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Page | 1 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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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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Reference

• (n.d.). Retrieved oct 2013, from Department of Heavy Enterprises:

http://dpe.nic.in/brpse/recommendedbrpse

• (n.d.). Retrieved october 2013, from Richardson & Cruddas Ltd:

http://www.richardsoncruddas.com/

• (n.d.). Retrieved october 2013, from Richardson & Cruddas Ltd:

http://www.richardsoncruddas.com/index.php/ct-menu-item-2

• (n.d.). Retrieved october 2013, from Richardson & Cruddas Ltd:

http://www.richardsoncruddas.com/index.php/ct-menu-item-2

• (n.d.). Retrieved october 2013, from Richardson & Cruddas Ltd :

http://www.richardsoncruddas.com/index.php/ct-menu-item-8

• (n.d.). Retrieved november 2013, from Richardson & Cruddas Ltd:

http://www.richardsoncruddas.com/index.php/ct-menu-item-10

• (n.d.). Retrieved october 2013, from Department of Heavy Industry :

http://dhi.nic.in/role.html

• Bharucha, N. k. (2011, november 12). Retrieved october 2013, from RESSEX:

http://ressex.blog.com/2011/11/12/rogecosol/

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http://articles.timesofindia.indiatimes.com/2011-11-12/mumbai/30390900_1_revival-

package-revival-plan-bifr

• (2006). Notice of : Annual General Meeting with Enclosers. Sansco Services.

• (2012, april 20). Retrieved october 2013, from Press information bureau :

http://pib.nic.in/newsite/efeatures.aspx?relid=82408

• Centre for Monitoring Indian Economy Pvt. Ltd. (n.d.). Retrieved November 2013,

from CMIE: http://www.cmie.com/

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of Understanding 2011-12.

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• Department of Heavy Industry. (2011). 38th Annual Report.

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Maharashtra & Goa (pp. 10-13). Northern Book Centre .

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http://businesstoday.intoday.in/story/land-sale-for-psu-revival/1/596.html

• Ministry of Heavy Industries and Public Enterprises. (2010). Annual Report 2009-10.

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• Ministry of Heavy Industries and Public Enterprises. (2011). Annual Report 2010-11.

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• Ministry of Heavy Industries and Public Enterprises. (2012). Government of India

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• Mishra, R. (2002, february 20). Retrieved oct 2013, from Business Line:

http://www.thehindubusinessline.in/2002/02/21/stories/2002022101520400.htm

• Richardson & Cruddas Ltd . (2013, may 31). Tender for TESTING LABORATORY,

ENVIRONMENTAL LAB.

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psus-revival-packages-praga-tools

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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

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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

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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: (Richardson & Cruddas)_print (1)

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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

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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

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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

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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

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