MIRA INFORM REPORT
|
Report Date : |
31.10.2014 |
IDENTIFICATION DETAILS
|
Name : |
FERRO ALLOYS CORPORATION LIMITED |
|
|
|
|
Registered
Office : |
D P Nagar, Randia, Bhadrak-756135, Orissa |
|
|
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|
Country : |
India |
|
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|
|
Financials (as
on) : |
31.03.2014 |
|
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|
|
Date of
Incorporation : |
27.09.1955 |
|
|
|
|
Com. Reg. No.: |
15-008400 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.185.268 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L45201OR1955PLC008400 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
BBNF00042A / BBNF00026F / BBNF00008B |
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PAN No.: [Permanent Account No.] |
AAACF1999A |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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|
Line of Business
: |
Manufacture of Steel and Stainless Steel and also engaged
in Chrome Ore exploration, mining. |
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|
|
|
No. of Employees
: |
Information declined by the management |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (43) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 6800000 |
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|
|
|
Status : |
Satisfactory |
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|
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having satisfactory track record. General financial position of the company and acceptable for business
dealings. Trade relations are reported as fair. Business is active. Payments
terms are reported to be slow but correct.
The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
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
N E W S
Verdict Implications
: Apex court order may alter coal import dynamics. Traders go slow on talks
over coal supply contracts, uncertainty over cancellation of blocks weigh on
stocks.
Recent arrest of the
Chennai head of the Registrar of Companies, the ministry of corporate affairs
arm that ensures that companies file all the information required by the
Companies Act is the latest manifestation of a messy fight between a father and
his adopted son for the control of Rs 40000 mn business empire. The Central
Bureau of Investigation arrested Manumeethi Cholan after he accepted Rs 10
lakhs as bribe from M A M Ramaswamy, a CBI official said.
Central Bureau of Investigation
books Electrotherm for cheating Central Bank of Rs 4360 mn.
Infosys maintains
revenue guidance. COO Rao says attrition still an area of concern and it would
take a few more quarters to bring down levels to 13-15 %.
DHL to invest
Euro 100 mn in India over next 2 years. The firm has chosen India to pilot its
e-commerce business model for the Asia-Pacific region.
Blackstone may buy
stake in BlueRidge SEZ in line with the fund’s real estate strategy in India.
Kingfisher Airlines
Ltd grounded in October 2012 under the weight of heavy debt and accumulated
losses, recently approached the Delhi high court for relief in two separate
cases. The airline challenged a notice by Punjab & National Bank alleging
that It had wilfully defaulted on Rs 7700 mn of loans and sought more time to
comply with the requirements under the listing agreements with the Stock
Exchanges.
OnMobile likely to
sack another 300 employees. The lay-offs follow a spate of senior-level exits
over the past two years, starting with of its founder. The overall lay-offs
could number around 600 and are driven by the need to cut costs, says a former
employee.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
ICRA |
|
Rating |
Fund Based Facilities: BB |
|
Rating Explanation |
Moderate risk of default. |
|
Date |
February 2014 |
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
31-03-2014.
INFORMATION DECLINED
MANAGEMENT NON – COOPERATIVE (91-6784-240320)
LOCATIONS
|
Registered Office / Factory: |
D P Nagar, Randia, Bhadrak-756135, Orissa, India |
|
Tel. No.: |
91-6784-240320/240272 |
|
Fax No.: |
91-6784-240626 |
|
E-Mail : |
|
|
|
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|
Mining Complex: |
Laxmi Bhawan, Kuans, Bhadrak-756100, |
|
Tel. No.: |
91-6784-250311/250598/251312 |
|
Fax No.: |
91-6784-251782 |
|
E-Mail : |
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|
|
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|
Head Office : |
Shreeram Bhawan, Tumsar-441912, Bhandara, |
|
Tel. No.: |
91-7183-232233/232251/233090 |
|
Fax No.: |
91-7183-232271 |
|
E-Mail : |
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|
Corporate Office : |
Corporate One, Suite No. 401, Plot No. 5, Jasola, New Delhi-110044, |
|
Tel. No.: |
91-11-40701000 |
|
Fax No.: |
91-11-41624880 |
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E-Mail : |
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Regional Office: |
Located at:
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|
Other Offices: |
Located at: |
DIRECTORS
As on 31.03.2014
|
Name : |
Mr. R.K. Saraf |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. M. D. Saraf |
|
Designation : |
Director (Upto 30-07-2014) |
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|
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|
Name : |
Mr. Manoj Saraf |
|
Designation : |
Managing Director |
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|
|
|
Name : |
Mr. Vinod Saraf |
|
Designation : |
Joint Managing Director (Upto 25-07-2014) |
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|
|
|
Name : |
Mr. Vineet Saraf |
|
Designation : |
Director (w.e.f. 26-07-2014) |
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|
|
|
Name : |
Mr. Ashish Saraf |
|
Designation : |
Joint Managing Director |
|
|
|
|
Name : |
Mr. Rohit Saraf |
|
Designation : |
Joint Managing Director |
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|
|
|
Name : |
Mr. Harish Salve |
|
Designation : |
Director |
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|
|
|
Name : |
Mr. A.S. Kapre |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Arye Berest |
|
Designation : |
Director |
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|
|
|
Name : |
Mr. Keshaorao Pardhi |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. S. Sridhar |
|
Designation : |
Director |
|
|
|
|
Name : |
Pinaki Misra |
|
Designation : |
Director |
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|
|
|
Name : |
Mr. S.B. Mishra |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. N.L. Ajwalia |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. M.B. Thaker |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Ritesh Chaudhry |
|
Designation : |
General Manager (Legal) and Company Secretary |
|
|
|
|
Name : |
Mr. R.D. Agrawal |
|
Designation : |
Advisor |
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|
|
|
Name : |
Mr. O.P. Banka |
|
Designation : |
Director (Finance) and & CFO |
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|
|
|
Name : |
Mr. Sanjiv Goyal |
|
Designation : |
Chief Financial Officer |
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|
|
|
Name : |
Mr. S.P. Gupta |
|
Designation : |
Dy. Chief Financial Officer |
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|
|
|
Name : |
Mr. Ashok Agrawal |
|
Designation : |
Director (Mines) |
|
|
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|
Name : |
Mr. M.K. Pujari |
|
Designation : |
Chief General Manager (Mines) |
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|
|
|
Name : |
Mr. B.B. Singh |
|
Designation : |
Director (Technical) (Charge Chrome Plant) |
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|
|
|
Name : |
Mr. P.G. Sureshkumar |
|
Designation : |
General Manager (Charge Chrome Plant) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2014
|
Category of
Shareholder |
Total
No. of Shares |
Total
Shareholding as a % of total No. of Shares |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
18278976 |
9.87 |
|
|
72726108 |
39.25 |
|
|
42087549 |
22.72 |
|
|
42037549 |
22.69 |
|
|
50000 |
0.03 |
|
|
133092633 |
71.84 |
|
|
|
|
|
|
196188 |
0.11 |
|
|
5639215 |
3.04 |
|
|
5835403 |
3.15 |
|
Total shareholding of Promoter and Promoter Group (A) |
138928036 |
74.99 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
7839 |
0.00 |
|
|
4848 |
0.00 |
|
|
38066 |
0.02 |
|
|
8220 |
0.00 |
|
|
2574476 |
1.39 |
|
|
2633449 |
1.42 |
|
|
|
|
|
|
10888825 |
5.88 |
|
|
|
|
|
|
26541643 |
14.33 |
|
|
4801001 |
2.59 |
|
|
1475287 |
0.80 |
|
|
862746 |
0.47 |
|
|
504731 |
0.27 |
|
|
1056 |
0.00 |
|
|
106754 |
0.06 |
|
|
43706756 |
23.59 |
|
Total Public shareholding (B) |
46340205 |
25.01 |
|
Total (A)+(B) |
185268241 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
185268241 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacture of Steel and Stainless Steel and also engaged
in Chrome Ore exploration, mining. |
GENERAL INFORMATION
|
No. of Employees : |
Information declined by the management |
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Bankers : |
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Facilities : |
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Banking
Relations : |
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Auditors : |
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|
Name : |
Salve and Company Chartered Accountants |
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|
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Internal Auditors: |
|
|
Name : |
Das and Prasad Chartered Accountants |
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|
|
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Cost Auditors: |
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|
Name : |
Niranand Company Chartered Accountants |
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Solicitors: |
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Subsidiary Company: |
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|
|
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|
Enterprise, over
which key management personnel and their relatives exercise significant
influence, with whom transactions have taken place
during the year : |
|
CAPITAL STRUCTURE
As on 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
220,000,000 |
Equity Shares |
Rs.1/- each |
Rs. 220.000 Millions |
|
800,000 |
0.01% Redeemable Preference Shares |
Rs.100/- each |
Rs. 80.000 Millions |
|
|
|
|
|
|
|
Total |
|
Rs. 300.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
185,268,241 |
Equity Shares |
Rs.1/- each |
Rs. 185.268
Millions |
|
|
|
|
|
NOTE:
The details of Shareholders
holding more than 5% shares :
|
Name of the Shareholder |
As at 31st March, 2014 |
|
|
|
No. of Shares |
% held |
|
Rai Bahadur Shreeram and Company Private Limited |
69,448,883 |
37.49% |
|
Mohinidevi Umashankar Saraf |
15,672,291 |
8.46% |
The reconciliation of
number of shares outstanding at the beginning and at the end of the reporting
period:
|
Particulars |
As at 31st March, 2014 No. of Shares |
|
Shares outstanding at the beginning of the year |
185,268,241 |
|
Shares issued during the year |
-- |
|
Shares bought back during the year |
-- |
|
Shares outstanding at the end of the year |
185,268,241 |
Terms/rights attached
to Equity Shares:
The Company has only one class of Equity Shares having a par value of Rs.1/- per share. The Equity Shares have equal rights, preferences and restrictions which are in accordance with the provisions of law, in particular the Companies Act, 1956.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES
OF FUNDS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
|
|
|
|
I.
EQUITY AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
185.268 |
185.268 |
185.268 |
|
(b) Reserves & Surplus |
2209.962 |
1896.333 |
1638.421 |
|
(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) |
2395.230 |
2081.601 |
1823.689 |
|
|
|
|
|
|
(3) Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
319.022 |
452.993 |
603.748 |
|
(b) Deferred tax liabilities
(Net) |
14.577 |
21.053 |
28.683 |
|
(c) Other long term
liabilities |
21.865 |
21.865 |
21.865 |
|
(d) long-term provisions |
150.457 |
149.678 |
148.908 |
|
Total
Non-current Liabilities (3) |
505.921 |
645.589 |
803.204 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
617.273 |
766.369 |
338.478 |
|
(b) Trade payables |
612.401 |
416.003 |
696.168 |
|
(c) Other current liabilities |
616.041 |
424.456 |
315.792 |
|
(d) Short-term provisions |
19.251 |
19.562 |
5.661 |
|
Total
Current Liabilities (4) |
1864.966 |
1626.390 |
1356.099 |
|
|
|
|
|
|
TOTAL |
4766.117 |
4353.580 |
3982.992 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
868.395 |
719.655 |
663.771 |
|
(ii) Intangible Assets |
1.565 |
55.009 |
108.452 |
|
(iii) Capital work-in-progress |
102.304 |
154.759 |
152.620 |
|
(iv) Intangible assets under
development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
1873.360 |
1615.203 |
1439.663 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
169.848 |
167.042 |
160.301 |
|
(e) Other Non-current assets |
0.000 |
0.000 |
0.000 |
|
Total
Non-Current Assets |
3015.472 |
2711.668 |
2524.807 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
0.000 |
0.000 |
|
(b) Inventories |
810.300 |
726.740 |
764.392 |
|
(c) Trade receivables |
404.297 |
465.138 |
265.188 |
|
(d) Cash and cash equivalents |
9.701 |
8.578 |
77.612 |
|
(e) Short-term loans and
advances |
514.972 |
433.585 |
343.132 |
|
(f) Other current assets |
11.375 |
7.871 |
7.861 |
|
Total
Current Assets |
1750.645 |
1641.912 |
1458.185 |
|
|
|
|
|
|
TOTAL |
4766.117 |
4353.580 |
3982.992 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
SALES |
|
|
|
|
|
Income |
6511.355 |
5342.097 |
4869.174 |
|
|
Other Income |
16.601 |
40.434 |
53.715 |
|
|
TOTAL
(A) |
6527.956 |
5382.531 |
4922.889 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
Cost of Materials Consumed |
2472.796 |
1805.442 |
1670.269 |
|
|
Purchases of Stock-in-Trade |
0.000 |
33.506 |
87.559 |
|
|
Changes in inventories of
finished goods, work-in-progress and Stock-in-Trade |
(64.414) |
63.846 |
(197.174) |
|
|
Employees benefits expense |
430.753 |
378.108 |
384.857 |
|
|
Other expenses |
3015.772 |
2548.861 |
2761.858 |
|
|
TOTAL
(B) |
5854.907 |
4829.763 |
4707.369 |
|
|
|
|
|
|
|
Less |
PROFIT/
(LOSS) BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTISATION (C) |
673.049 |
552.768 |
215.520 |
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
150.732 |
151.384 |
138.802 |
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
522.317 |
401.384 |
76.718 |
|
|
|
|
|
|
|
Less/
Add |
DEPRECIATION/
AMORTISATION (F) |
92.660 |
91.925 |
97.586 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX (E-F) (G) |
429.657 |
309.459 |
(20.868) |
|
|
|
|
|
|
|
Less |
TAX
(I) |
116.028 |
51.547 |
13.154 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX (G-I)
(J) |
313.629 |
257.912 |
(34.022) |
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD (K) |
642.409 |
384.497 |
418.519 |
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
Transfer to General Reserve |
500.000 |
0.000 |
0.000 |
|
|
Balance
Carried to the B/S |
456.038 |
642.409 |
384.497 |
|
|
|
|
|
|
|
|
EARNINGS
IN FOREIGN CURRENCY |
|
|
|
|
|
F.O.B. Value of Exports |
4234.463 |
2335.109 |
2415.896 |
|
|
TOTAL
EARNINGS |
4234.463 |
2335.109 |
2415.896 |
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
Raw Materials |
319.596 |
120.867 |
286.649 |
|
|
Components and Stores parts |
20.592 |
12.651 |
12.689 |
|
|
TOTAL
IMPORTS |
340.188 |
133.518 |
299.338 |
|
|
|
|
|
|
|
|
Earnings
/ (Loss) Per Share (Rs.) |
1.69 |
1.39 |
(0.18) |
QUARTERLY RESULTS
|
Particulars |
30.06.2014 1st Quarter |
|
Audited / UnAudited |
UnAudited |
|
Net Sales |
1229.400 |
|
Total Expenditure |
1168.200 |
|
PBIDT (Excl OI) |
61.200 |
|
Other Income |
17.500 |
|
Operating Profit |
78.800 |
|
Interest |
35.200 |
|
Exceptional Items |
0.000 |
|
PBDT |
43.600 |
|
Depreciation |
12.200 |
|
Profit Before Tax |
31.400 |
|
Tax |
4.700 |
|
Provisions and contingencies |
0.000 |
|
Profit After Tax |
26.700 |
|
Extraordinary Items |
0.000 |
|
Prior Period Expenses |
0.000 |
|
Other Adjustments |
0.000 |
|
Net Profit |
26.700 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
PAT / Total Income |
(%) |
4.80 |
4.79 |
-0.69 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
6.60 |
5.79 |
-0.43 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
15.40 |
11.98 |
-0.87 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.18 |
0.15 |
-0.01 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.39 |
0.59 |
0.52 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.94 |
1.01 |
1.08 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Share Capital |
185.268 |
185.268 |
185.268 |
|
Reserves & Surplus |
1638.421 |
1896.333 |
2209.962 |
|
Net
worth |
1823.689 |
2081.601 |
2395.230 |
|
|
|
|
|
|
long-term borrowings |
603.748 |
452.993 |
319.022 |
|
Short term borrowings |
338.478 |
766.369 |
617.273 |
|
Total
borrowings |
942.226 |
1219.362 |
936.295 |
|
Debt/Equity
ratio |
0.517 |
0.586 |
0.391 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
4869.174 |
5342.097 |
6511.355 |
|
|
|
9.713 |
21.888 |
NET PROFIT MARGIN
|
Net
Profit Margin |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
4869.174 |
5342.097 |
6511.355 |
|
Profit |
(34.022) |
257.912 |
313.629 |
|
|
(0.70%) |
4.83% |
4.82% |
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 |
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 |
No |
|
16] |
Details of sister
concerns |
No |
|
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 |
No |
|
30] |
Major Shareholders, if
available |
Yes |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
OPERATIONS
The Indian ferro alloy industry has evolved gradually and now employs highly qualified manpower, latest equipments and technology. This evolution has led to quality produce which has strengthened its position over the years. Reaching such position and earning recognition has not come easy for Indian ferro alloy industry given the fact that out of 12 billion tones of global reserves; about 95% of resources are geographically concentrated in Kazakhstan, South Africa, Turkey and other countries.
Notwithstanding the above, Indian chrome enjoys premium over others due to higher chrome content compared to global average and has higher Cr/ Fe ratio. Furthermore, Indian ores are also more amenable to beneficiation and upgradation than South African ores and because of the higher Cr/ Fe and higher Cr 2O3, chrome alloys made from Indian ores have higher percent of chrome ore. South Africa is the largest chrome ore producer followed by Zimbabwe, Kazakhstan and India. Despite high grade of ores Indian Chrome falls short in competition owing to high input costs, escalating power tariff and unavailability of quality raw materials. Owing to the aforesaid
factors Indian ferro alloys producers are operating at levels well below their installed capacity. The company's turnover for the current financial year, 2013-14 stands at Rs.6326.291 Millions as against Rs.5178.713 Millions last year, an increase of 22.16% over the previous year. Exports during the year were Rs.4548.370 Millions. Further, the company has posted a profit before tax of Rs.429.657 Millions this year as against. Rs.309.459 Millions in the previous year, reflecting an increase of 38.84%.
MANAGEMENT
DISCUSSIONS AND ANALYSIS
Industry Structure,
Development and Other Related Matters
Ferro alloys production in India is about six decades old. In India bulk ferro alloys production through electric submerged arc furnace route made a beginning in late 1950s. After the invention by Soderberg of self- baking type electrodes, during 1920s, this became the most preferred way for making bulk ferro alloys of Silicon, Manganese and Chromium in the world The initial phase of the industry was marked by the installation of small capacity furnaces mostly for the production of Manganese alloys with the starting up of the first furnace at VISL, Bhadravati, total of 18 furnaces were commissioned by the mid-sixties to cater to the domestic steel industry's requirement. The expansion of the industry took place between late sixties and late seventies, when thirteen more moderately sized furnaces were added to undertake production of Silicon and Chromium alloys. The third phase of expansion in the country was prompted by product diversification, availability of advanced technology and encouragement from Government by way of incentives for setting up 100% export oriented plants, to earn valuable foreign exchange.
The down turn in ferro alloys demand started in 1990s and further decelerated in 1997-98 due to over all recession in steel industry. This caused a crash in price of ferro alloys. In addition to this because of increased demand for ores from China, there was sudden rise in price of ores. Also there was increase in power cost due to withdrawal of some of the earlier concessional tariffs given in some areas. This resulted in closure of many ferro alloys plants in the country. Only those who had captive mining leases and/or captive thermal power generation plants or were located in such backward areas where concessional power tariff was extended, survived.
Again in 2002, with the increase in demand of steel, the ferro alloys market started improving. Buoyed by the rapidly growing steel demand, the Indian ferro alloy industry is now estimated at 4.5 mtpa and growing with the steel industry. Quality wise, chrome ore available in India edges over competition due to higher Cr2O3 and higher Cr/ Fe ratio. The higher Cr/Fe and higher composition of Cr2O3 makes Indian ores more amenable to beneficiation and upgradation. However, poor availability of good quality raw material, high power tariff and uncertain policy framework renders the quality factor uncompetitive in the international market.
OUTLOOK
Despite the steady growth and potential for steady growth in business there are various bottlenecks which the industry currently faces. While some of them relate to the larger macroeconomic framework, some of them are intrinsic to the industry itself; major ones are as follows:
• High cost of grid power has been affecting the industry's competitiveness despite having the best quality ores and processes
• High cost of coal and failure of CIL to allocate required coal to captive power unit has entailed a burden on producers
• Inadequate indigenous supply of good quality and high grade coke
• Depleting Chrome ore supply on domestic level. With OMC being the only major producer of chrome ore in the country, there are availability issues.
• Ferro Alloys falls under the same Tariff chapter as Iron and Steel hence, any measures applied on steel industry get indiscriminately applied to ferro alloys as well.
• High transportation cost due to increase in price of fuels • Inadequate and crumbling infrastructure, over burdened roadways, railways and ports.
To address the above issues, following measures need to be taken:
• Uniform electricity tariff need to be made available at internationally comparable tariff for ferro alloy industry.
• Until a level playing field on electricity is provided, it is recommended that the Government increase the customs
duty to 7.5% from existing 5%.
• For anthracite coal customs duty be brought down to Nil from current 5%.
• Customs duty on import of raw material be reduced
• It is recommended that ferro alloys industry be allowed duty-free imports of used power plant equipments and machineries for setting up captive power plants.
• Government may consider devising mechanism for making funds available to ferro alloys producers for setting up captive power plants at a very low or nil interest rate to ease of the burden
• Ferro alloys industry may be allowed a higher rate of depreciation of (30%) for its captive power plant.
• For sake of smooth running and cost effectiveness government should consider allocating coal linkage as well as coal mines to power plants of ferro alloy industry as captive mines The prospects and future looks good for the ferro alloy industry considering the fact that the global steel demand is pegged to grow at a decent rate of 2.9%. Further, as per vision 2020, India steel industry has a plan to almost double the 120 million tons capacities projected in 2012 to 200 million tones in 2020. The following indications also provide better forecast for future:
• Basic custom duty on metallurgical coke is being increased from Nil to 2.5% vide notification dated 11th July, 2014.
• Government has imposed export duty on chrome ore to 30% of value (from the earlier level ofRs.3000 PMT) to restrict export and ensure availability for domestic production.
• The industry is consolidating its position by enhancing existing capacity of furnaces and also by installing captive power plants
• India is bullish on developing infrastructure and such projects shall create good demand for construction steel resulting in increase of ferro alloys demand.
CORPORATE INFORMATION
Subject was incorporated in 1955. The Company is listed at Bombay Stock Exchange. It is one of the India's largest producers and exporters of Ferro Alloys, an essential ingredient for manufacture of Steel and Stainless Steel. FACOR is also engaged in Chrome Ore exploration, mining and beneficiation in the state of Odisha. Chrome Ore is one of the main raw material for producing Charge Chrome / High Carbon Ferro Chrome. Facor is having about 86% stake in Facor Power Limited. which is engaged in the generation of power.
UNSECURED LOAN
|
PARTICULARS |
31.03.2014 (Rs.
in Millions) |
31.03.2013 (Rs.
in Millions) |
|
Long-term
Borrowings |
|
|
|
From related parties |
76.971 |
117.971 |
|
Others |
54.000 |
50.000 |
|
Deferred payment liabilities |
1.525 |
2.105 |
|
Total |
132.496 |
170.076 |
|
Note: Terms of repayment: Payable after 31st March, 2015 Terms of repayment: Payable in equal monthly instalments. |
||
CONTINGENT
LIABILITIES: (As on 31.03.2014)
(a) Claims against the Company not acknowledged as debts, since disputed Rs.484.854 Millions (Previous Year Rs.393.325 Millions).
Amounts paid under protest Rs.35.283 Millions (Previous Year Rs.28.283 Millions) have been debited to Advance Account.
(b) Counter guarantees in favour of Consortium Banks in respect of their outstanding with Facor Steels Limited. Due to the nature of the liability, its financial impact is not ascertainable.
INDEX
OF CHARGES
|
S.NO. |
CHARGE ID |
DATE OF CHARGE CREATION/MODIFICATION
|
CHARGE AMOUNT
SECURED |
CHARGE HOLDER |
ADDRESS |
SERVICE REQUEST
NUMBER (SRN) |
|
1 |
10511145 |
05/07/2014 |
55,000,000.00 |
PIONEER FACOR IT INFRADEVELOPERS PRIVATE LIMITED. |
5TH FLOOR, PADMA PLACE, 86 NEHRU PLACE, NEW DELHI, DELHI - 110019, INDIA |
C13667944 |
|
2 |
10507902 |
05/07/2014 |
70,000,000.00 |
KLJ RESOURCES LIMITED |
8 CAMMAC STREET, KOLKATA, WEST BENGAL - 700017, INDIA |
C10429694 |
|
3 |
10507805 |
12/06/2014 |
40,000,000.00 |
BANK OF INDIA |
MAIN BRANCH, FIRST FLOOR, INSAR KHAZANA TOWERS, 2ND LANE, DWARKANAGAR, VISAKHAPATNAM, ANDHRA PRADESH - 530016, INDIA |
C10374858 |
|
4 |
10456831 |
22/10/2013 |
55,000,000.00 |
CENTRAL BANK OF INDIA |
MID CORPORATE FINANCE
BRANCH, 50-81-25, J K CENTRE, SEETHAMMAPETA, VISAKHAPATNAM, ANDHRA PRADESH - |
B88153283 |
|
5 |
10275410 |
20/09/2011 * |
650,000,000.00 |
ICICI BANK LIMITED |
LANDMARKRACE COURCE CIRCLE, ALKAPURI, BARODA, GUJARAT - 390015, INDIA |
B37407715 |
|
6 |
10159901 |
28/12/2011 * |
981,200,000.00 |
BANK OF INDIA |
MAIN BRANCH, FIRST FLOOR, INSAR KHAZANA TOWERS, 2ND LANE, DWARKANAGAR, VISAKHAPATNAM, ANDHRA PRADESH - 530016, INDIA |
B30546345 |
* Date of charge modification
FIXED ASSETS
Tangible Assets
- Land Leased
- Land Freehold
- Buildings
- Railway Sidings
- Plant and Machineries
- Office and Other Equipments
- Furniture and Fixtures
- Vehicles
Intangible Assets
- Goodwill
CMT REPORT (Corruption, Money Laundering and Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.46 |
|
|
1 |
Rs.98.21 |
|
Euro |
1 |
Rs.77.45 |
INFORMATION DETAILS
|
Information
Gathered by : |
HTL |
|
|
|
|
Analysis Done by
: |
DIV |
|
|
|
|
Report Prepared
by : |
KVT |
SCORE and RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--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 |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
43 |
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 and operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.