MIRA
INFORM REPORT
|
Report Date : |
12.03.2011 |
IDENTIFICATION DETAILS
|
Name : |
ELECTROSTEEL CASTINGS LIMITED |
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Registered Office : |
Rathod Colony, Rajgangpur, Sundergarh-770 017, Orissa |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
26.11.1955 |
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Com. Reg. No.: |
15-000310 |
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CIN No.: [Company
Identification No.] |
L27310OR1955PLC000310 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALE01429B / CALE01711D |
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PAN No.: [Permanent
Account No.] |
AAACE4975B |
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Legal Form : |
Public Limited Liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of pig iron, steel castings, grinding media, steel ingots/ billets, cast-iron spun pipes, cast-iron specials, cast-iron castings and ductile iron spun pipes. |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa (72) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
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Maximum Credit Limit : |
USD 60000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having fine track records. Available information indicates high financial responsibility of the company. Financial position of the company is good. Payments are usually correct and as per commitments. The company can be considered good for any normal business
dealings. It can be regarded as a
promising business partner in a long-run. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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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 : |
Rathod Colony, Rajgangpur, Sundergarh-770 017, |
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Tel. No.: |
91-6622-207008 / 9 / 287047 |
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Fax No.: |
91-6622-481803 |
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E-Mail : |
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Website : |
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Corporate Office 1: |
148/150, Old No. 98/99, |
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Tel No. : |
91-44-24995257 / 58 (10 Lines) |
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Fax No. : |
91-44-24995229 |
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Corporate Office 2: |
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Head Office : |
19, |
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Tel No.: |
91-33-22839990 |
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Fax No.: |
91-33-22894336 /
4337 / 4338 / 4339 / 4340 |
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E-Mail : |
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Factory 1 : |
30, |
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Tel. No.: |
91-33-25531892/2987/2991 |
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Fax No.: |
91-33-25531893/0588 |
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E-Mail : |
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Factory 2 : |
Gummodipoondi Taluk, P. O. Elavur, MGR, Dist. Chennai –
601 211, |
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Factory 3 : |
Haldia, Kasberia,
P.O. Khanjan Chawk, Haldia, Midnapore (East), West |
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Factory 4 : |
Parbatpur, |
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Overseas office : |
Electrosteel Europe S.A., Sucursal En Espana Edificio Forum La Rotonda,
Ctra. Sant Cugat a Rubi, kmtr. 1n40, Piso 2 Departmento 6, Sant Cugat
delValles 08190, |
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Tel. No.: |
34-93-5830522 |
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Fax No.: |
34-93-5897093 |
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E-Mail : |
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Branch Office : |
Located at: ·
Ahmedabad ·
·
Mumbai
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DIRECTORS
As on 31.03.2010
|
Name : |
Mr. P. K. Khaitan |
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Designation : |
Chairman |
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Name : |
Mr. Umang Kejriwal |
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Designation : |
Managing Director |
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Qualification : |
B.Com.(Hons.) |
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Date of Appointment : |
16.02.1975 |
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Previous Employment : |
Executive Director – Electrocast Sales India Limited |
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|
Name : |
Mr. Mayank Kejriwal |
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Designation : |
Joint Managing Director |
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Qualification : |
B.Com. (Hons.) |
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Date of Appointment : |
25.01.1977 |
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Previous Employment : |
Executive Director – Electrocast Sales India Limited |
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Name : |
Mr. B. Khaitan |
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Designation : |
Director |
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Name : |
Mr. Naresh Chnadra |
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Designation : |
Director |
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Name : |
Mr. Jamshed J. Irani |
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Designation : |
Director |
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Name : |
Mr. Uddhav Kejriwal |
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Designation : |
Whole Time Director |
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Name : |
Mr. M.B.N. Rao |
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Designation : |
Director |
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Name : |
Mr. S.Y. Rajagopalan |
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Designation : |
Director |
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Name : |
Mr. V.M. Ralli |
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Designation : |
Director |
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Name : |
Mr. M.K. Jalan |
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Designation : |
Director |
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Name : |
Mr. R.S. Singh |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Ms. Jyoti Jain |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2010
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
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|
40,246,541 |
12.42 |
|
|
117,727,668 |
36.34 |
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|
157,974,209 |
48.76 |
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|
|
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|
Total shareholding of Promoter and Promoter Group (A) |
157,974,209 |
48.76 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
9,839,567 |
3.04 |
|
|
1,040,060 |
0.32 |
|
|
20,817,983 |
6.43 |
|
|
16,137,947 |
4.98 |
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|
47,835,557 |
14.76 |
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|
|
|
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21,341,448 |
6.59 |
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|
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|
57,965,837 |
17.89 |
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|
8,477,403 |
2.62 |
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|
30,388,251 |
9.38 |
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|
2,907,837 |
0.90 |
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|
27,480,414 |
8.48 |
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|
118,172,939 |
36.48 |
|
Total Public shareholding (B) |
166,008,496 |
51.24 |
|
Total (A)+(B) |
323,982,705 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 MillionBUSINESS DETAILS
|
Line of Business : |
Manufacturing of pig iron, steel castings, grinding media, steel ingots/ billets, cast-iron spun pipes, cast-iron specials, cast-iron castings and ductile iron spun pipes. |
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Products : |
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PRODUCTION STATUS (as on 31.03.2010)
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
C.I. Spun Pipes |
Tonnes |
90000 |
40651 |
|
D.I. Spun Pipes |
Tonnes |
280000 |
235463 |
|
|
Tonnes |
5000 |
4683 |
|
Pig Iron** |
Tonnes |
250000 |
218027 |
|
Metallurgical Coke # |
Tonnes |
295000 |
140922 |
|
Sponge Iron *** |
Tonnes |
60000 |
31273 |
Note:
·
*As certified by
management.
·
** Includes 200857.11 Mt
and 4069.43 Mt (Previous year 228435780 Mt and 44129 Mt) Captively Consumed in
DIP and DI Fittings respectively.
·
# Including 108564.66 Mt
(Previous Year 113332.661 Mt) internally manufactured and consumed.
·
**** Includes 27379.63 Mt
(Previous Year 27209.290 Mt) captively consumed in DIP.
·
Licensed capacity is not
applicable in terms of government of
GENERAL INFORMATION
|
Bankers : |
·
Bank of · HSBC Limited ·
State Bank of · Punjab National Bank, Rajgangpur, Orissa · Standard Chartered Bank · BNP Paribas, Rajgangpur, Orissa · ICICI Bank Limited · IDBI Bank Limited · HDFC Bank Limited ·
·
Bank of |
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Facilities : |
Note: ·
11.80%
Non Convertible Debentures (privately placed) are to be secured by pari-passu
charge on company’s fixed assets (immovable and movable)( including land and
buildings both present and future other than certain property located at
Chennai. These debentures were allotted on March 20, 2009 and redeemable at
par in three equal annual installments commencing on from the end of three
year from the date of allotment with a Put and Call option at the end of 3rd
year from the date of allotment. ·
9.15%
Non Convertible Debentures (privately placed) are to be secured by pari-passu
charge on company’s fixed assets (immovable and movable) including land and
buildings both present and future other than certain property located at
Chennai. These debentures were allotted on 8th February, 2010 and
redeemable at par on 8th February, 2013. ·
External
Commercial Borrowings are to be secured by way of pari-passu charge on all
immovable and movable Fixed Assets present and future of the Company other
than certain property located at Chennai. ·
Term
Loans from Export Import Bank of ·
Working
Capital facilities from banks are secured by way of joint hypothecation of
inventories and book debts. ·
Floating
rate Non Convertible Debentures have been issued for a tenure of 88 days with
daily put and call option and are to be secured by way of charge over fixed
assets of the company. However, these debentures have since been redeemed
before creation of security. |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Lodha and Company Chartered Accountants |
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Address : |
14, |
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Tel. No.: |
91-33-22481507 / 7102 / 6962 / 1111 |
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Mobile No.: |
91-33-22486960 / 4572 |
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E-Mail : |
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Associates : |
·
Lanco Industries Limited ·
Electrosteel Steel Limited (Formerly
Electrosteel Integrated Limited) ·
Electrosteel
Thermal Power Limited |
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Joint Venture
: |
· North Dhadhu Mining Company Private Limited · Domco Private Limited |
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Subsidiaries : |
· Electrosteel Europe SA ·
Electrosteel · Singardo International Pte Limited ·
Electrosteel Castings ( ·
Electrosteel ·
WaterFab, LLC (100% subsidiary of Electrosteel
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Related
Companies: |
· Global Exports Limited · Badrinath Industries Limited · Akshay Ispat and Ferro Alloys Private Limited · Acharya Multicon Private Limited · Flora Construction Private Limited · Highrise Multicon Private Limited · Kabir Projects Private Limited · New City Enclave Private Limited · Nilmoni Developers Private Limited · Tulsi Highrise Private Limited · Royal Multicon Private Limited · Tulip Fabicon Private Limited · Paramount Tracom Private Limited · Stewart Agencies Private Limited · Wilcox Merchants Private Limited · Nimpith Developers Private Limited · Samar Properties Private Limited · Electrosteel Thermal Power Limited · Electrosteel Thermal Coal Limited · Murari Investment and Trading Company Limited |
CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
500000000 |
Equity Shares |
Rs.1/- each |
Rs.500.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
326752705 |
Equity Shares |
Rs.1/- each |
Rs.326.753
Millions |
Note: Out of the
above 88761600 Shares of Rs.1/- each have been allotted as fully paid up bonus shares
by capitalisation of Share Premium and General Reserve.
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 |
326.753 |
287.302 |
280.524 |
|
|
2] Share Warrants |
0.000 |
341.671 |
336.846 |
|
|
3] Share Application Money |
0.000 |
967.116 |
0.000 |
|
|
4] Reserves & Surplus |
15510.986 |
12324.802 |
11185.445 |
|
|
5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
15837.739 |
13920.891 |
11802.815 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
11297.379 |
8875.360 |
4966.552 |
|
|
2] Unsecured Loans |
1121.923 |
1202.064 |
2126.529 |
|
|
TOTAL BORROWING |
12419.302 |
10077.424 |
7093.081 |
|
|
DEFERRED TAX LIABILITIES |
469.712 |
369.047 |
198.493 |
|
|
|
|
|
|
|
|
TOTAL |
28726.753 |
24367.362 |
19094.389 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
5246.254 |
5068.880 |
4047.908 |
|
|
Capital work-in-progress |
3909.603 |
2960.884 |
1490.135 |
|
|
|
|
|
|
|
|
INVESTMENT |
10239.603 |
4453.286 |
1589.402 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3567.313
|
3253.574
|
3227.275
|
|
|
Sundry Debtors |
3741.081
|
6176.255
|
5100.539
|
|
|
Cash & Bank Balances |
2809.253
|
859.674
|
1726.462
|
|
|
Other Current Assets |
0.000
|
0.000
|
0.000
|
|
|
Loans & Advances |
2210.088
|
4295.048
|
5135.615
|
|
Total
Current Assets |
12327.735
|
14584.551
|
15189.891
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1462.463
|
1158.453 |
|
|
|
Other Current Liabilities |
367.184
|
360.198
|
2400.528
|
|
|
Provisions |
1166.795
|
1181.588
|
822.419
|
|
Total
Current Liabilities |
2996.442
|
2700.239
|
3222.947
|
|
|
Net Current Assets |
9331.293
|
11884.312
|
11966.944
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
28726.753 |
24367.362 |
19094.389 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
14287.747 |
18380.419 |
13312.348 |
|
|
|
Other Income |
1277.469 |
899.237 |
941.433 |
|
|
|
TOTAL (A) |
15565.216 |
19279.656 |
14253.781 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Purchase |
495.100 |
2056.940 |
2182.207 |
|
|
|
Raw Material consumed |
5791.229 |
7867.120 |
5228.431 |
|
|
|
Manufacturing and other expenses |
5441.325 |
6103.416 |
5010.067 |
|
|
|
Increase or decrease in stocks |
(228.585) |
(332.165) |
98.413 |
|
|
|
Exception items |
0.000 |
0.000 |
602.010 |
|
|
|
TOTAL (B) |
11499.069 |
15695.311 |
13121.128 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
4066.147 |
3584.345 |
1132.653 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES/ INTEREST (D) |
463.974 |
972.602 |
262.052 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
3602.173 |
2611.743 |
870.601 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
523.006 |
521.248 |
366.059 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
3079.167 |
2090.495 |
504.542 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
1016.278 |
686.554 |
(15.616) |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
2062.889 |
1403.941 |
520.158 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
896.465 |
600.060 |
NA |
|
|
|
|
|
|
|
|
|
Add |
TRANSFER
FROM DEBENTURE REDEMPTION RESERVE |
0.000 |
450.000 |
NA |
|
|
|
|
|
|
|
|
|
Less |
DIVIDEND
PAID FOR PREVIOUS YEAR |
17.500 |
0.132 |
NA |
|
|
|
TAX
ON DIVIDEND PAID FOR PREVIOUS YEAR |
2.975 |
0.023 |
NA |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Debenture redemption reserve |
270.000 |
100.000 |
NA |
|
|
|
General reserve |
1182.428 |
1000.000 |
NA |
|
|
|
Proposed dividend |
408.441 |
390.941 |
NA |
|
|
|
Tax on dividend |
67.837 |
66.440 |
NA |
|
|
BALANCE CARRIED
TO THE B/S |
1010.173 |
896.465 |
NA |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
4952.472 |
4400.809 |
3807.895 |
|
|
|
Interest |
5.384 |
36.760 |
122.274 |
|
|
|
Other Earnings |
45.990 |
454.739 |
610.170 |
|
|
TOTAL EARNINGS |
5003.846 |
4892.308 |
4540.339 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
2034.267 |
3314.480 |
1726.255 |
|
|
|
Stores & Spares |
337.871 |
185.457 |
177.146 |
|
|
|
Capital Goods |
477.382 |
388.582 |
250.397 |
|
|
TOTAL IMPORTS |
2849.520 |
3888.519 |
2153.798 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
6.45 |
4.94 |
NA |
|
QUARTERLY RESULTS
(UNAUDITED)
|
PARTICULARS |
|
30.09.2010 (Rs. In
Millions) |
30.06.2010 (Rs. In
Millions) |
|
|
|
2nd
Quarter |
1st
Quarter |
|
Net Sales |
|
4322.390 |
3688.590 |
|
Total Expenditure |
|
3554.210 |
3023.440 |
|
PBIDT (Excl OI) |
|
768.180 |
665.150 |
|
Other Income |
|
44.630 |
64.420 |
|
Operating Profit |
|
812.810 |
729.570 |
|
Interest |
|
102.440 |
172.590 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
PBDT |
|
710.370 |
556.980 |
|
Depreciation |
|
143.010 |
131.200 |
|
Profit Before Tax |
|
567.360 |
425.780 |
|
Tax |
|
181.320 |
124.980 |
|
Provisions and Contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
386.040 |
300.810 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustment |
|
0.000 |
0.000 |
|
Net Profit |
|
386.040 |
300.810 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
13.25
|
7.28
|
3.65
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
21.55
|
11.37
|
3.79
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
17.52
|
10.64
|
2.62
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19
|
0.15
|
0.04
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.97
|
0.92
|
0.87
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
4.11
|
5.40
|
4.71
|
LOCAL AGENCY FURTHER INFORMATION
History:
Subject is largest manufacturer of ductile iron (DI) spun
pipes in
Operations:
The Company's turnover has decreased from Rs. 18955.800 Millions in 2008-09
to Rs. 14666.400 Millions in 2009-10 representing a decrease of
22.63 %.
Export sales showed a
marginal increase from As. 4792.000 Millions to
As. 5071.500 Millions , an increase of 5.83 % owing to higher
proportion of sales in the export
market. The decrease in turnover
is mainly due to lower turnover from
trading activities and lower projects executed on
turnkey basis. Further, the
planned shut down of Blast
Furnace for its
relining and repairing in the
last quarter of 2009-10 also contributed in lower sales of D. I. Pipes by approximately 7.00%. However, inspite of
above, the Company has achieved highest ever Profit Before Tax(PBT) of As.
3079.200 Millions during the
year, representing an increase of 47.30% as compared
to As. 209.05 in the previous year.
The increase in profit is mainly on account of decrease in raw
material prices, lower interest cost and
better foreign exchange
management.
During the
Production of
Finance:
During the year, The Company raised Rs.2100.700 Millions by issue
of 2,000 numbers of
Secured Non Convertible Debentures
along with 3,35,68,312 numbers of
warrants through Qualified Institutions
Placement basis for augmenting its long term resources and
general corporate purposes. Further to
augment the long term resources required for expansion and other business purposes, The Company raised As. 289.800 Millions being 90%
of the total amount
due against conversion of 1,40,00,000
warrants (issued in previous
years to Promoters/ Promoter Group Companies) into
14.000 Millions equity shares of Re. 1 each at a price of As.
23.00 per share. In addition to above, The Company has availed the balance disbursement of As 1000.000 Millions of Rupee Term Loan from EXIM Bank and USD
57.50 million from lenders towards ECB.
Credit Rating:
The rating for
long-term/medium term debt and
various Bank facilities sanctioned and/or
availed by The Company has been
upgraded by Credit Analysis and
Research Limited . (CARE) as from 'CARE AA -'(Double A
Minus) to 'CARE AA' (Double A)
including the Non-Convertible Debentures (NCDs) of the Company (outstanding
As. 3000.000 Millions as at
31.03.2010). 'CARE AA' rating indicates high safety for timely
servicing of debt obligations and very low credit risk.
The rating for the short-term debt/facilities sanctioned and/or
availed by the Company has been assigned
as 'PA1 +' which is the highest rating in the category and indicates a strong capacity for timely
payment of short-term debt obligations
and lowest credit risk.
Future Prospects:
Government's thrust on the infrastructure facilities is already
showing continuous
increasing demand for
ESL is setting up a 2.2 MTPA
integrated steel project at a capital
outlay of Rs. 72620.000 Millions at Siyaljuri in Bokaro District in the
industrially backward state of Jharkhand. The project cost would be
financed in the debt equity ratio of 3:1. The project envisages production of
1.20 MTPA long steel
products viz. bar and rods, 0.33
MTPA of D I pipes and balance 0.677 MTPA of other steel products. The
project is appraised by the State Bank of
Implementation of the project is progressing satisfactorily
and ESL
has acquired the required land,
received all statutory clearances
and placed almost all
the orders for supply of plant and
machinery. The construction work at site is in full swing.
Awards:
In May 2009,
The Company was awarded by
EEPC-ER (Engineering Export Promotion Council, Eastern Region) for
Star Performance as Large Enterprise in the Product Group of Sanitary and Industrial Castings for its outstanding contribution to Engineering exports
during the year 2006-07.
MANAGEMENT
DISCUSSION AND ANALYSIS
Overview:
The Company is
engaged in the business of
manufacturing Ductile Iron Pipes,
Fittings and Cast Iron Pipes. Additionally,
the Company also undertakes turnkey
solutions for water
transportation and sewerage management, which
includes manufacturing DI Pipes, supplying and
laying various types of
pipes, operating the system
and transferring to the
owners.
Industry Outlook:
To transport sufficient
quantities of water from
different sources to treatment plants with minimal loss and then
transport it to the end users, a strong
reliable transport medium is required. Earlier, the only
major means available for the use in water transportation application
(supply and sanitation) were the CI pipes. The DI pipes were first introduced
in 1955, which has since been recognized as the industry
standard for modern water and wastewater
systems. DI pipes are preferred over CI pipes on account of being
lighter, stronger, more durable and cost efficient and
being corrosion resistant, ductile,
etc. The DI pipes also have higher
water carrying capacity. The DI pipes can also be laid out much faster
and are virtually maintenance free.
Internationally, DI pipes have
increasingly replaced CI pipes and mild
steel pipes in most applications, including water and sewage transportation
and management. This is primarily due to the qualitative and
structural benefits provided by DI pipes in comparison to CI pipes and
mild steel pipes such
as superior tensile strength, yield strength, greater
impact resistance, corrosion resistance
and ductility. In addition, DI
pipes require less support and provide greater flow area as
compared to pipes made
from other materials. DI pipes have a lower life
cycle cost. In difficult
terrain, these can be a better
choice than Polyvinyl chloride concrete, polyethylene and steel
pipes.
Demand drivers for
DI pipes:
The following
factors would drive the demand for DI pipes:-
1. Thrust of the government to provide drinking water
and sanitation to 100% of the population and make funds
available to achieve it.
2. The need to conserve water and reduce leakage. The need to focus on
life cycle cost rather
than initial cost; and to
consider inconvenience to public in replacement of pipes.
3. The over reliance on ground water for rural water supply has resulted
in twin problem of sustainability and
water quality and suggested a shift to
surface water source
for tackling this
issue. This will
result in substantial increase in
requirement of pipes.
4. Jawaharlal Nehru National
Urban Renewal Mission (JNNURM) is
making a large investment in
water sector but has limited coverage of only 63 cities with a population of
over one lakh (Source: JNNUAM)
2009-10 vs.
2008-09:
The Company's turnover has decreased from As. 18955.800 Millions in 2008-09 to As. 14666.400 Millions in 2009-10 representing a decrease of
22.63 %.
Export sales showed a
marginal increase from As. 4792.000 Millions to
As. 5071.500 Millions , an increase of 5.83 % owing to higher
proportion of sales in the export
market. The decrease in turnover
is mainly due to lower turnover from
trading activities and lower projects executed on
turnkey basis. Further, the
planned shut down of Blast
Furnace for its
relining and repairing in the
last quarter of 2009-10 also contributed in lower sales of D.Lpipes by approximately 7.00%. However, inspite of
above, The Company has
achieved Profit Before Tax(PBT) of As. 3079.200 Millions during the
year, representing an increase
of 47.30% as compared to As.
209.05 in the previous
year. The increase in profit is mainly on account of decrease in raw
material prices, lower interest cost and
better foreign exchange management.
Ductile Iron
Pipes:
The production of DI pipes decreased during the year from 2, 51,823 MT
last year to 2,35,463 MT i.e. by 6.50 %.
|
Year |
DI
Pipe Production |
|
2007-08 |
214956 MT |
|
2008-09 |
251823 MT |
|
2009-10 |
235463 MT |
The decrease in production was mainly due to planned
shut-down of Blast Furnace
for its relining and repairing in the last quarter
of 200910. customer requirements
were met by remelting the Pig Iron and scraps
in Induction Furnaces.
Cast Iron Pipes:
Production was marginally higher at 40,651 MT against 39,831 MT in the
previous year.
DI Fittings
and Accessories:
Production of DI Fittings increased during the year from 4,230 MT last
year to 4,683 MT. Company improved the performance of the division by targeting more value added products and
higher exports to niche markets.
Raw Materials
Management:
The Company's manufacturing facilities spread across
four locations in
Over the years, The Company has
realized that to remain cost
competitive, the Company must
have control over its basic
raw material cost
and accordingly The Company
initiated the process to get Coal and
Iron Ore Mine allocation. In
2005, The Company has been allocated coking
coal mine facilities in the State of
The Company has also been
allocated an Iron Ore Mine at Kodolibad in
the State of
Power Plant:
12 MW Power Plant at Haldia has contributed 33.14 million units to SEB
grid in place of
72.1 million units last year. Generation
was less due to
operation of mainly one sponge Iron kiln out of two due
to un-economic price of sponge iron and planned shut-down for
capital repair of
Captive Coke Oven
Plant:
During the year, the Coke Oven Plant at Haldia produced
1, 40,922 MT of Metallurgical Coke against 1,32,406 MT
last year for captive consumption in Blast Furnace at Khardah Works.
Export:
The Company has kept its focus on
the quality conscious markets of Europe
like
The Company has been successful in entering the
Engineering Exports Promotion Council, Eastern Region presented the Export Excellence Award for outstanding
contribution in exports during 2006-07.
Outlook:
Being the largest and low cost producer of quality Ductile Pipes in
FIXED ASSETS
·
Land – Freehold
·
Land – Leasehold
·
Buildings
·
Railway Siding
·
Plant and Machinery
·
Furniture and Fixtures
·
Vehicles
·
Computer Software
Milestones:
|
1996 |
The Company obtained
Kitemark licence from British Standard Institute (BSI) for its Dl pipes as
per ISO 2531, BS EN 545, BS EN 598. |
|
|
The Company
commissioned its own mini-blast furnace with matching capacity for better
quality control. |
|
1999 |
The Company received
the ISO-9002 accreditation from BSI for Dl pipes and fittings. |
|
2000 |
The Company
increased its capacity to 120,000 tpa for Dl pipes. |
|
|
The Company
obtained Kitemark license from |
|
2001 |
The Company
scaled its Dl pipe capacity from 120,000 tpa to 150,000 tpa. |
|
|
Mini Blast
Furnace capacity increased from 1,09,000 tpa to 2,00,000 tpa. |
|
2002 |
The Company
acquired 46% stake in Lanco Industries Limited in March 2002, which is
involved in manufacturing of DI Pipes, Pig Iron, Cement and Castings. |
|
2003 |
The Company received
the ISO-14001 and ISO 9001-2000 certification as a testimony to its sound
environment management practices. |
|
|
The Company also
received BSI Kitemark license for Dl Fittings at Khardah works, |
|
|
The Company increased
its Dl pipe manufacturing capacity from 1,50,000 tpa to 200,000 tpa. |
|
2005 |
The Company
raised USD 40 Million through the issue of Global Depository Receipts (GDRs)
in October 2005 and become the first Indian Company to be listed on
Professional Securities Market (PSM) of the London Stock Exchange (LSE) in
addition to being the first Company to issue GDRs on the PSM. |
|
|
The Company was
accorded Three Star Export House by the JDGFT, Ministry of Commerce and Industry
of the Government of India. |
|
2006 |
The Company
increased its Dl pipe manufacturing capacity from 2, 00,000 tpa to 2,50,000
tpa and commissioned Coke Oven Plant at Haldia. |
|
|
The Company
commissioned 12 MW Power Plant and 30,000 tpa second Kiln Sponge Iron Plant
at Haldia. |
|
|
Mini Blast
Furnace capacity increased from 2,00,000 tpa to 2,35,000 tpa. |
|
|
The Company
successfully commissioned Pulverized Coal Injection System in Blast Furnace and
Stamp Charging System in Coke Oven Plant at Khardah, which enhanced
operational efficiency. |
|
|
The Company
successfully raised USD 75 Million through issue of Zero Coupon Convertible
Bonds to finance its Capital expenditure requirements. |
|
2007 |
Implemented SAP ERP system hosted in state of the art 1000
square feet Data center connecting all manufacturing plants and sales offices
across Indian Geography supporting 350 user base to enable supply chain of
the company |
|
2008 |
Tied up US$ 77.50 mn through ECB, commissioned 360,000 TPA
sinter plant at Khardah and commissioned a 75,000 TPA coke oven battery at
Haldia. |
|
2009 |
Commissioned fourth coke oven battery resulting in
additional capacity of 70,000 TPA of coke, taking the total capacity enhanced
to 280,000 TPA and 250,000 TPA respectively |
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.45.21 |
|
|
1 |
Rs.72.54 |
|
Euro |
1 |
Rs.62.43 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
|
72 |
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.