MIRA
INFORM REPORT
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Report Date : |
03.08.2007 |
IDENTIFICATION DETAILS
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Name : |
MRF LIMITED |
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Registered
Office : |
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Country : |
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Financials (as
on) : |
30.09.2006 |
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Date of
Incorporation : |
05.11.1960 |
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Com. Reg. No.: |
18-4306 |
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CIN No.: [Company
Identification No.] |
L25111TN1960PLC004306 |
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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 specialty surface coatings. |
RATING & COMMENTS
|
MIRA’s Rating
: |
Aa |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
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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 32000000 |
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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
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Registered
Office : |
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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
Tel. 91-04-2239657 Fax. 91-04-2239660 E-mail. mrfdubai@emirates.net.ae Contact Person - Biju Abraham Thomas,
General v
1764, 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, v
Vadavathoor,
v
Usgao,
Ponda, v
Icchiputhur,
Arakonam, v
Sadasivapet,
Medak, v
v
Sipcot
Industrial Complex, Gummidipoondi, |
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Office : |
C – 79, Ground
Floor, Okhla Industrial Area, Phase – I, E-mail : mrfpaint.del@gnmds.global.ems.vsnl.net.in No. 2, Ground
Floor, Plot No. 374, Build Arch Terrace, Sitla Devi Temple Road, Mahim Tel. No.
91-22-24463565 E-mail : mrfpaint.bby@gnbom.globalnet.ems.vsnl.net.in E-mail : mrfpaint.mds@gnmds.globalnet.ems.vsnl.net.in No. 2, New Tel. No. :
91-33-24589830 |
DIRECTORS
|
Name : |
Mr. K. M. Mammen |
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Designation : |
Chairman & Managing Director |
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Age: |
53 Years |
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Qualification
: |
B. A. |
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Experience : |
29 Years |
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Date of
Joining : |
01.06.1985 |
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Previous
Employment : |
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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 |
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Age : |
65 Years |
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Qualification
: |
B.A. |
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Experience : |
44 Years |
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Date of
Joining : |
05.11.1960 |
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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 |
KEY EXECUTIVES
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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 |
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 : |
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Imports from : |
Europe and |
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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 |
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Automobile Tyres |
Nos. |
@ |
19772000 |
17596948 |
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Automobile Tubes |
Nos. |
@ |
18600000 |
16052918 |
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Tread Rubber |
MT |
7,946 |
8,943 |
1548 |
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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 |
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Specialty Surface
Coatings |
KL |
@ |
2,000 |
2114 |
GENERAL INFORMATION
|
No. of
Employees : |
9556 |
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Bankers : |
v
State
Bank of v
Chennai,
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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, |
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|
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Associate : |
v
Tiruvottiyur,
Chennai, v
Vadavathoor,
v
Usgao,
Ponda, v
Icchiputhur,
Arakonam, v
Sadasivapet,
Medak, v
v
Sipcot
Industrial Complex, Gummidipoondi, |
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Subsidiaries: |
v
Funskool
( 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 |
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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 |
30.09.2006 |
30.09.2005 |
30.09.2004 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
42.400 |
42.400 |
42.400 |
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2] Reserves & Surplus |
8200.500 |
7498.100 |
7191.700 |
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NET WORHT |
8242.900 |
7540.500 |
7234.100 |
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LOAN FUNDS |
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1] Secured Loans |
2436.800 |
2995.700 |
1663.200 |
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2] Unsecured Loans |
4851.800 |
4103.900 |
3940.400 |
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TOTAL
BORROWING |
7288.600 |
7099.600 |
5603.600 |
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|
|
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TOTAL
|
15531.500 |
14640.100 |
12837.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
6496.700 |
5368.100 |
4192.200 |
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Capital work-in-progress |
662.600 |
1519.900 |
1240.100 |
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INVESTMENTS |
702.300 |
137.500 |
762.100 |
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Deferred Tax Assets |
0.000 |
16.300 |
36.600 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Interest Accrued on investment |
0.000 |
0.600 |
0.600 |
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Inventories |
5656.300 |
5535.600 |
4820.400 |
|
Sundry Debtors |
5393.600 |
4623.400 |
3983.600 |
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Cash & Bank Balances |
533.200 |
460.200 |
367.200 |
|
Other Current Assets |
0.000 |
2.100 |
1.600 |
|
Loans & Advances |
1385.100 |
1120.000 |
1364.200 |
|
Total Current Assets |
12968.200 |
11741.900 |
10537.600 |
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Less : |
|
|
|
|
Current Liabilities |
4564.800 |
3205.800 |
2924.000 |
Provisions
|
733.500 |
937.800 |
1006.900 |
Total Current Liabilities
|
5298.300 |
4143.600 |
3930.900 |
|
Net Current Assets |
7669.900 |
7598.300 |
6606.700 |
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|
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Miscellaneous Expenses |
0.000 |
0.000 |
0.000 |
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TOTAL
|
15531.500 |
14640.100 |
12837.700 |
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
30.09.2006 |
30.09.2005 |
30.09.2004 |
|
|
Sales Turnover |
42336.600 |
34371.300 |
29932.400 |
|
|
Other Income |
524.300 |
892.500 |
837.200 |
|
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Total Income |
42860.900 |
35263.800 |
30769.600 |
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|
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Profit/(Loss) Before Tax |
998.100 |
553.400 |
429.000 |
|
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Provision for Taxation |
199.000 |
150.300 |
141.000 |
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Profit/(Loss) After Tax |
799.100 |
403.100 |
288.000 |
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|
|
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Total Earnings |
5025.500 |
4265.700 |
NA |
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Expenditures : |
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|
|
|
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Manufacturing Expenses |
1107.600 |
911.900 |
713.900 |
|
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Administrative Expenses |
3183.800 |
2869.300 |
2629.800 |
|
|
Raw Material Consumed |
26151.200 |
21255.900 |
17356.000 |
|
|
Miscellaneous Expenses |
267.200 |
141.700 |
613.600 |
|
|
Salaries, Wages, Bonus, etc. |
1961.800 |
1702.400 |
1583.200 |
|
|
Interest |
492.700 |
406.000 |
281.500 |
|
|
Power & Fuel |
2150.400 |
1804.500 |
1607.800 |
|
|
Depreciation & Amortization |
1456.600 |
1103.200 |
958.800 |
|
|
Other Expenditure |
5091.500 |
4515.500 |
4596.000 |
|
Total
Expenditure |
41862.800 |
34710.400 |
30340.600 |
|
QUARTERLY RESULTS
|
PARTICULARS |
31.12.2006 [1st Quarter.] |
31.03.2007 [2nd Quarter.] |
30.06.2007 [3rd Quarter.] |
|
Sales Turnover |
10578.300 |
10835.200 |
11334.300 |
|
Other Income |
37.800 |
36.300 |
40.700 |
|
Total Income |
10616.100 |
10871.500 |
11375.000 |
|
Total Expenditure |
9726.100 |
9821.700 |
10198.400 |
|
Operating Profit |
890.000 |
1049.800 |
1176.600 |
|
Interest |
111.200 |
138.900 |
124.500 |
|
Gross Profit |
778.800 |
910.900 |
1052.100 |
|
Depreciation |
347.400 |
371.200 |
390.000 |
|
Tax |
141.800 |
182.800 |
237.100 |
|
Reported PAT |
289.600 |
357.400 |
425.000 |
Notes
2006-12 Quarter 1
Expenditure
Includes (Increase)/Decrease in Stock in Trade Rs (161.50) million Consumption
of Raw Materials Rs 7492.90 million Staff Cost Rs 539.00 million Other Expenditure
Rs 1855.70 million Tax indicate Provision for Taxation (including Fringe
Benefit Tax & Net of Deferred Tax) EPS is Basic & Diluted 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 January 25, 2007. 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. Provision on account of revised Accounting Standard on
Employee benefit (AS-15) issued by the ICAI has been made for on an estimated
basis and there is no significant impact of the same on the results of the
quarter ended December 31, 2006. The adjustment to opening revises required
under the transitional provision of AS-15 will be made at the year end. 4.
Figures have been regrouped wherever necessary. 5. Details of Number of
Investor complaints for the quarter ended 31.12.2006: Beginning-0 Received-1
Disposed of-1
200703 Quarter 2 –
Notes Expenditure Includes (Increase)/Decrease in Stock in Trade Rs
(270.60) million Consumption of Raw Materials Rs 7850.40 million Staff Cost Rs
552.50 million Other Expenditure Rs 1689.40 million Tax indicate Provision for
Taxation (including Fringe Benefit Tax & Net of Deferred Tax) EPS is Basic
& Diluted 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 01 Complaints disposed off during the quarter 01 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 19, 2007. 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.
200706 Quarter 3
---
Notes Expenditure Includes (Increase)/Decrease in Stock in Trade Rs
289.20 million Consumption of Raw Materials Rs 7476.60 million Staff Cost Rs
605.40 million Other Expenditure Rs 1827.20 million EPS is Basic & Diluted
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 02 Complaints disposed off during the quarter 02 Complaints unresolved
at the end of the quarter Nil 1. The results for the quarter ended June 30, 2007
have been subjected to Limited Review by the Statutory Auditors reviewed by the
Audit Committee and taken on record by the Board of Directors at its meeting he
on July 26, 2007. 2. Provision for taxation include Fringe Benefit Tax and
Deferred Tax (Net} and is based on income presently determined and subject to
appropriate revision / adjustment on final determination at the year end. 3.
The Board of Directors has approved the payment of interim dividend of Rs 3/-
per equity share (30%), payable to all shareholders as on the record date,
August 13, 2007. 4. Previous periods figures have been regrouped / rearranged
where necessary.
KEY RATIOS
|
PARTICULARS |
30.09.2006 |
30.09.2005 |
30.09.2004 |
|
Debt-Equity Ratio |
0.91 |
0.86 |
0.72 |
|
Long Term Debt-Equity Ratio |
0.56 |
0.51 |
0.45 |
|
Current Ratio |
1.64 |
1.68 |
1.83 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
2.40 |
2.26 |
2.21 |
|
Inventory |
7.57 |
6.64 |
6.76 |
|
Debtors |
8.45 |
7.99 |
7.53 |
|
Interest Cover Ratio |
2.27 |
1.89 |
3.91 |
|
Operating Profit Margin(%) |
6.08 |
5.44 |
6.88 |
|
Profit Before Interest And Tax Margin(%) |
2.64 |
2.23 |
3.68 |
|
Cash Profit Margin(%) |
4.61 |
3.96 |
5.04 |
|
Adjusted Net Profit Margin(%) |
1.16 |
0.75 |
1.84 |
|
Return On Capital Employed(%) |
7.40 |
5.57 |
8.95 |
|
Return On Net Worth(%) |
6.25 |
3.47 |
7.70 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.3515.00/- |
|
Low |
Rs.3467.05/- |
LOCAL AGENCY FURTHER INFORMATION
History
MRF Limited, 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,
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
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
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
Volvo, the only MNC which has entered the truck market in
1946
A young entrepreneur, K. M.
Mammen Mappillai, opened a small toy balloon manufacturing unit in a shed at
Tiruvottiyur,
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,
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
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
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
1967
MRF became the first Indian
company to export tyres to
1973
MRF scored a major breakthrough by
being among the very first in
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
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
1984
Sales crossed INR two billion.
MRF tyres were the first tyres selected for fitment onto the Maruti Suzuki 800
-
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
1987
MRF crossed the INR three
billion mark and also became the No. 1 tyre company in
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
1989
MRF launched the MRF ZIGMA CC
Radial synchronising with the MRF World Series Cricket Tournament for the
Jawaharlal Nehru Trophy sponsored by the company. The Chief Minister of Tamil
Nadu, Dr. M. Karunanidhi, awarded MRF the Special Export Award. MRF also opened
the MRF Tyredrome,
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
MRF was selected as one of
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
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
Total Income
4260.73, 3482.09 Profit before tax and exceptional Items 63.40 59.52
Add/[Less]: Exceptional Items 36.41* (4.78) Profit before Taxation 99.81
55.34Provision for Taxation 19.90 15.03Net Profit 79.91 40.31
Purchase tax provision written back/sales tax refunds due for earlier years on
account of a favourable judicial decision.
Despite unprecedented increase in cost of raw materials, immense competition in
the industry with prices and discounts posing a challenge in passing on the
increase in the cost to the customers, the company has achieved satisfactory
results last year due to cost cutting measures undertaken over a period of
time.
Two interim dividends of 30% each for the year ended 30th September, 2006 were
declared by the Board of Directors on 20-07-2006 and on 30-10-2006. The
Directors now recommend to the Annual General Meeting the declaration of final
dividend of 140% for the year ended 30-09-2006. With this, the total dividend
for the entire year works out to 200%. The total amount of dividends aggregates
to Rs.84.8 Millions.
The Directors recommend that after making provision for taxation and proposed
dividend, the amount of Rs.702.4 Millions be transferred to General Reserve.
With this, the company's reserves and surplus stand at Rs.8200.5
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.
The Management Discussion and Analysis gives an overview of the developments in
human resources/industrial relations during the year.
Exports:
Company's exports
for the year ended 30th September, 2006 were at Rs.502.55 Millions as against
Rs.4265.7 Millions for the previous year which works out to an increase of
almost 18% over the previous year.
This growth has come about by increasing coverage of existing markets as well
as adding new markets to which the entire range of MRF products are
exported.
With MRF's offices located in
The sale of Conveyor belting has shown excellent growth with sales to most of
the major markets in
An ambitious target has been set for the year to come and focus markets have
been identified. Strategies to achieve a dominant market share are in place in
each of these focus markets.
Prospects for the Current Year:
The rising prices of raw materials such as natural rubber, oil and oil
derivatives which are used in the tyre manufacture have been the key concern
for the tyre industry. Currently, the trend of raw material prices is very
volatile. Since the tyre industry is highly competitive and price sensitive, it
is unable to pass on completely the increase in raw material costs to its customers.
Despite the above, the company hopes to record satisfactory results on account
of MRF's high brand preference and customer's trust in the MRF products.
Directors' Responsibility
Statement:
In compliance with the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that:
In the preparation of the annual accounts, the applicable accounting standards
have been followed and that there are no material departures;
They have, in selection of the accounting policies, consulted in the statutory
auditors and applied them consistently making judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state of
affairs of company at the end of the financial year and of the profit of the
company for that period;
Proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with provisions of the Act for safeguarding
the assets of the company and for preventing and detecting fraud and other
irregularities; and
The annual accounts
have been prepared on a going concern basis.
Future plan of Action:
Newer models of passenger cars are continuously launched by the multinational
automotive industries and R & D efforts are taken to meet their stringent
requirements. Priority is being given to develop tyres with lower rolling
resistance, higher speed capabilities and improved fuel efficiency. Efforts are
taken to equip with additional testing facilities to meet the specific customer
requirements.
Special attention will also be given to develop products such as tyres, PCTR
and Conveyor belting, for the export market, meeting the global standards of
quality and performance.
With the development of golden quadrilateral highways connecting all
metropolitan cities, a tremendous growth in the road transport is expected. All
efforts are taken to develop high performance truck tyres for these operating
conditions. Installation and utilization of high. precision manufacturing
equipments are planned to achieve the narrow tolerances required, particularly
in radial tyres.
Efforts are also on in developing environmental friendly raw materials to meet
certain global requirements on pollution.
INDUSTRY STRUCTURE & DEVELOPMENT:
The tyre industry consists
of major tyre companies producing truck tyres and other range of tyres and
certain smaller companies making only non truck tyres. The market for tyre is
primarily driven by the Vehicle Manufacturers whose growth determines the market
size.
Among the Truck manufacturers, Tata Motors and Ashok Leyland lead with Volvo,
Eicher Motors, Force Motors, etc., coming into the market in recent times The
market is undergoing a change since multi axle vehicles are more in demand and
the manufacturers are accordingly changing their product mix.
Other than Truck, major growth has been witnessed in Passenger Cars, which is
going through a buoyant period. Tractors also have witnessed remarkable growth
in recent times while Light Motorcycle production continues to grow year on
year.
One of the major factors affecting tyre industry last year has been the
unprecedented rise in the price of raw materials particularly natural rubber
rising from Rs.65 to Rs.120 per kg in a matter of months. This has created
major shocks in costs and prices of tyres. Rubber price has mellowed slightly
lately though it is still ruling high.
EXPORTS:
The margins on exports were
under pressure during the current year due to the unprecedented increase in the
prices of raw materials. Over a period of time, corrections were made and the
outlook on the export front for the next year is quite positive.
The Company achieved an Export turnover of Rs.502.55 Millions during the year
2005-06 as against Rs.426.57 Millions in 2004-05. This represents a growth of
18% over the previous year. This performance was possible by increasing
coverage of existing markets as well as adding new markets to which the entire
range of MRF products are exported.
The Company has received the 'Highest Export Award' from CAPEXIL and the 'Top
Export Award' from AIRIA during the year.
NON
Conveyor
Belts:
The demand was
quite buoyant from the export market as there is an appreciation for the
quality of the conveyor belting that they manufacture and export. The sale of
conveyor belting has shown excellent growth with sales to most of the major
markets in
Speciality Coatings:
The Speciality Coatings division achieved a turnover of Rs.384.8 Millions in
2005-06 as against Rs.392.8 Millions in 2004-05. During the year, the
disruption in operation in Gummidipoondi factory continued and manufacturing
was done by out-processing. The margins were affected due to sharp increase in
the cost of raw materials.
They expect to add additional manufacturing facility during 2006-07 and expect
to come back to earlier growth rates during the year 2007-08.
PERFORMANCE OF THE COMPANY:
The sales turnover of the Company during the year increased by 33.17% from
Rs.34371.3 Millions in 2004-05 to Rs.42336.6 Millions in 2005-06. Earnings
before depreciation and interest [EBIDTA] amounted to Rs.2583.3 Millions
against Rs.2025.0 Millions in the provisions year. After providing for
depreciation, interest and income tax, the net profit for the year was Rs.799.1
Millions (after adjusting exceptional items) as compared to Rs.403.1 Millions
(after exceptional items) in the previous year.
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.
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
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
Fixed
Assets :
Land and Building,
Plant and Machinery, Moulds, Vehicles
|
AUDITED
FINANCIAL RESULTS FOR THE YEAR ENDED 30th SEPTEMBER, 2006 [Rs in Millions] |
CONSOLIDATED
FINANCIAL RESULTS |
|||
|
|
9 Months |
3 Months |
Year ended |
Year ended 30.09.06 |
|
|
|
|
|
|
|
|
30536.800 |
11946.300 |
8933.700 |
42484.100 |
|
Less: Excise Duty |
3621.300 |
1473.300 |
1064.200 |
5094.600 |
|
Other Income |
63.200 |
61.000 |
126.200 |
123.400 |
|
Total Expenditure |
|
|
|
|
|
a) (Increase)/Decrease in stock in trade |
57.200 |
50.200 |
(179.500) |
106.400 |
|
b) Consumption of raw materials |
18711.500 |
7439.700 |
5832.100 |
26152.900 |
|
c) Staff Cost |
1436.100 |
565.200 |
457.900 |
2002.400 |
|
d) Other Expenditure |
4936.100 |
1737.400 |
1571.400 |
6671.600 |
|
Interest |
363.200 |
129.500 |
94.800 |
492.900 |
|
Depreciation |
1043.300 |
413.300 |
319.100 |
1457.300 |
|
Profit before tax (1+2-3-4-5) |
435.300 |
198.700 |
199.900 |
629.400 |
|
Add/(Deduct): Exceptional Item |
-- |
364.100 |
(41.800) |
364.100 |
|
Profit Before Taxation |
435.300 |
562.800 |
158.100 |
993.500 |
|
Provision for Taxation (including Fringe Benefit Tax and Net of
Deferred Tax) |
156.000 |
43.000 |
44.600 |
200.500 |
|
Net Profit (8-9) |
279.300 |
519.800 |
113.500 |
793.000 |
|
Paid-up Equity Share Capital (Face Value of Rs.10/- each) |
42.400 |
42.400 |
42.400 |
42.400 |
|
Reserves Excluding revaluation reserves |
-- |
-- |
|
8200.300 |
|
Basic and diluted EPS for the period |
Rs. 65.85 |
Rs. 122.56 |
Rs.56.77 |
Rs.186.98 |
|
Aggregate of non-promoter shareholding - |
|
|
|
|
|
No. of Shares |
3120129 |
3121679 |
3132168 |
3121679 |
|
% of Shareholding |
73.57 % |
73.61 % |
73.85% |
73.61% |
|
SEGMENTWISE REVENUE, RESULTS AND CAPITAL
EMPLOYED [Rs in Millions] |
CONSOLIDATED
FINANCIAL RESULTS |
|||
|
|
9 Months |
3 Months |
Year ended |
Year ended 30.09.06 |
|
|
|
|
|
|
|
(a) Rubber Products |
26662.700 |
10464.200 |
37126.900 |
26152.900 |
|
(b) Others |
316.000 |
69.800 |
385.800 |
386.400 |
|
Total |
26978.700 |
10534.000 |
37512.700 |
37512.900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Rubber Products |
753.000 |
336.100 |
1089.100 |
1084.100 |
|
(b) Others |
45.500 |
[7.900] |
37.600 |
38.200 |
|
(c) Exceptional Item |
-- |
364.100 |
364.100 |
364.000 |
|
|
|
|
|
|
|
Total |
798.500 |
692.300 |
1490.800 |
1486.400 |
|
Less: Other Unallocable, |
363.200 |
129.500 |
492.700 |
492.900 |
|
|
|
|
|
|
|
Total Profit Before Tax |
435.300 |
562.800 |
998.100 |
993.500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Rubber Products |
|
|
14897.000 |
14886.900 |
|
(b) Others |
|
|
136.700 |
150.500 |
|
|
|
|
|
|
|
Total |
|
|
15036.700 |
1503.7400 |
Notes:
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 20th December, 2006.
The Board has
recommended a Final dividend of 140 % for the year ended 30.09.2005, which
along with the two interim dividends of 30% each already paid, works out to
200%.
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.
Details of Number
of Investor Complaints for the quarter ended 30.09.2006 - beginning-0,
received-5, disposed of-5.
Figures have been
regrouped wherever necessary.
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.40.36 |
|
|
1 |
Rs.82.18 |
|
Euro |
1 |
Rs.55.31 |
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 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 |
|