MIRA
INFORM REPORT
|
Report Date : |
17.06.2008 |
IDENTIFICATION
DETAILS
|
Name : |
ABB LIMITED |
|
|
|
|
Registered Office : |
Khanija Bhavan, 2nd Floor, East Wing, 49, Race Course Road, Bangalore – 560 001, Karnataka |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.12.2007 |
|
|
|
|
Date of Incorporation : |
24.12.1949 |
|
|
|
|
Com. Reg. No.: |
08-32923 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L32202KA1949PLC032923 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
MUMA19181B |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACA3834B |
|
|
|
|
Legal Form : |
Public Limited Liability Company. The company's shares are listed on the Stock Exchanges. |
|
|
|
|
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
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 81000000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
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
|
Registered Office : |
Khanija Bhavan, 2nd Floor, East Wing, 49, Race Course Road, Bangalore – 560 001, Karnataka, India. |
|
Tel. No.: |
91-80-22949150/54 |
|
Mobile No.: |
91-80-22949148 |
|
E-Mail : |
b.gururaj@in.abb.com |
|
Website : |
|
|
|
|
|
Corporate Office: |
Plot No. Street No. 17, Nashik – 422 007, Maharashtra, India |
|
|
|
|
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 |
|
|
|
|
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
|
Name : |
Mr. Dinesh Paliwal |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Ravi Uppal |
|
Designation : |
Vice Chairman and
Managing Director |
|
Age : |
49 years |
|
Qualification : |
B.Tech
(Electrical & Electronics), M.B.A. |
|
Experience : |
27 years |
|
Date of Appointment : |
01.10.2001 |
|
Previous Employment: |
Volvo India
Private Limited – Managing Director |
|
|
|
|
Name : |
Biplab Majumder |
|
Designation : |
Executive Director (w.e.f. 24/01/2006) |
|
|
|
|
Name : |
Mr. N. S. Raghavan |
|
Designation : |
Director |
|
|
|
|
Name : |
D E Udwadia |
|
Designation : |
Director (w.e.f. 21/07/2005) |
|
|
|
|
Name : |
K Sridhar |
|
Designation : |
Director (w.e.f. 21/07/2005) |
|
|
|
|
Name : |
Mr. Nasser Munjee |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Umesh Prasad Singh |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Peter Smits |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Tom E. Sjoekvist |
|
Designation : |
Director |
|
|
|
|
Name : |
Bernhard Jucker |
|
Designation : |
Director (w.e.f.
24/01/2006) |
|
|
|
|
Name : |
Mr. Peter Leupp |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. R. N. Bharadwaj |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. B. Gururaj |
|
Designation : |
Company Secretary
|
|
|
|
|
MANAGEMENT COMMITTEE : |
|
|
|
|
|
Mr. I. K. Sadhu |
Power
Technologies – Systems |
|
Age |
58 years |
|
Qualification |
B. Sc.
(Engineering) |
|
Experience |
38 years |
|
Previous Employment |
Bharat Heavy
Electrical Limited (Commercial Engineer) |
|
|
|
|
Ravi Uppal |
Corporate Management Committee |
|
Mr. Amresh Dhawan |
Power
Technologies – Products |
|
K Rajagopal |
Corporate Management Committee |
|
Mr. Biplab Majumder |
Automation
Technologies |
|
Mr. Bazmi Husain |
Automation –
Control Platform Products and Research and Development |
|
Mr. V. Swamy |
Building Systems
and Group Service Centre |
|
S Karun |
Corporate Management Committee |
|
Mr. P. P. Gomes |
National Service
Organization |
|
Mr. K. S. S. Rajan |
Marketing |
|
K. Rajagopalan |
Finance |
|
Mr. P. C. Rajiv |
Human Resources |
|
Prakash
Kanagalekar |
Corporate Management Committee |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.12.2007
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
ABB Asea Brown Boveri Limited, Zurich & ABB Flakt AB, Sweden |
110420285 |
52.11 |
|
NRIs / OCBs |
370777 |
0.17 |
|
Directors and their relatives |
4525 |
12.50 |
|
LIC / UTI / Other Insurance Companies |
26489003 |
0.19 |
|
Nationalized Banks / Other Banks |
410482 |
3.75 |
|
Mutual Funds |
7942000 |
17.35 |
|
Foreign Institutional Investors |
3675908 |
2.18 |
|
General Public |
4609999 |
11.75 |
|
TOTAL |
24901396 |
100.00 |
BUSINESS DETAILS
|
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. |
||||||||
|
|
|
||||||||
|
Products : |
|
||||||||
|
|
|
||||||||
|
Exports to : |
Asia Pacific, Europe, Germany, Middle East, South America, Sweden and UK. |
PRODUCTION STATUS
|
Particulars |
Unit |
|
Installed Capacity |
|
Motors and other machines |
HP |
|
3124484 |
|
Switchgear of all types |
Nos. |
|
15277350 |
|
PLCC Equipment |
Nos. |
|
2850 |
|
Multiplexures |
Nos. |
|
100 |
|
Telemetering Equipments |
Nos. |
|
150 |
|
Turbochargers |
Nos. |
|
200 |
|
Transformers |
MVA |
|
12000 |
|
Electronic Control and Supply Units for Variable Speed Drivers and other applications |
Nos. |
|
100000 |
|
Mini Computer/Microprocessor based Systems |
Value Rs. in ‘000 |
|
2300000 |
|
Non-Microprocessor Based Electronics (Analog and Digital) for Weighing, Batching and Force Measuring Systems and Sub Systems |
Value Rs. in ‘000 |
|
70000 |
|
Power Capacitors of all types |
MVAR |
|
3700 |
|
Robotics |
Nos. |
|
30 |
|
Gas Analyzers and Systems |
Nos. |
|
300 |
|
Process Control Instruments |
Nos. |
|
30225 |
GENERAL
INFORMATION
|
No. of Employees : |
5535 |
|
|
|
|
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 |
|
|
|
|
Banking Relations : |
Good |
|
|
|
|
Auditors : |
S. R. Batliboi & Company Chartered Accountants |
|
|
|
|
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 |
|
|
|
|
Membership : |
Confederation of Indian Industry |
|
|
|
|
Holding company : |
ABB Asea Brown Boveri Limited, Zurich |
CAPITAL STRUCTURE
As on 31.12.2007
Authorized Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
212500000 |
Equity Shares |
Rs. 2/- each |
Rs. 425.000 Millions |
|
750000 |
11% Redeemable 10 year, Cumulative Preference Shares |
Rs. 100/- each |
Rs. 75.000 Millions |
|
|
TOTAL |
|
Rs.
500.000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
211908375 |
Equity Shares |
Rs. 2/- each |
Rs.423.817 millions |
Notes:
Share Capital Includes :
a)
46185525 Equity Shares of Rs. 2 each (Previous
year-92375105 equity shares of Rs. 10 each) allotted as fully paid up at par,
pursuant to contracts for consideration other than cash.
b)
1000000 equity shares of Rs. 2 each (Previous
Year -200000 equity shares of Rs. 10 each) issued to the holders of 40000-8.57%
cumulative preference shares of Rs. 100 each on cancellation of the preference
shares in terms of Scheme of Compromise between the Company and its
preference/equity shareholders in 1988
c)
42219465 and 51772945 equity shares of Rs. 2
each (Previous Year -8443893 nd 10354589 equity shares of Rs. 10 each) issued
as fully paid up bonus shares by capitalization of General Reserve Account and
Securities Premium Account respectively
d)
97879955 equity shares of Rs. 2 each (Previous
Year – 19575991 Equity shares of Rs. 10 each) are held by ABB Asea Brown Boveri
Limited, Zurich, Switzerland, the ultimate holding company and 12540330 equity
shares of Rs. 2 each (Previous year-2508066 equity shares of Rs. 10 each) are
held By ABB Norden Holdings AB, Sweden, a subsidiary of the ultimate holding
company.
During the year face value of each equity
shares of Rs. 10 each was sub-divided (stock split) into 5 equity shares of
face value of Rs. 2 each.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
423.817 |
423.817 |
423.800 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
15839.626 |
11534.601 |
8617.500 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
16263.443 |
11958.418 |
9041.300 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
5.660 |
15.457 |
27.000 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
00.300 |
|
|
TOTAL BORROWING |
5.660 |
15.457 |
27.300 |
|
|
DEFERRED TAX LIABILITIES |
128.034 |
165.271 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
16397.137 |
12139.146 |
9068.600 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3519.298 |
3071.721 |
2266.600 |
|
|
Capital work-in-progress |
1059.418 |
246.217 |
384.200 |
|
|
|
|
|
|
|
|
INVESTMENT |
704.546 |
773.546 |
871.500 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
4887.102
|
3546.995
|
2015.800 |
|
|
Sundry Debtors |
24235.625
|
15702.677
|
10292.600 |
|
|
Cash & Bank Balances |
6428.636
|
5464.424
|
4009.700 |
|
|
Other Current Assets |
2753.603
|
1474.409
|
0.000 |
|
|
Loans & Advances |
2802.023
|
1778.220
|
3756.400 |
|
Total
Current Assets |
41106.989
|
27966.725
|
20074.5 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
29314.878
|
19363.315
|
14016.100 |
|
|
Provisions |
678.236
|
555.748
|
512.100 |
|
Total
Current Liabilities |
29993.114
|
19919.063
|
14528.200 |
|
|
Net Current Assets |
11113.875
|
8047.662
|
5546.300 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
16397.137 |
12139.146 |
9068.600 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
|
|
|
|
|
|
|
Sales Turnover |
59303.114 |
42740.093 |
31999.300 |
|
|
Other Income |
710.454 |
736.929 |
510.900 |
|
|
Stock Adjustments |
0.000 |
0.000 |
78.000 |
|
|
Total Income |
60013.568 |
43477.022 |
32588.200 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
7564.569 |
5232.062 |
3394.800 |
|
|
Provision for Taxation |
2647.879 |
1829.000 |
1208.000 |
|
|
Profit/(Loss) After Tax |
4916.690 |
3403.062 |
2186.800 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Value |
4663.719 |
4928.601 |
0.000 |
|
Total Earnings |
4663.719 |
4928.601 |
0.000 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Value of Imports |
13883.670 |
11047.330 |
0.000 |
|
Total Imports |
13883.670 |
11047.330 |
0.000 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
0.000 |
0.0000 |
12975.000 |
|
|
Administrative Expenses |
0.000 |
0.000 |
1620.700 |
|
|
Raw Material Consumed |
42920.333 |
31445.493 |
8759.100 |
|
|
Personnel Expenses |
3060.684 |
2414.186 |
|
|
|
Interest |
68.123 |
7.253 |
134.000 |
|
|
Power & Fuel |
0.000 |
0.000 |
149.100 |
|
|
Depreciation & Amortization |
324.057 |
264.675 |
231.400 |
|
|
Other Expenditure |
6075.802 |
4113.353 |
5324.100 |
|
Total Expenditure |
52448.999 |
38244.960 |
29193.400 |
|
QUARTERLY RESULTS
|
Year |
|
|
30.03.2008 |
|
Type
|
|
|
1st Quarter |
|
Sales Turnover |
|
|
15352.900 |
|
Other Income |
|
|
185.100 |
|
Total Income |
|
|
15538.000 |
|
Total Expenditure |
|
|
13625.600 |
|
Operating Profit |
|
|
1912.400 |
|
Interest |
|
|
28.200 |
|
Gross Profit |
|
|
1884.200 |
|
Depreciation |
|
|
83.300 |
|
Tax |
|
|
604.500 |
|
Reported PAT |
|
|
1176.900 |
KEY RATIOS
|
PARTICULARS |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
Debt-Equity
Ratio |
0.00 |
0.00 |
0.00 |
|
Long
Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current
Ratio |
1.37 |
1.39 |
1.40 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
12.02 |
10.25 |
8.63 |
|
Inventory |
15.14 |
16.55 |
17.30 |
|
Debtors |
3.20 |
3.54 |
3.87 |
|
Interest
Cover Ratio |
45.45 |
52.85 |
26.33 |
|
Operating
Profit Margin(%) |
12.63 |
12.16 |
11.75 |
|
Profit
Before Interest And Tax Margin(%) |
12.12 |
11.58 |
11.03 |
|
Cash
Profit Margin(%) |
8.21 |
7.97 |
7.56 |
|
Adjusted
Net Profit Margin(%) |
7.70 |
7.39 |
6.83 |
|
Return
On Capital Employed(%) |
55.35 |
51.42 |
44.04 |
|
Return
On Net Worth(%) |
35.21 |
32.88 |
27.36 |
LOCAL AGENCY
FURTHER INFORMATION
Sub-division of
the Face Value of Equity Shares
In accordance with the approval of the shareholders at the 57th Annual General
Meeting of the Company held on May 25, 2007, each equity share of the face
value of Rs.10/- each was sub-divided into 5 equity shares of the face value of
Rs.2/- each, effective July 6, 2007. Consequently, the sub-divided equity
shares of the face value of Rs.2/- each have been issued to such shareholders
who held the equity shares of the face value of Rs.10/- each of the Company, as
on July 6, 2007.
Performance Review
Orders received during the year at Rs 76,682 million were 36% higher compared
to Rs 56.236 million in the previous year. Order backlog at the end of 2007 was
healthy at Rs 50,260 million compared to Rs 33.723 million at the end of the
previous year.
Sales and other income for the year were higher by 38% at Rs 60.014
million compared to Rs 43,477 million in the previous year. Profit before tax
was significantly higher at Rs 7.565 million compared to Rs 5.232 million in
the previous year. Growth in profit was mainly attributable to volume growth
and operational efficiencies.
Profit after tax at Rs 4.917 million for the year has improved by 44%
compared to Rs 3.403 million in the previous year. Earning per equity share of
face value of Rs 20.000 Millions spondingly improved to Rs 23.20 compared to
Rs.16.06 in the previous year.
Operating performance of all the segments, power system, power products,
process automation and automation products 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.
Operating Results
of the Company
During
the year 2007, the Company secured orders worth Rs 76.682 million, 36 percent
higher than the previous year's orders of Rs 56.236 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 business growth. As a
result of healthy order intake, the Company's order backlog was further
augmented by 49 per cent to Rs 50.260 million as compared to Rs 33.723 million
at the beginning of the year.
The Company also achieved a significant growth in revenues at Rs 60.14
million for the year, registering a growth of 38 per cent over the previous
year. Volume growth and operational efficiencies have resulted in healthy
profit improvement. Profit before tax was Rs 7.565 million as compared to Rs 5,232
million in the previous year.
Net profit after tax at Rs 4.917 million for the year was 44 percent
higher than last year. Earnings per equity share (face value Rs 2) was also
significantly higher at Rs 23.20 compared to Rs 16.06 in the previous year.
The Company has carried out and also currently executing significant
manufacturing capacities expansion projects 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. During the year, the Company has upgraded its ERP
system from SAP 4.7 to mySAP Business Suite and has implemented several new
modules such as Business Intelligence Warehouse, Customer Relations Management,
Employee Health Services and Governance Risk and Compliance.
Outlook for the Company
India's current state of economy and expectation of GDP growth
remaining around 9%, continued investment in power and other infrastructure
sector and booming globalising 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 organisation 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, maximising 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 profitable growth.
With capacity additions in existing power plants, setting up of new
power plants, realisation of the ultra mega power projects, development of
transmission networks and power distribution improvements and reforms on
domestic front have resulted in strong orders and revenue growth during the
year. Orders received grew by 36% and revenues were higher by 33%. The growing
domestic market and additional overseas market opportunities have shown
positive signs in most areas of the segment's operations and the future outlook
of the business continuous to remain promising.
With significant orders in the domestic market and orders from exports
for the transmission and distribution substations business saw robust growth
Major orders included the 400 kV GIS substation at Chamera and 400 kV
substation in Bihar from PGCIL, 220 kV substation orders from KPTCL as well as
several orders from GETCO and private customers such as Adani Power; a major
railway electrification order was received from DMRC and power distribution
orders from BESCOM, HESCOM & GESCOM under Rural Load Management Schemes
(RLMS). Newly established business EBoP (Electricals for Balance-of-Plant) has
established well for providing solution at power generation end with order
booking for 1,905 MW of generating capacity including Tata Projects Kota and
Zawar thermal power projects, JSW Energy Limited 8 x 135 MW power plants and
Endure's Suratgarh power plant. Several substation automation systems were
supplied and installed based on the latest IEC 61850 protocols, where the
segment has a technology edge, as well as various services and retrofit orders
were executed. With the setting up of a regional focused factory for numerical
IEDs and a global focused feeder factory in the Group for combiflex relays, the
substation automation products business is set to play a greater role globally.
With a major order for SCADA systems from KPTCL and responsibility for the
South Asia region the network management business is also poised for
significant growth.
Major projects commissioned during the year include 400 kV GIS
substations at Maharani Bagh for PGCIL and the 66 kV GIS substation for DMRC.
The segment supplied and commissioned a number of distribution substations and
APDRP projects for BESCOM, GEB, DVVNL, and JVVNL. 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.
Strategic actions were initiated and implemented to improve operational
efficiencies and excellence in project management. This helped in improving
profitability of the business. However, areas of concern remain rising prices
of raw materials such as structural steel, copper and aluminum. Additionally,
the distribution business faced operating cash-flow problems as funding for
various RGGVY Projects from REG had been delayed.
Power Products Segment (PP)
Buoyancy in the transmission and distribution sector continued during the
year with higher level of investment in this sector. Ordering for ultra mega power
generation projects has started and it has given a boost to demand for power
products manufacture by the segment. Capacity addition in industries and
services sector continued at a fast pace and rural electrification is a focus
area of the Central and the State Governments leading to broad based demand for
the products offered by the segment. Overall environment for the segment during
the year was very good.
To foster investments in power generation, transmission and distribution
segments, Central Government has provided several policy frame work. Demand for
improving power quality and energy efficient technologies is also on increase.
A very high target has been set at 78,000 MW of power generation in the Xlth
five year plan (2007-12) of the country. Power generation capacity addition of
86,500 MW is expected in Xllth plan period. This will have corresponding demand
for power transmission and distribution systems. Increase in inter-regional
capacity from 9,000 MW to 30,000 MW is planned in Xlth plan period. New
opportunities are on offer in the field of 765 kV switchgear and transformer
products as well as large volume low end products. Growing partnership with
local contractors for global projects is expected to contribute to the overall
growth in exports. Market trends are very bullish for power transformers, high
and medium voltage switchgears and GIS in metros and large industries.
Overall performance of the segment during the year 2007 was satisfactory.
Orders and revenues grew by 34% with significant improvement in the
profitability and operating cash flows. This improved performance was across
all its product lines i.e. transformers; HV switchgears and MV switchgears.
Major orders received during the year included 3 x 355 MVA, 420/20 kV generator
transformers, 2 x 315 MVA, 400/220/33 kV auto transformers and 3x 50 MVA,
220/6.9 kV station transformers for JSW Energy Limited, 218 units of EMUs for
MRVC project, 2 x 315 MVA, 400 /220 kV auto transformers and 3 x 105 MVA,
400/220 kV auto transformers from PGCIL, a large order for HV capacitors from
NALCO , for 498 MV panels from NTPC for Dadri, Korba and Farakka projects, for
353 MV panels from DMRC and from IRCON a/c KSEB for 1,474 outdoor RMUs. Power
products exports consolidated its position in the export markets with exports
to over 90 countries with order booking of Rs 2,242 million during the year
2007 compared to Rs 1, 545 million in the previous year. A state of the art
factory for manufacturing a complete range of distribution relays including
static numerical and electro-mechanical relays was inaugurated in December,
2007 at Vadodara plant. This is also a global focused feeder factory for cougar
series of relays and will give strategic advantages in the domestic as well as
global markets. Currently several power products capacity expansion projects
are under implementation at Vadodara and Nashik plants. Segment also has plans
to commence manufacturing of 765 kV circuit breakers and CVTs in the year
2008.
Domestic demand for power products is expected to continue on the ascent.
The surge in global demand for power products will continue to support exports.
The focus on enhancing power capacity and expanding grid networks will continue
to feed the demand for power products. Segment will also tap the growing demand
for new technologies with introduction of new products in all businesses. Focus
area for further growth for the segment will remain capacity expansion, product
range expansion, operational excellence, cost reduction and on time deliveries.
Promotion of GIS, GCB and PASS in the Indian market, will cater to the growing
demand for modular solutions and new technologies. A new group has been
established to develop cable accessories business. Outlook for the segment
continues to be positive.
Demand for HT capacitors continues to remain low. That remains an
area of concern. Focussed efforts are being made to secure new projects for
SVC, HVDC and TCSR in the coming years to grow this business. Shortages of
components including insulators for HV switchgears and tanks and bushings for
transformers are constraints on increasing capacities and providing faster
deliveries. New competition from the domestic and the Chinese manufacturers has
effected in short run price realisation of MV switchgears.
Process Automation Segment (PA)
Industrial climate in country remained buoyant with strong growth across
all most 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 and revenues during the year was 28% and 46% respectively.
Operating profits during the year improved significantly. Investments are
taking place for manufacture of all types of steels in both public and private
sectors. Global steel majors like POSCO and Mittals have also announced plans
for setting up Greenfield steel projects in India. Construction boom in Middle
East has lead to investments in profile mills. With growth in real estate and
infrastructure development across the country, demand for cement has gone up
leading to several investments in green and brown field projects. Paper
industry is investing in new machines to meet the growing demand for tissue and
other types of papers. Several investments are announced also in material
handling, oil and gas and marine sectors.
Segment has received several large orders for electricals and automation
solutions during the year. This includes in metals sectors from Jindal
Stainless Limited, JSW Limited, Jindal Tubes Limited, Salem and Vizag Steel plants,
Tata Steel Limited and Essar Group. In cement and mineral sectors important
orders booked includes from Grasim Industries Limited from OEMs L&T and
Sandvik. In pulp and paper sector major orders booked during the year includes
from Ballarpur Industries Limited, ITC Limited and HEC Limited. Major projects
commissioned during the year includes cold roll mill for JSW Limited, upgrade
of NET90 system for Durgapur Steel plant, AC drive solution for Tata Steel
Limited, first phase of SCADA system for Oil and Natural Gas Corporation, 80OXA
installation and safety system for Essar Group.
Exports for process automation system grew over 100%. Significant orders
for metals, minerals, turbo charging, cement and analytical products were
received from Indonesia, Malaysia, Singapore, Sri Lanka, Bangladesh and Middle
East. A large order for Rs 933 million was received for turnkey electrics and
automation solution for 5,000 tonnes per day for a cement plant in Jordan.
During the year a turbocharger service station was established at
Bangladesh.
With large number of 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 end
customers. With large order backlog, segment has challenge in timely execution
of orders, particularly from steel and cement sectors. Segment will continue to
remain customer focused to sustain its competitive advantage through constant
innovation and technology solutions. It will also focus on employee training,
strengthening of project management processes and safety. The overall business
outlook for the segment remains positive.
With significant investments taking place in industrial sector 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, formation of
business verticals and market penetration helped in registering 55% growth in
orders and 45% growth in revenues during the year.
During the year several orders for automation products were received from
steel, cement, paper, telecom, food and beverages, water and waste water and
oil and gas industries and OEMs. During the year the segment was able to
sustain and consolidate its market position for all its product ranges. There
was focus on all major OEM segments including HVAC, pumps and compressor,
boiler machinery manufacturers, food and beverages and wind sector. Segment has
received several large orders during the year from all sectors of the industry.
This includes orders from Tata Steel Limited for their Kalinganagar project,
JSW Steel Ltd. for their capacity expansion at Bellary and Bhusan Steel Limited
for their blast furnace project in the steel sector. An order for high current
rectifiers was received from Vedanta Aluminum Limited for 2 x 250,000 TPA
Greenfield aluminum smelter plant. Major orders received from cement industries
included Jayaprakash Industries Limited. The segment also received increased
orders from building electrical sector from telecom, IT and SEZ parks and other
infrastructure projects which resulted in over 100% growth from this
sector.
Execution and commissioning of large orders during the year included high
current rectifiers at Hindustan Zinc Limited, LID shop converter and sinter
plant at Tata Steel Limited. A 10 MW, 40 pole compressor motor for SAIL, Bokaro
was rewound and commissioned during the year.
Major capacity expansion projects under execution include LT motors and
instrumentation at Faridabad and machine service facility at Navi Mumbai.
Expansion and renovation of HV machines at Vadodara plant was completed during
the year and plant is operating at rated capacity of 100 machines per month.
Other capacity augmentation plans includes global factory for LV breakers, LV
systems, LV and MV drives and power electronics at Nelamangala, Bangalore and
wind generator motors factory at Vadodara. Product range expansion during the
year included manufacturing of R4 range of ACS 550 drives, testing and offering
of new series of EFF1 and EFF2 motors in small frames, for both domestic and
export markets. During the year 5 million MCB poles per annum capacity factory
was commissioned and operating at rated capacity at Haridwar.
The channel partner network was further expanded to over 775 during the
year which contributed to revenues of Rs 10 billion. 'E-initiatives' continued
to yield good results with the 3213 transactions crossing the Rs 4 billion mark
setting an industry benchmark. To ensure off the shelf deliveries and to be
nearer to the customers, during the year two new warehouses were established at
Faridabad and Pune.
Concern areas for the segment include increase in competition,
with several competitors building new capacities, and increase in commodity
prices. The industrial scenario continues to look buoyant with several new
Greenfield and brown field capacity expansions planned in several sectors. The
increased thrust on marketing efforts in newer areas of railways, wind, water
and waste water, SEZ, ports and harbours coupled with continued addition in
capacity and range expansion is expected to support business growth momentum of
the segment. The overall outlook for the segment remains positive.
Finance
During the year there was higher requirement of finance due to business
growth and delay in collection from customers, particularly relating to power
system segment, coupled with financing needs for large fixed assets investment
programme. This required sporadic short-term borrowings from the banks during
the year. However collection from customers improved in later part of the year
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 further
increased to Rs 6,423 million compared to Rs 5,449 million at the end of the
previous year. Surplus funds, not committed in operation, were deployed in
short-term fixed deposits with reputed banks, ensuring security and liquidity
of the fund. The Company continued to hedge all its foreign currency exposures
for imports and exports to protect contact stage margins. As in the past,
Company has maintained excellent relationship with major banks operating in
India and was able to negotiate favourable terms for various banking facilities
used.
Notes on account
- Nature of
Operations
ABB Limited ('the Company') has served utility and industry customers
for over 50 years with the complete range of engineering, products, solutions
and services in areas of Automation and Power technology. The Company has
extensive installed base for manufacturing and a countrywide marketing and
service presence. Besides catering to Indian domestic market, the Company is
also playing an increasing role in the global market.
Change in
Accounting Policies
The Company has changed its accounting policy for revenue recognition
for large transformers from recognition on dispatch basis to recognition on
achievement of contractual milestone basis, with effect from January 1, 2007.
This has resulted in additional revenue recognition and higher profit before tax of Rs 434,030 thousand and
Rs 60,002 thousand respectively with corresponding increase in 'Unbilled
Revenue' during the year ended December 31, 2007.
In current year, the Company has adopted Accounting Standard (AS) 15
(revised 2005), "Employee Benefits". Pursuant to the adoption, the transitional
obligations as at January 1, 2007, for Provident Fund and Other long term
benefits - Leave, amounting to Rs 50,955 thousand (net of tax) have been
adjusted against the opening balance of General Reserves. This change is not
having material impact on the profit for the current year.
Primary Segment Reporting (by Business Segments)
Composition of Business Segments
The Company's business segments are organized around products and system
solutions provided to its customers, which include utilities, industries,
channel partners and original equipment manufacturers.
Power Systems Segment (PS) offers turnkey systems and services for
transmission and distributions for power grid and power plants. The segment
offers the instrumentation, control and the entire balance of power plants,
which improve performance and energy efficiency through flexible alternating
current transmission systems (FACTS), high voltage direct current (HVDC)
systems, network management systems (SCADA) and utility communications.
Power Products Segment (PP) manufactures, engineers, supplies key
components to transmit and distribute electricity, improving power supply and
energy efficiency. The. segment produces transformers, high and medium voltage
switchgears, circuit breakers, capacitors, distribution relays etc.
Process Automation Segment (PA) provides customers with integrated solutions
for control, plant optimization and industry specific application knowledge.
The industries served include oil and gas, power, chemicals and
Pharmaceuticals, pulps and paper, metals and minerals, marine and turbo
charging.
Automation Products Segment (AP) provides products to improve customers'
productivity with high efficiency motors, variable speed drives, low voltage
products, instrumentation and power electronics.
Others Segment consist of robotics systems,
As at 31st
December
Amount due from companies under the same management as defined in
sub-section (1-B of section 370 of the companies Act, 1956, are as uner
(Rs. In Millions)
|
Particulars |
31.12.2007 |
31.12.2006 |
|
a) Sundry Debtors |
|
|
|
- ABB Global Services Limited |
42.171 |
13.751 |
|
- Raman Boards Limited |
3.891 |
-- |
|
b) Loan and Advances |
|
|
|
-ABB Global Services Limited (Maximum amount due during the year Rs.
75.129 Millions, Previous year Rs. 48.934 Millions |
62.583 |
48.934 |
|
-
ABB Holding (South Asia) Limited (Maximum amount due during the year Rs.
5.330 Millions, Previous year 5.330 Millions) |
-- |
5.330 |
|
-Raman Boards Limited ( Maximum amount during the year of Rs.
10.998 Millions, previous year Rs. Nil) |
6.537 |
-- |
(Rs. In Millions
|
Particulars |
31.12.2007 |
31.12.2006 |
|
Contingent Liabilities |
|
|
|
i) Claims against the Company not
acknowledged as debts in respect of sales tax, excise and other matters |
314.914 |
299.699 |
|
ii) Bills discounted The above excludes bills co-accepted by the
customers’ bankers/guaranteed by the State Governments Rs. 51.927 Millions (Previous year Rs. 143.491 Million |
0.719 |
9.486 |
|
iii) income tax matters in dispute |
272.981 |
371.803 |
|
Estimated amount of contracts remaining to
be executed on capital account and not provided for (net of advances) |
742.336 |
274.710 |
Fixed Assets:
- Freehold land
- Leasehold Land
- Leasehold Improvements
- Factory Buildings
- Other Building
- Residential Quarters
- Plant and Machinery
- Furniture and Fixture
- Vehicle
WEBSITE DETAILS:
Press Release:-
Bangalore, 3rd June 2008
Power solutions for improved system efficiency of JSW’s plant in Ratnagiri,
Maharashtra
ABB in India has won orders worth Rs 2950.000
Millions to provide power solutions for JSW Energy for its upcoming 4 x 300 MW
thermal power plant in Ratnagiri in the state of Maharashtra in Western India.
The orders are for a range of power solutions including, electrical balance of
plant, 400kV gas insulated switchgear (GIS) substation and generator
transformers.
ABB’s solutions for the project comprise several leading edge power
technologies for improved system efficiency. The modular eBoP solution for
300MW generating units will provide optimized and integrated solutions for
complete plant electricals including shunt reactors, bus ducts, control and
relay panels, MV and LT switchgear, other auxiliary systems and four 20kV
generator circuit breakers (GCB), thus providing a further boost towards GCB
scheme usages by thermal power plants in India.
The 400kV GIS substation will provide substantial space saving due to its
compact design. With all live parts enclosed and protected against negative
influences the gas insulated switchgear ensures enhanced operational
reliability and safety. ABB’s scope of delivery also includes 20/420 kV
generator transformers. ABB’s transformers are designed and manufactured for
high reliability, reduced life cycle costs and optimized electrical design for
minimized losses.
“We are proud of our long-standing partnership with the JSW Group. With this
order we continue to build on this relationship”, said Biplab Majumder, Country
Manager & Managing Director, ABB India, commenting on the order. “ABB’s
power products and systems will ensure safe and reliable operation of the plant
while optimizing energy consumption of the equipment,” he added.
JSW will feed the power produced through the power plant into the country’s
western grid. The JSW Group has a presence in the steel, power, cement,
aluminium, software and infrastructure sectors.
ABB (www.abb.com) is a leader in power and automation technologies that enable
utility and industry customers to improve performance while lowering
environmental impact. The ABB Group of companies operates in around 100
countries and employs more than 110,000 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.42.90 |
|
UK Pound |
1 |
Rs.83.76 |
|
Euro |
1 |
Rs.65.99 |
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 |
|