MIRA
INFORM REPORT
|
Report Date : |
07.05.2008 |
IDENTIFICATION
DETAILS
|
Name : |
INDIA STEEL WORKS LIMITED |
|
|
|
|
Formerly Known As : |
ISIBARS LIMITED |
|
|
|
|
Registered Office : |
C- 63, TTC MIDC, Turbhe, Navi Mumbai-400 705, Mumbai, Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2007 |
|
|
|
|
Date of Incorporation : |
15.04.1987 |
|
|
|
|
Com. Reg. No.: |
43186 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L29100MH1987PLC043186 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
MUMI01649E |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACI1362A |
|
|
|
|
Legal Form : |
A Public Limited Company. The company’s shares are again listed on the
Stock Exchange after a lapse of 7/8 months. |
|
|
|
|
Line of Business : |
Manufacturer and Marketer of Special Steels and Bright
Bars. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Ca |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Status : |
Poor |
|
|
|
|
Payment Behaviour : |
Slow and Delayed |
|
|
|
|
Litigation : |
Exist |
|
|
|
|
Comments : |
Ms. Renuka Daga, Company Secretary of the company up-dated the report.
Although, the company is passing through difficult times having huge
accumulated losses, it has started making small profit. As claimed, some
pending recovery cases against the company has been resolved. As further
claimed there is no major issues against the company except its difficult
financial health. It’s payment are delayed suppliers prefer cash against delivery. In view of the aforesaid, it would be prudent to deal with the company
on safe and secured trade terms and conditions, only. |
LOCATIONS
|
Registered Office/ Factory : |
C- 63, TTC Area, MIDC Turbhe, Navi Mumbai-400 705, Mumbai, Maharashtra
, India |
|
Tel. No.: |
91-22-27686446 / 2768 6437 / 27670424 |
|
Fax No.: |
91-22-27633888 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office : |
India Steel Complex, MTV Road, Wadala (East), Mumbai – 400 037,
Maharashtra, India |
|
Tel. No.: |
91-22-24145582 |
|
E-Mail : |
91-22-24146022 |
DIRECTORS
|
Name : |
Mr. Harbanslal B Gupta |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Ashwin Kumar H Gupta |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. S P Khosla |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Harish Chander |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Neeraj Agarwala |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Bimal Desai |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mrs. Renuka Daga |
|
Designation : |
Company Secretary |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer and Marketer of Special Steels and Bright
Bars. |
|
|
|
|
Exports : |
|
|
Products : |
Finished Products |
|
Countries : |
USA, South East Asia , Middle East |
|
|
|
|
Imports : |
|
|
Products : |
Raw Materials |
|
Countries : |
USA |
|
|
|
|
Terms : |
|
|
Selling : |
L/C, Cash, Credit |
|
|
|
|
Purchasing : |
Cash |
GENERAL
INFORMATION
|
Customers : |
Wholesalers, Retailers, End Users, OEM’s |
|
|
|
|
No. of Employees : |
400 |
|
|
|
|
Bankers : |
Indian Bank , Mumbai Branch |
|
|
|
|
Banking
Relations : |
Unknown |
|
|
|
|
Auditors : |
|
|
Name : |
Thanawala and Company Chartered Accountant |
|
|
|
|
Associates/Subsidiaries : |
Nil |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
60000000 |
Equity Shares |
Rs. 10/- each |
Rs.600.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
29380000 |
Equity Shares |
Rs.10/- each
|
Rs.293.800
millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
293.800 |
267.700 |
267.700 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
[407.900] |
[793.300] |
[379.000] |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
[114.100] |
[525.600] |
[111.300] |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2246.200 |
2477.100 |
2470.900 |
|
|
2] Unsecured Loans |
33.600 |
33.200 |
3.600 |
|
|
TOTAL BORROWING |
2279.800 |
2510.300 |
2474.500 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
2165.700 |
1984.700 |
2363.200 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1963.600 |
2072.600 |
2438.600 |
|
|
Capital work-in-progress |
33.900 |
2.200 |
0.400 |
|
|
|
|
|
|
|
|
INVESTMENT |
2.500 |
3.400 |
4.200 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
53.500
|
22.400 |
24.900 |
|
|
Sundry Debtors |
172.100
|
205.000 |
130.400 |
|
|
Cash & Bank Balances |
72.000
|
53.400 |
12.600 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
169.000
|
152.000 |
130.200 |
|
Total
Current Assets |
466.600
|
432.800 |
298.100 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
293.700
|
519.200 |
374.300 |
|
|
Provisions |
8.300
|
7.400 |
4.800 |
|
Total
Current Liabilities |
302.000
|
526.600 |
379.100 |
|
|
Net Current Assets |
164.600
|
[93.800] |
[81.000] |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
1.100 |
0.300 |
1.000 |
|
|
|
|
|
|
|
|
TOTAL |
2165.700 |
1984.700 |
2363.200 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
841.500 |
552.400 |
572.000 |
|
|
Other Income |
225.600 |
16.900 |
520.100 |
|
|
Total Income |
1067.100 |
569.300 |
1092.100 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
41.700 |
[411.400] |
393.700 |
|
|
Provision for Taxation |
0.500 |
0.500 |
0.000 |
|
|
Profit/(Loss) After Tax |
41.200 |
[411.900] |
393.700 |
|
|
|
|
|
|
|
|
Export Value |
26.300 |
23.900 |
NA |
|
|
|
|
|
|
|
|
Import Value |
0.217 |
NA |
NA |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
82.900 |
53.900 |
53.800 |
|
|
Administrative Expenses |
27.400 |
20.600 |
25.600 |
|
|
Raw Material Consumed |
288.000 |
128.200 |
100.300 |
|
|
Increase/(Decrease) in Finished Goods |
[4.700] |
2.200 |
[1.000] |
|
|
Interest & Financial Charges |
85.900 |
87.300 |
84.000 |
|
|
Power & Fuel |
324.800 |
240.700 |
223.500 |
|
|
Depreciation & Amortization |
130.300 |
138.100 |
140.300 |
|
|
Other Expenditure |
21.300 |
257.900 |
24.800 |
|
Total Expenditure |
955.900 |
928.900 |
651.300 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
422.000 |
397.300 |
617.700 |
|
Other Income |
0.000 |
383.500 |
0.400 |
|
Total Income |
422.000 |
780.800 |
618.100 |
|
Total Expenditure |
395.000 |
377.100 |
595.600 |
|
Operating Profit |
27.000 |
403.700 |
22.500 |
|
Interest |
19.500 |
-10.400 |
4.500 |
|
Gross Profit |
7.500 |
414.100 |
18.000 |
|
Depreciation |
30.600 |
32.500 |
33.200 |
|
Tax |
0.100 |
0.200 |
2.400 |
|
Reported PAT |
-23.200 |
381.400 |
-17.600 |
KEY RATIOS
|
Year |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
0.55 |
0.39 |
0.26 |
|
TURNOVER RATIOS |
|||
|
Fixed Assets |
0.27 |
0.18 |
0.18 |
|
Inventory |
22.17 |
23.36 |
29.87 |
|
Debtors |
4.46 |
3.29 |
4.76 |
|
Interest Cover Ratio |
-1.06 |
-3.71 |
-0.34 |
|
Operating Profit Margin(%) |
4.62 |
-33.67 |
19.51 |
|
Profit Before Interest And Tax Margin(%) |
-10.86 |
-58.67 |
-5.02 |
|
Cash Profit Margin(%) |
-5.64 |
-49.57 |
4.83 |
|
Adjusted Net Profit Margin(%) |
-21.13 |
-74.57 |
-19.70 |
|
Return On Capital Employed(%) |
-3.47 |
0.00 |
-0.98 |
|
Return On Net Worth(%) |
-113.28 |
0.00 |
-71.92 |
LOCAL AGENCY
FURTHER INFORMATION
Financial Highlights (Rs.
in millions) Particulars Year ended Year ended 31.3.2007 31.3.2006
Sales/Income including Job work operations 842.500 553.400 Other Income 5.700 15.500 (Increase)/Decrease in stock of finished goods (474.100) 2.200 Operating Profit / (Loss) 38.900 62.300 Less: Interest 85.800 87.300 Less: Provision for Depreciation 130.200 138.100 Less: Impairment Loss – 248.300 Add: Extra-ordinary income 218.900 -Profit /(Loss) before tax 41.700 (163.100) FBT (00.500) (00.400)Brought forward profit/ (loss) from last year (1381.000) (966.800) Reduction in share capital 218.000 -Prior Period Adjustments 3.100 (2.300) Balance carried forward to Balance Sheet (1124.500) (1381.000)
Financial
Restructuring
The Corporate Debt Restructuring (CDR) Scheme of the Company, dated February 24, 2004 is being re-considered for a revision to attain sustainable levels of debts. Further, as on the date of this report, the Company has already paid-off three of the four non-CDR lenders under a One Time Settlement (OTS). The Company continues its endeavour to settle with the balance one lender.
Litigations
The winding up petitions filed by Commerzbank AG continue to be contested
by the Company, while the winding up petition of Inductotherm India Private
Limited against the Company has been dismissed by the Honourable High Court of
Bombay.
Reference To Board For Industrial and
Financial Recontruction
Though the entire net worth of the Company has been eroded, no reference has been made to the Board for Industrial and Financial Reconstruction in view of certain legal impediment.
Exports
The Company made exports of Rs.26.300 millions during the year under review as
compared to the exports of Rs.23.900 millions made in the previous year. The
Company has the required technical and marketing edge to compete in the
international stainless steel market. However, paucity of working capital funds
is adversely affecting the export potential of the Company. The Company is
constrained to carry out job work orders for competing exporters while
restricting its own exports to lower grades of stainless steel requiring lesser
operational funds.
Information Pursuant To Section 217 of
The Companies Act, 1956
Information relating to conservation of energy and technology absorption as required under section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this report.
There were no employees in receipt of remuneration as required under Section
217 (2A) of the Companies Act, 1956.
MANAGEMENT DISCUSSION
AND ANALYSIS
The Steel
Industry:
The Indian Economy continued to stride with pace and grit at
a GDP growth rate of above 9% in the first quarter of the current fiscal. And,
because of the critical role played by steel in the overall economic and
infrastructural development the steel industry is often considered to be an
indicative for economic prowess and vice versa.
The morale of the Indian steel industry is further boosted with the
proactive global acquisitions, joint partnerships and consolidations by some of
the Indian Companies. As the Indian steel companies, move from strength to
strength, quality with cost competitiveness will be the key drivers for striding
forth in the league of the international markets.
Outlook
Persistent efforts with a firm resolve to turnaround the fortunes are
continued. Several Operational initiatives taken up that are aimed at improving
the EBIDTA levels by pruning down past effects and building up for the
future.
It is an uphill task, in the sight of limited resources and enlarged demands.
But the Company has gone all ahead to take constructive measures for sustained
growth. The plants have already been put under extensive revamp and
refurbishment to overcome frequent break-downs. Settlements with Lenders are
proposed through fresh funds from potential investors
These efforts along with the required working capital should improve the
performance of the Company. In the current reporting year, the Company has
started partial operations on own production basis, with the arrangement of
some working capital funds from the promoters and the strategic investor under
the CDR Scheme.
The Company is also working upon the technical aspects of improving its
processes and systems for securing more effective control mechanism.
OPPORTUNITIES and THREATS
Opportunities:
· The proposed revised financial restructuring with the Lenders.
· Integrated facility at one location with necessary certifications.
· Acceptance of the products in the quality conscious markets.
· Export potential in the traditionally overlooked markets.
· The impending Long term Joint Venture with Kalyani Steels Limited.
Threats:
·
Inadequate funds for working
capital, stores and spares.
·
Continuous
appreciation of the rupee along with hardening of interest rates in the
economy.
·
Heavy fluctuation in
the prices of the basic raw materials and escalation of fuel prices.
· Suits filed by Commerz Bank in the Debts Recovery Tribunal and winding up petitions filed by Commerz Bank and Inductotherm India Private Limited continue to be contested.
Risks and Concerns
The overhang of the financial stress on the Company cannot be surmounted without revised settlements with Lenders of the Company, conjoined and balanced with the tie-up of adequate funds at sustainable levels.
Additionally, it would be a real challenge for the Company to reinforce itself, in the era of global consolidations and expansions in the steel industry.
Material Development
In Human Resources
It is an earnest endeavour to create a responsive organisation with emphasis on performance with responsibility and accountability. Continuous appraisal of the competencies of the personnel in line with job requirements are carried their to facilitate higher levels of output and productivity. The overall industrial relations have been cordial and conducive to work, in the year under review.
Discussion On Financial Performance With
Respect To Operational Performance
Improved quantitative performances in the last fiscal year
are can be linked to the ongoing revamp and refurbishment exercise being
carried out of the plant at Khopoli. The operational performance has reflected
in better financial performance in the last financial year. Had this
operational performance be translated in own production instead of job work,
the results could have been far more encouraging than what is achieved.
WEBSITE DETAILS:
The company was belongs to the Isibar group. The company is engaged in the business of manufacturing and marketing of special steels and bright bars. It operates through two divisions, namely, bright bar division and special steels and rolling mill division.
The bright bar division manufactures a wide range of bright bars, specialising
in stainless steel, by different processes, like heat treatment, quenching and
tempering, pickling, cold drawing, peeling, smooth turning, centreless grinding
and polishing.
The steel and rolling mill division manufactures hot rolled products, i.e.,
wire rods and bars. The product list of the company includes, steel billets,
hot rolled bars, wire rods, cold finished bars, wires, s. s. forging, flanges,
etc.
The plants of the company are equipped with equipments by internationally
reputed companies, viz, Schumag, Kieserling, Sir James Farmer Norton,
Cincinatti, WMW, Jotes, etc.
The registered office of the company is located at Navi Mumbai. It has two
plants located at Turbhe, Navi Mumbai and Khopoli in Maharashtra. The installed
capacity of the company is 40000 tonnes of steel billets and 80000 tonnes of
hot rolled bars and wire rods.
05-OCT-07
The members of Isibars at the 20th Annual General Meeting (AGM) of the company
held on Sep. 29, 2007, has decided to change the name of the company from
`Isibars` to `India Steel Works.`
PRESS RELEASES:
India Steel Works Limited To Raise $ 27 million Via Private Limited Liability Company Placement – Reuters
Reuters Key Development – Feb 11, 2008
Reuters reported that India Steel Works Limited is raising $ 27 million through a private placement of 36.55 million shares to a foreign investor.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No 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 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.40.69 |
|
UK Pound |
1 |
Rs.80.25 |
|
Euro |
1 |
Rs.63.08 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
--- |
|
OPERATING SCALE |
1~10 |
2 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
2 |
|
--PROFITABILIRY |
1~10 |
--- |
|
--LIQUIDITY |
1~10 |
1 |
|
--LEVERAGE |
1~10 |
2 |
|
--RESERVES |
1~10 |
--- |
|
--CREDIT LINES |
1~10 |
1 |
|
--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 |
|
13 |
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 |
|