MIRA
INFORM REPORT
|
Report Date : |
15.07.2011 |
IDENTIFICATION DETAILS
|
Name : |
JAI BALAJI INDUSTRIES LIMITED (w.e.f. 23.07.2007) |
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Formerly Known as : |
JAI BALAJI SPONGE LIMITED |
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Registered Office : |
5, |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
01.07.1999 |
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Com. Reg. No.: |
21-089755 |
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Capital
Investment / Paid-up Capital : |
Rs.637.702 Millions |
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CIN No.: [Company
Identification No.] |
L27102WB1999PLC089755 |
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Legal Form : |
Public Limited Liability Company. Company’s Shares are listed on the
stock Exchanges |
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Line of Business : |
Manufacturer of Iron and Steel |
RATING & COMMENTS
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MIRA’s Rating : |
A (61) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
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Maximum Credit Limit : |
USD 36000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established company having fine track. Financial
positions of the company appears to be sound. 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 for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
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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 |
LOCATIONS
|
Registered Office : |
5, |
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Tel. No.: |
91-33-2248-8173/9808 |
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Fax No.: |
91-33-2243-0021 |
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E-Mail : |
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Website : |
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Factory 1: |
Ranigunj G/1, Mangalpur Industrial Complex, Post– Baktarnagar,
District : Burdwan, West Bengal – 713347, |
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Factory 2: |
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Factory 3: |
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Factory 4: |
Industrial Growth, Centre, |
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Marketing Office: |
Located At:
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DIRECTORS
As on 31.03.2010
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Name : |
Mr. Aditya Jajodia |
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Designation : |
Chairman and Managing Director |
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Date of Birth/Age : |
39 Years |
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Qualification : |
B. Com |
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Experience : |
16 Years |
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Name : |
Mr. Sanjiv Jajodia |
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Designation : |
Whole-time Director |
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Date of Birth/Age : |
46 Years |
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Qualification : |
B. Com |
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Name : |
Mr. Rajiv Jojodia |
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Designation : |
Director |
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Date of Birth/Age : |
44 Years |
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Qualification : |
B. Com |
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Name : |
Mr. Gourav Jojodia |
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Designation : |
Director |
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Date of Birth/Age : |
29 Years |
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Qualification : |
B. Com |
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Name : |
Mr. Ashim Kumar Mukherjee |
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Designation : |
Director |
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Name : |
Mr. Shyam Bahadur Singh |
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Designation : |
Director |
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Name : |
Mr. Amit Kumar Majumdar |
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Designation : |
Director |
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Name : |
Mr. Satish Chander Gupta |
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Designation : |
Director |
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Name : |
Mr. Angshuman Ghatak |
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Designation : |
Director |
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Name : |
Mr. Krishnava S. Dutt |
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Designation : |
Director |
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Name : |
Mr. Rajeev Kalra |
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Designation : |
Director |
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Name : |
Mr. Kumar Krishnan Iyer |
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Designation : |
Director |
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Name : |
Mr. Supratim Banerjee |
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Designation : |
Director |
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Name : |
Mr. Ajay Tandon |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Raj Kumar Sharma |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Ajay Kumar Tantia |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2011
|
Names of Shareholders |
Total
No. of Shares |
Total
Shareholding as a % of total No. of Shares |
|
(A) Shareholding of Promoter and Promoter Group |
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9,076,862 |
14.23 |
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23,290,723 |
36.52 |
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32,367,585 |
50.75 |
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Total shareholding of Promoter and Promoter Group (A) |
32,367,585 |
50.75 |
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(B) Public Shareholding |
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1,638,783 |
2.57 |
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8,399,220 |
13.17 |
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10,038,003 |
15.74 |
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5,250,234 |
8.23 |
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1,686,241 |
2.64 |
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5,785,299 |
2.64 |
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8,359,000 |
13.11 |
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54,453 |
0.09 |
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8,304,547 |
13.02 |
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21,080,774 |
33.51 |
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Total Public shareholding (B) |
31,413,901 |
49.25 |
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Total (A)+(B) |
63,781,486 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 Million BUSINESS DETAILS
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Line of Business : |
Manufacturer of Iron and Steel |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2010)
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Sponge Iron |
Mt |
345000 |
287180 |
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Pig Iron |
Mt |
509250 |
427520 |
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Steel Bars / Rods |
Mt |
260000 |
183769 |
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Billet / MS Ingot |
Mt |
906320 |
510922 |
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Power |
|
71.10 (MW/Hr.) |
352654180 (Kwh) |
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Ferro Alloys |
Mt |
106618 |
51290 |
GENERAL INFORMATION
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Suppliers : |
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Bankers : |
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Facilities : |
NOTE : 1.Term Loans from banks and financial institutions are secured as follows:- (a) Rs.7268.385 millions (Rs.6781.271 millions ) by way of equitable mortgage created/to be created on the immovable assets and first charge on the fixed assets pertaining to the Company’s units at Ranigunje and Durgapur in the State of West Bengal, both present and future, except to the extent indicated in Note 1(e) and 3 below, lien on fixed deposits of Rs.14.500 millions (Rs.14.500 millions ) with banks and second charge on the entire current assets, both present and future, pertaining to the Company’s above units at Ranigunje and Durgapur.
(b) Rs.487.300 millions (Rs.604.216 millions) by way of equitable mortgage created / to be created on the immovable assets and first charge on the fixed assets of the Company’s Durg Unit, both present and future. (c) Rs.2037.461 millions (Rs.1011.284 millions) by way of subservient charge on the entire fixed and current assets of the Company.
(d) Rs.16.030 millions (Rs.12.377 millions) against lien on the subsidies receivable from Government of West Bengal.
(e) Rs.120.855 millions (Rs.198.520 millions) against Railway Rakes procurred and given to Railway under the Wagon Investment Scheme. 2. Working Capital facilities from banks are secured as follows:- (a) Rs.5597.144 millions (Rs.6238.186 millions ) by hypothecation of all current asset pertaining to the Company’s units at Ranigunje and Durgapur in the State of West Bengal, including raw materials, finished goods and book debts, both present and future and second charge on the fixed assets, both present and future, pertaining to the Company’s above units at Ranigunje and Durgapur. (b) Rs.250.503 millions (Rs.205.856 millions ) by hypothecation of all current assets including raw materials, finished goods and book debts, both present and future and second charge on the fixed assets of the Company’s Durg unit, both present and future. 3. Deferred Payment Credits are secured by hypothecation of the assets acquired under the respective agreements. 4. All the loans as referred to above (excluding Rs.16.030 millions from financial institutions and Rs.2.426 millions related to deferred payment credit) are further secured by the personal guarantee of certain promoter directors of the Company and loans aggregating to Rs 2220.928 millions were further secured by pledge of 1,395,600 equity shares of the Company held by the promoters, which have since been released. 5. Long term loans and Deferred Payment Credits include
Rs.2017.175 millions (Rs.1549.611 millions) payable within one year. |
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Financial Institution: |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
S. R. Batliboi and Company Chartered Accountants |
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Address : |
22, |
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Associates/Subsidiaries : |
Nilachal Iron and Power Limited (NIPL) |
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Joint Venture
Companies: |
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Joint Venture Partner
/ Co-Ventures: |
Bhushan Power and Steel Limited (BPSL) |
CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
101000000 |
Equity Shares |
Rs.10/- each |
Rs.1010.000 Millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
63781486 |
Equity Shares |
Rs.10/- each |
Rs.637.815
Millions |
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Less: Call in Arrear |
|
Rs.0.113
Million |
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Total |
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Rs.637.702 Millions |
Note: Out of the above
22,000,000 equity shares of Rs. 10 /- each were issued for consideration other
than cash in earlier years.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
637.702 |
471.147 |
471.147 |
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2] Share Application Money |
0.000 |
617.841 |
617.841 |
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3] Reserves & Surplus |
8392.369 |
3071.844 |
3054.113 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
9030.071 |
4160.832 |
4143.101 |
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LOAN FUNDS |
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1] Secured Loans |
15848.028 |
15135.397 |
10918.926 |
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2] Unsecured Loans |
73.467 |
2801.024 |
3379.485 |
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TOTAL BORROWING |
15921.495 |
17936.421 |
14298.411 |
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DEFERRED TAX LIABILITIES |
922.291 |
748.188 |
710.124 |
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TOTAL |
25873.857 |
22845.441 |
19151.636 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
11931.450 |
11988.516 |
8305.958 |
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Capital work-in-progress |
6163.806 |
3169.315 |
2950.995 |
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INVESTMENT |
820.158 |
516.215 |
506.353 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
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Inventories |
4201.893
|
4553.551 |
4016.396 |
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Sundry Debtors |
3375.763
|
2590.900 |
2055.614 |
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Cash & Bank Balances |
206.664
|
197.749 |
210.065 |
|
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Other Current Assets |
798.142
|
483.534 |
0.000 |
|
|
Loans & Advances |
2094.754
|
2491.808 |
3846.989 |
|
Total
Current Assets |
10677.216
|
10317.542 |
10129.064 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
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|
Sundry Creditors |
2414.574
|
2482.761 |
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Other Current Liabilities |
1229.976
|
620.233 |
2618.091 |
|
|
Provisions |
74.223
|
43.153 |
122.643 |
|
Total
Current Liabilities |
3718.773
|
3146.147 |
2740.734 |
|
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Net Current Assets |
6958.443
|
7171.395 |
7388.330 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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|
|
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|
|
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TOTAL |
25873.857 |
22845.441 |
19151.636 |
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PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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SALES |
|
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|
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Income |
19143.845 |
16894.053 |
13220.681 |
|
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Other Income |
258.976 |
284.189 |
565.204 |
|
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TOTAL (A) |
19402.821 |
17178.242 |
13785.885 |
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Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Materials Consumed |
12696.696 |
11442.852 |
6769.229 |
|
|
|
Purchase of Trading Goods |
5.950 |
720.069 |
2564.479 |
|
|
|
Manufacturing Expenses |
3420.325 |
2237.819 |
1469.551 |
|
|
|
Personnel Cost |
443.207 |
302.144 |
177.608 |
|
|
|
Selling, Distribution and Administrative Expenses |
380.474 |
531.260 |
455.857 |
|
|
|
Prior Period Expenditure (Net) |
7.013 |
6.774 |
9.517 |
|
|
|
Transfer from Capital Reserve |
0.000 |
(2.104) |
0.000 |
|
|
|
(Increase) / Decrease in Stocks |
(167.544) |
135.943 |
132.667 |
|
|
|
(Increase)/Decrease in Excise Duty and Cess on Stocks |
4.471 |
(79.232) |
(690.155) |
|
|
|
TOTAL (B) |
16790.592 |
15295.525 |
10888.753 |
|
|
|
|
|
|
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Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
2612.229 |
1882.717 |
2897.132 |
|
|
|
|
|
|
|
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|
Less |
FINANCIAL
EXPENSES (D) |
1427.065 |
1305.633 |
1101.681 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1185.164 |
577.084 |
1795.451 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
692.895 |
510.041 |
433.517 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
492.269 |
67.043 |
1361.934 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
174.184 |
54.231 |
173.204 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
318.085 |
12.812 |
1188.730 |
|
|
|
|
|
|
|
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|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1388.354 |
1401.087 |
1267.494 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend |
25.513 |
22.194 |
47.127 |
|
|
|
Transfer to General Reserve |
0.000 |
0.000 |
1000.000 |
|
|
|
Tax on Dividend |
3.657 |
3.351 |
8.010 |
|
|
BALANCE CARRIED
TO THE B/S |
1677.269 |
1388.354 |
1401.087 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN FOREIGN
CURRENCY |
536.796 |
573.622 |
31.768 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
1701.705 |
4643.732 |
1457.360 |
|
|
|
Stores & Spares |
99.219 |
7.132 |
19.389 |
|
|
|
Capital Goods |
347.933 |
462.727 |
309.838 |
|
|
TOTAL IMPORTS |
2148.857 |
5113.591 |
1786.587 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share Basic (Rs.) |
5.66 |
0.27 |
25.23 |
|
|
|
Earnings Per
Share Diluted (Rs.) |
5.33 |
0.22 |
24.37 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
4143.970 |
4953.570 |
5905.070 |
|
Total Expenditure |
3524.890 |
4291.910 |
5009.880 |
|
PBIDT (Excl OI) |
619.080 |
661.660 |
895.190 |
|
Other Income |
14.850 |
2.620 |
4.430 |
|
Operating Profit |
633.930 |
664.280 |
899.620 |
|
Interest |
299.430 |
340.910 |
378.9300 |
|
PBDT |
334.500 |
323.370 |
520.690 |
|
Depreciation |
178.250 |
186.590 |
223.110 |
|
Profit Before Tax |
156.250 |
136.790 |
297.5800 |
|
Tax |
52.220 |
20.520 |
99.030 |
|
Profit After Tax |
104.030 |
116.270 |
198.550 |
|
Net Profit |
104.030 |
116.270 |
198.550 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
1.64
|
0.07 |
8.62 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
2.57
|
0.40 |
10.30 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
2.18
|
0.30 |
7.00 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.05
|
0.02 |
0.33 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.17
|
5.07 |
4.11 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.87
|
3.28 |
3.70 |
LOCAL AGENCY FURTHER INFORMATION
COMPANY HISTORY:
Subject, the flagship company of Jai Balaji Group is one of the largest
steel producers in the private sector in
Operating Results
During the year, the Company
witnessed a robust growth in sales and profit figures. It emerged stronger out
of the global economic downturn and delivered healthy profit growth for the
year along with improvement in revenue amidst challenging and volatile market
conditions. During the year, the total revenue of the Company was Rs.19402.821
millions , registering an increase of 13% from Rs.17178.242 millions in the financial year 2008-09. The EBIDTA for
the year is Rs. 2612.229 millions as
compared to Rs.1880.613 millions for the
year 2008-09 representing an increase of 39%. The net profit for the year is
Rs. 318.085 millions against Rs.12.812
millions in the previous year. Despite
high inflationary and cost pressures throughout the year, the Company capitalised on every available
opportunity coupled with a robust marketing strategy to exploit the full
industry potential, besides making efforts towards cost reduction and improved
efficiency at the plant level which enable the Company to grow reasonably well.
SUBSIDIARY
The Company has one wholly owned
subsidiary namely, Nilachal Iron and
Power Limited having a sponge iron plant of 1,05,000 MT pa capacity at Ratanpur,
Kandra-Chandil Road, Dist. Saraikela Kharsawan, Pin - 832 402, Jharkhand. The
Audited Balance Sheet and Profit Loss
account along with the respective Reports of the Board of Directors’ and the
Auditors’ Report thereon of the said subsidiary for the financial year ended
31st March, 2010 are attached as required under Section 212 of the Companies
Act, 1956.
JOINT VENTURES
Andal East Coal Company Private Limited In terms of allocation of Andal
East non-coking coal block in the State of West Bengal by the Ministry of Coal,
Government of India to the Company jointly with Bhushan Steel Limited and
Rashmi Cement Limited, the Company has entered into a Joint Venture Agreement
with them to acquire 32.79% stake in coal block. A joint venture company ‘Andal
East Coal Company Private Limited’ has been formed with the Registrar of
Companies, West Bengal, in which the Company along with M/s Bhushan Steel
Limited and
M/s Rashmi Cement Limited are venture partners.
ROHNE COAL COMPANY
PRIVATE LIMITED
A Joint Venture Company ‘Rohne Coal Company Private Limited’ was formed
in 2008-09 with the Registrar of Companies, NCT of Delhi and Haryana, in which the Company along with M/s
JSW Steel Limited and M/s Bhushan Power
and Steel Limited are venture partners.
The Company has 6.90% stake in the coal
block. Both the Joint Venture Companies are in the process of setting up coal
mining facilities at respective coal blocks.
FUTURE OUTLOOK
Indian steel industry has just come out of the slowdown that affected its
performance during 2008-09. Relatively 2009 ended on a better and encouraging
note with an overall improvement of economic situation through its GDP
data, which showed a robust 7.9 growth during July-September 2009-10,
further bolstering the idea that the demand side is back on stable footing.
Globally also there are signs of improvement in economic conditions and firming
up of demand and prices. The macro economic policies of the government with
continuous emphasis on infrastructure activities and buoyant Indian Economy
have cast a good spell for the industry. The Government has
sustained its trust on the development of infrastructure, which will
lead to derived demand for steel. The
Company aims to grab these positive developments for growth. There is
constant endeavour by the Company for
increasing the share in existing markets and enter new markets.
MANAGEMENT
DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE
AND DEVELOPMENT
GLOBAL OVERVIEW
The global economy after witnessing the severe downturn is on the path
of recovery. According to IMF estimates, the world output which declined by 0.6
percent in 2009 from the previous levels of 3 per cent of 2008 is expected
to grow by 4.2 percent in 2010 and further by 4.3 percent in 2011. The
world real GDP growth reached about 3 Ľ
percent on an annualized basis during second quarter of 2009 and rose to
over 4 ˝ percent during second half of the year. IMF estimates suggests that
while advanced economies are expected to expand by 2Ľ percent and 2˝ percent in
2010 and 2011, respectively, after
witnessing a more than 3 percent decline in 2009, the emerging and developing
economies are expected to grow by over 6 Ľ percent in 2010-11 from a modest 2 ˝
percent achieved in 2009. On a whole the revival of global economies hold key
to the revival of steel industry, which has been one of the hardest hit by the
global financial turmoil. The global steel industry which has flat and long exhibited different growth pattern. This
is because, though steel demand is dependent on economic activities the
consumption pattern differs from region to region. Thus auto and shipbuilding
consume a significant amount of steel in
Despite volatilities in international steel market, a significant
prospect of growth is expected during 2010 and 2011. According to MEPS world
steel output is predicted to reach 1395 million tones in 2010, an increase of
14% over previous year and a further expansion of 3.9 percent are anticipated
in 2011.
INDIAN OVERVIEW
The Indian economy after witnessing phase of deceleration in GDP growth
for five consecutive quarters, witnessed a notable turnaround with the GDP
registering growth of 6.1% during April- June, 2009 quarter as against 5.8% in
January-March, 2009 quarter. Even though the growth rate of 6.1% achieved
during first quarter of the year was significantly lower than 9% plus growth
witnessed during premeltdown period, however it was an incipient sign of
recovery in the economy. The rise in GDP growth was primarily due to the impact
of increase in government spending and the improved performance of industrial
sector. As a result the overall GDP for the year 2009-10 was 7.2 percent as
against 6.7% growth in 2008-09. The manufacturing sector which remained subdued
in the first quarter of current fiscal with the level of growth of IIP reduced
to 3.4 percent, witnessed improvement thereafter and IIP increased to around
9.3% in 2nd quarter of the year under review. However though the manufacturing
sector has grown at the rate of 8.9 percent in 2009-10, the growth in major
industrial groups has been a mixed bag. On one hand we find strong growth in
sectors such as automobiles, consumer durables and on the other it is observed
that there has been negative growth in sectors such as capital goods,
non-durables. As such it is still too early to assume that the manufacturing
sector and the economy has recovered fully from the effects of the meltdown.
Following the trends of the economy the Indian steel industry which
witnessed significant slowdown post meltdown gloom cast in 2008, showed signs
of improvement in demand and production. According to report of Ministry of
Steel during April-December 2009-10 crude steel production registered growth of
4 percent and was 45.775 million tonne. In case of finished steel (alloy +
non-alloy) during April- December, 2009 the production for sale grew by 3.2
percent and was at 43.849 million tone. The steel consumption during the said
period also grew by 7.8 percent and was at 40.997 million tonne. As a result of
increase in consumption, steel imports increased by 16.6 percent and was about
5.21 million tonne during the said period. Further during the last quarter of
the year the demand and production improved further and on a whole steel
production increased by 4.2% to 60 million tones and steel consumption
increased by 8%. The domestic demand surged 23% growth in steel imports to 7.2
million tonne for the fiscal even as exports declined by almost a third as
global demand remained subdued.
However even though the demand for steel saw improvements the year has
been a cautious time for the industry. One of the most worrying factors has
been the rise in input costs.
part of the year and reports are that NMDC the country’s largest miner
has announced provisional price hike of 54- 58%. The rise in input costs are a
major concern for the industry, as the user sectors of steel are still at a
very nascent stage of recovery from the downturn of meltdown phase and the
steel manufacturers are finding it difficult to increase prices in wake of
increased input costs.
One notable fact of the Indian steel industry remains that despite the
present turmoil of fluctuating demand, realization and input cost the long term
scenario remains robust. The industry has demonstrated that it has the inherent
strength to respond to the challenges of highs and lows of business cycle as a
result of which domestic and foreign investors have shown a great deal of
interest in setting up steel capacities in the Country.
OPPORTUNITIES
- A total of
US$ 494.33 billion investment is envisaged in the 11th Five Year
Plan in infrastructure such as electricity, roads, telecom, railways,
irrigation, water supply, ports, airports, storage, gas which will drive
demand for steel.
- Given the
current stage of economic development, the planners in
- The Indian
market has a huge untapped potential, as the per capita consumption of
steel in
- The industry
enjoys the benefit of sustained domestic demand fueled by growth in
construction, automobile, auto components, consumer durables, oil and gas,
railways and infrastructure sector.
- Growth of
mining sector of over 8% and improved coal production during the year
being 365.09 Mt recording a growth of 8.5% are signs of favorable
prospects for the industry as it implies sustainable raw material
availability.
- According to
a report of Technical Group there will be shortage of 26.53 million houses
during the Eleventh five year Plan, which signifies a huge demand
potential for construction steel.
OUTLOOK
According to D and B, India’s economic growth would pick-up pace
gradually as the private consumption and investment demand gathers momentum and
supports the economic activity even when stimulus provided by the government is
being withdrawn and RBI tightens its monetary policy. D and B expects Index of Industrial Production to
have surged by 10.2% during FY10 as compared to 2.87% in FY09. D and B further expects the growth of industrial
production to be further broad based during FY11 at 10.3% on account of
substantial improvement in domestic demand, recovery in demand for Indian
exports, increase in investment activity and increased thrust of the government
on infrastructure projects. According to IMF India’s GDP growth projected to be
8 ľ percent in 2010 and 8 ˝ percent in 2011, supported by rising private
demand. As such as in
The Indian steel demand is going to rise continuously as the user sectors
are poised for substantial growth in the
coming years. Although the National Steel Policy has a target of taking
steel production to 110 million tonne per annum by 2019-20, the steel ministry
has projected
FIXED ASSETS:
- Railway
Siding
- Plant and
Machinery
- Electrical
Installation
- Furniture and
Fixtures
- Office
Equipment
- Vehicles
CONTINGENT
LIABILITIES NOT PROVIDED FOR:
|
Particular |
As
on 31.03.2010 (Rs.
in Millions) |
As
on 31.03.2009 (Rs.
in Millions) |
|
Claims against the Company
not acknowledged as debts |
|
|
|
Excise and Service Tax Demands under dispute/ appeal [out of the same, Rs. 2.000 millions (Rs. 2.000 millions ) has been paid under
protest] |
163.288 |
118.308 |
|
Sales Tax / VAT matters under dispute/appeal |
957.939 |
1072.792 |
|
Others |
16.261 |
0.000 |
|
Letters of Credit, Bills discounted and Bank Guarantees
outstanding |
697.422 |
595.998 |
|
Customs Duty on Import of Equipment and spare parts under
EPCG Scheme |
120.214 |
172.797 |
|
Guarantees and Counter guarantees given by the Company for
loans obtained by subsidiary company |
150.000 |
150.000 |
|
Guarantee given for Joint Venture Companies in terms of
the joint venture agreements. |
141.246 |
90.000 |
|
Estimated amount of contracts remaining to be executed on
Capital Account and not provided for [Net of Advances Rs.1102.955
millions (Rs. 778.556 millions )] |
1183.251 |
356.897 |
|
Total |
3429.621 |
2556.792 |
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. 44.52 |
|
|
1 |
Rs. 71.80 |
|
Euro |
1 |
Rs. 63.15 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
61 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.