MIRA
INFORM REPORT
|
Report Date : |
27.02.2012 |
IDENTIFICATION DETAILS
|
Name : |
SHRIRAM EPC LIMITED |
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|
|
|
Registered
Office : |
Sigappi Achi Building, 4th Floor, 18/3 Rukmini Lakshmipathi
Road, Egmore, Chennai – 600008, Tamilnadu |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
12.06.2000 |
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|
Com. Reg. No.: |
18-45167 |
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Capital
Investment / Paid-up Capital : |
Rs.442.624
Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L74210TN2000PLC045167 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHES20276E |
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|
|
|
PAN No.: [Permanent Account No.] |
AAFCS1410C |
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|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchange. |
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|
Line of Business
: |
Subject is a service provider of integrated design, engineering,
procurement, construction, and project management services geared towards the
development of renewable energy projects, process and metallurgy and
municipal service projects throughout India. |
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|
|
|
No. of Employees
: |
350 [Approximately] |
RATING & COMMENTS
|
MIRA’s Rating : |
A (62) |
|
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 19000000 |
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|
|
|
Status : |
Good |
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|
|
Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a part of Shriram Group. It is an established company having fine track. Financial position of
the company appears to be sound. Trade relations are reported as fair. Business
is active. Payments are reported to 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.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered / Administrative Office : |
Sigappi Achi Building, 4th Floor, 18/3 Rukmini Lakshmipathi
Road, Egmore, Chennai – 600008, Tamilnadu, India |
|
Tel. No.: |
91-44-49015678/49005555 |
|
Fax No.: |
91-44-49015655/49005599 |
|
E-Mail : |
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|
Website : |
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Head Office : |
No.9, Vanagaram Road, Ayanambakkam, Chennai - 600095,
Tamilnadu, India |
|
Tel. No.: |
91-44-26531592/3572/3313/3109 |
|
Fax No.: |
91-44-26532780 |
|
|
|
|
Factory : |
LOCATED AT: ·
Puducherry ·
Chennai ·
Gummidipoondi ·
Umbergaon (Gujarat) |
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|
|
|
Branch Office : |
8 - IT Chambers, 8th Floor; Mani Square, 164/1 Maniktala Main Road, E M, Bypass, Kolkata - 700 054, West Bengal, India Tel : 91-33-30011800/1900 Fax : 91-33-30011942 Email : shriramepc_kol@vsnl.net Unit No.309-310-311, Tel : 91-124-4001341/42/43/44 Fax : 91-124-4001345 Email : shriramepc@airtelmail.in Located at Mumbai, |
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|
|
|
Overseas Office : |
Netherland’s Office Shriram EPC Europe BV, 's-Gravelandseweg, 3343125 BK, Schiedam Tel : +31(0)10-2350 900 Email : info@shriramepc.eu Website : www.shriram.eu Shriram EPC Add.: Room 2426E, 24th floor, Building B, Wantong New
World, No.2, Fuwai treet, Xicheng District, Tel : 0086-10-68024682 Email : shriramepc.bj@gmail.com |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. Arun Duggal |
|
Designation : |
Chairman |
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|
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|
Name : |
Mr. T Shivaraman |
|
Designation : |
Managing Director |
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|
Name : |
Mrs. Vathsala Ranganathan |
|
Designation : |
Director |
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|
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|
Name : |
Mr. S R Ramakrishnan |
|
Designation : |
Director |
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|
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|
Name : |
Mr. R Sundararajan |
|
Designation : |
Director |
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|
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|
Name : |
Mr. R S Chandra |
|
Designation : |
Director |
|
|
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|
Name : |
Mr. Sunil Varma |
|
Designation : |
Director |
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|
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|
Name : |
Mr. S Krishnamurthy |
|
Designation : |
Director |
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|
|
|
Name : |
Mr. K Madhava Sarma |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sunil K Kolangara |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. S Bapu |
|
Designation : |
Director |
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|
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|
Name : |
Mr. P D Karandikar |
|
Designation : |
Director |
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|
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|
Name : |
Mr. Amjad Shariff |
|
Designation : |
Joint Managing Director |
KEY EXECUTIVES
|
Name : |
Mr. K. Suresh |
|
Designation : |
Company Secretary |
|
|
|
|
Name : |
Mr. R. Dharmarajan |
|
Designation : |
Chief Financial Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2011
|
Category of
Shareholder |
Total No. of
Shares |
Total
Shareholding as a % of total No. of Shares |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
5,001,995 |
11.28 |
|
|
12,460,123 |
28.10 |
|
|
17,462,118 |
39.38 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
17,462,118 |
39.38 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
1,728,407 |
3.90 |
|
|
317,646 |
0.72 |
|
|
2,885,034 |
6.51 |
|
|
4,931,087 |
11.12 |
|
|
|
|
|
|
2,907,045 |
6.56 |
|
|
|
|
|
|
1,248,873 |
2.82 |
|
|
401,406 |
0.91 |
|
|
17,387,755 |
39.22 |
|
|
2,262 |
0.01 |
|
|
26,240 |
0.06 |
|
|
13,481,762 |
30.41 |
|
|
54,975 |
0.12 |
|
|
35,737 |
0.08 |
|
|
3,786,779 |
8.54 |
|
|
21,945,079 |
49.49 |
|
Total Public shareholding (B) |
26,876,166 |
60.62 |
|
Total (A)+(B) |
44,338,284 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total (A)+(B)+(C) |
44,338,284 |
- |
BUSINESS DETAILS
|
Line of Business : |
Subject is a service provider of integrated design, engineering, procurement,
construction, and project management services geared towards the development
of renewable energy projects, process and metallurgy and municipal service
projects throughout India. |
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Products : |
|
PRODUCTION STATUS [AS ON 31.03.2011]
|
Particulars |
31.03.2011 Units Produced |
|
|
|
In
Nos |
In
MWs |
|
Wind Turbine Generators – 250 KW |
112 |
32.80 |
NOTE: The installed capacities have not been
disclosed since they are variable subject to utilization of manufacturing
facilities given the nature of its operations.
GENERAL INFORMATION
|
Customers : |
·
Ahemedabad Urban
Development Corporation ·
Birla White ·
Chennai Petroleum
Corporation Limited ·
Cochin Refineries
Limited ·
·
Kerala Feeds Limited ·
·
Metallurgical and
Engineering Consultants ( ·
Indo Rama Synthetics ( ·
Jindal Steel and Power
Limited ·
Laxmi Energy and Foods
Limited ·
Rashtriya Ispat Nigam
Limited ( ·
Sree Jayajothi Cements
Limited ·
Konkola Copper Mines
plc, ·
National Mineral
Development Corporation ·
Reliance Industries
Limited ·
Steel Authority of India
Limited ·
Karnataka Urban
Infrastructure Development and Finance Corporation ·
·
Orient Green Power
Company Limited ·
Tata Steel ·
Tamilnadu Water Supply
and Drainage Board ·
Vedanta Group ·
Prakash Industries
Limited |
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No. of Employees : |
350 [Approximately] |
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Bankers : |
·
The Hongkong And Shanghai Banking Corporation
Limited, 76, Cathedral Road, Chennai-600086, Tamilnadu, India ·
Indian Bank, Thousand Light Branch, Kannammai Building,
611, Anna Salai, Chennai - 600 006, Tamilnadu, India ·
Indusind Bank Limited ·
Punjab National Bank ·
Citi Bank Limited ·
State Bank of India |
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Facilities : |
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Banking
Relations : |
-- |
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Financial Institutions : |
L and T Infrastructure Finance Company Limited |
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|
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Auditors : |
|
|
Name : |
Deloitte Haskins and Sells Chartered Accountants |
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|
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Subsidiaries : |
·
Shriram EPC (Singapore) Pte Ltd ·
Blackstone Group Technologies (Private) Limited ·
Chemprojects Consulting Private Limited |
|
|
|
|
Associates: |
·
Haldia Coke and Chemicals Private Limited (with
effect from 29.06.2010) ·
Ennore Coke Limited (upto 21.06.2010) ·
Ennore Coke Limited (Subsidiary of Haldia Coke
and Chemicals Private Limited (with effect from 01.07.2010) ·
Shriram SEPL Composites Private Limited ·
Shriram Angerlehner Composites Private Limited |
|
|
|
|
Jointly Controlled Entities: |
·
Hamon Shriram Cottrell Private Limited ·
Leitner Shriram Manufacturing Limited |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
65000000 |
Equity Shares |
Rs.10/- each |
Rs.650.000 Millions |
|
20000000 |
Convertible Preferences Shares |
Rs.10/- each |
Rs.200.000 Millions |
|
|
Total |
|
Rs.850 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
44262399 |
Equity Shares |
Rs.10/- each |
Rs.442.624
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 |
442.624 |
439.138 |
433.489 |
|
|
2] Share Application Money |
0.197 |
0.282 |
0.000 |
|
|
3] Reserves & Surplus |
4421.791 |
3761.910 |
3338.025 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
5] Employee Stock Option Outstanding |
15.046 |
12.642 |
23.872 |
|
|
NETWORTH |
4879.658 |
4213.972 |
3795.386 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
10697.560 |
5056.451 |
2401.520 |
|
|
2] Unsecured Loans |
1424.763 |
1252.761 |
252.867 |
|
|
TOTAL BORROWING |
12122.323 |
6309.212 |
2654.387 |
|
|
DEFERRED TAX LIABILITIES |
289.364 |
280.213 |
154.280 |
|
|
|
|
|
|
|
|
TOTAL |
17291.345 |
10803.397 |
6604.053 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1360.049 |
1416.911 |
1030.169 |
|
|
Capital work-in-progress |
1.230 |
0.109 |
35.354 |
|
|
|
|
|
|
|
|
INVESTMENT |
2675.740 |
2106.428 |
1720.122 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1575.734
|
1775.420 |
782.967 |
|
|
Sundry Debtors |
9242.552
|
8327.021 |
4921.776 |
|
|
Cash & Bank Balances |
4043.110
|
1784.480 |
345.282 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.570 |
|
|
Loans & Advances |
4476.682
|
2348.582 |
2497.030 |
|
Total
Current Assets |
19338.078
|
14235.503 |
8547.625 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
3158.774
|
5986.661 |
4065.534 |
|
|
Other Current Liabilities |
2742.266
|
882.644 |
563.781 |
|
|
Provisions |
182.712
|
86.249 |
99.902 |
|
Total
Current Liabilities |
6083.752
|
6955.554 |
4729.217 |
|
|
Net Current Assets |
13254.326
|
7279.949 |
3818.408 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
17291.345 |
10803.397 |
6604.053 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Sales, Services and Work Bills |
12821.876 |
11105.176 |
9187.655 |
|
|
|
Other Operating Revenues |
198.863 |
0.000 |
0.000 |
|
|
|
Other Income |
231.570 |
120.247 |
51.887 |
|
|
|
TOTAL (A) |
13252.309 |
11225.423 |
9239.542 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Erection, Construction & Operation Expenses |
10830.305 |
10576.682 |
8082.322 |
|
|
|
Employee Costs |
237.479 |
179.428 |
202.156 |
|
|
|
Other Costs |
285.795 |
228.990 |
154.201 |
|
|
|
Exceptional items- Profit on Sale of Investments |
(233.628) |
0.000 |
0.000 |
|
|
|
Decrease/(Increase) in Stock |
206.850 |
(951.488) |
0.000 |
|
|
|
TOTAL (B) |
11326.801 |
10033.612 |
8438.679 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1925.508 |
1191.811 |
800.863 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
857.174 |
417.162 |
108.533 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1068.334 |
774.649 |
692.330 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
120.054 |
103.447 |
63.019 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
948.280 |
671.202 |
629.311 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
252.151 |
224.599 |
229.143 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
696.129 |
446.603 |
400.168 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1285.672 |
911.782 |
582.484 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Dividend - 12% |
53.115 |
52.697 |
52.019 |
|
|
|
Provision of dividend-2009-10 inclusive Dividend Tax |
0.065 |
0.099 |
8.841 |
|
|
|
Dividend Tax |
8.833 |
8.752 |
0.000 |
|
|
|
Transfer to General reserve |
17.405 |
11.165 |
10.010 |
|
|
BALANCE CARRIED
TO THE B/S |
1902.383 |
1285.672 |
911.782 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
166.117 |
0.000 |
48.943 |
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
99.593 |
21.612 |
0.000 |
|
|
|
Capital Goods |
34.653 |
0.000 |
3.807 |
|
|
|
Materials Consumed in Execution of Engineering Construction Contracts |
3206.666 |
1315.198 |
828.353 |
|
|
TOTAL IMPORTS |
3340.912 |
1336.810 |
832.160 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) (Basic) |
15.80 |
10.26 |
9.25 |
|
|
|
Earnings Per
Share (Rs.) (Diluted) |
15.80 |
10.05 |
9.25 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
2997.250 |
2221.570 |
2638.550 |
|
Total Expenditure |
2715.250 |
1908.020 |
2308.880 |
|
PBIDT (Excl OI) |
282.000 |
313.550 |
329.670 |
|
Other Income |
78.970 |
7.120 |
19.400 |
|
Operating Profit |
360.970 |
320.670 |
349.070 |
|
Interest |
210.790 |
194.400 |
217.880 |
|
PBDT |
150.180 |
126.270 |
131.180 |
|
Depreciation |
31.980 |
30.510 |
28.780 |
|
Profit Before Tax |
118.200 |
95.760 |
102.410 |
|
Tax |
39.310 |
32.890 |
34.230 |
|
Profit After Tax |
78.900 |
62.870 |
68.180 |
|
Net Profit |
78.900 |
62.870 |
68.180 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
5.25
|
3.98 |
4.33 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
7.40
|
6.04 |
6.85 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
4.58
|
4.29 |
6.57 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19
|
0.16 |
0.17 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
3.73
|
3.15 |
1.95 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.18
|
2.05 |
1.81 |
LOCAL AGENCY FURTHER INFORMATION
OPERATING RESULTS
AND PERFORMANCE
During the year the company recorded a 18% growth in total income on a
standalone basis at Rs.13252.300 millions from Rs.11225.400 millions in the previous
year. Profit before tax and extraordinary items at Rs.714.700 millions recorded
a growth of 6.48% over the previous year (Rs.671.200 millions).
Profit after tax at Rs.696.100 millions recorded a growth of 56% over
the previous year’s figure of Rs.446.600 millions. Earnings per share (EPS)
grew from Rs.10.26 to Rs.15.80. The Company's order book was Rs.31913.000
millions as at March 31, 2011.
CAPITAL STRUCTURE
During the year,
the share capital of the Company was changed/ altered as follows:
Allotment of 3,48,622 Equity shares of Rs.10 each fully paid up under
ESOP 2006 and 2007 schemes.
BUSINESS
HIGHLIGHTS
During the year the Company was awarded several prestigious projects.
Some of these projects and other business initiatives taken by the Board to
position the Company in its growth path as a key player in the EPC business and
as a manufacturer of wind turbines are as under:
1. Multiple orders from Steel Authority of India Limited totaling to
Rs.1758.200 millions.
2. An order over Rs.1000.000 millions from Blue Diamond Australia Pty.
Limited, Australia. For setting up Tank Storage Facility in Queensland,
Australia.
3. Orders from
multiple Municipal services customers
totaling Rs.2370.000 millions.
4. An order from Prakash
Industries for a material handling project for Rs.602.400 millions.
5. An order from
Bharat Coal and Chemicals for relocation of Ammonia and Coal Gasification plant
Rs.2379.900 millions.
6. An order
Suryadev Alloys and Power P Limited For 80MW Captive Power Plant for
Rs.3540.000 millions.
7. An order GMR
Chhattisgarh Energy Private Limited Bangalore for Water Intake package for 2 x
685 MW Thermal Power Plant for Rs.646.200 millions.
The Company's
Joint venture, Hamon Shriram Cottrel Limited Order has a backlog as of 31 March
2011 of 454 millions.
The Company's
other Joint Venture, Leitner Shriram Manufacturing Limited has a back log as of
31 March 2011 of Rs.10540.000 millions.
The Company's
associate, Orient Green Power Company Limited (OGPL) raised money by way of IPO
in September 2010 for Rs.9000.000 millions to finance expansion of its
business.
BUSINESS OVERVIEW
The Company
operates in two main segments; turnkey contracts and wind turbines. A brief
review of the business in these segments is given below.
The turnkey
contracts segment represents the Company's engineering, procurement and
construction projects business, which include renewable energy projects like
biomass-based power plants, metallurgical and process plant projects and municipal
services projects like water and wastewater treatment plants, water and sewer
infrastructure and pipe rehabilitation.
The Standalone
order book was Rs.31913.000 millions (approx) on March 31, 2011 and the
Consolidated Order Book was Rs.54852.000 millions (approx) on the same date.
The Board of
Directors have recommended a dividend
of Rs.1.20 per share. This translates into a payout of Rs.61.900 millions
including an amount of Rs.8.800 millions as Dividend Distribution Tax.
Overall revenues
from turnkey contracts was Rs.9417.200 millions in FY 2011. The Company's wind
turbine business comprises of sale and services of 250 KW class wind turbine
generators to clients.
The wind turbine
business revenue was Rs.695.700 millions in FY 2010 as compared to Rs.1926.100
millions in FY 2011. The order book for the turnkey contracts as on March 31,
2011 is Rs.29746.500 millions.
SUBSIDIARY COMPANIES AND JOINT VENTURES
SUBSIDIARIES
SHRIRAM EPC (SINGAPORE) PTE. LIMITED
Shriram EPC (Singapore)
Pte Limited is a 100% subsidiary of the company.
BLACK STONE GROUP TECHNOLOGIES PRIVATE LIMITED
(BGT)
BGT which had been
set up as an engineering outsourcing outfit in Chennai in 1993 acts as
Engineering outfit of the Group with 200 strong technical staff.
The Company holds
55% in the equity stake of BGT.
BGT along with its
subsidiary has reported a consolidated turnover of Rs.121.300 millions in the
year 2010-11 compared to Rs.92.800 millions in the previous year 2009-10. The
Company has identified newer business opportunities to increase its presence.
JOINT VENTURES
HAMON SHRIRAM COTTRELL PRIVATE LIMITED (HSC)
The Company's
joint venture Company, HSC in the field of heat exchangers, cooling towers and
air pollution control systems have reported significant growth. The turnover of
the Company has increased from Rs.1105.600 millions in 2009-10 to Rs.1580.000
millions for 2010-11. The profit before tax was Rs.105.000 millions for 2010-11
as compared to Rs.117.500 millions for 2009-10.
The major milestones achieved by the Company during
the year:
·
Major contracts worth Rs.3000.000 millions from
Reliance Infra (Sasan UMPP, Samalkot Gas Based and Krishnapatnam UMPP), World's
largest FRP Cooling Towers.
·
First Natural Draft Cooling Tower with Lanco
Infratech for Koradi 3 x 660MW.
·
First break through order with Hindalco for Aditya
Aluminium 6 x 150MW with civil for Rs.500.000 millions.
·
Successful performance testing of ESP for JSPL,
Barbil with emission of less than
·
30mg/m3.
·
In order to reflect the joint venture status of
HSC, the Company is consolidating HSC on a line by line basis as a JV and not
as a subsidiary.
LEITNER SHRIRAM MANUFACTURING LIMITED (LSML)
LSML set up an art
of facility at Gummidipoondi for the manufacture of wind turbines and the trial
production commenced in March 2009, and this year they have had a full year of
operation.
MAJOR ACHIEVEMENTS DURING THE YEAR
·
Manufactured and Dispatched 100 sets of Active
Parts
·
LSML awarded Star Export House status
·
Construction of substations at Koodangulam (50MW) and Gujarat (25MW)
·
Setting up of blade manufacturing facility
·
Prototype for LTW 80 1.8 MW WEG and 250KW H50
·
Installation of 1.5MW WEG in Thailand - First WEG
outside India
The Company's
order book position from various clients like PPS Enviro, TVH, Power Gen Lanka
and OGPL is approx Rs.10540.000 millions.
During the year,
LSML has reported a turnover of Rs.5460.000 millions as compared to Rs.3673.500
millions during the year 2009-10 with a profit of Rs.20.000 millions as
compared to a loss of Rs.35.000 millions during the year 2009-10.
ASSOCIATES
HALDIA COKE AND CHEMICALS PRIVATE LIMITED (HCCL)
During the year
the Company sold its entire investments in Ennore Coke Limited to HCCL. The
Company has a 48.48% equity stake in Haldia Coke and Chemicals Private Limited,
which in turn holds 60.86% equity stake in Ennore Coke Limited During the year,
HCCL has reported a consolidated turnover of Rs.8547.600 millions with a profit
after tax of Rs.209.200 millions.
SHRIRAM SEPL COMPOSITES LIMITED (SSEPL)
SSEPL is a joint
venture for manufacture of specialised GRP pipes and liners. SSEPL has had a
mediocre year in terms of turnover due to the new manufacturing set-up near
Chennai, which got operational only by the 3rd quarter of the current financial
year.
MANAGEMENT DISCUSSION
AND ANALYSIS: FY 2010 – 11
COMPANY OVERVIEW
Subject is a
service provider of integrated design, engineering, procurement, construction,
and project management services geared towards the development of renewable
energy projects, process and metallurgy and municipal service projects
throughout India. The Company’s business centers around providing integrated
turnkey solutions for process and metallurgy plants (including thermal power
plants), biomass based power plants, water and waste- water treatment plants,
water and sewer infrastructure and pipe rehabilitation.
Through its
Subsidiaries and Associates the Company also manufactures / produces
·
Wind Turbine Generators (“WTG”) of multiple
capacities.
·
Cooling Towers and Air Pollution Control Systems.
·
GRP pipes and liners.
SEPC also holds interests in the following:
·
56.07% (direct and indirect) stake in Orient Green Power
Company Limited – Owner and Operator of Renewable Energy Power Generation
Projects.
·
48.48% stake in Haldia Coke and Chemicals Limited -
Manufacturer and marketer of Coking Coal products, including Met Coke.
·
55% in Blackstone Group Technologies Private
Limited, a Design and Engineering Firm.
SEPC is
headquartered in Chennai, Tamil Nadu and has offices in Mumbai, New Delhi,
Kolkata, Beijing and Rotterdam. It has factories in Puducherry and Chennai,
THE MACRO-ECONOMIC SCENARIO
The fiscal year
2010-11 began on an encouraging note, as developed economies picked up and
displayed signs of growth. The global economy begins to normalize post crisis
as recovery efforts have resulted in turnaround in the face of adverse
circumstances. According to Yale University Economists, Asia accounts for a
greater share of global revenue and financial clout. Emerging economies have
shown tremendous promise and have demonstrated steady performance at higher
growth rates. While haziness around unemployment and political polarization
have left many concerned about the outlook in developed economies in the West,
emerging economies have responded well to government intervention and policy.
However,
unseasonal weather patterns have led to global food shortages contributing to
diminished supply and fast-rising food prices, which coupled with rising demand
and speculation, have placed global food security in a precarious position.
Already, they have seen the effects of high inflation and political unrest in
Middle Eastern and North African countries such as Tunisia, Egypt, and Libya.
In the United States and other Western developed economies, relatively high
unemployment levels continue to remain as a critical issue. Financial Markets
have continued to fluctuate around global crises and the outlook remains
uncertain for the time being.
Regarding the
Indian economic outlook, the World Bank’s Development Prospects Group stated
that India’s growth will benefit from re-firming of external demand due to the
slow resumption of growth in advanced economies, representing over two-thirds
of India’s export markets. Although worries of high inflation persist,
Government policy initiatives provide some degree of comfort for lower levels
of inflation in the future. Furthermore, the overall business confidence of
managers of domestic and international Companies has continued to increase as
the ease of doing business in India increases.
Yet despite all
the challenges to growth in the global economy, International Monetary Fund
analysts expect global output to expand by 4.5% in 2011, reflecting
stronger-than-expected economic activity on the back of better performance in
the second half of 2010 and policy initiatives by the Government of the United
States. Growth in emerging markets, says the IMF remains robust buoyed by
strong private consumer demand, accommodative policy positions, and resurgent
capital inflows. They expect India will grow at 8.2% in the coming fiscal year.
The short-term outlook for Asia continues to look positive, with growth
expected to settle at sustained levels and remain particularly strong in demand
driven economies like India.
All in all, India
has come out a leader in the recovery post the global economic crisis,
positioning the country to enjoy the benefits of low-cost production and high
profitability going forward.
INDUSTRY STRUCTURE AND DEVELOPMENTS
INDEX OF INDUSTRIAL PRODUCTION
India’s industrial
sector contributes significantly to GDP and industrial trends have had an overarching
effect on the progress of the domestic economy. According to the Economic
Survey, the IIP grew by 9.5% as opposed to 7.4% in the previous corresponding
year.
Manufacturing
demonstrated robust performance throughout the year, growing upwards to 12.7%
and 9.7% respectively during the first two quarters of the current fiscal year
(Source: Economic Survey Chapter 1 p.11).
By early January,
India’s core infrastructure industries regained robust growth at 7.1%,
strengthening perceptions of overall outlook. Output for the six key industries
– crude, oil, electricity, petroleum refining, steel, cement, and coal – grew
in the period. The industries currently have a combined weight of close to
26.7% in the IIP. During the period from April 2010 to January 2011, the six
core industries registered a growth of 5.6 % (provisional) against 5.5 % during
the corresponding period of the previous year. Crude Oil and Finished Steel
grew significantly at 11.9% and 5.7% respectively.
CEMENT AND STEEL
India continues to
rank among the world’s top producers of Cement, ranking second only after
China. Total Cement production for the first half of the fiscal year reach
81.54 MT as compared to 77.22 MT in the same period in the corresponding year,
according to an IBEF Report. An additional capacity of 92.3 MT is expected to
be added to the sector by 2013.
According to the
“Indian Cement Industry Forecast to 2012” released by RNCOS, the cement
industry is projected to increase at a CAGR of 10.5% from FY2011-2014 on the back
of massive infrastructure projects and increased demand from manufacturers to
increase production capacities.
India was ranked
the fourth largest producer of crude steel in the world in 2010, and the
country has been the world’s largest sponge iron producer since 2002, according
to the Economic Survey. Production of domestic crude steel has grown by a CAGR
of 8.4% from 2006-07 to 2009-10 largely on the back of expansion in capacity
and higher utilization rates as India’s industrial sector develops. The
Minister of State for Steel said in late February that with a targeted
production of around 120 MT by 2012, India is set to become the second largest
steel producing country.
The steel industry
has continued to diversify its product mix and has delivered sophisticated
value-added steel in several sectors, particularly for automobiles, heavy
machinery, and physical infrastructure. The steel industry continues to suffer
from supply side issues in metallurgical coal which have been exacerbated by
the flooding in Queensland, Australia. Raw material security has thus become an
important issue and has emerged as a significant bottleneck against capacity
expansion.
INFRASTRUCTURE
With a vision
towards creating sustainable and robust economic growth, the Government of
India has focused on enhancing infrastructure around the country, particularly
for transportation and urban development. As the country consolidates its
position as one of the fastest growing economies across the globe, a high class
infrastructure which facilitates greater efficiency for businesses is
imperative.
With India aiming
to allocate over USD 1 trillion into infrastructure, half of which will come
from the private sector, the outlook for the sector looks bright and the
potential looks strong.
GLOBAL SCENARIO
Currently, the
total capacity of wind power globally comes to around 157,889 MW, of which
Europe accounts for around 48%. Over the last decade, the utilization of wind
power has more than quadrupled, with 81% of installations in the U.S. and in
Europe. China is another established leader in wind power, with wind power
accounting for over 41.8 GW of electricity generating capacity.
According to the
Global Wind Energy Council, the market growth of wind energy is driven by several
key factors, including the gap between supply and demand for energy, rising
importance of environmental issues, and technological advances for capturing
more wind movement. Global security of supply and economic /environmental
considerations demand the Government’s immediate attention in wind energy.
As modern wind
turbines continue to improve in their power rating, reliability, and
efficiency, the demand to utilize wind energy has significantly increased. The
Global Wind Energy Council stated that over the past ten years, wind energy has
grown at a cumulative average of 30% with over 120 GW of power generated solely
from wind. This capacity of power will put a cap on carbon dioxide and decrease
carbon emissions into the upper atmosphere.
INDIAN SCENARIO
Today, India is
emerging as one of the world’s producers of wind turbines for Asia. By the end
of 2010, India had installed wind generation capacity of 13,065 MW with a
growth rate of 16% meeting 3% of the overall energy demand in the country, which
had a robust year in terms of adding new capacity and wind energy
installations, with 2,139 MW of added capacity. Currently, global institutes,
various industry associations, and the World Institute for Sustainable Energy
cite the wind energy potential in India at 65-100 GW.
Having utilized
only 13,065 MW thus far, the prospect of developing facilities in wind energy
is boundless.
The global wind
energy industry was significantly affected by the adverse impacts of the global
recession. The Indian annual wind power market, however, was reasonably well
insulated.
The Ministry of
New and Renewable Energy, in December 2009, offered new incentive schemes for
businesses aiming to enter the renewable energy space. The Generation Based
Incentive (GBI) offers an incentive tariff of Rs.0.50/kWh for eligible projects
for a period of ten years, valid for wind farms established before March 2012.
In addition, 18 of the 25 State Electricity Regulatory Commissions (SERCs) have
currently issued feed in tariffs for wind power. According to the GWEC, 17 of
these commissions have mandated state- wide Renewable Purchase Obligations
(RPOs), which has won investor confidence. Other policy measures have included
concessional import duties on specified wind turbine parts, excise duty
reliefs, and income tax holidays applicable to wind energy projects.
OUTLOOK
Their vision is to
continue to generate strong financial returns and create a world-class
Engineering, Procurement and Construction Company. The Company has a focus on renewable
energy and also strives to be a developer and manufacturer of technologically
advanced WTGs. SEPC continues to enhance its service offerings through
technology tie ups with leading global institutions such as Envirotherm of
Germany, NWEPDI of China and Roberts and Schaefer of USA. They will continue to
pursue opportunities by expanding and enhancing their presence throughout India
and abroad. They will look to capitalize on their strengths, local experience
and familiarity with local working conditions and ever strengthening
relationships with their clients and strategic partners in order to establish
and maintain a leading position in the industry. They further intend to target
specific project segments and industries where they believe there is high
potential for growth and can enjoy competitive advantages. Given the businesses
they are in, the conducive operating environment, their competencies, skills
and growth plans, they remain fairly confident of achieving sustained growth in
the future.
CONTINGENT
LIABILITIES:
|
Particulars |
31.03.2011 (Rs. in millions) |
31.03.2010 (Rs. in millions) |
|
Letters of Guarantee issued by the Banks |
2221.983 |
2545.850 |
|
Letters of Credit issued by the Banks |
2018.170 |
4904.967 |
|
Bills discounted |
2271.000 |
0.000 |
|
Corporate Guarantees issued |
340.000 |
950.000 |
|
Claims against
the Company not acknowledged as debts |
90.580 |
120.511 |
|
Disputed Income
Tax demands contested in Appeals not provided for Civil Cases. * * Management is of the opinion that the Appeals preferred by the
Company will be decided in its favour. |
105.286 |
98.274 |
|
Assessment year
Appeal pending before 2000-01 Appellate Tribunal |
4.808 |
5.594 |
|
2001-02 Appellate Tribunal |
0.000 |
2.159 |
|
2002-03 Appellate Tribunal |
4.915 |
5.190 |
|
2003-04 Appellate Tribunal |
155.533 |
16.325 |
|
2004-05 Commissioner of Income Tax (Appeals) |
2.624 |
3.058 |
|
2005-06 Commissioner of Income Tax (Appeals) |
29.848 |
34.053 |
|
2006-07 Commissioner of Income Tax (Appeals) |
21.968 |
31.895 |
|
2007-08 Commissioner of Income Tax (Appeals) |
19.224 |
0.000 |
|
2008-09 Commissioner of Income Tax (Appeals) |
6.356 |
0.000 |
|
Total |
7292.295 |
8717.876 |
FIXED ASSETS
Tangible Assets
·
·
Buildings
·
Leasehold Improvements
·
Plant and Machinery
·
Furniture and Fittings
·
Office Equipment
·
Computers and Software
·
Vehicles
Intangible Assets
·
Technical know-how
·
ERP Software
·
Leasehold land right to use
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON DESIGNATED
PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on Corporate
Governance to identify management and governance. These factors often have been
predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.49.07 |
|
|
1 |
Rs.77.19 |
|
Euro |
1 |
Rs.65.57 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
62 |
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.