MIRA
INFORM REPORT
|
Report Date : |
06.01.2007 |
IDENTIFICATION
DETAILS
|
Name : |
NELCO
LIMITED |
|
|
|
|
Registered Office : |
Francysters
Cybernetics Centre, 3rd Floor, Eucharistic Congress Building No.
III, 5, Convent Street, Colaba, Mumbai – 400001. |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
30.09.2006 |
|
|
|
|
Date of Incorporation : |
31.08.1940 |
|
|
|
|
Com. Reg. No.: |
11-3164 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L32200MH1940PLC003164 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
MUMN09602F
/ MUMN13038E |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACTI983C |
|
|
|
|
Legal Form : |
A
public limited liability company. The company’s shares are listed on the
stock exchanges. |
|
|
|
|
Line of Business : |
The
subject is engaged in the activities of manufacture, trade and sale of consumer
electronic products, sale of business systems and office products. |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
Maximum Credit Limit : |
|
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Usually
correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject
is a well-established company having mediocre track. Company is a member
company of TATA group, a largest industrial house having excellent track
records and ethical business. Their trade relations are fair. Payments are
reported as correct and as per commitments. Profit margin is under severe
pressure. The
company can be considered good for normal business dealings at usual trade
terms and conditions. |
LOCATIONS
|
Registered Office : |
Francysters
Cybernetics Centre, 3rd Floor, Eucharistic Congress Building No.
III, 5, Convent Street, Colaba, Mumbai – 400001. |
|
Tel. No.: |
91-22-56384509 |
|
Fax No.: |
91-22-56384510 |
|
E-mail: |
|
|
Website: |
http://www.nelco.com |
|
|
|
|
Head
Office : |
MIDC
EL-6, Electronic Zone, Mahape, Navi Mumbai – 400710, India |
|
Tel.
No.: |
91-22-55918728 |
|
Fax
No.: |
91-22-55918787 |
|
|
|
|
Bangalore Unit |
15/17/19,
Sri Laxmi Complex, Saint Mark’s Road, Bangalore – 560001 |
|
Tel.
No.: |
91-80-51121840
/ 25550170 |
|
Fax
No.: |
91-80-51121842
/ 25550173 |
|
|
|
|
Secunderabad
Unit |
Plot
No. 65, Paigah Colony, Sardar Patel Road, Secunderabad – 500003 |
|
Tel.
No.: |
91-40-27903824 |
|
Fax
No.: |
91-40-27903272 |
|
|
|
|
Kolkata
Unit |
32-A,
Chittaranjan Avenue, Trust House, 1st Floor, Kolkata – 700012 |
|
Tel.
No.: |
91-33-22121904
/ 22121905 |
|
Fax
No.: |
91-33-22121520 |
|
|
|
|
Chennai
Unit: |
No. 2,
Real Towers, 1swt Floor, 51 and 52, Royapettah High, Chennai – 600004 |
|
Tel
No.: |
91-44-55513933
/ 55513934 |
|
|
|
|
Jamsedpur
Unit |
Kasi
Kunj, Road No.2, Contractor’s Area, P P, Jameshedpur – 831001 |
|
Tel.
No.: |
91-657-227766
/ 227767 |
|
Fax
No.: |
91-657-227765 |
|
|
|
|
Delhi
Unit: |
702/703,
Vikram Towers, 16 Rajendra Place, New Delhi 110008 |
|
Tel.
No.: |
91-11-55402165
/ 68 |
|
Fax
No.: |
91-11-25863878 |
|
Location : |
|
DIRECTORS
|
Name : |
Mr.
Ratan N Tata |
|
|
Designation : |
Group
Chairman |
|
|
|
|
|
|
Name : |
Mr. M
N Bhagwat |
|
|
Designation : |
Chairman |
|
|
|
|
|
|
Name : |
Mr. B
B Dubash |
|
|
Designation : |
Director |
|
|
|
|
|
|
Name : |
Mr. R
R Bhinge |
|
|
Designation : |
Director |
|
|
|
|
|
|
Name : |
Mr. V
K Deshpande |
|
|
Designation : |
Director |
|
|
|
|
|
|
Name : |
Mr. P
K Ghose |
|
|
Designation : |
Director |
|
|
|
|
|
|
Name : |
Mr. S
Ramakrishnan |
|
|
Designation : |
Director |
|
|
|
|
|
|
Name : |
Mr.
Amulya Charan |
|
|
Designation : |
Director |
|
|
Date of Appointment: |
25.01.2006 |
|
|
|
|
|
|
Name : |
Mr
Davinder Kumar |
|
|
Designation : |
Director |
|
|
Date of Appointment: |
17.11.2006 |
|
|
|
|
|
|
Name : |
Mr. K
A Mahasur |
|
|
Designation : |
Executive
Director |
|
|
|
|
|
|
Name : |
Mr. Z
J Engineer |
|
|
Designation : |
Executive
Director |
|
|
|
|
|
KEY EXECUTIVES
|
Name
: |
Mr K D
Ghag |
|
Designation
: |
Company
Secretary |
|
Address
: |
|
|
Date
of Birth/Age : |
Mr. R
B Upadhyay |
|
Qualification
: |
Vice
President (Finance) |
MAJOR SHAREHOLDERS
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
TATA Companies |
11436940 |
50.12 |
|
Financial Institutions/Banks |
39590 |
0.17 |
|
Mutual Funds |
13650 |
0.06 |
|
State Government/ Government Companies |
82160 |
0.36 |
|
Bodies Corporate/Trusts |
1987831 |
8.71 |
|
Individuals |
8149652 |
35.72 |
|
Flls/NRI/Foreign Corporate Bodies |
1108577 |
4.86 |
|
Total |
22818400 |
100.00 |
|
|
|
|
BUSINESS DETAILS
|
Line of Business : |
The
subject is engaged in the activities of manufacture, trade and sale of
consumer electronic products, sale of business systems and office
products. |
GENERAL
INFORMATION
|
Customers : |
|
|
|
|
|
No. of Employees : |
About
2000 |
|
|
|
|
Bankers : |
|
|
|
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors : |
N M
Raiji and Company Chartered
Accountants Mumbai |
|
|
|
|
Holding Company |
The
Tata Power Company Limited (from 31.12.2005) |
|
|
|
|
Associates: |
The
Tata Power Company Limited (upto 31.12.2005) |
|
|
|
|
Subsidiary company: |
Tata
net Services Limited |
|
|
|
|
Solicitors : |
Mulla
and Mulla and Craigie, Blunt and Caroe |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
2,50,00,000 |
Equity
Shares |
Rs 10/- each |
Rs 250.000 Millions |
|
25,00,000 |
Redeemable
Preference Shares |
Rs 100/- each |
Rs 250.000 Millions |
|
|
Total |
|
Rs 500.000
Millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
2,24,96,370 |
Equity Shares of Rs.10/- each fully paid-up for payment in cash
(including 939 Equity shares pending allotment.) |
Rs 10/- each |
Rs 224.964 Millions |
|
5,370 |
Equity Shares of Rs.10/- each issued as fully paid-up otherwise than
in cash pursuant to contracts dated 23.10.2004 |
Rs 10/- each |
Rs 0.054 Millions |
|
3,16,660 |
Equity
Shares issued to shareholders of General Radio and Appliances |
Rs 10/- each |
Rs 3.167 Millions |
|
|
Total |
|
Rs 228.185
Millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
|
30.09.2006 |
30.09.2005 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
|
228.175 |
228.175 |
|
2] Share Application Money |
|
----- |
----- |
|
3] Reserves & Surplus |
|
----- |
----- |
|
4] (Accumulated Losses) |
|
----- |
----- |
|
NETWORTH |
|
228.175 |
228.175 |
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
|
268.059 |
293.044 |
|
2] Unsecured Loans |
|
662.771 |
613.738 |
|
TOTAL BORROWING |
|
930.830 |
906.782 |
|
DEFERRED TAX LIABILITIES |
|
----- |
----- |
|
|
|
|
|
|
TOTAL |
|
1159.005 |
1134.957 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
|
207.838 |
183.754 |
|
Capital work-in-progress |
|
2.392 |
2.463 |
|
|
|
|
|
|
INVESTMENT |
|
48.364 |
50.614 |
|
DEFERREX TAX ASSETS |
|
31.437 |
30.225 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
|
318.588 |
188.001 |
|
Sundry Debtors |
|
806.085 |
894.122 |
|
Cash & Bank Balances |
|
22.067 |
27.337 |
|
Other Current Assets |
|
0.000 |
0.000 |
|
Loans & Advances |
|
278.581 |
259.886 |
|
Total Current Assets |
|
1425.321 |
1369.346 |
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
Current Liabilities |
|
609.813 |
631.197 |
|
Provisions |
|
59.892 |
51.787 |
|
Total Current Liabilities |
|
669.705 |
682.984 |
|
Net Current Assets |
|
755.616 |
686.362 |
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
|
71.448 |
108.537 |
|
|
|
|
|
|
Profit and Loss Account |
|
41.910 |
73.002 |
|
|
|
|
|
|
TOTAL |
|
1159.005 |
1134.957 |
PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
|
30.09.2006 |
30.09.2005 |
|
Sales Turnover [including other income] |
|
1185.408 |
1399.314 |
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
|
38.565 |
5.341 |
|
Provision
for Taxation |
|
7.473 |
2.742 |
|
Profit/(Loss)
After Tax |
|
31.092 |
2.599 |
|
|
|
|
|
|
Total
Expenditure |
|
1110.384 |
1351.864 |
KEY
RATIOS
|
PARTICULARS |
|
|
30.09.2006 |
30.09.2005 |
|
PAT / Total Income |
|
|
2.62 |
0.18 |
|
|
|
|
|
|
|
Net
Profit Margin(PBT/Sales) |
|
|
3.25 |
0.38 |
|
|
|
|
|
|
|
Return
on Total Assets\(PBT/Total Assets} |
|
|
1633159 |
1553100 |
|
|
|
|
|
|
|
Return
on Investment (ROI)(PBT/Networth) |
|
|
0.16 |
0.02 |
|
|
|
|
|
|
|
Debt
Equity Ratio(Total Liability/Networth) |
|
|
7.01 |
6.96 |
|
|
|
|
|
|
|
Current
Ratio(Current Asset/Current Liability) |
|
|
2.12 |
2.00 |
STOCK PRICES
|
Face
Value |
Rs.10/-
each |
|
High |
Rs.113.00 |
|
Low |
Rs.108.65 |
LOCAL AGENCY
FURTHER INFORMATION
MANAGEMENT DISCUSSIONS AND ANALYSIS (MD&A)
This Report includes MD&A as appropriate so that duplication and
overlap between Directors' Report and a separate MD&A are avoided and the
entire material is provided as a composite and comprehensive document.
BUSINESS SEGMENTS
The current business operation is structured along two business
segments. In addition, Property Development at Andheri, Mumbai, is a major
activity for the Company.
Tatanet Network
Systems:
This division
provides management of network connectivity services over VSAT (Very Small
Aperture Terminals using satellite communication technology) for large and
medium Corporates, Broking Houses and small and medium enterprises.lt provides
solutions like bandwidth on demand. Internet over VSAT, interactive distance
learning, IP multicast and digital streaming to industry segments like
manufacturing and distribution, Pharmaceuticals, banking and financial
services, media, tourism, logistics and to government and public sector units.
Property Development
This activity
consists of development of part of the property at Andheri with the assistance
of THDC Limited.
FINANCIAL OVERVIEW
The total income,
during the year under review, amounted to Rs. 1185.41 million as against Rs.
1399.31 million in the previous year. Profit from the operations and property
development, i.e. before the Voluntary Retirement Scheme (VRS) has improved
from Rs. 47.45 million in the previous year to Rs. 75.02 million in the year
under review. The net profit has improvedto Rs. 31.09 million as against
Rs.2.60 million in the previous year.
During the year
under review, with improved working capital management, the average borrowings
were at lowerlevels than in the previous year and the interest cost has been
brought down to Rs. 79.29 million (previous year s. 94.02 million)
AUTOMATION AND
CONTROL DIVISION (ISD)
Financial Highlights
During the year, ISD
achieved a Revenue of Rs. 724.57 million. (previous year Rs. 887.36 million.)
with an operating profit of Rs. 71.12 million. (previous year Rs. 178.97
million.). Last year, ISO's Revenue included major orders from Ministry of
Defence; however, it should be noted that such orders from large defence
programmes are not finalised and executed uniformlyon an annual basis.
Operations:
The SE LoB, based on
its association with Thales of France, secured another contract for supply and
services for Jammers for the Indian Army, a large part of which was executed
during the year. In addition to offering UGS, GPS and Electric Fence System to
the Defence sector, the LoB has begun addressing opportunities in the Homeland
security through a broader range of products and solutions. Specialised
requirements of the Defence sector, related to Weather Monitoring systems. Data
Acquisition through radio links etc. are also being persued.
During the year, the
SCADA LoB made significant progress on the execution of the order received from
Jaipur Vidyut Vitran Nigam Limited, for the Electrical Distribution Management
System under the Accelerated Power Development Reform Programme (APDRP) of the
Power Ministry. The LoB continues to address growing Power Distribution SCADA
requirements and has received and executed several orders in this sector. New
application areas are also being explored to broaden the markets with an
initial success of SCADA system for light house to Shipping sector.
The Traction
Electronics LoB secured and executed a major order for Traction Converters for
the 3 Phase AC locomotives of the Indian Railways.This LoB is well poised for
receiving further such orders in line with the procurement programme of Indian
Railways.
The Drives LoB
secured and executed several orders from steel majors like Tata Steel, SAIL,
IISCO, etc. The LoB had put an increased focus on medium voltage high KW rating
AC drives used for energy conservation for applications in the cement, water
and power industries. The LoB, however, continues to face heavy pressure on
margins, due to intense competition from multinationals and also input cost
escalations. The ISD intends to carry out necessary actions to minimise the
adverse impact of these factors on the operations of ISD.
Fixed Assets
- Land : Lease Hold
- Buildings
- Plant and Machinery
- Electric Installation
- Office Equipments, Furniture
and Fixtures
- Vehicles
Biodata
The National Radio & Electronics Company (NELCO) was promoted
in 1940 by the Investment Corporation of India, inter alia, to manufacture
broadcasting equipment. Its present activities are the manufacture, trade and
sale of consumer electronic products, sale of business systems and office
products.
NELCO has technical collaboration/technical transfer agreements with
Serck Control, UK, for 16 RIT industrial micro computers; and with Teleglobe,
Canada, for data communication networks. It introduced telebanking in the
nationalised banks and computerised more than 65 branches of 28 banks all over
India. It also introduced India's first LAN inter-connectivity products. The
company has diversified its activities in the electronic field and manufactures
televisions, computer and telecommunication systems, as well as industrial
systems and plans to set up a new factory to manufacture and sell
telecommunication systems.
NELCO transferred its business systems division to a new subsidiary --
Nelito Systems, formed in association with Itochu Corporation, Japan. NELCO has
been selected by Chittararanjan Locomotive Works for power control and
auxillary equipment of 6000 HP AC locomotives. This project was executed
successfully in 2001 and were approved by RDSO.
NELCO and General Electric (GE) of USA have signed a co-operation
agreement which will enable GE and NELCO to play complementary role in
providing state-of-the-art drive and automation systems for the metal
industries in India. The construction of Technopolis Knowledge Park (TKP) at
Andheri was completed by the company, with the assistance of Tata Housing
Development Company.
Target Market /
Industry Sector for the company are:
·
Manufacturing
·
Distribution
·
Petroleum
·
Pharma
·
Insurance
·
BFSI
·
Government Projects
·
Media
·
Travel and Tourism
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.44.61 |
|
UK
Pound |
1 |
Rs 86.80 |
|
Euro |
1 |
Rs.57.54 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
5 |
|
--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 |
|
48 |
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 |
|