MIRA
INFORM REPORT
|
Report Date : |
11.01.2007 |
IDENTIFICATION
DETAILS
|
Name : |
THE
BARODA RAYON CORPORATION LIMITED |
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Registered Office : |
Fatehnagar, P. O.
Bawdarayon, Surat 394 220, Gujarat |
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Country : |
India |
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Financials (as on) : |
30.09.2005 |
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Date of Incorporation : |
30.05.1958 |
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Com. Reg. No.: |
11-892 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMT11512E |
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PAN No.: [Permanent
Account No.] |
AAACT4051D |
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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 : |
Producer
of Viscose Filament Yarn, Nylon Yarn, Polyester Yarn and Nylon Tyre Yarn |
RATING & COMMENTS
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MIRA’s Rating : |
Ca |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
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Status : |
Sick
Company |
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Payment Behaviour : |
Delayed |
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Litigation : |
Exist |
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Comments : |
The
company is a sick industrial undertaking having huge accumulated losses. Financial
position is poor. Management has plans to reduce the capital. It’s
payments are slow and delayed. In
view of huge losses, the company can be considered for any business dealings
on safe and secured trade terms and conditions, only. |
LOCATIONS
|
Registered Office : |
Fatehnagar, P. O.
Bawdarayon, Surat 394 220, Gujarat |
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Tel. No.: |
91-261-2690371,2690372, 2690373,2690 374 |
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Fax No.: |
191-261-2690454 |
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Telex : |
188 217 FATE IN |
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Tele Gram : |
RAINBOW |
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Head
Office : |
Hoechst House,
Ground Floor, 193, Backbay Reclamation, Nariman Point, Mumbai 400 021. |
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Fax
No.: |
91-22-22049296 |
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Factory
1 : |
Fatehnagar, P. O.
Bawdarayon, Surat 394 220, Gujarat, India |
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Tel.
No.: |
91-261-2690371,2690372, 2690373,2690 374 |
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Fax
No.: |
191-261-2690454 |
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Telex : |
188 217 FATE IN |
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Tele Gram : |
RAINBOW |
SOLE PROPRIETOR/PARTNERS/DIRECTORS
|
Name : |
Mr.
Udayan Chinubhai |
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Designation : |
Director |
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Name : |
Mr. N.
Ramamurthi |
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Designation : |
Nominee
Director |
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Name : |
Mr. D.
B. Dubash |
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Designation : |
Director |
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Name : |
Mr. R.
Vasan |
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Designation : |
Nominee
Director |
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Name : |
Mr. E.
B. Desai |
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Designation : |
Director |
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Name : |
Mr. H.
S. Billimoria |
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Designation : |
Director |
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Name : |
Mr. K.
R. Coorawala |
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Designation : |
Director |
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Name : |
Mr. V.
C. Vaidya |
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Designation : |
Director |
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Name : |
Mr. S.
P. Gaekwad |
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Designation : |
Chairman
and Managing Director |
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Name : |
Mr. A.
K. Shah |
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Designation : |
Director |
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Name : |
Mr. M.
Sudhendranath |
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Designation : |
Nominee
Director |
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Name : |
Captain
J. P. Singh |
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Designation : |
Director |
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Name : |
Captain
V. K. Raichand |
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Designation : |
Director |
MAJOR SHAREHOLDERS
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Names
of Shareholders |
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Percentage of Holding |
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INSTITUTIONS
(%) |
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UTI |
|
11.93 |
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IDBI |
|
0.05 |
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LIC |
|
4.83 |
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GIC |
|
4.27 |
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IFCI |
|
0.21 |
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TOTAL |
|
21.30 |
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DOMESTIC
(%) |
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Directors |
|
2.64 |
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Public |
|
44.82 |
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Mutual Funds |
|
0.84 |
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Other Companies |
|
15.21 |
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TOTAL |
|
63.51 |
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FOREIGN
(%) |
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NRI |
|
0.16 |
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Collaborators |
|
9.99 |
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Institutions |
|
5.04 |
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TOTAL |
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15.19 |
BUSINESS DETAILS
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Line of Business : |
Producer
of Viscose Filament Yarn, Nylon Yarn, Polyester Yarn and Nylon Tyre Yarn |
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Products : |
Industrial
and Chemical Process Equipment, Textile and Garments
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PRODUCTION
STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
|
Viscose filament
Yarn |
M.T. |
6134 |
4500 |
2978.876 |
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Nylon Yarn |
M.T. |
6000 |
2436 |
Nil |
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Polyester Yarn |
M.T. |
10777 |
15204 |
Nil |
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Nylon Industrial
Yarn/ Tyrecord $ |
M.T. |
4000 |
4000 |
Nil |
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Anhydrous Sodium
Sulphate |
M.T. |
3585 |
2200 |
1360.00 |
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Carbon-di-Sulphide |
M.T. |
1980 |
1980 |
1445.907 |
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Sodium Sulphide |
M.T. |
145 |
145 |
0.528 |
GENERAL
INFORMATION
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No. of Employees : |
700 |
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Bankers : |
Ø Punjab National Bank, PNB House, Sir P. M. Road, Fort, Mumbai - 400 001. Ø
ICICI Limited Ø Yes Bank |
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Facilities : |
Secured Loans :
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Banking Relations : |
Unknown |
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Auditors : |
Desai & Porwal Chartered Accountants |
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Tel. No.: |
7, Hira Moti
Building, 1st Floor, Shrinagar So9iety, M.G. Road, Goregaon (West), Mumbai
400 062. |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
130000000 |
Equity
Shares |
Rs.10/- each |
Rs.1300.000 millions |
|
2000000 |
15%
Redeemable Cumulative Preference Shares |
Rs.10/- each |
Rs.20.000 millions |
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Total |
|
Rs.1500.000 |
Issued
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
4760752 |
Equity
Shares |
Rs.10/- each |
Rs.476.075 millions |
Subscribed
& Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
4613399 |
Equity
Shares |
Rs.10/- each |
Rs.461.340 millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
30.09.2005 (12 months) |
30.09.2004 (18 months) |
31.03.2003 (12 months) |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
508.768 |
508.760 |
407.700 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
975.249 |
975.245 |
(2095.400) |
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4] (Accumulated Losses) |
(2043.761) |
(1391.062) |
0.000 |
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NETWORTH |
(559.744) |
92.943 |
(1687.700) |
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LOAN FUNDS |
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1] Secured Loans |
503.340 |
392.255 |
2085.900 |
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2] Unsecured Loans |
368.105 |
217.828 |
208.400 |
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TOTAL BORROWING |
871.445 |
610.083 |
2294.300 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
311.701 |
703.026 |
606.600 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
685.602 |
752.364 |
728.100 |
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Capital work-in-progress |
445.917 |
445.917 |
879.300 |
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INVESTMENT |
59.935 |
59.935 |
59.900 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
71.769 |
126.878 |
132.900 |
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Sundry Debtors |
23.410 |
77.667 |
81.900 |
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Cash & Bank Balances |
14.715 |
4.388 |
4.400 |
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Other Current Assets |
0.000 |
0.000 |
0.000 |
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Loans & Advances |
319.252 |
266.929 |
119.800 |
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Total Current Assets |
429.146 |
475.862 |
339.000 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
1133.068 |
883.270 |
1293.200 |
|
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Provisions |
176.909 |
149.743 |
109.800 |
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Total Current Liabilities |
1309.977 |
1033.013 |
1403.000 |
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Net Current Assets |
(880.831) |
(557.151) |
(1064.000) |
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MISCELLANEOUS EXPENSES |
1.078 |
1.961 |
3.300 |
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TOTAL |
311.701 |
703.026 |
606.600 |
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PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
30.09.2005 (12 months) |
30.09.2004 (18 months) |
31.03.2003 (12 months) |
|
Sales Turnover [including other income] |
431.358 |
266.405 |
585.700 |
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Profit/(Loss)
Before Tax |
(478.623) |
(299.815) |
(388.100) |
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Provision
for Taxation |
0.000 |
0.000 |
0.000 |
|
Profit/(Loss)
After Tax |
(478.623) |
(299.815) |
(388.100) |
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|
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Total
Expenditure |
846.669 |
443.932 |
973.800 |
KEY RATIOS
|
PARTICULARS |
30.09.2005 (12 months) |
30.09.2004 (18 months) |
31.03.2003 (12 months) |
|
Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
0.33 |
0.26 |
0.18 |
|
TURNOVER RATIOS |
|
|
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|
Fixed Assets |
0.16 |
0.03 |
0.16 |
|
Inventory |
4.81 |
0.71 |
3.76 |
|
Debtors |
9.46 |
1.16 |
5.69 |
|
Interest Cover Ratio |
(7.35) |
(12.30 |
(1.97 |
|
Operating Profit Margin(%) |
(101.97) |
(103.97) |
(36.75) |
|
Profit Before Interest And Tax Margin(%) |
(120.19) |
(196.46) |
(56.10) |
|
Cash Profit Margin(%) |
(118.33) |
(119.94) |
(65.24) |
|
Adjusted Net Profit Margin(%) |
(136.55) |
(212.43) |
(84.59) |
|
Return On Capital Employed(%) |
0.00 |
(13.97) |
0.00 |
|
Return On Net Worth(%) |
0.00 |
128.65 |
0.00 |
STOCK PRICES
|
Face
Value |
Rs.10.00/- |
|
High |
Rs.2.95 |
|
Low |
Rs.2.60 |
LOCAL AGENCY
FURTHER INFORMATION
BUSINESS
The company was incorporated to carry on the business of manufacturing of viscose filament yarn, sulphuric acid, carbon-disulphide, anhydrous sodium sulphate, and nylon yarn.
The company uses the trade name “ SNIALON” for its nylon yarn.
The company has collaboration agreement with Unitika of Japan for the Trading.
In 1984, the company received a letter of intent to set up a newsprint plant in the Ratnagiri district of Maharashtra State.
The Director in their 38th Audited Annual Report for the year ended 31.03.1997 states that due to view of loss the company is unable to recommend payment of dividend. The gross turnover of the company for the year was Rs. 3531.80 million compared to Rs. 4644.4 million in the previous year. The company is facing a severe liquidity crunch. Equipments for imported Polycondensation Plant and Solid Waste Recovery Plant could not be commissioned for want of funds. The company is unable to achieve full production capacities.
The managing is taking necessary steps such as reduction in costs, better product mix and reschedulement of its long term finances to improve the profitability of the company.
The Company’s fixed assets of important value include freehold land (freehold), roads, buildings, plant and machinery, tube wells, water works and pipe lines, railway sidings, furniture, fixtures and equipments and vehicles.
PERFORMANCE
During the year under review the company has operated the Rayon Plant
and improved the performance. The Nylon plant commenced operations in November,2005
and has consistently improved in the last three months. The company is taking
effective steps to commence the operations of the NTC plant at the earliest.
The turnover of the company for the year under review was Rs. 477.990
millions as against Rs. 138.439 millions (for eighteen months). This has been
largely possible due to the consistent performance in the Rayon Division and
the culmination of the efforts of your Management in the last two years. These
losses are expected to reduce further in the current year due to better
performance and the commissioning of the NTC plant.
BUSINESS
RESTRUCTURING
The company is a sick company under the Sick Industries Companies
(Special Provisions) Act,1985. Hence, a reference has been made to BIFR and has
been registered. Pursuant to the said registration of the reference, a detailed
package is in the process of being submitted to BIFR under section 17(2) of the
said Act. The package is largely in line with the CDR settlement with the
lenders, the settlement with the labour, the relief sought from Government of
Gujarat applicable to sick Companies. On approval of the said package all the
liabilities of the company will be restated by reducing to the extent that has
been approved by the package.
The company has been able to revive operations largely due to the
efforts of the management to restart operations by pumping in additional funds
to the tune of Rs.890 millions approximately. Further, huge sacrifices have
been made by the financial institutions and banks in the interest of the
revival of the company, workers have agreed for a 40% reduction in their wages,
statutory dues will be reduced once the package submitted to the Gujarat
government is cleared. Thus in order to further strengthen this process it is
essential for the company to reduce the capital so that the losses are
minimized and the company can be strengthened to raise funds for meeting the
balance funding as per the BIFR, package and for future requirements. In view
of the above it is proposed to reduce the capital to Rs.40.764 millions from
the current level of Rs.407.636 millions (net of call in arrears). Thus every
ten shares held by the members currently will be reduced to one share post
reduction of the capital. Subsequently, this
will be, if required, submitted to the high court for confirmation. The
special resolution required for the said purpose is submitted for approval.
The aforesaid measures shall ensure that the Net Worth of their company
becomes positive at the earliest and will be truly representative of the
residual assets available post the restructuring of the capital of the company.
The directors request the members to consider this resolution favorably
at the ensuing Annual General Meeting.
Incorporated in 1958
and promoted by Sangramsinh Gaekwad (formerly the Maharaja of Baroda), Baroda
Rayon Corporation Limited (BRCL) is a well-established and diversified company,
engaged in the manufacture of viscose filament rayon yarn, sulphuric acid,
carbon di-sulphide, anhydrous sodium sulphate, nylon yarn (sold under the brand
name Snialon), etc.
In 1973, Gujarat Polymers was merged with the company and, as a result, it
acquired the nylon yarn plant. A technical collaboration agreement was entered
into with Unitika, Japan, to manufacture nylon tyre cord. In 1981, the company
made a beginning in the supply of technical know-how and basic engineering for
setting up plants with a capacity of 13 tpa for carbon bi-sulphide.
During 1988-89, Subject increased the nylon tyre cord capacity from 2000 tpa to
4000 tpa. The capacity of polyester filament yarn (PFY) was expanded from 1777
tpa to 10797 tpa in 1990-91, in technical collaboration with Samsung Company,
South Korea.
In April 1995, it expanded the partially oriented yarn (POY) plant
capacity to 15000 tpa. It is implementing a backward integration project of
setting up a polycondensation plant to produce polyester chips. It is also
putting up a solid waste recovery plant. To finance these projects it came out
with a rights issue of Rs 158.7 millions at a premium in February 1997.
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 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.44.61 |
|
UK
Pound |
1 |
Rs.86.80 |
|
Euro |
1 |
Rs.57.54 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
1 |
|
OPERATING SCALE |
1~10 |
1 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
1 |
|
--PROFITABILIRY |
1~10 |
-- |
|
--LIQUIDITY |
1~10 |
1 |
|
--LEVERAGE |
1~10 |
2 |
|
--RESERVES |
1~10 |
-- |
|
--CREDIT LINES |
1~10 |
1 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
12 |
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 |
|