PROJECT SOURCE

Funding Proposal
January 2011
 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, 
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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.
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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)

1. Expansion by increasing the Manufacturing Capacity & New

Product Lines
Project
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

• Promoters are Technocrats and have wide experience in 
this industry

• Company is managed professionally

• Has experienced Technocrats and knowledgeable persons 
leading the key areas

7
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
(Rs in Mn)

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%

Balance Sheet

(Rs in Mn)

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

 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

CoP & MoF
Cost of Project Total (Rs in Mn)

Plant & Equipment 60.00

Land 528.00
Building 25.00
Furniture and Fixtures 285.00
Computer & ERP System 48.00
Others 25.00
Margin money on
working capital 146.12
Total 1,117.12 Means of Finance Total (Rs in Mn)

Equity 320.00

Term loan 655.00

Internal Accrual 142.12

Total 1117.12
Key Projected Financials
- Income Statement
- Balance Sheet
- Key Indicators
 Income Statement
(Rs in Mn)

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
74.54 306.15 512.92 666.68 781.87 866.23 908.37
Profit
Operating
20.71% 21.56% 21.64% 22.00% 22.02% 22.26% 22.28%
Profit Margin
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%

 Balance Sheet

(Rs in Mn)

Particulars 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Equity Share
61.26 76.34 76.34 76.34 76.34 76.34 76.34
capital
Reserves &
178.99 443.69 624.24 886.16 1,215.12 1,595.93 2,006.19
Surplus
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
245.43 1,193.96 1,136.92 1,079.88 1,022.84 965.80 908.77
Assets
Net
Working 151.07 570.47 930.38 1,239.17 1,585.23 1,939.48 2,316.91
Capital
Working
96.10 376.20 617.10 785.50 918.60 1,004.80 1,051.70
Capital Loan
 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