PRELIMINARY INFORMATION MEMORANDUM (PIM)  

 

HINDUSTAN COPPER LIMITED

 

 

A.F.FERGUSON & CO.

 

 

TABLE OF CONTENTS

 

 

 

1.0             DISCLAIMER                                                                                              

 

2.0             SUBMISSION OF EXPRESSION OF INTEREST (EOI)

Introduction 

Advertisement inviting EOI 

Expression of Interest 

EOI filed by Consortia/ Joint Ventures

Eligibility/Pre Qualification Criteria

Disqualification 

Future Process 

Enquiries 

Governing Laws/ Jurisdiction/ Arbitration 

                                                                                               

3.0             CORPORATE INFORMATIO

Introduction

Location and Facilities

Capacity and Products

Management

Capital Structure and Shareholding Pattern

Details of borrowings as on January 31, 2002

Proposal for Financial and Other Restructuring under 

Consideration by GoI

Human Resources

Employee Separation Scheme 

Industrial Relations

Marketing Network and Pricing

Financial Status 

Strengths of HCL

          

4.0              KHETRI COPPER COMPLEX

            Introduction                                                                                       

            Products and Capacity                                                                    

            Mines and Other Manufacturing Facilities                                     

            Other Facilities                                                                                 

            Scope of Expansion                                                                        

                            Value of Assets                                                                                

            Human Resources                                                                           

5.0             INDIAN COPPER COMPLEX

Introduction                                                                                       

Products and capacities                                                                 

Mines and Other Manufacturing Facilities                                     

Value of Assets                                                                                

Human Resources                                                                           

 

6.0             MALANJKHAND COPPER PROJECT 

Introduction                                                                                       

                                Mines and Other Manufacturing Facilities                                     

                                Production Performance                                                                 

Infrastructure Facilities                                                                    

Scope of Expansion                                                                        

                                Value of Assets                                                                                                                    

Human Resources                                                                           

           

 

7.0             TALOJA COPPER PROJECT

 Introduction                                                                                       

Product and Capacity                                                                      

Manufacturing Facilities                                                                  

Value of Assets                                                                                

Human Resources                                                                           

 

8.0             ANNEXURES

 Annexure I      : Public Advertisement                                                        

Annexure II     : Expression of Interest                                                        

Annexure III     : Statement of Legal Capacity                                            

Annexure IV   : Request for Qualification                                                   

Annexure V    : Government Circular                                                          

 

 

 

A.F.Ferguson & Co. (AFF) has prepared this Preliminary Information Memorandum (PIM) on the basis of information provided by Hindustan Copper Limited (HCL) in connection with the proposed disinvestment of 98.95% equity by the Government of India (GoI) in Hindustan Copper Limited (HCL). The sole purpose of this PIM is to assist the recipient interested in being the ‘Strategic Investor’ to participate in the aforesaid disinvestment process.

This document is meant to assist the recipient in deciding whether they wish to proceed with a further investigation of the proposed disposal, but it is not intended to form the basis of any investment decision or any decision to purchase the interest.  This document does not constitute nor should it be interpreted as an offer or invitation for the sale or purchase of securities described herein.

This document is meant to provide information only and upon the express understanding that recipients will use it only for the purposes set out above.  It does not purport to be all inclusive or contain all the information about HCL or be the basis of any contract.  No representation or warranty expressed or implied, is or will be made as to the reliability, accuracy or the completeness of any of the information contained herein. It shall not be assumed that there shall be no deviation or change in any of the herein mentioned information on HCL.  While this document has been prepared in good faith, neither HCL nor GoI nor AFF nor any of their respective officers or employees make any representation or warranty or shall have any responsibility or liability whatsoever in respect of any statements or omissions here from.  Any liability is accordingly expressly disclaimed by HCL, GoI, AFF and any of their respective officers or employees even if any loss or damage is caused by any act or omission on the part of HCL, GoI, AFF or any of their respective officers or employees, whether negligent or otherwise.

By acceptance of this document, the recipient agrees that any information herewith will be superseded by any later written information on the same subject made available to the recipient by or on behalf of HCL and GoI.  HCL, GOI, AFF and any of their respective officers or employees undertake no obligation, among others, to provide the recipient with access to any additional information or to update this document or to correct any inaccuracies therein which may become apparent, and they reserve the right, at any time and without advance notice, to change the procedure for the sale of all or any part of the interest or terminate negotiations or the due diligence process prior to the signing of any binding purchase agreement.

Accordingly, interested recipients should carry out an independent assessment and analysis of HCL and of the information, facts and observations contained herein.

 This document has not been filed, registered or approved in any jurisdiction. Recipients of this document resident in jurisdictions outside India should inform themselves of and observe any applicable legal requirements.

 

INTRODUCTION

2.01         HCL was incorporated on Nov.9,1967.The company is under the administrative control of Department of Mines.

 

2.02         As a part of its disinvestment program, the Government of India (GoI) intends to disinvest 98.95% equity of the company along with transfer of management control .

 

2.03         A. F. Ferguson & Co. (AFF) have been retained as advisors to the GOI for the proposed disinvestment process and matters relating thereto.

 

ADVERTISEMENT INVITING EOI

 

2.04         An advertisement has been issued in the business newspapers inviting interested parties to submit their ‘Expressions of Interest’ (EOI) to participate in the disinvestment process, a copy of which is enclosed as Annexure I.

 

EXPRESSION OF INTEREST

 

2.05         This section describes the manner of participating in the disinvestment process and the requirements relating to information to be provided by interested parties, when submitting their Expression of Interest (EoI).

 

2.06         Expression of Interest may be submitted by domestic / international companies (whether currently existing or to be formed specifically to acquire shareholding in HCL) either individually or as a consortium.

 

2.07         Interested parties must submit, in duplicate, their EoI accompanied by a Statement of Legal Capacity and Request for Qualification (“RFQ”) the {“EoI Package”}, as per the formats given in Annexure II, III & IV of this PIM.

 

2.08         EoIs must be signed by a duly authorized representative of the interested party.  In the case of a consortium or joint venture the EoI must be signed by a duly authorized representative for the group.  In addition, Statements of Legal Capacity and RFQs have to be submitted by interested parties and each member of any consortium or joint venture.  This comprises the EoI Package.

 

2.09         All EoI Packages must be in English and each copy shall be bound in a separate volume.  Submission of the aforesaid documents by fax, e-mail or other electronic means will not be acceptable.  It is the responsibility of the interested party(ies) alone to ensure that its EoI with required documents is delivered at the address given below by the stated time and date. The covering envelope containing the aforesaid document should be clearly marked “Expression of Interest for participation in disinvestment in HCL Ltd”.  Neither the GoI nor HCL shall be responsible for non-receipt of correspondence.

 

2.10         The EoI package must be submitted by no later than 17.30 hours (Indian Standard Time) on 30.04.2002 at the following address:

 

Mr. E.A.Kshirsagar,Director-in-charge A. F. Ferguson & Co.                       11th Floor, Express Towers Nariman Point,Mumbai 400 021 Tel : 0091-22-2022427 Fax : 0091-22-2022769 e-mail : affmum@vsnl.com

Mr. Kamlesh Mittal ,Director A. F. Ferguson & Co.                       Hansalaya, 4th Floor Barakhamba Road New Delhi 110001   Tel : 0091-11-3315256/5266/3543 Fax : 0091-11-3325437 e-mail : affcpdel@bol.net.in

 

EOI FILED BY CONSORTIA/JOINT VENTURES

 

2.11         If a Consortium or Joint Venture is formed, or proposed to be formed, specifically for the purpose of this investment, details of the members of the Consortium or Joint Venture and the extent of their interest herein must be provided in the EoI Package.

 

2.12         Any subsequent change by way of withdrawal/substitution of any member of the consortium or joint venture or any change affecting the composition of the consortium or joint venture may be permitted, but only with the specific approval of the GoI.  The GoI has the sole discretion to determine the impact of the change in membership on the structure and quality of the Consortium or joint venture and reject a proposal without assigning any reason whatsoever.

 

2.13         The RFQ should be duly filled in and accompanied by the following:

 

·                    In case of a sole bidder

-          The Audited Balance Sheet and Profit & Loss Account of the sole bidder for the last 3 financial years

-          Write-up on:

a.      Profile of the sole bidder

b.      A statement of reasons for strategic interest in HCL

c.      Any other information considered material

·                    In case of a consortium bid

-          The audited Balance Sheet and the Profit & Loss Account for the last 3 financial years of the lead bidder and other member companies associated in the bid.

-          Write-up on:

a.      Lead bidder

i.        Profile of the lead bidder

ii.      A statement of reasons for strategic interest in HCL

iii.    Any other information considered material by the lead bidder

 

b.      Other member companies

 

i.        Profile of member companies in the consortium

ii.      Any other information considered material

 

2.14         A processing fee of Rs.40,000/- (Rupees Forty Thousand only) towards due diligence shall be payable by demand draft/ banker’s cheque favouring Hindustan Copper Limited payable at Kolkata. The processing fee will be refunded to the parties who do not qualify or to all the qualified parties if GoI decides to withdraw from restructuring/ disinvestment process of HCL.

 

ELIGIBILITY/ PRE-QUALIFICATION CRITERIA:

 

2.15         The interested party (ies) must have:

 

I           Annual turnover in excess of Rs.3,000 millions as per the latest annual accounts and a satisfactory business and management track record.

 

AND

 

II           Net Worth (excluding revaluation reserves) of over Rs.1,000 millions

 

(a)   For a consortium bid, the combined Turnover and combined Net Worth of the constituent entities of the consortium should meet the above mentioned eligibility criteria to participate in the proposed transaction.

 

(b)   In case of a consortium bid, the leader of the consortium should meet at least 51% of the above mentioned eligibility criterion No. II.

 

(c)   Definition

 

Net Worth = Equity Share Capital + Reserves (excluding Revaluation reserves)

 

2.16         Where the financial statement is expressed in currency other than Indian Rupee, the eligible amount as described above shall be computed by taking the equivalent US Dollars at the exchange rates (as stipulated by Foreign Exchange Dealers Association of India) prevailing on the date(s) of such financial statement.

2.17         In choosing between prospective strategic investors, GOI will pay due attention, inter-alia to the security requirements of the country.

 

2.18   Based on an evaluation of the EoI Package received, Interested Parties which are deemed to be qualified by the GoI (“Qualified Interested Parties” or “QIPs”) will be allowed to participate in the subsequent selection process (without conferring any right or expectation whatsoever to the QIPs).

 

2.19         Following signing of a Confidentiality Agreement (“CA”) by duly authorized personnel, QIPs will be provided with the Confidential Information Memorandum (“CIM”) and invited to participate further in the process as detailed in the CIM.

 

DISQUALIFICATION

 

2.20         The GoI shall not consider for the purpose of qualification, an EoI which is found to be incomplete in content and/or attachments and/or authentication etc.

 

2.21         Without prejudice to any other rights or remedies available to the GoI, a company/consortium/joint venture may be disqualified and its EoI dropped from further consideration for any reason whatsoever including those listed below:

 

(1)   Material misrepresentation by such company/any member of such consortium/joint venture whether, in the EoI along with the RFQ or otherwise

 

(2)   Failure by such company/ consortium/ joint venture to provide the information required to be provided in the EoI, along with the RFQ, pursuant to relevant sections of the PIM

 

(3)   Submission of an EoI along with RFQ in respect of any company/ consortium/joint venture, where such company or any member of such consortium/ joint venture  has already submitted an EoI

 

2.22         If information becomes known, after the interested party has been qualified to receive the Confidential Information Memorandum (CIM), which would have entitled the GoI to reject or disqualify the relevant company/ consortium/ joint venture, the GoI reserves the right to reject the interested party at the time, or at any time after, such information becomes known to the GoI.

 

2.23         Where the interested party is a consortium/ joint venture, the GoI may disqualify the entire consortium/ joint venture for any of the reasons set out above, even if it applied to only one member of the consortium/ joint venture.

 

2.24         Further, Government of India has issued guidelines for disqualification of bidders seeking to acquire any public sector enterprises through the process of disinvestment vide Department of Disinvestment OM No.6/4/2001-DD-II dated 13th July, 2001 and amendments thereto, a copy of which is enclosed as Annexure-V.  The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in HCL through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in HCL in the Expression of Interest to be submitted by them.  Further, interested parties would be required to provide the information on the criteria, laid down in the guidelines of 13.07.2001 and amendments thereto along with their Expressions of Interest (EOI).  The bidders shall be required to provide with their EOI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government.  For other criteria also, a similar undertaking shall be provided along with EOI.

 

2.25         The companies/consortia not satisfying the eligibility and requisite qualification criteria specified in the above sections are not eligible.

 

FUTURE PROCESS

 

2.26         Based on the EoI submitted by the interested parties, the GoI, advised by AFF, will carry out an evaluation of the qualification of such interested parties. If at any time during the evaluation process, the GoI or AFF require any clarification in order to carry out the evaluation, they  reserve the right to request such information from any or all of the companies/ consortium/ joint ventures and the companies/ consortium/ joint venture will be obliged to respond to any reasonable request for such information and to supply the same to AFF within such reasonable timeframe as the GoI or AFF may require.

 

2.27         Based on an evaluation of EOIs received, interested parties, which are deemed fit (“qualified interested parties” “QIP”), will be qualified to participate in the subsequent selection process (without conferring any right or expectation whatsoever to the QIP).  The QIP will be provided with the Confidential Information Memorandum (CIM) and shall be invited to participate further in the process described in detail in the CIM.  The QIP will get an opportunity to conduct due diligence and take up plant visits and will also have access to data rooms and hold discussions with the management of HCL/officials of Department of Mines /Department of Disinvestment, Government of India.  The rules regarding access to information in the data rooms will be provided to QIPs later.  QIPs will be subsequently invited to submit their proposal and a binding price bid.

 

2.28         This document constitutes no form of commitment on the part of the GOI or HCL other than to provide further information on HCL.  Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed divestment process.  The GOI and HCL reserve the right to withdraw from the process or any part thereof or vary any terms at any time without assigning any reasons.  The GOI reserves the right to accept or reject any/all offer(s) without assigning any reasons.

 

ENQUIRIES

 

2.29         The GoI and the Advisor reserve the right not to respond to questions raised or provide clarifications sought, in their sole discretion, if it is considered that it would be inappropriate to do so. Nothing in this section shall be taken or read as compelling or requiring the GoI and the Advisor to respond to any question or to provide any clarification. No extension of any time and date referred to in this IM shall be granted on the basis or grounds that the GoI and the Advisor has not responded to any question/ provided any clarification.

 

GOVERNING LAWS / JURISDICTION / ARBITRATION

 

2.30         All matters relating to the disinvestment process and the bidding procedure shall be governed by the law of Union of India. Only Courts at New Delhi (with exclusion of all other Courts) shall have the jurisdiction to decide or adjudicate on any matter, which may arise.

 

 

INTRODUCTION

 

3.01         Hindustan Copper Ltd., (HCL) was incorporated on 9^th November, 1967 as a public limited company under the Companies Act, 1956, with the objectives, inter alia, to carry out mining operations and produce copper and related products.

 

3.02         HCL subsequently took over the copper ore mines from National Mineral Development Corporation Ltd. These mines are located at Khetri and Kolihan in Rajasthan and Rakha Copper Complex in Bihar.

 

3.03         In 1972, the Government of India nationalized the Indian Copper Corporation Ltd. in Bihar and merged the same with HCL. In November 1974, HCL set up a copper complex in Khetri with a designed output capacity of 31,000 TPA of copper cathode.

 

3.04         In 1982, HCL expanded its operation to Madhya Pradesh by developing the Malanjkhand copper mine. During 1990, as part of forward integration, HCL commissioned a 60,000 TPA continuous cast wire rod plant at Taloja in Maharashtra.

 

3.05         HCL is the only vertically integrated copper producer in India engaged in a wide spectrum of activities ranging from Mining, Beneficiation, Smelting, Refining and Continuous Cast Rod manufacturing. HCL also produces Gold, Silver, Nickel Sulphate, Selenium and Telurium as by products.

 

3.06         HCL was a profit making company till FY 1996 ended on March 31. However, its operations suffered a setback thereafter mainly due to substantial fall in London Metal Exchange (LME) copper prices and the increase in the cost of mining of copper ore. GOI announced a package of reliefs and concessions in 1999, which has already been implemented.

 

3.07         A package for major financial and other restructuring is currently under consideration of GoI (ref. para 3.15).

 

LOCATION AND FACILITIES

 

3.08         HCL has integrated its operations from metal extraction to the production of various finished products. It has mines and other manufacturing facilities in various locations in Eastern, Central and Western part of the country. The following exhibit provides an overview of these facilities. Details of these mines and manufacturing facilities are described in the subsequent chapters.

Exhibit 3.01

Mines and Manufacturing Facilities of HCL

 

 

* Presently non-operational

 

CAPACITY & PRODUCTS

 

3.09         The following exhibit provides the details of installed capacity of various products produced by HCL at its different locations, as on March 31, 2001.

 

Exhibit 3.02

Installed Capacity of different manufacturing facilities

Products	Installed Capacity (TPA)
	Khetri	Taloja	Malanjkhand	Ghatsila	Total
Copper Wire Bar	31,000	-	-	8,400	39,400
Copper Wire Rod	-	60,000	-	-	60,000
Copper Cathode	31,000	-	-	16,500	47,500
Concentrator	18,15,000	-	20,00,000	8,10,000	46,25,000
Sulphuric Acid (98%)	1,82,000	-	-	54,000	2,36,000
Single Super Phosphate	1,18,000	-	-	-	1,18,000
Phosphoric Acid (100%)	210 (TPD)	-	-	-	210 (TPD)

 

MANAGEMENT

 

3.10         The present Board of HCL comprises  8 Directors and is headed by the Chairman and Managing Director (CMD) with two nominees from the Government of India, three part-time Directors and two whole-time Directors representing the functions of Finance and Personnel. The day-to-day management of HCL is looked after by the CMD and two whole time Directors supported by Heads of four plants, four Executive Directors and other senior personnel. The Board of Directors consists of the following Directors as on February 01, 2002.

Exhibit 3.03

Details of Board of Directors

 

Name	Status	Occupation
Mr. B K Menon	Chairman &  M  D	Service
Mr. S C Tripathi	Director	Additional Secretary, Ministry of Mines
Dr. Sutanu Behuria	Director	Joint Secretary & Financial Adviser, Coal & Mines, Gol.
Mr. S K Kar	Director, Finance	Service
Mr. Rana Som	Director, Personnel	Service
Mr. H V Paliwal	Director	Adviser, Metmin Finance & Holdings(P) LTD. , New Delhi
Mr. S.B.Kucheria	Director	Retd. Managing Director of State Bank of  Saurashtra
Mr. V.K.Chanana	Director	IAS (1963 ), Advisor UNIDO for the Regional Asian Office in Delhi

CAPITAL STRUCTURE AND SHAREHOLDING PATTERN

 

3.11         As on 31^st March, 2001 the Authorized Share Capital of HCL is Rs. 8,000 million divided into 600 million equity shares of Rs.10/- each and 2 million preference shares of Rs. 1000/- each. The share holding pattern as on March 31, 2001 is given in the exhibit below.

 

Exhibit 3.04

Detail of Share Holding Pattern

 

Nature of Share Capital	Authorized			Issued, Subscribed and Paid up
	No. of Shares (in mn)	Face Value / Share(Rs)	Amount (Rs mn)	Share Holder	No. of Shares	%
7.5% Non Cumulative Preference Share	2	1000	2000	President of India	1,807,324	100.00
Equity Share	600	10	6000	President of India	359,079,500	98.953
				Mutual Funds	970,900	0.267
				Financial Institutions	2,195,000	0.604
				Private Corporate Bodies	233,100	0.064
				Indian Public (including employees)	399,500	0.110
Total					362,878,000	100.000

 

Note: The GoI has in the year 2001-02 provided an advance against Equity amounting to Rs. 100 million, which is awaiting allotment.

 

3.12         HCL’s shares are listed at 5 Stock Exchanges namely, Kolkata, Mumbai, Delhi, Chennai and Ahmedabad.

 

DETAILS OF BORROWINGS AS ON JANUARY 31, 2002

 

3.13         The following exhibit provides the detail of secured and unsecured loans and other borrowings.

Exhibit 3.05 : Secured Loan

Amount in Rs mn

 

Exhibit 3.06: Unsecured Loans

                                                  Amount in Rs mn

Nature of Borrowing	Original Amt.	Outstanding Amt.		Repayment Period
		Principal	Int. Rate
Government Plan Loan	715.00	715.00	18.5%	5 years , first repayment after one year of drawal
Government Non-Plan Loan received for VR Scheme	4400.00	4400.00	14.5%, interest holiday since Mar 99	12 years exclusive of moratorium of 3 years , subject to review of moratorium period if LME does not fall below US$ 1850 after two years
Privately Placed Bonds	633.30	332.80	14	Series I – 192.60 Rs. 112.40 mn – 17.12.02 Rs 80.20 mn – 17.12.01
				Series II  140.20 – 31.1.03

 

3.14         As on January 01, 2002 the outstanding cash credit balances in different banks amounted to Rs 1,227 million.

 

PROPOSAL FOR FINANCIAL AND OTHER RESTRUCTURING UNDER CONSIDERATION BY GOI

 

3.15         A proposal for major financial and other restructuring of HCL is under consideration of the Government. The package includes :

 

§         Reduction of liabilities by converting Government loan into grant/equity

 

§         Waiver of interest on government loan

 

§         Providing funds for separating surplus employees under voluntary retirement scheme (VRS) with a view to closing some unviable operations

 

§         Closure of some unviable underground mines

 

§         Financial support to the company to meet part of the cash losses for the financial year 2001-02 and 2002-03

 

3.16         The exact details of the proposal will be shared with the QIP once the Government approval is obtained.

 

HUMAN RESOURCES

 

3.17         As on January 01 2002, total employee strength was 9520. The detail of the manpower distribution as per age profile is given in the following exhibit.

 

Exhibit 3.07

Detail of Employee Strength as on January 01, 2002

Category	Age Group
	20-24	25-29	30-34	35-39	40-44	45-49	50-54	55 & Above	Total
Executive	0	12	80	94	104	193	320	59	862
Cl.II Officer	0	1	7	9	46	104	72	13	252
Workmen	21	214	447	772	1896	3106	1696	254	8406
Grand Total	21	227	534	875	2046	3403	2088	326	9520

 

3.18         As on February 01, 2002, employee strength stands at 9510.

 

EMPLOYEE SEPARATION SCHEME

 

3.19         HCL has been continuously making efforts to reduce its surplus manpower. A non-plan loan of Rs. 4400 million has been given to HCL by GOI for separation of 8373 employees under the VRS, which has been fully utilized.

 

3.20         The manpower reduction in the last 10 years is depicted below.

 

Exhibit 3.08

Employee Strength of HCL

 

 

3.21         The company has started another VRS from March 01, 2002, which was open till March 15, 2002.The scheme has been reintroduced w.e.f March 22, 2002 to April 6, 2002. It is expected that the employee strength can be reduced by about 1700 by application of this scheme.

 

INDUSTRIAL RELATIONS

 

3.22         The industrial relations in different units of the company is by and large peaceful. The recognized trade unions in the units are affiliated to BMS, INTUC and AITUC. Apart from these, there are a few unrecognized trade unions in the different units.

 

MARKETING NETWORK AND PRICING

 

3.23         HCL markets its products through its own marketing network. It owns six sales offices and eleven stockyards across the country. The sales offices are located in Bangalore, Kolkata, New Delhi, Hyderabad, Indore and Mumbai and the stockyards are in Bangalore, Kolkata, New Delhi and Faridabad / Haryana, Ghatsila, Hyderabad, Indore, Ludhiana, Taloja, Bhiwadi, Daman Silvassa.

 

3.24         There is no Government control over the prices of the products manufactured by HCL and the price completely depends on the market forces.

 

FINANCIAL STATUS

 

3.25         The Profit and Loss Statement for the last four financial years and the audited half-yearly results have been presented in the following exhibit.

 

Exhibit 3.09

Profit and Loss Statement

Amount in Rs mn

Particulars	Apr 2001 – Sep 2001	March 2001 (18 months)	Sep 1999 (12 months)	Sep 1998 (18 months)	Mar 1997 (12 months)
Income
Sales Turnover	3336.03	9466.47	4801.93	12048.76	9815.11
Excise Duty	377.51	1373.26	628.94	1584.77	1287.71
Net Sales	2958.52	8093.21	4172.99	10463.99	8527.40
Other Income	30.93	262.72	419.82	167.74	195.44
Stock Adjustments	(762.99)	287.40	(87.00)	(511.97)	42.33
Total Income	2226.46	8643.33	4505.81	10119.76	8765.17
Expenditure
Raw Materials, Spares & Components	727.02	2551.97	1081.28	4742.03	5009.90
Staff Cost	716.34	2426.47	1973.27	3011.39	1908.32
Power & Fuel	842.33	2458.86	1325.18	2301.51	1353.39
Other Expenses of Mfg., Admn., Selling & Distbn.	302.69	1055.95	564.95	1149.43	735.05
Prior Years’ net Debits / (Credits)	(1.67)	(24.14)	15.41	25.04	54.51
Interest on Govt. Loan provided earlier yrs. written back	-	-	-	(1557.59)	-
Provisions, Losses & Write-off	63.60	75.50	166.53	(17.31)	88.16
Amortization of Mine Development Expenditure	185.20	590.41	373.79	565.82	335.67
PBIDT	(609.05)	(491.70)	(994.60)	(100.56)	(696.71)
Interest & Financial Charges	398.63	1161.28	506.82	637.69	406.70
PBDT	(1007.68)	(1652.97)	(1501.42)	(738.25)	(1103.41)
Depreciation	100.81	311.46	218.70	319.02	202.74
PBT	(1108.49)	(1964.43)	(1720.12)	(1057.27)	(1306.15)
Provision for Taxation	-	-	-	-	-
PAT	(1108.49)	(1964.43)	(1720.12)	(1057.27)	(1306.15)

Source: Annual Reports of HCL

 

3.26         The Balance Sheet of the company for the last four financial years is presented in the exhibit below.

Exhibit 3.10

Balance Sheet of HCL

Amount in Rs mn

Source: Annual Reports of HCL

STRENGTHS OF HCL

 

Only vertically integrated copper producer in India engaged in a wide spectrum of activities ranging from Mining, Beneficiation, Smelting, Refining and Continuous Cast Rod manufacturing.

Has more than 90% of total copper ore reserves in India.

First Indian copper producer to get ISO 9002 for its continuous cast wire rod plant and also has ISO 9002 certification  for its refineries at ICC & KCC.

Has developed expertise in exploration, mining, smelting and refining of copper & also in recovery of valuable byproducts such as gold, silver, nickel sulphate, copper sulphate, selenium, tellurium etc.

Huge growth potential (average per capita copper consumption in India is only 0.5kg. as compared to the World’s average of 3.0 kg. )

Malanjkhand is an open pit mine having rated production capacity of 2.0 million TPA

Scope of expansion of  KCC smelter & Refinery

Well qualified and experienced officers

Nearness to the seaport for TCP

 

 

INTRODUCTION

 

4.01         Khetri Copper Complex (KCC) is a major unit of HCL and is the biggest mining-cum-metallurgical Complex of the company. Its operations include:

 

Mining of copper ore from underground/ open cast mines,

Beneficiation of ore and smelting, refining

Production of Copper in the form of cathode and wire bar.

 

4.02         The Khetri Complex is located about 190 kms from New Delhi. The nearest Airport is New Delhi at a distance of 165 kms and the nearest railway station is Chirawa (metre gauge) at a distance of 28 kms. The Rewari station, which is connected by broad gauge line, is about 80 kms from the complex. HCL had laid a 34 km metre gauge rail track and connected the site with the metre gauge rail track of Indian Railway at Dabla. This 34 km stretch is not in use at present.

 

4.03         Khetri works (excluding mines) and township is spread over an area of 381.67 hectares  comprising of 9.88 hectare of free hold land and 371.79 hectares of leasehold land for 99 years taken from time to time starting from 1963.

 

4.04         The State Government of Rajasthan had handed over to HCL about 1309.20 hectares of ‘Set apart/forest land’ from time to time for mining exploration. HCL pays royalty to the State Government for carrying out mining activities on this parcel of land.

 

4.05         The complex has well developed infrastructure including schools (4 Nos.), hospitals (179 beds), shopping centres and township with about 4468 residential units of which 4111 are bungalows and quarters and 357 hostel type accommodation for different category of employees. HCL also has 48 quarters in Chaonra area for its employees.

 

4.06         There is a separate township for Kolihan mine having 807 residential units out of which 727 are bungalows and quarters and rest 80 are hostel type accommodation, besides school, hospital and recreation facilities. It is about 9 Kms away from KCC.

 

PRODUCTS AND CAPACITY

 

4.07         The Khetri works has the facilities for manufacturing of copper metal in concentrates, copper cathode and copper wire bars. It also has the facilities for producing phosphoric acid, Sulphuric acid and single super phosphate. Following exhibit provides the details of the installed capacity, actual production of last three years and the capacity utilization of the same.

 

Exhibit 4.01

Details of Production Performance at KCC

Products	Installed Capacity (in TPA)	2000 – 01		1999 - 00		1998 - 99
		Actual Production (TPA)	% Utilization	Actual Production (TPA)	% Utilization	Actual Production (TPA)	% Utilization
Metal in Concentrate	-	8,373		10,031		12,413
Copper Cathode	31,000	22,939	74	23,670	76	25,489	82
Copper Wire Bar	31,000	4,319	14	3,917	13	4,007	13
Sulphuric Acid	182,000	24,384	13	36,964	20	54,088	30
Single Super Phosphate	118,000			-		8,265	7
Phosphoric Acid	210	-		-		-

 

4.08         The copper cathode conforms to LME grade ‘A’ specification and copper wire bars to ISI 191 specification. In addition, cathode has been accredited with ISO 9002 certification in June 1997. The phosphoric acid plant is not operational since 1982.

 

MINES AND OTHER MANUFACTURING FACILITIES

 

Copper Mines

 

4.09         Presently Khetri Copper Complex has two operational copper ore mines (Khetri and Kolihan). These mines were commissioned in April 1973, October 1973 and December 1975 respectively. The total reserve of these three mines is 86.76 million tonnes @ 1.31% Cu. The leased area covered under these mines is 706.75 hectares.  Leased area, period of lease and estimated geological reserves of the mines are given below:                                                

Exhibit 4.02

Details of Lease Period of Mines at KCC

 

 

Exhibit 4.03

Details of Ore Reserves in the mines of KCC

 

 

 

Process Plants

 

4.10         Following exhibit shows the details of technologies used in the process plants at Khetri complex.

 

Exhibit 4.04

 

Raw Material Handling and Storage Facilities

 

4.11         Ore for concentrator plant for beneficiation is stored at a surface stockpile having a live capacity of about 1,50,000 T. Ore from Khetri mines, is brought by a belt conveyor from production shaft whereas from Kolihan and Chandmari it is brought by a bicable Aerial Rope Way (ARW). The ropeway is 7.48 km long and was installed in 1972.

 

Concentrator plant

 

4.12         The concentrator plant was commissioned in July 1973 and has an installed capacity of 1,815,000 TPA.

Smelter plant           

4.13         The smelter plant was commissioned in November 1974 and has an installed capacity of 31,000 TPA.

 

Refinery Plant

 

4.14         The refinery plant was commissioned in December 1974 and has an installed capacity of 31,000 TPA.

 

Wire Bar Plant

 

4.15         The wire bar casting plant, commissioned in August 1975, has an installed capacity of 31000 TPA.

 

 

Sulphuric Acid Plant

 

4.16         The flash furnace and converter in the smelter section of the Khetri works produces  SO₂ bearing gas. In order to treat this gas and recover sulphuric acid, HCL had set up two Sulphuric Acid Plants. Plant-I in 1975 and Plant-II in 1996 having an aggregate installed capacity of 182,000 tpa. The volume intake capacity of Plant I is 30,000 to 89,200 Nm³/hr. Plant II has a volume intake capacity of 16,000-44,000 Nm³/hr.

 

Fertilizer Plant

 

4.17         HCL had set up a plant in November 1976 for producing Triple Super Phosphate (TSP). However, due to limited demand of TSP, the product pattern was changed over to Single Super Phosphate (SSP) with an installed capacity of 118,000 TPA.

 

4.18         The main raw materials are sulphuric acid produced in-house and rock phosphate. Although there is a demand for SSP, the operation of the plant has been suspended since December 1998 because of financial constraints.

 

Phosphoric Acid Plant

 

4.19         This plant was commissioned in 1974 with an installed capacity of 210 tonnes per day of P₂0₅ (100%) mainly to utilize the H₂SO₄, produced in the Khetri Plant. The other important raw material is rock phosphate.

 

4.20         The plant is based on the Preayon technology of Belgium. Inadequate production of H₂SO_4, and falling demand of triple super phosphate, where phosphoric acid is used as one of the raw materials are the reasons for not operating the plant since 1982.

 

OTHER FACILITIES

 

Infrastructure Facilities

 

4.21         HCL had laid a 34 km. metre gauge rail track between Singhana to Dabla and connected the site with the metre gauge rail track of Indian Railways. This 34 kms stretch is not in use at present as HCL has discontinued operations of SSP plant. The Rewari station, which is connected by broad gauge lines, is about 80 kms from the complex. The complex is adjacent to the Singhana-Khetri main road.

 

Effluent Treatment Facilities

 

4.22         Each plant in the Complex has a separate effluent treatment plant. The treated effluents from each plant are taken to the common lagoon, where suspended solids are allowed to settle. The water is then recycled for process purpose.

 

 

 

SCOPE OF EXPANSION

 

4.23         Khetri Copper complex has facilities namely land, utility network, equipment (excepting certain sections of smelter and refinery plants), centralized services, R&D, township etc. for producing about 0.10 million TPA of blister copper. The company had carried out a detailed study to expand the capacity to 0.10 million TPA by debottlenecking / installing additional equipment in smelter & refinery plants but has been unable to do so because of financial constraints. 

 

4.24         Smelter can produce 45000 TPA blister copper from the existing facilities with nominal investment in addition / modification in the existing system. Output from mines can also be increased with opening up of Banwas deposit as an independent mine and capacity expansion of Kolihan mine with little investment.

 

VALUE OF ASSETS

 

4.25         Historical value of gross and net block of various category of assets in respect of Khetri  Copper Complex as on 31st March 2001 are given in the following exhibit.

Exhibit 4.05

                                                                                                       Amount in Rs mn

 

HUMAN RESOURCES

 

4.26         The total staff strength of Khetri complex (including mines) as on January 01 2002  is given below.

Exhibit 4.06

Details of Employee Strength at KCC

 

 

 

INTRODUCTION

 

5.01         Indian Copper Complex (ICC) is a major unit of HCL situated within the Singhbhum Shear Zone.  The operations of this complex includes:

 

Mining of copper ore from underground mine

Beneficiation of ore

Smelting

Electro refining of copper in the form of Cathode

 

5.02         The Complex is located at a distance of 214 Km from Calcutta and 40 Km from Tatanagar on Howrah-Mumbai Main Broad Gauge line. Nearest Airports are Kolkata and Ranchi and nearest Railway Station is Ghatsila (B.G.) which is situated at a distance of 3 Kms from Works.  The complex is facilitated by a broad gauge siding of Indian Railway to its site.

 

5.03         ICC Works (excluding mines) along with its township is spread over  an area  of 189.476 hectares acquired land  (land  acquired  through Land Acquisition proceedings) and 8.070 hectares from  freehold land.  The works and its township are constructed over  the acquired land.

 

PRODUCTS AND CAPACITIES

 

5.04         Indian Copper Complex has the facilities for mining, beneficiation of chalcopyrite ore, smelting the Concentrate, electro- refining of Anode to produce Cathode.  It also has facilities for producing Sulphuric Acid, Nickel Sulphate, Copper Sulphate, Selenium, Tellurium, Gold, Silver and Palladium as by-products.

 

5.05         Copper cathode produced with 99.99% purity at ICC has been accredited with ISO 9002 certification since 1998. The installed capacities of these facilities with corresponding production during the last three financial years are provided in the following exhibit.

 

 

Exhibit 5.01

Details of Production Performance at ICC

Products	Installed Capacity (in TPA)	2000 - 01		1999 - 00		1998 - 99
		Actual Production (TPA)	% Utilization	Actual Production (TPA)	% Utilization	Actual Production (TPA)	% Utilization
Metal in Concentrate	-	2522		1978		3880
Blister Copper	16,500	19255	117	17098	104	10261	62
Copper Cathode	16,500	19306	117	14794	90	10345	63
Sulphuric Acid	60,000	22950	38	20000	33	18016	30
Nickel Sulphate	390	146	37	155	40	129	33
Copper Sulphate	480	224	47	257	54	317	66
Metals	(in Kgs.)
Selenium	14600	9700	46	6200	42	10850	74
Tellurium		93		175		410
Silver	6105	6631	109	4741	78	5127	84
Gold	434	447	103	433	100	505	116

 

MINES & OTHER MANUFACTURING FACILITIES

 

5.06         The major facilities at ICC are broadly categorized as follows:     

    

Surda Mine

Beneficiation and Concentration of ore at Mosaboni

ICC Works at Moubhandar

Surda Mine

 

5.07         The major economic mineral deposits in Singhbhum are found in two distinct positions, one along the Singhbhum shear zone and the other in South Singhbhum.  Copper, Uranium and Apatite-Magnetite are found along the shear zone and Iron, Vanadium and Chromite in South Singhbhum.

 

5.08         Following exhibit provides the details of the ore reserve at Surda Mine.

 

Exhibit 5.02

 eneficiation and Concentration

 

5.09         Presently one concentrator, located at Mosaboni (approximately 8 Km away from Surda) with a capacity of 2700 TPD is in operation.  The ore of Surda mine is transported by road for beneficiation and tail are recycled to mine for bulk filling through beneficiation plant of  M/s Uranium Corporation of India Limited, located at Mosaboni for recovery of Uranium. The concentrate produced is subsequently transported by road to Moubhandar works for smelting.

 

Smelter Plant

 

5.10         The existing Flash Smelter was commissioned in December 1971 and has an installed capacity of 16500 TPA of Blister Copper.

Refining Plant

5.11         Electrolytic refinery was commissioned in 1965. Its capacity was enhanced from 400 TPA to 16500 TPA in 1989.

Sulphuric Acid Plant

5.12         To arrest SO₂ emission from the Flash Furnace and the Converter as well as  to recover Sulphuric acid, ICC works had set  up  two nos. SCSA Sulphuric  Acid plants - plant-I in 1971 and plant-II in 1996 having capacities for  drawing gas @ 20,000 NM3/Hr and 40000  NM3/Hr  respectively. The plant is having three sections viz. gas cleaning section, acid and tail gas treatment section. 

Effluent Treatment Plant

 

5.13         The plant was commissioned in 1999, it is a  centralized plant for treating the total liquid effluents of works having a capacity of 300 M3/Hr .

 

Copper Sulphate Plant

 

5.14         Copper Sulphate plant was installed in 1990 to liquidate copper anode slag generated in smelter. The installed capacity of the plant is 480 TPA. The anode slag is crushed, ground, leached in dilute sulphuric acid to obtain copper sulphate solution.  The solution is treated with calcium carbonate to remove iron.  After filtration the solution is evaporated by steam and transferred to crystallizer to  produce  copper sulphate crystals.

  

Nickel Sulphate Plant

 

5.15         During electro-refining the copper anode, the electrolyte gets contaminated with nickel, which is considered as an impurity in the copper cathode.   The nickel from the refinery section is removed by constant bleeding of copper sulphate solution containing nickel as impurity.  The solution is crystallized after removing sulphuric acid, copper and iron in purification section.  Bleed electrolyte is subjected to recovery of nickel sulphate through concentration and crystallization. Production capacity of this plant is 390 TPA.

Selenium and Tellurium Plant

 

5.16         The slime generated in the process of electrolytic refining of copper anode contains gold, silver, palladium, selenium, tellurium etc. In order to recover the precious metal i.e. gold and silver from the slime, selenium and tellurium are separated out and recovered. Installed capacity of this plant is 14600 Kgs. per annum of Selenium.

 

Precious Metal Recovery Plant

5.17         Gold and silver are recovered from decopperised and deselenised slime after fire refining and electrolytic refining. The gold bar cast is having purity of 99.95%. Present capacity of the Precious Metal Recovery Plant is 434 Kgs. of Gold and 6105 Kgs. of Silver per annum. 

 

VALUE OF ASSETS

 

5.18         Historical value of gross and net block of various category of assets in respect of Indian Copper Complex as on 31st March 2001 are given in the following exhibit.

 

Exhibit 5.03

Amount in Rs mn

 

HUMAN RESOURCES

 

5.19         The total staff strength of Indian Copper Complex (including mines) is 3340 as on January 01 2002. The employee profile is shown below.

 

Exhibit 5.04

Employee Strength at ICC

 

 

INTRODUCTION

 

Malanjkhand Copper Project (MCP) is the single largest Copper deposit of India with nearly 50% of Country’s Copper reserves and contributes to around 70% of HCL’s total Copper production. It is located in Central India at an altitude of 575 MRL and is connected by roads to the nearest broad gauge Railway station at Gondia and Durg which are located at 130 and 150 Kms away from MCP respectively. Airports located nearby are at Jabalpur (M.P), Raipur (Chhattisgarh) and Nagpur (Maharashtra).

 

The Project consists of an open pit mine having initial rated production capacity of 2.0 million Tonnes copper ore per annum with matching Concentrator plant, Tailing disposal system and other auxiliary facilities.

 

The minerable ore reserves with the Open Pit Mine have been estimated at 60 million tonnes, averaging a grade of 1.2% Cu. at 0.45% cut-off.

 

THE MINE AND OTHER MANUFACTURING FACILITIES

 

Ore Reserve

 

Estimated geographical reserves are provided in the following exhibit.

 

Exhibit 6.01

Details of Ore Reserves at Malanjkhand

 

The total Geological Ore Reserves below 376 mRL at 0.80% Cu cut-off, is 97.0 Min T of 1.85% grade as per MCP estimates.

 

Malanjkhand Copper Mine is a highly mechanized Open Cast Mine, designed to excavate 2 Million Tonnes of ore at 1.2% Cu grade. The Mine is to be worked at 12 meters height benches to a depth of 204 Meters from the ground level (i.e. 376 mRL). The length of the pit is 2200 meters and width 600 meters. At present the pit has reached a depth of 132 meters (i.e. 448 mRL), the pit slope is 37⁰  to  52⁰  and the width of haul road is 22 meters.

 

The mining operation is fully mechanized using rotary percussive drills of 250 & 350-psi pressure, 165 mm dia drill hole. The blasting is done by using explosives of gelatine base and slurry type. The waste rocks are unloaded at designated waste dumps and Copper Ore are transported to the Primary Crusher Plant for crushing and milling.

 

The concentrator

 

The Concentrator plant has been designed to treat 2 million tonnes of copper ore annually.

 

The Copper ores from the mine are delivered to the Primary Crusher Plant by 50T & 85 T dumpers.  At the Primary Crusher, the ore is being crushed to a size of 140 mm and then is sent through belt conveyors to the Secondary & Tertiary Crushing Units for further crushing to a size of 40 mm.

 

Thereafter, the crushed ore is sent to Ball Mill Units for fine ore milling. The milled ore is then treated in flotation cells with reagents like Pine Oil, Xanthate & Lime for separation of Copper Concentrate. The Copper Concentrate is, thereafter, sent for filtration and subsequent drying. The final product of wet Copper Concentrate is transported to the sister units at KCC and ICC, situated at Rajasthan and Jharkhand respectively for further smelting.

 

 

PRODUCTION PERFORMANCE

 

 

6.01         The performance at MCP for the last three years is given below:

 

Exhibit 6.02

 

 

INFRASTRUCTURE FACILITIES

 

Repairing Facilities

 

Facilities like Mechanical Maintenance, Electrical Maintenance and Civil Maintenance are existing in Malanjkhand Copper Project.

 

 

 

Power Supply System

 

There is 132 kV main receiving sub-station which has two 20 / 26 MVA, 132 / 11 kV transformers. Step down sub-stations have been constructed as per the requirement of various equipment and utilities. To support this power supply the project has three diesel generating sets of 3.4 MW each.

 

Water Supply System

 

Water for Concentrator Plant as well as potable water for the project and township is drawn from Banjar river about 3 Km away from the project. Total requirement of water is 5 MGD.

 

SCOPE OF EXPANSION:

 

The following steps have been  taken to increase the production capacity :-

 

Enhancement of Concentrator Plant Capacity

 

6.02         Steps have been taken to increase the production capacity of Mine & Concentrator Plant from 2.0 Mn T to 2.5 Mn T/annum.

 

Development of underground mine

 

6.03         The life of the open pit mine is only 12 years. As per latest estimates, 97 million tonnes of ore at 1.85% Cu Grade @ cut off grade of 0.8% is available below the open pit.

 

6.04         Due to the high grade of the available ore and existing infrastructural facilities, there is a distinct possibility of opening up an economically viable underground mine as a replacement of the open pit mine once its reserves are exhausted.

 

Exploration in surrounding areas

 

6.05         Malanjkhand Copper Project has identified four potential copper bearing areas through preliminary exploration around Malanjkhand and applied for two Prospecting Licences. The total area of about 4000 hectares has been reserved for exploration and exploitation in favour of HCL by the Govt. M/s. MECL is doing detailed exploration work on behalf of HCL in these areas.

 

 

VALUE OF ASSETS

 

Historical value of gross and net block of various categories of assets is given in the exhibit below (as on March 31, 2001).

 

Exhibit 6.03

 

HUMAN RESOURCES

 

The total staff strength of Malanjkhand complex (including mines) is 1301 as on January 01 2002.

Exhibit 6.04

Employee Strength of MCP

 

 

 

INTRODUCTION

 

7.01    The Taloja Copper Rod Project was set up in December 1989 with technology from M/s Southwire Company, USA for producing high quality copper rods. The plant is located in the Maharashtra Industrial Development Corporation Ltd. (MIDC) area of Taloja on the Thane-Pune Highway near Navda Phata in Maharashtra.

 

7.02    It is 50 km away from the Mumbai Airport. The nearest railway station are Panvel and Belapur. The plant enjoys locational advantages like nearness to port for imports of refined copper and availability of natural gas as fuel, from Bombay High.

 

7.03    Taloja works is spread over an area of 3.17 hectares. The land has been taken from MIDC on a 95 years lease with effect from August 31, 1987.

 

PRODUCTS AND CAPACITY

 

7.04    Taloja works produces high quality copper wire rod conforming to ASTM: B 49 - 98 specifications and ISI - 12444 - 1988 specifications.  These rods are produced in four different sizes, viz. 8, 11, 12.5 and 16 mm diameter, with a coil size (OD/ID/HT) of 1432 x 928 x 500 mm (23 T approx.). The installed capacity and production performance for the last three years is given in the following exhibit.

 

Exhibit 7.01

Details of Production at TCP

Products	Installed Capacity (in TPA)	2000 - 01		1999 - 00		1998 - 99
		Actual Production (TPA)	% Utilization	Actual Production (TPA)	% Utilization	Actual Production (TPA)	% Utilization
Copper Wire Rod	60,000	30,572	51	29,937	50	33,025	53

 

MANUFACTURING FACILITIES

 

7.05    The major facilities at Taloja works are broadly categorized as follows -

 

Raw material handling and storage facilities

Manufacturing facilities involving melting, casting, rolling, packing, protective coating and coiling.

Power and utilities

Effluent Treatment Facilities

 

Raw Material Handling and Storage Facilities

 

7.06    The main raw material required for production of copper wire rods is copper cathode.  Copper cathode is sourced from the HCL sister plants at Khetri (KCC) and Ghatsila (ICC).  Cathodes are stored in stacks outside the plant building in open storage area, from where these are lifted with forklift trucks and loaded onto the furnace skip loader.

 

7.07    The manufacturing facilities comprises of various sections, viz. melting of metal, casting of metal, rolling of cast bar, pickling, protective coating and coiling.  These are briefly described in the following sections.

 

Melting of Metal

 

7.08    This section comprises mainly of melting and holding furnace.  The melting furnace is fired with natural gas. The burner control is automatic and gets adjusted with furnace atmosphere.  The inside of the furnace is lined with silicon carbide bricks.  The molten metal temperature is about 1120⁰ C and oxygen level is 150 - 170 ppm. The molten metal is transferred to the holding furnace for further processing.

 

Casting of Metal

 

7.09    The hot liquid metal from holding furnace is fed into the casting mould of the casting wheel-quantity & flow being controlled by Automatic Metal Pouring System (AMPS).   Cooling water is spread on wheel freezing of metal takes place and continuous cast bar is formed by the rotation of the casting wheel.  These copper bars are cut into pieces by crop shear and than taken to the rolling mill through Bar Preparation Unit.

 

Rolling of Cast Bar / Rolling Mill

 

7.10    The cast bar enters the rolling mill section and undergoes rolling operation through 9 stands.  After rolling operation, the rod comes out of the last stand at 500⁰ C to 600⁰ C temperature.

 

Pickling, Protective Coating and Coiling

 

7.11    The Copper Rod from rolling mill, goes through the non-acid pickling system, coiler turn down pinch roll and coiler. The coils thus produced are stacked in coil bay.

 

7.12    The Taloja Plant was commissioned during 1989 - 90.  HCL, subsequently, has carried out certain modification in various sections of manufacturing facilities as mentioned in the following exhibit.

 

 

 

Exhibit 7.02

Modifications carried out in Various Sections of TCP

 

 

VALUE OF ASSETS

 

7.15    Historical value of gross and net block of various categories of assets in respect of Taloja plant as on March 31, 2001 is provided in the exhibit below.

 

Exhibit 7.03

      Amount in Rs mn

 

 

 

HUMAN RESOURCES

 

7.13    The total staff strength of Taloja Copper Plant is 159 as on January 01 2002.

 

Exhibit 7.04

Employee Strength of TCP

 

 

 

ANNEXURE-I

 

GOVERNMENT OF INDIA

 

STRATEGIC SALE OF 98.95%SHAREHOLDING IN

HINDUSTAN COPPER LIMITED

 

This announcement is neither a prospectus nor an offer or Invitation for sale of securities to the public.

 

EXPRESSION OF INTEREST

 

Government of India (GoI) holding 98.95% of the Equity Share capital of Hindustan Copper Limited (HCL), wishes to disinvest its entire shareholding in HCL to a strategic investor with transfer of management control. A. F. Ferguson & Co. (AFF) has been appointed as Advisor to the GOI in connection with the proposed sale.

 

HCL established in 1967, is a schedule ‘A’ Central Public Sector Undertaking under the Department of Mines, Ministry of Coal and Mines. The company has a paid up Equity capital of Rs. 3629 million and Preference capital of Rs.1807 million as on March 31, 2001. HCL is the only vertically integrated copper producer in India engaged in a wide spectrum of activities ranging from Mining, Beneficiation, Smelting, Refining and Continuous Cast Rod manufacturing. It recorded a turnover of Rs. 9456 million for the 18 month period ended March 31, 2001. A package for major financial and other restructuring of HCL is under consideration of the GoI.

The Expressions of Interest (EOIs) are invited to acquire 98.95% of the Equity share capital in HCL.

Interested Parties should submit their Expression of Interest (EOI) along with a Request for Qualification (RFQ) and Statement of Legal Capacity in the prescribed format at any of the under-mentioned addresses, before 17.30 hours on 30.04.02

Detailed advertisement including prescribed format for EOI/ RFQ, pre-qualification requirements and more information pertaining to the Company can be accessed at www.divest.nic.in, www.nic.in/mines,  www.hindustancopper.com or www.afferguson.com

All queries related to the EOI may be addressed to the under-mentioned persons:  

Mr. E.A.Kshirsagar,Director-in-charge A. F. Ferguson & Co.                       11th Floor, Express Towers Nariman Point,Mumbai 400 021 Tel : 0091-22-2022427 Fax : 0091-22-2022769 e-mail : affmum@vsnl.com

Mr. Kamlesh Mittal ,Director A. F. Ferguson & Co.                       Hansalaya , 4th Floor, Barakhamba Road New Delhi 110001   Tel : 0091-11-3315256/5266/3543 Fax : 0091-11-3325437 e-mail : affcpdel@bol.net.in

 

The GOI reserve the right to withdraw from the process or any part thereof, to accept or reject any or all offers at any stage of the process and/or modify the process or any part thereof or to vary any terms at any time without assigning any reason whatsoever.  No financial obligation whatsoever shall accrue to GOI or AFF in such event.  Neither GOI nor AFF shall be responsible for non-receipt of correspondence sent by post/courier/e-mail/fax.

 

 

 

ANNEXURE-II

{EXPRESSION OF INTEREST (‘EOI’)}

 

(To be forwarded on the letterhead of the interested parties/members of the consortium/joint venture submitting the EoI).

 

Ref   : _________

Date : _________

 

Mr. E.A.Kshirsagar               OR      Mr. Kamlesh Mittal

Director-in-charge                                         Director

A. F. Ferguson & Co.                                   A. F. Ferguson & Co.                      

11^th Floor, Express Towers                         Hansalaya, 4^th Floor, Barakhamba Road

Nariman Point,Mumbai 400 021     New Delhi 110001

 

 

 Sub:   EXPRESSION OF INTEREST FOR STRATEGIC INVESTMENT IN HCL

 

 Sir,

 

We refer to the advertisement dated____________ inviting Expression of Interest for Hindustan Copper Limited.

 

We have read and understood the contents of PIM and the advertisement and wish to participate in the above disinvestment process.

 

* We propose to submit our EoI in an individual capacity for and on behalf of (insert company name)

 

* We have formed / propose to form a consortium/joint venture comprising the following members:

 

1.     __________________(Insert company name)

 

2.     __________________(Insert company name)

 

3.     __________________(Insert company name)

 

 We confirm that we/our consortium/joint venture/proposed consortium / proposed joint venture* satisfy the eligibility criteria set out in the relevant sections of the PIM including the guidelines for qualification of bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment issued by the Government of India vide Department of Disinvestment OM No. 6/4/2001-DD-II dated 13th July, 2001 and amendments thereto.  The Statement of Legal Capacity and Request for Qualification as per formats, indicated hereinafter duly signed by us/ respective members, who jointly satisfy the eligibility criteria, are enclosed.

 

 We certify that in regard to matters other than security and integrity of the country, we have not been convicted by a Court of law or indicted or received any adverse orders passed by a regulatory authority which would cast a doubt on our ability to manage the public sector unit when it is disinvested or which relates to a grave offence.

 

 We further certify that in regard to matters relating to security and integrity of the country, we have not been convicted by a court of Law for any offence committed by us or by any of our sister concerns and no charge sheet has been filed by any agency of the Government for any offence committed by us or by any of our sister concerns.

 

We further certify that no investigation by a regulatory authority is pending either against us or against our sister concerns or against our CEO or any of our Directors/Managers/employees.

 

The Request of Qualification as per format duly signed by us/respective members, who jointly satisfy the eligibility criteria, is enclosed.

 

We shall be glad to receive further communication on this subject.

 

Yours faithfully,

 

 

 Authorized Signatory

 

For and on behalf of

 

* strike off whichever is not applicable.

 

 

ANNEXURE -III

 

STATEMENT OF LEGAL CAPACITY

 

 (To be forwarded on the letterhead of the interested party and /or each member of the consortium/ joint venture submitting the EoI).

 

Ref:                                                                                                                                                                                                                                                                                 Date :

 

Mr. E.A.Kshirsagar               OR                              Mr. Kamlesh Mittal

Director-in-charge                                                     Director

A. F. Ferguson & Co.                                               A. F. Ferguson & Co.                      

11^th Floor, Express Towers                                     Hansalaya 4^th Floor, Barakhamba Road

Nariman Point,Mumbai 400 021                             New Delhi 110001

 

 

SUB: Expression of Interest (EoI)- Participating in the Disinvestment Process of HCL - Statement of Legal Capacity

 

 Sir,

 

We refer to the advertisement dated________of the Government of India (GOI)/Preliminary Information Memorandum (PIM) in connection with the proposed disinvestment of HCL.

 

We have read and understood the contents of the PIM and the advertisement and pursuant to this hereby confirm that:

 

We satisfy the eligibility criteria laid out in the PIM and the advertisement.*

 

We are a member of the consortium (constitution of which has been described in the Expression of Interest) which jointly satisfies the eligibility criteria as detailed in the PIM. *

 

We have agreed that (insert individual’s name) will act as our representatives on our behalf and has been duly authorized to submit the EoI. Further, the authorized signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the same.*

 

We have agreed that (insert the name of the individual) will act as representative of our consortium and on our behalf and has been duly authorized to submit the EoI.  Further, the authorized signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the same.*

 

 Yours faithfully,

 

Authorized Signatory

 

For and on behalf of

* strike off whichever is not applicable.

 

 ANNEXURE-IV

 

REQUEST FOR QUALIFICATION (“RFQ”)

 

(To be submitted in the respect of the interested parties/ each member of the consortium/ joint venture).

 

Name of the interested Party (ies)/Member (s) : ____________________

 Constitution (Tick, wherever applicable): Sector (Tick, wherever applicable):

 

 -Public Limited Company                                                        -     Public Sector

 

- Private Limited Company                                                         -    Joint Sector

 

- Co-op.Society                                                                           -     Private Sector

 

- Partnership                                                                              -                  Co-op Sector

 

-  Proprietary Concern/ Individual                                               -    Others

                           

 

-          Particulars of Ownership:

 

-          Nature of business/ Products dealt with:

 

-          Date of incorporation:

 

-          Date of commencement of business:

 

-          Full address including telephone Nos./Fax Nos. :

 

-          Registered Office:

 

-          Address for communication:

 

 Basis of eligibility for participating in the proposed disinvestment in HCL: (Please mention details of your eligibility as per the PIM requirements))

 

 (Please attach supporting documents including the latest Certified Provisional/ Audited/ Unaudited Statement of Accounts and Annual Reports for the last 3 years).

 

Contact Persons :

 

 

 

Yours faithfully,

 

Authorized Signatory

 

For and on behalf of

 

Place:

 

Date:

 

 

 

 

 

ANNEXURE-V

 

 

No. 6/4/2001-DD-II

Government of India

Department of Disinvestment

 

Block 14, CGO Complex

New Delhi.

Dated 13th July, 2001.

 

OFFICE MEMORANDUM

 

Subject: Guidelines for qualification of Bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment

 

 Government has examined the issue of framing comprehensive and transparent guidelines defining the criteria for bidders interested in PSE-disinvestment so that the parties selected through competitive bidding could inspire public confidence.  Earlier, criteria like net worth, experience etc. used to be prescribed.  Based on experience and in consultation with concerned departments, Government has decided to prescribe the following additional criteria for the qualification / disqualification of the parties seeking to acquire stakes in public sector enterprises through disinvestment:-

 

(a)   In regard to matters other than  the security and integrity of the country, any conviction by a Court of Law or indictment / adverse order by a regulatory authority that casts a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, or which relates to a grave offence would constitute disqualification.  Grave offence is defined to be of such a nature that it outrages the moral sense of the community.  The decision in regard to the nature of the offence would be taken on case to case basis after considering the facts of the case and relevant legal principles, by the Government.

 

(b)   In regard to matters relating to the security and integrity of the country, any charge-sheet by an agency of the Government / conviction by a Court of Law for an offence committed by the bidding party or by any sister concern of the bidding party would result in disqualification.  The decision in regard to the relationship between the sister concerns would be taken, based on the relevant facts and after examining whether the two concerns are substantially controlled by the same person/persons.

 

(c)  In both (a) and (b), disqualification shall continue for a period that Government deems appropriate.

 

 (d)   Any entity, which is disqualified from participating in the disinvestment process, would not be allowed to remain associated with it or get associated merely because it has preferred an appeal against the order based on which it has been disqualified.  The mere pendency of appeal will have no effect on the disqualification.

 

 (e)   The disqualification criteria would come into effect immediately and would apply to all bidders for various disinvestment transactions, which have not been completed as yet.

 

(f)     Before disqualifying a concern, a Show Cause Notice why it should not be disqualified would be issued to it and it would be given an opportunity to explain its position.

 

(g)   Henceforth, these criteria will be prescribed in the advertisements seeking Expression of Interest (EOI) from the interested parties. The interested parties would be required to provide the information on the above criteria, along with their Expressions of Interest (EOI).  The bidders shall be required to provide with their EOI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government.  For other criteria also, a similar undertaking shall be obtained along with EOI.

 

(A.K. Tewari)

 

Under Secretary to the Government of India.

 

NOTE:

The following would be treated as grave offence:

 

(i) Only those orders of SEBI are to be treated as coming under the category of “grave offences” which directly relate to “fraud” as defined in the SEBI Act and/or regulations.

 

(ii) Only those orders of SEBI that cast a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, are to be treated as adverse.

 

(iii) Any conviction by a Court of Law.

 

(iv) In cases in which SEBI also passes a prosecution order, disqualification of the bidder should arise only on conviction by the Court of Law.

 

 

 

GOVERNMENT OF INDIA

STRATEGIC SALE OF  98.95% SHAREHOLDING IN

HINDUSTAN COPPER LIMITED

 

This announcement is neither a prospectus nor an offer or Invitation for sale of securities to the public.

 

EXPRESSION OF INTEREST

 

Government of India (GoI) holding 98.95% of the Equity Share capital of Hindustan Copper Limited (HCL), wishes to disinvest its entire shareholding in HCL to a strategic investor with transfer of management control. A. F. Ferguson & Co. (AFF) has been appointed as Advisor to the GOI in connection with the proposed sale.

 

HCL established in 1967, is a schedule ‘A’ Central Public Sector Undertaking under the Department of Mines, Ministry of Coal and Mines. The company has a paid up Equity capital of Rs. 3629 million and Preference capital of Rs.1807 million as on March 31, 2001. HCL is the only vertically integrated copper producer in India engaged in a wide spectrum of activities ranging from Mining, Beneficiation, Smelting, Refining and Continuous Cast Rod manufacturing. It recorded a turnover of Rs. 9456 million for the 18 month period ended March 31, 2001. A package for major financial  and other restructuring of HCL is under consideration of the GoI.

The Expressions of Interest (EOIs) are invited to acquire 98.95% of the Equity share capital in HCL.

Interested Parties should submit their Expression of Interest (EOI) along with a Request for Qualification (RFQ) and Statement of Legal Capacity  in the prescribed format at any of the under-mentioned addresses, before 17.30 hours on  30.04.02

Detailed advertisement including prescribed format for EOI/ RFQ, pre-qualification requirements and more information pertaining to the Company can be accessed at www.divest.nic.in, www.nic.in/mines,  www.hindustancopper.com or www.afferguson.com

All queries related to the EOI may be addressed to the under-mentioned persons:  

Mr. E.A.Kshirsagar,Director-in-charge A. F. Ferguson & Co.              11th Floor, Express Towers Nariman Point,Mumbai 400 021 Tel : 0091-22-2022427 Fax : 0091-22-2022769 e-mail : affmum@vsnl.com

Mr. Kamlesh Mittal ,Director A. F. Ferguson & Co.              Hansalaya ,4th Floor,Barakhamba Road New Delhi 110001   Tel : 0091-11-3315256/5266/3543 Fax : 0091-11-3325437 e-mail : affcpdel@bol.net.in

 

The GOI reserve the right to withdraw from the process or any part thereof, to accept or reject any or all offers at any stage of the process and/or modify the process or any part thereof or to vary any terms at any time without assigning any reason whatsoever.  No financial obligation whatsoever shall accrue to GOI or AFF in such event.  Neither GOI nor AFF shall be responsible for non-receipt of correspondence sent by post/courier/e-mail/fax.

 

GOVERNMENT OF INDIA

STRATEGIC SALE OF 98.95% SHAREHOLDING IN

HINDUSTAN COPPER LIMITED

 

This announcement is neither a prospectus nor an offer or Invitation for sale of securities to the public.

 

EXPRESSION OF INTEREST

 

Government of India (GoI) holding 98.95% of the Equity Share capital of Hindustan Copper Limited (HCL), wishes to disinvest the same to a strategic investor with transfer of management control. A. F. Ferguson & Co. (AFF) has been appointed as Advisor to the GOI in connection with the proposed sale.

 

HCL is a schedule ‘A’ Central Public Sector Undertaking under the Department of Mines, Ministry of Coal and Mines. HCL is the only vertically integrated copper producer in India engaged in Mining, Beneficiation, Smelting, Refining and Continuous Cast Rod manufacturing.A package for major financial and other restructuring of HCL is under consideration of the GoI.

 

The Expressions of Interest (EOIs) are invited to acquire 98.95% of the Equity share capital in HCL The last date for receipt of EOI is by 17.30 hours on 30.04.2002. Detailed advertisement including prescribed formats for submitting the EOI, pre-qualification requirements and more information pertaining to the Company can be accessed at www.divest.nic.in, www.nic.in/mines,  www.hindustancopper.com or www.afferguson.com