
08. Sujana Pumps and Motors Private Limited
09. Sujana Holdings Limited, India
10. Sujana Holdings Limited, UAE
11. Sujana Finance and Trading Private Limited
12. Sujana Power (Gangikondan) Limited
13. Sujana Power (Tuticorin) Limited
14. Sujana Projects Limited
15. Yalamanchili Finance and Trading Private Limited
16. Foster Infin and Trading Private Limited
17. Gamma Machinery & Equipment Pte. Limited, Singapore
18. YS Consultancy Services Private Limited
19. Pac Ventures Pte. Limited, Singapore
20. Alpha Ventures Limited, Cayman Islands
21. Digitech Business Systems Limited, Hong Kong
22. Empire Gulf FZE, UAE
23. Nuance Holdings Limited, Hong Kong.
During the year 2006-07, there was merger of Sujana Steels Limited with Sujana
Metal Products Limited. GB Trading and Investments Private Limited, Lumbini
Electricals Private Limited, Golkonda Finance and Trading Private Limited and
Prime Infoinvest Limited were Non Promoter shareholders in M/s Sujana Steels
Limited and during the process of merger with Sujana Metal Products Limited,
these Companies were treated as Promotes' Group by Bombay Stock Exchange
Limited. However, these companies represented to delete their names from the Promoters
group of Sujana Group of Companies.
The above statement has been published to avail the exemption under Regulation
3(1)(e)(i) of Securities and Exchange Board of India (Substantial Acquisition
of Shares and Takeovers) Regulations, 1997 as amended from time to time.
Fixed Assets
* Land
* Buildings
* Plant and Machinery
* Workshop Equipment
* Weighing Machine
* Electrical Installation
* Furniture and Fixtures
* Office Equipment
* Vehicles
* Computer System and Erp
*
Lab Equipment
Contingent
Liabilities
Net Profit or Loss
for the Period, Prior Period Items and Changes in Accounting Policies
During the year there are no changes in accounting policies of the Company.
Details of Prior Period Adjustments:
Expenses of the Earlier year : Rs 2.021 million
Income of the Earlier year : Rs 1.857 million
In case of Chennai Division of the Company,(erstwhile Sujana Steels Limited) the increase in the Principal amount due to IIBI of Rs.1.700 millions as well as the interest for the period April 01 2006 to June 30th 2006 on the entire principal amount of Rs.151.700 millions @ 10% p.a. which was not provided for in the previous year, amounting to Rs.3.782 millions has been treated as Pre operative Expenses and was capitalized on Buildings (Rs 0.663 millions) and Plant & Machineries (Rs.4.777 millions) proportionately, while the Depreciation on such capitalization and interest for one day on the entire Principal amount of Rs.151.700 millions, amounting in all to Rs.0.422 million has been charged as prior year expenditure in the Profit & Loss Account.
Accounting for
Amalgamations
Pursuant to the Scheme of Arrangement and Amalgamation :("the
Scheme") under sections 391 to 394 of the Companies Act, 1956, Sujana
Steels Limited has been merged with the Company with an appointed date of
01.07.2006 and the said scheme has been approved by the Hon'ble High Court of
Andhra Pradesh at Hyderabad vide its order dated 10th Aprif 2007. The Certified
Copy of the Order has been filed with the Registrar of Companies, Hyderabad on
4th May 2007, which is the effective date for the transfer of Sujana Steels
Limited to the Company. The business of the merged unit was carried on by
Sujana Steels Limited from 01.07.2006 (i.e appointed date) to 04.05.2007 (i.e
effective date).Accordingly the operating results of Sujana Steels Limited
accruing to the company from the appointed date till the effective date is to
the account of the company.
The accounting of the above scheme of amalgamation had been carried out
as per the requirement of the standard.
Discontinuing
Operations
During the year Pursuant to Scheme of Arrangement and Amalgamation
("the Scheme") under sections 391 to 394 of the Companies Act, 1956,
the Towers Division of the company has been demerged from the company with an
appointed date of 01.07.2006 and the said scheme has been approved by the
Hon'ble High Court of Andhra Pradesh vide its order dated 10th April 2007. The
Certified Copy of the Order has been filed with the Registrar of Companies,
Hyderabad on 4th May 2007 which is the effective date for the transfer of
Towers Division of the company to Sujana Towers Limited. The business of the
Towers Division of the company was carried on by the company from 01.07.2006
(i.e appointed date) to 04.05.2007 (i.e effective date). The Towers Division of
the company is being treated as a discontinuing business as at 1.07.2006
Accordingly the operating results of the discontinuing business accruing to the
company from the appointed date till the effective date is to the account of
Sujana Towers Limited.
|
Contingent liabilities in respect of |
30.06.2007 |
30.06.2006 |
|
Letters of Credit |
Rs. 328.051 millions |
NIL |
|
Counter Guarantee given to Bankers towards : Bank Guarantee issued by them Standby LC issued |
Rs. 2.500 millions Rs. 489.549 millions CHF 14.428 Million |
Rs. 2.500 millions Rs. 547.778 millions or USD 12 Million |
|
Corporate Guarantees furnished on behalf of Sujana
Universal Industries Limited |
Rs. 11 64.440 millions and US$ 4916992 |
Rs. 11 64.440 millions and US$4916992 |
|
Joint Corporate Guarantee executed by the company along
with Sujana Universal Industries Limited (SUIL) & Sujana Towers Limited
(STL) in favour of Alpha Ventures Limited, a wholly owned subsidiary of our
company and Sujana Holdings Limited, a wholly owned subsidiary of SUIL |
USD 60 Million |
-- |
|
Others |
-- |
Rs. 67.500 millions |
|
Sujana Steels Limited (Now merged with Sujana Metal Products Limited.) |
Nil |
Rs. 690.000 millions |
|
Claims against the Company not acknowledged as Debt |
Nil |
Nil |
Scheme of
Arrangement:
Pursuant to Scheme of Arrangement and Amalgamation ("the
Scheme") under sections 391 to 394 of the Companies Act, 1956, the Towers
Division of the company has been demerged from the company and Sujana Steels
Limited has been merged with the company with an appointed date of 01.07.2006
and the said scheme has been approved by the Hon'ble High Court of Andhra
Pradesh vide its Order dated 10th April 2007 . The certified Copy of the Order
has been filed with the Registrar of Companies, A.P Hyderabad on 4th May 2007
which is the effective date for the transfer of Towers Division of the company
to STL and transfer of SSL to the Company. The company after the demerger of
Towers Division and before the merger of Sujana Steels Limited is currently
Known as Sujana Metal Products Limited - Hyderabad Division. Sujana Steels
Limited which has been merged with the company is currently known as Sujana
Metal Products Limited – Chennai Division.
Hyderabad Division of the Company has availed Term Loan from IDBI of Rs
500.687 millions and the Interest thereon which is secured by First Charge on
the entire assets of the Hyderabad Division of the Company both present and
future subject to the prior charges created for the borrowing of working
capital and further secured by the guarantees of Sri.Y.S.Chowdary, Chairman ,
Sri.G.Srinivasa Raju Director of the company and Sri.S.T.Prasad, relative of
the Chairman in their personal capacities.
Hyderabad Division of the company has availed working Capital Loan from
Bank of Baroda Chennai, The Bank of Rajasthan Limited., Hyderabad and Induslnd
Bank Limited Hyderabad which is secured by hypothecation of all stocks of Raw
Materials, Work In Progress, Finished Goods, Stores & Spares, Book Debts,
Other Current Assets of Hyderabad Division of the company and further secured
by the second charge on all the Fixed Assets of Hyderabad Division of the
company. Also the loan is further secured by the personal guarantees of
Sri.Y.S.Chowdary, Chairman of the company and Sri.G.Srinivasa Raju, Director of
the Company and Corporate Guarantee of Sujana Universal Industries Limited.
Hyderabad Division of the company had disposed off 1027 sq yards of land
for a value of Rs 8.473 millions during 2004-05 and the sale agreement is
pending for registration.
Term Loan dues of Chennai Division of the company amounting to
Rs.546.450 millions to Stressed Assets Stabilisation Fund (IDBI) is secured by
a Pari Passu first charge on the Fixed Assets of the Chennai Division of the
company with IIBI, both present and future, and further secured by the personal
guarantees of Shri.Y.S.Chowdary, Sri.S.T.Prasad, Sri G.Srinivasa Raju and Sri
M.R.K.Varma in their personal capacities. It is also additionally secured by
the Corporate Guarantee of Sujana Universal Industries Limited.
Industrial Investment Bank of India Limited had crystallized all the
term loans and funded interest loan of Chennai Division of the company into a
single loan of Rs.151.700 millions and the same along with interest accrued and
dues amounting totaling in all to Rs. 175.470 millions is secured by a first
charge ranking Pari Passu with IDBI on all the movable and immovable properties
of Chennai Division of the company (subject to the First Pari Passu Charge on
the Current Assets of the Company in favour of the Working Capital Bankers) and
also by the personal guarantees of Shri.Y.S.Chowdary, Sri.S.T.Prasad,
G.Srinivasa Raju and Mr.M.R.K.Varma in their personal capacities and further
secured by the Corporate Guarantee of Sujana Universal Industries Limited.
The Chennai Division of the Company is negotiating with both IDBI and
IIBI for the prepayment of the entire term loan and hence have not paid the
interest that has fallen due besides the installment of principal dues to IIBI.
However interest at the rates as agreed as per the restructuring scheme is
provided for in the books and shown as interest accrued and due and added along
with the principal dues.
Chennai Division of the company has availed working capital limits of
Rs.1080.000 millions - Rs.540.000 millions each from Indian Bank, Thousand
Lights Branch Chennai and Indian Overseas Bank, Cathedral Branch Chennai
secured by First Paripassu Charge on the Current Assets of Chennai Division of
the Company, both Present and Future, Second Pari Passu Charge on the Fixed
Assets of the Chennai Division of the Company and further Secured by the
Corporate Guarantee of Sujana Universal Industries Limited and the Personal
Guarantees of both Sri.Y.S.Chowdary and Sri G.Srinivasa Raju Promoter Directors
of the Company.
Cumulative Redeemable Preference Shares During the year under review,
2038260, 1% Cumulative Redeemable Preference Shares of Rs.100/- each amounting
to Rs.203.826 millions were issued in favour of IDBI Limited issued by the
company under the scheme of Arrangement and Amalgamation, which would be
redeemed in 12 quarterly installments co terminus with principal repayments
commencing from July 01, 2015 and ending on April 01, 2018. During the year
under review, 1493365, 1% Cumulative Redeemable Preference Shares amounting to
Rs. 149.337 millions were issued in favour of IDBI Limited issued by the
company under the scheme of Arrangement and Amalgamation, which would be
redeemed in 12 quarterly installments co terminus with principal -repayments
commencing from Oct 01, 2013 and ending on July 01, 2016.
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.40.15 |
|
UK Pound |
1 |
Rs.80.54 |
|
Euro |
1 |
Rs.63.41 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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 |
|