MIRA
INFORM REPORT
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Report Date : |
17.05.2008 |
IDENTIFICATION
DETAILS
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Name : |
TVS SRICHAKRA LIMITED |
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Registered Office : |
TVS Building, 7-B, West Veli Street, Madurai – 625 001,
Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
02.06.1982 |
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Com. Reg. No.: |
18-9414 |
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CIN No.: [Company
Identification No.] |
U25IIITN1982PLC009414
/ L25111TN1982PLC009414 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MRIS00086C |
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Legal Form : |
Public Limited Liability Company. The company shares are listed on the Stock Exchange. |
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Line of Business : |
Manufacturing of Two
Wheeler Tyres. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 2119616 |
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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 part
of TVS Group, an established and reputed industrial house. Available
information indicates high financial responsibility of the company. Trade
relations are fair. Financial position is good. Payments are
correct and as per commitment. The company can be considered good for any
normal business dealings. It can be
regarded as a promising business partner in a medium to long-run |
LOCATIONS
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Registered Office : |
TVS Building, 7-B, West Veli Street, Madurai – 625 001, Tamilnadu, India |
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Tel. No.: |
91-452-2420461 |
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Fax No.: |
91-452-2420266 |
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E-Mail : |
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Website : |
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Administrative
Office : |
10,
Jawahar Road, Madurai-625002 Tamilnadu, India |
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E-Mail : |
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Website : |
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Factory 1 : |
Vellaripatti
Village, Melur Taluk, Madurai District- 625122 Tamilnadu, India |
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Factory 2 : |
Narasingampatti
Village, Therkutheru, Melur Taluk, Madurai District-625122 Tamilnadu, India |
DIRECTORS
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Name : |
Mr. S. Narayanan |
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Designation : |
Chairman |
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Name : |
Mr. R. Naresh |
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Designation : |
Executive Vice Chairman |
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Name : |
Ms. Shobhana Ramachandhran |
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Designation : |
Managing Director |
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Name : |
Mr. K. R. Ragavan |
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Designation : |
Director |
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Name : |
Mr. M. S. Viraraghavan |
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Designation : |
Director |
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Name : |
N. T. Atthreya |
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Designation : |
Director |
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Name : |
J. V. Raghavan |
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Designation : |
Director |
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Name : |
Sitaram Rao
Valluri |
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Designation : |
Director |
KEY EXECUTIVES
|
Audit
Committee : Shareholders/Investors
Committee |
Mr. M. S. Viraraghavan Chairman N. H. Atthreya Sitaram Rao
Valluri K. R. Raghavan S. Narayanan Chairman Shobhana
Ramachandran J. V. Raghavan |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders (as on 31.03.2007) |
No. of Shares |
Percentage of
Holding |
|
Shareholding
of Promoter and Promoter
Group |
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Individuals
/ Hindu Undivided Family |
360762 |
4.71 |
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Bodies Corporate |
2661754 |
34.76 |
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Public
Shareholding |
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Institutions |
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Mutual
Funds / UTI |
650 |
0.01 |
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Financial
Institutions / Banks |
2580 |
0.03 |
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Central /
State Government(s) |
94 |
0 |
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Foreign
Institutional Investors |
17400 |
0.23 |
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Non-Institutions |
|
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Bodies
Corporate |
767853 |
10.03 |
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Individual
shareholders holding nominal share capital upto Rs. 0.1 Millions |
2973952 |
38.84 |
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Individual
shareholders holding nominal share capital in excess of Rs. 0.1 Millions |
815864 |
10.65 |
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Clearing
Member |
49911 |
0.65 |
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|
---- |
0.01 |
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Corporate
CM / TM – Client Margin A/C |
346 |
0.07 |
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Corporate
CM / TM – Client Beneficiary A/C |
5284 |
0.07 |
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Trust |
600 |
0.01 |
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Total |
7657050 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of Two
Wheeler Tyres. |
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Products : |
· Mopeds · Scooter · Light Motor Cycle · Motor Cycle · 3 Wheeler · Light Commercial Vehicle · Tractor Front · Tractor Trailer · Jeep · Racing · Industrial Pneumatic · Implement · Skid Steer · Multi Purpose · Mining ·
Antiqu
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Export to : |
UK, Germany, Italy, Spain, France , Benelux, Scandinavia, Hungary, Turkey, Morocco, Argentina, Algeria, Ethiopia, Ghana, Mauritius, Bahrain, Egypt, Austria, Ireland, Thailand, Sri Lanka, USA, Europe, Africa, South America and South East Asia |
PRODUCTION
STATUS (as on 31.03.2007):-
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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Automotive Tyres |
Nos.(000) |
11000 |
10725 |
9674 |
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Automotive Tubes |
Nos. |
--- |
--- |
9777 |
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Flaps |
Nos. |
--- |
--- |
1 |
GENERAL
INFORMATION
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Bankers : |
Ř
State Bank
of India
West Veli Street, Madurai- 625001, Tamilnadu, India Ř
HDFC Bank
Limited |
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Facilities : |
Includes Deposits
matured and unclaimed Rs. Nil Previous years Rs. 0.116 million |
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Banking Relations : |
Good |
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Auditors : |
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Name : |
Sundaram &
Srinivasan Chartered
Accountant |
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Address 1 : |
Old No.
111, New No. 250, P.T. Rajan Road, Madurai-625014 Tamilnadu, India |
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Address 2 : |
New No.
250, P T Rajan Road, Madurai – 625 014 Tamilnadu, India |
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Associates/Subsidiaries : |
Nil |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
10000000 |
Equity Shares |
Rs. 10/- each |
Rs.100.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7657050 |
Equity Shares |
Rs. 10/- each
|
Rs.76.570
millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
76.570 |
6.570 |
76.570 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
453.334 |
412.866 |
393.832 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
529.904 |
489.436 |
470.402 |
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LOAN FUNDS |
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1] Secured Loans |
1199.504 |
424.052 |
187.371 |
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2] Unsecured Loans |
5.888 |
364.729 |
28.310 |
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TOTAL BORROWING |
1205.392 |
788.781 |
215.681 |
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DEFERRED TAX LIABILITIES |
78.169 |
72.221 |
68.060 |
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TOTAL |
1813.465 |
1350.438 |
754.143 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
589.735 |
508.369 |
362.082 |
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Capital work-in-progress |
25.176 |
27.346 |
2.108 |
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INVESTMENT |
12.450 |
12.450 |
11.348 |
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DEFERREX TAX ASSETS |
2.305 |
2.013 |
1.530 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
615.401
|
371.521 |
259.760 |
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Sundry Debtors |
720.634
|
618.820 |
380.424 |
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Cash & Bank Balances |
15.245
|
21.470 |
11.152 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
346.168
|
163.404 |
81.888 |
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Total
Current Assets |
1697.448
|
1175.215 |
733.224 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
478.104
|
347.743 |
336.459 |
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Provisions |
35.545
|
27.212 |
22.009 |
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Total
Current Liabilities |
513.649
|
374.955 |
358.468 |
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Net Current Assets |
1183.799
|
800.26 |
374.756 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
2.319 |
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TOTAL |
1813.465 |
1350.438 |
753.143 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
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Sales Turnover |
4267.250 |
2918.339 |
2027.961 |
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Other Income |
0.000 |
0.000 |
0.000 |
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Total Income |
4267.250 |
2918.339 |
2027.961 |
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Profit/(Loss) Before Tax |
105.678 |
63.474 |
61.751 |
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Provision for Taxation |
37.656 |
26.978 |
20.147 |
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Profit/(Loss) After Tax |
68.022 |
36.496 |
41.604 |
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Export Value |
743.451 |
458.569 |
338.939 |
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Import Value |
1138.555 |
507.786 |
270.288 |
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Expenditures : |
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Raw Material Consumed |
2966.359 |
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Purchases made for re-sale |
5.070 |
4.313 |
1949.296 |
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Interest |
81.023 |
23.992 |
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Depreciation & Amortization |
81.179 |
66.021 |
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Other Expenditure |
1027.941 |
815.579 |
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Total Expenditure |
4161.572 |
2854.865 |
1949.296 |
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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 |
1032.400 |
1142.100 |
1223.800 |
|
Other Income |
0.000 |
4.200 |
21.200 |
|
Total Income |
1032.400 |
1146.300 |
1245.000 |
|
Total Expenditure |
951.300 |
1049.900 |
1167.200 |
|
Operating Profit |
81.100 |
96.400 |
77.800 |
|
Interest |
27.200 |
22.400 |
24.300 |
|
Gross Profit |
53.900 |
74.000 |
53.500 |
|
Depreciation |
22.400 |
25.100 |
23.600 |
|
Tax |
11.300 |
18.700 |
12.900 |
|
Reported PAT |
18.700 |
30.200 |
17.000 |
KEY RATIOS
|
Year |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
1.96 |
1.05 |
0.45 |
|
Long Term Debt-Equity Ratio |
1.09 |
0.77 |
0.19 |
|
Current Ratio |
1.50 |
1.68 |
1.37 |
|
TURNOVER RATIOS |
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|
Fixed Assets |
4.45 |
3.77 |
3.12 |
|
Inventory |
9.63 |
10.50 |
10.31 |
|
Debtors |
7.09 |
6.64 |
6.03 |
|
Interest Cover Ratio |
2.28 |
3.36 |
6.56 |
|
Operating Profit Margin(%) |
5.67 |
4.72 |
6.67 |
|
Profit Before Interest And Tax Margin(%) |
3.96 |
2.73 |
4.06 |
|
Cash Profit Margin(%) |
3.14 |
3.09 |
4.93 |
|
Adjusted Net Profit Margin(%) |
1.43 |
1.10 |
2.32 |
|
Return On Capital Employed(%) |
12.50 |
9.21 |
13.94 |
|
Return On Net Worth(%) |
13.34 |
7.60 |
11.44 |
LOCAL AGENCY
FURTHER INFORMATION
PROFILE
The company
is Part of the TVS Group, the largest Auto Ancillary group with a turnover of
over US$ 2.2 billion.
The company Manufactures Industrial Pneumatic Tyres, Farm and Implement Tyres,
Skid Steer Tyres, Multipurpose Tyres and Vintage Tyres at its State - of- the-
art manufacturing facility at Madurai, Tamilnadu, India.
The company also has the distinction of being India's leading two wheeler tyre
manufacturer , rolling out over 9 million tyres annually and enjoying highest
share with Vehicle manufacturer backed by a strong network of over 2050 Dealers
and 20 Depots across the country.
The company is Accredited with ISO 9001 and ISO 14001 certification and has won
TPM Excellence Award. The Company also practices Six Sigma and Lean
Manufacturing Techniques.
Specification
- Specially engineered design gives superb road grip
- Optimized radius for excellent driveability
- Rugged looking tyres suitable for all track conditions
- Studs extended upto shoulder for better cornering
- Reinforced casing for absorbing shocks and impacts
- Good aesthetic appearance
PERFORMANCE
The Company's turnover for the year under review has grown over
previous year, to Rs.4750.000 millions by more than 43%. The growth in turnover
has been contributed mainly by Exports. On the flip side, the prices of the
major raw materials, particularly natural rubber and petroleum based inputs
have gone up substantially, during the year.
This is despite a significant increase in interest cost at
Rs.81.000 millions, as against Rs.24.000 millions, during the previous year.
Higher borrowings to sustain the increased working capital requirements,
including strategic stocking of Natural Rubber, coupled with hike in rate of
interest, resulted in higher interest cost for the year.
In line with the increase in PBT, the Company's profit after tax for the year
ended 31st March, 2007 also improved to Rs.68.000 millions, against Rs.36.500
millions in the previous year.
There is a perceptible slow down in the off-take of two wheelers in the year
2007-08, impacting the sales of two wheeler tyres. This may have a short term
impact on the top and bottom lines. To off-set, not only the slump in the
market but also the spiraling input costs, the Company has initiated a series
of cost reduction measures and productivity improvement programs.
EXPORTS
The Company's export turnover has grown to Rs.743.400 millions,
during 2006-07. During the year under review, the Company has successfully
launched several new products and new sizes, in various segments of the export
market, which has started yielding results to the Company.
The Company continues to explore various new business segment and geographical
territories, for identifying profitable growth opportunities.
The Company is evaluating various options for servicing these export customers
in a cost effective manner.
The Company's share in Export market is expected to grow at a much faster
rate, in the coming years and the Company is gearing up its efforts to meet the
increasing demand from this segment.
MARKETING
After recording a growth rate beyond 15% consecutively for the last three
years, the two wheeler industry has now slowed down to 11% during the year
under review. The industry is expected to grow in the range of 8% to 10% in the
year 2007-08. The main factor for this slow down has been the increasing retail
interest cost. This slow down will have an impact on the sales volume with
Original Equipment Manufacturers (OEMs).
In the After-Market, due to various promotional activities conducted during
2006-07, brand image for their products has substantially improved and this
will lead to increased thrust on After-Market resulting in better volumes in
the year 2007-08. The Company will continue this brand building exercise in the
coming years also through intensive promotional activities to increase their
share in the After-Market segment. The Company also plans to introduce certain
new varieties of tyres and this should help them in sustaining their thrust for
increasing their share in the After-Market.
EXPANSION
Through continuous efforts, the Company was able to effectively utilize the
expanded capacity of Tyres and Tubes including the bigger tyre segment for the
Export Market.
The Company's outlay on capital expenditure during 2006-2007 amounts to
Rs.187.600 millions, funded by borrowings and internal accruals.
The Company is exploring a plan to expand its capacity further through Green
field projects outside Madurai
NEW PRODUCT
DEVELOPMENT
The Company continues to lay utmost thrust on new Product
Development, in order to cater to the evolving market requirements. The Company
has committed considerable investment in this area, to power the growth of
business.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT
Industry
Structure and Developments:
Automobile Industry has witnessed a compounded annual growth
rate of 15.8% during the period 2002-2006 period; whereas, the compounded
annual growth rate in Tyre Industry has only been 7.7% over the last decade.
The growth of tyre industry depends primarily on overall GDP growth,
agricultural and industrial production and growth in vehicle demand. The
secondary factors contributing to growth of tyre industry are infrastructure
development and prevailing interest rates.
In 2006-07, the two wheeler sales and production went up by nearly 11% which is
less than that of last year. The main factor for this slow down has been the
increasing interest cost.
Outlook:
Input costs have gone up and are expected to remain high.
There has been all round price increases in the industry, but the customers are
not willing to absorb the full impact of the raw-material increase.
The growth of the two wheeler market has also been sluggish partially due to
the interest hike and also due to the four wheeler markets taking a higher
share. Inspite of the input increase and the market conditions, the Company is
taking adequate measures in order to retain its competitive edge and offset the
higher costs through productive practices.
Fixed
Assets
- Land
- Buildings
- Plant and Machinery
- Electrical Installation
- Furniture and Fixtures
- Vehicles
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 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.42.64 |
|
UK Pound |
1 |
Rs.83.00 |
|
Euro |
1 |
Rs.66.00 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
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 |
|