(richardson & cruddas)_print (1)
TRANSCRIPT
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RICHARDSON AND CRUDDAS (1972) LIMITED
Abstract
The government-owned corporations are termed as Public Sector Undertakings (PSUs) in
India. In a PSU majority (51% or more) of the paid up share capital is held by central
government or by any state government or partly by the central governments and partly by
one or more state governments.
The Comptroller and Auditor General of India (CAG) audits government companies. In
respect of government companies, CAG has the power to appoint the Auditor and to direct
the manner in which the Auditor shall audit the company's accounts.
Post-Independence, India was grappling with grave socio-economic problems, such as
inequalities in income and low levels of employment, regional imbalances in economic
development and lack of trained manpower, weak industrial base, inadequate investments and
infrastructure facilities, etc.
Hence, the roadmap for Public Sector was developed as an instrument for self-reliant
economic growth. The country adopted the planned economic development polices, which
envisaged the development of PSUs.
Public Sector Undertakings (PSUs) can be classified as Public Sector Enterprises (PSEs),
Central Public Sector Enterprises (CPSEs) and Public Sector Banks (PSBs).
The Department of Public Enterprises - External website that opens in a new window acts as
a nodal agency for all Public Sector Enterprises (PSEs).
The Department of Public Enterprises sees the public sector becoming the prime mover in the
industrial and social development of the country. Public Sector Undertakings (PSUs) have
laid a strong foundation for the industrial development of the country. The public sector is
less concerned with making profits. Hence, they play a key role in nation building activities,
which take the economy in the right direction.
PSUs provide leverage to the Government (their controlling shareholder) to intervene in the
economy directly or indirectly to achieve the desired socio-economic objectives and
maximize long-term goals.
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The Government provides Public Sector Enterprises (PSEs/PSUs) the necessary flexibility
and autonomy to operate effectively in a competitive environment. The government has also
implemented revised salaries for executives of PSEs/PSUs. Moreover, some innovative
measures such as Performance Related Pay have been introduced to make them more
efficient. These incentives for the employees have been linked to individual, group as well as
company performance. It is well known that the PSEs were dominant till the late 1980s. But
due to the unsatisfactory performance of PSEs, the Government of India has taken some
policy measures in the early 1990s, i.e., New Industrial Policy, 1991. These policy measures
have been adopted to improve the performance of PSEs. To deal with the problem of loss-
making units, the government established BIFR in 1987-88 under the provision of Sick
Industrial Act, 198514. During 1992-2006, 74 CPSEs were referred to the BIFR. Out of
them, 57 units were operating till 2005-06, and 16 CPSEs were closed. Out of the 74
companies that were referred to the BIFR for revival was Richardson and Cruddas (1972)
limited. The company became sick in the 90s and has been sick ever since. And due to the
continues efforts and strategies of BIFR and the Government it has started showing signs of
improvement.
1. Introduction
Noble Carr Richardson came to Mumbai in 1852, with fiery ambition. In 1858 his ambition
found expression in the form of a small foundry. The foundry was set up in the compound of
his bungalow in Byculla, then a fashionable locality of Mumbai. Through the years, the
foundry flourished, and in 1870, Richardson & Company came into existence, it was a
partnership venture - with the two sons Noble and William Richardson joining hands with
their father.
In 1880 Richardson & Company absorbed the business interest of Nicol & Company of Parel
Road, Mumbai. With the merger, John Cruddas, the Manager of Nicol & Company became a
partner and thus began a new thriving partnership - Richardson & Cruddas - later to become
the largest structural and mechanical engineering Company in Western India.
A New Era Dawns
Richardson & Cruddas as a partnership venture, continue to prosper both in Western and
Southern India. However, with India's Independence the British partners sold the company to
Haridas Mundhra who became its sole proprietor. In 1949 the firm was turned into a Private
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Limited Company with 100% Indian Capital. In 1972 the business of the old Company
Richardson & Cruddas Ltd. was acquired by the Government under an Act of the Parliament
and a new company called Richardson & Cruddas (1972) Ltd., was formed on 15th March,
1973 as a wholly owned, "Government of India Undertaking". The company had become
subsidiary of M/s Bharat Yantra Nigam Ltd., (BYNL) Allahabad from 01.04.1987 a company
set up by Govt. of India. Later in 2007, BYNL was wound up by DHI Ministry and since then
the company is operating independently.
At present Richardson & Cruddas (1972) Ltd have four large workshops at Byculla-Mumbai,
Mulund-Mumbai, Ambattur-Chennai and M. I. D. C. Industrial Estate, Nagpur. All the four
units has necessary infrastructure pertaining to the products of their unit. R&C has built a
name in the fabrication industry, projects services, environment engineering/ Tower testing
field catering to various sectors.
Turning sick
The company had started incurring losses in 1990s and about 150 workers were forced to
take voluntary retirement in 2002. The company was declared sick in 1992 and has remained
sick ever since. Although the government and the company has tried cutting down the
expenditures and reduce losses, the company yet again incurred the loss of INR 21.55 crore
although it is less than the loss of INR 27.38 crore during the previous year 2009-10. The
company has had problems with dividend payment and has not declared dividend to 8%
Redeemable Non-cumulative Preferential shareholders amounting to INR 186.08 Lacs due
incurred by the Company. The company is reeling under a huge unsecured loan of INR 338
crore carrying a interest rate in the range of 14.5% to 22.5% including penal interest.
Although many revival strategies were proposed for R&C, it could never break even due to
its high interest liability burden which is in tune of INR 15.85 Crore, high overheads,
mediocre production and dwindling sales. It was thus also unable to approach financial
institutions for working capital. And because of above mentioned factors R&C inspite of
making gross profits in last 3 years has not been able to register profit. All these factors
contributed in making the company sick and hence it was referred to the Board for
Reconstruction of Public Sector Enterprises (BRPSE) for its revival.
Vision/Mission
“To grow and become a major engineering enterprise catering to core sector of economy”.
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Objectives (of the company)
i. To increase production/sales by 10% over the previous year
ii. Enhance employee productivity by 10% during next year
iii. Reduction in overdue outstanding (excluding amount locked in court cases) by 15%
over the current level
iv. Consolidation of production facilities at two locations (Nagpur & Chennai) and
readying for sale of fixed assets of Mulund and Byculla at Mumbai.
Board of Directors
• Shri. P K Kothari
Chairman & Managing Director
Richardson & Cruddas (1972) Ltd.
• Shri. R K Singh
Government Director
Department of Heavy Industry,
Ministry of Heavy Industries and Public Enterprises, Government of India
• Shri B L Kureel
Government Director
Department of Heavy Industry,
Ministry of Heavy Industries and Public Enterprises, Government of India
• Shri. Kewal Ram
Non Official Director
Nature of Industry
R&C is a manufacturing industry which is majorly involved in fabrication of various process
equipments, chemical machinery etc.
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Product Profile
Richardson & Cruddas has a diversified product profile which is given below:
• Fabrication and Galvanizing
• C.I. Casting
• Sugar Mill machinery
• Rubber Mill machinery
• Railway Points and Crossing
• Hand Pumps
• Chemical Machinery
• Refrigeration Equipment
• Refrigeration Compressor Unit
• Miscellaneous Industrial Machinery
• Projects
Unit
Richardson & Cruddas has four manufacturing units, two located in Mumbai at Byculla and
Mulund, one at Nagpur and one at Chennai.
Installed Capacity
R&C has a standard installed capacity for a range of products. R&C has an installed capacity
for more than 10 products ranging from fabrication and galvanising to hand pumps, chemical
machinery to refrigeration equipments etc. But it has not been able to perform at its level best
and a very less of the said installed capacity is utilised leading to a very low efficiency that is
also a contributing factor to its losses.
(Refer Table 1.1)
Capital Structure
R&C has an authorised capital of 6,500 lacs that consists of 4,00,000 equity share of Rs. 1000
each and 2,50,000 , 8% redeemable non-cumulative preference share of Rs. 1,000 each.
(Rs. In Lacs)
• Authorized Capital -
400,000 Equity shares of Rs. 1000/-each 4,000.00
250,000 8% Redeemable Non-cumulative
Preference shares of Rs. 1000/-each 2,500.00
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6,500.00
It has issued subscribed and paid up capital of Rs. 5,483.53 lacs that consists
of 3,15,753 equity share of Rs. 1000 each and 2,32,600 , 8% redeemable non-
cumulative preference share of Rs. 1,000 each.
• Issued, Subscribed & Paid-up Capital -
315,753 Equity shares of Rs. 1000/-each 3,157.53
232,600 8% Redeemable Non-cumulative
Preference shares of Rs. 1000/-each 2,326.00
5,483.53
• Ownership Pattern-
5,48,353 fully paid shares are held by President of India through his nominee
and only one fully paid equity share is held by Managing Director.
Annual Turnover (Product wise)
Annual turnover over the company stands at 2,908 MT of fabrication and galvanising works
at shops and 16,800 MT at sites and manufacture of 280 handpumps and 4,861 MT of
chemical machinery in the financial year 2010-11 as against 3,239 MT of fabrication and
galvanising works at shops and 16,800 MT at sites and manufacture of 452 handpumps and
4,293 MT of chemical machinery in the financial year 2009-10.
(Refer Table 1.2)
Market Share (Product wise) :
R&C has a market share of 1.2 % in its product segment that is diversified.
Sales (Product wise)
R&C has a gross sales figure of Rs. 9,153.63 lacs in the financial year 2010-11, Rs. 9,169.54
lacs in 2009-10 and Rs. 8,136.76 lacs in the year financial year 2008-09. And for this year the
company has bagged orders of Rs. 15,500 lacs.
(Refer Table 1.3)
Profile of Customers
• National
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All India Radio, Larsen & Toubro Limited, Balmer Lawrie and Co., Mazagon Dock Limited,
Bharat Dynamics Limited, National Thermal Power Corporation Limited, Bharat Electronic
Corporation of India Limited, Bharat Heavy Electricals Limited, Nuclear Power Corporation
Limited, Bharat Heavy Electricals Limited, TBG, Power Grid Corporation of India Limited,
Bharat Heavy Electricals Limited ,Salem Steel Plant ,Bharat Heavy Electricals Limited,
Sitson India Private Limited, Bharat Heavy Electricals Limited, State Electricity Boards,
Chennai Port Trust, Thermax Limited, Hi-Tech Engineering Corpn. India Private Limited,
Visakhapatnam Port Trust, Indian Oil Corporation Limited, Visakhapatnam Steel Plant,
Visakhapatnam, Jindal Steel Limited, Bellary Industries Limited, Kilburn Engineering
Limited
• International
R&C has no international customers
2. Objectives of the Study
The objectives of the study are to:-
i. Learning The Case Writing method and Project Appraisal.
ii. Understand the operational structure of Public Sector Enterprise and Richardson
& Cruddas(1972) Limited.
iii. To get acquainted with style of PSEs functioning and R&C.
iv. Study the intent and broad vision behind establishment of various PSEs and R&C.
v. Explore various competitive and distinctive advantages of R&C over their
industry peers.
vi. Analyze and compare the key performance indicators of R&C.
vii. Study the style of functioning of R&C due to which it had Turnaround through the
winds of change.
viii. Analyzing the growth and contribution of R&C to Fabrication & Manufacturing
Industry.
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3. Research Methodology
Objective of Research: The main objective of the research is to find the ground reality of the
Turnaround strategy and the futures prospects of growth of the R&C in context with its
competitors.
Collection of Data: Data was collected from secondary sources such as by referring to the
Organization official website and other websites, journals, Books, reports, Centre for
Monitoring Indian Economy, Company & Competitors Annual Report etc.
Evaluation and Analysis the Data: The data collected is analyzed through various methods
such as financial ratios and other statistical tool. Comparison has been made with company
itself (year wise) and also with Competitors- Technofab Engineers and Omega Construction
Equipment Ltd. The presentation style is of case study for the Analysis.
Preparation of the report: The Case Study format is being followed for the preparation of
the Report. The reported will be presented in a condense form but with detailed information
keeping the world limit as provided by the mentors.
4. Competition
Competitors and their Market Share
The company faces stiff competition from the private sector; main competitor’s being
Tirupati Structurals Ltd and Steel Products Ltd. Market share of Tirupati Structurals Ltd. is
2.06% and that of Steel Products Ltd. is 1.48%.
Being a 100 years old firm R & C enjoys an edge over its competitors. Also, the company is
backed by the confidence of many successful projects in the past history thus; it gears out its
name from the competitors. The competitors cut through the competition by their huge capital
investment and their efficiency in operation wherein they cut costs in the operating expenses.
The advantage they enjoy is the latest technology and the commitment to complete the task
within stipulated time frame ensuring the proper quality mark-ups.
For Competitive edge of Own Company and of Competitors’; like-
• Technology adopted • Market Share
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• Product Mix • Advertisements • Customers profile (National/ International) • Research & Development
(Refer Table 4.1)
5. Financial Gearing:
Finance is said to be life blood of any organization. In terms of financial data, the company’s
performance can be tested. Thus, financial data over the years act as a performance calculator
of the company itself.
The companies were tested on parameters of Input consumption and the Cost of Production.
In input consumption we tested the efficiency of consumption wherein the processing and
consumption of raw materials to produce finished goods was judged.
In cost of production, we take in the total cost involved in various steps of production. This
analysis is of huge importance to the company to ascertain which department is incurring
high costs and where can cost control methods be implemented.
(Refer Table 5.1, 5.2)
Annual PBIT and PAIT (Profit/Loss)
PBIT is profit before interest and tax and for the financial year 2010-11 for R&C is Rs.
950.46 lacs and and Rs. 441.77 lacs in the year 2009-10. In the same period PAIT for R&C
stands at Rs. (2,155.04) lacs in the year 2010-11 and for the year 2009-10 it was Rs. (2737.66
lacs). This shows that it is reducing its losses and although it is able to register gross profit it
is reeling under the stress of huge debt and the intrest paid to that debt eats away the profit
making it a loss making unit.
(Refer Table 5.3)
Expenditure Pattern
The company has shown a steadiness in the expenditure pattern over the last 3 years although
it had decreased the administrative expenses form substantially from Rs. 340.87 lacs in 2008-
09 to Rs 227.68 lacs in 2010-11 and manufacturing and selling and distribution expenses
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have remain almost the same with minor changes. This shows the company is trying to cut
down the extra expenses that were not profitable for the company.
(Refer table 5.4)
6. Human Resource Management
The company’s backbone is always considered its Human Resource. The employees working
for the company and their commitment towards the achievement of the company’s goal
ensures the success of the organization. But it also involves a lot of cost for a company. As the
company was sick and government agencies such as, BPRSE, were designing its revival
strategy, they decided to cut down the operational cost by providing Voluntary Retirement
Scheme (VRS) to about 400 employees. Moreover the number of employees in the company
exceeded the required number i.e. There was an overallotment and the company reeled under
the pressure of paying that many number of employees. Since then the number of direct
employees has been gradually decreasing. As per data, company has 59 direct employees in
year 2010-2011 as compared to 488 direct employees in 2001-2002.
Age of superannuation in this company is 58 years.
(Refer Table 6.1)
Gross Salary and Wages
The gross salary/wages amounted to Rs. 142.55 Lacs in 2010-2011 and Rs. 131.16 in year
2009-2010. As on 31st March 2011, the gross gratuity paid by company is Rs. 18.30 Lacs as
compared to 32.78 Lacs in previous year and contribution to Provident fund amounts to Rs.
18.22 Lacs in year 2010-2011 as compared to 12.03 Lacs in year 2009-2010.
Employees Production/hour
a. Per Employee Turnover
Per Employee Turnover is on constant rise as can be observed from the last 3 years . this
shows the company is making remarkable improvements. Per Employee Turnover stood at
Rs. 141 lacs in the year 2010-11 compared to Rs. 137.88 lacs in year 2009-10.
(Refer Table 6.2)
b. Per Employee PBIT
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Per Employee PBIT for the company stands negative at Rs. (-36.53) lacs compared to Rs. (-
45.63) lacs in 2009-10 which is gradually decreasing.
(Refer Table 6.3)
c. Per Employee PAIT
Per Employee PBIT for the company stands negative at Rs. (-36.53) lacs compared to Rs. (-
45.63) lacs in 2009-10 which is gradually decreasing.
(Refer Table 6.4)
There is no data available for the average age of the employees.
Hiring
There has been no hiring process in the company in the last 5 years.
Superannuation Payment consists of Gratuity, Provident Fund and Family Pension Fund.
Total amount in this account for the company in the financial year 2010-11 stands at Rs 36.52
lakhs and Rs. 44.82 lacs in the year 2009-10.
(Refer Table 6.5)
7. Energy Management
� Energy Consumption
The company R&C is not energy intensive. However energy audits were made by the units
of company. Nevertheless all possible efforts are being made to reduce energy consumption
and costs and same have been under control. Expenses occurred for power and fuel during the
year 2010-11 stood at Rs. 203.07 lacs as against Rs. 166.58 lacs in the year 2009-10. This
was contributed mainly by the increase in prices of the power and fuel.
8. R&D and Technology
As a part of R&D, Richardson & Cruddas carries out Environmental Impact Studies for
various clients at their Chennai unit.
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Richardson & Cruddas intends to set up Testing Laboratory, Environmental Lab, etc. in 1300
sq. ft. readily available laboratory with DT/NDT testing equipment at Byculla/Mulund in
Mumbai, Nagpur and Chennai on revenue sharing basis. For this, they have floated a tender
on 31/05/2013 for all the units.
9. Valuation
i. Annual Market Price of Shares and Book Value of shares: All shares of the
company are held by the President of India through his nominee thus the market
value of the share cannot be ascertain whereas the book price of equity share and
preference share is Rs. 1000 each.
ii. Value addition(Financial terms)- Input/output Ratio
Efficiency of the company stood at .833 in the year 2010-11 as compared to .812 in the
year 2009-10
(Refer Table 9)
10. CSR Activities and Environment Protection: The Company is fully committed to
prevent pollution and protect environment. Afforestation was done in vacant land of Nagpur
and Mulund units. There was Pollution control equipment already installed in Nagpur unit to
safeguard health hazard arising out of galvanizing activities which was reported in good and
sound condition by the auditor himself.
11. Challenges and Issues
• Accumulating heavy interest on loans: Supporting its financial needs, Richardson &
Cruddas took heavy loans. There was a loan of Rs. 36857.32 lacs from Government
of India, which was at a rate of interest in range of 14.50% to 22.25%. Also these loan
amount included Rs. 14841.98 lacs overdue as regards repayment of principal and
interest.
Not only this A Government of India loan of Rs. 400 lacs which was granted in 1999
pursuant to BIFR order sanctioning rehabilitation scheme was to be interest free.
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However this did not happen and the company auditors have observed that interest
have been charged on this loan from inception till March 31, 2011 aggregating to Rs.
1404.62 lacs. Also there is a difference of Rs. 1585.08 lacs in the balance of
unsecured loans from Government of India as per Company’s records vis-à-vis
Government records.
• High rent cost of Mulund & Byculla Units: The nature and extent of encumbrances
is not fully and completely known or ascertainable. The Byculla works of the
company are situated on lease-hold presently belonging to Collector of Mumbai; the
lease tenure has expired between 1974 & 2003. The Collector of Mumbai is in the
process of revising its policy in respect of Government lands leased out and renewal
of expired lease.
Also, the properties of Mulund includes lease-hold land admeasuring 36087 sq.m.,
which was held under the Court Decree with the Bank of Maharashtra and expired on
1994. Based on negotiations, R & C had option to acquire reversionary interest for an
agreed consideration of Rs. 70 lacs to be paid on or before March 31, 2005. The
company was unable to pay the agreed considerations by the stipulated due date.
• Large product mix brings in large management issues: The Company holds a very
deep portfolio of various product mix that it offers. Due to very limited number of
employees, company faces huge problems in terms of management of the portfolio. It
is better to say that company is ‘Jack of all trades but master of none’.
• Lack of Government Support & Bureaucracy: The disbursed remedial amount is
still on papers and has not reached in the Company. Also, the earlier amount also was
not properly disbursed. The interest free loan was charged with heavy interest.
Change in policy requires a lot paper work thereby decreasing the operational
effectiveness.
• Competition: The industry is at its saturation point wherein the profit can be met only
by operational effectiveness and competitive advantage. There are N numbers of
competitors in the market with a huge capital to an extent of 150% of Richardson &
Cruddas. They also beat the company by their latest technology and project timely
commitment. These factors lead a major drop down for the company. Such private
players include Aditya Birla Nuvo, Jaiprakash Associates etc.
• Efficiency: The Company lacks on the part of efficiency. With its under production
and less utility of installed capacity, company faces huge administrative costs. The
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actual production to installed capacity is as low as zero; this reduces the efficiency in
operation for R & C and also is a major reason in setback for the company. The lack
in number of employees and work area spread in four different locations adds up to
the problems of company too.
12. Discussion
The operational effectiveness of a company lies within the company itself. In case of
Richardson & Cruddas it can be observed that the company is losing its effectiveness on the
points above discussed. Further, in heavy engineering products a huge investment is required.
Company is not following any policy for its marketing and relationship building. A proper
Corporate Relationship Management department would help the company to acquire projects
on a continuous basis. This can be concluded because despite severe losses company had
booked orders worth 155 crore. A dedicated HR department to hold back the talent within the
firm is also advisable, since company has limited number of employees their nurturing and
creativity would play a major role in company’s success. A complete reconstruction of capital
is advised further so that company may come out of its financial crisis and thus may perform
its operations. This structuring should be internally wherein the debt is to replace in form of
equity. The company is advised to undertake joint ventures with other firms so that the
expertise they have currently may be en-cashed and also cash inflows is continuous.
Government Intervention in the company’s crisis is crucial. If government activities are
properly channelized, company would straight away come out of its phase of crisis. Therefore
on the part of company and government the aforesaid remedies should be immediately
disbursed which may act as a catalyst in company’s growth and future performance.
Turnaround strategy
The BRPSE, which was set up in 2004, is an advisory body to the government on revival and
restructuring of sick PSUs. For restructuring and revival of sick R&C some of the strategies
adopted by the Government are - Financial restructuring, Business restructuring and Man
Power Rationalization. Financial restructuring involves investment in CPSEs by the
Government in the form of equity participation, providing loan (plan/non-plan)/grants and/or
write-off of past losses as well as changing the debt equity ratio. Measures such as waiver of
loan /interest/penal interest, conversion of loan into equity, conversion of interest including
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penal interest into loan, moratorium on payment of loan/interest. Government guarantee, sale
of fixed assets including excess land, sacrifices by State Government, one-time settlement
with banks/financial institutions, etc. BIFR (Board for Industrial and Financial
Reconstruction) have sanctioned revival schemes for R&C.
The government of India sanctioned a loan of INR 400 Crore in 1999 on persuasion of BIFR
intended to be interest free but interest were charged on that loan that aggregated to INR 14
crore. This issue has been taken up with Department of Heavy Industries and is pending.
In yet another strategy for its survival R&C resorted to Voluntary Retirement Scheme (VRS)
in 2002 and the manpower employed in R&C was gradually decreased. It has limited its
operations and has taken aid of contractual workers for its operations and almost 400
employees were forced to take VRS.
In one of the strategies in August 2011, bids were invited to take over and revive the sick
Richardson & Cruddas, which has large chunks of prime real estate in Mumbai. The offer
letter stated that firms interested in reviving the company should have “experience in similar
industry”. But in recent developments BPRSC has recommended the Government to shut
down its operations in Byculla and Mulund unit and shift their operations to Nagpur unit.
In yet another strategy for its survival CPSEs have resorted to Voluntary Retirement Scheme
(VRS) from time to time and the manpower employed in R&C has gradually been decreased
and has limited its operations and has taken aid of contractual workers for its operations and
almost 400 employees were forced to take VRS.
In the recent development the company has entered into a business transaction with J Kumar
Infrastructure Pvt Ltd at Byculla unit and is planning to enter into a joint venture arrangement
with A2Z Maintenance and Engineering Service Ltd, Case Cold Roll Forming Ltd and others
at Nagpur unit.
Although none of the above strategies have shown any visible positive impact on the
profitability of the company as most of them are yet to be implemented, the company may
have shed a ray of hope by showing positive gross profit and thereby decreasing the losses.
Also the company has bagged orders of INR 155 Crore in the last financial year.
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ANNEXTURE
Table 1.1: Installed Capacity of R&C
Sl. No. Product Units Installed Capacity
1 Fabrication and Galvanizing MT 28300
2 C.I. Casting MT 3000
3 Sugar Mill machinery Nos. 470
4 Rubber Mill machinery Nos. 35
5 Railway Points and Crossing ETO’s 1800
6 Hand Pumps Nos. 20000
7 Chemical Machinery MT 2960
8 Refrigeration Equipment Nos. 100
9 Refrigeration Compressor Unit Nos. 4000
10 Miscellaneous Industrial Machinery MT Mfg. from existing
capacity
Table 1.2: Annual Turnover of R&C(Product wise) :
Sl.
No.
Product Units Actual
2010-2011
Production
2009-2010
1 Fabrication and Galvanizing
- at shops
- at sites
MT
2908
16800
3239
16800
2. Hand Pumps Nos. 280 452
3. Chemical Machinery MT 4861 4293
Table 1.3: Sales (Product wise In Lacs)
Sl.
No.
Particulars units 2010-
Quantity
2011
Value
2009-
Quantity
2010
Value
1 Structural (Fabrication,
Galvanizing, etc.)
MT 3,879.80 4,200.57
2 Chemical Machinery MT 4861 3,515.08 4293 3241.18
Page | 19
3 Refrigeration spares &
Mechanical jobs
0.08 0.63
4 Public Health 271.54 254.42
5 Hand Pumps Nos. 280 50.77 452 90.01
6 Projects 47.43 6.35
7 Spiral Casings 248.46 199.55
Table 4.1: The different criteria on which R&C and its competitors (Tirupati
Structurals Limited and Steel Products Limited) are compared.
Criteria R&C Tirupati Structurals
Limited
Steel Products
Limited
Market
Share in %
1.2 2.06 1.48
Product Mix Fabrication and
Galvanizing
C.I. Casting
Sugar Mill machinery
Rubber Mill machinery
Railway Points and
Crossing
Hand Pumps
Chemical Machinery
Refrigeration Equipment
Refrigeration Compressor
Unit
Miscellaneous Industrial
Machinery
plastic and rubbers
-pvs/hdpe pipes
-pvc foam/sheets
-water tanks
machinery>>non-
electrical
-hand pumps
construction & allied
activities
-construction of
buildings
services
-supply of
construction
-trade &
commissioning
agents' services
steel fabrication
-galvanising
-tower testing
-structural fabrication
Page | 20
Advertiseme
nt(cost in
INR)
40,000 NIL NIL
Customer’s
Profile
All India Radio, Larsen &
Toubro Limited , Balmer
Lawrie and Co., Mazagon
Dock Limited, Bharat
Dynamics Limited,
National Thermal Power
Corporation Limited,
Bharat Electronic
Corporation of India
Limited, Nepal Electricity
Authority, Bharat Heavy
Electricals Limited, Nuclear
Power Corporation Limited
Bharat Heavy Electricals
Limited, TBG Power Grid
Corporation of India
Limited, Bharat Heavy
Electricals Limited ,Salem
Steel Plant ,Bharat Heavy
Electricals Limited, Sitson
India Private Limited
Bharat Heavy Electricals
Limited, State Electricity
Boards, Chennai Port Trust,
Thermax Limited, Hi-Tech
Engineering Corpn. India
Private Limited,
Visakhapatnam Port Trust,
Indian Oil Corporation
Limited, Visakhapatnam
Shyam Power India
Ltd, Itit Ltd,
Powergrid
Corporation Of India
Ltd, Crompton
Greaves, Siemens
Abb Ltd, West
Bengal State
Electricity Board,
Essar Group
Reliance
Infrastructure
Bhel
Bsnl Ltd
A2z Maintainace &
Engineering
Meghala State
Electricity Board
Delhi Jal Board,
BSNL,
HCL
Reliance Energy Ltd
Gujarat Water
Supply Board
Noida Authority,
U.P. Jal Nigam
Pey Jal Nigam,
Dehradun
Page | 21
Steel Plant, Visakhapatnam
Jindal Steel Limited,
Bellary, Industries Limited
Kilburn Engineering
Limited
Research &
Developmen
t
As a part of R&D, R&C
carries out environmental
impact studies for various
clients at their Chennai Unit
It intends to set up testing
laboratory, environmental
lab, etc in 1300 sq feet
readily available lab with
DT/NDT Testing
Equipment at all their 4
units on revenue sharing
basis. For this they have
floated a tender on
31/05/2013
Highly qualified and
innovative team of
researchers to find
out the actual reason
for a cause. They
also assist in
improving the quality
standard of the
Pumps, Pipes &
Fittings, Water
containers & storage
tanks and introducing
new products . They
also help in
streamlining the
production process
and optimum
utilization of
resources.
The plant has a
modern galvanising
plant with a shed
area of 1400 sq.
metres. A covered
drying chamber
ensures suitable
drying of material
which eliminates
zinc splashing and
provides a safe
working
environment. The
galvanising plant has
3 EOT cranes which
help maintain
optimum prodn level.
Technology
Adoption
NIL Tirupati believe in a
sustained process of
innovation and
diversification of
their products. The
company employs
modern machines in
its process to ensure
smooth and flawless
NIL
Page | 22
Table 5.1: Input consumption of R&C and its competitors (Tirupati Structurals
Limited and Steel Products Limited in INR Lacs)
Company 2010-11
R&C 524.18
Tirupati Structurals Limited 1073.8
Steel Products Limited 340.3
Table 5.2: Cost of production of R&C and its competitors (Tirupati Structurals Limited
and Steel Products Limited in Lacs)
Company 2010-11 2009-10 2008-09
R&C 729.61 732 735.16
Tirupati Structurals Limited 11683 13065 10662
Steel Products Limited 449.3 413.8 997.5
Table 5.3: Annual PAIT & PBIT of R&C(in Lac)
Year 2010-11 2009-10 2008-09
PBIT 950.46 441.77 75.86
PAIT -2155.04 -2737.66 -3026.87
Expenditure Pattern:
Table 5.4: Expenditure pattern of R&C(in Lacs)
Year 2010-11 2009-10 2008-09 Manufacturing expenses
729.61 732 735.16
Administrative expenses
227.68 285.42 340.87
Selling and distribution expenses
27.17 25.84 24.32
Page | 23
Table 5.5: Expenditure Pattern of Tirupati Structurals Limited (in INR lacs)
Year 2010-11 2009-10 2008-09 Manufacturing expenses
11683 13065 10662
Administrative expenses
1315 2177 2257
Selling and distribution expenses
440 350 167
Table 5.6: Expenditure Pattern of Steel Products Limited(in INR Lacs)
Year 2010-11 2009-10 2008-09 Manufacturing expenses
384 444.1 391.5
Administrative expenses
74.6 78.5 85.2
Selling and distribution expenses
14.4 13.6 12.5
Table 6.1: Number of Direct employees of R&C
Year 2010-2011
2009-2010
2008-2009
2007-2008
2006-2007
2005-2006
2004-2005
2003-2004
2002-2003
2001-2002
Number of Direct Employees
59 60 65 68 73 74 77 77 449 488
Table 6.2: Per employee Turnover of R&C
Year 2010-2011 2009-2010 2008-2009
Per Employee turnover 141.0025 137.88 113.65
Table 6.3: Per employee PBIT of R&C(in Lacs)
Year 2010-2011 2009-2010 2008-2009
Page | 24
Per Employee PBIT -36.53 -45.63 -46.569
Table 6.4: Per employee PAIT of R&C(in Lacs)
Year 2010-2011 2009-2010 2008-2009
Per Employee PAIT -36.53 -45.63 -46.615
Table 6.5: Superannuation payment of R&C(in Lacs)
Superannuation payment 2010-2011 2009-2010
Gratuity 18.30 32.78
P.F & F.P.F 18.22 12.03
Total 36.52 44.81
Table 9.1: Input/output ratio of R&C
Year 2010-11 2009-10 2008-09
Efficiency .833 .812 .724
Page | 25