MIRA
INFORM REPORT
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Report Date : |
15.03.2008 |
IDENTIFICATION
DETAILS
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Name : |
SALORA INTERNATIONAL LIMITED |
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Registered Office : |
D-13/4, Okhla Industrial Area, Phase II, New Delhi – 110 020 |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
20.11.1968 |
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Com. Reg. No.: |
55-4962 |
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CIN No.: [Company
Identification No.] |
L74899DL1968PLC004962 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DELS08465C |
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Legal Form : |
Subject is a public limited liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and marketing of TV Sets and Sub Assemblies thereof and Electronic Components. |
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 4630000 |
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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 company having fine track. Directors are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are fair. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered/Corporate Office : |
D-13/4, Okhla Industrial Area, Phase II, New Delhi – 110 020, India. |
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Tel. No.: |
91–11– 39848010 / 20 / 26833668/ 26834078/ 26833910/ 26831329 /51614322-27 |
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Fax No.: |
91-11-26835999/26388581 |
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Email : |
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Website : |
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Plant Location : |
˜ B-7/2, Okhla Industrial Area, Phase II, New Delhi ˜ B-243, Okhla Industrial Area, Phase - II, New Delhi ˜ Component Division: Plot No. B-31-34 & 50-53, Sector - 80, Noida, Uttar Pradesh ˜ Consumer Electronics Division : C-52, Phase II, Noida, Uttar Pradesh, India ˜ Wind Energy Division: Village Petle, Israde and Penhalipada, Taluka Sari, District Dhule, Maharashtra ˜ B-13-34, B-50-53, Sector-80, Noida, -201302, Uttar Pradesh, India Tel No. : 91-11-2568919/20/21 Email : compo-purchase@salora.com |
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Mumbai Office : |
201, Sumer Kendra, P. B. Marg, Worli, Mumbai- 400 018, Maharashtra, India |
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Branches : |
Located at:
Tel. No. : 91 – 22 – 24911084 / 24911332 / 24930566 Fax No. : 91 – 22 – 24950415 |
DIRECTORS
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Name : |
Mr. R. P. Khaitan |
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Designation : |
Vice Chairman and Managing Director |
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Date of Birth/Age : |
58 Years |
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Qualification : |
B. Com. |
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Experience : |
39 Years |
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Date of Appointment : |
19.10.1987 |
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Last Employment : |
Own Business |
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Name : |
Mr. Sushil Kumar Jiwarajka |
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Designation : |
Managing Director |
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Date of Birth/Age : |
50 Years |
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Qualification : |
B. Com. |
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Experience : |
29 Years |
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Date of Appointment : |
19.10.1987 |
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Last Employment : |
Own Business |
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Name : |
Mr. Gopal Kumar Jiwarajka |
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Designation : |
Managing Director |
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Date of Birth/Age : |
15.06.1960 |
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Qualification : |
B. Com. |
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Experience : |
21 Years |
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Date of Appointment : |
20.08.1987 |
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Expertise in
specific Functional Area: |
A commerce
graduate from Sydecham College Mumbai, he has wide experience of 27 years in
Manufacturing, Marketing and Finance. He has been instrumental in setting up
seven (7) manufacturing plants for colour television, audio systems and
components for the Company. |
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Directorships
held in other Public Companies |
1. Panasonic AVC Networks India Company Limited 2. SAB Electronics Limited 3. FX Info Technologies Limited 4. Salora Floritech Limited 5. Jadoonet Limited 6. Associated Electronic Research Foundation |
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Name : |
Dr. V. L. Dutt |
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Designation : |
Director |
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Name : |
Mr. P. N. Mehta |
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Designation : |
Director |
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Name : |
Mr. Ketan A. Dalal |
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Designation : |
Director |
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Name : |
Mr. Gautam Khaitan |
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Designation : |
Director |
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Name : |
Mr. Patanjali Govind Keswani |
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Designation : |
Director |
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Name : |
Mr. Sitaram Jiwarajka |
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Designation : |
Managing Director |
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Date of Birth/Age : |
31.05.1925 |
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Date of Appointment : |
18.05.1992 |
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Expertise in specific Functional Area: |
Shri Sita Ram Jiwarajka has extensive experience of 5 decades in the
field of Electronics, Electrical, Telecommunications, etc. He established the
first Radio assembly industry in the country at Kolkata in 1949. He has held
various important positions in several industry associations and presently is
Chairman of Association of Indian Dry Cell Battery Manufacturers. He was
Chairman of Indo-Korean Joint Business Council in 1993. |
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Directorships held in other Public Companies |
1. Panasonic AVC Networks India Company Limited 2. Nippo Batteries Company Limited 3. Panasonic Carbon India Company Limited 4. Associated Electronic Research Foundation |
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Name : |
Mr. Sanjeev Kumar Duggal |
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Designation : |
Director |
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Date of Birth/Age : |
09.12.1961 |
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Date of Appointment : |
28.10.2005 |
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Expertise in specific Functional Area: |
A sociologist by education, Mr Duggal has recently taken on the mantle
of leadership at Bharti Comtel as its CEO and-Executive Director. Bharti
Comtel is a process - led, multifaceted organization having core competency
in sourcing, recruiting and grooming talents. Prior to this, he was Managing Director and CEO of NIS Sparta Limited,
a Reliance ADA Group Company. He nurtured and transformed NIS Sparta from a
Sales related educational institution to an Education and Performance
Enhancement Solutions company in a short span of 10 years. Armed with more than 25 years of experience in training and
development, Mr. Duggal is known for his entrepreneurial flair and
creativity. A frequent speaker on issues related to "People, Capability
and Development" at national and international forums/ seminars. A visiting faculty at the Indian School of Business,
Hyderabad. He is a member of Cll, National Committee for Marketing and
customer Services. He has to his credit various recognitions and awards
including Udyog Rattan Award (Institute of Economic studies) and Senior Gold Director – Outstanding Sales
Achievement & Commitment to professional Excellence (Inscape Publishing). |
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Directorships held in other Public Companies |
SAP Investment Limited |
KEY EXECUTIVES
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Name : |
Sandeep Sabharwal |
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Designation : |
Company Secretary |
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Name : |
R. Sridharan |
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Designation : |
Chief Finance Officer |
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Name : |
Mr. B. L. Chandak |
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Designation : |
Senior General Manager (Finance & Accounts) & Company
Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2007
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Individuals |
1953264 |
22.18 |
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Companies |
912806 |
10.36 |
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Promoters |
3569220 |
40.53 |
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Group Companies |
2303279 |
26.15 |
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Flls, NRIs, OCBs |
65831 |
0.75 |
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Mutual Fund, Banks, Fis |
2900 |
0.03 |
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Total |
8807300 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and marketing of TV Sets and Sub Assemblies thereof and Electronic Components. |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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TV Sets and Sub Assemblies thereof |
Nos. |
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300000 |
123046 |
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Electronic Components |
Nos. |
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15100000 |
12087236 |
GENERAL
INFORMATION
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Suppliers : |
Ř Ajay Meru Metals
Private Limited Ř Ajay Meru
Packaging Ř Amrit
Enterprises Ř Anurina Tristar Ř East India
Packaging Private Limited Ř Esquire Technologies
Private Limited Ř G.S.P.EIectronics
Private Limited Ř H.A.Technologies Ř Harlalji Sons
Packaging Private Limited Ř Hora Art Centre
Private Limited Ř Jawa Plastics
Private Limited Ř Khanna Traders
and Engineers Ř Madhuri
Packaging Industries Private Limited Ř Metafix
Industries Ř Noida
Electronics Ř Ocean
Electronics Ř Paper Creations Ř Paragon Products Ř Paramount
Connector Systems Private Limited Ř Precision
Products Ř Prem Mechanical
Works Ř Samwon Precision
Mould Mfg India Private Limited Ř Sinanics Components
Private Limited Ř Technomat
Composheet Private Limited Ř Tei Technologies
Private Limited Ř Vabros I Private
Limited Ř Vaish
Industrises Ř Vineet Packaging
Industries |
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No. of Employees : |
1300 |
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Bankers : |
Ř State Bank of India, New Delhi Ř The Bank of Tokyo-Mitsubishi Limited, New Delhi Ř Canara Bank, New Delhi Ř HDFC Bank Limited, New Delhi Ř Standard Chartered Bank |
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Facilities : |
Notes: [a] Foreign
currency loan referred to in 'A' are secured against first ranking exclusive
charge over immovable and movable fixed assets (both present and future) relating
to the project situated at Dhule in the state of Maharashtra. [b] Vehicle Loan
referred to in 'A' are secured against hypothecation of car. 2. Working Capital Loans referred to in 'B'
are secured by hypothecation of inventories and receivables and first
pari-pasu charge with PICUP on immovable properties of Noida units as
collateral security and personal guarantee of two Directors. 3. Interest free Loan from PICUP under sales
tax deferred scheme is secured by first charge on all movable fixed assets
(present & future) of Noida units and first pari-passu charge with
bank(s) on immovable properties of Noida units. 4. Finance Lease obligations are secured
against the assets taken on lease.
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
K. Prasad and Company Chartered Accountants |
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Associates : |
Ř FX Info Technologies Limited Ř Encompass Software and Systems Private Limited Ř Panasonic AVC Network India Limited |
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Other Related Parties : |
Ř Jadoonet Limited
Ř Associated
Electrical Agencies Ř Associated
Electronic Research Foundation Ř Positive
Electronics Limited Ř R P Electronics Ř Radiohms Agencies Ř Sab Electronics
Limited Ř Salora Floritech
Limited Ř Moza Hosiery
India Limited Ř Essjay Ericsson
Private Limited Ř Salora
Components Private Limited Ř Nippo Batteries
Limited Ř Ericsson India
Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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20000000 |
Equity Shares |
Rs. 10/- each |
Rs. 200.000 Millions |
Issued and Subscribed :
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No. of Shares |
Type |
Value |
Amount |
|
8820000 |
Equity Shares |
Rs. 10/-
each |
Rs. 88.200
Millions |
Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
8807300 |
Equity Shares |
Rs. 10/-
each |
Rs. 88.073
Millions |
|
12700 |
Add : Share Capital forfeited |
Rs. 5.65/-
each |
Rs. 0.072
Millions |
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Total |
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Rs. 88.145 Millions |
Note
Out of the above
960000 Equity Shares of Rs. 10/- each were issued as Fully Paid Up Bonus Shares
by capitalisation of General Reserve.
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 |
88.145 |
88.145 |
88.100 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1071.818 |
955.523 |
893.000 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1159.963 |
1043.668 |
981.100 |
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LOAN FUNDS |
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1] Secured Loans |
434.349 |
100.688 |
240.600 |
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2] Unsecured Loans |
21.891 |
12.472 |
7.100 |
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TOTAL BORROWING |
456.240 |
113.160 |
247.700 |
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DEFERRED TAX LIABILITIES |
104.293 |
30.416 |
0.000 |
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TOTAL |
1720.496 |
1187.244 |
1228.800 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
569.565 |
306.566 |
332.300 |
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Capital work-in-progress |
0.000 |
7.538 |
0.000 |
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INVESTMENT |
116.935 |
82.787 |
77.600 |
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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 |
917.050
|
599.330 |
854.100
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Sundry Debtors |
951.730
|
522.074 |
366.000
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Cash & Bank Balances |
116.518
|
60.893 |
36.100
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Other Current Assets |
10.252
|
5.955 |
0.000 |
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Loans & Advances |
168.388
|
146.420 |
98.600
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Total
Current Assets |
2163.938
|
1334.672 |
1354.800 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1078.792
|
512.541 |
508.900
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Provisions |
51.150
|
31.778 |
27.400
|
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Total
Current Liabilities |
1129.942
|
544.319 |
536.300 |
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Net Current Assets |
1033.996
|
790.353 |
818.900
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1720.496 |
1187.244 |
1228.800 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
8690.794 |
5676.625 |
5291.000 |
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Other Income |
152.484 |
178.819 |
0.000 |
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Total Income |
8843.278 |
5855.444 |
5291.000 |
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Profit/(Loss) Before Tax |
247.197 |
163.165 |
220.600 |
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Provision for Taxation |
84.533 |
55.466 |
78.600 |
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Profit/(Loss) After Tax |
162.664 |
107.699 |
142.000 |
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Earnings in Foreign Currency : |
239.094 |
199.380 |
128.050 |
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Total Imports |
6955.734 |
3678.816 |
3359.020 |
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Expenditures : |
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Increased/Decrease in Stock |
[340.450] |
154.894 |
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Manufacturing Expenses |
356.130 |
278.034 |
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Personal Expenses |
172.794 |
157.553 |
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Raw Material Consumed |
8351.743 |
5044.314 |
5070.400 |
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Interest |
27.501 |
11.441 |
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Depreciation & Amortization |
53.453 |
51.271 |
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Investment Written Back |
0.000 |
5.228 |
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Profit on sale of Kashipur Unit |
25.090 |
0.000 |
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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 |
2448.600
|
2842.100
|
3329.900
|
|
Other Income |
3.200
|
5.800
|
5.200
|
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Total Income |
2451.800
|
2847.900
|
3335.100
|
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Total Expenditure |
2302.300
|
2730.100
|
3231.400
|
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Operating Profit |
149.500
|
117.800
|
103.700
|
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Interest |
56.000
|
9.000
|
10.500
|
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Gross Profit |
93.500
|
108.800
|
93.200
|
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Depreciation |
13.200
|
13.100
|
13.200
|
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Tax |
26.400
|
31.800
|
25.900
|
|
Reported PAT |
50.600
|
62.800
|
49.300
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.26 |
0.18 |
0.24 |
|
Long Term Debt-Equity Ratio |
0.20 |
0.10 |
0.10 |
|
Current Ratio |
1.80 |
2.12 |
1.98 |
|
Fixed Assets |
10.72 |
8.78 |
8.01 |
|
Inventory |
11.87 |
8.24 |
7.05 |
|
Debtors |
12.21 |
13.49 |
12.52 |
|
Interest Cover Ratio |
9.06 |
15.32 |
13.68 |
|
Operating Profit Margin(%) |
3.35 |
3.65 |
5.56 |
|
Profit Before Interest And Tax Margin(%) |
2.77 |
2.91 |
4.66 |
|
Cash Profit Margin(%) |
2.22 |
2.54 |
3.68 |
|
Adjusted Net Profit Margin(%) |
1.64 |
1.80 |
2.78 |
|
Return On Capital Employed(%) |
17.97 |
14.64 |
20.59 |
|
Return On Net Worth (%) |
13.39 |
10.64 |
15.17 |
LOCAL AGENCY
FURTHER INFORMATION
The company’s fixed assets of important value include freehold land, leasehold land, building, furniture and fixture, plant & machinery, dies & moulds, motor vehicles and office equipments.
Type of Products:
Ř Mobile Phones, IT
Products and Accessories
Ř Fly Back
Transformer(EHT)
Ř Loudspeaker and
Deflection Yoke
Ř TV sets
Ř VCD and DVD
Players
Ř Sub-assemblies
thereof
Ř Wind Energy
Generation
MANAGEMENT DISCUSSIONS AND ANALYSIS
COMPANY OVERVIEW:
Salora International
Limited (Reuters: SALI.BO), is the flagship company of Rs.15000 Millions Jiwarajka Group. The Company was formed in
the year 1968, It had its IPO in the year 1993 and is listed on The Stock
Exchange, Mumbai and the National Stock Exchange.
During the financial year,
net sales increased from Rs. 5842.600 Millions to Rs.8833.700 Millions. The
Board has recommended dividend of 45% on its equity share capital against a
total dividend of 45% paid last year. The Company employs 1215 people.
BUSINESS OVERVIEW:
The operations of the
Company can be classified into four main areas of business.
1. Infocom business:
Infocom Division is
involved into the distribution of the following products:
Ř
Sony Ericsson
- National Distribution and Global Service Partner of mobile handset
Ř
BenQ
Siemens - National Distributor and Authorised Service Provider of mobile
handset
Ř
Acer -
National Distributor of laptops, Desktops, TFTs and LCD projectors
Ř
Fujitsu
- National Distributor of Laptops, desktops and TFTS
Ř
Fusion
- National Distributor of Car Audio Systems
Ř
Moser
Baer - National Distributor of USB Drives
Ř
River
- National Distributor of MP3 Player
Salons has become one of
the leading distribution companies in the IT & telecom space. It has 25
branches spread all over the country. The Company has approximately 500
sub-distributors who are reaching out to approximately 20,000 dealers The
Company is connected by a VPN and the complete operation is controlled by an
Oracle based ERP system.
The turnover for this
duration has shown impressive growth going up from Rs.4584.100 Millions to
Rs.7521.800 Millions. Mobile phones which constitute a major pan of the
turnover has shown a robust growth, keeping in line with the rapid growth in
the mobile subscriber base. The Company has been running innovative channels
schemes and incentives to keep the dealers motivated and this has contributed
to the healthy growth. The Company has tied up with HSBC (Hong Kong and Shanghai
Banking Corporation) to provide channel finance to fund the additional capital
required for the further expansion of business.
The Computer business
remained stagnant as there was intense competition from the other distributors
as well as ACER not achieving its target.
Fujitsu, being a new
entrant in the Indian market, is getting positioned Fujitsu has requested the
company to carry out the end to end activities in marketing and distribution,
including advertisement and promoting exclusive counters.
In the car Audio Systems
segment the company has launched the products to the Delhi market and the
response has been encouraging.
With Moser Baer the
distribution of USB drive has gone off well in the initial three months of
business.
I River MP3 Players are being re-launched with new model line up and pricing to
suit the Indian market.
2. Component
Division:
Electronic component
segment includes manufacturing of television components such as Fly Back
Transformers (FBT), Deflection Yokes (DY) and Loudspeakers (LSP). The company
had technology collaboration with Matsushita Electric, Japan (Panasonic) for
manufacturing of FBT and DY. Presently Salons is a major manufacturer of FBT
and DY components for Flat screen colour picture tubes.
The CTV market for the
fiscal year 2006-07 was 12 million. The demand for components produced by the
company are directly related to the growth in CTV Industry. The CTV industry
has grown by 10% during the period under review over the preceding year.
Although the demand for the components has increased, margins are under
unprecedented pressure on account of rising input costs 8 cheaper imports from
China. The future prospects of the Indian TV components industry lie in
maintaining cost leadership. The industry has to compete with China and also
innovate in containing costs. The
company has developed value engineering design for FBT, CDY and LSP which are
cost effective by rationalization of manufacturing cost and quality improvement
drive.
During the year, new
production line for LSP has been installed at Pune specially for west zone
customers viz. Videocon, L.G. (Punt), Chips, Kalyani Sharp etc. During 2007-08
company plans to enhance the capacity to 2 assembly, lines at dune for the
production level of 4-5 Million LSP per year. As the west zone customers demand
will be supplied by Pone plant they can supply more quantity from their NOIDA
plant to the existing customers as well as they can add new customers.
The company has developed
many models of LSP for Slim TV with new technology of ND magnets and has
started the mass production for L.G. and Panasonic.
Low cost 21' Flat DY (V2
type) has been developed and approved by the customer. Mass production of this
DY started from April '07. This DY is suitable for 21' Flat Samtel CPT as well
as Samsung CPT.
During the year 2006-07 the
Company sold 24,37,058 Nos. of CFBT thus a decline of 0.70% over the previous
year 54.415). In value terms, the turnover decreased from Rs.246.100 Millions
to Rs.23.69 cores, registering a decrease of 3.73%.
During the year 2006-07 the
Company sold 1936512 Nos. of CDY, posting an increase of 2.84% over the
previous year (1882969). The turnover in value terms increased from wit 236.100
Millions to Rs.254.700 Millions, registering an increase of 7.83%.
During the year, the
Company sold 7728445 Nos. of speakers, resubmit in an increase of 3.17% over
the previous year (4,90,751). However, the turnover in value terms declined
Rs.259.500 Millions to Rs.242.300 Millions, registering an decline of 6.61% due
to pressure on selling prices.
3. Consumer Electronics Division:
The Consumer Electronics
market continues to remain highly competitive with customers becoming
increasingly demanding for better price and improved features. In this
scenario, the company achieved a sale of 103.073 CTV as against 74659 CTV in
the previous year resulting in a growth of 38.06%. The turnover of the division
increased from 527.900 Millions last rear to 564.800 Millions during 2006-07.
Sale of non remunerative products like black & white televisions and VCDs
has been discontinued, and existing stocks liquidated.
On the price front also,
the industry has witnessed continuous erosion of margin over years. The key
factors contributing to this trend are steady decline in duties, rising input
costs, increased competition, and lower technology costs. With multinational
companies focusing more on the high-end sets, the market is shifting from
curved to flat TVs, LCD and Plasma TVs.
The Company has developed
low cost chassis based on Ultimate One Chip Processor, which has been extended
to tow cost version with wide voltage range operation to cater to rural areas.
This has resulted in better competitiveness in the market, higher
realization/margins and has reduced reliance on foreign technology for low cost
products. CTV under a sub brand CHAMPION is being launched to compete with
other brands in this segment.
The Company had entered
into Technical collaboration and Licence Agreement with M/s. TEAC Corporation,
a corporation established in Japan (TEAC) during the year. After a detailed
study, the Company has launched TEAC products in Delhi and National Capital
Region and would be expanding the operations regionally and hopes to have a PAN
India presence by December 2007.
4. Wind Power Project:
Keeping in view of acute
shortage of power through out the country and increased focus on renewable
energy, the Company has installed the Wind Power plants of 6.25 MW at Dhulia in
Maharashtra during end of July, 2006. A
Power Purchase Agreement for 13 years has been signed with Maharashtra State
Electricity Distribution Company Ltd. The company has also signed operation and
maintenance agreement with the equipment supplier. The Company besides earning
a steady income from sale of power will also be entitled to Carbon Credits and
substantial tax benefits. The Company had raised an External Commercial
Borrowing of US $5 million from State Bank of India, Nassau to part finance the
project cost of Rs.34.00 crones.
Operational Results:
The following factors
have impacted the operational results of FY 2006-07:
1. Majority of
raw materials like metals and plastics registered unprecedented rise globally
resulting in higher raw material costs for the company. However, copper prices
showed signs of softening during the year end.
2. Intense
competition especially from multinational brands drove prices downwards,
resulting in lower margins for the Company.
3. However,
foreign exchange rates were generally favourable to the company.
Revenues:
During the year,
gross revenues of the Company increased by Rs.3003.400 Millions i.e. by 50% to
Rs.9001.000 Millions from Rs.5997.600 Millions last year.
Expenditure:
Total Expenses increased by 61.69% to Rs.8961.600 Millions from Rs.5542.600
Millions. These expenses include cost of finished tradable goods, raw materials
and other direct costs.
Cost of Goods Sold:
Cost of Goods
Sold', including finished tradable goods and raw materials, has increased by
65.57% to Rs.8351.700 Millions from Rs.5044.300 Millions last year.
Personnel Cost:
During the
year, Personnel expenses have increased by 9.64% to Rs.172.800 Millions from
Rs.157.600 Millions in the previous year, mainly due to the increase in
compensation and benefits to employees.
Selling, General & Administrative Expenses:
During the
financial year, other operating expenses have increased from Rs.278.000
Millions to Rs.356.100 Millions.
Management Risk:
The company has
achieved significant income growth in recent periods and is poised for rapid
growth in the future. This will place significant demand on its managerial and
other resources. Continued growth in a competitive environment increases the
challenges involved in recruiting and retaining skilled personnel. Failure to
manage this vital resource effectively could have an adverse effect on the
company's business prospects. The Company is constantly reviewing it's HR
practices and incentives its talent pool for keeping their performance at
optimum levels.
Competition:
The Infocom division operates in a highly competitive space where the Company
is directly competing with the few leading global brands in the segments in
which the Company is operating. However the Company teas gained expertise in
distribution and is competing with leading multinational brands. Market
dynamics of this business are high. impacting the demand and price. The Company
has taken this factor in stock building and pricing.
The Components
division is impacted fluctuations in foreign currency, movement of global
prices of metals and plastics. The Company is constantly improving its product
range and supply base for raw materials.
Greg the year, the Company enhanced its capacities for FBT DY and LSP to
achieve economies of scale and meet seasonal peaks in demand.
Consumer
Electronics division is operating in a fiercely competitive market where me
large MNC players are constantly defining the benchmarks for pricing and
quality. The company has adopted a niche market strategy with focused
penetration and moneyed quality products to meet this competition.
Regulatory issues impacting the
industry:
Any fluctuation
in the excise and custom duties affects the business of the Company. With the
change in government and its policies. The Company may be affected adversely in
case of any duty increase. However, the trend has been to align duties to
international levels, which are significantly lower than those in India.
Technology Risk:
The mobile
handset technology is fast changing. Fortunately the technology of Sony
Ericsson and Bend Siemens is advanced and ahead of the market, strengthening
their market position.
In the
components and consumer electronics segment, any major shift towards LCD
technology can have an adverse impact on the sales and profitability, of the
company. However with the large differential in pricing, the Company does not
foresee any significant drop in sales of conventional TVs in the near
future.
BUSINESS OUTLOOK:
INFOCOM:
The rapidly growing mobile users and the rise in the spending of the middle
class augurs well for the demand of the companies products like mobile phones,
computers and IT peripherals. The Company is further strengthening its
infrastructure, manpower and geographical coverage to cater to this growing
demand. The Company is also exploring the possibility of expanding its
portfolio in the mobile and IT space. The possibility of starting new products
like personal health are products is under consideration.
Having achieved
success in its distribution business, and as a strategy to own the consumer and
control the value chain further, the company has decided to foray into the
retailing of electronic goods. This has been done on the basis of the
.visibility report received from M/s. Technopack Consultant.
CONSUMER ELECTRONICS:
With launch of
new innovative products, greater value engineering, cost rationalization and
leveraging the combined strength of TEAC and Salon Brands, the Company is very
hopeful of improving the performance of this division. The addition of the
Fusion Car Audio products will further strengthen this division.
COMPONENTS:
With
its efforts to have new value engineered designs and cost rationalization the
company hopes to compete more effectively in the coming year. The new Speaker
line in Pure should bring additional speaker business.
The declining
demand for CRT based televisions put demand and margin for FBT and DY under
intense pressure. The Company is continuously striving to find solution to this
situation.
Jadoomet Limited:
The continued impasse
in the CAS policy has impacted the business plan of the Company. Company is
looking out for other business opportunities. In the interim, Company has
judiciously deployed its surplus funds and has earned reasonable profits It has
also obtained NBFC status from Reserve Bank of India.
BUSINESS OPERATIONS
During the period
under review, the turnover of the Company registered improved performance.
However, the year witnessed rise in input costs viz. metals, ferrite, plastics
etc. Net Sales of Rs. 8833.700 Millions was achieved for the year ended 31st March, 2007 (Rs.
5842.700 Millions in 2005-06), posting a growth of 51.20%. Profit before
interest, depreciation, write-offs and Provisions for the year increased to Rs.
328.200 Millions from Rs. 220.600 Millions during the preceding year.
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. 40.77 |
|
UK Pound |
1 |
Rs. 82.10 |
|
Euro |
1 |
Rs. 64.48 |
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 |
YES |
|
--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. |
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 |
|