MIRA
INFORM REPORT
|
Report Date : |
23.04.2013 |
IDENTIFICATION DETAILS
|
Name : |
WELSPUN CORP LIMITED (w.e.f. 27.04.2010) |
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Formerly Known
As : |
WELSPUN GUJARAT STAHL ROHREN LIMITED |
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Registered
Office : |
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Country : |
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Financials (as
on) : |
31.03.2012 |
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Date of
Incorporation : |
26.04.1995 |
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Com. Reg. No.: |
04-25609 |
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Capital
Investment/ Paid-up Capital: |
Rs.1138.910 Millions |
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CIN No.: [Company Identification
No.] |
L27100GJ1995PLC025609 |
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IEC No.: |
0895004801 |
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TAN No.: [Tax Deduction & Collection
Account No.] |
BRDW00071B / RKTW00064B |
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PAN No.: [Permanent Account No.] |
AAACW0744L |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Manufacturing
of Steel Pipes, Coils and Plates |
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No. of
Employees: |
Not Available |
RATING & COMMENTS
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MIRA’s Rating : |
A (64) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 143810000 |
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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 the
flagship company is welspun group. It is one of the largest manufactures of
large diameter line pipe in the world. It is a well established
company having good track. Financial position of the company appears to be
sound. Even though there
appears some growth in the sales turnover of the company during 2012, there
seems some dip in the profitability. However, trade
relations are reported as trustworthy. Business is active. Payments are
reported to be regular and as per commitment. The company can
be considered good for business dealings at usual trade terms and
conditions. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
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Source
: CIA |
EXTERNAL AGENCY RATING
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Rating Agency Name |
CARE |
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Rating |
A1+ (Short Term Bank Facilities) |
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Rating Explanation |
Very strong degree of safety and lowest
credit risk |
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Date |
01.02.2012 |
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Rating Agency Name |
CARE |
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Rating |
A1+ (Commercial Paper Issue) |
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Rating Explanation |
Very strong degree of safety and lowest
credit risk |
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Date |
01.02.2012 |
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Rating Agency Name |
CARE |
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Rating |
AA+(Long Term Bank Facilities) |
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Rating Explanation |
High degree of safety and very low credit risk |
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Date |
01.02.2012 |
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
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Registered Office : |
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Tel. No.: |
91-2461-266011/ 256281 – 91-2836-661111 |
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Fax No.: |
91-2461-256285/91-2836-279060 |
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E-Mail : |
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Website : |
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Area: |
Owned |
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Corporate Office : |
Welspun House, 5th Floor, Kamala Mills
Compound, Senapati Bapat Marg, Lotheyr Parel, Mumbai-400013, |
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Tel. No.: |
91-22-56503000/ 56503333/ 24908000/ 66136000 |
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Fax No.: |
91-22-24908020/ 21 |
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E-Mail : |
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Factory 1 : |
Village Versamedi, Taluka Anjar, District – Kutch –
370110, |
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Tel. No.: |
91-2836-279000/
573428/ 29 |
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Fax No.: |
91-2836-279010/ 247070 |
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Area : |
4950518 Sq .ft. |
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Location : |
Owned |
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Factory 2 : |
Village Jolva and Vadadia, Near Dahej, Taluka : Vagra,
District Bharuch – 392130, |
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Factory 3 : |
KIADB Industrial Area, Gejjalagere, Taluka Maddur,
District Mandya – 571428, |
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DIRECTORS
As on 31.03.2012
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Name : |
Mr. Balkrishan Goenka |
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Designation : |
Chairman and Executive Director |
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Address : |
6, |
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Qualification : |
B. Com |
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Name : |
Mr. Braja Mishra |
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Designation : |
Nominee Director of Exim Bank Limited |
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Name : |
Mr. Rajesh R. Mandawewala |
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Designation : |
Managing Director |
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Address : |
171, B Wing, 17th Floor, Tanna Redisency, Bay
view, 392, V. S. Marg, Prabhadevi, Mumbai – 400026, Maharashtra, India. |
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Qualification : |
B. Com , A.C.A |
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Name : |
Mr. Mukul Sarkar |
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Designation : |
Nominee Director of Exim Bank Limited |
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Name : |
Mr. Mintoo Bhadari |
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Designation : |
Nominee Director of Insight Solutions Limited |
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Name : |
Mr. Raj Kumar Jain |
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Designation : |
Director |
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Address : |
A/ 42, Manali, Evershine Nagar, Malad (West), Mumbai –
4000064, |
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Qualification : |
A. C. A. |
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Name : |
Mr. K. H. Viswanathan |
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Designation : |
Director |
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Address : |
Plat No. 4, Kalyani Uttam Society, Antony Road, Chembur, Mumbai – 400071,
Maharashtra, India. |
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Qualification : |
ICWA |
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Name : |
Mr. Ram Gopal Sharma |
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Designation : |
Director |
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Address : |
707, Look Shrtia, |
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Qualification : |
B. Com, Master in
Ecomomics |
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Name : |
Mr. Nirmal Gangwal |
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Designation : |
Director |
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KEY EXECUTIVES
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Name : |
Mr. Pradeep Joshi |
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Designation : |
Company Secretary |
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Name : |
Mr. Brijgopal Jaju |
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Designation : |
Chief Financial Officer |
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MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.12.2012
|
Category of Shareholder |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding of Promoter and Promoter Group |
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|
342 |
0.00 |
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71903611 |
29.97 |
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Any Others (Specify) |
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Trusts |
5 |
0.00 |
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Bodies Corporate |
14565523 |
6.07 |
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(B) Public Shareholding |
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|
529976 |
0.22 |
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22434676 |
9.35 |
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270000 |
0.11 |
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37360095 |
15.57 |
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25509613 |
10.63 |
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15156702 |
6.32 |
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7481444 |
3.12 |
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42542721 |
17.73 |
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1297658 |
0.54 |
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Non Resident Indiana |
788533 |
0.33 |
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Trusts |
53400 |
0.02 |
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Hindu Undivided
Families |
28000 |
0.01 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
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(1)
Promoter and Promoter Group |
-- |
-- |
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(2)Public |
23026000 |
0.00 |
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Total |
262948299 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs. 0.100 MillionBUSINESS DETAILS
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Line of Business : |
Manufacturing
of Steel Pipes, Coils and Plates. |
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Products : |
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PRODUCTION STATUS AS ON
30.06.2011
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Welded Pipes |
MT |
NA |
1200000 |
1150000 |
|
Coating of Pipes |
‘000 SQMS |
NA |
14500 |
14500 |
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M.S. Plates/H.R. Coils |
MT |
NA |
1500000 |
1500000 |
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Power (co-generation) |
KWH |
NA |
330000 |
330000 |
GENERAL INFORMATION
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No. of Employees : |
Not Available |
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Bankers : |
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Facilities : |
Long Term
Borrowings The debentures together with interest are secured by first charge ranking
pari passu by way of mortgage/ hypothecation of entire immovable and movable
fixed assets of the Company, both present and future and second/floating
charge on current assets, subject to prior charge in favour of banks for
working capital facilities. (Rs. in million)
External Commercial Borrowings (ECB) is secured by first charge ranking
pari passu by way of mortgage/ hypothecation of en_re immovable and movable
tangible fixed assets of the Company both present and future. Further, the
ECB is also secured by exclusive charge by way of hypothecation of Debt
Service Reserve Account. The Loan amount comprises of USD 140 million (USD 140
million) and JPY 1015.20 million (JPY 1015.20 million). The loan carries
Interest of LIBOR plus 1.25%. The loan is repayable as follows
Foreign Currency Convertible Bonds (FCCB) i) During the financial year 2009 2010, the Company had raised US$ 150
million (Equivalent INR 6,942 million) by way of issue of 1500 4.5% Foreign
Currency Convertible Bonds (FCCB) of US$ 100,000 each. The Bondholders have
an option to convert these bonds into 24,010,000 equity shares of Rs. 5 each
fully paid up at an initial conversion price of Rs. 300 per share with a
fixed rate of exchange on conversion of Rs. 48.02 US$ 1 at any time on or
after 26 November 2009 until 10 days prior to Maturity date (i.e. 17 October
2014).Unless previously converted, redeemed or repurchased and cancelled, the
Bonds will be redeemed on 17 October 2014 at102.8028% of the principal amount so as to give a gross yield of 5%
per annum (calculated on semi annual basis) to the Bond holders. The Company has an
option to redeem the Bonds at their Early Redemption Amount upon occurrence
of events specified in the Offering Circular for issue of the Bonds
(“Offering Circular”). Further, the Company has an option to mandatorily
convert the Bonds after three years as specified in the Offering Circular. ii) Premium
payable on redemption of FCCB aggregating to Rs. 45.75 Million (Rs. 33.80
million) has been adjusted against Securities Premium as per Section 78 of
the Companies Act, 1956. In the event, Bond holders exercise the conversion
option, the amount of premium utilized from securities premium will be
suitably adjusted in respective years. iii) Part of the
net proceeds received from the issue of FCCB has been utilized as per object
of the issue viz for funding of Plate and Coil Mill, Pipe Mill Capex Projects
(Anjar and Mandya) and Investment in overseas Subsidiary. Pending
utilization, the balance issue proceeds of USD 17.04 million equivalent INR
866.91 million (USD 77.41 million equivalent INR 3,452.28 million) have been
invested in short term deposits/current account with a Bank abroad and Rs.
1.46 million (Rs. 2.8 million) lying in current account with a bank in India
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
MGB and Company Chartered Accountants |
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Address : |
Mumbai, |
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Associates/Subsidiaries : |
Direct Subsidiaries · Welspun Pipes Limited · Welspun Natural Resources Private Limited · Welspun Pipes Inc · Welspun Tradings Limited · Welspun Infratech Limited · Welspun Mauritius Holdings Limited · Welspun Constructions Private Limited (upto 21 March 2012) · Welspun Maxsteel Limited (w e f 13 August 2011) Indirect
Subsidiaries Held through
Welspun · Holdings Limited · Welspun Middle East Pipes Company LLC · Welspun Middle East Pipes Coatings · Company LLC ·
Welspun Middle · Held through Welspun Pipes Inc · Welspun Tubular LLC · Welspun Global Trade LLC Held through
Welspun Natural Resources Private Limited · Welspun Plastics Private Limited Held through
Welspun Infratech Limited · Welspun Projects Limited · Welspun Road Projects Private Limited · Welspun Infra Projects Private Limited · ARSS Bus Terminal Private Limited (w e f 3 August 2011) Held through
Welspun Projects Limited · Anjar Road Private Limited (w e f 16 March 2012) · Welspun BOT Projects Private Limited (w e f 12 April 2011) · MSK Projects (Himmatnagar Bypass) Private Limited · MSK Projects (Kim Mandavi Corridor) Private Limited · Welspun Energy Maharashtra Private Limited (Up to 5 June 2011) Held through
Welspun Infra Projects Limited · Welspun Energy Transportation · Private Limited · Welspun Water Infrastructure Private Limited · Associate Companies · Red Lebondal Limited · Welspun Energy Limited · Joint Ventures · Dahej Infrastructure Private Limited · Indirect Joint Ventures Held through
Welspun Natural Resources Private Limited Adani Welspun Explora_on Limited Held through
Welspun Infra Projects Private Limited ·
Leighton Welspun Contractors Private ·
Limited (w e f 28 April 2011) Held through
Welspun Projects Limited ·
Dewas Bhopal Corridor Limited · Bul MSK Infrastructure Private Limited |
CAPITAL STRUCTURE
As on 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
304000000 |
Equity Shares |
Rs.5/- each |
Rs.1520.000
Millions |
|
98000000 |
Preference Shares |
Rs.10/-each |
Rs.980.000 Millions |
|
|
Total |
|
Rs.2500.000 Million |
Issued, Subscribed and Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
227,781,035 |
Equity Shares |
Rs.5/- each |
Rs.1138.910 Millions |
|
|
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a) Reconciliation of the number of Equity shares outstanding
|
Particular |
2012 |
|
|
|
Number of Shares |
Rs. in Millions |
|
At the beginning of the year |
204668910 |
1023.340 |
|
By way of Global Depository Receipts (GDR) |
23026000 |
115.130 |
|
Equity shares allotted on exercise of Employees Stock Options |
86125 |
0.430 |
|
Outstanding at the end of the year |
227781035 |
1138.900 |
b) Terms / right
attached to equity shares
The Company has only one class of equity shares having a par value of
Rs. 5 per share. Each holder of equity
shares is entitled to one vote per share, however the holders of global
depository receipts (GDR’s) do not have voting rights in respect of shares
represented by the GDR’s _ll the shares are held by the custodian [ Refer note
2(e) ]. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of the equity
shares will be entitled to receive remaining assets of the company, after
distribution of preferential amounts. The distribution will be in proportion to
the
Number Of Equity
Shares Held By The Shareholders
|
Particular |
2012 |
|
|
|
Number of Shares |
% |
|
J P Morgan Chase Bank, NA ADR Account (Custodian and against which GDR have been issued to
Insight Solutions Limited) |
23026000 |
10.11 |
|
Life Insurance Corporation of India Limited and its Schemes |
19277980 |
8.46 |
|
Welspun Wintex Limited |
13336576 |
5.85 |
|
Welspun Mercan_le Limited |
12377701 |
5.43 |
|
Welspun Fin trade Limited |
15148340 |
6.56 |
|
Krishiraj Trading Limited |
26805403 |
11.77 |
|
|
|
|
d) Employee Stock
Options Scheme
In respect of options granted under the Welspun Employee Stock Options
Scheme, in accordance with the guidelines issued by Securities and Exchange
Board of India, the value of options (based on intrinsic value of the share on
the date of the grant of the option) is accounted as deferred employee
compensation, which is amortized on a straight line basis over the vesting
period. Employee benefits expense include credit of Rs.1.51 million (Rs. 0.56
million) being amortization of deferred employee compensation
.
During the year, 78,250 equity shares and 7,875 equity shares of Rs. 5
each fully paid up were issued at a price of Rs. 80.00 and Rs. 66.75 each
respectively. Discount allowed aggregating to Rs. 2.27 million (Rs. 9.24
million) in respect of shares allotted pursuant to the Employee Stock Options
Scheme is credited to Securities Premium Account as per guidelines of
Securities and Exchange Board of India.
Stock Options
outstanding as at the year end are as follows
|
Particular |
Granted during 2006-07 |
Granted during 2009-10 |
|
Exercise Price |
Rs.80.00 |
Rs.66.75 |
|
Date of Grant |
8th January 2007 |
20th April 2009 |
|
Vesting period
commences on |
8th January 2008 |
20th April 2010 |
|
Options outstanding
at the beginning of the year |
523250 |
40750 |
|
Options exercised
during the year |
78250 |
7875 |
|
Options lapsed
during the year |
69750 |
|
|
Options
Outstanding as at 31 March 2012 |
375250 |
32875 |
|
|
|
|
e) Global Depository
Receipts
During the year, the Company has raised US$ 115.00 million (Equivalent
INR 5,180.85 million) by way of issue
of 23,026,000 equity shares of Rs 5 each fully paid up at a premium of
Rs. 220 each (equivalent 23,026 Non Voting Global Depository Receipts each of
US$ 4,994.45 each representing 1000 Equity Shares of par value of Rs.5 each).
The entire proceeds have been invested in short term securities as at 31 March
2012.
f) Compulsorily
Convertible Debentures (CCD)
During the year, the Company has raised US$ 178.01 million (Equivalent
INR 7,883.75 million) by way of issue of unsecured compulsorily convertible
debentures. The CCD holders have an option to convert the CCD into 35,038,889
equity shares of Rs. 5 each fully paid up at a conversion price of Rs. 225 per
share at Any time during a period of 18 months from the date of issue of the
CCD i.e. on or before 17 February 2013. If not already fully converted before
17 February 2013, at the expiry of a period of 18 months from the date of issue
of the CCD, the unconverted part of the CCD shall be deemed to be automatically
converted into Equity Shares. The CCD carry a coupon of 5% (Five) annually
until issue of Equity Shares upon conversion of
the CCD.
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 |
1138.910 |
1023.340 |
1021.610 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
34813.340 |
29503.580 |
26366.000 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
35952.25 |
30526.920 |
27387.610 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
18102.310 |
19868.690 |
12971.120 |
|
|
2] Unsecured Loans |
7664.640 |
6756.020 |
6818.460 |
|
|
TOTAL BORROWING |
25766.950 |
26624.710 |
19789.580 |
|
|
DEFERRED TAX LIABILITIES |
3545.120 |
3431.420 |
2954.680 |
|
|
FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCE ACCOUNT |
(322.970) |
65.140 |
75.420 |
|
|
Compulsory Convertible Debenture
|
7883.750 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
72825.100 |
60648.190 |
50207.290 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
30533.990 |
25054.800 |
24634.310 |
|
|
Capital work-in-progress |
1979.480 |
6039.580 |
4011.170 |
|
|
|
|
|
|
|
|
INVESTMENT |
34039.380 |
17703.390 |
2796.140 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
16498.500
|
13156.340
|
13042.920
|
|
|
Sundry Debtors |
10927.630
|
8860.230
|
8040.870
|
|
|
Cash & Bank Balances |
6409.430
|
6164.700
|
9212.400
|
|
|
Other Current Assets |
1315.570
|
145.040
|
13.410
|
|
|
Loans & Advances |
8547.770
|
5854.760
|
6194.150
|
|
Total
Current Assets |
43698.900
|
34181.070 |
36503.750 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
25361.350
|
7548.360 |
73007.500 |
|
|
Other Current Liabilities |
10425.870
|
13815.830
|
8469.480
|
|
|
Provisions |
1639.430
|
966.460
|
1134.800
|
|
Total
Current Liabilities |
37426.650
|
22330.650 |
82611.78 |
|
|
Net Current Assets |
6272.250
|
11850.420
|
18765.670
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
72825.100 |
60648.190 |
50207.290 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
57697.110 |
62694.400 |
66273.350 |
|
|
|
Other Income |
2192.040 |
161.420 |
127.740 |
|
|
|
TOTAL (A) |
59889.150 |
62855.820 |
66401.090 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials consumed |
36908.830 |
- |
- |
|
|
|
Purchase of trade goods |
6853.500 |
- |
- |
|
|
|
Employee benefit expenses |
1756.090 |
- |
- |
|
|
|
Other expense |
10136.740 |
- |
- |
|
|
|
Changes in inventories of finished goods Goods
in process |
(843.560) |
- |
- |
|
|
|
Cost of Goods Sold |
- |
44419.490 |
44928.460 |
|
|
|
Manufacturing Expenses |
- |
10426.870 |
10246.490 |
|
|
|
TOTAL (B) |
54811.600 |
54846.360 |
55174.950 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
5077.550 |
8009.460 |
11226.140 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
2470.960 |
1089.180 |
1661.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
2606.590 |
6920.280 |
9564.440 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
1843.520 |
1656.650 |
1479.200 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
763.070 |
5263.630 |
8085.240 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
113.690 |
1619.110 |
2683.280 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
649.380 |
3644.520 |
5401.960 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
13415.490 |
11074.890 |
6795.960 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
General Reserve |
65.000 |
364.500 |
540.000 |
|
|
|
Debenture Redemption Reserve |
357.140 |
463.390 |
106.250 |
|
|
|
Proposed Dividend on Equity Shares |
132.370 |
409.340 |
408.640 |
|
|
|
Tax on above Dividend |
0.000 |
66.400 |
67.870 |
|
|
|
Dividend on Equity Shares for earlier
period |
0.000 |
0.250 |
0.220 |
|
|
|
Tax on Dividend |
0.000 |
0.040 |
0.040 |
|
|
BALANCE CARRIED
TO THE B/S |
13510.360 |
13415.490 |
11074.900 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
24243.000 |
22054.680 |
22190.570 |
|
|
|
Interest Income |
0.000 |
0.000 |
204.100 |
|
|
|
Other Earnings |
1053.840 |
718.810 |
669.490 |
|
|
TOTAL EARNINGS |
25296.840 |
22773.490 |
23064.160 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
32854.050 |
22131.500 |
17608.520 |
|
|
|
Stores and Spares |
567.700 |
946.530 |
929.970 |
|
|
|
Capital Goods |
2286.950 |
81.500 |
1147.640 |
|
|
|
Others |
0.000 |
0.000 |
3518.720 |
|
|
|
Traded Goods |
6826.590 |
8433.870 |
- |
|
|
|
Coal |
778.240 |
628.220 |
- |
|
|
TOTAL IMPORTS |
43313.530 |
32221.620 |
23204.850 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic |
2.96 |
17.82 |
28.04 |
|
|
|
Diluted |
2.96 |
16.94 |
25.18 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 2nd
Quarter |
30.09.2012 1st
Quarter |
31.12.2012 3rd
Quarter |
|
Type |
18193.100 |
16058.400 |
16043.600 |
|
Sales Turnover |
17373.400 |
15199.500 |
15471.600 |
|
Total Expenditure |
819.700 |
858.900 |
572.000 |
|
PBIDT (Excl
OI) |
623.800 |
547.300 |
920.800 |
|
Other Income |
1443.500 |
1406.200 |
1492.800 |
|
Operating
Profit |
851.400 |
635.300 |
873.500 |
|
Interest |
0.000 |
0.000 |
0.000 |
|
Exceptional
Items |
592.100 |
770.900 |
619.300 |
|
PBDT |
2559.200 |
553.900 |
590.100 |
|
Depreciation |
32.900 |
217.000 |
29.200 |
|
Profit
Before Tax |
3.500 |
47.500 |
(54.000) |
|
Tax |
0.000 |
0.000 |
0.000 |
|
Reported PAT |
29.400 |
169.500 |
83.200 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
29.400 |
169.500 |
83.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
1.08 |
5.79
|
8.13
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
1.32 |
8.39
|
12.19
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
1.03 |
8.89
|
13.22
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.02 |
0.17
|
0.29
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.76 |
1.60
|
1.37
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.17 |
1.53
|
2.06
|
LOCAL AGENCY FURTHER INFORMATION
|
Available
in Report [Yes/No] |
|
|
Year of Establishment |
Yes |
|
Locality of the Firm |
Yes |
|
Constitution of the firm |
Yes |
|
Premises details |
No |
|
Type of Business |
Yes |
|
Line of Business |
Yes |
|
Promoters background |
Yes |
|
No. of Employees |
No |
|
Name of Person Contacted |
No |
|
Designation of contact person |
No |
|
Turnover of firm for last three years |
Yes |
|
Profitability for last three years |
Yes |
|
Reasons for variation <> 20% |
- |
|
Estimation for coming financial year |
No |
|
Capital the business |
Yes |
|
Details of sister concerns |
Yes |
|
Major Suppliers |
No |
|
Major Customers |
No |
|
Payment Terms |
No |
|
Export / Import Details [If Applicable] |
No |
|
Market Information |
- |
|
Litigations that the firm / promoter involved in |
- |
|
Banking Details |
Yes |
|
Banking Facility Details |
Yes |
|
Conduct of the banking account |
- |
|
Buyer visit details |
- |
|
Financials, if provided |
Yes |
|
Incorporation details, if applicable |
Yes |
|
Last accounts filed at ROC |
Yes |
|
Major Shareholders, if applicable |
Yes |
|
Date of Birth of Proprietor/Partner/Director, if available |
Yes |
|
PAN of Proprietor/Partner/Director, if available |
No |
|
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
External Agency Rating, if available |
Yes
|
PERFORMANCE
Production and processing
highlights for the year under report on standalone basis were as under:
Pipes: 473,617 MT (683,132
MT). The decline is mainly on account of executing orders from subsidiary
companies.
Plates: 399,134 MT (396,507
MT]
H. R. Coils: 107,880 MT
(103,456 MT]
Coating: 2,096 K sqm
(852Ksqm).This shows more demand for coated pipes. Power: 173,117 MWH (219,803
MWH).
Depreciation charge
increased mainly due to capitalization of LSAW Plant and Plate and Coil Mill
expansion projects for enhancing productivity /debottlenecking at Anjar.
Finance Costs increased
mainly on account of interest on Compulsorily Convertible Debentures issued
during the year under report and consideration of foreign exchange difference
related to Finance Costs.
EXPANSION AND ACQUISITIONS
• Pipe Project in the United States of
America
With the belief that the
new investments will pave way for the Company to continue on its path of
becoming one of the most respected line pipe companies in the world, the
Company through its subsidiary in the US is expanding its facilities at an
estimated investment of US$79.65 million to manufacture ERW pipes with a
capacity of 175,000 MTPA. With this expansion, the Company's total overall
investment would touch US$280 million since inception
ofthefacilityintheUS.Thepipesto be produced by this US facility will primarily
be used in the gas and oil industry.
• Acquisition of Welspun Maxsteel Limited
During the year under
report, the Company acquired 113,622,058 (87.35%) equity shares of Welspun
Maxsteel Limited, (hereinafter referred to as "WMSL"), a company engaged
in manufacturing of gas based Direct Reduced Iron ('DRI"), at an aggregate
consideration of Rs. 8,042 million under and pursuant to Share Purchase and
Investment Agreement dated June 29, 2011 entered into amongst the Company,
Insight Solutions Limited, Welspun Maxsteel Limited and Welspun Steel Limited
Thus, WMSL became a subsidiary of the Company w.e.f. the date of acquisition
i.e. August 13,2011.
FUNDS UTILIZATION
During the year under
report, the Company has raised funds by issuing Compulsorily Convertible
Debentures of Rs. 7,883.75 million and Global Depository Receipts of Rs.
5,180.85 million. Un utilized proceeds have been invested in liquid securities
as at March 31,2012.
The long term fund of Rs.
10,000 million raised during the previous financial year by issuing Secured Non
Convertible Debentures have been utilized partly for capital expansion and long
term working capital requirement and pending utilization, the balance has been
invested in liquid securities.
The entire Foreign Currency
Convertible Bonds issued by the Company during the financial year 2009 10 is
outstanding and has not been converted into equity shares. The proceeds have
been utilized forthe purpose for which the same was raised and pending
utilization, the balance is lying in bank accounts outside India.
THE COMPANY
OVERVIEW
A leading global manufacturer of steel pipes offering the highest
quality LSAW, HSAW and ERW pipes ranging from / inch to 120 inches, along with
specialized coating, double jointing and bending. The customers include most of
the world's leading oil and gas companies as well as engineering companies
engaged in constructing oil and gas gathering, transportation and processing
facilities.
During FY12, the Company has also commissioned the new LSAW plant at
Anjar with 0.35 million MTPA capacity. The plant will cater to the growing LSAW
demand globally, as well as in
The Company's mission is to deliver value to its customers through its
products and its engineering excellence. The employees of the Company around
the world are committed to continuous improvement by sharing knowledge across a
single global organization.
The Company has deployed state of the art technology in its plants and
adopted the highest standards for quality and service delivery. The Company has
developed unmatched expertise to manufacture pipes of varying qualities, grades
and sizes that are used in long distance transportation of oil and gas for
critical purposes and in complex regions. It is amongst the few manufacturers
of high grade pipe of X-80 and is also the first Company to manufacture the
largest diameter pipe - 56 inches- in both HSAW as well as LSAW in X-80 grade.
The Company's strategy is to be a world leader in the pipes industry by
capitalizing on existing and upcoming pipe markets through strategic
positioning and superior customer relationship.
The Company has continued to undertake some of the most challenging
projects in different parts of the world. The Company has emerged as a
preferred supplier to most of the Fortune 100 Oil and Gas companies. Marketing
offices in Houston (USA), Dubai (UAE), and Dammam (
The Company has been exporting pipes in the global market including some
of the most demanding markets like US and
The Company has been pr-approved by some of the major international oil
and gas companies like British Gas, British Petroleum (UK), Shell
(Netherlands), Exxon, Chevron, Kinder Morgan, Ruby (USA), Enbridge, Enterprise,
TransCanada (Canada), Saipem (Italy), China National Petroleum Corporation, CP
MEC (China), GASCO (Egypt),
Total (France), Petronas (Malaysia), PNG (Indonesia), Saudi Aramco,
Al-Wasit, Saline Water Conversion Corporation, Riyadh, (Saudi Arabia) Qatar Petroleum
(Qatar), Gazprom (Russia) etc to name a few, along with Indian oil and gas
players like Reliance Industries Limited, GAIL, ONGC and Indian Oil Corporation
Limited.
GLOBAL ENERGY
DEMAND
Global energy demand is expected to be about 30%% higher in 2040
compared to 2010, as economic output more than doubles and prosperity expands
across a world whose population will grow to nearly 9 billion people. Energy
demand growth will slow as economies mature, efficiency gains accelerate, and
population growth moderates in countries belonging to the Organization for
Economic Co-operation and Development (OECD) - including countries in North
America and Europe -the energy use remaining essentially flat, even as these
countries achieve economic growth and even higher living standards. In
contrast, Non-OECD energy demand will grow by close to 60 % of the total global
demand.
Oil and Gas (O and G) along with coal continue to be the most widely
used fuels, and have the scale needed to meet global demand, making up about 80
% of total energy consumption in 2040. The natural gas will grow fast enough to
overtake coal for the no. 2 position behind oil. Demand for natural gas will
rise by more than 60%% through 2040. For both oil and natural gas, an
increasing share of global supply will come from unconventional sources such as
those produced from shale formations.
GLOBAL OIL and GAS
DEMAND - SUPPLY SCENARIO
The Oil Demand
The global oil demand estimate for calendar year 2012 is scaled back by
0.1 mb/d to 89.9 mb/d. Subdued global economic growth of 3.5%%, well down on
the near 5%% expansion seen before the global credit crunch, continues to cap
the expected 2012 growth
Demand outside the OECD developed countries was higher while those such
as
Net oil demand growth of 7.2 mb/d during 2010-2016 (+1.2 mb/d annually)
is predicted to be derived entirely from the Non-OECD countries, with
The Oil Supply
According to IEA Oil Market Report 2012, global oil supply stands at
91.9 mb/d as of May 2012. The supply capacity is expected to increase to 100.6
mb/d by 2016. Incremental supplies are evenly split between OPEC crude, OPEC
gas liquids and Non-OPEC total oil, while conventional crude oil accounts for
less than 40% of the total increase. Sustained high crude prices have boosted
upstream activity, and although the issue of resurgent
costs and logistical constraints hangs over the industry, the slate of
active new projects is more than sufficient to offset high rates of mature
oilfield decline. Based on field-by-field trends, the IEA Energy Outlook
assumes that 2010 baseline supply loses over 3 mb/d annually, at a rate of
approximately 5%%, slightly lower than last year's estimate. Higher spending
since early-2009 has had a positive impact on existing assets, as well as
accelerating new projects. This increased energy and oil demand from OECD as
well as Non-OECD countries is a positive sign for the pipe industry with opportunities
to explore not only the existing markets, but also the newer regions with
higher energy and oil demands. Relatively higher prices have generated new
supply, but Non-OPEC growth is coming from higher cost areas.
The
The oil boom has been driven primarily by two factors: First, companies
have taken advantage of new drilling techniques that let them tap
unconventional crude resources, like the shale deposits in
The
GLOBAL GAS
SCENARIO
According to the International Energy Agency's World Energy Outlook
2011, ample supplies, robust emerging markets and uncertainty about nuclear power
all point to a prominent role for gas in global energy mix. Global gas demand
is expected to increase by 576 billion cubic metres (bcm) from 3,361 bcm in
2012 to 3,937 bcm in 2017. Remarkable developments have taken place in natural
gas markets in recent months. There is a strong potential for gas to take on a
larger role, but also for the global gas market to become more diversified and
therefore improve energy security. Recent developments have created
considerable opportunities for greater future use of natural gas globally,
depending on the interaction between economic and environmental factors and
policy interventions in the market.
When replacing other fossil fuels, natural gas can lead to lower
emissions of greenhouse gases and local pollutants. Although natural gas is
considered by many as the 'cleanest' fossil fuel, it is still a fossil fuel.
Its increased use could muscle out low-carbon fuels, such as renewable and
nuclear fuels. However, it is important to be on the cautious side of the climate
benefits as increased share of gas in the global energy mix is not enough on
its own to put the world on a carbon emissions path consistent with a global
temperature rise of no more than 2°C.
Unconventional gas resources are now estimated to be as large as
conventional resources, but their production outlook is uncertain as the use of
hydraulic fracturing to produce unconventional gas has raised environmental
concerns and tested existing regulatory regimes. Adhering to best practices in
production can mitigate potential environmental risks, such as excessive water
use, contamination and disposal. Natural gas is a particularly attractive fuel
for countries and regions that are urbanizing and seeking to satisfy rapid
growth in energy demand, such as
Natural Gas
Global natural gas resources are vast, widely dispersed geographically
and can help improve energy security. All major geographical regions have
recoverable natural gas resources equal to at least 75 years of current
consumption. However, timely and successful development of these resources
depends on a complex set of factors, including government policy choices,
technological capability and market conditions.
Natural gas is the world's fastest-growing fossil fuel, with consumption
expected to increase at an average rate of 1.6% per year from 2008 to 2035.
Growth in consumption occurs in every Independent Evaluation Office (IEO)
region and is most concentrated in Non-OECD countries, where demand increases
nearly three times as fast as in OECD countries. Increases in production in the
Non-OECD regions more than meet their projected consumption growth, and as a
result Non-OECD exports to OECD countries will grow through 2035. Non-OECD
producers will account for more than 81 % of the total growth in world natural
gas production from 2008 to 2035
Natural Gas consumption was 111 trillion cubic feet in 2008 and would
reach 169 trillion cubic feet by 2035 as per IEA estimates. The natural gas
supply is becoming larger and is getting spread over many regions and
locations, which shall continue to fuel the demand for pipeline infrastructure
The Total world natural gas consumption for industrial uses is expected
to increase by an average of 1.7% per year through 2035, and consumption in the
electric power sector is expected to grow by 2.0 % per year. The industrial and
electric power sectors together account for 87% of the total projected increase
in natural gas consumption. Contributing to the strong competitive position of
natural gas among other energy sources is a strong growth outlook for reserves
and supplies. Significant changes in natural gas supplies and global markets
continue with the expansion of LNG production capacity, even as new drilling
techniques and other efficiencies have made production from many shale basins
economical worldwide. The net impact has been a significant increase in resource
availability, which contributes to lower prices and higher consumption.
The largest production increases from 2008 to 2035 are projected for the
Middle East (15.3 trillion cubic feet) and non-OECD
Shale Gas
Shale gas has become an increasingly important source of natural gas and
crude oil in the not just the United States over the past decade, but also in
other parts of the world like Canada, Europe, Asia and Australia. Shale gas has
been referred to as "the biggest energy innovation of the decade" by
world renowned energy economist Mr. Daniel Yergin.
The gravity centre of natural gas market is being gradually shifted to
the Asia-Pacific. Within the past 10 years, Asia Pacific's annual gas
consumption has doubled, growing from less than 300 bcm to 630 bcm and its
proportion in global gas consumption has rapidly increased to 20% from 12%. The
gas consumption in this region is expected to be doubled again over the next 20
years, and Asia Pacific is very likely to surpass the
For Asia-Pacific, driven by the demand growth in
Demand and Supply: Gas consumption to increase at a slower CAGR of 7.7%
on account of a slower ramp-up of domestic gas supplies. The total gas demand
in 2011-2012 stood at 253 mmscmd and is expected to be at 550 mmscmd by
2019-20. Though the fertilizers and power sectors will continue to be the major
consumers of natural gas in 2019-20, growth in consumption from the power
sector is likely to be affected by limited incremental domestic gas supplies.
Demand growth from the City Gas Distribution (CGD) segment is also likely to
slow down following increased usage of higher cost LNG, delay in clearances and
rollout, and lack of regulatory thrust across all cities. Total gas supply
stood at 155 mmscmd in 2011-12, and is expected to be at 215 mmscmd by 2019-20.
GLOBAL STEEL PIPE
DEMAND OUTLOOK
Global business potential for new pipeline projects augments well for
the pipe demand. Based on the existing pipeline projects, the global pipeline
demand is projected to be around 91 million tons for about 722 projects
resulting in an opportunity for supplies of more than US$ 110 billion across
the globe for the next four years as brsented in the table below by Simdex as
on February 2012
The Crude Oil -
primary product for transportation
With the recovery in global economies and particularly in the
WORLD and
The total DRI production in 2011 rose to 73.3 million tonnes setting yet
another new record for the industry. Growth slowed in some areas of the world,
but in other regions increased production more than counteracted the declining
locales. Although last year's production rose 3 million tonnes from 2010's
total production, it marks nearly a 9 million tonne increase from 2009's 64.4
million tonnes.
Four nations experienced significant growth. These included the United
Arab Emirates (UAE) with an increase of 1.1 million tonnes,
Some countries did see a decline in production. Nations where there was
significant decline included India, which produced 1.45 million tonnes less in
2011 than in 2010, and Libya, which fell by 0.8 million tonnes.
PIPE INDUSTRY
OUTLOOK AND DEMAND
Shale Gas - huge
potential in pipeline demand
The discovery of Shale gas provides a huge potential for increase in
pipeline demand for the coming years, especially small diameter pipes.
Long-term growth in Shale gas production is expected to play an important role
in shaping North American, European, Australian, and Asian natural oil and gas
demand. Pipelines from shale gas fields are being connected to the main trunk
lines and thus creating demand potential for pipes in a consistent manner.
The Shale Gas Production in the
-
-
-
Oil and Gas sector
remains primary demand driver for pipes industry
The oil and gas industry has been the primary end user and the biggest
demand driver for pipes historically with water infrastructure development and
industrial applications being the other demand centers. Higher oil and gas
prices typically drive exploration capex which in turn fuels demand for
drilling activity (seamless pipes) and for the transportation of resources from
the oil well to the end consumer (Line pipes - LSAW, HSAW and ERW pipes). Even
with oil tumbling these days, most people believe that companies can still turn
a profit drilling as long as it sells for at least US $50 a barrel.
Currently TransCanada, BP, Exxon Mobil and ConocoPhillips are working
together on the next generation of resource development in
The Replacement
Demand - the potential upside
Over the past 70 plus years, a nationwide system of pipelines has been
constructed to transport almost 100% of the natural gas and about 71% of the
oil and refined petroleum products consumed in the
The approximate life of a pipeline on average is 25-30 years. A high
percentage of both hazardous liquid and natural gas transmission pipelines are
way beyond those years, and are expected to be considered for replacement. The
need for replacing old and damaged pipelines became clear during a series of
accidents across North America in 2010 and 2011 in states like
DOMESTIC PIPE
INDUSTRY AND DEMAND
Scope for Indian
Pipe Manufacturers
Firmness in crude oil prices has led to sustained capital expenditure on
global oil exploration and production. Order books of pipe manufacturers are
expected to grow further with sustained capital expenditure.
With the development of new oil fields,
These developments will result in huge investments in pipe
infrastructure to deliver oil and gas across destinations. Since freight is one
of the major cost components for pipe makers, Indian pipe companies would
benefit due to their proximity to
Domestic Pipe
Demand
Domestic pipeline network for oil and gas as well as water is much lower
as compared to US or other developed countries. The pipeline network in
• Overall length ~ 928 km; Traverses through states of AP, Orissa and
• Overall length ~577 km; Traverses through states of AP and Tamil Nadu
Chennai -Tuticorin Pipeline
• Extension of Kakinada-Chennai Pipeline
• Overall length ~585 km; Traverses through state of Tamil Nadu
Chennai-Bangalore-Mangalore Pipeline
• Extension of Kakinada-Chennai Pipeline
• Overall length ~538 km; Traverses through states of Tamil Nadu, AP,
and Karnataka
IOC to invest Rs.
77,000 million in pipelines by 2015
Refining and retailing major Indian Oil Corporation (IOC) plans to
invest 77,000 million by 2015 to expand its pipeline network. IOC plans to lay
more than 20 new pipelines to expand its network from 10,900 km to 15,000 km by
2015. IOC uses its pipelines to transport crude oil from the coast to its
refineries and distribute refined products across the country. IOC also plans
to transfer LNG and natural gas through it pipelines.
ONGC to invest in
EandP, potential increase in pipe demand
State-owned Oil and Natural Gas Corporation Limited (ONGC) will invest
Rs. 1,640,000 million in oil and gas exploration during 2012 to 2017. The
company is targeting production of 149 million tonnes of crude oil during this
period. About 97% of the planned CAPEX will be on exploration and production,
potentially increasing
demand for steel pipes.
KEY GROWTH DRIVERS
IN THE INDIAN PIPES INDUSTRY
Petroleum and
Natural Gas Regulatory Board initiatives
PNGRB has initiated the push for more pipelines that will enhance
pipeline infrastructure and facilitate PNG distribution in various cities
across
PNGRB was awarded Rs. 8,550 million interstate gas pipeline project in
PNGRB also approved a 1,104 km Kochi-Koottanad-Bangalore-Mangalore gas
pipeline project in 2012
City Gas
Distribution (CGD) to create value in long term
City gas distribution (CGD) is among the fastest growing segments in the
gas sector with all major players recording rapid growth in the past couple of
years. The segment would continue to grow in the coming years as well with 20
per cent growth in demand in metropolitan cities and 15% in other areas. Among
the customers, demand growth from the industrial segment is expected to be the
fastest followed by the transportation segment.
The CGD segment has grown on the back of a competitive regulatory
environment provided by the Petroleum and Natural Gas Regulatory Board (PNGRB),
which plans to roll out CGD networks in over 200 new cities by 2015. The new
regulatory framework has facilitated the entry of several new players in the
segment including some of the existing energy and infrastructure players, and
an international major, which is exploring a joint venture with an Indian firm
for gas sourcing and distribution.
Though the long-term prospects are bright, the CGD segment has been
stagnating since early 2011. While the
Expeditious completion of pipelines that have been approved by the
government and award of new licenses for pipelines are crucial for the
development of the CGD segment. The CGD industry also faces challenges in
sourcing gas for networks, particularly because the government has curtailed
supply to non-core sectors including CGD due to a fall in production from the
Krishna-Godavari basin. However, given the economic and environmental
advantages of CGD, especially with the increasing price of competitive fuels,
several operators are sourcing liquefied natural gas (LNG) for their networks.
Source: 7th Annual Conference, Indian Infrastructure, March 2012.
Natural Gas to
propel the pipe demand
Imports of liquefied natural gas (LNG) by
Signing long-term deals now would ensure more profitable operations for
importers of LNG. Lackluster domestic exploration results give little reason to
expect a turnaround at home. Geopolitical hurdles to pipeline supplies through
fractious neighbours like
Natural gas is approximately only about 11% of the primary energy
production and consumption in the country. This is expected to increase
significantly reaching around 20% by 2025. Rapid economic growth and
environmental concerns lead to the rise in diversification of energy use, as
many believe natural gas to be the cleanest form of energy. In spite of the
growth and diversification energy consumption in
Liquefied Natural
Gas (LNG) terminals to enhance pipe demand in India
·
Dahej LNG Terminal of 10.0 million MTPA managed by
Petronet LNG Limited located at the West Coast, State of Gujarat in Gulf of
Cambay. Further expansion plans to 15 million MTPA underway. This terminal is
well connected to major trunk pipelines HBJ and DUPL of GAIL and
·
Hazira LNG Terminal of 3.6 million MTPA operated by
Shell and Total; expected throughput capacity of 10.0 million MTPA with an
investment of Rs. 30,000 million.
·
GAIL brsence at Dabhol with LNG terminal of 5.0
million MTPA. Besides the above mentioned terminals, below are the proposed LNG
terminals that could add another 25.0 million MTPA LNG import capacity if
executed.
·
Petronet's
·
LNG new proposed terminal at Ganagavaram, Andhra
Pradesh of 5 million MTPA with estimated cost of project at Rs. 45,000 million
(US$ 900 million).
·
Dhamra Port Company Limited (DPCL), a joint venture
between Larsen and Toubro Limited and Tata Steel Limited is proposing an LNG
terminal of approximately 5.0 million MTPA on the east coast of
·
IOC has also proposed a 5 MTPA LNG terminal at
Ennore, Tamil Nadu.
·
The planned Mundra LNG terminal having a capacity
of 5 MTPA (with an option to scale up the capacity) is being developed at the
port city of
New LNG terminals as well as expansion of the existing ones is likely to
result in increased pipe demand for
transportation of LNG from the terminals to end stations.
Shale Gas in
In January last year, the US Energy Information Administration estimated
that India held 38 trillion cubic feet of proven natural gas reserves which was
considered good enough for the needs of the nation for 29 years. As per the
initial studies, many Shale sequences in well explored basins are found to be
promising like Damodar, Cambay, and Krishna Godavari and Cauvery basins.
Schlumberger, a global leader in oilfield services, has pegged the reserves of
gas in Shale deposits across
The government is still continuing its policy framework with shale gas
exploration, and is keen on its efforts to increase exploration of clean
non-conventional energy sources. With such efforts from the government as well
as technological innovations from various oil and gas corporations,
Water sector - A
bigger opportunity in HSAW Pipes in
Water supply, sewerage, solid waste management, and storm water drains
account for about 20% of estimated investment requirements. Further, Rs. 19,900
billion or almost Rs 1,000 billion a year is estimated to be required for OandM
on urban infrastructure during the next twenty years from FY12 to FY31. About
58% of the projects that have been approved are in the water supply and
sanitation sectors. This implies increases in urban infrastructure investment
at 15 per cent per annum in the Twelfth Plan, 12 per cent per annum in the
Thirteenth Plan and 8 per cent per annum in the Fourteenth and Fifteenth Plans.
Jawaharlal Nehru
National Urban Renewal
The
WELSPUN'S
HIGHLIGHTS
Capacities in key
markets of North America, Middle East, and India
The Company's total pipe capacity has reached 2.20 million MTPA with the
commissioning of 0.35 million MTPA LSAW capacity in Anjar, in FY12. Now it has
capacities in
Initiated a new
ERW Mill at
To service its oil and gas clients across the entire product range and
address the strong growth in the ERW line pipe segment in North America, the
Company is implementing 0.175 million MTPA ERW mill and Coating Plant in
With the domestic capacities, the Company is well poised to tap the
opportunities arising from Oil and Gas pipeline projects in
In addition to the
above capacities coating plant in Saudi Arabia also commissioned to cater MENA
Region
With the commissioning of coating capacity of 1.0 million sq. mtrs last
year at
Marketing and
Sales offices in key markets worldwide
The presence of marketing and sales offices in Mumbai and
Strong order book
position at Rs. 74,470 million; Outstanding Pipe Order book over 1 million
tonne
The order book stands at stands at Rs. 74,470 million (US$ 1,350
million). 1,029K tonnes in pipes and 54K tonnes in plates (external orders) as
on 29th May 2012. 81% of pipe orders are from export markets like North
America, Middle East, Africa and
Investment by
Insight Solutions Limited and Granele Limited (one of
As on 18th of August 2011, Board of Directors of the Company authorized
the issuance and allotment of Global Depository Receipts (GDRs) and
Compulsorily Convertible Debentures (CCDs) to Insight Solutions Limited and
Granele Limited respectively. As a part of the total commitment of US$ 293
million in the Company, of which approximately US$ 178 million have been
invested by way of the brferential allotment of CCDs to Granele Limited, and
approximately US$ 115 million by way of non-voting GDRs. The CCDs carry a
coupon of 5% and will be mandatory fully converted within 18 months into equity
shares at Rs. 225 per share, which represents 12.22% of the fully diluted
equity capital of the Company. Funds affiliated with Insight Solutions have
also subscribed for non-voting GDR's of US$ 115 million at the same price of
Rs. 225 per share.
Acquisition of
Welspun Maxsteel Limited by the Company
The Company acquired 87.35% equity interest of Welspun Maxsteel Limited in
FY12 for a total consideration of Rs. 8,042 million. This acquisition was done
with an objective of backward integration towards steel making i.e Sponge Iron
used to make the steel slabs for the plate mill. Further, Insight Solutions
Limited has acquired 12.5% of equity of Welspun Maxsteel Limited from Welspun
Steel Limited for a total consideration of approximately US$ 31 million.
WELSPUN'S STRATEGY
Over the years, the Company has made its mark as one of the best manufacturers
of high end quality products in the international pipe market. The Company is
focused on increasing its product efficiency and building strong customer
relationships by being a local player in key markets, and positioning itself
strategically to capture business from newer markets.
The Company's current HSAW plants comprise of total capacity of 1.3
million MTPA, and are located near major markets of North America, Latin
America, Middle East, and
Exploring new
markets
The Company has traditionally received strong orders from North America,
Capability,
consistency, and continuously improving performance recognized by global
clientele
The Company is receiving repeat orders from loyal customer base and has
been consistently providing them with the highest quality products and
services.
Leverage
accreditations with international OandG majors
The Company has been br-approved with international Oil and Gas majors
and is further leveraging the relationship by partnering them and do research
and development on high grade critical applications for newer projects.
Simultaneously, the Company is growing its delivery capabilities with multi
location plants with its state of the art technologies and processes.
Continuous efforts
toward becoming the most respected steel pipes company in the world.
The Company is continuously focused on improving its capacities, as well
as strengthening its position as a leading global player. In Q3 FY12, the new
LSAW mill with 0.35 million MTPA capacity was commissioned taking the total
LSAW capacity to 0.70 million MTPA. With the implementation of the new ERW
plant in
WELSPUN ON THE
PATH OF LEADERSHIP THROUGH:
SCALE LEADERSHIP: Scale of
operations through large economical plants across the globe
TECHNOLOGY
LEADERSHIP: Adopt and innovate cutting-edge technology to satisfy stringent
customer requirements
QUALITY
LEADERSHIP: Consistent focus on quality at all levels, be the best in satisfying
customers
PROCESS LEADERSHIP: Most efficient
and effective processes to achieve the most optimal utilizations
PEOPLE LEADERSHIP: BEST IN CLASS
PEOPLE produce extraordinary results
GLOBAL LEADERSHIP: Serve globally,
act locally
BUSINESS OUTLOOK
·
The outlook for
the pipe business is improving.
- On the demand side, drilling activity in
·
The global plate industry is still facing a
challenged demand environment. Steel slab prices continue to be high, further
impacting margins. They expect some easing of supply constraints in the slab
market; and hope to continue strengthening the technical capabilities of our
plate mill in the following years to come.
·
The Company's infrastructure business (Welspun
Projects Limited and Leighton Welspun Contractors Private Limited) has shown
positive growth, and continues to win substantial orders.
·
Welspun Maxsteel Limited continues to maintain its
edge with good customer base but due to lower gas availability remains a major
issue. It is forced to buy most of its gas requirements from alternative
sources at higher cost to operate the DRI plant. The appropriate Company
officials are working with the concerned regulatory bodies and the government
to improve the gas scenario, and the Company is confident of a turnaround in
the near future.
·
Welspun Energy Limited (WEL) has successfully
scaled up its renewable business and developed four operating assets generating
30MW. It is further developing 105MW in FY13.
UNAUDITED STANDALONE FINANCIAL RE5ULTS FOR
THE QUARTER/HALF YEAR ENDED 30 SEPTEMBER 2012
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
||
|
|
Quarter ended 30 September 2012 |
Quarter ended 30 June 2012 |
Half Year ended 3D September 2012 |
||
|
|
(I) |
(ID |
(IV) |
||
|
1 |
|
Net Sates/Income from Operations (net)
(Refer Note 2) |
16058.400 |
18193.100 |
34251.500 |
|
|
|
Total Income From Operations (net) |
16058.400 |
18193.100 |
34251.500 |
|
2 |
.a b c d e f g |
Expenses Changes in Inventories of finished goods and
goods in progress Cost of material consumed Purchase of stock in trade Employee benefits expense Depreciation and amortisation expense Coating and their job charges Other Expenses |
30.900 8502.800 4001.500 546.300 553.900 640.400 1439.400 |
617.500 10094.800850.100 581.300 559.200 1993.100 3236.700 |
586.600 18697.600 4851.600 1127.700 1113.100 2633.400 4676.000 |
|
|
|
Total expenses |
15753.400 |
17932.700 |
33686.100 |
|
3 4 |
|
Profit from operations before other income and
finance costs 11-2) Other Income (Refer Note 3) |
305.000 547.300 |
260.500 623.800 |
565.500 1171.100 |
|
5 |
|
Profit from ordinary activities before finance costs
(3+4) |
852.300 |
884.300 |
1736.600 |
|
6 |
|
Finance Costs |
635.300 |
851.400 |
1466.700 |
|
7 |
|
Profit from ordinary activities after
finance costs but before tax (5-6) |
217.000 |
32.900 |
249.900 |
|
8 |
|
Tax expenses (Current, Deferred Tax. MAT
etc) |
47.500 |
3.500 |
51.000 |
|
9 |
|
Net Profit from ordinary activities after
tax (7-8) |
169.500` |
29.400 |
198.900 |
|
10 |
|
. Paid-up Equity Share Capital (face value Rs.2 per share) |
1138.900 |
1138.900 |
1138.900 |
|
11 |
|
Reserves excluding revaluation reserve as per balance sheet of
previous accounting year |
- |
- |
- |
|
|
|
. Earning Per Share |
|
|
|
|
12 |
|
a. Basic and |
0.74 |
0.13 |
0.87 |
|
|
|
b. Diluted |
0.74 |
0.13 |
0.87 |
|
|
|
Public shareholding |
|
|
|
|
|
|
- No. of shares |
141311554 |
141311554 |
141311554 |
|
|
|
- % of holding (to total shareholding) |
62.04 |
62.04 |
62.04 |
|
|
|
Promoters And Promoter Group Shareholding a) Pledged/ Encumbered |
|
|
|
|
|
|
-Number of Shares |
4055000 |
31000000 |
40550000 |
|
|
|
-% of Shares (As a % of the total Shareholding of Promoter and
Promoter Group) |
46.90 |
35.85 |
46.90 |
|
|
|
-% of Shares (as a % of the total share capital of the Company) |
17.80 |
13.61 |
17.80 |
|
|
|
b) Non Encumbered |
|
|
|
|
|
|
- Number of Shares |
45919481 |
55469481 |
45919481 |
|
|
|
-% of Shares (As a % of the total Shareholding of Promoter and
Promoter Group) |
53.10 |
64.15 |
53.10 |
|
|
|
-% of Shares (as a % of the total share capital of the Company) |
20.16 |
24.35 |
20.16 |
|
|
|
Public shareholding |
|
|
|
Note:
·
Segment
Reporting as required under Accounting Standard 17 is not applicable as the Company
operates only in one segment.
·
The company had collected VAT of
Rs. 365.748 Millions
on sales in earlier years which was not paid and shown as liabilities, claiming
it within VAT incentive limit and department being disputing sanctioned claims. The
claim of the company is accepted in assessment order of earlier years by VAT
authorities; hence the VAT collected is included as income in the above
results.
·
The above results were reviewed
and recommended by the audit committee and approved by the board of directors
in its meeting held on 10th November 2012 in terms of clause 41 of the listing
agreement
·
The statutory auditors have
carried out a limited review of the standalone results for the qurter/half year
ended 30 September 2012
·
Previous year period figures have
been regrouped and reclassified wherever considered necessary
|
|
|
Particulars |
Unaudited |
|
|
|
|
30-Sep-12 |
|
A |
|
Equity and liabilities |
|
|
1 |
|
Shareholders' funds |
|
|
|
a |
Share capital |
1138.900 |
|
|
b |
Reserves and surplus |
35122.500 |
|
|
|
Sub-total- Shareholders's funds |
36261.400 |
|
2 |
|
Compulsorily Convertible Debentures |
7883.800 |
|
3 |
|
Non-current liabilities |
|
|
|
a |
Long-term borrowings |
23173.200 |
|
|
b |
Deferred tax liabilties (net) |
3596.100 |
|
|
c |
Other long-term liabilities |
2511.500 |
|
|
d |
Long-term provisions |
174.700 |
|
|
|
Sub-Total- Non Current Liabilities |
29455.600 |
|
4 |
|
Current liabilities |
|
|
|
a |
Short-term borrowings |
2261.600 |
|
|
b |
Trade payables |
20891.300 |
|
|
c |
Other current liabilities |
8018.500 |
|
|
d |
Short-term provisions |
1446.900 |
|
|
|
Sub-total- non current liabilities |
32618.400 |
|
|
|
TOTAL-Equity and liabilities |
106219.100 |
|
B |
|
Assets |
|
|
1 |
|
Non-current assets |
|
|
|
a |
Fixed assets |
32123.400 |
|
|
b |
Non-current investments |
16252.200 |
|
|
c |
Long-term loans and advances |
3129.600 |
|
|
d |
Other non-current assets |
- |
|
|
|
Sub-total- non current assets |
51505.100 |
|
2 |
|
Foreign Currency Monetory Item Translation |
459.5000 |
|
|
|
Difference Account |
|
|
3 |
|
Current assets |
|
|
|
a |
Current investments |
17110.800 |
|
|
b |
Inventories |
14842.0 |
|
|
c |
Trade receivables |
15158.000 |
|
|
d |
Cash and Bank Balances |
1778.300 |
|
|
e |
Short-term loans and advances |
4823.800 |
|
|
f |
Other current assets |
541.500 |
|
|
|
Sub-total- current assets |
54254.500 |
|
|
|
TOTAL-assets |
106219.100 |
FIXED ASSETS
- Buildings
- Plant and Machinery
- Office and Other Equipments
- Vehicle
- Furniture And Fixtures
- Software
AS PER WEB SITE
DETAILS
PRESS RELEASE
WELSPUN CORP – ALL TIME HIGH ORDER BOOK POSITION OF 1.2 MN MT
- US SPIRAL PIPE PRODUCTION RECOMMENCES; IN FULL SWING
- ERW PLANT CONSTRUCTION IN US ON SCHEDULE
Mumbai, November 10 2012: Welspun Corp Ltd. (WCL), the flagship Company of the $3.5 billion Welspun Group, today announced its financial results for the second quarter of FY13.
|
Consolidated
Financial Highlights (Figures in Rs. Million) Particulars |
*Q2 FY13 |
Q2 FY12 |
*H1 FY13# |
H1 FY12 |
|
Sales |
20,606 |
20,538 |
46,104 |
38,097 |
|
EBITDA |
2,171 |
2,674 |
4,538 |
5,989 |
|
EBITDA margin |
10.5% |
13.0% |
9.8% |
15.7% |
|
Cash PAT |
1,344 |
1,622 |
2,488 |
3,780 |
*The above results
are after taking into consideration, loss of approximately 70 days of
production at the
# Includes Rs.912 million of foreign exchange provisions for H1 FY13
The Company has bagged new orders
to the tune of Rs.18 billion (212K MT of pipes, and plates) from domestic and
international Oil & Gas majors from key markets such as
Consolidated Net Debt position
stands at Rs. 34,502 million as of end-Q2. Net debt has marginally increased
mainly on account of raw material inventory build-up at the
As regards Foreign Currency
Convertible Bonds (FCCB), the Company has bought back bonds worth US$44.1
million (out of total bonds of US$150 million) in October 2012. The same was
funded out of new foreign currency loans raised with a door-to-door maturity of
six years. Similarly, the Company could successfully place NCD worth Rs. 3,428
million at the most competitive rate.
Commenting on the results, Mr.
B. K. Goenka, Chairman, Welspun said, “New orders (many of them repeat),
despite challenging environment, signifies the strong brand equity that Welspun
enjoys amongst large O&G players in the world. With US spiral plant
operating now at full swing and our ERW mill nearing completion, Welspun’s
position in the key North American market shall be further strengthened. We
believe that Welspun’s commitment towards customer satisfaction shall enable it
to win new pipe orders and drive the growth of the Company”.
Production and Sales
|
Volume (in KMT) |
Q2 FY13 |
Q2 FY12 |
H1 FY13 |
H1 FY12 |
|
Production |
||||
|
Pipes |
181 |
199 |
398 |
379 |
|
Plates & Coils |
101 |
102 |
251 |
210 |
|
Sales |
||||
|
Total Pipes Consolidated |
181 |
210 |
359 |
413 |
|
Plates & Coils* |
102 |
104 |
250 |
219 |
Business Outlook
Business environment for the Pipe market continue to be
challenging. However, Welspun is confident of maintaining its leadership position
on the back of its proven execution track record and the trust it enjoys among
its customers. The company is well-positioned to win new orders across the key
demand markets of North America, Middle East and
The Plates, DRI and Infra businesses continue to be
challenging amidst difficult steel and infra market conditions.
About Welspun Corp
Ltd. (WCL) www.welspuncorp.com
Welspun Corp (www.welspuncorp.com)
is a one-stop service provider offering complete pipe solution with a
capability to manufacture line pipes ranging from ½ inch to 121 inches, along
with specialized coating, double jointing and bending. With current capacity of
2.2 mn MTPA in Dahej, Anjar and Mandya in
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] 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.54.16 |
|
|
1 |
Rs.82.45 |
|
Euro |
1 |
Rs.70.70 |
INFORMATION DETAILS
|
Report Prepared
by : |
SDA |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTER |
|
|
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
64 |
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.