MIRA
INFORM REPORT
|
Report Date : |
29.02.2012 |
IDENTIFICATION DETAILS
|
Name : |
ESAB INDIA LIMITED |
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Registered
Office : |
Plot No. 13, 3rd |
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Country : |
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Financials (as
on) : |
31.12.2010 |
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Date of
Incorporation : |
10.11.1987 |
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|
Com. Reg. No.: |
058738 |
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Capital
Investment/ Paid-up Capital: |
Rs. 153.930 Millions |
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|
|
|
CIN No.: [Company Identification
No.] |
L29299TN1987PLC058738 |
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|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHEE00299F CHEE03931E CHEE03860D |
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PAN No.: [Permanent Account No.] |
AAACE0861G AAACE0861G |
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Legal Form : |
A Public Limited Liability company. The company’s Share are Listed on
the Stock Exchange. |
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Line of Business
: |
Manufacturing and Marketing of Welding Electrodes, Gas Cylinder Valves, Medical Equipments, Copper Coated Wires and Arc Welding Machines. |
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|
|
|
No. of
Employees: |
812 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (67) |
|
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 7640000 |
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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 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 be regular and as per commitments. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
INFORMATION DENIED
Management Non Co-operative
LOCATIONS
|
Registered
Office : |
Plot No. 13, 3rd |
|
Tel. No.: |
91-44-26252115 / 3657/42281100/ 43404684/43404611 |
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Fax No.: |
91-44-26253108/ 42281150/43404689 |
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E-Mail : |
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Website : |
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Factory 1 : |
B -28, MIDC Industrial Area, Nagpur – 441501, Maharashtra, India |
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Tel. No.: |
91-44-42281100 |
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Factory 2 : |
Welding Consumables Factory, B. T. Road, Khardah, PO : B.
D. Sopan, North 24- Parganas, Kolkata - 743 121, West |
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Factory 3 : |
Equipment Factory, P-41, Taratala Road, Kolkata - 700 088, India |
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Tel. No.: |
91-33-24014517 / 18 / 19 |
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Fax No.: |
91-33-24011880 / 4427 |
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|
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|
Factory 4: |
Welding Consumables Factory, Plot No. 13, 3rd
Main Road, Industrial Estate, Ambattur, Chennai - 600 058, India |
|
Tel. No.: |
91-44-43404611 |
|
Fax No.: |
91-44-26253108 |
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|
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Factory 5: |
Welding Consumables Factory, B-28, MIDC Industrial Area, Kalmeshwar, Nagpur - 441 501, Maharashtra, India |
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Tel. No.: |
91-7118-271337 / 462 / 463 |
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Fax No.: |
91-7118-271461 |
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Factory 6 : |
Equipment Factory, G-22, SIPCOT Industrial park, Irungattukottai,
Pennalur Post, Sriperumbudur Taluk, Kanchipuram District - 602105 |
|
Tel. No.: |
91-44-43192047 / 48 |
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Fax No.: |
91-44-43192049 |
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Regional Office |
Located at:- Kolkata, Mumbai, New Delhi, Nagpur, Chennai |
|
Divisional Office |
Located at:- Chennai, Kolkata |
DIRECTORS
(AS ON 27.04.2011)
|
Name : |
M G Foster |
|
Designation : |
Chairman |
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|
Name : |
G Hariharan |
|
Designation : |
Managing Director |
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Name : |
N H Mirza |
|
Designation : |
Director |
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|
Name : |
Mr.Pradeep Mallick |
|
Designation : |
Director |
|
Address : |
A/2, Pallonji Mansion, 43 Cuffee Parade, Mumbai – 400005, Maharashtra,
India |
|
|
|
|
Name : |
Mr. Vikram Tandon |
|
Designation : |
Director |
|
Address : |
Tandons, 57A Friends Colony East, New Delhi – 110065, India |
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|
|
|
Name : |
Mr. Sudhir Chand |
|
Designation : |
Director |
|
Address : |
10, Belvedere Estate, 8/8 Alipore Road, Kolkata – 700027, India |
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|
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|
Name : |
Mr. Suresh N Talwar |
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Designation : |
Director |
|
Address : |
10, shiv Shanti Bhuvan, 146 Maharshi Karve Road, Churchgate
Raclamation, Mumbai – 400020, Maharashtra, India |
|
|
|
|
Name : |
Mr. David John Egan |
|
Designation : |
Director |
|
Address : |
701, Valey Road, Rickmansworth, London, WD34BJ |
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|
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|
Name : |
J R Deeley |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. B. Moham |
|
Designation : |
Chief Financial Officer and Company Secretary |
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|
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|
Name : |
Mr. S Venkatakrishnan |
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Designation : |
Company Secretary |
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MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 31.12..2011)
|
Names of Shareholders |
No.
of Shares |
Percentage
of Holding |
|
|
|
|
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
|
|
|
|
8,566,031 |
55.65 |
|
|
8,566,031 |
55.65 |
|
Total shareholding of Promoter and Promoter Group (A) |
8,566,031 |
55.65 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
1,363,428 |
8.86 |
|
|
5,152 |
0.03 |
|
|
1,855,734 |
12.06 |
|
|
3,224,314 |
20.95 |
|
|
|
|
|
|
881,408 |
5.73 |
|
|
|
|
|
|
2,307,200 |
14.99 |
|
|
391,830 |
2.55 |
|
|
22,237 |
0.14 |
|
|
22,237 |
0.14 |
|
|
3,602,675 |
23.40 |
|
Total Public shareholding (B) |
6,826,989 |
44.35 |
|
Total (A)+(B) |
15,393,020 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total (A)+(B)+(C) |
15,393,020 |
- |
(1) Indian
Bodies Corporate
Individual shareholders holding nominal
share capital up to Rs.0.100 MillionShareholding of securities
(including shares, warrants, convertible securities) of persons belonging to
the category “Promoter and Promoter Group”
|
Names of Shareholders |
No.
of Shares |
Percentage
of Holding |
|
Esab Holdings Limited |
5,743,200 |
37.31 |
|
Exelvia Group India BV |
2,796,559 |
18.17 |
|
Exelvia Group India BV |
26,272 |
0.17 |
|
Total |
8,566,031 |
55.65 |
Shareholding of
securities (including shares, warrants, convertible securities) of persons belonging
to the category “Public” and holding more than 1% of the total number of shares
|
Names of Shareholders |
No.
of Shares |
Percentage
of Holding |
|
Acacia Partners LP |
1,139,440 |
7.40 |
|
HDFC Trustee Company Limited A/c - HDFC Prudence Fund |
523,305 |
3.40 |
|
HDFC Trustee Company Limited A/c - HDFC Mid -
Capopportunities Fund |
300,300 |
1.95 |
|
Acacia Institutitonal Partners LP |
191,998 |
1.25 |
|
Bajaj Alliaz Life Insurance Company Limited |
159,700 |
1.04 |
|
Total |
2,314,743 |
15.04 |
Shareholding of
securities (including shares, warrants, convertible securities) of persons
(together with PAC) belonging to the category “Public” and holding more than 5%
of the total number of shares of the company
|
Names of Shareholders |
No.
of Shares |
Percentage
of Holding |
|
Acacia Partners LP |
1,139,440 |
7.40 |
|
Total |
1,139,440 |
7.40 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Marketing of Welding Electrodes, Gas Cylinder Valves, Medical Equipments, Copper Coated Wires and Arc Welding Machines. |
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Products : |
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PRODUCTION STATUS
(As on 31.12.2010)
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity* |
Actual
Production |
|
Welding Electrodes |
000’meters |
318.988 |
274.808 |
210.279 |
|
tonnes |
3.480 |
3.000 |
0.809 |
|
|
Continuous Electrodes/ Copper Coated Wires |
tonnes |
28.140 |
17.800 |
9.976 |
|
Welding Fluxes |
tonnes |
4.061 |
2.440 |
2.057 |
|
Gas and Electric, Welding and Cutting Equipment and Accessories |
tonnes |
233.540 |
651.756 |
172.903 |
* As certified by the management and relied upon
by the auditors
GENERAL INFORMATION
|
No. of Employees : |
812 (Approximately) |
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Bankers : |
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Facilities : |
-- |
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
B S R and Company Chartered Accountants |
|
Address : |
No.10, Mahatma Gandhi Road, Nungambakkam, Chennai 600
034. |
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Tel. No.: |
91-44-3914 5000 |
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Fax No.: |
91-44-3914 5999 |
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Group Companies : |
|
(*
Amalgamated with the Company with effect from 1 April 2010)
CAPITAL STRUCTURE
(As on 31.12.2010)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
19,000,000 |
Equity Share |
Rs.10/- each |
Rs.190.000 Millions |
|
3,000,000 |
Unclassified Shares |
Rs.10/- each |
Rs.30.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
15,393,020 |
Equity Share |
Rs.10/- each |
Rs.153.930
Millions |
|
|
|
|
|
(Of the above, 999,000 shares were allotted as fully paid
up pursuant to a Scheme of Amalgamation)
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2010 |
31.12.2009 |
31.12.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
153.930 |
153.930 |
153.930 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1755.959 |
1517.963 |
1216.316 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
1909.889 |
1671.893 |
1370.246 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
0.000 |
0.000 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
|
|
TOTAL BORROWING |
0.000 |
0.000 |
0.000 |
|
|
DEFERRED TAX LIABILITIES |
30.671 |
31.322 |
4.286 |
|
|
|
|
|
|
|
|
TOTAL |
1940.560 |
1703.215 |
1374.532 |
|
|
|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
931.489 |
889.766 |
676.975 |
|
|
Capital work-in-progress |
166.719 |
69.659 |
122.156 |
|
|
|
|
|
|
|
|
INVESTMENT |
335.011 |
24.730 |
119.790 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
536.988
|
387.983 |
396.047
|
|
|
Sundry Debtors |
272.448
|
96.089 |
168.144
|
|
|
Cash & Bank Balances |
503.120
|
579.543 |
368.426
|
|
|
Other Current Assets and Loans & Advances |
207.064
|
229.803 |
165.009
|
|
Total
Current Assets |
1519.62
|
1293.418 |
1097.626 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
637.113
|
407.033 |
377.029 |
|
|
Other Current Liabilities |
102.928
|
95.603 |
89.462
|
|
|
Provisions |
272.238
|
71.722 |
175.524
|
|
Total
Current Liabilities |
1012.279
|
574.358 |
642.015 |
|
|
Net Current Assets |
507.341
|
719.060 |
455.611 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
1940.560 |
1703.215 |
1374.532 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.12.2010 |
31.12.2009 |
31.12.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
4961.065 |
4206.280 |
4226.210 |
|
|
|
Income from services |
42.449 |
0.000 |
0.000 |
|
|
|
Other Income |
141.128 |
86.920 |
94.901 |
|
|
|
TOTAL (A) |
5144.642 |
4293.200 |
4321.111 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Material Costs |
3124.598 |
2418.224 |
2537.052 |
|
|
|
Manufacturing, Selling and Administrative Expenses |
1024.118 |
780.256 |
782.928 |
|
|
|
TOTAL (B) |
4148.716 |
3198.480 |
3319.980 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
995.926 |
1094.720 |
1001.131 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
8.219 |
8.349 |
9.216 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
987.707 |
1086.371 |
991.915 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
105.474 |
77.459 |
66.707 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
882.233 |
1008.912 |
925.208 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
292.658 |
347.084 |
313.390 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
589.575 |
661.828 |
611.818 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1138.113 |
902.649 |
NA |
|
|
Add |
TRANSFERRED
ON AMALGAMATION |
12.309 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
58.958 |
66.183 |
NA |
|
|
|
Dividend |
307.860 |
307.860 |
NA |
|
|
|
Tax on Dividend |
51.132 |
52.321 |
NA |
|
|
BALANCE CARRIED
TO THE B/S |
1322.047 |
1138.113 |
NA |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
152.799 |
68.468 |
120.502 |
|
|
|
Service Income |
42.449 |
0.000 |
0.000 |
|
|
|
Commission Earnings |
2.580 |
0.000 |
0.224 |
|
|
TOTAL EARNINGS |
197.828 |
68.468 |
120.726 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
260.049 |
131.566 |
277.902 |
|
|
|
Components |
99..072 |
63.861 |
69.322 |
|
|
|
Capital Goods |
4.935 |
18.863 |
3.508 |
|
|
TOTAL IMPORTS |
364.056 |
214.29 |
350.732 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
38.30 |
43.00 |
39.75 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
31.03.2011 UnAudited |
30.06.2011 UnAudited |
30.09.2011 UnAudited |
|
Net Sales |
1356.500 |
1374.700 |
1307.300 |
|
Total Expenditure |
1134.200 |
1153.900 |
1099.300 |
|
PBIDT (Excl OI) |
222.300 |
220.800 |
208.000 |
|
Other Income |
8.300 |
8.800 |
7.800 |
|
Operating Profit |
230.600 |
229.600 |
215.800 |
|
Interest |
3.100 |
2.000 |
2.200 |
|
Exceptional Items |
00 |
00 |
00 |
|
PBDT |
227.500 |
227.600 |
213.600 |
|
Depreciation |
27.300 |
28.700 |
30.900 |
|
Profit Before Tax |
200.200 |
198.900 |
182.700 |
|
Tax |
66.500 |
64.500 |
64.700 |
|
Provisions and contingencies |
00 |
00 |
00 |
|
Profit After Tax |
133.700 |
134.400 |
118.000 |
KEY RATIOS
|
PARTICULARS |
|
31.12.2010 |
31.12.2009 |
31.12.2008 |
|
PAT / Total Income |
(%) |
11.46
|
15.42 |
14.16
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
17.78
|
23.99 |
21.89
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
35.99
|
46.21 |
52.14
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.46
|
0.60 |
0.68
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.53 |
0.34 |
0.47
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.50
|
2.25 |
1.71
|
LOCAL AGENCY FURTHER INFORMATION
DETAILS OF SUNDRY
CREDITORS
|
PARTICULARS |
31.12.2010 |
31.12.2009 |
31.12.2008 |
|
|
(Rs. In Millions) |
||
|
Total outstanding dues of micro enterprises and small
enterprises |
7.219 |
6.055 |
4.071 |
|
Total outstanding dues of creditors other than micro enterprises
and small enterprises |
629.894 |
400.978 |
372.958 |
|
TOTAL |
637.113 |
407.033 |
377.029 |
|
Available
in Report [Yes/No] |
|
|
Year
of Establishment |
Yes |
|
Locality
of the Firm |
Yes |
|
Construction
of the firm |
Yes |
|
Premises
details |
Yes |
|
Type
of Business |
Yes |
|
Line
of Business |
Yes |
|
Promoters
background |
- |
|
No.
of Employees |
Yes |
|
Name
of Person Contacted |
Yes |
|
Designation
of contact person |
Yes |
|
Turnover
of firm for last three years |
Yes |
|
Profitability
for last three years |
No |
|
Reasons
for variation <> 20% |
- |
|
Estimation
for coming financial year |
- |
|
Capital
the business |
Yes |
|
Details
of sister concerns |
- |
|
Major
Suppliers |
Yes |
|
Major
Customers |
Yes |
|
Payment
Terms |
Yes |
|
Export
/ Import Details [If Applicable] |
Yes |
|
Market
Information |
- |
|
Litigations
that the firm / promoter involved in |
- |
|
Banking
Details |
Yes |
|
Banking
Facility Details |
No |
|
Conduct
of the banking account |
- |
|
Buyer
visit details |
- |
|
Financials,
if provided |
No |
|
Incorporation
details, if applicable |
- |
|
Last
accounts filed at ROC |
- |
|
Major
Shareholders, if applicable |
- |
BACKGROUND
Esab
India Limited ("the Company") was incorporated on 10 November 1987
and commenced its business operations in July 1988. The Company is engaged in the
business of welding consumables i.e. welding electrodes, copper coated wires,
flux cored wires and welding fluxes and of welding equipment i.e. welding
machines and cutting equipment. 37.31% and 18.34% of the Company's shares are
held by Esab Holdings Limited and Exelvia Group India BV respectively, being
the significant shareholders, which are indirect subsidiaries of Charter
International plc. The remaining shares are held by institutional investors and
the public. Accordingly the Company is subsidiary of Charter International plc.
MANAGEMENT DISCUSSION AND ANALYSIS
In a year of high volatilities and inflation,
the Indian economy has reportedly grown at about 9% during the year under
review. Automotive, power and infrastructure sectors showed strong growth.
A relatively widespread customer base across
various segments did help us in achieving the growth levels they witnessed in
2010. Margins were under severe pressure through the year with increased competition
and market shifts towards a challenging product mix.
Volatilities in industrial output trends and
relatively low growth rates in Agriculture were compensated by growth in the Service sector. Inflationary pressures
were acute during the year.
There is a broad consensus on the medium term
growth rates in India though the short term continues to be very challenging to
forecast given the multiple domestic and international variables at play.
The Company closed the year on a good note in
terms of sales and held its leadership position in a highly challenging market
with increasing competition from domestic and foreign players.
The overall profits and profitability were
affected due to a significant decline in margins on the Consumables business
which saw the entry or scaling up of operations by international and domestic
competitors. There were acute price pressures across all segments and the
product mix became increasingly challenging. The pressure on margins was
particularly high on the Solid Wires business in which segment the consumables
business grew the most in 2010. The R&M business (included under
Consumables segment) performed well during the year. The drop in margins on
Consumables was compensated to an extent by Equipments business which recorded
good growth in sales and profits. The shortfall in consumables margins together
with an overall increase in payroll costs and other overheads led to a drop in
Profits before Tax by 12.6% over 2009.
The Company's project for expansion of capacity
in Solid Wires has been completed during the year at Nagpur. The volume of
business in this segment has shown significant growth and in line with trends
globally, growth in this segment is
expected to be significantly higher than the other segments in consumables.
ESAB
Engineering Services Limited, an erstwhile affiliate Company, became a 100%
subsidiary of Esab India Limited Company during the year prior to its eventual
merger with Esab India Limited. The merger is effective 1 April 2010 and has been
approved by the Hon'ble High Court of Madras. The assets and liabilities of the
subsidiary Company vested on the Company with effect from the appointed date
i.e. 1 April 2010. The financials for the year under the review accordingly
include the financials of the erstwhile Esab Engineering Services Limited
business with effect from 1 April 2010. This business relates to provision of R
and D and other support services for the ESAB group with appropriate
reimbursements and margins.
The Company continued with its IT initiatives
and by the end of 2010 the entire operations of three of its plants have
migrated to the new ERP platform viz. MOVEX. It is expected that by the end of
2011 all the company's facilities would have moved to the new ERP platform.
The company continued to internally fund all
its expansions and new product launches till date and remained debt free at the
end of 2010.
INCOME STATEMENT
Net Sales (including income on Engineering
services) were up by 19% in 2010 driven largely by a robust growth in the
Equipments business, R&M business and growth in volumes on Solid Wires. Net
Sales and Services income also include Rs.42 Million on invoicing for
Engineering Services.
Price pressures, change in mix towards wires
and relative softening of Steel prices during the year resulted in lower
realizations per unit on all key product groups.
Other income was up 62% over 2009 on account
of the following key developments
-
The Company sold its
entire holdings in Ador Welding Limited and the income arising thereon is
included in Other income to the extent of about Rs.21 Million.
-
The Company also earned commission
income from the ESAB group with respect to businesses concluded for a group
entity in India.
-
Scrap sales were higher consequent to growth
in volumes and better realizations on select items of scrap in line with
underlying commodity price increases.
-
A situation of a generally
appreciating Indian Rupee resulted in exchange gains being higher during the
year.
Material costs as
percentage to sales (Net of Service income) increased sharply to 63% from 57.5%
arising from a combination of pricing pressures and higher import content
especially in the Wires business. The company is initiating actions to address
indigenization and sourcing activities to control input costs.
Salaries and wages
were higher by 20% over 2009 due to the effect of payroll revisions and
integration of the erstwhile EESL business from April 2010. Accruals for
compensated absence also contributed to
the increase over 2009.
Contribution to funds increased by Rs.36 Million due to a
combination of effects of wage revisions, increases in provisioning for
gratuity arising from legislative amendments and also changes in actuarial assumptions.
Consequent to the impact of the above, Personnel costs
(including staff welfare expenses) were up from 6.8% in 2009 to 7.6% of sales
in 2010.
Consumption of stores and spares were higher on account of
higher volumes and replacement spares on some of they older machinery items in
Nagpur and Ambattur. Power and Fuel expenditure increased in line with activity
levels and the Company has initiated focus on energy savings at its Plants and
Offices as part of the ESAB group's global initiatives.
The variance in
rent expenditure between 2010 and 2009 is on account of one off reversals on
lease rent provisions in 2009.
Excise duty expenditure represents provision on duties on
finished goods at they warehouses and has increased consequent to increase in
Finished goods inventory on manufactured items over 2009.
Transportation costs representing freight payable on sales
went up significantly in 2010 consequent to fuel price related revisions on
transport contracts and also due to growth in volumes.
Expenditure on commission and sales incentives fell by 31%
due to changes in marketing policies for a part of the year. These are
constantly reviewed for effectiveness and modified as the situation demands.
An independent
external study was undertaken during the
year on compensating the ESAB group for use of their trademarks and
logos in the Company's operations. Based on the findings of this study and a
review of comparable practices across
various industries, the Board had approved the payment of fees at 2% on Net
Sales values with certain exceptions. An agreement for payment of fees was
executed with the ESAB group effective 1 August 2010. The charge on account of
this fee works out to Rs.41.5 Million for the period till December 2010.
Miscellaneous expenses were higher largely due
to increase in costs on manufacturing support services, testing charges and
Royalties.
Interest and finance charges represent charges on banking facilities and
were largely unchanged over 2009 levels. The Company has remained debt free
during the year.
Consequent to the capitalization in 2010 and the full year's impact of
capitalization in 2009, Depreciation for the year was up by Rs.28 Million in
2010.
The effective tax rate for the year declined to 33.2% from 34.4% due to a
reduction in surcharge rates and also a higher incidence of tax free income
from Mutual funds in 2010.
OUTLOOK, OPPORTUNITIES AND THREATS
The outlook for 2011 looks to be reasonably
good in terms of overall growth indicators. Of primary concern are high
levels of inflation, a more recent
slowdown in capital expenditure and hardening interest rates. More
international players have been firming up plans and scaling up their presence
in India. Competition from the lower end manufacturers also continues to be
intense with continuing pressures on margins.
Prices of Steel and other metals have begun to
harden in 2011 and expected to increase further during the year.
They are focusing on productivity
improvements, indigenization, enrichment of product mix and developments of new
products to enhance they market shares and margins
SCHEME OF AMALGAMATION OF ESAB ENGINEERING SERVICES LIMITED WITH THE
COMPANY UNDER SECTION 391 AND 394 OF THE COMPANIES ACT, 1956
A
Scheme of Amalgamation (‘the Scheme’) of Transferor Company viz, ESAB
Engineering Services Limited 'EESL')
with ESAB India Limited ('the Company’ or ‘Transferee Company’) was sanctioned
by the Honorable High Court of Judicature at Madras vide their order dated 9
December 2010 issued on 29 December 2010. Pursuant to this Scheme, the assets
and liabilities of the Transferor Companies were transferred to and vested in
the transferee company with effect from 1 April 2010 (Appointed Date).
The
amalgamation has been accounted under the 'pooling of interests' method. The salient features of the Scheme
are as follows:
a.
All the assets and liabilities recorded in the books of the Transferor Company
shall stand transferred to and vested in the Transferee Company pursuant to the
Scheme and shall be recorded by the Transferee Company at their book values as
appearing in the books of the Transferor Company;
b.
The Transferee Company shall record the Reserves of the Transferor Company in
the same form and at the same values as they appear in the financial statements
of the Transferor Company at the close of business of the day immediately
preceding the Appointed Date. Balances in the Profit and Loss Account of the
Transferor Company shall be similarly aggregated with the balances in Profit
and Loss Account of the Transferee Company. Balances shown as Miscellaneous
Expenditure (to the extent not written off or adjusted), if any, in the balance
sheet of the Transferor Company shall be similarly aggregated with balances of
the Transferee Company.
c.
The excess of, or deficit in, the value of the assets over the value of the
liabilities of the Transferor Company vested in the Transferee Company pursuant
to this Scheme as recorded in the books of account of the Transferee Company
shall, after adjusting the amounts recorded in terms of sub-clause (b) above,
be adjusted in the Reserves in the books of the Transferee Company.
d.
Further, in case of any differences in accounting policy between the Companies,
the impact of the same till the
amalgamation
will be quantified and adjusted in the Profit & Loss Account mentioned
earlier to ensure that the financial statements of the Transferee Company
reflect the financial position on the basis of consistent accounting
policy.
e.
To the extent that there are inter-company loans, deposits or balances as
between the Transferor Company and the Transferee Company, the obligations in respect
thereof shall come to an end and there shall be no liability in that behalf and
corresponding effect shall be given in the books of accounts and records of
the transferee Company for the reduction
of any assets or liabilities as the case may be and there would be no accrual
of interest or any other charges in respect of any such inter-company loans,
deposits or balances, with effect from the Appointed date.
f.
The authorised share capital of the Transferor Company shall stand combined
with the authorised share capital
of
the Transferee Company. Accordingly, the authorised share capital of the
Company is Rs.220.000 Millions divided into 19,000,000 Equity Shares of Rs.10/-
(Rupees ten) each; and 3,000,000 unclassified shares of Rs.10/- (Rupees ten) each.
g.
The shares of the Transferor Company held by the Transferee Company directly
and/or through its nominee(s),
constituting
the entire paid up share capital of the Transferor Company will stand
cancelled. No shares or consideration
shall be issued / paid by the Transferee Company pursuant to the amalgamation
of the Transferor Company, which is a wholly-owned subsidiary of the Transferee
Company. Accordingly, the Scheme has been given effect to in these financial
statements and the following assets and liabilities of the Transferor Company
as at 1 April 2010 have been accounted by the Transferee Company at their
respective book values.
|
Particulars |
Net assets/ liabilities taken over by the Company |
|
A. Assets |
|
|
Fixed assets - Net |
16.027 |
|
Other assets |
28.770 |
|
Total Assets taken over |
44.797 |
|
B. Liabilities |
|
|
Current liabilities and provisions |
12.488 |
|
Total Liabilities taken over |
12.488 |
|
C. Net Asset taken over (A-B) |
32.309 |
|
Less: Profit & loss account transferred on
amalgamation |
12.309 |
|
Share capital of Transferor Company |
20.000 |
|
Less: Cancellation of investment in books of the
Transferee Company |
24.896 |
|
Difference adjusted to Reserves in
the books of Transferee Company |
(4.896) |
CONTINGENT LIABILITIES
|
PARTICULARS |
31.12.2010 |
31.12.2009 |
|
|
(Rs. In
Millions) |
|
|
For Disputed Taxes and duties |
277.090 |
225.302 |
|
Claims Against the Company not acknowledged as debts |
82.380 |
76.272 |
|
Total |
359.470 |
301.574 |
FIXED
ASSETS:
- Building
- Plant and
Machinery
- Furniture and
Fixtures
- Motor
Vehicles
- Intangible
Assets
Unaudited
Financial Results for the Quarter/nine months ended 30 September 2011
|
PARTICULARS |
Quarter Ended 30.09.2011 (UnAudited) |
Quarter Ended 30.09.2010 (UnAudited) |
Nine Months Ended 30.09.2011 (UnAudited) |
|
(a) Net Sales / Income from operations |
1286.900 |
1232.500 |
3993.500 |
|
|
|
|
|
|
(b) Other Operating Income |
20.400 |
19.600 |
45.000 |
|
Total Income |
1307.300 |
1252.100 |
4038.500 |
|
|
|
|
|
|
Expenditure |
|
|
|
|
a) (Increase) / Decrease in stock in trade and work in
progress |
(129.500 |
(34.100) |
(232.000) |
|
b) Consumption of raw materials |
798.200 |
648.500 |
2331.400 |
|
c) Purchase of traded goods |
105.100 |
140.500 |
373.200 |
|
d) Employees cost |
111.300 |
82.600 |
313.800 |
|
e) Depreciation |
30.900 |
25.800 |
86.900 |
|
f) Other expenditure |
214.200 |
166.800 |
601.000 |
|
Total |
1130.200 |
1030.100 |
3474.300 |
|
|
|
|
|
|
Profit from operations before other income, interest and
exceptional Items |
177.100 |
222.000 |
564.200 |
|
Other income |
7.800 |
19.400 |
24.900 |
|
Profit before interest and exceptional Items |
184.900 |
241.400 |
589.100 |
|
Interest |
2.200 |
2.100 |
7.300 |
|
Profit
after Interest but before Exceptional Items |
182.700 |
239.300 |
581.800 |
|
Exceptional Items |
- |
- |
- |
|
Profit
(+)/Loss(-) from Oridinary Activities before tax |
182.700 |
239.300 |
581.800 |
|
Tax expense |
64.700 |
77.900 |
195.700 |
|
Net
Profit (+)/Loss(-) from Ordinary Activities after tax |
118.000 |
161.400 |
386.100 |
|
Net Profit (+) / Loss (-) for the year period |
118.000 |
161.400 |
386.100 |
|
Paid up equity share capital (Face value of Rs.10/- per
share) |
1539 |
1539 |
1539 |
|
Reserves excluding revaluation reserves as per balance
sheet of previous accounting year |
N.A |
N.A |
N.A. |
|
Earning per share (EPS) |
7.67 |
10.48 |
25.09 |
|
Public shareholding |
|
|
|
|
Number of
shares |
6826989 |
6826989 |
6826989 |
|
Percentage
of shareholding |
44.35% |
44.35% |
44.35% |
|
|
|
|
|
|
Promoters and Promoters group Shareholding- |
|
|
|
|
a) Pledged /Encumbered |
|
|
|
|
Number of shares |
Nil |
Nil |
Nil |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
Nil |
Nil |
Nil |
|
Percentage of shares (as a % of total share capital of the
company) |
Nil |
Nil |
Nil |
|
|
|
|
|
|
b) Non Encumbered |
|
|
|
|
Number of shares |
8,566,031 |
8,566,031 |
8,566,031 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
100% |
100% |
100% |
|
Percentage of shares (as a % of total share capital of the
company) |
55.65% |
55.65% |
55.65% |
|
SEGMENT REPORTING Segment Revenue (Net) |
|
|
|
|
Consumables |
916.100 |
867.700 |
2830.100 |
|
Equipment |
370.800 |
364.800 |
1163.400 |
|
Total |
1286.900 |
1232.500 |
3993.500 |
|
Segment Results |
|
|
|
|
Consumables |
153.100 |
173.700 |
433.500 |
|
Equipment |
53.900 |
92.200 |
187.200 |
|
Total |
207.000 |
265.900 |
620.700 |
|
Less : |
|
|
|
|
1. Interest and Finance Charges |
2.200 |
2.100 |
7.300 |
|
2. Other Unallocated Expenditure net of unallocated income |
22.100 |
24.500 |
31.600 |
|
Total Profit Before Tax |
182.700 |
239.300 |
581.800 |
|
Capital Employeed |
|
|
|
|
Consumables |
1443.700 |
1290.100 |
1443.700 |
|
Equipment |
435.000 |
413.000 |
435.000 |
|
Unallocated |
148.900 |
260.000 |
148.900 |
Statements of
Assets and Liabilities as at 30 September 2011
|
PARTICULARS |
30.09.2011 (UnAudited) |
|
SHAREHOLDERS FUNDS |
|
|
1] Share Capital |
153.900 |
|
2] Reserves & Surplus |
1873.700 |
|
DEFERRED TAX LIABILITIES |
47.600 |
|
Total |
2075.200 |
|
FIXED ASSETS |
1086.500 |
|
INVESTMENT |
132.300 |
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
Inventories |
838.500 |
|
Sundry Debtors |
234.000 |
|
Cash & Bank Balances |
368.100 |
|
Other Current Assets |
145.400 |
|
Loans & Advances |
122.800 |
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
Current Liabilities |
794.500 |
|
Provisions |
57.900 |
|
Total |
2075.200 |
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.49.05 |
|
|
1 |
Rs.77.78 |
|
Euro |
1 |
Rs.65.89 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
67 |
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.