MIRA
INFORM REPORT
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Report Date : |
18.05.2011 |
IDENTIFICATION DETAILS
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Name : |
KALYANI STEELS LIMITED |
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Registered Office : |
Mundhwa, |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
28.02.1973 |
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Com. Reg. No.: |
11-016350 |
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Capital Investment / Paid-up Capital : |
Rs.218.644 Millions |
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CIN No.: [Company
Identification No.] |
L27104MH1973PLC016350 |
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TAN No : |
PNEK05371C |
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Legal Form : |
A Public Limited
Liability Company. The Company’s Shares are Listed on the Stock Exchanges |
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Line of Business : |
Manufacturers of Steel
and Steel Products. |
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No. of Employees: |
890
(Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
A (58) |
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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 11075000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well
established and reputed company having fine track. Financial position of the company appears to
be sound Trade relations are reported as fair. Business is active. Payments
are reported to be regular and as per commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
INFORMATION DENIED BY
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Name : |
Mr. Ajay Sharma |
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Designation : |
Director |
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Contact No.: |
91-9820056499 |
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Date : |
17.05.2011 |
LOCATIONS
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Registered/ Corporate Office : |
Corporate Building, 2nd Floor,Mundhwa, |
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Tel. No.: |
91-20-6870806/ 6870807/ 6870435 |
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Fax No.: |
91-20-26821124 |
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E-Mail : |
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Website : |
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Factory : |
Carbon and Alloy
Steel Project located at: |
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Tel. No. : |
91-8539-86603/
86608 |
DIRECTORS
AS ON : 31.03.2010
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Name : |
Mr. B. N. Kalyani |
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Designation : |
Chairman Cum Managing Director |
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Name : |
Mr. Amit B
Kalyani |
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Designation : |
Director |
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Name : |
Mr. S. S.
Hiremath |
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Designation : |
Director |
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Name : |
Mr. S. M. Kheny |
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Designation : |
Director |
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Name : |
Mr. C. G.
Patankar |
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Designation : |
Executive Director |
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Name : |
Mr. B. B.
Hattarki |
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Designation : |
Wholetime Director |
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Name : |
Mr. Sanjay S. Vaidya |
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Designation : |
Director |
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Name : |
Mr. Madan. U. Takale |
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Designation : |
Director |
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Name : |
Mr. Sanjay Nath |
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Designation : |
Senior Vice President |
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KEY EXECUTIVES
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Name : |
Mr. D. R. Puranik |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(As on 31.03.2011)
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) SHAREHOLDING
OF PROMOTER AND PROMOTER GROUP |
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Indian |
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Individual / Hindu
Undivided Family |
48355 |
0.11 |
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Bodies Corporate |
26078 |
59.74 |
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(B) PUBLIC
SHAREHOLDING |
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1. Institutions |
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Mutual Funds/UTI |
846301 |
1.94 |
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Financial
Institutions/Banks |
27002 |
0.06 |
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Foreign Institutional
Investors |
130002 |
0.30 |
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2. Non –
Institutions |
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Bodies Corporate |
4943038 |
11.32 |
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Individuals |
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Individuals shareholders
holding nominal share capital up to Rs.1 lakh
|
9620709 |
22.04 |
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Individuals shareholders
holding nominal share capital in excess of Rs.1 lakh |
1446061 |
3.31 |
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Any Other
(Specify) |
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Non Resident Indians |
206733 |
0.47 |
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Foreign Corporate
Bodies |
686 |
-- |
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Foreign Nationals |
200 |
-- |
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Clearing Members |
305992 |
0.70 |
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Total |
43653060 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of
Steel and Steel Products. |
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Products : |
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GENERAL INFORMATION
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No. of Employees : |
890 (Approximately) |
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Bankers : |
v
Bank
of v
Union
Bank of v
Canara
Bank v
HDFC
Bank Limited v
State
Bank of v
The
Jammu and Kashmir Bank Limited |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Dalal and Shah, Chartered Accountant |
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Address : |
49-55, |
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Associates and Joint Venture : |
v
Hospet
Steels Limited v
Kalyani
Mukand Limited v
**Hikal
Limited v
Bharat
NRE Coke Limited v
Lord
Ganesha Minerals Private Limited v
***Kalyani
Gerdau Steels Limited |
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Subsidiaries : |
v
*Chakrapani
Investments And Trades Limited v
*Suraj
Mukhi Investments And Finance Limited v
*Gladiolla
Investments Limited |
CAPITAL STRUCTURE
AS ON 31.03.2010
Authorised Capital @ :
|
No. of Shares |
Type |
Value |
Amount |
|
95000000 |
Equity Shares |
Rs.5/- Each |
Rs. 475.000 millions |
|
3010000 |
Cumulative Redeemable Preference Shares |
Rs. 100/- Each |
Rs.301.000 millions |
|
2400000 |
Unclassified Shares |
Rs. 10/- Each |
Rs. 24.000
millions |
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Total |
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Rs. 800.000 millions |
Issued :
|
No. of Shares |
Type |
Value |
Amount |
|
43759380 |
Equity Shares |
Rs.5/- each |
Rs.218.796
Millions |
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Subscribed
& Paid-up Capital @:
|
No. of Shares |
Type |
Value |
Amount |
|
43653060 |
Equity Shares, fully paid Total Subscribed and fully paid up |
Rs.5/- each |
Rs.218.265 Millions |
|
106320 |
*Add : Forfeited Equity Shares (Amount Paid up) |
|
Rs.0.379 Millions |
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Total |
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Rs.218.644
Millions |
@ Note : The company in terms of composites scheme of arrangement
approved by the Hon’ble High Court of Judicature at
* Amount received on Equity Shares forfeited on 25th February, 1997 on
account of non-payment of allotment / call money.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
218.644 |
436.910 |
436.909 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
2550.066 |
4720.800 |
4687.700 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
2768.710 |
5157.710 |
5124.609 |
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LOAN FUNDS |
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1] Secured Loans |
1962.008 |
1999.022 |
2164.100 |
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2] Unsecured Loans |
118.331 |
483.570 |
86.600 |
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TOTAL BORROWING |
2080.339 |
2482.592 |
2250.700 |
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DEFERRED TAX LIABILITIES |
421.515 |
438.358 |
0.000 |
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TOTAL |
5270.565 |
8078.660 |
7375.309 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2353.982 |
2552.706 |
2595.300 |
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Capital work-in-progress |
21.270 |
147.050 |
257.700 |
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INVESTMENT |
892.499 |
3365.355 |
2287.500 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
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Inventories |
1238.572 |
1607.765 |
1583.200
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Sundry Debtors |
2276.619 |
1349.621 |
2104.800
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Cash & Bank Balances |
143.833 |
60.012 |
33.300
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|
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Other Current Assets |
32.438 |
58.258 |
0.000
|
|
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Loans & Advances |
1247.016 |
1527.987 |
2388.600
|
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Total
Current Assets |
4937.478
|
4603.643
|
6109.900
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Sundry Creditors |
1841.754 |
1134.669 |
NA
|
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Current Liabilities |
685.422 |
820.281 |
2927.000
|
|
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Provisions |
407.488 |
635.144 |
948.100
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Total
Current Liabilities |
2934.664
|
2590.094
|
3875.100
|
|
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Net Current Assets |
2002.814
|
2013.549
|
2234.800
|
|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
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|
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TOTAL |
5270.565 |
8078.660 |
7375.309 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
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SALES |
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Income |
10581.178 |
9928.183 |
11557.000 |
|
|
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Other Income |
83.025 |
210.853 |
595.200 |
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TOTAL |
10664.203 |
10139.036 |
12152.200 |
|
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|
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Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Material Consumed |
8590.863 |
8585.987 |
6082.100 |
|
|
|
Excise Duty |
0.000 |
0.000 |
2255.800 |
|
|
|
Power and Fuel |
0.000 |
0.000 |
504.100 |
|
|
|
Manufacturing Expenses |
0.000 |
0.000 |
1223.400 |
|
|
|
Employees Cost |
205.952 |
0.000 |
246.900 |
|
|
|
(Increase) / Decrease in Finished Goods |
0.000 |
260.675 |
(327.900) |
|
|
|
Selling and Administrative Expenses |
0.000 |
0.000 |
401.800 |
|
|
|
Miscellaneous Expenses |
0.000 |
673.39 |
340.500 |
|
|
|
Other Expenses |
791.169 |
0.000 |
0.000 |
|
|
|
TOTAL |
9587.984 |
9520.052 |
9673.400 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION |
1076.219 |
618.984 |
2478.800 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES |
263.798 |
284.369 |
169.300 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION |
812.421 |
334.615 |
2309.500 |
|
|
|
|
|
|
|
|
|
Less |
DEPRECIATION/
AMORTISATION |
311.386 |
320.014 |
1058.300 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) |
501.035 |
14.600 |
1251.200 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
68.278 |
(18.458) |
352.400 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
|
432.757 |
33.057 |
898.800 |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
2210.301 |
33.057 |
898.800 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
1320.847 |
2535.877 |
1941.281 |
|
|
|
Stores & Spares |
1957.780 |
1290.780 |
1689.835 |
|
|
TOTAL IMPORTS |
3278.627 |
3826.657 |
3631.116 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
9.93 |
0.76 |
18.15 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
3366.390 |
3152.020 |
2639.950 |
|
Total Expenditure |
2999.710 |
2867.850 |
2430.290 |
|
PBIDT (Excl
OI) |
366.680 |
284.170 |
209.660 |
|
Other Income |
5.060 |
24.260 |
57.440 |
|
Operating
Profit |
371.760 |
308.430 |
267.090 |
|
Interest |
42.260 |
51.850 |
40.620 |
|
Exceptional
Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
329.500 |
256.580 |
226.470 |
|
Depreciation |
72.540 |
75.500 |
71.960 |
|
Profit
Before Tax |
256.960 |
181.080 |
154.520 |
|
Tax |
56.850 |
38.630 |
48.230 |
|
Reported PAT |
201.110 |
142.450 |
106.290 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
201.110 |
142.450 |
106.290 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total
Income |
% |
4.05 |
0.33 |
7.40 |
|
|
|
|
|
|
|
Net Profit
Margin (PBT/Sales) |
% |
4.73 |
0.15 |
10.83 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total
Assets} |
% |
6.32 |
0.20 |
14.37 |
|
|
|
|
|
|
|
Return on
Investment (ROI) (PBT/Networth) |
|
0.18 |
0.00 |
0.45 |
|
|
|
|
|
|
|
Debt Equity
Ratio (Total
Liability/Networth) |
|
1.81 |
0.98 |
1.20 |
|
|
|
|
|
|
|
Current Ratio (Current
Asset/Current Liability) |
|
2.46 |
1.78 |
1.58 |
LOCAL AGENCY FURTHER INFORMATION
DETAILS OF SUNDRY
CREDITORS
(Rs.
In Millions)
|
Particulars |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
Sundry Creditors |
|
|
|
|
Due to Micro and Small Enterprises |
0.887 |
0.875 |
NA |
|
Due to Other than Micro and Small Enterprises |
1840.867 |
1133.794 |
NA |
SUMMARY OF THE SCHEME OF ARRANGEMENT
The Hon’ble
High Court of Judicature at Bombay has passed an order on 12th March,2010,approving
the scheme of Arrangement (‘’Scheme’’) between Kalyani steels Limited(‘’
KSL/Demerged Company’’) and Chakrapani Investments and Traders
Limited(‘’Chakrapani’’) and Surajmukhi Investment and Finance Limited(‘’
Surajmukhi’’) and Gladiolla Investments Limited (‘’Gladiolla’’) (‘’Amalgamating
Companies’’) and Kalyani Investment Company Limited (‘’ KICL / Resulting
Company’’) and their respective shareholders.
The company has received the Authenticated Copy
of the order on 25th March, 2010 and filed the same with registrar
of Companies, Pune on 31st March,2010. The scheme has therefore
become effective on 31st March, 2010
Sailent features of the scheme:
KSL/Demerged
Company is engaged in the business of manufacture of carbon and Alloy steel
under mini blast furnace (MBF) route and holding investments through Investment
Division KSL thought appropriate to re-organise its business by way of demerger
of its Investment Division into KICL/Resulting Company and subsequent merger of
chakrapani,Surajmukhi and Gladiolla into KICL/Resulting company.
The
Re-organisation of businesses as contemplated in the scheme is beneficial to
both, the companies and their shareholders as it will enhance shareholder
value. The current equity Equity shareholders of the KJSL/Demerged company
would continue to remain its shareholders, as also become shareholders of KICL
/Resulting company, thereby giving them an opportunity to participate in the
management, operations, decision-making and profits of both the companies. it
also gives the shareholders the flexibility to invest in only one of the two
listed companies.
The re-organisation of business as contemplated
in the scheme would, interalia, will also have the following benefits:
a) The sepration
of non-core business from the core business and independent management of each
of the businesses and adoption of strategies necessary for the growth of
respective businesses.
b) By
demerger of Investment Division and merger of Amalgamating Companies into
KICL/Resulting Company, the financial resources will be conveniently of funds
and reduction of administrative and manpower expenses and overheads which are
presently being multiplicated, being separate entities.
C) Greater internal control on the business
processes by combining similar businesses together and ease of decision-making
of respective verticals.
d) The
nature of technology, risk and competition involved in each of the businesses
is distinct from each other consequently each business or undertaking is
capable of addressing independent business
opportunities,
deploying different technologies and attracting different sets of investors,
strategic partners, lenders and other stakeholders.
History
Subject is promoted by B N Kalyani, was established in 1973
and has its works at Mundhwa, Pune. The company is one of the leading mini
steel plants manufacturing forging quality carbon and alloy steels using the
electric arc furnace route. KSL produces engineering and alloy steel ingots,
blooms and billets conforming to international standards. Its products range
between 36 mm and 140 mm in diameter. KSL has absorbed various technologies
from Aichi Steels,
Subject has also set up an electro-slag refining (ESR) plant to manufacture
ingots with a maximum diameter of 800 mm. The company went public in Sep.'92
with an issue of FCDs and NCDs with warrants attached to part-finance its
seamless pipe project at Baramati near Pune.
In Jan.'95, the company transferred its 90,000-tpa carbon and alloy steel
seamless tubes plant at Baramati Pune, to Kalyani Seamless Tubes, a company
promoted especially to take over this project. During the year 1999-2000,
Kalyani Seamless Tubes, a company promoted by Kalyani Steels merged with Indian
Seamless Tubes Ltd.
The subsidiaries of the company are Chakrapani Investments
and Trade Limited, Surajmukhi Investments and Finance Limited and Gladiolla
Investments Limited, Kalyani Steels Limited (KSL), has teamed up with the
US-based Carpenter Technology Corporation(26% stake) to set up a joint venture,
Kalyani Carpenter Special Steels Ltd to manufacture high value-added steels.
Carpenter and Kalyani have established a second joint venture, Kalyani Carpenter
Metal Centres Limited, for opening distribution centres.
For captive consumption purposes the company intends to set
up a 7.5 MW capacity power plant by using blast furnace gas generated by the
mini blast furnaces. By setting up the power plant the company expects to bring
down the input cost of steel prodcution and increase the competitiveness of the
end products. The project cost is pegged to be around Rs. 0.270 million and
would be financed by way of internal accruals and debts. During April 2005 the company
has commissioned the power plant which uses the blast furnace gases generated
by mini blast furnaces at a total capital expenditure of Rs. 0.251
million.
The Company has entered into an agreement with Gujarat NRE
Coke Ltd for setting up of coke oven batteries project. The company has
contributed to 40% equity stake in Bharat NRE Coke Ltd (BNCL). BNCL has planned
to set up eight coke oven batteries at Dharwad, Karnataka. During April 2005
the company has commissioned the first coke oven battery and the second battery
is in process and both the batteries taken together are expected to produce
5400 tonnes per month of coke. The project is expected to be completed by
November 2005.
In the 2004-05 the company has commenced a project for integrated steel
manufacturing project of 30000 TPA at village Ginigera, Koppal, Karnataka. The
company will commission 350m3 capacity Mini Blast Furnace, Coal based Sponge
Iron Plant of 350 TPD capacity and Po r plant to utilize the engery of the flue
gases generated in the above processes in the first phase and in the second
phase it will commission steel melting shop and Rolling Mills.
Further the company has entered into lease agreement with Shree Ram Electrocast
Private Limited to lease the pig iron making facilities consisting of one mini
blast furnace of 175m3 capacity, pig casting machine, raw material handling
system, electrical facilities including 2.5 MW captive power plant etc. This
facility is located at Village Honarhalli and Halekote,
Subject was merged with the company through a scheme of Amalgamation. According
to the Scheme of Merger the company has issued 2 equity shares of Rs.10/- each
of the company to the shareholders of KFIL for every 9 equity shares of Rs.10/-
each held by them in KFIL.
YEAR EVENTS 1973 - The company was incorporated
on 28th February, at Pune. The company was promoted by Mr. B.N. Kalyani. The
Company manufacture mild steel/carbon/alloy steel ingots and billets and
chemicals.
1979 - The company entered into a
technical and management consultancy contract with the Gulf Venture, Company at
1981 - The Company promoted a new
company under the name and style of Kalyani Brakes Limited., to manufacture 1,00,000 sets
of hydraulic air and air over hydraulic brakes and brake systems in
collaboration with Bendix Group of Companies, U.S.A.
1982 - The Company received a letter
of intent for the manufacture of additional 18,000 tonnes of steel per annum.
The Company negotiated with Hiremates Chemicals Limited (HCL), to run its chemical
manufacturing unit for a period of 5 to 7 years.
- The
Company undertook to set up a seamless pipe project at Baramati, Dist. Poona in
1983 - Chakrapani Investment and
Trader Limited.
and Suryamukhi Investment and Finance Limited. became wholly owned
subsidiaries of the Company.
-
Surajmukhi Investment and Finance Limited. and Hikal Chemical Industries Limited are subsidiaries of the
Company.
- 3,
00,000 Bonus Equity shares allotted in the prop. 1:2 on 7th November.
1984 - The Manufacture of chemicals
was undertaken on a pilot project basis.
- 2,25,000
No. of equity shares offered at par for public subscription during April.
1985 - Laddle Furnace Vacuum
Degassing Equipment was installed.
- In April,
50,000-15% secured non-convertible redeemable debentures of Rs 100 each were
privately placed with Army Group Insurance Directorate. These debentures are
redeemable at a premium of 5% after 7 years from the date of allotment.
- In
April, the Company issued 1,12,500-15% secured, non-convertible redeemable
debentures of Rs 100 each as rights in the proportion 1 debenture for every 10
shares held. These debentures are redeemable at a premium of 5% at the end of 7
years from the date of allotment. 1986 - The company installed on ultra high
power furnace to commence ferrous and non-ferrous casting manufacturing
activity.
1987 - During the year, the Company
undertook installation of electro-slag refining facility and continuous casting
unit with a view to modernizing and upgrading the manufacturing technology.
-
56,250 No. of equity shares issued at par for the benefit and welfare of Senior
Executives of the Company.
1989 - Dandakaranya Investment and
Trading Limited.,
Dronacharya Investment and Trading Limited., Hastinapur Investment and Trading Limited., Cornflower Investment and
Finance Limited
and Campamela Investment and Finance Limited ceased to be subsidiaries with
effect from 12th October, 1989.
-
11,81,250 bonus equity shares issued in prop. 1:1 on 4th April.
1990 - The Company offered
33,07,500-14% Secured Redeemable Partly convertible debentures of Rs 150 each
to the equity shareholders and employees on rights basis in the proportion of 2
debentures: 3 equity shares held all were taken up. 11,66,666 debentures were
issued to the public through the prospectus (all taken up).
- These
debentures consist of part A of Rs 60 and part B of Rs 90. Part A of Rs 60 will
be automatically and compulsorily converted into one equity share of Rs 10 each
at a premium of Rs 50 per share on the expiry of 6 months from the date of
allotment. Part B of Rs 90 will be a non-convertible portion of the debentures
redeemable at par in three equal annual installments at the end of the 6th, 7th
and 8th year from the date of allotment.
- The
Company also issued 19,90,000-14% secured redeemable non-convertible debentures
of Rs 100 each on rights basis in the proportion of 21 debentures: 50 No. of
equity shares held (81,462 debentures were taken up). The balance 18,84,890
debentures were allotted to financial institutions. These debentures are
redeemable at a premium of 5% at the end of 7 years from the date of allotment.
-
12,62,500 bonus equity shares issued in prop. 1:1 on 1st December.
1991 - The Company allotted
5,00,000-19% secured redeemable non-convertible debentures of Rs 100 each and
12,00,000-19% secured redeemable debentures of Rs 100 each to financial
institutions on private plant basis.
- These
are redeemable at a premium of Rs 5 per debentures at the end of 6th, 7th and
8th year from the date of allotment i.e. 3.2.1992 and 14.2.1992 respectively.
1992 - The Cold Pilger mill HPT 90
and HPT 55 were installed.
- The Company
undertook to set up facilities for carrying out threading and coupling of
seamless pipes to enable the Company explose oil country tubular goods market
more effective.
- During
September, the company had offered 46,00,000-16% fully convertible debentures
of Rs 155 each on Rights basis in prop. 1 deb: 2 equity shares held.
-
Another 2,30,000 debentures were issued to the employees' on an equitable basis
(only 54,050 debs. taken up).
- Each
debenture was to be converted into one equity sum of Rs 10 each at a premium of
Rs 145 per share on expiry of 6 months from date of allotment of debentures.
Accordingly 46,54,060 No. of equity shares were allotted.
- The
Company also offered 12,88,000-16% non-convertible debentures on Rights basis
in proportion 7 debs: 50 equity share held.
-
Another 64,400 debentures were issued to employees on equitable basis (only 100
debs. taken up). Each debenture had a warrant attached entitling the holder to
apply for 1 equity share at a premium of Rs 165 per share.
1994 - During February-March the
Company offered 90,85,000 Rights equity shares of Rs 10 each at a premium of Rs
50 per share in prop. 3:5 (all were taken up) on 19th April.
1995 - The Company embarked upon an
integrated steel making project of 2,90,000 tpa at village Ginegera, dist.
Raichur in Karnataka. The entire project has been divided into two parts and
was being set up in technical arrangement with Tata Korf Engineering Services Limited. for usage of korf technology
from
- The
first part of the project for manufacturing of pig iron is being set up by
Kalyani Ferros Industries Limited. (KFIL) with a capacity 2,40,000 tpa.
- The second
part of the project i.e. more cost effective carbon and alloy steel plant
having a capacity of 2,90,000 tpa was being set up for which the hot metal was
to be provided by KFIL, as an input for production of billets and rounds.
1997 - The Company entered into a
joint venture agreement with Carpenter Technology Corporation,
1998 - The company has fully
implemented the cost effective Carbon and Alloy Steel project through the Mini
Blast Furnace route at Ginigera. Trial runs of the Hospet Project have shown
good results.
1999 - Crisil today undertook a
four-category downgrade of the BBB+ (moderate safety with relatively higher
standing within the category) rating assigned to two non-convertible debenture
(NCD) issues of Kalyani Steels Ltd. for an aggregate amount of Rs 569.000
Millions, to D (default grade).
-
Kalyani Steels, has exported its first consignment of high value-added special
steel to the
- The
company has been formed to manufacture high value-added steels like stainless
steel, tool steel, and die steel for the world markets. These products will
find high-tech applications in the automotive, electronics and engineering
industries.
2000 - Kalyani Steels Limited is setting up a new plant at
Ranjangaon to manufacture higher alloy steel grades.
-
Kalyani Carpenter, a joint venture between Kalyani Steels and Carpenter
Technology USA has opened its first steel services centre in Pune district to
provide rapid delivery of stock anywhere throughout India.
-
Private sector steel majors Tisco, Kalyani Steel and the public sector Steel
Authority of India are all set to form a three-way joint venture for
undertaking e-commerce activities in the steel sector.
- The
Company intend to acquire 18,64,700 No. of equity shares of Rs 10 each of Hikal
Chemical Industries Limited together with 18,64,700 No. of equity shares proposed to be
issued by HCIL as bonus shares for a total consideration of Rs 71,048,690 from
the company's wholly-owned subsidiary Surajmukhi Investments and Finance Ltd.
2001 - Kalyani Steel has sold
43,53,472 No. of equity shares of Bharat Forge Limited and 22,231,052 No. of equity
shares of Kalyani Carpenter Special Steel for a consideration of Rs 96 crore to
KSL Holdings. - The management of the Pune-based Kalyani Steels has transferred
its entire holding in Bharat Forge and in its joint venture, Kalyani Carpenter
Special Steels, to a newly formed company, KSL Holdings, for a total
consideration of Rs 960.000 Millions.
2003
-Shareholders
approve the scheme of arrangement between Kalyani Ferrous Industries Limited. with the Company
The company’s fixed
assets of important value include leasehold land, buildings, plant and machinery,
electrical installation, furniture\office equipments, vehicles and Aircraft’s
The Year in
Retrospect:
On the backdrop of disastrous 2008-09, which also had continued negative impact on the first six months of the current year, the Company performed reasonably well during the year 2009-10. the Company was able to increase the operational levels and sold 184,329 MTs of Steel during the year 2009-10 as compared to 132,435 MTs in the year 2008-09, representing a growth of 39.18%.
The Company's products were primarily targeted towards Heavy Commercial Vehicle and Medium Commercial Vehicle Segments. In view to diversify, the product mix, the Company had taken several initiatives by adding new products which were used in passenger cars and two wheeler industries. Various micro alloyed steel grade products were also offered to the customers to replace high cost alloy steels. Apart from this the Company developed products for use in railways and defense sectors.
These initiatives taken by the Company in aiming newer market segments and diversifying customer base would
continue, ensuring consistent and sustainable top line and bottom line growth over years to come.
MANAGEMENT DISCUSSION
AND ANALYSIS :
The Board takes pleasure in presenting your Company's Thirty-Seventh Annual Report for the year 2009-10 along with the compliance report on Corporate Governance. This chapter on Management Discussion and Analysis forms a part of the compliance report on Corporate Governance.
Industry Structure
and Development:
The Indian Steel Industry weathered the global economic crisis fairly well. Even in the tough times of economic slowdown, the Industry succeeded to sustain its positive growth momentum on the strong fundamentals of domestic demand from construction, automobile and infrastructure sectors.
Emerging out of the world economic crisis with only minor bruises, the industry is poised to enter a growth phase and is on the threshold of a major transformation. In terms of demand, Indian Steel Industry is fortunately placed and this should spur its growth.
The path to economic development is very much linked to
development of infrastructure. As of now, there has been under investment in
infrastructure sector, which is most likely to change in coming years. Demand
for steel will expand as the investments in infrastructure increases.
Additionally, as the economy grows, the per capita steel consumption which
currently stands at 44 kg per year compared to
Growth in manufacturing sector especially in automobile and construction, is expected to result in additional steel demand.
Company Performance :
> Gross Turnover - Rs.11,535 Million
> Profit before Taxation - Rs.501 Million
> Profit after Taxation - Rs.433 Million
Turnover includes Trading Turnover of Rs.2,541 Million and Manufacturing Turnover of Rs.8,994 Million.
Manufacturing turnover includes sale of Rolled Products, As Cast Blooms, Pig Iron, Misc. Sales and Conversion Charges received. The Company sold 158,239 tonnes of 'Rolled Products' aggregating Rs.6,616 Million, 26,090 tonnes of 'As Cast Blooms' aggregating Rs.722 Million and 199 tonnes of 'Pig Iron' aggregating Rs.4 Million. Misc. Sales amounted to Rs.261 Million and Conversion Charges received were Rs. 1,391 Million. The Manufacturing Turnover includes exports of 8,848 tonnes of steel, aggregating Rs.285 Million.
Internal Control
Systems and their Adequacy :
The Company strongly believes that Internal Control Systems are necessary for good Corporate Governance and that the freedom of management should be implemented through the framework of proper checks and balances.
The Company has in place an effective system of internal controls to ensure that all assets are properly safeguarded and protected and used optimally and financial transactions are reported accurately.
As a part of the internal control system, the Company has engaged services of the professional firm to carry out independent internal audit and to monitor the entire operations and functions on a regular basis. The top management and the Audit Committee of the Board review the findings and recommendations of the internal audit and ensure that the recommendations of the internal audit are implemented effectively.
Opportunities,
Threats and Future Outlook:
In the steel industry, cost is the main driver for competitiveness and the majority of the cost of production is contributed by raw materials, mainly iron ore and metallurgical coke. Prices for these raw materials, are increasing significantly in the last few months, leading to increased cost of steel production.
Indian automotive production has increased by 26% in 2009-10 on YOY basis. This has resulted into increased demand for automotive steels. Domestically, new capacities have been added. These new plants, with latest technologies, have economies of scale leading to cost competitiveness. Increased availability of steel, resulting in short term supply / demand mismatch, could pose challenges to the steel industry.
To cope up with these challenges and to achieve cost competitiveness the Company has also taken several initiatives like long term arrangements for iron ore and coke, setting up captive power plant etc. In addition to this, the Company has also taken steps for getting allocation of iron ore and coal mines.
Medium to long term outlook for the steel sector remains positive, commensurate with economic growth.
While Indian Steel Industry has cut costs and have reasonably healthy bottom lines, their challenges lies in modernizing the existing plants. They must invest in enabling technologies that includes automation, improving skills of human assets and providing them necessary technology tools. This would enhance their ability to compete with global steel producers.
As Per Website Details
Subject is a
part of the over $2.1 billion Kalyani Group. Established in 1973, Subject is a leading
manufacturer of forging and engineering quality carbon and alloy steels using
the Blast Furnace route.
With its corporate headquarters in Pune, Subject. Was set up
to fulfill the in-house requirements of forging quality steel of the Kalyani
Group.
In 1997, the Kalyani Group set up a new plant to manufacture
steel using the less power intensive mini-blast furnace route. The new facility
is at Ginigera in the Hospet-Bellary region of Karnataka state, where iron ore
is abundantly available. This integrated steel complex has capacity of 400,000
tpa of carbon and alloy steels, which is being expanded to 650,000 tpa.
Over the years, Kalyani Steels has been continuously
upgrading its technology and infrastructure. The facilities at subject are at
par with any sophisticated steel manufacturers in the world.
Although the forging industry in
Subject has earned the status of preferred steel supplier
for engineering, automotive, seamless tube and primary aluminum industry.
Facilities:
Rupee Term Loans:
(i) Canara Bank – Term Loan
(ii) Bank of Baroda – Term Loan
(iii) Union Bank of
(iv) The Jammu and Kashmir Bank Limited – Term Loan
(v) HDFC Bank Limited – Term Loan
(vi) State Bank of
Above loans are secured by mortgage of Company’s immoveable properties
consisting of land together with all buildings and structures thereon and all
plant and machinery, attached to the earth or permanently fastened to anything
attached to the earth, both present and future hypothecation of whole of the moveable
fixed assets / Properties of the company, including its movable plant and
machinery, machinery spares, tools and accessories and other movable fixed
assts, both present and future, ranking pari passu with charges created and /
or to be created in favour of the true less for debenture holders and banks/
Financial Institutions for their term / foreign currency loans.
Guarantees aggregating Rs. 900.000 (previous year Rs. 900.000) given by
the Company’s Bankers under the Non-Fund based Working Capital Limits are
secured together with the fund based Working Capital Limits against
hypothecation of stores, raw materials, stock in progress, finished goods and
book debts.
The Company has entered into an “Equity Share Purchase, Share Subscription
and Shareholders Agreement and Preference Share Purchase Agreement” with SJK
Steels Plant Limited, its Promoter and other shareholders to acquire
substantial control though purchase of existing Equity and Preference Shares
held by “Selling Shareholders”, post and subject to restructuring of SJK Share
Capital and fulfillment of certain terms and conditions, detailed in the
Agreement. In terms with the said agreement the company has paid advance of Rs.
2.4000 millions towards the purchase of Equity Shares and Rs. 3.000 millions
towards the purchase of Preference Shares.
Scheme of Companies / Arrangement between SJK and its Secured Creditors,
Equity and Preference Shareholders has been filled with The High Court of
Judicature at Andhra Pradesh at
Pending Fulfillment of conditions precedent to acquisition, the amount of
Rs. 5.400 millions paid by the company has been disclosed as “Advance for
purchase of Shares”.
The Company has entered into agreements in the nature of lease/ leave and
license agreement with different lessors / licensors for the purpose of
establishment of premises and accommodation of executives. These are generally
in the nature of operating lease / leave and license and period of agreements
is generally for one year and renewable / cancelable at the option of the
lessee or lessor. In view of above there are no disclosures required as per
Accounting Standard 19 “Leases” issued by the
However, the Company has entered into agreement in the nature of lease
with regard to assist taken on lease.
Disclosure required as per Accounting Standard 19 with regard to the
assets taken on lease are as under:
i. There are no transactions in the nature of sub-lease.
ii. Payments recognized in the profit and loss Account for the year ended
31.03.2007 is Rs. 113.191 millions.
About the Kalyani Group:
Apart from Kalyani Steels, the Rs. 20000.000 millions Pune based Kalyani Group
encompasses:
Bharat Forge - The flagship company of the group was established in 1961.It is the largest forging company in Asia and one of the three largest and most technologically advanced commercial forge shops in the world. Bharat Forge manufactures a wide range of forgings and machined components for automotives, diesel engines, railways, earthmoving, cement, sugar, steel, coal, ship building and oilfield industries.
Kalyani Brakes
Limited - Established in
1982, when the automative revolution in
Kalyani Lemmerz Limited - The Kalyani Group had promoted Kalyani
Wheels as a part of its diversification plan. At that time they had
collaboration with
Kalyani Sharp India Limited - Was established in 1986 as a joint
venture between Sharp Corporation,
Kalyani
Thermal Systems Limited - Established in 1979, this company specialises in
design, construction and installation of custom engineered Industrial Heat
Processing Systems. To stay apace with the latest technology, the company has a
technical tie-up with Flinn and Dreffein Engineering Company,
CMT REPORT (Corruption, Money Laundering and 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. 45.07 |
|
|
1 |
Rs. 72.97 |
|
Euro |
1 |
Rs. 63.57 |
SCORE and RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
58 |
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 and 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.