MIRA
INFORM REPORT
|
Report Date : |
10.01.2013 |
IDENTIFICATION DETAILS
|
Name : |
EASUN REYROLLE LIMITED (w.e.f. 30.09.1997) |
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Formerly Known
As : |
EASUN REYROLLE RELAYS AND DEVICES 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 : |
29.08.1974 |
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Com. Reg. No.: |
18-006695 |
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Capital
Investment / Paid-up Capital : |
Rs.41.614
Millions |
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CIN No.: [Company Identification
No.] |
L31900TN1974PLC006695 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
CHEE03221B |
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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
: |
The company is engaged in power transmission and distribution. |
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No. of Employees
: |
398 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (50) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 9400000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established company having a satisfactory track record.
Financially company seems to be good. Trade relations are reported to be
fair. Business is active. Payments are
reported to be regular and as per commitment. The company can be considered for normal business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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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
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including industrial
deregulation, privatization of state-owned enterprises, and reduced controls on
foreign trade and investment, began in the early 1990s and has served to
accelerate the country's growth, which has averaged more than 7% per year since
1997. India's diverse economy encompasses traditional village farming, modern
agriculture, handicrafts, a wide range of modern industries, and a multitude of
services. Slightly more than half of the work force is in agriculture, but
services are the major source of economic growth, accounting for more than half
of India's output, with only one-third of its labor force. India has
capitalized on its large educated English-speaking population to become a major
exporter of information technology services and software workers. In 2010, the
Indian economy rebounded robustly from the global financial crisis - in large
part because of strong domestic demand - and growth exceeded 8% year-on-year in
real terms. However, India's economic growth in 2011 slowed because of persistently
high inflation and interest rates and little progress on economic reforms. High
international crude prices have exacerbated the government's fuel subsidy
expenditures contributing to a higher fiscal deficit, and a worsening current
account deficit. Little economic reform took place in 2011 largely due to
corruption scandals that have slowed legislative work. India's medium-term
growth outlook is positive due to a young population and corresponding low
dependency ratio, healthy savings and investment rates, and increasing
integration into the global economy. India has many long-term challenges that
it has not yet fully addressed, including widespread poverty, inadequate
physical and social infrastructure, limited non-agricultural employment
opportunities, scarce access to quality basic and higher education, and
accommodating rural-to-urban migration.
|
Source
: CIA |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
ICRA |
|
Rating |
BB- (Long Term Rating) |
|
Rating Explanation |
Having moderate risk of default regarding timely servicing of
financial obligation. |
|
Date |
September 2012 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office/ Export Division 1 : |
“ |
|
Tel. No.: |
91-44-24346425/
7608 |
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Fax No.: |
91-44-24346435 |
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E-Mail : |
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Website : |
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Corporate Office/ Development
Centre : |
Technology
Development Centre 389, “Rasu Kumaki”, Hulimavu, Bannergatta Road, Bangalore - 560 076,
Karnataka, India |
|
Tel. No.: |
91-80-67177000/
7001 |
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Fax No.: |
91-80-67177002 |
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|
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Factory 1 : |
Hosur Plant –
Unit I Plot No.98, Sipcot
Industrial Complex, Hosur – 635 126, Krishnagiri District, |
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Tel. No.: |
91-4344-401600/
01/ 02 |
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Fax No.: |
91-4344-276397 |
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E-Mail : |
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Factory 2 : |
Bangalore Plant
– Unit II 17/3, Arakere
Village, Bannergatta Road, Bangalore – 560 076, Karnataka, India |
|
Tel. No.: |
91-80-26581023/
3268 |
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Fax No.: |
91-80-26580642 |
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E-Mail : |
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Factory 3 : |
Global
Manufacturing Facility Plot No.147/148 Harohalli Industrial Area, 2nd Phase Madamaranahalli Village Harohalli Hobli, Kanakapura Taluk, Ramanagara, District – Karnataka, India |
DIRECTORS
As on: 31.03.2012
|
Name : |
Mr. Hari Eswaran |
|
Designation : |
Chairman |
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Date of Birth/Age : |
75 years |
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Qualification : |
Institution of Electrical Engineering, U.K. |
|
Other Directorship : |
1. Indian Electrical and Electronics Manufacturers Association 2. Madras Chamber of Commerce and Industry 3. Association of Indian Engineering Industry (Southern Region), now known as CII 4. Employers Federation of Southern India |
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Name : |
Mr. Raj H. Eswaran |
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Designation : |
Director |
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Name : |
W.S. Jones |
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Designation : |
Director |
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Date of Birth/Age : |
70 years |
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Qualification : |
Royal Academy of Engineers and the Institution of Engineers and Technicians, UK. |
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Experience : |
20 years |
|
Other Directorship : |
1. BNES Limited 2. NI Enterprises Limited 3. Switchcraft Europe GmbH, Germany 4. Switchcraft Limited, Hong Kong 5. ERL Marketing International FZE., Sharjah |
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|
Name : |
Mr. Rakesh Garg |
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Designation : |
Director |
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Name : |
J.D.N. Sharma |
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Designation : |
Director |
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Date of Birth/Age : |
67 years |
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Qualification : |
Engineer, IIT Kharagpur |
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Experience : |
45 years |
|
Other Directorship : |
1. ERL Phase Power Technologies Limited, Canada, 2. ERL International Pte. Limited, Singapore, 3. ERL Marketing International FZE, Sharjah, 4. Switchcraft Europe GmbH, Germany, 5. Switchcraft Limited, Hong Kong and 6. Hosur Si pcot Development Association (Hosida) |
KEY EXECUTIVES
|
Name : |
K.N. Nagesha Rao |
|
Designation : |
Secretary and VP (Corporate Finance) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on: 30.09.2012
|
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
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|
603119 |
2.90 |
|
|
5369167 |
25.80 |
|
|
5972286 |
28.70 |
|
|
|
|
|
|
75000 |
0.36 |
|
|
75000 |
0.36 |
|
Total shareholding of Promoter and Promoter Group (A) |
6047286 |
29.06 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
905004 |
4.35 |
|
|
5000 |
0.02 |
|
|
231540 |
1.11 |
|
|
231540 |
1.11 |
|
|
1141544 |
5.49 |
|
|
|
|
|
|
3171158 |
15.24 |
|
|
|
|
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|
7133110 |
34.28 |
|
|
3313916 |
15.93 |
|
|
13618184 |
65.45 |
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Total Public shareholding (B) |
14759728 |
70.94 |
|
Total (A)+(B) |
20807014 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
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|
0 |
0.00 |
|
Total (A)+(B)+(C) |
20807014 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
The company is engaged in power transmission and distribution. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Licensed
Capacity per annum Qty.
(Nos.)# |
Installed
Capacity per annum Qty.
(Nos.) |
Actual
Production for the year Qty.(Nos.) |
|
1. Micro
processor/ Non-Microprocessor Based Products and Systems for Relays, Meters,
Control and Automation |
- |
9,49,200 |
1,20,544 |
|
2. Switchgears |
- |
3,500 |
1,555 |
|
3. Wind Energy** |
- |
30,00,000 |
22,13,038* |
GENERAL INFORMATION
|
No. of Employees : |
398 (Approximately) |
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Bankers : |
· Axis Bank · DBS Bank · Standard Chartered · State Bank of India |
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Facilities : |
(Rs.
In Millions)
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
Brahmayya and
Company Chartered
Accountants |
|
Address : |
48, |
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Name 2 : |
R. Subramanian
and Company Chartered
Accountants |
|
Address : |
36, |
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Associate
Companies : |
· Easwaran and Sons Engineers Limited · Easun Mr Tap Changers Private Limited · ERL Phase Power Technologies Limited · ERL International Pte Limited · ERL Marketing International FZE · ERL Thailand Private Limited · Easun Products of India Private Limited · Switchcraft Limited · Switchcraft Gmbh |
CAPITAL STRUCTURE
As on: 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
75000000 |
Equity Shares |
Rs.2/- each |
Rs.150.000 Millions |
|
5000000 |
Preference Shares |
Rs.10/- each |
Rs.50.000 Millions |
|
|
Total |
|
Rs.200.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
20807014 |
Equity Shares |
Rs.2/- each |
Rs.41.614
Millions |
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|
Reconciliation of
number of shares
|
Particulars |
As at 31st March 2012 |
|
|
No. of Shares held |
Amount (In Millions) |
|
|
Balance at the beginning of the year |
2,07,71,605 |
41.543 |
|
Add: ESOP shares issued during the year (Refer Note no 31) |
35,409 |
0.071 |
|
Less: Shares bought back during the year |
- |
- |
|
Balance at the end
of the year |
2,08,07,014 |
41.614 |
Rights, preferences
and restrictions attached to shares
Equity Shares:
The company has one class of equity shares having a par value of Rs.2 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Details of equity
shares held by shareholders holding more than 5% shares of the aggregate shares
in the Company
|
Particulars |
As at 31st March 2012 |
|
|
No. of Shares held |
% of holding |
|
|
Easun Products of India Private Limited |
22,67,557 |
10.90% |
|
Easun Engineering Company Ltd |
16,32,500 |
7.85% |
|
Power Ventures Holdings (India) Private Limited |
16,28,088 |
7.82% |
|
Sowraj Investments Private Limited |
14,58,060 |
7.01% |
Shares Reserved for
issue under Options and Contracts /Commitments for sale of Shares
Employee Stock Option
Scheme
During 2009-10, the Company established "Easun Reyrolle Employee Stock Option Plan 2009" under which 10,00,000 options have been allocated for being granted to the employees and non promoter directors . The Company has obtained in-prinicple approval from National Stock Exchange Limited , Mumbai (NSE) and Bombay Stock Exchange Limited, Mumbai (BSE) for listing upto a maximum of 10,00,000 shares pursuant to exercise of options granted under the Scheme. Each option comprises one underlying Equity Shares of Rs.10/- each. This scheme has been formulated in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. As per the Scheme, the Compensation Committee grants options to senior employees and non promoter directors. The options are granted at a price, which shall not be less than the par value of equity shares of the Company and shall not be more than the Market price as defined in the Guidelines.
Issue of Share
Warrants
During 2010-11, the Company has issued 20,00,000 Convertible Equity Warrants at Rs.133.76 per warrant in terms of the extant guidelines of SEBI on preferential issue. Each warrant is convertible into one equity shares of Rs.2 each within 18 months from the date of allotment. The Company has received Rs.66.880 Millions towards 25% of the warrant as advance money. The balance amount is payable at the time of exercise of the option i.e., on 31st July 2012.
For the year 2011-12, the Board of Directors have recommended a dividend of Rs.0.20 per share, which is subject to the approval by shareholders. During the previous year 2010-11, the Company had declared and distributed a dividend of Rs.1.20 per share.
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 |
41.614 |
41.543 |
41.543 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2254.439 |
2166.933 |
2107.673 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
5] Money received against share Warrants |
66.880 |
66.880 |
0.000 |
|
|
NETWORTH |
2362.933 |
2275.356 |
2149.216 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
1434.707 |
1596.174 |
597.209 |
|
|
2] Unsecured Loans |
190.953 |
188.013 |
195.284 |
|
|
TOTAL BORROWING |
1625.660 |
1784.187 |
792.493 |
|
|
DEFERRED TAX LIABILITIES |
28.242 |
36.036 |
27.020 |
|
|
|
|
|
|
|
|
TOTAL |
4016.835 |
4095.579 |
2968.729 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
419.828 |
455.577 |
294.619 |
|
|
Capital work-in-progress |
278.390 |
163.499 |
88.137 |
|
|
|
|
|
|
|
|
INVESTMENT |
1550.210 |
1561.971 |
1629.628 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
OTHER NON-CURRENT ASSETS |
204.201 |
104.568 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
497.591
|
456.278 |
352.260 |
|
|
Sundry Debtors |
2003.628
|
1702.442 |
1272.817 |
|
|
Cash & Bank Balances |
316.817
|
113.921 |
68.271 |
|
|
Other Current Assets |
22.581
|
17.305 |
0.000 |
|
|
Loans & Advances |
545.387
|
819.371 |
694.513 |
|
Total
Current Assets |
3386.004
|
3109.317 |
2387.861 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
1108.313
|
841.944 |
745.111 |
|
|
Other Current Liabilities |
681.413
|
401.945 |
189.183 |
|
|
Provisions |
32.072
|
55.464 |
497.222 |
|
Total
Current Liabilities |
1821.798
|
1299.353 |
1431.516 |
|
|
Net Current Assets |
1564.206
|
1809.964 |
956.345 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
4016.835 |
4095.579 |
2968.729 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
2767.084 |
2685.394 |
2158.467 |
|
|
|
Other Income |
193.129 |
12.868 |
38.806 |
|
|
|
TOTAL (A) |
2960.213 |
2698.262 |
2197.273 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials Consumed |
2128.453 |
1985.369 |
1426.202 |
|
|
|
Change in Inventory |
(5.816) |
(11.990) |
|
|
|
|
Employee Benefit Expenses |
217.146 |
185.815 |
|
|
|
|
Other Expenses |
286.401 |
288.295 |
|
|
|
|
TOTAL (B) |
2626.184 |
2447.489 |
1426.202 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
334.029 |
250.773 |
771.071 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
180.529 |
89.390 |
58.110 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
153.500 |
161.383 |
712.961 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
52.062 |
46.752 |
45.514 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
101.438 |
114.631 |
667.447 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
8.435 |
31.187 |
108.442 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
93.003 |
83.444 |
559.005 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
NA |
80.213 |
18.415 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
|
10.000 |
400.000 |
|
|
|
Proposed Final Dividend -60% |
|
24.926 |
83.086 |
|
|
|
Tax on Dividend |
|
4.140 |
14.121 |
|
|
BALANCE CARRIED
TO THE B/S |
NA |
124.591 |
80.213 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value Basis |
275.000 |
113.800 |
52.698 |
|
|
TOTAL EARNINGS |
275.000 |
113.800 |
52.698 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Components and Spare parts including in-transit |
734.493 |
506.210 |
324.549 |
|
|
TOTAL IMPORTS |
734.493 |
506.210 |
324.549 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic |
4.47 |
4.02 |
26.91 |
|
|
|
Diluted |
4.01 |
3.60 |
26.41 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
|
30.06.2012 |
30.09.2012 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Net Sales |
|
137.100 |
609.400 |
|
Total Expenditure |
|
233.500 |
517.800 |
|
PBIDT (Excl OI) |
|
(96.400) |
91.600 |
|
Other Income |
|
0.000 |
4.100 |
|
Operating Profit |
|
(96.400) |
95.700 |
|
Interest |
|
41.200 |
59.600 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
PBDT |
|
(137.600) |
36.100 |
|
Depreciation |
|
13.300 |
18.800 |
|
Profit Before Tax |
|
(150.900) |
17.300 |
|
Tax |
|
0.000 |
0.000 |
|
Provisions and contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
(150.900) |
17.300 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
(150.900) |
17.300 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
3.14
|
3.09 |
25.44 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
3.43
|
4.25 |
30.92 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
2.67
|
3.21 |
24.88 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.04
|
0.05 |
0.31 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.46
|
1.36 |
1.04 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.86
|
2.39 |
1.67 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info
Agents |
Available in Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
No |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact person |
No |
|
11] |
Turnover of firm for last three years |
Yes |
|
12] |
Profitability for last three years |
Yes |
|
13] |
Reasons for variation <> 20% |
---------------------- |
|
14] |
Estimation for coming financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
---------------------- |
|
22] |
Litigations that the firm / promoter involved in |
---------------------- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking account |
---------------------- |
|
26] |
Buyer visit details |
---------------------- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if applicable |
Yes |
|
29] |
Last accounts filed at ROC |
Yes |
|
30] |
Major Shareholders, if available |
No |
|
31] |
Date of Birth of Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating, if available |
No |
Operations Review
As can be seen from the above figures, on a standalone basis, the company has achieved a growth of 10% on sales and other income and 5% on the Post tax profit. All the company’s subsidiaries in Canada, Sharjah and Germany has shown substantial improvement in their sales and other income and except for Switchcraft (Germany and Hong Kong), all other subsidiaries have moved into profit zone.
Management
Discussions and Analysis
Macro Economic
Picture (India and Global)
During the past couple of years, the Electrical Industry in India has been showing some signs of a lull, though the long term outlook remains optimistic and bright. With weakened investment climate and tightened capital market, the growth of electrical industry has further slowed down during the year.
The Industrial growth slowed significantly in 2011-2012 on account of weakened domestic demand and lower GDP growth, accompanied by high interest rates, worldwide recession, and consequently a subdued investment climate. Surplus capacities in several sectors resulted in low utilization and resulted in severe margins pressure. Delays in achieving financial closure of various infrastructure projects and continued poor financial position of most of the electrical utilities in India has impacted the performance of electrical industry resulting in carrying higher receivables working capital and higher interest expense, cost overruns in project operations. Globally, the scenario is more or less the same with subdued growth, tight money conditions and uncertain economic scenario.
The Industrial growth slowed significantly in 2011-2012 on account of weakened domestic demand and lower GDP growth, accompanied by high interest rates, worldwide recession, and consequently a subdued investment climate. Surplus capacities in several sectors resulted in low utilization and resulted in severe margins pressure. Delays in achieving financial closure of various infrastructure projects and continued poor financial position of most of the electrical utilities in India has impacted the performance of electrical industry resulting in carrying higher receivables working capital and higher interest expense, cost overruns in project operations.
Globally, the scenario is more or less the same with subdued growth, tight money conditions and uncertain economic scenario.
Performance analysis
of the company:
The company has achieved a modest growth in India, in spite of various economic factors as detailed above and maintained its market share in most of its business verticals. It continued to keep pace in the technological development of its product line which will lead to reducing its dependence on third party products and improving its margins. While the EBIDTA has grown substantially (33%), substantial long term borrowings towards capital investments have resulted in higher interest costs, affecting the pre-tax profits; lower tax implication has resulted in a marginal increase at the PAT level.
During the year, the company has completed construction of a world class facility at Harohalli (Bangalore) as a Global manufacturing base to address the needs of the new products to be introduced from its German subsidiary and also facilitating the backward integration of its manufacturing process in India. The Harohalli Factory has commenced commercial production effective from 1st July, 2012. Another milestone achieved is receipt of a large order (Rs. 1670.000 Millions) from Madhya Pradesh Electricity Distribution Companies.
ERL Phase Power Technologies Ltd, Canada, has shown an impressive growth in sales (47%) during the year and also for the first time achieved positive bottom line. It has completed the development of a range of Protection relays aimed at the transmission segment on a state-of-the-art platform and these products have been introduced to the North and Latin American markets during the year. They are expected to be introduced into the Indian and the global markets from the first quarter of the next financial year.
The German Subsidiary, Switchcraft Europe GmbH has made significant progress in developing new range of Switchgear products. The Company has introduced the Ring Main Units into various global markets successfully and is looking to achieve significant business volumes in the financial year 2012-13. The company has successfully completed all critical tests for the 24kv Switchgear market as required, and is in the process of completion of tests for the 36kv Switchgear 12 Easun Reyrolle Limited market. This Product is a leader in its segment and the company has high hopes of achieving significant breakthrough in the market.
ERL MINT has more than doubled its business volumes during the year and has moved into the profit zone. It has a large number of offers under active consideration from its customers and is hopeful of achieving a substantial growth in top line and in profits during the financial year 2012-13. Availability of number of new technology products at overseas markets in the near future underscores the potential for substantial business growth in the coming years.
While the Indian economy and the power sector in particular are currently showing lack luster growth, the company will be focusing on improving internal efficiencies, reduction of debtors and reducing the input costs and expenses, as well as safeguarding market share in various business segments. Commencement of commercial operations of global manufacturing facilities is expected to bring a substantial impact in this direction.
While EBIDTA margins will improve as a result of various initiatives underway, it has to be borne in mind that the company will have to bear the additional interest and depreciation costs from the current financial year. However, these will be offset by the growth in the business volumes – both in India and internationally.
Contingent
Liabilities and Commitments
(Rs. In Millions)
|
A. Contingent
Liabilities |
2012 |
2011 |
|
Letters of Credit opened by Bank for purchase of raw materials and components |
373.697 |
530.856 |
|
Bills Discounted with bank |
3.984 |
51.640 |
|
Counter Guarantee given to bankers in respect of Guarantees given by them |
1418.385 |
1302.001 |
|
Bonds executed in favour of President of India for import of material at concessional rate of duty |
0.895 |
4.998 |
|
Sales effected under CST - liability towards submission of C Forms |
278.536 |
255.568 |
|
Disputed amounts of Income Tax paid Assessment year 2001-02 2003-04 2004-05 2005-06 2006-07 2008-09 |
3.002 4.785 2.613 7.028 5.542 30.633 |
3.002 4.785 2.613 7.028 5.542 30.633 |
|
Disputed amounts of Sales Tax, Karnataka for the FY 2007-08 |
6.365 |
6.365 |
|
Disputed amounts of Sales Tax, Karnataka for the FY 2008-09 |
4.178 |
4.178 |
|
Disputed Customs Duty paid under protest |
6.638 |
6.638 |
|
VAT Demand of West Bengal for FY 2009-10 |
0.799 |
- |
The Company has incurred expenditure aggregating to Rs.16.897 Millions during the year (Rs.22.935 Millions) on development of products. The expenditure has been capitalized and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2012. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 “Intangible Assets”.
In respect of company’s operations which includes execution of the turnkey projects. These turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.
Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs.18.817 Millions (Rs.32.717 Millions) and net off product development expenses Rs.16.897 Millions (Rs.22.935 Millions).
Expenditure incurred on account of borrowing costs amounting to Rs.59.381 Millions (Rs.26.379 Millions) is capitalized towards new projects and disclosed under Capital Works in Progress.
Unaudited Financial Results for the Quarter and Half Year ended 30th September, 2012
(Rs. In Millions)
|
|
3 Months
ended |
6 Months ended |
|
|
Particulars |
30-09-2012 |
30.06-2012 |
30-09-2012 |
|
|
(Reviewed) |
(Reviewed) |
(Unaudited) |
|
a) Net Sales / Income from
Operations (Net of Excise Duty) |
605.200 |
127.500 |
732.700 |
|
b) Other Operating Income |
4.300 |
9.600 |
13.900 |
|
c) Total |
609.400 |
137.100 |
746.500 |
|
Expenditure |
|
|
|
|
a) Cost of materials consumed |
434.300 |
89.500 |
523.800 |
|
b) Purchase of Stock-in-trade |
- |
- |
|
|
c) Change in inventories of finished
goods, work-in- |
(15.900) |
4.300 |
(11.600) |
|
progress and stock-in-trade |
- |
- |
|
|
d) Employee benefit expenses |
55.000 |
53.500 |
108.500 |
|
e) Depreciation and amortisation
expenses |
18.800 |
13.300 |
32.100 |
|
f) Other Expenses |
44.300 |
86.200 |
130.500 |
|
Total Expenses |
536.600 |
246.800 |
783.400 |
|
Profit / (Loss) from Operations
before Other Income, Interest |
72.800 |
(109.700) |
(36.900) |
|
and Exceptional Items (1-2) |
|
|
|
|
Other Income |
4.100 |
0.000 |
4.100 |
|
Profit / (Loss) from ordinary
activities before Finance Cost & |
|
|
|
|
Exceptional Items (3±4) |
76.900 |
(109.700) |
(32.800) |
|
Finance Cost |
59.600 |
41.200 |
100.800 |
|
Profit/ (Loss) from ordinary
activities after Finance Costs but |
|
|
|
|
before Exceptional Items (5 ± 6) |
17.300 |
(150.900) |
(133.600) |
|
Exceptional items |
- |
- |
- |
|
Net Profit / (Loss) from ordinary
activities before tax (7 ± 8) |
17.300 |
(150.900) |
(133.600) |
|
Tax Expense |
- |
- |
- |
|
Net Profit / (Loss) from ordinary
activities after tax (9 ± 10) |
17.300 |
(150.900) |
(133.600) |
|
Extraordinary Items (net of tax
expense) |
- |
- |
- |
|
Net Profit / (Loss) for the period
(11 ± 12) |
17.300 |
(150.900) |
(133.600) |
|
Share of Profit/(Loss) of
Associates) |
- |
- |
- |
|
Minority Interest |
- |
- |
- |
|
Net Profit / (Loss) after taxes,
minority interest and share of |
17.300 |
(150.900) |
(133.600) |
|
profit of associates (13 ± 14 ±
15) |
|
|
|
|
Paid-up equity share capital (Face
Value Rs.2) |
41.600 |
41.600 |
41.600 |
|
Reserves excluding revaluation
reserves |
|
|
21,878 |
|
(as per balance sheet of previous
accounting year) |
|
|
|
|
Earnings Per Share (before and after
extraordinary items) of |
|
|
|
|
Rs.2 each (Not annualised) |
|
|
|
|
a) Basic |
0.83 |
(7.25) |
(6.42) |
|
b) Diluted* |
0.83 |
(7.25) |
(6.42) |
|
PARTICULARS OF SHAREHOLDING |
|
|
|
|
Public Shareholding |
|
|
|
|
- Number of Equity Shares |
14,759,728 |
14,769,728 |
14,759,728 |
|
- Percentage of Shareholding |
70.9% |
71.0% |
70.9% |
|
Promoter and Promoter group
Shareholding: |
|
|
|
|
a) Pledged / Encumbered |
|
|
|
|
- Number of Shares |
Nil |
Nil |
Nil |
|
- Percentage of Shares (as a % of
the total share- |
Nil |
Nil |
Nil |
|
holding of Promoter and Promoter
Group) |
|
|
|
|
- Percentage of Shares (as a % of
the total share |
Nil |
Nil |
Nil |
|
Capital of the Company) |
|
|
|
|
b) Non-encumbered |
|
|
|
|
- Number of Shares |
6,047,286 |
6,037,286 |
6,047,286 |
|
- Percentage of Shares (as a % of
the total share- |
100.0% |
100.0% |
100.0% |
|
holding of Promoter and Promoter
Group) |
|
|
|
|
- Percentage of Shares (as a % of
the total share |
29.1% |
29.0% |
29.1% |
|
Capital of the Company) |
|
|
|
STATEMENT OF ASSETS AND LIABILITIES
(Rs. In Millions)
|
|
Particulars |
As at |
As at |
|
|
|
30/09/2012 |
31/03/2012 |
|
A |
EQUITY AND LIABILITIES |
|
|
|
1 |
(a) Share Capital |
41.600 |
41.600 |
|
|
(b) Reserves & Surplus |
2187.800 |
2254.400 |
|
|
(c) Money received against share
warrants |
- |
66.900 |
|
|
Sub-total - Shareholders' funds |
2229.400 |
2362.900 |
|
2 |
Shre application money pending
allotment |
|
|
|
3 |
Minority Interest |
|
|
|
|
Foreign Currency Monetary
transaction Reserve |
|
|
|
4 |
Non-current liabilities |
|
|
|
|
(a) Long-term borrowings |
766.300 |
669.100 |
|
|
(b) Deferred tax liabilities (net) |
28.200 |
28.200 |
|
|
(c) Other long-term liabilities |
135.500 |
117.900 |
|
|
(d) Long-term provisions |
6.600 |
7.500 |
|
|
Sub-total - Non-current
liabilities |
936.600 |
822.800 |
|
5 |
Current liabilities |
|
|
|
|
(a) Short-term borrowings |
847.100 |
956.600 |
|
|
(b) Trade payables |
1136.300 |
1108.300 |
|
|
(c) Other current liabilities |
|
|
|
|
- Foreign
Currency Convertible Bonds |
211.400 |
206.100 |
|
|
- Others |
375.400 |
357.400 |
|
|
(d) Short-term provisions |
19.200 |
24.500 |
|
|
Sub-total - Current liabilities |
2589.500 |
2652.900 |
|
|
TOTAL - EQUITY AND LIABILITIES |
5755.500 |
5838.600 |
|
B |
ASSETS |
|
|
|
1 |
Non-current assets |
|
|
|
|
(a) Fixed assets |
986.500 |
698.200 |
|
|
(b) Goodwill on consolidation |
- |
- |
|
|
(c) Non-current investments |
1550.200 |
1550.200 |
|
|
(d) Deferred tax assets (net) |
- |
- |
|
|
(d) Long-term loans and advances |
281.000 |
430.100 |
|
|
(e) Other non-current assets |
382.100 |
204.200 |
|
|
Sub-total - Non-current assets |
3199.900 |
2882.800 |
|
2 |
Current assets |
|
|
|
|
(a) Current Investments |
- |
- |
|
|
(b) Inventories |
497.900 |
497.600 |
|
|
(c) Trade receivables |
1509.600 |
2003.600 |
|
|
(d) Cash and cash equivalents |
254.000 |
316.800 |
|
|
(e) Short-term loans and advances |
269.700 |
115.200 |
|
|
(f) Other current assets |
24.300 |
22.600 |
|
|
Sub-total - Current assets |
2555.600 |
2955.900 |
|
|
TOTAL ASSETS |
5755.500 |
5838.600 |
Note:
1. The above Financial Results were reviewed and recommended by the Audit Committee and approved by the Board of Directors at its Meeting held on 16th November, 2012.
2. The Statutory Auditors of the Company have carried out a limited review of the above Unaudited Financial Results
3. The Company is engaged in Power Transmission and Distribution segment and the same is being reported.
4. During the quarter, the Company commenced commercial production at its new Harohalli Plant near Bangalore. Consequently all the operational expenses incurred during the quarter are charged off to Profit and Loss Account.
5. In the Directors' Meeting to be held on 17th November 2012, it is proposed to consider and decide raising funds by way of debt/equity.
6. The figures have been re-grouped wherever necessary to conform to current period's classification.
7. The Company had no pending investor complaints as at 30th June, 2012. During the quarter ended 30th September, 2012, the Company received five complaints from shareholders and the same was attended to and resolved.
FIXED ASSETS:
· Land
· Land - Leasehold
· Land - Hosur Residential Plots
· Buildings
· Buildings – Leasehold
· Plant and Machinery
· Electrical installation/Fittings
· Office equipments
· Furniture
· Vehicles
· Computer Software
· Research and Development
· Buildings
· Plant and Machinery
· Electrical installation/Fittings
· Office equipments
· Technology Know-how
· Non-compete fees
· Product development
· Computer Software
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.96 |
|
|
1 |
Rs.88.23 |
|
Euro |
1 |
Rs.71.92 |
INFORMATION DETAILS
|
Report Prepared
by : |
RAJ |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
50 |
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.