MIRA INFORM REPORT

 

 

Report Date :

28.03.2013

 

IDENTIFICATION DETAILS

 

Name :

SHIVAM AUTOTECH LIMITED

 

 

Registered Office :

303, 3rd Floor, Square 1, District Centre, Saket, New Delhi -110017

 

 

Country :

India

 

 

Financials (as on) :

31.03.2012

 

 

Date of Incorporation :

29.07.2005

 

 

Com. Reg. No.:

55-139163

 

 

Capital Investment / Paid-up Capital :

Rs. 100.000 Millions

 

 

CIN No.:

[Company Identification No.]

L34300DL2005PLC139163

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

RTKS10057F

 

 

PAN No.:

[Permanent Account No.]

AAJCS7372M

 

 

Legal Form :

A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing of Near-Net- Shaped, auto transmission components mainly for Original Equipments Manufacturers (OEMs).

 

 

No. of Employees :

Not Available

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba (44)

 

RATING

STATUS

 

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 4570000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is an established company a satisfactory track record. Trade relations are fair. Business is active. Payments are reported to be slow but correct.

 

The company can be considered for business dealings at usual trade terms and condition.  

 

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 – June 30, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

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

 

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

 

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CRISIL

Rating

Long term rating : BB+

Rating Explanation

Moderate risk of default

Date

November 12, 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/ Head Office :

303, 3rd Floor, Square 1, District Centre, Saket, New Delhi – 110017, India

Tel. No.:

91-11-49242100

Fax No.:

91-11-49242116

E-Mail :

admin@shivamautotech.com

Website :

www.shivamautotech.com

 

 

Gurgaon Plant :

58th Km. Stone, Delhi-Jaipur Highway, Village Binola, District Gurgaon -122413, Haryana, India

Tel. No.:

91-124-2379442/ 446

Fax No.:

91-124-2379442/ 447

 

 

Haridwar Plant :

Plot No. 3, Industrial Park-II, Phase-1, Village Salempur Mehdood, District Haridwar – 249402, Uttarakhand, India

Tel. No.:

91-1334-235511/ 12

 

 

DIRECTORS

 

AS ON 31.03.2012

 

Name :

Mr. Sunil Kant Munjal

Designation :

Chairman

 

 

Name :

Mr. Neeraj Munjal

Designation :

Managing Director

Date of Birth/ Age :

45 Years

Qualification :

B.Com, DIBM

Experience :

24 Years

 

 

Name :

Mr. Satyanand Munjal

Designation :

Director

 

 

Name :

Mr. Brijmohan Lall Munjal

Designation :

Director

 

 

Name :

Mr. Om Prakash Munjal

Designation :

Director

 

 

Name :

Mr. Bhagwan Dass Narang

Designation :

Director

 

 

Name :

Mr. Surrinder Lal Kapur

Designation :

Director

Date of Birth/ Age :

07.03.1937

Qualification :

Advocate

Experience :

Expert in Company Laws, Industrial Laws and Industrial Finance.

 

 

Name :

Mr. Vinayshil Gautam

Designation :

Director

Date of Birth/ Age :

03.06.1946

Qualification :

Doctrate in Management

Experience :

Practioner and Consultant of Management in India and Aborad and is attached with IIT Delhi

 

 

Name :

Mr. Anil Kumar Gupta

Designation :

Whole Time Director

 

 

KEY EXECUTIVES

 

Name :

Mr. Davendra Ujlayan

Designation :

AVP-Finance and Company Secretary

 

 

Name :

Mr. Sanjeev Chaba

Designation :

DGM-Finance and Accounts

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 31.12.2012

 

Category of Shareholders

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

http://www.bseindia.com/images/clear.gif(1) Indian

 

 

http://www.bseindia.com/images/clear.gifBodies Corporate

7479595

74.80

http://www.bseindia.com/images/clear.gifSub Total

7479595

74.80

http://www.bseindia.com/images/clear.gif(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

7479595

74.80

(B) Public Shareholding

 

 

http://www.bseindia.com/images/clear.gif(1) Institutions

 

 

http://www.bseindia.com/images/clear.gifMutual Funds / UTI

2100

0.02

http://www.bseindia.com/images/clear.gifFinancial Institutions / Banks

4891

0.05

http://www.bseindia.com/images/clear.gifSub Total

6991

0.07

http://www.bseindia.com/images/clear.gif(2) Non-Institutions

 

 

http://www.bseindia.com/images/clear.gifBodies Corporate

277219

2.77

http://www.bseindia.com/images/clear.gifIndividuals

 

 

http://www.bseindia.com/images/clear.gifIndividual shareholders holding nominal share capital up to Rs.0.100 million

1526422

15.26

http://www.bseindia.com/images/clear.gifIndividual shareholders holding nominal share capital in excess of Rs.0.100 million

644569

6.45

http://www.bseindia.com/images/clear.gifAny Others (Specify)

65204

0.65

http://www.bseindia.com/images/clear.gifNon Resident Indians

65204

0.65

http://www.bseindia.com/images/clear.gifSub Total

2513414

25.13

Total Public shareholding (B)

2520405

25.20

Total (A)+(B)

10000000

100.00

© Shares held by Custodians and against which Depository Receipts have been issued

0

0.00

http://www.bseindia.com/images/clear.gif(1) Promoter and Promoter Group

0

0.00

http://www.bseindia.com/images/clear.gif(2) Public

0

0.00

http://www.bseindia.com/images/clear.gifSub Total

0

0.00

Total (A)+(B)+(C)

10000000

0.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of Near-Net- Shaped, auto transmission components mainly for Original Equipments Manufacturers (OEMs).

 

 

Products :

ITC Code

Product Descriptions

87141900

Motor Cycle Parts

 

 

PRODUCTION STATUS (AS ON 31.03.2012)

 

Class of Goods

Unit

Installed Capacity

Actual Production (Qty.)

Gear Components:

 

Gurgaon

Haridwar

55,160,453

Forging Components

in nos.

18,000,000

123,600,000

 

Gear Blank Machining

in nos.

19,500,000

33,000,000

 

Gear Finishing

in nos.

8,400,000

33,000,000

 

 

Note:

(i) The installed capacity is on annualised basis and is as certified by the management and relied upon by the auditors being a technical matter. The installed capacity is calculated on triple shift basis.

 

(ii) Actual production of Forging Components and Gear blanks Machining depends on exact specification of the product. The quantities are indicative of production with specifications, which are considered representative of estimated average product mix.

 

 

GENERAL INFORMATION

 

Customers :

Ø  BOSCH

Ø  Hero Honda

Ø  HILTI

 

 

No. of Employees :

Not Available

 

 

Bankers :

Ø  IDBI Limited

Ø  ICICI Bank Limited

Ø  Punjab National Bank

Ø  AXIS Bank Limited

Ø  Hong Kong and Shangai Bank Limited

 

 

Facilities :

 

Secured Loans

31.03.2012

31.03.2011

 

Term Loans from Banks - Gurgaon Plant

(Rs. In Millions)

IDBI Bank-

56.408

105.156

Axis Bank- Corporate Loan

164.987

168.781

Term Loan from Banks-Haridwar Plant

 

 

Punjab National Bank

396.616

471.093

ICICI Bank Limited

0.000

101.178

Hong Kong and Shangai Bank Limited (HSBC)

0.000

50.707

Cash Credit from Banks - Gurgaon Plant

 

 

IDBI Bank Limited

221.018

228.265

Axis Bank

68.441

37.073

Cash Credit from Banks - Haridwar Plant

 

 

Punjab National Bank

229.529

247.155

IDBI Bank Limited

117.965

98.598

Total

1254.964

1508.006

 

Details of Securities:

A (i) Term Loan from IDBI Bank Limited are secured by exclusive charge on the fixed assets created under expansion project.

(ii) Term Loan from Axis Bank are secured by exclusive charge on specific movable machineries of Binola Plant.

 

B (i), (ii), (iii) Terms loans availed for Haridwar Plant is having Pari Passu charge over the entire fixed assets of Haridwar Plant both, present and future.

 

Amounts due in respect of Term Loans from Banks / Financial Institutions on account of Principal aggregating Rs.114.000 Millions (as per detail noted here under) were delayed and have been fully paid as on March 31 ‘2012.

 

Note: - 1 The detail of amounts referred above

- Punjab National Bank 2 instances of Rs.60.000 Millions with delay ranging 30 to 45 days.

- Punjab National Bank 2 instances of Rs.54.000 Millions with delay ranging 60 to 90 days.

 

Details of Securities:

 

A (i), (ii) Cash Credit from IDBI Bank Limited and Axis Bank at Gurgaon is secured by first pari passu charge on the current assets of Gurgaon Plant

 

B (i), (ii) Cash Credit from Punjab National Bank and IDBI Bank Limited at Haridwar is secured by first pari passu charge on the current assets of Haridwar Plant

 

The Interest rate for the above cash credit varies from 12% to 15% per annum.

 

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

S.S. Kothari Mehta and Company

Chartered Accountants

Address :

146-149, Tribhvan Complex, Ishwar Nagar, Mathura Road, New Delhi-110065, India

 

 

Holding company :

Ø  Dayanand Munjal Investments Private Limited

 

 

Enterprises over which key management personnel and their relatives are able to exercise significant influence :

Ø  Munjal Showa Limited

Ø  Hero MotoCorp Limited (Till 31.03.2012)

Ø  Hero Corporate Services Limited (Till 31.03.2012)

Ø  Arow Infrastructure Limited (Till 31.03.2012)

 

 

CAPITAL STRUCTURE

 

AS ON 31.03.2012

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

1,26,00,000

Equity Shares

Rs. 10/- each

Rs. 126.000 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

1,00,00,000

Equity Shares

Rs. 10/- each

Rs. 100.000 Millions

 

 

 

 

 

 

(a)

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period:

No of shares

Equity Share outstanding as at the beginning of the year

1,000,000

Equity Shares outstanding as at the close of the year

1,000,000

 

 

(b) Terms/ rights attached to equity shares

 

The company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares 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 share holders was Rs.3.20 (previous year Rs.2.50)

 

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of the preferantial amount, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

 

 

(c) Shares held by holding company

 

Out of equity issued by the company, shares held by its holding company are as below:

31.03.2012

31.03.2011

Dayanand Munjal Investment Private Limited

 

 

7,479,595 (31 March 2011 :7,479,595) equity shares of Rs. 10 each fully paid up

74.796

74.796

 

 

(e) Detail of shareholder holding more then 5% Share in the Company

 

Name of the shareholder

No of Shares

% holding

Dayanand Munjal Investment Private Limited

7,479,595

74.80%

 

As per of the company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.


 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2012

31.03.2011

31.03.2010

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

100.000

100.000

100.000

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

1041.259

888.240

763.586

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

1141.259

988.240

863.586

LOAN FUNDS

 

 

 

1] Secured Loans

1254.964

1508.006

1701.707

2] Unsecured Loans

0.000

0.000

0.000

TOTAL BORROWING

1254.964

1508.006

1701.707

DEFERRED TAX LIABILITIES

126.362

73.170

52.992

 

 

 

 

TOTAL

2522.585

2569.416

2618.285

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

2598.968

2479.121

2348.851

Capital work-in-progress

0.000

12.759

73.032

 

 

 

 

INVESTMENT

0.000

0.000

0.000

DEFERRED TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
523.208

351.935
335.616

 

Sundry Debtors
283.846

413.790
320.422

 

Cash & Bank Balances
13.769

81.420
106.008

 

Other Current Assets
18.322

16.649
0.000

 

Loans & Advances
183.170

128.258
120.394

Total Current Assets
1022.315

992.052
882.440

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
360.624

344.644

461.464

 

Other Current Liabilities
690.439

533.195

202.157

 

Provisions
47.635

36.677
22.417

Total Current Liabilities
1098.698

914.516
686.038

Net Current Assets
(76.383)

77.536
196.402

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

2522.585

2569.416

2618.285

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2012

31.03.2011

31.03.2010

 

SALES

 

 

 

 

 

Revenue from operation (net)

3601.342

2634.431

1941.621

 

 

Other Income

0.706

2.767

0.713

 

 

TOTAL                                     (A)

3602.048

2637.198

1942.334

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Raw Material and Components Consumed

1206.271

804.016

 

 

 

Increase/ (Decrease) in Stocks of Finished goods and Work in progress

(102.952)

(0.665)

 

 

 

Employee benefits

242.423

207.881

 

 

 

Other expenses

1406.578

1012.346

 

 

 

TOTAL                                     (B)

2752.320

2023.578

1477.560

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)     (C)

849.728

613.620

464.774

 

 

 

 

 

Less

FINANCIAL EXPENSES                                    (D)

270.501

208.305

167.670

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

579.227

405.315

297.104

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

294.188

236.544

186.593

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                              (G)

285.039

168.771

110.511

 

 

 

 

 

Less

TAX                                                                  (H)

98.776

20.996

(5.027)

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

186.263

147.775

115.538

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

470.339

381.620

313.573

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

30.000

30.000

30.000

 

 

Dividend

32.000

25.000

15.000

 

 

Tax on Dividend

5.191

4.056

2.491

 

 

 

67.191

59.056

47.491

 

BALANCE CARRIED TO THE B/S

589.411

470.339

381.620

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

FOB value of Exports

9.979

7.228

2.967

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Spares

100.304

75.386

31.025

 

 

Capital Goods

182.686

108.681

121.203

 

TOTAL IMPORTS

282.990

184.067

152.228

 

 

 

 

 

 

Earnings Per Share (Rs.)

18.63

14.86

11.55

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2012

30.09.2012

31.12.2012

Type

1st Quarter

2nd Quarter

3rd Quarter

 Sales Turnover

996.800

806.500

929.300

 Total Expenditure

741.600

631.600

699.500

 PBIDT (Excl OI)

255.200

174.900

229.800

 Other Income

0.500

0.000

0.200

 Operating Profit

255.800

174.900

230.000

 Interest

66.300

64.300

62.400

 Exceptional Items

0.000

0.000

0.000

 PBDT

189.500

110.700

167.500

 Depreciation

75.900

77.400

78.000

 Profit Before Tax

113.600

33.200

89.500

 Tax

37.300

11.800

19.300

Provisions and Contingencies

0.000

0.000

0.000

 Reported PAT

76.400

21.500

70.200

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

76.400

21.500

70.200

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2012

31.03.2011

31.03.2010

PAT / Total Income

(%)
5.17

5.60

5.95

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
7.91

6.41

5.69

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
7.87

4.86

3.42

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.25

0.17

0.13

 

 
 

 

 

Debt Equity Ratio

(Total Debt/Networth)

 
1.10

1.53

1.97

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
0.93

1.08

1.29

 

 

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

Yes

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

Yes

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

Yes

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

 

 

OVERVIEW

 

Subject was established in the year 1999, and was initially known as Munjal Auto Components till July, 2005. The company got later converted to a separate Public Limited Company w.e.f. 29th July, 2005. In pursuant to the scheme of Demerger arrangement, the Gurgaon Unit was transferred to Shivam Autotech Limited on 1st August, 2005.The Company has been engaged in the manufacturing of Near-Net- Shaped, auto transmission components mainly for Original Equipments Manufacturers (OEMs). The product range includes various types of transmission gears, transmission shafts, spline shafts, plunger, power train components, employing cold/warm/hot forging techniques. The Company has two state-of-the-art manufacturing facilities, located at Gurgaon and Haridwar. The company’s new plant in Haridwar was commissioned in April, 2009 and is equipped with modern and state of art facilities. The main advantage of cold/ warm forging technology, which is being used to manufacture near net shaped components, are high production rates, better dimensional accuracies, excellent surface finish, substantial savings in material with minimized machining and having superior mechanical and metallurgical properties. It is listed on the National Stock Exchange of India and Bombay Stock Exchange in India.

 

 

PERFORMANCE

 

The company has maintained the earnings at a strong level despite of rise in price of commodities, inflation and interest rates. They are committed in bringing the new processes and technological advancements in order to optimze the utilization of resources and to maximize the profits.

 

The total income of the company increased by 35.80% from Rs.2791.342 Millions in 2010-11 to Rs.3790.870 Millions in 2011-12. Operating profit (PBDIT) of the company increased by 38.46% from Rs.613.620 Millions in 2010-11 to Rs.849.727 Millions in 2011-12.

 

The overall performance of the company can be termed as satisfactory.

 

 

BUSINESS OVERVIEW

 

The global economic recovery is fast losing traction due to the continuing Euro Zone debt crisis. Domestically, the state of the economy is a matter of growing concern with slowing economy, persistently high inflation, uncertain political environment and the depreciation of the Indian rupee is weakening the overall economic sentiment of the country.

 

With the smoothening of operations at its Binola plant and Haridwar plant, the company expects growth in its top line and bottom line during the ongoing financial year 2012-13.The company’s efforts in adding new customers and increased business from its existing customers has started yielding results.

 

Hero MotoCorp Limited (HMCL), the main customer of the company and the world No. 1 two wheeler manufacturer for 11 consecutive years, continues to maintain its leadership position in the two wheeler industry, and has achieved a growth of 15.00% in the year 2011-12 by selling 62,35,205 two wheelers.

 

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

 

According to the latest estimates released by the Central Statistical Organization, India’s GDP growth is pegged at 6.5% in the FY 2011-12, down from 8.4% during the previous year. Industrial growth in particular was severely affected. Significant depreciation of the currency led to costlier imports and higher domestic input costs. High levels of interest rates with continuing inflation adversely impacted growth.

 

The sovereign debt crisis in the Eurozone is putting the world’s largest economic block into recession. The US economic outlook is uncertain as the prospect for recovery is weakening and no amount of quantitative easing is really working. To make the matters worse, the Chinese economy is slowing down, putting at jeopardy the outlook of the emerging market economies. For their own economy the basic problems are that of falling growth and high inflation. Actually, it is a deadly trio at work i.e. falling growth, continuing high inflation and large current account deficit, amidst high fiscal deficit.

 

 

INDUSTRY STRUCTURE AND DEVELOPMENT

 

Economically and demographically, India’s automotive industry is well positioned for growth, servicing both domestic demand and increasingly export opportunities. A predicted increase in India’s working-age population is likely to help stimulate the burgeoning market for private vehicles. Rising prosperity, easier access to finance and increasing affordability is expected to see four-wheelers gaining volumes, although two wheelers will remain the primary choice for the majority of purchasers, buoyed by greater appetite from rural areas, the youth market and women.

 

The components sector is in a strong position to cash in on India’s cost-effectiveness, profitability and globally recognized engineering capabilities. As the benefits of collaborations become more apparent, super-specialties may emerge in which the automobile is treated as a system, with each specialist focusing on a sub-system, akin to the IT Industry. Though this approach is radical, it could prove an important step in reducing complexity and investment requirements, while promoting standardization and meeting customer demands.

 

Manufacturers are already planning for the future; early advocates of technological and distribution alliances have yielded generally positive results, enabling domestic OEMs to access global technology and experience, and permitting them to grow their ranges with fewer financial risks.

 

This exciting outlook for the industry is set against a backdrop of two potentially game changing transportation trends – the gradual legislative move towards greener, gas based public transport vehicles, and a greater requirement for urban mass mobility schemes to service rapidly expanding cities.

 

In a price conscious economy such as India’s, the shift towards green vehicles will be slow unless spurred by government mandates. Although the major players are already equipped with the necessary capabilities to develop cleaner vehicles, they do not see much merit in commercializing these technologies until the green revolution gains momentum – most likely through changes in political legislations – and it achieves the market scale required for commercial viability.

 

Manufacturers are placing greater faith in dual-fuel technologies than in battery-powered alternatives because the necessary support infrastructure, such as recharge stations, is not yet in place for the widespread adoption of the latter. The launch of electric motorcycles could have a significant impact on the market, given that motorcycles account for the majority of two wheeler sales in India.

 

The Indian Automobile industry has emerged stronger from the recent global downturn, and sales across all segments have seen record breaking numbers in the recent past.

 

While the Indian industry has much to look forward to, by way of steady growth in both domestic and export markets, there are some clear challenges accompanying the opportunities in greener vehicles and alternative mobility.

 

In order to capitalize on these opportunities, the industry needs to develop or acquire technologies and capabilities to produce vehicles that meet future market needs.

 

The government for its part has much to do to ensure the growth trends are maintained, and encourage the development of greener vehicles, while also improving compliance to even existing environment standards.

 

 

OUTLOOK

 

The overall prospects look bright for the Indian auto component industry, considering government support, aggressive investment plans, capacity expansions, surging demand, global footprint, and opportunities from international and domestic markets.

 

The auto component companies are adopting different strategies to increase their product range, get access to improved technology, to acquire proximity with their customers and to expand operations in lucrative markets.

 

The industry is, however, vulnerable to certain concerns and challenges that are likely to erode its competitiveness. Even though competition has intensified over the years, its severity has increased ever since global automobile manufacturers have started considering India as an outsourcing destination. The industry’s own fragmented nature and low entry barriers for international players have stepped up the situation. Besides these factors, pricing pressure faced by component manufacturers from OEMs and raw material suppliers have also contributed substantially to rise in competition.

 

The company’s main customer Hero MotoCorp Limited continues to be the market leader and has grown by 15% in terms of volume in the year 2011-12 by selling around 62,35,205 two wheelers in the year 2011-12. This augurs well for their company also going forward. The company is now also concentrating on adding new products and new businesses and is confident of growing further in the coming years.

 

 

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31.12.2012

(Rs. in millions)

Particular

For the Quarter Ended

Nine Months Ended

 

31.12.2012

(Unaudited)

30.09.2012

(Unaudited)

31.12.2012

(Unaudited)

Income from Operations

 

 

 

Net Sales/Income from Operations

908.745

785.067

2668.543

Other Operating Income

20.507

21.409

63.959

Total Income from operations (net)

929.251

806.476

2732.502

 

 

 

 

Expenses

 

 

 

(a) Consumption of raw material

284.815

259.351

827.527

(b) Store Consumable

119.024

99.888

337.171

(c) Changes in inventories of finished goods, work in progress and stock in trade

10.869

(42.974)

38.711

(d) Employee benefit expenses

76.321

79.120

214.364

(e) Depreciation and amortization expenses

78.044

77.432

231.337

(f) Job work Charges

64.789

75.434

212.873

(g) Other Expenses

143.672

160.735

441.958

Total Expenses

777.534

708.986

2303.941

Profit from Operations before Other Income, Finance costs and Exceptional item

151.718

97.490

428.561

Other Income

0.200

(0.001)

0.731

Profit/ Loss from Ordinary Activities before Finance costs and Exceptional item

151.918

97.489

429.292

Finance costs

62.422

64.254

192.943

Profit/ Loss from Ordinary Activities after Finance costs but Exceptional item

89.496

33.235

236.349

Exceptional item

 

 

 

Profit/ Loss from Ordinary Activities before tax

89.496

33.235

236.349

Tax Expenses

19.306

11.789

68.348

Net Profit for the period

70.190

21.446

168.001

Paid- up Equity Share Capital

(Face value of the share – Rs. 10)

100.000

100.000

100.000

Reserves excluding revaluation reserves as per balance sheet of Previous Accounting Year

 

 

 

Earnings per share (before exceptional items)

(of Rs. 10/- each) (not annualized)

7.02

2.14

16.80

Earnings per share (after exceptional items)

(of Rs. 10/- each) (not annualized)

7.02

2.14

16.80

 

 

 

 

PARTICULARS OF SHAREHOLDING

 

 

 

1. Public shareholding

 

 

 

Number of Shares

2520405

2520405

2520405

Percentage of Shareholding

25.20%

25.20%

25.20%

2. Promoters and promoter group shareholding

 

 

 

a) Pledged/Encumbered

 

 

 

- Number of Shares

--

--

--

- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)

--

--

--

- Percentage of Shares (as a % of the Total Share Capital of the Company)

--

--

--

 

 

 

 

Non - encumbered

 

 

 

- Number of Shares

7479595

7479595

7479595

- Percentage of Shares

(as a % of the total shareholding of promoter

and promoter group)

100%

100%

100%

- Percentage of Shares

(as a % of the total share capital of the

company)

74.80%

74.80%

74.80%

 

 

Particulars

3 Months ended 31.12.2012

B

Investor complaints

 

 

Pending at the beginning of the quarter

2

 

Received during the quarter

1

 

Disposed of during the quarter

3

 

Remaining unresolved at the end of the quarter

0

 

Notes:

 

1.     The above results for the quarter ended December 31. 2012 were reviewed by the Audit Committee and thereafter were approved by the Board of Directors i n its meeting held on 9th February 2013.

 

2.     The above results have undergone "Limited Review" by the auditors.

 

3.     As the Company's business activity falls within a single primary business segment viz 'Two-wheelers, its parts and ancillary services' and is a single geographical segment, the disclosure requirements of accounting Standard (AS-17) " Segment Reporting", specified in the Companies (Accounting Standard) Rules, 2006 are not applicable.

 

4.     Provision for tax includes current tax, deferred tax net off MAT credit entitlement.

 

5.     Previous quarter/year figures have been regrouped / reclassified whereever necessary, to .make them comparable.

 

 

CONTINGENT LIABILITIES (NOT PROVIDED FOR) IN RESPECT OF:

(Rs. in Millions)

Description

31.03.2012

31.03.2011

a) Letter of Credit opened by banks

145.488

109.591

b) Claims against the Company not acknowledged as debts

12.977

11.325


FIXED ASSETS:

 

Ø  Land

Ø  Building

Ø  Plant and Machinery

Ø  Computers

Ø  Office Equipments

Ø  Furniture and Fixtures

Ø  Vehicles

Ø  Leasehold Improvements

Ø  Software


 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

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. 54.27

UK Pound

1

Rs. 82.49

Euro

1

Rs. 69.88

 

 

INFORMATION DETAILS

 

Report Prepared by :

BVA

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

3

PAID-UP CAPITAL

1~10

4

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

5

--CREDIT LINES

1~10

5

--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

NO

--OTHER MERIT FACTORS

YES/NO

YES

DEFAULTERS 

 

 

--RBI

YES/NO

NO

--EPF

YES/NO

NO

TOTAL

 

44

 

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

-

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.