MIRA INFORM REPORT
|
Report No. : |
332396 |
|
Report Date : |
16.07.2015 |
IDENTIFICATION DETAILS
|
Name : |
KENNAMETAL INDIA LIMITED |
|
|
|
|
Registered
Office : |
8/9 Mile, Tumkur Road, Bangalore - 560073, Karnataka |
|
Tel No. : |
91-80-28394321 |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
30.06.2014 |
|
|
|
|
Date of
Incorporation : |
21.09.1964 |
|
|
|
|
Com. Reg. No.: |
08-001546 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs. 219.800 Million |
|
|
|
|
CIN No.: [Company Identification
No.] |
L27109KA1964PLC001546 |
|
|
|
|
IEC No.: |
Not Available |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
BLRK05838A |
|
|
|
|
PAN No.: [Permanent Account No.] |
AACCK4472B |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacturer of hard metal products and machine tools |
|
|
|
|
No. of Employees
: |
841 (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 |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
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|
|
|
Comments : |
Subject is a subsidiary of “METURIT A.G. ZUG”, Switzerland. It is a well
–established company having fine track record. The rating reflects company’s established market position as the
largest player in the carbide tools industry in India supported by healthy
financial base and sound profitability margins of the company. Trade relations are reported as fair. Business is active. Payments are
reported to be regular and as per commitment. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31, 2015
|
Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CRISIL |
|
Rating |
Short term Debt = “A1+” |
|
Rating Explanation |
Very Strong degree of safety and carry lowest credit risk. |
|
Date |
05.09.2014 |
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
31-03-2013.
INFORMATION DENIED BY
|
Name : |
Mr. Ravindra Nayak |
|
Designation : |
Accounts Department |
|
Contact No.: |
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 : |
|
|
Website : |
|
|
|
|
|
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 30.06.2014
|
Name : |
Mr. M.N. Bhagwat |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Bhagya Chandra Rao |
|
Designation : |
Managing
Director |
|
|
|
|
Name : |
Mr.
Vinayak K. Deshpande |
|
Designation : |
Directors |
|
Date of Birth/Age : |
21.07.1957 |
|
Qualification : |
Chemical Engineer, IIT Kharagpur |
|
|
|
|
Name : |
Mr. Gerald Goubau |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr.
John Henry Jacko Jr |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr.
Michelle R. Keating |
|
Designation : |
Dorector |
|
|
|
|
Name : |
Mr.
B. Anjani Kumar |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Bhagya Chandra Rao |
|
Designation : |
Managing Director and CEO |
|
|
|
|
Name : |
Mr. D. Parameswara Reddy |
|
Designation : |
Vice President and CFO |
|
|
|
|
Name : |
Mr. Kundan Kumar Lal |
|
Designation : |
General Manager Legal and Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2015
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of
Promoter and Promoter Group |
||
|
|
|
|
|
|
|
|
|
|
16483680 |
75.00 |
|
|
16483680 |
75.00 |
|
Total shareholding
of Promoter and Promoter Group (A) |
16483680 |
75.00 |
|
(B) Public
Shareholding |
||
|
|
|
|
|
|
3262386 |
14.84 |
|
|
180 |
0.00 |
|
|
3262566 |
14.85 |
|
|
|
|
|
|
225212 |
1.03 |
|
|
|
|
|
|
1208235 |
6.54 |
|
|
441052 |
2.26 |
|
|
69544 |
0.32 |
|
|
59125 |
0.27 |
|
|
10419 |
0.05 |
|
|
1944043 |
10.15 |
|
Total Public
shareholding (B) |
5206609 |
25.00 |
|
Total (A)+(B) |
21690289 |
100.00 |
|
(C) Shares held by
Custodians and against which Depository Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
21690289 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of hard metal products and machine tools |
|
|
|
|
Products : |
Not Available |
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|
|
|
Brand Names : |
Not Available |
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|
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|
Agencies Held : |
Not Available |
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Exports : |
Not Divulged |
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|
|
|
Imports : |
Not Divulged |
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|
|
|
Terms : |
Not Divulged |
PRODUCTION STATUS = NOT AVAILABLE
GENERAL INFORMATION
|
Suppliers : |
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Customers : |
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No. of Employees : |
841 (Approximately) |
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Bankers : |
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Facilities : |
Not Available |
|
Auditors : |
|
|
Name : |
Price
Waterhouse and Company Chartered Accountants |
|
Address : |
5th floor, Tower “D”, The Millenia, 1 &
2 Murphy Road, Ulsoor, Bangalore – 560008, Karnataka, India |
|
|
|
|
Memberships : |
Not Available |
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|
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|
Collaborators : |
Not Available |
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|
|
Ultimate Holding
Company: |
Kennametal Inc, USA |
|
|
|
|
Immediate
Holding Company: |
Meturit A.G. Zug, Switzerland |
|
|
|
|
Enterprises
holding, directly or indirectly substantial interest in Meturit A.G. Zug : |
|
|
|
|
|
Fellow
Subsidiaries: |
Germany
Singapore
|
|
|
|
CAPITAL STRUCTURE
As on 30.06.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
21,978,240 |
Equity Shares |
Rs.10/- each |
Rs. 219.800 Million |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
21,978,240 |
Equity Shares |
Rs.10/- each |
Rs. 219.800
Million |
|
|
|
|
|
(a) Reconciliation of number of shares
outstanding:
|
Equity Shares |
No. of Shares |
Amount |
|
Share outstanding at the beginning of the year |
21978240 |
219.800 |
|
Shares outstanding at the end of the year |
21978240 |
219.800 |
(b) Rights,
preferences and restrictions attached to shares
The Company has only one class of equity shares having a par value of `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.
(c) Shares held by
ultimate holding company and holding company
|
Equity Shares |
No. of Shares |
Amount |
|
Kennametal Inc. USA, the ultimate holding company |
5274840 |
52.700 |
|
Meturit AG., Zug, Switzerland, the holding company |
11208840 |
112.100 |
(d) Details of shares
held by shareholders holding more than 5% of the aggregate shares in the
Company
|
Equity Shares |
No. of Shares |
% |
|
Kennametal Inc. USA, the ultimate holding company |
5274840 |
24.00% |
|
Meturit AG., Zug, Switzerland, the holding company |
11208840 |
51.00% |
|
Reliance Capital Trustee Company Limited |
2023837 |
9.21% |
Note:
(i) 1,520,450 (2013: 1,350,850) shares are held by Reliance Equity Opportunity Fund comprising 6.92% (2013:
6.15%) of the shareholding and 503,387 (2013: 495,841) shares are held by Reliance Tax Saver (ELSS) Fund comprising 2.29% (2013: 2.25%) of the shareholding.
FINANCIAL DATA
[all figures are
in Rupees Million]
ABRIDGED
BALANCE SHEET
|
SOURCES
OF FUNDS |
30.06.2014 |
30.06.2013 |
30.06.2012 |
|
|
|
|
|
|
I.
EQUITY AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
219.800 |
219.800 |
219.800 |
|
(b) Reserves & Surplus |
3114.200 |
2943.500 |
2795.000 |
|
(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) |
3334.000 |
3163.300 |
3014.800 |
|
|
|
|
|
|
(3) Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
88.800 |
93.500 |
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 |
0.000 |
0.000 |
93.600 |
|
Total
Non-current Liabilities (3) |
88.800 |
93.500 |
93.600 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
0.000 |
0.000 |
0.000 |
|
(b) Trade payables |
472.100 |
587.800 |
641.800 |
|
(c) Other current liabilities |
343.700 |
307.200 |
515.300 |
|
(d) Short-term provisions |
57.300 |
52.800 |
57.300 |
|
Total
Current Liabilities (4) |
873.100 |
947.800 |
1214.400 |
|
|
|
|
|
|
TOTAL |
4295.900 |
4204.600 |
4322.800 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
1138.700 |
1245.900 |
1290.800 |
|
(ii) Intangible Assets |
3.300 |
9.600 |
14.500 |
|
(iii) Capital work-in-progress |
52.200 |
126.100 |
106.500 |
|
(iv) Intangible assets under
development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
0.000 |
0.000 |
6.500 |
|
(c) Deferred tax assets (net) |
64.400 |
16.200 |
18.700 |
|
(d) Long-term Loan and Advances |
311.300 |
293.000 |
210.000 |
|
(e) Other Non-current assets |
6.300 |
6.900 |
6.600 |
|
Total
Non-Current Assets |
1576.200 |
1697.700 |
1653.600 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
0.000 |
6.500 |
0.000 |
|
(b) Inventories |
956.300 |
950.200 |
1033.600 |
|
(c) Trade receivables |
1078.300 |
886.800 |
1028.900 |
|
(d) Cash and cash equivalents |
566.000 |
537.100 |
448.300 |
|
(e) Short-term loans and
advances |
114.600 |
116.600 |
155.800 |
|
(f) Other current assets |
4.500 |
9.700 |
2.600 |
|
Total
Current Assets |
2719.700 |
2506.900 |
2669.200 |
|
|
|
|
|
|
TOTAL |
4295.900 |
4204.600 |
4322.800 |
PROFIT
& LOSS ACCOUNT
|
|
PARTICULARS |
30.06.2014 |
30.06.2013 |
30.06.2012 |
|
|
SALES |
|
|
|
|
|
Income |
5451.300 |
4897.700 |
5623.300 |
|
|
Other Income |
63.800 |
76.800 |
104.500 |
|
|
TOTAL
(A) |
5515.100 |
4974.500 |
5727.800 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
Cost of Materials Consumed |
1718.800 |
1451.800 |
1595.000 |
|
|
Purchases of Stock-in-Trade |
1190.200 |
1131.200 |
1277.200 |
|
|
Changes in inventories of
finished goods, work-in-progress and Stock-in-Trade |
(0.600) |
(1.500) |
(214.500) |
|
|
Employees benefits expense |
983.700 |
892.700 |
837.600 |
|
|
Other expenses |
1059.300 |
1037.600 |
1016.400 |
|
|
|
102.000 |
0.000 |
0.000 |
|
|
TOTAL
(B) |
5053.400 |
4511.800 |
4511.700 |
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
461.700 |
462.700 |
1216.100 |
|
|
|
|
|
|
|
Less/
Add |
DEPRECIATION/
AMORTISATION (F) |
265.900 |
266.900 |
226.700 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX (E-F) (G) |
195.800 |
195.800 |
989.400 |
|
|
|
|
|
|
|
Less |
TAX
(I) |
25.100 |
47.300 |
305.500 |
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) AFTER TAX (G-I)
(J) |
170.700 |
148.500 |
683.900 |
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD (K) |
1305.700 |
1328.800 |
1425.864 |
|
|
|
|
|
|
|
Less |
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 |
|
|
Total
(M) |
0.000 |
707.000 |
982.600 |
|
|
|
|
|
|
|
|
Balance
Carried to the B/S (J+K+L-M) |
1624.900 |
1454.200 |
1305.700 |
|
|
|
|
|
|
|
|
EARNINGS
IN FOREIGN CURRENCY |
466.300 |
536.800 |
418.300 |
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
Raw Materials |
1220.700 |
952.600 |
1151.800 |
|
|
Components and Stores parts |
199.000 |
135.000 |
131.700 |
|
|
Capital Goods |
39.900 |
135.600 |
282.400 |
|
|
TOTAL
IMPORTS |
1459.600 |
1223.200 |
1565.900 |
|
|
|
|
|
|
|
|
Earnings
/ (Loss) Per Share (Rs.) |
7.77 |
6.76 |
31.12 |
CURRENT MATURITIES OF LONG TERM DEBT DETAILS
|
Particulars |
30.06.2014 |
30.06.2013 |
30.06.2012 |
|
Current Maturities of Long term debt |
NA |
NA |
NA |
|
Cash generated from operations |
294.000 |
469.900 |
1206.100 |
|
Net Cash from / (used in) Operating activities |
107.900 |
327.900 |
687.400 |
QUARTERLY /
SUMMARISED RESULTS
|
Particulars (Rs. In
Million) |
Sep 2014 (1st Quarter) |
Dec 2014 (2nd Quarter) |
Mar 2015 (3rd Quarter) |
|
Audited / Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
Net Sales |
6.020 |
79.270 |
129.510 |
|
Total Expenditure |
6.390 |
79.580 |
129.980 |
|
PBIDT (Excl OI) |
(0.370) |
(0.310) |
(0.470) |
|
Other Income |
0.020 |
0.010 |
0.010 |
|
Operating Profit |
(0.350) |
(0.300) |
(0.046) |
|
Interest |
0.000 |
0.000 |
0.000 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
(0.350) |
(0.300) |
(0.046) |
|
Depreciation |
0.210 |
0.210 |
0.200 |
|
Profit Before Tax |
(0.560) |
(0.510) |
(0.660) |
|
Tax |
0.000 |
0.000 |
0.000 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
(0.560) |
(0.510) |
(0.660) |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
(0.560) |
(0.510) |
(0.600) |
KEY
RATIOS
|
PARTICULARS |
|
30.06.2014 |
30.06.2013 |
30.06.2012 |
|
Net Profit Margin (PAT/Sales) |
(%) |
3.13 |
3.03 |
12.16 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
4.68 |
4.82 |
23.61 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.06 |
0.06 |
0.33 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.00 |
0.00 |
0.00 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.11 |
2.64 |
2.20 |
STOCK
PRICES
|
Face Value |
Rs.10.00 |
|
Market Value |
Rs.818.75 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Million]
DEBT EQUITY RATIO
|
Particular |
30.06.2012 |
30.06.2013 |
30.06.2014 |
|
|
(Rs.
In Million) |
(Rs.
In Million) |
(Rs.
In Million) |
|
Share Capital |
219.800 |
219.800 |
219.800 |
|
Reserves & Surplus |
2795.000 |
2943.500 |
3114.200 |
|
Net
worth |
3014.800 |
3163.300 |
3334.000 |
|
|
|
|
|
|
long-term borrowings |
0.000 |
93.500 |
88.800 |
|
Short term borrowings |
0.000 |
0.000 |
0.000 |
|
Total
borrowings |
0.000 |
93.500 |
88.800 |
|
Debt/Equity
ratio |
0.000 |
0.030 |
0.027 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
30.06.2012 |
30.06.2013 |
30.06.2014 |
|
|
(Rs.
In Million) |
(Rs.
In Million) |
(Rs.
In Million) |
|
Sales |
5623.300 |
4897.700 |
5451.300 |
|
|
|
(12.903) |
11.303 |
NET PROFIT MARGIN
|
Net
Profit Margin |
30.06.2012 |
30.06.2013 |
30.06.2014 |
|
|
(Rs.
In Million) |
(Rs.
In Million) |
(Rs.
In Million) |
|
Sales |
5623.300 |
4897.700 |
5451.300 |
|
Profit |
683.900 |
148.500 |
170.700 |
|
|
12.16% |
3.03% |
3.13% |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of establishment |
Yes |
|
2] |
Constitution of the entity -Incorporation
details |
Yes |
|
3] |
Locality of the entity |
Yes |
|
4] |
Premises details |
No |
|
5] |
Buyer visit details |
-- |
|
6] |
Contact numbers |
Yes |
|
7] |
Name of the person contacted |
Yes |
|
8] |
Designation of contact person |
Yes |
|
9] |
Promoter’s background |
No |
|
10] |
Date of Birth of Proprietor / Partners /
Directors |
No |
|
11] |
Pan Card No. of Proprietor / Partners |
No |
|
12] |
Voter Id Card No. of Proprietor / Partners |
No |
|
13] |
Type of business |
Yes |
|
14] |
Line of Business |
Yes |
|
15] |
Export/import details (if applicable) |
No |
|
16] |
No. of employees |
Yes |
|
17] |
Details of sister concerns |
Yes |
|
18] |
Major suppliers |
No |
|
19] |
Major customers |
No |
|
20] |
Banking Details |
Yes |
|
21] |
Banking facility details |
No |
|
22] |
Conduct of the banking account |
-- |
|
23] |
Financials, if provided |
Yes |
|
24] |
Capital in the business |
Yes |
|
25] |
Last accounts filed at ROC, if applicable |
Yes |
|
26] |
Turnover of firm for last three years |
Yes |
|
27] |
Reasons for variation <> 20% |
-- |
|
28] |
Estimation for coming financial year |
No |
|
29] |
Profitability for last three years |
Yes |
|
30] |
Major shareholders, if available |
Yes |
|
31] |
External Agency Rating, if available |
Yes |
|
32] |
Litigations that the firm/promoter
involved in |
-- |
|
33] |
Market information |
-- |
|
34] |
Payments terms |
No |
|
35] |
Negative Reporting by Auditors in the
Annual Report |
No |
CONTINGENT LIABILITIES:
|
PARTICULARS |
30.06.2014 (Rs.
In Million) |
30.06.2013 (Rs.
In Million) |
|
Income
Tax matters [Note (a)] |
229.400 |
176.300 |
|
Excise
Duty/Service Tax matters under dispute |
10.100 |
11.100 |
|
Sales
Tax matters under dispute |
6.500 |
8.600 |
Notes:
a) Mainly relates to transfer pricing adjustments made by the Income Tax Department for the tax assessment years 2007-08, 2008-09, 2009-10 and 2010-11, 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. 177.400 Million (2013: `Rs.148.900 Million) to the Income Tax Department in this regard.
b) There are certain non-quantifiable industrial disputes pending before various judicial authorities.
c) Considering the very nature of the above contingent liabilities, the estimate/ timing of cash outflow, if any, is not readily ascertainable.
OPERATING RESULTS
The Company improved its operating results during FY14 with Sales and Other Income increasing by 10.86%
to Rs. 5515.100 Million compared with Rs.4974.5 Million in the previous year. Profit before Tax before Exceptional items was Rs. 297.800 Million as compared to Rs. 1958 Million in the previous year. The growth in Sales and Profit for the year was driven by improved demand for the products and growth initiatives undertaken by the Company. The Company does not have any subsidiaries.
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 and defense, 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”.
The Indian Economy continued to be subdued during the Financial Year 2013-2014 (FY14). The GDP growth for FY14 was again below the 5% level at 4.7% which was only marginally better than 4.5 % in FY13. The Index for Industrial Production (IIP) an important indicator of the manufacturing activity in the country, actually had a negative growth of (0.1%) as compared to 1.1% in FY13. One of the industries which has been adversely affected is the automobile industry, particularly the Medium and Heavy Commercial Vehicle (MandHCVs) segment. MandHCVs segment has shown a negative growth of 21% in FY14 after an even larger negative growth of 23 % in FY 13. This continued large decline has impacted The Company in a very negative manner, as tooling consumption is significant in the machining of parts which go into medium and heavy commercial vehicles. Continued slowdown
in the economy is largely on account of the poor macro-economic scenario and lack of adequate policy / growth initiatives at the center.
The Company has significant imports and hence any rupee depreciation has an impact on cost and profitability. During the financial year, the Indian Rupee was down to unprecedented levels, falling to levels of Rs. 68 in September 2013. In a poor economic environment where cost rationalization is the order of the day to the end customers the Company is unable to pass all the cost escalation to the customers.
OPERATIONS
During the Financial Year 2013-2014, The Company has delivered a growth of 11% despite the negative growth in the manufacturing sector. This was primarily driven by special initiatives in each of the business verticals. The Hard Metals business grew by 14% and MSG grew by 1.8%. Implementation of our dual brand strategy of Kennametal and WIDIA is complete with 100% separation of customers and distributors. Kennametal would serve the customers both directly and indirectly backed by component specific and other high end solutions to the customers where as WIDIA would serve the customers through distributors, focusing on standards and simple specials through enhanced reach. As part of the strategy new distributors have been brought on board under both Kennametal and WIDIA brands to make sure that each brand is adequately represented across the country. Some of the initiatives such as productivity optimization services, tools management services have met good success both in terms of obtaining new business as well as retaining the existing business. Product transfer and localization initiatives started in FY13 gained momentum and contributed for the growth in FY14. Focused business initiatives like Extrude Hone and Conforma Clad are expected to do better in forthcoming years. The following initiatives launched in FY14 in the hard metals segment to grow the business are worth noting:
1. Component Specific solutions:
The Company intends to build competency in certain key components of high volume which are manufactured by its customers. The objective of the Company is to “own” these key components through the development and application of the “total solutions” (production process input, tool supply and appropriate service support)
required to effectively and efficiently produce them for our customers.
2. Stellram product portfolio introduction:
Stellram product portfolio has been brought into Kennametal basket through the TMB acquisition globally by Kennametal Inc. This product portfolio improves Kennametal’s metal cutting and metal finishing product offerings. Stellram draws on the advanced RandD capabilities to provide “Best in Class” machining solutions for the aerospace, defense, power generation and medical industries. This is a strategic fit for The Company.
3. NOVO deployment.
NOVO is a process enabler as a digital assistant with data-rich machining strategies that starts working from the moment a parts drawing is received from a Customer. With a refined and intuitive tool advisor, tool selector, and tool configurator, everything down the line gets more efficient—from parts quoting through programming, presetting, and production. NOVO is process knowledge delivered via the cloud. Customers are able to access NOVO via a PC application and tablet solutions.
The Company believes that these initiatives would yield good results for the Company in the long run.
The Machining Solutions Group (MSG) once again had a record year with a sale of Rs. 10184 Million, which is the highest ever sale achieved during a year. The MSG continues to work effectively with growing customers to grow the sales and gain market share in special purpose machines.
In FY14 specific customers were targeted to grow
the sales and market. Numerous “roadshows” and “technology days” were organised at specific customer locations. These “roadshows” and “technology days” enhanced our brand image and visibility besides generating more business From the customers. Besides these events The Company actively engaged with customers through the knowledge center imparting training on tools and products.
Our overall long term strategy to have >40% of the sales from the new products continues to sustain. In FY14 we had close to 42% of hard metals revenue from new products i.e. the products introduced with in the last five years. Capacity utilization improved quite a bit in FY14 on account of better sales and there exists an opportunity to produce even more in a few product lines. The capital investment during the year has been low as The Company believes that the existing capacity would meet the requirement of the customers for the forthcoming financial year (FY15) as well.
The Company remains focused on operational excellence to improve operating efficiencies. In order to take the operational excellence model to the next level the “K 100 Operating System“ has been launched in FY14. The “K100 Operating System” is a comprehensive and balanced approach to assessing an organization against necessary practices to achieve operational excellence. The goal is to bring the organization up to the level of the best performing organizations through the deployment of global solutions and best practices.
The Company as in the past has been bestowed with many awards. To name a few:
- Kennametal Value Business System (KVBS) lean award by Kennametal Inc. for a project on “Prevention of Spindle Failure of KAVO Stators”
- Award by National Institute of Quality and Reliability for “Grade Rationalization “
- Award by Symbiosis Centre of Management and Human Resource Development (SCMHRD) for six sigma project on “Grinding Cycle Time Reduction in Anca cell”
COMPANY’S OUTLOOK
With the new Government taking charge with a clear mandate from the electorate, the investor sentiment has improved. During April-June 2014 quarter the GDP has grown by 5.7% vs 4.4% in the same quarter last year. The car sales – a key barometer of consumer sentiment expanded in double digits between April to June 2014. FII inflows over January to July 2014 touched $26.5 billion and FDI exceeds $17 billion in the first 5 months of the calendar year which is 25% higher than the same period last year. The new Government has also initiated the process of clearing the massive backlog of stalled investment projects. With several initiatives and reforms for economic growth expected in the upcoming budget session of the parliament, there is optimism in the coming days for the Indian economy.
While these initiatives would yield results in the long term, the short term outlook seems to be cautiously optimistic. The general expected GDP growth is in the range of 5 to 5.5% for the year 2014-15.
Since the recovery would be a slow process on the economic front, The Company continues to focus on special initiatives for FY15 to grow the sales (as in FY14). The Tungsten Materials Business (TMB) and Emura acquisitions globally by Kennametal Inc., would benefit Kennametal India Limited (KIL) in the long run with accessibility to high quality raw materials and the best carbide recycling technologies. The TMB acquisition has brought in the Stellram product portfolio to KIL which would benefit The Company to get better market share in the energy and aerospace sectors .The Company has been engaged in moving up the value chain in the infrastructure side of the business by focusing on more value added products and phasing out commodity products with lower profitability.
Exports to Asian markets has seen impressive growth in FY14 and The Company believes that this market will further expand in FY15 to grow the hard metals exports business. Besides the hard metal products there is a good opportunity to grow our Machine Tools Business in South Asian markets. This initiative started off in FY14 and needs to be developed further to sustain the growth rates delivered by the Machining Solutions Group (MSG) business over a period of four years.
FINANCIAL PERFORMANCE
During FY14, The Company has delivered a sale of Rs. 5451.300 Million compared to Rs. 4897.700 Million in FY13. This translates into a Year Over Year (YOY) growth of 11%. The Hard metals segment grew faster than the MSG segment. Hard metals recorded a 14% growth primarily driven by exports and market share gain. Specific efforts to improve export sales to the Asia Pac region have shown encouraging results for the Company. Profit before tax and exceptional items grew by 52% to Rs. 298.000 Million from Rs. 1960 Million. This improvement is significant considering the fact that the Company had to bear an increase in raw materials costs to the extent of Rs. 90.000 Million on account of the rupee further deprecating from Rs. 55 levels in FY13 to Rs. 61 levels in FY14. The improvement in profitability has been primarily driven by the volumes leverage supported by many cost containment/reduction initiatives taken up during the year.
The Company actively pursued its efforts in bringing down the spiraling energy costs during the financial year. As a result The Company is in the process of executing a project to utilize the grid power more effectively by installing UPS system across the factory. With this initiative the Company would save around Rs. 30.000 Million every year and this savings would start flowing in from FY15 onwards.
The Company continues to aggressively pursue the localization efforts and also use India as a low cost production location for exporting to other markets in the world particularly Asia. This effort besides improving the capacity utilization should help the Company in Forex risk mitigation. In the year under review the MSG business growth softened after witnessing double digit growth for four years in row. The YOY growth was 1.8% compared to 23% in FY13. The decline in growth rates is primarily on account of delay or postponement of projects by our customers. The Company continues to evaluate the market scenario to respond in a quick and appropriate manner to the changing market requirement and trends.
The Company continues to maintain optimized working capital deployment into the business. On account of surge in MSG receivables the DSO (Days of Sales Outstanding) has also increased by 3 days to 63 in comparison to the prior year. Special emphasis was given to reduce the aging of the receivables during the year because of which The Company’s receivable beyond 60 days has been reduced to 16% compared to 18% in FY13. The Company continues to maintain strong collection trends as in the past despite liquidity challenges in the market place. The Company did not have to write off any receivables in last eight years which is a notable achievement.
During FY14, a project was undertaken to directly ship products to the end customers from the originating warehouse instead of routing through Bangalore warehouse to serve the dual purpose of quicker deliveries and reduction of finished goods inventory. Because of this project The Company has been able to reduce the traded goods inventory by more than Rs. 300 Million. Inventory and Accounts Payable as a percentage to sales have been at 18% and 16% respectively for FY14. Prudent expense and working capital management has ensured a significant improvement in profitability and Return on Capital Employed in the current financial year over the previous year.
STATEMENT OF STANDALONE UNAUDITED RESULT
FOR THE QUARTER AND HALF YEAR ENDED MARCH 2015
(Rs. In
Million)
|
Particulars |
Year to date figure current period ended |
|
|
31.03.2015 |
|
1.
Income from operations |
(Unaudited) |
|
a) Net sales/ Income from operation (net of excise duty) |
4122.700 |
|
b) Other operating income |
1.600 |
|
Total
income from Operations(net) |
4124.300 |
|
2.Expenditure |
|
|
a) Cost of raw material consumed |
1246.400 |
|
b) Purchases of stock in trade |
962.700 |
|
c) Changes in inventories of finished goods,
work-in-progress and stock-in-trade |
-57.600 |
|
d) Employees benefit expenses |
756.300 |
|
e) Depreciation and amortization expenses |
197.000 |
|
f) Other expenditure |
830.900 |
|
Total expenses |
3935.700 |
|
3.
Profit from operations before other income and interest and Exceptional Items |
188.600 |
|
4. Other income |
53.400 |
|
5.
Profit before Interest and Exceptional Items (3+4) |
242.000 |
|
6. Finance costs |
-- |
|
7. Profit after Interest and
Finance Charges |
242.000 |
|
8. Exceptional item |
-- |
|
9. Profit from ordinary
activities before tax Expense: (7+8) |
242.000 |
|
10.Tax expenses |
65.600 |
|
11.Net Profit / (Loss) from ordinary
activities after tax (9-10) |
176.400 |
|
12.Extraordinary Items (net of
Tax) |
-- |
|
13. Net
Profit / (Loss) for the period (11 -12) |
176.400 |
|
14. Paid-up equity share capital (Nominal value
Re. 1/- per share) |
2198 |
|
15i. Earing per share (not
annualized) |
|
|
Basic |
8.03 |
|
Diluted |
8.03 |
|
|
|
|
20. Particulars of shareholding |
|
|
- Number of shares |
5494560 |
|
- Percentage of shareholding |
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 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
100.00 |
|
Percentage of shares (as a % of total share capital of the
company) |
75.00 |
|
B |
INVESTOR COMPLAINTS
[Nos.] |
3 months ended
31.3.2015 |
|
|
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 |
Year to date figure current period ended |
|
1 |
Segment Revenue |
31.03.2015 |
|
|
Net Sales |
|
|
|
Machine Tools |
617.200 |
|
|
Hard Metal and Hard Metal Products |
3507.100 |
|
|
Net Sales/ Income
from Operations |
4124.300 |
|
|
|
|
|
2 |
Segment Results |
|
|
|
Machine Tools |
83.300 |
|
|
Hard Metal and Hard Metal Products |
332.300 |
|
|
Total |
415.600 |
|
|
Exceptional and other non recurring items |
|
|
|
Other Unallocable Expenditure (net of income) |
173.600 |
|
|
Total Profit before
Tax |
242.000 |
|
|
|
|
|
3. |
Capital Employed |
|
|
|
Machine Tools |
100.700 |
|
|
Hard Metal and Hard Metal Products |
2134.00 |
|
|
Unallocated |
1275.700 |
|
|
Total Capital
Employed |
3510.400 |
Note
:
1. The unaudited financial results for the quarter and nine months ended March 31, 2015 were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on May 5, 2015.
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. Other expenses for the quarter include Rs. 33,271,376 relating to trade
shows and exhibitions (incurred once every two years).
5. Other expenses for the quarter include Rs. 4,485,283 towards expenses
incurred for Corporate Social Responsibility (CSR) activities.
6. Previous quarter's / year's figures have been regrouped wherever necessary
to conform to current quarter's / year's classification.
INDEX OF CHARGES
|
S.No. |
Charge ID |
Date of Charge Creation/Modification |
Charge amount secured |
Charge Holder |
Address |
Service Request Number (SRN) |
|
1 |
80067518 |
23/02/2004 |
295,000,000.00 |
CORPORATION BANK |
QUEENS ROAD , , BANGALORE , Karnataka - 560001, INDIA |
- |
* Date of charge modification
FIXED ASSETS
- Land
- Buildings
- Plant and
Machinery:
Ø Data Processing
Ø Equipment
Ø Others
- Furniture and
Fixtures
- Leasehold
Improvements
- Office
Equipment
- Vehicles
CMT REPORT (Corruption, Money Laundering and 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.63.38 |
|
|
1 |
Rs.99.13 |
|
Euro |
1 |
Rs.69.68 |
INFORMATION DETAILS
|
Information
Gathered by : |
PRT |
|
|
|
|
Analysis Done by
: |
KAR |
|
|
|
|
Report Prepared
by : |
JYTK |
SCORE and 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 |
|
--PROFITABILITY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--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 |
|
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 and 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.