Electro Steel Castings Limited

COMPANY INFORMATION

Electro steel Castings Limited (ECL) is a water infrastructure company providing techno-
economic solutions for water supply and sewerage systems. The Company is India’s
largest manufacturer, and one of the few manufacturers in the world, of ductile iron
(“DI”) spun pipes. Lack of safe drinking water and proper sanitation is a major problem
in India, and the demand for safe drinking water is increasing at a rapid pace. In order to
transport sufficient quantities of water from different sources, i.e. rivers, lakes or wells, to
a treatment plant with minimal loss and then transport the treated water to the end-user, a
reliable pipe material is required that is strong, long-lasting, corrosion resistant and
reduces the risk of contamination. DI pipes possess these qualities and are currently the
single most widely used type of pipe for the transportation of water and sewage.

The company started by producing steel castings and cast iron pipes at Khardha, West
Bengal in 1959 and its first CI pipe factory was commissioned at Khardah, near Kolkata,
West Bengal with an installed capacity of 14,400 TPA. The Company manufactures DI
spun pipes, DI fittings and pig iron (an essential intermediate product in the manufacture
of DI spun pipes and cast iron (“CI”) spun pipes) at its facility in Khardah (West Bengal),
CI spun pipes at its facility in Elavur (Tamil Nadu) and low ash metallurgical coke
(“LAMC”) (an important intermediate product used in the production of liquid metal/pig
iron) at its facility in Haldia (West Bengal). The Company has recently increased
production capacity at its Khardah plant from 200,000 tons per annum (“TPA”) to
250,000 TPA and is also planning to implement various other “backward integration”
measures at its various units. The Company supplies DI spun pipes and DI fittings both
domestically and internationally, mainly in South East Asia, South Asia, the Middle
East,Africa and Europe. The Company produces CI spun pipes for the domestic market
only. The Company is also involved in the execution of turnkey projects as an
engineering, procurement and construction (“EPC”) contractor for water and sewerage
infrastructure projects, including sourcing, treatment and distribution.

During 2005, the Company raised USD 40 million through the issue of Global Depositary
Receipts and during 2006 the company issued Zero Coupon Convertible Bonds of USD
75million.

For the financial year ended 31st March 2007, the Group had net sales of Rs.1229.99
Crores as compared to Rs.1008.09 Crores for the financial year ended 31st March 2006.
The Group’s EBITDA (Earnings before Interest Tax Depreciation & Amortisation for the
year ended 31st March 2007 was Rs. 210.36 Crores as compared with Rs.163.42 Crores
for the financial year ended 31st March 2006. The Group’s profit after tax and before
minority interests and shares in associates for the financial year ended 31st March 2007
was Rs.98.08 Crores as compared to Rs.75.17 Crores for the financial year ended 31st
March 2006. The Group had net profit for the financial year ended 31 March 2007 of
Rs.104.72 Crores as compared to Rs.77.86 Crores for the financial year ended 31st
March 2006.
MANAGEMENT

Board of Directors

Chairman

Mr. P.K.Khaitan

Directors

Mr. B.Khaitan
Mr. Naresh Chandra
Mr. Jamshed J. Irani

Managing Director

Mr. Umang Kejriwal

Joint Managing Director

Mr. Mayank Kejriwal

Whole Time Directors

Mr. N. C. Bahl
Mr. Uddhav Kejriwal

Company Secretary

Mr. Jyoti Jain

Auditors

Lodha & Co.

Chartered Accountants
Solicitors

Khaitan & Co
.
Bankers

BNP Paribas
HDFC Bank Ltd.
Hongkong & Sanghai Banking Corporation
ICICI Bank Ltd.
IDBI Bank Ltd.
Punjab National Bank
Standard Chartered Bank
State Bank of India
Works

Khardah, West Bengal

Haldia,West Bengal
Elavur, Tamil Nadu

Corporate Office

G.K. Tower
19 Camac Street
Kolkata - 700017
India

Registered Office

Rajgangpur
Orissa – 770017

MILESTONES

1996 : The Company obtained Kitemark licence from British Standard Institute
(BSI) for its Dl pipes as per ISO 2531, BS EN 545, BS EN 598.
: The Company commissioned its own mini-blast furnace with matching
capacity for better quality control.
1999 : The Company received the ISO-9002 accreditation from BSI for Dl pipes and
fittings.
2000 : The Company increased its capacity to 120,000 tpa for Dl pipes.
: The Company obtained Kitemark license from BSI, UK for Dl fittings made
at its facilities in Elavur, Chennai as per ISO 2531, BS EN 545, and BS EN
598.
2001 : The Company scaled its Dl pipe capacity from 120,000 tpa to 150,000 tpa.
: Mini Blast Furnace capacity increased from 1,09,000 tpa to 2,00,000 tpa.
2002 : The Company acquired 46% stake in Lanco Industries Limited in March
2002, which is involved in manufacturing of DI Pipes, Pig Iron, Cement and
Castings.
2003 : The Company received the ISO-14001 and ISO 9001-2000 certification as a
testimony to its sound environment management practices.
: The Company also received BSI Kitemark license for Dl Fittings at Khardah
works, West Bengal.
: The Company increased its Dl pipe manufacturing capacity from 1,50,000 tpa
to 200,000 tpa.
2005 : The Company raised USD 40 Million through the issue of Global Depository
Receipts (GDRs) in October 2005 and become the first Indian Company to be
listed on Professional Securities Market (PSM) of the London Stock
Exchange (LSE) in addition to being the first Company to issue GDRs on the
PSM.
: The Company was accorded Three Star Export House by the JDGFT,
Ministry of Commerce and Industry of the Government of India.
2006 : The Company increased its Dl pipe manufacturing capacity from 2,00,000 tpa
 to 2,50,000 tpa and commissioned Coke Oven Plant at Haldia.
The Company commissioned 12 MW Power Plant & 30,000 tpa second Kiln
Sponge Iron Plant at Haldia.
Mini Blast Furnace capacity increased from 2,00,000 tpa to 2,35,000 tpa.
The Company successfully commissioned Pulverized Coal Injection System
in Blast Furnace and Stamp Charging System in Coke Oven Plant at Khardah,
which enhanced operational efficiency.
The Company successfully raised USD 75 Million through issue of Zero
Coupon Convertible Bonds to finance its Capital expenditure requirements.

VISSION & MISSION

OUR VISION

We aim to be World-class, committed to customer satisfaction and to encourage the Spirit

of leadership amongst our dedicated team by creating a Healthy environment for
Continuous growth, Profit and Prosperity

OUR MISSION

Our Principles, that help us to grow, thrive, prosper and realize our vision.

Integrity
We strongly abide by integrity in our work. We demand the highest ethical standards of
our employees. We always strive to improve the quality of our products

Transparency and shareholder value

The company recognizes its primary obligation to generate a superior return for its
shareowners through a prudent strategy, reasonable payouts of dividend and a fair degree
of corporate transparency that does not threaten its competitive position in the
marketplace.

Community development

We do not live for bread alone. The company is committed to contributing meaningfully
to the community and society in which it lives.

Respect for people

People represent our intellectual capital. Respect for the individual is of paramount
importance. We treat our people like members, not employees. We provide an exciting
working environment. We recognize that learning is an important part of the growing
process

Leadership

Electrosteel’s focus is to emerge as a great company – with leaders not only at the top,
but at every level.
Environment

Electrosteel’s world does not end with the perimeter of its office and factory. It extends
beyond: to conducting its various manufacturing processes with adequate respect for a
safe and pollution-free environment

Performance

The company’s performance speaks. Within seven years, from scratch, it grew the DI
pipe market in India to over one lac tones per annum.

Teamwork

The company’s ductile pipe was the first of its kind in India. The commissioning and
success continues to be the result not of individual brilliance but of a collective initiative

Customer focus

We are a highly customer-focused company. This reflects in the product that we make
and in the value that we deliver to them
Quality Systems
Type tested Pipes for complete reliability :
If you refer to EN:545/2002 and ISO:2531/1998 in
all these specifications, Type tests have been
introduced in push-on joints. Performance type
tests on D.I. pipe and their joints are basically
carried out under extreme conditions of :

High Internal Pressure of the pipe and the joint.

Shear force on joint.
Under declared deflection of the joint.
Under vacuum (negative pressure)
Abrasion of Cement lining of the pipe
Acid and Alkali attack on lining of the pipe
Bending deformation effect on lining of the pipe by
external loading.

These tests have been successfully carried out in

India at ECL factory in presence of the
representatives of British Standard Institute, U.K.
and DQA, Government of India on randomly
selected pipes covering the range of 80mm dia to
1000 mm dia. On the strength of these tests
Electrosteel has been issued BS "KITEMARK"
license and the BS "KITEMARK" logo is
incorporated on pipes as per requirement of
international norms. The quality system followed
in the plant resulted in accreditation of ISO 9002
by both IRQS (INDIA) and BSI (UK). The records
of product and plant are audited by BSI UK and
IRQS every year to verify consistency and
conformance to ISO: 9002 and other product
standards. No other pipe material is subjected to
these stringent conditions of type test.
For all design purpose the design value of C=140 is
taken which is sound and on the conservative side.
Over the years, Ductile Iron Pipe Research
Association USA has conducted flow tests on
cement mortar lined Cast Iron and Ductile Iron
pipes in operational pipelines, new pipelines as
well as those that have been in service for extended
periods of 40-50 years. These field tests have
shown a ‘C’ value of 140 to be realistic, and one
that is maintained over time even when
transporting aggressive water. In AWWA Manual
M41 all charts and tables are based on C=140 only.
Electrosteel & Environment

Electrosteel is committed to –

Meet environmental legislation and regulation as applicable, on an ongoing basis with an

aim to improve the quality of life
Strive for prevention of pollution through continual improvement of process, technology
and equipment wherever applicable
Achieve continuous improvement of environmental performance through the setting up
of targets and reviewing of results
Promote conservation of resources
Communicate environmental policy to all employees and make this policy available to all
interested parties.

Achievements

Electrosteel successfully made the change over to ISO-14001-2004 (Environmental

Management System), Standard and has been certified by IRQS. The Company is
effectively maintaining the Environmental Management System Standard ISO: 14001-
2004 in both the Manufacturing Plants (Khardah and Elavur).

Ground water consumption for industrial purpose has further been reduced by increasing
recycling of treated waste water to 92%.

Vehicular emission testing machine has been installed at Khardah Works to ensure
emission compliance by all incoming heavy vehicles

Electrosteel have sponsored various social activities for spreading awareness of

environment issues in the neighborhood. Staff members from various Polytechnics along
with the Faculty of National Institute of Technology Teachers’ Training & Research were
provided in-plant training on Environment and Safety Measures.

Apart from Environmental Quiz Competition among youths and school children of the
locality, Electrosteel has successfully participated in the “Vigyan O Projukti Mela” and
“Paribesh Mela” organized by West Bengal Pollution Control Board during the year
2005-06 with profound success.

Health and Safety policy

Electrosteel Castings Limited believes that all accidents and injuries are preventable with
due care and awareness. It further believes that accidents not only result in injuries but
also have far reaching effects on the productivity of the company. It is the policy of the
company to prevent accidents and to safeguard the health and safety of its employees by
maintaining and promoting safe and civilized work culture. This policy is communicated
to all employees through training and made available to all third parties working in the
factories.

Safety Initiatives

Continuous conformance to the Company’s mandatory safety regulation

Inculcation of safety awareness and enrichment of the same amongst all employees and
contractors through various campaigns and extensive safety training programmes
including induction training and refresher trainings

Daily Plant Safety Observation by line managers and at regular intervals by the top
management with a view to identify and eliminate unsafe acts and conditions.

External Safety Audit by experts in the field of Health & Safety at least once in a year

Formulation of Safe Operating Procedures and implementation of the same in respect of

individual activities

Formulation and upgradation of various safety training modules in respect of various

hazardous operations and utilizing the same in respective training programmes

Issuance of Personal Protective Equipment to all employees as well as contractors as per

the job hazards they are exposed to.

Prompt investigation and derivation of Root Cause of all accidents and near-miss
incidents by means of ‘WHY-WHY’ analysis technique

Corrective / preventive actions based on accident and near miss incident analysis reports.

Widespread display of various cautionary boards and ‘Dos & DON’TS’ at strategic
locations.

Provision of adequate safety appliances viz. fire extinguishers, work environment

monitoring devices, vehicular emission measuring device, etc.

Holding mock drills on the Onsite emergency plans at regular intervals with a view to
assess the effectiveness of emergency preparedness amongst the employees.

Health Initiatives

ESI / Accident Insurance coverage for all employees.

Pre-employment and periodical health checkup of all workers including contractors.
In-house facilities for Pulmonary Function Test and Audiometric test of all identified
workmen.
Colour vision and eye-checkup of all mobile equipment drivers and crane drivers
Provision of adequate First-Aid boxes in all departments/shop floors, etc.
Well-equipped and adequately maintained Occupational Health Centre inside the factory
premises.
Availability of Doctors, Compounders and Ambulance in the Occupational Health Centre
round-the-clock.
Facilities of Homepathy and allopathy treatment at the Occupational Health Centre.
Tie-ups with reputed nursing homes and pathological centers in the locality for the
employees of the company and their family members.