MIRA
INFORM REPORT
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Report Date : |
24.11.2008 |
IDENTIFICATION DETAILS
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Name : |
HINDUSTHAN ENGINEERING AND INDUSTRIES LIMITED |
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Formerly Known As : |
HINDUSTHAN DEVELOPMENT CORPORATION LIMITED |
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Registered Office : |
Mody Building, 27, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
12.01.1998 |
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Com. Reg. No.: |
086303 |
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CIN No.: [Company
Identification No.] |
U27109WB1998PLC086303 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALH01587F |
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PAN No.: [Permanent
Account No.] |
AAACH8505Q |
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Legal Form : |
Public Limited Liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturer of Engineering Goods, Iron and Steel Goods, Chemicals,
Calcined Petroleum Coke, etc. |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Maximum Credit Limit : |
USD 31670000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. The company’s
profit margin is under severe pressure. Its payments are reported as slow and
delayed at times. In view of the aforesaid, the company can be considered for small to
mediocre business dealings at usual trade terms and conditions with slight
caution. |
LOCATIONS
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Registered Office : |
Mody Building, 27, |
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Tel. No.: |
91-33-2280166 (3 lines) |
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Telex: |
021-3309 |
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Fax No.: |
91-33-2281922 |
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E-Mail : |
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Website : |
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Factories : |
Corporate Planning &
Co-ordination Kanchenjunga, 7th floor, Gram: HIDVOL-New Telex: 031-62989, 031-63149 Fax: 91-11-23314467 Phone: 91-11-23310001 (5 lines), 23313792, 23313471 Plants Manufacturing Railway
Products Engineering
Unit: Bamunari Plant, Gram:
HINDEVCO-Calcutta Telex: 021-3309 Santragachi Plant, Post Office Jagacha 711
311, District Telex: 021-3309 Tiljala Plant, Gram: HINDEVCO-Calcutta Telex: 021-3309 Fax: 91-33-2281922 Phone: 91-33-2442366 (5 lines) Bharatpur Industrial Area, Bharatpur 321
001, Gram: HINDEVCO-Bharatpur Located at:
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DIRECTORS
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Name : |
Mr. R.P. Mody |
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Designation : |
Chairman |
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Name : |
Dr. Alak Ghosh |
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Designation : |
Director |
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Name : |
Mr. Santanu Chaudhuri |
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Designation : |
Director |
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Name : |
Mr. Biswajit Choudhuri |
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Designation : |
Director |
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Name : |
Mr. Satish Kapur |
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Designation : |
Director |
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Name : |
Mr. Dileep Krishna Rohatgi |
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Designation : |
Director |
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Name : |
Mr. R.R. Mehta |
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Designation : |
Executive Director |
KEY EXECUTIVES
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Name : |
Mr. R.K. Agarwal |
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Designation : |
Secretary |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Engineering Goods, Iron and Steel Goods, Chemicals, Calcined
Petroleum Coke, etc. |
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Products : |
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PRODUCTION STATUS As on 31.03.2007
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Ammonium Sulphate |
M.T. |
2649 |
3311 |
1741 |
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Calcined Petroleum Coke |
M.T. |
75000 |
93750 |
32339 |
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Carbon Electrode Paste |
M.T. |
10000 |
12500 |
-- |
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Castings |
M.T. |
25000 |
30000 |
4423 |
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Cyanides |
M.T. |
10672 |
12315 |
6988 |
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Diphenyl Guandine |
M.T. |
1000 |
825 |
306 |
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Hydrocyanic Acid |
M.T. |
3656 |
4570 |
3682 |
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Jute Goods |
Looms |
NA |
746 |
33537 |
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Points and Crossings |
ETO |
6278 |
16650 |
28 |
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Railway Crossing Stock |
Nos. |
8056 |
5070 |
671 |
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Steel Wires |
M.T. |
71000 |
86250 |
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GENERAL INFORMATION
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Bankers : |
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Facilities : |
Secured Loans :
Unsecured Loans :
Security: (a) Item (i) is secured by Legal mortgage of a piece of land in Maharashtra and equitable mortgage of immovable properties and by hypothecation of movable properties (other than book debts and such assets which are exclusively charged) of Company’s Engineering unit having Plants at Tiljala, Santragachi and Bamunari situated in the state of West Bengal. (b) Rs.43.520 millions of item (ii) is secred by hypothecation of certain specific machinery of Bamunari Plant of Engineering Unit, Baratpur and Faridabad Plants of General Enginerring Works (GEW) acquired under Equipment Finance Scheme. (c) Item (iii) secured by hypothecation/lien of stocks and book debts of which Rs.18.170 millions is also secured by charge on fixed and movable assets of Petrocarbon and Chemicals Company Unit. Leeter of Credits and Bank Guarantees are also secured by extension of Charge over current assets. |
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Banking
Relations : |
--- |
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Auditors : |
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Name : |
A.K. Gutgutia and Company Chartered Accountants |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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25000000 |
Equity Shares |
Rs.10/- each |
Rs.250.000 millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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24743552 |
Equity Shares |
Rs.10/- each |
Rs.247.436
millions |
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Out of the above 24743482 equity shares of Rs.10/-
each allotted pursuant to the scheme of Arrangement for consideration other
then cash.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
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31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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247.436 |
247.436 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
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6086.774 |
6144.549 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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6334.210 |
6391.985 |
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LOAN FUNDS |
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1] Secured Loans |
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677.475 |
677.565 |
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2] Unsecured Loans |
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17.821 |
17.821 |
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TOTAL BORROWING |
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695.296 |
695.386 |
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DEFERRED TAX LIABILITIES |
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81.449 |
110.173 |
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TOTAL |
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7110.955 |
7197.544 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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1166.441 |
1178.452 |
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Capital work-in-progress |
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149.120 |
221.299 |
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INVESTMENT |
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0.044 |
0.044 |
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DEFERREX TAX ASSETS |
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0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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616.313 |
842.677 |
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Sundry Debtors |
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727.146 |
734.500 |
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Cash & Bank Balances |
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134.677 |
149.463 |
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Other Current Assets |
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0.000 |
0.000 |
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Loans & Advances |
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5019.973 |
5131.662 |
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Total
Current Assets |
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6498.109 |
6858.302 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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391.677 |
763.411 |
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Provisions |
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311.082 |
297.142 |
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Total
Current Liabilities |
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702.759 |
1060.553 |
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Net Current Assets |
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5795.350 |
5797.749 |
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MISCELLANEOUS EXPENSES |
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0.000 |
0.000 |
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TOTAL |
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7110.955 |
7197.544 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
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31.03.2007 |
31.03.2006 |
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Sales Turnover |
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2867.155 |
3312.517 |
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Other Income |
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75.378 |
28.262 |
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Total Income |
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2942.533 |
3340.779 |
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Profit/(Loss) Before Tax |
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(85.143) |
(64.487) |
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Provision for Taxation |
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(27.371) |
(15.818) |
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Profit/(Loss) After Tax |
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(57.772) |
(48.669) |
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Earnings in Foreign Currency : |
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Export Earnings |
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300.006 |
488.862 |
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Total Earnings |
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300.006 |
488.862 |
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Imports : |
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Raw Materials |
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221.368 |
225.186 |
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Stores & Spares |
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0.614 |
0.458 |
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Capital Goods |
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0.814 |
0.000 |
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Others |
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0.041 |
0.000 |
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Total Imports |
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222.837 |
225.644 |
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Expenditures : |
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Manufacturing Expenses and Other Expenses |
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2807.919 |
3216.452 |
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Interest |
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121.152 |
87.465 |
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Depreciation & Amortization |
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98.605 |
101.349 |
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Total Expenditure |
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3027.676 |
3405.266 |
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KEY RATIOS
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PARTICULARS |
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31.03.2007 |
31.03.2006 |
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PAT / Total Income |
(%) |
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(1.96) |
(1.46) |
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Net Profit Margin (PBT/Sales) |
(%) |
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(2.97) |
(1.95) |
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Return on Total Assets (PBT/Total Assets} |
(%) |
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(1.09) |
(0.78) |
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Return on Investment (ROI) (PBT/Networth) |
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(0.01) |
(0.01) |
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Debt Equity Ratio (Total Liability/Networth) |
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0.22 |
0.27 |
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Current Ratio (Current Asset/Current Liability) |
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9.25 |
6.47 |
LOCAL AGENCY FURTHER INFORMATION
OPERATING RESULTS:
The overall performance of the company’s Engineering Unit during the year
was affected due to irregular supply of steel and wheels by Railways. Further,
the Bamunari Plant was under lockout for a part of the year and Tiljala Plant
is under suspension of work since March’2007. As a result, both plants could be
run at much reduced capacity. However, the wagon plant has sufficient orders
but the demands of the industry. The order position is quite satisfactory and
demand is also encouraging.
The
Petrocarbon and Chemicals Company, the company’s chemical division at
Haldia achieved lower production and sales during the year as compared to last
year. Prices of the finished goods Calcined Petroleum Coke ruled at a lower
level inspite of considerable increase in the prices of its raw materials and
other input costs. Due to higher labour cost the company discharged all workmen
by paying Compensation in January, 2007. The production will resume only if
negotiation with the workmen are successful.
Cyanides and Chemicals Company, the company’s chemical division at
Olpad, District Surat (
Dalhousie Jute Company, the company’s jute unit, achieved a lower
production and sales during the year as compared of jute goods were generally
good. Efforts to increase productivity are being continuously made. Raw Jute
availability during the year was not comfortable and prices were higher than
previous year.
FIXED ASSETS:
- Land –
Freehold and Leasehold
- Buildings
- Railway
Siding and Jetty
- Machinery
- Electric
Installation, Water and Sanitation System
- Tools and
Equipments
- Furniture and
Fixtures
- Motor Cars
and Vehicles
WEBSITE DETAILS:
HISTORY:
Subject (previously Hindusthan Development Corporation) was
set up in 1944 with Track materials plant at Tiljala. In the year 1964, Sri
R.P.Mody, acquired the company which at that time had only one plant at Tiljala
producing Fabricated Points, Switches and Turnouts, Steel Sleepers and other
Railway Track components.
The company witnessed very aggressive and all round growth
in 1970's when the expansion in the Indian Railways took place for achieving
the industrialization of the country. HEI became the major supplier of Railway
Track materials and enjoyed a major market share with Indian Railways. In tune
with the demand of economic growth, HEI continued its thrust on further
diversification and in the process either acquired existing projects in the
Core Sector or set up Greenfield Projects in a wide spectrum of industrial
activities. HEI acquired a Wagon Building Plant at Santragachi while a Green
field Project for manufacture of Cyanide and Coke was established in Olpad in
the state of
The company was also in the forefront for bringing state of
the art technology from global leaders for the benefit if the Indian Economy.
It has brought to India CMS Crossings tieup with Bethlehem Steel Corporation,
HEI made rapid inroads in the International Market with its products. HEI products viz. Steel Castings, Cyanides, Track materials found ready acceptance all over the world. HEI developed a parallel export market for many of its products.
With the spread of globalization and emergence of fierce competition, HEI realized to the need to restructure and reform and are in the process of reorienting its priorities to become a cost effective, customer friendly Industrial Conglomerate with focus on Research and Development.
The Govt. India has recognized its Research and Development
Cell in the Steel foundry as an accredited Research and
The present sales turnover of the company is approximately
US$80 million. They are currently exporting to
In
the domestic market, HEI primarily caters to Indian Railways, Ministry of
Defence and other Public Sector undertakings. HEI is the market leader in the
area it operates. HEI is the sole supplier of special containers to CONCOR for
the last ten year and no other Indian Company can claim this unique
distinction.
PROFILE:
Subject, (erstwhile Hindusthan Development Corporation Limited) is a multi-product, multi-unit organization having varied interests in the fields of Railway track components like Turnouts, Points and Crossings, Steel Sleepers, Railway Rolling Stock comprising of all types of freight wagons, alloy steel and manganese steel castings, carbon products, jute products and gas based chemicals.
The steel foundry of Subject. (HEI) situated on the
outskirts of
The foundry is the first and the only foundry in
HEI is the licensee of Standard Car Truck Company,
PROMOTERS:
Shri R.P. Mody,
promoter is the Chairman of the company and also Director of various other
companies. He has a vast experience of over 40 years in various industries
comprising of Engineering, Steel Castings, Chemicals, Petrocarbon and Jute.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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
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Indian Rupees |
|
US Dollar |
1 |
Rs.50.03 |
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|
1 |
Rs.74.42 |
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Euro |
1 |
Rs.62.71 |
SCORE & RATING EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
7 |
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PAID-UP CAPITAL |
1~10 |
5 |
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OPERATING SCALE |
1~10 |
3 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
3 |
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--PROFITABILIRY |
1~10 |
-- |
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--LIQUIDITY |
1~10 |
4 |
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--LEVERAGE |
1~10 |
4 |
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--RESERVES |
1~10 |
4 |
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--CREDIT LINES |
1~10 |
4 |
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--MARGINS |
-5~5 |
-- |
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DEMERIT POINTS |
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
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--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
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MERIT POINTS |
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
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--EXPORT ACTIVITIES |
YES/NO |
YES |
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--AFFILIATION |
YES/NO |
NO |
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--LISTED |
YES/NO |
YES |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
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34 |
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
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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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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 |
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