MIRA INFORM REPORT

 

 

Report Date :

09.09.2011

 

IDENTIFICATION DETAILS

 

Name :

ELECTROTHERM (INDIA) LIMITED

 

 

Registered Office :

A–1, Skylark Apartment, Satellite Road, Satellite, Ahmedabad – 380015, Gujarat

 

 

Country :

India

 

 

Financials (as on) :

31.03.2011

 

 

Date of Incorporation :

29.10.1986

 

 

Com. Reg. No.:

04-9126

 

 

Capital Investment / Paid-up Capital :

Rs.234.760 Millions

 

 

CIN No.:

[Company Identification No.]

L29249GJ1986PLC009126

 

 

Legal Form :

A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.

 

 

Line of Business :

Manufacturer and Exporter of Industrial Furnaces, Chemical Plants, Induction hardening and heating Systems and other associates process equipments for steel plants.

 

 

No. of Employees :

2500 (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A (61)

 

RATING

STATUS

PROPOSED CREDIT LINE

 

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

 

Maximum Credit Limit :

USD 29178600

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having fine track. Financial position of the company appears to be sound. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments.

 

The company can be considered good for normal 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.

 

 

INFORMATION DECLINED BY

 

Name :

Mr. Vivek

Designation :

Finance Manager

Date :

07.09.2011

 

 

LOCATIONS

 

Registered Office :

A–1, Skylark Apartment, Satellite Road, Satellite, Ahmedabad – 380 015, Gujarat, India

Tel. No.:

91-79-26768844

Mobile No.:

91-9825159296 (Mr. Shailesh Bhandari)

Fax No.:

91-79-26768855

E-Mail :

sec@electrotherm.com

ho@electrothrm.com

Website :

www.elctrotherm.com

Area:

3500 sq.ft. (Owned)

 

 

Factory 1 :

Engineering and Projects Division

Survey No. 72, Village : Palodia, Taluka : Kalol, District : Gandhinagar – 382 115, Gujarat, India

Tel. No.:

91-2717-234554/ 660550/ 55/ 56/ 57

Fax No.:

91-2717-237612/ 234616

 

 

Factory 2 :

Special Steel, DI Pipe and Electric Vehicle Division

Survey No. 325, Village : Samakhiyali, Taluka : Bhachau, District : Kutch, Gujarat, India

 

 

Factory 3 :

Wind Farm Project

Village : Dhank, Taluka : Upleta, District : Rajkot, Gujarat, India

 

 

Factory 4 :

Renewables Division

414/1, GIDC, Phase II, Vatva Industrial Area, Ahmedabad – 382 445, Gujarat, India

 

 

Factory 5 :

Transmission Line Tower Division

Village : Juni Jithardi, Taluka : Karjan, District : Vadodara, Gujarat, India

 

 

DIRECTORS

 

AS ON 31.03.2011

 

Name :

Mr. Mukesh Bhandari

Designation :

Chairman and CTO

 

 

Name :

Mr. Shailesh Bhandari

Designation :

Managing Director

 

 

Name :

Mr. Avinash Bhandari

Designation :

Joint Managing Director and CEO

 

 

Name :

Mr. Narendra Dalal

Designation :

Whole Time Director

 

 

Name :

Mr. Naveen Nakra

Designation :

Director

 

 

Name :

Mr. Nilesh Desai

Designation :

Director

 

 

Name :

Mr. Madhusudan Somani

Designation :

Director

 

 

Name :

Mr. Ram Singh

Designation :

Director

 

 

Name :

Mr. Pradeep Krishna Prasad

Designation :

Director

 

 

Name :

Mr. Ravikumar Trehan

Designation :

Director

 

 

Name :

Dr. Sudhir Kapur

Designation :

Director

 

 

Name :

Mr. Parth Gandhi

Designation :

Nominee Director (up to 12.08.2011)

 

 

Name :

Mr. Ashokkumar Lahiri

Designation :

Nominee Director (up to 04.02.2011)

 

 

KEY EXECUTIVES

 

Name :

Mr. Jigar Shah 

Designation :

Company Secretary

 

 

Name :

Mr. Shirish Maniar (w.e.f. 02.08.2010)

Designation :

Chief Financial Officer

 

 

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

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

2,280,575

19.87

Bodies Corporate

975,000

8.50

Sub Total

3,255,575

28.37

(2) Foreign

 

 

Individuals (Non-Residents Individuals / Foreign Individuals)

512,500

4.47

Sub Total

512,500

4.47

 

 

 

Total shareholding of Promoter and Promoter Group (A)

3,768,075

32.83

 

 

 

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

32,800

0.29

Financial Institutions / Banks

100

-

Insurance Companies

9,384

0.08

Foreign Institutional Investors

2,675

0.02

Any Others (Specify)

1,366,666

11.91

 

 

 

Foreign Financial Institutions

1,366,666

11.91

Sub Total

1,411,625

12.30

(2) Non-Institutions

 

 

Bodies Corporate

1,485,649

12.95

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs.0.100 Million

1,095,021

9.54

Individual shareholders holding nominal share capital in excess of Rs.0.100 Million

262,819

2.29

Any Others (Specify)

3,453,185

30.09

 

 

 

Foreign Corporate Bodies

2,000,000

17.43

Clearing Members

31,097

0.27

Trusts

1,368,533

11.92

Non Resident Indians

53,555

0.47

Sub Total

6,296,674

54.87

 

 

 

Total Public shareholding (B)

7,708,299

67.17

 

 

 

Total (A)+(B)

11,476,374

100.00

 

 

 

(C) Shares held by Custodians and against which Depository Receipts have been issued

-

-

 

 

 

Total (A)+(B)+(C)

11,476,374

100.00

 

Shareholding belonging to the category :

"Promoter and Promoter Group"

 

Name of the Shareholder

Total Shares held

Number

% of
grand total

 Western India Speciality Hospital Limited

975,000

 8.50 

 Shailesh Bhandari

848,275

 7.39 

 Mukesh Bhandari

809,500

 7.05 

 Rakesh Bhandari

512,500

 4.47 

 Ritu Bhandari

243,025

 2.12 

 Nagesh Bhandari

233,125

 2.03 

 Mukesh Bhanwarlal Bhandari HUF

60,000

 0.52 

 Indubala Bhandari

45,450

 0.40 

 Narendra Dalal

34,500

 0.30 

 Bhanwarlal Champalal Bhandari HUF

6,050

 0.05 

 Jyoti Bhandari

375

 0.00 

 Reema Bhandari

275

 0.00 

 Total

3,768,075

 32.83 

 

 

Shareholding belonging to the category
"Public" and holding more than 1% of the Total No.of Shares

 

Name of the Shareholder

No. of Shares

Shares as % of

Total No. of Shares

 IDBI Trusteeship Services Limited (India Advante Fund - VI)

1,368,333 

11.92 

 DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH

1,366,666 

11.91 

 Castleshine Pte Limited

1,000,000 

8.71 

 Leadhaven Pte Limited

1,000,000 

8.71 

 Web Businesses.Com Global Limited

345,147 

3.01 

 Lavish Packagers Limited

285,300 

2.49 

 Highland Finance and Investements Private Limited

250,000 

2.18 

 Froid Finance and Investments Private Limited

250,000 

2.18 

 Quantum Securities Private Limited

115,000 

1.00 

 Total

5,980,446 

52.11 

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer and Exporter of Industrial Furnaces, Chemical Plants, Induction hardening and heating Systems and other associates process equipments for steel plants.

 

 

Products :

ITC Code No.

 

Product Description

851420

Electronic Induction Furnace

851440

Induction Heating Equipment

8502

Electricity Power Generation

7207

Steel Billets

7213

Steel Bars

8711

Electric Vehicle

 

·         Induction Melting Furnaces

·         Induction Melting and Holding Furnaces

·         Electric Arc Furnaces

·         Submerged Arc Furnace

·         Metal Refining Konverter

·         Ladle Refining Furnaces

·         Induction Heating and Hardening Equipments

·         Electro DI Pipes

·         Electric Scooter

·         Steel, Special Steels and Stainless Steel

·         Electro TMT Plus Bars

·         Transformer

 

 

Exports :

 

Products :

Industrial Furnaces and Chemicals

Countries :

·         Bangladesh

·         Ghana

·         Ethiopia

·         Greece

·         Kenya

·         Mauritius

·         Pakistan

·         Sri Lanka

·         South Africa

·         Tanzania

·         Middle East

·         Zimbabwe

 

 

Terms :

 

Selling :

L/C, Cash and Credit ( 30-60- 90 Days)

 

 

Purchasing :

Cash and Credit ( 30-60- 90 Days)

 

 

PRODUCTION STATUS (AS ON 31.03.2011)

 

Particulars

Unit

Installed Capacity

 

Actual Production

A Saleable

 

 

 

1 Electronic Furnaces and other capital equipments

Sets

350

291

2 Wind Power generation

KW

Million

KWH

500

0.80

 

0

0.359

 

3 Battery Operated Vehicles

Nos.

150000

8190

4 Ferrous and Non-Ferrous Billets /Bars/Ingots *

MT

314000

247282

5 Duct Iron Pipes

MT

192000

82998

6 Sponge & Pig Iron #

MT

286000

3085

 

# Total Installed Capacity is of 2,86,000 MT

* Actual Production is excluding captive consumption

 

 

GENERAL INFORMATION

 

Customers :

End Users, OEM’s and Others

 

 

No. of Employees :

2500 (Approximately)

 

 

Bankers :

·         Bank of India

·         State Bank of India

·         Punjab National Bank

·         State Bank of Travancore

·         Corporation Bank

·         Bank of Baroda

·         Dena Bank

·         Oriental Bank of Commerce

·         Union Bank of India

·         Canara Bank

·         UCO Bank

·         ICICI Bank

·         State Bank of Indore

·         Standard Chartered Bank

·         Allahabad Bank

 

 

Facilities :

Secured Loans

31.03.2011

 

31.03.2010

 

Rs. in Millions

 

1. Working Capital Loans From Banks

(Secured by First Charge by way of Hypothecation of Stock in Trade and Receivables and Second Charge on all Movable Fixed Assets and Second Charge by way of Equitable Mortgage of all Immovable Properties situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch. Further the Loans are guaranteed by the Personal Guarantees of some of the Directors of the Company )

7222.040

4686.760

2. Long Term and Other Loans From

 

 

A. Banks

(Secured by First Charge by way of Equitable Mortgage of all Immovable Properties and Hypothecation of specified Movable Assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch and As Second Charge on all Stock in Trade and Receivables. Further the Loans are guaranteed by the Personal Guarantees of some of the Directors).

5727.230

6435.960

B. International Finance Corporation (USD 13 Millions)

(ECB Loan is secured by First Pari Passu charge over the movable Assets and First Pari Passu Charge on Immovable Assets) (Includes Interest accrued but not due Rs.5.830 Millions)

583.910

678.500

C. Vehicle Loans

(Secured by Hypothecation of Specific Vehicles)

12.430

9.300

3. Sales Tax Deferment

(Amount due within one Year Rs. Nil)

--

0.620

 

 

 

Total

 

13545.600

11811.140

 

 

Unsecured Loans

31.03.2011

 

31.03.2010

 

Rs. in Millions

A Short Term

 

 

From Banks

5422.760

1509.350

B Other Loan / Deposits / Advances

 

 

1. From Banks

2648.810

977.350

2. From International Finance Corporation (USD 10 Millions)

448.160

451.250

3. Directors

6.350

0.150

4. Customers and Others

549.160

404.180

5. Body Corporates

21.760

3.890

 

 

 

Total

 

9097.000

3346.170

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Mehta Loadha and Company

Chartered Accountants

Address :

Ahmedabad

 

 

Subsidiaries :

1.       Jinhua Indus Enterprises Limited

2.       Jinhua Jahari Enterprises Limited

3.       Bhaskarpara Coal Company Limited

4.       ET Elec-Trans Limited

5.       Hans Ispat Limited

6.       Shree Ram Electrocast Private Limited

7.       Shree Hans Papers Limited

8.       Electrotherm Mali SARL

 

 

Associates :

1. Ahmedabad Aviation and Aeronautics Limited

2. Crystal Real Estate Private Limited

3. Palace Tours and Air Charters Private Limited

4. Western India Speciality Hospital Limited

5. Mangalam Information Technologies Pvt. Limited

6. Liberty Finance and Leasing Company Private Limited

7. E-Motion Power Limited

8. Indus Elec-Trans Private Limited

9. Magnum Limited

10. Alwar Trading and Investment Company

11. Afghan Trading Private Limited

12. Bhandari Brothers Commercial Private Limited

13. Palanpur Reality Developers Private Limited

14. Jayshri Petro-Yarn Private Limited

15. Adroit Trading and Investment Company

16. EIL Hospitality Private Limited

17. EIL Realty Private Limited

18. EIL Software Private Limited

19. EIL Software Services Offshore Private Limited

20. EIL Technology Private Limited

21. Electrotherm Engineering and Projects Limited

22. Electrotherm Infrastructure Private Limited

23. Electrotherm Renewables Private Limited

24. Electrotherm Foundation.

25. Gujarat Mint Alloys Limited

26. Indus Real Estate Private Limited

27. ICS Commercial Private Limited

28. New Delhi Real Estate Private Limited

29. Palace Infrastructure Private Limited

30. S B Realty Developers Private Limited

31. Sun Infrapower Private Limited

32. Sun Residency Private Limited

33. Suraj Real Estate Private Limited

34. S N Advisory Private Limited

35. Suraj Advisory Services Private Limited

36. Bhandari Charitable Trust.

37. Airfones Innovatives Private Limited

38. BNB Real Estate Private Limited

39. Electrotherm Energy Holdings Limited

40. Electrotherm Solar Limited

41. Firefly Energy Limited

42. Indus Coils and Plates Limited

43. Inspira Solar Energy Limited

44. NET Architectures Private Limited

45. Bhandari Real Estate Private Limited

 

 

CAPITAL STRUCTURE

 

(AS ON 31.03.2011)

 

 

Authorised Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

25000000

Equity Shares

Rs.10/- each

Rs.250.000 Millions

25000000

6% Non – Cumulative Redeemable Preference Shares

Rs.10/- each

Rs.250.000 Millions

 

Total

 

Rs.500.000 Millions

 

 

Issued, Subscribed & Paid-up Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

11476374

Equity Shares

(Out of above shares, 9,53,275 shares are allotted on 13th November, 1995 as fully paid up bonus shares by capitalising General Reserve and Profit and Loss Account)

Rs.10/- each

Rs.114.760 Millions

12000000

6% Non – Cumulative Redeemable Preference Shares of Rs.10/- each fully paid up, Redeemable at Par (35,60,000 Preference Shares Redeemable not later then 11th March, 2025. 44,40,000 Preference Shares Redeemable not later then 1st April, 2025 and 40,00,000 Preference Shares Redeemable not later than 14th May, 2025)

Rs.10/- each

Rs.120.000 Millions

 

Total

 

Rs.234.760 Millions

 

 

 

 

 

 

 

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

234.760

234.760

234.760

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

7059.900

6806.320

4363.060

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

7294.660

7041.080

4597.820

LOAN FUNDS

 

 

 

1] Secured Loans

13545.600

11811.140

10319.760

2] Unsecured Loans

9097.000

3346.170

1973.920

TOTAL BORROWING

22642.600

15157.310

12293.680

DEFERRED TAX LIABILITIES

865.130

814.500

694.110

 

 

 

 

TOTAL

30802.390

23012.890

17585.610

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

15731.680

14512.790

6461.680

Capital work-in-progress

2335.040

1221.420

4510.220

 

 

 

 

INVESTMENT

1083.860

72.690

22.000

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
8487.500
4841.450
4521.580

 

Sundry Debtors
4820.540
3364.670
2483.870

 

Cash & Bank Balances
1175.510
1864.810
661.090

 

Other Current Assets
0.000
0.000
0.000

 

Loans & Advances
1989.020
2218.400
1512.240

Total Current Assets
16472.570
12289.330

9178.780

Less : CURRENT LIABILITIES & PROVISIONS
 
 

 

 

Sundry Creditors
5016.600
5336.000

2873.700

 

Other Current Liabilities
82.510
18.700

20.810

 

Provisions
63.860
114.560
83.920

Total Current Liabilities
5162.970
5469.260
2978.430

Net Current Assets
11309.600
6820.070
6200.350

 

 

 

 

MISCELLANEOUS EXPENSES

342.210

385.920

391.360

 

 

 

 

TOTAL

30802.390

23012.890

17585.610

 

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2011

31.03.2010

31.03.2009

 

SALES

 

 

 

 

 

Sales and Other Operational Income 

22968.930

20027.530

16827.760

 

 

Other Income

145.300

140.820

69.360

 

 

TOTAL                                     (A)

23114.230

20168.350

16897.120

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Material Cost

19797.900

13039.810

11896.160

 

 

(Increase)/Decrease in Stocks

(4827.390)

111.820

(903.280)

 

 

Manufacturing Expenses

2899.240

2631.730

2110.640

 

 

Employees Remuneration

645.930

517.970

389.510

 

 

Administrative, Selling and General  Expenses

1183.810

980.960

941.810

 

 

Research and Development Expenses

2.550

26.910

21.140

 

 

TOTAL                                     (B)

19702.040

17309.200

14455.980

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

3412.019

2859.150

2441.140

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

1924.820

1332.520

1150.470

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

1487.370

1526.630

1290.670

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

1077.760

723.760

517.910

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

409.610

802.870

772.760

 

 

 

 

 

Less

TAX                                                                  (H)

126.770

256.840

265.610

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

282.840

546.030

507.150

 

 

 

 

 

 

Prior Period Adjustment - Income Tax and Others

5.410

(8.060)

15.310

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

1494.030

1198.050

917.580

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

200.000

200.000

200.000

 

 

Proposed Dividend

 

 

 

 

 

Equity Shares

--

28.690

28.690

 

 

Preference Shares

--

7.200

7.200

 

 

Tax on Proposed Dividend

--

6.100

6.100

 

BALANCE CARRIED TO THE B/S

1582.280

1494.030

1198.050

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

3248.170

2454.790

2496.250

 

 

Stores & Spares

205.820

103.960

42.090

 

 

Capital Goods

34.880

357.190

489.010

 

TOTAL IMPORTS

3488.870

2915.940

3027.350

 

 

 

 

 

 

Earnings Per Share (Rs.)

 

 

 

 

-  Basic

25.12

46.14

45.70

 

- Diluted

25.12

46.14

45.70

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2011

Type

1st Quarter

 Sales Turnover

4723.480

 Total Expenditure

5000.540

 PBIDT (Excl OI)

(277.060)

 Other Income

14.610

 Operating Profit

(262.450)

 Interest

729.910

 Exceptional Items

0.000

 PBDT

(992.360)

 Depreciation

375.640

 Profit Before Tax

(1368.000)

 Tax

0.000

 Reported PAT

(1368.000)

Extraordinary Items       

9.200

Prior Period Expenses

0.000

Other Adjustments

0.000

Net Profit

(1358.790)

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2011

31.03.2010

31.03.2009

PAT / Total Income

(%)
1.22
2.71

3.00

 

 
 
 

 

Net Profit Margin

(PBT/Sales)

(%)
1.78
4.01

4.59

 

 
 
 

 

Return on Total Assets

(PBT/Total Assets}

(%)
1.27
3.00

4.94

 

 
 
 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.05
0.11

0.17

 

 
 
 

 

Debt Equity Ratio

(Total Liability/Networth)

 
3.93
2.93

3.32

 

 
 
 

 

Current Ratio

(Current Asset/Current Liability)

 
3.19
2.25

3.08

 

 

LOCAL AGENCY FURTHER INFORMATION

 

PROFILE

 

Subject is engaged in the manufacturing and marketing of induction furnaces, steel items and battery operated vehicles. In May, 2010, the Company acquired 100% of Shree Ram Electrocast Private Limited, a Company having its manufacturing complex at Siruguppa, Bellary, Karnataka, for pig iron with installed capacity of 1,20,000 million tons per annum and power generation plant of 2.5 megawatt. In June, 2010, the Company acquired 100% of Hans Ispat Limited, a Company having manufacturing facilities for Billet of 84000 tons per annum, TMT Rolling Mill of 1,20,000 tons per annum and SS Rolling Mill of 72000 tons per annum. The Company has also acquired the shareholding in Shree Hans Papers Limited, a subsidiary of Hans Ispat Limited. The Company’s subsidiaries include ET Elec-Trans Limited and Bhaskarpara Coal Company Limited. In March 2011, the Company incorporated a wholly owned subsidiary in the Republic of Mali, Electrotherm Mali SARL. For the fiscal year ended 31 March 2010, Electrotherm (India) Ltd's revenues increased 19% to RS20.17B. Net income available for common increased 1% to RS226M. Revenues reflect higher income from Special Steel Division . Net income was partially offset by an increase in material cost, higher employees cost and increased financial expenses. The company is engaged in manufacturing of induction furnaces and steel items.

 

 

SUNDRY CREDITORS DETAILS: (RS. IN MILLIONS)

 

Particulars

31.03.2011

31.03.2010

31.03.2009

 

 

 

 

Sundry Creditors

5016.600
5336.000

2873.700

 

 

 

 

Total

5016.600
5336.000

2873.700

 

 

OPERATIONS

During the year, the company has achieved a turnover of Rs. 22968.93 Millions representing an increase of 14.69% over the previous year turnover of Rs. 20027.53 Millions. The Net Profit for the year is Rs. 288.25 Millions as against RS. 537.97 Millions of the previous year.

 

 

AN OVERVIEW OF ECONOMY:

The global economy is recovering at different speed in various regions. The world economy is projected to grow at about 4.5 % in 2010 and 4.25% in 2011 (Source :IMF) These positive trends have led to lower risk perceptions, greater global financial stability and improved business sentiments. Having said so, there are some other problematic factors that may impact the future growth. There is economic instability in some countries in Europe. Ireland for example is facing threats of complete banking collapse. Also there has been a surge in prices of ommodities and oil leading to high levels of inflation, which has hit normal life especially in emerging economies like India. There is growing unrest in the Middle East and North African region which has affected Asian trade and market sentiments.

 

The Indian Economy is well on its way to regaining the high growth momentum see in the period immediately prior to the economic meltdown of 2008. India’s GDP grew at a healthy 8.6% in the year 2010-11 as against 8.00% in the previous year. The growth rate shall be 9.00% GDP at the start of fiscal 2011-12. This growth was largely owing to the significant growth in the agricultural sector at 5.4% (0.4% in 2009-10); the service and industrial sectors maintained their previous year’s momentum. These positive trends have led to lower risk perceptions, greater global financial stability and improved business sentiments. India is today rated as one of the most attractive investment destinations across the globe.

 

INDUSTRY STRUCTURE and DEVELOPMENT

 

A. ENGINEERING, CAPITAL EQUIPMENT AND PROJECTS DIVISION

Demand and production of steel in India has been rising continuously over the last few years. The steel ministry has projected the steel production to go up to 200 million tones by 2020 from the present level of around 66 million tones. While china’s per capita steel consumption over the last 10 years has hovered around 350 kgs, India’s per capita consumption is a meager 40 kg’s. Given this, the demand forecast of 200 million tones by 2020 does not seem unrealistic. They expect a sizeable portion of this demand to be met through the secondary steel making route given the various issue related to land and mining being faced by large primary producers in the

country today. More and more mini steel plants (0.3 to 0.6 million tones) through the induction route are expected to come up over the next 5 years to cater to regional demands as logistics cost plays a more critical role in PAN India Distribution of long steel products of large producers. New technologies which have been developed over the last few years will help in solving the key issue of refining steel produced through the induction route to bring it at par, with respect to quality, with the primary producers. The setting up of fully integrated mini steel plants with larger capacities (Iron ore 􀃆Kiln 􀃆Induction 􀃆rolling mill and CPP) is opening up new opportunities for companies like Electrotherm in the areas of material handling, scrap processing and pollution control. The company is gearing up to take advantage of these large opportunities by developing some of these new products which are

going to be necessary either for productivity improvement or for making the plants environmentally more compliant.

 

Developments

1. Induction Melting:

·         Bigger capacity furnace with improved efficiency to produce steel cheaper by about 600 / ton compared to smaller capacity furnace.

·         Development of continuous casting machine for smaller heat size. This helps improving their end customer’s productivity while still remain cost effective.

·         Efficient furnace for foundry.

·         Development of higher capacity induction melting furnace for aluminum.

·         Automation to improve operational efficiency and increase utilization factor up to 94 %.

 

2. Induction Heating and Hardening:

·         Enhancement in the operating frequency and power range of High frequency power supply.

·         Digital controller for all power supply above 10 Khz frequency.

 

3. Dynamic power factor correction system and Thyristor switched capacitor bank:

Dynamic power factor correction system being developed by the company is state of the art technology which gives superior response time helps maintaining constant power factor of the plant with fluctuating reactive power of the load.

 

4. Quality steel production through Induction Furnace:

Direct Reduced Iron (DRI) has increased for production steel in induction furnace to the tune of 70 % to 80%, which has aggravated the issue of higher Phosphorus and Sulfur level in steel produced through Induction Furnace route. The induction refining equipment helps to produce steel with lower Phosphorus and Sulfur. This has open up new avenue to those who uses induction furnace to produce steel using higher percentage of DRI and new route getting establish to produce quality steel in small size (50,000 to 2,50,000 tons / annum) which is economically competitive to ARC furnace route.

 

 

B. SPECIAL STEEL DIVISION

Steel Industry

World Steel forecasts that apparent steel use will increase by 5.9% to 1,359 mmt in 2011, following 13.2% growth in 2010. In 2012, it is forecast that world steel demand will grow further by 6.0% to reach a new record of 1,441 mmt. (Source: World Steel Association) India is the 5th largest producer of crude steel in the world and is expected to become the 2nd largest producer by 2015-16. India continues to maintain its lead position as the world’s largest producer of direct reduced iron (DRI) or sponge iron during January- December 2010, a rank it has held on since 2002.

Despite the recessionary trend continuing in the beginning of the year and restricted supply of iron ore from Hospet region, the steel production was not affected substantially. In the year 2010-11, the crude steel production in India was 68.2 MMT approximately, registering a growth of over 4% over previous year.

 

Secondary route in Domestic Steel production

In India, the secondary producers of steel are currently playing an important role in production and growth of steel industry. In the annual report for FY 2010-11, the Indian Ministry of Steel recognized the contribution of several relatively smaller and medium scale units such as Sponge iron plants, Mini Blast Furnace units, Electric Arc Furnaces, Induction Furnaces, which not only play an important role in production of secondary steel, but also contribute substantial value addition in terms of quality, innovation and cost effectiveness.

 

Per Capita Consumption of Finished Steel

The present per capita consumption of steel in the country is only around 49 kg against the world average of 182 kg. China growing and large economy like India registered a per capita steel consumption in excess of 400Kgs during 2009-10. A study has been commissioned through the Joint Plant Committee (JPC) during the 2010-11 to estimate the per capita demand for iron and steel in the rural sector of India and to determine the factors that can contribute to its enhancement. The findings of the study are expected to be finalized by June 2011. (Source: Ministry of Steel, India)

 

Share of Induction route

The SME sector in India has benefited largely from the ability to set up Mini Steel Mills with Induction route. The Induction furnace technology helps SMEs to set up Steel production facility within a short period of time and with reasonably small investment. Besides it also offers operational flexibility in terms of production, given the variation in the raw material availability. On the whole, for a mini steel mill, it is very economical to produce steel through the induction route. With the introduction of better technology and building of larger capacity induction furnaces, primarily by the efforts of Electrotherm, the total installed capacity for induction route of Steel production has steadily increased over the years.

 

DI Pipe Industry

Domestic DI pipe manufacturing capacity stood at about 1.2 MMT by the end of the year 2010-11. Present capacity utilisation is about 70-75% in the industry. It is to be noted that almost all major manufacturers have backward integration with in-house pig iron manufacturing facility. Most of them also have captive iron ore mines.

Domestic DI pipe demand grew steadily at the rate of 12% over the last five years and stood at around 1 MMT by the end of FY 2010- 11. There is additional demand that is being created through increasing investments by the local government bodies in installing new water supply facilities. This has yet to be serviced and presents a positive outlook for the DI Pipe market. Prices realisation of DI pipes were in the range of 42,000 to 48,000 during year 2010-11 with an average realisation of around 45000. Prices of DI pipes depend on basic raw material prices such as Pig Iron and prevailing demand-supply scenario for DI pipes. The Company has retained its position as third largest manufacturer of DI Pipe (by actual production), and is augmenting its capacity further.

Developments

The Company renewed the appointment of ECS (Eicher Consultancy Services, subsidiary of Price Waterhouse Coopers) to help it with productivity and EBITDA improvements through FY 2010-11. Several process improvements have been made in SMS, TMT Mill and Structural Mill to improve the productivity and optimize cost.

 

The Company is a leading manufacturer of DI Pipe and has commissioned its 128 mł Blast Furnace and new facility for DI Pipe production of higher diameter up-to 1200 mm. The Company also got BIS approval for higher sizes of DI Pipes up-to 1200 mm. The Marketing and Distribution Network for DIP has been expanded by opening offices across 8 states in the Country and experienced people have been leading the marketing function across the network. With the approval from Power Grid Corporation, the company has established credibility in the market and is poised to increase the production of angles for Transmission Line Tower (TLT) applications. The Company has also received BIS approval for its MS Billets which has improved its realization in the Gujarat market.

 

Electro TMT Plus bars have a lion’s share of Gujarat market and with the brand image, the price realizations are steadily improving and the product has been approved for supply to various large Government and private projects.

 

C. ELECTRIC VEHICLE DIVISION

Electric Vehicle market has seen an upward trend, in India, in the last quarter wherein there is growth in revenues of more than 45% due to the following:

a) Subsidy from the Central Government

b) Petrol Price hike

c) Better performance of YO bykes

They believe the petrol prices will continue to rise due to increasing demand and therefore electric vehicles will come forth as an alternative solution for the consumer over the period of time. YObykes will be able to take best advantage of this situation because of it being the longest standing brand in the market, its reputation of being the EV technology leader and vast network across India. Also, the Promoters of Electrotherm are starting an independent venture wherein they will produce batteries for deep discharge application. The technology they have acquired from an US based technology oriented company which has got the world class Microcell Carbon Foam technology for making the batteries for Deepdischarge application. They believe these batteries will be the game changer for Yobykes because of their ability to stand longer life cycles, higher energy density and its ability to take faster charge and discharge. They have started various initiatives in their division with objective to consolidate their position in the market and extract maximum from

this opportunity. The results of these initiatives will be visible from the end of this quarter.

 

INTERNAL CONTROL SYSTEM, IT SECURITY AND ADEQUACY

After successful implementation of SAP in major divisions, the company has rolled out SAP in other divisions during the year 2010-11. Company has gained enormously in terms of bringing transparency, improved operational efficiency and moreover the controls in the operations apart from other intangible benefits.

To further strengthen the Information control, the company revamped the whole IT infrastructure and built well equipped data center. The company has implemented complete suite of Microsoft solutions and signed Enterprise Agreement which made the company license compliant. Entire infrastructure solution runs on HP hardware platform. Enough redundancy has been built to take care of any contingency to ensure business continuity. The company has been secured from any external threats to the information system and data. The company has deployed Data Loss Prevention (DLP) solution to protect precious business data from theft, loss andpilferage. There had been no single incidence reported of virus attack or intrusions during the entire year. Robust back-up and recovery procedure has been built and practiced to ensure minimum down time to rebuild whole system in case of any technical failures or any catastrophe. The company has built secured and scalable data communication infrastructure to connect its plants and offices across the geographies of its presence.

 

 

FIXED ASSETS:

 

·         Free Hold Land

·         Leasehold Land

·         Building

·         Plant and Machinery

·         Furniture and Fixtures

·         Vehicles

 

 

WEBSITE DETAILS:

 

PROFILE:


Subject has been engineering metal melting industry since 1983. In Electrotherm from inception, R and D has been their core competency with a common focus on developing and adopting technologies to customize customer needs making it a key driver in their Multi-Divisional growth story. Electrotherm is the only Indian company with indigenously developed world class technologies of global scale. Their team focused with a Customer First attitude believes technology should be right-sized, with the process designed to minimize waste and selected to enhance product performance with an embedded attitude of customizing engineering and metallurgical solutions to customers that made Electrotherm grow into one of the market leaders in the metal melting industries in India and globally. Electrotherm today is a Multi-divisional ISO: 900:2000 certified global Company holding a 2,500,000 kW market share in the metal melting industry globally. Electrotherm is a research driven company with an appreciating asset in intellectual capital its primary source of their multi-divisional growth story. The company has developed robust processes with inbuilt learning and continuous improvements in every job performed. This develops effective product lifecycle management and is the foundation of their product innovations to ensure their customers achieve their top line growth. Engineering innovations for the global metal melting industry has been possible due to their focused 2,607 employees with a State-of-the-art manufacturing facilities and R and D centre manufactures a wide spectrum of products for the metal melting industry and electric vehicles and are manufactured in four different divisions of the company. Their products continually undergone research and development leading to innovations of global scale to suit the changing global environment or the customer requirements. The Customer Focus of each division in manufacturing is in tandem with the R and D to ensure their customers achieve their objectives for top line growth.


The major critical customized parts are manufactured in house under stringent quality control management and the finished products tested to withstand laid out quality parameters with Just-In-Time delivery management principle to prevent customer installation and operational cost overruns make achieving deadlines a reality. The real responsibility at Electrotherm is to care for the installed equipments work with a zero down time objective. This principle of servicing their customers any time anywhere has made them a truly global company. They cater to the domestic market while exports form major component of their turnover. They service the global markets around the world with specific focus upon Middle East, Turkey, Pakistan, Bangladesh and Africa while catering to 31 countries around the world. Electrotherm commands more than 50% market share in induction melting equipments used by the engineering and automotive industry in India. Electrotherm is a truly global company taking social responsibility in its stride as 'No engines means no pollution' says Mr. Mukesh Bhandari, Chairman and Chief Technology Officer, Subject A socially responsible Corporate Professional, who dreams to electrify the automotive and power sector-major polluters of the environment. Electrotherm has taken the first step in committing to making a pollution free world by introducing the YObyke electric scooters and setting up the wind farms and solar power plants and is also working upon to introduce electric three wheelers and hybrid bus.

 

 

HISTORY:

 

Story of Performance


Before Electrotherm was a company, it was a dream. This dream came true in 1983 with passion, persistence and performance of promoters. The mission was simple: to serve Indian Steel Industry by providing cutting-edge technology and pass on the benefits to the customers.


The Company ventured into manufacturing of equipments for melting metals at a time when capability of multinationals was accepted as a norm in India. Soon, Electrotherm envisioned the gap in technology and took upon them the task of indigenous development of Medium Frequency Induction Melting Furnace at a time when these furnaces were imported into India at exorbitant prices. But after Electrotherm’s inception, multinationals were compelled to open local assembly shops and offer reasonable terms and better services. The result was more convenience for the customers.


Soon, Electrotherm envisioned the gap in technology and took upon them the task of indigenous development of Medium Frequency Induction Melting Furnace at a time when these furnaces were imported into India at exorbitant prices. Electrotherm also took upon servicing induction furnaces in far-flung areas of the country.

Today, approximately over 25 million MT of steel is melted in India on Electrotherm furnaces. Electrotherm also has the distinction of manufacturing 3T to 40T Medium Frequency Induction Melting Furnaces for first time in the country. Electrotherm (India) Limited Factory - Electrotherm India Limited, Ahmedabad. ET Group / Corporate Profile / Success Story / History

 

 

MILESTONE:

 

1983

ELECTROTHERM received its - first order - of 350 KW/ 500 KG.

 

1984

Designed and developed India’s first Indigenous Solid State Generator of 1200 KW.

 

1989

ELECTROTHERM enters GLOBAL MARKET – Received orders from Ethiopia and Bangladesh.

 

1992

Developed and commissioned India’s first Integrated Stainless Steel manufacturing line incorporating MF Induction Melting Furnace, Metal Refining Konverter and DC Ladle Refining Furnace at Viraj Alloys Limited

 

1995

Developed and Commissioned a 12MT MF Induction Melting Furnace, 15 MT Metal Refining Konverter and 18 MT Twin Electrode DC Ladle Refining Furnace at Stainless India Jodhpur, a project of Mukand Limited

 

1995

Developed and commissioned the then Largest M.F. Induction Melting Furnace of the country at Shah Alloys Limited (7500KW /15 MT).

 

1996

Developed and Commissioned India’s First Indigenous DC Arc Furnace of 22 MT.

 

1997

Supplied three large MF Induction Melting Furnaces with DC Ladle Refining Furnace for world’s largest billet manufacturing facility through the route of Induction Melting Furnace at M/s Vishwas Steels Limited, Goa.

 

1999

Developed and Commissioned Bent Rail Hardening System at Digvijay Steel Industries, Batala.

 

1999

Developed and Commissioned India’s largest M.F. Induction Melting Furnace of 20 MT at Shah Alloys Limited

 

2001

Developed and Commissioned a 50MT Metal Refining Konverter at Shah Alloys Limited, Ahmedabad.

 

2004

Developed and Commissioned India’s largest M.F. Induction Melting Furnace of 25 MT at Bhagyalaxmi Steels, Aurangabad.

 

2005

AMA-Outstanding Entrepreneur Of The Year Award – 2005” in recognition of the contribution to industrial developments in India

 

2007

Automotive Product of the Year (Yo Bykes)

 

2008

Developed and Commissioned India’s largest Induction Melting Furnace of 30 T for Kalika Steels, Aurangabad

 

2009

Developed India’s largest Induction Melting Furnace of 40 T for Mahalaxmi Steels, Aurangabad

 

 

ACHIEVEMENTS

 

Awards and Accolades

 
Hard work, passion, talent and performance together mean only one thing– Success. They have received several National Awards

 

•   IMM-Binatone Award

•   National Award Udyog Patra

•   IEEMA Award

•   Vasvik Research Award and Dhatu Nayak Award for designing

•   State-of-the-art India’s largest MF Induction Furnace for 20 MT

 

 

PRESS RELEASE

 

CARE trims to BB/A4 ratings on Electrotherm India's bank facilities

 

EquityBites
19 August 2011

[What follows is the full text of the news story.]

19 August 2011 - Rating agency CARE yesterday downgraded the ratings on the long and short-term bank facilities of Indian induction furnaces manufacturer Electrotherm (India) Ltd (BOM:526608) to BB/A4 from BBB/A3+.

The move was triggered by the deterioration in the firm's financial risk profile and liquidity position caused by its debt-funded capital expenditure.

The ratings were further constrained by the continued underperformance of the firm's electric vehicle division and by the cyclical nature of the steel industry.

The firm's dominant foothold on the domestic induction furnace market and its diversified product offerings in the steel segment with captive sponge iron capacity and power plant partially compensate for these weaknesses.

 

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.46.18

UK Pound

1

Rs.73.64

Euro

1

Rs.64.95

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

7

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

7

--LEVERAGE

1~10

7

--RESERVES

1~10

7

--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

 

61

 

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

 

-

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.