MIRA INFORM REPORT

 

 

Report Date :

14.07.2011

 

IDENTIFICATION DETAILS

 

Name :

ELECTROTHERM (INDIA) LIMITED

 

 

Registered Office :

A–1, Skylark Apartment, Satellite Road, Satellite, Ahmedabad – 380015, Gujarat

 

 

Country :

India

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

29.10.1986

 

 

Com. Reg. No.:

04-9126

 

 

Capital Investment / Paid-up Capital :

Rs.234.760 Millions

 

 

CIN No.:

[Company Identification No.]

L29249GJ1986PLC009126

 

 

Legal Form :

A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.

 

 

Line of Business :

Manufacturer and Exporter of Industrial Furnaces, Chemical Plants, Induction hardening and heating Systems and other associates process equipments for steel plants.

 

 

No. of Employees :

2500 (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba (52)

 

RATING

STATUS

PROPOSED CREDIT LINE

 

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

 

Maximum Credit Limit :

USD 28000000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and a reputed company having good track. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments.

 

The Company can be considered normal 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.

 

 

INFORMATION PARTED BY

 

Management Non Co-operative. 

 

 

LOCATIONS

 

Registered Office :

A–1, Skylark Apartment, Satellite Road, Satellite, Ahmedabad – 380 015, Gujarat, India

Tel. No.:

91-79-26768844

Mobile No.:

91-9825159296 (Mr. Shailesh Bhandari)

Fax No.:

91-79-26768855

E-Mail :

sec@electrotherm.com

ho@electrothrm.com

Website :

www.elctrotherm.com

Area:

3500 sq.ft. (Owned)

 

 

Factory 1 :

Engineering and Projects Division

Survey No. 72, Village : Palodia, Taluka : Kalol, District : Gandhinagar – 382 115, Gujarat, India

Tel. No.:

91-2717-234554/ 660550/ 55/ 56/ 57

Fax No.:

91-2717-237612/ 234616

 

 

Factory 2 :

Special Steel, DI Pipe and Electric Vehicle Division

Survey No. 325, Village : Samakhiyali, Taluka : Bhachau, District : Kutch, Gujarat, India

 

 

Factory 3 :

Wind Farm Project

Village : Dhank, Taluka : Upleta, District : Rajkot, Gujarat, India

 

 

Factory 4 :

Renewables Division

414/1, GIDC, Phase II, Vatva Industrial Area, Ahmedabad – 382 445, Gujarat, India

 

 

Factory 5 :

Transmission Line Tower Division

Village : Juni Jithardi, Taluka : Karjan, District : Vadodara, Gujarat, India

 

 

DIRECTORS

 

AS ON 31.03.2010

 

Name :

Mr. Mukesh Bhandari

Designation :

Chairman and CTO

 

 

Name :

Mr. Shailesh Bhandari

Designation :

Managing Director

 

 

Name :

Mr. Avinash Bhandari

Designation :

Joint Managing Director and CEO

 

 

Name :

Mr. Narendra Dalal

Designation :

Whole Time Director

 

 

Name :

Mr. Naveen Nakra

Designation :

Director

 

 

Name :

Mr. Nilesh Desai

Designation :

Director

 

 

Name :

Mr. Madhusudan Somani

Designation :

Director

 

 

Name :

Mr. Ram Singh

Designation :

Director

 

 

Name :

Mr. Pradeep Krishna Prasad

Designation :

Director

 

 

Name :

Mr. Ravikumar Trehan

Designation :

Director

 

 

Name :

Dr. Sudhir Kapur

Designation :

Director

 

 

Name :

Mr. Sunay Mathure

Designation :

Nominee Director (upto 30.05.2010)

 

 

Name :

Mr. Parth Gandhi

Designation :

Nominee Director (w.e.f. 30.05.2010)

 

 

KEY EXECUTIVES

 

Name :

Mr. Ashwin Patel

Designation :

Company Secretary

 

 

Name :

Mr. Shirish Maniar (w.e.f. 02.08.2010)

Designation :

Chief Financial Officer

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

(AS ON 30.06.2011)

 

Names of Shareholders

No. of Shares

Percentage of Holding

 

 

 

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

2,280,575

19.87

Bodies Corporate

975,000

8.50

Sub Total

3,255,575

28.37

(2) Foreign

 

 

Individuals (Non-Residents Individuals / Foreign Individuals)

512,500

4.47

Sub Total

512,500

4.47

 

 

 

Total shareholding of Promoter and Promoter Group (A)

3,768,075

32.83

 

 

 

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

32,800

0.29

Financial Institutions / Banks

100

-

Insurance Companies

9,384

0.08

Foreign Institutional Investors

2,675

0.02

Any Others (Specify)

1,366,666

11.91

 

 

 

Foreign Financial Institutions

1,366,666

11.91

Sub Total

1,411,625

12.30

(2) Non-Institutions

 

 

Bodies Corporate

1,485,649

12.95

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs.0.100 Million

1,095,021

9.54

Individual shareholders holding nominal share capital in excess of Rs.0.100 Million

262,819

2.29

Any Others (Specify)

3,453,185

30.09

 

 

 

Foreign Corporate Bodies

2,000,000

17.43

Clearing Members

31,097

0.27

Trusts

1,368,533

11.92

Non Resident Indians

53,555

0.47

Sub Total

6,296,674

54.87

 

 

 

Total Public shareholding (B)

7,708,299

67.17

 

 

 

Total (A)+(B)

11,476,374

100.00

 

 

 

(C) Shares held by Custodians and against which Depository Receipts have been issued

-

-

 

 

 

Total (A)+(B)+(C)

11,476,374

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer and Exporter of Industrial Furnaces, Chemical Plants, Induction hardening and heating Systems and other associates process equipments for steel plants.

 

 

Products :

ITC Code No.

 

Product Description

851420

Electronic Induction Furnace

851440

Induction Heating Equipment

8502

Electricity Power Generation

7207

Steel Billets

7213

Steel Bars

8711

Electric Vehicle

 

·         Induction Melting Furnaces

·         Induction Melting and Holding Furnaces

·         Electric Arc Furnaces

·         Submerged Arc Furnace

·         Metal Refining Konverter

·         Ladle Refining Furnaces

·         Induction Heating and Hardening Equipments

·         Electro DI Pipes

·         Electric Scooter

·         Steel, Special Steels and Stainless Steel

·         Electro TMT Plus Bars

·         Transformer

 

 

Exports :

 

Products :

Industrial Furnaces and Chemicals

Countries :

·         Bangladesh

·         Ghana

·         Ehiopia

·         Greece

·         Kenya

·         Mauritius

·         Pakistan

·         Sri Lanka

·         South Africa

·         Tanzania

·         Middle East

·         Zimbabwe

 

 

Terms :

 

Selling :

L/C, Cash and Credit ( 30-60- 90 Days)

 

 

Purchasing :

Cash and Credit ( 30-60- 90 Days)

 

 

PRODUCTION STATUS (AS ON 31.03.2010)

 

Particulars

Unit

Installed Capacity

 

Actual Production

A Saleable

 

 

 

1 Electronic Furnaces and other capital equipments

Sets

350

282

2 Wind Power generation

KW

Million KWH

500

0.80

 

0.557

3 Battery Operated Vehicles

Nos.

150000

8021

4 Ferrous and Non-Ferrous Billets /Bars/Ingots *

MT

314000

282376

5 Duct Iron Pipes

MT

150000

63635

6 Sponge & Pig Iron #

MT

286000

11414

B Captive

 

 

 

1 Sponge & Pig Iron #

MT

286000

220330

2 Oxygen / Nitrogen Gas

M. Cum

5940000

3038530

3 Thermal Power generation

MW

Million KWH

30

192

 

130.54

 

 

 

# Total Installed Capacity is of 2,86,000 MT

* Actual Production is excluding captive consumption

 

 

GENERAL INFORMATION

 

Customers :

End Users, OEM’s and Others

 

 

No. of Employees :

2500 (Approximately)

 

 

Bankers :

·         Bank of India

·         State Bank of India

·         Punjab National Bank

·         State Bank of Travancore

·         Corporation Bank

·         Bank of Baroda

·         Dena Bank

·         Oriental Bank of Commerce

·         Union Bank of India

·         Canara Bank

·         UCO Bank

·         ICICI Bank

·         State Bank of Indore

·         Standard Chartered Bank

·         Allahabad Bank

 

 

Facilities :

Secured Loans

31.03.2010

 

31.03.2009

 

Rs. in Millions

 

1. Working Capital Loans From Banks

(Secured by First Charge by way of Hypothecation of Stock in Trade and Receivables and Second Charge on all Movable Fixed Assets and Second Charge by way of Equitable Mortgage of all Immovable Properties situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch. Further the Loans are guaranteed by the Personal Guarantees of some of the Directors of the Company )

4253.080

3991.730

2. Long Term and Other Loans From

 

 

A. Banks

(Secured by First Charge by way of Equitable Mortgage of all Immovable Properties and Hypothecation of specified Movable Assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch and As Second Charge on all Stock in Trade and Receivables. Further the Loans are guaranteed by the Personal Guarantees of some of the Directors).

7326.110

559.360

B. International Finance Corporation (USD 15 Millions)

(ECB Loan is secured by First Pari Passu charge over the movable Assets and First Pari Passu Charge on Immovable Assets) (Includes Interest accrued but not due Rs.5.000 Millions)

678.500

760.650

C. Vehicle Loans

(Secured by Hypothecation of Specific Vehicles)

9.300

7.400

3. Sales Tax Deferment

(Amount due within one Year Rs.0.620 Million)

0.620

0.620

 

 

 

Total

 

12267.610

10319.760

 

 

Unsecured Loans

31.03.2010

 

31.03.2009

 

Rs. in Millions

A Short Term

 

 

From Banks

84.180

100.800

B Other Loan / Deposits / Advances

 

 

1. From Banks

1946.050

1020.750

2. From International Finance Corporation (USD 10 Millions)

(Includes interest accrued but not due Rs.2.250 Millions)

451.250

507.100

3. Directors

0.150

1.150

4. Customers and Others

408.070

344.120

 

 

 

Total

 

2889.700

1973.920

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Mehta Loadha and Company

Chartered Accountants

Address :

Ahmedabad

Tel. No.:

 

 

 

Subsidiaries :

·         ET Elec-Trans Limited

·         Bhaskarpara Coal Company Limited

·         Jinhua Indus Enterprises Limited (China)

·         Jinhua Jahari Enterprises Limited (China)

 

 

Associates :

·         Ahmedabad Aviation and Aeronautics Limited

·         Crystal Real Estate Private Limited

·         Palace Tours and Air Charters Private Limited

·         Western India Speciality Hospital Limited

·         Mangalam Information Technologies Private Limited

·         Liberty Finance and Leasing Company Private Limited

·         E-Motion Power Limited

·         Indus Elec-Trans Private Limited

·         Magnum Limited

·         Alwar Trading and Investment Company

·         Afghan Trading Private Limited

·         Bhandari Brothers Commercial Private Limited

·         Palanpur Reality Developers Private Limited

·         Jayshri Petro-Yarn Private Limited

·         Adroit Trading and Investment Company

·         EIL Hospitality Private Limited

·         EIL Realty Private Limited

·         EIL Software Private Limited

·         EIL Software Services Offshore Private Limited

·         EIL Technology Private Limited

·         Electro Salt and Water Limited

·         Electrotherm Engineering and Projects Limited

·         Electrotherm Infrastructure Private Limited

·         Electrotherm Renewables Limited

·         Electrotherm Foundation

·         Global Avianautics Limited

·         Gujarat Mint Alloys Limited

·         Indus Real Estate Private Limited

·         ICS Commercial Private Limited

·         New Delhi Real Estate Private Limited

·         Palace Infrastructure Private Limited

·         S B Realty Developers Private Limited

·         Sun Infrapower Private Limited

·         Sun Residency Private Limited

·         Suraj Real Estate Private Limited

·         S N Advisory Private Limited

·         Suraj Advisory Services Private Limited

·         Bhandari Charitable Trust

 

 

CAPITAL STRUCTURE

 

(AS ON 31.03.2010)

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

25000000

Equity Shares

Rs.10/- each

Rs.250.000 Millions

25000000

6% Non – Cumulative Redeemable Preference Shares

Rs.10/- each

Rs.250.000 Millions

 

 

 

 

 

Total

 

Rs.500.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

11476374

Equity Shares

(Out of above shares, 9,53,275 shares are allotted on 13th November, 1995 as fully paid up bonus shares by capitalising General Reserve and Profit and Loss Account)

Rs.10/- each

Rs.114.760 Millions

12000000

6% Non – Cumulative Redeemable Preference Shares of Rs.10/- each fully paid up, Redeemable at Par (35,60,000 Preference Shares Redeemable not later then 11th March, 2025. 44,40,000 Preference Shares Redeemable not later then 1st April, 2025 and 40,00,000 Preference Shares Redeemable not later than 14th May, 2025)

Rs.10/- each

Rs.120.000 Millions

 

Total

 

Rs.234.760 Millions

 

 

 

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2010

31.03.2009

31.03.2008

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

234.760

234.760

229.760

2] Share Application Money

0.000

0.000

30.000

3] Reserves & Surplus

6806.320

4363.060

3587.590

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

7041.080

4597.820

3847.350

LOAN FUNDS

 

 

 

1] Secured Loans

12267.610

10319.760

5827.510

2] Unsecured Loans

2889.700

1973.920

2376.160

TOTAL BORROWING

15157.310

12293.680

8203.670

DEFERRED TAX LIABILITIES

814.500

694.110

521.550

 

 

 

 

TOTAL

23012.890

17585.610

12572.570

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

14512.790

6461.680

5542.900

Capital work-in-progress

1221.420

4510.220

1347.320

 

 

 

 

INVESTMENT

72.690

22.000

21.250

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
4841.450
4521.580

2962.260

 

Sundry Debtors
3364.670
2483.870

2640.830

 

Cash & Bank Balances
1864.810
661.090

621.540

 

Other Current Assets
0.000
0.000

0.000

 

Loans & Advances
2218.400
1512.240

721.620

Total Current Assets
12289.330

9178.780

6946.250

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
5336.000

2873.700

1469.500

 

Other Current Liabilities
18.700

20.810

6.840

 

Provisions
114.560
83.920

109.270

Total Current Liabilities
5469.260
2978.430

1585.610

Net Current Assets
6820.070
6200.350

5360.640

 

 

 

 

MISCELLANEOUS EXPENSES

385.920

391.360

300.460

 

 

 

 

TOTAL

23012.890

17585.610

12572.570

 

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2010

31.03.2009

31.03.2008

 

SALES

 

 

 

 

 

Sales and Other Operational Income 

20027.530

16827.760

13253.580

 

 

Other Income

140.820

69.360

67.840

 

 

TOTAL                                     (A)

20168.350

16897.120

13321.420

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Material Cost

13039.810

11896.160

8677.040

 

 

(Increase)/Decrease in Stocks

111.820

(903.280)

(63.040)

 

 

Manufacturing Expenses

2631.730

2110.640

1674.350

 

 

Employees Remuneration

517.970

389.510

311.180

 

 

Administrative, Selling and General  Expenses

980.960

941.810

574.100

 

 

Research and Development Expenses

26.910

21.140

8.410

 

 

TOTAL                                     (B)

17309.200

14455.980

11182.040

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

2859.150

2441.140

2139.380

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

1332.520

1150.470

785.090

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

1526.630

1290.670

1354.290

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

723.760

517.910

318.610

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

802.870

772.760

1035.680

 

 

 

 

 

Less

TAX                                                                  (H)

256.840

265.610

413.890

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

546.030

507.150

621.790

 

 

 

 

 

 

Prior Period Adjustment - Income Tax and Others

(8.060)

15.310

1.550

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

1198.050

917.580

534.770

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

200.000

200.000

200.000

 

 

Proposed Dividend

 

 

 

 

 

Equity Shares

28.690

28.690

27.440

 

 

Preference Shares

7.200

7.200

7.200

 

 

Tax on Proposed Dividend

6.100

6.100

5.890

 

BALANCE CARRIED TO THE B/S

1494.030

1198.050

917.580

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

2454.790

2496.250

1591.620

 

 

Stores & Spares

103.960

42.090

63.140

 

 

Capital Goods

357.190

489.010

86.770

 

TOTAL IMPORTS

2915.940

3027.350

1741.530

 

 

 

 

 

 

Earnings Per Share (Rs.)

 

 

 

 

-  Basic

46.14

45.70

67.11

 

- Diluted

46.14

45.70

52.53

 

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2010

30.09.2010

31.12.2010

31.03.2011

Type

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

 Sales Turnover

6244.310

6414.560

4432.980

5877.080

 Total Expenditure

5416.280

5677.540

3695.740

4912.470

 PBIDT (Excl OI)

828.030

737.020

737.240

964.610

 Other Income

3.260

24.000

12.660

105.380

 Operating Profit

831.290

761.020

749.900

1069.990

 Interest

413.800

420.430

472.440

618.150

 Exceptional Items

0.000

0.000

0.000

0.000

 PBDT

417.490

340.590

277.460

451.840

 Depreciation

225.770

232.040

216.620

403.340

 Profit Before Tax

191.720

108.550

60.840

48.500

 Tax

68.290

22.310

21.880

14.290

 Reported PAT

123.430

86.240

38.960

34.210

Extraordinary Items       

0.000

0.000

(0.160)

5.580

Prior Period Expenses

0.000

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

0.000

Net Profit

123.430

86.240

(0.160)

39.790

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2010

31.03.2009

31.03.2008

PAT / Total Income

(%)
2.71

3.00

4.67

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
4.01

4.59

7.81

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
3.00

4.94

8.29

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.11

0.17

0.27

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
2.93

3.32

2.54

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
2.25

3.08

4.38

 

 

LOCAL AGENCY FURTHER INFORMATION

 

SUNDRY CREDITORS DETAILS: (RS. IN MILLIONS)

 

Particulars

31.03.2010

31.03.2009

31.03.2008

 

 

 

 

 

Sundry Creditors

5336.000

2873.700

1469.500

 

 

 

 

Total

 
5336.000

2873.700

1469.500

 

 

HISTORY:

 

Subject, the Ahmedabad based company, was started in the early eighties by two enterprising brothers Mukesh Bhandari and Shailesh Bhandari, along with Harish Sharma and Narendra Dalal. Subject manufactures medium frequency induction melting furnaces, induction heating and hardening equipment, single electrode DC arc furnaces, secondary metallurgical equipment like DC ladle refining furnaces, etc. Subject is also into wind power generation. Since its first order of 350-KW Medium frequency induction furnace in Jun 1983, it has installed over 300 induction furnaces allover India and abroad sofar. Subject also has some firsts to its name like design and commission of India's first indigenously made solid state generator of 1200 KW. Subject has set up a sister concern for new products like laser cutting machines for cutting stainless steel to very close tolerances which otherwise is a difficult operation. Subject has received the prestigious 'Dhatu Nayak' award for the year 1997-98 and 1998-99 for indigenous development, manufacture and Commissioning of India's largest Medium Frequency Induction Melting Furnace of 7500 KW/15 Ton capacity for Alloy steel and key contribution to stainless steel and alloy steel industry by developing indiginously developing cost effective equipment for manufacturing of stainless steel through induction furnace route respectively. The Company also supplied India's largest MF Induction Melting Furnace of 20 Tons capacity to M/s Shah Alloys Limited, Ahmedabad. In the year 2000-01 the company accredited with ISO-9001 certificate through RWTUV.

 

OPERATIONS

 

During the year, the Company has achieved a turnover of Rs.20027.000 Millions representing an increase of 19.01% over the previous year turnover of Rs.16827.000 Millions. The Net Profit for the year is Rs.538.000 Millions as against Rs.522.000 Millions of the previous year, showing marginal increase of 2.97%.

 

 

CAPITAL PROJECTS

 

During the year, the Company has successfully commissioned the production of Blast Furnace – II and Ductile Iron Pipe. Alloy Steel Plant is under construction.

 

 

ACQUISITIONS

 

After the successful implementation of the organic growth strategy, the Company has now aggressively earmarked an inorganic growth strategy.

 

During the year, the Company has acquired plant near Baroda for the Transmission Line Tower during March, 2010. This will help forward integration and entry into value added products made out of MS Angles produced by the Company at its plant at Kutch.

 

After the closure of Financial Year 2009-2010, in May, 2010, the Company has acquired 100% shareholding of Shree Ram Electrocast Private Limited, a Company having its Registered Office at Kolkata and manufacturing complex at Siruguppa, Bellary, Karnataka, for Pig Iron with installed capacity of 1,20,000 MT per annum and Power Generation Plant of 2.5 MW.

 

In June, 2010, the Company has acquired 100% shareholding of Hans Ispat Limited, a Kutch – Gujarat based Company having manufacturing facilities for Billet of 84000 TPA, TMT Rolling Mill of 1,20,000 TPA and SS Rolling Mill of 72000 TPA per annum. The Company has also acquired the shareholding in Shree Hans Papers Limited, a subsidiary of Hans Ispat Limited which does not have any operations, except owing land.

 

As a result, all the three Companies mentioned above have become subsidiaries of the Company during the Financial Year 2010-2011.

 

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

 

AN OVERVIEW OF ECONOMY

 

Indian economy also felt the tremors of the economic turmoil in the USA and Europe. The present economic slowdown in the Indian economy is an aftermath of the recession prevailing in almost all big economies of the world. However, the country is still holding its ground in the midst of the current global financial crisis.

 

The commodity prices were highly volatile which has impacted profitability in steel division of the company. As such the industry were facing liquidity crunch and there was considerable slowdown in the real estate and exports.

 

It was a challenging year for both the Central Government and RBI to manage inflation as well as to maintain economic growth. They jointly initiated various steps to boost credit investment and to minimize the impact of  the global  crisis. Braving the global recessionary trends, India  managed  6.7 percent economic  growth  in  2008-09  despite  the  manufacturing  sector recording  dismal performances. A 5.8 percent growth rate during the last quarter of the fiscal, at a time when most developed economies have shrunk, puts India among the top-most growing nations. Displaying signs of economic recovery, the growth of core industries including cement, finished steel, coal and electricity nearly double to 4.3 percent during April, the first month of the current fiscal.

 

 

INDUSTRY STRUCTURE AND DEVELOPMENT

 

ENGINEERING, CAPITAL EQUIPMENT AND PROJECTS DIVISION

 

In last few years Induction furnaces have been used in India for producing steel using scrap and DRI and almost more than 45 % steel is being produced through this route. Higher capacity furnace is becoming more competitive in terms of cost of production and 0.25 MTA plant have been in operation. Induction furnace based steel making route is also getting established in many countries like Bangladesh, Pakistan, Nigeria, Senegal, Kenya, Uganda, Tanzania, Ghana, UAE, Turkey, Iran and other African Countries. India being preferred supplier for auto component, Foundry sector is also growing. Induction heating and hardening is another area which is growing along with auto sector.

 

 

DEVELOPMENTS

 

Induction Melting:

- 40 ton / 14 MW Induction melting furnace already supplied and commissioned, the cost of production is less by about ` 600 / ton compared to 20 ton furnace.

- Efficiency of 10 to 25 ton capacity furnace has been increased; the reduction of energy consumption is to the tune of 25 - 50 units/ton.

- IGBT power supply for foundry furnace up to 1000 KW is developed and supplied having constant power factor of 0.98 and power sharing features.

- Level two and three automation to improve operational efficiency and increase utilization factor up to 92%.

 

Induction Heating:

 

Development of high frequency power supply for pipe welding and surface hardening application.

 

Dynamic power factor correction system and thyristor switched capacitor bank

 

Dynamic power factor correction system being developed by the Company is state of the art FPGA based fast controller which gives fast response time to correct the PF almost instantaneously. First 350 KVAr capacitor is supplied and under operation.

 

De-Phos and De- Sulph in Induction Furnace:

 

Of late since last 3 to 4 years use of Direct Reduced Iron (DRI) has increased to the tune of 70 % to 80%, which has aggravated the issue of higher Phosphorus and Sulfur level in steel produced through Induction Furnace route. First equipment for the De-Phos is supplied and is under commissioning. This will open up new avenue to those who uses induction furnace to produce steel using higher percentage of DRI and new route getting establish to produce quality steel in small size (50,000 to 2,50,000 tons / annum) which is economically competitive to ARC furnace route.

 

 

SPECIAL STEEL DIVISION

 

Steel Industry

 

In the last few years, Indian steel companies have moved up the value chain with better quality products, lower costs of manufacturing and increased production of value-added products. In order to meet specific requirements of key industries, the steel industry over a period has undergone major technological advancements to produce the right quality metal which in turn made significant contribution to overall growth of the industry.

 

In the year 2009-10, the steel production in India was of 65.5 MMT approximately, registering a growth of over 3% over previous year, despite the spillover of recessionary trend. The Indian Steel production has registered a CAGR of 8.3% in the last 2 decades, post the liberalization and reforms including de-licensing, price decontrol, lowering of import restrictions, lowering of duties and abolition of freight equalization.

 

Globally, Asian region plays a dominant role in manufacturing and contributes to 65% of world’s production. As of 2010, Indian manufacturers have a share of almost 10% of Asia’s production.

 

Secondary route in Domestic Steel production

 

In India, the value chain has been redefined with a unique mix of primary and secondary routes (Induction and Arc Furnace) of manufacturing steel. As per the JPC report on ‘Development of Indian Steel Sector since 1991’, the secondary route has lion’s share in the total production of steel in the country. The share of secondary route has progressively increased from a mere 15% in 1991 to over 72% in 2009.

 

Per Capita Consumption of Finished Steel

 

Total domestic consumption of steel (net of exports and imports) increased from 52.4 MMT in 2008-09 to 56.5 MMT in 2009-10. India’s per capita steel consumption has been growing at a CAGR of 5.3% during the last five years. However, per capita consumption is still lower than the global average of 190 kg. This is a clear indication that the domestic demand has still a long way to maturity and will see volume growth in the next few years.

 

Share of Induction route

 

The economics of producing steel through the induction route compares very well and is equally competitive as steel produced through the blast furnace route. The SME sector in India has been able to participate in the steel production primarily on account of the viability of the induction route. The initial investment required and time to commence operations is very less as compared to the primary route or the electric arc route.

 

According to industry estimates, out of the total steel produced in India, almost half can be attributed to the induction route of steel-making. Given the unique dynamics, Electrotherm is positioned well in the market, both for induction furnaces as well as its steel products, given its rich experience and expertise in engineering and metallurgy.

 

With the introduction of better technology and building of larger capacity induction furnaces, the share of induction route is expected to grow. In absolute terms, the induction route is expected to increase given the increase in total steel production in the country.

 

DI Pipe Industry

 

Domestic DI pipe manufacturing capacity stood at about 0.9 MMT during year 2009-10. Present capacity utilisation is about 80-85% in the industry.

 

Industry is dominated by organised players with about 88% production share. It is to be noted that almost all major manufacturers have backward integration with in-house pig iron manufacturing facility.

 

Domestic DI pipe demand grew at a CAGR of about 12% during the quinquennium 2005-10 and stood at over 0.7 MMT during year 2010. In addition, there is large potential demand that is to be serviced.

 

The price realisation of DI pipes witnessed a growth of about 8% during years 2006 to 2010. Prices of DI pipes were in the range of ` 43,000 to ` 50,000 during year 2009-10 with an average realisation of around ` 46000. Prices of DI pipes depend on basic raw material prices such as Pig Iron and prevailing demand-supply scenario for DI pipes.

 

The Company is a manufacturer of DI Pipe, with expansion of capacity during the Year and has plans to augment this capacity further.

 

Developments

 

The Company during the Financial Year 2009-10 appointed ECS (Eicher Consultancy Services, now a subsidiary of Price Waterhouse Coopers) to help it with productivity and EBITA improvements. Various projects were taken up during the year in the area of SMS, TMT Mill and Structural Mill to improve the productivity and optimize cost. The results of the same will be visible in the Financial Year 2010-11.

 

The Company is a manufacturer of DI Pipe, with expansion of capacity during the Year and has plans to augment this capacity further. The Company has commissioned its 128 mł Blast Furnace and new facility for DI Pipe production of higher dia up-to 1100 mm. The Company also got BIS approval for higher sizes of DI Pipes up-to 1000 mm. The Marketing and Distribution Network for DIP was expanded by opening offices across 8 different states in the Country and manning them with experienced sales people. A new cooling tower has been commissioned to improve the performance of 30 MW Power Plant.

 

The Company has obtained the power grid approval for angles; with this approval in place, the company will look to increase the production of angles for Transmission Line Tower (TLT) applications. The Company has also received BIS approval for its MS Billets which has improved its realization in the Gujarat market. With strong branding of Electro TMT plus bars (Sariya), the price realizations are slowly improving and the product has been approved for supply to various large Government and private projects.

 

 

ELECTRIC VEHICLE DIVISION

 

The Company had a tough time last year, wherein the Electric Vehicle market shrunk by around 40%. Since the market was small, with large number of small players who were their to make fast gains, 95% of them have exited the market which is getting consolidated.

 

The situation is now changing, with the efforts of medium and large players who are investing in the market. All large players have high-speed vehicles which is seen as replacement of existing gasoline scooters. The Company has maintained its technological leadership in the category with launch of its high power scooter YO EXL. The product is catching the imagination of the customer as it meet’s the customers’ expectation of a typical two wheeler.

 

The Company is also nearing completion of their electric three wheeler which got very positive response from the prospective customers during the Auto Expo held in Delhi this year. This product will be launched for goods and passenger application by fourth quarter of 2011. Considering the value an Electric Vehicle has for the environment, a few forward looking State Governments have given very positive support to Electric Vehicles by way of exemption from VAT and Road tax which will also give boost to demand.

 

 

CONTINGENT LIABILITIES:- (AS ON 31.03.2010)

 

The Company is liable for following contingent liabilities:-

 

(i) Disputed Statutory Claims/Levies for which the company has preferred appeal in respect of Income Tax liability (excluding interest leviable, if any) of Rs.1.420 Millions.

 

(ii) Guarantees / Counter Guarantees (including un-utilized Letters of Credit) issued Rs.362.490 Millions.

 

(iii) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.58.730 Millions.

 

(iv)The company is contingently liable for the pending disputed labour and other matters, amount is Rs.2.280 Millions.

 

(v) The company has executed Legal Undertaking Bond to pay Central Excise Duty (Terminal Excise Duty), levies and liquidated damages payable, if any, in respect of imported and indigenous capital goods and stores and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. In this regard aggregate duty liability amount of Rs.299.570 Millions as at March 31, 2010. Against these, exports amounting to Rs.2396.560 Millions will have to be made within next 8 years from the date of issue of license.

 

 

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31ST MARCH 2011.

 

(RS. IN MILLIONS)

 

SN

Particulars

Standalone

Year Ended

31.03.2011

 

 

Audited

1

Income

 

 

a) Net Sales / Income from Operations

22968.930

 

b) Other Operating Income

0.000

 

Total Income

22968.930

 

 

 

2

Expenditure

 

 

a) Increase/(decrease) in stock in trade and work in process

(4,827.380)

 

b) Consumption of Raw materials

19797.900

 

c) Purchase of traded goods

0.000

 

d) Employee Cost

645.930

 

e) Depreciation

1077.770

 

f) Other Expenditure

4085.580

 

g) Total Expenditure

20779.800

 

 

 

3

Profit from Operations before Other Income, Interest and Exceptional Items (1-2)

2189.130

4

Other Income

145.300

5

Profit Before Interest and Exceptional Items (3+4)

2334.430

6

Interest

1924.820

7

Profit after Interest but before Exceptional Items (5-6)

409.610

8

Exceptional Items

0.000

9

Profit from ordinary activities before tax (7-8)

409.610

 

 

 

10

Provision for tax

 

 

(a) Provision for Current tax

76.140

 

(b) Provision for Deferred Tax

50.630

 

Total Tax

126.770

 

 

 

11

Net Profit from Ordinary activities after Tax (9-10)

282.840

12

Minority Interest

0.000

13

Extra Ordinary Items f Net of Tax Expense)

5.420

14

Net Profit for the period (11-12)

288.260

 

 

 

15

Paid up Equity Share Capital (Face value of Rs.10 each)

114.760

16

Reserves excluding revaluation reserves

7059.890

 

 

 

17

Earning per share (not annualized)

 

 

(a) Before extra ordinary items

 

 

(i) Basic

24.65

 

(ii) Diluted

24.65

 

 

 

 

(b) After extra ordinary items

 

 

(i) Basic

25.12

 

(ii) Diluted

25.12

 

 

 

18

Public Share holding

 

 

No of Shares

7708299

 

% of Share holding

67.17

 

 

 

 

Promoters and Promoter group shareholding

 

 

 

(a) Pledged / Encumbered

 

 

Number of shares

300000

 

Percentage of shares (as a % of the total shareholding of promoter and promoter group)

7.96

 

Percentage of shares (as a % of the total share capital of the company)

2.61

 

 

 

 

(b) Non-encumbered

 

 

Number of shares

3468075

 

Percentage of shares (as a % of the total shareholding of promoter and promoter group)

92.04

 

Percentage of shares (as a % of the total share capital of the company)

30.22

 

 

SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

 

(RS. IN MILLIONS)

 

SN

Particulars

Standalone

Year Ended

31.03.2011

 

 

Audited

 

 

 

1

Segment Revenue

 

a

Engineering and Projects Division

2589.980

b

Special Steel Division

20238.800

c

Electric Vehicle Division

252.000

d

Others

0.000

 

Total

23080.780

 

 

 

 

Less: Inter Segment Revenue

111.850

 

Net Sales

22968.930

 

 

 

2

Segment Profit Before Interest and Tax

 

a

Engineering and Projects Division

280.540

b

Special Steel Division

2189.520

c

Electric Vehicle Division

(135.630)

d

Others

--

 

Total

2334.430

 

 

 

 

Less: (i) Interest

1924.820

 

Total Profit Before Tax

409.610

 

 

 

3

Capital employed (Segment Assets less Segment Liabilities)

 

a

Engineering and Protects Division

1428.520

b

Special Steel Division

15102.040

c

Electric Vehicle Division

709.550

d

Others

0.000

 

 

 

 

Total

17240.110

 

NOTE:

 

1.       The above audited financial results were reviewed by the audit committee. The board of directors at its meeting held on May 30 2011 had approved the above results and its release

 

2.       There was no complaint from the investors pending as on January 1, 2011. During the quarter the company has received two complaints, which were resolved and no complaint was pending as on Mar 31, 2011.

 

3.       Figures has been regrouped / re classified wherever necessary.

 

 

STATEMENT OF ASSETS AND LIABILITIES AS ON 31.03.2011

 

(RS. IN MILLIONS)

 

PARTICULARS

Year Ended

31/03/2011

(Audited)

SHARE HOLDER'S FUNDS:

 

(a) Capital

234.760

(b) Reserve and Surplus

7059.900

 

 

Loan Fund

22642.610

Deferred Tax Liability

865.130

Minority Interest

0.000

 

 

TOTAL

30802.400

 

 

Fixed Assets

18066.720

 

 

Goodwill

0.000

 

 

Investments

1083.870

 

 

Current Assets, Loans and Advances

 

(a) Inventories

8487.510

(b) Sundry Debtors

4820.540

(c) Cash and Bank Balances

1175.510

(d) Loans and advances

1989.020

 

 

Less: Current Liabilities and Provisions

 

(a) Liabilities

5099.110

(b) Provisions

63.860

 

 

Miscellaneous Expenditure (Not written off or adjusted)

342.210

 

 

TOTAL

30802.400

 

 

FIXED ASSETS:

 

·         Free Hold Land

·         Leasehold Land

·         Building

·         Plant and Machinery

·         Furniture and Fixtures

·         Vehicles

 

 

WEBSITE DETAILS:

 

PROFILE:


Subject has been engineering metal melting industry since 1983. In Electrotherm from inception, R and D has been their core competency with a common focus on developing and adopting technologies to customize customer needs making it a key driver in their Multi-Divisional growth story. Electrotherm is the only Indian company with indigenously developed world class technologies of global scale. Their team focused with a Customer First attitude believes technology should be right-sized, with the process designed to minimize waste and selected to enhance product performance with an embedded attitude of customizing engineering and metallurgical solutions to customers that made Electrotherm grow into one of the market leaders in the metal melting industries in India and globally. Electrotherm today is a Multi-divisional ISO: 900:2000 certified global Company holding a 2,500,000 kW market share in the metal melting industry globally. Electrotherm is a research driven company with an appreciating asset in intellectual capital its primary source of their multi-divisional growth story. The company has developed robust processes with inbuilt learning and continuous improvements in every job performed. This develops effective product lifecycle management and is the foundation of their product innovations to ensure their customers achieve their top line growth. Engineering innovations for the global metal melting industry has been possible due to their focused 2,607 employees with a State-of-the-art manufacturing facilities and R and D centre manufactures a wide spectrum of products for the metal melting industry and electric vehicles and are manufactured in four different divisions of the company. Their products continually undergone research and development leading to innovations of global scale to suit the changing global environment or the customer requirements. The Customer Focus of each division in manufacturing is in tandem with the R and D to ensure their customers achieve their objectives for top line growth.


The major critical customized parts are manufactured in house under stringent quality control management and the finished products tested to withstand laid out quality parameters with Just-In-Time delivery management principle to prevent customer installation and operational cost overruns make achieving deadlines a reality. The real responsibility at Electrotherm is to care for the installed equipments work with a zero down time objective. This principle of servicing their customers any time anywhere has made them a truly global company. They cater to the domestic market while exports form major component of their turnover. They service the global markets around the world with specific focus upon Middle East, Turkey, Pakistan, Bangladesh and Africa while catering to 31 countries around the world. Electrotherm commands more than 50% market share in induction melting equipments used by the engineering and automotive industry in India. Electrotherm is a truly global company taking social responsibility in its stride as 'No engines means no pollution' says Mr. Mukesh Bhandari, Chairman and Chief Technology Officer, Subject A socially responsible Corporate Professional, who dreams to electrify the automotive and power sector-major polluters of the environment. Electrotherm has taken the first step in committing to making a pollution free world by introducing the YObyke electric scooters and setting up the wind farms and solar power plants and is also working upon to introduce electric three wheelers and hybrid bus.

 

 

HISTORY:

 

Story of Performance


Before Electrotherm was a company, it was a dream. This dream came true in 1983 with passion, persistence and performance of promoters. The mission was simple: to serve Indian Steel Industry by providing cutting-edge technology and pass on the benefits to the customers.


The Company ventured into manufacturing of equipments for melting metals at a time when capability of multinationals was accepted as a norm in India. Soon, Electrotherm envisioned the gap in technology and took upon them the task of indigenous development of Medium Frequency Induction Melting Furnace at a time when these furnaces were imported into India at exorbitant prices. But after Electrotherm’s inception, multinationals were compelled to open local assembly shops and offer reasonable terms and better services. The result was more convenience for the customers.


Soon, Electrotherm envisioned the gap in technology and took upon them the task of indigenous development of Medium Frequency Induction Melting Furnace at a time when these furnaces were imported into India at exorbitant prices. Electrotherm also took upon servicing induction furnaces in far-flung areas of the country.

Today, approximately over 25 million MT of steel is melted in India on Electrotherm furnaces. Electrotherm also has the distinction of manufacturing 3T to 40T Medium Frequency Induction Melting Furnaces for first time in the country. Electrotherm (India) Limited Factory - Electrotherm India Limited, Ahmedabad. ET Group / Corporate Profile / Success Story / History

 

 

MILESTONE:

 

1983

ELECTROTHERM received its - first order - of 350 KW/ 500 KG.

 

1984

Designed and developed India’s first Indigenous Solid State Generator of 1200 KW.

 

1989

ELECTROTHERM enters GLOBAL MARKET – Received orders from Ethiopia and Bangladesh.

 

1992

Developed and commissioned India’s first Integrated Stainless Steel manufacturing line incorporating MF Induction Melting Furnace, Metal Refining Konverter and DC Ladle Refining Furnace at Viraj Alloys Limited

 

1995

Developed and Commissioned a 12MT MF Induction Melting Furnace, 15 MT Metal Refining Konverter and 18 MT Twin Electrode DC Ladle Refining Furnace at Stainless India Jodhpur, a project of Mukand Limited

 

1995

Developed and commissioned the then Largest M.F. Induction Melting Furnace of the country at Shah Alloys Limited (7500KW /15 MT).

 

1996

Developed and Commissioned India’s First Indigenous DC Arc Furnace of 22 MT.

 

1997

Supplied three large MF Induction Melting Furnaces with DC Ladle Refining Furnace for world’s largest billet manufacturing facility through the route of Induction Melting Furnace at M/s Vishwas Steels Limited, Goa.

 

1999

Developed and Commissioned Bent Rail Hardening System at Digvijay Steel Industries, Batala.

 

1999

Developed and Commissioned India’s largest M.F. Induction Melting Furnace of 20 MT at Shah Alloys Limited

 

2001

Developed and Commissioned a 50MT Metal Refining Konverter at Shah Alloys Limited, Ahmedabad.

 

2004

Developed and Commissioned India’s largest M.F. Induction Melting Furnace of 25 MT at Bhagyalaxmi Steels, Aurangabad.

 

2005

AMA-Outstanding Entrepreneur Of The Year Award – 2005” in recognition of the contribution to industrial developments in India

 

2007

Automotive Product of the Year (Yo Bykes)

 

2008

Developed and Commissioned India’s largest Induction Melting Furnace of 30 T for Kalika Steels, Aurangabad

 

2009

Developed India’s largest Induction Melting Furnace of 40 T for Mahalaxmi Steels, Aurangabad

 

 

ACHIEVEMENTS

 

Awards and Accolades

 
Hard work, passion, talent and performance together mean only one thing– Success. They have received several National Awards

 

•   IMM-Binatone Award

•   National Award Udyog Patra

•   IEEMA Award

•   Vasvik Research Award and Dhatu Nayak Award for designing

•   State-of-the-art India’s largest MF Induction Furnace for 20 MT

 

 

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                              None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.44.59

UK Pound

1

Rs.71.07

Euro

1

Rs.62.40

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

6

--LEVERAGE

1~10

5

--RESERVES

1~10

6

--CREDIT LINES

1~10

6

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

52

 

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

 

-

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.