MIRA
INFORM REPORT
|
Report Date : |
04.05.2007 |
IDENTIFICATION DETAILS
|
Name : |
SHRIRAM TRANSPORT FINANCE COMPANY LIMITED |
|
|
|
|
Registered Office : |
123, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
31.03.2006 |
|
|
|
|
Date of Incorporation : |
30.06.1979 |
|
|
|
|
Com. Reg. No.: |
7874 |
|
|
|
|
CIN No.: [Company
Identification No.] |
U65191TN1979PLC007874 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
CHES00900E |
|
|
|
|
Legal Form : |
Public Limited Liability Company. The Company’s shares are listed on
the Stock Exchanges. |
|
|
|
|
Line of Business : |
Subject is engaged in business of Hire Purchase, Leasing and
Hypothecation Loan activities. |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 33550000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well-established and reputed company having satisfactory
track. 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. The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
|
Registered Office : |
123, |
|
Tel. No.: |
91-44-25341431 |
|
|
|
|
Head Office : |
|
|
Tel. No.: |
91-22 4095 9595 |
|
Fax No.: |
91-22 4095 9596 |
|
|
|
|
Branches : |
Located at : Adoni Ahmedabad Ahmeonagar Alwar Amalapuram Ambikapur Amravat! Anand Ananthpur Angamaly Angul Asan5ol Athur Bagalkot Baramati Bareily Barmer Basavakalayan Begusarai Behrampur Bharatpur Bharuch Bhilai Bhilwara Bhimavaram Bhuvaneshwar Bidar Bijapur Bilaspur Bokaro Burdwan Burhanpur Chadikhole Chamaraja Nagar Chandrapur Channarayapatna Chennai Chikkodi Chikmagalore Chinchwad Chindwara Chiplun Chitradurga Chittorgarh Cuddapah Cuttak Dausa Davangere Dheradhun Dhanbad Dharampuri Dharwad Dind1gul Earnakulam Erode Faizabad Farrukhabad Gadag Gajuwakka Gandhidham Gangavathi Gaziabad Ganganagar Godhara Gond1a Gudiwada Gudur Guna Gurgaon Haldwani Haranppanhalli Hassan Haveri Himmatnagar Hindupur Hissar Hosadurga Hospet Hosur Hubli Humnabad Hunsur Iikal Indira Nagar J P Nagar Jagadamba Jagdalpur Jaipur Jaisalmer Jalandhar Jalgoan Jhunjhun Junagadh Kaithal Kanchipuram Kankavli Kannur Karaikudi Karim Nagar Karnal Karur Kasargode Katni Khamgoan Khammam Kharagpur Khatedhan Kolar Kolkata Koppal Korba Kotputli Kottayam Nandyal Nashik Navi Mumbai Navsar! Nizamabad Ongale Palanpur Palghat Pandarpur Paramakudi Parbhani Parvathipuram Pathanamthitta Pathankot Pollachi Proddatur Pudukottai Pune Puttur Kukatpally Yulluh Kumbakonam Kumta Kunnamkulam L B Nagar Lakhimpur Latur Lingsur Madanapalli Madikeri Madiwala Madura! Mancherial Mandapeta Mandya Mangalore Manjer1 Margoa Mehboob Nagar Mehsana Mettupalayam Miryalaguda Moga Mudabidri Mumbai Muzzaffarpur Nagaur Nagercoil Nanded Kaibaklilly Raichur Raigarh Rajahmundary Rajnandgaon Ratlam Ratnagiri Renukot Rewa Rohatak Sadulpur Sagar Sagara Sahibabad Sakaleshpura Sambalpur Sandur Sangli Saraipali Sindhanur Sirohi Sirs! S1vakashi Srikakulam Sulthanbathery Surendranagar Swaimadhopur Tambaram Tdasarahalu Thalassery Thane Thanjavur Then Tiptur Tirunelveli Tirupati Tiruvannamalai Tiruvarur Trichur Trichy Tumkur Tuticorin Udupi Vapi Vuayanagar Vuaywada Villupuram Vizag Vizianagaram Wada Waidhan Wardhaman Nagar Yadgir Yaiviunanagar Yeshwanthpur |
DIRECTORS
|
Name : |
Mr. R Sridhar |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Arun Duggai |
|
Designation : |
Chairman (Independent Director) |
|
|
|
|
Name : |
Mr. Umesh G Ravikrishnan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Mukund M Chitale |
|
Designation : |
Independent Director |
|
|
|
|
Name : |
Mr. S Venkatakrishnan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Mayashankar Verma |
|
Designation : |
Independent Director |
|
|
|
|
Name : |
Mr. S Ranaganathan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Adit Jain |
|
Designation : |
Independent Director |
|
|
|
|
Name : |
Mr. K R C Sekhar |
|
Designation : |
Director |
|
Address : |
|
|
Date of Birth/Age : |
Mr. T S Sethurathnam |
|
Qualification : |
Director |
|
|
|
|
Name : |
Mr. Ravinder Behi |
|
Designation : |
Director |
|
|
|
|
Name : |
Puneet Bhatia |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sanjay Kukreja |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ranvir Dewan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sumatiprasad M Bafna |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. K Prakash |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Corporate Bodies |
56,408,872 |
36.10 |
|
Banks |
2,700,866 |
1.73 |
|
Clearing Members |
2,091,602 |
1.34 |
|
FII |
23,634,984 |
15.13 |
|
Mutual Funds |
763,721 |
0.49 |
|
NRI |
346,786 |
0.22 |
|
Overseas Corporate Bodies |
50 |
0.00 |
|
Foreign Companies |
34,332,378 |
21.97 |
|
Public |
31,551,504 |
20.19 |
|
Trust |
4,423,167 |
2.83 |
|
Unit Trust of |
1,650 |
0.00 |
|
TOTAL
|
156,255,580 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject is engaged in business of Hire Purchase, Leasing and Hypothecation
Loan activities. |
|
|
|
|
Products : |
v
Finance Charges and Interest Receipts v
Minimum Guaranteed Compensation Charges v
Lease Rentals |
GENERAL INFORMATION
|
No. of Employees : |
Around 3710 |
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
|
Bankers : |
v
Bank of v
Bank of v
Bank of v
Bank of v
Canara Bank v
Centurion Bank of v
City Union Bank v
Corporation Bank v
Dena Bank v
Development Credit Bank v
Dhanlaxmi Bank v
DBS v
HDFC Bank v
HSBC v
ICICI Bank v
IDBI Bank v
Indian Overseas Bank v
ING Vysya Bank v
Kotak Mahindra Bank v
Oriental Bank of Commerce v
Punjab & Sind Bank v
Punjab National Bank v
Standard Chartered Bank v
State Bank of v
State Bank of v
State Bank of Travancore v
The Lakshmi Vilas Bank v
UCO Bank v
Union Bank Of v
United Bank of v
United Western Bank v
UTI Bank v
Yes Bank |
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
|
Facilities : |
Secured Loans : (Rs.
In millions)
Unsecured Loans
:
|
|
|
|
|
Banking
Relations : |
Satisfactory |
|
|
|
|
Auditors : |
|
|
Name : |
G. D. Apte & Company Chartered
Accountants |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
335000000 |
Equity Shares |
Rs.10/- each |
Rs.3350.000 millions |
|
20000000 |
Preference Shares |
Rs.100/- each |
Rs.2000.000 millions |
|
|
Total |
|
Rs.5350.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
150540580 |
Equity Shares |
Rs.10/- each |
Rs.1505.406
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 |
1505.646 |
907.350 |
672.100 |
|
|
3]Share Capital Suspense |
186.459 |
0.000 |
0.000 |
|
|
4]Optionally Convertible Warrants |
199.203 |
10.381 |
0.000 |
|
|
5]Employees Stock Options Outstanding |
35.349 |
0.000 |
0.000 |
|
|
6] Reserves & Surplus |
6462.318 |
1316.828 |
506.000 |
|
|
7] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
8388.975 |
2234.559 |
1178.100 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
37430.389 |
13000.059 |
8706.000 |
|
|
2] Unsecured Loans |
6530.483 |
1611.593 |
447.100 |
|
|
TOTAL BORROWING |
43960.872 |
14611.652 |
9153.100 |
|
|
DEFERRED TAX LIABILITIES |
1336.885 |
534.998 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
53686.732 |
17381.209 |
10331.200 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1568.190 |
489.088 |
525.100 |
|
|
Capital work-in-progress |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
91.542 |
40.749 |
47.600 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
55771.466
|
17671.559 |
9147.400 |
|
|
Sundry Debtors |
|
|
|
|
|
Cash & Bank Balances |
|
|
|
|
|
Other Current Assets |
|
|
|
|
|
Loans & Advances |
4754.956
|
1872.886 |
2959.500 |
|
Total
Current Assets |
60526.422
|
19544.445 |
12106.900 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
6115.186
|
2018.801 |
2355.100 |
|
|
Provisions |
2388.353
|
678.715 |
|
|
Total
Current Liabilities |
8503.539
|
2697.516 |
2355.100 |
|
|
Net Current Assets |
52022.883
|
16846.929 |
9751.800 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
4.117 |
4.443 |
6.700 |
|
|
|
|
|
|
|
|
TOTAL |
53686.732 |
17381.209 |
10331.200 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
Sales Turnover |
8984.334 |
3433.515 |
2573.400 |
|
|
Other Income |
102.349 |
24.665 |
16.700 |
|
|
Total Income |
9086.683 |
3458.180 |
2590.100 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
2161.687 |
778.689 |
557.300 |
|
|
Provision for Taxation |
745.277 |
285.451 |
188.900 |
|
|
Profit/(Loss) After Tax |
1416.410 |
493.238 |
368.400 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Administrative Expenses |
1831.330 |
777.486 |
810.400 |
|
|
Interest |
4150.593 |
1627.964 |
1166.300 |
|
|
Depreciation & Amortization |
97.899 |
47.166 |
56.100 |
|
|
Other Expenditure |
845.174 |
226.875 |
0.000 |
|
Total Expenditure |
6924.996 |
2679.491 |
2032.800 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2006 (1st
Qtr.) |
30.09.2006 (2nd
Qtr.) |
31.12.2006 (3rd
Qtr.) |
|
Sales Turnover |
2638.900 |
3348.700 |
3749.100 |
|
Other Income |
11.900 |
20.700 |
7.500 |
|
Total Income |
2650.800 |
3369.400 |
3756.600 |
|
Total Expenditure |
790.400 |
1006.700 |
1013.500 |
|
Operating Profit |
1860.400 |
2362.700 |
2743.100 |
|
Interest |
1295.000 |
1644.000 |
1842.400 |
|
Gross Profit |
565.400 |
718.700 |
900.700 |
|
Depreciation |
26.100 |
24.800 |
26.500 |
|
Tax |
190.500 |
229.000 |
298.500 |
|
Reported PAT |
348.800 |
464.900 |
575.700 |
200606 Quarter 1
NOTES:
EPS is Basic. 1. The above results were approved by the board of
directors at their meeting held today. 2.A scheme of amalgamation of Shriram
Recon Trucks Limited (SRTL) with Shriram Overseas Finance Limited (SOFL) has
been sanctioned by the High Court of Madras. The scheme is awaiting the
sanction from the High Court,
200609 Quarter 2
Notes
1. The standalone financials of the company were adopted by the Board at
Its meeting held on 29th November 2006. 2. Shriram Overseas Finance Limited.
(SOFL) has been merged with the Company with effect from 1 st April 2005 (
being the appointed date), pursuant to the order passed by the Honourable High
Court of Judicature at Madras on 1 st December 2006. Earnings per Share has
been calculated after considering the consequent increase in the share capital
pursuant to the merger. The paid up Equity Share Capital as on 31 St March 2006
and 30th September 2006 includes a sum of Rs.186.459 millions being the equity
share capital which is to be allotted to the shareholders of SOFL as per the
scheme of amalgamation. 3. Consequent to the merger, the financials of the merged
entity after taking into consideration the financials of SOFL were approved by
the Board of Directors at their meeting held on 2nd December 2006. 4. Aggregate
of Public Share holding is given without considering that of the transferor
company (SOFL). 5. The Company has entered into Interest Rate Swaps and Cross
Currency Swap contract with a notional value of Rs. 7650 millions at September
30, 2006, the mark to market loss on these contracts amounted to Rs. 53
millions, and has been reflected in the Financial Statement. The Company has
subsequently terminated swap contracts with a notional value of Rs. 6750
millions and realized a gain of Rs. 32.800 millions. 6. An interim dividend of
Rs. 1/- per share has been declared by the Board of Directors for the year
2006-07 at its meeting held on 29th November 2006. The Shareholders of SOFL
(the transferor company) will also be eligible for the dividend on allotment of
shares by this company to them. 7. The Company has alloted 5715000 Equity
Shares of Rs.10/- each for cash at a premium of 85.25/- against the Optionally
Convertible Warrants to UNO Investments on 7th August 2006. 8. The figures for
the previous period have been regrouped/ rearranged wherever necessary. 9. The
Company operates in only one reportable segment. 10 The Company received Nil
complaints during the quarter ended 30th September 2006 from the shareholders.
200612 Quarter 3
Notes
EPS is Basic 1. The above results were approved by the Board of Directors
at their meeting held on January 30, 2007. 2. Shriram Overseas Finance Limited.
(SOFL) has been merged with the Company with effect from April 01, 2005 (being
the appointed date), pursuant to the order passed by the Honourable High Court
of Judicature at Madras on December 01 2000. 3. The Share Capital Suspense
represents 18645886 Equity Shares of Rs 10/- each to be allotted to the equity
shareholders of SOFL consequent to merger. 4 Earnings per Share has been
calculated after considering the equity shares to be allotted to the equity
shareholders of SOFL consequent to the merger. 5. Aggregate of Public Share
holding is given without considering the shares to be allotted to the Equity
Shareholders of SOFL. 6. The figures for the previous period have been
regrouped/ rearranged wherever necessary. 7 The Company operates in only one
reportable segment. 8. The Company received Nil complaint during the quarter
ended December 31, 2006 from the shareholders.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
5.64 |
6.98 |
6.90 |
|
Long Term Debt-Equity Ratio |
5.18 |
6.81 |
6.70 |
|
Current Ratio |
4.19 |
5.11 |
4.44 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
7.33 |
5.22 |
4.21 |
|
Inventory |
1.51 |
0.54 |
0.41 |
|
Debtors |
191.90 |
150.03 |
49.15 |
|
Interest Cover Ratio |
1.52 |
1.48 |
1.48 |
|
Operating Profit Margin(%) |
70.54 |
70.96 |
68.71 |
|
Profit Before Interest And Tax Margin(%) |
69.47 |
69.59 |
66.55 |
|
Cash Profit Margin(%) |
16.67 |
15.63 |
16.39 |
|
Adjusted Net Profit Margin(%) |
15.59 |
14.26 |
14.22 |
|
Return On Capital Employed(%) |
18.31 |
17.72 |
20.31 |
|
Return On Net Worth(%) |
27.65 |
32.49 |
41.99 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.126.00 |
|
Low |
Rs.125.00 |
LOCAL AGENCY FURTHER INFORMATION
Director’s Profile
:
Arun Duggal –
Chairman
Arun Duggal is an International Business Advisor. He was with Bank of
America for 26 years from various locations including
R Sridhar-
Managing Director
R. Sridhar is a fellow member of the Institute of Chartered Accountants
of India. He joined Shriram in 1985 and
was later promoted as President of the Company, in 1994. He was coopted
as an Additional Director and appointed as the Managing Director of the Company
in September 2000.
Sridhar has over two decades of experience in the financial service
sector, especially in commercial vehicle financing. He also holds the
directorship of 'Shriram Holding (
Adit Jain -
Director
Adit Jain is the Managing Director of IMA India, a Company he
established in 1994. He chairs the Company's CEO and CFO programmes, which are
retainer based forums and have over 700 clients from across the country.
He speaks regularly at conferences and has been called upon to depose as
an Expert Witness in Parliamentary Committee Proceedings. Adit is a
Non-Executive Director on the Board of Sanmar Group, International Asset
Reconstruction Company, and PR Pundit. Previously, Adit worked as Vice
President and Head of M&A at Lazard,
Administration.
Director
S. Venkatkrishnan is an IA & AS retired. He has served at senior positions
in the Finance Audit & Accounts department of the government and other
public undertakings. He has been serving in the Company as an advisor for over
a decade. He is also on the Board of Shriram Industrial Holding Private
Limited, Shriram Exports Private Limited, Hymvathi Enterprises Private Limited,
Bhilahari Enterprises Private Limited, Charukeshi Investments Private Limited,
Galda Finance Limited, RKP Investments Private Limited, Rambal Properties
Private Limited, Shriram City Union Finance Limited, Road Safety Club Private
Limited, and Ranjani Enterprises PrivateLimited.
Mayashankar Verma -
Director
Mayashanker Verma, former chairman State Bank of
Mukund Manohar Chitale -
Director
Mukund Manohar Chitale is a practicing Chartered Accountant. He was
President of the Institute of Chartered Accountants of India during 1997-98 and
a member of "International Auditing Practices Committee" of the
International Federation of Accountants from January 1998 to June 2000. He was
nominated by Securities and Exchange Board of India as a Public Representative
Director on the Stock Exchange, Mumbai from October 1998 to July 2000. Mukund
has also been a lecturer in the Accountancy Department at some renowned colleges,
and has written articles and presented papers at various seminars and
conferences.
Puneet Bhatia –
Director
Puneet Bhatia is the Managing Director of TPG New bridge. Prior to
joining New bridge in April 2002, he was the Chief Executive of the Private
Equity Group for GE Capital India. As Chief Executive, he created and handled a
portfolio of almost a dozen companies aggregating investments of over $100
million. Prior to this, Puneet was with ICICI Limited. from 1990 to 1995 in the
Project and Corporate Finance group and worked as Senior Analyst with Crosby
Securities from 1995 to 1996. He currently serves on the Board of Directors of
Matrix Laboratories and Shriram Transport Finance. Puneet holds a degree in
Commerce and an M.B.A. from, the Indian Institute of Management, Kolkata.
Ravindra Behl –
Director
Ravindra Behl has 30 years of experience primarily in financial
services, where he spent most of his career working with Citibank. He was the
Country Manager for Retail Banking in
leaving Citibank in 1997, he built and managed the Indian operations of
e Funds, a transaction processing company. Ravindra holds a Bachelors degree in
English Literature and an M.B.A. from the Indian Institute of Management,
Kolkata.
Ranvir Dewan -
Director
Ranvir Dewan is a Fellow of the
Sanjay Kukreja -
Director
Sanjay Kukreja currently represents Chrys Capital on the board of
SUBJECT. He has been with Chrys Capital since its inception, and along with
Ravi Behl, has been instrumental in deploying in excess of $200 million across
the financial services sector in Companies such as Shriram, UTI bank, Centurion
Bank, Yes Bank, Mahindra & Mahindra Financial Services Company Limited. And
Bajaj Auto Finance Company Limited.
Besides SUBJECT, Sanjay is also on the board of directors of Titagarh
Wagons Limited.
Dr. T. S. Sethurathnam -
Director
T.S. Sethurathnam served for 35 years in the M.P. Electricity Board and
held senior positions before being promoted as the Chairman. He had the longest
tenure as Member / Chairman for over 15 years. He has also been Chairman of the
Western Regional Electricity Board; Chief Consultant to Power Finance
Corporation; Consultant to Houston Industries, Smith Cogeneration (
Sumatiprasad M. Bafna -
Director
Sumatiprasad M. Bafna is a science graduate and started his career in
the year 1984 under the guidance of his late father Mishrilal C. Bafna. He
thereafter started an independent dealership of Tata Motors at Ratnagiri,
Maharastra in the year 1995, and a Mumbai Dealership in the year 2001.
His company has been the No. 1 dealer for Tata Motors in the year
2003-2004 and 2004-2005. Sumatiprasad is on the Board of more than 10 companies
and also holds dealerships of Honda, Hyundai and Maruti. He has extensive
experience and a firm base in the transportation business.
INDUSTRY OVERVIEW
Introduction
During the last decade,
Non-banking Finance Companies (NBFCs)
A competent financial system, which gives access to affordable credit to
an extensive section of society, is imperative for sustainable economic growth
for any country. In
increase in the levels of credit penetration that they are bringing
about. The rigidity of the banking system's policies for lending, especially in
the automobile and transport sector, is consequently giving NBFCs an opportunity
to meet this unmet demand through their perceptive lending. As on March 31st
2006, there were 13,049 NBFCs, of which 434 are permitted to accept and hold
public deposits. Amongst a sea of players, Subjecthas emerged as the undisputed
largest asset financing NBFC in the country. with total assets under management
of close to Rs. 75000 millions. Focusing on the new and pre owned transport
vehicles segments, it is a market leader in the commercial vehicle (CV)
financing space, with approximately 20% market share in pre-owned commercial
vehicles. The rest of the market is serviced primarily by the unorganised
sector, essentially made up of private financiers.
BUSINESS ENVIRONMENT
The country's gross domestic product grew at 8.4% between April 2005 and
March 2006. Industrial deregulations more flexible exchange rate, stronger debt
and equity markets, lower trade barriers have helped in achieving this dynamic
growth. During the first quarter of the current fiscal, GDP grew at nearly
9%.The growth is being driven by robust growth in the manufacturing sector,
which is over 11%, and service sector, which is in excess of 9%.This indicates
a structural shift in economic growth, as this is the 12th
consecutive quarterly increase over 7%. With the manufacturing and service
sector on an accelerated growth path, the economy may soon touch the coveted
10% growth figure.
There has also been an exceptional growth in commercial vehicle segment,
which has posted a growth of 36% in April-June of the current Financial Year. Improvement
in road infrastructure has led to increased movement of goods through roadways.
Around 65% of all the goods movement in the country takes place by roads as
opposed to 55% a decade ago. Hence, demand for Commercial Vehicles is expected
to grow by a steady rate in the long term. In the backdrop of the improvement
in road infrastructure, it is expected that the passenger vehicle segment
would grow at around 8% to 9% in the medium term, largely in line with
the GDP growth, and the commercial vehicles segment would grow by around 6%
CAGR in the next two to three years. The Company thus continues to remain
optimistic on its prospects from a long-term perspective.
YEAR IN RETROSPECT
The Company has earned a Profit Before Tax of Rs.2161.687 millions for
the year ended 31st March 2006 as against Rs. 778.689 millions of the earlier
year, registering an increase of 177.61% on year on year.
The Profit After Tax of Rs.1416.410 millions also is 187% more when
compared to the previous year. Income from Operations for the period under
consideration was Rs. 8984.334 millions and total expenditure was Rs.6924.996
millions.
The Company made a total disbursement of Rs. 36304.046 millions under
hire purchase, financial leasing and loan financing of commercial vehicles
during the year under review. As on 31st March 2006, while the stock on hire
(Net) under hire purchase agreements was Rs. 2731.438 millions, hypothecation
loan disbursement was at Rs. 46471.720 millions and assets given on financial
lease was Rs.3908.619 millions.
RESOURCES
The Company has during the year ended 31st March 2006, mobilized Rs.
114.162 millions under Short Term Loans; Rs. 42.253 millions under Working
Capital Demand Loans; Rs. 79.415 millions through Securitisation from Banks,
Corporates and Financial Institutions. The Company also mobilized Rs. 7286.406
millions through privately placed Secured Non-Convertible Debentures and Rs.
1325.159 millions under Subordinated Debts and Commercial Paper during the year
under review.
As on 31 "March 2006, there were 918 fixed deposits aggregating to
Rs. 13.869 millions that have matured but remain unclaimed. There were no
deposits, which were claimed but not paid by the Company. After rigorous
follow-ups with the depositors, the unclaimed deposit has been currently
reduced to 477 deposits amounting to Rs. 5.360 millions. Steps are being taken
continuously to obtain the depositors' instructions so as to ensure renewal/
repayment of the deposits in time.
AMALGAMATION OF SHRIRAM INVESTMENTS LIMITED (SIL) AND SHRIRAM OVERSEAS
FINANCE LIMITED (SOFL) INTO THE COMPANY
To enable the carrying on and conducting of business more efficiently
and advantageously with better economies of scale, more productive and optimum
utilization of various resources and also to position itself for raising
capital and other resources on more favorable terms, the Board of Directors at
their meeting held on 28*' July 2005 and on 8th March 2006 approved the
amalgamation of Shriram Investments Limited and Shriram Overseas Finance
Limited respectively into the Company. These Schemes were also approved by the
shareholders at the Court convened meetings held on 12th October 2005and31st
August 2006 respectively.
As per the Scheme of Amalgamation of SIL into the Company, as sanctioned
by the Hon'ble High Court of Judicature at
the Company for every one equity share held in the share capital of SIL
Accordingly, the Board at its meeting held on 23rd December 2005 allotted
60633350 equity shares to the shareholders of SILThese equity shares have since
been listed at the Bombay Stock Exchange Limited, National Stock Exchange of
India Limited, and the Madras Stock Exchange Limited, where the shares of the
company are listed.
As regards, the Scheme of Amalgamation of SOFL into the Company, the
share exchange ratio is three equity shares of the Company for every five
equity shares held in the share capital of SOFL The Hon'ble High Court of
Judicature at Madras by its Order dated 1st December 2006 has also sanctioned
this Scheme of Amalgamation with 1 "April 2005 as the Appointed Date.
The Allotment of Equity Shares by the Company to the shareholders of SOFL
will be carried out shortly in consultation with the Stock Exchanges, where the
Companies' equity shares are listed and thereafter, the shareholders of SOFL
will also be entitled for the dividend declared by the Company for the
Financial Year ended on 31 "March 2006.
Consequent to the aforesaid amalgamations, with effect from the
Appointed Date i.e., 1st April 2005, the whole of the undertaking of SIL and
SOFL, being the transferor Companies, comprising its business, all assets and
liabilities of whatsoever nature and wheresoever situated have without any
further act or deed been transferred to and vested in and / or be deemed to be
transferred to and vested in the Company, being the transferee Company as a
going concern so as to become as and from the Appointed Date the Undertaking of
the Company.
PREFERENTIAL ALLOTMENT
During the year under review, Newbridge India Investments II Limited
(Newbridge), a reputed international fund, has taken up a 49% stake in Shriram
Holdings (
The Share Subscription Agreement entered into by the Company with
Newbridge and as well as the aforesaid Preferential Allotment have triggered an
open offer as required under the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997and Shriram
Holdings (Madras) Private Limited. has since complied with the same.
Fixed Assets
v
Land - Freehold
v
Land - Leasehold
v
Buildings
v
Plant And Machinery
v
Furniture And Fixtures
v
Vehicles
Intangible Assets
v
Computer Software
Capital W.I.P.
On Lease
v
Plant And Machinery
v
Furniture And Fixtures
v
Vehicles
Incorporated on 30 Jun.'79,
Shriram Transport Finance Corporation (STFCL) was promoted by R Thyagarajan, A
V S Raja, and T Jayaraman. The promoters have interests in other companies
including Shriram Investments, Medispan, Shriram Chits, etc. Subject is Chaired
by G V Raman as Chairman and R V Sridhar as Managing Director. In Mar.'95, it
came out with a rights issue of 64.95 lac equity shares aggregating Rs 6.49 cr.
The issue was to augment long-term resources and working capital and to enhance
the leverage ability of the company.
Subject is pre-dominantly engaged in commercial truck financing. It also has
the unique distinction of having a vast fund base under the lease portfolio
management scheme under which several corporate entities including other
finance companies invest their funds. Some of the prominent corporates who have
invested in this scheme include the Industrial Development Bank of India (IDBI),
ITC Classic, Videocon, Nagarjuna Finance, etc.
Subject has recently shifted its headquarters from
Website Details :
Overview
Subject was established in 1979
to finance the much neglected Small Truck Owner. Shriram understood the power
of 'Aspiration' much before marketing based on 'Aspiration' became fashionable.
Subject started lending to the
Small Truck Owner to buy new trucks. But they found a mismatch between the
Aspiration and Ability. The Truck Operator was honest but the Equity at his
command was not sufficient to support the credit levels required to buy a new
truck.
They did not have the heart to send the Truck Operator back empty handed; they
decided to fund Pre-owned Trucks. This was the most momentous decision that
they made. What followed was sheer magic.
From Driver to Owner, even if only of a Pre-owned Truck and from Pre-owned
Truck to the New Truck, they have been with him in his journey of Prosperity as
he has been their partner in their road to success and leadership.
For them at subject, credit-worthiness of the Small Truck Owner has always been
an article of faith. This faith has guided their journey from their pioneering
days in financing Small Truck Owners to the present day leadership. Today they
are not only the leader in Truck Finance; they are also
Today, subject has a network of over 327 branches spread across the country; spanning
a geography which covers 91.3% of Truck Owners. Soon the coverage will be
extended to enable them to reach 100% of Truck Owners. Subject employs nearly
4000 people and has Assets Under Management (AUM) in excess of Rs. 10000
millions (US$ 2.2 billion), with a live contracts of more than 5,00,000
customers.
The inability of the economists to capture data relating to the economic
activity of the informal sector has resulted in its neglect at the
policy-making levels in the government.
The distribution of Truck Ownership being scattered among a large number of
individuals has resulted in this very important group being missed by the
institutional radar. It is estimated that 80% of trucks in the country are in
the hands of individuals.
Their journey has seen them making several innovations while they stood at the
very edge of Organized Finance. The Banks and Institutions were guided by the
Economists' vision; the Small Truck Owner who always fell on their blind side
was given the miss.
From the orthodoxy of the 1970s through 1990s, to the pragmatism of the new
millennium, Subject takes credit for having brought about a revolution in the
institutional mindset. Today, the Citigroup, UTI Bank, ICICI Bank and other
leading banking institutions are proud associates of Subject in financing
Pre-owned Trucks.
Subject helps meet customer needs end-to-end, in the
transportation lifecycle.
Their
product offerings to truck operators include:
v
New Truck Finance
v
Used Truck Finance
v
v
Power Finance
v
Franchisee Finance
v
Personal Loans
v
Co-Branded Credit Card
v
Freght Exchange / Bill Discounting
v
Trading
v
Truck Rentals
Press Release
Shriram
Plans to enter tractor and passenger vehicle financing
Business Standard - 3 May, 2007
Subject, which finances pre-owned trucks, plans to enter the
tractor and passenger vehicle financing across the country in the next few
months. The company is also looking to tie up with 100 small and medium
individual financiers in the next two years for loan generation.
The company has slowly begun testing the ground with financing tractors at
Andhra Pradesh where it has introduced a credit line of Rs 5,000 per annum for
a loan of Rs 0.15 million. The loans have been disbursed for those who want to
purchase pre-owned tractors, a market, the company claims is worth Rs 100000
million.
“About 20 per cent of tractors are used for transportation in the business of
agricultural commodities, bricks and others. With around 0.35 million tractors
sold every year and their success with pre-owned tractors at Andhra Pradesh,
they hope to emulate it across the country, said Umesh Revankar, Executive
Director, STFC.
Subject is also looking at passenger vehicle financing and has started offering
finance in Kerala and Karnataka. The company plans to start passenger vehicle
financing with buses which Revankar expects to be a Rs 5000 million revenue
market in the next two years.
In the financial year 2006-07, the company had tied-up with 200 small and
individual financiers in the south and west for around Rs 600-700 millions and
expects to procure close to Rs 1000 millions for the year 2007-08 through 100
financiers.
Recently, Subject had launched a co-branded credit card in association with the
UTI Bank for small road transport operators. The card enables operators to
withdraw cash from an ATM, buy fuel, tyres, oil and batteries. “Since its
launch they have received 5,000 applications for credit card of which 2,000
have been dispatched. They hope to give out 100,000 credit cards by March 2008,
said Revankar.
The card has a credit limit of Rs 15,000 and is valid for two to five years.
The company has also begun to market its pre-owned truck schemes aggressively
and has roped in actor Dharmendra as its brand ambassador
Shriram-UTI
Bank Launches Credit Card
14 Feburary, 2007
FINANCE
MINISTER SHRI P. CHIDAMBARAM LAUNCHES SHRIRAM – UTI BANK CO - BRANDED CREDIT
CARD EXCLUSIVELY FOR SMALL ROAD TRANSPORT OPERATORS (SRTOs)
First of its kind initiative undertaken by an NBFC to benefit 1,
00,000 truck owners
The Shriram - UTI Bank credit card, which is being launched on the VISA
platform, will be unique as this is the first time a credit card is being
offered to SRTOs in the country.
This co-branded credit card will be very useful to the SRTO in meeting his
day-to-day working capital requirements. By using this co-branded credit card,
the SRTO can withdraw cash from ATM, buy fuel, tyres, oil, batteries etc., in
addition to the usual benefits that are available with other cards.
Dr. P. J. Nayak, Chairman & Managing Director, UTI Bank, said “They are pleased
to be associated with this initiative as it gives the Bank an ideal opportunity
in the growing co-branded segment to provide value propositions across varied
customer profiles. Their co-branded cards offer value, safety and convenience
to customers.”
Commenting on the occasion, Mr. R. Thyagarajan, Chairman, Shriram Group, said,
“They have chosen to partner with UTI Bank to create a unique co-branded credit
card. This partnership will further strengthen the corporate relationship that
the Shriram Group has enjoyed with UTI Bank”.
Mr. R. Sridhar, Managing Director, Shriram Transport Finance Company Limited,
said “This initiative is another step in their effort to empower the SRTOs,
thus deepening their relationship with the customer”.
About UTI Bank
Set up in 1994, UTI Bank is one of the fastest growing private sector banks in
the country. The Bank offers a complete range of retail and corporate services,
including retail loans, corporate credit, forex services, investment banking,
depository services, and investment advisory services.
Presently the Bank has a nationwide network of more than 504 Branches and
Extension Counters along with over 2200 ATMs providing 24x7 banking convenience
to its customers.
About Subject
Subject, incorporated in the year 1979, is the largest asset financing NBFC in
the country enjoying leadership position in the Commercial Vehicle Financing
business. The company has more than Rs.100000 millionss assets under its
management with a network of 327 branches spread over the entire length and
breadth of the country. The company has equity participation from Citicorp, UTI
Bank, and reputed private equity funds like Chryscapital and Newbridge Capital.
STFC Quarterly Profit Surges
30 January, 2007
Tuesday, the 30th January 2007, Mumbai - The Board Meeting
of Subject, the largest asset financing NBFC in the country, was held today to
consider the un-audited financial results for the quarter ended 31st December
2006.
For the quarter ended 31st December 2006
The revenues of SUBJECT surged by 71.61% to Rs.3756.6 millions as against
Rs.2189.0 millions of the previous year. The profit after tax also rose by
71.34 % to Rs.575.7 millions as against Rs.336.0 millions recorded in the same
period earlier year.
For the nine months ended 31st December 2006
The revenues of SUBJECT surged by 52.12 % to Rs.99342 millions as against
Rs.65306 millions of the previous year. The profit after tax also rose by 39.12
% to Rs.14462 millions as against Rs.10395 millions recorded in the same period
earlier year.
Accounting for Securitisation Transactions
The Company recognizes income on account of securitisation over the tenor of
the agreements. The revenues and profit after tax would have been higher by
Rs.332.800 Millions and Rs.220.800 Millions respectively for the quarter ended
31st December 2006 and Rs.546.900 Millions and Rs.362.800 Millions respectively
for the nine months ended 31st December 2006, if the income from securitisation
transactions was recognized upfront.
AUM crosses Rs.1000000 millions
The Assets under management (AUM) crossed Rs.1000000 millions and stood at
Rs.1014274 millions as on 31st December 2006.
About Shriram Conglomerate
Shriram Conglomerate, established in the year 1974, is among the leading
corporate houses 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.40.90 |
|
|
1 |
Rs.81.29 |
|
Euro |
1 |
Rs.55.47 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
65 |
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 |
|