MIRA
INFORM REPORT
|
Report Date : |
25.08.2011 |
IDENTIFICATION DETAILS
|
Name : |
KAMAKSHI STEELS PRIVATE LIMITED |
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Registered
Office : |
Flat No.GF-4, Anjana Apartments, Water Tank Road, Labbipet, VijaywADA –
520010, Andhra Pradesh |
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Country : |
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Financials (as
on) : |
31.07.2010 (Provisional) |
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Date of
Incorporation : |
16.12.2003 |
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Com. Reg. No.: |
01-042243 |
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Capital
Investment / Paid-up Capital : |
Rs.13.500
Millions |
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CIN No.: [Company Identification
No.] |
U27109AP2003PTC042243 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
HYDK02130C |
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PAN No.: [Permanent Account No.] |
AACCK3355P |
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Legal Form : |
Private Limited Liability Company. |
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Line of Business
: |
Trading and Manufacturing of Steel Products. |
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No. of Employees
: |
275 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Satisfactory |
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Payment Behaviour : |
Unknown |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. The
management failed to provide require documents. However, trade relations are
reported as fair. Business is active. Payment terms are unknown. It would be take advisable securities while dealing with the subject. |
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) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INFORMATION PARTED BY
|
Name : |
Mr. Ramesh |
|
Designation : |
Finance Manager |
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Contact No.: |
91-9821342365 |
|
Date : |
20.08.2011 |
LOCATIONS
|
Registered Office : |
Flat No.GF-4, Anjana Apartments, Water Tank Road, Labbipet, Vijaywada
– 520010, Andhra Pradesh, India |
|
Tel. No.: |
91-866-6534933 |
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Mobile No.: |
91-9821342365 (Mr. Ramesh) |
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Fax No.: |
91-866-2417333 |
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E-Mail : |
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Website : |
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Location : |
Owned |
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Admin. Office : |
40-16-2, Sripurnasai Apartment, Siddhata Ladies Collage Road,
Labbipet, Vijaywada – 520010, Andhra Pradesh, India |
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Corporate Office: |
Flat No.9, 2nd Floor, Street No.1, Sagar Society, Banjara
Hills, Road No.2m Hyderabad – 500034, Andhra Pradesh, India |
|
Telefax No.: |
91-40-40208899 |
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Factory 1: |
I.D.A. Kondapalli, Vijayawada, Andhra Pradesh, India |
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Tel No.: |
91-866-2872999/ 2872228 |
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Fax No.: |
91-866-2872228 |
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Email : |
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Factory 2: |
Village – Khewata, District – Khurda, Orissa |
DIRECTORS
(AS ON 27.08.2010)
|
Name : |
Mr. Telapolu Ramprasad |
|
Designation : |
Director |
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Address : |
No.#76, LIC colony, 3rd Lane, Opposite Govt. ITI College,
Vijayawada – 500008, Andhra Pradesh, India |
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Date of Birth/Age : |
20.07.1970 |
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DIN No.: |
02074678 |
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Pan No.: |
ACFPJ3088C |
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Name : |
Mr. Patchala Sita Ramaiah |
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Designation : |
Director |
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Address : |
40-24-17/1, Garikapati Vari Street, Vijayawada – 520010, Andhra
Pradesh, India |
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Date of Birth/Age : |
25.07.1967 |
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DIN No.: |
02242720 |
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Name : |
Mr. K. Satyanarayana |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Ramesh |
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Designation : |
Finance Manager |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 31.03.2010)
|
Names of Shareholders |
|
No. of Shares |
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|
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|
T. Ramprasad |
|
230000 |
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V Srinivasa Rao |
|
235000 |
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T. Vydehi |
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255000 |
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V Lakshmi Prasanna |
|
235000 |
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K. Srinivasa Rao |
|
175000 |
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P. Sitaramaiah |
|
220000 |
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Total |
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1350000 |
BUSINESS DETAILS
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Line of Business : |
Trading and Manufacturing of Steel Products. |
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Terms : |
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Selling : |
Cash and Credit |
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Purchasing : |
Cash and Credit |
GENERAL INFORMATION
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Suppliers : |
· Aggarwal Rolls Industries · Arun Teja Castings (Private) Limited · Arja Enterprises · Stefen Systems Inc. · B R Enterprises · Padma Ceramics and Refractories · Pennar Chemicals · PSR Castings (Private) Limited · Arifa Enterprises · AS Steel Traders (VSP) Private Limited · Baba Akhila Sai Jyothi Industries · Bhagawathi Commerce · Boiler Equipment and Company · Priyanka Steels and Minerals · Sponge Iron India Limited · Sri Rama Enterprises · Star Enterprises · Usha Steel Profiles · S R Enterprises · Sri Lakshmi Ganesh Minerals · REC Ispat (Private) Limited · Suytash Solutions (Private) Limited · Deccan Cements (Private) Limited · Carmul Ceramics (Private) Limited · Durga Enterprises · Equipments and Spares · Rajdeep Associates · Rajdoot Enterprises · VJR Steels Limited |
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Customers : |
Wholesalers and Retailers · Tata Steel Syndicate · Sri Sai Tirumala Cold Storage (Private) Limited · Om Sri Sai Corporation · Krishna Sai Construction · Potla Sahiti Educational Society · Maheshwari Steel Corporation · Jana Chaitanya Housing Limited · Mary Castings (Private) Limited · Challa Danaiah and Company · Eswar College of Engineering · Kamakshi Cements (Private) Limited · Naga Siva Sai Steels · Phatan Sharief Enterprises · Prashanthi Steels · Ramky Infrastructure Limited · Sai Sudha Steels |
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No. of Employees : |
275 (Approximately) |
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Bankers : |
· Corporation Bank, Nariman Point, Mumbai, Maharashtra, India · The Karur Vysya Bank Limited 11-13-24, Sammetavari Street, Vijayawada – 520001, Andhra Pradesh, India · State Bank of India Patamata Branch, Vijayawada – 520007, Andhra Pradesh, India |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Hanumaiah and Company Chartered Accountant |
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Address : |
# 1 and 2, Ground, Ram’s VSR Apartments, Mogalrajapuram, Vijayawada –
520010, Andhra Pradesh, India |
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Associates/Subsidiaries : |
· Ramya Steel Syndicate Plot No.21 A and 21 B, Iron Complex, Bhavanipuram, Vijayawada – 520012, Andhra Pradesh, India Line of Business: Wholesalers Iron and Steel Business. PAN No.: AACFR7326L · Ganesh Trading Company |
CAPITAL STRUCTURE
(AS ON 31.07.2010
– PROVISIONAL)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1500000 |
Equity Share |
Rs.10/- each |
Rs.15.000 Millions |
|
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1350000 |
Equity Share |
Rs.10/- each |
Rs.13.500
Millions |
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|
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FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.07.2010 (Provisional) |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
|
1] Share Capital |
13.500 |
13.500 |
13.500 |
13.500 |
|
|
2] Share Application Money |
67.400 |
37.100 |
0.000 |
0.000 |
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|
3] Reserves & Surplus |
24.301 |
19.533 |
8.958 |
3.024 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
105.201 |
70.133 |
22.458 |
16.524 |
|
|
LOAN FUNDS |
|
|
|
|
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|
1] Secured Loans |
67.089 |
67.894 |
55.923 |
51.404 |
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2] Unsecured Loans |
28.385 |
33.422 |
34.335 |
35.147 |
|
|
TOTAL BORROWING |
95.474 |
101.316 |
90.258 |
86.551 |
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DEFERRED TAX LIABILITIES |
2.952 |
2.951 |
2.084 |
1.079 |
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|
|
|
|
|
|
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TOTAL |
203.627 |
174.400 |
114.800 |
104.154 |
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APPLICATION OF FUNDS |
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|
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|
|
|
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|
FIXED ASSETS [Net Block] |
48.020 |
44.867 |
35.030 |
20.856 |
|
|
Capital work-in-progress |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
INVESTMENT |
0.029 |
0.029 |
0.029 |
0.029 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
|
Inventories |
22.718
|
32.764
|
29.195 |
46.288 |
|
|
Sundry Debtors |
38.794
|
41.876
|
21.996 |
25.906 |
|
|
Cash & Bank Balances |
0.487
|
1.109
|
1.599 |
1.558 |
|
|
Other Current Assets |
108.092
|
103.653
|
78.255 |
32.729 |
|
|
Loans & Advances |
0.000
|
0.000
|
0.000 |
0.000 |
|
Total
Current Assets |
170.091
|
179.402 |
131.045 |
106.481 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
|
Sundry Creditor |
|
|
|
6.537 |
|
|
Other Current Liabilities |
7.055
|
14.205
|
13.529 |
16.678 |
|
|
Provisions |
|
|
|
|
|
Total
Current Liabilities |
14.513
|
49.898 |
51.304 |
23.215 |
|
|
Net Current Assets |
155.578
|
129.504 |
79.741 |
83.266 |
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
0.003 |
|
|
|
|
|
|
|
|
|
TOTAL |
203.627 |
174.400 |
114.800 |
104.154 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.07.2010 (Provisional) |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
|
Gross Sales |
141.918 |
418.995 |
328.225 |
245.346 |
|
|
|
Vat Output Tax Collection |
5.677 |
16.752 |
13.108 |
9.814 |
|
|
|
Other Income |
0.084 |
0.251 |
0.167 |
0.067 |
|
|
|
Closing Stock |
22.718 |
32.764 |
29.195 |
46.288 |
|
|
|
TOTAL (A) |
170.397 |
468.762 |
370.695 |
301.515 |
|
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
|
Opening Stock |
32.764 |
29.195 |
46.288 |
25.595 |
|
|
|
Raw Materials |
62.548 |
224.408 |
128.647 |
142.430 |
|
|
|
Oils and Stores Consumable |
8.404 |
32.998 |
43.648 |
26.822 |
|
|
|
Labour Charges |
0.862 |
1.987 |
2.068 |
0.464 |
|
|
|
Power Consumption |
35.967 |
95.332 |
74.830 |
47.808 |
|
|
|
Other Manufacturing Expenses |
1.545 |
4.752 |
6.835 |
4.487 |
|
|
|
Taxes Paid |
18.579 |
49.695 |
49.853 |
45.002 |
|
|
|
Administrative Expenses |
1.888 |
3.522 |
2.581 |
1.303 |
|
|
|
TOTAL (B) |
162.557 |
441.889 |
354.750 |
293.911 |
|
|
|
|
|
|
|
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|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)
(C) |
7.840 |
26.873 |
15.945 |
7.604 |
|
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
3.072 |
9.427 |
5.974 |
4.718 |
|
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
4.768 |
17.446 |
9.971 |
2.886 |
|
|
|
|
|
|
|
|
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|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
0.000 |
1.782 |
1.323 |
0.554 |
|
|
|
|
|
|
|
|
|
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|
PROFIT BEFORE
TAX (E-F) (G) |
4.768 |
15.664 |
8.648 |
2.332 |
|
|
|
|
|
|
|
|
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|
Less |
TAX (H) |
0.000 |
5.090 |
2.713 |
1.863 |
|
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
4.768 |
10.574 |
5.935 |
0.469 |
|
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
19.533 |
8.959 |
3.024 |
2.555 |
|
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED TO
THE B/S |
24.301 |
19.533 |
8.959 |
3.024 |
|
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
-- |
2.09 |
4.40 |
0.35 |
|
KEY RATIOS
|
PARTICULARS |
|
31.07.2010 (Provisional) |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
2.80
|
2.26 |
1.60 |
0.16 |
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
3.36
|
3.74 |
2.63 |
0.76 |
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
2.19
|
6.98 |
5.21 |
1.83 |
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.05
|
0.22 |
0.39 |
0.14 |
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.05
|
2.16 |
6.30 |
6.64 |
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
11.72
|
3.60 |
2.55 |
4.59 |
LOCAL AGENCY FURTHER INFORMATION
COST OF
PROJECT
|
Particulars |
Amount (Rs. In millions) |
|
|
|
|
Land |
35.400 |
|
Site Development Expenses |
50.000 |
|
Building |
35.400 |
|
Plant and Machinery (A+B) |
1306.200 |
|
Miscellaneous Fixed Assets |
25.800 |
|
Interests During Construction Period |
216.600 |
|
Preliminery and Preoperative Expenses |
24.000 |
|
Margin Money for W.C. |
31.600 |
|
|
|
|
Total |
1725.000 |
MEANS OF
FINANCE
|
Particulars |
Amount (Rs. In millions) |
|
|
|
|
Equity Share Capital (Including Internal accruals , Share Premium) |
400.000 |
|
Unsecured |
225.000 |
|
|
1100.000 |
|
|
|
|
Total |
1725.000 |
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WORKING
CAPITAL REQUIREMENT
(RS.
IN MILLIONS)
|
Particulars |
Period |
Margin |
For the 1st year |
||
|
Total E.C. Req. |
Own Margin |
Bank |
|||
|
|
|
|
|
|
|
|
Raw Material |
11 Days |
25% |
36.900 |
9.200 |
27.600 |
|
|
|
|
|
|
|
|
Consumable |
1 Month |
25% |
1.400 |
0.300 |
1.000 |
|
|
|
|
|
|
|
|
Work in Process |
3 Day |
25% |
11.000 |
2.800 |
8.300 |
|
|
|
|
|
|
|
|
Finished Goods |
7 Days |
25% |
26.600 |
6.700 |
20.000 |
|
|
|
|
|
|
|
|
Debtors/ Receivables |
15 Days |
25% |
89.400 |
22.300 |
67.000 |
|
|
|
|
|
|
|
|
Cash for Expenses |
1 Month |
100% |
15.000 |
15.000 |
0.000 |
|
|
|
|
|
|
|
|
Total |
|
|
180.300 |
56.300 |
123.900 |
|
|
|
|
|
|
|
|
Less: Creditors for
Raw Materials |
4 Days |
255 |
14.800 |
3.700 |
11.100 |
|
|
|
|
|
|
|
|
Net Working Capital |
|
|
165.500 |
52.600 |
112.900 |
|
|
|
1st
Year |
99.300 |
31.600 |
67.700 |
|
|
|
2nd
Year |
115.900 |
36.800 |
79.000 |
|
|
|
3rd
Year |
132.400 |
42.100 |
90.300 |
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PROFITABILITY
STATEMENT
|
Particulars |
Amount (Rs. In millions) |
|
COST OF
PRODUCTION |
|
|
|
|
|
Raw Materials |
1106.900 |
|
Utility |
5.000 |
|
Repairs and Maintenance |
43.200 |
|
Consumables, Stores etc. |
18.00 |
|
Salary and Wages |
37.800 |
|
Administrative Expenses |
44.200 |
|
Depreciation |
187.000 |
|
Interests |
145.500 |
|
|
|
|
TOTAL COST OF PRODUCTION
|
1587.600 |
|
|
|
|
Sales Realization Net |
1965.900 |
|
|
|
|
PROFIT BEFORE
TAX |
378.300 |
------------------------------------------------------------------------------------------------------------------------------
PRODUCTION
AND PROFITABILITY STATEMENT
(RS.
IN MILLIONS)
|
Particulars
|
I |
II |
III |
IV |
V |
|
|
|
|
|
|
|
|
Installed
Capacity |
45000 M. T. Per Annum |
||||
|
|
|
|
|
|
|
|
Capacity
Utilisation |
60% |
70% |
80% |
80% |
80% |
|
|
|
|
|
|
|
|
Raw Materials and Consumable |
675.000 |
787.500 |
900.000 |
900.000 |
900.000 |
|
Salary and Wages |
37.800 |
39.700 |
41.700 |
43.800 |
46.000 |
|
Utilities |
5.000 |
5.800 |
6.700 |
6.700 |
6.700 |
|
Adm. and Selling Expenses |
44.200 |
46.400 |
48.700 |
51.200 |
53.700 |
|
Repairs and maintenance |
43.100 |
45.200 |
47.500 |
49.900 |
52.400 |
|
Depreciation |
187.000 |
187.000 |
187.000 |
187.000 |
187.000 |
|
Interests on Term Loan |
117.700 |
91.400 |
65.000 |
38.700 |
12.300 |
|
Interests on bank Borrowing |
8.100 |
9.500 |
10.800 |
10.800 |
10.800 |
|
Cost of Production |
1118.000 |
1212.600 |
1307.500 |
1288.000 |
1268.900 |
|
Sales Realization |
1179.600 |
1376.200 |
1572.800 |
1572.800 |
1572.800 |
|
|
|
|
|
|
|
|
Profit Before Tax |
61.600 |
163.600 |
265.300 |
284.800 |
303.900 |
|
Income Tax |
0.000 |
0.000 |
0.000 |
68.300 |
110.900 |
|
Profit After Tax |
61.600 |
163.600 |
265.300 |
216.400 |
193.000 |
|
|
|
|
|
|
|
|
Add: Depreciation |
187.000 |
187.000 |
187.000 |
187.000 |
187.000 |
|
|
|
|
|
|
|
|
Cash Accruals |
248.600 |
350.600 |
452.300 |
403.500 |
380.000 |
|
|
|
|
|
|
|
|
DSCR |
1.54 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Cash
Accrual + Int. In T. L. |
1.09 |
1.42 |
1.82 |
1.71 |
1.68 |
|
Term Loan Installments + Int. on T. L. |
|
|
|
|
|
------------------------------------------------------------------------------------------------------------------------------
CASH FLOW
STATEMENT
(RS.
IN MILLIONS)
|
Particulars
|
Construction Period |
I |
II |
III |
IV |
V |
|
|
|
|
|
|
|
|
|
SOURCES
OF FUND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in Capital |
400.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Profit Before Tax |
0.000 |
61.600 |
163.600 |
265.300 |
284.800 |
303.900 |
|
|
|
|
|
|
|
|
|
Depreciation |
0.000 |
187.000 |
187.000 |
187.000 |
187.000 |
187.000 |
|
|
|
|
|
|
|
|
|
Increase in Unsecured Loans |
225.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Increase in Term Loans |
1100.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Increase in Bank Borrowings |
0.000 |
67.700 |
11.300 |
11.300 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Total
|
1725.000 |
316.300 |
361.900 |
463.600 |
471.800 |
490.900 |
|
|
|
|
|
|
|
|
|
APPLICATION
OF FUND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in Fixed Assets |
1669.400 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Increase in Current Assets |
0.000 |
99.300 |
16.600 |
16.600 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Preliminary and Pre-Oper. Expenses |
24.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Repayment of Term Loan |
0.000 |
219.600 |
219.600 |
219.600 |
219.600 |
221.600 |
|
|
|
|
|
|
|
|
|
Taxation |
0.000 |
0.000 |
0.000 |
0.000 |
68.300 |
110.900 |
|
|
|
|
|
|
|
|
|
Total
|
1693.400 |
318.900 |
236.200 |
236.200 |
287.900 |
332.500 |
|
|
|
|
|
|
|
|
|
Opening Balance of Cash |
0.000 |
31.600 |
29.100 |
154.800 |
382.300 |
566.100 |
|
|
|
|
|
|
|
|
|
Surplus / Deficit |
31.600 |
(2.600) |
125.800 |
227.500 |
183.900 |
158.400 |
|
|
|
|
|
|
|
|
|
Closing Balance of Cash |
31.600 |
29.100 |
154.800 |
382.300 |
566.100 |
724.500 |
------------------------------------------------------------------------------------------------------------------------------
BALANCE
SHEET
(RS.
IN MILLIONS)
|
Particulars
|
0 |
I |
II |
III |
IV |
V |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Fund (Including Share
Premium) |
400.000 |
400.000 |
400.000 |
400.000 |
400.000 |
400.000 |
|
|
|
|
|
|
|
|
|
Reserve and Surplus |
0.000 |
61.600 |
225.200 |
490.500 |
706.900 |
899.900 |
|
|
|
|
|
|
|
|
|
Term Loans |
1100.000 |
880.400 |
660.800 |
441.200 |
221.600 |
0.000 |
|
|
|
|
|
|
|
|
|
Working Capital Limit |
0.000 |
67.700 |
79.000 |
90.300 |
90.300 |
90.300 |
|
|
|
|
|
|
|
|
|
Unsecured Loan (I.F.) |
225.000 |
225.000 |
225.000 |
225.000 |
225.000 |
225.000 |
|
|
|
|
|
|
|
|
|
Total |
1725.000 |
1634.700 |
1590.000 |
1647.000 |
1643.800 |
1615.200 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
Assets |
|
|
|
|
|
|
|
Gross Block |
1669.400 |
1693.400 |
1506.400 |
1319.300 |
1132.300 |
945.300 |
|
Less: Depreciation |
0.000 |
187.000 |
187.000 |
187.000 |
187.000 |
187.000 |
|
Net Block |
1669.400 |
1506.400 |
1319.300 |
1132.300 |
945.300 |
758.300 |
|
|
|
|
|
|
|
|
|
Pre-Opt Expenses |
24.000 |
0.000 |
0.000 |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Current Assets |
0.000 |
99.300 |
115.900 |
132.400 |
132.400 |
132.400 |
|
|
|
|
|
|
|
|
|
Cash and Bank Balance |
31.600 |
29.100 |
154.800 |
382.300 |
566.100 |
724.500 |
|
|
|
|
|
|
|
|
|
Total |
1725.000 |
1634.700 |
1590.000 |
1647.000 |
1643.800 |
1615.200 |
------------------------------------------------------------------------------------------------------------------------------
RAMYA STEEL
SYNDICATE
BALANCE SHEET
(RS.
IN MILLIONS)
|
SOURCES OF FUNDS |
|
31.03.2008 |
31.03.2007 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
|
9.522 |
4.741 |
|
|
2] Share Application Money |
|
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
|
0.000 |
0.000 |
|
|
4] (Accumulated Losses) |
|
0.000 |
0.000 |
|
|
NETWORTH |
|
9.522 |
4.741 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
|
46.580 |
22.683 |
|
|
2] Unsecured Loans |
|
16.941 |
14.790 |
|
|
TOTAL BORROWING |
|
63.521 |
37.473 |
|
|
DEFERRED TAX LIABILITIES |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
|
73.043 |
42.214 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
|
2.236 |
1.168 |
|
|
Capital work-in-progress |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
|
0.000 |
0.000 |
|
|
DEFERREX TAX ASSETS |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
|
45.139 |
27.347 |
|
|
Sundry Debtors |
|
18.730 |
5.625 |
|
|
Cash & Bank Balances |
|
0.948 |
0.841 |
|
|
Other Current Assets |
|
1.094 |
3.177 |
|
|
Loans & Advances |
|
8.500 |
8.500 |
|
Total
Current Assets |
|
74.411 |
45.490 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
|
3.050 |
3.543 |
|
|
Other Current Liabilities |
|
0.000 |
0.000 |
|
|
Provisions |
|
0.554 |
0.901 |
|
Total
Current Liabilities |
|
3.604 |
4.444 |
|
|
Net Current Assets |
|
70.807 |
41.046 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
|
73.043 |
42.214 |
|
PROFIT
& LOSS ACCOUNT
(RS.
IN MILLIONS)
|
|
PARTICULARS |
|
31.03.2008 |
31.03.2007 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income (Sales) |
|
521.193 |
306.665 |
|
|
|
Other Income |
|
0.547 |
0.622 |
|
|
|
TOTAL |
|
521.740 |
307.287 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Goods Sold |
|
511.436 |
300.565 |
|
|
|
Freight |
|
0.572 |
0.519 |
|
|
|
Unloading Charges |
|
0.021 |
0.027 |
|
|
|
Handling Charges |
|
0.000 |
0.870 |
|
|
|
Job Works |
|
1.476 |
0.000 |
|
|
|
Electricity Charge |
|
0.014 |
0.023 |
|
|
|
Salaries |
|
0.681 |
0.344 |
|
|
|
Printing and Stationery |
|
0.018 |
0.016 |
|
|
|
Telephone Expenses |
|
0.171 |
0.169 |
|
|
|
Travelling Expenses |
|
0.158 |
0.136 |
|
|
|
Remuneration |
|
0.330 |
0.210 |
|
|
|
Other Expenses |
|
6.056 |
3.990 |
|
|
|
TOTAL |
|
520.933 |
306.869 |
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION |
|
0.807 |
0.418 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
|
0.405 |
0.198 |
|
|
|
|
|
|
|
|
|
|
NET PROFIT |
|
0.402 |
0.220 |
|
------------------------------------------------------------------------------------------------------------------------------
STATEMENT
OF TOTAL INCOME
(KAMAKSHI
STEELS PRIVATE LIMITED)
(RS.
IN MILLIONS)
|
PARTICULARS |
2010-2011 |
|
|
|
|
|
|
INCOME FROM
BUSINESS |
|
|
|
|
|
|
|
(A) COMPUTATION
OF TOTAL INCOME AS PER REGULAR TAX PROVISIONS |
|
|
|
Net profit As per Profit and Loss Account Enclosed |
|
15.664 |
|
|
|
|
|
Add: Inadmissiables |
|
|
|
- Depreciation (Considered
Separately) |
1.781 |
|
|
- Donations |
0.023 |
1.804 |
|
|
|
|
|
Less: Depreciation admissible as per Income Tax act |
4.588 |
|
|
- Delayed remittance of TDS
disallowed in earlier year |
0.000 |
|
|
- Directors Remunerations |
0.000 |
4.588 |
|
|
|
12.880 |
|
|
|
|
|
Total Income As
per regular Tax Provisions |
|
12.880 |
|
|
|
|
|
Taxable income
Rounded Off U/s 288 (A) |
|
12.880 |
|
|
|
|
|
Income Tax there
on @ 30.90% Including Surcharge |
|
3.980 |
|
|
|
|
|
(B) COMPUTATION
OF MINIMUM TAX U/S 115 JB |
|
|
|
Net profit As per Profit and Loss Account Enclosed |
|
15.664 |
|
|
|
|
|
Add: Income – Tax – Paid |
|
0.000 |
|
|
|
|
|
Book profit Computed as per Section 115 JB |
|
15.664 |
|
|
|
|
|
Minimum Tax @ 10.30% Including Surcharge |
|
1.613 |
|
|
|
|
|
Income Tax
payable (Being Higher of (A) and (B) as above) |
|
3.980 |
|
|
|
|
|
INCOME TAX PAYABLE
|
|
3.980 |
|
|
|
|
|
Less: TDS from Deccan cements Limited |
0.008 |
|
|
Less: Advance tax Paid on 11.03.2010 |
0.600 |
|
|
|
|
3.372 |
|
|
|
|
|
Add: Interests U/s 234 B |
0.202 |
|
|
Add: Interests U/s 234 B |
0.199 |
0.401 |
|
|
|
|
|
Total |
|
3.774 |
|
|
|
|
|
Less: Self – Assessment tax Paid on |
|
3.774 |
|
|
|
|
|
Refund due |
|
0.000 |
------------------------------------------------------------------------------------------------------------------------------
COMPUTATION OF TOTAL INCOME
(MR.
TELAPOLU RAM PRASAD )
(RS.
IN MILLIONS)
|
Particulars |
2008-2009 |
||
|
|
|
||
|
INCOME FROM
SALARY |
|
|
0.420 |
|
|
|
|
|
|
Kamakshi Steels
Private Limited |
|
|
|
|
- Salary |
|
0.420 |
|
|
|
|
|
|
|
INCOME FROM
HOUSE PROPERTY |
|
|
0.016 |
|
|
|
|
|
|
76-11-32/1, Bhavanipuram, |
|
|
|
|
Annual Rental Value u/s 23 |
|
0.024 |
|
|
Less: |
|
|
|
|
House Tax Paid |
0.001 |
0.001 |
|
|
|
|
0.023 |
|
|
|
|
|
|
|
Less: |
|
|
|
|
Deduction u/s 24 (a) |
0.007 |
0.007 |
|
|
|
|
|
|
|
|
|
0.016 |
|
|
INCOME FROM BUSINESS
OR PROFESSION |
|
|
0.495 |
|
|
|
|
|
|
From firm M/s Ramya Steel Syndicate (25.00% Shares) |
|
|
|
|
Remuneration |
0.165 |
|
|
|
Interests |
0.272 |
|
|
|
|
|
|
|
|
From Firm M/s Ganesh Trading Company (27.50% Shares) |
|
|
|
|
Remuneration |
0.008 |
|
|
|
Interests |
0.049 |
0.495 |
|
|
|
|
|
|
|
INCOME FROM
OTHER SOURCES |
|
|
0.000 |
|
|
|
|
|
|
Interests From Bank |
|
0.000 |
|
|
|
|
|
|
|
GROSS TOTAL
INCOME |
|
|
0.931 |
|
|
|
|
|
|
Less: Deduction |
|
|
|
|
U/s 80 C |
|
|
|
|
L.I.P. |
0.181 |
|
|
|
|
|
0.100 |
|
|
U/s 80 D (Payment Rs.5289/-) |
|
0.005 |
0.105 |
|
|
|
|
|
|
TOTAL INCOME |
|
|
0.826 |
|
|
|
|
|
|
Round off U/s
288 A |
|
|
0.826 |
|
|
|
|
|
|
Income Exempt
u/s 10 |
|
|
0.108 |
|
|
|
|
|
|
Tax Due |
|
0.197 |
|
|
Educational Cess |
|
0.006 |
|
|
|
|
0.203 |
|
|
|
|
|
|
|
T.D.S. |
|
0.077 |
|
|
|
|
0.126 |
|
|
|
|
|
|
|
Interests u/s 234 A/B/ C |
|
0.030 |
|
|
|
|
0.156 |
|
|
|
|
|
|
|
Deposit u/s 140 (A) |
|
0.156 |
|
|
|
|
|
|
|
Tax Payable |
|
0.000 |
|
------------------------------------------------------------------------------------------------------------------------------
PROJECT
REPORT
HIGHLIGHTS
OF THE PROPOSAL
· The Project is an Integrated Steel Plant Manufacturing Sponge Iron with a Captive Power Plant for continuous supply of Power hence lower cost of Production.
· The Project is located is in proximity to source of Raw Materials like iron ore, coal dolomite hence low Transportation Cost of Raw Materials.
· The Project is in Proximity to good socio-infrastructure facilities of nearby towns.
· Government Policies at Central and State Level is Supporting to Development of Integrated Steel Plants in order to have better utilization of Local Mineral Resources and resultant employment opportunities created.
· The proposed location of the unit is close to the high grade of raw material source i.e. Coal from Talcher / lB Valley, iron ore from Koida / Barbil and dolomite from Sundargarh resulting into better yield and quality of finished products.
· The Company, Promoters and Group have demonstrated their satisfactory track record in successfully executing similar project, dealings with banks, financial position and performance of Group Companies.
· The Company already owns the lands on which the project is proposed to be setup.
· The Debt Equity Ratio is only 1.76 indicating low leverage.
· The Promoters have in house expertise to execute the project on time without any cost over runs.
·
The ratio of Total outside Liabilities to Net Worth
is satisfactory indicating high owners funds and low external borrowings
FINANCIAL
PROJECTIONS
|
Pay back period |
4 years and 8
Months |
|
|
|
|
Debt Service Coverage Ratio |
1.54:1 |
|
|
|
|
Internal rate or return |
58.72% |
|
|
|
|
Breakeven point |
42.53% |
|
|
|
|
Debt Equity ratio |
1.76:1 |
|
|
|
|
Promoters contribution |
36.23% |
|
Raw Materials |
The main raw material are iron ore, Coal,
Coke for pig iron, limestone / dolomite, steel scrap and manganese ore |
|||
|
|
|
|||
|
Infrastructure
Facilities |
|
|||
|
Land |
Land requirement is 40 acres at Area -
Kalibata, Mota, Village Khewata, District- Khurda, Orissa |
|||
|
|
|
|||
|
Power |
Connected
load of 2000 KVA from CESCO / GRIDCO Initially 8 MW to be uplifted gradually to 16 MVA. Captive Power
supply shall be 16 MW from Waste Heat recovery boiler utilizing the hot waste
gases of DRI kiln as well as fluidized bed boiler using coal fines generated
from coal crushing and coal char generated in process of DRI production. |
|||
|
|
|
|||
|
Water |
3000 cum /day water from deep bore well at
site and nearby Brahmani river. |
|||
|
|
|
|||
|
Manpower |
350 Persons (Direct) and 600 Persons
(Indirect) |
|||
|
|
|
|||
|
Pollution |
Pollution control measures and equipment as per the Pollution Control
norms of State / Central Pollution Control Board will be installed strictly.
The pollution control equipment for the DRI kilns include bag filters
consisting of suction hoods, duct work, fans, bag filters, filter cleaning
devices by compressed air, bag houses, etc, cooler discharge area,
Electrostatic precipitator (ESP) with gas cooling tower or heat recovery
boiler (for power plant at a later stage), ID fans, chimneys, land for
disposal for char, etc. |
|||
|
|
|
|||
|
Rationality |
1. Experience of the promoters in the
power sector. 2. Closeness to Taicher and Keonjhar. 3 Proximity to raw material sources like
iron ore, coal dolomite. 4. Proximity to good socio-infrastructure facilities
of nearby towns. |
|||
|
|
|
|||
|
Capacity
Utilization (%) |
FY 2013 |
FY 2014 |
FY 2015 |
FY 2016 |
|
DRI |
60% |
70% |
80% |
80% |
|
Power |
60% |
70% |
80% |
80% |
|
|
|
|||
|
Production
(in MTs) |
FY 2013 |
FY 2014 |
FY 2015 |
FY 2016 |
|
DRI |
71280 |
83160 |
95040 |
95040 |
|
Power (lakh units) |
684.29 |
798.34 |
912.38 |
912.38 |
|
|
|
|||
|
Sales
(in MTs) |
FY 2013 |
FY 2014 |
FY 2015 |
FY 2016 |
|
DRI |
71280 |
83160 |
95040 |
95040 |
|
Power (lakh units) |
684.29 |
798.34 |
912.38 |
912.38 |
|
|
|
|||
|
|
(Rs. In Millions) |
|||
|
DRI @ Rs.13500 per ton |
962.300 |
1122.700 |
1283.000 |
1283.000 |
|
Power Rs.3 per unit |
205.300 |
239.500 |
273.700 |
273.700 |
|
|
|
|||
|
Total
production of Tons per Annum |
=
1,18,800 Tons |
|||
|
|
|
|||
|
Total
Units of Power Generation estimated |
=
11,40,48,000 Units. |
|||
INTRODUCTION
Subject is promoted by Patchala Sitaramaiah and Koratla Srinivasa Rao as
Private Limited Company in the State of Andhra Pradesh for Trading and
Manufacturing of Steel Products.
The Registrar of Companies -Andhra Pradesh issued Certificate of
Incorporation no. 42243 of 2003-04 dated 16th December 2003.
The Main objects
for which the Company is incorporated are:-
1.
To procure, purchase, process refine import, export
sell manufacture generally by any process including by rerolling and generally
to deal in and act as brokers, agents, distributors and suppliers of all kinds of
steel and steel products:
2.
To manufacture, procure, Purchase, import, export
and sell and generally to deal in act as brokers, agents stockiest,
distributors and suppliers of all kinds of metal such as MS Ingots, Billets, MS
W Rods, MS Sheets, Plates, Coils and MS Castings.
The Company started its Manufacturing operation at I.D.A. Kondapalli,
V1jayawada by putting up a unit to Manufacture 120 TPD with a financial
Assistance of Rs.10.000 Millions a Term Loan and Rs.50.000 Millions as Working
Capital Facilities from Karur Vysya Bank, Vijayawada One Town Branch,
Vijayawada. The Said is still a continuing loan.
The Directors of the Company have more than 27 years of experience in
Steel Industry.
The Group is a well established Group enjoying paramount goodwill, a
reputation in the market for quality Steel and excellent customer service. The
Products of the Company are sold under the brand name of ‘VIJAY TMT BARS’ a
well known brand in Andhra Pradesh.
Subejct has proposed to set up an integrated steel manufacturing unit at
Village Khewata , in the Khurda District, Orissa. This is a step towards value
addition to the iron ore mines deposits with some soft ore in the Koira sector
and Gandhamardhan and other nearby deposits of Keonjhar district. In this endeavor
the company will be setting up Sponge Iron unit comprising of3xl2OTPD i.e.
1,18,800 tpa and Captive Power Plant of 16MW {ln Phases, Phase I - 8 MW, Phase
11- 8 MW), with an investment of about Rs.1725.000 Millions at Khewata in
Khurda District of Orissa.
As steel is a basic commodity for all industrial activity, its
consumption marks industrial prosperity for the nation. The steel industry has
forward and backward linkages in terms of material flow, income and employment
generation.
The World crude steel output was 1344 Million MTs in 2007 as against 945
million MTs in 2003. China is the world’s largest crude steel produce (489
million MTs), followed by Japan (112.47 million MTs) and USA (97.2 million
MTs). India occupied the 5th position at 53.10 million MTs. USA is the largest
importer of semi-finished and finished steel products followed by China and
Germany. Japan is the largest exporter of these items followed by Russia and
Ukraine.
Apparent consumption of finished carbpn steel has increased from 14.84
million tons in 1991-92 to 3 1.169 million tons in 2001-02. In 2005-06
production was 42.636 million tons with pig iron production at 3.856 million
tons. It is a pleasing fact that the steel industry which was facing a for some
time has staged a remarkable turnaround since 2001-02. China has been an
important export destination for Indian steel.
India’s steel making capacity increased from 1.5 Million tons in 1950-51
to about 48 Million tons at Power. The India’s economy is poised for a sharp
upturn in the per capita steel consumption is at a low of 35 kgs against
developing countries average at 60 kgs and a world average of 150 kgs. This is
fueled with the fact to produce more than 100 million tons by 2015 as per the
Central Government planned estimates.
India is endowed with rich mineral deposits like high quality iron ore
deposits, a growing market, skilled and cheap labor, technological know-how,
and a large international market for quality steel.
These advantages are pitted against shortage of good quality coking
coal, high cost of power, dependence on imported technology, high freight and
distribution costs.
This capital intensive industry earlier used to draws its sustenance
mainly from government demand. However, growth in construction, shipping,
engineering and infrastructure has increased the demand for steel further.
Generally, foundries consume pig iron, steel making units purchase sponge iron
which is a substitute of steel scrap, long products are used in construction
and engineering, hot rolled products are used in pipes, tubes, rods and wires.
The automobile sector, domestic appliances, bicycle and furniture depend upon
cold rolled products. Auto and construction sectors use galvanized plain steel.
The major players dominating the steel industry are SAIL, TISCO, VSP
besides Essar Steel, Ispat Industries, Mukund Steel, Jińdal Steel, Bhusan, etc.
The development in the infrastructure sector, realty sector, and road corridor
programmed of the Central Government, cheap I priority housing loan, demand
from reconstruction of war ravaged countries like Afghanistan and Iraq, demand
from China (developing fast and investing for the Olympics and Expo), etc. has
increased the demand for steel.
There is a large gap in demand and supply of construction steel billets
and many rolling mills are starved due to shortage of regular supply. The
carbon construction steel is either cold heading steel, case carbunzing steel,
hard enable quality steel (low carbon, medium carbon, high carton and forging
quality steel). The alloy construction steel includes case carburizing quality,
nit riding quality, cold heading quality, creep resisting quality, etc. The
spring steels include chrome- vanadium and silico-manganese.
The state of Orissa is endowed with the rich mineral resources like iron
ore, coal, dolomite, chrome ore, manganese ore, etc. which is conducive for
steel making. These resources are located in the key regions of Keonjhar,
Talcher, Sundargarh and Jharsuguda. This makes the opportunity to produce Steel
in Orissa, a very viable proposition. There are 104 sponge iron-manufacturing
units with a combined capacity of 6 million tons with production of 1.925
million tons in 2004-05 and 2.26 million ton in 2005-06 and rising.
The manufacture of steel is around 4 million tons at present in Orissa
and on the upswing. About 45 companies have signed MOUs with the State
Government for steel projects in Orissa.
Steel billets to be produced are a semi-finished product, which is used
for further processing for manufacture of suitable products. It is used as a
feedstock for rolling mills for production of wire rods, bars/rods and light
structural. They are also used extensively in forge shops and machine shops for
production of engineering goods and also as feedstock for seamless tubes.
Pencil ingots of smaller sizes manufactured in mini-steel plants are also used
as substitute of billets.
There are about 200 Electric Arc Furnace units in the country with 15
Million Tons / year capacity producing mild steel, alloy and special steel.
Some of the units are not operating due to various reasons.
There are about 1000 induction furnace units with 13 million tons / year
capacity. Steel billets are manufactured either by ingot casting and rolling
through blooming and billet mills or by forging or by continuous casting of
billets directly from liquid steel.
While projecting national demand of steel billets, the requirement of
the same for integrated steel plants (primary producers) has not been
considered since their captive requirement goes for finished steel production.
Demand for steel billets excluding the captive requirement of integrated steel
plants is mainly dependent on production of bars, rods and structural by secondary
producers. The anticipated production of mild steel bars, rods and structural
from secondary producers during 2006-07 is of the order of 11.8 million tons.
Billets requirement for producing the above products will be around 14
million tons. The production of pencil ingots / billets from secondary sector
during 2011-12 is likely to be about 16 million tons, which include mild steel,
medium/high carbon steel, alloy steels, etc. It is estimated that the share of
mild steel will be of the order of 12.5 million tons. The mild steel billets
available for sale from integrated steel plants (BSP-0.80, TISCO-0.76,
DSP-0.85, RINL-0.60), is likely to be around 3.5 million tons.
Thus the total availability of mild steel billets would be around 13.00
Mt/ yr (9.50 Mt/yr from secondary sector + 3.5 Mt/yr from integrated steel
plants) as against the requirement of the order of 16.0 Mt/yr. So there will be
a shortfall of around 3.00 Mi. Tons during 2011-12.
Imports of ingots and semis by selected developing countries like
Indonesia, South Korea, Malaysia, Philippines, Saudi Arabia, Singapore, Taiwan
and Thailand is 18-20 million tons per year.
Export of semis by India till 1991-92 was negligible. However, export of
semis during 1993-94 to 1998-99 was reported between 163,000-585,000 tons. With
the liberalized export policies and considering the trade prevailing in Asian
countries, an export provision of around 1.8 Mt of billets has been considered
during 2010-11.
In view of the good demand of steel and avenue for backward and forward
integration, the company has proposed to set up the project comprising of a
Sponge Iron unit comprising of 3 x 120 TPD i.e. 1,18,800 tpa and Captive Power
Plant of 16 MW {ln Phases , Phase I - 8 MW , Phase 11- 8 MW) manufacturing
facility at Khewata in Khurda District of Orissa.
Sufficient land will be earmarked for disposal wastes and green belt as
per the Pollution Control Board norms and the balance for plants with allied
utilities and services. The project will be implemented within 33 Months from
zero date.
PROMOTERS
The main promoters of the company are resourceful and capable in
implementing the project. The details of the promoters are as follows:-
MR. T RAM PRASAD
Mr. T Ram Prasad, S/o Bala Koteswara Gupta aged about 39 years is a
graduate from Nagarjuna University. In 1988 he entered in Iron and Steel
business as a small trader for marketing of Iron and Steel products. In the
year 1990 he floated a firm Ramya Steel Syndicate consisting of Trading of Iron
and steel. He is Managing Partner of the firm. He developed the business and
today the Firm is one of the Highest Sales Dealers in Vijayawada iron and Hard
Ware Association. He also worked as a Treasurer of the Association during the
year 2004-06. The Annual Turnover of the firm approx Rs.500.000 Millions. The
firm is having limits of Rs.60.000 Millions with The Karur Vysya Bank Limited,
Vijayawada 1 Town Branch.
He is having good relations in the Iron and Steel market. He is having
lot of network for marketing of Iron and Steel products. In the year 2002, he
started another firm in Hyderabad in the name of style of Ganesh Trading
Company for Trading of Re-rolling products and other TMT Bars available in
Hyderabad. The firm M/s. Ramya Steel Syndicate is LTC dealer during the year
2004-05. M/s. Ramya Steel Syndicate was getting LTC from Rashtriya Ispat Nigam
Limited, Visakhapatnam.
In the year 2005 he joined as Executive Director in M/s. Kamakshi Steels
(Private) Limited, IDA, Kondapalli. The firm is having an integrated Mini Steel
Plant situated in K Porthavaram Village, GKondur Mandal.
The company is engaged in manufacturing of Iron and Steel Rebars. At the
time of his joining the company, the Annual Turnover was Rs.90.000 Millions. He
implemented the project on time and increased the production within a short
period .Consequently he was appointed as Managing Director of the Company in
the year 2006. The Company is also certified an ISO 9001-2000 Organization by DAS
Certification by an UK based Company. Thereafter the Company applied for Trade
Mark registration for registering of brand name for Company’s TMT Bars.
Now the Company’s products are sold in the market under brand name
“VIJAY TMT” and thereafter applied for BIS Certification marks license for TMT
Bars.
Now the Company has achieved turnover of around Rs.350.000 Millions per
annum. The Company is enjoying credit limits of Rs.50.000 Millions with The
Karur Vysya Bank Limited Vijayawada I Town Branch and Term Loan of Rs.10.000
Millions. The products covered throughout Coast districts i.e., Krishna,
Guntur, Prakasam, Nellore, Ongole, Chittoor, East Godavari Dist and West
Godavari Dist. The firm is getting Govt. Orders viz., Central Public Works,
South Central Railway and other Govt departments. With his vast experience in
executing the project, the Company will be able to implement the project on
time.
MR. K
SATYANARAYANA
Mr. K Satyanarayana, S/o Ramaiah aged about 49 years, hails from a
business family whose main business since 1960’s is procurement and sale of
Ferrous and non ferrous scrap throughout Andhra Pradesh. He improved the
business from 1982 onwards and increased the Turnover to the level of Rs.90.000
Millions per annum or 18,000 Mt of MS Scrap sales per annum. His personal
contacts in the relevant field have developed rapport with more than 2500 scrap
sub-dealers in and around Andhra Pradesh.
In the year 1995 he incorporated a Company in the name of M/s. SDV
Steels Limited. The Factory is situated in RS No: 93/4, IDA, Kondapalli and is
an integrated mini steel plant .The factory is situated near Vijayawada. The
main activity of the Company is manufacturing of Iron and Steel Rebars. The
annual production capacity of the plant is 12000 MT’s., The Company is having
an induction furnace and re-rolling mill for making of Rebars.
He is also promoter in M/s Padmasree Steels (Private) Limited,
Devarapalli Village, Ravulapalem. The main activity of the Company is
manufacture of MS Irigots and MS Rebars having own captive power plant.
He is also promoter in M/s. Sri Kanaka Durga Castings (Private) Limited,
the unit is situated in Adavipolam village, Zunnury house, Yanam. Manufacture f
MS Ingots is the main activity of the firm.
He is partner in M/s. Durga Estates, which has promoted in Lotus Land
Mark a successful Venture at Kedareswarapet, Vijayawada.
He also promoted Ws. Kanaka Durga Projects with the objective of
Constructing and letting Godowns admeasuring of 1,00,000 Sq. ft at Kanuru,
Autonagar and Bhavanipuram.
Recently he started MIs.Sreemaa Exhibitors (Private) Limited - Owns a
Cine Theatre namely Durga Kala Mandir situated at Gandhinagar, Vijayawada.
MARKET
STEEL INDUSTRY
A : WORLD STEEL
INDUSTRY
Steel, the recycled material is one of the top products in the
manufacturing sector of the world. The Asian countries have their respective
dominance in the production of the steel all over the world. India being one
among the fastest growing economies of the world has been considered as one of
the potential global steel hub internationally. Over the years, particularly
after the adoption of the liberalization policies all over the world, the World
steel industry is growing very fast.
Steel Industry is a booming industry in the whole world. The increasing
demand for it was mainly generated by the development projects that have been
going on along the world, especially the infrastructural works and real estate
projects that has been on the boom around the developing countries. Steel
Industry was till recently dominated by the United Sates of America but this
scenario is changing with a rapid pace with the Indian steel companies on an
acquisition spree. In the last one year, the world has seen two big M and A
deals to take place:-
1.
The Mittal Steel, listed in Holland, has acquired
the world’s largest steel company called Arcelor Steel to become the world’s
largest producer of Steel named Arcelor-Mittal.
2.
Tata Steel of India or TISCO (as listed in BSE) has
acquired the world’s fifth largest steel company, Corns, with the highest ever
stock price.
It has been observed that Steel Industry has grown tremendously in the
last one and a half decade with a strong financial condition. The increasing
needs of steel by the developing countries for its infrastructural projects
have pushed the companies in this industry near their operative capacity.
The most significant growth that can be seen in the Steel Industry has been
observed during the period 1960 to 1974 when the consumption of steel around
the whole world doubled. Between these years, the rate at which the Steel
Industry grew has been recorded to be 5.5 %. This roaring market saw a phase of
deceleration from the year 1975 which continued till 1982. After this period,
the continuous fall slowed down and again started its upward movement from the
early 1 990s.
Steel Industry is becoming more and more competitive with every passing
day. During the period 1960s to late 1980s, the steel market used to be
dominated by OECD (Organization for Economic Cooperation and Development)
countries. But with the fast emergence of developing countries like China,
India and South Korea in this sector has led to slipping market share of OECD
countries. The balance of trade line is also tilting towards these countries.
The main demand creators for Steel Industry are Automobile industry,
Construction Industry, Infrastructure Industry, Oil and Gas Industry and
Container Industry.
New innovations are also taking place in Steel Industry for cost
minimization and at the same time production maximization. Some of the cutting
edge technologies that are being implemented in this industry are thin-slab
casting, making of steel through the use of electric furnace, vacuum degassing,
etc.
The Steel Industry has enough potential to grow at a much accelerated
pace in the coming future due to the continuity of the developmental projects
around the world. This industry is at present working near its productive
capacity which needs to be increased with increasing demand.
World Steel
Industry and Crude Steel Production
The following table gives a clear picture upon the major crude steel
producers in the world as of the year 2004.
|
Country |
Crude Steel
Production (Mtpa) |
|
|
|
|
China |
272.5 |
|
Japan |
112.7 |
|
United State |
98.9 |
|
Russia |
65.6 |
|
South Korea |
47.5 |
|
F. R. Germany |
46.4 |
|
Ukraine |
38.7 |
|
Brazil |
32.9 |
|
India |
32.6 |
|
Italy |
28.4 |
In the year 2004, the global steel production hasp made a record level
by crossing the 1000 million tones. Among the top producers in the steel
production, China ranked 1 in the world.
The challenge in
international trade
Producing one of the most versatile engineering materials, the steel
sector has had huge investments already made in it. The sector is also linked
to the economic lives of millions of people across the world, both indirectly
and directly. It is small wonder then, that small developments in this sector -
one of the most important sectors in any national economy - always attract the
attention of the government of a country as well as global bodies/institutions.
Even developed economies like the US and the EU have been rocked by the sharp
upturns and downturns in the steel sector in the last decade. US President
George Bush himself had to come to the aid of the ailing American steel
industry by invoking a ‘safeguard agreement’ under WTO rules, which was,
adopted in US law as the (in) famous Section 201. It is being increasingly
observed that the agreement on anti-dumping (AD) and countervailing duties
(CVD) under the various WTO agreements of member countries are being used most
commonly in the steel sector to protect the interests of either producers,
exporters or consumers of a country.
If more popular propagators of the concept of liberal trade in the world
- like the US, EU, Canada, etc. - are forced to resort to trade actions such as
AD/CVD investigation and imposition of duties to check imports, and when these
measures are not sufficient even go for ‘safeguard action’, it shows how
drastically the steel scenario has changed over the last two decides.
Before a country takes ‘trade action’ for restricting imports from any
other country or of group countries, it undertakes extensive preparation for
launching and conducting investigations. Besides causing disruption of trade,
this is a costly exercise in terms of time, money and resources. An unfavorable
environment is also created for the exporting countries, as they too have to
undertake wide ranging coordination efforts with several organizations/agencies
involved in steel production, domestic sales and- exports as well as their
respective governments, to successfully defend the charge of
dumping/subsidization.
Every year, the Brussels-based International Iron and Steel Institute
(IISI) lists out the countries that export steel. According to the one of the
latest IISI publication, in the year 2002, business in about 300 million tones
of saleable steel was transacted internationally out of a total production of
about 840 MT. It is interesting to note that despite the discomforting
environment created by protective measures taken by some countries, trade in
steel increased during the year. This obviously means that though the trade
actions pose a very big challenge in the international market to both importers
and exporters, both have gladly accepted these challenges, and learnt to live
with it.
Although the global steel trade across countries has been on the
increase over the years in absolute quantities and also as a percentage of
total production of saleable steel - real ocean trade, excluding the trade
between countries within the same trading blocks and the same customs union may
not have increased. Although firm data are not available, there is an
indication that the same has fallen in the very recent years.
The contours of global steel trade are fast changing with the emergence
of new producers and buyers as also new competitive scenarios in steel
production. The competitive position of the industry worldwide is dynamic and
keeps changing with currency depreciation, adoption of new technologies and new
sources of raw materials. As a result of the fast changing scenario in the last
decade or so in this area, the developed countries have found their steel
industry threatened by more competitively priced steel from the developing
countries as well as from the former USSR countries. This has sparked off a
series of trade actions mainly by the developed world on the imports of steel.
Somehow, trade actions are not new to the steel industry. But, the number has
increased phenomenally.
Although most industries have witnessed an increase in the number of
trade cases, the problem has taken a much more serious dimension in the ‘steel
industry. It is just the protectionist stance of the individual countries but a
lack of understanding of the specific problems of this industry that remains at
the root of the problems. Unfortunately, perhaps this specific nature of the
industry attention while formulating the general multilateral rules of trade
and dispute settlement mechanism. These problems will have to be taken into
account for any kind of fruitful policy initiative on multilateral trade under
the auspices of the WTO.
All of a sudden irrespective of whether the steel producers in other
countries could actually make money at these prices, cut throat competition
among themselves led to an unprecedented and widespread fall in world prices. The
global market was literally handed over to the buyers in the process.
This widespread drop in prices was interpreted by many as dumping.
Whether there was real dumping or not, every country in the world found it a
good excuse to protect her industries this way.
Two the developed countries had already lowered their tariff walls. The
developing countries are in the, process and comparatively have higher rates of
import tariffs and even quantitative restrictions in many places. The developed
countries in the face of massive inflow of steel into their markets could not
go back to building, again tariff walls as the same would have gone totally
against their proclaimed trade philosophy. Therefore, they had to look for a
framework to protect their industry from stiff global competition mainly from
the developing countries. Many fronts have been opened up - conditions of
Labour, environment, quality of products, health hazards etc. etc. These non-
tariff barriers have been selected depending on the product targeted. In the
absence of any effective health, environmental and social issues to talk about
more direct issues like dumping and subsidies have found priority and focus in
steel. The anti-dumping or anti-subsidy countervailing measures have the full
global institutional and legal backing. The other advantage in using these
tools for protection is that unlike in a tariff or quantity restriction (QR)
based systems, anti-dumping measures can be directed against very specific
target countries and products and that too as and when needed. It is a far
better tool for selective elimination of present or potential competition.
Right or wrong, raking up issues of all kinds, the developed nations have been
able to effectively restrict imports directly or by blunting competitive edge
of the foreign supplier.
Three, initiation of trade actions is no longer confined to the
developed countries. As more and more developing countries are joining the WTO,
number of cases initiated by them is also on the rise. There is also a sense of
retaliation among countries to initiate cases against a country that has
imposed similar action on its exports.
B. STEEL INDUSTRY
IN INDIA
Sector
structure/Market size
The steel industry in India has been moving from strength to strength
and according to the year-end review by the Press Information Bureau, India has
emerged as the fourth largest producer of steel in the world and the second
largest producer of crude steel.
Production
Steel production reached 28.49 million tonne (MT) in April-September
2009.
The National Steel Policy has a target for taking steel production up to
110 MT by 2019- 20. Nonetheless, with the current rate of ongoing Greenfield
and Brownfield projects, the Ministry of Steel has projected India’s steel
capacity is expected to touch 124.06 MT by 2011-12. In fact, based on the
status of memoranda of understanding (MOUs) signed by the private producers
with the various state governments, India’s steel capacity is likely to be 293
MT by 2020.
Consumption
India accounts for around 5 per cent of the global steel consumption.
Almost 70 per cent of the total steel used is for kitchenware. However, its use
in railway coaches, wagons, airports, hotels and retail stores is growing
immensely.
India’s steel consumption rose by 6.8 per cent during April-November
2009 over the same period a year ago on account of improved demand from sectors
like automobile and consumer durables.
A Credit Suisse Group study states that India’s steel consumption will
continue to grow by 16 per cent annually till 2012, fuelled by demand for
construction projects worth US$ 1 trillion.
The scope for raising the total consumption of steel is huge, given that
per capita steel consumption is only 35 kg compared to 150 kg across the world
and 250 kg in China.
Exports
Out of India’s annual iron ore production of more than 200 MT, about 50
per cent is exported.
India’s iron ore exports more than doubled to 9.3 million tones in
October 2009 as compared to 4.4 million tones in the same month a year ago on
the back of increase in demand from Chinese steel producers, as per a joint
study by a group of iron ore exporters.
Iron ore is a key input in steel making. The country’s iron ore exports
during April-October 2009 period grew 20 per cent over the year ago period to
53 million tones, as per the study.
The global steel industry has been breathing with some relief since
mid-2002. One of the reasons is the vast improvement in the steel business
worldwide; as a result of rising demand in pockets, reduction in production
capacities and better demand-supply balance leading to higher prices. China’s
huge demand for steel for its ongoing countrywide infrastructure development
programme has pumped up the prospects for the steel industry. However, exporters
continue to operate with the sword of the threat of trade actions hanging over
their heads.
The larger issues like shedding of excess and/or inefficient capacities
and subsidization are being looked into be international forums like the
Organization of Economic Cooperation and Development. The thrust in companies,
which export is to create internal awareness of the rules of the game of
international trade, particularly the WTO provisions relating to trade actions
such as AD/CVD and safeguard agreements. This has become necessary in order to
(a) domestic market and (b) develop the ability to identify new export
destinations along with strategies to sustain exports if encountered with trade
case.
The Indian steel industry, which has boldly faced several trade faces so
far, has developed the knowledge of strategic actions required to emerge
successful. India’s steel export of 4.23 MT in 2002-03 speaks volumes of the
maturity and the capacity of the domestic industry to meet the challenges
before it.
SAIL has already developed in house expertise and evolved a task force
to handle trade cases. Facing the threat of certain important markets being
closed, SAIL has opened options for trade with Europe and Thailand. What is
remarkable is that despite the trade cases faced, SAIL exports have shown
excellent growth both in terms of volume and value.
The Ministry of Steel and Ministry of Commerce have played a major role
in Indian steel industry’s success story. The support and guidance provided by
the ministries have been major strengths. One of the important steps taken by
the government is to set floor prices for imports of certain categories of flat
products into India and other non-tariff barriers for otherwise - unchecked
imports of defectives.
Today India is a net exporter of steel. The country is gradually
emerging as a strong market player. However, the Indian steel producers
collectively need to orient production to market demand to escape overproducing
and oversupplying in the international market. The temptation to make hay while
the sun shines exists, but the lessons learnt during the recession years should
caution that short-term gains do not compensate for the large setbacks that
unfair trade practices bring in their wake.
INVESTMENTS
A host of steel companies have lined up major investment proposals.
Furthermore, with an expanding consumer market, the Indian steel industry is
likely to receive huge domestic and foreign investments.
The domestic steel sector has attracted a staggering investment of about
USS 236 billion, according to the Minister of State for Steel A Sai Prathap.
This consists of nearly 222 MoUs signed between the investors and
various state governments mostly in the states of Orissa, Jharkhand,
Chhattisgarh and West Bengal.
· According to the Investment Commission of India investments of over US$ 30 billion in steel are in the pipeline over the next 5 years.
· Tata Steel has raised US$ 500 million by issuing ‘global depository receipts’ (GDRs) aiming at expansion of its Jamshedpur plant and overseas mining projects.
· The state-owned Steel Authority of India Limited (SAIL) will invest USS 724.12 million to set up a 4-million tonne per annum steel mill at its Bhilai Steel Plant.
· SAIL is also planning to set up a 12-nillion tonne plant in Jharkhand.
· Stainless steel manufacturer and exporter, Varun Industries, is setting up a US$ 171.63 million stainless steel-cum-alloy steel plant at Rohat, Jodhpur.
· India’s largest engineering conglomerate Larsen and Toubro (L and T) and state-owned Nuclear Power Corporation of India Limited (NPCIL) have formed a US$ 370.09 million joint venture for specialised steel and forging products.
GOVERNMENT INITIATIVE
Subsequent to the
recent fall in international prices of commodities and to protect Indian
producers, the Indian government has announced some changes in customs duty
rates, which were effective from November 2008.
The government has
removed full exemption of customs duty on some industrial and agricultural
commodities. Iron and steel products like pig iron, spiegeleisen, semi-finished
products, flat products and long products are now subject to a basic custom
duty of 5 per cent ad valorem.
The Indian government
plans to invest over US$ 350 billion in industries related to infrastructure
and construction which will give a fillip to the steel sector.
Moreover, in the Union
Budget 2009-10, the government has made a 23 per cent hike in allocation for
highway development and US$ 1.034 billion increase in budgetary support to
Railways which will further promote the steel industry.
Steel industry reforms – particularly in 1991 and 1992 - have led to
strong and sustainable growth in India’s steel industry.
Since its independence,
India has experienced steady growth in the steel industry, thanks in part to
the successive governments that have supported the industry and pushed for its
robust development.
Further illustrating
this plan is the fact that a number of steel plants were established in India,
with technological assistance and investments by foreign countries.
1991, a substantial
number of economic reforms were introduced by the Indian government. These
reforms boosted the development process of a number of industries - the steel
industry in India in particular - which has subsequently developed quite
rapidly.
The 1991 reforms
allowed for no licenses to be required for capacity creation, except for some
locations. Also, once India’s steel industry was moved from the listing of the
industries that were reserved exclusively for the public sector, huge foreign
investments were made in this industry.
Yet another reform for
India’s steel industry came in 1992, when every type of control over the
pricing and distribution system was removed, making the modem Indian Steel
Industry extremely efficient, as well as competitive.
Additionally, a number
of other government measures have stimulated the growth of the steel industry,
coming in the form of an unrestricted external trade, low import duties, and an
easy tax structure.
India continually posts
phenomenal growth records in steel production. In 1992, India produced 14.33
million tones of finished carbon steels and 1.59 million tones of pig iron.
Furthermore, the steel production capacity of the country has increased rapidly
since 1991 - in 2008, India produced nearly 46.575 million tones of finished
steels and 4.393 million tones of pig iron.
Both primary and
secondary producers contributed their share to this phenomenal development,
while these increases have pushed up the demand for finished steel at a very
stable rate:
In 1992, the total
consumption of finished steel was 14.84 million tones. In 20085 the total
amount of domestic steel consumption was 43.925 million tones. With the
increased demand in the national market, a huge part of the international
market is also served by this industry. Today, India is in seventh position
among all the crude steel producing countries.
SOME OF THE MAJOR REASONS THAT HAVE LED TO
THE GROWTH IN THE SIZE OF INDIA’S STEEL INDUSTRY ARE -
1. Abundant availability of iron-ore in India
2. Good facilities for steel production
3. Increased consumption of steel in the sectors like construction.
India has traditionally been one of the major producers of steel in the
world. Till the I 990s the steel of India was regulated and controlled by
government policies. After the economic reforms of the early I 990s, the Indian
steel industry has evolved significantly to conform to global standards.
India has set a vision to be an economically developed nation by 2020.
The steel industry is expected to play a major role in India’s economic
development in the coming years. The steel industry of India has a very high
growth potential and is expected to register significant growth in the coming
decades. India is expected to emerge as a strong force in the global steel
market in coming years.
Steel production in India has grown from. 17 MT in 1990 to 36 MT in 2003.
It is expected that by 2011, the steel production in India will grow to 66 MT.
THE MAJOR SECTORS
WHERE CONSUMPTION OF STEEL (S EXPECTED TO GROW IN THE COMING YEARS ARE –
1.
Construction
2.
Housing
3.
Ground transportation
4.
Hi-tech engineering industries such as power
generation, petrochemicals, fertilizers
The current scenario of the Indian steel industry indicates that there
is huge growth potential in this industry. The per capita-consumption of steel
in India, according to latest available estimates, is only 35 kg. This is much
less compared to the global average of 140kg. The per capita consumption level
of developed nations like the United States of America is 400kg. In this
respect, one of the major initiatives that need to be taken is to focus on increasing
the consumption of steel in the rural of India. The potential for the growth of
consumption of steel in the rural areas of India for purposes like rural
housing, rural infrastructure, etc is high which needs to be tapped
efficiently.
In order to realize the growth potential in the steel industry of India,
it is essential to ensure that the can remain competitive. One of the major
aspects in this regard is the availability of inputs. Shortage of inputs like
coke has led to increase in costs earlier. Moreover proper infrastructure
facilities like transport infrastructure, power etc are of prime importance in
maintaining the competitiveness of the industry.
Most developed countries have regulations that are aimed to protect the
domestic steel industry. The Indian steel industry has comparatively much
lesser protection through regulations. Proper regulatory measures should be
adopted by the government to protect the domestic steel industry.
The performance of the Indian steel industry has been quite satisfactory
over the last decade. Aided by the cutting-edge technology, the steel industry
in Asia has made advancements in all areas of operation. There has been a
substantial increase in demand for Indian steel products in the global market
in the recent times.
FINANCIAL
PROJECTIONS
The financial
projections have been made on the basis of following assumptions:
330 working days of 3 shifts basis.
The Direct Reduced Iron (DRI) will be in 1 Phase and Captive Power plant
will be in 2 Phase
(Phase 1 -8 MW, Phase II- 8 MW).
Capacity utilization has been estimated at 60%, 70% and 80% in 2012-13,
2013-14, 2014-2015 and onwards respectively in respect of DRI, 80% in 2013-14,
2014-2015 and onwards respectively in respect of Captive Power.
The requirement and cost of the raw material, consumables, stores,
spares has been considered based on the industry norms/ prevailing market
price.
Power tariff for supply from SEB has been taken @ Rs.4.50 per unit. For
captive generation the same rate has been assumed.
The fringe benefits have been considered at 25% and increment has been
considered @ 10%.
Interest rate on proposed Term Loan has been taken @ 12% per annum on
floating rate basis and on working capital @ 12% with 24 months Moratorium and
60 months repayment.
The selling prices have been considered at prevailing Market Price.
It is proposed not to declare any dividend till the pendancy of Loan.
Depreciation is provided on straight line method for profitability
statement.
I T is provided at 30% of Taxable profit plus 10% surcharge and
education cess of 2%.
The Company will be able to recruit sufficient manpower, viz, qualified
engineers skilled and unskilled Labour, to handle the project and complete it
in time and operate the same.
The cost of construction shall include cost of all building material,
viz, Pre fabricated Structure, steel, cement, bricks, sand, electric goods,
plumbing goods, etc., labor charges during the construction period and other
routine costs incurred at site.
SWOT ANALYSIS OF
THE INDUSTRY
The strengths, weaknesses, opportunities and threats for the Indian
steel industry have been tabulated below. The national steel policy lays down
the broad roadmap to deal with all of them.
Strengths
1. Availability of iron ore and coal
2. Low Labour wage rates
3. Abundance of quality manpower
4. Mature production base
Opportunities
1. Unexplored rural market
2. Growing domestic demand
3. Exports
4. Consolidation
Weaknesses
1. Unscientific mining
2. Low productivity
3. Coking coal import dependence
4. Low R and D investments
5. High cost of debt
6. Inadequate infrastructure
Threats
1. China becoming net exporter
2. Protectionism in the West
3. Dumping by competitors
SWOT ANALYSIS
STRENGTH
1.
Promoters have 26 years experience in the field.
2.
The plant is located near the raw materials and
finished goods market resulting into low transportation cost.
3.
The required quality Labour is available at lower
Wages rate in abduance.
4.
There are very few players in steel sector.
WEAKNESS
1.
The steel sector is highly competitive.
2.
The cost of Raw materials forms a major part of the
cost of production. A high volatility in its has been observed. They may not be
able to pass on the entire cost increase, the market of the final product being
highly competitive.
3.
The Unscientific mining and low productivity of
Labour resulted in to higher Cost of Production Comparing to China.
4.
The industry is dependent on Import of Good quality
coking coal.
5.
The company had not invested R and D resulting into
carrying out production with same old technology.
6.
The high cost of debt increase the cost of
production.
7.
Inadequate infrastructure results into high
Inventory resulting in to higher cost of production due to carrying cost.
OPPORTUNITY
1.
The plant is located at Areas: Kalibat and Mota,
Khurda District, Orissa near to Bhubaneshwar, Orissa, which is major hub for
actual user and a big market for steel.
2.
Khurdha District is well developed and having a
good infrastructure and peaceful environment.
3.
There is a scope for further expansion of putting a
one more unit cones unit at a low capital cost since the entire infrastructure
is available.
4.
The steel industry had not explored Rural Market.
Development of Rural market will increase the demand for steel products by many
fold.
5.
The Government Policies to encourage Industrial
development, Infrastructure development and Housing will result into dev
elopement of steel industry at rapid speed.
6.
The export demand is increasing every year.
THREATS
1.
With a globalizations of the world economy, the
Threat of Dumping from China is there.
2.
Government Policies in respect of excise, sales tax
will affect the prices of steel.
3.
The development of substitute for steel will affect
the demand for a product of the company.
4.
Protectionism in the west will affect the export.
------------------------------------------------------------------------------------------------------------------------------
VENDORS PROFILE:
KAKATIYA
ENGINEERING PRIVATE LIMITED
PROFILE:
Kakatiya engineering equipments (Private) Limited is an
engineering equipments manufacturing organization which was established in
1987. Over the years, it has delivered a wide variety of equipments and
accessories for Cements, Sponge Iron, Steel, Sugar, Petrochemical and other
core sector plants of Turn - key basis.
The Promoter of this group, Sri. O.S .S. Prasad has made
untiring efforts to maintain high standards of quality of its products, cost
effectiveness, integrity of its personnel and above all, utmost loyalty towards
it customers.
Kakatiya has a strong supports of a dedicated team of
Engineers and Workforce for designing, Engineering with latest CAD facilities
and provide Practical Training to the Clients Technicians for proper operation
and maintenance at their in-house Plant, followed by Erection, Commissioning
and related services. A well built telecommunication system to respond
instantly to the need of its customer.
Kakatiya's strength lies in its outstanding team spirit and
unique entrepreneurial insight. All these make it one of the most modern heavy
engineering manufacturing unit with sophisticated machinery comparable to the
best in the country.
On the verge of 21st Century, We are aiming to execute
series in sponge Iron Projects (up to 500 TPD) and supply of Heavy Equipments
for these projects, which will prove our efforts and technological
capabilities.
Services:
· Techno-Economic Feasibility
· Design and engineering
· Detailed planning and scheduling
· Complete sponge iron plant from concept to commissioning
· Manufacture and supply of kiln cooler and, waste gas systems
· We can meet your requirements from 50TPD to 500 TPD
· Sponge iron projects including pre-heating kilns on turn key basis
Quality:
· Timely delivery of products
· Enhanced customer satisfaction
·
Team work
Future plans:
· ERP implementation
·
Quality systems
ASCENT ENGINEERS
A BRIEF HISTORY
Ascent Engineers is one of the most promising and upcoming company the
field of Mechanical and Electrical system design, Engineering consultancy and
Project execution for Sponge Iron plants and Power Detail Engineering for Civil
and Structural and sizing of Various Mechanical and Electrical equipments.
This Partnership Company formed by the Technocrats, Mr.
Thudi Srinu and Mr. Kandregula Ramakrishna. Both having rich experience in the
field of Design and detailed Engineering, Construction Engineering and commissioning
of various Steel and Power projects.
Ascent Engineers will take-up projects/packages on turnkey
basis i.e from concept to commissioning. They always keep into develop the
infrastructure and an efficient team, to execute and ready to meet any they
shall provide services to the industry through skilled and experienced
Engineering professionals.
Ascent Engineers are specialists in design of Sponge Iron
plants ranging from 25 TPD to 350 TPD and ensure the production of 100% with
conventional and Pre-Heating technology process of Sponge Iron Plant.
Ascent Engineers are providing designing and co-ordination
of co-generation power plants through Sponge Iron kiln waste heat recovery and
AFBC.
Apart from top management team, this consists of core Engineering
and management professionals. Ascent Engineers has retained experienced,
talented and skilled personal to man its operation and work sites.
Power
Division: Ascent Engineers are providing designing and coordination
of co-ordination of Co-generation power plants through Sponge Iron kiln waste
heat recovery and AFBC. Detailed Engineering and Consultancy services including
preparation of feasibility report for Power plants
Study of various alternatives and optimize the parameters of
the heat cycle and to configure the power cycle system to get the maximum
benefit.
Study and evolve an appropriate sizing and configuration of
steam turbine generation. Assess the potential for waste heat recovery.
To workout project cost estimate, taking into account
equipment cost, civil cost, duties and taxes, erection testing and
commissioning.
The main object of floating this company, to contribute/
compete in the field of Engineering consultancy in a simple, secure and
economical way in the field of Sponge Iron plant and Co-Generation Power
Plants. The aim is keep Engineering, procurement, project execution, testing
and commission and O and M under one roof to have a single point responsibility
and thereby minimize time and cost of project.
------------------------------------------------------------------------------------------------------------------------------
FORM 8:
|
This form is for |
Modification of
charge |
|
Charge
identification number of the modified |
10033345 |
|
Corporate
identity number of the company |
U27109AP2003PTC042243 |
|
Name of the
company |
KAMAKSHI STEELS PRIVATE LIMITED |
|
Address of the
registered office or of the principal place of business in |
Flat No.GF-4, Anjana Apartments, Water Tank Road, Labbipet, VijaywADA
– 520010, Andhra Pradesh, India |
|
Type of charge |
Immovable
Property Any Interests in
Immovable Property Book Debts Movable Property
(Not being Pledge) |
|
Particular of charge
holder |
· The Karur Vysya Bank Limited D. No.11-13-24, Sammetavari Street, Vijayawada – 520001, Andhra Pradesh, India |
|
Nature of description
of the instrument creating or modifying the charge |
1. Sanction Letter 2. Acknowledgement of Debt by the Borrower 3. Term Loan Agreement 4. Hypothecation of Goods to secure a demand
cash Credit 5. Agreement of hypothecation of Book Debts 6. Agreement of Guarantee 7. Confirmation of Deposit of Title Deeds 8. Board Resolution |
|
Date of
instrument Creating the charge |
19.09.2008 |
|
Amount secured by
the charge |
Rs.60.000
Millions |
|
Brief particulars
of the principal terms an conditions and extent and operation of the charge |
Rate of Interest For Working
Capital: ROI linked to BPLR minus 1.00% with a minimum of 14.25% p.a.
(Floating) For Term Loans:
ROI linked to BPLR minus 1.00% with a minimum of 14.25% p.a. (Floating) with
an option to re-set after 1 year (from the date of first disbursement) Terms of
Repayment For Term Loan: 60
months for hypothecation Machinery Loan For Working
Capital: One year (up to 31.08.2009) Margin For Working Capital
Limit: On Stock: 25% On Book Debts:
50% For Term Loan:
20% Extent and
Operation of the charge The Charge
primarily operates on Hypothecation of stocks of raw materials viz.
billets/ingots stock-in-process and finished goods and Book Debts and hypothecation
of machinery to be purchased out of bank finance. The charge collaterally
secured on extension of EM of land and buildings at RS. No. 93/4, 93/5, 93/2
of Kadim Pothavaram Vilage, G. Konduru Mandal, Ibrahimpatnam SRO, Krishna
Dist belongs to M/s. SDV Steels Private Limited including its plant and
machinery therein. |
|
Short particulars
of the property charged |
Hypothecation of
stocks of raw materials viz. billets/ingots stock-in-process and finished
goods and Book Debts and hypothecation of machinery to be purchased out of
bank finance. The charge collaterally secured on extension of EM of land and
buildings at RS. No. 93/4, 93/5, 93/2 of Kadim Pothavaram Vilage, G. Konduru
Mandal, Ibrahimpatnam SRO, Krishna Dist belongs to M/s. SDV Steels P Ltd
including its plant and machinery therein. |
------------------------------------------------------------------------------------------------------------------------------
FIXED ASSETS:
· Land
· Plant and Machinery
· Transformer
· Furnace
· Pressing Machine
· Cable and Panel Board
· Gasifier Equipment
· Mobile Crane
· Vehicles
· Rolling Mill
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.46.13 |
|
|
1 |
Rs.75.52 |
|
Euro |
1 |
Rs.66.53 |
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.