MIRA
INFORM REPORT
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Report Date : |
01.08.2007 |
IDENTIFICATION DETAILS
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Name : |
VIDEOCON
INDUSTRIES LIMITED |
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Formerly Known
as: |
Adhigam Trading, Videocon Leasing and Industrial Finance |
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Registered
Office : |
Auto Cars Compound, |
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Country: |
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Financials (as
on): |
30.09.2006 |
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Date of
Incorporation : |
29.10.1996 |
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Com. Reg. No.: |
11-103624 |
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CIN No.: [Company Identification
No.] |
L99999MH1996PTC103624 |
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TAN No.: (Tax Deduction
& Collection Account No.) |
MUMV09411D NSKV01616G |
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PAN No.: (Permanent
Account No.) |
AABCV4012H |
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Legal Form : |
A Public Limited Liability
Company. The company’s shares are listed on the stock exchange. |
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Line of
Business : |
Manufacturing and trading activity of Electronic\Electric
Consumer Durables and home appliances all kinds of electric and Electronic goods
as well as telecommunication equipments, office equipments, games and gaming
solutions including lotteries etc., |
RATING & COMMENTS
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MIRA’s Rating
: |
A |
RATING
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STATUS |
PROPOSED
CREDIT LINE |
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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 |
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Maximum Credit
Limit : |
USD 201562400 |
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Status : |
Good |
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Payment
Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is an
established company having satisfactory
track. Company’s profitability is improving. The company was successful
in wiping-off all its previous losses . Payments are reported as slow but
correct. The company can
be considered for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered
Office/Factory : |
Auto Cars Compound,
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Tel. No.: |
91-240-2320750 |
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Fax No.: |
91-240-2333704 |
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Plant 1: |
14 Km Stone, |
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Tel. No.: |
91-2642-240803 |
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91-2642-240391 / 251551 |
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Plant 2: |
15 Km Stone, |
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Plant 3: |
Gut No 350, Bhalgaon, Dist: |
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Plant 4: |
Survey No-6 To 11, |
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Plant 5: |
Plot No-72 (Phase -1), Sipcot Industrial Complex,
Hosur – 635126 |
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Plant 6: |
Sector –V, Block B.P, |
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Plant 7: |
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Plant 8 : |
P.O Box
No-68, Videocon House, Village Chhavaj, Bharuch – 392002 |
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Branch 1 : |
Videocon International Limited |
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Tel. No.: |
86-755-25833-845
Upto 850 |
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Branch 2 : |
Thomson |
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Tel. No.: |
33-141-86-54-11 |
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Branch 3 : |
Thomson Displays Polska Sp. Z O O |
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Tel. No.: |
(48 22) 7571112 |
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Branch 4 : |
Thomson Displays |
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Tel. No.: |
39-775-701275 |
DIRECTORS
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Name : |
Mr. Pradeepkumar
N Dhoot |
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Designation : |
Director |
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Name : |
Mr. Venugopal N
Dhoot |
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Designation : |
Director |
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Name : |
Mr. S K Shelgikar |
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Designation : |
Director |
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Name : |
Mr. Kuldeep Drabu |
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Designation : |
Director |
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Name : |
Mr. S Padmanabhan |
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Designation : |
Director |
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Name : |
Mr. S C N Jatar |
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Designation : |
Director |
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Name : |
Mr. Arun Laxman
Bongirwar |
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Designation : |
Director |
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Name : |
Mr. Satya Pal
Talwar |
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Designation : |
Director |
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Name : |
Mr. Didier Trutt |
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Designation : |
Nominee |
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Name : |
Mr. Johan Fant |
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Designation : |
Nominee |
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Name : |
Mr. Ajay Saraf |
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Designation : |
Nominee (ICICI) |
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Name : |
Mr. B
Ravindranath |
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Designation : |
Nominee (IDBI) |
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Name : |
Mr. Peter Birch |
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Designation : |
Director |
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KEY EXECUTIVES
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Name : |
Mr. Vinod Kumar Bohar |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names of
Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters
Holding |
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Indian Promoters |
15,64,99,971 |
70.82 % |
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Person Acting in
Concert # |
11,93,354 |
0.54 % |
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Sub-Total |
15,76,93,325 |
71.36 % |
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Non-Promoter's
Holding |
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Institutional
Investors |
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Mutual Funds and
UTI |
4,12,967 |
0.19 % |
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Banks ,Financial Institutions,
Insurance, Companies, (central / State Government
Institutions, Non -Government Institutions ) |
10,07,451 |
0.46 % |
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FIIs |
30,34,820 |
1.37 % |
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Sub – Total |
44,55,238 |
2.02 % |
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Others |
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Private Corporate
Bodies |
56,07,674 |
2.54 % |
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Indian Public |
64,12,031 |
2.90 % |
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NRIs/OCBs |
9,28,363 |
0.42 % |
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GDR |
4,58,89,202 |
20.77 % |
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Sub -Total |
5,88,37,270 |
26.62 % |
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Grand Total |
22,09,85,833 |
100.000 % |
BUSINESS DETAILS
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Line of Business
: |
Manufacturing and trading activity of Electronic\Electric
Consumer Durables and home appliances all kinds of electric and Electronic
goods as well as telecommunication equipments, office equipments, games and
gaming solutions including lotteries etc., |
GENERAL INFORMATION
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No. of
Employees : |
About 10000 |
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Bankers : |
v
State
Bank of v
Indian
Bank |
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Facilities : |
- |
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Banking Relations : |
Unknown |
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Auditors : |
Khandelwal Jain
& Company/ Kadam & Company Chartered
Accountant |
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Associates/Subsidiaries : |
v Videocon
Appliances Limited Manufacturing washing
machines. v Applicomp India
Limited v Epitome
Components Limited v Videocon Housing
Finance Limited v Videocon
Properties Limited v v
European Refrigeration Components SRL v
Videocon Industries Limited v Videocon Communications Limited v
Indian Refrigerator Company Limited v
Kitchen Appliances India Limited v
Millennium Appliances India Limited v Videocon Narmada
Glass |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
350000000 |
Equity Shares |
Rs. 10/- Each |
Rs. 3500.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2668500000 |
Equity Shares |
Rs. 10/- Each |
Rs. 2668.500 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
30.09.2006 |
30.09.2005 (15 months ) |
30.06.2004 |
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SHAREHOLDERS
FUNDS |
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1] Share Capital |
2668.500 |
2622.100 |
328.900 |
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2] Share
Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves &
Surplus |
47722.100 |
43724.100 |
0.000 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
(412.200) |
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NETWORTH
|
50390.600 |
46346.200 |
(83.300) |
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LOAN FUNDS |
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1] Secured Loans |
36083.900 |
27761.000 |
0.000 |
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2] Unsecured
Loans |
13528.000 |
4734.700 |
900.700 |
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TOTAL
BORROWING
|
49611.900 |
32495.700 |
900.700 |
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DEFERRED TAX
LIABILITIES |
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TOTAL
|
100002.500 |
78841.900 |
817.400 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
43313.600 |
33497.500 |
1099.300 |
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Capital work-in-progress
|
6082.800 |
6153.700 |
0.000 |
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INVESTMENT
|
17811.700 |
3387.900 |
82.900 |
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DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES
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Inventories
|
12998.600
|
8730.200
|
0.000
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Sundry Debtors
|
11172.900
|
9971.200
|
6.800
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Cash & Bank Balances
|
11362.500
|
13960.100
|
2.800
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Other Current Assets
|
0.000
|
0.000
|
0.000
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Loans & Advances
|
9416.700
|
12091.300
|
1049.600
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Total Current Assets
|
44950.700
|
44752.800
|
1059.200 |
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Less : CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
|
10468.300
|
8253.100
|
1423.800
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Provisions
|
1688.000
|
696.900
|
0.200
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Total Current Liabilities
|
12156.300
|
8950.000
|
1424.000
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Net
Current Assets
|
32794.400
|
35775.800
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(364.800)
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
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TOTAL
|
100002.500 |
78841.900 |
817.400 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
30.09.2006 |
30.09.2005 (15 months ) |
30.06.2004 |
Sales Turnover [including other income]
|
77472.500 |
57706.500 |
207.800 |
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Profit/(Loss) Before Tax
|
9136.600 |
2616.500 |
(18.900) |
Provision for Taxation
|
951.600 |
(1660.300) |
(1.500) |
Profit/(Loss) After Tax
|
8185.000 |
4276.800 |
(17.400) |
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Total Expenditure
|
69369.200 |
55466.800 |
167.800 |
QUARTERLY RESULTS
|
PARTICULARS |
31.12.2006 1st Quarter |
31.03.2007 2nd Quarter |
30.06.2007 3rd Quarter |
|
Sales Turnover |
20586.700 |
21529.700 |
22047.300 |
|
Other Income |
469.200 |
414.800 |
606.200 |
|
Total Income |
21055.900 |
21944.500 |
22653.500 |
|
Total Expenditure |
16820.500 |
17332.500 |
17790.300 |
|
Operating Profit |
4235.400 |
4612.000 |
4863.200 |
|
Interest |
724.100 |
747.900 |
786.700 |
|
Gross Profit |
3511.300 |
3864.100 |
4076.500 |
|
Depreciation |
1099.700 |
1149.800 |
1175.400 |
|
Tax |
350.000 |
400.000 |
450.000 |
|
Reported PAT |
2061.600 |
2314.300 |
2451.100 |
Notes :
200612 Quarter 1 –
1. The
above results have been reviewed by the Audit Committee and taken an record by the
Board of Directors at'its meeting held on 31st January, 2007. The
results for the quarter ended 31st December, 2006 have been subjected to a
'Limited Review' by the auditors of the Company, as per the listing agreement
with the Stock Exchanges. 2. a) In terms of the Scheme of Amalgamation
sanctioned by the Hon'ble High Court of Bombay vide order dated 30th-June 2006,
EKL Appliances Limited amalgamated with the Company with effect from 1st
January 2005. The Scheme has become effective on 21st July, 2006.
Pursuant to the Scheme, the Company has alloted 416 Equity Shares of
Rs.10/-each to the equity shareholders of erstwhile EKL Appliances Limited. The
paid-up Equity Share Capital of the Company as mentioned above-includes the
effect of this allotment. b) Consequent to the amalgamation of EKL Appliances
Limited with the Company, figures for the quarter ended 31st
December 2006, quarter ended 31st December 2005 and the year ended
30th September 2006 include operations of EKL Appliances Limited. c)
Figures for the quarter ended 31st December 2005 have been restated to include
operations of erstwhile EKL Appliances Limited which was amalgamated with the
Company later. 3. During the quarter ended 31st December, 2006, 366 investor’s
complaints were received and resolved. There were no investor complaints
pending at the beginning of the quarter and at the end of the quarter. 4. The
Provision for Tax for the quarter and period includes Provision for Deferred
Tax and Fringe Benefit Tax. 5 Previous quarters/year's figures have been
regrouped/reclassified and recasted wherever necessary.
200703
Quarter 2 –
Notes Operating Expenses Includes (Increase) / Decrease in
Stock in Trade Rs (38.40)million Material Consumption Rs 12286.40 million Personnel
Cost Rs 261.70 million Other Expenditure Rs 4822.80 million EPS is Basic Status
of Investor Complaints for the quarter ended March 31, 2007 Complaints Pending
at the beginning of the quarter Nil Complaints Received during the quarter 916
Complaints disposed off during the quarter 916 Complaints unresolved at the end
of the quarter Nil 1. The above results have been reviewed by the Audit
Committee and taken on record by the Board of Directors at its meeting held on
April 27, 2007. The results for the quarter ended March 31, 2007 have been
subjected to a 'Limited Review' by the auditors of the Company, as per the
listing agreement with the Stock Exchanges. 2. In terms of the Scheme of
Amalgamation sanctioned by the Hon'ble High Court of Bombay vide order dated
June 30, 2006, EKL Appliances Ltd amalgamated with the Company with effect from
January 01, 2005. The Scheme has become effective on July 21, 2006. Pursuant to
the Scheme, the Company has allotted 416 Equity Shares of Rs 10/- each to the
equity shareholders of erstwhile EKL Appliances Ltd. The paid-up Equity Share
Capital of the Company as mentioned above includes the effect of this
allotment. Consequent to the said amalgamation, figures for the previous
quarter and half year ended March 31, 2006 have been restated to includes
operations of erstwhile EKL Appliances Ltd. 3. The Provision for Tax for the
quarter and year ended includes Provision Current Tax, Deferred Tax and Fringe
Benefit Tax. 4. Previous quarters/years figures have been regrouped/reclassified
and recasted wherever necessary.
200706
Quarter 3 –
Notes Operating Expenses Includes (Increase) / Decrease in
Stock in Trade Rs (180.90) million Material Consumption Rs 12551.80 million Personnel
Cost Rs 269.30 million Other Expenditure Rs 5150.10 million Status of Investor
Complaints for the quarter ended June 30, 2007 Complaints Pending at the
beginning of the quarter Nil Complaints Received during the quarter 753
Complaints disposed off during the quarter 753 Complaints unresolved at the end
of the quarter Nil EPS is Basic 1. The above results have been reviewed by the
Audit Committee and taken on record by the Board of Directors at its meeting
held on July 31, 2007. The results for the quarter ended June 30, 2007 have
been subjected to a Limited Review by the Company, as per the listing agreement
with the Stock Exchanges. 2. During the Quarter, the Company has allotted
107,452 Equity Shares upon conversion of Foreign Currency Convertible bonds
aggregating to US$ 1,099,000. 3. The Provision far Taxation includes Provision
for Current Tax, Deferred Tax and Fringe Benefit Tax. 4. Previous quarters /
years figures have been regrouped / reclassified and recasted wherever
necessary.
KEY RATIOS
|
PARTICULARS |
30.09.2006 |
30.09.2005 (15 months) |
30.06.2004 |
|
Debt-Equity Ratio |
1.05 |
0.91 |
0.00
|
|
Long Term Debt-Equity Ratio |
1.02 |
0.88 |
0.00
|
|
Current Ratio |
3.55 |
3.80 |
0.79
|
|
TURNOVER RATIOS |
|
|
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|
Fixed Assets |
1.39 |
1.88 |
0.18
|
|
Inventory |
6.98 |
10.36 |
0.00
|
|
Debtors |
7.17 |
9.07 |
61.12
|
|
Interest Cover Ratio |
4.59 |
2.84 |
0.75
|
|
Operating Profit Margin(%) |
19.84 |
16.40 |
38.50
|
|
Profit Before Interest And Tax Margin(%) |
15.41 |
12.29 |
27.48
|
|
Cash Profit Margin(%) |
15.22 |
14.73 |
2.65
|
|
Adjusted Net Profit Margin(%) |
10.80 |
10.62 |
(83.700)
|
|
Return On Capital Employed(%) |
14.60 |
15.85 |
0.00
|
|
Return On Net Worth(%) |
21.18 |
26.45 |
0.00
|
STOCK PRICES
|
Face Value |
Rs.10/- |
|
High |
Rs.372.000/- |
|
Low |
Rs.365.000/- |
LOCAL AGENCY FURTHER INFORMATION
Company Details:
Formerly known as Adhigam Trading, Videocon Leasing and
Industrial Finance was incorporated in 1986. In 1990-91, the management underwent
a change by way of transfer of equity shares to the Videocon group. The company
is been engaged in lease financing, hire-purchase, bill discounting and
merchant banking. It had diversified into corporate financing and investment
operations. It became a category-I merchant banker and played an active role in
issue management, underwriting, advisory services and loan syndication.
During 1994-95, it floated a 100% subsidiary Popup Properties and Investments, to
deal with investments, and to advise on investments, and also to provide
corporate finance advisory services as well as arrange and deal in the areas of
corporate finance.
Videocon Energy Holdings Limited (VEHL) and consequently Goa Energy Private Limited
(Formerly Talchar Minings Private Limited), which is a subsidiary of VEHL,
ceased to be the subsidiaries of the company with effect from 31st
March 2004. On 15th June 2004, Videocon Securities Limited has become a
subsidiary of the company and On 5th June 2004 Petrocon India Limited (PIL) has
become a subsidiary of the company. Further Popup Properties & Investments
Private Limited and Videocon (
During December 2005 the Company has acquired 81% equity stake in Eagle
Corporation Limited (ECL) and consequently ECL became a subsidiary of the
company.
Banganga Investments Private Limited, New Design Finance & Investments
Private Limited, Wide Range Credit & Investments Private Limited and Verka
Investments Private Limited, were merged with the company under the scheme of
amalgamation.
The name of the company has been changed during September 2004, from Videocon
Leasing and Industrial Finance Limited to Videocon Industries Limited.
During 2003-04 the company had successfully launched the business of
Manufacturing and trading activity of Electronic\Electric Consumer Durables and
home appliances all kinds of electric and Electronic goods as well as
telecommunication equipments, office equipments, games and gaming solutions
including lotteries etc., and the company has also started the online lottery
business as distributors and commerical launched the business in April 2004.
Further the company has decided to merge Petrcon India Limited (Formerly
Videocon Petroleum Limited), which is subject to approval.
Director’s Report -
OPERATIONS:
Some of the highlights of the year
under review are as under:
1. Acquisition:
On December 13, 2005, Eagle Corporation Limited became a Wholly Owned
Subsidiary of the Company after the Company acquired the balance 81% equity
stake in Eagle Corporation Limited.
Eagle Corporation Limited is an offshore entity which acquired Colour
Picture Tube businesses from Thomson S.A. having manufacturing facilities in
Poland, Italy, Mexico and China along with support research and development
facilities. In pursuit of mission to become a global major in consumer
electronics and home appliances with large scale and low cost base for critical
components, the company made its first footprint in acquiring global sized
colour picture tube manufacturing facilities across the world from Thomson SA.
It was also an exercise to complete the value chain in CTV vertical as the
Company had already a critical mass of glass panel manufacturing facility, a
substantial part of bill of material of CPT in
1. Cost cutting2. Vertical
Integration3. Rationalisation of Product Profile
So far in the past four quarters, the Company had been successful in making
substantial dent in all these three aspects. the Company had been in a position
to reduce the costs by relocation of certain activities from high cost
countries to low cost countries, also by reshuffling the material procurement
from more efficient sources and by effectively leveraging the capability to
integrate glass panel facility back home to the CPT manufacturing facilities so
acquired from Thomson S.A. The Company also made decent progress in reshuffling
the product profile to match the needs of the market by shifting the production
of very large size picture tubes to medium and smaller size picture tubes,
thereby reducing the impact of the pressure of competition on VLS. The pursuit
of threefold strategy of rationalization of cost, capacity and production
profile has given decent dividends in last year by converting the cash losing
acquired business into cash surplus, albeit in a token way. The company intends
to further pursue the same strategy of cost cutting and rationalizations and
product profile rationalizations such as launch of Slim and Extra Slim versions
of Colour Picture Tubes and garner more strength by integrating its activities
and operations covering all aspects of value chain. The company believes that
the pursuit of these strategies would go along, to further its aim of becoming
a globally integrated player in the CTV vertical.
2. Merger:
On July 21, 2006, EKL Appliances Limited (formerly: Electrolux Kelvinator
Limited) amalgamated with the Company, with retrospective effect from January
01, 2005, pursuant to the Scheme of Amalgamation of EKL Appliances Limited with
Videocon Industries Limited, as sanctioned by the Hon'ble High Court of
Judicature at Bombay on 30th June 2006. The Scheme resulted in all of the assets
and liabilities of EKL Appliances Limited being transferred to the
Company.
3. Issue/Allotment of Securities:
On December 21, 2005, the Company issued 217,200 GDRs representing 217,200
equity shares of the Company ('equity shares') at a price of US$10 each to
Gallo SAS, a Thomson Group entity against subscription money received on
September 30, 2005.
On January 31, 2006, the Company has allotted 14,242,488 equity shares to the
shareholders of erstwhile Videocon International Limited pursuant to Scheme of
Amalgamation of Videocon International Limited with the Company, as sanctioned
by Hon'ble High Court of Judicature at
On February 7, 2006, the Company issued Foreign Currency Convertible Bonds
('FCCBs') of an aggregate amount of US$ 90,000,000 (United States Dollar Ninety
Million). These FCCBs are listed on Singapore Exchange Securities Trading
Limited.
On March 31, 2006, the Company has allotted 4,158,870 preference shares of Rs.
100/- each to the Preference shareholders of erstwhile Videocon International
Limited pursuant to Scheme of Amalgamation of Videocon International Limited
with the Company, as sanctioned by Hon'ble High Court of Judicature at
On July 24, 2006, the Company issued Foreign Currency Convertible Bonds
('FCCBs') of an aggregate amount of US$105,000,000 (United States Dollar One
Hundred Five Million). These FCCBs are listed on Singapore Exchange Securities
Trading Limited.
On July 31, 2006, the Company has allotted 441,990 preference shares of
Rs.100/- to Life Insurance Corporation of
SUBSIDIARY COMPANIES:
On December 13, 2005, Eagle Corporation Limited became a
Wholly Owned Subsidiary of the Company after the Company acquired the balance
81% equity stake in Eagle Corporation Limited.
During the year under review, Sky Billion Trading Limited, Trend Limited,
Videocon Industrial Finance Limited, Gruhaupyogi Electronics Appliances Private
Limited and Videocon (Cayman) Limited ceased to be subsidiaries of the Company.
Further, during the year under review, Venus Corporation Limited became a
subsidiary of the Company.
As such, as on 30th September 2006, the Company had 11 subsidiaries viz.,
Paramount Global Limited, Middle East Appliances LLC, Mars Overseas Limited,
Videocon Global Limited, Powerking Corporation Limited, Gajanan Electronics and
Supply Pvt. Ltd., Mayur Household Electronics Appliances Pvt. Ltd., Godavari
Consumer Electronics Appliances Pvt. Ltd., Videocon (Mauritius) Infrastructure
Ventures Limited, Eagle Corporation Limited and Venus Corporation
Limited.
The Company has received an exemption from the Central
Government under Section 212(8) of the Companies Act, 1956 with regard to
attaching of the Balance Sheet, Profit and Loss account and other documents of
the subsidiaries for the year 2005-2006. The Company undertakes that annual
accounts of the subsidiary companies and the related detailed information will
be made available to any member of holding and subsidiary Company seeking such
information at any point of time upon receipt of request for the same. Further,
the annual accounts of subsidiary companies will also be kept for inspection at
its registered office and also at registered office of the respective
subsidiary.
A summary of the key financials of the Company's subsidiaries is included
in this Annual Report.
INDUSTRY,
STRUCTURE AND DEVELOPMENTS
CONSUMER ELECTRONICS & HOME APPLIANCES
The Indian consumer electronics products and household appliances industry has
an annual turnover of approximately Rs.190 billion.
The Industry can be broadly categorized into two segments.
a. the consumer electronic products segment includes products such as
TVs, video products and home entertainment products and
b. the household appliances segment includes products such as
refrigerators, washing machines, air conditioners, microwave ovens, vaccum
cleaners, dishwashers and small appliances such as irons, heaters, vaccum
cleaners, fans, mixers and water purifiers.
The key products in the Indian consumer electronics products
and household appliances industry are colour TVs, refrigerators, air
conditioners and washing machines. At the product level, within the Consumer
Electronic and household appliances Industry in
The Key growth drivers of the Industry are:
* rising income levels and increasing affordability; fuelling consumerism
and growth in demand for aspirational goods
* change in perception of Consumer goods as 'basic necessities' as
opposed to 'luxuries', largely driven by increased awareness and
advertising.
* rationalizing of prices by key players, due to a conducive tariff
policy by the Government.
* increasing demand for technology driven replacement of consumer goods
and household appliances.
Colour TVs
Colour TVs are the dominant product in the Indian consumer electronics products
and household appliances market both by volume and by value. The leading brands
in the colour TV market are Videocon, Philips, Onida, Samsung, LG and
Sony.
As per company, top six brands in the Indian colour
CRT TV market have consolidated their dominance during the past few years and
accounts for about 75% of the market share.
The Indian CTV market is predoniminantly a small-to-medium segment
market(14', 20' and 21'). The large CTV segment ( >21'), though growing
rapidly, accounts for around 5% of the total demand.
The market demand for colour CRT TVs is expected to have increased around
17%-20% in the year ending 31 December 2006. The key trend in the industry has
been the increasing demand for flat colour CRT TVs. Flat colour CRT TVs now account
for approximately 60% of the total colour CRT TV market. The growth in demand
in this sector of the colour CRT TV market has been driven by a reduction in
the price differential between 21' conventional colour CRT TVs and flat colour
CRT TVs, and increasing consumer preference for flat colour CRT TVs. It is
expected that the growth in the CTV segment in
A key trend that differentiates the Indian CRT TV market from the
developed world is the fact that unlike the developed western markets, where
the demand is shifting from the Cathode Ray Tube (CRT) based technology to
LCD/Plasma-based technology; in
The key growth drivers of
CRT TV business in
* Low penetration levels- The penetration level of CRT TVs in
* Electrification in rural
* Replacement of TVs due to ageing.
* Multiple TV demand from Middle and high income categories.
* Price erosion and easy and inexpensive finance availability.
* Sports events/festivals
* Products innovations.
Refrigerators
The growth in the refrigerators sector is minimal in recent years largely
on account of rising input prices, shrinking margins and the poor financial
health of the refrigerator divisions of most of the major consumer electronics
products and household appliances manufacturers.
Air Conditioners
Globally, split air conditioners account for 80 per cent. of
room air conditioner sales. In
Increasing affordability, acceptance of air conditioners as a utility
product rather than a luxury item and historic low penetration of air
conditioners in
Washing Machines
The Washing Machines industry has witnessed slow growth on account of a low
acceptance among masses due to availability of cheap manual labour as a
substitute. Despite the aggressive pricing policy adopted by the players,
demand remained largely inelastic to price. The growth was restricted to urban
areas, whereby the rising number of working women offers growth potential.
Washing machines still feature down below on the average consumer's purchase
list.
Glass Shells
Glass Shells (glass panels and funnels), account for nearly
60% of CRT costs. The manufacturing process for glass shells is
capital-intensive. Videocon is one of the major players in the glass shell
business in
INDIAN OIL AND GAS INDUSTRY
Per capita consumption of primary energy and hydrocarbons of
Demand
for Crude Oil:
Demand for crude oil is derived from the demand for petroleum products, which
is largely determined by the growth in the economy. High speed diesel oil,
motorspirit, liquefied petroleum gas, naphtha and fuel oil account for the bulk
of the consumption of petroleum products in
As the gap between demand and production continues to widen,
Recent Developments in Oil
Exploration in
Since the early 2000's, oil majors such as OIL, IOC and ONGC have actively commenced
exploration abroad. ONGC has floated an international arm, ONGC Videsh Limited,
which has a presence in
Recently, the Government of India, under the National Common Minimum Programme,
has placed greater emphasis on increasing indigenous production and on
acquiring equity and gas abroad. The government is planning to increase
indigenous production through the accelerated domestic exploration of oil and
gas, through improved oil recovery from existing fields and diversification of
the fuel base with an increased reliance on gas.
Natural gas has gained tremendous importance, both as a fuel and a feedstock
over the past 20 years. Natural gas is used as a feedstock in fertiliser and
petrochemical units. It is also used as a fuel in power plants using combined
cycle technology, and in other industries such as glass, ceramics, sponge iron
and tea estates. In western countries, natural gas is used as a heating fuel (for
residential and commercial buildings) and as a domestic fuel.
Recent significant developments in
the Exploration & Production Sector
* The area under exploration has increased over three times in the last
four years as a result of implementation of New Exploration Licensing
Policy.
* Major/significant discoveries have been made through sustained
exploration efforts. These discoveries include large gas discoveries in
Krishna-Godavari deep water and oil discoveries in Rajasthan and significant
gas discoveries in
* In line with the objective of National Energy Security, ONGC Videsh
Ltd., and other Oil PSUs are pursuing opportunities to acquire equity oil and
gas abroad. Today, Indian Oil PSUs have presence in E&P sector in 13
countries.
NELP
OPPORTUNITIES
AND THREATS
STRENGTHS
* The Company manufactures, assembles and distributes a wide range of
consumer electronics products and household appliances including CRT TVs, Home
entertainment systems, PDP and LCD TVs, Refrigerators, Washing Machines, Air
Conditioners, Small appliances and Components such as Glass Shell (Panels and
Funnels)
* The Company has strategically located manufacturing bases, both
internationally and domestically. Domestically and Internationally, the Company
is close to key target markets, thus reducing distribution, transportation and
warehousing expenditure and allowing them to benefit from localised sales tax
exemptions by supplying goods that are sold in the same state in which they are
manufactured. Internationally, the Company's manufacturing facilities are
strategically located to supply goods to targeted emerging markets of Eastern
Europe and
* The Company has one of the most extensive sales and distribution
networks in
* The Company has adopted multibrand strategy which is more effective in
acquiring a greater aggregate share of the market than a strategy focusing on
the promotion of only one key brand, as the Company is able to target different
socio-economic market segments with each brand.
* The Company through Eagle Corporation Limited, a wholly owned
subsidiary, an offshore entity which acquired various companies engaged in the
manufacture of CPTs from Thomson during 2005, has established operations in
markets that the Company is targeting for consumer electronics products and
household appliances. This gives the Company new technologies and production
methods and also enables them to reduce the time and expenditure involved in
the development of these markets.
* The Company has manufacturing advantages based on mass production and
integration of processes. The Company is able to control the production costs
effectively on account of Mass production scale, Vertical Integration of
manufacturing process, leading positions in the manufacture of glass shells and
CPTs.
* The Oil and gas business provides the Company with a stable income
stream. This income provides a ready supply of funds for working capital and
future expansion plans.
* The Oil produced by the Company is of high quality. The Rawa field
yields Rawa crude, a premium light crude with a sulphur content below 0.01 per
cent. which therefore is able to command a price amongst the highest in the
crude oil market. Rawa crude is priced with reference to Tapis and Minas crude,
which is a high priced basket of oils.
WEAKNESSES:
* The Videocon Brand is popular in the Domestic Market only. It is yet to
be established as a full fledged Brand in International Market.
* The Working Capital Cycles are longer in nature.
OPPORTUNITIES:
* There are opportunities to increase penetration in the Indian consumer
electronic products and household appliances market. This can be achieved
through growth of customer base and enlargement of the Company's product
portfolio.
* There are opportunities to further develop the multibrand strategy.
Through the addition of the Electrolux and Kelvinator brands following the EKL
Merger, the Company expect to further expand the use of such strategy in the
household appliances market.
* There are opportunities to improve level of service to network of
dealers and distributors for example by providing more frequent deliveries in
order to reduce the dealers inventory levels and therefore costs.
* The Large scale operations can improve the margins of the Company
* There are opportunities to outperform in Domestic Market with
Innovative Products such as Slim Televisions. LCDs & PDPs etc.,
* To make forays into Flat Panel Display & Segment.
* There is scope to identify additional oil and glass blocks that are
suitable for exploration and have potential for production. The Company plan to
bid for the rights to exploit the hydrocarbons blocks which shall be open for
bidding in future.
THREATS:
* Due to stiff competition, prices are continuously reducing. If the
costs are not controlled then it may prove to be a threat and margins will be
under pressure.
* The Cost of marketing, advertising and after sale services are increasing
tremendously.
* The Cost and interest rates continue to be the key issues that are
likely to shape the growth rates of the Industry. There was no change in the
Interest rates in the past two years; however, the interest rates have started
increasing.
OUTLOOK
* The Company has adopted the best and the most sophisticated technology
to suit Indian needs. The company as a part of global diversification has been
planning international forays in the same industry and has successfully forayed
into international market either directly or indirectly.
* The consumer electronics sector is undergoing a major transformation.
The analog technologies are giving way to digital technologies. Digitalization
in turn is leading to convergence of consumer, computer, communication,
broadcast cable technologies and the contents. A digital signal can be far more
easily processed than an analog one. The company is planning to tap this.
* The Company as a part of reducing manufacturing cost of products has
explored the possibility of manufacturing various components at the in-house
facility by setting up standalone facilities.
Corporate Profile
The Videocon group emerges as a USD 2.5 Billion global conglomerate continuing
to set trends in every sphere of its activities from a conference room sized
assembly line in 1979.
Today
the group operates through 4 key sectors:
v
Consumer Durables
v
Thomson CPT
v
CRT Glass
v
Oil & Gas
Consumer Electronics, Home Appliances
& Compressor manufacturing in India
They enjoy a pre-eminent position in terms of sales and customer satisfaction
in many of their consumer products like Colour Televisions, Washing Machines,
Air Conditioners, Refrigerators, Microwave ovens and many other home
appliances, selling them through a Multi-Brand strategy with the largest sales
and service network in
Display industry and its components
With the Thomson
acquisition Videocon has emerged as one of the largest Colour Picture tube
manufacturers in the world operating in
Colour Picture Tube Glass
Videocon is one of the largest CPT Glass manufacturers in the world with a high
level of experience and technical expertise operating through
Oil and Gas
An important asset
for the group is its Ravva oil field with one of the lowest operating costs in
the world producing 50,000 barrels of oil per day. The group has ambitious
plans for expansion in this sector globally.
Videocon’s
Lifestyle Expo set to make a Big Splash
The Videocon
Lifestyle Expo will run for 3 days and along with the product showcase, there
is a shopping festival organised, where consumers can purchase Videocon
products at attractive prices, with 0% finance options also being available.
Lucky Draws and entertainment for ladies & kids are also part of the
event.
Also launched at
this time is Videocon’s mega consumer offer, the Hum-Tum Offer. A celebration
of the spirit of togetherness, the Hum-Tum Offer gives the consumers many
exciting product combinations to choose from, across the product categories of
Colour TVs, Refrigerators, Washing Machines, DVD Players & Home Theatres.
The combination offer is unique in that it allows the consumer to choose from
among 15 combinations according to his needs, at extremely attractive
prices.
The product
combinations in Hum-Tum have been created with special care. “Videocon is known
for always keeping the customer’s best interests in mind, and this time is no
different. Hum-Tum combinations are tailored to suit every need, at prices that
are irresistible”, said Mr. Sunil Tandon, Vice-President, Marketing,
Videocon.
This is reconfirmed
by Mr. Pawan Kalra, VP, HA Sales, who says, “The combination prices are truly
amazing. For example, where else can one avail of a combination of a
fully-automatic washing machine and a 250-litre frost-free refrigerator for
just Rs. 18990? Other combination prices are equally challenging, both in
electronics and appliances.” With combinations of TVs with DVD players, TV with
refrigerator, washing machines with refrigerator, TVs with different mobile
phones, and many others, the list seems endless.
Scheduled to travel
all over the country, including Maharashtra, Gujarat, Uttar Pradesh,
This is the first
time that the company has launched a countrywide series of exhibitions on such a
grand scale. According to Mr. Sunil Mehta, VP, CE Sales, Videocon, the
Lifestyle Expo is basically a fun-fair for the whole family – “One can come and
have a look at the latest technologies on offer, experience the Videocon
products hands-on, and be entertained in a variety of other ways. They have
special Plasma TV and Home Theatre displays & demonstrations, which will
enable you to truly feel the movie theatre experience; and with the exciting
Hum-Tum combinations also on offer at the Expo, it is the opportunity of a
lifetime, as well as an unforgettable experience”, he said.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.40.55 |
|
|
1 |
Rs.82.06 |
|
Euro |
1 |
Rs.55.35 |
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 |
NO |
|
--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 EXPLANATIONS
|
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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|