project source-180111

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Funding Proposal

January 2011

PROJECT SOURCE



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.



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



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



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



Corporate Goal

• To become a World Class contract manufacturer of Sheet Metal Fabricated Components & leading PEB solutions provider



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



Products

SHEET METAL WORKS

STRUCTURAL FABRICATION



Key Clients SIEMENS Ltd.

Pinnacle Industries Ltd. Midco Ltd.

Kemrock Industries & Exports Ltd.

Sankalp Preformed Systems Pvt. Ltd.

Bombardier

Alstom Power

AREVA Ltd.



Key Past Financials

- Income Statement

- Balance Sheet- Key Indicators



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)



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)



Net Income & Profit

(Rs in Mn)

(Rs in Mn)

(Rs in Mn)



Net Worth & Net Working Capital

(Rs in Mn) (Rs in Mn)



About the Project

− Expansion Project

− Strategic Acquisition

− Proposal



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



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



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



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



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



Key Projected Financials

- Income Statement

- Balance Sheet

- Key Indicators



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)



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



Sales & Profit(Rs in Mn)

(Rs in Mn) (Rs in Mn)



Net Worth & Debt(Rs in Mn)(Rs in Mn)



Key Financial Ratios



EPS & Book Value

project source-180111

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