MIRA
INFORM REPORT
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Report Date : |
29.09.2008 |
IDENTIFICATION
DETAILS
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Name : |
SOLECTRON EMS INDIA LIMITED |
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Registered Office : |
No. 44, KHB Industrial Area, Yelahanka New Town, Bangalore – 560 064,
Karnataka |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
27.09.2006 |
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Com. Reg. No.: |
40641 |
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CIN No.: [Company
Identification No.] |
L32109KA2006PLC040641 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRS25638E |
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Legal Form : |
Public limited liability company. Company’s shares are listed on the
Stock Exchange. |
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Line of Business : |
Providing Electronic Manufacturing Services |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 2300000 |
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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 the result of demergering of Solectron Centum Electronics
Limited which is a well established and reputed company having fine track.
Trade relations are fair. Payments are usually correct and as per
commitments. The company is doing well. It can be considered good for normal business dealings at usual trade
terms and conditions. |
LOCATIONS
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Registered Office : |
No. 44, KHB Industrial Area, Yelahanka New Town, Bangalore – 560 064,
Karnataka, India |
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Tel. No.: |
91-80-28462062 / 28462064 / 41685387 / 41685390 |
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Fax No.: |
91-80-28566274 / 28462861 |
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Website : |
DIRECTORS
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Name : |
Mr. Apparao Mallavarapu |
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Designation : |
Director |
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Date of Appointment : |
12.06.2008 |
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Name : |
Mr. Manny Marimuthu |
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Designation : |
Director |
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Date of Appointment : |
28.11.2007 |
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Experience : |
15 Years |
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Name : |
Mr. Manoj Nagrath |
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Designation : |
Director |
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Date of Appointment : |
18.03.2008 |
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Name : |
Mr. Rajiv Mody |
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Designation : |
Director |
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Date of Appointment : |
26.06.2008 |
KEY EXECUTIVES
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Name : |
N Sri Sai Kumar |
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Designation : |
Company Secretary |
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Name : |
Mr. Soundarajan Subramanian |
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Designation : |
General Manager |
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E-Mail : |
BUSINESS DETAILS
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Line of Business : |
Providing Electronic Manufacturing Services |
GENERAL
INFORMATION
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No. of Employees : |
Around 100 |
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Bankers : |
Not Divulged |
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Banking
Relations : |
- |
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Auditors : |
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Name : |
BSR and Company Chartered Accountants |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7500000 |
Equity Shares |
Rs.10/- each |
Rs.75.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7400000 |
Equity Shares |
Rs.10/- each |
Rs.74.000
millions |
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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74.000 |
74.500 |
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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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376.300 |
253.700 |
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4] (Accumulated Losses) |
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0.000 |
0.000 |
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NETWORTH |
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450.300 |
328.200 |
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LOAN FUNDS |
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1] Secured Loans |
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0.000 |
0.000 |
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2] Unsecured Loans |
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445.900 |
543.800 |
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TOTAL BORROWING |
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445.900 |
543.800 |
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DEFERRED TAX LIABILITIES |
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0.000 |
0.000 |
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TOTAL |
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896.200 |
872.000 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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307.800 |
347.800 |
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Capital work-in-progress |
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0.300 |
13.000 |
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INVESTMENT |
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0.000 |
0.000 |
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DEFERREX TAX ASSETS |
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0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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501.100 |
366.400 |
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Sundry Debtors |
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460.300 |
548.900 |
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Cash & Bank Balances |
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26.700 |
5.500 |
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Other Current Assets |
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0.000 |
0.000 |
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Loans & Advances |
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167.100 |
85.900 |
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Total
Current Assets |
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1155.200 |
1006.700 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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513.000 |
484.600 |
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Provisions |
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54.100 |
10.900 |
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Total
Current Liabilities |
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567.100 |
495.500 |
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Net Current Assets |
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588.100 |
511.200 |
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MISCELLANEOUS EXPENSES |
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0.000 |
0.000 |
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TOTAL |
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896.200 |
872.000 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
|
31.03.2008 |
31.03.2007 |
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Sales Turnover |
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3257.600 |
1121.900 |
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Other Income |
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59.700 |
33.100 |
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Total Income |
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3317.300 |
1155.000 |
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Profit/(Loss) Before Tax |
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142.200 |
46.000 |
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Provision for Taxation |
|
9.400 |
16.900 |
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Profit/(Loss) After Tax |
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132.800 |
29.100 |
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Expenditures : |
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Manufacturing Expenses |
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61.400 |
24.600 |
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Selling and Administration Expenses |
|
59.600 |
35.100 |
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Raw Material Consumed |
|
2741.800 |
883.100 |
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Excise Duty |
|
134.400 |
59.500 |
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Employee Cost |
|
90.200 |
45.800 |
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Increase/(Decrease) in Finished Goods |
|
(55.300) |
(5.400) |
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Interest and Financial Charges |
|
46.300 |
21.100 |
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Miscellaneous Expenses |
|
24.200 |
12.000 |
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Power & Fuel |
|
17.700 |
7.700 |
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Depreciation & Amortization |
|
54.800 |
25.500 |
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Total Expenditure |
|
3175.100 |
1109.000 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2008 |
|
Type |
1st
Quarter |
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Sales
Turnover |
827.100 |
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Other
Income |
8.100 |
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Total
Income |
835.200 |
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Total
Expenditure |
790.700 |
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Operating
Profit |
44.500 |
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Interest |
6.500 |
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Gross
Profit |
38.000 |
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Depreciation |
13.100 |
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Tax |
2.200 |
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Reported
PAT |
23.400 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
|
Debt-Equity Ratio |
1.27 |
1.66 |
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Long Term Debt-Equity Ratio |
0.00 |
0.00 |
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Current Ratio |
1.05 |
0.97 |
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TURNOVER
RATIOS |
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Fixed Assets |
8.03 |
4.76 |
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Inventory |
7.51 |
5.25 |
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Debtors |
6.46 |
3.5 |
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Interest Cover Ratio |
4.07 |
3.18 |
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Operating Profit Margin(%) |
7.47 |
8.25 |
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Profit Before Interest And Tax
Margin(%) |
5.79 |
5.98 |
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Cash Profit Margin(%) |
5.76 |
4.87 |
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Adjusted Net Profit Margin(%) |
4.08 |
2.59 |
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Return On Capital Employed(%) |
21.32 |
13.19 |
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Return On Net Worth(%) |
37.70 |
19.62 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
Subject was incorporated as a Public Limited Company on September,
27th, 2006 as Yelahanka Electronics Limited, and the name was changed to
Solectron EMS India Limited, with effect from November 21, 2006 and received
the Certificate of Commencement of Business in December 01, 2006. The company
got listed on 18th March 2008.
The Company is primarily involved in the manufacture of printed circuit board
assembly (PCBA) and repair business catering to the automobile, communications
and industrial electronics markets.
DE-MERGER
A Scheme of Arrangement for de-merger pursuant to Sections 391 to 394 of the
Companies Act, 1956 and Rules 67 to 87 of the Companies (Court) Rules 1959 and
other applicable provisions of Act and Rules was approved by the Honourable
High Court at Karnataka for the de -merger of the Electronics Manufacturing
Services business of Solectron Centum Electronics Limited into Solectron EMS
India Limited
The Honorable High Court of Karnataka had passed the order by approving the
demerger on 13th July 2007. The demerger takes effect from October 1, 2006
(being the Demerger appointed dated). The company shares were allotted on 18th
August 2007 Et the company got listed in Bombay stock Exchange (BSE) Et
National Stock Exchange(NSE) on 18th March 2008.
OPERATIONS
During the year company achieved a turnover of Rs 3123.30 Million during the
year 2007-08. The domestic sales is Rs 888.76 Million and the export sales is
Rs 2234.54 Million. The profit before tax is Rs.142.24 Million.
DIRECTORS
The Changes that had occurred in the composition of the
Board of Directors are given below:
The company was incorporated on 27th September 2006, as Yelahanka Electronics
Limited the promoter Directors were Mr. Desikan Srinivasan, Mr. Palisetty
Venkata Prasad and Mr. Srinath Dasari.
After name change to Solectron EMS India Limited new Directors Mr. Soundarajan
Subramaniam, Todd Duchene (20.07.2007) and Mr. Keki Elavia were inducted into
the board (03.07.2007).
After the approval of the de merger by the court on 13th
July 2008 Et the allotment of the shares on 18th August 2008 the promoter
directors Mr. Desikan Srinivasan (17.09.2007) Mr. Palisetty Venkata Prasad and
Mr. Srinath Dasari (07.09.2007) stepped down from the Board.
During the period Mr.Todd DuChene (wef20-07-2007), Mr.
Soundarajan Subramaniam (wef 20-07-2007), Mr. Keki Elavia (w.e.f. 03-07-2007),
Mr. Manoj Nagrath (wef 18-03-2008), Mr. Apparao Mallavarapu (wef 12-06-2008),
Mr. Rajiv Mody (wef 26-06-2008) were appointed as an Additional Directors of
the company.
During the period Mr. Desikan Srinivasan, Mr. Palisetty Venkata Prasad and Mr
Srinath Dasari, Mr. Todd Duchene (wef 28-11-2007), Mr. Keki Elavia (wef
23-01-2008), Mr. Soundarajan Subramaniam (wef 14-06-2008) have resigned from
the Board. The Board of Directors wish to place on record their appreciation of
the valuable services render ed by these directors during his tenure.
Mr. Manny Marimuthu was appointed as the Additional Director of the Company
with effect from 28-11-2007.
Mr. Manny Marimuthu Fellow Member of CIMA and is having experience around 15
years in the field of Finance and in the areas of audit Et reviews, corporate
finance, mergers Et acquisitions, financial restructuring. Presently he is
Senior Vice President of Finance for Flextronics Asia.
Mr. Manny Marimuthu is not holding any shares of the company.
Mr. Manoj Nagrath was appointed as an Additional Director with effect form
18-01-2008.
BUSINESS
As mentioned earlier, the EMS Business of Solectron Centum Electronics
Limited was transferred to the Company. Being a new entity, the operations were
completely transferred but the Company had to put in place the required
controls and systems afresh. The Company has been making efforts to get the
resources and the right skill sets to address the same. During this process,
there were a few deficiencies and delays. However, all of them have been
addressed and required solutions are put in place. Hence they do not expect
similar observations in the future.
COMPANY
BACKGROUND:
Subhect was incorporated as a public limited company on 27th
September 2006. The Company entered into a scheme of arrangement with Solectron
Centum Electronics Limited, for the demerger of the Electronics Manufacturing
Services business of Solectron Centum Electronics Limited into Solectron EMS
India Limited which was approved by the Honorable High Court of Karnataka on 13
July 2007.
The company got listed in Bombay Stock Exchange and National Stock Exchange on
18th March 2008
The Company is primarily involved in the manufacture of printed circuit board
assembly (PCBA), System Assembly and Repair and Return business catering to the
Automobile, Communications and Industrial electronics markets
The customers include world and Indian Leaders in Telecommunications,
Automotive and Industrial Electronics.
The strategy is based on intimate customer relationships with competent people,
state of the art technology and high quality products and services provided in
complex customer business models.
HUMAN
RESOURCES:
The company has some of the best talent in the country coming from various
domains of experience. Great emphasis is given in ensuring that the employees
have a rewarding experience working for the company. Special attention is given
for training and upgrading of peoples' skills, providing excellent working
conditions, benchmarking with other large companies while rewarding the
employees.
The Kaizen and Lean Six Sigma initiatives have been in place and have been
institutionalized with all the employees of the company taking active part in
the same. This has helped in improving the operational excellence continuously
and the company has seen the benefits of this in better customer
satisfaction.
RESULTS
OF OPERATIONS:
The business ooeration for 2007-08 resulted in the Company, achieving sales of
Rs.3183.03 million as against Rs.1095.41 milion for 2006-07.
The Profit before tax for the year 2007-08 is Rs.142.23 million as against
Rs.45.92 million for the year 2006-07.
MANAGEMENT'S
RESPONSIBILITY FOR FINANCIAL STATEMENTS
The accompanying financial statements of subject are the responsibility of
management and are approved by the Board of Directors of the company.
These financial statements have been prepared by management in conformity with
Indian generally accepted accounting principles and includes amounts that are
based on best estimates and judgments.
Management of the company in furtherance of the integrity and objectivity of
data in the financial statements has developed and maintains systems of
internal accounting controls. Management believes that the systems of internal
accounting controls provide reasonable assurance that financial records are
reliable and form a proper basis for the preparation of the financial
statements and that assets are properly accounted for and safeguarded.
The Board of Directors carries out its responsibility for the financial
statements principally through its Audit Committee. The Audit Committee reviews
the Company's annual financial statements and formulates the appropriate
recommendations to the Board of Directors. The Audit Committee has full access
to the auditors appointed by the shareholders, with or without the management
being present.
The auditors appointed by the shareholders, BSR and Company, Chartered
Accountants have examined these financial statements, and their report is
presented hereafter.
12.07.2008 Rajiv Bhandari Apparao MallavarapuBangalore Finance Manager
Director
WEB
DETAILS
Profile
Subject is the Indian company offering state
of art solutions for.
Electronic
Manufacturing Service (EMS)
They
believe in working partnerships with the customers, engineering ownership of
product development to deliver world-class solutions. Close co-operation with
the customer and suppliers has always provided a strong base for product
development. They consider the Quality Management System certifications
paramount to delivering superior customer value, with demonstration of the
commitment to being World-Class through effective utilization of the resources,
streamlined processes and the spirit of continual improvement. They also
support customers with RoHS compliant products.
Subject is an ELCINA- Special Certificate of
Merit Quality Award winner.
The Products and services cater to Indian
and international markets in
Electronic
Manufacturing Service (EMS)
Subject
is a Indo-US joint venture company and listed on Bangalore Stock Exchange and
National Stock Exchange. They are part of Solectron, a Electronics
Manufacturing service company, offering diverse EMS portfolio, which includes
Design, Development, Manufacturing and post manufacturing services.
PRODUCTS
AND SERVICES
Electronic
Manufacturing Services (EMS)
Solectron Centum provides total EMS solutions to the industry. As a part
of Solectron, the manufacturing facilities, testing methods, quality system and
work procedures are exactly the same as any other Solectron facility across the
globe. The strong program and account management teams work closely with the
customer to ensure total customer satisfaction. As a part of the Solectron
global supply chain management, they have got what it takes to create the most
efficient delivery systems to the customer. During design of the products they
key in mind the environmental aspects involved in the disposition of the
material. End of Life products should be disposed off responsibly. Organization
dealing with E-Waste shall be contacted for safe disposal.
Featuring
·
Concept to delivery of PCB Assembly and subsystems
·
New product introduction support
·
Dedicated materials and logistics support
·
Global supply chain management
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PCB assembly / advanced packaging
·
Surface mount / through hole / mixed technology Fine pitch capability
(Including BGA) Double side assembly
·
System level assembly including connectors.
·
High volume / low mix, low volume / high mix environment
Manufacturing
capabilities
·
Fully automated assembly line
·
Precision solder stencil printing and glue application
·
State of the art high-speed vision aligned pick and place machines.
·
Capability to place 0201 components to BGAs.
·
Solder re flow furnaces with precision temperature control
·
Multiple solder melting temperature for sequential Manufacturing.
·
Dual wave soldering machine for through hole and mixed technology
assemblies.
·
In circuit testing as well as functional testing.
·
Temperature and environmental testing.
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.46.43 |
|
UK Pound |
1 |
Rs.85.38 |
|
Euro |
1 |
Rs.67.95 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|