MIRA
INFORM REPORT
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Report Date : |
25.02.2008 |
IDENTIFICATION
DETAILS
|
Name : |
EXIDE INDUSTRIES LIMITED |
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Registered Office : |
Exide House, 59E, Chowringhee
Road, Kolkata – 700 020, West Bengal |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
23.10.1970 |
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Com. Reg. No.: |
21-14919 |
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CIN No.: [Company
Identification No.] |
L31402WB1970PLC014919 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CALE01193D / CALC00084A |
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PAN No.: [Permanent
Account No.] |
AAACE6641E |
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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 Lead Acid
Storage Batteries. |
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 27000000 |
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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 fine track.
Available information indicates high financial responsibility of the
company. Financial position of the company
is good. Payments are usually correct
and as per commitments. The company
is progressing well. The company can be considered good for any normal business
dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
Exide House, 59E, Chowringhee Road,
Kolkata – 700 020, West Bengal, India |
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Tel. No.: |
91-33-22478320
/ 8326 / 8329 / 2313 / 22403604 / 22801083 / 2280 2150-51 |
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Fax No.: |
91-33-22479819
/ 22870725 / 2283 2632/37 |
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E-Mail : |
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Website : |
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Factory : |
West Bengal 91 New Chord Road, Athpur, Shamnagar, 24 Parganas (N) - 743 128 Durgachak, Haldia, District Midnapore, West Bengal -72 1602 Haryana Plot No. 179, Sector 3, HSIDC Growth Centre, Bawal - 123 501 Maharashtra D2, MIDC Industrial Estate, Chinchwad East, Pune 41 1019 Plot No. T-17 MIDC Taloja Industrial Area, Taloja- 410 208 Kanjur Village Road, Kanjurmarg (East), Mumbai - 400 042 Tamil Nadu 21/22 Alandur Road, Guindy, Chennai - 600 032 Chichurakanapalii, Sevaganapalli Panchayat, Hosur Taluk,
District Dharmapuri - 635 103 |
DIRECTORS
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Name : |
Mr. R. G. Kapadia |
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Designation : |
Chairman and Non Executive
Director |
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Name : |
Mr. S. B. Ganguly |
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Designation : |
Executive Chairman and Chief
Executive Officer |
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Qualification: |
B.Sc. Engineering (Chem.), FIRI
(Lond), FIC FII Ch.E |
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Experience: |
39 years |
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Date of Joining: |
01.04.1986 |
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Previous Employment: |
Dunlop India Limited, Director
(Research & Technical) |
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Name : |
Mr. R. B. Raheja |
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Designation : |
Vice Chairman and Non-Executive
Director |
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Name : |
Mr. T. V. Ramanathan |
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Designation : |
Managing Director and Chief
Operating Officer |
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Qualification: |
B.Com., FCA, ACS |
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Experience: |
34 years |
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Date of Joining: |
01.02.1995 |
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Previous Employment: |
UB Group, Bangalore – Group Vice
President – Finance |
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Name : |
Mr. G. Chatterjee |
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Designation : |
Director (Industrial) |
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Qualification: |
B.E., (Mech.), PGDBM (IIM) |
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Experience: |
30 years |
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Date of Joining: |
23.08.1982 |
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Previous Employment: |
Indian Oxygen Limited –
Production Engineer |
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Name : |
Mr. S. K. Mittal |
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Designation : |
Director (R & D) |
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Qualification: |
M.S., Ph.D., (Engg. Sc.)
(Florida) |
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Experience: |
30 years |
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Date of Joining: |
11.03.1974 |
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Previous Employment: |
Florida Department of
Environment Control (USA) – Environmental Specialist |
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Name : |
Mr. Vijay Aggarwal |
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Designation : |
Non-Executive Director |
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Name : |
Mr. H. M. Kothari |
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Designation : |
Non-Executive Director |
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Name : |
Mr. Bhaskar Mitter |
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Designation : |
Non-Executive Director |
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Name : |
Mr. S. N. Mookherjee |
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Designation : |
Non-Executive Director |
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Name : |
Mr. A. H. Parpia |
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Designation : |
Non-Executive Director |
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Name : |
Mr. S. B. Raheja |
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Designation : |
Non-Executive Director |
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Name : |
Mr. W. Wong |
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Designation : |
Non-Executive Director |
KEY EXECUTIVES
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Name : |
Mr. Barun Das |
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Designation : |
Company Secretary |
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AUDIT COMMITTEE |
Mr. R. G. Kapadia |
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Mr. Bhaskqr Mitter |
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Mr. S. N. Mookherjee |
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Mr. Vijay Aggarwal |
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REMUNERATION COMMITTEE |
Mr. Bhaskar Mitter |
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Mr. R. G. Kapadia |
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Mr. T. V. Ramanathan |
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Mr. S. N. Mookherjee |
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Mr. Vijay Aggarwal |
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EXECUTIVE COMMITTEE |
Mr. T. V. Ramanathan |
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Mr. G. Chatterjee |
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Mr. S. K. Mittal |
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Mr. A. K. Mukherjee |
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Mr. Barun Das |
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Mr. Monodip Chaudhuri |
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Mr. R. P. Ray |
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Mr. R. Chakraborty |
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SHAREHOLDERS GRIEVANCE REDRESSAL COMMITTEE : |
Mr. Bhaskar Mitter |
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Mr. T. V. Ramanathan |
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Mr. G. Chatterjee |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Foreign
Promoters |
366,520,000 |
48.87 |
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Foreign
Institutional Investors |
60,758,143 |
8.10 |
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Non Resident
Indians |
2,021,115 |
0.27 |
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Foreign
Nationals |
113,660 |
0.02 |
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Mutual Funds |
88,141,177 |
11.75 |
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Financial
Institutions, Insurance Companies & Banks |
96,247,614 |
12.83 |
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Public |
87.156,965 |
11.62 |
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Bodies Corporate |
48,226,196 |
6.43 |
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Directors &
their relatives |
815.130 |
0.11 |
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TOTAL |
750,000,000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Lead Acid
Storage Batteries. |
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Products : |
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Brand Names : |
'Exide', 'Dagenite', 'Dynex' and
'Index' |
PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
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Storage Batteries |
Nos. |
18,307,585 |
17,044,903 |
GENERAL
INFORMATION
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Suppliers : |
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Customers : |
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No. of Employees : |
3831 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
S. R. Batliboi and Company Chartered Accountants |
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Address : |
22, Camac Street, Block ‘C’, 3rd
Floor, Kolkata – 700 017, West Bengal, India |
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Solicitors: |
Ř A.H. Parpia and
Company Advocates and Solicitors Lentin Chambers, Dalai Street Fort, Mumbai 400 001 Ř Victor Moses and
Company Advocates and Solicitors 6, Old Post Office Street First Floor, Kolkata 700 001 Ř Amarchand and Mangaldas Suresh A Shroff and Company Advocates and Solicitors Ananda Lok, 227 AJC Bose Road Lower Circular Road Kolkata 700 020 |
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Membership : |
Confederation of Indian Industry
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Collaborators : |
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Subsidiaries : |
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Associates : |
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Holding
Company: |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
1,000,000,000 |
Equity Shares |
Rs. 1/- each |
Rs. 1000.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
750,000,000 |
Equity Shares |
Rs. 1/- each |
Rs. 750.000 millions |
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 |
750.000 |
750.000 |
750.000 |
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2] Share
Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves &
Surplus |
5954.658 |
4789.412 |
4100.615 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH
|
6704.658 |
5539.412 |
4850.615 |
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LOAN FUNDS |
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1] Secured Loans |
2778.731 |
1562.710 |
1167.215 |
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2] Unsecured Loans |
468.286 |
1335.834 |
1734.717 |
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TOTAL BORROWING
|
3247.017 |
2898.544 |
2901.932 |
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DEFERRED TAX
LIABILITIES |
446.500 |
511.000 |
587.000 |
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TOTAL
|
10398.175 |
8948.956 |
8339.547 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
4658.281 |
4512.427 |
4804.612 |
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Capital work-in-progress
|
310.097 |
62.093 |
37.888 |
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INVESTMENT
|
3780.096 |
2785.321 |
1116.157 |
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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
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3966.103
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2417.219
|
2275.833
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Sundry Debtors
|
1483.870
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1528.369
|
1643.649
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Cash & Bank Balances
|
14.181
|
173.741
|
361.914
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Other Current Assets
|
0.000
|
0.000
|
0.000
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Loans & Advances
|
257.918
|
285.578
|
302.660
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Total Current Assets
|
5722.072
|
4404.907
|
4584.056 |
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Less :
CURRENT LIABILITIES & PROVISIONS
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Current Liabilities
|
3231.192
|
2186.261
|
1701.100
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Provisions
|
841.179
|
629.531
|
502.066
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Total Current Liabilities
|
4072.371
|
2815.792
|
2203.166 |
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Net Current Assets
|
1649.701
|
1589.115
|
2380.890
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
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TOTAL
|
10398.175 |
8948.956 |
8339.547 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
18703.201 |
13793.006 |
11952.454 |
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Other Income |
93.707 |
64.882 |
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Total Income |
18796.908 |
13857.888 |
11952.454 |
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Profit/(Loss) Before Tax |
2352.079 |
1517.255 |
1145.317 |
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Provision for Taxation |
800.000 |
510.000 |
372.500 |
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Profit/(Loss) After Tax |
1552.079 |
1007.255 |
772.817 |
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Earnings in Foreign Currency : |
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Export Earnings |
823.911 |
694.048 |
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Dividend |
8.637 |
2.525 |
563.311 |
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Technical
Assistance Fee |
4.370 |
3.827 |
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Total Earnings |
836.918 |
700.400 |
563.311 |
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Imports : |
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Raw Materials |
4418.931 |
3252.004 |
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Stores & Spares |
31.845 |
30.818 |
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Capital Goods |
306.781 |
69.125 |
2759.678 |
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Others |
178.831 |
24.601 |
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Total Imports |
4936.388 |
3376.548 |
2759.678 |
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Expenditures : |
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Materials Consumed |
12048.449 |
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Purchase of Trading
Goods |
261.891 |
33.219 |
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Personnel Costs |
1239.626 |
994.295 |
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Increase
in Stocks |
[941.522] |
[181.146] |
10790.137 |
|
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Expenses |
3017.337 |
2367.594 |
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Interest and Finance
Costs |
277.084 |
224.431 |
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Depreciation/Amortisation |
541.965 |
547.957 |
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Total Expenditure |
16444.830 |
12340.634 |
10790.137 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
6639.200 |
6677.500 |
7219.200 |
|
Other Income |
38.500 |
5.400 |
2.700 |
|
Total Income |
6677.700 |
6682.900 |
7221.900 |
|
Total Expenditure |
5328.500 |
5505.800 |
6129.700 |
|
Operating Profit |
1349.200 |
1177.100 |
1092.200 |
|
Interest |
85.600 |
77.700 |
116.900 |
|
Gross Profit |
1263.600 |
1099.400 |
975.300 |
|
Depreciation |
192.500 |
147.000 |
146.700 |
|
Tax |
388.400 |
303.100 |
271.000 |
|
Reported PAT |
701.100 |
622.400 |
551.600 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.54 |
0.62 |
0.64 |
|
Long Term Debt -Equity Ratio |
0.42 |
0.38 |
0.34 |
|
Current Ratio |
1.10 |
1.07 |
1.06 |
|
TURNOVER RATIOS |
|
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Fixed Assets |
2.74 |
2.15 |
1.92 |
|
Inventory |
7.47 |
7.50 |
6.74 |
|
Debtors |
15.82 |
11.10 |
10.00 |
|
Interest Cover Ratio |
8.58 |
6.84 |
9.01 |
|
Operating Profit Margin (%) |
13.44 |
13.19 |
12.30 |
|
Profit Before Interest and Tax
Margin (%) |
11.16 |
10.08 |
8.67 |
|
Cash Profit Margin (%) |
8.79 |
8.83 |
8.84 |
|
Adjusted Net Profit Margin (%) |
6.51 |
5.72 |
5.21 |
|
Return On Capital Employed (%) |
30.45 |
23.45 |
20.52 |
|
Return on Net Worth (%) |
27.42 |
21.59 |
20.23 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was incorporated as “Associated Battery Makers
(Eastern) Limited”, under the Company’s Act 1913. The company changed it’s name to Chloride India Limited vide
revised Certificate of Incorporation dated 02.08.1972. The name of the company was again changed to
Chloride Industries Limited vide revised Certification of Incorporation dated
12.10.1988.
The name of the company has been changed from “Chloride
Industries Limited” to "Exide Industries Limited", with effect from
25.08.1995.
Its Company Registration Number is 14919.
Exide Industries (EIL) was incorporated in Jan. 1947,
manufactures and markets secondary lead acid storage batteries for automotive
and industrial applications in capacities ranging from 2.5 Ah to 20600 Ah. The
company's position as India's and South Asia's largest power solutions company.
Its products are sold under the Exide, Dagenite, Dynex and Index brands. The
Chloride Eastern Limited, UK, ceased to be the holding company with effect from
10th January, 2005.
The company produces Lead Acid Storage Batteries. The Company is the largest
manufacturer of caplamp batteries in the world. It is also one of the five
companies in the world which has the capability to make submarine batteries for
both Russian and German types. The company has its plants at Chinchwad,
Shamnagar, Haldia, Hosur, Taloja, Bawal, Chennai and Mumbai. It also has a
strong R&D base at its Haldia plant and this plant commenced production of
VRLA Batteries in Nov.'96.
The subsidiary's of the company are Chloride Batteries S.E.Asia Pte Limited
(Singapore), Caldyne Automatics Limited, Chloride International Limited, Espex
Batteries Limited and Associated Battery Manufacturers (Cylon) Limited During
the year 2004-2005 the company increased its stake in Associated Battery
Manufacturers (Ceylon) Limited Sri Lanka from 49% to 61.50% and with this
acquistion the company became a subsidiary of EIL.
The company has collaborations with the Chloride group, UK, for special
underwater batteries; Skin-Kobe, Japan, for automotive batteries and
valve-regulated lead acid storage batteries and Furukawa Battery company
Limited, japan for automotive batteries. The company's Rs 50-cr plant at Hosur
in technical collaboration with Shin Kobe of Japan was commissioned. It is
likely to cater to players such as Mitsubishi Lancer, Hyundai, Ashok Leyland,
Toyota, etc.
A new brand battery entitled SF Sonic with advanced technological options and a
36 month warranty was launched in the year 2000-01. The company made a offer
for buy back of shares upto 10% of the total paid up equity at a price of
Rs.70/- per share. The buyback was completed in the year 2002.
During the year 2004-2005 the company launched new products like an upgraded
version of ATB range battery, a large size inverter battery MHD2000, MF
batteries,VRLA range batteries and EK22 battery.
The company has increased its installed capacity of Storage Batteries by
1904000 Nos in the year 2004-2005 and with this expansion the total installed
capacity of Storage Batteries increased to 14859772 Nos.
During the year 2005-06, the company has introduced a select range of ultrasonically
sealed zero-maintenance batteries. The company has increased its installed
capacity of Storage Batteries by 649000 Nos and with this expansion the total
installed capacity of Storage Batteries has increased to 15508772 Nos.
Economic
Environment
Coincidentally, this is India's 60th year of independence and what a year it
has been! As India continued its performance as the second highest growing
economy for the third year in succession, both attention and admiration have
continued to flow in from all quarters. Foreign exchange inflows have built the
reserves to an unprecedented US$ 200 billion. FDI inflows have for the first
time, crossed the important land mark of US$ 6 billion. FII money has continued
to pour in and now one is talking about Private Equity flows.
However, inflation has reared its ugly head in the last quarter of the
financial year and both the Finance Minister and the Reserve Bank have
announced a series of measures to curb this phenomena. A further reduction in
customs duty has materialized, along with focus on infrastructure as well as
education and health.
Performance
Sixty years is a milestone for any company viewed from any perspective.
Moreover, when six decades have been spent in rising to and maintaining a
leadership position in India and South Asia, it acquires a special resonance.
The year under review saw the company leapfrog its way into the twenty billion
club, with gross sales rising above Rs. 23000 Millions for the record
books.
In the original equipment segment of the automotive sector, vehicle production
grew in almost all segments, including the tractor market. The production of
automotive batteries for four wheelers increased from 4.6 million units to 5.6
million units, whereas, production of two wheeler batteries rose from 5.8
million units to 7.0 million units. The production of batteries for industrial
applications rose from 800 million Ah to nearly 1 billion Ah during the
year.
As in the past, the company continued to dominate the car market with an 80%
share and an overall market share of 78%. Last year's announcement by the
Finance Minister of a differential Excise Duty on small cars, is helping to
drive the emergence of India as a hub for vehicle manufacturers.
During the year under review the company received the approval for initial
supplies of the prestigious Logan car of Mahindra Renault. In addition, the
Honda Civic, Maruti Swift Diesel and Hyundai Verna, were all fitted exclusively
with the company's batteries. Exide batteries are now fitted on all models of
Toyota including the Innova petrol and diesel versions and the Corolla. Exide
has remained the single source for all Tata Motors passenger vehicles,
including the Indigo, the new Indica and its various variants.
The Replacement segment showed a high growth of 22%, despite the increasingly
competitive domestic scenario and continued import of cheaper batteries, from
China and Thailand. The company continued its policy of introducing cutting
edge technology products, for every customer segment, in order to preserve its
market share.
In the tractor market, retail sales under Project Kisan extended coverage over
more than 30,000 villages in 250 districts. Sales from this segment have
resulted in a growing market share for the company. During the year, the
company continued with its thrust in this segment, with a 24% growth over the
earlier year. Along with this, the commercial vehicle market continued to be a
focus area with steady growth.
Sale of two wheeler batteries recorded its twelfth successive year of growth.
The company takes justified pride in the fact that, technology which has driven
this growth, has emanated from its own R&D Centre at Kolkata. At the fag
end of the year, a technology transfer agreement was signed with Furukawa of
Japan, for production of VRLA motorcycle batteries. The two and three wheeler
market recorded heartening growth rates, leading to further investment planned
for the current year. Export of automotive batteries, however, remained at
lower levels, primarily on account of a lack of capacity, coupled with the
continued steep rise in the price of primary lead.
Batteries for industrial applications, grew significantly during the year
under review. Not only was the company able to increase its market share, but
it also managed to keep both imports and domestic competitors at bay. Telecom
grew at a sedate pace and new products are planned for the current year, when
the growth rate is expected to accelerate. Railways continued to place a
significant share of their business with the company and new products are
planned for this segment, in order to increase the growth potential. Solar
batteries had an encouraging year with a growth of over 70%. Power and Projects
recorded continued growth and new initiatives are planned for this segment,
especially with tubular batteries gaining ground. Traction batteries
represented a significant growth area, after a long period of small incremental
increases. Batteries for UPS and digital inverters recorded a steady growth, as
in the earlier year. Export of traction batteries has recorded impressive gains
and continued to be a profitable business for the company. Australia, UK, South
Africa, South Korea and the European markets continue to be focus areas for
exports.
The submarine division has fared extremely well during the year, with orders
from the Indian Navy as well as an export order from Algeria. The company is
now in the process of developing prototypes for testing batteries for the
Scorpene class of submarines, being sourced from France.
The company's ability to perform, even when Lead prices have reached
stratospheric levels, is further proof of the matured strategy, the company has
chosen to follow. Continuing efforts at cost rationalization, through changes
in design, with a view to reducing lead content, has become a way of life with
the company's R&D Centre at Kolkata. Additionally, efforts at the plant
level, to raise efficiencies across the board, have continued to help post
better results. These are efforts which are expected to continue even as Lead
prices reach new highs in the current year.
New
Products
The year saw the company retaining its technology leadership platform, with the
introduction of a number of new products. A deep cycling VRLA battery was
assembled in February 2007, for electric bikes, with validation tests being
undertaken at the plant as well as the R&D Centre. Low height calcium
calcium batteries in both ATB and the Sonic range, are expected to be launched
shortly. The Exide Matrix completely sealed maintenance free batteries, with a
four year warranty period, is yet another product which will establish Exide's
credentials on the technology front. This product will cater to Hyundai's full
range, including Santro, Accent, Sonata and Getz, the Toyota Corolla, the
Indica and Honda City as well as the Maruti range of vehicles.
Inverter batteries have been given improved rechargeability characteristics to
meet Indian conditions. Exide's Zero-M batteries were launched during the year,
for two wheelers with field trials to be carried out and represent a
substantial improvement on existing products available in the market. The new
ATB range for jeeps, small tractors and light commercial vehicles, besides automobiles,
added to the company's range of products. The advanced technology incorporated
into the DIN batteries has helped the company, to secure the prestigious order
for Logan cars.
Sample batteries with expanded negative grids, are under extensive tests for
high temperature cycling conditions, which would expand the product range for
batteries for industrial applications. Tele-tubular batteries for telecom
application have been supplied to BSNL sites for trial.
During the year, the Japanese Patent Office has granted a Patent for Leak
Retardant Automotive batteries and this represents Exide's exciting foray into
developing its intellectual property aspirations befitting a market leader. A
new Research block was inaugurated at the R&D Centre, during the year,
which has a range of equipment for conducting tests, which has minimised the
requirement for test to be carried out at other laboratories. This will add to
the company's ability to carry out in-house testing of planned products in
future.
Operational Excellence
The difference between a good company and the great one, it is said, lies in a
company's approach to quality. At Exide, we believe that in order to ensure the
customer's loyalty to the company, a continuing thrust on quality is essential.
In keeping with this motto, the company today has ISO / TS / 16949, ISO 9001
and ISO 14001 certification from TUV - Nord of Germany. The company has also
implemented an exhaustive Total Quality Management (TQM) system at its plants
and the R&D Centre. The TQM system includes the latest techniques of Total
Productive Maintenance, Six Sigma and Lean Manufacturing. As part of the
company's core values of responsible corporate citizenship, the company is
committed to preserve the environment and prevent pollution. Accordingly, its
plants at Shamnagar, Haldia, Hosur, Taloja and Chinchwad are ISO 14001
certified. A planned programme for implementing OHSAS 18001 for Health and
Safety at all the plants, is under way.
During the year, the company has won the CII Exim Bank Business Excellence
Award 2006 for 'Strong Commitment to Excel' and the Gold Award 2006 for
'Manufacturing Excellence' in the large automotive ancillary category from
Frost & Sullivan. In addition thereto, Shamnagar has won the CII Award for
'Quality & Continuing Progress'.
Hosur has won the CII Award for 'Leadership & Excellence in Safety, Health
& Environment'. The company has also won the EFY Award for the third year
in succession.
The Batmobile service of the company, which is unique in its genre, continues
to maintain an average response time of 28 minutes across 29 major cities in
India and has logged over 5,30,000 calls. This represents a unique consumer
interface, which the company continues to provide free of any charge to the
vehicle owners for this services. Batmobile is the company's way of showing its
gratitude to its customers, which incidentally also results in revenue
generation through sale of batteries. The company's Customer Relationship
Management (CRM) project with its portal 'exidereachout.com' is now online and
is of immense help to its dealers, in order to track their supply positions. In
due course, it would become an invaluable tool to track customer preferences
and drive production planning, in accordance therewith.
A natural corollary of CRM, is Supply Chain Management, which the company is
now in the process of implementing; across its plants. It is expected that,
when fully functional, this will help to significantly reduce costs, through
better management of materials, working capital and inventories. All of these
will help relieve some of the intense pressure, that arises from the relentless
rise in Lead prices.
Finance
In order to contain inflation, the moves undertaken by the Ministry of Finance
and the Reserve Bank, have hardened interest rates at the year-end, which is
expected to have a fall-out on the growth rates of the company, However, the
overall borrowings of the company, have continued to remain within the
parameters drawn by the Board of Directors, despite turnover having increased
significantly.
External Commercial Borrowings of Japanese Yen equivalent to US$ 20 million,
were repaid by the company, during the year under review. Furthermore, an
additional amount of Rs. 1000 Millions was invested in maintaining the
company's 50% shareholding in ING Vysya Life Insurance Company Limited. The
Directors believe that this investment would be in the long term interest of
maximizing shareholder value, has had independent corroboration by equity
research analysts, who have opined that, the company's current share value has
indeed benefited from this investment.
Last year, the company had agreed to participate in the Haldia Integrated
Development Agency Limited. This is a body, which is devoted to undertaking
building of infrastructural facilities at Haldia and the company has subscribed
to shares of Rs.50 Lakhs for this purpose. The company had for some time now
been contemplating a move to disengage with the associate company MSA (India)
Limited, as there were no longer any synergies between the two organizations.
During the year under review, the company has finally sold its shareholding in
MSA (India) Limited, at an attractive price.
The company availed of a loan of Rs. 1000 Millions from its bankers for a three
year tenure, on a bullet repayment basis. As this was availed of in December
2006, the rate of interest were extremely competitive.
The company received approval from the shareholders, in order to sub-divide the
shares, which hitherto were for Rupees ten each, into ten shares of Rupee one
each. This move has resulted in increase in trading volumes of the company's
shares, on both BSE and NSE, as well as an increase in the shareholders
base.
Subsidiary
Companies
During the year under review, the Company's 100% subsidiary, Chloride
International Limited continued its operations in non-conventional energy
systems, such as solar lanterns and solar home lights. The turnover has
increased and profitability has been maintained.
The company's subsidiary in Singapore, Chloride Batteries S E Asia Pte Limited
has continued its profitable operations with a growth of 30%. It has continued
to strengthen its position in the South East Asian and Australian markets.
Traction batteries for industrial applications, continued to show healthy
growth. Profits for the year have also risen significantly.
The Company's other subsidiary Caldyne Automatics Limited, recorded an
increased gross turnover of over Rs. 260 Millions. While Caldyne's products
continue to be well received in the power sector, competition has intensified.
Nevertheless, the subsidiary has managed to increase its profitability during
the year under review.
The Company's subsidiary in United Kingdom, ESPEX Batteries Limited, has
continued to experience a strong demand in sales with a resultant growth of
nearly 20%. This subsidiary has also managed to post healthy profits, with
further improvement in its working capital management.
Associated Battery Manufacturers' (Ceylon) Limited, Sri Lanka, the company's
subsidiary, has posted a healthy growth. With the upgradation of
manufacturing facilities, it has for the first time, exported 65,000 batteries
to India. Clearly, synergies will continue to help a mutually beneficial relationship.
Future
Prospects
India continues to be the focus of attention, among emerging markets. The
developed world is fast realizing that, India represents a great opportunity
with its middle class, representing one of the largest markets, with low penetration
of first world goods and services. Analysts frequently compare China with India
and the one grouse that they all have is, the poor quality of infrastructure in
their country. In such a scenario, the Central Budget's thrust on
infrastructure presents a great opportunity for the company. Most of the
company's products are enmeshed with the rise of infrastructural facilities.
Recognising this as an opportunity, the Directors have decided to enhance
production capacity significantly, in order to tap this potential.
In the last decade, the company has grown manifold to reach targets which at
that point of time, seemed too ambious to dream about. The company has now
decided on expanding the company's operations even further, as it believes that
there is a rare opportunity which has presented itself as the India story
continues to unfold.
OUTLOOK
Subject maintained its position as India's and South Asia's largest power
solutions company. Actual production of automotive batteries for four wheelers
increased from 4.6 million units to 5.6 million units. Whereas for two wheeler
batteries, the increase was from 5.8 million units to 7 million units. The
production of batteries for industrial applications touched 1000 million
Ah.
In the domestic arena, Exide continued as the preferred choice for a large
number of vehicles. During the year, a number of new models were launched for
both the four wheelers as well as two wheelers. New entrants into India's
automotive market along with new models from existing players chose to put
their trust in the company's products with Honda Civic, Maruti Swift Diesel,
Zen Estilo, Hyundai Verna and Mahindra Renault Logan, all choosing the
company's batteries to power their vehicles into India's teeming metros.
The telecom and power segments saw a boom with consequent rise in demand for
the company's batteries for industrial applications in these two areas. Both
telecom and power are expected to clock healthy growth rates in the current
year, which will help the company generate high growth rates in industrial
batteries. Even though, the railway segment has now become a commodity market,
open to small scale operators, the company has managed to retain its share of
the more sophisticated applications along with a price increase for its
products. Cap lamp battery sales have also increased, despite the fact that
most of the new mines starting up in the country are open cast in nature, which
do not require this product in large quantities.
Fast moving industrial battery business presented an opportunity as well as a
challenge. Hitherto, the company sold its products to the OE manufacturers of
digital inverters and un-interrupted power supply systems for both the OE
segment and the replacement demand. However, it was felt that the OEM's were
cornering the replacement demand through OE supplies which were at a lower
cost, hence the company decided to sell directly in the trade segment and
restrict OE supplies. This has had a salutary effect both in terms of increase
in business as well as realizations.
Export of traction batteries lead continued to grow at a fast clip with the
United Kingdom, the European Continent, Australia, South Korea and South Africa
as markets where the company is now establishing its network. Export of
automotive batteries however were below last year's levels, primarily on
account of capacity constraints, as well as increased domestic demand, both in
OE and the Replacement segments.
Submarine battery deliveries continued during the year, with one set being
exported to Algeria in the last quarter of the year. Orders for further
batteries from the Indian Navy, have already been received and the company is
now focusing its attention on the international market.
During the past year, the price of Lead has continued to rise, over and above
the increase that took. place in the earlier two years. The company does not
expect Lead prices to moderate in this current year. The company's R&D
Centre at Kolkata, continued its efforts at redesigning products, as in the
past few years. These new products not only have utilised lesser quantity of
Lead, but also superior alloys, all of which combine to give the battery
certain unique selling propositions.
ADEQUACY
OF INTERNAL CONTROLS
Exide not only has a proper and adequate system of internal control but a
history and tradition bequeathed by its earlier British connection under which
all transactions are meticulously recorded, correctly reported, independently
verified and vouched.
The company's accounts are prepared on the SAP version 4.7 which has further
enhanced the management information system. Real time based decision-making is
the company culture. Focus is now being given to supply chain management
requirements and integration of the company's dealers in a manner such that
queries, orders and fulfillment thereof would all be available at the
'fingertips'.
The company has also undertaken an extensive exercise in building up a data
base of its end consumers and these have been used in both loyalty and customer
attention programmes that are part of the Customer Relationship Management
(CRM), that the company professes to believe in. The company has created a
portal exidereachout.com, where larger dealers can track their order positions
and supplies. It is expected that, this portal would become an extremely
important marketing tool, to help forecast demand in the coming years.
The company also has an extensive programme of internal audits, quality
circles, management reviews, all culminating into audit committee meetings,
which seek to ensure greater efficiency, transparency and accountability.
QUALITY
Quality continues to occupy a central stage in the company's perception of
those issues, which are required to attain organizational excellence. As a part
of this, it has imbibed a commitment to establish, maintain and improve upon
the quality management system in vogue in the organization. In tune with this
philosophy, not only has the company migrated from ISO 9001 - 1994 version to
the far more demanding ISO 9001-2000 version, it has also migrated from QS 9000
standard to the TS 16949. In addition thereto, the company has also obtained
ISO 14001 certification from TUV Nord of Germany. The company has introduced
TQM in all its major plants, which involves Total Productive Maintenance, Six
Sigma as well as Lean manufacturing. There is a programme for implementing
OHSAS 18001 for Health and Safety at all the plants of the company.
The Hosur plant has won the CII Exim Bank Business Excellence Award 2006, for
'Strong Commitment to Excel' and the Gold Award 2006 for 'Manufacturing
Excellence' from Frost & Sullivan, the well-known business forecasters.
Hosur has also won the Regional Award for Leadership & Excellence in
Safety, Health and Environment. The Shamnagar plant has won the CII Award for
Quality and Continuing Progress, whereas Haldia has won the ITC trophy for
Safety; Health & Environment. They have also bagged the second prize for
Quality Circle. The company's Haldia Plant has won the CII (ER) INDAL trophy
for HRD. The company's focus on quality has also won for it, the EFY Award for
the third year in succession.
|
I.
CONTINGENCIES |
Rs in Millions |
|
Contingent
liabilities not provided for in respect of |
|
|
- Bills
discounted with Scheduled Banks |
318.911 |
|
-
Outstanding Bank Guarantees/Indemnity Bonds |
58.136 |
|
-
Sales Tax, Excise Claims etc (net of Sales tax Declaration Forms since
collected) |
27.405 |
|
- Claims
against the Company not acknowledged as debts |
2.487 |
|
-
Guarantees given on behalf of a Subsidiary Company/employees |
0.000 |
FIXED
ASSETS
- Goodwill
- Land
- Freehold
- Leasehold
- Buildings
- Plant &
Machinery
- Moulds
- Furniture &
Finings
- Motor Vehicles
- Computers
AS PER
WEBSITE
Leaders in Power Storage Solutions
The Company is also the largest Power Storage Solutions
company in South and South East Asia. It manufactures the widest range of
storage batteries in the world from 2.5Ah to 20,600Ah capacity, to cover the
broadest spectrum of applications.
|
Capital |
Authorised Rs.1000 Millions,
Paidup 750 Millions |
||||||||||||
|
Turnover |
Rs. 13320 Millions as on
30.09.2007 |
||||||||||||
|
Employees |
Approx 3900 as on 30.09.2007. |
||||||||||||
|
Market
Share in Different Segments |
|
Company History
1916 Chloride
Electrical Storage Company (CESCO) UK set up trading operations in India as an
import house
1946 First factory set up in Shamnagar, West Bengal
1969 Second Factory, Chinchwad, Pune
1976 R&D Centre established in Kolkata
1981 Third factory, Haldia, West Bengal
1992 First Submarine batteries delivered to the Indian Navy
1994 Technical
collaboration with Shin Kobe Electric Machinery Company Limited of Japan, a
subsidiary of the Hitachi Group
1995 Chloride Industries Limited renamed Exide Industries Limited
1997 Fourth factory set up at Hosur, Tamil Nadu
1998 Exide acquires
the operations of Standard Batteries Limited & adds four more factories,
taking the total to eight.
2000 Acquisition of
10% stake in Chloride Batteries South East Asia(CBSEA), Singapore & 49% in
Associated battery Manufacturers Ceylon|(ABMEL), Sri Lanka.
Battery
charging commenced at Bawal, Haryana to cater to OEM JIT supplies
2001 Launch of
exidetraction.com, an e-commerce website for international customers of
traction batteries.
2002 Became second
largest 2-wheeler battery company in the world. Launch of “Achieve 100 PPM “ at
Hosur Plant
2003 Commissioning of Eighth Plant at Bawal, Haryana
New JV
company in UK- ESPEX Batteries Limited
Strategic
Alliance with IBG in Netherlands for Marketing in Europe
2004 Launch of exidereachout.com, a CRM initiative for Exide Trade
Company's
Segment-wise break-up of Revenue
The company broadly serves two segments viz. Automotive Batteries
and Industrial Batteryes (including submarine sub - segment). The contribution
of each segment towards the business of the company appear as under:
|
Segment
& Break-up |
|
%
Share |
|
Automotive Batteries |
|
|
|
OEM, Retail, Export &
Defence |
|
60% |
|
Industrial Batteries |
38% |
|
|
Railways |
2% |
40% |
|
|
|
100% |
EIL is the market leader in the organised sector in both the
automotive and industrial segments. 'EXIDE' and 'SF(Standard Furukawa)', the flagship
brands of the Company, are also the leading battery brands in the country.
The Company has the dominant share in the original equipment segment for
automobiles. It powers almost all the cars which have been introduced in India
such as Honda City, Honda Accord, Hyundai Santro, Hyundai Accent, Hyundai
Sonata, Suzuki Baleno and Suzuki Wagon R, Mitsubishi Lancer, Tata Indica, Tata
Indigo, Fiat Palio, Opel Corsa, Toyota Qualis, Mahindra Scorpio and Mahindra
Bolero. EIL also has the dominant share in the organised sector replacement
segment for Automobile batteries.
The Industrial applications of EIL batteries extend to Power, Telecom, Motive
Power, Mining, Railways, Emergency Lighting and Non-Conventional Energy
Sources. The Company is the largest manufacturer of caplamp batteries in the
world. It is also one of the five companies in the world which has the
capability to make submarine batteries for both Russian and German types.
EIL is the first battery company in the country to introduce polypropylene case
batteries and maintenance-free batteries. It is also the pioneer of several new
technologies like flat-plate, and tubular plate batteries.
By virtue of being the largest Sealed Maintenance Free(SMF) batteries in Asia
outside Japan, the Company has earned the status of a global supplier to
American Power Conversion, the largest UPS manufacturer in the world. Besides,
it also caters to other multinationals operating within the country i.e.
Siemens and Ericsson and other major players such as TVSE, HTL, Tata Liebert,
Numeric and ITI.
The Company has always believed in working closely with the Government in
developing and sustaining applications which are best suited to the country's
national interest. It has tried to do its bit for the country by providing
batteries specially tailored for Bofors guns, armoured vehicles and tanks,
wireless transmission, solar applications in remote areas and devising anti
pollution masks among others. The country's first battery powered electric
boat, designed and developed by EIL is an extension of its social initiatives
and it contributes towards building an eco-friendly and pollution free nation.
Exide was the first to introduce batteries for electric vehicles, traction
batteries for electric wheelchairs, flat-plate batteries for golf carts and
batteries for automated guided vehicles.
In an agrarian economy such as India, the farm sector is one which cannot be
ignored. Accordingly, Exide's avowed objective was to cater to the tractor segment
as a thrust area. Its major initiative, Project Kissan, has made steady inroads
into the rural regions, particularly those of the North and West. This has
helped to spread consciousness among the rural populace on the need to use eco
friendly and technologically superior batteries. Exide has made extensive use
of Kissan Melas and Dhabas to promote this scheme and has introduced "Jai
Kissan" battery to cater to the replacement market in this segment. In
furthering its social commitment, EIL has planned to adopt select villages to
improve social welfare.
The Company exports batteries which have captured niches in South East Asian
and European markets.
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.39.98 |
|
UK Pound |
1 |
Rs.78.57 |
|
Euro |
1 |
Rs.59.20 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
|
81 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|