MIRA
INFORM REPORT
|
Report Date : |
12.12.2011 |
IDENTIFICATION DETAILS
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Name : |
H.M.T LIMITED |
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Registered
Office : |
HMT Bhavan 59, Bellary Road, Bangalore – 560032, Karnataka |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
07.02.1953 |
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Com. Reg. No.: |
000748 |
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Capital
Investment / Paid-up Capital : |
Rs.7603.501 Millions |
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CIN No.: [Company Identification
No.] |
L29230KA1953PLC000748 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
BLRH01948C/ BLRH02123C |
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PAN No.: [Permanent Account No.] |
AAACH7073D |
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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
: |
Manufacturing of Machine Tools such as Watched, Tractors, Die
Castings, CNC Systems etc. |
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No. of Employees
: |
Not Available |
RATING & COMMENTS
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MIRA’s Rating : |
B (31) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Maximum Credit Limit : |
USD 25000000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is an old and established company having satisfactory track. Profitability
of the company is under pressure. There appears huge accumulated losses
recorded by the company. However, trade relations are reported as fair.
Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some caution.
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NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
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Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
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Registered Office : |
HMT Bhavan 59, Bellary Road, Bangalore – 560032, Karnataka, India |
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Tel. No.: |
91-80-23330333 |
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Fax No.: |
91-80-23339111 |
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E-Mail : |
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Website : |
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Factory : |
Tractor Division, Pinjore, Dist. Panchkula – 134101, Haryana, India |
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Tel No.: |
91-1733-263825/ 29 |
DIRECTORS
(AS ON 31.03.2011)
|
Name : |
Mr. S. G. Sridhar |
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Designation : |
Director (Operations) Chairman and Managing Director I/C (w.e.f. 01.04.2011) |
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Name : |
Mr. A. V. Kamt |
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Designation : |
Chairman and Managing Director (up to March 31, 2011) |
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Name : |
Mr. Saurabh Chandra |
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Designation : |
Director |
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Name : |
Mr. Harbhajan Singh |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Prakash Sharan |
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Designation : |
Executive Directors, Tractors |
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Name : |
Mr. Mrs. M. Indu Madhavi |
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Designation : |
Chief Vigilance Officer |
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Name : |
Mr. U. Jagadish nayak |
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Designation : |
General Manager and Company Secretary/ Compliance Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.09.2011)
|
Category |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding
of Promoter and Promoter Group |
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700 |
- |
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751,853,040 |
98.88 |
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751,853,740 |
98.88 |
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Total
shareholding of Promoter and Promoter Group (A) |
751,853,740 |
98.88 |
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(B) Public
Shareholding |
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19,000 |
- |
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13,030 |
- |
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243,800 |
0.03 |
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1,641 |
- |
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277,471 |
0.04 |
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1,698,477 |
0.22 |
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5,641,160 |
0.74 |
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734,939 |
0.10 |
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144,353 |
0.02 |
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98,821 |
0.01 |
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45,522 |
0.01 |
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10 |
- |
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8,218,929 |
1.08 |
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Total Public
shareholding (B) |
8,496,400 |
1.12 |
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Total (A)+(B) |
760,350,140 |
100.00 |
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(C) Shares held by
Custodians and against which Depository Receipts have been issued |
- |
- |
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- |
- |
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- |
- |
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- |
- |
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Total
(A)+(B)+(C) |
760,350,140 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 Millions BUSINESS DETAILS
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Line of Business : |
Manufacturing of Machine Tools such as Watched, Tractors, Die
Castings, CNC Systems etc. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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Tractors |
Nos. |
25000 |
8500 |
4812 |
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Food Processing Machines |
Nos. |
650 |
2950 |
247 |
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GENERAL INFORMATION
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No. of Employees : |
Not Available |
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Bankers : |
· UCO Bank · Punjab National Bank · Andhra Bank |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Dagliya and Company Chartered Accountant |
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Address : |
Bangalore, Karnataka, India |
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Associates
Company : |
· SUDMO-HMT Process Engineers (India) Limited · Gujarat State Machine Tools Corporation Limited |
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Subsidiary
Companies : |
· HMT Machine Tools Limited · HMT Watched Limited · HMT Chinar Watched Limited · HMT (International) Limited · HMT Bearings Limited |
CAPITAL STRUCTURE
(AS ON 31.03.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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1000000000 |
Equity Share |
Rs.10/- each |
Rs.10000.000 Millions |
|
45000000 |
Equity Share |
Rs.100/- each |
Rs.4500.000 Millions |
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Total |
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Rs.14500.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
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|
760350140 |
Equity Share (Of the above 3,18,85,900 Shares
are allotted as fully paid up for consideration other than cash) |
Rs.10/- each |
Rs.7603.501
Millions |
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FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
7603.501 |
7603.501 |
7603.501 |
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2] Share Application Money |
4430.000 |
4430.000 |
4430.000 |
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3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
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4] (Accumulated Losses) |
(5853.458) |
(5061.085) |
(4532.032) |
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NETWORTH |
6180.043 |
6972.416 |
7501.469 |
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LOAN FUNDS |
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1] Secured Loans |
1437.173 |
2546.519 |
3417.037 |
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2] Unsecured Loans |
4549.915 |
3662.619 |
2314.173 |
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TOTAL BORROWING |
5987.088 |
6209.138 |
5731.210 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
12167.131 |
13181.554 |
13232.679 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
360.795 |
394.618 |
390.626 |
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Capital work-in-progress |
0.070 |
0.000 |
0.256 |
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Machinery and Equipments in transit and under inspection/ erection |
25.910 |
8.209 |
18.465 |
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INVESTMENT |
7655.587 |
7655.587 |
7657.086 |
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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 |
283.586
|
290.001 |
403.754 |
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Sundry Debtors |
724.874
|
686.420 |
744.406 |
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Cash & Bank Balances |
38.286
|
43.851 |
116.607 |
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Other Current Assets |
8.762
|
11.068 |
11.000 |
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Loans & Advances |
5500.190
|
6235.471 |
5832.063 |
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Total
Current Assets |
6555.698
|
7266.811 |
7107.830 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Sundry Creditor |
648.831
|
495.519 |
457.921 |
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Other Current Liabilities |
1026.681
|
930.094 |
784.633 |
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Provisions |
755.417
|
718.058 |
701.957 |
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Total
Current Liabilities |
2430.929
|
2143.671 |
1944.511 |
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Net Current Assets |
4124.769
|
5123.140 |
5163.319 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
2.927 |
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TOTAL |
12167.131 |
13181.554 |
13232.679 |
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PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
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SALES |
|
|
|
|
|
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Income |
1992.955 |
1901.979 |
1590.559 |
|
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Other Income |
150.683 |
107.802 |
142.474 |
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TOTAL (A) |
2143.638 |
2009.781 |
1733.033 |
|
|
|
|
|
|
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|
Less |
EXPENSES |
|
|
|
|
|
|
|
Accretion/ (Decretion) to Work-in-progress, finished Stock and scrap |
8.999 |
122.341 |
118.994 |
|
|
|
Materials |
1373.524 |
1208.255 |
1059.644 |
|
|
|
Personnel |
837.103 |
676.233 |
636.659 |
|
|
|
Other Expenses |
305.299 |
310.359 |
451.807 |
|
|
|
Prior Period Adjustment |
(0.030) |
0.478 |
(0.010) |
|
|
|
VRS Compensation Written off |
0.000 |
0.000 |
10.073 |
|
|
|
Less: Jobs done for internal use |
(14.697) |
(14.789) |
(11.662) |
|
|
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TOTAL (B) |
2510.198 |
2302.877 |
2265.505 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
(366.560) |
(293.096) |
(532.472) |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
387.123 |
196.770 |
123.359 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
(753.683) |
(489.866) |
(655.831) |
|
|
|
|
|
|
|
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|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
38.690 |
39.187 |
33.979 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
(792.373) |
(529.053) |
(689.810) |
|
|
|
|
|
|
|
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|
Less |
TAX (H) |
0.000 |
0.000 |
18.133 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
(792.373) |
(529.053) |
(707.943) |
|
|
|
|
|
|
|
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|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
(792.373) |
(529.053) |
(707.943) |
|
|
|
|
|
|
|
|
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|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
0.870 |
0.570 |
1.706 |
|
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TOTAL EARNINGS |
0.870 |
0.570 |
1.706 |
|
|
|
|
|
|
|
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|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
2.056 |
3.869 |
0.000 |
|
|
|
Components and Spares Parts |
0.000 |
0.000 |
2.566 |
|
|
|
Capital Goods |
0.000 |
0.000 |
1.500 |
|
|
TOTAL IMPORTS |
2.056 |
3.869 |
4.066 |
|
|
|
|
|
|
|
|
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|
Earnings Per
Share (Rs.) |
(1.04) |
(0.70) |
(0.93) |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2011 |
30.09.2011 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Net Sales |
|
423.500 |
378.100 |
|
Total Expenditure |
|
533.100 |
520.500 |
|
PBIDT (Excl OI) |
|
(109.600) |
(142.400) |
|
Other Income |
|
30.500 |
24.100 |
|
Operating Profit |
|
(79.100) |
(118.300) |
|
Interest |
|
135.500 |
128.400 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
PBDT |
|
(214.600) |
(246.700) |
|
Depreciation |
|
10.400 |
10.700 |
|
Profit Before Tax |
|
(225.000) |
(257.400) |
|
Tax |
|
0.000 |
0.000 |
|
Provisions and contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
(225.000) |
(257.400) |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
(225.000) |
(257.400) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
(36.96)
|
(26.32) |
(40.85) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
(39.76)
|
(27.82) |
(43.37) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(11.46)
|
(6.91) |
(9.20) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.13)
|
(0.08) |
(0.09) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.36
|
1.20 |
1.02 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.70
|
3.39 |
3.66 |
LOCAL AGENCY FURTHER INFORMATION
CORPORATE PERFORMANCE
The
Indian Economy recorded robust growth and steady fiscal consolidation in the year
2010-11. The growth rate of the Economy has been 8.6% in the financial year
2010-11 and is expected to be around 9% in the next fiscal i.e the current
year. The growth in the agriculture sector is expected to be around 5.4% while
growth in the manufacturing and services sectors has registered impressive
gains of 7% and 9.5% respectively.
Taking
cue from the strong growth indicators, the tractor industry also recorded an
impressive growth of 24% during the year. As a result, the Company also showed
a marginally better performance during the year, recording growth in terms of
both Production and Sales, over that of the previous year. During the year, the
Company achieved a Production level of Rs.1872.400 Millions (4812 Nos. of
Tractors) as against Rs. 1696.500
Millions (4652 Nos. of Tractors), recorded in the previous year, with a growth
of 10%.In terms of Sales also the Company registered a growth of 4% at Rs.2008.600
Millions (4920Nos. of Tractors) compared to Rs.1916.400 Millions (4901 Nos. of
Tractors) achieved in the previous year.
At
the consolidated level, the Company along with its Subsidiaries achieved an
aggregate Production of
Rs. 3865.900 Millions and Sales of Rs. 4490.300 Millions for the
year2010-11. On a comparative basis, the performance was marginally better than
that of the previous year.
OPERATING RESULTS
Despite
the marginal growth in Sales registered during the year, the Operations of the
Company resulted in a Net Loss of Rs.792.400 Millions during 2010-11, when compared with Rs. 529.100
Millions recorded in the previous Year, which was mainly due to the additional
provisions required to be made owing to the recent enhancement in the ceiling
amount of gratuity payable to retiring employees from Rs. 0.350 Million to Rs.1.000 Million
and the higher interest burdens on account of Loans availed from the Govt of
India under various heads.
FINANCIAL POSITION
Due
to liquidity constraints, the production volume of Tractors has reduced
resulting in a turnover of
Rs. 2000.600 Million during the year. Further, the high interest
on account of loan availed from Government of India to discharge liabilities,
affected the bottom line to a large extent.
FUTURE OUTLOOK
Indian
Tractor Industry's Annual growth rate is expected to be around 8-10%;
marginally higher than that of the historical average of 6-8%. The growth
drivers of Tractor Industry such as boost in rural economy, increased focus on
agriculture and rural development, credit availability, shorter replacement cycle,
several policy initiatives by the Government, etc., are aiding the growth
trends. Further, due to better irrigation facilities, farmers are resorting to
multiple cropping through farm mechanisation for achieving higher productivity
and output. All these factors are likely to contribute to appositive growth in
its performance in the current Financial Year 2011-12.
In
fact, the performance of the Company for the first quarter of the year has seen
a positive upturn with a 10% growth in production compared to the achievement
of the corresponding period of the previous year, with a similar growth of 2%
in Sales for the Quarter compared to the same period of the previous year. The
Tractor Business Group has already initiated a host of measures towards
performance improvement in right earnest, by appointment of new Distributors
and Dealers in potential areas/territories, up gradation of the tractors
engines for compliance to new emission norms for all models of tractors,
setting up of a new paint plant, entering into Mo Us with Banks/Financing
Agencies for priority loan sanction for the purchase of HMT Tractors, dynamic
business strategies, etc., which are expected to yield results in the current
financial year.
The
future plans of the Company envisages investment in plant modernization and
technology up gradation which will contribute to better productivity and give a
thrust to the growth trends in the coming years. The Company has engaged the
services of a consultancy firm to prepare a Business Plans comprising various
strategic initiatives to sustain the operations and achieve growth.
SUBSIDIARY COMPANIES
• HMT Machine Tools Limited
This
Subsidiary achieved Sales of Rs.2090.200 Millions and Production of Rs.1774.300
Millions with a Net loss of
Rs. 930.600 Millions during the year 2010-11. The performance of
this Subsidiary was affected mainly due to working capital constraints. The
Subsidiary has seta Sales target of Rs. 372.96 Cr. for the current financial
year 2011 -12. The Subsidiary has implemented the revival plan proposals and
plant up gradation with substantial part of the investments as Capital
Expenditure. The Subsidiary is also pursuing with various agencies for
extending the reliefs and concessions sanctioned by the BIFR under the
Rehabilitation Scheme. Some of these Parties including the Consortium of Banks
have preferred appeals against the reliefs and concessions sanctioned by the
BIFR, which is being contested by the Subsidiary. The Merger of Praga Tools
Limited, Hyderabad, with the Subsidiary, which was part of the sanctioned
Scheme of BIFR has since been completed.
• HMT Watches Limited
This
Subsidiary could not show significant improvement in performance. Major factor
affecting the performance of this Subsidiary was lack of working capital,
absence of a robust trade channel and higher interest burden, with depletion in
skilled manpower. Despite these constraints, this Subsidiary could achieve a
Sales Rs. 88.200
Millions and Production of
Rs. 106.200 Millions during the year. The Net Loss for the year
stood at Rs. 2537.400
Millions as compared to
Rs. 1683.500 Millions incurred during the previous year. The
Revival plans in respect of this Subsidiary is under submission to the
Government based on the business plans being prepared by the Consultants
appointed by the Company. The Subsidiary was able to reduce its manpower by
introduction of VRS, funded by Government of India Loan. A total of 462
employees have been retired by the Subsidiary during the year 2010-11 involving
an outgo of Rs. 639.800
Millions, reducing its manpower strength to 1417 as on 31.3.2011.
• HMT Chinar Watches Limited
The
performance of this Subsidiary could not be sustained at optimum levels due to
the ongoing troubled situation in the J&K Valley apart from shortage of
working capital to enhance production levels. Majority of the employees have
been separated on VRS leaving about 114 employees at Srinagar and Jammu Units
of the Subsidiary. Under these circumstances, the Subsidiary could achieve only
a meager Sales of Rs. 1.000
Millions during the year compared to Rs. 7.300 Millions achieved during the
previous year, while in terms of Production, it was at the level of only Rs. 1.200
Millions for the year. As a result of the lower levels of operations, the
Subsidiary incurred a Net loss of Rs. 454.000 Millions during the year. The Subsidiary was
able to reduce its manpower by introduction of VRS, funded by Government of
India.
• HMT (International) Limited
This
Subsidiary exported goods and technical services valued at Rs. 278.900
Millions during the year under review as compared to Rs. 308.000 Millions achieved in the
previous year, and pre-tax Profit of Rs. 3.100 Millions for the year. The
performance of this Subsidiary in terms of orders, sales and profits during the
year was marginally less amidst global financial crisis affecting
delay/shelving of procurement plans by major customers. The Subsidiary has
maintained its consistent dividend payment record and has declared a dividend
of 20% on the Paid up equity Share Capital, for the year 2010-11. During the
year, this Subsidiary was able to successfully obtain the re-certification of
ISO9001-2008from the certifying agencies.
• HMT Bearings Limited
This
Subsidiary achieved a higher Sales turnover of Rs. 114.400 Millions during the year
as compared to Rs. 68.400
Millions achieved during the previous year. The achievement in terms of
Production during the year was also higher at Rs. 111.800 Millions as compared to Rs. 56.200
Millions recorded in the previous year. The Subsidiary incurred a Net Loss of Rs. 213.200
Millions during the year compared to Rs. 153.100 Millions recorded in the
previous year, which was mainly due to higher incidence of VRS ex gratia. The
Subsidiary was able to reduce its manpower by introduction of VRS, funded by
Government of India Loan. A total of 103 employees have been retired by the
Subsidiary during the year 2010-11involving an outgo of Rs. 106.700 Millions, reducing its
manpower strength to 89 as on31.3.2011.
The
Subsidiary has been referred to the BIFR under the Sick Industrial Companies
(Special Provisions) Act, 1985 as amended and a Rehabilitation Scheme prepared
by the Operating Agency viz., Canara Bank is under consideration of the BIFR
including the proposal for inducting a strategic partner by divesting the
equity.
JOINT VENTURE COMPANY
• SUDMO-HMT Process Engineers (India) Limited
There
were no business operations by this Joint Venture Company during the year. For
the financial year 2010-11, this Company showed a Net Profit after tax of
Rs.0.068 Million on account of the interest income of Rs. 0.283 Million, out of the fixed
deposits kept with the Banks.
• Gujarat State Machine Tools Corporation Limited
This
Company which was ordered to be wound up by BIFR, had discontinued its
operations since long and is now a defunct Company. It is therefore considered
prudent to divest from this JV Company jointly with the JV Partner.
MANAGEMENT DISCUSSION AND ANALYSIS
A. INDUSTRY STRUCTURE AND DEVELOPMENT
GENERAL ECONOMIC ENVIRONMENT:
Global
economy is in recovery path. Growth in both, advanced economies and
emerging/developing economies outpaced initial expectations. This raises hopes
for sustained, though moderately paced global recovery during the FY 2011-12.
With
the improved domestic macroeconomic scenario, the Indian economy is reported to
have grown at an estimated 8.6% in the previous year. GDP growth during 2010-11
reversed the negative trend, aided by a rebound in agricultural growth owing to
the overall good monsoon reported during the year. The index of industrial
production (IIP), which grew by10.7 per cent during the first half of last
year, moderated subsequently, bringing down the overall growth for 2010-11 to
about 7.8 per cent. The non-agricultural growth, however, was slightly below
par. Particularly significant was the slowdown in capital goods production and
investment spending due to the inflationary trends reported in the second half
of the previous year.
The
services sector, backed by the IT revolution, remained the biggest contributor
to the national GDP, with a contribution of 58.4%. The industrial sector
contributed 24.1%while the agricultural sector contributed 17.5% to the GDP.
GROWTH OUTLOOK
It
is also crucial to understand that India is driven primarily by domestic
(consumer) consumption. This stands in marked contrast to Japan, the Asian
Tigers and now China, all of whom have followed the export-oriented model. With
the massive growth of the Indian middle class, India may become Asia's first
major 'buy' economy.
Indian
Economic Growth in 2011-12 is expected to stay close to the trend. Downside
risks to growth and upside risks to inflation have increased Growth risks on
account of the climbing up of the oil prices to uneasy levels and some
moderation in investment. GDP growth for 2011-12, is expected to be around 8
per cent as per current trends and projections.
The
growth momentum is likely to sustain close to trend in the current FY 2011 -12
as well, aided by predicted normal monsoon, demand conditions and positive lead
indicators for services. Risks to growth, however, arise from input cost
pressures due to the rising inflation and fuel prices.
INDUSTRY STRUCTURE AND DEVELOPMENTS AND TRACTOR INDUSTRY IN INDIA
Tractor
industry (Inland) registered a growth of 24 % during 2010-11 over the year
2009-10. The market leader viz Mahindra and Mahindra (M&M) maintained their
market leadership with 39.62% market share followed by TAFE (21%) and Escorts
(12.13%). The growth trend was observed due to better economic condition and
agricultural growth in India. Infrastructure projects have boosted the sale of
higher HP Tractors. The top three companies are enjoying approx. 72.6 % market
share of entire Tractor industry, with the result, the survival of the smaller
players is continuously threatened. HMT's market share in this was a marginal
0.90% of the total Industry off take.
A
comparative study of the segment-wise growth of the Tractor Industry over the
previous year is given below.
• Below 20 HP tractors which has 1.03% share of
total market grew by 25.4 %
• 20 HP to 30 HP tractors which has 12.36% share of
total market showed negative growth of 2.27%
• 31 HP to 40 HP tractors which has 36.78% share of
total market grew by 4.36%
• 41 HP to 50 HP tractors which has 30.51% share of
total market grew by29.09%
• Above 51 HP tractors which has 19.31% share of
total market grew by 34.58% which is highest growth segment
The
Tractor Industry is expected to continue its growth story during 2011-12 as
well, due to better economic conditions and thrust of govt, on Agriculture.
Tractor sales are expected to witness a growth of about 10% -15% during 2011
-12. On the other hand, the demand for I.P. Engines will also show an upward
trend due to shortage of power and the need for more installation of cellular
communication Towers across the Country.
OUTLOOK:
The
Tractor Industry will continue to grow in the current Fiscal 2011 -12 due to
better economic conditions and thrust of govt, on Agriculture. As a result the
Tractor sales are expected to witness growth of 10% -15% during the year.
Demand for I.P. Engines is also expected to go up due to shortage of power and
installation of cellular towers.
FINANCIAL PERFORMANCE
The
performance of the Company during the year 2010-11 showed a positive growth
compared to that of the previous year. The turnover for the year stood at Rs. 2008.600
Millions as compared to
Rs. 1916.400 Millions of the previous year thereby registering a
growth of 4%.During the year, the Company incurred a loss of Rs.792.400
Millions as against a Net Loss of Rs. 529.100 Millions incurred during the previous year.
The
total borrowing position of the Company as on 31.3.2011 stood at Rs. 5987.100
Millions which include
Rs. 3503.900 Millions of Government of India Loans and Rs. 1003.000
Millions Interest due thereon.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The
Company has in place adequate systems of Internal Control commensurate with its
size and nature of its operations. The salient features of internal control
systems are:
•
Clear delegation of power with authority limits for incurring capital and
revenue expenditure.
•
Well laid down corporate policies for accounting, reporting and Corporate
Governance.
•
Safeguarding assets against unauthorized use or losses or disposition, and
ensuring that the transactions are authorized, recorded and reported correctly.
•
Process for formulating and reviewing annual and long-term business plans have
been laid down.
•
Detailed Annual budget giving further break up of monthly targets under various
heads.
•
Continuous review of the performance by the Core Committee with, reference to
the budgets on an ongoing basis.
•
Compliance with laws and regulations.
The
Internal Audit Department of the Company along with external firms appointed
for carrying out internal audits of Units/Divisions reviews, evaluates and
appraises the various systems, procedures/policies laid down by the Company and
suggests meaningful and useful improvements.
Internal
Audit Department coordinates with the Units/ Divisions of the Company for ensuring
coverage of all areas of operations in order to bring a transparency in the
whole spectrum of the Company.
The
Company has an Audit Committee, details of which have been provided with
Corporate Governance Report. The Audit Committee reviews the Audit Report
submitted by the Internal Auditors. Suggestions for improvement are considered
and the Audit Committee follows up on the implementation of corrective actions.
The
Committee also meets the Company's Statutory Auditors to ascertain, inter-alia,
their views on the adequacy of internal control system in the Company and keeps
the Board of Directors informed of its major observations from time to time.
Only one meeting was held on May 4, 2010.
The company is contingently liable
for:
|
Particulars |
31.03.2011 |
31.03.2010 |
|
|
(Rs. In Millions) |
|
|
|
|
|
|
Claims
against the company not acknowledged and debts |
|
|
|
Tax
related claims pending in appeal |
|
|
|
-
Excise Duty |
0.248 |
0.248 |
|
-
Sales Tax |
27.187 |
27.187 |
|
|
|
|
|
Employees
related claims relating to lockouts, Back Wages incentive and annual bonus
etc. pending adjudication, to the extent ascertainable. |
2.623 |
5.536 |
|
|
|
|
|
Others
Various
cases relating to defective product, accident causing injuries to third
parties, claims relating to supply of materials etc. |
51.483 |
42.277 |
|
|
|
|
|
Guarantee/
Counter Guarantees issued |
196.646 |
187.038 |
|
|
|
|
|
Additional
Bonus if any, for the year 1985-86 |
0.220 |
0.250 |
|
|
|
|
|
Non
receipts of related forms against levy of concessional sales tax |
78.941 |
65.566 |
|
|
|
|
FIXED ASSETS:
· Land and Land Development
· Land – Leasehold
· Building
· Plant and Machinery
· Furniture, Fittings and Office Appliances
· Transport Vehicles
WEBSITE DETAILS:
PROFILE:
Incorporated in 1953 by the Government of India as a Machine Tool manufacturing company.
Over the years diversified into Watches, Tractors, Printing Machinery, Metal Forming Presses, Die Casting and Plastic Processing Machinery, CNC Systems and Bearings.
Successful technology absorption in all product groups through collaborations with world renowned manufacturers and further strengthened by continuous in house R and D.
Today, HMT comprises five subsidiaries under the ambit of a Holding Company, which also manages the Tractors Business directly.
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.51.77 |
|
|
1 |
Rs.81.32 |
|
Euro |
1 |
Rs.69.42 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
2 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
31 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.