MIRA
INFORM REPORT
|
Report Date : |
11.08.2012 |
IDENTIFICATION DETAILS
|
Name : |
VISA STEEL LIMITED |
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Registered
Office : |
Visa House, 11 Ekamra Kanan, Nayapalli, Bhubaneswar-751015, Orissa |
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Country : |
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Financials (as
on) : |
31.03.2012 |
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Date of
Incorporation : |
10.09.1996 |
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Com. Reg. No.: |
15-004601 |
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Capital
Investment / Paid-up Capital : |
Rs. 1100.000 Millions |
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CIN No.: [Company Identification
No.] |
L511090R1996PLC004601 |
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|
TAN No.: [Tax Deduction &
Collection Account No.] |
BBNV00159F |
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PAN No.: [Permanent Account No.] |
AAACV9836E |
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Legal Form : |
A Public Limited Liability Company. The company’s shares are listed on
stock exchange. |
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Line of Business
: |
Manufacturer of chrome ore based products, pig iron, coke ferro chrome
sponge iron and power |
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|
No. of Employees : |
1630 (Office 100, Factory 1500 and Branch 30) (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
B (32) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Maximum Credit Limit : |
USD 9300000 |
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|
Status : |
Moderate |
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Payment Behaviour : |
Slow But Correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track record. There appears
huge accumulated loss in the current year. However, trade relations are
reported to be fair. Business is active. Payments are reported to be slow but
correct. The company can be considered for business dealing with some cautions.
|
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 – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
|
Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
BB (Long Term Rating) |
|
Rating Explanation |
Having moderate risk of default regarding timely servicing of
financial obligation |
|
Date |
-- |
|
Rating Agency Name |
CARE |
|
Rating |
A4 (Short Term Rating) |
|
Rating Explanation |
Having minimal degree of safety regarding timely payment of financial
obligation. It carry very credit risk |
|
Date |
-- |
RBI DEFAILTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter in
the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAILTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office : |
Visa House, 11 Ekamra Kanan, Nayapalli, Bhubaneswar-751015, Orissa,
India |
|
Tel. No.: |
91-674-2552479/ 84 |
|
Fax No.: |
91-674-2554661/ 62 |
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E-Mail : |
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|
Website : |
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Corporate Office : |
Visa House, 8/10, 5th Floor, Alipore Road, Kolkata-700027, West
Bengal, India |
|
Tel. No.: |
91-33-30119000 |
|
Fax No.: |
91-33-30119002 |
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|
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Factory 1 : |
Kalinganagar Industrial Complex, P.O. Jakhapura-755019, District
Jaipur, Orissa, India |
|
Tel. No.: |
91-6726-242441/ 444 |
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Fax No.: |
91-6726-242442 |
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Factory 2 : |
Village Golagaon, Near Duburi, P.O. Pankapal, District Jaipur, |
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Tel. No.: |
91-6726-245470 |
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Fax No.: |
91-6726-245561 |
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|
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Factory 3 : |
8, Gajanandpuram, |
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Tel. No.: |
91-7762-228290/ 91 |
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Branches : |
Located at: ·
·
Mumbai ·
·
·
Pradip ·
Vizag ·
Chennai |
DIRECTORS
AS ON 31.03.2012
|
Name : |
Mr. Vishambhar Saran |
|
Designation : |
Chairman and Managing Director |
|
|
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|
Name : |
Mr. Maya Shankar Verma |
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Designation : |
Independent Director |
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Name : |
Mr. Shiv Dayal Kapoor |
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Designation : |
Independent Director |
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Name : |
Mr. Debi Prasad Bagchi |
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Designation : |
Independent Director |
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Name : |
Mr. Pradip Kumar Khaitan |
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Designation : |
Independent Director |
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|
Name : |
Mr. Shanti Narain |
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Designation : |
Independent Director |
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|
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|
Name : |
Mr. Subroto Trivedi |
|
Designation : |
Non- Executive Director |
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Name : |
Mr. Vishal Agarwal |
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Designation : |
Managing Director |
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Name : |
Mr. prabir Ramendralal Bose |
|
Designation : |
Deputy Managing Director |
KEY EXECUTIVES
|
Name : |
Mr. Manoj Kumar Digga |
|
Designation : |
Chief Financial Officer |
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|
|
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Name : |
Mrs. Subhra Giri |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.06.2012
|
Category of
Shareholder |
No. of Shares |
% of No. of
Shares |
|
|
|
|
|
(1) Indian |
|
|
|
Bodies Corporate |
81,400,000 |
74 |
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Sub Total |
81,400,000 |
74 |
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|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
81,400,000 |
74 |
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|
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(1) Institutions |
|
|
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|
1,607,600 |
1.46 |
|
Insurance Companies |
500,111 |
0.45 |
|
Foreign Institutional Investors |
4,998,087 |
4.54 |
|
Sub Total |
7,105,798 |
6.46 |
|
|
|
|
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Bodies Corporate |
11,292,046 |
10.27 |
|
Individuals |
|
|
|
Individual shareholders holding nominal share capital up to Rs. 0.100
Million |
6,336,270 |
5.76 |
|
Individual shareholders holding nominal share capital in excess of Rs.
0.100 Million |
3,498,933 |
3.18 |
|
|
366,953 |
0.33 |
|
Non Resident Indians |
356,011 |
0.32 |
|
Clearing Members |
10,942 |
0.01 |
|
Sub Total |
21,494,202 |
19.54 |
|
Total Public shareholding (B) |
28,600,000 |
26 |
|
Total (A)+(B) |
110,000,000 |
100 |
|
|
- |
- |
|
(1) Promoter and Promoter Group |
- |
- |
|
(2) Public |
- |
- |
|
Sub Total |
- |
- |
|
Total (A)+(B)+(C) |
110,000,000 |
- |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of chrome ore based products, pig iron, coke ferro chrome
sponge iron and power |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Pig Iron (Note 1) |
MT |
225000 |
42454 |
|
Chrome concentrate |
MT |
100000 |
-- |
|
Chrome Powder |
MT |
100000 |
-- |
|
Coke |
MT |
400000 |
-- |
|
Ferro Chrome (Note 3) |
MT |
50000 |
42187 |
|
Sponge Iron (Note 4) |
MT |
300000 |
134538 |
|
Power at Captive Power Plant (MKWH) |
MT |
438 |
226 |
|
LAM Coke (Note 2) |
MT |
-- |
265621 |
NOTES:
1.
Does not include By-products generated 3779 MT
2.
Includes used for own consumption 52548 MT
Does not include
Production By way of Conversion 51763 MT
Does not include
By-products generated 18842 MT
Does not include By-products
generated by way of conversion 4113 MT
3.
Does not include By-products generated 2185 MT
4.
Including Trial Run Production
5.
Includes used for Captive Consumption (MKWH) 201 MT
GENERAL INFORMATION
|
No. of Employees : |
1630 (Office 100, Factory 1500 and Branch 30) (Approximately) |
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Bankers : |
·
Andhra Bank ·
Bank of Baroda ·
Bank of India ·
Canara Bank ·
Central Bank of India ·
Corporation Bank ·
Dena Bank ·
Export Import Bank of India ·
HUDCO ·
Indian Overseas Bank ·
IL and FS Financial Services Limited ·
Oriental Bank of Commerce ·
Punjab National Bank ·
SIDBI ·
State Bank of India ·
State Bank of Hyderabad ·
State Bank of Travancore ·
Syndicate Bank ·
UCO Bank ·
Union Bank of India ·
Vijaya Bank |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Lovelock and Lewes Chartered Accountant |
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Internal Auditors : |
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Name : |
L B Jha and Company Chartered Accountant |
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Solicitors : |
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Names : |
Khaitan and Company |
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Holding Company : |
VISA
Infrastructure Limited |
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|
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|
Joint Venture Company : |
VISA Urban Infra
Limited |
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Subsidiaries : |
·
Ghotaringa Minerals Limited ·
VISA Bao Limited |
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|
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Fellow Subsidiaries : |
·
VISA Aluminium Limited ·
VISA Cement Limited ·
VISA Resources India Limited (Formerly Known as
VISA Comtrade Limited) ·
VISA Power Limited ·
VISA Power Trading Company Limited ·
VISA Power (Jharkand) Private Limited ·
VISA Power (Orissa) Private Limited ·
VISA Energy Ventures Limited |
|
|
|
|
Enterprise having significant influence : |
VISA
International Limited |
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|
|
|
Enterprise over which Relatives of Key Managerial Personnel having
significant influence : |
·
VISA Minmetal Limited ·
VISA Realty Limited ·
VISA Aviation Limited ·
VISA Resources Pte Limited ·
VISA Bulk Shipping Pte Limited ·
Tastebuds Gourmet Foods Private Limited ·
VISA Trust |
CAPITAL STRUCTURE
AS ON 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
160000000 |
Equity Shares |
Rs.10/- each |
Rs. 1600.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
110000000 |
Equity Shares |
Rs.10/- each |
Rs. 1100.000
Millions |
|
|
|
|
|
NOTES:
a)
Rights, preferences and restrictions attached to
shares
The Company has only
one class of equity shares referred to as equity shares having face value of
Rs.10/- each. Each holder of equity shares is entitled to one vote per share.
The Company declares and pays dividend in Rupees. The dividend proposed by the
Board of Directors is subject to the approval of shareholders in the Annual
General Meeting.
b)
Shares held by the Holding / Ultimate Holding
Company and / or their Subsidiaries and Associates
|
57,612,167 Equity
Shares of Rs.10/- each held by VISA Infrastructure Limited the Holding
Company |
576.12 |
576.12 |
|
c)
Shareholders holding more than 5 % shares |
|
|
|
VISA
Infrastructure Limited (Number) |
57612167 |
57612167 |
|
VISA
Infrastructure Limited (%) |
52.37 |
52.37 |
|
VISA
International Limited (Number) |
23532233 |
23532233 |
|
VISA
International Limited (%) |
21.39 |
21.39 |
d)
Share Reserved for issue under option
For details of share
reserved for issue under the Employee Stock Option Plan (ESOP) of the Company
refer note: 3.33
e)
VISA Infrastructure Limited, the holding company
has pledged 55,000,000 number of equity shares (17,300,000 number equity shares
as on 31 March 2012) being 95.47% of its total shareholding.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1100.000 |
1100.000 |
1100.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1244.320 |
2432.860 |
2046.930 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
2344.320 |
3532.860 |
3146.930 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
11275.850 |
11401.820 |
11076.990 |
|
|
2] Unsecured Loans |
756.400 |
250.000 |
350.390 |
|
|
TOTAL BORROWING |
12032.250 |
11651.820 |
11427.380 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
597.010 |
301.100 |
|
|
|
|
|
|
|
|
TOTAL |
14376.570 |
15781.690 |
14875.410 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
7818.370 |
7709.130 |
8136.290 |
|
|
Capital work-in-progress |
17776.760 |
13488.300 |
7700.700 |
|
|
|
|
|
|
|
|
INVESTMENT |
610.400 |
610.400 |
600.400 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3525.060
|
3956.800 |
3417.070
|
|
|
Sundry Debtors |
515.810
|
479.860 |
648.780
|
|
|
Cash & Bank Balances |
766.490
|
809.310 |
833.410
|
|
|
Other Current Assets |
125.580
|
148.330 |
18.150
|
|
|
Loans & Advances |
2215.310
|
1957.690 |
1415.770
|
|
Total
Current Assets |
7148.250
|
7351.990 |
6333.180 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
|
|
6964.050
|
|
|
Other Current Liabilities |
|
|
816.190
|
|
|
Provisions |
64.460
|
168.140 |
139.470
|
|
Total
Current Liabilities |
18977.210
|
13378.130 |
7919.710 |
|
|
Net Current Assets |
(11828.960)
|
(6026.140) |
(1586.530)
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
SHARE ISSUE EXPENSES |
0.000 |
0.000 |
24.550 |
|
|
|
|
|
|
|
|
TOTAL |
14376.570 |
15781.690 |
14875.410 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
13659.050 |
13236.390 |
11569.420 |
|
|
|
Other Income |
259.910 |
230.060 |
145.410 |
|
|
|
TOTAL (A) |
13918.960 |
13466.450 |
11714.830 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of
materials consumed |
10381.810 |
8009.690 |
8136.600 |
|
|
|
Purchases of
Stock-in-Trade |
2441.330 |
2397.260 |
-- |
|
|
|
Employee
benefits expense |
380.300 |
429.440 |
-- |
|
|
|
Other expenses |
1065.350 |
999.650 |
1601.870 |
|
|
|
Exceptional
Items |
617.270 |
0.000 |
-- |
|
|
|
Changes in
inventory of finished goods, work-in-progress and Stock-in-Trade |
(1410.450) |
(745.680) |
-- |
|
|
|
TOTAL (B) |
13475.610 |
11090.360 |
9738.470 |
|
|
|
|
|
|
|
|
Less |
PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTISATION (A-B) (C) |
443.350 |
2376.090 |
1976.360 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
1896.680 |
1029.490 |
651.400 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
(1453.330) |
1346.600 |
1324.960 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/ AMORTISATION (F) |
511.520 |
482.050 |
468.180 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS)
BEFORE TAX (E-F) (G) |
(1964.850) |
864.550 |
856.780 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
(776.310) |
350.780 |
382.620 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS)
AFTER TAX (G-I) (J) |
(1188.540) |
513.770 |
474.160 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
NA |
NA |
(35.370) |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend |
NA |
NA |
110.000 |
|
|
|
Income Tax on Proposed Dividend |
NA |
NA |
18.690 |
|
|
BALANCE CARRIED
TO THE B/S |
NA |
NA |
310.100 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
808.820 |
2194.520 |
1952.940 |
|
|
TOTAL EARNINGS |
808.820 |
2194.520 |
1952.940 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
3632.740 |
3747.430 |
2762.860 |
|
|
|
Finished Goods |
1336.370 |
1839.250 |
816.000 |
|
|
|
Capital Goods |
147.110 |
2000.580 |
38.080 |
|
|
TOTAL IMPORTS |
5116.220 |
7587.260 |
3616.940 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) Per Share (Rs.) |
(10.80) |
4.67 |
4.31 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
(8.54)
|
3.82 |
4.05
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
(14.38)
|
6.53 |
7.41
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(13.13)
|
5.74 |
5.92
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.84)
|
0.24 |
0.27
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
13.23
|
7.25 |
6.15
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.38
|
0.55 |
0.80
|
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
No |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
----- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
Yes |
|
21] |
Market information |
----- |
|
22] |
Litigations that the firm
/ promoter involved in |
----- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
----- |
|
26] |
Buyer visit details |
----- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
No |
|
31] |
Date of Birth
of Proprietor/Partner/Director, if available |
No |
|
32] |
PAN of Proprietor/Partner/Director,
if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External
Agency Rating, if available |
Yes |
OPERATIONS
The Company is engaged
in the business of manufacturing value added products including LAM Coke, High
Carbon Ferro Chrome, Pig Iron, Sponge Iron and Special Steel Billets / Blooms,
Bars and Wire Rods. In addition, the Company generates Power mainly for captive
use. During the year, the Company’s financial performance has been adversely
affected due to the non-availability of raw material, increasing raw material
costs, high bank interest rates and volatile foreign exchange. Due to shortage
in availability of iron ore, Iron and Steel making facilities, i.e. Blast
Furnace, DRI, SMS and Rolling Mill operated at very low production level and
the Company was unable to achieve its revenue potential.
The Company has
registered a revenue growth of 3% to Rs.13918.96 million in the FY’2011-12
compared to Rs.13466.45 million during the FY’2010- 11. The operating margins
decreased to 8% at Rs.1060.62 million in the FY’2011-12 versus 18% at
Rs.2376.09 million in the previous year. The PBT fell from Rs.864.55 million
for the FY’2010-11 to a loss of Rs.1964.85 million. PAT fell from Rs.513.77
million during the previous financial year to a loss of Rs.1188.54 million
during the FY’2011-12.
During the year,
the Company’s volumes were impacted by the uneconomical prices of Iron Ore and
Chrome Ore. The production of Coke was 354,634 MT compared to 340,339 MT in the
previous year. The production of High Carbon Ferro Chrome was lower at 22,368
MT compared to 44,372 MT during the previous year. The production of Pig Iron
was 84,454 MT compared to 46,233 MT in the previous year. The production of
Sponge Iron was 157,356 MT compared to 134,538 MT in the previous year. The
captive power generated during the year was 435 million units as against 226
million units in the previous year and Steel production during the year was
45,772 MT.
The Company has
decided to set up a 0.5 MTPA Iron Ore Sinter Plant in order to hedge the iron
ore procurement as it is currently buying only sized iron ore. This would also ensure
continuous smooth running of the Blast Furnace. The Iron Ore Sinter Plant would
enhance the profitability of the Blast Furnace and would further reduce the
cost of raw material and improve the productivity of the Steel making
facilities.
The Company’s
subsidiary – VISA BAO Limited, is setting up a 100,000 TPA Ferro Chrome Plant
with 4 Submerged Arc Furnaces of 16.5 MVA each at Kalinganagar in Odisha. The
Company has made significant progress towards implementation of the project and
the project is scheduled to be completed in phases during second half of the
financial year 2012-13.
SUBSIDIARIES
The Company has
two subsidiaries namely, VISA BAO Limited and Ghotaringa Minerals Limited:
(i)
VISA BAO Limited (VBL) is a Joint Venture between
the Company and Baosteel Resources Company Limited, China. VBL is setting up a
100,000 TPA Ferro Chrome Plant in Odisha.
(ii)
Ghotaringa Minerals Limited (GML) is a Joint
Venture between the Company and Orissa Industries Limited (ORIND) for assisting
ORIND for developing a chrome ore deposit and is awaiting various Government
approvals.
MANAGEMENT
DISCUSSION AND ANALYSIS
OVERVIEW
During the
financial year 2011-12, the Company’s performance has been adversely affected
due to non availability of raw material, increasing raw material cost, high
interest rates and volatile foreign exchange. During
the financial year
2011-12, the Company registered a 3% growth in revenues to Rs.13,918.96
million, but a 55% drop in EBIDTA to Rs.1,060.62 million. PAT fell from
Rs.513.77 million during the previous financial year to a loss of Rs.1,188.54
million during the financial year 2011-12.
INDUSTRY
STRUCTURE AND DEVELOPMENTS
STEEL
INDUSTRY OVERVIEW
The global economy
is witnessing another period of uncertainty due to the European Sovereign debt
crisis. The increase in inflation in emerging economies has led to a sharp hike
in interest rates, which has resulted in slowdown in demand. The global
financial uncertainty has also resulted in volatility in exchange rates.
The global Steel industry
has witnessed reasonable demand growth and Steel making capacities have
gradually shifted to emerging markets such as China and India. However, the
high cost of raw materials and increased volatility in prices has put pressure
on margins.
The Steel industry
in India has suffered due to non availability and high prices of Iron Ore which
has impacted Steel production. The Iron Ore mining ban in Karnataka and
subsequent impact in Iron Ore production in Goa and Odisha has forced many
Steel Companies to operate at reduced capacities and even close down
operations. It is expected that the raw material constraints shall ease towards
second half of FY’2012-13 and mines will gradually get back to normal
production.
The Government of
India has imposed an export tax of 30% on export of Iron Ore and Chrome Ore
which should discourage exports and encourage value addition within the
Country. The removal of 5% import duty on thermal coal is also a relief for the
Sponge Iron based Steel producers.
The Indian economy
is expected to grow at 7.6% in 2012-13 against 6.9% in 2011-12. The economy is
likely to grow significantly over the next decade driven by the infrastructure
(power, road, railways, ports etc.) and consumption (automobile, real estate
etc.) sectors which will result in sustained growth in demand for various Iron
and Steel products.
The States of
Odisha, Chhattisgarh and Jharkhand which account for majority of the Iron Ore
and Coal reserves in the Country will remain the most attractive locations for
setting up Iron and Steel manufacturing capacity.
The Odisha
Government is currently reviewing the renewal of all expired mining leases
which are operating under deemed extension, which will offer an opportunity for
Steel producers in Odisha. Meanwhile, the draft MMDR Bill is also under
discussion.
COMPANY
OVERVIEW
The
Company’s current saleable products include Iron and Steel products such as LAM
Coke, High Carbon Ferro
Chrome,
Pig Iron, Sponge Iron and Special Steel Billets / Blooms, Bars and Wire Rods.
In addition, the Company
generates
power mainly for captive use.
BUSINESS REVIEW
The Company is
engaged in the business of manufacturing value added products including LAM
Coke, High Carbon Ferro Chrome, Pig Iron, Sponge Iron and Special Steel Billets
/ Blooms, Bars and Wire Rods. In addition, the Company generates power mainly
for captive use.
The manufacturing
facilities of the Company are situated at Kalinganagar which includes Coke
Oven, Ferro Chrome, Blast Furnace, Sponge Iron, Power and Special Steel and at
Golagaon in Odisha where the Chrome Ore Beneficiation and Chrome Ore Grinding
Plants are located.
During the year,
the Company’s financial performance has been adversely affected due to the
non-availability of raw material, increasing raw material costs, high bank
interest rates and volatile foreign exchange. Due to shortage in availability
of iron ore, Iron and Steel making facilities, i.e. Blast Furnace, DRI, SMS and
Rolling Mill operated at very low production level and the Company was unable
to achieve its revenue potential.
IRON
AND STEEL PRODUCTS
(a)
LAM COKE
The Coke Oven
Plant, with a total capacity of 400,000 TPA, operates on the stamp-charging
technology which allows blending of semi-soft and semi-hard Coking Coals with
prime hard Coking Coals to produce Low Ash Metallurgical Coke.
The total coke
production during 2011-12 was 354,634 MT compared to 340,339 MT in 2010-11.
Coking coal, the primary raw material for producing coke, was imported from
Australia. Coke was partly consumed in the Blast Furnace and partly sold with
total sales contribution amounting to Rs.5,659.30 million, equating to 40% of
total revenues.
(b)
FERRO CHROME
The Ferro Chrome
Plant, with a total capacity of 50,000 TPA produced 22,368 MT of Ferro Chrome
in 2011-12 compared to 44,372 MT in 2010-11. The main raw material is Chrome
Ore, Coke and Power. Ferro Chrome is sold to various Special and Stainless
Steel Plants in India and globally. The sales contributed 10% of total revenues
during the year amounting to Rs.1,415.88 million.
(c)
PIG IRON
The Blast Furnace
with a total capacity of 225,000 TPA is currently producing Hot Metal which is
poured into moulds to produce Pig Iron. Hot Metal / Pig Iron was partly
consumed for making Special Steel and partly sold to various Steel and foundry
customers in eastern and northern India.
The total hot
metal production during 2011-12 was 84,454 MT as compared to 46,233 MT of hot
metal in 2010-11.
Pig iron sales
contributed to 13% of the total revenues of the Company during the year,
amounting to Rs.1,826.19 million.
(d)
SPONGE IRON
The Sponge Iron
Plant having capacity of 300,000 TPA produced 157,356 MT during 2011-12 of
Sponge Iron as against 134,538 MT of Sponge Iron during 2010-11. It has
contributed 20% of the total revenues amounting to Rs.2,890.01 million.
The main raw
materials for Sponge Iron Plant are Iron Ore and Thermal Coal. Iron Ore is
procured mainly from OMC and JSPL. Thermal Coal is procured from Mahanadi
Coalfields Limited and also imported from South Africa.
(e)
POWER
The Power Plant
produced 435 million KWH of power during the year 2011-12 as against 226
million KWH produced during 2010-11. The Power produced was mainly used
captively.
(f)
SPECIAL STEEL
The Steel
production was 45,772 MT during the year 2011-12.
PROJECT OVERVIEW
The availability
and pricing of raw materials mainly Iron Ore has been a major challenge for the
Company and has impacted the Special Steel operations. In view of the same, the
Company has decided to set up an Iron Ore Sinter Plant in order to hedge the
iron ore procurement as it is currently buying only sized iron ore. This would
also ensure continuous smooth running of the Blast Furnace and consequently the
Special Steel Plant. The Iron Ore Sinter Plant would enhance the profitability of
the Blast Furnace and would reduce the cost of raw material and improve the
productivity of the Steel making facilities.
OUTLOOK
India has immense
potential for creating new steel capacity. Indian per capita steel consumption
is presently very low compared to world average which further re-confirms the
opportunities for steel demand to continue accelerating in the times ahead. The
Company with a well diversified product portfolio is well poised to take
advantage of the growth in the demand for Special Steel products, Coke and
Ferro Chrome.
CONTINGENT LIABILITIES (AS ON 31.03.2012)
(a)
Claim against the Company not acknowledged as debt:
(i)
In respect of a charter party dispute between VISA
Comtrade (Asia) Limited (the “Charterer”) and Transfield Shipping Inc., Panama,
(the “Owner of the vessel- Prabhu Gopal”) the said Owner of the vessel has
filed a civil suit in the Hon’ble Calcutta High Court against the Company and
the charterer and claimed the relief for a decree for US$ 0.30 million to be
expressed in Indian Currency at such rate of exchange and / or on such terms as
the Court may deem fit and proper, Injunction, Costs or other reliefs. The
Company has not accepted the claim as it was not a party to the said Agreement
and hence cannot be made a party to this suit. The Hon’ble Calcutta High Court
passed interim order dated 11 May 2005 and 20 June 2005, restraining the
Company and the Charterer from withdrawing any amount from a specified bank
account without leaving a balance for a sum of Rs.12.50 million, which has been
set aside by the bank from the cash credit limit of the Company. The company
has been legally advised that the above interim order has been expired due to
efflux of time and has not been extended by the Hon’ble Calcutta High Court.
(ii)
Applications have been filed by the legal heirs of
a deceased employee of the Company, who died in a road accident while
travelling in the Company’s vehicle for his personal work, claiming a
compensation of Rs.6.10 million and interest @ 18% per annum. The Company has
contested the claim, which is currently pending before the Motor Accident
Claims Tribunal, Bhubaneswar.
Application filed by the legal heirs of the sister of the deceased
employee who died with him, has been disposed off by the Aditional District
Judge Cum 3rd Motor Accident Claims Tribunal, Rourkela on 25 November, 2011
directing the New India Assurance Company Limited to pay Rs.0.18 million with
interest 9% p.a. from the date of application till the date of payment. An
appeal has been filed by the New India Assurance Company Limited before the
Hon’ble High Court of Orissa in May 2012 against such order.
(Rs. In Millions)
|
Particulars |
31.03.2012 |
31.03.2011 |
|
(b) Guarantees |
|
|
|
(i) Bank
Guarantee |
56.770 |
56.770 |
|
(ii) Corporate
Guarantee issued on behalf of Subsidiary Company |
720.000 |
0.000 |
|
(c) Other money
for which company is contingently liable |
|
|
|
(i) Income Tax
matter on Appeal |
63.630 |
63.630 |
|
(ii) Sales Tax
matter on Appeal |
47.220 |
74.240 |
|
(iii) Value
Added Tax matter on Appeal |
0.000 |
20.370 |
|
(iv) Entry Tax
matters |
178.420 |
170.010 |
|
(v) Customs Duty
matter on Imported Goods |
34.860 |
34.860 |
FIXED ASSETS
·
Land
·
Building
·
Plant and Machinery
·
Furniture and Fixtures
·
Vehicles
·
Computer Software
WEB SITE DETAILS
PROFILE
Subject is a
subsidiary of VISA Infrastructure Limited. The Group is a minerals, metals and
energy conglomerate with business interests in Steel, Power, Cement,
International Trading and Urban Infrastructure etc.
Subject is a
leading player in the Indian Special Steel industry and has its Registered
office in Bhubaneswar; Corporate office in Kolkata and Branch offices across
India. The Company has a strong backing of experienced Promoters, reputed Board
of Directors and qualified team of professionals. A listed Company, VISA
Steel’s shares are traded on the BSE and NSE
The Company is
setting up an integrated 1 million TPA Special and Stainless Steel Plant at
Kalinganagar Industrial Complex, Odisha. The first phase of 0.5 million TPA
Special Steel Long Product Plant with 75 MW Captive Power Plant is fully
operational. The facilities include a 0.4 million TPA Coke Oven Plant, 0.225
million TPA Pig Iron Plant, 0.3 million TPA Sponge Iron Plant, 0.05 million TPA
Ferro Chrome Plant, 75 MW Captive Power Plant, 0.5 million TPA Steel Melt Shop
(with EAF, LRF and VD) and 0.5 million TPA Rolling Mill (Bar and Wire Rod
Mill). In due course capacity of this plant is planned to be doubled to 1
million TPA.
The Company plans
to integrate backwards to the mining of iron ore, chrome ore and coal. Captive
iron ore mining leases in Odisha are presently under the process of allotment
by the Government. A chrome ore deposit in Odisha is being developed through
Ghotaringa Minerals Limited, a subsidiary of the Company. A share of 54 million
tonne out of 640 million tonne steam coal reserve has been allotted to the
company at Patrapara Coal Block in Talcher, Odisha.
Subject also plans
to set up a fully integrated 2.5 million TPA Steel Plant with 500 MW Captive
Power Plant at Raigarh in Chhattisgarh.
The Company also
plans to set up a 1.25 million TPA Steel Plant, 100,000 TPA Manganese Alloy
Plant and 300 MW Captive Power Plant in Madhya Pradesh.
The Company plans
to integrate backwards to the mining of Iron Ore in Chhattisgarh and Manganese
Ore in MP for which grant of captive lease is presently under the process of
allotment by the Government.
BOARD OF DIRECTORS
VISHAMBHAR SARAN-CHAIRMAN
Mr. Saran has experience
of almost 43 years in the iron and steel industry, with over 25 years with Tata
Steel in the areas of development and operations of mines, mineral
beneficiation plants and ferro alloy plants, port operations and international
trading of raw materials for the iron and steel industry. A mining engineer
from BHU, he rose to the level of Director (Raw Materials) in Tata Steel before
taking over as Chairman of the VISA Group in 1994. In a short span of time, he
built the VISA Group into a minerals and metals conglomerate with a strong
global presence in Australia, China, India, Indonesia, Singapore, South Africa
and Switzerland. He is the Honorary Consul of Bulgaria for Eastern India.
MAYA SHANKER VERMA- CHAIRMAN, FINANCE AND BANKING COMMITTEE
Mr. Verma is a
career banker with a multilevel and wide ranging experience of over 51 years,
encompassing an understanding of the commercial, developmental and investment
banking as well as asset management and capital market operations.
A Master of Arts
and Certified Associate of the Indian Institute of Bankers, Mr. Verma held
senior-most and critical positions in India’s financial system and regulatory
regimes like Chairman, State Bank of India, IDBI Bank and Telecom Regulatory
Authority of India.
SHIV DAYAL KAPOOR-CHAIRMAN, AUDIT COMMITTEE
Mr. Kapoor has
over 43 years of rich experience in the minerals and metals industry. He is the
former Chairman of MMTC Limited and Neelachal Ispat Nigam Limited and had been
on the Board of many renowned Public Sector Enterprises.
A B.Sc. in
Metallurgical Engineering from BHU and an MBA from the University of Leeds, UK,
he is a recipient of the Best Chief Executive Gold Award – Rajiv Ratna National
Award 2005 and Top CEO of the year Award 2000 – Indian Institute of Marketing
and Management, amongst others.
DEBI PRASAD BAGCHI-CHAIRMAN, SELECTION COMMITTEE
Mr. Bagchi brings
to the Board his deep knowledge of the administrative services and the State of
Odisha, especially in the steel and mining sector. He has held prestigious
positions of authority like Additional Secretary, Commerce – Government of
India; Secretary, Ministry of Small Scale Industry – Government of India; Chief
Secretary – Government of Odisha, etc.
A Master of Arts
in Economics and an M. Phil in Public Administration, Mr. Bagchi was also the
Chairman cum Managing Director of Orissa Lift Irrigation Corporation and
Managing Director of Orissa Mining Corporation Limited.
PRADIP KUMAR KHAITAN-CHAIRMAN, REMUNERATION COMMITTEE
Mr. Khaitan is a legal
luminary and has extensive experience in the fields of commercial and corporate
laws, tax laws, arbitration, foreign collaborations, mergers and acquisitions
and corporate restructuring.
Mr. Khaitan is a
Bachelor of Commerce, an LLB and an Attorneyat-Law (Bells Chamber, Gold
Medalist). He is the Senior Partner of Khaitan and Company, a leading Indian
law firm and also member of the Bar Council of India, the Bar Council of West
Bengal and the Indian Council of Arbitration.
SHANTI NARAIN-CHAIRMAN, SHARE TRANSFER AND INVESTOR GRIEVANCE COMMITTEE
Mr. Narain brings
with him his expertise in strategic management transport systems, especially
the Railways, in the areas of planning, marketing, monitoring and control of
operations and commercial activities and development of transport
infrastructure.
He holds a Masters
degree in Science (Mathematics) and had been the Member, (Traffic) Railway
Board for 4 years till February 2001. He is a member of several committees set
up by the Government of India and professional societies.
VISHAL AGARWAL-MANAGING DIRECTOR
Mr. Agarwal has
over 15 years experience in the iron and steel industry with hands on
experience of setting up Greenfield projects, having successfully established
the plants at Golagaon and Kalinganagar. He is responsible for overall
management of operations and projects and is the driving force behind many of
the Company’s strategy, finance, marketing and human resource initiatives.
He holds a
Bachelors degree in Economics from the London School of Economics and a Masters
degree in Economics for Development from Oxford University. He is a Committee
Member of the CII - Eastern Region Council and Indian Chamber of Commerce.
PRABIR RAMENDRALAL BOSE-DEPUTY MANAGING DIRECTOR
Mr. Bose is a
Bachelor in Science (Chemical Engineering) from Regional Engineering College,
Rourkela. He has 35 years of rich experience in steel industry with previous
assignments at Rourkela Steel Plant, SAIL and Southern Iron and Steel Company
Limited, in Coke Oven operations and construction of heat recovery type
stamp-charged Coke
Oven battery, amongst others.
Mr. Bose has been
associated with the Company since October 2007 and is presently responsible for
the entire operations and projects at the Kalinganagar Plant and Golagaon plant
in Odisha. Mr. Bose has also been appointed as the Managing Director of VISA
BAO Limited, subsidiary company with effect from 1 April 2012.
NEWS
PRESS RELEASE
VISA STEEL REVENUES GREW 62.30%
IN Q1 FY’11-12 TO RS. 3670.000 MILLIONS
26th July
2011
VISA
Steel, a part of the Rs. 50000.000 Millions VISA Group, has set up an
integrated Special Steel Plant at Kalinganagar Industrial Complex in Orissa and
is currently a producer of LAM Coke, Ferro Chrome, Pig Iron, Sponge Iron, Power
and Special Steel. The VISA Group has business interests in steel, power,
international trading, shipping and mining.
The
Company announced its first quarter (Q1) unaudited financial results for
FY’2011-12 after its Board Meeting held at Bhubaneswar on 26th July 2011.
During
Q1 of FY’2011-12, VISA Steel registered a robust financial performance with a
revenue growth of 62.30% to Rs. 3672.000 Millions, an increase in EBIDTA by
10.60% to Rs. 448.500 Millions, and increase in PAT by 33.07% to Rs. 101.400
Millions.
Financial
Performance
(Rs. In Millions)
|
1st
Quarter |
Revenue |
EBIDTA |
PBT |
PAT |
|
Q1 FY’10-11 |
2262.500 |
405.500 |
116.100 |
76.200 |
|
Q1 FY’11-12 |
3672.000 |
448.500 |
145.800 |
101.400 |
|
% Growth |
62.30% |
10.60% |
25.58% |
33.07% |
Operations Performance
The production figures of Q1 FY’11-12 versus Q1
FY’10-11 were as follows:-
|
Products |
Production |
|
|
|
Q1 2011-12 |
Q1 2010-11 |
|
Coke (in MT) |
94128 |
77037 |
|
Ferro Chrome (in MT) |
4963 |
10934 |
|
Hot Metal (in MT) |
34992 |
0 |
|
Sponge Iron (in MT) |
37571 |
37938 |
|
Steel (in MT) |
941 |
0 |
|
Power (in MT Units) |
100.71 |
50.83 |
Commenting on the performance for Q1 FY’2011-12, Mr. Vishal
Agarwal, Managing Director, VISA Steel, said -
“Our financial performance during
Q1 FY’2011-12 registered a sharp growth in sales revenue due to increase in
price realization and production volumes. Operating margins have been lower due
to higher cost of raw material such as Coking Coal, Iron Ore and Chrome Ore.
VISA Steel has completed the full
integration of the manufacturing facilities for 0.5 million TPA Special Steel
Plant and has emerged among the leading special steel players in the Country.
As the production volumes ramp up over the coming quarters, we expect revenues
and profitability to improve.
VISA BAO Limited, a Joint Venture
between VISA Steel and Baosteel, which is setting up a 100,000 TPA Ferro Chrome
Plant at Kalinganagar in Orissa has made significant progress towards
implementation of the project and expects to commission the Plant in phases
from March 2012 onwards.”
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No 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. 55.34 |
|
|
1 |
Rs. 86.45 |
|
Euro |
1 |
Rs. 68.04 |
INFORMATION DETAILS
|
Report Prepared
by : |
DPT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
3 |
|
--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 |
|
32 |
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 |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.