MIRA INFORM REPORT
|
Report Date : |
18.10.2014 |
IDENTIFICATION DETAILS
|
Name : |
GREAVES COTTON LIMITED |
|
|
|
|
Registered
Office : |
Industry Manor, Off Appa Sahab Marathe Marg, Prabhadevi, Mumbai – 400
025, Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2014 |
|
|
|
|
Date of
Incorporation : |
29.03.1922 |
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|
|
|
Com. Reg. No.: |
11-000987 |
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|
|
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Capital
Investment / Paid-up Capital : |
Rs.488.400 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L99999MH1922PLC000987 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
MUMG07833A |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACG2062M |
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|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Subject is engaged in manufacturing of engines and
construction equipment and trading of power tillers, motor graders etc. |
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|
|
No. of Employees
: |
2307 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (62) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Status : |
Good |
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|
|
|
Payment Behaviour : |
Regular |
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Litigation : |
Exist |
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Comments : |
Subject is an old and established company having good track record. Fundamentals of the company is decent. Financial position of the
company is strong and healthy. Trade relations are reported to be fair. Business is active. Payment
terms are reported to be regular and as per commitment. The company can be considered normal for business dealing 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.
HENKEL RATING
|
HENKEL’s Rating : |
(300, 301) Moderate risk |
|
Credit
Rating |
Henkel
Rating |
|
|
Mira
Inform |
Risk
Category |
Description |
|
Aaa |
100 |
Very
low risk (blue ships) |
|
Aa |
200,
201 |
Low
risk |
|
A |
300,
301 |
Moderate
risk |
|
Ba |
350 |
Significant
risk |
|
B |
400 |
High
risk |
|
450 |
Very
high risk |
|
|
Ca
or C |
500* |
Doubtful
accounts |
|
007* |
Small
unrated customers |
|
|
009* |
Inactive
customers |
|
|
999* |
New
customer |
|
ECGC Country Risk Classification List – June 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
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
Verdict
Implications: Apex court order may alter coal import dynamics. Traders go slow
on talks over coal supply contracts, uncertainty over cancellation of blocks
weigh on stocks.
Recent arrest of the
Chennai head of the Registrar of Companies, the ministry of corporate affairs
arm that ensures that companies file all the information required by the
Companies Act is the latest manifestation of a messy fight between a father and
his adopted son for the control of Rs 40000 mn business empire. The Central
Bureau of Investigation arrested Manumeethi Cholan after he accepted Rs 10
lakhs as bribe from M A M Ramaswamy, a CBI official said.
Central Bureau of
Investigation books Electrotherm for cheating Central Bank of Rs 4360 mn.
Infosys maintains
revenue guidance. COO Rao says attrition still an area of concern and it would
take a few more quarters to bring down levels to 13-15 %.
DHL to invest
Euro 100 mn in India over next 2 years. The firm has chosen India to pilot its
e-commerce business model for the Asia-Pacific region.
Blackstone may buy
stake in BlueRidge SEZ in line with the fund’s real estate strategy in India.
Kingfisher Airlines Ltd
grounded in October 2012 under the weight of heavy debt and accumulated losses,
recently approached the Delhi high court for relief in two separate cases. The
airline challenged a notice by Punjab & National Bank alleging that It had
wilfully defaulted on Rs 7700 mn of loans and sought more time to comply with
the requirements under the listing agreements with the Stock Exchanges.
OnMobile likely to
sack another 300 employees. The lay-offs follow a spate of senior-level exits
over the past two years, starting with of its founder. The overall lay-offs
could number around 600 and are driven by the need to cut costs, says a former
employee.
EXTERNAL AGENCY RATING
|
Rating Agency Name |
FITCH |
|
Rating |
Long term issues rating: “AA” |
|
Rating Explanation |
High degree of safety and very low credit
risk. |
|
Date |
19.02.2013 |
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 (91-22-24397575)
LOCATIONS
|
Registered Office/ Corporate
Office : |
Industry Manor, Off Appa Sahab Marathe Marg, Prabhadevi, Mumbai – 400
025, Maharashtra, India |
|
Tel. No.: |
91-22-24397575 / 24365510 |
|
Fax No.: |
91-22-24377730 / 24379555 |
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E-Mail : |
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Website : |
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Diesel Engine Unit-
I: |
Bombay Poona Road, Chinchwad, Pune – 411 019, Maharashtra, India |
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Light Engines Unit
–I: |
J-2, MIDC Industrial Area, Chikalthana, Aurangabad – 431 210, Maharashtra, India |
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Light Engines Unit
–II: |
Plot No.72, Sipcot Industrial, Complex, Ranipet - 632 403, Tamilnadu, India |
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Light Engines Unit
–IV: |
J-2A, MIDC Industrial Area, Chikalthana, Aurangabad – 431 210, Maharashtra, India |
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Light Engine Unit
–V: |
A-1/3, Shendra Five Star, Industrial Area, Shendra, Aurangabad – 431 001, Maharashtra, India |
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Genset Unit: |
Gat No.357/17/1, 357/16/2 and 357/16/3, Kharabwadi, Chakan District, Khed, Pune, Maharashtra, India |
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Petrol Engines
Unit: |
F62 and 63, SIPCOT Industrial Complex, Gummidipoondi, Chennai - 601 201, Tamilnadu, India |
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Heavy Engineering Unit
I and II: |
D-18, SIPCOT Industrial Complex, Gummidipoondi, Chennai - 601 201, Tamilnadu, India |
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Heavy Engineering
Unit IV: |
A-12 (A), SIPCOT Industrial Complex, Gummidipoondi, Chennai - 601 201, Tamilnadu, India |
DIRECTORS
As on: 31.03.2014
|
Name : |
Mr. Karan Thapar |
|
Designation : |
Chairman |
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|
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|
Name : |
Mr. Sunil Pahilajani |
|
Designation : |
Managing Director and Chief Executive Officer |
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|
Name : |
Mr. Vijay Rai |
|
Designation : |
Director |
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Date of Birth/Age : |
13.10.1946 |
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Qualification : |
B. Tech in Mechanical Engineering from IIT Kharagpur |
|
Date of Appointment |
21.03.2002 |
|
|
|
|
Name : |
Mr. Vikram Tandon |
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Designation : |
Director |
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Date of Birth/Age : |
18.11.1948 |
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Qualification : |
B. Tech (Hons) from IIT Delhi |
|
Date of Appointment |
07.08.2007 |
|
|
|
|
Name : |
Dr. Clive Hickman |
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Designation : |
Director |
|
Date of Birth/Age : |
19.11.1954 |
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Qualification : |
B.Sc., MBA, PhD, DSc, Fellow Member of Institute of Mechanical Engineers, UK |
|
Date of Appointment |
01.03.2012 |
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|
|
|
Name : |
Mr. Navneet Singh |
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Designation : |
Director |
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Date of Birth/Age : |
02.09.1950 |
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Qualification : |
FCA (England and Wales); ACA (India); BA Honours (Economics) |
|
Date of Appointment |
01.08.2013 |
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|
|
|
Name : |
Mr. Arvind Kumar Singhal |
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Designation : |
Director |
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Date of Birth/Age : |
10.08.1958 |
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Qualification : |
B. E (Elec. and Comm.) from IIT, Roorkee; MBA (Fin. and Mkt.) from UCLA (USA) |
|
Date of Appointment |
01.11.2013 |
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|
|
|
Name : |
Mr. Suresh N. Talwar |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mrs. Monica Chopra |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on: 30.06.2014
|
Category
of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
(1) Indian |
|
|
|
|
1000 |
0.00 |
|
|
125852726 |
51.54 |
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|
125853726 |
51.54 |
|
|
|
|
|
Total shareholding
of Promoter and Promoter Group (A) |
125853726 |
51.54 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
52738403 |
21.60 |
|
|
51783 |
0.02 |
|
|
26570053 |
10.88 |
|
|
9657541 |
3.95 |
|
|
89017780 |
36.45 |
|
|
|
|
|
|
7435499 |
3.04 |
|
|
|
|
|
|
17531116 |
7.18 |
|
|
2712190 |
1.11 |
|
|
1656484 |
0.68 |
|
|
775000 |
0.32 |
|
|
821614 |
0.34 |
|
|
41220 |
0.02 |
|
|
18650 |
0.01 |
|
|
29335289 |
12.01 |
|
Total Public shareholding
(B) |
118353069 |
48.46 |
|
Total (A)+(B) |
244206795 |
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) |
244206795 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Subject is engaged in manufacturing of engines and
construction equipment and trading of power tillers, motor graders etc. |
GENERAL INFORMATION
|
No. of Employees : |
2307 (Approximately) |
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Bankers : |
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|||||||||||||||
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Facilities : |
(Rs.
In Millions)
Notes: * Cash Credit and Short Term Finance from Banks were secured by hypothecation of all stock-in-trade, spares, tools and book debts, present and future, of the Company. The charges on these assets also extend to letters of credit and bank guarantees upto Rs. 253.600 Millions (Previous Year Rs. 448.700 Millions) and Rs. 55.200 Millions (Previous Year Rs. 50.400 Millions) respectively. |
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
Walker, Chandiok and Company Chartered Accountants |
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Cost Auditors: |
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|
Name: |
Dhananjay V. Joshi and Associates Chartered Accountants |
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Internal Auditors: |
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|
Name: |
Aneja Associates Chartered Accountants |
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Wholly Owned
Subsidiary of Greaves Leasing Finance Limited : |
Dee Greaves Limited |
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Wholly Owned
Subsidiary : |
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|
Subsidiary of
Greaves Leasing Finance Limited : |
Greaves Cotton Middle East FZC (Formerly Ascot International FZC) |
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Wholly Owned
Subsidiary of Greaves Cotton Netherlands B.V : |
Greaves Farymann Diesel GmbH (Upto 10-10-2013) |
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Associate Company : |
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CAPITAL STRUCTURE
As on: 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
250000000 |
Equity Shares |
Rs.2/- each |
Rs.500.000 Millions |
|
2500000 |
Redeemable Preference Shares |
Rs.100/- each |
Rs.250.000 Millions |
|
|
|
|
|
|
|
Total |
|
Rs.750.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
244206795 |
Equity Shares |
Rs.2/- each |
Rs.488.400 Millions |
|
|
|
|
|
Shares in the Company
held by each shareholder holding more than 5% shares
|
Name of the shareholder |
As at 31.03.2014 |
|
|
Number of shares |
Percentage of shares held (%) |
|
|
DBH
International Private Limited |
98537502 |
40.35 |
|
Reliance Capital
Trustee Company Limited |
13741705 |
5.63 |
|
Bharat Starch
Products Limited |
13775865 |
5.64 |
|
Karun Carpets
Private Limited |
13607199 |
5.57 |
Terms / Rights
attached to equity shares
(i) The Company has only one class of equity shares having a face value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share. Any fresh issue of equity shares shall rank pari-passu with the existing shares.
(ii) In the event of liquidation of the Company, the holder of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, if any, in proportion to the number of equity shares held by the shareholders.
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Share Capital |
488.400 |
488.400 |
488.400 |
|
Reserves & Surplus |
6005.300 |
6932.000 |
7691.300 |
|
Net
worth |
6493.700 |
7420.400 |
8179.700 |
|
|
|
|
|
|
long-term borrowings |
1.700 |
0.400 |
0.000 |
|
Short term borrowings |
200.000 |
22.000 |
0.000 |
|
Total
borrowings |
201.700 |
22.400 |
0.000 |
|
Debt/Equity
ratio |
0.031 |
0.003 |
0.000 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
17534.400 |
18732.900 |
17189.100 |
|
|
|
6.835 |
(8.241) |
NET PROFIT MARGIN
|
Net
Profit Margin |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
17534.400 |
18732.900 |
17189.100 |
|
Profit |
1854.900 |
1379.600 |
1130.900 |
|
|
10.58% |
7.36% |
6.58% |
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 |
Yes |
|
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 |
Yes |
|
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 |
LITIGATION
DETAILS:
CASE DETAILS
|
Lodging No.:- |
ITXAL/2050/2009 |
Filing Date:- |
20/08/2009 |
Reg. No.:- |
ITXA/4224/2009 |
Reg. Date:- |
18/12/2009 |
|
Petitioner:- |
THE COMMISSIONER OF INCOME TAX 6 MUMBAI |
Respondent:- |
GREAVES COTTON LIMITED |
|
Petn.Adv.:- |
SURESH KUMAR (0) |
|
|
|
District:- |
MUMBAI |
|
|
|
|
|
|
|
|
Bench:- |
DIVISION |
|
|
|
Status:- |
Admitted(Unready) |
Category:- |
TAX APPEALS |
|
Last Date:- |
26/07/2011 |
Stage:- |
FOR ADMISSION - AFTER NOTICE (HIGH ON BOARD) |
|
Last Coram:- |
HON'BLE SHRI JUSTICE J.P. DEVADHAR HON'BLE SHRI JUSTICE A.A. SAYED |
|
|
UNSECURED LOAN
(Rs.
In Millions)
|
Particular |
As on 31.03.2014 |
As on 31.03.2013 |
|
LONG TERM
BORROWINGS |
|
|
|
Interest-free Sales Tax Loan and Special Incentive Loan |
0.000 |
0.400 |
|
|
|
|
|
Total |
0.000 |
0.400 |
Notes:
|
Unsecured Borrowings |
Terms of
Repayment |
|
Interest-free Sales Tax Loan, Maharashtra - Deferment of five years sales tax liability from May 1995 to May 2000 |
Repayable after ten years in five yearly installments, starting from 2009-10 with last installment in May 2014 |
GENERAL INFORMATION:
Subject is engaged in manufacturing of engines and construction equipment and trading of power tillers, motor graders etc. The Company has manufacturing facilities in the states of Maharashtra and Tamilnadu. The products are mainly sold in India with some export to Middle East, Africa and South East Asia Region. The Company has one direct and two indirect subsidiaries having operations in India and Sharjah.
REVIEW OF OPERATIONS:
The financial year 2013-14 witnessed a sharp macro-economic downturn. It was characterised by slowing demand, high costs of borrowings and stalling of infrastructure projects. The bleak performance of the manufacturing and industrial sectors severely impacted the industries dependant on domestic demand. The environment resulted in de-growth across all the major product categories that the Company caters to i.e. three Wheeler / four Wheeler Small Commercial Vehicles, Pump sets, Gensets and Construction Equipment.
The Company registered a net revenue from operations of Rs.17457.200 Millions in the financial year 2013-14 as against Rs.1,8888.400 Millions in the financial year 2012-13, recording a decline of about 7.57%. The profit after tax recorded a 18.03% decline from Rs.1379.600 Millions in the financial year 2012-13 to Rs.1130.900 Millions in the financial year 2013-14.
Despite the performance being adversely affected by the grim situation for the capital goods industry, particularly so for the automotive segments, the Company was able to retain its market share across all its segments.
The Company’s sustained efforts towards back-end cost control, new product launches and efficiency improvement measures, supported the insulation and limited the impact on the profitability margins. The net profit margin (excluding exceptional items) for the financial year 2013-14 was lower at 7.04% as against 8.3% in the financial year 2012-13.
Their multi-dimensional growth strategy will help us develop superior products, deepen markets and widen geographies. The Company’s ability to better utilise capacities and product range will help derive better margins out of the businesses. The outlook of each business has been discussed in detail in the ‘Management Discussion and Analysis’ which forms a part of this Annual Report.
MANAGEMENT DISCUSSION
AND ANALYSIS
GLOBAL ECONOMY
World economic growth improved in the latter half of FY13 with much of the growth impetus flowing from the advanced economies. In contrast, many emerging market economies faced unfavourable external financial environment, even as they dealt with their domestic challenges. The positivity in US, UK and Germany could strengthen growth prospects, however, the downside risks from low inflation and the possibility of protracted low growth, especially in the other non-core EU nations and Japan, dominate the overall world outlook. Growth in emerging market economies is expected to be modest. Overall, world economic growth is projected to be slightly higher in 2014 at around 3.6%, rising to 3.9% in 2015.
INDIAN ECONOMY
India continued to experience slowdown in economic growth, and year-on-year growth in the Gross Domestic Product (GDP) declined to the sub 5% level. Agriculture and services sector performance provided the much-needed succour, as industrial growth languished and largely remained flat with very few new projects being announced. Low policy visibility, weak growth and high inflation, a large fiscal deficit and high interest rate, delay in infrastructure projects due to environment and land clearance challenges combined to create enormous impediments to growth. The efforts of the Reserve Bank of India (RBI) to stem price increases curbed spending and consumption weakened.
The year also saw a steep depreciation of the Rupee. The Government had to take measures to curb fiscal deficit and reduce the subsidies in food and fuel to avert the downgrading by credit rating agencies. Volatile capital inflows and the declining confidence of international investors due to the inflation, added to India’s economic woes.
India's growth is expected to recover in the financial year 2014-15, supported by slightly stronger external growth, improving export competitiveness and implementation of recently approved investment projects. Consumer price inflation, which climbed down from its peak during the third quarter of the financial year 2013-14, is expected to remain an important challenge, but should continue to move onto a downward trajectory. The stable Government at the Centre, post the general elections, could be a potential game changer as concrete steps are expected to be taken to restore the much-needed confidence in the people and corporates at large.
Company Overview
The challenging macro environment and near stagnation of demand adversely impacted the Company’s core businesses and the lacklustre performance of the Automotive, Genset and the Construction Equipment segments led to a decline in revenues.
The Company launched new products, acquired new customers and opened up new geographies, which helped the Company to compensate the weak macro environment in India. In addition, the Company also strengthened its service network across all product segments. However, these efforts did not create the desired results as the demand in the key segments it operates, remained subdued.
For the full year, the Company registered net sales of Rs.171.900 Millions as against Rs.187.300 Millions during the previous year. Net profit for the year was at Rs.1130.000 Millions as against Rs.1380.000 Millions, a decline of 18%. A cost optimisation project called “Propel” was initiated to launch specific initiatives like value engineering, supply chain, vendor development which enabled the Company to report reduction in the material cost. The employee costs during the financial year 2013-14 increased over last year predominantly because of inflation and the investment made in enhancing the R and D skills and new geography expansions.
The Company continued to expand its global footprint and set up an office in Tanzania and took focussed strategic and marketing initiatives to further build the market in UAE, East Africa and South East Asia.
ENGINE SEGMENT
AUTOMOTIVE ENGINES
BUSINESS
Industry Overview
The Indian Automotive industry went through another year of dismal growth. Passenger car volumes declined by almost 5% during the year. The growth of diesel cars, which had been extremely robust in the past few years, also saw a major decline as the price gap between diesel and petrol was reduced substantially. The Medium and Heavy Commercial Vehicles (MandHCV) segment too went through another year of shrinking sales recording a drop of over 21% over last year. Only the 2-wheeler segment recorded a 7% growth during the year.
The 3-wheeler segment saw domestic volumes shrink by over 10%, mostly in passenger carriers. However, a stronger than expected demand from Africa enabled the industry to chalk up substantial growth in 3-wheeler exports, mainly in petrol driven vehicles. The resultant overall decline in numbers was just over 1%. The Light Commercial Vehicles (LCV) segment suffered the most, with both, domestic sales and exports, showing a drop in sales. Small Commercial Vehicles (SCV), which form a part of this segment, suffered a large drop in sales as well, after recording impressive growth over the last two years. On the whole, the LCV segment declined by over 13%.
The demand in the financial year 2014-15 is likely to remain sluggish for the LCVs, SCVs and 3-wheelers. The underlying growth factors such as fuel prices, interest rates and freight realisations, all remain in the negative territory. Most of the buyers of 3-wheelers and SCVs are small first time buyers, looking to start their own small business. With uncertainty looming over demand and profitability, many of the potential buyers of these vehicles are postponing their purchase, waiting for the growth factors to change for the better. This pent-up demand is likely to surface when the economy revives.
Business Overview
The Company’s Automotive Engines Business has a wide range of single cylinder diesel engines, which cater mainly to the 3-wheeler and SCV segments.
Volumes witnessed a sharp decline due to the economic slowdown and challenging industry environment. As both 3-wheeler and 4-wheeler engines volumes declined, the business registered a slight drop in quantities over last year.
On the positive side, the Company was awarded the prestigious Excellence in Delivery award for the second year running by Tata Motors. The Ace Zip and Magic Iris vehicles of Tata Motors are powered by the engines produced by the Company. The award is a recognition of the Company’s manufacturing prowess and excellence in delivery and adhering to stringent timelines.
The Company also entered into an agreement to supply diesel engines to TVS Motors for their diesel 3-wheeler vehicles.
New emission norms for vehicles are likely to be introduced in the near future. Sustained RandD efforts have led to the successful achievement of BS IV emission norms.
Outlook
The Automotive market is not expected to improve in the next few quarters. The diesel rate increase, high interest rates, poor growth in demand for last mile transportation due to slowdown in the economy, have resulted in inadequate growth in fares and freight rates for 3-wheeler and SCV operators. The Company is developing new market segments including non-automotive applications, and expanding its market into new geographies. The development of BS IV diesel single cylinder engines and of BS IV CNG engines is expected to provide a positive thrust. To broaden the product portfolio, the Company has also commenced on the development of larger diesel engines, however, these engines have a long development cycle.
AUXILIARY POWER
BUSINESS
Industry Overview
During the year, the economic slowdown, high interest rates, challenging business environment and weak consumer sentiments impacted growth. Diesel Gensets clocked negative growth to the tune of 20% in the financial year 2013-14 due to the slowing demand and the overall sluggish economy which impacted the growth of the realty, manufacturing and service sectors. In addition, competition remained intense as competitors adopted price competition to better utilise their plant capacity.
Business Overview
With a huge power deficit in India, the Company has developed auxiliary power solutions which are fuel-efficient, rugged and versatile and cater to retail, commercial and residential complexes, hotels, hospitals, industries and manufacturing enterprises, defense and railways. The Company’s well established pan-India distributor and dealer network, complemented by the deep-rooted aftermarket support, lends itself to easy accessibility for customer engagement.
The Company’s endeavour in the challenging environment has been to strengthen its product offerings and roll out new products that are best suited to perform under demanding power conditions. The focus has been to develop products which are technologically advanced with functional superiority, fuel efficiency, have advanced ergonomic designs and, importantly, are the ideal choice for value-conscious consumers. In line with this strategy, the Company launched three new offerings in the sub 20 KVA. Its, 160-250 KVA and higher end 500 KVA range gensets and engines are designed to deliver uninterrupted auxiliary power under challenging conditions.
The Company also initiated and succeeded in optimising costs through several innovations, quality improvements and performance improvements. The Company also undertook measures to make deeper inroads into the institutional segment and ventured back into the Railways business.
Another important development has been the ability to meet the Central Pollution Control Board (CPCB) norms for the Company’s Genset range.
Outlook
The Company is poised to gain from opportunities emerging post the announcement of new CPCB Genset norms. With its existing wide range of product offerings and new product, the Company is confident that the solutions will make the Company a preferred choice amongst consumers seeking technology-led affordable solutions.
FARM EQUIPMENT
BUSINESS
Industry Overview
Various pro-agriculture policies and beneficial interventions have supported the development of the agricultural sector and also boosted demand for the farm equipment business. India’s GDP growth for financial year 2013-14 was favourably supported by the sustained growth of agriculture sector due to a good monsoon. There is a marked shift in the preference for reliable local products which is backed by better local service over the low cost imports. The trend is expected to augur well for the Company as it has commenced localising many of the farm equipment through in-house R and D and also strengthening its own servicing network.
The draft farm mechanisation policy which reiterates the need for large scale farm mechanisation among small and marginal farmers, will play an important role in shaping the opportunity horizon.
Business Overview
The Company’s Farm Equipment Business manufactures a wide range of contemporary agricultural equipment which enables small and marginal farmers improve the productivity of their farms and reduce their dependence on manual labour.
Despite the good monsoon, the rural market continued to indicate signs of slowing down and specifically for the Company’s products due to the delay in release of subsidies and fuel increase, which play an important role in the purchase decision.
The Light Agri Equipment segment, including the oil engine pumpsets, continued to witness weak demand and volumes dropped. Though the Company’s entry into the electrical pumpset segment was well received.
The Company remained focussed on expanding the product range of Light Agri Equipment to reduce dependency on imports. Looking at the long-term opportunity potential in the business, the Company has set up a Technology Centre for the Farm Equipment Business at Gummidipoondi, Chennai, to facilitate the faster development of the farm equipment product portfolio.
Outlook
The level of mechanisation is expected to grow significantly among small and marginal farmers due to acute shortage of farm labour, fast changing economic situation in rural segment and increasing government support which enables subsidised purchasing.
Modernisation has reduced the amount of cultivable land and thus mechanisation, which improves productivity, will continue to generate demand for farm equipment. Continued support to the agricultural sector and favourable lending polices taking into account the thrust on inclusive growth, is anticipated and overall future long-term growth potential remains strong.
The Company remains focussed on developing practical value-added, energy efficient products to enhance farm productivity and ensuring excellence in servicing through a robust network.
The outlook for the financial year 2014-15 could remain an area of concern with the prediction of below normal monsoon which could dampen the demand for all agriculture aggregates including farm input and farm machinery. Majority of the Indian farm land still remains rain fed, with expected below normal monsoon could well end up with lesser sowing area thereby affecting the demand for farm inputs.
INDUSTRIAL ENGINES
BUSINESS
Industry Overview
From concreting and road making to earth moving, mining, agriculture, marine, fire fighting and other pumps, compressors and also in railways, defence and power generation, industrial engines find application across diverse areas. Such engines are used in different stationary and mobile equipment. The depressing economic environment prevailing during the financial year 2013-14 impacted growth across all these areas, causing slowdown in demand and impeding growth of this business segment. Business was further impacted by the high interest rates and delays in project clearance, as a result of which the Company did not report any significant developments in the Industrial Engines Business.
Business Overview
In an effort to address the need for industrial engines across all critical areas, including construction, mining, agriculture, marine, rail cars, power, fire control and material handling, the Company builds customised products to match diverse needs. In line with the overall negative industry trend, the business remained sluggish during the year.
Outlook
Resurgence in demand is interlinked with the revival of the economy. Going forward, the Company is optimistic about increasing its market share in this business through focussed marketing initiatives and the RandD thrust.
INFRASTRUCTURE
EQUIPMENT SEGMENT
CONSTRUCTION
EQUIPMENT BUSINESS
Industry Overview
Development of adequate infrastructure has been identified as the most critical prerequisite growth enabler for the country. The development and progress of the economy and infrastructure sector is intrinsically linked to the growth and development of the construction equipment business.
The Road Construction segment has been on a recessionary trend since the financial year 2011-12 and the negative trend continued during the year.
Business Overview
Roads and concreting segments reported general decline as a result of the bleak economic sentiment, leading to a commensurate decline and degrowth in the Company’s business.
The period of the slowdown was utilised to expand the product basket through value-additions and technological improvements. The Company successfully launched water cooled engines for Soil Compactors which offers a distinct fuel consumption advantage.
Continuing with the strategy to introduce value-added products, the Company signed a MoU with Nikko, a leading Japanese Hot Mix Asphalt plant manufacturer, for trading.
CONCRETING EQUIPMENT
BUSINESS
Industry Overview
The concrete equipment industry especially the Transit Mixer business continued to register a deep decline during the financial year 2013-14. Surplus equipment in the market which was redeployed in the new projects impacted the demand for new batching plants and concrete pumps. The sector’s turnaround hinges on the revival of the economy and a strong positive policy thrust to attract investments back to infrastructure projects and promote active growth in national highway construction.
Business Overview
The Company manufactures Compaction Equipment (Soil Compactors/Heavy and Light Tandem Rollers) and the entire value chain of concreting equipment including various configurations of Batching Plants, Concrete Pumps, Boom Pumps and Transit Mixers. The business is supported by the strong nation-wide distribution and service network.
The Company’s sales were affected by the overall dismal business environment. In spite of the prevailing market conditions, while the turnaround is not visible in the near future, the Company remains hopeful of growth in the long term. And in line with the long-term business opportunity, the Company introduced new products in the concreting business. The financial year 2013-14 saw the Company commercially launch the full range of S-Valve pumps and also subsequently launch the first indigenously manufactured 37 meter Z fold Boom Pump. Despite the product launches, weak operating environment led to year-on-year decline in sales.
Outlook
The outlook for India's infrastructure sector for the financial year 2014-15 remains negative, due to weak credit profiles for most project companies. No sharp movement is foreseen in the fortunes of the sector, especially in the short term. Favourable policy support and growth-oriented approach from the new Government will play an important role in shaping the fortunes of the beleaguered sector. In the long run, the Company believes that infrastructure sector holds opportunities and with its wide range of offerings, it is poised to ride the demand wave when the opportunity unfolds.
INDEX OF CHARGES
|
S.No. |
Charge ID |
Date of Charge Creation/Modification |
Charge amount secured |
Charge Holder |
Address |
Service Request Number (SRN) |
|
1 |
80022519 |
03/06/2005 * |
2,932,100,000.00 |
SYNDICATE BANK |
SIR P M ROAD, FORT, MUMBAI, MAHARASHTRA - 400001, INDIA |
- |
|
2 |
80022517 |
30/01/2014 * |
2,750,000,000.00 |
State Bank of India |
INDUSTRIAL FINANCE BRANCH, THE ARCADE, 2ND FLOOR, WORLD TRADE CENTRE, CUFFE PARADE, COLABA, MUMBAI, MAHARASHTRA - 400005, INDIA |
B96372560 |
* Date of charge modification
FIXED ASSETS:
Tangible Assets
·
Freehold Land
·
Leasehold Land
·
Freehold Building
·
Leasehold Building
·
Plant and Equipment
·
Office Equipments
·
Furniture and Fixtures
·
Vehicles
Intangible Assets
·
Technical Know-how
·
Computer Software
STATEMENT OF UNAUDITED
STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE 2014
(Rs. In Millions)
|
Sr. No. |
Particulars |
Quarter ended |
|
30.06.2014 (Unaudited) |
||
|
|
Gross Sales |
4605.700 |
|
|
Less: Excise Duty |
388.200 |
|
1 |
Income from
Operations |
|
|
|
a) Net Sales |
4217.500 |
|
|
b) Other Operating Income |
7.800 |
|
|
Total Income from
Operations (net) |
4225.300 |
|
2 |
Expenses |
|
|
|
a) Cost of Materials Consumed |
2610.500 |
|
|
b) Purchase of Stock-in-Trade |
137.500 |
|
|
c) Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade |
136.700 |
|
|
d) Employee Benefits Expense |
434.900 |
|
|
e) Depreciation |
108.600 |
|
|
f) Other expenses |
437.500 |
|
|
Total Expenses |
3865.700 |
|
3 |
Profit from
Operations before Other Income, Finance Costs & Exceptional Items (1-2) |
359.600 |
|
4 |
Other Income |
44.400 |
|
5 |
Profit from
ordinary activities before finance costs & Exceptional Items (3+4) |
404.000 |
|
6 |
Finance Costs |
2.300 |
|
7 |
Profit from
ordinary activities after finance costs but before Exceptional Items (5-6) |
401.700 |
|
8 |
Exceptional Items (Refer Note 1) |
(6.300) |
|
9 |
Profit from
Ordinary Activities before Tax (7+8) |
395.400 |
|
10 |
Tax Expense |
|
|
|
a) Current Tax |
113.500 |
|
|
b) Tax adjustment in respect of earlier years |
- |
|
|
c) Deferred Tax |
(5.500) |
|
11 |
Net Profit from
Ordinary Activities after Tax (9-10) |
287.400 |
|
12 |
Extraordinary Item (net of tax expense) |
- |
|
13 |
Net Profit for the
period (11-12) |
287.400 |
|
14 |
Paid-up equity share capital (face value of Rs. 2/- each) |
488.400 |
|
15 |
Reserves excluding revaluation reserves |
|
|
16 |
Earning Per Share (Not Annualised) (Rs.) |
|
|
|
- Basic |
1.18 |
|
|
- Diluted |
1.18 |
|
|
|
|
|
A |
Particulars of
Shareholding |
|
|
1 |
Public Shareholding |
|
|
|
- Number of Shares |
118353069 |
|
|
- Percentage of Shareholding |
48.46 |
|
2 |
Promoter and Promoter Group Shareholding a) Pledged / Encumbered - Number of Shares - Percentage of Shares b) Non-encumbered |
- |
|
|
- Number of Shares |
125853726 |
|
|
- Percentage of Shares ( as a % of the total shareholding of Promoter and Promoter Group) |
100.00 |
|
|
- Percentage of Shares ( as a % of the total share capital of the Company) |
51.54 |
|
|
|
|
|
B |
Investor Complaints Pending at the beginning of the quarter Received during the quarter Disposed off during the quarter Remaining unresolved at the end of the quarter |
NIL NIL NIL NIL |
SEGMENT-WISE REVENUE,
RESULTS AND CAPITAL EMPLOYED FOR THE QUARTER ENDED 30TH JUNE 2014
|
Particulars |
Quarter ended |
|
30.06.2014 (Unaudited) |
|
|
1. Segment Revenue |
|
|
a. Engines |
3922.300 |
|
b. Infrastructure Equipment |
266.700 |
|
c. Other |
36.300 |
|
Total |
4225.300 |
|
|
|
|
Less: Inter – segment revenue |
- |
|
Net Sales/Income from operations |
4225.300 |
|
|
|
|
2. Segment Results |
|
|
Profit/ (loss) before tax and interest |
|
|
a. Engines |
629.700 |
|
b. Infrastructure Equipment |
(117.400) |
|
c. Other |
1.300 |
|
Total |
513.600 |
|
|
|
|
Less: Unallocable Expenditure |
|
|
Interest and Finance charges |
2.300 |
|
Other expenditure (net of other income) |
109.600 |
|
Exceptional Items |
6.300 |
|
Profit Before Tax |
395.400 |
|
|
|
|
3. Capital Employed |
|
|
(Segment Assets – Segment Liabilities) |
|
|
a. Engines |
4526.400 |
|
b. Infrastructure Equipment |
1124.600 |
|
c. Other |
47.800 |
|
Total Capital Employed in segment |
5698.800 |
|
Add: Unallocable Corporate Assets Including Investments net of
Liabilities |
2768.200 |
|
Total Capital Employed in the Company |
8467.000 |
Notes:
1.
Exceptional items constitute:
(RS.
In Millions)
|
|
Quarter ended |
|
|
30.06.2014 |
|
a) Profit on sale of Properties |
- |
|
b) Impairment of Assets |
- |
|
c) Provision for diminution in value of investment / write off on liquidation of companies |
- |
|
d) Employee separation cost |
(6.300) |
|
Total |
(6.300) |
2. Figures for the previous periods have been regrouped/reclassified, wherever necessary, to make them comparable with the figures of the current period.
3. The figures for the quarter ended 31st March 2014, being balancing figures between audited figures arrived at based on audited results of the full financial year and the published year to date unaudited figures for nine months ended 31st December 2013, have been considered as audited.
4. The above financial results were reviewed by the Audit Committee on 30th July 2014 and then approved by the Board of Directors on 31st July 2014.
PRESS RELEASE
GREAVES
COTTON TURNOVER UP DESPITE WEAK MARKET MUMBAI
July 31, 2014
Greaves Cotton Limited, one of India’s leading engineering companies, has reported revenue of Rs. 4230.000 Millions for the quarter ended June 30, 2014 as against Rs 4120.000 Millions for the quarter ended June 2013. However, the Profit After Tax (PAT) has dropped marginally from Rs. 320.000 Millions to Rs. 290.000 Millions.
While the market continued to be subdued in the first quarter, some early signs of revival are being seen in the automotive segment. This positive sentiment is expected to drive faster growth towards the second half of the financial year.
Commenting on the results, Mr. Sunil Pahilajani, MD and CEO said "Our first quarter revenue growth reflects positive sentiment on market revival. In addition, the initiatives taken by the company for material cost improvement are also providing steady benefits."
The company saw improved performance in the 3 Wheeler segment. Genset segment transitioned to the new CPCB2 emission regime from July’14 and the company is expected to improve market positioning with the launch of its new efficient and cost competitive genset range.
Overall, our Engines Segment which is the dominant part of the company grew by 5% and its segment result increased by 9%. However, Infrastructure Equipment segment continued to suffer due to further decline in the industry.
As part of its endeavour to continuously improve customer engagement, the company also launched an IVR based toll free number offering customer support across all business areas during the first quarter.
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. 61.61 |
|
|
1 |
Rs. 99.11 |
|
Euro |
1 |
Rs. 78.89 |
INFORMATION DETAILS
|
Information
Gathered by : |
NYA |
|
|
|
|
Analysis Done by
: |
SUM |
|
|
|
|
Report Prepared
by : |
DPH |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--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 |
|
62 |
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.