MIRA
INFORM REPORT
|
Report Date : |
13.12.2008 |
IDENTIFICATION
DETAILS
|
Name : |
TUBE INVESTMENT OF INDIA LIMITED |
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Registered Office : |
"Dare House", 234 N S C Bose Road, Chennai - 600
001, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
09.09.1949 |
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Com. Reg. No.: |
18-2905 |
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CIN No.: [Company
Identification No.] |
L35921TN1956PTC002905 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHET00142C |
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PAN No.: [Permanent
Account No.] |
AAACT1249H |
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Legal Form : |
It is a public
limited liability company. The
company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of
cycle components such as tubes, chains and metal strips. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 36000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
The company is a
part of Rs. 42000 millions Chennai based, Murugappa Group. Subject is a well
established and reputed company having satisfactory track. General financial position of the company
is satisfactory. Business is
active. Payments are usually correct
and as per commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered Office : |
“Dare House”, 234 N S C
Bose Road Chennai – 600 001, India |
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Tel. No.: |
91-44-42177770 |
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Fax No.: |
91-44-42110404 |
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E-Mail : |
customercare@ticyclesindia.com marketingstrips@tii.murugappa.com powertransmission@tidc.murugappa.com businessdev-timf@tii.murugappa.com |
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Website : |
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Factory : |
Cycles Division: TI Cycles of India Post Bag No. 5, Ambattur, Chennai 600 053 Tel: 91-44-4209 3434 Fax: 91-44-4209 3345 TI Cycles of India Plot No. E - 8, MIDC, Malegaon, Sinnar, Nashik District 422 103 Tel : 91-2551-230472 Fax: 91-2551-230183 TI Cycles of India A-32, Phase II Extension, Hoisery Complex, Opposite NEPZ Dadri Road,
Gautam Budh Nagar, Noida 201 305 Tel : 91-120-2462201/203 Fax : 91-120-2462397 TI Cycles of India Jadavendrapanja Avenue, Durgapur 713 211 Tel: 91-343-255 3522/255 3988 Engineering Division: Tube Products of India Avadi, Chennai 600 054 Tel : 91-44 -4229 1999 Fax : 91-44- 4229 1990 Tube Products of India Shirwal Post, Khandala Taluk, Satara District 412 801 Tel : 91-2169 -244080 Fax : 91-2169 -244087 Tube Produds of India A-16 & 17, Industrial Focal Point, Phase VI, SAS Nagar, Mohali 160
051 Tel: 91-172 -4510209 Tube Products of India Ambattur, Chennai 600 053 Telefax : 91-44 - 4229 2900 Metal Formed Products Division: TIDC India Ambattur, Chennai 600 053 Tel : 91-44 - 4223 5555 Fax: 91-44- 4223 5406 TIDC India Kazipally Village, Plot No.1, Jinnaram Mandal, Medak District 502 319 Tel : 91-8458 - 277240 Fax : 91-8458 - 277241 TI Metal Forming Chennai - Tiruvallur High Road, Tiruninravur RS PO 602 024 Tel: 91-44 -26390194 / 26390437/ 2639 0504 Fax: 91-44 - 2639 0634 TI Metal Forming 80/81, SIDCO Industrial Estate, Kakkalur, Thiruvallur 602 003 Ph. 91-44 -27667104 TI Metal Forming Bawal Plant, Plot Nos. 302 – 329, Bawal Investate, Riwari District
123501 Tel : 91-1284 - 260707, 260708 Fax: 91-1284 - 260426 TI Meta! Forming Plot No.501 - B & C, Halol Industrial Area / Estate, Block No. 32
& 34, Village Dunia Taluka Halol, District Panchmahals, Baroda 389 350 Tel : 91-2676 - 224647 Fax: 91-2676- 224035 TIDC India Ganganouli, Laskar – 247 663, Uttarakhand Tel. No.:- 91-1332-271295 TIDC India Post Bag No. 11, Amabattur, Chennai – 600 053 Tel. No.:- 91-40-4223 5555 Fax No.:- 91-44-4223 5406 |
DIRECTORS
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Name : |
Mr. M A
Alagappan |
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Designation : |
Chairman |
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Name : |
Mr. M M Murugappan |
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Designation : |
Vice Chairman |
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Name : |
Mr. Sumit Banerjee |
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Designation : |
Managing Director |
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Name : |
Mr. Adhiraj Sarin |
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Designation : |
Managing Director |
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Name : |
Mr. Amal Ganguli |
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Designation : |
Director |
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Name : |
Mr. D Jayavarthanavelu |
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Designation : |
Director |
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Name : |
Mr. Pradeep Mallick |
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Designation : |
Director |
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Name : |
Mr. Ram V Tyagarajan |
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Designation : |
Director |
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Name : |
Mr. S Sandilya |
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Designation : |
Director |
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Name : |
Mr. R Srinivasan |
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Designation : |
Director |
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Name : |
Mr. Tapan Mitra |
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Designation : |
Director |
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Name : |
Mr. L. Ramkumar |
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Designation : |
Managing Director |
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Name : |
Mr. N. Srinivasan |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. S Suresh |
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Designation : |
Company Secretary
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Name : |
Mr. Ashutosh
Sharma |
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Designation : |
Vice President –
Engg And Project (IT Metal Forming) |
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Qualification : |
Bsc. Mech (24) |
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Name : |
Mr.
Balasubramanian K |
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Designation : |
Chief Financial
Officer |
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Qualification : |
Bsc, Aca (30) |
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Name : |
Mr. Chidambaram
M. |
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Designation : |
General Manager –
Manufacturing, It Metal Forming |
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Qualification : |
B.E (24) |
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Name : |
Mr. Diwakar M R |
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Designation : |
Vice President
(Taxation) |
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Qualification : |
B.Com (Hons) (36) |
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Name : |
Mr. Gopala Pillai
T M |
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Designation : |
Vice President –
TQM |
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Qualification : |
DME, PG Dip In
Met And Ele (37) |
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Name : |
Mr. Kasushik S V |
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Designation : |
Vice President –
IT |
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Qualification : |
B.Com, PGDBM (30) |
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Name : |
Mr.
KRISHNAMACHARI D |
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Designation : |
VICE President –
Project (Tube Products Of India) |
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Qualification : |
B.Sc, M.E.-Mech,
Engg (27) |
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Name : |
Mr. Nambiar K R |
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Designation : |
General Manager –
Exports (Ti Cycles Of India) |
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Qualification : |
B.Com |
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Name : |
Mr. Narayanan R |
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Designation : |
Vice President –
Commercial (Tube Products Of India) |
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Qualification : |
B.Sc, ACA (23) |
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Name : |
Mr. Sajiv Menon |
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Designation : |
Sr. Vice
President (IBP) |
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Qualification : |
B.Tech, PGDM (26) |
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Name : |
Mr. S.
Vaidyanathan |
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Designation : |
Sr. Vice
President – HR |
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Qualification : |
B.Sc, PGDPM-IR
(33) |
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Name : |
Mr. Anand Kumar
MC |
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Designation : |
Senior Vice
President |
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Qualification : |
M.A (Economies )
Pgdm-Iimc |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
AS ON 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters Group |
87112830 |
47.14 |
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Non Promoter
Group |
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Institutional
Investors |
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Mutual Funds and UTI |
11303903 |
6.12 |
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Banks and Financials Institutions, Insurance Companies |
8482699 |
4.59 |
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Foreign Institutional Investors |
3093889 |
1.67 |
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Others |
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Private Corporate Bodies |
22084636 |
11.95 |
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Indian Public |
35046959 |
18.97 |
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NRI/OCB |
903004 |
0.49 |
|
Bank of new York (GDR Holders Depository) |
16752080 |
9.07 |
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Total |
184780000 |
100.00 |
As on 30.09.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Individuals / HUF |
17471215 |
10.40 |
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Bodies Corporate |
72141615 |
42.94 |
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Any Other |
5800500 |
3.45 |
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Mutual Funds / UTI |
11303903 |
6.73 |
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Financial Institutions / Banks |
896830 |
0.53 |
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Insurance Companies |
7584529 |
4.51 |
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Foreign Institutional Investors |
3083589 |
1.84 |
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Non –
Institutions : |
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Bodies Corporate |
13506232 |
8.04 |
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Individuals : |
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Individual shareholders holding nominal share capital upto Rs. 0.100
million |
24866089 |
14.80 |
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Individual shareholders holding nominal share capital in excess of Rs.
0.100 million |
10354865 |
6.16 |
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Non Resident Indians |
789470 |
0.47 |
|
Trust |
190551 |
0.11 |
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Clearing Members |
31362 |
0.02 |
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Shares held by custodians and against which depository receipts have
been issued |
16759250 |
-- |
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TOTAL |
184780000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of cycle
components such as tubes, chains and metal strips. |
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Products : |
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Exports : |
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Countries : |
Australia,
Germany, Italy, Russia, UK and USA |
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Imports : |
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Countries : |
Germany, Japan,
Korea and Singapore |
PRODUCTION STATUS AS ON 31.03.2008
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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|
ERW / CDW Tubes |
Tonnes |
211815 |
102489 |
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(162850) |
(97868) |
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Cold Rolled
Strips |
Tonnes |
100120 |
68226 |
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(100120) |
(64010) |
GENERAL
INFORMATION
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Customers : |
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No. of Employees : |
3762 |
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Bankers : |
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Facilities : |
Note : (1) Term Loans from Banks are secured by a pari-passu first charge on the immovable properties and movable properties (excluding current assets) of the Company. (2) Cash Credit and Other Borrowings from Banks, which includes foreign currency borrowings of Rs. 46.83 Cr. (Previous Year Rs.Nil), are secured by a first charge on inventories and book debts and pari-passu second charge on immovable properties. |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Deloitte Haskins
& Sells Chartered
Accountants |
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Memberships : |
Confederation of
Indian Industry |
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Associates : |
TI Diamond Chain Limited Tichain
Investments Private Limited Cholamandalam
Investment and Finance Company Limited Presmet Private
Limited |
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Subsidiaries : |
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Joint Venture |
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CAPITAL STRUCTURE
AS ON 31.03.2008
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
215000000 |
Equity shares |
Rs. 2/-
each |
Rs. 430.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
184780000 |
Equity shares |
Rs. 2/-
each |
Rs. 369.500 millions |
NOTE:
(a) 16,78,910 shares of Rs. 16 each (Before Sub division of Shares) were issued for consideration other than cash.
(b) 2,73,11,792 shares of Rs. 10 each (Before Sub division of Shares) were issued as bonus shares by capitalisation of Reserves.
(c) 10,620 shares of Rs. 10 each (Before Sub division of Shares) were issued to the erstwhile share holders of TIDC India Limited on account of Amalgamation (Refer Note 5 of Schedule 18).
(2) The above is after adjustment for the cancellation of 61,50,386 shares of Rs. 10 each (Before Sub division of Shares) which were bought back at a price of Rs. 100 per share from the share holders pursuant to the offer
for buy-bac' k of shares.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
369.500 |
369.500 |
369.500 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
6810.200 |
6189.000 |
4951.500 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
7179.700 |
6558.500 |
5321.000 |
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|
LOAN FUNDS |
|
|
|
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|
1] Secured Loans |
2298.200 |
1388.100 |
1718.500 |
|
|
2] Unsecured Loans |
976.800 |
676.400 |
724.500 |
|
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TOTAL BORROWING |
3275.000 |
2064.500 |
2443.000 |
|
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DEFERRED TAX LIABILITIES |
426.400 |
418.300 |
415.000 |
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TOTAL |
10881.100 |
9041.300 |
8179.000 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
4614.800 |
3642.400 |
3015.700 |
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Capital work-in-progress |
573.100 |
1055.400 |
804.900 |
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INVESTMENT |
3169.500 |
1905.500 |
2358.600 |
|
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2270.400
|
2058.000 |
1657.200 |
|
|
Sundry Debtors |
2879.400
|
2772.300 |
2063.500 |
|
|
Cash & Bank Balances |
180.200
|
172.500 |
919.100 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
1050.300
|
832.000 |
619.200 |
|
Total
Current Assets |
6380.300
|
5834.800 |
5259.000 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
3547.900
|
2968.200 |
3006.400 |
|
|
Provisions |
308.700
|
428.600 |
252.800 |
|
Total
Current Liabilities |
3856.600
|
3396.800 |
3259.200 |
|
|
Net Current Assets |
2523.700
|
2438.000 |
1999.800 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
10881.100 |
9041.300 |
8179.000 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
17623.300 |
16150.400 |
14609.400 |
|
|
Other Income |
259.600 |
927.400 |
1340.700 |
|
|
Total Income |
17882.900 |
17077.800 |
15950.100 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
834.400 |
1953.100 |
2456.300 |
|
|
Provision for Taxation |
269.400 |
395.300 |
627.000 |
|
|
Profit/(Loss) After Tax |
565.000 |
1557.800 |
1829.300 |
|
|
|
|
|
|
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Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
1548.200 |
1465.700 |
1521.200 |
|
Total Earnings |
1548.200 |
1465.700 |
1521.200 |
|
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|
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|
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Imports : |
|
|
|
|
|
|
Raw Materials |
713.700 |
599.400 |
958.200 |
|
|
Stores & Spares |
39.000 |
86.000 |
49.100 |
|
|
Finished Goods |
191.700 |
353.600 |
|
|
|
Capital Goods |
466.400 |
178.600 |
419.100 |
|
|
Others |
NA |
NA |
104.000 |
|
Total Imports |
1410.800 |
1217.600 |
1530.400 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Raw Material Consumed |
11057.400 |
9767.200 |
8889.200 |
|
|
Increase/(Decrease) in Finished Goods |
(113.800) |
(138.200) |
(218.700) |
|
|
Salaries, Wages, Bonus, etc. |
0.000 |
0.000 |
973.100 |
|
|
Interest |
181.500 |
112.900 |
0.000 |
|
|
Depreciation & Amortization |
531.500 |
503.900 |
485.600 |
|
|
Other Expenditure |
5391.900 |
4878.900 |
3364.600 |
|
Total Expenditure |
17048.500 |
15124.700 |
13493.800 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 |
30.09.2008 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales Turnover |
|
5381.600 |
6357.600 |
|
Other Income |
|
364.500 |
262.000 |
|
Total Income |
|
5746.100 |
6619.600 |
|
Total Expenditure |
|
4976.600 |
5837.300 |
|
Operating Profit |
|
769.500 |
782.300 |
|
Interest |
|
58.400 |
72.400 |
|
Gross Profit |
|
711.100 |
709.900 |
|
Depreciation |
|
144.900 |
146.300 |
|
Tax |
|
83.300 |
142.900 |
|
Reported PAT |
|
482.900 |
420.700 |
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity
Ratio |
0.39 |
0.38 |
0.48 |
|
Long
Term Debt-Equity Ratio |
0.19 |
0.18 |
0.27 |
|
Current
Ratio |
1.10 |
1.10 |
1.11 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
2.41 |
2.59 |
2.66 |
|
Inventory |
8.90 |
9.48 |
10.04 |
|
Debtors |
6.82 |
7.29 |
6.41 |
|
Interest
Cover Ratio |
5.60 |
11.93 |
11.51 |
|
Operating
Profit Margin(%) |
8.03 |
10.50 |
12.44 |
|
Profit
Before Interest And Tax Margin(%) |
5.27 |
7.64 |
9.37 |
|
Cash
Profit Margin(%) |
5.69 |
8.40 |
9.26 |
|
Adjusted
Net Profit Margin(%) |
2.93 |
5.54 |
6.19 |
|
Return
On Capital Employed(%) |
10.65 |
16.43 |
20.44 |
|
Return
On Net Worth(%) |
8.23 |
16.44 |
20.01 |
LOCAL AGENCY
FURTHER INFORMATION
History
Subject, the flagship company of Murugappa Group, was
founded under the name TI Cycles of India in 1949. It is the largest integrated
manufacturer of cycles and the market leader in special cycles with 30% market
share. Its cycles are marketed under the BSA brand name. Further the company
has its presence in Engineering and Metal Formed Products and also in Insurance
through its subsidiary. The company also manufactures precision steel tubes and
strips, car doorframes, automotive and industrial chains.
The company is the market leader in precision tubes with 61% market share and
in rolled formed car doorframes with 57% market share. The company is also the
market leader in automotive chain with 35% market share.
Three of its divisions hold the prestigious ISO 9002 certification and the
export-oriented steel tubes unit is armed with QS 9000 certification.
Cholamandalm MS General Insurance Company Limited is a subsidiary of the
company.
A group company, Tube Products of India and TI Miller which manufactured cycle
lamps and dynamo sets was merged with the company in 1959 and 1984
respectively. TII set up a cold-rolled formed metal sections unit at
Nemilicherry near Chennai, which was augmented in 1990-91 by the acquisition of
Press Metal Corporation of India (a BIFR company). Later it acquired
Sathavahana Chains, a sick unit, making bicycles and light-duty chains. Further
to finance a major expansion-cum-modernisation programme, it came out with a
GDR issue.
A new plant at Shirwal, Maharashtra, to manufacture ERW and CDW tubes was
commissioned and for the export market, it set up a 100% EOU at Avadi, Madras,
for the manufacture of ERW and CDW tubes. The roll form division commissioned
the two door frame projects, one near Chennai and another in Haryana for supply
of door frames to be used in some of passanger cars made by Hyundai Motors and
Maruti Udyog.
TI International Holdings(a wholly-owned subsidiary of the TI Group Plc, UK)
has sold its entire holding of 0.992 million equity shares in TII to the
Murugappa group. It's holding represents 4.03% of the equity in the company and
is a former joint venture partner of the company. The company has launched 48
new models during 2001-02 and also successfully implemented new model of
operations by replacing manufacturing with outsourcing at Nashik.
In 2002-03 the company made a buy back programme of 25% of its equity at Rs.100
per share. Subsequent to this the share capital stands reduced to Rs.18.47
millions The company's Bawal unit in Haryana and Chennai Plant received the
Qs-9000 certification and ISO-14001 certification in 2002-03. Since majority of
components were sourced from Ludhiana in North India, the company set up an
manufacturing unit at Noida and also at the same time it can cater to the growing
northern market.
During September 2004 the company issued bonus equity shares to its share
holders in the ratio 1:1. In 2003-04 the company commissioned the Noida plant
and also a painting plant at Ambattur benchmarked with the international
standards. Further the company has established a new plant in Halol, Gujarat
for the supply of doorframes to General Motors.
The Company has merged TIDC India Limited (TIDC), a subsidiary of the company
with itself with effect from 1st April 2004. According to the Scheme of Merger
the company has issued 4 equity shares of Rs.10/- each of TII for every 5
equity shares of Rs.10/-each held by the shareholders in TIDC.
The company has increased the installed capacity of ERW/CDW tubes by 15350
tonnes during 2004-05 and with this expansion the total installed capacity of
ERW/CDW tubes has increased to 142200 Tonnes. During 2004-05 the company has
entered into a Memorandum of Understanding with the Government of Orissa for
setting up a steel plant with a capacity of 1.2 million tonnes.
During December 2005 the company has divested its entire shareholding in Parry
Agro Industries Limited to other Murugappa Group Entities for a total
consideration of Rs. 210.20 Million.
Review of
Performance:
The Financial Year 2007-08 was a difficult year on account of unprecedented
increase in the price of steel, the base raw material for all their products.
Though the Company was able to achieve a reasonable growth in revenue, the
profitability was significantly impacted. The total revenue grew by 9% from Rs.
16150.400 millions to Rs. 17623.300 millions, on account of higher sales in all
product lines, barring precision steel tubes. The operating profit before tax
was lower at Rs. 775.200 millions compared with Rs. 1236.200 millions achieved
last year.
The bicycles business consolidated its position this year and improved market
share. Turnover increased to Rs. 5770.700 millions, registering a growth of
13%. The off-take of bicycles by the trade segment was 16% higher than the
previous year leading to improved profitability. The volume of institutional
sales remained almost at the same level as the previous year.Considering the
business opportunity and the need of the commuting public, the Company is committed
to making an entry into the E-bike segment (electrically powered bicycles,
scooters etc).
The Engineering business grew to Rs. 8155.100 millions, registering a growth of
5%, due to higher sales of Cold Rolled Steel Strips. The efforts to enlarge the
user industry base helped offset, to a certain extent, the decline in sales of
cold drawn welded tubes. The exorbitant increase in steel price affected the
operating profit of the division the most. Despite the best efforts, the
increase in input cost could not be passed on to the customers in full.
Integration and modernisation of manufacturing facilities, cost reduction
initiatives and productivity improvement measures are being pursued actively to
improve margins. The expansion of capacity at the International Business Plant
has been completed. The sharp and sudden appreciation of the Indian Rupee
impacted the realisation and profits, despite a fair portion of the exports
having been hedged at better rates.
The metal formed products business grew to Rs. 3697.500 millions, registering a
growth of 14%. Higher sales across all product lines viz., automotive and
industrial chains, car doorframes, fine blanked products and roll formed
railway wagon sections made this possible. Despite the slump in the two wheeler
industry, the sale of automotive chains was higher by 8% due to increased
off-take by OEMs for the replacement market. The off-take of car doorframes,
fine blanked products and roll formed sections grew on account of strong
demand. However, the profitability in this business also was under pressure due
to steep increase in steel price. The export of chains was higher by 6% on
account of improved quality and marketing efforts, despite the appreciation of
the Rupee.
Subsidiaries:
Cholamandalam MS General Insurance Company Ltd. (CMSGICL) has achieved a Gross
Written Premium of Rs. 5223.400 millions. (Previous year Rs.3117.300 millions)
recording a growth of 67% over previous year. During the year, this subsidiary
achieved a PAT of Rs.72.400 millions (Previous year Rs.12.400 millions).
The operations of Tubular Precision Products (Suzhou) Co. Limited, a wholly
owned subsidiary in China, resulted in a loss of RMB 8,655,892 (Rs.49.500
millions) for the year ended 31st December 2007. This includes pre-operative
expenses of the previous year amounting to RMB 2,176,525 (Rs.12.500
millions).This company has started commercial production and samples have been
submitted to leading auto and auto component manufacturers in China.
Director Profile
Mr. M M Murugappan,
Chairman
Mr. M M Murugappan (52 years) holds a Bachelors degree in Chemical
Engineering. He is also a Master of Science in Chemical Engineering from the
University of Michigan, USA. He joined the Board in March 2002. He is currently
Chairman of Carborundum Universal Limited. He is also on the Board of various
companies including Mahindra and Mahindra Limited and Wendt India Limited.
Mr. L Ramkumar,
Managing Director
Mr. L Ramkumar (52 years) is a Cost Accountant and has a Post Graduate
Diploma in Management from Indian
Institute of Management, Ahmedabad. He joined the Board in February
2008.
Mr. Amal Ganguli,
Non-Executive Director
Mr. Amal Ganguli (68 years) is a Fellow of The Institute of Chartered
Accountants of England and Wales and The Institute of Chartered Accountants of
India. He joined the Board in June 2003. He was formerly Chairman and Senior
Partner, PriceWaterhouse Coopers, India. He is on the Board of various
companies including Maruti Suzuki India Limited and Tata Communications
Limited.
Dr. D
Jayavarthanavelu, Non-Executive Director
Dr. D Jayavarthanavelu (67 years) is a graduate in Engineering. He also
holds B.S. Textiles from Philadelphia College of Textiles and Science, USA. He
joined the Board in July 1997. He is currently Chairman and Managing Director
of Lakshmi Machine Works Limited. He is also on the Board of various companies
including Lakshmi Electrical Control Systems Limited and Lakshmi Mills Limited.
Mr. Pradeep
Mallick, Non-Executive Director
Mr. Pradeep Mallick (65 years) holds a Bachelors degree in Engineering
from Indian Institute of Technology, Madras and a diploma in Business
Management (UK). He is a Fellow of the Institution of Engineering and
Technology, London. He joined the Board in June 2003. He was formerly Managing
Director of Wartsila India Limited. He is on the Board of various companies
including Blue Star Limited and Avaya GlobalConnect Limited.
Mr. S Sandilya,
Non-Executive Director
Mr. S Sandilya (60 years) is a Commerce Graduate with a Post Graduate
Diploma in Management from Indian Institute of Management, Ahmedabad. He joined
the Board in January, 2005. He is currently Group Chairman, Eicher Group. He is
on the Board of various companies including Rane Brake Lining Limited and GMR
Industries Limited.
Mr. N Srinivasan,
Non-Executive Director
Mr N Srinivasan (50 years) is a Chartered Accountant and Company
Secretary. He joined the Board in January, 2007. He is on the Board of
Cholamandalam DBS Finance Limited and Cholamandalam MS General Insurance
Company Limited.
Mr. R Srinivasan,
Non-Executive Director
Mr. R Srinivasan (66 years) is a Graduate in Mechanical Engineering. He
joined the Board in June 2004. He was formerly Managing Director of Widia India
Limited. He is on the Board of various companies including Sundram Fasteners
Limited and Cholamandalam MS General Insurance Company Limited.
Mr. Tapan Mitra,
Non-Executive Director
Mr. Tapan Mitra (68 years) is a Fellow of Institute of Chartered
Accountants of India and holds a Masters degree in Business Administration from
the University of Geneva. He joined the Board in October 2000. He was formerly
Managing Director of Indian Aluminium Company Limited. He is currently Member
of West Bengal State Planning
Board. He is also on the Board of Thermax Limited and Essel Propack
Limited.
MANAGEMENT DISCUSSION AND ANALYSIS
OVERVIEW:
The Indian economy has been growing at over 8% for the past four years. During the year, however, the economy witnessed
high level of inflation, soaring commodity and oil prices, volatility in
financial markets and concerns on global slow-down. The economy was also
saddled with sub-prime concerns which emanated in the US but carried a global
impact. The price of steel, the base raw material for many industries,
witnessed unbridled and unprecedented increases threatening the very viability
of these industries. With a view to
control the soaring inflation, the Government has come out with several
measures, the impact of which is yet to be realised in full. The Rupee appreciated nearly 13% in
the year cutting into the margins of exporters. Though the Government has
introduced various measures to off-set the impact of an appreciating Rupee,
export margins continue to be under stress.
Viewed against this back drop, the Company's sales for the year grew at 9% to
Rs. 17623.300 millions but the Profit Before Tax (PBT) dipped considerably to
Rs. 834.400 millions. The consolidated revenue for the year increased by 23% to
Rs. 23061.100 millions with a PBT of Rs. 1095.500 millions
The highlights of the year are as
follows:
* Tubular Precision
Products (Suzhou) Co. Limited , the Company's tube manufacturing subsidiary at
China, commenced commercial
production.
* Significant growth in revenue from tubular components.
* Thrust on brand through retail outlets gained momentum with 33
stores.
* Growth in export of chains by 6%, despite Rupee appreciation.
* The Company was chosen as the sole supplier of doorframes for Nano'
cars of Tata Motors Limited.
* Cholamandalam MS General Insurance Co Limited, the Company's general
insurance subsidiary's gross written premium shot up by 67%.
BUSINESS REVIEW:
BICYCLES:
Industry Scenario:
The bicycle industry in India has been largely static with an annual demand of
around 10 M bicycles, excluding the share of the unorganised sector. In the
organised sector, the bulk of the volume is catered to by three major players.
The Company's bicycle division, TI Cycles of India (TICI) is one of the major
players having a significant market share, especially in Southern India. Aided
by the appreciating Rupee, the year witnessed an increase in bicycle imports,
especially in the kids segment.
While the high volume standards segment' has been declining, the specials
segment', including Mountain Terrain Bikes (MTB) and kids bicycles have been
growing. A few State Governments continue to support the need for mobility
among children from economically weaker sections of the society and this
segment constitutes a fair share of the standard segment'. With changing
customer preferences and higher income levels, customers increasingly favour
lighter and trendier bikes. A niche market for high end bikes is also
developing in metros and major cities.
The industry has been characterised by low margins across the supply chain
which are further squeezed by the steep increase in the price of steel.
Review of Performance:
TICI performed creditably during the year. The volume grew 11% and the turnover
grew 13%. TICI maintained its focus on high service levels helping it to gain
market share. Simultaneously, receivables were maintained at healthy
levels.
During the year, a new range of high end bikes and fitness products were
launched in select markets and the response was encouraging.
Having pioneered the concept of exclusive outlets for their products, they grew
the number of outlets to 33 and the spread of the outlets into the larger Tier
II cities is under way.
TICI is also re-organising its distribution model so as to focus on
distributors and key dealers and carry out secondary distribution through
them.
With a view to adding value to the business, they are planning a foray into
Electric bikes (E-bikes). These bikes would have a significant advantage by way
of lower running costs over fuel powered motorcycles / scooters. Being
environment friendly, these bikes have an added advantage.
ENGINEERING:
TI's Presence:
Tube Products of India (TPI), the Engineering division of the Company,
manufactures precision steel tubes viz., Cold Drawn Welded tubes (CDW) and
Electric Resistance Welded tubes (ERW). TPI also has a regional presence in
cold rolled steel strips. TPI primarily caters to the requirements of the
automotive, boiler, bicycles and general engineering industries.
Industry Scenario:
The Indian automotive industry has been growing at a significant pace over the
last few years. During the year under review too, the industry grew overall, but
the growth of various segments within the industry was uneven. The passenger
car and LCV segments grew, while two wheeler and medium and heavy commercial
vehicle segments declined. The decline in the two wheeler segment was steep.
High interest rates and risk aversion led banks and other finance providers to
withdraw from two-wheeler financing.
Availability of
preowned cars at affordable prices and aggressive pricing of entry level cars
are also impacting two-wheeler sales.
The run away increase in steel prices has affected the profitability of most
users of steel. The Central Government is taking steps to bring some stability
to steel prices, but the exponential growth in global demand has positioned the
steel industry in a sellers' market.
India has also emerged as an auto component manufacturing hub and this offers
good prospects for the business.
The market for precision steel tubes is growing. Integrated steel manufacturers
have increased their presence in this market with a view to enhance their value
chain. Imports are also on the increase due to appreciation of Rupee. Overall,
the competition in this industry has become so intense that the increase in the
price of steel could not be passed on to the customers in full.
There were instances of product substitution arising out of improved quality in
ERW tubes and cost considerations associated with seamless tubes.
The market for cold rolled steel strips is witnessing healthy growth with
strong demand coming from user industries such as fine blanking, general
engineering and infrastructure.
Review of Performance:
During the year under review, the turnover increased by 12% as volume grew 5%
in cold rolled steel strips. The volume of tubular components grew
substantially, albeit on a low base. But for the appreciation of the Rupee and
competitive pressures in the market, the realisation could have been much
better. The increase in the top line, however, did not result in an improvement
in the bottom line due to reluctance on the part of the customers to absorb the
increase in input cost.
Simultaneously with the efforts to increase prices, there is considerable focus
on improving internal efficiencies and margins through improvement in
technology, product and process improvements and innovations. The manufacturing
facilities at the main plant at Avadi and the International Business plant,
also at Avadi, have been integrated, enabling better utilisation of assets and
improvement in productivity levels. Despite the pressure on margins, keeping
the long term health of the business in mind, modernisation of manufacturing
facilities, across plants, is being undertaken to improve performance.
Quality and service levels have been improved and quality levels (ppm) in
certain product lines are comparable with international benchmarks.
With a view to broad basing the user industry, TPI has re-established its
presence in ERW tubes also and recorded a higher market share. The ERW tube
pre-dominantly caters to the bicycle and general engineering industries.
The overseas subsidiary at China commenced operations towards the end of the
third quarter. The subsidiary is in the process of supplying samples and
getting its products and processes validated and accepted by customers.
The lead time for
obtaining customer accreditation in the automotive industry is high and the
company is confident of achieving some progress in the coming financial year.
METAL FORMED PRODUCTS:
TI's Presence:
Automotive and industrial chains, fine blanked products, roll-formed car
doorframes and cold rolled formed sections for railway wagons constitute the
Metal Formed products of the Company. The Company is one of the two major
players manufacturing chains in India.
Industry Scenario:
The two-wheeler segment of the auto industry declined 10% over the previous
year, mainly because of non-availability of finance at affordable terms.
However, the demand for automotive chains was healthy, driven by
off-take in the after sales market. In recent years, the motorcycle manufacturers
themselves have started addressing the after sales market directly.
The production of passenger cars has been continuously increasing to meet the
growing demand. The emergence of India as an auto components hub has also
helped the growth of this industry. The Company's prospects in the doorframe
business is directly associated with the success of the models to which it
caters. The number of models being introduced is on the increase, providing a
variety of options to the customer. This will, however, result in the volumes
per model declining and greater variety coming into play and adds to the risk
of a model not being successful. While there are only two roll-formed doorframe
manufacturers in India, the industry has started experiencing overseas
competition.
The Government of India has embarked on a programme of increasing the freight
carried by the Railways. Various measures have been taken to increase the
availability of wagons, and also, the payload of the wagons.
Review of Performance:
The turnover in this business was higher by 14%. Higher volumes in auto and
industrial chains, doorframes and a manifold increase in sections for railway
wagons contributed to this. The profitability in this business too was affected
due to the lag in passing on input costs to customers.
Despite the slowdown in the two-wheeler segment, the sale of automotive chains
was higher due to the increased offtake by OEM's for the replacement market.
The growth in industrial chains was also significant.
The export market for industrial chains, mainly used in agriculture /
farm equipment, continued to be favourable and exports grew by 6%. The steep
appreciation of the Rupee impacted the profitability, despite some of the
exports having been hedged at much higher levels. The focus in this business is
on improving presence in the American and European markets.
The year under review saw mixed fortunes for car doorframes. Also, in some
models investments have been made in establishing manufacturing facilities, but
the models are yet to be launched. The move to de-risk revenues and broad base
the user industry has yielded good results and offers greater scope for growth.
FINANCIAL REVIEW:
Steel Price:
The price of basic grade of HR coil which was Rs.28,963/- per ton on 1st April
2007 increased to Rs. 35,150/- per ton on 31st March 2008, an increase of 21%.
Such a steep increase in price of steel has not been witnessed in the past few
years and the trend continues in the current year too. Prices realisable from
their customers for various products could not go up correspondingly.
Consequently, the margins of all players in the auto industry are under
pressure. Since the Company has a large exposure to the auto industry, this
phenomenon affected the Company's profitability.
Capital Expenditure:
The total capital expenditure incurred by the Company was Rs.1088.300 millions. The major investments were carried out
in expanding facilities for manufacture of tubes, chains and establishing
facilities for manufacture of car doorframes for certain new models. The
Company continues with the policy of providing additional depreciation for
certain assets which in the opinion of the management may have a shorter useful
life.
Interest Cost:
The financial markets were unfavourable, with the year marked by restrictions
on debt capital flows and increase in interest rates. Adverse market
conditions, soaring steel prices and delays in receipt of money from customers
resulted in a steep increase in working capital during the year.
This, together with the higher long term borrowings for capital
expenditure resulted in the interest cost increasing by Rs.68.600
millions.
The Company used a judicious mix of foreign currency borrowings to reduce the
impact of the high rates, but the average borrowing cost increased from 6.96%
last year to 8.38% in the current year.
Forward Contracts:
The Company has entered into various forward contracts to hedge the foreign
exchange fluctuation risk arising out of exports and repayment of long term
foreign currency borrowings.
The forward contracts relating to anticipated exports during 2008-09 are
regarded as Cash Flow hedges of a highly probable forecast nature'. In line
with the method prescribed in Accounting Standard 30 (AS 30), these contracts
have been identified with the customers based on the monthly forecast. These
contracts have also been marked-to-market and the net loss amounting to Rs.
06.500 millions, arising out of unassigned contracts, has been charged to the
Profit and Loss Account. The loss of Rs. 30.300 millions arising out of
assigned contracts has been accounted under the Hedge Accounting Reserve'. The
actual gain / loss will be recognised in the profit and loss account on the
actual occurrence of these transactions.
Investments in Financial Services:
The Company has investments in Cholamandalam MS General Insurance Company Ltd.
(74%) and Cholamandalam DBS Finance Ltd (30.93%).
The investment in Cholamandalam DBS Finance Limited (CDFL) as of 31st March 2007 was Rs. 557.700 millions with a
market value of Rs. 1283.600 millions. The dividend income during the year was
Rs. 47.000 millions giving a post tax yield of 8.4%. During the year, the
Company subscribed to its portion of the rights issue aggregating to Rs.
616.300 millions. The aggregate investment in CDFL as at 31st March 2008 is Rs.
1174.000 millions, carrying a market value of Rs. 2601.000 millions. Apart from
this, the Company holds 44,01,975 warrants carrying a right to convert them
into one equity share per warrant between April 2008 and April 2009 at a price
to be announced by CDFL, but not exceeding Rs. 275 per share. CDFL grew by 216%
in terms of revenue and 172% in terms of profit through increased presence in
retail financing.
The investment in Cholamandalam MS General Insurance Company Limited (CMSGICL)
amounts to Rs. 1050.500 millions. CMSGICL achieved a Gross Written Premium of
Rs.5223.400 millions and a Profit before tax of Rs. 105.400 millions. With this
performance, the cumulative losses made by the subsidiary have been completely
wiped out. The market share of private players in the Indian general insurance
industry is increasing and is poised for greater growth.
TII Shareholding Trust:
Arising out of the amalgamation of TIDC India Ltd (TIDC) with the Company, the
TII Shareholding Trust was vested with 1,01,51,870 shares of the Company. Out
of this, 57,50,000 shares were sold during the year @ Rs.57.50 per share. The
remaining shares are to be sold on or before 14th December 2008. The profit on
sale of own shares amounting to Rs. 287.500 millions has been credited to the
Securities Premium account.
Consolidated Financials:
The consolidated revenue for the year was Rs. 23061.100 millions, representing
a growth of 23% and the consolidated profit before tax was Rs. 1095.500
millions.
FIXED ASSETS
Ø
Land
Ø
Building
Ø
Plant And
Machinery
Ø
Railway Siding
Ø
Furniture And
Fixtures
Ø
Vehicles
CONTINGENT LIABILITIES AS ON 31.03.2008
|
Particulars |
Rs. In millions |
|
|
|
|
a) Estimated amount of contracts remaining to be executed on capital account and not provided for (including capital commitment) |
397.200 |
|
|
|
|
b) Disputed Income-Tax demands from A.Y 1993-94 to 2004-05 under appeal / remand pending before various appellate/ assessing authorities against which Rs. 273.300 millions (Previous Year Rs.251.800 millions) has been deposited. The Management is of the opinion that the above demands are not sustainable. |
322.300 |
|
|
|
|
Disputed Excise demand amounting to Rs. 12.200 millions plus penalty of Rs. 12.200 millions pertaining to financial years 2000-01 to 2005-06 under appeal pending before the Appellate Tribunal. The same has not been deposited. The Management is of the opinion that the demand is arbitrary and the same is not sustainable. |
24.400 |
|
|
|
|
d) Cases decided in favour of the Company against which the department has gone on appeal |
|
|
1.Income Tax |
336.000 |
|
2.Excise ° |
4.400 |
|
e) Bills Drawn on Customers and Discounted with Banks , |
27.400 |
|
|
|
|
Outstanding Export obligation under EPCG/Advance License Scheme. The Company is confident of meeting its obligations under the Schemes |
870.500 |
The company is in trade terms with :
- Ace Industrial Gases (Private) Limited
- Amrith Metal Industries
- Anu Extrusions Private Limited
- Cute Cycles Private Limited
- Duro Forge (Private) Limited
- Futuro Components (Private) Limited
- Hartex Tube Private Limited
- Hyderabad Ammonia and Chemicals Private
Limited
- K. Dhandapani and Company Limited
- Karamchand Rubber Industries Private
Limited
- Kum-Chem Pretreatments Private Limited
- Madras Swastik Engineers Private
Limited
- Maharashtra Classic Paints Chennai
Private Limited
- Meenakshi Engineering Works
- Mid Field Steels Private Limited
- Omax Bikes Limited
- Paper Pack Packaging Industries
- Rajindra Industries
- Sai Industries
- Srinivasa Cartons and Containers
Private Limited
- Sundar Shyam Industries
- Surindera Cycles Limited
- Thirumala Press Components (Private)
Limited
- Tushar Engineers
- Tushavi Poly Sacks
- Vishivkarma Industries (Private)
Limited
- Western Pressed Components
List of Promoters
Belonging to the Murugappa Group :
Ø BID Parry (India)
Limited
Ø Godavari
Fertilisers and Chemicals Limited
Ø Parry Chemicals
Limited
Ø Parry Enterprises
India Limited
Ø Parry Agro
Industries Limited
Ø New Ambadi Estates
Private Limited
Ø Ambadi Enterprises
Limited
Ø Carborundum Universal
Limited
Ø Cholamandalam DBS
Finance Limited
Ø The Coromandel
Engineering Company Limited
Ø AMM Arunachalam
and Sons Private Limited
Ø AMM Vellayan Sons
Private Limited
Ø MM Muthiah Sons
Private Limited
Ø Murugappa and Sons
Ø Kadamane Estates
Company
Ø Yelnoorkhan Group
Estates
Ø AMM Foundation
Ø AMM Medical
Foundation
Ø AMM Educational
Foundation
Ø MM Muthiah
Research Foundation
Ø AR Lakshmi Achi
Trust
Ø Presmet Private
Limited
Ø Til Shareholding
Trust
Ø M V Murugappan and
Family
Ø M V Subbiah and
Family
Ø M A Alagappan and
Family
Ø A Vellayan and
Family
Ø M M Murugappan and
Family
Ø M M Venkatachalam
and Family
Ø A Venkatachalam
and Family
Ø S Vellayan and
Family
Ø Arun Alagappan and
Family
Ø M A M Arunachalam
and Family
The company's fixed
assets of important value include leasehold land, freehold land, buildings,
plant and machinery and equipment, plant and machinery and equipment given on
lease, furniture and fixtures and vehicles.
Press Releases:
27th April, 2007
The Board of Directors of Tube Investments of India Limited (TII) met today to approve the audited financial results for the quarter and year ended 31st March, 2007.
In Q4, the sales were Rs. 4682.8 Millions, as against Rs.3842 Millions for the same period last year. The net profit for the quarter was at Rs.194.1 Millions (previous year 906.8 Millions), which includes one time income of Rs. 3.9 Millions (Previous year Rs.894 Millions). The Board of Directors of the Company have recommended a dividend of Rs.1.50 per equity share of face value Rs.2/-, for the year.
The turnover for the year was Rs. 17618.4 millions, which is 11% higher than that of the previous year. The increase came through higher volumes in all businesses. However, due to the increase in the cost of inputs and reduction in prices of certain products this did not translate into a corresponding increase in profits. The profit before tax (PBT) for the year was at Rs.1953.1 millions as against a PBT of Rs. 2456.3 millions in the year 2005-06. The profit for the year also includes a one time income of Rs. 717 millions mainly on account of the sale of a part of the long term investments (Previous year Rs. 1105 millions). The Profit after tax was Rs.1557.8 millions (previous year Rs.1829.3 millions)
Turnover in the bicycles business crossed the Rs. 5000 millions mark for the first time and touched Rs. 5110 millions against Rs.4660 millions in the previous year, representing a growth of 9.7%. This was possible due to the higher volumes achieved in the trade segment through new retail initiative under the brand “BSA Go”. During the year, a range of fitness equipment was launched under the brand “BSA Workout” and the initial feedback has been encouraging.
The engineering business grew in turnover from Rs.9950 millions to Rs.11040 millions with growth in all major product lines namely strips, tubes, automotive and industrial chains and car doorframes. The supply of cold rolled formed sections for the Indian Railways commenced during the year. The performance on the export front was encouraging in industrial chains but was lower in steel strips and tubes. The domestic industry continued to be characterised by intense competition, availability of alternatives through cheaper imports, particularly in tubes, higher input cost, mainly steel which could not be passed on, even in part, to the customers. As a consequence, margins were lower and the operating profit for the year was at Rs.1380 millions against Rs.1550 millions last year. Aggressive cost reduction measures, reduction in rejections/wastage and improvement in yields continue to be main focus areas.
The company has plans to set up a plant at Uttarkhand to manufacture industrial and automotive chains and another plant at Pune to manufacture car doorframes. The tube plant being established by the wholly owned overseas subsidiary at Suzhou, China is expected to start commercial production from July’07.
About Tube
Investments of India Limited
Tube Investments of India consists of TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with well-known brands - Hercules, BSA and Philips. TII is the market leader in precision steel tubes and roll-formed car doorframes in India. Also, being the second largest motor cycle chain manufacturer in India, TII is a major supplier to the Indian auto / auto- component industry.
About the
Murugappa Group:
Headquartered in Chennai, the $1.6 billion Murugappa Group is one of India’s leading business conglomerates, which fosters an environment of professionalism for its strong workforce of 28,000 employees. The group has 29 registered companies, which are market leaders in diverse areas of business viz. engineering, abrasives, finance, general insurance, sanitary ware, cycles, sugar, farm inputs, fertilizers, plantations, bio products and nutraceuticals. The Group has manufacturing units in 12 states.
The Group has forged strong joint venture alliances with leading international companies like Roca of Spain, Cargill of Geneva, Cerdak of South Africa, Jingri Diamond Industrial Company of China, DBS Bank of Singapore, Mitsui Sumitomo of Japan and Groupe Chimique Tunisien of Tunisia and has consolidated its status as one of the fastest growing diversified business houses in India.
31st October, 2008
Financial Results Of Tube Investments Of India Limited
The Board of Directors of Tube Investments of India Limited (TI) met today and approved the un-audited financial results for the quarter ended 30th September, 2008.
During the quarter sales were at Rs. 6357.600 millions, as against Rs.4246.400 millions during the same period last year. The operating profit (EBIDTA) increased to Rs. 545.800 millions (Rs. 322.000 millions). The net profit for the quarter was at Rs. 420.700 millions (Rs. 157.200 millions). The sales for the first half of the year were at Rs. 11739.200 millions (Rs. 8578.600 millions) and the net profit was at Rs.903.600 millions (Rs.298.100 millions).
Mr. Ramkumar, Managing Director said, “The improved profitability of all businesses during second quarter and first half of the year has been due to focus on cost reduction, product mix and substantially improving customer satisfaction.”
TI’s engineering business, comprising of precision steel strips, tubes and tubular components, increased sales by 43% on the back of strong demand for its products. The volatility in steel price still remains a cause for concern. While export of cold-rolled strips increased, export of tubes dropped marginally.
The sale of bicycles continued to be robust and growth in volume was 33% over the corresponding quarter in the previous year. The growth in value terms is even higher at 63%, primarily due to increase in market share in “Special Bicycles”, where TI is the market leader. The improved performance is reflective of the success of TI’s retail efforts in the recent times. The number of ‘BSA Go’, a one-stop premium store, has increased to 40, providing the customer with a superior buying experience. TI has plans to increase its presence in fitness segment and to expand to E-bikes, a fast growing two-wheeler segment.
The revenue from Metal Formed Products grew by 49%. The growth came from higher sales in all its product segments viz., automotive and industrial chains, car doorframes, fine blanked products and roll formed sections for railway wagons. The export of industrial chains increased significantly during the quarter. TI has set up an automotive chain manufacturing facility in Uttarakhand to service its key customers in the region. TI has clear plans to enhance its presence through broad basing the product range and user industry.
Mr. L Ramkumar, Managing Director said, “Despite signs of a global slowdown, TI is confident of sustaining its current level of operations and improving upon its productivity. However, the present liquidity crunch and volatile exchange fluctuation throw up new challenges for the second half of the year in the form of working capital and finance cost management.”
About Tube Investments of India
Tube Investments of India consists of TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with well-known brands - Hercules, BSA and Philips. TII is the market leader in precision steel tubes and roll-formed car doorframes in India. Also, being the second largest motor cycle chain manufacturer in India, TII is a major supplier to the Indian auto / auto- component industry.
About the Murugappa Group:
Headquartered in Chennai, the Rs.9582 Crore (USD 2.4 billion) Murugappa Group is India’s leading business conglomerate. Market leaders in diverse areas of business including Engineering, Abrasives, Finance, General Insurance, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Bio-products and Nutraceuticals, its 29 limited companies have manufacturing facilities spread across 13 states in India. The organisation fosters an environment of professionalism and has a workforce of over 30,,000 employees. The Group which has forged strong joint venture alliances with leading international companies like DBS Bank, Mitsui Sumitomo, Cargill, China Engineering and Exploration Bureau and Groupe Chimique Tunisien, has consolidated its status as one of the fastest growing diversified business houses in India.
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.48.71 |
|
UK Pound |
1 |
Rs.72.85 |
|
Euro |
1 |
Rs.64.70 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/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 |
|