MIRA INFORM REPORT

 

 

Report Date :

04.03.2014

 

IDENTIFICATION DETAILS

 

Name :

ESSAR STEEL INDIA LIMITED (w.e.f.18.01.2012)

 

 

Formerly Known As :

ESSAR STEEL LIMITED

 

 

Registered Office :

27Km., Surat Hazira Road, Hazira, Surat – 394 270, Gujarat

 

 

Country :

India

 

 

Financials (as on) :

31.03.2013

 

 

Date of Incorporation :

01.06.1976

 

 

Com. Reg. No.:

04-013787

 

 

Capital Investment / Paid-up Capital :

Rs.28418.000 Millions

 

 

CIN No.:

[Company Identification No.]

U27100GJ1976FLC013787

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

SRTE00025E

 

 

PAN No.:

[Permanent Account No.]

AAACE1741P

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Manufacturing and Selling of Steel Products.

 

 

No. of Employees :

Not Divulged

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B (26)

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Maximum Credit Limit :

USD 284140000

 

 

Status :

Moderate

 

 

Payment Behaviour :

Slow and delayed

 

 

Litigation :

Clear

 

 

Comments :

Subject is a part of “Essar Group”.

 

It is a well-established and reputed company having a moderate track record.

 

The company has incurred a huge loss from its operations due to which the position of reserves has been heavily deteriorated during 2013.

 

However, the rating takes into consideration the improvement in the liquidity position as a result of which the management has gradually improve its financial exercise.

 

Trade relations are fair. Business is active. Payment terms are reported as slow and delayed.

 

In view of support from its strong and reputed group company, the subject can be considered for business dealings with great 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 – December 1, 2013

 

Country Name

Previous Rating

(30.09.2013)

Current Rating

(01.12.2013)

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 worst is over for India’s economy with gross domestic product likely to expand 5 %to 5.5 % this year and more than 6 % in 2015, according to Moody’s Analytics. Concerns over the rupee and current account deficit are under control, said the agency. Ratings firm Crisil has forecast 6 % growth for 2014/15 up from the estimated 4.8 % for 2013/14.  Total economic growth, infrastructure bottlenecks and lack of transparency and consistency in foreign direct investment policies seem to have taken a toll on India’s attractiveness as an investment destination, says an Ernst & Young survey.  Projects with FDI component fell 16.4 % across the globe in 2012 from the previous year.  The drop in India was steeper at 21 %. State run carrier Air India is doling out free tickets to its 24000 employees, even as it expects to incur a loss of Rs 39000 mn this financial year and has a debt of Rs 350000 mn. 550000 number of jobs generated across India in 2013, a fall of 0.4 % as compared to with a year earlier. The National Capital Region has a one-fourth share in total jobs created, according to a study by industry lobby group Assochem, Banks, real estate, automobile and telecommunications sectors are showing a rise of job creation. $ 805 mn investments by venture capital firms in India during 2013, registering a drop of about 18 % over the previous year. The Information Technology and IT-Enabled Services Industry retained its status as the favourable venture capital investors in 2013. Pakistan has temporarily banned gold imports for the second time in six months, as it tries to stem smuggling into India. India’s import duty on gold is 10 % and curbs on purchases have dried up legal imports into what used to be the world’s biggest bullion buyers. The World Gold Council puts the amount smuggled into India at upto 200 tonnes in 2013. The Reserve Bank of India has proposed that unclaimed bank deposits estimated to be about Rs 35000 mn be used for education and awareness among depositors.  According to the plan, deposits that have not been claimed for at least 10 years will be transferred to the scheme.

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CARE

Rating

Long Term Bank Facilities=C

Rating Explanation

Have very high risk of default.

Date

24.10.2013

 

 

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 DENIED

 

Management Non Co-operative (91-22-67335000)

 

LOCATIONS

 

Registered Office/ Plant 1  :

27Km., Surat Hazira Road, Hazira, Surat – 394 270, Gujarat, India

Tel. No.:

91-261-2872400/ 6682400

Fax No.:

91-261-2872400/ 6682796/ 6685731

E-Mail :

rakesh.darji@essar.com

dilip.deokar@essar.com

promod.s@essar.com

steel@essar.com

webmaster@essar.com

Website :

www.essar.com

 

 

Corporate Office :

Essar House, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai – 400 034, Maharashtra, India

Tel. No.:

91-22-66601100 / 24950606

Fax No.:

91-22-24928896

 

 

Marketing and Sales Office :

6th Floor, Tower-2, Equinox Business Park (Peninsula Techno Park) Off Bandra Kurla Complex, LBS Marg, Kurla (West), Mumbai – 400 070, Maharashtra, India

Tel. No.:

91-22-67335000

Fax No.:

91-22-67082189

E-Mail :

steel@essar.com

 

 

Plant 2 :

Vishakhapatnam

Scindia Road, Near Flyover, Visakhapatnam – 530 004, Andhra Pradesh, India

Tel. No.:

91-891-2523213

Fax No.:

91-891-2559383/ 2556907

 

 

Overseas Offices [Plants] :

Located at

·         Canada

·         Indonesia

·         United Kingdom

·         United Arab Emirates

·         Germany

·         China

 

 

 

 

 

DIRECTORS

 

AS ON 31.03.2013

 

Name :

S. N. Ruia

Designation :

Chairman (upto 07.08.2013)

 

 

Name :

Jatinder Mehra

Designation :

Director

 

 

Name :

V. G. Raghavan

Designation :

Director

 

 

Name :

S. V. Venkatesan

Designation :

Director (upto 29.05.2013)

 

 

Name :

K. V. Krishnamurthy

Designation :

Director (upto 14.11.2012)

 

 

Name :

Jitender Balakrishnan

Designation :

Director (upto 29.05.2013)

 

 

Name :

Rana Som

Designation :

Director

 

 

Name :

S Santhanakrishnan

Designation :

Nominee Director (SBI) (w.e.f. 12.03.2013)

 

 

Name :

Arvind Pande (w.e.f. 29.05.2013)

Designation :

Director

 

 

Name :

S. S. Kohli (w.e.f. 29.05.2013)

Designation :

Director

 

 

Name :

S. R. Jain (w.e.f. 29.05.2013)

Designation :

Director

 

 

Name :

Alok Dhir (w.e.f. 29.05.2013)

Designation :

Director

 

 

Name :

Dilip Oommen

Designation :

Managing Director and CEO

 

 

Name :

Amit Agarwal

Designation :

Director (Finance) (upto 08.11.2012)

 

 

Name :

Alok Gupta

Designation :

Director (Marketing)

 

 

Name :

Ashutosh Agarwala

Designation :

Director (Finance) (w.e.f. 29.05.2013)

 

 

KEY EXECUTIVES

 

Name :

Rakesh Darji Company Secretary

Designation :

Company Secretary

 

 

SHAREHOLDING PATTERN

 

Share Holding Pattern details are Not Available

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Selling of Steel Products.

 

 

Products :

Item Code No.

 

Product Description

2601

Iron Ores and Concent Rates, Other than Roasted Iron Pyrites

7203

Ferrous Products Obtained by Direct Reduction of Iron Ore and Other Spongy Ferrous Products in Lumps, Pellets or Similar Forms

7208

Flat Rolled Products of Iron or Non Alloy Steel of a Width of 600 MM or More Hot Rolled, Not Clad, Plated or Coated

7210

Flat Rolled Products of Iron or Non Alloy Steel of a Width of 600 MM Clad Plated or Coated with Zinc

7211

Flat Rolled Products of Iron or Non Alloy Steel of a Width of Less than 600 MM Hot Rolled, Not Clad, Plated or Coated

7304

 

Pipes and Hollow Profile Seamless or Iron or Steel for Used in Oil and Gas Pipeline

 

 

 

 

PRODUCTION STATUS (AS ON 31.03.2011)

 

Licensed Capacity - *

 

Installed Capacity (as certified by the management) per annum

 

Particulars

Unit

31.03.2011

 

Iron Ore Pellet

MT

8000000

Hot Briquette Iron / Direct Reduced Iron (Trial Run 17,00,000 MT)

 

6700000

Hot Metal (Under Trial run)

MT

1730000

Hot Rolled Coil

MT

3600000

Cold Rolled Coil

MT

2110000

Colour Coating

MT

400000

Plates

MT

1500000

Pipes (Including Capacity of L-Saw Plant under Trial Run 325,000 MT)

MT

600000

 

 

PRODUCTION

 

Particulars

Unit

31.03.2011

 

Iron Ore Pellet**

MT

5081082

Hot Briquette Iron / Direct Reduced Iron (Including trial run production of 411,782 MT)

MT

4237809

Hot Metal (Under Trial Run)

MT

373354

Hot Rolled Coils/Cold Rolled Coils/ Plates

MT

3217932

Plates (Including trial run production of 77,910 MT)

MT

366606

Pipes (Including trial run production of L-Saw 24,503 MT)

MT

101803

 

* Not applicable in terms of Government of India's Notification No. S.O.477 (E) dated 25th July, 1991.

** Includes production of Pellets on Job Work Basis of 172882 MT

 

 

GENERAL INFORMATION

 

No. of Employees :

Not Divulged

 

 

Bankers :

·         Allahabad Bank

·         Axis Bank Limited

·         Bank of Baroda

·         Bank of India

·         Canara Bank

·         Central Bank of India

·         Corporation Bank

·         Export Import Bank of India

·         HDFC Bank Limited

·         ICICI Bank Limited

·         IDBI Bank Limited

·         Indian Overseas Bank

·         Punjab National Bank

·         State Bank of Bikaner and Jaipur

·         State Bank of Hyderabad

·         State Bank of India

·         State Bank of Mysore

·         State Bank of Patiala

·         Syndicate Bank

·         The Federal Bank Limited

·         The Jammu and Kashmir Bank Limited

·         UCO Bank

·         Union Bank of India

·         Yes Bank Limited

 

 

Facilities :

SECURED LOANS

 

As on 31.03.2013

Rs. in Millions

As on 31.03.2012

Rs. in Millions

LONG TERM BORROWINGS

 

 

13.4% Non Convertible Debentures of Rs. 1000000 each

5250.000

10000.000

Term Loans

 

 

--From Banks

199543.100

134379.000

--From Others

13983.900

4572.200

Buyers Credit for Capital Expenditure

6499.200

15338.300

SHORT TERM BORROWINGS

 

 

Short Term Loans

 

 

--From Banks

7000.000

22750.000

--From Others

0.000

10500.000

Working Capital Loans – From Banks

9674.200

12816.800

Buyer’s Credit for Operational Expenditure

14751.300

30433.200

Buyers Credit Capital Expenditure

160.700

114.000

 

 

76614

Total

256862.400

240903.500

 

 

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Deloitte Haskins and Sells,

Chartered Accountants

Address :

Heritage, 3rd Floor, Near Gujarat-Vidhyapith, Off Ashram Road, Ahmedabad – 380 014, Gujarat, India

 

 

Holding Company :

·         Essar Steel Asia Holdings Limited (FKA Essar Resources Mauritius Ltd) Immediate Holding Company- (ESAHL) (w.e.f. 29.06.2012)

·         Essar Steel Mauritius Limited - Holding Company of Essar Steel Asia Holdings Limited - (ESML)

·         Essar Steel Limited - Mauritius - Immediate Holding Company (ESTLM) (upto 28.06.2012)

·         Essar Global Fund Limited (FKA Essar Global Limited)

 

 

Subsidiaries :

·         Essar Steel Middle East FZE (ESMEF)

·         Essar Steel Trading FZE (ESTF)

·         Essar Steel Offshore Limited. (ESOSL)

·         Essar Steel Overseas Limited. (ESOL) **

·         Trinity Coal Marketing LLC (EMA) *

·         Essar Minerals Limited (FKA Essar Mining Limited) *

·         Essar Mineral Cooperatief U.A. *

·         Essar Minerals Canada Limited *

·         Essar Minerals INC *

·         Trinity Parent Corporation *

·         Trinity Coal Corporation *

·         Trinity Coal Partners LLC *

·         Bear Fork Resources LLC *

·         Deep Water Resources LLC *

·         Levisa Fork Resources LLC *

·         North Springs Resources LLC *

·         Little Elk Mining Company LLC *

·         Banner Coal Terminal LLC *

·         Hughes Creek terminal LLC *

·         Frasure Creek Mining LLC *

·         Falcon Resources LLC *

·         Prater Branch Resources LLC *

·         Trinity RMG Holding LLC *

·         RMG INC *

 

*These companies are subsidiaries of a wholly owned subsidiary of the Company

 

** Liquidated w.e.f. 13.09.2012

 

 

Fellow Subsidiaries :

·        Aegis Limited (AEGIS)

·        Essar Power(Jharkhand)Limited.(EPJL)

·        Essar Africa Holdings Limited. (EAHL)

·        Essar Bulk Terminal Paradeep Limited. (EBTPL)

·        Essar Electric Power Development Corporation Limited (EEPDCL)

·        Essar Logistics Limited. (ELL)

·        EssarMineral Resources Limited. (EMRL)

·        EssarOffshore Subsea Limited. (EOSL)

·        Essar Oil Limited. (EOL)

·        Essar Port Limited (EPL)

·         EssarSteel Algomalnc.(ESA-INC)

·         Essar Steel Processing & Distribution UK Ltd. (ESPD UK)

·         PT Essarlndonesia(PTEI)

·         Vadinar Oil Terminals Limited. (VOTL)

·         Vadinar Power Company Limited. (VPOCL)

·         AgcNetworksLimited (Formally Avaya Global) (AGCNL)

·         Equinox Business Parks Private Limited (EBPPL)

·         Essar Bulk Terminal (Salaya) Limited (EBTSL)

·         Essar Oilfields Services Limited (EOSPL)

·         Essar Power (M P) Limited. (EPMPL)

·         Essar Power Gujarat Limited. (EPGL)

·         Essar Project Management Consultant Limited. (EPMCL)

·         Essar Projects (India) Limited. (EPIL)

·         Essar Shipping Limited (ESL)

·         Essar Paradeep Terminals Limited (EPTL)

·         Navabharat Power Private Limited (NPPL)

·         Peak Trading Overseas Limited (PTOL)

·         Vadinar Ports and Terminals Limited (VPTL)

·         Essar Steel Limited - Mauritius (ESTLM) (w.e.f. 29.06.2012)

 

 

Associates :

·         Bhander Power Limited. (BPOL)

·         Essar Bulk Terminal Limited. (EBTL)

·         Essar Power (Orissa) Limited. (EPOL - Orissa)

·         Essar Power Hazira Limited (EPHL)

·         Essar Power Limited. (EPOL)

·         Essar Steel Processing FZCO (ESP-FZCO)

 

 

Companies in which Promoters had significant influence/ Control :

·         Essar Steel Chhattisgarh Limited. (ESCL)

·         Essar Steel Jharkhand Limited. (ESJL)

·         Essar Teleholding Limited. (ETHL)

·         Futura Travels Limited. (FTL)

·         Global Supplies (UAE) FZE (GS)

·         Imperial Consultants and Securities Private Limited (ICSL)

·         India Securities Limited. (ISL)

·         Kartik Estates Private Limited. (KEPL)

·         Kroner Investment Limited. (KIL)

·         NewAmbi Trading & Investments Private Limited (NATIPL)

·         Prajesh Investments Private Limited. (PIPL)

·         Prajesh Marketing Limited. (PML)

·         The Mobilestore Limited. (TML)

·         Tirunelveli Wind Farms Limited (TWFL)

·         Essar Procurement Services Limited (EPSL)

·         Essar Properties Limited. (EPRL)

·         Essar Agrotech Limited. (EAL)

·         Essar Education Limited (EEL)

·         Clickforsteel Services Limited (CFSL)

·         Downtown Securities Private Limited (DTSPL)

·         Bhargava Estates Private Limited (BEPL)

·         Essar House Limited. (EHL)

·         Essar Information Technology Limited. (EITL)

·         Essar Infrastructure Services Limited. (EISL)

·         Essar Investments Limited. (EIL)

·         Ajitesh Estates Private Limited (AEPL)

·         Arkay Holdings Limited. (AHL)

·         Arkay Sea Logistics Limited (ASLL)

·         Essar Services India Limited (ESIL)

·         Essar SEZ Hazira Limited (ESEZHL)

 

# These Companies ceased to be related party w.e.f. 01.04.2012 as the Promoters do not have any significant influence on the Company

 

 

CAPITAL STRUCTURE

 

AFTER 31.03.2013

 

Authorised Capital : Rs.72750.000 Millions

 

Issued, Subscribed & Paid-up Capital : Rs.28685.503 Millions

 

 

AS ON 31.03.2013

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

7175000000

Equity Shares

Rs. 10/- each

Rs.71750.000 Millions

100000000

10% Cumulative Redeemable Preference Shares

Rs. 10/- each

Rs.1000.000 Millions

 

 

 

 

 

Total

 

Rs.72750.000 Millions

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

2797534656

Equity Shares

Rs. 10/- each

Rs.27975.347 Millions

43598951

10% Cumulative Redeemable Preference Shares

Rs. 10/- each

Rs.435.990 Millions

4520703

Add: Equity Shares Forfeited

 

Rs.6.700 Millions

 

 

 

 

 

Total

 

Rs.28418.037 Millions

 

 

a)     Reconciliation of number of shares and amount outstanding at the beginning and at the end of the Reporting period:

 

Particulars

31.03.2013

 

Number

Rs. In Millions

Equity Shares

 

 

At the beginning of the year

2626837822

26268.378

Issued during the year

170696834

1706.968

Outstanding at the end of the year

2797534656

27975.346

Preference Shares

 

 

At the beginning of the year

43598951

435.990

Outstanding at the end of the year

43598951

435.990

 

 

b)    Rights, preferences and restrictions attached to shares Equity Shares

 

The Company has one class of Equity Shares having face value of Rs. 10 per share. Every shareholder is entitled to one vote for every one share held. In the event of liquidation, the equity share holders shall be entitled to receive remaining assets of the Company after distribution of all dues in proportion to their shareholdings.

 

Cumulative Redeemable Preference Shares (CRPS)

 

The Company has issued 43,598,951 10% CRPS of Rs. 10 each. Each CRPS is redeemable at par in 12 equal monthly installments commencing from 01st October, 2017 to 01st September, 2018. The Company shall have option to redeem the CRPS at par in one or more tranches from any or all of the existing holders, anytime after the date of allotment together with arrears of dividend if any and the Board shall give one month's notice for any such redemption to the registered holders of the CRPS.

 

c)     Shares held by Holding Company

 

Out of above equity shares, 1,976,845,435 equity shares are held by Essar Steel Asia Holdings Limited, Mauritius (Previous year 1,914,195,440 equity shares are held by Essar Steel Limited, Mauritius) the holding Company.

 

d)    Details of shareholders holding more than 5% shares in the Company

 

Particulars

31.03.2013

 

Number

% of Holding

Equity Shares

 

 

Essar Steel Asia Holdings Limited1

1976845435

70.66

Essar Steel Limited, Mauritius1

118902096

4.25

Imperial Consultants & Securities Private Limited 1.2

421760954

15.08

Shares under Trust (Venkatraman Govind Raghavan)

191517500

6.85

 

2709025985

96.84

 

·         Number of shares includes 1,911,568,602 shares acquired from Essar Steel Limited, Mauritius and 10,855,257 shares from Imperial Consultants and Securities Private Limited, for which transfer of shares in demat account is pending and in respect of such shares Essar Steel Asia Holdings Limited (ESAHL) has made necessary declaration under Section 187C of the Companies Act, 1956 regarding beneficial ownership of such shares.

 

·         As per the Scheme of Arrangement (SOA) between Essar Investment Limited (EIL) and Imperial Consultants and Securities Private Limited (Imperial) sanctioned by the Hon'ble High Court at Mumbai vide order dated 20th January, 2012 and by Madras High Court vide order dated 5th March, 2012, Investment and Finance Division of EIL has been demerged into Imperial. In terms of said SOA, assets and liabilities of Investment Division of EIL stood transferred in the books of Imperial with effect from 30th March, 2012. However, pending completion of required formalities for transfer of shares, name of EIL is appearing in the register of members of the Company. Company has received a declaration from EIL and Imperial under section 187C of the Companies Act, 1956 regarding beneficial ownership of the said shares.

 

Particulars

31.03.2013

 

Number

% of Holding

Preference Shares

 

 

IFCI Limited

22116599

50.73

Imperial Consultants and Securities Private Limited

16940180

38.85

ICICI Bank Limited

--

--

 

39056779

89.58

 

e)     Aggregate number of Bonus Shares issued, shares issued for consideration other than cash and shares bought back during the period of five years :

 

Particulars

31.03.2013

Equity  Shares allotted as fully paidup pursuant to scheme of Amalgamation

1073249784

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

 

31.03.2013

31.03.2012

I.              EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

 

28418.000

26711.100

(b) Reserves & Surplus

 

42617.100

63823.500

(c) Money received against share warrants

 

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

 

0.000

0.000

Total Shareholders’ Funds (1) + (2)

 

71035.100

90534.600

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) long-term borrowings

 

228179.200

166645.400

(b) Deferred tax liabilities (Net)

 

0.000

0.000

(c) Other long term liabilities

 

1622.900

1909.900

(d) long-term provisions

 

6559.400

4581.400

Total Non-current Liabilities (3)

 

236361.500

173136.700

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

 

42871.000

76614.000

(b) Trade payables

 

76458.300

43870.500

(c) Other current liabilities

 

50425.000

39178.200

(d) Short-term provisions

 

731.800

4258.700

Total Current Liabilities (4)

 

170486.100

163921.400

 

 

 

 

TOTAL

 

477882.700

427592.700

 

 

 

 

II.            ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

 

287660.800

205879.400

(ii) Intangible Assets

 

190.500

222.100

(iii) Capital work-in-progress

 

60047.700

112951.700

(iv) Intangible assets under development

 

0.000

0.000

(b) Non-current Investments

 

10333.100

5398.700

(c) Deferred tax assets (net)

 

17526.600

3237.700

(d) Long-term Loan and Advances

 

6851.900

8777.200

(e) Other Non-current assets

 

10333.100

9589.700

Total Non-Current Assets

 

392943.700

346056.500

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

 

0.000

0.000

(b) Inventories

 

38475.200

40446.400

(c) Trade receivables

 

6812.700

5896.600

(d) Cash and cash equivalents

 

6231.100

6509.600

(e) Short-term loans and advances

 

28409.200

22502.900

(f) Other current assets

 

5010.800

6180.700

Total Current Assets

 

84939.000

81536.200

 

 

 

 

TOTAL

 

477882.700

427592.700

 

 

SOURCES OF FUNDS

 

 

 

31.03.2011

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

 

 

25710.000

2] Share Application Money (Pending Allotment)

 

 

2482.400

3] Reserves & Surplus

 

 

77329.800

4] (Accumulated Losses)

 

 

0.000

NETWORTH

 

 

105522.200

LOAN FUNDS

 

 

 

1] Secured Loans

 

 

216732.300

2] Unsecured Loans

 

 

7111.600

TOTAL BORROWING

 

 

223843.900

DEFERRED TAX LIABILITIES

 

 

607.800

 

 

 

 

TOTAL

 

 

329973.900

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

 

 

102544.300

Capital work-in-progress

 

 

175083.900

 

 

 

 

INVESTMENT

 

 

3970.200

DEFERRED TAX ASSETS

 

 

638.700

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
 
 
52225.000

 

Sundry Debtors
 
 
5147.600

 

Cash & Bank Balances
 
 
9210.000

 

Other Current Assets
 
 
11296.000

 

Loans & Advances
 
 
30251.100

Total Current Assets
 

 
108129.700

Less : CURRENT LIABILITIES & PROVISIONS
 

 
 

 

Sundry Creditors
 
 
24331.500

 

Other Current Liabilities
 
 
33101.200

 

Provisions
 
 
2960.200

Total Current Liabilities
 

 
60392.900

Net Current Assets
 

 
47736.800

 

 

 

 

MISCELLANEOUS EXPENSES

 

 

0.000

 

 

 

 

TOTAL

 

 

329973.900

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2013

31.03.2012

31.03.2011

 

SALES

 

 

 

 

 

Income

150384.500

162738.700

123015.000

 

 

Other Income

3011.600

5367.900

5260.900

 

 

TOTAL                                     (A)

153396.100

168106.600

128275.900

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Cost of Materials Consumed

89941.100

89340.700

 

 

Purchase of Traded Goods

2055.900

1670.300

 

 

 

Energy Cost

28223.400

30466.800

 

 

 

Changes in Inventories of Finished Goods, Work in Progress and Stock in Trade

(270.700)

9692.700

 

 

 

Employee Benefits Expenses

3117.400

3899.800

 

 

 

Manufacturing and Asset Maintenance

4457.500

4415.800

 

 

 

Administrative Expenses

2287.700

3562.600

 

 

 

Selling & Distribution Expenses

5360.700

5683.100

 

 

 

Exchange Variation and Derivative Losses (net)

6589.000

3723.000

 

 

 

Exceptional Item

13465.500

0.000

 

 

 

TOTAL                                     (B)

155227.500

152454.800

110948.900

 

 

 

 

 

Less

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

(1831.400)

15651.800

17327.000

 

 

 

 

 

Less

FINANCIAL EXPENSES                                    (D)

24809.800

18629.900

12187.400

 

 

 

 

 

 

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

(26641.200)

(2978.100)

5139.600

 

 

 

 

 

Less

DEPRECIATION/ AMORTISATION                     (F)

15622.100

9863.700

8914.600

 

 

 

 

 

 

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

(42263.300)

(12841.800)

(3775.000)

 

 

 

 

 

Less

TAX                                                                  (H)

14413.900

(326.200)

2112.300

 

 

 

 

 

 

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

(27849.400)

(12515.600)

(1662.700)

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

FOB Value of Exports

36927.900

41557.500

20227.600

 

 

Others

2472.900

1872.600

1622.200

 

TOTAL EARNINGS

39400.800

43430.100

21849.800

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

33809.200

32993.200

8835.600

 

 

Production Consumables, Stores and Spares and Fuel

6540.200

9387.800

28469.100

 

 

Capital Goods

3315.500

3762.700

11199.600

 

 

Traded Goods

0.000

17.300

358.300

 

TOTAL IMPORTS

43664.900

46161.100

48862.600

 

 

 

 

 

 

Earnings Per Share (Rs.)

(10.59)

(4.84)

(0.72)

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2013

31.03.2012

31.03.2011

PAT / Total Income

(%)
(18.16)

(7.45)

(1.30)

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
(28.10)

(7.89)

(3.07)

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
(11.34)
(4.46)
(1.79)

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
(0.59)
(0.14)
(0.04)

 

 
 

 

 

Debt Equity Ratio

(Total Debt /Networth)

 
3.82

2.69

2.12

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
0.50

0.50

1.79

 

 

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

 

DEBT EQUITY RATIO

 

Particular

31.03.2012

31.03.2013

 

Rs. In Millions

Rs. In Millions

Share Capital

26711.100

28418.000

Reserves & Surplus

63823.500

42617.100

Net worth

90534.600

71035.100

 

 

 

long-term borrowings

166645.400

228179.200

Short term borrowings

76614.000

42871.000

Total borrowings

243259.400

271050.200

Debt/Equity ratio

2.687

3.816

 

 

 

YEAR-ON-YEAR GROWTH

 

Year on Year Growth

31.03.2011

31.03.2012

31.03.2013

 

Rs. In Millions

Rs. In Millions

Rs. In Millions

Sales

123015.000

162738.700

150384.500

 

 

32.292

(7.591)

 

 

 

 

 

NET PROFIT MARGIN

 

Net Profit Margin

31.03.2011

31.03.2012

31.03.2013

 

Rs. In Millions

Rs. In Millions

Rs. In Millions

Sales

123015.000

162738.700

150384.500

Profit

         (1662.700)

(12515.600)

(27849.400)

 

(1.35%)

(7.69%)

(18.52%)

 

 

 

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

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

Yes

 

 

UNSECURED LOAN:

 

Particulars

 

As on 31.03.2013

Rs. in Millions

As on 31.03.2012

Rs. in Millions

LONG TERM BORROWINGS

 

 

Dollar / Rupee Notes

 

 

--From Banks

1974.500

1942.700

--From others

29.700

37.900

Buyers Credit for Capital Expenditure

0.000

6.900

Sales Tax Deferral Loan

338.800

338.800

Long Term maturities of Finance Lease obligations

18.300

29.600

Inter Corporate Deposits

 

 

--From Others

541.700

0.000

SHORT TERM BORROWINGS

2903.000

 

Inter corporate Deposits from related parties

11284.800

0.000

 

 

 

Total

14187.800

2355.900

 

 

INDEX OF CHARGE:

 

Sr. No.

Charge ID

Date of Charge Creation/Modification

Charge amount secured

Charge Holder

Address

Service Request Number (SRN)

1

10450965

28/09/2013

60,000,000,000.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B85701035

2

10452159

26/09/2013

866,933,200.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B86276730

3

10449813

24/09/2013

2,506,340,000.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B85302016

4

10452157

13/09/2013

3,250,000,000.00

INDIAN OVERSEAS BANK

229, BAKHTAWAR, GROUND FLOOR, NARIMAN POINT, MUMBAI – 400 021, MAHARASHTRA, INDIA

B86275625

5

10448499

10/08/2013

7,000,000,000.00

YES BANK LIMITED

NEHRU CENTRE, 9TH FLOOR, DISCOVERY OF INDIA, DR. A B ROAD. WORLI, MUMBAI – 400 018, MAHARASHTRA, INDIA

B84760941

6

10441614

29/07/2013

5,384,700,000.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B81456519

7

10433365

26/06/2013

1,320,000,000.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B78096948

8

10433227

05/06/2013

5,000,000,000.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B78043742

9

10423211

02/05/2013

500,000,000.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B74225921

10

10418593

12/04/2013

816,637,500.00

SBICAP TRUSTEE COMPANY LIMITED

202, MAKER TOWER, 'E', CUFFE PARADE, COLABA, MUMBAI – 400 005, MAHARASHTRA, INDIA

B72850175

 

 

NATURE OF OPERATION:

 

Subject owns and operates an integrated steel manufacturing unit for manufacturing of fiat rolled products at Hazira - District Surat, a Precoated facility at Pune, a Beneficiation Plant at Kirandul, Slurry Pipeline, Peptization Plant at Vizag and at Paradeep. The Company is also in the process of setting up a Beneficiation Plant at Dabuna (Odisha) and another Peptization Plant at Paradeep. The Company also operates Processing and Distribution centres, Hypermarts and Express Marts at various locations across India.

 

 

OPERATIONS:

 

Year 2012 was a gloomy year for world economy as the recessionary trends continued globally. With Eurozone crisis and China slowdown, industries observed much weaker growth. Indian steel industry took a major hit due to a slower global and ban on iron ore mining in Karnataka as well as Coal scam issues.

 

Post expansion to 10 MTPA Steel Complex, your Company become the largest single location fiat steel producer in the country and the fourth largest such producer globally. With Blast Furnace and Corex joining the previous DRI (Direct Reduced Iron) technology, your company has now greater flexibility in usage of raw materials. Additionally, the by-product gases generated by these two new units can suitably replace natural gas at several places in your integrated steel complex, thereby reducing dependence on expensive natural gas sources from external providers. Your Company is now able to offer the entire range of fiat products - from thin strips to pipes as well as cold rolled and coated products.

 

 

GLOBAL OVERVIEW:

 

FY 2013 remained a sluggish year for the global steel industry. Overall, it grew by a mere 0.72% during 2012 as per the latest World Steel Association estimates -total crude steel production in 2012 was 1,547 million MT vis-a-vis 1,536 million MT in 2011.

 

Country-wise performance largely reflected disparities linked to macro-economic environment and operating dynamics in respective economies. China continued to maintain its dominance with a 46.3% share in total crude steel production exhibiting a 2.1% growth over 2011 – linked mainly to domestic demand. Japanese (2nd largest producer) steel output contracted by 0.4% despite heavy support for exports from a devalued currency. United States, India and Russia - the other top producers - grew by 2.7%, 5.6% and 2.2% respectively in terms of crude steel production. Economic recession in Europe implied contraction in local steel demand. There were scattered opportunities in other geographies.

 

Capacity utilization rates remained below 80% -exhibiting a serious challenge facing the industry. Correction in prices of primary raw materials - i.e., Iron Ore and Coking Coal - lagged the ability of the industry to sustain revenue realization. This created margin pressure and compounded financial problems for the steel industry. Consequently, capacity outages, particularly in Europe, became inevitable due to prevailing lackluster demand and high operating cost. Overall, industry performance hinged upon the ability of producers to extend competitive prices to customers often sub-optimal to operating cost.

 

The outlook for FY 2014 is even more difficult than FY2013. Global steel production is expected to remain fiat to moderate growth. China is expected to maintain its momentum in steel production - a core sector offering large-scale employment. All other regions of the world are expected to be saddled with over-capacity and are expected to curtail production in order to remain market-relevant. Global steel consumption is likely to remain fiat to decline as Fixed Asset Investment and steel intensity decline during the FY 2014.

 

 

DOMESTIC OVERVIEW:

 

India's overall steel consumption grew by only 3.2% in 2012 to around 72 million MT due to subdued demand from across consuming sectors like infrastructure and construction. The domestic crude steel production grew by 5.6% in 2012 to 78 million MT.

 

Many producers in India commissioned additional capacity during the year. Further capacity addition, in both public as well as private sector, is planned during FY2014 due to anticipated future demand, particularly considering that India's per capita consumption low. India's per capita steel consumption is still too low (59 kg compared to 1157 kg in South Korea, 507 kg in Japan, 460 kg in China and 235 kg in the North America).

 

However, in the short to medium term, this will lead to excess domestic capacity and is likely to create additional margin pressure for the Indian steel industry already saddled with high costs and cheap imports especially from Japan and South Korea, which enjoy a preferential import duty.

 

 

AWARDS AND ACCOLADES:

 

·         National Safety Award from JCSSI "ISPAT SURAKSHA PURASKAR 2013" for the year 2011 and 2012 from Joint Committee on Safety, Health & Environment (JCSSI) under various categories for Outstanding Performance in the field of HSE.

·         HSE topped at India Manufacturing Excellence Award (IMEA) assessment audit with a score of 77.7 and has set a benchmark among all Industries & Topped Metal Sectors across India in a survey conducted by The Economic Times - India Manufacturing Excellence Awards in Partnership with Frost & Sullivan.

·         Gujarat Safety Council in association with Directorate of Industrial Safety & Health Awarded Dr. Anil Jain, "Safety Man of the Year 2012". The Award was presented by Shri. Saurabh Patel, Hon'ble Minister, Gujarat State Govt. at 34th Annual Safety Conference organized at Ahmedabad.

·         "Safety Innovation Award-2012" from the Institution of Engineers (India). Award presented by Dr. Narendra Jadhav - Member Planning Commission at inaugural function of "Safety Convention 2012: Safety in Sustainable Development".

·         Runners up for "Excellence in Safety - Large Enterprises" Manufacturing Today Awards 2012.

·         Green Rating Project, Three Leaves Award, the Highest among Indian Steel Plants Awarded by Center for Science and Environment (CSE). This is a very prestigious award and the Company is rated 2nd amongst 22 steel plants were evaluated. The award was presented by Shri. Montek Singh Ahluwalia, Dy. Chairperson, Planning Commission and Smt. Jayanthi Natarajan, Union Minister of State for Environment & Forests in

·         4th June 2012.

·         Green Environmental Contest awarded by Baroda Productive Council for the year 2011­12 and Essar Steel stood first amongst all the industries of Gujarat.

·         Gold Safety Award 2012 for excellent achievements in Safety management system from Greentech Foundation, New Delhi.

·         Silver Environment Award 2012 for excellent achievements in Environment Management system from Greentech Foundation, New Delhi

·         Best Safety Practices Award 2012 from Deccan Chamber of Commerce, Industries and Agriculture , Pune.

·         "Gold Award - Metals Sector, Mega Large Business" by Indian Manufacturing Excellence Awards-2012 sponsored by The Economic Times.

·         Quality Circle Forum Of India (QCFI) - Baroda (Gold Award & Sarvashetha Puraskar Award).

·         Gold Award in State Level 5'S' competition organized by QCFI Baroda.

·         Diamond Award in Lean Six Sigma Presentation organized by Concept Business Excellence.

·         Commendation award in QCI-DL Shah National Award for Quality.

·         Steel Hazira bagged FICCI Water Efficiency Award at the Water Awards 2012 presented by FICCI (Federation of Indian Chambers of Commerce & Industry), in association with

HSBC.

·         The Company has been certified with a PLATINUM AWARD second time in a row by Caterpillar worldwide. Last year we had got the Platinum Award and it was a quite a challenge to retain the Platinum Award this time.

·         SAP Awards for Customer Excellence (ACE) 2012 recognized the Company for being the "Best Run Manufacturing Organization" at a ceremony in Mumbai on 19th October, 2012.

 

CERTIFICATE AND RECOGNITION:

 

·         Gujarat Safety Council in association with Directorate of Industrial Safety and Health Govt. of Gujarat awarded Essar Steel India Ltd., Safety Honour and Merit Certificates for the year 2011:

·         HRC Division: Certificate of Honour - for achieving more than 3 Million Accident Free Man Hours.

·         HBI Division: Certificate of Merit - for achieving more than 2 Million Accident Free Man Hours.

·         Pipe Division: Certificate of Merit - for achieving more than 2 Million Accident Free Man Hours.

·         National Safety Council of India recognized Essar Steel India Ltd., Hazira for Landmark Safety Achievement of 35.55 Million LTI Free Man hours.

·         41st National Safety Day Celebrations of Essar Steel India Ltd. recognized by National Safety Council of India by publishing clips in Front Cover Page of Industrial Safety Chronicle (Vol. No. XLIII April-June 2012).

·         Essar Steel India Limited Hazira received recognition from WSA regarding participation in their CO2 data collection program.

·         Certificate of Appreciation for Commendable Fire Fighting Operation at IOCL Terminal, Hazira, from Shri. D. C. Chaudhari, Director-Directorate of Industrial Safety & Health Gujarat on the occasion of Shram Awards, State Level Prize Distribution Ceremony held at Surat, Gujarat. For Commendable Fire Fighting Operation by Essar Steel Team at IOCL Terminal Fire, Hazira, Mr. Rakesh Chaturvedi (Sr. Manager-Fire Services EStIL) & Mr. Narendra Doot (Asst. Manager-Fire Services, EStIL) received Certificates for their valiant Heroism from Shri. Ganpat Vasava, Hon'ble Cabinet Minister, Govt. of Gujarat on the eve of National Republic Day at Surat.

·        The Company presented 3 Projects on Environment Improvement at Vibrant Gujarat Summit held at Gandhinagar by Govt. of Gujarat. The initiatives were well appreciated by Gujarat State Environment Minister, Gujarat Pollution Control Board (GPCB) Chairman & Member Secretary.

·         Company's Carbon Management Practices were lauded at the International Carbon Disclosure Project (CDP), a recent event held at the Bombay Stock Exchange (BSE) at Mumbai. Under Carbon Disclosure Leadership Index (CDLI) Essar Steel scored 80 out of 100.

·          Recognition of three Essar Steel Employees under various categories in Safety Competition organized by Gujarat Safety Council. The Awards were presented to them in 34th Annual Safety Conference organized by Gujarat Safety council in association with Directorate of Industrial Safety and Health at Ahmedabad.

·         Recognition of two Essar Steel Employees' Poster, in Annual JCSSI Calendar Competition 2013. These posters were published in the Annual JCSSI Calendar for the year 2013.

·         The Company participated in Workshop "Strategic Development towards Best Safety Practices and Human Interface" Organized by Essar Power Vadinar in Coordination with Directorate of Industrial Safety and Health, Govt. of Gujarat.

·         The Company participated in Conference organized on "Safety for Sustainable Manufacturing Growth" by Federation of Indian Chambers of Commerce & Industry (FICCI) inaugurated by Shri. Mallikarjun Kharge, Union Minister for Labour and Employment.

·         Tata Steel Executives visited our Hazira Complex to witness our Benchmark HSE Practices & Initiatives. Quote, "We are thankful to you for providing us the opportunity of getting exposed to the best of safety practices embedded in Essar Culture", Unquote.

·         As part of Confederation of Indian Industry (CII) Mission on Best Practices in Safety, Health & Environment (SHE) to Hazira, Essar Steel promoted Best HSE Practices across the State of Gujarat.

 

 

FIXED ASSETS:

 

Tangible Assets

           

·         Freehold Land

·         Leasehold Land

·         Buildings

·         Plant and Machinery

·         Furniture and Fixtures

·         Office Equipment

·         Computers

·         Vehicles

·         Ships and Vessels

·         Railway Sidings and Wagons

·         Aircraft

 

Intangible Assets        

Software

 

 

ARTICLE:

 

ESSAR STEEL LAUNCHES SPECIALISED COLOR- COATED PRODUCTS IN KERALA

 

August 14, 2013

 

Kochi:

 

Essar Steel, one of India’s largest integrated steel producers, today announced the launch of high quality, color-coated products, specially developed for the Kerala market. These specialized steel products will largely be used in the housing and industrial resorts segment in the region. The products include roofing and wood-finished steel Products.

These color-coated products are created to withstand the extreme weather conditions in Kerala through single-skin roofing and double-skin sandwich panels for mobile shelters and dwelling units. These are extremely durable and resistant to high corrosion, peeling and flaking. Easy to install and maintenance-free, these color-coated products offer superior aesthetics to the structure. Besides being thermally efficient, the lightweight products are structurally strong and have the ability to resist extremely strong winds. Stringent quality control tests have ensured performance under all-weather conditions.


Commenting on the launch of the product, Mr. Dilip Oommen, Managing Director and CEO, Essar Steel India, said, “Essar Steel is continually innovating to meet the emerging needs of its customers. The launch of color-coated products in Kerala is a step in that direction. Essar Steel’s color-coated products ideally suit local conditions.”

Mr. R V Sridhar, Business Head, Downstream and Automobile, Essar Steel India, said, “Kerala is an important market for our products. The market size of Kerala is about 100,000 tonnes per annum and is growing at 15%. We are confident with the quality of products and with the launch of these products; we are targeting a market Share of about 25%

 

Mr. Mitesh Shah, CEO, Pune facility, added, “The state-of-the-art, color-coated facility of Essar Steel has been designed to manufacture world class, color-coated products that match international standards. The plant has an annual production capacity of 400,000 tonnes. The company’s products has found acceptance in quality conscious European, Middle East and African markets.”

 

Tested for its superior quality, these products are manufactured with a high-precision pre-painting process, adhering to stringent JIS, ASTM, ECCA, SNI and EN standards. They amalgamate many desirable qualities like strength, enhanced corrosion resistance, aesthetic appeal and promise longer life to the product.

These products are currently available in a variety of shades and patterns. There are more than 4,800 shades ranging from RMP, SMP, PVDF, Wrinkle, Wood Finish and ARS. The products find varied application in the construction and infrastructure industry, white goods and automotive industry depending on the life cycle and environment. Currently, these products are being largely exported to Europe, Russia and African countries.

In order to ensure consistent supply of the product, the company has streamlined its distribution network and enhanced its supply chain management in the region. The company has also appointed distributors to ensure the availability of the product.

 

ESSAR STEEL TO RAISE US$2 BILLION THROUGH PRE-EXPORT FINANCING

 

August 01, 2013

 

Mumbai:

 

Essar Steel is proposing to raise US$2 billion through pre-export finance and the proceeds will be utilised for pre-payment of existing rupee debt, for which the company has received necessary approvals. This is in continuation of Essar Steel’s strategy to dollarize the balance sheet.  The company had earlier raised US$1 billion through External Commercial Borrowing (ECB) route that has resulted in an annual saving of Rs 4500.000 millions.

 

The move to raise US$2 billion will help de-risk the company’s balance sheet as the revenues of Essar Steel are dollar denominated or dollar linked and hence provides as a natural hedge for dollar debt.

 

Essar Steel is in a unique position to benefit from the changes in the rupee–dollar exchange rate. The expansion of the facilities at Hazira was undertaken when the Indian Rupee was trading at Rs 40 to a dollar and now with the exchange rate near Rs 60 to a dollar, the company will save significantly by dollarising the balance sheet at the current exchange rate.

 

With this financing, the company would have dollarised US$3 billion of its debt, which will lead to significant benefits. These include reduction of average interest cost from rupee linked rate to average interest rate of 8.5%, which will result in a large interest saving of approximately Rs. 13000.00-15000.000 million annually. Further the company will elongate the average maturity of its debt from 3.5 to 6.5 years.

 

Commenting on this development, Mr. Ashutosh Agarwala, CFO and Director (Finance), Essar Steel India, said, “We are continuing with our strategy to dollarise our balance sheet, bring down interest cost and elongate maturity of our debt in line with our peers."

 

Essar steel has invested Rs 370.000 millions for setting up a 10 million steel plant at Hazira, Gujarat. Once the entire Odisha pellet complex is commissioned fully, which is expected very soon, it will make Essar Steel one of the lowest costs integrated steel facilities in the country.

 

 

NEWS:

 

ESSAR STEEL RAISES $1 BN OVERSEAS TO LOWER RUPEE DEBT

 

Essar Steel has raised $1 billion through external commercial borrowings (ECB) to part-retire its rupee-denominate debt. The move will help the Ruias-owned firm to de-risk balance sheet from fluctuating currency rates and save about Rs 4500.000 Millions per annum on interest outgo.

 

"As a result of the dollarising its rupee debt, Essar Steel will also save approximately Rs 4500.000 Millions per annum in interest. The company will also gain significantly in terms of additional liquidity and substantial savings in interest cost," the steel maker said in a statement.

 

Essar Steel, which has a total of 14 million tonnes per annum (mtpa) installed steel-making capacity in India and overseas, generates a good part of revenue through exports.

 

The domestic price of the alloy is also largely determined by the landed cost of imported alloy.

 

The dollar debt, priced at a competitive LIBOR-linked rate, has an average maturity of seven years. Essar Steel reportedly has $4 billion debt on its book.

 

A substantial part of Essar Steel's debt is rupee-denominated as against the average 30-40 per cent of the domestic peers.

 

"Consequently, average maturity of debt of the company has also nearly doubled. The earnings, being dollar linked, would serve as a natural hedge to reduce the risks associated with currency fluctuations," it said, adding large lenders like ICICI Bank and IDBI subscribed the ECBs.

 

"Steel industry globally is going through a phase of weak demand resulting in lower realisations. It is imperative that the debt of the company is aligned to the earning currency thereby reducing volatility in earnings," said company CEO Ashutosh Agarwala. "The dollarisation of rupee debt would not only de-risk our balance sheet but also elongate maturity and reduce interest costs."

 

 

ESSAR STEEL FRONT-RUNNER IN RACE FOR STEMCOR INDIA’S ASSETS

NEW DELHI: Ruais-promoted Essar Steel is the front-runner to clinch Stemcor India's assets for which at least a dozen domestic and overseas firms, including Tata Steel, Vale and JSW Steel are also in the fray.

In a meeting held last week in London, Stemcor's senior management had asked Essar Group founder Ravi Ruia to make an upfront payment and take away the assets, which have an estimated enterprise value of USD 800 million, a source told PTI.

Though it could not be immediately ascertained what Ruia had communicated to Stemcor, the source said the British trading firm in the meantime has initiated the process of auctioning the assets which include an iron ore mine and a pellet plant, both located in Odisha.

Essar Steel has the brightest chance of winning the assets as Stemcor management has been continuously favouring Ruias-led firm based on their mutual understanding and faith accruing from a long-time association, the source added.

Stemcor had its first joint venture in India with Essar Steel and jointly, these two firms set up a 3 million tonnes per annum (mtpa) pellet plant at Vizag in Gujarat back in 2001 though Stemcor, later in 2003, sold its stake to Essar Steel.

However, when contacted an Essar Steel spokesperson said: "We keep looking at growth opportunities. However, it is not our policy to comment on any specific proposal."

The assets would help Essar Steel to further consolidate its raw material needs and help the company to hedge itself from the frequent price fluctuations of iron ore.

Meanwhile, almost all Indian steel makers, including Tata Steel, JSW Steel, JSPL, Electrosteel Castings, Adhunik Metaliks, have evinced interest to buy out Stemcor India's assets. Aditya Birla Group's Essel Mining and Industries and Anil Agarwal's Vedanta are also in the race along with Brazilian miner Vale.

Stemcor has asked all of them to place their initial bids and may allow them to carry out due diligence before putting their final bids. Auction is 6-8 weeks away, the source said.

Earlier in the day, JSPL's Chairman Naveen Jindal said that his company would be "keen" to buy the assets provided those come at an "attractive price".

Stemcor has majority stake in Aryan Mining and Trading Corporation (AMTC), which has 100 MT of iron ore reserves with the licence to mine three mtpa. It also has 10 per cent stake in Mideast Integrated Steel (MISL) in Odisha. MISL has an iron ore mine with a current output of four mtpa.

Stemcor has a subsidiary, Brahmani River Pellets Ltd (BRPL), which has a four mtpa beneficiation plant at Barbil, Odisha, and a pellet plant complex at Jajpur, connected by a 220 km underground slurry pipeline.

 

ESSAR STEEL TO RAISE RS 22410.000 MILLIONS BY SELLING 3 NON-CORE ASSETS

 

Essar Steel aims to raise a minimum of Rs 22410.000 Millions by selling three non-core assets for paring some of its $4 billion (around Rs 244000.000 Millions) debt and reducing the strain on its balance sheet.

 

The Ruias-promoted leading steelmaker has convened an extraordinary shareholders' meeting on August 24, seeking their approval.

 

The move was necessitated due to 2.22 times rise in Essar's standalone net loss in the last financial year to Rs 27850.000 Millions. Its interest payments had also risen by nearly 41 per cent to Rs 31400.000 Millions, while total expenditure, at Rs 150790.000 Millions, had overshot its total income, at Rs 150380.000 Millions.

 

"In order to improve liquidity, reduce debt burden and to focus on the core business area, a financing plan has been worked out. Under this plan it is proposed to sell out or otherwise transfer some of the undertakings/assets/projects to strategic investor/SPV company, ongoing concern basis," the company said in its notice for the EGM.

 

Simultaneously, the company will sign long term supply/ service agreement with the buyer to ensure smooth functioning of operations.

 

According to the plan, Essar is in advanced stage of negotiations with Inox Air Products to sell one its undertaking which is in the business of production of oxygen, nitrogen and argon etc for captive supply of company's needs at its Hazira plant "for not less than Rs 800 crore".

 

It is also planning to sell 1.53 million tonnes per annum under construction coke oven plant project and 253 km long Odisha slurry pipeline project between Dabuna and Paradeep for "not being lower than (their) book value".

 

The book values of coke oven plant and slurry pipeline are Rs 642.05 crore and Rs 799.82 crore, respectively.

 

A company spokesperson said that "these are none core assets to steel making and forms insignificant part of the total assets of the company. Essar Steel proposes to outsource these assets since it can be operated more efficiently by the company's specialising in these activities."

 

Early this month, the company had said it will be raising $2 billion through pre-export finance to retire rupee-denominated debt. The move is aimed at freeing Essar's balance sheet from fluctuation in currency rates and ensuring at least Rs 850 crore annual savings on interest payments.

 

The company already has RBI permission to raise upto $2 billion through export securitisation and is aiming to complete it during the current fiscal. In June, the company had raised $1 billion through External Commercial Borrowing (ECB), which will result in Rs 450 crore savings annually.

 

Essar has invested about Rs 37,000 crore to increase its steel making capacity to 10 MTPA from 4.6 MTPA. The new capacity was envisaged as an integrated facility with dedicated iron ore pellet supplies from a pellet plant in Odisha, a dedicated port, coal based power plant and a 400 kva transmission line.

 

 

ESSAR STEEL HOPES TO RAISE $2 BN FY14 END TO PARE RE DEBT

 

Mumbai: Essar Steel has said it hopes to raise USD 2 billion through pre-export finance by the end of the current financial year to retire part of its rupee debt, a company official has said.

 

Pre-export funds are borrowed against confirmed orders from foreign buyers.

 

"At present, we are in talks with financial institutions. We hope to raise the money by the end of the financial year," an Essar Steel official said.

 

Earlier, the company had said it planned to raise USD 2 billion through pre-export finance to retire rupee-denominated debt, which will ensure at least Rs 8500.000 millions of annual savings through lesser interest outgo.

 

The company has around 20,000 crore debt on its books and a significant portion of it is rupee-loans.

 

The official said that recent rupee fluctuation will not impact its future fund raising plans in dollar terms as it has natural hedge against the forex fluctuation.

 

When a company exports and imports, it is said to have natural hedge as any rise in import price due to fall in the rupee gets compensated through gain in exports.

 

According to the firm, interest cost will come down through refinancing of debt from around 12.5 percent to 6-7 percent.

 

"Not only the interest cost will come down, this will also help us increase the tenor of these loans," the official said.

 

The firm had already raised USD 1 billion through external commercial borrowings (ECB) in June with an annual cost saving of Rs 4500.000 milions

 

Essar Steel has a capacity of 14 million tonne per annum with presence in India, Canada, the US, the West Asia and Asia.

 

 

ESSAR STEEL PROMOTERS TO INFUSE UP TO RS 10000.000 MILLIONS EQUITY

 

Promoters of Essar Steel will infuse an additional equity of up to Rs 1.0000.000 millions into the loss making steelmaker by acquiring its shares on a preferential basis. The move is aimed at meeting the company's capex and operational requirements as well as strengthening the capital base, Essar said in its Annual General Meeting notice, while seeking shareholders approval. The AGM is scheduled to be held tomorrow in Hazira, Gujarat.

The capital infusion by the promoters will also help the company in reducing strain on its balance sheet as its consolidated net loss had widened by over 2.5 times in the last fiscal to Rs 51050.0000 millions. Its interest payments had also risen by over 32 percent to Rs 29550.000 millions, while the current liabilities (Rs 214984.800 millions) have exceeded its current assets (Rs. 95930.190 millions) by Rs. 119052.900 millions in 2012-13.

The unlisted leading steelmaker has proposed to make the preferential allotment in next 12 months to the promoters. Following this, promoters' stake in the company will increase marginally by 0.18 percent to 97.45 percent.

"Resolved that...consent of the company be and is hereby accorded to the Board of Directors of the company to issue and allot...on preferential basis such number of equity shares...for an amount not exceeding Rs 10000.000 millions to Essar Steel Asia Holdings Ltd, Mauritius/Essar Steel Ltd, Mauritius...," the company said in the AGM notice.

The Ruia family, led by Shashi and Ravi Ruia, are the promoters of the company through Essar Steel Asia Holdings Ltd, Mauritius. According to the Annual Report of Essar, its promoters infused Rs.7648.600 millions equity into the company between November, 2012 and June, 2013 by acquiring over Rs. 168.100 Millions shares.

As of March 2013, the company's paid up equity capital was Rs 2,7982.000 millions "In order to raise balance funds and to meet fund requirements, enabling resolution is required as proposed at item no 10 of the (AGM) notice," the company said.

The company said it has approached a Chartered Accountant for valuation of shares and number of shares to be allotted would be decided accordingly. Last month, the company had taken shareholders approval to raise a minimum of Rs. 22410.000 Millions by selling three non-core assets for paring some of its USD 4 billion (around Rs. 260000.000 millions) debt and reducing the strain on its balance sheet.

Essar also has plans to raise USD 2 billion through pre-export finance to retire majority of its rupee-denominated debt and is aiming to complete its during the current fiscal. The move would help the company in reducing interest costs by about Rs. 8500.000 millions, enhancing loan tenure and negating the impact of fluctuation in currency rates. The company, which has invested Rs 370000.000 millions to increase its capacity to 10 MTPA, has already secured Reserve Bank's permission for raising dollar loans

 

ESSAR STEEL TO BRING DOWN RS 220000.000 MILLIONS DEBT

After spending a massive Rs 375000.000 millions in expanding capacities across its units in India, Essar Steel is now looking at options to bring down its borrowings.

The company is now looking at raising debt outside of India. Till recently it had considered listing itself on the London Stock Exchange (LSE). Essar Energy, another group company, is already listed on the LSE. Talking about accessing the debt or a possible listing,  Amit Agarwal, CFO, Essar Steel, said: “As a company, one would always look at the opportunities that are good for us. We keep on talking, understanding whether there is an opportunity that exists.” He, however, categorically denied listing plans for the company and said, “The debt markets are better than the equity markets currently”.

Given the cheaper options in the debt market to raise money, Essar Steel is looking more inclined towards this possibility. Agarwal said, “RBI has also allowed companies to borrow in foreign currency and reduce the borrowing costs. We are also evaluating such opportunities. As a large, company we will evaluate all options.”

In an internal exercise, Essar Steel got itself valued from an independent bank recently which pegged it at $9 billion, or Rs. 495000.000 millions

Essar Steel was listed on the Indian stock markets till 2007 when the promoters decided to take the company private. Investment banking sources say that till six months ago the company was looking at the London market for listing before it turned to debt markets, given the global equity markets’ scenario and subdued valuations.

The company has a 10-million-tonne steel plant in Hazira and beneficiation and pellet plants on the east coast of India. The total debt on its books is Rs 220000.000 millions. JSW Steel, which recently announced the merger of JSW Ispat Steel with self, will have a total debt of Rs 252000.000 million after the merger. Currently at 10 million tonnes, the debt of JSW’s books is Rs 166000.000 millions. Essar has spent Rs 375000.000 millions  in its expansion at its flagship Hazira Complex in Gujarat and for the pellet and beneficiation plants on the east coast of India. Taking into accounts its operations in the US and Canada, its total steelmaking capacity stands at 14 million tonnes.

Essar Steel made a loss of Rs 12510.000 millions in 2011-12. Because of the rapid expansion, the interest costs on the loans have been weighing heavy on the company. In FY12 alone, the interest costs were up 68 per cent, at Rs 22350.000 millions, when the company registered sales of Rs 160560.000 millions.

ESSAR STEEL’S STATEMENT ON RAILWAY FREIGHT ISSUE

September 18, 2013

Essar Steel has enjoyed a cordial, healthy and unblemished working relationship with the Railways for more than two decades. The current issue is not part of any scam.

Essar Steel suo-moto informed the Railways of its plan to export pellets, before the actual exports shipment, in its letter dated 13th August, 2013. This was necessitated due to the weak economic and steel market condition in the country. There was no malafide intention to short pay the Railways. In response to our letter seeking guidance, the Railways vide their letter 26th August, 2013 suspended movement of Iron Ore Fines to our units affecting our production adversely.

Subsequent discussions with the Railways and in line with their Rules and Regulations, Essar Steel, as a responsible Corporate Citizen, has agreed to pay the additional claim of the Railways, so that production can be resumed to normal levels as soon as possible. Essar Steel clarifies that out of the total production of 1.9 Mn Tonnes, since commissioning of the Paradeep Pellet plant in February 2012, only 100,000 Tonnes have been exported so far , in the latter half of August.(0.5%!)

Essar Steel believes that its responsible and transparent actions need to be acknowledged in a positive way. The insinuation on our corporate behavior is unjust and uncalled for, affecting our brand image and reputation

 

FIRDOSE A. VANDREVALA APPOINTED THE EXECUTIVE VICE CHAIRMAN OF ESSAR STEEL INDIA LIMITED

 

August 07, 2013

 

Mumbai:

 

Essar Steel India Ltd today announced the appointment of Mr.Firdose A. Vandrevala as Executive Vice Chairman effective August 12, 2013.

 

Mr. Vandrevala joins Essar Steel from HIRCO, a construction and real estate major, where he was the Chairman and Managing Director.

 

He holds a B. Tech Honors degree from the Indian Institute of Technology, Kharagpur and is a Post Graduate Diploma in Business Management from the XLRI, Jamshedpur.

 

A recognized leader, Mr. Vandrevala was associated with the Tata Group for over three decades, where he held various leadership positions, the last being Managing Director of Tata Power and Chairman of Tata Teleservices. He was the Deputy Managing Director of Tata Steel before moving to Tata Power. He played a significant role in the growth of Tata Steel. From Tata Group, he joined Motorola India as the Chairman.

 

Chairman of Essar, Mr. Shashi Ruia said: “We are delighted to have Firdose join us. Essar Steel is committed to be a leader in the economic development of this nation. We look forward to Firdose’s contribution in making India self – sufficient in the steel sector and contribute further to the country’s progress.”

 

Commenting on his joining Essar Steel, Mr. Vandrevala said: "Essar Steel has set up some of the finest facilities and its scale and size is something any professional will want to associate with. As the expanded capacity of 10 million tonnes comes online, I am looking forward to Essar Steel playing a leading role in this sector and contributing to India’s economic development and growth."

 

Essar Steel has invested Rs.375000.000 millions in creating world-class steel business with a capacity of 10 MT and has a presence along the complete value chain of the steel industry.

 

The facilities of Essar SteeI in Hazira include a 10 million tonnes Fully Integrated Steel Plant, a 1.75 million tonnes downstream unit, India’s widest Plate Mill with an annual capacity of 1.5 million tonnes and a Pipe Mill of 0.6 million tonnes, a downstream facility at Pune comprising Pickling, Cold rolling, Galvanising and Color Coating facilities, Steel Processing facilities at seven locations with a capacity of 4 million tonnes and Pellet making facilities backed by Iron Ore Beneficiation facilities at Vizag and Paradeep with an aggregate capacity of 20 million tonnes.

 

Having created such large facilities, Essar Steel is now consolidating its operations to create value for all its stakeholders. While the facilities are operated by professionals with relevant experience, the strong Board and Management can add value by providing strategic direction and operational excellence to the company.

 

 

ESSAR STEEL INITIATIVE IN SUSTAINABLE DEVELOPMENT

 

Mumbai:

 

In its bid to become a 'zero waste company', Essar Steel India has signed an agreement with Harsco India Pvt Limited, for management of steel slag from EAF and Conarc furnaces. Harsco is a well-known and established global market leader in slag processing and metal recovery business.

 

The agreement is for a period of 15 years valued at US$160 million over the duration of the contract. As per the agreement, Harsco will recover iron from the slag, which can then be reused in steel making. Harsco is a globally renowned company in slag management. After the metal is recovered, the sized slag finds varied applications in construction industry like in making paver blocks, road back fill, road laying, brick making and cement mix construction, among other usages.

 

Commenting on the agreement, Mr Rajiv Bhatnagar, Director, Hazira Facility of Essar Steel India, said, "This agreement is in line with the objective of Essar Steel to become a 'zero waste company'. We remain committed to the cause of sustainable development."

 

Essar Steel has already developed technology to convert the slag into paver blocks, which is not only cheaper than cement paver blocks but also stronger and heavier as compared to cement paver blocks. Essar Steel generates a million ton of slag annually, based of which ancillary units can be set up, for use of this slag to make aggregates.

 

This agreement is part of Essar Steel's sustainability efforts. Essar Steel is a signatory to World Steel Association's Sustainable Development Charter. Essar Steel has taken various steps to become a 'zero waste company' and ensure sustainable development. It includes recycle of blast furnace and Corex gas in sponge iron plant, recycling of water reduction in water usage, rain water harvesting, slurry pipe line for transportation of iron ore fines to pellet plant, to name a few.

 

Essar Steel is a recipient of many awards in sustainability including recognition from reputed institutions like Centre for Science and Environment, Water Digest, World Steel Association, Golden Peacock, Green Tech Foundation, CII, CII-ITC Sustainable Development Center, Carbon Disclosure Project to name a few.

 

 

 

 

 

 

 

 

 

 

 

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.61.86

UK Pound

1

Rs.103.52

Euro

1

Rs.85.31

 

 

INFORMATION DETAILS

 

Information Gathered by :

HNA

 

 

Report Prepared by :

NKT

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

4

PAID-UP CAPITAL

1~10

4

OPERATING SCALE

1~10

3

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

3

--PROFITABILIRY

1~10

2

--LIQUIDITY

1~10

2

--LEVERAGE

1~10

3

--RESERVES

1~10

2

--CREDIT LINES

1~10

3

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

DEFAULTER

 

 

--RBI

YES/NO

NO

--EPF

YES/NO

NO

 

 

 

TOTAL

 

26

 

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.