MIRA
INFORM REPORT
|
Report Date : |
15.03.2007 |
IDENTIFICATION
DETAILS
|
Name : |
FORCE MOTORS
LIMITED |
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Formerly Known
As : |
BAJAJ TEMPO
LIMITED |
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Registered
Office : |
Mumbai – Pune
Road, Akurdi, Pune – 411 035, Maharashtra |
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Country : |
India |
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Financials (as
on) : |
31.03.2006 |
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Date of
Incorporation : |
08.09.1958 |
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Com. Reg. No.: |
11-11172 |
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CIN No.: [Company
Identification No.] |
L34102MH1958PLC011172 |
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TAN No.: (Tax Deduction
& Collection Account No.) |
PNEB00002C |
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PAN No.: (Permanent
Account No.) |
AAACB7066L |
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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
: |
Manufacturer of
On-road Automobiles having 4 or More Wheels, Agricultural Tractors, Diesel
Engines, Moulds, Dies, Press Tools, Jigs and Fixtures. |
RATING &
COMMENTS
|
MIRA’s Rating
: |
A |
RATING
|
STATUS |
PROPOSED
CREDIT LINE |
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|
56-70 |
A |
Financial & operational base are regarded
healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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Maximum Credit
Limit : |
USD 8750000 |
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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 an
old, well established and a reputed company engaged in manufacturing and selling
of Tempo Travellers Tractors, etc. The company’s trade relations are reported
as fair. Payments are usually correct ad as per commitments. The company can
be considered good for business dealings at usual trade terms and conditions.
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LOCATIONS
|
Registered
Office : |
Mumbai – Pune
Road, Akurdi, Pune – 411 035, Maharashtra, INDIA |
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Tel. No.: |
91-20-22776380-89 |
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Fax No.: |
91-20-22775984/2773017 |
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E-Mail : |
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Website : |
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Plant
Locations : |
Ø Mumbai – Pune Road, Akurdi, Pune – 411
035, Maharashtra, India Ø
Pithampur,
District Dhar – 452 002, Indore, Madhya Pradesh, India |
DIRECTORS
|
Name : |
Mr. Abhay N. Firodia |
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Designation : |
Chairman & Managing Director |
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Age: |
57 years |
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Qualification: |
B. A. (Hons.) |
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Experience: |
34 years |
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Date of
Joining: |
1st July, 1987 |
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Previous
Employment: |
Kinetic Engineering Ltd – Managing Director - 2 & 1/2 years |
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Name : |
Mr. M. G. Chopda |
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Designation : |
Joint Managing Director ( w.e.f. 23.02.2002 ) |
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Name : |
Mr. S. S. Marathe |
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Designation : |
Director |
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Name : |
Dr. Rolf Bacher |
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Designation : |
Director |
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Name : |
Dr. V. A. Pai
Panandiker |
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Designation : |
Director |
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Name : |
Mr. S. N. Imandar |
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Designation : |
Director |
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Name : |
Dr. V. G. Bhide |
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Designation : |
Director |
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Name : |
Mr. Vinay Kothari |
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Designation : |
Director |
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Name : |
Mr. Sudhir Mehta |
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Designation : |
Director |
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Name : |
Mr. Bharat V.
Patel |
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Designation : |
Director |
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Name : |
Mrs. Anita
Ramchandran |
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Designation : |
Director |
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Name : |
Mr. Prasan
Firodia |
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Designation : |
Director |
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Name : |
Mr. S. A.
Gundecha |
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Designation : |
Director (w.e.f. 1st June, 2004) |
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Name : |
Mr. M. Venkataiah |
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Designation : |
Director (w.e.f.27.06.2006) |
KEY EXECUTIVES
|
Name : |
Mr. V. M. Mundada |
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Designation : |
Business Head (3 Wheelers) |
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Name : |
Mr. Amol Sandil |
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Designation : |
Advisor (Marketing) |
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Name : |
Mr. B.S. Khargaonkar |
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Designation : |
President (4-Wheelers) |
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Name : |
Mr. N.P. Raghunathan |
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Designation : |
President (Tractor) |
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Name : |
Mr. S. A. Gundecha |
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Designation : |
Company Secretary |
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Name : |
Mr. Y. Nath |
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Designation : |
Advisor (Projects) |
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Name : |
Mr Raider Singh |
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Designation : |
V. P. (Sales & Marketing) |
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Name : |
Mr. Arvind Goel |
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Designation : |
President (HCV) |
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Name : |
Mr. P. V. Inamdar |
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Designation : |
V. P. (Minidor Operations) |
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Name : |
Mr. A. N. Joshi |
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Designation : |
V. P. (Engine & Tractor Operations) |
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Name : |
Mr. P V K Rao V P |
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Designation : |
(Production Engineering) |
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Name : |
Mr. H. S. Pundle |
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Designation : |
V. P. (Transmission Operations) |
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Name : |
Mr. Ashwin Shastri |
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Designation : |
V. P. (4-Wheeler Operations) |
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Name : |
V. M. Yelne |
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Designation : |
V. P. (New Engine & Transmission) |
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Name : |
Mr. S- B. Subramaniam |
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Designation : |
Sr. G. M. (Finance) |
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Name : |
Mr. G.
Venkataramanan |
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Designation : |
Sr. G. M. (R
& D - HCV) |
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|
Name : |
Mr. R. V. Govind |
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Designation : |
Sr. G. M. (R
& D - 3-Wheeler) |
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Name : |
Mr. C. S.
Maikhuri |
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Designation : |
Sr. G. M. (R
& D - 4-Wheeler) |
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Name : |
Mr. R. Jagadishan
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Designation : |
Dy. G. M. (Info.
Services) |
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Name : |
Mr. D. K. Sanghvi
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Designation : |
Sr. D. M. (Audit) |
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MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Promoter’s Holding |
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|
Promoters |
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Indian Promoters |
6,228,267 |
47.27 |
|
Person
Acting in Concert |
593,127 |
4.50 |
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Sub
Total |
6,821,394 |
51.77 |
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Non Promoter’s
Holding |
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Institutional
Investors |
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Mutual Funds and UTI |
51,019 |
0.39 |
|
Banks, Financial Institution, Insurance Companies |
536,438 |
4.07 |
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FIIS |
450 |
0.00 |
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Sub
Total |
587,907 |
4.46 |
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Other Investors |
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|
Private Corporates Bodies |
2,644,841 |
20.07 |
|
NRIs / OCBs / Foreign Others |
126,518 |
0.96 |
|
Sub
Total |
2,771,359 |
21.03 |
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General Public |
2,995,569 |
22.73 |
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Grand
Total |
13,176,229 |
100.00 |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturer of
On-road Automobiles having 4 or More Wheels, Agricultural Tractors, Diesel Engines,
Moulds, Dies, Press Tools, Jigs and Fixtures. |
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Products : |
Ø Tempo – Trax - 870210 Ø Minidor - 870310 Ø Tempo Traveler –
870290 Ø Agricultural Tractors Ø Diesel Engines Ø Moulds Ø Dies Ø Press Tools Ø Jigs and Fixtures
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PRODUCTION STATUS
|
Particulars |
Unit
|
Licensed Capacity |
Installed Capacity |
Actual Production |
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|
On Road automobiles
having 4 or more wheels such as light, medium and heavy commercial vehicles,
jeep type vehicles and passenger cars covered under subheading (5) of heading
(7) of First Schedule to IDR Act including Three wheelers |
Nos |
60000 |
55000 |
35728 |
|
Agricultural
Tractor |
Nos |
12000 |
12000 |
4513 |
|
Diesel Engines
for other purposes |
Nos |
7500 |
6000 |
52 |
|
Moulds, dies,
press tools, jigs and fixtures |
Nos |
1000 |
500 |
534 |
GENERAL
INFORMATION
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Suppliers : |
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No. of Employees
: |
Around 4,662 |
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Bankers : |
Ø State Bank of India Ø Canara Bank Ø Standard Chartered Grindlays Bank Limited Ø Citibank NA Ø Bank of Maharashtra Ø Bank of America NT & SA Ø HDFC Bank Limited |
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Facilities : |
SECURED
LOANS :- [Figures are in Rupees
Millions]
UNSECURED LOANS
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Banking Relations : |
Satisfactory |
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Auditors : |
P. G. Bhagat Chartered
Accountant Pune,
Maharashtra, India Cost Auditors
Dhananjay V.
Joshi & Company Chartered Accountants
Pune,
Maharashtra, India |
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Associates : |
Ø Jaya Hind Industries Limited Ø S. M. Auto Engineering Private Limited Ø Sparco Engineering Private Limited Ø Pinnacle industries Limited Ø Kinetic Engineering - a leading moped Luna
Manufacturer Ø Kinetic Honda - a joint venture with
Honda, for scooters Ø Z. F. Steering Gear (India) Limited Ø Twentieth Century – Kinetic Finance Ø Integrated Finance Ø Kinetic Capital Ø
Tempo
Finance (North) |
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Subsidiaries : |
Tempo Finance (West) Private Limited
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Memberships : |
Confederation of Indian Industry |
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Parent
Company: |
Ø Firodia Group : Firodias
( Mr. H. K. Firodia and Mr. N. K. Firodia, two brothers) played a pioneering role
in the development of 2 wheelers and commercial vehicles industry in
India. Bajaj Tempo and Bajaj Auto
were both jointly promoted by the late Mr. Jamnalal Bajaj and Mr. H. K.
Firodia. The two partners parted ways
and Firodias kept control of Bajaj Tempo. The group has set up
5 finance companies namely Twentieth Century
Kinetic Finance, Integrated Finance, Kinetic Capital,
Tempo Finance (West) and Tempo Finance
(North) |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
20,000,000 |
Equity Shares |
Rs.10 each |
Rs. 200.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
13213802 |
Equity Shares |
Rs.10 each |
Rs. 132.138 millions |
Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
131, 76,262 |
Equity
shares fully paid up |
Rs. 10 each |
Rs. 131.762 million |
|
Add : |
Amount paid on
forfeited shares |
|
Rs. 0.028 million |
|
|
Total |
|
Rs. 131.790 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF
FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
131.790 |
131.790 |
131.790 |
|
2] Reserves & Surplus |
2109.202 |
1807.862 |
1780.675 |
NETWORTH
|
2240.992 |
1939.652 |
1912.465 |
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
2073.297 |
466.310 |
429.709 |
|
2] Unsecured Loans |
178.625 |
110.841 |
156.851 |
TOTAL
BORROWING
|
2251.922 |
577.151 |
586.560 |
|
|
|
|
|
TOTAL
|
4492.914 |
2516.803 |
2499.025 |
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
2294.305 |
1201.405 |
1143.061 |
|
Capital work-in-progress |
859.553 |
132.806 |
40.610 |
|
|
|
|
|
|
INVESTMENTS |
25.752 |
25.752 |
25.451 |
DEFERREX TAX ASSETS
|
120.446 |
68.374 |
101.680 |
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
2138.386 |
1850.620 |
1522.541 |
|
Sundry Debtors |
1068.786 |
762.654 |
1125.831 |
|
Cash & Bank Balances |
141.391 |
127.174 |
141.232 |
|
Other Current Assets |
1.047 |
0.775 |
0.840 |
|
Loans & Advances |
1018.903 |
405.665 |
324.340 |
|
Total Current Assets |
4368.513 |
3146.888 |
3114.784 |
|
Less: CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
Current Liabilities |
3175.655 |
2058.422 |
1822.510 |
Provisions
|
0.000 |
0.000 |
104.051 |
Total Current Liabilities
|
3175.655 |
2058.422 |
1926.561 |
|
Net Current
Assets |
1192.858 |
1088.466 |
1188.223 |
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
TOTAL
|
4492.914 |
2516.803 |
2499.025 |
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
Sales Turnover |
9338.125 |
8561.219 |
|
|
|
Other Income |
427.143 |
393.267 |
|
|
|
Total Income |
9765.268 |
8954.486 |
9793.447 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
(503.631) |
66.548 |
704.194 |
|
|
Provision for Taxation |
(202.291) |
39.361 |
262.068 |
|
|
Profit/(Loss) After Tax |
301.340 |
27.187 |
442.126 |
|
|
|
|
|
|
|
|
Total Earnings |
161.174 |
(109.645) |
116.996 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
109.752 |
402.232 |
|
|
|
Components |
573.629 |
429.368 |
|
|
|
Stores & Spares |
0.396 |
0.047 |
599.889 |
|
|
Capital Goods |
399.132 |
41.406 |
|
|
|
Others |
32.763 |
43.261 |
|
|
Total Imports |
1115.672 |
916.314 |
599.889 |
|
|
|
|
|
|
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|
Expenditures : |
|
|
|
|
|
|
Raw Material Consumed |
7026.789 |
6223.205 |
|
|
|
Depreciation & Amortization |
426.790 |
312.110 |
9123.703 |
|
|
Other Expenditure |
3006.468 |
2462.390 |
|
|
Total
Expenditure |
10460.047 |
8997.705 |
9123.703 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.20056 |
|
Sales
Turnover |
1973.600 |
2438.300 |
2542.500 |
|
Other
Income |
74.600 |
106.100 |
522.700 |
|
Total
Income |
2048.200 |
2544.400 |
3065.200 |
|
Total
Expenditure |
2075.200 |
2530.200 |
2726.700 |
|
Operating
Profit |
(27.000) |
14.200 |
338.500 |
|
Interest |
(35.300) |
49.300 |
42.300 |
|
Gross
Profit |
(62.300) |
(35.100) |
296.200 |
|
Depreciation |
92.900 |
(112.600) |
104.800 |
|
Tax |
(47.200) |
(79.700) |
55.400 |
|
Reported
PAT |
(108.000) |
(68.000) |
122.100 |
200606 Quarter 1
Notes
EPS is Basic and
Diluted Status of Investor Complaints for the quarter ended June 30, 2006
Complaints Pending at the beginning of the quarter 01 Complaints Received during
the quarter 07 Complaints disposed off during the quarter 08 Complaints
unresolved at the end of the quarter Nil 1. In pursuance of the Letter of
Intent with MAN Nutzfahrzeuge Aktiengesellsehaft, Germany (MAN), dated November
09, 2005, the Company has now entered into joint vent agreement dated April 30,
2006, for manufacture of Heavy Commercial Vehicles (HCV) with MAN. Accounting
Standard 26, has been followed in accounting for expenses of this project. The
assets and liabilities of HCV project, which are under compilation, will be
assigned at book value to proposed Joint Venture Company, MAN FORCE Trucks
Private Limited 2. The Company is operating in a single Segment 3. Previous
year / period's figures are regrouped wherever necessary. Due to change in the
method of providing depreciation, from written down value method to straight
line method, adopted on March 31, 2006, the Provision for depreciation for
current quarter is not comparable with the quarter ended on June 30, 2005. 4.
The unaudited Financial Results ( Provisional) for the quarter ended on June
30, 2006 have, been subjected to limited review by the Auditors. 5. The above
was taken on record and approved by the Board of Directors in its meeting held
on July 29, 2006.
200609 Quarter 2
Notes
Expenditure
Includes (Increase) / Decrease in Stock in Trade Rs 160.274 million Consumption
of Raw Materials Rs 1733.401 million Staff Cost Rs 298.076 million Other
Expenditure Rs 338.458 million Tax Includes Provision for Taxation (Including
Fringe Benefit Tax Deferred Tax) EPS is Basic and Diluted Status of Investor
Complaints for the quarter ended September 30, 2006 Complaints Pending at the
beginning of the quarter Nil Complaints Received during the quarter 02
Complaints disposed off during the quarter 02 Complaints unresolved at the end
of the quarter Nil 1. In pursuance of the Letter of Intent with MAN
Nutzfahrzeuge Aktiengesellsehaft, Germany (MAN), dated November 09, 2005, the
Company has now entered into joint vent agreement dated April 30, 2006, for
manufacture of Heavy Commercial Vehicles (HCV) with MAN. Accounting Standard
26, has been followed in accounting for expenses of this project. The assets
and liabilities of HCV project, will be assigned at book value to Joint Venture
Company, MAN FORCE Trucks Private Limited which is expected by December 31,
2006. 2. The Company is operating in a single Segment. 3. Due to change in the
method of providing depreciation from written down value method to straight
line method, adopted on March 31, 2006, the provision for depreciation for the
corresponding periods is not comparable. 4. The unaudited Financial Results (
Provisional) for the quarter ended on Septeber 30, 2006 have, been subjected to
limited review by the Auditors. 5. The above was taken on record and approved
by the Board of Directors in its meeting held on October 28, 2006.
200612 Quarter 3
Notes
Other Income
Includes Other Income Rs 119.276 million Profit on sale of assets Rs 143.414
million Profit on sale of investments Rs 260.000 million Expenditure Includes
(Increase) / Decrease in Stock in Trade Rs 19.880 million Consumption of Raw
Materials Rs 1987.992 million Staff Cost Rs 324.466 million Other Expenditure
Rs 394.336 million Tax Includes Provision for Taxation Include Provision for
Taxation (Fringe Benefit Tax Deferred Tax) Rs 55.403 million Taxation in
respect of earlier years Rs 13.870 million EPS is Basic and Diluted Status of
Investor Complaints for the quarter ended December 31, 2006 Complaints Pending
at the beginning of the quarter Nil Complaints Received during the quarter 01
Complaints disposed off during the quarter 01 Complaints unresolved at the end
of the quarter Nil 1. Profit on sale of assets includes Rs 14,27,04,176/-
surplus on sale / transfer / assignment of assets of Rs 133,12,63,663/- of
Heavy Commercial Vehicle (HCV) Project to MAN FORCE TRUCKS Private Limited, a
subsidiary company, in which initially Rs 100,00,00,000/- was invested by way
of subscription to 10,00,00,000 equity shares of Rs 10/- each. 2. Profit on
sale of investments represents surplus on transfer of 30% equity shares out of
the above to MAN Nutzfahrzeuge Aktiengcsellsehaft, Germany (MAN) in terms of
Joint venture agreement dated April 30, 2006. 3. Other Expenditure Consequent
to the transfer of Heavy Commercial Vehicle Project, intangible assets
amounting to Rs 4,54,30,719/- recognised earlier as per Accounting Standard
(AS) 26, pertaining to the above project, has now been derecognised and charged
off to Profit and Loss Account in the current quarter. 4. The Company is
operating in a single Segment. 5. Due to change in the method of providing
depreciation, from written down value method to straight line method, adopted
on March 31, 2006, the provision for depreciation for the corresponding periods
is not comparable. 6. The Unaudited Financial Results (Provisional) for the
quarter ended on December 31, 2006 have been subjected to limited review by the
Auditors. 7. The above result are reviewed and recommended by the Audit
Committee and taken on record and approved by the Board of Directors in its
meeting held on January 27, 2007.
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt Equity Ratio |
0.68 |
0.30 |
0.36 |
|
Long Term Debt Equity Ratio |
0.38 |
0.07 |
0.14 |
|
Current Ratio |
1.17 |
1.29 |
1.34 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.55 |
1.55 |
1.86 |
|
Inventory |
5.45 |
5.93 |
7.40 |
|
Debtors |
11.87 |
10.59 |
11.71 |
|
Interest Cover Ratio |
4.85 |
4.53 |
16.99 |
|
Operating Profit Margin (%) |
7.28 |
3.96 |
9.57 |
|
Profit Before Interest and Tax Margin (%) |
3.36 |
0.83 |
6.71 |
|
Cash Profit Margin (%) |
6.70 |
3.39 |
6.83 |
|
Adjusted Net Profit Margin (%) |
2.77 |
0.27 |
3.98 |
|
Return on Capital Employed (%) |
10.41 |
3.33 |
33.19 |
|
Return on Net Worth (%) |
14.41 |
1.41 |
26.84 |
STOCK PRICES
|
Face Value |
Rs. 10/- |
|
High |
Rs. 336.00 |
|
Low |
Rs. 315.05 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was
incorporated on 8th September, 1958 at Pune in Maharashtra having
Company Registration Number 11172.
The company started
manufacturing operations in 1959, Bajaj Tempo came out with a public issue in
1964, and the company manufactured petrol-engined three-wheelers, which were
later powered by diesel engines (from 1977-78). Four-wheelers with petrol
engines were introduced in 1966-67 and changed to diesel engines in 1981-82. In
1980, new machinery was purchased and technical support obtained from
Mercedes-Benz, Germany, to manufacture 40,000 light commercial vehicles p.a. in
1993, Daimler Benz off-loaded over half a million shares of the company. Today,
three-wheelers, Matador, Tempo Traveller and Tempo Trax and the Minidor range
of vehicles constitute and product range of this Firoda group company with
plants in Pune and Pithampur. The firodias hold a 44%, while 22% and 16% is
held with Bajaj Auto and Daimler-Benz, respectively and the remaining stake is
held with the general public and others.
The company offered
rights in May’1993 at a premium of Rs. 90 per share to part-finance a project
to modernise manufacturing technologies and to add balance capacities in the
areas of foundry engine production and painting facilities. Bajaj Tempo has
entered the agricultural sector with the manufacture of an indigenously
developed tractor in technical collaboration with Robert Bosch, Germany. The
company also has collaborations with Zahnradfabrik Passau for synchromesh
transmissions; Deutsche Perrot for duo servo brakes.
During 1996-97, the
company successfully introduced tempo ‘OX-45’ tractor in the market. The
company also won the EEPC award for its excellent export effort for developing
exports in the African market. The 35 HP tractor was successfully launched in
1998-99.
The company has
expanded its tractor range. The company’s Tempo OX tractors is currently
available in the 35 hp and 45 hp category and is now entering the 25 hp and 60
hp category. The company has also revamped its Excel range of LCVs to meet the
Euro I and India 2000 norms and has re-launched the Excel. New variants of the
Tempo Tax have been introduced. Trax Judo is the upgraded machine with a
stylised all metal body with Euro I compliance. After getting a foothold in
Maharashtra, the three wheeler, Mindor, is finding its way to new markets in
Tamilnadu and Andhra Pradesh markets. The company has placed orders for new
machinery, equipments and capital assets for Rs. 31.700 millions.
Biodata
Commenced
manufacturing operations in 1959, Bajaj Tempo came out with a public issue in
1964. Initially, the company manufactured petrol-engined three-wheelers which
were later powered by diesel engines (from 1977-78). Four-wheelers with petrol
engines were introduced in 1966-67 and changed to diesel engines in 1981-82. In
1980, new machinery was purchased and technical support obtained from
Mercedes-Benz, Germany, to manufacture 40,000 light commercial vehicles p.a. In
1993, Daimler Benz off-loaded over half a million shares of the company. Today,
three-wheelers, Matador, Tempo Traveller and Tempo Trax and the Minidor range
of vehicles constitute the product range of this Firodia group company with
plants in Pune and Pithampur. The Firodias hold a 44%, while 22% and 16% is
held with Bajaj Auto and Daimler-Benz, respectively and the remaining stake is
held with the general public and others.
The company offered rights in May '93 at a premium of Rs 90 per share to
part-finance a project to modernise manufacturing technologies and to add
balance capacities in the areas of foundry engine production and painting
facilities. Bajaj Tempo has entered the agricultural sector with the
manufacture of an indigenously developed tractor in technical collaboration
with Robert Bosch, Germany. The company also has collaborations with Zahnradfabrik
Passau for synchromesh transmissions; Deutsche Perrot for duo servo
brakes.
During 1996-97, the company successfully introduced tempo 'OX-45' tractor in
the market. The company also won the EEPC award for its excellent export effort
for developing exports in the African market. The 35 HP tractor was
successfully launched in 1998-99.
The company has expanded its tractor range. The company's Tempo Ox tractors is
currently available in the 35 hp and 45 hp category and is now entering the the
25 hp and the 60 hp category. The company has also revamped its Excel range of
LCVs to meet the Euro I and India 2000 norms and has re-launched the Excel. New
variants of the Tempo Tax have been introduced. Trax Judo is the upgraded
machine with a stylised all metal body with Euro I compliance. After getting a
foothold in Maharashtra, the three wheeler, Mindor, is finding its way to new
markets in Tamil Nadu and Andhra Pradesh markets. The company has placed orders
for new machinery,equipments and capital assets for Rs.31.700 millions.
The gross turnover
for the year under report was Rs. 11297.3 millions as against Rs. 10391.7
millions for the previous year showing a marginal increase. Emphasis on Heavy
Commercial Vehicle Project, stiff competition and limited opportunity to pass
the cost increases to the customers affected the performance of the Company.
Your company has so
far been following "written down value method" for writing off
depreciation. While this method was found appropriate in earlier years, taking
into account technological changes in Engines and Transmissions led by
Environments Regulations, extent of fresh investments made and to be made for
future plans of the Company, the Board of Directors felt it necessary to review
the accounting policy for depreciation. In order that the financial statements
reflect a more appropriate presentation of the affairs of the Company and the
financial results, the Board of Directors feel that it would be prudent under
the circumstances to shift to the "Straight Line Method" from the
present Written Down Value Method in accordance with the rates prescribed in
Schedule XIV of the Companies Act, 1956. The Board of Directors intend to
continue to follow the Straight Line Method henceforth.
Attention of Members
is invited to Note No. 17 to Notes to Accounts.
In the light of
this situation, the Board of Directors has not recommended payment of any
dividend for the year under report.
Name Change
As reported
earlier, the litigation about name change is still pending before the Hon'ble
High Court of Judicature at Mumbai.
Market Situation
In view of the
provisions of the Listing Agreement, the Market Situation, Status of Operations
and of Heavy Vehicles Project etc., are dealt with in the "Management
Discussion & Analysis" attached hereto.
Exports
The export turnover
for the year under report was Rs. 16120 millions against the previous year's
exports of Rs. 10.96 millions. Export performance currently is at a
significantly higher level. Recent emphasis on exports are expected to yield
beneficial results.
Research &
Development
The expenditure on
Research & Development for new products, including the expenditure on
Projects and Tool Engineering, was 5.78% of the turnover. The Company has maintained
its emphasis on research, development and tool engineering activities.
Foreign
Collaborations
The progress in
procurement and absorption of technology as per the technical collaboration
agreements with MAN Nutzfahrzeuge AG, Man Osterreich AG, DaimlerChrysler AG and
ZF Friedrichshafen AG for engines, cabs, axles and gear boxes for various range
of products, including Heavy Commercial Vehicles, progressed satisfactorily
during the year under report. Your Company continued the emphasis of availing
of services of Experts, on selept basis as consultants, to bridge the
technological gap either for product development or for process engineering,
and to supplement the efforts of the Research & Development Department.
Industrial
Relations
As reported earlier,
the operations of the Company were affected by litigation between rival unions
of the
workmen at Akurdi,
Pune Plant. Claims for recognition by rival unions, operating at the Akurdi,
Pune Plant, impacted the operations of the Company and such impact continued
during the year under report. The Company's endeavour to extend a helping hand
for the general workmen did not meet with appropriate response from the
leadership of the unions.
During the month of
April, 2006, the litigation went from the lower court to the higher court and
the impasse thus caused continued to damage the business of the Company, its
suppliers and dealers, along with the interest of normal workmen themselves.
This aspect is
currently hindering the Company's performance and development efforts.
The industrial
relations at the Pithampur Plant, on the other hand, have been cordial and
constructive. The operations at Pithampur, dependent on Pune for critical
supplies, it may be recalled - were adversely
affected due to the
labour trouble at Pune.
Foreign Exchange
The foreign
exchange outgo arising out of the import of raw materials, components and
capital goods, is as per the details mentioned in the Notes to Accounts.
Orders for
Machinery
Since the close of
the Accounting Year the Company has placed orders for new machinery, equipments
and capital assets
for Rs. 25.5 millions.
OVERALL
PERFORMANCE OF THE COMPANY
The overall
performance of the Company, for the year under report, was marginally better than
the previous year, but continued to be affected by the industrial relations
issue at the Company's Akurdi, Pune Plant.
Concentration of
management's attention and resources, on the project for industrialization of
Heavy Commercial Vehicles, also affected the existing business. The market
evolution and new products from competition also affected the performance
during the year under report. The burden of material cost increases,
particularly increase in cost of steel, could not be fully passed on to the
customer, and this affected the bottomline of the Company.
INDUSTRY
STRUCTURE AND DEVELOPMENTS
IN EXISTING
BUSINESS
During the year
under report the shift in the three wheeled vehicles' market became more
obvious. Both in the passenger and load carrier usage the market shifted to the
lower capacity vehicles due to increased cost of fuel and operations for the
customer.
Introduction of
smaller versions of four-wheeled load carriers also resulted in shrinkage of
the market in the three-wheeled segment in which the Company operates. These
changes affected the Company's performance in the three-wheeled vehicles field.
To cater to these
changing needs of the customer, the Company introduced 'Minidor CB' version
during the year under report and the initial response has been encouraging. The
Product Development Programme for development of a smaller four-wheeled, load
carrier vehicle, on the lines of earlier product, has been undertaken and the
Company expects to introduce such product in the third quarter of
the current
financial year. These steps are expected to help the Company to gain volume in
the field of small LCVs. The new range of Minibuses - Citiline - met with good
success, and the Company could gain market share.
This was also
assisted by larger volumes of the well established Traveller Range and Trax
Range of vehicles.
The Company's
performance in the field of load carrying Light Commercial Vehicles was
satisfactory and moderate gain on the volume of products sold was registered.
The Tractor market
continued to be influenced more by financing arrangement than the technical or
product superiority. The Company could achieve a sale of 4,461 units of
Tractors during the year under report compared to 4,077 units of Tractors in
the previous year.
The Company has
gained ground in the market segments in which it has presence. The footprint of
Company's Product Range does not however cover large portions of the markets
for passenger or goods
vehicles.
HEAVY COMMERCIAL
VEHICLES PRODUCT
As reported
earlier, with the assistance of MAN Nutzfahrzeuge AG (MAN) and MAN Osterreich
AG, the Company is in the process of developing a range of Heavy Commercial
Vehicles with Gross Vehicle Weight ranging between 15 tons to 50 tons.
After considering the
progress made by the Company in absorption of technologies obtained from MAN
and the product development efforts made by the Company, MAN expressed a desire
to participate in the project of manufacture and sale of Heavy Commercial
Vehicles. The Company signed a Letter of Intent, for formation of a Joint
Venture, in the month of November 2005. Subsequent discussions resulted in a
Joint Venture Agreement which was signed on 30th April, 2006.
The Company has
established a new plant at Pithampur for manufacture of Heavy Commercial
Vehicles, which was also inaugurated on that date.
Several prototypes
of the vehicles have been made, tested internally and with the testing agencies
as per
the requirements of
the Motor Vehicles Act. The Company expects to start commercial production in
the second quarter of the current financial year. The initial sales are also
planned during this period.
The emphasis is on
the manufacture of Heavy Commercial Vehicles, with maximum local content, in
order to have the benefit of lower costs due to localization, maintaining the
high technology and quality standard. This step is expected to give a
competitive capability to the Company. MAN desire to market large quantities of
these Heavy Commercial Vehicles in select export markets.
In order to
implement the Joint Venture Project, MAN FORCE TRUCKS Private Limited, a
Subsidiary Company, was registered under the Companies Act, 1956.
The Company is in
the process of transferring all assets, liabilities, benefits and obligations
of the contracts - acquired, created or entered into - for the implementation
of the Heavy Commercial Vehicles
Project to this
Subsidiary Company. As per the agreed arrangement, MAN will hold 30% of the
equity of this Subsidiary Company; whereas 70% of the equity would be owned by
the Company. This Subsidiary
Company would be
managed by a Board of Directors consisting of nine Directors, six representing
the Company and three nominees of MAN.
The Consortium of
Banks, led by State Bank of India, has extended a line of credit of Rs.400
millions for various projects of the Company, including the Heavy Commercial
Vehicles Project. The Company is in discussions with these banks for seeking
their approval to this transfer. On receipt of permissions of the Banks, the transfer
process would be completed.
The Company has
initiated the process of seeking approval of the Members of the Company, for
this transfer, by Postal Ballot. The Madhya Pradesh Audyogik Kendra Vikas Nigam
(Indore) Limited has already approved, in principle, the transfer of a portion
of the leasehold land situated at Pithampur to this Subsidiary Company.
A separate
organization for key functions relating to this Project is already in place. A
separate distribution channel for distribution of Heavy Commercial Vehicles is
being created.
OUTLOOK FOR
2006-07 AND CONCERNS
The Company should
be able to achieve moderate growth in the various product segments in which the
Company's offerings are today available. The regulations governing the
passenger transport segment would continue to be the area of concern and
performance of the Company depends on the regulatory decisions of various State
Governments and the Central Government, such as, issuance of permits, road tax
and petroleum price strategies.
Though the Company
has the assistance of MAN available in various areas relating to production,
quality, marketing and export of Heavy Commercial Vehicles, the efforts and the
risk associated with introduction of new products remains at high level.
On the balance, the
year 2006-07 is expected to be a year with moderate growth. Also the effect of
the initial cost of introduction, and of separation of the Heavy Commercial
Vehicles business into a separate legal entity, needs to be kept in mind. This may
have an effect on the bottomline for 2006-07.
An early resolution
of the present stalemate on the industrial relations front will have beneficial
effect on the prospects of Company's business, but as the matter is subjudice
and the litigation is time consuming, the Company has limited leverage on this
aspect.
FINANCIAL
PERFORMANCE
During the
financial year 2005-06, the Company achieved net sales of Rs. 9339.4 millions
compared to Rs. 8563.3 millions during the previous year. This growth of 9% is
a moderate growth. The material cost was 75.24% of the net sales compared to
72.67% in the previous year. Input cost pressure continued through the year.
The employee cost went up from 11.39% to 13.73%. Implementation of new projects
resulted in additional cost of interest which went up from Rs. 18.4 millions
for the previous year to Rs. 75.1 millions for the year under report. Change in
the depreciation method resulted in the comparable decrease in the depreciation
charged to Profit & Loss Account for the year. In spite of this the
depreciation charge was Rs. 426.7 millions compared to Rs. 312.1 millions for
the previous year due to substantial capital investment.
As reported in the
Board Report of even date, the Board of Directors considered it fit to change
the method of charging depreciation from 'Written Down Value Method' to
'Straight Line Method'. The impact of this change has been explained in detail
in Note No. 17 to the Notes to Accounts.
The profit for the
year, net of depreciation and gratuity provision effects, was Rs. 294.1
millions compared to Rs. 66.5 millions of the previous year. The Company
decided to change the accounting policy for accounting of gratuity liability
from the Financial Year 2005-06.
The Company's
borrowings, both secured and unsecured, were Rs. 2251.9 millions as compared to
Rs. 577.2 millions in the previous year.
Mr. M.
Venkataiah
Mr. M. Venkataiah,
62, is a MIE Graduate and has started his career as Planning Engineer and has
wide experience in Automobile Design, Manufacturing Process, Tool Designing,
Capital Goods procurements. Presently he is the Executive Director of Jaya Hind
Industries Limited, one of the largest Die Casting Foundries in the country.
Mr. Venkataiah holds directorships in Jaya Hind Industries Limited and Kinetic
Motor Company Limited. The Company received an intimation in the prescribed
form as per the provisions of the Companies (Disqualification of Director Under
Section 274(1 )(g) of the Companies Act, 1956) Rules, 2003 from him.
Mr. S. A.
Gundecha
Mr. S. A. Gundecha,
51, is a Commerce Graduate with degree in Law and he is an Associate Member of
The Institute of Company Secretaries of India. Mr. S. A. Gundecha was
associated with the company as the Company Secretary from 1981 to 2002 and has
vide experience in Finance, Taxation and Legal matters. Mr. S. A. Gundecha
holds directorships in Pinnacle Industries Limited, Dhanna Engineering Private
Limited and Tempo Finance (North) Private Limited. The Company received an
intimation in the prescribed form as per the provisions of the Companies
(Disqualification of Director Under Section 274(1 )(g) of the Companies Act,
1956) Rules, 2003 from him.
Company’f fixed
assets includeIntangibler assets, Freehold Land, Leasehold Land, Buildings,
Plant and Machinery, Equipments, Dies and Jigs, Electric Installations,
Furniture and Fixtures, Electric Fittings, Vehicles, Aircraft.
The company is in
trade terms with :
v
Caspro Metal
Industries Private Limited
v
Emdet
Engineers Private Limited
v
Ganesh Forge
Private Limited
v
Kaygee
Engineering Private Limited
v
Perfect
Pattern Works
v
Sheetal
Enterprises
v
Shah
Industries
v
Trishul
Forgings
v
Maruti
Products
v
Jay Industries
v
Maharashtra
Tyre and Rubber Industies
The company's fixed
assets of important value includes Freehold & Leasehold Land, Buildings,
Plant, Machinery and Equipments, Dies & Jigs, Electric Installation,
Furniture & Fixtures, Electric Fittings, Vehicles and Aircrafts.
AS
PER WEBSITE
Press Release :
Man Truck wins the
NDTV Car and Bike “Truck of the year” -2007
The CLA 49.280
launched by Man Force Trucks, wins the “Truck of the year -2007”. The award was
received by the chairman of Man Force Trucks Mr. Abhay Firodia at glittering
ceremony attended by the who’s who of Automobile industry at the ITC Grand
Maratha Sheraton, Mumbai on the 12th of January 2007.
Continuing in the
tradition set by MAN, the Cargo Line Asia (CLA) has won this prestigious award
in the year o fits introduction in India. MAN is the only manufacturer oto win the
globally acclaimed “Truck of the year award” six times.
Man Trucks have
always stood for top performance in terms of reliability, payload and fuel
consumption. German Engineering at its best, Now in India.
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 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.44.17 |
|
UK Pound |
1 |
Rs.85.58 |
|
Euro |
1 |
Rs.58.67 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history (10%) Market
trend (10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|