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2013 stands at Rs. 151 Crores, up from Rs. 144.5 Crores as at 31.03.2012. The increase in capital is attributable to issue of equity to shareholders of Suzuki Powertrain India Ltd, in lieu of a controlling stake. 2. Capital Work in Progress: There was a steep increase in the capital work in progress from Rupees 7,101 million in FY12 to Rupees 18,019 an increase of 154%. 3. Long term loans: There was no long term loan in FY12. But as of 31.03.2013, the company has total long term borrowings of Rupees 5,429 million. This suggests that the company may be planning for an expansion, using outsiders funds. 4. Analysis of Profitability: ROCE value has increased from 10.77% to 12.51%. net increment of 16.16%, this implies that the company is making judicious use of the capital employed. ROE has increased from 10.77% to 12.88%. Gross Profit ratio has increased from 18.09% to 22.00%. Net profit ratio has also increased from 4.71 to 9.61%. All the major profitability ratios has increased Y-O-Y basis. This implies that the company is working efficiently to convert every rupee earned in revenue to profit. Invariably company is enjoying good financial health. 5. Some important financial parameters over the last 5 financial years: All figures are in million Rupees (Except Book Value, EPS, and percentages)
Parameter Net Sales Net Worth Book Value EPS PAT EBITDA Margin (%) PAT Margin (%) 2008-09 2009-10 2010-11 2011-12 2012-13 203583 289585 358490 347059 426126 93449 118351 138675 151874 185789 323 410 480 525 615 42 86 79 57 79 12187 24976 22886 16352 23921 9.0 6.0 13.7 8.6 10.1 6.3 7.2 4.7 10.0 5.6
6. Interest Paid: The interest paid during the year has increased from Rupees 490 in FY12 to Rupees 2083 million in FY13. 7. Solvency Position Analysis: The Share Capital of the company as on 31.03.2013 stands at Rs. 1510 million, up from Rs. 1445 million as on 31.03.2012. The increase in capital is attributable to issue of equity to shareholders of Suzuki Powertrain India Ltd, in lieu of a controlling stake. The companys long term liabilities increased by about 125%. Maruti increased its long term borrowings to Rs. 5420 million in the FY 13 while there was none in the previous year. The
interest and installment impact of this will be felt in FY14 only. The companys solvency position more or less remained the same with current ratio being 1.6:1, Quick ratio being 1.167:1, Debt-equity ratio being 0.1. The Cash and Bank Balance reduced by 68%. 8. Liquidity Analysis: The companys current ratio has slightly reduced from 1.6923 in FY 2013 to 1.6 in FY 2012 showing a better utilization of its current assets and a healthy position of its levels of its net working capital of Rs.40968 million in FY 2013 from Rs.45324 million in FY 2012. The Cash and Bank balance has reduced from Rs.24361 million in FY 2012 to Rs.7750 million in FY 2013, showing effective utilization of the firms resources. At the same time the company has also decreased its Short term borrowings from Rs.10783 million in FY 2012 to Rs.8463 million in FY 2013. All of this has had a combined effect on the Quick Ratio of the company. It has decreased a bit from 1.299 in FY 2012 to 1.167 in FY2013 which is because of both, a decrease in the amount of current assets and an increase in the amount of current liabilities. The Inventory Holding Period has also remained stable, not changing much from 20.61 days in FY12 to 19.97 days in FY12. 9. Depreciation: The Company has also charged a higher depreciation amount in FY13 (63% more as compared to FY12). This could be attributable to two reasons:
The increase in the amount of fixed assets (by over 25%) over FY12 To show lower levels of profit so as to attract less tax
10. Debt Service Coverage Ratio: The DSCR has drastically reduced to 1.73 in FY13 from 10.22 in FY12. This was primarily because the company had to repay large amount of short term borrowings amounting to Rupees 10,783 million.
1. Decline in Exports to Eurozone countries: There was a 35% decline in exports to Eurozone countries from 43,000 vehicles in FY12 to 28,000 in FY13. 2. Appreciation of the Yen: From an average of 0.61 in FY12, the Yen appreciated to 0.66 with respect to the rupee in FY13. The total imports of the company in FY13 amounted to Rupees 42,344 million, a significant amount out of which is from Japan. Thus, exposure to the appreciating Yen is a significant business risk for the company. 3. Labour Unrest Situation: The Manesar facility of the company saw a severe labour unrest situation during the financial year and was locked down for 1 month. This led to loss of production and other adverse impacts. Thus, labour unrest is a significant business risk for the company in the future. 4. The company has a disputed outstanding amount of Rupees 20,100 million under different statutes like Income Tax Act,1961, The Central Excise Act,1944 and The Finance Act, 1994. The said amount is being disputed in different courts of law. If the said amount is proven payable, it would be a significant impact on the companys financial health. 5. Long Term Borrowings designated in foreign currency: After acquiring Suzuki Powertrain India Limited during the FY13, the company has taken upon outstanding foreign currency loans amounting to Rupees 3920 million. Also, the company has outstanding loans of Rupees 1,509 million from the holding company (Suzuki Japan). The company engages in hedging activities to protect this exposure, but the hedge reserve- the reserve created to settle hedging losses if required- stands at (402) million Rupees (negative) as at 31.03.2013. The company has estimated unrealized foreign currency losses amounting to Rupees 1425 million in FY13. Thus, the foreign currency denominated loans are a significant financial risk. 6. High Interest Costs in FY13: Interest paid in FY13 was an increase of 370% over interest paid in FY12 (Rupees 2167 million v/s Rupees 426 million). 7. Cash and Bank Balances: Cash and Bank Balances came down from 24,361 million Rupees in FY12 to 7,750 million Rupees in FY13- a steep fall of 68%.
1. Loans in foreign currency: Given the highly volatile currency rate scenario and depreciation of the rupee against all major global currencies, including the Japanese Yen, the company should try to minimize its long term borrowings designated in foreign currency. This can be achieved through possible early repayment of some loans as and when the rupee appreciates.
2. Better IR practices: The unfortunate incident at the companys Manesar plant in Fy13 is an indicator that there is much scope for better industrial relations. The impact of the one month lock down of the plant was not felt to too large an extent this time because of the overall slowdown and slack in demand. But in a year with strong demand, such an incident could have much worse effects on the top and bottom line. 3. Maintain performance and market share: Throughout the FY13 report, it is observed that FY13 has been an exceptionally good year for the company, despite certain labour challenges. All the performance ratios have improved year on year. Hence it is recommended that the company maintain this performance level and market share.
EXPENSES
Cost of Material Consumed Purchase of Stock-in-Trade Change in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade Employees Benefit Expenses Finance Costs Depreciation and Amortization Expense Other Expenses Vehicles/Dies for Own Use Total Expense Profit before Tax Less: Tax Expense - Current Tax - MAT Credit Awaited -Deferred Tax Profit for the Year Basic / Diluted Earnings Per Share of 5 each 305741 19613 234 10696 1898 18612 57737 (438) 414093 29910 7228 (904) (335) 23921 79.19
BALANCE SHEET
(All amounts are in millions of ) EQUITY AND LIABILITIES
Shareholders' Funds Share Capital Reserves & Surpluses Total Long term borrowings Deferred Tax Liabilities (Net) Other Long Term Liabilities Long term Liabilities Total Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions Total TOTAL EQUITY AND LIABILITIES
As At 31.03.2013 1510 184279 185789 5429 4087 1036 2259 12811 8463 41674 11661 6482 68280 266880 95765 2227 19422 117414 18485 12787 8946 157632 52298 18407 14237 7750 11153 5403 109248 266880
As at 31.03.2012 1445 150429 151874 0 3023 966 1693 5682 10783 33499 15892 5292 65466 223022 73108 2099 9419 84626 13933 13410 263 112232 47541 17965 9376 24361 7783 3764 110790 223022
Non-Current Liabilities
Current Liabilities
ASSETS
Tangible Assets Intangible Assets Capital Work in Progress TOTAL
Non-Current Investments Long Term Loans & Advances Other Non-Current Assets TOTAL NON-CURRENT ASSETS (a) Current Investments Inventories Trade Receivables Cash & Bank Balances Short Term Loans & advances Other Current Assets TOTAL CURRENT ASSETS (b) TOTAL ASSETS (a+b)
Current Assets
For the year ended 31.3.2013 29910 18612 1898 (3134) (417) 331 (4101) (472) 1425 44,052 6400 268 996 (477) 70 (3693) 3485 2358 (2215) (1930) (139) 49175 (5333) 43842 (38549) 449 118332 (127492) (15000) 22600 3502 417 (35741) 8,463 -10,783 1688 -4,510 -2,003 -2,167 -351 -9,663 -1,562 1,761 1,051 1,250 1,250 1,031 219 0
For the year ended 31.3.2012 21462 11384 552 (4036) (699) 157 (2442) (1091) 556 25843 7416 254 1195 2000 7 (1131) (3815) (863) (947) (1970) 119 28108 (2509) 25599 (29697) 67 159780 (167598) (22600) 24130 4261 699 (30958) 10,783 -312 0 (1,362) (426) (2,167) (351) 6,165 806 955 0 1,761 1,761 696 65 1,000
2013
93737/426126 * 100 = 22 23921/426126 = 5.61 386142/191218 = 2.02 23921/158382 = 0.1510
2012
62770/347059 = 18.09 16352/347059 = 4.71 323029/151874 = 2.13 16352/129950 = 0.1258
Return on Investment (ROI) Return on Equity (ROE) Return on Net Worth (RONW)
Return on Common Equity Return on Total Assets Return on Capital Employed (ROCE)
23921/185789 = 0.1288
23921/185789 = 0.1288 23921/185769 = 12.87 23921/244951 = 9.76 23921/191218 = 0.1251
16352/151874 = 0.1077
16352/151874 = 0.1077 16352/151874 = 10.76 16352/203636.5 = 8.03 16352/151874 = 0.1077 16352/288910060 = 56.6 16352/223022 = 0.073
23921/302080060 = 79.19
29910/266880 = 0.11
Quick Ratio
Current Ratio Debt Equity Ratio Proprietary Ratio Dividend Coverage Ratio
Interest Coverage
(Current Assets Prepaid Expenses)/(Current Liabilities Short Term Bank Overdraft) Current Assets / Current Liabilities Debts/Equity
Stockholder's Equity/Total Assets (Profit after tax - Dividend paid on Irredeemable Preference Shares)/Dividend paid to Ordinary Shareholders EBIT/Interest Expense Net Operating Income/Total Debt Service
79688/68280 = 1.167
85042/65466 = 1.3
109248/68280 = 1.6
110790/65466 = 1.692
21274/185789 = 0.1145
185789/266880 = 0.6962
16465/151874 = 0.1084
151874/223022 = 0.681
23921/2167 = 11.04
16352/2167 = 7.55
NA 29910/17296 = 1.729
NA 21462/2100 = 10.22
Debt Service Coverage Ratio (DSCR) Inventory Turnover Total Asset Turnover Net Working Capital
Fixed asset turnover Inventory Holding Period
Annexures
ROE DuPont
ROE= Net income / Equity
PBT/EBIT
EBIT/Sales
Sales/Assets Assets/Equity
Net Income
PBT
EBIT
Sales
Assets
Equity
PBT
EBIT
Sales
Assets
Share Capital
Current Assets
2013
Current Assets Non-current assets Assets Share capital Reserves and surpluses Equity Sales EBIT PBT Net Income Assets/ Equity Sales/Assets EBIT/Sales PBT/EBIT 109248 157632 266880 1510 194279 185789 426126 29910 29910 23921 1.4365 1.5967 0.0702 1 Current Assets Non-current assets Assets Share capital Reserves and surpluses Equity Sales EBIT PBT Net Income Assets/ Equity Sales/Assets EBIT/Sales PBT/EBIT
2012
110790 112232 223022 1445 150429 151874 347059 21462 21462 16352 1.4685 1.5561 0.0681 1
0.7998 0.1288
0.7619 0.1077
Components and Raw Materials Work in Progress Finished Goods Manufactured Vehicles Vehicle Spares and Components Traded Goods Vehicles Vehicle Spares and Components Stores and Spares Tools Total
Note 21- Cash and Bank Balances As at 31.3.2013 (%) As at 31.3.2012 (%) 0.08 0.02 13.23 2.84 2.75 0.25 0.00 4.10 38.71 22.99 45.16 0.08 100.00 69.78 0.02 100.00
Cash on hand Cheques and drafts on hand Bank balances in Current Accounts Deposits less than 3 months original maturity period Deposits more than 3 months and upto 12 months original maturity period Deposits more than 12 months original maturity period Unclaimed Dividend Accounts Total
Note 28- Employee Benefit Expenses As at 31.3.2013 (%) As at 31.3.2012 (%) 85.56 83.11 6.25 10.65 8.18 6.24 100.00 100.00
Salaries, Wages, Allowances and Other Benefits Contribution to provident and other funds Staff welfare expenses Total
Altman Z Score
The Altman Z Score was designed as a way to rank a manufacturing company's risk of going bankrupt. A Z Score above 2.99 is safe; 1.81 to 2.99 means there is a chance the company will declare bankruptcy in the next two years; and less than 1.81 means the company is severely distressed. It is given by: Z = 1.2 * [(Current Assets Current liabilities)/Total Assets] + 1.4 * [Retained Earnings/Total Assets] + 3.3 * [EBIT/Total Assets] + 0.6 * [Equity Value/Total Liabilities] + 1 * [Sales/Total Assets]
The z score for Maruti for the FY 2012-13 is 3.835, indicating this is a healthy firm.