MIRA INFORM REPORT
|
Report
Date : |
19th
June, 2006. |
IDENTIFICATION
DETAILS
|
Name : |
MRF
LIMITED |
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Registered
Office : |
124
Greams Road, Chennai – 600 006, Tamilnadu, India |
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Country
: |
India |
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Financials
(as on) : |
30.09.2005 |
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Date
of Incorporation : |
05.11.1960 |
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Com.
Reg. No.: |
18-4306 |
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TAN
No.: [Tax
Deduction & Collection Account No.] |
CHEM07088E |
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PAN
No.: [Permanent
Account No.] |
AAACM4154G |
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Legal
Form : |
A Public Limited Liability company. The company’s shares are listed on the Stock Exchanges. |
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Line
of Business : |
Manufacturing and Marketing of automobile tyres,
automobile tubes, tread rubber, pre cured treads, bicycle tyres, bicycle
tubes, rubberised tank tyres & boggie wheels, conveyor belting and
speciality surface coatings. |
RATING & COMMENTS
|
MIRA’s
Rating : |
Aa |
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
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Maximum
Credit Limit : |
USD
30000000 |
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Status
: |
Good |
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Payment
Behaviour : |
Regular |
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Litigation
: |
Clear |
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Comments
: |
Subject is a well-established, reputed and respectable
company having fine track. Available information indicates high financial
responsibility of the company and its’ directors. Fundamentals are strong and
healthy. Market reputation is favourable. The company is progressing
exceedingly well. Its’ payments are always correct and as per commitments. The company can be considered good for any normal business
dealings. |
LOCATIONS
|
Registered
Office : |
124
Greams Road, Chennai – 600 006, Tamilnadu, India |
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Tel.
No.: |
91-44-28292777 |
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Fax
No.: |
91-44-28295087/28294089 |
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E-Mail
: |
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Website
: |
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Overseas Office : |
v
P.O. Box 626871, Al Maktoum Hospital
Road, Deira, Dubai, UAE Tel. 91-04-2239657 Fax. 91-04-2239660 E-mail. mrfdubai@emirates.net.ae Contact Person - Biju Abraham
Thomas, General v
1764, Calvert Drive, Cuyahoga Falls,
OHIO 44223 USA Tel. 91-001-330-9291594 Res. 91-001-330-9283096 Fax. 91-001-330-9290306 E-mail. jkillian@neo.rr.com |
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Factory
1 : |
v
Tiruvottiyur,
Chennai, Tamilnadu, India v
Vadavathoor,
Kottayam Kerala, India v
Usgao,
Ponda, Goa, India v
Icchiputhur,
Arakonam, Tamilnadu, India v
Sadasivapet,
Medak, Andhra Pradesh, India v
Eripakkam
Village, Nettapakkam Commune, Pondicherry, India v
Sipcot
Industrial Complex, Gummidipoondi, Tamilnadu, India |
DIRECTORS
|
Name : |
Mr. K. M.
Mammen |
|
Designation
: |
Chairman & Managing Director |
|
Age: |
53 Years |
|
Qualification
: |
B. A. |
|
Experience
: |
29 Years |
|
Date
of Joining : |
01.06.1985 |
|
Previous
Employment : |
Devon Machines (Private) Limited |
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|
|
|
Name : |
Mr. Arun
Mammen |
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Designation
: |
Joint Managing Director |
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|
Name : |
Mr. K. M.
Philip |
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Designation
: |
Whole-time Director |
|
Age : |
65 Years |
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Qualification
: |
B.A. |
|
Experience
: |
44 Years |
|
Date
of Joining : |
05.11.1960 |
|
|
|
|
Name : |
Dr. K. C.
Mammen |
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Designation
: |
Director |
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|
Name : |
Mr. K. D.
Parakh |
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Designation
: |
Director |
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|
Name : |
Mr. Ashok
Jacob |
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Designation
: |
Director |
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Name : |
Mr. S.
Nandagopal |
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Designation
: |
Director |
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Name : |
Mr. V.
Sridhar |
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Designation
: |
Director |
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|
Name : |
Mr. Vijay
R. Kirloskar |
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Designation
: |
Director |
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Name : |
Mr. N. Kumar |
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Designation
: |
Director |
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Name : |
Mr.
Ranjit I. Jesudasen |
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Designation
: |
Director |
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Other
Personal |
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|
Name : |
Mr. D. M.
Choksi |
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Designation
: |
Company Secretary |
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|
Name : |
Mr. Ravi Mannath |
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Designation
: |
Additional Company Secretary |
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Name : |
Mr.
Kurian and Kurian |
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Designation
: |
Legal Advisors |
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BUSINESS DETAILS
|
Line
of Business : |
Manufacturing and Marketing of automobile tyres,
automobile tubes, tread rubber, pre cured treads, bicycle tyres, bicycle
tubes, rubberised tank tyres & boggie wheels, conveyor belting and
speciality surface coatings. |
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Products
: |
Item Code No. (ITC
Code) 4011 Product Description New
Pneumatic Tyres of Rubber Item Code No. (ITC Code) 4013 Product Description Inner
Tubes of Rubber Item Code No. (ITC Code) 401290.04 Product Description Tyre
Flaps Item Code No. (ITC
Code) 400610.00 Product Description Camel Black Strips
for Retreading Rubber |
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Imports
from : |
Europe and Far East |
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Terms
: |
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Purchasing : |
L/C and Credit terms |
PRODUCTION STATUS
|
PARTICULARS |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Automobile Tyres |
Nos. |
@ |
19772000 |
17596948 |
|
Automobile Tubes |
Nos. |
@ |
18600000 |
16052918 |
|
Tread Rubber |
MT |
7,946 |
8,943 |
1548 |
|
Pre-cured Treads |
MT |
@ |
24,000 |
5971 |
|
Bicycle Tyres |
Nos. |
20,00,000 |
20,00,000 |
-- |
|
Bicycle Tubes |
Nos. |
20,00,000 |
20,00,000 |
-- |
|
Rubberised Tank Tyres & Boggie
Wheels |
Nos. |
15,000 |
15,000 |
-- |
|
Conveyor Belting |
MT |
@ |
3,000 |
2778 |
|
Specialty Surface Coatings |
KL |
@ |
2,000 |
2114 |
GENERAL INFORMATION
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No. of
Employees : |
8077 |
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Bankers
: |
v
State
Bank of India v Chennai, Tamilnadu, India |
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Facilities : |
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Banking Relations : |
Satisfactory |
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Auditors
: |
v
Sastri
& Shah Chartered Accountants Chennai, Tamilnadu v
M.
M. Nissim & Company Chartered Accountants Mumbai,
Maharashtra |
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Associate
: |
v
Tiruvottiyur,
Chennai, Tamilnadu, India v
Vadavathoor,
Kottayam Kerala, India v
Usgao,
Ponda, Goa, India v
Icchiputhur,
Arakonam, Tamilnadu, India v
Sadasivapet,
Medak, Andhra Pradesh, India v
Eripakkam
Village, Nettapakkam Commune, Pondicherry, India v Sipcot Industrial Complex,
Gummidipoondi, Tamilnadu, India |
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Subsidiaries: |
v
Funskool
(India) Limited v
MRF
Corporation Limited v
MRF
International Limited |
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Membership
: |
v
Confederation
of Indian Industry |
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
9000000 |
Equity Shares |
Rs.10/-
each |
Rs. 90.000 millions |
|
100000 |
Taxable Redeemable Cumulative Preference Shares |
Rs.100/-
each |
Rs. 10.000 millions |
|
GRAND TOTAL |
|
|
Rs.100.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of
Shares |
Type |
Value |
Amount |
|
4241143 |
Equity Shares |
Rs.10/- each |
Rs.42.400 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
30.09.2005 |
30.09.2004 |
30.09.2003 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
42.400 |
42.400 |
42.400 |
|
2] Reserves & Surplus |
7498.100 |
7191.700 |
6999.600 |
|
NET WORHT |
7540.500 |
7234.100 |
7042.000 |
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
2995.700 |
1663.200 |
1917.300 |
|
2] Unsecured Loans |
4103.900 |
3940.400 |
2808.600 |
|
TOTAL BORROWING |
7099.600 |
5603.600 |
4725.900 |
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|
|
|
|
TOTAL
|
14640.100 |
12837.700 |
11767.900 |
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|
|
|
|
|
APPLICATION OF FUNDS |
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|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
5368.100 |
4192.200 |
3984.700 |
|
Capital work-in-progress |
1519.900 |
1240.100 |
520.700 |
|
|
|
|
|
|
INVESTMENTS |
137.500 |
762.100 |
751.100 |
|
Deferred Tax Assets |
16.300 |
36.600 |
54.600 |
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Interest Accrued on investment |
0.600 |
0.600 |
-- |
|
Inventories |
5535.600 |
4820.400 |
4031.800 |
|
Sundry Debtors |
4623.400 |
3983.600 |
3963.200 |
|
Cash & Bank Balances |
460.200 |
367.200 |
402.600 |
|
Other Current Assets |
2.100 |
1.600 |
1.600 |
|
Loans & Advances |
1120.000 |
1364.200 |
1353.300 |
|
Total Current Assets |
11741.900 |
10537.600 |
9752.500 |
|
Less : |
|
|
|
|
Current Liabilities |
3205.800 |
2924.000 |
2691.100 |
Provisions
|
937.800 |
1006.900 |
604.600 |
Total Current Liabilities
|
4143.600 |
3930.900 |
3295.700 |
|
Net Current Assets |
7598.300 |
6606.700 |
6456.800 |
|
|
|
|
|
|
Miscellaneous Expenses |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
TOTAL
|
14640.100 |
12837.700 |
11767.900 |
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
30.09.2005 |
30.09.2004 |
30.09.2003 |
Sales Turnover [including other income]
|
29948.100 |
25938.200 |
21927.600 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
553.400 |
429.000 |
1677.500 |
Provision for Taxation
|
150.300 |
141.00 |
503.700 |
Profit/(Loss) After Tax
|
403.100 |
288.000 |
1173.800 |
|
|
|
|
|
Export Value
|
4272.200 |
3555.300 |
3197.500 |
|
|
|
|
|
Import Value
|
4945.100 |
3442.400 |
2254.400 |
|
|
|
|
|
Total Expenditure
|
29352.90 |
25095.900 |
6993.400 |
QUARTERLY
RESULTS
|
PARTICULARS |
|
31.12.2005 [1st
Quarter] |
31.03.2006 [2nd
Quarter] |
|
Sales Turnover |
|
8171.800 |
8796.000 |
|
Other Income |
|
6.000 |
11.600 |
|
Total Income |
|
8177.800 |
8807.600 |
|
Total Expenditure |
|
7548.600 |
8245.900 |
|
Operating Profit |
|
629.200 |
561.700 |
|
Interest |
|
101.800 |
126.500 |
|
Gross Profit |
|
527.400 |
435.200 |
|
Depreciation |
|
307.900 |
342.500 |
|
Tax |
|
80.300 |
34.300 |
|
Reported PAT |
|
139.200 |
58.400 |
200512 Quarter 1 - Expenditure Includes (Increase)/Decrease
in Stock in Trade Rs (528.20)million Consumption of Raw Materials Rs 6079.00
million Staff Cost Rs 445.80 million Other Expenditure Rs 1552.00 million Tax
Includes Fringe Benefit Tax & Net of Deferred Tax EPS is Basic &
Diluted Status of Investor Complaints for the quarter ended December 31, 2005
Complaints Pending at the beginning of the quarter Nil Complaints Received during
the quarter 04 Complaints disposed off during the quarter 04 Complaints
unresolved at the end of the quarter Nil 1. The above financial results which
were reviewed by the Audit Committee was taken on record by the Board of
Directors at their meeting held on January 27, 2006. 2. Provision for Taxation
has been made in respect of Income presently determined, subject to appropriate
revision / adjustment on final determination of Income for the year. 3. Figures
have been regrouped wherever necessary.
200603 Quarter 2 - Expenditure Includes (Increase)/Decrease
in Stock in Trade Rs (12.00)million Consumption of Raw Materials Rs 6116.80
million Staff Cost Rs 487.10 million Other Expenditure Rs 1654.00 million Tax
Includes Fringe Benefit Tax & Net of Deferred Tax EPS is Basic &
Diluted Status of Investor Complaints for the quarter ended March 31, 2006
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 02 Complaints disposed off during the quarter 02 Complaints
unresolved at the end of the quarter Nil 1. The above financial results which
were reviewed by the Audit Committee, were taken on record by the Board of
Directors at their meeting held on April 24, 2006. 2. Provision for Taxation
has been made in respect of Income presently determined, subject to appropriate
revision / adjustment on final determination of Income for the year. 3. Figures
have been regrouped wherever necessary.
KEY
RATIOS
|
PARTICULARS |
30.09.2005 |
30.09.2004 |
30.09.2003 |
|
Debt-Equity Ratio |
0.86 |
0.72 |
0.70 |
|
Long Term Debt-Equity Ratio |
0.51 |
0.45 |
0.46 |
|
Current Ratio |
1.68 |
1.83 |
1.90 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
2.24 |
2.21 |
2.04 |
|
Inventory |
6.59 |
6.76 |
6.68 |
|
Debtors |
7.93 |
7.53 |
6.74 |
|
Interest Cover Ratio |
2.10 |
3.91 |
3.34 |
|
Operating Profit Margin(%) |
5.25 |
6.88 |
8.92 |
|
Profit Before Interest And Tax Margin(%) |
2.01 |
3.68 |
5.30 |
|
Cash Profit Margin(%) |
3.99 |
5.04 |
6.29 |
|
Adjusted Net Profit Margin(%) |
0.75 |
1.84 |
2.68 |
|
Return On Capital Employed(%) |
4.99 |
8.95 |
12.17 |
|
Return On Net Worth(%) |
3.47 |
7.70 |
10.47 |
STOCK PRICES
|
Face
Value |
Rs.10/- |
|
High |
Rs.3099.20/- |
|
Low |
Rs.2821.00/- |
LOCAL AGENCY FURTHER INFORMATION
History
MRF Ltd., incorporated in 1960 to take over the
business of the Madras Rubber Factory, MRF later went public in 1961. The
company has its works at Chennai, Arakkonam, Medak, Kottayam, Pondicherry,
Gummidipoondi and Goa. All MRF plants were accredited with ISO-14001 and its
corporate funtions have been certified ISO-9001-2000 for its quality
management.
The company manufactures tyres and tubes in collaboration with Mansfield
Tyres and Rubber, US. Its products include Nylogrip, Zigma, Tyredrome, etc. Its
subsidiary companies are MRF Corp and MRF International. The company tyres are
being exported to 75 countries worldwide.
MRF diversified into conveyor belts in collaboration with Pierelli,
Italy, and in 1991-92, tied up with Vapocure, Australia, to manufacture
polyurethane paint formulations and later into tyre machines in collaboration
with Abex, US. It also diversified into speciality surface coatings, conveyor
belts and leather.
It has launched a steel-belted premium radial tyre variant called MRF
ZVTS'. While this tyre augments the company's overall range of radials, it also
marks a step forward in terms of technology, performance and superior ride
quality. It has become an original equipment supplier(OES) of radial tyres to
Tata Indica.
Volvo, the only MNC which has entered the truck market in India, is
sourcing most of its tyre requirements from MRF.
MRF was declared the most ethical company by 'Business Magazine' in its
survey in 1999.
The Company's speciality coatings has launched MRF Durothane, an
economical, multi-purpose, 100% polyurethane for metal, wood and plastic
surfaces in 2004. Further the company ha launched MRF Cento, an elegant 100%
polyurethane finish for wood surface, both interior and exterior and this is
available in both glossy and matte finishes.
During 2004-2005, the companies expanded its reach by exporting its
products to countries like Finland, Canada and Turkey. MRF commenced export of
Motor Sport Tyres. The company also exported MRF Pre-Treads Bangladesh, Fiji
and a few other countries. A company MRF Lanka (Pvt) was incorporated in
Srilanka for the manufacture of Pre-treads and other related products during
this period. The company also expanded its capacity of Automobile Tyres and
Automobile Tubes from 17372000 Nos to 19772000 Nos and from 16000000 Nos to
18600000 Nos respectively during this period.
Volvo, the only MNC which has entered the truck market in India, is sourcing
most of its tyre requirements from the company.
1946
A
young entrepreneur, K. M. Mammen Mappillai, opened a small toy balloon
manufacturing unit in a shed at Tiruvottiyur, Madras (now Chennai).
1949
Although
the "factory" was just a small shed without any machines, a variety
of products, ranging from balloons and latex-cast squeaking toys to industrial
gloves and contraceptives, were produced. During this time, MRF established its
first office at 334, Thambu Chetty Street, Madras (now Chennai), Tamil Nadu,
India.
1952
MRF
ventured into the manufacture of tread rubber. And with that, the first
machine, a rubber mill, was installed at the factory. This step into
tread-rubber manufacture, was later to catapult MRF into a league that few had
imagined possible.
1955
MRF
soon became the only Indian-owned unit to manufacture the superior extruded,
non-blooming and cushion-backed tread-rubber, enabling it to compete with the
MNC's operating in India at that time.
1956
The
quality of the product manufactured was of such a high standard that by the
close of 1956, MRF had become the market leader with a 50% share of the
tread-rubber market in India. So effective was MRF's hold on the market, that
the large multinationals had no other option but to gradually withdraw from the
tread rubber business in India.
1961
With
the success achieved in tread rubber, MRF entered into the manufacture of
tyres. MRF established a technical collaboration with the Mansfield Tire &
Rubber Company of USA. Around the same time, it also became a public company.
It set up a pilot plant for tyre manufacture at Tiruvottiyur, Madras (now
Chennai).
1963
On
June 12, 1963, India's first Prime Minister, Late Pandit Jawaharlal Nehru laid
the foundation stone for the Rubber Research Centre at Tiruvottiyur to
commemorate the inauguration of the Tiruvottiyur factory.
1964
With
the commissioning of the main plant in 1964, MRF also made progress in the
export of tyres. An overseas office at Beirut (Lebanon) was established to develop
the export market, and it was amongst India's very first efforts on tyre
exports. This year also marked the birth of the now famous MRF Muscleman.
1967
MRF
became the first Indian company to export tyres to USA - the very birthplace of
tyre technology.
1973
MRF
scored a major breakthrough by being among the very first in India to
manufacture and market Nylon tyres passenger tyres commercially.
1978
MRF
developed the MRF Superlug-78, a sturdy tyre for heavy-duty trucks. The tyre
was a significant improvement over its existing products, and went on to become
the country's largest selling truck tyre in later years.
1979
MRF's
turnover crossed INR one billion.
1980
- MRF
entered into a technical collaboration with the B.F. Goodrich Tyre Company
of USA, which was involved with the development of tyres for the NASA
space-shuttle. With this began a significant exercise in quality
improvement and new product development.
- MRF
took a major policy decision to be aggressive on the racing circuits.
1983
MRF
began a rapid product development programme for new vehicles entering India.
1984
Sales
crossed INR two billion. MRF tyres were the first tyres selected for fitment
onto the Maruti Suzuki 800 - India's first small, modern car.
1985
MRF
Nylogrip tyres for two-wheeler vehicles were launched.
1986
MRF
was selected by the National Institution of Quality Assurance for their most
prestigious award. Pitted against 20 tyre companies worldwide, MRF also won 6
Quality Improvement Awards instituted by the B.F. Goodrich Tyre Company from
USA.
1987
MRF
crossed the INR three billion mark and also became the No. 1 tyre company in
India. MRF Legend, the premium nylon car tyre was introduced.
1988
The
MRF Pace Foundation was set up, with international pace bowler, Dennis Lillee
as its Director. Not long thereafter, pace bowlers trained at the Foundation
were selected for the Indian Cricket Team.
1989
By
1989, MRF was the clear market leader in every tyre segment. Once again, in
recognition of excellence, MRF was awarded the Visvesvaraya Award for the Best
Business House in South India and the Economic Times Harvard Business School
Award for the Best Corporate Performance. MRF collaborated with Hasbro
International USA, the world's largest toy makers, and launched Funskool India.
The company also entered into collaborations with Vapocure, Australia to
manufacture polyurethane paint formulations and with Pirelli for MUSCLEFLEX
Conveyor & Elevator Belting.
1989
MRF
launched the MRF ZIGMA CC Radial synchronising with the MRF World Series
Cricket Tournament for the Jawaharlal Nehru Trophy sposered by the company. The
Chief Minister of Tamil Nadu, Dr. M. Karunanidhi, awarded MRF the Special
Export Award. MRF also opened the MRF Tyredrome, India's first tyre company-owned
wheel care complex at Madras (now Chennai).
1990
MRF
brought the 6th World Cup Boxing Championship to Mumbai - the first of its kind
- with 39 countries participating. The event was telecast live on TV networks
worldwide.
1993
K.
M. Mammen Mappillai was awarded the Padmashri Award of National Recognition for
his contribution to industry - the only industrialist from South India to be
accorded this honour until that time. MRF also became the first tyre company in
India to cross the INR 10 billion mark. In addition, the company was voted by
the Far Eastern Economic Review, as one of the ten leading Corporate Groups in
India and a Leader in Asia.
MRF
was selected as one of India's most admired Marketing Companies by the readers
of the
A & M magazine.
1995
The
company's turnover crossed INR 15 billion. MRF was chosen for fitment on the
Daewoo Cielo. This year too MRF was voted by the Far Eastern Economic Review as
one of the 10 leading Indian Companies.
1996
In
the Golden Jubilee year, MRF's turnover crossed the INR 20 billion milestone. A
special factory dedicated entirely to the manufacture of radials was started at
Pondicherry. MRF Tyres were also chosen for fitment on the Ford Escort, Opel
Astra and Fiat Uno. Further proof of its superior quality.
1999
MRF
was declared the most ethical company by "Business World" magazine in
its survey.
2000
MRF
launched the Smile campaign on Indian roads.
2004
MRF's turnover crossed
INR 30 billion mark
Fixed Assets :
Land and
Building, Plant and Machinery, Moulds, Vehicles Others.
The company
imports raw materials, components & spares parts and capital goods.
It is in
trade terms with:-
v
R.
Mendez & Sons
v
Span
Chemicals
v
Rotomech
Industry
v
Continental
Equipment India Private Limited
v
Aristo
Packers Private Limited
v
Noble
Synthetics Limited
v
Blue
Bell Polymers
v
Synthetic
& Polymers
v
Gopal
Metal Containers
v
SPGC
Metal Industries Private Limited
v
Laffans
Petro Chemicals Limited
v
Raveshia
Pigments Limited
v
Insap
Engineers Private Limited
Financial
Despite
unprecedented increase in cost of raw materials and their inability to pass on
completely the increase in the cost to the customers, the Company has achieved
satisfactory results due to cost cutting measures undertaken over a period of
time. Two interim dividends of 30% each for the year ended 30th September, 2005
were declared by the Board of Directors on 21-07-2005 and on 25-10-2005. The
Directors now recommend to the Annual General Meeting the declaration of Final
dividend of 140% for the year ended 30-0§-2005. With this, the total dividend
for the entire year works out to 200%. The total amount of dividends aggregates
to Rs. 84.800 Millions . The Directors recommend that after making provision
for taxation and
proposed
Dividend, the amount of Rs.306.400 Millions be transferred to General Reserve.
With this, the Company's Reserves and Surplus stand at Rs. 7498.100 Millions .
Industrial Relations The overall industrial relations in all their
manufacturing plants were cordial and harmonious throughout the year and the production
and productivity were maintained at the desired levels.Exports Company's
exports for the year ended 30th September,2005 were at Rs. 4265.700 Millions as
against Rs. 3549.900 Millions for the previous year. This works out to an
increase of almost 21%.
Future plan of Action
Sophisticated
models are being continuously introduced by the multinational automobile
manufacturer in passenger car segment. The performance requirements are
stringent for these tyres. Continuous R&D efforts are being taken to meet
the precise tolerances required by the original equipment manufacturers. New
products for the specific requirement of the automobile sector for both
domestic and export markets are continuously developed. There is a tremendous
growth In the export market including PCTR. R&D efforts are taken to meet
the stringent global standards as demanded by the foreign companies. R&D
efforts are also taken to optimize the processing stages for improving the
capacity utilization. This would result in reducing the processing cost and
meeting the productivity requirements. R&D efforts are taken for developing
aircraft tyres to meet the defence requirement.
PERFORMANCE OF THE COMPANY
The sales
turnover of the Company during the year has registered a growth of 13.96% from
Rs.29932.400 Millions in 2003-04 to Rs.34109.400 Millions in 2004-05. The Gross
Profit amounted to Rs.2025.000 Millions against Rs.2082.600 Millions in the
previous year. After provision for depreciation, interest and income tax, the
net profit for the year stood at Rs.403.100 Millions (after adjusting
exceptional item) as compared to Rs.288.000 Millions (after exceptional item of expenditure) in the previous year.
Profit for the current year includes profit on sale of investments amounting to
Rs.234.300 Millions . Export Incentives are lower during the current year since
we have changed over from DEPB to DEEC scheme of imports.
HUMAN RESOURCES
All the
units and offices of the Company maintained cordial and harmonious industrial
relations throughout the year. The Company, through continued efforts has been
able to settle grievances and improve productivity. Internal and external
training programmes for knowledge, skill and behaviour continued during the
year, which improved productivity of the employees at all levels. During the
year, 8005 man-days of training have been done covering 5061 staff and 15772
workmen through 304 programmes. The total number of employees on the rolls of
the Company as on 30th September, 2005 is 9239. The Company has adopted TPM
across all the units and offices to bring about a change in the work culture to
achieve excellence in
products,
operation and services. Regular audits are conducted to ensure the proper
implementation of TPM practices and policies. The efforts of cross-functional
teams from various units have provided inputs, which have yielded results in
areas of cost efficiency and
enhanced
productivity. The awareness of safety and environment has been enhanced with
regular
training programmes. All their units have been awarded certifications in ISO
14001.
AS PER WEBSITE
MRF Ltd., incorporated
in 1960 to take over the business of the Madras Rubber Factory, MRF later went
public in 1961. The company has its works at Chennai, Arakkonam, Medak,
Kottayam, Pondicherry, Gummidipoondi and Goa. All MRF plants were accredited
with ISO-14001 and its corporate funtions have been certified ISO-9001-2000 for
its quality management. The Automobile Tyres and Automobile Tubes are having
installed capacities of 150,00,000 and 145,00,000 respectively as on
September,2003.
The company manufactures tyres and tubes in collaboration with Mansfield
Tyres and Rubber, US. Its products include Nylogrip, Zigma, Tyredrome, etc. Its
subsidiary companies are MRF Corp and MRF International. The company tyres are
being exported to 65 countries worldwide and it has also having distribution
network of 2500 outlets within India.
MRF diversified into conveyor belts in collaboration with Pierelli,
Italy, and in 1991-92, tied up with Vapocure, Australia, to manufacture
polyurethane paint formulations and later into tyre machines in collaboration
with Abex, US. It also diversified into speciality surface coatings, conveyor
belts and leather.
It has launched a steel-belted premium radial tyre variant called `MRF
ZVTS'. While this tyre augments the company's overall range of radials, it also
marks a step forward in terms of technology, performance and superior ride
quality. It has become an original equipment supplier(OES) of radial tyres to Tata
Indica.
Volvo, the only MNC which has entered the truck market in India, is
sourcing most of its tyre requirements from MRF.
WORKING OF THE
COMPANY:
Financial
Results:
During the year under review, the Company attained the following
financial results:
(Rs. Crore) 2003-2004 2002-2003
Total income 3047.97 2607.68Profit before tax and Exceptional item 84.23
94.01Add/(Less): Exceptional Item (41.33)* 73.74Profit before Taxation 42.90
167.75Provision for Taxation 14.10 50.37Net Profit 28.80 117.38
* The Exceptional item of expenditure of Rs.41.33 Crore represents
Additional Excise Duty for the period upon 31-03-2000, which was originally
permitted to be utilized for payment of Cenvat by Finance Act, 2003 (Rs. 73.74
Crete representing CENVAT credit upto September, 2002, was taken credit of in
the previous year) since partly withdrawn by Finance Act, 2004, provided
for.
In spite of increase in the cost of inputs and their inability to pass on
the cost increases in selling prices, the Company has managed to achieve
satisfactory results due to focused cost cutting measures undertaken over a
period of time.
Two interim dividends of 30% each for the year ended 30th September, 2004
were declared by the Board of Directors on 29-07-2004 and on 15-10-2004. The
Directors now recommend to the Annual General Meeting the declaration of final
dividend of 140% for the year ended 30th9-20e4. With this, the total dividend
for the entire year works out to 200%. The total amount of dividends aggregates
to Rs.84.800 Millions .
The Directors recommend that after making provision for taxation and
proposed Dividend, the amount of Rs.192.100 Millions be transferred to General
Reserve. With this, the company's Reserves and Surplus stands at Rs.7191.700
Millions .
AWARDS RECEIVED DURING
THE YEAR:
The Company has received the Top Export Award from AIRIA and Special
Export Award from CAPEXIL for the year 2003-2004.
RESEARCH & DEVELOPMENT (R & D):
1. Specific Areas in which R & D carried out by the Company:
a) Alternate source development.
b) Evaluation and Development of new raw materials.
c) New products and new designs development.
d) New processes Development.
e) Development and modernization of equipment and machinery. f) Import
Substitution.
2. Benefits derived as a result of the above R & D:
The R & D activities are co-ordinated in their separate, independent,
fully equipped R & D Center in the R & D laboratories at all
manufacturing units, the R & D laboratory for Natural Rubber at Kottayam
and the shop floor of all their manufacturing operations.
Alternate sources for raw materials are developed by critical evaluation
at the R&D center and by carrying out actual trial runs at their various
manufacturing units. This results in identifying more sources for cost
optimization and ensuring adequate supplies.
New innovative raw materials are regularly evaluated in their products
and selected materials are introduced for process and product performance enhancement.
New designs are developed to obtain specific performance requirements as
required by the Original Equipment automotive customers and market
demands.
New products are continuously developed for various applications such
as:
a) Domestic Original Equipment Manufacturers b) Domestic replacement
marketc) Defence sectord) Export markete) Farm Servicef) Off the Roadg) Tyres
for Rallies and Racesh) Retread marketi) Belting industry
Efforts are continuously taken in the development of new innovative
processes which has resulted in improved product consistency.
Structured R & D efforts in Engineering are carried out for
developing machinery to suit the specific requirements of the manufacturing
plants resulting in process, productivity and product performance improvements.
Modification and
adaptation of imported engineering equipments to meet specific needs have
resulted in significant benefits of cost optimization and adaptation to the
local environmental and operational needs.
Development of domestic suppliers for the imported raw materials have
helped in optimizing the cost and reduced dependency on imports.
Racing and Rallying
MRF tyres are developed in the
toughest lab known to man
MRF is the pioneer of motor racing in India. The gruelling race track has been
the laboratory for testing their tyres. Every MRF tyre designed is the result
of a special acid test (that’s sheer torture) on the race and rally tracks.
Sharp turns, abrupt braking and straight stretches of steaming asphalt.
Excruciating conditions... but then only the tough can survive, and only the
toughest win.
At MRF, all this is put to good use. MRF’s tyre experts and rubber
technologists are present at every stage, and epecially during those crucial
moments, to study tyre behaviour.
MRF tyres are made to run at speeds exceeding 150 Kmph, at which they are
exposed to extreme conditions of heat 1and traction. The molecular stability of
the rubber compounds is tested against severe gravitational stress. Their experts
observe, analyse and gather information at the pits and the dirt track, which
they pass on to the R&D department. This is then reviewed and used to
develop safer, better quality tyres, not only for formula cars and racing
bikes, but also for cars that rough it out on the tough Indian roads everyday.
MRF Tyredrome
The MRF
Tyredrome has contemporary computerised equipment to diagnose and correct wheel
related problems. The MRF Tyredrome is manned by factory-trained, experienced
engineers and technicians.
MRF Tyredrome Services
An
Automatic Car-Wash that cleans the car inside out. The inside of the car is
vacuum-cleaned, while brushes wash out the grime and dust on the outside with a
special wax-based detergent.
Computerised
Wheel Alignment with a state-of-the-art machine that provides zero-error
readings, ensuring precise and accurate alignment of the wheels.
Compucentric
Wheel Balancing: Dynamic balancing of wheel assembly results in increased tyre
life and enhanced ehicle stability.
Electro-Pneumatic
Tyre-Changing enables damage-free mounting and dismounting of tyres.
Brake
Testing, using self-rotated rollers to test the braking efficiency of
individual wheels.
Optical
Headlamp Aligning with equipment that enables optimal luminance and focussing
of the headlamps.
For the
comfort and convenience, you can relax in their cool, luxurious lounge and
watch car and tyre related video films while the car is in their expert care.
MRF net
plummets 75%
Their
Corporate Bureau / Chennai December 24, 2004
MRF Ltd
(MRF) has witnessed a 75.46 per cent dip in net profit at Rs 288.000 Millions
for the year ended September 30, 2004 against Rs 1173.800 Milliosn recorded in
the same period last year.
The board
has recommended a final dividend of 140 per cent on the paid-up capital for
2004, taking the aggregate dividend for the year to 200 per cent, including two
interim dividends of Rs 30 each.
According
to information in a press release, MRF has registered a 16.67 per cent increase
in total income to Rs 3,0341.700 Millions in the current year against Rs
2,6004.400 Millions achieved last year.
The company
claims the results achieved were in spite of adverse market conditions that
included increase in cost of inputs and its inability to pass on the cost
increase in selling prices.
MRF’s gross
profit before taxation and exceptional item fell by 10.40 per cent at Rs
842.300 Millions the year ended September 30, 2004 (Rs 940.100 Millions ).
The company
had something to celebrate on the front of exports with an increase of 9.81 per
cent in the current year at Rs 3511.800 Millions (Rs 3167.200 Millions ). The
depreciation provided for the current year stood at Rs 958.800 Millions as
against Rs 919.100 Millions in the previous year.
MRF is
hopeful that the improvement in the commercial vehicle market will help improve
the offtake of tires gradually over time.
However,
the steep increase in price of natural rubber, petroleum based inputs and lower
availability of some materials internationally is proving to be a hitch to the
company. It expects that cost-cutting measures and market preferences for its
products will help in the present situation.
The
company’s annual general meeting will be held on March 17, 2005 and the
transfer books and register of members will remain closed on March 07 and March
17, 2005 for the payment of final dividend for the year ended September 30,
2004 to those shareholders whose name appear on the register of members on
March 17, 2005.
KM Mammen,
Chairman
& MD, MRF Ltd.
Mr. K.M. Mammen, born in
1949 is the Chairman and Managing Director of MRF Limited, India's largest Tyre
Company, which is also diversified in Speciality Surface Coatings: Leather
Products: Educational Aids for Children in the form of Toys, Games and Puzzles.
The present turnover of MRF is over Rs.23000.000 Millions . MRF is also one of
the Country's leading Trading Houses and was given the Top Export Award by
CAPEXIL for its Sterling performance. MRF is holding the 12th position among
the tyre companies in the world. MRF is a recipient of J.D. Power Customer
Satisfaction Award.
Mr. Mammen had his initial
education at the Madras Christian College School and thereafter graduated from
the Madras Christian College. He then went to the U S A where he had training
with their erstwhile Collaborators, The Mansfield Tire & Rubber Co.
Mr. Mammen joined MRF
Limited as its Whole Time Director in 1981 and became its Vice Chairman and
Managing Director in 1986.
Besides being associated
with several Chambers of Commerce, Board of successful companies, he is a
sponsor and promoter of Sport. He has taken keen interest in Motor Racing and
Rallies in which he has carved out a place for India on the world map. Cricket
has received a great amount of his personal attention which is reflected in the
success of the MRF Pace Foundation and International events like the "MRF
World Series for Jawaharlal Nehru Cup".
MRF Pace Foundation imparts
training in fast bowling not only to Indian Players but also to Players of
other cricketing countries also.
He is a Vice President of
Tamil Nadu Cricket Association, Chennai and President of Madras Christian
College Alumni Association, Tambaram, Chennai. He is a Director of the Board of
Madras Christian College. He is a member in the Executive Committee of
Federation of Indian Chambers of Commerce & Industry (FICCI). He is a
member in the Development Council for Tyres and Tubes, Ministry of Commerce
& Industry and the National Council of Confederation of Indian Industry
(CII). He is in the Board of Goa Institute of Management. He was Vice Chairman
of the Automotive Tyre Manufacturers' Association.
He is the father of two
sons and his favourite sport and pastime are playing Squash and Golf and
watching Cricket and Tennis.
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.45.92 |
|
UK Pound |
1 |
Rs.84.76 |
|
Euro |
1 |
Rs.57.95 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP
CAPITAL |
1~10 |
9 |
|
OPERATING
SCALE |
1~10 |
8 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS
SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT
LINES |
1~10 |
9 |
|
--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 |
|
76 |
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 |