MIRA
INFORM REPORT
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Report Date : |
22.05.2007 |
IDENTIFICATION DETAILS
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Name : |
SHARDA MOTOR INDUSTRIES LIMITED |
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Registered Office : |
D-188, Okhla Industries Area, Phase-1, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
29.01.1986 |
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Com. Reg. No.: |
023202 |
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CIN No.: [Company
Identification No.] |
L74899DL1986PLC023202 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELS03725B |
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Legal Form : |
A Closely Held Public Limited Liability Company |
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Line of Business : |
Manufacturing and Supply of Components to automotive and White Goods. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 2600000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having 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 at usual trade terms
and conditions. |
LOCATIONS
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Registered Office : |
D-188, Okhla Industries Area, Phase-1, |
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Tel. No.: |
91-11-26811957/58/26811967/68/26816195 |
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Fax No.: |
91-11-26811678 |
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E-Mail : |
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Website : |
http://www.shardamotor.com |
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Factory 1 : |
v Plot No.4, Sector 31, Kasna Industrial Area, Greater Noida, Uttar Pradesh Tel.No: 91-120-2341258/9 Fax No: 91-120-2341257 Email: smilkorin@shardamotor.com v Plot No. 558-559, Surajpur Bypass Industrial Area, Greater Noida, Uttar Pradesh v
Exhaust System Division: G-20, Irrungattukottai, Sriperumbudur – 602105, Tamilnadu Tel.No: 91-411-256092/95 Email: smilchennai@shardamotor.com v
Exhaust & Suspension Division: Plot No.
112, M.I.D.C. Satpur, Near Mahindra and Mahindra Plant, Nashik, Tel. No: 91-253-2364451/2364452/2364453 Email: smilnsk@shardamotor.com v Plot No. 276, Udyog Vihar, Phase – VI, Gurgaon, Haryana |
DIRECTORS
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Name : |
Mr. N D Relan |
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Designation : |
Chairman |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. Ajay Relan |
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Designation : |
Managing Director |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. Sharda Relan |
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Designation : |
Director |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. Rohit Relan |
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Designation : |
Director |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. R P Chowdhry |
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Designation : |
Director |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. R P Kapur |
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Designation : |
Director |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. S P Marwaha |
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Designation : |
Director |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. G L Tandon |
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Designation : |
Additional Director |
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Name : |
Mr. O P Khaitan |
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Designation : |
Additional Director |
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Name : |
Mr. Kishan N Parikh |
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Designation : |
Additional Director |
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Name : |
Mr. S C Chopra |
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Designation : |
Executive Director |
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Date of Birth/Age : |
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Date of Appointment : |
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Name : |
Mr. Udayan Banerjee |
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Designation : |
Executive Director |
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Date of Birth/Age : |
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Date of Appointment : |
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MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Indian Promoters |
2,405,738 |
80.92 |
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Private Corporate Bodies |
50,375 |
1.69 |
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Indian Public |
517,050 |
17.39 |
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Total |
2,973,163 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and Supply of Components to automotive and White Goods. |
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Products : |
v Exhaust Systems v Catalytic Converters (for four wheelers) v Independent Front Suspensions v Canopies v Seat Covers v Seat Frames (for four wheelers) v Assembly of Rear Automotive Suspensions v Powder Coated Pressed Parts v Plastic Flexible Hose Pipes |
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Imports : |
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Products : |
leather, accessories and other automotive components |
PRODUCTION STATUS
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Particulars |
Unit |
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Actual
Production |
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Soft Top and Canopies |
Pieces/Set |
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29,609 (19,147) |
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Seat Covers |
Pieces/Set |
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228,406 (204,652) |
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Exhaust System and Other Automotive Components |
Pieces |
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3,079,069 (1,443,234) |
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GENERAL INFORMATION
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Customers : |
v Tata Motors Limited v Samsung India Limited v Mahindra and Mahindra Limited v LG India Limited v Hyundai Motor Industries Limited v General Motors India v Bharat Seats Limited v Maruti Udyog Limited |
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No. of Employees : |
About 600 |
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Bankers : |
v Canara Bank v Citi Bank v Punjab National Bank v
Industrial Development Bank of The company has availed Term Loan from Industrial Development Bank of India (IDBI)) |
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Facilities : |
-- |
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Banking Relations
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Satisfactory |
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Auditors : |
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Name : |
v S R Dinodia and Company Chartered Accountants |
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Associates/Subsidiaries : |
v Relan Group Profile: It is a diversified, multi-product Rs. 5000 millions (approximately) group of Companies, with expertise in manufacturing and supply of components to automotive and White goods manufacturers. v Bharat Seats Limited (BSL) Profile: It is a joint venture between
Suzuki Motor Corporation and Maruti Udyog Limited for manufacturing and
supplying automotive Seat assemblies to the latter. The Company has benefited
as a joint venture between the very best in the field – Suzuki Motor
Corporation of v Relan Industrial Finance Limited (RIFL) Profile: It is engaged in Financing of Industrial Enterprises, Portfolio Management and Stock/Share broking. The Company is Member of National Stock Exchange, O.T.C.E.I. and Delhi Stock Exchange. n Sharda Enterprises n Sharda Pro-Acoustics |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
25000000 |
Equity Shares |
Rs.10/- each |
Rs.250.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
5946326 |
Equity Shares |
Rs.10/- each |
Rs.59.463
Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
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 |
59.500 |
29.700 |
29.732 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
592.800 |
483.900 |
364.576 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
652.300 |
513.600 |
394.308 |
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LOAN FUNDS |
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1] Secured Loans |
101.400 |
27.800 |
40.273 |
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2] Unsecured Loans |
2.800 |
37.500 |
0.000 |
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TOTAL BORROWING |
104.200 |
65.300 |
40.273 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
39.797 |
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TOTAL |
756.500 |
578.900 |
474.378 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
598.500 |
515.000 |
408.175 |
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Capital work-in-progress |
25.900 |
6.000 |
4.268 |
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INVESTMENT |
36.500 |
15.800 |
70.019 |
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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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Inventories |
220.600
|
221.000 |
107.947 |
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Sundry Debtors |
347.100
|
261.300 |
153.464 |
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Cash & Bank Balances |
5.600
|
18.400 |
32.357 |
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Other Current Assets |
0.000
|
0.000 |
2.743 |
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Loans & Advances |
293.900
|
187.300 |
100.952 |
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Total
Current Assets |
867.200
|
688.000 |
397.463 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
502.100
|
469.400 |
318.839 |
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Provisions |
273.200
|
181.500 |
93.123 |
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Total
Current Liabilities |
775.300
|
650.900 |
411.962 |
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Net Current Assets |
91.900
|
37.100 |
(14.499) |
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MISCELLANEOUS EXPENSES |
3.700 |
5.000 |
6.415 |
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TOTAL |
756.500 |
578.900 |
474.378 |
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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 |
2996.500 |
2375.900 |
1761.000 |
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Other Income |
8.400 |
7.000 |
9.600 |
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Stock adjustments |
17.900 |
1.400 |
(12.300) |
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Total Income |
3022.800 |
2384.300 |
1758.300 |
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Profit/(Loss) Before Tax |
256.300 |
239.200 |
201.500 |
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Provision for Taxation |
77.200 |
86.300 |
94.000 |
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Profit/(Loss) After Tax |
179.100 |
152.900 |
107.500 |
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Expenditures : |
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Raw
Materials |
1775.800
|
1299.200
|
935.300
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Excise
Duty |
508.300
|
412.100
|
292.100
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Power
& Fuel Cost |
31.700
|
26.300
|
17.700
|
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Other
Manufacturing Expenses |
104.500
|
97.000
|
77.600
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Employee
Cost |
84.900
|
68.300
|
68.600
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Selling
and Administration Expenses |
155.600
|
149.700
|
94.200
|
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Miscellaneous
Expenses |
24.800
|
26.200
|
13.900
|
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Total Expenditure |
2685.600 |
2078.800 |
1499.400 |
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KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity
Ratio |
0.15 |
0.12 |
0.19 |
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Long
Term Debt-Equity Ratio |
0.07 |
0.12 |
0.19 |
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Current
Ratio |
1.03 |
0.98 |
0.95 |
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TURNOVER
RATIOS |
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Fixed
Assets |
3.43 |
3.34 |
3.00 |
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Inventory |
13.57 |
14.44 |
17.36 |
|
Debtors |
9.85 |
11.46 |
10.33 |
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Interest
Cover Ratio |
41.05 |
45.30 |
30.20 |
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Operating
Profit Margin(%) |
11.25 |
12.86 |
14.70 |
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Profit
Before Interest And Tax Margin(%) |
8.77 |
10.30 |
11.83 |
|
Cash
Profit Margin(%) |
8.46 |
9.00 |
8.97 |
|
Adjusted
Net Profit Margin(%) |
5.98 |
6.44 |
6.10 |
|
Return
On Capital Employed(%) |
39.60 |
48.83 |
49.45 |
|
Return
On Net Worth(%) |
30.72 |
33.68 |
30.09 |
STOCK PRICES
|
Face Value |
Rs.10.00 |
|
High |
Rs.155.00 |
|
Low |
Rs.155.00 |
LOCAL AGENCY FURTHER INFORMATION
It is in trade terms with:
Sejong Industrial Company Limited,
press clippings
The Hindu,
The Hindu,
Chennai, June 21
Boston Acoustics, which announced its entry into the Indian market last week, has said it will focus on dealer training and direct marketing to gain a foothold here.
The Massachusetts-based company will market its range of
audio products for th home entertainment and automotive segments through Sharda
Motor Industries and Sebastian and Sons. While the latter will distribute
Boston Accoustics, which is listed on the Nasdaq, saw its
net sales for 2003-04 decreased by 26 percent to $52.6 million, from $70.6
million a year ago
INDUSTRY
STRUCTURE, DEVELOPMENTS AND OUTLOOK:
The automotive industry in
The year 2005-06 has been a landmark year for the Company as the Company has
achieved yet another milestone and the turnover of the Company touched an all
time high of Rs.3198.800 Millions as against Rs.2501.000 Millions for the
previous financial year registering an increase of 27.90% against an
expectation of 25%.
The Company's input costs remain a concern with global steel prices
having fluctuated abnormally over a past period. However the Company is hopeful
that the present Indian economic scenario is indicative of yet another year of
strong demand for automotive and white goods components. In such an economic
scenario, SMIL projects a further growth of 10% in its turnover for the next
financial year 2006-07. The Company has already taken steps for setting up a
tube mill project at Chennai and few other expansion programmes at Chennai and
Nashik.
OPPORTUNITIES & THREATS:
The generally satisfactory state of the economy and a positive economic outlook
for
For the Automotive Sector, regulatory norms are gradually being made more
stringent. While these measures are welcome, they may result in an increase in
manufacturing costs, which, in turn, may affect margins or demand in a price
sensitive situation. There is further a distinct possibility of stiff
competition from other multinational automotive parts manufacturing Companies
entering the Indian Market.
The Company is also gearing up to meeting the threat of the competition, by
aggressive pursuit of specific cost improvement aimed at protecting its
competitive prices. These measures would also enable the Company to partly
neutralize the increase in cost of inputs such as steel etc.
SEGMENT WISE / PRODUCT WISE PERFORMANCE:
Segment-wise performance has been reported under Note 11 of Schedule-12 forming
part of Annual Report for the year ended 31st March' 2006.
RISKS AND CONCERNS:
The Company is exposed to Business, Assets and financial risks as under:
Business risks are inherent in automobile industry due to economy's growth,
risks of technological obsolescence due to stricter emission/safety norms and
more intense competition. Other potential risks include disruption in
production due to acts of God and man-made. All these risks are continuously
addressed in the business plans-both long term as well as short term, risk
mitigation strategies are drawn up and acted upon. Besides, specific risk
covers are taken, wherever available, based on risk perceptions, past
experience, cost of cover, etc.
Assets risks include threat to physical assets through accidents, natural
calamities, obsolescence, etc. The Company has an internal system to assess
these risks, define the limits of exposure for operation and take appropriate
insurance cover.
Financial risks are inherent in foreign currency rate fluctuations on
account of import of materials, capital equipments, technology, etc. The Company
has a well-defined exposure management system to review its exchange exposure
and to take appropriate measures to mitigate the losses.
Stringent legislation on pollution and emission requirements will
increase production costs for the Automotive Sector. Holding the price line
could have an impact on the profitability. Price increase on the other hand
could impact volumes.
As Per Web Site:
Subject is an ISO
9002, QS 9000, TS 16949, ISO 14001 and OSHAS 18001 certified Tier–I
OEM (Original Equipment Manufacturer) for automobile and white good
industries with 7 manufacturing locations.
The Company manufactures Exhaust
Systems, Catalytic converters, Suspension systems, Sheet metal components
and plastic parts for the automotive and White Goods industries.
The company is in the process of expanding its manufacturing capabilities
and technology to become the Leader in Automotive Exhaust
Systems, Canopies, seat Covers and Independent Front Suspensions by 2010.
The Company is the sole Distribututor
and Service provider of High end Car Audio/Video Home Theatre products of
Nakamichi, Marantz,
About Them:
Relan Group is a diversified, multi-product group of Companies, with expertise
in manufacturing and supply of components to automotive and White Goods
Manufacturers. The group is also one of the pioneers in financial services.
Relan Group believes that their responsibility is to satisfy all their
customers and those who use their products and services by meeting their needs
promptly and accurately by maintaining the highest quality standards. There
must be equal opportunity for development, advancement and growth.
Relan Group has state of the art manufacturing facilities with continuous focus
on new product, innovation and technology upgradation.
Under the dynamic leadership and vision of Shri
N.D.Relan, the Chairman of the Group, Shri Rohit Relan, the Managing
Director Bharat Seats Ltd and Shri Ajay Relan, the Managing
Director of the Sharda Motor Industries Ltd and it's units, the RELAN GROUP,
with its successful track record and desire for excellence is today an
industrial force to reckon with in the Automotive Supplier Industry.
GROUP COMPANIES
Bharat Seats Limited (BSL) is a
Joint Venture between Suzuki Motor Corporation and Maruti Udyog
Limited for manufacturing and supplying automotive Seat assemblies to the
latter. The products include Automobile Seat assembly, Polyurethane Moulding of
Seat, Sheet Metal / Tube Frame Forming and Welding of Seat Frame / Tube Frame
Forming.
Relan Industrial Finance Limited (RIFL) is engaged in
Financing of Industrial Enterprises, Portfolio Management and Stock / Share
Broking . The Company is Member of National Stock Exchange , O.T.C.E.I and
Delhi Stock Exchange
Progressive Engineering
& Automation Private Limited (PEAPL) is incorporated with the object to manufacture,
import, export and deal in engineering goods including auto parts and
components.
Automotive Industry
Exhaust Systems
Catalytic Converters (for four wheelers)
Independent Front Suspensions
Canopies
Seat Covers
Seat Frames (for four wheelers)
Assembly of Rear
Automotive Suspensions
White Good Industry
Powder Coated Pressed Parts
Plastic Flexible Hose Pipes
Entertainment
Industry
Distribution, Marketing & Servicing of High end Car Audio/
Home Theatre Produdts Of NAKAMICHI, MARANTZ, MORDAUNT-SHORT, BOSTON ACOUSTICS
etc.
In order to acquire the latest know-how to establish the
quality requirements of all customers in Automobile and White Goods industry,
the company has entered in to a technical collaboration with the world's
renowned companies.
M/s Sejong
Industrial Company Limited,
They have developed SCORPIO Exhaust System jointly with M/s Mahindra & Mahindra Ltd.,
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.40.57 |
|
|
1 |
Rs.80.64 |
|
Euro |
1 |
Rs.54.57 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
|
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DEMERIT POINTS |
|
|
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
53 |
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 |
|