project source-180111
TRANSCRIPT
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Funding Proposal
January 2011
PROJECT SOURCE
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Disclaimer• The sole purpose of this presentation is to assist the recipient in deciding whether it wishes to proceed with a
further investigation in relation to the Project SOURCE (hereinafter referred to as ‘SOURCE’ or ‘the Project’).
• This document is not intended to form the basis of any investment decision or any decision to purchase any assets
of SOURCE. This document does not constitute an offer or invitation for the sale or purchase of securities and
neither this document nor anything contained herein shall form the basis of, or be relied upon in connection with,
any contract
or
commitment
whatsoever.
• The information contained in this presentation is selective and is subject to updation, expansion, revision and
amendment. It does not purport to contain all the information recipients may require. No obligation is accepted to
provide recipients with access to any additional information or to correct any inaccuracies that might become
apparent. Recipients are advised to independently conduct their own investigation and analyses of the business of
the Company and of the information contained in the presentation and should also seek their own professional
advice on legal, financial and taxation issues.
• Neither the Company nor affiliated bodies corporate, nor the directors, shareholders, managers, employees or
agents of any of them, makes any representation or warranty, express or implied, as to the accuracy,
reasonableness or completeness of the information contained in the presentation. All such parties and entities
expressly disclaim any and all liability for, or based on or relating to any such information contained in, or errors in
or omissions from, this presentation or based on or relating to the Recipients’ use of this presentation.
• This presentation is confidential being for use only by the persons to whom it is issued. This presentation, or any
part
of
it,
may
not
be
copied
or
distributed
by
the
Recipient
to third
parties
(other
than
in
confidence
to
the
Recipients ’ professional advisors). In the event that the Recipient does not continue his interest with the Company,
this presentation must be returned to the Company.
• In no circumstance must recipients or their officers, employees, agents and advisors make contact with
management, employees, customers, agents or suppliers of Project SOURCE without the express permission of the
Company.
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Contents
1. The Transaction
2. Company At a Glance
3. Promoters & Key Personnel
4.
Products
5. Key Clients
6. Key Past Financials
7. Proposal
8. Key Projected Financials
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The Transaction
Constitution Private Limited Company
Location Gujarat, India
Business Providing Steel Building Solutions
Industry Manufacturing (Steel)
Project
1. Expansion by increasing the Manufacturing Capacity & New
Product Lines
2. Strategic acquisition of a Transformer Manufacturing
Company
Transaction Nature Requirement of Equity Funding of Rs.245.00 Mn
Project Cost Cost of Project is estimated at Rs. 1,120.00 Mn
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Company at a Glance Was established in September 1994 by a technocrat to cater to the rising demand of Quality
Sheet Metal Fabrication
First commercial production commenced with manufacturing of MCB Distribution Boards for
‘SIEMENS’ in December 1994
In 2000, It acquired CONTINENTAL MFG. COMPANY, a company with 25 yrs. of experience in
manufacturing of automobile components
PEB Division was established in 2005
Company has established itself as a quality ‘Steel building solutions’ provider in Western
INDIA
It is an ISO 9001:2000 Company
The division, promoted by a team of experienced structural engineers having in‐depth
understanding, has executed various turnkey projects in last 5 years (more than 300,000 m2
installations)
The Company
has
an
in
‐built
manufacturing
capacity
of
4,500 MT per annum making
it
an
emerging leader in the Western region of the Country
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Corporate Goal
• To become a World Class contract manufacturer of Sheet Metal Fabricated Components & leading PEB solutions provider
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Promoters &
Key
Management
Team
7
• Promoters are Technocrats and have wide experience in
this industry
• Company is managed professionally
• Has experienced
Technocrats
and
knowledgeable
persons
leading the key areas
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Products
SHEET METAL WORKS
STRUCTURAL FABRICATION
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Key Clients SIEMENS Ltd.
Pinnacle Industries Ltd. Midco Ltd.
Kemrock Industries & Exports Ltd.
Sankalp Preformed Systems Pvt. Ltd.
Bombardier
Alstom Power
AREVA Ltd.
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Key Past Financials
- Income Statement
- Balance Sheet- Key Indicators
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Income Statement
Particulars 2007-08 2008-09 2009-10
Net Income 122.37 212.10 314.53
Operating Profit 18.15 36.87 55.72
Operating Profit Margin 14.83% 17.38% 17.72%
EBIT 12.65 26.65 42.23
EBIT on Sales 10.34% 12.56% 13.43%
PBT 6.57 17.59 27.95
PBT on Sales 5.37% 8.29% 8.89%
PAT 5.80 11.35 20.19
PAT on Sales 4.74% 5.35% 6.42%
(Rs in Mn)
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Balance Sheet
Particulars 2007-08 2008-09 2009-10
Equity Share capital 12.22 16.58 23.03
Reserves & Surplus 9.25 17.20 50.29
Net Worth 21.47 33.78 73.32
Debt 45.37 98.84 137.90
Net Fixed Assets 63.20 130.57 186.80
Net Working Capital 20.20 35.45 97.80
Working Capital Loan 16.57 25.79 60.29
(Rs in Mn)
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Net Income & Profit
(Rs in Mn)
(Rs in Mn)
(Rs in Mn)
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Net Worth & Net Working Capital
(Rs in Mn) (Rs in Mn)
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About the Project
− Expansion Project
− Strategic Acquisition
− Proposal
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Expansion Project
The Company is going for the capacity expansion and
introduction of new product lines
Estimated cost for the same is Rs. 600.00 Mn
To raise debt funding of Rs. 400.00 Mn from bank
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Strategic Acquisition Looking to venture into a new business line of Transformers Manufacturing
by strategic acquisition
Identified a 40 years old company into Transformers Manufacturing based
at Gujarat
Looking to takeover the entire facilities without real estate
To relocate the entire facilities of the target company at current location
of the Company
Estimated takeover price is Rs. 300.00 Mn
Further investment of Rs.215.00 Mn required in Infrastructure and Plant &
Machinery making total investment of Rs.515.00 Mn in this project
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Target Company – At a Glance
An ISO:2008 Certified Company and its transformers are type tested at NABL
Installed capacity of 7,000 MVA per annum to manufacture Transformers of Indian
and International standards
Product offerings include Wind Farm, Power, Distribution, Dry Type and Special
Purpose Transformers with the capacity of 1,000 KVA to 50,000 KVA
Sales of Rs. 210.00 Mn in the FY 2009-10
Key Customers are Gujarat Electricity Board, state owned distribution and
transmission companies of Gujarat, Maharashtra, Karnataka, Madhya Pradesh,
BHEL, Pipavav Shipyard Ltd., Jindal Saw Ltd., ONGC, Suzlon Enegry Ltd. among
others
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Rationale for Acquisition
Adding transformers into the product line would upgrade
the value chain Due to booming Power sector especially Transmission
and Generation, Transformers are in huge demand and
this industry has a bright future
An established company into this sector
Customer Base of reputed corporate and state owned
organizations
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Proposal
To invest in Equity Capital of the Company
Funds to the extent of Rs. 245.00 Mn to be infused as Equity
Capital / Structured instrument
Shares / Instrument to be issued at a Premium
Valuation to be based on agreed upon price
Indicative Valuation Rs.120.00 Per Share
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Key Projected Financials
- Income Statement
- Balance Sheet
- Key Indicators
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Income Statement
Particulars 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Net Income 359.95 1,419.69 2,369.83 3,029.90 3,550.56 3,892.12 4,077.02
Operating
Profit74.54 306.15 512.92 666.68 781.87 866.23 908.37
Operating
Profit Margin20.71% 21.56% 21.64% 22.00% 22.02% 22.26% 22.28%
EBIT 61.05 252.94 441.85 575.82 675.40 749.52 786.12
EBIT on Sales 16.96% 17.82% 18.64% 19.00% 19.02% 19.26% 19.28%
PBT 36.07 168.45 287.05 417.09 518.64 603.96 655.34
PBT on Sales 10.02% 11.87% 12.11% 13.77% 14.61% 15.52% 16.07%
PAT 27.93 98.78 189.48 275.32 342.35 398.67 432.59
PAT on Sales 7.76% 6.96% 8.00% 9.09% 9.64% 10.24% 10.61%
(Rs in Mn)
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Balance Sheet
(Rs in Mn)
Particulars 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Equity Share
capital61.26 76.34 76.34 76.34 76.34 76.34 76.34
Reserves &
Surplus178.99 443.69 624.24 886.16 1,215.12 1,595.93 2,006.19
Net Worth 240.25 520.03 700.58 962.51 1,291.46 1,672.27 2,082.53
Debt 308.58 716.31 619.33 475.51 289.60 111.40 -
Net Fixed
Assets245.43 1,193.96 1,136.92 1,079.88 1,022.84 965.80 908.77
Net
WorkingCapital 151.07 570.47 930.38 1,239.17 1,585.23 1,939.48 2,316.91
Working
Capital Loan96.10 376.20 617.10 785.50 918.60 1,004.80 1,051.70
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Sales & Profit(Rs in Mn)
(Rs in Mn) (Rs in Mn)
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Net Worth & Debt(Rs in Mn)(Rs in Mn)
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Key Financial Ratios
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EPS & Book Value
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