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FIXED INCOME SECURITIES

AMTEK AUTO LTD


THE CASE OF BOND DEFAULT

Submitted By:
Anish E001
Vishesh Bagaria E009
Akash Bajpai-E011
Srinvantu Basu E013
Sushant Gupta E028

Contents
Amtek Auto ................................................................................................................................ 3
A fairy tale rise.......................................................................................................................... 3
The fall of Amtek Auto: the cookie crumbled .............................................................................. 4
Comparative Financials ............................................................................................................. 8

Role of rating agency ................................................................................................................. 8


Bank exposure to the group....................................................................................................... 9

Lessons to learn for mutual funds from Amtek Auto default .................................................. 11
New SEBI Rules ...................................................................................................................... 13
Amendments to SEBI (Mutual Funds) Regulations, 1996.............................................................. 14

Achievements/ recognition ...................................................................................................... 14


Exhibits .................................................................................................................................... 15

Amtek Auto
Amtek Group was established in 1985 with the incorporation of the flagship company,
Amtek Auto Limited. Since then, it has grown rapidly to emerge as a frontrunner in the
global automotive component industry through a number of strategic initiatives, including
acquisitions across Asia, Europe and North America (Exhibit 1). Amtek Auto Ltd.,
Dharuhera, part of the Amtek Group, is engaged in the machining and designing of a variety
of large- and medium-sized automotive components. Amtek Auto was established in 2006 at
Dharuhera and serves major OEM suppliers. The company is equipped with CNC equipment,
flex machining systems and fully automatic lines.
Amtek Autos product portfolio consists of an extensive range of components for two and
three wheelers, cars, tractors, light commercial vehicles, heavy-duty commercial vehicles and
stationary engines (Exhibit 2). The major categories of components manufactured are
connecting rod assemblies, flywheel ring gear assemblies, steering knuckles, suspension and
steering arms, crankshaft assemblies and torque links. In-house design and development
facilities ensure the highest level of quality for all of the companys products and services
through processes governed by Lean and Six Sigma methodologies. Accreditation includes
TS-16949 and ISO- 14001. Prominent customers include Tata, Maruti, International Tractors,
Hema Crank Shaft, Ashok Leyland, Bajaj Auto Ltd., Hero Honda, Escorts, Fiat India, Ford
and Yamaha Motors (Exhibit 3).

A fairy-tale rise
Arvind Dhams was a fairytale rise. After dabbling in the small family business of
construction for two years, in 1987 he shifted his focus to auto components, something close
to his heart, when Suzuki selected him as one of the vendors for Maruti. Amtek Auto was
incorporated in 1988. In 1993, the company started forging operations at Gurgaon and, three
years later, in 1996, set up a machining unit there. In 1997, it entered into a joint venture
agreement with Benda Kogyo Japan and formed Benda Amtek Ltd for making flywheel ring
gears. That was the beginning of a series of foreign collaborations and acquisitions over the
next one-and-a-half decades.
In 1999, it entered into a joint venture with Ateliers de Siccardi and formed Amek Siccardi at
Manesar for making crankshafts. Two years later, it acquired auto component manufacturer
Wesman Halverscheidt Forgings and took over the Indsil Auto Components Coimbatore
(India) Ltd, a fully automated foundry with machining facilities. In 2002, it set up an iron
casting facility at Bhiwadi, Rajasthan, and acquired 14.5% in Ahmednagar Forgings Ltd,
later ramping up the stake.
Then in 2005, it acquired a 70% stake in Zelter GmbH and the very next year signed an equal
partnership joint venture with a large Canadian company, Magna Powertrain, for making
two-piece flex plate assemblies for automotive applications. Another joint venture followed
with the same firm.
In the next few years, it set up an aluminium high-pressure die casting facility and another
unit for forging, casting and machining (both in Pune), expanded capacity of machined auto

parts and forging, and acquired a very large auto precision machining company, Triplex
Keltron Group, Amteks strongest competitor, running close to 185 different machining lines
in various parts of the UK.
It didnt stop there. In 2008, it signed a joint venture agreement with leading US railcar
maker American Railcar Industries Inc. and another with FormTech Industries Llc, based in
Royal Oak, Michigan, to set up a facility for making hatebur hot forgings in India and
Europe.
The collapse of US investment bank Lehman Brothers Holding Inc. in September 2008 and
the dramatic drop in consumer demand that followed in its aftermath did not dampen Dhams
spirit. With equal gusto he floated joint ventures with Japanese steel maker Sumitomo Matal
Industries Ltd and Israeli firm Enertec Management Ltd and expanded capacity at local units
at a breakneck speed.

The fall of Amtek Auto: the cookie crumbled


There was super aggressive growth both in India and overseas, backed by plenty of money
available in the form of cash flow from business as well as bank loans. The composition of
the business, too, changed.
Over the past two years, Amteks international business has grown to 44% of total revenue
and 24% of total EBITDA, or earnings before interest, taxes, depreciation and
amortizationa metric used to measure a companys operational profitabilitybut it has
only 7% share of the total group debt.
If this sounds a bit vague, look at the figures. I dont have the September data. For the nine
months ending June 2015, Amtek Auto had a revenue of Rs.2,940 crore, other Indian entities
were Rs.4,305 crore, and the contribution from international business came to Rs.5,714 crore,
taking the total to Rs.12,960 crore.
When it comes to EBITDA, in June, Amtek Auto had Rs.781 crore, other Indian
entities Rs.994 crore while the overseas operations contribution was Rs.546 crore. The total
was Rs.2,321 crore.
Now comes the most interesting piece of this puzzlethe debt. Amtek Auto had a debt
of Rs.9,923 crore in June 2015; its other Indian entities, including Ahmednagar Forging and
Castex Technologies (formerly Amtek India Ltd) Rs.9,811 crore, and international
businesses only Rs.1,400 crore. Out of a total Rs.21,134 crore debt, international businesses
exposure to lenders was only 7%.
Simply put, by using the Indian banking system, Amtek has built its international business.
But its lenders do not get the benefit of the cash flows from the international business as they
have been ring-fenced. How?
In November 2014, Amtek Global Technologies (AGT), the holding company for
international businesses, entered into a credit arrangement with KKR & Co. Lp under which

KKR provided AGT with 235 million of long-term financing. While doing so, KKR
restricted Amtek and AGT from making any repayment to its group entities and or any other
payment to Indian entities. These details were not disclosed to lenders in India, coming to
light only when Amtek was facing a cash crunch leading to delayed payment of interest and
principle dues to Indian lenders, beginning April 2015.
On a conservative estimate, if Amteks loan cost is around 10%, it has to serve at
least Rs.2,100 in interest alone. How can Amtek serve this when its Ebitda from domestic
operations is less than this, around Rs.1,775 crore?
In the six months between September 2014 and March 2015, Amtek Autos capital
expenditure was Rs.1,623 crore. This investment was done in an environment where capacity
utilization at the company had been 35% in forgings and castings, 33% in aluminium
castings and 50% in machined auto components.
As of March, Amtek Auto had extended Rs.1,230 crore as loans and advances to related
parties, including Rs.654 crore to its international subsidiaries (AGT, Amtek Deutschland
GmbH, Amtek Investments (UK) Ltd, Amtek Germany Holding GP GmbH and Amtek
Precision Engineering Pte Ltd).
In addition, since September 2013, Amtek has acquired three international companies
Asahi Tec, Rege Holding GmbH and Scholz Edelstahl GmbHwith a combined revenue of
$710 million and at an estimated value of $227 million.
Auto components could be his first love, but the promoter of Amtek believes in
diversificationeven if that means getting into new businesses which are totally unrelated to
his companys core business. So, we find Rollatainers Ltd, a thinly traded public listed firm
that offers complete packaging solutions. The promoters of the Amtek group hold a 75%
stake in this company.
Rollatainers, in turn, owns Barista Coffee Co. Ltd, Mapple Hospitality Pvt. Ltd (hotels and
restaurants, with a presence in Delhi, Bengaluru, Jodhpur, Corbett and Bhimtal), franchises
in India for Wendys and Jamies Italian, Welgrow Hotels Pvt. Ltd (which owns the Italian
restaurant chain Sartoria) and Kylin, which operates a range of restaurants under the brand
names Kylin Premier, Kylin Experience, Kylin Skybar, Go Kylin and Kylin Express.
Then, it has numerous real estate companies in its fold. Some of them are: Adhbhut
Infrastructure Ltd, Lotus Infraestates Pvt. Ltd, Hazel Real Estate, Forbes Builders Pvt. Ltd,
Ashoka Developers & Builders Ltd, Chandni Realtors Pvt. Ltd, Dhanpat Properties Pvt. Ltd,
Dilkhush Buildtech Pvt. Ltd, Ghanshyam Realtors Pvt. Ltd, Kusham Real Estate Pvt. Ltd,
Rista Developers Pvt. Ltd and Radhika Buildprop Pvt. Ltd.
Yes, there are other businesses tooOCL Iron and Steel Ltd, Amtek Travels Pvt. Ltd, Amtek
Lifestyle Tour Pvt. Ltd, SPT Infotech Pvt. Ltd and Kamakshi Silk Mills Pvt. Ltd. The list
could be even longer.

For the lenders, Amtek Auto has been a time bomb ticking away. It failed to repay its
institutional holders nearly Rs.800 crore in bonds that were due for redemption on 20
September. Before that, in August, JPMorgan Mutual Fund restricted withdrawals from two
of its fundsJP Morgan India Treasury Fund and JPMorgan India Short-Term Income
Fundwhich have a collective exposure of aboutRs.200 crore in Amtek Auto.
The bonds were issued in 2010. Axis Bank Ltd was the lead arranger for the bond issue.
Although Amtek Auto has defaulted on Rs.800 crore of non-convertible debentures
(including to lenders such as JPMorgan Mutual Fund, IDBI Bank and Axis Bank), media
reports indicate that it has selectively repaid high-net-worth individuals holding these bonds,
including Bollywood star Aishwarya Rai Bachchan, movie maker David Dhawan and a few
others. Amtek promoters denied this to the bankers.

Comparative Financials
Stung by the Amtek Auto episode, Corporate India is taking additional precautions while
investing in debt schemes of mutual funds. Investors are now looking at the net worth and
profitability of a fund house and digging deeper into the credit profile of individual schemes
before making an investment decision. Amtek Auto Ltd portrays a contrasting financial
health after it declared default in 2015. Amtek reported a loss of Rs.157.6 crore in the June
quarter (2015). In the March quarter, the company had reported a profit ofRs.127.82 crore,
while net profit in the June 2014 quarter was Rs.223.17 crore.
The EPS of Amtek auto was worst hit because of the default as it is one of the important
factors that investors look before investing in any company. The EPS declined from 14 to -5.
As of March, the company had a total debt of Rs.7,844.12 crore. Amtek Autos interest
coverage ratio, a measure of how easily firms can meet their interest costs, has slipped from
7.28 in March 2008, to as low as 0.09 times at the end of June15.
The key financials for the corporate that is the net profit margin which was at a peak value of
14.5% declined to -3.08% in the year ending March15. Also, the return on net worth slipped
to -2.27% from a peak of 9% in 2013 (Exh. 5). The above decline has resulted in loss for the
shareholders value.

Maturity profile of the company

As per FY 2013

Year

Non-Convertible
debentures

Term Loans

External Commercial
Total ( Crore)
Borrowings

2014-15

866.00

489.00

13.33

2,088.15

2015-16

106.00

550.84

6.67

1,090.39

2016-17

106.00

360.93

26.66

2,199.83

2017-18

106.00

121.84

103.33

6,944.29

2018-19

106.00

100.00

103.33

6,922.45

2019-20

4,000.00

60.00

83.34

9,477.10

2020-21

67.50

67.50

2021-22

92.50

92.50

2022-23

50.00

50.00

Total

5,290.00

1,892.61

28,932.21

7,182.61

As per FY 2014
Year

Non-Convertible
debentures

Term Loans

External Commercial
Total
Borrowings

2014-15

2015-16

106.00

726.67

6.67

1,266.22

2016-17

106.00

602.39

26.66

2,441.29

2017-18

106.00

354.37

103.33

7,176.82

2018-19

106.00

407.55

103.33

7,230.00

2019-20

4,000.00

261.92

83.34

9,679.02

2020-21

235.55

235.55

2021-22

122.00

122.00

2022-23

50.00

50.00

Total

4,424.00

2,760.45

7,184.45

28,200.90

The maturity profile of the company gives us the indication that company has been
refinancing its debt. If we look at the non-convertible debentures and term loan whose
maturity year where 2014-2015, those where repaid as per the maturity date but there was no
change or in fact there a rise in total debt.
If we look at the acquisition of Amtek India Ltd. the company acquired a total of 66.45% of
the stake in which 26.25% if the stake was acquired through a block deal on BSE @ 64.83
while the rest of the stakes were acquired by a deal which was struck at 68 per share ( 28%
premium over market price). The financing of the deal was done using internal cash accruals.
Moreover the acquisition of JMT auto where 51.27% of stake was acquired whose financing
of the deal was done through internal cash accruals and debt. This deal was struck at
148.70 per share.

The role of rating agencies


On 9 October, Brickwork Ratings India Pvt. Ltd downgraded non-convertible debentures
(NCDs) worth Rs.484 crore issued by Amtek Auto to a D rating because of delays in
servicing debt. Instruments with this rating are in default or are expected to be in default. The
revision was on account of delays in the servicing of coupon to debenture holders due on 1
October. There had been a rapid deterioration in the rating. Brickworks July 2015 rating of
Amtek was A+, dropping to C in August and finally D in October.
Care Ratings suspended its ratings in August following the companys failure to furnish
information required for monitoring the rating. Till April, Amtek enjoyed AA rating for its
bonds as well as long-term bank debt and A1+ rating for short-term bank debt from Care. In
May, the bonds and long-term bank debt ratings were brought down a notch, but the shortterm loan continued to enjoy A1+ rating. A 27 May Care note said, The ratings ... continued
to deliver strength from the experience and the resourcefulness of the promoters.
In medical parlance, it was like detecting stage IV cancer in a patient all of a sudden. The
only difference isa patient needs to go to a doctor but rating agencies are expected to
monitor the companies on their own. It seems that they did not smell the rot.
Incidentally, Crisil Ltd, a Standard & Poors company, too gave the highest rating to the JP
Morgan fund that had Amtek paper in its portfolio. It had assigned the AAAmfs rating to the
JP Morgan India treasury scheme in May, signifying the highest portfolio credit quality. Such

a rating is normally arrived at after examining the ratings of the outstanding portfolio of a
mutual fund. The methodology of assigning ratings to a mutual fund scheme is typically
based on shadow ratings of the papers of the companies in which the fund has invested and
the ratings of which may not be available in the public domain.
In August, after the public ratings of the automotive components firm were either suspended
or downgraded by other raters, Crisil revised the scheme rating in three stages over two
months: first, on 1 September, it downgraded it from AAAmfs to A+mfs and then, on 29
September, to BBBmfs (overall, an eight-notch downgrade in one month), and then on 15
October, it placed the scheme on the so-called notice of withdrawal.
What has Amtek been doing to get out of the mess? First, in September, $80 million worth of
foreign currency convertible bonds (FCCBs), floated by Castex Technologies Ltd, got
converted into equity, giving breathing space to the group. Or, so it thought.
The FCCB holders have written to Indias capital markets regulator Securities and Exchange
Board of India (Sebi) and the bourses, saying the prices of Castex Technologies shares were
artificially pushed up for a certain period of time, triggering a clause in the agreement that
permits the company to enforce the conversion of FCCBs into equity. The clause states that if
the Castex share trades at a price higher than approximately Rs.160 for a period of one
month, the company can enforce conversions. Castex shares rose from a low of Rs.40 in
March to consistently trade above Rs.160 a share between June and August, reaching a peak
of Rs.360 in July, inducing the conversion of the FCCBs. However, after August, the price is
back to Rs.40 per share.
Although a Sebi investigation is underway, recent media reports indicate that the ongoing
investigation has not yet found any evidence of market manipulation.
Bank exposure to the group
As on 31 May, a group of 19 banks had major exposure to the group in the form of term
loans, besides many other banks that had given working capital loans and foreign currency
loans and subscribed to its bonds. The consortium had sanctioned Rs.3,795 crore worth of
term loans and disbursedRs.3,329.26 crore. IDBI Bank Ltd and State Bank of India (SBI) are
the leaders of the consortium. IDBI Bank sanctionedRs.450 crore and disbursed Rs.262
crore. SBI sanctioned and disbursed Rs.350 crore. Others include State Bank of Bikaner and
Jaipur (Rs.220 crore sanctioned and Rs.150 crore disbursed, respectively), Canara Bank
(Rs.300 crore, fully disbursed), IFCI Ltd (Rs.350 crore), Life Insurance Corp. of India
(Rs.300 crore), State Bank of Mysore, State Bank of Patiala and Bank of Baroda (Rs.200
crore each), Oriental Bank of Commerce, Allahabad Bank and ICICI Bank Ltd (Rs.150 crore
each).
Additionally, Amtek had sold bonds worth Rs.1,930 crore. TheRs.800 crore default is part of
this.

IDBI Bank, Canara Bank, Punjab National Bank, Bank of Baroda and a few others have
exposure to Amtek to the tune of $350 million worth of foreign currency loans, with IDBI
Bank having the maximum exposure, $185 million.
IDBI Bank has also given the Amtek group working capital loans, albeit in a small
quantity, Rs.47.50 crore out of Rs.1,597 crore. Corporation Bank, Andhra Bank and Indian
Overseas Bank together account for the rest.
Then, there is a group of unsecured creditors too, mostly foreign banks such as Deutsche
Bank AG, Credit Agricole SA, Citibank NV, Standard Chartered Bank Plc, Bank of Nova
Scotia, among others. The total exposure here is a little over $163 million. Two Indian
entities on this list are Kotak Mahindra Bank Ltd and Yes Bank Ltd.
None of the banks have classified its exposure to Amtek as a bad loan and hence not
provided for it. Amtek has managed to keep its outstanding dues to within 90 daysand
continues to do so. Which is why almost all the lenders have classified Amtek as SMA-2, or
special mention account.
The SMA-2 category refers to those accounts where the principal or interest payment is
overdue for 61-90 days. This is the third stage in an accounts progress to becoming a nonperforming asset, or NPA, after SMA-0 (where the principal or interest payment is not
overdue for more than 30 days but the account shows signs of incipient stress) and SMA-1
(where the principal or interest payment is overdue for 31-60 days). Once a borrower is not
able to service the account for 90 days, it becomes an NPA and the lenders need to set aside
money for such an account.
Once a loan account worth Rs.5 crore or more is classified as SMA, banks are expected to
report all relevant data to the Central Repository of Information on Large Credits, set up by
the Reserve Bank of India (RBI). In accordance with RBI norms, when a loan account starts
showing signs of stress, bankers are required to create a Joint Lenders Forum (JLF) to chalk
out an action plan. The creation of a JLF is mandatory when a relatively large accountwith
an exposure of at least Rs.100 croreis categorized as SMA-2, even as the lenders always
have the option of setting up the forum for smaller accounts.
If the existing promoters are not in a position to bring in additional money or take any
measures to regularize the account, the JLF can explore the possibility of getting new
investors in the company in consultation with the borrower. The account can be restructured
if it is prima facie viable and the borrower is not a wilful defaulter, who has resorted to fund
diversion. If these two options are not feasible, the JLF can initiate a recovery process. All
decisions of the JLF need to be endorsed by a minimum of 75% of lenders by value and 60%
by number.
The Amtek management has indicated to the banks that the majority of lenders have agreed
to the proposal under the JLF and received internal approvals for rollovers, interest financing,
etc. It is urging others to give their approval to get it going. According to Amtek, the delay in
completion of the financing is because the group has had to deal with multiple banks on a

one-on-one basis and that has taken time, although the recent RBI guidelines in this regard
are helpful and will speed up the process.
Three group firms are involved in debt restructuring: Amtek Auto, Ahmednagar Forging and
Castex Technologies. IDBI Bank is leading the discussion on Amtek Auto, while SBI is
leading on Ahmednagar Forging and Castex Technologies. The discussions have been
veering around the restructuring of the group debt in two partsthe infusion of funds by its
promoter and the banks to take care of immediate working capital needs and the recasting of
existing debt by extending maturity to 10 years, including a two-year payment holiday. This
is to take care of the firms tight liquidity situation.
As a precondition for pumping in Rs.1,250 crore of fresh loans, the banks are asking the
promoters to infuse Rs.220 crore. So far, the promoters have infused Rs.75 crore as part of
their contribution. For additional cash infusion, the promoters may need to rely on the sale of
their interests in other businesses, including food, hospitality and real estate.
Given that the domestic business performance has not yet shown signs of revival, the
company has very little option but to rely on divestitures to pare its debt. It has appointed
Morgan Stanley to evaluate sale options for international assets as well as for a significant
minority position (up to 40%) in its international business holding company. Media reports
suggest that Amtek Auto might end up selling Tekfor, the German forging company it had
acquired in 2013, for Rs.6,000 crore.

Lessons to learn for mutual funds from Amtek Auto default


There has been a minor storm brewing in the debt mutual fund space. The proximate cause
for this has been a default by Amtek Auto Ltd in redeeming the bonds issued by it. This has
raised numerous questions relating to the operations of mutual funds, the bond market, rating
agencies and so on.
Here are 10 lessons that were learnt from the Amtek episode.
Rating agencies are not infallible: We need to accept this once and for all. We have seen
this in the international context in 2008 with regards to the ratings given to subprime
mortgages. Even otherwise there have been numerous occasions where these agencies got it
wrong. Hence, their opinion can at best, be only one among many factors while deciding the
credit worthiness of a borrower.
Fund managers should diversify, especially in debt funds: The opinion on concentration
versus diversification is mixed as far as equity funds go. Indeed, you could have a situation
where the best stock idea may go up five times, while the second best idea only gives a 20%
return. However in the case of debt securities, most issuers with a similar credit risk pay
interest which is not very different from one another. In such a situation, putting too much
money with one borrower does not give any benefit but makes the fund very risky.

All debt funds are not created equal: The typical mode of selling a debt mutual fund is on
the basis of past or projected returns. However, different funds carry differing risks. One has
to go through the portfolio of the fund to understand the credit risk that the fund is running. If
you are using the services of a distributor or an adviser, ask them to evaluate the credit risk
for you. Indeed it is their duty to do so for the fees earned by them.
Immediate recognition of the problem helps: If there is a problem with certain investments
in the portfolio, the net asset value (NAV) should be marked down immediately. Delay in
recognising the problem only helps those who redeem early at the cost of the remaining unitholders.
Create a vibrant corporate bond market: Even if a fund were to identify a problem early,
currently there is no mechanism to exit the investment or to correctly value it. In order to
create a vibrant corporate bond market, one needs to increase the number of participants and
reduce the per trade lot size. Early signs of the success of this approach are visible in the taxfree bond market where a lot of high net worth individuals (HNIs), corporations, individuals
and so on are investors. We should replicate this approach with the general corporate bond
market. In the absence of a large number of investors and lower trade sizes, the market would
remain stunted.
Restricting redemptions and creating side-pockets: While it seems unfair to restrict
redemptions and create side-pockets in open-ended mutual fund schemes, it is probably even
more unfair if redemptions happen at unrealistic NAVs. In a scenario where there is no
market price for a large portion of the funds assets, people who manage to exit may leave
the residual unit holders with a fictitious NAV comprising of illiquid assets which may not
be realised anywhere close to the declared NAV. We should have a system and a code of
regulations in place whereby investors, regulators, asset management company officials,
trustees, registrars and distributors are clear as to what will be the course of action that will
be taken in case of market disruption, or when there is a run on the mutual fund, or when a
large portion of assets become illiquid, or in the case of a default. Such a code will eliminate
arbitrariness and avoid panic and also help resolve the situation at the earliest.
Amtek Autos default is not the first and will not be the last: One should not try to get
quick fixes or convey to investors that this is a one-off event. Not all money lent by banks
gets repaid. In the same way not all money lent by mutual funds will come back. The risk is
ultimately to the investors account.
There should not be any attempt to try and get someone to bail out the fund: There is a
temptation to shift troubled assets to some other pocket. Many would try to get the sponsor to
buy off the asset. It should be clearly understood that a mutual fund is a non-guaranteed
product and all the returns and risks are to the investors account.
There should not be a blanket ban on investments in lower rated papers: This would be
harmful to the development of a bond market in India. One may explore the possibility of

allowing only HNIs in debt funds investing in lower rated papers. This category of investors
is presumable well-informed and has a higher risk appetite.
Recognise that mutual funds are pass through vehicles: And temptation to have capital
adequacy kind of thinkingas in the case of banks and insurance companiesshould be
resisted. The main thing with mutual funds, is investment competence, compliance and
discipline. Having large capital and promoters with big balance sheets is no guarantee that
things will not go wrong.

New SEBI Rules


Amendments to SEBI (Mutual Funds) Regulations, 1996
These amendments relate to restrictions on investments in debt instruments issued by a single
issuer wherein the limit is reduced to 10% of NAV which may be extended to 12% of NAV
with the prior approval of the Board of Trustees and the Board of Asset Management
Company
Prudential limits in sector exposure and group exposure in debt-oriented mutual fund
schemes:
1. In order to provide investors with enhanced diversification benefits and put mutual funds
in a better position to handle adverse credit events, it has been decided to revise prudential
limits for sectoral exposure and to introduce prudential limits for group level exposure.
2. Sector exposure
a) Presently, the guidelines for sectoral exposure in debt oriented mutual fund schemes put a
limit of 30% at the sector level and an additional exposure not exceeding 10% (over and
above the limit of 30%) in financial services sector only to Housing Finance Companies
(HFCs). It has now been decided to reduce exposure limits to a single sector from the current
30% to 25% and reduce additional exposure limits provided for HFCs in finance sector from
10% to 5%.
3. Group exposure
a) Mutual Funds/AMCs shall ensure that total exposure of debt schemes of mutual funds in a
group (excluding investments in securities issued by Public Sector Units, Public Financial
Institutions and Public Sector Banks) shall not exceed 20% of the net assets of the scheme.
Such investment limit may be extended to 25% of the net assets of the scheme with the prior
approval of the Board of Trustees.
b) For this purpose, a group means a group as defined under regulation 2 (mm) of SEBI
(Mutual Funds) Regulations, 1996 (Regulations) and shall include an entity, its subsidiaries,
fellow subsidiaries, its holding company and its associates.

c) Half yearly report by Trustees 1. Trustees shall review exposure of a mutual fund, across
all its schemes, towards individual issuers, group companies and sectors. Trustee should
satisfy themselves on the levels of exposure and confirm the same to SEBI in the half yearly
trustee report starting from the half-year ending March 31, 2016.

Achievements/ recognition
Amtek Auto recently won the best investor of the year award 2008 UK Trade &
Investment.
Adjudged Best Performing VendorTechnology group Machine Parts Maruti Suzuki (1994
95)
Won Supplier of the Year Award

TVS Motors Ltd to Amtek Bhopal(200203)


Forging and Casting group from Honda Motor Cycles & Scooters India Ltd to Amtek
Bhopal (200506)
Honda Motor Cycles Scooters India Ltd (200506 & 200607) to Amtek Bhopal
Declared ET Best Emerging Company of the Year

Prestigious ET Best Emerging Company of the Year 2006 at The Economic Times
Awards For Corporate Excellence

Exhibit 1: Different Divisions of Company

Amtek Centre of Excellence (ACE)


Amtek Forging Division (AFD)
Amtek Iron Casting Division (AICD)
Amtek Aluminium Casting Division (AACD)
Amtek Automotive Machining Division (AAMD)
Amtek Ring Gear Division(ARGD)
Amtek JVS

Exhibit 2: Product Range of the Company


Amtek product portfolio consists of an extensive range of components for 23 wheelers,
Cars,Tractors, LCV, HCV and Stationary engines. The major categories of components
manufactured are,

Connecting Rod Assemblies


Flywheel Ring Gears and Assembly
Steering Knuckles
Suspension and Steering Arms
CV joints
Crankshaft Assemblies
Torque Links.

Exhibit 3: Clientele of the Company

Ashok Leyland Limited


Aston Martin
Bajaj Auto Limited
BMW
Briggs & Stratton
CNH Global
CNH New Holland
Cummins
CYT
Dana Italia
Davis Industries
Defence
Delco Machining
Eicher Motors Limited
Escorts
Fairfield
Fiat India

Ford
General Motors
GE Transportation
GWK Ltd
Hero Honda, and many more.

Exhibit 4: Milestones of the Company


2012
2011

2010
2009
2008
2007
2006

Started machining facility


Joint venture with South Korean automaker Autech Corporation to
manufacture specialized vehicles.
Amtek Autos group companyAmtek Defence Technologieshas entered
into a Joint Venture Agreement with Enertec Management.
Joint venture with Sumitomo, Japan.
Established to machining facility, Dharuhera.
Joint venture with American Rail Car, USA
Established a new manufacturing facility at Sanaswadi, Pune (India) for
Forging, Casting and Machining
Set up a new machining facility at Dharuhera (India)
MPT Magna India Ltd (India) (JV with Magna Powertrain for manufacturing
Fractured Connecting Rod Modules)

2005

Large scale Aluminum High Pressure Die Casting facility at Ranjangaon, Pune
(India)
Acquisition of Hallberg Guss Aluminium, an Aluminium Casting facility at
UK
Took over Zelter GmbH (Germany), one of the largest manufacturers of Turbo
Charger Housing in the world

2004
2003

2002

Amtek Tekfor Automotive Ltd (India) (JV with Neumayer Tekfor for
manufacturing one and two piece flex plates)
Acquired UK based Sigmacast Iron LtdSet up a Ring Gears facility Amtek
Gears Inc (USA)
Took over Letchworth (UK) based GWK Group Ltd., known for complex
machining and high level module assembly
Acquired UKs largest manufacturer of Ring Gears and Flywheels Lloyds
Brierly Hill Ltd.
Acquired Midwest Mfg, a US based ring gears manufacturer
Ahmednagar Forgings (India) was taken over
Established an Iron Casting facility at Bhiwadi (India)

2001

1999
1998
1997
1996
1993
1987

Acquisition of auto component manufacturing firm, Wesman Halverscheidt


Forgings (India)
Indsil Auto components Coimbatore (India), a fully automated foundry with
machining facilities, was taken over
Amtek Siccardi, Manesar (India) (JV with Ateliers de Siccardi for Crankshaft
manufacturing)
A new Machining unit was set up at Gurgaon (India)
Benda Amtek Ltd Gurgaon (India) (JV with Benda Kogyo Japan for Flywheel
Ring Gears manufacturing
Established a Machining unit at Gurgaon (India)
Initiation of forging operations at Gurgaon, India
Start of manufacturing at the Machining facility based at Sohna, India

Exhibit 5: Financials of Amtek

Net Sales

EPS

4,500.00

25

4,000.00

20

3,500.00

15

3,000.00
2,500.00

10

2,000.00
1,500.00

1,000.00

500.00

-5

0.00
2011

2012

2013

2014

2015

-10

2011

2012

2013

2014

2015

20

Total Debt

15

9,000.00
8,000.00

10

7,000.00
6,000.00

5,000.00
0

4,000.00

2011

3,000.00

2012

2013

2014

-5

2,000.00

Net Proft Margin

1,000.00
0.00
2011

2012

2013

2014

Return on Net worth

2015

1000
800
600
400
200
0
2011

2012

2013

2014

2015

-200

Cash Balance (in Rs. Cr.)

Reported Net Profit (in Rs. Cr.)

2015

Exhibit 6: Organisation structure