MIRA
INFORM REPORT
|
Report Date : |
16.08.2011 |
IDENTIFICATION DETAILS
|
Name : |
ESSAR STEEL LIMITED |
|
|
|
|
Registered
Office : |
27KM, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2010 (Amalgamated) |
|
|
|
|
Date of
Incorporation : |
01.06.1976 |
|
|
|
|
Com. Reg. No.: |
04-013787 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs. 11840.800 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
U27100GJ1976FLC013787 |
|
|
|
|
Legal Form : |
A Closely Held Public Limited Liability Company. |
|
|
|
|
Line of Business
: |
Manufacturers of Iron Ores and Concent Rates, Hot Rolled Coils/ Sheets
and Pellets, etc. |
|
|
|
|
No. of Employees
: |
Not Divulged by
the management |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (45) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 365000000 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Usually Correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an established company having satisfactory track. Trade relations
are reported as fair. Business is active. Payments are reported to be usually
correct and as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INFORMATION DECLINED BY
Management Non Co-operative [Name not disclosed]
LOCATIONS
|
Registered Office : |
27KM, |
|
Tel. No.: |
91-261-6682400 |
|
Fax No.: |
91-668-6682796/ 91-261-6682796 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office : |
Essar House, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai – 400034, |
|
Tel. No.: |
91-22-66601100 |
|
Fax No.: |
91-22-66669426 |
DIRECTORS
AS ON 30.09.2010
|
Name : |
Mr. Shashikant Nandkishore Ruia |
|
Designation : |
Chairman |
|
Address : |
67-A, |
|
Date of Birth/Age : |
23.12.1943 |
|
Date of Appointment : |
01.06.1976 |
|
DIN No : |
00047050 |
|
|
|
|
Name : |
Mr. Prashant Shashikant Ruia |
|
Designation : |
Director |
|
Address : |
Bin Hamooda Villa No.17, 332/14, Jumeriah, |
|
Date of Birth/Age : |
04.06.1969 |
|
Date of Appointment : |
22.12.1987 |
|
Election ID No : |
MT/04/024/099773 |
|
DIN No : |
01187548 |
|
|
|
|
Name : |
Mr. Ravikant Nandkishore Ruia |
|
Designation : |
Director |
|
Address : |
Bin Hamooda Villa No.17, 332/14, Jumeriah, |
|
Date of Birth/Age : |
22.04.1949 |
|
Date of Appointment : |
01.06.1976 |
|
Election ID No : |
MT/04/024/099889 |
|
|
|
|
Name : |
Mr. Singanallur Venkatraman Venkatesan |
|
Designation : |
Director |
|
Address : |
F-401, The Atrium, Old 49, New 22, |
|
Date of Birth/Age : |
01.10.1939 |
|
Date of Appointment : |
28.11.1991 |
|
DIN No : |
00004010 |
|
|
|
|
Name : |
Mr. Jatinder Mehra |
|
Designation : |
Director |
|
Address : |
Block C-1/36, Safarjang Development Area, New Delhi-110016, |
|
Date of Birth/Age : |
03.03.1939 |
|
Date of Appointment : |
25.06.1997 |
|
DIN No : |
00042789 |
|
|
|
|
Name : |
Mr. Govind Venkatraman Raghavan |
|
Designation : |
Director |
|
Address : |
171 and 172 Tower B, Kalpataru Residency, Opposite Cine Planet, Kamani
Marg, Sion East, Mumbai-400022, |
|
Date of Birth/Age : |
16.07.1945 |
|
Date of Appointment : |
29.10.2003 |
|
DIN No : |
00008683 |
|
|
|
|
Name : |
Mr. Malay Mukherjee |
|
Designation : |
Director |
|
Address : |
81, |
|
Date of Birth/Age : |
26.01.1948 |
|
Date of Appointment : |
26.11.2009 |
|
DIN No : |
02861065 |
|
|
|
|
Name : |
Mr. Vikram Harishchandra Amin |
|
Designation : |
Director |
|
Address : |
No. 5A, Plot No.5, K A G Khan Marg, |
|
Date of Birth/Age : |
07.12.1958 |
|
Date of Appointment : |
31.10.2001 |
|
DIN No : |
00008119 |
|
|
|
|
Name : |
Mr. Cheriyal Dilip Oommen |
|
Designation : |
Director |
|
Address : |
D-3/4, Nandniketan Towership, Hazira, Surat-394270, |
|
Date of Birth/Age : |
28.03.1958 |
|
Date of Appointment : |
07.07.2008 |
|
DIN No : |
02285794 |
|
|
|
|
Name : |
Mr. Mahadev Iyer |
|
Designation : |
Whole Time Director |
|
Address : |
109/110, Indira Apartment, |
|
Date of Birth/Age : |
01.07.1958 |
|
Date of Appointment : |
16.02.2009 |
|
DIN No : |
01871295 |
|
|
|
|
Name : |
Mr. Kiznagar Venkatesan Krishnamurthy |
|
Designation : |
Director |
|
Address : |
174, |
|
Date of Birth/Age : |
08.05.1943 |
|
Date of Appointment : |
31.10.2006 |
|
DIN No : |
00025075 |
|
|
|
|
Name : |
Mr. Jitender Balakrishnan |
|
Designation : |
Director |
|
Address : |
A-1, Flat NO.12, Tanna Residency, Prabhadevi, Mumbai-400025, |
|
Date of Birth/Age : |
08.05.1949 |
|
Date of Appointment : |
25.08.2010 |
|
DIN No : |
00028320 |
|
|
|
|
Name : |
Mr. Rewant Ravikant Ruia |
|
Designation : |
Director |
|
Address : |
Bin Hamooda Villa No.17, 332/14, Jumeriah, |
|
Date of Birth/Age : |
20.03.1983 |
|
Date of Appointment : |
29.01.2007 |
|
DIN No : |
01187519 |
KEY EXECUTIVES
|
Name : |
Mr. Narottam B. Vyas |
|
Designation : |
Secretary |
|
Address : |
3A/1701, Whispering Palms, Lokhandwala Complex, Akurli Road, Kandivali
(East), Mumbai-400101, Maharashtra, India |
|
Date of Birth/Age : |
03.07.1954 |
|
Date of Appointment : |
01.10.2002 |
|
PAN No : |
AAEPV9402H |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.09.2010
|
Equity Share
Breakup |
|
Percentage of
Holding |
|
Category |
|
|
|
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others] |
|
88.44 |
|
Bodies corporate |
|
8.65 |
|
Other top fifty shareholders |
|
0.23 |
|
Others |
|
2.65 |
|
|
Total
|
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers of Iron Ores and Concent Rates, Hot Rolled Coils/ Sheets
and Pellets, etc. |
||||||||||||||
|
|
|
||||||||||||||
|
Products : |
|
PRODUCTION STATUS (AS ON 31.03.2010)
Licensed Capacity
Installed Capacity (as certified by the management) per annum
|
Particulars |
Unit |
Licensed
Capacity |
|
|
MT |
8000000 |
|
Hot Briquette Iron |
MT |
5000000 |
|
Hot Rolled Coil |
MT |
3600000 |
|
Cold Rolled Coil |
MT |
2110000 |
|
Colour Coating |
MT |
400000 |
|
Plate Mill (Under Trial Run) |
MT |
1500000 |
|
H-Saw Pipe Mill (Including Capacity of Plant under Trial Run 150,000 MT) |
MT |
275000 |
Production
|
Particulars |
Unit |
Installed
Capacity |
|
|
MT |
3446645 |
|
Hot Briquette Iron |
MT |
4039773 |
|
Hot Rolled Coils/Cold Rolled Coils |
MT |
3300284 |
|
Plates |
MT |
2791 |
|
H-Saw Pipes |
MT |
58949@ |
Captive Consumption
|
Particulars |
Unit |
Actual
Production |
|
|
MT |
4,062,214 |
|
Change in WIP Iron |
MT |
(615,569) |
|
Hot Briquette |
MT |
3,933,356 |
|
Hot Rolled Coils MT |
MT |
134,188 |
|
Change in WIP Coils-lncrease/(Decrease) MT |
MT |
25,865 |
|
Plate Mill |
MT |
239 |
NOTE
* Not applicable in terms of Government of India's Notification No. S.O.477(E) dated 25th July, 1991.
@ includes job work production of 2,771.73 MT (Previous year 3,806.39 MT)
GENERAL INFORMATION
|
No. of Employees : |
Not Divulged by the
management |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Bankers : |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Facilities : |
Notes : 1. Includes loan
of Rs.2000.000 millions which is Secured by Corporate Guarantee from Essar
Steel Holdings Limited. 2. Includes loan
from banks of Rs.2775.500 millions which is Secured by irrevocable and unconditional
Corporate Guarantee and other securities from Essar Global Limited and other
holding companies. Loan Facility is in the form of Letter of Credit
established for project, which as per the sanction letter of ICICI Bank
Limited would be repaid out of equity to be infused. 3. Rupee Notes
aggregating to Rs.503.900 millions (Previous Year Rs.534.100 millions) is
repayable up to 31st March, 2018 carrying interest @ 8% p.a. payable
semi-annually. Dollar Notes aggregating to Rs.1439.400 millions (Previous
Year Rs.1624.800 millions) is repayable on 31st March, 2018 carrying interest
@ 0.25% p.a. payable semi-annually. 4. Payment of the
Deferred Sales Tax Benefit shall be made in five equal annual installments
for each year’s collection (i.e. collection from 2005-06 to 2008-09) starting
from 21st April, 2016. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
S.R. Batliboi and Company Chartered Accountants |
|
Address : |
Jalan Mills Compound, 95, Ganpatrao Kadam Marg, Lower Parel,
Mumbai 400 013, |
|
|
|
|
Holding Company : |
|
|
|
|
|
Fellow Subsidiaries : |
|
|
|
|
|
Subsidiaries : |
|
|
|
|
|
Associates |
|
CAPITAL STRUCTURE
AS ON 30.09.2010
Authorised Capital : Rs.72750.000
Millions
Issued, Subscribed & Paid-up Capital : Rs.26257.960 Millions
AS ON 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7175,000,000 |
Equity Shares |
Rs.10/- each |
Rs.71750.000
Millions |
|
100,000,000 |
10% Cumulative Redeemable Preference Shares |
Rs.10/- each |
Rs.1000.000
Millions |
|
|
Total |
|
Rs.72750.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1139,810,888 |
Equity Shares |
Rs.10/- each |
Rs.11398.100 Millions |
|
|
Add: Shares Forfeited
|
|
Rs.6.700 Millions |
|
|
Total |
|
Rs.11404.800 Millions |
|
|
|
|
|
|
43,598,951 |
10% Cumulative Redeemable Preference Shares |
Rs.10/- each |
Rs.436.000
Millions |
|
|
Total
|
|
Rs.
11840.800 millions |
NOTE
Of the above:
a) 39,87,538 (Previous Year 39,87,538) Equity Shares of Rs.10 each were allotted as fully paid up Bonus Shares by capitalisation of General Reserve.
b) 1,50,000 (Previous Year 1,50,000) Equity Shares of Rs.10 each were allotted as fully paid up for consideration other than cash.
c) 73,45,33,000 (Previous Year 73,45,32,095) Equity shares of Rs.10 each are held by Essar Steel Holding Limited, Mauritius, the holding Company.
d) Nil (Previous Year 4,33,65,516) Equity Shares of Rs.10 each are held by ETHL Global Capital Limited, subsidiary of ultimate holding Company.
e) 3,68,10,816 (Previous Year Nil) equity shares Rs.10 each are held by Hazira Steel-2. subsidiary of holding company.
f)
28,44,55,595 (Previous Year 28,44,55,595) Equity
Shares of Rs.10 each are held by Teletech Investments (
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 (Amalgamated) |
31.03.2009 (Stand Alone) |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
11840.800 |
11840.800 |
11840.800 |
|
|
2] Equity Share Capital on Amalgamation |
10732.500 |
0.000 |
0.000 |
|
|
3] Share Application Money Pending Allotment |
335.300 |
0.000 |
0.000 |
|
|
4] Reserves & Surplus |
68345.000 |
35915.800 |
34472.500 |
|
|
5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
91253.600 |
47756.600 |
46313.300 |
|
|
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
165963.500 |
63176.200 |
53800.300 |
|
|
2] Unsecured Loans |
14736.100 |
9937.700 |
7334.700 |
|
|
TOTAL BORROWING |
180699.600 |
73113.900 |
61135.000 |
|
|
|
|
|
|
|
|
DEFERRED TAX LIABILITIES |
1473.700 |
1136.800 |
297.400 |
|
|
Foreign Currency Monetary Item Translation Difference Account |
42.000 |
0.000 |
0.000 |
|
|
Long-term advance from customers [Amount payable within a year Rs.513.700 Millions (Previous Year Rs.375.200 Millions) |
1172.800 |
1650.700 |
1445.600 |
|
|
|
|
|
|
|
|
TOTAL |
274641.700 |
123658.000 |
109191.300 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
92836.800 |
91288.200 |
92738.900 |
|
|
Capital work-in-progress (Including Capital Advances) |
144922.000 |
5496.100 |
5751.200 |
|
|
|
|
|
|
|
|
INVESTMENT |
4927.900 |
7913.100 |
5152.200 |
|
|
FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCE ACCOUNT |
0.000 |
373.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
26332.300
|
21575.200 |
21081.100
|
|
|
Sundry Debtors |
4712.400
|
4074.700 |
3604.000
|
|
|
Cash & Bank Balances |
17712.500
|
5081.600 |
3994.900
|
|
|
Other Current Assets |
10561.900
|
1257.800 |
1206.700
|
|
|
Loans & Advances |
20386.100
|
13811.900 |
9535.500
|
|
Total
Current Assets |
79705.200
|
45801.200 |
39422.200 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
20508.500
|
11652.800 |
10744.100 |
|
|
Other Current Liabilities |
22901.700
|
13805.400 |
21765.900 |
|
|
Provisions |
4340.000
|
1755.400 |
1363.200 |
|
Total
Current Liabilities |
47750.200
|
27213.600 |
33873.200 |
|
|
Net Current Assets |
31955.000
|
18587.600 |
5549.000 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
274641.700 |
123658.000 |
109191.300 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 (Amalgamated) |
31.03.2009 (Stand Alone) |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income From Operations |
106195.500 |
116883.000 |
107433.200 |
|
|
|
Other Income |
2734.600 |
1851.800 |
431.100 |
|
|
|
TOTAL (A) |
108930.100 |
118734.800 |
107864.300 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Materials Cost |
75133.800 |
76628.300 |
67295.400 |
|
|
|
Increase in Inventories |
(1671.200) |
(1604.400) |
1687.200 |
|
|
|
Personnel Expenses |
2176.900 |
2330.700 |
2258.000 |
|
|
|
Manufacturing and Asset Maintenance |
10540.400 |
9821.600 |
8574.700 |
|
|
|
Administrative Expenses |
2008.000 |
2374.300 |
2130.800 |
|
|
|
Selling and Distribution Expenses |
3098.000 |
2933.800 |
2387.000 |
|
|
|
Exchange variation and Derivative Losses (net) |
(88.600) |
5397.500 |
(742.500) |
|
|
|
Exceptional Item |
0.000 |
1669.100 |
0.000 |
|
|
|
TOTAL (B) |
91197.300 |
99550.900 |
83590.600 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
17732.800 |
19183.900 |
24273.700 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
9084.000 |
7894.700 |
8294.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
8648.800 |
11289.200 |
15979.000 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
7928.500 |
8281.100 |
7665.200 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX |
720.300 |
3008.100 |
8313.800 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
495.800 |
1156.100 |
4027.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX |
224.500 |
1852.000 |
4286.200 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
18591.000 |
16739.000 |
14442.900 |
|
|
|
|
|
|
|
|
|
Add |
BALANCE ACQUIRED ON
AMALGAMATION |
109.200 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Add |
ADJUSTMENT FOR
EMPLOYEE BENEFITS PROVISION |
0.000 |
0.000 |
18.700 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transferred from Debenture Redemption Reserve |
0.000 |
0.000 |
(155.000) |
|
|
|
Transferred to Capital Redemption Reserve |
0.000 |
0.000 |
2029.200 |
|
|
|
Dividend on Preference Shares [Including Dividend Distribution Tax of Rs.14.800 Millions |
102.000 |
0.000 |
134.600 |
|
|
BALANCE CARRIED
TO THE B/S |
18822.700 |
18591.000 |
16739.000 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
11092.300 |
27616.400 |
29701.000 |
|
|
|
Other Earnings |
553.900 |
2026.900 |
2549.700 |
|
|
TOTAL EARNINGS |
11646.200 |
29643.300 |
32250.700 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
7305.200 |
851.600 |
1453.600 |
|
|
|
Stores & Spares |
7187.600 |
10260.100 |
7067.200 |
|
|
|
Capital Goods |
30994.700 |
1474.700 |
1965.600 |
|
|
|
Trade Goods |
528.500 |
0.000 |
0.000 |
|
|
TOTAL IMPORTS |
46016.000 |
12586.400 |
10486.400 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
0.09 |
1.58 |
-- |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 (Amalgamated) |
31.03.2009 (Stand Alone) |
31.03.2008 |
|
PAT / Total Income |
(%) |
0.21
|
1.55 |
7.71 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
0.68
|
2.57 |
7.74 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
0.42
|
2.19 |
6.29 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.01
|
0.02 |
0.07 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.50
|
2.10 |
2.05 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.67
|
1.68 |
1.16 |
LOCAL AGENCY FURTHER INFORMATION
GLOBAL SCENARIO
The world economy entered into further recession in the 1st half of FY 10 though it started picking up towards the 3rd Quarter. It is now on a definite recovery path. After a sharp, broad and synchronized global, downturn in late 2008 and early 2009, countries around the world are now showing positive quarterly growth in gross domestic product (GDP), and some recovery in their trade patterns and global industrial production. The Global equity markets are also showing improvements and the risk premiums on borrowing have also fallen.
Despite these more encouraging developments in global economy on the whole, the recovery is uneven. While the developed nations still continue to struggle through the effects of the downturn, the developing nations look to be at a more comfortable position. However with the ever growing dependence among the economies of the world, the condition for sustained growth remain fragile.
Credit conditions are still tight in major developed economies, where many major financial institutions are still continuing the process of strengthening their balance sheets. The real demand in most of the domestic market remains tentative as much of the rebound currently seen in the real economy is due to the strong fiscal stimulus provided by Governments in a large number of developed and developing countries and to the restocking of inventories by industries worldwide.
Consumption and investment demand remain weak and
unemployment and underemployment rates continue to rise. In the outlook, the
global economic recovery is expected to remain sluggish and employment
prospects look unclear. Further adding to the concerns of the World economy is
the fiscal positions of several European high-income countries.
INDIAN SCENARIO
During the Financial Year 2009-10, the Indian economy has bounced back from the global economic slowdown and is on its way to a growth path of 9%. The economy displayed a broad based recovery in the second half of 2009-10 and despite poor monsoon and fragile global recovery, the Indian economy achieved a GDP growth of 7.4% during the financial year 2009-10, one of the highest in the world. The prudent and accommodative fiscal stance by the Indian government created an overall liquidity and interest rate conditions that were conducive for growth.
The inflationary conditions changed significantly during the Financial Year 2009-10, though it remained subdued in the first half of the year, the headline inflation shot up in the second half, driven by high food prices in the beginning and later turning more generalized over successive months. The Indian economy, despite the inflationary pressures, looks quite promising in the current fiscal. The outlook for GDP growth in 2010-11 has improved considerably, given the robust recovery seen in the overall economy during the last quarter of 2009-10. The prospects of continuation of the momentum are good and will be driven by buoyant performance of the industrial sector better monsoon compared to last year and sustained growth of services. From the demand side, investment demand had already witnessed a sharp acceleration by the fourth quarter of 2009-10 and trends in growth of production of capital goods in the first quarter of this financial year suggest continuation of momentum. Private Limited consumption demand, going by recent pattern in corporate sales, the production of consumer durables and auto sales 'suggest a gradual pick up which could accelerate to make the growth process more self sustaining. Although concerns about
a possible weakening of global recovery persists, domestic risks to growth have receded significantly. As a result, the GDP growth projections for 2010-11 have been revised upwards to 8,5% in July'10 from 8% projected in April'10.
STEEL INDUSTRY
A)
GLOBAL
OVERVIEW
After witnessing huge setbacks arising out of economic crisis of 2008, world steel industry turned the corner by mid-2009 and has been firmly set on a path to recovery since then. The recovery has mostly been an outcome of the massive multi governmental projects all around the world and to some extent the start of restocking.
World Apparent Steel use in 2009 was estimated at around 1121.1 million tonnes (rnt) a drop of 6.7% over 2008 levels. The Global crude steel production during the same year was at 1,226 mt, a decline by almost -8% year-on-years.
The economic crisis has also brought about a definite shift
in the landscape of the global steel industry. The steel industry is now
shifting focus to East. .The emerging economies witnessed a quicker and
stronger recovery than developed economies. In 2009, the Asian region alone
accounted for 67% of world steel use, 11% higher than in 2007. In particular,
The BRIC countries showed major discrepancies in the period
of crisis. While
In NAFTA, the economic recovery started in the third quarter
of 2009. The manufacturing sector has been improving steadily. ASU in the
The EU-27 was among the most severely affected regions during the economic recession. Recovery is expected to be slow and surrounded by uncertainties. The fall in real steel use and destocking led to an ASU decline amounting to -35% in 2009. In 2010, there will be a 14% "technical recovery" in ASU, mostly from inventory build-up.
The CIS, which was badly affected by the crisis, is
recovering, but more slowly than other emerging economies. Export-driven sectors of
In 2009, steel use in MENA (Middle East and
Similar to the trend in Apparent Steel Use, Crude Steel production also witnessed a similar trend. While developed economies suffered unprecedented decline (for example, the EU was down by -30% and the US by -36% year-on-year), India, China, Iran and some North African countries continued to record growth during the crisis.
Most notably, crude steel production in
The other most important recent happening in the Global Steel Industry was the shift in the pricing of Raw Material from Annual Benchmark to quarterly prices. From the first quarter of 2010, the price contracts negotiated between the raw material majors and steel mills are now on a quarterly basis. This has further added to complexities that the steel industry is currently facing as this has brought in more volatility or instability in the market prices especially in terms of prices.
B)
DOMESTIC
OVERVIEW
While the Global Steel Industry witnessed a drop in
production during 2009, the steel industry in
According to a recent statement made by the
Crude Steel Production in
Earlier the National Steel Policy 2005 had projected an
annual steel consumption growth of 7% based on GDP growth rate of 7-7.5% and
production of 110 mt of crude steel by 2019-2020. However, with the current
rate of ongoing
The likely growth in the India Steel industry is evident from the huge investments being planned by both the domestic players and by other international majors like Arcelor Mittal, POSCO, etc. While most of the existing domestic payers are on a huge expansion spree, International majors are looking for opportunities to enter the fast growing domestic market through direct investments and Joint ventures.
According to the Ministry of Steel, 222 memorandum of
understanding (MoUs) have been signed with various states for planned capacity
of around 276
With factors like high growth rates in economy of around 9%,
huge government spending on infrastructure, rich and huge iron ore reserves,
country set to become automotive hub, growing manufacturing sector etc.
OPERATIONS
Manufacturing:
Recovering from effects of the global economic meltdown,
Essar produced 3.39 MT (flat product) and achieved sales of 3.24 MT showing
improvement of 8% and 6% respectively. Sales were on lower side in Q II and Q
III on account of Raw Material shortage to sustain Hazira operations. The
Company has suspended slurry transportation through its slurry pipeline from
Kirandul to
The production levels picked up again to plan levels in the last quarter. Some steps taken were:
- 1st time in the history of Midrex modules'' that BF grade pellet was used.
- Stabilisation of pellet quality in the backdrop of a fluctuating input.
- Increase in usage of Hot DRI to 66.1% resulting in further saving power at Steel Melt Shop.
- Umbrella
agreement on Quality and capability improvement with Kobe Steel,
- Discussions
initiated for joint venture in the field of further value addition In CRCA
by adding Continuous Annealing in the product portfolio.
The Company has done well on the whole though the impact of variable raw material input played Its role. Some indicators are as below:
- NG and Power consumption @ HBI was higher in QII and Q III mainly on account of lower production on account of Raw material shortage and poor quality of oxides from sources like KIOCL However from Q ill NG consumption improved as production level had increased.
- HBI finished with NG consumption of 297 smVt in Financial Year 2009-10 against 292 sm3/t achieved in Financial Year 2008-09. Power consumption during Financial Year 2009-10 was 112 kwh/t as against 111 kwh/t In Financial Year 2008-09.
- SMP finished with liquid steel yield of 83.84% as against 84.97% achieved in Financial Year 2008-09, The main reasons for lower yield In Q IV were use of non beneffclated pellets and use of oxide with much tower Fe% (from KIOCL etc.). The situation Is getting corrected as They go forward due to alternative planning and use of beneflclated pellets.
- SMP achieved power consumption of 608 kwh/t of liquid steel as against 589 kwh/t achieved In Financial Year of Establishment 2008-09, the main reasons being poor oxide quality etc. The situation Is getting corrected as They go forward due to alternative planning and use of beneficlated pellets, • HSM ended with YTD yield of 97.84% as against 97.83% previous year. Highest yield achieved was 98,21% in Jan'10.
- Performance of the Cold Rolling Mill Complex was as per plan and utilization of lines was at planned levels.
Sales and Marketing:
- The financial year 2009-10 was witness to the global economic crisis and was a critical year for the steel industry. Only companies with sound fundamentals managed to survive in difficult market conditions and Essar Steel is one of them.
- Essar Steel is in the process of expanding its liquid steel production capacity at its Hazira facilities to approximately 10.0 MTPA and has diversified the finished steel product portfolio to include plates and pipes.
- The
state-of-the-art Plate Mill with an installed capacity of 1.5 MTPA is
under trial run and is capable of producing High Strength Extra Wide
plates, including quenched and tempered and furnace normalized categories.
It is amongst
- As a part of forward integration of their steel plant, they have commissioned a 600,000 TPA Pipe Mill including one L-SAW mill with a capacity 325,000 TPA and two H-SAW mills with total capacity 275,000 TPA pipe making facility. Their pipes will cater mainly to the oil and gas transportation, line pipe and structural fabrication segments. In addition to this they also have 3LPE/3LPP/FBE (Capacity 2 Mn square meter per annum) and internal liquid epoxy coating (Capacity 1 Mn square meter per annum) facilities. They have already received API 5L and API 2B certification.
- The upcoming CSP will enable us to produce hotrolled coils up to 0.85mm thickness, which will find wide applications in the automotive market. This will enable us to cater to a wider range of customer segments and product applications.
- The year 2009-10 was an eventful one and some performance parameters need to be discussed in the right perspective. Overall sale of flat rolled products was up 6% Year on Year to 3.24 million tonnes, largely because of improved performance in the domestic markets.
- Domestic sales at 2.93 million tonnes rose 19% Year on Year. This was in line with the 21% improvement in combined domestic sales volume of the top 5 producers. Export volumes, at 0.31 million tonnes, dropped 48% on account of the depressed steel demand globally.
- Revenues were down marginally 8.26% to Rs.108930.100 millions and net sales realization per tonne was lower by 16.34% Year on Year on account of cheap imports flooding the country. This trend was evident across the entire domestic steel industry.
- As, much as 71% of sales were made in the value-added segments - up from 52% in Financial Year 2008-09. This was largely due to increased emphasis on value-added products, like Electrical, Auto Hi-strength grade, PEB, API, etc. Essar Steel gained in market share (domestic) - from 13.6% in Financial Year 2008-09 to 14.8 % in Financial Year 2009-10.
- Essar
Steel was the first Indian producer to decommoditize steel and increase
its availability across the remotest corners of the country. Essar
Hypermart is the first and largest steel retail network in
- Essar Hypermart sales in Financial Year 2009-10 grossed 1.11 million tonnes, thus registering a stupendous 82.73% growth in volumes. Revenues grew by an impressive 37.23% to approximately Rs. 34870.000 millions. Increase in revenues was achieved mainly because of higher sales volume.
- In the year Financial Year 2009-10 Essar Hypermart extended its footprint across the length and breadth of the country by adding 26 more outlets from 61 to 87, while their market penetration and reach was further strengthened by the expansion of the Expressmart network from 27 to 387.
- With the acquisition of SPSL (Shree Precoated Steel Limited.), now rechristened. ESPF (Essar Steel Pune Facility), Essar Steel has added Pre-painted galvanized coils and sheets in its product portfolio and has emerged as one of the largest producer by capacity of coated products in the country Essar Steel is the only Indian steel company to they have the entire range of flat products from Plates to Prepainted Galvanized coils and sheets.
- They are aiming to widen their geographical reach and further strengthen their distribution network in Financial Year 2010-11 with the addition of more Hypermarts and Expressmarts.
- The
four existing Service Centers at Hazira, Pune, Bahadurgarh and Chennai are
fully established and have successfully developed good customer base to
cater to various just-in-time customized requirements. Their current
Service Centre installed capacity is 2.6 MTPA and they are expanding the
network to include three new upcoming Service Centers at Bhuj,
- The year ahead will be a challenging one and Essar Steel is well positioned to play a defining role in the domestic as well as overseas steel markets and will aim to further establish its presence in new product segments and emerging markets and increase stakeholder value.
FINANCE:
As part of the Essar Group's expansion and product diversification strategy, additional capacities were planned for
manufacture of pellets, slabs, Hot Rolled Coils, plates and pipes in the Project Companies viz. Essar Steel Orissa Limited., Essar Steel (Hazira) Limited,, Hazira Plate Limited and Hazira Pipe Mill Limited. During the current financial year, the amalgamation of the Essar Steel Business in India was commenced and necessary approvals from the Shareholders and Creditors of the companies were received for amalgamation of these companies with Essar Steel Limited the amalgamation enables greater economies of scale and operational synergies for the Company due to the strong upstream and downstream operational linkages of the project companies with Essar Steel Limited. The Honourable High Court of Bombay Judicature in March 2010 and the Honourable High Court of Gujarat in June 2010 have passed the orders for amalgamation of the companies indicating successful completion of the amalgamation exercise.
This amalgamation has also facilitated a debt gonsolidation of Rs.173280.000 millions under a single ejoan agreement for the Company's rupee term loans to simplify and improve administration of debt by the Company and the lenders. The funds under debt consolidation will be utilized for take over of existing facilities of the companies and the project companies and for meeting expenditure requirements for ongoing projects. SBI Capital Markets Limited was mandated as the Financial Advisors for the debt consolidation programme. The Company has tied up the amount of Rs.173280.000 millions under the debt consolidation programme and executed the common loan agreement with eight lenders in August 2010.
In addition to the existing working capital limits sanctioned to Essar Steel Limited of Rs.31500.000 millions, the Company also tied up working capital limits of Rs.11200.000 millions and Rs.5500.000 millions for meeting the requirements of the erstwhile Essar Steel (Hazira) Limited and Hazira Pipe Mill Limited respectively during the financial year. The Company also issued Commercial Paper aggregating to Rs.5000.000 millions, thereby reducing finance cost during the financial year.
In October 2009 the Company completed the purchase of the
assets of Shree Precoated Steel at Sanaswadi, Pune,
Led by high growth rates in the Indian economy during Financial Year 2009-10, The Company's domestic sales realizations increased considerably due to higher steel prices in the domestic market, higher offtake from the Hypermarts and Service Centres and continuing focus on quality improvement of products and increased value addition. Therefore The Company's realizations through domestic sales have considerably substituted export sales. This trend coupled with greater certainty in cost structure following The Company's success in securing gas allocation at pre-defined rates from a number of sources, the integrated nature of operations; its established position in the value-added segments of the steel industry and the purchase of CR, Galvanised and Colour Coating facilities from Shree Precoated Steel Limited are likely to strengthen the Company's operating profile further.
During the year, the Company was successful in progressing with its capital expenditure programme, meeting all its payment obligations and retaining adequate liquidity within the Company to meet its operational requirements.
AMALGAMATION
During the year, Essar Steel (Hazira) Limited, Hazira Plate Limited, Hazira Pipe-Mill Limited and Essar Steel Orissa Limited have been amalgamated with The Company pursuant to the order passed by the Hon'ble High Courts at Mumbai and Ahmedabad sanctioning the Scheme of Amalgamation. The merger will provide a much wider product portfolio to customers ranging from pellets to Slabs, HRC, CRC, Galvanised and Annealed Products, Pipes and Plates and also leading to greater economies of scale and operational synergies. All the formalities with respect to Amalgamation have been complied with.
'Amalgamation of Essar Steel (Hazira) Limited, Hazira Plate Limited, Hazira Pipe Mill Limited and Essar Steel Orissa Limited with the Company a) Essar Steei (Hazira) Limited (ESHL), Hazira Plate Limited (HPL), Hazira Pipe Mill Limited (HPML) and Essar Steel Orissa Limited (ESOL) (the "Transferor Companies") amalgamated with the Company, in terms of a Scheme of Amalgamation {'the Scheme') as approved by the members at a court convened meeting held on 2nd January, 2010 and subsequently sanctioned by the Honorable High Court of Judicature at Maharashtra and Gujarat vide its order dated 26th March, 2010 and 30th June, 2010 respectively. The Scheme became effective on 5th August, 2010 and the appointed date of the scheme is 1st April. 2009.
ESHL is in the process of setting up 5 MTPA capacity steel
plants at Hazira,
HOLDING COMPANY
Essar Steel Holdings Limited (which in turn is a subsidiary
of Essar Global Limited,
CONTINGENT
LIABILITIES
|
Contingent
Liabilities not provided for |
Rs. In Millions 31.03.2010 |
|
(i) (a) Bills discounted |
202.500 |
|
(b) Claims against the Company not acknowledged as debt in respect of: Disputed sales tax matters in respect of which the Company has gone in appeal [including amount already paid Rs.1473.400 millions (Previous year Rs.1473.400 millions)] |
|
|
Disputed Excise duty matters in respect of which the Company has gone in appeal |
3306.600 |
|
Disputed Custom duty matters in respect of which the Company has gone in appeal |
10.000 |
|
- Tax of sale of electricity demanded by sales tax authorities on Essar Power limited |
1654.900 |
|
- Electricity duty demanded by the Collector of Electricity Duty, Gandhinagar" |
459.100 |
|
- Wheeling Charges demanded by Gujarat Electricity Board [including amount already paid Rs,272.300 millions (Previous year Rs.272.300 millions)] |
5868.500 |
|
Future cash outflows in respect of above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities. " A Show Cause Notice (SON) dated 10th March 2010 has been issued by the Collector of Electricity Duty, Gandhinagar, demanding Electricity Duty Rs,5853.100 millions and Interest Rs. 5284.800 millions for the period April 2000 to February 2010. The company has claimed that it is exempt from paying the Electricity Duty for a period of 15 years from the date of commission of the captive power project i.e. from 8th August 1995 to 7th August 2010. The company has filed an appeal to the Division Bench of Gujarat High Court against the order which ha$ been admitted by the court and granted stay order dated 5th April 2010. The conditions of stay were: (i) Company to deposit Rs.500.000 millions. by 30,04,2010. (ii) Company to further pay Rs.150.000 millions every month commencing from 15th May, 2010 towards the arrears of the principal amount of electricity duty, As per the management view and based on the legal opinion from a reputed counsel, the Company is eligible for exemption of Electricity Duty for tho period of 15 years i.e. from 8th August 1995 to 7th August 2010 and accordingly no provision is required to be made in the books as at 31st March, 2010 with respect to the afore said demand. However the Company has disclosed Ra.5868.500 millions (Previous Year Rs. 5096.300 millions) on account of above matter as contingent liability as at 31st March 2010. |
|
|
(c) Guarantees given to various banks, financial institutions, finance companies, etc. on behalf of others [Balance outstanding as on 31.03.2010 is Rs. 7673.500 millions (Previous Year Rs. 8449.400 millions) The Company and Essar Power Limited (EPOL) have provided corporate guarantee of Rs.1,2120.000 millions (Previous Year Rs.1,5370.000 millions), on behalf of Loop Telecom Private Limited (LOOP), favouring State Bank of India (SBI) against (a) Term loan of Rs.4000.000 millions (Previous Year Rs.7250.00 millions) and (b) Bank guarantee of Rs.8120.000 millions (Previous Year Rs.8120.00 millions), availed by LOOP. Of the said guarantee, LOOP has utilised guarantee of
Rs.4000.000 C millions (Previous Year Rs.7250.000 millions) against the term
loan availed from State Bank of Further, the Company has also received counter guarantee for the same from Loop Mobile Holdings India Limited (formerly known as BPL Communications Limited) for Rs.1,2120.000 millions (Previous Year Rs.1,5370.000 millions). |
8693.700 |
|
(ii) Arrears of fixed dividend on Cumulative Redeemable Preference Shares |
44.500 |
FORM 8
|
Corporate
identity number of the company |
U27100GJ1976FLC013787 |
|
Name of the
company |
ESSAR
STEEL LIMITED |
|
Address of the registered
office or of the principal place of
business in |
27KM, |
|
This form is for |
Creation of charge |
|
Type of charge |
Book debts Movable property (not being pledge) |
|
Particular of
charge holder |
SBICAP Trustee Company Limited, 202, Maker Tower, E, Cuffe Parade,
Colaba, Mumbai-400005, Maharashtra, India |
|
Nature of
instrument creating charge |
Deed
of Hypothecation dated March 21, 2011 |
|
Date of instrument
Creating the charge |
21.03.2011 |
|
Amount secured by
the charge |
Rs. 18780.000 millions |
|
Brief of the
principal terms an conditions and extent and operation of the charge |
Rate of interest a.
ICICI: (Rs. 18000.000 millions): I-Base + 4.25% p.a. effectively 13% p.a.
presently b. J
and K Bank: (Rs. 780.000 millions): SBI Base rate + 3.75% p.a. effectively
12% p.a. presently Terms of
repayment The
repayments shall be made in equal quarterly installments commencing March
2011. Extent and operation
of the charge Charge
on the movable properties of the Company including its movable assets,
including movable plant and machinery |
|
Short particulars
of the property charged (Including location of the property) |
Movable
properties of the Company including its movable assets, including movable
plant and machinery moreover |
FIXED ASSETS
- Buildings
- Plant and Machinery
- Furniture and Fixtures
- Office Equipment
- Computers
- Vehicles
- Ships and vessels
- Railway Sidings and
- Wagons
- Aircraft
- intangible Assets
- Software
PRESS RELEASE
Movable properties
of the Company including its movable assets, including movable plant and
machinery moreover
Mumbai: The Essar Steel Processing & Distribution Facility
(ESPD) at Bahdurgarh (NCR) and Pune recently added a world class slitting line
for thicker HR steel coils. These slitters have the capacity to process 100,000
tonnes of HR Coil per annum. Targeted at meeting the needs of the fast-growing
auto and construction sector in the region, the HR Slitter facility will be
complimented by Narrow Cut-to-length lines, which will provide high speed, high
quality blanking of HR coils in the customers’ desired sizes.
With the commissioning of these facilities, Essar Steel will enhance its steel
processing capacity at each of these centres to 400,000 tonnes per annum.
The newly installed HR Slitter will process coils up to 12 mm thick and
2,000-mm wide into strips of desired widths down to 50 mm, which clearly is a
benchmark in the country.
The processing range of this Slitter is unmatched as HR Steel with Tensile
strength of 750 MPa and thickness of 12 mm can be processed at a speed of 40
meters per minute, while 1.2 mm thick coils can be processed at as high speed
as 120 meters per minute.
Speaking on the expansion plans of the Essar Steel Processing and Distribution
Facility, Mr. Vikram Amin, Executive Director (Sales and Marketing) Essar Steel
said: “The capacity expansion is in line with the emerging customer
requirement. The auto segment is a very important market for us and this new
line at our facility will give us a strong competitive advantage over others in
the rapidly expanding auto segment of these regions.”
About Essar Steel
Essar Steel, global producer of steel, is a
fully integrated flat carbon steel manufacturer - with presence in
Essar Steel has a global steel production capacity of 14 million tonnes per
annum (MTPA). It operates seven Service Centres in
About Essar Group
The
Essar Group is a multinational conglomerate and a leading player in the sectors
of Steel, Oil and Gas, Power, Communications,
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
|
Indian Rupees |
|
US Dollar |
1 |
Rs.45.37 |
|
|
1 |
Rs.73.53 |
|
Euro |
1 |
Rs.64.37 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
45 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.