MIRA
INFORM REPORT
|
Report Date : |
22.11.2011 |
IDENTIFICATION DETAILS
|
Name : |
JAMNA AUTO INDUSTRIES LIMITED |
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Registered
Office : |
Jai Spring Road Industrial Area, Yamuna Nagar – 135001, Haryana |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
30.09.1965 |
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Com. Reg. No.: |
004485 |
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Capital Investment
/ Paid-up Capital : |
Rs.427.911 Millions |
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|
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CIN No.: [Company Identification
No.] |
L35911HR1965PLC004485 |
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|
TAN No.: [Tax Deduction &
Collection Account No.] |
RTKJ01251F/ RTKJ01900D |
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PAN No.: [Permanent Account No.] |
AAACJ39999 |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. These are not traded since April 2005 till March 2006. Again, it has been traded on the Stock Exchange in 2007. |
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Line of Business
: |
Manufacturer of Auto Parabolics / Tapered Leaf Springs,
Railways (Spares and Loose Leaves), Agricultural Implements and Auto
Stabilizer bars. |
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|
|
No. of Employees
: |
500 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
B (30) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Maximum Credit Limit : |
USD 5000000 |
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|
Status : |
Moderate |
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Payment Behaviour : |
Slow |
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Litigation : |
Exist |
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Comments : |
Subject is an established company having moderate track. There appears
some accumulated losses recorded by the company. However, trade relations are
reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some
cautions. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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|
A1 |
A1 |
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Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office/ Factory 1 : |
Jai Spring Road, Industrial Area, Yamuna Nagar – 135001, Haryana,
India |
|
Tel. No.: |
91-1732-251810/ 11/ 12/ 14 |
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Fax No.: |
91-1732-251820/ 251443 |
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E-Mail : |
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Website : |
http://www.jaispring.org |
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Corporate Office : |
No.2, |
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Tel. No.: |
91-11-32566685/ 26893331/ 26896960 |
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Fax No.: |
91-11-26893192/ 26893180 |
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|
|
|
Factory 2: |
U: 27-29, Industrial Area, Malanpur, District Bhind - 477116, Madhya
Pradesh, India |
|
Tel No.: |
91-7539-283396/ 409117 |
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Fax No.: |
91-7539-283395 |
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Email : |
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Factory 3: |
Plot no. 22-25, Sengundram Village, Maraimalai Nagar Industrial Complex,
Singaperumal Koil Post, Distt. Kanchipuram- 603 204, Tamilnadu, India |
|
Tel No.: |
91-44-27463800/ 27464346/ 348 |
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Fax No.: |
91-44-27464352 |
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Email : |
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Factory 4: |
Plot No. 263, Karnidh, Chandil, District Saraikella - Kharswan –
832401, Jharkhand, India |
|
Tel No.: |
91-657-2940671 |
|
Email : |
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|
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Factory 5: |
Gata No. 1490, Khajoor
Gaon, Chinhat- Deva Road, District Barabanki –225003, Uttar Pradesh, India |
DIRECTORS
(AS ON 31.03.2011)
|
Name : |
Mr. Bhupinder Singh Jauhar |
|
Designation : |
Chairman and Managing Director |
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|
Name : |
Mr. Randeep Singh Jauhar |
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Designation : |
Executive Director |
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|
Name : |
Mr. Pradeep Singh Jauhar |
|
Designation : |
Executive Director |
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|
Name : |
Mr. Robert Dean Petty |
|
Designation : |
Nominee Director – Clearwater Capital Partners India Private Limited |
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|
Name : |
Dr. Pierre Jean Everaert |
|
Designation : |
Nominee Director – Clearwater Capital Partners (Cyprus) limited |
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|
Name : |
Mr. Janender Kumasr Jain |
|
Designation : |
Nominee Director – ICICI Bank
Limited |
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|
Name : |
Mr. Dileep Kumar Jain |
|
Designation : |
Nominee Director – IFCI Limited |
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|
Name : |
Mr. Seth Ashok Kumar |
|
Designation : |
Director |
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|
Name : |
Mr. Uma Kant Singhal |
|
Designation : |
Director |
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|
Name : |
Mr. Chander Kailash Vohra |
|
Designation : |
Director |
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|
Name : |
Mr. Shashi Bansal |
|
Designation : |
Director |
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Name : |
Mr. S. P. S. Kohli |
|
Designation : |
Executive Director |
KEY EXECUTIVES
|
Name : |
Mr. Randeep Singh Jauhar |
|
Designation : |
Chief Executive Officer |
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Name : |
Mr. Pradeep Singh Jauhar |
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Designation : |
Chief Operating Officer |
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Name : |
Mr. S. P. S. Kohli |
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Designation : |
President |
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|
Name : |
Mr. Praveen Lakhera |
|
Designation : |
Company Secretary and Head Legal |
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|
Name : |
Mr. Shakti Goyal |
|
Designation : |
General Manager – Finance |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.09.2011)
|
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
4,408,893 |
11.20 |
|
|
13,000,937 |
33.03 |
|
|
17,409,830 |
44.23 |
|
|
|
|
|
|
|
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|
Total
shareholding of Promoter and Promoter Group (A) |
17,409,830 |
44.23 |
|
|
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|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
24,250 |
0.06 |
|
|
6,650 |
0.02 |
|
|
303,569 |
0.77 |
|
|
334,469 |
0.85 |
|
|
|
|
|
|
|
|
|
|
1,796,975 |
4.56 |
|
|
|
|
|
|
|
|
|
|
3,288,649 |
8.35 |
|
|
2,893,107 |
7.35 |
|
|
|
|
|
|
13,641,606 |
34.65 |
|
|
139,953 |
0.36 |
|
|
13,501,653 |
34.30 |
|
|
21,620,337 |
54.92 |
|
|
|
|
|
Total Public
shareholding (B) |
21,954,806 |
55.77 |
|
|
|
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|
Total (A)+(B) |
39,364,636 |
100.00 |
|
|
|
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|
(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
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|
- |
- |
|
|
- |
- |
|
|
|
|
|
Total
(A)+(B)+(C) |
39,364,636 |
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 Auto Parabolics / Tapered Leaf Springs,
Railways (Spares and Loose Leaves), Agricultural Implements and Auto
Stabilizer bars. |
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Products : |
|
PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Capacity Installed |
|
|
|
|
Auto Parabolic /Tapered Leaf Spring/Loose Leaves (MT) |
180000 |
|
Railway (Spare & Loose Leaves) |
2400 |
|
Agriculture Implements |
1000 |
|
|
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Particulars |
Unit |
Actual Production |
|
|
|
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|
Spring & Spring Leaves |
MT |
126857.876 |
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GENERAL INFORMATION
|
No. of Employees : |
500 (Approximately) |
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Bankers : |
·
State Bank of ·
ICICI Bank Limited ·
Kotak Mahindra Bank ·
Standard Chartered Bank ·
Indusind Bank Limited ·
Lakshmi Vilas Bank |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
Goel Garg and Company Chartered Accountants |
|
Address : |
New Delhi, India |
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|
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Name : |
ASG and Associates Chartered Accountants |
|
Address : |
New Delhi, India |
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Name : |
A. K. Kalla and Associates Chartered Accountant |
|
Address : |
Chandigarh, India |
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|
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Legal Asvisors : |
· AZB and partners · Lakshmi Kumaran and Sridharan |
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Technical
Assistance : |
Ridewell Corporation, USA |
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Joint Ventures Partners : |
NHK Spring Company Limited, Japan (NHK Spring India Limited) |
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Related Parties : |
· Jamna Agro Implements Private Limited · S.W. Farms Private Limited · MAP Auto Limited · Jai Suspension Systems Limited · Jai Suspension Systems LLP · Winthrop Marketing |
CAPITAL STRUCTURE
(AS ON 31.08.2011)
Authorised Capital : Rs.673.865 Millions
Issued, Subscribed & Paid-up Capital : Rs.428.936 Millions
(AS ON 31.03.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
63886500 |
Equity Shares |
Rs.10/- each |
Rs.638.865 Millions |
|
350000 |
12.50% Optionally Convertible Cumulative Preference Shares |
Rs.100/- each |
Rs.35.000 Millions |
|
|
|
|
|
|
|
Total |
|
Rs.673.865
Millions |
Issued & Subscribed Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
39319912 |
Equity Shares |
Rs.10/- each |
Rs.393.199 Millions |
|
350000 |
12.50% Optionally Convertible Cumulative Preference Shares |
Rs.100/- each |
Rs.35.000
Millions |
|
|
|
|
|
|
|
Total |
|
Rs.428.199 Millions |
Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
39291722 |
Equity Shares |
Rs.10/- each |
Rs.392.918 Millions |
|
|
Add: Forfeited Shares |
|
Rs.0.145
Million |
|
|
Less: Calls in Arrears |
|
Rs.0.152
Million |
|
350000 |
12.50% Optionally Convertible Cumulative Preference Shares |
Rs.100/- each |
Rs.35.000
Millions |
|
|
|
|
|
|
|
Total |
|
Rs.427.911 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
427.911 |
400.360 |
400.291 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1106.600 |
836.998 |
836.855 |
|
|
4] (Accumulated Losses) |
(190.958) |
(487.831) |
(565.577) |
|
|
NETWORTH |
1343.553 |
749.527 |
671.569 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
470.344 |
924.575 |
1382.198 |
|
|
2] Unsecured Loans |
185.971 |
224.993 |
229.616 |
|
|
TOTAL BORROWING |
656.315 |
1149.568 |
1611.814 |
|
|
DEFERRED TAX LIABILITIES |
22.877 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
1022.745 |
1899.095 |
2283.383 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1526.086 |
1410.472 |
965.358 |
|
|
Capital work-in-progress |
419.163 |
214.976 |
559.900 |
|
|
|
|
|
|
|
|
INVESTMENT |
264.276 |
72.198 |
72.199 |
|
|
DEFERREX TAX ASSETS |
0.000 |
103.025 |
158.699 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
860.573
|
681.676 |
587.672 |
|
|
Sundry Debtors |
734.439
|
532.749 |
646.353 |
|
|
Cash & Bank Balances |
121.589
|
146.784 |
130.077 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
233.944
|
229.355 |
174.874 |
|
Total
Current Assets |
1950.545
|
1590.564 |
1538.976 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
2079.402
|
1618.108 |
1056.816 |
|
|
Other Current Liabilities |
106.331
|
125.710 |
165.043 |
|
|
Provisions |
125.621
|
19.522 |
23.885 |
|
Total
Current Liabilities |
2311.354
|
1763.340 |
1245.744 |
|
|
Net Current Assets |
(360.809)
|
(172.776) |
293.232 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
174.029 |
271.200 |
233.995 |
|
|
|
|
|
|
|
|
TOTAL |
1022.745 |
1899.095 |
2283.383 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
8103.306 |
5576.060 |
4524.530 |
|
|
|
Other Income |
278.420 |
174.614 |
79.558 |
|
|
|
TOTAL (A) |
8381.726 |
5750.674 |
4604.088 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Material, Manufacturing and Operating |
6642.955 |
4479.100 |
3680.176 |
|
|
|
Payment to and Provisions for Employees |
386.992 |
266.563 |
215.593 |
|
|
|
Selling and Administrative Expenses |
336.436 |
220.440 |
314.560 |
|
|
|
Increase /(Decrease) in stocks |
12.722 |
71.300 |
68.314 |
|
|
|
Preliminary/ Deferred Revenue Expenses
Written off |
97.171 |
105.335 |
79.997 |
|
|
|
Exceptional Items (Gains)/ Loss |
(71.859) |
(3.588) |
0.000 |
|
|
|
TOTAL (B) |
7404.417 |
5139.150 |
4358.640 |
|
|
|
|
|
|
|
|
Less |
PROFIT/
(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
977.309 |
611.524 |
245.448 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
203.482 |
256.234 |
354.817 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)
(E) |
773.827 |
355.290 |
(109.369) |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
221.301 |
140.663 |
94.057 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
BEFORE TAX (E-F) (G) |
552.526 |
214.627 |
(203.426) |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
126.002 |
55.751 |
(39.478) |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
AFTER TAX (G-H) (I) |
426.524 |
158.876 |
(163.948) |
|
|
|
|
|
|
|
|
|
|
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
(487.830) |
(565.577) |
(330.986) |
|
|
|
|
|
|
|
|
|
Less |
Income
Tax Paid for Earlier Years / Adjustments |
2.517 |
1.871 |
0.000 |
|
|
|
Add:
Deduct Prior Period Year’s Expenses/ (Income) (Net) |
(0.809) |
79.258 |
70.643 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
43.000 |
0.000 |
0.000 |
|
|
|
Interim Dividend |
39.276 |
0.000 |
0.000 |
|
|
|
Proposed Dividend |
39.292 |
0.000 |
0.000 |
|
|
|
Tax on Proposed Dividend |
6.374 |
0.000 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
(190.956) |
(487.830) |
(565.577) |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
88.348 |
51.985 |
25.614 |
|
|
|
|
|
|
|
|
|
|
IMPORT VALUE |
278.135 |
490.135 |
1026.522 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
11.12 |
2.13 |
(4.69) |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2011 |
30.09.2011 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Net Sales |
|
2100.800 |
2218.200 |
|
Total Expenditure |
|
1923.800 |
2092.500 |
|
PBIDT (Excl OI) |
|
177.000 |
125.700 |
|
Other Income |
|
31.400 |
180.600 |
|
Operating Profit |
|
208.400 |
306.300 |
|
Interest |
|
39.300 |
29.100 |
|
Exceptional Items |
|
(19.400) |
(0.500) |
|
PBDT |
|
149.700 |
276.700 |
|
Depreciation |
|
61.200 |
60.200 |
|
Profit Before Tax |
|
88.500 |
216.500 |
|
Tax |
|
28.100 |
16.400 |
|
Provisions and contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
60.500 |
200.100 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
(1.100) |
(22.800) |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
59.400 |
177.300 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
5.09
|
2.76 |
(3.56) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
0.65
|
3.85 |
(4.50) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
15.89
|
7.15 |
(8.12) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.41
|
0.29 |
(0.30) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.21
|
3.89 |
4.26 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.84
|
0.90 |
1.24 |
LOCAL AGENCY FURTHER INFORMATION
CASE
STATUS INFORMATION SYSTEMS
PUNJAB
AND HARYANA HIGH COURT
SEARCH
RESULT FOR PARTY: JAMNA AUTO AND YEAR IS: 2009
Total No. of
Results found: 2
|
|
Case Type |
Case Number |
Case Year |
Petitioner |
Respondent |
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|
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|
Select |
CA |
174 |
2009 |
Suprabha
Protective Products Private Limited |
Jamna Auto
Industries Limited |
|
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|
|
|
|
|
|
Select |
CP |
38 |
2009 |
Suprabha
Protective Products Private Limited |
Jamna Auto
Industries Limited |
|
Case Status: |
PENDING |
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Status of: |
Company Petitions |
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Case No.: |
38 |
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|
Year : |
2009 |
|||||||||
|
Petitioner |
Suprabha Protective Products Private Limited |
|||||||||
|
Respondent |
Jamna Auto Industries Limited |
|||||||||
|
Pet’s Advocate |
Manjeet Singh, Deepak Sur |
|||||||||
|
Res’s Advocate |
|
|||||||||
|
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Next Date of
hearing: December 15, 2011 |
|||||||||
|
Category |
Company Petitions |
|||||||||
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Last Listed on:
September 23, 2011 |
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Case Updated on: |
September 26, 2011 |
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No Connected Applications |
Connected
Matters
|
|
Case Status: |
PENDING |
|
|
|
|
Status of: |
Civil Appeal/ Company Applications |
|
Case No.: |
174 |
|
Year : |
2009 |
|
Petitioner |
Suprabha Protective Products Private Limited |
|
Respondent |
Jamna Auto Industries Limited |
|
Pet’s Advocate |
Manjeet Singh |
|
Res’s Advocate |
|
|
|
|
|
Category |
No Category Mentioned |
|
|
Last Listed on:
No Date Mentioned |
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|
Case Updated on: |
March 4, 2009 |
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|
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|
No Connected Applications |
No Connected Matters |
------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
The company recorded its highest turnover during the F.Y.2010-11 and maintained its leadership position in the leaf spring industry. Consolidated sale during the year under review was Rs.9980.000 Millions as against Rs.6610.000 Millions during the F.Y. 2009-10. Consolidated net profit for the F.Y. 2010-11 is Rs.370.000 Millions as compared to Rs.190.000 Millions during the F.Y. 2009-10.
During the year the company made preferential issue of 2631578 equity shares to Clearwater Capital Partners Singapore Fund III Private Limited and the promoters. The entire preferential issue proceed of Rs.250.000 Millions was utilized to prepay high cost term loans. This along with ploughing back of profits has reduced the total debt of the company from Rs.1190.000 Millions as on 31 March 2010, to Rs.660.000 Millions as on 31 March 2011. The company brought down its finance cost to 2% of sales against 4% of sales during F.Y. 2009-10. During the year, debt reduction improved debt/equity ratio from 1.45 to 0.50 and also brought down the breakeven point. The company is committed to improve the shareholders wealth by improving its margins and return on capital employed from current level of 44% and emerge financially strong to enable it to withstand any future shock of recessionary or slowdown trend in the economy.
Increase in prices of raw material, power and oil and other commodities had put pressure on the margins. However, the company improved efficiency in its operation with value addition and higher sales, reduced finance cost. Consolidated PBT increased from Rs.250.000 Millions to Rs.550.000 Millions and consolidated PAT increased from Rs.190.000 Millions to Rs.370.000 Millions. Inflationary trends continue to cause worries which have led to hardening of interest rates and are bound to leave its impact on the overall growth of the economy. The GDP growth forecast of 8-9% during 2011-12 onwards may not be sustainable if inflation is not controlled. Hike in oil prices will also have its impact in the overall growth.
The company is improving efficiency in its operation to contain cost and has gone for energy efficient equipment as part of its expansion and technology up gradation.
The company shared its earnings with the shareholders and paid an interim dividend of Rs.1 per equity share during the F.Y.2010-11 and also proposing to pay final dividend of Rs.1 per equity share.
During the year under review, the company’s wholly owned subsidiary i.e. Jai Suspension Systems Limited was converted into a Limited Liability Partnership Firm. The company is the majority partner in the partnership firm having 99.9975% share.
MANAGEMENT
DISCUSSION AND ANALYSIS
THE COMPANY’S PERCEPTION ABOUT THE INDUSTRY SCENARIO
The company’s
fortune is linked with the commercial vehicle (CV) segment. It is a market
leader in leaf and parabolic springs for all the major Indian OEMs and has 66%
market share in India. Commercial vehicle segment is highly susceptible to
upward or downward swings in the economy. If the economy does well, the CV
segment clocks good growth. If there is slight hint of slowdown, it adversely
affects the segment and has a cascading effect on those who are solely
dependent on supply to OEMs. The past two years, i.e. 2009-10 and 2010-11 have
been very favorable for the CV segment which is evident from company’s
performance as well. However, the effect of inflationary pressures in the
Indian economy is already being felt as the recent policy decisions of the
Reserve Bank of India to combat inflation have led to hardening of interest
rates. However, new models from existing customers and new customers are with
Jai. These developments are likely to have impact in the CV segment and we feel
that the trend and growth of past years may not be sustainable in the current
year. The industry expects the pace in 2011-12 to be far lower due to the
challenges of rising commodity prices, increase in energy cost, rising interest
rates.
THE INDIAN
AUTOMOBILE SECTOR, PARTICULARLY COMMERCIAL VEHICLES, PERFORMED IN 2010-11
Automobile sales
in India grew at record levels in the financial year ended 31 March 2011. The
Indian CVs market had shown remarkable growth in the last couple of years due
to improving economic environment, growth in export and expansion of motorways
and logistic systems. According to Society of Indian Automobile Manufacturers
(SIAM), overall commercial vehicles segment registered growth of 26.97% during
April-March 2011 as compared to the same period last year. While medium and
heavy commercial vehicles (M and HCVs) registered the highest growth of 31.78%,
light commercial vehicles grew at 22.88%, as per SIAM data. In the overall
spring demand scenario, share of medium and heavy CVs in springs is 66%.
|
Category |
2008-09 |
2009-10 |
2010-11 |
Growth |
|
|
|
|
|
|
|
Medium and Heavy CVs |
192380 |
248977 |
344115 |
38% |
|
Light CVs |
111247 |
159742 |
222278 |
39% |
THE COMPANY
PERCEIVE THE INDUSTRY’S DEMAND OUTLOOK FOR 2011-12 ONWARDS
Demand for trucks
and commercial vehicles is linked to the economic activity which is showing
signs of growth constraint.
Tightening
liquidity is a key negative for the commercial vehicles demand since increase
in interest rates impacts demand for commercial vehicles. Nearly 98% of truck
sales in India are dependent on bank funding. Decelerating Index of Industrial
Production (IIP) growth also indicates that truck demand might slow down.
Historically seen, growth in truck sales is highly correlated to growth in IIP.
Given the high inflation-high interest rate scenario, it is widely believed
that the IIP growth is likely to stay subdued in the near term.
Rising inflation
explicitly affects consumption and therefore the freight availability and
demand for CVs. Historically, this negative correlation has been witnessed in
the past. Recent hike in diesel prices is also going to affect the CV demand.
Diesel accounts for more than half of the operating costs for fleet operators.
Unlike last year, fleet operators may not be able to pass on the diesel hike as
freight volumes are weak and this may adversely impact their ability to buy new
trucks.
Near term demand
outlook for medium and heavy trucks appears to be sluggish. Bus demand, which
had been fuelled by the government-led JNNURM scheme, also appears to be
tapering off. However, if the infrastructure expending goes up or over loading
is banned this will boost up the demand.
THE SHORT TERM AND
LONG TERM OUTLOOK OF THE COMPANY
Subject has
undertaken various initiatives aimed at enhancing operational and cost
efficiencies across various facets of its operations.
The company is committed
to maximize shareholders’ values by emerging financially strong to insulate
itself from any adverse impact in the economy. In the long run, its endeavour
will be to ensure that its net worth equals net block.
The company is
currently focused on expanding its operations and taking the business through
an expanding product line and markets, multi location, capacity expansion,
technology up gradation and distribution network. Continuous expansion of its
product mix is also advantageous to the company, which is all set to diversify
into air suspensions, life axles and bogey suspensions.
The company has
set up a plant in Lucknow and has initiated capacity expansion at Yamuna Nagar
and Malanpur to cater to the increasing demand for parabolic springs. Jamshedpur
plant which began assembly operation in 2009-10 became a full-fledged
manufacturing plant in 2010-11. It also acquired land at Chennai and Hosur to
meet the growing demand from leading and new entrants in the OEM sector. The
Chennai Plant will manufacture Air Suspension and Lift Axles while Hosur Plant
is being set up for leaf and parabolic springs. Both these Plants will be
operational from early 2012. Jamshedpur plant which began assembly operation in
2009-10 became a full-fledged manufacturing plant in 2010-11.
Subject is
continuously striving for market diversification in an effort to strategically
extend OEM supplies to its key clients located across India. After Market
demand would continue to fuel non-cyclical demand for auto-component companies.
After Market demand trajectory would follow an increasing trend due to the
robust CAGR in India’s auto sales over past few years. The company has over
1100 dealer network which is being further strengthened to widen its footprints
in the segment.
THE DE-RISKING
STRATEGY OF THE COMPANY
Since the
company’s major sales are to the OEMs, any adverse economic condition could
impact CV segment. To counter such adverse industry scenarios, the company has
been aggressively trying to increase its presence in the domestic and overseas
After Markets and also OEM exports. The company’s goal is to bring down revenue
contribution of OEMs from the present 90% to 70% and increase penetration in
domestic and export After Market and OEM exports. The company continues to
build on its multi-location and multi-product offerings and the goal is to
bring down the share of revenue of Leaf Spring to 65%. JAI’s wide distribution
and strategic locations gives it logistic advantage and competitive edge in the
growing domestic After Market. Going ahead, the overseas After Market is also
expected to further help the company de-risk its business. The company has
invested heavily in technology to drive competitive edge in the market place.
The ongoing R and D initiatives enable it to stay ahead of the demand curve and
adapt to the evolving market scenario and demand.
THE INTERNAL
CONTROLS IN THE COMPANY
The company places
strong emphasis on best practices in corporate governance. SAP has been
implemented in its Corporate Office and two main Plants (Malanpur and Chennai).
The company has put in strong internal controls with proper schedule of
authority. Besides an external Internal Auditor, the company has an independent
Internal Audit Department which constantly reviews accounting, legal, safety
and environment compliances.
CONTINGENT LIABILITIES NOT PROVIDED IN RESPECT OF
|
Particulars |
31.03.2011 |
31.03.2010 |
|
|
(Rs. In
Millions) |
|
|
Demands against the company not acknowledged as debts. |
4.942 |
9.256 |
|
Claim pending against the company not acknowledged as debts. |
11.645 |
5.519 |
|
Import machinery under EPCG Scheme |
28.832 |
28.058 |
|
Bank Guarantees |
0.650 |
0.650 |
FIXED ASSETS:
· Goodwill
· Land
· Building
· Plant and Machinery
· Furniture and Fixtures
· Vehicles
· Office Equipment
· Other assets
· Computer and Software
WEBSITE DETAILS:
PROFILE:
Mr. Bhupinder Singh Jauhar is the spirit behind the Jamna Group. He started the spring business in 1954 in a small shop in Yamuna Nagar which has now acquired global recognition as the fifth largest producer of Leaf and Parabolic Springs. He is also actively associated with leading educational institutions in Yamuna Nagar and Charitable organizations across the Globe. Mr. Jauhar is currently non executive Chairman of the board of directors of the company and is Chief Mentor of the Group.
Jamna’s four state of the art manufacturing facilities are located at Yamuna Nagar, Malanpur (near Gwalior), Chennai and Jamshedpur. Its wholly owned subsidiary, Jai Suspension Systems LLP (JSSLLP) has a plant at Pant Nagar in Uttarakhand.
Briefly:
· Subject’s state-of-the-art manufacturing facilities are certified by TS 16949 and equipped with the latest CNC Parabolic Rolling Machines and Unmanned Heat Treatment Lines to ensure world class quality.
· Improvised Steel Grades developed combined with Stringent Heat Treatment and Stress Shot Peening results in higher fatigue life of the product.
· The dedicated and highly trained R and D team has won appreciation from CV manufacturers for aiding them in design modification and value engineering in Leaf and Parabolic Springs which enhance the vehicles’ load bearing capacity and overall efficiency. The R and D team, equipped with the latest CAD and customized software, collaborate with the CV manufacturers to bring designs improvement and value engineering to CV manufacturers for existing and new Suspension Systems.
· In-house validation and testing of products using Servo Actuator to simulate actual vehicle conditions.
BUSINESS DESCRIPTION
Subject is an India –based company engaged in the manufacturing of
parabolic/ tapered leaf spring for commercial vehicles. The company’s products
includes suspension products, multi-leaf springs and parabolic springs.
The Company has its production facilities in India. It manufactures multi-leaf
springs ranging from 3 kilograms to 200 kilograms. The Company’s four
manufacturing facilities are located at Yamuna Nagar, Malanpur (near Gwalior),
Chennai and Jamshedpur. For the nine months ended 31 December 2010, Jamna Auto
Industries Ltd's revenues increased 54% to RS6.36B. Net income totaled
RS251.6M, up from RS110.9M. Revenues reflect an increase in income from
operations. Net income also reflects decrease in interest expenses and increase
in gross profit margin. Subject principal activity is to manufacture and market
motor vehicle parts, Parabolic and Tapered springs.
BOARD OF DIRECTORS:
Mr. Bhupinder Singh
Jauhar
Mr. Bhupinder Singh Jauhar is Non-Executive Chairman of the Board of Subject Mr. Jauhar has promoted JAI and is having experience of more than 55 years in engineering and auto component industry especially in the area of automobile suspension system.
Mr. Shashi Bansal
Mr. Shashi Bansal is Non-Executive Independent Director of
Subject. He is Bachelor of Engineering and having more that 40 years of
experience at various positions.
Mr. Pradeep Singh
Jauhar
Mr. Pradeep Singh Jauhar is Chief Operating Officer, Executive Director of Subject. He is one of the promoters of subject. He is a commerce graduate and is having an experience of more than 22 years in the spring industry. His has experience of the industry and deep knowledge of manufacturing of suspension systems.
Mr. Seth Ashok Kumar
Mr. Seth Ashok Kumar is Non-Executive Independent Director of Subject. Seth Ashok Kumar is Chairman of Indo Continental Hotels and Resorts Limited (Mansingh Group of Hotels). He has 50 years of experience in promoting and managing industrial and commercial enterprises. He is also a member on the Board of Directors of various companies. His re-appointment in the Board of Directors will be as an Independent Director.
Mr. Uma Kant Singhal
Mr. Uma Kant Singhal is Non-Executive Independent Director of Subject. Mr. Singhal is a Law Graduate. He has been in practice as corporate law advocate and having experience of more than 40 years in corporate law matters. He does not hold any shares in company.
Mr. Chander Kailash
Vohra
Mr. Chander Kailash Vohra is Non-Executive Independent Director of Subject. Mr. Vohra is a member of ICSI, ICWA, a Law Graduate and Master of Business Administration. He has retired from the Indian Revenue Services as Chief Commissioner of Income-Tax. During his tenure in Indian Revenue Services he has worked on various positions and also worked in Department of Expenditure in Ministry of Finance and Ministry of Tourism and Civil Aviation. He does not hold any shares in company.
NEWS:
Jamna
Auto Industries Limited To Consider Purchase of Land
Aug
30, 2011
Jamna Auto Industries Limited announced that a meeting of the Board of
Directors of the Company will be held on September 03, 2011, to consider
purchase of land for expansion at Yamuna Nagar unit of the Company.
Jamna
Auto Industries Limited Announces Dividend Payment Date
Aug
03, 2011
Jamna Auto Industries Limited announced that the interim dividend shall
be paid / dispatched on August 30, 2011.
Jamna
Auto Industries Limited Declares Interim Dividend
Aug
01, 2011
Jamna Auto Industries Limited announced that the Board of Directors of the
Company at its meeting held on August 01, 2011, inter alia, have approved the
payment of interim dividend at INR1 on equity shares of INR10 each for the
financial year 2011-2012.
Jamna
Auto Industries Limited Recommends Dividend
Jul
11, 2011
Jamna Auto Industries Limited announced that the Board of Directors of the
Company at its meeting held on July 11, 2011, has recommended dividend of INR1 on
equity share, subject to approval by the shareholders. Dividend is in addition
to interim dividend of INR1 declared and paid.
Jamna
Auto Industries Limited to Set Up Two New Manufacturing Facilities At Hosur And
Chennai For Suspension System for Commercial Vehicles
Mar
07, 2011
Jamna Auto Industries Limited announced its plans to set up two new
manufacturing units for parabolic springs and air-suspension springs for
commercial vehicles at Hosur and Chennai. The Hosur facility is being set up to
manufacture parabolic springs and the plant is expected to go on-stream in
December 2011. The Hosur facility will have annual capacity of 36,000 MTs.
Jamna Auto has gone for major capacity expansion for parabolic springs to meet
the demand of major commercial vehicle manufacturers - Daimler India,
Renault-Nissan, Leyland-Nissan and Ashok Leyland. Tata Motors Limited
requirement of parabolic springs is being met from the Company's Malanpur
plant. The Greenfield plant at Chennai will manufacture Air suspension, bogey
suspension and lift axles. The air suspensions will be made in technical
collaboration with Ridewell Corporation, a suspension manufacturers in USA. The
Company has already acquired the land near Chennai and prototypes developed are
undergoing rigorous trial. Air suspensions are being increasingly used in low
floor buses. The commercial production is expected to commence from July 2011
onwards. Both the plants are being set up at a project cost of Rs.800.000
Millions.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject are
derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.51.35 |
|
|
1 |
Rs.80.97 |
|
Euro |
1 |
Rs.69.26 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
2 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
30 |
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.