MIRA
INFORM REPORT
|
Report Date : |
12.05.2011 |
IDENTIFICATION DETAILS
|
Name : |
JAYASWAL NECO INDUSTRIES LIMITED (w.e.f November 2007) |
|
|
|
|
Formerly Known
As : |
JAYASWAL NECO LIMITED |
|
|
|
|
Registered
Office : |
F - 8, M.I.D.C. Industrial Area, Hingna Road, Nagpur – 440 016,
Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2010 |
|
|
|
|
Date of
Incorporation : |
28.11.1972 |
|
|
|
|
Com. Reg. No.: |
11-016154 |
|
|
|
|
Paid-up Capital
: |
Rs. 2366.537 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L28920MH1972PLC016154 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
NGPJ00957F |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACJ3174F |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturer of Cast Iron Pipes and Fittings. |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (46) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 23000000 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Usually Correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an established company having satisfactory track. Trade
relations are reported as fair. Business is active. Payments are reported to
be usually correct 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
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INFORMATION DECLINED BY
|
Name : |
Mr. P.K. Bhardwaj |
|
Designation : |
Chief Finance Officer |
LOCATIONS
|
Registered Office/ Corporate Office : |
F - 8, M.I.D.C. Industrial Area, Hingna Road, Nagpur – 440 016,
Maharashtra, India |
|
Tel. No.: |
91-7104-237276/ 237471/ 237472 |
|
Fax No.: |
91-7104-237583/ 236255 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Factory 1 : |
Steel Plant Division- Siltara Growth Centre, Raipur - 493000,
Chattisgarh, India |
|
|
|
|
Factory 2 : |
Automotive Casting Division - Butibori, Nagpur, Maharashtra, India |
|
|
|
|
Factory 3 : |
Centricast Division- M.I.D.C. Area, Hingna Road, Nagpur, Maharashtra,
India |
|
|
|
|
Factory 4 : |
Engineering Castings
Division- M.I.D.C. Area, Hingna Road, Nagpur, Maharashtra, India |
|
|
|
|
Factory 5 : |
Construction Casting Division – Light Industrial Area, Bhilai and
Anjora |
|
|
|
|
Factory 6 : |
Gare Palma IV/4 and
IV/8 Coal Block, Mand Raigarh Coal Fields, Raigarh, Chattisgarh, India |
|
|
|
|
Branch Office : |
Located at:
|
DIRECTORS
As On 31.03.2010
|
Name : |
Mr. Basant Lall Shaw |
|
Designation : |
Chairman |
|
Date of Birth/Age : |
03.08.1933 |
|
Qualification : |
B.Com |
|
Experience : |
Associated with
Iron and Steel business operations for
over 50 years. Instrumental in setting up 1 MTPA Integrated Steel Plant in Raipur
and other industrial units in the Group inIndia and Abroad. Founder and
Chairman of Neco Group of Industries. |
|
Date of Appointment : |
28.11.1972 |
|
Other Directorships : |
|
|
|
|
|
Name : |
Mr. B.K. Agrawal |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. M.M. Vyas |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. John Mathew |
|
Designation : |
Nominee (EXIM) |
|
|
|
|
Name : |
Mr. Ramesh Jayaswal |
|
Designation : |
Joint Managing Director |
|
Date of Birth/Age : |
02.02.1960 |
|
Qualification : |
B.Com |
|
Experience : |
Associated with iron and stell business for over 22 years. Looks after
the implementation of new projects and other allied matters. |
|
Date of Appointment : |
05.03.1983 |
|
Other Directorships : |
|
|
|
|
|
Name : |
Mr. Arbind Jayaswal |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. S K Sachdev |
|
Designation : |
Nominee (IDBI) |
KEY EXECUTIVES
|
Name : |
Mr. A.D. Karajgaonkar |
|
Designation : |
Company Secretary |
|
|
|
|
Name : |
Mr. P.K. Bhardwaj |
|
Designation : |
Chief Finance Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2011
|
Category of Shareholder |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
3,561,470 |
1.42 |
|
|
170,957,651 |
68.15 |
|
|
174,519,121 |
69.57 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
174,519,121 |
69.57 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
14,306,435 |
5.70 |
|
|
2,563,370 |
1.02 |
|
|
4,737 |
- |
|
|
401,151 |
0.16 |
|
|
1,675,245 |
0.67 |
|
|
18,950,938 |
7.55 |
|
|
|
|
|
|
19,915,217 |
7.94 |
|
|
|
|
|
|
21,448,731 |
8.55 |
|
|
15,380,306 |
6.13 |
|
|
646,591 |
0.26 |
|
|
469,381 |
0.19 |
|
|
177,210 |
0.07 |
|
|
57,390,845 |
22.88 |
|
Total Public shareholding (B) |
76,341,783 |
30.43 |
|
Total (A)+(B) |
250,860,904 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total (A)+(B)+(C) |
250,860,904 |
- |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal share
capital up to Rs. 0.100 millionBUSINESS DETAILS
|
Line of Business : |
Manufacturer of Cast Iron Pipes and Fittings. |
||||||||||||
|
|
|
||||||||||||
|
Products : |
|
PRODUCTION STATUS (As on 31.03.2010)
|
Particulars |
Unit |
|
|
Installed
Capacity |
|
Iron and Steel Casting |
M.T. per annum |
|
|
205000 |
|
Pig Iron |
M.T. per annum |
|
|
750000 |
|
Billets |
M.T. per annum |
|
|
260000 |
|
Sponge Iron |
M.T. per annum |
|
|
255000 |
|
Rolled Products |
M.T. per annum |
|
|
400000 |
|
Particulars |
Unit |
|
|
Actual
Production |
|
Iron and Steel Castings * |
M.T. |
|
|
72720 |
|
Pig Iron ** |
M.T. |
|
|
313037 |
|
Billets # |
M.T. |
|
|
102761 |
|
Rolled Products |
M.T. |
|
|
85206 |
|
Sponge Iron |
M.T. |
|
|
173184 |
|
Hot Metal |
M.T. |
|
|
10029 |
|
Power |
Thousand KWH |
|
|
166576 |
* Net of 432 MT (Previous Year : 6467 MT) being captive
consumption.
** Net of 27257 MT (Previous Year : 30802 MT) being captive
consumption and 185181 MT (Previous Year : 101990 MT) being hot metal consumed for
production of Billets
# Net of 89088 MT (Previous Year : 29412 MT) being captive
consumption and includes 6832 MT (Previous Year Nil) produced on Jobwork basis.
@ Net of 38807 MT (Previous Year : 19021 MT) being captive
consumption
GENERAL INFORMATION
|
No. of Employees : |
Information not divulged by management |
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Bankers : |
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|
Facilities : |
NOTES: A. The Term Loans Referred to in (1) above includes: i. Rs.950.000 Millions secured by way of Hypothecation of moveable properties of Sinter Plant of the Company at Siltara Growth Centre Raipur. ii. Rs. 198.388 millions secured by way of mortgage of all immoveable properties of the Sponge Iron and Power Plant (I) of the Company and hypothecation of the whole of moveable properties both present and future of the said plants, save and except book debts. iii. Rs. 452.844 millions secured by way of mortgage of all immoveable properties of the Sponge Iron and Power Plant (II) of the Company and Hypothecation of the whole of moveable properties of the said plants except book debts, which is subject to the prior charge created on Book Debts in favour of Bankers to Corporate Ispat Alloys Limited for its working capital requirements. iv. Rs.1752.165 Millions secured by way of Mortgage of land admeasuring 20.233 acres at Siltara Growth Centre at Raipur, the immovable and movable properties of a company in which some of the Directors of the Company are interested and, hypothecation of the whole of moveable properties both present and future, save and except book debts relating to Steel Melt Shop (SMS) and Rolling Mills at Siltara Growth Centre, Raipur. v. Rs. 47.384 millions secured by way of hypothecation of the specific Equipments financed. vi. Rs.3388.889 millions secured by way of mortgage of all immoveable / moveable properties of the Company other than those referred to in note (i) to (v) above, ranking pari passu inter-se and by hypothecation of the whole of moveable properties both present and future, save and except book debts and assets specifically hypothecated, subject to the prior charge created and / or to be created on Book Debts in favour of Company 's Bankers for its Working Capital requirements. B Vehicle Loans from Banks referred to in (2) above are secured by hypothecation of the specific vehicles financed. C Working Capital Loans from Banks referred to in (3) above are secured by the hypothecation of whole of movable properties including Stocks and Book Debts both present and future, and are further secured collaterally by mortgage of immovable properties of the Company ranking next to the mortgage charge of Financial Institutions and Banks for their Term Loans. D. All the above Loans are guaranteed by some of the
Directors and their relatives in their personal capacities.
Towards
purchases of Raw Material backed by Letters of Credit. Amount repayable within one year is Rs.1083.853 millions
(Previous Year : Rs.831.260 millions) |
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Chaturvedi and Shah Chartered Accountants |
|
Address : |
Mumbai |
|
|
|
|
Name : |
Agrawal Chhallani and Company Chartered Accountants |
|
Address : |
Nagpur |
|
|
|
|
Associates : |
|
|
|
|
|
Subsidiaries : |
|
|
|
|
|
Other Related Parties : |
·
Abhijeet Infrastructure Limited ·
AMR Iron and Steel Private Limited ·
Neco Heavy Engineering and Castings Limited ·
Paranjpe Minerals Private Limited ·
Neco Ceramics Limited ·
Steel and Tube Exports Limited ·
NSSL Limited ·
Corporate Ispat Alloys Limited ·
Jayaswals Ashoka Infrastructure Private Limited ·
Neco Industries Limited |
CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
256000000 |
Equity Shares |
Rs.10/- each |
Rs.2560.0000 millions |
|
6000000 |
Preference
Shares |
Rs.100/-each |
Rs.600.000 millions |
|
|
Total |
|
Rs.3160.000
millions |
|
|
|
|
|
Issued & Subscribed Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
236660904 |
Equity Shares |
Rs.10/- each |
Rs.2366.609
millions |
|
|
|
|
|
Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
236660904 |
Equity Shares |
Rs.10/- each |
Rs.2366.609
millions |
|
|
Less:
Allotment Money Unpaid (from other than
Directors) |
|
Rs.0.072
million |
|
|
Total |
|
Rs.2366.537 millions |
Notes: Of the above shares:
1. 4117500 Equity Shares were allotted as fully paid up bonus shares by capitalisation of General Reserve.
2. (i) 1,39,88,162 Equity Shares of Rs.10/- each fully paid-up were issued pursuant to the Scheme of Amalgamation of Nagpur Alloy Castings Limited and Jayaswals Neco Limited without payments being received in cash.
(ii) 10,10,49,856 Equity Shares of Rs.10/- each fully paid-up were issued pursuant to the Scheme of Arrangement between Inertia Iron and Steel Industries Private Limited and Jayaswal Neco Industries Limited without payments being received in cash.
(iii) 85,92,000 Equity Shares of Rs.10/- each fully paid-up were issued pursuant to the Scheme of Arrangement of Sponge Iron Plant and Power Plant (Demerged Undertakings) of Corporate Ispal Alloys Limited and Jayaswal Neco Industries Limited without payments being received in cash.
(iv) 1,41,35,000 Equity Shares of Rs.10/- each fully paid-up were issued pursuant to the Scheme of Arrangement of Sponge Iron Plant and Power Plant (Demerged Undertakings) of Abhijeet Infrastructure Limited and Jayaswal Neco Industries Limited without payments being received in cash.
As on 30.09.2010
Authorised Capital : Rs.3160.000
millions
Issued & Subscribed Paid-up Capital : Rs. 258.609
Millions
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
2366.537 |
2861.574 |
1623.805 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
3561.039 |
3022.908 |
445.723 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
(70.321) |
|
|
NETWORTH |
5927.576 |
5884.482 |
1999.207 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
9968.158 |
8923.180 |
4168.445 |
|
|
2] Unsecured Loans |
1345.504 |
1142.420 |
1670.095 |
|
|
TOTAL BORROWING |
11313.662 |
10065.600 |
5838.540 |
|
|
DEFERRED TAX LIABILITIES |
700.159 |
356.578 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
17941.397 |
16306.660 |
7837.747 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
11279.030 |
10414.258 |
4372.243 |
|
|
Capital work-in-progress |
353.987 |
1498.301 |
230.616 |
|
|
|
|
|
|
|
|
INVESTMENT |
2.607 |
1.658 |
1.737 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3469.407
|
2782.819
|
2222.422 |
|
|
Sundry Debtors |
1551.697
|
1460.374
|
1116.323 |
|
|
Cash & Bank Balances |
343.320
|
309.638
|
556.917 |
|
|
Other Current Assets |
0.000
|
0.000
|
0.000 |
|
|
Loans & Advances |
2644.492
|
2861.565
|
934.870 |
|
Total
Current Assets |
8008.916
|
7414.396
|
4830.532 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
579.120
|
2089.463 |
|
|
|
Other Current Liabilities |
604.346
|
672.763
|
1260.691 |
|
|
Provisions |
519.677
|
259.727
|
336.690 |
|
Total
Current Liabilities |
1703.143
|
3021.953
|
1597.381 |
|
|
Net Current Assets |
6305.773
|
4392.443
|
3233.151 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
17941.397 |
16306.660 |
7837.747 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
17874.024 |
16110.433 |
14736.299 |
|
|
|
Other Income |
319.930 |
203.128 |
265.080 |
|
|
|
TOTAL (A) |
18193.954 |
16313.561 |
15001.379 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Purchases |
333.285 |
326.352 |
199.540 |
|
|
|
Raw Material Consumed |
10773.509 |
9725.938 |
8960.996 |
|
|
|
Manufacturing Expenses |
2787.887 |
2283.674 |
2812.345 |
|
|
|
Remuneration & Benefits to Employees |
772.673 |
679.010 |
521.918 |
|
|
|
Administrative, Selling & Other Expenses |
657.682 |
1210.505 |
703.965 |
|
|
|
Increase/(Decrease) in Stock |
(353.062) |
14.945 |
(99.081) |
|
|
|
TOTAL (B) |
14971.974 |
14240.424 |
13099.683 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
3221.980 |
2073.137 |
1901.696 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
1382.823 |
1132.709 |
655.760 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1839.157 |
940.428 |
1245.936 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
788.996 |
654.771 |
375.599 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1050.161 |
285.657 |
870.337 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
351.682 |
13.975 |
8.371 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
698.479 |
271.682 |
861.966 |
|
|
|
|
|
|
|
|
|
|
Prior Period
Items |
(0.672) |
(4.063) |
|
|
|
|
|
|
|
|
|
|
|
Income tax of
earlier years |
(6.589) |
0.000 |
|
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
314.106 |
(70.321) |
NA |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transferred from revaluation reserve |
(0.076) |
(0.078) |
|
|
|
|
Transferred from debenture redemption
reserve |
0.000 |
(46.409) |
|
|
|
|
Transferred from amalgamation reserve |
0.000 |
(59.017) |
|
|
|
|
Transferred from general reserve |
0.000 |
(11.304) |
NA |
|
|
BALANCE CARRIED
TO THE B/S |
1005.400 |
314.106 |
NA |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Exports |
156.721 |
136.708 |
126.022 |
|
|
|
Recovery of Freight |
4.174 |
4.624 |
5.384 |
|
|
TOTAL EARNINGS |
160.895 |
141.332 |
131.406 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
2123.949 |
3642.335 |
3190.107 |
|
|
|
Stores & Components |
64.873 |
131.100 |
78.781 |
|
|
|
Traded Goods |
0.000 |
0.000 |
14.069 |
|
|
|
Capital Goods |
15.557 |
143.893 |
5.584 |
|
|
TOTAL IMPORTS |
2204.379 |
3917.328 |
3288.541 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
2.92 |
1.01 |
7.33 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
4601.800 |
4624.500 |
5214.300 |
|
Total Expenditure |
3826.100 |
3779.600 |
4246.000 |
|
PBIDT (Excl OI) |
775.700 |
844.900 |
968.300 |
|
Other Income |
32.100 |
70.300 |
18.300 |
|
Operating Profit |
807.800 |
915.200 |
986.600 |
|
Interest |
340.700 |
367.800 |
356.000 |
|
PBDT |
467.100 |
547.400 |
630.600 |
|
Depreciation |
207.700 |
209.100 |
215.500 |
|
Profit Before Tax |
259.400 |
338.300 |
415.100 |
|
Tax |
85.200 |
134.200 |
121.400 |
|
Profit After Tax |
174.200 |
204.100 |
293.700 |
|
Net Profit |
174.200 |
204.100 |
293.700 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
3.84
|
1.67
|
5.75 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
5.88
|
1.77
|
5.91 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
5.44
|
1.60
|
9.46 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.18
|
0.05
|
0.44 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.20
|
2.22
|
3.72 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
4.70
|
2.45
|
3.02 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY:
Incorporated as a private limited company and converted into a public limited company in Nov.'85, Nagpur Engineering Company (NECO), the flagship of the NECO group, was promoted by Basant Lall Shaw and Arvind Kumar Jayaswal. Company is lead by Basant Lall Shaw as chairman and Arbind Jayaswal as managing director. Commercial operations commenced in 1976 to manufacture cast iron pipes and fittings by setting up the first foundry at Nagpur. It specialised in the manufacture of grey iron castings for railway tracks such as sleepers, brake blocks, bearing plates and municipal/public works castings such as soil/rain water pipes and fittings, manhole covers, etc. In 1987, the second foundry unit was established at Bhilai, MP. With a further increase in demand, the third unit was established in Anjore, MP, in 1991. To diversify its activities, NECO purchased a newly erected solvent extraction plant with a crushing capacity of 200 tcd and refining capacity of 25 tpd in Mar.'93. This was subsequently enhanced to 500 tcd and 50 tpd respectively. The company came out with a public issue in Dec.'94 to fund the expansion-cum-modernisation. In 1995-96, the company proposed to set up a coal washery project in the Chhindwara district of Madhya Pradesh with a capital outlay of Rs.410.000 millions. During the year ended Dec'96, the company has approved the scheme of Amalgamation of Nagpur Alloy Castings Limited along with Jayaswals Neco Limited into the company w.e.f 1st Apr'96. The company has been granted ISO 9002 Certification during the year 1998-1999, for Engineering Castings Division, Centricast Division and Steel Plant Division. A new Subsidiary Company "NECO GLOBAL INC." has been formed in the State of Texas, USA, inorder to offer better services to the customers and also to expand export market further.
MANAGEMENT DISCUSSION AND ANALYSIS:
A] Share Capital:
i ) Allotment of Shares pursuant to
Schemes of Arrangement:
As
reported last year, as a consequences of
implementation of Scheme of Arrangement, the Company has allotted on 25.03.2010, 12,37,76,856 Equity Shares of Rs. 10/-
each credited as fully paid up to the
eligible shareholders of the Transferor
Companies. Further, the Authorised Share
Capital of the Company stands raised by Rs.160.000 millions on account of the
merger of erstwhile Inertia Iron and Steel Industries Private Limited under the
Scheme.
Preferential Allotment of Equity
Shares:
Company stands raised by Rs.160.000
millions on account of the merger of erstwhile
inertia Iron and Steel Industries Private Limited under the Scheme.
ii) Preferential Allotment of Equity Shares:
The Company has, with a view to
augment its long term requirements of fund allotted on 18.05.2010, 1,42,00,000
further Equity shares of Rs. 10each bra cash of Rs. 33.80 per share to Reliance
Capital Trustee Co. Ltd. (A/C Reliance Infrastructure Fund, a Scheme at
Reliance Mutual Fund).
iii) Redemption of Preference Share Capital:
Pursuant to the approval obtained
from the Preference Shareholders of the Company at the meeting held on
26.02.2010. The terms and conditions of preference Share Capital have been
altered. Accordingly, the Company redeemed on 28.02.2010, entire 20,63,385,
0.001% Cumulative Redeemable Preference Shares of Rs. 100/- each and 28.86,985,
10.00% Optionally Convertible Cumulative Redeemable Preference Shares of Rs.
100/- each at premium. The Amount of premium paid on redemption of the
Preference Shares has been appropriated from out of the reserves of the Company
pursuant to the provisions contained in the Scheme of Arrangement.
As a consequence of above,
Authorised and Paid-up Share Capital of the Company as of date in Rs. 3160.000
millions and Rs. 2508.600 millions respectively.
Financial Performance;
The Members may be pleased to
observe that the Company’s performance for the year has significantly improved
over the previous year. The Company’s gross turnover for the year was Rs. 19309.100
Millions which is around 7% higher than the previous years Rs. 18055.300
Millions. The Net Profit for the year at Rs. 698.500 Millions is around 157%
higher than Rs. 271.700 Millions of the previous year. The important
contributory to the Net Profit was higher production, higher sales realization,
lower cost of coke and foreign Exchange gain as compared to foreign Exchange
loss in the previous year.
Increased interest and Financial
Charges for the Company as a whole at Rs. 1389.200 millions as compared to Rs.
1132.700 Millions arising out of increased Working Capital requirements of the
Company has made a dentin the profitability of the Company.
Segment wise performance for the year is as under.
i) Steel Plant Division:
During the year the Steel Plant
Division registered an overall increase in the Production and Sale of around
21% and 30% respectively over the previous year. The sales realisation also of
the Pig Iron, Billets, Rolled Products and Sponge Iron improved significantly
to contribute the higher turnover. However the rising prices of Iron Ore
coupled with shortage of good quality of this material made the day to day
working of the Division a difficult task. There was however, a respsite since
the coke prices during the year showed a downward trend.
ii) Castings Division:
The Castings Division achieved a
higher Production and Sale of around 8% arid 9% respectively over the previous
year; however as result of drop in the sales realisations the turnover has
shown a negative growth of 5%, Despite this, the profitability was higher which
has been achieved through reduced cost of production and various austerity
measures.
There is as impressive growth in
Automotive, Steel, Real estate and Infrastructure sectors which in turn is
generating a good demand for castings. The Company continues to focus on higher
productivity, cast optimization and high quality of castings which are the key
drivers for maintaining the leadership is this business segment.
Outlook:
The fundamental drivers for growth
in demand for steel ri the country are major investments is infrastructure and
increased urbanization which leads to growth in demand for Housing, Automobiles
and White Goods. Timely availability of good quality materials especially Coal,
Iron Ore and efficient logistics support play an important role in ensuring
major investments in infrastructure and increased urbanization.
During the year, the Company has
commenced production in its Wire Rod MiU as wet as Bar Mill. The Company
expects the performance of Bar Mill to further improve in the current year. The
Wire Rod Mill in in the process of stabilization. Additional Wire Rod Block at
the cost of Rs. 600.000 millions is being setup to widen the product range in
this Mill. This additional facility is expected to be ready by September2011.
The Company is also implementing 6
MW Waste Heat Recovery Based Power Plant at Raipur at the cost of Rs. 330.000
millions. The gases generated from the Coke Oven Batteries would be used for
generation of Power at this proposed Plant which would be ready for operation
by February 2012.
Blast Furnace performance during
the last year has not been up to the high performance levels and standards set
by the Company. During the current year the Company plans to set right some of the
technical issues in the Blast Furnace and expects ifs productivity and
performance to improve.
The Non Coking Coal Mine of the
Company at Raigarh in Chhattisgarh is producing Coal to cater to the
requirements for Sponge Iron Plants. The Company has Coking Coal Black at
Moitra Coal Black near Hazaribagh in Jharkhand. On commencement of thin Coking
Coat Mine the Company’s dependence on Import of this vital raw material would
reduce considerably.
The Company has with a view to reap
benefits of captive Coal and Iron Ore Mines, plumed for further development of
its Mines, setting up of Coat Washeries, enhancing capacities in Sponge Iron
Plants and their associated Power Plants. Steel Melt Shop and Rolling Mill in
its existing Sleet Plant Complex. Necessary steps are being taken to for
enhancement of the mining capacities also so as to cater future requirements of
Coal for the proposed expansions.
The Company is in discussions with
Lenders and Investors for achieving financial closures for the proposed
expansions.
FIXED ASSETS:
- Freehold Land
- Leasehold Land
- Building
- Railway Siding
- Plant and Machinery
- Developed Property
- Office Equipment
- Furniture and Fixture
- Vehicles
- Software
- Technical Know-how
- Process Development
WEBSITE DETAILS:
PROFILE:
Subject which started in 1976 as a small
scale iron foundry unit at Nagpur is the flagship company of Neco Group of
Industries which has now become an integrated steel plant of 1 Million Tonne
capacity through Blast Furnace route, Sinter Plant, Oxygen Plant, Coke Oven,
Power Generation with one of the finest infrastructural facilities at its
Siltara, Raipur Plant. It produces alloy steel bars and rods from 5 mm in coils
to 60 mm bars. Another Unit at Siltara produces narrow width HR Coils.
Now it also has its own Coal and Iron Ore mines in the State
of Chhattisgarh and Jharkhand and has undertaken setting up of Thermal Power
Stations of 3240 MW in the State of Chhattisgarh and 500 MW in Jharkhand in the
next few years. The company will soon start operating its coking coal mines in
Jharkhand to feed its existing coke ovens at the Siltara, Raipur plant.
Steel Plant
Division
Subject is a successful and fast growing integrated Steel Plant
spread over 1600 acres of land in the industrial belt of Raipur. Jayaswal Neco
creates value added products and the product mix is widely consumed by
automobile sector, white goods sector, engineering sector, commercial sector
and other manufacturing sectors. We being an integrated steel plant, have our
own units such as Blast Furnace, Sinter Plant, Coke Oven, Direct Reducing Iron
Plant, Steel Melting Shops, Power Plants and Rolling Mills.
Foundry Division
Neco Group is one of the largest foundry group
primarily engaged in the ferrous and non-ferrous castings with a capacity of
1,75,000 tonnes per annum. The products cover a wide spectrum of castings such
as Railway Castings, Engineering Castings, Automobile Castings, Construction
Castings and Valves, catering to the demands of the world. Neco is in technical
collaboration with M/s. Duker of Germany for manufacturing the state-of-the-art
‘Neco Centri’ centrifugally casted cast iron pipes used in building drainage
system. We are the pioneers in this, catering to Indian as well as export
markets. The product has been approved by various Govt./Semi-Govt. Departments,
renowned Architects/Consultants, Private and Public Sector undertakings. The
Group is presently having its manufacturing facilities at Nagpur, Butibori,
Bhilai, Anjora and Raipur, engaged in the manufacturing of Engineering,
Automobile, Valves and Construction Castings.
Mining Division
Chhattisgarh State
An area of about 884.886 Ha for coal mineral with reserves
of about 38.846 Million tons in Raigarh district of Chhattisgarh allotted in
favour of JNIL, which is producing about 0.48 Million tons per annum of coal
mineral.
Another coal block near this deposit namely IV/8 coal block
(491 Hects) with reserves of about 107.2 Million tons allotted by Govt. of
India, Ministry of coal for which forest clearance and Environment clearance
obtained and production is likely to be started within six months.
One iron ore mine namely Metabodeli located near
Bhanupratappur in Kanker district, Chhattisgarh with a proved reserves of about
4.31 millions in 25 ha of forest land and another in Chhotedongar of Narayanpur
district (C.G) over 192.25 Ha with a reserves of about 28.8 millions tons are
in final stage where tree felling by forest dept is being carried out and after
completion of tree felling, the mining operation shall be started .
In addition to the above Mining Leases, Boriya tibbu
District-Rajnandgaon over 51 Ha with a reserves of 2.03 Million tons,
Chhotedongar (additional area of 282.75 Ha) district-Narayanpur, Metabodeli an
additional 50 Ha. with a reserves of 3.98 Million tons, Laindongri over 14.40
Ha with a reserves of 0.7 Million tons, Devpura, district-Rajnandgaon over 70
Ha with a reserves of 3 million tons are under consideration with Govt. of
Chhattisgarh.
The company has also forayed into exploration for iron ore
for which the prospecting Licenses in various area of Chhattisgarh state like
Rowghat Deposit A, B, D and E, a renowned deposit has a total area of 1601 Ha,
Sonadehi over 250 Ha, Barahur dongar over 450 Ha has been approved in which
prospecting by company’s exploration team is being carried out.
Three limestone mine named Khaira-bhatgaon and Manpur in
Rajnandgaon district and one Kathiya in Raipur district has been granted.
Maharashtra State :
In Manegaon, and Dhobitola, Gondia district of Maharashtra
state allotted which are under operation is producing iron ore of suitable
grade.
The Company has been approved mining lease for manganese ore
in Ramdongri, district-Nagpur of Maharashtra state over 61 acres for which
Environment clearance obtained and forest clearance is under process. The
reserve of the mine is estimated about 5 lakh tons
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l Anti-Money
Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.44.69 |
|
UK Pound |
1 |
Rs.73.12 |
|
Euro |
1 |
Rs.64.39 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
|
46 |
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.