MIRA
INFORM REPORT
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Report Date : |
29.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
KENNAMETAL INDIA LIMITED |
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Formerly Known As : |
KENNAMETAL WIDIA
INDIA LIMITED |
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Registered Office : |
8 / 9th Mile, Tumkur Road, Post Bag 7300, Bangalore
– 560 073, Karnataka |
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Country : |
India |
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Financials (as on) : |
30.06.2007 |
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Date of Incorporation : |
21.09.1964 |
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Com. Reg. No.: |
08-1546 |
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CIN No.: [Company
Identification No.] |
U27109KA1964PLC001546 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRK05838A |
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PAN No.: [Permanent
Account No.] |
AACCK4472B |
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Legal Form : |
It is a public limited liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of Hard Metal Products. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 7900000 |
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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 and reputed Multi-National Company having fine track. Available information indicates high financial responsibility of the company. Financial position of the company is good. Business is active. Payments are always correct and as per commitment. The company can be considered good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office / Factory : |
8 / 9th Mile, Tumkur Road, Post Bag 7300, Bangalore – 560 073, Karnataka, India |
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Tel. No.: |
91 – 80 – 2839 4321 / 2839 4322 / 2839 4323 / 2839 4324 |
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Fax No.: |
91 – 80 – 2839 4708 / 2839 0129 / 2839 4325 / 28397572 |
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E-Mail : |
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Website : |
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Factory 1 : |
Patancheru Plant 34/35 KM, Sangareddy Road, P.O. Muthangi, District Medak -
502 300, Andhra Pradesh |
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Tel. No.: |
91-8452-242617 / 242678 / 242617 / 242700 |
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Fax No.: |
91-8452-242680 / 242616 |
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E-Mail : |
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Factory 2 : |
Bangalore Plant |
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Branches : |
Located at : · Bangalore · Baroda · Bhopal · Mumbai · Kolkata · Chandigarh · Hyderabad · Jamshedpur · Kanpur · Nagpur · New Delhi · Pune · Ranchi · Chennai |
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Overseas Office : |
Located at
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DIRECTORS
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Name : |
Mr. M. N. Bhagwat |
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Designation : |
Chairman |
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Name : |
Mr. Rakesh Makhija |
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Designation : |
Director |
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Date of Birth/Age : |
24.07.1951 |
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Qualification : |
B.Tech (Chemical Engineer) Indian Institute of Technology, New Delhi. |
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Experience : |
He began his stint at Tata Honeywell in 1 989 as the Regional Manager
for North India. In 1997, he was nominated to the Tata Honeywell Board of
Directors and soon after named as Chief Executive Officer and Managing
Director. In April, 2000 he was appointed Country Manager and Managing
director of Hoenywell International. He is presently the Managing Director of
SKF India Limited. |
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Directorships in other companies : |
SKF India Limited Managing Director |
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Memberships of Board Committees Member-s
: |
Share Transfer & Shareholders'/ Investors' Redressal Committee,
SKF India Limited |
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Name : |
Mr. Bernard C McConnell |
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Designation : |
Director |
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Date of Birth/Age : |
07.05.1970 |
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Qualification : |
B.S. in Industrial Engineering, Penn. State University, C.P.A. in
Pennsylvania. MBA - Duquesne University, Pittsburgh |
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Experience : |
With Kennametal Inc : 11 years With others : 5 years |
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Name : |
Mr. Dinakar A. |
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Designation : |
Managing Director |
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Date of Birth/Age : |
30.04.1962 |
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Qualification : |
B.E. - Mechanical Engineering |
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Experience : |
2005 (Aug) - 2007 (Jan.) Managing Director Disa India Limited 1985 - 2005 Saint-Gobain/ Grindwell Norton Limited (Business Head - Coated Abrasives) |
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Directorships in other companies: |
IT Trailblazers Consulting Private Limited Director |
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Name : |
Mr. Douglas C. Philips |
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Designation : |
Director |
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Date of Birth/Age : |
26.05.1968 |
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Qualification : |
B.S. Engineering MBA - Pennsylvania State University |
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Experience : |
With Kennametal Inc : 3 years With others : 12 years |
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Name : |
Mr. E. B. Desai |
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Designation : |
Director |
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Name : |
Mr. James P McRickard |
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Designation : |
Director |
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Name : |
Mr. Frank P Simpkins |
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Designation : |
Director |
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Name : |
Mr. Mo Heshmati |
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Designation : |
Director |
KEY EXECUTIVES
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Designation : |
Mr. A.C. Poovanna |
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Address : |
Company Secretary |
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Name : |
Mr. B. Anjani Kumar |
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Designation : |
Vice President and CFO |
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Date of Birth : |
55 Years |
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Qualification : |
B. Com, B.G.L., ACA |
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Experience : |
31 Years |
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Previous Employment and Designation : |
Tecumseh Products |
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Name : |
Mr. Rupert B. Watson |
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Designation : |
Vice President-Manufacturing |
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Name : |
Mr. D. Sarathy |
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Designation : |
General Manager-Research, Development and Engineering |
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Name : |
Mr. Vikram Chopra |
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Designation : |
Vice President - Engineered Products Group
& Energy Business |
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Name : |
Mr. Rajashekara Melanta |
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Designation : |
Vice President - Human Resources |
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Name : |
Mr. Kumar Kanetkar |
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Designation : |
Managing Director |
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Name : |
Mr. Kumud Ranjan |
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Designation : |
GM- Sales -Metal Working
Business |
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Name : |
Mr. Rajashekara Melanta |
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Designation : |
Vice President- Human Resources |
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Name : |
Mr. Sushil Kumar |
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Designation : |
GM- Sales Home Market - Metal
Working Business |
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Name : |
Mr. Watson R B |
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Designation : |
Vice President - Manufacturing |
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Name : |
Mr. Raman K |
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Designation : |
Vice President – Manufacturing
Engineered Components |
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Name : |
Mr. Shende P S |
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Designation : |
Vice President - Machine Tools
Business |
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Name : |
Mr. Sumeet Tandon |
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Designation : |
Vice President- Engineered
Products Group and Energy Business |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
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Meturit AG. -
11,208,840 |
19376013 |
88.16 |
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Kennametal Inc.
- 8,167,173 |
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Public |
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Mutual Funds |
560904 |
2.55 |
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Financial
Institutions /Banks |
1040 |
0.00 |
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Foreign
Institutional Investors |
1925 |
0.01 |
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Bodies Corporate |
112027 |
0.51 |
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Individuals |
1926331 |
8.77 |
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Total |
21978240 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Hard Metal Products. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Hard metal and hard metal products |
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240.00 MT |
210.00 MT |
8597957 Nos. |
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Mining tools |
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Ř Special purpose machines including accessories |
Nos. |
200 |
125 |
91 |
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Ř Jigs and fixtures (Rs.000’s) |
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10,000 |
60,000 |
38331 |
GENERAL
INFORMATION
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No. of Employees : |
Over 1600 |
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Bankers : |
Ř Central Bank of India, Kempegowda Road, Bangalore – 560 009, Karnataka Ř Corporation Bank, Industrial Finance Branch, No. 1, Queen’s Road, Bangalore – 560 001, Karnataka Ř Standard Chartered Bank Limited, Raheja Towers, 26, M. G. Road, Bangalore – 560 001, Karnataka Ř HDFC Bank Limited Ř ICICI Bank Limited |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Price Waterhouse and Company Chartered Accountant |
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Address : |
Mittal Tower, 10th Floor, “C’ Wing, 47/6, M. G. Road, Bangalore-560001, Karnataka, India |
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Associates : |
Birla Kennametal Limited, India |
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Subsidiaries : |
Kennametal South Africa (Pty) Limited, South Africa Kennametal France S.A.S., France * Rogers Tool Works Inc., USA * Kennametal (Malaysia) Sdn.Bhd, Malaysia Kennametal Hardpoint (Shanghai) Limited, China Kennametal (Singapore) Pte. Limited, Singapore Kennametal Japan Limited, Japan Hanita Metal Works Limited, Israel Kennametal Korea Limited, Korea Kennametal Australia Pty. Limited, Australia Kennametal (Thailand) Co. Limited, Thailand Kennametal UK Limited Greenfield Industries Inc, USA * Kennametal Canada RubigGmbHCo.KG* Kennametal Engg ProdHardenburg, Nederland * KMT Distribution Services Asia Pte. Kennametal Italia S.p.A. Kennametal Shared Services Private Limited Conforma Clad Extrude Hone Corporation Werkoe Werkzeugfabrik |
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Holding Company
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Metruit A. G. Zug, Switzerland |
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Ultimate Holding
Company : |
Kennametal Inc, USA |
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Group Companies : |
Kennametal Widia GmbH Co. KG, Germany (Formerly Widia GmbH, Germany) Kennametal Widia Holding GmbH, Germany" Kennametal Hertel Europe Holding GmbH, Germany Kennametal Holding GmbH, Germany * Kennametal Widia Holdings Inc, USA * Kennametal Europe GmbH, Germany Kennametal Europe L.P., Bermuda * Kennametal Holdings Europe Inc, USA * |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
21,978,240
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Equity Shares
|
Rs 10/- each |
Rs. 219.782 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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21,978,240 |
Equity Shares |
Rs 10/- each |
Rs. 219.782 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
219.782 |
219.782 |
219.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1747.224 |
1326.093 |
1639.300 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1967.006 |
1545.875 |
1859.100 |
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LOAN FUNDS |
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1] Secured Loans |
8.374 |
19.724 |
29.800 |
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2] Unsecured Loans |
17.651 |
1.417 |
0.700 |
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TOTAL BORROWING |
26.025 |
21.141 |
30.500 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1993.031 |
1567.016 |
1889.600 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
765.781 |
685.337 |
607.200 |
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Capital work-in-progress |
69.451 |
54.666 |
103.600 |
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INVESTMENT |
235.000 |
257.535 |
623.100 |
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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 |
531.680
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384.782
|
426.300
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Sundry Debtors |
799.589
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756.628
|
581.700
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Cash & Bank Balances |
376.809
|
109.015
|
171.200
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Other Current Assets |
18.781
|
36.492
|
0.000
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Loans & Advances |
145.711
|
124.927
|
241.700
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Total
Current Assets |
1872.570
|
1411.844 |
1420.900 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
815.345
|
737.887
|
651.600
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Provisions |
134.426
|
104.479
|
213.600
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Total
Current Liabilities |
949.771
|
842.366 |
865.200 |
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Net Current Assets |
922.799
|
569.478
|
555.700
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1993.031 |
1567.016 |
1889.600 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
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Sales Turnover |
3572.272 |
3208.656 |
3290.400 |
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Other Income |
134.273 |
125.793 |
0.000 |
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Total Income |
3706.545 |
3334.449 |
3290.400 |
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Profit/(Loss) Before Tax |
648.528 |
682.705 |
724.300 |
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Provision for Taxation |
225.962 |
244.124 |
226.400 |
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Profit/(Loss) After Tax |
422.566 |
438.581 |
497.900 |
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Earnings in Foreign Currency : |
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Export Earnings |
208.363 |
103.329 |
NA |
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Other Earnings |
4.314 |
0.000 |
NA |
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Total Earnings |
212.677 |
103.329 |
NA |
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Imports : |
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Raw Materials |
1355.456 |
908.088 |
NA |
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Stores & Spares |
35.617 |
83.935 |
NA |
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Capital Goods |
135.225 |
70.457 |
NA |
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Total Imports |
1526.298 |
1062.48 |
NA |
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Expenditures : |
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Material |
1555.401 |
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Manufacturing Expenses |
1367.154 |
1197.849 |
2570.000 |
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Depreciation & Amortization |
130.740 |
125.448 |
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Interest Other Expenditure |
4.722 |
5.560 |
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Total Expenditure |
3058.017 |
2689.461 |
2570.000 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.09.2007 |
|
Type |
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|
1ST
Quarter |
|
Sales Turnover |
|
|
898.500
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Other Income |
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|
33.700
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Total Income |
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|
932.200
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Total Expenditure |
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|
700.600
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Operating Profit |
|
|
231.600
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Interest |
|
|
0.900
|
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Gross Profit |
|
|
230.700
|
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Depreciation |
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|
37.100
|
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Tax |
|
|
66.100
|
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Reported PAT |
|
|
128.400
|
KEY RATIOS
|
PARTICULARS |
30.06.2007 |
30.06.2006 |
30.06.2005 |
|
Debt Equity Ratio |
0.01 |
0.01 |
0.02 |
|
Long Term Debt
Equity Ratio |
0.01 |
0.01 |
0.02 |
|
Current Ratio |
1.76 |
1.63 |
1.64 |
|
TURNOVER RATIOS |
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Fixed Assets |
2.23 |
2.24 |
2.18 |
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Inventory |
8.71 |
8.95 |
6.96 |
|
Debtors |
5.13 |
5.43 |
6.35 |
|
Interest Cover
Ratio |
89.85 |
83.27 |
59.95 |
|
Operating Profit
Margin (%) |
19.70 |
22.49 |
23.85 |
|
Profit Before
Interest and Tax Margin (%) |
16.43 |
19.03 |
20.54 |
|
Cash Profit Margin
(%) |
13.86 |
15.53 |
17.19 |
|
Adjusted Net
Profit Margin (%) |
10.59 |
12.08 |
13.88 |
|
Return on Capital
Employed (%) |
37.05 |
40.01 |
38.04 |
|
Return on Net
Worth (%) |
24.06 |
25.76 |
26.31 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was incorporated on 21st September, 1964 at Bangalore in Karnataka having Company Registration No. 1546.
The company was promoted by Meturit, Switzerland, associates of the Fried Krupp Widia Fabrik, unit of Krupp Group, Germany and Sak Industries, Switzerland. The company’s collaborator Meturit, Switzerland holds 51% stake. The company manufactures hard metal products, mining tools, special-purpose machines, metal castings, formings, jigs and fixtures.
It exports its products to Japan, Germany and the south-east Asian countries.
Kenmetal Widia India Limited (formerly Widia India Limited), promoted by
Meturit, Switzerland, associates of the Fried Krupp Widia Fabrik unit of Krupp
group, Germany, and Sak Industries, Switzerland. The company's collaborator
Meturit, Switzerland, holds 51% stake. The company incorporated in 1964
manufactures hard metal products, mining tools, special-purpose machines, metal
castings, formings, jigs and fixtures. It exports its products to Japan, Germany
and the south-east Asian countries. The company received the ISO 9001
certification in 1992. In 1994, the company was taken over by Cincinnati
Milacron, US.
The company's wholly owned subsidiary Widaroc (India) was merged with the
company with effect from Jan'95.It has also introduced several new state of the
art products. Some of them are, new generation milling cutters, new special
solid carbide tools, new generation coated inserts, warming forging tools for
bearing industry, cold forgings dies for big auto components, etc.
During 1999-2000, the company sub-divided its equity share face value of Rs 100
each into 10 equity shares of Rs 10 each. It has also allotted bonus shares in
the ratio of 1:1. The company is planning to upgrade the Oil Well Rock Roller
Bits in the current year.
The company is planning to sell its Mining and Construction Tools business for
a cash consideration of Rs.6490 millions to Sandvik Smith A.B/ its subsidiary.
This plan is subject to the approval of shareholders.
In the year 2005,
the name of the company was changed from Kennametal Widia India Limited to
Kennametal India Limited.
During 2004-05, the company has installed the Hard metal and hard metal
products with the capacity of 210 MT and the company expanded its installed the
capacity of Special purpose machines including accessories by 50 Nos. The
installed capacity of Special purpose machines including accessories has
increased to 125 Nos.
Company Profile
In the area of exports, the growth was achieved due to increased sales to Germany and Japan and part of the South-East Asian region. There was a significant increase in the export of tool holders. The cement milling inserts introduced were well in the market and also contributed to the increased export sales. The range of mining tools was also widened. In 1995, the export sales grew by nearly 30 % to reach Rs. 186.200 millions. The company’s wholly owned subsidiary Widaroc (India) has been merged with the company with effect from January, 1995.
It has also introduced several new state of the art products. Some of them are, new generation milling cutters, new special solid carbide tools, new generation coated inserts, warming forging tools for bearing industry, cold forging dies for big auto components, etc.
During the year 2000, the company sub-divided its equity share face value of Rs. 100/- each into 10 equity shares of Rs. 10/- each. It has also allotted bonus shares in the ratio of 1:1. The company is planning to upgrade the Oil Well Rock Roller Bits in the current year.
The company is a subsidiary of Widia GmbH of Germany, which is now part of Milacron of USA and is a largest producer of tungsten carbide tools in India. They are used as cutting inserts in a diverse range of machine tools and drilling equipment. The company has a market share of 43% in the domestic market. The main user of these tools in the automobile, capital goods, mining and construction industry. The automobile sector itself accounts for around 45% of the aggregate demand in terms of value.
The company receives good technical support from its parent company, Widia GmbH Essen, Germany. Milacron is one of the leading players in hard cutting materials. Globally there are very few suppliers for critical ores used in manufacture of carbide tools. As a result, manufacturers are vulnerable to demand supply mismatches and currency fluctuations on the raw materials procurement front. However, the inherent risks are partly mitigated by exports to the Milacron group worldwide, which procures 10% of the company’s sales. The company also benefits from the strong R&D capabilities of its parent in developing newer products.
Operating
Results:
The sales and other income of the Company grew by 11% during the year under
review i.e. from Rs.3,334 million to Rs.3,707 million.
During the year under review, raw material prices continued to show an upward
trend, notably Cobalt, which saw a significant price increase.
Competitive
pressures from the marketplace have also limited their ability to offset the
impact of the increased costs through higher price realization.
Despite
these pressures, the Company managed to marginally improve its profit before
tax from Rs. 645 million in prior year to Rs.649 million for the year under
review. However, as there was no exceptional item benefiting the company
this year (prior year Rs.38 million), profit before tax was Rs.649 million as
against Rs.683 million in the prior year.
Directors:
Mr. Rakesh Makhija and Mr. Bernard C. McConnell, Directors, retire by rotation,
and being eligible, offer themselves for reappointment. The Directors recommend
the reappointment of the aforesaid Directors.
During the year:
·
Mr. Kumar Kanetkar resigned as Director, thereby also
resigning as Managing Director with effect from June 30, 2007. Mr. Kanetkar
also resigned from the position of Chairman of the Share Transfer Committee,
member of the Shareholders'/ Investors Grievance Committee and member of Audit
Committee of the Board with effect from June 30, 2007. The Directors place on
record their appreciation for the valuable contributions made by Mr. Kanetkar
during his tenure as Managing Director of the Company.
·
Mr. Dinakar A. was appointed as Additional Director on the
Board of the Company and also as Managing Director of the Company with effect
from July 01, 2007.
·
Mr. Douglas C. Phillips was appointed as Additional Director
on the Board of the Company on January 29, 2007.
Resolutions
are being proposed seeking consent of the members for the aforesaid
appointments and the Directors recommend the approval.
Industry Structure and
Developments/Opportunities & Threats:
The Company is
a leading manufacturer of hard metal, hard metal products and machine tools and
caters to the needs of auto and auto related industries, light and general
engineering industries etc., and seeks to provide a competitive edge to its
customers through total manufacturing solutions.
During the
year, GDP growth in India was around 9% and growth in the manufacturing sector
was estimated to be around 11%. However, inflation and the higher interest
rates had a dampening effect, especially on the auto sector, which is a major
customer segment for the Company. The recent appreciation of the Rupee,
especially against the U.S. Dollar has also affected exporters of auto
components and other engineering products.
Viewed against
this backdrop, the Company has posted a good performance with the sales and
other income growing by 11% over the prior year.
In the third
year of lean journey of the Company, a significant progress was made in both
the manufacturing and non-manufacturing areas. Under this initiative, to
enhance operational efficiency and competitiveness, many improvement projects
were completed that helped improve productivity. The focused thrust given to
this initiative enabled the Company to meet the customers' needs in a more
timely and efficient manner. Various medium and small operational improvement
projects were carried out apart from some major lean projects, which resulted
in significant savings. Training on various aspects of lean was extended to all
the employees of the Company and a number of employees including some senior
management personnel have been certified as green belts during the year. This
should enable the Company to continue the good work that has been done in the
past on process improvements and cost reduction.
Company Outlook:
Despite the
challenges being posed by the strengthening Rupee, the macro economic outlook
for the country is still positive and the GDP growth for the year ending March
2008, is expected to be around 8.5%. The good news is that inflation now seems
to be under control and this may lead to an appropriate reduction in interest
rates, thereby accelerating growth.
With strong
emphasis on introducing new products and continued support from the parent
Company, we expect that the Company will continue to maintain its market
leadership position and retains its reputation for being a premier Company for
tooling solutions in the Indian market.
The Company is
keeping a close watch on the impact or delay that may be caused due to hardened
interest rates and a strong rupee on several new projects of the customers
already in the pipeline.
Financial
Performance:
The Company's financial performance for the year ended June 30, 2007, resulted
in a Profit Before Tax (PBT) of Rs. 649 million. This is an improvement of Rs.
4 million over the previous year, if the exceptional and non-recurring item of
the previous year is not considered.
Change
of Name
Consequent to the approval of the Members in the 40th Annual General Meeting held on October 28,2005, the name of the Company was changed from Kennametal Widia India Limited to Kennametal India Limited with effect from December 23, 2005
Fixed Assets
- Land
- Building
- Plant and Machinery
Ř Finance Lease
Ř Computer Hardware
Ř Others
- Furniture and Fixtures
Ř Furniture and Fixtures
Ř Lease Hold Improvements
- Office Equipments
- Vehicles
Press Releases
Kennametal Widia to double sales in 3-5 years
Our Bureau
Bangalore , Feb. 2
THE world's second largest metals company, Kennametal Inc, expects its Indian subsidiary, Kennametal Widia India Limited, to "double" its sales in three to five years, Kennametal's Chairman, Chief Executive officer, Mr Markos I. Tambakeras said.
Kennametal will also invest Rs 500 millions over the next 12-18 months in its Indian arm to add to shop floor capabilities, increase marketing reach and IT infrastructure, he added.
Currently, India accounts for Kennametal's 2.5 per cent of global sales. Kennametal sees its revenue-mix shift in favour of Asia going forward as the region is likely to contribute 20 per cent to the company's top line, from the current level of 10 per cent. North America, which currently contributes 50 per cent of Kennametal's sales, is likely to dip to 40 per cent, while Europe is likely to gain 10 per cent from the present 40 per cent share, Mr Tambakeras said.
India and China, "the twin pillar strategy" in Asia for Kennametal, are likely to drive the growth of the company in the region, Mr Tambakeras said. The growth of Indian operations are likely to be fuelled by the manufacturing sector, which has shown strong signs of recovery and as exports pick up with Kennametal Widia is expected to operate as a sourcing hub for some of the products for Kennametal's global requirements.
"Relative cost structure is very important," Mr Tambakeras said, adding that the cost advantage on using India as a sourcing hub would help the parent's business model.
Kennametal also plans to increase engineering capabilities in its Indian subsidiary and set up shared services enterprise here to deal with integrated purchasing of raw materials and supplies and other back-office functions for the company's global operations. The company also plans to augment its development engineering processes in India as more research projects are shipped in.
Kennametal Inc had invested Rs 500 millions in the Indian outfit over last 16 months, since it bought out Widia and initiated an integration process that saw some rightsizing of the company's workforce in India.
For the last quarter ending December in the current financial year, Kennametal Widia India reported a net loss of Rs 20.1 millions as it took a charge of Rs 133.7 millions towards voluntary separation. However, the company expects to report positive net profit for the current financial year as its net earnings for the first six months stands at Rs 46.00 millions.
The company is in trade terms with :
Ř Srinivasa Advanced Engineering
Ř Tool Engineering Corporation
The company has been accredited with ISO 9001 Certification.
The company’s fixed assets of important value include land (freehold and leasehold), buildings, plant & machinery, furniture & fixtures, office equipments and vehicles.
Memberships
Ř Confederation of India Industry
This profit was realized along with other significant achievements such as :
Ř Launch of Kennametal University to bring the sciences of metalworking and other manufacturing processes into India for the benefit of Indian manufacturing.
Ř Consolidation of Metal forming business, now called Engineered Products Group (EPG) into Bangalore.
Ř Up-gradation of facilities and infrastructure in Bangalore.
Ř Historically the highest levels of investments in terms of time and money in the training and development of the company’s most important asset-its people.
Ř The highest level of investments in projects for environment, health and safety for the employees.
Ř Machine tools business winning the largest single order in the history of the company, worth Rs. 180 millions.
Ř Moving by 50 places to 245th position in the list of 500 largest companies in India by market capitalization.
CMT REPORT (Corruption,
Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.67 |
|
UK Pound |
1 |
Rs.81.78 |
|
Euro |
1 |
Rs.58.46 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
54 |
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. |
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 |
|