MIRA
INFORM REPORT
|
Report Date : |
30.03.2011 |
IDENTIFICATION DETAILS
|
Name : |
CUMMINS INDIA LIMITED |
|
|
|
|
Registered Office : |
Kothrud, Pune – 411038, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
31.03.2010 |
|
|
|
|
Date of Incorporation : |
17.02.1962 |
|
|
|
|
Com. Reg. No.: |
11-12276 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L29112PN1962PLC012276 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
PNEC05744E |
|
|
|
|
PAN No.: [Permanent
Account No.] |
PANAPPLIED |
|
|
|
|
Legal Form : |
Public limited liability company. The company’s shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturing of Diesel Engines and Filtration Equipments. |
RATING & COMMENTS
|
MIRA’s Rating : |
A (66) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
|
|
|
|
|
Maximum Credit Limit : |
USD 62000000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Exits |
|
|
|
|
Comments : |
Subject is a well established and a reputed company having good track records. Financial position of the company appears to be strong and healthy. Directors are reported as experienced and respectable businessmen. Fundamentals of the company appears to be sound. Trade relations are fair. Business is active. Payments are regular and as per commitments. Fundamentals of the company are sound. The Company can be considered good 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 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INFORMATION DENIDED BY
|
Name : |
Mr. Abhijeet Sankar |
|
Designation : |
Finance Department |
|
Date : |
28.03.2011 |
LOCATIONS
|
Registered Office / Factory : |
Kothrud, Pune – 411038, |
|
Tel. No.: |
91-20-25385435/5380240 |
|
Fax No.: |
91-20-25380125 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office: |
35/A/1/2, CDSS, Ernadawana,
Pune – 411038, |
|
|
|
|
Factory 1 : |
Kothrud, Pune – 411038, |
|
|
|
|
Factory 2 : |
Plot No. 19/25A, Silver Industrial Estate, Bhimpore, |
|
|
|
|
Branches : |
Located at: v
Pune, v
v Dist. Khamman, Andhra Pradesh v
v
v
v
v
v
v Haryana v
v
v Hubli, Karnataka v Bilaspur, Madhya Pradesh v
v Singrauli, Madhya Pradesh v
Mumbai, v
v Orissa v Rajasthan v Chennai, Tamilnadu v
v
v
v Noida, Uttar Pradesh v
Asansol, west v
Kokata, |
DIRECTORS
As On : 31.03.2010
|
Name : |
Mr. Rajeev Bakshi |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. J. M. Barrowman |
|
Designation : |
Alternate Director |
|
|
|
|
Name : |
Mr. Patrick Ward |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P. S. Dasgupta |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. M. A. Lavett |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Naseer Munjee |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. B. H. Reporter |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. James Kelly |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Venu Srinivasan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Anant Talaulicar |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. John Wall |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Pradeep Bhargava |
|
Designation : |
Alternate Director |
|
|
|
|
Name : |
Mr. Sean Milloy |
|
Designation : |
Alternate Director |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.12.2010
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
488 |
-- |
|
|
488 |
-- |
|
|
|
|
|
|
100980000 |
51.00 |
|
Total shareholding of Promoter and Promoter Group (A) |
100980000 |
51.00 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
27943199 |
14.11 |
|
|
12753175 |
6.44 |
|
|
23980550 |
12.11 |
|
|
64676924 |
32.67 |
|
|
|
|
|
|
12755760 |
6.44 |
|
|
|
|
|
|
17865780 |
9.02 |
|
|
893950 |
0.45 |
|
|
827098 |
0.42 |
|
|
92866 |
0.05 |
|
|
2383 |
-- |
|
|
437108 |
0.22 |
|
Hindu
Undivided Families |
290854 |
0.15 |
|
|
3887 |
-- |
|
|
32342588 |
16.33 |
|
Total Public shareholding (B) |
97019512 |
49.00 |
|
Total (A)+(B) |
198000000 |
100.00 |
(1) Indian
Bodies Corporate
Individual shareholders holding nominal
share capital up to Rs. 0.100 MillionBUSINESS DETAILS
|
Line of Business : |
Manufacturing of diesel engines and filtration equipments. |
||||||||
|
|
|
||||||||
|
Products : |
|
GENERAL INFORMATION
|
No. of Employees : |
2988 (Approximately) |
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
|
Bankers : |
Ř
State Bank of India Ř
The Saraswat Co-operative Bank Limited Ř
State Bank of Hyderabad Ř
HDFC Bank Limited Ř
Citibank, N.A. Ř
Bank of America |
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Price Waterhouse Chartered Accountants |
|
Address : |
252, Veer Savarkar Marg, |
|
|
|
|
Holding Company : |
Cummins Inc. |
|
|
|
|
Fellow Subsidiaries : |
v
Cummins (China) Investment Company Limited. v
Cummins Business Services, Nashville v
Cummins Commercial Izadora v
Cummins Deutschland Gmbh v
Cummins Diesel N.V. v
Cummins Diesel Sales Corporation, Singapore v
Cummins Diesel South Africa Private. Limited. v
Cummins Diesel UK v
Cummins Diethelm Limited v
Cummins Engine (China) Investment Co. Limited. v
Cummins Engine (Shanghai) Trading And Service
Company v
Cummins Engine (Beijing) Company Limited. v
Cummins Filtration Australia v
Cummins Firepower v
Cummins France Sa v
Cummins Generator Technologies (China) Company
Limited. v
Cummins Generator Technologies Limited, UK v
Cummins Hong Kong Limited v
Cummins Indiana v
Cummins Italia Spa v
Cummins Japan Limited. v
Cummins Mexico Sa v
Cummins Middle East Fze v
Cummins Mid-South, LLC v
Cummins Natural Gas Engines, Inc. v
Cummins Power Generation (China) Company,
Limited. v
Cummins Power Generation, Australia v
Cummins Power Generation Limited, U.S.A. v
Cummins Power Generation Limited, Kent v
Cummins Power Generation Singapore PTE Limited. v
Cummins Power Generation(China) Company Limited. v
Cummins Rocky Mountain Llc v
Cummins Sales & Service Philippines Inc. v
Cummins South Africa (Pty) Limited. v
Cummins Taiwan Pte. Limited. v
Cummins Technologies India Limited v
Cummins Turbo Technologies (US) v
Cummins Turbo Technologies Limited. v
Cummins UK v
Cummins Westport v
Cummmins Generator Technologies (China) Company
Limited. v
Diesel Recon Company v
Diesel Recon, El Paso v
Shanghai Cummins Trade Company Limited. v
Cummins Npower v
Cummins Brasil Limited. v
Cummins Limited v
Cummins S De R L De C V |
|
|
|
|
Associates : |
v
Cummins Generator Technologies India Limited |
|
|
|
|
Joint Venture : |
v
Valvoline Cummins Limited v
Cummins Exhaust India Limited v
Cummins Research and Technology India Limited |
CAPITAL STRUCTURE
As On : 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
200000000 |
Equity Shares |
Rs. 2/- each |
Rs. 400.000 millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
198000000 |
Equity Shares |
Rs. 2/- each |
Rs. 396.000
millions |
|
|
|
|
|
Notes : of the above equity shares :
1. 190500000 shares of Rs. 2/- each are allotted as fully paid up bonus
shares by capitalization of reserves.
2. 100980000 shares of Rs. 2/- each are held by the holding company, Cummins
Inc., USA
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
396.000 |
396.000 |
396.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
15213.964 |
13550.505 |
10640.851 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
15609.964 |
13946.505 |
11036.851 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
86.238 |
211.976 |
287.165 |
|
|
2] Unsecured Loans |
0.133 |
0.403 |
0.915 |
|
|
TOTAL BORROWING |
86.371 |
212.379 |
288.080 |
|
|
DEFERRED TAX LIABILITIES |
329.522 |
215.469 |
175.857 |
|
|
FINANCE LEASE LIABILITITY |
0.000 |
16.702 |
37.131 |
|
|
|
|
|
|
|
|
TOTAL |
16025.857 |
14391.055 |
11537.919 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
3336.586 |
3090.162 |
2548.520 |
|
|
Capital work-in-progress |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
7329.224 |
3992.691 |
4321.455 |
|
|
DEFERREX TAX ASSETS |
499.415 |
446.115 |
309.635 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
4096.685
|
4679.747 |
3214.565 |
|
|
Sundry Debtors |
5229.012
|
6821.030 |
5504.531 |
|
|
Cash & Bank Balances |
559.282
|
323.227 |
123.005 |
|
|
Other Current Assets |
92.655
|
83.193 |
24.046 |
|
|
Loans & Advances |
2694.940
|
2663.192 |
1934.680 |
|
Total
Current Assets |
12672.574
|
14570.389 |
10800.827 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
3768.243
|
4762.398 |
4030.914 |
|
|
Other Current Liabilities |
1409.480
|
1214.251 |
953.280 |
|
|
Provisions |
2634.219
|
1731.653 |
1458.324 |
|
Total
Current Liabilities |
7811.942
|
7708.302 |
6442.518 |
|
|
Net Current Assets |
4860.632
|
6862.087 |
4358.309 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
16025.857 |
14391.055 |
11537.919 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
28448.704 |
33042.837 |
23307.792 |
|
|
|
Other Income |
1215.595 |
1507.467 |
1227.127 |
|
|
|
TOTAL (A) |
29664.299 |
34550.304 |
24534.919 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Sales and Other Expenses |
23173.844 |
28270.458 |
20238.602 |
|
|
|
TOTAL (B) |
23173.844 |
28270.458 |
20238.602 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
6490.455 |
6279.846 |
4296.317 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
20.507 |
26.080 |
6.665 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
6469.948 |
6253.766 |
4289.652 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
360.801 |
455.587 |
329.620 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
6109.147 |
5798.179 |
3960.032 |
|
|
|
|
|
|
|
|
|
Add |
Exceptional Item |
0.000 |
192.037 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
1670.475 |
1653.605 |
1153.122 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
4438.672 |
4336.611 |
2806.910 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
4955.127 |
3154.023 |
2114.431 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
443.867 |
433.661 |
701.728 |
|
|
|
Proposed Final Dividend |
1188.000 |
514.800 |
514.800 |
|
|
|
Interim Dividend |
1188.000 |
1267.200 |
396.000 |
|
|
|
Tax on Dividend |
399.213 |
319.846 |
154.790 |
|
|
BALANCE CARRIED
TO THE B/S |
6174.719 |
4955.127 |
3154.023 |
|
|
|
|
|
|
|
|
|
|
EXPORT VALUE |
5076.277 |
13424.852 |
7420.494 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
915.549 |
1336.392 |
NA |
|
|
|
Components |
2219.318 |
4462.380 |
NA |
|
|
|
Machinery Spares |
8.674 |
16.183 |
NA |
|
|
|
Capital Goods |
305.254 |
261.073 |
NA |
|
|
|
Others |
13.657 |
47.283 |
NA |
|
|
TOTAL IMPORTS |
3462.452 |
6123.311 |
NA |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
22.42 |
21.90 |
14.18 |
|
QUARTERLY RESULTS
(Rs.
In Millions)
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
9279.400 |
10914.300 |
9925.200 |
|
Total Expenditure |
7304.600 |
8741.900 |
8128.800 |
|
PBIDT (Excl OI) |
1974.800 |
2172.400 |
1796.400 |
|
Other Income |
96.500 |
205.100 |
102.600 |
|
Operating Profit |
2071.300 |
2377.500 |
1899.000 |
|
Interest |
4.100 |
4.100 |
3.100 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
2067.200 |
2373.400 |
1895.900 |
|
Depreciation |
93.100 |
92.900 |
91.000 |
|
Profit Before Tax |
1974.100 |
2280.500 |
1804.900 |
|
Tax |
571.800 |
601.600 |
415.900 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
1402.300 |
1678.900 |
1389.000 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
1402.300 |
1678.900 |
1389.000 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2009 |
31.03.2008 |
31.03.2007 |
|
PAT / Total Income |
(%) |
1.48
|
12.55 |
11.44 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
21.47
|
17.55 |
16.99 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
37.01
|
32.02 |
28.99 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.39
|
0.41 |
0.36 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.53
|
0.58 |
0.63 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.62
|
1.89 |
1.68 |
LOCAL AGENCY FURTHER INFORMATION
LITIGATION:
CASE – 1:-
Bench
:-
|
Stamp No.
:- |
WPST/15228/2008 |
Filing Date:- |
30.06.2008 |
Main
Matter
|
Stamp No.
:- |
WP/4857/2008 |
Filing Date:- |
07.07.2008 |
Petitioner:- Suresh Sripati Rao
Petn. Adv.:- Shri. K.S. Verma
Respondent:- Cummins India Limited
Resp. Adv.:- Haresh Mehta and Company. For. R. No. 1
District:- Pune
Bench:- Single
Status:- Admitted
Last Date:- 08.07.2008
Stage:- Admission
Last Coram:- Hon’ble Shri. Justice Dr. D.Y. Chandrachud
Act:- Industrial Dispute Act, 1947.
SUNDRY CREDITORS
DETAILS
(Rs.
In millions)
|
Particulars |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
Sundry Creditors |
|
|
|
|
1.
Micro and Small Enterprises |
140.942 |
109.732 |
|
|
2.
Others |
3627.301 |
4652.666 |
|
|
|
|
|
|
|
Total |
3768.243 |
4762.398 |
4030.914 |
FINANCIAL RESULTS:
During the year, net
sales turnover was Rs. 28448.704 millions (Rs. 28449.000 million) as compared
to Rs. 33042.837 millions (Rs. 33043.000 million) during the previous year (14%
lower). Exports and other foreign exchange earnings were Rs. 5076.277 millions
(Rs. 5076.000 million) as compared to Rs. 13424.852 millions (Rs. 13425.000
million) during the previous year (62% lower). Profit after tax was Rs.
4438.672 millions (Rs. 4439.000 million) as compared to Rs. 4336.611 millions
(Rs. 4337.000 million) for the previous year (2% higher).
JOINT
VENTURES :
a.
Cummins Exhaust India Limited (CEIL) :
Sales
and other income of CEIL, a 50:50 Joint Venture between Cummins Filtration
Inc., U.S.A. and the Company, for the year ended March 31, 2010, was Rs.
447.572 millions (Rs. 448 million) as compared to Rs. 429.565 millions (Rs.430
million) during the previous year (4 % higher). CEIL declared a dividend
aggregating to Rs.14.5 per equity share of Rs. 10/- each during the year ended
March 31, 2010, on the paid-up share capital of Rs. 40.000 millions. CEIL is
engaged in the business of manufacture and sale of exhaust silencers and
mufflers for Internal Combustion Engines.
b.
Cummins Research and Technology India
Limited (CRTI) :
Sales and
other income of Cummins Research and Technology India Limited (CRTI), a 50:50
Joint Venture between Cummins Inc., U.S.A. and your Company, for the year ended
March 31, 2010, was Rs. 409.910 millions (Rs. 410 million ) as compared to Rs.
482.717 millions (Rs. 483 million) during the previous year (15 % lower). CRTI
has a Research and Technology Centre at Pune and is engaged in providing
Information Technology Enabled Mechanical Engineering Development Services to
Cummins Inc., its subsidiaries and joint ventures across the world.
c.
Valvoline Cummins Limited (VCL) :
VCL is
a 50:50 joint venture with Valvoline International Inc., U.S.A., a global
leader in lubricants and engine oils. Sales and other income of VCL for the
year ended March 31, 2010 was Rs. 5823.353 millions (Rs. 5,823 million) as
compared to Rs. 4470.661 millions (Rs. 4,471 million) during the previous year
(30% higher). VCL has declared a dividend of Rs. 12.60 per equity share of Rs.
10/- each on equity paid-up share capital of Rs. 190.000 millions during the
financial year 2009-10.
INITIATIVES AT
PHALTAN :
With the recovery
in the economy, the Company has once again stepped up activity and investment
at its Phaltan Project. Two projects are underway and are expected to commence
operations during the third quarter of 2010.
Ř A High Horse Power
Rebuild centre which will have a state of the art facility to Rebuild up to 900
High Horse Power engines per annum.
Ř A Parts
Distribution Centre (PDC) which will undertake kitting, assembly of products, parts,
components etc. and distribution of the same from a centralized location to
cater to the requirements of other plants of Cummins as well as after market.
Total investment
in these projects and in building common infrastructure facilities for the plants
at Phaltan is expected to be around Rs. 1200.000 millions during the year
2010-11.
OTHER INITIATIVES
:
The Company
reacted with agility to brace the economic slowdown at the beginning of the
year. Some initiatives in this direction included :
Ř Effective
redeployment of manpower among Business Units / Group Companies to ensure
optimum utilization of resources.
Ř Judicious capital
investments and deferment of capital expenditure where possible, without
affecting growth. However, investment in people, customer relationships, new
products & technologies and critical projects / capacity expansion
continued as planned to strengthen your Company’s position for long term
profitable growth in India.
Ř CBS operations, which
commenced during the FY 2004-05 for transactional services, like financial
transactions, payroll processing, IT infrastructure management etc., were
discontinued effective September 1, 2009, to enable the Company to focus on its
core business activities. However, in order to ensure continuity of services as
per quality and security standards of Cummins, these services have been
outsourced to a group company, Cummins Technologies India Limited (CTIL).
Ř Intensified use of
Accelerated Cost Efficiency and Six Sigma tools to drive down costs.
Ř Effective vendor
management and consolidation to leverage better costs.
Management
Discussion and Analysis Report
1.
Industry Structure and Developments
Economic Trends and Implications
Despite
the global economic crisis, the Indian Economy closed on a relatively good note
in fiscal year 2009-10. This recovery started from the second quarter of FY10,
primarily in the domestic market, supported by various monetary and fiscal
stimulus packages released by the Indian Government. Industrial production also
rebounded and is expected to have grown by 9.8 percent in 2009-10. India’s
Exports witnessed a sluggish recovery starting November 2009, after a 13 month
fall. A full recovery in global demand has yet to be experienced.
The
economic recovery has been accompanied with a rise in fiscal deficit and
inflation. Fiscal deficit during 2009-10 is estimated to be 7.1 percent of GDP,
up from 5.9 percent during 2008-09. In an attempt to control the rising fiscal
deficit, the government rolled back some elements of the stimulus package that
were offered during the previous fiscal. Inflation management also remained a
big challenge for the Government during 2009-10. Inflation crossed 10 percent
in March, the highest during the 17 month period starting October 2008. WPI
inflation is expected to be higher during 2010-11 (at an average of 6 percent)
as compared to 3.6 percent estimated for 2009-10 on account of lower base in
the first seven months of 2009-10, rise in demand, hike in excise duty across
the board, and increase in customs duty on crude and petroleum products.
Assuming
normal monsoons, robust industrial growth and resilient performance of the
service sector, GDP in FY
11 is
expected to grow at above 8 percent. The focus of the government spending on
the infrastructure sector would continue to support growth.
Segment-wise
and Product-wise Performance
Power
Generation
The
domestic market demand that had been impacted in the second half of 2008-09
showed signs of recovery during the year.
Demand
for their low horse power products has also picked up and the manufacturing
facilities in Pirangut and Daman have better utilization of capacity.
With
the improved availability of natural gas, demand for lean burn gas generator sets
improved with the Company bagging orders worth 20 MW.
Demand
for producer gas generator sets which use gasifier technology developed along
with Indian Institute of Science, was also encouraging.
The
Automatic Transfer Switches (ATS) that was launched in early 2009 have found
acceptance in the market place and the Company is steadily improving its
presence in this market.
Industrial
Ř
The Industrial Engine Business grew 24%
during 2009-10. The diverse nature of the segments helped the Industrial business
ride smoothly through the lower growth period of 2009.
Ř
The Construction segment, which is
directly related to the industrial activity and GDP growth, staged a smart
recovery in the later half of the year to grow by 30% on an annual basis.
Ř
The Mining segment grew by 16% during
2009-10. Successful implementation of new product programs, introduction of
electronic engines on varied applications, was the key to growth.
Ř
The Compressor segment witnessed a
robust growth of more than 50% over last year. This growth was triggered by
strong performance in the Water Well, Gas Compression and Portable compressor
segments.
Ř
The high pressure water well drill rig
market showed significant increase in demand mainly due to the deficient and
irregular monsoon.
Ř
Government’s directive to use clean
fuel in the major cities of India in a phased manner is leading to increased
demand for gas compression packages. Your Company strengthened its position in
this segment by offering competitive products having higher fuel efficiency
with the lowest life cycle cost and won major orders from leading Gas
Compression package manufacturers.
Ř
The Marine segment grew close to 50%
over last year. The success in this segment can be attributed to the Company’s
focus on maximizing naval opportunities and introduction of new products for
new applications.
Ř
The Rail segment grew over 19% and its
performance was boosted by the execution of the Sri Lanka DEMU project, CNG
DEMU project and strong participation in 4-wheeler and 8-wheeler cars project.
Automotive
Ř
The Automotive Business grew by 144% in
2009-10 as compared to 2008-09.
Ř
After securing 100% of the requirements
for the Delhi Transport Corporation (DTC) tender for low floor buses, the Company
has secured all of the second phase tender. The Company maintained 100% market
share in the premium CNG engines through its B series Lean Burn engines.
Ř
The heavy commercial segment of 300 HP
and above remained nascent during the Financial Year 2009-10. However, with the
increase in infrastructural activities this segment is likely to pick up medium
term.
Distribution
Ř
The Distribution Business Unit (DBU)
recorded a 18% growth in revenues over the previous year and reported a robust
performance in almost all lines of business.
Ř
Through a comprehensive project on
reduction in Selling and Administrative Expenses and stringent cost control,
the DBU has been able to achieve significant improvements in profitability
across its operations.
Exports
Ř
The global crisis impacted exports
severely, resulting in a revenue drop of 65% over the previous year.
New
Business Initiatives 2009-10
Power
Generation :
Ř
The Company introduced 7.5/10 kVA
generator sets to supplement its existing 15 to 3000 kVA range. These 7.5/10
kVA products are available across the country through a retail distribution
channel. It is also a niche product for Cummins globally and the demand is
expected to increase significantly across the globe.
Ř
The Company re-designed and launched
the low horsepower export product range under a new International Specification
of Cummins and it was well accepted in the global markets. The Company also
introduced a new range of products between 40 kVA and 160 kVA for exports.
Industrial
:
Ř
The Company captured new businesses in
high horsepower applications by positioning new value packages in Rail (Diesel
Electric Multiple Unit), Marine & Pump segments.
Ř
The Company seeded a prototype unit for
a Self Propelled Accident Relief Train (SPART) as a part of Indian Railway’s
increased focus on safety. Your Company also won a prestigious order from the
Indian Railways for 4 wheeler Over Head Equipment Cars (maintenance machine).
Distribution
:
Ř
The Company’s distribution arm launched
a new initiative to devise and implement a support strategy for Automotive OEMs
which resulted in significant growth in auto parts sales.
Ř
In order to improve the dealer network
efficiency and deliver service excellence, the company implemented a network
consolidation project without compromising on customer reach and dealer
efficiency.
Ř
Achievements
Power
Generation :
Ř
The Company’s manufacturing plant in
Pirangut is now ISO : 9001, ISO : 14001 and OHSAS : 18001 certified.
Industrial
:
Ř
A leading OEM in the construction
equipment sector in India has conferred a certificate of honour on the Company
for Significant Contribution to “ON TIME DELIVERY PERFORMANCE” during the year
2009-2010 for the second consecutive year.
Ř
A leading player in the compressor
segment conferred two awards on Cummins India Limited for Customer Support
Excellence.
Exports
Ř
The Company received the prestigious
Engineering Export Promotion Council’s “Star Performer Award” for Export
Excellence for the year 2007-08. This was in recognition of its outstanding
contribution to Engineering Exports (Western Region) in the category of “Large
Enterprises”. The Company has received this award for the 20th consecutive
year.
Outlook and
Initiatives for the Current Year and Thereafter
Power Generation
Ř The fundamentals
that drive the demand for generator sets are positive. GDP is growing,
industrial production is accelerating, power deficits continue, and investments
in infrastructure are increasing. This has already translated into an
improvement in demand for generator sets from the domestic market. This trend
is expected to continue.
Ř There is also an
improvement in demand from other emerging markets.
Industrial Outlook
Ř With a growing
middle class base, favorable demographics, rising disposable income,
consumption levels, growing corporate sector – including Service and Industry,
the outlook remains positive. After a slowdown period in 2008-09, the economy
is expected to grow strongly this year and gain momentum in coming years.
Ř Government and
private investments will continue to grow in the infrastructure sector due to
sustained economic growth.
Ř India stage III
emission norms based on EU stage IIIA are likely to be implemented from April
2011 for Off Highway Wheeled Construction Equipment such as wheel loaders, skid
steer loaders, motor graders, compactors, pavers and cranes.
Ř The railway energy
saving drive will lead to transition from ‘Self Generation’ to ‘End on
generation’ coaches and will drive demand for diesel engines.
Ř The freight
corridor project and increased focus on safety by the Indian Railways will lead
to an increase in demand for track maintenance machines and maintenance rail
cranes.
Automotive
Ř With the demand
for CNG low floor buses and the recovery of the heavy truck and tipper segments,
the outlook for Automotive Business appears positive.
Distribution
Ř The company plans
to set up a state-of-the-art rebuild facility at the Cummins Megasite in
Phaltan for its line of HHP mechanical and electronic engines to cater to the
growing demand in the region.
Ř Despite the
downturn in the economy and weak sentiments in the market, the Distribution
Business maintains a positive outlook for the current year and has launched
several initiatives to continue this growth.
Discussion on
Financial Performance with respect to Operational Performance
Fixed Assets
Additions to the
Fixed Assets block during the year ended March 31, 2010 were Rs. 833.189
millions (Rs.702.094 millions in the
previous year). The addition of Rs. 833.189 millions consists mainly of
buildings of Rs. 29.804 millions plant and machinery of Rs. 793.793 millions
for augmenting various manufacturing facilities, furniture and fittings of Rs.
6.195 millions, software of Rs.2.336 millions and vehicles of Rs. 1.061
millions. The depreciation block as of March 31, 2010 was Rs. 4439.638 millions
as compared to Rs. 4323.632 millions as of March 31, 2009. The deductions/
disposals during the year amounted to Rs. 282.856 millions as compared to the
previous year’s Rs. 444.105 millions. Consequently, the net fixed asset block
increased to Rs. 3336.586 millions as of March 31, 2010 as compared to Rs.
3090.162 millions as of March 31, 2009.
Unaudited financial results for the Quarter and Nine months ended
DECEMBER 31, 2010
(Rs. in millions)
|
Particulars |
31.12.2010 (Unaudited) |
31.12.2010 (Unaudited) |
|
Net Sales |
9583.500 |
29358.800 |
|
Other Operating Income |
341.700 |
760.100 |
|
Total Income |
9925.200 |
30118.900 |
|
Expenditure |
|
|
|
(Increase)/decrease in stock in trade and work-in
Progress |
2.900 |
(115.800) |
|
Consumption of raw materials |
5783.600 |
17951.300 |
|
Purchase of Traded Goods |
580.200 |
1185.800 |
|
Employee Cost |
643.200 |
1844.900 |
|
Depreciation |
91.00 |
277.000 |
|
Other Expenditure |
1118.900 |
3309.100 |
|
Total Expenditure |
8219.800 |
24452.300 |
|
Profit from Operations before Other Income and
Interest |
1705.400 |
5666.600 |
|
Other Income |
102.600 |
404.200 |
|
Profit Before Interest |
1808.000 |
6070.800 |
|
Interest |
3.100 |
11.300 |
|
Profit before Tax |
1804.900 |
6059.500 |
|
Tax Expenses |
415.900 |
1589.300 |
|
Net Profit
for the period |
1389.000 |
4470.200 |
|
Paid- up Equity
Share Capital (Face value
of the share – Rs. 10) |
396.000 |
396.000 |
|
Reserves
excluding revaluation reserves (as per last audited balance sheet) |
---- |
---- |
|
Basic and
diluted Earnings per share for the period, for the year to date (not annualized)
and for the previous year – Rs. |
7.02 |
7.02 |
|
Public
shareholding |
|
|
|
Number of
Shares |
97019512 |
97019512 |
|
Percentage of Shareholding |
49% |
49% |
|
Promoters and
promoter group shareholding |
|
|
|
Non -
encumbered Number of Shares Percentage of
Shares (as a % of
the total shareholding of promoter and promoter
group) Percentage of
Shares (as a % of
the total share capital of the company) |
100980488 100% 51% |
100980488 100% 51% |
SEGMENT WISE REVENUE, RESULTS
AND CAPITAL EMPLOYED
(Rs. in millions)
|
Sl. No. |
|
Particulars |
Quarter Ended |
Quarter Ended |
|
|
31.12.2010 |
31.12.2010 |
||
|
|
(Un-audited) |
(Un-audited) |
||
|
1 |
|
Segment Revenue |
|
|
|
|
|
|
|
|
|
|
|
Engine Business |
8747.600 |
27086.100 |
|
|
|
Others |
835.900 |
2272.700 |
|
|
|
|
|
|
|
|
|
Revenue from
Operations |
9583.500 |
29358.800 |
|
|
|
|
|
|
|
2 |
|
Segment Results (Net Profit(+)/Loss(-) before Tax & Interest from each Segment) |
|
|
|
|
|
|
|
|
|
|
|
Engine Business |
1407.700 |
4725.800 |
|
|
|
Others |
297.700 |
940.800 |
|
|
|
|
|
|
|
|
|
Total |
1705.400 |
5666.600 |
|
|
|
|
|
|
|
|
|
Less :Interest |
3.100 |
11.300 |
|
|
|
Add : Unallocable Income |
102.600 |
404.200 |
|
|
|
Total Profit Before
Tax |
1804.900 |
6059.500 |
|
|
|
|
|
|
|
3 |
|
Capital Employed (Segment Assets - Segment Liabilities) |
|
|
|
|
|
|
|
|
|
|
|
Engine Business |
10835.800 |
10835.800 |
|
|
|
Others |
486.200 |
486.200 |
|
|
|
|
|
|
|
|
|
Total |
11322.000 |
11322.000 |
Notes :
1. The Board of Directors of the Company have declared an interim dividend of
Rs. 7 per equity share on 198,000,000 shares of Rs. 2/- each fully paid up for
the financial year 2010-11.
2. Tax Expense for the quarter ended December 31, 2010 is net of provision
in respect of earlier years written back Rs. 88.400 millions (previous quarter
ended December 31,2009 Rs. 65.400 millions)
3. The Company has decided to divest its 50% stake in Cummins Exhaust India
Limited. The sale is expected to be completed by 31st March 2011
4. Previous period('s) / year('s) figures have been re-grouped wherever necessary.
5. At the beginning of the quarter, no investor complaint was pending.
During the quarter, 4 complaints were received. The Company has resolved the
same and no complaint was pending at the end of the quarter.
6.
The above unaudited
results have been reviewed by the Audit Committee and approved by the Board of
Directors at their meeting held on February 3, 2011. The results have been
subjected to a 'Limited Review' by the Auditors of the Company.
Fixed Assets:
· Freehold land
· Land*
· Roads
· Building
· Plant and Machinery
· Furniture and fittings
· Vehicles
· Software
· Technical Knowhow
· Global Sourcing Consideration
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.44.67 |
|
|
1 |
Rs.71.63 |
|
Euro |
1 |
Rs.63.09 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--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 |
|
66 |
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.