MIRA
INFORM REPORT
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Report Date : |
01.10.2008 |
IDENTIFICATION
DETAILS
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Name : |
BHORUKA ALLUMINIUM LIMITED |
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Registered Office : |
No. 1, KRS Road, Metagally, Mysore-570016, Karnataka |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
09.01.1979 |
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Com. Reg. No.: |
003442 |
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CIN No.: [Company
Identification No.] |
L85110KA1979PLC003442 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRB02633B |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are listed on
Stock Exchange |
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Line of Business : |
Manufacturer of Aluminum extruded products and Irrigation
Sprinkler Systems. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 500000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having satisfactory track.
The company is listed on the stock exchange. Financial position is
satisfactory. Trade relations are fair. Payments are usually correct and as
per commitments. The company can be considered good for normal business at usual trade
terms and conditions. |
LOCATIONS
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Registered Office/ Factory : |
No. 1, KRS Road, Metagally, Mysore-570016, Karnataka, India |
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Tel. No.: |
91-821-582066 / 582116 / 582301 / 982 |
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Fax No.: |
91-821-5821 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. M Sreenivasa Rao |
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Designation : |
Chairman |
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Name : |
Mr. R K Aggarwal |
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Designation : |
Managing Director |
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Name : |
Mr. Rajat Agarwal |
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Designation : |
Executive Director |
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Name : |
Mr. M K Panduranga Setty |
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Designation : |
Director |
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Name : |
Dr. B L Amla |
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Designation : |
Director |
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Name : |
Mr. Prabir Chakravari |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr/. R K Jain |
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Designation : |
Chief Executive Officerf |
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Name : |
Mr. K Chandra Sekhar |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters/ Relatives |
2655214 |
58.54 |
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Resident Individual |
1056958 |
23.30 |
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Bodies Corporate |
646268 |
14.25 |
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Public Financial Institutions |
150000 |
3.31 |
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Mutual Funds |
1900 |
0.04 |
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HUF |
20423 |
0.45 |
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Clearing Members |
5137 |
0.11 |
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Total |
4535900 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Aluminum extruded products and Irrigation
Sprinkler Systems. |
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Products : |
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Exports : |
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Countries : |
·
UK ·
Singapore ·
Australia ·
UAE ·
Sri Lanka ·
Mauritius |
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Imports : |
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Countries : |
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Australia ·
Dubai ·
Norway ·
Singapore ·
Sweden ·
USA |
PRODUCTION STATUS
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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Aluminum Extrusions |
MT |
|
8500 |
8361 |
GENERAL
INFORMATION
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No. of Employees : |
About 1200 |
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Bankers : |
State Bank of India |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
R S Agarwal and Company Chartered Accountant |
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Address : |
Bangalore |
CAPITAL STRUCTURE
As on 31.03.2008
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
14750000 |
Equity Shares |
Rs. 10/- each |
Rs. 147.500 Millions |
|
250000 |
Un-Classified Shares |
Rs. 10/- each |
Rs. 2.500 |
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Total |
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Rs. 150.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
4535900 |
Equity Shares |
Rs. 10/-
each |
Rs. 45.359
Millions |
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Add: |
Amount paid on share forfeited |
|
Rs. 0.058
Million |
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Total |
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Rs. 45.417 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
45.417 |
45.417 |
45.400 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
56.387 |
17.524 |
[3.900] |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
101.804 |
62.941 |
41.500 |
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LOAN FUNDS |
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1] Secured Loans |
251.766 |
241.472 |
134.000 |
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2] Unsecured Loans |
92.176 |
27.296 |
59.400 |
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TOTAL BORROWING |
343.942 |
268.768 |
193.400 |
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DEFERRED TAX LIABILITIES |
14.813 |
11.551 |
0.000 |
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TOTAL |
460.559 |
343.260 |
234.900 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
209.607 |
159.270 |
77.700 |
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Capital work-in-progress |
25.230 |
4.333 |
1.800 |
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INVESTMENT |
10.964 |
10.964 |
11.000 |
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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 |
248.923
|
207.014 |
200.800 |
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Sundry Debtors |
153.171
|
111.993 |
100.400 |
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Cash & Bank Balances |
24.382
|
23.294 |
20.300 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
27.037
|
46.281 |
63.000 |
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Total
Current Assets |
453.513
|
388.582 |
384.500 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
210.332
|
200.231 |
222.300 |
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Provisions |
28.423
|
19.658 |
17.800 |
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Total
Current Liabilities |
238.755
|
219.889 |
240.100 |
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Net Current Assets |
214.758
|
168.693 |
144.400 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
460.559 |
343.260 |
234.900 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
1484.748 |
1158.682 |
872.800 |
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Other Income |
2.470 |
5.821 |
11.600 |
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Total Income |
1487.218 |
1164.503 |
884.400 |
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Profit/(Loss) Before Tax |
70.348 |
30.522 |
18.600 |
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Provision for Taxation |
25.116 |
9.080 |
5.800 |
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Profit/(Loss) After Tax |
45.232 |
21.442 |
12.800 |
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Earnings in Foreign Currency : |
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Export Earnings |
17.967 |
40.900 |
NA |
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Imports : |
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Raw Materials |
83.248 |
5.561 |
NA |
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Finished Goods |
20.004 |
0.000 |
NA |
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Capital Equipments |
0.000 |
0.000 |
NA |
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Stores and spare parts |
12.247 |
17.171 |
NA |
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Total Imports |
115.499 |
22.732 |
NA |
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Expenditures : |
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Manufacturing Expenses |
156.698 |
114.569 |
32.000 |
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Employee cost |
0.000 |
0.000 |
43.400 |
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Administrative Expenses |
62.301 |
48.013 |
33.700 |
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Miscellaneous Expenses |
0.000 |
0.000 |
3.100 |
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Raw Material Consumed |
1036.341 |
856.303 |
558.400 |
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Excise Duty |
0.000 |
0.000 |
115.500 |
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Purchases made for re-sale |
20.004 |
0.000 |
0.000 |
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Personnel Expenses |
72.232 |
45.686 |
0.000 |
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Increase/(Decrease) in Finished Goods |
[31.174] |
0.104 |
[24.500] |
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Financial Charges |
87.787 |
61.751 |
0.000 |
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Interest and Financial Charges |
0.000 |
0.000 |
50.000 |
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Power & Fuel |
0.000 |
0.000 |
51.900 |
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Depreciation & Amortization |
12.681 |
7.555 |
6.100 |
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Preoperative Expenditure Capitalised |
0.000 |
0.000 |
[3.800] |
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Total Expenditure |
1416.870 |
1133.981 |
865.800 |
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QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
|
|
30.06.2008 1st
Quarter |
|
Sales Turnover |
|
|
341.600 |
|
Other Income |
|
|
0.300 |
|
Total Income |
|
|
341.900 |
|
Total Expenditure |
|
|
304.800 |
|
Operating Profit |
|
|
37.100 |
|
Interest |
|
|
22.200 |
|
Gross Profit |
|
|
14.900 |
|
Depreciation |
|
|
3.800 |
|
Tax |
|
|
2.800 |
|
Reported PAT |
|
|
8.300 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
3.72 |
4.43 |
5.34 |
|
Long Term Debt-Equity Ratio |
1.62 |
1.77 |
3.36 |
|
Current Ratio |
1.01 |
1.03 |
1.22 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
5.79 |
6.23 |
5.26 |
|
Inventory |
7.37 |
6.56 |
4.95 |
|
Debtors |
12.66 |
12.60 |
8.16 |
|
Interest Cover Ratio |
1.78 |
1.48 |
1.37 |
|
Operating Profit Margin(%) |
10.30 |
7.57 |
8.56 |
|
Profit Before Interest And Tax Margin(%) |
9.54 |
7.00 |
7.86 |
|
Cash Profit Margin(%) |
3.45 |
2.17 |
2.17 |
|
Adjusted Net Profit Margin(%) |
2.69 |
1.60 |
1.47 |
|
Return On Capital Employed(%) |
41.21 |
32.73 |
29.26 |
|
Return On Net Worth(%) |
54.89 |
38.98 |
27.29 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
Incorporated in 1979, Bhoruka Aluminium (BAL) is currently Chaired by Sreenivasa
Rao and Managed by Managing Director R K Agarwal. BAL is engaged in the
production of aluminium extrusion with an installed capacity of 5000 tpa at
Metagalli, Mysore.
With the aluminium industry afflicted by shortage of raw material, demand constraints
and increase in excise duty, BAL suffered consistent losses due to
under-utilisation of capacity and was declared a sick company in 1991. BAL was
sanctioned a rehabilitation scheme by BIFR on 30 Jun.'93, pursuant to which
plant and machinery and other fixed assets have been leased to M/s Transport
Corporation of India (TCI) for a period of three years from 1 Apr.'93 for a
consideration of Rs 30.000 Millions pa which is utilised for repayment of loans
and interest to financial institutions and banks. According to the sanctioned
scheme, the company has alloted 35,47,400 equity shares of Rs 10 each at par to
TCI, Bhoruka Steel and financial institutions by way of conversion of part of
their outstanding loans / interest dues.
BAL has gone for modernisation, expansion and diversification by improving the
existing methods of manufacture and installation of an additional extrusion
press and anodising plant.
The Company has been ceased to be a sick company as accumulated losses has
exceeded the Networth of the company.
Operations:
The Company has reported a stellar performance for the year. The turnover has
increased by 25% from Rs.1337.700 Millions to Rs.1679.000 Millions and the net
profits for the same period registered an increase of 111% from Rs.21.400
Millions to Rs.45.200 Millions. Both these were in fact highest achieved by the
Company since its inception.
In line with an impressive increase in turnover, the Production also increased
to 8,379 M.Tons. from 6,505 M.Tons.
To meet the growing demand, the Company has taken up an expansion plan
to increase its installed capacity. The plant is in advanced stage of
implementation and it is expected to begin commercial production in first week
of October 2008.
Dividend:
In view of an excellent performance during the last year, the directors are
pleased to recommend a maiden dividend of 12% for the year ended 31 st March
2008. The dividend, if approved at the forthcoming Annual General Meeting, will
be paid out of the profits of the Company for the year and will absorb Rs.5.400
Millions. The dividend will be paid to those shareholders whose names appear on
the Register of Members of the Company after giving effect to all valid share
transfers lodged with the Share Transfer Agents on or before 11th July, 2008
and those whose names appear as Beneficial Owners in the records of National
Securities Depository Limited (NSDL) and Central Depository Services (India)
Limited (CDSL) as on the said date.
Prospects:
With a buoyant construction sector and healthy GDP, the domestic demand for
Aluminium Extrusion is likely to increase at a rate of 10 to 11 %.
Construction, Automobiles, Consumer durables are the future drivers of growth.
India has a huge potential for consumption of aluminium extrusions. A sudden
need to improve infrastructure, over all growth in the economy and improvement
in disposable income will maintain strong demand in this sector.
The Company already has an anodizing plant and in accordance with the Company's
focus on value added activities, a state of the art modern. Powder Coating
Plant was commissioned during the last year to meet growing demand of quality
powder coated extrusions.
Additionally, in order to provide a high degree of customer services, a modern
ERP system (S A P ) was successfully implemented this year to integrate various
Business Processes.
MANAGEMENT
DISCUSSION AND ANALYSIS
Industry structure:
Last year, the Company achieved its best ever performance. Improved
overall efficiency and better product mix culminated in highest production of
8379 M.T. since inception. The Company is in business for last 27 years and
with its prompt customer service, unmatched quality and timely delivery enjoys
excellent competitive edge.
The Indian economy, on a high growth curve remained one of the fastest growing
countries. Globally, there is a shift of manufacturing towards Asia; aluminium
extrusion is no exception, particularly against raising power and other
manufacturing costs in Western countries. Other influencing factors are good
quality local bauxite and strong domestic demand.
Opportunities:
Aluminium is a versatile metal and can be given any shape, easily. This
with its strength to weight ratio provides a vast scope for innovative designs and
newer applications. In fact, increasing use of extrusions in automobiles,
railways, consumer durables, electronics prove this, New applications and
strong demand will even absorb increasing capacities. Recent trends indicate a
shift towards quality and timely deliveries and companies able to deliver both
have a bright future.
Discussion on
Financial Performance:
Last year was a land mark year for the Company. Its splendid performance on all
fronts resulted in highest net profit in the history of the Company. The net
profit made a substantial jump from Rs. 21.442 Millions to Rs.45.250 Millions
an increase of 111 %. Production of 8,379 M.Tons surpassed all previous year
records proving excellent over all efficiencies on all value parameters. These
results were achieved despite high volatility in Aluminium prices in
International Market. For the first time the Company achieved an EPS of almost
Rs.10/- which is equal to the face value of shares.
Appreciation in Rupee made exports uneconomical, however the marketing strategy
of the company is flexible and fine tunes the share of exports as
required.
With a view to integrate various business process, the successful
implementation of modern ERP System (SAP) will further improve the overall
operational efficiency in the coming years.
Good quality, timely delivery and focus on customer services, increased the
market share and additional capacity is being created to absorb additional
demand by installation of new extrusion press scheduled to go on stream in
October 2008.
Contingent Liabilities:
|
Particulars |
31.03.2008 (Rs. In
Millions) |
|
Estimated amount of Contracts remaining to
be executed on capital account |
89.663 |
|
Bills discounted with Bank |
200.448 |
|
Bank Guarantees outstanding |
5.849 |
|
R.O.R |
21.210 |
|
Service tax under dispute |
0.065 |
Fixed Assets:
·
Land – Freehold
·
Building
·
Plant and Machinery
·
Electrical Installations
·
Office Equipments
·
Furniture and Fixture
·
Motor Vehicles
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.46.94 |
|
UK Pound |
1 |
Rs.85.57 |
|
Euro |
1 |
Rs.67.79 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
52 |
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. |
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 |
|