MIRA
INFORM REPORT
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Report Date : |
02.06.2011 |
IDENTIFICATION DETAILS
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Name : |
INDIAN EXPLOSIVES LIMITED |
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Registered
Office : |
Pressman House, 10A |
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Country : |
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Financials (as
on) : |
31.03.2010 |
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Date of
Incorporation : |
17.05.1999 |
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Com. Reg. No.: |
21-089431 |
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Capital
Investment/ Paid-up Capital: |
Rs. 134.103
Millions |
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CIN No.: [Company Identification
No.] |
U24292WB1999FLC089431 |
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Legal Form : |
A Closely Held Public Limited
Liability Company. |
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Line of Business
: |
Subject is engaged in manufacturing of explosives and accessories for
civil requirements. |
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No. of
Employees: |
Not Available |
RATING & COMMENTS
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MIRA’s Rating : |
A (60) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 7300000 |
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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 an established company engaged in manufacturing of
explosives and accessories for civil requirements. Financial position of the company
is sound. Trade relations are fair. Business is active. Payments are reported
to regular and as per commitments. The company can be considered good for 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.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
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Registered Office : |
Pressman House, 10A |
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Tel. No.: |
91-33-66219425 |
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Fax No.: |
91-33-22892973 |
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E-Mail : |
DIRECTORS
As on 18.08.2010
|
Name : |
Mr. Subhash Lakkaraju Babu |
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Designation : |
Whole Time Director |
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Address : |
8B, |
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Date of Birth/Age : |
11.09.1952 |
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Date of Appointment : |
06.11.2001 |
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DIN No.: |
00061495 |
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Name : |
Mr. Richard Ernest Roger Wilson |
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Designation : |
Director |
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Address : |
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Date of Birth/Age : |
21.10.1968 |
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Date of Appointment : |
17.07.2007 |
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DIN No.: |
01573158 |
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Name : |
Mr. Andrew Philpotts |
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Designation : |
Director |
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Address : |
1A John Streeet Concord-2137, |
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Date of Birth/Age : |
03.07.1964 |
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Date of Appointment : |
06.03.2006 |
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DIN No.: |
00551740 |
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Name : |
Mr. Mark Lee Thomas |
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Designation : |
Director |
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Address : |
69 Carrington Parade, New Lambton Heights-2305, Asutralia |
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Date of Birth/Age : |
06.07.1953 |
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Date of Appointment : |
12.08.2009 |
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DIN No.: |
02546092 |
KEY EXECUTIVES
|
Name : |
Mr. Mrityunjoy Seal |
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Designation : |
Secretary |
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Address : |
3 C Roma |
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Date of Birth/Age : |
23.08.1961 |
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Date of Appointment : |
10.11.2000 |
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PAN No.: |
ALMPS8760J |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 18.08.2010
|
Names of Shareholders |
|
No. of Shares |
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Orica Investments Pty Limited, |
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13410259 |
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Orica Explosives Holdings Pty Limited, |
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1 |
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Orica Explosives Technology Pty Limited, |
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1 |
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Orica Explosives Research Pty Limited, |
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1 |
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Subhash Lakkaraju Babau, Mrityunjoy and Orica Nominess Pty Limited |
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1 |
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Orica IC Assets Pty Limited, |
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1 |
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Orica Australia Pty Limited, |
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1 |
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Total |
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13410265 |
Equity Share Breakup (Percentage of Total Equity)
As on 30.09.2010
|
Category |
Percentage |
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Foreign holdings( Foreign institutional
investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident
Indian(s) or Overseas Corporate bodies or Others |
100.00 |
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Total |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject is engaged in manufacturing of explosives and accessories for
civil requirements. |
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Products : |
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PRODUCTION STATUS AS ON (31.03.2010)
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Commercial/ Blasting Explosives |
Tonnes |
150263.00 |
179400.00 |
109417.000 |
|
Detonating Fuses |
Million Meters |
25.00 |
18.00 |
9.22 |
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Detonators |
Million Meters |
81.50 |
81.50 |
25.62 |
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Primex / PETN |
Tonnes |
180.00 |
180.00 |
166.92 |
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Note:
- Production meant for sale is net of shortage and handling losses.
- Installed capacities are as certified by management and have not
been verified by the auditors, being
a technical matter.
GENERAL INFORMATION
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Bankers : |
Not Available |
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Facilities : |
Note: Unsecured debentures issued to Orica New Zealand Finance Limited were
redeemable full between 4 November 2007 and 4 November 2010 at the opinion of
the Company, subject to compliance with relevant directives of the Reserve Bank
of |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
BSR and Associates Chartered Accountant |
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Address : |
Infinity Benchmark, Plot No. G-1, 10th Floor, Block-EP and
GP, Sector V, |
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Tel. No.: |
91-33-44034000 |
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Fax No.: |
91-33-44034199 |
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Holding Company : |
Orica Investments Pty Limited, |
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Fellow Subsidiaries : |
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CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
|
|
15000000 |
Equity Shares |
Rs. 10/- each |
Rs. 150.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
13410265 |
Equity Shares |
Rs. 10/-
each |
Rs. 134.103
Millions |
Note:
Of the above, 13410259 (Previous year
13410259) Equity Shares are held by Orica Investment Pty Limited, Australia, the
holding company and the balance 6 (Previous year 6) Shares are held by its
nominees.
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 |
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1] Share Capital |
134.103 |
134.103 |
134.103 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1698.635 |
1288.600 |
979.180 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1832.738 |
1422.703 |
1113.283 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
0.000 |
112.333 |
194.074 |
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TOTAL BORROWING |
0.000 |
112.333 |
194.074 |
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DEFERRED TAX LIABILITIES |
51.195 |
67.147 |
85.701 |
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TOTAL |
1883.933 |
1602.183 |
1393.058 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
543.968 |
596.517 |
644.720 |
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Capital work-in-progress |
37.283 |
9.490 |
23.011 |
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INVESTMENT |
0.000 |
503.640 |
106.019 |
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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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|
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Inventories |
540.617
|
755.166 |
687.713 |
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Sundry Debtors |
491.706
|
593.073 |
406.270 |
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Cash & Bank Balances |
767.784
|
248.716 |
270.378 |
|
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
168.840
|
292.818 |
241.767 |
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Total
Current Assets |
1968.947
|
1889.773 |
1606.128 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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|
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|
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Sundry Creditors |
368.077
|
1202.204 |
883.602 |
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Other Current Liabilities |
85.655
|
61.553 |
47.734 |
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Provisions |
212.533
|
133.480 |
55.484 |
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Total
Current Liabilities |
666.265
|
1397.237 |
986.820 |
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Net Current Assets |
1302.682
|
492.536 |
619.308 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1883.933 |
1602.183 |
1393.058 |
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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 |
3771.406 |
3830.778 |
3037.194 |
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Service Income |
27.482 |
29.400 |
23.675 |
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Other Income |
29.620 |
52.636 |
40.121 |
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|
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TOTAL (A) |
3828.508 |
3912.814 |
3100.990 |
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Less |
EXPENSES |
|
|
|
|
|
|
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Material Costs |
2280.648 |
2456.969 |
2076.428 |
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|
|
Purchase of trading goods |
5.976 |
29.408 |
0.000 |
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|
Increase/ Decrease in Investments of finished goods and work in
progress |
[21.676] |
9.865 |
7.175 |
|
|
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Personnel Costs |
299.591 |
264.067 |
238.132 |
|
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Manufacturing and Other Expenses |
551.855 |
562.593 |
390.511 |
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TOTAL (B) |
3116.394 |
3322.902 |
2712.246 |
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Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
712.114 |
589.912 |
388.744 |
|
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|
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|
|
|
|
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Less |
FINANCIAL
EXPENSES (D) |
16.532 |
47.611 |
27.121 |
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|
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PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
695.582 |
542.301 |
361.623 |
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Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
65.006 |
72.272 |
69.150 |
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PROFIT BEFORE
TAX (E-F) (G) |
630.576 |
470.029 |
292.473 |
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|
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Less |
TAX (H) |
222.988 |
160.609 |
103.661 |
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PROFIT AFTER TAX
(G-H) (I) |
407.588 |
309.420 |
188.812 |
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Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1020.625 |
691.205 |
526.708 |
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Add |
Transfer
from Debenture Redemption Reserve |
27.500 |
20.000 |
[24.315] |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
1455.713 |
1020.625 |
691.205 |
|
|
|
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|
|
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EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
120.531 |
232.337 |
185.999 |
|
|
|
Reimbursement of Expenses |
3.705 |
3.737 |
3.628 |
|
|
TOTAL EARNINGS |
124.236 |
236.074 |
189.627 |
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IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
390.207 |
897.042 |
709.699 |
|
|
|
Stores & Spares |
6.810 |
3.593 |
5.495 |
|
|
|
Capital Goods |
14.124 |
0.000 |
0.000 |
|
|
TOTAL IMPORTS |
411.141 |
900.635 |
715.194 |
|
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|
|
|
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|
|
|
Earnings Per
Share (Rs.) |
30.39 |
23.07 |
14.08 |
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KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
10.65
|
7.91 |
6.09 |
|
|
|
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|
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|
Net Profit Margin (PBT/Sales) |
(%) |
16.72
|
12.27 |
9.63 |
|
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|
Return on Total Assets (PBT/Total Assets} |
(%) |
25.09
|
18.90 |
12.99 |
|
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|
Return on Investment (ROI) (PBT/Networth) |
|
0.34
|
0.33 |
0.26 |
|
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|
Debt Equity Ratio (Total Liability/Networth) |
|
0.36
|
1.06 |
1.06 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.96
|
1.35 |
1.63 |
LOCAL AGENCY FURTHER INFORMATION
Business Environment
Economy posted a remarkable recovery and grew by 7.4 percent for the
financial year ended March 31 2010 propped up by a notable 10.8 percent
expansion in factory output, even as farm production lagged behind with a rise
of just 0.2 percent. The growth rates for 2009-10 are remarkable considering
the sharp decline because of the global recession that started in September
2008. The industry started recovering post May 09 and it has been a strong V
shaped recovery.
Coal India Limited (GIL). the government owned Navratna coal mining
Public Sector closed the fiscal 2009—10 with an impressive coal production of
431.27 Million ‘Tounes (MTs) registering a growth of 6.8% — the highest
achieved in any year SO far. In absolute terms the increase is 27.54 MTs
compared to the coal production of 403.73 MTs achieved in 2008-09
Company
Performance
Operating Results
The company’s turnover has decreased marginally from Rs. 386 Millions in
2008-09 to Rs. 380 Millions in 2010. The decrease in turnover has been mainly
due to lower export sales. However, the impact of lower export volume was
largely offset by higher volume for detonators and detonating fuse as well as
higher realization for explosives product in domestic market. In spite of a
marginal reduction in turnover over last year, the company has achieved
increase in Profit before tax (PBT) at Rs. 408 Millions during the year, as
compared to Rs. 309 Millions in the previous year. The increase in profit is
mainly on account of decrease in raw material prices, higher sales realization
for explosives and lower interest costs.
Divisional
Performance
Explosives
During2009-l0 the Company recorded sale of 109945 MT of explosives as
compare to 112344 MT of Explosives in 2008-09, reflecting a marginal decrease
of 2% over the last year. While sale of bulk explosives were higher than last
year, sale of packaged explosives were lower than last year due to reduced
order share from two of its key customers namely Coal
Initiating Systems
Sales value of Initiating Systems has decrea9ed from last year by 4%
owing to lower export sales. Export volume has been lower due to impact of slow
down being seen after global financial crisis.
The Company has successfully launched unitronics — Digital Energy
Control System (electronic detonators) in the Indian market and the product is
getting a good response in the market.
Blast Based
Services
Blast Based Services division continues to be a thrust area of the
Company as it has been aggressively bidding for new contracts in mining and
infrastructure sectors. During the year, the Company has been successful in
getting new ROG contract at Singareni Collieries Limited and few BBS contracts
from private coal mines.
Exports
During the year, the Company exported explosives and accessories to
various countries. The export revenue of the Company decreased from Rs. 232
Millions. in 2008-09 to Rs.121 Millions in 2009-10 on F.O.B basis owing to
lower export to East African countries, UAE and South East Asian countries as a
result of slow down impact in these market post global financial crisis.
Future Outlook
The global economy seems to be recovering after the recent economic
shock. The Indian economy, however, was hit in the latter part of the global
recession and the real economic growth witnessed a sharp fall, followed by
lower exports, lower capital outflow and corporate restructuring. It is
expected that the global economies will continue to sustain in the short-term,
as the effect of stimulus programs is yet to bear fruit. However, there has
been a remarkable recovery in terms of H.P growth in 1±dia in 2009-10. In the
beginning of the year, most analysts had predicted a far lower growth than the
final figure of 10.3%. From May 2009 onwards. growth started picking up and the
growth trajectory has surprised all. The growth is clearly becoming more robust
and broad based.
The public sector Coal India Limited (CIL) has agreed to a production
target of 461.5 million tonnes (MT) and an off-take of 462.5 MT for 2010-11.
There is tremendous activity in the non-ferrous metals segment as well.
Major metal companies, including Nalco, Hindustan Zinc and Hindustan Copper
have massive expansion and exploration plans. The country has witnessed
tremendous growth in investment in recognition of the importance of this
sector. The country’s mining industry is projected to touch over USD 30 Bn
accounting for about 2.5% of the GDP in the next four years. There is strong potential
for further development and scaling up of the country’s mining industry.
With a robust order book, increasing contributions from overseas markets
and inroads into mining and new products, the Company is well placed to take
advantage of the emerging situation due to its global technology product
innovation and market leadership in providing complete mining services to its
customers.
The Company aims to increase the business further by concentrating on
increasing the sale of new value added products such as Electronic Detonators,
Emulsion explosives/boosters, Seismic explosives and detonators and blast based
services.
CAPITAL
COMMITMENTS AND CONTINGENT LIABILITIES
|
Particulars |
31.03.2010 Rs.
in Millions |
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|
i) Estimated amount of contracts (net of advances) remaining to be
executed on capital account and not provided for |
8.342 |
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ii) Claims against the company (Including excise duty, income tax,
customs duty etc) not acknowledged as debts: |
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Fixed Assets:
·
·
·
Building
·
Plant and Machinery
·
Furniture and Fixtures
·
Rolling, Stock,
Motor, Vehicles etc.
·
Patents and Trademarks
·
Computer Software
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 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.44.89 |
|
|
1 |
Rs.73.85 |
|
Euro |
1 |
Rs.64.76 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
8 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
60 |
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.