MIRA INFORM REPORT

 

 

Report Date :

22.11.2013

 

IDENTIFICATION DETAILS

 

Name :

WELSPUN MAXSTEEL LIMITED (w.e.f. 01.07.2009)

 

 

Formerly Known As :

VIKRAM SPONGE IRON LIMITED

 

 

Registered Office :

Welspun City, Village Versamedi, Taluka Najar, Kutuch, Anjar Gujarat – 370110,

 

 

Country :

India

 

 

Financials (as on) :

31.03.2013

 

 

Date of Incorporation :

27.06.2008

 

 

Com. Reg. No.:

04-064145

 

 

Capital Investment/ Paid-up Capital:

Rs.1338.223 Millions

 

 

CIN No.:

[Company Identification No.]

U27100GJ2008PLC064145

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Subject is engaged in Manufacturing and Selling of Gas Based Sponge Iron.

 

 

No. of Employees:

300 [Approximately] 

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B (35)

 

RATING

STATUS

 

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Maximum Credit Limit :

USD 28130000

 

 

Status :

Moderate

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a subsidiary of Welspun Corp Limited. It is an established company having a moderate track record.

 

There appears huge loss recorded by the company during 2013. However, trade relations are reported to be fair. Business is active. Payments are slow but correct.

 

The company can be considered for business dealings 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 – March 31st, 2013

 

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

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

 

The current downturn provides an opportunity to push ahead with reforms to accelerate growth, says the latest India Development Update report released by the World Bank. The report says that the adverse effects of rupee depreciation are likely to be offset by the gains in the exports performance due to improved external competitiveness. Since May this year, the local currency has depreciated substantially and fell to a record level of Rs 68.85 to a dollar on August, 28.

 

A stagflation like situation appears to have arisen as inflation jumped to an eight month high of 6.46 % for the month of September. It is up from 6.10 % in August. Growth continues to be muted with factory output plunging to 0.6  % in August. Onion prices have risen nearly 300 % from last September. Vegetables cost nearly 90 % more than they did last year. Wake up to the economic contribution of slum dwellers. They contribute more than 7.5 % to the country’s gross domestic product, according to a recent study conducted in 50 top cities.

 

136000 estimated number of jobs created during the second quarter of the current financial year. 50000 estimated number of additional jobs in the field of corporate social responsibility in the coming years.

 

The International Finance Corporation expects to come out with its rupee linked bonds issue before the end of 2013 as a part of its plan to raise $ 1 billion. The Apple iPhone 5c (Rs 41900 for 16 GB variant) and 5s (Rs 53500 for 16GB variant) has been launched in India from 1st November.

 

The Land Acquisition Act to provide just and fair compensation to farmers will come into force from January 1 next year, said Rural Development Minister Jairam Ramesh. The Act replaces a 119 year old registration. The Securities and Exchange Board of India has approved the trading of currency futures on the Bombay Stock Exchange. The exchange plans to launch the currency futures platform with advanced trading technology by the end of November.

 

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CARE

Rating

Long term rating: BBB- (Suspended)

Rating Explanation

Moderate degree of safety and moderate credit risk

Date

23 October 2012

 

 

Rating Agency Name

CARE

Rating

Short term rating: A3 (Suspended)

Rating Explanation

Moderate degree of safety and higher credit risk

Date

23 October 2012

 

 

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.

 

 

INFORMATION PARTED BY

 

Name :

Mr. Prakash

Designation :

Accounts Department

Contact No.:

91-22-66136000

Date :

22.11.2013

 

 

LOCATIONS

 

Registered Office :

Welspun City, Village Versamedi, Taluka Najar, Kutuch, Anjar Gujarat – 370110, India

Tel. No.:

Not Available

Fax No.:

Not Available

E-Mail :

rashmi_mamtura@welspun.com

saurabh_mehta@welspun.com

Web Site:

www.welspun.com

Location:

Owned

 

 

Corporate Office :

Welspun House, 7th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400013, Maharashtra, India

Tel. No.:

91-22-66136000/24908000

Fax No.:

91-22-24908020/24908021

 

 

Plant Office :

Village Salav, P.O.Welspun Baug, District Raigad -402202, Maharashtra, India

Tel. No.:

91-2144-260110 to 260119

Fax No.:

91-2144-260122

 

 

Regional Office :

No.1, C-310, Blue Cross Chambers, Bangalore – 560001, Karnataka, India

E-Mail :

naresh_surana@welspun.com

 

 

DIRECTORS

 

AS ON 24.09.2013

 

Name :

Mr. Balkrishan Gopiram Goenka

Designation :

Director

Address :

Rocky Isle 46-C, Bhulabhai Desai Road, Mumbai – 400 026, Maharashtra, India

Date of Birth/Age :

15.08.1966

Qualification:

B.Com

Date of Appointment :

27.08.2012

Din No.:

00270175

 

 

Name :

Mr. Mintoo Bhandari

Designation :

Nominee Director

Address :

35, Partridge Way, Holliston, MA 017462646

Date of Birth/Age :

19.08.1965

Qualification:

Mechanical Engineering from MIT (S.B. ’87) and the Harvard Business School (MBA ’92)

Date of Appointment :

18.08.2011

Din No.:

00054831

 

 

Name :

Mr. Utsav Baijal

Designation :

Nominee Director

Address :

561 ATS Greens, Sector 93A, Expressway Noida-201301, Uttar Pradesh, India

Date of Birth/Age :

11.12.1976

Date of Appointment :

17.12.2011

Din No.:

02592194

 

 

Name :

Mr. Madhav Vasant Phadke

Designation :

Nominee Director

Address :

Flat No. 3, Bldg No. 4B, Pereira Nagar CHS Limited, Khopat, Behind ST Work Shop Thane- 400601

Date of Birth/Age :

19.06.1961

Qualification:

BA(Eco), LLM, MLL and LW, Master Degree In

Personnel Management, Post Graduate Diploma in Banking

Date of Appointment :

18.03.2011

Din No.:

03432453

 

 

Name :

Mr. Rajesh Rameshkumar Mandawewala

Designation :

Additional Director

Address :

161/171-B, Tanna Residency Bay View, OPP. Sidhivinayak Temple, Prabhadevi Mumbai -400025 Maharashtra India

Date of Birth/Age :

05.05.1962

Date of Appointment :

14.09.2012

Din No.:

00007179

 

Name :

Mr. Ram Gopal Sharma

Designation :

Additional Director

Address :

E 707 Lok Sarita, Military Road, Marol, Andheri(E) Mumbai - 400059Maharashtra India 

Date of Birth/Age :

11.09.1940

Qualification:

Commerce Graduate with a Master Degree in Economics

Date of Appointment :

14.09.2012

Din No.:

00026514

 

 

Name :

Mr. Prakash Ranjeetmal Tatia

Designation :

Director

Address :

A-405, Versova Breeze CHS Limited, 3rd Cross, Lokhandwala, Andheri (West), Mumbai-400053, Maharashtra, India

Date of Birth:

01.12.1953

Date of Appointment :

13.04.2013

Din No.:

06559106

 

 

KEY EXECUTIVES

 

Name :

Mr. Prakash

Designation :

Accounts Department

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 24.09.2013

 

Names of Shareholders

No. of  Equity Shares

No. of Preferences Shares

Welspun Corp Limited, India

909176457

3740000

Grasim Industries Limited, India

1391600

--

Dwarka Dass Rathi

1400

--

Sanjeev Bafna

1400

--

Pavan Kumar Jain

1400

--

Ashok Malu

1400

--

Hemant Kadel

1400

--

Ravindra Kastia

1400

--

Devendra Patil

1

--

Shashikant Thorat

1

--

Pradeep Joshi

1

--

Ravindra More

1

--

Rashmi Mamtura

1

--

Saji Padmanabhan

1

--

Rajendra Sawant

1

--

 

 

 

TOTAL

910576464

3740000

 

AS ON 24.09.2013

 

Equity Share Breakup

 

Percentage of Holding

Category

 

 

Bodies corporate

 

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Subject is engaged in Manufacturing and Selling of Gas Based Sponge Iron.

 

 

Products :

ITC NUMBER OF PRODUCT

DESCRIPTION OF PRODUCT OR SERVICES

7203-1000

Sponge Iron

 

 

Terms :

 

Selling :

LC and Credit

 

 

Purchasing :

LC and Credit

 

PRODUCTION STATUS [AS ON 31.03.2013]

 

Particulars

Unit

31.03.2013

Installed Capacity

MT

900,000

Actual Production

MT

348,505

 

 

GENERAL INFORMATION

 

Customers :

End Users

 

 

No. of Employees :

300 [Approximately] 

 

 

Bankers :

·         IDBI Bank Limited, IDBI Tower, WTC Complex, Cuffe Parade, Mumbai -400005, Maharashtra, India

·         Canara Bank, 85, Maker Tower, F Wing, 20th Floor, Cuff Parade, Mumbai – 400005, Maharashtra, India

·         Union Bank of India Limited, Union Bank Bhavan, 238, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400021, Maharashtra, India

·         Andhra Bank, Specialized Corporate Finance Branch, 16th Floor, Earnesh House, NCPA Marg, Nariman Point, Mumbai-400021, Maharashtra, India

·         State Bank of Hyderabad, C-11, Mittal Tower, 1st Floor, 210, Nariman Point, Mumbai-400021, Maharashtra, India

·         Allahabad Bank, Industrial Finance Branch, Allahabad Bank Building, 2nd Floor, 37, Mumbai Samachar Marg, Fort, Mumbai-400001, Maharashtra, India

 

 

Facilities :

Secured Loan

As on 31.03.2013

[Rs. in Millions]

As on 31.03.2012

[Rs. in Millions]

Long Term Borrowings

 

 

Term Loan From Banks

9507.979

6575.756

 

 

 

Short Term Borrowings

 

 

Working Capital Loans From Banks

42.279

302.458

TOTAL

9550.258

6878.214

 

 

 

Unsecured Loan

As on 31.03.2013

[Rs. in Millions]

As on 31.03.2012

[Rs. in Millions]

Long Term Borrowings

 

 

Deferred Payment Liabilities

593.798

549.780

 

 

 

Short Term Borrowings

 

 

Rupee Term Loans From Banks

0.000

2000.000

TOTAL

593.798

2549.780

 

 

 

Banking Relations :

--

 

 

Financial Institutions:

IDBI Trusteeship Services Limited, Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai- 400001, Maharashtra, India

 

 

Auditors :

 

Name :

MGB and Company

Chartered Accountants

Address :

Jolly Bhavan No 2, 1st Floor, 7, Opposite Nirmala Niketan 7, New Marine Lines, Churchgate, Mumbai-400020, Maharashtra, India

PAN No:

AAAFM5742R

 

 

Holding Company :

Welspun Corp Limited

CIN No.: L27100GJ1995PLC025609

 

 

Fellow Subsidiaries :

·         Welspun Pipes Limited

·         Welspun Natural Resources Private Limited

·         Welspun Pipe Inc, Welspun Tradings Limited

·         Welspun Infratech Limited

·         Welspun Mauritius Holdings Limited

·         Welspun Middle East Pipes Company LLC

·         Welspun Middle East Pipes Coating Company LLC

·         Welspun Middle East DMCC

·         Welspun Tubular LLC

·         Welspun Global Trade LLC

·         Welspun Plastics Private Limited

·         Welspun Projects Limited

·         Welspun Road Projects Private Limited

·         Welspun Infra Projects Private Limited

·         Anjar Road Private Limited

·         Welspun BOT projects Private Limited

·         MSK Projects (Himmatnagar Bypass) Private Limited

·         MSK Projects (Kim Mandavi Corridor) Private Limited

·         Welspun Energy Transportation Private Limited

·         Welspun Water Infrastructure Private Limited

·         ARSS Bus Terminal Private Limited

·         Welspun Infra Enterprises Private Limited (w.e.f. 15 March 2013)

 

 

Other Related Parties :

·         Welspun Infratech Limited [U45400MH2007PLC170350]

·         Welspun Logistics Limited [U63012MH2006PLC165280]

·         Welspun Projects Limited [L45201GJ1994PLC023920]

·         Welspun Steel Limited [U27109GJ2004PLC044249]

 

 

CAPITAL STRUCTURE

 

AS ON 24.09.2013

 

Authorized Capital :

No. of Shares

Type

Value

Amount

1200000000

Equity Shares

Rs.10/- each

Rs.12000.000 Millions

300000000

Preferences Shares

Rs.10/- each

Rs.3000.000 Millions

 

TOTAL

 

Rs.15000.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

910576464

Equity Shares

Rs.10/- each

Rs.9105.765 Millions

3740000

Preferences Shares

Rs.10/- each

Rs.37.400 Millions

 

TOTAL

 

9143.165 Millions

 

 

AS ON 31.03.2013

 

Authorized Capital :

No. of Shares

Type

Value

Amount

272000000

Equity Shares

Rs.10/- each

Rs.2720.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

133822352

Equity Shares

Rs.10/- each

Rs.1338.223 Millions

 


 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2013

(12 Months)

31.03.2012

(6 Months)

30.09.2011

(18 Months)

I.        EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

1338.223

1300.823

1300.824

(b) Reserves & Surplus

5694.800

1137.262

1841.355

(c) Money received against share warrants

0.000

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

0.000

0.000

0.000

Total Shareholders’ Funds (1) + (2)

7033.023

2438.085

3142.179

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) long-term borrowings

10101.777

7125.536

7167.510

(b) Deferred tax liabilities (Net)

0.000

301.865

301.865

(c) Other long term liabilities

0.050

0.050

0.050

(d) long-term provisions

34.564

34.603

42.627

Total Non-current Liabilities (3)

10136.391

7462.054

7512.052

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

42.279

2302.458

2395.330

(b) Trade payables

2534.313

2543.329

5120.101

(c) Other current liabilities

187.895

426.045

326.160

(d) Short-term provisions

36.230

33.760

6.544

Total Current Liabilities (4)

2800.717

5305.592

7848.135

 

 

 

 

TOTAL

19970.131

15205.731

18502.366

 

 

 

 

II.      ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

14705.644

6392.670

5771.747

(ii) Intangible Assets

3.815

7.156

8.826

(iii) Capital work-in-progress

79.989

2093.245

1749.523

(iv) Intangible assets under development

0.000

0.000

0.000

(b) Non-current Investments

29.906

29.906

29.906

(c) Deferred tax assets (net)

0.000

000

0.000

(d) Long-term Loan and Advances

1975.980

2021.030

2778.744

(e) Other Non-current assets

0.000

0.000

0.000

Total Non-Current Assets

16795.334

10544.007

10338.746

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

0.000

0.000

1294.573

(b) Inventories

2396.369

2368.616

3753.958

(c) Trade receivables

382.961

1472.360

2342.962

(d) Cash and cash equivalents

287.017

511.253

335.654

(e) Short-term loans and advances

107.448

287.965

322.309

(f) Other current assets

1.002

21.530

114.164

Total Current Assets

3174.797

4661.724

8163.620

 

 

 

 

TOTAL

19970.131

15205.731

18502.366

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2013

(12 Months)

31.03.2012

(6 Months)

30.09.2011

(18 Months)

 

SALES

 

 

 

 

 

Income

8948.369

7212.370

24227.575

 

 

Other Income

263.360

318.049

356.360

 

 

TOTAL                                     (A)

9211.729

7530.419

24583.935

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Cost of materials consumed

8649.402

6362.932

20279.199

 

 

Employee benefit expense

346.990

149.057

437.547

 

 

Other expenses

1048.934

849.812

1861.173

 

 

Exceptional items

493.993

0.000

0.000

 

 

Changes in inventories of finished goods, work-in-progress and stock-in-trade

(215.907)

332.967

(161.943)

 

 

TOTAL                                     (B)

10323.412

7694.768

22415.976

 

 

 

 

 

Less

PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

(1111.683)

(164.349)

2167.959

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

829.841

357.097

1223.652

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                (E)

(1941.524)

(521.446)

944.307

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

366.918

180.981

424.679

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX (E-F)                (G)

(2308.442)

(702.427)

519.628

 

 

 

 

 

Less

TAX                                                                  (H)

(301.865)

1.666

243.666

 

 

 

 

 

 

PROFIT / (LOSS) AFTER TAX (G-H)                  (I)

(2006.577)

(704.093)

275.962

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

(322.381)

381.712

105.750

 

 

 

 

 

 

BALANCE CARRIED TO THE B/S

(2328.958)

(322.381)

381.712

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

935.497

755.776

3294.751

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

2715.355

1084.251

7332.677

 

 

Stores & Spares

7.880

2.767

136.580

 

 

Capital Goods

0.000

49.449

204.397

 

TOTAL IMPORTS

2723.235

1136.467

7673.654

 

 

 

 

 

 

Earnings / (Loss) Per Share (Rs.)

(15.43)

(5.41)

2.12

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2013

(12 Months)

31.03.2012

(6 Months)

30.09.2011

(18 Months)

PAT / Total Income

(%)

(21.78)

(9.35)

1.11

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

(25.80)

(9.74)

2.14

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

(11.62)

(5.37)

3.11

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

(0.33)

(0.29)

0.17

 

 

 

 

 

Debt Equity Ratio

(Total Debt/Networth)

 

1.44

3.87

3.04

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

1.13

0.88

1.27

 

 

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

Yes

10]

Designation of contact person

Yes

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

Yes

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

Yes

31]

PAN of Proprietor/Partner/Director, if available

No

32]

Date of Birth of Proprietor/Partner/Director, if available

Yes

33]

Voter ID No of Proprietor/Partner/Director, if available

No

34]

External Agency Rating, if available

Yes

 

 

INDEX OF CHARGES:

 

S. No.

Charge ID

Date of Charge Creation/Modification

Charge amount secured

Charge Holder

Address

Service Request Number (SRN)

1

10396033

28/12/2012

2,000,000,000.00

CANARA BANK

85, MAKER TOWER, F WING, 20TH FLOOR CUFFE PARADE, 
MUMBAI - 400005, MAHARASHTRA, INDIA

B65531758

2

10310174

12/09/2011

4,000,000,000.00

IDBI BANK LIMITED

IDBI TOWERWTC COMPLEX, CUFFE PARADE, MUMBAI - 400005, MAHARASHTRA, INDIA

B22540421

3

10263471

18/01/2011

1,000,000,000.00

STATE BANK OF INDIA

CORPORATE ACCOUNTS GROUP - MUMBAI, NEVILLE HOUSE,, 
3RD FLOOR, J N HEREDIA MARG, BALLARD ESTATE, MUMBAI - 400001, MAHARASHTRA, INDIA

B04883195

4

10209487

10/02/2010

5,000,000,000.00

ALLAHABAD BANK

INDUSTRIAL FINANCE BRANCH, ALLAHABAD BANK BUILDING, 2ND FLOOR, 37, MUMBAI SAMACHAR MARG, FORT, MUMBAI, MAHARASHTRA - 400001, INDIA

A82135773

5

10184377

28/03/2013 *

10,944,800,000.00

IDBI TRUSTEESHIP SERVICES LIMITED

ASIAN BLDG., GROUND FLOOR, 17, R .KAMANI MARG,, BALLARD ESTATE,, MUMBAI, MAHARASHTRA - 400001, INDIA

B73398869

6

10184379

22/09/2009

4,840,000,000.00

STATE BANK OF INDIA

STATE BANK BHAVAN, MADAM KAMA ROAD,, NARIMAN POINT, MUMBAI, MAHARASHTRA - 400021, INDIA

A72998552

7

10166698

30/05/2009

1,000,000,000.00

CANARA BANK

DALAMAL TOWER,, NARIMAN POINT,, MUMBAI, MAHARASHTRA - 400021, INDIA

A65477960

8

10162078

16/05/2011 *

6,000,000,000.00

IDBI TRUSTEESHIP SERVICES LIMITED

ASIAN BLDG., GROUND FLOOR, 17, R. KAMANI MARG, BALLARD ESTATE, MUMBAI, MAHARASHTRA - 400001, INDIA

B13845516

9

10163663

22/05/2009

4,000,000,000.00

IDBI BANK LIMITED

IDBI TOWERWTC COMPLEX, CUFFE PARADE, MUMBAI, MAHARASHTRA - 400005, INDIA

A64513047

 

* Date of charge modification

 

 

CORPORATE INFORMATION:

 

Subject is a Company incorporated under the Companies Act 1956. The Company is a subsidiary of Welspun Corp Limited under the Companies Act 1956. The Company is engaged in manufacturing and selling of Gas based Sponge Iron which is popularly known as DRI (Direct Reduced Iron) and HBI (Hot Briquetted Iron). The Company caters mainly domestic market however, small volume is exported.

 

 

PERFORMANCE REVIEW:

 

The capacity utilization was lower mainly due to extreme low supply of APM Gas and uneconomic price of RLNG. Besides the normal shutdown the plant was under forced shut down for a period of about 3 months. The demand of product significantly impacted due to large quantity of import of scrap in the Country. In addition, quantum increase in import of Gas based Sponge Iron at low price mainly from Middle East, where cheaper gas is available.

 

During the year, Alloy Steel Sector remained very sluggish due to weak demand in Auto Sector. The high fuel and interest cost have impacted the Auto Industries in turn underutilization of capacities resulting in low demand of Sponge Iron. The infrastructure sector (major consumer of long steels) also remained subdued due to overall economic scenario.

 

The restriction in supply of long term contracted APM gas was almost by 50% of normal supply, significant high cost of imported RLNG and drastic increase in other raw material cost i.e. iron oxides has significantly impacted the cost of manufacture.

 

Due to overall depressed economic situation impacting the demand of the product and increase in the manufacturing cost, the Company has incurred significant loss and during the year unable to recover even the fixed cost.

 

 

FIXED ASSETS:

 

Tangible Assets

 

  • Land Freehold
  • Lease Hold Land
  • Buildings
  • Factory Buildings
  • Plant and Machinery
  • Office Equipment
  • Furniture and Fixture
  • Motor Vehicles
  • Vehicles

 

Intangible Assets

 

  • Goodwill

 

 

 


CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

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.62.89

UK Pound

1

Rs.101.14

Euro

1

Rs.84.42

 

 

INFORMATION DETAILS

 

Information Gathered by :

PLK

 

 

Report Prepared by :

TPT


 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

4

PAID-UP CAPITAL

1~10

4

OPERATING SCALE

1~10

4

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

4

--PROFITABILIRY

1~10

3

--LIQUIDITY

1~10

4

--LEVERAGE

1~10

4

--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

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

--RBI

YES/NO

NO

--EPF

YES/NO

NO

TOTAL

 

35

 

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

 

--

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.