MIRA
INFORM REPORT
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Report Date : |
26.11.2008 |
IDENTIFICATION DETAILS
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Name : |
VIDEOCON
INDUSTRIES LIMITED |
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Formerly Known
as: |
ADHIGAM TRADING, VIDEOCON LEASING AND INDUSTRIAL FINANCE |
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Registered
Office : |
14, K M Stone, |
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Country: |
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Financials (as
on): |
30.09.2007 |
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Date of
Incorporation : |
04.09.1986 |
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Com. Reg. No.: |
11-103624 |
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CIN No.: [Company
Identification No.] |
L99999MH1996PTC103624 |
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TAN No.: (Tax Deduction
& Collection Account No.) |
MUMV09411D NSKV01616G |
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PAN No.: (Permanent
Account No.) |
AABCV4012H |
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Legal Form : |
A Public Limited
Liability Company. The Company’s Shares are Listed on the Stock Exchange. |
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Line of
Business : |
Manufacturer of
Electronic / Electric Consumer Durables and Home Appliances. |
RATING & COMMENTS
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MIRA’s Rating
: |
Ba |
RATING
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STATUS |
PROPOSED
CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit
Limit : |
USD 227135200 |
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Status : |
Satisfactory |
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Payment
Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
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Comments : |
Subject is an
established company having satisfactory track. Company’s profitability is improving.
The company was successful in wiping-off all its previous losses. Payments
are reported as slow but correct. The company can
be considered for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered
Office : |
14 K M Stone, |
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Tel. No.: |
91-2431-251501/ 02/ 03/ 04 |
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Fax No.: |
91-2431-240391/ 251551 |
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Email : |
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Website : |
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Factory : |
Auto Cars
Compound, |
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Tel. No.: |
91-240-2320750 |
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Fax No.: |
91-240-2333704 |
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Plant 2: |
15 Km Stone, |
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Plant 3: |
Gut No 350, Bhalgaon, Dist: |
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Plant 4: |
Survey No-6 To 11, |
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Plant 5: |
Plot No-72 (Phase -1), Sipcot Industrial Complex,
Hosur – 635126 |
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Plant 6: |
Sector –V, Block B.P, |
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Plant 7: |
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Plant 8 : |
P.O Box
No-68, Videocon House, Village Chhavaj, Bharuch – 392002 |
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Branch 1 : |
Videocon International Limited |
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Tel. No.: |
86-755-25833-845
Upto 850 |
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Branch 2 : |
Thomson |
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Tel. No.: |
33-141-86-54-11 |
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Branch 3 : |
Thomson Displays Polska Sp. Z O O |
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Tel. No.: |
(48 22) 7571112 |
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Branch 4 : |
Thomson Displays |
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Tel. No.: |
39-775-701275 |
DIRECTORS
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Name : |
Mr. Pradeepkumar
N Dhoot |
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Designation : |
Whole Time
Director |
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Name : |
Mr. Venugopal
Nandlal Dhoot |
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Designation : |
Chairman and
Managing Director |
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Address : |
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E-Mail : |
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Date of Birth
: |
30.09.1951 |
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Qualification
: |
B.E. (Electrical),
FIE |
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Name : |
Mr. S K Shelgikar |
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Designation : |
Director |
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Name : |
Mr. |
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Designation : |
Additional
Director |
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Name : |
Mr. Kuldeep Drabu |
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Designation : |
Director |
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Name : |
Mr. S.
Padmanabhan |
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Designation : |
Director |
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Name : |
Mr. S C N Jatar |
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Designation : |
Director |
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Name : |
Mr. Arun Laxman
Bongirwar |
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Designation : |
Director |
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Name : |
Mr. Satya Pal
Talwar |
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Designation : |
Director |
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Name : |
Mr. Didier Trutt |
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Designation : |
Nominee |
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Name : |
Mr. Johan Fant |
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Designation : |
Nominee |
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Name : |
Mr. Ajay Saraf |
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Designation : |
Nominee (ICICI) |
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Name : |
Mr. B
Ravindranath |
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Designation : |
Nominee (IDBI) |
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Name : |
Mr. Peter Birch |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Vinod Kumar Bohar |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(As on 30.09.2007)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding of Promoter and Promoter Group 2 |
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(1) Indian |
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(a) Individuals / Hindu undivided family |
1619838 |
0.73 |
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© Bodies Corporate |
153823583 |
69.57 |
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(B) Public Shareholding 3 |
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(1) Institutions |
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(a) Mutual Funds / UTI |
36571 |
0.02 |
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(b) Financial Institutions / Banks |
304403 |
0.14 |
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(e) Insurance Companies |
5600352 |
2.53 |
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(f) Foreign Institutional |
13467563 |
6.09 |
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(2) Non – Institutions |
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(a) Bodies Corporate |
5516620 |
2.5 |
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(b) Individuals – i. Individual shareholders holding nominal share capital up to
Rs.0.100 million ii. Individual shareholders holding nominal share capital excess of
Rs.0.100 million |
4685290 1171618 |
2.12 0.53 |
|
© Shares held by custodians and against which depository receipts have
been issued |
34867863 |
15.77 |
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Grand Total |
221093701 |
100.00 |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturer of
Electronic / Electric Consumer Durables and Home Appliances. |
GENERAL INFORMATION
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No. of
Employees : |
8500 |
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Bankers : |
·
State
Bank of ·
Indian
Bank |
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Banking Relations : |
Unknown |
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Auditors : |
Khandelwal Jain
and Company/ Kadam and Company Chartered
Accountant |
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Associates/Subsidiaries : |
· Videocon
Appliances Limited Manufacturing washing machines. · Applicomp India
Limited · Epitome
Components Limited · Videocon Housing
Finance Limited · Videocon
Properties Limited · ·
European Refrigeration Components SRL ·
Videocon Industries Limited · Videocon Communications Limited ·
Indian Refrigerator Company Limited ·
Kitchen Appliances India Limited ·
Millennium Appliances India Limited · Videocon Narmada
Glass |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
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|
600000000 |
Equity Shares |
Rs.10/- Each |
Rs.6000.000 Millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
266850000 |
Equity Shares |
Rs.10/- Each |
Rs.2668.500 Millions |
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FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
30.09.2007 |
30.09.2006 |
30.09.2005 (15 months ) |
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|
SHAREHOLDERS
FUNDS |
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1] Share Capital |
2669.500 |
2668.500 |
2622.100 |
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2] Share
Application Money |
0.000 |
0.000 |
0.000 |
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|
3] Reserves &
Surplus |
54114.300 |
47722.100 |
43724.100 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
|
NETWORTH
|
56783.800 |
50390.600 |
46346.200 |
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LOAN FUNDS |
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1] Secured Loans |
33435.000 |
36083.900 |
27761.000 |
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2] Unsecured
Loans |
19161.400 |
13528.000 |
4734.700 |
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TOTAL BORROWING
|
52596.400 |
49611.900 |
32495.700 |
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DEFERRED TAX
LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL
|
109380.200 |
100002.500 |
78841.900 |
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APPLICATION OF FUNDS
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FIXED ASSETS [Net Block]
|
47715.500 |
43313.600 |
33497.500 |
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Capital work-in-progress
|
5479.200 |
6082.800 |
6153.700 |
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INVESTMENT
|
20925.000 |
17811.700 |
3387.900 |
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DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES
|
|
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Inventories
|
13936.400
|
12998.600
|
8730.200
|
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Sundry Debtors
|
13142.600
|
11172.900
|
9971.200
|
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Cash & Bank Balances
|
8891.100
|
11362.500
|
13960.100
|
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Other Current Assets
|
0.000
|
0.000
|
0.000
|
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Loans & Advances
|
15454.900
|
9416.700
|
12091.300
|
Total Current Assets
|
51425.000
|
44950.700
|
44752.800
|
|
Less : CURRENT LIABILITIES & PROVISIONS
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|
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Current Liabilities
|
13232.300
|
10468.300
|
8253.100
|
|
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Provisions
|
2932.200
|
1688.000
|
696.900
|
Total Current Liabilities
|
16164.500
|
12156.300
|
8950.000
|
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Net Current Assets
|
35260.500
|
32794.400
|
35775.800
|
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MISCELLANEOUS EXPENSES
|
0.000 |
0.000 |
0.000 |
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|
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|
|
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TOTAL
|
109380.200 |
100002.500 |
78841.900 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
30.09.2007 |
30.09.2006 |
30.09.2005 (15 months ) |
Sales Turnover [including other income]
|
89084.900 |
78491.100 |
57706.500 |
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|
|
|
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Profit/(Loss) Before Tax
|
10829.000 |
9136.600 |
2616.500 |
Provision for Taxation
|
2276.800 |
951.600 |
(1660.300) |
Profit/(Loss) After Tax
|
8552.200 |
8185.000 |
4276.800 |
|
|
|
|
|
Total Expenditure
|
78255.900 |
69369.200 |
55466.800 |
QUARTERLY RESULTS
|
PARTICULARS |
31.12.2007 1st
Quarter |
31.03.2008 2nd
Quarter |
30.06.2008 3rd
Quarter |
30.09.2008 4th Quarter |
|
Sales Turnover |
23621.600 |
25149.100 |
26129.000 |
26260.200 |
|
Other Income |
347.200 |
238.700 |
75.300 |
50.800 |
|
Total Income |
23968.800 |
25387.800 |
26204.300 |
26311.000 |
|
Total Expenditure |
18932.600 |
20138.700 |
20778.300 |
21610.500 |
|
Operating Profit |
5036.200 |
5249.100 |
5426.000 |
4700.500 |
|
Interest |
819.400 |
916.600 |
1018.600 |
1106.300 |
|
Gross Profit |
4216.800 |
4332.500 |
4407.400 |
3594.200 |
|
Depreciation |
1221.900 |
1245.300 |
1256.700 |
1238.900 |
|
Tax |
500.000 |
575.000 |
600.000 |
600.000 |
|
Reported PAT |
2494.900 |
2512.200 |
2550.700 |
1755.300 |
SUMMARISED RESULTS
|
PARTICULARS |
|
|
30.09.2008 |
|
Type |
|
|
Full
Year |
|
Sales Turnover |
|
|
101159.900 |
|
Other Income |
|
|
712.000 |
|
Total Income |
|
|
101871.900 |
|
Total Expenditure |
|
|
81460.100 |
|
Operating Profit |
|
|
20411.800 |
|
Interest |
|
|
3860.900 |
|
Gross Profit |
|
|
16550.900 |
|
Depreciation |
|
|
4962.800 |
|
Tax |
|
|
2275.000 |
|
Reported PAT |
|
|
9313.100 |
|
Dividend (%) |
|
|
0.000 |
KEY RATIOS
|
PARTICULARS |
30.09.2007 |
30.09.2006 |
30.09.2005 (15 months) |
|
Debt-Equity Ratio |
1.05 |
1.05 |
0.91 |
|
Long Term Debt-Equity Ratio |
1.00 |
1.02 |
0.88 |
|
Current Ratio |
2.94 |
3.55 |
3.80 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.21 |
1.39 |
1.88 |
|
Inventory |
6.47 |
6.98 |
10.36 |
|
Debtors |
7.16 |
7.17 |
9.07 |
|
Interest Cover Ratio |
4.21 |
4.59 |
2.84 |
|
Operating Profit Margin(%) |
21.11 |
19.84 |
16.40 |
|
Profit Before Interest And Tax Margin(%) |
16.30 |
15.41 |
12.29 |
|
Cash Profit Margin(%) |
14.62 |
15.22 |
14.73 |
|
Adjusted Net Profit Margin(%) |
9.82 |
10.80 |
10.62 |
|
Return On Capital Employed(%) |
14.23 |
14.60 |
15.85 |
|
Return On Net Worth(%) |
17.65 |
21.18 |
26.45 |
LOCAL AGENCY FURTHER INFORMATION
Company Details:
Formerly known as Adhigam Trading, Videocon Leasing and
Industrial Finance was incorporated in 1986. In 1990-91, the management
underwent a change by way of transfer of equity shares to the Videocon group.
The company is been engaged in lease financing, hire-purchase, bill discounting
and merchant banking. It had diversified into corporate financing and
investment operations. It became a category-I merchant banker and played an
active role in issue management, underwriting, advisory services and loan
syndication.
1994-95, it floated a 100% subsidiary Popup Properties and Investments, to deal
with investments, and to advise on investments, and also to provide corporate
finance advisory services as well as arrange and deal in the areas of corporate
finance.
Videocon Energy Holdings Limited (VEHL) and consequently Goa Energy Private
Limited (Formerly Talchar Minings Private Limited), which is a subsidiary of
VEHL, ceased to be the subsidiaries of the company with effect from 31st
March 2004. On 15th June 2004, Videocon Securities Limited has become a
subsidiary of the company and On 5th June 2004 Petrocon India Limited (PIL) has
become a subsidiary of the company. Further Popup Properties and Investments Private
Limited and Videocon (
December 2005 the Company has acquired 81% equity stake in Eagle Corporation
Limited (ECL) and consequently ECL became a subsidiary of the company.
Banganga Investments Private Limited, New Design Finance and Investments
Private Limited, Wide Range Credit and Investments Private Limited and Verka
Investments Private Limited, were merged with the company under the scheme of
amalgamation.
The name of the company has been changed during September 2004, from Videocon
Leasing and Industrial Finance Limited to Videocon Industries Limited.
2003-04 the company had successfully launched the business of Manufacturing and
trading activity of Electronic\Electric Consumer Durables and home appliances
all kinds of electric and Electronic goods as well as telecommunication
equipments, office equipments, games and gaming solutions including lotteries
etc., and the company has also started the online lottery business as
distributors and commerical launched the business in April 2004. Further the
company has decided to merge Petrcon India Limited (Formerly Videocon Petroleum
Limited), which is subject to approval.
FINANCIAL
RESULTS:
The Top line of the Company increased from Rs.72188.17 Million as on September
30, 2006 to Rs.82854.24 Million representing an increase of 14.78% over the
previous financial year. Similarly, Profit after Tax increased from Rs.8185.02
Million as on September 30, 2006 to Rs.8552.190 Million, representing an
increase of 4.49% over the previous financial year.
OPERATIONS:
Highlights on the performance of the Company, Balance Sheet Date and material
developments after the year under review, i.e., after Balance Sheet Date are
summarized hereunder:
The Company identified power generation; trading and dealing in various
minerals including coal required for electricity/power generation; and
telecommunication, as emerging business for expansion(s) and diversification(s),
while retaining the focus on its prime business segments viz., Consumer
Electronics Goods and Home Appliances and Exploration of Oil and Natural Gas.
The Shareholders of the Company accorded their consent for altering the
Memorandum of Association by passing special resolution by Postal Ballot so as
to enable the Company to undertake diverse activities, as aforesaid.
The Company continued its growth path in the Consumer Electronics and Home
Appliances Business. The business acquired from Electrolux pursuant to the
amalgamation of EKL Appliances Limited with the Company started yielding its
result by improving the company's market share in the Household segment.
As the members are aware, the Company has participating interests in Oil and
Gas exploration activities in
Exploration activities are on as per the agreed exploration programmes at the
respective oil fields and the results are expected in the coming year or
so.
The Company to tap the global equity market, as and when, the first exploration
exercise gets converted into a proven field, it is decided to compile all the
global exploration activities into an Offshore Company. This Offshore Company
is proposed to be listed on London Stock Exchange at AIMS.
The Company, through one of its subsidiaries, has been granted a Letter of
Intent for providing mobile phone services on Pan
SUBSIDIARY
COMPANIES:
During the year, Sky Billion Trading Limited, Global Energy Inc.,
and Videocon Display Research Company Limited became subsidiaries of the
Company. Further, Mars Overseas Limited and Gajanan Electronics and Supply
Private Limited ceased to be subsidiaries of the Company.
As such, as on 30th September 2007, the Company had 12 subsidiaries viz.,
Paramount Global Limited, Middle East Appliances LLC, Videocon Global Limited,
Powerking Corporation Limited, Godavari Consumer Electronics Appliances Private
Limited, Mayur Household Electronics Appliances Private Limited, Videocon
(Mauritius) Infrastructure Ventures Limited, Eagle Corporation Limited, Venus
Corporation Limited, Sky Billion Trading Limited, Global Energy Inc., and
Videocon Display Research Company Limited.
The Company has received an exemption from the Central
Government a/s 212(8) of the Companies Act, 1956 with regard to attaching of
the balance sheet, profit and loss account and other documents of the subsidiaries
for the year 2006-2007.
The Company undertakes that:
·
The Annual Accounts of the subsidiary
companies and the related detailed information will be made available to any
member seeking such information, on free of cost basis, at any point of time upon
receipt of request for the same.
·
The Annual Accounts of the subsidiary
companies will also be kept for inspection by any investor at the Registered
Office of the Company and at the Registered Office of the Subsidiary Company
also.
CONSOLIDATED FINANCIAL STATEMENTS:
The Directors present the consolidated financial statements,
duly incorporating the Company's 100% ownership interest in Paramount Global
Limited, Middle East Appliances LLC, Mars Overseas Limited (Upto 26th September
2007), Videocon Global Limited, Powerking Corporation Limited, Gajanan
Electronics Supply Private Limited (Upto 26th September 2007 ), Mayur Household
Electronics Private Limited, Godavari Consumer Electronics Appliances Private
Limited, Eagle Corporation Limited, Venus Corporation Limited, Videocon
(Mauritius) Infrastructures Ventures Limited, Sky Billion Trading Limited
(w.e.f., 21st November 2006), Global Energy Inc (W.e.f.,10th October 2006) and
Videocon Display Research Company Limited (w.e.f., 09th March 2007).
The Consolidated financial results also include interest through Eagle
Corporation Limited (subsidiary) in Technologies Display Americas LLC,
Technologies Displays Mexicana S.A. de. CV, TTD International S.A, TDP Spzoo,
TTD International Limited, TGDC Guangdong Displays Company Limited, Thomson
Display Technology `Research and Company Limited, VDC Technologies S.P.A, VDC
Technologies Deutschland Gmbh _ (w.e.f.14th September 2007).
The Company holds 41.670/ equity interest in Evans Fraser and Company (
The same has been accounted in the consolidation.
The Financial statements also include the effects of Company's interest
in various Joint Ventures. The details on Joint ventures and Companies interest
are given in the Note No. 10 of Schedule 15(B) to the Accounts.
The Consolidated financial results have been prepared in line with the
requirements of Accounting Standard 21 "Consolidated Financial
Statements", Accounting Standard 27 "Financial Reporting of Interests
in Joint Ventures". And Accounting Standard 23 "Accounting for
Investments in Associates in Consolidated Financial Statements".
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT:
The management discussion and analysis report has been
included in adherence to the spirit enunciated in the code of Corporate
Governance approved by the Securities and Exchange Board of India. The
Management presents herein the Industry, Opportunities and Threats, Initiatives
by the Company and overall strategy of the Company and its outlook for the
future. This outlook is based on assessment of the current business environment
it may vary due to future economic and other developments both in
Statement in this Management Discussion and Analysis of Financial Condition and
Results of Operation of the Company describing the Company's objectives,
expectations or predictions may be forward looking within the meaning of
applicable securities laws and regulations. Forward Looking statements are
based on certain assumptions and expectations of future events. Actual results
could differ materially from those expressed or implied. Important factors that
could make a difference to the Company's operation include economic conditions
affecting demand/supply and price conditions in the domestic and overseas
markets in which the Company operates, changes in the Government regulations,
tax laws and other statutes and other incidental factors. Further, the
discussion following herein reflects the perceptions on major issues as on date
and the opinions expressed here are subject to change without notice. The
Company undertakes no obligation to publicly update or revise any of the
opinions or forward-looking statements expressed in this report, consequent to
new information, future events.
INDUSTRY,
STRUCTURE AND DEVELOPMENTS:
Consumer Electronics and Home
Appliances:
The Consumer electronics products and household appliances industry can be
broadly categorized into two segments:
1. Consumer Electronics Products
2. House Hold Appliances.
The consumer electronic products segment includes products such as Televisions,
video products and home entertainment products and the household appliances
segment includes products such as refrigerators, washing machines, air
conditioners, microwave ovens, vacuum cleaners, dishwashers and small
appliances such as irons, heaters, vacuum cleaners, fans, mixers and water
purifiers.
Colour Televisions:
Colour Televisions is the dominant product in the consumer electronics and
house hold segment, both by volume and by value. As per the Company's estimates
for year ended March 2007, Colour television sales accounted for an estimated
Rs.110 billion with a growth of 12.7%, representing approximately 53% of the
total turnover of the, consumer electronics products and household appliances
market.
Market demand for Colour televisions have increased by around 12.7% in the year
ending March, 2007. With the up gradation in technology, there has been a shift
from conventional TVs to Flat TVs and from Flat TVs to Slim and Ultra Slim TVs.
The Flat TV segment constituted 55% of the overall CTV market. It has grown
from 5 million units to 6.6 million units in the year ended March 2007, an
increase of 301. The conventional segment has de-grown by 5% over the previous
year. The growth in demand in Flat TVs has been driven by a reduction in the
price differential between conventional color television and flat color
television, and increasing consumer preference for flat color
televisions.
With the technology changing day by day, the new trends in television industry
is Flat Panel Display (FPD). Undergoing metamorphosis, FPD market is turning
from low volume, high pricing and low consumer awareness to affordable pricing
and desire for enhanced technology and cinematic viewing experience. It
comprises of liquid Crystal Display (LCD) TV and Plasma TV.
The market for FPD in 2006-07 has grown at an exponential
rate of 430%. LCD TVs currently constitute the bulk of high-end TV sales.
Sales of FPD are no loner solely restricted to the metros, consumers in tier-2
cities seem to be as evolved in lifestyle needs. Higher disposable incomes,
greater aspirations, and a younger demographic consumer, have increased demands
for the latest technology high-end television market.
Plasma TV is finding more popularity among corporate buyers,
shopping malls and airports, where there is public viewing. The leading players
in CTV market are Videocon, Sansui, LG, Samsung, Akai and Onida.
The key growth drivers of CTV business in
* Electrification in rural
* Low penetration levels- The penetration level of CRT TVs
in
* Multiple TV demand from Middle and high income
categories.
* Price erosion and easy and inexpensive finance
availability.
* Sports events/festivals.
* Product innovations.
* Refrigerators.
It is expected that for the year ended March 2007, refrigerator sales accounted
for an estimated Rs.30 billion on sales with a growth of approximately 5.4%.
The leading brands in the refrigerator market are Videocon, LG, Whirlpool,
Electrolux, Samsung, Kelvinator, and Godrej.
Sales of Frost Free Refrigerators grew by approximately 13% for period ended
March 2007 where as the direct cool segment grew by approximately 3.7% in the
same period. In direct cool refrigerator, 165-200 litres segment is the major
contributor where as in frost free refrigerator, 201-250 liter segment is the
major contributor. The Frost Free segment accounts for more than 30% of the
total refrigerator market.
Air
Conditioners:
For the year ended March 2007, air conditioners sales are estimated at Rs.25
Billion, representing growth of 24 % over the previous year. The leading brands
in the AC market are LG, Samsung, Videocon, Onida, Voltas, Electrolux and
Godrej.
According to industry sources, the demand for split air conditioners has
increased considerably in the year ended March 2007, due to a reduction in the
price differential between split and window air conditioners, increased
affordability and because split air conditioners require less space, have low
noise levels and is better looking than window air conditioners. With the growing
number of three-four rooms apartment in Tier I, II and III cities, a new trend
has started emerging whereby customers, instead of one AC, have religiously
started buying two to three ACs.
The Company has identified the air conditioner market as a high growth market.
As consumers become more affluent, they are likely to increase the number of
air conditioners in their homes. The Company expects a further shift in demand
towards higher value split air conditioners. At present, the penetration level in
the domestic market for air conditioners in
Increasing affordability, acceptance of air conditioners as a utility product
rather than a luxury item, easy availability of finance schemes, and historic
low penetration. The institutional sale is also contributing to the growth of
this category. In air conditioners, per Capita consumption is higher for this
category as it is used by the same individual in different parts of his home
and workplace.
Washing
Machines:
Washing machine sales accounted for the year ended March 2007 are estimated at
Rs. 16.4 billion representing growth of 12.5% over the previous year.
The leading brands in the washing machine market are
Videocon, LG, Whirlpool, Electrolux, Samsung and Onida.
The semi automatic segment has been key contributor with 70% share to
this category. The fully automatic segment has grown at a rate of 34%. Repeat
buyers upgrading to Fully Automatic. Also, the shift is from semi automatic to
fully automatic due to diminishing price differential. Although demand for
washing machines has exhibited very low price elasticity, intense competition
between players has motivated moderate price cuts in recent years. Price cuts
in other market segments have also led to reduction in prices in this segment.
Stiff competition has resulted in technologically superior products at
competitive prices. The industry is also moving beyond the concept of clean
wash to the concept of pure, bacteria free, odour free wash.
Growth in the demand for washing machines in
(i)
The availability of cheap manual labour
and
(ii)
Intermittent water and power supply in
many parts of the country.
Microwave
oven:
Microwave oven sales for year ended March 2007 are estimated at Rs.5.9 billion
resulting the growth of 48.5% over the previous year. The leading brands in the
Microwave Oven market are LG, Samsung, Videocon, Kenstar, Electrolux, IFB, and
Kelvinator.
The grill and convection segment contributed 41% and 31% respectively. With the
solo category growing at a rate of 22 per cent, grill growing at 36 per cent
and convection model growing at 71 per cent over the last year.
Microwave oven segment is becoming aesthetic driven. Players
are differentiating themselves on sleek design which can be placed in small
countertops. The companies are using health as a diffentiator to sell their
product range and this has found great acceptance among Indian consumers.
Low penetration level, changing life style is creating a set of
opportunity for the market which will lead to high growth in this
category. Lack of time, coupled with changing eating habits is creating
another set of opportunity.
Glass
shells:
Glass Shells (glass panels and funnels), account for nearly 60% of CRT costs.
The manufacturing process for glass shells is capital-intensive.
Videocon is one of the major players in the glass shell
business in
One of the significant developments in the industry has been the enforcement of
energy efficiency regulation laid by Bureau of Energy Efficiency, Ministry of
Power.
INDIAN
OIL AND GAS INDUSTRY:
Per capita consumption of primary energy and hydrocarbons of
The Government of India, under the National Common Minimum Programme, has
placed greater emphasis on increasing indigenous production. The government is
planning to increase indigenous production through the accelerated domestic
exploration of oil and gas, through improved oil recovery from existing fields
and diversification of the fuel base with an increased reliance on gas. Natural
gas has gained tremendous importance, both as a fuel and a feedstock over the
past 20 years. Natural gas is used as a feedstock in fertilizer and
petrochemical units. It is also used as a fuel in power plants using combined
cycle technology, and in other industries such as glass, ceramics, and sponge
iron and tea estates.
OPPORTUNITIES
AND THREATS:
STRENGTHS:
* There are opportunities to further expand manufacturing bases, both
internationally and domestically.
* There are opportunities to expand the range of Components so as to reduce
cost of products.
* There are opportunities to increase brand portfolio by introducing new brands
and/or by acquiring the existing premium brands from the market.
* There are opportunities to increase the sales of different range of products
manufactured by Company by way of association/tie-up with retail outlets; Super
Market; Hyper Marts etc.,
* There are opportunities to increase penetration in the Indian consumer
electronic products and household appliances market. This can be achieved through
growth of customer base and enlargement of the Company's product
portfolio.
* There are opportunities to improve level of service to network of dealers and
distributors for example by providing more frequent deliveries in order to
reduce the dealer’s inventory levels and therefore costs. The Large scale
operations can improve the margins of the Company.
* There are opportunities to outperform in Domestic Market with Innovative
Products such as Slim Televisions. LCDs and PDPs etc.,
* There is scope to identify additional oil and glass blocks that are suitable
for exploration and have potential for production. The Company plans to bid for
the rights to exploit the hydrocarbons blocks, which shall be open for bidding
in future.
THREATS:
* The Cost of marketing, advertising and after sale services are increasing
tremendously.
* Due to stiff competition, prices are continuously reducing. If the costs are
not controlled then it may prove to be a threat and margins will be under
pressure.
* The Cost and interest rates continue to be the key issues that are likely to
shape the growth rates of the Industry. Any increase in the interest will have
impact on the profitability of the Company.
OUTLOOK:
* The consumer electronics sector is undergoing a major transformation. The
analog technologies are giving way to digital technologies. Digitalization in
turn is leading to convergence of consumer, computer, communication, broadcast
cable technologies and the contents. A digital signal can be far more easily
processed than an analog one. The Company is planning to tap this.
* The Company has adopted the best and the most sophisticated technology to
suit Indian needs. The Company as a part of global diversification has been
planning international forays in the same industry and has successfully forayed
into international market either directly or indirectly.
* The Company as a part of reducing manufacturing cost of products has explored
the possibility of manufacturing various components at the in-house facility by
setting up standalone facilities.
RISKS
AND CONCERNS:
Risks associated with Consumer Electronics and Home Appliances Business:
* There is risk of non adjustment of product mix in line with market demand or
keep pace with technological changes.
* There is risk of drop in CRT prices due to International Competition.
* There is risk of non adoption J availability of Technology.
* There is risk of inability to keep pace with the changes in product design
and features.
* There is risk of slowdown in the overall Indian and Global economy thereby
effecting demand for the Company's products.
Risks associated with the Oil and Gas Business:
* There is risk of variation in the prices of oil and gas.
* There is risk of exploration blocks not yielding the expected results.
* There is risk on account of natural disasters or which are beyond control
such as labor unrests, earthquakes, flooding and extended Interruptions due to
hazardous weather conditions, explosions and other accidents.
Sales:
The Company achieved a turnover of Rs.87102.58 million as against Rs.75803.32
million during the previous year ended on 30th September 2006, thereby
recording an increase of 14.91% in turnover as compared to previous year.
Turnover comprised of sales from the `Consumer Electronics and Home Appliances'
segment to the extent of Rs.73000.67 million as against Rs.61409.18 million for
the previous year, Oil and Gas segment to the extent of Rs.14101.91 million as
against Rs.14394.14 million for the previous year ended on 30th September,
2006.
Other
Income:
Other income for the year was Rs.1663.62 million as against Rs.1654.44 million
during the previous year ended on 30th September, 2006, representing an
increase of 0.55 % as compared to previous year. Other income comprises of
Income from Investment and Securities Division, Exchange Rate Fluctuation,
Insurance claim received, Interest and Miscellaneous Income.
Expenditure:
Cost
of Goods Consumed:
Cost of Goods Consumed stood at Rs.48981.34 million as against
Rs.41627.44 million during the previous year ended on 30th September
2006.
Production
and Exploration Expenses for Oil and Gas:
The production and exploration expenses for oil and gas were Rs.9549.81 million
as against Rs.9583.21 million during the previous year ended on 30th September,
2006 representing a marginal decrease of 0.35 % as compared to previous
year.
Salaries,
Wages and Employees Benefits:
The Salary and Wages stood at Rs.1053.48 million as against
Rs.946.96 million for the previous year ended on 30th September, 2006
representing an increase of 11.25% as compared to previous year.
Manufacturing and Other Expenses:
The manufacturing and other expenses were Rs.6813.88 million as against
Rs.6934.07 million for the previous year ended on 30th September, 2006
representing decrease of 1.73 % as compared to previous year.
BIODATA
An Indian multinational company, which involved in the key sectors of
Consumer Durables, Display and Color Picture Tube, CRT Glass, Oil and Gas is
named as Videocon Industries Limited. The Company was incorporated in 4th
September of the year 1986 as Adhigam Trading Private Limited for the business
of trading in paper tubes. For manufacture the products under the Videocon, the
company have 8 plants situated in Tq- Paithan, Bhalgaon,
The Company's Black and White and Color TV, Washing Machines released in the
year 1987. In September of the year 1988, the company decided to diversify in
the business of lease financing, hire purchase and investment activities. The
home entertainment systems, electronic motors and air conditioners were partaken
under Videocon during the year 1989-1990. The Management of the Company
underwent a change in the year 1990-91 by way of transfer of equity shares to
the Videocon Group. VIL had outfitted the refrigerators and coolers in the
period of 1991. The name of the company was changed from Adhigam Trading
Private Limited to Videocon Leasing and Industrial Finance Limited in 14th
February of the year 1991. During the year 1995, the company made its footprint
in glass shells for CRT segment. After a year, in 1996, VIL had diversifies
into oil sector, the crude oil was the most concentrated one in the same
period. The Company had formulated and released compressors and compressor
motors in the year 1998. The notable thing in the company's saga was happened
in the year 2000; VIL had taken over the Philips color TV plant.
Petrocon India Limited was amalgamated with the Company effect from 31st
March of the year 2004; this resulted in the Company getting into oil and gas
business. With merger of Petrocon, the company had become a member of the
consortium that operates the Ravva Oil and Gas fields. In the same year of
2004, the company had changed its name to Videocon Industries Limited from
Videocon Leasing and Industrial Finance Limited. Videocon Securities Limited
was became as subsidiary of the company with effect from 15th June of the year
2004. During the year 2005, the company taken the three plants of Electrolux
To strengthen and maintain and its leadership status, the Videocon group has
clearly charted out its course for the future. Aggressive development is in
full swing at the R and D Centres to bring out state-of-the-art technologies
including True Flat, Slim, Extra Slim, Plasma and LCDs, at the earliest. In the
Oil and Gas business, having all the basic operator capabilities of a
prospecting entity, the group is looking to add more explorations and
production depth as also oil-bearing assets. The group will also get into gas
distribution in
PRESS RELEASE
Semiconductor
TFT-LCD PROJECT IN
Videocon Industries will set up a semiconductor FAB to
manufacture TFT-LCD in the State of
Videocon established a full fledged Research and
Development Laboratory in
The technology and manufacturing of fabs like the one they are planning are
today only in
Knowing Videocon’s capability, the Italian Government / EU have in the public
domain already approved support of more than 400 Million Euros for the project.
Delegation from
With the semiconductor policy coming into India, its
essential to support the semiconductor industry in the country and many major
state governments such as Andhra Pradesh, Tamil Nadu, Maharshtra and West
Bengal sent delegations to bring the project in their regions offering full
support with regards the infrastructure and location requirements for such a
project which needs to be on continuously and manufacturing precision is
critical
The Promoter Dhoot family having considerable existing stakes in Maharashtra
consider themselves as the sons of the soil of maharashtra and as marathi manus
want to have an emotional connect for such an important project which will be
the only one of its kind in the country and developing world with significant
employment generation potential.
The project involves highly critical manufacturing and the supply chain which
would mandate a significant portion of imports and exports to be air freighted
from across the world.
CIDCO has spent over a year to understand the project, its economics and its
implications for the region and has hence decided to go forward with the
project. The Videocon group is very excited to work with them who have significant
exposure to large urban projects. The land allocated is to be used for
manufacturing only.
VIDEOCON is the only consumer
durable brand in top 50 most valuable brands in
“The Economic Times – Brand
Finance
VIDEOCON is the only consumer durable brand in top 50 most valuable brands in
The brand ratings survey was
conducted only on the brands which are listed in BSE and are based on the last
5 years financial performance, its current market value and brand’s substantial
performance in that particular industry.
They will keep this momentum on and make sure that they consolidate their
leadership position through innovation, quality and performance on all fronts.
Another Jewel in
Videocon’s Crown – SAP ACE 2007 – Award
"Their hearty congratulations to Mr. Pawan Kalra, Mr.
Hemant Lathkar and their entire team for adding another feather in their
cap"........... At a glittering awards ceremony held on 27th August 2007
in
At a glittering awards ceremony held on 27th August 2007
in
Videocon, which is a ramp up customer of SAP, was given
this award in recognition for implementing a templated SAP Best-Practices-based
solution across 5 countries using global ASAP methodology within a short period
of 5 months. It may be recalled that Videoocon has won such a coveted award
from SAP AG for the second consecutive year. Videocon won the award in the
category of “Best Consumer Sector Implementation (Consumer Products)” last
year.
The Award ceremony was attended by senior management from
SAP, Partners and a good representation of Customers. Mr. Henning Kagermann,
CEO, SAP AG, Mr. Leo Apotheker, Deputy CEO, SAP AG and Members of the SAP AG
Executive Board presented the awards. Top management including board members
and senior IT personnel from across SAP’s customer base participated
enthusiastically and was in attendance to receive the awards. “It was a tough job
for us to pick the winning projects from a list of outstanding nominations,”
said Mr. Henning Kagermann.
Mr Pawan Kalra, Joint President , Videocon Industries Limited who had spearheaded this project in Videocon
received the award from Mr. Henning Kagermann and Mr. Leo Apotheker. On the
occasion Mr Pawan Kalra, said “In today’s dynamic world, keeping abreast with
the market forces is of paramount importance. The mySAP project at Videocon was
initiated and driven by the vision of a work environment where every employee
will be empowered with knowledge, information, statistics and data that would
facilitate in taking faster decision, increased proficiency, better service
deliveries to customers and expedited response to the market dynamics.
Relentless efforts, undivided attention and the spirit of core team members
resulted in the final completion of the mySAP project in a record time of 5
months”. “Videocon has aptly used SAP solutions to enable strategic decision
making, as a change agent for business transformation and to manage growth” he
added.
Videocon has emerged as the first company in
The award is a re-affirmation of the growing maturity of IT adoption in
Videocon Group of Companies. It underlines how information technology is being
leveraged at Videocon for effective business transformation and for
consolidation of its global spread. It bears a testimony to the fundamental
practice at Videocon to achieve excellence in its operational efficiencies
while delivering strong return on investment to its stakeholders.
Videocon inks a
strategic alliance with the Future Group
The precedence is set for future strategy...
Videocon inks a strategic alliance with the Future Group
The precedence is set for future strategy of retailing in
A second MOU, whereby HSRIL would give preferred vendor
status to Videocon brand was also signed. Through this agreement, HSRIL would
stock and sell all Videocon products at all their outlets .With the strategic
alliance with Future group in India Videocon has made a smart move to be part
of booming retail industry.
E Zone and Electronics Bazaar cater to all sections of the
society and Videocon’s wide range of products and multi locational
manufacturing facilities will definitely help to meet the rising expectations.
At a meeting held at Oberoi Hilton on the 27th December,
the MoU was signed by Mr P N Dhoot, Director of Videocon Industries and Mr.
Kishore Biyani, CEO Future Group. HSRILs decision to partner Videocon over
several brands from Korea, China and other developed European countries bears
testimony to the fact that Videocon as an Indian multinational has been
instrumental in offering the best-in-class technologies. This partnership
assumes significant importance in the wake of intense competition in the
retailing sector and the surfeit of cheap imports from
Commenting on the successful completion of the alliance,
Mr P N Dhoot commented, “All distribution channels are equally important .But
this strategic partnership acknowledges the tremendous momentum that organized retails
would assume in the days to come. Videocon’s commitment to continuously
innovate and produce technologically revolutionary products while assuring cost
leadership has been further vindicated through this partnership wherein
Videocon and HSRIL’s strengths will complement each other.”
Mr Biyani added, “All their formats have consistently been
making available to customers across the country, the finest products at the
most affordable prices. With this MOU, their brands like Sensei and Koryo will
continue this tradition.”
This initiative is sure to deliver synergies between the two groups who over a
period of time have conquered the hearts of the Indian consumers.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.49.97 |
|
|
1 |
Rs.75.45 |
|
Euro |
1 |
Rs.64.21 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
47 |
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 |
|