MIRA
INFORM REPORT
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Report Date : |
27.10.2007 |
IDENTIFICATION DETAILS
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Name : |
GOODYEAR INDIA LIMITED |
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Formerly Known As : |
GOODYEA TIRE AND RUBBER COMPANY ( |
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Registered Office : |
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Country : |
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Financials (as
on) : |
31.12.2006 |
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Date of Incorporation : |
01.01.1901 |
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Com. Reg. No.: |
05-8578 |
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CIN No. : |
L25111HR1961PLC008578 |
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TAN No.: (Tax Deduction &
Collection Account No.) |
DELG00070A / RTKG03767B |
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PAN No.: (Permanent Account No.) |
AAACG3511H |
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Legal Form : |
It is a Public Limited liability Company. The company’s shares are listed on the Stock Exchanges. Subject is a subsidiary of Goodyear Tire and Rubber Company Limited, a multinational giant with a universally recognised brand name. |
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Line of Business : |
Manufacturing and selling of Automotive Tyres, Truck, Bus, Car, Tractor, Jeep and LCV tyres |
RATING & COMMENTS
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MIRA’s Rating : |
A |
RATING
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STATUS |
PROPOSED
CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded
healthy. General unfavourable factors will not cause fatal effect. Satisfactory
capability for payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 4800000 |
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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 company having satisfactory track. Their trade relations are fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office /Factory : |
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Tel. No.: |
91-129-5069000/2305301-05 |
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Fax No.: |
91-129-2305309 |
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E-Mail : |
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Website : |
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Head Office : |
Godrej Bhavan, |
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Tel. No.: |
91-11-26836567 (8 Lines) |
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Fax No.: |
91-11-26836170 |
DIRECTORS
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Name : |
Mr. Antonio M. Capellini |
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Designation : |
Chairman &
Managing Director |
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Name : |
Mr. Hugo O. Dedekind |
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Designation : |
Finance Director |
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Name : |
Mr. R. V. Gupta |
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Designation : |
Independent
Director |
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Name : |
Mr. Alberto Aguirre Rivera |
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Designation : |
Finance Director |
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Name : |
Mr. C. Dasgupta |
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Designation : |
Independent
Director |
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Name : |
Mr. Luis C Ceneviz |
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Designation : |
Director |
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Name : |
Mr. S. K. Jain |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group2 |
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Indian |
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Bodies Corporate |
17069215 |
74.00 |
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Public shareholding |
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Institutions |
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Mutual Funds/ UTI |
848800 |
3.68 |
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Financial Institutions / Banks |
13959 |
0.06 |
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Insurance Companies |
454694 |
1.97 |
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Foreign Institutional Investors |
99220 |
0.43 |
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Non-institutions |
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Bodies Corporate |
609927 |
2.64 |
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Individuals |
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Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Million |
3233359 |
14.02 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100
Million |
737339 |
3.20 |
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TOTAL |
23066513 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and selling of Automotive Tyres, Truck, Bus, Car, Tractor, Jeep and LCV tyres. |
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Products : |
Automotive Tyres, Truck, Bus, Car, Tractor, Jeep and LCV tyres. |
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Exports to : |
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Imports from : |
Raw materials, components and spare parts and capital
goods from Europe, |
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Terms : |
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Purchasing : |
Against L/C, D/A, D/P or Credit terms. |
PRODUCTION STATUS
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Particulars |
Unit |
Installed Capacity |
Actual Production |
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Automotive Tyres |
Nos. |
1264 |
1095 |
GENERAL INFORMATION
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No. of Employees : |
891 |
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Bankers : |
·
Citibank, ·
Bank of ·
Punjab National Bank, |
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Banking Relations
: |
Good |
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Auditors : |
Price Waterhouse Chartered Accountants A. F. Ferguson & Company Chartered Accountants Cost auditor
Dr. Ashok K. Agarwal Cost Auditor |
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Parent Company : |
· Goodyear Tire and Rubber Company Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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30000000 |
Equity Shares |
Rs. 10/- each |
Rs. 300.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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23066507 |
Equity Shares |
Rs. 10/- each |
Rs. 230.665 millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
230.700 |
230.665 |
230.665 |
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2] Reserves & Surplus |
979.300 |
671.245 |
672.976 |
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3] Profit and Loss Account |
0.000 |
[5.575] |
(93.564) |
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NETWORTH |
1210.000 |
896.335 |
810.081 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
561.600 |
950.040 |
913.290 |
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3) Finance Lease Liabilities |
0.000 |
0.000 |
2.030 |
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TOTAL BORROWING |
561.600 |
950.040 |
915.320 |
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TOTAL |
1771.600 |
1846.375 |
1725.401 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1013.800 |
1013.896 |
1031.062 |
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Capital work-in-progress |
104.500 |
58.243 |
22.285 |
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INVESTMENTS |
0.000 |
113.400 |
113.400 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
613.400 |
583.071 |
869.899 |
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Sundry Debtors |
1091.400 |
966.859 |
710.591 |
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Cash & Bank Balances |
988.600 |
723.749 |
389.518 |
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Loans & Advances |
271.100 |
143.014 |
199.555 |
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Total Current Assets |
2964.500 |
2416.693 |
2169.563 |
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Less : |
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Current Liabilities |
1915.500 |
1506.693 |
1538.362 |
Provisions
|
395.700 |
259.398 |
112.296 |
Total Current
Liabilities
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2311.200 |
1766.091 |
1650.658 |
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Net Current Assets |
653.300 |
650.602 |
518.905
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MISCELLANEOUS EXPENSES |
0.000 |
10.234 |
39.749 |
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TOTAL |
1771.600 |
1846.375 |
1725.401 |
PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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Sales Turnover |
9354.000
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7545.000
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7156.300
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Other Income |
140.000
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91.900
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72.000
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Total Income |
9494.000 |
7636.900 |
7228.300 |
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Profit/(Loss) Before Tax |
554.900
|
104.423 |
54.690 |
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Provision for Taxation |
103.700
|
16.434 |
2.900 |
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Profit/(Loss) After Tax |
451.200
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87.989 |
51.790 |
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Earnings in Foreign Currency : |
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Total Earnings |
NA |
765.341 |
739.365 |
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Imports : |
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Total Imports |
NA |
654.627 |
580.613 |
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Expenditures : |
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Increase/(Decrease) in Finished Goods |
[34.500]
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117.100
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[45.100] |
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Raw Materials |
6323.600
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5034.900
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4736.600
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Excise Duty |
888.500
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669.800
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799.900
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Power & Fuel Cost |
277.000
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232.900
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216.000
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Other Manufacturing Expenses |
141.300
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142.400
|
152.000
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Employee Cost |
356.700
|
332.900
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341.900
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Selling and Administration Expenses |
698.200
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615.100
|
606.400
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Miscellaneous Expenses |
89.200
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157.700
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168.700
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Interest & Financial Charges |
91.400
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90.200
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75.000
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Depreciation |
107.700
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139.400
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122.200
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Total Expenditure |
8939.100 |
7532.400 |
7173.600 |
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SUMMARISED RESULTS
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Particulars |
|
31.03.2007 |
30.06.2007 |
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Type |
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1st
Quarter |
2nd
Quarter |
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Sales Turnover |
|
1996.800
|
2410.600
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Other Income |
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36.500
|
28.200
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Total Income |
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2033.300
|
2438.800
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Total Expediture |
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1825.700
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2205.600
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Operating Profit |
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207.600
|
233.200
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Interest |
|
16.500
|
13.800
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Gross Profit |
|
191.100
|
219.400
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Depreciation |
|
27.600
|
28.000
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Tax |
|
52.400
|
74.900
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Reported PAT |
|
101.300
|
121.900
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KEY RATIOS
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PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
Debt Equity Ratio |
0.74 |
1.15 |
1.26 |
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Long Term Debt
Equity Ratio |
0.00 |
0.00 |
0.00 |
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Current Ratio |
0.96 |
0.87 |
0.81 |
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TURNOVER RATIOS |
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Fixed Assets |
3.97 |
3.30 |
3.19 |
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Inventory |
15.64 |
10.39 |
9.46 |
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Debtors |
9.09 |
8.56 |
10.16 |
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Interest Cover
Ratio |
7.07 |
2.16 |
2.09 |
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Operating Profit
Margin (%) |
8.06 |
4.43 |
3.89 |
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Profit Before
Interest and Tax Margin (%) |
6.91 |
2.58 |
2.19 |
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Cash Profit
Margin (%) |
5.97 |
3.01 |
2.79 |
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Adjusted Net
Profit Margin (%) |
4.82 |
1.17 |
1.08 |
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Return on Capital
Employed (%) |
36.55 |
11.01 |
8.96 |
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Return on Net
Worth (%) |
44.35 |
10.21 |
8.95 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
The company was incorporated on 10th October, 1922 at
In 1961, the company was converted into a public limited liability
company and the name was changed to the present.
In 1993, a joint venture South Asia Tyres was effected with RPG-Ceat to
manufacture steel radial passenger tyres, truck tyres and bias earthmover
tyres, earlier imported. Goodyear’s product profile includes ultra large
earthmover tyres, which are import substitutes, power tread passenger radial
tyres, light and medium commercial truck tyres, farm tyres, automotive tyres,
etc, which are marketed under the Goodyear brand.
The Company undertook modernisation and expansion of its units to
increase productivity. It was accredited with ISO 9002 certification by
National Quality Assurance,
In 1999, it launched
Subject has
introduced three new products for truck and light truck segments. They are the Power 200, the Power Torq+ and
the Power Max+ targeted at the medium, commercial and light truck segments,
respectively. The new tyres were created
with the state-of-the-art computer modelling techniques to reduce tread
wear.
The company explored new markets beyond the borders and expanded the
areas of its marketing influence in
It is also trading in Automotive Tyres, Flaps, Automotive Tubes,
Rubber Dock Fenders, Transmission
Belting, Industrial V Belts, Fan Belts and other rubber products.
The company's product range includes ultra large earthmover tyres, power
tread passenger radial tyres, light and medium commercial truck tyres, farm
tyres, automotive tyres, etc. which are marketed under the Goodyear brand.
A Tyre Tube Plant was erected in Haryana on approximately a 70-acre plot
of land in Ballabgarh on
The company has
been accredited with ISO 9002 Certification by National Quality Assurance,
During 2005, the
company launched a new Rear Farm Tyre 'Sampurna' which was ver well accepted in
the Market. During the year under report the companies production capacity of
Automotive Tyre stood at 1264 Nos.
Generic Names of the Principle Products / Services of the Company is:-
|
Item Code No.
(ITC Code) |
Tyres |
Flap |
Tubes |
Others |
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Passenger / Jeep |
40111000 |
-- |
40131001 |
-- |
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Bus / Lorries Off the Road |
40112000 40119901 |
40129004 |
40131002 40139003 |
-- |
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Tractor |
40119902 |
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40139004 |
-- |
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Transmission Belting |
-- |
-- |
-- |
40109904 |
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V & Fan Belt |
-- |
-- |
-- |
40101002 |
Against the current year's profit, which includes a one time income of
Rs.96.100 Millions. an amount of Rs.10.900 Millions has been provided towards
Fringe Benefit Tax and Rs. 95.100 Millions towards Deferred Tax Minimum
Alternate Tax provided for the year under review is Rs.60.400 Millions.
Considering reasonable certainty of set off against future tax liability. an
asset aggregating to Rs.62.700 Millions has been recorded as minimum alternate
tax credit during the year as available under the provisions of the Income Tax
Act, 1961.
During the year, the net sales and other income increased from Rs.6801.500
Millions in the previous year to Rs.8436.400 Millions. The export sales stood
at 576.200 Millions.
The depreciation for the year is inclusive of the accelerated depreciation
amounting to Rs.10.300 Millions in respect of a category of equipment due for
replacement.
OPERATIONS:
Supply of farm tyres to replacement and original equipment segments, wherein
the company holds a key position, continued to be the area of focus of the
Company. In order to meet the increased demand for farm tyres, the working
period at the Ballabgarh plant was increased. The Company continued to follow
its philosophy to provide the high quality products at the lowest cost, coupled
with excellent customer services.
Every effort was
made under Six Sigma Umbrella to achieve possible savings/ cost reduction.
Savings achieved in energy consumption appear in the Annexure to the Directors'
Report.
FINANCE AND ACCOUNTS:
As reported
earlier, the Company had been considering various options to reduce the
interest expenses and the foreign exchange risk exposure, and, it is heartening
to report that out of the External Commercial Term Loan ('ECB') of US$ 21
Million availed from the Parent Company. The Goodyear Tire & Rubber
Company, Akron, Ohio, USA ('GTR'), the Company repaid US$8.4 Million during the
year under review and has also obtained requisite approvals to prepay the
balance outstanding portion of US$12.6 Million during the current year.
Effective October 1,
2006, the Company has agreed to pay GTR a fee for use of their trade name and
trademarks @ 1% on domestic sales and 2% on export sales and, accordingly, an
amount of Rs.15.200 Millions has been provided in the accounts for the year
under review in terms of the agreement entered into with GTR. During the year
under review, the Company has also disposed of its investment in 1,13,40,000
equity shares of Goodyear South Asia Tyres Private Limited to a subsidiary of
GTR.
As at the end of
December 2006, an amount of Rs. 0.316 Millions of matured deposits remained
unclaimed.
FUTURE OUTLOOK:
With the economic
growth likely to sustain at over 9% and the thrust being placed by the
Government on the growth of agriculture and development of infrastructure, the
automobile sector/tyre industry are poised for an impressive growth. With the
Government's plan to boost farm credit as well as other measures initiated for
an estimated 4% growth in the agriculture sector, the Company is increasing its
focus on production of farm tyres.
The Company's
products are well accepted in the market.
The market is
witnessing continuous upward trend in the prices of raw materials as well as
fierce competition. In such an environment, Six Sigma is perceived as an
important tool to improve processes or operations to maximize gain/reduce
cost.
MANAGEMENT DISCUSSION AND ANALYSIS:
Industry Structure & Developments:
The growth of the
tyre industry depends on various factors including overall GDP growth,
agricultural and industrial production, growth in vehicle demand and
infrastructure development. The economy is estimated to sustain a growth of
over 9%. Despite the fierce competition within the tyre industry, the growth in
the economy provides a boost to the automobile and tyre industries.
Opportunities & Threats:
As a subsidiary of
The Goodyear Tire and Rubber Company,
Outlook:
The thrust being placed by the Government on the development of infrastructure,
agriculture and manufacturing sectors should result in an impressive growth in
the tyre sector too. Companies are now placing a greater emphasis on product
innovation, technology, process improvement and operational efficiency to combat
the rising trend witnessed in the prices of raw materials and other inputs,
which continues to be an area of concern. In this prevailing environment, the
Company continues to follow its philosophy to provide the highest quality
products to its customers.
The continuous
review of activities in different areas of operations, under the umbrella of
the Six Sigma system, is an integral part of the Company's strategy to maximize
gains and reduce costs in order to meet the market challenges.
Risks and concerns:
The local taxes
and duties levied by the Governmental authorities have a direct impact on the
Company's operations and profitability as its products are largely intended for
sale in the domestic market.
Approximately 22%
of sales turnover of the Company was attributable to the sale of products,
procured from GSATPL, primarily to wholesale dealers in the replacement market,
pursuant to the off-take agreement with the said company. This off-take
agreement is on a non-exclusive basis and can be terminated by either party
after giving four months' notice.
As in the past,
the Company has obtained insurance coverage for its assets- However, no cover
for the foreign exchange risk was obtained by the Company for the outstanding
External Commercial term loan (`ECB') and other foreign exchange exposures.
Efforts are being made to reduce the foreign exchange risk exposure by
prepaying the entire outstanding ECB of US $ 12.6 Million during the year 2007,
for which the Company has already received the requisite approval. Certain
demands/disputes raised against the Company, pending final adjudication, are
the other areas of concern. The Company has blocked certain funds in order to
secure a few of these demands in terms of the Court order(s).
Fixed Assets
·
·
Buildings
·
Plant and Machinery
·
Furniture and Fittings
·
Motor Cars
·
Trucks
WEBSITE DETAILS
The Goodyear
Goodyear is a
multinational with a universally recognized brand name identified with quality tyres.
Goodyear has annual sales of over US $15bn, has a presence in six continents
and operates from 80 facilities in 28 countries.
All this is
achieved with a team of 85,000 people dedicated to make Goodyear a company in
the service of our esteemed customers and consumers.
Goodyear India Limited
Goodyear's
presence in
A chronology of
Goodyear's continued success in
1922: Goodyear tyre and Rubber company
1961: Goodyear
1965: The Ballabgarh plant was expanded which increased the
plant production by 35%
1969-70: The production increased by nearly 100%
1993: Goodyear formed a 50-50 joint venture with South-
Asian Tyres Limited (SATL) at
1996: The first tyre GPS2 radial Passenger was rolled out
from
1998: SATL becomes a fully owned Goodyear Company
1999: A significant investment of 9.3 MM USD was made in
the farm tyre manufacturing process.
2002: Goodyear becomes the first tyre manufacturer to roll
out tubeless tyres on Indian roads.
In the passenger
car segment, Goodyear supplies tyres to many of the leading Original Equipment
Manufacturers in
Goodyear
In the farm
segment Goodyear tyres are supplied to all the major Tractor manufacturers like
PTL, ITL, TAFE, Eicher and Escorts. Similarly, for buses and trucks, vehicles
rolling out of the assembly line of the leading OEMs like TELCO, Ashok Leyland,
and Swaraj Mazda are often seen with Goodyear tyres.
Goodyear commands
a major market share in the Off The Road (OTR) segment by being a major
supplier to Coal India Limited, Escorts, L&T, TISCO and major steel plants
of the country.
Spreading
its wings outside the geographical boundaries of the country Goodyear
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.39.51 |
|
|
1 |
Rs.81.16 |
|
Euro |
1 |
Rs.56.76 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--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 |
|
54 |
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 |
|