MIRA
INFORM REPORT
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Report Date : |
10.10.2007 |
IDENTIFICATION DETAILS
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Name : |
ELECTROSTEEL CASTINGS LIMITED |
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Registered Office : |
Rathod Colony, Rajgangpur – 770 017, Dist. Sundergarh, Orissa |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
26.11.1955 |
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Com. Reg. No.: |
15-310 |
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CIN No.: [Company
Identification No.] |
L273100R1955PLC000310 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALE01429B CALE01711D |
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PAN No.: [Permanent
Account No.] |
AAACE4975B |
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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 : |
Manufacturing of pig iron, steel castings, grinding media, steel ingots / billets, cast-iron spun pipes, cast-iron specials, cast-iron castings and ductile iron spun pipes. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 32466112 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having fine track records. Available information indicates high financial responsibility of the company. Financial position of the company is good. Payments are usually correct and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a long-run. |
LOCATIONS
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Registered Office : |
Rathod Colony, Rajgangpur – 770 017, Dist. Sundergarh, |
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Tel. No.: |
91-6624-2207008 / 9 / 2287047 |
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Fax No.: |
91-6624-22481803 |
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E-Mail : |
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Website : |
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Administrative
Office / Head Office : |
40 Stephen House 4 B. B. D. Bag (East), Kolkata-700001, |
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Factory 1 : |
30, |
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Tel. No.: |
91-33-25531892/2987/2991 |
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Fax No.: |
91-33-25531893/0588 |
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E-Mail : |
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Factory 2 : |
Gummodipoondi Taluk, P. O. Elavur, MGR, Dist. Chengal – 601
211, Tamilnadu |
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Factory 3 : |
Haldia, Kasberia, P.O. Khanjan Chawk, Haldia, Midnapore (East), |
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Overseas office : |
Electrosteel Europe S.A., Sucursal En Espana Edificio Forum La Rotonda,
Ctra. Sant Cugat a Rubi, kmtr. 1n40, Piso 2 Departmento 6, Sant Cugat
delValles 08190, |
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Tel. No.: |
34 93 583 05 22 |
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Fax No.: |
34 93 589 70 93 |
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E-Mail : |
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Corporate Office : |
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Tel No.: |
91-33-22839990 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. P. K. Khaitan |
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Designation : |
Chairman |
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Name : |
Mr. Umang Kejriwal |
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Designation : |
Managing Director |
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Name : |
Mr. Mayank Kejriwal |
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Designation : |
Joint Managing Director |
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Name : |
Mr. B. Khaitan |
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Designation : |
Director |
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Name : |
Mr. Naresh Chnadra |
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Designation : |
Director |
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Name : |
Mr. Jamshed J. Irani |
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Designation : |
Director |
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Name : |
Mr. N. C. Bahl |
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Designation : |
Wholetime Directors |
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Name : |
Mr. V. K. Lamba |
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Designation : |
Director |
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Name : |
Mr. Uddhav Kejriwal |
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Designation : |
Director |
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Name : |
Mr. S. Y. Rajagopalan |
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Designation : |
Director & Secretary |
KEY EXECUTIVES
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Name |
Mr. N. C. Bahl |
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Designation |
Director |
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Age |
65 years |
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Qualification |
B.Sc. (Engg.) (Mech.) |
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Experience |
43 years |
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Date of Joining |
04.10.1983 |
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Previous Employment |
Executive Director – Bhartia Electric & Steel Company Limited (Ballygunge Works) |
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Name |
Mr. M. Kejriwal |
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Designation |
Joint Managing Director |
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Age |
50 years |
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Qualification |
B.Com. (Hons.) |
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Experience |
32 years |
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Date of Joining |
25.01.1977 |
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Previous Employment |
Executive Director – Electrocast Sales India Limited |
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Name |
Mr. Umang Kejriwal |
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Designation |
Managing Director |
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Age |
52 years |
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Qualification |
B.Com.(Hons.) |
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Experience |
33 years |
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Date of Joining |
16.02.1975 |
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Previous Employment |
Executive Director – Electrocast Sales India Limited |
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Name : |
Mr. Sanjeev Churiwal |
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Designation : |
CFO and Company Secretary |
SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding of Promoter and Promoter Group 2 |
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(1) Indian |
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(a) Individuals / Hindu undivided family |
3729713 |
18.258 |
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(b)Bodies Corporate |
7685388 |
37.6242 |
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(B) Public Shareholding 3 |
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(1) Institutions |
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(a) Mutual Funds / UTI |
1628571 |
7.9727 |
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(b) Financial Institutions / Banks |
64057 |
0.3135 |
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© Insurance Companies |
2499543 |
12.236 |
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(d) Foreign Institutional |
700815 |
3.4309 |
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(2) Non – Institutions |
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(a) Bodies Corporate |
1023309 |
5.0097 |
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(b) Individuals – i. Individual shareholders holding nominal share capital up to
Rs.0.100 million ii. Individual shareholders holding nominal share capital excess of
Rs.0.100 million |
2872622 187561 |
14.063 0.9182 |
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© Any Other (specify) NR Individual / OBC |
35169 |
0.1722 |
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© Shares held by custodians and against which depository receipts have
been issued |
337000 |
1.6230 |
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Grand Total |
20763748 |
100 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Mr. Ganshyam Kejriwal |
68750 |
0.3312 |
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Mr. Ganshyam Kejriwal HUF |
1178203 |
5.6744 |
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Mr. Umang Kejriwal |
501224 |
2.4139 |
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Mr. Umang Kejriwal HUF |
126660 |
0.61 |
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Mr. Mayank Kejriwal |
390815 |
1.8822 |
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Mr. Mayank Kejriwal HUF |
102294 |
0.4927 |
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Mr. Uddhav Kejriwal |
312160 |
1.5034 |
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Mr. Uddhav Kejriwal HUF |
121210 |
0.5838 |
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Mrs. Asha Kejriwal |
250096 |
1.2045 |
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Mr. Madhav Kejriwal |
199340 |
0.9600 |
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Mrs. Aarti Kejriwal |
174180 |
0.8389 |
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Mr. Uma Kejriwal |
61800 |
0.2976 |
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Mr. Nityangi Kejriwal |
59780 |
0.2879 |
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Ms. Radha Kinkari Kejriwal |
55200 |
0.2658 |
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Mr. Shashwar Kejriwal |
53901 |
0.2596 |
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Mrs. Pallavi Kejriwal |
12800 |
0.0616 |
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Ms. Samriddhi Kejriwal |
11300 |
0.0544 |
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Ms. Priya Sakhi Kejriwal |
50000 |
0.24 |
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Bodies Corporate |
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Murari Investment and Trading Company Limited |
2830308 |
13.6311 |
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G K Investments Limited |
2016206 |
9.7103 |
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Uttam Commercial Company Limited |
1759057 |
8.4718 |
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Electrocast Sales India Limited |
572131 |
2.76 |
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Malay Commercial Enterprises Limited |
344819 |
1.66 |
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G K and Sons Private Limited |
162855 |
0.78 |
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12 |
0.0001 |
SHAREHOLDERS OF PERSONS BELONGING TO THE CATEGORY PUBLIC
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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MUTUAL Funds |
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1. Prudential ICICI Trust Limited – Prudential ICICI Infrastructure Fund |
1053532 |
5.0739 |
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2. DSP Merrill Lynch Trustee Company Private Limited A/C DSP Merrill Small and MIDCAP Fund |
365100 |
1.7584 |
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Insurance Companies |
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1. General Insurance Corporation of |
895310 |
4.3119 |
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2. United India Insurance Company Limited |
751728 |
3.6204 |
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3. Life Insurance Corporation of |
396283 |
1.9085 |
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4. The New India Assurance Company Limited |
235628 |
1.1348 |
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Foreign institutional investors |
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1. HSBC Global Investment Funds Bric Freestyle |
538631 |
2.5941 |
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BUSINESS DETAILS
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Line of Business : |
Manufacturing of pig iron, steel castings, grinding media, steel ingots / billets, cast-iron spun pipes, cast-iron specials, cast-iron castings and ductile iron spun pipes. |
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Products : |
Item Code No. (ITC Code) Product
Description 7303.00 C. I. Pipes 7303.00 D. 7201.00 Pig Iron |
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Exports : |
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Countries : |
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PRODUCTION STATUS
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Particulars |
Unit |
Installed Capacity |
Actual Production |
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C.I. Spun Pipes |
Tonnes |
165600 |
55104 |
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D.I. Spun Pipes |
Tonnes |
250000 |
181161 |
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Tonnes |
5000 |
2346 |
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Pig Iron |
Tonnes |
235000 |
158947 |
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Metallurgical Coke |
Tonnes |
150000 |
129272 |
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Sponge Iron |
Tonnes |
60000 |
11657 |
GENERAL INFORMATION
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No. of Employees : |
1674 |
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Bankers : |
Ř Punjab National Bank, Rajgangpur, Orissa Ř Standard Chartered Grindlays Bank Limited, Rajgangpur, Orissa Ř BNP Paribas, Rajgangpur, Orissa Ř ICICI Bank Limited Ř IDBI Bank Limited Ř HDFC Bank Limited |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Lodha & Company Chartered Accountants |
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Address : |
14, |
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Tel. No.: |
91-33-22481507 / 7102 / 6962 / 1111 |
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Fax No.: |
91-33-22486960 / 4572 |
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E-Mail : |
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Subsidiaries : |
Ř
Electrosteel
Europe SA Ř
Electrosteel
Ř
Singardo
International Pte Limited Ř
Ř
Elcast
Finance Limited Ř Escal Finance Services Limited. |
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Associates : |
Lanco
Industries Limited |
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Joint Venture : |
Domco
Private Limited |
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˛
Global
Exports Limited ˛
Badrinath
Industries Limited ˛
Akshay
Ispat and Ferro Alloys Private Limited ˛
Acharya
Multicon Private Limited ˛
Flora
Construction Private Limited ˛
Highrise
Multicon Private Limited ˛
Kabir
Projects Private Limited ˛
New
City Enclave Private Limited ˛
Nilmoni
Developers Private Limited ˛
Tulsi
Highrise Private Limited ˛
Royal
Multicon Private Limited ˛
Tulip
Fabicon Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
5,00,00,000 |
Equity Shares |
Rs.10/- each |
Rs.500.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2,07,63,748 |
Equity Shares [Out of the above 88,76,160 Shares have been allotted as fully paid up
bonus shares by capitalisation of Share Premium and General Reserve.] |
Rs.10/- each |
Rs.207.637
Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE SHEET
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SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS
FUNDS |
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1] Share Capital |
207.637 |
207.637 |
161.923 |
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3] Reserves &
Surplus |
7908.891 |
7399.129 |
5255.924 |
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NETWORTH
|
8116.528 |
7606.766 |
5417.847 |
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LOAN FUNDS |
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1] Secured Loans |
2480.903 |
2886.516 |
3355.401 |
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2] Unsecured
Loans |
4134.334 |
969.613 |
1061.790 |
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TOTAL BORROWING
|
6615.237 |
3856.129 |
4417.191 |
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DEFERRED TAX
LIABILITIES |
326.247 |
251.202 |
247.882 |
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TOTAL
|
15058.012 |
11714.097 |
10082.920 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
3389.124 |
3169.803 |
2169.040 |
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Capital work-in-progress
|
582.061 |
370.327 |
541.067 |
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INVESTMENT
|
1610.144 |
2322.726 |
1955.746 |
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DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS &
ADVANCES
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Inventories
|
2567.187
|
2176.774
|
2408.557
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Sundry Debtors
|
4978.599
|
4194.654
|
3967.227
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Cash & Bank Balances
|
3012.186
|
107.531
|
171.983
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Loans & Advances
|
1113.064
|
1262.425
|
543.997
|
Total Current Assets
|
11671.036
|
7741.384
|
7091.764
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Less :
CURRENT LIABILITIES & PROVISIONS
|
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Current Liabilities
|
1954.091
|
1546.418
|
1414.178
|
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Provisions
|
240.262
|
343.725
|
260.519
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Total Current Liabilities
|
2194.353
|
1890.143
|
1674.697
|
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Net Current Assets
|
9476.683
|
5851.241
|
5417.067
|
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
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TOTAL
|
15058.012 |
11714.097 |
10082.920 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
11232.021 |
9556.900 |
8903.668 |
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Increase
in Finished and Process Stocks |
(164.583) |
416.028 |
[41.001] |
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Other Income |
611.473 |
460.019 |
460.666 |
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Total Income |
11678.911 |
10432.947 |
9323.333 |
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Profit/(Loss) Before Tax |
1584.203 |
1078.772 |
1246.782 |
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Provision for Taxation |
522.605 |
314.294 |
360.008 |
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Profit/(Loss) After Tax |
1061.598 |
764.478 |
886.774 |
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Earnings in Foreign Currency : |
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Export Earnings |
4036.289 |
3056.791 |
1715.864 |
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Total Earnings |
4036.289 |
3056.791 |
1715.864 |
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Imports : |
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Raw Materials |
1796.319 |
1688.115 |
2829.893 |
|
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Stores & Spares |
159.604 |
102.304 |
79.085 |
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Capital Goods |
92.089 |
106.477 |
34.908 |
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Total Imports |
2048.012 |
1896.896 |
2943.886 |
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Expenditures : |
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|
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|
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|
Purchase |
864.917 |
1400.484 |
882.890 |
|
|
Raw Material Consumed |
4410.282 |
4082.673 |
3894.622 |
|
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Manufacturing Expenses |
4276.969 |
3328.667 |
2837.197 |
|
|
Interest |
205.862 |
256.733 |
210.040 |
|
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Depreciation & Amortization |
336.678 |
285.618 |
251.802 |
|
Total Expenditure |
10094.708 |
9354.175 |
8076.551 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2007 (1st
Quarter] |
|
Type |
|
|
|
|
Sales
Turnover |
|
|
2956.300 |
|
Other
Income |
|
|
252.000 |
|
Total
Income |
|
|
3208.300 |
|
Total
Expenditure |
|
|
2765.000 |
|
Operating
Profit |
|
|
443.300 |
|
Interest |
|
|
(57..900) |
|
Gross
Profit |
|
|
501.200 |
|
Depreciation |
|
|
84.000 |
|
Tax |
|
|
119.200 |
|
Reported
PAT |
|
|
298.100 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.67 |
0.64 |
0.78 |
|
Long Term Debt-Equity Ratio |
0.52 |
0.40 |
0.49 |
|
Current Ratio |
2.66 |
2.07 |
1.76 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
2.32 |
2.38 |
2.85 |
|
Inventory |
4.64 |
4.27 |
4.47 |
|
Debtors |
2.56 |
2.46 |
2.80 |
|
Interest Cover Ratio |
8.69 |
4.12 |
5.85 |
|
Operating Profit Margin(%) |
18.08 |
15.04 |
15.71 |
|
Profit Before Interest And Tax Margin(%) |
15.22 |
12.19 |
13.04 |
|
Cash Profit Margin(%) |
11.89 |
9.37 |
10.39 |
|
Adjusted Net Profit Margin(%) |
9.03 |
6.52 |
7.71 |
|
Return On Capital Employed(%) |
13.67 |
11.48 |
13.56 |
|
Return On Net Worth(%) |
13.50 |
10.05 |
14.28 |
LOCAL AGENCY FURTHER INFORMATION
History :
Incorporated in 1955 as Dalmia Iron and Steel, Electrosteel Castings
(ECL) was promoted by Orissa Cement, Dalmia Cement (Bharat) and G Kejriwal to
manufacture grinding media, steel castings and cast iron (CI) spun pipes in
Khardah,
ECL manufactures cast-iron pipes, ductile iron pipes and steel ingots and
billets, and grinding media at its three facilities in Khardah, West Bengal;
Elavur in Tamil Nadu; and Ghaziabad. Further the company's business offering
includes manufacturing, supplying, laying, operating and transferring complete
DI Pipe projects. As a result of this the company also provides techno-economic
solutions for water transportation and sewerage management.
The subsidiaries of the company are Chesterfield Ductile Limited, Singardo
International Pte Limited, Electrosteel Europe, ECL Algeria SPA, Elcast Finance
Limited and Escal Finance Service Limited
The company has received the ISO 14001 and ISO 9001:2000 certification during
2003 as a testimony to its sound environment management practices.
In the CI segment the company is the dominant player and in this segment, it
has an edge over its competitors as it offers a wider range in terms of size.
Another significant feature which give ECL a competitive edge is its backward
integration. The company has its own mini-blast furnace to produce pig iron,
the main raw material for DI pipes. This results in power saving as the molten
pig iron is directly transferred to its DI unit. In addition to this, it has
also set up a 3 MW captive power plant.
It is relocating the ductile iron plant from Tamil Nadu to
The company has approved the scheme of amalgamation of Calcutta Steel Company
Limited (CSCL) with the company. One equity share of the company will be
allotted for every 25 equity shares of CSCL held.
The company has set up a captive coke oven plant at Haldia and this has been
commissioned on
During 2004-05 the company has entered in Engineering Procurement &
Construction Contracts through its infrastructure services division.
Fixed
Assets
ł Land-freehold
ł Land-leasehold
ł Buildings
ł Railway Siding
ł Plant and
Machinery
ł Furniture and
Fixtures
ł Vehicles
ł Livestock
It is in trade
terms with:
ł
K. Engineering Works
ł
Abhaya Precision Industries Private Limited
ł
Aryan Engineering
ł
P. Traders & Engineers
ł
K. Engineering Works
ł
Ganesh Engineering Works
ł
Industrial Refractories Private Limited
ł
Laxmi Enterprise
ł
Ma-Bishalakshmi Engineering Concern
ł
S & H Manufacturing & Trading Private
Limited
Subject has been accredited with ISO 9002 Certification.
Directors Reports:
Current Year's Operation:
During the year
the Company achieved sales of Rs.11762.100 millions representing an increase of
17% over the previous year including export of Rs.4470.500 millions. an
increase of 34% over the previous year. The Company's profit (PBT) for the year
was Rs.1584.200 millions, representing an increase of 47% over the previous
year.
During the year DI Pipes production was 230109 MT as against 181161MT in the
preceding year, registering an increase of 27% which was mainly due to capacity
expansion during the previous year. Production of DI Fittings was also
significantly higher by 47% over the previous year (from 2346 MT to 3453 MT) to
meet the demand.
The production of CI Pipes at Elavur was 41988 MT as against 55104 MT in the
previous year. The decline was mainly due to more demand of DI Pipes due to its
superiority over CI Pipes.
The Company's
export of DI Pipes has increased to 116943 MT as compared to 76736 MT in the
preceding year, showing an increase of 52%.
The Company has
successfully commissioned Pulverized Coal Injection System in Blast Furnace and
Stamp Charging System in Coke Oven Plant during the year, which has enhanced
operational efficiency.
In March, 2006 the Company had commissioned a 12 MW Power Plant at Haldia
making use of Waste Gas of Coke Oven and Sponge Iron Plant. The plant has been
fully stabilized and has operated for the full year successfully.
The Company had received allocation of Parbatpur Coal Block in Jharia Coal
Field for mining of coal for captive consumption. Other infrastructure
developmental works are in progress.
During the year, the Company has successfully raised USD 75 Million through
issue of Zero Coupon Convertible Bonds to finance its Capital expenditure
requirements. The Company has utilised so far Rs.649.416 millions out of the
money so raised for the purpose for which it was raised.
Future Prospects:
In view of the
thrust given by Government of India to create infrastructure for effective
management of water resources and sewerage, the demand for DI Pipe is expected
to grow by 15% per annum. The Company is expected to start coal production and
commissioning of sinterplant during the coming year.
With the various
initiatives taken by the Company on various fronts - be it raw material, cost
controls, production, backward integration, marketing - domestic as well as
export, IT infrastructure, the Company is confident of achieving new heights
during the coming year.
OVERVIEW
The Company is engaged in the business of manufacturing Ductile Iron Spun
Pipes, Ductile Iron Fittings and Cast Iron Spun Pipes. Besides, the Company
also offers turnkey solutions for water transportation and sewerage management,
which includes manufacturing, supplying, laying, operating and transferring of
complete DI Pipe projects.
In
Over the past few
years, the government is also turning its focus on creation of urban and rural
infrastructure (including water resources and sewerage management), and has
increased budgetary allocation for the same.
In these efforts,
international development finance institutions such as the World Bank and the
Asian Development Bank are extending monetary support to the Government. This
has generated a strong demand for DI pipes that are increasingly being used for
water and sewerage transportation.
It is estimated
that some 200m Indians do not have access to safe and clean drinking water. The
Accelerated Rural Water Supply Programme (ARWSP) and the Pradhan Mantri
Gramodaya Yojana - Rural Drinking Water (PMGY-RDW) are aimed at increasing the
supply of safe drinking water. PMGYRDW is currently being implemented through
the Rajiv Gandhi National Drinking Water Mission (RGNDWM).
Also,
Ductile Iron
Pipes are stronger, easier to, require less support and provide greater flow
area as compared to pipes made from other materials.
Also in difficult terrain
these can be a better choice than PVC, concrete, polythylene or steel pipes.
This edge enjoyed by DI Pipes has led to increased uses of such pipes and
gradually substituting other conventional pipes. Based on past records, the
demand for DI pipes is expected to grow by 15% per annum, and the demand for CI
pipes is expected to decline.
2005-06 vs. 2006-07:
During the year
the Company has excelled in every sphere and has set new records in its
financial performance in terms of sales, export and profit.
The Company's
sales has increased from Rs.10031.300 millions in 2005-06 to Rs.11762.100
millions in 2006-07 representing an increase of 17%. Export sales grew from
Rs.3345.600 millions to Rs. 4470.500 millions. an increase of 34%. The
Company's profit (PBT) has also increased from Rs. 1078.700 millions in 2005-06
to Rs.1584.200 millions in 2006-07, representing an increase of 47%.
Income Source:
During the year,
76% of the Company's income was derived from Ductile Iron
Pipes including DI
Fittings and turnkey (73% in 2005-06) and 110% from Cast Iron Pipes including
Fittings (15% in 2005-06).
Ductile Iron Pipes:
The production of
DI Pipes increased significantly during the year from 181161 MT to 230109 MT,
registering a growth of 27%.
Year DI Pipe Production
004-05 178174 MT2005-06 181161 MT2006-07 230109 MT
With the new
initiatives planned, like commissioning of sinter plant, it is expected that
the production will further improve during the next year.
Cast Iron Pipes:
In line with the
demand shift from Cast Iron Pipes to Ductile Iron Pipes due to its superiority
over other pipes, Electrosteel has also continued its focus on DI Pipes.
However, to meet the demand of CI Pipes, particularly in lower sizes, the
Company has produced 41988 MT at its Elavur Works against 55104 MT in the
previous year.
DI Fittings &
Accessories:
Production of DI Fittings during the year was 3453 MT against 2346 MT during
the previous year, registering an increase of 47% over the previous year.
Power Plant:
In addition to the
existing 3.75 MW Power plant at Khardah Works, the Company commissioned towards
end of last year a 12 MW Power Plant at Haldia, which generates power using
waste Gas of Coke Oven Plant and Sponge Iron Plant. Benefit from the first full
year's operation is reflected in the generation of 59.7 million units and
supply of 47.5 million units to the SEB Grid.
Haldia's 12 MW Waste Heat based Power Plant has been developed as a Clean
Development Mechanism (CDM) Project. In this project the sensible heat in the
waste gas emissions from our Coke Oven Plant and Sponge Iron Plant is utilised
for generating 12 MW power. Since waste gases are used instead of burning
fossil fuels for power making, this project will reduce appx.
78,000 MT of
Carbon Dioxide emissions to atmosphere every year, thus helping in abating
climate changes.
After going through the vigorous processes of preparing the PDD (Project Design
Document), holding stakeholders' consultation meeting, obtaining host country
approval from MOEF and carrying out validation through DNV, on 15th Dec.'06 the
project was registered with UNFCCC (United Nations Framework Convention for
Climate Change) under Kyoto Protocol.
Presently preparations are underway for verification of the project including
certification for 1st year's emission reduction (by TUV SUD) which is expected
to be completed shortly.
Captive Coke Oven Plant:
During the year
the Company successfully implemented Stamp Charging system at its Coke Oven
Plant for producing quality Metallurgical Coke at lower cost. 88,304 MT of
Metallurgical Coke was produced for captive consumption in Blast Furnace at
Khardah Works against 112669 MT last year. Production was lower in 2006-07
mainly due to shutdown of one
Export:
Due to the superior quality of its Ductile Iron Pipes and Fittings, the Company
was able to market them in many countries of Asia, Middle East, Europe and
In view of the
above initiatives, the Company expects further growth in the export
performance.
Turnkey Projects:
The Company is
engaged in the activities of Engineering, Procurement & Construction
Contracts for Integrated Water Supply Schemes and Municipal Pipeline Contracts.
These Contracts, apart from comprising of other civil engineering and
electro-mechanical instrumentation works, also involve substantial quantities
of DI pipes and fittings. Scope of work in some of the large Contracts includes
the total Engineering and Operation & Maintenance works also, thereby
providing a substantial leverage for future similar business. This Division is
also helping in bringing it closest to the beneficiary of Water and in
increasing the sensibility & understanding of the Water market. Major
Contracts presently under execution are in the states of Rajasthan, J&K,
Raw Material Management:
To offset the rise
in cost of iron ore, which is a major input in the manufacturing process, the
Company is installing a Sinter Plant at its Khardah Works. This sinter plant
shall use iron ore fines instead of the costly lump iron ore, and help to
contain raw material costs. The commissioning of the Sinter Plant is expected
by Decemeber'07.
The Company had received allocation of Parbatpur Coal Block in Jharia
Coal Field for mining of coal for captive consumption. Other infrastructure
developmental works are in progress. This captive source will ensure that the
Company gets coking coal at lower costs and avoids impact of demand-supply
volatility in the market. The benefits of the coal mines shall accrue from
2008-09 onwards.
The Company has
been allotted an Iron Ore mine in Kodolibad, Jharkhand. The infrastructure
facilities are being developed. This backward integration measure will reduce
Company's operating cost and ensure a steady supply of ore.
Quality:
Quality as always has been of prime focus to ensure the brand image and
ultimately improving the market share. The Company continues to take new
initiatives to further strengthen its quality control and quality assurance
system. Some of the steps taken during the year are as below:
a) TPM and the Kaizan Culture has gained further ground and motivated
personnel are enthused to take new initiatives resulting in improved
performance of all its resources with the goal of lower cost, better
productivity and world class Quality.
b) Documents, training and equipment standardisation has been completed
for NABL (National Accreditation Bureau of Laboratories) Certification and the
application will be submitted soon.
c) A new Optical Emission Spectrometer (OES) has been added to further
strengthen the capabilities for taking new challenges of increased production
and variety.
d) Data analysis through SPC & SQC modes have been adopted which have
resulted in enhancing product quality beyond specified standard.
e) Different international agencies like DVGW -
f) Collaborative work on studies of effectiveness of coating in corrosion
prevention is continuing with
g) BSI (UK) has recognised our excellent Type Testing facility and has
used it for carrying out the Performance Tests on the Ductile Iron Pipes of
other manufacturer for approval of Kitemark License to them.
Safety, Health &
Environment:
The Company is committed to the safety and health of its employees. The Safety
Management Systems are constantly being improved and upgraded.
Mechanisms for
monitoring activities related to health, hygiene and safety have been set up at
every plant. The Company conducts regular educative programmes and training to
create awareness among employees. Some of the steps taken on this account are
as under:
a) Electrosteel is effectively maintaining the Environmental Management
System Standard ISO: 14001-2004 in both the Manufacturing Plants (Khardah and
Elavur).
b) JIPM - TPM methodology of KYT (Danger Prediction caused by human error
in various activity areas) have been introduced to further improve the
consciousness of workmen and supervisors.
c) All Senior Managers are participating in 'Planned Visit' of the plants
to enforce 'Safe Operating Practices'.
d) As a preparation of OHSAS-18001 awareness and auditors' courses were
conducted by CII and two lead auditors were trained by BSI.
e) Ground water consumption for industrial purpose has further been
reduced by increasing recycling of treated waste water to 92%.
f) Vehicular emission testing machine has been installed at Khardah Works
to ensure emission compliance by all incoming heavy vehicles.
g) Electrosteel have sponsored various social activities for spreading
awareness of environment issues in the neighbourhood. Staffs from various
Polytechnics along with the Faculty of National Institute of i Technology
Teachers' Training & Research were provided in-plant training on
Environment and Safety Measures.
Corporate Social Responsibility:
The Company regards social, economic and environmental responsibilities as
integral parts of the business. As part of its policy for corporate social
responsibility, the Company undertakes a range of activities to improve living
conditions of people in the neighbourhood of all its plants. These activities
include education, healthcare, sports, cultural, vocational training such
as:
a) Development, repair, renovation and extension of classrooms of local
Institutes.
b) Meet the growing demand of clubs for financial assistance to pursue
their sports activities.
c) Healthcare of local inhabitants through charitable dispensary and
donation for treatment.
d) Organize sports activities involving local schools and clubs at
District level with an aim to promote sports activities in the District.
e) Giving opportunity to local un-employed youth to develop
entrepreneurship by local supply and through small contracts.
f) Organising Cultural Programmes.
g) Rewards for good & bright students.
|
1955 |
: |
Electrosteel Castings Limited was
incorporated. |
|
1959 |
: |
The company’s first cast iron pipe factory was commissioned at Khardah,
near Kolkata. |
|
1982 |
: |
Electrosteel acquired another cast iron pipe manufacturing unit at
Elavur, near Chennai, to further augment its pipe production. |
|
1994 |
: |
Electrosteel set up a 60,000 tpa Dl spun pipe plant at Khardah, the first
ever in |
|
1995 |
: |
Electrosteel was accredited with ISO-9002 certification from Indian
Register Quality System, an accredited body of Raad Voor de Certificate of |
|
1996 |
: |
The company obtained Kitemark licence from British Standard Institute
(BSI) for its Dl pipes as per ISO 2531, BS EN 545, BS EN 598. It commissioned
its own mini-blast furnace with matching capacity for better quality control. |
|
1999 |
: |
Electrosteel received the ISO-9002 accreditation from BSI for Dl pipes
and fittings. |
|
2000 |
: |
The company increased its capacity to
120,000 tpa for Dl pipes. |
|
2000 |
: |
Electrosteel obtained Kitemark license from |
|
2001 |
: |
The company scaled its Dl pipe capacity from 120,000 tpa to 150,000
tpa. |
|
2003 |
: |
Electrosteel received the ISO-14001 and ISO9001-2000 certification as
a testimony to its sound environment management practices. |
|
2003 |
: |
Electrosteel received BSI Kitemark license for Dl Fittings at Khardah
works, |
|
2003 |
: |
Electrosteel increased its Dl pipe
manufacturing capacity from 150,000 tpa to 200,000 tpa |
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 records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist organization
or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. |
|
|
1 |
Rs. |
|
Euro |
1 |
Rs. |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
NO |
|
TOTAL |
|
72 |
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 |
|