MIRA
INFORM REPORT
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Report Date : |
05.11.2011 |
IDENTIFICATION DETAILS
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Name : |
FALCON TYRES LIMITED |
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Registered
Office : |
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Country : |
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Financials (as
on) : |
30.09.2010 |
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Date of
Incorporation : |
29.11.1973 |
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Com. Reg. No.: |
08-002455 |
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Capital
Investment / Paid-up Capital : |
Rs. 170.427 Millions |
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CIN No.: [Company Identification
No.] |
L25114KA1973PLC002455 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
BLRF00538G/BLRF00030C |
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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 and Tubes for Scooters, Mopeds,
Motor Cycles, Auto Rickshaws and Animal-drawn Vehicles. |
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No. of Employees
: |
Not Available |
RATING & COMMENTS
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MIRA’s Rating : |
A (60) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 7100000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an well established and reputed company having fine track.
Financial position of the company appears to be sound. Trade relations are fair.
Business is active. Payments are reported to be regular and as per
commitments. The company can be considered normal for 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
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Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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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 / Plant Address : |
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Tel. No.: |
91-821-2582055/2582041/2582453 |
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E-Mail : |
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Website : |
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Corporate Office : |
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Tel. No.: |
91-33-22894747 |
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Fax No.: |
91-33-22893463 |
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Branch : |
Located At: |
DIRECTORS
AS ON 30.12.2010
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Name : |
Mr. Vijay Vaid |
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Designation : |
Director |
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Name : |
Mr. Tarun Gandhi |
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Designation : |
Whole-time Director |
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Name : |
Mr. Ambuj Kumar Jain |
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Designation : |
Director |
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Name : |
Mr. Kokkarne Natarajan Prithviraj |
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Designation : |
Director |
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Name : |
Mr. S Ravi |
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Designation : |
Additional Director |
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Name : |
Mr. Prakash P Mallya |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. M C Bhansali |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.12.2010
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding of Promoter and Promoter Group |
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4932844 |
14.47 |
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23513100 |
68.98 |
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(B) Public Shareholding |
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Financial Institution / Bank |
165602 |
0.49 |
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106462 |
0.31 |
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2571478 |
7.54 |
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Individual shareholders holding nominal share capital up to Rs.0.100
Millions |
2451115 |
7.19 |
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225900 |
0.66 |
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119031 |
0.35 |
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Total |
34085532 |
100.00 |
(1) Indian
Bodies Corporate
Clearing MembersBUSINESS DETAILS
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Line of Business : |
Manufacturer of Tyres and Tubes for Scooters, Mopeds,
Motor Cycles, Auto Rickshaws and Animal-drawn Vehicles. |
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Products: |
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PRODUCTION
STATUS (AS ON : 30.09.2010)
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Particulars
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Tyres |
Tubes |
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Quantity
(Nos.) |
Quantity
(Nos.) |
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Installed Capacity (Per Annum) * |
10800000 |
5400000 |
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Production ** |
10211634 |
7255101 |
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Particulars
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Tyres |
Tubes |
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Installed Capacity (Per Annum) |
36183 |
2566 |
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Production
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34212 |
3448 |
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Note :
* The installed capacity is as certified by the management, and being a technical matter reliance has been placed by the auditors.
** Production includes, Production on Job Work basis.
GENERAL INFORMATION
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
K.N. Gutgitia and Company Chartered Accountant |
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Holding Company : |
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Associates : |
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Subsidiaries : |
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Related Parties : |
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CAPITAL STRUCTURE
AS ON 30.09.2010
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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200000000 |
Equity Shares |
Rs.5/- each |
Rs. 1000.000 Millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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34085532 |
Equity Shares |
Rs.5/- each |
Rs. 170.427
Millions |
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Note :
(29460744 Equity Shares of Rs. 5/- each held
by DIL Rim and Wheel Corporation Limited,
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
30.09.2010 |
30.09.2009 |
31.03.2008 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
170.427 |
170.427 |
56.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1611.062 |
1219.627 |
1133.800 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1781.489 |
1390.054 |
1190.600 |
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LOAN FUNDS |
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1] Secured Loans |
1502.260 |
1379.862 |
1470.700 |
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2] Unsecured Loans |
817.180 |
695.480 |
297.500 |
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TOTAL BORROWING |
2319.440 |
2075.342 |
1768.200 |
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DEFERRED TAX LIABILITIES |
72.695 |
79.416 |
51.500 |
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TOTAL |
4173.624 |
3544.812 |
3010.300 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1849.893 |
1839.700 |
1336.900 |
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Capital work-in-progress |
386.368 |
44.100 |
543.100 |
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INVESTMENT |
886.300 |
0.600 |
0.200 |
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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 |
721.821
|
344.600
|
453.900 |
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Sundry Debtors |
1123.694
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971.600
|
315.100 |
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Cash & Bank Balances |
321.855
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209.900
|
94.500 |
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Other Current Assets |
0.000 |
0.000 |
0.000 |
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Loans & Advances |
482.960
|
1089.100
|
1012.400 |
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Total
Current Assets |
2650.330
|
2615.200
|
1875.900 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Other Current Liabilities |
1225.085
|
828.300
|
689.600 |
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Provisions |
374.182
|
126.500
|
57.900 |
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Total
Current Liabilities |
1599.267
|
954.800
|
747.500 |
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Net Current Assets |
1051.063
|
1660.400
|
1128.400 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
1.700 |
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TOTAL |
4173.624 |
3544.800 |
3010.300 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
30.09.2010 |
30.09.2009 |
31.03.2008 |
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SALES |
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Income |
7881.041 |
7853.400 |
4456.200 |
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Other Income |
56.633 |
43.700 |
49.100 |
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TOTAL (A) |
7937.674 |
7897.100 |
4505.300 |
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Less |
EXPENSES |
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Raw Materials |
4203.191 |
5376.200 |
3358.700 |
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Employee Cost |
0.000 |
212.600 |
127.200 |
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Advertising Expenses |
0.000 |
465.300 |
250.500 |
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Other Manufacturing Expenses |
1138.894 |
306.800 |
178.000 |
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Selling and Administration Expenses |
1854.127 |
623.400 |
387.800 |
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Miscellaneous Expenses |
0.000 |
78.200 |
14.500 |
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Extraordinary Items |
0.000 |
0.000 |
6.500 |
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Stock Adjustments |
(159.361) |
123.000 |
(41.200) |
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TOTAL (B) |
7036.851 |
7185.500 |
4282.000 |
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Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
900.823 |
711.600 |
229.800 |
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Less |
FINANCIAL
EXPENSES (D) |
165.211 |
237.600 |
113.300 |
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PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
735.612 |
474.000 |
116.500 |
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Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
77.766 |
84.500 |
36.200 |
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PROFIT BEFORE
TAX (E-F) (G) |
657.846 |
389.500 |
80.300 |
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Less |
TAX (H) |
141.500 |
89.300 |
23.900 |
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PROFIT AFTER TAX
(G-H) (I) |
516.346 |
300.200 |
56.400 |
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Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
20.590 |
16.900 |
3.800 |
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Less |
APPROPRIATIONS |
|
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|
P/L Balance Carried Down |
350.000 |
20.600 |
16.900 |
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Dividend |
85.214 |
39.800 |
19.900 |
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Earnings Per
Share (Rs.) |
15.15 |
5.74 |
-- |
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QUARTERLY
|
PARTICULARS |
31.12.2010 |
31.03.2011 |
30.06.2011 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
2151.360 |
2311.570 |
2249.470 |
|
Total Expenditure |
1927.940 |
2120.420 |
2090.370 |
|
PBIDT (Excl
OI) |
223.420 |
191.150 |
159.100 |
|
Other Income |
20.760 |
21.110 |
17.330 |
|
Operating
Profit |
244.180 |
212.260 |
176.430 |
|
Interest |
36.150 |
40.880 |
44.760 |
|
Exceptional
Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
208.030 |
171.380 |
131.670 |
|
Depreciation |
21.030 |
21.000 |
21.460 |
|
Profit
Before Tax |
187.000 |
150.380 |
110.220 |
|
Tax |
50.000 |
49.960 |
20.000 |
|
Reported PAT |
137.000 |
100.420 |
90.220 |
|
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 |
137.000 |
100.420 |
90.220 |
KEY RATIO
|
PARTICULARS |
|
30.09.2010 |
30.09.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
6.50 |
3.80
|
1.25 |
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Net Profit Margin (PBT/Sales) |
(%) |
8.34 |
4.96
|
1.80 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
14.61 |
8.74
|
2.49 |
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Return on Investment (ROI) (PBT/Networth) |
|
0.36 |
0.28
|
0.07 |
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|
Debt Equity Ratio (Total Liability/Networth) |
|
2.19 |
2.18
|
2.11 |
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|
Current Ratio (Current Asset/Current Liability) |
|
1.65 |
2.74
|
2.50 |
LOCAL AGENCY FURTHER INFORMATION
COMPANY HISTORY
Acquired by the Shaw Wallace group through its subsidiary
and associate companies in 1987, Falcon Tyres started operations in 1975. It
was running profitably till 1982, after which its performance suffered due to a
non-remunerative product-mix, outmoded technology and factors like recession in
the automobile industry, etc. Continuously incurring cash losses, the company
came under the purview of the BIFR. Shaw Wallace worked out a professional plan
soon after acquiring it. Dunlop
SUBSIDIARY:
During
the year Monotona Tyres Limited (MTL) become subsidiary of the Company. w.e.f.
21st of May’ 2010 where your Company holds 5.400 millions shares out of 7.200
millions shares i.e. 75% of the paid up and subscribed capital of the Company.
The synergy between the two Companies having similar kind of products will bore
fruitful results in the year to come.
Management Discussion and Analysis Report
The Indian tyre industry
growth in the current year has been fuelled by the growth in 2-3 wheeler
segment. The Indian tyre Industry with a total production number of 97.137
millions has grown up by 18% in comparison to previous period number of 82.107
millions. Out of the above Number, 2-3 wheeler tyre production number at 49.222
millions has grown by 20% in comparison to previous period number of 41.031
millions [Source: ATMA] Although, Indian 2-3 wheeler tyre industry has
consolidated to a great extent with 5 leading players controlling a large chunk
of the production capacity, the balance capacity is still fragmented.
After 2 years of low growth,
in 2009-10 the 2 and 3 wheeler industry has shown a remarkable growth. Early
recovery of the economy from the financial crisis and resurgence in domestic
demand aided by fiscal stimulus resulted in exceptional growth of 33% and 40% in
third and fourth quarters of 2009-10 respectively in 2 wheeler industry, resulting
in an annual growth rate of 24% for the year in 2 wheeler industry, which
helped tyre industry to substantially increase tyres production. 2-3 wheeler
Industry structure and Developments:
The Automotive sector was a
great beneficiary of the overall recovery during 2009-10 and registered a
healthy growth. Due to this 2-3 wheeler tyre industry also has shown a very
impressive growth of 20%. With buoyancy in 2-3 wheeler market, 2-3
wheeler tyre industry is expected to perform well. On the other hand Raw
Materials prices are a cause of concern with Natural Rubber prices continuously
increased due to short supply and prices reached to historical high of Rs. 200
per kg. Synthetic rubber and other input prices also witnessed a significant
increase.
Business Outlook And Overview
Year 2009-10 has witnessed
extraordinary demand for products of the Company and industry due to higher 2-3
wheeler production and increased demand from replacement market. Driven by
economical improvements and around 30 % year on year growth by OEMs in new
Vehicle manufacturing, the 2-3 wheeler tyre market has witnessed tremendous
demand for products and this has generated need of expansion and increased
productivity for all tyres Companies.
The increased 2-3 Vehicle
Population will lead to much higher Tyres demand from replacement markets and
it is
much likely that all 2-3 tyres
Companies are expected to do well.
Company Performance
Domestic Segment
In motorcycle category, the
Company achieved a sales growth of 26.1% during 2009-10. Sales in the
replacement segment grew by an impressive 45.6% and in OE segment it grew by
12.8%. The Company has launched the Challenger series of “High End Tyres”,
which is expected to contribute significantly in the coming years. Overall
growth in the Domestic segment is very impressive.
Export Segment
During the year, the Company has
Directly/ Indirectly sold 0.381 millions tyres in comparison to 0.506 millions
tyres sold during the last period. Although there is slight decline in volume,
the same is because of very high demand in Domestic Segment.
Growth in two-wheeler demand is
mainly coming from youth and lower middle class population. Urbanization of
smaller town also fuels the demand in 2-3 wheeler segment. Smaller towns are
expected to contribute significantly to the Segment. The Company has
tested few Radial Tyres also during the last year and the responses to the same
are positive.
Moreover the challenger series
of Tyres has also got very good response. High inflation and rising Interest
cost is always a threat to the Industry. Another threat to the industry is the
volatility in the prices of Raw Materials specially Natural Rubber. Low cost
tyre import from
Operation Review
Operational Performance:
The production of Tyres and
Tubes at 37660 MT in the current year (12 months) was highest ever in the
history of the Company. On an annualized basis production has increased by
about 28% in comparison to last period (18 months) production of 43967 MT of
tyres and tubes.
Financial Performance:
The Company achieved a turnover
of Rs.8443.500 millions for the year ended 30th September 2010, as against
previous period (18 months) turnover of Rs. 8514.600 millions with an
annualized increase of 49%. These results were achieved despite severe
competition in the Industry. The PBT for the year at Rs. 657.800 millions was
highest ever as against previous period (18 months) PBT of Rs. 389.500
millions.
FIXED ASSETS : · Land
· Buildings
· Plant and Machinery
· Computers
· Electrical installation
· Office and Lab Equipments
· Furniture and Fixtures
· Vehicles
· Low Value Assets
· Technical Know – how
WEBSITE DETAILS:
PROFILE :
Subject, Located in
Falcon Manufactures and markets a
wide range of nylon bias ply tyres and butyl tubes for two and three wheelers,
passenger cars , jeeps , light commercial and farm vehicles under the DUNLOP
brand in Indian market and Falcon and Donin brands for export markets . In the
two and three wheeler category, the company offers an unmatched choice of patterns
and design constructions, catering to the different needs of its customers.
Falcon is the preferred choice of
leading vehicle manufactures in
The company has entered into a
Technical Aid Agreement with Sumitomo Rubber Industries Limited of
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. 49.08 |
|
|
1 |
Rs. 78.65 |
|
Euro |
1 |
Rs. 67.79 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
60 |
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.