+ All Categories
Home > Documents > MRF LimiteD

MRF LimiteD

Date post: 29-Dec-2015
Category:
Upload: nikitajain021
View: 108 times
Download: 4 times
Share this document with a friend
Description:
related to accounting
Popular Tags:
29
MRF LimiteD Reason for Financial Year Oct- Sept Religious and sentimental factors influence the choice of fiscal year. Thus the hindu festivalof Diwali which marks the beginning of the new year for many indian business industries ,hence MRF follows fiscal year from October to September. Company Background: Mention the sectors that the company operates in, main products/brand names, market share, geographies of operations, new developments, main competitors etc. Sectors in Which the company operates: The core business of MRF is manufacturing, distribution and sale of tyres for various kinds of vehicles. Tyre Industry: The turnover of the Indian tyre industry is valued at Rs 41,000 crore in the period 2011-2012. Exports accounted for 4,200 crore. 1254 lakh tyres were produced by the tyre companies. Seven top companies produce 80% of the total production. Truck and bus tyres constitute 55% of the tyre industry turnover. Around 57% of the turnover is sold in the replacement market which is competitive but margins are better. The OE segment (30% of the turnover) cannot beignored as volumes are high but margins are less as prices are dependent more on the manufacturers of vehicles. In the passenger car group, 47 % of tyres are sold to OEMs and 49% in the replacement segment. The tyre industry is raw material intensive and predominantly cross-ply or bias-ply tyres are manufactured. The truck, bus and LCV segments continue to be cross-ply based due to poor road conditions, low OE fitment and high initial cost. Passenger tyres are currently 98% radial tyres. Radialisation in the light commercial vehicle group is 22% and in heavy vehicles (truck and bus) the level is 17%. Radialisation in commercial vehicles is
Transcript
Page 1: MRF LimiteD

MRF LimiteD

Reason for Financial Year Oct- Sept

Religious and sentimental factors influence the choice of fiscal year. Thus the hindu festivalof Diwali which marks the beginning of the new year for many indian business industries ,hence MRF follows fiscal year from October to September.

Company Background:

Mention the sectors that the company operates in, main products/brand names, market share, geographies of operations, new developments, main competitors etc.

Sectors in Which the company operates:

The core business of MRF is manufacturing, distribution and sale of tyresfor various kinds of vehicles.

Tyre Industry:

The turnover of the Indian tyre industry is valued at Rs 41,000 crore in the period 2011-2012. Exports accounted for 4,200 crore. 1254 lakh tyres were produced by the tyre companies. Seven top companies produce 80% of the total production. Truck and bus tyres constitute 55% of the tyre industry turnover. Around 57% of the turnover is sold in the replacement market which is competitive but margins are better. The OE segment (30% of the turnover) cannot beignored as volumes are high but margins are less as prices are dependent more on the manufacturers of vehicles. In the passenger car group, 47 % of tyres are sold to OEMs and 49% in the replacement segment. The tyre industry is raw material intensive and predominantly cross-ply or bias-ply tyres are manufactured. The truck, bus and LCV segments continue to be cross-ply based due to poor road conditions, low OE fitment and high initial cost. Passenger tyres are currently 98% radial tyres. Radialisation in the light commercial vehicle group is 22% and in heavy vehicles (truck and bus) the level is 17%. Radialisation in commercial vehicles is expected to grow by 3% to 4% during 2012-13. During 2011-12, in the vehicle manufacturing sector, there has been a decrease of 3% in the production of heavy commercial vehicles and a 30% increase in light commercial vehicles. There was an 8% increase in the small commercial vehicle segment. In the passenger car group, production has remained flat whereas in the utility group, there has been an increase of 39% over the last year. In two wheelers, scooters witnessed a 25% increase whilst in the motorcycle segment production increased by 5%. In the farm segment there was a 2% increase in production over 2010-11. The tyre industry provides direct and indirect employment to one million people including dealers, retreaders and truck operators. The truck operations are controlled by 2.6 million small operators.There are around 5000 tyre dealers spread throughout the country. Mostof them sell multiple tyre brands.

Page 2: MRF LimiteD

Main Products:

Product line:

4 Major categories of Products: 1)Tyres: Passenger CarsTwo WheelerOTRTrucks/ BusesFarm ServicesLCV Tubes and FlapsSCV2) Convener Belts3) Prethreads4) Paints & Coats

Market Share:

32%

23%9%

13%

15%

4% 3%

1%

Market Share( Sales)MRF Apollo Tyres Balkrishna Ind CeatJK Tyre & Ind TVS Srichakra Others Elgi Rubber

Page 3: MRF LimiteD

Geographies of Location:

Plant Locations:1. Tiruvottiyur — Tiruvottiyur, Chennai,Tamilnadu2. Kottayam — Vadavathoor, Kottayam, Kerala3. Goa — Usgao, Ponda, Goa4. Arkonam — Icchiputhur, Arkonam,Tamilnadu5. Medak — Sadasivapet, Medak,Andhra Pradesh6. Puducherry — Eripakkam Village,Nettapakkam Commune,Puducherry7. Ankanpally — Sadasivapet, Medak,Andhra Pradesh8. Perambalur — Naranamangalam Village & Post,KunnamTaluk,Perambalur District, (Near Trichy),Tamilnadu.

Product – Customer Base:

Along with catering all regions in India,MRF exports tyres and conveyor belts to over 65 countries in America, Europe, Middle East, Japan and the Pacific region.These markets are serviced by their offices in Dubai, Vietnam and Australia.

New Developments:

2 New products were introduced by the company in the Year 2011-12:

SUV Radial

MRF Wanderer-Sport is an asymmetric tread pattern SUV tyre for thr new generation of soft-roaders with the emphasis on comfort. The tyre is original eguipment on the best- selling Renault Duster

Truck Radial

MRF S3P4 is a premium mileage radial for drive axle fitment. It has aunque design that offers normal load operations on highways and improved skid dept enhances mileage.

New Developments due to R& D:

Continuous development and introduction of new productsfor various applications such as:

a) Domestic marketb) Export marketc) Original Equipment Manufacturersd) Defence sectore) Farm servicef) Off the Roadg) High performance bias and radial tyresh) Aircraft tyres

Page 4: MRF LimiteD

i) Specialized tyres for Rallies and Racesj) Retread marketk) Belting industryl) Inner tubesMain Competitors:

Name Net Profit(In Crores)MRF 572.35Apollo Tyres 312.53BalkrishnaInd 355.84Ceat 106.35JK Tyre &Ind 105.54TVS Srichakra 35.68PTL Enterprises 16.88Elgi Rubber 18.87

Among its competitors, MRF has the highest profit, also with respect to Sales, it occupies 32% of the market. Which business segment and/or geographical segment - generates most revenues, is the most profitable, employs the most capital & tangible assets.

Business Segment Most Profitable:

Details of sales under broad heads:

Class of Goods :Automobile Tyres 11486.88 CrAutomobile Tubes 1047.73 Cr

Finished tyres give the highest amount of sales and hence the remains the focus of the company.

Company Management:

Board Size & Composition –is the board diverse enough with reference to Gender, Age, Educational Background, Experience, independence etc.

As at 30th September, 2012 the Board comprises of 14 Directors. It includes a Chairman & Managing Director, a ManagingDirector, 2 Whole-time Directors, 2 Non-Executive Directorsand 8 Non-Executive Independent Directors. None ofthe Directors on the Board is a member of more than 10Committees or act as Chairman of more than 5 committees across all Companies in which he is a director.

Has the company expanded board size?.The company expanded its board size from 12 to 14 in the financial year 2011- 2012.

Mr Jacob Kurian and Mr M Meyyappan were appointed as Additional Directors ofthe Company on 25/07/2012.

Page 5: MRF LimiteD

How many Board meetings were held during the year?During the year 2011-12, five Board Meetings were held on 20-10-2011, 29-11-2011, 09-02-2012, 26-04-2012 and25-07-2012. The interval between any two successive Meetings did not exceed four calendar month.

Members of Board :

Designation Name RemunerationsPrimary Company Age

Chairman & Managing Director

K M Mammen 574,90,618.00MRF Ltd 64

Managing Director ArunMammen 516,47,392.00 MRF Ltd 47Whole-time Director

K M Philip 558,08,758.00MRF Ltd 64

Whole-time Director

Rahul MammenMappillai

164,25,842.00MRF Ltd

Director K C Mammen 50,000.00 MRF Ltd

Director Ashok Jacob 20,000.00 Ellerston Capital Pty Limited 52

Director V Sridhar 1,05,000.00 MRF Ltd 58

Director Vijay R Kirloskar 30,000.00 Kirloskar Electric Company Limited

Director N Kumar 50,000.00 ITNation India Pvt. Limited 63Director Ranjit I Jesudasen 95,000.00 MRF LtdDirector S SVaidya 95,000.00 MRF Ltd 58

Director Salim Joseph Thomas

50,000.00MRF Ltd

Company Secretary

Ravi Mannath -MRF Ltd

Additional Director Jacob Kurian 10,000.00 MRF LtdAdditional Director M Meyappan MRF Ltd

The Board of Directors comprises of a healthy mix of Directors with age starting from 47 up till age of 64 which gives a mix of ideologies to the Board.

Shareholders Issued Share Capital: No of shares & par value.

SHARE CAPITAL as at 30.09.2011

Authorised90,00,000 Equity Shares of Rs 10 each = Rs. 9.00 Cr1,00,000 Taxable, Redeemable Cumulative Preference Shares of Rs 100 each=Rs 1.00 CrTotal Authorized= Rs 10 Cr

Page 6: MRF LimiteD

Issued :

42,41,214 Equity shares of Rs 10 each = Rs 4.24 Cr(Includes 71 bonus shares not issued and not allotted on non-payment of call monies)

Subscribed and Fully Paid-up42,41,143 Equity Shares of Rs 10 each = Rs 4.24Cr

Rights, preferences and restrictions attached to shares:The Company has 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 the approval of the shareholders in the ensuing Annual General Meeting, except in case of interimdividend. 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.

Shareholders holding more than 5 percent of the equity shares:Name of Shareholder(No of Shares)As at 30.09.20111)Comprehensive Investment and Finance Company Private Limited=422,0692) MOWI (P) Limited= 507,9843) Enam Shares and Securities Private Ltd.= 266,713

Listing on Stock Exchanges at:

1. Madras Stock Exchange Ltd., (MSE)‘Exchange Building’ P B No.183, 11 Second Line Beach,Chennai – 600 0012. National Stock Exchange of India Ltd., (NSE)Exchange Plaza, 5th Floor, Plot No.C/1, 5 G Block,Bandra-Kurla Complex, Bandra (E), Mumbai 400 051.3. Bombay Stock Exchange Ltd., (BSE)PhirozeJeejeebhoy Towers, Dalal Street,Mumbai 400 001.Equity ISIN : INE 883A01011.

Page 7: MRF LimiteD

What is the highest & lowest price at which the shares traded during the financial year?

What is Book Value of the shares?

How does book value compare with the par value & the current market price?

Do you observe any relation between the Sensex/Nifty & the company’s stock prices?

Highest During the year

LoweSt during the year

Page 8: MRF LimiteD

A strong relation was seen between the SENSEX & NIFTY and MRF s stock Prices as seen in the chart below:

Comparison with SENSEX

Page 9: MRF LimiteD

Comparison with NIFTY

*Source: Money Control

When was the AGM held? What was the agenda for the meeting?

Meeting:

09-02-2012 No Special Resolution was passed.For the present year,

a) Annual General Meeting:Date and Time : 07-02-2013, 11.00 A.M.Venue : ’TTK Auditorium‘The Music AcademyNo. 168 TTK Road,Chennai 600014

Auditors:

Who are the auditors? Have they changed from the last year?

AuditorsMessrs Sastri & Shah and M.M. Nissim and Co., who are our Auditors,retire at the ensuing Annual General Meeting and are eligible for re-appointment. The auditors were the same the previous fianacial years too. The Company has received certificates from both the auditors to the effect that their appointments will be within the limits prescribed under Section 224[1B] of the Companies Act, 1956.

Are there any negative comments in the audit report? Does the audit report contain any recommendation to present/potential investors?The audit report only contains the validation of the Balance Sheet, Profit & Loss statement and Cash Flow Statement. What is the total compensation to the auditors? Did the auditors provide any non-audit services also?

Auditors’ Remuneration:As Auditors:Audit fee (Including Rs 0.06 crore for previous year) Rs0.30 Cr Tax Audit fee Rs 0.05 Cr

Page 10: MRF LimiteD

Fixed Assets:

Nature of Fixed Assets

Cost as at 01-10-2011

Additions

Deductions/Adjustments

Cost as on 30-09-2012

Tangible Assets

Land 96.04 0.02 - 96.06Buildings 511.26 295.74 - 807

Plant & Machinery2753.7

4 867.11 3.363617.4

9Moulds 292.44 40.14 4.74 327.84Furniture & Fixtures 14.97 1.5 0.47 16Computer 30.65 2.98 0.41 33.22Office Equipment 22.69 2.29 0.49 24.49Other Assets 76.72 25.15 1.76 100.11Vehicles 18.37 4.33 1.87 20.83

Total Tangible Assets3816.8

8 1239.26 13.15043.0

4

Previous year3354.5

8 486.89 24.593816.8

8Intangible AssetsComputer Software 14.94 4.53 - 19.47Total Intangible Assets 14.94 4.53 - 19.47Previous Year 13.32 1.62 - 14.94

DEPRECIATION:

Depreciation

Nature of Fixed Assets Upto 30-09-2011Provided during the year

Deductions/ Adjustments

Tangible AssetsLand 1.36 0.09 -Buildings 88.75 19.49 -Plant & Machinery 1455.62 235.74 3.35Moulds 208.36 25.32 4.73Furniture & Fixtures 10.84 1.7 0.39Computer 22.59 3.81 0.41Office Equipment 16.27 2.26 0.48Other Assets 34.03 7.61 1.69Vehicles 11.49 2.74 1.79Total Tangible Assets 1849.31 298.76 12.84Previous year 2030.78 244.71 426.18Intangible Assets

Page 11: MRF LimiteD

Computer Software 11.13 2.35 -Total Intangible Assets 11.13 2.35 -Previous Year 8.21 2.92 -Capital Work-in-ProgressGrand totalNote: Land includes Agriculture Land - ` 0.12 crore and Leasehold Land ` 4.33 crore.

NET ASSETS( TOTAL ASSETS- DEPRECIATION):

Net BlockNature of Fixed Assets As at 30-09-2012 As at 30-09-2011Tangible AssetsLand 94.61 94.68Buildings 698.76 422.51Plant & Machinery 1929.48 1298.12Moulds 98.89 84.08Furniture & Fixtures 3.85 4.12Computer 7.23 8.06Office Equipment 6.44 6.41Other Assets 60.16 42.71Vehicles 8.39 6.88Total Tangible Assets 2907.81 1967.57Previous year 1967.57Intangible AssetsComputer Software 5.99 3.81Total Intangible Assets 5.99 3.81Previous Year 3.81 5.11Capital Work-in-Progress 414.65 1042.25Grand total 3328.45 3013.63

What is composition of tangible & intangible assets:

Tangible assets: Rs 2907.81 Cr

Intangible assets: Rs 5.99 Cr

What is the policy for depreciation? Is it the same for all types of assets?

Depreciation:(i) Depreciation on Buildings, Plant and Machinery,Moulds and a part of Other Assets has been provided on straight line method at the rates and on the basis as specified in Schedule XIV to the Companies Act, 1956,and in respect of vehicles and a part of Other Assets where, based on management’s estimate of the useful life of the assets, higher depreciation has been providedon straight line method at the rate of 20%.

Page 12: MRF LimiteD

(ii) Assets acquired/purchased costing less than Rupees Five Thousand have been depreciated at the rate of 100%.

(iii) Depreciation on Renewable Energy Saving Devices,viz., Windmills, is being charged on Reducing Balancing Method, as Continuous Process Plant at the rates and onthe basis as specified in Schedule XIV to the Companies Act, 1956(iv) Leasehold Land is amortised over the period of thelease.

(v) Intangible Assets are amortised over 5 years commencingfrom the year in which the expenditure is incurred.

What is the depreciation as % of total revenues?

DEPRECIATION & AMORTISATION EXPENSEDepreciation on tangible assets 298.76Amortisation on intangible assets 2.35 Total 301.11

What the return on total assets, return on fixed assets?

Return on Assets: 0.196869809

Return on Fixed Assets: 0.171989965

What Kind of Inventory does the company hold, the total investment and has it changed from the previous year?

The cost is computed on FIFO basis except for stores and spares which are on Weighted Average Cost basis.

MRF generally maintains three types of Inventories Viz. Automobile tyres, Tubes and T&S equipment. Its finished good inventory has increased from 453.21 to 474.71 but it has decreased in work in progress from 145.81 to 137.92 crores which implies that MRF has more inventories of finished goods and less on unfinished goods. Automobiles tubes’ finished inventory has increase from 53.47 to 67.74 crores and its stock in progress in almost unchanged.

What are the sources of long term debt? Has the composition changed?

MRF has raised their long term funds through two equipment viz. External Commercial borrowings and issue of debentures.

Are the borrowings in different currencies?

Page 13: MRF LimiteD

MRF has borrowed a considerable amount of Rs. 204.62 Cr through External Commercial which is an instrument used by Indian Corporations to raise funds from abroad. MRF has raised money through ECBs in 3 major currencies viz. USD and Japanese Yen.

The Company has entered into Forward Exchange Contracts, Currency Swaps and Interest Rate Swaps being derivative instruments, which are not intended for trading or speculative purposes, but for hedging purposes, to establish the amount of reporting currency required or available at the date ofsettlement of certain payables and receivables.

Which assets are offered as security against the borrowings?

MRF has raised funds from abroad through Debenture equipment which doesn’t require any collateral and hence they haven’t pledged any mortgage there.

ECB from The Bank of Tokyo - Mitsubishi UFJ, Ltd. is secured by a first charge on plant and machinery situated at its Puducherry Unit. Interestis payable at a rate equal to the 6 month BTMU LIBOR plus margin of 1.55% payable half-yearly. The said loan is fully hedged and is repayablein 3 equal annual instalments at the end of the 4th, 5th and 6th year beginning October 2015.

ii) ECB from Credit Agricole is secured by a first charge on specific items of plant and machinery situated at its Units at Kottayam, Goa and Arkonam.Interest is payable at a rate equal to the 6 month LIBOR for JPY plus a margin of 0.58% payable half-yearly. The said loan is fully hedged and isrepayable in 2 instalments in February and August 2013.

iii) The principal amount of debentures, interest, remuneration to Debenture Trustees and allother costs, charges and expenses payable by the Companyin respect of debentures are secured by way of a legal mortgage of Company’s land at Gujarat and hypothecation of plant and machinery at theCompany’s plants at Ankenpally, Andhra Pradesh and at Perambalur, near Trichy, Tamil Nadu, equivalent to the outstanding amount.

What % of total assets in funded by long term debt?

MRF has financed its asset basically from its Shareholder’s funds and long term funds form only 15.2% as the amount invested from the total assets.

What is the interest coverage ratio?

MRF Ltd has an interest Coverage ratio of 5.6265 which is better than the Industry Ratio.

Are operating cash flows sufficient to meet interest & principal obligations?

MRF has a Cash of Rs. 1033840000 generated from Operating activities and it is enough to meet the Interest Obligation and it is also enough to meet the Debenture Obligations.

What kind of investments has the company made? How much is trading purposes?

Page 14: MRF LimiteD

MRF ltd. has made a non-current investment of 74.37 crores of which 71.54 is Unquoted and 2.83 crore of unquoted Investment. It has also made a current investment of 353.17 Crores which is mainly into Mutual Funds which is to diversify its portfolio.

MRF Ltd derived an income of 1.33 crores from its investments in the form of Interest Income and Dividends.

MRF Ltd has maintained a pool of 64.64 crores of Contingent Liability which pertains to Warranty of tyres which consists of 34.12 crores and litigation and related disputes has 30.42 crores allotted to it. Its contingent Liability is 6.33% of its Profit from operating activities.

MRF has an Exceptional Income arising from the fact that they switched from written down Method of depreciation to Straight-line Method of Depreciation in 2011 which amounts to Rs 404.23 Crores.

MRF effectively paid a Tax of 31.29% which amounts to Rs.260.76 Crores.

Particulars 2012 2011Sales 13054.03 10637.03Other Income 39.73 33.14Total Income 13093.76 10670.17PBT 833.12 893.65Provision for Taxation 260.76 274.23Profit after Taxation 572.36 619.42Share Capital 4.24 4.24Reserves 2853.56 2293.53Net Worth 2857.80 2297.77Fixed Asset Gross 5477.16 4874.07

Even after posting a Sales growth of 18.51% MRF has not been able to convert his acumen into profit and this is evident from their declined PAT figure which stands at 572.36 crores, 47.06 crores lesser that last year. This is pertaining to their increased administrative expenses, selling and distribution expenses.

MRF has posted a very healthy cash generation from its operating activities. Their cash flows from operating activities stand at 1022.77 which are 389.08 crores more than previous year.

The Spread between the Cash flow from operating activities and cash flow is tremendous this year and this is because they negative and almost zero cash flow from Investing and Financing activities respectively. They have a handsome cash flow of 1022.77 crores from Operating activities which portends good for its core business which also implies the core business is functioning very well. They have purchased a machine for 616.19 crores and incurred a loss of 352.01 crores in their Investing activities and similar is the story with financing activities which has drawn the net income from Investing into negative figure and which has also brought down the net cash flow down to 5.08 crores.

Page 15: MRF LimiteD

Ratio Analysis:

MRF has a very good current as well as quick liquidity in comparison with both their closest competitor- Apollo and Industry on the whole. When the competitor and the Industry on the whole are suffering to maintain enough current assets to pay their current liabilities, MRF Ltd is sitting in a much better position which is almost a point above the Industry standard.

Solvency Ratio:The persons who have advanced money to the business on long-term basis areinterested in safety of their payment of interest periodically as well as therepayment of principal amount at the end of the loan period. Solvency ratios arecalculated to determine the ability of the business to service its debt in the long run.

MRF Ltd’s solvency ratio which shows their debt-equity, Debt Ratio, Proprietary Ratio, Total Asset to Debt Ratio and Interest Coverage Ratio are projecting healthy projections which compares good with the Industry too. Apollo is one notch above MRF when it comes to total Asset to Debt Ratio.

The turnover ratios basically exhibit the activity levels characterised by thecapacity of the business to make more sales or turnover. The activity ratiosexpress the number of times assets employed, or, for that matter, any constituentof assets, is turned into sales during an accounting period. Higher turnoverratio means better utilisation of assets and signifies improved efficiency andprofitability, and as such is known as efficiency ratios. The Stock turnover ratio which means how many turns of inventory has been utilised in the manufacturing process during the year. Higher the Inventory/stock turnover ratio; the better the condition but as a precaution the inventory lot shouldn’t be very too small because it will lead to higher inventory turnover ratio without benefitting the business in turn. MRF Ltd doesn’t feature well when it comes to Debtors’ turnover ratio which is staggering high at the Industry level but MRF and Apollo both are not performing up to that mark. It doesn’t bode for the company as their recuperating of money from credit Sales is not as efficient as the Industry’s is. Creditor’s turnover ratio is also in doldrums with MRF whereas Apollo has a creditors’ turnover ratio in tandem with the Industry. Here MRF has to maintain a good relationship with its Creditors because it doesn’t have sound turnover ratio. If MRF has to go for raising further money from the market it might face some problems if it doesn’t maintain good relationship with creditors. But a worrying trend is that the Creditors turnover ratio has decreased this year.

Fixed turnover ratio too has decreased this year which is not good for the business. As Asset turnover ratio means the utilisation of the assets in producing Sales and generating Revenues for the business and hence its declining means that MRF is not able to maintain the same utilisation of its assets as it has been doing the last year and in the past. MRF is leading the Industry in its segment when it comes to the Asset turnover ratio as the Industry Ratio is half of what MRF has shown. Working Capital turnover ratio which means the amount the sales generated from the Working Capital (CA-CL) has shown a good growth for MRF over the past year and it fares much better than its closest competitor Apollo and Industry too.

MRFLiquidity Ratio

2012 2011

Page 16: MRF LimiteD

Current Assets: 3160.78 3079.41Current Liabilities: 2069.72 2109.46

Current Ratio1.527153431 1.45980962

Quick Ratio 0.732074870.736392252

Solvency Ratio2012 2011

Long Term Debt 1102.71 961.49Shareholder's Fund 2857.80 2297.77

Debt-Equity Ratio 0.385860.418445

Debt Ratio: Long term Debt/Capital Employed0.278426

0.295003

Proprietary Ratio: Shareholder's fund/Capital Employed0.721574

0.704997

Total Asset to Debt Ratio: Total Assets/ Long term Debt6.540496

6.589668

Interest Coverage Ratio: PBIT/Interest on long term Debt

5.626528

8.393415

Turnover Ratio2012 2011

1. Stock Turn-over: COGS/Avg Inventory 12.125 11.7862. Debtors (Receivable) Turnover; 1.053 1.2373. Creditors (Payable) Turnover; 0.961 1.1234. Fixed Assets Turnover; 4.511 5.4005. Working Capital Turnover. 12.069 10.984

Working Capital: CA-CL1091.06 969.95

Profitability Ratio2012 2011

1. Gross Profit Ratio: Gross Profit/Net Sales*1000.361190115

0.306744262

2. Operating Ratio: (COGS+ Operating Expenses)/Net Sales*100

0.938470336

0.982046276

3. Operating Profit Ratio: Operating Profit/Sales *1000.232867817

0.182479936

4. Net profit Ratio: Net Profit (PAT)/Net Sales0.044003138

0.05808232

5. Return on Investment (ROI) or Return on Capital Employed (ROCE): PBIT/Capital Employed *100

0.212914498

0.274022324

Page 17: MRF LimiteD

6. Return on Net Worth (RONW): PAT/Sharholder's Fund

0.202743369

0.269295883

7. Earnings per Share: Profit Available to Equity Shares/ No. of Equity Shares 1349.31

1458.969905

8. Book Value per Share: Equity Shareholder's fund/No. of Equity Shares

0.000673828

0.000541781

9. Dividend Payout Ratio: Dividend per share/ EPS0.018299735

0.017135376

10. Price Earning Ratio: Market price of Share/EPS9.49170656

6.984379391

<= MP on September 19, 2012

Apollo Tyres

Liquidity RatioCurrent Assets 17,351.90 18,364.97Current Liabilities 17931.65 21543.49

Current Ratio0.967668898

0.852460302

Quick Ratio0.342614316

0.338253923

Solvency Ratio

Long Term Debt13383.68

12619.88

Shareholder's Fund23306.48

20476.04

Debt-Equity Ratio0.574247

0.616324

Debt Ratio: Long term Debt/Capital Employed0.364776

0.381312

Proprietary Ratio: Shareholder's fund/Capital Employed0.635224

0.618688

Total Asset to Debt Ratio: Total Assets/ Long term Debt4.361436 4.56886

Interest Coverage Ratio: PBIT/Interest on long term Debt

1.848341

1.111872

Turnover Ratio

1. Debtors (Receivable) Turnover; 0.858 1.2372. Creditors (Payable) Turnover; 0.839 1.123

Page 18: MRF LimiteD

3. Fixed Assets Turnover; 2.770 2.8624. Working Capital Turnover. -146.744 -25.666

Working Capital: CA-CL -579.75 -3,178.52Net Sales 85704.91 81578.75

Profitability Ratio

1. Gross Profit Ratio: Gross Profit/Net Sales*1000.285978948

0.306744262

2. Operating Ratio: (COGS+ Operating Expenses)/Net Sales*1000.144184038

0.128247001

3. Operating Profit Ratio: Operating Profit/Sales *1000.055366606

0.031566186

4. Net profit Ratio: Net Profit (PAT)/Net Sales0.036465589 0.02222797

5. Return on Investment (ROI) or Return on Capital Employed (ROCE): PBIT/Capital Employed *100

0.022983001 0.07780808

6. Return on Net Worth (RONW): PAT/Sharholder's Fund0.134094895

0.088558628

7. Earnings per Share: Profit Available to Equity Shares/ No. of Equity Shares

6.200647639

3.597700169

8. Book Value per Share: Equity Shareholder's fund/No. of Equity Shares46.24074329 40.6250669

9. Dividend Payout Ratio: Dividend per share/ EPS0.080636738

0.138977674

10. Price Earning Ratio: Market price of Share/EPS10.73274985

27.29521511

Industry

Liquidity Ratio2012 2011

Current Ratio 0.91 0.94Quick Ratio 0.67 0.64

Solvency Ratio2012 2011

Long Term DebtShareholder's FundDebt-Equity Ratio 0.57 0.66Debt Ratio: Long term Debt/Capital Employed 0.220 0.1521

Page 19: MRF LimiteD

9

Proprietary Ratio: Shareholder's fund/Capital Employed0.2202

0.2695

Total Asset to Debt Ratio: Total Assets/ Long term Debt 2.65 2.56Interest Coverage Ratio: PBIT/Interest on long term Debt 6.25 6.24

Turnover Ratio2012 2011

1. Stock Turn-over: COGS/Avg Inventory7.950 7.350

2. Debtors (Receivable) Turnover;8.580 9.170

3. Creditors (Payable) Turnover;2.350 2.550

4. Fixed Assets Turnover;2.350 2.550

5. Working Capital Turnover. N/A N/A

Profitability Ratio2012 2011

1. Gross Profit Ratio: Gross Profit/Net Sales*100 0.0809 0.05822. Operating Ratio: (COGS+ Operating Expenses)/Net Sales*100 N/A N/A3. Operating Profit Ratio: Operating Profit/Sales *100 0.1064 0.08374. Net profit Ratio: Net Profit (PAT)/Net Sales 0.0481 0.06365. Return on Investment (ROI) or Return on Capital Employed (ROCE): PBIT/Capital Employed *100 0.0794 0.07356. Return on Net Worth (RONW): PAT/Sharholder's Fund 0.2002 0.26957. Earnings per Share: Profit Available to Equity Shares/ No. of Equity Shares 1349.5 1460.5

Page 20: MRF LimiteD

4

8. Book Value per Share: Equity Shareholder's fund/No. of Equity Shares6738.28 5417.81

9. Dividend Payout Ratio: Dividend per share/ EPS 0.0215 0.019910. Price Earning Ratio: Market price of Share/EPS 9.785 9.420

Profit before Tax TrendYears Profit Before Tax2003 167.752004 42.92005 55.342006 99.812007 260.962008 211.392009 398.482010 534.662011 893.652012 833.12

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

100200300400500600700800900

1000

Profit Before Tax Trend

Reserves TrendYears Reserves

2003 699.962004 719.172005 749.81

Page 21: MRF LimiteD

2006 820.052007 981.912008 1116.552009 1357.182010 1686.442011 2293.532012 2853.56

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

50010001500200025003000

Reserves Trend Reserves

10 YEAR TREND ANALYSIS

Ten year Financial Summary 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012RsCroreSales 2542 2989.4 3437 4234 5037 5716 6142 8080 10637 13054Other Income 65.71 58.54 44.96 27.07 24.2 40.83 34.4 29.13 33.14 39.73

Total Income 2608 3048 3482 4261 5061 5756 6176 8110 1067013093.

8Profit before Taxation 167.8 42.9 55.34 99.81 261 211.4 398.5 534.7 893.65 833.12Provision for Taxation 50.37 14 15.03 19.9 89.2 66.83 145.5 180.7 274.23 260.76Profit after Taxation 117.4 28.9 40.31 79.91 172 144.6 253 354 619.42 572.36Share Capital 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24 4.24

Reserves 700 719.17 749.8 820.1 982 1117 1357 1686 2293.52853.5

6Net Worth 704.2 723.41 754 824.3 986 1121 1361 1691 2297.8 2857.8

Fixed Assets Gross 1349 1534.5 1788 1956 2290 2866 3021 3866 4874.15477.1

6

*893.65 * Includes an exceptional item of ` 404.23 crore which representsreversal of excess depreciation of earlier years, due to change in method

Page 22: MRF LimiteD

of depreciation from Written Down Value (WDV) to Straight Line Method(SLM).

DuPontAnalysis:

ROE: Profit MarginAssets Turnover Leverage

2011 0.149098474 0.032207675 1.678850676 2.7574126222012 0.200279936 0.043845464 1.809975223 2.523714046

Profit Margin Tax BurdenInterest Burden Sales Margin

2011 0.032207675 0.383364852 1.122704088 0.0748310382012 0.043845464 0.687007874 1.235459857 0.051657611

*For Calculation of Profit Margin, Profit after Tax before Exceptional Item has been considered.

The ROE, Profit Margin have shown a increase, while decreasing Leverage.

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

2000

4000

6000

8000

10000

12000

14000

0

100

200

300

400

500

600

700

Sales

YEAR

SALE

S

PRO

FIT

Relatively high profit In 2011 due to change in Depreciation method from WDM to SLM

Page 23: MRF LimiteD

Tyre Industry is Raw Material (RM) intensive. RMs account for 72% of Industry Turnover.

Natural Rubber is the key raw material of the tyre industry with a cost of 45% ofall raw materials.


Recommended