MIRA
INFORM REPORT
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Report Date : |
30.01.2008 |
IDENTIFICATION
DETAILS
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Name : |
ABB LIMITED |
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Registered Office : |
Khanija Bhavan, 2nd Floor, East Wing, 49, Race Course Road, Bangalore – 560 001, Karnataka, India. |
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Country : |
India |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
24.12.1949 |
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Com. Reg. No.: |
08-32923 |
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CIN No.: [Company
Identification No.] |
L32202KA1949PLC032923 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMA19181B |
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PAN No.: [Permanent
Account No.] |
AAACA3834B |
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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 switchgears, pollution and environment control equipments and motors/alternators/generators. It is also into manufacture of electrical items such as motors, transformers, etc. |
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 47834 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company of Brown Boveri Group. Available information indicates high financial responsibility of the company. Financial position of the company is good. Payments are always correct and as per commitments. The company’s can be considered good for business dealings against usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
Khanija Bhavan, 2nd Floor, East Wing, 49, Race Course Road, Bangalore – 560 001, Karnataka, India. |
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Tel. No.: |
91-80-22949150/54 |
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Mobile No.: |
91-80-22949148 |
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Fax No.: |
b.gururaj@in.abb.com |
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E-Mail : |
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Corporate Office: |
Plot No. Street No. 17, Nashik – 422 007, Maharashtra, India |
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Factory: |
v Nos. 5 & 6, Peenya Industrial Estate, Phase II, Bangalore - 560 058, Karnataka, India v P. O. & Village Jalkhura, Budge Trunk Road, Maheshtala, District South 24 Paraganas - 743 352, West Bengal, India v Plot No. 22A, Shah Industrial Estate, Off Veera Desai Road, Andheri (West), Mumbai - 400 053, Maharashtra, India v Plot No. 79, Street No. 17, MIDC Industrial Estate, Satpur, Nashik - 422 007, Maharashtra, India v Maneja, Vadodara - 390 013, Gujarat, India v 32, Industrial Area, Faridabad - 121 001, Haryana, India v Village Numbal, 110, Poonamalle High Road, Chennai - 600 077, Tamil Nadu, India |
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Marketing and Service Centre: |
Located at : Chandigarh, Delhi, Jaipur, Udaipur, Vadodara, Mumbai, Pune, Bangalore, Coimbatore, Kochi, Lucknow, Kanpur, Bhopal, Nagpur, Hyderabad, Chennai, Visakhapatnam, Bhubaneshwar, Kolkata and Jamshedpur. |
DIRECTORS
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Name : |
Mr. Dinesh Paliwal |
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Designation : |
Chairman |
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Name : |
Mr. Ravi Uppal |
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Designation : |
Vice Chairman and
Managing Director |
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Age : |
49 years |
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Qualification : |
B.Tech
(Electrical & Electronics), M.B.A. |
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Experience : |
27 years |
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Date of Appointment : |
01.10.2001 |
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Previous Employment: |
Volvo India Private
Limited – Managing Director |
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Name : |
Biplab Majumder |
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Designation : |
Executive Director (w.e.f. 24/01/2006) |
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Name : |
Mr. N. S. Raghavan |
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Designation : |
Director |
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Name : |
D E Udwadia |
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Designation : |
Director (w.e.f. 21/07/2005) |
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Name : |
K Sridhar |
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Designation : |
Director (w.e.f. 21/07/2005) |
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Name : |
Mr. Nasser Munjee |
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Designation : |
Director |
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Name : |
Mr. Umesh Prasad Singh |
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Designation : |
Director |
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Name : |
Mr. Peter Smits |
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Designation : |
Director |
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Name : |
Mr. Tom E. Sjoekvist |
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Designation : |
Director |
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Name : |
Bernhard Jucker |
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Designation : |
Director (w.e.f.
24/01/2006) |
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Name : |
Mr. Peter Leupp |
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Designation : |
Director |
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Name : |
Mr. R. N. Bharadwaj |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. B. Gururaj |
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Designation : |
Company Secretary
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MANAGEMENT COMMITTEE : |
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Mr. I. K. Sadhu |
Power
Technologies – Systems |
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Age |
58 years |
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Qualification |
B. Sc.
(Engineering) |
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Experience |
38 years |
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Previous Employment |
Bharat Heavy
Electrical Limited (Commercial Engineer) |
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Ravi Uppal |
Corporate Management Committee |
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Mr. Amresh Dhawan |
Power
Technologies – Products |
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K Rajagopal |
Corporate Management Committee |
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Mr. Biplab Majumder |
Automation
Technologies |
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Mr. Bazmi Husain |
Automation – Control
Platform Products and Research and Development |
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Mr. V. Swamy |
Building Systems
and Group Service Centre |
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S Karun |
Corporate Management Committee |
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Mr. P. P. Gomes |
National Service
Organization |
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Mr. K. S. S. Rajan |
Marketing |
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K. Rajagopalan |
Finance |
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Mr. P. C. Rajiv |
Human Resources |
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Prakash
Kanagalekar |
Corporate Management Committee |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
ABB Asea Brown Boveri Limited, Zurich & ABB Flakt AB, Sweden |
22084057 |
52.11% |
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NRIs / OCBs |
53885 |
0.13% |
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Directors and their relatives |
472 |
0.00% |
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LIC / UTI / Other Insurance Companies |
5949298 |
14.04% |
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Nationalized Banks / Other Banks |
99288 |
0.23% |
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Mutual Funds |
1842558 |
4.35% |
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Foreign Institutional Investors |
6849582 |
16.16% |
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General Public |
5502535 |
12.98% |
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TOTAL |
42381675 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of switchgears, pollution and environment control equipments and motors/alternators/generators. It is also into manufacture of electrical items such as motors, transformers, etc. |
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Exports to : |
Asia Pacific, Europe, Germany, Middle East, South America, Sweden and UK. |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed Capacity |
Actual Production |
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Motors/Alternators/Generators upto 20 MW |
HP |
1464945 |
1322348 |
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Switchgear of all types |
Nos. |
4174000 |
4150963 |
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PLCC Equipment |
Nos. |
2850 |
1058 |
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Measurand Converters |
Nos. |
-- |
-- |
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Multiplexures |
Nos. |
100 |
66 |
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Telemetering Equipments |
Nos. |
150 |
26 |
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Turbochargers |
Nos. |
200 |
138 |
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Power Transformers |
MVA |
10000 |
5555 |
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Electronic Control and Supply Units for Variable Speed Drivers and other applications |
Nos. |
70000 |
55235 |
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Mini Computer/Microprocessor based Systems |
Value Rs. in ‘000 |
1000000 |
999564 |
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Non-Microprocessor Based Electronics (Analog and Digital) for Weighing, Batching and Force Measuring Systems and Sub Systems |
Value Rs. in ‘000 |
70000 |
36670 |
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Power Capacitors of all types |
MVAR |
3700 |
2810 |
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Robotics |
Nos. |
15 |
1 |
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Control Valves |
Nos. |
-- |
-- |
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Gas Analyzers and Systems |
Nos. |
300 |
184 |
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Process Control Instruments |
Nos. |
24975 |
22391 |
GENERAL
INFORMATION
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No. of Employees : |
5187 |
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Bankers : |
v ICICI Bank
Limited
20, R N Mukherjee Road, Kolkata – 700 001, India v Canara Bank v IDBI Bank Limited v HDFC Bank
Limited v Hongkong and
Shanghai Banking Corporation Limited v Union Bank of
India v
Standard Chartered Bank |
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Banking Relations : |
Good |
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Auditors : |
S. R. Batliboi & Company Chartered Accountants |
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Associates : |
v
ABB (China) Engineering Company Limited, China v
ABB (Hongkong) Limited v
ABB (Pty) Limited, Southern Africa v
ABB A/S, Skovlunde, Denmark v
ABB AG, Austria v
ABB AS, Automation Technology Products, Norway v
ABB AS, Tallinn v
ABB Asia Pacific Services Limited, Hong Kong v
ABB Assist AB, Sweden v
ABB Australia Pty Limited v
ABB Automation Company Limited, Saudi Arabia v
ABB Automation E. C., Bahrain v
ABB Automation Inc, U.S.A. v
ABB Automation Products, Germany v
ABB Automation Technology Products, AB v
ABB Beijing Drive Systems Company Limited v
ABB Business Centre, Switzerland v
ABB Calor Emag Hochspannung GmbH v
ABB Capacitors AB, Sweden v
ABB Capital BV, Amesterdam v
ABB Control Valves Inc. U.S.A. v
ABB Control, Siege Social, France v
ABB Corporate Management Services AG, Switzerland v
ABB Distribution Limited, Thailand v
ABB EJF S.R.O. v
ABB Electrical Company S. A. L., Lebanon v
ABB Electrik Sanayi A.S., Turkey v
ABB Energy Automation S. P. A., UAE v
ABB Energy Engineering AG v
ABB Engineering Technologies Company, Kuwait v
ABB Eutech Limited, U.K. v
ABB Group Process Limited, Zurich v
ABB Group Services Center S.A.E., Egypt v
ABB High Voltage Company S.A.E., Egypt v
ABB Hochspannungstechnik, Zurich v
ABB Holdings (South Asia) Limited v
ABB HongKong Limited |
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Membership : |
Confederation of Indian Industry |
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Parent Company : |
ABB Asea Brown Boveri Limited, Zurich |
CAPITAL STRUCTURE
Authorized Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
42500000 |
Equity Shares |
Rs. 10/- each |
Rs. 425.000 millions |
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750000 |
11% Redeemable 10 year, Cumulative Preference Shares |
Rs. 100/- each |
Rs. 75.000 millions |
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TOTAL |
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Rs.
500.000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
42381675 |
Equity Shares |
Rs. 10 /- each |
Rs.423.817 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
423.800 |
423.800 |
423.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
11534.600 |
8617.500 |
6822.800 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
11958.400 |
9041.300 |
7246.600 |
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LOAN FUNDS |
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1] Secured Loans |
15.400 |
27.000 |
14.300 |
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2] Unsecured Loans |
0.000 |
00.300 |
00.600 |
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TOTAL BORROWING |
15.400 |
27.300 |
14.900 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
11973.800 |
9068.600 |
7261.500 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
3071.700 |
2266.600 |
1900.000 |
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Capital work-in-progress |
246.200 |
384.200 |
49.300 |
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INVESTMENT |
773.500 |
871.500 |
1069.700 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.00 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
3547.000
|
2015.800 |
1682.900 |
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Sundry Debtors |
15702.700
|
10292.600 |
6263.300 |
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Cash & Bank Balances |
5464.400
|
4009.700 |
4167.500 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
3418.300
|
3756.400 |
2102.700 |
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Total
Current Assets |
28132.4
|
20074.5 |
14216.4 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
19694.300
|
14016.100 |
9564.100 |
|
|
Provisions |
555.700
|
512.100 |
409.800 |
|
Total
Current Liabilities |
20250.000
|
14528.200 |
9973.900 |
|
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Net Current Assets |
7882.400
|
5546.300 |
4242.500 |
|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
11973.800 |
9068.600 |
7261.500 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
|
Sales Turnover |
46045.600 |
31999.300 |
24458.000 |
|
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Other Income |
784.400 |
510.900 |
493.200 |
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Stock Adjustments |
530.100 |
78.000 |
235.800 |
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Total Income |
47360.100 |
32588.200 |
25187.000 |
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Profit/(Loss) Before Tax |
5232.100 |
3394.800 |
2403.200 |
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Provision for Taxation |
1829.000 |
1208.000 |
860.000 |
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Profit/(Loss) After Tax |
3403.100 |
2186.800 |
1543.200 |
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Expenditures : |
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Manufacturing Expenses |
19768.600 |
12975.000 |
9893.100 |
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Administrative Expenses |
2082.900 |
1620.700 |
1272.900 |
|
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Raw Material Consumed |
12655.000 |
8759.100 |
7194.800 |
|
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Interest |
100.900 |
134.000 |
70.100 |
|
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Power & Fuel |
190.100 |
149.100 |
121.800 |
|
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Depreciation & Amortization |
264.700 |
231.400 |
203.600 |
|
|
Other Expenditure |
7065.800 |
5324.100 |
4027.500 |
|
Total Expenditure |
4212800 |
29193.400 |
22783.800 |
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QUARTERLY RESULTS
|
Year |
31.03.2007 |
30.06.2007 |
30.09.2007 |
|
Type
|
1stQuarter |
2ndQuarter |
3rdQuarter |
|
Sales Turnover |
13124.400
|
14008.800
|
13775.500
|
|
Other Income |
151.700
|
147.500
|
157.700
|
|
Total Income |
13276.100
|
14156.300
|
13933.200
|
|
Total Expenditure |
1184.2.600
|
12370.700
|
12051.400
|
|
Operating Profit |
1433.500
|
1785.600
|
1881.800
|
|
Interest |
10.000
|
22.800
|
15.600
|
|
Gross Profit |
1423.500
|
1762.800
|
1866.200
|
|
Depreciation |
86.200
|
77.000
|
79.300
|
|
Tax |
457.000
|
608.200
|
621.000
|
|
Reported PAT |
866.300
|
1085.600
|
1156.900
|
KEY RATIOS
|
PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
Debt-Equity
Ratio |
0.00 |
0.00 |
0.01 |
|
Long
Term Debt-Equity Ratio |
0.00 |
0.00 |
0.01 |
|
Current
Ratio |
1.39 |
1.40 |
1.45 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
10.25 |
8.63 |
7.63 |
|
Inventory |
16.55 |
17.30 |
16.76 |
|
Debtors |
3.54 |
3.87 |
4.21 |
|
Interest
Cover Ratio |
52.85 |
26.33 |
35.28 |
|
Operating
Profit Margin(%) |
12.16 |
11.75 |
10.94 |
|
Profit
Before Interest And Tax Margin(%) |
11.58 |
11.03 |
10.11 |
|
Cash
Profit Margin(%) |
7.97 |
7.56 |
7.14 |
|
Adjusted
Net Profit Margin(%) |
7.39 |
6.83 |
6.31 |
|
Return
On Capital Employed(%) |
51.42 |
44.04 |
37.78 |
|
Return
On Net Worth(%) |
32.88 |
27.36 |
23.78 |
LOCAL AGENCY
FURTHER INFORMATION
Performance
Review:
Orders received during the year at Rs. 56236 million were 50% higher
compared to Rs.37645 million in the previous year. Orders backlog at the end of
2006 was healthy at Rs.33723 million compared to Rs.21032 million at the end of
the previous year.
Sales and other income for the year were higher by 44% at Rs.43477 million
compared to Rs.30141 million in the previous year. Profit before tax was
significantly higher at Rs.5232 million compared to Rs.3395 million in the
previous year. Growth in profit was mainly attributable to volume growth,
operational efficiencies and higher other income.
Profit after tax at Rs.3403 million for the year has improved by 56% compared
to Rs.2187 million in the previous year. Earning per equity share of face value
of Rs.10 correspondingly improved to Rs.80.30 compared to Rs.51.60 in the
previous year.
Operating performance of all the segments, power products, power systems,
automation products and process automation was significantly better than
previous year. For detailed analysis of the performance, please refer to the
management's discussion and analysis section of the annual report.
Transfer to the Investor Education and
Protection Fund:
In terms of Section 205C of the Companies Act, 1956, the unclaimed
dividend amount aggregating to Rs.0.535 million lying with the Company for a
period of seven years pertaining to year ended on December 31, 1998, was
transferred during the year to the Investor Education and Protection
Fund.
Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and Outgo:
The particulars as prescribed under sub-section(1)(e) of Section 217 of
the Companies Act, 1956, read with the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, are given in Annexure-A, forming
part of this report.
Continuous
efforts are made to integrate R and D activities with reference to customers'
requirement. Future plan includes:
Numeric relay designs, usage of 3D modeling techniques
for design optimization of components, development of higher rating Statcon
(300/500) kVAR, Statcon for 3-phase application along with lower order harmonic
cancellation technique and load balancing, new M2BA motors for frames 160 -
250, new M3BPI motors for frames 280-400, brake motors frame 71-132,
development of oil immersed internal breaker for transformer, 3600 Amps, 220 kV
and 132 kV current transformers, composite insulators for 132, 220, 420 kV
current transformers, installation of HV capacitor configurator and low energy
drive for 400 kV breakers.
Foreign
exchange earnings and outgo:
(a) Activities related to Exports; initiative taken to
increase exports; development of new export markets for products and services;
export plans:
Revenues from exports at Rs.4331 million were 85% higher
than Rs.2337 million in the previous year. Power products segment consolidated
its position in the export markets with coverage of more than 85 countries so
far. It also strengthen its position as global focus feedter factory for 72 kV
circuit breakers for the group. This group had significant success in South
Africa for this breaker. A major order for Disconnectors was received from
Nigeria and from Angelique International Limited, New Delhi, for supply of
various HV switchgear products. Process automation segment got certain
important orders for export for cement and steel industries and for spares and
service of turbochargers. Automation products segment has strategies in place
to increase export of various products and services to Europe and in South
Asian region. There was significant increase in exports from global engineering
and sourcing centre, established last year and is further expected to grow in
coming years. Power system segment had substantial increase in revenues on
execution of project orders at Syria and Bangladesh. Company management's
efforts continue towards increasing export revenues. Moreover, the ABB Group
remains committed to increased sourcing from India. Overall growth prospects
for export continues to be promising.
Total foreign exchange
used and earned:
(Rs. in Millions)
a)
Foreign Exchange earned
(including deemed exports) 4,929b) Foreign Exchange used 12,489
For and on behalf of the Board
Place: Bangalore Dinesh Paliwal Dated: February 16,
2007 Chairman
MANAGEMENT
DISCUSSION AND ANALYSIS:
Operating
Results of the Company:
During the year 2006, the Company secured orders worth
Rs.56236 million, 50 percent higher than the previous year's orders of Rs.37645
million. There had been significant growth in orders across all the segments of
the Company. Higher GDP growth, focussed infrastructure development action
taken by the Government and capacity built up in various industries has
given overall favourable economic environment in the country to operate. This
coupled with strategic initiatives on market and product portfolio front
adopted by the Company helped to realise this exceptional growth. New
business/product lines introduced during last few years have also contributed
significantly towards overall growth in orders. As a result of healthy order
intake, the Company's order backlog was further augmented by 60 per cent to
Rs.33723 million as compared to Rs.21032 million at the beginning of the year.
The Company also achieved a strong top-line performance with
revenues of Rs.43477 million for the year, registering a growth of 44 per cent
over the previous year. Volume growth, operational efficiencies and higher
financial income (net) resulted in healthy profit improvement inspite of
increase in material expense due to increase in commodity prices. Profit before
tax was Rs.5232 million as compared to Rs.3395 million in the previous year.
Net profit after tax at Rs.0.003 million for the year
was 56 per cent higher than last year. Earnings per equity share (face value
Rs.10) were also significantly higher at Rs.80.30 compared to Rs.51.60 in the
previous year.
The Company carried out significant expansion of
manufacturing capacities and continued to expand its range of offering,
introducing several new products during the year. In addition to capacity and
range expansion, the Company also upgraded and modernised many of its manufacturing,
office and employee welfare facilities in order to enhance efficiency and
productivity.
Outlook for the
Company:
India's current state of economy and expectation of
GDP growth reaching around 10%, continued investment in power and other
infrastructure sector and booming globalizing industrial sector offers an
excellent opportunity to the Company to operate. Several strategies towards
market penetration, product and range expansion, manufacturing and engineering
capacity augmentation, operational excellence, focused organization structure,
IT and other system development, human resource development and retention
actions are expected to further strengthen Company's position. Moreover, the
ABB Group remains committed to increasingly leverage the Indian operations for
projects, products and services within the region and globally. In line with
this strategy, the Company will continue to grow its core businesses, expand
its portfolio and augment manufacturing and engineering capacities as required.
The Company remains resolute in its objective to pursue the path of profitable
and sustainable growth, maximizing operational efficiencies and striving to
attain the highest standards of quality, safety and productivity. The overall
outlook for the Company continues to be positive and the Management remains
optimistic with regards to continued growth.
Business Segment Analysis:
To bring focused attention to market and operational
efficiencies, Company had adopted a new segment structure from beginning of the
2006, in alignment with ABB Group organization structure. The relative
distribution of revenues amongst these segments is as under.
2006
2005
Power Systems (PS) 33% 34Power Products (PP) 27%
28Process Automation (PA) 20% 18Automation Products (AP) 20% 20
Power
Systems Segment (PS):
The summarized performance of the segment is as under:
(Rs. in Millions) 2006 2005 Orders Received 20,141
14,698 Order Backlog 14,796 9,752 Revenues 15,097 10,633 Result 1,631 829
Central Government's focus on power sector reforms and
introduction of national electricity policy in past few years is reflected in
increasing investment in this sector. Capacity additions, development of
transmission network and power distribution improvements and reforms on
domestic front resulted in strong orders and revenue growth during the year.
Orders received grew by 37% and revenues were higher by 42%. The market showed
positive signs in most areas of segment's operation and future outlook
continues to remain promising.
Major orders received includes for transmission and
distribution substations on turnkey basis from PGCIL for 400kV substations at
Kota, Damon, Karikuddi. Narendra, Hiryur and Davanagiri, from KPTCL for 220 kV
substations at Kanakpura, Holenarsimpura and Bijapur and from WBSEB for 220 kV
substations at Bishnupur. The segment also received major orders from GESCOM,
CESCOM and HESCOM under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGG' and
orders for eBOP from Tata Projects for Giral thermal power project and JSW
Energy Limited for 2 x 300 MW power plant.
Major projects commissioned during the year includes 220 kV
substations at Guttur and Puttur for KPTCL, 400kV substation for PGCIL at
Lucknow, Narendra and Rihand and 400 kV Substation for UPCL at Kashipur. The
segment supplied and commissioned a number of distribution substations and
APDRP projects for MPSEB and BESCOM, control and instrumentation projects for
NTPC at Vindhyachal, Ramagundam, Sipat and Singrauli. Newly developed
substation automation system based on REX 670 platform with IEC 61850 protocols
were supplied to PGCIL for a number of 400 kV substations.
Prices of raw materials like structural steel, copper,
aluminium, etc., continues to remain area of concern. Numbers of strategic
actions were implemented to improve project management. This helped in
improving profitability of the segment.
Power Products Segment
(PP):
The
summarized performance of the segment is as under:
(Rs. in Millions) 2006 2005 Orders Received 15,295
9,300 Order Backlog 9,577 6,412 Revenues 12,130 8,748 Result 1,382 1,113
Due to Governments policies, prospects from ultra mega
power generation projects and demand for electricity, investments in the
transmission and distribution sector remained buoyant. Significant capacity
addition in industries and service sector continued at a fast pace. This offers
excellent prospects for different products of the segment. Orders received grew
by 64% and growth in revenues was 39%. Products for improving power quality and
energy efficient technologies are also gaining demand. Large target has been
proposed in the Xlth five-year plan (2007-12) for power transmission (increase
in inter-regional capacity from 9000 MW to 30,000 MW), power generation
(capacity addition of around 86,500 MW). New opportunities have emerged in the
field of 765 kV switchgear and transformer products as well as large volume low
end products.
Major orders received during the year included an order from
NTPC for 11 units of 260 MVA 400 kV GSU and 200 MVA 400 kV ICT and an order for
HV circuit breakers from MSEB.
Power products exports consolidated its position in the
export markets catering to more than 85 countries with order booking of Rs.1545
million. With order intake of about 1,000 ED circuit breakers during the year,
the segment continued to consolidate its position as Global focused feeder
factory for 72.5 kV circuit breakers for the ABB Group. Segment has won
significant contracts for 72.5kV SF6 circuit breakers from South Africa.
Significant growth in exports is expected in coming years from Sub Sahara
Africa, Latin America, South East Asia and North America.
The Transformer business consolidated its market
position in with doubling of orders during the year and growth in revenues. A 200
MVA 400 kV transformers successfully passed short-circuit testing at KEMA,
Netherlands. Stabilization of production at newly set Insulation Kit Center has
helped in improving the quality of transformer insulation.
With buoyancy in distribution sector and introduction of
several new products, significant growth continued for medium voltage
switchgears. This business recorded a number of successes during the year
including a repeat order from PSEB for 709 panels and a breakthrough order from
Grasim for Unigear panels. The distribution automation business secured
important order for RE 500 relays from HPCL. A new low cost relay, N140/41 was
successfully type tested and is ready for manufacturing and marketing. Focus on
channel partners and retrofit business continues to yield dividends for the MV
business. The Ring Main Unit facility produced over 5000 units in the first
year of production and the business is expected to grow significantly in coming
years. Segment's R and D unit continued to rise in the global value chain. It
successfully developed new products and participated in several global product
development projects.
A new mechanical testing laboratory for stringent
quality tests on TV circuit breakers was established during the year. This will
help in monitoring and improving product quality.
Several new products and product ranges were introduced
during the year. This included 245 kV and 400 kV LTB E circuit breakers, NI
40/41 relays, low-cost compact sub-station and distribution transformers up to
100 KVA. Recent introduction of GIS, GCB and PASS in the Indian market will
cater to the growing demand for modular solutions and new technologies.
To support business growth, there are plans to augment
capacities for power and distribution transformers, HV and MV products. A
global manufacturing facility for low-end relays and new factory for the
existing range of distribution automation products is also planned at
Vadodara.
Concerns for the segment includes lower demand for HT
capacitor, delivery schedules and prices for insulators for the HV products and
tanks for transformers and emerging competition from several local players and
Chinese manufacturers in the medium voltage segment.
Domestic market for power products continues to remain on
the ascent. This coupled with increasing prospects for exports, capacity
augmentation, introduction of new products and range expansion, focuses on
services and operational excellence, offers extremely positive outlook for the
segment.
Process Automation Segment
(PA):
The
summarized performance of the segment is as under:
(Rs. in Millions) 2006 2005 Orders Received 13,317
7,729 Order Backlog 8,312 4,135 Revenues 9,140
5,549 Result 983 581
During the year, industrial climate in country remained
buoyant with strong growth across almost all the industries. With current low
capita consumption of several metals, paper and other industrial products and
demand from infrastructure development gives excellent growth opportunities to
industries. Most industries have announced investment plans for augmentation of
capacities and efficiency improvement. This environment augurs well for the
Process Automation Segment. Growth in orders during the year was 72% and growth
in revenues was 65%. A global sourcing and engineering centre established last
year has stabilized and contributed significantly to growth of the segment.
Paper Industry is investing in new machines to meet the
growing demand. Segment received several DCS and QCS orders during the year.
Growth in crane business is driven by Industrial sector in general and steel
sector in particular. Steel sector is poised for growth and proposed
investments in this sector are expected to exceed 80 BUSD in next 6 years. This
includes investment in Greenfield steel projects by international players like
POSCO and Mittal Steel. Various existing medium and large size Indian companies
have also announced the significant expansion plans. With increased spending on
infrastructure and buildings, capacity addition of about 54 Million Tonnes by
the year 2010 is expected for the cement. Further there is consolidation taking
place in the market with several multinationals cement manufacturers taking
over Indian cement companies as well as setting up new facilities in India. In
Oil and Gas sector refining capacity of India at present stands at 120 million
MT. This capacity is expected to go up to 200 million MT by the year 2010.
Segment has several opportunities to take composite electrification orders from
most industry segments. New markets are opening up for Manufacturing Execution
Systems (MES) in Metal, Paper and Cement Industries.
Segment has received several large and important orders
during the year. This includes a turn key order for SCADA (supervisory control
and data acquisition system) from Oil and Natural Gas Corporation (ONGC) at
Rs.4300 million, for DCS and emergency shut down (ESD) from ONGC and Essar Oil
Limited, electrics and automation from Binani Industries Limited, Welspun
Gujrat Ltd., Thyssen Krupp India for a cement plant and bucket wheel excavators
for Neyveli Lignite Corporation Ltd. Other important orders booked were from
Jindal Steel and Power Limited, Hissar, plate mill, the first order for plate
mill for the segment, an order from Emirate Steel for power distribution
package and orders from Kirloskar Oil Engines Limited for turbochargers.
Segment also had significant growth in export orders.
Major projects commissioned during the year included
electrics and automation of Andhra Pradesh Paper Mills Limited and GPT Steels
Limited, electrics for Haldia's ship to shore cranes and Wire Rod Mill of Steel
Authority of India Limited.
With several prospects emerging in the country, several
local and international players have become active. OEMs are also consolidating
their offerings with electrical solution to give a complete package to the
customers. With several project on hand, segment has challenge in timely
execution of orders, particularly from steel and cement sectors. Segment will
continues to remain customer focused to sustain its competitive advantage
through constant innovation and technology development. The overall outlook for
the segment remains positive.
Automation Products
Segment (AP):
The
summarized performance of the segment is as under:
(Rs. in Millions) 2006 2005 Orders Received 9,933
6,845 Order Backlog 2,171 1,417 Revenues 9,179 6,354 Result 1,145 793
With significant investments taking place for industrial
capacity augmentation and efficiency improvement, segment witnessed surge in
demand for automation products during the year. A positive market environment
coupled with a strategic thrust on product range and capacity expansion and
market penetration helped in registering 45% growth in orders and revenues
compared to previous year. During the year several orders for products were
received from steel, cement, paper, oil and gas industries and OEMs. Segment
had break through success from water and sewage application, opening up a new
stream of revenues with securing of orders for Bhima and Kalwakurthy Lift
irrigation projects.
During the year new factories at Haridwar for LV apparatus
and at Bangalore for LV electric motors commenced production. Further increases
in range and capacity augmentation are planned for LV motors, HT motors, Drives
and LV switchgear. New series of EFF1 and EFF 2 motors in frame size 71-132 are
ready for introduction in domestic and export market.
The channel partner network was further expanded to over 700
compared to 530 at the end of last year, helping in increase in business over
50 percent. The business through the web increased by more than 75 percent to
around Rs.2700 million, making it the largest B2B transaction volume through
the web for this kind of business in India. During the year central warehouse
was established at Bangalore for automation products for off the shelf
immediate delivery to the customers. Two more such warehouses are planned to be
opened in the year 2007 in northern and western part of India.
Increase in competition, bringing pressure on volume
and price realization, increase in metal prices and product design piracy are
some of the concerns for the segment. Several supply chain management actions
have been planned for reduction in material and other input costs.
The overall outlook for the segment continues to be
positive.
Building
Systems (BS):
Building systems business provides integrated building
management solutions (IBMS) covering lighting, networking, heating,
ventilation, air conditioning, electrical installations, energy management,
fire alarm, protection system and other building facilities and solutions to
various customers across the sectors, included under PS and PA segments,
performed extremely well during the year. Volumes continued to grow based on
the growing infrastructure spending in all major metros in the country and
capacity expansion by industries. Major growth sectors continue to be IT,
corporate buildings, shopping malls, hotels, pharma and health care. Based on
per capita health care spending and India's growing reputation as a major
source of cost effective generic drugs, major investments in healthcare and
hospitality sectors are expected. BS group had growth in revenues of 40% during
the year with improvement in margin.
Major orders received during the year includes from ONGC,
IBM for Noida facility, Wipro for their Chennai facilities, Himmatsingka
Linens, Vardhaman Fabrics, Maruthi Udyog and BHEL. Growing installed base has
opened up further opportunities for repeat orders and after sales services.
Major projects orders commissioned during the year include BHEL, Rihand, NTPC
Vindyachal, Wockhardt Bangalore, ETL BPO Park and DMRC, Mandi house.
Increase in competition, price level of metals and
availability and retention of skilled manpower are area of concern for the
group. Focus on IBMS and services, certain supply management actions and
improvements in project management processes are expected to improve margin and
competitiveness for this group.
Finance:
The Company continued to focus on optimizing its
working capital, which resulted in a further improvement in the cash position.
Net cash position (cash and bank balances less loan fund) at the end of the
year had significantly increased to Rs.5449 million compared to Rs.3982 million
at the end of the previous year. Surplus funds, not committed in operation,
were deployed in tax-free bonds and short term fixed deposits with reputed
banks, ensuring security and liquidity of the fund. The expenditure of Rs.933
million, on fixed assets, during the year was fully financed from internal
accruals. Net financial income during the year was higher at Rs.210 million
compared to Rs.166 million in the previous year, primarily due to better
interest rates on short term deposits. Foreign exchange management arid
valuation was further automated during the year. As in the past, Company
maintained excellent relationship with major banks operating in India and was
able to negotiate favourable terms for various banking facilities used.
WEBSITE DETAILS:
Press Release:-
December 03, 2007
ABB Ltd has informed about the following:
India is among the fastest growing economies in the world today
and a key focus area for ABB. It is an important part
of our growth strategy and will play an integral role in strengthening AB
global footprint, said Huhertus von Grunberg, Chairman ABB Group. We presently
employ over 6000 people in India and expect our human resource base to touch
around 10000 by 2010 to support our growth plans he added.
We are extremely encouraged with the performance of our Indian operations and
India will soon be among the top five markets for ABB. Based on market outlook
and our well established presence here, we expect the business volumes for ABB
in India to double by 2010. Having completed our previously announced
investment programme of 100 MUSD, we now plan to invest an additional $100
million for capacity and range expansion over the next 2-3 years. to support
this growth said Fred Kindle, President & CEO ABB Group. In addition to
serving the needs of the Indian market, we are also determined to leverage
India as a key resource base. Besides its pivotal role in the South Asia
Pacific region, India is increasingly contributing to ABB's global operations,
he added
Expansion plans on the anvil include a new greenfield facility at Neelamangala,
near Bangalore for manufacturing Low Voltage products and Power Electronics.
The Company is also establishing new manufacturing units in Vadodara for Small
Power Transformers and Distribution Automation products. Meanwhile, capacity
and range expansion is underway across businesses and locations. ABB will
double its production capacity for high voltage (HV) breakers ,instrument
transformers and HT (high tension) machines as well as expand the capacity of
large power transformers to 17000 MVA as part of its expansion plans. ABB will
also manufacture 765 kV equipment in India, to support the country's power
infrastructure needs.
ABB is also committed to leveraging India's competitive advantage and rich pool
of engineering talent to a greater extent. In addition to its existing global
Operations and Engineering Center in Bangalore a second such Center has
recently been established in Chennai to support Power Systems and Process
Automation projects across the world. The Company plans to double its headcount
at these centers from the present strength of around 350 engineers.
ABB also plans to significantly increase the number of engineers and domain
experts at its global R&D Center at Bangalore . This is now the biggest
such Center in ABB's global R&D network and is handling increasingly
complex projects that are playing an integral part in the Company's ongoing
quest to remain at the forefront of technology and innovation.
ABB India continues to grow with robust Q3
performance
Cumulative nine months Orders up 35 per cent ; Revenues up 42 per
cent; Net Profit up 51 per cent
Q3 Orders up 23 per cent ; Revenues up 27 per cent ; Net Profit up 41 per cent
25 Oct 2007 , Bangalore :
The statutory results are attached
– comparison of business is as follows:
|
|
Q3
2007 |
Q3
2006 |
%
Change |
Cumulative
Q3 2007 |
Cumulative
Q3 2006 |
%
Change |
|
Orders |
16683 |
13580 |
23% |
56649 |
42110 |
35% |
|
Revenues |
13933 |
10936 |
27% |
41366 |
29040 |
42% |
|
Profit Before Tax |
1787 |
1268 |
41% |
4810 |
3184 |
51% |
|
Profit after tax |
1157 |
821 |
41% |
3109 |
2053 |
51% |
Figs. in
Rs. Million unless stated otherwise
Revenues
ABB India maintained its revenue growth
momentum with cumulative revenues of 41366 MINR for the nine months ending
September 2007, 42 per cent higher than the same period last year. Third
quarter revenues at 13933 MINR registered a 27 per cent increase over 2006 Q3.
“ The Indian economy continues to surge ahead with power sector investments and
industrial growth gathering pace. Our order book is getting stronger, helped by
core business growth as well as new revenue streams and we continue to be
positive on the market outlook. Capacity and range expansion is underway across
businesses to enable us to address India’s growing power and automation needs”
said Biplab Majumder, Country Manager & Managing Director, ABB India,
commenting on the results. “Meanwhile, we remain committed to sustaining
profitable growth through operational efficiencies, productivity gains and a
continued focus on costs and working capital management”, he added.
Orders
Cumulative order intake for the nine month period ending September 2007
rose to 56649 MINR, an increase of 35 per cent over the same period in the
previous year as the Company continued to strengthen its order book. The order
intake during the third quarter was 16683 MINR, 23 per cent higher than 2006
Q3. The company received several significant orders during the quarter,
including successes in new revenue streams. In addition to power and automation
projects, the standard product business continues to grow at an accelerated pace.
The strong order intake during the past few quarters, has further strengthened
the order backlog to 49,011 MINR at the end of September 2007, as compared with
33,723 MINR at the beginning of the year and 46,362 MINR at the end of June
2007.
Net Profit
The company continued its profitable growth march, with a
Net profit after tax for the nine months ended September 2007 of 3109 MINR
compared with 2053 MINR during the same period last year, registering a robust
growth of 51 per cent. Profit after tax of 1157 MINR for the third quarter of
2007 was 41 per cent higher compared with 821 MINR in 2006 Q3. Profitability
improvement resulted mainly from higher revenues, operational efficiencies,
efficient working capital management, productivity improvement and continued
focus on costs.
ABB (www.abb.com) is a leader in power and automation
technologies that enable utility and industry customers to improve their
performance while lowering environmental impact. The ABB Group of companies
operates in around 100 countries and employs about 111,000 people.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No 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.39.43 |
|
UK Pound |
1 |
Rs.78.45 |
|
Euro |
1 |
Rs.58.26 |
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 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
69 |
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 |
|