MIRA
INFORM REPORT
|
Report Date : |
31.10.2011 |
IDENTIFICATION DETAILS
|
Name : |
SUNFLAG IRON AND STEEL COMPANY LIMITED |
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Registered
Office : |
33, Mount Road, Sadar, Nagpur – 440001, Maharashtra |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
12.09.1984 |
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Com. Reg. No.: |
11-034003 |
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Capital Investment
/ Paid-up Capital : |
Rs.1622.000 Millions |
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CIN No.: [Company Identification
No.] |
L27100MH1984PLC034003 |
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|
TAN No.: [Tax Deduction &
Collection Account No.] |
NGPS06339E/ NGPS02039C |
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PAN No.: [Permanent Account No.] |
AACCS3376C |
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Legal Form : |
A Public Limited Liability Company. The Company’s Share are Listed on
The Stock Exchange. |
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Line of Business
: |
Manufacturing and Marketing of Mild and Alloy Steel Rolled Products. |
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No. of Employees
: |
1400 (Approximately) [In Office – 300 and In Factory – 1100] |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (46) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 18980000 |
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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) |
|
|
A1 |
A1 |
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Risk Category |
ECGC Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office/ Head Office : |
33, Mount Road, Sadar, Nagpur – 440001, Maharashtra, India |
|
Tel. No.: |
91-712-2524661/ 2520356/ 57/ 58 |
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Fax No.: |
91-712-2520360 |
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E-Mail : |
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Website : |
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Factory : |
Warthi, Bhandara Road, Bhandara – 441905, Maharashtra, India |
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Warehouse : |
Located at : ·
Kolkata ·
Chennai |
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Branch Office : |
Located at :
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Regional Office 1 : |
C/O Themco Private Limited, 8-B. T. Road, Belgharia, Kolkata – 700056,
West Bengal, India |
|
Tel No. : |
91-33-25442890 |
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Fax No. : |
91-33-25442431 |
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Regional Office 2 : |
Plot No. 12, Sector – 6,
Mathura Road, Faridabad- 121 006, Haryana, India |
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Tel. No.: |
91-129-4290801-08 |
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Fax No.: |
91-129-4061646 |
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Regional
Office 3 : |
705,7th Floor, Challa Mall, 11/11A,Sir
Thiagaraya Road,T.Nagar, Chennai - 600 017, Tamilnadu, India |
|
Tel. No.: |
91-44-24341065 |
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Fax No.: |
91-44-24347649 |
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Regional Office
4 : |
Office No-65-69, Fifth Floor, 'Sai Kripa Bhavan', Pune -
Mumbai Highway, Opposite KSB Pumps, S No 5743, Kharalwadi,Pimpri
Dist: Pune - 411 018, Maharashtra, India |
|
Tel. No.: |
91-20-32940427 |
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Fax No.: |
91-20-27423013 |
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Regional Office
5 : |
307, Hamilton-B, Hiranandani Business Park, Ghodbunder
Road, Thane(West) 400 607,
Maharashtra, India |
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Tel. No.: |
91-22-25862294/95/96/25861928 |
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Fax No.: |
0091-22-25861931 |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. P. B. Bhardwaj |
|
Designation : |
Chairman Cum Managing Director |
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|
Name : |
Mr. Ravi Bhushan Bhardwaj |
|
Designation : |
Vice Chairman and Managing Director |
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Name : |
Mr. Pranav Bhardwaj |
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Designation : |
Joint Managing Director |
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Name : |
Mr. Suhrit Bhardwaj |
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Designation : |
Director (effective 27.07.2011) |
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Name : |
Dr. E. R. C. Shekar |
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Designation : |
Director |
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Name : |
Mr. S Gajendran |
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Designation : |
Director |
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Name : |
Mr. Surendra Kumar Gupta |
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Designation : |
Whole Time Director |
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Name : |
Mr. Kailash Chander Vijh |
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Designation : |
Director (effective 27.11.2011) |
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Name : |
CA Jayesh Madhavji Parmar |
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Designation : |
Director |
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Name : |
Mr. Naresh Gwalani |
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Designation : |
Nominee – IDBI Bank Limited |
KEY EXECUTIVES
|
Name : |
CA R. Muralidhar |
|
Designation : |
Chief Financial Officer - Executive Director (Finance) |
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Name : |
Mr. Mukesh D. Parakh |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.09.2011
|
Names of Shareholders |
No.
of Shares |
Percentage
of Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
1612140 |
0.99 |
|
|
8333356 |
5.14 |
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Sub Total |
9945496 |
6.13 |
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|
|
|
|
|
|
|
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|
12317398 |
7.59 |
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|
65253582 |
40.23 |
|
Sub Total |
77570980 |
47.83 |
|
|
|
|
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Total
Shareholding of Promoter and Promoter Group (A) |
87516476 |
53.96 |
|
|
|
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(B) Public Shareholding |
|
|
|
|
|
|
|
|
88200 |
0.05 |
|
|
159110 |
0.10 |
|
|
1100 |
-- |
|
|
150000 |
0.09 |
|
Sub Total |
398410 |
0.25 |
|
|
|
|
|
|
|
|
|
|
14526255 |
8.96 |
|
|
|
|
|
|
31452029 |
19.39 |
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|
27657870 |
17.05 |
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|
646463 |
0.40 |
|
|
559086 |
0.34 |
|
|
83452 |
0.05 |
|
|
3825 |
-- |
|
|
100 |
-- |
|
Sub Total |
74282617 |
45.80 |
|
Total
Public Shareholding (B) |
74681027 |
46.04 |
|
|
|
|
|
Total
(A)+(B) |
162197503 |
100.00 |
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|
|
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(C) Shares held by Custodians and against which Depository
Receipts have been issued |
|
-- |
|
|
|
|
|
(1) Promoter and Promoter Group |
-- |
-- |
|
(2)
Public |
-- |
-- |
|
Total (A)+(B)+(C) |
162197503 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal share
capital up to Rs.0.100BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Marketing of Mild and Alloy Steel Rolled Products. |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity (@) |
Actual
Production |
|
Direct Reduced Iron |
MT |
N. A |
150000 |
92774 |
|
Mild and Alloy Steel Rolled Products |
MT |
N. A |
200000 |
311131* |
|
Hot Metal/ Pig Iron |
MT |
N. A |
240000 |
193992 |
|
Sinter |
MT |
N. A |
364000 |
333201 |
|
Captive Power |
kWh |
N. A |
180000000 |
127620000 |
Note :
@ As certified by Management, being technical
in nature
* Includes outside conversion 19219 MT
(Previous year 13001 MT) and re-rolling and coil to rounds inputs 16736 MT
(Previous year 2315 MT)
GENERAL INFORMATION
|
No. of Employees : |
1400 (Approximately) [In Office – 300 and In Factory – 1100] |
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Bankers : |
·
State Bank of India ·
Bank of India ·
Canara Bank ·
Indian Bank ·
State Bank of Bikaner and Jaipur ·
IDBI Bank Limited |
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Facilities : |
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Banking
Relations : |
-- |
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Statutory Auditors : |
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Name : |
Patel, Shah and Joshi Chartered Accountants |
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Address : |
Mumbai, Maharashtra, India |
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Cost Auditors : |
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|
Name : |
G. R. Paliwal and Company Cost Acountants |
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Address : |
Nagpur, Maharashtra, India |
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Subsidiaries : |
·
Sunflag Power Limited ·
Sunflag Special Steels Limited ·
Khappa Coal Company Private Limited |
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Associate Enterprise : |
·
Haryana Television Limited |
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|
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Enterprise which have significant influence : |
·
Sunflag Limited, Channel Islands, UK |
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|
|
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Relative to Key Managerial Personnel : |
·
Ridge Farm Developers Private Limited |
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|
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Joint Venture Companies : |
·
Madanpur (North) Coal Company Private Limited ·
C T Minning Private Limited ·
Gujarat State Minning and Resources Corporation
Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
165000000 |
Equity Shares |
Rs.10/- each |
Rs.1650.00 Millions |
|
4000000 |
10% Cumulative Convertible Preference Shares |
Rs.100/- each |
Rs.400.000 Millions |
|
|
|
|
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
162197503 |
Equity Shares |
Rs.10/- each |
Rs.1622.000
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 |
1622.000 |
1622.000 |
1621.975 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
3125.000 |
2514.000 |
1659.866 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
4747.000 |
4136.000 |
3281.841 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3384.300 |
1843.200 |
1951.625 |
|
|
2] Unsecured Loans |
986.500 |
1445.000 |
1172.329 |
|
|
TOTAL BORROWING |
4370.800 |
3288.200 |
3123.954 |
|
|
DEFERRED TAX LIABILITIES |
488.100 |
502.000 |
460.519 |
|
|
|
|
|
|
|
|
TOTAL |
9605.900 |
7926.200 |
6866.314 |
|
|
|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3449.700 |
3709.400 |
3208.280 |
|
|
Capital work-in-progress |
1973.600 |
283.500 |
836.137 |
|
|
|
|
|
|
|
|
INVESTMENT |
75.800 |
75.600 |
12.219 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2990.300
|
2548.900
|
1658.919
|
|
|
Sundry Debtors |
1409.000
|
1216.900
|
758.094
|
|
|
Cash & Bank Balances |
345.500
|
296.400
|
233.070
|
|
|
Other Current Assets |
0.000
|
0.000
|
0.000
|
|
|
Loans & Advances |
1466.500
|
1741.200
|
1643.208
|
|
Total
Current Assets |
6211.300
|
5803.400 |
4293.291
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
510.500
|
114.200
|
168.992
|
|
|
Other Current Liabilities |
882.300
|
1205.100
|
799.587
|
|
|
Provisions |
711.700
|
626.400
|
515.034
|
|
Total
Current Liabilities |
2104.500
|
1945.700 |
1483.613
|
|
|
Net Current Assets |
4106.800
|
3857.700 |
2809.678
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
9605.900 |
7926.200 |
6866.314 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
15399.800 |
13480.600 |
10999.789 |
|
|
|
Export Incentive |
40.900 |
15.700 |
24.949 |
|
|
|
Other Income |
56.000 |
49.600 |
49.469 |
|
|
|
TOTAL (A) |
15496.700 |
13545.900 |
11074.207 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Material Consumption |
9862.200 |
8212.800 |
1598.177 |
|
|
|
Other Manufacturing Expenses |
2632.300 |
2209.500 |
7404.276 |
|
|
|
Staff and Establishment Expenses |
830.500 |
722.900 |
591.713 |
|
|
|
Selling Expenses |
492.700 |
440.500 |
287.459 |
|
|
|
TOTAL (B) |
13817.700 |
11585.700 |
9881.625 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1679.00 |
1960.200 |
1192.582 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
374.400 |
300.400 |
304.392 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1304.600 |
1659.800 |
888.190 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
396.400 |
378.800 |
309.374 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
908.200 |
1281.000 |
578.816 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
202.900 |
331.900 |
142.847 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
705.300 |
949.100 |
435.969 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
2488.400 |
1634.200 |
1293.158 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend on Equity Shares |
81.100 |
81.100 |
81.099 |
|
|
|
Corporate Dividend Tax |
13.200 |
13.800 |
13.783 |
|
|
BALANCE CARRIED
TO THE B/S |
3099.400 |
2488.400 |
1634.245 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export at FOB value |
1151.400 |
1227.400 |
761.968 |
|
|
TOTAL EARNINGS |
1151.400 |
1227.400 |
761.968 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
1295.600 |
1003.500 |
210.122 |
|
|
|
Components & Spares |
26.200 |
21.100 |
7.848 |
|
|
|
Capital Goods |
414.500 |
78.500 |
163.137 |
|
|
TOTAL IMPORTS |
1736.300 |
1103.100 |
381.107 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
4.35 |
5.85 |
2.69 |
|
QUARTERLY RESULTS
(Rs. in Millions)
|
PARTICULARS |
|
30.06.2011 (1st
Quarter) |
30.09.2011 (2nd
Quarter) |
|
|
|
UnAudited |
UnAudited |
|
Net Sales |
|
3736.100 |
4076.900 |
|
Total Expenditure |
|
3481.600 |
3801.900 |
|
PBIDT (Excl OI) |
|
254.500 |
275.000 |
|
Other Income |
|
5.400 |
10.800 |
|
Operating Profit |
|
259.900 |
285.800 |
|
Interest |
|
100.100 |
124.900 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
PBDT |
|
159.800 |
160.900 |
|
Depreciation |
|
98.400 |
93.000 |
|
Profit Before Tax |
|
61.400 |
67.900 |
|
Tax |
|
12.900 |
46.000 |
|
Provisions and contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
48.500 |
21.900 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
4.55
|
7.01 |
3.94
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
5.89
|
9.50 |
5.26
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
9.40
|
13.46 |
7.72
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19
|
0.31 |
0.18
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.36
|
1.26 |
1.40
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.95
|
2.98 |
2.89
|
LOCAL AGENCY FURTHER INFORMATION
REVIEW OF OPERATIONS FINANCE
The
Company has ended the financial year with a profit after tax of `Rs.705.300
Millions. After taking into account the brought forward profit of Rs.2488.400
Millions and appropriations of Rs.94.300 Millions, the Company has
carried forward an amount of Rs.3099.400 Millions.
OPERATIONS
i. During the year
:
a. Direct Reduction Plant during the year
produced 92,774 MT as against 126,336 MT in the
previous year.
b. The total production of Billets was 304,936
MT in their Steel Melt Shop as against 326,141 MT of the previous year.
c. The total production of Rolled products was
311,131 MT as against 309,596 MT of the previous year.
d. The total production of Pig Iron was
193,992 MT as against the previous year production of 205,502 MT.
e. The total production of Sinter Plant was
333,201 MT as against 191,385 MT previous year.
ii. The power
plant generated 1,276.20 Lacs kWh as compared to 1,461.03 Lacs kWh in the
corresponding previous year.
iii. The total coal production at Belgaon Coal Block is 114,000 MT as against 140,147 MT in the previous year. Subsidiary Companies : Sunflag Power Limited : The necessary approvals are being sought for the implementation of Hydro Power Project at Hanol-Tuini, in the state of Uttarakhand.
Sunflag Special Steels Limited : The management is exploring the business opportunities for the Company.
Khappa Coal Company Private Limited : In respect of Khappa and Extension Coal Block in the state of Maharashtra, the Company has taken effective steps for getting various approvals / clearances viz. mining and closure plan from Coal Ministry, terms of references from Forest and Environment Ministry, reports of subsidence prediction study and survey from CIMFR, etc. Further, the procurement of land for incline drivage and other infrastructure has commenced. Certain applications have been made to concerned authorities and their approvals and clearances are awaited.
Joint Venture Companies : Madanpur (North) Coal Company Private Limited : Various approvals / clearances are being sought from the concerned authorities for effective implementation of the Madanpur (North) Coal project in the state of Chhattisgarh.
C T Mining Private Limited : Various approvals / clearances are being sought from the concerned authorities for effective implementation of the Choritand - Taliya Coking Coal project in the state of Jharkhand.
Gujarat State Mining and Resources Corporation Limited : A State Government Company by virtue of subsidiary of GMDC Limited, wherein the share of the Company is 49%, was formed during the period, for development of integrated coke oven plant in the state of Gujarat.
SUBSIDIARY COMPANIES In pursuance of General Circular No. 2/2011 dated 8th February 2011 issued by the Ministry of Corporate Affairs, Government of India and on compliance of terms and condition for availing the general exemption Under Section 212(8) of the Companies Act, 1956, the Annual Accounts of the Subsidiary Companies, viz. ''Sunflag Power Limited'', ''Sunflag Special Steels Limited'' and ''Khappa Coal Company Private Limited'' are not attached with the Annual Report of the Company. The Annual Accounts of these Subsidiary Companies are available for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of subsidiary Company''s accounts, may write to the Company Secretary at the Registered Office of the Company. MANAGEMENT DISCUSSION AND ANALYSIS
The Company had
set up a 'state of the art' integrated Steel plant at Warthi, Bhandara Road to
produce high quality Special Steel with manufacturing facilities like Sponge
Iron Plant, Mini Blast Furnace, Sinter plant and Captive Power Plant. has
established itself as a major global force. With the modern complex pulsating
with world class technology, expert human resources and a commitment to
excellence, has become a reputed supplier in Flat Bars, Round Bars, Bright Bars
and Wire Rods of Alloy Steel, Spring Steel and Stainless Steel and captured
better position in these market segments. is also embarking on an export thrust
and is regularly supplying to various customers in South East Asian, African,
Middle East and South American countries.
GLOBAL AND INDIAN ECONOMIC SCENARIO
The road to
recovery from the great recession is proving to be long, winding and rocky.
After a year of fragile and uneven recovery, growth of the world economy
started to decelerate on a broad front in mid-2010. The slowdown is expected to
continue in 2011 and 2012. The outlook is shrouded in great uncertainty and
serious downside risk remains globally. The United nations baseline forecast
for the growth world gross product (WGP) is 3.1% for 2011 and 3.5% for 2012,
which is below the 3.6% estimated for 2010 and the pre-crisis pace of global growth.
Better outcomes may be expected only through strengthened international policy
co-ordination.
Among the
developed economies, USA has been on the mend from its longest and deepest
recession since second world war. At 2.6% in 2010, the growth is expected to be
moderate further to 2.2% in 2011 and to improve slightly to 2.8% in 2012. The
growth prospects for Europe and Japan are even dimmer and the growth in the
euro area is forecast virtually stagnate at 1.3% in 2011 and 1.7% is 2012 as
against the growth in 2010 was 1.6%. Many European countries such as Greece,
Ireland, Portugal and Spain will see even less growth challenged by persistent
deflation and elevated public debt, the economy is expected to grow by meager
1.1% in 2011 and 1.4% in 2012.
Among the
economies in transition, the Commonwealth of Independent States (CIS) and
Georgia experienced a rebound in GDP by about 4.0% on average in 2010, up from
the deep contraction of 6.7% in 2009. Increased external demand and rebounding
commodity prices are the drivers of the recovery. The recovery has slowed in
the course of 2010, however, output growth is not expected to accelerate in the
outlook for 2011 and 2012. In 2011 and 2012, the pace of recovery in South -
Eastern Europe is expected to be rather slow.
The developing
countries continue to drive the global recovery, but their output growth is
also expected to moderate to 6.0% on an average during 2011-2012, down from
7.1% in 2010. Developing Asia, led by China and India, continues to show the
strongest growth performance, but GDP growth in these two new economic giants
is expected to experience some moderation in 2011 and 2012. Growth in Latin
America, particularly that in the South American economies, is projected to
remain relatively robust at about 4.1% in the base line forecast.
India is rated
today as one of the most attractive investment destination across the globe. As
per International Monetary Fund (IMF), the Indian economy is projected to expand
by 8.2% in 2011, unchanged from its growth forecast made in April. However,
this is much lower than 10.4% growth witnessed in 2010. Inflation and hike in
input costs have played a major role in striking the GDP. The multilateral
lender's latest projection comes at a time when the country is grappling with
uncomfortably high inflation that threatens to derail its growth story.
Inflation in India, which is the second fastest economy after China, crossed
9.0% mark in May. IMF expects India to expand at a much slower pace at 7.8% in
2012, according to the world economic outlook report. The multilateral lender
had earlier in April estimated that the Indian economy will expand by 8.2% and
7.8% in 2011 and 2012, respectively.
As per India Brand
Equity Foundation (IBEF), the overall growth Index of Industrial Production
(IIP) during 2010-2011 was about 7.8%. The six core industries comprising of
crude oil, petroleum refinery products, coal, electricity, cement and finished
carbon steel and which accounts for nearly 27% of the total, grew by 5.7% as
compared to 5.4% in the previous year. The domestic environment is conducive
for growth and private final consumption expenditure is projected to grow by
healthy 7.5% and gross fixed capital formation by 14.6%. On the back of such
facts, India's GDP is projected to continue to row at a brisk pace of 8.8% in 2011-2012.
STEEL INDUSTRY Industrial climate
during the year has marginally improved for the Steel Industry, Automobile and
Auto Components Sectors. The Indian Steel Industry also witnessed the marginal
growth during the financial year 2010-2011. The Alloy steel industry in general
also showed good improvement in production, commensurate with the demand of
steel for automobile application. The growth in the manufacture of commercial
vehicles during the year was significant. In other areas of automobile
industry, motorcycle production also shown growth which improved the demand of
alloy steel for component manufacture for this industry.
The overall
inflation for 2010-2011 stands at 9.4% and is much above what the RBI considers
as the 'growth promoting inflation rate' and which is about 5%. In the
manufactured products category too signs of a buildup in inflation have
strengthened with segments like edible oils, cotton textiles, man-made
textiles, basic metal alloys, iron and steel and rubber and plastic products
seeing a considerable increase in prices. This has relatively increased the
input costs as manufacturers have crossed the level beyond which holding price
line is no longer a viable option. having entered into the areas of
manufacturing of wire rod and bars of alloy and special steel, after
commissioning
vacuum degassing, has been able to embark its growth even in such economic
conditions.
MATERIAL DEVELOPMENT
Subject has been
able to increase its turnover during the year by about 14.24% over the previous
year, mainly due to marginal rise in selling prices of its products. However,
due to abnormal rise in the cost of inputs such as pig iron, iron ore and coke,
full benefit could not be realised.
In order to
achieve effective cost reduction and improvement in productivity, activity of
total productive maintenance (TPM) continued to be implemented by the Company
during the year.
OPPORTUNITIES
The Company see
more opportunities in the years to come due to continuous developments of new
grades of high alloy steel as well wire rod. Further, venturing into the
self dependency of raw material will help in decreasing in the cost of
production and enhancing the profitability. This has even proved advantageous
during the recessionary period which is very good sign for the Company.
The transition to
GST would be an important milestone from a macro perspective, moving from the
current system of different types of indirect taxes at multiple rates. The new
system would cover a wider base, including all goods and services and would
create a vibrant common market. The GST would aim to bring considerable
economic benefit in the form of reduced transaction costs, revenue neutrality
and substantially lower taxes. The current system taxes production, whereas GST
would tax consumption. Indeed, current law levies taxes on the movement of
goods from one state to other - effectively creating borders within borders. It
also distorts the allocation of resources and inhibits productivity growth.
THREATS
The global
slowdown as well as rising and fluctuating prices of raw materials is adversely
affected the output prices thereby causing hardship to the customers. The
availability of the quality raw materials Iron Ore, Coal, LAM Coke is the cause
of concern for the industry. As such there is no threat to other than those
mentioned above.
Contingent
Liabilities not provided for:
(Rs. In
Millions)
|
Particulars |
31.03.2011 |
31.03.2010 |
|
Unexpired Letters of Credit |
503.400 |
1085.000 |
|
Guarantees issued by Company's Bankers on behalf of the
Company |
180.000 |
116.100 |
|
Bonds / Undertakings given by the Company under Duty
Exemption Scheme to Customs Authorities |
340.800 |
3.600 |
|
Bills Discounted |
293.500 |
399.400 |
|
Excise Duty and Customs Duty against which Company has
preferred an appeal |
10.300 |
40.000 |
|
Sales Tax liability against which Company has preferred an
appeal |
0.000 |
280.300 |
|
Corporate Guarantee issued to Banks on behalf of
Subsidiaries |
40.000 |
40.000 |
|
Income Tax Liability even though paid against which
Company has preferred an appeal |
36.400 |
0.000 |
FIXED ASSETS
·
Freehold Land
·
Leasehold Land
·
Buildings
- Factory Building
- Non – Factory Building
- Office Building
- Township
- Welfare Building
- Roads
- Boundary wall and fencing
·
Railway Siding
·
Plant and Machinery
·
Furniture and Fixture
·
Heavy Vehicles
·
Light Vehicles
·
Development of Mines
BUSINESS DESCRIPTION
Subject (Sunflag Steel) is primarily engaged in the iron and steel business. During the fiscal year ended March 31, 2010(fiscal 2010), the direct production plant of the Company produced 115,299 metric tons of steel. During fiscal 2010, the steel melt shop of the Company produced 207,757 metric tons of steel. In fiscal 2010, Sunflag Steel produced 203,663 metric tons of rolled products. In fiscal 2010, the Company produced 127,002 metric tons of pig iron. During fiscal 2010, the Company’s power plant generated approximately 146.1 million kilowatt hours of power and the Belgaon coal block of the Company produced 140,147 metric tons of coal. The products manufactured by the Company include flats, rounds and round cornered squares. The Company’s subsidiaries include Sunflag Power Limited and Sunflag Special Steels Limited. For the nine months ended 31 December 2010, Sunflag Iron and Steel Company Limited revenues increased 23% to RS11.70B. Net income decreased 15% to RS532.6M. Revenues reflect an increase in income from operation, increased interest income from bank. Net income also reflects decreased interest expense and improved operating margin. The company is engaged in the production of high quality special steel. Its also generates power from its captive plant.
Board of Directors
Pranav Bhardwaj (Joint Managing Director, Executive Director Chairman)
Mr. Pranav Bhardwaj is Joint Managing Director, Executive Director of Sunflag Iron and Steel Limited He has graduated as B.Sc. Majoring in Chemistry and Business Management (Joint Honors Degree) from the world Imperial College of London. Though he belongs to the Promoter Group, he preferred to join Sunflag Iron and Steel Company Limited as a Trainee to work and have an experience at basic levels. During the period 1995 to 1999, he undergone intensive training in production, planning and control, maintenance and service, quality control, purchase, marketing, customer satisfaction and human resource management. He is instrumental in product development and export sales. He was appointed as an Alternate Director of the Company for the period 16th September 1999 to 10th January 2000. Further, he was appointed as a Director effective from 3 February 2000. Keeping in view his unstinted efforts and wide contributions, the Company has appointed him as the Joint Managing Director for a period of 5 (five) years effective from 17th January 2001 and also re-appointed as the Joint Managing Director for a further period of 5 (five) years effective from 17th January 2006.
Suhrit Bhardwaj
(Additional Director)
Mr. Suhrit Bhardwaj is Additional Director of Sunflag Iron And Steel Company Limited He has graduated as B.Sc. Majoring in Chemistry and Business Management (Joint Honors Degree) from the world Kings College of London University. Though he belongs to the Promoter Group, he preferred to join Sunflag Group Companies in Kenya in the year 1997. He is having experience while working at basic levels through training and further heading in production, planning and control, maintenance and service, quality control, purchase, marketing, customer satisfaction and human resource management. He is instrumental in project development and commercial aspects. Presently, he is a Group Managing Director of Sunflag Group, Kenya which owns Textile Manufacturing Units employing about 4,000 employees. He is a Director of Supra Corporation Limited and holding 11,517,398 (7.10%) Equity Shares in Sunflag Iron and Steel Company Limited.
S. Gajendran
(Non-Executive Independent Director)
Mr. S. Gajendran is Non-Executive Independent Director of Sunflag Iron and Steel Limited He graduated from Madras University as Electrical Engineer, is a Member of Institution of Engineers. On completing his graduation, he started his career with Bharat Earth Movers Limited, Bangalore in 1969. After, he joined Tamilnadu Electricity Board in 1970 and served the Board in various capacities in rural areas and Chennai. He then joined IDBI in 1979 as Deputy Manager. He served IDBI, Chennai in various capacities and was handling projects appraisal, follow-up of industrial units. During this period, he was also associated with evaluation studies of various State Level Institutions in Southern Region. In 1992, he was transferred to Head Office where he was in-charge of select Industrial houses viz., spat, Essar, Lloyds, Sunflag. During this period, he had specialised in project Finance for Steel, Cement and other Infrastructure Projects. He had a unique distinction of being the leader of study team of Fianancial Institutions / Investment Institution to evaluate the new technology called “COREX” used for Steel making. He was also in charge of Indirect Finance Department, Administration and Premises Department and Human Resources Department as Chief General Manager during 1997-2000. During 2000-2002 he was incharge of Southern Zonal Office Chennai (Tamilnadu, Andhra, Karnataka, Kerala and Pondicherry). Then, he was elevated as Executive Director and posted as Director in-charge of Jawaharlal Nehru Institute for Development Banking (Division of 1081). He retired from IDBI services in year 2004.
Surendra Kumar Gupta
(Board Member)
Mr. Surendra Kumar Gupta is Whole Time Director of Sunflag Iron and Steel Limited He is a B.E. (Mechanical) and has done Diploma in Business Management and having more than 30 years of experience in the Steel and steel making industry and has handled management positions in various organisations before he joined Sunflag Iron and Steel Company Limited as a Chief Coordinator in the year 1992. Over a period of time, he was promoted as General Manager (Marketing), then as the Executive Director of the Company.
Jayesh Madhavji
Parmar (Non-Executive Independent Director)
Mr. CA Jayesh Madhavji Parmar is Non-Executive Independent Director of Sunflag Iron and Steel Limited He is a fellow member of the Institute of Chartered Accountants of India ('the ICAI'). He is in practice as a Chartered Accountant and a partner with M/s. Kanu Doshi Associates, Chartered Accountants, Mumbai since year 1993. He was a member of a committee set up by the ICAI on revision of the accounting standards. In the course of practice, he dealt with number of clients including corporate, manufacturing and service sector industry on various subjects like international taxation, acquisition and mergers, valuation of business and shares, restructuring of business, due diligence audits, cross border transactions, setting up of a foreign branch, entry level strategy, offshore company formation, government approvals for foreign investments. He is a member of Audit Committee and Remuneration Committee of the board. He is also holding the directorship in Arcon Automotive India Private Limited, Capstone Commodities Multi Trade Private Limited, AGS Transact Tech Limited, Unibios Laboratories Limited and KDA Corporate Advisors Private Limited. He does not hold any shares in Sunflag Iron and Steel Company Limited.
E. R. C. Shekar
Non-Executive Independent Director
Dr. E. R. C. Shekar is Non-Executive Independent Director of
Sunflag Iron and Steel Limited He is graduated in the Metallurgical Engineering
and awarded Doctorate in that field. He was Managing Director of Steel
Authority of India Limited (SAIL). He has gained more than four decades of
experience in steel making and marketing. He is associated with Sunflag since
1991 as an Independent, Non-executive Director He is Chairman of the
‘Remuneration Committee’ and Investors ‘Grievance ‘Committee’ of Board and also
a member of ‘Board Committee’, ‘Audit Committee’ and ‘Share Transfer Committee’
of the Board. He is also holding Directorship in SPA Computers Limited,
Navbharat Ventures Limited: Jayprakash Associates Limited and Hazira Plates
Limited.
Kailash Chander Vijh
Additional (Non-Executive Independent Director)
Mr. Kailash Chander Vijh is Additional Non-Executive
Independent Director of Sunflag Iron And Steel Company Limited He is a graduate
mining engineer from Indian School of Mines, Dhanbad. He holds First class Mine
Managers' Certificate of Competency and is also a Fellow Member of the
Institution of Engineers. He also holds Post Graduate in Mine Planning from
Leningrad Mining Institute, USSR and Post Graduate Diploma in Business
Management (Gold Medalist). Mr. Vijh had an excellent and distinguished career
in mining industry. Over three decades, he worked in various subsidiaries of
Coal India Limited and retired as Chairman-cum-Managing Director of Western
Coalfields Limited. Mr. Vijh has experience in design and operations of
underground and opencast mines, Design and layout of longwall faces/continuous
miner faces and their operation with improved productivity and reduced cost. He
had started green field projects without time and cost overrun. During his distinguished
career, he had handled complex industrial relations problems including
management, development and training of manpower. He is a Director of B L A
Power Private Limited and Castron Mining Limited. He does not hold any shares
in Sunflag Iron and Steel Company Limited.
Pranav Bhardwaj
(Joint Managing Director, Executive Director)
Mr. Pranav Bhardwaj is Joint Managing Director, Executive
Director of Sunflag Iron and Steel Limited He has graduated as B.Sc. Majoring
in Chemistry and Business Management (Joint Honors Degree) from the world
Imperial College of London. Though he belongs to the Promoter Group, he
preferred to join Sunflag Iron and Steel Company Limited as a Trainee to work
and have an experience at basic levels. During the period 1995 to 1999, he
undergone intensive training in production, planning and control, maintenance
and service, quality control, purchase, marketing, customer satisfaction and
human resource management. He is instrumental in product development and export
sales. He was appointed as an Alternate Director of the Company for the period
16th September 1999 to 10th January 2000. Further, he was appointed as a
Director effective from 3 February 2000. Keeping in view his unstinted efforts
and wide contributions, the Company has appointed him as the Joint Managing
Director for a period of 5 (five) years effective from 17th January 2001 and
also re-appointed as the Joint Managing Director for a further period of 5
(five) years effective from 17th January 2006.
PRESS RELEASE ;
National Mineral
Development Corporation Limited To Acquire Stake In Sunflag Iron and Steel
Company Limited Coal Project-WSJ Sep 22, 2011
The Wall Street Journal reported that National Mineral
Development Corp. Limited (NMDC) has signed an initial agreement with Sunflag
Iron and Steel Company Limited to acquire a 26% stake in a Mozambique coal
project. The pact with Sunflag forms part of NMDC's plan to invest in coking
coal and iron ore assets overseas to propel its iron ore and upcoming steel
projects. NMDC is also in talks to buy coking coal mines from privately held
U.S.-based Tacoa Minerals LLC. It is also conducting a joint feasibility study
with Minemakers Limited to develop the Wonarah phosphate deposit in Australia.
Sunflag Iron and
Steel Company Limited Recommends Final Dividend May 27, 2011
Sunflag Iron and Steel Company Limited announced that the
Board of Directors has considered and recommended a Final Dividend at 5% on the
Equity Shares (INR0.50 Per Equity Share) of the Company for the financial year
2010-2011, subject to approval of Members at the Annual General Meeting.
Sunflag
Iron and Steel Company Limited Announces
Strike At The Company's Works At Warthi, Bhandara Road
Oct
28, 2010
Sunflag Iron and
Steel Company Limited announced that the recognised labour union of the Company
has called a strike at the Company's Works at Warthi, Bhandara Road, Bhandara
441905 effective from October 27, 2010. However, the Company's Management has
declared the said strike as an illegal strike, instigated, resorted to and
supported by the recognised labour union namely Sunflag Iron and Steel Mazdoor
Sabha.
Disclosures
under Reg. 7(3) of SEBI (SAST) Regulations, 1997
India, Sept. 06 -- Sunflag Iron and Steel Company Limited
has submitted the disclosure under Regulation 7(3) of SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997 to BSE: Published by HT
Syndication with permission from ACCORD FINTECH BSE.
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.48.82 |
|
|
1 |
Rs.78.57 |
|
Euro |
1 |
Rs.69.28 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
46 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.