MIRA INFORM REPORT
|
Report Date : |
30.08.2012 |
IDENTIFICATION DETAILS
|
Name : |
MAHINDRA UGINE STEEL COMPANY LIMITED |
|
|
|
|
Registered
Office : |
74, Ganesh Apartment, 7th Floor, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2012 |
|
|
|
|
Date of
Incorporation : |
19.12.1962 |
|
|
|
|
Com. Reg. No.: |
11-012542 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs. 324.825 millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L99999MH1962PLC012542 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
MUMM20210B |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACM4998G |
|
|
|
|
Legal Form : |
A Public Limited Liability company. The company’s Share are Listed on
the Stock Exchange. |
|
|
|
|
Line of Business
: |
Manufacturers of Alloy Steel |
|
|
|
|
No. of Employees
: |
1719 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (49) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 8000000 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Usually correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a subsidiary of Mahindra and Mahindra limited. It has
achieved better sales and profits during 2012. Directors are reported to be well experienced and Knowledgeable. Trade
relations are reported as trustworthy. Business is active. Payments are
reported to be usually correct and as per commitments. The company can be considered good for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ 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 : |
74, Ganesh Apartment, 7th Floor, |
|
Tel. No.: |
91-22-24444287 |
|
Telefax No.: |
91-22-24458196 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Factory : |
Steel
and Rings Jagdishnagar, Khopoli - 410 216, District Raigad, Tel. No. :
91-2192-263318 / 263347 / 262487 / 262488 / 263589 Fax No. :
91-2192-263073 / 263076 / 268502 Stampings ·
371,
Tel. No. : 91-2114-255289 / 294
Fax No. : 91-2114-255293 ·
Plot No. D-2, MIDC, Ambad, Nashik- 422 010,
Tel. No. : 91-253-6613400 / 6613406 Fax No. : 91-253-6613409 ·
Tel No. : 91-5944-280921 ·
Plot No.2, Sector -11, Tel No.: 05944-250851 |
|
|
|
DIRECTORS
As on 31.03.2012
|
Name : |
Mr. Keshub Mahindra |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Anand G. Mahindra |
|
Designation : |
Vice Chairman |
|
|
|
|
Name : |
Mr. Udya Gupta |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Hemant Luthra |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. R. R. Krishnan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Harsh Kumar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. S. Ravi |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Manoj Kumar Maheshwari |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sanjiv Kapoor |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Nikhilesh Panchal |
|
Designation : |
Nominee of LIC |
|
|
|
|
Name : |
Mr. Daljit Mirchandani |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Nikhilesh Panchal |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Ajay Kadhao |
|
Designation : |
Company Secretary |
|
E-mail : |
relationinvestors@mahindra.com |
|
|
|
|
Name : |
Mr. Arjit Das |
|
Designation : |
Chief Executive Officer – Stampings |
|
|
|
|
Name : |
Mr. Partha Sarathi Roy |
|
Designation : |
Chief Finance Officer |
|
|
|
|
Audit Committee: |
·
Mr. Daljit
Mirchandani ·
Mr. R R Kirshnan ·
Mr. ·
Mr. Manoj Kumar
Maheshwari ·
Mr. Sanjiv Kapoor ·
Nikhilesh Panchal |
|
|
|
|
Nomination and Remuneration Committee: |
·
Mr. Hemand Luthra ·
Mr. Sanjiv Kapoor ·
Mr. S. Ravi ·
Mr. Daljit
Mirchandani |
|
|
|
|
Investor’s Grievance Committee: |
·
Mr. Hemant Lutrha ·
Mr. S Ravi ·
Mr. Uday Gupta |
SHAREHOLDING PATTERN
As on 30.06.2012
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
18019489 |
55.47 |
|
|
18019489 |
55.47 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
18019489 |
55.47 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
9716 |
0.03 |
|
|
910 |
0.00 |
|
Insurance Companies |
1539159 |
4.74 |
|
Foreign Institutional
Investors |
18450 |
0.06 |
|
|
1568235 |
4.83 |
|
|
|
|
|
|
1189615 |
3.66 |
|
|
|
|
|
|
7320537 |
22.54 |
|
|
4179135 |
12.87 |
|
|
205518 |
0.63 |
|
Non Resident Indians |
204287 |
0.63 |
|
Trusts |
231 |
0.00 |
|
Overseas Corporation
Bodies |
1000 |
0.00 |
|
|
12894805 |
39.70 |
|
Total Public shareholding (B) |
14463040 |
44.53 |
|
Total (A)+(B) |
32482529 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
0 |
0.00 |
|
(1) Promoter and Promoter
Group |
0 |
0.00 |
|
(2) Public |
0 |
0.00 |
|
Sub Total |
0 |
0.00 |
|
Total (A)+(B)+(C) |
32482529 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers of Alloy Steel |
||||||||||
|
|
|
||||||||||
|
Products : |
·
Alloy, Tool and Die Steels ·
Plastic Mould Steels ·
Engineering Alloy C ·
Constructional Steels ·
Ball Bearing Steels ·
Air Craft Quality Steels ·
Offshore Oil Field Steels ·
Austenitic / Ferritic / Martensitic / Duplex /
Precipitation Hardening Stainless Steels ·
Case Carburising Steels ·
Nitriding Steels ·
Boron Steels ·
Automotive Valve Steels |
PRODUCTION STATUS(AS ON 31.03.2011)
|
Particulars |
Unit |
Licensed Capacity Per Annum |
Installed Capacity Per Annum |
Actual Production |
|
|
|
|
|
|
|
Tool, alloy and Special steel |
M/T |
180000 |
180000 |
126232 |
|
Pressed Sheet metal components and assemblies |
M/T |
66400 |
66400 |
55275 |
GENERAL INFORMATION
|
No. of Employees : |
1719 (Approximately) |
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
|
Bankers : |
·
State Bank of ·
Dena Bank ·
Bank of ·
Bank of ·
ING Vysya Bank Limited ·
Standard Chartered Bank ·
DBS Bank Limited ·
Yes Bank Limited ·
IDBI Bank Limited |
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Deloitte Haskins and Sells Chartered Accountants |
|
Address : |
Mumbai, |
|
|
|
|
Solicitors : |
Khaitan and Company |
|
|
|
|
Holding Company : |
·
Mahindra and Mahindra Limited |
|
|
|
|
Fellow Subsidiaries : |
·
Mahindra Forgings Limited ·
Mahindra Intertrade Limited ·
Mahindra Navistar Automotives Limited ·
Bristlecone India Limited ·
Mahindra Gujarat Tractors Limited ·
Mahindra logistics Limited ·
Mahindra Gears and Transmission Private Limited ·
Mahindra Vehicle Manufacturers Limited (Formerly
Mahindra Automotive Limited) ·
Mahindra Steel Service Centre Limited ·
Mahindra Automobile Distributors Private. Limited
(Formerly Mahindra Renault Private Limited) ·
Metalcastello S.p.A. ·
Mahindra Holidays and Resorts India Limited ·
Mahindra First Choice Wheels Limited ·
Mahindra Engineering and Chemical Products
Limited ·
Mahindra First Choice Services Limited ·
Mahindra BPO Services Private Limited ·
Mahindra Hinoday Industries Limited |
|
|
·
|
|
Group Companies : |
·
Mahindra Composites Limited ·
Mahindra Sona Limited (Joint Venture of Holding
Company) |
|
|
·
|
|
Subsidiary Company: |
·
Navyug Special Steel Private Limited (from 11th
November, 2011) |
|
|
|
|
Associate Company: |
·
Mahindra Hotels and Resorts Limited |
CAPITAL STRUCTURE
As on 31.03.2012
Authorized Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
119000000 |
Equity Shares |
Rs. 10/- each |
Rs. 1190.000 millions |
|
3100000 |
Redeemable Cumulative Preference shares |
Rs. 100/- each |
Rs. 310.000 millions |
|
|
|
|
|
|
|
TOTAL |
|
Rs. 1500.000
millions |
Issued, Subscribed & Paid-up Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
32482529 |
Equity Shares |
Rs. 10/- each |
Rs. 324.825
millions |
|
|
|
|
|
NOTES:
(a) Reconciliation
of the number of shares outstanding at the beginning and at the end of the
year:
There is no movement in the share capital
of the Company during the year.
(b) Terms/rights and
restrictions attached to equity shares:
The Company has only one class of equity
shares having a face value of Rs.10 per share. The rights of the equity
shareholders rank pari-passu for all matters, including dividend and each
shareholder is entitled to one vote per share. In the event of liquidation of
the Company, the holders of equity shares will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held by the
shareholders.
(c) Shares held by
the ultimate holding Company:
16,466,789 equity shares (2010-11 -
16,466,789 equity shares) are held by Mahindra & Mahindra Limited (M
&
M), the holding company.
(d) Shares held by
each shareholder holding more than 5% shares, specifying the number of shares
held:
(Rs. in millions)
|
|
31.03.2012 |
|
Mahindra &
Mahindra Ltd. |
|
|
- Number of
shares held |
16,466,789 |
|
- Percentage
holding |
50.69 |
|
|
|
|
Girdharilal
Agrawal |
|
|
- Number of
shares held |
1,921,452 |
|
- Percentage
holding |
5.92 |
|
|
|
(e) Shares
reserved for issue under ESOP scheme:
|
|
31.03.2012 |
|
Number of shares
reserved for ESOP scheme |
712,000 |
|
|
|
|
Number of shares
vested but not exercised |
712,000 |
|
|
|
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 |
324.800 |
324.800 |
324.800 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Employees Stock Options Outstanding |
0.000 |
12.600 |
13.000 |
|
|
4] Reserves & Surplus |
1696.300 |
1314.700 |
1374.300 |
|
|
5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
|
2021.100 |
1652.100 |
1712.100 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
1261.100 |
1670.400 |
2071.300 |
|
|
2] Unsecured Loans |
1116.500 |
1029.200 |
1328.400 |
|
|
TOTAL BORROWING |
2377.600 |
2699.600 |
3399.700 |
|
|
DEFERRED TAX LIABILITIES |
230.000 |
65.200 |
98.500 |
|
|
|
|
|
|
|
|
TOTAL |
4628.700 |
4416.900 |
5210.300 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3186.600 |
2867.700 |
3046.300 |
|
|
Capital work-in-progress |
64.300 |
141.600 |
14.700 |
|
|
|
|
|
|
|
|
INVESTMENT |
141.000 |
140.900 |
140.900 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1724.700
|
1631.500
|
1540.800
|
|
|
Sundry Debtors |
2896.500
|
2659.200
|
2319.500
|
|
|
Cash & Bank Balances |
30.000
|
19.200
|
50.400
|
|
|
Other Current Assets |
10.200
|
8.900
|
0.000
|
|
|
Loans & Advances |
671.000
|
568.100
|
478.500
|
|
Total
Current Assets |
5332.400
|
4886.900 |
4389.200 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
2950.500
|
2573.300
|
1116.100
|
|
|
Other Current Liabilities |
925.800
|
950.600
|
1166.500
|
|
|
Provisions |
219.300
|
96.300
|
98.200
|
|
Total
Current Liabilities |
4095.600
|
3620.200
|
2380.800 |
|
|
Net Current Assets |
1236.800
|
1266.700
|
2008.400 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
4628.700 |
4416.900 |
5210.300 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
7032.600 |
5537.900 |
10878.800 |
|
|
|
Other Income |
6.600 |
12.000 |
14.600 |
|
|
|
TOTAL (A) |
7039.200 |
5549.900 |
10893.400 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Manufacturing and other Expenses |
0.000 |
0.000 |
10247.900 |
|
|
|
Increase/(Decrease) in Finished Goods |
0.000 |
0.000 |
(157.800) |
|
|
|
Cost of Raw materials and Components
Consumed |
5275.200 |
4243.300 |
0.000 |
|
|
|
Changes in inventories of finished goods and work-in-progress |
2.200 |
(25.300) |
0.000 |
|
|
|
Employee benefit expenses |
577.600 |
464.600 |
0.000 |
|
|
|
Other Expenses |
494.400 |
421.900 |
0.000 |
|
|
|
TOTAL (B) |
6349.400 |
5104.500 |
10090.100 |
|
|
|
|
|
|
|
|
Less |
PROFIT/
(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
689.800 |
445.400 |
803.300 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES/ INTEREST (D) |
44.000 |
49.100 |
408.300 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)
(E) |
645.800 |
396.300 |
395.000 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
118.200 |
130.100 |
308.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
EXCEPTIONAL ITEM AND TAX |
527.600 |
266.200 |
86.300 |
|
|
|
|
|
|
|
|
|
Add |
Exceptional item – profit on sale of land |
885.700 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
BEFORE TAX (E-F) (G) |
1413.300 |
266.200 |
86.300 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
1044.400 |
325.900 |
39.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
AFTER TAX (G-H) (I) |
368.900 |
(59.700) |
46.700 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
402.900 |
462.500 |
453.800 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Dividend |
0.000 |
0.000 |
32.500 |
|
|
|
Tax on Dividend |
0.000 |
(0.100) |
5.500 |
|
|
BALANCE CARRIED
TO THE B/S |
402.900 |
402.900 |
462.500 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
391.100 |
269.100 |
63.700 |
|
|
|
Freight and insurance |
8.300 |
6.200 |
1.800 |
|
|
TOTAL EARNINGS |
399.400 |
275.300 |
65.500 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
2469.700 |
1781.400 |
1437.900 |
|
|
|
Stores & Spares |
113.200 |
97.000 |
88.000 |
|
|
|
Capital Goods |
0.100 |
3.500 |
0.000 |
|
|
TOTAL IMPORTS |
2583.000 |
1881.900 |
1525.900 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(loss) Per Share (Rs.) |
11.36 |
(1.84) |
1.44 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2012 |
|
|
1st Quarter |
|
Net Sales |
3847.860 |
|
Total Expenditure |
3689.580 |
|
PBIDT (Excl OI) |
158.280 |
|
Other Income |
3.960 |
|
Operating Profit |
162.240 |
|
Interest |
154.100 |
|
Exceptional Items |
-475.000 |
|
PBDT |
-466.860 |
|
Depreciation |
85.640 |
|
Profit Before Tax |
-552.500 |
|
Tax |
-167.690 |
|
Provisions and contingencies |
0.000 |
|
Profit After Tax |
-384.810 |
|
Extraordinary Items |
0.000 |
|
Prior Period Expenses |
0.000 |
|
Other Adjustments |
0.000 |
|
Net Profit |
-384.810 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
5.24
|
(1.07) |
0.43
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
20.09
|
4.80 |
0.79
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
16.58
|
3.43 |
1.16
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.69
|
0.16 |
0.05
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
3.20
|
3.82 |
3.38
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.30
|
1.34 |
1.84
|
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 |
Yes |
|
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) |
No |
|
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 |
No |
PERFORMANCE
The growth of the Indian
economy in the financial year was slower at around 6.5% as compared to the
growth of around 8.4% recorded in the previous financial year. The domestic
economy faced major challenges of rising inflationary pressures and constrained
state of global economy, particularly in the western countries.
The slowdown in
domestic economy, mainly on account of high inflationary pressures, hikes in
borrowing rates and high cost of inputs, has impacted the domestic steel consumption
during the year. The higher input costs of metallic, power & furnace oil
coupled with adverse forex variation could not be recovered from the major
customer segments in the Steel & Ring Business due to competitive pressure
thereby the performance as a whole was adversely impacted. In spite of gain in
operating efficiencies in terms of quality improvement, yield and specific
energy consumption, the margin was under acute pressure. Fixed cost recorded
significant rise due to increased water levy, legal costs and forex loss
besides increase in employment cost. However, the Stampings business posted
significant performance improvement due to buoyant domestic automobile demand,
higher capacity utilization, improved operating efficiencies and return of the
capital invested.
During the year
the Company suffered a loss of Rs.358.500 millions, before exceptional item and
taxation as compared to loss of Rs. 96.000 millions suffered in the
corresponding previous year. The gross income of the Company grew by around 15%
from Rs.13429.100 millions to Rs.15415.200 millions. The earnings before other
Income, Interest and depreciation for the year was Rs.480.800 millions as
compared to Rs.618.500 millions in the previous year. During the year the
Company, in order to monetize the unutilised assets for growth of the company,
sold excess land of 65 acres situated at Stampings division at Kanhe. On
account of the sale of the said land, the Company has posted a net profit for
the year.
STEEL & RING
BUSINESSES:
During the year,
the Company sold 1,19,370 tonnes of alloy steel products as compared to
1,23,447 tonnes sold in the previous year. The Company registered sales revenue
of Alloy and Steel products aggregating Rs.7833.600 millions for the year as
compared to Rs. 7606.700 millions of the previous year posting a growth of
2.98%. The rise in sales revenue is largely attributable to enriched product
mix in the financial year 2011-12 as compared to that of the previous financial
year. The operating efficiencies improved during the financial year.
The Company also
registered sales of 3714 tonnes of Ring (Bearing Races) products for a value of
Rs.44.61 millions during the year as
compared to sales of 2785 tonnes for a value of Rs. 243.200 millions recorded
in the previous year. Exports also improved during the year.
During the year ,
the Steel Division faced challenges of spirally input cost and increased
competitive pressure in special alloy steel market. The benefit of lower power
cost from Wardha Power Company Limited, (WPCL) which was expected in second
half of financial year (FY) 2011-12, could not materialize pending regulatory
approvals. However, WPCL has got all approvals and the Company is expected to
receive the power at lower cost from WPCL in 1st half of FY 2012-13. Management
will continue to undertake initiatives for increasing margin by way of further
improvements in operating efficiencies and increase coverage of metallic
surcharge mechanism with customers for mitigating input price volatility. The
Company also foresees significant increase in sales mainly in the value added
segments as process/quality audits by many global MNCs are expected to fructify
into sales in the near future.
The Board has at
its meeting held on 11th November, 2011 approved the proposal of the transfer
of the Steel (including Ring business) Division by way of Slump Sale on a going
concern basis to the wholly owned subsidiary of the Company i.e Navyug Special
Steel Private Limited (Navyug Steel), subject to necessary approval as may be
required. The detail of this matter is mentioned elsewhere below in this
Report.
STAMPINGS
BUSINESS:
During the year ,
the sales volume of the Stampings business of the Company grew from 55,364 MT
(previous year) to 63,953 MT registering a growth of around 16%. The sales
value for the Stampings business for the year
was Rs. 7032.600 millions as compared to Rs. 5537.900 millions recorded
in the previous year, registering a growth of around 27%. The robust growth witnessed
by the Stampings business is on account of various initiatives taken by the
management to expand its business and by exploiting the growth in the
automobile industry.
The Stampings
business is expected to grow at a firm and healthy rate, as it has product
orders in the pipeline for new models of Mahindra & Mahindra Limited and
Tata Motors Ltd. The Pantnagar Project has started operations in the financial
year 2011-12, which will further strengthen the business volumes of the
Stampings Division. The Stampings Division is committed to improve its
performance by improving customer centricity, quality and efficiency. The
Stampings business is exploring opportunities to expand in southern region i.e.
Zahirabad, Dharwad to cater the Origial Equipment Manufacturers (OEMs) present
in that region.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT:
A detailed
analysis of the Company’s performance is mentioned in the Management Discussion
and Analysis Report, which forms part of this Annual Report.
CORPORATE
GOVERNANCE:
The Company is
committed to follow the best of the corporate governance practices and follows
the same while conducting the affairs of the Company. A Report on Corporate
Governance along with a certificate from the Auditors of the Company regarding
the compliance of conditions of Corporate Governance
FINANCE:
During the year ,
liquidity position of the Company was in general satisfactory. The Company
faced inflationary pressure and increase in cost of funds which has impacted
the cost of capital. The Company met its obligations towards capital
expenditure and working capital requirements through its bankers.
ANALYSIS OF STEEL
AND RING (BEARING RACES) BUSINESS SEGMENT
INDUSTRY STRUCTURE
AND DEVELOPMENT
The Indian economy
is estimated to grow at around 6.5% in financial year 2012 as compared to the
GDP growth of around 8.4% recorded in the previous financial year. The Indian
economy is faced with stiff challenges of rising inflationary pressures,
uncertain policy environment and deteriorating global growth conditions even as
the economic fundamentals that will drive long term growth viz. consumer
demand, strong entrepreneurship, and competitiveness in key sectors etc. remain
intact.
The slow space of
growth in domestic economy and the volatile state of global economy has
adversely impacted the domestic steel consumption during the year . The Indian
Economy Survey pointed out a list of bottlenecks responsible for lower steel
consumption, including high inflationary pressure in
The Union Budget
for fiscal 2012-13 has enhanced the basic customs duty on non-alloy,
flat-rolled steel and reduced the duty on imported plant & machinery to
facilitate growth of Indian steel industries. Historically, the automotive and
construction markets have remained the largest consumers of steel, absorbing
more than half of the total steel produced. The initiatives of the government
to push infrastructure and real estate projects by extending certain incentives
are also expected to provide impetus for steel consumption. Further the growth
of Indian automobile market is one of the fastest in the world and is expected
to maintain its growth momentum, an indication positive for the alloy steel
industry.
PERFORMANCE
In the financial
year 2011-12, the Steel and Rings business of the Company recorded a modest
growth in sales revenue by 5.7% on year to year basis. Despite the improvement
in sales, the business suffered operating loss before interest cost of Rs.
380.600 millions in the financial year 2011-12 (as compared to operating profit
(PBIT) of Rs. 19.600 millions recorded in the financial year 2010-11). The
Steel business in the year witnessed
competitive pressure from domestic alloy players which along with spiral in
fixed cost adversely affected the performance of the Company.
The rise in
operating loss is mainly on account of increase in metallic cost, power and
fuel costs which largely remain unrecovered from the customers due to
competitive pressure. The fixed cost of operation increased in the financial
year 2011-12 by 21% as compared to that in the financial year 2010-11 mainly on
account of finance charges including foreign exchange loss, personnel cost and
provision for water charges pertaining to an earlier period. One time non
recurring administrative & legal costs were also incurred in respect of
proposed demerger of the Steel Business.
During the year ,
the sales revenue of the Ring Division recorded a growth of 83% on year to year
basis. The sales revenue for the year
was Rs. 446.100 Millions as compared to previous year revenue of Rs.
243.200 millions. The rise in sales indicates improvement in customer
satisfaction. To further meet customer requirement of machined rings, the
company is in the process of developing and establishing machining capacity
with Vendors. With stronger order book the Ring business is expected to improve
operational performance in the next financial year.
Summarized
operational performance of Steel and Ring business for financial year 2011-12
is given below:
• Sales were
1,23,084 tonnes in financial year 2011-12 as compared to 1,26,232 tonnes
recorded in financial year 2010-11.
• The overall
revenue from steel and rings products was around Rs. 8279.700 millions in the
financial year 2011-12 as compared to around Rs. 7849.900 millions recorded in
financial year 2010-11 registering growth of around 5.48% on year to year
basis.
• Direct exports
increased to 2652 tons valued at around Rs. 400.000 millions in the financial year
2011-12 as compared to export of 2374 tons valued at around Rs. 270.000
millions recorded in the financial year 2010-11, respectively.
• The operating
margin (EBITDA) in the financial year 2011-12 declined to around Rs.(184.400)
millions as compared to around Rs. 204.000 millions recorded in the financial
year 2010-11.
• Average Power cost increased from Rs.
5.63/KWH in financial year 2010-11 to Rs.6.64 /KWH in financial year 2011-12.
• The steep
increase in cost of the furnace oil from Rs. 25,119/- per Kilo Litre (total
cost around Rs. 500.000 millions p.a.) incurred in the previous financial year
to Rs.35,279/- per Kilo Litre (total cost around Rs. 630.000 millions p.a.)
incurred in the financial year , impacted the performance of the Steel business.
• There was
foreign exchange loss of around Rs. 61.700 millions to the Company in the
financial year 2011-12.
• The company has
made a provision of Rs 35.100 millions on account of estimated liability in
water charges litigation.
The benefit in power
cost from Wardha Power Company Limited (WPCL) was expected in the previous
financial year but could not materialise due to delay in regulatory approvals.
WPCL has received all regulatory approvals and the Company expect to receive
the low cost power from WPCL in first quarter of the financial year 2012-13,
which will enable the Steel business to improve its cost of production. The
Company continues to undertake improvement initiatives for reducing costs,
increasing productivity, improving quality, optimizing utilization of resources
and process de-bottlenecking for performance improvement.
OPPORTUNITIES AND
STRATEGIC OUTLOOK
The key elements
of the Company strategy remain unchanged to what was reported last year -
“reboot” (reduce costs), “reinvent” (move up the value chain), and “reignite”
(pursue growth). The Company has made considerable progress towards
implementation of the strategy. Given the harsh environment prevailing in the
last financial year, the steel division continues to focus on reducing costs
and optimizing operations. It is diversifying into high margin products of Oil
& Gas and Mining segment. Likewise, the rings business is focusing on
increase in capacity utilisation, cost improvement in the area of machining and
transportation through the proposed mechanism of
To ensure that the
Company reignites its performance and puts itself back on the path of growth
and profitability, it has entered into a joint venture with M/s Sanyo Special
Steel Co Ltd of Japan (Sanyo), one of the global steel majors and M/s Mitsui
& Co Ltd of Japan, (Mitsui) global steel trader both of whom have agreed to
invest in equity of Navyug Special Steel Private Limited, subject to certain
terms, conditions and approvals. As discussed in the Directors’ Report for
financial year 2011-12, the Steel (including Ring) Business is proposed to be
transferred/hived off on a going concern basis to Navyug Special Steel Private
Limited (Navyug Steel) the wholly owned subsidiary of the Company, subject to
statutory and contractual approvals. The Company, Sanyo and Mitsui are expected
to utilize their respective brands, technologies and networks in order to meet
the customers’ needs, of the Steel Business, through the joint venture. The
joint venture is intended to help the Company achieve its goal of operational
excellence, improved productivity and enhancement of both cost and quality to
international standards to enable the Steel Business to achieve its full
business potential.
In view of overall
growth opportunities as discussed above and the proposed joint venture with
Sanyo and Mitsui, the out look for Steel business is promising.
ANALYSIS OF
STAMPINGS BUSINESS SEGMENT
PERFORMANCE
The stampings
business had a strong growth in financial year 2011-12 in line with the growth
of the auto and tractor markets. The performance of the business improved
significantly as it provided economic solutions to its customers and also
increased capacity to meet their needs. In FY 12, the company expanded
capacities at Kanhe, Nashik & Rudrapur and established a new
state-of-theart plant at the Tata Motors Vendor park at Pantnagar. In order to
improve efficiency and meet larger volume requirements, the Kanhe plant
installed automation on its press lines. The company also increased the number
of products which are manufactured via automated press lines.
In financial year
2011-12, the Stampings business achieved the highest ever operating income,
even surpassing the then highest income achieved in financial year 2010-11. The
key highlights are as follows:
•
• Operating Income
increased from Rs. 5537.900 millions in financial year 2010-11 to Rs. 7032.600
millions in financial year 2011-12 posting a growth of 27%.
• Operating margin
before exceptional items (EBIDTA) increased from Rs.438.400 millions in
financial year 2010-11 to Rs. 683.000 millions in financial year 2011-12
posting a growth of around 56%.
CONTINGENT LIABILITIES
NOT PROVIDED FOR IN RESPECT OF:
a) Bills
discounted but not matured Rs. 238.200 Millions (2010-2011: Rs. 253.800
Millions).
- Represents customers’ bills discounted.
b) Excise duty and
Service Tax:
Excise matters for
which the Company is contingently liable amounting Rs. 117.200 Millions
(2010-2011: Rs. 134.600 Millions). This includes:
i) Rs. 52.000
millions (2010-2011: Rs. 5.200 millions) - relating to the method of valuation
of customer processed finished goods for the purpose of discharge of excise
duty, where the customer supplies raw material. This matter has been settled by
Custom, Excise & Service Tax Appellate Tribunal (CESTAT) in favour of the
Company. The Department has gone in further appeal in the Supreme Court.
ii) Rs. Nil (2010-2011:
Rs. 27.700 Millions) - relating to inclusion of scrap credit in the assessable
value for the purpose of payment of Excise Duty. The Supreme Court had remanded
the case back to CESTAT who had decided against the Company. The case was
remanded back to CESTAT which in turn remanded it back to the Commissioner. The
Commissioner had raised a demand of Rs. 13.800 Millions with an equal penalty
amount. The Company had again filed an appeal against the order with CESTAT who
had remanded the case back to adjudicating authority to requantify the demand
for the normal period of limitation. The Company has, based on such Order,
quantified the amount and has deposited the duty with interest during the year.
However, the final Order approving the amount of duty and interest has yet to
be received by the Company.
iii) Rs. 46.500
Millions (2010-2011: Rs. 44.000 Millions) - relating to alleged availment of
Cenvat credit on invoices issued by certain registered dealers without actually
receiving the material covered therein. The commissioner has raised a demand of
Rs. 13.700 Millions with an equal amount of interest and penalty. The Company
has filed an appeal in CESTAT against the said demand.
iv) Rs. 3.900
Millions (2010-2011: Rs. Nil) being matters related to availment of service tax
credit.
v) Rs. 16.300
Millions (2010-2011: Rs. 16.800 Millions) - being other matters.
In respect of (b)
(i) above and other valuation issues, the excise department has continued to issue
show cause cum demand notices for subsequent periods aggregating Rs. 45.300
Millions (2010-2011: Rs. 40.900 Millions).
c) Sales Tax:
Sales Tax matters
for which the Company is contingently liable amounting Rs. 93.100 Millions
(2010-2011: Rs. 90.900 Millions). This includes:
i) a demand of Rs.
85.100 Millions (2010-2011 : Rs. 85.100 Millions) for F.Y. 2006-07 and F.Y.
2007-08 by treating the branch transfer of goods as sales made by the Company
and for non-submission of ‘C’ forms. The amount is inclusive of interest and
penalty. The Company has fi led an appeal in Sales Tax Tribunal against the
said demand.
ii) Other sales
tax matters Rs. 8.000 Millions (2010-2011: Rs. 5.800 Millions).
d) Taxation
demands against which the Company is in appeal Rs. 171.800 Millions (2010-2011:
Rs. 171.800 Millions).
e) Other matter
for which the Company is contingently liable is Rs. 58.14 Millions (2010-2011:
Rs. 17.02 Millions). This represents dispute in rate of water charges,
inclusive of penal charge of Rs. 10.02 Millions (2010-2011: Rs. Nil) and late
fee charge of Rs. 223.000 Millions (2010-2011: Rs. Nil), demanded by the
Irrigation department.
During the year ,
the Hon’ble Court of Alibag district, before whom the appeal was fi led by the
Irrigation Department against the Order of the Court of the Civil Judge, Senior
Division, Panvel, decided the appeal against the Company. Consequently the
Company fi led an appeal before the Hon’ble High Court of Judicature of
Of the above
demand, the Company has paid and charged an amount of Rs. 5.900 Millions and
has made a provision of Rs. 35.100 Millions for the period from July 1991 to
March 2012 based on Company’s assessment of water charges dues after taking
into consideration the legal advice.
f) Other claims
against the Company not acknowledged as debts:
i. Rs. 179.900
Millions (2010-2011: Rs. Nil) inclusive of interest and penalty of Rs. 140.400
Millions (2010 – 2011: Rs. Nil) pertaining to payment of custom duty in respect
of the Value Based Advance Licenses (VBAL) purchased by the Company and used
for import of goods. The export obligation against the above VBAL was already
fulfilled by the seller of the license. The Company appealed against the said
notice with CESTAT who had set aside the impugned order and has remanded the
case back to the commissioner for reconsideration. The commissioner has reconsidered
the case and has raised the demand. The Company will appeal against the same in
CESTAT.
ii. Claim
pertaining to material supply contract Rs. 94.600 Millions (2010-2011: Rs.
92.800 Millions). The matter is under arbitration.
iii. Claims relating to lease rentals Rs. 9.500 Millions (2010-2011: Rs.
8.700 Crore).
STATEMENT OF STANDALINE FINANCIAL RESULTSFOR THE QUARTER ENDED JUNE 30,
2012
(Rs. in millions)
|
Particulars |
Quarter ended (30.06.2012) |
|
|
Unaudited |
|
1. Income
from operations |
3956.740 |
|
Less: Excise Duty |
401.849 |
|
(a) Net sales/income from operations |
3554.891 |
|
(b) Other operating income |
292.968 |
|
Total income from operations (net) |
3847.859 |
|
2. Expenditure |
|
|
(a) Cost of materials consumed |
2752.437 |
|
(b) Changes in inventories of finished goods, work-in progress and
stock-in-trade |
(262.989) |
|
(c) Employee benefits expense |
270.116 |
|
(d) Depreciation and amortization
expense |
85.636 |
|
(e) Power and Fuel |
516.906 |
|
(f) Stores and Packaging material
Consumed |
182.408 |
|
(f) Other expenses |
230.686 |
|
Total expenses |
3775.200 |
|
3. Profit from
Operations before Other income, finance costs and Exceptional Items (1-2) |
72.659 |
|
4. Other Income |
3.958 |
|
5. Profit from
ordinary activities before Finance costs and Exceptional Items (3+4) |
76.815 |
|
6. Finance costs |
154.105 |
|
7. Profit from
ordinary activities after Finance costs but before exceptional items (5-6) |
(77.490) |
|
8.Exceptional Items |
- |
|
a. Profit on |
(475.000) |
|
b. Provision on
estimated loss that may arise on eventual transfer of steel business |
(552.490) |
|
9. Profit (+)/ Loss (-) from Ordinary Activities before
tax (7+8) |
8.354 |
|
10. Tax expense |
(176.036) |
|
a. Current Tax
Charge / (Credit) |
- |
|
b. Deferred Tax
Charge / (Credit) [including credit of Rs. 138.856 millions on account of
transfer of steel business] |
(167.682) |
|
c. Prior period tax
charge / (credit) |
(384.808) |
|
11. Net Profit from
ordinary activities after tax (9-10) |
324.825 |
|
12. Paid - Up
equity share capital (Face value of the share Rs. 10/- each) |
|
|
13. Reserves
excluding Revaluation Reserves as per balance sheet of previous accounting
year |
|
|
Earnings per share Basic &
Diluted (Face value Rs.10 each) |
|
|
- Before exceptional items |
(1.10) |
|
- After exceptional items |
(11.85) |
|
PARTICULARS
OF SHAREHOLDING |
|
|
14. Public
shareholding |
|
|
- Number of shares |
14463040 |
|
- Percentage of
shareholding |
44.53 |
|
15. Promoters and
Promoters' Group Shareholding |
|
|
- (a)
Pledged/Encumbered |
|
|
- No. of Shares |
|
|
- Percentage of Shares (as a % of the total
outstanding of Promoters and Promoters' groups) |
- |
|
- Percentage of Shares (as a % of the total
share capital of the Company) |
- |
|
- (b)
Non-Encumbered |
|
|
- No. of Shares |
18019489 |
|
- Percentage of Shares (as a % of the total
outstanding of Promoters and Promoters' groups) |
100.00 |
|
- Percentage of Shares (as a % of the total
share capital of the Company) |
55.47 |
|
Particulars |
Pending at the
beginning of the quarter. |
|
Investor Complaints |
0 |
SEGMENT - WISE REVENUE, RESULTS AND CAPITAL EMPLOYED
(Rs. in millions)
|
Particulars |
Quarter Ended 30.06.2012 |
|
Unaudited |
|
|
|
|
|
Segment Revenue
(Net Sales / Income from Operations) |
|
|
a) Stamping |
1749.161 |
|
b) Steel
(discontinuing Operations) |
2098.698 |
|
Total |
3847.859 |
|
Less: Inter
Segment revenue |
- |
|
Net Sales /
Income from Operations |
3847.869 |
|
|
|
|
Segment Results (Profit(+)/Loss(-)
before finance costs, unalloted expenditure and tax from each segment) |
|
|
a) Stamping |
143.148 |
|
b) Steel
(discontinuing Operations) |
(530.140) |
|
Total |
(386.992) |
|
Less: 1.
Interest |
150.864 |
|
2. Un-allocable Expenditure not
relating to operating activities |
14.634 |
|
Profit(+)/Loss(-)
from ordinary activities before tax |
(552.490) |
|
|
|
|
Capital Employed
(Segment Assets – Segment Liabilities) |
|
|
a) Stamping |
2336.503 |
|
b) Steel
(discontinuing Operations) |
3214.066 |
|
c) Unallocated
Capital |
378.266 |
|
|
|
|
Total |
5928.835 |
NOTE:
Steel segment and
stamping segment comprises of sale of alloy steel and sale and processing of
pressed metal components, respectively.
WEBSITE DETAILS
PROFILE
Mahindra Ugine Steel Company Limited (MUSCO), incorporated on 19th December 1962, is a premier Steel Manufacturer. It is a part of the US $15.4 billion conglomerate Mahindra and Mahindra. It is the most trusted brand in Alloy Steel.
Quality-engineered with a deep understanding of metallurgy is a tradition at
MUSCO. This is manifest in continuous development of materials and
manufacturing methods with a clear understanding of the customer's
requirements. Our quality goals are formulated keeping abreast of new
technologies to serve the changing patterns of the ultimate Consumers'
requirements and meet those precisely & repeatedly to our customer's
satisfaction. This deep understanding renders us capable of imparting our
expertise for application engineering as well. We have well-defined
Quality Policy and Quality Objectives which are followed strictly. MUSCO also
manufactures Pressed Sheet Metal Components and Assemblies and Forged Rings.
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 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.55.66 |
|
|
1 |
Rs.80.09 |
|
Euro |
1 |
Rs.69.91 |
INFORMATION DETAILS
|
Report Prepared
by : |
NID |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--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 |
|
NO |
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
|
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
49 |
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.