MIRA
INFORM REPORT
|
Report Date : |
03.05.2008 |
IDENTIFICATION
DETAILS
|
Name : |
ASHOK LEYLAND
LIMITED |
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Registered Office : |
19 Rajaji Salai,
Chennai – 600 001, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
07.09.1948 |
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Com. Reg. No.: |
18-105 |
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CIN No.: [Company
Identification No.] |
L34101TN1948PLC000105 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHEA00171D /
CHEA07627E |
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PAN No.: [Permanent
Account No.] |
AAACA4651L |
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Legal Form : |
Public Limited
Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of
Commercial Vehicles, Engines and Ferrous Castings. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 76000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established and reputed company having satisfactory track. The company
is a part of Hinduja Group. Available information indicates high financial responsibility
of the company. Directors are reported as experienced, respectable and
resourceful businessmen. Their trade relations are reported as fair. Payments
are reported as correct and as per commitments. The company can
be considered good for normal business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered
Office : |
19 Rajaji Salai,
Chennai – 600 001, Tamilnadu, India |
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Tel. No.: |
91-44-25342141 |
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Fax No.: |
91-44-25342493 |
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E-Mail : |
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Website : |
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Factory : |
Located at : Ennore Post Box No. 3,
Ennore, Chennai 600 057, Tamil Nadu Hosur – Unit IIA Cab Panel Press
Shop, SIPCOT Industrial Complex, Mornapalli Village, Hosur 635 109, Tamil
Nadu Hosur - Unit I 175 Hosur Indl.
Complex, Hosur 635 126, Tamil Nadu Hyderabad (***) Ductron Castings,
B-15, IDA-Uppal, Hyderabad 500 039, Andhra Pradesh Bhandara Plot No.l MIDC
Industrial Area, Village Gadegaon, .Sakoli Taluk, Bhandara 441 904,
Maharashtra Ambattur, Chennai 3A/A&2 North
Phase, Sidco Industrial Estate, Ambattur, Chennai 600 098 Tamil Nadu Hosur - Unit II 77 Electronic
Complex, Perandapalli Village, Hosur 635 109, Tamil Nadu Alwar Plot No.SPL 298,
Matsya Indl. Area, Alwar 301 030, Rajasthan Technical Centre Vellivayal
Chavadi, Via Manali New Town, Chennai 600 103 |
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Sales and
Marketing Division : |
480 Anna Salai,
Nandanam, Chennai – 600 035, Tamilnadu |
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Tel. No.: |
91-44-24341536 |
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Fax No.: |
91-44-24346220 |
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E-Mail : |
DIRECTORS
|
Name : |
Mr. R J Shahaney |
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Designation : |
Chairman |
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Name : |
Mr. R Seshasayee |
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Designation : |
Managing Director
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Name : |
Mr. D G Hinduja |
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Designation : |
Vice Chairman (Alternate : Y M Kale) |
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Name : |
Mr. D J Balaji
Rao |
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Designation : |
Director |
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Name : |
Mr. F J Colon
Martinez (Alternate : G Sagone) |
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Designation : |
Director |
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Name : |
Mr. A K Das (Alternate : IN Chatterjee) |
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Designation : |
Director |
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Name : |
Mr. P N Ghatalia |
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Designation : |
Director |
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Name : |
Mr. H Klingele (Alternate : A Spare) |
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Designation : |
Director |
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Name : |
Mr. S R
Krishnaswamy (Representing LIC) |
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Designation : |
Director |
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Name : |
Mr. E A
Kshirsagar |
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Designation : |
Director |
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Name : |
Mr. F Sahami |
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Designation : |
Director |
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Name : |
Mr. R Seshasayee,
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Designation : |
Managing Director |
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Name : |
Mr. A Spare |
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Designation : |
Director |
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Name : |
Mr. S V Young |
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Designation : |
Director |
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Name : |
Mr. S Shroff |
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Designation : |
Director |
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Name : |
Mr. Subir Raha |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Vinod K Dasari |
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Designation : |
Chief Operating
Officer |
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Name : |
Mr. J N Amrolia |
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Designation : |
Executive
Directors |
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Date of
Joining : |
16/05/1980 |
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Qualification
: |
BA (Hons.), M. A.(P.M & L.W) |
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Previous
Employment : |
Selection and Training Manager, Brooke Bond India Limited, Kolkata |
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E-mail : |
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Name : |
Mr. S
Balasubramanian |
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Designation : |
Executive
Directors |
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Name : |
Mr. K S Kumar |
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Designation : |
Executive
Directors |
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Name : |
Mr. Rajinder
Malhan |
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Designation : |
Executive
Director – International Operations |
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Name : |
Mr. S Nagarajan |
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Designation : |
Executive
Directors |
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Name : |
Mr. M Natraj |
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Designation : |
Chief Programmes
Mentor |
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Name : |
Mr. K Sridharan |
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Designation : |
Executive Directors |
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Name : |
Mr. A Bhat |
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Designation : |
Executive Director |
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Name : |
Mr. A R Chandrasekharan |
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Designation : |
Executive Director |
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Name : |
Mr. B M Udayshankar |
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Designation : |
Executive Director |
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Name : |
Mr. Rajive Saharia |
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Designation : |
Executive Director – Marketing |
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Name : |
Mr. N
Sundararajan |
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Designation : |
Executive
Director Company Secretary |
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E-mail : |
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Name : |
Mr. Shekhar Arora |
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Designation : |
Executive Director – HR |
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Name : |
Mr. Srikant Srinivasan |
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Designation : |
SD – HR |
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Name : |
Mr. R. R. G. Menon |
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Designation : |
Executive Director – PD |
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Name : |
Mr. Sundaram
Parthasarathi |
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Designation : |
SD – Business
Planning |
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|
Name : |
Mr. Thomas T.
Abraham |
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Designation : |
GM – Corporate
Communications |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
AS ON 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Foreign |
|
|
|
Bodies Corporate ** |
513618712 |
44.60 |
|
Public
Shareholding |
|
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|
Institutions |
|
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Mutual funds / UTI |
31921380 |
2.77 |
|
Financial Institutions / Banks |
1095178 |
0.10 |
|
Central Government / State Governments |
1109360 |
0.10 |
|
Insurance Companies |
198961296 |
17.28 |
|
Foreign Institutional Investors |
156390047 |
13.58 |
|
Any other (specify) - Foreign banks |
1300 |
0.00 |
|
Non-Institutions |
|
|
|
Bodies Corporate |
33783599 |
2.93 |
|
Individuals |
|
|
|
Individual shareholders holding Nominal share capital upto
Rs 0.100 Million |
168833406 |
14.66 |
|
Individual shareholders holding Nominal share capital in
excess of Rs 0.100 Million |
13842943 |
1.20 |
|
Any other -Clearing members |
8654581 |
0.75 |
|
Any other -Trusts |
242730 |
0.02 |
|
Any other -Corporate body - Foreign Bodies |
1567485 |
0.14 |
|
Any other –NRI |
21545475 |
1.87 |
|
Any other –OCB |
1005 |
0.00 |
|
Any other -Foreign Nationals |
58250 |
0.01 |
|
Total |
1151626747 |
100.01 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing of
Commercial Vehicles, Engines and Ferrous Castings. |
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Products : |
Item Code No. (ITC Code) 87060042 Product Description Commercial
Vehicles Item Code No. (ITC Code) 84089010 Product Description Engines Item Code No. (ITC Code) 73259910 Product Description Ferrous
Castings |
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Imports : |
|
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Countries : |
Germany, Italy
and Japan |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed Capacity |
Actual Production |
|
Commercial
Vehicles |
Nos. |
77200 |
65085 |
|
Ferrous Castings |
Tonnes |
-- |
7190 |
|
Engines @ |
Nos. |
-- |
-- |
GENERAL
INFORMATION
|
No. of Employees : |
13218 |
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|
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Bankers : |
·
Bank of America ·
Bank of Baroda ·
Canara Bank ·
Central Bank of India ·
Citibank N.A. ·
HDFC Bank Limited ·
ICICI Bank Limited ·
IDBI Bank Limited ·
Punjab National Bank ·
Standard Chartered Bank ·
State Bank of India ·
The Hongkong and Shanghai Banking Corporation Limited ·
ANZ Grindlays Bank Limited , 232 , NSC Bose Road , 600001 Chennai (TN) ·
Central Bank of India , Chennai Stock Exchange Bldg, 11, 2nd
Line Beach , P.O. Box 190 , 600001 Chennai (TN) India ·
Canara Bank,
Ana Nagar (East) Branch, 600102 Chennai (TN) India. |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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|
Name : |
M S Krishnaswami
and Rajan Deloitte Haskins
and Sells Chartered Accountants |
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Cost Auditors
: |
Geeyes and
Company |
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Collaboration:
|
IVECO Fiat SpA,
Italy |
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Holding
Company : |
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Subsidiaries : |
v Ashok Leyland Information Technology
Limited v
Ashok
Leyland Investment Services Limited |
|
|
|
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Membership : |
Confederation of
Indian Industry |
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|
|
|
Associates : |
v Automotive Coaches & Components
Limited C1&D6 Sipcot Industrial Complex, Gummidipoondi – 601 201,
Tamilnadu Tel No. 91-4119-222568 Fax No. 91-4119-222560 E-Mail: snb@smc.sprintrpg.net v Lanka Ashok Leyland, Sri Lanka 24, Duplication Road, Colombo – 4, Sri Lanka Tel No. 0094-1-502532 Fax No. 0094-1-502286 E-Mail: cowsik@alm.sprintpg.net.in v PL Haulwel Trailers 480, Anna Salai, Nandanam, Chennai – 600 035, Tamilnadu Tel No. 91-44-24330824 Fax No. 91-44-24346840 E-Mail: al@ashokleyland.com v Ashok Leyland Finance Limited 86, Chamiers Road, Chennai, Tamilnadu Tel No. 91-44-24351934 Fax No. 91-44-24343646 E-Mail: agm.bp@alf.sprintrpg.ems.vsnl.net.in v Ennore Foundries Limited Ennore, Chennai – 600 057, Tamilnadu Tel No. 91-44-25733103 Fax No. 91-44-25733390 E-Mail: al@ashokleyland.com v Ashok Leyland Project Services Limited 477-480, Anna Salai, Nandanam, Chennai – 600 035, Tamilnadu Tel No. 91-44-24331120 Fax No. 91-44-24338344 E-Mail: afc@alc2.global.net.in v Ashley Holdings Limited v Ashley Investments Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1500,000,000 |
Equity Shares |
Rs.1/- each |
Rs.1500.000 millions |
Issued, Subscribed
& Paid-up Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
1323874000 |
Equity shares |
Rs.1/- each |
Rs.1323.900 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
1323.900 |
1221.590 |
1189.290 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
17621.800 |
12902.940 |
10489.360 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH
|
18945.700 |
14124.530 |
11678.650 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
3602.200 |
1846.910 |
2634.960 |
|
|
2] Unsecured
Loans |
2801.800 |
5072.370 |
6169.100 |
|
TOTAL BORROWING
|
6404.000 |
6919.280 |
8804.06 |
|
|
DEFERRED TAX
LIABILITIES |
0.000 |
1796.890 |
1708.480 |
|
|
|
|
|
|
|
TOTAL
|
25349.700 |
22840.700 |
22191.190 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
13070.400 |
9432.710 |
8938.460 |
|
Capital work-in-progress
|
2374.900 |
1414.170 |
851.550 |
|
|
|
|
|
|
|
INVESTMENT
|
2210.900 |
3681.780 |
2291.900 |
|
|
DEFERRED TAX ASSETS
|
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS &
ADVANCES
|
|
|
|
|
|
|
Inventories
|
10703.200
|
9025.610
|
5680.810
|
|
|
Sundry Debtors
|
5228.800
|
4243.370
|
4587.660
|
|
|
Cash & Bank Balances
|
4349.400
|
6028.760
|
7966.820
|
|
|
Loans & Advances
|
6869.900
|
3026.390
|
3337.340
|
Total Current Assets
|
27151.300
|
22324.130
|
21572.630
|
|
Less :
CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
18659.700
|
11468.950
|
9611.870
|
|
|
Provisions
|
1042.300
|
2616.210
|
2044.80
|
Total Current Liabilities
|
19702.000
|
14085.160
|
11656.670
|
|
Net Current Assets
|
7449.300
|
8238.970
|
9915.960
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
244.200 |
73.070 |
193.320 |
|
|
|
|
|
|
|
TOTAL
|
25349.700 |
22840.700 |
22191.190 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
84754.200
|
61704.100
|
48868.100
|
|
|
Other Income |
1115.600
|
873.400
|
813.600
|
|
|
Total Income |
85869.800 |
62577.500 |
49681.700 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
6045.100
|
4523.000
|
3550.100
|
|
|
Provision for Taxation |
1632.200
|
1249.800
|
836.000
|
|
|
Profit/(Loss) After Tax |
4412.900
|
3273.200
|
2714.100
|
|
|
|
|
|
|
|
|
Earnings in Foreign Currency |
NA |
4513.050 |
5228.750 |
|
|
|
|
|
|
|
|
Imports Value |
NA |
1457.420 |
1062.740 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Raw Materials |
54937.800
|
41336.200
|
30524.900
|
|
|
Excise Duty |
11550.500
|
8406.000
|
6391.600
|
|
|
Power & Fuel Cost |
454.300
|
414.100
|
496.600
|
|
|
Other Manufacturing Expenses |
927.400
|
796.100
|
675.000
|
|
|
Employee Cost |
4786.700
|
4024.900
|
3529.500
|
|
|
Selling and Administration
Expenses |
5721.600
|
4328.100
|
3197.500
|
|
|
Miscellaneous Expenses |
143.400
|
92.600
|
110.500
|
|
|
Interest & Financial Charges
|
288.400
|
406.500
|
304.000
|
|
|
Depreciation |
1505.700
|
1260.100
|
1092.100
|
|
|
Preoperative Expenditure
Capitalised |
[1.300] |
[4.100] |
[8.100] |
|
‘ |
Stock Adjustments |
[489.800]
|
[3006.000]
|
[182.000]
|
|
Total Expenditure |
79824.700 |
58054.500 |
46131.600 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
||
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
||
|
Sales Turnover |
16211.400 |
17458.900 |
18000.800 |
||
|
Other Income |
75.500 |
111.400 |
437.000 |
||
|
Total Income |
16286.900 |
17570.300 |
18437.800 |
||
|
Total Expenditure |
14503.300 |
15800.500 |
16358.800 |
||
|
Operating Profit |
1783.600 |
1769.800 |
2079.000 |
||
|
Interest |
127.600 |
126.300 |
152.500 |
||
|
Gross Profit |
1656.000 |
1643.500 |
1926.500 |
||
|
Depreciation |
412.900 |
466.200 |
408.300 |
||
|
Tax |
246.000 |
373.900 |
67.000 |
||
|
Reported PAT |
881.900 |
803.400 |
1202.200 |
||
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
0.41 |
0.62 |
0.64 |
|
Long Term Debt-Equity Ratio |
0.36 |
0.62 |
0.64 |
|
Current Ratio |
1.34 |
1.50 |
1.54 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
3.60 |
3.02 |
2.55 |
|
Inventory |
8.59 |
8.39 |
9.09 |
|
Debtors |
17.90 |
13.97 |
11.31 |
|
Interest Cover Ratio |
21.96 |
12.79 |
12.68 |
|
Operating Profit Margin (%) |
9.25 |
9.99 |
10.12 |
|
Profit Before Interest And Tax Margin (%) |
7.47 |
7.95 |
7.89 |
|
Cash Profit Margin (%) |
6.98 |
7.35 |
7.79 |
|
Adjusted Net Profit Margin (%) |
5.21 |
5.30 |
5.55 |
|
Return On Capital Employed (%) |
27.77 |
24.07 |
22.04 |
|
Return On Net Worth (%) |
27.07 |
25.86 |
25.02 |
LOCAL AGENCY FURTHER
INFORMATION
AUTO INDUSTRY
The Indian
automobile industry is going through a technological change where each firm is
engaged in changing its processes and technologies to sustain the competitive advantage
and provide customers with the optimized products and services. Starting from
the two wheelers, trucks, and tractors to the multi utility vehicles,
commercial vehicles and the luxury vehicles, the Indian automobile industry has
achieved tremendous amount of success in the recent years. The well-developed Indian automotive
industry ably fulfils this catalytic role by producing a wide variety of
vehicles: passenger cars, light, medium and heavy commercial vehicles,
multi-utility vehicles such as jeeps, scooters, motorcycles, mopeds, three
wheelers, tractors etc.
The automotive
sector is one of the core industries of the Indian economy, whose prospect is
reflective of the economic resilience of the country. Continuous economic
liberalization over the years by the government of India has resulted in making
India as one of the prime business destination for many global automotive
players. The automotive sector in India is growing at around 18 per cent per
annum.
The Indian
automotive industry started its new journey from 1991 with delicensing of the
sector and subsequent opening up for 100 per cent FDI through automatic route.
Since then almost all the global majors have set up their facilities in India
taking the production of vehicle from 2 million in 1991 to 9.7 million in 2006
(nearly 7 per cent of global automobiles production and 2.4 per cent of four
wheeler production).
The cumulative
annual growth rate of production of the automotive industry from the year
2000-2001 to 2005-2006 was 17 per cent. The cumulative annual growth rate of
exports during the period 2000-01 to 2005-06 was 32.92 per cent. The production
of the automotive industry is expected to achieve a growth rate of over 20 per
cent in 2006-07 and about 15 per cent in 2007-08. The export during the same
period is expected to grow over 20 per cent.
Advantage India
India holds huge
potential in the automobile sector including the automobile component sector
owing to its technological, cost and manpower advantage. Further, India has a well-developed,
globally competitive Auto Ancillary Industry and established automobile testing
and R&D centres. The country enjoys natural advantage and is among the
lowest cost producers of steel in the world. The Indian automobile industry
today boasts of being the largest three wheeler second largest two wheelers
manufacturers in the world, world largest motorcycle manufacturer is in India,
second largest tractor manufacturer in the world, fifth largest commercial
vehicle manufacturer in the world and third largest car market in Asia.
Investment
Opportunities
Establishing
Research and Development Centres
Establishing
Engineering Centres
Passenger Car
Segment
Two Wheeler Segment
Heavy truck Segment
Production
One of the largest industries
in India, automotive industry has been witnessing impressive growth during the
last two decades. Abolition of licensing in 1991, permitting automatic approval
and successive liberalization of the sector over the years have led to overall
development of the automobile industry. The freeing of the industry from
restrictive environment, on the one hand, helped it to restructure, absorb new
technologies, align itself to global developments and realize its potential and
on the other hand, this has significantly increased industry's contribution to
overall industrial growth in the country. The automobile industry witnessed a
growth of 19.35 percent in April- July 2006 when compared to April- July 2005.
Domestic Sales
Ř
The figures
for April-January 2008 over April-January 2007 indicate that domestic sales of
automobiles decelerated with a negative growth rate of (-) 4.82 percent.
Ř
The cumulative
growth of the Passenger Vehicles segment during April-January 2008 was 12.79
percent. Passenger Cars grew by 12.75 percent, Multi Purpose Vehicles by 23.60
percent and Utility Vehicles by 8.95 percent in April-January 2008 compared to
the same period last year.
Ř
In April-
January 2008, the Commercial Vehicles segment grew by 2.98 percent over the
same period in 2007. Light Commercial Vehicles recorded a growth of 13.84
percent; however, Medium & Heavy Commercial Vehicles witnessed a fall by
4.55 percent.
Ř
Three Wheelers
sales fell by 8.54 percent with sales of Goods Carriers decreasing by 19.34
percent. Passenger Carriers also fell with a negative growth rate of 0.84
percent during the period.
Ř
Two Wheeler
sales registered a negative growth of 8.04 percent during April-January 2008
over April-January 2007. Though Moped and Scooter segments grew by 18.23
percent and 14.68 percent respectively, Motorcycle and Electric Two Wheeler
segments declined by 12.43 percent and 39.27 percent respectively.
Exports
Automobile Exports
saw a growth rate at 18.15 percent during April- January 2008.
Exports of two
wheelers segment grew by 27.07 percent, Commercial Vehicles exports grew by
17.88 percent and Passenger Vehicles exports at 4.89 percent in April-January
2008 over the same period last year and 3-Wheelers exports declined by 2.23
percent during this period.
Auto Components Industry
Surge in automobile
industry since the nineties has led to robust growth of the auto component
sector in the country. In tandem with the industry trends, the Indian component
sector has shown great advances in recent years in terms of growth, spread,
absorption of new technologies and flexibility. Indian auto component industry
has seen major growth with the arrival of world vehicle manufacturers from
Japan, Korea, US and Europe. Today, India is emerging as one of the key auto
components center in Asia and is expected to play a significant role in the
global automotive supply chain in the near future.
The auto parts
industry has emerged as one of India's fastest growing manufacturing sectors
and a globally competitive one. The auto components industry in India is
dominated by around 500 key players, which contribute more than 85 percent of
India's production. The industry has very deep forward and backward linkages
with almost every other engineering manufacturing sector of the economy. It supports
industries like automobiles, machine tools, steel, aluminum, rubber, plastics,
electrical, electronics, forgings and machining.
India has also
emerged as an outsourcing hub for auto parts for international companies such as
Ford, General Motors, Daimler Chrysler, Fiat, Volkswagon, and Toyota.
India enjoys cost
advantage with regard to castings and forgings. The manufacturing costs in
India are 25 to 30 percent lower than its western counterparts. India's
competitive advantage does not come from costs alone, but from its full service
supply capability.
To encourage the
smooth growth of the industry, the Government of India has allowed automatic
approval for foreign equity investment up to 100 percent of manufacture of auto
components. Further, the engineering export promotion council under the aegis
of Ministry of Commerce and Industry, Government of India, over the years has
been engaged in promoting exports of engineering goods including auto parts.
Besides, the Automotive Component Manufacturers' Association of India (ACMA)
represents the Indian auto component industry. The association is engaged in
promoting trade, technology upgradation, quality enhancement, and collection
and dissemination of information.
Exports of auto-components
India is being
preferred as low cost country by various global OEMs for sourcing auto
components for their worldwide production. As a result of this, Indian auto
component industry's export scenario has changed. Now, 75 per cent of its export
is directed to OEM and rest is feeding the after sales market overseas. while
auto component exports grew by 40 per cent in 2004-05 to a level of US$ 1.4
billion, it registered a growth rate of 46 per cent in 2005-06 and crossed US$
2 billion mark. A high growth of over 40 per cent is expected to materialize in
2006-07 as well. Total export was of the order of Rs. 6237 crore during the
year 2004-05 and Rs. 9127 crore during the year 2005-06.
Foreign Direct Investment
The Indian auto
industry with a turnover of US$ 12 billion and the auto parts industry with a
turnover of US$3 billion offer excellent scope for FDI. Automatic approval for
foreign equity investment upto 100 per cent of manufacture of automobiles and component is permitted. The
automobile industry is delicensed
Import of components is freely allowed
Automotive Mission Plan 2016.
The Government of
India is drawing up an Automotive Mission Plan 2016 (AMP 2016) that aims to
make India a global automotive hub. To maintain the high rate of growth of the
automotive industry and to retain the attractiveness of Indian market and
further enhancing the competitiveness of Indian companies, the Government has
prepared the mentioned ten-year Automotive Mission Plan. The idea is to draw a
futuristic plan of action with full participation of the stakeholders and to
implement it in mission mode to meet the challenges coming in the way of growth
of industry. Through this Automotive Mission Plan, Government also wants to
provide a level playing field to the players in the sector and to lay a
predictable future direction of growth to enable the manufacturers in making a
more informed investment decision.
Major players in
the automobile sector
Ř Tata
Ř Mahindra
Ř Ashok Leyland
Ř Bajaj
Ř Hero Honda
Ř Daimler Chrysler
Ř Suzuki
Ř Ford
Ř Fiat
Ř Hyundai
Ř General Motors
Ř Volvo
Ř Yamaha
Ř Mazda
HISTORY
Subject was built-in 1948 as Ashok Motors for accumulate
Austin car in India. The company under Hinduja group is the second-largest manufacturer
of medium/heavy-duty vehicles in India and the first ISO/TS 16949 Corporate
Certified Indian auto company which is specific to the auto industry. In the
year of 1955 the Ashok Motors came to known as Ashok Leyland due to the
agreement with Leyland Motors, UK, for manufacture Leyland vehicles. Subject
have the manufacturing plants located in Ennore (Chennai, TN), Ambattur
(Chennai, TN), Hosur (TN) (Three), Bhandara (Maharashtra) and Alwar
(Rajasthan). The company supplies both to State Transport undertakings (STUs)
and Defence. The company has supplied specially developed light recovery
vehicles (LRVs) to the Indian Army. The company has also broken new ground
Buses running on CNG fuel in India and this category of buses are running
lucratively in Bombay and Delhi. Subject furnished lot of thrust to new range
of Intermediate Commercial Vehicles, which fall between the light and heavy
ranges of Commercial Vehicles, with the technical assistance from IVECO.
Commercial production of the 709 and 909 models has commenced under the first
phase of expansion cum modernisation.
1993 when it became the first in India's automobile history to win the ISO 9002
certification. The more comprehensive ISO 9001 certification came in 1994. The
company raised Rs 4360 Millions through a GDR issue in 1995. Subject
acknowledged QS 9000 in 1998 and ISO 14001 certification for all vehicle
manufacturing units in 2002. The company has obtained contemporary rear axles
technology support from Dana Corp. US and ArvinMeritor, US. In 2002-03, the
company has successfully developed indigenously, the upgraded versions of 5 and
6-speed gearboxes. During the year 2003-04 new 6-speed synchromesh gearbox
introduced with help obtained from ZF Friedrichshafen, Germany for technology.
To assist freight contractors subject endorsed a new company christened Ashley
Transport Services Limited (ATSL) during the year 2004 by the way of provide
information exchange and integrated logistic services to handle the business
and ATSL ceased to be the subsidiary of the company in 2005. Subject attempted
to sell Ductron Castings Unit at Hyderabad as a 'going concern' to Ennore
Foundries Limited for a consideration of Rs.620 Million in the same year. The
Company has promoted M/s Gulf Ashley Motor Limited jointly with M/s Gulf Oil
Corporation Limited to consolidate and improve the company's market share and
customer reach in the Eastern Region of India.
In 2006-07, Ashok Leyland has entered the knowledge business space by offering
of Design and Engineering Services. The company is building up Ashley Design
and engineering Services (ADES), a division focused on provision of design and
engineering services to the automobile, power engineering and aerospace sectors
and the company has also entered into a Joint Venture with Ras Al Khaimah
Investment Authority (RAKIA) in the U.A.E. to put up a plant for building bus
bodies in the U.A.E. Ashok Leyland acquired the Truck Business Unit of AVIA
a.s. in Prague, Czech Republic in October 2006. During the year 2007 Subject
noticed a share purchase agreement with Defiance Testing and Engineering
Services, Inc, Michigan, USA to acquire the entire equity capital for a
consideration of $17 million and the company has pierced into a Joint Venture
with the Alteams Group, Finland to manufacture High Pressure Die Castings
(HPDC) aluminum products predominantly for the automotive and
telecommunications sector. Ashok Leyland has announced its entry into the
pre-owned commercial vehicles market with Altrux would be marketed through TVS
& Sons Limited in Kerala. Subject and automotive supplier Siemens VDO
Automotive AG, Germany, have signed an harmony for a joint venture to propose,
grow and settle in infotronics products and services for the transportation
sector.
Subject and Nissan Motor, Japan comes under an agreement for development,
manufacture and marketing of LCV products. In January 2008 Hinduja group
flagship Ashok Leyland has developed the country's first 1-litre-percylinder,
6-cylinder CNG engine for buses, employing multi-point fuel injection (MPFI)
and it may conform to Euro IV emission standards. Subject decided to double
investment in Uttaranchal from Rs 10000 Millions to Rs 20000 Millions as a part
of its expansion plan and (ALL) is ramping up investments in its commercial
vehicle (CV) business by investing close to Rs 60000 Millions in the next few
years for attain the leadership quality in the same field.
Business
operations
Overall, there was high growth in the economy and buoyancy in the commercial
vehicles market during the year 2006-07. This was another excellent year when
the Company's performance surpassed several past records in terms of turnover
and profits and set new records and milestones.
Research and development, technology
absorption, energy conservation etc.
The Company has invested substantial sums in the Company's Technical Centre at
Chennai in state-of-the-art equipments and facilities for development and
testing. The Company has also strengthened the product development function significantly
through recruitment of a large number of engineers with wide range skills and
work experience.
Other knowledge service business
As part of the Corporate Business Plan, the Company has entered the knowledge
business space by offering a range of Design and Engineering Services.
The Company is building up Ashley Design and Engineering Services (ADES), a
division focussed on provision of design and engineering services to the
automobile, power engineering and aerospace sectors. This business of
knowledge-based service has been identified as an area of future growth
potential and will offer a significant niche area for the Company in the global
market. The Company is also prospecting for acquiring well established
organisations with good brand image in Europe and USA, with possible synergy
benefits for the ADES business.
The Company has been actively pursuing generation of energy from wind
power through the establishment of Wind Turbine Generators (WTGs) in various
locations primarily in Tamil Nadu. By wheeling the power generated through the
Tamil Nadu Electricity Board, the Company and the associate companies have
gained / saved significant amounts in energy costs and have also taken
advantage of the tax benefit incentives offered 'by the Government for this
activity.
Overseas initiatives
Avia Ashok Leyland Motors s.r.o. Czech
Republic
In October 2006, the Company acquired the Truck Business Unit of AVIA a.s. in
Prague, Czech Republic. This is now owner' and operated as a separate company,
Avia Ashok Leyland Motors s.r.o (AALM). This unit is expected to provide the
Company with an entry into the East European and i Mediterranean markets and
will also offer benefit of synergy with the Company's product development
efforts, especially in respect of a modern cabin for the medium vehicles.
AALM's performance has already shown improvement during the last few
months.
Ashok Leyland (UAE) LLC, Ras AI Khaimah,
UAE
The Company has entered into a joint venture with Ras AI Khaimah Investment
Authority (RAKIA) in the U.A.E. to put up a plant for building bus bodies in
the U.A.E. The construction of the plant is in progress. This unit will help
improve our share in the Middle East markets in the coming years
Defiance Testing and Engineering
Services, Inc (DTE)
The Company has signed a Share Purchase Agreement on April 27 / 28, 2007 to
acquire the entire equity capital of Defiance Testing and Engineering Services,
Inc, Michigan, USA. This Company is engaged in the business of providing
testing services to automobile OE manufacturers in northern USA. This
acquisition is expected to provide significant synergy to the existing business
activities of Ashley Design and Engineering Services (ADES) Division of Ashok
Leyland. It will also help ADES to provide greater value-added services to
various customers in the USA.
Foreign Currency Convertible Notes
(FCCNs)
The Foreign Currency Convertible Notes (FCCNs) for USD 100 million issued in April
2004 are convertible into shares of the Company (Fixed Exchange Rate USD 1 =
Rs.44.10). The conversion price was reset in 2005 to Rs.31/- per share of face
value Re. 1/- each. The market price of the Company's equity shares in the
Indian Stock Market has improved considerably in the last few months. Starting
from February 2006, 94600 Notes (94.6%) have already been converted into
underlying shares, thereby increasing the paid-up capital as of March 31,
2007.
Consequent to the declaration of an interim dividend of 150% (Rs.1.50 per
share) for the year 2006-07, the conversion price has once again been reset to
Rs.30/- per equity share.
All the procedures consequent to the conversion are being completed on time and
these shares, which rank pari passu l with the earlier shares in all respects,
are tradeable on the Indian Stock Exchanges. The enhanced share capital as on
March 31, 2007 and the corresponding revised shareholding pattern are shown in
the Corporate Governance Report (Annexure-B) to this Report.
Subdivision of shares
The Company's shares were subdivided (from a face value of Rs.10/- each to a
face value of Re. 1/- each) with effect from July 7, 2004. Subsequently, there
has been a substantial increase in the shareholding base of the Company; the
number of shareholders as on March 31, 2007 was 2,00,091 (as compared to about
72,000 before subdivision).
Part - II Corporate matters
Corporate Governance
The Company has consistently adopted high standards of Corporate Governance. The
Code of Conduct for the Board and the Senior Management was adopted by the
Company in March 2005. The Company is fully compliant with the latest
guidelines, and has even exceeded them in some aspects. All the Directors (and
also the members of the Senior Management - of the rank of General Managers and
above) have confirmed in writing their compliance and adherence with the Code
of Conduct. The details are furnished in Annexure-B to this Report. The
certification by the Managing Director regarding the Code of Conduct, as
required by SEBI guidelines, is also furnished separately.
Management
Discussion and Analysis Report
A. Economy and market trends
India's economy recorded a significant growth during the Tenth Plan period -
GDP grew 8.5% CAGR against a target of 8% due to booming manufacturing and
service sectors and a reasonable growth in the agricultural sector.
This GDP growth triggered an increase in the country's per capita income, while
low interest rates fuelled increased demand. A combination of economic growth
and the Government's initiatives in the area of road infrastructure not only
translated into significant growth in India's Commercial Vehicle (CV) industry
but also inspired structural changes in the transportation sector.
India's CV industry grew by 26% from 2001-02 to 2006-07. During 2006-07, the
year, industry grew by 33% to a record market size of 470,000 vehicles. This
appreciable increase was partly attributed to the Supreme Court's ruling on
vehicle overloading practices besides growth in the country's manufacturing and
construction sectors.
The development of India's road infrastructure and the advent of
'next-generation' operators in India's transportation sector are rapidly
re-shaping India's transportation model in line with trends seen in developed
economies. In 2006-07, much of the growth came from the lower and higher end of
the CV spectrum in line with the trend observed in the previous six
years.
A part of the industry's growth was also derived from out of India: export of
CVs grew 22% in 2006-07 and Light Commercial Vehicles (LCVs) contributed about
two-thirds of the sale.
There was a product evolution in the country's city bus segment as well. New
customer requirements in the form of low entry height, single step (stepless)
entry, air suspension and pneumatic doors emphasised safety, comfort and a
faster turnaround time, graduating the buses to the next level of modernity.
B. The year in brief
During 2006-07, the Company achieved sales of 77,069 vehicles within India;
there were also significant market share gains in the populous rigid segments
catalysed by the launch of new two-axle and three-axle truck models. The
Company yielded share in the tractor segment due to production constraints for
factory-fitted cabins but is poised to regain market share with new generation
cabins expected to be produced from October 2007.
In 2006-07, the Company's exports grew by 23% with the sale of 6,025 vehicles.
This improvement was derived from a robust demand in the export markets and the
launch of new products. The Company's newly 'upgraded' Falcon bus was very well
accepted in the Middle East. To cater to growing demand from this market, the
Company is setting up a bus assembly plant at Ras AI Khaimah, UAE, which will
go on stream by March 2008.
To cater to the increased demand, the Company enhanced its production capacity
to 84,000 vehicles and is poised to achieve a target of over 100,000 vehicles
in 2007-08. The Company has acquired land in Uttarakhand with the objective of
setting up a plant with an annual installed capacity of 50,000 vehicles. The
plant is expected to be operational by 2008-09.
During the year, Ashok Leyland acquired Avia Truck Business Unit (TBU) in Czech
Republic, formerly owned by the Daewoo Group and later by Odien Capital
Partners, a private investment firm. Rechristened AVIA Ashok Leyland Motors
s.r.o.(AALM), this associate company marks the first significant instance of
establishing an overseas presence through the acquisition route. AALM is a
strategic beachhead and will drive the Company's growth wide and deep into
Eastern Europe, Western Europe and other second hemisphere markets.
The Company, along with its associate companies, has been concurrently pursuing
global opportunities in the auto sector, broadening this scope of operations in
automotive engineering and component sectors. Ashley Design and Engineering
Services Division (ADES) is already engaged in providing design, development,
prototyping and testing services to the automobile industry. A share purchase
agreement has been signed for acquiring Defiance Testing and Engineering
Services, Inc (DTE) based near Detroit, Michigan, USA, which provides
independent testing services for leading Auto OEM's and their Tier 1 and Tier 2
suppliers. This acquisition offers significant synergies, creating additional
growth potential for both the operations.
In 2006-07, the Company's operations continued to big smooth due to an emphasis
on planned deliverables. The Six Sigma programme is gaining momentum and
benefits are being realised in various areas, especially engineering and
manufacturing. Inspired by its impact, the exercise is now being extended to
all functional areas. Besides, the Company was certified as per TS 16949, a first
in the Indian automobile industry, which will further strengthen the quality
focus.
New application-specific products with a view to delivering enhanced value to
the customers are under development. Domain Expert Groups are taking a 'deep
dive' to enhance their insight into the critical business drivers for each
application.
The spare parts business reported sales of Rs. 5,468 million, including KD kit
supply to Vehicle Factory Jabalpur, belonging to Ministry of Defence.
The Company expanded its industrial and marine engine businesses through a
growth of 22%, selling 8,904 engines. Strategies to expand market presence
through increased product offerings are under way.
Purposeful investments have built a state-of-the-art R&D infrastructure
with facilities such as the 6 poster', the first ever such full vehicle test
facility in India for multi-axle vehicles. The Company's continuing focus on
product development and improvements has yielded significant customer benefits.
The BS III compliant engine with a Common Rail System, a pioneering initiative
in the Indian heavy commercial vehicles industry, is undergoing field trials.
The Company nurtures the talents of its engineers by encouraging them to
publish research articles in international research journals.
The Company is active in Industry-institute interaction, which is mutually
beneficial and enables induction of new technologies that enhance customer
value. The Company joined hands with Bosch and the Indian Institute of
Technology Madras (IITM) to set up the Ashok Leyland and Bosch Centre of
Excellence in Engineering Design at the IITM campus, offering a Dual Degree
Programme in Engineering Design - a B.Tech in Engineering Design and M.Tech
with specialisation in Automotive Engineering. With a strong thrust on the
modern practices of design, this programme is the first of its kind in the
country and is aimed at meeting the dire need for design engineers with
practical orientation.
In 2006-07, the Company implemented a major initiative to develop its young
executives with the objective of equipping them for business challenges as well
as facilitating succession planning.
Ashok Leyland reinforced its presence on the cutting-edge of IT through the
implementation of the latest information security system.
C. Risk management
The CV business has a specific set of risk characteristics, which need to be
carefully evaluated, managed and mitigated. In order to effectively manage the cyclical
nature of demand, the Management has adopted an internal risk management
protocol. Risk management covers the entire process of business including,
inter-atia, capital investment, technology development and customer acquisition
/ retention.
Continuance of the reform process and emphasis on infrastructure and
agriculture augur well for the road transport sector. However, given the
cyclical nature of demand in the CV industry, capacity build-up plans are
periodically re-assessed, taking into account market conditions and demand
forecast.
The Company has plans to increase its annual capacity to 180,000 vehicles
(Medium and Heavy Duty Vehicles), over next four / five years. Management will
ensure that capital expenditure on expansion is aligned to the given market
situation. The Company is pursuing plans to increase the share of non-cyclical
business including exports, non-auto engines and sale to Defence sector to
mitigate the impact of cyclicality.
Competition in the domestic CV market has increased significantly with many
multi-national companies setting up manufacturing base. Consequent to the
policy of opening up the market, customs duty, as a trade barrier, is likely to
lose its influence. The Company is preparing to face these challenges through
focused R&D efforts in designing / developing vehicles that offer
appropriate transport solutions and meet the changing preferences of
customers.
Uncertainty over fuel prices in the international market, coupled with
competitive pressures to contain freight rates, could lead to erosion in
vehicle operators' margin, thereby leading to lower demand. However, increased
use of heavy tonnage vehicles for moving large freight loads has reduced the
tonne / km cost. This has helped improve the operational viability for the
vehicle operators.
There are continuing concerns on input cost increases due to commodity price
movements, together with cost increases due to improvements in product designs
and upgradation to meet emission norms. In a competitive market, the Company
may not be able to pass on the cost increases through pricing. Hence, margins
may come under pressure. The Company is taking steps to competitively procure
components through global sourcing.
The Company's foreign exchange exposure has reduced substantially with 94% of
US$100 million bonds issued in April 2004 getting converted to equity. Current
strengthening of the Rupee, if it continues, can adversely affect realisations
from exports. However, the Company has an active, centralised treasury
department, assisted by technical experts, to mitigate such impact.
D. Internal control systems and their
adequacy
Based on the nature of business and size of operations, the Company's internal
control system has been designed to provide for:
* Accurate recording of transactions with internal checks and prompt
reporting
* Adherence to applicable Accounting standards and policies
* Review of capital investments and long term business plans
* Periodic review meetings to guide optimum utilisation of resources
* Compliance with applicable statutes, policies, listing requirements and
management policies and procedures
* Effective use of resources and safeguarding of assets
* IT systems with in-built controls to facilitate all the above
The internal control system provides for well-documented policies / guidelines,
authorisations and approval procedures. The Company, through its own Corporate
Internal Audit Department, carries out periodic audits at all locations and of
all functions and brings out any deviation to internal control procedures. The
observations arising out of audit are periodically reviewed and compliance
ensured. The summary of the Internal Audit observations is submitted to Audit
Committee of the Board of Directors. The status of implementation of the
recommendations is reviewed by the Committee on a regular basis and concerns,
if any, are reported to the Board.
The Company's performance during 2006-07 reflects the
improved business environment.
The Company's revenues and profits recorded impressive growth. The Company has
performed well with over 24% Return on Average Capital employed and a Return on
Net Worth of 24%. Management is focused on improving the operational
performance through various initiatives to achieve savings in both direct and
indirect costs.
Revenues
Net sales for the year, at Rs 71682 million, has increased by 37% as compared
to previous year, contributed mainly by volume increases in vehicles by 35% and
engines (including traded) by 23%. The reduction in spare parts revenue by 30%
is mainly due to lower offtake by Vehicle Factory, Jabalpur, compared to the
previous year.
The increase in other income is mainly on account of higher income from
investments by Rs.114 million, profit on sale of investments by Rs 173 million
and profit on disposal of fixed assets by Rs 47 million.
Costs
The current year witnessed increase in commodity prices and consequent price
increase claims by suppliers. In addition, there were cost increases on account
of compliance with statutory regulations, which has not been fully passed on to
the customers. The margin also suffered due to full impact of previous year's
input cost increases. However the introduction of VAT in Tamil Nadu effective
January'07 will improve future margins.
Through concerted efforts of 'Mission Gemba', a programme for total involvement
of employees at the shop floor level, the Company improved productivity in all
the plants. This enabled the Company to reduce operating cost and mitigate the
erosion in margins by 200 bps.
The overall manpower cost has increased by 19% mainly due to compensation
revision for the executive staff effective November 06. Other expenses have
increased by 21%, mainly due to activity related increases. Thrust on Research
and Development (R & D) is continuing and total R&D spend, including
capital expenditure for the current year, accounts for Rs. 1564 million, an
increase of 50% over previous year.
Depreciation for the year has increased to Rs.1506 million compared to Rs. 1260
million in the previous year mainly due to additions to facilities. Financial
expenses decreased during the current year mainly due to lower levels of
working capital, income earned on the deployment of temporary surplus funds and
thanks to cost effective funding through borrowings in foreign currency.
Resources
During the year, the Company incurred capital expenditure of Rs.6135 million.
This expenditure covers investments in capacity expansion / upgradation and
R&D. During the year, the capacity increased from 77200 vehicles to 84000
vehicles.
Net Current Assets (excluding cash / bank balances) as on 31st March 2007 stood
at Rs. 5069 million as against the previous year level of Rs.2210 million. FCCN
funds parked in deposits in previous year were utilised for capital expenditure
in the current year. Inventories have gone up to Rs.10703 million as on 31st
March 2007 compared to Rs.9026 million as on 31st March 2006. The increase is
due to increased activity levels. Debtor level increased to Rs.5229 million
from Rs.4243 million due to higher level of fully built vehicles supplied to
Defence.
Industry
outlook
Indian market The growing requirements of next-generation customers and
stricter emission legislations will necessitate the introduction of
sophisticated vehicular products with India-specific solutions. In the
developed economies, a demand growth in this segment is mainly influenced by
replacement rather than fresh demand. As a result, major multinationals are
more likely to concentrate on the growth coming out of the developing
economies. Competition is likely to intensify in the coming year.
The demand outlook for 2007-08 is mixed. While an increase in interest rates
could stunt demand, increased infrastructure investments by the Government
could encourage growth. In view of this, India's CV industry is likely to
report moderate growth during the current year.
Export market
Since Indian CV manufacturers have set ambitious export targets, they are likely
to enter hitherto unexplored territories beyond the traditional SAARC, Middle
East and African markets - over the next few years.
Goals, strategies and future plans
Ashok Leyland has drawn up aggressive plans to increase annual capacity and sales
to over 180,000 vehicles (medium and heavy duty vehicles) in four / five
years, as mentioned earlier.
The Company is optimistic of a wider export presence through organic and
inorganic growth; it is developing new models to address growing customer requirements
in the existing market and new territories.
With the Indian transportation model maturing towards developed market
practices - hub and spoke transport model the up-to-3.5-tonne GVW segment grew
at a 55% CAGR between 2001-02 and 2006-07. In line with this, the Company is
exploring options to enter the LCV segment.
Following the withdrawal of IVECO as an equity partner in the holding company,
Ashok Leyland is pursuing a policy of self-reliance. The Company has initiated
extensive technical developments in the areas of vehicle, engine, transmission
and cabin, among others. A Future Vehicle Development Programme for modular
vehicle development has been launched. After upgrading its H-series engine
platform (with the help of a European engine consultancy organisation) to meet
a the Bharat Stage (BS) III regulation, the Company is now upgrading the
platform to meet Euro 4 (BS IV) emission requirements. It has also commenced
the independent r development of a new engine platform to meet future requirements.
The Company is in the process of employing advanced j simulation techniques in
product development to adapt rapidly to changing market requirements. It also
expects to treble its existing base of 450 engineers in its technical centre
over the next three to four years.
The Company is also gearing up to offer cost-effective passenger transport
solutions in the rapidly changing mass passenger transportation market.
Concurrent to these initiatives, the Company is reinforcing its existing allied
businesses with a view to de-risking its dependence on the CV business in the
unexpected event of a demand downturn in the latter. It is also evaluating new
business segments and opportunities.
Going
concern
In the opinion of the Directors, the Company will be in a position to carry on
its existing commercial vehicles / engines business and accordingly it is
considered appropriate to prepare the financial statements on the basis of
going concern.
Maintenance of accounting records and
internal controls
The Company has taken proper and sufficient care for the maintenance of
adequate accounting records as required by various statutes.
Directors have overall responsibility for the Company's internal control
system, which is designed to provide a reasonable assurance for safeguarding of
assets, reliability of financial records and for preventing and detecting fraud
and other irregularities.
The system of internal control is monitored by the internal audit function,
which encompasses the examination and evaluation of the adequacy and
effectiveness of the system of internal control and quality of performance in
carrying out assigned responsibilities. Internal audit department interacts
with all levels of management and the Statutory Auditors, and reports
significant issues to the Audit Committee of the Board.
Audit Committee supervises the financial reporting process through review of
accounting and reporting practices, financial and accounting controls and
financial statements. Audit Committee also periodically interacts with internal
and statutory auditors to ensure quality and veracity of Company's
accounts.
Internal Auditors, Audit Committee and Statutory Auditors have full and free
access to all the information and records as considered necessary to carry out
their responsibilities. All the issues raised by them have been suitably acted
upon arid followed up.
FIXED
ASSETS
- Freehold & Leasehold Land
- Buildings
- Plant & Machinery
- Furniture
- Computer
- Fittings & Equipments
- Vehicles
AS PER
WEB
Profile
Eight out of ten metro state transport buses in India are
from Ashok Leyland. At 70 million
passengers a day, Ashok Leyland buses carry more people than the entire
Indian rail network.
From 18 seater to 82 seater double decker buses, from 7.5 tonne to 49 tonne in
haulage vehicles, from numerous special application vehicles to diesel engines
for industrial, marine and genset applications, Ashok Leyland offers a wide
range of products.
For over five decades, Ashok Leyland has been the technology
leader in India's commercial vehicle industry, moulding the country's
commercial vehicle profile by introducing technologies and product ideas that
have gone on to become industry norms.
"We consider our employees as our most valuable asset
and are committed to provide full encouragement and support to them, to enhance
their potential and contribution to the Company's business" - From Ashok
Leyland's value statement..
They are close to 12,000 people, moulding and managing technology. And reaching
the benefits of technology to their customers. Offering transport solutions and
after-market support wherever their products operate - which is almost
everywhere.
They are spread throughout India, and even outside India.
Tasks vary, so do their skills. But they are bound together by a healthy
chain of interdependence, to deliver value to the customer.
They are committed to maintaining their technological
leadership. They manage this through continuous
learning. So that they can master ever-evolving technologies. And meet
changing customer needs.
Understandably, a career with Ashok Leyland
offers a lifetime of learning.
Structured training programmes address the needs of workmen, apprentices,
graduate engineering trainees, executives in the managerial levels for
knowledge and skills upgradation, computerization, attitudinal changes,
self-development, supervisory and managerial skills orientation to new
technologies as also requirements specific to various functional areas. This
breadth is reflected in the comprehensive annual training calendar.
Annually, five executive days are invested in training.
Besides nominations to external training programmes in IIMs, ASCI Hyderabad and
other Indian and international institutions of repute, Ashok Leyland also has
arrangements for ongoing distant
learning and residential programmes with management institutes. An
instance is the modular programme for marketing executives developed in
collaboration with TA Pai Management Institute, Manipal.
Ashok Leyland has a tie-up with BITS, Pilani for a
custom-designed, off-campus 2-year MS course in Engineering Management. Aimed
at making Managers out of Engineers, assignments and projects are central to
the learning process thus bridging the classroom with the engineers' workplace.
From 2000, a BS programme in Industrial Engineering and Technology, is offered
for diploma holders, again in collaboration with BITS. Apart from updating
their knowledge base, the programme empowers engineers to acquire multiple
skills.
Ashok Leyland is one of the moving forces behind an M.Tech course in Automobile
Engine Technology jointly managed by the automobile industry (Indian Society
for Automotive Technology, made up of auto manufacturers), IIT, Madras and
Institut Francais du Petrole, the French institute for IC engines.
Employee
Motivation
Ashok Leyland targets 100% of its employees to be involved
in its continuous improvement activities. Breaking Thresholds by Involving
Total Employees (BITES) is an integrated approach that brings under one
umbrella all Total Employees Initiatives. These initiatives or platforms are
available for employees to team up or to individually champion any improvement
project.
The platforms comprise Cross Functional Teams, Quality Circles, Small Group
Activities, Suggestions Schemes, Individual Improvement Projects, Company /
Family interfaces and many more.
Reward systems abound and include "RISE" (Reward for Individual
Search for Excellence), "Improve" (Annual company-wide contest) for
rewarding the best team projects, BITES (Shield for the best unit in total
employee involvement), 100% club (apex company reward for exemplary individual
or team performance), Green Shield (best unit for environmental sustenance),
etc.
Integration and participation is also an outcome of investment in IT that
offers space on the intranet / Internet to interact for collaborative learning,
sharing and communicating.
The open culture in Ashok Leyland has arrived and this is well timed when there
is large-scale entry of young men and women into the 2000 plus strong executive
workforce.
In the
Media
At 83,309 vehicles, Ashok Leyland annual sales at all time
high
Date:7/4/2008 Published from :Corporate Office
Date : April 7, 2008 Published from : Corporate Office
Ashok
Leyland, the Hinduja Group flagship in India, has closed the year ended 31st
March 2008 with an all-time high sale of 83,309 vehicles. Sales in the domestic
M&HCV segment touched 76,023 numbers. Exports volumes are up 21% at 7,286
vehicles.
Sales
during March 2008 were 27% higher, at 10,698 vehicles. Exports were up 128%, at
1,156 vehicles.
Total
production for the year was 84,006 compared to 83,558 last fiscal.
Issued
by Thomas T Abraham GM – Corporate Communications 98412-91292
Ashok Leyland concludes US$ 200 million ECB Loan
Date:26/3/2008 Published from :Corporate Office
Ashok Leyland, the Indian flagship of the Hinduja Group, has
recently concluded an External Commercial Borrowing (ECB) programme of US$ 200
million. This is the largest ever loan taken by the Company in a single
transaction till date. The Company has broad based its relationships, with the
facility being subscribed to by several banks including the leading foreign
banks. The loan will partly fund the requirements of the Company to meet its
expansion plans and overseas investments.
As per
the guidelines of RBI in vogue, companies can use the proceeds of ECB only for
meeting forex requirements for capital expenditure and other overseas
investment purposes. Accordingly, RBI has given a go ahead to the Company to
proceed with the drawdown.
Said
Mr K Sridharan, Chief Financial Officer : “This deal is significant for the
Company in many ways. Meant to meet the Company’s funding requirements, the
deal got successfully completed at a time when the global financial markets are
in turmoil. Secondly, it has been concluded at very competitive rate”.
The
funds would be drawn over the permitted period and the Company would be taking
necessary hedging measures to protect itself from the vagaries of exchange
markets.
Ashok Leyland @ Auto Expo 2008
Launches ALERT
Date:9/1/2008 Published from :Corporate Office
Date : January 9, 2008 Published from : New Delhi
Hinduja Group flagship Ashok Leyland's stall No 201 in Hall 2 at
Auto Expo 2008 will showcase a range of new products that will add momentum to
the ongoing modernization of Indian road transportation. Incorporating
innovations and international concepts to create customer value, many of them
set new industry benchmarks in power, performance, comfort, safety and
profitability
iBUS
A feature-filled concept vehicle developed by a team of young
engineers, iBUS is envisioned as the intelligent, innovative, Indian shuttle
for tomorrow’s metros.
It is Indian in that the iBUS concept has taken on board the
Indian operating conditions and economics, climate and the increasing concern
for pedestrian safety. Cost-efficient solutions to aspirations of city
commuters have been found through many innovative ideas and technologies. With
the induction of electronics in engine management and air suspension to
passenger infotainment and fleet management, iBUS has many ‘intelligent’
features that deliver new levels of safety, comfort and operating economics
like the ABS (Anti-lock Braking System) and collision warning systems.
An innovative combination of ‘executive class’ and ‘economy class’
addresses optimization of capacity utilization. The iBUS has a 635 mm floor
with a single step entry and a 1.5 m wide door. There is also a kneel-down
provision. In essence, it offers climate-controlled comfort and safety at an
economic cost.
The executive class has an airline like ambience with wide LCD
screens, reading lights, audio speakers and, for the first time, internet on
the move.
A GPS system enables vehicle tracking and display of dynamic route
information on LCD screens which can also support infotainment packages
including live data and news. Meanwhile, LCD displays at bus stops keep
commuters informed of bus arrival details.
iBUS is powered by eCORE, a 152 kW, BS III compliant, low noise,
common rail engine – another first in the commercial vehicle industry. Another
innovation is the Automated Manual Transmission (AMT), offering the benefits of
fully automatic transmission at ‘Indian cost’.
The indigenously developed body structure absorbs energy during
impact and is designed to meet European rollover safety standards, which will
be in the Indian Bus Body code (AS-031).
4935 TT (6x4) Tractor
Capable of the highest permitted Gross Combination Weight (GCW) of
49 tonnes, 4935 TT (6x4) Tractor is a high power, high performance tractor
engineered to pull over-dimensional cargo.
The powerful 345 ps Cummins ‘L’ series, turbo-charged, 9-litre
engine is high on torque across a wide range of speeds which along with the
16-speed gearbox with servoshift mechanism ensures an exceptional grade-ability
of 42o. This vehicle offers substantially higher payloads that translate into
better revenues.
The indigenously designed NEWGEN cab (with HVAC as option) is
roomy, well-ventilated with twin wide berths for the crew. The fully-hydraulic
steering wheel, the ergonomically placed instrument panel and adjustable driver
seat afford easy access to the driver while the wide windows ensure excellent
all-round visibility. The higher grade-ability, the hydraulic actuation of
clutch with clutch booster, the 16-speed gearbox with servo mechanism and the
easy maneuverability due to lower turning circle diameter all make for
fatigue-free, non-stop, round-the-clock operations. The rugged multi-leaf
spring suspensions and the telescopic double-acting shock absorbers serve to
reduce the effect of road shocks.
Safety is well addressed with the dual line, full air brake with
TCV (Trailer Control Valve) for adequate braking while the ABS ensures safety
even in panic-braking or on slippery road surfaces. The anti-roll bar in the
front suspension and bogie suspension in the rear keep the vehicle stable even
on difficult, uneven terrains. The frame side members are of ‘C’ section, made
of high-quality carbon steel for rigidity and high impact strength.
The engine meets BSII emission norms, is upgradeable to the more
stringent BS III norms. Yet another environment-friendly feature is its
asbestos-free clutch.
3135 HD (8x4) Tipper
A heavy duty tipper featuring a 345 ps engine (torque : 1450 Nm @
1500 rpm), an 8-speed gearbox and a climate-controlled NEWGEN cab, 3135 HD
Tipper is engineered for 31 tons Gross Vehicle Weight (GVW) in the toughest of
operating conditions.
The powerful engine, along with the enhanced clutch and the
optimally-spaced, heavy-duty 8-speed gearbox, give the vehicle better pulling
power and superior acceleration. A higher engine torque and deeper crawler
ratio enable easy negotiation of steep gradients, with a high 51o gradeability.
The fully integral hydraulic power steering for the twin steered front axles
gives the vehicle great maneuverability. The anti-roll bar at the front
suspension and two inverted spring, bogie rear suspension give it high
stability during off-highway, heavy duty applications. Road grip and stability
are enhanced by the sturdy frame and non-reactive load equalizing rear
suspension.
The dual line braking with increased brake sizes, the ABS system
and the ASA (Auto Slack Adjuster) ensure uniform braking on slippery and uneven
surfaces like that encountered at mining sites.
The aerodynamic, tiltable, NEWGEN day cab (with HVAC as option)
has been designed for enhanced driver comfort, safety and fatigue-free
operations. For ride comfort, the cab is fitted with ergonomic steering wheel
and adjustable driver’s seat, fully floating cab suspension and short gear
shift.
High torque, 430 mm diameter clutch and good hub-reduction axle
provide greater productivity and reduces maintenance costs. Balanced gearing
reduces the torque and stress borne by the axle shaft and differential gearing
adds to the long life cycle. For enhanced durability, the 18 cubic meter rock
load body is of sandwiched hardwood between Hardox steel sheets to withstand
heavy impact loads. It lasts longer and has low maintenance cost.
The engine of the 3135 HD meets BSII emission norms and is
upgradeable to the more stringent BS III norms. Yet another environment-friendly
feature is its asbestos-free clutch.
3121 H (8x2) Multi axle Vehicle
Offering the highest rated GVW in a multi axle vehicle, 3121 H
(8x2) MAV features the H series engine, 6-speed gearbox and climate-controlled
NEWGEN cab.
The 3121 H (8x2) MAV is powered by a 205 ps indigenously
developed, 6-cylinder, turbo-charged, inter-cooled, BSII-compliant engine from
the H-series that has already made a name for itself for its fuel efficiency
and reliability. The 6-speed ZF 6S 850 synchromesh gearbox with a high torque
rating facilitates swift pick up and effortless climb on gradients. Thanks to
these superior aggregates, the 3121 H (8x2) is able to deliver with speed and
fuel efficiency, over 25% extra rated payload than MAVs currently in the
market.
The twin steered axles at the front give the vehicle greater
driveability and even distribution of load as it negotiates difficult terrains.
Safety is addressed also through a greater braking area with dual line air
brakes – the largest in its category – for efficient braking in all conditions.
The 3121 H (8x2) is fitted with a high-capacity, hydraulic steering pump,
non-reactive suspension in the rear and a 380 mm diameter RDC clutch for
fatigue-free driving.
The indigenously developed NEWGEN cab enhances driver comfort for
fatigue-free operations. It is roomy, fitted with a high-capacity steering box,
ergonomic controls and windows that provide excellent all-round visibility.
The strengthened cylindrical block, the bigger crankshaft and
bigger connecting rod provide for higher firing pressure that increases engine
durability. The heavy duty propeller shaft with high torque rating has a
serrated flange for reliability, durability and lower maintenance cost.
The 3121 H (8x2) is tailor-made for applications such as cement,
coal, iron ore, tankers (petroleum, bitumen, chemicals), bulkers, parcel and
market load. Pioneers in multi axle vehicles, the Company expects this model to
define and create a new market segment within MAVs.
AVIA D120
The D120, which premiered at the Birmingham Motor Show last
spring, is a significant addition to the D Line range of trucks from the Prague
headquartered AVIA ASHOK LEYLAND MOTORS. The D Line comes in a range of models
to fit every fleet plan. The traditional models D60, D75, D80 and D90 start
from 5.99 tonnes. The new additions to AVIA’s line-up are the D100, D110 and
D120 models, offering gross vehicle weights of 9.99 tonnes, 10.99 tonnes and
11.99 tonnes respectively.
The stylish, aerodynamic form of the AVIA trucks set them apart
from other European trucks - AVIA is the truck with an original, unforgettable
face. Design work carried out by the European styling house I.D.E.A and Hawtal
Whiting in the UK has produced a truck with clean professional modern lines.
The body is compact enough to zip through narrow city streets and tight spaces.
The built-in corner spoilers (with an optional air management kit) help keep
the side windows clean for excellent visibility, whilst the purposeful lights
and repeater indicators ensure maximum safety. The practical low cab-step and
floor height make entry and exit easier and safer.
AVIA is easy to drive. From the stylish line of the dashboard to
its perfect ergonomics, this truck is about comfort and convenience. The cab is
packed with comfort features such as air-conditioning (optional), electric
windows, a pre-radio installation, adjustable steering wheel, numerous
compartments, reading lamps, cup holders and even a coat hook. Add to it all
the air suspended seat for extra comfort during long journeys and handy details
like a low entrance step and grab handle for easier entry. The cab is also
equipped with an air filter, which purifies air entering the cab.
Both the cab and chassis designs meet and exceed the most
stringent of European legislation. The cab suspension system features
high-tech, coil springs with shock absorbers at the rear and generous rubber
bushes at the front for maximum comfort. The chassis and suspension are widely
praised by drivers for providing a stable ride with good handling
characteristics.
The D120 comes equipped with an Albion front axle that allows
tighter turning circles. Full air ventilated disc brakes, front and rear,
brings control whilst the wider profile springs deliver enhanced vehicle
stability.
The Cummins ISBe4 common-rail diesel features an increased bore
and stroke to give a total capacity of 4500 cc. Owners can choose the
economical 160 hp (118 kW) or the potent 185 hp (136 kW) engine. The engines
roll out 600 Nm and 700 Nm of torque respectively over a wide engine speed
range between 1200 and 1700 rev/min.
The eco-friendly engine incorporates the Selective Catalytic
Reduction (SCR) system, considered the most fuel efficient solution at EURO 4+,
while also providing the natural platform for EURO 5 conversion.
Besides reducing harmful exhaust emissions, the SCR system,
involving injection of AdBlue liquid into the catalytic converter housed within
the silencer, reduces fuel consumption by upto 7%. Sensors in the catalyst send
feedback signals to dosing pump through the engine ECU to meticulously control
AdBlue injection. On reduction in the level of AdBlue, the signal then controls
the fuel injection and reduces the power. Combined with aero dynamic form, a
six speed ZF gearbox and the extended servicing interval of 50,000 kms between
oil changes, the D120 takes fuel efficiency to a new level.
4921 Side Tip Trailer
The innovative 4921 Side Tip Trailer is another first from Ashok
Leyland. It is a ready-to-use high productivity vehicle with side tipping,
offering new levels of flexibility and safety.
The 4921 34 cubic meter Side Tip Trailer has a lower centre of
gravity owing to a short single-stage tipping cylinder which gives the vehicle
greater stability and makes tipping easier. It can be operated even in closed
sheds; in construction areas and the side tipping makes for faster turnaround.
Its short tipping mechanism reduces tipping time and is low on maintenance
cost.
4921 Side Tip Trailer offers the highest payload in tractors and,
coupled with lightweight trailers, ensures greater payload, more trips and
hence better profits. Powering it is the renowned 205 ps “H’ series engine that
is big on power and frugal with fuel, along with a 9-speed ZF gearbox.
Driveability of this 49 tonner is enhanced by its efficient power
steering and clutch booster while its 9-speed gear box with the crawler gear
delivers the traction for steep gradients.
The NEWGEN cab, with high structural rigidity, is designed for
maximum comfort and safety. It is roomy, well-ventilated, has ergonomically
designed seating and controls and its superior bonnet insulation protects the
driver from engine heat. A fully floating cab suspension decreases road shocks
for the driver. The cab also gives the driver very good all-round visibility
especially during tipping. Safety is boosted by an in-built protection valve in
the hydraulic system.
4921 Curtain Side Trailer
With 4921 Curtain Side Trailer, Ashok Leyland introduces this
international concept for goods transportation in a fully built configuration.
The highly durable yet light weight PVC-coated, polyester curtains
create more loading area and more payload, which in turn translate into better
returns. The 4921 Curtain Side Trailer is ideal for transporting large loads of
material that can be lashed into place and do not exert pressure on the walls
of the container. The air suspension reduces vibration and other impact on the
cargo. While the air-suspended lift axle increases tyre mileage especially on
empty return.
The 4921 Curtain Side Trailer is powered by the renowned ‘H’
series engine that is big on power and frugal with fuel. Driving this 49 tonner
is effortless because of its efficient power steering and clutch booster while
its 9-speed gear box with the crawler gear enhances gradeability.
The NEWGEN cab, with high structural rigidity, is designed for
maximum comfort and safety. It is roomy, well-ventilated, has ergonomically
designed seating and controls and its superior bonnet insulation protects the
driver from engine heat. A fully floating cab suspension decreases road shocks
for the driver. Integrated twin line air braking systems with high capacity
brakes ensure safety.
The product addresses the emerging market need for closed cargo
movement without compromising the rated payload capacity.
MPFI CNG Engine
Ashok Leyland has developed the country’s first
one-litre-per-cylinder 6 cylinder CNG engine for buses employing Multi Point
Fuel Injection (MPFI). The W06DTI ‘H’ Series CNG engine combines superior power
rating (135 kW @ 2400 rpm) with low emissions. This 5.7-litre turbocharged
inter-cooled natural gas engine meets Euro IV emission standards – ahead of the
mandate in India.
The high power CNG engine uses stoichiometric combustion
technology (chemically correct air-fuel ratio) in combination with three-way
catalytic converter to reduce the emissions to the lowest level possible. The
Multi Point Fuel Injection system delivers the required gas quantity at the
intake manifold, as per the vehicle demand even in transient operating
conditions.
The Exhaust Gas Re-circulation (EGR) used in this engine not only
lowers the NOx emission but also restricts the thermal load on the engine
components. The quantity of EGR is controlled by the difference in pressures
between exhaust manifold and the turbocharger’s compressor inlet.
The waste gate turbocharger is optimized for max torque.
The high performance CNG engine features electronics provided by a
new state-of-the-art Electronic Control Unit (ECU) that controls the sequential
gas injection and high-energy ignition systems. The plug-on coils used in the
engine, along with long life spark plug, makes for maintenance-free operation
of the vehicle.
Designed and optimized for high power and torque output with low
fuel consumption and emission levels, the engine offers better fuel efficiency
compared to any engine of its class and is expected to provide value to the
customer with low life cycle costs.
The launch of this engine marks the entry into the more
challenging phase of transient cycles mandated in the Euro IV norms of the
future.
Launches ALERT - A comprehensive Telematics solution for the
Indian CV market
Hinduja Group’s Indian flagship and commercial vehicles major
Ashok Leyland has launched ‘ALERT’, a GPS-based bundle of Telematics services
for the commercial vehicle sector. ALERT introduces the latest in Telematics
technologies specially designed for Indian environmental conditions, through
tie-ups with international technology leaders and vigorous in-house R&D in
the last few years.
To start with, the two services offered are vehicle tracking and
passenger information system. By offering real time information on the
vehicles, the fleet tracking and management services enhances fleet
productivity, security and control. The passenger information services are a
boon to commuters, offering real time information on bus arrival timings at bus
stops. A pilot deployment covering 105 vehicles has been successfully
functioning in Chennai since September 2007. The two services will benefit
fleet owners, corporate end users, public utility services and passenger bus
corporations and operators.
“ALERT is a brand-neutral, technology-driven solution that improves
viability of the transportation industry through state-of-the-art, innovative,
user-friendly and cost effective services”, said Mr Vinod Dasari, COO, Ashok
Leyland.
ALERT Telematics employs an On Board Unit (OBU) which is installed
in the vehicle cabin. The unit can compute the location, speed, direction of
its travel with date and time stamp, on a second-to-second basis. These
computed information is stored in a memory and is transmitted to the
ALERT-owned data centre on prefixed time period or on demand of the customer.
The transmission happens on GPRS communication network.
Multiple applications and database are hosted in the ALERT data
centre which processes data to user-friendly reports as maps, text and
proactive ALERTs. The customers can access ALERT services on internet connected
computer, mobile phone or can call up ALERT customer helpline.
“Reliable information means control over mobile assets – and a
competitive edge, for example, the confidence to do advance booking of return
loads, reducing idle time”, elucidated Mr Dasari.
ALERT would introduce in a phased manner other applications like
online advice to drivers on correct gear shifts, fuel pilferage monitoring,
online diagnostics and prognostics, route optimization, telemetry and infotainment
services.
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.40.65 |
|
UK Pound |
1 |
Rs.80.35 |
|
Euro |
1 |
Rs.62.78 |
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 |
NO |
|
--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/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|