MIRA
INFORM REPORT
|
Report Date : |
12.01.2011 |
IDENTIFICATION DETAILS
|
Name : |
MRF LIMITED |
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Registered
Office : |
New No. 114, (Old
no. 124) |
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Country : |
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Financials (as
on) : |
30.09.2009 |
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Date of
Incorporation : |
05.11.1960 |
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Com. Reg. No.: |
18-4306 |
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CIN No.: [Company
Identification No.] |
L25111TN1960PLC004306 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHEM07088E /
CHEM06754G / CHEM04457F |
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PAN No.: [Permanent
Account No.] |
AAACM4154G |
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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 tyres in almost all
segments. |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa (73) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit
Limit : |
USD 54000000 |
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|
Status : |
Excellent |
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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. Financial position of the company appears
to be good. Fundamentals of the company are strong and healthy. Payments are
reported to be regular and as per commitments. The company can
be considered for normal business dealings at usual trade terms and
conditions. |
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 – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered
Office : |
New No. 114, (Old
no. 124) |
|
Tel. No.: |
91-44-28292777 |
|
Fax No.: |
91-44-28295087/
28294089 28291844/ 0562 |
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E-Mail : |
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Website : |
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Overseas Office : |
·
Tel. 9714-2239657 / 603 Fax. 9714-2239660 E-mail. mrfdubai@emirates.net.ae Contact Person - Biju Abraham Thomas,
General E-Mail : mrfdubai@emirates.net.ae ·
1764,
Tel. 91-001-330-9291594 Res. 91-001-330-9283096 Fax. 91-001-330-9290306 E-mail. jkillian@neo.rr.com ·
Located
at Tel. 305-392-5069 (O) Fax : 305-513-4493 E-Mail: mrd@bellsouth.net ·
#
69/K, E-mail : mrfdhaka@bangla.net ·
213,
Nguyen Van Troi, Ward 11, Disrtrict – Phu Nhuan HCMC, Tel.: 00848-8459837 Fax: 00848-8478434 E-Mail: mrfvietnam@hcm.vnn.vn
·
Located
at Tel : 07-55307765 Fax : 07-55307765 E-Mail: kencon@bigpond.com.au |
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|
Factory 1: |
P.B. No. 2, Sadasivapet, Medak District, |
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Tel. No.: |
91-8455-2526.01 to 252609 (9 Lines) 91-8455- 252630 (Purchase) |
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Fax No.: |
91-8455-252614 |
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Factory 2: |
Tiruvottiyur, Chennai, |
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Factory 3: |
Vadavathoor, |
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Factory 4: |
Usgao, Ponda, |
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Factory 5: |
Icchiputhur, Arakonam, |
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Factory 6: |
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Factory 7: |
Sipcot Industrial
Complex, Gummidipoondi, |
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Branch Office
: |
C – 79, Ground
Floor, Okhla Industrial Area, Phase – I, E-mail : mrfpaint.del@gnmds.global.ems.vsnl.net.in No. 2, Ground
Floor, Plot No. 374, Build Arch Terrace, Sitla Devi Temple Road, Mahim, India
Tel. No.
91-22-24463565 E-mail : mrfpaint.bby@gnbom.globalnet.ems.vsnl.net.in E-mail : mrfpaint.mds@gnmds.globalnet.ems.vsnl.net.in No. 2, New Tel. No. :
91-33-24589830 |
DIRECTORS
AS ON 30.09.2009
|
Name : |
Mr. K. M. Mammen |
|
Designation : |
Chairman and Managing Director |
|
Qualification
: |
B. A. |
|
Date of
Joining : |
01.06.1985 |
|
Previous
Employment : |
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|
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|
Name : |
Mr. Arun Mammen |
|
Designation : |
Managing Director |
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Name : |
Mr. K. M. Philip |
|
Designation : |
Whole-time Director |
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Qualification
: |
B.A. |
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Date of
Joining : |
05.11.1960 |
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|
|
|
Name : |
Dr. K. C. Mammen |
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Designation : |
Director |
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|
Name : |
Mr. K. D. Parakh |
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Designation : |
Director |
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Name : |
Mr. Ashok Jacob |
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Designation : |
Director |
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Name : |
Mr. S. Nandagopal |
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Designation : |
Director |
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Name : |
Mr. V. Sridhar |
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Designation : |
Director |
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Name : |
Mr. Vijay R.
Kirloskar |
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Designation : |
Director |
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Name : |
Mr. N. Kumar |
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Designation : |
Director |
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Name : |
Mr. Ranjit I.
Jesudasen |
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Designation : |
Director |
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|
Name : |
Mr. Sanjay Sharad Vaidya |
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Designation : |
Director |
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|
Name : |
Mr. Salim Joseph Thomas |
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Designation : |
Additional Director |
KEY EXECUTIVES
|
Name : |
Mr. D. M. Choksi |
|
Designation : |
Company Secretary |
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|
|
|
Name : |
Mr. Ravi Mannath |
|
Designation : |
Additional Company Secretary |
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|
|
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Name : |
Mr. Kurian and
Kurian |
|
Designation : |
Legal Advisors |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.09.2010)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
586,820 |
13.84 |
|
|
523,587 |
12.35 |
|
|
1,110,407 |
26.18 |
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|
|
|
|
|
21,666 |
0.51 |
|
|
21,666 |
0.51 |
|
Total shareholding of Promoter and Promoter Group (A) |
1,132,073 |
26.69 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
237,120 |
5.59 |
|
|
3,214 |
0.08 |
|
|
246,099 |
5.80 |
|
|
103,687 |
2.44 |
|
|
590,120 |
13.91 |
|
|
|
|
|
|
1,058,758 |
24.96 |
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|
|
|
|
|
1,021,082 |
24.08 |
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|
439,110 |
10.35 |
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|
2,518,950 |
59.39 |
|
Total Public shareholding (B) |
3,109,070 |
73.31 |
|
Total (A)+(B) |
4,241,143 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
|
Total (A)+(B)+(C) |
4,241,143 |
100.00 |
(1)
Indian
Individuals
/ Hindu Undivided Family
Individual
shareholders holding nominal share capital up to Rs. 0.100 MillionBUSINESS DETAILS
|
Line of
Business : |
Manufacturer of tyres in almost all
segments. |
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Products : |
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Imports : |
·
·
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Terms : |
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Purchasing : |
L/C and Credit
terms |
PRODUCTION STATUS (As on 30.09.2007) :-
|
PARTICULARS |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
|
|
|
|
|
|
Automobile Tyres |
Nos. |
@ |
24850000 |
22713766 |
|
Automobile Tubes |
Nos. |
@ |
26000000 |
23385121 |
|
Tread Rubber |
MT |
7946 |
8943 |
1327 |
|
Pre-cured Treads |
MT |
@ |
24000 |
6607 |
|
Bicycle Tyres |
Nos. |
2000000 |
2000000 |
Nil |
|
Bicycle Tubes |
Nos. |
2000000 |
2000000 |
Nil |
|
Rubberised Tank
Tyres & Boggie Wheels |
Nos. |
15000 |
15000 |
Nil |
|
Conveyor Belting |
MT |
@ |
3000 |
3223 |
|
Specialty Surface
Coatings |
KL |
@ |
2000 |
2191 |
GENERAL INFORMATION
|
No. of
Employees : |
12406 |
|
|
|
|
|
|
Bankers : |
·
State
Bank of ·
National
Bank of Abu –Dhabi – ·
Standard
Chartered Bank – ·
Bank
for Foreign Trade of ·
Syndicate
Bank |
|
|
|
|
|
|
Banking Relations : |
Satisfactory |
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|
|
|
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Auditors : |
·
Sastri
and Shah Chartered Accountants Chennai, ·
M. M.
Nissim and Company Chartered Accountants Mumbai, |
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|
|
|
|
|
Associates : |
·
Tiruvottiyur,
Chennai, ·
Vadavathoor,
·
Usgao,
Ponda, ·
Icchiputhur,
Arakonam, ·
Sadasivapet,
Medak, ·
·
Sipcot
Industrial Complex, Gummidipoondi, |
|
|
|
|
|
|
Subsidiaries: |
·
Funskool
( ·
MRF
Corporation Limited ·
MRF International
Limited ·
MRF
Lanka Private Limited |
|
|
|
|
|
|
Membership : |
·
Confederation
of Indian Industry |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
9000000 |
Equity Shares |
Rs.10/- each |
Rs.90.000 millions |
|
100000 |
Taxable Redeemable Cumulative Preference
Shares |
Rs.100/- each |
Rs.10.000 millions |
|
|
Total |
|
Rs.100.000 millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
4241214 |
Equity Shares |
Rs.10/- each |
Rs.42.412 millions |
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
4241143 |
Equity Shares |
Rs.10/- each |
Rs.42.411 millions |
|
|
1) 554461 Equity shares allotted
as fully paid up pursuant to a
contract without payments being received in cash |
|
|
|
|
2) 1781118 Equity Shares allotted as fully
paid up by way of bonus Shares by Capitalisation of Reserves. |
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
30.09.2009 |
30.09.2008 |
30.09.2007 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
42.400 |
42.400 |
42.400 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
13571.800 |
11165.500 |
9819.100 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
13614.200 |
11207.900 |
9861.500 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
1378.900 |
5773.500 |
3339.200 |
|
|
2] Unsecured Loans |
5341.400 |
6721.300 |
5011.400 |
|
|
TOTAL BORROWING |
6720.300 |
12494.800 |
8350.600 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
20334.500 |
23702.700 |
18212.100 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
9335.600 |
8665.500 |
6567.500 |
|
|
Capital work-in-progress |
2862.400 |
4436.800 |
2430.300 |
|
|
|
|
|
|
|
|
INVESTMENT |
1485.700 |
685.600 |
720.200 |
|
|
DEFERREX TAX ASSETS |
123.500 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
6504.700
|
9842.800
|
6933.400
|
|
|
Sundry Debtors |
5800.300
|
6100.500
|
5519.200
|
|
|
Cash & Bank Balances |
598.900
|
1023.500
|
731.700
|
|
|
Other Current Assets |
0.000
|
0.000
|
0.000
|
|
|
Loans & Advances |
3932.400
|
3070.300
|
2445.000
|
|
Total
Current Assets |
16836.300 |
20037.100
|
15629.300
|
|
|
Less : CURRENT LIABILITIES
& PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
5871.700
|
7526.100
|
5021.600
|
|
|
Provisions |
4437.300
|
2596.200
|
2113.600
|
|
Total
Current Liabilities |
10309.000 |
10122.300
|
7135.200
|
|
|
Net Current Assets |
6527.300 |
9914.800
|
8494.100
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
20334.500 |
23702.700 |
18212.100 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
30.09.2009 |
30.09.2008 |
30.09.2007 |
|
|
Sales Turnover |
56574.500 |
57155.200 |
50367.500 |
|
|
Other Income |
344.000 |
408.300 |
293.900 |
|
|
Total Income |
56918.500 |
57563.500 |
50661.400 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
3984.800 |
2113.900 |
2609.600 |
|
|
Provision for Taxation |
1454.500 |
694.200 |
891.800 |
|
|
Profit/(Loss) After Tax |
2530.300 |
1419.700 |
1717.800 |
|
|
|
|
|
|
|
|
Export Value |
5009.900 |
NA |
4934.100 |
|
|
|
|
|
|
|
|
Import Value |
NA |
NA |
8737.300 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
2190.000 |
2009.000 |
1384.300 |
|
|
Administrative Expenses |
4383.400 |
3739.200 |
3605.500 |
|
|
Raw Material |
34891.500 |
35474.900 |
30483.000 |
|
|
Excise Duty |
0.000 |
6708.200 |
6439.800 |
|
|
Miscellaneous Expenses |
183.500 |
401.900 |
326.400 |
|
|
Employee Cost |
3105.100 |
2702.200 |
2353.300 |
|
|
Interest |
689.200 |
662.500 |
492.400 |
|
|
Power & Fuel |
2855.400 |
2948.800 |
2205.100 |
|
|
Increase/(Decrease) in Finished Goods |
2142.400 |
(892.300) |
(772.100) |
|
|
Depreciation & Amortization |
2493.200 |
1695.200 |
1534.100 |
|
Total
Expenditure |
52933.700 |
55449.600 |
48051.800 |
|
|
|
|
|
|
|
|
Earnings Per Share (Rs.) |
592.52 |
334.83 |
NA |
|
QUARTERLY RESULTS
|
PARTICULARS |
31.12.2009 |
31.03.2010 |
30.06.2010 |
30.09.2010 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
4th
Quarter |
|
Net Sales |
16563.000 |
17737.100 |
19254.000 |
21083.300 |
|
Total Expenditure |
14074.000 |
15643.900 |
17616.400 |
19027.500 |
|
PBIDT (Excl OI) |
2489.000 |
2093.200 |
1637.600 |
2055.800 |
|
Other Income |
60.400 |
36.600 |
109.300 |
103.200 |
|
Operating Profit |
2549.400 |
2129.800 |
1746.900 |
2159.000 |
|
Interest |
117.200 |
150.700 |
197.100 |
166.000 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
2432.200 |
1979.100 |
1549.800 |
1993.000 |
|
Depreciation |
637.800 |
553.300 |
674.600 |
741.800 |
|
Profit Before Tax |
1794.400 |
1425.800 |
875.200 |
1251.200 |
|
Tax |
600.300 |
467.600 |
259.300 |
479.600 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
1194.100 |
958.200 |
615.900 |
771.600 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
1194.100 |
958.200 |
615.900 |
771.600 |
KEY RATIOS
|
PARTICULARS |
|
30.09.2009 |
30.09.2008 |
30.09.2007 |
|
PAT / Total Income |
(%) |
4.45 |
2.47
|
3.39 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
7.04 |
3.70
|
5.18 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
1.25 |
7.36
|
11.76 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.29 |
0.19
|
0.26 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.25 |
2.02
|
1.57 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.63 |
1.98
|
2.19 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY:
Subject is a well known
After the huge success in the tread rubber industry in the year 1961,
Subject entered into the manufacture of tyres, by establishing technical
collaboration with the Mansfield Tire and Rubber Company of,
The Company made the collaborations in the year 1989 with Hasbro International
USA, the world's largest toy maker, and thereby launched Funskool
In May 2008, Subject signed the memorandum of understanding (MoU) with
government of Tamilnadu for the new MRF plant to be located at Perambulur,
Trichy and also for expansion of its existing plants in Tamilnadu. Subject
plans to foray into the aviation tyre space with the unveiling of Aero Muscle,
a product born out of in-house research and perfected over the last three
years.
FINANCIAL RESULTS
The Company sustained its leadership position in the
tyre industry with its
sales registering a growth of 7% over the
previous year, despite extremely difficult market scenario and the production
loss caused due to labour problem.
During this period, the
prices of key
raw materials, especially that
of natural rubber and petroleum derivatives carne
down. This development coupled with better operating
efficiencies and overall cost
reduction undertaken by the Company contributed to improved
results during the year.
Two interim dividends of Rs.3 each per share (30% each) for
the year ended 30th September, 2009 were declared by the Board of Directors
on 27-07-2009 and on 27-10-2009.
The Board of Directors is now pleased to
recommend a final dividend
of Rs.19 per share (190%) on the paid-up
equity share capital of the
Company, for consideration and approval of the
shareholders at the Annual General Meeting. With this, the total
dividend for the entire year works out to Rs.25 per share (250%). The total
amount of dividends aggregates to Rs.106.000 Millions.
The Directors recommend
that after making provision for
taxation and proposed dividend,
the amount of Rs.2406.300 Millions be transferred to General Reserve. With this, the Company's
reserves and surplus stand at Rs.13571.800
Millions.
EXPORTS
During
the year, taking
forward the initiatives
of 2007-08 in the
identified focus markets,
the Company concentrated
on efforts in strengthening end customer contact and creating preference
for MRF brand. Impetus was given on segmentation of truck and light truck
markets and providing product
marketing support to the distributors in each segment to create product differentiation and
preference among customers.
The first half of the year was very challenging in terms of
generally low activity and slump in demand on account of global
recession. The second half definitely showed
quick recovery and the
situation returned to normalcy by the fourth quarter.
During the year, the Company however managed to maintain its
market share and volumes dose to 2007-08
levels. Export turnover was Rs.5005.600 Millions for the year
ended 30th September, 2009 as against Rs.4972.200 Millions for
the previous year.
PROSPECTS FOR THE CURRENT YEAR
With multinationals looking to
The Company also expects
the government to
increase expenditure in infrastructure and other sectors in the
coming years. Government spending, coupled with the lowering of interest rates
should hopefully give effect to a push in demand.
Wide fluctuations in the prices of natural rubber,
petroleum derivatives and other duties
can be anticipated in the coming years. The
Company is geared to
handle the situation by concentrating
on improving operating efficiencies and implementing all round cost reduction
measures to ensure that the cost push
does not impact their profitability.
SUBSIDIARIES
The Ministry of Corporate Affairs, Government of India,
vide its
letter No.47/682/2009-CL-III
dated 14-10-2009, in exercise of
its powers under Section
212(8) of the Companies Act,
1956, granted an exemption to the
Company from the provisions of Section
212(1) of the Companies Act, 1956,
with regard to attaching the balance
sheet, profit and loss account etc, of
the subsidiaries for
the year ended 30th September,
2009, since the Consolidated financial statement presented by the Company
includes the financial information
of the subsidiaries. In view of this, the annual reports of the
subsidiary Companies have not been annexed.
The annual accounts
of the subsidiary Companies along with the
report of the directors
and auditors thereon and all related
detailed information will be made available to shareholders of the
Company on request and will also be kept
open for inspection at the registered office of the Company.
FUTURE PLAN OF ACTION
R and D work is carried out to develop high
performance bias truck tyre which can
offer higher mileage, lower heat build up and lower rolling resistance.
Efforts are on to develop and perfect radial tyres to
meet the
increased radialisation in segments such as truck, motor cycle and farm.
To meet the increased demand for off the road tyres,
development of new sizes with high performance compounds are given priority.
In order to meet the requirement of new automobile
manufacturers, new products which can offer specific property
requirements, such as improved traction,
lower rolling resistance and higher speed, are being developed.
Efforts are also on to develop aircraft tyres to meet
defence requirement. In order to meet the increased export market requirement,
products are being developed for specialized application such as
race and rallies and PCTR with new designs.
R&D work is also directed towards developing alternate
raw materials to meet
certain stringent environmental requirements as demanded by new
car Companies.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT
(Within the limits set by the Company's competitive
position)
The core business of subject is manufacturing, distribution
and sale of tyres for various kinds of
vehicles. The management discussion and analysis given below discusses the key
issues for various sectors of the business.
INDUSTRY
STRUCTURE AND DEVELOPMENT:
The Indian tyre
Industry consists of 36 tyre Companies;
10 major tyre Companies accounting
for 95% of the tyre
business. The tyre
Companies produce mainly truck
tyres and a range of
non-truck tyres. Most tyre Companies produce bias belted
tyres. However, this scenario is changing
in favour of radial
tyres. The market for tyres is
primarily driven by original equipment manufacturers.
In the heavy commercial vehicle segment, Tata Motors and
Ashok Leyland lead with Volvo, Eicher Motors, Force Motors etc, entering the
market in recent times. This segment is undergoing a change since
multi-axle vehicles are more
in demand and
manufacturers are changing
their product mix accordingly. Due to the recession, the period October
2008-September 2009 witnessed a substant a! drop in production in this segment
by around 45% - in the previous year
this segment experienced a growth rate of around 0.5%. The impact of recession is also noticed in the
negative growth of 16% in the
light commercial vehicle segment - the segment enjoyed
a positive growth of
14% last year. The passenger car,
scooter and three wheeler segments witnessed a growth of 8%,
14% and 2% respectively.
Radial tyres have
shown significant increase in its usage every
year. In
OPPORTUNITIES
AND THREATS:
The tyre industry
is dependent on the performance
of automobile and infrastructure sectors.
The year gone by was a period when the domestic market was impacted
significantly and market sentiment was low. The
acute slump in the commercial, heavy vehicle segment, which constitutes
the bulk of the
tyre market, was an indicator to
what the tyre industry was to
anticipate in the medium term. In the
first three months of the year, the
commercial vehicle manufacturers
were compelled to resort to
layoffs, production cuts and
closures of some factories. These manufacturers were bailed out mainly by the
Government's stimulus packages. Despite
the recovery, the manufacturers had still not reached the level of production
achieved in the previous year.
Fortunately, the demand slump bottomed out by March 2009 and
Around 90% of the tyres imported are Chinese tyres. The
Silver lining was the restriction
imposed on the
import of Chinese
truck tyres. The Government mandated that an importer
required to have a license to import
Chinese tyres unlike in the past when imports were not controlled.
This move, to some extent,
curtailed the flow of Chinese radial tyres into
the country. However, the threat
continues to the extent that intermediaries are still finding ways to beat
the system and still import tyres illegally.
This issue should be
addressed and corrected before the situation
becomes as alarming as in the
past. While the anti-dumping duty of the
Government is levied on bias tyres, the industry is pushing to
extend the duty
to radial tyres. The
tyre industry is also keen
on duty
reliefs on raw materials not produced in
SEGMENT WISE AND
PRODUCT WISE PERFORMANCE
During the year
2008-09, in spite of the
extremely difficult market scenario and the production cuts
caused by the labour problem in two of their major plants, their net sales
increased by 12% over the corresponding
period last year. This increase, much higher than other
major players, during difficult times,
was significant.
The launch of the MRF Wanderer SUV tyres in February 2009, during the peak of the recession period, enhanced their brand image in the SUV segment in the radial passenger market. Tata Nano is a technology marvel in the automobile industry. It is a tribute to company that the Nano rolled out on MRF tyres. Subject has been appointed a major supplier of tyres to the prestigious Tata World Truck project which indicates that while they dominate in the bias-belt segment, they are not far behind in truck radials.
SPECIALITY COATINGS
Compared to the previous year, the cost of raw materials
carne down during the first three months of the year. Even though
they had reduced prices in January
2009, the continued down trend in
the input the profitability. In addition
to this,
the contribution of dealer/ decorative sales went up to 80%
and the more profitable product mix also
contributed in no small measure to the improved margins.
The Division introduced this year, a two pack
water-based exterior wood coating
called Aquacoat PU. Some of the other new
products introduced during the year were – Fresh wood PU for interiors
and exteriors, acrylic superfine finishes,
maintenance coating products
and other industry specific products.
The Speciality Coatings Division achieved a turnover of
Rs.4982.000 Millions against Rs.502.500 Millions for the previous year.
CONVEYOR BELTING
Muscleflex Conveyor Belting, available in a wide range of
Cover Grades, are engineered for various applications. These products,
operating in the most demanding conditions across the world, have gained preference
with many a customer. The ever
increasing list of customers is
testimony to subject’s
superior product quality
and the highest levels of performance that Muscleflex is known for.
EXPORTS:
Subject continued its efforts to develop the company brand
in markets which were identified in 2007-08.
The first half
of the year was challenging due to
slump in demand
on account of global recession. The second half was better and exports
in this period was an indication of recovery. By the fourth quarter, the
situation had changed to normalcy.
Despite the adverse times, company managed to maintain
its market share and volumes dose to the 2007-08 level. Export
turnover was Rs.5005.600 Millions for the year ended 30th September 2009
against Rs.4972.200 Millions for the previous year.
Subject won the All India
Rubber Industries
Association for 'Top Export Awards [Auto Tyre Sector]'
category and the Merit Award from the Chemicals and Allied
Products Export Promotion Council.
OUTLOOK:
It can be anticipated that prices of natural rubber and
other duties would fluctuate widely in the coming years. They should be
conscious of this fact and concentrate
on improving on overall efficiency and
implement rigid cost-control measures
to ensure the
cost push does
not impact their profitability.
With worldwide
recession showing signs of little progress,
multinationals are looking towards
They expect government expenditure in infrastructure and
other sectors to increase further. Government spending, coupled with a lowering
in the interest rates
to offset the weak market sentiment, will hopefully
give effect to a push in demand.
The tyre industry in
PERFORMANCE
OF THE COMPANY:
The sales turnover of the Company during the year increased
from Rs.57155.200 Millions in 2007-08 to Rs.61419.400 Millions in 2008-09.
Earnings before depreciation, interest and tax [EBIDTA] amounted to Rs.7167.200
Millions, the highest ever recorded by the Company, as against Rs.4471.600
Millions in the previous year. After providing for depreciation, interest and
income tax, the net profit for the year was Rs.2530.300 Millions as compared to
Rs.1445.600 Millions in the previous year.
INTERNAL
CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has in place an adequate system of internal
control, supported by documented procedures
covering all financial and operating functions, commensurate with the
size and complexities of the organization.
These are further strengthened with inbuilt checks and
balances in the SAP system which covers most functions.
Some salient features of the internal control systems in
vogue are:
i) Preparation of
annual budgets for all operating and
service functions and monitoring
the same frequently.
ii) Correct and
accurate accounting of
transactions with internal verification and timely reporting.
iii) An efficient ERP
system connecting all the plants, the sales offices and head office, enabling
efficient and seamless flow of information.
iv) Compliance with
applicable statutes, listing
requirements and management policies
and procedures as well as
statutory and applicable accounting standards and policies.
v) A well established internal audit team which carries out
periodic audit at all locations and functions and highlights any deviation in
internal control procedures.
vi) All significant audit observations, suggestions and
follow up actions are placed before the Audit Committee of the Board of
Directors.
vii) A detailed report to the Audit Committee of the Board
of Directors on various operational,
financial and other business risks
faced by the Company and steps taken by the Company to
mitigate the same.
viii) All the assets
are safeguarded and protected against loss from unauthorized use or disposal.
PERFORMANCE:
The operations of the Company predominantly relate to
manufacture of rubber products such as tyres, tubes, flaps, tread rubber and
conveyor belt and this constitutes the major business segment. Other business
operations of the Company consisting of
manufacturing and dealing in speciality coatings, sports goods and
other products, though profitable, do not contribute significantly to
the total revenue of the Company. The raw material prices continued to
rise from April 2008 onwards and
these high price
levels continued into the
first quarter of the current year (i.e. Oct to Dec 2008), thus adversely
impacting the margins. Soon after the raw material prices eased off, industrial
relation problems at two of their plants affected operations for about two
months in the second half of the year.
During the year, due to Constant monitoring, they were able
to drastically reduce current assets by about Rs.3400.000 Millions and this
enabled the Company to reduce its loan liability.
TRADE REFERENCES
· R. Mendez and Sons
·
Span
Chemicals
·
Rotomech
Industry
·
Continental
Equipment India Private Limited
·
Aristo
Packers Private Limited
·
Noble
Synthetics Limited
·
Blue
·
Synthetic
and Polymers
·
Gopal
Metal Containers
·
SPGC
Metal Industries Private Limited
·
Laffans
Petro Chemicals Limited
·
Raveshia
Pigments Limited
·
Insap
Engineers Private Limited
FIXED ASSETS
· Land and Building
· Plant and Machinery
· Moulds
· Vehicles
AUDITED FINANCIAL RESULTS FOR
THE YEAR ENDED
30TH SEPTEMBER,
2010
(Rs. In Millions)
|
Particulars |
|
Consolidated Financial
Results |
|
|
Year Ended 30.09.2010 |
Year Ended 30.09.2010 |
|
1. a) Gross
Sales/ Income form operations |
80804.500 |
80864.600 |
|
Less: Excise Duty |
6277.300 |
6277.300 |
|
Net Sales/ Income
form operations |
74527.200 |
74587.300 |
|
b) Other
Operating Income |
110.200 |
110.200 |
|
|
74637.400 |
74697.500 |
|
2. Expenditure |
|
|
|
a) Increase/
Decrease in stock in trade and work in progress |
[1445.200] |
[1440.900] |
|
b) Consumption of
Raw Materials |
51459.800 |
51498.200 |
|
c) Purchase of
Traded Goods |
138.500 |
138.500 |
|
d) Employees Cost |
3781.700 |
3785.100 |
|
e) Depreciation |
2607.500 |
2615.000 |
|
f) Other
Expenditure |
12427.000 |
12396.300 |
|
g) Total |
66969.300 |
68992.200 |
|
3. Profit/ Loss
form operations before other Income and Interest (1-2) |
5668.100 |
5705.300 |
|
4. Other Income |
309.500 |
306.900 |
|
5. Profit/ Loss
before Interest (3+4) |
5977.600 |
8012.200 |
|
6. Interest |
831.000 |
631.600 |
|
7. Profit/ Loss after
Interest (5-6) |
5346.600 |
5380.600 |
|
8. Exceptional
Items |
-- |
-- |
|
9. Profit/ Loss
before Tax (7+8) |
5346.600 |
5380.600 |
|
10. Tax Expenses |
1806.800 |
1805.500 |
|
11. Net Profit/
Loss After Tax (9-10) |
3539.800 |
3575.100 |
|
12. Share of Minority
Interest |
-- |
-- |
|
13. Net Profit/
Loss (11-12) |
3539.800 |
3575.000 |
|
14. Paid-up
Equity Share Capital (Face value of Rs. 10/- each) |
42.400 |
42.400 |
|
15. Reserve
excluding Revaluation Reserve |
16864.400 |
16841.900 |
|
16. Earnings per share
(EPS) |
|
|
|
Basic and Diluted
EPS (Rs. Per share) |
834.63 |
842.93 |
|
17. Public
Shareholding |
|
|
|
- No. of Shares |
3109070 |
3109070 |
|
% of Shareholding |
73.30 % |
73.30% |
|
18. Promoters and
Promoter group shareholding |
|
|
|
a) Pledged/
Encumbered |
|
|
|
- No. of Shares |
18544 |
18544 |
|
- As a % of the
total shareholding of promoter and promoter group |
1.64% |
1.64% |
|
- As a % of the
total share capital of the company |
0.44% |
0.44% |
|
b) Non Encumbered |
|
|
|
- No. of Shares |
1113529 |
1113529 |
|
- As a % of the
total shareholding of promoter and promoter group |
98.36% |
98.36% |
|
- As a % of the
total share capital of the company |
26.26% |
26.26% |
Notes:
1) The above financial results were reviewed by
the Audit Committee and approved by the Board of Directors at their meeting
held on 26th November, 2010
2) The Board has recommended a Final
Dividend of Rs. 10/- per share and a
Special Dividend of Rs. 25/- per share which along with the two Interim
Dividends
3) Provision for Taxation has been made in
respect of Income presently determined, subject to appropriated revision/
adjustments on final determination of Income for the Relevant Previous year as
per Income Tax Act, 1961.
4) The Company is dealing mainly in Rubber
Products and has no other reportable segment.
5) The expansion undertaken at its Modek
manufacturing facility has began operations.
6) Details of Number of Investor Complaints for
the year ended 30.09.2010- beginning – 0, Received – 1, Disposed – 1
7) Figures have been regrouped wherever
necessary.
WEB DETAILS
OVERVIEW
1946 - A year to remember
Subject
established its first office in 1949 at Chennai,
Today subject is into a league of its own with:
·
6 manufacturing plants in
·
A distribution network of over 2,500 outlets in
·
Overseas offices in
·
Exports to over 75 countries worldwide
Subject
manufactures the largest range of tyres in
Since 1984, Subject Tyres has consistently been chosen as OEM fitment by
almost every major car manufacturer in
The milestones
achieved while being such a progressive and vibrant company, is also recognized
by the corporate world through a number of awards like:
·
Voted
among the Top 10 leading corporate groups by the Far Eastern Economic Review
·
Voted as one of
·
No. 1 award for Customer Satisfaction by J.D. Power
Asia Pacific for 2001 and 2002
·
Most
ethical company in
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.45.32 |
|
|
1 |
Rs.70.54 |
|
Euro |
1 |
Rs.58.70 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
9 |
|
--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 |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
73 |
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.