MIRA
INFORM REPORT
|
Report Date : |
07.02.2008 |
IDENTIFICATION
DETAILS
|
Name : |
SHRIRAM TRANSPORT FINANCE COMPANY LIMITED |
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Registered Office : |
123, Angappa Naicken Street, Chennai-600001, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
30.06.1979 |
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Com. Reg. No.: |
7874 |
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CIN No.: [Company
Identification No.] |
U65191TN1979PLC007874 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHES00900E |
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Legal Form : |
Public Limited Liability Company. The Company’s shares are listed on
the Stock Exchanges. |
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Line of Business : |
Subject is engaged in business of Hire Purchase, Leasing and
Hypothecation Loan activities. |
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 43400000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and reputed company having satisfactory
track. Directors are reported as experienced and respectable businessmen.
Trade relations are reported as fair. 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
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Registered Office : |
123, Angappa Naicken Street, Chennai-600001, Tamilnadu, India |
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Tel. No.: |
91-44-25341431 |
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E-mail : |
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Website: |
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Head Office : |
Wockhardt Towers, West Wing, C-2,G-Block, Bandra-Kurla Complex, Bandra - (East), Mumbai-400051, Maharashtra |
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Tel. No.: |
91-22 4095 9595 |
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Fax No.: |
91-22 4095 9597 |
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Branches : |
Located at : Ø Adoni Ø Agra Ø Ahmedabad Ø Ahmeonagar Ø Ajmer Ø Akola Ø Aligarh Ø Allahabad Ø Alwar Ø Amalapuram Ø Ambikapur Ø Amravat! Ø Amritsar Ø Anand Ø Ananthpur Ø Angamaly Ø Angul Ø Asan5ol Ø Athur Ø Aurangabad Ø Bagalkot Ø Bangalore Ø Baramati Ø Bareily Ø Barmer Ø Baroda Ø Basavakalayan Ø Bath In Da Ø Begusarai Ø Behrampur Ø Belgaum Ø Bellary Ø Bhagalpur Ø Bharatpur Ø Bharuch Ø Bhavnagar Ø Bhilai Ø Bhilwara Ø Bhimavaram Ø Bhopal Ø Bhuvaneshwar Ø Bidar Ø Bijapur Ø Bikaner Ø Bilaspur Ø Bokaro Ø Burdwan Ø Burhanpur Ø Calicut Ø Chadikhole Ø Chamaraja Nagar Ø Chandigarh Ø Chandrapur Ø Channarayapatna Ø Chennai Ø Chikkodi Ø Chikmagalore Ø Chinchwad Ø Chindwara Ø Chiplun Ø Chitradurga Ø Chittorgarh Ø Coimbatore Ø Cuddapah Ø Cuttak Ø Dausa Ø Davangere Ø Dheradhun Ø Delhi Ø Dhanbad Ø Dharampuri Ø Dharwad Ø Dhulia Ø Dind1gul Ø Durgapur Ø Earnakulam Ø Erode Ø Faizabad Ø Faridabad Ø Farrukhabad Ø Gadag Ø Gajuwakka Ø Gandhidham Ø Gangavathi Ø Gaziabad Ø Ganganagar Ø Goa Ø Godhara Ø Gond1a Ø Gorakhpur Ø Gudiwada Ø Gudur Ø Gulbarga Ø Guna Ø Guntur Ø Gurgaon Ø Gwalior Ø Haldwani Ø Haranppanhalli Ø Hassan Ø Haveri Ø Himmatnagar Ø Hindupur Ø Hissar Ø Hosadurga Ø Hospet Ø Hosur Ø Hubli Ø Humnabad Ø Hunsur Ø Iikal Ø Indira Nagar Ø Indore Ø J P Nagar Ø Jabalpur Ø Jagadamba Ø Jagdalpur Ø Jaipur Ø Jaisalmer Ø Jalandhar Ø Jalgoan Ø Jamnagar Ø Jamshedpur Ø Jhunjhun Ø Jodhpur Ø Junagadh Ø Kaithal Ø Kakinada Ø Kanchipuram Ø Kankavli Ø Kannur Ø Kanpur Ø Karaikudi Ø Karim Nagar Ø Karnal Ø Karur Ø Kasargode Ø Katni Ø Khamgoan Ø Khammam Ø Kharagpur Ø Khatedhan Ø Kolar Ø Kolhapur Ø Kolkata Ø Koppal Ø Korba Ø Kota Ø Kotputli Ø Kottayam Ø Nandyal Ø Nashik Ø Navi Mumbai Ø Navsar! Ø Nellore Ø Nizamabad Ø Ongale Ø Palanpur Ø Palghat Ø Pandarpur Ø Paramakudi Ø Parbhani Ø Parvathipuram Ø Pathanamthitta Ø Pathankot Ø Patna Ø Pollachi Ø Pondicherry Ø Proddatur Ø Pudukottai Ø Pune Ø Puttur Ø Kukatpally
Yulluh Ø Kumbakonam Ø Kumta Ø Kunnamkulam Ø Kurnool Ø L B Nagar Ø Lakhimpur Ø Latur Ø Lingsur Ø Lucknow Ø Ludhiana Ø Madanapalli Ø Madikeri Ø Madiwala Ø Madura! Ø Malegaon Ø Mancherial Ø Mandapeta Ø Mandya Ø Mangalore Ø Manjer1 Ø Margoa Ø Mehboob Nagar Ø Mehsana Ø Mettupalayam Ø Miryalaguda Ø Moga Ø Moradabad Ø Mudabidri Ø Mumbai Ø Muzzaffarpur Ø Mysore Ø Nagaur Ø Nagercoil Ø Nagpur Ø Nanded Ø Kaibaklilly Ø Raichur Ø Raigarh Ø Raipur Ø Rajahmundary Ø Rajkot Ø Rajnandgaon Ø Ranchi Ø Ratlam Ø Ratnagiri Ø Renukot Ø Rewa Ø Rohatak Ø Rourkela Ø Sadulpur Ø Sagar Ø Sagara Ø Sahibabad Ø Sakaleshpura Ø Salem Ø Sambalpur Ø Sandur Ø Sangli Ø Saraipali Ø Sindhanur Ø Sirohi Ø Sirs! Ø S1vakashi Ø Srikakulam Ø Sulthanbathery Ø Surat Ø Surendranagar Ø Swaimadhopur Ø Tambaram Ø Tdasarahalu Ø Thalassery Ø Thane Ø Thanjavur Ø Then Ø Tiptur Ø Tirunelveli Ø Tirupati Ø Tiruvannamalai Ø Tiruvarur Ø Trichur Ø Trichy Ø Trivandrum Ø Tumkur Ø Tuticorin Ø Udaipur Ø Udupi Ø Vapi Ø Varanasi Ø Vellore Ø Vuayanagar Ø Vuaywada Ø Villupuram Ø Vizag Ø Vizianagaram Ø Wada Ø Waidhan Ø Warangal Ø Wardhaman Nagar Ø Yadgir Ø Yaiviunanagar Ø Yeshwanthpur |
DIRECTORS
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Name : |
Mr. R Sridhar |
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Designation : |
Managing Director |
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Name : |
Mr. Arun Duggai |
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Designation : |
Chairman (Independent Director) |
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Name : |
Mr. Umesh G Ravikrishnan |
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Designation : |
Director |
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Name : |
Mr. Mukund M Chitale |
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Designation : |
Independent Director |
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Name : |
Mr. S Venkatakrishnan |
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Designation : |
Director |
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Name : |
Mr. Mayashankar Verma |
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Designation : |
Independent Director |
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Name : |
Mr. S Ranaganathan |
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Designation : |
Director |
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Name : |
Mr. Adit Jain |
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Designation : |
Independent Director |
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Name : |
Mr. K R C Sekhar |
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Designation : |
Director |
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Address : |
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Date of Birth/Age : |
Mr. T S Sethurathnam |
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Qualification : |
Director |
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Name : |
Mr. Ravinder Behi |
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Designation : |
Director |
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Name : |
Puneet Bhatia |
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Designation : |
Director |
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Name : |
Mr. Sanjay Kukreja |
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Designation : |
Director |
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Name : |
Mr. Ranvir Dewan |
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Designation : |
Director |
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Name : |
Mr. Sumatiprasad M Bafna |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. K Prakash |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Corporate Bodies |
56,408,872 |
36.10 |
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Banks |
2,700,866 |
1.73 |
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Clearing Members |
2,091,602 |
1.34 |
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FII |
23,634,984 |
15.13 |
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Mutual Funds |
763,721 |
0.49 |
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NRI |
346,786 |
0.22 |
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Overseas Corporate Bodies |
50 |
0.00 |
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Foreign Companies |
34,332,378 |
21.97 |
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Public |
31,551,504 |
20.19 |
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Trust |
4,423,167 |
2.83 |
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Unit Trust of India |
1,650 |
0.00 |
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TOTAL
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156,255,580 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Subject is engaged in business of Hire Purchase, Leasing and
Hypothecation Loan activities. |
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Products : |
v Finance Charges
and Interest Receipts v Minimum
Guaranteed Compensation Charges v Lease Rentals |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed
Capacity |
Units
Generated [net
of Captive Consumption] |
Units
Sold |
|
Power out of Windmills |
kwh |
22430 |
360133398 |
360133398 |
GENERAL
INFORMATION
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No. of Employees : |
5000 |
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Bankers : |
v
Bank of Baroda v
Bank of Ceylon v
Bank of India v
Bank of Maharashtra v
Canara Bank v
Centurion Bank of Punjab v
City Union Bank v
Corporation Bank v
Dena Bank v
Development Credit Bank v
Dhanlaxmi Bank v
DBS v
HDFC Bank v
HSBC v
ICICI Bank v
IDBI Bank v
Indian Overseas Bank v
ING Vysya Bank v
Kotak Mahindra Bank v
Oriental Bank of Commerce v
Punjab & Sind Bank v
Punjab National Bank v
Standard Chartered Bank v
State Bank of Hyderabad v
State Bank of Mauritius v
State Bank of Travancore v
The Lakshmi Vilas Bank v
UCO Bank v
Union Bank Of India v
United Bank of India v
United Western Bank v
Axis Bank v Yes Bank |
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Facilities : |
Secured Loans : (Rs.
In millions)
Unsecured Loans
:
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Ø
G. D. Apte & Company Chartered Accountants Ø
Batliboi and
Company Chartered Accountant |
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Associates: |
Ø
Shriram Asset Management Limited Ø
Ashley Transport Services Limited |
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Subsidiaries: |
Shriram Powergen Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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335000000 |
Equity Shares |
Rs.10/- each |
Rs.3350.000 millions |
|
20000000 |
Preference Shares |
Rs.100/- each |
Rs.2000.000 millions |
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Total |
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Rs.5350.000
millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
184158716 |
Equity Shares |
Rs.10/- each |
Rs. 1841.587
Millions |
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Add : Shares Forfeiture 48000 Equity Shares of Rs. 10/- each [Rs. 5/- each paid up forfeited] |
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Rs. 0.240
Million |
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Total |
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Rs. 1841.827 Millions |
Note:
Of the above:
i) Nil (March 31,
2006 : 6,06,33,350) equity shares of Rs.10/- each has been issued to the equity
shareholder of amalgamating company Shriram Investments Limited and 1,86,45,886
(March 31, 2006 - Nil) equity shares of Rs.10/- has been issued to the equity
shareholders of amalgmating company Shriram Overseas Finance Limited, pursuant
to the scheme of amalgamation sanctioned by the Hon'ble High Court of Madras. .
ii) 1,57,250
(March 31, 2006 : Nil) equity shares of Rs.10/- each has been issued under
Employee stock option scheme.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
1841.827 |
1505.646 |
907.350 |
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3]Share Capital Suspense |
0.000 |
186.459 |
0.000 |
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4]Optionally Convertible Warrants |
77.280 |
199.203 |
10.381 |
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5]Employees Stock Options Outstanding |
122.738 |
35.349 |
0.000 |
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6] Reserves & Surplus |
8822.280 |
6462.318 |
1316.828 |
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7] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
10864.125 |
8388.975 |
2234.559 |
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LOAN FUNDS |
|
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|
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1] Secured Loans |
63389.060 |
37430.389 |
13000.059 |
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2] Unsecured Loans |
23995.276 |
6530.483 |
1611.593 |
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TOTAL BORROWING |
87384.336 |
43960.872 |
14611.652 |
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DEFERRED TAX LIABILITIES |
866.198 |
1336.885 |
534.998 |
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TOTAL |
99114.659 |
53686.732 |
17381.209 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1275.962 |
1568.190 |
489.088 |
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Capital work-in-progress |
398.691 |
0.000 |
0.000 |
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INVESTMENT |
2245.716 |
91.542 |
40.749 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
100287.725
|
55771.466
|
17671.559 |
|
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Loans & Advances |
4142.759
|
4754.956
|
1872.886 |
|
Total
Current Assets |
104430.484
|
60526.422
|
19544.445 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
7707.118
|
6115.186
|
2018.801 |
|
|
Provisions |
1530.449
|
2388.353
|
678.715 |
|
Total
Current Liabilities |
9237.567
|
8503.539
|
2697.516 |
|
|
Net Current Assets |
95192.917
|
52022.883
|
16846.929 |
|
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MISCELLANEOUS EXPENSES |
1.373 |
4.117 |
4.443 |
|
|
|
|
|
|
|
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TOTAL |
99114.659 |
53686.732 |
17381.209 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
13962.968 |
8984.334 |
3433.515 |
|
|
Other Income |
192.242 |
102.349 |
24.665 |
|
|
Total Income |
14155.210 |
9086.683 |
3458.180 |
|
|
|
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|
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Profit/(Loss) Before Tax |
2892.242 |
2161.687 |
778.689 |
|
|
Provision for Taxation |
988.271 |
745.277 |
285.451 |
|
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Profit/(Loss) After Tax |
1903.971 |
1416.410 |
493.238 |
|
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|
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Expenditures : |
|
|
|
|
|
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Administrative Expenses |
0.000 |
1831.330 |
777.486 |
|
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Interest |
7239.218 |
4150.593 |
1627.964 |
|
|
Personal Expenses |
718.730 |
0.000 |
0.000 |
|
|
Operating and other expenses |
1538.848 |
0.000 |
0.000 |
|
|
Impairment loss/[reversal] on fixed assets
and stock |
[29.672] |
0.000 |
0.000 |
|
|
Share and debenture issue expenses written
off |
2.744 |
0.000 |
0.000 |
|
|
Provisions and write offs |
1664.915 |
0.000 |
0.000 |
|
|
Depreciation & Amortization |
128.185 |
97.899 |
47.166 |
|
|
Other Expenditure |
0.000 |
845.174 |
226.875 |
|
Total Expenditure |
11262.968 |
6924.996 |
2679.491 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
|
Sales Turnover |
4635.400
|
5603.200
|
6382.600
|
|
Other Income |
76.000
|
92.200
|
225.400
|
|
Total Income |
4711.400
|
5695.400
|
6608.000
|
|
Total Expenditure |
1198.000
|
1301.200
|
1260.600
|
|
Operating Profit |
3513.400
|
4394.200
|
5347.400
|
|
Interest |
2306.300
|
2869.200
|
3681.200
|
|
Gross Profit |
1207.100
|
1525.000
|
1666.200
|
|
Depreciation |
42.400
|
54.400
|
48.500
|
|
Tax |
397.700
|
511.300
|
546.700
|
|
Reported PAT |
767.000
|
959.300
|
1071.000
|
KEY
RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
PAT / Total Income |
(%) |
13.45
|
15.58 |
14.26 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
20.71
|
24.06 |
22.67 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
2.73
|
3.48 |
3.88 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.26
|
0.25 |
0.35 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
8.89
|
6.25 |
7.74 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
11.30
|
7.11 |
7.24 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Incorporated on 30 Jun.'79,
Shriram Transport Finance Corporation (STFCL) was promoted by R Thyagarajan, A
V S Raja, and T Jayaraman. The promoters have interests in other companies including
Shriram Investments, Medispan, Shriram Chits, etc. Subject is Chaired by G V
Raman as Chairman and R V Sridhar as Managing Director. In Mar.'95, it came out
with a rights issue of 64.95 lac equity shares aggregating Rs 6.49 cr. The
issue was to augment long-term resources and working capital and to enhance the
leverage ability of the company.
Subject is pre-dominantly engaged in commercial truck financing. It also has
the unique distinction of having a vast fund base under the lease portfolio management
scheme under which several corporate entities including other finance companies
invest their funds. Some of the prominent corporates who have invested in this
scheme include the Industrial Development Bank of India (IDBI), ITC Classic,
Videocon, Nagarjuna Finance, etc.
Subject has recently shifted its headquarters from Madras to Bombay to provide
a greater thrust to its operations in the western parts of India.
Director’s Profile
:
Arun Duggal –
Chairman
Arun Duggal is an International Business Advisor. He was with Bank of
America for 26 years from various locations including New York, San Francisco,
Tokyo, Hong Kong, London, Manila and New Delhi. He is on the Board of Directors
of Jubilant Energy Limited.Canada.Patni Computers, Fidelity Fund Management,
LNG Petronet, Matrix Laboratories, Manipal AcuNova, Naukri.com, Hertz (India),
Shriram Properties Limited and Arun was also on the Board of Governors of the
National Institute of Bank Management and erstwhile Chairman of the American
Chamber of Commerce, India. He is a Senior Advisor to Transparency
International and is on the Board of Centre for Civil Society.
R Sridhar-
Managing Director
R. Sridhar is a fellow member of the Institute of Chartered Accountants
of India. He joined Shriram in 1985 and
was later promoted as President of the Company, in 1994. He was coopted
as an Additional Director and appointed as the Managing Director of the Company
in September 2000.
Sridhar has over two decades of experience in the financial service sector,
especially in commercial vehicle financing. He also holds the directorship of
'Shriram Holding (Madras) Private Limited, Shriram Asset Management Company
Limited, Ceylico Shriram Capital Management Services Company Private Limited,
Shriram Chits (Maharastra) Limited and Integrated Enterprises (India) Limited.
Adit Jain -
Director
Adit Jain is the Managing Director of IMA India, a Company he
established in 1994. He chairs the Company's CEO and CFO programmes, which are
retainer based forums and have over 700 clients from across the country.
He speaks regularly at conferences and has been called upon to depose as
an Expert Witness in Parliamentary Committee Proceedings. Adit is a
Non-Executive Director on the Board of Sanmar Group, International Asset Reconstruction
Company, and PR Pundit. Previously, Adit worked as Vice President and Head of
M&A at Lazard,
India; and Strategy Director with Stag Holdings Pic, UK. He has degrees
in Mechanical Engineering and Business
Administration.
S Venkatakrishnan –
Director
S. Venkatkrishnan is an IA & AS retired. He has served at senior
positions in the Finance Audit & Accounts department of the government and
other public undertakings. He has been serving in the Company as an advisor for
over a decade. He is also on the Board of Shriram Industrial Holding Private
Limited, Shriram Exports Private Limited, Hymvathi Enterprises Private Limited,
Bhilahari Enterprises Private Limited, Charukeshi Investments Private Limited,
Galda Finance Limited, RKP Investments Private Limited, Rambal Properties
Private Limited, Shriram City Union Finance Limited, Road Safety Club Private
Limited, and Ranjani Enterprises Private Limited.
Mayashankar Verma -
Director
Mayashanker Verma, former chairman State Bank of India, is a career banker
with nearly five decades of experience in the Indian financial sector. During
this period he has held some of the most critical positions in it's operating
as well as regulatory regimes, important amongst which were Advisor to the
Reserve Bank of India, Chairman I.D.B.I Bank, and Chairman Telecom Regulatory
Authority Of India. Presently, he serves as the Director on the Board of
several Public and Private sector companies and is also the Vice- Presiden to
the governing body of the National Council of Applied Economic Research.
Mukund Manohar Chitale -
Director
Mukund Manohar Chitale is a practicing Chartered Accountant. He was
President of the Institute of Chartered Accountants of India during 1997-98 and
a member of "International Auditing Practices Committee" of the
International Federation of Accountants from January 1998 to June 2000. He was
nominated by Securities and Exchange Board of India as a Public Representative
Director on the Stock Exchange, Mumbai from October 1998 to July 2000. Mukund has
also been a lecturer in the Accountancy Department at some renowned colleges,
and has written articles and presented papers at various seminars and
conferences.
Puneet Bhatia –
Director
Puneet Bhatia is the Managing Director of TPG New bridge. Prior to
joining New bridge in April 2002, he was the Chief Executive of the Private
Equity Group for GE Capital India. As Chief Executive, he created and handled a
portfolio of almost a dozen companies aggregating investments of over $100
million. Prior to this, Puneet was with ICICI Limited. from 1990 to 1995 in the
Project and Corporate Finance group and worked as Senior Analyst
with Crosby Securities from 1995 to 1996. He currently serves on the
Board of Directors of Matrix Laboratories and Shriram Transport Finance. Puneet
holds a degree in Commerce and an M.B.A. from, the Indian Institute of
Management, Kolkata.
Ravindra Behl –
Director
Ravindra Behl has 30 years of experience primarily in financial
services, where he spent most of his career working with Citibank. He was the
Country Manager for Retail Banking in India and Indonesia and a member of the
bank's Global Corporate Property Group that constituted the top 250 Citibank
leaders around the globe. After
leaving Citibank in 1997, he built and managed the Indian operations of
e Funds, a transaction processing company. Ravindra holds a Bachelors degree in
English Literature and an M.B.A. from the Indian Institute of Management,
Kolkata.
Ranvir Dewan -
Director
Ranvir Dewan is a Fellow of the Institute of Chartered Accountants in
England & Wales and a member of the Canadian Institute of Chartered
Accountants. Ranvir joined TPG New bridge Capital in July 2006 as Senior
Principal and Advisor, and is based in Singapore. From April 2000 to July 2006
he was Executive Vice President and Chief Financial Officer of Standard
Chartered First Bank in Seoul, Korea. Prior to that he spent 13 years with
Citibank and held various senior positions in its international businesses. In
his previous assignment, he was Vice President and Regional Financial
Controller of Citibank's consumer bank with responsibilities covering 11
countries in the Asia Pacific region.
Sanjay Kukreja -
Director
Sanjay Kukreja currently represents Chrys Capital on the board of
SUBJECT. He has been with Chrys Capital since its inception, and along with
Ravi Behl, has been instrumental in deploying in excess of $200 million across
the financial services sector in Companies such as Shriram, AXIS bank,
Centurion Bank, Yes Bank, Mahindra & Mahindra Financial Services Company
Limited. And Bajaj Auto Finance Company Limited.
Besides SUBJECT, Sanjay is also on the board of directors of Titagarh
Wagons Limited. India's leading railway wagon manufacturing Company where Chrys
Capital has a 11% stake. He holds a degree in Economics from Shriram College of
Commerce, Delhi and an M. B. A. from the Indian Institute of Management,
Bangalore.
Dr. T. S. Sethurathnam -
Director
T.S. Sethurathnam served for 35 years in the M.P. Electricity Board and
held senior positions before being promoted as the Chairman. He had the longest
tenure as Member / Chairman for over 15 years. He has also been Chairman of the
Western Regional Electricity Board; Chief Consultant to Power Finance
Corporation; Consultant to Houston Industries, Smith Cogeneration (India)
Private Limited, Ahmedabad Electricity Company Limited, Arthur Andersen for
power utilities distribution reforms and GMR Vasavi for construction of the
first barge mounted power plant in the country. He has also worked as Member of
the All India Council for Technical Education.
Sumatiprasad M. Bafna -
Director
Sumatiprasad M. Bafna is a science graduate and started his career in
the year 1984 under the guidance of his late father Mishrilal C. Bafna. He
thereafter started an independent dealership of Tata Motors at Ratnagiri,
Maharastra in the year 1995, and a Mumbai Dealership in the year 2001.
His company has been the No. 1 dealer for Tata Motors in the year
2003-2004 and 2004-2005. Sumatiprasad is on the Board of more than 10 companies
and also holds dealerships of Honda, Hyundai and Maruti. He has extensive
experience and a firm base in the transportation business.
DIRECTORS REPORT
BUSINESS ENVIRONMENT
The Indian economy
posted; impressive growth during 2006-07, for the fourth consecutive year and
has now moved into center stage. As per the data released by the Government
Agencies, the real Gross Domestic Product (GDP) growth is expected to go up
from 9.0 percent in 2005-06 to 9.4 percent in 2006-07, the real GDP growth is,
thus, expected to average 8.6 percent during the four-year period from 2003-04
to 2006-07. It has been reported that the key drivers for the acceleration in
growth, during 2006-07 were the services and manufacturing’ sectors, both of which
are expected to record double-digit growth. Agriculture and allied. Activities'
growth, however, slowed down from 6.0 percent in 2005-06 to 2.7 percent in
2006-07. The foreign exchange reserves have more than doubled from US$ 76
billion at the end of March, 2003 to US$ 200 billion at the end of March, 2007.
The performance of
the corporate sector continued to be buoyant supported by favourable-domestic
and export market conditions during 2006-07. This up-trend in the economy seems
to have encouraged a large number of acquisitions of foreign companies by
Indian companies. The leading international rating agencies have recently
upgraded India to investment grade, which is a strong pointer to the level of
international confidence in the performance of the Indian economy.
However, the
upward movement in interest rates, rising inflation and inadequate
infrastructure do pose concerns. The RBI recently acknowledged over heating of
the economy and has been steadily tightening the monetary policy. There are, therefore,
doubts expressed whether the impressive growth rate can be maintained in the
coming years.
The growth of the
commercial vehicle segment is directly linked to the growth of the economy. An
increase in the industrial production naturally drives up the commercial
vehicles sales. The upbeat economy and an increased activity in the infra
structure sector have pushed up the commercial vehicle sales. During April 06 -
March 07, the commercial vehicles segment grew at 33.28 percent. Growth of
medium & heavy commercial vehicles was 32.84 percent and light commercial
vehicles recorded a growth of 33.93 percent. The exports of commercial vehicles
also recorded an increase of 22.58 percent. However, the recent upward
movements in the interest rates have, to some extent, dampened the vehicles
sales and consequently, the commercial vehicle finance business as well.
The Company
continued to maintain its leadership position in the pre-owned commercial
vehicle segment and enjoys a market share of 25 percent approximately. This
market is estimated to be in the range of Rs. 22,5000 Millions and is growing over 10 percent annually. On account
of the specialized skills developed over the past several years and because of
the stiff entry barriers, the Company expects to maintain its lead in this
segment for some more time to come. In the new vehicle finance segment, though
there is stiff competition especially from the^ Banks, the Company still
continues to retain its market share of 8 percent.
As the interest
rates have been on the rise for some time, the Company consciously moved away
from the high cost retail finance mobilization to comparatively cheaper
bank/institutional finance. This has enabled the Company, to some extent,
absorb the effect of rising interest costs and still continue to maintain its
operating margins. The market opportunities for the commercial vehicle finance
business are tremendous and hence a slow down in the growth, even if it
happens, is not expected to seriously affect the Company's operations in the
near future.
OPERATIONS
The Company has
earned a" Profit before Tax of Rs. 2892.242 Millions for the year ended
March 31, 2007 as against Rs. 2161.687 Millions of the earlier year, posting an
increase of 33.80 percent year on year. The Profit After Tax of Rs. 1903.971
Millions also is 34.59 percent more when compared to the previous year, which
was Rs. 1414.601 Millions. The Total Income for the year under consideration
was Rs. 14155.210 Millions and total expenditure was Rs. 11262.968 Millions.
The total
disbursements made under hire purchase, financial leasing and loan financing of
commercial vehicles during the year under review was Rs. 66082.600 Millions. As
on March 31, 2007, while the stock on hire (Net) under Hire Purchase Agreements
was Rs. 566.500 Millions, under Hypothecation Loans was at Rs. 79306.800
Millions and Assets given on Financial Lease was Rs. 2169.200 Millions.
During the year
ended March 31, 2007, the Company mobilised Rs. 8732.300 Millions through Mon
Convertible Debentures, Rs. 3027.500 Millions through Sub-ordinated Debts, Rs.
3,7847.000 Millions through Term Loans, Rs. 6735.000 Millions through Working
Capital Loan, Rs. 3400.000 Millions through Commercial Paper and Rs. 28597.900
Millions through Securitisation Deals.
As on March 31,
2007, there were 457 Fixed Deposits aggregating to Rs. 6.436 Millions that have
matured but remained unclaimed. There were no deposits, which were claimed but
not paid by the Company. The unclaimed deposit has since fallen down to 427
deposits amounting to Rs. 5.893 Millions. Steps are being taken continuously to
obtain the depositors' instructions so as to ensure renewal/repayment of the
deposits in time.
Subsidiary
During the year
under review, the Company incorporated a 100 percent subsidiary by name Shriram
Powergen Limited to exclusively deal with the windmill and the biomass projects
of the company/ The Certificate .of Incorporation of the subsidiary was
obtained on February 08, 2007-and the Certificate of Commencement of business
has been applied for.
The subsidiary has
been incorporated only on February 08,: 2007. The subsidiary has not yet
commenced its business and hence it has not prepared its audited Financial
Statements for the year ended March 31, 2007. Hence, only a statement under
Section 2:12 of the Companies Act, 1956 relating to the subsidiary is attached
to the Balance Sheet of the Company.
Introduction
Catapulted by a
growing economy, India has secured a position in the front ranks of the
developing countries across the world/Having recorded a GDP growth of 9.2
percent, the macroeconomic environment continued to remain robust during
2006-07. With progress touching every sector, India has already emerged as the
tenth largest economy in the world/The country's Ba'nking and Financial
Services sector has emerged as the vital support system/sustaining this growth.
As transportation
is ubiquitously linked to all industries, an effervescent economy is indicative
of a flourishing transport industry, India, encompassing 31,66,414 sq km of
world's land mass, has a large and extensive.transportation system. The country
boasts of one of the world's largest railway and roadway networks, transporting
huge amounts of, people and cargo every year. Today, the Commercial Vehicles' (CV)
sector is accountable for the transportation of more than 60 percent of the
total freight in the country.
The CV industry,
which is cyclical in nature, has painted a sanguine picture in the last five
years. Having recorded an impressive CAGR of 30 percent between 2003 and 2005,
the industry is expected to remain on an upswing for the next 3- 5 years. As
per Cris-lnfac, the organised pre-owned vehicle and refinance markets are
expected to grow from Rs. 9600 Millions in FY2004 to Rs. 27200 Millions in
FY2009. Factors such as, demand for the replacement of old vehicles provide an
added fillip to the growth of this industry. Amidst dampening interest rate
hikes and liquidity concerns, this replacement demand is expected to remain
intact, fuelling the sale of commercial vehicles.
The Truck Financing Arena
Today, small road
transport operators own a vast majority of these trucks, amounting to over
70-75 percent. Moving along the roads crisscrossing the country, this truck owners
account for an indirect contribution to India's economic growth. However, the
credit support to them is expensive, inequitable and exploitative. Banks are
unable to evaluate their credit worthiness due to lack of proper documentation.
Consequently.'this segment of business is flocked by private financiers,
catering to over 70 percent of the pre-owned truck market. As a result, the
truck owners are subjected to exorbitantly high interest rates. Moreover, the
market penetration of the organised players is restricted due to the
requirement of a strong local presence, efficacious customer evaluation tools
and a well established network.
In the backdrop of
such a scenario, the truck financing industry has a huge untapped potential.
With the modernisation of the aging trucks on the anvil, the average age of the
national fleet is expected to reduce to 7 years, in the next 5 years. This is
further anticipated to trigger the demand for the replacement "of older
trucks/ As per Mckinsey, the truck financing sphere is emerging as a profitable
business opportunity, unveiling a potential of Rs. 450000 Millions. The demand
for pre-owned truck financing, alone, is anticipated at Rs. 225000 Millions.
Non-Banking Financial
Companies (NBFCs)
A sound financial base
is pivotal for the sustainable growth of any economy. While banks are at the
forefront to cater to the demands of the urban populace, the rural and.the
semiurban segments are relatively untapped. Non-Banking Financial Companies
(NBFCs) are purveyors of financial services in such regions. Having survived
testing times, NBFCs have identified profitable business sectors that have
bloomed into mature markets. They operate in a congenial funding environment,
with presence in the lucrative asset segments and wealth management and
distribution sectors. They have successfully brought about the mobilisation of
inactive assets and users of credit. Their innate capability of providing
customised services has earned them the reputation of being the vendor of choice.
Today, Shriram
Transport Finance Company Limited (STFCLL) enjoys its position as the reigning
leader in the commercial vehicle financing space, with an estimated market
share between 20-25 percent in pre-owned commercial vehicles. Unorganised
players such as private financiers account for the residual market share.
Additionally, the Company also commands about 7-8 percent of the market share
in the new commercial vehicle
Business Overview
Steered by the
knowledge acquired through years of serving the industry, STFCL has
successfully developed strong organisational capabilities that enable it to
survive stiff competition from banks.
During FY2006-07,
the Company has undertaken pertinent efforts towards re-branding itself and
enhancing its market penetration.
Life After The Merger
The strategic
decision to merge all the three entities within STFCL, has granted access to
opportunities at the pan India level. The successful alignment of all the
regions, in tandem with its integrated business plan, has enabled the Company
to create a separate central zone. This is envisioned as a strategic move to
efficiently operate its expanding business. northern and eastern markets to
venture into newer territories. The merger, coupled with the flow of equity
from reputed Private Equity Funds, ChrysCapital and TPG NewBridge, has led the
Company to emerge as the largest asset financing NBFC in the Indian commercial
vehicle financing space.
Being Seen Differently
STFCL has so far
been successful in its efforts to position itself as the number one asset
financing NBFC in the country. The Company has fruitfully altered its image
from being perceived as a low key player to benefit from its leadership
position. It has recently shifted its approach from a sales oriented organisation
to a marketing oriented entity with the capability of capturing a larger share
of the market. This move has also
reinforced the changing perception of this unique sector: it is not only being
regarded as being less risky, but now as a lucrative industry. A significantly
changed mindset of institutions and banks is resulting in a vivid improvement
in the Company's ability to access funds from a variety of sources. This in
turn is allowing the Company to plan its pace of growth more effectively.
Exploring Additional Avenues
During FY2006-07,
STFCL consciously entered into certain identified areas and segments within
commercial vehicle financing industry. This move has enabled the Company to
finance vehicles aged between 5-12 years. Simultaneously, it has also ventured
into the financing of newer vehicles aged between 2-5 years, to expand its
market coverage. The addition of vehicles from different age groups to the
Company's product mix is expected to lead to higher volumes of commercial
vehicle financing. This should also help the Company in countering competitors
planning to enter this niche market.
Asset Management
Originating from
Rs. 2,5000 Millions in 2002, STFCL has
successfully crossed over Rs. 12,0000 Millions of
assets in FY2006-07,
marking nearly 5 times growth in the last 5 years. Since the Company now has
easy access to finance, it is looking at effectively converting its significant
liability volumes into assets. Having increased its number of branches to 358,
STFCL is enhancing its market penetration to increase its customer base. During
FY2006-07, the Company added above 2,60,000 contracts, taking its customer base
to over 5,00,000. Beating a rhythm at a rapid tempo, STFCL is expected to
increase its customer base to 1.000
Millions, by 2010.
Creating an Ecosystem
STFCL is focussing
on creating an all encompassing ecosystem for serving truck operators, where
every component is providing new lending opportunities, driving more business
towards the Company. Moreover, the Company is also expanding its range of
vertically integrated products, tailored to meet its customers' total
requirements. It plans to enter into
different joint-venture partnerships with other enterprises with core
competencies related to the transportation industry. This will not only provide
it with additional value-added income, but also help in enhancing its existing
business and customer relations, resulting in a leadership presence on a pan
country basis.
Strengths
STFCL has been in
the business of financing new and preowned trucks for no less than 28 years. It
is the only recognised entity from the
organised sector, which can be relied upon for financing second hand CVs.
With almost 3
decades of experience, in delivering value driven, quality service to its
unique target market segment, the Company has won enormous goodwill, which no
other competitor can claim. Moreover, meticulous and effective planning by the
Company has resulted in a significant cut in the cost of funds, making STFCL
one of the most competitive players in the segment. It also operates a vast
network that few can match up to: with more than 358 branches and more than
2,000 field officers, STFCL is able to tap its target market even in the
remotest parts of the country.
With a pan-India
presence through an unmatched extensive infrastructure, STFCL has emerged as an
unsurpassed leader in the segment. There are several factors that have leader
in the segment. There are several
factors that have led the Company to this pre-eminent position
Formidable Financial Base
Traditionally,
STFCL turned to retail resources, banks and institutions for finance. Today, it
has built up a strong, study financial base, as a result of its equity
partnerships with New Bridge Capital, Chrys Capital, Citicorp Finance and AXIS
Bank and other international financial institutions.
Moreover, the size
and stature of STFCL post merger, has proved to be a shot in the arm by
throwing open far greater business opportunities.
Asset Valuation Skills
Extensive
expertise in asset valuation is a prerequisite for any NBFC providing loans for
second hand assets. Gauging the condition of a vehicle and its parts is an
acquired skill which requires a keen
understanding of this asset class. At STFCL, where second hand CVs are studied
as if it were science, valuation is carried out by well experienced field
officers with at least a couple of years of experience or more.
Since the
evaluation of the creditworthiness of truck owners is typically challenging,
they are often deprived of the privilege of owning a credit card. Living up to
its claim of being a true partner, the Company has addressed this issue
commendably. One of the most important and valuable business moves of STFCL,
during FY2006-07, was its collaboration with AXIS Bank. As a result of this
partnership, the Honourable Finance Minister, Government of India,. Mr. P.
Chidambaram launched the Company's credit card in February 2007. It aims to
maintain a high quality base of credit card customers by screening the
eligibility of the top 1,00,000 customers out of their 5,00,000 base, by
analysing their previous repayment behaviour and credibility.
STFCL entered into
an equity partnership with Ashok Leyland Limited for stepping into the freight
exchange business, subscribing 40 percent equity in a joint venture company
called "Ashley Transport Services Limited". Usually, transporters are
constrained to wait till they confirm a return load from their destination.
Sighting this as an opportunity, the joint venture company Ashley Transport
Services Limited plans to provide return load booking
facilities to
these transporters, for a reasonable fee reducing the waiting time before their
return journey. The advantage presented
to transporters is that they can easily discount their bills with the Company,
which in turn yields better rates and improved cash flows. Through this
partnership, STFCL stands to benefit by tapping into the bill discounting
market effectively.
Financial Overview
The year ended
March 31, 2007 witnessed an impressive increase of 56.11 percent in the
Company's revenues to Rs. 14155.200 Millions, compared to Rs. 9067.600 Millions
in the previous year. The profit before tax rose to- Rs. 2892.200 Millions,
recording a 33.80 percent increase, as against Rs. 2161.600 Millions achieved
in the earlier year. The profit after tax increased to Rs. 1904.000 Millions,
as compared to Rs. 1414.600 Millions in the previous year, demonstrating a
sturdy increase by 34.60 percent. STFCL's Cross NPAs stood at 2.05 percent and
the Net NPAs were at 1.30 percent. The Net Interest Margin was recorded at 8.8
percent, whereas the Net Spread was at 3.5 percent, during the year under
consideration.
Business Outlook
Pre-owned CV financing
is expected to continue being a profitable business model for organised players
such as STFCL. The Company plans to further build on its success, leveraging on
its competencies in the areas of loan origination, valuation and collection.
Going forward,
STFCL is gearing up to reach a customer base of TO lacs by 2010 and is
confident of sustaining the growth rate achieved in the recent past.
STFCL is also
exploring various opportunities through partnerships and inorganic growth to
strengthen its primary business and venture into other segments.
Fixed Assets
v
Land - Freehold
v
Land - Leasehold
v
Buildings
v
Plant And Machinery
v
Furniture And Fixtures
v
Vehicles
Intangible Assets
v
Computer Software
Capital W.I.P.
On Lease
v
Plant And Machinery
v
Furniture And Fixtures
v
Vehicles
Contingent
Liabilities not provided for
|
Contingent
Liabilities not provided for |
As at 31.03.2007
[Rs. In Millions] |
|
Disputed income tax/interest tax demand contested in appeals not
provided for [against the above sum of Rs. 31.811 Millions] |
575.490 |
|
Demands in respect of Service Tax [amount of Rs. 1.500 Millions has been paid under protest] |
23.024 |
|
Guarantees issued by the Company to banks and others |
1455.754 |
|
Out of which amount outstanding |
410.112 |
|
In respect of portfolio management |
35.667 |
Ø
The company has converted 5715000 warrants issued to UNO investments
into equity shares at a premium of Rs. 25/- and 9100000 warrant issued to Shriram
Holding [Madras] Private Limited at a premium of Rs. 102/- during the
year. The amount of Rs. 1097.303
Millions [including securities premium of Rs. 949.153 Millions] received from
preferential allotment of shares was utilized for the purpose of increasing the
Networth and working capital of the company.
Ø
In view of the circular number 9/2002 dated 18.04.2002 issued by the
Department of Company Affairs, no debenture redemption reserve is required to
be created in case of privately placed debentures, accordingly, the debenture
redemption reserve of Rs. 10.000 Millions created during the year 2000-2001 is
transferred to the General Reserve.
Ø
Recovery of service tax on lease and hire purchase transactions is kept
in abeyance in view of the stay granted by Honourable Madras High Court. If any liability arises it will be recovered
from the concerned parties. However, on
contracts that are terminated, pending decision from the Honourable Madras High
Court, equivalent service tax is written off.
WEBSITE DETAILS:
Overview
Subject was established in
1979 to finance the much neglected Small Truck Owner. Shriram understood the
power of 'Aspiration' much before marketing based on 'Aspiration' became
fashionable.
Subject started lending to the
Small Truck Owner to buy new trucks. But they found a mismatch between the
Aspiration and Ability. The Truck Operator was honest but the Equity at his
command was not sufficient to support the credit levels required to buy a new
truck.
They did not have the heart to send the Truck Operator back empty handed; they
decided to fund Pre-owned Trucks. This was the most momentous decision that
they made. What followed was sheer magic.
From Driver to Owner, even if only of a Pre-owned Truck and from Pre-owned Truck
to the New Truck, they have been with him in his journey of Prosperity as he
has been their partner in their road to success and leadership.
For them at subject, credit-worthiness of the Small Truck Owner has always been
an article of faith. This faith has guided their journey from their pioneering
days in financing Small Truck Owners to the present day leadership. Today they
are not only the leader in Truck Finance; they are also India's largest Asset
Based Non-Banking Finance Company.
Today, subject has a network of over 327 branches spread across the country;
spanning a geography which covers 91.3% of Truck Owners. Soon the coverage will
be extended to enable them to reach 100% of Truck Owners. Subject employs
nearly 4000 people and has Assets Under Management (AUM) in excess of Rs. 10000
millions (US$ 2.2 billion), with a live contracts of more than 5,00,000
customers.
The inability of the economists to capture data relating to the economic
activity of the informal sector has resulted in its neglect at the
policy-making levels in the government.
The distribution of Truck Ownership being scattered among a large number of
individuals has resulted in this very important group being missed by the
institutional radar. It is estimated that 80% of trucks in the country are in
the hands of individuals.
Their journey has seen them making several innovations while they stood at the
very edge of Organized Finance. The Banks and Institutions were guided by the
Economists' vision; the Small Truck Owner who always fell on their blind side
was given the miss.
From the orthodoxy of the 1970s through 1990s, to the pragmatism of the new
millennium, Subject takes credit for having brought about a revolution in the
institutional mindset. Today, the Citigroup, AXIS Bank, ICICI Bank and other
leading banking institutions are proud associates of Subject in financing
Pre-owned Trucks.
Subject helps meet customer needs end-to-end, in the
transportation lifecycle.
Their
product offerings to truck operators include:
v
New Truck Finance
v
Used Truck Finance
v
Tyre finance
v
Power Finance
v
Franchisee Finance
v
Personal Loans
v
Co-Branded Credit Card
v
Freght Exchange / Bill Discounting
v
Trading
v
Truck Rentals
Press Release
Shriram
Plans to enter tractor and passenger vehicle financing
Business Standard - 3 May, 2007
Subject, which finances pre-owned trucks, plans to enter the
tractor and passenger vehicle financing across the country in the next few
months. The company is also looking to tie up with 100 small and medium
individual financiers in the next two years for loan generation.
The company has slowly begun testing the ground with financing tractors at
Andhra Pradesh where it has introduced a credit line of Rs 5,000 per annum for
a loan of Rs 0.15 million. The loans have been disbursed for those who want to
purchase pre-owned tractors, a market, the company claims is worth Rs 100000
million.
“About 20 per cent of tractors are used for transportation in the business of
agricultural commodities, bricks and others. With around 0.35 million tractors
sold every year and their success with pre-owned tractors at Andhra Pradesh,
they hope to emulate it across the country, said Umesh Revankar, Executive
Director, STFC.
Subject is also looking at passenger vehicle financing and has started offering
finance in Kerala and Karnataka. The company plans to start passenger vehicle
financing with buses which Revankar expects to be a Rs 5000 million revenue
market in the next two years.
In the financial year 2006-07, the company had tied-up with 200 small and
individual financiers in the south and west for around Rs 600-700 millions and
expects to procure close to Rs 1000 millions for the year 2007-08 through 100
financiers.
Recently, Subject had launched a co-branded credit card in association with the
AXIS Bank for small road transport operators. The card enables operators to
withdraw cash from an ATM, buy fuel, tyres, oil and batteries. “Since its
launch they have received 5,000 applications for credit card of which 2,000
have been dispatched. They hope to give out 100,000 credit cards by March 2008,
said Revankar.
The card has a credit limit of Rs 15,000 and is valid for two to five years.
The company has also begun to market its pre-owned truck schemes aggressively
and has roped in actor Dharmendra as its brand ambassador
Shriram-AXIS
Bank Launches Credit Card
14 Feburary, 2007
FINANCE
MINISTER SHRI P. CHIDAMBARAM LAUNCHES SHRIRAM – AXIS BANK CO - BRANDED CREDIT
CARD EXCLUSIVELY FOR SMALL ROAD TRANSPORT OPERATORS (SRTOs)
First of its kind initiative undertaken by an NBFC to benefit 1,
00,000 truck owners
New Delhi, 14th February, 2007 : Union Minister of Finance, Shri P. Chidambaram
launched the Shriram - AXIS Bank co-branded credit card and handed over credit
cards to select 11 SRTOs in a function held today. The Shriram - AXIS Bank
co-branded credit card is a first of its kind initiative undertaken by
Subject(Shriram), India’s largest asset financing NBFC, in association with
AXIS Bank, one of India’s fastest growing private sector banks.
The Shriram - AXIS Bank credit card, which is being launched on the VISA
platform, will be unique as this is the first time a credit card is being
offered to SRTOs in the country.
This co-branded credit card will be very useful to the SRTO in meeting his
day-to-day working capital requirements. By using this co-branded credit card,
the SRTO can withdraw cash from ATM, buy fuel, tyres, oil, batteries etc., in
addition to the usual benefits that are available with other cards.
Dr. P. J. Nayak, Chairman & Managing Director, AXIS Bank, said “They are
pleased to be associated with this initiative as it gives the Bank an ideal
opportunity in the growing co-branded segment to provide value propositions
across varied customer profiles. Their co-branded cards offer value, safety and
convenience to customers.”
Commenting on the occasion, Mr. R. Thyagarajan, Chairman, Shriram Group, said,
“They have chosen to partner with AXIS Bank to create a unique co-branded
credit card. This partnership will further strengthen the corporate
relationship that the Shriram Group has enjoyed with AXIS Bank”.
Mr. R. Sridhar, Managing Director, Shriram Transport Finance Company Limited,
said “This initiative is another step in their effort to empower the SRTOs,
thus deepening their relationship with the customer”.
About AXIS Bank
Set up in 1994, AXIS Bank is one of the fastest growing private sector banks in
the country. The Bank offers a complete range of retail and corporate services,
including retail loans, corporate credit, forex services, investment banking,
depository services, and investment advisory services.
Presently the Bank has a nationwide network of more than 504 Branches and
Extension Counters along with over 2200 ATMs providing 24x7 banking convenience
to its customers.
About Subject
Subject, incorporated in the year 1979, is the largest asset financing NBFC in
the country enjoying leadership position in the Commercial Vehicle Financing business.
The company has more than Rs.100000 millionss assets under its management with
a network of 327 branches spread over the entire length and breadth of the
country. The company has equity participation from Citicorp, AXIS Bank, and
reputed private equity funds like Chryscapital and Newbridge Capital.
STFC Quarterly Profit Surges
30 January, 2007
Tuesday, the 30th January 2007, Mumbai - The Board Meeting
of Subject, the largest asset financing NBFC in the country, was held today to
consider the un-audited financial results for the quarter ended 31st December
2006.
For the quarter ended 31st December 2006
The revenues of SUBJECT surged by 71.61% to Rs.3756.6 millions as against
Rs.2189.0 millions of the previous year. The profit after tax also rose by
71.34 % to Rs.575.7 millions as against Rs.336.0 millions recorded in the same
period earlier year.
For the nine months ended 31st December 2006
The revenues of SUBJECT surged by 52.12 % to Rs.99342 millions as against
Rs.65306 millions of the previous year. The profit after tax also rose by 39.12
% to Rs.14462 millions as against Rs.10395 millions recorded in the same period
earlier year.
Accounting for Securitisation Transactions
The Company recognizes income on account of securitisation over the tenor of
the agreements. The revenues and profit after tax would have been higher by
Rs.332.800 Millions and Rs.220.800 Millions respectively for the quarter ended
31st December 2006 and Rs.546.900 Millions and Rs.362.800 Millions respectively
for the nine months ended 31st December 2006, if the income from securitisation
transactions was recognized upfront.
AUM crosses Rs.1000000 millions
The Assets under management (AUM) crossed Rs.1000000 millions and stood at
Rs.1014274 millions as on 31st December 2006.
About Shriram Conglomerate
Shriram Conglomerate, established in the year 1974, is among the leading
corporate houses in Southern India and a major player in the Indian financial
services sector. Subject is the leader in the Chit and truck financing
business. Subject manages funds of over Rs.100000 millions in its truck
financing business and has a significant presence in consumer durable
financing, insurance broking and stock broking business as well .With a joint
venture agreement with Sanlam Life Insurance in May 2005, Subject has also
forayed into the Indian Life Insurance sector. With a network of over 600
branches spread over urban as well as semi urban and rural areas and an
experienced sales force of over 65,000 agents, Subject has one of the widest
distribution reach that caters to over 3 million customers 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.39.48 |
|
UK Pound |
1 |
Rs.77.44 |
|
Euro |
1 |
Rs.57.75 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/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 |
|