September 20, 2011
Company name:
TBK Co., Ltd.
Representative:
Hiroshi Sumitani, President
Stock exchange listing:
First Section, Tokyo Stock Exchange (Code no: 7277)
Contact:
Kenji Yamada, General Manager of General Affairs
Division and Executive Officer
Tel: +81-42-739-1471
Conversion of Joint Venture in India to a Subsidiary
TBK Co., Ltd. (the “Company”) hereby provides notice that it has increased its investment
ratio in the Indian joint venture TBK India Private Limited (hereinafter, “TBKI”) and converted
the company to a subsidiary. At the same time, TBK has decided to expand TBKI’s capital by
subscribing preferred shares.
1. Purpose
Owing to the Indian market’s high rate of growth and the country’s increasing
importance as a supply hub to Japanese, U.S. and European manufacturers, as well
as to its close proximity to ASEAN and Indian economic zones, the Company has
decided to convert TBKI to a subsidiary and position it as a key global production hub
for the TBK Group and to expand its local production. TBK will subscribe preferred
shares for TBKI to enable the subsidiary to acquire a new factory site and construct a
factory.
2. Overview of the joint venture
1) Name of
TBK India Private Limited
company
2) Location
Gat No. 309/A, Village-Shivare, Taluka-Bhor, Dist. Pune,
Maharashtra, India
3) Name of
Ujjiwal Kirloskar, Managing Director
representative,
title
4) Business
Manufacture and sale of engine water and oil pumps, with major
business partners including leading automobile and engine
manufacturers (such as Maruti Suzuki and KOEL)
5) Establishment
1998
Paid-in capital of 20 million rupees
(of which, TBK’s ownership is 49%)
6) New
100 million rupees (approx. ¥200 million)
capitalization
7) New investment
ratio
TBK Group: 80%; Lubricare Group: 20%
8) Relationship with
TBK
TBK has maintained a 49% stake since the company’s
establishment. However, on August 1, 2011, the company was
converted to a subsidiary and this stake was increased to 80%,
with TBK owning 60% and the Thai subsidiary TBKK owning
20%. The company operates under license from TBK under a
technical assistance agreement. In line with the company’s
conversion to a subsidiary, full-time personnel will be seconded
from TBK Co,Ltd. to take part in the company’s management.
9) Performance of operation and financial condition over the past three years
(no consolidated basis)
Net assets
Total assets
Net assets per share (rupees, (yen))
Net sales
Operating income
Ordinary income
Net income
Net income per share (rupees, (yen))
Dividend per share (rupees, (yen))
Millions of rupees, (Millions of yen)
Year ended
Year ended
Year ended
March 31, 2009 March 31, 2010 March 31, 2011
19
(38)
29
(58)
32
(65)
84 (167)
97 (194)
141 (282)
9
(19)
15
(29)
16
(33)
125 (250)
146 (293)
222 (444)
2
(4)
2
(4)
-4
(-8)
-2
(-4)
-3
(-6)
-9
(-18)
-1
(-2)
-2
(-4)
-9
(-18)
-1
(-2)
-1
(-2)
-4
(-8)
0
0
0
0
0
0
3. Overview of joint venture partner
1) Name
Lubricare Private Limited
2) Location
Gat No. 309, Shivale, Bhor, Pune 412206, India
3) Name of
Madhav Kirloskar, Managing Director
representative ,
title
4) Business
Manufacture of water and oil pumps for diesel engines
5) Capital
5 million rupees
6) Establishment
1975
7) Net assets
52 million rupees
8) Total assets
76 million rupees
9) Principal
Representative’s family (100%)
shareholders and
investment ratio
10) Relationship
TBK has no particular relationship with the said company that
with TBK
deserves mention. Furthermore, neither people nor companies
affiliated with TBK have any relationship of particular note with
people or companies affiliated with said company.
4. Construction of new factory
1) Location
Satara District, Maharashtra, India (located approximately 70 km
south of Pune along the expressway linking Mumbai and
Bangalore)
2) Target
March 2012
completion date
3) Total construction 500 million rupees (approx. ¥1 billion)
cost
5. Issuance of preferred shares
At a meeting on September 19, 2011, TBK’s Board of Directors resolved to subscribe
preferred shares (10 million shares) for TBKI in the amount of 180 million rupees
(approximately ¥360 million) to strengthen the subsidiary’s financial base and enable it
to construct a new factory. By increasing TBKI’s capital through a share allotment,
subscribing preferred shares and subscribung its corporate bond, the TBK Group
expects to inject approximately ¥1.2 billion in funding.
6. Forecast
TBKI is expected to generate net sales equivalent to approximately ¥800 million during
the fiscal year ending March 31, 2012. TBK Group expects to acquire new commercial
Rights for production of the new factory sequentially.
7. Liquidation of affiliated company in Europe
Effective December 31, 2011, TBK will liquidate its holdings of GSB–TBK Automotive
Components, S.L. (Spain), an affiliated company established in June 2002 in which
TBK has a 25% stake. As part of the liquidation proceedings, TBK will sell all the shares
it holds in the affiliate. Furthermore, TBK hereby provides notice that it plans to transfer
some of the commercial rights and equipment currently held by the affiliated company
to the subsidiary in India.