MIRA
INFORM REPORT
|
Report Date : |
22.10.2011 |
IDENTIFICATION DETAILS
|
Name : |
ELECON ENGINEERING COMPANY LIMITED |
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Registered
Office : |
Anand, Sujitra Road, Vallabh Vidyanagar – 388120, Gujarat |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
11.01.1960 |
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Com. Reg. No.: |
04-001082 |
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Capital
Investment / Paid-up Capital : |
Rs.185.723 Millions |
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CIN No.: [Company Identification
No.] |
L2959GJ1960PLC001082 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
BRDE00200E |
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PAN No.: [Permanent Account No.] |
AAACE4644D |
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Legal Form : |
A Public Limited Liability company. The company’s Shares are Listed on
the Stock Exchange. |
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Line of Business
: |
Manufacturer and Supplier of Material Handling Equipments and
Reduction Gears. |
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No. of Employees
: |
1197 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (66) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
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 |
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Maximum Credit Limit : |
USD 38000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having fine track. Financial
positions of the company appears to be sound. However trade relations are
reported as fair. Business is active. Payments are reported to be regular and
as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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|
A1 |
A1 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INFORMATION PARTED BY (GENERAL DETAILS)
|
Name : |
Mr. Chirag Darji |
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Designation : |
Deputy Manager Accounts |
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Contact No.: |
91-9909917052 |
LOCATIONS
|
Registered/ Corporate Office : |
Anand, Sujitra Road, Vallabh Vidyanagar – 388120, Gujarat, India |
|
Tel. No.: |
91-2692-236469/ 236513/ 236516/ 236520/ 227113/ 227080/ 237016/ 236521/ 236590/ 227491/ 227960/ 230017 |
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Mobile No.: |
91-9909917052 (Mr. Chirag) |
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Fax No.: |
91-2692-236527/ 236457/ 227020 |
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E-Mail : |
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Website : |
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Area : |
25000 Sq. Ft |
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Location : |
Owned |
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Factory 1 : |
Material Handling Equipment Division (MHE –Div.), Anand – Sojitra
Road, Vallabh Vidyanagar – 388120, Gujarat, India |
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Tel. No.: |
91-2692-237016/17/ 236521/ 236590 |
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Fax No.: |
91-2692-227020 |
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Email : |
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Factory 2 : |
Gear Division, Anand – Sojitra Road, Vallabh Vidyanagar – 388120,
Gujarat, India |
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Tel No. : |
91-2692-236469/ 236513/ 236516 |
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Fax No. : |
91-2692-227484 |
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Email : |
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Factory 3 : |
Alternate Energy Division, Anand – Sojitra Road, Vallabh Vidyanagar –
388120, Gujarat, India |
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Fax No.: |
91-2692-227020 |
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Email : |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. Prayasvin B. Patel |
|
Designation : |
Chairman and Managing Director |
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Date of Birth/Age : |
53 Years |
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Qualification : |
B. E. (Mechanical) M. B. A. (U. S. A) |
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Experience : |
35 Years |
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Date of Appointment : |
01.07.1983 |
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Name : |
Mr. Prashant Amin |
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Designation : |
Executive Director |
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Name : |
Mr. Pradip M. Patel |
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Designation : |
Director |
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Name : |
Mr. Chirayu R. Amin |
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Designation : |
Director |
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Name : |
Mr. Hasmuklal Parikh |
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Designation : |
Director |
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Name : |
Dr. Amritlal C. Shah |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Hemendra C. Shah |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Paresh M. Shukla |
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Designation : |
Company Secretary |
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Name : |
Mr. U. V. Phani-kumar |
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Designation : |
Chief Executive Officer (MHE and EPC) |
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Date of Birth/Age : |
40 Years |
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Qualification : |
B. E. (Mechanical), PGTQM, Advanced Masters Program in Project
Management |
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Experience : |
19 Years |
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Date of Appointment : |
05.08.2010 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2011
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
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|
40368463 |
43.47 |
|
Any Others (Specify) |
|
|
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Directors/ Promoters and
their Relatives and Friends |
2086175 |
2.25 |
|
|
42454638 |
45.72 |
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|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
42454638 |
45.72 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
11218984 |
12.08 |
|
|
56325 |
0.06 |
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|
278648 |
0.30 |
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|
1582435 |
1.70 |
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Any Others (Specify) |
|
|
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Foreign Mutual Fund |
800000 |
0.86 |
|
Sub Total |
13936392 |
15.01 |
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|
|
|
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|
6709941 |
7.23 |
|
|
|
|
|
|
23921028 |
25.76 |
|
|
4086890 |
4.40 |
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|
1752621 |
1.89 |
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|
220424 |
0.24 |
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|
42335 |
0.05 |
|
Non Resident Indians |
858951 |
0.92 |
|
Hindu Undivided
Families |
542137 |
0.58 |
|
Trusts |
15112 |
0.02 |
|
Directors and their Relatives and
Friends |
73662 |
0.08 |
|
|
36470480 |
39.27 |
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Total Public shareholding (B) |
50406872 |
54.28 |
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Total (A)+(B) |
92861510 |
100.00 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
|
|
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|
-- |
-- |
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|
-- |
-- |
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|
-- |
-- |
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Total (A)+(B)+(C) |
-- |
-- |
(1) Indian
Bodies Corporate
Individual shareholders holding nominal share
capital up to Rs. 0.100 millionBUSINESS DETAILS
|
Line of Business : |
Manufacturer and Supplier of Material Handling Equipments and
Reduction Gears. |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Licensed
Capacity* |
Installed
Capacity* |
Actual
Production+ |
|
Conveying Equipments |
Tonnes |
N. A. |
15000 |
13463.03 |
|
Wagon Tippler and Dust Trapping Equipment |
Nos. |
N. A. |
16 Sets each |
18 |
|
Crushers, Screens and Feeders |
Tonnes |
N. A. |
1000 |
628.05 |
|
Specialised Conveying Equipment, Stacker Reclaimers, Blender
Reclaimers, Rotary Disc, Loaders ect. |
Tonnes |
N. A. |
3000 |
4677.84 |
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Reduction Gears and Geared Motors |
Nos. |
N. A. |
55000 |
40705.00 |
|
Wagon Marshalling Equipment |
Tonnes |
N. A. |
300 |
780.61 |
|
EOT Cranes and Goliath Cranes |
Nos. |
N. A. |
100 |
-- |
|
Wind Turbine Generators |
Nos. |
N. A. |
50 |
1 |
|
Axles** |
Nos. |
N. A. |
1500 |
73 |
* As certified by the Management
** For Captive Consumption
+ As per DGTD return
GENERAL INFORMATION
|
Customers : |
·
NMDC Limited ·
Mundra Port and SEZ Limited ·
Lanco Infratech Limited ·
Ultra Tech Cement Limited ·
BHEL, Bangalore ·
Adani Hazira Port Private Limited (AHPPL) |
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No. of Employees : |
1197 (Approximately) |
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Bankers : |
·
State Bank of India ·
Bank of Baroda ·
EXIM Bank of India ·
Axis Bank Limited ·
HDFC Bank Limited ·
IDBI Bank Limited ·
Standard Chartered Bank |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Thacker Butala Desai Chartered Accountant |
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Address : |
Navsari, Gujarat, India |
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Subsidiaries : |
·
Elecon Transmission International Limited,
Mauritius |
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Step down Subsidiaries : |
·
David Brown Systems Sweden AB, Sweden ·
Radicon Transmission UK Limited, U. K. ·
AB Benzlers, Sweden ·
Elecon USA Transmission Limited, USA ·
Benzlers Transmission A.S., Denmark ·
Benzlers Antribstechnik GmbH, Germany ·
Benzlers Antriebstechnik Gesmbh, Austria ·
OY Benzlers AB, Finland ·
Benzlers Malaysia |
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|
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Associates and Joint Ventures : |
·
Ringspann Elecon India Limited ·
Eimco Elecon India Limited ·
DRA India Limited ·
Elecon Australia Pty. Limited ·
Elecon Africa Pty. Limited ·
Elecon Singapore Pte. Limited ·
Elecon Middle East FZCO ·
Elecon Windfarm Developers (Motagunda –
Vinzalpur) Limited |
|
|
|
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Enterprises over which individual personnel have significant influence
: |
·
Bipra Investments and Trust Private Limited ·
Devkishan Investment Private Limited ·
K.B. Investments Private Limited ·
Elecon Information Technology Limited ·
Emtici Engineering Limited ·
Prayas Engineering Limited ·
Speciality Wood Pack Private Limited ·
Power Build Limited ·
Kirloskar Power Build Gears Limited ·
Akaaish Mechatronics Limited ·
Madhuban Prayas Resorts Limited ·
Narmada Travels Limited ·
Wizard Fincap Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
225000000 |
Equity Shares |
Rs.2/- each |
Rs.450.000 Millions |
|
25000000 |
Cumulative Redeemable Preference Shares |
Rs.2/- each |
Rs.50.000 Millions |
|
|
|
|
|
|
250000000 |
|
|
Rs.500.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
92861510 |
Equity Shares |
Rs.2/- each |
Rs.185.723
Millions |
|
|
|
|
|
Notes: Of the above
i)
342100 Equity Shares of
Rs.2/- each in above (originally allotted 68420 Equity Shares of Rs.10/- each)
were issued as fully paid-up, pursuant to
a contract without payment being received in cash
ii) 17338890 Equity Shares of Rs.2/- each in above (originally allotted
3467778 Equity Shares of Rs.10/-
each) were issued as Bonus Shares by way
of capitalisation of Share Premium and Reserves.
iii) 5498160 Equity Shares of Rs.2/- each in above (originally allotted
1099632 Equity Shares of Rs.10/-
each) were issued as fully paid-up Equity
Shares on conversion of Debentures.
iv) 2716787 Equity Shares of Rs.2/- each were allotted as fully paid-up
Shares on conversion of FCCB of
Series ‘A’ 9000 nos. of $ 1000 each.
v)
61907673 Equity Shares of
Rs.2/- each in above were issued as Bonus Shares by way of capitalisation of
Share Premium and Reserves
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
185.723 |
185.723 |
185.723 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves &
Surplus |
3760.286 |
3075.341 |
2568.277 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
3946.009 |
3261.064 |
2754.000 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3134.510 |
3328.770 |
5236.092 |
|
|
2] Unsecured
Loans |
2168.898 |
1886.989 |
684.728 |
|
|
TOTAL BORROWING |
5303.408 |
5215.759 |
5920.820 |
|
|
DEFERRED TAX
LIABILITIES |
410.645 |
402.585 |
327.803 |
|
|
|
|
|
|
|
|
TOTAL |
9660.062 |
8879.408 |
9002.623 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3684.504 |
3622.198 |
3110.193 |
|
|
Capital work-in-progress |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
363.455 |
56.757 |
108.680 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3144.466 |
3151.846 |
4007.466 |
|
|
Sundry Debtors |
6719.504 |
5175.855 |
4717.358 |
|
|
Cash & Bank Balances |
130.514 |
388.126 |
610.587 |
|
|
Other Current Assets |
0.000 |
0.000 |
0.000 |
|
|
Loans & Advances |
615.481 |
546.743 |
749.179 |
|
Total Current Assets |
10609.965 |
9262.570 |
10084.590 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
3564.723 |
2946.948 |
2816.781 |
|
|
Other Current Liabilities |
1221.699 |
921.333 |
1269.924 |
|
|
Provisions |
245.887 |
219.884 |
231.023 |
|
Total Current Liabilities |
5032.309 |
4088.165 |
4317.728 |
|
|
Net Current Assets |
5577.656 |
5174.405 |
5766.862 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
34.447 |
26.048 |
16.888 |
|
|
|
|
|
|
|
|
TOTAL |
9660.062 |
8879.408 |
9002.623 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
11089.237 |
9719.848 |
7896.132 |
|
|
|
Erection and other Charges |
682.849 |
743.857 |
1654.516 |
|
|
|
Other Income |
284.306 |
247.718 |
95.772 |
|
|
|
TOTAL (A) |
12056.392 |
10711.423 |
9646.420 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Consumption of Materials, Sub Contracts, Erection and other charges |
7933.811 |
6937.692 |
7374.768 |
|
|
|
Employees remuneration and benefits |
563.946 |
435.185 |
438.322 |
|
|
|
Increase/ decrease in stock |
(45.093) |
346.651 |
(1054.964) |
|
|
|
Administrative Expenses |
1460.853 |
1170.412 |
1231.550 |
|
|
|
Power and Fuel Cost |
93.451 |
78.220 |
70.590 |
|
|
|
TOTAL (B) |
10006.968 |
8968.160 |
8060.266 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
2049.424 |
1743.263 |
1586.154 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL EXPENSES (D) |
458.258 |
508.890 |
483.680 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1591.166 |
1234.373 |
1102.474 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
384.267 |
331.203 |
221.471 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1206.899 |
903.170 |
881.003 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
327.687 |
241.417 |
306.491 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
879.212 |
661.753 |
574.512 |
|
|
|
|
|
|
|
|
|
Add/ Less |
Adjustment of Prior period |
0.000 |
7.738 |
(24.809) |
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
207.939 |
200.875 |
564.137 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
Transfer to General
Reserve |
650.000 |
500.000 |
750.000 |
|
|
|
|
Proposed Dividend |
167.151 |
139.292 |
139.292 |
|
|
|
Tax on Proposed Dividend |
27.116 |
23.135 |
23.673 |
|
|
BALANCE CARRIED
TO THE B/S |
242.884 |
207.939 |
200.875 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Reduction Gears |
364.060 |
361.818 |
295.211 |
|
|
|
Conveying Equipments |
193.784 |
274.674 |
111.287 |
|
|
|
Interest |
0.000 |
0.000 |
1.543 |
|
|
TOTAL EARNINGS |
557.844 |
636.492 |
408.041 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
495.490 |
481.586 |
1020.119 |
|
|
|
Stores & Spares |
33.511 |
27.570 |
31.405 |
|
|
|
Capital Goods |
71.016 |
477.596 |
850.072 |
|
|
|
Others |
0.000 |
0.000 |
0.000 |
|
|
TOTAL IMPORTS |
600.017 |
986.752 |
1901.596 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) Basic/Diluted |
9.47 |
7.13 |
6.19 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
|
30.06.2011 |
|
Type |
|
|
|
1st
Quarter |
|
Sales Turnover |
|
|
|
2573.070 |
|
Total Expenditure |
|
|
|
2123.480 |
|
PBIDT (Excl
OI) |
|
|
|
449.590 |
|
Other Income |
|
|
|
0.000 |
|
Operating
Profit |
|
|
|
449.590 |
|
Interest |
|
|
|
132.740 |
|
Exceptional
Items |
|
|
|
0.000 |
|
PBDT |
|
|
|
316.850 |
|
Depreciation |
|
|
|
98.400 |
|
Profit
Before Tax |
|
|
|
218.450 |
|
Tax |
|
|
|
69.400 |
|
Profit after Tax |
|
|
|
149.050 |
|
Extraordinary Items |
|
|
|
0.000 |
|
Prior Period Expenses |
|
|
|
0.000 |
|
Other Adjustments |
|
|
|
0.000 |
|
Net Profit |
|
|
|
149.050 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
7.29
|
6.18
|
5.96 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
10.88
|
9.29
|
11.16 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
8.44
|
7.01
|
6.68 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.31
|
0.28
|
0.32 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.62
|
2.85
|
3.72 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.11
|
2.27
|
2.34 |
LOCAL AGENCY FURTHER INFORMATION
REVIEW OF OPERATIONS
Standalone Financial Performance
For
the year ended on 31st March, 2011, the Company has achieved Turnover of
Rs.11772.090 Millions and Net Profit of Rs.879.210 Millions as against the
Turnover of Rs.10463.700 Millions and Net Profit of Rs.661.750 Millions
respectively during the previous year, representing increase in Turnover of
12.50% and increase in Net
Profit
by 32.86%.
The
Company holds total unexecuted orders worth Rs.13840.000 Millions. Out of which
Rs.10590.000 Millions is for the MHE division and ` 3,250 Millions. is for the
Gear Division as of March 31, 2011. This will help them to continue to have
sustainable growth in coming years. The Company has ability to attend
substantial live enquiries with excellence.
Subsidiary Companies
During
the year, the Company has incorporated a Wholly Owned Subsidiary, (WOS) in
Mauritius, namely, Elecon Transmission International Limited to acquire the
business of Benzlers-Radicon Group, a Sub-Group of David Brown Gear Systems
Group, UK. the said WOS has executed Sale and Purchase Agreement(SPA) to
acquire 100% stake in the business of 1) David Brown Systems Sweden AB
(Sweden), 2) Applied Transmission Products Division of David Brown Geared
Systems Limited (U.K) and 3) Geared Motor Division of Cone Drive Operations
Inc. (U.S) (the “Business”) of the David Brown Gear Systems Group. The WOS has
also paid the acquisition consideration to the Seller on 26.11.2010.
The following eleven subsidiaries were set up / acquired
during the year:
1. Elecon Transmission International Limited, Mauritius.
2. Radicon Transmission UK Limited
3. Elecon USA Transmission Limited
4. David Brown Systems Sweden AB
5. AB Benzlers, Sweden
6. Benzler Technisch Buro Aandrijftechniek B.V. (The
Netherlands)
7. Benzler Transmission A.S. (Denmark)
8. Benzler Andtriebstech nik GmbH (Germany)
9. Oy Benzler AB (Finland)
10. Benzlers Antriebstechnik Gesmbh, Austria
11. Benzlers Malaysia, Malaysia
MANAGEMENT
DISCUSSION AND ANALYSIS
Joint Venture
Ringspann
GmbH, Germany, a joint venture partner in Ringspann Elecon (India) Limited, a
Joint Venture Company (“JVC”) has made divestment of their entire shareholding by
selling their stake to Elecon Group of Companies. In view of the said
divestment, the said JVC has applied for the change of name. The JVC will
continue to use the technology of the outgoing German partner for its captive
consumption.
Industry Structure
and Development
The
economic activities registered significant growth during the year compared to
the last year 2009-10. The overall situation was better than they had
apprehended in the aftermath of the economic slowdown. However, the growth
forecasts for this year are being revised downwards. What has changed in the
last few months? Higher than expected inflation in the economy and the
underlying pressures coming in from commodity and crude oil prices. But food
inflation will come down in a few months and petro prices are already at the
top end of the curve. The interest rate hike may impact it further but will
definitely impact growth more. Amidst the fluctuating factors affecting the
global economy and stagnation, the Indian economy grew at close to 8%.
Though
the inflationary trend, high interest rate and volatile industrial growth were
major causes of concern, the Indian economy has been successfully withstood.
However, demand-supply mismatches and inconsistent monsoons put the economy on
an inflationary trend and the trend continues in the current year.
The
Company ended the year with stable performance and retained its position in the
volatile market. The Company focused on cost control measures and product mix
enrichment to sustain growth and profitability in the challenging year.
The
Indian economy has emerged with remarkable rapidity from the slowdown caused by
the Global financial crisis. The turnaround has been fast and strong. Growth is
strong in 2010-11 with a rebound in agriculture and continued momentum in
manufacturing, though there was a deceleration in services caused mainly by the
deceleration in community, social and personal services, reflecting the base
effect of fiscal stimulus in the previous two years.
OPPORTUNITIES AND
THREATS
Global
economy is trying hard to stabilize the growth momentum. Negative growth rates
by most developed countries are now being converted into positive growth rates.
The radical measures taken by Central Governments and Central Banks around the
world during Global economy meltdown have helped recovery across the globe.
India
will continue to be one of the drivers of global economic recovery. The economy
of India maintained a strong and steady growth momentum throughout the current
global economic crisis unlike many other emerging market economies where growth
decelerated sharply and, in some cases, turned negative.
In
spite of continuous tightening of monetary policy and further escalation in
global oil prices, most of the sectors are seeing increases in orders, credit
off take is much higher than last year (April commercial bank credit rose by
22.1% yoy compared to 17.1% last year).
Exports
grew by 37.5 % [fastest growth since independence]. Imports also showed an
increase of 21.2 %. Strong export growth performance over the last five months
has helped bring the trade deficit down to more manageable levels.
Apprehensions
with regard to widening current account deficit have also been allayed.
Commerce and Industry Ministry is now confident that the export target of US$
450 billion by 2013-14 will be met.
Despite
all these positives, manufacturing growth has been falling for 4 quarters;
rates have been rising rapidly and, with a more aggressive RBI, are expected to
continue to rise in coming quarters. There has also been a continued fall in
investment.
Latest
numbers for WPI based inflation show that headline inflation in March 2011
stands at 8.98%. Annual inflation rate for 2010-11 also highlights the
continuous pressure the economy faces on the prices front. Overall inflation
for 2010-11 stands at 9.4 percent and is much above what the RBI considers as
the ‘growth promoting inflation rate’ and which is about 5 percent.
The
Core Sector recorded an overall growth of around 5.7 %. Growth has been powered
by sectors like crude oil, steel and power. However, performance of the coal
sector is a reason for worry.
SEGMENT-WISE
PERFORMANCE
During
the financial year 2010 - 2011, the Company has achieved a Turnover of Rs.11772.090
Millions as against Rs.10463.700 Millions in the previous year, which shows a
growth of 12.50% over the previous year.
The
Turnover of Gear Division has increased to Rs.5246.400 Millions from
Rs.4259.200 Millions in the previous year, which shows an increase of 23.17%.
The
Turnover of MHE Division has increased to Rs.6525.690 Millions as against
Rs.6204.500 Millions in the previous year, which shows an increase of 5.17%.
The
Profit before Tax has increased to Rs.1206.900 Millions from Rs.903.170
Millions in the previous year resulting into a increase of 33.63 %.
The
Profit after Tax has increased to Rs.879.21 Millions from Rs.661.75 Millions,
resulting into a increase of 32.86%, over the previous year.
OUTLOOK
Investment,
particularly fixed capital investment, is yet to recover to pre-crisis levels,
inflation has been high and, while moderating, will not succumb in the case of
food prices. Agricultural growth continues to be erratic, industry and
infrastructure display volatility and waning momentum, except for some robust
sectors like automobiles. The saving–investment gap is still large, leading to
historically high current account deficits. Core sector growth is weak.
Despite
all this, the economy is expected to grow by 9% in 2011-12, give or take one
quarter of a percentage point. And the case for fiscal consolidation is strong.
The
international environment is fraught. The high levels of public and private
debt in the developed countries make the recovery they have made all the more
tenuous. Luckily, India has diversified its trade linkages away from these
economies and now has extensive commerce with developing countries and this
offers some cushion against a still possible double dip in the advanced
countries.
Against
the backdrop of heightened uncertainty on the global economic front, spiraling
global crude oil prices providing upward pressure to the persistent inflation
and high interest rates, the Indian economy will grow during FY 12, gaining
traction especially, during the second half of the fiscal year due to improvement in private domestic demand
conditions, moderating inflation towards the end of the fiscal year and
anticipation of recovery gathering pace in the global economy during the second
half of the fiscal year. Moreover, robust industrial activity is also expected
to drive economic growth and the IIP is likely to grow by around 9.0% during
FY12. However, the investment activity is expected to improve only marginally
during FY12, weighed down by the high inflation and elevated interest rates.
Given that a relentless rise in inflation does have the potential to impact
growth considerably, the challenge before the RBI would be to manage the policy
rates in such a way that it does not disrupt the growth prospects.
DEVELOPMENT IN
HUMAN RESOURCES/INDUSTRIAL FRONT
It has
been the tradition of the Company to maintain excellent industrial relations at
all levels. This has ensured a very healthy level of enthusiasm within the employees.
This has enabled the Company to maintain its growth despite competition and
economic slackness. The number of employees as on 31st March, 2011 was 1197 as
against 1069 as on 31st March, 2010.
FIXED ASSETS
·
Land (Freehold)
·
Buildings
·
Plant and Machinery
·
Electrical Installations
·
Electrical Fittings
·
Office Equipments
·
Air Conditioning Plant
·
Sundry Equipments
·
Furniture and Fixtures
·
Vehicles
·
Site Office Equipment
UNAUDITED FINANCIAL RESULT FOR THE QUARTER ENDED 30TH JUNE,
2011.
(Rs. in millions)
|
Particulars |
|
Quarter Ended 30th Sept.
2010 (Unaudited) |
|
|
|
|
|
(a) Net Sales / Income from operations |
|
2757.502 |
|
Less: Excise Duty |
|
214.137 |
|
a. Net Sales/ Income from Operations |
|
2543.365 |
|
b. Other Operating Income |
|
29.706 |
|
Total Income |
|
2573.071 |
|
|
|
|
|
Expenditure |
|
|
|
a) (Increase) / Decrease in stock in trade and work in
progress |
|
(144.063) |
|
b) Consumption of raw materials |
|
1738.439 |
|
c) Purchase of traded goods |
|
-- |
|
d) Employees cost |
|
148.670 |
|
e) Depreciation |
|
98.396 |
|
f) Other Expenditure |
|
380.435 |
|
Total |
|
2221.877 |
|
|
|
|
|
Profit from operations before other income, interest and
exceptional Items |
|
351.194 |
|
|
|
|
|
Other income |
|
-- |
|
|
|
|
|
Profit before interest and exceptional Items |
|
351.194 |
|
|
|
|
|
Interest |
|
132.742 |
|
|
|
|
|
Profit
after Interest but before Exceptional Items |
|
218.452 |
|
|
|
|
|
Exceptional Items |
|
-- |
|
|
|
|
|
Profit
(+)/Loss(-) from Ordinary Activities before tax |
|
218.452 |
|
|
|
|
|
Tax expense |
|
69.397 |
|
|
|
|
|
Net
Profit (+)/Loss(-) from Ordinary Activities after tax |
|
149.055 |
|
|
|
|
|
Share of Profits of Associates |
|
-- |
|
|
|
|
|
Extra Ordinary Item (Net of Tax Expense) |
|
-- |
|
|
|
|
|
Net Profit(+)/ Loss(-) for the Period |
|
149.055 |
|
|
|
|
|
Paid up equity share capital (Face value of Rs.2/- per
share) |
|
185.723 |
|
|
|
|
|
Reserves excluding revaluation reserves as per balance
sheet of previous accounting year |
|
-- |
|
|
|
|
|
Earning
per share (EPS) |
|
|
|
(a)
Basic and diluted EPS before Extraordinary items for
the period, for the year to date and for the previous
year (not to be annualised) |
|
1.61 |
|
(a)
Basic and diluted EPS before Extraordinary items for
the period, for the year to date and for the previous
year (not to be annualised) |
|
1.61 |
|
|
|
|
|
Public
shareholding |
|
|
|
Number of shares |
|
50406872 |
|
Percentage
of shareholding |
|
54.28% |
|
|
|
|
|
Promoters
and Promoters group Shareholding- |
|
|
|
a) Pledged /Encumbered |
|
|
|
Number of shares |
|
8874850 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
|
20.90% |
|
Percentage of shares (as a % of total share capital of the
company) |
|
9.56% |
|
|
|
|
|
b) Non Encumbered |
|
|
|
Number of shares |
|
33579788 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
|
70.10% |
|
Percentage of shares (as a % of total share capital of the
company) |
|
36.16% |
NOTE:
1) The aforesaid financial
results were placed before the Audit Committee and reviewed by it at its
meeting held on August 02, 2011 and taken on record by the Board of Directors
in their Meeting held on the same date.
2) The Statutory Auditors
have carried out a ‘Limited Review’ of the above financial results of the
Company.
3) Other Income for the
Quarter ended June 30, 2011 includes Profit on Sale of investments of Nil
(Corresponding Quarter June 30, 2010 was Nil) and Year ended March 31, 2011
includes Profit on Sale of Investments of Rs.206.960 Millions.
4) Status of Investors
complaints :- Opening – Nil, Received – 09, Resolved – 09, Pending – Nil.
5) The Previous period
figures have been regrouped/ recast wherever necessary to make it appropriate
for comparison purpose.
BUSINESS
DESCRIPTION
Subject is an India-based manufacturer of material handling equipments.
The Company is also engaged in manufacturing of industrial gears and power
transmission products in India. The Company operates in two segments: material
handling equipment and transmission equipment. The Company’s product range
includes design, engineering, manufacture, supply, erection and commission of
wagon tipplers, bucket wheel stacker/reclaimers, barrel-type blender
reclaimers, fertilizer reclaiming scrapers, limestone pre-homegenizing and
blending plants, single and twin bucket wheel bridge-type reclaimers,
crawler-mounted rippers, stationary and shiftable conveying systems for open
cast lignite mines, integrated coal handling plants for power stations,
underground mining conveyors, open-cast conveying systems, and ferrous and
non-ferrous foundry products. The gear division manufactures helical and bevel
helical gear boxes, worm gear boxes and elevator tractor machines. For the nine
months ended 30 September 2010, Elecon engineering Company Limited's revenues
increased 17% to RS8.15B. Net income increased 65% to RS643.6M. Revenues
reflect, an increase in income from Material Handling Equipment segment, higher
income from transmission equipment division and the presence of other income.
Net income also reflects a decrease in interest expenses and an increase in
gross & operating profit margins.
Prayasvin B. Patel
(Non-Independent Executive Chairman of the Board, Chief Executive Officer, Managing
Director)
Shri. Prayasvin B. Patel is Non-Independent Executive
Chairman of the Board, Chief Executive Officer, Managing Director of Elecon
Engineering Co Limited He has 35 years of experience in Engineering industry.
He started his career as Sales Director of Prayas Casting Private Limited,
Vallabh Vidyanagar. Thereafter, he joined Elecon Engineering Company Ltd as
Joint Managing Director on 1st July 1983. From 1st July 1993, he has taken over
the responsibility of the Managing Director of the Company. On joining the
organization, Shri Prayasvin Patel took charge of the entire responsibility of
both the Gear and MHE divisions of the business. His keenness to improvise,
hands on approach and his active participation has seen the Gear Division rise to
become Asia’s manufacturer of Industrial Gears. He is also Managing Director of
Eimco (Elecon) India Limited He holds B.E. (Mech.) M.B.A (U.S.A). His other
Directorship includes: Eimco Elecon India Limited. Power Build Limited. Narmada
Travels Limited Kirloskar Power Build Gears Limited Marck Biosciences Limited.
Prayas Engineering Limited Elecon Information Technology Limited Akaaish
Mechatronics Limited. Eimco Elecon Electricals Limited Madhuban Prayas Resorts
Limited DRA (India) Limited. K.B. Investment Private Limited Bipra Investment
and Trusts Private Limited Devkishan investment Private Limited Jamko
Consultants Private Limited.
Chirayu R. Amin (Non-Executive Independent Director)
Shri Chirayu R. Amin is
Non-Executive Independent Director of Elecon Engineering Company Limited He has
been appointed as Director of Alembic Limited on 20-8-1967. He was appointed as
Managing Director in Alembic Limited in 1983. At present, he is Chairman cum-
Managing Director of Alembic Limited. In addition to this, a lot of
restructuring has been done in respect of manpower planning and business
strategy of introducing new products and concentrating on some selected brands
for achieving sustainable competitive edge. He holds M.B.A. (U.S.A.). His other
Directorship includes: Alembic Limited Alembic Exports Limited Alembic
Pharmaceuticals Limited Shreno Limited Nirayu Private Limited Paushak Limited
AGI Developers Limited United Phosphorus Limited Sierra Investments Limited
Sierra Healthcare Limited Quick Flight Limited Panasonic Energy India Company
Limited.
Prashant C. Amin
(Executive Director)
Shri. Prashant C. Amin has been appointed as an Executive
Director of Elecon Engineering Company Ltd w.e.f. June 01, 2011. He was
Non-Independent Non-Executive Director of the Company. He has 30 years of
experience in founding various new ventures in different geographies and
operating small enterprises with leadership and operational direction. His
business acumen and ‘hands on’ approach has been the key to his success with companies
he has founded and nurtured. A true entrepreneur and a visionary, Shri Prashant
Amin has taken the responsibility of driving Elecon to new heights of growth
and social responsibility since joining as Group Director in Oct 2006. He
intends to bring the agility of small enterprise and merge it with the legacy
and culture of ELECON Group to make the group ready for the next stage of
development and growth. On completion of his MBA, he spent 3 years as a Cost
Estimator, at Sargent Industries, where he proved his financial acumen in
manufacturing planning and pricing. He returned to India in 1983, to start his
first venture, a container/packaging Company. He founded Caltronics, a
California, USA based Company specializing in printed circuit board manufacture
and turnkey solutions for the high tech electronics industry. Under his
leadership as the COO, Caltronics grew from a five people Company, to a forty
people employer with annual revenues exceeding $10M. He holds M.B.A. (Finance)
(U.S.A.) and M.B.A. (Engineering and Management). His other directorships
includes: Eimco Elecon (India) Limited Emtici Eng. Limited Power Build Limited
Prayas Engineering Limited Ringspann Elecon (India) Limited Akaaish
Mechatronics Limited Emtici Engineering Limited Elecon Information Technology
Limited.
Pradip M. Patel
(Non-Independent Non-Executive Director)
Shri. Pradip M. Patel is Non-Independent Non-Executive Director of Elecon Engineering Company Limited He is associated with the Bearing Industry for over three decades. Joined ABC Bearing Limited on 7th September, 1973 Director in ABC Bearings Limited since 1st August,1976 Managing Director of ABC Bearings Limited since 1st August, 1981. He holds M.B.A. (U.S.A.). His other Directorship includes: ABC Bearing Limited Eimco Elecon India Limited Power Build Limited NSK-ABC Bearing Limited Manoway Investments Private Limited Ziwani Properties Private Limited Mipco Investments Private Limited Maple Investments Company Private Limited Emsons Leasing Company Private Limited Taveta Properties Private Limited.
PRESS RELEASE
CARE
reaffirms rating assigned to Elecon Engineering Company's bank facilities
India, October 14 -- CARE has reaffirmed rating assigned for Elecon Engineering Company's long-term bank facilities aggregating to Rs.59.099 Millions at 'CARE AA-'. The credit rating agency has also reaffirmed rating assigned to company's long-term/short-term bank facilities aggregating to Rs.9000.000 Millions at 'CARE AA- / CARE A1+'. Meanwhile, rating assigned for company's short-term debt / commercial paper issue aggregating to Rs.1600.000 Millions also stands reaffirmed at 'CARE A+'.The ratings continue to take into account the long and established track record of Elecon Engineering Company (EECL) in the engineering industry with diversified product range, market leadership in the industrial gears, dominant position in the material handling equipment, strong order book position and reputed client base. The ratings also factor in the stable financial risk profile and favourable outlook of the end-use industry.The long-term rating is however constrained by the working-capital intensive operations of the company, increasing competition in a largely tender driven business, debt-funded capital expenditure continuously being undertaken by the company and debt-funded overseas acquisition with recourse to EECL as a guarantor. EECL, is the flagship company of the Elecon Group based at Anand, Gujarat. EECL operates in the two business areas namely the material handling equipment and transmission gears. The company is the market leader in the domestic industrial gears segment with almost 25% market share and is one of the largest manufacturers of material handling equipment in India.
Elecon
Engineering Company bags order worth Rs.330.000 Millions
India, October 03 -- Elecon Engineering Company has bagged
prestigious order worth Rs.330.000 Millions from Bharat Heavy Electrical (BHEL)
for design, engineering, manufacture, supply, erection, start up, testing and
commissioning and PG test for 4 sets of wagon tippler with side arm charger and
commissioning spares for raw materials handling systems (Package 1) project of
NMDC Steel Plant at Nagarnar, Chhattisgarh.Recently, the company had bagged order
worth Rs.2972.000 Millions from BHEL for design, engineering, manufacture,
supply and erection and commissioning of wagon tippler, side arm charger with
guide rails, apron feeder with dribble conveyor, crushers with GERB VIS,
vibrating screen and stracker cum reclaimer for CHP machine package for 2x250
MW Expansion project at Barauni TPS Unit -3 and 4 at Begusarai in Bihar. Elecon
Engineering Company is engaged in delivering power transmission solutions and
material handling equipment. The company caters to the needs of various sectors
like steel, fertilizers, cement, coal, lignite and iron ore mines, sugar, power
stations and port mechanization in India and abroad. It has emerged as the
largest gear manufacturing company in Asia.
Award
of Order of Rs. 3.300 Millions
India, October 03 -- Elecon Engineering Company Limited has informed BSE that the Company has been awarded prestigious order of Rs. 330.000 Millions from Bharat Heavy Electrical Limited for Design, engineering, manufacture, supply, erection, start up, Testing and Commissioning and PG test for 4 sets of wagon tippler with Side arm charger and commissioning spares for Raw Materials Handling systems (Package 1) project of M/s. NMDC Steel Plant at Nagarnar, Chhattisgarh.
Updates
India, September 16 -- Elecon Engineering Company Limited has informed the Exchange that the Company has been awarded prestigious order of Rs.297.200 Millions from Bharat Heavy Electrical Limited for Design, engineering, manufacture, supply and erection and Commissioning of wagon tippler, Side arm charger with guide rails, Apron feeder with Dribble conveyor, Crushers with GERB V I S, Vibrating Screen and Stracker cum Reclaimer for CHP machine package for 2x250 MW Expansion project at Barauni TPS Unit #3 and 4, Begusarai Bihar.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON DESIGNATED
PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.50.07 |
|
|
1 |
Rs.79.15 |
|
Euro |
1 |
Rs.69.03 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
66 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.