MIRA INFORM REPORT
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Report Date : |
25.05.2007 |
IDENTIFICATION DETAILS
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Name : |
ESSAR STEEL LIMITED |
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Registered Office : |
Post - Hazira, District |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
01.06. 1976 |
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Com. Reg. No.: |
04-13787 |
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CIN No.: [Company
Identification No.] |
L27100GJ1976PLC013787 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
SRTE00025E |
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Legal Form : |
Public Limited Liability company. The company’s shares are listed on
the Stock Exchanges. |
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Line of Business : |
Manufacturers of Hot Briquetted Iron, Hot Rolled Coils/ Sheets and
Pellets. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
RATING
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STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 161000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is an important company of Essar Group managed and controlled
by Ruia brothers. The company’s shares are listed on the stock exchange. Due to
overall improvement in steel industry in The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office : |
Post : Hazira, District |
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Tel. No.: |
91-261-28326260/26682400/2872400 |
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Fax No.: |
91-261-28326462/26698296 |
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E-Mail : |
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Website : |
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Corporate Office : |
Essar House, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai – 400 034, |
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Tel. No.: |
91-22-24950606 |
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Fax No.: |
91-22-24954283 |
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E-Mail : |
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Factory : |
HRC Plant, 27 Km, |
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Branch : |
Ahmedabad 172/2 Premchand Annexe, Behind Popular House, Telephone: 91-79-26580277/
3628 Fax: 91-79-26581917/ 5717 Chennai 77, Telephone: 91-44-24991992/
1206 Fax: 91-44-24994922 Telephone: Group : 91-11-29842563
/ 9503 Essar Oil :
91-11-29836079 / 51727378 Fax: Group : 91-11– 29844370 Essar Oil : 91-11- 51017349
/ 51716580 Email: corporatecommunications@essar.com Vadinar Essar Oil Limited Refinery Project Site Head Post Office, Post Box No. 24 Khambhalia 361 305, District Telephone: 91-2833-241444 Fax: 91-2833-241414 Vizag Hy-Grade Pellets Limited Telephone: 91-891-2559901-10 |
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Overseas Offices : |
Name: Mr. Deep Banerjee Company: Essar Steel Limited / Essar - Beijing Representative Office Unit 1509, China World Tower 1, China World Trade Centre, No 1 Jian
Guo Men Wai Avenue, Beijing 100004, P R CHINA Telephone: 86-10-58669923
(Board)
86-10-58669925 (Direct) Fax: 86-10-58669924 Email: deepessar@hotmail.com Telephone: 974- 467 4343 Fax: 974- 467 0535 Company: PT Essar Dhananjaya. Graha Essar, Bekasi Fajar Industrial Estate, Industri 3 , Area Kav # B1
Cibitung, Bekasi 17520 West Java, Indonesia. Telephone: 62- 21- 8980152/
53/ 54, 8980203/ 4/ 6/ 7 Tlx: 64827 ESSAR IA Fax: 61 -21- 8980150/ 51 Email: marketing@essar.co.id Name: Essar Gulf FZE LOB 6, G-18, Post Box No. 61078, Jabel Ali, Telephone: 9714- 881 7278 Fax: 9714- 881 7281 36th Floor, 145, Telephone: 1- 212-7585520 Fax: 1- 212-7585860 |
DIRECTORS
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Name : |
Mr. Shashi Ruia |
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Designation : |
Chairman |
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Name : |
Mr. Ravikant
Ruia |
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Designation : |
Vice-Chairman |
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Name : |
Mr. Prashant
Ruia |
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Designation : |
Managing
Director |
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Name : |
Mr. Vikram Amin |
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Designation : |
Director –
Marketing |
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Name : |
Mr. V. G.
Raghavan |
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Designation : |
Director -
Finance |
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Name : |
Mr. Jatinder
Mehra |
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Designation : |
Director |
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Name : |
Mr. S. V.
Venkatesan |
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Designation : |
Director |
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Name : |
Mr. Sanjeev
Shriya |
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Designation : |
Director |
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Name : |
Mr. Jitender
Balakrishnan |
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Designation : |
Nominee - IDBI |
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Name : |
Mr. G. A. Nayak |
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Designation : |
Nominee - UTI |
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Name : |
Mr. G. D.
Goswami |
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Designation : |
Nominee - ICICI
Bank |
KEY EXECUTIVES
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Name : |
Mr. Narottam B.
Vyas |
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Designation : |
Company
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
Equity Shares
|
Names
of Shareholders |
No. of Shares |
Percentage of
Holding |
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EQUITY SHARES |
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[A] Promoters and Promoter Group |
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1. Indian |
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Bodies Corporate |
329691487 |
28.93 |
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2. Foreign |
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Bodies Corporate |
662894250 |
58.16 |
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[B] Public Shareholding |
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1. Institutions |
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Mutual Funds / UTI |
760590 |
0.07 |
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Financial
Institutions / Banks |
4443259 |
0.39 |
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Insurance
Companies |
4062199 |
0.36 |
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Foreign
Institutional Investors |
22568578 |
1.98 |
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Financial
Corporation |
190 |
0.00 |
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2. Non-Institutions |
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Bodies Corporate |
32076425 |
2.81 |
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Individual
shareholders holding nominal share capital up to Rs. 0.100 million |
68729045 |
6.03 |
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Individual
shareholders holding nominal share capital in excess Rs. 0.100 million |
12024688 |
1.05 |
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Any Other : NRIs
and OCBs |
2560177 |
0.22 |
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TOTAL |
1139810888 |
100.000 |
[Preference Shares]
|
Names
of Shareholders |
No. of Shares |
Percentage of
Holding |
|
EQUITY SHARES |
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[A] Promoters and Promoter Group |
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1. Indian |
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Bodies Corporate |
31987658 |
15.76 |
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2. Foreign |
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Bodies Corporate |
87168035 |
42.96 |
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[B] Public Shareholding |
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1. Institutions |
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Mutual Funds / UTI |
433390 |
0.21 |
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Financial
Institutions / Banks |
1530970 |
0.75 |
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Insurance
Companies |
3631202 |
1.79 |
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Foreign
Institutional Investors |
3971302 |
1.96 |
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Financial
Corporation |
460 |
0.00 |
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2. Non-Institutions |
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Bodies Corporate |
11484999 |
5.66 |
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Individual
shareholders holding nominal share capital up to Rs. 0.100 million |
49793943 |
24.54 |
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Individual
shareholders holding nominal share capital in excess Rs. 0.100 million |
10979722 |
5.41 |
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Any Other : NRIs
and OCBs |
1943151 |
0.96 |
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TOTAL |
202924832 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of Hot Briquetted Iron, Hot Rolled Coils/ Sheets and
Pellets. |
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Products : |
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Exports to : |
Middle East Asia, South East Asia including |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Hot Briquetted Iron Plant |
MT |
3400000 |
2809284 |
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Hot Rolled Coils / Sheets |
MT |
2400000 |
2324362 |
GENERAL INFORMATION
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No. of Employees : |
2732 |
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Bankers : |
v
State Bank of v
Punjab National Bank v
Bank of v
Allahabad Bank v
State Bank of v
State Bank of v
Indian Bank v
State Bank of Saurashtra v
State Bank of v
Standard Chartered Bank v
Export Import Bank of |
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Banking
Relations : |
Satisfactory |
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Auditors : |
B.P. Jain and
Company Chartered
Accountants, A-16, Everest, |
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Group Companies : |
v
ClickforSteel Services Limited (CFS) v
Essar Agrotech Limited (EAL) v
Essar Constructions Limited (ECL) v
Essar House Limited (EHL) v
Essar Information Technology Limited (EITL) v
Essar Investment Limited (EIL) v
Essar Oil Limited (EOL) v
Essar Projects Limited (EPL) v
Essar Properties Limited (EPRL) v
Essar Shipping Limited (ESL) v
Essar Teleholdings Limited (ETL) v
Futura Travels Limited (FTL) v
India Securities Limited (ISL) v
Bhander Power Limited (BPL) v
Essar World Trade Limited (EWTL) |
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Subsidiaries : |
v
Steelco Gujarat limited |
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Membership : |
v
Confederation of Indian Industry |
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Associates : |
v
Essar Global Limited, v
Essar Infrastructure Holdings
Limited, v
Essar Steel Holdings Limited, v
Essar Energy Holdings Limited, v
Essar Logistics Holdings Limited, v
Asia Pacific Markets Limited, v
Asia Pacific Corporation Limited, v
Asia Pacific Enterprises Limited, v
Asia Far East Limited, v
Essar Sisco Ship Management Limited, v
Essar Power Holdings Limited, v
Essar Investments Limited, v
Tetech Investments ( v
ETHL Global Capital Limited v
Hazira Steel 2, v
P T v
Essar Power Limited (EPOL), v
Hy-Grade Pellets Limited (HGPL) |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
3520000000 |
Equity Shares |
Rs.10/- each |
Rs. 35200.0000
millions |
|
60000000 |
0.01% Cumulative Preference Shares |
Rs.90/- each |
Rs. 5400.000
millions |
|
60000000 |
Redeemable Cumulative Preference Shares |
Rs.90/- each |
Rs. 5400.000 millions |
|
100000000 |
10% Cumulative Preference Shares |
Rs.10/- each |
Rs. 1000.000 millions |
|
300000000 |
0.01 % Cumulative Preference Shares |
Rs.10/- each |
Rs. 3000.000 millions |
|
65000000 |
8 % Cumulative Preference Shares |
Rs.350/- each |
Rs. 22750.000
millions |
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GRAND
TOTAL |
|
Rs. 72750.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
507312080 |
Equity Shares |
Rs.10/- each |
Rs. 5073.121 millions |
|
4520703 |
Add : Shares Forfeited |
|
Rs. 6.700
millions |
|
55222000 |
0.01% Cumulative Preference Shares |
Rs.90/- each |
Rs. 4970.000
millions |
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GRAND
TOTAL |
|
Rs. 10049.821 millions |
Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2785290000 |
Equity Shares |
Rs.10/- each |
Rs. 27852.900
millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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|
|
|
|
1] Share Capital |
27852.900 |
10049.800 |
5079.700 |
|
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2] Redeemable Preference Shares |
0.000 |
332.700 |
740.600 |
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3] Reserves & Surplus |
12461.800 |
6866.100 |
14429.600 |
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4) Advance subscription towards share capital |
0.000 |
0.000 |
4970.000 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
(13563.000) |
|
NETWORTH
|
40314.700 |
17248.600 |
11656.900 |
|
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LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
75346.400 |
41263.200 |
44552.500 |
|
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2] Unsecured Loans |
6504.600 |
6842.700 |
6973.600 |
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TOTAL BORROWING
|
81851.000 |
48105.900 |
51526.100 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
688.700 |
|
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Long-term Advances from Customer |
0.000 |
660.500 |
1380.200 |
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TOTAL
|
122165.700 |
66015.000 |
65251.900 |
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APPLICATION OF FUNDS
|
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FIXED ASSETS [Net Block]
|
63984.500 |
32489.000 |
34855.300 |
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Capital work-in-progress
|
28873.600 |
5896.400 |
1380.200 |
|
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INVESTMENT
|
1829.700 |
7683.800 |
7726.800 |
|
DEFERREX TAX ASSETS
|
0.000 |
4809.600 |
6768.300 |
|
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CURRENT ASSETS, LOANS &
ADVANCES
|
|
|
|
|
|
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Inventories
|
14853.400
|
9332.200
|
6942.800 |
|
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Sundry Debtors
|
5401.600
|
4713.000
|
3936.600 |
|
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Cash & Bank Balances
|
7257.900
|
2531.500
|
956.300 |
|
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Loans & Advances
|
24970.600
|
7380.100
|
9672.400 |
Total Current Assets
|
52483.500
|
23956.800 |
21508.100 |
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities and
Provisions
|
25005.600
|
8820.600
|
6986.800 |
Total Current Liabilities
|
25005.600
|
8820.600 |
6986.800 |
|
Net Current Assets
|
27477.900
|
15136.200 |
14521.300 |
|
|
|
|
|
|
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TOTAL
|
122165.700 |
66015.000 |
65251.900 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other
income]
|
73358.700 |
61212.700 |
37176.500 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
6959.800 |
7941.000 |
940.700 |
Provision for Taxation
|
1658.000 |
2039.500 |
340.800 |
Profit/(Loss) After Tax
|
5301.800 |
5901.500 |
599.900 |
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Export Value
|
N.A. |
20753.300 |
9887.100 |
|
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Import Value
|
N.A. |
7373.600 |
5420.300 |
|
|
|
|
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Total Expenditure
|
66398.900 |
41845.200 |
28421.300 |
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 [1st
Quarter] |
30.09.2006 [2nd
Quarter] |
31.12.2006 [3rd
Quarter] |
|
Sales Turnover |
17190.900 |
20792.500 |
21073.600 |
|
Other Income |
11.400 |
23.300 |
81.300 |
|
Total Income |
17202.300 |
20815.800 |
21154.900 |
|
Total Expenditure |
13274.800 |
15684.900 |
15860.500 |
|
Operating Profit |
3927.500 |
5130.900 |
5294.400 |
|
Interest |
1806.800 |
1368.600 |
1231.700 |
|
Gross Profit |
2120.700 |
3762.300 |
4062.700 |
|
Depreciation |
1491.900 |
1490.100 |
1489.100 |
|
Tax |
66.200 |
(59.300) |
22.300 |
|
Reported PAT |
411.300 |
1543.400 |
1795.600 |
200606 Quarter 1
The above results were reviewed by the Audit Committee in it's
meeting held on 31st July, 2006 and taken on record at the meeting
of Board of Directors held on that date, 2, The aggregate of non-promoters
share holding was 147,122,743 equity shares 25.34% as on 30th June,
2006. (130,347,417 equity shares 42.82% as on 30th June, 2005). The paid up Equity Share Capital
has increased from Rs. 580.50 millions as at 30th June 2006 to Rs.
1,139.81 millions on 10th July, 2006, pursuant to the Order of the
Honourable High Court of Gujarat dated 17th June, 2006. The earnings
per share have been calculated based on the paid up capital outstanding as on
30th June 2006. 3. The auditors qualifications on the accounts of
the Company for the year ended 31st March, 2006 have been adequately
explained in the notes to the accounts as well in the previous such statement
published under clause 41 of the listing agreement, 4. The number of investors
complaints received during the quarter, resolved and pending are Pending as at
01.04.2006 : - Received during the Quarter ; 247 Disposed off during the
Quarter: 235 Pending as at 30.06.2006 : 12 5, The figures have been regrouped l
reclassified wherever necessary. The figures for the quarter ended 30.06.06 are
not comparable with figures for the quarter ended 30.06.05 as the figures for
the current quarter is after amalgamation of Hygrade Pellets Limited and Steel
Corporation of Gujarat Limited with the Company.
200609
Quarter 2
Expenditure Includes Materials Consumed & Others Rs.
10598.100 million Energy Cost Rs.5493.800 million Staff Cost Rs. 360.400
million Other expenditure Rs 1460.300 million (Increase)/Decrease in Finished
Goods/Works in Progress Rs. (2418.400) million Tax Includes Provision for
Current Tax Rs 254.900 million Deferred Tax Rs 788.100 million Fringe Benefit
Tax Rs 11.300 million MAT credit Rs (325.500) million EPS is Basic Status of
Investor Complaints for the quarter ended 30.09.2006 Complaints Pending at the
beginning of the quarter 12 Complaints Received during the quarter 301
Complaints disposed off during the quarter 311 Complaints unresolved at the end
of the quarter 02 1. The above results were reviewed by the Audit Committee in
it's meeting held on 31.10.2006 and taken on record at the meeting of Board of
Directors held on 31.10.2006. 2. The aggregate of public share holding was
147,123,894 equity shares 12.92% as on 30.09.2006 (130,336,047 equity shares
42.82% as on 30.09.2005). 3. The Company is engaged in only one segment viz
Steel hence there are no reportable segmet as per Accounting Standard As 17. 4.
The auditors qualifications on the accounts of the Company for the year ended
31.03.2006 have been adequately explained in the notes to the accounts as well
in such statement published under clause 41 of the listing agreement for the
year ended 31.03.2006. 5. The figures have been regrouped / reclassified
wherever necessary. The figures for the quarter and half year ended 30.09.2006
are not comparable with figures for the quarter and half year ended 30.09.2005
as the figures for the current quarter are after amalgamation of Hygrade
Pellets Limited and Steel Corporation of Gujarat Limited with the Company.
200612 Quarter 3
The above results were reviewed by the Audit Committee in
its meeting held on 29.01.2007 and taken at the meeting of Board of Directors
held on that date 2. The Agreement of Public share holding was 147225151 equity
shares(12.92 %) as on 31.12.2006. (130336047 equity shares (42.82) as on
31.12.2005 3. The Company is engaged in only one segment viz Steel hence there
are no reportable segments as per AS-17 4. Other expenditure for the current
quarter includes Rs.147.300 millions towards reversal of Profit on sale of
investment recorded during the year ended 31.03.2006. The reversal is on
account of non completion of the transaction 5. The number of investors
complaints received during the quarter, resolved and pending are Pending as at
01.10.2006 2 Received during the quarter 366 Disposed off during the quarter
368 Pending as at 31.12.2006 - 6. Upon request of the principal promoters of
the Company, the Board of Directors of the Company have decided to obtain
approval of the shareholders for delisting of Equity Shares of the Company form
Bombay Stock Exchange & National Stock Exchange 7. The Comments made by the
auditors in the quarters ended 30.09.2006 pertaining to credit of Minimum
Alternative Tax (MAT) and creation of Deferred Tax Assets (DTA) are being
explained based on the Management projection of the profit for the future
period. The management is therefore of the opinion that the credit taken
therein shall be suitably dealt with through the attainment of profit in the
future period. As regards auditors comment regarding provisional set off the
'Securities Premium Account' in the accounts for the year ended 31.03.2006 it
is stated that the company has since obtained the shareholder approval for the
same and has made application to the Honorable High Court of Gujarat under
section 78 and 100 of the Companies Act for confirmation of the same. The
sanction of the Court is awaited.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
2.27 |
4.41 |
10.80 |
|
Long Term Debt-Equity Ratio |
1.93 |
3.89 |
9.76 |
|
Current Ratio |
1.43 |
1.41 |
1.35 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
0.79 |
0.95 |
0.60 |
|
Inventory |
5.66 |
8.03 |
6.31 |
|
Debtors |
13.55 |
15.11 |
11.86 |
|
Interest Cover Ratio |
2.06 |
2.75 |
1.13 |
|
Operating Profit Margin(%) |
23.80 |
29.88 |
24.79 |
|
Profit Before Interest And Tax Margin(%) |
16.76 |
23.84 |
14.77 |
|
Cash Profit Margin(%) |
13.59 |
17.32 |
11.13 |
|
Adjusted Net Profit Margin(%) |
6.55 |
11.28 |
1.11 |
|
Return On Capital Employed(%) |
12.28 |
22.70 |
8.12 |
|
Return On Net Worth(%) |
30.44 |
46.88 |
2.42 |
STOCK PRICES
|
Face Value |
Rs. 10.00/- |
|
High |
Rs. 45.80/- |
|
Low |
Rs. 44.00/- |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Promoted
by the Bombay-based Essar group controlled by the Ruias, Essar Steel initially commenced
operations of specialized construction in Jun.'76 as Essar Constructions. Its
name was changed to Essar Offshore and Explorations in May '87 and later to
Essar Gujarat in Aug.'87. It became Essar Steel in 1995.
Its
energy division was operating the largest fleet of rigs in the private sector.
In 1987-88, it diversified into sponge iron and set up a 8,80,000 tpa gas-based
plant at Hazira,
A
pelletisation project was set up at
In
1996-97, the company also commissioned its downstream complex with a plateline
capacity of 4,00,000 metric tones comprising two slitting lines, one light
gauge shear line and one heavy gauge shear line to cater to the lucrative
plates market.
The
company has become the country's first integrated steel plant to receive both
ISO 9002 and TUV certifications. During 1998-99, Essar Minerals Limited
presently Hy-Grade Pellets Limited (HGPL) has become wholly owned subsidiary of
the company.
To
enhance brand equity for "Essar 24 Carat Steel brand and to ensure long
term relationship with customers, the company plans to launch more campaigns
during the fiscal 2002. HGPL is ceased to be a subsidiary of the company
consequent to allotment of 51% of its equity capital to Stemcor Minerals.
The company has acquired the balance 51% equity stake in
Hy-Grade pellets Limited and 100% equity stake in Steel Corporation of Gujarat
Limited. Further the company proposed amalgamation of both these subsidiaries
with the Company with effect from 1st April 2005 and this is subject to
approvals.
The Company has planned to increase the capacity to 4.6 Million MTPA in next 2
years. The company has planned to increase the pellet making capacity at
The company has increased its installed capacity of Hot Briquette Iron Plant by
1400000 MT during 2004-05 and with this expansion the total installed capacity
of Hot Briquette Iron Plant has increased to 3400000 MT.
OPERATIONS
AND PERFORMANCE HIGHLIGHTS
Operations
HR Coil production for the year ended March 31, 2006 grew by 10.8% to 2.58
million tones.
The Company introduced Cold Rolled Close Annealed products (CRCA) and Extra
Deep Drawing (EDD) grade in a record time of five months after completion of
successful trials. The development and successful introduction of dual phase
steel has put the Company in the list of select few producers of this grade
internationally. This grade finds growing application in the highly demanding
automotive and auto component sectors.
Sales and Marketing
Total sales value for the year registered a growth of 8% at Rs.70585.9 millions
as against Rs.65378.1 millions in
2004-05.
Sales volumes at 2,479,802 tonnes showed an increase of 9.45% over 2,265,599
tonnes in the corresponding period of the previous year. The Company's domestic
sales volume at 1,788,120 tonnes registered an increase of 21.02% over
1,477,555 tonnes sold in the previous year. The strong domestic demand saw the
Company's sales to domestic markets grow at the cost of export volumes which
showed a reduction of 12.22% at 691,682 tonnes from a level of 788,044 tonnes
in the previous year.
The Company's focus on increasing its share in high value, speciality segments
resulted in the share of such products going up to 48% of total sales as
compared to 37% in the previous year.
The Company received letters of appreciation from major auto and white goods
manufacturers regarding the successful trial and introduction of CRCA and EDD
grades of steel.
The 'Sona' brand of products for the construction segment performed extremely
well in the year under report with sales volumes going up from 30,000 tonnes to
57,000 tonnes.
The Company's exports constitute approximately 27.89% of overall revenues and
continue to be well balanced across several markets in Europe, Middle East,
NAFTA countries, Africa,
Essar Steel was the only Indian Steel company to successfully contest anti
dumping action in the
Operations
The year under report has seen some significant developments at Essar Steel.
The Company implemented several measures to ensure long term growth, stability
and profitability and protect it from the cyclicality that is inherent in the
industry. The first and major achievement was making Essar Steel a totally
integrated steel producer from iron ore to ready-to-market products, and ensure
control at every stage in the manufacturing chain. The Company completed the
acquisition of Hy-Grade Pellets (HGPL) and Steel Corporation of Gujarat (SCGL).
The Company also commissioned the 267-km pipeline, which transports the
beneficiated iron ore slurry from Bailadilla in Chattisgarh to
The capacity expansion to 4.6 million tonnes per annum is on track and they
expect to complete this by the third quarter of this year. During the year, the
Company further strengthened its information technology platform and extended
the implementation of SAP to several other areas of operations, including
marketing, HR, logistics and distribution. This will improve the accuracy and
timeliness of decision making and contribute to better efficiencies.
The Company believes that these steps will yield considerable benefits of
costs, seamlessness in operations, assurance of adequate raw material and
infrastructure and most importantly value addition in the product range.
Finance
The year has seen some significant developments on the financial front, the
most important one being the repayment of the entire CDR debt. This, they
believe offers the Company greater leeway in operational matters and positions
the company in an advantageous position in financial markets for its future
plans.
The Company's net worth has gone up from Rs.17250 millions to Rs.40320 millions
and the Company's financial ratios have improved significantly. The Company
expects the full benefits of integration and expansion to accrue in the coming
years.
The Company's ability to exit from the Corporate Restructuring Programme (CDR)
has resulted in a reduction in the average cost of funds. The company has also
brought in additional preference shares aggregating to Rs 19576 millions which
was utilized towards acquisition of Stemcor's 51% stake in Hy-Grade Pellets
Limited (Pelletisation Plant) and 100% stake in Steel Corporation of Gujarat
Limited, (Cold Rolling Mill). Essar steel is today fully integrated with
control at every stage of manufacture. During the year, the Company raised and
utilized Term facilities/ Debentures of over Rs 10000 millions to finance the
capital expansion programme to increase the current capacity from 2.4 MPTA to
4.6 MTPA at Hazira.
Similarly, over Rs 3500 millions was raised and utilized during the year to
part finance a beneficiation plant at Bailadilla, a slurry pipe line between
Bailadila and
The company had Technical Tie-up with Thyssen Krup Consultancy to improve Hot
Strip Mill plant performance.
The company is in trade terms with :
Ř
MIDREX Corporation, U.S.A./Voest Alpine,
Ř
METCHEM Inc.
Fixed Assets:
Ř
Land
Ř
Buildings
Ř
Plant and Machinery
Ř
Furniture and Fixtures
Ř
Office Equipment
Ř
Vehicles
Ř
Ships and Vessels
Ř
Railway Sidings
Ř
and Wagons
The company is the second largest private sector steel company.
The company has technical collaboration with :
v Voest Alpine,
AS PER
WEBSITE
The Essar Group
is one of
The Group takes pride in being a high-performance multinational organization,
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
They insist on
setting and surpassing world-class benchmarks in everything they do. No wonder
they 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 their businesses are highly integrated across the
value chain and use the latest technology to stay strong and agile. They have
invested several billion dollars on exclusive state-of-the-art technology
because they 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, they have come closer by connecting customers with their
cellular phone services and talking to thousands of people through their call
centers, a countrywide chain of fuel outlets and marketing steel at the retail
level.
To create enduring value for customers and
stakeholders in core manufacturing and service businesses,
through world-class operating standards,
state-of-the-art technology and the 'positive attitude' of their people.
Management Team
Essar Group
Shri. Shashi Ruia Chairman
Shri.
Shri. Prashant Ruia Director
Shri. Anshuman
Ruia Director
Corporate Functions
Mr. Suresh Sundaram Director
- Corporate Aviation
Mr. S. V.
Venkatesan Resident
Director - Chennai
Mr. J. Mehra Resident
Director -
Mr. Harsh Shah Resident Director -
Mr. Madhu S. Vuppuluri Resident Director -
Mr. Sunil Bajaj President - Corporate Affairs
Mr. V Krishnan Head
- Corporate Communications
Mr. Y. M. Shivamurthy Head - Legal
Mr. N. S. Paramasivam Head - Forex & Treasury
Mr. Dinyar M. Jivaasha Head - Corporate Risk & Ins. Management
News Room
Essar to set up Rs 15k cr refinery in
Economic Times - August 28, 2006
Tushar Prabhune
Another big-ticket
investment is being lined up in petro-town
The capacity
expansion will be carried out in a phased manner. While the refinery at Vadinar
in
The conglomerate is
planning to commission the Vadinar refinery in the first week of October as
construction work on the Rs 160000 millions refinery has been completed, a source
said. An Essar spokesperson told ET: "They are looking at various growth
opportunities. But it is too premature to comment.
Essar has already
got a formal approval for developing the 1,000-hectare SEZ, for which it would
pump in an estimated Rs 15,0000 millions - most of which would be invested in
constructing the new refinery.
Essar Oil, the
group company executing the refinery project, has already begun the groundwork
for construction of the new refinery as well as other downstream petrochemicals
units that would be set up in the SEZ.
Executives of Essar
Oil have begun parleys with the state ports regulatory authority, asking the
latter to suggest suitable locations for putting up single buoy moorings (SBMs)
in
The company has sought
approval for two SBMs. The company is preparing a detailed project report for
the new refinery as well as the two SBMs, the source added.
Press Releases
Essar Oil signs two production
sharing contracts with
May 09, 2005
Essar Oil Limited
(EOL) signed a Production Sharing Contract with the Government of Myanmar for
exploration of oil exploration in two Blocks - one each for onshore and
offshore blocks. The contracts were signed by Mr. U.San Lwin- Managing Director
of Myanmar Oil & Gas
Essar is the first Indian private sector company to sign an agreement in this
area in Myanmar
EOL's bid for the two contiguous exploration blocks in offshore (Block A2) area
and adjoining on land area (Block L).was made after detailed examination of
geo-scientific data at MOGE office in January 2005 by the EOL team.
The blocks are ideally located between proven gas blocks and aligned along the
regional corridor of gas discoveries south of
Essar Oil is a fully integrated oil company with operations covering the entire
value chain of oil exploration to retailing of petroleum products. It is
currently setting up a 10.5 mmtpa refinery at Vadinar,
EOL is a part of the Essar Group, one of
Essar Forays Into Wind Power Signs Licence
Agreement with REpower AG,
September 15, 2006
Essar Global's
Power business today signed a Licensing Agreement with REpower Systems AG for
the design and manufacture of 1.5 MW (and 2 MW) Wind Turbines in India and
marketing in South East Asia. The two corporations have agreed to set up a
joint venture in the near future which will allow access to 3MW and 5 MW
turbines as well other future developments and wider market reach.
Commenting on the
occasion, Mr. Anshuman Ruia Director, Essar Power said, "They are happy to
be associated with Re-power for their foray into the wind energy business. They
are confident that this is the beginning of a long and mutually beneficial
relationship. The agreement comes at a time when there is a huge demand for
power in
This wind turbine
technology is widely accepted for usage
Essar proposes to
set up the manufacturing plant in a port based location which the Group hopes
to finalize soon. The initial investment required to set up the plant is in the
region of Rs. 500.000 Millions and this will be financed through internal
resources. Essar expects to start commercial production by the middle of next
year.
About Essar's power business :
Essar has been in
power generation business for the last one decade. It currently operates four power
plants with a capacity of over 1000 MW. Essar, with its proven experience of
developing power projects is well positioned to implement large sized power
projects.
About REpower :
REpower Systems AG is one
of the leading manufacturers of onshore and offshore wind turbines. The
international engineering company develops, produces and sells wind turbines
with outputs ranging from 1.5 to 5 megawatts and rotor diameters of 70 to 126
metres for almost all locations. It also provides a comprehensive service and
maintenance range. The high performance, reliable turbines are designed at the
REpower development centre in Rendsburg and produced at the sites in Husum
(North Frisia) and Trampe (
Listed on the German stock exchange since March 2002 and with around 700
employees worldwide, the Hamburg-based company relies on its experience in the
production and installation of more than 1,400 wind turbines worldwide. REpower
is represented in European markets such as
Essar Global consolidates its Shipping and
Logistic business under ESLL
August 17, 2006
Essar Global
Limited (EGL) has investment interests in the Infrastructure sector,
Telecommunication & Technology and Industrial Construction and Engineering.
The group has its offices in.
EGL announced the
restructuring of its businesses in shipping, terminalling and logistics. In
order to provide a sharper focus to its business and increase shareholder
value, the Company has formed a fully owned subsidiary, Essar Shipping and
Logistics Limited (ESLL), registered in
As per the
re-organization plan of the shipping business, ESLL will have three operating
companies under its umbrella:
Essar Shipping
Limited. (ESL) - 77% owned by ESLL, Essar Shipping is a leading sea
transportation company, with a special focus on transportation solutions for
the global energy business. A strong management team of experienced marine
professionals steers the company, maintaining intense customer focus, world
class operations, an impressive safety record and consistent financial
performance. The Company owns a modern fleet of 27 vessels, including VLCCS,
tankers and bulk carriers. The Company has long standing relationships with
major global and Indian oil companies like Shell, Exxon Mobil, Chevron BP
Aramco, Texaco, Bharat Petroleum and Indian Oil Corporation. The Company is ISO
9000:2000 and ISO 140001 certified and has been recognized as the "Safest
Indian Shipping Company" by DG Shipping,
Essar Logistics
Limited (ELL) - Fully owned subsidiary of ESLL will carry out the business of
logistics management, transshipment and port services. The Company specialises
in the handling, storage distribution and movement of cargo by sea, road and
rail.
Vadinar Oil
Terminal Limited (VOTL) - Fully owned subsidiary of ESLL will focus on ports
and terminals. VOTL has set up a 32 million tonne terminal facility in Vadinar,
The reorganization
will make ESLL a leading integrated logistics provider for steel mills, oil
refineries and thermal power generation companies across the world.
Mr. Sanjay Mehta
will assume the responsibility of CEO of Essar Shipping & Logistics
Limited. and continue as Managing Director of ESL. Mr. A.R. Ramakrishnan who is
currently Chief Operating Officer has been inducted into the Board of ESL as an
Executive Director and will be designated CEO.
About Essar Global
Essar Global Limited investments in Infrastructure portfolio comprises of
investments in :
Essar Steel Limited
: The largest integrated producer of steel in Western India, with a capacity of
4.6 million tonnes per annum, with plans to set up manufacturing facilities in
Essar Oil Limited :
A leading integrated oil major involved in Exploration & Production,
Refining and Retailing of petroleum products.
Essar Power Limited
: Power generation capacity close to 1000 MW with plans to increase capacity to
2500 MW and enter transmission and distribution
Essar Shipping and
Logistics Limited : Leading sea logistics solutions provider involved in sea
transportation, ports and terminalling activities.
Telecommunication
& Technology : Investment portfolio comprises of investments in Hutchison
Essar provides cellular services in association with Hutchison Whampoa,
Aegis
Communications is an integrated customer solutions provider in BPO and IT.
Industrial
Construction and Engineering : Investment portfolio comprises of investment in
Essar Construction - one of
Essar Steel Completes expansion to 4.6 million
tones is now the largest producer of Flat Steel in
Essar Steel
announced today that it had completed the expansion of steel manufacturing
capacity at its Hazira Complex in
The expansion makes
Essar Steel India's largest producer of flat steel in the private sector,
accounting for close to 23% of the country's flat steel capacity. The Company
also installed two more modules for HBI/DRI production, increasing total
capacity to 5.5 million tonnes per annum. This makes Essar Steel the largest,
single location producer of HBI in the world.
It also increases
the share of value added products in Essar Steel's portfolio to 75% from the
existing 45% and will contribute significantly to reduction in imports of
critical special grades of steel meant for sophisticated applications. The
Company also said that it expects a quantum jump in exports of its products and
this will consolidate its pre-eminent position as
Mr. Prashant Ruia,
Director, Essar Group said, "They are extremely pleased that this capacity
expansion will make
The expansion
entailed adding a new electric arc furnace, a third caster, RH degasser and
allied equipment. In order to meet the requirements of the expanded steel
capacity, infrastructure facilities have also been enhanced. This includes a
captive power plant of 500 MW capacity, increase in capacity of the port to 12
MTPA and allied machinery and equipment workshops.
The Company's R
& D centre has also been modernized and expanded and houses
state-of-the-art equipment and highly qualified and trained scientists and
engineers.
About Essar Steel
Essar Steel is the
largest integrated producer of steel in
About Essar
The Essar Group is
one of
Essar Global to acquire
invest USD 1.65 billion to build an integrated steel plant
April 18, 2007
Essar Global Limited, through its
wholly owned subsidiary - Essar Steel Holdings Limited, (“Essar”) and Minnesota
Steel LLC. (“
Minnesota Steel plans to set up an
integrated steel plant at an estimated cost of USD 1.65 billion. The steel
plant will have an annual capacity of 2.5 million tonnes when completed.
Construction is expected to begin
in the third quarter subject to necessary environmental and regulatory
approvals.
The steel plant will be built in
phases with the first phase expected to go on stream in 2009 and produce up to
1.5 million tonnes of thick steel slab per year.
Minnesota Governor Tim Pawlenty
hailed the closing of Minnesota Steel’s strategic partner. “This
investment is a tremendous milestone, not only for the company but also for the
State,” Governor Pawlenty said. “It moves us much closer to the goal of making
steel on the
Essar Global Chairman, Shashi Ruia
said his company is looking forward to expanding operations into
“By developing this significant
iron ore resource Minnesota Steel has the opportunity to be one of the low cost
producers of steel in the world” Mr. Ruia added.
“We are very pleased to have
Essar as our partner going forward,” said Joseph C. Bennett, chairman of
Minnesota Steel. “Essar bring remarkable experience and expertise in Direct
Reduced Iron (DRI)/Electric Arc Furnace (EAF) steelmaking.
“Essar has a track record of
building projects of this scale in
John Elmore, president and CEO of Minnesota
Steel, highlighted Essar’s commitment to the communities in which it operates.
“They have shown in their operations around the world that it’s very important
to them to work with the local community and with local individuals, which fits
well with our philosophy,” Mr. Elmore said. “They are a strong partner for us
and for the state.”
Essar has recently executed an
agreement to acquire
NOTES TO EDITORS:
About
Minnesota Steel is planning to develop, finance and construct a new steel
production facility located on the Mesabi iron range in northeast
In addition to the 2,000
construction jobs, Minnesota Steel will create up to 700 full-time jobs and
generate 2,100 spin-off jobs.
Earlier this month, the 45-day
public comment period on the project’s draft environmental impact statement
ended. Once the environmental impact statement is found to have addressed all
potential impacts, Federal and State environmental officials can issue permits
which are anticipated this summer. Construction will begin thereafter.
In December, the State of
In November, Minnesota Steel
secured capacity to transport low-cost natural gas from
About Essar
Essar Global is an international conglomerate operating in six business areas –
steel, oil & gas, power, communications, shipping & logistics and
construction. It has offices world-wide and employs approximately 20,000
people, including over 3500 persons in the
Essar Steel Holdings Limited is an
emerging global steel company. It is a fully integrated manufacturer and one of
the lowest cost producers of steel globally. Essar Steel Holdings Limited,
along with its subsidiaries, operates an integrated steel plant of 4.6 million
tones per annum (tpa) in India, which is expected to be increased to an 8.5
million tpa steel complex for flat products by 2009. The complex also comprises
a cold rolling plant, down stream facilities and a 5 meter wide plate mill. It
is
Essar Steel Holdings Limited also
operates a cold rolling complex in
For Further Information
Essar
Group
William Clutterbuck
Phone: +44 207 379 5151
Email: wclutterbuck@maitland.co.uk
Manish
Kedia
Senior Vice President
Phone: +91 98197 30092
Email: mkedia@essar.com
B
Ganesh Pai
General Manager
Phone: +91 98197 30225
Email: gpai@essar.com
John Elmore
president and CEO,
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.40.60 |
|
|
1 |
Rs.80.62 |
|
Euro |
1 |
Rs.54.55 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
|
45 |
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 |
|