MIRA INFORM REPORT

 

 

Report Date :

17.10.2014

 

IDENTIFICATION DETAILS

 

Name :

ESSAR STEEL INDIA LIMITED (w.e.f.18.01.2012)

 

 

Formerly Known As :

ESSAR STEEL LIMITED

 

 

Registered Office :

27Km., Surat Hazira Road, Hazira, Surat – 394270, Gujarat

 

 

Country :

India

 

 

Financials (as on) :

31.03.2013

 

 

Date of Incorporation :

01.06.1976

 

 

Com. Reg. No.:

04-013787

 

 

Capital Investment / Paid-up Capital :

Rs. 28418.000 Millions

 

 

CIN No.:

[Company Identification No.]

U27100GJ1976FLC013787

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

SRTE00025E

 

 

PAN No.:

[Permanent Account No.]

AAACE1741P

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Manufacturing and Selling of Steel Products.

 

 

No. of Employees :

Not Divulged

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B (29)

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Maximum Credit Limit :

USD 280000000

 

 

Status :

Moderate

 

 

Payment Behaviour :

Slow

 

 

Litigation :

Exist

 

 

Comments :

Subject is a part of “Essar Group”.

 

It is an established company having moderate track record.

 

The company possesses a weak financial profile marked by consecutive losses which has further deteriorated the position of reserves during 2013.

 

The rating take into consideration the liquidity pressures faced due to extraneous challenges impacting in running of steel plant. However, the infusion of funds from the part of promoters has slightly eased the liquidity position and in turn has nurtured the gradual improvement in its ongoing financing exercise.

 

Trade relations are fair. Business is active. Payment terms are reported as slow.

 

In view of support from its group company, the subject can be considered for business dealings with great caution.

 

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 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

INDIAN ECONOMIC OVERVIEW

 

N E W S

 

Verdict Implications : Apex court order may alter coal import dynamics. Traders go slow on talks over coal supply contracts, uncertainty over cancellation of blocks weigh on stocks.

 

Recent arrest of the Chennai head of the Registrar of Companies, the ministry of corporate affairs arm that ensures that companies file all the information required by the Companies Act is the latest manifestation of a messy fight between a father and his adopted son for the control of Rs 40000 mn business empire. The Central Bureau of Investigation arrested Manumeethi Cholan after he accepted Rs 10 lakhs as bribe from M A M Ramaswamy, a CBI official said.

 

Central Bureau of Investigation books Electrotherm for cheating Central Bank of Rs 4360 mn.

 

Infosys maintains revenue guidance. COO Rao says attrition still an area of concern and it would take a few more quarters to bring down levels to 13-15 %.

 

DHL  to invest Euro 100 mn in India over next 2 years. The firm has chosen India to pilot its e-commerce business model for the Asia-Pacific region.

 

Blackstone may buy stake in BlueRidge SEZ in line with the fund’s real estate strategy in India.

 

Kingfisher Airlines Ltd grounded in October 2012 under the weight of heavy debt and accumulated losses, recently approached the Delhi high court for relief in two separate cases. The airline challenged a notice by Punjab & National Bank alleging that It had wilfully defaulted on Rs 7700 mn of loans and sought more time to comply with the requirements under the listing agreements with the Stock Exchanges.

 

OnMobile likely to sack another 300 employees. The lay-offs follow a spate of senior-level exits over the past two years, starting with of its founder. The overall lay-offs could number around 600 and are driven by the need to cut costs, says a former employee.

 

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CARE

Rating

Long Term Bank Facilities = C

Rating Explanation

Have very high risk of default.

Date

24.10.2013

 

 

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 31-03-2014.

 

 

INFORMATION DENIED

 

MANAGEMENT NON CO-OPERATIVE (TEL. NO.: 91-261-2872400)

 

 

LOCATIONS

 

Registered Office/ Plant 1  :

27Km., Surat Hazira Road, Hazira, Surat – 394270, Gujarat, India

Tel. No.:

91-261-2872400/ 6682400

Fax No.:

91-261-2872400/ 6682796/ 6685731

E-Mail :

rakesh.darji@essar.com

dilip.deokar@essar.com

promod.s@essar.com

steel@essar.com

webmaster@essar.com

Website :

www.essar.com

 

 

Corporate Office :

Essar House, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai – 400034, Maharashtra, India

Tel. No.:

91-22-66601100 / 24950606

Fax No.:

91-22-24928896

 

 

Marketing and Sales Office :

6th Floor, Tower-2, Equinox Business Park (Peninsula Techno Park) Off Bandra Kurla Complex, LBS Marg, Kurla (West), Mumbai – 400070, Maharashtra, India

Tel. No.:

91-22-67335000

Fax No.:

91-22-67082189

E-Mail :

steel@essar.com

 

 

Plant 2 :

Vishakhapatnam

 

Scindia Road, Near Flyover, Visakhapatnam – 530004, Andhra Pradesh, India

Tel. No.:

91-891-2523213

Fax No.:

91-891-2559383/ 2556907

 

 

Processing and Distribution Facility Network :

Gat No - 437 and 442, Golechiwadi, Ambi-Nigade Road, MIDC-Talegaon, Pune - 410507, Maharashtra, India 

Tel. No.:

91-211-4661401

 

 

Overseas Offices [Plants] :

Located at

 

·         Canada

·         Indonesia

·         United Kingdom

·         United Arab Emirates

·         Germany

·         China

 

 

DIRECTORS

 

As on 31.03.2013

 

Name :

Mr. Shashikant Nandkishore Ruia

Designation :

Director

Address :

67-A, Walkeshwar Road, Opposite Birla School, Mumbai - 400006, Maharashtra, India

Date of Birth/Age :

23.12.1943

Date of Appointment :

01.06.1976

DIN No. :

00047050

 

 

Name :

Mr. Jatinder Dinanath Mehra

Designation :

Director

Address :

C-1/36, Safdarjung Dev Area, New Delhi - 110016, India

Date of Birth/Age :

03.03.1939

Date of Appointment :

25.06.1997

DIN No. :

00042789

 

 

Name :

Mr. Venkatraman Govind Raghavan

Designation :

Director

Address :

Flat No 171/172, 17th Floor, Kalpataru Residency, Sion Circle, Sion (East), Mumbai - 400022, Maharashtra, India

Date of Birth/Age :

16.07.1945

Date of Appointment :

29.10.2003

DIN No. :

00008683

 

 

Name :

Mr. Dilip Oommen

Designation :

Managing Director

Address :

D-3/4 Nand Niketan Essar Township, Hazira, Surat - 394270, Gujarat, India

Date of Birth/Age :

28.03.1958

Qualification :

Metallurgical engineering from IIT, Kharagpur

Date of Appointment :

07.07.2008

DIN No. :

02285794

 

 

Name :

Mr. Rana Khagendranath Som

Designation :

Additional director

Address :

B-256, Asian Games Village, Ganapati Andalkar Block, New Delhi - 110049, India

Date of Birth/Age :

01.01.1952

Date of Appointment :

03.09.2012

DIN No. :

00352904

 

 

Name :

Mr. Arvind Pande

Designation :

Director

Date of Appointment :

29.05.2013

 

 

Name :

S. S. Kohli

Designation :

Director

Date of Appointment :

29.05.2013

 

 

Name :

S. R. Jain

Designation :

Director

Date of Appointment :

29.05.2013

 

 

Name :

Mr. Alok Dhir

Designation :

Director

Date of Appointment :

29.05.2013

 

 

Name :

Mr. Alok Gupta

Designation :

Director (Marketing)

 

 

Name :

Mr. Ashutosh Agarwala

Designation :

Director (Finance)

Date of Appointment :

29.05.2013

 

 

KEY EXECUTIVES

 

Name :

Mr. Rakesh Muljibhai Darji

Designation :

Company Secretary

Address :

C/602, Royal Complex, Jay Bhavani Road, Kasambaug, Malad (East), Mumbai – 400097, Maharashtra, India

Date of Birth/Age :

25.10.1973

Date of Appointment :

09.09.2011

PAN No. :

AFRPD7254H

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 31.03.2013

 

Names of Shareholders

No. of Shares

 

Essar Steel Asia Holdings Limited

1976845435

Essar Steel Limited, Mauritius

118902096

Imperial Consultants and Securities Private Limited

421760954

Shares under Trust (Venkatraman Govind Raghavan)

191517500

 

 

Allottees as on 08.06.2013

 

Names of Allottee

No. of Shares

 

Essar Steel Limited, Mauritius

5956519

Total

5956519

 

 

Allottees as on 04.12.2013

 

Names of Allottee

No. of Shares

 

Imperial Consultants and Securites Private Limited, India

21460177

Total

21460177

 

 

As on 20.10.2012

 

Equity Share Break up (Percentage of Total Equity)

 

Category

Percentage of Holding

Public financial companies

0.03

Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others

72.97

Bodies corporate

17.13

Other top fifty shareholders

7.49

Others

2.38

Total

100.00

 

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Selling of Steel Products.

 

 

Products :

Item Code No.

Product Description

2601

Iron Ores and Concent Rates, Other than Roasted Iron Pyrites

7203

Ferrous Products Obtained by Direct Reduction of Iron Ore and Other Spongy Ferrous Products in Lumps, Pellets or Similar Forms

7208

Flat Rolled Products of Iron or Non Alloy Steel of a Width of 600 MM or More Hot Rolled, Not Clad, Plated or Coated

7210

Flat Rolled Products of Iron or Non Alloy Steel of a Width of 600 MM Clad Plated or Coated with Zinc

7211

Flat Rolled Products of Iron or Non Alloy Steel of a Width of Less than 600 MM Hot Rolled, Not Clad, Plated or Coated

7304

 

Pipes and Hollow Profile Seamless or Iron or Steel for Used in Oil and Gas Pipeline

 

 

PRODUCTION STATUS (AS ON 31.03.2013)

 

Particulars

Unit

Production

 

Iron Ore Pellet**

MT

5,662,187

Hot Briquette Iron / Direct Reduced Iron

MT

2,333,337

Hot Metal

MT

2,665,264

Hot Rolled Coils/Cold Rolled Coils/Plates

MT

3,693,136

Plates

MT

520,811

Pipes

MT

159,075

 

 

GENERAL INFORMATION

 

No. of Employees :

Not Divulged

 

 

Bankers :

·         Corporation Bank, Industrial Finance Branch,  104 Bharat House, Mumbai Samachar Marg Fort, Mumbai - 400023, Maharashtra, India

·         Allahabad Bank

·         Axis Bank Limited

·         Bank Of Baroda

·         Bank Of India

·         Canara Bank

·         Central Bank Of India

·         Export Import Bank Of India

·         HDFC Bank Limited

·         ICICI Bank Limited

·         IDBI Bank Limited

·         Indian Overseas Bank

·         Punjab National Bank

·         State Bank Of Bikaner And Jaipur

·         State Bank Of Hyderabad

·         State Bank Of India

·         State Bank Of Mysore

·         State Bank Of Patiala

·         Syndicate Bank

·         The Federal Bank Limited

·         The Jammu And Kashmir Bank Limited

·         UCO Bank

·         Union Bank Of India

·         Yes Bank Limited

 

 

Facilities :

SECURED LOANS

 

 31.03.2013

Rs. in Millions

31.03.2012

Rs. in Millions

LONG TERM BORROWINGS

 

 

13.4% Non-Convertible Debentures of Rs.1000000 each

5250.000

10000.000

Term Loans

 

 

--From Banks

199543.100

134379.000

--From Others

13983.900

4572.200

Buyers Credit for Capital Expenditure

6499.200

15338.300

 

 

 

SHORT TERM BORROWINGS

 

 

Short Term Loans

 

 

--From Banks

7000.000

22750.000

--From Others

0.000

10500.000

Working Capital Loans – From Banks

9674.200

12816.800

Buyer’s Credit for Operational Expenditure

14751.300

30433.200

Buyers Credit Capital Expenditure

160.700

114.000

Total

256862.400

240903.500

 

 

 

Banking Relations :

--

 

 

Financial Institution :

SBICAP Trustee Company Limited, Mumbai - 400005, Maharashtra, India

 

 

Auditors :

 

Name :

Deloitte Haskins and Sells,

Chartered Accountants

Address :

12, Dr. Annie Besant Road, Opposite Shiv Sagar Estate, Worli, Mumbai, Maharashtra, India

Income-tax PAN of auditor or auditor's firm :

AABFD7919A

 

 

Holding Companies :

·         Essar Steel Asia Holdings Limited (FKA Essar Resources Mauritius Limited) Immediate Holding Company- (ESAHL) (w.e.f. 29.06.2012)

·         Essar Steel Mauritius Limited - Holding Company of Essar Steel Asia Holdings Limited - (ESML)

·         Essar Steel Limited - Mauritius - Immediate Holding Company (ESTLM) (upto 28.06.2012)

·         Essar Global Fund Limited (FKA Essar Global Limited)

 

 

Subsidiaries :

·         Essar Steel Middle East FZE (ESMEF)

·         Essar Steel Trading FZE (ESTF)

·         Essar Steel Offshore Limited. (ESOSL)

·         Essar Steel Overseas Limited. (ESOL) **

·         Trinity Coal Marketing LLC (EMA) *

·         Essar Minerals Limited (FKA Essar Mining Limited) *

·         Essar Mineral Cooperatief U.A. *

·         Essar Minerals Canada Limited *

·         Essar Minerals INC *

·         Trinity Parent Corporation *

·         Trinity Coal Corporation *

·         Trinity Coal Partners LLC *

·         Bear Fork Resources LLC *

·         Deep Water Resources LLC *

·         Levisa Fork Resources LLC *

·         North Springs Resources LLC *

·         Little Elk Mining Company LLC *

·         Banner Coal Terminal LLC *

·         Hughes Creek terminal LLC *

·         Frasure Creek Mining LLC *

·         Falcon Resources LLC *

·         Prater Branch Resources LLC *

·         Trinity RMG Holding LLC *

·         RMG INC *

 

*These companies are subsidiaries of a wholly owned subsidiary of the Company

** Liquidated w.e.f. 13.09.2012

 

 

Fellow Subsidiaries :

·         Aegis Limited (AEGIS)

·         Essar Power(Jharkhand)Limited (EPJL)

·         Essar Africa Holdings Limited (EAHL)

·         Essar Bulk Terminal Paradeep Limited (EBTPL)

·         Essar Electric Power Development Corporation Limited (EEPDCL)

·         Essar Logistics Limited (ELL)

·         EssarMineral Resources Limited (EMRL)

·         EssarOffshore Subsea Limited (EOSL)

·         Essar Oil Limited (EOL)

·         Essar Port Limited (EPL)

·         EssarSteel Algomalnc.(ESA-INC)

·         Essar Steel Processing and Distribution UK Limited (ESPD UK)

·         PT Essarlndonesia(PTEI)

·         Vadinar Oil Terminals Limited (VOTL)

·         Vadinar Power Company Limited (VPOCL)

·         AgcNetworksLimited (Formally Avaya Global) (AGCNL)

·         Equinox Business Parks Private Limited (EBPPL)

·         Essar Bulk Terminal (Salaya) Limited (EBTSL)

·         Essar Oilfields Services Limited (EOSPL)

·         Essar Power (M P) Limited. (EPMPL)

·         Essar Power Gujarat Limited. (EPGL)

·         Essar Project Management Consultant Limited. (EPMCL)

·         Essar Projects (India) Limited. (EPIL)

·         Essar Shipping Limited (ESL)

·         Essar Paradeep Terminals Limited (EPTL)

·         Navabharat Power Private Limited (NPPL)

·         Peak Trading Overseas Limited (PTOL)

·         Vadinar Ports and Terminals Limited (VPTL)

·         Essar Steel Limited - Mauritius (ESTLM) (w.e.f. 29.06.2012)

 

 

Associates :

·         Bhander Power Limited (BPOL)

·         Essar Bulk Terminal Limited (EBTL)

·         Essar Power (Orissa) Limited (EPOL - Orissa)

·         Essar Power Hazira Limited (EPHL)

·         Essar Power Limited (EPOL)

·         Essar Steel Processing FZCO (ESP-FZCO)

 

 

Companies in which Promoters had significant influence/ Control :

·         Essar Steel Chhattisgarh Limited (ESCL)

·         Essar Steel Jharkhand Limited (ESJL)

·         Essar Teleholding Limited (ETHL)

·         Futura Travels Limited (FTL)

·         Global Supplies (UAE) FZE (GS)

·         Imperial Consultants and Securities Private Limited (ICSL)

·         India Securities Limited (ISL)

·         Kartik Estates Private Limited (KEPL)

·         Kroner Investment Limited (KIL)

·         NewAmbi Trading and Investments Private Limited (NATIPL)

·         Prajesh Investments Private Limited (PIPL)

·         Prajesh Marketing Limited (PML)

·         The Mobilestore Limited (TML)

·         Tirunelveli Wind Farms Limited (TWFL)

·         Essar Procurement Services Limited (EPSL)

·         Essar Properties Limited. (EPRL)

·         Essar Agrotech Limited (EAL)

·         Essar Education Limited (EEL)

·         Clickforsteel Services Limited (CFSL)

·         Downtown Securities Private Limited (DTSPL)

·         Bhargava Estates Private Limited (BEPL)

·         Essar House Limited (EHL)

·         Essar Information Technology Limited (EITL)

·         Essar Infrastructure Services Limited (EISL)

·         Essar Investments Limited. (EIL)

·         Ajitesh Estates Private Limited (AEPL)

·         Arkay Holdings Limited (AHL)

·         Arkay Sea Logistics Limited (ASLL)

·         Essar Services India Limited (ESIL)

·         Essar SEZ Hazira Limited (ESEZHL)

 

# These Companies ceased to be related party w.e.f. 01.04.2012 as the Promoters do not have any significant influence on the Company

 

 

CAPITAL STRUCTURE

 

AS ON 28.09.2013

 

Authorised Capital : Rs.72750.000 Millions

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

7175000000

Equity Shares

Rs.10/- each

Rs. 71750.000 Millions

100000000

10% Cumulative Redeemable Preference Shares

Rs.10/- each

Rs. 1000.000 Millions

 

 

 

 

 

Total

 

Rs. 72750.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

2824951352

Equity Shares

Rs.10/- each

Rs. 28249.514 Millions

43598951

10% Cumulative Redeemable Preference Shares

Rs.10/- each

Rs. 435.989 Millions

 

 

 

 

 

Total

 

Rs. 28685.503 Millions

 

 

AS ON 31.03.2013

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

7175000000

Equity Shares

Rs.10/- each

Rs. 71750.000 Millions

100000000

10% Cumulative Redeemable Preference Shares

Rs.10/- each

Rs. 1000.000 Millions

 

 

 

 

 

Total

 

Rs. 72750.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

2797534656

Equity Shares

Rs.10/- each

Rs. 27975.300 Millions

43598951

10% Cumulative Redeemable Preference Shares

Rs.10/- each

Rs. 436.000 Millions

4520703

Add: Equity Shares Forfeited

 

Rs. 6.700 Millions

 

 

 

 

 

Total

 

Rs. 28418.000 Millions

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2013

31.03.2012

31.03.2011

I.              EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

28418.000

26711.100

25710.000

(b) Reserves & Surplus

42617.100

63823.500

77329.800

(c) Money received against share warrants

0.000

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

0.000

0.000

2482.400

Total Shareholders’ Funds (1) + (2)

71035.100

90534.600

105522.200

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) long-term borrowings

228179.200

166645.400

145865.000

(b) Deferred tax liabilities (Net)

0.000

0.000

0.000

(c) Other long term liabilities

1622.900

1909.900

15806.000

(d) long-term provisions

6559.400

4581.400

1606.500

Total Non-current Liabilities (3)

236361.500

173136.700

163277.500

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

42871.000

76614.000

64158.100

(b) Trade payables

76458.300

43870.500

25564.900

(c) Other current liabilities

50425.000

39178.200

30857.200

(d) Short-term provisions

731.800

4258.700

1353.700

Total Current Liabilities (4)

170486.100

163921.400

121933.900

 

 

 

 

TOTAL

477882.700

427592.700

390733.600

 

 

 

 

II.            ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

287660.800

205879.400

102391.600

(ii) Intangible Assets

190.500

222.100

152.800

(iii) Capital work-in-progress

60047.700

112951.700

164749.300

(iv) Intangible assets under development

0.000

0.000

0.000

(b) Non-current Investments

10333.100

5398.700

3970.200

(c) Deferred tax assets (net)

17526.600

3237.700

638.700

(d) Long-term Loan and Advances

6851.900

8777.200

12476.700

(e) Other Non-current assets

10333.100

9589.700

10247.800

Total Non-Current Assets

392943.700

346056.500

294627.100

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

0.000

0.000

0.000

(b) Inventories

38475.200

40446.400

52225.000

(c) Trade receivables

6812.700

5896.600

5147.600

(d) Cash and cash equivalents

6231.100

6509.600

9029.500

(e) Short-term loans and advances

28409.200

22502.900

26128.300

(f) Other current assets

5010.800

6180.700

3576.100

Total Current Assets

84939.000

81536.200

96106.500

 

 

 

 

TOTAL

477882.700

427592.700

390733.600

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2013

31.03.2012

31.03.2011

 

SALES

 

 

 

 

 

Income

150384.500

162738.700

123015.000

 

 

Other Income

3011.600

5367.900

5659.300

 

 

TOTAL                                     (A)

153396.100

168106.600

128674.300

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Cost of Materials Consumed

89941.100

89340.700

84497.100

 

 

Purchases of Stock-in-Trade

2055.900

1670.300

1752.800

 

 

Changes in inventories of finished goods, work-in-progress and Stock-in-Trade

(270.700)

9692.700

(14955.000)

 

 

Employees benefits expense

3117.400

3899.800

3012.000

 

 

Other expenses

46918.300

47851.300

37218.700

 

 

Exceptional Items

13465.500

0.000

0.000

 

 

TOTAL                                     (B)

155227.500

152454.800

111525.600

 

 

 

 

 

 

PROFIT/ (LOSS)  BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)     (C)

(1831.400)

15651.800

17148.700

 

 

 

 

 

Less

FINANCIAL EXPENSES                                    (D)

24809.800

18629.900

12009.100

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                               (E)

(26641.200)

(2978.100)

5139.600

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

15622.100

9863.700

8914.600

 

 

 

 

 

 

PROFIT/ (LOSS)  BEFORE TAX (E-F)                (G)           

(42263.300)

(12841.800)

(3775.000)

 

 

 

 

 

Less

TAX                                                                  (H)

(14413.900)

(326.200)

(2112.300)

 

 

 

 

 

 

PROFIT/ (LOSS)  AFTER TAX (G-H)                  (I)

(27849.400)

(12515.600)

(1662.700)

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

FOB Value of Exports

36927.900

41557.500

20227.600

 

 

Others

2472.900

1872.600

1622.200

 

TOTAL EARNINGS

39400.800

43430.100

21849.800

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

33809.200

32993.200

8835.600

 

 

Production Consumables, Stores and Spares and Fuel

6540.200

9387.800

28469.100

 

 

Capital Goods

3315.500

3762.700

11199.600

 

 

Traded Goods

0.000

17.300

358.300

 

TOTAL IMPORTS

43664.900

46161.100

48862.600

 

 

 

 

 

 

Earnings Per Share (Rs.)

(10.59)

(4.84)

(0.72)

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2013

31.03.2012

31.03.2011

PAT / Total Income

(%)

(18.16)

(7.45)

(1.29)

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

(28.10)

(7.89)

(3.07)

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

(10.84)

(4.20)

(1.71)

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

(0.59)

(0.14)

(0.04)

 

 

 

 

 

Debt Equity Ratio

(Total Debt /Networth)

 

3.82

2.69

1.99

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

0.50

0.50

0.79

 

 

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

 

DEBT EQUITY RATIO

 

Particular

31.03.2011

31.03.2012

31.03.2013

 

(Rs. In Millions)

(Rs. In Millions)

(Rs. In Millions)

Share Capital

25710.000

26711.100

28418.000

Reserves & Surplus

77329.800

63823.500

42617.100

Share Application money pending allotment

2482.400

0.000

0.000

Net worth

105522.200

90534.600

71035.100

 

 

 

 

long-term borrowings

145865.000

166645.400

228179.200

Short term borrowings

64158.100

76614.000

42871.000

Total borrowings

210023.100

243259.400

271050.200

Debt/Equity ratio

1.990

2.687

3.816

 

 

 

YEAR-ON-YEAR GROWTH

 

Year on Year Growth

31.03.2011

31.03.2012

31.03.2013

 

(Rs. In Millions)

(Rs. In Millions)

(Rs. In Millions)

Profit

123015.000

162738.700

150384.500

 

 

32.292

(7.591)

 

 

 

NET PROFIT MARGIN

 

Net Profit Margin

31.03.2011

31.03.2012

31.03.2013

 

(Rs. In Millions)

(Rs. In Millions)

(Rs. In Millions)

Sales

123015.000

162738.700

150384.500

Profit/ (Loss)

(1662.700)

(12515.600)

(27849.4000

 

(1.35%)

(7.69%)

(18.52%)

 

 

 

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

No

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

Yes

23]

Banking Details

Yes

24]

Banking facility details

Yes

25]

Conduct of the banking account

--

26]

Buyer visit details

--

27]

Financials, if provided

Yes

28]

Incorporation details, if applicable

Yes

29]

Last accounts filed at ROC

Yes

30]

Major Shareholders, if available

No

31]

Date of Birth of Proprietor/Partner/Director, if available

No

32]

PAN of Proprietor/Partner/Director, if available

No

33]

Voter ID No of Proprietor/Partner/Director, if available

No

34]

External Agency Rating, if available

Yes

 

 

LITIGATION DETAILS

 

HIGH COURT OF GUJARAT

SPECIAL CIVIL APPLICATION No. 2859 of 2014

 

Status: PENDING                     (Converted from : C/ST/2708/2014)            CCIN No : 001021201402859

 

Last Listing Date: 14/11/2014

 

Coram: HONOURABLE MR.JUSTICE A.J.DESAI

 

S.NO.

Name of the Petitioner

Advocate On Record

 

1

DAKSHIN GUJARAT VIJ COMPANY LIMITED

MS LILU K BHAYA for: Petitioner(s) http://gujarathc-casestatus.nic.in/gujarathc/images/arrow1.png1

 

S.NO.

Name of the Respondant

Advocate On Record

 

1
2

ESSAR STEEL INDIA LIMITED
APPELLATE AUTHORITY

NANAVATI ASSOCIATES for :Respondent(s) http://gujarathc-casestatus.nic.in/gujarathc/images/arrow1.png1

 

Presented On

: 19/02/2014

Registered On

: 19/02/2014

Bench Category

: -

District

: SURAT

Case Originated From

: THROUGH ADVOCATE

Listed

: 13 times

StageName

: FOR FURTHER HEARING

Other Forums

 

S.No.

CASEDETAILS

TRIBUNAL REFERRENCE

ORDER PASSED BY

JUDGEMENT DATE

PLACE

1

CEI/INS/APPL/ESIL/11380/2013

OFFICE OF CHIEF ELECTRICAL INSPECTOR, GANDHINAGAR

APPELLATE AUTHORITY

01/11/2013

SURAT

 

Office Details

S. No.

Filing Date

Document Name

Advocate Name

Court Fee on Document

Document Details

1

19/02/2014

VAKALATNAMA

MS LILU K BHAYA ADVOCATE
for PETITIONER(s) http://gujarathc-casestatus.nic.in/gujarathc/images/arrow1.png1

5

MS LILU K BHAYA(1705) for P:1

2

19/02/2014

MEMO OF APPEAL/PETITION/SUIT

MS LILU K BHAYA ADVOCATE
for PETITIONER(s) http://gujarathc-casestatus.nic.in/gujarathc/images/arrow1.png1

100

MS LILU K BHAYA(1705), for P:1

3

20/03/2014

AFFIDAVIT IN REPLY

NANAVATI ASSOCIATES ADVOCATE
for RESPONDENT(s) http://gujarathc-casestatus.nic.in/gujarathc/images/arrow1.png1

0

NANAVATI ASSOCIATES(1375) for R:1

Court Proceedings

 

S. No.

Notified Date

CourtCode

Board Sr. No.

Stage

Action

Coram

1

20/02/2014

18

3

ADMISSION (FRESH MATTERS)

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

2

11/03/2014

18

33

ADMISSION (ADJOUNRED MATTERS)

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

3

25/03/2014

18

30

URGENT ADMISSION (ADJOUNRED MATTERS)

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

4

31/03/2014

18

21

URGENT ADMISSION (ADJOUNRED MATTERS)

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

5

01/04/2014

18

64

NOTICE & ADJOURNED MATTERS

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

6

16/04/2014

18

19

URGENT ADMISSION (ADJOUNRED MATTERS)

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

7

21/04/2014

18

42

URGENT ADMISSION (ADJOUNRED MATTERS)

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

8

28/04/2014

17

31

URGENT ADMISSION (ADJOUNRED MATTERS)

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

9

25/07/2014

17

108

FOR FURTHER HEARING

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

10

11/08/2014

17

104

FOR FURTHER HEARING

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

11

09/09/2014

16

183

FOR FURTHER HEARING

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

12

22/09/2014

16

138

FOR FURTHER HEARING

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

13

07/10/2014

16

175

FOR FURTHER HEARING

NEXT DATE

·         HONOURABLE MR.JUSTICE A.J.DESAI

14

14/11/2014

17

-

FOR FURTHER HEARING

 

·         HONOURABLE MR.JUSTICE A.J.DESAI

 

 

UNSECURED LOAN:

 

Particulars

 

31.03.2013

Rs. in Millions

31.03.2012

Rs. in Millions

LONG TERM BORROWINGS

 

 

Dollar / Rupee Notes

 

 

--From Banks

1974.500

1942.700

--From others

29.700

37.900

Buyers Credit for Capital Expenditure

0.000

6.900

Sales Tax Deferral Loan

338.800

338.800

Long Term maturities of Finance Lease obligations

18.300

29.600

Inter Corporate Deposits

 

 

--From Others

541.700

0.000

 

 

 

SHORT TERM BORROWINGS

 

 

Inter corporate Deposits from related parties

11284.800

0.000

 

 

 

Total

14187.800

2355.900

 

 

GENERAL INFORMATION ABOUT COMPANY:

 

Subject owns and operates an integrated steel manufacturing unit for manufacturing of fiat rolled products at Hazira - District Surat, a Precoated facility at Pune, a Beneficiation Plant at Kirandul, Slurry Pipeline, Peptization Plant at Vizag and at Paradeep. The Company is also in the process of setting up a Beneficiation Plant at Dabuna (Odisha) and another Peptization Plant at Paradeep. The Company also operates Processing and Distribution centres, Hypermarts and Express Marts at various locations across India.

 

 

OPERATIONS:

 

Year 2012 was a gloomy year for world economy as the recessionary trends continued globally. With Eurozone crisis and China slowdown, industries observed much weaker growth. Indian steel industry took a major hit due to a slower global and ban on iron ore mining in Karnataka as well as Coal scam issues.

 

Post expansion to 10 MTPA Steel Complex, the Company become the largest single location fiat steel producer in the country and the fourth largest such producer globally. With Blast Furnace and Corex joining the previous DRI (Direct Reduced Iron) technology, the company has now greater flexibility in usage of raw materials. Additionally, the by-product gases generated by these two new units can suitably replace natural gas at several places in the integrated steel complex, thereby reducing dependence on expensive natural gas sources from external providers. The Company is now able to offer the entire range of fiat products - from thin strips to pipes as well as cold rolled and coated products.

 

This year the Company achieved highest annual flat production.

 

During the year, the Company produced 4.21 million tons of flat products and achieved sales of 4.12 million tons. Production at HBI units suffered as natural gas supply from Reliance Industries Limited (RIL) was stopped to integrated steel plants in May ?11 following orders from the central government as a decrease in output at Reliance Industries Limited?s KG ? D6 basin was observed. Purchase of gas from the spot market in large quantities was unviable as the prices of NG spiraled through the course of the year. However, the effect of this action was mitigated to an extent by ramping up production in other iron making units such as Blast Furnace and Corex. Furthermore, Corex gas, a high calorific value gas generated as a by-product of the Corex process, was used to replace part of the NG required CSP, Plate Mill, Lime Kilns and Conarc furnaces, thus bringing down the external NG consumption.

 

The transportation of slurry through the 267 Km slurry pipeline from the beneficiation plant at Kirandul to the pellet plant at Vizag is suspended since Oct?11 due to damage to the pipeline caused by miscreants. This had an adverse effect on the availability of pellets coming from Vizag. Pellet plant (Unit 1) commissioned at Paradip was under stabilization due to which production targets of pellets was not up to the norms. To mitigate this adverse impact, the Company took various measures such as making alternate arrangements of movement of Iron ore through rakes, and purchase of iron ore fines, pellets as well as lump ore from other source

 

Key highlights of the year were

 

1. Record ramp up production in all newly commissioned units like Blast Furnace, Corex, Conarc, Compact Strip Production (CSP) Caster and  CSP Mill.

 

2. Production from downstream/value added facilities like Pickling lines, BAF, Galvanizing lines, etc. also made significant records.

 

3. Commissioned 19MW Waste heat recovery power plant. This has increased the utilization of BF gas in addition with power generation.

 

4. Lime Plant Kiln#7 was commissioned and successfully connected to Corex Gas network. Gas requirement was met through 100% Corex gas. With this one more consumer was added for usage of COREX gas.

 

5. RH Top Oxygen Blowing (RHTOB) in Steel Melting Plant (SMP) 2 was commissioned successfully with in-house teams. With this SMP2/CSP route was maximized.

 

6. Strengthening of KAWAS ICCHAPORE Line was completed.

 

7. Since commissioning, HBI plant surpassed long cherished production milestone of 50 million in the month of Jul 12.

 

8. In view of pellet shortage, Iron making units ramped up consumption of lump ore in a very short learning period.

 

9. Both the gas holders (Blast furnace and Corex) were commissioned successfully in this year. This ensured hassle free consumption of BF and Corex gas to all users by minimizing pressure fluctuations.

 

Various cost reduction measures like Maximization of Pulverized coal injection (PCI), Usage of cheap South African coal, Hot metal maximization in SMP1, Improvement of Conarc Yield and Power, Improvement of Electric Arc Furnace (EAF) Yield and Power etc. were successfully implemented in operations area.

 

 

GLOBAL SCENARIO

 

FY 2012-13 remained a turbulent year for the Global Economy. Based on World Economic Outlook published by the International Monetary Fund, economic growth collapsed during the first quarter of the fiscal year amidst growing uncertainty linked to high government debt in the US and the European Union, precipitated by the crisis emerging from Spain. Policy tightening due to capacity constraints, concerns linked to deteriorating credit portfolios, weaker demand from Advanced Economies and country-specific factors slowed Gross Domestic Product (GDP) growth in Emerging Markets.

 

Economic conditions improved modestly during the second quarter with global growth increasing to about 3% - largely based on acceleration in Emerging Markets, and the US. While global financial conditions improved further during the 3rd quarter, macro-indicators (industrial production and trade) suggested only a temporary revival linked to inventory accumulation. In fact, weakness from the Euro zone spilled into its periphery; Japan contracted.

 

During the 4th quarter of the fiscal year, global economic activity stabilized in Advanced Economies and picked up in Emerging Markets supported by policies and renewed confidence.

 

 

INDIAN SCENARIO

 

Sustained clamp-down on inflation remained the central theme of domestic macro-economic decisions during FY 2012-13. High interest rates andother policy restrictions created a liquidity crunch. This impacted new project investments and restricted domestic consumption. Prevailingeconomic uncertainties in international markets offered limited refuge. The outcome is evident in the quarter-on-quarter dilution in India’s GDPgrowth rate.

 

Domestic demand remained sluggish across the spectrum of economic sectors in India.

 

- Industry (comprising the mining and quarrying, manufacturing, electricity, gas, water-supply, and construction) performance declined to 3.1% in FY 2013 over 3.5% in FY 2012.

 

- Manufacturing sector declined to 1.9% during FY 2013 as against 2.7% in FY 2012

 

- Agriculture declined from 3.6% in FY 2012 to 1.8% in FY 2013 due to lower-than-normal monsoons

 

- Consequently, Services sector being forms of derived demand declined from 8.2% in FY 2012 to 6.6% in FY 2013

 

 

STEEL INDUSTRY

 

GLOBAL OVERVIEW:

 

FY 2013 remained a sluggish year for the global steel industry. Overall, it grew by a mere 0.72% during 2012 as per the latest World Steel Association estimates -total crude steel production in 2012 was 1,547 million MT vis-a-vis 1,536 million MT in 2011.

 

Country-wise performance largely reflected disparities linked to macro-economic environment and operating dynamics in respective economies. China continued to maintain its dominance with a 46.3% share in total crude steel production exhibiting a 2.1% growth over 2011 – linked mainly to domestic demand. Japanese (2nd largest producer) steel output contracted by 0.4% despite heavy support for exports from a devalued currency. United States, India and Russia - the other top producers - grew by 2.7%, 5.6% and 2.2% respectively in terms of crude steel production. Economic recession in Europe implied contraction in local steel demand. There were scattered opportunities in other geographies.

 

Capacity utilization rates remained below 80% -exhibiting a serious challenge facing the industry. Correction in prices of primary raw materials - i.e., Iron Ore and Coking Coal - lagged the ability of the industry to sustain revenue realization. This created margin pressure and compounded financial problems for the steel industry. Consequently, capacity outages, particularly in Europe, became inevitable due to prevailing lackluster demand and high operating cost. Overall, industry performance hinged upon the ability of producers to extend competitive prices to customers often sub-optimal to operating cost.

 

The outlook for FY 2014 is even more difficult than FY2013. Global steel production is expected to remain fiat to moderate growth. China is expected to maintain its momentum in steel production - a core sector offering large-scale employment. All other regions of the world are expected to be saddled with over-capacity and are expected to curtail production in order to remain market-relevant. Global steel consumption is likely to remain fiat to decline as Fixed Asset Investment and steel intensity decline during the FY 2014.

 

 

DOMESTIC OVERVIEW:

 

India's overall steel consumption grew by only 3.2% in 2012 to around 72 million MT due to subdued demand from across consuming sectors like infrastructure and construction. The domestic crude steel production grew by 5.6% in 2012 to 78 million MT.

 

Many producers in India commissioned additional capacity during the year. Further capacity addition, in both public as well as private sector, is planned during FY2014 due to anticipated future demand, particularly considering that India's per capita consumption low. India's per capita steel consumption is still too low (59 kg compared to 1157 kg in South Korea, 507 kg in Japan, 460 kg in China and 235 kg in the North America).

 

However, in the short to medium term, this will lead to excess domestic capacity and is likely to create additional margin pressure for the Indian steel industry already saddled with high costs and cheap imports especially from Japan and South Korea, which enjoy a preferential import duty.

 

 

AWARDS AND ACCOLADES:

 

·         National Safety Award from JCSSI "ISPAT SURAKSHA PURASKAR 2013" for the year 2011 and 2012 from Joint Committee on Safety, Health and Environment (JCSSI) under various categories for Outstanding Performance in the field of HSE.

 

·         HSE topped at India Manufacturing Excellence Award (IMEA) assessment audit with a score of 77.7 and has set a benchmark among all Industries and Topped Metal Sectors across India in a survey conducted by The Economic Times - India Manufacturing Excellence Awards in Partnership with Frost and Sullivan.

 

·         Gujarat Safety Council in association with Directorate of Industrial Safety and Health Awarded Dr. Anil Jain, "Safety Man of the Year 2012". The Award was presented by Shri. Saurabh Patel, Hon'ble Minister, Gujarat State Govt. at 34th Annual Safety Conference organized at Ahmedabad.

 

·         "Safety Innovation Award-2012" from the Institution of Engineers (India). Award presented by Dr. Narendra Jadhav - Member Planning Commission at inaugural function of "Safety Convention 2012: Safety in Sustainable Development".

 

·         Runners up for "Excellence in Safety - Large Enterprises" Manufacturing Today Awards 2012.

 

·         Green Rating Project, Three Leaves Award, the Highest among Indian Steel Plants Awarded by Center for Science and Environment (CSE). This is a very prestigious award and the Company is rated 2nd amongst 22 steel plants were evaluated. The award was presented by Shri. Montek Singh Ahluwalia, Dy. Chairperson, Planning Commission and Smt. Jayanthi Natarajan, Union Minister of State for Environment and Forests in 4th June 2012.

 

·         Green Environmental Contest awarded by Baroda Productive Council for the year 2011­12 and Essar Steel stood first amongst all the industries of Gujarat.

 

·         Gold Safety Award 2012 for excellent achievements in Safety management system from Greentech Foundation, New Delhi.

 

·         Silver Environment Award 2012 for excellent achievements in Environment Management system from Greentech Foundation, New Delhi

 

·         Best Safety Practices Award 2012 from Deccan Chamber of Commerce, Industries and Agriculture , Pune.

 

·         "Gold Award - Metals Sector, Mega Large Business" by Indian Manufacturing Excellence Awards-2012 sponsored by The Economic Times.

 

·         Quality Circle Forum Of India (QCFI) - Baroda (Gold Award and Sarvashetha Puraskar Award).

 

·         Gold Award in State Level 5'S' competition organized by QCFI Baroda.

 

·         Diamond Award in Lean Six Sigma Presentation organized by Concept Business Excellence.

 

·         Commendation award in QCI-DL Shah National Award for Quality.

 

·        Steel Hazira bagged FICCI Water Efficiency Award at the Water Awards 2012 presented by FICCI (Federation of Indian Chambers of Commerce and Industry), in association with HSBC.

 

·         The Company has been certified with a PLATINUM AWARD second time in a row by Caterpillar worldwide. Last year we had got the Platinum Award and it was a quite a challenge to retain the Platinum Award this time.

 

·         SAP Awards for Customer Excellence (ACE) 2012 recognized the Company for being the "Best Run Manufacturing Organization" at a ceremony in Mumbai on 19th October, 2012.

 

 

CERTIFICATE AND RECOGNITION:

 

·         Gujarat Safety Council in association with Directorate of Industrial Safety and Health Govt. of Gujarat awarded Essar Steel India Ltd., Safety Honour and Merit Certificates for the year 2011:

 

Ø  HRC Division: Certificate of Honour - for achieving more than 3 Million Accident Free Man Hours.

Ø  HBI Division: Certificate of Merit - for achieving more than 2 Million Accident Free Man Hours.

Ø  Pipe Division: Certificate of Merit - for achieving more than 2 Million Accident Free Man Hours.

 

·         National Safety Council of India recognized Essar Steel India Ltd., Hazira for Landmark Safety Achievement of 35.55 Million LTI Free Man hours.

 

·         41st National Safety Day Celebrations of Essar Steel India Ltd. recognized by National Safety Council of India by publishing clips in Front Cover Page of Industrial Safety Chronicle (Vol. No. XLIII April-June 2012).

 

·         Essar Steel India Limited Hazira received recognition from WSA regarding participation in their CO2 data collection program.

 

·         Certificate of Appreciation for Commendable Fire Fighting Operation at IOCL Terminal, Hazira, from Shri. D. C. Chaudhari, Director-Directorate of Industrial Safety and Health Gujarat on the occasion of Shram Awards, State Level Prize Distribution Ceremony held at Surat, Gujarat. For Commendable Fire Fighting Operation by Essar Steel Team at IOCL Terminal Fire, Hazira, Mr. Rakesh Chaturvedi (Sr. Manager-Fire Services EStIL) and Mr. Narendra Doot (Asst. Manager-Fire Services, EStIL) received Certificates for their valiant Heroism from Shri. Ganpat Vasava, Hon'ble Cabinet Minister, Govt. of Gujarat on the eve of National Republic Day at Surat.

 

·         The Company presented 3 Projects on Environment Improvement at Vibrant Gujarat Summit held at Gandhinagar by Govt. of Gujarat. The initiatives were well appreciated by Gujarat State Environment Minister, Gujarat Pollution Control Board (GPCB) Chairman and Member Secretary.

 

·         Company's Carbon Management Practices were lauded at the International Carbon Disclosure Project (CDP), a recent event held at the Bombay Stock Exchange (BSE) at Mumbai. Under Carbon Disclosure Leadership Index (CDLI) Essar Steel scored 80 out of 100.

 

·         Recognition of three Essar Steel Employees under various categories in Safety Competition organized by Gujarat Safety Council. The Awards were presented to them in 34th Annual Safety Conference organized by Gujarat Safety council in association with Directorate of Industrial Safety and Health at Ahmedabad.

 

·         Recognition of two Essar Steel Employees' Poster, in Annual JCSSI Calendar Competition 2013. These posters were published in the Annual JCSSI Calendar for the year 2013.

 

·         The Company participated in Workshop "Strategic Development towards Best Safety Practices and Human Interface" Organized by Essar Power Vadinar in Coordination with Directorate of Industrial Safety and Health, Govt. of Gujarat.

 

·         The Company participated in Conference organized on "Safety for Sustainable Manufacturing Growth" by Federation of Indian Chambers of Commerce and Industry (FICCI) inaugurated by Shri. Mallikarjun Kharge, Union Minister for Labour and Employment.

 

·         Tata Steel Executives visited their Hazira Complex to witness their Benchmark HSE Practices and Initiatives. Quote, "We are thankful to you for providing them the opportunity of getting exposed to the best of safety practices embedded in Essar Culture", Unquote.

 

·         As part of Confederation of Indian Industry (CII) Mission on Best Practices in Safety, Health and Environment (SHE) to Hazira, Essar Steel promoted Best HSE Practices across the State of Gujarat.

 

 

FIXED ASSETS:

           

Tangible Assets

·         Freehold Land

·         Leasehold Land

·         Buildings

·         Leasehold Building

·         Plant and Machinery

·         Leasehold Plant and Machinery

·         Furniture and Fixtures

·         Office Equipment

·         Computers

·         Vehicles

·         Ships and Vessels

·         Railway Sidings and Wagons

·         Leasehold Railway Sidings and Wagons

·         Aircraft

 

Intangible Assets

·         Software’s

 

 

PRESS RELEASES

 

ESSAR STEEL BAGS AN ORDER TO SUPPLY 1.2 LAKH TONNES OF STEEL PIPES TO GUJARAT GOVERNMENT'S SAUNI PROJECT

 

 

June 16, 2014

 

Essar Steel today announced that it has bagged an order for the supply of pipes for one of the most prestigious projects of the Gujarat government, for water management of the Saurashtra Narmada Avtaran Irrigation (SAUNI) Yojana. Under this programme, the water of Narmada river will be distributed to 115 reservoirs across seven districts of Saurashtra through four linked pipelines benefitting 10,22,589 acres. This project is estimated to cost Rs10,800 crore.

 

Of the 5.86 lakh tonnes of pipes required for the project, Essar Steel will supply 1.2 lakh tonnes of HSAW (Helical Submerged Arc Welding) pipes, which are 12 metres long and 120 inches in diameter. The order will be executed over a period of one year. Essar Steel has an annual production capacity of 2.75 lakh tonnes of HSAW pipes.

 

Commenting on the recent order, Mr Harjit S Bedi, CEO, Essar Pipe Mill said, “We are very happy to be associated with the SAUNI project of the Gujarat Government. It is clearly a reflection of Essar Steel’s integrated capability to produce world-class pipes in India. We have an excellent track record in supplying water pipes to many projects in India.”

 

Essar Steel’s pipe mill has an annual production capacity of 0.6 million tonnes of which 3.25 lakh tonnes is LSAW pipes and 2.75 lakh tonnes is HSAW pipes. The plant is backed by a steel plant ensuring quality steel for making pipes.

 

About Essar Steel


Subject is one of India’s leading integrated steel producers with an annual production capacity of 10 million tonnes. The state-of-the-art facilities comprise iron ore beneficiation, pellet making, iron making, steel making, and downstream facilities, including a cold rolling mill, a galvanising and pre-coated facility, a steel-processing facility, an extra-wide plate mill and a pipe mill.

 

Essar Steel uses information technology extensively for its operations to ensure consistent quality of its products. It produces over 300 grades of steel conforming to quality standards of international certification agencies like API, ABS, NACE, Lloyd’s Register to name a few. The products cater to the requirements of a wide cross section of industries, many of which are import substitute products.

 

Essar Hypermart, a pioneering initiative of Essar Steel, caters to the requirements of the SME segment, which normally does not have access to mill material directly. 

 

Sustainability has been given due importance and the company is on course to becoming a zero-waste company.

 

 

ESSAR STEEL MINNESOTA DENIES REPORTS THAT IT WILL BE SOLD

 

June 02, 2014

 

Hibbing, MN - 2nd June 2014:  Essar Steel Minnesota LLC (“ESML”) categorically denies that Essar Global Fund Limited (“EGFL”), ESML’s ultimate shareholder, is considering selling the business, contrary to recent media reports.

 

ESML’s President and CEO, Madhu Vuppuluri, commented:

 

“We are very pleased to have closed $450 million of bond financing for ESML in the last few weeks. At this significant milestone we look forward to completing ESML’s world class 7 million tonnes per annum fully-integrated pellet production facility and to an exciting future for ESML.

 

“ESML is a world class asset that we believe will be one of the lowest cash cost producers of iron ore pellets in North America. ESML will add 7 million tonnes per annumof pellet producing capacity to EGFL’s existing 20 million tonnes per annum of pellet producing capacity operating and under development in India. Accordingly, it is a core investment in the EGFL portfolio.”

 

 

ESSAR STEEL AIMS TO TURN PROFITABLE BY YEAR-END

 

Monday, 28 April 2014 

 

Debt-laden Essar Steel is looking to turn profitable at net level in the current fiscal by doubling capacity utilisation of its 10 million tonne Hazira plant, reducing interest costs and focusing on higher margin sale of value-added products and commissioning of its slurry pipeline.

 

"We are targeting to double production as compared with the last fiscal. Added to it two vital things are in place -- one is the slurry pipeline in Odisha coming onstream next month and Vizag slurry pipeline, which is already in operation. That is a big booster. We are looking to get profitable at net level," Dilip Oommen, CEO and MD of Essar Steel, told dna. The 255-km long slurry pipeline, which will connect the company's beneficiation plant at Dabuna to the pellet plant at Paradip, Odisha, has been delayed by almost two years. "Apart from reducing freight cost, the slurry pipeline will also improve the availability of material for pelletisation, which in turn helps the downstream. We expect to have more than enough of pellets at a very competitive price. If there is an excess availability of pellets it will be sold in the market as well," Oomen said.

 

The company's operational cost is likely to come down with the commencement of slurry pipeline. Apart from this, it now has access to coal-based power and national grid, which will also bring down its power cost. And last, fall in interest cost on dollarisation of debt; all these three factors would help the company to turn profitable this fiscal, he said. Last two fiscals have been extremely tough for the Ruias-owned company as its debt ballooned to more than Rs 310000.000 Millions in last fiscal. The company has been since then trying to turn around operations through various measures, including dollarisation of debt.

 

Mahadev Iyer, director-finance and chief financial officer of Essar Steel, said the company at present has a total debt of Rs 350000.000 Millions, which includes Rs 290000.000 Millions long-term borrowings and Rs 60000.000 Millions working capital. The company has so far dollarised (which essentially means conversion of rupee debt into dollar debt) $1 billion worth of loans, while it plans to complete the process by dollarising the remaining $2 billion by June. In fiscal 2013, the company's interest cost had swelled to Rs 29550.000 Millions.

 

Through dollarisation, Essar Steel has been able to save Rs 4000.000 Millions of interest in fiscal 2014, and it expects to save Rs 8000.000 Millions in fiscal 2015, Iyer said. During 2012-13, Essar Steel posted earnings before interest, tax, depreciation and amortisation of Rs 18220.000 Millions, according to its annual report. But it incurred a net loss of Rs 27850.000 Millions on a total income of Rs 191900.000 Millions. The unlisted company is yet to report earnings for the last fiscal.

 

The Hazira steel plant, which mainly produces flat products, has been operating at an average 40% capacity in fiscal 2014 following cash crunch, short supply of raw material and overall slump in steel demand within the country. The company, however, hopes to double capacity utilisation in current fiscal and produce around 7 mt of steel.  India's steel consumption grew by just 0.6% in 2013-14 fiscal, its lowest in four years, to 73.93 mt. Oommen expects some revival in steel demand post elections.

 

"We have a wide range of products and our quality is very much appreciated and commands premium today, so pushing products into the market is not a problem. Our base quality (basic steel like hot-rolled coil) is very good but we are trying to maximise our niche or specialised steel production so that our base grades in the market are minimised." "We have primarily three avenues; OEMs, retail and exports, so it is not one market where we push all the quantity. We are port based, so exports to many countries work out cheaper than domestic freight also," he said.

 

 

ESSAR STEEL BAGS AN ORDER TO SUPPLY 1.2 LAKH TONNES OF STEEL PIPES TO GUJARAT GOVERNMENT'S SAUNI PROJECT

 

June 16, 2014

 

Essar Steel today announced that it has bagged an order for the supply of pipes for one of the most prestigious projects of the Gujarat government, for water management of the Saurashtra Narmada Avtaran Irrigation (SAUNI) Yojana. Under this programme, the water of Narmada river will be distributed to 115 reservoirs across seven districts of Saurashtra through four linked pipelines benefitting 10,22,589 acres. This project is estimated to cost Rs108000.000 Millions.

 

Of the 5.86 lakh tonnes of pipes required for the project, Essar Steel will supply 1.2 lakh tonnes of HSAW (Helical Submerged Arc Welding) pipes, which are 12 metres long and 120 inches in diameter. The order will be executed over a period of one year. Essar Steel has an annual production capacity of 2.75 lakh tonnes of HSAW pipes.

 

Commenting on the recent order, Mr Harjit S Bedi, CEO, Essar Pipe Mill said, “We are very happy to be associated with the SAUNI project of the Gujarat Government. It is clearly a reflection of Essar Steel’s integrated capability to produce world-class pipes in India. We have an excellent track record in supplying water pipes to many projects in India.”

 

Essar Steel’s pipe mill has an annual production capacity of 0.6 million tonnes of which 3.25 lakh tonnes is LSAW pipes and 2.75 lakh tonnes is HSAW pipes. The plant is backed by a steel plant ensuring quality steel for making pipes.

 

 

ESSAR STEEL AIMS TO TURN PROFITABLE BY YEAR-END

 

Debt-laden Essar Steel is looking to turn profitable at net level in the current fiscal by doubling capacity utilisation of its 10 million tonne Hazira plant, reducing interest costs and focusing on higher margin sale of value-added products and commissioning of its slurry pipeline.

"We are targeting to double production as compared with the last fiscal. Added to it two vital things are in place -- one is the slurry pipeline in Odisha coming onstream next month and Vizag slurry pipeline, which is already in operation. That is a big booster. We are looking to get profitable at net level," Dilip Oommen, CEO and MD of Essar Steel, told dna. The 255-km long slurry pipeline, which will connect the company's beneficiation plant at Dabuna to the pellet plant at Paradip, Odisha, has been delayed by almost two years. "Apart from reducing freight cost, the slurry pipeline will also improve the availability of material for pelletisation, which in turn helps the downstream. We expect to have more than enough of pellets at a very competitive price. If there is an excess availability of pellets it will be sold in the market as well," Oomen said.

The company's operational cost is likely to come down with the commencement of slurry pipeline. Apart from this, it now has access to coal-based power and national grid, which will also bring down its power cost. And last, fall in interest cost on dollarisation of debt; all these three factors would help the company to turn profitable this fiscal, he said. Last two fiscals have been extremely tough for the Ruias-owned company as its debt ballooned to more than Rs 31,000 crore in last fiscal. The company has been since then trying to turn around operations through various measures, including dollarisation of debt.

Mahadev Iyer, director-finance and chief financial officer of Essar Steel, said the company at present has a total debt of Rs 35,000 crore, which includes Rs 29,000 crore long-term borrowings and Rs 6,000 crore working capital. The company has so far dollarised (which essentially means conversion of rupee debt into dollar debt) $1 billion worth of loans, while it plans to complete the process by dollarising the remaining $2 billion by June. In fiscal 2013, the company's interest cost had swelled to Rs 2,955 crore.

Through dollarisation, Essar Steel has been able to save Rs 400 crore of interest in fiscal 2014, and it expects to save Rs 800 crore in fiscal 2015, Iyer said. During 2012-13, Essar Steel posted earnings before interest, tax, depreciation and amortisation of Rs 1,822 crore, according to its annual report. But it incurred a net loss of Rs 2,785 crore on a total income of Rs 19,190 crore. The unlisted company is yet to report earnings for the last fiscal.

The Hazira steel plant, which mainly produces flat products, has been operating at an average 40% capacity in fiscal 2014 following cash crunch, short supply of raw material and overall slump in steel demand within the country. The company, however, hopes to double capacity utilisation in current fiscal and produce around 7 mt of steel. India's steel consumption grew by just 0.6% in 2013-14 fiscal, its lowest in four years, to 73.93 mt. Oommen expects some revival in steel demand post elections.

"We have a wide range of products and our quality is very much appreciated and commands premium today, so pushing products into the market is not a problem. Our base quality (basic steel like hot-rolled coil) is very good but we are trying to maximise our niche or specialised steel production so that our base grades in the market are minimised." "We have primarily three avenues; OEMs, retail and exports, so it is not one market where we push all the quantity. We are port based, so exports to many countries work out cheaper than domestic freight also," he said.

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                                       None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                        None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                        None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.48

UK Pound

1

Rs.98.24

Euro

1

Rs.78.66

 

 

INFORMATION DETAILS

 

Information Gathered by :

PRT

 

 

Analysis Done by :

SUB

 

 

Report Prepared by :

MRI

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

4

PAID-UP CAPITAL

1~10

4

OPERATING SCALE

1~10

3

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

3

--PROFITABILIRY

1~10

3

--LIQUIDITY

1~10

3

--LEVERAGE

1~10

3

--RESERVES

1~10

3

--CREDIT LINES

1~10

3

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

YES

--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

NO

--OTHER MERIT FACTORS

YES/NO

YES

DEFAULTER

 

 

--RBI

YES/NO

NO

--EPF

YES/NO

NO

TOTAL

 

29

 

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

 

 

 

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.