MIRA INFORM REPORT

 

 

Report Date :

09.09.2011

 

IDENTIFICATION DETAILS

 

Name :

LLOYDS STEEL INDUSTRIES LIMITED (03.06.1986)

 

 

Formerly Known As :

GUPTA TUBES AND PIPES PRIVATE LIMITED

 

 

Registered Office :

Trade World, C- Wing, 16th Floor, Kamala City, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400013, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

27.04.1970

 

 

Com. Reg. No.:

11-14621

 

 

Capital Investment / Paid-up Capital :

Rs. 4604.370 Millions

 

 

 

CIN No.:

[Company Identification No.]

L27100MH1970PLC014621

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUML04143G / NGPL02517E  / MUML03144B

 

 

PAN No.:

[Permanent Account No.]

AAATL1607J / AAACL6670Q

 

 

Legal Form :

Public Limited Liability Company.  The company’s shares are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing and Fabrication of Chemical and Pharmaceutical Machinery, Ship Sets of Steering Gears Stabilisers, Steel Pipes and Tubes, etc.

 

 

No. of Employees :

1439 Approximately

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca (17)

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Status :

Moderate

 

 

Payment Behaviour :

Slow

 

 

Litigation :

Clear

 

 

Comments :

Subject is an established company having moderate track. The appears huge accumulated losses recorded by the company. Profitability of the company is under severe pressure. However, Trade relations are reported as fair. Business is active. Payments are reported to be slow.

 

The company can be considered for any business dealings on secured trade terms and conditions.

 

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – April 1, 2010

 

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

INFORMATION DENIED BY

 

Name :

Mr. C. G. Mhatre

Designation :

Accounts Manager

Contact No.:

91-22-30418111

 

 

LOCATIONS

 

Registered Office :

Trade World, C- Wing, 16th Floor, Kamala City, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400013, Maharashtra, India

Tel. No.:

91-22-30418111/06

Fax No.:

91-22-30418260/59

E-Mail :

blagarwal@lloyds.in

puspendu@lloyds.in
mkjain@lloyds.in
akelkar@lloyds.in
international@lloyds.in

mbawa@lloyds.in
srshah@lloyds.in

sntiwari@lloyds.in

Website :

www.lloydsgroup.com

 

 

Factory 1 :

Steel Division

Lloyds Nagar, Bhugaon Link Road, Wardha – 442 001, Maharashtra

Tel. No.:

91-7152-305000

Fax No.:

91-7152-305050

 

 

Factory 2 :

Engineering Division

Plot No. A-5/5, A-6/3, M.I.D.C. Industrial Area, Murbad, District Thane, Maharashtra

 

 

Marketing Offices :

Located at :-

 

·       Kolkata, West Bengal

·       Hyderabad, Andhra Pradesh

·       Mumbai, Maharashtra

·       New Delhi

·       Bangalore, Karnataka, India

·       Chennai, Tamilnadu, India

 

 

 

 

DIRECTORS

 

As On 29.07.2010

 

Name :

Mr. Mukesh R. Gupta

Designation :

Chairman

 

 

Name :

Mr. Rajesh R. Gupta

Designation :

Managing Director

 

 

Name :

Mr. B. L. Agarwal

Designation :

Director

 

 

Name :

Mr. B. Ravindranath

Designation :

Director (IDBI Nominee)

 

 

Name :

Mr. S. K. Singhai

Designation :

Director (IFCI Nominee)

 

 

Name :

Mr. K. A. Krishna Rao

Designation :

Director

 

 

Name :

Mr. Parthasarathy

Designation :

FCI Nominee

 

 

Name :

Mr. S. K Gupta

Designation :

Director (Arcil Nominee)

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 30.06.2011

 

Category of Shareholder

Total No. of Shares

 % of total No. of Shares

 

 

As a % of (A+B+C)

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

245,440

0.06

Bodies Corporate

207,923,819

53.13

Sub Total

208,169,259

53.19

(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

208,169,259

53.19

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

575,821

0.15

Financial Institutions / Banks

26,579,102

6.79

Central Government / State Government(s)

1,500

-

Insurance Companies

4,389,894

1.12

Foreign Institutional Investors

241,442

0.06

Sub Total

31,787,759

8.12

(2) Non-Institutions

 

 

Bodies Corporate

39,235,723

10.03

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs. 0.100 million

63,358,791

16.19

Individual shareholders holding nominal share capital in excess of Rs. 0.100 million

32,585,593

8.33

Any Others (Specify)

16,201,116

4.14

Clearing Members

1,975,437

0.50

Non Resident Indians

2,763,679

0.71

Overseas Corporate Bodies

11,451,900

2.93

Trusts

5,100

-

Directors & their Relatives & Friends

5,000

-

Sub Total

151,381,223

38.68

Total Public shareholding (B)

183,168,982

46.81

Total (A)+(B)

391,338,241

100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

-

-

(1) Promoter and Promoter Group

-

-

(2) Public

-

-

Sub Total

-

-

Total (A)+(B)+(C)

391,338,241

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Fabrication of Chemical and Pharmaceutical Machinery, Ship Sets of Steering Gears Stabilisers, Steel Pipes and Tubes, etc.

 

 

Products :

Product Description

Item Code No. (ITC Code)

Hot Rolled Coils

72-08-31

Hot Dipped Galvanised Coils/Sheets

72-10-49

Turnkey Projects

--

 

·       Chemical Machinery

·       Pharmaceutical Machinery

·       Ship Sets of Steering Gears Stabilisers

·       Steel Pipes

·       Tubes

 

 

PRODUCTION STATUS (As on 31.03.2010)

 

Products

Unit

Installed Capacity

Actual Production

Fabrication of Chemicals, Pharmaceutical and other Machinery and Structurals

M.T.

13855

---

Steel Structurals

M.T.

7000

---

Ship sets of Steering Gears and Stabilisers each

Nos.

8

---

Steel Pipes and Tubes

M.T.

10000

---

Silos

M.T.

10000

---

Marine Loading Arms/Truck and Rail Loading Arms

Nos.

200

---

Power Plants

M.T

5

---

Hot Rolled Coils/Plates/Sheets

Nos.

600000

487880

Cold Rolled Coils/Sheets

M.T

350000

133491

GP Coils/Sheets & GC Sheets

M.T

250000

129973

 

Notes:-

·         Considering the nature of business of fabrication of Chemical, Pharmaceutical and Other Machinery and Structurals, Steel Pipes and Tubes, Marine Loading Arms production details are not available in M.T.

 

 

GENERAL INFORMATION

 

No. of Employees :

1439 Approximately

 

 

Bankers :
  • Central Bank of India
  • State Bank of India
  • State Bank of Hyderabad
  • The Federal Bank Limited
  • State Bank of Travancore
  • Punjab and Sindh Bank
  • Abu Dhabi Commercial Bank Limited
  • Bank of India
  • Oriental Bank of Commerce

 

 

Facilities :

SECURED LOANS

Rs in Millions

 31.03.2010

Rs in Millions

 31.03.2010

1. Long Term Loans

 

 

(a) From Banks :

 

 

Rupee Loan

1241.199

1597.134

(b) From Financial Institutions

 

 

Rupee Loan

6011.066

6527.960

(c) Interest Accrued and Due

175.038

263.560

 

 

 

2. (a) Debentures (Non Convertible)

 

 

150000 14% Privately Placed Secured Redeemable Non-Convertible Debentures of Rs.100/-each issued in the year 1989

--

1.840

200000 14% Privately Placed Secured Redeemable Non-Convertible Debentures of Rs.100/-each issued in the year 1990

--

4.000

500000 18.5% Privately Placed Secured Redeemable Non-Convertible Debentures of Rs.100/-each issued in the year 1993

--

20.000

2500000 18.5% Privately Placed Secured Redeemable Non-Convertible Debentures of Rs.100/-each issued in the year 1995

--

120.000

700000 19 % Privately Placed Secured Redeemable Non-Convertible Debentures of Rs.100/-each issued in the year 1998

--

70.000

400000 18% Privately Placed Secured Redeemable Non-Convertible Debentures of Rs.100/-each issued in the year 1998

--

--

5000000 17% Privately Placed Secured Redeemable Non-Convertible Debentures of Rs.100/-each issued in the year 1999

54.709

134.268

Add: Interest Accrued and Due

--

188.053

 

 

 

3. Working Capital from Banks

(Cash Credit / Workings Capital Demand Loan)

411.426

2692.695

Total

7893.438

11619.510

Notes:-

1. a. Long Term Loans referred to in 1(a) and 1(b) above, are secured by way of hypothecation of all the movables  except book debts, including movable machinery, machinery spares, tools and accessories, present and future, subject to prior charges created and/or to be created in favour of the Company's Bankers for Working Capital facilities.

 

(i) Long Term Loans referred to in 1 (a) and 1(b) above, to the extent of Rs.4886.643 millions,'are also secured by way of first mortgage and charge on Company's immovable properties, both present and future (excluding Staff Quarters at Wardha), ranking pari passu with other First Charge holders, subject to prior charge on specific equipments hypothecated to Banks for deferred credits and SBI Home Finance ' Limited for housing colony for the employees at Wardha and specified movables, both present and future, hypothecated to Banks for Working Capital.

 

(ii) Long Term Loans referred to in 1 (a) and 1(b) above, to the extent of Rs. 283.701 millions, are also secured by way of first mortgage and charge on Company's immovable properties situated at Wardha, both present and future (excluding Staff _Quarters at Wardha), ranking pari passu with other First Charge holders, subject to prior charge on specific equipments hypothecated to Banks for deferred credits and SBI Home Finance Limited for housing colonies for the employees at Wardha and specified  movables, both present and future, hypothecated  to Banks for Working Capital. .

 

c. Long Term Loans referred to in 1 (a) and 1(b) above, to the extent of Rs 1650.000 millions, are to be secured by way of first mortgage and charge on Company's immovable properties, both present and future (excluding Staff Quarters at Wardha), ranking pari passu with other First Charge holders, subject to prior charge on specific equipments hypothecated to Banks for 'deferred credits and SBI Home Finance Limited for housing colonies for the employees at Wardha and specified movables, both present and future, hypothecated to Banks for Working Capital.

 

d. The Term Loans of Rs. 35.397 millions from SBI Home Finance Limited are secured by exclusive mortgage of the housing colony situated at Wardha.

 

e. Long Term Loan referred' to in' l(b) above, to the extent of Rs.396.525 millions, cash credit facilities assigned' by a bank, is secured against hypothecation of Raw Materials, Work-in-process, Finished Goods, Stores and Spares, Book Debts etc., and by way of Second Charge on company's immovable properties, and also guaranteed by some of the directors of the Company.

2. a. Non-Convertible Debentures/ Bonds referred to in 2 above-are secured / to be secured by way of first mortgage and charge on Company's immovable properties, both present and future (excluding Staff Quarters at Wardha), ranking pari passu with other First Charge holders, subject to prior charge on specific equipments hypothecated to Banks for deferred credits and SBI Home Finance Limited for housing colonies for the employees at' Wardha and specified movables both present and future, hypothecated to/Banks for Working Capital.

 

b. The Debentures referred in 2 (iv) above are redeemable in 24 ballooning installments from 31.07.2008 to 30.06.2010.

 

3. Cash credit from Bank is secured against hypothecation of raw materials, work-in-progress, finished goods, stores and spares, book debts etc, and by way of second charge on company’s immovable properties and also guaranteed by some of the directors of the company.

 

4. The loan mentioned in 1 above includes non interest bearing loans of Rs. 3259.940 millions as per the loan restructuring terms.

 

UNSECURED LOANS

Rs in Millions

31.03.2010

Rs in Millions

31.03.2010

(a) From Financial Institutions

 

 

Capital Subsidy Loan (SICOM)

1.904

1.904

Sales Tax Deferral Loan (SICOM)

33.327

38.302

Total

35.231

40.206

 

Notes:

Amount repayable within one year Rs. 5.302 millions (Previous year Rs. 4.974 millions)

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Todarwal and Todarwal

Chartered Accountants

 

 

Memberships :

Confederation of Indian Industry

 

 

Associates :

·       Lloyds Finance Limited

·       Lloyds Metals and Engineers Limited

·       Lloyds International Limited

·       Mamesmann DEMAG United Engineers, USA

 

 

Subsidiaries :

·       Aristo Realty Developers

(Formerly Lloyds Realty Limited)

 

 

Parent Company :

Lloyds Group

 

 

CAPITAL STRUCTURE

 

As on 31.03.2010

 

Authorised Capital :

No. of Shares

Type

Value

Amount

500000000

Equity Shares

Rs.10/- each

Rs.5000.000 Millions

250000000

Preference Shares

Rs.10/- each

Rs.2500.000 Millions

 

Total

 

Rs.7500.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

225106371

Equity Shares

Rs.10/- each

Rs. 2251.064 Millions

 

Less: Calls-in-Arrears

 

Rs. 11.341 Millions

446321

Add: Forfeited Shares

(Amount Originally Received)

 

Rs.1.893 Millions

236275420
Redeemable Preference Shares

Rs.10/- each

Rs.2362.754 Millions

 
Total

 

Rs. 4604.370 Millions

 

NoteS:

·         The Redeemable Preference Shares will be redeemed with a premium of 11.50% in 6 (Six) Annual Installments commencing from Financial Year 2016.

·         During the year, the Company has issued 20000000 Equity Shares of Rs.10/- each to a Financial Institution.

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2010

31.03.2009

31.03.2008

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

4604.370

4474.222

4274.216

2] Subscription for Share Warrants

421.250

0.000

0.000

3] Reserves & Surplus

7161.033

5587.485

4259.138

4] (Accumulated Losses)

(15060.366)

(14279.557)

(12631.012)

NETWORTH

(2873.713)

(4217.850)

(4097.658)

LOAN FUNDS

 

 

 

1] Secured Loans

7893.438

11619.510

12559.864

2] Unsecured Loans

35.231

40.206

166.853

TOTAL BORROWING

7928.669

11659.716

12726.717

DEFERRED TAX LIABILITIES

0.000

0.000

0000

 

 

 

 

TOTAL

5054.956

7441.866

8629.059

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

8161.419

9301.790

10088.308

Capital work-in-progress

2250.099

480.474

331.816

 

 

 

 

INVESTMENT

25.026

25.026

25.026

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
2029.076
1927.703

1878.929

 

Sundry Debtors
2018.621
1246.423

1244.073

 

Cash & Bank Balances
304.875
363.897

278.889

 

Other Current Assets
0.000
0.000

0.000

 

Loans & Advances
3894.595
4865.517

1898.611

Total Current Assets
8247.167
8403.540

5300.502

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
7688.921
6917.249

0.000

 

Other Current Liabilities
5798.442
3724.237

7116.593

 

Provisions
141.392
127.478

0.000

Total Current Liabilities
13628.755
10768.964

7116.593

Net Current Assets
(5381.588)
(2365.424)

(1816.091)

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

5054.956

7441.866

8629.059

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2010

31.03.2009

31.03.2008

 

SALES

 

 

 

 

 

Income

28987.206

26055.138

22046.474

 

 

Other Income

44.709

63.685

411.027

 

 

TOTAL                                     (A)

29031.915

26118.823

22457.501

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Cost of Materials

23997.361

23167.939

18401.088

 

 

Manufacturing and Asset Maintenance

2551.028

2276.291

2272.095

 

 

Personnel

397.655

409.228

367.261

 

 

Selling and Distribution Expenses

849.923

790.541

656.521

 

 

Administrative and other Expenses

173.807

350.550

98.493

 

 

Preliminary/ Issue/ Deferred Expenses Written Off

0.000

0.000

42.142

 

 

TOTAL                                     (B)

27969.774

26994.549

21837.600

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

1062.141

(875.726)

619.901

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

489.703

509.965

273.951

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

572.438

(1385.691)

345.950

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

1166.820

1157.927

1136.226

 

 

 

 

 

 

PROFIT BEFORE EXCEPTIONAL ITEM AND TAX                                                                           (G)

(594.382)

(2543.618)

(790.276)

 

 

 

 

 

Add

EXCEPTIONAL ITMES (NET)                             (I)

(180.786)

896.614

308.487

 

 

 

 

 

 

PROFIT BEFORE TAX (G-I)                               (J)

(775.168)

(1647.004)

(481.789)

 

 

 

 

 

Less/

Add

FRINGE BENEFIT TAX

--

4.209

3.538

 

 

 

 

 

 

PROFIT AFTER TAX

(775.168)

(1651.213)

(485.327)

 

 

 

 

 

Add

PRIOR PERIOD INCOME / EXPENSES (NET)

(5.641)

2.668

 

 

 

 

 

 

PROFIT / LOSS FOR THE YEAR

(780.809)

(1648.545)

NA

 

 

 

 

 

Add

PROFIT / LOSS BROUGHT FORWARD FROM PREVIOUS YEAR

(14279.557)

(12631.012)

 

 

 

 

 

 

 

Earnings Per Share (Rs.)

(3.65)

(8.33)

(2.44)

 

QUARTERLY RESULTS

 

PARTICULARS

30.06.2010

1st Quarter

30.09.2010

2nd Quarter

31.12.2010

3rd Quarter

31.03.2011 4th Quarter

30.06.2011

5th Quarter

Net Sales

5817.690

6314.960

8300.820

9117.870

9274.720

Total Expenditure

6268.360

6287.090

7758.650

8248.550

9623.630

PBIDT (Excl OI)

(450.670)

27.870

542.170

869.320

(348.910)

Other Income

25.530

34.360

52.710

120.600

107.690

Operating Profit

(425.140)

62.230

594.880

989.920

(241.220)

Interest

60.720

88.440

81.700

409.710

212.350

Exceptional Items

0.000

0.000

9.810

13.880

0.000

PBDT

(485.850)

(26.210)

522.990

594.090

(453.580)

Depreciation

291.710

291.710

291.720

320.960

353.210

Profit Before Tax

(777.560)

(317.920)

231.270

273.140

(806.790)

Tax

0.000

0.000

0.000

0.000

0.000

Provisions and contingencies

0.000

0.000

0.000

0.000

0.000

Profit After Tax

(777.560)

(317.920)

231.270

273.140

(806.790)

Extraordinary Items

0.000

1.700

0.000

(0.470)

(0.070)

Prior Period Expenses

0.000

0.000

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

0.000

0.000

Net Profit

(777.560)

(316.220)

231.270

272.660

(806.860)

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2010

31.03.2009

31.03.2008

PAT / Total Income

(%)
(2.67)

(6.32)

(2.16)

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
(2.67)

(6.32)

(2.18)

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
(4.72)

(14.07)

(3.13)

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.27

0.39

0.12

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
(7.50)

(5.32)

(4.84)

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
0.61

0.78

0.74

 

 

LOCAL AGENCY FURTHER INFORMATION

 

CHANGE OF ADDRESS :

 

Registered office of the company has been shifted from Modern Centre, “B” Wing, 2nd Floor, Sane Guruji Marg, Mahalaxmi, Mumbai – 400 011, Maharashtra, India to the present address w.e.f. 01.01.2011

 

 

HISTORY:

The company was incorporated in the name and style of Gupta Tubes and Pipes Private Limited on 27th April, 1970. The name of the company was changed to Lloyds Steel Industries Private Limited on 10th September, 1985. The company’s status was changed to that of Public Limited Company with effect from 3rd June, 1986. Its Company Registration Number is 14621.

 

The company’s registered office was shifted from “Lloyds House, 954, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, Maharashtra” to the above address.

 

The company was promoted by Mr. R. N. Gupta and is the flagship of the Lloyds group. Its’ engineering division manufactures a wide range of capital equipments and executes turnkey projects. Its steel division, commissioned in 1994, at Wardha, Maharashtra, manufactures wide strip hot-rolled coils. Hot-rolled coils are cold-rolled and converted to GP/CG sheets (installed capacity: 400000 tpa). The company has a worldwide collaboration to obtain technology on a long-term basis with Vosper Thornycroft, U.K., CE Natco International, Singapore, FMC, Europe, SA, France, Mechron Energy, Canada, LGE, U.K. and United Engineering, U.S.A. Lloyds Realty is a wholly-owned subsidiary of the company.

 

The company came out with an issue of convertible debentures in February, 1994 to part-finance facilities to manufacture 0.4 million tpa of hot-rolled steel strips. Commercial production commenced in 1994. The forward integration project undertaken by the company to manufacture CR coils and CP/GC sheets/coil has been implemented. Of the several turnkey projects executed successfully are some of the world’s largest – a fully automatic LPG loading station at Hazira for the Oil and Natural Gas Commission (ONGC), a space simulator for Indian Space Research Organisation (ISRO), steering, Gear and Stabilisers for the Indian Navy, Storage facilities for Reliance Industries, Horton spheres for the PVC projects of Finolex Industries and Reliance Industries.

 

During March, 1996, it came out with an offer of Rs.75.141 millions equity shares of Rs. 10/- each a premium of Rs.18/- aggregating Rs.2100 millions with detachable warrants in the ratio of 1 warrant for every 10 equity shares to the existing shareholders of the company on Right basis in the ratio of 64 shares for every 100 shares held, to part finance the project to manufacture 225000 tpa Cold Rolled Close Annealed (CRCA) and 125000 tpa Galvanised Plain (GP) / Galvanised Corrugated (GC) sheets at Wardha, Maharashtra.

 

During the year 1997-98, the Wardha plant was accorded ISO 9002 certificate by SGS Yarsley ICS Limited, U.K. During 1998-99, the company in consultation with financial institution transferred the 80 MW captive power project to a separate company viz. Vidarbha Power Limited and hence forth this project will be implemented by the said company.

 

The Cold Rolling Mill – II, (CRM-II) and plate finishing mill which was undergoing trial runs, commenced commercial production from September, 2001.

 

OPERATIONS and OVERALL PERFORMANCE

 

The domestic steel industry has registered a consumption growth of about  8 % during the year 2009-10 with consumption figures reaching to 56.3 million tones from 52.3 million tonnes in the previous year. This was partly due to various  measures initiated by the government. With production of about  60 million  tonnes of crude steel during the year 2009-2010, India emerged  as the third largest steel producer in the world. The Industry is expected  to achieve  a substantial increase in crude steel production capacity  by  the year  2012.  The steel prices started to show an increase from  the  second quarter  of  the year as the major steel companies raised their  prices  on back  of steep rise in input costs. The increase in demand  and  increasing steel  prices  backed

 

by robust demand from automobile  and  infrastructure sector helped the steel industry to record a good growth. The global  steel industry  is  expected  to  recover  in 2010  on  the  back  of  government stimulation packages, the continued stabilisation of financial systems  and a return of consumer confidence.

 

The Company achieved a Turnover of Rs. 30527.800 millions as against Rs.28415.600 millions  in  the previous year, showing an increase of 7.4010.  The  Company incurred a Loss, before exceptional items, of 594.300 millions during the  year as  compared with previous year loss of Rs. 2543.600 millions  after  providing depreciation of 1166.800 millions (Previous year Rs. 1157.900 millions).

 

The company is in the process of modernising and modifying its steel  plant at  Wardha  by  installing some new equipments,  modification  of  existing equipments   and  up-gradation  of  utility  system  and  other   auxiliary

facilities.  The above modernization and debottlenecking would  enable  the plant  to  make  optimum  use  of  its  capacities  of  various  stages  of production.

 

Debt Restructuring

 

Restructuring proposals of debts with the Financial Institutions and  Banks are  under  various  stages of discussion with the  lenders.  In  spite  of Company facing a very difficult situation, the Company has paid off  1002.300 millions during the year towords past Debt liabilities in accordance with the restructuring terms.

 

Steel Products

 

Sale of steel products during the year  has been 18253.600 millions as  against the previous year figure of Rs. 20092.000 millions. Owing  to  poor demand  from  global customers the exports has almost dried up  during  the year  at  21.300  Millions  as against Rs.1589.300  Millions  recorded  during  the previous year.

 

Engineering Products

 

During the year the sales of engineering products were  3791.400 millions  as  compared to the previous year of Rs. 2715.100 millions  showing  an increase  of  Rs. 1076.300 millions. The Company during the year  has  supplied critical items for projects G.R.S.E. and equipments for Uttam Galva  Steels Limited,  Uttam  Galva  Metallics  Limited and  Balkrishna  Industries  Limited  The division  has completed its project of supply and commissioning  of  Marine Loading  Arms to Essar Construction Limited The Division continues to  support in supply of Spares and Services to all the major Oil, Gas, Port Trust  and various  Government  bodies. The Company has been successful  in  obtaining further  orders  from  Indian Oil Corporation Ltd,  Brahmaputra  Cracker  and Polymer   Limited,  National  Aluminium  Company  Limited,  Mangalore   Chemicals   and Fertilizers  Limited, and Indian Oil Corporation Limited, Welspun Maxsteel  Limited  and Uttam Galva Metallics amongst others for their Projects.

 

PREFERENTIAL ISSUE

 

During the year, in terms of restructuring of the debts with a financial  institution, the company has allotted 1,30,00,000 Equity  shares of  Rs.10/-  each at par on preferential basis to a  financial  institution against  part conversion of it's existing loan after obtaining approval  of the  members  in the Extra Ordinary General Meeting held on  25.01.2010.  The Company has received listing approval from both BSE and  NSE  in respect of the aforesaid shares.

 

During   the  year,  In  order  to  raise  resources   for   modernization/ debottlenecking  and  working  capital requirements the  Company  has  also allotted  16,85,00,000  Warrants of Rs. 10/- each convertible  into  Equity Shares  of  Rs.  10/-  each on preferential basis  to  the  promoters.  The Warrants  are convertible at the option of the holder at any time within  a period of 18 months from the date of allotment

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

The  core business of the Company is manufacturing and marketing  Iron  and Steel  products and manufacturing capital equipments and turnkey  projects. The Management discussions and analysis is given hereunder:

 

Industry structure and development:

 

The  steel  Industry  in India has successfully come  out  of  the  adverse effects  of the global economic slowdown and registered a  positive  growth during  the previous year. The National Steel Policy has fixed a target  of taking  steel  production up to 110 MT by 2019-20.  Nonetheless,  with  the current rate of ongoing green-field and brown-field projects, the  Ministry of  Steel has projected India's steel capacity to touch 124.06 MT by  2011-

12.  The  Engineering  Products of the Company has been  approved  for  its engineering  skills/works/services by various premier consulting  companies and  Inspection  Agencies such as Engineers India Ltd, MECON,  LRIS,  BVIS, amongst  various other agencies. The Division has further been approved  by Industrial  Boiler Regulatory Authority (IBR). The Engineering  segment  is highly  competitive  in view of tough competition from  foreign  companies/ agencies  and giant public/private sector undertakings. The development  of engineering  industry  depends on the development of core sectors  and  the infrastructure sector.

 

Opportunities and threats:

 

The  Indian  steel Industry witnessed an upward trend during  the  previous year.   it   has  huge  scopes  in  the  future  with  massive   scale   of infrastructural  development happening all across the country. This  upward trend is expected to be continued on account of favourable conditions  like competitive  prices,  increase in consumption of steel  owing  to  upcoming infrastructure  and  Greenfield  projects,  highly  skilled  and  low  cost workforce etc. The major threats for the industry is higher cost of  inputs and  lower  realizations which may put pressure on  the  profitability  and operating margins of the international as well as domestic steel companies.

In  addition  to  this,  major  obstacles  are  current  economic  turmoil, technological  change, inadequate availability of suitable quality  of  raw material, increasing prices of raw materials, high cost of energy / capital etc.

 

Outlook:

 

The  outlook for the industry looks reasonable, since India has  good  iron ore  deposits,  skilled manpower and growing demand for steel.  The  Indian steel  industry has made a rapid progress on strong fundamentals  over  the recent  few  years.  The  industry is  getting  all  essential  ingredients required for dynamic growth. The government is backing the industry through favorable  industrial  reforms, while the private sector is  supporting  it with  investments  worth  billions of Rupees. Even in the  tough  times  of economic  slowdown, the industry succeeded to sustain its  positive  growth momentum  on the strong fundamentals of domestic demand from  construction, automobile and infrastructure sectors With an impressive track record,  the country has become a reputed name in the world steel industry. Global steel giants from all over. the world have shown interest in the industry because of  its  phenomenal  performance.  The Company  continues  to  compete  and participate in the tenders of various Public and Private Sector giants  and is hopeful of bagging considerable fresh orders for engineering products.

 

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30.06.2011

Rs. In Millions

 

Particulars

30.06.2011

(Unaudited)

Income

 

a) Net Sales / Income from Operations

9274.717

 

 

Expenditure

 

(a) (Increase)/decrease in Stock in Trade

(12.633)

(b) Consumption of Raw Materials

5550.061

(c) Purchase of traded goods

3123.868

(d) Employees Cost

148.802

(e) Electricity and Water Charges

460.200

(f) Depreciation

353.208

(g) Other Expenditure

353.336

Total Expenditure

9976.842

Profit / (Loss) From Operations before Interest & Exceptional Items

(702.125)

Other Income

107.692

Profit/(Loss) before Interest and Exceptional items

(694.433)

Interest

212.354

Profit / (Loss) after interest before Exceptional items

(806.787)

Exceptional Items

--

Profit / (Loss) From Ordinary activities before Tax

(806.787)

Provision for Taxation

--

Net Profit/(Loss) From Ordinary activities after Tax

(806.787)

Extraordinary Items

(0.074)

Net Profit/(Loss) for the period

(808.861)

Paid Up Equity Share Capital ( Face Value of the share Rs.10/- each )

3926.616

Reserves (Excluding Revaluation Reserves)

--

Earning Per Share

 

Before Extraordinary Items

 

-Basic and Diluted

(2.09)

After Extraordinary Items

 

-Basic and Diluted

(2.01)

Public Share Holding

 

- Number of Shares

183168882

- Percentage of shareholding

48.81

Promoters and Promoter group share holding

 

a) Pledged / Encumbered

 

- Number of Shares

14490126

- Percentage of share (as a % of the total shareholding of promoter and promoter group)

6.96

- Percentage of shares(as a % of the total share capital of the company)

3.70

b) Non-encumbered

 

- Number of Shares

193879133

- Percentage of Share (as a % of the total shareholding of promoter and promoter group)

83.04

 - Percentage of Share (as a % of the total share capital of the company)

48.49

 

 

FIXED ASSETS

 

  • Land
  • Building
  • Plant and Machinery
  • Computers
  • Electrical Installations
  • Office Equipment
  • Furniture and Fixtures
  • Motor Vehicles
  • Railway Siding

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.46.18

UK Pound

1

Rs.73.64

Euro

1

Rs.64.95

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

4

PAID-UP CAPITAL

1~10

3

OPERATING SCALE

1~10

2

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

2

--PROFITABILIRY

1~10

--

--LIQUIDITY

1~10

2

--LEVERAGE

1~10

2

--RESERVES

1~10

2

--CREDIT LINES

1~10

--

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

17

 

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

-

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.