MIRA
INFORM REPORT
|
Report Date : |
24.08.2013 |
IDENTIFICATION DETAILS
|
Name : |
CENTUM ELECTRONICS LIMITED |
|
|
|
|
Registered
Office : |
44, KHB Industrial Area, Yelahanka, Bangalore – 560064, Karnataka |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2013 |
|
|
|
|
Date of
Incorporation : |
08.01.1993 |
|
|
|
|
Com. Reg. No.: |
08-013869 |
|
|
|
|
Capital Investment
/ Paid-up Capital : |
Rs.123.652
Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L85110KA1993PLC013869 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
BLRC00813B |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACC7369P |
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|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
|
|
|
|
Line of Business
: |
The Company is
primarily involved in • Manufacture of
Advanced Microelectronics Modules and Resistor Networks catering to the
communications, military, aerospace and industrial electronics markets; and • Manufacture of
printed circuit board assembly (PCBA) and Repair and Return business catering
to the automobile, communications and industrial electronics markets. |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (54) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 2600000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
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|
|
|
Litigation : |
Clear |
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|
|
Comments : |
Subject is a part of the Centum Group. It is a well established
company having good track record. Trade relations are reported as trustworthy. Business is active.
Payments are reported to be regular and as per commitments. The company can be considered good 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 – March 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
We are living in a
world where volatility and uncertainty have become the New Normal. We saw a
change of government in countries like Tunisia, Egypt, Libya and Vietnam. Once
powerful countries in Europe are now fighting for bankruptcy. We have
taken growth in the developing part of the world for granted but economic
growth in China and India has begun to slow. Companies that were synonymous
with their product categories just a few years ago are now no longer in
existence. Kodak, the inventor of the digital camera had to wind up its
operations, HMV, the British entertainment retailing company and Borders, once
the second largest bookstore have shut down due to their inability to evolve
their business models with the changing time. Readers’ Digest, Thomson Register
are no more !
There is another
megatrend happening. The World order is changing as economic power shifts from
West to East. According to McKinsey study, it took Britain more than 100 years
to double its economic output per person during its industrial revolution and
the US later took more than 50 years to do the same. More than a century later,
China and India have doubled their GDP per capital in 12 and 18 years
respectively. By 2020, emerging Asia will become the world’s largest consuming
block, overtaking North America.
The years after the
outbreak of the global financial crisis, the world economy continues to remain
fragile. The Indian economy demonstrated remarkable resilience in the initial
years of the contagion but finally lost ground last year. GDP growth slowed
down. Currency has been weakening. There is a marked deceleration in agriculture,
industry and services. Dampening sentiment led to a cut-back in investment as
well as private consumption expenditure. Inflation remained at high
levels fuelled by the pressure from the food and fuel sectors. The large fiscal
and current account deficit s continued to cause grave concern. It is
imperative that India regains its growth trajectory of 8-9 % sooner than later.
This is crucially important given the need to create gainful livelihood
opportunities for the millions living in poverty as also the large contingent
of young people joining the job market every year.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CRISIL |
|
Rating |
BBB+ (Long Term Rating) |
|
Rating Explanation |
Moderate degree of safety and moderate credit risk. |
|
Date |
27.09.2012 |
|
Rating Agency Name |
CRISIL |
|
Rating |
A2 (Short Term Rating) |
|
Rating Explanation |
Strong degree of safety and low credit risk. |
|
Date |
27.09.2012 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office / Factory : |
44, KHB Industrial Area, Yelahanka, Bangalore-560064, Karnataka,
India |
|
Tel. No.: |
91-80-28462062 / 30046140 |
|
Fax No.: |
91-80-28462861 / 30046005 |
|
E-Mail : |
|
|
Website : |
DIRECTORS
As on 31.03.2013
|
Name : |
Mr. Apparao V Mallavarapu |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. S. Krishnan |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. P. Rama Rao |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Manoj Nagrath |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Rajiv C Mody |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Manny Marimuthu |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. K S Desikan |
|
Designation : |
Chief Financial Officer (CFO) |
|
|
|
|
Name : |
Mr. Ramu Akkili |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2013
|
Category of Shareholder |
No. of Shares |
% of No. of
Shares |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
7577477 |
61.28 |
|
|
7577477 |
61.28 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
7577477 |
61.28 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
83 |
0.00 |
|
|
166 |
0.00 |
|
|
833 |
0.01 |
|
|
1082 |
0.01 |
|
|
|
|
|
|
578425 |
4.68 |
|
|
|
|
|
|
1682678 |
13.61 |
|
|
2496128 |
20.19 |
|
|
29393 |
0.24 |
|
|
23454 |
0.19 |
|
|
5939 |
0.05 |
|
|
4786624 |
38.71 |
|
Total Public shareholding (B) |
4787706 |
38.72 |
|
Total (A)+(B) |
12365183 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
12365183 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
The Company is
primarily involved in • Manufacture of
Advanced Microelectronics Modules and Resistor Networks catering to the
communications, military, aerospace and industrial electronics markets; and • Manufacture of
printed circuit board assembly (PCBA) and Repair and Return business catering
to the automobile, communications and industrial electronics markets. |
||||||
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|
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|
Products : |
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GENERAL INFORMATION
|
No. of Employees : |
Not Available |
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Bankers : |
·
State Bank of India - Specialised Mid-Corporate Branch,
Kumarapark West, Bangalore, Karnataka, India ·
Citibank N.A., M.G. Road, Bangalore, Karnataka,
India |
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Facilities : |
(Rs.
In Millions)
|
|||||||||||||||||||||||||||||||||
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|
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|
Banking
Relations : |
--- |
|
|
|
|
Statutory Auditors : |
|
|
Name : |
BSR
and Company Chartered Accountants |
|
Address: |
Manuthi Info-tech centre, 11-12/1, Inner Ring Road, Koramangala,
Bangalore – 560 071, Karnataka, India |
|
Tel. No.: |
91-80-39806000 |
|
Fax. No.: |
91-80-39806999 |
|
|
|
|
Internal Auditors: |
|
|
Name : |
Ernst and Young Private Limited |
|
|
|
|
Subsidiaries : |
Centum Rakon
India Private Limited |
|
|
|
|
Other related parties where transactions have
taken place during the year Parties under common control : |
Centum
Industries Private Limited |
CAPITAL STRUCTURE
As on 31.03.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
15500000 |
Equity Shares |
Rs.10/- each |
Rs.155.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
12365183 |
Equity Shares |
Rs.10/- each |
Rs.123.652
Millions |
|
|
|
|
|
NOTES:
Out of the above,
4,933,333 equity shares of Rs 10 each, have been issued for consideration other
than cash pursuant to amalgamation of Solectron EMS India Limited with the
company effective 1 April 2009.
Reconciliation of equity shares outstanding at the
beginning and at the end of the reporting period
|
PARTICULARS |
31.03.2013 |
|
|
|
NUMBER |
RS. IN MILLIONS |
|
Number and value
of shares at the beginning of the year |
12,365,183 |
123.652 |
|
Number of shares
issued during the year |
-- |
-- |
|
Number and value of shares outstanding at the end
of the year |
12,365,183 |
123.652 |
Details of shareholders holding more than 5% shares
in the company
|
NAME OF THE SHAREHOLDER |
31.03.2013 |
|
|
|
NUMBER |
% OF HOLDINGS |
|
Apparao V
Mallavarapu |
6,604,715 |
53.41% |
|
Hardik Bharat Patel |
826,008 |
6.68% |
|
Bharat Jayantilal Patel |
735,930 |
5.95% |
Rights, preferences and restrictions attached to equity shares
The company has
only one class of share referred to as equity share having par value of Rs 10. Each
holder of the equity share, as reflected in the of the Company, is entitled to
one vote in respect of each share held for all matters submitted to vote in the
shareholders' meeting.
The Company
declares and pays dividends in Indian rupees. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting.
During the year
ended 31 March 2012, the amount of per share dividend recognized as distributions
to equity shareholders was Re 1 (previous year: Re 1). The total dividend
appropriation for the year ended 31 March 2012 amounted to Rs 14.371 Millions
(previous year: Rs 14.399 Millions) including corporate dividend tax of Rs
2.006 Millions (previous year: Rs 2.051 Millions).
In the event of
liquidation of the Company, the holders of equity shares will be entitled to
receive any of the remaining assets of the Company after distribution of all
preferential amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
123.652 |
123.652 |
123.482 |
|
(b) Reserves & Surplus |
641.147 |
698.943 |
660.682 |
|
(c) Money
received against share warrants |
0.000 |
0.000 |
0.000 |
|
|
0 |
|
|
|
(2) Share Application money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
764.799 |
822.595 |
784.164 |
|
|
|
|
|
|
(3)
Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
1.686 |
3.992 |
1.777 |
|
(b) Deferred tax liabilities (Net) |
0.000 |
0.000 |
0.000 |
|
(c) Other long term liabilities |
0.000 |
0.000 |
0.000 |
|
(d) long-term provisions |
11.631 |
8.695 |
7.304 |
|
Total Non-current Liabilities (3) |
13.317 |
12.687 |
9.081 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
336.164 |
353.175 |
379.174 |
|
(b) Trade payables |
330.508 |
191.170 |
258.933 |
|
(c) Other current
liabilities |
126.802 |
135.565 |
128.583 |
|
(d) Short-term provisions |
27.579 |
53.819 |
45.802 |
|
Total Current Liabilities (4) |
821.053 |
733.729 |
812.492 |
|
|
|
|
|
|
TOTAL |
1599.169 |
1569.011 |
1605.737 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
240.006 |
283.511 |
319.636 |
|
(ii) Intangible Assets |
6.098 |
9.480 |
13.128 |
|
(iii) Capital
work-in-progress |
0.657 |
0.000 |
0.000 |
|
(iv)
Intangible assets under development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
28.560 |
28.560 |
28.560 |
|
(c) Deferred tax assets (net) |
31.273 |
10.119 |
0.000 |
|
(d) Long-term Loan and Advances |
100.045 |
147.020 |
207.872 |
|
(e) Other Non-current assets |
22.855 |
48.633 |
18.273 |
|
Total Non-Current Assets |
429.494 |
527.323 |
587.469 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
0.000 |
0.000 |
|
(b) Inventories |
469.182 |
357.749 |
481.398 |
|
(c) Trade receivables |
586.123 |
591.947 |
460.614 |
|
(d) Cash and cash
equivalents |
33.000 |
7.998 |
14.578 |
|
(e) Short-term loans and
advances |
81.370 |
83.994 |
61.678 |
|
(f) Other current assets |
0.000 |
0.000 |
0.000 |
|
Total Current Assets |
1169.675 |
1041.688 |
1018.268 |
|
|
|
|
|
|
TOTAL |
1599.169 |
1569.011 |
1605.737 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
1807.456 |
1811.030 |
1869.291 |
|
|
|
Other Income |
16.654 |
14.970 |
23.167 |
|
|
|
TOTAL (A) |
1824.110 |
1826.000 |
1892.458 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of materials consumed |
1243.936 |
1182.428 |
|
|
|
|
Changes in inventories of work-in-progress |
(37.815) |
40.154 |
1719.003 |
|
|
|
Employee
benefits expense |
284.375 |
244.629 |
|
|
|
|
Other expenses |
305.182 |
173.501 |
|
|
|
|
TOTAL (B) |
1795.678 |
1640.712 |
1719.003 |
|
|
|
|
|
|
|
|
Less |
PROFIT
/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
28.432 |
185.288 |
173.455 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
31.302 |
33.842 |
33.741 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND
AMORTISATION (C-D) (E) |
(2.870) |
151.446 |
139.714 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
75.819 |
74.657 |
74.043 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS) BEFORE TAX (E-F)
(G) |
(78.689) |
76.789 |
65.671 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
(21.154) |
24.523 |
31.801 |
|
|
|
|
|
|
|
|
|
|
PROFIT / (LOSS) AFTER TAX (G-H) (I) |
(57.535) |
52.266 |
33.870 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
288.486 |
250.591 |
231.120 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed Final Dividend |
0.000 |
12.365 |
12.348 |
|
|
|
Corporate Dividend Tax |
0.000 |
2.006 |
2.051 |
|
|
BALANCE CARRIED
TO THE B/S |
230.951 |
288.486 |
250.591 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Sale of Manufactured Goods |
1278.533 |
1422.317 |
1146.195 |
|
|
|
Service Income |
0.000 |
0.000 |
0.996 |
|
|
TOTAL EARNINGS |
1278.533 |
1422.317 |
1147.191 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
1274.257 |
1093.622 |
1173.200 |
|
|
|
Stores & Spares |
0.000 |
0.028 |
0.029 |
|
|
|
Capital Goods |
10.379 |
4.929 |
18.743 |
|
|
TOTAL IMPORTS |
1284.636 |
1098.579 |
1191.972 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) Per Share (Rs.) |
(4.65) |
4.23 |
2.74 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
PAT / Total Income |
(%) |
(3.15)
|
2.86 |
1.79 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
(4.35)
|
4.24 |
3.51 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(5.11)
|
5.02 |
4.16 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.12)
|
0.09 |
0.08 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.52
|
0.43 |
0.49 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.42
|
1.42 |
1.25 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info
Agents |
Available in Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
No |
|
8] |
No. of employees |
No |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact person |
No |
|
11] |
Turnover of firm for last three years |
Yes |
|
12] |
Profitability for last three years |
Yes |
|
13] |
Reasons for variation <> 20% |
---------------------- |
|
14] |
Estimation for coming financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
---------------------- |
|
22] |
Litigations that the firm / promoter involved in |
---------------------- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking account |
---------------------- |
|
26] |
Buyer visit details |
---------------------- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if applicable |
Yes |
|
29] |
Last accounts filed at ROC |
Yes |
|
30] |
Major Shareholders, if available |
Yes |
|
31] |
Date of Birth of Proprietor/Partner/Director, if available |
No |
|
32] |
PAN of Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating, if available |
Yes |
BACKGROUND
Subject was
incorporated as a public limited company on 8 January 1993 and commenced
commercial production in 1994.
The Company is
primarily involved in
• Manufacture of
Advanced Microelectronics Modules and Resistor Networks catering to the
communications, military, aerospace and industrial electronics markets; and
• Manufacture of printed
circuit board assembly (PCBA) and Repair and Return business catering to the
automobile, communications and industrial electronics markets.
PERFORMANCE
During the current
year of operations, the company has registered revenue of Rs. 1824.100 million
and posted Profit / (Loss) before Taxes of Rs. (78.689) million.
During the year, significant contributions were made in the Strategic Electronic programs. The investments made in the global sales and marketing initiatives have started to yield results during the year in the form of new customers and new product introductions. These will result in higher revenues in the coming years.
The company has received the below awards during the year:
1. Best Electronics Manufacturing Industry award for the year 2012 from the India Electronics and Semiconductor Association (IESA).
2. High Growth in Electronic Hardware exports award from the Soft Technology Park of India (STPI).
MANAGEMENT DISCUSSION
AND ANALYSIS
COMPANY BACKGROUND
Subject designs, manufactures and also exports electronic products. These include subsystems, modules, box builds, besides complex electronic components.
Centum serves customers engaged in mission critical solutions with advanced tailor-made technologies. These range from Strategic Electronics (Space, Defense and Aerospace) to Industrial, Communications, and Medical.
Centum has been steadily increasing its product and service range, geographical reach and catering to increased industry segments in its goal to expand its offerings and become the sophisticated one stop shop OEMs are seeking.
With extensive design and development expertise and leading-edge enabling technologies Centum is now the industry leader in India in electronics solutions and components.
The strategy over the years has been consistent and is based on high customer focus with competent people, state of the art technology and high quality products.
Centum’s vision is “To Create Value by contributing to the Success of its Customers, by providing best-in-class Electronics Design and Manufacturing Solutions in high technology areas”.
INDUSTRY STRUCTURE
AND DEVELOPMENT
Broadly, the electronics industry is categorized under Consumer, Medical, Strategic Electronics, Communications, Automotive and Industrial segments.
Government of India has recognized the importance of Electronic industry and announced the National Electronics Policy (NEP) http://deity.gov.in. The demand of the Indian market is expected to reach USD 400 Billion by 2020. At the current growth rate, the domestic production is expected to reach USD 100 Billion leaving a gap of USD 300 Billion. The Government’s vision is to create a globally competitive Electronics System Design and Manufacturing (ESDM) industry to meet the country’s needs and serve the international markets. To meet this vision, the Government has introduced a scheme for Electronics Manufacturing Cluster (EMC) to ensure world class infrastructure and facilities to be provided to attract investments. Accordingly, the Government has decided to offer financial support in the formation of EMCs. Further to attract investments, the Government has introduced Modified Special Incentive Package Scheme (MSIPS) http://deity.gov.in for new and expansion of existing units. This scheme offers an incentive up to 25% of the value of investment in Plant and Machinery. They hope the focus given by the Government of India will create many more opportunities in the ESDM sector.
As a company they operate in Strategic Electronics, Communication, Industrial and Medical industry segments.
STRATEGIC ELECTRONICS
a. Defense
The Indian Defense Budget is increasing year on year both in terms of the total value and also as a percentage of the budget allocation itself. Of the total defense budget, the percentage of expenditure towards Capital head is increasing every year creating an even bigger opportunity for the defense market. Also studies show that Indian defense market is one of the most attractive defense markets in the world.
The Armed forces, till recently, procured their requirements either from direct imports or products developed by DRDO labs and productionized by defense PSUs or the Ordnance factories. Due to Government of India’s focus on self reliance, new opportunities are emerging in this sector.
To accelerate the process of self reliance, DRDO labs are partnering with private industries in designing new products and also willing to transfer technologies of complex products which hitherto were partnering only with PSUs or Ordnance Factories.
Till recently, the indigenous defense manufacturing was restricted to Defense Public Sector Units and Ordnance Factories only. However, in the recent past, the Government is encouraging the private industry participation. Due to increasing requirements, the Defense PSUs and the Ordnance Factories who have huge order book (BDL order book Rs. 190000.000 Millions and revenue 2011-12 Rs.9590.000 Millions, BEL order book Rs. 257480.000 Millions and revenue 2011-12 Rs. 57030.000 Millions, and HAL revenue 2011-12 Rs. 126930.000 Millions), should more actively work with the private industry to fulfill the requirements. However due to legacy issues of being vertically integrated, the PSUs still do not involve the private industry as much as they should, to be mutually successful.
The Defense Procurement Policy (DPP) of Government of India has created a huge opportunity for Indian industries. Due to this policy the international suppliers of defense products to India are actively looking to procure from high quality companies in the defense segment to meet their offset obligations. Also in some cases, the DPP calls for Buy and Make requirements, due to which many multinational companies are planning to manufacture the products in India either thro’ licensing agreement or joint ventures. Also, the latest DPP provides for offset credits for the technologies transferred (TOT) to Indian companies, which will encourage the foreign companies to transfer know how, thereby creating more opportunities to Indian companies.
b. Space
India has a space program which is very vibrant and successful. The Government of India has given the Indian Space Programme a special status and the budget allocation in the 12th Plan period is 151% higher than the 11th Plan period.
The number of satellite launches by the Indian Space Agency has been increasing steadily in the last few years and ISRO plans to launch eight satellites per year in the near future. Until recently ISRO manufactured the systems and subsystems in-house or imported them. However, due to the increased requirements coupled with Government’s focus on self reliance ISRO, is actively involved in developing the private industry in meeting their increasing requirements.
Due to increased financial and other controls by the Government of India, the sales cycle in this sector has increased significantly and in some cases by years.
COMMUNICATIONS
This market comprises of Terminal equipments such as the mobile phones, PDA etc. and the infrastructure equipments such as Base Station, Transmission equipments etc. Centum Rakon manufactures Frequency Control Products (FCP) to primarily cater to the infrastructure equipment companies. After consolidation in the past few years, this market is dominated by companies like Ericsson, Nokia Siemens, Alcatel – Lucent, Huawei etc. Although the Telecom market worldwide is increasing, the market is highly competitive and companies are looking for high quality suppliers from the emerging countries to make their products competitive in the market place. They see this as a growing market for their FCP products.
INDUSTRIAL
This sector comprises of segments like Power, Process Automation, Instrumentation, Energy etc. Industrial sector is one of the late entrants to the concept of outsourcing their electronic hardware compared to Telecom and IT sectors. This was due to the stringent quality requirements and long product lifecycles. The large multinationals in this industry segment are focusing on low cost countries like India for their outsourcing requirements due to the design, engineering and testing skills required to manufacture these products. This is growing market for their products and services.
They also see a trend of multinational companies starting green field projects or acquiring companies in India. To make their products competitive these Indian Units, are creating a supply chain eco system in the country.
STRATEGIES AND
BUSINESS OUTLOOK
The company’s strategy focuses on industry segments, technology and geographies.
· To ensure that the company is not dependent on any one industry segment, it operates in Space, Defense, Aerospace (Strategic Electronics), Industrial, Communication and Medical Electronics.
· The strategy of the company is to operate in high technology areas in the above mentioned industry segments.
· The strategy of the company is to address the global markets. They have segmented their markets as North America, Europe, India, and rest of Asia. This is to ensure that any economic down turn in any one region, has limited impact on the company.
The products and services
that the company offers can be classified broadly into “Built to Specification”
(BTS) and “Built to Print” (BTP) opportunities.
BUSINESS OUTLOOK:
STRATEGIC ELECTRONICS
The company has established itself as a major player in the Strategic Electronics arena. The strategy will be, to continue to consolidate and grow this business thro’ innovation, design, technology, quality and overall competitiveness. Over the years, the company has designed and manufactured systems and modules for the Strategic Electronic industry by delivering advanced and complex products many of which are, for the first time by an Indian company.
· Their strategy for this business has been and will continue to co-develop new products with ISRO and DRDO Labs. The advantage of this approach is the company’s product will get designed in and will have good potential when the final product goes into production phase. In this initiative, they are already working with ISRO and DRDO labs. The risk of this strategy is, in case the project/program does not fructify for any reason, then the RandD effort may go waste.
· The other approach for this business is to indigenize products that are currently being imported and the advantage with this is that once the product is developed it immediately goes into production quantities. Here again, they are developing and have seen some excellent results. The risk of this strategy is, the incumbent overseas supplier may slash the price just to keep the competition out since the Govt., of India procurement rules favour only the lowest bidder.
· The other opportunity in the Strategic Electronics is that of “off-set” and they see significant potential in this. They have already received orders for off-set and off-set business will be a significant part of Strategic Electronics business. The company has made a strategic decision to enter the RF domain and has made significant investment in terms of human resource, software and plant and machinery.
INDUSTRIAL
ELECTRONICS
The Company’s strategy for this market is to focus on high mix medium-to-low volume opportunities which need very high quality products and also have long product life cycles. This segment has very unique and demanding requirements. The company over the past many years has developed special processes, created specialized infrastructure and human resources and has strong domain knowledge to meet these requirements and make it as a very attractive supplier to the global OEMs. The Company is already well entrenched into this sector and seeing good growth rates from existing customers and also adding new customers both from within India and outside.
COMMUNICATIONS;
The company’s subsidiary, Centum Rakon manufactures Frequency Control Products (FCP) a critical component in the Telecom Infrastrucutre business segment. The subsidiary has been delivering high quality products at competitive prices, because of which they are seeing a significant increase in the market share. Last year they started to manufacture the key component, “Crystal”, which was imported from Rakon till then. This development made the subsidiary even more competitive, thereby able to increase the market share significantly. The company is already one of the top 3 OCXO manufactures in the world and they hope to further increase their position.
STATEMENT OF
STANDALONE UNAUDITED RESULTS FOR THE QUARTER ENDED 30 JUNE 2013
Rs. in Millions
|
Sr. No. |
Particular |
Quarter Ended |
|
|
|
30.06.2013 (unaudited) |
|
1. |
Income from
Operations |
|
|
|
Net Sales |
594.583 |
|
|
Other Operating Income |
-- |
|
|
Net Sales/Income
from Operations |
594.583 |
|
|
|
|
|
2. |
Expenditure |
|
|
|
Cost of Material Consumed |
398.482 |
|
|
Change in Inventories of Finished Goods, Work-In-Progress
and Stock In Trade |
(43.814) |
|
|
Employee Benefits Expenses |
74.634 |
|
|
Depreciation and Amortization Expenses |
17.468 |
|
|
Other Expenses |
85.815 |
|
|
Bad Debts Written Off |
-- |
|
|
f) Total |
532.585 |
|
|
|
|
|
3. |
Profit
From Operations before Other Income, Interest and Exceptional Items (1-2) |
61.998 |
|
|
|
|
|
4. |
Other Income |
58.922 |
|
|
|
|
|
5. |
Profit Before Interest and Exceptional Items (3+4) |
120.920 |
|
|
|
|
|
6. |
Interest |
6.536 |
|
|
|
|
|
7. |
Profit
After Interest but before Exceptional Items (5-6) |
114.384 |
|
|
|
|
|
8. |
Exceptional Items |
-- |
|
|
|
|
|
9. |
Profit
from Ordinary Activities before Tax (7+8) |
114.384 |
|
|
|
|
|
10. |
Tax
Expense |
|
|
|
a) Current tax |
14.913 |
|
|
b) Deferred tax |
(4.069) |
|
|
|
|
|
11. |
Net
Profit from Ordinary Activities after Tax (9-10) |
103.540 |
|
|
|
|
|
12. |
Extraordinary Item (net of expense) |
-- |
|
|
|
|
|
13. |
Net
Profit for the period (11-12) |
103.540 |
|
|
|
|
|
14. |
Paid-up Equity Share Capital (Face Value of Rs.10/- Each) |
123.652 |
|
|
|
|
|
15. |
Reserves Excluding Revaluation Reserve |
|
|
|
|
|
|
16. |
Basic
and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised |
|
|
|
a) Basic and diluted EPS before extraordinary items |
8.37 |
|
|
b) Basic and diluted EPS after extraordinary items |
8.36 |
|
|
|
|
|
17. |
Public
Shareholding |
|
|
|
-Number of Shares |
4,787,706 |
|
|
- Percentage of Shareholding |
38.72 |
|
|
|
|
|
18. |
Promoters
and Promoter Group Shareholding |
|
|
|
a)
Pledged/Encumbered |
|
|
|
- Number of Shares |
Nil |
|
|
- Percentage of Shares (as a % of the Total Shareholding
of promoter and promoter group) |
N.A |
|
|
- Percentage of Shares (as a % of the Total Share Capital
of the Company) |
N.A. |
|
|
|
|
|
|
b)
Non Encumbered |
|
|
|
- Number of Shares |
7,577,477 |
|
|
- Percentage of Shares (as a % of the Total Shareholding
of Promoter and Promoter Group) |
100% |
|
|
- Percentage of Shares (as a % of the Total Share Capital
of the Company) |
61.28% |
Note:
1. The unaudited results have been reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 7 August 2013.
2. Figures for the quarter ended 31 March 2013 is the balancing figures between audited figures in respect of full financial year and the published year to date figures up to 31 December 2012. Also, the figures up to the period ended 31 December 2012 was only reviewed and not subjected to audit.
3. The results for the quarter ended 30 June 2013 have been subjected to a "Limited review" by the Statutory Auditors of the Company. An unqualified review report has been issued by them thereon.
4. The Company has written off debts amounting to Rs 113.307 Millions during the year ended 31 March 2013 in relation to debts which or currently under litigation.
5. The Company operates through two segments, Products and Electronic Manufacturing Services.
6. Financial results for the quarter and year ended (consolidated information):
Rs. In Millions
|
Particulars |
Quarter Ended |
|
|
30.06.2013 Unaudited |
|
a. Net sales / income from operation |
891.487 |
|
b. Profit from ordinary activities before tax |
137.450 |
|
c. Profit after tax before minority interest |
101.714 |
|
d. Profit after tax after minority interest |
74.621 |
|
e. Basic earning per share |
6.03 |
|
f. Diluted earning per share |
6.03 |
7. The number of investor complaints received, resolved and pending during the quarter arc as follows:
|
Number of complaints pending at the beginning of the quarter |
Nil |
|
Number of complaints received during the quarter |
1 |
|
Number of complaints resolved during the quarter |
1 |
|
Number of complaints pending at the end of the quarter |
Nil |
8. Previous period's figures have been regrouped and reclassified, wherever necessary to conform to current period's presentation.
SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED
|
Sl. No. |
Particulars |
Quarter Ended 30.06.2013 (unaudited) |
|
|
|
|
|
|
Segment Revenue |
|
|
|
Products |
148.964 |
|
|
Electronics Manufacturing Services |
434.085 |
|
|
Unallocable |
11.551 |
|
|
Total |
594.600 |
|
|
Less : Inter Segment Revenue |
(0.017) |
|
|
Net Sales / Income
from Operation |
594.583 |
|
|
|
|
|
2 |
Segment Results |
|
|
|
|
|
|
|
Products |
51.659 |
|
|
Electronics Manufacturing Services |
12.019 |
|
|
Total |
63.678 |
|
|
Less :Interest |
6.536 |
|
|
Less : Other Unallocable Expenses and Extra Ordinary Items |
(57.242) |
|
|
Total Profit Before
Tax |
114.384 |
|
|
|
|
|
3 |
Capital Employed |
|
|
|
|
|
|
|
Products |
265.620 |
|
|
Electronics Manufacturing Services |
286.367 |
|
|
Unallocable |
314.557 |
|
|
Total |
866.544 |
FIXED ASSETS
·
Freehold Land
·
Leasehold Improvements
·
Building
·
Plant and Machinery
·
Electrical Installation
·
Computer
·
Office Equipments
·
Furniture and Fixtures
·
Vehicles
·
Computer Software
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 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.64.69 |
|
|
1 |
Rs.100.80 |
|
Euro |
1 |
Rs.86.30 |
INFORMATION DETAILS
|
Report Prepared
by : |
NTH |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
54 |
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 |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.