MIRA
INFORM REPORT
|
Report Date : |
18.12.2012 |
IDENTIFICATION DETAILS
|
Name : |
ELECON ENGINEERING COMPANY LIMITED |
|
|
|
|
Registered
Office : |
Anand, Sujitra Road, Vallabh Vidyanagar – 388120, Gujarat |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2012 |
|
|
|
|
Date of
Incorporation : |
11.01.1960 |
|
|
|
|
Com. Reg. No.: |
04-001082 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.185.723 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L2959GJ1960PLC001082 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
BRDE00200E |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACE4644D |
|
|
|
|
Legal Form : |
A Public Limited Liability company. The company’s Share are Listed on the
Stock Exchange. |
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|
|
|
Line of Business
: |
Manufacturer and Exporter of Material Handling Equipments and
Reduction Gears. |
|
|
|
|
No. of Employees
: |
1311 (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 17000000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
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|
|
|
Comments : |
Subject is a well established and reputed company having fine track. Financial
position of the company appears to be sound. But in the current year their
appears dip in the profitability. However, trade relations are reported to be
fair. Business is active. Payments are reported to be regular and as per
commitment. The company can be considered for business dealing at usual trade
terms and condition. |
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 – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including
industrial deregulation, privatization of state-owned enterprises, and reduced
controls on foreign trade and investment, began in the early 1990s and has
served to accelerate the country's growth, which has averaged more than 7% per
year since 1997. India's diverse economy encompasses traditional village
farming, modern agriculture, handicrafts, a wide range of modern industries,
and a multitude of services. Slightly more than half of the work force is in
agriculture, but services are the major source of economic growth, accounting
for more than half of India's output, with only one-third of its labor force.
India has capitalized on its large educated English-speaking population to
become a major exporter of information technology services and software workers.
In 2010, the Indian economy rebounded robustly from the global financial crisis
- in large part because of strong domestic demand - and growth exceeded 8%
year-on-year in real terms. However, India's economic growth in 2011 slowed
because of persistently high inflation and interest rates and little progress
on economic reforms. High international crude prices have exacerbated the
government's fuel subsidy expenditures contributing to a higher fiscal deficit,
and a worsening current account deficit. Little economic reform took place in
2011 largely due to corruption scandals that have slowed legislative work.
India's medium-term growth outlook is positive due to a young population and
corresponding low dependency ratio, healthy savings and investment rates, and
increasing integration into the global economy. India has many long-term
challenges that it has not yet fully addressed, including widespread poverty,
inadequate physical and social infrastructure, limited non-agricultural
employment opportunities, scarce access to quality basic and higher education,
and accommodating rural-to-urban migration.
|
Source
: CIA |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
Fundamental Grade = 4/5 |
|
Rating Explanation |
It means company fundamental are usually strong |
|
Date |
December 2011 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
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 |
|
Mobile No.: |
91-9909917052 (Mr. Chirag) 91-9687672810 (Mr. Amit Patel) |
|
Fax No.: |
91-2692-236527/ 236457/ 227020 |
|
E-Mail : |
|
|
Website : |
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|
Area : |
25000 Sq. Ft |
|
Location : |
Owned |
|
|
|
|
Factory (Material
Handling Equipment Division / Gear Division / Alternate Energy Division) : |
Anand – Sojitra Road, Vallabh Vidyanagar – 388120, Gujarat, India |
DIRECTORS
As on 31.03.2012
|
Name : |
Mr. Prayasvin B. Patel |
|
Designation : |
Chairman and Managing Director |
|
Date of Birth/Age : |
54 Years |
|
Qualification : |
B. E. (Mechanical), M. B. A. (U. S. A) |
|
Experience : |
36 Years |
|
Date of Appointment : |
01.07.1983 |
|
|
|
|
Name : |
Mr. Pradip M. Patel |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Chirayu R. Amin |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Hasmuklal Parikh |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Amritlal C. Shah |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Jal Patel |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Prashant Amin |
|
Designation : |
Executive Director |
|
Date of Birth/Age : |
56 Years |
|
Qualification : |
M.B.A. (Finance)
(U.S.A.), M.B.A. (Eng. and Mngt.) |
|
Experience : |
31 Years |
|
Date of Appointment : |
01.06.2011 |
KEY EXECUTIVES
|
Name : |
Mr. Hemendra C. Shah |
|
Designation : |
Chief Financial Officer |
|
|
|
|
Name : |
Mr. Paresh M. Shukla |
|
Designation : |
Company Secretary |
|
|
|
|
Name : |
Mr. U. V. Phani-kumar |
|
Designation : |
Chief Executive Officer (MHE and EPC) |
|
Date of Birth/Age : |
41 Years |
|
Qualification : |
B. E. (Mechanical), PGTQM, Advanced Masters Program in Project
Management |
|
Experience : |
20 Years |
|
Date of Appointment : |
05.08.2010 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.09.2012
|
Category
of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
2122999 |
2.29 |
|
|
40702920 |
43.83 |
|
|
0 |
0.00 |
|
|
42825919 |
46.12 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
42825919 |
46.12 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
13717571 |
14.77 |
|
|
52625 |
0.06 |
|
|
278648 |
0.30 |
|
|
1201491 |
1.29 |
|
|
0 |
0.00 |
|
|
15250335 |
16.42 |
|
|
|
|
|
|
6388749 |
6.88 |
|
|
|
|
|
|
23391266 |
25.19 |
|
|
3034275 |
3.27 |
|
|
1970966 |
2.12 |
|
|
257678 |
0.28 |
|
|
11820 |
0.01 |
|
|
1114099 |
1.20 |
|
|
508808 |
0.55 |
|
|
3000 |
0.00 |
|
|
75561 |
0.08 |
|
|
34785256 |
37.46 |
|
Total Public shareholding (B) |
50035591 |
53.88 |
|
Total (A)+(B) |
92861510 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
92861510 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer and Exporter of Material Handling Equipments and
Reduction Gears. |
||||||||
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|
||||||||
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Products : |
|
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 |
|
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
|
No. of Employees : |
1311 (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 : |
(Rs.
In Millions)
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Thacker Butala Desai Chartered Accountant |
|
Address : |
Navsari, Gujarat, India |
|
|
|
|
Subsidiaries : |
Elecon Transmission International Limited, Mauritius |
|
|
|
|
Step Down Subsidiaries |
· Benzlers Systems AB, Sweden ·
Radicon Transmission UK Limited, U.K. ·
AB Benzlers, Sweden ·
Elecon USA Transmission Limited, USA ·
Benzlers Transmission A.S., Denmark ·
Benzlers Antriebstechnik GmbH, Germany ·
Benzlers TBA B.V., Netherlands ·
Benzlers Antriebstechnik Gesmbh, Austria ·
OY Benzlers AB, Finland ·
Benzlers Malaysia ·
Benzlers Italia s.r.l. |
|
|
|
|
Associates and Joint Ventures |
· Eimco Elecon (India) Limited ·
Elecon Australia Pty. Limited ·
Elecon Africa Pty. Limited ·
Elecon Singapore Pte. Limited ·
Elecon Middle East FZCO ·
Elecon Engineering (Suzhou) Company Limited,
China ·
Elecon Peripharals Limited |
|
|
|
|
Enterprises over which individual personnel have significant influence
: |
· Bipra Investments and Trusts Private Limited ·
Devkishan Investment Private Limited ·
K. B. Investments Private Limited ·
Elecon Information Technology Limited ·
Emtici Engineering Limited ·
Prayas Engineering Limited ·
Specialty 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 31.03.2012
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 |
|
|
Total |
|
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 |
|
|
|
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
185.723 |
185.723 |
185.723 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves &
Surplus |
4262.011 |
3760.286 |
3075.341 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
4447.734 |
3946.009 |
3261.064 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3709.288 |
2186.750 |
3328.770 |
|
|
2] Unsecured
Loans |
1019.833 |
2418.899 |
1886.989 |
|
|
TOTAL BORROWING |
4729.121 |
4605.649 |
5215.759 |
|
|
DEFERRED TAX
LIABILITIES |
446.728 |
410.645 |
402.585 |
|
|
|
|
|
|
|
|
TOTAL |
9623.583 |
8962.303 |
8879.408 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
4051.864 |
3611.246 |
3622.198 |
|
|
Capital work-in-progress |
417.137 |
107.705 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
351.100 |
363.455 |
56.757 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2881.508 |
3144.466 |
3151.846 |
|
|
Sundry Debtors |
7282.981 |
5475.923 |
5175.855 |
|
|
Cash & Bank Balances |
115.955 |
123.312 |
388.126 |
|
|
Other Current Assets |
40.173 |
32.111 |
0.000 |
|
|
Other Non – Current Assets |
597.934 |
1229.806 |
0.000 |
|
|
Loans & Advances |
1054.973 |
585.958 |
546.743 |
|
Total Current Assets |
11973.524 |
10591.576 |
9262.570 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
4547.505 |
3236.629 |
2946.948 |
|
|
Other Current Liabilities |
2358.846 |
2208.448 |
921.333 |
|
|
Provisions |
263.691 |
266.602 |
219.884 |
|
Total Current Liabilities |
7170.042 |
5711.679 |
4088.165 |
|
|
Net Current Assets |
4803.482 |
4879.897 |
5174.405 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
26.048 |
|
|
|
|
|
|
|
|
TOTAL |
9623.583 |
8962.303 |
8879.408 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
13316.719 |
11739.426 |
9719.848 |
|
|
|
Erection and other Charges |
0.000 |
0.000 |
743.857 |
|
|
|
Other Income |
74.279 |
284.306 |
247.718 |
|
|
|
TOTAL
(A) |
13390.998 |
12023.732 |
10711.423 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials Consumed |
7771.332 |
|
|
|
|
|
Changes in inventories of Finished Goods, Work-in-Progress and Stock-in-Trade |
70.731 |
(45.093) |
|
|
|
|
Manufacturing expenses and Erection charges |
960.302 |
1132.975 |
8968.160 |
|
|
|
Employee benefits expense |
730.881 |
563.946 |
|
|
|
|
Other expenses |
1756.011 |
1432.145 |
|
|
|
|
TOTAL (B) |
11289.257 |
9925.345 |
8968.160 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
2101.741 |
2098.387 |
1743.263 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
579.581 |
500.942 |
508.890 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1522.160 |
1597.445 |
1234.373 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
423.808 |
393.525 |
331.203 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
1098.352 |
1203.920 |
903.170 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
402.360 |
324.708 |
241.417 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
695.992 |
879.212 |
661.753 |
|
|
|
|
|
|
|
|
|
Add/ Less |
Adjustment of Prior period |
0.000 |
0.000 |
7.738 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
242.881 |
207.939 |
200.875 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
500.000 |
650.000 |
500.000 |
|
|
|
Dividend |
167.150 |
167.150 |
139.292 |
|
|
|
Tax on Dividend |
27.120 |
27.120 |
23.135 |
|
|
BALANCE CARRIED
TO THE B/S |
244.603 |
242.881 |
207.939 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Reduction Gears |
366.234 |
364.060 |
361.818 |
|
|
|
Conveying Equipments |
85.433 |
193.784 |
274.674 |
|
|
TOTAL EARNINGS |
451.667 |
557.844 |
636.492 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
560.726 |
495.490 |
481.586 |
|
|
|
Stores & Spares |
35.808 |
33.511 |
27.570 |
|
|
|
Capital Goods |
658.051 |
71.016 |
477.596 |
|
|
TOTAL IMPORTS |
1254.585 |
600.017 |
986.752 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
7.49 |
9.47 |
7.13 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2012 |
30.09.2012 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
2357.710 |
3296.720 |
|
Total Expenditure |
|
2042.190 |
2692.040 |
|
PBIDT (Excl
OI) |
|
315.520 |
604.680 |
|
Other Income |
|
42.120 |
17.340 |
|
Operating
Profit |
|
357.640 |
622.020 |
|
Interest |
|
149.300 |
163.680 |
|
Exceptional
Items |
|
0.000 |
0.000 |
|
PBDT |
|
208.340 |
458.340 |
|
Depreciation |
|
114.110 |
120.720 |
|
Profit
Before Tax |
|
94.230 |
337.610 |
|
Tax |
|
30.260 |
107.890 |
|
Profit after Tax |
|
63.970 |
229.730 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
63.970 |
229.730 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
5.20
|
7.31 |
6.18
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
8.25
|
10.26 |
9.29
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
6.85
|
8.48 |
7.01
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.25
|
0.31 |
0.28
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.68
|
2.61 |
2.85
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.67
|
1.85 |
2.27
|
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info
Agents |
Available in Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
Yes |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact person |
No |
|
11] |
Turnover of firm for last three years |
Yes |
|
12] |
Profitability for last three years |
Yes |
|
13] |
Reasons for variation <> 20% |
---------------------- |
|
14] |
Estimation for coming financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
---------------------- |
|
22] |
Litigations that the firm / promoter involved in |
---------------------- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking account |
---------------------- |
|
26] |
Buyer visit details |
---------------------- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if applicable |
Yes |
|
29] |
Last accounts filed at ROC |
Yes |
|
30] |
Major Shareholders, if available |
No |
|
31] |
Date of Birth of Proprietor/Partner/Director, if available |
No |
|
32] |
PAN of Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating, if available |
Yes |
REVIEW OF OPERATIONS
STANDALONE FINANCIAL
PERFORMANCE
For the year ended on 31st March, 2012, the Company has achieved Turnover of Rs.13316.719 Millions. as against the Turnover of Rs.11739.426 Millions. during the previous year, representing increase in Turnover of 13.44%
For the year ended on 31st March, 2012, the Company has achieved Earnings Before Interest, Depreciation and Amortization and Tax (EBIDTA) of Rs.2003.900 Millions. as against the EBIDTA of Rs.1771.400 Millions. during the previous year, representing increase in EBIDTA by 13.13%.
The Company holds total unexecuted orders worth Rs.12120.900 Millions. Out of which Rs.9130.070 Millions. is for the MHE division and Rs.29908.300 Millions. is for the Gear Division as on March 31, 2012. This will help them to continue to have sustainable growth in coming years.
OPERATIONS:
(OPENING NEW ASSEMBLY
CENTERS ACROSS THE WORLD)
Elecon group has initiated process to start assembly and sales offices in various largest and fastest growing economies of the world. The group plans to open similar locations in South Africa, Brazil, Ukraine/Russia (CIS) and UAE in the next 2 years. This helps the group to drive sales in new markets.
The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2/2011 dated 8th February, 2011, exempt Companies from attaching to its Balance Sheet, the individual Annual Reports of its subsidiary companies. As per the Circular, the consolidated financial statements of the Company and all its subsidiaries duly audited by its statutory auditors are included in the Annual Report.
Shareholders interested in obtaining the statement of Company’s interest in the subsidiaries or stand-alone financial statements of the subsidiary Companies may obtain the same by writing to the Company Secretary of the Company.
The annual accounts of subsidiary Companies are available for inspection by any investor at the registered office of the Company.
MANAGEMENT DISCUSSION
and ANALYSIS
INDUSTRY STRUCTURE
AND DEVELOPMENT
No country in today’s globalized world can be fully insulated from what happens in the global economy and India is no exception to the rule. As the country is increasingly integrated into the world, it cannot remain impervious to developments abroad.
The unfolding of the euro zone crisis and uncertainty surrounding the global economy have impacted the Indian economy causing drop in growth, higher current account deficit (CAD) and declining capital inflows. As in 2008, the transmission of the crisis has been mainly through the balance-of-payments (BoP) channel.
Export growth has decelerated in the third quarter of fiscal 2011-12, while imports have remained high, partly because of continued high international oil prices. At the same time, foreign institutional investment flows have declined, straining the capital account and the rupee exchange rate that touched an all-time low.
The manufacturing industry in India, has all the qualities which enhance economic development, increase the productivity of the manufacturing industry and face competition from the global markets. The Manufacturing industry in India is believed to have the potential of improving the economic condition of India.
Indian economy grew at 6.9% during 2011-12, which is less than the estimated growth rate. Except the last month of 2011-12, manufacturing and services sectors have also shown robust growth. Owing respect to the bumper wheat production that would compensate for the decline in manufacturing numbers.
Ther Company continued to perform with stability and maintained its growth momentum in the highly volatile market. The Company focused on cost control measures and product mix enrichment to sustain growth and profitability in the challenging year.
OPPORTUNITIES AND
THREATS
The developments over the last year in major economies of the world have not been encouraging. There is an apprehension that the process of global economic recovery that began after the financial crisis of the 2008 is beginning to stall and the sovereign debt crisis in the eurozone area may persist for a while.
Over the last few years sustained growth of a number of large emerging economies, especially the BRICS economies, has resulted in an increase in their share in the global GDP. As a consequence, the value addition in the world economy has been moving away from advanced countries towards what have been termed emerging economies. The decline in share is particularly marked in the case of the European Union (EU). The shift towards Asia has been significant and, within Asia, away from Japan to China and India. The increase in share of India, though less dramatic, is nevertheless of an orderthat places her as the fourth largest economy in PPP terms (i.e. purchasing power parity).
Opportunities in the manufacturing industry are in the technology and bio-technology areas. These are growing market segments with higher profit margins. Additionally, they are knowledge-dependent market segments that require highly specialized workers, which makes it difficult for low wage countries to compete in this market segment, thereby providing an edge to more industrialized countries. The strengths of the manufacturing industry are that it is relatively stable. Although the demand for manufacturing tends to fluctuate with the ups and downs of the economy, it is characterized by regular periods of recovery following any downturns.
Underlying the relative decrease in share of advanced economies in the global GDP, there has been a marked shift in the location of manufacturing. Emerging economies, namely China, Brazil, India, Indonesia have moved up in terms of their share in world manufacturing value added.
There is a perceptible decline in the share of developed countries in distribution of manufacturing value added and rise in the importance of emerging economies, like China, India, etc. The share of India in global merchandise exports increased significantly in last decade. It ranks 19th in the global order of exporting countries.
Though India’s industrial output unexpectedly slumped in March 2012 as high interest rates stifled expansion, deepening worries of an economic slowdown, India will continue to deliver the performance that will maintain a strong and steady growth momentum throughout the volatile global economic scenario.
India remains one of the fastest growing economies of the world. Country’s sovereign credit rating rose substantially over the years. Exports grew by 40.5 per cent in the first half of this fiscal and imports grew by 30.4 per cent. Foreign trade performance will remain key driver of growth.
Agriculture and Services sectors are expected to perform well, while Industrial growth pegged at 4-5 per cent and improve further as economic recovery resumes. In addition to that RBI is expected to lower policy interest rates, as inflationary pressures expected to ease in coming months. A low interest rate regime will encourage investment activity and push forward economic growth.
SEGMENT-WISE
PERFORMANCE
During the financial year 2011-2012, the Company has achieved a Turnover of Rs.13316.719 Millions as against Rs.11739.426 Millions. in the previous year, which shows a growth of 13.44% over the previous year.
The Turnover of Gear Division has increased to Rs.5739.220 Millions. from Rs.5224.070 Millions. in the previous year, which shows an increase of 9.86 %.
The Turnover of MHE Division has increased to Rs.7577.500 Millions. as against Rs.6515.350 Millions. in the previous year, which shows an increase of 16.30 %. Earnings before Interest, Depreciation and Amortization and Tax (EBIDTA)has increased to Rs.2003.900 Millions From Rs.1771.400 Millions in the previous year resulting into a increase of 13.13 %.
OUTLOOK
The world economy is in a state of flux with the euro rescue package still being implemented. The recent downgrading of 9 nations has further added to the uncertainty with a possibility of further default problems in Greece resurfacing. Assuming that there are no further failures in the euro region and the rescue packages are to be implemented, there would be a tendency for countries to resort to fiscal austerity which in turn will slow down these economies.
The USA, which will probably continue its upward movement, will not be able to propel the world economy on its own given that the emerging markets will also be under strain especially so on account of high commodity inflation which has invoked stringent monetary measures in these countries. Therefore, the overall global performance, which will have a bearing on trade flows and capital movements, is likely to at best be at present levels with marginal improvement towards the end of the year 2012-13.
The economic conditions in the country in the last fiscal have been challenging with inflation being the major factor driving economic policy. This has had a major impact on other economic variables with official projections being modified downwards along the year. Policy formulation has become even more difficult with the volatility witnessed in the forex market, where the rupee has tended to move downwards.
The Indian economy is expected to recover gradually in 2012-13 which is encouraging. However, the challenges remain on the policy fronts. Given that investment has been slack in 2011-12, it is expected that the government will come up with some big plans in the infrastructure space, so that the growth objective is achieved.
The Engineering Sector is expected to grow in the future and has a positive outlook owing to infrastructure development, favourable Government policies and new investments in Power Projects, Metals, Oil and Gas, and Petrochemicals industries. Further industrial and manufacturing growth will boost growth in the Engineering Sector.
The Material Handling Equipment is a Sub-Sector of Process Plant Equipment Sector which is expected to grow to Rs.301180.000 Millions by 2016-17 with a CAGR of 11%. The domestic production is expected to grow to Rs.350000.000 Millions by 2016-17 at a CAGR of 12% as per 12th Five years plan. The world market for Material Handling Equipment and systems is projected to increase more than 5% per year. As per 12th Five years plan, the demand in the Engineering Sector will grow at a CAGR of 16% over the next 5 years and will reach Rs.2806040.000 Millions by the end of year 2016-17. Their Company’s Gear Division being a part of this Sector will be benefited.
NEW BUSINESS STRATEGY
DEVELOPMENT
Being the largest manufacturer, in India, of Transmission Equipments, the Company has to adhere to the high quality standards to maintain its market share. The Company is building a new state of- the-art manufacturing plant as an expansion of the Gear Division at Anand to double the gear box manufacturing capacity using world class quality and to ensure on-time delivery within a short span of time. The new premises is named as “Bhanubhai Memorial Centre of Excellence”.
The new plant will produce internal components of the helical gear box and has a capacity of manufacturing 1000 gear boxes per month.
The overall efficiency and condition of the equipment as well as the selection of machines, work holding devices, tool management, swarf management, coolant management and work handling systems will be optimal, thus minimizing labour fatigue. The components will be produced in a dust-free and ecofriendly environment.
The Company values its customer’s business and aspire to create a world class gear business to serve the global needs of the market.
The construction of this modern facility will be another step towards the Company’s motto ‘Always a step ahead in Technology.
CONTINGENT
LIABILITIES
Rs. In Millions
|
Particular |
31.03.2012 |
31.03.2011 |
|
Claims against the Company not acknowledged as debt |
|
|
|
Disputed Excise Duty and Service Tax against Demand Notices received |
23.320 |
26.938 |
|
Disputed Sales Tax/Works Contract Tax |
34.755 |
34.755 |
|
Disputed Income Tax Demand-Disputed by Company |
92.854 |
107.965 |
|
Disputed Income Tax Demand-Disputed by Income Tax Authorities |
1.489 |
2.247 |
|
Service Tax disputed and paid under Protest |
19.192 |
-- |
|
Sales Bills Discounted under LC with Banks |
615.132 |
371.374 |
|
NexGen Energy Partners, LLC of USA has filed a case bearing no. 2011 CV 0066, against Reflecting Blue Technologies (RBT) of USA and the company, in the court of Ohio, USA on account of non performing of Wind Mill supplied through Relfecting Blue Technologies (RBT). The matter is pending in the court of Ohio, USA and amount of claim is unascertainable. |
Unascertained |
Unascertained |
|
The Company has provided Corporate Guarantee to Bank of Baroda, Dubai to the tune of GBP 7,216,000 and US $ 282,99,876 as a security for repayment of financial facility availed by Elecon Transmission International Limited, Mauritius, a Wholly-Owned Subsidiary of the Company. |
2028.074 |
-- |
|
Guarantees |
|
|
|
Guarantees issued by Company’s Bankers |
4551.310 |
4508.246 |
|
Corporate Guarantee provided to Swedish Pension Authority to the tune of SEK 15.00 Million as a security, in replacement of earlier guarantee given by erstwhile owner, for the purchase of pension insurances relating to the pension commitments on behalf of AB Benzlers Sweden, a step-down subsidiary of Elecon Transmission International Limited, Mauritius, a Wholly-Owned Subsidiary of the Company. |
115.496 |
105.773 |
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
RESULTS FOR THE QUARTER / HALF YEAR ENDED 30TH SEPTEMBER, 2012
Rs. In Millions
|
|
|
Quarter Ended |
Half Year Ended |
|
|
Sr No |
Particulars |
30.09.2012 (UnAudited) |
30.06.2012 (UnAudited) |
30.09.2012 (UnAudited) |
|
|
|
|
|
|
|
1 |
Income from
Operations |
|
|
|
|
|
a). Net Sales / Income from Operations (net of excise duty) |
3267.484 |
2321.465 |
5588.949 |
|
|
b). Other Operating Income |
29.234 |
36.249 |
65.483 |
|
|
Total Income from Operations
(net) |
3296.718 |
2357.714 |
5654.432 |
|
2 |
Expenses |
|
|
|
|
|
(a) Cost of materials consumed |
1793.529 |
1671.026 |
3464.556 |
|
|
(b) Purchase of stock-in-trade |
- |
- |
- |
|
|
(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade |
230.669 |
(114.794) |
115.874 |
|
|
(d) Employee benefits expense |
218.213 |
179.930 |
398.142 |
|
|
(e) Depreciation and amortisation expense |
120.723 |
114.113 |
234.836 |
|
|
(f) Other expenses |
449.633 |
306.024 |
759.239 |
|
|
Total Expenses |
2812.767 |
2156.299 |
4972.647 |
|
3 |
Profit / (Loss)
from Operations before other Income, finance costs & Exceptional Items
(1-2) |
483.951 |
201.415 |
681.785 |
|
4 |
Other Income |
17.337 |
42.118 |
59.456 |
|
5 |
Profit / (Loss)
from ordinary activities before Finance costs and Exceptional Items (3+4) |
501.288 |
243.533 |
741.241 |
|
6 |
Finance Costs |
163.678 |
149.304 |
309.400 |
|
7 |
Profit / (Loss) from
ordinary activities after finance costs but before Exceptional Item (5+6) |
337.610 |
94.229 |
431.841 |
|
8 |
Exceptional Items |
- |
- |
- |
|
9 |
Profit / Loss from
ordinary activities before Tax (7+8) |
337.610 |
94.229 |
431.841 |
|
10 |
Tax Expenses |
107.885 |
30.255 |
138.140 |
|
11 |
Net Profit / Loss
from ordinary activities after Tax (9-10) |
229.725 |
63.974 |
293.701 |
|
12 |
Extraordinary Item (Net of Tax Expense a Nil) |
- |
- |
- |
|
13 |
Net Profit / Loss
for the Period (11+12) |
229.725 |
63.974 |
293.701 |
|
14 |
Share of Profit / (Loss) of Associates* |
- |
- |
- |
|
15 |
Minority Interest* |
- |
- |
- |
|
16 |
Net Profit / (Loss)
after taxes, minority interest and share of profit / (Loss) of associates
(13+14+15)* |
229.725 |
63.974 |
293.701 |
|
17 |
Paid-up equity share capital (Face Value of the share a 21-) |
185.723 |
185.723 |
185.723 |
|
18 |
Reserves excluding Revaluation Reserves as per balance sheet of previous accounting year |
4555.709 |
- |
4555.709 |
|
19.1 |
Earnings per share (before extraordinary items) (of a 21- each) (not annualised) |
|
|
|
|
|
(a) Basic |
2.47 |
0.69 |
3.16 |
|
|
(b) Diluted |
2.47 |
0.69 |
3.16 |
|
19.11 |
Earnings per share (after extraordinary items) (of a 21- each) (not annualised) |
|
|
|
|
|
(a) Basic |
2.47 |
0.69 |
3.16 |
|
|
(b) Diluted |
2.47 |
0.69 |
3.16 |
|
A 1 |
PARTICULARS OF
SHAREHOLDING Public Shareholding |
|
|
|
|
|
-Number of Shares |
50035591 |
50152791 |
50035591 |
|
|
-Percentage of shareholding (%) |
53.88 |
54.01 |
53.88 |
|
2 |
Promoters and Promoters group shareholding" a). Pledged / Encumbered |
|
|
|
|
|
-Number of shares |
8874850 |
8874850 |
8874850 |
|
|
-Percentage of shares % (as a % of total shareholding of promoters and promoter group) |
20.72 |
20.78 |
20.72 |
|
|
-Percentage of shares % (as a % of total share capital of the company) |
9.56 |
9.56 |
9.56 |
|
|
b). Non-emcubered |
|
|
|
|
|
-Number of shares |
33951069 |
33833869 |
33951069 |
|
|
-Percentage of shares % (as a % of total shareholding of promoters and promoter group) |
79.28 |
79.22 |
79.28 |
|
|
-Percentage of shares % (as a % of total share capital of the company) |
36.56 |
36.43 |
36.56 |
|
|
|
|
|
|
|
B |
INVESTOR COMPLAINTS |
|
|
|
|
|
Pending at the beginning of the quarter |
Nil |
|
|
|
|
Received during the quarter |
6 |
|
|
|
|
Disposed off during the quarter |
6 |
|
|
|
|
Remaining unresolved at the end of the quarter |
Nil |
|
|
SEGMENT WISE REVENUE,
RESULTS AND CAPITAL EMPLOYED
Rs. In Millions
|
|
|
Quarter Ended |
Half Year Ended |
|
|
Sr No |
Particulars |
30.09.2012 (UnAudited) |
30.06.2012 (UnAudited) |
30.09.2012 (UnAudited) |
|
|
|
|
|
|
|
1 |
SEGMENT REVENUE |
|
|
|
|
|
Material Handling Equipment |
1908.727 |
1210.468 |
3119.195 |
|
|
Transmission Equipment |
1443.319 |
1252.415 |
2695.734 |
|
|
Others |
- |
- |
- |
|
|
Total |
3352.046 |
2462.883 |
5814.929 |
|
|
Less : Inter Segment Revenue |
55.328 |
105.169 |
160.497 |
|
|
Net Sales / Income
from Operations |
3296.718 |
2357.714 |
5654.432 |
|
|
|
|
|
|
|
2 |
SEGMENT PROFIT /
(LOSS) BEFORE TAX & INTEREST |
|
|
|
|
|
Material Handling Equipment |
293.064 |
113.978 |
407.042 |
|
|
Transmission Equipment |
263.210 |
174.514 |
437.724 |
|
|
Others |
- |
- |
- |
|
|
Total |
556.274 |
288.492 |
844.766 |
|
|
Less : |
|
|
|
|
|
a) Finance Cost |
163.678 |
149.304 |
309.400 |
|
|
b) Unallocated Corporate Expenses |
54.986 |
44.959 |
103.525 |
|
|
(net of unallocable income) |
|
|
|
|
|
Total Profit before
Tax |
337.610 |
94.229 |
431.841 |
|
|
|
|
|
|
|
3 |
CAPITAL EMPLOYED (Segment Assets -
Segment Liabilities) a) Segment wise Capital Employed |
|
|
|
|
|
Material Handling Equipment |
5474.408 |
6039.584 |
5474.408 |
|
|
Transmission Equipment |
4436.914 |
4579.009 |
4436.914 |
|
|
Others |
- |
- |
- |
|
|
b) Unallocated Capital Employed |
- |
- |
- |
|
|
Total Capital
Employed |
9911.322 |
10618.593 |
9911.322 |
STATEMENT OF ASSETS
AND LIABILITIES
Rs. In Millions
|
Sr No |
Particulars |
30.09.2012 (UnAudited) |
|
A |
EQUITY AND
LIABILITIES |
|
|
1 |
Shareholders' funds |
|
|
|
(a) Share Capital |
185.723 |
|
|
(b) Reserves & Surplus |
4555.709 |
|
|
(c) Money received against share warrants |
- |
|
|
Sub-total -
Shareholders' funds |
4741.432 |
|
2 |
Share application
money pending allotment |
|
|
3 |
Minority Interest |
|
|
4 |
Non-current
liabilities |
|
|
|
(a) Long - term borrowings |
845.870 |
|
|
(b) Deferred tax liabilities (net) |
467.027 |
|
|
(c) Other long-term liabilities |
812.819 |
|
|
(d) Long-term provisions |
43.887 |
|
|
Sub-total -
Non-current liabilities |
2169.603 |
|
5 |
Current liabilities |
|
|
|
(a) Short-term borrowings |
3856.992 |
|
|
(b) Trade payables |
4524.822 |
|
|
(c) Other current liabilities |
1843.647 |
|
|
(d) Short-term provisions |
39.679 |
|
|
Sub-total - Current
liabilities |
10265.140 |
|
|
TOTAL - EQUITY
& LIABILITIES |
17176.175 |
|
|
|
|
|
B |
ASSETS |
|
|
1 |
Non-current assets |
|
|
|
(a) Fixed assets |
4963.765 |
|
|
(b) Goodwill on consolidation* |
- |
|
|
(c) Non - current investments |
354.847 |
|
|
(d) Deffered tax assets (net) |
- |
|
|
(e) Long - term loans and advances |
190.869 |
|
|
(f) Other non-current assets |
615.044 |
|
|
Sub-total -
Non-current assets |
6124.525 |
|
2 |
Current assets |
|
|
|
(a) Current Investments |
- |
|
|
(b) Inventories |
2914.125 |
|
|
(c) Trade receivables |
7233.280 |
|
|
(d) Cash & cash equivalents |
74.028 |
|
|
(e) Short - term loans & advances |
719.395 |
|
|
(e) Other Current assets |
110.822 |
|
|
Sub-total - Current assets |
11051.650 |
|
|
TOTAL - ASSETS |
17176.175 |
Note:
(1) The aforesaid financial results were reviewed by the Audit Committee at its meeting held on November 1, 2012 and taken on record by the Board of Directors at its 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) The Shareholders and Creditors at the Court convened meetings of the Company held on October 22, 2012 and October 23, 2012 have approved the Scheme of Arrangement in the nature of Demerger and transfer between Prayas Engineering Limited, EMTICI Engineering Limited, Subject and Elecon EPC Projects Limited. The Scheme is now subject to approval of the Hon'ble High Court of Gujarat. Pending Court approval, no accounting impact of the Scheme has been given in the results.
(4) Previous quarters' figures have been regrouped / rearranged / recasted wherever necessary to make it comparable with the current quarter's figures.
AS PER WEBSITE
PRESS RELEASE
Business Consolidation and Elecon Group Restructuring
Creation of consolidated and focused MHE and PT business entities
Vallabh Vidyanagar, July 31, 2012: The Boards of Directors of Elecon Engineering Company Limited ("Elecon"), Prayas Engineering Limited ("Prayas"), EMTICI Engineering Limited ("EMTICI") and Aakaaish Projects Limited ("Aakaaish"), in their respective meetings held today, considered and approved Scheme of Arrangement under sections 391 to 394 of the Companies Act, 1956 between with Elecon, Prayas, EMTICI and Aakaaish and their respective shareholders and creditors ("Scheme")
Key highlights of the
restructuring
· Creation of focused and separate Material Handling Equipment ("MHE") and Power Transmission ("PT") entities
-
Consolidation
of PT related activities of Elecon Group in Elecon Engineering; and
-
Consolidation
of MHE related activities of Elecon Group in Aakaaish Projects (a wholly owned
subsidiary of Elecon Engineering)
Transaction Rationale
· Elecon Engineering is the No.1 player in the power transmission gears space in India. Elecon, post restructuring, would include in-house sales and marketing, foundries and fabrication units that is a fully vertically integrated
·
Aakaaish
Projects (Elecon-MHE) will be the No.3 player in the MHE space in India.
Aakaaish, post restructuring, would include in-house sales and marketing,
fabrication units and component manufacturing shops that is a fully vertically
integrated
·
The
restructuring would -
- Simplify the Group structure that is consolidated and focused on separate businesses of MHE and PT; and eliminate majority of intra-group transactions ;
-
Facilitate
deleveraging the balance sheet by raising funds at appropriate valuations for
both the businesses;
-
Management
focus enhancing operational and managerial efficiency;
-
Greater
visibility on the performance of individual businesses;
-
Cost
saving in terms of economies of scale, standardization and simplification of
business processes and productivity improvements; and
-
Business
integration, stronger financial position to enhance capabilities to face
competition more effectively
Transaction Summary
· Appointed Date of the Scheme will be April 1, 2012
·
Transfer
of MHE business from Elecon to Aakaaish for a cash consideration
·
Transfer
of PT and MHE business of Prayas into Elecon and Aakaaish respectively; Elecon
and Aakaaish to issue fresh equity shares to the shareholders of Prayas as
consideration
·
Transfer
of EMTICI's Gear and MHE related marketing and servicing business to Elecon and
Aakaaish respectively; Elecon and Aakaaish to issue fresh equity shares to the
shareholders of EMTICI as consideration
·
Scheme
will be subject to approval of High Court of Gujarat, shareholders and
creditors of the companies and statutory approvals
·
Proposed
restructuring likely to be completed by end of this financial year
Share Swap ratio
· The swap ratio recommended by the valuers and approved by the boards of all 4 companies are:
- 49 shares of Elecon (face value of Rs. 2/- each) for every 4 shares of Prayas (face value of Rs. 10/- each)
-
39
shares of ELECON (face value of Rs. 2/- each) for every 4 shares of EMTICI
(face value of Rs. 10/- each)
-
14
shares of Aakaaish (face value of Rs. 10/- each) for every 143 shares of Prayas
(face value of Rs. 10/-each)
-
3
shares of Aakaaish (face value of Rs. 10/- each) for every 19 shares of EMTICI
(face value of Rs. 10/- each)
·
On
a pro-forma basis, the Promoter Group will own 53.96% in Elecon and public
shareholders will own the balance 46.04%. Elecon will own 60.49% in Aakaaish
and Promoters will own the balance 39.51% in Aakaaish
Commenting on the restructuring, Mr. Prayasvin Patel, Group Chairman, Elecon said "MHE and PT businesses of Elecon are market leaders in their independent spheres contributing to Infrastructure and core-Industry needs of the country. Both face different economic challenges and need independent focus and therefore this step is a logical evolution. This transaction is a milestone event for Elecon Group that will significantly accelerate the pace of growth for the separate MHE and PT businesses."
Mr. Prashant Amin, Executive Director, Elecon Engineering said "MHE and PT divisions have grown significantly in the last few years and need business streamlining to face competitive challenges in future. Simplifying the group structure is a huge advantage to drive productivity improvements. Additionally, the businesses require capital to sustain growth. This transaction creates separate businesses entities that will enable fund raising and unlock shareholder value".
About Elecon
Engineering
Elecon Engineering Company Limited, headquartered in Vallabh Vidyanagar, (Gujarat) India and led by Shri Prayasvin Patel is a flagship company of the Elecon Group. It primarily operates via two divisions, MHE and PT. The Company operates two state-of-the-art manufacturing facilities, both located at Vallabh Vidyanagar, for manufacturing MHE and PT products respectively.
The MHE division is involved in manufacturing Bulk MHE and executing turnkey projects primarily in Steel, Power, Cement and Mining industries; it is the 3rd largest branded player in Indian MHE sector. The PT division manufactures transmission equipment and is the largest manufacturer of Industrial Gears in Asia and commands the largest market share in India.
About Prayas
Engineering
Prayas Engineering Limited, headquartered in Vallabh Vidyanagar, (Gujarat) India is a leading manufacturer of steel and non-ferrous castings, and engaged in manufacturing and fabrication of Couplings, Gearbox Components and MHE products like Idler, Pulley, automatic weighing, bagging machines etc. It operates two manufacturing facilities located in Vallabh Vidyanagar, (Gujarat) India and Savli, (Gujarat) India.
The MHE business is involved in manufacturing and fabrication of MHE products like Idler, Pulley, automatic weighing, bagging machines etc, servicing both Elecon and external customers
The PT business includes ferrous, non-ferrous and steel foundry, coupling and machining shops which primarily derive their revenues from PT division of Elecon Engineering
About EMTICI
Engineering
EMTICI Engineering Limited, headquartered in Vallabh Vidyanagar, (Gujarat) India is primarily involved in conducting sales, marketing and servicing related activities for the Elecon Group. It operates 18 branch offices along with country-wide sub-dealer network.
The MHE and PT business of EMTICI primarily involves marketing and servicing related activities for Elecon Engineering Company Limited and investment in foreign entities Elecon Middle East and Elecon Singapore Pte.
About Aakaaish
Projects
Aakaaish Projects Limited, headquartered in Vallabh Vidyanagar, (Gujarat) India is 100% subsidiary of Elecon Engineering Company Limited. Aakaaish proposes to engage in manufacture of Material Handling Equipments.
Advisors
· SSPA and Co. Chartered Accountants submitted report on the swap ratios to the Boards of Elecon, Prayas, EMTICI and Aakaaish
·
Keynote
Corporate Services Private Limited provided a fairness opinion to the Boards of
Elecon, Prayas, EMTICI and Aakaaish
·
PricewaterhouseCoopers
Private Limited acted as tax and regulatory advisors
·
Ambit
Corporate Finance Private Limited acted as financial advisors to Elecon
Disclaimer
· Certain statements in this 'Press Release' may not be based on historical information or facts and may be 'forward looking statements' within the meaning of applicable securities laws and regulations, including, but not limited to, those relating to general business plans and strategy of the company, its future outlook and growth prospects, future developments in its businesses, its competitive and regulatory environment and management's current views and assumptions, which may not remain constant due to risks and uncertainties. Actual results could differ materially from those expressed or implied. The company assumes no responsibility to publicly amend, modify or revise any statement, on the basis of any subsequent development, information or events, or otherwise.
·
This
'Press Release' does not constitute a prospectus, offering circular or offering
memorandum or an offer to acquire any shares and should not be considered as a
recommendation that any investor should subscribe for or purchase any of the
company's shares.
PERFORMANCE OF ELECON
ENGINEERING COMPANY LIMITED
12TH MAY,
2012
NOTE
STANDALONE
FOR THE FY 12
(Rs. In Millions)
|
Particulars (TURNOVER) |
FY12 |
FY11 |
Growth (%) |
|
Material
Handling Equipments |
7580.000 |
6520.000 |
16 |
|
Gear |
5740.000 |
5220.000 |
10 |
|
Total |
13320.000 |
11740.000 |
13 |
|
Particulars |
FY12 |
FY11 |
Growth (%) |
||
|
Turnover |
13320.000 |
11740.000 |
13 |
||
|
PBT |
1098.000 |
1204.000* |
997.000** |
(9)* |
10** |
|
PAT |
696.000 |
879.000* |
672.000** |
(21)* |
4** |
*FY11 – PBT and PAT including gain on sale of investments Rs. 2070.000 Millions
**FY11 – PBT and PAT excluding gain on sale of investments Rs.2070.000 Millions
ORDER BOOKED DURING
THE YEAR
(Rs. In Millions)
|
Division |
Up to 11th May 2012 For FY 12-13 |
For FY 11-12 |
For FY 10-11 |
|
Material
Handling Equipments |
3360.000 |
6800.000 |
10850.000 |
|
Gear |
450.000 |
530.000 |
6140.000 |
|
Total |
3810.000 |
1210.000 |
16990.000 |
UNEXECUTED ORDERS AS
ON
(Rs. In Millions)
|
Division |
As on 11th May 2012 |
As on 31st March 2012 |
As on 31st March 2011 |
|
Material
Handling Equipments |
12160.000 |
9130.000 |
10590.000 |
|
Gear |
3060.000 |
2990.000 |
3250.000 |
|
Total |
15220.000 |
12120.000 |
13840.000 |
QUARTERWISE
ORDERBOOKING
(Rs. In Millions)
|
Division |
Mar-09 |
Jun-09 |
Sep-09 |
Dec-09 |
Mar-10 |
Jun-10 |
Sep-10 |
Dec-10 |
Mar-11 |
Jun-11 |
Sep-11 |
Dec-11 |
Mar-12 |
|
MHE |
450.000 |
660.000 |
750.000 |
810.000 |
890.000 |
4140.000 |
960.000 |
2870.000 |
2880.000 |
3290.000 |
1160.000 |
1260.000 |
1090.000 |
|
Gear |
840.000 |
810.000 |
1170.000 |
1120.000 |
1270.000 |
1850.000 |
1360.000 |
1360.000 |
1570.000 |
1500.000 |
1240.000 |
1060.0000 |
1500.000 |
|
Total |
1290.000 |
1470.000 |
1920.000 |
1930.000 |
2160.000 |
5990.000 |
2320.000 |
4230.000 |
4450.000 |
4790.000 |
2400.000 |
2320.000 |
2590.0000 |
QUARTERWISE
UNEXECUTED ORDERS
(Rs. In Millions)
|
Division |
Mar-09 |
Jun-09 |
Sep-09 |
Dec-09 |
Mar-10 |
Jun-10 |
Sep-10 |
Dec-10 |
Mar-11 |
Jun-11 |
Sep-11 |
Dec-11 |
Mar-12 |
|
MHE |
1388.000 |
12690.000 |
11770.000 |
11050.000 |
6740.000 |
9300.000 |
8430.000 |
9620.000 |
10590.000 |
12280.000 |
11700.000 |
11180.000 |
9130.000 |
|
Gear |
2390.000 |
2230.000 |
2470.000 |
2570.000 |
2460.000 |
3290.0000 |
3350.000 |
3250.000 |
3250.000 |
3760.000 |
3450.000 |
3060.000 |
2990.000 |
|
Total |
16270.000 |
14920.000 |
14240.000 |
13620.000 |
9200.000 |
12590.000 |
11780.000 |
12870.000 |
13840.000 |
16040.000 |
15150.000 |
14240.000 |
12120.000 |
CONSOLIDATED
FINANCIALS ARE AS UNDER:-
Consolidated
(Rs. In Millions)
|
Particulars
(TURNOVER) |
FY12 |
FY11# |
|
Material Handling Equipments |
7540.000 |
6500.000 |
|
Gear |
8290.000 |
6020.000 |
|
Others |
300.000 |
320.000 |
|
Total |
16130.000 |
12840.000 |
(Rs. In Millions)
|
Particulars |
FY12 |
FY11# |
|
|
Turnover |
16130.000 |
12840.000 |
|
|
PBT |
1032.000 |
1227.000* |
1020.000** |
|
PAT |
611.000 |
900.000* |
693.000** |
# FY 11 Consolidated data includes 4 months financial of BR Group and 12months financials of other companies.
*FY11 – PBT and PAT including gain on sale of investments Rs. 207.000 Millions of Elecon.
**FY11 – PBT and PAT excluding gain on sale of investments Rs.207.000 Millions of Elecon.
The Company is having live enquiries of more than Rs.60000.000 Millions as on 30th April, 2012.
In the year Rs. 870.000 Millions have been capitalized as Fixed Assets. Out of which Rs. 560.000 Millions is pertaining to MHE and Rs. 310.000 Millions is pertaining to Gear.
The Board of Directors at its meeting held on 12th May, 2012 recommended dividend of Rs.1.80 per Equity Share of Rs.2 each.
Major Orders in the FY 11 – 12
|
Customers |
Description |
Value (Rs.
in Millions) |
|
NMDC Limited Apr' 11 |
Downhill conveying system
Engineering, Design Manufacturing Procurement, Testing at works/site,
Installation, erection, testing, commissioning as per technical specification,
For the Kumaraswamy Iron Ore Project, Karnataka State. |
1764.900 |
|
BHEL,
Bangalore Nov '11 |
Supply of
CHP Machines , Ballary TPS UNIT-3 of 700 Mw |
393.900 |
|
Mundra Port and SEZ Limited April' 11 |
For Design and Engineering, and
supply of Materials Handling
System for Mundra Port
and Special Economy Zone Limited, Mundra |
298.200 |
|
BHEL,
Barauni Sept.'11 |
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 Stacker Cum Reclaimer |
297.200 |
|
BHEL-ISG
Banglore NMDC Steel Plant at Nagamar Sept'11 |
Supply
Erection and Commissioning of 4 sets wagon tippler with side arm charger and
commissioning spares for RHMS pkg. 1 project of
M/s. NMDC steel plant at Nagamar, C.G. |
281.600 |
|
Lanco Infratech Limited Jun '11 |
For Design, engineering
Manufacture, inspection and Testing at works, Transportation, supervision of
erection, testing, commissioning and performance of complete Wagon Tippler
packages along with side arm charges, Apron Feeder, dribble conveyor etc.
alongwith all Auxiliaries and Accessories for LVPL : 2*660 MW thermal Power
Plant at Mandav, District - Wardha Maharashtra. |
254.600 |
|
Ultra Tech
Cement Limited Sep' 11 |
Supply of
5 Nos Coal and Additives Stacker and Reclaimer for unit: Rajashree Cement
works - IV, Aditya Nagar, supply of 3 Nos Coal Stacker and
Reclaimer for Unit: Rawan Cement Works - II, Raipur, Chhattisgarh. |
234.900 |
|
BSBK
Engineers Private Limited Feb' 12 |
Supply of
Equipments for Augmentation of CHP 1*500 MW Kothagudam TPS,Stage -IV,Unit-11
of APGENCO |
180.000 |
|
Mcnally
Bharat Engg Company Limited,-Kolkata Nov' 11 |
Supply Of
2 No.S Barrel Type Blender Reclaimers For BHEL NMDC Iron and Steel
Plant,Nagmar Project A/C MBE |
170.000 |
|
Reflecting
Blue Technologies Oct. '11 |
Six Turbo
winds T600-48DS. |
165.000 |
|
Shri Bajrang Power and Ispat Oct. '11 |
Supply of design engineering
manufacture and supply of stacker cum Reclaimer machines total 2 quantity
price per set 7,75,00,000 |
155.000 |
|
The Indure Private Limited Feb' 12 |
Transportation
and Erection and Commissioning of Reversible Stacker Cum Reclaimer for 2*525
MW Monnet Thermal Power Project, Angul, Orissa. |
129.500 |
|
Tec
Pro-Chennai Nov' 11 |
Supply of
1 No .Reversible Stacker -cum-Reclaimer With bucket wheel, Hydraulic and VVVf
Drives |
104.800 |
|
ADANI
Hazira Port Private Limited (AHPPL) Apr' 11 |
Design,
Engineering and Supply of Material Handling System (Supply of Pulleys, Idlers
and Internal) scrapper. |
98.000 |
|
UltraTech, Gujarat Sept.'11 |
Supply of Jetty Conveyor Material |
89.000 |
Recent Major Orders in the FY 12 - 13
|
Customers |
Description |
Value (Rs. in Millions) |
|
NTPC -
Mauda Super Thermal Power Project - May'12 |
Installation
services for main equipments, Structural Work, Civil works and Ex -
Manufacturing work of dispatch price for mandatory spares. |
2723.300 |
|
Cethar Limited-Tamilnadu Apr'12 |
Design,
Manufacturing, Supply and E and C of 2 nos. wagon tippler and accessories for
SKS power generation Limited, Raigarh - (4*300 MW ) |
194.500 |
|
Cethar Limited-Tamilnadu Apr'12 |
Design,
Manufacturing, Supply and E and C of 1 nos. stacker cum reclaimer for SKS power
generation Limited, Raigarh - (4*300 MW ) |
113.000 |
|
Shree Cement Limited Rajasthan -
Apr'12 |
Stacker and Reclaimer |
108.000 |
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 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.54.63 |
|
|
1 |
Rs.88.40 |
|
Euro |
1 |
Rs.71.86 |
INFORMATION DETAILS
|
Report Prepared
by : |
NTH |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--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 |
NO |
|
--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 |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.