MIRA
INFORM REPORT
|
Report Date : |
12.02.2007 |
IDENTIFICATION
DETAILS
|
Name : |
BHARAT
FORGE LIMITED |
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Registered Office : |
Mundhwa, Pune Cantonment, Pune –
411 036, Maharashtra, INDIA |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
19.06.1961 |
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Com. Reg. No.: |
11-12046 |
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CIN No.: [Company
Identification No.] |
L25209PN1961PLC012046 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
PNEB0272E |
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Legal Form : |
A public limited liability company. The company’s shares are
listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing and Sale of Steel Forgings, Finished Machined
Crankshafts, Couplings, Front Axle Assembly & Components. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD
46500000 |
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Status : |
Good |
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
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Comments : |
Subject
is a well-established and reputed company having fine track. The company is
progressing well. Directors are reported as experienced and respectable
businessmen. Trade relations are
reported as fair. Business is active. Payments are usually correct and as per
commitments. Fundamentals
are strong and healthy. The
company can be considered normal for business dealings at usual trade terms
and conditions. The
company can be regarded as a promising business partner in a medium to
long-run. |
LOCATIONS
|
Registered Office : |
Mundhwa, Pune Cantonment, Pune –
411 036, Maharashtra, INDIA |
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Tel. No.: |
91 - 20 – 26702777 / 26702476 / 26702440 |
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Fax No.: |
91 - 20 – 26822163 / 26822387 / 26820699 |
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E-Mail : |
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Website : |
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Factory
1 : |
Mundhwa, Pune Cantonment, Pune - 411 036, Maharashtra |
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Factory
2 : |
Gat No. 635, Kuruli Village, Chakan, District Pune – 410 501,
Maharashtra |
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Factory
3 : |
Opposite Jarandeshwar Railway Station, Vadhuth, District Satara
– 415 011, Maharashtra |
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Factory
4 : |
Kusumbe, Jalgaon-Ajantha Road, Jalgaon – 425 003, Maharashtra |
DIRECTORS
|
Name : |
Mr. B. N. Kalyani |
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Designation : |
Chairman & Managing Director |
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Qualification : |
B.E. (Mech.) (Hons.), M.S.
(M.I.T.) |
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Date of Appointment : |
1st April, 1972 |
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Name
: |
Mr. P. H. Ravikumar |
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Designation
: |
ICICI Nominee Director |
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Name
: |
Mr. S. S. Marathe |
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Designation
: |
Director |
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Name
: |
Mr. S. M. Thakore |
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Designation
: |
Director |
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Name
: |
Mr. S. D. Kulkarni |
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Designation
: |
Director |
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Name
: |
Mr. Pratap Bhogilal |
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Designation
: |
Director |
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Name
: |
Mr.
Anil Rege |
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Designation
: |
Director
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Name
: |
Prof.
Dr. Uwe Loos |
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Designation
: |
Director
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KEY EXECUTIVES
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Name
: |
Mr. P. C. Bhalerao |
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Designation
: |
Executive Director |
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Qualification
: |
B.E. (Elect.), M.B.A., D.T.M. |
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Date
of Appointment : |
3rd March, 1987 |
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Previous
Employment : |
Bharat Steel Tubes Limited,
Delhi – Dy. General Manager |
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Name
: |
Mr. G. K. Agarwal |
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Designation
: |
Deputy
Managing Director |
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Qualification
: |
B.E. (Mech.), M.B.A. |
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Date
of Appointment : |
1st November, 1976 |
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Previous
Employment : |
Guest Keen Williams Limited,
Howrah, West Bengal |
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Name
: |
Mr. Amit B. Kalyani |
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Designation
: |
Executive Director |
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Name
: |
Mr. B. P. Kalyani |
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Designation
: |
Executive Director |
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Name
: |
Mr. S. E. Tandale |
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Designation
: |
Executive Director |
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Name
: |
Mr. P. K. Maheshwari |
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Designation
: |
Executive Director |
MAJOR SHAREHOLDERS
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Promoters |
79,480,292 |
35.76 % |
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Financial
Institutions |
5,563,327 |
2.50 % |
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Mutual Funds |
6,654,171 |
2.99 % |
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Insurance
Companies |
11,023,630 |
4.96 % |
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Nationalised Banks |
110,475 |
0.05 % |
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Foreign
Institutional Investors |
48,897, 104 |
22.00 % |
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Bodies Corporate |
25,308,801 |
11.39 % |
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Non Resident
Indians |
1,010,402 |
0.45 % |
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Foreign Banks |
22,125 |
0.01 % |
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Foreign Corporate
Bodies |
4,402,067 |
1.98 % |
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Indian Public |
39,790,267 |
17.91 % |
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Total |
222,262,661 |
100.00 % |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and Sale of Steel Forgings, Finished Machined
Crankshafts, Couplings, Front Axle Assembly & Components. |
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Products : |
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Exports to : |
Argentina, Bangladesh, Germany, Iran, Mexico, Sri Lanka, UK and
USA |
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Imports from : |
China, Sweden, Mexico, France, Germany, Italy, Japan, Korea, The
Netherlands, UK and USA |
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Terms : |
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Purchasing : |
L/C, D/A & D/P terms |
PRODUCTION
STATUS
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Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
Steel Forging
|
MT |
240000 |
200000 |
136790 |
|
Finished Machined Crankshaft |
Nos. |
600000 |
295000 |
277846 |
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Couplings |
MT |
600 |
600 |
-- |
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Front Axle Assembly &
Components |
Nos. |
600000 |
458400 |
353015 |
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Well Head Assembly and Parts |
Nos. |
5000 |
-- |
-- |
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Aluminium Road Wheel |
Nos. |
4000 |
4000 |
3102 |
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General Engineering Equipments |
MT |
1100 |
1100 |
23 |
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Material Handling Equipments |
Nos. |
1350 |
1350 |
-- |
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Hydraulic & Mechanical
Presses |
Nos. |
250 |
50 |
-- |
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Bandshaw Machines for cutting
Metallic Round & Square Bars |
Nos. |
50 |
50 |
2 |
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Front Axle Assembly at Dharwad |
Nos. |
50000 |
-- |
-- |
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Finished Machined Crankshaft
(Chakan) |
Nos. |
180000 |
168000 |
165272 |
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Front Axle Assembly and
Components at Chakan |
Nos. |
300000 |
219600 |
149028 |
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Transmission Parts |
Nos. |
3000000 |
2000000 |
1751426 |
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Seal Rings, Clamps and
Hubs |
Nos. |
50000 |
7000 |
7108 |
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Rocker Arm Assembly |
Nos. |
100000 |
-- |
-- |
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Bonnets and Key Shaft |
Nos. |
50000 |
-- |
-- |
v
Annual Capacity on maximum utilisation basis.
v
Under Registration with Government Authority.
v
Since the Company's installed capacity is dependent on Product mix,
which in turn is decided on the basis of actual demand for various products
from time to time, it is not feasible for the Company to give exact installed
capacity. The Company ha, however, indicated installed capacity on the basis of
year's Product mix, as certified by the Chairman and Managing Director and
being a technical matter accepted by the Auditors as correct.
v
Includes captive consumption 58 270 M.T. (2004-05 - 46 1 86 M.T.).
v
Includes captive consumption Band Saws 2 Nos ( 2004-05 - 5 Nos.)
v
The Company has applied for enhancement in the Licensed capacity from
200,000 M.T. to 240,000 M.T.
v
The Company has applied for enhancement in the Licensed capacity from
400,000 M.T. to 600,000 M.T.
v
The Company has applied for enhancement in the Licensed capacity from
300,000 M.T. to 600,000 M.T.
GENERAL
INFORMATION
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Customers : |
v
Meritor Automotive, USA v
Dana Corporation, USA v
Mercedes Benz, Germany v
New Holland Ford, Europe v
Mitsubishi Motor Corporation, Japan v
Volvo Trucks, Sweden v
Lister-Petter, Europe v
Dirona, Mexico v
Isuzu, Japan v
Macimex, Mexico v
Kirloskar Group v
Bajaj Auto Limited v
Maruti Udyog Limited v
Premier Automobiles Limited v
Eicher India Limited v
Larsen & Toubro Limited v
Daewoo Motors v
Simpsons Engines v
Hindustan Earthmoving Equipment v
Tata Engineering & Locomotive Company Limited v
Mahindra & Mahindra Limited v
Ashok Leyland Limited v
Bharat Earth Movers Limited v
Greaves Limited v
Swaraj Mazda v
Escorts Limited |
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No. of Employees : |
2,521 |
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Bankers : |
v
Bank of India v
ANZ Grindlays Bank PLC, Vereinigtes Konigreich v
Bank of Maharashtra, “Lokmangal”, 1501 Shivajinagar (Head
Office), Pune – 411 005, Maharashtra, India v
Bank of Baroda v
Canara Bank v
State Bank of India v
HDFC Bank Limited v
ICICI Bank Limited v
Citibank N A v
Standard Chartered Bank v
ABN AMRO Bank NV v
UTI Bank Limited |
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Facilities : |
[figures are in Rupees
Millions]
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Banking Relations : |
Satisfactory
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Auditors : |
Dalal & Shah Chartered Accountants |
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Associates : |
v
Kalyani Carpenter Special Steels Limited |
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Subsidiaries : |
v
CDP Bharat Forge GmbH v
Bharat Forge Beteiligungs GmbH v
Bharat Forge America Inc v
Bharat Forge Holding GmbH v
Bharat Forge Aluminiumtechnik GmbH & Company KG v
Bharat Forge Aluminiumtechnik Verwaltungs GmbH v
Bharat Forge Hong Kong Limited v
Bharat Forge Kilsta AB v
Bharat Forge Scottish Stampings Limited |
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Membership : |
v
Confederation of Indian Industry |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
300000000 |
Equity Shares |
Rs.2/- each |
Rs. 600.000 Millions |
|
43000000 |
Cumulative Preference Shares |
Rs.10/ |
Rs. 430.000 Millions |
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2000000 |
Unclassified Shares |
Rs.10/ |
Rs. 20.000 Millions |
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Total |
|
Rs. 1050.000
Millions |
Issued :
|
No.
of Shares |
Type |
Value |
Amount |
|
10000000 |
8.25% Redeemable Cumulative
Non-Convertible Preference Shares |
Rs.10/- each |
Rs. 100.000 Millions |
|
222439011 |
Equity Shares |
Rs.2/- each |
Rs. 444.880 Millions |
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Total |
|
Rs. 544.880
Millions |
Subscribed
& Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
10000000 |
8.25% Redeemable Cumulative
Non-Convertible Preference Shares |
Rs.10/- each |
Rs. 100.000 Millions |
|
222262661 |
Equity Shares |
Rs.2/- each |
Rs. 444.530 Millions |
|
172840 |
Forfeited Shares |
|
Rs. 0.090 Millions |
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Total |
|
Rs. 544.620
Millions |
Notes: Of the above
Shares
On July 27,2005, as
per the approval of the Members of the Company on 30th March, 2005, each Equity
share of Rs.10/- each was subdivided into five Equity shares of Rs. 2/- each,
hence all related references for the Previous year in the above schedule have
been restated for the sake of comparability.
Prior to Sub
division of Share Capital:
47 600 Equity Shares
of Rs.10/- each are issued as fully paid up for consideration other than cash,
pursuant to a contract.
8 682 500 Equity
Shares of Rs.10/- each are issued as fully paid Bonus Shares byway of capitalisation
of Share Premium Account and Reserves.
1 568600 Equity
Shares of Rs.10/-each are issued at a premium of Rs.186.93 per share, under
Senior Executives Stock Cum Share Option Scheme.
1 883 382 Equity
shares of Rs.10/-each were issued at a premium of Rs.550/-per share on
"Rights" basis on 1st October, 2004, with 941 691 detachable warrants
to be converted into Equity Shares of Rs. 10/- each.
The Company has
issued 3 636 500 Equity Shares of Rs.10/- each (later sub-divided into 18182
500 Equity Shares of Rs.2/- each) in April and May 2005 represented by 3 636
500 Global Depository Receipts (GDR) ( on sub division 18 182 500 GDRs)
evidencing "Master GDR Certificates" at a price of USD 27.50 per GDR
(including premium). GDRs outstanding at the close of the year are 975 950.The
said money after incurring issue expenses, aggregating Rs.4 235 million have
been temporarily deployed by Investments in Debt oriented Mutal Funds to the
extent of Rs.2 271 million and the balance amounting to Rs.1 964 million is
held in Fixed Deposits with Banks.
Simultaneous to the
GDR issue, the Company has also issued 0.50% Convertible Bonds in Two Tranches
(viz.1 & 2) amounting to USD 60 000000 each, denomiated into Bonds of face
value of USD 1 OOO/- each, optionally convertible at an initial price of Rs.1
680.52 and Rs.1 920.60 per share respectively. As the initial price is subject
to adjustments specified in the offering circular and inability to assess the
proportion of conversion, no amounts have been shown under issued Equity Share
Capital, in respect of Equity shares deemed to be issued on exercise of
conversion by bondholders.
Subsequent to
Sub-division of the Equity Share Capital :
The detachable
warrants referred in B (iv) above, were during the year, called upon by the
Company, by exercise of an entitlement to a "one – time call option’ to
subscribe and bealloted five Equity Shares of Rs.2/- each (adjusted for
subdivision of Equity Share Capital, as discussed in Note A above) at a price
determined at 15% discount to the average preceding three months closing price
i.e. Rs.268.20 (i.e. at a premium of Rs.266.20 per Equity Share). Consequently
4 574 205 Equity Shares of Rs.2/- each represented by 914 841 warrants were
subscribed for and alloted on 12th December, 2005.The said funds
have been temporarily deployed to finance working capital to the extent of Rs.1
027 million and the balance in Investment in Mutual Funds.
After keeping in
abeyance the issue of 2 340 Equity Shares of Rs.2/- each and corresponding 234
warrants (entitled to 1 170 Equity Shares of Rs.2/- each) pending adjudication
of title to the pre-rights holding, the balance 26 616 un-exercised warrants
have lapsed as also the deemed issue of associated Equity Shares.
On March 17,2006,1
753 246 Equity Shares of Rs.2/- each were issued and alloted at a premium of
Rs. 334.105 per share on Conversion of USD 13 500 000, 0.50% Foreign Currency
Convertible Bonds (FCCB) Tranche-1 in terms of Offering Circular dated 15th
April, 2005.
9.50% Redeemable
Cumulative Non Convertible Preference Shares of Rs.10/-each were redeemed on
due date during the year, 8.25% Redeemable Cumulative Non Convertible
Preference Shares of Rs.10/- each are to be redeemed in cash on 10th February,
2008.
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
544.620 |
595.600 |
676.770 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
11096.680 |
3829.990 |
1835.558 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
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NETWORTH |
11641.300 |
4425.590 |
2512.328 |
|
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LOAN FUNDS |
|
|
|
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|
1] Secured Loans |
3816.020 |
3832.060 |
2190.525 |
|
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2] Unsecured Loans |
6108.610 |
346.680 |
665.155 |
|
|
TOTAL BORROWING |
9924.630 |
4178.740 |
2855.680 |
|
|
DEFERRED TAX LIABILITIES |
966.560 |
811.680 |
850.189 |
|
|
|
|
|
|
|
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TOTAL |
22532.490 |
9416.010 |
6218.197 |
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APPLICATION OF FUNDS |
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|
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|
|
|
|
|
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FIXED ASSETS [Net Block] |
7744.110 |
5264.160 |
4511.824 |
|
|
Capital work-in-progress |
3707.040 |
2758.960 |
877.084 |
|
|
|
|
|
|
|
|
INVESTMENT |
4440.180 |
383.470 |
343.765 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
44.656 |
|
|
Technical Know-now |
8.340 |
10.420 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2542.660
|
1860.830 |
1331.334 |
|
|
Sundry Debtors |
1885.540
|
1430.600 |
1001.392 |
|
|
Cash & Bank Balances |
5054.120
|
281.270 |
86.038 |
|
|
Other Current Assets |
913.060
|
664.440 |
443.189 |
|
|
Loans & Advances |
4957.090
|
3610.720 |
2366.280 |
|
Total Current Assets |
15352.470
|
7847.860 |
5228.233 |
|
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
5114.920
|
4318.230 |
3380.814 |
|
|
Provisions |
3617.260
|
2573.650 |
1487.832 |
|
Total Current Liabilities |
8732.180
|
6891.880 |
4868.646 |
|
|
Net Current Assets |
6620.290
|
955.980 |
359.587 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
12.530 |
43.020 |
81.281 |
|
|
|
|
|
|
|
|
TOTAL |
22532.490 |
9416.010 |
6218.197 |
|
PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other income] |
16310.440 |
12264.650 |
8511.389 |
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
3148.930 |
2480.790 |
1811.647 |
|
Provision
for Taxation |
1079.280 |
864.490 |
562.581 |
|
Profit/(Loss)
After Tax |
2069.650 |
1616.300 |
1249.066 |
|
|
|
|
|
|
Export
Value |
7187.510 |
5348.650 |
3495.265 |
|
|
|
|
|
|
Import
Value |
2822.700 |
1398.120 |
528.570 |
|
|
|
|
|
|
Total
Expenditure |
13161.510 |
9783.860 |
6699.742 |
QUARTERLY
RESULTS
|
PARTICULARS |
30.06.2006 [1st Quarter] |
30.09.2006 [2nd Quarter] |
31.12.2006 [3rd Quarter] |
|
Sales
Turnover |
4205.700 |
4506.800 |
4771.200 |
|
Other
Income |
232.500 |
192.100 |
162.000 |
|
Total
Income |
4438.200 |
4698.900 |
4933.200 |
|
Total
Expenditure |
3233.200 |
3330.300 |
3532.200 |
|
Operating
Profit |
1205.000 |
1368.600 |
1401.000 |
|
Interest |
175.700 |
196.600 |
215.400 |
|
Gross
Profit |
1029.300 |
1172.000 |
1185.600 |
|
Depreciation |
228.900 |
249.600 |
252.600 |
|
Tax |
246.600 |
310.600 |
281.000 |
|
Reported
PAT |
515.100 |
621.800 |
629.700 |
Notes
200606 Quarter 1 –
Gross Sales includes Domestic Rs 2855.33 million F.O.B. Value of
Exports & Corresponding Income Rs 1700.83 million Expenditure Includes
(Increase) / Decrease in Stock in Trade Rs 7.55 million Consumption of Raw
Materials Rs 1856.87 million Manufacturing Expenses Rs 723.17 million Staff
Cost Rs 242.26 million Other Expenditure Rs 358.60 million Tax Includes
Provision for Current Tax Rs 241.60 million Deferred Tax Rs 38.68 million
Fringe Benefit Tax Rs 5.00 million EPS is Basic Status of Investor Complaints
for the quarter ended June 30, 2006 Complaints Pending at the beginning of the
quarter Nil Complaints Received during the quarter 01 Complaints disposed off
during the quarter 01 Complaints unresolved at the end of the quarter Nil 1.
Previous year / periods figures are regrouped / restated wherever necessary to
make them comparable with those of the current period. 2. The above results
were reviewed by the Audit Committee, taken on record by the Board of Directors
of the Company at its meeting held on July 28, 2006 and subjected to a Limited
Review by the Auditors. 3. The Company has incurred an expenditure of Rs
6406.09 million upto June 30, 2006 towards its ongoing Forging & Machining
Capacity expansion program. 4.(a) Company had issued 0.5% Foreign Currency
Convertible Bonds(FCCB) due 2010 in two Trenches (Tranche 1 & 2), each
having varied rights and obligations, aggregating US $ 60 million each,
convertible at an initial price of Rs 336.11 and Rs 384.12 per share of Rs 2/-
each respectively subject to adjustments specified in the offering circular
dated April 15, 2005. In view of the current market price of the Company's
equity shares being less than the Floor price for exercise, in respect of both
the Tranches of the Bonds, the option embedded in the said Bonds to subscribe
to Equity shares is at present, antidilutive. (b) During the quarter, the
Company has further issued Zero Coupon Foreign Currency Convertible Bonds(FCCB)
in two tranches (Viz. Tranche A and Tranche B) amounting to USD 40.00 million
and USD 39.90 million due 2012 and 2013 respectively each having varied rights
and obligations and optionally convertible at an initial price of Rs 604.33 and
Rs 690.32 per share of Rs 2/- each respectively subject to adjustment specified
in the offering circular dated April 24, 2006. Since the current market price
of the Company's Equity shares being less than the Floor price in respect to
both the Tranches of the Bonds, the option embedded in the said Bonds to
subscribe the Equity Shares is, at present, antidilutive. pending utilisation,
the funds have been temporarily deployed in investments which together with
funds out of GDR and Warrants issue, have generated other income aggregating Rs
145.24 million during the quarter. 5. During the quarter, the Company has
written off export incentives of Rs 44.78 million net of tax saving that had accrued
and was accounted during the last year, due to reduction of incentive under
Target Plus Scheme announced by Government of India in the current quarter with
retrospective effect. 6. The Company's Joint Venture Operations in China
through a 52% holding in the Equity of FAW Bharat Forge (Changchun) Co Limited
commenced its operations during the quarter.
200609 Quarter 2 –
Gross Sales includes Domestic Rs 3019.69 million F.O.B. Value of
Exports & Corresponding Income Rs 1847.25 million Expenditure Includes
(Increase) / Decrease in Stock in Trade Rs (93.22) million Consumption of Raw
Materials Rs 2031.15 million Manufacturing Expenses Rs 812.89 million Staff
Cost Rs 276.39 million Other Expenditure Rs 303.07 million Tax Includes
Provision for Current Tax Rs 306.37 million Deferred Tax Rs (9.96) million
Fringe Benefit Tax Rs 4.20 million EPS is Basic Status of Investor Complaints
for the quarter ended September 30, 2006 Complaints Pending at the beginning of
the quarter Nil Complaints Received during the quarter Nil Complaints disposed
off during the quarter Nil Complaints unresolved at the end of the quarter Nil
Aggregate of non-promoters shareholding indicates Aggregate of public
shareholding. 1. Previous year / periods figures are regrouped / restated wherever
necessary to make them comparable with those of the current period. 2. The
above results were reviewed by the Audit Committee, taken on record by the
Board of Directors of the Company at its meeting held on October 17, 2006 and
subjected to a Limited Review by the Auditors. 3. The Company has incurred an
expenditure of Rs 6690.89 million upto September 30, 2006 towards its ongoing
Forging & Machining Capacity expansion program. 4.(a) Company had issued
0.5% Foreign Currency Convertible Bonds(FCCB) due 2010 in two Tranches (Tranche
1 & 2), each having varied rights and obligations, aggregating US $ 60
million each, convertible at an initial price of Rs 336.11 and Rs 384.12 per
share of Rs 2/- each respectively subject to adjustments specified in the offering
circular dated April 15, 2005. In view of the current market price of the
Company's equity shares being less than the Floor price for exercise, in
respect of tranch 2 of the Bonds, the option embedded in the said Tranche 2
Bonds to subscribe to Equity shares is at present, antidilutive. (b) During the
year, the Company has further issued Zero Coupon Foreign Currency Convertible
Bonds(FCCB) in two tranches (Viz. Tranche A and Tranche B) amounting to USD
40.00 million and USD 39.90 million due 2012 and 2013 respectively each having
varied rights and obligations and optionally convertible at an initial price of
Rs 604.33 and Rs 690.32 per share of Rs 2/- each respectively subject to
adjustment specified in the offering circular dated April 24, 2006. Since the
current market price of the Company's Equity shares being less than the Floor
price in respect of both the Tranches of the Bonds, the option embedded in the
said Bonds to subscribe the Equity Shares is, at present, antidilutive. pending
utilisation, the funds have been temporarily deployed in investments which
together with funds out of GDR and Warrants issue, have generated other income
aggregating Rs 186.19 million during the quarter and Rs 331.43 million year to
date. 5. During the last quarter, the Company had written off export incentives
of Rs 44.78 million net of tax saving that had accrued and was accounted during
the last year, due to reduction of incentive under Target Plus Scheme announced
by Government of India in the current year with retrospective effect.
200612 Quarter 3 –
Gross Sales includes Domestic Rs 3196.70 million F.O.B. Value of
Exports & Corresponding Income Rs 1958.25 million Expenditure Includes
(Increase) / Decrease in Stock in Trade Rs (80.41) million Consumption of Raw
Materials Rs 2255.43 million Manufacturing Expenses Rs 837.76 million Staff
Cost Rs 277.92 million Other Expenditure Rs 241.51 million Tax Includes
Provision for Current Tax Rs 276.28 million Deferred Tax Rs 22.32 million
Fringe Benefit Tax Rs 4.70 million EPS is Basic Status of Investor Complaints
for the quarter ended December 31, 2006 Complaints Pending at the beginning of
the quarter Nil Complaints Received during the quarter 02 Complaints disposed
off during the quarter 02 Complaints unresolved at the end of the quarter Nil
1. Previous year / periods figures are regrouped / restated wherever necessary
to make them comparable with those of the current period. 2. The above results
were reviewed by the Audit Committee, taken on record by the Board of Directors
of the Company at its meeting held on January 20, 2007 and were subjected to a
Limited Review by the Auditors. 3. The Company has incurred an expenditure of
Rs 6878.90 Million upto December 31, 2006 towards its ongoing Forging &
Machining Capacity expansion program. 4(a) Company had issued 0.5% Foreign
Currency Convertible Bonds (FCCB) due 2010 in two Trenches (Tranche 1 & 2),
each having varied rights and obligations aggregating US $ 60 million each,
convertible at an initial price of Rs 336.11 and Rs 384.12 per share of Rs 2/-
each respectively subject to adjustments specified in the offering circular
dated April 15, 2005. In view of the current market price of the Company's
equity Shares being less than the Floor price for exercise, in respect of tranche
2 of the Bonds, the option embedded in the said Tranche 2 Bonds to subscribe to
Equity shares is, at present, antidilutive. (b) During the year, the Company
has further issued Zero Coupon Foreign Currency Convertible Bonds (FCCB) in two
tranches (viz. Tranche A and Tranche B) amounting to USD 40.00 million and USD
39.90 million due 2012 and 2013 respectively each having varied rights and
obligations and optionally convertible at an Initial price of Rs 604.33 and Rs
690.32 per share of Rs 2/- each respectively subject to adjustment specified in
the offering circular dated April 24, 2006. Since the current market price of
the Company's Equity Shares being less than the Floor price in respect of both
the Tranches of the Bonds, the option embedded in the said Bonds to subscribe
to Equity Shares is, at present, antidilutive. Pending utilisation, the funds
have been temporarily deployed in investments which together with funds out of
GDR and Warrants issue, have generated other income aggregating Rs 176.50 million
during the quarter and Rs 507.93 Million year to date. (Previous year Rs 98.06
million and Rs 272.55 million respectively) 5. During the first quarter, the
Company had written off export incentives of Rs 44.78 million (net of tax
saving) that had accrued and was accounted during the last year, due to
reduction of incentive under Target Plus Scheme announced by Government of
India in the current year with retrospective effect.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity
Ratio |
0.88 |
1.01 |
1.44 |
|
Long
Term Debt-Equity Ratio |
0.63 |
0.76 |
1.34 |
|
Current
Ratio |
1.09 |
0.86 |
0.93 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.49 |
1.42 |
1.09 |
|
Inventory |
7.50 |
7.89 |
6.68 |
|
Debtors |
9.96 |
10.35 |
9.56 |
|
Interest
Cover Ratio |
6.74 |
8.39 |
6.59 |
|
Operating
Profit Margin(%) |
26.78 |
26.54 |
29.89 |
|
Profit
Before Interest And Tax Margin(%) |
22.36 |
22.36 |
24.61 |
|
Cash
Profit Margin(%) |
16.96 |
17.02 |
19.69 |
|
Adjusted
Net Profit Margin(%) |
12.53 |
12.84 |
14.41 |
|
Return
On Capital Employed(%) |
24.52 |
40.65 |
42.15 |
|
Return
On Net Worth(%) |
26.11 |
49.53 |
67.25 |
STOCK PRICES
|
Face
Value |
Rs.10.00/- |
|
High |
Rs.352.90/- |
|
Low |
Rs.247.00/- |
LOCAL AGENCY
FURTHER INFORMATION
History
It was originally incorporated under the name and style of Bharat
Forge Company Limited, which was subsequently changed to the present.
Bharat Forge Limited (BFL) a part of the Kalyani group is the
largest Forging Company in India. The company emerged as world's second largest
forging company with the acquisition of Carl Dan Peddinghus GmbH(CDP) of
Germany in Nov 21, 2003.
BFL promoted by Neelkanth A Kalyani was incorporated in Jun.'1961. The company
has a fully integrated facility with capabilities in design & engineering,
die & tool making, forging a wide range of products, machining and testing
& validation. It is the only company having this capability for a complete
range of engine & chassis components. Being a leader in steel forging it
has diversified presence in other areas such as finished machined crankshafts,
component assembly, sub-assembly of industrial machinery, etc. In Feb.'1994,
the company came out with a rights issue to part-finance the connecting rod
project, to expand financial services division and to augment long-term
resources, totalling Rs 64.29 cr.
BFL has technical tie-ups with Tokoyo Drop Forge, Japan, for the closed die
forging units; and with Judisha Buhin Kogyo, Japan, for a machine component
unit. It has a technical collaboration with Lemmerz-Werke, Germany, to
manufacture wheel rims for heavy and light commercial vehicles. The company has
been accredited with the ISO 9002 quality certificate.
The company has joint venture with Metalart Corporation, Japan and Nissho Iwai
Corporation, Japan for the manufacture of precision forgings. The company has
tied up with Cranfield University, UK, the foremost post-graduate centre of
Europe, to form Kalyani Cranfield Manufacturing Management Centre, for
technology, professional development and applied research. The centre was set
up at Pune.
In 1998-99, the company recalled the Forge expansion project for additional
capacity of 38,000 tpa at Mundhwa, Pune which was deferred for one year. It has
also set up facilities for generating 2 MW Wind Power at a cost of Rs 124.300
Millions, at Thoseghar in Satara Dist.
In 1999-2000, BFL has successfully implemented modules of SAP R/3 Enterprise
Resource Planning (ERP) package. It has introduced new computer aided
engineering (CAE) based metal flow simulation techniques which is an important
guide to die designers to achieve 'first time right' for new product development.
The scheme of arrangement between the company and BF Utilites (BFUL) has been
approved. Under this scheme the Investment and Wind Mill division have been
demerged and transfered to BFUL from Mar.'01.
During January,2002 the company entered into an agreement with Dana Corporation
Spicer Europe Limited for supply of forgings. Under this agreement Bharat Forge
will supply Dana with certain forgings used by its Kirkstall axle operations
and its commercial vehicle axle operations in North America. To supply
transmission components for their global operations the company entered into a
contract with Toyota.
The company has acquired CDP Aluminiumtechnik Gmbh during december 2004. CDPAT
belongs to the renowned CDP group and is a significant player in Europe in the
area of aluminium forged components used in passenger cars and other automotive
applicaitons and name of the company has been changed to Bharat Forge
Aluminiumtechnik. Further Bharat Forge America Inc., Delaware, USA has become a
subsidiary of the company with effect from 16th May 2005.
During July 2004 the company came out with rights issue of equity shares for
its shareholders in the ratio of 1:20 with a premium of Rs.550/- per share with
attached warrants on the basis of one warrant for every two rights equity
shares and in July 2005 the company has sub-divided its equity share face value
from Rs.10/- per share to Rs.2/- per share.
During 2004-05 the company has increased its installed capacity of Steel
Forging and Front Axle Assembly & Components at Chakan by 27,034 MT and
1,03,600 Nos. respectively. With this expansion the total installed capacity of
Steel Forging and Front Axle Assembly & Components at Chakan has increased
to 1,30,000 MT and 1,77,600 Nos. respectively. Further the company has
installed a capacity for the manufacture of 4,13,000 Nos. of finish machined
Crankshafts at Mundhwa.
In 2005-06, the company continued to strengthen its position by
making further acquisitions and the following acquisitions have been made by
the company: Through its wholly owned subsidiary, Bharat Forge Beteiligungs
GmbH, Germany, the company, on September 21, 2005, acquired Imatra Kilsta AB,
Sweden along with its wholly owned subsidiary, Scottish Stampings Limited,
Scotland (together called Imatra Forging Group), which are now renamed as
Bharat Forge Kilsta AB (BF Kilsta) and Bharat Forge Scottish Stampings Limited,
respectively. BF Kilsta is the leader in the manufacturing of heavy-duty diesel
engine crankshaft for the European and Scandinavian truck markets.
On December 8, 2005, the company, through its wholly owned subsidiaries, Bharat
Forge Beteiligungs GmbH and Bharat Forge Hong Kong Limited, concluded a Joint
Venture agreement with FAW corporation of China (FAW). The subsidiaries own 52%
stake in the JV and the balance 48% is held by FAW. The JV company, set up
under the name and style of FAW Bharat Forge (Changchum) Co. Limited, has
commenced operations from 6th April 2006.
The company has increased its installed capacity of Steel Forging, Finished
Machined Crankshaft and Front Axle Assembly & Components by 70,000 MT,
50,000 Nos. and 2,00,400 Nos. during the year 2005-06. With this expansion the
total installed capacity of Steel Forging, Finished Machined Crankshaft and
Front Axle Assembly & Components increased to 2,00,000 MT, 4,63,000 Nos.
and 6,78,000 Nos. respectively.
Business
The company is engaged in manufacturing and sale of Steel
Forgings, Finished Machined Crankshafts, Couplings, Front Axle Assembly &
Components, General Engineering Equipments, Material Handling Equipments,
Hydraulic & Mechanical Presses, Wheel Rims for Heavy & Light Commercial
Vehicles, Bandsaw Machines for cutting metallic round & square bars,
Finished Machined Crankshafts (Chakan), Aluminium Road Wheel and Seamless
Tubes.
The company has technical collaboration with Rockwell
International Corporation, Troy, NY, U.S.A., Meritor, Japan and Metalart
Corporation, Japan.
The company has been accredited with ISO 9002 and QS 9000
Certifications.
The company’s fixed assets of important value includes freehold
land, leasehold land, buildings, plant & machinery, railway sidings,
electrical installations, factory equipments, engineering instruments,
furniture & fittings, office equipments, vehicles & aircrafts, plant &
machinery on lease, motor cars & vehicles on lease, computers on lease and
power line.
MANAGEMENT DISCUSSION AND ANALYSIS
Overview
2005-06 was a significant year in Bharat Forge's ('BFL 'or' the company')
journey towards global leadership where BFL achieved substantial progress in
respect of its strategic objectives. These included establishing global dual
shore manufacturing presence, deepening & qualitatively enhancing the
relationship with the key global customers, building up global technology capability
and manufacturing scale & capabilities to meet large & diverse customer
requirements. BFL today has a global capacity which is the largest in the
world.
During 2005-06, the company remained steadfast in its pursuit of these goals
and achieved several breakthroughs.
In the last few years, BFL has made considerable inroads with the leading
global customers. 2005-06 saw the company take major strides in its global
manufacturing strategy. Through a series of acquisitions and investments,
Bharat Forge now has nine production facilities in six countries spread over
four major geographies - Europe, North America, China and India. Today, with
its globally diverse, flexible manufacturing facilities, the company caters to
over 35 OEMs and Tier-1 companies across the world with a wide portfolio of
products. And that is showing up in the company's results.
On a consolidated basis, the financial highlights of BFL for 2005-06 are:
* Net Sales and operating income was Rs.30,189 million in 2005-06 up by 51 per
cent over the previous year.
* Operating profits (EBITDA) was Rs.5,889 million in 2005-06 - a growth of 37
per cent over the previous year.
* Profit after Tax (PAT) was Rs.2,505 in 2005-06 - an increase of 25 per
cent over the previous year.
* Basic Earnings per Share (EPS) was Rs.11.51 in 2005-06 - against
Rs.9.96 in the previous year.
This transformation of BFL from the largest forgings player in India to
achieving global leadership through a truly international enterprise has been achieved
through a structured strategy of global acquisitions and organic growth. Their
financials are now beginning to reflect the initial results of their global
initiatives.
At an early stage, BFL recognised the potential of a massive growth in demand
arising out of global outsourcing opportunities. More than five years ago, it
began to tap this demand by aggressively pursuing a focused strategy of
becoming a global player. In the process, the company not only extended its
marketing footprint across geographies but also developed a wider portfolio of
products, while simultaneously gaining global market share in higher value
added segments. Through a concerted effort, the company reengineered its
internal dynamics - including its manufacturing capabilities, technological
know-how, people skills and internal control systems and supply chains - to
gear itself to meeting global requirements. This global growth strategy
provided the company with the necessary internal resources and capabilities to
embark on the second phase of its globalisation journey - one which involved
establishing global manufacturing footprints and frontline design and
engineering capability.
Bharat Forge's global acquisition strategy consisted of two key elements. The
first: to widen and broaden the company's customer base by bringing in a wider
portfolio of product offerings to a larger group of customers. And the second:
to have global facilities that assist BFL in working with OEMs as an
engineering and development partner. The strategy, therefore, focused on
acquiring such companies that had product complementarities and manufacturing
facilities which were synergistic and could be leveraged for cost effective and
flexible production systems.
International Investments
In 2005-06, Bharat Forge built upon its earlier global acquisition forays and
made further three strategic acquisitions - Federal Forge in USA, Imatra Kilsta
in Sweden together with Scottish Stampings in Scotland, UK which are now wholly
owned subsidiaries of BFL, and a joint venture in China with First Auto Works
(FAW).
PERFORMANCE OF THE COMPANY:
a) Total Income: Current Year Previous Year % Increase
Rs.16,310 Million Rs.12,265 33%Million
Members would be pleased to note that the Company has achieved significant
growth for the fourth consecutive year on various parameters of performance.
While in the year 2004-05, the Company for the first time surpassed the Rs.10
billion mark, the turnover during the year under report has been much higher at
Rs.16 billion.
The Company achieved record total income of Rs.16,310 million, during the year
under report as against Rs.12,265 million during the previous year,
representing an increase of 33%. This increase is attributed to a large extent
to an increase of about 36% in the domestic market based on growth of domestic
customers' business and such customers sourcing their requirements in the form
of machined components. This trend is likely to continue.
b) Exports Revenue:
|
2002-2003 |
2003-2004 |
2004-2005 |
2005-2006 |
|
Rs.2717 Million |
Rs.3331 Million |
Rs.5105 Million |
Rs.6555 Million |
The exports grew by 28% to cross Rs. 6000 million mark. This is primarily
attributable to:
* Sustained growth in the heavy truck market in the US.
* Steady performance in the European market.
* Commencement of serial production for some of the programmes for
passenger car and fully machined Heavy Duty Engine Parts (HDEP).
During the year under report, the Company continued its strategy of enhanced
presence in Passenger Car Crankshafts market as also in the Heavy Diesel Engine
Crankshafts market. Investments made for these products have started yielding
results and this is reflected in increased exports. As volumes ramp up, there
would be further increase in exports in these markets in the coming
years.
The Company bagged maiden orders for machined crankshafts from two major
European OEMs, which will significantly increase its exports business. The
Company is increasingly assuming the role of 'preferred supplier' with most
large global OEMs, which will lead to substantial increase in involvement, and
turnover with each major OEM.
Business from China was subdued during the year under report. It is hoped that
the said business would pick up towards end of 2006. Overall, the Directors
look forward to a continued growth in exports.
OVERSEAS OPERATIONS:
As part of its strategy, the Company continued to strengthen its position by
making further acquisitions and the following acquisitions have been made by
the Company:
Through its wholly owned subsidiary, Bharat Forge Beteiligungs GmbH,
Germany the Company, on September 21, 2005, acquired Imatra Kilsta AB, Sweden
along with its wholly owned subsidiary, Scottish Stampings Limited, Scotland
(together called Imatra Forging Group), which are now renamed as Bharat Forge
Kilsta AB (BF Kilsta) and Bharat Forge Scottish Stampings Limited,
respectively. BF Kilsta is the leader in the manufacturing of heavy duty diesel
engine crankshafts for the European and Scandinavian truck markets.
On December 8, 2005, the Company, through its wholly owned subsidiaries, Bharat
Forge Beteiligungs GmbH, Germany and Bharat Forge Hong Kong Limited, concluded
a Joint Venture Agreement with FAW Corporation of China (FAW). The subsidiaries
own 52% stake in the JV and the balance 48% is held by FAW.
The JV company, set up under the name and style of FAW Bharat Forge (Changchun)
Co. Limited, has commenced operations from 6th April 2006.
The JV will initially focus on meeting the requirements of the Chinese
automotive industry. This would include, both the local Chinese OEM customers
as well as the global OEMs operating in China, many of whom are already the
customers of the Company.
Synergies through global acquisitions:
In its endeavour to build on synergies,the Company has initiated an ongoing
programme to benchmark operational efficiencies of all its manufacturing
facilities with the best-in-class. Through this well-defined programme,
personnel from various manufacturing locations interact and exchange production
practices to draw and implement best-in-class practices at all locations. Going
forward, this programme would help in developing optimal production strategies
across various locations.
Subsidiary Companies' Accounts:
The Company has received approval of the Central government under Section
212(8) of the Companies Act, 1956, vide their letter No.47/26/2006-CL-III dated
27th January, 2006, which exempts the Company from attaching to the Balance
Sheet of the Company the copies of the Balance Sheets, Profit and Loss
Accounts, Directors' Reports and Auditors' Reports and other documents required
to be attached under Section 212(1) of the Act of its subsidiary companies,
namely: 1) CDP Bharat Forge GmbH, Germany, 2) Bharat Forge Holding GmbH,
Germany, 3) Bharat Forge Aluminiumtechnik GmbH & Co. K.G., Germany, 4)
Bharat Forge Aluminiumtechnik Verwaltungs GmbH, Germany, 5) Bharat Forge
America Inc., U.S.A., 6) Bharat Forge Beteiligungs, GmbH, Germany, 7) Bharat
Forge Imatra Kilsta AB, Sweden, 8) Bharat Forge Scottish Stampings Limited,
Scotland, and 9) Lucrest Limited, Hong Kong (now renamed as Bharat Forge Hong
Kong Limited).
Accordingly, the said documents are not being attached to the Financial
Statements of the Company. A gist of the financial performance of the
subsidiaries is given in this Annual Report. The annual accounts of the
subsidiary companies are open for inspection by any member/investor and the
Company will make available these documents/details upon request by any Member/
Investor of the Company/subsidiaries of the Company interested in obtaining the
same.
EXPANSIONS:
The Members are aware of the Expansion Plans underway at Company's factories at
Mundhwa and Chalkan. The work on the Expansion Projects has been progressing as
per schedule and the status of implementation is as under:
CRANKSHAFT :
By the year ended on March 31,2006, the Company installed 2 lines with
state-of-the-art technology which have become fully operational. The third
machining line is under installation and the production will commence towards
end of 2006. This will enhance the capacity for Finished Machined Crankshafts
at Mundhwa to 600,000 Nos. per annum. Equipped with the state-of-the-art
technology, the Company has acquired leadership position in Heavy Diesel Engine
Crankshafts business which will lead to significant growth opportunities.
FORGINGS :
During the year, the new 8000 MT Press and 5500 MT Automated Transfer Press
have been installed and have become fully operational, thus, raising the
installed capacity to 200,000 Tonnes per annum. Installation of another 12500
MT Press is nearing completion and production will progressively ramp up during
2006-07. With this expansion, Forgings capacity at Mundhwa will stand increased
to 240 000 Tonnes per annum.
FRONT AXLE ASSEMBLY AND COMPONENTS:
By the year ended March 31, 2006, the Company has installed capacity for the
manufacture of 678,000 Nos. per annum of Front Axle Assembly and components
thereof at Mundhwa and Chakan.
The Company has successfully commissioned new facilities for machining of Front
Axle Beams and Steering Knuckles. These facilities are also state-of-the-art
and have helped the Company establish leadership role ins this market.
CMT REPORT [Corruption, Money
laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.16 |
|
UK
Pound |
1 |
Rs.86.00 |
|
Euro |
1 |
Rs.57.56 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
69 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit
history (10%) Market
trend (10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |
|
NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
|