MIRA
INFORM REPORT
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Report Date : |
25.04.2007 |
IDENTIFICATION
DETAILS
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Name : |
ESAB INDIA LIMITED |
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Registered Office : |
Plot No. 13, 3rd Main Road, Industrial Estate, Ambattur, Chennai - 600 058, Tamil Nadu |
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Country : |
India. |
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Financials (as on) : |
31.10.2006 |
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Date of Incorporation : |
10.11.1987 |
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Com. Reg. No.: |
11-45251 |
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CIN No.: [Company
Identification No.] |
U99999MH1987PTC045251 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUME00307G |
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Legal Form : |
Public Limited Liability Company. The Company’s shares are listed on
Stock Exchanges. |
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Line of Business : |
Manufacturing and Marketing of Welding Electrodes, Gas Cylinder Valves, Medical Equipments, Copper Coated Wires and Arc Welding Machines. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 3000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having fine track
records. Trade relations are fair. Financial position is good. Payments are usually
correct and as per commitments. The company is doing well. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long
run. |
LOCATIONS
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Registered Office
: |
Plot No. 13, 3rd Main Road, Industrial Estate, Ambattur, Chennai - 600 058, Tamil Nadu |
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Tel. No.: |
91-44-26252115 / 3657 |
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Fax No.: |
91-44-26253108 |
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E-Mail : |
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Website : |
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Factory 1 : |
Plot No. 4, MIDC, Industrial Estate, Thane-Belapur Road, Thane 400 601, Maharashtra |
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Tel. No.: |
91-22-27600271 / 272 / 266 |
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Fax No.: |
91-22-27600267 / 269 |
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E-Mail : |
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Factory 2 : |
Lloyds Centre Point, 2nd Floor, 1096-A, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, Maharashtra, India. |
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Tel. No.: |
91-22-24329937 / 24313224 / 4569 / 4573 / 3224 |
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Fax No.: |
91-22-24329940 |
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E-Mail : |
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Factory 3 : |
Arc and Gas Equipment Factory, P-41, Taratala Road, Kolkata - 700 088, West Bengal |
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Tel. No.: |
91-33-24011947 |
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Fax No.: |
91-33-24681880 |
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E-Mail : |
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Factory 4 : |
Electrode Factory, B. T. Road, Khardah, P.O : B. D. Sopan, North 24- Parganas, Kolkata - 743 121, West Bengal |
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Tel. No.: |
91-33-25532897 / 98 / 2918 / 2695 / 3479 |
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Fax No.: |
91-33-25532429 |
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E-Mail : |
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Factory 5 : |
B-28, MIDC Industrial Area, Kalmeshwar, Nagpur - 441 501, Maharashtra |
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Tel. No.: |
91-7118-271337 / 462 / 463 |
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Fax No.: |
91-7118-271461 |
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E-Mail : |
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Standard
Consumables / Reclamation Consumables |
Electrode Factory, B. T. Road, Khardah, PO : B. D. Sopan, North 24- Parganas, Kolkata - 743 121, West Bengal |
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Tel. No.: |
91-33-25532003 |
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Fax No.: |
91-33-25532429 |
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E-Mail : |
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Special
Consumables |
Plot No. 4, MIDC Industrial Area, Thane Belapur Road, Thane - 400 601, Maharashtra |
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Tel. No.: |
91-22-27600261 |
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Fax No.: |
91-22-27600267 |
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E-Mail : |
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Arc Equipment /
Gas Equipment |
Arc and Gas Equipment Factory, P-41, Taratala Road, Kolkata - 700 088, West Bengal |
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Tel. No.: |
91-33-24011947 |
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Fax No.: |
91-33-24681880 |
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E-Mail : |
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Regional Offices |
Located at:- Kolkata, Thane, New Delhi and Chennai |
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Branches : |
144, 145 Kodambakkam High Road, Chennai – 600 034, Tamilandu |
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Tel. No.: |
91-44-28221152/28220724/28312821 |
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Fax No.: |
91-44-28312860 |
DIRECTORS
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Name : |
Mr. G. Hariharan |
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Designation : |
Managing Director |
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Name : |
Mr. Nawshir H. Mirza |
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Designation : |
Director |
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Name : |
Mr. J. Templeman |
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Designation : |
Director |
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Name : |
Mr. S. N. Talwar |
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Designation : |
Alternate to J. Templeman |
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Name : |
Mr. M.G. Foster |
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Designation : |
Chairman |
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Name : |
Mr. S. Sundar Ram |
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Designation : |
Director |
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Name : |
Mr. P. Mallick |
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Designation : |
Director |
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Name : |
Mr. S. Tandon |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Sanat Bhattacharya |
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Designation : |
Managing Director |
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Date of Birth/Age : |
58 years |
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Qualification : |
B.Sc. (Hons.) (Mining Engg.) AISM (Mining Engg), PGCGM (Indian Institute of Management) |
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Experience : |
38 years |
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Date of Appointment : |
01.02.1993 |
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Other Directorships : |
Atlas Copco (India) Limited, Vice President (Manufacturing) M & C |
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Name : |
Mr. B. Moham |
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Designation : |
Chief Financial Officer and Company Secretary |
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Name : |
Mr. S Venkatakrishnan |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Esab Holdings Limited |
5743200 |
37.31 |
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Mutual Funds and UTI |
2959019 |
19.22 |
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Banks, Financial Institutions and Insurance Companies |
26062 |
0.17 |
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Foreign Institutional Investors |
1131708 |
7.35 |
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Corporate Bodies |
1020031 |
6.63 |
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NRIs/OCBs |
156629 |
1.02 |
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Indian Public |
4356371 |
28.30 |
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Total |
15393020 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and Marketing of Welding Electrodes, Gas Cylinder Valves, Medical Equipments, Copper Coated Wires and Arc Welding Machines. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Welding Electrodes |
1000 Mtrs. |
318628 |
218025 |
182735 |
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Continuous Electrodes / Copper Coated Wires |
Tonnes |
12240 |
8100 |
6140 |
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Automatic Submerged Arc Electrodes |
Tonnes |
3480 |
-- |
-- |
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MS Welding Rods (Copper Coated Welding Fluxes) |
Tonnes |
360 |
-- |
-- |
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Welding Fluxes |
Tonnes |
4061 |
2440 |
1303 |
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Gas and Electric Welding and Cutting Equipment and Accessories |
Nos. |
233540 |
305837 |
100996 |
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Gas Cylinder Valves |
Nos. |
74000 |
61000 |
-- |
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Cutting Unit and Small Tools |
Nos. |
6000 |
7500 |
-- |
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Medical Equipment |
Nos. |
6650 |
7772 |
-- |
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Industrial Voltage Regulators and Stabilizer Equipment |
Nos. |
12000 |
-- |
-- |
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Flux Cored Wires |
Tonnes |
3000 |
-- |
-- |
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Industrial Uninterrupted Power Supply System |
Nos. |
2000 |
-- |
-- |
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Wear Plates |
Tonnes |
100 |
-- |
-- |
GENERAL
INFORMATION
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Bankers : |
v State Bank of India, Mumbai v Standard Chartered Grindlays Bank Limited, Mumbai v State Bank of Bikaner & Jaipur, Mumbai v State Bank of Travancore, Mumbai v Bank of Baroda, Mumbai v UTI Bank Limited |
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Facilities : |
-- |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
BSR & Company Chartered Accountants |
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Memberships : |
Confederation of India Industry |
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Parent Company : |
Esab Holding Limited, UK |
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Group Companies : |
v Esab Engineering Services Limited, India v Conarco Alambres y Soldaduras SA, Argentina v Esab AB Welding Equipment, Sweden v Esab Asia Pacific Pte. Limited Singapore v Esab Automation Limited, England & Wales v Esab Cutting Systems GmbH (Karben), Germany v OZAS-ESAB Sp. Z.o.o., Poland v Esab International AB, Sweden v Esab AB, Sweden v P.T. Karya Ysantara Cakti, Indonesia v Esab Middle East LLC., Dubai v ESAB SeAH Corporation, Korea v Esab S.A. Industrie e Comercio, Brazil v Esab Saldatura S.p.a, Italy v Esab Sp. Z.o.o., Poland v
Esab Vamberk s.r.o., Czech Republic |
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Associates/Subsidiaries : |
ASSOCIATES v Esab AB, Sweden v Esab Cutting Systems GmbH, Germany v The Esab Group Inc., USA v Esab SA Industriae Comercio, Brazil v Conarco Alambresy Soldaduras S.A., Argentina v Esab Asia Pacific Pte Limited, Singapore v Howden Power Limited, Northern Ireland v Howden Sirocco SA, France v Burton Corblin SA, France v Ventilatoren Sirocco Howden BV, The Netherlands v Turbowerke Meissen Howden GmbH, Germany v Voith Howden GmbH, Germany v Howden Power A/S, Denmark v Howden Buffalo Inc., USA v Howden Hua Engineering Company Limited, China v Howden African Holdings Limited, South Africa v Howden Food Equipment Inc., USA v Howden Airdynamics Inc., USA v Western Design Howden Inc, USA v Bauer Howden Inc, USA v HD Engineering Limited, Hong Kong v Esab Group (UK) Limited, England and Wales v Esab Automation Limited, England and Wales v Esab Group (Ireland) Limited, Ireland v ESAB Limited, England and Wales v ESAB Pensions Limited, England and Wales v Murex Welding Products Limited, England and Wales v Murex Limited, England and Wales v Hancock Cutting Machines Limited, England and Wales v Brinal Limited, England and Wales v Filarc Welding Limited, England and Wales v Arcos Welding Products Limited, England and Wales v Bilston Wire Mill Compound, England and Wales v Hobart Overseas Holdings Limited v Exelvia Netherlands BV v Esab Middle East LLC v Esab Seach Corporation, Korea SUBSIDIARIES Flo-Tech Welding & Cutting Systems Limited Block F2, Plot No. 71, MIDC, Pimpri, Pune - 411 018, Maharashtra E Mail : esabopune@vsnl.com |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
17000000 |
Equity Shares |
Rs.10/- each |
Rs.170.000 millions |
|
3000000 |
Unclassified Shares |
Rs.10/- each |
Rs.30.000 millions |
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Total |
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Rs.200.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
15393020 |
Equity Shares |
Rs.10/- each |
Rs.153.930
millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
153.930 |
153.930 |
153.930 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
614.131 |
187.425 |
246.680 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
768.061 |
341.355 |
400.610 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
0.000 |
113.081 |
110.300 |
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TOTAL BORROWING |
0.000 |
113.081 |
110.300 |
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DEFERRED TAX LIABILITIES |
4.866 |
2.320 |
0.000 |
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TOTAL |
772.927 |
456.756 |
510.910 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
494.516 |
352.947 |
377.246 |
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Capital work-in-progress |
65.601 |
58.966 |
2.629 |
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INVESTMENT |
77.289 |
1.571 |
1.571 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
8.276 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
258.124 |
260.324 |
199.082 |
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Sundry Debtors |
93.945 |
52.181 |
46.611 |
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Cash & Bank Balances |
207.861 |
562.763 |
257.805 |
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Other Current Assets and Loans & Advances |
102.354 |
59.489 |
40.113 |
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Total
Current Assets |
662.284 |
934.757 |
543.611 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
471.150 |
391.654 |
340.637 |
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Provisions |
55.613 |
499.831 |
81.786 |
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Total
Current Liabilities |
526.763 |
891.485 |
422.423 |
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Net Current Assets |
135.521 |
43.272 |
121.188 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
772.927 |
456.756 |
510.910 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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Sales Turnover |
2872.124 |
2381.629 |
1878.791 |
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Other Income |
57.839 |
99.063 |
39.162 |
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Total Income |
2929.963 |
2480.692 |
1917.953 |
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Profit/(Loss) Before Tax |
648.275 |
581.803 |
330.990 |
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Provision for Taxation |
221.569 |
184.708 |
127.488 |
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Profit/(Loss) After Tax |
426.706 |
397.095 |
203.502 |
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Earnings in Foreign Currency : |
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Export Earnings |
115.891 |
94.992 |
78.968 |
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Commission Earnings |
2.309 |
4.137 |
3.866 |
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Other Earnings |
0.059 |
0.299 |
0.407 |
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Total Earnings |
118.259 |
99.428 |
83.241 |
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Imports : |
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Raw Materials |
154.146 |
54.839 |
31.087 |
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Stores & Spares |
73.233 |
3.765 |
0.600 |
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Capital Goods |
26.650 |
0.131 |
0.000 |
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Total Imports |
254.029 |
58.735 |
31.687 |
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Expenditures : |
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Cost of Goods Sold |
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Manufacturing Expenses |
529.015 |
509.326 |
488.351 |
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Raw Material Consumed |
1692.858 |
1331.522 |
1034.497 |
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Interest |
12.689 |
13.335 |
7.267 |
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Depreciation & Amortization |
47.126 |
44.568 |
53.148 |
|
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Other Expenditure |
NA |
0.000 |
3.700 |
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Total Expenditure |
2281.688 |
1898.751 |
1586.963 |
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KEY RATIOS
|
PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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Debt-Equity Ratio |
0.10 |
0.30 |
0.49 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.11 |
|
Current Ratio |
1.04 |
0.97 |
0.88 |
|
TURNOVER RATIOS |
|
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|
Fixed Assets |
4.00 |
3.70 |
2.88 |
|
Inventory |
12.63 |
11.82 |
11.84 |
|
Debtors |
44.80 |
54.98 |
43.81 |
|
Interest Cover Ratio |
52.05 |
44.75 |
46.34 |
|
Operating Profit Margin(%) |
21.64 |
23.56 |
18.33 |
|
Profit Before Interest And Tax
Margin(%) |
20.20 |
21.91 |
15.84 |
|
Cash Profit Margin(%) |
14.48 |
16.26 |
12.02 |
|
Adjusted Net Profit Margin(%) |
13.04 |
14.62 |
9.53 |
|
Return On Capital Employed(%) |
108.15 |
123.32 |
67.59 |
|
Return On Net Worth(%) |
76.93 |
107.05 |
57.58 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.360.00/- |
|
Low |
Rs.356.00/- |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was incorporated on 10.11.1987 at Mumbai in Maharashtra under the name and style of Esweld Private Limited and changed its’ name to Esab India Private Limited. It was converted into a public limited with effect from 17th August, 1988.
It’s Company Registration No. is 45251.
The company was promoted by Esab Holding Limited, UK, a wholly owned subsidiary of Esab AB, Sweden, who took over the welding operations of Philips, Netherlands, parent company of Peico Electronics & Electricals Limited, Europe. Hence, the company acquired the existing welding units of Peico at MIDC industrial area, Thane, Maharashtra, on 1st July, 1988.
In August, 1994, the Esab group was acquired by Charter, UK. Esab, Sweden has a 37.31% stake in the company.
In May, 1991, the company acquired the welding division of IOL (erstwhile Industrial Oxygen). On 18th February, 1994, with retrospective effect from 1st April, 1992, Maharashtra Weldaids Limited (MWL) was amalgamated with the company. As per the merger scheme the erstwhile shareholders of MWL were allotted one share of every two shares held by them in MWL. However, the acquisition of these units, which were not doing well, had its own shortcomings and the company had to struggle to improve profitability in the initial years to prune excess workforce of IOL’s welding division by around 300 employees, the company offered VRS (Substantial part of VRS expense was written off by FY97).
In 1904, Oscar Kjellberg, a Swedish Engineer invented the first covered electrode. Shortly afterwards, he founded ESAB (Electriska-Svetsnings-Aktie-Bolaget), the landmark of beginning of a new era in the field of welding.
During the year 1999-2000, the company had introduced VRS for permanent workmen in its Kalwa Unit, which received an overwhelming response and as all the permanent workmen opted for the VRS, the company discounted the manufacturing operations at Kalwa Factory, the company is presently in the process of redeploying plant and machineries and other movable assets to other units.
Milestones
|
Year |
Milestones Achieved |
|
1904 |
The Coated Electrode (MMA Welding) |
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1937 |
Unionmelt (Submerged- Arc Welding) |
|
1938 |
Gravity Welding |
|
1944 |
Heliarc (TIG Welding) |
|
1947 |
MIG / MAG (Welding) |
|
1955 |
Plasma Cutting |
|
1960 |
Flux - Cored Wire |
|
1979 |
Narrow Gap Welding |
|
1982 |
LMA Electrodes (Low-Moisture Absorption) |
|
1989 |
Adaptive-Butt Welding and VacPac® (Vacuum-Packed) Electrodes |
|
1995 |
High Speed Cored Wire |
|
1996 |
Friction - Stir Welding |
|
1997 |
Laser-Bevel Cutting |
The ESAB group of companies employ about 8000 people. It has research and development centres in Sweden, Holland, Great Britain, Germany, USA and India.
At present, subject is the world's largest supplier of welding and cutting products.
BUSINESS
The company is engaged in manufacturing and marketing of Welding Electrodes, Gas Cylinder Valves, Medical Equipments, Copper Coated Wires and Arc Welding Machines.
Its' products find application in the automobile and general engineering industries. The company plans to launch additional products in the existing line of business. It has also undertaken a major diversification by launching new-generation working-environment products. Gas and arc equipment factories and electrode factory at Ambattur has received the ISO 9001 and 9002 accreditation. The company has also installed sophisticated inspection and testing equipments to upgrade the quality.
The company obtained a term loan to the extent of Rs. 75.000 millions for its capital expenditure programme. Out of this Rs. 60.000 millions was availed during the year 2002. In 2003 the company has relocated its manufacture of certain welding equipment products from Esab Thailand to the company’s Equipment factory at Taratala, Kolkata and the company had started exporting machines to international markets.
The company has technical collaboration with ESAB Holdings Limited, U.K.
The company's production status as on 31st December, 2002 was as under :
It is in trade terms with:
v Basanti Enterprise
v Chemicals and Meters
v Eastern Lamination Private Limited
v EPC Electricals Limited
v Ferro Curves
v Laminations Core Fabricators
v Medrubb Industries
v Profulla Box Manufacturing Company
v R. K. Enterprise
v Sarada Steel Industries
v Sun Electrical Engineering Company
v Unicare Emergency Equipment
v Yetazu Instrumentation
Collaborator:
Esab India is a 38% subsidiary of the Charter Group, UK (which took over the Esab group worldwide in 1994), which has interests in welding and rail track equipments. The group’s turnover stood at Pound 854 millions in 1995, with welding operations contributing Pound 713.3 millions. The Esab group constitutes the Charter group’s welding division and is the world leader with presence in 25 countries. It produces consumables in 23 countries and equipment in five countries (including India). The Esab group has a strong market position in leading technologies such as cored wire welding, plasma cutting equipment and mechanised cutting systems, the markets for which are growing at twice the industry average. The group has started sourcing some products for its Indian affiliate, though only on a limited scale. There is a possibility of The Charter group hiking its stake in Esab (India) to 51%.
The Company’s fixed assets include Freehold land, Leasehold land, Building, Plant and Machinery, Furniture and Fixtures and Motor Vehicles.
Profit before taxation increased by Rs.66.5 million over the previous
year even though the corresponding amount in 2005 included non-recurring income
of Rs.45.3 million.
The company continued to be the leader in its industry, achieving
highest sales and profit ever. The management looks to the future with
confidence, even though there is increasing competition from domestic and
international manufacturers.
During the year, the product range and production capacities were expanded.
Products based on technology transfers from ESAB group companies were launched
and have been well received by users.The new plant at Irungattukottai and a new
MIG line at Khardah went into commercial production. The company is also
setting up production capacity at Irungattukottai for Flux Cored Wires for
which it has entered into technology transfer agreements with ESAB group
companies. The above project and additional capacities on some of their
existing lines are scheduled to go on-stream in 2007.
In 2006, the Company entered into a joint venture with the Esab group
for engineering design and related services. A new Company, Esab Engineering
Services Limited, was incorporated for this purpose. The Company has invested
Rs.1.25 million in this joint venture for 24.9% of the equity.
Interest and finance charges were lower in 2006 due to foreclosure of
external commercial borrowings in that year.
Depreciation for the year was marginally higher due to capitalization in
2006 of the Irungattukottai project and of know how fees of Rs.27.3 million on
items of which commercial production has commenced.
The effective tax rate for 2006 was higher at 34.2% compared to 31.8% in
2005 due to significant tax exempt capital gains in 2005.
BALANCE SHEET
The company has added Rs.189.7 million to its Gross Fixed Assets.
Significant among them were the Irungattukottai manufacturing facility, MIG
line at the Khardah Factory and technology licence fees paid. Capital Work in
Progress at the end of the year was Rs.65.6 million largely representing
ongoing project work on the Flux Cored Wire project at Irungattukottai.
Investments at the end of the year represent short term cash surplus
deployed with mutual funds and also investments in Bonds for capital gains
exemption.
Inventory at the end of 2006 was lower at Rs.258.12 million as compared
to Rs.260 million at the end of 2005 inspite of a significant growth in volumes
in 2006.
Receivables in terms of days to sales were higher as compared to 2005
due to growth in Equipments business which involves longer credit terms.
Other current assets, loans and advances increased mainly on account of
higher balances with retirement benefits trusts, advances to suppliers and dues
from the joint venture for engineering services for start-up costs.
CASH FLOW
Liquid funds reduced by Rs.355 million during the year, due to dividend
payout of Rs.397 million, foreclosure of borrowings involving an outgo of
Rs.113 million and capital expenditure of Rs.196 million.
OUTLOOK, OPPORTUNITIES
AND THREATS
The outlook for the Company in the short term looks reasonably
favourable based on forecasted macro economic parameters.
Volatility of metal prices continues to be of concern. The expanding market
and shift towards better technologies by users of their products provide
opportunities for the company to grow.
Competition from low-end domestic and international manufacturers
including new entrants, poses, a threat to the
company's profitability. Further, the growth in employment opportunities
means that the company faces the threat of attrition of trained personnel.
The lease for the Kolkata Equipment Factory has expired and the
Company's efforts to negotiate a renewal on reasonable terms with the lessor,
the Kolkata Port Trust, continue.
INTERNAL CONTROLS
Internal controls are evaluated on an ongoing basis by the Internal
Auditors. Their reports are reviewed at Audit Committee meetings. Internal
auditors also report on the implementation of recommendations. The reviews by
Internal Auditors cover the various manufacturing and office locations. The
scope of their work includes internal controls on accounting, and for
efficiency and economy of operations.
RELATED PARTIES
Transactions with related parties are carried out at arm's length. Their
details are placed before the Audit Committee.
FINANCE
The Company's relationships with its bankers remained cordial throughout
the year. Surplus funds were placed in short term deposits with banks and in
debt / liquid schemes of mutual funds pending deployment for operational and
capital servicing needs.
SUBSIDIARY
Esab Welding & Cutting Systems Limited (EWCS) ceased operations in
June 2004 pursuant to the transfer of its
operations to the Company's Equipment Factory at Taratala.
ESAB India Limited, one of the leading suppliers of welding
and cutting products in the country started its operations in 1987 by acquiring
the welding business of Peico Electronics & lectricals Limited (now Philips
India Limited). It was promoted by Esab Holdings, UK, a subsidiary of Esab,
Sweden. The Company continued its expansion in the Indian market with the
purchase of Indian Oxygen Limited's welding business in 1991 and Flotech
Welding & Cutting Systems Limited in 1992, In Aug.'94, the Esab group was
acquired by Charter, UK. Esab, Sweden, has a 37.31% stake in the company. In
the same year Maharashtra Weldaids Limited was merged with the company.The
company has one subsidiary namely Esab Welding & Cutting Systems Limited
.
The companies products find application in the automobile and general
engineering industries. It has also undertaken a major diversification by
launching new-generation working-environment products. The company has its
plant located at Ambattur in Chennai, at North 24 Parganas & Taratala in
Kolkata, at Kalmeshwar in Nagpur, at Sriperumbudur in Kancheepuram.. Gas and
arc equipment factories and electrode factory at Ambattur have received the ISO
9001 and 9002 accredition. The company has also installed sophisticated
inspection and testing equipments to upgrade the quality.
ESAB products are now an integral part of industries like Shipbuilding,
Petrochemical, Construction, Transport, Offshore, Energy and Repair and
Maintenance.
In 2002 the company has relocated its manufacture of certain welding equipment
products from Esab Thailand to the company's Equipment factory at
Taratala,Kolkata and the company has started exporting machines to
international markets.
In June 2004, the Esab Welding & Cutting Systems Limited (company's
subsidiary) ceased operations pursuant to the transfer of its operations to the
Company's Equipment Factory at Taratala.
During 2004-2005, the company launched a project for commissioning a new
manufacturing facility at Irungattukottai near Chennai for the manufacture of
Welding and Cutting Equipment. The companies production capacity of Welding
Electrodes and Welding Fluxes expanded from 151200000 Mtrs to 153600000 Mtrs
and from 2140 tonnes to 2440 Tonnes respectively during the period.
Website Details :
Milestones
A century of ESAB innovations
In 1903, Oscar Kjellberg, a Swedish machine engineer was
working on ships and boilers in Göteborg, Sweden. His dissatisfaction with the quality of repair jobs fueled his
quest for a better solution that led to the invention of the world's first flux
covered electrode. On 12th September 1904, Elektriska Svetsnings Aktie Bolaget
(ESAB) was founded in Göteborg, Sweden. The major innovations in the course of
ESAB's history are:
1904 - The Coated Electrode (MMA Welding)
1937 - Union melt (Submerged-Arc Welding)
1938 - Gravity Welding
1944 - Heliarc (TIG Welding)
1947 - MIG/MAG (Welding)
1955 - Plasma Cutting
1960 - Flux-cored Wire
1979 - Narrow gap Welding
1982 - LMA Electrodes (Low-moisture Absorption)
1989 - Adaptive butt Welding
1995 - High speed Cored Wire
1996 - Friction stir Welding
1997 - Laser bevel Welding
Products
ESAB India has a wide and comprehensive range of welding,
cutting and allied products and services. The product range covers Welding
Consumables, Reclamation Consumables, Arc Equipment, Industrial Gas Equipment,
Cutting Machines and Working Environment Products for the specialised welding,
cutting and allied needs. These are manufactured to stringent quality control
measures in the state-of-the-art manufacturing units.
ESAB India also markets the latest generation of Welding
Consumables and equipment and cutting machines from other group companies located
outside India and thereby acts as a one-point source for all the needs of the
industry. ESAB India also manufactures and markets medical gas equipment.
They have classified their products into the following
categories:
v Welding Consumables
v Reclamation Consumables
v Arc Equipment
v Industrial Gas Equipment
v Environment Products
v
Cutting Systems
Exports :
ESAB India Limited, directly exports welding consumables and
welding and cutting equipment to Nepal, Bangladesh and Sri Lanka. The company also
exports products to Africa, Middle East, Asia Pacific, Europe and the USA
through its group companies in Sweden, Singapore and Dubai.
ESAB India Limited will showcase its latest products and
services at the 17th International Engineering & Trade Fair during 13-16
February 2007 being held at Pragati Maidan, New Delhi. Please visit stall # 04
at the Manufacturing Pavilion.
The ESAB Group
In 1904, Oscar Kjellberg, a Swedish engineer was working on ships and boilers
in Gothenburg, Sweden. He was not satisfied with the quality of repair jobs.
His quest for a better technology led to the invention of the world's first
covered electrode. And thus, Elektriska Svetsnings Aktie Bolaget (ESAB) was
born. Today, ESAB employs around 6,700 people of which more than 600 are
engaged in Research and Development at centers in Sweden, Holland, UK, Germany,
USA, Brazil and India. The ESAB Group is owned by the Charter plc. Group UK,
which is listed on the London Stock Exchange.
ESAB India Limited
ESAB India Limited started its operations in 1987 by acquiring the welding
business of Peico Electronics & Electricals Limited (now Philips India
Limited). The Company continued its expansion in the Indian market with the
purchase of Indian Oxygen Limited's welding business in 1991 and Flotech
Welding & Cutting Systems Limited in 1992, followed by the merger of
Maharashtra Weldaids Limited in 1994.
ESAB India Limited is owned 37% by the ESAB Group. The
remainder of its shares are held widely. The company is listed on the stock
exchanges of Mumbai and the National Stock Exchange. Mr. Michael Foster is the
Chairman of the Company.
Today, ESAB India has established itself as one of the
leading suppliers of welding and cutting products in the country. ESAB products
are now an integral part of industries like Shipbuilding, Petrochemical,
Construction, Transport, Offshore, Energy and Repair and Maintenance.
ESAB India's initiative on Total Quality Management has resulted
in ISO 9000 and ISO 14000 certifications for four of its principal
manufacturing facilities located at Kolkata, Chennai and Nagpur. Further, the
skills, know-how and resources at its Research and Development Departments,
have helped the Company to offer a wide range of world-class products for
diverse applications, cost effectively.
News
and Events
ESAB India Limited will showcase its latest products and
services at the 17th International Engineering & Trade Fair during 13-16
February 2007 being held at Pragati Maidan, New Delhi.
Northern Region Office shifted.
The Northern Region Office of the Company has been shifted
to the following address:
ESAB INDIA LIMITED
Northern Region Office
71 / 1, Najafgarh Road, New Delhi – 110015
Tel. 91-11-25415763
Fax. 91-11-25440843
New Central Region Office set up.
To enhance the sales and service network in Central India, a
new Central Region Office has been set up in Nagpur. The new regional office
will cover Madhya Pradesh, Chattisgarh, Vidharbha and Marathwada.
Central Region Office
No. 218, Ashirvad, South Ambazari Road, Bajaj Nagar, Nagpur
- 440010.
Tel. 91-7118- 271462
Fax. 91-7118- 271461.
Southern Region Office shifted.
The Southern Region Office of the Company has been shifted
to the following address:
ESAB INDIA LIMITED
Southern Region Office
Karumuttu Centre New No.634,(Old No.498), Anna Salai,
Nandanam, Chennai- 600035.
Tel.91-44-52040292/93/94/95
Fax.91-44- 52040289
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l Anti-Money
Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.97 |
|
UK Pound |
1 |
Rs.82.18 |
|
Euro |
1 |
Rs.56.91 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
51 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|