INVESTOR May 2018 PRESENTATION
Company Overview 01 02 Business Overview Strategic Priorities & 03 Growth Outlook 04 Financial Results DISCUSSION 05 Annexure SUMMARY 1
COMPANY OVERVIEW
Health and Safety Assets & Operational Detail • At SEML, safety is taken as top priority. The workers are equipped with necessary safety gears on their operational role • Regular medical check-up and in house medical facilities ensures that workers keep in good health • The incident rate (including minor injuries) has seen a declining trend over past few years • All employees at plant has to go through training on safety every year Corporate Social Responsibility • The Company has adopted 90 single-teacher schools in the No. of Incidents(including minor) tribal areas of Chhattisgarh for providing basic education 253 300.00 • The Company actively sponsors medical facilities, assisting in 250.00 primary healthcare across villages. 200.00 • It runs a well-equipped ambulance with doctors and set up first- 150.00 aid facilities in the villages surrounding its mines 43 37 100.00 21 15 50.00 • Extended financial assistance to Bhartiya Vidya Bhawan and R 0.00 K Sarda Vidhya Ashram for school buildings/operations CY13 CY14 CY15 CY16 CY17 3
Key Milestone Key Milestone Coal mines and 4.8 MW Installed 25 TPD Electric Arc Hydro power plant started Furnance in 1990 operations in 2008-09 Acquired 3 Power units in Pellet plant commenced 1993-94 operations in 2009-10 Installed Two Sponge Iron 66 MVA Ferro Alloys plant Kilns of 30K MT each in 1993 1999-08 Post 2018 1979-89 and 80 MW Thermal power and 1995 plant started at Vizag in 2012-13 Sold two power units and installed one as captive power 24 MW Hydro Power plant project started in July 2017 Steel plant capacity to be Company acquired Raipur Company started 24 MW captive increased by 50% in FY Wires and Steel as a sick unit power plant and Ferro Alloy plant 2019 in 1979 in 2001 Commissioning of 96 1989-99 Installed 10 MT electric arc Commenced a fly ash brick plant 2008-18 MW Hydro Power plant furnace in 1981 to produce to utilize hazardous fly ash from located in Sikkim in FY ingot captive power plant 2020 and 24 MW plant located in Chhattisgarh in Installed Continuous casting Acquired Iron ore mine with FY 2022 machine in 1984 for Billet reserves of 20 Mn MT. production I, commenced iron ore extraction from the mines n 2004 4
Company at Glance Company at a Glance Company at a Glance Operations Financials Revenue grown at 21% CAGR in Financial Vertically integrated producer of last two years. EBITDA has Steel Performance steel with captive raw materials Grown 45% in the same period Leading Manufacturer and Debt to Equity stands at 0.79 in Low Ferro exporter of niche grade Gearing FY18, lower than 0.88 in FY17, is Alloys manganese based ferro alloys. one of the lowest in the sector Hydro Sustainable Power Ventured into hydro power in Growth Production has grown profitably in Uttarakhand, Chhattisgarh and Sikkim as Background the last few years across segment Background Government push towards clean energy Sarda Energy & Minerals Limited (SEML), incorporated in 1973, is the flagship company of Sarda Group. 5
Company at Glance Company at a Glance FY2018 - A landmark Year in Sarda History Pellet Highest ever Pellet production of 6 lakh tonne Billet highest ever production at 1.36 lakh tonne Ferro Alloys Highest ever production of 148982 MTs in FY2018 Hydro Power Highest ever energy generated 19.10 Mn units Revenue Highest ever revenue over 2200 crores with all division contributing to the growth EBITDA Highest ever EBITDA of INR 4,016 mn PAT reached highest ever PAT of INR 2057 million Dividend Highest ever dividend of Rs. 5 per share reflect management focus towards 5 rewarding shareholder
Operations Operations : Geographical Footprint Lower transportation cost due to close proximity to raw material and end users 4.8MW in Uttarakhand 96MW in Sikkim Rajnandgaon (Iron Ore mine) to Siltara (SEML Plant) 140 kms 24MW in Gullu SEML plant in Siltara Iron ore mine in Rajnandgaon SMAL, VIZAG Ferro Alloy plant at Vizag is operated under SMAL 6
Product Offering Buiness Offerings Demand Driver Iron Ore Pellet & Sponge Iron Infrastructure & Urban development Steel Housing for All Wire Rod Billet & HB Wire Construction All types of Steel, demand Manganese Manganese aligned to increased in steel Silico Ferro demand Ferro – Alloys Requirement is higher in manufacturing Alloy Steel Government Push towards clean energy To meet peak demand for Hydro Power power Hydro more viable option in difficult terrain with limited sun light and wind for logistic 7
Board of Directors Kamal Kishore Sarda, CMD Mechanical Engineer with 40 years experience in Iron and Steel Industry. He is responsible for steering SEML towards the path of growth Pankaj Sarda, Jt Managing Director Padam Kumar Jain, Director and CFO Uma Sarda, Director MS in Industrial Administration from Purdue CA, CS with a rich experience of 31 years in Arts graduate with specialization in Home University, USA, With industry experience of the field of accounting, finance, taxation, Science. Active member of NGO that works more than 12 years. costing and corporate laws. for primary education and healthcare of tribal people Prabhakar Tripathi Jitender Balakrishnan Asit Kumar Basu PGDM in Industrial Management. Ex DY. BME graduate with 40 years of experience Former CMD of NMDC with a rich MD, IDBI Bank, having wide experience in in the field of finance. Ex chief general experience of 45 years in the field of mining the field of Oil & Gas, Refineries, Power, manager of IDBI Bank. and related activities. Steel etc . Gajinder Singh Sahni C K Lakshminarayanan Rakesh Mehra, Post Graduate from Cardiff University. IAS An Engineer with experience spanning FCWA with over 35 yrs of experience in officer from Madhya Pradesh Cadre and across various institutions like ST CMS finance & accounting. Ex GM, Madhya Former MD, MSIDC & MP, Cabinet Electric, IDBI etc. Pradesh Audhyogik Vikas Nigam. Secretariat, Govt of India Independent Non Executive Director 8
Strong Corporate Governance Employee Engagement Experienced Board Values Clarity on thought process related to Majority consisting of independent Management has a culture of ethical business is clearly communicated to all directors from diverse field with rich values to be followed while working with the employees which helps them to align experience who drive the Board and the company. their goals with the vision of the policy decisions and strategy making management Transparency Shareholder Wealth Corporate Policy The management team also believes in The company also believes in All the crucial decisions related to transparency on all the company rewarding shareholders, Dividend company’s operations are taken without matters which helps them to build a is being paid consistently since deviating from the company’s policy surrounding of rich moral values within FY 2003-04 9 the organization
BUSINESS OVERVIEW
Steel Business India’s Steel Industry Overview India Crude Steel Production (Mn Tonne) Sector overview 102 110 India became the 2 nd largest crude steel producer in 2018, as large • 97 100 public and private sector players strengthen steel production 90 89 capacity in view of rising demand. 90 82 80 • India is the largest producer of Direct Reduced Iron (DRI) or 70 Sponge Iron. 60 50 • The steel sector contributes over 2 per cent to the GDP of the FY 14 FY 15 FY 16 FY 17 FY 18 nation World Steel Demand Intensity 60000 • India’s per capita consumption of steel grew from 59.6 kgs in FY USA, 294 Germany, 4 Per capita 14 to 68 kgs in FY18 50000 84 GDP, USD 40000 Japan,497 Future Growth 30000 Turkey, 437 • Renewed push towards infrastructure development will increase 20000 Russia, 275 steel demand going forward Brazil. 103 China, 489 10000 India. 68 Per capita Steel Consumption, kg 0 • Government has set target for 300 million tonne production by 2030, c.3x from current production run-rate 0 100 200 300 400 500 600 10 Source: IBEF; FICCI report
Steel Business • Iron ore mines near SEML plant in Siltara • Production run rate of 5 lakh tonne with mine life of 30 Iron ore years • Pellets are produced from Iron Ore Fines and majority is sold in local markets, remaining is consumed captively for production of Sponge Iron. Pellet • The capacity of the pellet plant is 6lakh tonne • Sponge Iron is produced from Captive Iron Ore Lumps and Pellets • Sponge Iron capacity is 3.6 lakh tonne Sponge Iron • Billets are semi finished steel products produced by continuous casting process Billet • Billet production capacity is 2 lakh tonne • Wire Rods are hot rolled products made from direct hot billet charging Wire Rod & • Wire Rods production capacity is 1.8 lakh MT’s HB Wire • Wire Rods are cold drawn to produce HB Wires • Eco-Bricks are mainly manufactured from fly-ash and waste generated from Eco Bricks the power plant • Company’s annual production capacity is 1.3 lakh tonne 11
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