r splendid metal products ltd. · company was converted into public limited company on 20th april...

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STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SECTOR: STEEL REPORTING DATE: 14THAUGUST 2017

SPLENDID METAL PRODUCTS LTD. www.sujana.com

Splendid Metal Products Ltd. NSE Code - SMPL TABLE 1 - MARKET DATA (STANDALONE) (AS ON 10TH AUGUST 2017)

Sector - Steel NSE Market Price (`) 1.55 NSE Market Cap. (₹ Cr.) 49.37

Face Value (`) 5.00 Equity (` Cr.) 150.51

Business Group - Sujana 52 week High/Low (₹) 3.25/1.5 Net worth (₹ Cr.)* 560.23

Year of Incorporation - 1988 TTM P/E (TTM) N.A. Traded Volume (Shares) 84,004

TTM P/BV 0.17 Traded Volume (lacs) 1.30

Registered Office - Source - Capitaline, TTM - Trailing Twelve Months, N.A. – Not Applicable * as on 30th September 2016

No 8-2-248/1/7/18,

Plot No 18, COMPANY BACKGROUND

Nagarjuna Hills Panjagutta, “Splendid Metal Products Limited (SMPL) was incorporated in 02th May 1988 under the

name of Sujana Steel Re-Rolling Industries Private Limited. The name of the company was

changed to Sujana Metal Products Limited and later to Splendid Metal Products Limited. The

company was converted into public limited company on 20th April 1992. The company

further changed its name as Sujana Metal Products Limited w.e.f. 09th November 2001.

The Company was promoted by Sri Y. S. Chowdary, his associates and relatives. The

company was incorporated with an object to manufacture of steel re-rolled products. SMPL

is engaging in the business of manufacturing and marketing value added steel products.

SMPL is categorized as a secondary steel producer in the Industry. SMPL is currently

engaging in the business of Manufacture and trading of steel products like Thermo

Mechanically Treated (TMT) bars in different sizes, Structural steels like Ms Angles, Ms

Squares, Ms Beams and Ms Channels etc and smart steel of varying shapes and dimensions

for the construction and infrastructure sector

Hyderabad – 500 082,

Telangana

Company Website:

www.sujana.com

Revenue and Profit Performance

The revenue of the Company decreased from ₹976.74 crores to

₹470.99 crores from quarter ending Sep’15 to quarter ending

Sep’16. The Company made a loss of ₹32.43 crores in quarter

ending Sep’16 vis-a-vis making a loss of ₹3.08 crores in quarter

ending Sep’15.

Source: Moneycontrol

Performance vis-à-vis Market

Source: Moneycontrol

TABLE 2- Returns

1-m 3-m 6-m 12-m

Splendid Metal

Products Ltd. -11.43% -32.26% -40.38% -36.73%

Nifty -0.72% 3.82% 11.69% 13.63%

Nifty Metal 5.56% 10.52% 8.94% 30.53%

-

0.50

1.00

1.50

Aug16

Sep16

Oct16

Nov16

Dec16

Jan17

Feb17

Mar17

Apr17

May17

Jun17

Jul17

Splendid Metal Products LtdNIFTYNIFTY METAL

470.99

759.36976.74

-32.43

-42.32

-3.08

-500

0

500

1000

1500

Sep'16 Mar'16 Sep'15

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

http://www.sujana.com/


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TABLE 3 - FINANCIALS

(₹ Cr.) Sep’16 Mar’16 Sep’15 % Change

Sep ’16 vs Mar’16 Mar’16 vs Sep’15

Net Worth 560.23 628.77 694.81 -10.90% -9.51%

Current Assets 2,442.51 2,324.39 2,744.29 5.08% -15.30%

Non-Current Assets 713.19 720.79 744.13 -1.05% -3.14%

Total Assets 3,155.71 3,045.18 3,488.42 3.63% -12.71%

Investments 147.86 147.86 147.86 0.00% 0.00%

Finance Cost 55.54 59.73 56.19 -7.01% 6.30%

Long Term Liabilities 1,151.16 1,169.24 1,047.08 -1.55% 11.67%

Current Liabilities 1,444.31 1,247.17 1,746.53 15.81% -28.59%

Turnover 470.96 754.34 974.65 -37.57% -22.60%

Profit After Tax (PAT) -32.43 -42.32 -3.08 N.A. N.A.

EPS (₹) -1.08 -1.91 -0.15 N.A. N.A.

Source - Money control/Stock exchange filing

AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: No Audit Qualification in last 3 financial years. However, the Statutory Auditors has drawn

attention towards the following matters on Emphasis of Matter Para for FY 2015-16 and FY 2014-15:

Emphasis of Matters for the financial year 2015-16

Auditor draw attention to the following matters in the Notes to the financial statements:

a) Note 18 and 20 forming part of the financial statements regarding the Trade Receivables which are long overdue to the extent

of ₹207.56 crores of which ₹6.63 crore was provided as doubtful debts by the management. And ₹4.04 crore of advances are long

overdue of which ₹3.52 crore was provided as doubtful advances by the management.

b) Refer note No. 31 regarding the winding up petition filed by Standard Bank (Mauritius) Ltd., in the High Court of Andhra

Pradesh against the company for giving corporate guarantee for loan extended by the said bank to the step down subsidiary

Optimix Enterprises Limited for ₹40.88 crore. We are unable to form an opinion on the uncertainty regarding the outcome of

Andhra Pradesh High Court decision.

Emphasis of Matters for the financial year 2014-15

We draw attention to the auditor opinion of the subsidiary company incorporated in India M/s. Glade Steel Private Limited,

regarding capital advance of Rs.7.06 crore which is outstanding for more than three years and therefore unable to form an

opinion on the recoverability of the same. Consequently, uncertainty arises as to the amount recoverable and no provision has

been made in this regard by the subsidiary company incorporated in India. Our opinion is not modified in respect of this matter.

Response Comment

Frequency of Qualifications Not Applicable

Have the auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited financial statements? No -


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TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT 2015-16)

Regulatory Norms Company

% of Independent Directors on the Board 33% 44%

% of Promoter Directors on the Board - 11%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Independent Director

Is the post of Chairman and MD/CEO held by the same person? - No

Average attendance of Directors in the Board meetings (%) - 85.19%

Composition of Board: As per Regulation 17(1)(b) of the Listing Regulations, 2015, the Company should have at least 33%

Independent Directors as the Chairman of the Board is a Non-Executive Director. The Company has 44% of Independent

Directors and hence, it meets the regulatory requirements.

Board Diversity: The Company has 9 directors out of which 8 are male and 1 is female.

TABLE 5 - FINANCIAL RATIOS

Ratios Sep’16 Mar’16 Sep’15

% Change

Sep ’16 vs

Mar’16

Mar’16 vs

Sep’15

Turn

ove

r

Rat

ios

Inventory Turnover 1.34 2.11 3.71 -36.55% -43.13%

Debtors Turnover 0.28 0.48 0.53 -42.55% -8.61%

Fixed asset Turnover 0.66 1.05 1.31 -36.90% -20.10%

Current Asset Turnover 0.19 0.32 0.36 -40.59% -8.62%

Ret

urn

Rat

ios Operating Profit Margin 3.66% 0.08% 5.75% 4,658.17% -98.66%

Net Profit Margin -6.89% -5.61% -0.32% N.A. N.A.

Return on Assets (ROA) N.A. N.A. N.A. N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 1.69 1.86 1.57 -9.26% 18.61%

Quick Ratio 1.45 1.58 1.42 -8.21% 10.98%

Cash Ratio 0.27 0.32 0.36 -16.34% -11.44%

Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio 4.07 3.46 2.49 17.65% 38.70%

Interest Coverage Ratio 0.31 0.01 1.00 3,094.80% -99.03%

Trad

ing

Rat

ios

Market Cap / Sales 0.15 0.09 0.05 60.17% 106.23%

Market Cap/ Net Worth 0.13 0.11 0.06 12.23% 76.38%

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA 4.11 121.97 0.79 -96.63% 15,321.81%

Source - Money Control

TABLE 6 - TRADING VOLUME Jun’17 Dec’16 Jun’16

% Change

Jun ’17 vs

Dec’16

Dec’16 vs

Jun’16

Trading Volume (shares) (avg. of 1 qtr) 119,623 172,466 113,220 -30.64% 52.33%

Trading Volume (shares) (high in 1 qtr) 744,675 700,604 403,884 6.29% 73.47%

Trading Volume (shares) (low in 1 qtr) 12,945 14,666 16,731 -11.73% -12.34%

Ratio - High/low trading volume 57.53 47.77 24.14 20.42% 97.89%

Ratio - High/average trading volume 6.23 4.06 3.57 53.24% 13.88%

Source – Capitaline


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TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

June 17 Dec 16 June 16 Comments

Shar

eho

ldin

g (%

)

Promoter

shareholding 57.57 58.1 58.1

• No new equity shares were issued during the period

from June 2016 to June 2017.

• No major change in the promoter shareholding during

the period.

• No major change was observed in the shareholding of

Public institutions and other public shareholders.

• The promoters have pledged 100% of their

shareholding.

Public -

Institutional

shareholding

4.57 4.57 4.82

Public - Others

shareholding 37.86 37.32 37.07

Non-Promoter

Non-Public

Shareholding

0.00 0.01 0.01

MAJOR SHAREHOLDERS (AS ON 30TH JUNE, 2017)

S. No. Promoters Shareholding

S. No. Public Shareholders Shareholding

1 Yalamanchili Finance And Trading

Private Limited 43.66

1 Stressed Assets Stabilisation Fund

4.24 2 Foster Infin And Trading Private Limited 8.31

3 Sujana Holdings Limited 3.32

4 Yalamanchili Satyanarayana Chowdary 1.06

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares during the FY 2015-16.

Preferential issue to promoters

The Company issued 9,95,60,000 of shares of face value ₹5 each to the promoters of the

Company during January 2016 through preferential offering, thus increasing the

shareholding of promoters from 37.40% to 58.11%.

Preferential issue to others No preferential issue of shares was made to other shareholders during the FY 2015-16.

GDRs issued by the Company The Company did not issue any GDRs during the FY 2015-16.

Issue of ESOPs / Issue of shares

other than Preferential allotment

The Company did not issue any shares to the employees under its any ESOP Scheme

during the FY 2015-16.

Source - Annual Report 2015-16

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1 Iron and Steel Products 100%

Source - Annual Report 2015-16


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Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover


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Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock

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𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year


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