Description
It talks about the Group History and the present management structure. It also highlights the vision, brand equity and also the quality management system. It also describes the marketing strategies, planning and business strategy of A-One Cycles. It then wraps up with the Product range and the financials of the company.
A-One Cycles
Company Profile ESTABLISHED: 1950 GROUP HISTORY
The beginnings were humble. The founders Sharma Brothers dreamt of giving the common man of this country an affordable means of mobility in those early days of our country’s independence. Excellent quality, economical price and ethical business dealings earned them instant acceptability. Holding these values close to their hearts they built the trust brick by brick Starting up a bicycle saddles and brakes manufacturing unit in 1948, the Sharmas set out on a long and arduous journey. A-one Cycles came into being in 1950 when the first batch of 500 bicycles rolled out of its plant. The numbers have been going up, ever since. From amongst the pioneers of the Indian bicycle industry, A-ONE has remained in the top performers’ position for over half a century. The promoters’ abiding faith in human values and fairness, built enduring business bonds with a vast dealer network in India and abroad. High-class technology, consistent quality and effective after-sales service made up a perfect proposition. A-ONE is the only group anywhere in the world with full backward integration. They have facilities for making almost all the parts, including Steel Balls needed for their Bicycles. This places them a cut above the rest when we talk of quality born of work culture. They did not venture into Tyre and Tubes, these being in a different discipline, altogether. To meet their expanding requirement of raw materials, they added facilities for making Steel Strips, Steel Tubes and Hot Rolled Steel, achieving full backward integration, unmatched and unequalled anywhere else. PRESENT ORGANISATION Mr. Rakesh Sharma is the Chairman. Mr. Ganpat Sharma leads the team as Managing Director. His two sons serve as full time working directors. The elder Rishi, has Purchases and Works under him and the younger Mangesh looks after Sales and Finance. There is hierarchy of senior Vice Presidents, Vice Presidents and General Managers heading various functions. The organisation combines the simplicity and speed of a family business and the broadbased features of corporate functioning. The former inspires trust, and the latter confidence in its ability to perform continually and consistently. LOCATION The Company’s Head Office and manufacturing units are conveniently located on the G.T. Road at Ludhiana, a buzzing industrial city in the northern state of Punjab. The city is well connected with other major cities and ports by Rail, Road and Air. The national capital Delhi is 300 KM away. Placed on an 85,000 square meters site in the ‘cycle capital of India’, A-ONE is a truly integrated bicycle manufacturer rolling out an impressive 1.5 million true born machines per annum: most modern plants and machinery systems, comparable to the best in the world, make it possible.
BRAND EQUITY Years of trust building has earned A-ONE the status of a household name. ‘A-ONE’ has become synonymous with dependable quality at competitive price. VISION As a manufacturing company, the company is committed to delivering quality at affordable price. Technological innovation has been one of the most natural advantages of its organisational structure. In more than fiftyfive years of its being, it has invested heavily in its human capital. The highly motivated work force carries a sense of belonging. Their happiness is the key to its growth. Some of the workers joined the company in their youth and now, their second generation is growing with it to be old enough to bequeath their trust to the generation next. They have grown with the company. OVERSEAS In Bicycles and Bicycle Parts, the company distinguishes itself as the Largest Manufacturer Exporter from India. That it has enjoyed this status now for several years in a row, speaks of the popularity of its brands overseas. A-ONE is an ‘Export House’ recognised by the Government of India. EXPANSION PLANS Currently the company is engaged in exploring the development of a range of e-bikes and e-scooters. Suitable infrastructure spread over an additional floor area of 35, 000 square meters is being considered. Offers of collaboration by overseas companies are being evaluated.
CUSTOMER FOCUS: In addition to the customer-specified requirements, the company ensures those not specified but considered necessary with reference to the intended use and any regulatory and legal requirements.
QUALITY MANAGEMENT SYSTEM: ISO 9001: 2000 (E) by TUV Cert is in place. Marketing PHILOSOPHY: For every A-ONE product to be an excellent Value For Money (VFM) proposition, the company adopts a proactive role to determine level of satisfaction and understand the changing consumer aspirations.
DISTRIBUTION: Inland, through a well-established network of about 1,600 A-ONE authorised dealers in cities and towns of India. A dedicated resource of more than 12,000 sub-dealers supports operations of the dealership. Overseas operations are conducted through Representatives in respective countries / regions. The company’s executives are regularly visiting overseas markets, Trade Fairs and Exhibitions
LOGISTICS: For safe and speedy delivery to the dealership points spread across the length and breadth of the country, the company employs a number of reputed transporters and haulers on a
sub-contracting basis. For multiple delivery point trips, the company’s accompanying attendants ensure correct and proper delivery
VISIBILITY: At home in 65 countries worldwide, the company’s products are regularly showcased in International Trade Fairs and Exhibitions. The Company’s products are exported mainly to U.S.A., U.K. Germany and other European countries MARKETING STRATEGIES Wide choice, updated quality, affordable price, streamlined distribution network and an appealing message. LOYALTY The company’s dealers have been with it all through. Many of them have grown into the second, even third generation of owners. Their hopes and aspirations are inseparably linked to the company’s prosperity. This has fostered enduring relationships.
PRODUCTION TECHNOLOGY: To remain in step with the fast changing technology, the Research & Development division is constantly engaged in quality upgrades. Regularly updated, responsible, and sustainable cleaner production technologies are employed.
PLANNING: The Production Planning & Control department works in tandem with the Inland and Overseas wings of the Marketing department to ensure correct and timely shipments. WORK ENVIRONMENT: Clean, congenial and commensurate environment keeps the work force motivated. Workers participation in goal setting makes them exceptionally self-driven. HUMAN RESOURCE: Recruitment and training hinges on the principle of right man for the right job on agreeable terms. On-job training, orientation training and HRD training are continuing processes. PRODUCT REALISATION: The processes and machinery employed are consistent with the Quality Management System in place. Periodical customer feedback on quality, level of satisfaction and servicing of complaints is relied upon as a regular input for improvement. BUSINESS STRATEGY To keep ahead of the competition the company gainfully draws upon the emerging technologies, stays engaged in its constant endeavour to add value, and keeps a close watch on its costs.
A CUT ABOVE In customer relations, the company prefers to stay a shade different from the rest. By internalising the phenomenon called customer it relies on his feedback. Many of its innovations are born in such a co-operative environment. ‘Aap ne sujhaayi, hum ne banaayi’ meaning ‘we made it exactly as per your suggestion’ has been its advertising refrain. The company encourages and suitably acknowledges these inputs.
Product Range
Bicycles For gents : 12 different models to suit varied requirements For ladies : 2 different models For boys : 30 different models for all age groups For girls : 7 different models Unisex models : 6 models For kids : 25 different models
Parts for bicycles Almost all the parts of a bicycle except for a few are manufactured by the Company. Fitness range Exercising machines are available in 4 different models
Financials Equity Share related information The company’s shares are listed in the National Stock Exchange and the Bombay Stock Exchange.
Share Prices in Stock Exchanges NSE High 60 58 NSE Low 53 43 BSE High 60 58 BSE Low 54 46
Apr-08 May-08
Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09
52 47 55 48 41 41 39 38 35 28
37 40 44 335 22 27 34 31 25 22
49 47 54 48 40 40 39 38 35 28
40 39 44 34 22 27 33 30 26 22
Shareholding pattern as on 31st March, 2009 Promoter Group Public Financial Institutions and banks Indian companies Indian public 20% 10% 23% 47%
The equity capital of the company has been raised in the following manner : Initial Capital contributed by promoters IPO in 1960 Rights Issue in 1970 Rights Issue in 1980 Bonus Issue in 1990 Rs. 5 crores Rs. 5 crores Rs. 10 crores Rs. 20 crores Rs. 10 crores
Balance Sheet as on 31st March, 2009 Rs. In crores Share capital 5,00,00,000 equity shares of Rs. 10/- each General Reserves 50 100
Share Premium Account Profit & Loss account Secured, long term loans from financial institutions Working Capital loans Current liabilities Total Fixed Assets Gross Block Less depreciation Net Block Investments Current assets Total 375 75
10 25 100 25 2 312
300 2 10 312
Profit & Loss Account for the year ending 31st March, 2009 Net Sales Domestic Exports Manufacturing expenses Administrative expenses Marketing & selling expenses PBT Tax PAT 650 150 100 900 100 20 80 650 350
The Company wants to enter the electric bike segment. It has estimated the following capital expenditure and revenues from this project : Estimated revenues (at peak production capacity) Domestic sales Exports Initial Capital Expenditure Rs. 200 crores Rs. 200 crores Rs. 125 crores
(Production capacity will be situated in India close to its current manufacturing facilities.)
The Company is planning to raise the required funds in the following manner : Retained earnings Fresh equity Fresh borrowings Rs. 25 crores Rs. 50 crores Rs. 50 crores
The options that the Company is considering for raising the equity and debt are : (1) (2) (3) (4) A GDR or ADR issue Total debt through ECB route Total debt through FCCB route A combination of ECB and FCCB
Examine each of the above proposals and advise the Company appropriately. If you feel that a different structure for raising the required funds is advisable, you may suggest that with justification. (You have to consider foreign equity and/or foreign debt). You make reasonable and valid assumptions as required.
ADR: 14 weeks to list, level 3 ADR reqd. Costs $500000 - $2000000 take avg. $1000000. GDR:
doc_606212472.docx
It talks about the Group History and the present management structure. It also highlights the vision, brand equity and also the quality management system. It also describes the marketing strategies, planning and business strategy of A-One Cycles. It then wraps up with the Product range and the financials of the company.
A-One Cycles
Company Profile ESTABLISHED: 1950 GROUP HISTORY
The beginnings were humble. The founders Sharma Brothers dreamt of giving the common man of this country an affordable means of mobility in those early days of our country’s independence. Excellent quality, economical price and ethical business dealings earned them instant acceptability. Holding these values close to their hearts they built the trust brick by brick Starting up a bicycle saddles and brakes manufacturing unit in 1948, the Sharmas set out on a long and arduous journey. A-one Cycles came into being in 1950 when the first batch of 500 bicycles rolled out of its plant. The numbers have been going up, ever since. From amongst the pioneers of the Indian bicycle industry, A-ONE has remained in the top performers’ position for over half a century. The promoters’ abiding faith in human values and fairness, built enduring business bonds with a vast dealer network in India and abroad. High-class technology, consistent quality and effective after-sales service made up a perfect proposition. A-ONE is the only group anywhere in the world with full backward integration. They have facilities for making almost all the parts, including Steel Balls needed for their Bicycles. This places them a cut above the rest when we talk of quality born of work culture. They did not venture into Tyre and Tubes, these being in a different discipline, altogether. To meet their expanding requirement of raw materials, they added facilities for making Steel Strips, Steel Tubes and Hot Rolled Steel, achieving full backward integration, unmatched and unequalled anywhere else. PRESENT ORGANISATION Mr. Rakesh Sharma is the Chairman. Mr. Ganpat Sharma leads the team as Managing Director. His two sons serve as full time working directors. The elder Rishi, has Purchases and Works under him and the younger Mangesh looks after Sales and Finance. There is hierarchy of senior Vice Presidents, Vice Presidents and General Managers heading various functions. The organisation combines the simplicity and speed of a family business and the broadbased features of corporate functioning. The former inspires trust, and the latter confidence in its ability to perform continually and consistently. LOCATION The Company’s Head Office and manufacturing units are conveniently located on the G.T. Road at Ludhiana, a buzzing industrial city in the northern state of Punjab. The city is well connected with other major cities and ports by Rail, Road and Air. The national capital Delhi is 300 KM away. Placed on an 85,000 square meters site in the ‘cycle capital of India’, A-ONE is a truly integrated bicycle manufacturer rolling out an impressive 1.5 million true born machines per annum: most modern plants and machinery systems, comparable to the best in the world, make it possible.
BRAND EQUITY Years of trust building has earned A-ONE the status of a household name. ‘A-ONE’ has become synonymous with dependable quality at competitive price. VISION As a manufacturing company, the company is committed to delivering quality at affordable price. Technological innovation has been one of the most natural advantages of its organisational structure. In more than fiftyfive years of its being, it has invested heavily in its human capital. The highly motivated work force carries a sense of belonging. Their happiness is the key to its growth. Some of the workers joined the company in their youth and now, their second generation is growing with it to be old enough to bequeath their trust to the generation next. They have grown with the company. OVERSEAS In Bicycles and Bicycle Parts, the company distinguishes itself as the Largest Manufacturer Exporter from India. That it has enjoyed this status now for several years in a row, speaks of the popularity of its brands overseas. A-ONE is an ‘Export House’ recognised by the Government of India. EXPANSION PLANS Currently the company is engaged in exploring the development of a range of e-bikes and e-scooters. Suitable infrastructure spread over an additional floor area of 35, 000 square meters is being considered. Offers of collaboration by overseas companies are being evaluated.
CUSTOMER FOCUS: In addition to the customer-specified requirements, the company ensures those not specified but considered necessary with reference to the intended use and any regulatory and legal requirements.
QUALITY MANAGEMENT SYSTEM: ISO 9001: 2000 (E) by TUV Cert is in place. Marketing PHILOSOPHY: For every A-ONE product to be an excellent Value For Money (VFM) proposition, the company adopts a proactive role to determine level of satisfaction and understand the changing consumer aspirations.
DISTRIBUTION: Inland, through a well-established network of about 1,600 A-ONE authorised dealers in cities and towns of India. A dedicated resource of more than 12,000 sub-dealers supports operations of the dealership. Overseas operations are conducted through Representatives in respective countries / regions. The company’s executives are regularly visiting overseas markets, Trade Fairs and Exhibitions
LOGISTICS: For safe and speedy delivery to the dealership points spread across the length and breadth of the country, the company employs a number of reputed transporters and haulers on a
sub-contracting basis. For multiple delivery point trips, the company’s accompanying attendants ensure correct and proper delivery
VISIBILITY: At home in 65 countries worldwide, the company’s products are regularly showcased in International Trade Fairs and Exhibitions. The Company’s products are exported mainly to U.S.A., U.K. Germany and other European countries MARKETING STRATEGIES Wide choice, updated quality, affordable price, streamlined distribution network and an appealing message. LOYALTY The company’s dealers have been with it all through. Many of them have grown into the second, even third generation of owners. Their hopes and aspirations are inseparably linked to the company’s prosperity. This has fostered enduring relationships.
PRODUCTION TECHNOLOGY: To remain in step with the fast changing technology, the Research & Development division is constantly engaged in quality upgrades. Regularly updated, responsible, and sustainable cleaner production technologies are employed.
PLANNING: The Production Planning & Control department works in tandem with the Inland and Overseas wings of the Marketing department to ensure correct and timely shipments. WORK ENVIRONMENT: Clean, congenial and commensurate environment keeps the work force motivated. Workers participation in goal setting makes them exceptionally self-driven. HUMAN RESOURCE: Recruitment and training hinges on the principle of right man for the right job on agreeable terms. On-job training, orientation training and HRD training are continuing processes. PRODUCT REALISATION: The processes and machinery employed are consistent with the Quality Management System in place. Periodical customer feedback on quality, level of satisfaction and servicing of complaints is relied upon as a regular input for improvement. BUSINESS STRATEGY To keep ahead of the competition the company gainfully draws upon the emerging technologies, stays engaged in its constant endeavour to add value, and keeps a close watch on its costs.
A CUT ABOVE In customer relations, the company prefers to stay a shade different from the rest. By internalising the phenomenon called customer it relies on his feedback. Many of its innovations are born in such a co-operative environment. ‘Aap ne sujhaayi, hum ne banaayi’ meaning ‘we made it exactly as per your suggestion’ has been its advertising refrain. The company encourages and suitably acknowledges these inputs.
Product Range
Bicycles For gents : 12 different models to suit varied requirements For ladies : 2 different models For boys : 30 different models for all age groups For girls : 7 different models Unisex models : 6 models For kids : 25 different models
Parts for bicycles Almost all the parts of a bicycle except for a few are manufactured by the Company. Fitness range Exercising machines are available in 4 different models
Financials Equity Share related information The company’s shares are listed in the National Stock Exchange and the Bombay Stock Exchange.
Share Prices in Stock Exchanges NSE High 60 58 NSE Low 53 43 BSE High 60 58 BSE Low 54 46
Apr-08 May-08
Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09
52 47 55 48 41 41 39 38 35 28
37 40 44 335 22 27 34 31 25 22
49 47 54 48 40 40 39 38 35 28
40 39 44 34 22 27 33 30 26 22
Shareholding pattern as on 31st March, 2009 Promoter Group Public Financial Institutions and banks Indian companies Indian public 20% 10% 23% 47%
The equity capital of the company has been raised in the following manner : Initial Capital contributed by promoters IPO in 1960 Rights Issue in 1970 Rights Issue in 1980 Bonus Issue in 1990 Rs. 5 crores Rs. 5 crores Rs. 10 crores Rs. 20 crores Rs. 10 crores
Balance Sheet as on 31st March, 2009 Rs. In crores Share capital 5,00,00,000 equity shares of Rs. 10/- each General Reserves 50 100
Share Premium Account Profit & Loss account Secured, long term loans from financial institutions Working Capital loans Current liabilities Total Fixed Assets Gross Block Less depreciation Net Block Investments Current assets Total 375 75
10 25 100 25 2 312
300 2 10 312
Profit & Loss Account for the year ending 31st March, 2009 Net Sales Domestic Exports Manufacturing expenses Administrative expenses Marketing & selling expenses PBT Tax PAT 650 150 100 900 100 20 80 650 350
The Company wants to enter the electric bike segment. It has estimated the following capital expenditure and revenues from this project : Estimated revenues (at peak production capacity) Domestic sales Exports Initial Capital Expenditure Rs. 200 crores Rs. 200 crores Rs. 125 crores
(Production capacity will be situated in India close to its current manufacturing facilities.)
The Company is planning to raise the required funds in the following manner : Retained earnings Fresh equity Fresh borrowings Rs. 25 crores Rs. 50 crores Rs. 50 crores
The options that the Company is considering for raising the equity and debt are : (1) (2) (3) (4) A GDR or ADR issue Total debt through ECB route Total debt through FCCB route A combination of ECB and FCCB
Examine each of the above proposals and advise the Company appropriately. If you feel that a different structure for raising the required funds is advisable, you may suggest that with justification. (You have to consider foreign equity and/or foreign debt). You make reasonable and valid assumptions as required.
ADR: 14 weeks to list, level 3 ADR reqd. Costs $500000 - $2000000 take avg. $1000000. GDR:
doc_606212472.docx