MIRA INFORM REPORT
|
Report
Date : |
30.04.2007 |
IDENTIFICATION DETAILS
|
Name : |
ESSAR OIL LIMITED |
|
|
|
|
Registered
Office : |
Khambhalia
Post, Post Box No. 24, District |
|
|
|
|
Country
: |
|
|
|
|
|
Financials
(as on) : |
31.03.2006 |
|
|
|
|
Date
of Incorporation : |
15.02.1997 |
|
|
|
|
Com.
Reg. No.: |
04-32116 |
|
|
|
|
CIN
No.: [Company Identification No.] |
L11100GJ1989PLC032116 |
|
|
|
|
TAN
No.: [Tax
Deduction & Collection Account No.] |
RKTE00150D |
|
|
|
|
Legal
Form : |
It is a Public Limited Liability company. The company’s
shares are listed on the Stock Exchanges. |
|
|
|
|
Line
of Business : |
Main
objective to provide Development, Exploration, Production and related
services in the Oil & Gas Sector. The company is engaged in Contract Drilling and Offshore
Construction. |
RATING & COMMENTS
|
MIRA’s
Rating : |
B |
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Unfavourable & favourable
factors carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
Maximum
Credit Limit : |
USD 100830000 |
|
|
|
|
Status
: |
Moderate |
|
|
|
|
Payment
Behaviour : |
Slow but
correct |
|
|
|
|
Litigation
: |
Clear |
|
|
|
|
Comments
: |
Subject
is a part of the Essar Group of M/s Shashi Ruia, Ravi Ruia and Prashant
Ruia. The
company’s turnover for the 15 months period ended 31/12/2003 was considerably
down. It is in
the process of implementation of 10.5 MMTPA Crude Oil Refinery, which was
affected due to cyclone in June 1998. The group
is not faring well and defaulted to government owned financial institutions
in making their interest payments. However
It can be considered for normal business dealings at usual trade terms and
condition with some caution. |
LOCATIONS
|
Registered
Office : |
Khambhalia
Post, Post Box No. 24, District |
|
Tel.
No.: |
91-2833-241444 |
|
Fax
No.: |
91-2833-241818
/ 241666 / 241414/ 241616 |
|
E-Mail
: |
|
|
Website
: |
|
|
|
|
|
Corporate
Office : |
Essar
House, P. O. Box No. 7945, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai – 400
034, Maharashtra, India |
|
Tel.
No.: |
91-22-24950606/ 66601100 |
|
Fax
No.: |
91-22-24954281 |
|
E-Mail
: |
|
|
Area : |
DIRECTORS
|
Name : |
Mr. Shashi Ruia |
|
Designation
: |
Chairman |
|
|
|
|
Name : |
Mr. Ravi Ruia |
|
Designation
: |
Vice Chairman |
|
|
|
|
Name : |
Mr. Prashant Ruia |
|
Designation
: |
Director |
|
|
|
|
Name : |
Mr. Awadhesh N. Sinha |
|
Designation
: |
Managing Director and CEO |
|
|
|
|
Name : |
Mr. Hari L. Mundra |
|
Designation
: |
Dy. Managing Director and Director (Finance) |
|
|
|
|
Name : |
Mr. Dilip J. Thakkar |
|
Designation
: |
Director |
|
|
|
|
Name : |
Mr. K. N. Venkatasubramanian |
|
Designation
: |
Director |
|
|
|
|
Name : |
Dr. G. Goswami |
|
Designation
: |
Nominee of IDBI Limited |
|
|
|
|
Name : |
Mr. N. S. Kannan |
|
Designation
: |
Nominee of ICICI Bank Limited |
|
|
|
|
Name : |
Mr. Sanjeev Ghai |
|
Designation
: |
Nominee of IFCI Limited |
|
|
|
|
Name : |
Mr. Suresh Mathur |
|
Designation
: |
Whole Time Director
|
KEY
EXECUTIVES
|
Name : |
Mr.
Sheikh S Shaffi |
|
Designation
: |
Company
Secretary |
MAJOR SHAREHOLDERS
As on 31.03.2007
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
|
Shareholding
of Promoter and Promoter Group |
|
|
|
Indian |
|
|
|
Individuals/
Hindu Undivided Family |
|
|
|
Central
Government/ State Government(s) |
|
|
|
Bodies
Corporate |
143252337 |
12.57 |
|
Financial
Institutions/Banks |
|
|
|
Any Other
(specify) |
|
|
|
Sub-Total
(A)(1) |
143252337 |
12.57 |
|
Foreign |
|
|
|
Individuals
(Non-Resident Individuals/Foreign Individuals) |
|
|
|
Bodies
Corporate |
74729537 |
6.56 |
|
Institutions |
|
|
|
Any Other
(specify) |
|
|
|
Sub-Total
(A)(2) |
74729537 |
6.56 |
|
Total
Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2) |
217981874 |
19.13 |
|
Public
Shareholding |
|
|
|
Institutions |
|
|
|
Mutual
Funds/UTI |
4084200 |
0.36 |
|
Financial
Institutions/Banks |
5561256 |
0.49 |
|
Central
Government/ State Government(s) |
|
|
|
Venture
Capital Funds |
|
|
|
Insurance
Companies |
|
|
|
Foreign
Institutional Investors |
45370211 |
3.98 |
|
Foreing
Venture Capital Investors |
|
|
|
Any Other
(specify) |
|
|
|
Sub-Total
(B)(1) |
55015667 |
4.83 |
|
Non-institutions |
|
|
|
Bodies
Corporate |
13930951 |
1.22 |
|
Individuals
– i. Individual shareholders holding
nominal share capital up to Rs. 0.001 millions. |
60983880 |
5.35 |
|
ii.
Individual shareholders holding nominal share capital in excess of Rs. 0.001 millions |
4647473 |
0.41 |
|
Any Other
(specify): NRIs and OCBs |
2584469 |
0.23 |
|
Sub-Total
(B)(2) |
82146773 |
7.21 |
|
Total
Public Shareholding (B)= (B)(1)+(B)(2) |
137162440 |
12.04 |
|
Total
(A) + (B) |
355144314 |
31.17 |
|
Shares
held by custodians and against which Depository Receipts have been issued |
784386324 |
68.83 |
|
GRAND
TOTAL (A)+(B)+(C) |
1139530638 |
100.00 |
BUSINESS DETAILS
|
Line
of Business : |
Main
objective to provide Development, Exploration, Production and related
services in the Oil & Gas Sector. The company is engaged in Contract Drilling and Offshore
Construction. |
|
|
|
|
Products
with ITC Code : |
ˇ
Contract Drilling – NA ˇ
High Speed Diesel – 2710 11 19 ˇ
Motor Sprit – 2710 19 30 |
GENERAL INFORMATION
|
No. of
Employees : |
About 1300 |
||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||
|
Bankers
: |
|
||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||
|
Facilities : |
Secured Loans (Rs. In millions)
NOTE # Term
Loans include interest funded for period upto September, 1 998, for period
subsequent to December, 2003 and interest funded on 1" April, 2006. Debentures Rs. 5377.900
millions (Previous Period Rs. 5418.500 millions) debentures are secured / to
be secured by first / second ranking security interests, on all movable and
immovable assets, present and future, and first ranking security interests in
favour of holders of more than 2000 debentures by pledge of shares of the
company held by the promoters / associates, security interest on rights,
title and interests under project documents, trust and retention accounts /
sub-accounts, insurance policies related to projects and personal guarantees by
promoters. Rs. 65.700 millions (Previous Period Rs. 65.700 millions) debentures are secured / to be secured by first ranking security interests, on all movable and immovable assets, present and future, pledge of shares of the company held by the promoters /associates, security interest on rights, title and interests under project documents, trust and retention accounts / subaccounts, insurance policies related to projects and personal guarantees by promoters. Term loans and Funded Interest Facilities
from banks and financial institutions Term
Loans and funded interest facilities from banks and financial institutions
are secured by first ranking security interests, on all movable and immovable
assets, present and future, pledge of shares of the company held by the
promoters / associates, security interest on rights,
title and interests under project documents, trust and retention accounts /
subaccounts, insurance policies related to projects and guarantees by
promoters and Vadinar Oil Terminal Limited. Short Term Loan from banks a) Rs.
4350.00 millions (Previous Period Rs. Nil) from a bank is secured by first
ranking security interests, on all movable and immovable assets, present and
future, pledge of shares of the company held by fee promoters / associates,
security interest on rights, title and interests under project documents,
trust and retention accounts / sub-accounts, insurance
policies related to projects and guarantees by promoters and Vadinar Oil
Terminal Limited. The loan is repayable on 31!l October, 2006. b) Rs. 230.00
millions (Previous Period Rs. Nil) from a bank is secured by fixed deposits placed
by a group company. Unsecured Loan (Rs. In millions)
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors
: |
Deloitte Haskins & Sells Chartered Accountants |
|
Address
: |
12, Dr. Annie Besant Road, Opp. Shiv Sagar Estate, Worli,
Mumbai-400018, Maharashtra, India |
|
|
|
|
Associates/Subsidiaries
: |
ˇ
Ajitesh Estates Private Limited (AEPL) ˇ
Arkay Holdings Private Limited (AHPL) ˇ
Essar Agrotech Limited (EAL) ˇ
Essar Construction Limited (ECL) ˇ
Essar House Limited (EHL) ˇ
Essar Information Technology Limited (EITL) ˇ
Essar International Limited (EINL) ˇ
Essar Investments Limited (EIL) ˇ
Essar-Power Limited (EPL) ˇ
Essar Projects Limited (EPL) ˇ
Essar Properties Limited (EPrL) ˇ
Essar Shipping Limited (ESL) ˇ
Essar Steel Limited (EStL) ˇ
Essar World Trade Limited (EWtL) ˇ
Essar Pipelines Limited (EPLL) ˇ
Essar Oil Holding Limited (EOHL) ˇ
Essar Energy ( ˇ
Essar Logistics Limited (ELL) ˇ
Future Travels Limited (FTL) ˇ
Golsil Exim Private Limited (GEPL) ˇ
Hill Properties Limited (HPL) ˇ
HY-Grade Pellets Limited (HGPL), ˇ
India Securities Limited (ISL) ˇ
Kanak Communications Limited (KCL) ˇ
New Ambi Trading and Investments Private Limited (NATIPL) ˇ
Nilkamal Traders Private Limited (NTPL) ˇ
Pratik Estates Private Limited (PEPL) ˇ
S G Chemicals Limited (SGCL) ˇ
Sea Pride Agencies Private Limited (SPAPL) ˇ
Trikaya Investments Limited (TIL) ˇ
UEM Essar JV ˇ
Vadinar Oil Terminal Limited (VOTL) ˇ
Vadinar Properties Limited (VPOL) |
|
|
|
|
Subsidiaries
: |
|
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
5,000,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 50000 millions |
Issued,
Subscribed Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
1,145,503,314 |
Equity Shares |
Rs. 10/- each |
Rs. 11455.000 millions |
Paid-up
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
1,083,577,314 |
Equity Shares |
Rs. 10/- each |
Rs. 10835.800 millions |
|
Add |
Forfeited Shares |
|
Rs. 166.000 millions |
|
|
|
Total |
Rs. 11001.800 millions |
FINANCIAL DATA
[all
figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 (12 months ) |
31.03.2005 (15 months) |
31.12.2003 (15 months) |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share
Capital |
11001.800 |
9559.000 |
3717.500 |
|
|
2]
Reserves & Surplus |
14205.500 |
14489.200 |
12886.500 |
|
NETWORTH
|
25207.300 |
24048.200 |
16604.000 |
|
|
LOAN
FUNDS |
|
|
|
|
|
1]
Secured Loans |
56029.600 |
48330.600 |
58267.500 |
|
|
2]
Unsecured Loans |
4646.200 |
2816.500 |
2675.200 |
|
TOTAL
BORROWING
|
60675.800 |
51147.100 |
60942.700 |
|
|
DEFERRED
TAX LIABILITIES |
330.800 |
322.400 |
267.600 |
|
|
|
|
|
|
|
TOTAL
|
86213.900 |
75517.700 |
77814.300 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
1843.600 |
1448.900 |
1441.300 |
|
Capital work-in-progress
|
36863.400 |
30220.900 |
37460.300 |
|
|
|
|
|
|
|
Expenditure During Constructions
|
28732.500 |
29318.100 |
44954.500 |
|
Advances on Capital Account
|
17444.800 |
13580.800 |
|
|
|
|
|
|
|
|
INVESTMENT
|
896.500 |
730.500 |
781.900 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Interest Accrued and Due on Investment
|
0.000
|
--
|
6.800 |
|
|
Inventories
|
364.900
|
1346.100
|
151.300 |
|
|
Sundry Debtors
|
811.200
|
1020.600
|
579.400 |
|
|
Cash & Bank Balances
|
5199.300
|
6993.100
|
3934.300 |
|
|
Loans & Advances
|
3052.300
|
2752.200
|
4204.800 |
Total Current Assets
|
9427.700
|
12112.000
|
8876.600 |
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
8979.600
|
6711.700
|
9724.500 |
|
|
Provisions
|
15.000
|
5181.800
|
5975.800 |
Total Current Liabilities
|
8994.600
|
11893.500
|
15700.300 |
|
Net
Current Assets
|
433.100
|
218.500
|
(6823.700) |
|
|
|
|
|
|
|
TOTAL
|
86213.900 |
75517.700 |
77814.300 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 (12 months ) |
31.03.2005 (15 months) |
31.12.2003 (15 months) |
|
Sales
Turnover [including other income] |
6992.200 |
11465.800 |
2179.400 |
|
|
|
|
|
|
Profit/(Loss) Before Tax |
(920.500) |
143.600 |
140.300 |
|
Provision for Taxation |
163.000 |
45.000 |
(66.100) |
|
Profit/(Loss) After Tax |
(936.800) |
98.600 |
206.400 |
|
|
|
|
|
|
Total Earnings |
71.900 |
51.700 |
NA |
|
|
|
|
|
|
Total Imports |
9.400 |
18.400 |
NA |
|
|
|
|
|
|
Total Expenditure |
7866.100 |
11322.200 |
2039.100 |
QUARTERLY
RESULTS
|
PARTICULARS |
30.06.2006 (1st Qtr) |
30.09.2006 (2nd Qtr) |
31.12.2006 (3rd Qtr) |
|
Sales Turnover |
402.600 |
274.300 |
1372.100 |
|
Other Income |
14.000 |
25.900 |
36.100 |
|
Interest |
22.600 |
17.800 |
38.000 |
|
Gross Profit |
(253.700) |
(284.000) |
15.000 |
|
Depreciation |
11.400 |
11.400 |
11.700 |
|
Tax |
4.800 |
1.600 |
2.100 |
|
Reported PAT |
(269.900) |
(297.000) |
1.200 |
200606 Quarter 1 : 1. Progress of Refinery Project :
During the quarter, construction activities at the Refinery Project site
maintained their momentum in order to achieve project commissioning in phases
ahead of schedule. 2. During the quarter, the company has received an advance
of Rs. 688.700 millions towards allotment of Global Depository Shares to be
issued. 3. Marketing infrastructure expenses represent the extraordinary amount
of Rs. 97.500 millions for the quarter ended 30th June, 2006 (Corresponding
previous year quarter- Rs 30.800 millions and Previous accounting year- Rs 353.700
millions) for creating, developing and retaining the marketing infrastructure.
4. The Scheme of arrangement and compromise with the Scheme lenders which
includes debenture holders holding more than 2000 fully paid 14% non
Convertible Debentures has been approved by the Hon'ble High Court of Gujarat
with some modifications on 31st March, 2006. The said modified
scheme is under implementation. 5.Consequent to the revised Accounting Standard
(AS) 15 'Employee Benefits' becoming effective from 1st April 2006, a charge of Rs.11.900 millions
(including Rs. 9.100 millions debited to Capital Work in Progress /Expenditure
During Construction) has been recorded in the current quarter on an estimated
basis. The impact of the revision in AS 15 for the period prior to 1st April
2006, is being ascertained and will be adjusted to opening reserves: 6. Income
tax includes current and deferred tax. 7. Previous periods' figures have been
regrouped/rearranged, wherever considered necessary. 8. Investor complaints:
Pending as an 31st March, 2006 - 358, received during the quarter - 1596
disposed-off-1693, balance as on 30th June, 2006-261. 9. The above results were
approved by the Board of Directors of the Company at its meeting held on 31st
July, 2006 at Mumbai. the results are subject to limited review by the
statutory auditors.
200609 Quarter 2 : 1. During the quarter, construction
activities at the Refinery Project site continued to maintain their momentum.
The pre-commissioning activities for Phase I of the project have already
started and as part of this exercise two consignments of crude oil have already
arrived at the site. 2. The Company has received an advance of Rs. 1191.600 millions
up to 30th September, 2006 towards allotment of Global Depository Shares which
are yet to be issued. 3. During the quarter, the Company continued to expand
its marketing network incurring significant costs in preparation of
commissioning of its Refinery project. Rs. 116.300 millions and Rs 213.800 millions
respectively, included in selling and distribution expenses, were further
incurred during the quarter and half year ended on 30th September, 2006
(Corresponding previous year quarter - Rs. 26.500 millions, corresponding
previous half year Rs 57.300 millions and Previous accounting year - Rs. 353.700
millions) for retaining the existing marketing infrastructure. 4. In pursuance
of a court order, the Company is accounting for the interest accrued funded on
certain debentures payable at a future date on cash basis and therefore the
same has not formed part of the Capital employed of the Refinery (under
construction). 5. Income tax includes current and deferred tax. 6. Previous
periods' figures have been regrouped/rearranged, wherever considered necessary.
7. The disclosure requirement regarding the Non-Promoters' shareholding
including their percentage has been amended in the listing agreement to
disclose the number of shares held by the Public including their percentage.
Accordingly, the figures and percentage relating to the corresponding previous
quarter, half year and yearend have been modified. 8. Investor complaints:
Pending as on 1 st July, 2006-261, received during the quarter -1118,
disposed-off-1300, balance as on 30th September, 2006-79. 9. The above results
were approved by the Board of Directors of the Company at its meeting held on
30th October, 2006 at Mumbai. The results are subject to limited review by the
statutory auditors.
200612 Quarter 3 : Expenditure Includes (Increase)/Decrease in Stock of trading
goods Rs (594.10)million Purchases of Trading Goods Rs 1920.70 million Staff
Cost Rs 5.40 million Selling & Distribution Expenses Rs 11.70 million Other
Expenditure Rs 11.50 million Tax Indicates Provision for Fringe Benefit Tax EPS
is less tan Rs 0.01 Status of Investor Complaints for the quarter ended
December 31, 2006 Complaints Pending at the beginning of the quarter 79
Complaints Received during the quarter 770 Complaints disposed off during the
quarter 825 Complaints unresolved at the end of the quarter 24 1. During the
quarter, the sequential commissioning of Phase I units of the Refinery project
was started w.e.f. November 24, 2006. The construction activities for Phase II
units continued to maintain their momentum During the trial runs of the units
commissioned in Phase I, the company produced 5.1 lakh MT of intermediate and
finished products, part of which were exported during the quarter. All expenses
and income arising out of trial production and its related marketing infrastructure/
development/maintenance expenses have beentreated as part of Expenditure During
Construction for ultimate capitalisation as per the Guidance Note on Treatment
of Expenditure during Construction period issued by the Institute of Chartered
Accountants of India. 2. During the quarter, the Company allotted 55,953,324
equity shares of Rs 10/- each at a premium of Rs 53.O0 per share, represented
by 365,708 Global Depository Shares (GDS) (with each GDS representing 153
underlying equity shares of the Company) in favour of Essar Energy Holdings
Ltd, Mauritius Out of Rs 3525.10 million raised by issue of GDS, the balance
amount of Rs 290.00 million as of December 31, 2006 has been placed as margin
deposit with banks against letter of credit facilities, the company has also
received an advance of Rs 235.40 million during the quarter towards allotment
of GDS, which are yet to be issued. 3. Previous periods figures have been
regrouped / rearranged wherever considered necessary. 4. The above results were
approved by the Board of Directors of the Company at its meeting held on
January 30, 2007. The results are subject to limited review by its statutory
auditors. 5. Upon receipt of request from a Promoter Company, the Board of
Directors of the Company have decided to obtain approval of the shareholders
for delisting of Equity Shares of the Company from Bombay Stock Exchange Ltd
& National Stock Exchange of India Ltd in accordance with the SEBI
(Delisting of Securities) Guidelines, 2003.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 (12 months ) |
31.03.2005 (15 months) |
31.12.2003 (15 months) |
|
Debt
Equity Ratio |
2.27 |
2.76 |
3.48 |
|
Long Term
Debt Equity Ratio |
2.27 |
2.76
|
3.48 |
|
Current
Ratio |
1.00 |
0.71
|
0.57 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
2.48 |
3.71
|
0.35 |
|
Inventory
|
7.44 |
11.17
|
8.40 |
|
Debtors |
6.95 |
10.45
|
1.48 |
|
Interest
Cover Ratio |
(2.76) |
1.84
|
(3.33) |
|
Operating
Profit Margin (%) |
(8.42) |
3.60
|
1.45 |
|
Profit
Before Interest and Tax Margin (%) |
(9.15) |
3.00
|
(8.78) |
|
Cash
Profit Margin (%) |
(12.02) |
1.54
|
6.51 |
|
Adjusted
Net Profit Margin (%) |
(12.75) |
0.94
|
(3.72) |
|
Return on
Capital Employed (%) |
(0.72) |
0.33
|
(0.17) |
|
Return on
Net Worth (%) |
(3.30) |
0.39
|
(0.31) |
STOCK PRICES
|
Face Value |
Rs. 10.00 |
|
High |
Rs. 56.00 |
|
Low |
Rs. 54.25 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Company has
three main divisions – energy, offshore exploration and petroleum products – in
addition to the new refinery being set up.
Its offshore division undertakes construction related to the oil
industry of oil and / or gas reserves.
The oil and gas exploration division will undertake exploration
activities.
The company
has entered into a MoU with Indian Oil Corporation (IOC), the giant government
owned public sector oil company which has the largest network of sales
outlets. According to the MoU, IOC has
agreed to accord top priority to all petroleum products produced by Essar
Refinery after meeting the requirements of its refineries in terms of
facilities owned/operated in IOC.
Company also has access to the Kandla –Bhatinda pipeline, which is owned
by IOC.
Further the
company has secured a drilling contract for the first time in
The company
is having off the 'Energy Division’ contract drilling business and the
'Exploration & Production Division’ of the company as 100 % wholly owned
subsidiaries. The board of directors of
the company has constituted an Asset Transfer Committee of Directors and
authorised it to take necessary steps for the same.
Incorporated in 1989,
Essar Oil (EOL) has three main divisions -- energy, offshore exploration and
petroleum products - in addition to the new refinery being set up. Its offshore
division undertakes construction related to the oil industry for extraction of
oil and/or gas reserves. The oil and gas exploration division will undertake
exploration activities.
Currently the company is setting up a 10.5 million mtpa oil refinery project at
Further the company has secured a drilling contract for the first time in
The company is hiving-off the 'Energy Division' (contract drilling business'
and the 'Exploration & Production Division' of the company as 100% wholly
owned subsidiaries. In July 2002 the company was awarded Coalbed Methane
exploration block in Raniganj measuring
500 sq.km. The work would commence on grant of
the petroleum exploration license.
Increase in the Share Capital
During the year, the paid up capital of the Company increased from 93,92,98,314
equity shares of Rs.10/- each to 108,35,77,314 equity shares of Rs.10/- each
upon issue of 14,42,79,000 equity shares of Rs.10/- each to the overseas
depository for Global Depository Shares (GDS) upon exercise of option by holders
of FCCBs aggregating to US$ 41 Million to convert their holdings into
GDS.
Pursuant to approval granted by the shareholders at the 15th Annual
General Meeting held on 30th September, 2005, the Company has proposed to issue
GDSs aggregating to US$ 78 million to Promoters on preferential issue basis.
In-principle approvals of National Stock Exchange of India Ltd. and Bombay
Stock Exchange Ltd. for listing of the shares represented by the GDS have been
obtained. The securities will be allotted shortly.
Information on Status of Company's
Affairs
Information on operational and financial performance, status of construction
activities at project site, etc. is given in the Management Discussion and
Analysis which is annexed to the Directors' Report and has been prepared in
compliance with the terms of clause 49 of the Listing Agreement with Indian
Stock Exchanges.
MANAGEMENT DISCUSSION AND ANALYSIS
REPORT
Industry Outlook
It is now well known that energy prices have risen to unexpected and alarmingly
high levels in the last three years. After rising from a price of US$ 23 per
barrel in mid 2003 to US$ 52 per barrel in April 2005, the bench mark Brent
crude prices hovered around US$ 62 per barrel in March 2006, representing an
increase of 20% over a year and almost three times in three years.
International prices are currently in the region of US$ 70 per barrel. Average
prices of the Indian basket of crude has also gone up from US$ 39 per barrel in
2004-05 to US$ 55 per barrel in the current fiscal year. The reasons for these
runaway price increases can be attributed to exceptionally robust economic
growth, capacity constraints in the downstream refining sector, speculation by
the trading community, geo political tensions and fear of natural calamities.
The Indian petroleum industry went through mixed fortunes as a result of the
dynamics of price movements in international markets. The Government's
compulsion to restrict price increases of petroleum, diesel, kerosene and LPG
(domestic) at the retail level meant that its Oil Marketing companies suffered
huge losses on retail sales, partly compensated through oil bonds. Oil refining
companies however, saw Gross Refining Margin (GRM) remaining healthy between
US$ 5.50 to US$ 10 per barrel depending on the technological capability and end
product mix of the refinery. Your Company, a pure marketing company, suffered
as it had to purchase products at international prices and retail them at
artificially low prices determined by the Government.
Refinery capacities in
The Auto fuel policy of the Government of India and the international trend to
move towards cleaner fuels with lower sulphur and benzene content mean that
refineries with the capability to produce EURO II, III & IV in terms of
premium pricing and demand. Your Board of Directors believes that the Company's
refinery is coming up at an opportune time and its further technological
up-gradation and re-configuration to produce higher grade and higher quality
fuels will be of considerable advantage.
Marketing
The demand for motor spirit and high-speed diesel remained strong with the auto
sector riding high on the back of a robust economic growth. However, the
Government's reluctance to allow increase in retail prices in line with rising
crude oil and product prices, led to a very piquant situation for the Company.
The more they sold, the more they lost.
In this unenviable situation, the Company has taken the following approach to
marketing its product:
They are not pursuing bulk sales to industrial consumers other than State
Transport undertakings where they have firm supply contracts.
The Company is faced with an extremely challenging situation in relation to
expansion of its retail outlets. However, as a long-term strategy and in the
hope that this anomaly in pricing has to find a correction in the near future,
Company has strengthened its retail network to 700 (as on March 31, 2006) from
500 last year. Company appreciates the hardship faced by the franchisees who
have had to contend with lower supplies and has structured a suitable
compensation package for them.
They believe that our business model is designed to create a win-win situation
for the consumer, the franchisee and the company. They operate on the principle
of quality, optimum cost and reasonable operating returns and in the current
adverse context, the low cost franchisee based model they have chosen for our
retail business is considered the most appropriate.
The Refinery
The Directors are pleased to report that the refinery project is proceeding at
a rapid pace. It may be recalled that as per the terms of agreement with the
Financial Institutions, the commissioning of the refinery is to be completed in
April 2007. Your Company has set a target of commissioning the first phase of
the refinery six months in advance. All necessary infrastructure such as power,
oil terminal facilities for receipt of crude and dispatch of products, tankages
etc. are at final stages of completion. Primary process units are at the
pre-commissioning stage.
A significant development in the re-start of the project has been the Company's
ability to modify the configuration to produce middle distillates, the largest
and fastest growing segments of the domestic and international markets. This
will ensure that they are at the upper end of the 'Gross Refinery Margin' chain
when they complete the commissioning of the refinery.
The pre-commissioning, commissioning, operation and maintenance task forces are
already in place and they are hopeful of a successful hand over from the
project teams.
They have completed the first phase of the township for our refinery staff and
they are now able to live close to the refinery.
Quality Assurance
The Company is in the process of setting up a modern laboratory spread over an
area of 1600 square meters. It will be equipped with modern, state-of-the-art
instrumentation such as UV spectrophotometers, Octane / Cetane engines, JFTOT,
CFPP, etc. The laboratory will be staffed by a highly skilled and experienced
team and will provide 24x7 support to the operating units and blending teams,
random testing of market samples and certification. The laboratory will also be
responsible for advising the refinery on parameters related to environmental
matters and other regulatory issues.
International Supply and Trading
An international supply and trading group has been set up at Mumbai, to manage
the supply, scheduling, optimised operations and trading of crude as well as
finished products. A core team of experienced industry professionals has been
recruited. Intensive class room and `on-desk' training programmes are being
conducted for personnel who will manage this function. The Company has also
installed a contemporary software system to assist in the selection of optimum
crude oils and product slate and also manage price risks associated with the
refinery business.
Upstream Activities
The high crude oil prices and increasing demand have resulted in a positive
market sentiment in the Exploration & Production business. However, intense
competition in the upstream oil and gas industry has also led to increased costs
across all areas of manning, equipment and exploration services. Several public
and private sector companies and international companies are actively pursuing
opportunities in this sector as the Government continues to encourage
exploration activity.
The Company has drilled three oil and gas wells and two appraisal wells in the
Cambay basin (CBON3) to evaluate the discovery of oil and is in the process of
formalising a development plan.
The Company expects to receive the final approval of the Production Sharing
Contract (PSC) shortly from the Government of India for the 'Ratna and R Series
Fields' which has in-place reserves of approximately 500 million barrels.
Company has a 50% share in these fields with ONGC having 40% and Premier Oil
10%.
There has been a delay in the Company's
During the year, the Company signed one on shore and one offshore exploration
and development block agreement with the Government of Myanmar and this is
currently in the exploration phase. Company has a 25% participating interest in
each of these blocks and considers these agreements as significant development
in the business plan of the E & P division.
Planning for the future
The Business Development Group of your Company is in the midst of preparing a
long term plan to further increase refinery capacity to 14 MMTPA initially and
enhance it to 32 MMTPA in the second stage and equip itself with the capability
to produce products across the value chain that most modern petroleum and petrochemical
complexes the world over strive to achieve. The up-gradation and optimization
will involve additional investments in process units and secondary facilities,
the planning for which is already under way.
Financial Highlights
The Company earned total income of Rs. 6992.200 millions in the twelve months
ended 31st March, 2006 as against Rs. 11465.800 millions in the fifteen months
ended 31st March, 2005. The under- recoveries in the marketing of transport
fuels on account of Government policy forced the Company to drastically curtail
its sales during the year, resulting in the steep decline in total income. The
loss after tax of Rs. 936.800 millions during the year under review was also
for the same reason and was considered necessary to establish and maintain
marketing infrastructure within domestic market until such time the refinery is
fully commissioned and the Government allows oil marketing companies to adjust
retail prices of fuels to match international price movements of crude.
The Company’s
Fixed Assets of important value includes:
n
Land
n
Building
n
Plant
and Machinery
n
Furniture
and Fixtures
n
Office
Equipments
n
Vehicles
n
Barge
WEBSITE DETAILS
ATTACHED:
About Us
The Essar Group is one of
The Group takes pride in being a high-performance multinational organisation,
providing world-class services and products. Manned by a highly efficient and
dynamic team of employees, the Group is growing stronger every day. A committed
corporate citizen, the group provides unwavering support to the community as
well as initiates various social and ecological drives that have a positive
impact on society.
World - class standards
We insist on setting and surpassing world-class benchmarks
in everything we do. No wonder we have the world’s largest gas-based sponge
iron plant and are one of the world’s largest integrated sea logistics
companies that owns India’s largest double hull, double bottom VLCC. All our
businesses are highly integrated across the value chain and use the latest
technology to stay strong and agile. We have invested several billion dollars
on exclusive state-of-the-art technology because we believe that it confers
strong strategic advantages.
History
The Essar group was founded over three decades ago by the
Ruia family and is headed by Chairman Shashi Ruia and Vice-Chairman Ravi Ruia.
The Ruia family has been in business and trading since the 1800s, when the
family first moved to Mumbai from Rajasthan in
Touching millions of lives
For decades, they
have quietly touched the lives of millions of people with the steel to build
cars, the oil to fuel factories, the power to light up thousands of lives and
the pipelines to bring drinking water to remote villages. Today, we have come
closer by connecting customers with our cellular phone services and talking to
thousands of people through our call centres, a countrywide chain of fuel
outlets and marketing steel at the retail level.
Essar Oil Limited
(EOL) is emerging as a leading integrated oil and gas company spanning the
entire value chain, from deep within the earth all the way to the end-consumer.
They have exploration and production (E&P) rights in some of
Exploration
and production
They were
one of the first private companies to bid for exploration blocks in 1993. They won
two onshore blocks in Rajasthan and one in the Mumbai offshore region, where they
have completed the first phase and are moving into test drilling. They were
then awarded a block each in the Cambay basin (Gujarat) and Cachar (
They also won the Ratna and R-series oilfields for development and production,
in partnership with ONGC and a major international company. The Ratna series,
located south of the prolific Bombay High field, holds an estimated 500 million
barrels of oil reserves. Independent international engineering firms have
certified its high latent value and EOL's share is worth around US$ 230
million.
The CBM (Coal Bed Methane) division pioneered a project in Mehsana,
Global-scale
refinery
They were
among the first to enter the refining sector when it was opened to private
participation. Their US$ 2.14 bn (Rs.99billion) refinery at Vadinar,
High automation, the latest technology and an ideal location on
Marketing]
Essar Oil
Limited ( EOL) is one of the few private companies permitted to market
petroleum products in
Their pipelines division is putting in place the
PRESS
RELEASE:
Essar
Steel's Total Income rises by 17.23% at Rs. 3242.19 cr.;
Net Profit registers a growth of 158.24%at Rs. 309.45 cr. for the half-year
ended Sept. 30, 2005
Essar Steel's Total
Income rises by 10.53% at Rs1589.30 cr.;
Net Profit registers a growth of 46.62%at Rs. 101.74 cr. for the quarter ended
Sept. 30, 2005
October 28, 2005
Corporate Communications
Financial
Performance
Essar Steel Limited (ESTL) registered a growth of 17.23% in total income at
Rs.3242.19 crore for the half year ended September 30, 2005 compared to
Rs.2765.68 crore in the corresponding period of the previous year. The growth
in net profit was 158.24% at Rs. 309.45 crore (Rs.119.83 crore) after providing
for finance costs at Rs.227.43 crore (Rs273.84 crore), Depreciation at Rs.
199.21 crore (Rs. 195.10 crore), Provision for Fringe Benefit Tax at Rs.1.62
crore (nil), Deferred Tax at Rs. 149.52 crore, (Rs.17.08), Provision for Tax at
Rs. 20.91 crore (Nil).
Manufacturing
ESTL's
steel production during the period grew by 12%, ending the half year with a
total production of 12.27Lakh tonnes (10.94 Lakh tonnes). The production would
have been higher but for a major planned shutdown of the plant for a fortnight
for up-gradation of the mill as part of increasing the capacity from 3 MTPA to
4.6 MTPA. The input costs of gas, iron ore and iron ore fines went up during
the period under review.
Marketing
Total
sales registered a growth of 12% at 11.88 Lakh tonnes for the half year ended
on September 30, 2005 as compared to 10.58 Lakh tonnes in the corresponding
period of the last year. While Domestic sales grew 24% at 8.52 Lkh Tonnes (6.89
Lakh Tonnes), Exports were lower by 9% at 3.36 Lakh tonnes (3.69 Lakh tonnes).
During
the period, the company increased its penetration in the domestic market and
reduced its exports due to volatile global market conditions. API grade and
structural grade steel led domestic growth. The Company introduced CRCA
products in the domestic market. Value added grades of HR coils were approved
by new customers in power and engineering
segment. 54% of the HR exports was of specialty grades like Line Pipe API, Hi
tensile grades and plates. Demand is stable from all sectors of the economy.
Total
Integration
The
1.2 million tonne cold rolling complex was inaugurated during the period. The
slurry pipeline and the iron ore beneficiation projects were completed and are
due for commissioning. With this, Essar Steel has completed the integration,
the benefits of which are expected in the coming years.
About
Essar Steel
Essar
Steel is the flagship company of the Essar Group and has a capacity of 3
million being increased to 4.6 million tonnes of steel per annum at its modern
steel plant at Hazira,
Essar signs MOU with MTVL
to
buy their stake in Hutchison Essar for Rs. 657 crore
October 18, 2005
Essar Teleholdings today announced
that it has entered into a MOU with Max Telecom Ventures Ltd. (MTVL) to acquire
MTVL's 3.16% stake in Hutchison Essar for an all cash deal aggregating Rs. 657
crore at a sale price of Rs. 607 per share.
On completion of this purchase, Essar Group's stake in Hutchison Essar will
increase from 30.42% to 33.58%
Commenting on the transaction, Mr. Vikash Saraf, CEO, Essar Teleholdings
said, "This acquisition is part of our decision to enhance our stake in
the consolidated entity and also reflects the strong relationship between Essar
and Hutch".
Essar
Shipping conferred "The Safest Indian Shipping Company" Award
October
01, 2005
Essar
Shipping has been conferred "The Safest Indian Shipping Company -
2004" award by the National Maritime Day Celebrations Committee. The
award has been constituted by the Director General of Shipping.
The
awards recognize and honour Indian Shipping Companies for their sustained
contribution to the cause of Indian shipping and Indian seafarers and at the
same time, motivate and encourage them to maximize their efforts towards this
cause. Essar Shipping was given "The Safest Indian Shipping Company
-2004" award on the basis of a five year weighted average covering
incidents of fatalities and permanent disabilities compared to number of total
seafarers employed.
His
Excellency Mr. Antonio Armellini, Ambassador of Italy in
Commenting
on the award, Mr. Sanjay Mehta, Managing Director, Essar Shipping said, "This
award demonstrates the commitment of Essar Shipping to provide quality and
competitive sea logistics services to our clients without compromising on
safety. We believe that the quality and dedication of our people are our biggest
assets."
Essar
Shipping is focussed on providing transportation solutions to the global
energy, steel and power business. It has diverse sea logistics assets including
a fleet of 26 ships and terminaling assets valued at USD 1 billion.
Essar Shipping is part the Essar Group with interests spanning Steel, Oil &
Gas, Power, Telecom, Shipping and Constructions. The Group has an asset base of
Rs. 20,000 crore.
Hutchison Essar Signs Agreements to
Acquire BPL Mumbai, BPL Cellular and Essar Spacetel
September 26, 2005
Hutchison
Essar Limited ("Hutchison Essar") today announced that it has entered
into a binding conditional term sheet for the acquisition of BPL Mobile
Communications Limited ('BPL Mumbai') and BPL Mobile Cellular Limited ('BPL
Cellular'). It also announced that it has entered into a conditional agreement
to acquire Essar Spacetel Limited ('Essar Spacetel'), a company that has
applied for licences in seven licence areas not presently serviced by Hutchison
Essar.
BPL Mumbai is the second largest mobile telecommunication services operator in
Mumbai with 1.3 million* customers, whilst BPL Cellular operates in 3 licence
areas - Maharashtra & Goa, Tamil Nadu and Kerala and has 1.5 million*
customers. Hutchison Essar will pay approximately US $ 1.15 billion for these
transactions, which includes the cash consideration and assumption of debt.
Essar Spacetel has applied for licences for telecommunication services in seven
circles in which Hutchison Essar does not currently operate, namely Madhya
Pradesh, North East, Himachal Pradesh, Bihar,
When completed, these acquisitions will immediately increase Hutchison Essar's
customer base to more than 12 million, and will leave it poised to become the
premier pure play national mobile telecommunication services operator, covering
the entire country.
Ravi Ruia, Director of Hutchison Essar and Vice Chairman of the Essar Group
said, " The consolidation of BPL's mobile services and Essar Spacetel with
Hutchison Essar is another significant step towards making it one of
Hutch and BPL Mobile are among
Dennis Lui, Director of Hutchison Essar and Chief Executive Officer of
Hutchison Telecommunications International Limited said, 'These are defining
acquisitions for Hutchison Essar. By giving us the ability to complete our
nationwide coverage, they position us to capitalise on the tremendous growth
opportunities in
'This is a major investment for Hutchison Essar and clearly signals the
commitment of its principal shareholders, Hutchison Telecom and Essar Group, to
being a major force in shaping the mobile telecommunications scene in
The cost of these acquisitions will be funded by a combination of shareholder
funding and external bank borrowings of Hutchison Essar. The parties will move
to signing definitive agreements in relation to the acquisition of BPL Mumbai
and BPL Celluar as soon as practicable. Completion of the acquisition of BPL
Mumbai and Essar Spacetel are subject to regulatory approvals and other
conditions.
About
Hutchison Essar Limited
Hutchison Essar, with over 9.3 million* mobile users under the Hutch and
About
Hutchison Telecommunications International Limited
Hutchison
Telecommunications International Limited (Hutchison Telecom or the Group) is a
leading global provider of telecommunications services.
The
Group currently offers mobile and fixed -line telecommunication services in
Hong Kong, and operates or is rolling out mobile telecommunication services in
CMT REPORT [Corruption, Money laundering & Terrorism]
The Public Notice information has been collected from
various sources including but not limited to: The Courts,
1] INFORMATION ON DESIGNATED PARTY
No
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. 40.57 |
|
|
1 |
Rs. 80.97 |
|
Euro |
1 |
Rs. 55.19 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP
CAPITAL |
1~10 |
4 |
|
OPERATING
SCALE |
1~10 |
3 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT
LINES |
1~10 |
2 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT
POINTS |
|
|
|
--BANK
CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--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 |
|
35 |
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 |
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 |