Attachment 1
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Report Update On |
8th January, 1999 |
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Report on |
PUNJAB TRACTORS LIMITED |
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Registered Office |
Phase IV, Sahibzada Ajit Singh Nagar, Dist. Ropar – 160 055, India |
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Tel. No. |
91-172-242 484 |
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Fax No. |
-- |
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E-Mail |
-- |
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Telex |
-- |
Attachment 2
S U M M A R Y
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Incorporated |
1970 |
Status |
Good |
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Registration No. |
2946 |
Chief Executive |
Yash Mahajan |
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Capital (Rs.) |
202.519 millions |
Payments |
Regular |
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Sales (Rs.) |
6,766.037 millions |
Litigation |
-- |
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Net Worth (Rs.) |
1,602.365 millions |
Banking Reputation |
Good |
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No. of Employees |
4000 (approx.) |
Auditors |
H. K. Wadhawan & Company |
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Credit Rating |
Aa (See attachment 3) |
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INDUSTRY
From a small beginning
in the 1960s, when a few thousand tractors were produced, India is now one of the
largest producers of tractors in the world alongwith the US and CIS countries.
From a production of 2,000 tractors in FY’71, volume sales of the industry
reached 224,802 units in FY’97 (17.5% growth over FY’96) valued at
approximately Rs.48 billions.
Driven by the
excellent monsoons, record grain production for an entire decade and easy
finance through government agencies, the tractor industry has been on a roll,
with unit sales doubling over the last four years. The tractor industry grew at
a rate of 15 percent CAGR over fiscal 94-97 and 12 percent in fiscal 98.
However, attractive growth rates prompted tractor makers to go for capacity
expansion resulting in excess production of over 500,00 units. Further, the
list of additional supply is likely to increase substantially considering the
various projects in hand.
Tractor demand is
likely to increase with Government investment in irrigation, increase in
multiple cropping and the spread of scientific cultivation to other states as
well. The total irrigated area in India was expected to increase from 75.7
million hectares in FY’92 to 89.3 million hectares by the end of the eighth
plan which will increase the demand for tractors.
Brand loyalties are
strong in the tractor industry, with each producer dominating a particular
region. Even then, continuous product improvements will be crucial to most
manufacturers. Competition in the industry is likely to intensify, especially
in the heavier tractor segments, with the entry of several new players like
Fiat subsidiary New Holland, John Deere, Bajaj Tempo, Larsen & Toubro and
Greaves. Threat from international companies is minimal since the international
product range is not suited to Indian terrians. Most tractors in western
countries belong to the 80 – 85 hp range. Export prospects for tractors in the
lower horse power range are, consequently, good.
********************
HISTORY
The company was incorporated on 27th June, 1970 at Ropar having Company Registration Number 2942.
LEGAL FORM
It is a Public Limited Liability company. The company’s shares are listed on the Stock Exchange.
DIRECTORS
|
Mr. R. I. Singh |
Chairman |
|
Mr. Chandra Mohan |
Vice Chairman & Managing Director |
|
Mr. Yash Mahajan |
Managing Director |
|
Mr. S. K. Tuteja |
Director |
|
Mr. S. C. Agrawal |
Director |
|
Mr. B. G. Daga |
Director |
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Mr. S. P. Virmani |
Director |
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Mr. T. S. Sahney |
Director |
|
Mr. N. S. Gill |
Director |
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Mr. P. Sivaram |
Vice President – Finance |
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Mr. Mahesh Kaushal |
Company Secretary |
PARTICULARS OF CHIEF EXECUTIVE
|
Name |
Mr.
Chandra Mohan |
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Designation |
Vice
Chairman & Managing Director |
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Age |
64
years |
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Qualification |
B.A. (Hons.), B.Sc. (Hons.), Mech. Engg., AMIE
(London), FIE (India) |
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Experience |
44
years |
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Date of Joining |
26th
May, 1970 |
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Previous Employment |
Central Mechnical Engineering Research Institute –
Assistant Director CMERI |
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|
|
|
Name |
Mr.
Yash Mahajan |
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Designation |
Managing
Director |
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Age |
60
years |
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Qualification |
B.Com.,
FCA (England & Wales), ACA (India) |
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Experience |
38
years |
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Date of Joining |
9th
April, 1973 |
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Previous Employment |
Union Carbide India Limited – Manager (Special
Assignments) |
BUSINESS
The company is engaged in manufacturing of Agricultural Tractors, Harvester Combines, Forklifts, Castings, Agricultural Implements and Portable Shelters.
The company’s production status as on 31st March, 1997 was as under :
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PARTICULARS |
Unit |
Installed Capacity |
Actual Production |
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Tractors, Self Propelled Harvester Combines &
Rice Transplanters |
Nos. |
36,000 |
33,160 |
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Tractor Drawn Agricultural Implements |
Nos. |
-- |
64 |
|
Castings |
M.T. |
8,000 |
6,039 |
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Forklifts |
Nos. |
300 |
192 |
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Portable Shelters |
Nos. |
200 |
-- |
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Driver Evaluation System |
Nos. |
100 |
-- |
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Transmission Gears |
M.T. |
90 |
-- |
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Engine Gears |
M.T. |
40 |
-- |
Generic Names of three principal products of the company are :
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Item Code No. (ITC Code) |
87.01 |
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Product Description |
Agricultural Tractor |
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Item Code No. (ITC Code) |
84.33 |
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Product Description |
Harvester Combine |
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Item Code No. (ITC Code) |
84.27 |
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Product Description |
Forklift |
The performance of the company during the year ended 31st March, 1997 was as under :
[figures are in Rupees Millions]
|
PARTICULARS |
31.03.1997 |
|
Total Income |
6,766.037 |
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Total Expenditure |
5,900.890 |
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Profit Before Tax |
865.147 |
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Profit After Tax |
563.147 |
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Earning Per Share (Rs.) |
27.80 |
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Dividend Rate (%) |
80% |
The management in its annual report for the period ended 31st March, 1997 informs that the company has put behind it another year of record revenues, earnings and unit volumes. It posted an overall revenue of Rs.6,153 millions, up 32% over the previous year. Demonstrating the soundness of its earning structure, pre-tax profit jumped higher, some 44%, to reach Rs.865 millions.
The entire year witnessed brisk demand for Swaraj tractors, the company’s principal product line. Growing at 26% offtakes crossed the 33000 tractor mark, outperforming industry’s 16% rate. This higher rate pushed Swaraj’s market share to 15% from previous years 13%.
Exports registered reasonable growth. With billings touching Rs.75 millions, an increase of 18% over last year.
In contrast, demand for Combine Harvesters declined sharply, perking up a little only towards year end. Consequently, sells fell to 108 combines from previous years level of 154. In the face of sluggish industrial growth, sale of Forklifts was also restrained – 169 against 160 for the previous year.
Out-turn of Castings was 6103 MT, an increase of 11%.
Bolstered by the notable improvement in both volume and model-mix in tractors underpinned by PTL’s traditional cost efficiencies, operations have generated sizeably enhanced surpluses. Step up in cash profits was 41% over fiscal 1996 for a margin of 15.3% (1996 – 14.4%). Pre-tax profit at Rs.865 millions reflects a margin of 14.1% (1996 – 12.9%). With some advantage from capital expenditure coming in this year, net profit at Rs.563 millions recorded a solid 47% climb over fiscal 1996.
EPS on the doubled post bonus equity works out to Rs.27.80 against Rs.18.87 for 1996 on equity re-adjusted for comparison.
The company’s fixed assets of important value includes Freehold Land, Building, Plant & Machinery, Electrical Installations, Furniture, Fixtures & Office Equipments and Vehicles.
ASSOCIATE CONCERNS
K Swaraj Engines Limited
BANKERS
K Indian Overseas Bank
K Canara Bank
K Bank of America
K Bharat Overseas Bank Limited
FINANCIAL INFORMATION
The company’s last available financial information for the period ended 31st March, 1997 is enclosed herewith.
CAPITAL STRUCTURE
|
Authorised Capital : |
||
|
49,200,000 |
Equity Shares of Rs.10/- each |
Rs.492.000 millions |
|
80,000 |
Preference Shares of Rs.100/- each |
Rs. 8.000 millions |
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------------------------------- |
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GRAND TOTAL |
Rs.500.000
millions |
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================= |
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Issued, Subscribed & Paid-up Capital : |
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20,251,900 |
Equity Shares of Rs.10/- each |
Rs.202.519 millions |
COMMENTS
Subject is a well-established and reputed company of Punjab State Government. Available information indicates high financial responsibility of the company. Financial position of the company is good. Payments are always correct and as per commitments. Fundamentals are strong and healthy.
The company can be considered good for any normal business dealings.
ABRIDGED BALANCE SHEET AS ON
31ST March, 1997
[figures are in Rupees Millions]
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SOURCES OF FUNDS |
|
31.03.1997 |
31.03.1996 |
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SHAREHOLDERS’ FUNDS |
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1] Share Capital |
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202.519 |
101.259 |
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2] Reserves & Surplus |
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1,399.846 |
1,116.175 |
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LOAN FUNDS |
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1] Secured Loans |
|
32.433 |
49.186 |
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2] Unsecured Loans |
|
59.005 |
81.180 |
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GRAND TOTAL |
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1,693.803 |
1,347.800 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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903.413 |
671.931 |
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Capital work-in-progress |
|
214.510 |
50.027 |
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INVESTMENTS |
|
495.340 |
495.340 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
|
676.539 |
672.691 |
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Sundry Debtors |
|
60.984 |
49.329 |
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Cash & Balances |
|
65.584 |
90.541 |
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Loans & Advances |
|
515.654 |
283.883 |
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Total Current
Assets |
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1,318.761 |
1,096.444 |
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Less : |
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Current Liabilities & Provisions |
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1,238.221 |
965.942 |
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Net Current
Assets |
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80.540 |
130.502 |
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GRAND TOTAL |
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1,693.803 |
1,347.800 |
IMPORTANT FINANCIAL
INFORMATION FOR TWO PERIODS
[figures are in Rupees Millions]
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PARTICULARS |
|
31.03.1997 |
31.03.1996 |
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Sales Turnover [including other income] |
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6,766.037 |
5,084.537 |
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Profit/(Loss) Before Tax |
|
865.147 |
602.152 |
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Provision for Taxation |
|
302.000 |
220.000 |
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Profit/(Loss) After Tax |
|
563.147 |
382.152 |
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Dividend |
|
162.015 |
126.574 |
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Earnings in Foreign Currency : |
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Export Earnings |
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Other Earnings |
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Total Earnings |
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Imports : |
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Raw Materials |
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Components & Spares |
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Capital Goods |
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Total Imports |
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Expenditures : |
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Raw Materials, Finished & Semi Finished Products |
|
4,544.037 |
3,431.977 |
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Excise Duty |
|
612.752 |
434.549 |
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Operating & Administrative Expenses |
|
678.839 |
543.712 |
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Finance Charges (net) |
|
(13.032) |
5.197 |
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Depreciation |
|
78.225 |
66.716 |
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Total Expenditures |
|
5,900.821 |
4,482.151 |
IMPORTANT KEY RATIOS FOR
THREE PERIODS
|
PARTICULARS |
31.03.1997 |
31.03.1996 |
31.03.1995 |
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*Adjusted E P S |
26.95 |
37.36 |
26.41 |
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*Reported E P S |
27.81 |
37.74 |
26.63 |
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Dividend Per Share |
8.00 |
12.50 |
10.00 |
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*Operating Profit Per Share |
42.70 |
58.86 |
41.91 |
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*Net Operating Income Per Share |
300.59 |
451.48 |
358.65 |
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Free Reserves Per Share |
68.81 |
109.61 |
84.17 |
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Profitability
Ratios (%) |
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Operating Margin |
14.20 |
13.04 |
11.69 |
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Gross Profit Margin |
12.92 |
11.58 |
10.16 |
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Net Profit Margin |
8.82 |
8.09 |
7.22 |
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*Adjusted Return On Net Worth |
34.07 |
31.07 |
27.80 |
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*Reported Return On Net Worth |
35.14 |
31.39 |
28.04 |
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*Return On long Term Funds |
52.47 |
47.31 |
39.41 |
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Leverage
Ratios |
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Long Term Debt/Equity |
0.06 |
0.10 |
0.17 |
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Total Debt/Equity |
0.06 |
0.11 |
0.17 |
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*Fixed Assets Turnover Ratio |
4.30 |
4.12 |
3.62 |
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Liquidity
Ratios |
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Current Ratio |
1.07 |
1.14 |
0.99 |
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Quick Ratio |
0.52 |
0.44 |
0.47 |
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*Inventory Turnover Ratio |
9.90 |
7.44 |
8.73 |
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Payout Ratios
(%) |
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Dividend payout Ratio (Net Profit) |
29.68 |
33.46 |
37.86 |
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Dividend payout Ratio (Cash Profit) |
25.96 |
28.44 |
31.35 |
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Earnings Retention Ratio |
70.32 |
66.54 |
62.14 |
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Coverage Ratio |
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Financial Charges Coverage Ratio |
39.16 |
19.23 |
13.54 |
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Component
Ratio (%) |
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Bonus Component In Equity Capital |
77.17 |
54.35 |
54.35 |
Attachment 3
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SCORE SHEET |
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SCORE |
CREDIT 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. Maybe drawn to slightly difficult position as
unfavourable conditions arise. Minimal assurance for timely payment on
interest and principal sums |
Moderate |
|
26-40 |
B |
Unfavourable & favourable factors carry similar
weight in credit consideration. Capability to overcome financial difficulties
seems comparatively limited or considered not known. Capability to pay both
interest and principal sums is doubtful |
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 |