MIRA INFORM REPORT

 

 

Report Date :

07.04.2008

 

 

IDENTIFICATION DETAILS

 

Name :

SUBROS LIMITED

 

 

Registered Office :

LGF, World Trade Centre, Barakhamba Lane, New Delhi 110001

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

14.02.1985

 

 

Com. Reg. No.:

55-20134

 

 

CIN No.:

[Company Identification No.]

L74899DL1985PLC020134

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

DELS01638A

 

 

Legal Form :

Public Limited Liability Company. The company’s share are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturers and Suppliers of Automotive Air Conditioning Systems Parts and Accessories for Motor Vehicles.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

USD 6000000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and reputed company having fine track. Available information indicates satisfactory financial responsibility of the company. Trade relations are fair. Business is active. Payments are reported as usually correct and as per commitments.

 

The company can be considered good for normal business dealings at usual trade terms and conditions.  

 

 

LOCATIONS

 

Registered Office :

LGF, World Trade Centre, Barakhamba Lane, New Delhi 110001

Tel. No.:

91-11- 23414946-49

Fax No.:

91-11- 23414945

E-Mail :

virenderkumar@subros.com

dmukharjee@subroslimited.com

Website :

http://www.subros.com  

http://www.subroslimited.com

 

 

Factory 1 :

C-51, Phase-II, Noida, P.O. N.E.P.Z., Distt. Gautam Budh Nagar (U.P.)

 

 

Factory 2 / Marketing Office / Sales Head Quarter / Service Head Quarter :

B-188, Phase-II, Noida P.O. N.E.P.Z., Distt. Gautam Budh Nagar (U.P.)

Tel No.:

91-120-2562226, 2460135, 2562783

Fax No.:

91-120-2562783 / 2562227

Email :

jose@subros.com

 

 

Factory 3 :

Plot No.395/396, Sec-8, IMT, Manesar, Dist. Gurgaon (Haryana)

 

 

Factory 4 :

Plot No.B-8 & 9, MIDC Industrial Area, Chakan, Pune (Maharashtra)

 

 

Service Centres :

C-9, Sector-1, Distt: Goutham Budh Nagar, Noida - 201 304 (U.P)

 

91-120-2551017, 2521888

Area :

91-120—2529405

Location :

 

Service Centers :

B 8 & 9, MIDC Chakan -Talegaon Road, CHAKAN, Pune 410501

Tel. No.:

91-2135-259584

Fax No.:

91-2135-259585

 

 

Service Centers :

Satyam Complex, 3/F, 1st Floor, Opp: Kirthi Sagar, Near - Sharnam 6, Jodhpurgam, Ahmedabad - 380 015

Tel. No.:

91-79-6872683

 

 

Sales & Service :

1, Shambunath Pandit Road, (Near Lazeem Restaurant), Kolkata - 700 020

Tel. No.:

91-33-2222856

 

 

Sales Centres :

47, Kuber Complex, New Link Road, Andheri (W), Mumbai - 400 058

Tel. No.:

91-22-50059923

 

 

Sales Centres :

Gadia Tower No. 3, Sarangabani Street, T-Nagar, Chennai - 600 017

Tel. No.:

91-44-42121834

Fax No.:

91-44-28342935

 

 

Sales Centres :

Plot No.40, 1st Floor, Prenderghast Road ( P.G.Road ), Secunderabad 500 003

Tel. No.:

91-40-55328757

Fax No.:

91-40-55328758

 

 

DIRECTORS

 

Name :

Mr. Ramesh Suri

Designation :

Chairman & Managing Director

 

 

Name :

Ms. Shradha Suri

Designation :

Executive Director

 

 

Name :

Mrs. Jyotsna Suri

Designation :

 

 

 

Name :

Mr. Y. Makino

Designation :

(Representative of Denso Corporation, Japan)

 

 

Name :

Mr. T. Kobayashi

Designation :

(Representative of Suzuki Motor Corporation, Japan)

 

 

Name :

Mr. P. Sabanayagam

Designation :

I.A.S. (Retd.)

 

 

Name :

Mr. G.N. Mehra

Designation :

I.A.S. (Retd.)

 

 

Name :

Mr. Shailendra Swarup

Designation :

Director

 

 

Name :

Mr. K.R. Ramamoorthy

Designation :

Director

 

 

Name :

Mr. H. Ishida

Designation :

Alternate Director far Mr. Y. Makino

 

 

Name :

Mr. Hanuwant Singh

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr. Virender Kumar

Designation :

Executive Vice President Corporation Affairs cum Company Secretary

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 31ST MARCH 2007

 

Names of Shareholders

 

No. of Shares

Promoters

 

48,00,000

Foreign Collaborators

 

31,20,000

Foreign Institutional

 

48,246

Investors

 

-

Banks

 

300

Insurance Go's

 

46,200

Financial Institution

 

8,44,418

Non Resident Indian

 

40,769

Corporate Bodies

 

9,78,169

Indian Public

 

21,19,618

TOTAL

 

1,19,97,720

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturers and Suppliers of Automotive Air Conditioning Systems Parts and Accessories for Motor Vehicles.

 

 

Products :

Item Code No.

Product Description

B-13-374.8

Automotive Air Conditioning Systems Parts & Accessories for Motor Vehicles

 

PRODUCTION STATUS

 

Particulars

Unit

 

Installed Capacity

Actual Production

Automotive Air Conditioning Systems

Nos.

 

750000

467455

Fan Motor Assembly [Ventilators]

Nos.

 

750000

399770

 

 

GENERAL INFORMATION

 

Customers :
  • TATA
  • Force
  • Maruti Udyog Limited, Gurgaon, India
  • Telco Pimpri, Pune, India
  • Hindustan Motors Limited, Hoogly, Kolkata, West Bengal, India
  • Bajaj Tempo Limited, Pithampur, District Dhar, Madhya Pradesh, India
  • Honda Siel Cars India Limited, Greater Noida, Uttar Pradesh, India
  • Denso Kirloskar Industries Private Limited, Bangalore, Karnataka, India
  • Reva Electric Car Company Private Limited, 122 E, Bommasandra Industrial Area,  Bommasandra, Bangalore, India

 

 

No. of Employees :

1800

 

 

Bankers :
  • Canara Bank, Overseas Branch, B-39, Connaught Circus, New Delhi
  • Kotak Mahindra Bank
  • Hongkong & Sanghai Banking Corporation

 

 

Facilities :

SECURED LOANS

 

Rs in Millions

As on 31.03.2007

From Canara Bank

 

Cash Credit

[From The Hongkong & Sanghai Banking Corporation]

416.127

Term Loan

250.000

From Financial Company

 

Term Loan

295.119

Total

961.246

Unsecured Loans

 

Working Capital Loan From Kotak Mahindra Bank

300.000

Total

300.000

 

NOTES:

 

1. Working capital finance from Canara Bank is secured by First Charge by way of Hypothecation of stocks, receivables, existing Plant & Machinery and miscellaneous fixed assets and equitable mortgage of three factory premises and also by way of personal guarantee of managing director of the company.

 

2. Term Loan from financial company is secured by way of first charge in their favour on specific machineries.

 

3. Term Loan from The Hong Kong & Sanghai Banking Corporation Limited is secured by way of first charge in their favour on specific machineries.

 

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

V.K. Dhingra and Company

Chartered Accountants

Address :

l-E/15, Jhandewalan Extension, New Delhi, India

 

 

CAPITAL STRUCTURE

 

AS ON 31ST MARCH 2007

 

Authorised Capital :

No. of Shares

Type

Value

Amount

15,000,000

Equity Shares

Rs. 10/- each

Rs. 150.000 millions

 

Issued Capital :

No. of Shares

Type

Value

Amount

11998860

Equity Shares

Rs. 10/- each

Rs. 119.989 Millions

 

Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

11997720

Equity Shares

Rs. 10/- each

Rs. 119.977 Millions

 

 

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

119.977

119.977

120.000

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

1390.374

1168.480

973.700

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

1510.351

1288.457

1093.700

LOAN FUNDS

 

 

 

1] Secured Loans

961.246

619.988

473.300

2] Unsecured Loans

300.000

200.000

100.000

TOTAL BORROWING

1261.246

819.988

573.300

DEFERRED TAX LIABILITIES

88.255

67.156

0.000

 

 

 

 

TOTAL

2859.852

2175.601

1667.000

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

1649.385

975.387

942.100

Capital work-in-progress

226.157

394.993

42.800

 

 

 

 

INVESTMENT

0.000

0.000

0.000

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
990.920

855.545

929.300

 

Sundry Debtors
280.970

270.700

271.700

 

Cash & Bank Balances
76.586

71.035

78.300

 

Other Current Assets
0.412

0.313

0.000

 

Loans & Advances
266.606

206.745

157.900

Total Current Assets
1615.494

1404.338

1437.200

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
560.669

547.017

741.700

 

Provisions
70.515

67.422

48.600

Total Current Liabilities
631.184

614.439

790.300

Net Current Assets
984.310

789.899

646.900

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

15.322

35.200

 

 

 

 

TOTAL

2859.852

2175.601

1667.000

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

6470.926

5649.030

7245.500

Other Income

13.312

16.676

11.900

Total Income

6484.238

5665.706

7257.400

 

 

 

 

Profit/(Loss) Before Tax

400.077

350.923

289.900

Provision for Taxation

115.815

102.300

87.300

Profit/(Loss) After Tax

284.262

248.623

202.600

 

 

 

 

Earnings in Foreign Currency

0.297

0.000

NA

 

 

 

 

Imports :

 

 

 

 

Raw Materials

2472.649

1883.871

NA

 

Stores & Spares

14.193

18.697

NA

 

Others

295.866

231.215

NA

Total Imports

2782.708

2133.783

NA

 

 

 

 

Expenditures :

 

 

 

 

Material Cost

4591.825

4092.456

4532.400

 

Other Expenses

1143.482

955.703

2202.400

 

Financial Charges

79.832

37.442

28.200

 

Depreciation

275.209

243.347

223.100

 

Increase/(Decrease) in Finished Goods

[6.188]

[14.164]

[18.600]

Total Expenditure

6084.160

5314.784

6967.500

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

30.09.2007

31.12.2007

 Type

 1st Quarter

 2nd Quarter

 3rd Quarter

 Sales Turnover

 1577.000

 1570.500

 1602.300

 Other Income

 2.000

 3.500

 2.800

 Total Income

 1579.000

 1574.000

 1605.100

 Total Expenditure

 1385.200

 1377.200

 1396.100

 Operating Profit

 193.800

 196.800

 209.000

 Interest

 26.600

 28.000

 30.100

 Gross Profit

 167.200

 168.800

 178.900

 Depreciation

 73.800

 78.300

 77.400

 Tax

 30.800

 21.700

 34.200

 Reported PAT

 65.500

 64.300

 71.600

 

KEY RATIOS

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Debt-Equity Ratio

0.74

0.58

0.49

Long Term Debt-Equity Ratio

0.50

0.38

0.27

Current Ratio

1.44

1.44

1.34

TURNOVER RATIOS

 

 

 

Fixed Assets

2.66

2.93

3.73

Inventory

8.18

7.36

8.46

Debtors

27.37

24.23

25.97

Interest Cover Ratio

6.01

10.39

11.28

Operating Profit Margin(%)

10.00

9.61

7.47

Profit Before Interest And Tax Margin(%)

6.36

5.91

4.39

Cash Profit Margin(%)

7.33

7.39

5.88

Adjusted Net Profit Margin(%)

3.68

3.69

2.80

Return On Capital Employed(%)

19.73

20.85

21.77

Return On Net Worth(%)

19.87

20.38

20.00

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

AUTO INDUSTRY

 

The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to sustain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved tremendous amount of success in the recent years.  The well-developed Indian automotive industry ably fulfils this catalytic role by producing a wide variety of vehicles: passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps, scooters, motorcycles, mopeds, three wheelers, tractors etc.

 

The automotive sector is one of the core industries of the Indian economy, whose prospect is reflective of the economic resilience of the country. Continuous economic liberalization over the years by the government of India has resulted in making India as one of the prime business destination for many global automotive players. The automotive sector in India is growing at around 18 per cent per annum.

 

The Indian automotive industry started its new journey from 1991 with delicensing of the sector and subsequent opening up for 100 per cent FDI through automatic route. Since then almost all the global majors have set up their facilities in India taking the production of vehicle from 2 million in 1991 to 9.7 million in 2006 (nearly 7 per cent of global automobiles production and 2.4 per cent of four wheeler production).

 

The cumulative annual growth rate of production of the automotive industry from the year 2000-2001 to 2005-2006 was 17 per cent. The cumulative annual growth rate of exports during the period 2000-01 to 2005-06 was 32.92 per cent. The production of the automotive industry is expected to achieve a growth rate of over 20 per cent in 2006-07 and about 15 per cent in 2007-08. The export during the same period is expected to grow over 20 per cent.

 

 

Advantage India

 

India holds huge potential in the automobile sector including the automobile component sector owing to its technological, cost and manpower advantage. Further, India has a well-developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D centres. The country enjoys natural advantage and is among the lowest cost producers of steel in the world. The Indian automobile industry today boasts of being the largest three wheeler second largest two wheelers manufacturers in the world, world largest motorcycle manufacturer is in India, second largest tractor manufacturer in the world, fifth largest commercial vehicle manufacturer in the world and third largest car market in Asia.

 

Investment Opportunities

Establishing Research and Development Centres

Establishing Engineering Centres

Passenger Car Segment

Two Wheeler Segment

Heavy truck Segment

 

Production

 

One of the largest industries in India, automotive industry has been witnessing impressive growth during the last two decades. Abolition of licensing in 1991, permitting automatic approval and successive liberalization of the sector over the years have led to overall development of the automobile industry. The freeing of the industry from restrictive environment, on the one hand, helped it to restructure, absorb new technologies, align itself to global developments and realize its potential and on the other hand, this has significantly increased industry's contribution to overall industrial growth in the country. The automobile industry witnessed a growth of 19.35 percent in April- July 2006 when compared to April- July 2005.

 

Domestic Sales

 

Ø      The figures for April-January 2008 over April-January 2007 indicate that domestic sales of automobiles decelerated with a negative growth rate of (-) 4.82 percent.

 

Ø      The cumulative growth of the Passenger Vehicles segment during April-January 2008 was 12.79 percent. Passenger Cars grew by 12.75 percent, Multi Purpose Vehicles by 23.60 percent and Utility Vehicles by 8.95 percent in April-January 2008 compared to the same period last year.

 

Ø      In April- January 2008, the Commercial Vehicles segment grew by 2.98 percent over the same period in 2007. Light Commercial Vehicles recorded a growth of 13.84 percent; however, Medium & Heavy Commercial Vehicles witnessed a fall by 4.55 percent.

 

Ø      Three Wheelers sales fell by 8.54 percent with sales of Goods Carriers decreasing by 19.34 percent. Passenger Carriers also fell with a negative growth rate of 0.84 percent during the period.

 

Ø      Two Wheeler sales registered a negative growth of 8.04 percent during April-January 2008 over April-January 2007. Though Moped and Scooter segments grew by 18.23 percent and 14.68 percent respectively, Motorcycle and Electric Two Wheeler segments declined by 12.43 percent and 39.27 percent respectively.

 

Exports

 

Automobile Exports saw a growth rate at 18.15 percent during April- January 2008.

 

Exports of two wheelers segment grew by 27.07 percent, Commercial Vehicles exports grew by 17.88 percent and Passenger Vehicles exports at 4.89 percent in April-January 2008 over the same period last year and 3-Wheelers exports declined by 2.23 percent during this period.

 

Auto Components Industry

 

Surge in automobile industry since the nineties has led to robust growth of the auto component sector in the country. In tandem with the industry trends, the Indian component sector has shown great advances in recent years in terms of growth, spread, absorption of new technologies and flexibility. Indian auto component industry has seen major growth with the arrival of world vehicle manufacturers from Japan, Korea, US and Europe. Today, India is emerging as one of the key auto components center in Asia and is expected to play a significant role in the global automotive supply chain in the near future.

 

The auto parts industry has emerged as one of India's fastest growing manufacturing sectors and a globally competitive one. The auto components industry in India is dominated by around 500 key players, which contribute more than 85 percent of India's production. The industry has very deep forward and backward linkages with almost every other engineering manufacturing sector of the economy. It supports industries like automobiles, machine tools, steel, aluminum, rubber, plastics, electrical, electronics, forgings and machining.

 

India has also emerged as an outsourcing hub for auto parts for international companies such as Ford, General Motors, Daimler Chrysler, Fiat, Volkswagon, and Toyota.

 

India enjoys cost advantage with regard to castings and forgings. The manufacturing costs in India are 25 to 30 percent lower than its western counterparts. India's competitive advantage does not come from costs alone, but from its full service supply capability.

 

To encourage the smooth growth of the industry, the Government of India has allowed automatic approval for foreign equity investment up to 100 percent of manufacture of auto components. Further, the engineering export promotion council under the aegis of Ministry of Commerce and Industry, Government of India, over the years has been engaged in promoting exports of engineering goods including auto parts. Besides, the Automotive Component Manufacturers' Association of India (ACMA) represents the Indian auto component industry. The association is engaged in promoting trade, technology upgradation, quality enhancement, and collection and dissemination of information.

 

Exports of auto-components

 

India is being preferred as low cost country by various global OEMs for sourcing auto components for their worldwide production. As a result of this, Indian auto component industry's export scenario has changed. Now, 75 per cent of its export is directed to OEM and rest is feeding the after sales market overseas. while auto component exports grew by 40 per cent in 2004-05 to a level of US$ 1.4 billion, it registered a growth rate of 46 per cent in 2005-06 and crossed US$ 2 billion mark. A high growth of over 40 per cent is expected to materialize in 2006-07 as well. Total export was of the order of Rs. 6237 crore during the year 2004-05 and Rs. 9127 crore during the year 2005-06.

 

 

Foreign Direct Investment

 

The Indian auto industry with a turnover of US$ 12 billion and the auto parts industry with a turnover of US$3 billion offer excellent scope for FDI. Automatic approval for foreign equity investment upto 100 per cent of manufacture of  automobiles and component is permitted. The automobile industry is delicensed  Import of components is freely allowed  Automotive Mission Plan 2016.

 

The Government of India is drawing up an Automotive Mission Plan 2016 (AMP 2016) that aims to make India a global automotive hub. To maintain the high rate of growth of the automotive industry and to retain the attractiveness of Indian market and further enhancing the competitiveness of Indian companies, the Government has prepared the mentioned ten-year Automotive Mission Plan. The idea is to draw a futuristic plan of action with full participation of the stakeholders and to implement it in mission mode to meet the challenges coming in the way of growth of industry. Through this Automotive Mission Plan, Government also wants to provide a level playing field to the players in the sector and to lay a predictable future direction of growth to enable the manufacturers in making a more informed investment decision.

 

Major players in the automobile sector

 

Ø      Tata

Ø      Mahindra

Ø      Ashok Leyland

Ø      Bajaj

Ø      Hero Honda

Ø      Daimler Chrysler

Ø      Suzuki

Ø      Ford

Ø      Fiat

Ø      Hyundai

Ø      General Motors

Ø      Volvo

Ø      Yamaha

Ø      Mazda

 

HISTORY

 

Subros Limited, incorporated as Subros Private Limited in Feb.'85, was promoted by Ramesh Suri, Lalit Suri and Jayant Nanda. It turned into a public limited company in Oct.'85. It manufactures and supplies automotive airconditioning systems (AAS) and fan motor assemblies with the technology developed by its collaborators, Denso Corp (13% stake) and Suzuki Motors (13% stake), both from Japan.  

 
Denso Corporation (formerly Nippon Denso) provides technical information to implement projects and to manufacture automotive air-conditioning systems including swash-plate type compressors, clutches and other associated components for cars and light commercial vehicles. In addition to providing advice in regard to the design, manufacturing and production problems it also trains technical personnel of Subras. 

 
Subros caters to the OEM segment with clients such as Maruti (for its 800cc, 1000cc and 1300cc models, Gypsy and it's latest Wagon R and Alto), TELCO and PAL. Subros signed a MoU with Allied Signal Environment Catalysts (ASEC), US, for a joint venture to produce catalysts to be used in catalytic convertors in vehicles using unleaded petrol. 

 
In 1994-95, it signed a sub-agreement with IDBI for grant in respect of production of Non-CFC Gas AC systems. During 1996-97, the quality management system of the company was awarded BS EN ISO 9002 certification from the Bureau Veritas Quality International. 

 
Subros has the reputation of launching A.C. Systems for the latest models hitting the market and it's keeping the tradition now also. The Company is always looking for indigenisation of various components and development of modified A.C. System with latest technology for new model to be launched. Recently in 2000-01, it has undertaken conversion of conventional R-12 refrigerant based airconditioners to ecofriendly and non-ozone depleting R-134 refrigerant based A.C Systems for Maruthi's cars.  

 
Company has successfully commissioned a new plant at Noida. The second phase of the expansion is in progress which is financed through internal accruals and partly by way of term loans from financial institutions.  

 
It has entered into new technical assistance agreement with the Collaborators, Denso Corporation, Japan for transfer of technology for desigining and development of new AC system based on 10S model compressor and multiflow condensers. 

 
The company's various ongoing projects like Multi Flow Condensor, Pressure Die Casting and other import substituion projects are on stream as on 2000-01. 

 
The company has undertaken expansion cum modernisation plan to increase the capacity from 3lakh A.C. Units to 5 Lakh A.C. Units per annum during the year 2002-03. Further the company has initiated plan to set up its own design and development centre with the help of R&D Department and assistance from technical collaborators, Denso Corp. Japan and expects to complete it by end of this year. The company has also commenced commercial production of new generation 10S series compressor and started supplies to customers during the year 2002-03.

 

BUSINESS OPERATIONS 

 
The performance of the company has been very satisfactory for the year under review. The performance of the company is also discussed in Management Discussion and Analysis which forms part of the Directors' Report. 
 
The Indian Auto Industry particularly in the passenger car segment witnessed a growth of 18% during the year. As a result, your company recorded a turnover of Rs.7549.200 Millions during the year as against Rs.6572.200 Millions in the previous year. 

 
The company has sold 467478 nos. of A.C. systems as against 393071 nos. in the previous year. Despite cost pressures from the customers, the company has been able to improve its profit margins by successfully reducing cost on various fronts including Material Cost Reduction, Global Sourcing and Value Engineering. The company had been able to maintain its market leadership. 

 

EXPANSION AND FUTURE PROSPECTS 

 
The manufacturing facilities set up at Manesar (Haryana) and Chakan, Pune (Maharashtra) have commenced supplies to the customers, Maruti Udyog Limited and Tata Motors Limited respectively. Both the plants are fully operational. 
 
The company's manufacturing capacity now stand increased from 5,00,000 to 7,50,000 numbers A.C. systems per annum. 

 
The newly set up Design Centre is also fully operational and it contributed considerably in designing of new models. 
 

AWARDS AND RECOGNITIONS 

 
Your company has once again been recognised as, an excellent vendor by its customer, Maruti Udyog Limited, and was awarded consecutively for the third year in the following categories at their annual vendor conference: 
 
a) Outstanding Overall Excellence Award  

 
b) Trophy for Vendor Upgradation  

 
c) Trophy for Model Cost down  

 
d) Certificate for sincere efforts and superior performance in the field of Quality. 

 

FUTURE PLAN OF ACTION 

 
1. Wind Tunnel up-gradation to test higher capacity Vehicles. 

 
2. Development of R&D Proto Shop 

 
3. Development of Electronics and Electrical Lab 

 

MANAGEMENT DISCUSSION AND ANALYSIS 

 
Industry Outlook: 

 
Financial Year 2006-2007 has been a good year for Indian economy in general. The Indian auto industry went through consolidation phase with marginal growth. At the same time, the outlook is very bright with various auto majors are starting activities for capacity expansion and announcement of new model developments. This should result in substantial growth in the auto market from the year 2007-08. 

 
Many International companies have also announced their interest to start operations in India and to be part of 'India Growth Story'. 

 
At the same time, rising interest rate is expected to impact general sales of Auto market and also increase interest costs for the Industry. 

 
Opportunities and Threats: 

 
While the industry is expected to see major capacity additions in the coming years, the competition is also expected to substantially increase, as major OE suppliers have announced their interest to come to India. 

 
Further opportunities are expected in the auto component industry with auto majors announcing their plans to source components from India. 

 
With FTAs and reducing duty barriers, it will become essential for the Indian component suppliers to achieve global QCD (Quality, Cost, Delivery) levels. 

 
Subros Future Plan: 

 
The company has established new facilities in Pune (Maharashtra) and Manesar (Haryana). The installed capacity has been increased to 750,000 units per annum with addition of these new plants. The Company will pursue further expansion to 10,00,000 units subsequently. 

 
Setting up of R & D Centre has also been completed with installation of new equipments like Component Calorimeter etc. which will help the company for component/product development in India with the assistance from the collaborator, Denso Corporation, Japan. 

 
Internal Control Systems and their adequacy: 

 
The Company was able to implement Target based management system and budgetary controls. The Company's internal audit committee is also contributing to these internal control process with regular reviews on audit plans and compliance with accounting standards. 

 
Future Outlook: 

 
The Company is actively pursuing new business opportunities with its existing customers based on their new model launch plans from the year 2007 onwards. 

 
The Company has already received orders from Maruti Udyog Limited, Tata Motors, Mahindra & Mahindra for new models

 

FIXED ASSETS

 

 

AS PER WEBSITE

 

Subject was established in 1985 as a joint venture between the Suri Brothers, Denso Corporation, Japan and Suzuki Motor Corporation, Japan.


The company has grown from a capacity of 15,000 AC units in 1985 comprising of largely an assembly operation, into the largest and only integrated manufacturing unit in India for Auto Air Conditioning systems. The company has the capability to manufacture compressors, condensers, heat exchangers and all the connecting elements that are required to complete the AC Loop.


Subject has three plants in Noida, one in Manesar and one in Pune. It also has a R&D centre and Tool room in Noida. The manufacturing capacity has grown to a level of 7,50,000 AC units per annum and there is a plan to go to a level of 1,000,000 per annum by 2008.

 

Awards                                            

                                                        

 

 

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.39.97

UK Pound

1

Rs.79.78

Euro

1

Rs.62.60

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

8

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

9

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

8

--RESERVES

1~10

8

--CREDIT LINES

1~10

7

--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

 

68

 

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

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions