MIRA
INFORM REPORT
|
Report Date : |
12.11.2007 |
IDENTIFICATION
DETAILS
|
Name : |
APOLLO TYRES
LIMITED |
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Registered Office : |
6th
Floor, Cherupushpam Building, Shanmugham Road, Kochi – 682 031, Kerala |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
28.09.1972 |
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Com. Reg. No.: |
09-2449 |
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CIN No.: [Company
Identification No.] |
L25111KL1972PLC002449 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHNA01479C |
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PAN No.: [Permanent
Account No.] |
AAACA6990Q |
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Legal Form : |
A Public Limited
Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of Automobile
Tyres, Automobile Tubes, Automobile Flaps and Camel Black/Rethreading Materials. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 39153680 |
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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 company having fine track. Available information indicates high
financial responsibility of the company. Their trade relations are fair. Financial position is good. Payments are usually correct and as per
commitments. The company can
be considered good for normal for business dealings. It can be regarded as a
promising business partner in a medium to long-run. |
LOCATIONS
|
Registered
Office : |
6th
Floor, Cherupushpam Building, Shanmugham Road, Kochi – 682 031, Kerala, India
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Tel. No.: |
91-484-22381902 /
22381903 / 22381895 / 22381808 / 22381895 /22372767 / 22370780 |
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Fax No.: |
91-484-22370351 |
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E-Mail : |
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Website : |
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Corporate
Office : |
Apollo House, 7, Institutional
Area, Sector 32, Gurgaon - 122 001, Haryana |
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Tel. No.: |
91-124-6383002
(17 Lines) |
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Fax No.: |
91-124-6383017 /
3021 |
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E-Mail : |
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Factory : |
v Perambra, P.O. Chalakudy, Trichur – 680
689, Kerala v Limda, Taluka Waghodia, Dist. Vadodara –
391 760, Gujarat v
Ranjangaon,
Nagar Road, Taluka Shirur, District Pune – 419 209, Maharashtra |
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Branches : |
4th
Floor, 60 Skylark Building, Nehru Place, New Delhi – 110 019 |
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Tel. No.: |
91-11-2643 1005 |
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Fax No.: |
91-11-2647 1283 |
DIRECTORS
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Name : |
Mr. Onkar S.
Kanwar |
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Designation : |
Chairman &
Managing Director |
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Name : |
Mr. Jean Marc
Francois |
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Designation : |
Director
(Michelin Nominee Director) |
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Name : |
Mr. K. Jacob
Thomas |
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Designation : |
Director |
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Name : |
Mr. John Mathai |
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Designation : |
Director (Kerala
Government Nominee) |
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Name : |
Mr. M. R. B.
Punja |
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Designation : |
Director |
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Name : |
Mr. Neeraj Kanwar |
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Designation : |
Joint Managing
Director |
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Name : |
Mr. Nimesh N.
Kampani |
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Designation : |
Director |
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Name : |
Suman Sarkar |
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Designation : |
Chief (Strategy
& Business Operations & Whole Time Director) |
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Name : |
Mr. Raaja Kanwar |
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Designation : |
Director |
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Name : |
Mr. Robert
Steinmetz |
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Designation : |
Director |
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Name : |
Mr. Shardul S.
Shroff |
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Designation : |
Director |
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Name : |
Mr. K Jose Cyriac |
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Designation : |
Director (Kerala
Government Nominee) |
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Name : |
Mr. U. S. Oberoi |
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Designation : |
Chief (Project
& Corp. Affairs) & Whole Time Director |
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Name : |
Mr. Dr. S.
Narayan |
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Designation : |
Director |
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Name : |
Mr. P. N. Wahal |
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Designation : |
Company Secretary |
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Name: |
Mr. Onkar S. Kanwar |
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Designation: |
Chairman & Managing Director |
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Age: |
56 years |
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Qualification: |
B.Sc., Bachelor of Administration (California) |
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Experience: |
37 years |
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Date of
Joining: |
1st February, 1988 |
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Previous
Employment: |
BST Manufacturing Limited |
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Name: |
Mr. T. Balakrishna |
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Designation: |
Kerala Government Nominee |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.12.2006
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter & Promoter Group |
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Individual / HUF |
221032 |
0.48 |
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Cent. Govt / State Govt |
0 |
0.00 |
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Bodies Corporate |
14827133 |
31.95 |
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Financial Inst. / Banks |
0 |
0.00 |
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Any Other (Specify) |
0 |
0.00 |
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Sub Total (A) (1) |
15048165 |
32.43 |
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Foreign |
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Individuals (NRI / Foreigners) |
0 |
0.00 |
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Bodies Corporate |
0 |
0.00 |
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Institutions |
0 |
0.00 |
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Any Other (Specify) |
0 |
0.00 |
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Sub Total (A) (2) |
0 |
0.00 |
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Total shareholding of |
15048165 |
32.43 |
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Public Shareholding |
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Institutions |
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Mutual Funds / UTI |
11719864 |
25.26 |
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Financial Inst. / Banks |
32900 |
0.07 |
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Cent. Govt / State Govt |
1000150 |
2.16 |
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Venture Capital Funds |
0 |
0.00 |
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Insurance Companies |
1079198 |
2.33 |
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Foreign Institutional Investors |
5829265 |
12.56 |
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Foreign Venture Capital Investors |
0 |
0.00 |
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Any Other (Specify) |
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Sub Tota (B) (1) |
19661377 |
42.37 |
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Non-Institutions |
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Bodies Corporate |
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Indian Bodies Corporate |
1683757 |
3.63 |
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Individulas - |
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(i) Individual shareholders |
3802007 |
8.19 |
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(ii) Individual shareholders |
233205 |
0.50 |
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Any Other (Specify) |
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Foreign Bodies Corporate |
5713750 |
12.31 |
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NRIs |
260216 |
0.56 |
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Sub Total (B) (2) |
11692935 |
25.20 |
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Total Public shareholding |
31354312 |
67.57 |
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Total (A) + (B) |
46402477 |
100.00 |
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Shares held by Custodians & against which
Depository Receipts have been issued |
0 |
0.00 |
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GRAND TOTAL (A)+(B)+(C) |
46402477 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Automobile
Tyres, Automobile Tubes, Automobile Flaps and Camel Black/Rethreading
Materials. |
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Products : |
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Exports to : |
Middle East,
Pakistan, Africa & South East Asia |
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Imports from : |
Germany,
Singapore and U.K. |
PRODUCTION STATUS
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Particulars |
Unit |
Installed Capacity |
Actual Production |
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Automobile Tyres |
Nos. |
7934272 |
7029973 |
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Automobile Tubes |
Nos. |
6522560 |
6177585 |
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Automobile Flaps |
Nos. |
-- |
3188527 |
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Alloy Wheels |
Nos. |
-- |
3528 |
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Camel Black/Retreading Materials |
MT |
3000 |
-- |
GENERAL
INFORMATION
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No. of Employees : |
5257 |
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Bankers : |
v State Bank of India, Kochi, Kerala v Bank of India, Kochi, Kerala v Punjab National Bank, Kochi, Kerala v State Bank of Mysore, Kochi, Kerala v State Bank of Patiala, Kochi, Kerala v State Bank of Travancore, Kochi, Kerala v ICICI Bank Limited, Kochi, Kerala v Union Bank of India, Kochi, Kerala v The Federal Bank Limited, Kochi, Kerala v Canara Bank, Kochi, Kerala v IDBI Bank, Kochi, Kerala v
Standard
Chartered Grindlays Bank v
Citi Bank |
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Facilities : |
NOTES: SECURED
LOANS 1. 10,00,000
-11.25% Non Convertible Debentures of Rs. 100 each issued at par and allotted
on 26th
June,
2002 are redeemable in three equal annual instalments at the end of 3rd, 4th and 5th year from the
date of allotment of debentures. The first instalment of Rs. 33.3 Millions
was paid during the current year. The above debentures and interest payable
thereon are secured by a par! passu first charge on the Company's land and
premises at Chalakudy, Kerala State and at village Limda, Gujarat State
together with the Factory Buildings, Plant & Machinery and Equipments,
both present and future. 2. Loan from
International Finance Corporation is secured by : - A pari passu
first charge along with other lenders on the Company's land at Chalakudy,
Kerala State and at village Limda, Gujarat State together with the Factory
Buildings, Plant & Machinery and Equipments, both present and future. - Afirst and
fixed charge on the Company's land and premises situated at Gurgaon, Haryana
State together with all existing and future buildings, erections and
structures. - A pari passu
first charge on all the moveable assets except current assets of the Company. - A second charge
on all the current assets of the Company. 3. External
Commercial Borrowing from ICICI Bank Limited, Singapore is secured by: - A pari passu
first charge along with other lenders on the Company's land at Chalakudy,
Kerala State and at village Limda, Gujarat State together with the Factory
Buildings, Plant & Machinery and Equipments both present and future. - A pari passu
first charge on all the moveble assets except current assets at Chalakudy,
Kerala State and at village Limda, Gujarat State. 4. Loan from
State Bank of India is secured by : - A pari passu
first charge along with other lenders on the Company's land at Chalakudy,
Kerala State and at village Limda, Gujarat State together with the Factory
Buildings, Plant & Machinery and Equipments, both present and future. - A second charge
on all the current assets of the Company. 5. Loan from GE
Capital Services India is secured by : - A pari passu first
charge along with other lenders on the Company's land at Chalakudy, Kerala
State and at village Limda, Gujarat State together with the Factory
Buildings, Plant & Machinery and Equipments, both present and future. - A pari passu
first charge on all the moveable assets except current assets at Chalakudy,
Kerala State and at village Limda, Gujarat State. 6. Cash Credits
and Guarantees from Banks are secured by Hypothecation of Raw materials,
Work-in-Process, Stocks, Stores and Book Debts
ranking in priority to the charge created in respect of the IFC Loan and also
by second charge on the Company's land at Chalakudy, Kerala State, at village
Limda, Gujarat State and on part of the Land at Ranjangaon in the State of
Maharashtra together with the Factory Buildings, Plant & Machinery and
Equipments, both present and future. 7. The Company
had availed interest free Sales Tax Loan from Gujarat State Government
amounting to Rs. 112.6 Millions as on 31st March, 2006. These
loans are secured by a pari passu charge on the entire fixed assets of the
Company, both present and future situated at village Limda in Gujarat State. The
said loan is repayable in six equal annual installments on the expiry of 14
years from the commencement of commercial production i.e. 31st May, 2006. 8. Loans, other than debentures, include Rs. 846.0 Millions (Rs.333.9
Millions) repayable within one year. 9. Deferred payment credit is secured by specific assets purchased
under the scheme and include Rs.14.080 Millions repayable within one year. |
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Banking Relations : |
Satisfactory |
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Auditors : |
Fraser & Ross Chartered
Accountants |
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Associates : |
v Dusk Valley Technologies Limited v Travel Tracks Private Limited v Apollo International Limited v Dusk Valley Global Services (Private)
Limited v Raunaq Finance Limited v Apollo Tubes Limited v Bharat Gears Limited v
Gujarat
Perstorp Electronics Limited v
Encrop E
Services Limited v
Gujarat
Perstorp Electronics Limited (under liquidation) v
Landmark
Farms & Housing (P) Limited v
Sunlife
Tradelinks (P) Limited |
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Subsidiaries: |
v Premier Tyres Limited v Apollo Automotive Tyres Limited v Apollo Radial Tyres Limited v Apollo (Mauritius) Holding Private Limited v Apollo (South Africa) Holding Private Limited |
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Membership : |
Confederation of Indian Industry |
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Joint Venture
Company: |
Michelin Apollo Tyres Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
730000000 |
Equity Shares |
Rs10/- Each |
Rs.730.000 millions |
|
20000000 |
Preference Shares |
Rs.100/- Each |
Rs.20.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
464024770 |
Equity Shares |
Rs10/- Each |
Rs.464.024
Millions |
|
|
Add Forfeited Shares |
|
Rs.0.070
Million |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
464.090 |
383.400 |
383.400 |
|
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2] Equity Share Warrant |
117.200 |
0.000 |
0.000 |
|
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3] Reserves & Surplus |
9207.130 |
5956.800 |
5384.000 |
|
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
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NETWORTH |
9788.420 |
6340.200 |
5767.400 |
|
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LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
4737.630 |
3810.000 |
3487.500 |
|
|
2] Unsecured Loans |
1449.400 |
3690.000 |
1950.600 |
|
|
TOTAL BORROWING |
6187.030 |
7500.000 |
5438.100 |
|
|
DEFERRED TAX LIABILITIES |
1290.570 |
1052.100 |
1033.500 |
|
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|
|
|
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|
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TOTAL |
17266.020 |
14892.300 |
12239.000 |
|
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APPLICATION OF FUNDS |
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|
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FIXED ASSETS [Net Block] |
9508.550 |
8406.700 |
7501.300 |
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Capital work-in-progress |
804.550 |
779.300 |
843.300 |
|
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INVESTMENT |
2581.140 |
5.300 |
544.800 |
|
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DEFERREX TAX ASSETS |
|
|
|
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
4519.490 |
4194.100 |
3301.200 |
|
|
Sundry Debtors |
2030.550 |
1751.400 |
1565.200 |
|
|
Cash & Bank Balances |
1720.020 |
2313.600 |
1104.300 |
|
|
Other Current Assets |
139.140 |
2.100 |
00.200 |
|
|
Loans & Advances |
1937.100
|
1843.900 |
1464.600 |
|
Total
Current Assets |
10346.300
|
10105.100 |
7435.500 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
5422.010
|
4157.200 |
3801.400 |
|
|
Provisions |
553.750
|
249.500 |
288.300 |
|
Total
Current Liabilities |
5975.760
|
4406.700 |
4089.700 |
|
|
Net Current Assets |
4370.540
|
5698.400 |
3345.800 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
1.240 |
2.600 |
3.800 |
|
|
|
|
|
|
|
|
TOTAL |
17266.020 |
14892.300 |
12239.000 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
32923.280 |
26255.200 |
22453.000 |
|
|
Other Income |
29.710 |
11.820 |
0.000 |
|
|
Total Income |
32952.990 |
26267.020 |
22453.000 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
1854.190 |
1005.700 |
849.100 |
|
|
Provision for Taxation |
719.970 |
282.000 |
172.800 |
|
|
Profit/(Loss) After Tax |
1134.220 |
723.700 |
676.300 |
|
|
|
|
|
|
|
|
Export Value |
416.950 |
8.830 |
22.000 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
8007.610 |
4530.800 |
|
|
|
Stores & Spares |
37.070 |
24.750 |
4647.500 |
|
|
Capital Goods |
1067.530 |
422.320 |
|
|
|
Finished Good |
25.090 |
5.550 |
|
|
Total Imports |
9137.300 |
4983.420 |
4647.500 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
30143.670 |
24795.810 |
|
|
|
Increase/(Decrease) in Finished Goods |
(313.610) |
(768.010) |
22634.500 |
|
|
Interest |
526.480 |
505.620 |
|
|
Total Expenditure |
30356.540 |
24533.420 |
22634.500 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
8741.500 |
8443.100 |
|
Other Income |
|
57.700 |
34.900 |
|
Total Income |
|
8799.200 |
8478.000 |
|
Total Expenditure |
|
7737.100 |
7362.300 |
|
Operating Profit |
|
1062.100 |
1115.700 |
|
Interest |
|
147.000 |
139.700 |
|
Gross Profit |
|
915.100 |
976.000 |
|
Depreciation |
|
206.900 |
200.600 |
|
Tax |
|
203.800 |
248.000 |
|
Reported PAT |
|
467.600 |
511.100 |
|
|
|
|
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.86 |
1.07 |
0.84 |
|
Long Term Debt Equity Ratio |
0.36 |
0.47 |
0.42 |
|
Current Ratio |
0.99 |
0.98 |
0.98 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Asset Ratio |
2.70 |
2.45 |
2.51 |
|
Inventory |
8.66 |
8.01 |
8.96 |
|
Debtors |
19.96 |
18.10 |
21.75 |
|
Interest Cover Ratio |
3.48 |
2.84 |
2.37 |
|
Operating Profit Margin (%) |
8.86 |
7.89 |
6.44 |
|
Profit Before Interest and Tax Margin (%) |
6.89 |
5.47 |
4.30 |
|
Cash Profit Margin (%) |
4.97 |
5.03 |
4.12 |
|
Adjusted Net Profit Margin (%) |
3.01 |
2.60 |
1.98 |
|
Return on Capital Employed (%) |
17.56 |
13.14 |
10.85 |
|
Return on Net Worth (%) |
14.22 |
12.99 |
9.20 |
LOCAL AGENCY
FURTHER INFORMATION
The company has
been accredited with ISO 9001 Certification.
History
The company commenced
its commercial production in 1977.
Subject
is the flagship company of the Raunaq Singh Group. Mahindra and Mahindra and
TAFC are its major OEM clients. The Company has an MoU with United Tyres, a
Canada based giant, for a 50% buy-back agreement and a joint venture agreement
with Continental, Germany, for passenger car radial tyre factory at Pune.
It was the first to
receive the ISO 9001 accreditation in the Indian Tyre Industry for its entire
range of brands. ATL took over Premier Tyres in April, 1995 in which its sick
Stallions Tyres came under the Apollo Brand name.
In 1999-2000, the
projects of radial passenger capacity of 2000 tyres per day at Vadodara plant
and 50000 two/three wheeler tyres at conversion unit had been successfully
implemented. This has resulted in improving market shares in the respective
segment.
It was the first to
receive the ISO 9001 accreditation in the Indian Tyre Industry had been
successfully implemented, this has resulted in improving market shares in the
respective segment.
It has invested Rs.
2300.000 millions in Kerala at its’ Perambra plant and the expansion programme
is being implemented in a progressive manner. The company would invest Rs.
1500.000 millions for the manufacture of radial tyres at Vadodara and the
project activities is in full swing. The first of the Truck radial Tyres was
set to roll out by April, 2004.
During the year
2002-03 the capacity of the Perambra plant was increased from 147 tons to 200
tons per day. The expansion programme was completed in March, 2003. As of May
2003 the Share Capital of the company stands reduced to 326.300 millions due to
buy back of 3.690 millions shares @ Rs. 90/- per share. The expansion programme
for its subsidiary company which is under lease with company viz Premier Tyres
Limited is being implemented in progressive manner. After the expansion
programme the capacity would be enhanced from 58 tons per day to 78 tons per
day.
FIXED
ASSETS
v
Land
v
Leasehold Land
v
Buildings
v
Water Supply
Installation
v
Plant & Machinery,
Electrical Installation
v
Furniture
& Fixture, Office Equipments
v
Vehicles
MARKET OVERVIEW:
The performance
of the tyre industry in India, was earlier inextricably linked to the fortunes
of the Indian automobile industry. The Automotive industry in turn depended on
the infrastructure sectors and the growth of the economy. Not anymore.
Globalisation has blurred boundaries. However to add gleam to the shine, the
Indian Auto Industry as also the Indian economy is also on a roll with a rapid
scaling up of manufacturing capacity and infrastructure projects thus leading
to a higher demand for mobility and hence a greater need for Tyres.
Today, the Indian tyre market is estimated to be a Rs.145000.000 millions
industry. Although it faces huge competition, price & cost pressures and
high entry barriers, the changing dynamics with the growing economy and the
scale up by the auto industry, provides a fillip to the industry. The
automotive sales have grown rapidly over the last five years, and have kept
both the OEM and replacement demand buoyant
.With new
roads, new vehicles and new destinations being charted out every day the
projections for the industry look buoyant. This trend would gain more momentum
once projects like the Golden Quadrilateral and NSEW Corridor project get
implemented. There exists a vast potential both by view of the replacement
demand as well as the requirement by new vehicles. India is being seen as a
sourcing hub for worldwide sales by the auto industry which makes it the icing
on the cake.
Further, the
tyre markets in South Africa have remained highly competitive in the 15 month
period (ending 31 March 2007) with the domestic market witnessing a progressive
move from manufacturer owned distribution to independent dealers. The local market
has proven less resistant to price increases as the currency has weakened
progressively benefiting performance in the last 6 months.
The South
African export market continues to provide opportunities and the company
continues its focus on growing its existing niche ultra-high performance
markets of Europe and new markets in Australia. Increase in the import demand
(particularly from the Far East) has enabled Dunlop to grow its DAD base,
resulting in market share growth relative to domestic manufacturers.
Dunlop
Africa Marketing UK, continues to play an important role in servicing the raw
material and engineering requirements of Dunlop Nigeria.
This follows
the management and installation of the truck radial project in Lagos in the
prior year.
The tyre
industry is highly raw material intensive with raw material costs accounting
for over 70% of the cost of production. High oil prices, changing duty
structures etc. will always remain a matter of concern but ensuring flexibility
in manufacturing, an eye on costs and high product quality can offset many of
the pressures faced in the marketplace.
INDUSTRY STRUCTURE AND DEVELOPMENTS:
Indian tyre
industry is worth US$3.2 billion and it comprises of over forty players in the
organised and unorganised sectors. Growth trends indicate that the Indian tyre
industry has grown at a CAGR of 11% in terms of volume in last 5 years
(2002-06). Currently, the industry is concentrated and the top four companies
control 78% of the total revenue. The commercial vehicle tyres (Truck & Bus
and LCV) segment account for bulk of the sales at 70% of the industry revenues.
Unlike the
global market where passenger car tyres dominate, in India a majority of the
turnover is contributed by commercial vehicle tyre segment.
Though the passenger
car segment is growing faster than other tyre segments (CAGR 16%), a drastic
shift towards a global structure is not expected in the next 3-5 years. Keeping
in lieu the CY 2005 reports, several Indian tyre majors feature amongst top 25
in the global market, namely MRF (ranked 15th) and Apollo Tyres (ranked 18th),
but after consolidating Dunlop's revenue, Apollo ranks 15 and MRF 16.
In the present
scenario, the Indian tyre industry is two tiered. The Tier-I players account
for around 85% of the industry's turnover with a well diversified product-mix
and presence in all three major segments of the replacement market, original
equipment manufacturers (OEMs) and exports.
Tier-II
companies are smaller in size, with a focus only on one or two categories of
tyres, plus tubes and flaps primarily for the replacement market. The demand
and growth for the industry depends on primary factors like the overall GDP
growth, agricultural & industrial production, growth in vehicle demand and
secondary factors like infrastructure development, prevailing interest rates
and financing options. The commercial vehicle tyres market is the largest
segment of the industry accounting for approximately 70% of industry turnover
in terms of value - a segment in which Apollo Tyres has maintained its
leadership position amongst the industry players for the past decade. Steep
rise in raw material prices, particularly natural rubber, impacted the profit
margins of all the players. This was the fourth consecutive year of raw
material cost-push, both for natural rubber which increased by approximately
24% as compared to 2005-06 and crude oil-linked raw material basket,
particularly carbon black. Consistent rise in major raw materials costs
(natural rubber, carbon black, synthetic rubber) have resulted in pressure on
the margins of the tyre companies despite good topline growth. However the
ability to pass on the increased cost to customers to some extent, facilitated
by the tight demand-supply situation has resulted in margin improvement for the
industry in the second half of the year. The year ahead looks tough with no
significant respite in raw material prices. The cost-push continues and
profitability would depend on the ability of the players to take large price
increases. The story on the demand front though looks good in the medium term
with the economy continuing to do well.
RADIALISATION:
Radialisation was an important innovation made in tyre technology in the 1950s.
It has several advantages like additional mileage, fuel saving and improved
driving especially at higher speeds. If we look at the Indian context,
radialisation has not penetrated in the Indian tyre industry except in the
passenger car tyres segment. Poor road conditions, practice of overloading and
unwillingness on the part of consumers to upfront pay higher prices for radial
tyres can be attributed as reasons for extremely low penetration in the
commercial vehicle tyre segment.
A further introspection might lead to the fact that radial tyres cost - 40%
more than cross-ply tyres and the world average for truck & bus tyre
radialisation is 65% while in India it was only 2% till FY 06. Also, OEMs have
not pushed for radialisation of commercial vehicle tyres as radial tyres would
mean driving the initial cost of ownership up. However, with the thrust on
infrastructural development, the radialisation levels in the commercial vehicle
segment in India is expected to go upto 10% in FY 2010 - the estimated
radialisation levels in FY 07 is 4%.
CULTURAL INTEGRATION:
Respect for people who contribute to the success of 'Brand Apollo' is a cornerstone of their existence. Be it their own employees, customers who buy their products, their shareholders or their technical collaborators, we as a philosophy make sure that every voice has a platform.
To maximise the potential of the diverse work-force and to
maintain focus, the Employment Equity Programme at Dunlop has been deployed to
integrate the performance objectives of supervisors and managers for
2007.
Diversity workshops for all staff has had a positive impact on culture.
The seamless integration of professional management staff from Apollo's Indian
operations clearly suggests that there is growing cultural tolerance and an
increased understanding and insight into the value of diversity.
SOUTH AFRICA MARKET HIGHLIGHTS:
* Decline of Company owned distribution.
* Emergence of Independent distribution channels.
* 212 DAD's (Dunlop Accredited Dealer).
* Growth estimated in current financial year - +22stores
* Growth of Independents - +80 Nos Strategic plan for IInd tier distribution channel.
* Direct accounts - Commercial segment (Truck and Mining segment) 200 Dealers for the Rugby World Cup in France and Mauritius (Reward for the annual scheme).
* Market research survey
highlighting Dunlop as the best in terms of providing timely deliveries to the
dealers among all present competitors in SA market.
* Only local company to manufacture 17' and 18' tyres in SA.
* Only local
company to manufacture 'Super Singles' for Trucks.
* 23% Market share in PCR - Aftermarket.
* 22% Market share in Truck - Aftermarket.
* 22% Market share in OTR - Aftermarket
ATL Locations:
Pakistan, Philippines, Bangladesh, Cambodia, Singapore, Taiwan, Sri
Lanka, Myanmar, Hong Kong, Kenya, Iran, Zambia, Oman, Qatar, Mozambique,
Somalia, Iraq, Jordan, Ghana, Rwanda, Lebanon, Burundi, Nigeria, Syria,
Lithuania, Greece, Turkey, Ireland, Netherlands, Bulgaria, Portugal,
Turkmenistan, UK, Brazil, Peru, Honduras, Eucador, Guatemala, Nicaragua,
Uruguay, Chile, Columbia, Haiti, El Salvador, Cuba, Panama, Venezuela.
DTL Locations:
Holland, UK (Bristol, Telford),
Singapore, Australia, New Zealand, Sri Lanka, Pakistan, China, Turkey, UAE,
Lebanon, Iran, Oman, Kuwait, Qatar, Kenya, Uganda, Tanzania, Ethiopia, Eritrea,
Malawi, Zambia, Mozambique, Seychelles, Mauritius, Madagascar, Burundi, Ivory
Coast, Ghana, Guinea, Nigeria, Senegal, Gambia, Sierra Leone, Liberia, Mali,
Angola, Libya, Egypt, Sudan, Morocco, Puerto Rico, Chile.
BUSINESS PARTNERSHIPS:
Their relationships with the key
automakers have both expanded as well as improved over the year. We have added
General Motors India to their list of customers. All the major automakers in
India now actively look at Apollo Tyres Ltd. as a partner in their jtheirneys.
The last financial year has been a watershed year in ATL's march towards being
a significant global player.
The year 2006
witnessed many a milestones being created starting with Apollo Tyres strategic
acquisition of Dunlop South Africa and becoming the first Indian tyre company
to have a transnational footprint. A very important milestone was the
initiation of direct exports by Apollo tyres to its International customers
across Africa, Middle East, South America, Asia Pacific and Europe. With over a
hundred thousand passenger car tyres exported in 06-07, Apollo Tyres retains
its position as the country's highest exporter of passenger car tyres. A major
fillip to ATL exports has been achieved last year, by breaking into the most
sophisticated market of the world - Europe, with ATL's quality brands.
European
market will be the strategic focus for the high quality premium brands of
Apollo passenger car radials. Passenger car tyres sales would be the driver in
Exports sales growth and would be supported suitably by Truck Bus Radials being
planned for launch in this year. Last year, ATL also launched a slew of new
patterns in high performance and ultra high performance passenger car radial
segment with Acelere Sportz and Aspire.
Critical
emphasis has also been placed on enhancing the brand 'Apollo' in the overseas
markets through marketing initiatives like the Winning Edge and Apollo Vista,
to result in committed business growth from the network partners.
DISTRIBUTION NETWORK:
Aiming to make
the most of ongoing growth in the promising world tyre market, Apollo Tyres is
expanding its operations by fortifying local production capacity, product line
ups and depth into the market. With over 120 sales & service stock points,
5 zonal offices, 18 state offices and 11 redistribution centres, Apollo Tyres
is poised to penetrate its presence to the farthest corners of the country. A
4,032 strong dealership network along with 2138 Apollo Tyre Worlds, 194 Apollo
Radial Worlds and 61 Apollo Pragati Kendras, ensures that Apollo Tyres is never
very far from its consumers.
The over 3000 exclusive Apollo Tyre World and Apollo Tyre Radial outlets have
initiated a quick response mechanism by enabling prompt product delivery and
after sales service to customers throughout the country.
Carrying
forward a similar spirit are the Apollo Pragati Kendras. This initiative not
only provides the latest farm technologies to their customers through their
tie-up with domain specialists in this area but also helps their customers to
choose the best suited products for their applications.
On the global
forefront, Apollo Tyres has firmly grounded its feet in South Africa by
integrating Dunlop's operations.
The manufacturing facilities at Durban, Ladysmith and Zimbabwe have
helped Apollo Tyres in consolidating its position in the highly competitive
tyre market. With 5 sales, service & branch offices, 9 regional offices and
3 distribution centres at Ladysmith, Durban and Jetpark (Johannesburg) the
company is all set to meet the demands of a plethora of its international
clients. In the current scenario, its total dealer count stands at 936 out of
which 193 are Dunlop accredited dealers - making it perhaps the only company to
have a chain of independent Dealers (DADs), retaining the flavour of
entrepreneurship.
OPERATIONS:
During the financial year ended March 31, 2007, sales from
operations recorded Rs 37743.43 million as against Rs 30021.19 million during
the previous year, registering a growth of 25.72%.
Operating profit, before interest and depreciation, amounted to
Rs.3122.93 million as against Rs.2239.22 million during the previous year. Net
profit, after providing for interest, depreciation and tax amounted to
Rs.1134.22 million as against Rs.781.69 million during the previous year,
recording a growth of 45.10%.
The Company has achieved remarkable growth in its operations supported by a
motivated management team, aggressive marketing initiatives, better operating
and financial efficiencies. A sharp focus on profitability and fiscal
discipline in payment terms has resulted in significant financial gains. Cost
management and better production efficiencies have helped in maintaining a
profitable track record, despite a sharp increase in input costs, which we were
able to pass to some extent to the customer.
PRODUCTION:
During the year 2006-07,
Company has achieved 6.9% growth in production tonnage by registering
production of 269,000 MT as against 252,000 MT in the previous year. All expansion
programmes were implemented successfully as envisaged, by increasing total
capacity across all plants to 736 MT/day from 704 MT/day.
RAW MATERIALS:
The year under review witnessed steep raw material price
increases which included natural rubber, synthetic rubber and carbon black.
Natural rubber prices touched an all-time peak in the international markets in
2006-07 due to weather disruptions in Thailand and Malaysia and insurgent
activities in the rubber producing regions in Southern Thailand. Increased
investor interest in commodities has also contributed to higher natural rubber
prices during the year under review. Driven by international prices, in India
too, natural rubber prices touched a high during this period. The inverted duty
structure in their industry continues, where custom duty on imported natural
rubber is 20% against 10% custom duty on the import of finished tyres. Prices
of synthetic rubber have also increased in the year under review due to an
adverse demand and supply situation and sharp increase in crude oil prices.
Carbon black prices have escalated sharply due to a similar rise in feedstock
prices combined with a tight supply position. The continuing antidumping duty
on nylon tyre cord fabric and rubber chemicals have further added to raw
material costs. TheCompany continued to focus on strategic partnership with key
suppliers of the above raw materials and in expanding the sourcing network
across the world to leverage competitive prices.
DOMESTIC MARKETING:
In India, the
Apollo Tyres brand has continued on the growth path that it has set for itself,
benefiting from the spread and depth of its dealer network, the Company's
customer-focussed marketing initiatives and the launch of products relevant to
the Indian consumer. Adding further impetus to this growth have been a
carefully planned and executed series of activities in the realm of product
development, customer education, building relationships with key automobile
manufacturers and promotion of profiled marketing properties. On the product
front, TheCompany has progressed further in bringing to the Indian customer
tyres in every category, suited to the needs of Indian consumers, the country's
rapidly expanding road infrastructure and the advent of new generation vehicles
in all segments. In keeping with TheCompany's philosophy of continuously
servicing the customer, a number of product launches took place over the course
of the year. These include an expansion in the Gold series of commercial tyres,
launch of the Champion FS - a class-leading fuel saver for the truck & bus
segment, and the Regal Transport brand of truck & bus radial tyres. All
light commercial vehicle tyres were further strengthened with the incorporation
of a dual-bead technology, which allows for optimum benefits under varying load
conditions. For the passenger segment, the ultra high performance tyres Acelere
Sportz and Aspire were introduced, along with an expanded range of the 4x4
Hawkz tyres.
The Company
continues to add some of the world's best-known automobile manufacturers to its
list of OE partners. This includes General Motors, their new vehicle Spark was
launched riding exclusively on Apollo Acelere tyres. Two other new products
included the entry of The Company into the retreading material arena with
DuraTread and the retreaded tyres category with DuraTyres. The Company
continued on its existing platform of care for customer, under the Safe Drive
banner, establishing temporary clinics on National Highways, where passenger
car tyres were checked for condition and usage, and a report given to the
driver for future reference, irrespective of the brand used. This was extended
to the commercial vehicle segment under the 'Tyre Pressure Check Day' banner.
Both these activities have brought The Company tremendous goodwill
and empathy with vehicle owner.
The
continuation of double digit growth while reinforcing the Apollo Tyres brand
and maintaining Apollo Tyres' premium quality position is what makes The
Company's leadership in the Indian market unique as well as enviable.
EXPORTS:
The last financial year has been a watershed year in The Company's march
towards becoming a significant global player, having undertaken extensive measures
to strengthen the Company's exports to key countries across the world. As a
result, The Company's share of total exports from India has gone up from 12% in
2003-04 to 18.6% in 2006-07. A major filip to the Company's exports has been
achieved by breaking into the most sophisticated tyre market in the world -
Europe - high quality brands. Europe continues to remain the strategic focus
for the Company's premium brands of Apollo passenger car radial tyres. With
over 500,000 units, TheCompany has emerged as the highest exporter of passenger
car tyres from India in 2006-07.
Going forward,
the focus would remain on export of passenger car radials, supported by truck
and bus radials.
EXPANSION PROGRAMME/FUTURE
OUTLOOK:
The Company's
future outlook continues to remain strong and positive with a focus on
exploring new growth opportunities both within India and overseas. The
Company's passenger car radial tyre manufacturing capacity was expanded to
achieve 300,000 tyres per month from an earlier capacity of 210,000 at the
beginning of the year. Light truck radial capacity has been augmented to 50,000
per month. In the coming year, expansion programmes will continue in both
expanding existing capacity and range of products, identifying newer
opportunities and continuing to bring to the customer base a better and higher
range of existing and allied products.
Manufacturing
capacity of Dunlop Tyres, South Africa, which is now owned by The Company, was
augmented by about 10% through debottlenecking and improved operational
efficiencies. The Company would continue its efforts on improving plant
efficiency, thereby, releasing hidden capacity and bringing down conversion
costs.
ACQUISITION OF DUNLOP TYRES
INTERNATIONAL, SOUTH AFRICA:
The Company had
completed its first international acquisition of Dunlop Tyres International
(Pty) Ltd on April 21, 2006. Given the local domestic price and global raw
material cost pressures in South Africa, the acquisition by The Company has
benefited Dunlop Tyres International significantly. Certain key integration
benefits have already been realised and further positive results are expected
in the forthcoming year. There has been specific emphasis on improvement of
efficiencies and output in truck radial and earthmover products in Durban and
ultra high performance products in Ladysmith. These initiatives will positively
impact Dunlop's competitive capability and favorably position the group for
growth and improved profitability in the forthcoming financial year.
Press
Release
Apollo Tyres partners with Zapak to launch an online tennis game
It’s the first co-branded game on India’s largest gaming portal
Gurgaon, Haryana, October 23, 2007: Apollo Tyres and zapak.com are partners in an online tennis game on India’s largest gaming portal to promote tennis among young Indians. As a part of this promotion Zapak Digital Entertainment has created a unique property called Apollo Tyres Tennis II.
Said Mr Avik Chattopadhyay, Head, Corporate Marketing Group, Apollo Tyres Ltd: “We at Apollo are committed to promote tennis as a sport in India. Since online gaming has become a rage with Indian youth, we joined hands with zapak.com, to reach out to a larger audience. Tennis is one of the most popular games on zapak.com and we found here an opportunity to nurture this interest. Apollo Tyres is the first corporate to have a branded game on zapak.com.”
Commenting on the association Mr Rohit Sharma, Chief Operating Officer, Zapak Digital Entertainment Ltd said, “Their association with Apollo has been one of the most innovative and creative ones, where we have actually branded an entire game after a company. This has taken brand association in online gaming to the next level. Corporate branded games are becoming increasingly popular abroad and Apollo Tyres marks a milestone in this respect in India.”
Mission 2018 is Apollo Tyres’ commitment to build awareness and develop tennis as a sport in India. The company has charted out a 10-year plan to produce an Indian Singles Grand Slam winner by the year 2018 through best-in-class training facilities, global exposure and mentoring to youngsters. To promote tennis among Apollo employees, under the company’s existing fun at work programme branded Svago, zapak.com also conducted a full-fledged gaming contest in Apollo’s headquarters in Gurgaon, setting up 12 gaming terminals, big screen projections, involving 42 employees divided into six groups, and the whole office as keen watchers and cheerleaders. What followed was a three-hour
MEDIA RELEASE
session of fierce competition among employees, fighting to win across six gaming categories, topped up by a mega-game of Apollo Tyres Tennis II, with 200 bonus points for every set won.
About Apollo Tyres Ltd
Apollo Tyres Ltd. is a high-performance company and the leading Indian tyre manufacturer with revenues of over US$ 1 billion. It is built around the core principles of creating stakeholder value through reliability in its products and dependability in its relationships. The company has four manufacturing units in India, two in South Africa and two in Zimbabwe. It has a network of over 4,000 dealerships in India, of which over 2,500 are exclusive outlets. In South Africa, it has over 900 dealerships, of which 190 are Dunlop Accredited Dealers. Website: www.apollotyres.com
About Zapak Digital Entertainment Ltd
ZDEL is India’s largest and most preferred gaming destination, providing a comprehensive mix of contests and services. The company plans to revolutionise the way entertainment is consumed in India by creating a gaming culture. Zapak was recently bestowed the award for ‘Brand Leadership in Internet Business’ at the Asia Brand Congress.
For further details:
Nidhi M. Verma Harshita Verma
LINOpinion Apollo Tyres Ltd
Phone: +91-124-4150200 Phone: +91-124-2721224
Mobile: +91-9811425115 Mobile: +91-9810708826
Email: nidhi.verma@lintasindia.com Email: harshita.verma@apollotyres.com
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No 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.39.33 |
|
UK Pound |
1 |
Rs.81.70 |
|
Euro |
1 |
Rs.57.67 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--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 |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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. |
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 |
|