MIRA
INFORM REPORT
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Report Date : |
23.07.2007 |
IDENTIFICATION DETAILS
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Name : |
CUMMINS INDIA LIMITED |
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Registered Office : |
Kothrud, Pune – 411038, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
17.02.1962 |
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Com. Reg. No.: |
11-12276 |
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CIN No.: [Company
Identification No.] |
L29112MH1962PLC012276 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PNEC05744E |
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PAN No.: [Permanent
Account No.] |
PANAPPLIED |
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Legal Form : |
Public limited liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of Diesel Engines and Filtration Equipments. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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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 37000000 |
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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 company having fine track records. The company is progressing well. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual trade terms and conditions. The company can be regarded as a promising business partner in a medium to long – run. |
LOCATIONS
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Registered Office / Factory : |
Kothrud, Pune – 411038, |
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Tel. No.: |
91-20-25385435/5380240 |
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Fax No.: |
91-20-25380125 |
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E-Mail : |
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Website : |
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Factory 1 : |
Kothrud, Pune – 411038, |
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Factory 2 : |
Plot No. 19/25A, Silver Industrial Estate, Bhimpore, |
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Branches : |
v
35 A/1/2, Erandawane, Pune 411038 Tel. No. 91-20-25431234/25430666/25431703 Fax. No. 91-20-25439490 Email: powermaster-india@cummins.com v
3-6-482, Street No. 6, Hardikarbagh,
Himayatnagar, Tel. No. 91-40-27678891/27663017 Fax. No. 91-40-27678892 Email: Rohyderabad@cummins.co.in v 5-3-32 Babu Camp, Kothagudem 507101, Dist. Khamman, Andhra Pradesh Tel. No. 91-8744-246110 / 242058 Fax. No. 91-8744- 246608 Email: aokothagudem@cummins.co.in v
Tel. No. 91-361-2520399 / 2635686 Fax. No. 91-361-2515604 Email: cdssguwahati@satyam.net.in v
Opposite Tel. No. 91-376-2222544 Fax. No. 91-376-2220896 Email: aokothagudem@cummins.co.in v
Shanti Kunj, C 202 Vidyalaya Marg, Road No.
01, Ashok Nagar, Tel. No. 91-651-2241948 / 2241521 Fax. No. 91-651-2242815 v
No - 3, Ground Floor, Sesa Ghor, 20 Patto
Complex, Panjim 403001, Tel. No. 91-832-2438684 / 2438595 Fax. No. 91-832-2438686 v
202, Mangaltirth, 2nd Floor, 15, Sampath
Colony, Alkapuri, Vadodara 390 005 Tel. No. 91-265-2330627 / 2326587 Fax. No. 91-265-2340623 v
SCO 13, 14, 15, Sector 34-A, Tel. No. 91-172-2663087 Fax. No. 91-172-2615351 v SCO, 17, First Floor, Sector 14, Opposite HUDA, Gurgaon 122 001, Haryana Tel. No. 91-124-26316182/26316903/ 26333574 Fax. No. 91-124-26316183 v
911-912, Tel. No. 91-11-26431051 / 26445756 / 26445759 / 26416947 Fax. No. 91-11-26212817 v
24, 9th Main, Rajmahal Vilas Extension, Tel. No. 91-80-3613831 / 3611958 / 3611160 Fax. No. 91-80-3614552 Email: zo_bangalore@cummins.co.in v
2nd Floor, Tel. No. 91-836-373840 Fax. No. 91-836-375556 Email: cdss_hubli@satyam.net.in v
1st Floor, Tel. No. 91-7752-254838 / 254928 Fax. No. 91-7752-255078 v
"Vanijya Bhavan" 1st Floor, Sai
Nagar Fafadih, Tel. No. 91-771-2521101 / 2521102 Fax. No. 91-771-2521103 v
P.B. No. 06, Tel. No. 91-7805-266643 / 267247 Fax. No. 91-7805-266587 v
298, Tel. No. 91-22-22663566 / 22662247 / 22662041 Fax. No. 91-22-22660790 v
301, Tel. No. 91-712-2523203 / 2521247 Fax. No. 91-712-2541217 v
Unit No. 15, Plot No. 228/5255, Pradan Pada
(Jamkani), Tel. No. 91-663-2541150 / 2541316 / 2540592 Fax. No. 91-663-2540592 Email: cdssamb@sancharnet.in v 405 & 406, Geeta Enclave, G8, Viniba Marg, C Scheme, Jaipur 302 001 Rajasthan Tel. No. 91-141-2370201 / 2370356 Fax. No. 91-141-2363746 v
No 3, Tel. No. 91-44-24416429 / 24423412 Fax. No. 91-44-24911120 v
No. 22, Sriram Layout, Saibaba Colony , Tel. No. 91-422-2430197 Fax. No. 91-422-2445904 Email: cdsscbe@cummins.co.in v
Plot No. 357, Anna Nagar, Tel. No. 91-452-2533887 Fax. No. 91-452-2521930 Email: muthu_cdss@sify.com v
B-191 Nirala Nagar, Opposite Ramkrishna Math, Tel. No. 91-522-2389174 / 2787704 Fax. No. 91-522-2787880 v C-42, Sector-2, Noida, Uttar Pradesh Tel. No. 91-120-2441670 / 2444715 / 2444716 Fax. No. 91-120-2441671 v
Joy Villa Hill View Park (East). Tel. No. 91-341-2202041 Fax. No. 91-341-2210558 Email: cdssasl@satyammail.com v
94, Tel. No. 91-33-22472481 / 22470774 / 22478065 Fax. No. 91-33-22473833 Email: cdsscal@vsnl.net |
DIRECTORS
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Name : |
Mr. Rajeev Bakshi |
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Designation : |
Director |
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Name : |
Mr. J. M. Barrowman |
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Designation : |
Alternate Director |
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Name : |
Mr. S. M. Chapman |
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Designation : |
Director |
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Name : |
Mr. P. S. Dasgupta |
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Designation : |
Director |
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Name : |
Mr. M. A. Lavett |
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Designation : |
Director |
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Name : |
Mr. Naseer Munjee |
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Designation : |
Director |
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Name : |
Mr. B. H. Reporter |
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Designation : |
Director |
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Name : |
Mr.Glyn Price |
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Designation : |
Director |
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Name : |
Mr. Venu Srinivasan |
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Designation : |
Director |
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Name : |
Mr. Anant Talaulicar |
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Designation : |
Chairman and Managing Director |
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Name : |
Mr. John Wall |
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Designation : |
Director |
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Name : |
Mr. S. D. Hires |
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Designation : |
Alternate Director |
KEY EXECUTIVES
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Name : |
Batra Rajiv |
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Designation : |
Chief Financial
Officer |
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Date of Birth/Age : |
49 Years |
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Qualification : |
Chartered
Accoutant |
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Experience : |
25 Years |
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Date of Appointments : |
12.07.2004 |
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Name : |
Chonde Y K |
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Designation : |
Production
Associate |
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Date of Birth/Age : |
51 Years |
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Qualification : |
1st Std. |
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Experience : |
22 Years |
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Date of Appointments : |
25.07.1997 |
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Name : |
Chowkar D A |
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Designation : |
B.Sc.,D.M.E. |
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Date of Birth/Age : |
55 Years |
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Qualification : |
B.E. (Met.) |
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Experience : |
32 Years |
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Date of Appointments : |
05.04.1974 |
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Name : |
Gatne P D |
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Designation : |
Sr. GM - Projects |
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Date of Birth/Age : |
55 Years |
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Qualification : |
B.E. (Met.) |
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Experience : |
32 Years |
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Date of Appointments : |
16.5.1977 |
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Name : |
Pandey Vijay |
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Designation : |
Sr.GM - Materials |
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Date of Birth/Age : |
54 Years |
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Qualification : |
B.Tech. (Chem) |
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Experience : |
32 Years |
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Date of Appointments : |
01.08.2001 |
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Name : |
Phadke S S |
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Designation : |
Sr. Vice
President Industrial Business |
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Date of Birth/Age : |
53 Years |
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Qualification : |
B.E.(Mech),
B.A.(Eco) |
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Experience : |
29 Years |
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Date of Appointments : |
01.05.1993 |
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Name : |
Sarpotdar S G |
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Designation : |
Vice President
Finance |
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Date of Birth/Age : |
54 Years |
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Qualification : |
B.Com, A. |
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Experience : |
30 Years |
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Date of Appointments : |
15.01.2001 |
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Name : |
Singh Harsimran |
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Designation : |
Vice President HR & OE |
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Date of Birth/Age : |
54 Years |
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Qualification : |
B.A.(Eco), PGD in PM&IR |
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Experience : |
20 Years |
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Date of Appointments : |
02.02.2004 |
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Name : |
Srinivasan Ganesh29 |
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Designation : |
Manager Performance Development |
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Date of Birth/Age : |
29 Years |
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Qualification : |
B.Tech (Mech);
M.S. ( |
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Experience : |
5 Years |
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Date of Appointments : |
02.08.1999 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters |
100980488 |
51.00 |
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Mutual Funds |
29582487 |
14.94 |
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Banks/Financial ,Institutions/Insurance ,
Companies |
9969671 |
5.04 |
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Foreign Institutional Investors (Flls) |
26954998 |
13.61 |
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Corporate Bodies |
7518717 |
3.80 |
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Indian Public |
22558168 |
11.39 |
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NRIs |
435471 |
0.22 |
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TOTAL |
198000000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of diesel engines and filtration equipments. |
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Products : |
Item code no. Product
description (ITC Code) 8408.90 Compression
ignition internal
combustion engines 8409.99
Components
parts of compression 8409.100
ignition
internal combustion engines N.A Supply and
maintenance of power generating equipment |
PRODUCTION STATUS
|
Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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Internal Combustion Engines in all |
Nos. |
|
14800 |
22905 |
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Generating Sets (Including semi finished generating sets) powered by
internal combustion engines |
Nos. |
|
7300 |
7608 |
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Manufactured components |
Nos. |
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-- |
0.346 |
GENERAL INFORMATION
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Suppliers : |
v
A V S
Traders v
Alwin
Corpn v
Arco
Products v
Autoturn
Industries v
Baba
Engineering Works v
Balsons
Industries v
Bhide
Packings v
Bhor
Engineering Private Limited. v
Chandarani
Industries v
Cotmac
Electronics Private Limited v
Coupling
Engineering Services v
Craft
And Technik Industries v
D.J.
Aluminium Fabricators v
Deejay
Enterprises v
Delta
Corporation |
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No. of Employees : |
1600 |
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Bankers : |
v
State
Bank of v The Saraswat Co-operative Bank Limited v
State
Bank of v
HDFC
Bank Limited v
Citibank,
N.A. v
Bank
of v
ICICI
Bank Limited v BNP Paribas |
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Facilities : |
Secured Loan From Bank Secured by hypothecation of inventories, Receivable and movable assets
of the company – Rs. 24.064 Millions Unsecured Loan Fixed Deposits – Rs. 1.218 Millions |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Price Waterhouse Chartered Accountants |
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Address : |
252, Veer Savarkar Marg, |
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Holding Company : |
Cummins Inc. |
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Associates/ : |
v
Valvoline Cummins Limited v
Fourstroke Automotive Private Limited (upto November 29, 2004) |
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Subsidiaries : |
v
Cummins
Diesel Sales and v
Service
( v
Cummins
Auto Services Limited v
MRC
Autosolutions Private Limited v Fourstroke Automotive Private Limited (w.e.f. 30 Nov. 2004) |
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Fellow Subsidiaries : |
v
Consolidated Diesel Company v
Cummins Brasil v
Cummins Diesel N. V. v
Cummins Diesel Sales Corporation v
Cummins Engine ( v
Cummins Engine ( v
Cummins Engine Co Diesel v
Cummins Engine Company Limited v
Cummins Japan Ltd. v
Cummins Natural Gas Engines, Inc. v
Cummins Power Generation v
Cummins Power Generation, v
Cummins Power Service & Parts Corporation - v
Cummins Research and Technology India Limited v
Cummins S De R.L.De C.V. v
Diesel Recon Co. v
Fleetguard Inc. v
Holset Engineering Co. Limited v
Holset Engineering Company, Inc. v
Nelson Engine Systems India Ltd v
Newage Electrical India Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
200000000 |
Equity Shares |
Rs.2/- each |
Rs. 400.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
198000000 |
Equity Shares |
Rs.2/- each |
Rs. 396.000 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
396.000 |
396.000 |
396.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
8899.531 |
7446.806 |
6592.887 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
9295.531 |
7842.806 |
6988.887 |
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LOAN FUNDS |
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1] Secured Loans |
24.064 |
85.919 |
310.820 |
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2] Unsecured Loans |
1.218 |
1.576 |
1.920 |
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TOTAL BORROWING |
25.282 |
87.495 |
312.74 |
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DEFERRED TAX LIABILITIES |
0.000 |
200.255 |
229.382 |
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Finance lease liability |
59.450 |
0.949 |
25.960 |
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TOTAL |
9380.263 |
8131.505 |
7556.969 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1816.501 |
1620.806 |
1776.152 |
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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INVESTMENT |
2825.789 |
2488.936 |
2162.046 |
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DEFERREX TAX ASSETS |
98.933 |
182.757 |
164.976 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
2814.354
|
2334.076 |
2394.061 |
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Sundry Debtors |
4185.246
|
3613.972 |
2945.524 |
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Cash & Bank Balances |
388.526
|
56.332 |
17.768 |
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Other Current Assets |
33.458
|
46.600 |
42.381 |
|
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Loans & Advances |
1445.868
|
1206.901 |
1102.097 |
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Total
Current Assets |
8867.452
|
7257.881 |
6501.831 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
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|
|
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Current Liabilities |
3009.098
|
2547.364 |
2239.444 |
|
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Provisions |
1219.314
|
871.511 |
808.592 |
|
Total
Current Liabilities |
4228.412
|
3418.875 |
3048.036 |
|
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Net Current Assets |
4639.040
|
3839.006 |
3453.795 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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|
|
|
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TOTAL |
9380.263 |
8131.505 |
7556.969 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
18407.804 |
14627.715 |
12714.723 |
|
|
Other Income |
853.394 |
772.028 |
0.000 |
|
|
Total Income |
19261.198 |
15399.743 |
12714.723 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
3460.023 |
2458.596 |
1853.389 |
|
|
Provision for Taxation |
1039.555 |
701.599 |
481.127 |
|
|
Profit/(Loss) After Tax |
2420.468 |
1756.997 |
1372.262 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
6050.414 |
5312.513 |
4023.884 |
|
|
Other Earnings |
146.993 |
136.521 |
0.000 |
|
Total Earnings |
6197.407 |
5449.034 |
4023.884 |
|
|
|
|
|
|
|
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Imports : |
|
|
|
|
|
|
Raw Materials |
242.219 |
117.131 |
2368.409 |
|
|
Stores & Spares |
7.778 |
7.712 |
0.000 |
|
|
Capital Goods |
61.289 |
3.014 |
0.000 |
|
|
Others |
3011.813 |
2712.485 |
0.000 |
|
Total Imports |
3323.099 |
2840.342 |
2368.409 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Goods Sold |
15461.095 |
12595.755 |
0.000 |
|
|
Interest |
14.060 |
9.031 |
0.000 |
|
|
Depreciation & Amortization |
326.020 |
336.361 |
0.000 |
|
|
Other Expenditure |
0.000 |
0.000 |
10861.334 |
|
Total Expenditure |
15801.175 |
12941.147 |
10861.334 |
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.01 |
0.03 |
0.04 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
2.02 |
1.93 |
1.66 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
4.13 |
3.37 |
2.73 |
|
Inventory |
8.04 |
6.94 |
6.33 |
|
Debtors |
5.31 |
5.00 |
5.01 |
|
Interest Cover Ratio |
246.40 |
274.18 |
151.69 |
|
Operating Profit Margin(%) |
18.35 |
17.09 |
17.15 |
|
Profit Before Interest And Tax Margin(%) |
16.78 |
15.04 |
14.39 |
|
Cash Profit Margin(%) |
13.26 |
12.76 |
13.34 |
|
Adjusted Net Profit Margin(%) |
11.69 |
10.71 |
10.59 |
|
Return On Capital Employed(%) |
40.28 |
32.40 |
26.60 |
|
Return On Net Worth(%) |
28.25 |
23.69 |
20.32 |
STOCK PRICES
|
Face Value |
Rs.2/- |
|
High |
Rs.382.00/- |
|
Low |
Rs.370.00/- |
LOCAL AGENCY FURTHER INFORMATION
History
In the year 1996-97
In February 1999 the company started manufacturing the `Quantum' series
60-litre diesel engine, which is popular outside
The company has developed these gas-based engines using stoichiometric
technology but is developing engines with lean burn technology, which offers
greater savings and faster pay back period.
The company was received ISO 9001 certification in addition to the
certification by the American Bureau of Shipping; LLoyd's Register of Shipping;
Factory Mutual; Underwriters Laboratory, US; Korean Register of Shipping;
Indian Register of Shipping; the Government of India; Export Inspection Agency
and the Ministry of Defence.
The company has also set up a new firm jointly with Cummins Diesel Sales band
Service (
During the year 1998-99, the company entered into a 50:50 joint venture with
Nelson Industries, Inc,
In the year 2000, the company has floated Cummins Infotech with an investment
of Rs 4.800 millions to provide e-business and enterprise resource planning
(ERP) solutions. The company's subsidiary Cummins Infotech Limited, was also
amalgamated with KPIT Infosystems Limited, Pune with effect from January 1,
2002.
The company has approved the amalgamation of Power Systems India Limited and
Cummins Power Solutions Limited, with itself effective from April 01, 2002
subject to approvals.
The company Research and Technology India Private Limited (CRTI), a 50:50 Joint
Venture between the company and Cummins Inc.,
Cummins India Ltd.(CIL),
incorporated in 1962 as a JV with Cummins Engine Company, US, to manufacture
internal combustion diesel engines, the name of the company was changed to
Cummins India Ltd subsequent to Cummins Engines, US hiking its stake from 50%
to 51% in he year 1996-97.
Cummins
In Feb.'99 the company started manufacturing the `Quantum' series
60-litre diesel engine, which is popular outside
CIL has developed these gas-based engines using stoichiometric technology
but is developing engines with lean burn technology, which offers greater
savings and faster pay back period.
The company received ISO 9001 certification in addition to the
certification by the American Bureau of Shipping; LLoyd's Register of Shipping;
Factory Mutual; Underwriters Laboratory, US; Korean Register of Shipping;
Indian Register of Shipping; the Government of India; Export Inspection Agency
and the Ministry of Defence.
Cummins has also set up a new firm jointly with Cummins Diesel Sales and
Service (
During 1998-99, the company entered into a 50:50 joint venture with
Nelson Industries, Inc,
Cummins Infotech, which was floated with an investment of Rs.4.800
Millions to provide e-business and Enterprise Resource Planning(ERP) solutions
in the year 2000 was amalgamated with KPIT Infosystems Ltd., Pune with effect
from January 1, 2002.
The company's Board has approved the amalgamation of Power Systems India
Ltd., and Cummins Power Solutions Ltd., with itself effective from April 01,
2002 subject to approvals.
Cummins Research and Technology India Pvt. Ltd(CRTI), a 50:50 JV between
CIL and Cummins Inc.,
During 2003-04 the company has expanded the installed capacity of
Internal Combustion Engines & Generating Sets by 200(Nos) and 800(Nos)
respectively. Consequent of this expansion,the total capacity of IC Engines
& Generating Sets have been increased to 21000(Nos) & 1100(Nos)
respectively.
The company has also launched a new range of generator sets,extending its
focus on the low Horse Power,mid-range and heavy duty power bands.
The company was presented with the Engineering Export Promotion Council's
All India Trophy for Highest Exporters 2000-01,Consumable Durable Exporters-Non
SSI,at
FINANCIAL RESULTS:
During the year under review, net sales turnover was Rs.18,408 million
(Rs.18410.000 Millions) as against Rs.14628 million (Rs.14630.000 Millions)
during the corresponding previous year (26% higher). Export earnings were
Rs.6197 million (Rs.6200.000 Millions) as against Rs.5449 million (Rs.5450.000
Millions) during the corresponding previous year (14% higher). Profit after tax
was Rs.2,420 million (Rs.2420.000 Millions) against Rs.1757 million
(Rs.1760.000 Millions) (38% higher) for the previous year.
SUBSIDIARIES:
Cummins Sales and Service India Limited : (CSS) [Formerly known as
Cummins Diesel Sales and Service (
The name of Cummins Diesel Sales and Service (
The Highway Solutions Business i.e. servicing and maintenance of
vehicles, of Cummins Auto Services Limited (CASL) was merged into CSS, pursuant
to order of the Hon'ble Bombay High Court passed on 12th January 2007, the
Appointed Date being April 1, 2005. During the year, CSS discontinued
operations at its four Suraksha Stops engaged in servicing arid maintaining of
vehicles at Thane, Baroda, Gurgaon and Jaipur, as the same were economically
unviable and CSS is in the process of disposing the assets at the said Suraksha
Stops.
Cummins Auto Services Limited: (CASL):
The sales and other income of Cummins Auto Services Limited (CASL) for
the year ended March 31, 2007, was Rs.42 million as against Rs.197 million
during the corresponding previous year. CASL is engaged in the business of
retailing in parts and accessories for commercial vehicles. During the year,
the Highway Solutions business of CASL was merged with its holding company CSS
as stated above and hence, the results of CASL are not comparable with that of
the previous year.
Fourstroke Automotive Private Limited: (Fourstroke):
Fourstroke Automotive Private Limited (Fourstroke) has merged into CSS on
March 2, 2007, vide orders of the Hon'ble Bombay High Court and the Hon'ble
Madras High Court, the appointed date being April 1, 2005.
JOINT VENTURES:
Cummins Exhaust India Limited:
(CEIL) (Formerly known as Nelson Engine Systems India Limited)
The name of Nelson Engine Systems
India Limited was changed to Cummins Exhaust India Limited (CEIL) with effect
from September 12, 2006. The sales and other income of CEIL, a 50:50 Joint
Venture between Cummins Filtration Inc., USA (formerly known as Fleetguard
Inc., USA) and the Company, for the year ended March 31, 2007, was Rs.339
million as against Rs.227 million during the corresponding previous year (49%
higher). CEIL has paid an interim dividend of 40% and CEIL Board of Directors
have recommended a final dividend of 3510, taking the total dividend to 75% for
the year ended March 31, 2007. The paid-up share capital of CELL is Rs.40
million. CEIL is engaged in the business of manufacture and sale of exhaust
silencers and mufflers for Internal Combustion Engines.
Cummins Research and Technology
India Limited: (CRTI)
The sales and other income of Cummins
Research and Technology India Limited (CRTI), a 50:50 Joint Venture between
Cummins Inc., U.S.A. and the Company, for the year ended March 31, 2007, was
Rs.249 million as against Rs.183 million during the corresponding previous year
(36% higher). CRTI is engaged in providing Information Technology (IT) Enabled
Mechanical Engineering Development Services to Cummins Inc., its subsidiaries
and joint ventures across the world and has a Research and Technology Centre at
Pune.
Future plans:
Introduction of various full authority electronic engines for Power Generation
Industrial and Automotive markets.
Development of slow speed engine for domestic Oil & Gas market.
Indigenization, cost reduction, ACE (Accelerated Cost Efficiency) initiatives
and alternate source development for various engine components. * Continued use
of Analysis Led Design (computer simulation) approach for development of all
new engines and current product support.
Development of advanced emissions compliant engines for global and domestic PO
Ner Generation, Industrial and Automotive markets.
Management Discussion
and Analysis Report
Industry Structure
and Developments:
Economic Trends and Implications:
Strong growth with positive macroeconomic fundamentals has characterized
developments in the Indian economy in 2006-07, with a strong GDP of 9.2 per
cent in 2006-07. The industrial growth during 2006-07 stood at 11.3% compared
with 8.2% registered in the previous year - the highest since 1995-96.
During 2006-07, after a slow start, exports gained momentum to grow by an
estimated 36.3% in the first nine months. Buoyancy of exports was driven by the
resurgence in the manufacturing sector and sustained demand from major trading
partners.
Cumulative Foreign Direct Investment (FDI) inflows during 2006-07, jumped
almost three fold to $16 Billion from last year. The Indian Government has set
a target of $25 Billion for the fiscal year 2007-08. Foreign exchange reserves
stood at $200 Billion (as on April 6, 2007), with
Though inflation rate in the recent past has been fluctuating and reached
a level of 5.5-6.5%, monetary measures have been taken to contain inflation in
the range of 4.5-5%.
The overall macroeconomic fundamentals are robust, particularly with
tangible progress towards fiscal consolidation, all having positive impact on
their business.
Power Generation:
Power deficits continued (peak and seasonal) in various geographic
regions including key industrial regions in
Demand from non residential construction, manufacturing, Information
Technology (IT)/ Information Technology Enabled Services (ITES), and
Telecommunications was strong during 2006-07 with a positive forecast through
2007-08.
With increase in fuel prices, many customers are focused on demand side
management and reduction in power intensity. This along with incentives for
Combined Heat & Power (CHP) and power management is likely to support
strong demand for power consulting services, power quality products and system
integration solutions.
Lower import duties and appreciation of the Indian Rupee are resulting in
an increased inflow of internationally manufactured products into
Industrial:
With infrastructure identified as a key focus area for the Government,
development and construction of Roads and Highways, Ports and Airports
continue, while rural Infrastructure and Irrigation projects also gained
significant momentum. The Construction industry is expected to grow at 15-20%
over the next few years.
Efforts to improve production levels and to meet domestic demand are
driving growth in coal production. This has led to new tenders for higher
capacity mining trucks, which indicates the intent of coal companies to
increase production and expand further, as more than 50% of
The Indian Railways budget has reported excess cash reserves for the second
consecutive year which increases the likelihood of expansion projects by
Railways.
Indian port traffic handling is growing at around 10 %, which is driving
expansion plans of existing ports and an increase in the number of minor ports.
The global ship building industry has grown at a rate of 15-20% in the past 4
to 5 years and the boom is expected to sustain for the next 5 to B years.
Automotive:
After the slowdown witnessed by the commercial vehicle industry in 2005-06
which was primarily due to the change in emission norms and implementation of
legislation preventing overloading, the commercial vehicle industry revived
strongly in 2006-07, witnessing double digit growth rate of more than
20%.
The Medium & Heavy Commercial Vehicle segment that had witnessed almost
flat growth in the year 2005-06 has grown at phenomenal rates of 30% in the
year 2006-07. This is largely driven by growth in the Heavy Commercial Vehicle
(HCV) Segment. This trend of higher growth in HCV Segment translates into
demand for higher HP engines.
CNG engine demand continues to grow steadily as more and more cities make
provisions for availability of CNG for vehicles.
Opportunities and Threats:
Key Opportunities include:
Power Generation:
Demand for captive power plants will increasingly be served
by gas generator sets / power plants due to continued rise in diesel prices.
Aside from natural gas based generator sets, the Company is currently piloting
several projects on genset and gasification systems for producer gas ranging
from 20 kW - 300 kW power plants.
New norms for emissions and acoustic enclosures of generators will continue to
help their end customers and the environment. Cummins is well positioned to
participate in the same. The Company has launched several initiatives to
engineer lower cost enclosed generator set packages with enhanced customer
satisfaction.
Renewed focus of their parent company, Cummins Inc., on leveraging low cost
capacities across the world has created a long term opportunity, for exporting
engines and generator sets to the global Cummins Engine and Power Generation
businesses.
Industrial:
There continues to be a huge opportunity for the Company's engines in the
non-residential construction sector, as a result of the increasing focus on
infrastructure development in the country in recent years.
A partial revival of the water well rig market after a prolonged lull has made a positive impact on the demand in the compressor segment. The Company has developed new packages for Original Equipment Manufacturers (OEMs) to meet the increasing demand and growth in the portable compressor segment.
Growth in coal production has led to new tenders for higher capacity mining
trucks. The mining industry in general and the coal industry in particular have
started seeking emission compliant products, thus driving the demand for
electronic engines.
The Government's continued focus on improving the rail network in States like
Jammu & Kashmir in 2007 would bolster demand.
The current focus on port and shipping sectors in
Increase in high horsepower engine demand would be triggered by major public
and private sector rig revamp programs and addition of new fleet. Continued
outsourcing of drilling activity to private drillers on new oil patches and
coal bed methane would also result in increased demand from the private sector.
There is a renewed opportunity for continuous duty low horsepower pump
applications in port upgrade infrastructure projects. The Company is geared up
to be a major player in this market with B & C series engines.
Automotive:
The Company has proactively engineered products which are compliant with
stringent emission norms that are expected to be implemented from 2010
(country-wide implementation of BS III norms and 11 major cities with BS IV
norms). This provides the Company with an opportunity to cater to a larger
share of existing customers demands, as well as with new customers.
The improvement of road infrastructure and the shift to higher HP engines
to meet regulatory requirements provides the Company with an opportunity to
grow its share at the higher end of the market.
There is an increasing opportunity for the Company to supply its engines
to global OEMs who are entering
Key Threats include:
Reduction in import duties will facilitate imports of equipments/ engines
and is likely to increase competition. At the same time it will provide
opportunity for the Company to aggressively promote global platforms.
Increases in prices of fuel, crude and commodities remain a key challenge. The Company continues to take stringent cost reduction measures without compromising on quality or technology.
Segment-wise and Product-wise Performance:
Power Generation:
During the year, the power generation business grew across its various lines of
businesses, resulting in an overall growth of over 40%.
The Company continued to make progress on various new products launched in the
past 24-36 months. The new C 250 KVA product launched by the Company, has made
strong inroads through its improved reliability, genset design and fuel
efficiency.
During the year, the Company strengthened its position by winning several key
customers accounts in the fast growing ITES segment by satisfactorily
addressing customer requirements.
The Company's customer-focused initiatives on key accounts/segments,
customer relationship management, stronger channel integration and quality
improvement resulted in strong growth in sales of generator sets. During the
year, the Company initiated quarterly measurement of customer satisfaction, and
has initiated an IT based system for tracking and satisfactorily addressing
customer requirements.
Export of generator sets and power generation equipment made progress. The Company
has expanded its reach to almost 35 countries and anticipates good growth
during the next 2 to 3 years.
The Company has continued to focus on launching globally best in class products
in
Industrial:
Introduction of new engines improved the profitability of the compressor
segment and has strengthened the Company's position. It also provided added
value to the OEM and end user in terms of total cost of ownership.
The Company captured business from all of the leading oil majors in the high
horsepower fire pump segment. The Company also successfully launched seeding
units in the 100-300 HP pump market which marked the re-entry of the company in
this segment.
The construction industry boom created opportunities for significant growth in
real estate, road construction, water & port projects and this had a
positive impact on the demand for the Company's engines.
Timely execution of critical contracts for various mines helped sales grow in
the mining segment.
The Company continued its leadership position in all the segments for the
Indian Railways, like DEMU, Power Cars etc. Indian Railways exclusively used
Cummins for power cars as a part of its 'Carib Rath' initiative.
The Defense and Navy in particular have been consistently working on their
equipment upgrade programs. Cummins enjoys a strong position in this market and
has come out with complex value packages such as 1 MW Diesel Alternator (DA)
sets for stealth destroyers and anti-submarine warfare ships. The Company has
made forays in propulsion packages for re-fitting old vessels such as Landing
Crafts.
In commercial marine, the conventional segments like Barges/ Cargo Carriers /
Passenger Ferries are moving towards high horsepower engines & the Company
has already entered this segment with 600 HP/ 900 HP range offerings for main
propulsion. In the lower end also, the Company is making forays with contemporary
products in the fishing trawler segment.
Performance in the oilfield segment was boosted due to opportunities in
re-powering and replacing drilling engines. Exploration/ extraction by public
and private sector market players further helped boost high horsepower engine
sales in this segment.
Automotive:
The Automotive Business grew significantly with sales comprised of BS III
compliant CNG engines and BS II compliant 300 HP C-series engines.
Exports:
Export Sales Performance 2006-07:
Exports grew by 14% over the last
year as a result of successful efforts to meet and exceed diverse customer
expectations across the globe by capacity enhancements and complex and timely
new product introductions.
KV engine capacity increased from 6 units to 12 units per day, which was a
major part of the capacity enhancement (without any additional investment) for
export business. Increased capacity, coupled with demonstration of
cost-leadership and efficient management of Supply Chain resulted in
significant improvement in on time delivery performance for the Exports
Market.
Demand for high horsepower
products from overseas markets continued to remain strong throughout the year.
This resulted in significant growth which the Company capitalized on by
expanding capacity and the product portfolio.
Achievements:
Growth in Export Turnover:
The Company's Export performance continued to grow during the year 2006-07 and
touched an all time high of Rs. 6,050 million.
Star performer Award for 2004-05:
During the year the Company received the Engineering Export Promotion Council's
(EEPC) All India Award for its outstanding export performance for the year
2004-05 under the category: STAR PERFORMER IN 2004-05: IC PISTON ENGINES AND
PARTS: LARGE ENTERPRISE.
The Company has been receiving EEPC awards consecutively for the past 17 years
for its excellence in Export Performance. EEPC honors meritorious exporters for
their export excellence every year with such awards. In order to achieve this
recognition, the product should be the best or second best item of production
/export during the preceding year, for three successive years.
Outlook and Initiatives for the Current Year and Thereafter:
Power Generation:
The Company is in the process of building a new facility near Pune to expand
the capacity for Power Generation unit. This will significantly improve the
capacity to meet the demands in the domestic as well as export sectors, while
improving the logistics and management control.
The Company has made significant investments in making its entire product
line for power generation equipment, ranging from 15KVA to 2000 KVA emissions
compliant. These efforts will continue during the year as new products get
introduced and older ones get upgraded, thereby creating substantial
differentiation and improving competitiveness in the future.
Industrial:
The Company will leverage on the expansion plans of the mining sector and
existing relationships to grow further in this sector.
Greater mechanization for speed and efficiency has spurred growth in equipment
and tools used in the construction segment. With global construction players
setting up their manufacturing base in
The Company has taken steps to maximize its market share in new/revamp
oil drilling rig programs with private rig drillers.
In the Rail segment, there is a likelihood of expansion projects such as
Exclusive Freight Corridors, Low Cost Air Conditioned Trains, more focus on
track safety and increased in-house production capacities for coaches and
locomotives. The Indian Government's commitment to improve the rail network for
better connectivity would trigger increased demand for equipment.
Automotive:
In the Automotive segment, the Company is planning to expand capacity to
meet the expected growth in demand for the 300HP and higher power nodes in the
Commercial Vehicle market. The Company is investing in developing capability
for manufacturing High Pressure Common Rail engines in these segments as the
country migrates to BS III and BS IV emission levels.
The program with Cummins Westport Inc. to develop the new B Gas International
range of natural gas commercial vehicle engines is expected to give the Company
a very strong presence in the Indian CNG Bus market.
Financial Review:
The financial statements have been prepared in accordance with the
requirements of the Companies Act, 1956, and Generally Accepted Accounting
Principles (GAAP). There are no material departures in adoption of the
prescribed accounting standards.
The estimates and judgments relating to the financial statements have been made
on a reasonable basis, in order that the financial statements reflect in a true
and fair manner, the form and substance of transactions and reasonably
represent the Company's state of affairs and profit for the year.
Results of Operations:
Income:
During the year under review, the Company achieved domestic sales of
Rs.12,358 million (last year Rs.9,315 million), showing an increase of 33% over
the last year. Exports grew 14% to Rs.6,050 million as against Rs.5,313 million
during the last year. Total sales grew 26% to Rs.18,408 million as against
Rs.14,628 million for the last year.
The Company's market share and demand for ifs products in the domestic market
remained strong. Demand has led to growth in power generation, industrial and
automotive segments. An increase in Exports by Rs.737 million indicates success
of the Company's strategy to promote
During the year, other income grew by 10% to Rs.853 million from Rs.772
million during the last year. This was mainly due to increase in treasury
related income and commission earned over the last year.
Expenses and Margins:
The Company's cost cutting measures through a major three year initiative
of Total Cost of Ownership, reduction of direct materials and Six Sigma projects
have yielded planned savings. These have helped to more than offset the recent
significant increase in metal prices affecting component procurement costs
which is a matter of concern.
Total Employee Cost increased from Rs.1,059 million during the previous
year to Rs.1,200 million during the year under review mainly due to increase in
compensation to employees over the last year. Depreciation charge marginally
decreased from Rs.336 million during the previous year to Rs.326 million during
the year under review. Interest expenses increased marginally to Rs.14 million
as against Rs.9 million in the previous year.
Net profit for the year:
Net profit for the year increased from Rs.1,757 million during the previous
year to Rs.2,420 million during the year under review. Consequently, earnings
per share (EPS) for a face value of an equity share of Rs.2 each, during the
year ended March 31, 2007 was Rs.12.22 as against Rs.8.87 during the previous
year ended March 31, 2006, a growth of 38%.
Fixed Assets :
Ø Freehold land
Ø Leasehold land
Ø Building
Ø Plant and Machinery
Ø Furniture and fittings
Ø Vehicles
As Per Website Details
Cummins India Limited (CIL)
is a 51 percent subsidiary of Cummins Inc. USA, the world’s largest independent
diesel engine designer and manufacturer above 200 HP.
Set up in 1962 . Today, CIL is India’s leading manufacturer of diesel engines
with a range from 205 hp to 2365 hp and value packages serving the Power
Generation, Industrial and Automotive Markets. CIL also caters to the growing market
for gas and dual fuel engines.
Cummins India Limited (CIL) is a 51 percent subsidiary of
Cummins Inc. USA, the world’s largest independent diesel engine designer and
manufacturer above 200 HP.
Set up in 1962 . Today, CIL is India’s leading manufacturer of diesel engines
with a range from 205 hp to 2365 hp and value packages serving the Power
Generation, Industrial and Automotive Markets. CIL also caters to the growing
market for gas and dual fuel engines.
Milestones
2000
CDS&S wins Rajiv Gandhi National Quality Award -1998 for
service excellence
1998
Introduction of Quantum series engines.
1997
Production crosses 10,000 engines per year.
ISO 9001 Certification revalidated.
Kirloskar Cummins Limited becomes Cummins India Limited
1996
Aluminium Foundry started at Pune.
1995
Annual Exports cross the Rs. 1000.000 Millions mark.
1994
ISO-9001
Recertification.
EEPC Top Exporter Award for the 5th consecutive year.
1993
Rajiv Gandhi National Quality Award "Best Among the Winners",
1991-92.
1991
ISO-9001 Certification from BVQI
1989
EEPC top Exporter Award – Diesel Engines and Spares
category.
1987
Becomes the single global source for Cummins V28 engines.
1986
50,000th engine manufactured.
1983
Development foundry – Plant II started functioning.
1980
Engine plant approved for Self Certification by Lloyd’s
Register of Shipping.
1979
Introduction of ‘K’ engines.
1975
10,000th engine dispatched at the hands of Mr. J I Miller
(Chairman of the Board, Cummins)
1972
Introduction of ‘V’ engines.
1968
1000th engine shipped. First 15 engines exported to
1967
Acquires CDS&S
1964
First 11 engines produced for Industrial / Mining
applications.
1962
Incorporated in
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.40.33 |
|
|
1 |
Rs.82.63 |
|
Euro |
1 |
Rs.55.65 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--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 |
|
81 |
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 |
|