MIRA
INFORM REPORT
|
Report Date : |
19.10.2011 |
IDENTIFICATION DETAILS
|
Name : |
VISA STEEL LIMITED |
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Registered
Office : |
Visa House, 11 Ekamra Kanan, Nayapalli, Bhubaneswar-751015, Orissa |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
10.09.1996 |
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Com. Reg. No.: |
15-004601 |
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Capital Investment
/ Paid-up Capital : |
Rs. 1100.000 Millions |
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CIN No.: [Company Identification
No.] |
L511090R1996PLC004601 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
BBNV00159F |
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PAN No.: [Permanent Account No.] |
AAACV9836E |
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Legal Form : |
A Public Limited Liability Company. The company’s shares are listed on
stock exchange. |
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Line of Business
: |
Manufacturer of chrome ore based products, pig iron, coke ferro chrome
sponge iron and power |
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No. of Employees : |
1630 (Office 100, Factory 1500 and Branch 30) (Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
Ba (45) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 14000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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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 – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
India |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INFORMATION PARTED BY
|
Name : |
Mr Arun Agarwal |
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Designation : |
Key Executive |
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Contact No.: |
91-33-30119086 |
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Date : |
19.10.2011 |
LOCATIONS
|
Registered Office : |
Visa House, 11 Ekamra Kanan, Nayapalli, Bhubaneswar-751015, Orissa,
India |
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Tel. No.: |
91-674-2552479/ 84 |
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Fax No.: |
91-674-2554661/ 62 |
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E-Mail : |
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Website : |
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Corporate Office : |
Visa House, 8/10, Alipore Road, Kolkata-700027, West Bengal, India |
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Tel. No.: |
91-33-30119000 |
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Fax No.: |
91-33-30119002 |
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Factory 1 : |
Kalinganagar Industrial Complex, P.O. Jakhapura-755019, District
Jaipur, Orissa, India |
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Tel. No.: |
91-6726-242441/ 444 |
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Fax No.: |
91-6726-242442 |
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Factory 2 : |
Village Golagaon, Near Duburi, P.O. Pankapal, District Jaipur, |
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Tel. No.: |
91-6726-245470 |
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Fax No.: |
91-6726-245561 |
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Factory 3 : |
8, Gajanandpuram, |
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Tel. No.: |
91-7762-228290/ 91 |
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Branches : |
Located at: ·
·
Mumbai ·
·
·
Pradip ·
Vizag ·
Chennai |
DIRECTORS
AS ON 31.03.2011
|
Name : |
Mr. Vishambhar Saran |
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Designation : |
Chairman and Managing Director |
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Name : |
Mr. Maya Shankar Verma |
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Designation : |
Independent Director |
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Name : |
Mr. Shiv Dayal Kapoor |
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Designation : |
Independent Director |
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Name : |
Mr. Debi Prasad Bagchi |
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Designation : |
Independent Director |
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Name : |
Mr. Pradip Kumar Khaitan |
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Designation : |
Independent Director |
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Name : |
Mr. Shanti Narain |
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Designation : |
Independent Director |
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Name : |
Mrs. Saroj Agarwal |
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Designation : |
Non- Executive Director |
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Name : |
Mr. Vikas Agarwal |
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Designation : |
Non- Executive Director |
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Name : |
Mr. Vivek Agarwal |
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Designation : |
Non- Executive Director |
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Name : |
Mr. Vishal Agarwal |
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Designation : |
Managing Director |
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Name : |
Mr. Basudeo Prasad Modi |
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Designation : |
Deputy Managing Director |
KEY EXECUTIVES
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Name : |
Mr. Manoj Kumar Digga |
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Designation : |
Chief Financial Officer |
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Name : |
Mrs. Subhra Giri |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.06.2011
|
Category of
Shareholder |
Total No. of
Shares |
% of total No.
of Shares |
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(A) Shareholding of Promoter and Promoter Group |
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255600 |
0.23 |
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81144400 |
73.77 |
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81400000 |
74.00 |
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Total shareholding of Promoter and Promoter Group (A) |
81400000 |
74.00 |
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(B) Public Shareholding |
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|
5341 |
-- |
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|
4998087 |
4.54 |
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5003428 |
4.55 |
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9906743 |
9.01 |
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8465251 |
7.70 |
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4733682 |
4.30 |
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490896 |
0.45 |
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|
463937 |
0.42 |
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26959 |
0.02 |
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23596572 |
21.45 |
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Total Public shareholding (B) |
28600000 |
26.00 |
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Total (A)+(B) |
110000000 |
100.00 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
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- |
- |
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- |
- |
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- |
- |
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Total (A)+(B)+(C) |
110000000 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs. 0.100 millionBUSINESS DETAILS
|
Line of Business : |
Manufacturer of chrome ore based products, pig iron, coke ferro chrome
sponge iron and power |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit
|
Installed
Capacity |
Actual
Production |
|
Pig Iron (Note 1) |
MT |
225000 |
42454 |
|
Chrome concentrate |
MT |
100000 |
-- |
|
Chrome Powder |
MT |
100000 |
-- |
|
Coke |
MT |
400000 |
-- |
|
Ferro Chrome (Note 3) |
MT |
50000 |
42187 |
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Sponge Iron (Note 4) |
MT |
300000 |
134538 |
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Power at Captive Power Plant (MKWH) |
MT |
438 |
226 |
|
LAM Coke (Note 2) |
MT |
-- |
265621 |
Notes :
1.
Does not include By-products generated 3779 MT
2.
Includes used for own consumption 52548 MT
Does not include
Production By way of Conversion 51763 MT
Does not include
By-products generated 18842 MT
Does not include
By-products generated by way of conversion 4113 MT
3.
Does not include By-products generated 2185 MT
4.
Including Trial Run Production
5.
Includes used for Captive Consumption (MKWH) 201 MT
GENERAL INFORMATION
|
No. of Employees : |
1630 (Office 100, Factory 1500 and Branch 30) (Approximately) |
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Lovelock and Lewes Chartered Accountant |
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Internal Auditors : |
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Name : |
L B Jha and Company Chartered Accountant |
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Holding Company : |
·
VISA Minmetal AG (Upto 30 April 2010) ·
VISA Infrastructure Limited |
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Subsidiaries : |
·
Ghotaringa Minerals Limited ·
VISA BAO Limited |
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Joint Ventures Company : |
·
VISA Urban Infra Limited ·
Patrapada Coal Mining Company Private Limited (Up
to 5 October 2010) |
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Enterprises having significant influence : |
·
VISA International Limited |
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Fellow Subsidiaries : |
·
VISA Aluminium Limited ·
VISA Cement Limited ·
VISA Comtrade Limited ·
VISA Power Limited ·
VISA Power Trading Company Limited |
CAPITAL STRUCTURE
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
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|
160000000 |
Equity Shares |
Rs.10/- each |
Rs. 1600.000 Millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
|
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|
110000000 |
Equity Shares |
Rs.10/- each |
Rs. 1100.000
Millions |
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Notes:
(a)
Of the above 57,612,167 Equity Shares of Rs.10/-
each are held by VISA Infrastructure Limited, the Holding Company
(b)
Of the above 8,360,000 Equity Shares of Rs.10/-
each allotted for consideration other than cash pursuant to a scheme of
amalgamation without payment being received in cash.
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 |
1100.000 |
1100.000 |
1100.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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|
3] Reserves & Surplus |
2432.860 |
2046.930 |
1701.460 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
3532.860 |
3146.930 |
2801.460 |
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LOAN FUNDS |
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1] Secured Loans |
13732.380 |
11076.990 |
8891.690 |
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2] Unsecured Loans |
348.820 |
350.390 |
38.020 |
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TOTAL BORROWING |
14081.200 |
11427.380 |
8929.710 |
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DEFERRED TAX LIABILITIES |
597.010 |
301.100 |
14.480 |
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TOTAL |
18211.070 |
14875.410 |
11745.650 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
7709.130 |
8136.290 |
7781.230 |
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Capital work-in-progress |
13905.380 |
7700.700 |
5410.430 |
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|
|
|
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INVESTMENT |
610.400 |
600.400 |
304.650 |
|
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
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|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3956.800
|
3417.070
|
3565.080 |
|
|
Sundry Debtors |
479.860
|
648.780
|
823.730 |
|
|
Cash & Bank Balances |
885.080
|
833.410
|
704.550 |
|
|
Other Current Assets |
19.350
|
18.150
|
18.530 |
|
|
Loans & Advances |
1593.810
|
1415.770
|
1240.070 |
|
Total
Current Assets |
6934.900
|
6333.180 |
6351.960 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
9982.640
|
6964.050
|
7871.390 |
|
|
Other Current Liabilities |
824.900
|
816.190
|
275.230 |
|
|
Provisions |
141.200
|
139.470
|
7.320 |
|
Total
Current Liabilities |
10948.740
|
7919.710 |
8153.940 |
|
|
Net Current Assets |
[4013.840]
|
[1586.530]
|
[1801.980] |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
SHARE ISSUE EXPENSES |
0.000 |
24.550 |
51.320 |
|
|
|
|
|
|
|
|
TOTAL |
18211.070 |
14875.410 |
11745.650 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
13059.010 |
11569.420 |
10350.060 |
|
|
|
Other Income |
269.780 |
145.410 |
54.540 |
|
|
|
TOTAL (A) |
13328.790 |
11714.830 |
10404.600 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Material |
9661.270 |
8136.600 |
8102.370 |
|
|
|
Expenses |
1611.540 |
1601.870 |
1486.760 |
|
|
|
Loss on exchange Fluctuation |
0.000 |
0.000 |
1184.670 |
|
|
|
TOTAL (B) |
11272.810 |
9738.470 |
10773.800 |
|
|
|
|
|
|
|
|
Less |
PROFIT
/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
2055.980 |
1976.360 |
[369.200] |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
709.380 |
651.400 |
321.540 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1346.600 |
1324.960 |
[690.740] |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
482.050 |
468.180 |
307.910 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS)
BEFORE TAX (E-F) (G) |
864.550 |
856.780 |
[998.650] |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
350.780 |
382.620 |
[330.510] |
|
|
|
|
|
|
|
|
|
|
PROFIT /
(LOSS) AFTER TAX (G-I) (J) |
513.770 |
474.160 |
[668.140] |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
310.100 |
[35.370] |
632.770 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend |
110.000 |
110.000 |
0.000 |
|
|
|
Income Tax on Proposed Dividend |
17.840 |
18.690 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
696.030 |
310.100 |
[35.370] |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
2194.520 |
1952.940 |
2395.820 |
|
|
TOTAL EARNINGS |
2194.520 |
1952.940 |
2395.820 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
3747.430 |
2762.860 |
6690.300 |
|
|
|
Finished Goods |
1839.250 |
816.000 |
190.630 |
|
|
|
Capital Goods |
2000.580 |
38.080 |
16.080 |
|
|
TOTAL IMPORTS |
7587.260 |
3616.940 |
6897.010 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) Per Share (Rs.) |
4.67 |
4.31 |
[6.07] |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 |
|
|
1st
Quarter |
|
Net Sales |
3672.040 |
|
Total Expenditure |
3223.570 |
|
PBIDT (Excl OI) |
448.470 |
|
Other Income |
0.000 |
|
Operating Profit |
448.470 |
|
Interest |
180.450 |
|
Exceptional Items |
0.000 |
|
PBDT |
268.020 |
|
Depreciation |
122.250 |
|
Profit Before Tax |
145.770 |
|
Tax |
44.420 |
|
Provisions and contingencies |
0.000 |
|
Profit After Tax |
101.350 |
|
Extraordinary Items |
0.000 |
|
Prior Period Expenses |
0.000 |
|
Other Adjustments |
0.000 |
|
Net Profit |
101.350 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
3.85
|
4.05
|
[6.42] |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
0.00
|
7.41
|
[9.65] |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
5.90
|
5.92
|
[7.07] |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.24
|
0.27
|
[0.36] |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
7.25
|
6.15
|
6.10 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.63
|
0.80
|
0.78 |
LOCAL AGENCY FURTHER INFORMATION
INFORMATION
REQUIRED
|
1. What are your Products? Approximate idea of Quantity
produced per year. |
1. Pig Iron -42454 2. Sponge Iron -134538 3. Ferro Chrome -42187 4. Coke-265621 |
|
|
|
|
2. What Production-Processes used in the Factory. What
kind of Facilities you have : (For example,
continuous casting, ingot, slab thickness, hot and cold mill, process line
etc. process summary） |
1. Pig Iron 2. Sponge Iron 3. Ferro Chrome 4. Coke |
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3. Who are your main customers? |
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4. What “make” are facilities on your Production. The facilities on your production line are Procured which Manufacturer
(which Country). |
Australia and Orissa |
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|
5. Do you have any plan to “invest” in new facilities in
the future? Will you go for high-technology production equipment or
you will target low-cost equipment. |
High technology production equipment |
|
|
|
|
6. What kind of trouble / limitations / challenges you
have with your existing facilities? |
No limitation / No trouble |
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7. What is your “Future” plan Will you go for : a) High Production volume b) More variety of products. |
Yes |
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|
8. Do you plan to collaborate with other Steel Producers,
and thus expand Business together? |
Depend |
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|
9. How do you procure your “Input” materials? |
·
Coke from Australia ·
Cooking Coal from Orissa ·
Non Cooking coal from Indonesia and South Africa |
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|
10. From where do you buy your infrastructure? |
Machinery – China Japan Italy |
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11. How do you dispose-of factory “wastes”. |
Recycle it and used for construction of roads |
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12. Do you plan to introduce Japanese Production Equipment
in future : Will you like to buy Japanese Equipment? |
Yes |
|
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|
|
13 Will you also be interested in getting Japanese “Technology”
for Production? |
Yes |
|
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|
|
14. Are you
exporting your products? Please name the countries being exported to. |
o China o Japan o USA o Korea |
OPERATIONS
The Company is engaged
in the business of manufacturing value added products from coal and minerals
into LAM Coke, High Carbon Ferro Chrome, Pig Iron, Sponge Iron (DRI) and
Special Steel (Long products). In addition, the Company generates Captive
Power. During the year, production volumes across all Units have been stable
and higher price realisation across various products has enabled the Company to
register a robust growth in sales revenue. The operating margins of the Company
have been stable inspite of higher cost of raw materials such as Coking Coal,
Iron Ore, Chrome Ore and Thermal Coal. They continue to drive their cost
competitiveness through efficient raw material procurement and captive power
generation.
The Company has
registered a revenue growth of 14% to Rs. 13,328.79 million in the
FY’2010-11 compared to Rs. 11,714.83 million during the FY’ 2009-10. The
operating margins decreased to 15% at Rs. 2,055.98 million in the
FY’2010-11 versus 17% at Rs. 1,976.36 million in the previous year. The
PBT was Rs. 864.55 million for the FY’2010-11 as against Rs. 856.78
million and PAT was Rs. 513.77 million as against Rs. 474.16
million for the corresponding period.
During the year,
the Company achieved satisfactory production volumes despite pressure on smooth
availability of raw materials. The production of Coke was 340,339 MT compared
to 353,601 MT in the previous year. The production of High Carbon Ferro Chrome
was slightly lower at 44,372 MT compared to 47,649 MT during the previous year.
The production of Pig Iron was 46,233 MT compared to 150,424 MT in the previous
year mainly due to non-availability of raw materials owing to closure of OMC’s
Daitari mines. The production of Sponge Iron was 134,538 MT compared to 139,299
MT in the previous year. The captive power generated during the year was 226
million units as against 223 million units in the previous year.
The Company has
achieved completion of 0.5 million TPA Special Steel Plant and 3rd 25 MW Power
Plant taking the power generation to 75 MW. This will further boost the
Company’s growth in revenues and margins. The Company has decided to set up an
Iron Ore Sinter Plant in order to hedge the iron ore procurement as it is
currently buying only sized iron ore. This would also ensure continuous smooth
running of the Blast Furnace. The Company plans to set up additional Captive
Power generation facilities to meet the shortfall in captive power generation
vis-a-vis requirements including requirement of its subsidiary VISA BAO Limited
and a Lime Kiln Plant to ensure smooth running of Steel Melt Shop.
The Company has
charted a vision for expanding the existing facility at Kalinganagar in Orissa
from 0.5 million TPA to 1 million TPA Steel Plant and Power Plant from 75 MW to
375 MW and set up green field facility of 1 million TPA Steel Plant and 300 MW
Power Plant at Raigarh in Chhattisgarh. The plan is to raise the total Steel
production of the Company to 2 million TPA and power generation to 675 MW over
the next few years and provide the foundation to maintain high quality growth
and enhance value creation for its shareholders.
During the year,
the Company has also signed a Memorandum of Understanding (MoU) with the Madhya
Pradesh Trade and Investment Facilitation Corporation Limited (TRIFAC), a wholly
owned undertaking of Government of Madhya Pradesh, for setting up a 1.25
million TPA Integrated Steel Plant with 300 MW Captive Power Plant and 100,000
TPA Manganese Alloy Plant, with a total investment of Rs. 40250.000
millions.
The Company’s subsidiary
– VISA BAO Limited, is setting up a 100,000 TPA Ferro Chrome Plant with 4
Submerged Arc Furnaces of 16.5 MVA each at Kalinganagar in Orissa. The Company
has made significant progress towards implementation of the project.
HOLDING COMPANY
Consequent to the
inter-se transfer of shareholding between the Promoter Group companies (from
VISA Minmetal AG, Switzerland to VISA Infrastructure Limited, India), VISA
Infrastructure Limited has become the holding company with effect from 30 April
2010. The shareholding of VISA Infrastructure Limited in the Company is
57,612,167 equity shares of Rs. 10/- each equivalent to 52.37% as on 31
March 2011.
SUBSIDIARIES
The Company has
two subsidiaries namely, VISA BAO Limited and Ghotaringa Minerals Limited:
(i)
VISA BAO Limited (VBL) is a Joint Venture between
the Company and Baosteel Resources Company Limited, China. VBL is setting up a
100,000 TPA Ferro Chrome Plant in Orissa.
(ii)
Ghotaringa Minerals Limited (GML) has been
incorporated to give effect to the joint venture agreement between the Company
and Orissa Industries Limited (ORIND) for carrying out the business of mining
of chrome ore and/or other minerals. GML has completed prospecting work over an
area allotted to ORIND in Dhenkanal, Orissa.
The Company’s
investment in GML will enable the Company to directly procure chrome ore, mined
by GML, for its Chrome Ore Beneficiation Plant, Chrome Ore Grinding Plant and
the Ferro Chrome Plant which shall reduce raw material costs significantly.
PROMOTER GROUP
COMPANIES
The names of
Promoters and Companies comprising the “Group” as defined in the Monopolies and
Restrictive Trade Practices Act, 1969, have been disclosed in the Annual Report
for the purpose of Regulation 3(1)(e) of the SEBI (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997.
MANAGEMENT
DISCUSSION AND ANALYSIS
OVERVIEW
During the
financial year 2010-11, the Company has achieved healthy growth in sales and
profitability and is poised to emerge as a stronger Company to deliver enhanced
shareholder value over the coming years. The Company registered a stable
performance during 2010-11 with a 14% growth in revenues to Rs. 13,328.79
million, 4% growth in EBIDTA to Rs. 2,055.98 million, 1% increase in PBT
to Rs. 864.55 million and 8% rise in PAT to Rs. 513.77 million.
INDUSTRY STRUCTURE
AND DEVELOPMENTS
STEEL INDUSTRY
OVERVIEW
The global economy
has witnessed a sustained growth largely driven by the additional stimulus and bailout
packages announced by various countries which has created liquidity and
stimulated demand, leading to the recovery in the US and Europe. 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.
The steel industry
has also seen a reasonable growth in demand and increase in production volumes
especially in China and India. However, this has once again put pressure on raw
material availability and prices. The floods in Queensland, Australia have put
further pressure on the prices of Coking Coal which has increased from USD 200
per MT levels to USD 300 per MT levels. Due to the volatility in Coking Coal
prices over the last couple of years, there has been a shift in pricing
mechanism for Coking Coal from annual to quarterly to partly monthly benchmark
prices. This has resulted in volatility in prices of iron and steel products as
well.
China continues to
drive the global steel industry with a production of approx. 630 million tons
in 2010 which equates to approx. 45% of global Steel production. Chinese Steel
demand continues to be driven by large capital expenditure and government
infrastructure projects across the country. However, it is expected that the
production growth for steel in the current decade will slow down, which should
reduce raw material prices.
The Indian economy
grew at 8.6% in 2010-11 against 7.2% last year which shows a remarkable growth.
The economy is likely to grow at over 8% over the next decade driven by the
infrastructure (power, road, railways, ports etc.) and consumption (automobile,
real estate etc.) sectors which will result in robust growth in demand for
various iron and steel products.
The States of
Orissa, Chhattisgarh and Jharkhand which account for majority of the iron ore
and coal reserves in the country will remain the most attractive locations for
setting up iron and steel manufacturing capacity in the coming years.
COMPANY OVERVIEW
The Company’s
current saleable products include Iron and Steel products such as LAM Coke,
Ferro Chrome, Pig Iron, Sponge Iron and Special Steel. The Company has
completed project work for the 0.5 million TPA Special Steel Plant and
additional 25 MW Power Plant which will further boost growth in revenues and
margins.
BUSINESS REVIEW
The current
business of the Company comprises of manufacturing of Iron and Steel products
such as Coke, Ferro Chrome, Pig Iron, Sponge Iron and Special Steel.
The manufacturing
facilities of the Company are situated at Kalinganagar which includes Coke
Oven, Ferro Chrome, Blast Furnace, Sponge Iron, Power and Special Steel and at
Golagaon in Orissa where the Chrome Ore Beneficiation and Chrome Ore Grinding
Plants are located.
IRON AND STEEL
PRODUCTS
(a) LAM Coke
The Coke Oven
Plant, with a total capacity of 400,000 TPA, operates on the stamp-charging
technology which allows blending of semi-soft and semi-hard Coking Coals with
prime hard Coking Coals to produce Low Ash Metallurgical Coke.
The total coke
production during 2010-11 was 340,339 MT compared to 353,601 MT in 2009-10.
Coking coal, the primary raw material for producing coke, was imported from
Australia. Coke was partly consumed in the Blast Furnace and partly sold with
total sales contribution amounting to Rs. 4,803.18 million, equating to 36% of
total revenues.
(b) Ferro Chrome
The Ferro Chrome
Plant, with a total capacity of 50,000 TPA produced 44,372 MT of Ferro Chrome
in 2010-11 compared to 47,649 MT in 2009-10. The main raw material is Chrome
Ore (sourced from OMC), Coke and Power. Ferro Chrome is sold to various Special
and Stainless Steel Plants in India and globally. The sales contributed 19% of
total revenues during the year amounting to Rs. 2,518.25 million.
(c) Pig Iron
The Blast Furnace
with a total capacity of 225,000 TPA is currently producing Hot Metal which is
poured into moulds to produce Pig Iron. Basic grade Pig Iron is sold to various
Steel plants in eastern India while foundry grade Pig Iron is sold to major customers
in eastern and northern India.
The total hot
metal production during 2010-11 was 46,233 MT due to closure of OMC’s Daitari
Mines as compared to 150,424 MT of hot metal in 2009-10.
Pig Iron sales
contributed to 6% of the total revenues of the Company during the year,
amounting to Rs. 835.02 million.
(d) Sponge Iron
The Sponge Iron
Plant having capacity of 300,000 TPA produced 134,538 MT during 2010-11 of
Sponge Iron as against 139,299 MT of Sponge Iron during 2009-10. It has
contributed 17% of the total revenues amounting to Rs. 2,277.92 million.
The main raw
materials for Sponge Iron Plant are Iron Ore and Thermal Coal. Whilst Iron Ore
is procured mainly from OMC, the Coal is procured from Mahanadi Coalfields
Limited.
(e) Power
The Power Plant
produced 226 million KWH of power during the year 2010-11 as against 223
million KWH produced during 2009-10. The Power produced was mainly used
captively. The Company completed the project work for 3rd 25 MW Power Plant
taking the total capacity to 75 MW.
(f) Special Steel
The Company
completed the project work for the 0.5 million TPA Special Steel Plant and
sales of Special Steel products shall commence from FY’2011-12 onwards. This
will further boost the Company’s growth in revenues and margins.
PROJECT OVERVIEW
The Company has
decided to set up an Iron Ore Sinter Plant in order to hedge the iron ore
procurement as it is currently buying only sized iron ore. This would also
ensure continuous smooth running of the Blast Furnace. The Company plans to set
up additional power generation facilities to meet the shortfall in captive
power generation vis-ŕ-vis requirements including VISA BAO requirement and a
Lime Kiln Plant to ensure smooth running of Special Steel Plant.
STRATEGIC
INITIATIVES
JOINT VENTURE WITH
BAOSTEEL
VISA BAO Limited,
a subsidiary of the Company is in the process of setting up a 100,000 TPA Ferro
Chrome Plant at Kalinganagar Industrial Complex. The Company has made
significant progress towards implementation of the project including equipment
ordering, basic and detailed engineering, civil and structural work etc.
PROJECT EXPANSION
The Company has
charted a vision for expanding the existing facility at Kalinganagar in Orissa
from 0.5 million TPA to 1 million TPA Steel Plant and Power Plant from 75 MW to
375 MW and set up green field facility of 1 million TPA Steel Plant and 300 MW
Power Plant at Raigarh in Chhattisgarh. The plan is to raise the total Steel
production of the Company to 2 million TPA and power generation to 675 MW over
the next few years and provide the foundation to maintain high quality growth
and enhance value creation for its shareholders.
The Company has
also taken necessary steps for securing its raw material requirements and
integrating backwards into mining of Iron Ore, Coal and Chrome Ore.
INTERNAL CONTROL
AND SYSTEMS
The internal
control systems in the Company commensurates with the size and nature of its
operations and periodic audits are conducted in various disciplines to ensure
adherence to the same. During the year, M/s. L. B. Jha, Internal Auditors of
the Company had independently evaluated the adequacy and efficacy of the audit
controls. The direct reporting of the Internal Auditors to the Audit Committee
of the Board ensures independence of the audit and compliance functions. The
Internal Auditors regularly report to the Audit Committee on their observations
on the Company’s processes, systems and procedures ascertained during the
course of their audit. Concerted efforts towards stabilisation of SAP have also
contributed to tightening of control systems. The Company has been able to
adapt adequately to this ERP package and is placed to derive significant
benefits from the same. Emphasis is placed on adequacy, reliability and
accuracy of dissemination of financial data and information. Compliance issues
are given utmost importance and reported regularly to the Board.
The Company has
been accredited with the ISO 9001 certification. It shows commitment to
quality, customers and a willingness to work towards improving efficiency.
OUTLOOK
India has immense
potential for creating new steel capacity. Indian per capita steel consumption
is presently very low compared to world average which further re-confirms the opportunities
for steel demand to continue accelerating in the times ahead. The Company with
a well diversified product portfolio is well poised to take advantage of the
growth in the demand for Special Steel products, Coke and Ferro Chrome.
FIXED ASSETS:
·
·
·
Building
·
Plant and Machinery
·
Furniture and Fixtures
·
Vehicles
·
Computer Software
UNAUDITED
FINANCIAL RESULTS FOR THE THREE MONTHS ENDED 30TH JUNE 2011
(Rs. In Millions)
|
Particulars |
3 Months Ended 30.06.2011 (Unaudited) |
|
1. Net Sales/ Income from Operations |
3652.381 |
|
Other Operating Income |
19.662 |
|
Total |
3672.043 |
|
2. Expenditure |
|
|
a. Increase/ Decrease in stock in trade and
work in process |
(184.661) |
|
b. Consumption of raw material |
2791.797 |
|
c. Purchase of traded goods |
20.544 |
|
d. Employees cost |
100.411 |
|
e. Depreciation |
122.253 |
|
f. Other Expenditure |
495.480 |
|
Total |
3345.824 |
|
3. Profit from Operations before Interest and Exceptional Item (1-2) |
326.219 |
|
4. Other Income |
-- |
|
5. Profit Before interest and Exceptional Item (3-4) |
326.219 |
|
6. Interest (Net) |
180.454 |
|
7. Profit after Interest but before Exceptional Item (5-6) |
145.765 |
|
8. Exceptional Item |
-- |
|
9. Profit/ Loss Before tax (7-8) |
145.765 |
|
10. Tax Expenses: |
|
|
Current Tax: |
42.592 |
|
Mat Credit Entitlement |
(45.651) |
|
Deferred Tax |
47.472 |
|
11. Net Profit/ Loss from ordinary Activities after tax (9-10) |
101.352 |
|
12. Extraordinary item (Net of tax
expansion) |
-- |
|
13. Net Profit/ Loss for the period (11-12) |
101.352 |
|
14. Paid-up equity share capital (face value
of Rs. 10/- each) |
1100.000 |
|
15. Reserve including Revaluation Reserve |
-- |
|
16. Earning per share (EPS) |
|
|
a) Basic and Diluted EPS |
0.92 |
|
17. Public Shareholding |
0.92 |
|
- Number of Shares |
28600000 |
|
- Percentage of Shares |
26% |
|
18. Promoters and promoter group
shareholding |
|
|
a) Pledged / Encumbered |
|
|
- Number of Shares |
-- |
|
- Percentage of shares (as a % of the total shareholding
of promoter and promoter group) |
-- |
|
- Percentage of shares (as a % of the total
share capital of the company) |
-- |
|
b) Non- encumbered |
|
|
- Number of Shares |
81400000 |
|
- Percentage of shares (as a % of the total shareholding
of promoter and promoter group) |
100.00% |
|
- Percentage of shares (as a % of the total
share capital of the company) |
74.00% |
Notes:
1.
As the Company's business activity falls within a single
business segment, viz. "Iron and Steel products", the disclosure
requirements of Accounting Standard (AS-17) on "Segment Reporting",
notified by the Companies (Accounting Standards) Rules, 2006, are not
applicable.
2.
Purchase of traded goods represents transfer of
materials which were acquired for manufacturing activity in earlier years
3.
No. of Investors' complaints: Pending at the
Beginning of the Quarter: NIL, Received: 5, Disposed: 5, Pending at the end of
the Quarter: NIL.
4.
The above results have been reviewed by the Audit
Committee at its meeting held on 25 July 2011 and taken on record by the Board
of Directors at its meeting held on 26 July 2011. The Statutory Auditors have
carried out a limited review of the results for the three months ended 30 June
2011 pursuant to Clause 41 of the Listing Agreement.
5. Previous period's
figures have been regrouped/ rearranged wherever found necessary.
WEB SITE DETAILS
BUSINESS
DESCRIPTION
Subject is an India-based company. The Company is engaged in minerals
and metals industry with a presence in countries, including India, China,
Australia, Indonesia, Switzerland, United Kingdom and Hong Kong. It is engaged
in manufacturing of chrome ore based products, pig iron, coke, ferro chrome,
sponge iron and power. The Company’s products include pig iron, lam coke,
by-product blast furnace, chrome concentrate, granulated slag, power plant,
steel melt shop, rolling mill, ferro chrome and sponge iron. The manufacturing
facilities of the Company are situated at Kalinganagar, which includes blast
furnace, coke oven, ferro chrome, sponge iron and power and at Golagoan in
Orissa, where the chrome ore beneficiation and chrome ore grinding plants are
located. The Company subsidiaries are VISA BAO Limited and Ghotaringa Minerals
Limited. For the fiscal year ended 31 March 2010, Subject revenues increased
13% to RS11.71B. Net income totaled RS490.1M, vs. a loss of RS662.8M. Revenues
reflect an increase in income from operations and higher other income. Net
income also reflects lower other expenditure, increased interest income and
absence of loss on exchange fluctuation. Subject is a part of the VISA Group,
which has a decade long experience in the minerals.
VISHAMBHAR SARAN -
EXECUTIVE CHAIRMAN OF THE BOARD
Mr. Vishambhar Saran has served as Executive Chairman of the Board of
Visa Steel Limited. Mr. Saran has experience of almost 42 years in the iron and
steel industry, with over 25 years with Tata Steel in the areas of development
and operations of mines, mineral beneficiation plants and ferro alloy plants,
port operations and international trading of raw materials for the iron and
steel industry. A mining engineer from BHU, he rose to the level of Director (Raw
Materials) in Tata Steel before taking over as Chairman of the VISA Group in
1994. In a short span of time, he built the VISA Group into a minerals and
metals conglomerate with a global presence in Australia, China, India,
Indonesia, Singapore, South Africa and Switzerland. He is the Honorary Consul
of Bulgaria for Eastern India.
Education
B Mining Engineering, Banaras Hindu University
VISHAL AGARWAL -
MANAGING DIRECTOR, EXECUTIVE DIRECTOR
Mr. Vishal Agarwal is Managing Director, Executive Director of Visa
Steel Limited. Mr. Agarwal has over 14 years experience in the iron and steel
industry with hands on experience of setting up Greenfield projects, having
established the plants at Golagaon and Kalinganagar. He is responsible for
overall management of operations and projects and is the driving force behind
many of the Company’s strategy, finance, marketing and human resource
initiatives. He holds a Bachelors degree in Economics from the London School of
Economics and a Masters degree in Economics for Development from Oxford
University. He is a Committee Member of the CII - Eastern Region Council.
Education
M Economics, University of Oxford
B Economics, London School of Economics
SAROJ AGARWAL -
NON-EXECUTIVE DIRECTOR
Mrs. Saroj Agarwal is Non-Executive Director of Visa Steel Limited. Mrs.
Agarwal laid the foundation of the VISA Group during the mid-eighties. She
guides the organisation along its growth chart, while upholding its values and
spirit. A Bachelor of Arts from BHU, she takes an active interest in
philanthropic activities and contributes to the community through the VISA
Trust where she is a trustee. She is currently the Managing Director of VISA
International Limited and VISA Infrastructure Limited.
Education
BA, Banaras Hindu University
VIKAS AGARWAL -
NON-EXECUTIVE DIRECTOR
Mr. Vikas Agarwal is Non-Executive Director of Visa Steel Limited. Mr.
Agarwal is responsible for developing and nurturing the global coal and coke business
of the VISA Group and has been instrumental in securing investments in the
Group’s coal mining ventures in Australia and Indonesia. He holds a Masters
degree in Manufacturing Engineering from Trinity College, Cambridge University
and is currently the Managing Director of VISA Power Limited.
Education
M Manufacturing Engineering, Trinity College
DEBI PRASAD BAGCHI
- NON-EXECUTIVE INDEPENDENT DIRECTOR
Shri. Debi Prasad Bagchi is Non-Executive Independent Director of Visa
Steel Limited. Mr. Bagchi brings to the Board his deep knowledge of the
administrative services and the State of Orissa, especially in the steel AND
mining sector. He has held prestigious positions of authority like Additional
Secretary, Commerce Government of India; Secretary, Ministry of Small Scale
Industry Government of India”; Chief Secretary Government of Orissa, etc. A
Master of Arts in Economics and an M. Phil in Public Administration, Mr. Bagchi
was also the Chairman-cum-Managing Director of Orissa Lift Irrigation Corporation
and Managing Director of Orissa Mining Corporation Limited.
Education
M Public Administration, Punjab University
MA Economics, Utkal University
B Art, Utkal University
SHIV DAYAL KAPOOR
- NON-EXECUTIVE INDEPENDENT DIRECTOR
Mr. Shiv Dayal Kapoor is Non-Executive Independent Director of Visa
Steel Limited. Mr. Kapoor has over 42 years of experience in the minerals and
metals industry. He is the former Chairman of MMTC Limited and Neelachal Ispat
Nigam Limited and had been on the Board of many Public Sector Enterprises. A
B.Sc. in Metallurgical Engineering from BHU and an MBA from the University of
Leeds, UK, he is a recipient of the Best Chief Executive Gold Award “Rajiv
Ratna National Award 2005 and Top CEO of the year Award 2000” Indian Institute
of Marketing and Management, amongst others.
Education
MBA, University of Leeds
BS Metallurgical Engineering, Banaras Hindu University
PRADIP KUMAR
KHAITAN - NON-EXECUTIVE INDEPENDENT DIRECTOR
Shri. Pradip Kumar Khaitan is Non-Executive Independent Director of Visa
Steel Limited. Mr. Khaitan is a legal luminary and has experience in the fields
of commercial and corporate laws, tax laws, arbitration, foreign
collaborations, mergers and acquisitions and corporate restructuring. Mr.
Khaitan is a Bachelor of Commerce, an LLB and an Attorney-at-Law (Bells
Chamber, Gold Medalist). He is the Senior Partner of Khaitan and Company, a
Indian law firm and also member of the Bar Council of India, the Bar Council of
West Bengal and the Indian Council of Arbitration.
Education
LLB, University of Calcutta
BASUDEO PRASAD
MODI - DEPUTY MANAGING DIRECTOR, EXECUTIVE DIRECTOR
Mr. Basudeo Prasad Modi is Deputy Managing Director, Executive Director
of Visa Steel Limited. Mr. Modi is a Mechanical Engineer from the National Institute
of Technology, a Post Graduate Diploma holder in Industrial Engineering and an
MBA from the Institute of Business Management, Madras. He has several decades
of experience in the field of Design, Project Management and Operation. He has
worked at Bokaro Steel Plant, Bhilai Steel Plant, MECON and was the former
Managing Director of Neelachal Ispat Nigam Limited, Kalinganagar.
Education
MBA, Institute of Business Management
Mechanical Engineering, National Institute of Technology
SHANTI NARAIN - NON-EXECUTIVE
INDEPENDENT DIRECTOR
Mr. Shanti Narain is Non-Executive Independent Director of Visa Steel
Limited. Mr. Narain brings with him his in strategic management transport
systems, especially the Railways, in the areas of planning, marketing, monitoring
and control of operations and commercial activities and development of
transport infrastructure. He holds a Masters degree in Science (Mathematics)
and had been the Member, (Traffic) Railway Board for 4 years till February
2001. He is a member of several committees set up by the Government of India
and professional societies.
MAYA SHANKER VERMA
- NON-EXECUTIVE INDEPENDENT DIRECTOR
Shri. Maya Shanker Verma is Non-Executive Independent Director of Visa
Steel Limited. Mr. Verma is a career banker with a multilevel and wide ranging
experience of over 50 years, encompassing an understanding of the commercial,
developmental and investment banking as well as asset management and capital
market operations. A Master of Arts and Certified Associate of the Indian
Institute of Bankers, Mr. Verma held senior-most and critical positions in
India’s financial system and regulatory regimes like Chairman, State Bank of
India, IDBI Bank and Telecom Regulatory Authority of India.
Education
MA Philosophy, University of Patna
NEWS
VISA STEEL PLANT EXPLOSION: FOUR WORKERS HURT
15 September 2011
JAJPUR,
Sept. 15 -- Four workers were injured, one of them critically, in an explosion
in Visa Steel plant in Kalinganagar of the district on Thursday. The explosion took
place when the workers were working near the blast furnace at 10 am causing
burn injuries to four of them, said a police officer of Jakhpura police station
Bhabani Mishra.
While
one worker Keshaba Barik (28) with critical burn injuries were shifted to SCB
Hospital at Cuttack, three others Bijaya Behera (30), Simindra Samal (25) and
Ramakanta Mallick (28) were given medical treatment at a nearby hospital at
Danagadi, he said.
Kalinganagar
industrial area is "infamous" for explosions at industrial units due
to negligence. Four years back, the State Government had asked Visa Steel to
shut down blast furnace until proper examinations and its faults rectified by
an expert after 24 workers sustained burn injuries in an explosion in the
plant, said a noted trade union leader of the district Mayadhar Nayak.
Visa
Steel, the flagship company of '1,600 croreVISA Group is currently setting up
an integrated 1.5 million-tonne per annum special and stainless steel plant at
Kalinga Nagar Industrial Complex. In 2007 a Labour Department's committee had
given a written order to Visa Steel management not to operate the blast furnace
until the defects of the furnace caused by the explosion is rectified and
properly studied by a competent expert as per Section 40 of the Factories Act
1948.
The
committee said the accident occurred when the combustible gases inside the
furnace came in contact with oxygen after the clay sealing of the gas injector
trayer when it caught fire and exploded, added the trade union leader. Almost
all the plants in Kalinganagar areas have been ignoring safety norms for the
workers. Senior officials are hand-in-glove with the big companies as a result,
the officials are not taking any action against the guilty companies, added
Nayak.
When
contacted, Deputy Director of Factories and Boilers said, "I rushed to the
Visa Steel Company after knowing about this incident. Four workers were
cleaning hot-dust from dust catcher near the blast furnace and sustained
injuries. We will take proper steps against the steel company after
investigating the matter."
NO ORE: VISA STEEL SHUTS PLANT, MORE FOLLOW
14 September 2011
BHUBANESWAR,
Sept. 14 -- The steel rush of the Orissa Government has hit a dead end with
industries located at Kalinga Nagar Complex beginning to shut shop. Thanks to
non availability of iron ore, most of the industries which were promised moon
by the State Government are now waking up to the rude reality.
VISA
Steel has stopped production while others have followed suit. The 2.5million
tonne VISA Steel was dependent on Gandhamardan and Daitari Iron Ore Mines of
Orissa Mining Corporation (OMC). However, Gandhamardan has suspended operation
two months ago, cutting supply of raw materials to the steel plant.
To
add to their woes, a fortnight back, supply from Daitari was stopped. Bizarre
as it may sound, the OMC suspended its supply from Daitari mines since it
realized that the stockyard, known as Baliparbat, is located in a forest area
and the mines do not have necessary forest clearance.
"We
needed at least 1.15 lakh metric tonne ore every quarter for running the blast
furnace and DRI but could not get even half the requirement because
Gandhamardan was closed. Now, with the closure of supply from Daitari, there is
no option but to shut down the plant," sources in VISA Steel said.
VISA
Steel apart, other steel plants in Kalinga Nagar have closed their operation in
the absence of availability of raw material. The OMC decision to stop supply
from Daitari has come as a shocker for the industries which are dependent on
the PSU for raw materials since sourcing ore from private mines is next to
impossible in view of the prices.
In
fact, the pricing mechanism of OMC, which is decided every quarter basing on
the highest bid, had already hit the industries hard but they continued their
production even at extremely high costs. Snapping of the supply has dealt a
body blow to them.
It
was the Deputy Director, Mines, Jajpur Road who wrote to Director, Mines, about
two weeks back stating that Baliparbat is a forest land. DDM Satyananda Sahoo,
when contacted, confirmed that supply had been stopped till further clearance
is sanctioned by the Director of Mines.
"Baliparbat
has been the stockyard for the last 50 years and OMC has termed it as forest
land last month. We are surprised how OMC did not take any action even during
the closure of mine between April 2010 to October 2010 because it did not
possess environment clearance," All Orissa Steel Federation president PL
Kandoi said.
VISA STEEL GAINS ON RECEIVING RATING REAFFIRMATION
FOR ITS BANK FACILITIES BY CARE
09 September 2011
India, Sept. 09 -- Visa Steel is currently trading at Rs 58.00, up by
0.90 points or 1.58% from its previous closing of Rs 57.10 on the BSE. The
scrip opened at Rs 58.85 and has touched a high and low of Rs 58.85 and Rs
57.50 respectively. So far 3041 shares were traded on the counter. The BSE
group 'B' stock of face value Rs 10 has touched a 52 week high of Rs 65.20 on
31-May-2011 and a 52 week low of Rs 33.05 on 10-Dec-2010.Last one week high and
low of the scrip stood at Rs 58.85 and Rs 57.00 respectively. The current
market cap of the company is Rs 6281.000 millions. The promoters holding in the
company stood at 74.00% while Institutions and Non-Institutions held 4.55% and
21.45% respectively. CARE has reaffirmed the rating of 'CARE BBB+' for Visa
Steel's long-term bank facilities worth Rs 15780.000 millions. The credit
rating agency has also reaffirmed its rating of 'CARE A2+' for company's
short-term bank facilities aggregating to Rs 11000.000 millions. The rating
continues to draw strength from the experienced and qualified promoters and
management team of Visa Steel (VSL), strategic location of the plant in terms
of accessibility to quality raw materials and market for finished products,
well diversified customer profile, expected improvement in profitability in the
ensuing years due to commissioning of integrated steel plant and moderate
financial position. However, the ratings are constrained by the risk of
volatility in raw material and finished goods prices, leveraged capital
structure of the company, risks associated with implementation of the
infrastructure projects and cyclicality in the steel industry vis-a-vis
complete dependence on the fortunes of steel industry. Performance of the steel
industry and trends in the basic raw material prices in future with
stabilization in manufacturing operations will remain the key rating
sensitivities.VSL is engaged in manufacturing of pig iron (2.25 lakh tonnes per
annum (LTPA)), LAMC (4 LTPA), ferro chrome (0.5 LTPA), sponge iron (3 LTPA),
steel melting shop and rolling mill (5 LTPA each) and captive power plant (75
MW).
VISA
STEEL REVENUES GREW 62.30% IN Q1 FY’11-12 TO RS. 3670.000 MILLIONS
VISA Steel, a part of the Rs. 50000.000 millions VISA Group,
has set up an integrated Special Steel Plant at Kalinganagar Industrial Complex
in Orissa and is currently a producer of LAM Coke, Ferro Chrome, Pig Iron,
Sponge Iron, Power and Special Steel. The VISA Group has business interests in
steel, power, international trading, shipping and mining.
The Company announced its first quarter (Q1) unaudited
financial results for FY’2011-12 after its Board Meeting held at Bhubaneswar on
26th July 2011.
During Q1 of FY’2011-12, VISA Steel registered a robust
financial performance with a revenue growth of 62.30% to Rs. 3672.000 millions,
an increase in EBIDTA by 10.60% to Rs. 448.500 millions, and increase in PAT by
33.07% to Rs. 101.400 millions.
Financial Performance
(Rs.
In Millions)
|
1st Quarter |
Revenue |
EBITDA |
PBT |
PAT |
|
Q1 FY’ 10-11 |
2262.500 |
405.500 |
116.100 |
76.200 |
|
Q1 FY’ 11-12 |
3672.000 |
448.500 |
145.800 |
101.400 |
|
% Growth |
62.30% |
10.60% |
25.58% |
33.07% |
Operations Performance
The production figures of Q1 FY’11-12 versus Q1 FY’10-11
were as follows:-
|
Products |
Production |
||
|
Q1 2011-12 |
Q1 2010-11 |
||
|
Coke
(in MT) |
94,128 |
77,037 |
|
|
Ferro
Chrome (in MT) |
4,963 |
10,934 |
|
|
Hot Metal
(in MT) |
34,992 |
0 |
|
|
Sponge
Iron (in MT) |
37,571 |
37,938 |
|
|
Steel
(in MT) |
941 |
0 |
|
|
Power
(in Mn Units) |
100.71 |
50.83 |
|
Commenting on the performance for Q1 FY’2011-12, Mr. Vishal Agarwal, Managing
Director, VISA Steel, said –
“Our financial performance during Q1
FY’2011-12 registered a sharp growth in sales revenue due to increase in price
realization and production volumes. Operating margins have been lower due to higher
cost of raw material such as Coking Coal, Iron Ore and Chrome Ore.
VISA Steel has completed the full integration
of the manufacturing facilities for 0.5 million TPA Special Steel Plant and has
emerged among the leading special steel players in the Country. As the
production volumes ramp up over the coming quarters, we expect revenues and
profitability to improve.
VISA BAO Limited, a Joint Venture between
VISA Steel and Baosteel, which is setting up a 100,000 TPA Ferro Chrome Plant
at Kalinganagar in Orissa has made significant progress towards implementation
of the project and expects to commission the Plant in phases from March 2012
onwards.”
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. 49.13 |
|
|
1 |
Rs. 77.58 |
|
Euro |
1 |
Rs. 67.58 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
45 |
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.