FINANCIAL HEALTH REPORT- RASHMI METALIKS LTD.

COMPANY PROFILE
RASHMI METALIKS LIMITED is a Public incorporated on 30 January 2004. It is
classified as Non-government Company and is registered at Registrar of
Companies, Kolkata.

The group is one of the largest players in the iron & steel sector in Eastern India
and is located in Kolkata, West Bengal, India. RASHMI METALIKS LIMITED has 3,024
total employees across all of its locations. There are 11 companies in the RASHMI
METALIKS LIMITED corporate family.

About the Group

Rashmi Group of companies, promoted by the Patwari family of Kolkata, has
been in iron and steel industry operations for over four decades and have
extensive experience and knowledge in the field of iron & steel and cement
industry. The group operates through three main entities viz. RCL, RML and
OMPL.

Main Products:

1. Ductile Iron Pipe

2. Iron Ore Pellet
3. TMT Bar
4. MS Billet
Financial Highlights at a Glance
FINANCIAL HEALTH ANALYIS

The assessment of Financial Health can be done by analyzing the performance

under four broad categories:

1. Profitability

2. Liquidity

3. Cash Flow

4. Leverage

Profitability
The profitability of the company can be analyzed by calculating the following ratios
for the company.

a) Gross Margin: This ratio indicates how profitable a company is at the most
fundamental level. Rashmi Metaliks Ltd. has a Gross margin of 82% which
indicates that a company can make a reasonable profit on sales, as long as it
keeps overhead costs in control.

b) EBITDA Margin: Rashmi Metaliks Ltd. has an EBITDA margin of 10% which is a
healthy sign as EBITDA margin measures how much cash profit a company made
in a given year before any interest, taxes, depreciation, and amortization.
c) Net Profit Margin: The net profit margin of Rashmi metaliks Ltd. is 3.9% which
is not a good indicator and it means that company is not adequately efficient at
converting sales into actual profit.

d) Earnings per Share: Rashmi Metaliks Ltd. has reported EPS of 21.93 INR which
is lucrative for investors and traders in stock market as it indicates high
profitability of the company.

Liquidity
The liquidity of the company can be analyzed by calculating the following ratios:

a) Current Ratio: The current ratio of the company is 1.41 which means that the
business has 1.4 times more current assets than liabilities to covers its debts. It
means that the realisation from current asset are considered to be adequate to
meet current liabilities in time.

b) Quick Ratio: The quick ratio is only 3.7% which says that the company does not
have sufficient current assets excluding inventory to meet its immediate cash
requirement.

c) CFO / Current Debt: This ratio is in negative which shows that the firm’s ability
to meet the current debt obligation from cash generated by the business is low.
Cash Flows
The cash flows of the company can be analyzed by calculating the following
ratios:

a) Accounts Receivable Turnover: This ratio is around 12, which means that 12
times per year the business collects its average accounts receivable. It indicates
the ability of a company to efficiently issue credit to its customers and collect
funds from them in a timely manner. It shows that Rashmi Metaliks enjoys a
high-quality customer base that is able to pay their debts quickly.

b) CFO/ Current Liabilities: This ratio is in negative in Rashmi Metaliks which shows
that the current cash flow is inadequate to pay the current liabilities. This is
because the company`s short term borrowings have increased from 6,864.13
lakhs INR to 47,736.87 lakhs INR in this financial year.

c) Operating Cash Flow Ratio: This ratio is in negative in Rashmi Metaliks Ltd. It
again shows the inadequacy of a company's cash generated from operating
activities to pay its current liabilities.
Leverage

a) Total Debt/Total Equity: A good debt to equity ratio is around 1 to 1.5.

The ratio is greater than 0.6, which means that more of the company's assets
are financed through debt.

b) Total Liabilities/Total Assets: This ratio is 0.3 in Rashmi Metaliks which

means that 30% of its assets are financed by creditors, and 70% are financed
by owners (shareholders) equity. This shows the lower degree of
leverage (DoL) and, consequently, lower risk of investing in that company.

c) Total Debt/ EBITDA: This ratio is around 1.326 which a good indicator and
shows that Rashmi Metaliks has enough cash available with the company to
pay back its debts,

Other Highlights:

Capacity Addition: During the year the Company has enhanced from 2,00,000 TPA
to 5,50,000 TPA of Di Pipe. Unit capacity in order to use Hot Metals from MBF more
effectively.

Revenue: With respect to previous financial year 2017-18 company has made 51%
increase in Sales. Company has achieved revenue of Rs. 3369.56 Cr in FY 2018-19
w.r.t. Rs. 2231.40 Cr in FY 2017-18.
Profitability: Company has achieved Profit after Tax (PAT) as a percentage to sales
of 3.97% as against 3.85% in FY 2017-18.

Future Prospects including constraints affecting due to Government policies:

Presently company is under installation of capacity addition in Sinter Plant by
installing one x70m2 sinter plant and to increase the production capacity of Blast
Furnace by argumentation, revamping and increasing annul working days.

SHARES

Buy Back Of Securities

The Company has not bought back any of its securities during the year under
review.

Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.

Bonus Shares
During the period 853,834,562Compulsorily Convertible Non-Cumulative
Preference Shares (CCPS) as Bonus Shares were issued during the
year under review.

Employees Stock Option Plan

The Company has not provided any Stock Option Scheme to the employees.
SHARE CAPITAL

During the financial year under review, your Company has increased its authorized
capital from Rs.6,25,000,000/- (Rupees Sixty Two CroresFifty Lakhs) to Rs.
1,100,00,00,000/- (Rupees One Thousand one Hundred Crores) divided into
20,00,00,000 (TwentyCrores only) Equity Shares of Rs.10/- (Rupees Ten only) each
and 90,00,00,000 (NinetyCrores only) Preference Shares of Rs.10/- (Rupees Ten
only) each. The Authorized Share Capital of the Company is Rs. 1,100,00,00,000/-
(Rupees One Thousand one Hundred Crores). During the period under review, your
company allotted 853,834,562 (Eighty Five Crores Thirty Eight Lakhs Thirty Four
Thousand Five Hundred and Sixty Two) Compulsorily Convertible Non-Cumulative
Preference Shares (CCPS) of Rs. 10/- (Rupees One Ten) each. The Compulsorily
Convertible Non-Cumulative Preference shares issued as Bonus shares to Equity
Shareholders in the ratio of 14:1.

PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

1. Unileen Properties Private Limited – Joint Venture- 37.50% Share

2. Patsloke Developers Private Limited- Associate- 45.00% share
3. Richiline Projects Private Limited –Associate- 20.00% share
4. Utzsho Distributors Private Limited- Subsidiary- 60.00% share
5. Utzsho Dealers Private Limited- Subsidiary- 60.00% share
Weaknesses

Ongoing dispute with South Eastern Railways: Rashmi group and SER have been
embroiled in a legal dispute over the freight charges paid by them for transport of
iron ore. According to the railways, the company had fraudulently transported iron
ore under concessional freight rates of railways meant for domestic consumption
of the ore in the company's plant in West Bengal. Though currently there is no
crystallised payable monetary liability to the railway administration, any
crystallisation of these penalties may impact the financial profile of the group.

Vulnerability to volatility in prices of raw material and finished goods: The

operating margin for the group is vulnerable to fluctuations in input prices (such as
iron ore and coke) as well as realisations of finished goods. The prices and supply
of the main raw material, iron ore, directly impacts the realisations of finished
goods and any sharp delta in input prices with absence of almost similar delta in
realisations can dent profitability significantly. Driven by such volatility margins had
dipped sharply to in fiscal 2016 and fiscal 2015. We think that the operating margin
of the group shall remain vulnerable to volatile input and finished good prices.