1. Summary Information
|
|
|
Country |
|
|
Company Name |
RATHI STEEL AND
POWER LIMITED |
Principal Name 1 |
Mr. Prem Narayan Varshney |
|
Status |
Moderate |
Principal Name 2 |
Mr. Pradeep Rathi |
|
|
|
Registration # |
55-005905 |
|
Street Address |
24/1A, Mohan
Co-Operative Industrial Estates, |
||
|
Established Date |
17.12.1971 |
SIC Code |
-- |
|
Telephone# |
91-11-26991060 |
Business Style 1 |
Manufacturer |
|
Fax # |
91-11-26991063 |
Business Style 2 |
-- |
|
Homepage |
Product Name 1 |
Wire Rods |
|
|
# of employees |
Not Available |
Product Name 2 |
TMT Bars |
|
Paid up capital |
Rs.313,081,110/- |
Product Name 3 |
-- |
|
Shareholders |
Promoter and
Promoter Group – 50.75 % Public
shareholding – 49.25% |
Banking |
State Bank of |
|
Public Limited Corp. |
YES |
Business Period |
40 Years |
|
IPO |
YES |
International Ins. |
- |
|
Public |
YES |
Rating |
B (30) |
|
Related
Company |
|||
|
Relation
|
Country
|
Company
Name |
|
|
Note |
- |
||
2. Summary
Financial Statement
|
Balance Sheet as of |
31.03.2011 |
(Unit: Indian Rs.) |
|
|
Assets |
Liabilities |
||
|
Current Assets |
1,427,748,000 |
Current Liabilities |
763,980,000 |
|
Inventories |
1,238,289,000 |
Long-term Liabilities |
3,594,141,000
|
|
Fixed Assets |
3,380,560,000 |
Other Liabilities |
37,380,000 |
|
Deferred Assets |
0,000 |
Total Liabilities |
4,395,501,000 |
|
Invest& other Assets |
127,086,000 |
Retained Earnings |
1,465,101,000 |
|
|
|
Net Worth |
1,778,182,000 |
|
Total Assets |
6,173,683,000 |
Total Liab. & Equity |
6,173,683,000 |
|
Total Assets (Previous Year) |
5,728,777,000 |
|
|
|
P/L Statement as of |
31.03.2011 |
(Unit: Indian Rs.) |
|
|
Sales |
8,452,960,000 |
Net Profit |
140,500,000 |
|
Sales(Previous yr) |
7,789,851,000 |
Net Profit(Prev.yr) |
43,785,000 |
MIRA
INFORM REPORT
|
Report Date : |
17.10.2011 |
IDENTIFICATION DETAILS
|
Name : |
RATHI STEEL AND POWER LIMITED (w.e.f. 09.09.2008) |
|
|
|
|
Formally Knows
as : |
Rathi Udyog Limited |
|
|
|
|
Registered
Office : |
24/1A, Mohan Co-Operative Industrial Estates, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
17.12.1971 |
|
|
|
|
Com. Reg. No.: |
55-005905 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.313.081 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L27109DL1971PLC005905 |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The company’s Shares are Listed on
the Stock Exchange. |
|
|
|
|
Line of Business
: |
Subject is engaged in manufacturing of rebars and wire rods. |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
B (30) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Maximum Credit Limit : |
USD 7100000 |
|
|
|
|
Status : |
Moderate |
|
|
|
|
Payment Behaviour : |
Slow but correct |
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|
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Litigation : |
Clear |
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|
|
|
Comments : |
Subject is an established company having moderate track. Trade relations
are reported as fair Business is active. Payments are reported to be slow but
correct. The company can be considered for business dealings with some
cautions. |
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 – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office : |
24/1A, Mohan Co-Operative Industrial Estates, |
|
Tel. No.: |
91-11-26991060 - 62 |
|
Fax No.: |
91-11-26991063 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office / Factory 1 : |
Industrial Area No. 1 A-3, South of |
|
Tel. No.: |
91-120-2840346 - 350 |
|
Fax No.: |
91-120-2840352 - 353 |
|
|
|
|
Factory 2 : |
Village Potapalli, Sikirdi, P.S.,
Burla, District Sambalpur -
768006 , |
|
Tel. No.: |
91-663-2541170 / 2230495 |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. Pradeep Rathi |
|
Designation : |
Managing Director |
|
Date of Birth/Age : |
54 Years |
|
|
|
|
Name : |
Mr. Prem Narayan Varshney |
|
Designation : |
Whole Time Director |
|
Date of Birth/Age : |
58 Years |
|
|
|
|
Name : |
Mr. Shree Kumar Daga |
|
Designation : |
Director |
|
Date of Birth/Age : |
57 years |
|
|
|
|
Name : |
Mr. Dwarka Das Lakhotia |
|
Designation : |
Director |
|
Date of Birth/Age : |
37 Years |
|
|
|
|
Name : |
Mr. Ranjit Khattar |
|
Designation : |
Director |
|
Date of Birth/Age : |
50 Years |
KEY EXECUTIVES
|
Name : |
Mr. Khurana |
|
Designation : |
Legal Advisor |
|
Address : |
F-7, Second Floor, Lajpat Nagar-III, |
|
|
|
|
Name : |
Mr. N. K. Garg |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2011
|
Category of Shareholder |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
8194049 |
26.17 |
|
|
7217103 |
23.05 |
|
Any
Others (Specify) |
478652 |
1.53 |
|
Any Other |
478652 |
1.53 |
|
|
15889804 |
50.75 |
|
|
|
|
|
Total shareholding
of Promoter and Promoter Group (A) |
15889804 |
50.75 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
751245 |
2.40 |
|
|
2253543 |
7.20 |
|
|
3004788 |
9.60 |
|
|
|
|
|
|
4204355 |
13.43 |
|
|
|
|
|
|
5970574 |
19.07 |
|
|
1839833 |
5.88 |
|
|
398757 |
1.27 |
|
Clearing Members |
99711 |
0.32 |
|
|
298996 |
0.96 |
|
|
50 |
-- |
|
|
12413519 |
39.65 |
|
Total Public
shareholding (B) |
15418307 |
49.25 |
|
Total (A)+(B) |
31308111 |
100.00 |
|
© Shares held by
Custodians and against which Depository Receipts have been issued |
-- |
-- |
|
(1) Promoter and
Promoter Group |
-- |
-- |
|
(2) Public |
-- |
-- |
|
Sub Total |
-- |
-- |
|
Total
(A)+(B)+(C) |
31308111 |
-- |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 millionBUSINESS DETAILS
|
Line of Business : |
Subject is engaged in manufacturing of rebars and wire rods. |
|
|
|
|
Products : |
|
|
|
|
|
Brand Names : |
RATHI |
PRODUCTION STATUS
Installed Capacity
As on 31.03.2011
|
Particulars |
Unit |
Installed
Capacity |
|
Steel Bars/TMT/Flat/Wire Rod |
MT |
125000 |
|
Steel Ingot/Billet |
MT |
190000 |
|
Sponge Iron |
MT |
150000 |
Actual Production
As on 31.03.2011
|
Particulars |
Unit |
Actual
Production |
|
Steel Bars ( Tor /TMT) |
MT |
101909 |
|
SS Round in coil |
MT |
23772 |
|
MS Billet |
MT |
72955 |
|
SS Billet (including purchases) |
MT |
39895 |
|
SS Flat got rolled from others |
MT |
12248 |
|
Sponge Iron (including purchases) |
MT |
79026 |
GENERAL INFORMATION
|
Customers : |
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No. of Employees : |
Not Available |
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Bankers : |
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Facilities : |
Notes : 1. Term Loans from banks are secured by :
2. Working capital facilites from banks are secured by :
3. Corporate Loan is secured by first Pari-Passu charge on the Fixed Assets
and second pari-passu charge on current assets of the company (both present
and future) and personal guarantee of promoter / Directors. 4. Vehicles / Equipments Loans are secured by the Hypothecation of
specific assets.
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Banking
Relations : |
-- |
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|
Auditors : |
|
|
Name : |
M. Lal and Company Chartered Accountants |
|
Address : |
III-A, Nehru Nagar, |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
50000000 |
Equity Shares |
Rs.10/- each |
Rs.500.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
31308111 |
Equity Shares |
Rs.10/- each |
Rs.313.081
Millions |
|
|
|
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
313.081 |
301.556 |
258.481 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1465.101 |
1307.774 |
1218.757 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1778.182 |
1609.330 |
1477.238 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3437.874 |
3182.228 |
3072.416 |
|
|
2] Unsecured Loans |
156.267 |
110.823 |
106.057 |
|
|
TOTAL BORROWING |
3594.141 |
3293.051 |
3178.473 |
|
|
DEFERRED TAX LIABILITIES |
25.321 |
74.729 |
67.077 |
|
|
|
|
|
|
|
|
TOTAL |
5397.644 |
4977.110 |
4722.788 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3380.560 |
3302.132 |
3159.018 |
|
|
Capital work-in-progress |
116.615 |
29.067 |
97.593 |
|
|
|
|
|
|
|
|
INVESTMENT |
10.471 |
9.471 |
9.471 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1238.289
|
1167.521 |
1169.224 |
|
|
Sundry Debtors |
844.152
|
560.192 |
425.016 |
|
|
Cash & Bank Balances |
84.562
|
113.658 |
121.049 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
499.034
|
557.424 |
476.401 |
|
Total
Current Assets |
2666.037
|
2398.795 |
2191.690 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
|
|
|
|
|
Other Current Liabilities |
|
|
|
|
|
Provisions |
12.059
|
10.989 |
8.532 |
|
Total
Current Liabilities |
776.039
|
762.355 |
734.984 |
|
|
Net Current Assets |
1889.998
|
1636.440 |
1456.706 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5397.644 |
4977.110 |
4722.788 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income from operation |
8452.960 |
7789.851 |
7962.497 |
|
|
|
Other Income |
19.368 |
12.731 |
10.062 |
|
|
|
TOTAL (A) |
8472.328 |
7802.582 |
7972.559 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Manufacturing Expenses |
7729.333 |
7144.038 |
7170.240 |
|
|
|
Administrative Expenses |
85.616 |
83.807 |
108.199 |
|
|
|
Selling Expenses |
48.684 |
41.462 |
118.050 |
|
|
|
Increase / Decrease in Stock |
(88.983) |
(16.038) |
40.603 |
|
|
|
TOTAL (B) |
7774.650 |
7253.269 |
7437.092 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
697.678 |
549.313 |
535.467 |
|
|
|
|
|
|
|
|
|
Less |
INTEREST AND
FINANCIAL EXPENSES (D) |
386.754 |
305.727 |
302.184 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
310.924 |
243.586 |
233.283 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
197.380 |
181.548 |
158.666 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
113.544 |
62.038 |
74.617 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
(26.956) |
18.253 |
(36.713) |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
140.500 |
43.785 |
111.329 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
288.650 |
275.854 |
193.056 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
20.000 |
20.000 |
20.000 |
|
|
|
Dividend |
9.392 |
9.392 |
7.292 |
|
|
|
Tax on Dividend |
1.560 |
1.596 |
1.239 |
|
|
BALANCE CARRIED
TO THE B/S |
398.198 |
288.651 |
275.854 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
4.57 |
1.80 |
4.58 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 1St
Quarter |
|
Net Sales |
2061.580 |
|
Total Expenditure |
1856.970 |
|
PBIDT (Excl OI) |
204.610 |
|
Other Income |
2.670 |
|
Operating Profit |
207.280 |
|
Interest |
120.160 |
|
Exceptional Items |
0.000 |
|
PBDT |
87.110 |
|
Depreciation |
51.720 |
|
Profit Before Tax |
35.400 |
|
Tax |
0.000 |
|
Provisions and contingencies |
0.000 |
|
Profit After Tax |
35.400 |
|
Extraordinary Items |
0.000 |
|
Prior Period Expenses |
0.000 |
|
Other Adjustments |
0.000 |
|
Net Profit |
35.400 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
1.66
|
0.56 |
1.40 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
1.34
|
0.80 |
0.94 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
1.88
|
1.09 |
1.39 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.06
|
0.04 |
0.06 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.46
|
2.52 |
2.65 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.44
|
3.15 |
2.98 |
LOCAL AGENCY FURTHER INFORMATION
PERFORMANCE REVIEW
The Gross sales for
the financial year were Rs.8450.000 Millions as against Rs.7790.000 Millions
for the previous financial year.
FUTURE OUTLOOK
The Chinese and
Indian economies have been the fastest economies. However, this has led to
inflationary pressures which have forced central bank to raise interest rates.
India has acquired
a central position on the global steel map with its giant steel mills,
acquisition of global scale capacities by players, continuous modernization and
up gradation of old plants, improving energy efficiency, and backward
integration into global raw material sources. Global steel giants from across
the world have shown interest in the industry due to its phenomenal
performance. For instance - the crude steel production in
Given its direct
correlation to GDP growth, they expect the Indian steel industry to experience
robust growth in the future. They believe the sector’s long term positive
indicators will exceed its challenges. Indian steel industry plays a
significant role in the country’s economic growth. The major contribution
directs the attention that steel is having a stronghold in the traditional
sectors, such as infrastructure and constructions, automobile, transportation,
industrial applications etc. Moreover, steel variant stainless steel is finding
innovative applications due to its corrosion resistive property. According to
Fitch Ratings also outlook for Indian steel producers is stable for 2011 in the
agency’s published report. The stable outlook is supported by an expected
increase in domestic steel demand during the year due to growth in automobiles,
white goods and construction sectors coupled with the continuous thrust of the
Indian government on infrastructure spending. Fitch expects
The global
stainless steel industry has been witnessing a steady growth for some time now.
The quarter by quarter figures have indicated an upward movement in stainless
steel production so far for the present financial year. As one of the leading
countries catering to the demand for stainless steel,
The company
manufactures long products. With increase in demand there is a growth in number
of players and capacity too. The company’s endeavour will be to maintain its
position in long segment of steel products. Alongside the company also
manufactures stainless steel products and has made serious efforts to increase
the share of value added products in the total product mix which has not only
resulted in increased volume of stainless steel rolled products, but also
enabled the company to improve the operating margins.
Continuous R and D
activities, relentless marketing efforts and strong emphasis on production of
quality products have led to substantial increase in the share of stainless
steel products as compared to previous year. Looking at the great potential in
this segment, as the per capita consumption of stainless steel remains very low
as compared to rest of the world, the company will not only strive to further
improve the product mix by utilizing existing facilities, but also study option
of expanding the capacities of stainless steel / alloy steel.
MANAGEMENT
DISCUSSION AND ANALYSIS
FORWARD LOOKING
STATEMENTS
This report contain forward looking statement which may be identified
by their use of words like plans, expects, will, anticipates, believes, intends,
projects estimates or other words or similar meaning. All statements that
address expectations or projections about the future including but not limited
to statement about the company’s strategy for growth product development,
market position expenditure and financial results are forward looking
statement. Forward looking statement is based on certain assumption and
expectation of future events. The Company cannot guarantee that these
assumptions and expectations are accurate or will be realized. The Company’s
actual results performance or achievements could thus differ materially from
those projected in any such forward looking statements. The Company assumes no
responsibility to publicly amend modify or revise any forward looking statement
on the basis of any subsequent developments, information or events.
BUSINESS REVIEW
AND OUTLOOK
The long-term
outlook for steel production is bright and, according to an Xstrata Plc
presentation, should rise by a 3.6% compounded annual growth rate between 2010 and
2020. The medium-term outlook is still uncertain. Arcelor Mittal said that real
demand is growing at a slower pace, due to uncertainty over the economic
outlook for 2011, in a recent investor presentation. On the positive side, it
believes that steel inventories in the
The Indian steel
sector has witnessed a roller coaster ride of late wherein it has witnessed a
significant spurt in demand due to expanding oil and gas sector, large
infrastructure spending coupled with growth in housing, consumer durables and
auto sectors. India became the fourth largest producer of crude steel in the
world in 2010 as against the eighth position in 2003 and is expected to become
the second largest producer of crude steel in the world by 2015. As per World
Steel Association (WSA), India was the fourth largest producer of crude steel
during January– September 2010 producing produced 50.1 m tones (MT) crude steel
during the period. Currently, with the government’s increased emphasis on
infrastructure, they believe the sector is poised for significant growth over
the medium to long term. As a matter of fact,
The demand for
steel was expected to grow at an annual rate of 8 - 10 percent. But it is
unlikely to meet that target. In fact, the demand for steel grew only 1.5 % for
the April - June quarter. This was due to slowdown in investment in
infrastructure sector which is the primary consumer of steel. Also high
inflation coupled with high interest rate did not help the situation. Imports
also saw a decline of 52 % over the same quarter of last year.
Fitch anticipates
domestic steel industry to head for overcapacity over the medium- to long-term.
However, 2011 should not be affected by overcapacity as growth in steel
consumption is expected to outpace production and delays are expected in
However, the
stainless steel sector has been growing on the back of thriving and favorable
demand from diverse sectors ranging from architecture, building and
construction, to automotive, railways and transport to capital goods amongst
others. The future demand for stainless steel is also likely to be determined
favorably from all these sectors. Increased construction and architectural
activities like construction of innumerable shopping malls and housing
complexes will boost the demand significantly all over the world, and is likely
to be a major contributor to the demand for stainless steel in the near future.
Besides growing infrastructural activities in developing nations, the spurt in
construction of modern high-rises with state-of-the-art facilities would also
pull demand.
Stainless steel
usage has been growing as it is used extensively in household and lifestyle
products as well as in modern amenities, household appliances and a variety of
construction items and bathroom fittings. In recent times, a number of
architects, structural designers, railway engineers and city planners, are
using stainless steel extensively.
OPPORTUNITIES AND THREATS
Indian steel
producers have had smooth sailing during the last decade, with demand growth
far exceeding supply growth. This was due to easy availability of raw materials
like coal and iron ore. The dynamics of the business are now changing. Rising
raw material shortages are posing a threat to the industry.
Coal and iron ore
are the two main raw materials used for manufacturing steel. Coal
Iron ore
production is also on a decline. Partly this is due to increased focus of
government agencies in enforcing mining and transportation regulations to curb
illegal mining. Production at a number of mines has declined, as they are
awaiting renewal of their mining licenses. The prices of Iron ore are
skyrocketing. Iron ore mine owners are minting money at the cost of sponge iron
industry.
Going forward, the
slowdown in demand and rising costs may decrease profitability of steel
producers. Smaller steelmakers may have to resort to production cuts. The
bigger steelmakers will probably slow down capacity additions which were
expected to come on stream this year.
Recent amendment
to mining and mineral act for making it obligatory for mining companies to
share 26% of the net profit with the displaced population will adversely impact
steel producers profitability. However, by making displaced people stakeholders
in the project, land acquisition may become easier and steel producers may be
able to get faster access to captive raw materials.
The Company’s end
products are stainless steel and MS re-bars. Re-bars find its application in
construction sector. They foresee a robust growth in infrastructure and construction
sector. As regards abnormal high cost of Iron ore, representations are being
made to Government at various quarters through association of steel
manufacturers etc. Stainless steel is finding innovative applications due to
its corrosion resistive property. They see fairly good potential for stainless
DISSCUSSION ON FINANCIAL PERFORMA NCE WITH RESPECT TO OPERATIONAL
PERFORMANCE
The overall
operational performance of the company in the current scenario has been
satisfactory both in terms of sales and profit as well as compared to the
figures for previous year. Sales for the financial year went up to Rs.8452.900
Millions from Rs.7789.800 Millions for the previous financial year registering
a modest growth of 8.51 %. EBITDA stood at Rs.674.200 Millions for the
financial year as against Rs.526.400 millions for the previous financial year
improved by 28.07%. However, interest cost rose significantly on account of
hike in the interest rates.
FUTURE PLANS
Looking at the
robust growth of long products, the company is in the process of enhancing the
rolling mill capacity from 125,000 TPA to 175,000 TPA. The project is under
implementation in full swing and is expected to complete as per schedule.
Looking at the
robust growth potential in the stainless steel segment, the company is making
efforts to further increase the capacity of stainless steel products as well as
a corresponding increase in the rolling mill capacity upto 200,000 TPA.
Alongside, modernization of the wire rod mill with a provision of expanding the
product range with down stream finishing facilities is also being studied.
Orissa Plant
The work on the
coal mine allotted to the company is progressing well. The company is in the
midst of taking various approvals for the same from various departments /
ministries.
The company is
actively pursuing its case for allotment of iron ore mine also on priority.
Once the mines become operational, bottom line of the company will improve.
In pursuit of its
continual growth plans, the company is also looking at various organic and
inorganic routes as well not only in the core business of steel but also in
minerals development.
CONTINGENT LIABILITIES
(Rs. In Millions)
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
|
Outstanding Bank
Guarantees and Counter Guarantees given by the Company |
71.335 |
69.755 |
|
Outstanding
Letter of Credit |
14.871 |
69.857 |
|
Estimated amount
of contracts remaining to be executed on capital account |
46.580 |
56.400 |
Income Tax and Sales
Tax Assessments:
a. Income tax
assessments have been completed upto assessment year 2008-09. Additional
liability, if any, in respect of pending assessments, would be provided for on
completion of assessments.
b. Additional
demand, if any, in respect of pending assessments of Sales Tax would be known
only on completion of the assessments.
UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE,
2011
(Rs.In Millions)
|
Particulars |
30.06.2011 Quarter
Ended (Unaudited) |
|
1. Sales / Income from operation |
2061.575 |
|
2. Other Operating Income |
0.000 |
|
Total Income
(1+2) |
2061.575 |
|
Expenditure |
|
|
1. (Increase)/decrease in Stock in Trade |
(86.826) |
|
2. Consumption of Raw Materials(Including project bought outs) |
1644.518 |
|
3. Employees Cost |
26.312 |
|
4. Depreciation |
51.717 |
|
5. Other Expenditure |
272.961 |
|
Total
Expenditure |
1908.682 |
|
Profit / (Loss)
From Operations before other Income Interest and Exceptional Items |
152.893 |
|
Other Income |
2.669 |
|
Profit/(Loss)
before Interest and Exceptional items |
155.562 |
|
Interest |
120.164 |
|
Profit / (Loss)
after interest before Exceptional items |
35.398 |
|
Exceptional Items |
0.000 |
|
Profit / (Loss)
From Ordinary activities before Tax |
35.398 |
|
Tax Expenses |
0.000 |
|
Net
Profit/(Loss) From Ordinary activities after Tax |
35.398 |
|
Extraordinary Items |
0.000 |
|
Net
Profit/(Loss) for the period |
35.398 |
|
Paid Up Equity Share Capital ( Face Value of the share Rs.10/- each ) |
313.081 |
|
Reserves (Excluding Revaluation Reserves) |
0.000 |
|
Earning / loss
per share |
|
|
A ) EPS BEFORE
Extraordinary items for the year to date and for the previous year (not
annualized) |
|
|
-Basic |
1.13 |
|
-Diluted |
1.13 |
|
B ) EPS AFTER Extraordinary
items for the year to date and for the previous year (not annualized) |
|
|
-Basic |
1.13 |
|
-Diluted |
1.13 |
|
Public Share
Holding |
|
|
- Number of Shares |
15418307 |
|
- Percentage of shareholding |
49.25 |
|
Promoters and Promoter
group share holding |
|
|
a) Pledged / Encumbered |
|
|
- Number of Shares |
NIL |
|
- Percentage of share (as a % of the total shareholding of promoter
and promoter group) |
NIL |
|
- Percentage of shares(as a % of the total share capital of the company) |
NIL |
|
b) Non-encumbered |
|
|
- Number of Shares |
15889804 |
|
- Percentage of Share (as a % of the total shareholding of promoter
and promoter group) |
100% |
|
- Percentage of Share (as a % of the total share capital of the
company) |
50.75 |
Notes :
1 The Company's
operations fall under single segment namely "Steel".
2 Corresponding
figures of previous period have been re-grouped to make them comparable
wherever necessary.
3 Investors complaints
during the first quarter ended on 30.06.2011 - pending at the beginning of the
quarter Nil, received during the quarter- 7, disposed off- 7, pending Nil.
4 The above
results have been reviewed by the Audit Committee and taken on record in the meeting
of Board of Directors of the Company held on 23-08-2011.
5 The auditors of
the company have carried out limited review of the above results in terms of
Clause 41 of the Listing Agreement.
6 Sales include transfer
of sponge iron/steel billtes from Sambalpur Works to Ghaziabad Unit.
7 Provision for
deferred tax, if any will be made in audited accounts.
FIXED ASSETS
- Land Leasehold
- Boundary Well
- Building
- Plant and Machinery
- Furniture Fixtures
- Office Equipments
- Vehicles
- Computers
WEBSITE DETAILS
HISTORY
Subject (erstwhile Rathi Udyog Limited) is a part of the P.C. Rathi
Group of
The Company was founded by Mr. Punam Chand Rathi (1934-2010) who was
well known in the Steel Industry with experience of over six decades in steel
melting and rolling/re-rolling. Their Company is a profit making, dividend
paying and listed company. They are engaged in manufacturing of Rebars and Wire
Rods which are broadly categorized as the Long Products in the Steel Industry.
The main application of their product Rebar, is in the construction industry.
Wire rods, another product being currently manufactured by them are further
drawn into wires, which has various industrial applications.
The Rathi Group was amongst the first to adopt the technology of Tor in
the country from Tor Isteg Steel Corporation, Luxemberg, through the Tor-Steel
Research Foundation in
Their Company is an ISO 9001 certified company. They have a very strong
and committed network of dealers, consisting of nearly 800 retail outlets
spread all over
They are constantly making every possible effort to upgrade their
technology and improve their product quality to retain and enhance their market
share. Their Company is conscious of the interest of their stakeholders i.e.
shareholders, the Government, employees and of their customers.
The Company's group Company viz. Rathi Iron And Steel Industries Limited
has also commissioned a Steel Rolling Mill plant at Pithampur, District. Dhar
(M.P.). Their installed capacity together with that of their Group company is
about 175000 TPA of rolled products and 40,000 TPA of melting facilities. Their
Company is also setting up facilities for manufacturing value added Alloy Steel
products.
The Company's group Company viz. Rathi Iron And Steel Industries Limited
has also commissioned a Steel Rolling Mill plant at Pithampur, District. Dhar
(M.P.). Their installed capacity together with that of their Group company is
about 175000 TPA of rolled products and 40,000 TPA of melting facilities. Their
Company is also setting up facilities for manufacturing value added Alloy Steel
products.
Business
Description
Subject is an India-based steel company. The Company is engaged in
manufacturing of rebars and wire rods. During the fiscal year ended March 31,
2010 (fiscal 2010), the Company produced 141,589 metric tons of steel bars;
11,098 metric tons of stainless steel (SS) flat/wire rod; 96,805 metric tons of
mild steel (MS) billet; 26,354 metric tons of SS billet; 14,192 metric tons of
SS flat rolled from others, and 93,021 metric tons of sponge iron. The
Company’s Ghaziabad Plant consists of steel rolling mills having an installed
capacity of 125,000 tons per annum. Its Orissa project is consists of
facilities for manufacture of 300,000 tons per annum sponge iron, a steel
melting shop of 5,00,000 tons per annum, pig iron of 200,000 tons per annum and
captive power plant of 50 megawatts. The Company markets its product steel bars
under the brand RATHI. For the nine months ended 31 December 2010, Subject's
revenues decreased 1% to RS5.8B. Net income totaled RS112.5M, up from RS2M.
Revenues reflect lower income from operations. Net income was offset by
decreased consumption of raw materials and presence of gain on sale of stock.
The products manufactured by the Company include steel bars, stainless steel
(SS) flat/wire rod and mild steel (MS) billet.
Board of Directors
Shree Kumar Daga
Non-Executive
Independent Director
Mr. Shree Kumar
Daga is the Non-Executive Independent Director of Subject, since March 2003. He
holds Master Degree in Mechanical Engineering and has more then 31 years of
experience in the various industries.
Ranjit Khattar
Non-Executive
Independent Director
Ranjit Khattar is the Non-Executive Independent Director Subject. He is a qualified and Practicing Chartered Accountant with more then 24 years of experience. He has worked with various organizations in the capacity of Chief Financial Officer and as a Financial Consultant. He has been on Board of Directors as a Non Executive and Independent Director since February 2005.
Dwarka Das Lakhotia
Non-Executive
Independent Director
Mr. Dwarka Das Lakhotia is Non-Executive Independent
Director of Subject. He hold a Master's degree in Commerce from
Pradeep Rathi
Managing Director,
Executive Non-Independent Director
Mr. Pradeep Rathi is the Managing Director, Executive Non-Independent Director of Subject.
Prem Narayan Varshney
Executive
Non-Independent Director
Mr. Prem Narayan Varshney is Executive Non-Independent
Director of Subject. He holds a post graduation degree in Economics from
PRESS REELEASE
ICRA
revises ratings of Rathi Steel and Power's bank facilities
10 May 2011
India, May 10 -- Credit rating agency, ICRA has revised the long-term
rating assigned to Rs3737.600 Millions fund based limits of Rathi Steel and
Power (RSPL) from LB+ to LB. The rating agency has also reaffirmed the short
term rating of A4 assigned to Rs.455.000 Millions non-fund based limits of the
company. The rating revision takes into consideration the continued delays in
debt servicing by the company on account of its stretched liquidity profile.
The ratings also factor in the high competitive intensity of the steel
industry, vulnerability of the company's profitability to raw material price
volatility, and its proposed debt funded capex plans, which can impact the debt
protection metrics going forward. Rathi Steel and Power is engaged in
manufacturing of steel billets, bars and stainless steel wire rods. The company
sells its products through more than 800 retail outlets spread across
02 April 2011
SAMBALPUR,
April 2 -- Fly ash emitted from the Rathi Steel and Power at the other end of
the
A
layer of fly ash is seen everywhere in the house and on the roof top almost
every morning. Even the leaves of the trees look grey and black instead of
green. Even though the high temples are best proof to the pollution, all the
main temples of the town situated along the river bank are facing the chemical
effects, the conscious citizens here fumed. Residents of Nandapara, Jharuapara,
Kamali Bazaar, Bada Bazaar, Kunjelpara and Balibandh are the worst affected due
to the fly ash since the air distance between the factory and the above
residential areas is just a kilometer away, alleged the residents."We have
been facing the fly ash problem for the last two years and it is getting acute
during the cloudy weather," said Dr Sisir Pujari of Jharuapara.
The
people living in the other end of the river and close to the sponge iron unit
further alleged that the company has got no concrete fly ash management policy.
It just dumps the fly ash emitted from its power plant in any vacant place
while the district administration seems to have got every support to all these
illegal activities. There have been agitations by the residents earlier
protesting against such a polluting activity of the firm, but to no avail.
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.49.07 |
|
|
1 |
Rs.77.42 |
|
Euro |
1 |
Rs.67.73 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
3 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
30 |
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.