MIRA
INFORM REPORT
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Report Date : |
18.05.2007 |
IDENTIFICATION DETAILS
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Name : |
L AND T FINANCE LIMITED |
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Registered Office : |
Ballard Estate, Mumbai;400001, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
22.11.1994 |
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Com. Reg. No.: |
083147 |
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CIN No.: [Company
Identification No.] |
U65990MH1994PLC083147 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUML04806E |
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PAN No.: [Permanent
Account No.] |
AAACL1079R |
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Legal Form : |
A Closely held Public Limited Liability Company |
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Line of Business : |
Subject is a Non Banking Finance company Providing Leasing and hire
Purchase Services. |
RATING & COMMENTS
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MIRAs Rating : |
A |
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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 8600000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company and a part of Larsen
and Tourbo Group. The company is progressing well. Directors are reported as experienced
and respectable businessmen. Trade relations are reported as fair. Business
is active. Payments are usually correct and as per commitments. Fundamentals are strong and healthy. The company can be considered normal for business dealings at usual
trade terms and conditions. The company can be regarded as promising business partner in a medium
to long-run. |
LOCATIONS
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Registered Office : |
Ballard Estate, Mumbai;400001, |
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Corporate Office : |
L&T Finance Limited 3B, Bandra-Kurla Complex, Bandra (E), Mumbai -400 051. |
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Tel. No.: |
91-22- 5556 9800. |
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Fax No.: |
91-022- 5556 9898 |
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Accountant Office: |
"H" Wing, 1st Floor, Off Chandivali, Andheri (E), Mumbai - 400 072. |
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Tel. No.: |
91-22-2847 4400 |
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Fax No.: |
91-22 2847 0404 |
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Back Office: |
L&T Finance Limited 802, Swastik Chambers, 8 th Floor, Chembur, Mumbai -400 071 |
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Tel. No.: |
91-22- 5575 2700. |
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Fax No.: |
91-22-2527 2210 |
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Branches : |
Barbil AT/PO Bhadrasahi, Via Barbil, Dist. Keonjhar, Orissa 758 035. Mobile No. 094370 16162 Bhubaneshwar
Bidhan Nagar, Tel. No. 094340 34889 Fax. (0343) 253 6493 Guwahati Kolkata
Ahmedabad
Pune
Chennai
Madurai
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DIRECTORS
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Name : |
Mr. R. Shankar Raman |
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Designation : |
Director |
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Name : |
Mr. J.P.Nayak |
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Designation : |
Director |
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Name : |
Mr. Y M Deosthalee |
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Designation : |
Director |
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Name : |
Mr. N. Sivaraman |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. V C Raje |
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Designation : |
Vice President and Company Secretary |
BUSINESS DETAILS
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Line of Business : |
Subject is a Non Banking Finance company Providing Leasing and hire
Purchase Services. |
GENERAL INFORMATION
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Bankers : |
Not Available |
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Facilities : |
-- |
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Banking
Relations : |
Satisfactory |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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175000000 |
Equity Sahres |
Rs.10/- each |
Rs.1750.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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99191500 |
Equity Shares |
Rs.10/- each |
Rs.991.915
Million |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
991.900 |
866.900 |
866.900 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1159.100 |
472.700 |
330.400 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
2151.000 |
1339.600 |
1197.300 |
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LOAN FUNDS |
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1] Secured Loans |
5787.00 |
2772.200 |
3168.300 |
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2] Unsecured Loans |
5518.500 |
4420.700 |
1764.000 |
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TOTAL BORROWING |
11305.500 |
7192.900 |
4932.300 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
13456.500 |
8532.500 |
6129.600 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1995.800 |
1240.400 |
965.000 |
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Capital work-in-progress |
236.100 |
269.700 |
122.100 |
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INVESTMENT |
116.100 |
623.500 |
406.500 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Other Current Assets |
616.500
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527.600 |
977.400 |
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Loans & Advances |
11439.900
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6571.500 |
4247.900 |
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Total
Current Assets |
12056.400
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7099.100 |
5225.300 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
947.900
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700.200 |
589.300 |
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Provisions |
0.000
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0.000 |
0.000 |
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Total
Current Liabilities |
947.900
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700.200 |
589.300 |
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Net Current Assets |
11108.500
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6398.900 |
4636.000 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
13456.500 |
8532.500 |
6129.600 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover |
1447.400 |
1095.900 |
743.200 |
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Other Income |
67.100 |
4.500 |
59.400 |
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Total Income |
1214.500 |
1100.400 |
802.600 |
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Profit/(Loss) Before Tax |
427.000 |
260.300 |
143.200 |
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Provision for Taxation |
75.700 |
20.000 |
8.800 |
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Profit/(Loss) After Tax |
351.300 |
240.300 |
134.400 |
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Expenditures : |
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Administrative Expenses |
185.200 |
234.600 |
199.600 |
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Interest and Finance Charges |
708.100 |
471.00 |
372.000 |
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Depreciation & Amortization |
194.200 |
134.500 |
87.800 |
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Total Expenditure |
1087.500 |
840.100 |
659.400 |
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KEY RATIOS
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Debt-Equity
Ratio |
5.30 |
4.78 |
4.94 |
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Long
Term Debt-Equity Ratio |
2.37 |
2.78 |
3.59 |
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Current
Ratio |
1.61 |
1.94 |
2.83 |
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TURNOVER
RATIOS |
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Fixed
Assets |
0.78 |
0.85 |
0.95 |
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Inventory |
10.37 |
2.33 |
0.81 |
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Debtors |
8.28 |
10.71 |
15.48 |
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Interest
Cover Ratio |
1.60 |
1.55 |
1.38 |
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Operating
Profit Margin(%) |
87.77 |
78.68 |
75.13 |
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Profit
Before Interest And Tax Margin(%) |
74.95 |
66.46 |
64.19 |
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Cash
Profit Margin(%) |
36.02 |
34.06 |
27.69 |
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Adjusted
Net Profit Margin(%) |
23.20 |
21.84 |
16.75 |
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Return
On Capital Employed(%) |
10.32 |
9.98 |
8.92 |
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Return
On Net Worth(%) |
20.13 |
18.94 |
13.81 |
STOCK PRICES
|
Face Value |
Rs.10.00 |
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High |
Rs.0.00 |
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Low |
Rs.0.00 |
LOCAL AGENCY FURTHER INFORMATION
As Per Web Site:
Corporate Profile
History of L&T
Finannce
The company launched its business with a focus on corporate finance services to the medium sized enterprises. Traditional financing products such as equipment leasing, hire purchase and bill discounting were offered to business enterprises. However, over the years the focus has shifted to the requirements of blue chip clientele in form of vendor assistance, dealers financing, channel financing apart from leasing of machinery, vehicles and computer systems.
The groups business interest is majorly in the following:
Leasing (financial and operating)
Construction equipment financing
Receivables financing
Vendor financing
Sales-aid funding
IPO funding
Commercial vehicle financing
Financing Securitised receivables
LTF has launched TracFin Scheme for financing the authorised dealers of L&T John Deere Pvt. Ltd. and
Kisan Gaurav scheme for end use customers.
About Them:
The Comapny a Non Banking Finance Company was incorporated in November 1994 as a wholly owned subsidiary of Larsen & Tourbo Limited . The company was incorporated with a view to synergise with the opportunities provided by L&T. Through LTF, L&T aims at making a strong foray in the ever increasing financial
services sector.
Despite the turbulence in the financial services markets over the past few years, L&T Finance has adapted well to the changing market dynamics to remain consistently profitable. Like the rest of L&T enterprises, the company is professionally managed. The company has an asset base of Rs. 580 crores and an enviable client list comprising of the best of the corporate entities and construction majors in the country.
Given L&T's focus on the construction sector and its manufacturing base for construction equipment, L&T Finance has extended its financing services to the construction segment in a big way. The Group's deep knowledge of the construction equipment, its involvement in the construction activities and the constant interface with the contractors, big and small, have all provided L&T Finance the additional edge to compete profitably in this growing segment.
Keeping abreast of the dynamic economic scenario and with its focus on rediscovering the rural potential, the company has recently launched the TracFin scheme for channeling business between L&T John Deere Pvt. Ltd. and the authorised dealers of LTJD.
Branches
LTF with its head-office at Mumbai has an enviable network of over 16 branches spread over 16 cities across the country. LTF's expansion plans take into account the need to have a presence in all major industrial and commercial centres where its corporate customers are located as well as the need to build a strong retail customer base for the products its offers.
The company operates through 16 branches (including
Construction Equipment Financing
Nature and Purpose of
the division:
The Construction Equipment Financing Division offers various financial products such as Hire Purchase, Term Loan, Lease, and Bill Discounting to advance financial assistance to the contractors and sub contractors. The division was set up in Aug97, in order to leverage upon the opportunities provided by the construction equipment division of L&T. In the initial thrust, LTF began to fund the equipment manufactured by L&T, L&T Komatsu Ltd. and L&T Case Equipment Ltd. like Track mould excavators, Graders, Dozers, Vibratory compactors and Loader back-hoes. Today, LTF has become a key player in the equipment finance segment, after gaining sufficient experience and skill in the business and has also built a huge customer base.
Based on the experience for last 5 to 6 years in this segment, the division has
built skilled manpower, and knowledge base to handle any intricacies in
repossession of assets. Because of these skills developed over the years, LTF
is able to manage this segment efficiently. At present, the customer base of
this division is over 1100 including L&T related customer. Currently the
division operates through 13 branches namely,
The division is also considering exposures on Infrastructure Projects based on
various factors like viability of the project, cash flows arising from the
project, Government department awarding the tender, the construction company
involved in the execution of the contract etc.
Some of the other key drivers providing a thrust to this division are:
1.The road sector is expected to drive equipment demand for
over Rs.4000 crores
2.Mining sector would require new and sophisticated equipment with increasing
privatisation and performance linked payments becoming the norm.
3.The irrigation sector is also likely to fuel demand with the National River Grid expected to start work in FY06.
Retail Products
Financing
Nature and Purpose of
the division:
The Retail Products Division is the most recent Business Unit in L&T Finance Ltd. launched with its focus on rediscovering the rural potential basically the agricultural sector. Since the Government of India has classified farm mechanisation as a priority sector, a new division has been incorporated to explore this opportunity. The division mainly caters to the Tracfin Scheme (Channel Financing) for the authorised dealers of L&T John Deere Pvt. Ltd. & Kisan Gaurav - the end customer financing of L&T John Deere tractors.
TracFin Scheme
TracFin Scheme is a user friendly scheme devised by L&T
Finance Ltd. to provide short term working capital assistance to selected
authorised dealers of L&T John Deere Pvt. Ltd. to facilitate additional
sale of tractors.
The scheme was launched in August 2001 and has seen exponential growth since
then. As on
The terms of the scheme have been based on market conditions prevalent at
present. LTF shall review the scheme from time to time and revise, if
necessary, such terms and conditions as may be required. New innovative schemes
are being launched to augment the dealer use the market potential to the
fullest extent.
Kisan Gaurav
Kisan Gaurav is the retail finance scheme launched for the dealer of L&T John Deere Pvt. Ltd. registered under the TracFin scheme. This end customer-financing scheme was launched in November 2002 to give credit to the dealers in the easy recovery of the dues for the tractors sold by them.
The scheme has been launched in the state of
The salient features of the scheme are as follows:
1. A choice of financing plans ranging from 1 - 5 years for land mortgage cases and 1 - 3 years for cases without land mortgage.
2. Quick processing of the finance proposals. Applicant & guarantors have to fill up simple application form and provide certain minimum documents for scrutiny. Approval / rejection of a case is conveyed immediately (subject to field verification).
3. Three tier structure of financing plans i.e. Standard Plans, Special Plans & Festival Plans.
4. Kisan Gaurav Club Membership (Scheme to be announced).
5. Loyalty Plans (Scheme to be announced).
6. Prepayment Rebate/s (Scheme to be announced).
Corporate Products Financing
Nature and Purpose of
the division:
This division mainly caters to the financial requirements of the corporates through products like Term Loan, Hire Purchase Finance, Vendor Financing, Lease, Medical Equipment Financing and Receivable Discounting. The Department has recently ventured into offering new products like IPO Financing and Commercial Vehicles
Financing to
customers.
Some of the products being offered by L&T Finance Limited are as follows:
It is a contract in which a specific equipment required by
the lessee/ user is purchased by LTF/ lessor from a manufacturer/ vendor
selected by user. The lessee has possession and use of the asset on payment of
the specified rentals over a predetermined period of time. Thus LTF is a
nominal owner of the asset as the possession and economic use of the equipment
vests in the lessee. The lessee is free to choose the asset according to his
requirements and LTF does not take recourse to the equipment as long as the
rentals are regularly paid to him. LTF undertakes both financial lease and
operating lease
Financing against Equity and Equity Issues
This product aims at providing investors with an opportunity to apply for shares of companies that are offering a public issue of shares. LTF provides finance for the requirement of the investor with the investor having to put in only a margin of the total investment thus enabling the investor to apply for a larger number of shares with a given amount of available funds
Vendor Finance Scheme is a user-friendly scheme designed by L&T Finance Ltd to provide financial assistance against the invoices of L&T and group companies to the vendors of L&T and group companies
Commercial Vehicle Finance is offered both for new and used heavy and light commercial vehicles from Telco, Ashok Leyland, Mahindra & Mahindra, Eicher, Bajaj Tempo and other companies. This finance facility helps the operators to acquire vehicles with minimum hassle and documentation.
Hire Purchase Finance
Hire Purchase Finance is financial assistance provided by LTF to corporates who wish to buy machines/ assets. LTF finances a major portion of the capital investment with the buyer having to put in a margin amount. The amount is then repaid over a period of time through Equated Monthly Installments. LTF has lien over the asset till the last installment is paid
Medifin Scheme
Medifin Scheme is scheme designed by LTF to provide financial assistance to
purchasers of medical equipment from L&T distributors.
Receivables Discounting
Under this product offering, future receivables of huge corporates are financed thus assisting the customers to access ready available funds.
Term Loan
Term Loan is loan facility provided to the borrower usually against future receivables or against assets of the borrower. These assets are secured/ Hypothecated in favour of LTF. The repayment schedule is customized based on the borrowers requirements and the repayments are either monthly/ quarterly and in advance/ arrears
Inter-Corporate Deposits
ICDs are short term deposits with other companies as an investment of short tem funds. Usually transaction on account of ICDs are with post dated cheque for the principal and interest amount in addition to a Demand Promissory Note. The rate of interest is function of many factors like tenure of ICD, market rate, and volume. The interest & the principal is usually collected at the end of the tenure.
Loans Against Shares
Here, financial assistance is given against shares of approved shares majorly group A for a maximum period of 360 days, though generally for 180 days. Principal is collected at the end of the tenure of the loan with interest collections either front-ended or rear-ended. The securities selected have a margin of 40-100% over and above the loan amount. These margins are maintained at all times during the tenure of the loan.
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 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 Intl
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 companys 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.80.78 |
|
Euro |
1 |
Rs.55.18 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
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--MARGINS |
-5~5 |
|
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DEMERIT POINTS |
|
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--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
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--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
64 |
This score serves as a reference to assess SCs 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 |
|