MIRA
INFORM REPORT
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Report Date : |
19.11.2008 |
IDENTIFICATION DETAILS
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Name : |
ESSAR POWER LIMITED |
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Registered Office : |
11, Kesavarao Khadye Marg, Mahalaxmi Essar House, 14th
Floor, Mumbai – 400034, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
30.10.1991 |
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Com. Reg. No.: |
063852 |
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CIN No.: [Company
Identification No.] |
U40100MH1991PLC063852 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
SRTE00047F |
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Legal Form : |
A Closely Held Public Limited Liability Company |
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Line of Business : |
Manufacturer, Exporter and Providing Service in Steel,
Power, Shipping, Constructions, Oil & Gas and Telecom. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 60000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is an important company of Essar Group managed and controlled
by Ruia brothers. Subject is a well established company having normal track. Trade
relations are fair. Subject’s current year and future performance is expected
to be affected due to global meltdown and recession in the industry. It may
ultimately affect the payment behaviours of the subject resulting in to
delay. The company can be considered normal for business dealings at usual
trade terms and conditions. |
INFORMATION PARTED BY
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Name : |
Mr. R. K. Sethi |
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Designation : |
Account Officer |
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Date : |
13.11.2008 |
LOCATIONS
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Registered Office : |
11, Kesavarao Khadye Marg, Mahalaxmi Essar House, 14th
Floor, Mumbai – 400034, Maharashtra, India |
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Tel. No.: |
91-22-24395066/ 66601100 |
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Fax No.: |
91-22-24954331/ 24954787 |
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E-Mail : |
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Website : |
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Factory : |
27th KM, Surat-Hazira Road, Hazira – 394270, Gujarat, India
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Tel. No.: |
91-261-2872400 |
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Fax No.: |
91-261-2872747 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Shashi N. Ruia |
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Designation : |
Chairman |
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Name : |
Mr. Ravi Ruia |
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Designation : |
Vice Chairman |
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Name : |
Mr. A. K. Srivastava |
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Designation : |
Managing Director |
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Name : |
Mr. Prashant Ruia |
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Designation : |
Director |
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Name : |
Mr. Anshyman Ruia |
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Designation : |
Director |
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Name : |
Mr. Rewant Ruia |
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Designation : |
Director |
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Name : |
Mr. S. V. Venkatesan |
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Designation : |
Director |
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Name : |
Mr. S. J. Coelho |
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Designation : |
Director |
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Name : |
Mr. R. K. Narayana |
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Designation : |
Director |
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Name : |
Mr. Mukul Kasliwal |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. T. S. Bhatt |
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Designation : |
Sr. Vice President (Technicals) |
BUSINESS DETAILS
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Line of Business : |
Manufacturer, Exporter and Providing Service in Steel,
Power, Shipping, Constructions, Oil & Gas and Telecom. |
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Products : |
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PRODUCTION STATUS (As on 31.03.2007)
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Generation of Electricity |
MW |
NA |
515 |
33870 |
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GENERAL INFORMATION
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
S. R. Batlibol and Company Chartered Accountant |
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Address : |
Mumbai, Maharashtra, India |
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Associates : |
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Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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900000000 |
Equity Shares |
Rs.10/- each |
Rs.9000.000 Millions |
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100000000 |
Preference Shares |
Rs.10/- each |
Rs.1000.000 Millions |
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Total |
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Rs.10000.000
Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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598500007 |
Equity Shares |
Rs.10/- each |
Rs.5985.000
Millions |
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Of the
above:
NIL Equity shares are held by Essar Global Limited Cayman,
the ultimate holding company
256520000 Equity shares are held by Essar Power Holdings
Limited subsidiary of the ultimate holding company.
217000000 Equity shares are held by Essar Steel Limited
subsidiary of the ultimate holding company.
30000000 Equity shares are held by ETHL Global Capital
Limited subsidiary of the ultimate holding company.
94970000 Equity shares are held by Essar Power (Jharkhand)
Limited subsidiary of the Company and of the ultimate holding company.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
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31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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5985.000 |
5985.000 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
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5182.200 |
4901.200 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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11167.200 |
10886.200 |
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LOAN FUNDS |
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1] Secured Loans |
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12824.600 |
13706.400 |
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2] Unsecured Loans |
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850.000 |
55.500 |
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TOTAL BORROWING |
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13674.600 |
13761.900 |
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DEFERRED TAX LIABILITIES |
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0.000 |
0.000 |
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TOTAL |
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24841.800 |
24648.100 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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11740.000 |
12504.400 |
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Capital work-in-progress |
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553.800 |
496.300 |
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INVESTMENT |
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7772.400 |
4898.000 |
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DEFERREX TAX ASSETS |
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114.000 |
114.700 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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640.700 |
527.800 |
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Sundry Debtors |
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4207.900 |
3214.600 |
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Cash & Bank Balances |
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1019.400 |
2988.800 |
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Other Current Assets |
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0.000 |
0.000 |
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Loans & Advances |
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1330.000 |
819.600 |
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Total
Current Assets |
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7198.000 |
7550.800 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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2525.200 |
901.200 |
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Provisions |
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11.900 |
17.000 |
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Total
Current Liabilities |
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2537.100 |
918.200 |
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Net Current Assets |
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4660.700 |
6632.600 |
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MISCELLANEOUS EXPENSES |
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0.900 |
2.100 |
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TOTAL |
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24841.800 |
24648.100 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
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31.03.2007 |
31.03.2006 |
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Sales Turnover |
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7499.900 |
6992.600 |
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Other Income |
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0.000 |
0.000 |
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Total Income |
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7499.900 |
6992.600 |
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Profit/(Loss) Before Tax |
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289.200 |
504.200 |
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Provision for Taxation |
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7.300 |
(6.800) |
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Profit/(Loss) After Tax |
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281.900 |
511.000 |
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Import Value |
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10.800 |
147.600 |
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Expenditures : |
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Cost of Goods Sold |
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3731.900 |
3137.100 |
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Operating, Maintenance and Other Expenses |
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859.800 |
647.300 |
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Interest |
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1434.500 |
1517.100 |
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Preliminary Expenses Written Off |
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1.400 |
1.400 |
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Depreciation & Amortization |
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1183.100 |
1185.500 |
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Total Expenditure |
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7210.700 |
6488.400 |
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PARTICULARS |
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31.03.2007 |
31.03.2006 |
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Debt-Equity Ratio |
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1.24 |
1.26
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Long Term Debt-Equity Shares |
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1.16 |
1.21
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Current Ratio |
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2.84 |
5.04
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TURNOVER RATIOS |
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Fixed Assets |
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0.33 |
0.31
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Inventory |
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12.83 |
13.25
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Debtors |
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2.02 |
2.18
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Interests Cover Ratio |
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1.16 |
1.29
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Operating Profit Margin (%) |
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43.48 |
48.64
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Profit Before Interests and Tax Margin (%) |
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27.69 |
31.69
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Cash Profit Margin (%) |
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19.56 |
24.26
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Adjusted Net Profit Margin (%) |
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3.78 |
7.31
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Return On Capital Employed (%) |
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8.39 |
8.99
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Return On Net Worth (%) |
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2.57 |
4.69
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LOCAL AGENCY FURTHER INFORMATION
OPERATIONS:
The Power Plant availability was at a high of 97% inspite of hot gas path inspection of two gas turbines & maintenance jobs on two boilers. The Plant Load Factor recorded a level of 77% despite low off-take from GUVNL during floods and non availability of Deemed Generation on sale of power to GUVNL with effect from July 2006.
FINANCE:
The Company placed commercial papers at competitive interest
rates thereby reducing cost of debts and improving profitability.
SUBSIDIARIES:
The Company has acquired/ incorporated the following
subsidiaries during the financial year 2006-07 for the purposes of furthering
business opportunities both in India and overseas.
- Bhander Power
Limited
- Essar Power M
P Limited
- Essar Hazira
Power SEZ Limited
- Essar Power
(Jharkhand) Limited
FOREIGN EXCHANGE EARNINGS / OUTGO
The
foreign exchange outgo during the year was Rs.25.300 Millions mainly on account
of purchase of stores & spare parts, travelling, consultancy charges and
repairs & maintenance of plant and machinery.
NATURE OF BUSINESS:
The Company has set up and
operates 515 MW Dual fuel fired combined cycle power plant located at Hazira,
Surat (Gujarat).
CONTINGENT
LIABILITIES
|
Description |
31.03.2007 (Rs. In Millions) |
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Guarantees given by the Bankers on behalf of the Company in respect of - Customs Duty, - Others |
42.600 3028.800 |
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Bills discounted with Bank (since realized Rs.250.000 Millions) |
250.000 |
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Income tax liability not charged to P&L account due to pending appeal cases. |
15.900 |
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Security given for loans obtained by Essar Oil Limited by pledge of Shares |
2142.900 |
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Disputed Tax on Sale of Electricity (excluding Interest). |
447.300 |
FIXED ASSETS:
- Land –
Freehold
- Building
- Plant and
Machinery
- Furniture and
Fixture
- Vehicles
- Aircraft
WEBSITE DETAILS:
PROFILE:
Subject operates five power plants with a combined capacity
of 1,200 MW in three locations across India. This includes two gas-based
plants, of 500 MW and 515 MW capacities, and one liquid fuel based 32 MW power
plant in Hazira, a 120 MW co-generation plant in Vadinar and a 25 MW coal-based
plant in Visakhapatnam.
Work is currently under way to increase generation capacity
to 6,000 MW. The company will set up three coal-based plants of 1,200 MW each
in Gujarat, Madhya Pradesh and Jharkhand, aggregating 3,600 MW. An additional
1,200 MW (co-generation plant of equivalent capacity) is also under development
in Vadinar to supply power and steam to the expanded refinery.
With a license to enter the transmission, distribution and
power trading segments, company is now a fully integrated, end-to-end player in
the Power sector. By using the latest technology and equipment, Company can generate
and supply power at very competitive price points. The company also has the
capability to execute power projects for other companies.
Company is exploring opportunities for new projects based on
thermal, wind and hydro energy. It is also committed to reducing emissions from
its plants and earning carbon credits. The 500 MW combined cycle power plant at
Hazira is eligible for Certified Emission Reductions (CERs) under the Kyoto
Protocol’s Clean Development Mechanism (CDM).
PRESS RELEASES
Pradeep Mittal joins
Essar Minerals as MD & CEO
November 07, 2008
Essar today announced the appointment of Mr. Pradeep Mittal as the Managing Director and Chief Executive Officer for its Mining Business – Essar Minerals Limited (EML). In his new role, Mr. Mittal will be responsible for developing and mining of coal and iron ore blocks that the Group has acquired.
Essar Group is currently implementing three coal based power plant with a capacity of 3600 MW and is expanding its steel capacity to 9.5 million tonnes in India. EML has been formed to meet the growing need for raw materials of the Group like coal, iron ore and other minerals.
Mr. Mittal brings with him a rich experience of over 30 years in his area of expertise in global energy and minerals trade.
Prior to joining the Essar Group, Mr. Mittal was with the Adani Group where he was Managing Director for their Mining and Coal Trading business, internationally. He is a commerce graduate and also holds a post graduate diploma in marketing.
About Essar
Essar Minerals, part of Essar Global Limited, has been formed to meet the raw
materials requirement for steel & power business. EML has coal and iron
blocks in Jharkhand, Madhya Pradesh, Karnataka and Chhattisgarh. It has a built
a dedicated team of well qualified and experienced mining engineers, geologists
and surveyors for mining exploration and development.
Essar Global Limited (EGL) is a diversified business corporation with a balanced portfolio of assets in the manufacturing and services sectors of Steel, Energy, Power, Communications, Shipping Ports & Logistics, Construction and Mining & Minerals. Essar employs more than 40,000 people across offices in Asia, Africa, Europe and the Americas.
Rajiv
Sawhney joins Essar as Chief Executive Officer, Telecom Business Group
MUMBAI,
INDIA - November 04, 2008
Essar today announced the appointment of Rajiv Sawhney as
Chief Executive Officer for its Telecom Business Group.
In his new role at Essar, Rajiv will oversee the entire
management for the Telecom Business Group which operates in a wide range of
business segments: telecom, telecom retail and telecom infrastructure.
Rajiv brings with him years of rich experience in the
telecom industry having worked with Hutchison Telecommunications for over a
decade in multiple roles and various locations across India and globally, the
last of which was as the Chief Executive Officer, PT Hutchison CP Telecom in
Indonesia. In India he has earlier worked with Hutchison Essar Telecom. He has
also worked with Jenson & Nicholson and Blow Plast India.
Rajiv has a Bachelor’s degree in Economics and is an alumnus
of Indian Institute of Management (Bangalore).
About Essar Telecom
Business
Essar Telecommunications holds 33% interest in Vodafone-Essar, a joint venture
with Vodafone Group and one of India’s largest cellular service providers with
more than 55 million subscribers. Essar Telecom also has investments in Econet
Wireless as it prepares for mobile network roll out in Kenya and in Obopay
Inc., the pioneering service provider for payments via mobile phones.
Essar owns ‘The MobileStore’ - India's first and largest
national chain of multi-brand and multi-service outlets in the telecom retail
space. It currently runs over 1060 “The MobileStore” outlets and over 2,500
stores outlets are expected across 600 cities in the next 3 years. Essar has a
major presence in the telecom infrastructure space with one of the largest
investments in tower companies. It builds telecom tower infrastructure and
shares it with several telecom operators in India. It has already set up over
3,500 towers in India.
About
Essar
Essar Global Limited (EGL) is a diversified business corporation with a
balanced portfolio of assets in the manufacturing and services sectors of
Steel, Energy, Power, Communications, Shipping Ports & Logistics,
Construction and Mining & Minerals. Essar employs more than 40,000 people
across offices in Asia, Africa, Europe and the Americas. Visit website
www.essar.com
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 records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.49.68 |
|
UK Pound |
1 |
Rs.74.64 |
|
Euro |
1 |
Rs.62.58 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
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|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
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--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
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. |
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 |
|