MIRA INFORM REPORT
|
Report Date : |
19.09.2008 |
IDENTIFICATION DETAILS
|
Name : |
ESCORTS LIMITED |
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Registered Office
: |
11, Scindia House, Connaught Circus - 110001, New Delhi |
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Country : |
India |
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Financials (as
on) : |
30.09.2007 |
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Date of
Incorporation : |
17.10.1944 |
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Com. Reg. No.: |
1860 |
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CIN No.: [Company
Identification No.] |
L74899DL1944PLC001860 |
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TAN No.: [Tax Deduction
& Collection Account No.] |
DELE00069G |
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PAN No.: [Permanent Account
No.] |
AAACE0074B |
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Legal Form : |
It is a public limited liability company. The company’s shares are listed on the
Stock Exchanges. |
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Line of Business
: |
Manufacturers of Agri Machinery, Auto-Components and
Railway Equipment. |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT
LINE |
||
|
26-40 |
B |
Unfavourable
& favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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Maximum Credit
Limit : |
USD 55000000 |
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Status : |
Moderate |
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Payment Behaviour
: |
Slow by above 45
days |
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Litigation : |
Clear |
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Comments : |
Subject is an
established diversified engineering company of large size. It has been
experiencing slightly difficult time since last 3 4 years as its profit
margin has been subsequently reduced and payments are reported as slow. The company has
already registered some accumulated losses. It’s financial position can be
regarded as moderate. The company can
be considered for normal business dealings at usual trade terms and
conditions with slight caution. |
LOCATIONS
|
Registered Office/Factory
: |
11, Scindia House, Connaught Circus - 110 001, New Delhi,
India. |
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Tel. No.: |
91-11-23310145 |
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Fax No.: |
91-11-23310271 |
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E-Mail : |
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Website : |
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Head Office/ Auto Suspension Products Divisions/ Administrative
office and components plant : |
18/4, Mathura
Road, Faridabad-121007, Haryana, India |
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Tel. No.: |
91-129-5284911 |
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Fax No.: |
91-129-5284802 |
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Head Office : |
19, Rajaji Salai
Chnnai-600001, Tamilnadu, India |
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Tel. No.: |
91-44-25342141 |
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Fax No.: |
91-44-25342493 |
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Corporate Office : |
15/5 Mathura Road, Faridabad – 121 003, Haryana |
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Plant : |
·
Plot No. 2, Sector 13, Faridabad – 121 007, Haryana ·
Plot No. 3, Sector 13, Faridabad – 121 007, Haryana ·
115, Sector 24, Faridabad – 121 003, Haryana |
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Knowledge Management Centre: |
15/5, Mathura Road,
Faridabad-121003, India |
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Tel No.: |
91-129-2250222 |
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Fax No.: |
91-129-2250102 |
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Engineering Division: |
Railway Equipment Division |
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Plot No. 115,
Sector-24, Faridabad-121005, India |
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Tel No.: |
91-129-2232371 |
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Fax No.: |
91-129-2283065 |
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Plot No. 9,
Sector 1, Intergrated Industrial Estate, Pant Nagar, Rudrapur District, Udham
Singh Nagar, Uttarchal-263145 |
DIRECTORS
|
Name |
Mr. Rajan Nanda |
|
Designation |
Chairman and Managing Director |
|
Age |
59 Years |
|
Qualification |
Senior Cambridge, Training in UK
and Germany |
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Experience |
41 Years |
|
Date of Joining |
03.04.1970 |
|
Previous Employment |
Harparshad & Company Limited
- Director |
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|
Name |
Mr. Anil Nanda |
|
Designation |
Vice Chairman and Managing
Director |
|
Age |
50 Years |
|
Qualification |
Senior Cambridge |
|
Experience |
30 Years |
|
Date of Joining |
01.07.1981 |
|
Previous Employment |
Intercontinental Travancore
(Private) Limited |
|
Other Directorships |
Goetze (India) Limited, G I
Power Corporation Limitecd, Goetze TP (India) Limited, G I Wind Power Company
Limited, AN-GIP Leather (India) Limited, Escorts Farms Limited, Akme Project
Limited, AN Enterprises Private Limited, Joint Investment Private Limited, GI
Insurance Services Limited |
|
|
|
|
Name |
Mr. Nikhil Nanda |
|
Designation |
Executive Director and COO |
|
Age |
30 years |
|
Qualification |
BBA |
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|
Name |
Mr. Y. H. Malegam |
|
Designation |
Director |
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|
Name |
Mr. Nilesh Kampani |
|
Designation |
Director |
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|
Name |
Dr. S. A. Dave |
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Designation |
Director |
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Qualification |
M.A. [Economics] Ph.D. |
|
Other Directorships |
1. HDFC Limited 2. Crisil Limited 3. SBI Gilts Limited 4. Future Software Limited 5. GIIC 6. Phoenix Township Limited 7. Captech Online Private
Limited 8. Quantum Information Services
Limited 9. Centre for Monitoring Indian
Economy Private Limited 10. Merchant Media Limited 11. Indo National Limited 12. Spice Corporation Limited 13. Spice Net Limited |
|
|
|
|
Name |
Dr. Fredie A. Mehta |
|
Designation |
Director |
|
Qualification |
Ph.D. in International Economics
from London school of Economics |
|
Other Directorships |
1. Siemens Limited 2. SKF Bearings India Limited 3. Goodlass Nerolac Paints
Limited 4. Tata Investment Corporation
Limited 5. Tata McGraw-Hill Publishing
Company Limited 6. Rallis India Limited 7. IVP Limited 8. Tata Precision Industries Pte
Limited |
|
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|
Name |
Dr. M. G. K. Menon |
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Designation |
Director |
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Qualification |
B.Sc., M.Sc., Ph.D., D.Sc
[h.c.], F.R.S. |
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Other Directorships |
Indfos Industries Limited |
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|
Name |
Dr. P. S. Pritam |
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Designation |
Director |
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Qualification |
M. A., LLB, Ph. D. |
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|
Name |
Mr. Jai S. Pathak |
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Designation |
Director |
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Qualification |
BA (History), BA (Law: Oxon), MA
(International Relations), LLM (Law: University of Virginia) |
|
Other Directorships |
IGate Global Systems Limited,
Timken India Limited |
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|
|
|
Name |
Mr. D. K. Mehrotra |
|
Designation |
Director |
|
Qualification |
B. Sc. (Hons) |
|
Other Directorship |
North Eastern Development
Finance Corporation Limited |
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|
|
Name |
Mr. N. R. Krishnan |
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Designation |
Director |
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|
Name |
Mr. S C Bhargava |
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Designation |
Director |
KEY EXECUTIVES
|
Name |
Mr. G. B. Mathur |
|
Designation |
Vice President – Law and Company Secretary |
|
Age |
54 years |
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Qualification |
B. Sc. ACS, LLB |
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Experience |
29 years |
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|
Name |
Mr. Devraj Singh |
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Designation |
Business Head |
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Tel. No. |
91-129-25284623 |
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E-mail |
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|
Name |
Mr. B. R. Prakash |
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Designation |
Head Marketing |
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Tel. No. |
91-129-25283299 |
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E-mail |
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|
Name |
Mr. D. K. Singal |
|
Designation |
Head-Operations |
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Tel. No. |
91-129-25286482 |
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E-mail |
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|
Name |
Mr. C. Grover |
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Designation |
Head-Technical |
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Tel. No. |
91-129-25280286 |
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E-mail |
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|
Name |
Mr. A. K. Kalra |
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Designation |
Head-Materials |
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Tel. No. |
91-129-25286888 |
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E-mail |
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|
Name |
Mr. Sunil Jain |
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Designation |
General Manager Exports and Marketing |
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Tel. No. |
91-129-25281556 |
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E-mail |
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|
Name |
Mr. A. Kansal |
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Designation |
Head - Plant Engineering |
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Tel. No. |
91-129-25286888 |
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|
Name |
Mr. Anand Suresh |
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Designation |
Head – Manufacturing Operations (AMG) |
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Age |
56 years |
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Qualification |
M. Tech., B. Tech., IIT |
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Experience |
31 years |
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|
|
Name |
Mr. Rakesh Chopra |
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Designation |
Business Head and Senior Vice President (AMG) |
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Age |
54 years |
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Qualification |
FCA(Engineering and Wales), MBA (Cranfield, UK) |
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Experience |
31 years |
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|
Name |
Mr. K S Hawaldar |
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Designation |
Head Operation RED- Engineering Division |
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Age |
54 years |
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Qualification |
BE Tech., Diploma in System Management |
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Experience |
31 years |
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|
Name |
Mr. Sriram Khattar |
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Designation |
VP-Corporation Strategic Planning and Corporate Affairs |
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Age |
46 years |
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Qualification |
B. Com., (Hons.), FCA |
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Experience |
22 years |
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|
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|
Name |
Mr. Sarkar M C |
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Designation |
Head – R and D (AMG) |
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Age |
57 years |
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Qualification |
BE Tech., M. Tech. |
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Experience |
34 years |
|
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|
Name |
Mr. Pratha Sarkar |
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Designation |
Vice President |
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Age |
53 years |
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Qualification |
B. Tech, MBA |
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Experience |
28 years |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.09.2007
|
Names of
Shareholders |
|
Percentage of Holding |
|
Promoters |
|
1.50 |
|
Persons acting in
concert |
|
29.12 |
|
Institutional
Investors |
|
41.00 |
|
Others |
|
28.38 |
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Total |
|
100.00 |
BUSINESS DETAILS
|
Line of Business
: |
Manufacturers of agri machinery, auto-components and
railway equipment. |
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Products : |
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Exports : |
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Countries : |
·
Australia ·
Botswana ·
Ghana ·
Mozambique ·
Namibia ·
Nepal ·
Poland, ·
South Africa ·
Sri Lanka ·
Tanzania ·
Turkey ·
USA. |
PRODUCTION STATUS
as on 30.09.2006:
|
Particulars |
|
|
Installed
Capacity |
Actual Production |
|
Agriculture
Tractors |
|
|
98940 |
52585 |
|
Internal
Combustion Engine |
|
|
98940 |
54366 |
|
Round and Fiat
Tubes |
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|
180000 |
82784 |
|
Double Acting
hydraulic Shock Absorbers for railway Coaches |
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|
36000 |
23108 |
|
Centre Buffer
Coupiers |
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|
1200 |
506 |
|
Automobile Shock
Absorbers , Telescopic |
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|
4000000 |
2078377 |
|
Brake Block |
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|
1800000 |
577158 |
|
All types of
brakes used by Railways |
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|
3600 |
5869 |
GENERAL INFORMATION
|
No. of Employees
: |
Around 7464 |
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Bankers : |
Ř
Standard Chartered Grindlays Bank Limited, New Delhi Ř
ABN Amro Bank, New Delhi Ř
Bank of America, NT & SA, New Delhi Ř
Bank of Baroda, New Delhi Ř
Citibank N.A., New Delhi Ř
Deutsche Bank, New Delhi Ř
Hongkong & Shanghai Banking Corporation, New
Delhi Ř
HDFC Bank Limited, New Delhi Ř
Punjab National Bank, New Delhi Ř
State Bank of India, New Delhi Ř
State Bank of Travancore, New Delhi Ř
United Western Bank Limited |
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Facilities : |
Notes: Convertible Debentures: Represent Part B
of 61455, 4.25% Secured Convertible Debentures of Rs. 9.900/- each issued and
allotted to Qualified Instaututional Buyers on 4th July, 2007
redeemable with in a peiod of 42 months from the date of issue. These
Debentures are secured exclusive charge on the specified property at Gujarat
an exclusive charge on the immovable assets of the company at site no.2 sector 13 Faridabad. Cash Credit including Working Capital Demand Loans
from Banks: Secured by
hypothecation of stocks and book debts on a pari-passu basis. Term Loan from, Banks Punjab National
Bank Rs. 892.400 Millions Secured by first
pari passu charge on immovable and movable assets IDBI Bank Rs. 133.700 Millions Secured by first
pari-passu charge on immovable and movable assets United Bank of
India Rs. 137.500 Secured by first
pari passu charge on the Company Fixed assets and second and sub servient
charge on immovable properties. State Bank of
Patiala: Rs. 650.000 Millions Secured by first
pari-passu charge created to be created on immovable and movable fixed
assets. The immovable
property provided as secured for these loans is other than assets exclusively
charged for debentures stated in note 1 above Axis Bank
Limited: Rs. 581.000 Millions Term Loans from others: Life Insurance
Corporation of India Rs. 4.200 millions Secured against
Insurance Policies Vehicle Loans are
secured against the Vehicles Financed
Rs. 3.100 millions
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Banking Relations : |
Satisfactory |
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Auditors : |
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Name : |
S. N. Dhawan and Company Chartered Accountants |
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Joint Venture : |
·
Carraro India
Limited ·
Hughes
Communications India Limited ·
Escorts Motors
Limited ·
Escorts
Consumer Credit Limited ·
Escortrac
Finance And Investment Private Limited ·
Escorts
Finance Investment And Leasing Private Limited ·
Har Prshad and
Company Private Limited |
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Memberships : |
Confederation of Indian Industry |
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Associates/Subsidiaries
: |
·
Goetze (India) Limited ·
Hughes Escorts Communications Limited ·
Escotrac Finance & Investment Private Limited ·
Escorts Finance Investment & Leasing Private
Limited ·
Escorts Auto Components Limited ·
Escorts Finance Limited ·
Yamaha Motor Private Limited (formerly Yahama Motor
Escorts Limited) ·
Long Agri Business LLC, U.S.A. ·
Pol-Mot Escorts Spoolka z.o.o. ·
Carraro India Limited ·
Escorts Mahle Limited ·
Escorts JCB Limited ·
Escosoft Private Limited ·
Escorts Motors Limited ·
Escosoft Technologies Limited ·
Escorts
Construction Equipment Limited Adress: Plot
No. 2, Sector-13, Faridabad-121007, India Tel No.:
91-129-2283073/ 2286694 Fax No.:
91-129-2283065 ·
Escorts
Automotives Limited ·
Escorts
Securities Limited ·
Escorts Asset
Management Limited ·
Escorts Claas
Limited ·
Escorts
Hospital and Research Centre Limited3 ·
Escorts Heart
Institute and Research Centre Limited ·
Escorts Heart
and Super Speciality Centre Limited, Amritsar, Punjab ·
Escorts Heart
Care Centre, Kanpur, Uttar Pradesh ·
Esconet
Services Limited ·
Cellnext
Solutions Limited ·
IServ India
Solutions Private Limited ·
Automatrix
India Private Limited ·
Escorts
Telecommunications Limited ·
Escorts Mobile
Communications Limited [ceased to be a subsidiary w.e.f. 10.06.2004] ·
Escorts
Construction Equipment Limited ·
Escosoft
Technologies Limited ·
Escorts
Research and Development Limited ·
Escosoft
Singapore Pte. Limited ·
Escorts Agri
Machinery Inc., USA ·
Esoft
[Mauritius] Holdings Limited ·
Escosoft
Technologies [UK] Private Limited ·
Escosoft
Technologies [USA] Limited ·
Escorts
Healthcare Services Limited ·
Escorts
Telecom Services Limited ·
Escotoonz
Entertainment Private Limited ·
Beaver Creeks
Holdings LLC ·
CA Escosoft
Limited ·
IFS Solutions
India Private limited ·
Farmatrac Tractors Europe Sp. Z.O.O. Address: UL,
Preezemyslowa 11, 11-700 Margowo, Poland Tel No.:
91-48-89-7412202 Fax No.:
91-48-89-7413633 ·
Farmatrac North
America, LLC Address: Post
Box-1139, 111, Fairview Street, Taraboro NC 27886, USA Tel No.:
91-252-8234151 Fax No.: 91-252-8234576 |
CAPITAL STRUCTURE
As on 30.09.2007
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
120000000 |
Equity shares |
Rs. 10/- each |
Rs.1200.000
Millions |
|
73000000 |
Unclassified
Shares |
Rs. 100/- each |
Rs.7300.000
Millions |
|
|
Total |
Total |
Rs. 8500.000 Millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
83693630 |
Equity shares |
Rs. 10/- each |
Rs.836.900Millions |
NOTES:
1 .Paid-up Capital includes :
(i) 18700 Equity Shares (previous year
-18,700) allotted as fully paid-up for consideration other than cash pursuant
to contracts,
(ii) Bonus Shares :
19434125 Equity Shares allotted before 1988
as fully paid-up by capitalising Share Premium of Rs. 2.200 millions and
General Reserve of Rs. 192.100 millions.
(iii) 3611610 Fully paid up Equity Share of
Rs. 10/- each allotted in exchange of equivalent of share Warrents, to a
Promoter Group Company. At the rate of Rs. 83.79 Per share, as approved by the
shareholders in the Annual General Meeting held on 31st March, 2006
(iv) 7794910 Equity Shares of Rs. 10 each
fully paid at a premium of Rs. 102/- per Equity Share and 54870 Equity Shares
of Rs. 10/- each fully paid up at premium of Rs. 102/- per Equity Shares
arising on conversion of Part A of 61455 4.25% Secured Convertible Debentures
(SCDs) of Rs. 100/- each issued and allotted to Qualified Instituional Buyers
on 4th July, 2007.
FINANCIAL DATA
[all
figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES
OF FUNDS |
30.09.2007 |
30.09.2006 |
30.09.2005 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
836.900 |
722.300 |
722.300 |
|
|
2] Share
Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves &
Surplus |
10352.800 |
9463.400 |
5459.000 |
|
|
4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
11189.700 |
10185.700 |
6181.300 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
4140.400 |
4225.400 |
4279.100 |
|
|
2] Unsecured
Loans |
311.000 |
1678.300 |
2405.400 |
|
|
TOTAL BORROWING |
4451.400 |
5903.700 |
6684.500 |
|
|
DEFERRED TAX
LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
15641.100 |
16089.400 |
12865.800 |
|
|
|
|
|
|
|
|
APPLICATION OF
FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net
Block] |
8537.200 |
8666.000 |
5134.600 |
|
|
Capital
work-in-progress |
134.000 |
214.700 |
65.400 |
|
|
|
|
|
|
|
|
INVESTMENT |
4251.300 |
4562.400 |
4970.400 |
|
|
DEFERREX TAX
ASSETS |
902.400 |
764.000 |
786.300 |
|
|
|
|
|
|
|
|
CURRENT ASSETS,
LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1584.900
|
1724.900
|
1259.400 |
|
|
Sundry Debtors |
3797.400
|
2927.500
|
1768.400 |
|
|
Cash & Bank
Balances |
1732.100
|
2157.200
|
1485.200 |
|
|
Other Current
Assets |
4.300
|
3.100
|
1.200 |
|
|
Loans &
Advances |
2152.100
|
1994.400
|
1750.500 |
|
Total Current
Assets |
9270.800
|
8807.100
|
6264.700 |
|
|
Less : CURRENT LIABILITIES &
PROVISIONS |
|
|
|
|
|
|
Current
Liabilities |
6066.500
|
5465.800
|
3519.400 |
|
|
Provisions |
1547.400
|
1623.500
|
1024.600 |
|
Total Current
Liabilities |
7613.900
|
7089.300
|
4544.000 |
|
|
Net Current
Assets |
1565.900
|
1717.800
|
1720.700 |
|
|
|
|
|
|
|
|
MISCELLANEOUS
EXPENSES |
159.300 |
164.500 |
188.400 |
|
|
|
|
|
|
|
|
TOTAL |
15641.100 |
16089.400 |
12865.800 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
30.09.2007 |
30.09.2006 |
30.09.2005 |
|
|
|
|
|
|
|
|
Sales Turnover |
20767.700 |
17507.700 |
12691.300 |
|
|
Other Income |
266.000 |
1320.400 |
5315.400 |
|
|
Total Income |
21033.700 |
18828.100 |
18006.7 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
[173.300] |
344.400 |
310.200 |
|
|
Provision for Taxation |
[108.900] |
154.400 |
[80.700] |
|
|
Profit/(Loss) After Tax |
[64.400] |
190.000 |
390.900 |
|
|
|
|
|
|
|
Export Value
|
2474.900 |
2267.200 |
1404.900 |
|
|
|
|
|
|
|
|
Imports Value |
|
|
|
|
|
|
Raw Materials |
NA |
59.100 |
|
|
|
Stores & Spares |
NA |
289.100 |
273.600 |
|
|
Capital Goods |
NA |
0.900 |
|
|
|
Others |
NA |
0.000 |
|
|
Total Imports |
NA |
349.100 |
273.600 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Material , Manufacturing and operating |
15883.400 |
13379.700 |
9558.900 |
|
|
Personnel |
2040.200 |
1587.000 |
1857.900 |
|
|
Sales & Administration |
2002.900 |
1771.200 |
1633.500 |
|
|
Interest |
513.900 |
691.500 |
1417.900 |
|
|
Bank & Finance Charges |
175.600 |
158.000 |
178.600 |
|
|
Depreciation |
449.700 |
395.500 |
528.600 |
|
|
Amortization of Miscellaneous expenditure |
75.500 |
75.000 |
90.900 |
|
Total Expenditure |
21207.000 |
18057.900 |
15266.300 |
|
QUARTERLY RESULTS
|
Year |
31.12.2007 1st Quarter |
31.03.2008 2nd Quarter |
30.06.2008 3rd Quarter |
|
Sales
Turnover |
4319.800 |
5314.700 |
5428.000 |
|
Other
Income |
0.000 |
0.100 |
0.300 |
|
Total
Income |
4319.800 |
5314.800 |
5428.300 |
|
Total
Expenditure |
4239.500 |
4878.400 |
5038.300 |
|
Operating
Profit |
80.300 |
436.400 |
390.000 |
|
Interest |
157.700 |
159.200 |
146.300 |
|
Gross
Profit |
[ 77.400] |
277.200 |
243.700 |
|
Depreciation |
23.100 |
109.000 |
100.300 |
|
Tax |
[41.200] |
71.400 |
50.300 |
|
Reported
PAT |
[59.300] |
96.800 |
93.100 |
KEY RATIOS
|
Year |
30.09.2007 |
30.09.2006 |
30.09.2005 |
|
Debt-Equity Ratio |
0.87 |
1.19 |
1.56 |
|
Long Term Debt-Equity Ratio |
0.54 |
0.63 |
1.13 |
|
Current Ratio |
1.04 |
0.96 |
1.05 |
|
TURNOVER RATIOS |
|||
|
Fixed Assets |
2.23 |
1.95 |
1.14 |
|
Inventory |
12.58 |
11.64 |
8.21 |
|
Debtors |
6.27 |
7.61 |
4.86 |
|
Interest Cover Ratio |
0.87 |
0.81 |
[0.42] |
|
Operating Profit Margin(%) |
5.82 |
6.57 |
[1.35] |
|
Profit Before Interest And Tax Margin(%) |
3.68 |
4.35 |
[5.39] |
|
Cash Profit Margin(%) |
2.07 |
1.06 |
[10.63] |
|
Adjusted Net Profit Margin(%) |
[0.06] |
[1.15] |
[14.67] |
|
Return On Capital Employed(%) |
0.00 |
6.00 |
[4.18] |
|
Return On Net Worth(%) |
0.00 |
[3.01] |
[26.19] |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject
was incorporated as a private limited company in October, 1944 at Lahore under
the name and style of Escorts (Agents) Private Limited and later converted into
a public limited liability company in December, 1959. Its' Company Registration
Number is 1860.
The
name of the company was changed to the present in January, 1980.
The
company was promoted by Mr. H. P. Nanda, as a private limited liability company
in October, 1944 at Lahore under the name Escorts (Agents) Private Limited and
later converted into a public limited company in December, 1959. The name was
changed to Escorts in January, 1960. The company is presently into production
of farm equipment automobile components, railway ancillaries, etc.
As
a part of restructuring its business, in 1994-95, the company hived off certain
divisions into separate entities -- Escorts Communications and Escorts
Construction Equipment whereby, manufacture of EPABX systems is being carried
on by Escorts Communications and the manufacture of construction equipment by
Escorts Construction Equipment. They are wholly owned subsidiaries of the company.
Other subsidiaries are Escorts Claas, Escorts Automotive, Escotel Mobile
Communications, Escorts Hospital & Research Centre, Escorts Agri Machinery
Inc, Escorts Motors, Escosoft Technologies Limited, IFS Solutions India Private
Limited, Cellnext Solutions Limited, Escorts Asset Management Limited and
Escorts Securities Limited. Escotel Mobile Communications Limited ceased to be
a subsidiary with effect from 10th June, 2004.
The
company decided to sell its entire equity holdings in the Mobile Telecom Subsidiaries,
viz. Escotel Mobile Communications Limited and Escorts Telecommunications
Limited to Idea Cellular Limited. With this divestment the company will totally
exited from Cellular Mobile business.
During the year 2004-05, Escorts Telecommunication Limited (ETL) was awarded
licenses to operate in the telecom circles of Punjab, UP (East), Rajasthan and
Himachal Pradesh. Further Subject had entered into an agreement with Idea
Cellular Limited to divest its shares in ETL in January 2004.
Escorts Construction Equipment Limited (ECEL), launched a 12T Vibratory Soil
Compactor in technical collaboration with Hamm AG, Germany to strengthen its
road compaction range during the year 2004-05.
Subject signed a MoU with Long Manufacturing (NC) Inc, North Carolina, USA for
a joint venture company, Long Agribusiness LLC, for manufacture, assembly and
sale of tractors. It expects to expand its exports and establish a long term
presence in the international markets through a part equity ownership and
management participation. The company has entered into exclusive
distributorship agreement with Traksan for sale of the company's Farmtrac-60
tractors in Turkey.
As
a part of new exports strategy, the company has decided to buy distribution
companies abroad for marketing tractors.
It has proposed to establish one or more companies abroad. The company's overseas investment plan is in
view to explore the possibility of establishing, manufacturing, trading, joint
ventures and other business operations overseas. It has signed a MOU with Long Manufacturing (NC) Inc., North
Carolina, USA for a joint venture company, Long Agribusiness LLC, for
manufacture, assembly and sale of tractors.
It expects to expand its exports and establish a long term presence in
the international markets through a part equity ownership and management
participation. The company has entered
into exclusive distributorship agreement with Traksan for sale of the company's
Farmtrac-60 tractors in Turkey.
The
Escorts Group is investing Rs. 3000 millions in the agri-machinery business. Of
this, Rs. 2000 millions would be invested in the tractor plant at Pune. It is also setting up a joint venture with
the Carraro Group of Italy, a world leader in axles and transmissions. Carraro holds a majority stake of 51% in the
joint venture, Carraro India, while balance is held by the company.
Subject
had plans to raise $ 400 millions through a 30-year bond issue in the overseas
market to fund its ambitious plans of new foreign acquisitions and to finance
its domestic expansion programme.
Besides, additional funds were required to meet its investment needs to
set-up a new manufacturing facility in Poland that would cater to the needs of
the European tractor market.
The
company has embarked upon Business Process Reengineering (BPR) in all its
plants, to match global standards which resulted in a quantum jump in quality
and productivity parameters.
Escorts
Heart Institute, the company's subsidiary is setting up another 200-bed heart
centre in Jaipur.
It
is planning to leverage this brand equity without comprising on the quality of
medical services. The Jaipur Hospital
will be set up at a cost of Rs. 800 millions and is expected to be completed
soon. The heart institute in Delhi and
Jaipur will be in addition to the existing general hospital at Faridabad.
Escorts
Heart Institute (EHI), Escort's subsidiary is setting up another 200-bed heart
centre in Jaipur, it hopes to set up a chain of cardiac care units in the
country. It is planning to leverage this brand equity without compromising on
the quality of medical services. The current facility in New Delhi is being
expanded from 225 beds to 321 beds. The heart institutes in Delhi and Jaipur
will be in addition to the existing general hospital at Faridabad. The
Faridabad hospital capacity was also expanded from 151 beds to 186 beds.
Escorts Heart Institute and Research Centre Limited (EHIRC), during the year
2004-05, acquired 100% paid up equity capital of Escorts Hospital and Research
Center Limited (EHRCL) running a multi-speciality hospital in Faridabad
(Haryana) and consequently, EHRCL became a subsidiary company of EHIRC.
During March 2005, Escorts Agri Machinery Inc, the wholly owned subsidiary of
the company has bought out its joint venture partner Farmtrac Tractors Europe
Spolka Zoo which is a Poland based company. The acquisition would enable the
company to expand its international base by increasing the reach of its
Farmtrac range of tractors into the extremely competitive Western European markets
and fast growing African, Asian and Latin American markets. The company is also
poised for aggressive growth in tractor exports as the announcement comes close
on the heels of the major order worth 8.56 million USD from the Ghana
government for tractors and other farm equipment.
DIRECTOR REPORTS:
The Company has
increased its sale of tractors from 47,612 to 53,235 units registering a growth
of 12% and the turnover has increased from Rs.17810.000 Millions to
Rs.21020.000 Millions this year registering a growth of 18%.
There has been sharp increase in input costs due to increase in the prices of
base metals. The same could not be recovered fully due to the competitive
market conditions, thereby, affecting margins. It is a matter of concern that this
overhang of increase in input costs continued throughout the year. The Company
is mitigating this difficult situation by adopting various measures including
aggressive cost, cutting, business process improvements and product
re-engineering. The Company has substituted its high cost short term debts with
long term loans arid reduced overall borrowings which will have a positive
impact in the coming years.
SHARE CAPITAL:
Promoter Group has subscribed to and have been allotted 36,11,610 Equity Shares
of Rs.10 each at a price of Rs.83.79 per Equity Share aggregating Rs.302.600
Millions in exchange for the share warrants issued to them in March 2006 in
terms of Preferential issue Guidelines of Securities and Exchange Board of
India (Disclosure and Investor Protection) Guidelines, 2000.
During the year, the company issued 36,11,610 share warrants to the promoter
group in accordance with the Preferential Issue Guidelines which are
exchangeable with equal number of Equity Shares at a price of Rs.124.05 per
share on or before 22nd May, 2008.
The Company has during the year made Placement of 77,94,910 Equity Shares of
Rs.10/- each for cash at issue price of Rs. 112/- per Equity Share aggregating
Rs.873.000 Millions and 61,455 Secured Convertible Debentures of Rs.10.000/-
each (SCDs) for cash at par aggregating Rs. 614.500 Millions to the Qualified
Institutional Buyers (QIBs) in terms of the SEBI Guidelines. Part A of SCDs of
Rs.100/- each was converted into 54,870 Equity Shares @ Rs.112/- per Equity Share
immediately on allotment and Part B of SCD of Rs.9,900/-each is redeemable as
per the terms of the issue within 7th to 42nd months of the allotment.
Consequent upon the aforesaid allotments the paid up share capital of the
company was Rs.83,69,36,300 as on 30th September, 2007.
Hon'ble High Court of Delhi has directed the Company to place shares of Escorts
Limited @ Rs. 94/- per share, face value of which is Rs. 10/-, to the tune of
Rs. 70.000 Millions at the disposal of the Committee appointed by the Hon'ble
Court on 19th October, 2006 read with order dated 18th December, 2006, to
provide relief to certain depositors of Escorts, Finance Limited who have been
identified as hardship cases by the Committee. The Company has complied with
the directions and allotted 7,44,681 Equity Shares to the Court appointed
Committee on 12th December, 2007.
MANAGEMENT
DISCUSSION AND ANALYSIS
- Overview:
(A) Agri Machinery Business:
The Agri Machinery Business, which is the main business of the Company, has demonstrated
strong performance for the second year in a row in its path to recovery. The
strong performance is evident from growth of 12% in sales volume from 47,612 to
53,235 tractors.
a) Business Strategy:
The Company successfully leveraged business strategy it had launched year
before to attain growth in both domestic and international markets. The Company
has focused on grass root market research and activity so as to be able to
deliver true product value to various consumer segments. This effort is ongoing
and is expected to continue to deliver results. The concurrent action plans of
product development to address the latent customer and market needs at
profitable contributions will facilitate improved performance in the coming
years.
b) Sales & Marketing:
The exercise undertaken in repositioning the both Farmtrac & Powertrac
Brands in a complimentary manner was successfully implemented in the current
year. The emphasis on 'Reach and Access' continued to be pronounced, resulting
in the Company's dealer network being amongst the largest in the Indian tractor
industry. Focus was on strengthening the Channel in a multi-dimensional manner
in terms of financial fundamentals, grass root level reach, After Sales Service
and parts operations. The strong product offering through this strengthened
channel, enabled them to buck the trend and post a growth of 13.4% in a
domestic market that de-grew by 0.2%.
c) Exports:
`Farmtrac' is a preferred brand in several leading global markets including
America. Poland and South Africa. Alongside seeking out growth and visibility
in international markets, the Company intends to constantly consolidate its
efforts and activities in international markets to achieve specific volume.
Exports margins have been affected during the year due to the steep
appreciation of Rupee vis-a-vis US Dollar. The Company is focusing on markets
benchmarked to the Euro so as to be able to withstand any further devaluation
in the US Dollar.
d) Materials Management:
The
focus has been on Vendor Development and de-bottlenecking of capacity issues at
existing vendors. Creation of alternative vendors has allowed them to focus on
competitive cost and delivery efficiency. The accent has been on nurturing
vendor partnerships and development of long term "Win - Win"
partnerships with strategic suppliers. All these mark a shift in procurement
culture from "Transactional" to "Strategic". Additionally,
there has been a tremendous stress on support for value engineering
exercises.
e) Manufacturing Operations:
Production at
52,585 scaled a new high. The company is now capable of producing 98,940
Tractors per annum on a 2 shift basis i.e. a 37% increase over the previous
capacity of 72,000 Tractors per annum from the same assets. This is concurrent
with flexible manufacturing norms allowing model mix inter-changeability across
plants and flexibility in engine assembly to enable the manufacture of new
advanced engines.
With the objective of delivering new products and improvement in operations for
existing products, several major projects have been initiated like:
·
New machining centre for transmissions which will
enable the launch of a brand new series of tractors ire higher HP range.
·
New facility for Cylinder block machining and Cylinder head
assembly for engine manufacturing.
The Company has
during the current year intensified initiative of Quality, both pre-delivery as
well as in the field, so as to ensure total customer satisfaction. The Company
has cascading Total Quality Management as a culture which ensures continuous
improvement in Quality, Productivity and Processes.
Industry Outlook:
The key drivers of the Industry, namely monsoon, crops and minimum support
price; coupled with the Government's focus on agriculture development with
special emphases on irrigation; yield improvement and increasing area of
cultivated land augurs well for the Tractor Industry. Banks are likely to
enhance credit disbursement in line with the Government's policy of increasing
Rural and Farm Credit. The Company is well positioned at the development
manufacturing and market end to achieve sustained growth and deliver maximum
value to the customer. The company is repositioning its products like any other
Automobile manufacturer to create a niche for itself.
The Indian Tractor Industry, after having witnessed strong double digit growth
for three consecutive years, slowed down this year with a nominal growth of
2.20% in the period October 2006 - September 2007. The domestic market de-grew
nominally by about 0.2% while the export market grew by 27.5% resulting in an
overall growth of 2.2% for the period October 06 to September 07. This marginal
growth was mainly on account of change in the norms of tractor financing by the
PSU banks, lower minimum support prices and irregular scattered rains.
OPPORTUNITIES AND THREATS:
The tractor density per hectare continues to be low in India in comparison to
Western Standards of the US and Europe. This indicates the relatively lower
level of 'Tractorisation - and thereby ample scope, for growth The increasing
proliferation of tractor usage for specialised applications and wasteland
development adds mother advantageous dimension to the available opportunities
for growth. international markets continue to present significant opportunities
in virgin markets which the Company is actively pursuing. This growth however
would have its threat of managing multi locations internationally and this is a
skill the management teary, Is constantly investing in.
FIXED ASSTES:
·
Land Freehold
·
Building
·
Plant and
Machinery
·
Vehicles
·
Leasehold
Improvements
·
Prototypes
·
Technical Know
how
·
Software
Development
·
Capital Work in
progress
·
Capital Advances
The company has joint ventures
with:-
·
Goetze (India) Limited
·
Hughes Escorts Communications Limited
·
Escotrac Finance & Investment Private Limited
·
Escorts Finance Investment & Leasing Private
Limited
·
Escorts Auto Components Limited
·
Escorts Finance Limited
·
Yamaha Motor Private Limited (formerly Yahama Motor
Escorts Limited)
·
Long Agri Business LLC, U.S.A.
·
Pol-Mot Escorts Spoolka z.o.o.
·
Carraro India Limited
·
Escorts Mahle Limited
·
Escorts JCB Limited
·
Escosoft Private Limited
·
Escorts Motors Limited
The company is in trade terms with :
·
Agro Engineering
Works
·
Asiad
Engineering Works
·
Allena Auto
Industries Limited
·
Amar Udyog
·
Amar Engineering
Works
·
Auto Trac
Engineers
·
A. R. Industries
Private Limited
·
Alhind Metal
Industries
·
Auto &
General Castings
·
B. S. Industrial
Company
·
BVA Auto Private
Limited
·
Brytax Auto
Industries Limited
·
Centrifugal
Casting Company
·
Coolwels
Automobile Engineers
·
A. R. Industries
Private Limited
·
Super Alloy Cast
·
Tightwell
Fastners
·
D. P. Auto
Industries
·
Duro Engineers
Works
·
Delite Auto
Products
·
Delhi Forge
Limited
·
Delight
Pressings
·
Lakhani Rubber
Works
·
Lumax Filters
Private Limited
·
Modern Machine
Tools
·
Hi-Lux
Automotive Private Limited
·
Jayem Auto
Industries Private Limited
·
Bhatia
Electricals Private Limited
·
Bajwa Appliances
Private Limited
·
Metal Pressing
& Engineering Works
·
A.J. Tech
Equipment
·
A.P. Engineering
·
Akme Engineering
Works, Kolkata
·
Akai Metal
(India)
·
Jaico Steel
Fasterners Limited
·
Jayem Auto
Industries Private Limited
·
Kamal
Enterprises
·
Kunaal
Automotive Components
·
Royal Tools
(India)
·
S K Tools
·
S K Engineering
·
Saroj Iron
Industries
·
Sawan Industries
·
Sethi Industries
Corporation
·
Spire India
·
Pee Cee
Engineering
·
Rahul Induction
Private Limited
·
Vallabh
Industries
·
New Pragati
Udyog
·
Nobel
Engineering Works
·
Amritsar Machine
Tools
·
Shivon
International
·
Steerwels
·
Motoren
Industries
·
Luxmi Automats
·
Padam Engineers
·
Delight
Pressings
·
J. K. Engineers
·
Jai Industries
·
Roop Polymers
Limited
·
Yogesh Engineering
Works
WEBSITE DETAILS:
Profile:
The Escorts Group, is among India's leading
engineering conglomerates operating in the high growth sectors of
agri-machinery, construction & material handling equipment, railway
equipment and auto components.
Having pioneered farm mechanization in the country, Escorts has played a
pivotal role in the agricultural growth of India for over five decades. One of
the leading tractor manufacturers of the country, subject offers a
comprehensive range of tractors, more than 45 variants starting from 25 to 80
HP. The company and Powertrac are the widely accepted and preferred brands of
tractors from the house of Escorts.
A leading material handling and construction equipment manufacturer, they
manufacture and market a diverse range of equipment like cranes, loaders,
vibratory rollers and forklifts. Subject today is the world's largest Pick 'n'
Carry Hydraulic Mobile Crane manufacturer.
Subject has been a major player in the railway equipment business in India for
nearly five decades. Their product offering includes brakes, couplers, shock
absorbers, rail fastening systems, composite brake blocks and vulcanized rubber
parts.
In the auto components segment, Subject is a leading manufacturer of auto
suspension products including shock absorbers and telescopic front forks. Over
the years, with continuous development and improvement in manufacturing
technology and design, new reliable products have been introduced.
The Escort Group
has also been operating in the ITES and financial services sectors.
Throughout the evolution of Subject, technology has always been its greatest
ally for growth. In the over six decades of their inception, Subject has been
much more than just being one of India's largest engineering companies. It has
been a harbinger of new technology, a prime mover on the industrial front, at
every stage introducing products and technologies that helped take the country
forward in key growth areas. Over a million tractors and over 16,000
construction and material handling equipment that have rolled out from the
facilities of subject , complemented by a highly satisfied customer
base, are testimony to the manufacturing excellence of subject. Following
the globally accepted best manufacturing practices with relentless focus on
research and development, subject is today in the league of premier corporate
entities in India.
Technological and business collaboration with world leaders over the years,
Globally competitive indigenous engineering capabilities, over 1600 sales and
service outlets and footprints in over 40 countries have been instrumental in
making Escorts the Indian multinational. At a time when the world is looking at
India as an outsourcing destination, Subject
is rightly placed to be the dependable outsourcing partner of world's
leading engineering corporations looking at outsourcing manufacture of engines,
transmissions, gears, hydraulics, implements and attachments to tractors, and
shock absorbers for heavy trailers and armored tanks.
In today's Global Market Place, Subject is fast on the path of an internal
transformation, which will help it to be a key driver of manufacturing
excellence in the global arena. For this they are going beyond just adhering to
prevailing norms, they are setting their own standards and relentlessly
pursuing them to achieve their desired benchmarks of excellence.
AGRI MACHINERY
Background
·
In 1960, Escorts set up the strategic Agri Machinery Group
(AMG) to venture into tractors.
·
In 1965, they rolled out the first batch of tractors under
the brand name of Escort.
·
In 1969 a separate company, Escorts Tractors Ltd., was
established with equity participation of Ford Motor Co., Basildon, UK for the
manufacture of Ford agricultural tractors in India. 
·
In the year 1996 Escorts Tractors Ltd. formally merged with
the parent company, Escorts Ltd 
·
Since inception, they have manufactured over 1 million
tractors.
Technologies
·
Escorts AMG has three recognized and well-accepted tractor
brands, which are on distinct and separate technology platforms.
·
Farmtrac: World Class Premium tractors, with
single reduction and epicyclic reduction transmissions from 34 to 75 HP.
·
Powertrac: Utility and Value-for-money
tractors, offering straight-axle and hub-reduction tractors from 34 to 55 HP.
India’s No.1 economy range – engineered to give spectacular diesel economy.
·
Escort: Economy tractors having hub-reduction
transmission and twin-cylinder engines from 27 to 35 HP. Pioneering brand of
tractors introduced by Escorts with unbeatable advantages.
International Subsidiaries
·
Escorts AMG has two international subsidiaries.
·
Farmtrac North America LLC in the U.S.A
·
Farmtrac Tractors Europe Sp.z o.o.in Poland.
·
They now cater to 41 countries.
Fuctional Excellence
·
Manufacturing
·
Quality Assurance
·
Materials Management
·
Sales & Marketing
·
Knowledge Management
·
Finance
·
Human Resources
·
Information Technology
Beyond manufacture,
Escorts has made substantial investments towards the modernisation of farm
technology. The Escorts Institute of Farm Mechanisation (EIFM) at Bangalore is
a unique center where training is imparted in operation, maintenance and repair
of farm machinery. It is among the few institutions of its kind in the world.
Its programs are aimed at encouraging customers, dealers, engineers, mechanics
as well as the field staff of Escorts, towards meeting its objective of
enhancing agricultural productivity and improving quality of life in rural India.
KNOWLEDGE MANAGEMET
The Escorts
Agri-Machinery Group Knowledge Management Centre, set up in 1976, has a history
of over twenty-nine years. It is spread over 100000 Sq M (23 acre) area. It is
equipped with modern facilities set up with an investment of over US $ 7.5
million.
It designs the entire tractor, defined as engine, transmission plus hydraulic
systems and Vehicle design consisting of sheet metal (including styling) plus
controls and accessories.
Virtual prototypes of components and aggregate assemblies are made and
assembled on computer workstations using 3D technology. The performance is
checked on computers using simulation techniques thus saving a lot of time for
the end-user as well as lowering development costs. The KMC uses advanced
3D-modeling, analysis and simulation software for engines, transmissions and
vehicles. Physical prototypes are then extensively tested for performance,
durability and reliability.
The facilities include a high-technology engine laboratory featuring fully
computerized test beds with online control, data acquisition and analysis. they
can test engine emissions for meeting the Bharat TREM norms, US Environmental
Protection Agency (EPA) norms and European (Euro) norms. Additional
capabilities of the engine lab are engine performance, durability, reliability,
tribology and fluid dynamics studies. An advanced vehicle testing laboratory
includes fatigue testing, dynamometer testing for chassis and power-take-off,
and smooth as sell as torture test tracks. Other facilities include Noise
Vibration and Harshness (NVH) Lab., Metrology Lab., and Materials Engineering
Lab. Product styling is carried out in a computerized virtual environment,
which is supported by a model-making shop for physical prototypes.
In addition to multi purpose tractors ranges, a variety of special-purpose
tractors have been developed for industrial applications as also
non-agricultural applications like Haulage, Airport, potato and vineyard
cultivation.
Escorts
manufacturers and markets a diverse range of construction and material handling
equipment like cranes, loaders, vibratory rollers and forklifts. The company
was a pioneer in introducing the concept of Pick 'n' Carry hydraulic mobile
cranes in the 70s in India and continues to be the world's largest manufacturer
of these cranes.
CONSTRUCTION EQUIPMENTS
Escorts manufacturers and markets a diverse range of construction and material
handling equipment like cranes, loaders, vibratory rollers and forklifts. The company
was a pioneer in introducing the concept of Pick 'n' Carry hydraulic mobile
cranes in the 70s in India and continues to be the world's largest manufacturer
of these cranes.
A nationwide network of 16 Sales Offices, 50 dealership locations, over 300
company trained dealers’ service engineers, gives it the best market reach in
India for the Sales & Service of material handling and construction
equipment.
With over 30 years experience in Construction Equipment Industry, Escorts has a
proven track record in :
·
Hydraulic Mobile Cranes
·
Loaders 
·
Forklifts 
·
Vibratory Compactors
Today, it not only continues to be the largest mobile crane manufacturer in
the country, but also the largest Pick ‘n’ Carry Hydraulic Mobile Crane
manufacturer in the world.
While recording a rapid growth in Crane Industry they’ve also been able to
steadily increase the presence in the field of Vibratory, Soil & Tandem
Compactors. Escorts was the first to bring the concept of Vibratory Compactors
in India in a big way, back in 80’s. Subsequently more models in Tandem
Vibratory Compactors and heavy duty Soil Compactor range were added in
technical collaboration with HAMM Germany. Recently, they’ve further
strengthened the range with a 3T Shoulder Compactor. Today the range of
compaction equipments is one of the most preferred in the market, and is being
viewed as the most efficient and effective compaction solutions available in
the country.
Along with Cranes and Compactors, they also manufacture Frontend loaders with
payload capacity of 700kgs. Suitable for narrow lanes and confined spaces,
these loaders are compact in design and are ideal for garbage handling, handing
of chemicals, sands, small chips, etc.
Escorts also offers other material handing solutions like Forklifts from Daewoo
Doosan Infracore Ltd., Korea and Articulated boom cranes from Fassi, Italy. In
LPG Forklift category, the company enjoys a market share in excess of 85%.
This single-minded pursuit of precision and customer satisfaction has made us
the 3rd largest in terms of Construction Equipment Sales unit per annum.
Milestones
1947
After
partition the Registered office of the Company was shifted from Lahore to New
Delhi. The name of the Company was changed from Escorts (Agents) Private
Limited to Escorts Limited upon its conversion into a public limited liability
company.
1959
The
company was incorporated on 21st December, at Lahore. The Company manufactures
motor cycles, tractors, automotive parts, railway shock absorbers, agricultural
implements, X-rays equipment, heating elements, etc.
The
company has been functioning as a representative of well-known foreign
manufacturers like M.A.N. Company of the USA, Massey Ferguson of the United
Kingdom and Canada and several others.
The
company had an all-round sales and service organization and has put up in
conjunction with Garden Reach Workshops, Kolkata, a marine service base for servicing
ocean going vessels equipped with M.A.N. promulsion and auxiliary engines. The
company had a network of all-India dealers for sale of products manufactured by
itself and by its subsidiaries.
Capital
structure reorganized. Equity and `A' Equity shares converted into one class of
Rs. 10/- each. 200 Preference shares were subscribed for. 2,000 Preference and
17,500 No. of Equity shares allotted to Mahle Komm-Ges, West Germany, against
supply of machinery and technical know-how. The remaining shares issued as
rights. The new preference shares redeemable after 5 years from the date of
issue at the company's option.
1960
The
Company commenced the manufacture of pistons and established at Bahadurgarh,
near Patiala, in collaboration with Mahle Komm-Ges Bad Constant, West Germany.
The
company undertook a phased expansion of the installed capacity of pistons from
7,21,000 to 10,80,000 numbers per annum and the installed capacity of piston
pins from 6,60,000 to 9,90,000 numbers per annum.
1962
The
company commenced commercial production of X-ray equipment, railway shock
absorbers and heating equipments in technical collaboration with the
Westinghouse Trading Company (Asia) Limited, New York, Eheimmetall GmbH, West
Germany and Eltra K. G., West Germany respectively.
1965
The
Company entered into a technical collaboration agreement for the manufacture of
transmission and gears for Escort tractors with Motoimport Warszawal, Poland,
by outright purchase of drawings.
The
company acquired near its existing plant at Faridabad, an area of 23 acres
together with 55,000 sq. fts. of built-up space at a cost of Rs 4.300 millions
for scientific research activities.
1968
1,229 Preference shares in 1968 and
336 Preference shares in 1969 subscribed for. In December, 1969, 580, 608 Bonus
Equity shares issued in proportion 1:4. 25,000 9.5% `A' Preference shares
offered to public in August, 1969 (redeemable on 15-8-1981).
1970
580,608 Right Equity shares issued
at a premium of Rs. 4/- per share in the proportion 1:5.
1973
The company undertook to set up a
100% export oriented unit for the production of X-ray equipment in the
Santacruz project area, in collaboration with Compagnie General de Radiologie
who brought over Westinghouse Manufacturing Company, under the name CGR India
Limited, was incorporated.
1974
1741824 Bonus Equity shares issued
in the proportion 1:2.
1977
3135283 Bonus Equity shares issued
on 31-12-1977 in proportion 3:5.
1978
The following contracts were secured
for execution (i) Farm implements manufacturing plant, (ii) Bicycle assembly
plant and (iii) Raw material sold to support PVC plant.
1979
The company concluded an agreement
with Andhra Pradesh Scooters Limited, to produce Rajdoot motorcycles in their
plants at Hyderabad for distribution in Southern States. The company was to
undertake, in due course, production of scooters for Andhra Pradesh Scooters
Limited, for distribution in Northern States.
50,16,453 bonus equity shares issued
in prop. 3:5. 1980
A new tractor model Escort-345 was
introduced in the first quarter of the year.
1981
Towards the end of the year,
Escort-355 tractor with three cylinder and 47 HP engine was introduced.
1985
The
Company commissioned a project for the manufacture of 1,50,000 - 100 cc motor
cycles per annum in technical collaboration with Yamaha of Japan.
Other
products proposed to be manufactured were paddy transplanters, a small size
tractor in collaboration with Japan, boilers and other equipment for collection
of bio-mass from straw and other agricultural wastes.
Government
approval was obtained for a new range of road construction machinery i.e. paver
finishers butimen distributors, aggregate spreaders, pavement profilers, etc.
Approval was sought for the manufacture of vibratory compactors in
collaboration with Dynapac of Sweden.
During
July the Company issued 20,00,000 - 15% non-convertible debentures of Rs. 100/-
each for Rs 200 millions and offered them as rights to its resident Indian
equity shareholders. The Company allotted a further 10,00,000 - 15% debentures
to retain the excess subscription. Rs 279.000 millions out of this issue of Rs.
300.000 millions was utilized for working capital and the balance Rs 21.000
millions for normal capital expenditure.
1986
The
company undertook expansion of the installed capacity of shock absorbers to 15
lakh numbers, in technical collaboration with Bilstein AG of West Germany. The
Company also introduced disk brakes for Indian Railways.
It
was proposed to introduce tractors with engine capacity below 1,800 cc for
which excise duty exemption was announced.
The
company entered into a technical collaboration agreement with Mercury Marine
(Brunswick Group), U.S.A. for the manufacture of 24,000 outboard motors per
annum.
The
company established facilities for the manufacture of nearly 5,000 line sets of
electronic telephone exchanges (EPABX) in collaboration with Jeumant Schneider
of France.
The
company proposed to manufacture the fuel-efficient Citroen 2 CV (6) car in
collaboration with Citroen of France.
During
February 15% secured redeemable debentures of the aggregate value of Rs. 50
millions were privately placed with Army Group Insurance Fund.
1987
During
June the Company issued 10,00,000-12,5% fully convertible debentures of Rs.
350/- each. Out of this, 3,00,000 debentures were offered to the existing
equity shareholders of the Company as rights in proportion 1 Debentures : 71
No. of Equity shares (all were taken up).
Out
of the remaining 7,00,000 debentures, the following debentures were reserved
for preferential allotment; (i) 50,000 debentures to employees and working
directors of the Company and (ii) 1,40,00 debentures to non-resident Indians on
repatriation basis. The remaining 5,10,000 debentures, along with the
unsubscribed portion of 1,03,085 debentures were offered for public
subscription during June.
Additional,
2,50,000 debentures were allotted to retain over subscription. (75,000
debentures to equity shareholders of the Company and 1,75,000 debentures to the
public).
As
per the terms of the issue, on 31st December, Rs 175 was converted into 5 fully
paid-up equity shares of Rs 10 each at a premium of Rs. 25/- per share and on
30th June, 1988, the remaining Rs. 175/- was converted into 5 fully paid-up
equity shares of Rs 10 each at a premium of Rs 25 per share.
80,26,325
bonus equity shares issued in proportion 3:5 and were allotted on 30.3.1987.
All Preference shares redeemed on 30.11.1987. 62,50,000 No. of equity shares
allotted (premium Rs. 25/- per share) on 31.12.1987 in conversion of
debentures.
1988
62,50,000 No. of Equity shares
issued (prem. Rs 25/- per share) in conversion of 12.5% debentures.
1990
The company privately placed with
financial institutions 35,00,000-14% secured redeemable non-convertible
debentures of Rs. 100/- each. The debentures were redeemable in three equal
instalments on the expiry of the 6th, 7th and 8th
years from the date of allotment of the debentures.
1994
The new products i.e., 3 cylinder
engine tractor and a 50cc Moped were launched.
1995
Escorts
40 H.P. and two models of Farmtrac, VIZ 50 and 60 H.P. tractors were
introduced. The Company combined all synergistic product activities in Escorts
group of companies into independent and autonomous entities.
Escorts
Tractors Limited was merged with the company effective 1st April. The
shareholders issued 3 equity shares of the company for every two equity shares
of erstwhile Escorts Tractors Limited. Accordingly 227,75,452 No. of equity
shares of the company was allotted.
Escorts
JCB Limited, Escorts Class Limited, Escorts Automotive Limited, Escorts Herion
Limited, Escorts Communications Limited, Escorts Construction Equipment Limited,
Escorts Finance Investments and Leasing Limited are all subsidiaries of the
Company.
27,04,226
No. of Equity shares (prem. Rs 130.17) allotted to promoters on conversion of
warrants. 22,775,452 shares allotted to shareholders of erstwhile Escorts
Tractors Limited.
1996
The
company proposed to set up a joint venture company with equity participation
from Mahle GmbH (Germany). Piston manufacturing activity of the company was
proposed to be transferred to the said joint venture company.
The
company has decided to form a joint venture to manufacture shock absorbers.
Company is at advanced stage of negotiations with COFAP of Brazil.
Company
has decided to Spun off Escorts Hospital & Research Centre into a separate
corporate entity.
The
Escorts Employees Ancillaries Limited manufactures carburettors presently
catering to the needs of Rajdoot motorcycles. More components like nipples,
spokes, etc., were being added with technical know-how from Japanese
manufacturers.
56,56,381
No. of equity shares allotted on conversion of warrants at a price of Rs. 35/-
per share.
1,24,059
No. of equity shares allotted on conversion of warrants issued to the
shareholders of erstwhile, Escorts Tractors Limited at a price of Rs. 33.33/-
per share.
1997
The
Company undertook to set up a tractor plant with a capacity of 18,000 tractors
p.a. with a total cost of Rs. 2000 millions at Ranjangaon in Maharashtra.
The
Company has entered into a joint venture with Carraro SPA of Italy and promoted
a joint venture company under the brand name Carraro India Limited to
manufacture transmission to be used in its higher HP range of tractors at a
cost of Rs. 1100 millions.
83,956
shares issued against warrants of erstwhile Escorts Tractors Limited. 28,17,456
No. of equity shares issued on conversion of warrants.
The
company has recently entered into a joint venture agreement with Yamaha Motor
Company Limited of Japan for setting up a new venture Escorts Yamaha Motor
Limited (EYML) on the basis of equal participation in capital.
The
company has also signed a 50:50 joint venture agreement with Mahle GmbH of
Germany to manufacture automotive and railway pistons, gudgeon pins. This
venture would take over Escorts existing plant in Bangalore and Patiala.
The
Rs. 29000 millions Escorts group of companies is setting up a Rs. 2500 millions
industrial complex at Ranjangaon in Pune.
Hughes
Escorts Communications (HECL) a joint venture between Hughes Network Systems
Inc (HNS) and Escorts, announced a tie-up with Datacraft RPG to market
satellite based wide area communications solutions. Under the agreement,
Datacraft RPG will be a marketing associate, offering HECL's V-sat based
communications network as part of the integrated solutions designed for its
customers.
The
company’s transport and agri-equipment company, is exploring the possibility of
tying up with Yanmar of Japan for manufacturing high-speed paddy transplanters
in India. Escorts Yamaha Motor Limited (EYML), launched a brand new motorcycle,
the RXZ.
Escorts
Yamaha Motor Limited (EYML), has been awarded the ISO-9001 certificate by TUV
Bayern for its manufacturing facility at Faridabad, Haryana.
Carraro
India Limited, a 51:49 joint venture between the $200-million Carraro SpA of
Italy and the Rs. 16500 millions. The company has tied up its entire debt with
IFC Washington and Exim bank.
1998
The
company has signed an MoU with Long Manufacturing Inc.
Close
on the heels of the introduction of sporty look Yamaha RXZ late last year, SMM
Escorts and Escorts Yamaha Motor Limited (EYML), the joint venture between
Escorts Limited and the Yamaha Company Limited of Japan had launched yet
another new model - Yamaha RX-135 - in Maharashtra.
The
company, the flagship company of the Rs. 35000 millions Escorts Group, which is
engaged in the manufacture of tractors, has signed an MoU (Memorandum of
Understanding) with an American company at North Carolina to acquire 49 per
cent equity worth $9 millions.
Escorts
Yamaha has launched Yamalube, a two-stroke motor oil, developed by Yamaha Motor
Corporation, Japan.
The
company's turnover declined to Rs. 13197.000 millions due to depressed market
conditions.
The
Company launched a new `Powertrac' range of tractors with vastly improved
engine performance, fuel consumption and meeting the emission norms not only in
the domestic markets but also complying with very stringent EPA norms
prescribed in the USA and other overseas markets.
10,96,672
No. of equity shares of Rs. 10/- each (premium Rs. 25/- per share) allotted
against detachable warrants. 30,00,000 No. of equity shares allotted against
warrants which were issued to the employees under ESOS on preferential basis.
Another 70,505 No. of equity shares of Rs. 10/- each (premium Rs. 25/- per
share) allotted against detachable warrants.
1999
The
company, the second largest tractor manufacturer in the country, was set to
launch its new tractor, Farmtrack 45, in the US next month after a silent entry
in the domestic markets in August last.
The
fall in profits was mainly due to the labour strike which lasted for 70 days
and resulted in production loss.
2000
The
company had approved the proposal to divest 24% equity in Escorts Yahmaha Motor
Limited (EYML), a joint venture between company and Yamaha Motor Company (YMC),
Japan, manufacturing a wide range of motorcycles in India for the domestic
market and exports.
The
company has launched Esconet Services Limited. This company is a 100%
subsidiary of company.
The
Company has launched its wheel type crop harvestor.
Yamaha
Motor Escorts Limited the joint venture between Yamaha Motor Company Limited of
Japan and the Delhi-based Escorts group, has launched a new 100cc four stroke
motorcycle (Crux).
The
company would be launching tractors with higher horse power in the range of
60hp - Farmtrac 70 - by end of December, in a bid to push its market share to
over 22% in 2001.
On
June 13th Escort withdraws from Yamaha Joint Venture. Yamaha set to buy out
Escorts share in their Indian joint venture, by June 30, Yamaha India becomes
the first 100% subsidiary in Asia for the Japanese motorcycle company.
The
Rs. 32000 millions, Delhi-based Escorts Group has launched issuer India
Solutions Private Limited, a wholly-owned subsidiary with services to address
the demand for information technology (IT) infrastructure related corporate
solutions.
2002
The
company, on July 12, 2002 announced the divestment of its equity in Escorts JCB
Limited and Escorts Class Limited in favour of its joint venture partners, J C
Bamford UK and Class (Germany), respectively.
The
company has entered into an agreement to sell its entire 60% equity holding in
Escorts Class Limited for a consideration of 13.200 millions Euros (approx. Rs.
630 millions as per the current exchange rates).
Escorts
announces appointment of Rohtash Mal as Executive Director and CEO of Agri
Machinery Group (AMG)
New
Delhi, 26th November 2007
Escorts
today announced the appointment of Mr. Rohtash Mal as the Executive Director
& Chief Executive Officer of its Agri Machinery Group.
An
alumnus of IIM Calcutta and IIT Delhi, Mr. Mal has over 27 years of experience
in managing a diverse range of industrial and commercial enterprises. In his previous
assignment Mr. Mal was the Chief Executive of Bharti Fieldfresh Ltd. He started
his career with Ballarpur Industries Ltd. where he went on to head the Paper
Division as its Vice President for Sales & Marketing. Mr. Mal was also the
Chief General Manager - Marketing & Sales at Maruti Udyog Limited and later
the Chief Executive with Bharti Airtel Ltd. in its mobility and broadband /
telecom services business verticals.
On
his appointment, Mr. Rajan Nanda – Chairman of Escorts said, “With continued significant
focus being laid on agriculture and farm mechanization in the country, they
have a great opportunity on the hands. Mr. Mal’s rich experience in
successfully driving business growth in sectors like paper, automobiles,
telecom and retail will help us further improve the competitive advantage. They
are confident that Mr. Mal’s strong business orientation will place Escorts in
a stronger position in the Agri Machinery sector.”
NEWS
December 13, 2000
Escorts Limited - Analyst Meet
Given
the current state of affairs in the automotive industry, it was a surprise to
see Escorts inviting analysts for an analyst meet cum plant visit in Faridabad.
It was a day-long program, which began with a visit to the company's tractor
plant. Later there was a presentation on the company's future strategy in its
core business of agricultural machinery.
Escorts
believes that given the low tractor density of 0.4 unit per 1000 hectares in
India (as compared to a figure of 0.9 in developing countries and 1.4
worldwide), the future growth prospects for the tractor industry is good. The
company expects action in the medium and heavy powered segments after the
exercise to rationalize excise duty rates during the last Union Budget. As part
of its expansion drive, the company will focus its energy at increasing its
present dealer network of 400. The thrust will be in the southern regions where
it has a minor share of about 5%. This is also the region, which has been
witnessing a high growth in tractor sales in the past few years.
Escorts
products encompass a wide range of tractors starting from the 25-30 HP segment
to the 70-75 HP segment. It sells tractors under the brand names of Escort
(25-35 HP economy range), Powertrac (30-45 HP value range) and Farmtrac (30-75
HP premium range). For wetland operations, the company has introduced a new
straight axle tractor in August 2000. In addition, Escorts also manufactures
combine harvesters in collaboration with Class AG of Germany and paddy
transplanters in collaboration with Yanmar of Japan. It has a subsidiary with
Carraro SpA of Italy to manufacture transmissions for higher HP tractors.
Export
of tractors is another thrust area. The company has two JVs, one in the USA and
another one in Poland to market its tractors. It has also finalized
distribution arrangements in Turkey, South Africa and Australia. Escorts
exported a total of 1,685 tractors in FY2000. The company targets exports of
2,350 tractors in FY01 and 3,600 units in FY02.
Escorts
will be focusing on research and development activities with an objective to
develop products ahead of competition for domestic and international markets.
The company intends to spend Rs625mn towards this over a period of three years.
The company has already launched a BPR initiative. This has already helped
reduce inventory and non-value added activities by 70%. Productivity also
improved by 50%.
The
company's long term vision includes becoming a market leader in the tractor
industry by 2004 by offering a full range of mechanized solutions for Indian
agriculture. Its forecasts for industry volumes and market share is as shown in
the table below –
|
Year |
FY2000 |
FY01E |
FY02E |
FY03E |
|
TIV* |
258,990 |
235,000 |
250,000 |
270,000 |
|
Sales |
52,010 |
50,000 |
55,000 |
62,000 |
|
Mkt share |
20.1% |
21.1% |
22.0% |
23.0% |
* - Total industry volumes
Networking
Escorts
has also joined hands with a number of external agencies and NGOs working in
the field of community development. A complete programme on "quality
reproductive health care services", covering 25 villages in the Faridabad
District is being run with the able support and help of "The Population
Foundation of India". Escorts also works in collaboration with the
National Association for the Blind in the field of prevention of blindness.
This programme includes activities i.e. administering vitamin A, free screening
of the school going children, distribution of glasses and the like. Besides
this Escorts also works in close collaboration with other NGOs, as and when
required, Escorts also allocates funds for other agencies, working in the field
of improving rural environment, to run income generation programme, and
upliftment of the rural poor.
Future Vision
The
focus of each activity has been charging from time to time depending upon the
local needs. The focus at present is to stregthen the existing programme as
well ass to extend the services to a larger mass. Faridabad is an industrial
town. In the last few decades there has been a massive influx of people to the
town from various parts of the country especially from rural Haryana. As a
result of which large number of Jhuggi clusters, colonies have come up. Escorts
is engaged in ceaseless attempts to reach out to each and every beneficiary and
hopes to receive the support and assistance from other developmental agencies
as well.
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 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.46.71 |
|
UK Pound |
1 |
Rs.85.12 |
|
Euro |
1 |
Rs.66.98 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
--- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE
INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE
DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT
ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT
FACTORS |
YES/NO |
YES |
|
TOTAL |
|
38 |
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 |
|