MIRA INFORM REPORT
|
Report No. : |
321973 |
|
Report Date : |
12.05.2015 |
IDENTIFICATION DETAILS
|
Name : |
MRF LIMITED |
|
|
|
|
Registered
Office : |
New No. 114, (Old
No. 124), Greams Road, Chennai – 600006, Tamilnadu |
|
Tel. No.: |
91-44-28292777 |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
30.09.2014 |
|
|
|
|
Date of
Incorporation : |
05.11.1960 |
|
|
|
|
Com. Reg. No.: |
18-004306 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.42.400
Million |
|
|
|
|
CIN No.: [Company Identification
No.] |
L25111TN1960PLC004306 |
|
|
|
|
TIN No.: |
Not Available |
|
|
|
|
IEC No.: |
Not Available |
|
|
|
|
TAN No.: [Tax Deduction & Collection
Account No.] |
CHEM07088E CHEM06754G CHEM04457F |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACM4154G |
|
|
|
|
Legal Form : |
A Public Limited Liability Company.
The Company’s Shares are Listed on the Stock Exchanges. |
|
|
|
|
Line of Business
: |
The Company is engaged mainly in the manufacture of Rubber Products such as Tyres, Tubes, Flaps, Tread Rubber and Conveyor Belt. |
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|
|
|
No. of Employees
: |
Information denied by management |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa (80) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 130000000 |
|
|
|
|
Status : |
Excellent |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Exist |
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|
Comments : |
Subject is an India’s largest manufacturer of automotive tyres and tubes.
It is a well-established and reputed company having excellent track record. The rating reflects MRF’s strong market leadership position in the
domestic tyre industry characterized by presence across all the user segments
with significant market aided by wide distribution network, strong brand
image with diverse product offering. Further rating also reflects strong
liquidity position and decent profitability levels. Trade relations are reported as fair. Business is active. Payments are
reported to be regular and as per commitments. The company can be considered good for normal business dealings at
usual trade terms and conditions. |
ECGC Country Risk Classification List – December 31, 2014
|
Country Name |
Previous Rating (30.09.2014) |
Current Rating (31.12.2014) |
|
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 |
ICRA |
|
Rating |
Non-Convertible Debenture = AA+ |
|
Rating Explanation |
High degree of safety and very high credit
risk |
|
Date |
March 2015 |
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 (Tel No.: 91-44-28292777)
LOCATIONS
|
Registered Office : |
New No. 114, (Old
No. 124) Greames Road, Chennai – 600006, Tamilnadu, India |
|
Tel. No.: |
91-44-28292777 |
|
Fax No.: |
91-44-28295087/ 28294089
/ 28291844/ 0562 |
|
E-Mail : |
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|
Website : |
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|
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|
Factory 1: |
Tiruvottiyur, Chennai, |
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|
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Factory 2: |
Vadavathoor, |
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Factory 3: |
Usgao, Ponda, |
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Factory 4: |
Icchiputhur, Arakonam, |
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Factory 5: |
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Factory 6: |
Sadasivapet, Medak, Andhra Pradesh, India |
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Factory 7: |
Naranamangalam Village and Post, Kunnam Taluk, Perambalur District, (Near Trichy) Tamilnadu, India |
DIRECTORS
As on 30.09.2014
|
Name : |
Mr. K.M. Mammen |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. Arun Mammen |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. K.M. Philip |
|
Designation : |
Whole-time Director |
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|
|
|
Name : |
Mr. Rahul Mammen Mappillai |
|
Designation : |
Whole-time Director |
|
|
|
|
Name : |
Dr. K.C. Mammen |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ashok Jacob |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. V. Sridhar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Vijay R. Kirloskar |
|
Designation : |
Director |
|
|
|
|
Name : |
N. Kumar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ranjit I. Jesudasen |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Salim Joseph Thomas |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Jacob Kurian |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. M. Meyyappan |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Ravi Mannath |
|
Designation : |
Company Secretary |
SHAREHOLDING PATTERN
As on 31.03.2015
|
Category of
Shareholder |
No. of Shares |
Percentage
of Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
555455 |
13.10 |
|
|
583505 |
13.76 |
|
|
1138960 |
26.86 |
|
|
|
|
|
|
19619 |
0.46 |
|
|
19619 |
0.46 |
|
Total shareholding of Promoter and Promoter Group (A) |
1158579 |
27.32 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
225711 |
5.32 |
|
|
9352 |
0.22 |
|
|
152540 |
3.60 |
|
|
400939 |
9.45 |
|
|
788542 |
18.59 |
|
|
|
|
|
|
1115167 |
26.29 |
|
|
|
|
|
|
788160 |
18.58 |
|
|
390695 |
9.21 |
|
|
2294022 |
54.09 |
|
Total Public shareholding (B) |
3082564 |
72.68 |
|
Total (A)+(B) |
4241143 |
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) |
4241143 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
The Company is engaged mainly in the manufacture of Rubber Products such as Tyres, Tubes, Flaps, Tread Rubber and Conveyor Belt. |
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Products : |
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Brand Names : |
-- |
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Agencies Held : |
-- |
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Exports : |
Not Divulged |
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Imports : |
Not Divulged |
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Terms : |
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Selling : |
Not Divulged |
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Purchasing : |
Not Divulged |
PRODUCTION STATUS – NOT AVAILABLE
GENERAL INFORMATION
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Suppliers : |
Not Divulged |
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Customers : |
Not Divulged |
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No. of Employees : |
15343 (Approximately) |
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Bankers : |
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Facilities : |
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Auditors : |
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|
Name 1 : |
Sastri and Shah Chartered
Accountants |
|
Address : |
Chennai,
Tamilnadu, India |
|
|
|
|
Name 2 : |
M. M. Nissim and
Company Chartered
Accountants |
|
Address : |
Mumbai,
Maharashtra, India |
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|
|
Memberships : |
-- |
|
|
|
|
Collaborators : |
-- |
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|
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Subsidiary : |
|
CAPITAL STRUCTURE
As on 30.09.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
9000000 |
Equity Shares |
Rs.10/- each |
Rs.90.000 Million |
|
100000 |
Taxable, Redeemable Cumulative Preference Shares |
Rs.100/- each |
Rs.10.000 Million |
|
|
Total |
|
Rs.100.000
Million |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
4241143 |
Equity Shares |
Rs.10/- each |
Rs.42.400
Million |
Rights, preferences
and restrictions attached to shares
The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the 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, in proportion to their shareholding.
Details of equity shares held by shareholders holding more than 5%
shares:
|
Name of
Shareholder |
Number
of Shares |
|
Comprehensive Investment and Finance Company Private Limited |
437243 |
|
MOWI Private Limited |
507984 |
|
Enam Shares and Securities Private Limited |
267626 |
FINANCIAL DATA
[all figures are
in Rupees Million]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
30.09.2014 |
30.09.2013 |
30.09.2012 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
42.400 |
42.400 |
42.400 |
|
(b) Reserves & Surplus |
45134.000 |
36409.000 |
28535.600 |
|
(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) |
45176.400 |
36451.400 |
28578.000 |
|
|
|
|
|
|
(3)
Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
11987.500 |
9524.600 |
11027.100 |
|
(b) Deferred tax liabilities (Net) |
2353.100 |
2223.100 |
1867.200 |
|
(c) Other long term
liabilities |
11448.400 |
10432.300 |
9080.300 |
|
(d) long-term
provisions |
918.500 |
752.400 |
872.900 |
|
Total Non-current
Liabilities (3) |
26707.500 |
22932.400 |
22847.500 |
|
|
|
|
|
|
(4)
Current Liabilities |
|
|
|
|
(a) Short term
borrowings |
6162.500 |
4762.300 |
5287.200 |
|
(b) Trade
payables |
11397.200 |
10214.300 |
9394.300 |
|
(c) Other
current liabilities |
5392.900 |
5522.300 |
4543.300 |
|
(d) Short-term
provisions |
3133.100 |
2690.700 |
1472.400 |
|
Total Current Liabilities
(4) |
26085.700 |
23189.600 |
20697.200 |
|
|
|
|
|
|
TOTAL |
97969.600 |
82573.400 |
72122.700 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1)
Non-current assets |
|
|
|
|
(a) Fixed
Assets |
|
|
|
|
(i)
Tangible assets |
34216.500 |
29641.500 |
29078.100 |
|
(ii)
Intangible Assets |
70.400 |
53.900 |
59.900 |
|
(iii)
Capital work-in-progress |
6266.700 |
3591.200 |
4146.500 |
|
(iv)
Intangible assets under development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
1517.600 |
846.800 |
715.400 |
|
(c) Deferred tax assets (net) |
2242.700 |
1381.200 |
572.300 |
|
(d) Long-term Loan and Advances |
0.000 |
0.000 |
0.000 |
|
(e) Other
Non-current assets |
421.100 |
348.900 |
304.600 |
|
Total Non-Current
Assets |
44735.000 |
35863.500 |
34876.800 |
|
|
|
|
|
|
(2)
Current assets |
|
|
|
|
(a)
Current investments |
9361.500 |
8214.800 |
3531.700 |
|
(b)
Inventories |
17997.000 |
17952.900 |
16455.900 |
|
(c) Trade
receivables |
17084.700 |
15561.400 |
14540.900 |
|
(d) Cash and
cash equivalents |
7076.700 |
3308.100 |
611.000 |
|
(e)
Short-term loans and advances |
1367.500 |
1451.400 |
2034.200 |
|
(f) Other
current assets |
347.200 |
221.300 |
72.200 |
|
Total
Current Assets |
53234.600 |
46709.900 |
37245.900 |
|
|
|
|
|
|
TOTAL |
97969.600 |
82573.400 |
72122.700 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
30.09.2014 |
30.09.2013 |
30.09.2012 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
131975.800 |
121311.600 |
118701.800 |
|
|
|
Other Income |
656.200 |
290.300 |
320.100 |
|
|
|
TOTAL (A) |
132632.000 |
121601.900 |
119021.900 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials Consumed |
82989.000 |
78008.300 |
83442.700 |
|
|
|
Purchases of Stock-in-Trade |
612.200 |
1251.300 |
264.800 |
|
|
|
Changes in inventories of finished goods, work-in-progress
and Stock-in-Trade |
191.800 |
(267.300) |
(178.300) |
|
|
|
Employees benefits expense |
7326.900 |
6034.900 |
5136.900 |
|
|
|
Other expenses |
21576.500 |
18618.000 |
17425.700 |
|
|
|
TOTAL (B) |
112696.400 |
103645.200 |
106091.800 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
19935.600 |
17956.700 |
12930.100 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
2315.800 |
1959.400 |
1587.800 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
17619.800 |
15997.300 |
11342.300 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
4230.900 |
3729.300 |
3011.100 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
13388.900 |
12268.000 |
8331.200 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
4410.000 |
4245.900 |
2607.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
8978.900 |
8022.100 |
5723.600 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
On account of export sales
(FOB Value) |
12231.900 |
12237.700 |
12805.500 |
|
|
|
Freight and Insurance |
100.500 |
81.400 |
0.000 |
|
|
|
Interest |
0.000 |
0.100 |
0.000 |
|
|
|
Others |
15.700 |
10.200 |
12.800 |
|
|
TOTAL EARNINGS |
12348.100 |
12329.400 |
12818.300 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
34097.000 |
30377.000 |
31175.700 |
|
|
|
Stores & Spares |
599.700 |
417.900 |
412.400 |
|
|
|
Capital Goods |
4158.500 |
868.800 |
1448.200 |
|
|
TOTAL IMPORTS |
38855.200 |
31663.700 |
33036.300 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
2117.09 |
1891.49 |
1349.54 |
|
QUARTERLY RESULTS
|
Particulars |
|
31.12.2014 (Unaudited) |
31.03.2015 (Unaudited) |
|
|
|
1st
Quarter |
2nd
Quarter |
|
Net Sales |
|
335301.000 |
331203.000 |
|
Total Expenditure |
|
272668.000 |
268208.000 |
|
PBIDT (Excl OI) |
|
62633.000 |
62995.000 |
|
Other Income |
|
2562.000 |
2074.000 |
|
Operating Profit |
|
65195.000 |
65069.000 |
|
Interest |
|
6019.000 |
6365.000 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
PBDT |
|
59176.000 |
58704.000 |
|
Depreciation |
|
11600.000 |
10942.000 |
|
Profit Before Tax |
|
47576.000 |
47762.000 |
|
Tax |
|
15225.000 |
14500.000 |
|
Provisions and contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
32351.000 |
33262.000 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
32351.000 |
33262.000 |
KEY RATIOS
|
PARTICULARS |
|
30.09.2014 |
30.09.2013 |
30.09.2012 |
|
Net Profit Margin (PAT/Sales) |
(%) |
6.80 |
6.61 |
4.82 |
|
|
|
|
|
|
|
Operating Profit Margin (PBDIT/Sales) |
(%) |
15.11 |
14.80 |
10.89 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
15.22 |
15.98 |
12.49 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.30 |
0.34 |
0.29 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.40 |
0.39 |
0.57 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.04 |
2.01 |
1.80 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Million]
DEBT EQUITY RATIO
|
Particular |
30.09.2012 |
30.09.2013 |
30.09.2014 |
|
|
Rs.
In Million |
Rs.
In Million |
Rs.
In Million |
|
Share Capital |
42.400 |
42.400 |
42.400 |
|
Reserves & Surplus |
28535.600 |
36409.000 |
45134.000 |
|
Money received against share
warrants |
0.000 |
0.000 |
0.000 |
|
Share Application money pending
allotment |
0.000 |
0.000 |
0.000 |
|
Net
worth |
28578.000 |
36451.400 |
45176.400 |
|
|
|
|
|
|
long-term borrowings |
11027.100 |
9524.600 |
11987.500 |
|
Short term borrowings |
5287.200 |
4762.300 |
6162.500 |
|
Total
borrowings |
16314.300 |
14286.900 |
18150.000 |
|
Debt/Equity
ratio |
0.571 |
0.392 |
0.402 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
30.09.2012 |
30.09.2013 |
30.09.2014 |
|
|
Rs.
In Million |
Rs.
In Million |
Rs.
In Million |
|
Sales |
118,701.800 |
121,311.600 |
131,975.800 |
|
|
|
2.199 |
8.791 |
NET PROFIT MARGIN
|
Net
Profit Margin |
30.09.2012 |
30.09.2013 |
30.09.2014 |
|
|
Rs.
In Million |
Rs.
In Million |
Rs.
In Million |
|
Sales
|
118,701.800 |
121,311.600 |
131,975.800 |
|
Profit |
5,723.600 |
8,022.100 |
8,978.900 |
|
|
4.82% |
6.61% |
6.80% |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
No |
|
8] |
No. of employees |
No |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
----------- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
No |
|
21] |
Market information |
---------- |
|
22] |
Litigations that the firm
/ promoter involved in |
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 |
No |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
No |
LITIGATION DETAILS
|
UNSECURED LOAN:
|
Particulars |
30.09.2014 Rs.
In Million |
30.09.2013 Rs.
In Million |
|
LONG TERM
BORROWINGS |
|
|
|
Term Loan from a Bank: |
|
|
|
External Commercial Borrowings(ECB) |
1849.300 |
0.000 |
|
Buyers Line of Credit |
1452.000 |
0.000 |
|
Fixed Deposits |
275.300 |
314.900 |
|
Sales Tax Deferral Scheme |
551.200 |
618.400 |
|
Others Deferred Payment Credit Amounts disclosed under the head ‘Other Current Liabilities’ |
113.500 |
195.100 |
|
SHORT TERM
BORROWINGS |
|
|
|
Buyer’s Line of Credit |
0.000 |
559.300 |
|
Total |
4241.300 |
1687.700 |
Nature of security: Secured by hypothecation of stock-in-trade, stores
and spare parts and book debts
FINANCIAL RESULTS
During the year,
the Company’s total income increased by around 9.14% to Rs. 1471.400 Million
from Rs.1348.200 Million in the previous year. There was an increase of 5% in
total tyre production in all segments. The major factors affecting the
performance of the Indian tyre industry are the sluggish growth of the economy,
interest rates, fuel prices, natural rubber prices and import duty on rubber.
In the year prices of natural rubber and fuel prices have softened. However,
this benefit got partly offset by increase in overheads like wages, freight
etc. This apart, the Company could achieve improved results, due to improved operating
efficiencies and cost reduction measures which the Company has undertaken over
a period of time.
Two interim
dividends of Rs.3 each per share (30% each) for the year ended 30th September,
2014 were declared by the Board of Directors on 23.07.2014 and on 30.10.2014.
The Board of Directors is now pleased to recommend a final dividend of Rs. 44
per share (440%) on the paid-up equity share capital of the Company, for
consideration and approval of the shareholders at the Annual General Meeting.
With this, the total dividend for the entire year works out to Rs.50 per share
(500%). The total amount of dividends aggregates to Rs. 212.000 Million.
The Directors
recommend that after making provision for taxation, debenture redemption
reserve and proposed dividend, an amount of Rs.8659.900 Million be transferred
to general reserve. With this, the Company’s Reserves and Surplus stands at
Rs.45134.000 Million.
CORPORATE
GOVERNANCE
In
accordance with Clause 49 of the listing agreement with the stock exchanges, a
separate report on corporate governance along with the Auditors’ certificate
confirming compliance is attached to this report. The Chairman & Managing
Director has confirmed and declared that all the members of the Board and the
senior management have affirmed compliance with the code of conduct.
MANAGEMENT
DISCUSSION AND ANALYSIS
(Within
the limits set by the Company’s competitive position) The core business of MRF
is manufacturing, distribution and sale of tyres for various kinds of vehicles.
The management discussion and analysis given below discusses the key issues for
various sectors of the business.
TYRE INDUSTRY
STRUCTURE AND DEVELOPMENT
The
Indian economy had a challenging year in fiscal 2013-14, ending with an annual
growth rate of around 4.7%, fractionally higher than in the previous year. The
growth was subdued because of poor performance of the mining, manufacturing,
construction, trade, hotels, and transport, storage and communication services
sectors. According to CMIE, the growth in India’s real GDP is expected to
improve to 5.5% in 2014-15 with the Industrial sector projected to show an
acceleration. Investment demand in India is likely to pick up gradually in
2014-15 as more projects are cleared and land acquisition process becomes easier
post implementation of the new land acquisition act. Fast tracking of new
projects is expected to boost construction activity, generate new employment
and create fresh demand for cement, steel and machinery. Consequently, this is
expected in turn, to boost demand for the automotive sector especially for
commercial vehicles. Since the demand for tyres as a category is a function of
the overall growth of the economy, particularly growth in the automotive and
transportation sectors, this augurs well for the tyre industry in the new
fiscal.
The
turnover of the Indian tyre industry is estimated to be around Rs.470000.000
Million in 2013-14 and is dominated largely by the commercial vehicle segment
consisting of heavy, light and small commercial vehicles. The next largest
segment is passenger vehicles constituted by cars, SUV’s, motorcycles and
scooters. The Farm and Off the Road (OTR) segments consisting of the tractor
front and rear tyres, tractor trailers and OTR tyres are the other important
segments in the market. Traditionally, tyres are classified as cross-ply (bias)
and radial based on the technology deployed in their manufacture. In India, the
commercial tyre segment continues to be dominated by cross-ply tyres due to
road conditions, loading patterns and the high initial cost of radials. There
is a steady growth in radialisation across segments with the highest in
passenger cars (98%) followed by heavy commercial vehicles (25%) and light
commercial vehicles
(22%).
The
tyre industry consists of three distinct markets namely replacement,
institutional/OEM and exports. By value, replacement accounts for approximately
60% of the industry with Institutional/OEM and exports making up 22% and 18%
respectively. While in the commercial and farm segments replacement sales forms
a major chunk, both Institutional/OEM and replacement sales play an almost
equal role in the passenger segment. Of the total tyres produced in India, the
top ten tyre companies account for nearly 90% of the volume. The tyre industry
provides direct and indirect employment to more than a million people,
comprising of dealers, retreaders and truck operators. The trucking business is
controlled by nearly 2.6 million small operators.
The major factors
affecting the performance of the Indian tyre industry are the sluggish growth
of the economy, interest rates, fuel prices, natural rubber prices and import
duty on rubber. The tyre industry is also directly affected by the performance
of the vehicle manufacturing sector which in turn is dependent on the overall
economic growth. During 2013-14, there has been a dip of 8% in the production
of both light and heavy commercial vehicles while the drop was a sharp 37% in
the newly emerging small commercial vehicle segment. Passenger car production
also saw a decrease of 3%, whereas SUV’s registered an increase of 9% over the
previous year. In two wheelers, scooters witnessed a 33% increase whilst
motorcycle production grew at 12%. The farm sector also recorded an 8% increase
in production over 2012-13.
OPPORTUNITIES AND
THREATS
The
worldwide recession is giving way to growth and the global economic recovery
has started, albeit very slowly. The hope of better performance in the coming
years should bring some cheer to Indian companies as the present economic
outlook in India, though yet somewhat uncertain, is optimistic about robust
growth.
In
recent years, several multinational tyre companies have entered the Indian
market with significant investments and this development will intensify
competition and could potentially cause a glut in the Indian market in the near
future.
Despite
several representations to the government, the inverted tax issue is yet to be
resolved. It is imperative that duty concessions should be extended to the
imports of raw materials by the tyre manufacturers as their performance is
impacted by key raw material costs like those of natural rubber and petroleum
derivatives. At present, rubber and crude oil prices are weak and this will
ease the strain on the margins of tyre companies in the short run. However, a
permanent reduction in rubber import duties is required to ensure long term
health of the Indian tyre industry as price volatility of key raw materials
could return and clearly, there are limits as to how much of such cost escalations
can be passed on to the end customers, especially to OEMs/institutional buyers,
who are extremely price sensitive.
SEGMENT WISE AND
PRODUCT WISE PERFORMANCE
During
the period 2013-14, MRF achieved a sales turnover of Rs. 1464.100 million. This
is an increase of 8.9% over the previous year. Across the board, there was an
overall increase in all segments adding up to a 5% increase in total tyre
production. In the heavy commercial vehicle segment, the increase was 9% over
the previous year while light commercial vehicle tyres increased by 4%b in this
period. In the motorcycle and scooter segments, the increase was 3% and 6%
respectively. The passenger car group remained flat.
OUTLOOK
The
automobile industry has seen a sluggish phase for the second consecutive year
in 2013-14. It is hoped that in tandem with the expected resurgence in the
Indian economy, the vehicle manufacturing sector will see a slow but sure turn
around in the New Year which would in turn have a positive bearing on tyre
demand. In the interim, the replacement market continues to prop up the tyre
industry demand. As observed earlier, the capacity augmentation in the tyre
industry would further fuel competition and this could put pressure on margins,
especially in the truck radial segment.
PERFORMANCE OF THE
COMPANY
The
sales turnover of the Company during the year increased by around 8.9% from
Rs.1344.500 million in 2012-13 to Rs.1464.100 Million in 2013-14. Earnings
before depreciation and interest (EBIDTA) amounted to Rs. 199.400 Million
against Rs.179.600 Million in the previous year. After providing for
depreciation and interest, the profit before tax for the year ended 30th
September, 2014 was Rs.133.900 Million as compared to Rs.122.700 Million in the
previous year. After making provision for income-tax, the net profit for the
year stood at Rs.89.800 Million as compared to Rs.80.200 Million in the
previous year.
UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31ST MARCH 2015
(Rs. In Million)
|
Particulars
|
Quarter Ended ( Unaudited) |
Quarter Ended ( Unaudited) |
Six Month Ended ( Unaudited) |
|
|
31.03.2015 |
31.12.2014 |
31.03.2015 |
|
Income From
Operations |
|
|
|
|
a. Gross Sales/ Income from Operations (Net of Excise Duty) |
36777.700 |
37204.000 |
73981.700 |
|
Less : Excise duty |
3671.600 |
3687.200 |
7358.800 |
|
Net Sales / Income
from Operations |
33106.100 |
3687.200 |
66622.900 |
|
b. Other Operating Income |
14.200 |
13.300 |
27.500 |
|
Total Income from
Operations (Net) |
33120.300 |
33530.100 |
66650.400 |
|
Expenditure |
|
|
|
|
a. Cost of material Consumed |
18921.000 |
20314.000 |
39235.000 |
|
b. Purchase of Stock-in trade |
94.400 |
50.600 |
145.000 |
|
c. Changes in inventory of finished Goods, work- in-progress and Stock-in-trade |
(5.000) |
(957.100) |
(957.600) |
|
d. Employees Benefit Expenses |
1990.300 |
2022.300 |
4012.600 |
|
e. Job Work Charges |
0.000 |
0.000 |
0.000 |
|
f. Depreciation and Amortisation Expenses |
1094.200 |
1160.000 |
2254.200 |
|
g. Other expenses |
5815.600 |
5837.000 |
11652.600 |
|
Total Expenses |
27915.000 |
28426.800 |
56341.800 |
|
Profit from
Operations before Other Income, Interest and Exceptional Items |
5205.300 |
5103.300 |
10308.600 |
|
Other Income |
207.400 |
256.200 |
463.600 |
|
Profit from
ordinary activities before finance cost & exceptional items |
5412.700 |
5359.500 |
10772.200 |
|
Finance Costs |
636.500 |
601.900 |
1238.400 |
|
Exchange Difference Loss / (Gain) (Net) |
0.000 |
0.000 |
0.000 |
|
Profit from ordinary
activities after finance costs & exceptional items |
4776.200 |
4757.600 |
9533.800 |
|
Exceptional items |
0.000 |
0.000 |
0.000 |
|
Profit from
ordinary activities before tax |
4776.200 |
4757.600 |
9533.800 |
|
Tax Expense |
1450.000 |
1522.500 |
2972.500 |
|
- Income Tax |
0.000 |
0.000 |
0.000 |
|
- Deferred Tax |
0.000 |
0.000 |
0.000 |
|
Net Profit from
ordinary activity after tax |
3326.200 |
3235.100 |
6561.300 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Net Profit After
Tax |
3326.200 |
3235.100 |
6561.300 |
|
Paid-up equity share capital (face value of Rs.10 per share) |
42.400 |
42.400 |
42.400 |
|
Paid up Debt Capital of the company |
5700.000 |
6350.000 |
5700.000 |
|
Reserves excluding Revaluation Reserve as per balance sheet of previous accounting Year |
0.000 |
0.000 |
0.000 |
|
Debenture Redemption Reserves (cumulative) |
747.200 |
863.600 |
747.200 |
|
Earnings Per Share (of Rs.10 each) (not annualized) |
|
|
|
|
Basic EPS |
784.285 |
762.78 |
154.06 |
|
Diluted EPS |
0.000 |
0.000 |
0.000 |
|
Debt Equity Ratio |
0.000 |
0.000 |
0.29 |
|
Debt Service Coverage Ratio |
0.000 |
0.000 |
7.40 |
|
Interest Service Coverage Ratio |
0.000 |
0.000 |
10.75 |
|
PARTICULARS OF
SHAREHOLDING |
|
|
|
|
Public Shareholding |
|
|
|
|
- No. of shares |
3082564 |
3086556 |
3082564 |
|
- Percentage of shareholding |
72.68% |
72.78% |
72.68% |
|
Promoter &
Promoter Group Shareholding |
|
|
|
|
a)
Pledged/Encumbered |
|
|
|
|
- No. of shares |
5400 |
6550 |
5400 |
|
- Percentage of shareholding (as a % of the total shareholding of promoter and promoter group) |
0.47% |
0.57% |
0.47% |
|
- Percentage of shareholding (as a % of the total share capital of the company) |
0.13% |
0.15% |
0.13% |
|
b) Non-encumbered |
|
|
|
|
- No. of shares |
1153179 |
1148037 |
1153179 |
|
- Percentage of shareholding (as a % of the total shareholding of promoter and promoter group) |
99.53% |
99.43% |
99.53% |
|
- Percentage of shareholding (as a % of the total share capital of the company) |
27.19% |
27.07% |
27.19% |
|
|
|
|
|
|
Particulars |
Quarter ended 31.03.2015 |
||
|
Investor Complaints |
|
|
|
|
Pending at the beginning of the quarter |
|
3 |
|
|
Received during the quarter |
|
4 |
|
|
Disposed off during the quarter |
|
6 |
|
|
Remaining unresolved at the end of the
quarter |
|
1 |
|
|
SOURCES OF FUNDS |
|
|
31.03.2015 (Unaudited) |
|
A
EQUITY AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
|
|
42.400 |
|
(b) Reserves & Surplus |
|
|
51695.200 |
|
|
|
|
|
|
Total
Shareholders’ Funds |
|
|
51737.600 |
|
|
|
|
|
|
(3)
Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
|
|
13153.600 |
|
(b) Deferred tax liabilities (Net) |
|
|
2585.600 |
|
(c) Other long term
liabilities |
|
|
11500.500 |
|
(d) long-term
provisions |
|
|
1017.600 |
|
Total Non-current
Liabilities |
|
|
28257.300 |
|
|
|
|
|
|
(4)
Current Liabilities |
|
|
|
|
(a) Short
term borrowings |
|
|
8192.400 |
|
(b) Trade
payables |
|
|
11724.200 |
|
(c) Other
current liabilities |
|
|
5818.100 |
|
(d) Short-term
provisions |
|
|
1926.100 |
|
Total Current
Liabilities |
|
|
27660.800 |
|
|
|
|
|
|
TOTAL |
|
|
107655.700 |
|
|
|
|
|
|
I.
ASSETS |
|
|
|
|
(1)
Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
45992.000 |
|
(b) Non-current Investments |
|
|
5574.300 |
|
(c) Long-term Loan and Advances |
|
|
2393.900 |
|
(d) Other
Non-current assets |
|
|
480.700 |
|
Total Non-Current
Assets |
|
|
54440.900 |
|
|
|
|
|
|
(2)
Current assets |
|
|
|
|
(a)
Current investments |
|
|
9261.500 |
|
(b)
Inventories |
|
|
18653.800 |
|
(c) Trade
receivables |
|
|
17000.400 |
|
(d) Cash
and cash equivalents |
|
|
6521.300 |
|
(e) Short-term
loans and advances |
|
|
1590.900 |
|
(f) Other
current assets |
|
|
1856.900 |
|
Total
Current Assets |
|
|
53214.800 |
|
|
|
|
|
|
TOTAL |
|
|
107655.700 |
Notes:
- The above unaudited standalone results have been subjected to Limited
Review by the Statutory Auditors, reviewed by the Audit Committee and
approved by the Board of Directors at its meeting held on April 23, 2015.
- The Company is dealing mainly in rubber products and has no other
reportable segment.
- In terms of the proviso to clause 3(i) of
Part A of Schedule II to the Companies Act, 2013 (the Act), the Company
has, after technical assessment, decided to retain the useful life
hitherto adopted for certain categories of fixed assets, which are in
certain cases, different from those prescribed in Schedule II to the Act.
The Company believes that based on the policy followed by it of continuous
and periodic assessment, the estimated useful life adopted so far is
appropriate Accordingly, Depreciation on Fixed Assets has been charged on
a provisional basis subject to final adjustment, if any, before the year
end. The above change has resulted in lower depreciation for the quarter
ending May' 15 of Rs. 46.900 Million and for the half year ending Mar' 15
by Rs. 114.600 Million. Further, consequent to Notification GSR 627(E)
dated August 29, 2014 amending Para 7(b) under Schedule II. Company has
charged off transitional depreciation amounting to Rs. 69.900 Million to
Statement of Profit and Loss during the quarter ending December 31, 2014.
- Paid up Debt Capital represents Secured Redeemable Non-Convertible
Debentures.
- Debt to Equity : Long Term Debts / Total Net Worth
- Debt Service Coverage Ratio : EBDIT / (interest + Principal
Repayment during the year)
- Interest
Service Coverage Ratio: EBDIT / interest Expenses
INDEX OF CHARGE:
|
Sr. No. |
Charge ID |
Date of Charge
Creation/Modification |
Charge amount
secured |
CHARGE HOLDER |
ADDRESS |
Service Request
Number (SRN) |
|
1 |
10330357 |
05/01/2012 |
2,046,160,000.00 |
THE BANK OF TOKYO-MITSUBISHI UFJ LIMITED |
RAFFLES PLACE,, # 01-01 REPUBLIC PLAZA, SINGAPORE, - 048619, SINGAPORE |
B30083505 |
|
2 |
10303189 |
25/08/2011 * |
5,000,000,000.00 |
AXIS TRUSTEE SERVICES LIMITED |
AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND, PANDURANG BUDHKAR
MARG, WORLI,, MUMBAI, MAHARASHTRA - 400025, INDIA |
B20844015 |
|
3 |
10279192 |
25/08/2011 * |
2,000,000,000.00 |
AXIS TRUSTEE SERVICES LIMITED |
AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND, |
B20845285 |
|
4 |
10030186 |
08/12/2006 |
610,000,000.00 |
INFRASTRUCTURE DEVELOPMENT FINANCE COMPANY LIMITED |
ITC CENTRE, 3RD FLOOR760, ANNA SALAI,, CHENNAI - |
A08378762 |
|
5 |
90285121 |
28/08/2014 * |
17,500,000,000.00 |
STATE BANK OF MYSORE |
INDUSTRIAL FINANCE BRANCH, II FLOOR, M.O.H., BUILDING, 576, ANNASALAI,
TEYNAMPET, CHENNAI, TAMIL NADU - 600006, INDIA |
C22385041 |
* Date of charge modification
FIXED ASSETS:
·
Land
·
Building
·
Plant and Machinery
·
Computer
·
Vehicles
·
Furniture and Fixture
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.64.05 |
|
UK Pound |
1 |
Rs.99.04 |
|
Euro |
1 |
Rs.71.76 |
INFORMATION DETAILS
|
Information
Gathered by : |
NYA |
|
|
|
|
Analysis Done by
: |
KAR |
|
|
|
|
Report Prepared
by : |
VNT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL
CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILITY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
|
80 |
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.