MIRA
INFORM REPORT
|
Report Date : |
26.07.2014 |
IDENTIFICATION DETAILS
|
Name : |
KENNAMETAL INDIA LIMITED |
|
|
|
|
Registered
Office : |
8/9 Mile, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
30.06.2013 |
|
|
|
|
Date of
Incorporation : |
21.09.1964 |
|
|
|
|
Com. Reg. No.: |
08-001546 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.219.782 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L27109KA1964PLC001546 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
BLRK05838A |
|
|
|
|
PAN No.: [Permanent Account No.] |
AACCK4472B |
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|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturer and Trader of Hard Metal and Hard Metal Products and
Machine Tools |
|
|
|
|
No. of Employees
: |
Not Divulged |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (49) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 12000000 |
|
|
|
|
Status : |
Satisfactory |
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|
|
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a subsidiary of ‘”KENNAMETAL INC, USA”. It is an
established company having satisfactory track record. The company’s sales turnover has declined resulting into sharp dip in
profit of the company during financial year 2013. However, the rating reflects company’s established market position as
the largest player in the carbide tools industry in India marked by financial
and managerial support that company receives from parent company and sound
general financial position of the company. Trade relations are fair.
Business is active. Payment terms are reported to be usually 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 – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
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
N E W S
The economy grew 4.7 %in 2013/14, marking a
second straight year of sub-5 % growth – the worst slowdown in more than a quarter
of a century. The data was below an official estimate of 4.9 % annual growth
and compared with 4.5 % in the last fiscal year. However, the current account
deficit narrowed sharply to $ 32.4 billion at 1.7 % of gross domestic product,
in 2013/14 from a record high of $ 98.8 billion or 4.7 %, the year before.A
sharp fall in gold imports due to restrictions on overseas purchases and muted
import of capital goods helped shrink the current account deficit.
Online retailer Flipkart has acquired fashion
portal Myntra as it prepares to battle with the rapidly expanding India arm of
the global e-commerce giant Amazon. The company raised $ 210 million from
Russian Investment firm DST Global which has also invested in companies like
Facebook, Twitter and Alibaba Group.
General Motors will start exporting vehicles
from its Talegaon plant near Pune in the second half of 2014. GM was one of the
few global carmakers that was using its India plant only for the domestic
market.
Google has overtaken Apple as the world’s top
brand in terms of value, according to global market research agency Millward
Brown. Google’s brand value shot up 40 % in a year to $ 158.84 billion. The top
10 of the 100 slots were dominated by US companies.
Infosys lost another heavy weight when B G
Srinivas, a board member put in his papers. He is the third CEO-hopeful to quit
after Chairman N R Narayana Murthy’s return to the company – Ashok Vemuri and V
Balakrishnan being the other two.While Vemuri went on to lead IGate,
Balakrishnan joined politics.
Naresh Goyal – promoted Jet Airways posted
biggest quarterly loss – Rs 2153.37 crore – in the three months ended March 31,
mainly because it has been offering discounts to passengers to fill planes.
William S Pinckney – Chairman and CEO of
Amway India was arrested by the Andhra Pradesh Police in connection with a
complaint against the direct selling firm. This is the second time that he has
been taken into custody. A year, ago the Kerala Police had arrested Pinckney
and two company directors on charges of financial irregularities.
China has told its state-owned enterprises to
sever links with American consulting firms after the United States charged five
Chinese military officers wih hacking US companies. China’s action which
targets consultancies like McKinsey & Co. and the Boston Consulting Group,
sterns from fears that the first are providing trade secrets to the US
governments.
India has emerged as a country with some of
the highest unregistered businesses in the world. Indonesia has the maximum
number of shadow businesses, says a study of 68 countries by Imperial College
Business School in London.
Pfizer has abandoned its attempt to buy
AstraZeneca for nearly $ 118 billion after the latter refused an offer of 55
pounds a share.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CRISIL |
|
Rating |
A1+= Short term Borrowing Debt |
|
Rating Explanation |
Very Strong degree of safety and lowest credit risk. |
|
Date |
13 September, 2013 |
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
31-03-2014.
INFORMATION DENIED
Management Non Co-Operative (91-80-28394321)
LOCATIONS
|
Registered Office/ Factory : |
8/9 Mile, Tumkur Road, Bangalore - 560073, Karnataka, India |
|
Tel. No. : |
91-80-28394321 |
|
Fax No. : |
91--80-23997572 |
|
E-Mail : |
|
|
|
|
|
Factory 2 : |
No. 30, “Ramana Residency”, 4th Cross, Sampige Road, Malleswaram, Bangalore - 560
003, Karnataka, India |
|
Tel. No. : |
91-80 - 23460815 to 818 |
|
Fax No. : |
91-80 - 23460819. |
|
E-Mail : |
DIRECTORS
As on : 31.03.2013
|
Name : |
Mr. M.N. Bhagwat |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Bhagya Chandra Rao |
|
Designation : |
Managing
Director |
|
|
|
|
Name : |
Mr. John Chang |
|
Designation : |
Directors |
|
Date of Birth/Age : |
15.05.1961 |
|
Qualification : |
M.Sc. Mechanical Engineering, University of California at Berkeley, USA Bachelor of Science in Mechanical Engineering, San Jose State University, USA. |
|
|
|
|
Name : |
Mr. Vinayak K. Deshpande |
|
Designation : |
Directors |
|
Date of Birth/Age : |
21.07.1957 |
|
Qualification : |
Chemical Engineer, IIT Kharagpur |
|
|
|
|
Name : |
Mr. Gerald Goubau |
|
Qualification : |
M. S.EM, and MBA |
|
|
|
|
Name : |
Mr. B. Anjani Kumar |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Kundan K. Lal |
|
Designation : |
Company Secretary |
|
|
|
|
Management Team : |
Mr. Bhagya Chandra Rao Mr. Vikram Chopra Mr. Dibesh Singh Deo Mr. D. Parameswara Reddy Mr. D. Sarathy Mr. K. Chandrashekhar Sharma |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on: 31.03.2014
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of
Promoter and Promoter Group |
|
|
|
(1) Indian |
|
|
|
|
|
|
|
|
16483680 |
75.00 |
|
|
16483680 |
75.00 |
|
Total shareholding
of Promoter and Promoter Group (A) |
16483680 |
75.00 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
3171939 |
14.43 |
|
|
1040 |
0.00 |
|
|
3172979 |
14.44 |
|
|
|
|
|
|
221499 |
1.01 |
|
|
|
|
|
|
1471951 |
6.70 |
|
|
560203 |
2.55 |
|
|
67928 |
0.31 |
|
|
62243 |
0.28 |
|
|
5685 |
0.03 |
|
|
2321581 |
10.56 |
|
Total Public
shareholding (B) |
5494560 |
25.00 |
|
Total (A)+(B) |
21978240 |
100.00 |
|
(C) Shares held by Custodians and against which Depository Receipts have been issued |
|
|
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
21978240 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer and Trader of Hard Metal and Hard Metal Products and
Machine Tools |
GENERAL INFORMATION
|
No. of Employees : |
Not Divulged |
|
|
|
|
Bankers : |
·
Corporation Bank
Limited ·
HDFC Bank Limited ·
ICICI Bank Limited ·
Standard Chartered Bank |
|
|
|
|
Facilities : |
-- |
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Price Waterhouse and Company Chartered Accountants |
|
Address : |
5th floor, Tower “D”, The Millenia, 1 & 2 Murphy Road, Ulsoor,
Bangalore – 560008, Karnataka, India |
|
|
|
|
Holding Company: |
Meturit A.G. Zug, Switzerland |
|
|
|
|
Ultimate Holding
Company: |
Kennametal Inc, USA |
|
|
|
|
iii) Enterprises
holding, directly or indirectly substantial interest in Meturit A.G. Zug |
· Kennametal Widia GmbH Company. KG, Germany (Formerly Widia GmbH, Germany) · Kennametal Hertel Europe Holding GmbH, Germany* · Kennametal Holding GmbH, Germany * · Kennametal Europe GmbH , Germany · Kennametal Europe GmbH, Switzerland · Kennametal Europe Holding GmbH , Germany · Kennametal Luxembourg Holding S.a.r..l,, Luxembourg · Kennametal Widia Holdings Inc., USA · Kennametal Holdings Europe Inc., USA |
|
|
|
|
Fellow
Subsidiaries: |
· Kennametal Australia Pty Limited · Kennametal Produktions GmbH and Company. KG · Kennametal (Singapore) Pte. Limited · Kennametal Korea Company Limited · Kennametal Japan Limited · Kennametal Limited, Canada · Kennametal South Africa (Pty) Limited, South Africa · Kennametal Engineered Products B.V. · Kennametal (Thailand) Company Limited, Thailand · Kennametal DO Brasil LTDA, Brazil · Kennametal Hard Point (Shanghai) Limited, China · Kmt Distribution Services Asia Pte. Limited, Singapore · Kennametal Shared Services Private Limited. · Kennametal (China) Company Limited, China · Hanita Metal Works Limited, Israel · Kennametal Shared Services, GmbH, Germany · Kennametal Extrude Hone Corporation, USA · Kennametal Extrude Hone · Kennametal Extrude Hone Limited (England), UK · Kennametal (Xuzhou) Co. Limited., China · Kennametal (Malaysia) Sdn. Bhd., Malaysia · KMT Logistics GmbH, Germany · Kennametal Stellite India Private Limited., India · Kennametal Engineered Products B.V, The Netherlands · Extrude Hone Service Center, China |
CAPITAL STRUCTURE
As on 30.06.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
21978240 |
Equity Shares |
Rs.10/- each |
Rs.219.782 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
21978240 |
Equity Shares |
Rs.10/- each |
Rs.219.782 Millions |
|
|
|
|
|
Rights, preferences and restrictions attached to shares
The Company has only one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, if any, in proportion to their shareholding.
Shares held by ultimate holding company and holding company
|
PARTICULRS |
No. of Shares |
|
Kennametal Inc. USA, the ultimate
holding company
|
5274840 |
|
Metruit AG., Zug, Switzerland, the holding company |
11208840 |
|
(Details of shares held by
shareholders holding more than 5% of
the aggregate shares in the
Company |
% |
|
Kennametal Inc. USA, the ultimate
holding company [Note (i) below] |
24.00% |
|
Metruit AG., Zug,
Switzerland, the holding company |
51.00% |
|
Reliance Capital Trustee Company
Limited [Note (ii) below] |
8.40% |
(i) Kennametal Inc. USA, the ultimate holding company, sold an
aggregrate of 2,892,333 equity shares of Rs. 10 each during March 2013 through the Offer For Sale (OFS) method
prescribed by the Securities & Exchange Board of India (SEBI) thereby
reducing its shareholding in the Company to 24% from 37.16%.
(ii) 1,350,850 shares are held by Reliance Equity Opportunity Fund
comprising 6.15% of the shareholding and 495,841 shares are held by Reliance
Tax S
aver (ELSS) Fund comprising 2.26% of the shareholding
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
30.06.2013 |
30.06.2012 |
30.06.2011 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders'
Funds |
|
|
|
|
(a) Share Capital |
219.800 |
219.800 |
219.782 |
|
(b) Reserves & Surplus |
2943.500 |
2795.000 |
2749.638 |
|
(c) Money
received against Share WARRANTS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
3163.300 |
3014.800 |
2969.420 |
|
|
|
|
|
|
(3) Non-Current Liabilities |
|
|
|
|
(a) long-term Borrowings |
0.000 |
0.000 |
0.000 |
|
(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 |
93.500 |
93.600 |
0.000 |
|
Total Non-current Liabilities (3) |
93.500 |
93.600 |
0.000 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short Term Borrowings |
0.000 |
0.000 |
0.000 |
|
(b) Trade Payables |
640.000 |
641.800 |
0.000 |
|
(c) Other Current
Liabilities |
255.000 |
515.300 |
958.312 |
|
(d) Short-term Provisions |
52.800 |
57.300 |
160.596 |
|
Total Current Liabilities (4) |
947.800 |
1214.400 |
1118.908 |
|
|
|
|
|
|
TOTAL |
4204.600 |
4322.800 |
4088.328 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible Assets |
1245.900 |
1290.800 |
1066.588 |
|
(ii) Intangible Assets |
9.600 |
14.500 |
0.000 |
|
(iii) Capital
Work-in-Progress |
126.100 |
106.500 |
159.016 |
|
(iv)
Intangible assets under Development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
0.000 |
6.500 |
681.753 |
|
(c) Deferred Tax Assets (net) |
16.200 |
18.700 |
9.733 |
|
(d) Long-term Loan and Advances |
293.000 |
210.000 |
0.000 |
|
(e) Other Non-current Assets |
6.900 |
6.600 |
0.000 |
|
Total Non-Current Assets |
1697.700 |
1653.600 |
1917.090 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current Investments |
6.500 |
0.000 |
0.000 |
|
(b) Inventories |
950.200 |
1033.600 |
742.275 |
|
(c) Trade Receivables |
886.800 |
1028.900 |
1084.162 |
|
(d) Cash and Cash
Equivalents |
537.100 |
448.300 |
199.931 |
|
(e) Short-term Loans and
Advances |
116.600 |
155.800 |
139.978 |
|
(f) Other Current Assets |
9.700 |
2.600 |
4.892 |
|
Total Current Assets |
2506.900 |
2669.200 |
2171.238 |
|
|
|
|
|
|
TOTAL |
4204.600 |
4322.800 |
4088.328 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
30.06.2013 |
30.06.2012 |
30.06.2011 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
4893.800 |
5623.300 |
5073.500 |
|
|
|
Other Income |
80.700 |
104.500 |
117.000 |
|
|
|
TOTAL |
4974.500 |
5727.800 |
5190.500 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials consumed |
1451.800 |
1595.000 |
1213.900 |
|
|
|
Purchase of Stock in trade |
1131.200 |
1277.200 |
965.700 |
|
|
|
Changes in Inventories of Finished
goods Work in progress and Stock in trade |
(1.500) |
(214.500) |
-208.900 |
|
|
|
Employee Benefits expense |
900.700 |
837.600 |
814.400 |
|
|
|
Other Expenses |
1029.600 |
1016.400 |
904.200 |
|
|
|
TOTAL |
4511.800 |
4511.700 |
3689.300 |
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION |
462.700 |
1216.100 |
1501.200 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
266.900 |
226.700 |
225.800 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX |
195.800 |
989.400 |
1275.400 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
47.300 |
305.500 |
389.900 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) AFTER TAX |
148.500 |
683.900 |
885.500 |
|
|
|
|
|
|
|
|
|
|
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1305.700 |
1328.800 |
1425.864 |
|
|
|
|
|
|
|
|
|
|
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
0.000 |
68.400 |
88.600 |
|
|
|
Dividend |
0.000 |
549.500 |
769.200 |
|
|
|
Tax on Dividend |
0.000 |
89.100 |
124.800 |
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
1454.200 |
1305.700 |
1328.800 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export of goods calculated on F.O.B. basis |
536.800 |
418.300 |
332.492 |
|
|
|
Reimbursement of expenses |
11.700 |
13.800 |
10.204 |
|
|
TOTAL EARNINGS |
548.500 |
432.100 |
342.696 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
952.600 |
1151.800 |
1564.595 |
|
|
|
Stores & Spares |
135.000 |
131.700 |
203.544 |
|
|
|
Capital Goods |
135.600 |
282.400 |
132.678 |
|
|
TOTAL IMPORTS |
1223.200 |
1565.900 |
1564.595 |
|
|
|
|
|
|
|
|
|
|
Earnings / (Loss)
Per Share (Rs.) |
6.75 |
31.12 |
40.29 |
|
KEY RATIOS
|
PARTICULARS |
|
30.06.2013 |
30.06.2012 |
30.06.2011 |
|
PAT / Total Income |
(%) |
2.99 |
11.94 |
17.06 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
4.00 |
17.59 |
25.14 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
4.82 |
23.61 |
39.39 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.06 |
0.33 |
0.43 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
0.00 |
0.00 |
0.00 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.64 |
2.20 |
1.94 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
30.06.2011 |
30.06.2012 |
30.06.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Share Capital |
219.782 |
219.800 |
219.800 |
|
Reserves & Surplus |
2749.638 |
2795.000 |
2943.500 |
|
Net
worth |
2969.420 |
3014.800 |
3163.300 |
|
|
|
|
|
|
long-term borrowings |
0.000 |
0.000 |
0.000 |
|
Short term borrowings |
0.000 |
0.000 |
0.000 |
|
Total
borrowings |
0.000 |
0.000 |
0.000 |
|
Debt/Equity
ratio |
0.000 |
0.000 |
0.000 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
30.06.2011 |
30.06.2012 |
30.06.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
5073.500 |
5623.300 |
4893.800 |
|
|
|
10.837 |
(12.973) |
NET PROFIT MARGIN
|
Net Profit
Margin |
30.06.2011 |
30.06.2012 |
30.06.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
5073.500 |
5623.300 |
4893.800 |
|
Profit |
885.500 |
683.900 |
148.500 |
|
|
17.45% |
12.16% |
3.03% |
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 |
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 |
No |
|
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 |
CONTINGENT
LIABILITIES:
|
PARTICULARS |
30.06.2013 (Rs.
In Millions) |
30.06.2012 (Rs.
In Millions) |
|
Income Tax matters [Note (a)] |
176.300 |
125.900 |
|
Excise Duty/Service Tax matters under dispute |
11.100 |
9.300 |
|
Sales Tax matters under dispute |
8.600 |
4.800 |
Notes:
a) Relates to transfer pricing adjustments made by the Income Tax Department
for the assessment years 2007-08, 2008-09 and 2009-10, which is disputed by the
Company and the matter is lying under appeal with The Income Tax Appellate
Tribunal, Bangalore/ The Commissioner of Income Tax, Appeals, Bangalore. The
Company has paid “under protest” an aggregate of Rs. 0.001 Millions (2012: Rs.0.001 Million) to the Income Tax Department in this regard.
b) There are certain non-quantifiable
industrial disputes pending before various judicial authorities.
GENERAL INFORMATION
Subject is incorporated under The Companies Act 1956. The Company is
in the business of manufacturing and trading of hard metal and hard metal
products, and machine tools. The Company has its registered office and a
manufacturing facility at Bangalore and sells its products and services through
sales and support offices. The Company is a public limited company listed on
the Bombay
Stock Exchange (BSE).
OPERATING RESULTS
Uncertainty in the Indian economy particularly in Automobile Industry
has resulted in a drop in the Company’s revenue in FY13. During the year, the
revenue of the Company has declined by 13.5% from Rs. 5727.800 Millions to Rs. 4974.500 Millions as compared to the
previous year. This decline in revenue has resulted in under utilisation of
manufacturing capacity. As a consequence of reduction in Sales and under
utilisation of the capacity, the profit before Tax has declined from Rs. 989.400 Millions to Rs.195.800
Millions during FY 13.The Company does not have any subsidiaries.
MANAGEMENT DISCUSSION
AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND
DEVELOPMENTS/ OPPORTUNITIES AND THREATS
The Company is a leading manufacturer of hard metal products and
machine tools which cater to the needs of a wide variety of manufacturing and
other industries such as transportation, general engineering, aerospace
defence, energy, power generation equipment, earthworks, mining and
construction. It seeks to provide a competitive edge to its customers through a
wide variety of standard high quality products as well as items customized to
their requirements such as special purpose machines, metalworking tools,
customized tooling solutions and engineered products.
The Company’s mission is “to deliver productivity to customers
seeking peak performance in demanding environments by providing innovative
custom and standard wear-resistant solutions, enabled through its advanced
material sciences, application knowledge and commitment to a sustainable
environment”.
Indian Economy has significantly slowed down after achieving growth
rates of 7 to 8% in past few years. The GDP growth for FY13 has been at 5% down
from 6.2% in FY12. The Manufacturing sector is affected adversely with IIP
growing at just 1.2% for the FY13 v/s >3.5% levels for prior year.
The Auto and Auto ancillary industries which contribute to maximum
revenue for the Company have been the most affected industries during the year.
Overall the automobile industry has seen a drop of around 5% in production
during FY13 in comparison to FY12. The de growth is higher at 17% if the two
wheeler industry is excluded.
The slowdown in the economy can largely be attributed to policy
inaction by the Government, unfriendly, unclear tax regime, inflation, high
borrowing costs, stalled infrastructure projects and restrictive monetary
policies. The Rupee has depreciated
significantly due to adverse current account deficit because of poor investor
confidence, QE threat, lower FDI and FII investments. Rupee depreciation also
has a significant impact on the input costs of the Company particularly the raw
materials and energy costs.
Export markets for hard metals have not been buoyant either. All the
regions of the United states, Europe and Asia have been soft with hardly any
growth. Demand for the Inserts particularly from China was very low during the
year.
Though the economy is under severe pressure with the rating agencies
threatening a downgrade, the Government is yet to put in place effective
reforms and policies to restore business confidence and lead to strong growth.
It is also important to put in place deeper structural and administrative
reforms (such as GST act, Labor reforms
etc.) to regain momentum in economy and leverage the India growth potential.
Sectors such as automotive and capital goods have been faced with considerable
demand slowdown that is unlikely to turnaround quickly. Continuing lack of
action in a pre-election year may further act deterrent to realise the full
potential of the economy in the immediate future.
The Company does not expect the economic scenario to change
significantly in the short term and hence is focused on special growth and
operational initiatives to mitigate the impact of demand reduction. Besides the
automobile industry the Company is focused in diversifying and de-risking the
business by foray into sectors such as Aerospace, Energy, Mining and Machine
Tools, etc.
Export market has been showing signs of marginal improvement
particularly, the United states market. The European and Asian markets are expected
to remain soft (as in Fy13) in short to medium term.
OPERATIONS
The Financial Year 2012-13 was one of the most challenging years in
the last decade for the Company. The economic downturn coupled with poor manufacturing
scenario resulted in very low capacity utilization for most of the OEMs and
vendors like us in the supply chain. Most of the customers whom the Company
serves have been operating at very low capacity and in few cases below 50%
level .As a consequence of the factors stated above the Company witnessed a
negative growth of 13% for the financial year. The de growth is primarily
driven by Hard Metals (19%) and is partially offset by positive growth from
Machining Solution Group (MSG). Drop in hard metals sales has resulted in a
capacity utilisation of just 55% during the year.
The Company continues to pursue the dual brand strategy (KENNAMETAL,
WIDIA) and it is expected that the full potential of the strategy would be
realised once the economy rebounds. Customers can now take advantage of two
strong product portfolios to enhance productivity. In its efforts to achieve a
competitive advantage, new and technologically advanced products are introduced
every year by the Company both in Widia and Kennametal brand portfolio. The
Company’s objective is to generate >40% of the revenue from new products.
For FY13 the new products sale stands at 45% of the revenues.
OUTLOOK
Macro-economic scenario continues to be weak for the country. Rupee
depreciation continues to put huge pressure on oil prices in the Country
dampening the growth prospects of automobile sector .Growth in short term will
depend a lot on Government actions to pump up the economy but considering fact
that this is an election year it is unlikely that Government will roll out any
bold policies. In this backdrop it is reasonable to expect the current business
scenario to continue in short term. The Company realises the situation and
hence is focused on specific initiatives to drive the growth and maintain
market share.
As said earlier, the United States is showing some marginal
improvement in terms of economy and hence the exports are likely to improve in
this region. However, the European and Asian markets will remain soft and hence
may not contribute significantly for growth in forthcoming year.
FINANCIAL PERFORMANCE
The Company has delivered sales of Rs. 4893.800 Millions for FY13. This translates into a de-growth of 13% versus the prior year growth of 11%. Profit after Tax at Rs. 148.500 Millions is 78% below prior year and the decline is primarily attributable to the following reasons:
The Hard Metals sales down by 19% from Rs. 48100 Millions to Rs. 3889.800 Millions
Unfavorable Mix between the MSG, Wear and Tooling Products
Under recovery of fixed costs due to lower capacity utilization. Capacity utilization at 55% levels.
Increase in Raw Material cost due to rupee Depreciation
The MSG business continues to grow and has touched the Rs.10000 Millions mark for the first time after its inception. Growth of 23% Year on Year in MSG business has partially offset the negative growth from the hard metals segment. MSG also delivered record profitability at Rs.129.200 Millions highest in the history. The exports during the year have increased significantly at 23% primarily driven by Honda Thailand order for Machining Solutions Group.
The Company continues to maintain optimized working capital deployment into the business. The primary working capital was maintained at 19% in FY13. The collections during the year have been stable as in the past. The Company does not see any challenges in maintaining the good collections track record except for few handfuls of customers in Energy sector where liquidity crisis impact is maximum (due to huge capital lock up). Inventory and Accounts Payable are down in comparison to prior year which is in line with the business movement. Strict control of expenses coupled with excellent working capital management has ensured that the Company remains debt free and profitable. The Company’s operating cash flow at Rs. 465.000 Millions was higher than EBITDA for the financial year. The capital investment has been low in Fy13 compared to past few years. The company is adequately capitalized and there was no requirement for further capacity additions during the year.
STATEMENT OF STANDALONE
UNAUDITED RESULT FOR THE QUARTER AND NINE MONTHS ENDED MARCH 31, 2014
(Rs. In Millions)
|
Particulars |
For 3 Months Ended |
Preceding 3 Months Ended |
Year to date figure current period ended |
|
|
31.03.2014 |
31.12.2013 |
31.03.2014 |
|
1.
Income from operations |
|
|
|
|
a) Net sales/ Income from operation (net of excise duty) |
1345.100 |
1326.500 |
3956.800 |
|
b) Other operating income |
0.400 |
0.400 |
3.100 |
|
Total
income from Operations(net) |
1345.500 |
1326.900 |
3959.900 |
|
2.Expenditure |
|
|
|
|
a) Cost of raw material consumed |
451.800 |
462.100 |
1314.200 |
|
b) Purchases of stock in trade |
270.100 |
312.800 |
880.800 |
|
c) Changes in inventories of finished goods,
work-in-progress and stock-in-trade |
(19.600) |
(53.900) |
(97.400) |
|
d) Employees benefit expenses |
244.600 |
259.000 |
733.400 |
|
e) Depreciation and amortization expenses |
67.700 |
65.600 |
199.400 |
|
f) Other expenditure |
261.900 |
243.600 |
784.300 |
|
Total expenses |
1276.500 |
1289.200 |
3814.700 |
|
3.
Profit from operations before other income and interest and Exceptional Items |
69.000 |
37.700 |
145.200 |
|
4. Other income |
9.000 |
15.500 |
51.100 |
|
5.
Profit before Interest and Exceptional Items (3+4) |
78.000 |
53.200 |
196.300 |
|
6. Finance costs |
0.000 |
0.000 |
0.000 |
|
7. Profit after Interest and
Finance Charges |
78.000 |
53.200 |
196.300 |
|
8. Exceptional item |
1.000 |
101.000 |
102.000 |
|
9. Profit from ordinary
activities before tax Expense: (7+8) |
77.000 |
(47.800) |
94.300 |
|
10.Tax expenses |
24.200 |
(18.600) |
26.000 |
|
11.Net Profit / (Loss) from
ordinary activities after tax (9-10) |
52.800 |
(29.200) |
68.300 |
|
12.Extraordinary Items (net of
Tax) |
- |
- |
- |
|
13. Net
Profit / (Loss) for the period (11 -12) |
52.800 |
(29.200) |
68.300 |
|
14. Paid-up equity share capital (Nominal value
Re. 1/- per share) |
219.800 |
219.800 |
219.800 |
|
15i. Earing per share (before
Extraordinary Items) (not annualised) |
|
|
|
|
Basic |
2.40 |
(1.33) |
3.11 |
|
Diluted |
2.40 |
(1.33) |
3.11 |
|
15ii.Earing per share (After Extraordinary Items) (not annualised) |
|
|
|
|
Basic |
2.40 |
(1.33) |
3.11 |
|
Diluted |
2.40 |
(1.33) |
3.11 |
|
|
|
|
|
|
20. Particulars of shareholding |
|
|
|
|
- Number of shares |
5494560 |
5494560 |
5494560 |
|
- Percentage of shareholding |
25.00 |
25.00 |
25.00 |
|
21. Promoters and Promoters group Shareholding- |
|
|
|
|
a) Pledged /Encumbered |
|
|
|
|
Number of shares |
-- |
-- |
-- |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
-- |
-- |
-- |
|
Percentage of shares (as a % of total share capital of the
company) |
-- |
-- |
-- |
|
|
|
|
|
|
b) Non Encumbered |
|
|
|
|
Number of shares |
16483680 |
16483680 |
16483680 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
100.00 |
100.00 |
100.00 |
|
Percentage of shares (as a % of total share capital of the
company) |
75.00 |
75.00 |
75.00 |
|
B |
INVESTOR COMPLAINTS
[Nos.] |
3 months ended
31.03.2014 |
|
|
Pending at the beginning of the quarter |
- |
|
|
Received during the quarter |
- |
|
|
Disposed of during the quarter |
- |
|
|
Remaining unresolved at the end of the quarter |
- |
SEGMENTWISE REVENUE,
RESULTS AND CAPITAL EMPLOYED
|
Sl. No. |
Particulars |
For 3 Months Ended |
Preceding 3 Months Ended |
Year to date figure current period ended |
|
1 |
Segment Revenue |
31.03.2014 |
31.12.2013 |
31.03.2014 |
|
|
Net Sales |
|
|
|
|
|
Machine Tools |
244.900 |
220.600 |
711.200 |
|
|
Hard Metal and Hard Metal Products |
1100.600 |
1106.300 |
3248.700 |
|
|
Net Sales/ Income
from Operations |
1345.500 |
1326.900 |
3959.900 |
|
|
|
|
|
|
|
2 |
Segment Results |
|
|
|
|
|
Machine Tools |
36.200 |
17.500 |
86.800 |
|
|
Hard Metal and Hard Metal Products |
103.400 |
106.200 |
297.400 |
|
|
Total |
139.600 |
123.700 |
384.200 |
|
|
Exceptional and other non recurring items |
1.000 |
101.000 |
102.000 |
|
|
Other Unallocable Expenditure (net of income) |
61.600 |
70.500 |
187.900 |
|
|
Total Profit before
Tax |
77.000 |
(47.800) |
94.300 |
|
|
|
|
|
|
|
3. |
Capital Employed |
|
|
|
|
|
Machine Tools |
56.400 |
101.100 |
56.400 |
|
|
Hard Metal and Hard Metal Products |
2309.600 |
2251.600 |
2309.600 |
|
|
Unallocated |
865.600 |
826.100 |
865.600 |
|
|
Total Capital
Employed |
3231.600 |
3178.800 |
3231.600 |
Notes:
1. The unaudited financial results for the quarter and nine months ended March 31, 2014. were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on May 06, 2014.
2. Segments have been identified in line with the Accounting Standard on Segment Reporting (AS -17). taking into account the organisation structure as well as the differential risks and returns of these segments.
3. Segment revenue, results and capital employed figures include the respective amounts identifiable to each of these segments. Other unallocable expenditure include expenses incurred on common services provided to these segments which are not directly identifiable to the individual segments as well as expenses incurred at a corporate level which relate to the Company as a whole.
4. Exceptional and other non-recurring items debited to the Profit & Loss Account are as follows:
1. Voluntary Retirement Scheme compensation paid to employees fully charged off to the Profit and Loss Accoun - Nil
2. Employee separation scheme compensation paid / payable to employees fully charged-off to the profit and loss Account - 10
5. Previous quarter's / year's figures have been regrouped wherever necessary to conform to current quarter's / year's classification.
FIXED ASSETS
·
Land
·
Buildings
·
Plant and Machinery:
Ř
Data Processing
Ř
Equipment
Ř
Others
·
Furniture and Fixtures
·
Leasehold Improvements
·
Office Equipment
·
Vehicles
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 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.60.14 |
|
|
1 |
Rs.102.22 |
|
Euro |
1 |
Rs.81.02 |
INFORMATION DETAILS
|
Information
Gathered by : |
NAY |
|
|
|
|
Analysis Done by
: |
KAR |
|
|
|
|
Report Prepared
by : |
VRN |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
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 |
|
49 |
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.