MIRA
INFORM REPORT
|
Report Date : |
06.04.2012 |
IDENTIFICATION DETAILS
|
Name : |
OCL INDIA LIMITED |
|
|
|
|
Registered
Office : |
AT/PO - Rajgangpur, Sundargarh – 770017, Orissa |
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|
Country : |
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|
|
Financials (as
on) : |
31.03.2011 |
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|
|
|
Date of
Incorporation : |
11.10.1949 |
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|
|
|
Com. Reg. No.: |
15-000185 |
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|
|
|
Capital
Investment / Paid-up Capital : |
Rs.113.800 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L26942OR1949PLC000185 |
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|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CALO00890B |
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|
|
|
PAN No.: [Permanent Account No.] |
AAACP1354J |
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|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Manufacturing and Selling of Refractories of Basic, Silica
and High Alumina Quality, Mag Carbox, Castable, Precast and CC Refractories, |
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|
|
|
No. of Employees
: |
1513 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (59) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 35400000 |
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|
|
|
Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an old and a well established company having fine track.
Financial position of the company appears to be sound. Directors are reported
to be experienced and respectable businessmen. 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 – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office/ Cement and Refractory Works : |
AT/PO - Rajgangpur, Sundargarh District – 770 017, Orissa, India |
|
Tel. No.: |
91-661-24221212/ 24220121 (4 Lines) |
|
Fax No.: |
91-661-24220133/ 24220933 |
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E-Mail : |
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Website : |
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Kapilas Cement Factory : |
Cuttack-753 004 (Odisha) |
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Delhi Office : |
17th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi –
110001, India |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. Pradip Kumar Khaitan |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Gaurav Dalmia |
|
Designation : |
Managing Director |
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|
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|
Name : |
Mr. D. N. Davar |
|
Designation : |
Director |
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|
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|
Name : |
Dr. S. R. Jain |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Ramesh C. Vaish |
|
Designation : |
Director |
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|
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|
Name : |
Mr. Puneet Yadu Dalmia |
|
Designation : |
Director |
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|
|
|
Name : |
Mr. D. D. Atal |
|
Designation : |
Whole Time Director and Chief Executive Officer |
KEY EXECUTIVES
|
Name : |
Mr. M. H. Dalmia |
|
Designation : |
President |
|
|
|
|
Name : |
Mr. R. H. Dalmia |
|
Designation : |
President |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2011
|
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
168,874 |
0.30 |
|
|
25,814,904 |
45.37 |
|
|
11,672,894 |
20.51 |
|
|
11,672,894 |
20.51 |
|
|
37,656,672 |
66.18 |
|
|
|
|
|
|
2,354,310 |
4.14 |
|
|
2,354,310 |
4.14 |
|
Total
shareholding of Promoter and Promoter Group (A) |
40,010,982 |
70.32 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
18,000 |
0.03 |
|
|
62,500 |
0.11 |
|
|
454,079 |
0.80 |
|
|
534,579 |
0.94 |
|
|
|
|
|
|
7,778,076 |
13.67 |
|
|
|
|
|
|
6,778,861 |
11.91 |
|
|
1,530,653 |
2.69 |
|
|
267,069 |
0.47 |
|
|
207,116 |
0.36 |
|
|
18,080 |
0.03 |
|
|
41,373 |
0.07 |
|
|
500 |
- |
|
|
16,354,659 |
28.74 |
|
Total Public
shareholding (B) |
16,889,238 |
29.68 |
|
Total (A)+(B) |
56,900,220 |
100.00 |
|
(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total
(A)+(B)+(C) |
56,900,220 |
- |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Selling of Refractories of Basic, Silica and High Alumina Quality, Mag Carbox, Castable, Precast and CC Refractories, Portland and Slag Cement and also engaged in Furnace Refractory Maintenance. |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Cement |
Tonnes |
N A |
53.50 |
34.08 |
|
Refractories |
Tonnes |
N A |
1.06 |
0.77 |
GENERAL INFORMATION
|
No. of Employees : |
1513 (Approximately) |
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Bankers : |
·
United Bank of India ·
State Bank of India ·
Punjab National Bank ·
UCO Bank ·
AXIS Bank Limited ·
Export-Import Bank of India |
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Facilities : |
Notes
: 1)
Term loans are secured by way of first pari passu charge on fixed assets
(present and future) of Cement Division of the Company. In some cases, term
loans are further secured by way of second pari passu charge over current
assets of the Company. 2)
Working capital facilities (fund based and non fund based limits) are secured
by first pari passu charge over stocks, stores, raw materials, inventories,
work in progress, finished goods and also book debts, bills and moneys
receivable of the Company by way of hypothecation. These facilities are
further secured by second charge over the fixed assets of the Cement Division
of the Company. 3)
The debentures are secured by way of first pari passu charge over fixed
assets (present and future) (1.25 Times) of Cement Division of the Company,
except for outstanding debentures Rs. 110.000 Millions of Syndicate Bank
(1.40 Times), which is additionally secured by way of first pari passu charge
over fixed assets of Refractory Division of the Company.
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Financial Institutions : |
International Finance Corporation |
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
V. Sankar Aiyar and Company Chartered Accountants |
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Associates
: |
OCL Global Limited |
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|
Enterprises
over which key management personnel are able to exercise significant influence
: |
·
Hari Machines Limited ·
Dalmia Bharat Seva Trust ·
Dapel Investments Private Limited ·
Dalmia Institute of Scientific and
Industrial Research ·
Dalton International Limited ·
Agrico Limited ·
Dalmia Cement (Bharat) Limited ·
Landmark Property Development Company
Limited ·
Shree Natraj Ceramic and Chemical
Industries Limited ·
Chirawa Navyuvak Trust ·
Astir Properties Private Limited ·
Dalmia Shiksha Pratishthan ·
Landmark Landholdings Private
Limited ·
Dalmia Bharat Sugar and Industries
Limited ·
Dalmia Bharat Entrprises Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
100000 |
Equity Shares |
Rs.100/- each |
Rs.10.000 Millions |
|
70000000 |
Ordinary Shares |
Rs.2/- each |
Rs.140.000 Millions |
|
|
TOTAL |
|
Rs.150.000 Millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
63631805 |
Ordinary Shares |
Rs.2/- each |
Rs.127.264
Millions |
|
|
|
|
|
Subscribed Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
56900220 |
Ordinary Shares |
Rs.2/- each |
Rs.113.800 Millions |
|
|
|
|
|
Of
the above,
(i)
15750000 Ordinary Shares were allotted as bonus shares by capitalization from
General Reserve
(ii)
12352500 Ordinary Shares of Rs.2/- each, fully paid up were allotted during
2007-08, to the share holder of erstwhile Dalmia Cement (Meghalaya) Ltd
pursuant to a scheme of arrangement for merger
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 |
113.850 |
113.850 |
113.850 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
8730.313 |
7849.604 |
6478.040 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
8844.163 |
7963.454 |
6591.890 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
8181.839 |
7947.387 |
6818.895 |
|
|
2] Unsecured Loans |
340.929 |
309.395 |
330.434 |
|
|
TOTAL BORROWING |
8522.768 |
8256.782 |
7149.329 |
|
|
DEFERRED TAX LIABILITIES |
1143.545 |
1200.086 |
1001.564 |
|
|
|
|
|
|
|
|
TOTAL |
18510.476 |
17420.322 |
14742.783 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
9984.527 |
9776.596 |
8411.732 |
|
|
Capital work-in-progress |
2936.450 |
3311.249 |
3765.912 |
|
|
|
|
|
|
|
|
INVESTMENT |
75.886 |
61.196 |
63.549 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2540.551
|
2028.812
|
1735.653 |
|
|
Sundry Debtors |
1316.410
|
1046.036
|
1158.702 |
|
|
Cash & Bank Balances |
3902.111
|
3537.672
|
1185.446 |
|
|
Other Current Assets |
19.359
|
11.672
|
6.394 |
|
|
Loans & Advances |
771.606
|
718.747
|
815.573 |
|
Total
Current Assets |
8550.037
|
7342.939
|
4901.768 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1744.843
|
1673.457
|
1539.269 |
|
|
Other Current Liabilities |
993.492
|
974.737
|
665.183 |
|
|
Provisions |
298.089
|
423.464
|
195.726 |
|
Total
Current Liabilities |
3036.424
|
3071.658
|
2400.178 |
|
|
Net Current Assets |
5513.613
|
4271.281
|
2501.590 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
18510.476 |
17420.322 |
14742.783 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
14744.494 |
13742.047 |
11186.913 |
|
|
|
Other Income |
334.443 |
345.932 |
119.504 |
|
|
|
TOTAL (A) |
15078.937 |
14087.979 |
11306.417 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Materials Consumed |
4421.296 |
3842.677 |
3216.300 |
|
|
|
Purchases |
240.119 |
97.551 |
122.068 |
|
|
|
Freight, Clearing and Handling on Own Clinker |
158.176 |
87.295 |
45.323 |
|
|
|
Salaries, Wages and Benefits to Employees |
711.483 |
710.493 |
519.996 |
|
|
|
Power and Fuel |
2654.278 |
1978.057 |
1642.461 |
|
|
|
Other Expenses |
3839.052 |
3226.272 |
3142.924 |
|
|
|
Increase / (Decrease) in Stocks |
(315.648) |
(51.504) |
(107.178) |
|
|
|
TOTAL (B) |
11708.756 |
9890.841 |
8581.894 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
3370.181 |
4197.138 |
2724.523 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
624.466 |
506.676 |
384.955 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
2745.715 |
3690.462 |
2339.568 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
1227.523 |
1144.973 |
568.859 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1518.192 |
2545.489 |
1770.709 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
373.459 |
908.522 |
613.281 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H)
(I) |
1144.733 |
1636.967 |
1157.428 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1185.775 |
766.576 |
482.920 |
|
|
|
|
|
|
|
|
|
Add |
TRANSFER
FROM RESERVE FOR BAD AND DOUBTFUL DEBTS |
0.000 |
0.000 |
70.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
120.000 |
1000.000 |
750.000 |
|
|
|
Transfer from / to Debenture Redemption
Reserve |
27.367 |
(47.635) |
27.346 |
|
|
|
Proposed Dividend |
227.601 |
227.601 |
142.251 |
|
|
|
Tax on Dividend |
36.923 |
37.802 |
24.175 |
|
|
BALANCE CARRIED
TO THE B/S |
1918.617 |
1185.775 |
766.576 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Goods exported (F.O.B. Value) |
304.026 |
270.874 |
438.357 |
|
|
|
Sale of Goods on High Seas |
0.000 |
1.857 |
18.691 |
|
|
|
Interest receipt |
1.382 |
0.000 |
0.000 |
|
|
|
Service charges |
9.928 |
17.311 |
0.000 |
|
|
|
UK Vat refund |
0.018 |
0.036 |
0.052 |
|
|
TOTAL EARNINGS |
315.354 |
290.078 |
457.100 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
580.710 |
841.881 |
536.256 |
|
|
|
Stores & Spares |
82.245 |
29.131 |
58.981 |
|
|
|
Capital Goods |
10.076 |
3.196 |
181.662 |
|
|
TOTAL IMPORTS |
673.031 |
874.208 |
776.899 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
20.12 |
28.77 |
20.34 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 1st Quarter |
30.09.2011 2nd Quarter |
31.12.2011 3rd Quarter |
|
Type |
UnAudited |
UnAudited |
UnAudited |
|
Net Sales |
3603.200 |
3412.800 |
4329.800 |
|
Total Expenditure |
2869.900 |
3124.600 |
3294.500 |
|
PBIDT (Excl OI) |
733.300 |
288.200 |
1035.300 |
|
Other Income |
64.100 |
60.500 |
55.900 |
|
Operating Profit |
797.400 |
348.700 |
1091.200 |
|
Interest |
165.500 |
165.200 |
198.400 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
631.900 |
183.500 |
892.800 |
|
Depreciation |
274.200 |
296.100 |
340.200 |
|
Profit Before Tax |
357.700 |
(112.600) |
552.600 |
|
Tax |
110.000 |
(70.000) |
174.400 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
247.700 |
(42.600) |
378.200 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
247.700 |
(42.600) |
378.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
7.59
|
11.62
|
10.23 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
10.30
|
18.52
|
15.82 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
8.19
|
14.86
|
13.30 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.17
|
0.31
|
0.26 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.31
|
1.42
|
1.45 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.82
|
2.39
|
2.04 |
LOCAL AGENCY FURTHER INFORMATION
OPERATIONS
The operational results of the current year in
relation to the corresponding operations of the previous year have registered
an increase of 7% in net sales, but the operating profits and PBT have
decreased due to lower sales realization per tone of cement and higher input
costs.
EXPANSION AND FUTURE PLANS
The Company is taking all steps for earliest
setting up of 2X27 MW Coal based Captive Power Plant, which is expected during
the first half of financial year 2011-12.
The Company has initiated steps for setting up
a Cement manufacturing unit in West Bengal. In that regard, acquisition of
153.84 acres of Land through West Bengal Industrial Development Corporation has
been completed and possession obtained by the Company. Also, studies have been
undertaken as regards infrastructure required for availability of water, power
and rail connectivity at the proposed site. Construction of boundary wall has
started.
The Company is in the process of getting
Environment Clearance for permission to produce cement up to its full installed
capacity of 1.35 MnTPA from its existing Kapilas Cement Manufacturing Works.
Public hearing for the same has been completed successfully. The matter is in
process.
MANAGEMENT DISCUSSION AND ANALYSIS
Economic Scenario and Outlook
The year 2010-11 witnessed a steady growth
however higher input costs remained a cause of concern. As the Country’s growth
has relatively strong domestic underpinnings, the fundamentals of their economy
remained strong. While the year witnessed a firm growth through out, second
half of the year was more encouraging.
Confidence in the global markets is restoring
and economic activity in India is rebounding. Fiscal and monetary measures by
the Central Government and by the Reserve Bank of India have helped in
sustainable growth of the economy.
Government’s efforts towards enhanced
expenditure on infrastructure have helped in boosting demand for cement. There
is enough liquidity in the system. Borrowing by consumers and businesses
indicate firmness of business confidence and economy.
The world economy is gradually coming out of the
downturn. The robust growth in India and China has provided an impetus to the
ongoing recovery of the world economy. During financial year 2010-11, the
Indian economy saw acceleration in the pace of its growth due to a rebound in
rural income with increase in agricultural production and a good industrial and
service sector growth. With strong demand, robust consumption, savings and
investment rates set to continue in 2011-12, the GDP growth projection for
2011-2012 is 9%.
Financial Highlights
Cement operations scaled further to higher
levels in terms of volumes. The success story of the Company continued this
year with the robust all round performance in its operations. However, the
higher input costs remained cause of concern.
Net Sales in FY 2010-11 were up from
Rs.13742.000 Millions in FY 2009-10 to Rs.14744.500 Millions for the Company.
However, EBITDA for the Company fell from Rs.4197.100 Millions in FY 2009-10 to
Rs.3370.200 Millions in FY 2010-11, depicting a fall of 20% mainly on high
input cost and pressure on margin caused by surplus scenario in coastal Odisha
due to movement of cement from Andhra Pradesh. The Kaplias Cement Manufacturing
Works, which has major market in coastal districts of Odisha, was worst
affected due to this.
The net sales of cement business grew by 6% to
Rs.11811.800 Millions in FY 2010-11. Net sales from the refractory business of
the Company increased to Rs.2932.700 Millions in FY 2010-11, up by 11%.
In the earnings before interest, tax and
depreciation, substantial fall was witnessed in cement business in FY 2010-11
as compared to previous year. Compared to 2009-10, Cement EBIDTA during current
year has dropped in spite of higher volumes mainly due to lower cement prices
in the market and higher input costs.
Cement Business
Industry Structure and Developments
The financial year 2010-11 could not sustain
the growth rate and profitability achieved in the previous year.
Surplus scenario caused pressure on cement
prices in southern region to a historical low of Rs. 140/bag. This prompted
southern players more particularly manufactures of Andhra Pradesh for a need to
desperately search for unconventional markets to push volumes in the
neighboring states in the eastern region, which had relatively better prices
causing sharp fall in prices in eastern markets especially coastal Odisha.
Capacity additions in the east could not take
place fully as planned hence the current year did see a balanced demand supply
scenario. However, new capacity built-ups in North East, which has been natural
market for east; the surplus capacities in other bordering states, which will
continue to push volumes in the east; and stabilization of new plants either
already commissioned or in process of commissioning in the eastern region are
expected to cause a surplus scenario in the next Financial Year. Despite likely
demand growth of 8 to 10% on all India basis and almost similar growth in east,
production will be more and there is likely hood of over supply situation.
Eastern market is also not likely to remain insulated and prices are likely to
be under pressure.
Operations/Performance
Cement operations contribute 81% to the
revenues of the Company. The plants are currently at Rajgangpur and at Kapilas
Road, Odisha, which fall in the eastern region of India where growth in cement
demand during Financial Year 2010-11 has been higher compared with the national
growth rate.
The ability of the Company to react to growth
opportunities and efficiently executing the plans has helped it deliver a
performance superior to others on a continuous basis. There has been a notable
growth in the volume of cement business of the Company which has increased to
3.4 Million tons in FY 2010-11 which is in line with the growth witnessed by
east zone. The year was full of challenges especially in regard to volume push
by Andhra Pradesh and other new players in the region apart from limited
availability of slag and rising input costs. Nevertheless, by focusing all
strength on maximizing volume and better management of cost and resources, the
Company was successful in minimizing the impact of higher input costs and lower
cement prices.
To mitigate the increase in energy costs and
threat on availability in the years to come, the Company is in process of
setting up 2x27 MW Captive Thermal Power Plant (CPP) at Rajgangpur, Odisha.
This will ensure un-interrupted captive power supply to its plants at
relatively lower cost. The Company is taking all necessary steps to install CPP
in the first half of 2011-12.
Opportunities and Threats
Kapilas Cement Manufacturing Works has been
fully functional for last two years and has operated almost at its full
capacity through out the year barring rainy season.
The Company is going to get full advantage by
having its manufacturing facilities in the vicinity of market over
manufacturers who have to depend upon rail supply. Industry is experiencing
major wagon shortage both for input raw material movement as well as for
cement/clinker dispatches. The Company has made arrangement for dedicated
vehicles in Kapilas Cement Manufacturing Works to mitigate this risk and has
safeguarded itself from the shortfall of road supply in the event of peak
season demand for lorries. Similar arrangement is also being planned for
Rajgangpur plant. The Company has planned more than 50% of its additional
dispatches for the coming year through road transport without being dependent
on rail supply.
Scarcity of slag was felt both at Kapilas
Cement Manufacturing Works and at Rajgangpur Works. The Company is looking into
various options to find optimum use of available clinker for making cement
blended with slag or fly Ash. During 2011-12, with the operation of 2X27 MW
Captive Power plant in Rajgangpur, the Company will not only be saving on ever
rising energy cost but will also be self sufficient in power requirement. It
will also generate Fly Ash which will be gainfully utilized in making Portland
Pozzolana Cement by replacing costly slag as well as be a step forward in
achieving the Go Green Mission of the Company. In view of adequate availability
of clinker after full operation of both Clinkerisation plants at Rajgangpur,
the Company will have leverage of resorting to maximizing cement volumes by
producing other types of cements like Ordinary Portland Cement of Sleeper grade
(53S) and Portland Pozzolana Cement, etc. apart from manufacturing Portland
Slag Cement. Steps are being taken to launch a new type of cement, i.e.,
‘Masonry cement’ which is a better alternative cement for plaster, masonry and other
similar usages except for Roller Compacted Concrete.
The Company is proud to claim that it is the
first in the Country to have developed PPC 53 grade with low Alkali content of
0.8% to meet the challenging requirement of Hydel Project at Arunachal Pradesh
where the Company could beg order for almost one lakh Mt of cement in stiff
competition. This prestigious order is likely to be executed by the Company
soon and the Company shall endeavour to compete again to grab the opportunities
in future.
Demand supply imbalance will remain a cause of
concern for coming year as 2011-12 will further see addition in new capacities
in the East as well as in its neighbouring states which will have impact on
prices. However, the Company is taking steps to take on the challenges and
strengthen its brand image in neighbouring states as well as in Odisha where
the Company is already a brand leader.
Cement Grinding Unit project in West Bengal is
gaining momentum with land acquisition, completion of registration and environment
clearance formalities and starting of work on boundary wall. Once this plant is
commissioned, the Company will have better presence felt in West Bengal market
which is the major market of East.
Outlook
Backed on the projected GDP growth numbers of
around 9%, cement demand growth in the Country is likely to be in the range of
8 to 10% which is mainly due to increasing cement consumption in the ongoing
large infrastructure projects. Despite likely good demand growth, due to
additions in cement capacity and additions of Grinding Units in the market or
near to the source of availability of Fly Ash/slag, there is going to be a
surplus scenario in cement and thus there will be pressure on demand supply
situation where supply is likely to exceed demand in most part of the Country
and Eastern Region will not be any exception. Hence prices are likely to come
under pressure. Despite all above, the Company is geared up to maintain
profitability by way of operational efficiencies, enhancement of sales volume and
advantage of close proximity with market.
Refractory Business
Industry Structure and Developments
The refractory industry is dependent on growth
of steel industry as approximately 70% of its output is consumed therein. There
has been a constant production growth of approximately 6 to 7% in steel.
However, many announcements of increase in steel capacities in eastern India
and southern India have yet to take physical shape.
There is trend of consolidation in steel
industry through mergers and acquisitions, e.g., JSW-ISPAT, Kalyani-Geradau,
Wellspun-Remimetal. This gives a very big leverage to buyer with respect to
prices. Such consolidations in steel industry and intense competition among the
refractory manufacturers led to drop in prices this year as the capacities were
not being utilized fully especially in continuous casting refractory segment.
It has been estimated that the capacity
utilization of refractory industry in the Country stands at around 60%.
However, with the Government aiming to increase infrastructure development, the
steel production capacity in the Country is stated to grow to possibly 120
million tones or even 150 million tones by 2015. Likely, the cement, aluminum
and other industries will grow to unprecedented heights. This will give ample
opportunity to Indian refractory industry to book the capacities in future.
For high value segments like Basic, High
Alumna and Alumino Graphite, refractories industry is dependent on imported raw
materials. There has been continuous north ward increase in raw material prices
this year. In many cases price validity to stay just for a week. This has
affected the bottom line of industry in general.
Steel industry has started ordering
refractories on a very short notice and for quick delivery. With unutilized in
hand this purchase practice has led to severe competition as none of the
refractory manufacturers had comfortable order book position.
Operations/Performance
The year 2010-11 has been a very challenging
year with respect to performance. Increasing raw material prices and reducing
product prices has put tremendous pressure on operations. Severe cost reduction
measures by way of innovations in process, e.g., Total Productive Maintenance
in Concast plant, change in method of firing silica bricks, revision of
incentive schemes and search for alternative raw materials, were taken and this
helped in offsetting the increased cost of raw materials.
To ensure a fixed customer base the Company
has focused on total refractory management and in this year the
Company could succeed in starting total
refractory management in two plants in Eastern India. Advance level discussions
are taking place with other companies as well.
The suspension of expansion of Vedanta
aluminium refinery in Odisha had effect on their Balco plant expansion as well
and the supply of 4500 Mt inspected material of the Company which led to
inventory blockade of finished goods in addition to raw material. The Company
looked for ways and means to consume the raw materials but the inventory of
finished goods is being gradually liquidated to Balco against repair
requirement.
In spite of all uncertainties, the Company
took up the challenge in this changed business scenario and maintained almost
similar NSR as that of previous year.
Refractory production in terms of tonnage has
increased in 2010-11 as compared to the FY 2009-10.
On export front, this year the Company has
achieved sales of Rs.368.000 Millions against Rs.340.400 Millions in previous
year registering a growth of 8%.
Opportunities and threats
1) By virtue of long experience in refractory
business the Company is confident that it will benefit from the rising demand
because of its vast product portfolio.
2) The beginning of Total Refractory
Management model of supply/contracts will give dedicated customer base.
3) Addition of Dolomite bricks in the product
range has opened up stainless steel production segment.
4) Many new cement clinker capacities with
high throughput kilns have come up/are coming up. There is a trend of using
basic bricks in such kilns. Till now these refractories are imported. The
Company developed many products for cement kilns and after establishing
performances in last two years it will be marketing the products aggressively
to such cement plants.
Outlook
1) Even with very conservative outlook, India
is going to add at least 30 Mn TPA of steel capacities. This will give boost to
the consumption of refractories. As all the additions are in organized sector,
it is expected that the Company will have favourable order book position in
coming years.
2) As is well known the per capita consumption
of Al Copper is low in India, the consumption of these metals will necessitate smelting
of these in India to grow. The Company has well established products for this
segment and therefore the outlook appears good for growth in sale.
3) Construction Industry is on revival path.
This has led to growth in glass and cement segments. Hitherto the major basic
refractories for cement were imported. New products for these applications have
been developed by the Company. These have been successfully tried and accepted
by customers. It is expected that good growth will come from these segments as
well.
4) As far as glass segment is concerned there
is spurt in growth in India and in Europe - particularly in Eastern Europe
including Russia. The Company has established refractories for glass long back
and now exporting to above countries. Combined with increasing demand from
domestic consumers glass segment will also be a very attractive segment in
coming years.
5) Thus based on above growth potentials
refractory business is on threshold of growth and the Company is confident of
taking advantage of these opportunities.
Financial Performance
The Company witnessed increased turnover on
account of growth in volumes in Cement and Refractory business.
Total Expenses before Depreciation and Tax for
the Company are Rs.12340.000 Millions, up from Rs.10390.000 Millions last year.
Power and Fuel costs are the highest contributor to the expenses of the Company
in FY 2010-11, at Rs.2650.000 Millions. Raw Material costs at Rs.4420.000
Millions are close to 33% of the expenditure. Freight and transportation charges
contributed another 11% to the costs. Salaries and Wages contribute only 6% to
the costs of the Company at Rs.710.000 Millions. Interest cost was 5% of
expenses.
Depreciation was higher at Rs.123 crores on
account of addition in gross assets during the year and depreciation on assets
of Kapilas Cement Manufacturing Works and clinkerisation unit (Line-2) was
provided on written down value method.
Awards and recognition
Awards and recognition - Cement Division
During the year the Cement Division of the
Company bagged the following awards:-
1) Quality Control (QC) Teams, “ANNEVESHAN and
SPARK” have won the Gold Trophy in the 18th Chapter Convention on Quality
Circles organized by Chapter Convention on Quality Circle (CCQC), Rourkela
Chapter from 10-11 Sept.’2010. The QC team ANNEVESHAN has also won the first
prize in Quiz competition.
2) Quality Control (QC) Team ANNEVESAN has won
the Gold Award (highest one among three categories) in the
International Convention on Quality Concept
Circles (ICQCC) – 2010, hosted by Quality Circle Forum of India, at Hydrabad.
3) Quality Control (QC) Teams, “ANNEVESHAN and
SPARK” are placed in the Par Excellence category (highest one among four
categories) in the National Convention on Quality Concept Circles (NCQCC) –
2010, hosted by Quality Circle Forum of India (QCFI)- Visakhapatnam Chapter.
4) Quality Control (QC) Team “PHOENIX” from C
and I – Clinkerisation won the 2nd Prize in the 23rd State Level Convention on
QC Circles – 2010, hosted by Confederation of Indian Industry (CII)
Bhubaneswar.
Awards and recognition - Refractory Division
During the year the Refractory Division of the
Company bagged the following awards:
1) CAPEXIL Export award (Ministry of Commerce
and Industries) Certificate of Merit for excellence in Exports for year 2009-10
for the fifth consecutive year.
2) Quality Control (QC) Team, “BASUNDHARA
(PROD.)” bagged Silver Plaque Award in the 15th All Orissa Quality Circle
Convention held at Bhubaneswar during 21-22 April, 2010. 3) Quality Control
(QC) Team, “LAKSHYA (PROD)” bagged Gold Award in the 18th Chapter Convention on
Quality Circles held at Rourkela during 10-11 September, 2010.
4) Quality Control (QC) Team, “ANWESHAN
(ENGG.)” Division bagged Silver Award in the 18th Chapter Convention on Quality
Circles held at Rourkela during 10-11 September, 2010.
5) Quality Control (QC) Team, “LAKSHYA
(PROD.)” and “VISWAKARMA (ENGG.)” bagged Gold Awards in the International
Convention on Quality Concepts Circles held at Hyderabad during 12-14 October,
2010.
6) Quality Control (QC) Team, “LAKSHYA
(PROD.)” bagged Par Excellent Award in the 24th National Convention on Quality
Circles held at Vishakhapatnam during 27-30 December, 2010.
UNAUDITED
FINANCIAL RESULTS FOR THE PERIOD ENDED ON 31.12.2011
(Rs. in Millions)
|
Particulars |
Quarter Ended |
Nine Months ended |
||
|
31.12.2011 |
30.09.2011 |
31.12.2011 |
||
|
Unaudited |
Unaudited |
Unaudited |
||
|
1 |
a) Gross Sales / Income from operations |
4810.400 |
3830.400 |
12709.100 |
|
|
Less: Excise Duty |
547.700 |
460.400 |
1506.500 |
|
|
Net Sales / Income from operations |
4262.700 |
3370.000 |
11202.600 |
|
|
b) Other Operating Income |
67.100 |
42.800 |
143.200 |
|
|
Total Income |
4329.800 |
3412.800 |
11345.800 |
|
2 |
Expenditure: |
|
|
|
|
|
a) (-) Increase / Decrease in stock in
trade & WIP |
80.100 |
95.200 |
185.400 |
|
|
b) Consumption
of Raw Materials |
1011.500 |
974.300 |
3103.600 |
|
|
c) Purchase
of traded goods |
55.600 |
49.700 |
127.300 |
|
|
d) Employees
cost |
188.100 |
196.300 |
556.700 |
|
|
e) Depreciation |
340.200 |
296.100 |
910.500 |
|
|
f) Power
and fuel |
816.400 |
809.500 |
2364.000 |
|
|
g) Selling
Expenses |
376.600 |
377.400 |
1055.400 |
|
|
h) Other
Expenditure |
766.200 |
622.200 |
1896.600 |
|
|
Total |
3634.700 |
3420.700 |
10199.500 |
|
3 |
Profit from Operations before Other Income,
Interest & Exceptional Items (1-2) |
695.100 |
(7.900) |
1146.300 |
|
4 |
Other Income |
55.900 |
60.500 |
180.500 |
|
5 |
Profit before Interest & Exceptional
Items (3+4) |
751.000 |
52.600 |
1326.800 |
|
6 |
Interest |
198.400 |
165.200 |
529.100 |
|
7 |
Profit after Interest but before
Exceptional Items (5-6) |
552.600 |
(112.600) |
797.700 |
|
8 |
Exceptional Items |
- |
|
- |
|
9 |
Profit (+)/ Loss (-) from Ordinary Activities
before Tax (7+8) |
552.600 |
(112.600) |
797.700 |
|
10 |
Tax expenses |
174.400 |
(70.000) |
214.400 |
|
11 |
Net Profit (+)/ Loss(-) from Ordinary
Activities after Tax (9-10) |
378.200 |
(42.600) |
583.300 |
|
12 |
Extra Ordinary Items (net of Tax Expenses
Rs.) |
-- |
-- |
--. |
|
13 |
Net Profit (+)// Loss (-) for the period
(11-12) |
378.200 |
(42.600) |
583.300 |
|
14 |
Paid-up Equity Share Capital (Face Value of
Rs.2 per share) |
113.800 |
113.800 |
113.800 |
|
15 |
Paid-up Debt Capital |
-- |
-- |
760.000 |
|
16 |
Reserve excluding Revaluation Reserves as
per Balance sheet of previous accounting year |
-- |
-- |
-- |
|
17 |
Debenture Redemption Reserve |
-- |
-- |
-- |
|
18 |
Earning Per Share (Not Annualised) (Basic
and Diluted) (Rs.) a) Before Extra-ordinary items b) After Extra-ordinary items |
6.65 6.65 |
-0.75 -0.75 |
10.25 10.25 |
|
19 |
Public Shareholding Number of shares (in lakhs) |
168.89 |
169.90 |
168.89 |
|
|
Percentage of shareholding |
29.68 |
29.86 |
29.68 |
|
20 |
Promoters and Promotor group shareholding |
|
|
|
|
|
a) Pledged/Encumbered |
|
|
|
|
|
-Number of Shares (in lakhs) |
-- |
-- |
-- |
|
|
-Percentage of shares (as a % of the total shareholding
of promoter and promoter group) |
-- |
-- |
-- |
|
|
-Percentage of shares (as a % of the total
share capital of the company) |
-- |
-- |
-- |
|
|
b) Non-encumbered |
|
|
|
|
|
-Number of Shares (in Lakhs) |
400.11 |
399.10 |
400.11 |
|
|
-Percentage of shares (as a % of the total
shareholding of promoter and promoter group) |
100.00 |
100.00 |
100.00 |
|
|
-Percentage of shares (as a % of the total
share capital of the company) |
70.32 |
70.14 |
70.32 |
SEGMENT – WISE
REVENUE, RESULTS AND CAPITAL EMPLOYED
(Rs. in Millions)
|
Particulars |
Quarter
Ended |
Nine Months ended |
|
|
31.12.2011 |
30.09.2011 |
31.12.2011 |
|
|
Unaudited |
Unaudited |
Unaudited |
|
|
1) Segment Revenue a) Cement |
3413.700 |
2562.400 |
8955.500 |
|
b) Refractory |
8,49.000 |
807.600 |
2247.100 |
|
Total |
4262.700 |
3370.000 |
11202.600 |
|
Less: Inter Segment revenue |
|
|
|
|
Net Sales / Income from
operations |
4262.700 |
3370.000 |
11202.600 |
|
2) Segment
Results [Profit/(Loss) before Tax and Interest] a) Cement |
673.100 |
19.900 |
1221.600 |
|
b) Refractory |
108.400 |
49.100 |
149.000 |
|
Total |
781.500 |
69.000 |
1370.600 |
|
Less : i) Interest Expense |
198.300 |
165.200 |
529.100 |
|
ii) Un-allocable expenditure
(Net of Income) |
30.600 |
16.400 |
43.800 |
|
Total Profit before Tax |
552.600 |
(112.600) |
797.700 |
|
3) Capital Employed (Segment
Assets Segment Liabilities) |
|
|
|
|
a) Cement |
13683.700 |
13674.700 |
13683.700 |
|
b) Refractory |
2153.900 |
1982.800 |
2153.900 |
|
c) Un-allocated |
(6409.900) |
(6608.300) |
(6409.900) |
|
Total |
9427.700 |
9049.200 |
9427.700 |
Notes:
1. The figures of the previous periods have been regrouped wherever
necessary.
2. Information in respect of investor's complaint for the quarter ended
31.12.11: opening balance-0, received-0, resolved-0 and pending-0.
3. Provision for Taxation has been made u/s 115JB of the Income Tax Act,
1961 (MAT) based on the anticipated taxable income for the year as a whole.
4.
Pursuant to letter dated
December 27, 2011 from the Office of the Deputy Director of Mines, Rourkela
Circle, Rourkela, the mining of limestone at Lanjiberna Limestone and Dolomite
Mines of the Company has been suspended since Jan 07,2012 pending renewal of
forest clearance under Forest (Conservation) Act, 1980. The production of
clinker has consequently suffered since that date. However, the Company
continues to produce cement by procuring clinker from the market. The Company
is following up for the renewal of Forest Clearance and is hopeful to get the
same soon.
5. The above results have been subjected to a limited review by the
statutory auditors, reviewed by the Audit Committee and approved by the Board
of Directors at it's meeting held on 02.02.12.
FIXED ASSETS
·
Freehold Land
·
Leasehold Land
·
Building (on Freehold and
Leasehold Land)
·
Plant and Machinery
·
Railway Lines
·
Furniture, Fixtures and
Equipments
·
Vehicles
·
Livestock
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.51.05 |
|
|
1 |
Rs.81.09 |
|
Euro |
1 |
Rs.67.39 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
59 |
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.