MIRA
INFORM REPORT
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Report Date : |
05.10.2007 |
IDENTIFICATION DETAILS
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Name : |
NELCO LIMITED |
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Registered Office : |
Francysters
Cybernetics Centre, 3rd Floor, Eucharistic |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
31.08.1940 |
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Com. Reg. No.: |
11-3164 |
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CIN No.: [Company
Identification No.] |
L32200MH1940PLC003164 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMN09602F /
MUMN13038E |
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PAN No.: [Permanent
Account No.] |
AAACTI983C |
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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 : |
The subject is
engaged in the activities of manufacture, trade and sale of consumer
electronic products, sale of business systems and office products. |
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 800000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established company having mediocre track. Company is a member company
of TATA group, a largest industrial house having excellent track records and ethical
business. Their trade relations are fair. Payments are reported as correct
and as per commitments. Profit margin is under severe pressure. The company can
be considered good for normal business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office/ Sales Office : |
Francysters
Cybernetics Centre, 3rd Floor, Eucharistic |
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Tel. No.: |
91-22-56384509 |
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Fax No.: |
91-22-56384510 |
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E-mail: |
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Website: |
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Works &
Facilities: |
MIDC EL-6,
Electronic Zone, Mahape, Navi Mumbai – 400710, |
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Tel. No.: |
91-22-55918728 |
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Fax No.: |
91-22-55918787 |
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Sales Office: |
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15/17/19, Sri
Laxmi Complex, Saint Mark’s Road, |
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Tel. No.: |
91-80-51121840 /
25550170 |
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Fax No.: |
91-80-51121842 /
25550173 |
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Secunderabad
Unit |
Plot No. 65,
Paigah Colony, |
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Tel. No.: |
91-40-27903824 |
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Fax No.: |
91-40-27903272 |
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Kolkata Unit |
32-A, |
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Tel. No.: |
91-33-22121904 /
22121905 |
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Fax No.: |
91-33-22121520 |
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Chennai Unit: |
No. 2, |
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Tel No.: |
91-44-55513933 /
55513934 |
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Kasi Kunj, Road
No.2, Contractor’s Area, P P, |
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Tel. No.: |
91-657-227766 /
227767 |
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Fax No.: |
91-657-227765 |
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702/703, |
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Tel. No.: |
91-11-55402165 /
68 |
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Fax No.: |
91-11-25863878 |
DIRECTORS
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Name : |
Mr. Ratan N Tata |
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Designation : |
Group Chairman |
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Name : |
Mr. M N Bhagwat |
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Designation : |
Chairman |
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Name : |
Mr. B B Dubash |
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Designation : |
Director |
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Name : |
Mr. R R Bhinge |
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Designation : |
Director |
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Name : |
Mr. V K Deshpande |
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Designation : |
Director |
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Name : |
Mr. P K Ghose |
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Designation : |
Director |
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Name : |
Mr. S
Ramakrishnan |
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Designation : |
Director |
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Name : |
Mr. Amulya Charan |
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Designation : |
Director |
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Date of Appointment: |
25.01.2006 |
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Name : |
Lt. Gen. Mr. Davinder
Kumar (Retd.) |
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Designation : |
Director |
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Date of Appointment: |
17.11.2006 |
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Name : |
Mr. K A Mahasur |
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Designation : |
Executive
Director |
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Name : |
Mr. Z J Engineer |
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Designation : |
Executive
Director |
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Name : |
Mr. P R Menon |
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Designation : |
Director |
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Date of Appointment: |
20.07.2007 |
KEY EXECUTIVES
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Name : |
Mr. K D Ghag |
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Designation : |
Company Secretary |
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Name : |
Mr. R B Upadhyay |
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Designation : |
Vice President
(Finance) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of
Shareholders |
No. of Shares |
Percentage of Holding |
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TATA
Companies |
11435990 |
50.12 |
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Financial
Institutions/Banks |
39590 |
0.17 |
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Mutual
Funds |
12100 |
0.05 |
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State Government/
Government Companies |
82160 |
0.36 |
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Bodies
Corporate/Trusts |
2018291 |
8.85 |
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Individuals |
8110885 |
35.55 |
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Flls/NRI/Foreign
Corporate Bodies |
1119384 |
4.91 |
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Total |
22818400 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
The subject is
engaged in the activities of manufacture, trade and sale of consumer
electronic products, sale of business systems and office products |
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Products: |
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PRODUCTION STATUS
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Particulars |
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Unit |
Installed
Capacity |
Actual
Production |
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Variable Speed Drives |
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Nos |
2500 |
271 |
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Power Auxiliary Converters |
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Nos |
20 |
6 |
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Supervisory Control and Data Acquisition Systems – Assemblies and
Equipments |
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Nos |
700 |
19 |
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UGS |
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Nos |
125 |
38 |
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GPS |
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Nos |
200 |
60 |
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UGS / GPS – Assemblies and Equipments |
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Nos |
1025 |
109 |
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Shelters |
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Nos |
10 |
0 |
GENERAL INFORMATION
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Customers : |
·
Ministry
of Defence ·
State
Electricity Board ·
Siemens
Limited ·
Power
Grid Corporation ·
Jindal
Steel and Power ·
Philips
Carbon ·
Tata
Iron and Steel ·
Indian
Railways ·
Steel
Authority of ·
Hindustan
Paper Limited ·
Hindustan
Petroleum Corporation Limited ·
Cochin
Port Trust Limited ·
Tata
Power Company Limited ·
Tata
Motors Limited |
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No. of Employees : |
340 |
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Bankers : |
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Facilities: |
In respect of the above loans, Rs. 51.977 millions is due and
repayable within a year. Notes: a)
Cash credit with Banks are secured by
hypothecation of all tangible moveable assets, including stocks of raw
materials, finished goods, goods-in-process, book-debts, monies receivable
and a second charge on the fixed assets of the Company. b)
Term Loan from Axis bank Limited is secured by
pari-passu first charge alongwith Zoroastrian Co-operative Bank Limited on
the present and future fixed assets of the Company and first pari-passu
charge alongwith consortium of banks for working capital facilities, on the
receivables arising out of the lease rentals recoverable from installation of
first 2000 VSAT’s of Gilat, Israel on rental basis. c)
Term Loans from the Zoroastrian Co-operative Bank
Limited are secured by pari-passu first charge alongwith Axis Bank Limited on
the present and future fixed assets of the Company. d)
Hire Purchase Loans are secured by way of
hypothecation on vehicles acquired under hire purchase scheme. Unsecured Loans
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Banking Relations : |
Satisfactory |
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Auditors : |
N M Raiji and
Company Chartered
Accountants Mumbai, |
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Holding Company |
The Tata Power
Company Limited (from 31.12.2005) |
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Associates: |
The Tata Power
Company Limited (upto 31.12.2005) |
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Subsidiary company: |
Tata net Services
Limited |
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Solicitors : |
Mulla and Mulla
and Craigie, Blunt and Caroe |
CAPITAL STRUCTURE
Authorized Capital:
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No. of Shares |
Type |
Value |
Amount |
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2,50,00,000 |
Equity Shares |
Rs 10/- each |
Rs 250.000 Millions |
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25,00,000 |
Redeemable
Preference Shares |
Rs 100/- each |
Rs 250.000 Millions |
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Total |
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Rs. 500.000 Millions |
Issued, Subscribed & Paid-up Capital:
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No. of Shares |
Type |
Value |
Amount |
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2,24,96,370 |
Equity
Shares of Rs.10/- each fully paid-up for payment in cash (including 939
Equity shares pending allotment.) |
Rs 10/- each |
Rs 224.964 Millions |
|
5,370 |
Equity
Shares of Rs.10/- each issued as fully paid-up otherwise than in cash
pursuant to contracts dated 23.10.2004 |
Rs 10/- each |
Rs 0.054 Millions |
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3,16,660 |
Equity Shares issued
to shareholders of General Radio and Appliances |
Rs 10/- each |
Rs 3.167 Millions |
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Total |
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Rs. 228.185 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 (6 Months) |
30.09.2006 |
30.09.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
228.175 |
228.175 |
228.175 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
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04] (Accumulated Losses) |
27.891 |
41.910 |
73.002 |
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NETWORTH |
200.284 |
186.265 |
155.173 |
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LOAN FUNDS |
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1] Secured Loans |
350.680 |
268.059 |
293.044 |
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2] Unsecured Loans |
600.820 |
662.771 |
613.738 |
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TOTAL BORROWING |
951.500 |
930.830 |
906.782 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1151.784 |
1117.095 |
1061.955 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
197.945 |
207.838 |
183.754 |
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Capital work-in-progress |
3.198 |
2.392 |
2.463 |
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INVESTMENT |
48.464 |
48.364 |
50.614 |
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DEFERREX TAX ASSETS |
41.495 |
31.437 |
30.225 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
276.018 |
318.588 |
188.001 |
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Sundry Debtors |
798.944 |
806.085 |
894.122 |
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Cash & Bank Balances |
29.908 |
22.067 |
27.337 |
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Other Current Assets |
0.000 |
0.000 |
0.000 |
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Loans & Advances |
293.549 |
278.581 |
259.886 |
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Total Current Assets |
1398.419 |
1425.321 |
1369.346 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
529.466 |
609.813 |
631.197 |
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Provisions |
63.758 |
59.892 |
51.787 |
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Total Current Liabilities |
593.224 |
669.705 |
682.984 |
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Net Current Assets |
805.195 |
755.616 |
686.362 |
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MISCELLANEOUS EXPENSES |
55.487 |
71.448 |
108.537 |
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TOTAL |
1151.784 |
1117.095 |
1061.955 |
PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 (6 Months) |
30.09.2006 |
30.09.2005 |
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Sales Turnover |
616.347 |
1172.768 |
1399.314 |
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Other Income |
3.128 |
12.640 |
0.000 |
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Total Income |
619.475 |
1185.408 |
1399.314 |
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Profit/(Loss)
Before Tax |
20.224 |
38.565 |
5.341 |
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Provision for
Taxation |
6.205 |
7.473 |
2.742 |
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Profit/(Loss)
After Tax |
14.019 |
31.092 |
2.599 |
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Earnings in Foreign Currency : |
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Engineering / Software
Services |
6.412 |
10.116 |
NA |
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Exports of Goods
calculated on FOB basis |
0.285 |
78.187 |
NA |
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Total Earnings |
6.697 |
88.303 |
NA |
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Imports : |
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Raw Materials and Component |
80.912 |
143.437 |
NA |
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Finished Goods |
21.497 |
205.117 |
NA |
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Capital Goods |
0.313 |
1.900 |
NA |
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Total Imports |
102.722 |
350.454 |
NA |
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Expenditures: |
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Manufacturing and
Other Expenses |
518.461 |
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Interest |
44.908 |
79.285 |
1351.864 |
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Depreciation |
20.236 |
34.230 |
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Deferred Revenue
Expenditure |
15.646 |
36.459 |
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Total Expenditure |
599.251 |
1146.843 |
1351.864 |
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SUMMARISED RESULTS
|
PARTICULARS |
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|
30.06.2007 (1st
Quarter) |
|
Sales Turnover |
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|
153.200 |
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Other Income |
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|
2.400 |
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Total Income |
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|
155.600 |
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Total Expenditure |
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|
164.700 |
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Operating Profit |
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|
(9.100) |
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Interest |
|
|
26.800 |
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Gross Profit |
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|
(35.900) |
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Depreciation |
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|
10.600 |
|
Tax |
|
|
1.300 |
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Reported PAT |
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|
(47.800) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 (6 Months) |
30.09.2006 |
30.09.2005 |
|
Debt-Equity
Ratio |
|
4.87 |
5.38 |
6.17 |
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Long
Term Debt-Equity Ratio |
|
1.95 |
2.56 |
3.22 |
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Current
Ratio |
|
1.20 |
1.22 |
1.26 |
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TURNOVER
RATIOS |
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Fixed
Assets |
|
2.84 |
2.83 |
3.84 |
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Inventory |
|
4.45 |
4.73 |
4.87 |
|
Debtors |
|
1.65 |
1.45 |
2.03 |
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Interest
Cover Ratio |
|
1.40 |
1.37 |
1.05 |
|
Operating
Profit Margin |
(%) |
13.79 |
13.12 |
10.24 |
|
Profit
Before Interest And Tax Margin |
(%) |
10.74 |
10.35 |
7.64 |
|
Cash
Profit Margin |
(%) |
5.17 |
4.97 |
2.78 |
|
Adjusted
Net Profit Margin |
(%) |
2.12 |
2.20 |
0.18 |
|
Return
On Capital Employed |
(%) |
12.84 |
12.08 |
11.03 |
|
Return
On Net Worth |
(%) |
12.27 |
11.88 |
1.37 |
LOCAL AGENCY FURTHER INFORMATION
BUSINESS
SEGMENTS
The current
business operation is structured along two business segments. In addition,
Property Development at Andheri, Mumbai, is a major activity for the Company.
Change in Financial Year
The Directors have
taken a decision to revert to the earlier practice of closing the financial
year to end on 31st March which is, also in line with the financial
year of The Tata Power Company Limited, the holding company. With this change,
the Accounts for the financial year 2006-07 are presented for a period of 6
months commencing from 1st October 2006 to 31st March
2007.
Tatanet Network Systems:
This division provides management of network
connectivity services over VSAT (Very Small Aperture Terminals using satellite
communication technology) for large and medium Corporate, Broking Houses and
small and medium enterprises. It provides solutions like bandwidth on demand.
Internet over VSAT, interactive distance learning, IP multicast and digital
streaming to industry segments like manufacturing and distribution,
Pharmaceuticals, banking and financial services, media, tourism, logistics and
to government and public sector units.
Property Development
This activity consists of development of
part of the property at Andheri with the assistance of THDC Limited.
Operations
The Strategic
Electronic LoB secured an order for Unattended Ground Sensors from the Ministry
of Defence (MoD) and was partially executed during the period under review.
This LoB continues to focus on securing orders for Surveillance Systems and
Solutions for defence and Homeland Security including specialized applications
such as Automatic Weather Monitoring and Data Acquisition using radio links,
etc.
The ENMS LoB made
further progress on execution of the Jaipur Vidyut Vitran Nigam Limited (JVVNL)
project for City Distribution management System. In order to broaden the market
reach, this LoB has developed SCADA applications for Light House Management in
Shipping Industry, Hydro Power Plants and the Rural Load Management.
The Traction
Electronics LoB received a major order for supply of Power Converter for 3
Phase AC Locomotives of Indian Railways. During the period under review, the LoB
also supplied and successfully commissioned six power converters, against an
earlier order. The operational performances of these converters have been found
to be superior to that of similar converters supplied by alternate suppliers to
the Railways. This LoB has added to its offerings, converters for use in AC
coaches and diesel locomotives to expand the served market.
The Drives LoB
continues to face intense price competition from the Multinationals. During the
period under review, it received a major order for supply of MV Drives with a
customized solution from a Indian engineering company.
During the period
under review, the Building Mangement System LoB has launched systems for
Integrated Building Management for the Indian realty sector such as IT parks,
Hotels, Corporate Houses, etc. The Company along with its technology partner,
Yamatake Corporation of
Outlook
The Capital investment
in the industries served by ISD continuous to show decent growth and it is
expected that this growth will sustain for the foreseeable period.
In view of the
increased internal security concerns, the need for Surveillance and Detection
Systems for key establishments such as Airports, Railways, Defence, etc has
been growing. The Strategic Electronics LoB is well poised to utilize these
growth opportunities.
With continued
emphasis on reduction of Power losses, automatic billing etc., the need for Energy
Network Management systems in steadily growing. With increased product
portfolio, the ENMS LoB will continue to see a reasonable growth in the years
ahead.
With the growth of
Indian economy the Indian Railways is witnessing a greater demand for movement
of people and goods which in turn will lead to the increased demand for AC and
Diesel locomotives. This increased demand augurs well for the Traction LoB
which has been successful in supplying equipment to Railways.
With the realty
sector growing faster than the industrial sector, the demand for the Building
Management system is growing at a much faster pace. The growth is opening up a
large market for Integrated Business Management Systems. The LoB is gearing up
to secure a sizeable share of this market with the support of its technology
partner.
The ISD continues
to make progress towards implementation of initiatives for growth and
operational excellence. The initiatives include enhancement of product
portfolio through alliances to enlarge the served and adjacent markets,
strengthening of controls and improvements in business progresses. These
actions will result in larger addressed market, efficient working capital
management, cost reduction and customer satisfaction.
Dividend
In view of the
inadequacy of profit and accumulated losses, the Directors regret their
inability to recommend any dividend for the year.
Property Development
The additional FSI
rights pursuant to IT Park Policy of the Government of Maharashtra for
additional construction on
Fixed Assets
- Land : Lease Hold
- Buildings
- Plant and Machinery
- Electric Installation
- Office Equipments, Furniture and
Fixtures
- Vehicles
Biodata
The
National Radio and Electronics Company (NELCO) were promoted in 1940 by the
Investment Corporation of
Subject has technical collaboration/technical transfer agreements with
Subject transferred its business systems division to a new subsidiary -- Nelito
Systems, formed in association with Itochu Corporation,
Subject and General Electric (GE) of
Target
Market / Industry Sector for the company are:
- Manufacturing
- Distribution
- Petroleum
- Pharma
- Insurance
- BFSI
- Government
Projects
- Media
- Travel and
Tourism
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.39.49 |
|
|
1 |
Rs.80.41 |
|
Euro |
1 |
Rs.55.76 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
48 |
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 |
|