cash flow statement. final
Post on 21-Jan-2016
Embed Size (px)
The Escorts Group, is among India's leading engineering conglomerates operating in the high growth sectors of agri-machinery, construction & material handling equipment, railway equipment and auto components.
Having pioneered farm mechanization in the country, Escorts has played a pivotal role in the agricultural growth of India for over five decades. One of the leading tractor manufacturers of the country, Escorts offers a comprehensive range of tractors, more than 45 variants starting from 25 to 80 HP. Escort, Farmtrac and Powertrac are the widely accepted and preferred brands of tractors from the house of Escorts.
A leading material handling and construction equipment manufacturer, we manufacture and market a diverse range of equipment like cranes, loaders, vibratory rollers and forklifts. Escorts today is the world's largest Pick 'n' Carry Hydraulic Mobile Crane manufacturer.
Escorts has been a major player in the railway equipment business in India for nearly five decades. Our product offering includes brakes, couplers, shock absorbers, rail fastening systems, composite brake blocks and vulcanized rubber parts.
In the auto components segment, Escorts is a leading manufacturer of auto suspension products including shock absorbers and telescopic front forks. Over the years, with continuous development and improvement in manufacturing technology and design, new reliable products have been introduced.
The Escort Group has also been operating in the ITES and financial services sectors.
Throughout the evolution of Escorts, technology has always been its greatest ally for growth. In the over six decades of our inception, Escorts has been much more than just being one of India's largest engineering companies. It has been a harbinger of new technology, a prime mover on the industrial front, at every stage introducing products and technologies that helped take the country forward in key growth areas. Over a milliontractors and over 16,000 construction and material handling equipmentthat have rolled out from the facilities of Escorts, complemented byahighly satisfied customer base,are testimony to the manufacturing excellence of Escorts. Following the globally accepted best manufacturing practices with relentless focus on research and development, Escorts is today in the league of premier corporate entities in India.
Technological and business collaboration with world leaders over the years, Globally competitive indigenous engineering capabilities, over 1600 sales and service outlets and footprints in over 40 countries have been instrumental in making Escorts the Indian multinational. At a time when the world is looking at India as an outsourcing destination, Escorts is rightly placed to be the dependable outsourcing partner of world's leading engineering corporations looking at outsourcing manufacture of engines, transmissions, gears, hydraulics, implements and attachments to tractors, and shock absorbers for heavy trailers and armored tanks.
In today's Global Market Place, Escorts is fast on the path of an internal transformation, which will help it to be a key driver of manufacturing excellence in the global arena. For this we are going beyond just adhering to prevailing norms, we are setting our own standards and relentlessly pursuing them to achieve our desired benchmarks of excellence.
INDIAN TRACTOR INDUSTRY
India is predominantly an agricultural country.70% of the population lives in villages and villagers depends upon agriculture for their bread and butter. Since Indian valley civilization, agriculture is the main source of income but at that time the agriculture was manual work. Before independence Indian agriculture was in very bad situation. But since 1947, when India became independent, the farmers also became independent. They had seen many ups and downs in their income. After independence in five-year plans, first priority was assigned to agriculture government tried best to improve the industry but a systematic planned approach for development started in 1950, since than irrigation was recognized as key factor for agriculture. Education and research were also taken as a major initiative.
In over six decades of the inception, Escorts has been much more than just being one of India's largest engineering companies. It has been a prime mover on the industrial front introducing products and technologies and taking the country forward in key areas.
All these developments made mechanization mandatory for agriculture and imports of tractors began. Acceptance of mechanization was slow, in fiftys the use of tractor was very low. Green Revolution was the result of tractor was barely 10000 in 1970. The industry was producing around 25000 to 30000 tractors. Today, India is the largest tractor market estimating 2185000 tractors per annum with the annual growth of 12.3. Today the tractor industry is of about 5000 crores.
With the 12% of arable land, today India has 4.7% of the worlds tractor. India splits tractors largely into four categories i.e. 20-30hp, 31-40hp, 41-50hp, 51& above. 21-30hp and 31-40hp ranges into together are nearly 76%.SEGMENT OF TRACTORS ACCORDING TO HP WISETractor Range1965-971997-981998-991999-2000
Demand for big hp segment is increasing as per the table shown. In the budget of 1995-96, the central government has given subsidy of Rs. 30000 per tractor. The subsidy was for the user of low up segment tractors (for small farmers). The government wants to increase the usage of tractor for higher agriculture production. In the budget of year1998-99, the finance minister Mr. Yashwant Sinha has levied 8% excise duty on the imports. This was to save the Indian tractor industry form the slow down of economy and the East Asian Crises. According to economic survey of 1997-98 the production of agriculture has dropped by 205%. Until 1993-94 small tractor (below 25hp) were exempted fro the excise in bid to encourage small farmers. Because in India, almost 65% of farmers has less than 4 acres of arable land.
According to business India, due to the Mahindra & Mahindra and Swaraj tractors would be benefited about Rs. 10000 to Rs.12000 per tractor as compared to others, which imports parts from abroad. The compound average growth rate during last six years has been around 15%. The level of tractorization is high in Punjab & Haryana at around 95&74 tractors per thousand hectares respectively. The tractor demand is driven by agriculture Products, Interest Rates, Total
Agricultural Credit, Total Irrigation Facilities and Crop Pattern. Among them, credit is strongly correlated with the tractor sale. Nearly 80% of the tractors sale is through credit.
Financial Pattern:As stated above that 80% of the tractor is financed through credit rates essentially through commercial banks, regional banks, rural banks and state level land development banks. The credit worthiness of the farmer is ascertained to have minimum holding of 6 areas of cultivated land to be eligible for loan. However bank can provide a loan on smaller landholding subject to farmer establishing his credit worthiness. The credit inflow since financial year 1996 is increasing support from NSBARD. This has already allocated 2000 crores from current year.
Indian agricultural in the fifties followed age bound tradition and was considered backward. The country did not produce enough food grain to feed its 36 crores population and famines were recurrent features. Import of food grains became necessary to meet the short fall in domestic production, there by causing a drain on scare foreign exchange resources. It therefore became imperative to high priority to the development of agriculture.
First phase of development (1960-1967):
Farm mechanism made a small beginning in the first five year PLAN. Tractors were imported for introduction is isolated pockets. However acceptance of mechanization was a slow process due to lack of awareness about its economic usefulness and versatility.
The decade 1960 saw green revolution both increase in production and productivity with the parallel emphasis on industry. The birth of Indian tractor industry took place in 1959-60 when
import was restricted & five manufacturing units were set up in private sector all with collaboration. It was in this background that production of tractors in the country in 1960.NAMECOLLABORATIONYEAR OF COMMENCEMENT
M/S EICHER TRACTORS LTD.WEST GERMANY1959
M/S HINDUSTAN TRACTORS LTD.CZECHOSLOVAKIA1963
M/S TRACTORS & FARM, EQUIPMENT LTD.(TAFE)U.K.1963
M/S ESCORTS LTD.POLAND1964
M/S INTERNATIONAL TTACTORS CO. OF INDIA LTS LATER RENAMED AS MAHINDRA & MAHINDRAU.K.1965
The total indigenous production of tractors by 1965 was just 6000. The real spurt in mechanization of agriculture came in the introduction of high yielding variety (HYV) of seeds in 1966-67 and their enthusiastic adoption by farmers, particularly in the wheat growing northern region. With the successful introduction and acceptance these high quality seeds there was a upspring in the demand of tractors in 1967 and demand started multiplying at an annual rate of almost 50% (1967:1800-1970:33000).A natural consequent of sharp upsurge and consequent shortage was heavy price premium on tractors : Recognizing the situation , imports of tractors were liberalized and over and above the domestic production of 20000 in 1970 3000 tractors were imported.
Second phase of development (1968-1980):Since