MIRA
INFORM REPORT
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Report Date : |
30.09.2008 |
IDENTIFICATION
DETAILS
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Name : |
NRB BEARINGS LIMITED |
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Registered Office : |
Dhannur, 15 Sri P M Road, Fort, Mumbai – 400001, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
30.06.1965 |
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Com. Reg. No.: |
013251 |
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CIN No.: [Company
Identification No.] |
L29130MH1965PLC013251 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PNEN04047B |
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PAN No.: [Permanent
Account No.] |
AAACN3479P |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business : |
Manufacturer of Bearings. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 9000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having fine track. Available
information indicates high financial responsibility of the company and its
management. Trade relations are reported as fair. Business is active.
Payments are reported as usually correct and as per commitments. The company can be considered good for any normal business dealings. It can be considered regarded as a promising business partners in a
medium to long-run. |
INFORMATION PARTED
BY
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Name : |
Mr. S. K. Shah |
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Designation : |
Accounts Manager |
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Date : |
12.09.2008 |
LOCATIONS
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Registered Office : |
Dhannur, 15 Sri P M Road, Fort, Mumbai – 400001, Maharashtra, India |
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Tel. No.: |
91-22-22664160/ 22664998 |
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Fax No.: |
91-22-22660412/ 22679850 |
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E-Mail : |
marketing@nrbbearings.co.in |
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Website : |
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Location : |
It is a owned building of 6 floors |
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Corporate Office/ Factory1: |
2nd Pokhran Road, Majiwade, Thane – 400606, Maharashtra,
India |
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Tel. No.: |
91-22-22664160/ 22664998 |
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Fax No.: |
91-22-22660412/ 22679850 |
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Factory 2: |
E-40, MIDC, Industrial Area, Chikalthana, Aurangabad – 431010, India |
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Factory 3: |
C-6, Additional MIDC Industrial Area, Jalna – 431203, India |
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Factory 4: |
E-7 2MIDC, Waluj, Aurangabad - 431133, India |
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Factory 5: |
A-5, Uppal Industrial Estate, Hyderabad – 500039, India |
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Factory 6: |
Plot No.33, Sector – II, SIDCUL IIE, Pantnagar, Udhamsingh Nagar,
Uttarakhand – 263153, India |
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Branch Offices: |
Located at: ·
Kolkata ·
New Delhi ·
Chandigarh ·
Chennai ·
Delhi ·
Gurgaon ·
Hyderabad ·
Nagpur ·
Noida ·
Pune ·
Bangalore |
DIRECTORS
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Name : |
Mr. Trilochan Singsahney |
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Designation : |
Chairman Cum Managing Director |
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Age : |
80 years |
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Experience : |
61 years |
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Qualifications : |
MA |
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Date of Appointment : |
17.07.1966 |
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Name : |
Mr. P. D. Ojha |
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Designation : |
Director |
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Name : |
Mr. Kala S. Pant |
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Designation : |
Director |
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Name : |
Mrs. Harshbeena S. Zaveri |
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Designation : |
Director |
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Age : |
48 years |
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Experience : |
21 years |
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Qualifications : |
AB, USA |
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Date of Appointment : |
01.10.1987 |
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Name : |
Mr. K. M. Elavia |
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Designation : |
Director |
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Name : |
Mr. Devesh S. Sahney |
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Designation : |
Director |
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Age : |
40 years |
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Experience : |
15 years |
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Qualifications : |
BBA (UK) MBA |
KEY EXECUTIVES
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Name : |
Ms. H. S. Zaveri |
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Designation : |
President |
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Age : |
48 years |
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Experience : |
21 years |
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Date of Appointment : |
01.10.1987 |
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Name : |
Mr. S. C. Rangani |
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Designation : |
Finance and Company Secretary |
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Age : |
59 years |
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Experience : |
37 years |
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Qualifications : |
B. Com, MMS, ACS |
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Date of Appointment : |
22.02.1993 |
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Name : |
Mr. S. M. Singhi |
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Designation : |
V P Personnel |
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Age : |
55 years |
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Experience : |
31 years |
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Qualifications : |
Bsc, LLM PHd Law |
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Date of Appointment : |
15.07.1991 |
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Name : |
Mr. A. S. Kohli |
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Designation : |
VP- Special Projects |
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Age : |
51 years |
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Experience : |
30 years |
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Qualifications : |
BE (Mechanical), PGDIM |
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Date of Appointment : |
04.03.1996 |
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Name : |
Mr. Asimendra Chaudhuri |
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Designation : |
V. P. Operations |
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Age : |
54 years |
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Experience : |
30 years |
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Qualifications : |
B. Tech PGDBM |
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Date of Appointment : |
01.07.2006 |
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Name : |
Mr. Ranjan Sen |
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Designation : |
VP Sales and Marketing |
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Age : |
46 years |
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Experience : |
23 years |
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Qualifications : |
BE (Mechanical), PGDBM |
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Date of Appointment : |
01.04.2005 |
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Name : |
Mr. R. Matkar |
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Designation : |
VP Projects and Logistics |
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Age : |
55 years |
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Experience : |
31 years |
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Qualifications : |
BE (Mechanical), ME (Production) |
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Date of Appointment : |
02.08.2005 |
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Name : |
Mr. P Ray |
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Designation : |
VP Engineering |
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Age : |
52 years |
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Experience : |
30 years |
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Qualifications : |
BE Mechanicals |
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Date of Appointment : |
19.07.1999 |
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Name : |
Mr. B. D. Patil |
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Designation : |
VP HR |
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Age : |
50 years |
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Experience : |
24 years |
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Qualifications : |
BSc, MLS |
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Date of Appointment : |
29.05.2007 |
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Name : |
Mr. M N Shintre |
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Designation : |
VP Finance |
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Age : |
43 years |
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Experience : |
21 years |
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Qualifications : |
BE, MMS, Graduate ICWA |
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Date of Appointment : |
07.05.2007 |
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Name : |
Mr. Herman Heinz Kamping |
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Designation : |
V P International Business Development |
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Age : |
52 years |
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Experience : |
28 years |
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Qualifications : |
Degree in Mechanicals Engineer |
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Date of Appointment : |
11.06.2007 |
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Corporate Services: |
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Mr.
S.C.Rangani |
Sr.Vice President
- Finance & Co. Secretary |
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Mr. M N
Shintre |
Vice President -
Finance |
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Mr. Asimendra
Chaudhuri |
Sr.Vice President
-Manufacturing Operations |
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Mr.R.D.Matkar |
Vice President -
Projects & Logistics |
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Mr. Ranjan Sen |
Vice President -
Sales & Marketing |
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Mr. Heinz Hermann
Kamping |
Vice President -
International Business Devlopment |
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Mr. B D Patil |
Vice President -
HR |
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Dr.S.M.Singhi |
Vice President -
IR |
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Mr.A.S.Kohli |
Vice President -
Special Projects. |
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Engineering : |
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Mr. Prabir Ray |
Vice President –
Engineering |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
(As on 31.03.2008)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Individuals |
19788120 |
40.82 |
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Corporate Bodies |
22086513 |
45.58 |
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Foreign Collaborator |
- |
- |
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NRI/ OCBs |
96351 |
0.20 |
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FI/ FII/ Banks |
4016120 |
8.29 |
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Mutual Funds/ Axis |
2474196 |
5.11 |
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Total |
48461300 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Bearings. |
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Products : |
·
Needle Cages And
Roller Cages ·
Needle Bushes (
Drawn Cup Roller Bearings ) ·
Bearing Wth
Cage-Guided Needles ·
Full Complement Needle Bearings |
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Exports : |
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Countries : |
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Imports : |
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Countries : |
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Terms : |
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Selling : |
Credit (30-45 days) |
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Purchasing : |
Credit (60-90 days) |
PRODUCTION STATUS
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Particulars |
Unit |
Installed
Capacity |
Actual
Production |
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Loose Needle Rollers |
Nos. in 000s |
3429120 |
2336622 |
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Needle Roller Bushed and Cages |
Nos. in 000s |
52294 |
43037 |
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Ball and Roller Bearings |
Nos. in 000s |
28930 |
21963 |
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Automobile Components |
Nos. in 000s |
4500 |
3137 |
GENERAL
INFORMATION
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Customers : |
OEM’s |
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No. of Employees : |
1456 |
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Bankers : |
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Facilities : |
Cash Credit taken from banks banks are secured by hypothecation of
inventories and book debts. Term Loans in Foreign currency (ii) are secured by hypothecation of
charge on the company fixed assets acquired from proceeds of the loan. Term Loan (iii) is secured by hypothecation of/ charge on company’s
vehicles specifically purchased under the loan.
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Deloitte Haskins and Sells Chartered Accountant |
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Name : |
A.F. Ferguson and Company Chartered Accountant |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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50000000 |
Equity Shares |
Rs.2/- each |
Rs.100.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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48461300 |
Equity Shares |
Rs.2/- each |
Rs.96.923
Millions |
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Note:
45500 Equity Shares of Rs.2 each have been
allotted as fully paid-up pursuant to contracts without payments having been
received in cash.
41563300 Equity Shares of Rs.2 each have been
allotted as fully paid-up by way of bonus shares by capitalization of general
reserve and capital reserve.
38000 Equity Shares Rs.2 each are allotted to
the members of erstwhile Sanhney Steel and press Works Limited on its
amalgamations with the company on 01.04.1991.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
|
31.03.2008 |
31.03.2007 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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96.923 |
96.923 |
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2] Share Application Money |
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0.000 |
0.000 |
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3] Reserves & Surplus |
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1709.260 |
1510.208 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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1806.183 |
1607.131 |
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LOAN FUNDS |
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1] Secured Loans |
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437.162 |
530..471 |
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2] Unsecured Loans |
|
642.053 |
381.533 |
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TOTAL BORROWING |
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1079.215 |
912.004 |
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DEFERRED TAX LIABILITIES |
|
119.337 |
109.600 |
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TOTAL |
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3004.735 |
2628.735 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
|
1560.789 |
1249.522 |
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Capital work-in-progress |
|
46.456 |
25.608 |
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INVESTMENT |
|
178.145 |
133.759 |
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DEFERREX TAX ASSETS |
|
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
|
828.579 |
689.979 |
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Sundry Debtors |
|
844.508 |
723.793 |
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Cash & Bank Balances |
|
59.631 |
34.013 |
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Other Current Assets |
|
0.000 |
0.000 |
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Loans & Advances |
|
231.175 |
258.983 |
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Total
Current Assets |
|
1963.893 |
1706.768 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
|
578.385 |
389.778 |
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Provisions |
|
166.163 |
97.144 |
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Total
Current Liabilities |
|
744.548 |
486.922 |
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Net Current Assets |
|
1219.345 |
1219.846 |
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MISCELLANEOUS EXPENSES |
|
0.000 |
0.000 |
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TOTAL |
|
3004.735 |
2628.735 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
|
31.03.2008 |
31.03.2007 |
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Sales Turnover |
|
3214.237 |
3031.081 |
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Other Income |
|
70.532 |
44.966 |
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Total Income |
|
3284.769 |
3076.047 |
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Profit/(Loss) Before Tax |
|
518.362 |
599.149 |
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Provision for Taxation |
|
183.237 |
201.525 |
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Profit/(Loss) After Tax |
|
335.125 |
397.624 |
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Imports : |
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Raw Materials |
|
238.393 |
234.574 |
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Stores & Spares |
|
40.174 |
42.130 |
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Capital Goods |
|
188.222 |
273.416 |
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Total Imports |
|
466.789 |
550.120 |
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Expenditures : |
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Raw Material Consumed |
|
1059.380 |
1007.423 |
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Packing Materials Consumed |
|
319.012 |
293.907 |
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stores and spares Consumed |
|
107.570 |
63.039 |
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Processing Charges |
|
131.671 |
126.854 |
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Power and Fuel |
|
537.301 |
450.225 |
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Employee Costs |
|
57.052 |
43.124 |
|
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Repairs |
|
320.402 |
298.038 |
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Interests |
|
179.684 |
158.262 |
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Depreciation & Amortization |
|
54.335 |
36.026 |
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Other Expenditure |
|
0.000 |
0.000 |
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Total Expenditure |
|
2766.407 |
2476.898 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2008 1st Quarter |
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Sales Turnover |
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|
781.400 |
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Other Income |
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|
15.700 |
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Total Income |
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|
797.100 |
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Total Expenditure |
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|
692.300 |
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Operating Profile |
|
|
104.800 |
|
Interests |
|
|
15.400 |
|
Gross Profit |
|
|
89.400 |
|
Depreciation |
|
|
52.600 |
|
Tax |
|
|
12.500 |
|
Reported PAT |
|
|
23.100 |
KEY RATIOS
|
PARTICULARS |
|
|
31.03.2008 |
31.03.2007 |
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Debt-Equity Ratio |
|
|
0.58 |
0.56
|
|
Long Term Debt-Equity Shares |
|
|
0.34 |
0.39
|
|
Current Ratio |
|
|
1.58 |
1.90
|
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TURNOVER RATIOS |
|
|
|
|
|
Fixed Assets |
|
|
1.26 |
1.41
|
|
Inventory |
|
|
4.87 |
5.48
|
|
Debtors |
|
|
4.71 |
5.57
|
|
Interests Cover Ratio |
|
|
8.57 |
12.86
|
|
Operating Profit Margin (%) |
|
|
20.74 |
23.08
|
|
Profit Before Interests and Tax Margin (%) |
|
|
15.88 |
18.56
|
|
Cash Profit Margin (%) |
|
|
13.93 |
15.88
|
|
Adjusted Net Profit Margin (%) |
|
|
9.07 |
11.36
|
|
Return On Capital Employed (%) |
|
|
21.72 |
27.95
|
|
Return On Net Worth (%) |
|
|
19.63 |
26.70
|
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
Subject an Indo-French JV venture between Nadella, France and Trilochan Sahney is into manufacture of Needle roller bearings, Cylindrical roller bearings and Ball bearings. It pioneered the manufacture of needle roller bearings in India. The French partner holds 26% stake in the company.
The Timken Co. USA in Oct 2002 which has acquired Engineered Solutions Business
segment of Ingersoll-Rand Ltd as part of world wide acquisition. By this
worldwide acquisition Timken got the voting rights of Nadella S.A. the JV
partner thus resulting in Timken picking up a default acquisition of 26% equity
stke in NRB Bearings.
The company's activities are organised into three divisions -- general
bearings, needle bearings and agency. The general bearings division set up in 1982
manufactures cylindrical roller bearings. It later diversified into spherical
roller bearings and ball bearings in technical collaboration with Ransome
Hoffman Pollard International (RHP), UK. In 1995, its product range was
diversified again by including taper roller bearings with technical knowhow
from SNR Roulements, France.
In Apr.'91, Sahney Steel and Press Works was merged with it. NRB's list of
customers include Maruti Udyog, Mahindra & Mahindra, Telco, Ashok Leyland,
Bajaj Tempo, Bajaj Auto, LML, TAFE, Siemens, ABB, HMT, Kelvinator, Lucas TVS
and LMW. The company's agency division, set up in 1980, acts as an intermediary
for a number of foreign companies in UK, France, Germany and Switzerland such
as RHP, Gamet, Nadella, Rollix, IBC, Rohm, Schneeberger, Kugler SA and
Forsheda.
Subject came out with a public issue in Mar.'95 to finance the installation of
balancing equipment at its Jalna unit to increase productivity.
The company has set up an engineering center at Thane to foster technological
innovation and to move towards becoming a bearings solution provider. To
further develop knowledge on bearing applications, the full fledged testing
facilities and computer aided design center has been setup. The company has
implemented expansion for enhanced capacity in the general bearings division,
which has resulted in additional capacity of 2.1 million nos. for various type
of ball and roller bearings in the year 1999-2000.
The Company have a jointvernture comany and two subsidiary companies. The
jointventure company NRB Torrington is set up in collaboration with the
Torrington Company, US. to manufacture wide inner ring ball bearings and housed
units. Commercial production of this company started during the year 1994-95.
Essen Marketing Services Limited, one of the subsidiaries of the company is
into agency business. While the other SNL Bearings(SNL) formerly Shriram Needle
Bearing Industries Limited, is into manufacture of Needle Roller Bearings. SNL
became the subsidiary of NRB Bearings with effective from June 1, 2001 by the
acquisition of 63.98% of the equity capital of SNL partly from SRF Limited, and
their associates (45.78%) and under the public offer made under SEBI
guidelines. Currently the parent company is taking various measures for SNL's
turnaround. This acquisition will enable the company to become significantly
stronger player in the needle bearing segment in the country.
On quality front all the plants of the company and its corporate office is
accredited with QS-9000 certificate by TUV, the internationally acclaimed
registrars. Earlier the company and all its plants have been certified for
ISO-9002.
MILESTONES:
Starting with an initial capital base of Rs.1.00 million in
1966, NRB's equity capital grew to Rs.83.20 million by 1993 only through bonus
issues. In 1995, there was a fresh infusion of capital from the public to the
tune of Rs.12.72 million. The present capital base of NRB is Rs.96.92 million
and it is a Public Limited Company quoted on the Bombay Stock Exchange as well
as the National Stock Exchange.
1965: Setting up of a joint venture company with Nadella, France, the
oldest needle bearing manufacturer in the world. This joint venture company was
promoted on the principles of precision, quality, vision and service.
1966: The first plant was setup in Wagle
industrial Estate, Thane, Mumbai to produce Needle Roller Bearings.
1975: A
larger manufacturing unit was set up at 2nd Pokhran Road also in Thane to
manufacture Needle Roller Bearings.
1980: NRB's indigenous manufacturing capabilities were complemented by
its Agency Division which was setup in 1980 to offer a wide range of imported
bearings and allied products to its customers.
1980: Aurangabad plant, Maharashtra was
setup to manufacture needle rollers to meet the growing demand of its
customers.
1982: The General Bearing Division was set
up at Jalna in Maharashtra to manufacture Cylindrical Roller Bearings. Soon
thereafter, it diversified further and commenced the manufacturing of
spherical roller bearings and ball bearings. NRB has progressively expanded its
capacity at Jalna to manufacture Needle Roller Bearings and Tapered Roller
Bearings.
1990: In view of the diversified range and types of bearings being
manufactured, the name of the company was changed to NRB Bearings Limited at
the extraordinary General Meeting held on 1st February 1990.
1991: To keep pace with the expanding range and demand, a new plant was
set up at Waluj, Maharashtra to manufacture needle roller bearing products.
In April 1991 the Hyderabad unit was amalgamated into NRB Bearings to produce
needle cages, hubpin kits and connecting rod cages.
1995: NRB Bearings Limited went Public with a Public Issue of 1272,000
Equity shares.
2000: SNL Bearings Limited (formerly Shriram Needle Bearing Industries
Limited ) was acquired by NRB on 1st June 2000. SNL has successfully developed
and introduced cage guided drawn cup needle bearings, connecting rod needle
cages for piston pin and crank pin applications along with other types and
ranges of needle bearings.
2000: NRB was awarded the corporate QS-9000 certification in May
by TUV Management Services (GMBH) an internationally acclaimed registrar for
its corporate office and its Plants..
2000: 3rd May 2000 NRB set up a Research and Development Centre
within its Thane plant to move closer towards its vision of becoming a
"Bearing Solution Provider".
2003 : NRB Developed "
Rocker-arm bearings " and by 2004 has
become the biggest supplier of Rocker-arm
bearings in the country.
2006: Milestone year for NRB. NRB announced
its decision to set up a plant in Thailand to cater to the growing
ASEAN markets To cater to the growing
demand NRB announced its decision to set up a plant in Pantnagar -
Uttaranchal
2007 :NRB's Engineering Center got
recognition for " Inhouse R & D " by the Government of India
OPERATIONS:
Sales (net of excise duty) for the year ended 31st March, 2008 were Rs.3214.200 Millions as against Rs.3031.100 Millions in the previous year, an increase of 6%. Profit before tax (PBT) was at Rs.518.400 Millions as compared to Rs.599.100 Millions in 2006-07, down by 13.5%. After providing for current and deferred taxes, the Profit after tax (PAT) was Rs.335.100 Millions down by 15.7%.
The year 2007-08 was one of mixed experiences. The topline growth was achieved
despite declining demand from various user segments of the auto industry.
Margins, however, remained under pressure on the back of sharp rises in the
prices of key raw material- steel.
During the year the company further built up its position in the international
markets, as exports registered a growth of 45%.With several international
marquees as its customers, who have entered into long term supply contracts and
product development initiatives for their new platforms, the benefits will
accrue in the coming years.
The company is focused on addressing the ever emerging challenges of sourcing
by well-timed buying decisions and by entering into long to medium supply
contracts. Despite all round efforts, the cost escalations could not be passed
on without a time lag, but the efforts of 2007-08 are expected to bear fruits
in 2008-09. In the meanwhile cost escalation challenges are mitigated by
improving process efficiencies in manufacturing, intensifying R & D efforts
to develop new products and speed up commercialization.
As required under the new Accounting Standards, related party transactions,
calculations of earnings per share, provision of deferred tax liability and
consolidated accounts of the company and its subsidiaries are made a part of
the Annual Report.
SUBSIDIARIES AND NEW
PLANT
As of 31st March, 2008 the company has two subsidiaries viz. SNL Bearings
Limited, (SNL) and NRB Bearings (Thailand) Limited. The consolidated results
include the working of these subsidiaries.
The company has fully .contributed to the share capital of NRB Bearings
(Thailand) Limited, Thai Baht 50 million. The subsidiary company is expected to
commence commercial production during the year.
The Pantnagar plant of the company in the state of Uttarakhand was inaugaurated
on 7th May, 2008. The plant will inter-alia meet the requirements of Tata
Motors and other OEMs like Bajaj Auto, Ashok Leyland and Hero Honda who are
also setting up manufacturing plants in the State of Uttarakhand.
SAFETY, HEALTH AND
ENVIRONMENT
The company's plants at Thane, Aurangabad, Waluj, Hyderabad and Jalna have
already been accredited to internationally recognized environmental management
systems viz. ISO 14001:2004 and OHSAS: 18001:1999 and ISO/TS: 16949:2002.
The commitment to the environment extends beyond legal compliance requirements
and initiatives are under way across the company's locations which include
greening programmes, rainwater harvesting, vermiculture, treatment plants, etc.
The company is in full compliance with the environmental regulations regarding
disposal of hazardous waste.
Safety is accorded the highest priority by the company. A clear safety policy,
several training programmes and communication tools have been put in place.
Projects are continuously identified for improvements and worker participation
and regular visits by safety committee members to units in the auto sector. TPM
techniques like Poka Yoke (mistake proofing) are being implemented on machines
to minimize accidents. Training and competence programme are conducted to
educate and create awareness amongst employees, their families and the
company's contractors.
Health and environment are considered as key and essential aspects on which
depends the welfare of the employees. The company strongly focuses upon
providing a conducive work environment and has installed wind ventilators to
reduce temperatures within the plants. Welfare workshops and health check ups
are conducted on regular basis for all employees.
CORPORATE
SOCIAL RESPONSIBILITY
As part of its efforts to educate local residents, the company has adopted
ITI's at Jalna and Ambad as part of a public private partnership. At Hyderabad
the local police station under the Cyberabad Commissionerate have been adopted
for imparting 5 S training and introduction of Quality Circles. The company is
one of the co-sponsors in a project launched by TERI (The Energy and Resources
Institute. Mumbai) to target 2000 children from 20 municipal schools in and
around Mumbai in an environment education and awareness project.
MANAGEMENT
DISCUSSION AND ANALYSIS
BUSINESS REVIEW:
The company is in the ball and roller bearing business and is the only
manufacturer in India making all the broad types of bearings viz. ball
bearings, needle/cylindrical/spherical/tapered/thrust roller bearings. The
annual production of the domestic organized sector is estimated at Rs.28500.000
Millions for the year 2007-08. The company's market share in the domestic
organized sector is 12%.
In 2007, even as the world economy slowed from 3.9% to 3.6%, there was a
robust 7.9% growth in developing economies, offsetting the slowdown caused by the
slower US domestic demand. The Indian economy is expected to grow by 8.7% for
2008, the global financial turmoil notwithstanding. The economy became a
trillion dollar economy- one of only 12 - through robust domestic consumption,
rupee appreciation and export growth led by the service sectors.
The demand for the bearing industry in India is derived from demand in two user
segments - Automotive and Industrial. The automotive industry is the largest
user segment. Not only is the Indian automobile industry expected to mirror the
growth of the country's GDR the Indian auto component industry is estimated to
be at a significant advantage with a market expected to increase to USD 40
billion by 2015 - a 13 fold growth in a mere 8 years (ACMA and Mckinsey). India
is already the fastest growing million-plus automobile market in the world
(except China), yet only 6 out of 1000 Indians own a car.
Capital investments for creating fresh capacities and build infrastructure to
meet growing demand are taking place in all sectors from power and oil/gas to
roads, ports and airports. Considering the continuous growth in the automobile
industry, capital goods industry and the overall growth in the Indian economy,
the company expects strong demand to be sustained for 'its products.
The rising consumer prices and interest rates are a cause of concern and can
slow down the growth rate. Continued adherence to the ongoing reform process
and reduction of budget deficits are vital for sustaining growth.
More reforms to improve infrastructure within targeted timelines and the
active participation of the private sector would speed up the overall economic
development in the long run.
FINANCIALS
Turnover, net of excise duty, increased by 6% to Rs.3214.200 Millions from
Rs.3031.100 Millions in 2007-08. Domestic sales increased by 2.6% from
Rs.2787.000 Millions to Rs.2860.700 Millions while exports increased by 45% to
Rs.353.500 Millions from Rs.244.100 Millions in 2007-08.
SEGMENT WISE
PERFORMANCE
The company has only one significant reportable segment of ball and roller
bearings as the primary business segment. The assets and liabilities of the
company are all expended towards this business segment.
OPPORTUNITIES AND THREATS
OPPORTUNITIES
Road and infrastructure development programs are expected to continue and
within 5 years there will be improved connectivity to ports, cities and
villages through a network of highways and interconnecting roads. As per
planning commission estimates, the Government has planned investments of USD 33
billion for the oil and gas sector, USD 40 billion for improving road and
railway infrastructure, USD 18 billion for ports and USD 10 billion for
airports, aggregating USD 100 billion. This infrastructure spending will lead
to growth in the manufacturing sector with the consequential linkage to their
industry. This will give impetus to people movement and to movement of goods by
reducing per tonne-km transportation costs. Further with higher disposable
incomes, easier financing options and changes in lifestyle, penetration of
personalized transport is expected to increase. A vibrant auto industry offers
sizeable market opportunities for the domestic bearings industry.
With a wide product range, the company is in a position to take advantage
of the buoyancy in the economy. The company has already created manufacturing
facilities to meet this demand and will continue to do so.
The increasing exports of automotive products from India arid the global
sourcing policy of global majors have resulted in India developing into a
manufacturing hub for auto component manufacturers. The company is welt
positioned to benefit as over the past few years it has focused on implementing
best-in-class production systems, technology development, slashing cost while
upgrading quality and scaling up of its manufacturing facilities. Being a low
cost location the company also sees increasing opportunities for export.
Agricultural GDP of India has grown by
3% during FY 2007-08. Also the credit allocation to agriculture has been
increased significantly.
Increased agri-focus of the Indian Government has reflected in the budget for FY 2008-09 and the low penetration of tractors in the domestic market provides significant scope for business expansion.
Debt waiver to the tune of
Rs.600000.000 Millions announced for small and marginal farmers is expected to
create additional liquidity in the hands of the farmers.
THREATS
Unfavourable commodity prices -
unfavourable prices for steel based inputs have significantly affected the
margins for the industry. The sluggish condition in the user automotive
industry has delayed the pass on of such cost increases to the end users. The
continuing upward trend of global crude prices could adversely impact the fortunes
and the profitability of the automotive industry.
Global competition - with many global auto majors entering India with a range
of products, their suppliers for auto components, including bearings, have
plans following them into India, adding to the MNCs already having
manufacturing facilities in India. The demand for the automotive industry may
slow down in case of any slackness in the implementation of the various
infrastructure projects. This would adversely affect the company's utilization
of resources.
Spurious/ counterfeit product supplies catering mainly to the replacement
market which accounts for 25% of the total demand for the industry continues to
be a major threat.
Government regulations - Reduction in custom duty on imports and the implementation
of Free Trade Agreements (FTA) and other similar government policies can
potentially open the Indian market to more imports at far lower cost thin
presently prevailing, including from China and Eastern Europe. Appreciation of
the rupee has further contributed to cheaper imports, increasing competition
for domestic producers.
Availability of finance is one of the
most significant factors influencing demand for vehicles and tractor: Around
95% of commercial vehicles and tractors, 65%-75% of 2 wheelers and passenger
cars are finance through loans. With RBI introducing tight monitory measures
both cost of financing and availability has lei to demand decline for these
products.
To counter these risks the company has taken several initiatives. To stay
competitive, the company is continuing it focus on cost reduction and import
substitution measures. Through focus on exports and product diversification the
adverse effect of any slow down in the domestic automotive market will be
minimized. The company i well positioned to serve the market and its customers
with latest technology products and strives to have the right products on time
and well ahead of competition. The company remains committed towards continuous
process improvements through implementing TPM and other latest techniques in
production, quality and process management.
TRADE REFERENCE:
- Talcon
- Maruti
- Ashok Leyland
- Bajaj Auto
WEBSITE DETAILS:
PROFILE:
Company was established in 1965 as an Indo
French Joint Venture with financial and technical collaboration from Nadella.
Nadella belongs to Timken a World leader in Taper Roller Bearings.
Company was incorporated in Mumbai
under the name Needle Roller Bearing Company Limited; the first Company to
manufacture Needle Roller Bearings in India.
CODE
OF CONDUCT FOR BOARD OF DIRECTORS AND SENIOR MANAGEMENT
The Directors and the Senior Management employees of the
company shall follow the following Code of Conduct adopted by the company.
Compliance
and Ethical conduct : To
comply with applicable laws, rules and regulations and promote honest and
ethical conduct of the business. They should help to create and maintain a
culture of high ethical standards and commitment to compliance, and to maintain
a work environment that encourages the stake holders to raise concerns for the
attention of the management.
Business
opportunities :Shall perform their roles with
competence, diligence, in good faith and in the best interest of the company
and advance the company’s legitimate interest whenever the opportunity to do so
arises. They are expressly prohibited from taking for themselves personally,
opportunities that are discovered through the use of company’s property,
information or position.
Fair
dealing. :Should
endeavor to deal fairly and promote fair dealing by the company, its employees,
agents, with customers, suppliers and employees.
Integrity
of data furnished :Dedicate
time and attention to the company drawing upon their experience and provide expertise
in their areas of specialization in the best interests of the company and give
careful independent consideration to the affairs of the company and all
documents placed before them to satisfy themselves with the soundness of key
decisions taken by the management.
Conflict
of interest : Avoid having any private
interests interfere with the interests of the company or their ability to
perform their duties and responsibilities objectively and effectively. There
should be a full disclosure of any transaction or relationship that could give
rise to an actual conflict of interest with the company and seek the necessary
authorization to pursue such transactions.
Insider
trading : To become familiar with and understand the laws, regulations,
policies and codes as set out by the Government and ensure that they and their
immediate family do not derive any benefit or assist others to derive any
benefit from the access to and possession of information about the company or
the group which is not in the public domain and thus constitutes insider
information.
Confidentiality :
Maintain the confidentiality of information entrusted for them in carrying out
their duties and responsibilities, except where disclosure is approved by the
company or legally mandated or if such information is in the public domain.
Work
environment :
Provide a fair and just environment wherein all are treated equally without
regard to their race, caste, religion, sex, colour, ancestry, marital status,
age and maintain a work environment free of harassment whether physical, verbal
or psychological.
AGREEMENT
Indian and International Industry
Commercial
Vehicles
- Ashok Leyland Limited ( Technical tie-up with IVECO )
- Bajaj Tempo Limited
- Eicher Motors Limited
- Mahindra & Mahindra Limited
- Renault VI, France
- Swaraj Mazda Limited
- Tata Motors Limited
Passengers Cars
- Hindustan Motors Limited
- Maruti Udyog Limited (Suzuki)
- Tata Motors Limited ( Indica / Indigo )
Two Wheelers
- Bajaj Auto Limited
- Bisan Bisiklet Moped Otomotiv Sanayi ve - picaret a.s. - Turkey
- Hero Honda Motor Limited
- Honda Motorcycles & Scooters Limited
- Kinetic Motor Company Limited
- LML Engineering Limited
- Majestic Auto Limited
- TVS Motor Company
- The Royal Enfield Motors Limited
- Yamaha Motor India Private Limited
Automotive
Ancillaries
- Automotive Axles Limited
- Delphi Automotive Systems
- KN Japan Limited
- GKN Driveline Utsunomiya Limited
- Hindustan Hardy Spicer Limited
- Lucas TVS Limited
- MICO Limited (BOSCH)
- Mahindra Sona Limited
- NSK-Poland
- Nachi Industrial S.A.
- Rane (Madras) Limited
- Rane TRW Limited
- Sona Koyo Steering Systems Limited
- Spicer India Limited ( DANA)
- ZF Steering Gear (I) Limited
Textile Machinery Industry
- Lakshmi Machine Works Limited ( Rieter, Switzerland)
- Marzoli Spa - Italy
- Textool Company Limited
Switchgears / Electrical
- Asea Brown Boveri Limited
- Bharat Heavy Electricals Limited ( BHEL)
- Crompton Greaves Limited
- Greaves Limited
- Husqvarna , Sweden ( Electrolux )
- Kulkarni Power Tools Limited
- Otis Elevators Limited
- Ralliwolf Limited
- Siemens Limited
- Voltas Limited
- Wipro Fluid Power Limited
Locomotives
- GM Electromotive,
USA
Achievements:
Over the three decades of their existence, Company has achieved several milestones. The company has broad based its product range to include apart from Needle roller bearings, spherical roller, ball, tapered roller and cylindrical roller bearings.
Awards:
They have received the Supplier Award for 'Challenge India
Support (2002-03)' from Honda Motorcycle and Scooter India (Private) Limited
Acquisition
- SNL Ranchi
They entered into an agreement
with SRF Limited and its associates to acquire their entire shareholding of
45.78% in Shriram Needle Bearing Industries Limited. The entire shareholding of
the erstwhile promoters of 16,53,493 equity of Rs.10 each in SNBL was purchased
at a price of Rs.5 per share. This has enabled us as a Group to:
-
consolidate their position in
the Needle Bearings segment in India
-
increase capacity for the
production of Needle Bearing products without any gestation period for the
domestic and export market
-
strengthen their geographical
reach with easier access to the northern and eastern India markets
-
access a wider range of
products and markets
Combined with their plant
locations in the Western and Southern regions, the SNL plant at Ranchi has
boosted operations and will help to service their customers better in the
Northern and Eastern regions.
The synergy between the two
corporates, will lead to tremendous opportunities for both companies to benefit
mutually from their combined strengths.
With the Joint effort of the managements of NRB & SNL the company is under
re-structuring its operations and showed profits for the financial year ended
05-06. As a part of the Growth plan SNL was also ISO / TS 16949 certified in July 2006.
NRB Certifications
They have always benchmarked
against the best companies globally.
Improvement is a continuos process
at company the major thrust areas being product quality and customer service.
They have successfully implemented a systems-oriented approach throughout the
organization.
TUV SUD Management Service (Gmbh),
the internationally acclaimed certification body , have assessed their Quality
system and awarded ISO 9001: 2000 Corporate
Certification to their corporate office and their plants in Aurangabad , Hyderabad , Jalna Thane and Waluj.
In line with its
ENVIRONMENT & SAFETY policy NRB got itself certified by TUV SUD
Management Service (Gmbh)
OHSAS 18001: 1999 (Occupational
Health and Safety Management Systems - specification)
ISO 14001: 2004 (Environmental
Management Systems)
NRB-THE
FUTURE: LOOKING AHEAD - THE NEXT 2 YEARS
1) Current Sales Turnover (2006 - 2007) – 3030.000 Millions,
estimate 3350.000 Millions (2007 -2008 )
2) Continuous improvement programme in place leading to
improved operating efficiencies.
3) Focus on new product development.
4) Exports growing at exponential rate for past two years.
5) Industrial OEM business to be substantially increased.
Automotive
sector including auto ancillaries
1) Commitment of significant resources towards R&D to ensure continuous
product upgradation.
2) Ongoing investment for a state-of-the-art Centre for
technological innovation.
Export
1) Sales turnover for 2006 - 2007: 260.000 Millions
Estimate for 2007 - 2008:
350.000 Millions
2) Share of Exports to comprise 10% of total sales by 2006 –
07
3) Growth targetted through OEM Focus.
Intensive
penetration of replacement market
1) Increased focus on market development.
2) Rapid expansion of dealer reach.
3) Focus on semi-urban and rural markets.
4) Countrywide warehouse plan.
Industrial
segment
Sales from this segment to increase substantially. Cellular Manufacturing to
cater to this high margin - low volume segment.
NRB
Research and Development Centre
Quality Control is the hallmark of every operation. The success of company is aided
by its focus on design and development where the latest technology is used to
offer need-based customized state of the Art Software: company uses
Pro-Engineer and Pro Mechanica for Product Design. TUV Management Services
(Gmbh), the internationally acclaimed registrars, have awarded the QS-9000
Corporate Certification to NRB at its Coporate office & all plants.
Company has set up a R&D Center, to achieve the status
of, a global "Bearing Solution Provider". Their aim is to develop
long lasting partnerships with their customers. The expertise that NRB has
developed has helped to make the transition from a vendor to a business
partner. They have invested around Rs 40mn in establishing an R & D center
at their Thane plant. Around 20 people have been trained in-house to man the
facility. The Thane Plant is easily accessible.
Objective
To develop core competency in Bearing Technology so as to maintain an edge in
product quality and innovation, resulting in advantages in production,
productivity & responsiveness to the market..
Aim
Product Research
· Application based Bearing selection
·
System analysis, Structural & Dynamic
·
Bearing material & Heat Treatment
·
Determination of Product Quality
·
Failure analysis
·
Patent study
Product
Design
· Establishment of Design rules & standards
· Bearing design based on application detail
· Optimisation of product Design
·
Design of Seals & Lubrication
Process Design
· Determination of Process Flow
· Study of Process Parameters
· Tooling Design
· Tool material & Heat Treatment
· Design of Inspection Gauges
· Standardization of Tooling
· SMED, DOE
Product Testing
· Testing of bearings for Endurance Life
· Work process simulation
· Interpretation of Test Results
·
Tribology
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.46.94 |
|
UK Pound |
1 |
Rs.85.57 |
|
Euro |
1 |
Rs.67.79 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|