MIRA INFORM REPORT
|
Report Date : |
13TH June 2006 |
IDENTIFICATION DETAILS
|
Name : |
AMARA
RAJA BATTERIES LIMITED |
|
|
|
|
Registered Office : |
Renigunta – Cuddapah Road,
Karakambadi, Tirupati – 571 520, Andhra Pradesh, India |
|
|
|
|
Country : |
India
|
|
|
|
|
Financials (as on) : |
31.03.2005 |
|
|
|
|
Date of Incorporation : |
13.02.1985 |
|
|
|
|
Com. Reg. No.: |
01-15305 |
|
|
|
|
CIN No.: [Company Identification No.] |
L31402AP1985PLC005305 |
|
|
|
|
TAN No.: (Tax Deduction & Collection
Account No.) |
HYDA02631G |
|
|
|
|
Legal Form : |
Subject
is a Public Limited Liability Company. The company's shares are listed on the
Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturer
of industrial and automotive batteries |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial &
operational base are regarded healthy. General unfavourable factors will not
cause fatal effect. Satisfactory capability for payment of interest and
principal sums |
Fairly Large |
|
Maximum Credit Limit : |
USD 7250000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject
is a well established company having fine track. Trade relations are fair.
Financial position is good. Payments are reported as correct and as per
commitments. The company is doing well. It can be considered good for any
normal business dealings at usual trade terms and conditions. |
LOCATIONS
|
Registered Office : |
Renigunta – Cuddapah Road,
Karakambadi - 571 520, Tirupati, Andhra Pradesh, India |
|
Tel. No.: |
91-8574-275561-65 |
|
Fax No.: |
91–8574-285600/275360/285599 |
|
E-Mail : |
|
|
|
|
|
Factory 1 : |
Renigunta
– Cuddapah Road, Karakambadi - 571 520, Tirupati, Andhra Pradesh, India |
|
Tel. No.: |
91
- 8574 - 275561-65 |
|
Fax No.: |
91
- 8574 - 285600 / 275360 / 285599 |
|
E-Mail : |
|
|
|
|
|
Branches : |
Located at: CENTRAL
MARKETING OFFICE & CENTRAL CUSTOMER SUPPORT CENTRE
Begumpet High Road,
Hyderabad - 500 016, Andhra Pradesh Telephone No : 91 - 40 -
2776 3353 Fax No : 91 - 40 - 2776 3354 E Mail : cmo.amararaja@gnhyd.globalnet.ems.vsnl.net.in OTHER
MARKETING OFFICES & CUSTOMER SUPPORT CENTRES
Bangalore : No. 85, 5th
Main, 1st Cross, Domlur, II Stage, Bangalore - 560 071, Karnataka Telephone No : 91 - 80 -
2529 6116 / 2529 6395 Fax No : 91 - 80 - 25276899 E Mail : blr.amararaja@gnblr.globalnet.ems.vsnl.net.in Calcutta : 116 B, 2nd
Floor, Ujjala Cinema Building, S P Mukherjee Road, Kolkata - 700 026, West
Bengal Telephone No : 91 - 33 -
2455 3422 / 2455 5641 Fax No : 91 - 33 - 2455 3422 E Mail : cal.amaraja@gncal.globalnet.ems.vsnl.net.in
Chennai : 8th Floor, Wing B,
Gemini Parsn Manere, 602, Mount Road, Chennai - 600 006, Tamilnadu Telephone No : 91 - 44 -
2823 5523 / 2822 5910 Fax No : 91 - 44 - 2825 3606 E Mail : mds.amararaja@gnmds.globalnet.ems.vsnl.net.in Hyderabad : Suite No 203, 2nd
Floor, L B Bhavan, 6-3-550, Somajiguda, Hyderabad - 500 082, Andhra Pradesh Telephone No : 91 - 40 –
2332 8688 Fax No : 91 - 40 – 2332 8688 E Mail : cmo.amararaja@gnhyd.globalnet.ems.vsnl.net.in Mumbai : 11, Happy Home, CHS, Nehru
Road, Vile Parle (E), Mumbai - 400 057, Maharashtra Telephone No : 91 - 22 -
2619 1129 /2610 2452 Fax No : 91 - 22 - 2616 1841 E Mail : bom.amararaja@gnbom.globalnet.ems.vsnl.net.in New Delhi : 1st Floor,
A-1/263, Safdarjung Enclave, New Delhi - 110 029 Telephone No : 91 - 11 -
2617 6184 / 2617 7379 Fax No : 91 - 11 – 2618 6128 E Mail : del.amararaja@gndel.globalnet.ems.vsnl.net.in |
DIRECTORS
|
Name : |
Mr. Ramachandra N. Galla |
|
Designation : |
Executive Chairman |
|
|
|
|
Name : |
Mr. Jayadev Galla |
|
Designation : |
Managing
Director |
|
|
|
|
Name : |
Mr. Mark L. Kochzela |
|
Designation : |
Alternate
Director of Ms. Manjula Chawla |
|
|
|
|
Name : |
Dr. Upendranath Nimmagadda |
|
Designation : |
Alternate
Director of Mr. V R Rao |
|
|
|
|
Name : |
Ms. Amara Kumari Galla |
|
Designation : |
Director
|
|
|
|
|
Name : |
Mr. P. Lakshmana Rao |
|
Designation : |
Director
|
|
|
|
|
Name : |
Mr. Raymond J. Brown |
|
Designation : |
Director
|
|
|
|
|
Name : |
Mr. John P. Kennedy |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. John D Major |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ravi Bhamidipati |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr.
Gopalan Mahadevan |
|
Designation : |
Chief
Financial Officer |
|
|
|
|
Name : |
Mr.
K Ramakrishna |
|
Designation : |
Company
Secretary |
MAJOR SHAREHOLDERS
|
Names of Shareholders |
No. of Shares |
Percentage of Holding |
|
|
|
|
|
Promoters |
2960747 |
26.00 |
|
Foreign Promoters |
2960750 |
26.00 |
|
Mutual Funds |
211988 |
1.86 |
|
Fls/Banks |
310971 |
2.73 |
|
Flls/NRIs |
980707 |
8.61 |
|
Domestic Companies |
592452 |
5.21 |
|
Public |
3326385 |
29.21 |
|
NSDL |
39968 |
0.35 |
|
CDSL |
3532 |
0.03 |
|
Total |
11387500 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer
of industrial and automotive batteries |
||||||
|
|
|
||||||
|
Products : |
|
||||||
|
|
|
||||||
|
Exports to : |
South
East Asia, Middle East, Europe and USA. |
||||||
|
|
|
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
|
|
|
|
|
|
Storage Batteries |
Nos. |
NA |
1775000 |
1230974 |
GENERAL INFORMATION
|
Customers : |
Some of its major customers
are as under : +
Mahindra Ford +
Mercedes Benz +
General Motors (Opel) +
Ashok Leyland Cargo +
Mahindra &
Mahindra (Bolero) |
|||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
No. of Employees : |
Around
1300 |
|||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Bankers : |
+
State Bank of India, Settipalle,
Tirupati, Andhra Pradesh +
Andhra Bank, Main
Branch, Tirupati, Andhra Pradesh +
State Bank of
Hyderabad, Main Branch, Tirupati, Andhra Pradesh |
|||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
|
Facilities : |
(Figures are in Rupees Millions)
|
|
|
|
|
Banking Relations : |
Good
|
|
|
|
|
Auditors : |
˛
E. Phalguna Kumar
& Company Chartered Accountants Tirupati, Andhra Pradesh ˛
Chevuturi Associates Chartered Accountants Vijayawada, Andhra Pradesh |
|
|
|
|
Cost Auditors : |
˛
P Parankusam and
Company Hyderabad, Andhra Pradesh, India |
|
|
|
|
Sister Concerns : |
˛
Harsha Electronics
Private Limited ˛
Mangal Electro Systems
Private Limited ˛
Amara Raja Electronics
Private Limited ˛
Johnson Controls India
Private Limited ˛
Johnson Controls
Singapore Pte. Limited ˛
Enertech Do Brasil
Limited ˛
Varta Auto Batteries ˛
Amara Raja Power
Systems Limited ˛
Mangal Precision
Products Private Limited ˛
Johnson Controls
Mauritius Private Limited, Mauritius |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1,50,00,000 |
Equity Shares |
Rs. 10/- |
Rs 150.000 millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1,18,09,100 |
Equity Shares |
Rs. 10/- |
Rs. 118.091 millions |
Subscribed &
Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1,13,87,500 |
Equity Shares |
Rs. 10/- |
Rs. 113.875 millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
113.875 |
113.875 |
113.875 |
|
2] Reserves & Surplus |
1692.973 |
1632.042 |
1637.414 |
NETWORTH
|
1806.848 |
1745.917 |
1751.289 |
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
73.666 |
44.945 |
10.699 |
|
2] Unsecured Loans |
159.393 |
103.853 |
86.669 |
TOTAL
BORROWING
|
233.059 |
148.798 |
97.368 |
|
DEFERRED TAX LIABILITIES |
130.927 |
145.000 |
175.473 |
|
|
|
|
|
TOTAL
|
2170.834 |
2039.715 |
2024.130 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
948.631 |
991.886 |
1044.776 |
|
Capital work-in-progress |
12.892 |
9.514 |
42.344 |
|
|
|
|
|
|
INVESTMENTS |
235.627 |
208.778 |
131.573 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS &
ADVANCES |
|
|
|
|
Inventories |
440.959 |
307.245 |
294.213 |
|
Sundry Debtors |
649.706 |
471.674 |
455.719 |
|
Cash & Bank Balances |
169.122 |
152.292 |
153.032 |
|
Other Current Assets |
9.926 |
7.623 |
5.821 |
|
Loans & Advances |
342.929 |
251.403 |
318.377 |
|
Total Current Assets |
1612.642 |
1190.237 |
1227.162 |
Less: CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
Current Liabilities |
345.043 |
162.283 |
222.071 |
Provisions
|
293.915 |
198.417 |
301.841 |
Total Current Liabilities
|
638.958 |
360.700 |
523.912 |
|
Net
Current Assets |
973.684 |
829.537 |
703.250 |
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
102.187 |
|
|
|
|
|
TOTAL
|
2170.834 |
2039.715 |
2024.130 |
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
Sales Turnover [including other income]
|
2502.116 |
1811.720 |
2026.517 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
135.811 |
11.519 |
117.338 |
Provision for Taxation
|
48.911 |
(2.379) |
43.331 |
Profit/(Loss) After Tax
|
86.900 |
13.898 |
74.007 |
|
|
|
|
|
Export Value
|
145.750 |
110.800 |
NA |
|
|
|
|
|
Import Value
|
865.240 |
484.470 |
540.960 |
|
|
|
|
|
Total Expenditure
|
2366.305 |
1800.200 |
1909.176 |
QUARTERLY
RESULTS
|
PARTICULARS |
31.12.2005 |
30.09.2005 |
30.06.2005 |
Type
|
3rd Qtr |
2nd Qtr |
1st Qtr |
|
Sales Turnover |
977.700 |
870.700 |
672.300 |
|
Other Income |
17.200 |
15.900 |
11.900 |
|
Total Income |
994.900 |
886.600 |
684.200 |
|
Total Expenditure |
840.400 |
771.200 |
607.200 |
|
Operating Profit |
154.500 |
115.400 |
77.000 |
|
Interest |
3.200 |
1.800 |
1.100 |
|
Gross Profit |
151.300 |
113.600 |
75.900 |
|
Depreciation |
47.900 |
32.100 |
31.500 |
|
Tax |
39.600 |
37.300 |
13.300 |
|
Reported PAT |
68.700 |
45.800 |
32.100 |
200506 Quarter 1 :-- Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (18.74)
million Consumption of Raw Materials Rs 443.46 million Staff Cost Rs 53.04
million Other Expenditure Rs 129.47 million Tax Includes Provision for Current
- Income Tax Rs 11.50 million Deferred Tax Rs (0.99) million Fringe Benefit Tax
Rs 1.79 million Status of Investor Complaints for the quarter ended June 30,
2005 Complaints Pending at the beginning of the quarter 02 Complaints Received
during the quarter 07 Complaints disposed off during the quarter 09 Complaints
unresolved at the end of the quarter Nil 1. In accordance with the provisions
of Accounting Standard 17, the Company has one reportable segment consisting of
Lead Acid Storage Batteries. 2. The above unaudited Financial Results were
approved and taken on record by the Board of Directors at their meeting held on
July 26, 2005.
200509 Quarter 2 :-- Status of Investors complaints for the quarter ended September 30,
2005. Complaints pending at the begining of the quarter Nil Complaints rceived durring
the quarter 05 Complaints disposed off durring the quarter 04 Complaints
unresolved durring the quarter 01 1. The above unaudited Financial results were
approved and taken on record by the Board of Diarectors at their meeting held
on October 27, 2005. 2. In accordance with the provisions of Accounting 17, the
company has reportable segment consisting of lead Acid Storage Batteries.
200512 Quarter 3 :-- Expenditure Includes (Increase) / Decrease in Stock in Trade Rs 0.12
million Consumption of Raw Materials Rs 563.73 million Staff Cost Rs 53.29
million Other Expenditure Rs 223.29 million Tax Includes Provision for Current
- Income Tax Rs 37.98 million Deferred Tax Rs (4.86) million Fringe Benefit Tax
Rs 1.60 million Status of Investor Complaints for the quarter ended December
31, 2005 Complaints Pending at the beginning of the quarter 01 Complaints
Received during the quarter 04 Complaints disposed off during the quarter 05
Complaints unresolved at the end of the quarter Nil 1. In accordance with the
provisions of Accounting Standard 17, the Company has one reportable segment
consisting of Lead Acid Storage Batteries. 2. Depreciation is provided in
accordance with the rates and rules prescribed under Schedule XIV to the
Companies Act 1956 under straight line method. During the current quarter, the
Company reviewed the useful life of certain assets and has consequently adopted
higher rates of depreciation. Consequent on such revision, the depreciation
provided during the quarter is higher by Rs 12.626 mm. 3. The above Unaudited
Financial Results were approved and taken on record by the Board of Directors
at their meeting held on January 25, 2006.
KEY RATIOS
|
PARTICULARS |
31.03.2005 |
31.03.2004 |
31.03.2003 |
|
Debt Equity Ratio |
0.11 |
0.07 |
0.07 |
|
Long Term Debt Equity Ratio |
0.07 |
0.05 |
0.05 |
|
Current Ratio |
1.99 |
1.91 |
1.65 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.65 |
1.29 |
1.36 |
|
Inventory |
7.18 |
6.65 |
6.66 |
|
Debtors |
4.79 |
4.31 |
4.36 |
|
Interest Cover Ratio |
97.93 |
7.33 |
31.84 |
|
Operating Profit Margin (%) |
10.18 |
6.82 |
11.98 |
|
Profit Before Interest and
Tax Margin (%) |
5.11 |
0.66 |
6.09 |
|
Cash Profit Margin (%) |
8.31 |
6.85 |
9.61 |
|
Adjusted Net Profit Margin
(%) |
3.24 |
0.70 |
3.72 |
|
Return on Capital Employed
(%) |
6.97 |
0.73 |
6.98 |
|
Return on Net Worth (%) |
4.89 |
0.79 |
4.29 |
STOCK PRICES
|
Face
Value |
Rs.
10/- |
|
High |
Rs.
278.000 |
|
Low |
Rs.
263.250 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject was incorporated on
13th February 1985 at Tirupati in Andhra Pradesh having Company
Registration No. 15305.
Mr. Ramchandra Galla promoted subject in 1985 as a
private limited company. It went public in 1991 and commenced the manufacture of
Valve Regulated Lead Acid batteries for the first time in India in
collaboration with GNB Industrial Battery Co, USA. Currently, subject is the
leading producer of VRLA batteries in India. It has entered the automotive
segment with help from its collaborator-Johnson Controls of USA. The latter
recently has taken 23% stake in the company. With this, the company is eyeing
on the future growth in this segment.
It was promoted by R N Galla,
an NRI and A Galla and associates to set up a plant for the manufacture of
sealed maintainence-free lead-acid stationary batteries for industrial
applications with an installed capacity of 0.100 million per annum. To part-finance this project, the company
went public in January, 1991.
The company entered into a technical
collaboration with GNB, USA, for technical know-how and other related
services. Commercial production started
in May 1992. The products are marketed under the brand Power Stack and Power
Plus. Power Stack, with a capacity in the range of 120-4000 AH is engineered to
withstand widely varying environmental conditions. It is mostly used in main
exchanges, EPABXs, rural automatic exchanges, cellular radios, and satellite
communication systems. Power Plus with a capacity between 50 AH and 250 AH are
ideally suited for uses requiring high discharge currents for a short duration,
telecommunications, switchgear operations in sub-stations, photo-voltaic,
railway and speciality applications. The technology has been fully absorbed and
many critical components have been indigenised.
In 1996-97, it received the
ISO 9001 certification from RWTUV, Germany and products obtaining UL
recognition for safety of operation from Underwriters Laboratory, USA.
The company has branched out to the automotive battery segment with its Amaron
brand. It is sourcing technology for Amaron from its partner, Johnson Controls
Inc, which holds 26% equity stake in Amara Raja Batteries.
The company has plans to
increase its presence in the south Asian region and has set up a new plant in
Tirupathi. The first phase of expansion, on which Rs. 450 millions have been
spent, is now almost over and the second phase is expected to be completed by
2005.
To better exploit the
opportunity in the UPS segment, the company has planned up gradation of the
Kombat monobloc range and a further expansion of the product range to cater to
the entire range of mid-size UPS equipment.
During
2001-02 the company introduced Genpro and Brute range of VRLA Batteries for DG
set starting and Traction Applications.
Results of Operations
Gross Sales for the
financial year 2004-05 was Rs. 2685.4 million (previous year Rs. 1999.2
million) representing a growth of 34% over the previous year. Profit After Tax
for the year was Rs. 86.9 million (previous year Rs. 13.9 million). During the
financial year both Industrial and Automotive Battery volumes grew
significantly.
Industrial Batteries - Domestic
In the Telecom Sector,
there was increased demand for VRLA batteries from both Private and Public
Sector Telecom companies. The Telecom industry continued to witness a high
growth rate in subscribers, which necessitated fresh investments by the Telecom
companies in capacity and network expansion. Battery prices in the Telecom
segment, which had been showing a declining trend over the years, had
stabilized, though continuing to be at low levels. The Railways business
continued to be stable with the Company retaining its position as preferred
supplier.
Sales of 'Quanta™ UPS
batteries' were robust riding on the back of increased demand. The Company had
further expanded its channel network for Quanta™ during the year and added new
UPS customers. The efforts of our Manufacturers' Representatives as also our
Channel Partners have helped in penetrating the market.
The Company's overall
Domestic Industrial Battery volume grew by 48%.
Automotive Batteries – Domestic
Domestic Automotive Battery
volumes registered a strong growth over the previous year. The Company
witnessed strong demand for its products both in OE and After Market segments.
During the year, the Company
entered into an OE relationship with India's largest passenger car manufacturer
- Maruti Udyog Limited. This is expected to add significant volumes to the
Company's future OE business. Current OE relationships were further expanded
with supplies to General Motors - 'Chevrolet-Tavera', Ford India - 'Fusion',
Mahindra & Mahindra - 'Champion' (3 wheeler) and Force Motors.
In Aftermarket, the Company expanded
its Amaron range by introducing a premium four-year warranty product - 'Amaron
Pro'. The Company also introduced factory charged batteries under the product
names 'Go' and 'Fresh' for the three-wheeler and taxi segments. Through this
strategy, the Company has further addressed the requirements of customers
across the spectrum. The expansion of the Amaron suite of products is expected
to yield benefits in the immediate future, as the response from both trade and
customers has been very positive. Investments were made in the retail network
to further expand the depth and reach for the Company's products. During
2004-05, the Company increased its number of PitStops from 40 to 66 and the
number of active retailers from 8000 to 9000. Innovative on-the-ground
promotions and programmes helped1 reach out to new customers and enhance brand
recall. Persistent efforts of the Company's over 100 strong franchisee network
helped in extending the reach to the retailers.
The Amaron™ Brand is today
well recognised across India. The new commercial released last year has
received a very positive response. The Company has also been promoting the
brand through a number of innovative programmes. "Amaragaon" is one
such programme where the Company is working with a recognised NGO for promoting
information kiosks in remote villages to bridge the "Digital Divide".
These kiosks serve as information and contact points for farmers, students and
local businessmen which help the local population get acquainted with technology,
internet and serve to provide them information on farming, weather and other
pertinent topics. This effort should help the Company in gaining the confidence
and mind space of the local population - especially in a market where direct
penetration is very challenging.
The Amaron™ team is also
working closely with trucking companies helping fleet owners understand how
they could maintain the electricals of their vehicles better. This
"touch" helps in forging deeper relationships with fleet operators
which should, in the long run, benefit both the Company as well as the fleet
operators.
Exports
The Company's export turnover
grew 30% over the previous year. Automotive Battery volumes registered a high
rate of growth. The Company's products rate with the best in the world in terms
of performance and technology and are fast gaining the acceptance and
confidence of customers in the markets penetrated. During 2004-05, the Company
exported its Automotive Batteries to Japan, Singapore, Australia, Taiwan,
Philippines, DAE, Kuwait, Greece and China. The Company believes it would need
to invest in expanding its export markets further as this would help in
reaching critical size.
Exports at Rs. 138.8 million
for FY 2004-05 registered a 30% growth over the previous year.
Automotive Batteries were exported to a number of countries including Japan,
Singapore, Australia, Taiwan, UAE, Greece and China.
The Company continues its focus on developing export markets for its Industrial
Batteries as it holds very good potential.
Expansion in Automotive Capacity
The Board of Directors has
approved the expansion of Company's Automotive (Monobloc) Battery capacity from
1.5 million units per annum to 2.4 million units per annum. The estimated
outlay towards this expansion would be Rs. 388 million. The Company plans to
fund the expansion through
internal accruals. The expansion is expected to be completed by end of December
2005.
Duties, taxes and Lead Prices
In the recent Union Budget,
the Government addressed the representation made by the Indian Battery Industry
for reducing duties on Lead and Battery parts. Thus the duty on Lead was
reduced from 15% to 5%. The duty on finished batteries was also reduced from
20% to 15%. While this has provided the much needed succour to Indian Battery
Industry, Lead Prices continued to be firm and were at levels of $ 10007 MT -
which is 220% of the prices of $ 450/MT in March 2003. High Lead prices would
continue to be a challenge to the profitability of the battery industry. There
has been a softening of Lead prices very recently but it would need to be seen
whether this positive development would be sustained.
Profitability
Gross Sales for the financial
year 2004-05 was Rs. 2685.4 million as against Rs. 1999.2 million in the
previous year, representing a growth of 34% over the previous year. Profit
After Tax for the year was Rs. 86.9 million as against Rs. 13.90 million in the
previous year. With the continued tight situation of Lead - the principal raw
material - in the International market and the consequent high Lead prices,
margins continue to be under pressure. The Company has been continuously
working on driving down product costs and increasing operational efficiency as
measures to improve profitability.
Future Outlook
We believe that in the medium
term, the Company would witness growth in both Industrial and Automotive
businesses. The Company is currently investing in increasing its Automotive
Battery capacity and growing its market share - all of which would require
capital and
revenue spends.
As per forecasts and
announcements made by the Government of India, the country is set to witness
tremendous growth in Telecom. The Government is targeting to have 250 million
telecom subscribers by 2007 from current levels of around 100 million. This
would call for significant investments by the Telecom industry and consequently
result in increased demand for batteries. The setting-in of the replacement
market in the future should result in further demand. With the growth in
Banking, IT Services and IT Enabled Services sectors, demand for UPS batteries
is expected to increase. The Indian Battery Industry has represented to the
Government to provide indirect tax concessions on supplies made to UPS
Manufacturers who sell the UPS for end use in IT services industry. This would
help match the zero duty concession given to batteries imported for UPS
applications for IT Industry.
The Company's Automotive
Battery volumes are expected to grow in the coming years, fuelled by increased
OE demand and higher volumes from the After Market segment. The Company has
been entering into new OE relationships, the benefits of which would be felt in
the coming years. The Aftermarket programmes of the Company coupled with
investments in the brand and sales promotion should fuel the growth in this
business. Exports would continue to play a significant role in the Company's
future growth. The Company is trying to deepen and widen its
presence in the export
markets.
The company is in trade terms
with :
+
Krishnaswani Chemicals
+
Krishwin Pure Acids
+
Naths Acids
Subject is engaged in
manufacturing of VRLA (Industrial Batteries) and SLI (Auto Batteries).
Subject
is a leading manufacturer of industrial and automotive batteries in India.
The company has technical
collaboration with Johnson Controls Inc., USA.
New markets are also being
developed in Japan and Europe, leveraging JCI relationship.
It is the pioneer and market
leader in VRLA batteries and commands more than 60% market share in the
segment. The company has technical
collaboration with GNB Technologies, UK.
The company is also exploring
new application areas such as security services, genset starting, motive power
and solar energy.
The company is also planning
to focus on increasing exports of both automotive and industrial products as
with increased capacities for manufacture products that meet global standards
and a competitive cost structure.
The company's fixed assets of
important value include Land & Land Development, Buildings, R&D
Buildings, Plant & Machinery, R&D Plant & Machinery, Electrical
Installations, Furniture, Office Equipment and Vehicles.
CMT REPORT [Corruption, Money laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the
subject of any formal or informal allegations, prosecutions or other official
proceeding for making any prohibited payments or other improper payments to
government officials for engaging in prohibited transactions or with designated
parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.
8] Affiliation
with Government :
No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.
9] Compensation
Package :
Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.
10] Press Report :
No press reports / filings exists on the subject.
CORPORATE
GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions that
could be included in the agreement with the subject.
FOREIGN
EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs. 45.98 |
|
UK
Pound |
1 |
Rs. 84.54 |
|
Euro |
1 |
Rs. 57.82 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves
as a reference to assess SC’s credit risk and to set the amount of credit to be
extended. It is calculated from a composite of weighted scores obtained from
each of the major sections of this report. The assessed factors and their
relative weights (as indicated through %) are as follows:
Financial condition (40%) Ownership background (20%) Payment record (10%)
Credit history (10%) Market trend (10%) Operational
size (10%)
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely
sound financial base with the strongest capability for timely payment of
interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate
working capital. No caution needed for credit transaction. It has above average
(strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial &
operational base are regarded healthy. General unfavourable factors will not
cause fatal effect. Satisfactory capability for payment of interest and principal
sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is
considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable &
favourable factors carry similar weight in credit consideration. Capability to
overcome financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are
apparent. Repayment of interest and principal sums in default or expected to
be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk
exists. Caution needed to be exercised |
Credit not recommended |