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THE INSTITUTE OF MANAGEMENT CONSULTANTS OF INDIA 13 th National Convention

THE INSTITUTE OF MANAGEMENT CONSULTANTS OF INDIA 13 th National Convention. SME – Going Global. IFGL REFRACTORIES LIMITED. Kolkata. ABOUT THE GROUP. S K Bajoria Group headquartered in Kolkata

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THE INSTITUTE OF MANAGEMENT CONSULTANTS OF INDIA 13 th National Convention

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  1. THE INSTITUTE OF MANAGEMENT CONSULTANTS OF INDIA13th National Convention SME – Going Global

  2. IFGL REFRACTORIES LIMITED Kolkata

  3. ABOUT THE GROUP • S K Bajoria Group headquartered in Kolkata • IFGL Refractories Limited, the flagship company – engaged in manufacture of specialised refractories for the steel industry • Other interests include - Insurance & Reinsurance Broking, Third Party Administrator for health insurance for domestic as well as overseas and manufacture of Ceramic Eye ball, hip joint and dental powder.

  4. DATES OF INCORPORATION • Indo Flogates Ltd (INDO) : January 8, 1979 • IFGL Refractories Ltd (IFGL) : November 22, 1989 • INDO amalgamated with IFGL : April 1, 1999

  5. Erstwhile INDO FLOGATES LIMITED • Incorporated on January 8, 1979 • Jointly promoted by Flogates Limited of UK • Started manufacturing facilities with Slide Gate Refractories and systems for teeming of steel • Diversified its product base by adding new products – Furnace Gate Valve Systems & Refractories, Spray/Gunning Mass, Purging Refractories & Systems, and many others.

  6. IFGL REFRACTORIES LIMITED • Incorporated on November 22, 1989 • In technical collaboration Harima Corporation of Japan – which was subsequently merged with Krosaki Corporation to form Krosaki Harima Corporation • For manufacture of Continuous Casting Refractories and Tap hole sleeves used in the Steel industry – started manufacturing in February 1993 • Set up as Import substitute project when the duties were over 110%

  7. SHAREHOLDING PATTERN • Indian Promoters - S K Bajoria Group : 57.95% • Foreign Promoters - Nissho Iwai Corporation, Japan : 9.90% -Krosaki Harima Corporation, Japan : 4.57% • Others - Public : 27.58% No. of Equity Shares - 34610472 Face Value of Equity Shares - Rs.10/- Current Market Price - Rs.87/-

  8. RANGE OF PRODUCTS ISOSTATIC PRODUCTS • Ladle Shroud • Sub Entry Nozzle/Shroud • Monoblock Stoppers • Tundish Nozzle • Magnesia Carbon Taphole Sleeves FLOW CONTROL REFRACTORIES • Ladle Slide Gate Refractories - Plates, Nozzle & Well Block for the Flocon, Interstop and Krosaki System GAS PURGING REFRACTORIES • Purge Plug & Seating Block for the Ladle

  9. TECHNICAL TIE-UPS PRESENT • Krosaki Harima Corporation, Japan (subsidiary of Nippon Steel) • Central Glass and Ceramic Research Institute, Kolkata PAST • Flogates Limited (Vesuvius UK Ltd), UK • Magneco/Metrel Inc, USA • Feuerfest Siegburg,Germany

  10. Customs duty being reduced from over 110% to around 60% and then further around 50% Rupee devalued twice Export incentives announced and duty free imports allowed against exports Indian as well as Global recession in Steel New projects and expansions in steel industry deferred IFGL – EFFECT OF 90’S

  11. Started making losses Erosion of capital to the extent of 65% Huge interest burden on account of project loan – average interest cost of over 22% Interest – around 18% of turnover Default in repayments & interest payments to Financial Institutions IFGL – IMPACT

  12. Reduction of share capital to the extent of 65% - to wipe off the loss Avoided being referred or going to BIFR Promoters bringing further capital to the extent of Rs.10 crores Funds utilised to repay the overdue principal and interest due to FIs Some portion of interest funded to Equity and Debentures IFGL – RESTRUCTURING

  13. Major operational restructuring and cost cutting exercise undertaken VRS for employees Made small profits till 2002 though the turnover remained more or less at same levels. Improved working capital management Repaid all the loans and became debt free by 31/3/2001 Merged INDO FLOGATES LIMITED – a profit making company – tax advantages of carried forward loss OPERATIONS AFTER RESTRUCTURING

  14. Turnover increased by 63% in 2003, 25% in 2004 and 21% in 2005 Less than 5% exports in 2000 Over 65% exports in 2006 Improved cash flows – interest cost less than 1% of turnover Debt Free IFGL – GROWTH PHASE

  15. Over 65% exports Customers in over 35 countries Agent network in over 25 countries Relationship with Mittal Steel Strong service team to support application of products IFGL – AREA OF OPERATION

  16. MONOCON - a UK headquartered company with manufacturing facilities in five countries – UK, USA, Brazil, China and Taiwan A cash generating company Ernst & Young, representing the seller approached us with this offer Financial DD done by PWC ICICI Bank UK – support for financing the acquisition Acquired on September 10, 2005 MONOCON - OPPORTUNITY

  17. Both serve the steel industry Monocon Products – complimentary to IFGL products IFGL exports in over 35 countries. Monocon exports in over 55 countries Monocon – strong presence in UK, USA, South-east Asia IFGL strengths in India, South Africa, Iran, Turkey IFGL’s strength in Mittal Steel SYNERGIES

  18. First Indian refractory company to acquire abroad Truly a Global player – with six manufacturing bases Exploring China a little more – additional manufacturing facilities to take advantage of raw material and cheap resources Operational restructuring SCENARIO-POST ACQUISITION

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