MIRA
INFORM REPORT
|
Report Date : |
12.09.2011 |
IDENTIFICATION DETAILS
|
Name : |
PRISM CEMENT LIMITED (H AND R JOHNSON (INDIA) LIMITED AMALGAMATED WITH PRISM CEMENT LIMITED
) |
|
|
|
|
Registered
Office : |
305, Laxmi Nivas Apartments, Ameerpet, Hyderabad-500016, Andhra
Pradesh |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
26.03.1992 |
|
|
|
|
Com. Reg. No.: |
01-014033 |
|
|
|
|
Capital Investment
/ Paid-up Capital : |
Rs.5033.600
Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L26942AP1992PLC014033 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
MUMP04712B |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACP6224A |
|
|
|
|
Legal Form : |
Public Limited Liability Company. The company’s shares are listed on the
Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturers of Portland Cement. |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (50) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 48313200 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an established company having satisfactory track. The company
is doing well trade relations are reported as fair. Business is active.
Payments are reported to be regular and as per commitments. The company can be considered good for normal 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 – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office : |
305, Laxmi Nivas Apartments, Ameerpet, Hyderabad-500016, |
|
Tel. No.: |
91-40-23319208 / 23396082 |
|
Fax No.: |
91-40-23319135 / 26100179 |
|
E-Mail : |
|
|
Website : |
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|
|
|
|
Corporate Office : |
Rahejas, |
|
Tel. No.: |
91-22-66754142 |
|
Fax No.: |
91-22-26001304 |
|
|
|
|
Factory 1: |
Village Mankahari, Tehsil Rampur Baghelan, Satna-485111, |
|
Tel. No.: |
91-7672-275622/1/410260 |
|
Fax No.: |
91-7672-275303 |
|
|
|
|
Factory 2: |
17-24, Near |
|
Tel No.: |
91-40-23420818/0828 |
|
Fax No.: |
91-40-23420814 |
|
Email: |
|
|
Website: |
|
|
|
|
|
Marketing Office: |
Located At:
|
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. Rajesh G.
Kapadia |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Rajan B. Raheja |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Manoj Chhabra |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Vijay
Aggarwal |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Aziz H.
Parpia (upto May 5, 2010) |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Satish B.
Raheja |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Akshay R.
Raheja |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ganesh Kaskar |
|
Designation : |
Executive Director |
|
|
|
|
Name : |
Mr. James Arthur
Brooks |
|
Designation : |
Executive Director |
|
|
|
|
Name : |
Ms. Ameeta A.
Parpia |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Ms. Aneeta S. Kulkarni |
|
Designation : |
Company Secretary |
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 |
|
|
|
|
|
|
|
|
68,250,423 |
13.56 |
|
|
308,630,246 |
61.31 |
|
|
376,880,669 |
74.87 |
|
|
|
|
|
|
500 |
- |
|
|
500 |
- |
|
Total
shareholding of Promoter and Promoter Group (A) |
376,881,169 |
74.87 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
6,961,484 |
1.38 |
|
|
54,430 |
0.01 |
|
|
30,694,191 |
6.10 |
|
|
37,710,105 |
7.49 |
|
|
|
|
|
|
15,819,730 |
3.14 |
|
|
|
|
|
|
36,775,966 |
7.31 |
|
|
20,901,752 |
4.15 |
|
|
15,267,858 |
3.03 |
|
|
2,742,854 |
0.54 |
|
|
84,200 |
0.02 |
|
|
12,369,973 |
2.46 |
|
|
70,831 |
0.01 |
|
|
88,765,306 |
17.63 |
|
Total Public
shareholding (B) |
126,475,411 |
25.13 |
|
Total (A)+(B) |
503,356,580 |
100.00 |
|
(C) Shares held by
Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total
(A)+(B)+(C) |
503,356,580 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs. 0.100 millionBUSINESS DETAILS
|
Line of Business : |
Manufacturers of Portland Cement. |
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Products : |
|
PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Unit |
Installed
Capacity Per
Annum |
Actual
Production |
|
Cement |
Tonnes |
5600000 |
3156312 |
|
Ceramic Tiles |
Tonnes |
332720 |
224477 |
|
Ready-Mixed Concrete |
Cubic Meter |
6041250 |
2995751 |
Note:
·
Not applicable due to the abolition of Industrial Licenses
as per notification issued under the Industries (Development and Regulation)
Act, 1951.
·
As certified by Management and being a technical
matter, relied upon by the Auditors.
·
Out of the above production of cement, 4,028 tonnes
(Previous year : 43,770 tonnes) have been used for captive consumption
including 3,506 tonnes (Previous year : 43,653 tonnes) for capital jobs. Out of
above production of Readymixed Concrete, rejection/wastage/slurry is 6,953
cubic meter (Previous year : 6,765 cubic meter). Captive consumption of
Concrete is 2,961 cubic meter (Previous year : 2,050 cubic meter). Out of above
production of Ceramic tiles captive consumption is 37 Tonnes (Previous year :
Nil)
·
Cement sales include handling/transit loss and
samples 976.21 tonnes (Previous year : 100.39 tonnes).
GENERAL INFORMATION
|
Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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|
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|
Statutory Auditors : |
|
|
Name : |
N.M. Raiji and Company Chartered Accountant |
|
Address : |
Mumbai, |
|
|
|
|
Branch Auditors : |
|
|
Name : |
N.I. Mehta and Company Chartered Accountant |
|
Address : |
Mumbai, |
|
|
|
|
Subsidiaries : |
·
Raheja QBE General Insurance Company Limited ·
RMC Readymix Porselano (India) Limited (Formerly
known as Porselano Tiles Limited) ·
H & R Johnson (India) TBK Limited ·
Lifestyle Investment Private Limited ·
Silica Ceramica Private Limited ·
Milano Bathroom Fitting Private Limited (Joint
Venture up to 26.06.2010 and thereafter subsidiary) |
|
|
|
|
Joint Ventures/ Associates: |
·
Ardex
Endura (India) Private Limited ·
Sentini
Ceramica Private Limited ·
Antique
Marbonite Private Limited
(Formerly known as Antique Granito Private Limited) ·
Spectrum
Johnson Tiles Private Limited
(Formerly known as Spectrum Tiles Private Limited) ·
TBK
Samiyaz Tile Bath Kitchen Private Limited ·
TBK
Shriram Tile Bath Kitchen Private Limited ·
TBK
Deziner’s Home Private Limited ·
TBK
Unique Jalgaon Tile Bath Kitchen Private Limited ·
TBK PB
Shah Tile Bath Kitchen Private Limited ·
TBK
Deepgiri Tile Bath Kitchen Private Limited ·
TBK
Pratap Tile Bath Kitchen Private Limited ·
TBK
Rangoli Tile Bath Kitchen Private Limited ·
TBK
Bansal Ceramics Private Limited ·
TBK
Venkataramiah Tile Bath ·
Kitchen
Private
Limited ·
TBK
Rathi Sales Agencies Private Limited ·
Prism
Power and Infrastructure Private Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
505000000 |
Equity Shares |
Rs.10/- each |
Rs.5050.000 Millions |
|
20000000 |
Preference Shares |
Rs.10/- each |
Rs.200.000 Millions |
|
|
Total |
|
Rs.5250.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
503356580 |
Equity Shares |
Rs.10/- each |
Rs.5033.600
Millions |
Note:
- Out of the shares issued pursuant to the scheme of the amalgamation, 1,23,51,600 shares are held in Trust for the benefit of the Company.
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 |
5033.600 |
5033.600 |
2982.500 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
7044.700 |
6661.400 |
3634.000 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
12078.300 |
11695.000 |
6616.500 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
9254.700 |
7432.000 |
0.000 |
|
|
2] Unsecured Loans |
2443.700 |
583.700 |
0.000 |
|
|
TOTAL BORROWING |
11698.400 |
8015.700 |
0.000 |
|
|
DEFERRED TAX LIABILITIES |
1321.100 |
975.900 |
527.700 |
|
|
|
|
|
|
|
|
TOTAL |
25097.800 |
20686.600 |
7144.200 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
18867.800 |
9911.300 |
3927.000 |
|
|
Capital work-in-progress |
574.400 |
6212.300 |
1091.600 |
|
|
|
|
|
|
|
|
INVESTMENT |
3543.100 |
3266.700 |
2038.100 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3712.900
|
2742.400
|
769.000 |
|
|
Sundry Debtors |
2646.200
|
2110.800
|
0.000 |
|
|
Cash & Bank Balances |
600.000
|
525.000
|
258.700 |
|
|
Other Current Assets |
0.000
|
0.000
|
0.000 |
|
|
Loans & Advances |
2757.000
|
1457.100
|
658.900 |
|
Total
Current Assets |
9716.100
|
6835.300
|
1686.600 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
4440.900
|
2936.000
|
351.100 |
|
|
Other Current Liabilities |
2605.800
|
2116.400
|
747.100 |
|
|
Provisions |
556.900
|
486.600
|
500.900 |
|
Total
Current Liabilities |
7603.600
|
5539.000
|
1599.100 |
|
|
Net Current Assets |
2112.500
|
1296.300
|
87.500 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
25097.800 |
20686.600 |
7144.200 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
33552.400 |
28379.800 |
6473.500 |
|
|
|
Income From Joint Ventures-Dividend |
83.800 |
86.000 |
0.000 |
|
|
|
Other Income |
281.000 |
134.500 |
96.900 |
|
|
|
TOTAL (A) |
33917.200 |
28600.300 |
6570.400 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Manufacturing and Operating Expenses |
21920.700 |
16869.900 |
3275.700 |
|
|
|
Personnel Expenses |
1728.000 |
1348.800 |
260.400 |
|
|
|
Sales, Administration and Other Expenses |
6781.200 |
5186.700 |
1236.000 |
|
|
|
Exceptional Items |
9.600 |
188.700 |
0.000 |
|
|
|
TOTAL (B) |
30439.500 |
23594.100 |
4772.100 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
3477.700 |
5006.200 |
1798.300 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
1057.300 |
525.200 |
35.400 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
2420.400 |
4481.000 |
1762.900 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
1133.800 |
898.500 |
243.100 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1306.600 |
3582.500 |
1519.800 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
348.700 |
1072.000 |
557.500 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
957.900 |
2510.500 |
962.300 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
4997.200 |
3584.000 |
3195.200 |
|
|
|
DIVIDEND
ON OWN SHARES HELD THROUGH TRUST |
12.400 |
18.500 |
0.000 |
|
|
|
SURPLUS
ON AMALGAMATION |
-- |
484.900 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
TRANSITIONAL
ADJUSTMENT FOR AS-15 |
-- |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
-- |
260.000 |
50.000 |
|
|
|
Transfer to Capital Redemption Reserves |
-- |
107.500 |
0.000 |
|
|
|
Transfer to Debenture Redemption Reserves |
62.500 |
|
|
|
|
|
Preferences Dividend |
0.000 |
0.800 |
0.000 |
|
|
|
Tax on Dividend |
83.600 |
179.100 |
76.000 |
|
|
|
Tax on Proposed Dividend |
0.000 |
0.000 |
149.200 |
|
|
|
Interim Dividend |
503.400 |
1053.300 |
298.300 |
|
|
|
Tax on Interim Dividend |
0.000 |
0.000 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
5318.000 |
4997.200 |
3584.000 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Export |
NA |
160.800 |
38.600 |
|
|
|
Sales of Carbon Credits |
NA |
11.400 |
0.000 |
|
|
|
Interest Income |
NA |
6.300 |
0.000 |
|
|
TOTAL EARNINGS |
NA |
178.500 |
38.600 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Spares |
NA |
271.300 |
183.200 |
|
|
|
Raw Materials |
NA |
122.800 |
0.000 |
|
|
|
Capital Goods |
NA |
1308.400 |
0.000 |
|
|
|
Traded Goods |
NA |
80.400 |
0.000 |
|
|
TOTAL IMPORTS |
NA |
1782.900 |
183.200 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
1.95 |
5.11 |
3.23 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
|
|
1st
Quarter |
|
Net Sales |
9891.200 |
|
Total Expenditure |
9309.700 |
|
PBIDT (Excl OI) |
581.500 |
|
Other Income |
0.400 |
|
Operating Profit |
581.900 |
|
Interest |
371.500 |
|
Exceptional Items |
0.000 |
|
PBDT |
210.400 |
|
Depreciation |
353.900 |
|
Profit Before Tax |
(143.500) |
|
Tax |
(43.800) |
|
Provisions and contingencies |
0.000 |
|
Profit After Tax |
(99.700) |
|
Extraordinary Items |
0.000 |
|
Prior Period Expenses |
0.000 |
|
Other Adjustments |
0.000 |
|
Net Profit |
(99.700) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
2.82
|
8.77
|
14.65 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
3.89
|
12.62
|
23.47 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
4.57
|
21.39
|
27.07 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.10
|
0.31
|
0.23 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.70
|
1.16
|
0.24 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.27
|
1.23
|
1.05 |
LOCAL AGENCY FURTHER INFORMATION
OPERATING RESULTS
The Scheme of Amalgamation ("the Scheme") of H. and R. Johnson (India) Limited and RMC Ready-mix
(India) Private Limited (Transferor Companies) with the Company was sanctioned
by the Hon'ble High Courts of Judicature at Bombay and Andhra Pradesh on
January 22, 2010 and February
4, 2010, respectively. The Scheme became effective on March 3, 2010 and is
operative from April 1, 2009, the appointed date fixed in the sanctioned
Scheme. Pursuant to the Orders, the entire undertaking and business of the
Transferor Companies, as going concerns, stood transferred and became vested
with the Company. Previous period figures are for nine months, while the
current year figures include operations of the Transferor Companies consequent
to the amalgamation. The current year figures are, therefore, not comparable
with previous period.
OPERATIONS
The gross sales
and other income for the year ended March 31, 2011 was Rs. 35934.2 millions as
against Rs. 30101.4 millions for the
previous year. The Company earned a profit before tax of Rs. 1306.6 millions
and net profit of Rs. 957.9 millions during the year ended March 31, 2011 as
against profit before tax of Rs. 3582.5 millions and net profit of Rs. 2510.5
millions during the year ended March 31, 2010.
FINANCE
During the year
under review, the Company privately placed Secured Redeemable Non-convertible
Debentures of Rs. 1000 millions and Unsecured Redeemable Non-convertible
Debentures of Rs. 500 millions to fund
its ongoing capital expenditure. The Non-convertible Debentures (NCDs) are
listed on The Bombay Stock Exchange Limited. The Company has repaid loans of
Rs. 2590.4 millions during the year and
tied up term loans of Rs. 6238.9 millions
(inclusive of NCDs of Rs. 1500 millions ) to finance its long term
working capital/capital expenditure during the year. The total borrowings of
the Company stood at Rs. 11698.4 millions
as on March 31, 2011. The loans were used for the purpose that they were
sanctioned for by the respective banks/financial institutions.
MANAGEMENT
DISCUSSION & ANALYSIS
Business
Environment
India’s economy continued
to enjoy a remarkable growth trajectory driven by strong domestic demand during
2010-11. The economy recorded a healthy
growth in 2010-11 propelled by increased agricultural production
resulting into increased rural incomes and the industrial production is
expected to clock around 8% growth. The Gross Domestic Product (GDP) in India
has been growing at an annual rate of 8-9% during the past few years. The
construction and building materials sector usually follows the growth in the
country’s GDP, with the main drivers of demand being real estate and
infrastructure projects. The building materials sector, being a key constituent
of the country’s construction industry, has also recorded considerable growth
of ~9% over the last few years. With the economy well on track, the Government
has rolled out various initiatives to boost the country’s construction and
infrastructure capacity which will result in increase in demand for building
materials. India’s economic performance and rapid increase in per capita income
signal excellent growth prospects for the building materials sector. The
emergence of new segments in the economy like hospitality, retail, education
and IT has boosted the construction of malls, high rise buildings, industrial
parks and SEZs. With the growth in the construction sector, construction
methods have become more organised with introduction of newer technologies and
machinery and many new building materials have been introduced in the market
targeting interior and exterior applications. As one of the leading building
materials company with a wide range of products from cement, ready-mixed
concrete, tiles, bath products to kitchens, the Company is also on a path of
growth and innovation to cater to the market needs. With this backdrop, the
Company achieved a turnover of Rs.35570 millions for the year ended March 31, 2011 as against
turnover of Rs. 29890 millions in the
previous year. However, results for the year under review were impacted due to
substantial increase in manufacturing and finance expenses. For the year ended
March 31, 2011, the Company earned a net profit of Rs. 960 millions as against a net profit of Rs. 2510
millions for the year ended March 31,
2010.
Cement Division
Overview
The cement
consumption registered a muted growth of about 5% during 2010-11 mainly due to
an extended monsoon and delay in the implementation of the infrastructure
projects. However, the demand in the markets of Cement Division’s interest
witnessed a growth of around 10% during the same period. The Indian cement
industry is on a growth path basically on account of the GDP growth which has
resulted in a growing housing and real estate sector. Coupled with the
increasing activity in infrastructure development such as state and national
highways, the cement demand is expected to grow at an annual rate of 9-10% in
the current year.
Performance:
|
|
Year ended 31.03.2011 |
Year ended 31.03.2010 |
|
|
|
|
|
Production -
Millions Tonnes |
3.156 |
2.568 |
|
Sales volume
(cement) Millions Tonnes |
3.110 |
2.502 |
|
Net Revenue –
Rs. In Millions |
10618.3 |
10209.3 |
|
PBDIT – Rs. In
Millions |
1738.5 |
3556.2 |
The sharp increase
in raw material and power and fuel costs and the subdued price realisations impacted
the margins of the Cement Division substantially during the year ended March
31, 2011, despite a growth in volumes.
Expansions
During the year
under review, after a temporary suspension of work due to an accident in the
Blending Silo, the second cement plant adjoining the present plant location at
Satna with a cement capacity of 3.6 MTPA commenced commercial production. The
Cement Division expects to produce and sell 6 MTPA cement and clinker from both
Unit I and Unit II by 2012. The Cement Division at present sells cement in
eastern parts of Uttar Pradesh, major parts of Madhya Pradesh, Uttarakhand and
Bihar. With the commencement of production at Unit II, the Cement Division
plans to penetrate deeper into the existing markets and cover most parts of
Madhya Pradesh, Uttar Pradesh and Bihar and also enter into new markets of
Chhattisgarh, Jharkhand, West Bengal, Delhi NCR and Maharashtra. The Company
has plans to set up a cement plant in the Kurnool District of Andhra Pradesh
with a cement capacity of 4.8 MTPA. The Company is awaiting clearance for land
alienation from the State Government after which further proect activity will
commence. The Company has been allotted a Coal Block in the Chhindwara District
of Madhya Pradesh and has received the requisite approvals. It is planned to
acquire
land and start the
initial mines development activity in the current year.
Future Outlook
The cement demand
in the markets in which the Cement Division operates is expected to grow at a
CAGR of around 10-11% primarily driven by rural housing and infrastructure
projects. As a large section of the population in these regions is expected to
benefit from higher farm incomes, loan waiver schemes and alternative avenues
of income generation due to higher government spending through the National
Rural Employment Guarantee Scheme, rural housing is expected to contribute to
healthy growth in cement demand. The implementation of key infrastructure
projects like Pradhan Mantri Gram Sadak Yojna and rural infrastructure schemes
like Bharat Nirman and Indira Awas Yojna, introduction of tax free bonds,
creation of infrastructure debt funds, formulating a comprehensive policy for
developing public private partnership projects would also give a fillip to the
cement demand.
H & R Johnson
(India) (HRJ) Division
Overview
The H & R
Johnson (India) Division (HRJ Division) has been the market leader in the field
of ceramic tiles in India since 1958. Today, it offers a wide basket of products
from tiles, bath products to kitchens. It offers the products under 4 strong
brands, viz. Johnson, Marbonite, Endura,
and Johnson Ceramics International. The manufacturing plants of the Division,
its Joint Ventures and its subsidiaries are spread across the country in order
to effectively cater to the market’s requirements.
Tiles
The global ceramic
tiles industry is estimated to be 8.5 billion m2. During 2009, global
production fell marginally by 0.1% compared to an average annual increase of 6-7%
in the period 2004-2007 and a 3.2% increase in 2008. Global imports/exports of
ceramic tiles which have been slowing significantly since 2007 dropped by 9.6%
in 2009 down from 1.9 billion m2 to 1.7 billion m2. Asia continued to record a
healthy growth of over 7% during the year.
In terms of
consumption, India is the third largest consumer and manufacturer of ceramic
tiles in the world accounting for 5.8% of the world’s total consumption and
production of ceramic tiles. India produces close to 500 million m2 of ceramic
tiles per annum and the size of the Industry is approx. Rs. 140000 millions .
Approximately 40% of the industry comprises the organised sector wherein top 7
players constitute over 80% of the total organised market. Unorganised sector
is made up of a large number of small players adding up to 60% of the total
market. The key product categories of ceramic tiles in India are glazed wall
tiles, glazed floor tiles, vitrified polished tiles, glazed vitrified tiles and
industrial tiles. The per-capita consumption of ceramic tiles in India is
approx. 0.42 m2 per annum. As a comparison, China’s per-capita consumption is
2.27 m2 per annum; Brazil’s consumption is 3.17 m2 and Russia’s per-capita
consumption is 1.00 m2 per annum. This shows a huge potential for growth of
ceramic tiles in India. Urbanisation, consumption and commercial infrastructure
are the key drivers of growth in India. As a
result, India’s ceramic tile industry is expected to continue its growth
rate of approximately 15% per annum.
Bath Products
The size of bath
products industry is approx. Rs. 60000 millions
comprising sanitaryware, faucets, taps, bath fittings, etc. As in case
of tiles, there is a huge potential for growth in India due to growing demand for
modern sanitation and increased urbanisation. The organized sector comprises
approx. 50% of the market and focuses mainly on middle and upper market
segments in urban areas, whereas the remaining 50% is the unorganised sector
which is popular in lower-middle and price sensitive end of the market as well
as rural areas. Looking at the growth potential of this segment, various MNCs
are becoming active in India. The growth of bath products is at a healthy rate
of approx. 12-15% per annum and this growth rate is likely to continue in
future also.
Kitchen
Modular Kitchens
is a nascent industry in India. The trend of modular kitchens is catching up in
India. There is no large established player with a national footprint and a
strong brand and distribution network in this industry. As a result, there are
a number of small time players/carpenters operating in this industry with
limited scale of operations. The industry is growing at a healthy rate of
25-30% per annum. Looking at the growth potential of this segment, various MNCs
and Indian players are entering/have entered the market.
Review of
Operations
The sales revenue
of the HRJ Division for the year ended March 31, 2011 was Rs.14724.5
millions with a PBDIT of Rs.1659.7
millions as against sales revenue of
Rs.11876.3 millions and a PBDIT of Rs.
1758.0 millions for the previous year
ended March 31, 2010. The performance of India’s economy has been robust in
2010-11. Real GDP is estimated to have grown by 9% during the fiscal powered by
a rebound in the agricultural sector and a sharp pick-up in private consumption
and gross fixed capital formation. Manufacturing sector is expected to have
grown at 8% during the fiscal. Inflation, however, has been a cause of concern.
For 2010-11, it is estimated to have been around 9% as compared to 3.6% in the
previous fiscal. Crude oil prices have shot up by over 40% during the fiscal
thereby impacting profitability of various industries including ceramic tiles.
In case of tiles, fuel is a significant component of product costing, both
directly (high usage in manufacturing operations) and indirectly
(freight-intensive product). Fuel (Natural Gas/RLNG/Propane/LPG) cost, which is
primarily used for tile manufacturing, has increased significantly during the
year. Moreover, freight cost has increased substantially on raw materials and
finished goods on account of diesel cost increase. The HRJ Division continued
to strengthen its brands and build its distribution network. The HRJ Division
participated in ACETECH exhibitions at Mumbai and Chennai, India Ceramics
exhibition at Ahmedabad and Yatra Kitchens Exhibition at Bangalore to showcase
its products and received very positive response. A new updated website
www.hrjindia.com and 5 micro websites were launched for different product
categories. ‘House of Johnson’ retail outlets were inaugurated in Mumbai, Pune
and Bangalore during the year. Based on the strong brand equity and leadership,
‘Johnson’ brand was awarded the Reader’s Digest Trusted Brand Award 2010 (Gold)
in the category of Wall and Floor tiles. In addition, Marbonite brand was
conferred with the ‘Power Brand’ status during the year. Innovation being one
of its core values, the HRJ Division had launched some trend-setting products
last year — Marbonite StainFree, Endura ScratchFree and Johnson GermFree. These
products have been very well accepted by the market and they contribute
significantly to the total tiles sales. Moreover, Johnson Digital, which is
manufactured using state-of-the
art Inkjet
Printing System, was launched during the year and the response from the market
has been encouraging. The HRJ Division is also entering into the segment of
Quartz and Agglomerated Marble. During the year, the HRJ Division has started
setting-up of the team and initiated the process to establish these new product
categories. Ceramic World Review, a reputed magazine published from Italy,
conducted a study in 2010 of the world’s top ceramic tile manufacturers. H
& R Johnson (India) Division was listed at number 16 in the list of 25
companies being the only Indian entity to feature in the ranking. The HRJ
Division had set-up a branch office in
Colombo, Sri
Lanka, a few years back as part of its international business strategy. The
operations are now well established and profitable. The Bath segment of the HRJ
Division has continued to perform well during the year achieving high growth
rate. During the year, remaining 50% stake in Milano Bathroom Fittings Pvt.
Limited (MBF) was acquired. Post acquisition, MBF has become a wholly-owned
subsidiary of the Company and continues to be managed through the HRJ Division.
This acquisition has created a base for solid growth of the Bath Segment. MBF
has a manufacturing plant in Baddi, Himachal Pradesh. The Plant’s present
capacity is 0.300 million pieces per annum which is in the process of being
increased to 0.600 million pieces per annum by Q1 of 2011-12. The HRJ Division
has continued its initiatives of cost savings. During the year, LNG facility
was commissioned at Kunigal tile manufacturing plant and the turbine at Pen tile
manufacturing plant was upgraded. These initiatives would enable it to minimize
the impact of cost increases on account of fuel. The HRJ Division had declared
a lock-out on September 7, 2010 at its tile manufacturing plant at Karaikal,
Puducherry, pursuant to an illegal strike and physical assault of the plant
managers. On December 2, 2010, the manufacturing operations resumed and the
workers have resumed duties. The Union has assured to maintain discipline and
production. The wage settlement proceedings are in progress.
Future Outlook
With the healthy
growth of the Indian economy and the industries that operates in, the HRJ
Division is well-positioned to continue its growth in future also. Moreover,
the bulk of the products are targeted towards affordable housing segment which
is likely to continue growing at a healthy rate. The robust distribution
network, strong brand equity, wide-spread manufacturing locations and a
comprehensive product portfolio of tiles, baths and kitchens enable them to
enjoy a distinct competitive advantage over others in the market.
Expansions /
Upgrade
The HRJ Division
would be setting-up a tile manufacturing plant in Eastern India. It would be
the first tile manufacturing plant in that region. The HRJ Division shall be undertaking an
organization wide Business Process Re-engineering (BPR) exercise in 2011-12 to
review all the critical business processes and make necessary modifications,
wherever needed. The last such exercise was done in 2000-01 at the time of SAP
installation which was very beneficial. This BPR exercise is expected to make
the business processes more dynamic and relevant enabling it to work
effectively and efficiently. In 2011-12, the HRJ Division shall be increasing
the brand building activities in order to further strengthen its core brands.
Various mass media, merchandising and below the line activities would be
scaled-up during the year.
FIXED ASSETS:
- Software
- Goodwill
- Land
- Building
- Railway Siding
- Plant and Machinery
- Mines Development
- Furniture and Fixtures
- Office Equipments
- Vehicle
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.46.38 |
|
|
1 |
Rs.74.01 |
|
Euro |
1 |
Rs.64.48 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--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 |
|
50 |
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.