MIRA
INFORM REPORT
|
Report Date : |
01.11.2012 |
IDENTIFICATION DETAILS
|
Name : |
RATHI STEEL AND POWER LIMITED (w.e.f. 09.09.2008) |
|
|
|
|
Formerly Known
As : |
RATHI UDYOG LIMITED |
|
|
|
|
Registered
Office : |
24/1A, Mohan Co-Operative Industrial Estates, |
|
|
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|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2012 |
|
|
|
|
Date of
Incorporation : |
17.12.1971 |
|
|
|
|
Com. Reg. No.: |
55-005905 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.313.081 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L27109DL1971PLC005905 |
|
|
|
|
Legal Form : |
A Public Limited Liability company. The company’s Share are Listed on
the Stock Exchange. |
|
|
|
|
Line of Business
: |
Subject is engaged in manufacturing of rebars and wire rods. |
|
|
|
|
No. of Employees
: |
Not Available |
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 7600000 |
|
|
|
|
Status : |
Moderate |
|
|
|
|
Payment Behaviour : |
Slow but correct |
|
|
|
|
Litigation : |
Clear |
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|
|
|
Comments : |
Subject is an established company having moderate track record. There appears
slight fall in the profitability of the company. 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 caution. |
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 |
|
Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including
industrial deregulation, privatization of state-owned enterprises, and reduced
controls on foreign trade and investment, began in the early 1990s and has
served to accelerate the country's growth, which has averaged more than 7% per
year since 1997. India's diverse economy encompasses traditional village
farming, modern agriculture, handicrafts, a wide range of modern industries,
and a multitude of services. Slightly more than half of the work force is in
agriculture, but services are the major source of economic growth, accounting
for more than half of India's output, with only one-third of its labor force.
India has capitalized on its large educated English-speaking population to
become a major exporter of information technology services and software
workers. In 2010, the Indian economy rebounded robustly from the global
financial crisis - in large part because of strong domestic demand - and growth
exceeded 8% year-on-year in real terms. However, India's economic growth in
2011 slowed because of persistently high inflation and interest rates and
little progress on economic reforms. High international crude prices have
exacerbated the government's fuel subsidy expenditures contributing to a higher
fiscal deficit, and a worsening current account deficit. Little economic reform
took place in 2011 largely due to corruption scandals that have slowed legislative
work. India's medium-term growth outlook is positive due to a young population
and corresponding low dependency ratio, healthy savings and investment rates,
and increasing integration into the global economy. India has many long-term
challenges that it has not yet fully addressed, including widespread poverty,
inadequate physical and social infrastructure, limited non-agricultural
employment opportunities, scarce access to quality basic and higher education,
and accommodating rural-to-urban migration.
|
Source
: CIA |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
ICRA |
|
Rating |
Long term Bank Facilities = B |
|
Rating Explanation |
Having high risk of default regarding timely servicing of financial
obligation |
|
Date |
May 2011 |
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 : |
24/1A, Mohan Co-Operative Industrial Estates, Mathura Road, New Delhi
– 110044, India |
|
Tel. No.: |
91-11-40512426 / 28 / 26991060 / 62 |
|
Fax No.: |
91-11-26991061 / 26991063 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office / Factory 1 : |
Industrial Area No. 1 A-3, South of |
|
Tel. No.: |
91-120-2840346 - 350 |
|
Fax No.: |
91-120-2840352 - 353 |
|
|
|
|
Factory 2 : |
Village Potapalli, Sikirdi, P.S.,
Burla, District Sambalpur -
768006 , |
|
Tel. No.: |
91-663-2541170 / 2230495 |
DIRECTORS
As on 31.03.2012
|
Name : |
Mr. Pradeep Kumar Rathi |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Prem Narain Varshney |
|
Designation : |
Whole Time Director |
|
|
|
|
Name : |
Mr. Shree Kumar Daga |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Dwarka Das Lakhotia |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ranjit Khattar |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. N. K. Garg |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.09.2012
|
Category of Shareholder |
No. of Shares |
Percentage of
Holding |
|
A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
8194049 |
26.17 |
|
|
7440213 |
23.76 |
|
|
478652 |
1.53 |
|
|
478652 |
1.53 |
|
|
16112914 |
51.47 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
16112914 |
51.47 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
751245 |
2.40 |
|
|
2185127 |
6.98 |
|
|
2936372 |
9.38 |
|
|
|
|
|
|
3011429 |
9.62 |
|
|
|
|
|
|
6043253 |
19.30 |
|
|
2817567 |
9.00 |
|
|
386576 |
1.23 |
|
|
291567 |
0.93 |
|
|
94959 |
0.30 |
|
|
50 |
0.00 |
|
|
12258825 |
39.16 |
|
Total Public shareholding (B) |
15195197 |
48.53 |
|
Total (A)+(B) |
31308111 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
31308111 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject is engaged in manufacturing of rebars and wire rods. |
|
|
|
|
Products : |
·
TMT Bars ·
Wire Rods |
PRODUCTION STATUS
Installed Capacity
|
Particulars |
Unit |
31.03.2011 |
|
Steel Bars/TMT/Flat/Wire Rod |
MT |
125000 |
|
Steel Ingot/Billet |
MT |
190000 |
|
Sponge Iron |
MT |
150000 |
Actual Production
|
Particulars |
Unit |
31.03.2011 |
|
Steel Bars ( Tor /TMT) |
MT |
101909 |
|
SS Round in coil |
MT |
23772 |
|
MS Billet |
MT |
72955 |
|
SS Billet (including purchases) |
MT |
39895 |
|
SS Flat got rolled from others |
MT |
12248 |
|
Sponge Iron (including purchases) |
MT |
79026 |
GENERAL INFORMATION
|
Customers : |
· Airports Authority of India Limited · Army Welfare Housing Organization · American Embassy · CPWD · Delhi Metro Rail · EIL · EPIL · IOCL Panipat Refinery · IRWO · IFFCO · IMCC · LIC of India · MAP · MES · NBCC · NTPC · NDMC · NHPC · Punjab Police Housing Board · Rajasthan Urban Infrastructure Development Corporation · U. P. Avas Evam Vikas Parishad · U. P. Jal Nigam · U. P. Rajkiya Nirman Nigam · Ahluwalia Contracts · Jyoti Sarup Mittal · Ambience Projects · JP Associates Group · Jaipuria Infrastructure Developers · Gammon India Limited · Unitech · Gannon Dunkerlye and Company Limited · DLF Group · Parsvnath Developers · OMAXE Construction · Ansals · Ranbaxy · Larsen and Turbo Limited · Alfa Buildtech · Hindustan Times · Assotech Realty Limited · SAHARA INDIA · PBA Infrastructure Limited · Pragya Projects Private Limited · MGF Developers Private Limited ·
GMR Infrastructure |
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No. of Employees : |
Not Available |
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Bankers : |
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Facilities : |
(Rs.
In Millions)
|
|||||||||||||||||||||||||||||||||||||||||
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|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
M. Lal and Company Chartered Accountants |
|
Address : |
III-A, Nehru Nagar, Ghaziabad – 201 001, Uttar Pradesh, India |
|
Tel. No.: |
91-120-2717412 / 2722949 |
|
|
|
|
Legal Advisor : |
|
|
Name : |
Mr. Shiv Khurana Advocate |
|
Address : |
F-7, Second Floor, Lajpat Nagar-III, New Delhi- 110024, India |
CAPITAL STRUCTURE
As on 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
50000000 |
Equity Shares |
Rs.10/- each |
Rs.500.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
31308111 |
Equity Shares |
Rs.10/- each |
Rs.313.081
Millions |
|
|
|
|
|
(a) Reconciliation of
Number of Shares
|
Particular |
31.03.2012 |
|
Shares Outstanding as at 1st April 2011/ 1st April 2010 |
31,308.111 |
|
Add: Issued during the year |
- |
|
Shares Outstanding
as at 31st March 2012/ 31st March 2011 |
31,308,111 |
(b) List of
shareholders holding more than 5% of the total number of shares issued by the
Company
|
Name of Shareholder |
As at 31 March 2012 No. of Shares held |
|
Punam Chand Rathi (HUF) |
4670810 (14.92%) |
|
Archit Securities Private Limited |
2824622 (9.02%) |
|
DBG Leasina and Housina Limited |
2552531 (8.15%) |
|
Rathi Electrosteel Limited |
2063060 (6.59%0 |
The Company has issued only one class of equity shares having a par value of Rs.10 per share. Each holder of Equity share is entitled to one vote per share.
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 |
313.081 |
313.081 |
301.556 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1588.863 |
1465.101 |
1307.774 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1901.944 |
1778.182 |
1609.330 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3315.205 |
3232.925 |
3182.228 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
110.823 |
|
|
TOTAL BORROWING |
3315.205 |
3232.925 |
3293.051 |
|
|
DEFERRED TAX LIABILITIES |
3.285 |
25.321 |
74.729 |
|
|
|
|
|
|
|
|
TOTAL |
5220.434 |
5036.428 |
4977.110 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3378.886 |
3380.560 |
3302.132 |
|
|
Capital work-in-progress |
85.253 |
116.614 |
29.067 |
|
|
|
|
|
|
|
|
INVESTMENT |
10.861 |
10.471 |
9.471 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1398.399
|
1238.289 |
1167.521 |
|
|
Sundry Debtors |
1184.140
|
833.930 |
560.192 |
|
|
Cash & Bank Balances |
114.721
|
84.562 |
113.658 |
|
|
Other Current Assets |
16.209
|
17.273 |
0.000 |
|
|
Other Non-Current Assets |
39.833
|
23.229 |
0.000 |
|
|
Loans & Advances |
572.341
|
468.754 |
557.424 |
|
Total
Current Assets |
3325.643
|
2666.037 |
2398.795 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
716.083
|
483.984 |
|
|
|
Other Current Liabilities |
845.081
|
627.611 |
751.366 |
|
|
Provisions |
19.045
|
25.659 |
10.989 |
|
Total
Current Liabilities |
1580.209
|
1137.254 |
762.355 |
|
|
Net Current Assets |
1745.434
|
1528.783 |
1636.440 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5220.434 |
5036.428 |
4977.110 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
9366.584 |
8246.401 |
7789.851 |
|
|
|
Other Income |
11.508 |
19.368 |
12.731 |
|
|
|
TOTAL (A) |
9378.092 |
8265.769 |
7802.582 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials Consumed |
7669.947 |
6736.777 |
|
|
|
|
Changes In Inventories of Finished Goods, Work-In-Progress and Stock-In-Trade |
(139.390) |
(85.329) |
7253.269 |
|
|
|
Employee Benefit Expenses |
130.225 |
132.776 |
|
|
|
|
Other Expenses |
854.784 |
783.867 |
|
|
|
|
Exceptional Items |
(0.079) |
0.000 |
|
|
|
|
TOTAL (B) |
8515.487 |
7568.091 |
7253.269 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
862.605 |
697.678 |
549.313 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
535.306 |
386.754 |
305.727 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
327.299 |
310.924 |
243.586 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
225.573 |
197.380 |
181.548 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
101.726 |
113.544 |
62.038 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
(22.036) |
(26.955) |
18.253 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
123.762 |
140.500 |
43.785 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
NA |
288.651 |
275.854 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
NA |
20.000 |
20.000 |
|
|
|
Dividend |
NA |
9.392 |
9.392 |
|
|
|
Tax on Dividend |
NA |
1.560 |
1.596 |
|
|
BALANCE CARRIED
TO THE B/S |
NA |
398.199 |
288.651 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
520.630 |
277.901 |
107.438 |
|
|
|
Store Purchases |
0.000 |
1.660 |
0.795 |
|
|
|
Capital Goods |
8.989 |
5.309 |
0.219 |
|
|
TOTAL IMPORTS |
529.619 |
284.870 |
108.452 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
3.95 |
4.57 |
1.80 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
|
|
30.06.2012 1St
Quarter |
|
Net Sales |
|
|
2428.240 |
|
Total Expenditure |
|
|
2182.030 |
|
PBIDT (Excl OI) |
|
|
246.210 |
|
Other Income |
|
|
2.940 |
|
Operating Profit |
|
|
249.150 |
|
Interest |
|
|
149.550 |
|
Exceptional Items |
|
|
0.000 |
|
PBDT |
|
|
99.600 |
|
Depreciation |
|
|
59.590 |
|
Profit Before Tax |
|
|
40.010 |
|
Tax |
|
|
0.000 |
|
Provisions and contingencies |
|
|
0.000 |
|
Profit After Tax |
|
|
40.010 |
|
Extraordinary Items |
|
|
0.000 |
|
Prior Period Expenses |
|
|
0.000 |
|
Other Adjustments |
|
|
0.000 |
|
Net Profit |
|
|
40.010 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
1.32
|
1.70 |
0.56 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
1.09
|
1.38 |
0.80 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
1.52
|
1.88 |
1.09 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.05
|
0.06 |
0.04 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.57
|
2.46 |
2.52 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.10
|
2.34 |
3.15 |
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 |
No |
|
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 |
No |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
Yes |
|
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 |
Yes |
PERFORMANCE REVIEW
Net sales for the financial year were Rs. 9366.584 Millions as against 8246.401 Millions for the previous financial year. The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis report.
FUTURE OUTLOOK
The world steel industry is a large one. According to the World Steel Association, world crude steel production was a record 1,527 million tons in 2011. However, despite its size, the steel industry remains relatively fragmented. The industry is highly cyclical and intensely competitive.
In 2011, world steel production is estimated to increase by 7.0% y-o-y, underpinned by growth in China and India. However, the growth of Organisation for Economic Co-operation and Development economies is expected to be stagnant or modest at best. Global steel production is expected to grow by another 7.0% in 2012.
In early 2011, there were major concerns that the rapid growth of China's steel production was putting pressure on international steel markets due to the impact of demand on key raw material inputs. Steel prices rallied in the first half of 2011 due to raw material cost escalation. The cost-push rally is because cost prices have been rising faster than the steel prices, thus squeezing the margins of steel players.
Chinese crude steel production in the first half of 2011 increased about 10% to reach 353 million tonnes and was expected to continue to increase at a moderate pace in the second half of 2011 in response to slower consumption growth in the country.
India represents the new growth frontier for global steelmakers. The Indian economy is better insulated from the global economy than other Asian countries because it does not rely heavily on exports to the developed market. However, in the globalized environment, no economy is completely decoupled from the world economy. In addition, GDP growth in 2010 and 2011 was hampered by the 13 consecutive interest rate hikes aimed at curbing inflation.
In an effort to curb inflation, policy- makers and regulators have adopted policies that slow down the real economic activity in the economy. Also all the macro-economic indicators point out the onset of overall economic slowdown of Indian economy which will have a profound impact on investment, growth of manufacturing and other sectors. Further, the uncertain global economic environment continues to pose serious challenges to the sustained growth of Indian economy.
However, economic fundamentals high savings and investment rates, demography, and a rapidly growing middle class remain strong in India, which will ensure a relatively stable economic performance for the country.
Fitch Ratings says that the outlook for the Indian Steel producers will remain stable in 2012, despite the risk of a slowdown in the growth of domestic steel demand. Fitch believes that demand for steel from automobile, white goods, construction and infrastructure sectors will continue to grow through 2012, albeit at a low rate of 6%-7%.
Steel demand has a high correlation with growth in GDP, which is showing signs of a slowdown. Fitch estimates its real GDP growth projections for India for FY13 at 7.5% due to higher domestic interest rates and a weaker global economy.
Nevertheless, there exists enormous potential in the economy for higher growth of domestic steel demand in medium and long term. In terms of actual steel usage India lags behind other major steel producing countries. In 2010 there per capita consumption of steel was only 51.7 Kgs as against the world average of 202.7 kgs. A massive investment to the tune of $ 1 trillion dollars has been envisaged during the Twelfth five year plan in the infrastructure sector. Besides there is a greater emphasis on the growth of the Manufacturing Sector in the country. This augurs well for expansion of the base of steel consumption in the economy. A rough estimate of incremental demand for steel in the country works out approximately to 40 million tonnes in infrastructure alone. Hence, it is likely to raise intensity of steel consumption in the country measured in terms of steel consumption per unit of Gross Domestic Product (GDP). The National Steel Policy had set a production target 110 million tonnes to be achieved by 2019-20. The Indian steel industry may achieve double digit growth in consumption and surpass this production target by 2016-17 well ahead of the target date.
Government on its part has taken number of initiatives to boost the growth of real estate sector. Some of the measures taken include opening the doors for External Commercial Borrowing ('ECB') for specified low cost affordable housing projects which could potentially provide the much needed liquidity to the housing sector. Further, the interest to be paid on the ECB loan availed from the period July 2012 to June 2015 by the real estate developer is to be subjected to a lower rate of deduction of tax at source. Investment linked deduction is available for low cost affordable housing projects.
You are well aware that the company is into the business of manufacturing of long products of mild steel and stainless steel. While the company's endeavour has always been to maintain its position in long segment, it is also trying to increase its share in the value added products such as long products of special diameter and stainless steel products. During the year the company successfully completed the expansion of capacity of rolling mills at Ghaziabad to 175000 MTPA from 125000 MTPA.
MANAGEMENT DISCUSSION
AND ANALYSIS
FORWARD LOOKING
STATEMENTS
This report contain forward looking statement which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects estimates or other words or similar meaning. All statements that address expectations or projections about the future including but not limited to statement about the company's strategy for growth product development, market position expenditure and financial results are forward looking statement. Forward looking statement is based on certain assumption and expectation of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company's actual results performance or achievements could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend modify or revise any forward looking statement on the basis Of any subsequent developments, information or events
BUSINESS REVIEW AND
OUTLOOK:
In 2011 the world crude steel production reached 1518 million tonnes (mt) and showed a growth of 6.2% over 2010. China remained the world's largest crude steel producer in 2011 (684 mt) followed by Japan (108 mt), the USA (86.4 mt) and India (72.2 mt; prov) at the 4th position (72.2 mt). The World Steel Association has projected that global apparent steel use will increase by 3.6% to 1422 Mt in 2012, following growth of 5.6% in 2011. In 2013, it is forecast that world steel demand will grow further by 4.5% to around 1486 Mt. China's apparent steel use in 2012 and 2013 is expected to increase by 4% in both the years. For India, growth in apparent steel use is expected to grow by 6.9% in 2012 and by 9.4% in 2013. Per capita finished steel consumption in 2011 is estimated at 215 kg for world and 460 kg for China.
The Indian steel industry has entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel. Rapid rise in production has resulted in India becoming the 4th largest producer of crude steel and the largest producer of sponge iron or DRI in the world. As per the report of the Working Group on Steel for the 12th Plan, there exist many factors which carry the potential of raising the per capita steel consumption in the country, currently estimated at 55 kg (provisional). These include among others, an estimated infrastructure investment of nearly a trillion dollars, a projected growth of manufacturing from current 8% to 11-12%, increase in urban population to 600 million by 2030 from the current level of 400 million, emergence of the rural market for steel currently consuming around 10 kg per annum buoyed by projects like Bharat Nirman, Pradhan Mantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among others. At the time of its release, the National Steel Policy 2005 had envisaged steel production to reach 110 million tonnes by 2019-20. However, based on the assessment of the current ongoing projects, both in greenfield and brownfield, the Working Group on Steel for the 12th Plan has projected that the crude steel capacity in the county is likely to be 140 mt by 2016-17 and has the potential to reach 149 mt if all requirements are adequately met. The National Steel Policy 2005 is currently being reviewed keeping in mind the rapid developments in the domestic steel industry (both on the supply and demand sides) as well as the stable growth of the Indian economy since the release of the Policy in 2005.
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 duty of 30% on iron ore fines and lumps in order to control ad-hoc exports of the mineral and conserve it for long term requirement of the domestic steel industry. It has also removed 5% import duty on thermal coal which is also a relief for the Sponge Iron based steel producers.
DISSCUSSION ON FINANCIAL
PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
The overall operational performance of the company has been satisfactory both in terms of sales and profit as well as compared to the figures for previous year Sales for the financial year went up to Rs. 9366.584 Millions (net of excise) from Rs.8246.401 Millions (net of excise) for the previous financial year registering a growth of 13.58 %. EBITDA stood at Rs. 827.600 Millions for the financial year as against Rs. 674.200 Millions for the previous financial year. Finance cost rose significantly on account of hike in the interest rates
FUTURE PLANS:
Ghaziabad Plant:
During the year the company has successfully enhanced the rolling mill capacity from 125,000 TPA to 175,000 TPA.
Looking at the growth potential in the stainless steel segment, the company is making efforts to further increase the capacity of stainless steel products as well as a corresponding increase in the rolling mill capacity upto 200,000 TPA. Alongside, modernization of the wire rod mill with a provision of expanding the product range with downstream finishing facilities is also being considered under the proposed scheme. Broad parameters of the project have been finalized and the work on the same is expected to commence soon subject to financial tie up etc.
Orissa Plant:
The work on the coal mine allotted to the company is under progress. The company is in the process of obtaining approvals for the same from various departments / ministries. The company is also pursuing its case for allotment of iron ore mine on priority.
Once the mines become operational, bottom line of the company will improve.
In pursuit of its continual growth plans, the company is also looking at various organic and inorganic routes as well. A proposal for further adding value by setting up a rolling mill to manufacture TMT bars is being actively considered. This is expected to result in substantial improvement in the operational performance of orissa Plant. The move will also further consolidate the company's premium position in the long products category and add a new regional market in that area which has hitherto been untapped due to logistic issues. Besides this product in an integrated Plant will give flexibility to choose right knowhow / technology which may result in considerable savings in yield and final cost.
CONTINGENT LIABILITIES
(Rs. In Millions)
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
|
Outstanding Bank
Guarantees and Counter Guarantees given by the Company |
70.398 |
71.335 |
|
Outstanding
Letter of Credit |
293.760 |
14.871 |
|
Estimated amount
of contracts remaining to be executed on capital account |
124.300 |
46.580 |
|
Sales tax Liability in respect of goods impounded-amount unascertained (The Company has deposited as security with the dept.) |
0.563 |
-- |
|
Civil suits and Labour cases pending against the Company |
9.135 |
-- |
UNAUDITED FINANCIAL RESULTS
FOR THE QUARTER ENDED 30TH JUNE, 2012
Rs. In Millions
|
Sr. No. |
|
Particulars |
3 months ended 30-06.2012 Unaudited |
|
1. |
a |
Net sales/income
from operations |
2428.237 |
|
|
b |
Other income |
|
|
|
Total Income |
2428.237 |
|
|
2 |
|
Expenditure : |
|
|
|
a |
Increase/decrease in stock in trade and work in progress |
188.638 |
|
|
b |
Consumption of raw materials/purchases |
1 739.296 |
|
|
c |
Employees cost |
28.349 |
|
|
d |
Depreciation |
59.589 |
|
|
5 |
Other expenditure |
225.746 |
|
|
Total expenditure |
2241.618 |
|
|
|
|
|
|
|
3 |
Profit from
operations before other income, interest and exceptional items |
186.619 |
|
|
4 |
Other Income |
2.944 |
|
|
5 |
Profit before
interest and exceptional items |
189.563 |
|
|
6 |
Interest |
149.554 |
|
|
7 |
Profit after
interest but before exceptional items |
40.009 |
|
|
8 |
Exceptional items |
|
|
|
9 |
Profit(+)/Loss(-}
from ordinary activities before tax |
40.009 |
|
|
10 |
Taxes |
|
|
|
|
a |
Current Tax (MAT) |
8.200 |
|
|
b |
MAT Credit Entitlement |
(8.200) |
|
|
c |
Deferred Tax |
|
|
11 |
Net profit(+) from
ordinary activities after tax |
40.009 |
|
|
12 |
Extra ordinary item (Net of tax expenses Rs.Nil |
|
|
|
13 |
Net
profit(+)/Loss(-) for the period (11 -12) |
40.009 |
|
|
14 |
Paid-up equity share capital (Face value Rs.10/-) |
313.081 |
|
|
15 |
Reserves (excluding revaluation reserves) as per last audited balance sheet as on 31.03,2011 |
|
|
|
16 |
Earning per share
(EPS): |
|
|
|
|
a |
Basic and diluted EPS before extraordinary item for the period, for the year to date and for the previous year (not to be annualised) |
1.28 |
|
|
b |
Basic and diluted EPS after extraordinary item for the period, for the year to date and for the previous year (not to be annualised) |
1.28 |
|
17 |
Public shareholding |
|
|
|
|
- |
Number of shares |
15195197 |
|
|
- |
Percentage of shareholding |
48.53% |
|
18 |
Promoters and
Promoters Group Shareholding |
|
|
|
|
a |
Pledged/ Encumbered |
|
|
|
- |
Number of Shares |
1000000 |
|
|
- |
Percentage of shares as of the total shareholding of promoter and promoter group |
6.21% |
|
|
- |
Percentage of shares as of the total share capital of the company |
3.19% |
|
|
|
Non-Encumbered |
|
|
|
|
Number of Shares |
15112914 |
|
|
|
Percentage of shares as of the total shareholding of Dromoter and promoter group |
93.79% |
|
|
|
Percentage of shares as of the total share capital of the company |
48 28% |
Notes:
1. The Company's operations fall under single segment namely "Steel".
2. Corresponding figures of previous period have been re grouped to make them comparable wherever necessary.
3. Investors complaints during the first quarter ended on 30.06.2012 - pending at the beginneing of the quarter Nil, received during the quarter- 1, disposed off- 1, pending Nil.
4. The above results have been reviewed by the Audit Committee and taken on record in the meeting of Board of Directors of the Company held on 27.08.2012.
5. The auditors of the company have carried out limited review of the above results in terms of Clause 41 of the Listing Agreement.
6. Sales include transfer of sponge iron/steel billtes from Sambalpur Works to Ghaziabad Unit.
7. Provision for deferred tax, if any will be made in audited accounts
FIXED ASSETS
- Land Leasehold
- Boundary Well
- Building
- Plant and Machinery
- Furniture Fixtures
- Office Equipments
- Vehicles
- Computers
WEBSITE DETAILS
HISTORY
Subject (erstwhile Rathi Udyog Limited) is a part of the P.C. Rathi Group of Delhi. The Group owes its presence in the steel industry to the farsightedness of late Seth Gordhan Das Rathi. He setup a small re-rolling mill in Delhi in the early 40s. Since then the Group has grown continuously. Mr. Gordhan Das Rathi's commitment to quality, integrity, honesty, and growth is being followed till date.
The Company was founded by Mr. Punam Chand Rathi (1934-2010) who was well known in the Steel Industry with experience of over six decades in steel melting and rolling/re-rolling. Their Company is a profit making, dividend paying and listed company. They are engaged in manufacturing of Rebars and Wire Rods which are broadly categorized as the Long Products in the Steel Industry. The main application of their product Rebar, is in the construction industry. Wire rods, another product being currently manufactured by then are further drawn into wires, which has various industrial applications.
The Rathi Group was amongst the first to adopt the technology of Tor in the country from Tor Isteg Steel Corporation, Luxemberg, through the Tor-Steel Research Foundation in India. The Company's latest product Thermo-Mechanically Treated (TMT) Steel has gained popularity in short span of time in the construction Industry. The state-of-the-art patented "Thermex" water quenching process makes the Steel earthquake resistant. They are one of the exclusive licencees for the use of "Thermex" technology in Northern India.
Their Company is an ISO 9001 certified company. They have a very strong and committed network of dealers, consisting of nearly 800 retail outlets spread all over Northern India. Such a broad dealer network enables then to ensure quantitative as well as qualitative up-gradation.
They are constantly making every possible effort to upgrade their technology and improve their product quality to retain and enhance their market share. Their Company is conscious of the interest of their stakeholders i.e. shareholders, the Government, employees and of their customers.
The Company's group Company viz. Rathi Iron and Steel Industries Limited has also commissioned a Steel Rolling Mill plant at Pithampur, Distt. Dhar (M.P.). Their installed capacity together with that of their Group Company is about 175000 TPA of rolled products and 40,000 TPA of melting facilities. Their Company is also setting up facilities for manufacturing value added Alloy Steel products.
They are also in the process of setting up a backward integration project at Orissa ( Orissa Project) to manufacture Steel Billets through DRI-captive power-CCM route
BOARD OF DIRECTORS
Mr. Pradeep Rathi, aged 54 years, Managing Director, has a career spanning about 26 years in the fields of production planning, procurement, finance, etc in the Iron and Steel Industry. He holds a degree in Commerce from Delhi University. He monitors the day to day affairs of the Company. His expertise lies in the personnel department. He has been on their Board of Directors since August 27, 1994.
Mr. Shree Kumar Daga, aged 57 years, holds a Masters Degree in Mechanical Engineering and has more than 26 years of experience in various industries. He has been on their Board of Directors since March 2003 as a Non Executive and Independent Director
Mr. Prem Narayan Varshney, aged 58 years, holds a post graduation degree in Economics from Agra University. He has more than 31 years of experience in the field of Human Resource Development. He has been on their Board of Directors since 1997 and was appointed as an Executive and Independent Director since April 2005.
Mr. Dwarka Das Lakhotia, aged 37 years, holds a Master's degree in Commerce from CCS University and has more than 12 years of experience in the field of accounting and marketing. He has been on their Board of Directors as a Non Executive and Independent Director since March 2003.
Mr. Ranjit Khattar, aged 50 years, is a qualified Chartered Accountant with more than 20 years of experience. He has worked with various organizations in the capacity of chief financial officer and as a financial consultant. He has been on their Board of Directors as a Non Executive and Independent Director since February 2005.
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.54.12 |
|
|
1 |
Rs.87.08 |
|
Euro |
1 |
Rs.70.15 |
INFORMATION DETAILS
|
Report Prepared
by : |
NTH |
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 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--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 |
|
- |
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.