MIRA INFORM REPORT

 

 

Report Date :

28.05.2011

 

IDENTIFICATION DETAILS

 

Name :

BHARAT FORGE LIMITED

 

 

Registered Office :

Mundhwa, Pune Cantonment, Pune – 411036, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

19.06.1961

 

 

Com. Reg. No.:

11-12046

 

 

Capital Investment / Paid-up Capital :

Rs.445.400 millions

 

 

CIN No.:

[Company Identification No.]

L25209PN1961PLC012046

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

PNEB0272E

 

 

Legal Form :

A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing and Sale of Steel Forgings, Finished Machined Crankshafts, Couplings, Front Axle Assembly and Components.

 

 

No. of Employees :

3000 (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A (66)

 

RATING

STATUS

PROPOSED CREDIT LINE

 

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

 

Maximum Credit Limit :

USD 60000000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and a reputed company having fine track. Financial position of the company appears to be sound. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments.

 

The company can be considered normal for business dealings at usual trade terms and conditions.

 

NOTES:

 

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – April 1, 2010

 

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

A1

A1

 

 

 

 

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

INFORMATION PARTED BY

 

Name :

Mr. Besane

Designation :

Deputy Manager

Contact No.:

91-20-26702777

 

 

LOCATIONS

 

Registered Office/ Factory :

Mundhwa, Pune Cantonment, Pune – 411 036, Maharashtra, India

Tel. No.:

91 - 20 – 26702777 / 26702476 / 26702544

Fax No.:

91 - 20 – 26822163 / 26822387 / 26820699 / 26824778

E-Mail :

bflpune@bfl.sprintsmg.ems.vsnl.net.in 

jtarapore@vsnl.com   

bharatforge@bharatforge.com  

info@bharatforge.com  

secretarial@bharatforge.com

Website :

http://www.bharatforge.com

Area :

5000 sq. ft.

Location :

Owned

 

 

 Factory 1 :

Gat No. 635, Kuruli Village, Chakan, District Pune – 410 501, Maharashtra, India

 

 

Factory 2 :

Opposite Jarandeshwar Railway Station, Vadhuth, District Satara – 415 011, Maharashtra

 

 

Factory 3 :

Kusumbe, Jalgaon-Ajantha Road, Jalgaon – 425 003, Maharashtra

 

 

Factory 4 :

CDP Bharat Forge GmbH, Julius Saxler – Str.4, D-54550 Daun / Vulkaneifel

Tel. No.:

++ 49 (0) 6592 – 9501- 0

Fax No.:

++ 49 (0) 6592 – 9501 -11

 

 

Factory 5 :

CDP Bharat Forge GmbH, Mittelstr. 64, D-58256 Ennepetal

Tel. No.:

++ 49 (0)2333-796-0

Fax No.:

++ 49 (0)2333-796-388

E-Mail :

info@cdp-bharatforge.de

 

 

Factory 6 :

Bharat Forge Aluminiumtechnik GmbH and Company KG, Berthelsdorfer Str. 8
09618 Brand-Erbisdorf (Germany)

Tel. No.:

0049 37322 16389

Fax No.:

0049 37322 16333

E-Mail :

info@cdp-at.de

 

 

Chennai (Madras) Office :

Fagun Mansion 3rd Floor, 26, Ethiraj Salai, Chennai- 600 105, Tamilnadu, India

Tel. No.:

91-44-28272116

Fax No.:

91-44-28270921

E-Mail :

bflmds@vsnl.com

 

 

New Delhi Office :

Antriksh Bhavan, 14th Floor, 22 Kasturba Gandhi Marg, New Delhi-110 001, India

Tel. No.:

91-11-3312484 / 3312946

Fax No.:

91-11-3357083

E-Mail :

bfldelhi@bol.net.in

bhaforge@bol.net.in

 

 

Mumbai Office :

Mittal Towers, B Wing, 15th Floor, Opp. New Council Hall, Nariman Point, Mumbai – 400 021, Maharashtra, India

Tel. No.:

91-22-22830317/22830523

Fax No.:

91-22-22040053

E-Mail :

bharatforgemumbai@vsnl.com

 

 

Kolkata (Calcutta) Office :

20 Netaji Subash Road, Kolkata – 700 001, West Bengal, India

Tel. No.:

91-33-22305976 / 22306592

Fax No.:

91-33-28500017

E-Mail :

bflcal@vsnl.net

 

 

Jamshedpur Office :

61-A , Rajendra Nagar, Sakchi, Jamshedpur – 831 001

Tel. No.:

91-657-2426732

E-Mail :

jsr_bfljsr@sancharnet.in

 

 

Bangalore Office :

23/2, 2nd Floor, Kammanahalli Main Road, Next To Vinayak Temple
Opp Libetrty Shoe Mart, St Thomas Town Post, Bangalore 560084, Karnataka, India

Tel. No.:

91-80-25806570

Fax No.:

91-80-25806570

E-Mail :

bharath_forge@dataone.in

 

 

DIRECTORS

 

(AS ON 31.03.2010)

 

Name :

Mr. B. N. Kalyani

Designation :

Chairman and Managing Director

Qualification :

B.E. (Mech.) (Hons.), M.S. (M.I.T.)

Date of Appointment :

01.04.1972

 

 

Name :

Mr. S. M. Thakore

Designation :

Director

 

 

Name :

Mr. S. D. Kulkarni

Designation :

Director

 

 

Name :

Mr. Pratap G Pawar

Designation :

Director

 

 

Name :

Prof. Dr. Uwe Loos

Designation :

Director

 

 

Name :

Mr. P. C. Bhalerao

Designation :

Executive Director

Qualification :

B.E. (Elect.), M.B.A., D.T.M.

Date of Appointment :

3rd March, 1987

Previous Employment :

Bharat Steel Tubes Limited, Delhi – Dy. General Manager

 

 

Name :

Mrs. Lalita D Gupte

Designation :

Director

 

 

Name :

Mr. P. H. Ravikumar

Designation :

ICICI Nominee Director

 

 

Name :

Mr. Alan Spencer

Designation :

Director

 

 

Name :

Mr. Naresh Narad

Designation :

Director

 

 

Name :

Dr. T. Mukherjee

Designation :

Director

 

 

Name :

Mr. G. K. Agarwal

Designation :

Deputy Managing Director

Qualification :

B.E. (Mech.), M.B.A.

Date of Appointment :

1st November, 1976

Previous Employment :

Guest Keen Williams Limited, Howrah, West Bengal

 

 

Name :

Mr. Amit B. Kalyani

Designation :

Executive director

 

 

Name :

Mr. B. P. Kalyani

Designation :

Executive Director

 

 

Name :

Mr. S. E. Tandale

Designation :

Executive Director

 

 

Name :

Mr. P. K. Maheshwari

Designation :

Executive Director

 

 

Name :

Mr. Sunil Chaturvedi

Designation :

Executive Director

 

 

KEY EXECUTIVES

 

Name :

Mr. Besane

Designation :

Deputy Manager

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

(AS ON 31.03.2011)

 

Names of Shareholders

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

813,115

0.35

Bodies Corporate

97,089,055

41.71

Sub Total

97,902,170

42.06

(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

97,902,170

42.06

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

15,076,833

6.48

Financial Institutions / Banks

22,197,024

9.54

Insurance Companies

8,561,637

3.68

Foreign Institutional Investors

28,822,481

12.38

Sub Total

74,657,975

32.07

(2) Non-Institutions

 

 

Bodies Corporate

24,385,822

10.48

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs. 0.100 Million

22,774,751

9.78

Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million

9,591,850

4.12

Any Others (Specify)

3,472,548

1.49

Clearing Members

191,450

0.08

Trusts

2,672,525

1.15

Non Resident Indians

608,573

0.26

Sub Total

60,224,971

25.87

Total Public shareholding (B)

134,882,946

57.94

Total (A)+(B)

232,785,116

100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

-

-

(1) Promoter and Promoter Group

-

-

(2) Public

9,200

-

Sub Total

9,200

-

Total (A)+(B)+(C)

232,794,316

-

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Sale of Steel Forgings, Finished Machined Crankshafts, Couplings, Front Axle Assembly and Components.

 

 

Products :

Item Code No. (ITC Code)

73269099

Product Description

Forging   Steel Forging Forge Articles

 

 

Item Code No. (ITC Code)

84831099

Product Description

Crankshafts    Finished Machined Crankshafts

 

 

Item Code No. (ITC Code)

87081090

Product Description

Axles     Front Axle Assembly and  Component of Motor Vehicle

 

 

Exports :

 

Countries :

·         Argentina

·         Bangladesh

·         Germany

·         Iran 

 

 

Imports :

 

Products :

Raw Materials

Countries :

·         China

·         Sweden

·         Mexico

·         France

·         Germany 

 

 

Terms :

 

Selling :

L/C, D/A and D/P

 

 

Purchasing :

L/C, D/A and D/P

 

 

PRODUCTION STATUS (AS ON 31.03.2010)

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

 

 

 

 

 
Steel Forging

MT

320000

240000

128463 (d)

Finished Machined Crankshaft

Nos.

600000

518100

317612

Couplings

MT

600

600

--

Front Axle Assembly and Components

Nos.

600000

533600

175432

Well Head Assembly and Parts

Nos.

5000

--

--

Aluminium Road Wheel

Nos.

4000

4000

--

General Engineering Equipments

Nos.

1100

1100

8

Material Handling Equipments

Nos.

1350

1350

--

Hydraulic and Mechanical Presses

Nos.

250

250

--

Bandshaw Machines for cutting Metallic Round and Square Bars

Nos.

50

50

--

Front Axle Assembly at Dharwar

Nos. (b)

50000

--

--

Finished Machined Crankshaft (Chakan)

Nos.

300000

241500

108074

Front Axle Assembly and Components at Chakan

Nos.

300000

219600

72234

Transmission Parts

Nos.

3000000

2041000

1496568

Seal Rings, Clamps and Hubs 

Nos.

50000

7000

--

Rocker Arm Assembly

Nos.

100000

--

--

Bonnets and Key Shaft

Nos.

50000

--

--

Steel Forgings at Baramati

MT

48000

47250

2701 (d)

Machined Components at Baramati

Nos.

120000

12000

5852

Ring Rolling

MT

45000

40500

203

 

NOTE:

 

(a) Annual Capacity on maximum utilisation basis.

 

(b) Under Registration with Government Authority.

 

(c) 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 has, 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.

 

(d) Includes captive consumption 47285 M.T. (2008 - 2009: 54263 M.T.) and Baramati 42 M.T.

 

 

 

GENERAL INFORMATION

 

Customers :

Wholesalers

 

·         Meritor Automotive, USA

·         Dana Corporation, USA

·         Mercedes Benz, Germany

·         New Holland Ford, Europe

·         Mitsubishi Motor Corporation, Japan

·         Volvo Trucks, Sweden

·         Lister-Petter, Europe

·         Dirona, Mexico

·         Isuzu, Japan

·         Macimex, Mexico

·         Kirloskar Group

·         Bajaj Auto Limited

·         Maruti Udyog Limited

·         Premier Automobiles Limited

·         Eicher India Limited

·         Larsen and Toubro Limited

·         Daewoo Motors

·         Simpsons Engines

·         Hindustan Earthmoving Equipment

·         Tata Engineering and Locomotive Company Limited

·         Mahindra and Mahindra Limited

·         Ashok Leyland Limited

·         Bharat Earth Movers Limited

·         Greaves Limited

·         Swaraj Mazda

·         Escorts Limited

 

 

No. of Employees :

3000 (Approximately)

 

 

Bankers :

·         Bank of India, Pune

Branch, Maharashtra, India

 

·         Bank of Maharashtra,

“Lokmangal”, 1501 Shivajinagar (Head Office), Pune – 411 005, Maharashtra, India

 

·         ANZ Grindlays Bank PLC, Vereinigtes Konigreich

·         Bank of Baroda

·         Canara Bank

·         State Bank of India

·         HDFC Bank Limited

·         ICICI Bank Limited

·         Citibank N A

·         Standard Chartered Bank

·         ABN Amro Bank NV

·         Axis Bank Limited

·         Caylon Bank

·         Corporate and Investment Bank

 

 

Facilities :

Secured Loans :

 

31.03.2010

Rs. in Millions

31.03.2009

Rs. In Millions

Debentures :

250011.95 % Redeemable secured Non-Convertible Debentures (2009-2017) Sixteenth series of Rs.1000000/- each For Security.

3500 (--) 10.75% Redeemable secured Non-Convertible Debentures (2009-2015) Seventeenth series of Rs.1000000/- each For Security

 

2500.000

 

 

 

3500.000

 

2500.000

 

 

 

--

Foreign Currency Term Loans :

From Bank of Baroda, London

(Charge satisfied)

From Bank of India, London

From Calyon, Singapore

From Standard Chartered Bank

(Charge satisfied)

 

--

 

336.820

2245.500

--

 

 

253.600

 

507.200

2536.000

811.520

Others :

From Banks, against hypothecation of stocks of Semi finished and Finished goods, raw materials, Finished dies and die blocks, Work-in-Progress, Consumable stores and spares, Book Debts etc.

 

Cash Credit

Preshipment Packing Credit-Foreign Currency

Preshipment Packing Credit-Rupee Interest accrued and due on above

 

 

--

 

 

 

 

 

 

108.800

530.260

 

--

0.010

 

--

 

 

 

 

 

 

197.220

328.820

 

1571.950

0.280

 

 

 

Total

9221.390

 

8706.590

 

 

Unsecured Loans :

31.03.2010

Rs. in Millions

31.03.2009

Rs. in Millions

 

 

 

Foreign Currency Convertible Bonds (FCCBs)

 

 

0.5% Tranche 1 FCCBs, outstanding U.S. $ 43.5 Million 

1953.580

2206.320

0.5% Tranche 2 FCCBs, outstanding U.S. $ 60.0 Million

2694.600

3043.200

 

0% Tranche A FCCBs, outstanding U.S. $ 40.0 Million

1796.400

2028.800

0% Tranche B FCCBs, outstanding U.S. $ 39.9 Million

1791.910

2023.730

 

 

 

Sales tax deferral liability under Government of

Maharashtra Package Scheme of Incentives

 

69.440

 

69.440

Fixed Deposits matured but unclaimed :

Short term borrowings by issue of" Commercial Papers" by the Company

(Maximum balance during the period Rs.1 000 million)

0.400

 

1000.000

0.570

 

--

 

 

 

 

Total

 

9306.330

9372.060

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Dalal and Shah

Chartered Accountants

 

 

International Auditors :

 

Name :

Mahajan and Aibara

Chartered Accountants

 

 

Membership :

·         Confederation of Indian Industry

 

 

Associates :

·         Kalyani Carpenter Special Steels Limited

Pune, Maharashtra, India

·         Technica U. K. Limited

·         ALSTOM Bharat Forge Power Limited

 

 

Subsidiaries :

·         Bharat Forge – Alstom Joint Venture at Mudra

·         Bharat Forge – NTPC Joint Venture at Solapur

 

·         CDP Bharat Forge GmbH

·         Bharat Forge Beteiligungs GmbH

·         Bharat Forge America Inc

·         Bharat Forge Holding GmbH

·         Bharat Forge Aluminiumtechnik GmbH and Company KG

·         Bharat Forge Aluminiumtechnik Verwaltungs GmbH

·         Bharat Forge Hong Kong Limited

·         Bharat Forge Kilsta AB

·         Bharat Forge Scottish Stampings Limited

·         FAW Bharat Forge (Changchun) Company Limited

·         Bharat Forge Daun GmbH

·         BF New Technologies GmbH

·         BF-NTPC Energy Systems Limited

·         Kalyani Alstom Power Limited

 

 

CAPITAL STRUCTURE

 

AS ON 31.03.2010

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

300000000

Equity Shares

Rs.2/- each

Rs.600.000 millions

43000000

Cumulative Preference Shares

Rs.10/- each

Rs.430.000 millions

2000000

Unclassified Shares

Rs.10/- each

Rs.20.000 millions

 

 

 

 

 

Total

 

Rs.1050.000 millions

 

Issued Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

222828621

Equity Shares (See Note A and B below)

Rs.2/- each

Rs.445.660 millions

 

 

 

 

 

Subscribed Capital :

No. of Shares

Type

Value

Amount

222652271

Equity Shares of Rs.2/- each fully paid

Rs.2/- each

Rs.445.310 millions

172840

Add: Forfeited Equity Shares (amount paid up)

 

Rs.0.090 million

 

Total

 

Rs.445.400 millions

 

NOTES: OF THE ABOVE SHARES

 

A Prior to Sub-division of Share Capital:

 

(i)                   47600 Equity Shares of Rs.10/- each were issued as fully paid up for consideration other than cash, pursuant to a contract.

 

(ii)                 8682500 Equity Shares of Rs.10/- each were issued as fully paid Bonus Shares by way of capitalisation of Share Premium Account and Reserves.

 

 

(iii)                1568600 Equity Shares of Rs.10/- each were issued at a premium of Rs.186.93 per share, under Senior Executives Stock Cum Share Option Scheme.

 

(iv)                The Company had issued 3636500 Equity Shares of Rs.10/- each (later sub-divided into 18182 500 Equity Shares of Rs2/- each) in April and May, 2005 represented by 3636500 Global Depository Receipts (GDRs) (on sub-division 18182 500 GDRs) evidencing "Master GDR Certificates" at a price of U.S.$ 27.50 per GDR (including premium). GDRs outstanding at the close of the year are 9 200. The Funds raised have been utilised towards the object of the issue.

 

(v)                  The Company had also issued Foreign Currency Convertible Bonds aggregating U.S.J 199.90 million optionally convertible at an initial price specified in offering circular (see note 18). 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. Outstanding Bonds at the close of the year aggregated Rs.8236.49 million of which Bonds aggregating U.S.$ 1.25 million were converted on April 09,2010 and Bonds aggregating U.S.$ 102.25 million were redeemed on April 20,2010.

 

 

B Subsequent to Sub-division of the Equity Share Capital:

 

(i)                   2 340 Equity Shares of Rs.2/- each out of the previous issue of Equity Shares on a Right basis together with 234 detachable warrants entitled to subscription of 1170 Equity Shares of Rs.2/- each, have been kept in abeyance pending adjudication of title to the pre right holding.

 

 

C Since the close of the year:

 

(ii)                 142045 Equity Shares were issued and allotted on April 09,2010 at a premium of Rs.382.12 per share on conversion of U.S.$ 1250 000 0.50% Foreign Currency Convertible Bonds (FCCBs) Tranche-2 in terms of Offering Circular dated 15th April, 2005.

 

(iii)                The Company issued and allotted 10000000 Equity Shares of Rs.2/- each at a price of Rs.272/- per share aggregating to Rs.2720 million on 28th April, 2010 simultaneous with the issue of 1760 10.75% Non Convertible Debentures (NCDs) of a face value of Rs.1000000/- at par, together with 6 500 000 warrants at a price of Rs.2/- each entitling the holder of each warrant to subscribe for 1 equity share of Rs.2/- each at a price of Rs.272/- at any time within 3 years from the date of allotment. The above securities were subscribed and allotted to Qualified Institutional Buyers on 28th April, 2010.

 

As on 26.07.2010

 

Authorised Capital : Rs.1050.000 Millions

 

Issued Capital, Subscribed & Paid-up Capital : Rs.465.679 Millions

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2010

31.03.2009

31.03.2008

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

445.400

445.400

445.400

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

14838.990

14423.880

14287.370

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

15284.390

14869.280

14732.770

LOAN FUNDS

 

 

 

1] Secured Loans

9221.390

8706.590

4615.810

2] Unsecured Loans

9306.330

9372.060

8259.050

TOTAL BORROWING

18527.720

18078.650

12874.860

DEFERRED TAX LIABILITIES

1064.990

1616.710

1182.480

 

 

 

 

TOTAL

34877.100

34564.640

28790.110

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

17761.090

18309.480

13174.420

Capital work-in-progress

1385.400

2322.810

4271.360

 

 

 

 

INVESTMENT

7209.470

3671.990

5936.720

TECHNICAL KNOW-NOW

0.000

 2.100

 4.180

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
3947.980
3642.420
3381.180

 

Sundry Debtors
3071.680
2601.070
3562.890

 

Cash & Bank Balances
4934.990
3667.020
1649.850

 

Other Current Assets
577.540
839.340
881.060

 

Loans & Advances
5583.840
6432.910
6785.020

Total Current Assets
18116.030
17182.760
16260.000

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors

3644.000
2253.430
6343.310

 

Other Current Liabilities
3387.830
1659.950
 

 

Provisions
2563.060
3011.120
4513.260

Total Current Liabilities
9594.890
6924.500
10856.570

Net Current Assets
8521.140
10258.260
5403.430

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

34877.100

34564.640

28790.110

 

 

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2010

31.03.2009

31.03.2008

 

SALES

 

 

 

 

 

Income

18563.980

20585.910

21964.960

 

 

Other Income

323.380

476.740

884.040

 

 

TOTAL                                     (A)

18887.360

21062.650

22849.000

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Manufacturing and Other Expenses

15435.800

17991.560

17793.280

 

 

TOTAL                                     (B)

15435.800

17991.560

17793.280

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

3451.560

3071.090

5055.720

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

0.000

0.000

0.000

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

3451.552

3071.090

5055.720

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

1644.390

1494.440

1085.930

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

1087.170

1576.650

3969.790

 

 

 

 

 

Less

TAX                                                                  (I)

536.710

543.800

1233.900

 

 

 

 

 

 

PROFIT AFTER TAX (G-I)                                  (J)

1270.460

1032.850

2735.890

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

6167.510

5570.290

4134.470

 

 

 

 

 

 

Excess/ (Short) Provision for Taxation and Tax Payments

0.430

(29.040)

0.000

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Debenture Redemption Reserve

206.220

26.100

0.000

 

 

General Reserve

127.500

120.000

280.000

 

 

Capital Redemption Reserve Account

0.000

0.000

100.000

 

 

Proposed Dividend

232.790

222.650

779.280

 

 

Tax on Proposed Dividend

38.660

37.840

132.440

 

 

Dividend on Preference Shares

0.000

0.000

7.140

 

 

Tax on Above Dividend

0.000

0.000

1.210

 

BALANCE CARRIED TO THE B/S

6833.230

6167.510

5570.290

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

FOB Value

7039.960

9883.000

9501.630

 

TOTAL EARNINGS

7039.960

9883.000

9501.630

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials and component for manufacturing

319.980

226.140

369.790

 

 

Die, block, Die Steel, Tool steel, and spares

338.810

699.070

615.440

 

 

Capital Goods

218.670

1442.850

1626.710

 

TOTAL IMPORTS

877.460

2368.060

2611.940

 

 

 

 

 

 

Earnings Per Share (Rs.)

5.71

4.51

12.25

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2010

30.09.2010

31.12.2010

Type

1st Quarter

2nd Quarter

3rd Quarter

Net Sales

6300.900

7186.800

7769.600

Total Expenditure

4756.000

5445.700

5883.600

PBIDT (Excl OI)

1544.900

1741.100

1886.000

Other Income

101.400

85.800

125.600

Operating Profit

1646.30

1826.900

2011.600

Interest

299.300

319.700

301.400

Exceptional Items

0.000

0.000

0.000

PBDT

1347.000

1507.200

1710.200

Depreciation

468.200

489.900

496.200

Profit Before Tax

878.800

1017.300

1214.000

Tax

284.500

335.900

387.900

Provisions and contingencies

0.000

0.000

0.000

Profit After Tax

594.300

681.400

826.100

Extraordinary Items

0.000

0.000

0.000

Prior Period Expenses

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

Net Profit

594.300

681.400

826.100

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2010

31.03.2009

31.03.2008

PAT / Total Income

(%)
6.73
4.90

11.97

 

 
 
 

 

Net Profit Margin

(PBT/Sales)

(%)
5.85
7.66

18.07

 

 
 
 

 

Return on Total Assets

(PBT/Total Assets}

(%)
3.03
4.44

13.49

 

 
 
 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.07
0.11

0.27

 

 
 
 

 

Debt Equity Ratio

(Total Liability/Networth)

 
1.84
1.68

1.61

 

 
 
 

 

Current Ratio

(Current Asset/Current Liability)

 
1.88
2.48

1.50

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

HISTORY:

 

Subject is a wing of the Kalyani group of companies. The Company was incorporated in June 1961 and promoted by Neelkanth A Kalyani. Subject's principal activities are to manufacture and sell closed and open die forgings, machined components and aggregates. The Company operates in two segments namely Steel Forging and General Engineering. The products of the Company include front axle assembly and components, general engineering equipment, hydraulic and mechanical presses, bandsaw machines for cutting metallic rounds, couplings and material handling equipment. The subject caters to the medium and heavy commercial vehicle segments. The manufacturing plants are located at Pune, Satara and Jalgaon districts of Maharashtra. The Company's operations are carried out through its German subsidiary, Carl Dan Peddinghus GmbH. During the year 1982, the Balchandra Investment Private Limited became a wholly owned subsidiary of the Company. In 1983, an agreement was concluded with Tokyo, Drop Forging Company Limited of Japan for technology upgradation, cost optimisation and quality improvements in the Company's forging unit and an agreement was made with Maharashtra Electronics Corporation Limited (MELTRON) to establish a joint venture to manufacture colour T.V. sets. Forge Investment Limited and Mundhwa Investment Limited became the subsidiaries of Balchandra investment during January of the year 1984. To obtain technology and know-how for the manufacture of couplings, the Company entered into a collaboration agreement with Torsiflex Limited, U.K in the year 1985.

 

During the year 1986, the registration was obtained for the manufacture of assemblies, components, spares, and accessories for metallurgical machinery, size reduction and crushing equipment, conveying equipment and size separation units with a total capacity of 1,200 tonnes per annum at Vaduth, Satara. In 1989, a joint venture under the name of Kalyani Sharp India Limited (KSIL) was set up for the manufacture of Televisions and VCRs. The Financial Services Division originated for investment in various fund-based areas in 1992, during the year, it diversified its portfolio into real estate development. In the year 1994, Starflower Investment and Finance Limited and Chakrapushpa Investment and Finance Limited were ceased to be subsidiaries of the Company. Subject had entered into a technical know-how and assistance agreement in the year 1995 with the Metalart Corporation, Japan for the manufacture of small precision forgings. The company has diversified its financial services division into production of wheel rims in the year 1998. Subject has demerged its Investment Division and Wind Mills Division in the year of 2000. Bharat Forge signed a contract in the year 2002 with Dana Corporation's Spincer Europe Limited for the supply of forgings.

 

The company secured the second Largest Customer in China during 2003. Guangxi Yuchai Machinery Company. The second Auto Works among the largest Auto companies in China, which was a stepping-stone for acquiring a large size of the Chinese Markets. The company emerged as world's second largest forging company with the acquisition of Carl Dan Peddinghus GmbH and Company KG (CDP) of Germany in November 21, 2003. Subject received `outstanding organisation' award for quality from the National Institution for Quality and Reliability in 2005. The company acquired Imatra Kilsta AB, Sweden and Scottish Stampings, Scotland. Subject has signed a Joint Venture contract in the year 2005 with FAW Corporation for its forging business and in the same year the company entered in JV contract with FAW Corporation, China. Through its wholly owned subsidiary, Bharat Forge Beteiligungs GmbH, Germany, the company acquired Imatra Kilsta AB, Sweden along with its wholly owned subsidiary, Scottish Stampings Limited, Scotland (together called Imatra Forging Group) on September 21, 2005, which are now renamed as Bharat Forge Kilsta AB (BF Kilsta) and Bharat Forge Scottish Stampings Limited, respectively. The company also acquired Federal Forge now known as Bharat Forge America Inc. Provided subject with a manufacturing presence in USA - one of its largest markets. Subject has embarked on setting up of a Centre for Advanced Manufacturing at Baramati in Maharashtra along with machining for such high-end forged components. In addition, as on March 2008, the company is also setting up an open die-forging unit at its existing facilities in Mundhwa. The total estimated cost of these projects is Rs.3.5 billion. As on February 2008, Bharat Forge signed a memorandum of understanding (MoU) with the largest power generation company, NTPC to set up a joint venture (JV) company for its foray into the capital goods sector. Same month of the same year, the company inked a MoU with the West Bengal Government to set up a one million-ton per annum steel plant in the State. The company is planning to invest Rs.65 billion through Kalyani Steel, the Group Company. In the same year and in same month the company inked a MoU with the West Bengal Government to set up a one million-ton per annum steel plant in the State and planning to invest Rs.65 billion through Kalyani Steel, the Group Company. The project involves a captive Rs.20 billion (out of the total investment) 500-MW power plant besides a downstream unit. In March 2008, subject has signed MoU with Maharashtra government for setting up a centre for advanced manufacturing at Baramati near Pune. In April 2008, the company entering into the French automotive sector with help of acquisition of 89% stake in French forgings company Groupe Sifcor (Society of Industrial and Financial Courcelles). In May of the year 2008, Bharat Forge plans to unlock the value of its overseas assets by transferring them to a holding company and then listing it.

 

 

MANAGEMENT DISCUSSION AND ANALYSIS:

 

THE EXTERNAL ENVIRONMENT

 

In the aftermath of the 'sub-prime' led global financial crisis in 2008, economies across the world went into a tailspin. Chart A shows how developed economies like the US, UK and the European Union witnessed contraction

in GDP from Q3, 2008. With such sharp de-growth, global demand for industrial and engineering products crashed. This trend continued through most of 2009.

 

Towards the end of 2009 and Q1, 2010, there were some positive signs. Global financial markets witnessed a degree of stabilisation. With two successive quarters of positive growth from Q4, 2009, the US seems to have come out of recession. Not so the Euro zone and the UK, which continue to witness very low or negative growth. Moreover, the Greek debt crisis has created severe uncertainties in Western Europe, and has put the euro under significant strain.

 

The contrast betv/een the developed economies and the emerging Asian giants such as China and India could not be greater. Chart B shows that after three quarters of reduced growth, China's economy grew steadily from Q2, 2009, to record a GDP growth of 8.7% for 2009. It did even better in Q1, 2010 by recording 11.9% GDP growth. India, too, recovered from a slight slump and has grown by 7.4% for 2009-10. It would seem that these economies are on their way to attaining their higher growth trajectories of the pre 'Lehman collapse' days.

 

 

PERFORMANCE SUMMARY

 

As a global major in the forging industry that caters to markets across the world through its production facilities in Europe, Asia and America, the business of Bharat Forge ('BFL' or 'the Company') was significantly affected by the adverse global economic developments. The Company's financial performance for 2009-10, therefore, reflects the sharp demand downturn. Given below are the performance highlights of the Company as a consolidated entity during 2009-10 (or FY2010).

 

 

Key Consolidated Highlights FY 2010

 

·         Sales decreased by 30% from Rs.47.75 bn in FY2009 to Rs.33.28 bn in FY2010

·         Total income decreased by 30% from Rs.48.43 bn in FY2009 to Rs.33.79 bn in FY2010

·         Earnings before interest, taxes, depreciation and amortisation (EBITDA) were Rs.3.9 bn in FY2010. The EBITDA margin was 11.5%

·         Profit before taxes (PBT) before exceptional items was Rs.141.9 million

·         Strong fundamental performance in the standalone business

·         Restructuring of overseas operations completed, resulting in a one-time net cost of Rs.742 million

·         FCCB of US$131.5 million repaid

·         Successful fund raising via QIP of US$ 140 million including warrants

 

Over the last decade, Company had adopted a growth strategy, which was primarily derisked in terms of geography and sectors. The crux of this strategy was that, under most circumstances, market downturns in some geographical and sectoral areas would be surmounted by upswings in others. Despite having this de-risked business model in place, the Company's business performance was adversely affected in FY2010 due to the unprecedented downturn across all global markets after the financial crisis that began in September 2008.

 

While performance was affected in FY2010, Company confronted these adversities by re-calibrating its business strategy and reorganizing internally to best overcome the current situation and further enhance the Company's potential to reap benefits from the next round of global growth.

 

On the marketing front, Company continued to increase its efforts to increase its market size, scope and penetration by:

 

·         Focusing on new customers, new markets in terms of geographies and new product applications with thrust on non-auto sectors.

·         Increasing market share of existing businesses.

 

In operations, the Company embarked on rapidly restructuring its internal processes and systems by laying emphasis on:

 

·         Cost reduction and rightsizing of all operations to reduce breakeven levels for plants, so that they are calibrated to generate profits, even when operating at lower levels of capacity utilisation.

·         Generating more cash from the system and streamlining working capital.

 

On the market front, there was a concerted effort at entering newer geographies. Company was successful in winning new orders from customers in Japan, Brazil and Russia for automotive and non-automotive applications. Within India, the Company has made progress in enhancing its presence in the non-automotive field by developing critical products for key growth sectors — thus providing an indigenous supply source for products that were previously imported.

 

Regarding operations, there have been focused efforts on cost reductions and lean initiatives. The cost reduction efforts included rationalisation of production equipments to optimise their utilisation, which helped reduce costs such as fuel, and electricity consumption. Efforts were also undertaken towards rationalization of.manpower and process improvements. In addition, a separate team was created to promote lean management practices in the Company. The team focuses on streamlining the movement of material and utilisation of resources at the plant. This has helped the Company to manage inventory better and increase overall productivity.

 

These initiatives have borne fruit. There has been a steady improvement in the performance of the Indian business, as reflected in the stand-alone financials of the Company.

 

 

STANDALONE BUSINESS PERFORMANCE: 2009-10

 

Company’s standalone business has a strong focus on the commercial vehicles (CV) sector for the Indian market as well as the US and Europe through exports. Globally, the CV sector went into a tail-spin from October 2008, and witnessed a volume decline of more than 50% within a short span of time.

 

The Indian automotive market recovered swiftly from the lows of October-December 2008 on the back of pick up

in economic activity across the board, benign interest rates and sops provided by the Indian government. The industry registered sequential quarterly growth across all segments and recorded yearon-year growth of 29%. Company’s quarterly performance in FY2010 mirrored the recovery in the Indian automotive markets. The charts below depict a steady quarter-on-quarter improvement in all key parameters for the standalone operations.

 

 

OVERSEAS SUBSIDIARIES:

 

Company has a large part of its overseas operations based in Europe and given the poor demand conditions; the focus during the year was on restructuring operations and lowering the break-even levels.

 

Comprehensive cost reduction measures were undertaken across the European and American operations, which included significant reduction in manpower. In fact, manpower at the European operations have been reduced, which has cost the Company approximately Rs.742 million in redundancy payouts. With this onetime exercise, these facilities are now tuned to break-even at much lower capacity utilisation levels and are well positioned to leverage opportunities when markets revive.

 

Company rationalised its international facilities by successfully closing down its operations in Scotland, which was operating at sub optimal utilization levels. The equipments have been transferred to the facilities in Sweden.

 

On the marketing front, notable achievements included the addition of new customers in China outside the FAW group (BFL's joint venture partner) and new product development for passenger vehicles in Germany.

 

 

OUTLOOK:

 

FY2010 was a very challenging year. In light of the slowdown, there has been a focus on operations restructuring and optimal utilisation of machinery in India and at the subsidiaries. Subject as a company is structurally better equipped to tackle the downturn even if it were to continue for a prolonged period.

 

The Company realises that there will be some time before overseas companies see a revival. It, however, believes in the infrastructure led-growth of India; and it is well positioned to leverage opportunities in the Indian market, so that India operations drive growth in the near term. The ramp up of non-automotive facilities is well on the way. The capital goods business is fairly insulated from market vagaries and the commercial vehicles segment in India, too, seems to be out of its demand slump.

 

Globally, many companies could be in financial distress. This may open up further opportunities for strong industry leaders like company to increase its market share with established relationships with OEMs. When the revival comes, strong companies like company, which have technology, scale, global reach, capability and cost structure, will have opportunities to consolidate its global leadership position.

 

With a strong India presence and lean overseas subsidiaries, company is cautiously optimistic about its prospects in FY2011.

 

 

PERFORMANCE OF THE COMPANY:

 

During the year, Exports turnover of the Company was Rs.7109 million, decrease of 29% over previous year (Rs.10 024 million).

 

Over the review period, major global economies continued to face challenges on various fronts and federal governments introduced measures to revive economic activity across sectors. The Company with significant exposure to the overseas automobile markets through exports and overseas operations was adversely impacted. Capacities of the overseas operations were severely underutilized during the year resulting in poor performance on many parameters. The Indian automotive industry recovered swiftly and posted quarter on quarter improvements during the year. This helped the company in posting reasonable results despite the weakness in export markets.

 

The Company has been able to successfully develop and validate many new programs. During the year, new business awards have been achieved on both the auto as well as the non-auto business fronts.

 

 

SUBSIDIARIES:

 

The Company has 14 subsidiaries of which 12 are overseas and 2 are in India. A summary of their performance is given elsewhere in the Annual Report.

 

In view of the unprecedented downturn in the automotive sectors across the globe, during year 2009-10, the Company has carried the process of restructuring and rightsizing the operations of its wholly owned subsidiaries to adopt for lower market volumes. The Company has incurred substantial cost for such rightsizing exercise which has affected the performance of the Company on consolidated basis. The primary objective behind such restructuring and rightsizing is to achieve a lower 'breakeven threshold' and thus achieve profitability in Company's Subsidiaries at lower capacity utilizations.

 

As a part of such restructuring programme, operations and assets of Bharat Forge Scottish Stampings Limited (BFSSL), subsidiary of the Company active in the European markets, are being transferred to other group companies in Bharat Forge Group. Hence, the accounts of BFSSL have been prepared not under going concern.

 

The auditors of Bharat Forge America Inc. (BFA), subsidiary of the Company, active in the North American markets, have, without qualifying their reports, expressed a possibility about BFA's inability to continue as going concern due to market conditions in North America. BFA has implemented various measures to adapt itself to lower volumes, which include a significant headcount reduction, a very tight control on costs, development of new products and an efficient working capital management. It is expected that these steps, along with the support provided by the Company would enable BFA to survive the present downturn. Hence, the accounts of BFA have been prepared on the 'going concern' basis.

 

A significant portion of the consolidated revenues are generated by the subsidiary companies. Detailed analysis of the working of the subsidiary companies appears in the Management Discussion and Analysis.

 

 

SUBSIDIARY COMPANIES ACCOUNTS:

 

The Company has received approvals of the Central Government under Section 212(8) of the Companies Act, 1956, vide their letter Nos.47/72/2010 – CL – III dated April 8, 2010 and 47/72/2010 – CL - III dated April 22, 2010 which exempts the Company from attaching to the Balance Sheet, the copies of the Balance Sheets, Profi t 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:

 

i) CDP Bharat Forge GmbH, Germany,

ii) Bharat Forge Holding GmbH, Germany

iii) Bharat Forge Aluminiumtechnik GmbH and Company K.G., Germany

iv) Bharat Forge Aluminiumtechnik Verwaltungs GmbH and Company K.G., Germany

v) Bharat Forge Daun GmbH, Germany

vi) Bharat Forge America Inc., U.S.A.

vii) Bharat Forge Beteiligungs, GmbH, Germany

viii) Bharat Forge Kilsta AB, Sweden

ix) Bharat Forge Scottish Stampings Limited, Scotland

x) Bharat Forge Hong Kong Limited (Formerly, Lucrest Limited), Hong Kong

xi) FAW Bharat Forge (Changchun) Company Limited, China

xii) BF New Technologies GmbH, Germany

xiii) BF-NTPC Energy Systems Limited, India

xiv) Kalyani Alstom Power Limited, (w.e.f. February 5, 2010) India

 

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.

 

 

JOINT VENTURES:

 

A. JOINT VENTURE WITH NTPC:

 

The Company has incorporated a joint venture (JV) company, BF-NTPC Energy Systems Limited (BFNESL), with a 51% equity interest held by the Company and balance held by NTPC Limited for the manufacture of critical items of Balance of Plants and other equipment for which India still remains dependent on imports. BFNESL is finalizing product range which includes high pressure pumps, large castings and high pressure pipings for supercritical and ultra supercritical thermal power plants as well as nuclear power plants, oil and gas, petrochemicals, steel and mining sectors. The JV Company has acquired a 100 acre land at Solapur in Maharashtra, to set-up its first manufacturing facility. BFNESL plans to start ground activities by the third quarter of the current financial year.

 

 

B. JOINT VENTURE WITH ALSTOM:

 

The Company has set up two JV companies in partnership with ALSTOM Power Holdings S.A. for manufacturing sub-critical and supercritical thermal power plant equipment. The two JV companies named ALSTOM Bharat Forge Power Limited and Kalyani ALSTOM Power Limited will manufacture turbine and generators for power plants in the 300-800 MW range and auxiliaries like heat exchangers, condensers and deaeraters, respectively. They will have a total installed capacity of 5 000 MW of equipment per annum. Company holds 49% equity interest in ALSTOM Bharat Forge Power Limited, and 51% equity interest in Kalyani ALSTOM Power Limited. Their state-of-the-art manufacturing facilities are coming up on a 120 acre land within the SEZ adjacent to Mundra Port in Gujarat. The facilities are slated to become ready in phases beginning first quarter of 2012.

 

The JV companies have already started bidding for equipment opportunities in large supercritical power plants coming up in India.

 

 

C. JOINT VENTURE WITH AREVA:

 

The Company has entered into Preliminary Joint Venture and Shareholders’ Agreement with AREVA NP, France, to create a manufacturing facility for heavy forgings and castings for the power sector particularly Nuclear Power segment and other heavy industries in India. AREVA is a Worldwide leader in the nuclear power activities, including the design, manufacture and supply of nuclear power plants, components and fuel to customers all over the World.

 

Manufacture of non-automotive forgings, including for power sector applications, is a major growth area for the Company. In order to meet the strong energy needs in India and given the exciting opportunities emerging in the country’s nuclear power sector, Bharat Forge and AREVA are partnering in the JV. Availability of heavy forgings is a major constraint for global manufacturers of equipment in the energy sector. The JV would secure supply of heavy forgings, especially stainless steel forgings to the customers. Heavy forgings manufactured by the JV would primarily meet indigenous requirements of power generation sector, including manufacture of turbines, generator rotors, steel plant rolls etc. and also of new nuclear power plants in the country.

 

Bharat Forge and AREVA are presently evaluating various locations in India to set up the new facility. The JV will have a state-of-the-art 12000 Ton open die forging press with associated equipment and an integrated steel making facility.

 

 

CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF: (RS. IN MILLIONS)

 

Particulars

 

31.03.2010

31.03.2009

 

 

 

A. Sales Bills discounted of Which:

3799.810

4575.130

Bills since realised

904.160

1238.090

Matured, Overdue and outstanding since close of the period

--

--

 

 

 

B. Guarantees given by the Company on behalf of other companies:

 

 

Balance outstanding

570.090

735.280

(Maximum amount)

(830.940)

(1520.330)

 

 

 

C. Claims against the Company not acknowledged as Debts- to the extent ascertained

147.490

73.380

 

 

 

D. Disputed Income Tax matters

104.320

104.320

 

 

 

E. Excise/Service Tax Demands - matters under dispute

281.850

277.530

 

 

 

F. Customs demands - matters under dispute

322.150

3179.300

 

 

AUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31.03.2011

Rs. In Millions

Particulars

Quarter ended 31.03.2011 (Unaudited)

Year ended 31.03.2011 (Unaudited)

a) Net Sales / Income from Operations

 

 

- Within India

4783.200

17923.000

- Outside India

3581.700

12195.100

Total Sales

8364.900

30118.100

Less: Excise Duty

403.200

1528.900

Total Net Sales

7961.700

28589.200

b) Other Operating Income

254.500

884.300

Total Net Sales / Income from Operations

8216.200

29473.500

Expenditure

 

 

(a) (Increase)/decrease in Stock in Trade

(68.900)

(358.300)

(b) Consumption of Raw Materials

3721.600

13661.600

(c) Purchase of traded goods

-

-

(d) Employees Cost

548.800

2012.800

(e) Depreciation

478.300

1932.600

(f) Manufacturing Expenses

1386.100

4918.800

(g) Other

639.500

2077.500

Total Expenditure

6705.400

24245.000

Profit / (Loss) From Operations before other Income Interest & Exceptional Items

1510.800

5228.500

Other Income

149.200

462.000

Profit/(Loss) before Interest and Exceptional items

1660.000

5690.500

Interest

294.000

1214.400

Profit / (Loss) after interest before Exceptional items

1366.000

4476.100

Exceptional Items

 

 

- Exchange rate difference – gain/(loss)

-

-

- Net restructuring and redundancy cost and customer claim

-

-

Profit / (Loss) From Ordinary activities before Tax

1366.000

4476.100

Tax Expenses 

362.100

1370.400

Net Profit/(Loss) From Ordinary activities after Tax

1003.900

3105.700

Extraordinary Items

-

-

Net Profit/(Loss) for the period

1003.900

3105.700

Share of profit in associate companies

-

-

Less: Minority Interest

-

-

Income attributable to the consolidated group

-

-

Paid Up Equity Share Capital ( Face Value of the share Rs.10/- each )

465.700

465.700

Paid up debt capital of the company*

-

7760.000

Reserves (Excluding Revaluation Reserves)

-

19488.100

Debenture redemption reserve

-

631.700

-Basic earning per share of Rs. 2/- each before and after extraordinary items

4.32

13.39

-Diluted earning per share of Rs. 2/- each before and after extraordinary items

4.23

13.11

Debt equity ratio**

-

0.049

Debt service coverage ratio***

-

0.104

Interest service coverage ratio***

-

0.628

Total Public Share Holding

 

 

- Number of Shares

134882946

134882946

- Percentage of shareholding

57.94%

57.94%

Promoters and Promoter group share holding

 

 

a) Pledged / Encumbered

 

- Number of Shares

0.00

0.00

- Percentage of share (as a % of the total shareholding of promoter and promoter group)

0.00

0.00

- Percentage of shares(as a % of the total share capital of the company)

0.00

0.00

b) Non-encumbered

 

- Number of Shares

97902170

97902170

- Percentage of Share (as a % of the total shareholding of promoter and promoter group)

100.00%

100.00%

 - Percentage of Share (as a % of the total share capital of the company)

42.06%

42.06%

 

Notes of financial results:

1 Disclosure of assets and liabilities as per clause 41(I)(ea) of the listing agreement for the year ended 31.03.2011.

Rs. In Millions

Particulars

31.03.2011 (Audited)

Shareholders Funds:

 

a) Capital

465.700

b) Reserves and Surplus

19488.100

Sub Total

19953.800

Loan Funds

14734.000

Minority interest

-

Foreign currency monetary item translation difference account (FCMITDA)

-

Deferred tax adjustments (net)

1556.200

Total

36244.000

 

 

Fixed Assets

19243.50

Goodwill arising on capital consolidation

--

Investments

9198.200

Current assets, loans and advances

 

a) Inventories

4684.300

b) Sundry Creditors

4197.000

c) Cash and Bank Balances

1465.800

d) Other Current assets

995.300

e) Loans and Advances

7525.000

Sub Total

18867.400

Less: Current Liabilities and Provisions

 

a) Liabilities

6908.000

b) Provisions

4157.100

Sub Total

11065.100

Net Current Assets

7802.300

Miscellaneous Expenditure (to the extent not written off or adjusted)

--

Profit and loss account

--

Total

36244.000

 

2 The above results were reviewed by the Audit Committee and taken on record by the Board of Directors of the Company at its meeting held on 24.05.2011

 

3 Directors recommend a Dividend of Rs. 3.50 Per Equity share (175%), subject to approval of shareholders.

 

4 Company had issued Zero Coupon Foreign Currency Convertible Bonds ( FCCB) in two tranches (Viz. Tranche A and Tranche B) amounting to USD 40.000 Millions and USD 39.900 Millions due 2012 and 2013 respectively optionally convertible at an initial price of Rs.604.03 and Rs.690.32 per share of Rs.2/- each respectively. Since the Fair value (i.e. preceding 6 months average of market price) of the Company's Equity shares is less than the Floor price in respect of outstanding Tranches (A and B) Bonds , the option embedded in the said Bonds to subscribe to Equity shares is, at present, antidilutive.

 

5 In order to recognise the impact of fluctuation in foreign currency rates arising out of instruments acquired to hedge highly probable forecast transaction, in appropriate accounting periods, the company applies the principles of recognition set out in the Accounting standard 30- Financial Instruments - Recognition and Measurement (AS-30) as suggested by the Institute of Chartered Accountants of ndia. Accordingly, the unrealised gain/ (loss) (net) consequent to foreign currency fluctuations, in respect of effective hedging instruments , represented by simple forward covers, to hedge future exports , are carried as a Hedging Reserve, and ultimately set off n the profit and loss account when the underlying transaction arises. he amount outstanding in the Hedge Reserve at the close of the year is Rs.13.900 millions.

 

6 During the quarter, one investor complaint was received and redressed. There were no investor complaints pending for redressal as at he commencement and end of the quarter.

 

7 Previous year/ period's figures are regrouped wherever necessary.

 

8 During the period, two wholly owned subsidiary companies were formed viz. (i) BF Infrastructure Ventures Limited the apex holding company and (ii) BF Power Equipments Limited, the Power Equipment Holding Company.

 

9 The consolidated financial statements include results of all the subsidiaries of Bharat Forge Limited and their Subsidiaries, and Joint Ventures .The names, country of incorporation or residence, proportion of ownership interest and reporting dates are as under: Name of the company Country of Parent's ultimate Fin

 

Name of the company

 

Country of Incorporation

Parents ultimate holding as on 31.03.2011

Financial year ends on

Subsidiaries :

Germany

 

100%

12.31.2010

CDP Bharat Forge GmbH :-

and its wholly owned subsidiary

Germany

 

100% @

12.31.2010

i. Bharat Forge Daun GmbH

Germany

 

100% @

12.31.2010

ii. BF New Technologies GmbH

Germany

 

100% @

12.31.2010

iii. Bharat Forge Holding GmbH and its wholly owned subsidiary

Germany

 

100% @

12.31.2010

BF Aluminiumtechnik GmbH and Co KG :-

and its wholly owned subsidiary

Germany

 

100% @

12.31.2010

- BF Aluminiumtechnik Verwaltungs GmbH

Germany

 

100% @

12.31.2010

iv. Bharat Forge Betilingungs GmbH :-

and its wholly owned subsidiary

Germany

 

100% @

12.31.2010

i. Bharat Forge Kilsta A.B. Sweden and its wholly owned subsidiary

Sweden

100% @

12.31.2010

- Bharat Forge Scottish Stampings Limited

Scotland

100% @

12.31.2010

ii.Bharat Forge Hong Kong Limited and its Joint Venture subsidiary

Hong Kong

100% @

12.31.2010

- FAW Bharat Forge (Chnagchun) Co. Limited

China

52% @

12.31.2010

iii.Bharat Forge International Limited

UK

100%

#

Bharat Forge America Inc.

USA

100%

12.31.2010

BF Infrastructure Limited

India

100%

3.31.2011

BF Infrastructure Ventures Limited

India

100%

3.31.2011

BF Power Equipments Limited

India

100%

3.31.2011

Joint Venture Subsidiaries :

 

 

 

- Kalyani ALSTOM Power Limited

India

51%

3.31.2011

- BF NTPC Energy Systems Limited

India

51%

3.31.2011

Associate :

-Tecnica UK Limited

(shares held through subsidiary)

 

UK

 

30% @

 

12.31.2010

Joint Venture Companies:

ALSTOM Bharat Forge Power Limited

Impact Automotive Solutions Private Limited

 

India

India

 

49%

50%

 

3.31.2011

3.31.2011

 

@ held through subsidiaries.

# The Consolidated Results for the year ended 31.03.2011 does not include results of Bharat Forge International Limited, U.K., a subsidiary s the first financial year of this company is for a period of 15 months ending March 31,2012.

* Paid up Debt Capital represents Non-Convertible Debentures

** Debt to Equity : Net Debt/ Net Worth

( Net Debt : Secured Loan + Unsecured Loan - Cash and Bank - Current Investments )

( Net Worth : Equity Share Capital + Reserves and Surplus - Miscellaneous Expenditure to the extent not written off or adjusted - Foreign

Currency Translation Reserve)

*** Debt Service Coverage Ratio : EBDIT / ( Finance Charges + Principal Repayment during the year)

( EBDIT : Profit before Taxes + Finance Charges + Depreciation )

**** Interest Service Coverage Ratio : EBDIT / Finance Charges )

 

 

TRADE REFERENCE:

 

·         Dana Corporation

·         Volvo Trucks

·         Kirloskar Group

 

 

FIXED ASSETS

 

·         Land, Free hold

·         Land, lease hold

·         Buildings

·         Plant and Machinery

·         Railway sidings

·         Electrical installations

·         Factory equipments

·         Engineering instruments

·         Furniture and fittings

·         Office equipments

·         Vehicles and Aircrafts

·         Leased assets ( Plant and Machinery)

·         Leased assets (Power line)

  

 

WEBSITE DETAILS:

 

PROFILE:

 

Subject, the flagship company of the USD 2.4 billion Kalyani Group, manufactures various forged and machined components for the automotive and non-automotive sector.


Since commencement of operations in 1966, subject has achieved several milestones and is today among the largest and technologically most advanced manufacturer of Forged and Machined components. As one of India’s emerging multinationals, the company has manufacturing operations across 12 locations and 6 countries - 4 in India, 3 in Germany, one each in Sweden, Scotland, USA and 2 in China.


Our customers include the top five Passenger Car and top five Commercial Vehicle Manufacturers in the world. The list includes virtually every automotive OEM and Tier I companies.

 

Backed by a full service supply capability and dual-shore manufacturing model, Bharat Forge provides end-to-end solutions from product conceptualization to designing and finally manufacturing, testing and validation.

 

 

PRESS RELEASES:

 

Performance for the quarter and year ended

31.03.2011

 

Standalone topline of Rs 8220.000 millions and pat of Rs 1000.000

Millions for the quarter.

 

Key Highlights

• Indian operations register strong all round growth across sectors and Geographies and outperformed underlying

markets.

• Overseas Operations profitable.

• Strong momentum in the Non Auto business

 

Mumbai, 24.05.201 Bharat Forge Limited, the flagship company of the USD 2.5 billion Kalyani Group and a global provider of high performance, innovative, safety and critical components to automotive and industrial sectors, today announced its Q4 and FY2011 results.

 

The Indian operations registered strong performance across sectors and geographies during the year. Domestic revenues grew by 50.3% in FY2011 to Rs 17280.000 millions on continued momentum in the Indian automotive market while Exports grew by an impressive 72.6% to Rs 12190.000 millions on back of recovery of CV market in Europe and North America. For the quarter domestic and Export revenues registered growth of 34.5% and 63.6% respectively.

 

EBITDA % for the full year came in at 25.5% as compared to 24.9% in last year while PBT for the year at Rs 4480.000 millions was higher by 147.7% as compared to last year.

 

PAT for the quarter and Full year were Rs 1004.000 millions and Rs 3106.000 millions, a growth of 63.8 and 144.5% respectively.

 

The Overseas operations witnessed a strong revival in performance in CY10 in correlation with the increase in automobile production globally and also have benefited from the restructuring initiatives carried out in CY09. The overseas subsidiaries registered topline of Rs 21630.000 millions, YoY growth of 45.2%. EBITDA for the year was Rs 1040.000 millions as against negative EBITDA of 800.000 millions for CY09. The subsidiaries registered a profit of Rs 111.000 millions at the PBT level as against a loss of Rs 1881.000 millions in CY 2009.

 

The non auto business has become one of the major drivers of our business. In this financial year, it has become the single largest business segment for our Indian operations. We expect that the non automotive business will continue to be strong with tremendous traction from global clients and new order wins. Non Auto contribution to the standalone business has increased from 30% in FY2010 to 37% in 2011.

 

Commenting on the results, Mr. Baba N Kalyani, Chairman and Managing Director of Bharat Forge Limited, said: “FY 2011 saw the company come back on the growth path with strong momentum for the Indian operations within India and its Exports business and significant improvement in performance of the overseas subsidiaries”. “Despite some signs of softness in the domestic automotive market, we are quite confident of continuing the growth trajectory in the coming year on the back of strong global demand”, he added.

 

 

 

 

 

 

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.45.21

UK Pound

1

Rs.74.30

Euro

1

Rs.64.40

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

8

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

7

--RESERVES

1~10

8

--CREDIT LINES

1~10

7

--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

 

66

 

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

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

-

NB

                                       New Business

 

-

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.