MIRA
INFORM REPORT
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Report Date : |
12.07.2014 |
IDENTIFICATION DETAILS
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Name : |
BHARAT FORGE LIMITED |
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Registered
Office : |
Mundhwa, Pune Cantonment, Pune – 411036, |
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Country : |
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Financials (as on)
: |
31.03.2013 |
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Date of
Incorporation : |
19.06.1961 |
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Com. Reg. No.: |
11-012046 |
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Capital
Investment / Paid-up Capital : |
Rs.465.680 Millions |
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CIN No.: [Company Identification
No.] |
L25209PN1961PLC012046 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
PNEB0272E |
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Legal Form : |
A Public Limited Liability company. The company’s Share are Listed on
the Stock Exchange. |
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Line of Business
: |
The Company is engaged
in the manufacturing and selling of forged components. |
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No. of Employees
: |
Not Divulged |
RATING & COMMENTS
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MIRA’s Rating : |
A (66) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 92440000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well-established and a reputed company having fine track
record. Financial position of the company is 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 – March 31, 2014
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Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
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India |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
N E W S
The economy grew 4.7 %in 2013/14, marking a
second straight year of sub-5 % growth – the worst slowdown in more than a
quarter of a century. The data was below an official estimate of 4.9 % annual growth
and compared with 4.5 % in the last fiscal year. However, the current account
deficit narrowed sharply to $ 32.4 billion at 1.7 % of gross domestic product,
in 2013/14 from a record high of $ 98.8 billion or 4.7 %, the year before.A
sharp fall in gold imports due to restrictions on overseas purchases and muted
import of capital goods helped shrink the current account deficit.
Online retailer Flipkart has acquired fashion
portal Myntra as it prepares to battle with the rapidly expanding India arm of the
global e-commerce giant Amazon. The company raised $ 210 million from Russian
Investment firm DST Global which has also invested in companies like Facebook,
Twitter and Alibaba Group.
General Motors will start exporting vehicles
from its Talegaon plant near Pune in the second half of 2014. GM was one of the
few global carmakers that was using its India plant only for the domestic
market.
Google has overtaken Apple as the world’s top
brand in terms of value, according to global market research agency Millward
Brown. Google’s brand value shot up 40 % in a year to $ 158.84 billion. The top
10 of the 100 slots were dominated by US companies.
Infosys lost another heavy weight when B G
Srinivas, a board member put in his papers. He is the third CEO-hopeful to quit
after Chairman N R Narayana Murthy’s return to the company – Ashok Vemuri and V
Balakrishnan being the other two.While Vemuri went on to lead IGate,
Balakrishnan joined politics.
Naresh Goyal – promoted Jet Airways posted
biggest quarterly loss – Rs 2153.37 crore – in the three months ended March 31,
mainly because it has been offering discounts to passengers to fill planes.
William S Pinckney – Chairman and CEO of
Amway India was arrested by the Andhra Pradesh Police in connection with a
complaint against the direct selling firm. This is the second time that he has
been taken into custody. A year, ago the Kerala Police had arrested Pinckney
and two company directors on charges of financial irregularities.
China has told its state-owned enterprises to
sever links with American consulting firms after the United States charged five
Chinese military officers wih hacking US companies. China’s action which
targets consultancies like McKinsey & Co. and the Boston Consulting Group,
sterns from fears that the first are providing trade secrets to the US
governments.
India has emerged as a country with some of
the highest unregistered businesses in the world. Indonesia has the maximum
number of shadow businesses, says a study of 68 countries by Imperial College
Business School in London.
Pfizer has abandoned its attempt to buy
AstraZeneca for nearly $ 118 billion after the latter refused an offer of 55
pounds a share.
EXTERNAL AGENCY RATING
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Rating Agency Name |
ICRA |
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Rating |
Non-convertible debenture AA |
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Rating Explanation |
High degree of safety and very low credit
risk. |
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Date |
May 2014 |
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Rating Agency Name |
ICRA |
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Rating |
Commercial paper A1+ |
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Rating Explanation |
Very strong degree of safety and lowest
credit risk. |
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Date |
May 2014 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
INFORMATION DENIED
MANAGEMENT NON - CORPORATIVE (91-20-26702777)
LOCATIONS
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Registered Office/ Factory 1 : |
Mundhwa, Pune Cantonment, Pune – 411 036, Maharashtra, India |
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Tel. No.: |
91-20-26702777 / 26702476 / 26702544 |
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Fax No.: |
91-20-26822163 / 26822387 / 26820699 / 26824778 |
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E-Mail : |
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Website : |
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Area : |
5000 sq. ft. |
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Location : |
Owned |
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Factory 2 : |
Gat No. 635, Kuruli Village, Chakan, District Pune – 410 501,
Maharashtra, India |
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Factory 3 : |
Opposite Jarandeshwar Railway Station, Vadhuth, District Satara – 415
011, Maharashtra, India |
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Factory 4 : |
Kusumbe, Jalgaon-Ajantha Road, Jalgaon – 425 003, Maharashtra, India |
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Factory 5 : |
Tandulwadi and
Wanjarwadi, Taluka Baramati, District
Pune – 413 206, Maharashtra, India |
DIRECTORS
As on: 31.03.2013
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Name : |
Mr. Babasaheb Neelkanth Kalyani |
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Designation : |
Chairman and Managing Director |
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Qualification : |
B.E. (Mech.) (Hons.), M.S. (M.I.T.) |
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Date of Appointment : |
01.04.1972 |
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Name : |
Mr. G. K. Agarwal |
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Designation : |
Deputy Managing Director |
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Qualification : |
B.E. (Mech.), M.B.A. |
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Date of Appointment : |
1st November, 1976 |
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Name : |
Mr. S. M. Thakore |
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Designation : |
Director |
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Name : |
Mr. Sudhakar D. Kulkarni |
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Designation : |
Director |
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Name : |
Mr. Pratap G Pawar |
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Designation : |
Director |
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Name : |
Prof. Dr. Uwe Loos |
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Designation : |
Director |
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Name : |
Mr. Prakash Chandrashekhar Bhalerao |
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Designation : |
Executive Director |
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Qualification : |
B.E. (Elect.), M.B.A., D.T.M. |
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Date of Appointment : |
3rd March, 1987 |
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Name : |
Mrs. Lalita D Gupte |
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Designation : |
Director |
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Name : |
Mr. P. H. Ravikumar |
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Designation : |
ICICI Nominee Director |
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Name : |
Mr. Alan Spencer |
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Designation : |
Director |
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Name : |
Mr. Naresh Narad |
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Designation : |
Director |
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Name : |
Dr. T. Mukherjee |
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Designation : |
Director |
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Name : |
Mr. Amit B. Kalyani |
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Designation : |
Executive director |
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Name : |
Mr. B. P. Kalyani |
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Designation : |
Executive Director |
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Name : |
Mr. S. E. Tandale |
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Designation : |
Executive Director |
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Name : |
Mr. Sunil Chaturvedi |
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Designation : |
Executive Director |
KEY EXECUTIVES
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Name : |
Mr. Ajay Sharma |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on: 31.03.2014
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Category of
Shareholder |
Total No. of
Shares |
% of Total No. of
Shares |
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(A) Shareholding of Promoter and Promoter Group |
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808115 |
0.35 |
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108009805 |
46.40 |
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108817920 |
46.75 |
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Total shareholding of Promoter and Promoter Group (A) |
108817920 |
46.75 |
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(B) Public Shareholding |
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21648545 |
9.30 |
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7119135 |
3.06 |
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4910534 |
2.11 |
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37252231 |
16.00 |
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70930445 |
30.47 |
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19555096 |
8.40 |
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20179840 |
8.67 |
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11589494 |
4.98 |
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1712321 |
0.74 |
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590100 |
0.25 |
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1105640 |
0.47 |
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16581 |
0.01 |
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53036751 |
22.78 |
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Total Public shareholding (B) |
123967196 |
53.25 |
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Total (A)+(B) |
232785116 |
100.00 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
0 |
0.00 |
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0 |
0.00 |
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9200 |
0.00 |
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9200 |
0.00 |
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Total (A)+(B)+(C) |
232794316 |
0.00 |
BUSINESS DETAILS
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Line of Business : |
The Company is
engaged in the manufacturing and selling of forged components. |
GENERAL INFORMATION
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No. of Employees : |
Not Divulged |
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Bankers : |
Ø
Bank of India Ø
Bank of Baroda Ø
Bank of Maharashtra Ø
Canara Bank Ø
State Bank of India Ø
HDFC Bank Limited Ø
ICICI Bank Limited Ø
Axis Bank Limited Ø
Citibank N.A. Ø
Standard Chartered Bank Ø
The Royal Bank of Scotland N V Ø Credit Agricole
CIB |
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Facilities : |
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NOTE: LONG-TERM BORROWINGS (a) Debentures The Company has issued the following secured redeemable
non-convertible debentures (i) 2,500 -
11.95 % Redeemable secured non-convertible debentures (Sixteenth series) of
Rs. 1,000,000/- each redeemable at par in three equal annual installments on
January 5, 2015; on January 5, 2016; on January 5, 2017 respectively. Above debentures
are secured by: (i) First pari-passu mortgage in favour of the Trustees, of
all rights and interest on the Company’s immovable properties situated at Mundhwa,
Satara, Jalgaon and Chakan with negative lien on properties situated at
Jejuri and Baramati; and (ii) First pari-passu charge in favour of the
Trustees by way of hypothecation of movable properties, present and future
both such as all plant and machinery, equipments, tools, furniture and
fixtures etc., as described in Debenture Trust-cum-Mortgage Deed dated April
30, 2009. (ii) 1,760 -
10.75% Redeemable secured non-convertible debentures (Eighteenth series) of `
1,000,000/- each redeemable at par in three annual installments @ 35.00% on
April 28, 2014; @ 35.00% on April 28, 2015; @ 30.00% on April 28, 2016. Above debentures
are secured by: (i) First pari-passu mortgage in favour of Trustees, of all
rights and interest on the Company’s
immovable properties, present and future situated at Mundhwa, Chakan, Satara
and Jalgaon with negative lien on properties situated at Jejuri and Baramati
as described in schedule-I as per Debenture Trustcum- Mortgage Deed dated
June 28, 2010; and (ii) First pari-passu charge in favour of the Trustees on
moveable properties, present and future as described in Schedule-II as per
Debenture Trust-cum-Mortgage Deed dated June 28, 2010. (iii) 3,500 -
10.75% Redeemable secured non-convertible debentures (Seventeenth series) of
`1,000,000/- each redeemable at par in three installments @ 25.00% on March
22, 2014; @ 50.00% on September 22, 2014; @ 25.00% on March 22, 2015. Above debentures
are secured by: (i) First pari-passu mortgage in favour of the Trustees, of
all rights and interest on the Company’s immovable properties situated at
Mundhwa, Satara, Jalgaon and Chakan with negative lien on properties situated
at Jejuri and Baramati; and (ii) First pari-passu charge in favour of the
Trustees by way of hypothecation of movable properties, present and future
both such as, all plant and machinery, equipment, tools, furniture and
fixtures etc., as described in Debenture Trust - cum-Mortgage Deed dated
December 14, 2009. (b) Foreign currency term loans (i) From Bank of India, London Balance outstanding USD Nil (March 31, 2012: USD 2.50 Million) Secured by: (i)
First charge by way of hypothecation of the whole of the movable properties
including its movable plant and
machinery, machinery spares, tools and accessories and other movables, both
present and future, whether installed or not and whether now lying loose or
in cases or now lying or stored in or about or shall from time to time during
the continuance of the security be brought into or upon or be stored or be in
or about all the factories, premises and godowns situated at Mundhwa,
District Pune; Chakan, District Pune ; Vaduth, District Satara; Village
Kusumbe, District Jalgaon, all in the State of Maharashtra or wherever else
the same may be or be held by any party to the order of disposition or in the
course of transit or on high seas or on order, or delivery, howsoever and
wheresoever in the possession and either by way of substitution or addition
except specific movable plant and machinery consisting of Wind Energy Converter
of 600 K.V. 7 Nos. at Village Boposhi, District Satara, exclusively
hypothecated to Standard Chartered Bank, as described under the Deed of
Hypothecation dated March 17, 2005 and; (ii) Equitable mortgage by deposit of
title deeds of immovable properties situated at Village Mundhwa, Pune;
Village Vaduth, Taluka and District Satara ; Village Kusumbe Khurd, Taluka
and District Jalgaon and Village Chakan, Pune all in the State of
Maharashtra, together with all buildings and structures thereon and all plant
and machinery attached to the earth or permanently fastened to anything
attached to the earth, as described under Memorandum of Entry dated March 17,
2005. The loan was
repayable in 6 equal yearly installments starting from September 30, 2007,
along with interest of 3M LIBOR + 350 bps per annum. The Final installment
was paid during the year ended on March 31, 2013 (ii) From Credit
Agricole Corporate and Investment Bank, Singapore Balance
outstanding USD 35 Million (March 31, 2012: USD 50 Million) Secured by first
pari-passu charge over present and future movable fixed assets viz. plant and
machinery, computers, furnitures and fixtures, whether installed or not and
whether now lying loose or in cases or otherwise or being on or upon or at
any time, hereafter being on or upon about the premises and godowns at
Mundhwa, Pune; Village Kuruli, Chakan; Taluka Khed, District Pune; Village
Vaduth, Taluka and District Satara and at Baramati, Pune or anywhere
else. Repayable in 3 yearly
installments from the date of its origination, i.e. October 14, 2012, along
with interest of 6M Libor + 200 bps per annum. (iii) Foreign
currency term loans on syndicated basis Balance
outstanding USD 80 Million (March 31, 2012: USD 80 Million ) Repayable in 3
half yearly installments from date of its origination i.e. October 31, 2016,
along with interest of 6M Libor + 280 bps
per annum. (iv) Foreign
currency term loans on syndicated basis Balance
outstanding USD 40 Million (March 31, 2012: Nil) Repayable in 3
half yearly installments from the date of its origination i.e. October 31,
2016, along with interest of 6M Libor + 380 bps per annum. Rupee term loans From Axis Bank Balance
outstanding Nil (March 31, 2012: Rs.330.560 Million) Secured by: (i)
First pari-passu charge on the Company’s immovable properties, present and
future situated at Mundhwa, Chakan, Satara and Jalgaon with negative lien on
properties situated at Jejuri and Baramati; and (ii) First pari-passu charge
on moveable properties, present and future including land and building.
Repayable in 18 semiannual installments from date of its origination i.e.
March 20, 2012, along with interest of base rate + 200 bps per annum. (d) Foreign
currency convertible bonds (FCCB) The Company had
issued FCCB (Tranche B) of USD 39.90 Million, detailed in the table below, to
finance capital expenditure and global acquisitions. The said bonds are
optionally convertible into GDR/Equity shares to be exercised at any time
during the exercise period at a pre-determined initial price subject to
adjustments upon occurrence of certain events. In case there is non
conversion of FCCBs, the amount will be repaid in full. However, the Company
has option to redeem the balance of the above Bonds if such balance is less
than 10% in aggregate of principal amount of such tranche of bonds originally
issued in respect of each tranche, during the redemption exercise period in
the manner specified in the offering circular at a premium so as to provide a
predetermined yield to the Bondholders. The Company also
has the option to call the Bondholders of Tranche B to mandatorily convert
the Bonds into equity shares if the market price on the specified date
provided the holder a gain of at least a 30% over the Early Redemption
amount. The following table sets out
the parameters associated with Tranche B of FCCB issued as discussed above.
(d) Foreign
currency convertible bonds (FCCB) : Tranche A of the
FCCBs amounting to USD 40.00 Million outstanding as at April 26, 2012 were
redeemed on April 27, 2012 along with the redemption premium amounting to USD
17.03 Million. The premium on redemption aggregating to Rs. 994.060 Million,
(including withholding tax amounting to Rs. 98.960 Million) since
crystallized has been adjusted to securities premium account, net of deferred
tax asset amounting to Rs. 322.520 Million, in terms of Section 78(2)(d) of
the Companies Act, 1956. Tranche B of the
above FCCBs amounting to USD 39.90 Million outstanding as at April 26, 2013
were redeemed on April 26, 2013 along with the redemption premium amounting
to USD 22.54 Million. The premium on redemption aggregating to Rs. 1322.820
Million, (including withholding Tax amounting to Rs. 98.670 Million) since
crystalised has been adjusted to securities premium account, net of deferred
tax asset amounting to Rs. 429.190 Million, in terms of Section 78(2)(d) of
the Companies Act, 1956. The Company has been
legally advised by an eminent law firm that the above mentioned FCCB’s issued
upon terms and conditions set out in the offering circular dated April 19,
2005, would be outside the purview of Section 117(C) of the Companies Act,
1956 as regards creation of Debenture Redemption Reserve. SHORT-TERM BORROWINGS (a) Cash credit
from banks and preshipment of packing credit is secured 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 is repayable on demand and carries interest @ 10.50% to
13.25% per annum Preshipment packing credit is repayable within 180 days and
carries interest @ LIBOR + 100 bps to 200 bps per annum. (b) Buyers line of credit is repayable within 180 days to 360 days and
carries interest @ EURIBOR + 90 bps to 110 bps per annum. |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
S.R. Batliboi and Company LLP Chartered Accountants |
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Subsidiaries : |
¨ CDP Bharat Forge
GmbH ¨ Bharat Forge
America Inc. ¨ BF-NTPC Energy
Systems Limited ¨ Kalyani ALSTOM
Power Limited ¨ BF
Infrastructure Limited ¨ BF
Infrastructure Ventures Limited ¨ BF Power
Equipment Limited ¨ BF Elbit Advanced
Systems Private Limited ¨ Kalyani
Polytechnic Private Limited |
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Step down subsidiaries : |
¨ Bharat Forge
Holding GmbH ¨ Bharat Forge
Aluminiumtechnik GmbH and Company KG ¨ Bharat Forge
Aluminiumtechnik Verwaltungs GmbH ¨ Bharat Forge Beteiligungs
GmbH ¨ Bharat Forge
Kilsta AB ¨ Bharat Forge
Scottish Stampings Limited ¨ Bharat Forge
Hong Kong Limited ¨ FAW Bharat Forge
(Changchun) Company Limited ¨ Bharat Forge
International Limited ¨ Bharat Forge
Daun GmbH ¨ BF New
Technologies GmbH |
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Associates : |
Technica U.K.
Limited (Investment through wholly owned subsidiary) |
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Joint Ventures : |
¨ ALSTOM Bharat
Forge Power Limited ¨ Impact
Automotive Solutions Limited |
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Step down joint venture : |
¨ David Brown Bharat
Forge Gear Systems India Limited |
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Enterprises
owned or significantly influenced by key management personnel or their relation |
¨ Kalyani
Carpenter Special Steels Limited ¨ Kalyani Steels
Limited ¨ BF Utilities
Limited ¨ Automotive Axle
Limited |
CAPITAL STRUCTURE
As on: 31.03.2013
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
300000000 |
Equity Shares |
Rs.2/- each |
Rs.600.000 Millions |
|
43000000 |
Cumulative Preferences 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 |
|
232970666 |
Equity Shares |
Rs.2/- each |
Rs.465.940 Millions
|
|
|
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Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
232794316 |
Equity Shares |
Rs.2/- each |
Rs.465.590
Millions |
|
172840 |
Add: Forfeited Equity Shares |
|
Rs.0.090
Million |
|
|
Total
|
|
Rs.465.680 Millions |
a.
Reconciliation of
the shares outstanding at the beginning and at the end of the year:
|
Particular |
As on 31.03.2013 |
|
|
|
No. of Shares |
Rs. in Millions |
|
At the beginning of the year |
232794316 |
465.590 |
|
Issued during the year |
-- |
-- |
|
|
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|
|
Outstanding at
the end of the year |
232794316 |
465.590 |
b.
Terms/rights attached to equity shares
The Company has only
one class of issued equity shares having a par value of Rs. 2/- per share. Each
holder of equity shares is entitled to one vote per share. The Company declares
and pays dividend in Indian rupees. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting.
During the year
ended March 31, 2013, the amount of per share interim dividend recognised as
distributions to equity shareholders was Rs. 1.00/- (March 31, 2012:
Rs.1.50/-).
During the year
ended March 31, 2013, the amount of per share proposed final dividend
recognised as distributions to equity shareholders was Rs. 2.40/- (March 31,
2012: Rs. 2.50/-).
In the event of
liquidation of the Company, the holders of equity shares will be entitled to
receive remaining assets of the Company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.
c.
Shares held by holding/ultimate holding company and/or
their subsidiaries/associates
The Company being
ultimate holding company there are no shares held by any other holding,
ultimate holding company and their subsidiaries/associates.
d.
Aggregate number of bonus shares issued, shares
issued for consideration other than cash and shares bought back during the
period of five years immediately preceding the reporting date
There are no bonus
shares issued, shares issued for consideration other than cash and shares
bought back during the period of five years immediately preceding reporting
date.
e.
Details of
shareholders holding more than 5% of the aggregate shares in the Company:
|
Particular |
As on 31.03.2013 |
|
|
|
No. of Shares
Held |
% of Holding |
|
Kalyani Investment Company Limited |
31656095 |
13.60 |
|
KSL Holdings Private Limited |
23142870 |
9.94 |
|
Sundaram Trading and Investment Private Limited |
20986337 |
9.01 |
|
Life Insurance Corporation of India |
20358099 |
8.74 |
|
Reliance Capital Trustee Company Limited |
12151369 |
5.22 |
* The shareholding
information is based on legal ownership of shares and has been extracted from
the of the Company including register of shareholders/members.
f.
Shares reserved for issue under options
|
Particulars |
31.03.2013 |
|
Warrants issued with
option to subscribe |
6500000 |
|
The issue of
Foreign Currency Convertible Bonds optionally convertible at an initial price
specified in offering circular. As the initial price is subject to
adjustments specified in the offering circular and hence inability to assess
the proportion of conversion, no amounts have been shown under issued equity
share capital, in respect of equity shares reserved for issued on exercise of
conversion by bondholders |
-- |
|
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 1,170
equity shares of Rs. 2/- each, have been kept in abeyance and reserve for
issue pending adjudication of title to the pre right holding |
3510 |
g.
Terms of securities convertible into equity shares
i.
The Company had issued and allotted to Qualified
Institutional Buyers, 10,000,000 equity shares of Rs. 2/- each at a price of
Rs. 272/- per share aggregating to Rs. 2720.000 Million on April 28, 2010,
simultaneous with the issue of 1,760 10.75% Non Convertible Debentures (NCD) of
a face value of Rs. 1,000,000/- 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 subscription money received on issue of
warrants has been credited to capital reserve as the same is not
refundable/adjustable. Out of the funds raised, Rs. 2365.000 Million had been
temporarily deployed in fixed deposits with banks and in mutual funds and the
balance has been utilized towards the object of the issue. The Warrant holders
were entitled to exercise their right to exchange the warrants into
corresponding number of equity shares, upto April 28, 2013. As no warrant have
been exercised on or before the said warrant exercised period, the warrants
have lapsed and ceased to be valid.
ii.
Regarding Foreign Currency Convertible Bonds.
h.
Global depository receipts
The Company had
issued 3,636,500 equity shares of Rs.10/- each (later sub-divided into
18,182,500 equity shares of Rs. 2/- each) in April and May 2005 represented by
3,636,500 Global Depository Receipts (GDR) (on sub division 18,182,500 GDRs)
evidencing “Master GDR Certificates” at a price of USD 27.50 per GDR (including
premium). GDRs outstanding at the close of the year are 9,200 (March 31, 2012:
9,200). The funds raised has been utilised towards the object of the issue.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
465.680 |
465.680 |
465.680 |
|
(b) Reserves & Surplus |
22645.640 |
20965.270 |
19488.180 |
|
(c) Money
received against share warrants |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
23111.320 |
21430.950 |
19953.860 |
|
|
|
|
|
|
(3)
Non-Current Liabilities |
|
|
|
|
(a) long-term borrowings |
14489.800 |
16003.980 |
13941.370 |
|
(b) Deferred tax liabilities (Net) |
1364.300 |
1271.520 |
1556.190 |
|
(c) Other long term liabilities |
7.400 |
7.150 |
5.880 |
|
(d) long-term provisions |
332.920 |
327.900 |
274.900 |
|
Total Non-current Liabilities (3) |
16194.420 |
17610.550 |
15778.340 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
390.110 |
840.980 |
661.300 |
|
(b) Trade payables |
4541.150 |
6656.180 |
6164.330 |
|
(c) Other current
liabilities |
6282.110 |
5375.780 |
875.950 |
|
(d) Short-term provisions |
908.040 |
1367.260 |
1206.930 |
|
Total Current Liabilities (4) |
12121.410 |
14240.200 |
8908.510 |
|
|
|
|
|
|
TOTAL |
51427.150 |
53281.700 |
44640.710 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
19988.080 |
17961.990 |
17632.570 |
|
(ii) Intangible Assets |
0.000 |
0.000 |
0.000 |
|
(iii) Capital
work-in-progress |
2228.060 |
2887.570 |
784.380 |
|
(iv)
Intangible assets under development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current Investments |
5453.460 |
5115.520 |
5716.260 |
|
(c) Deferred tax assets (net) |
0.000 |
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
3863.350 |
4036.890 |
3442.210 |
|
(e) Other Non-current assets |
423.890 |
588.050 |
417.350 |
|
Total Non-Current Assets |
31956.840 |
30590.020 |
27992.770 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
3852.990 |
4246.970 |
2427.250 |
|
(b) Inventories |
4757.010 |
5031.340 |
4684.340 |
|
(c) Trade receivables |
4742.320 |
4911.750 |
4313.210 |
|
(d) Cash and cash
equivalents |
2790.780 |
5005.940 |
2320.400 |
|
(e) Short-term loans and
advances |
2570.550 |
2702.420 |
2124.750 |
|
(f) Other current assets |
756.660 |
793.260 |
777.990 |
|
Total Current Assets |
19470.310 |
22691.680 |
16647.940 |
|
|
|
|
|
|
TOTAL |
51427.150 |
53281.700 |
44640.710 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
31512.270 |
36859.740 |
29470.040 |
|
|
|
Other Income |
916.250 |
675.700 |
465.430 |
|
|
|
TOTAL |
32428.520 |
37535.440 |
29935.470 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of raw material and components consumed |
13430.860 |
16496.200 |
13661.520 |
|
|
|
Decrease/(increase) in inventories of finished goods and
work-in-progress |
141.460 |
(162.120) |
(358.320) |
|
|
|
Employee benefits expense |
2573.880 |
2549.640 |
2104.770 |
|
|
|
Other expenses |
8210.320 |
8823.000 |
6906.820 |
|
|
|
TOTAL |
24356.520 |
27706.720 |
22314.790 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION |
8072.000 |
9828.720 |
7620.680 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES |
1533.590 |
1504.650 |
1214.420 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION |
6538.410 |
8324.070 |
6406.260 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
2239.330 |
2149.330 |
1932.680 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE EXCEPTIONAL ITEMS AND TAX |
4299.080 |
6174.740 |
4473.580 |
|
|
|
|
|
|
|
|
|
Add |
EXCEPTIONAL ITEMS AND TAX |
105.690 |
(704.160) |
0.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX |
4404.770 |
5470.580 |
4473.580 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
1348.840 |
1849.850 |
1365.330 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX |
3055.930 |
3620.730 |
3108.250 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
10051.890 |
8284.100 |
6833.230 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Interim Dividend on Equity Shares |
232.790 |
349.190 |
0.000 |
|
|
|
Tax on above dividend |
37.760 |
56.650 |
0.000 |
|
|
|
Proposed Final Dividend on Equity Shares |
558.710 |
581.990 |
814.780 |
|
|
|
Tax on above dividend |
94.950 |
94.410 |
132.180 |
|
|
|
Debenture Redemption Reserve |
408.600 |
408.600 |
399.420 |
|
|
|
Transfer to General Reserve |
305.600 |
362.100 |
311.000 |
|
|
BALANCE CARRIED
TO THE B/S |
11469.410 |
10051.890 |
8284.100 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
F.O.B. value of exports |
15613.350 |
17309.920 |
12110.340 |
|
|
|
Insurance and freight on Exports |
189.200 |
457.280 |
347.620 |
|
|
|
Tooling Charges |
252.950 |
37.170 |
84.750 |
|
|
|
Sale of Certified Emission Reduction Units |
-- |
-- |
3.450 |
|
|
|
Interest received on Fixed Deposits / Others |
0.090 |
0.020 |
0.700 |
|
|
|
Interest on Loan to Subsidiary |
29.560 |
33.360 |
22.050 |
|
|
|
Guarantee commission |
4.590 |
4.480 |
0.000 |
|
|
TOTAL EARNINGS |
16089.740 |
17842.230 |
12568.910 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
661.380 |
472.120 |
448.180 |
|
|
|
Die Blocks, Die Steel, Tool Steel & Spares |
718.260 |
715.260 |
498.540 |
|
|
|
Capital Goods |
865.890 |
1311.160 |
448.980 |
|
|
TOTAL IMPORTS |
2245.530 |
2498.540 |
1395.700 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic |
13.13 |
15.55 |
13.39 |
|
|
|
Diluted |
13.13 |
15.53 |
13.11 |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2013 |
30.09.2013 |
31.12.3013 |
|
Audited / UnAudited |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
7915.600 |
8451.100 |
8320.800 |
|
Total Expenditure |
5954.600 |
6223.300 |
6176.000 |
|
PBIDT (Excl OI) |
1961.000 |
2227.800 |
2144.800 |
|
Other Income |
354.200 |
212.900 |
253.900 |
|
Operating Profit |
2315.200 |
2440.700 |
2398.700 |
|
Interest |
354.300 |
393.500 |
399.400 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
1960.900 |
2047.200 |
1999.300 |
|
Depreciation |
610.700 |
627.700 |
616.600 |
|
Profit Before Tax |
1350.200 |
1419.500 |
1382.700 |
|
Tax |
444.200 |
455.700 |
443.000 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
906.000 |
963.800 |
939.700 |
|
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 |
906.000 |
963.800 |
939.700 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2013 |
31.03.2012 |
31.03.2011 |
|
PAT / Total Income |
(%) |
9.42
|
9.65 |
10.38 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
13.98
|
14.84 |
15.18 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
10.07
|
12.08 |
11.73 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19
|
0.25 |
0.22 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
0.64
|
0.79 |
0.73 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.61
|
1.59 |
1.87 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Millions]
DEBT EQUITY RATIO
|
Particular |
31.03.2011 |
31.03.2012 |
31.03.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Share Capital |
465.680 |
465.680 |
465.680 |
|
Reserves & Surplus |
19488.180 |
20965.270 |
22645.640 |
|
Net
worth |
19953.860 |
21430.950 |
23111.320 |
|
|
|
|
|
|
long-term borrowings |
13941.370 |
16003.980 |
14489.800 |
|
Short term borrowings |
661.300 |
840.980 |
390.110 |
|
Total
borrowings |
14602.670 |
16844.960 |
14879.910 |
|
Debt/Equity
ratio |
0.732 |
0.786 |
0.644 |
YEAR-ON-YEAR GROWTH
|
Year
on Year Growth |
31.03.2011 |
31.03.2012 |
31.03.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
29470.040 |
36859.740 |
31512.270 |
|
|
|
25.075 |
(14.508) |
NET PROFIT MARGIN
|
Net
Profit Margin |
31.03.2011 |
31.03.2012 |
31.03.2013 |
|
|
(Rs.
In Millions) |
(Rs.
In Millions) |
(Rs.
In Millions) |
|
Sales |
29470.040 |
36859.740 |
31512.270 |
|
Profit |
3108.250 |
3620.730 |
3055.930 |
|
|
10.55% |
9.82% |
9.70% |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
Yes |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
No |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
---------------------- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
No |
|
21] |
Market information |
---------------------- |
|
22] |
Litigations that the firm
/ promoter involved in |
Yes |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
---------------------- |
|
26] |
Buyer visit details |
---------------------- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
Yes |
|
31] |
Date of Birth of Proprietor/Partner/Director,
if available |
Yes |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
LITIGATION DETAILS
|
HIGH COURT OF
BOMBAY |
|
CASE DETAILS BENCH: BOMBAY |
|
Lodging No: ITXAL/1607/2011 Filing Date:
23.12.2011 Reg. No.: ITXA/179/2012 Reg. Date: 15.10.2012 |
|
Petitioner: THE COMMISSIONER OF INCOME TAX -
Respondent: BHARAT FORGE LIMITED
Petn. Adv : VIMAL GUPTA (0) District: PUNE |
|
Bench: DIVISION Status: Admitted (Unready) Category:
TAX APPEALS Last Date:
26.03.2013
Stage: FOR ADMISSION – FRESH Last Coram: HON’BLE SHRI JUSTICE J.P. DEADHAR HON’BLE SHRI JUSTICE
M.S. SANKLECHA |
|
Act: Income Tax Act, 1961 UNDER SECTION: 260A |
UNSECURED LOAN:
|
Particulars |
31.03.2013 [Rs.
in Millions] |
31.03.2012 [Rs.
in Millions] |
|
LONG TERM
BORROWING |
|
|
|
On syndication basis |
4345.600 |
4071.200 |
|
On syndication basis |
2172.800 |
0.000 |
|
|
|
|
|
Foreign currency convertible bonds (FCCB ) |
|
|
|
USD 40.0 Million
(March 31, 2012: USD 40.0 Million) 0% Tranche A FCCBs (Redeemed on April 28, 2012) |
0.000 |
0.000 |
|
USD 39.9 Million
(March 31, 2012: USD 39.9 Million) 0% Tranche B FCCBs (Redeemable on April 28, 2013) |
0.000 |
2030.510 |
|
|
|
|
|
Sales tax deferral liability |
|
|
|
Under Government
of Maharashtra Package Scheme of Incentives |
0.000 |
69.440 |
|
|
|
|
|
SHORT TERM
BORROWING |
|
|
|
Buyers line of credit for import of goods from banks |
291.890 |
77.260 |
|
|
|
|
|
Total |
6810.290 |
6248.410 |
CORPORATE
INFORMATION
The Company is a public
company domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on two stock exchanges in India. The
Company is engaged in the manufacturing and selling of forged components. The
Company caters to both domestic and international markets.
GLOBAL AND INDIAN
ECONOMIC OVERVIEW
The world economy
continued to struggle in CY 2012 with a visible slowdown in the emerging market
and developing economies, a reflection of the sharp decline in demand from economies
like USA and Eurozone Area, domestic policy tightening, and the end of
investment booms in some of the major emerging markets. Developing economies
are still the main driver of global growth, but their output has slowed
compared with the pre-crisis period.
Over the past few
months, two of the biggest threats to global recovery have been temporarily
averted, a Euro area breakup and a sharp fiscal contraction in the United
States from the “fiscal cliff.”
Overall global
growth for the year came in at 3.2 percent in 2012 as against 4.0 percent in CY
2011 and is expected to grow by 4.0 percent in CY13. (Source: IMF)
India faced its
own share of problems driven by protracted weakness in industrial activity and
slowdown in the services sector. India’s quarterly GDP growth declined for the
seven consecutive quarters in October – December 2012, hitting a nine-year low
of 4.7 percent. (Source: RBI). GDP% for the January – March 2013 quarter
registered 4.8 percent and for the year GDP% came in at 5.0 percent as against
6.2 percent in the previous fiscal.
GLOBAL AUTOMOBILE
INDUSTRY
The global
automobile industry is highly concentrated, in USA, Europe, Japan, China,
Brazil, India and Korea, covering a major share of the pie. Global vehicle
production reached a record 84.1 Million in numbers in 2012 (Source: OICA), up
5 percent over the previous year.
Most of the global
automotive markets witnessed a concurrent demand decline for both mass market
passenger cars and commercial vehicles (CVs), impacted by a weak demand
environment. The demand was dampened due to low levels of economic activities
across regions. There was a subsequent demand decline across all the major
regions except North America, where the passenger car sales continue to surge.
Automotive Sales in the Eurozone auto industry remained depressed due to the
challenging economic conditions, and this downtrend is expected to continue for
some time. However, CV sales in Western Europe are likely to remain stable to
slightly positive as compared to previous year.
China and India
witnessed weak automotive demand on back of slackening economic demand. In
2012, Indian automotive market witnessed one of its most challenging periods
while china witnessed a slump demand which is estimated to report auto sales of
19 Million, growing at single digit rate, one of the lowest in many years
(Source: Global Auto Report -Scotia Bank, 2012).
EXPORTS
BFL is a major
supplier of safety and critical components for the automotive (passenger and CV)
and industrial sector. These components provided to passenger and CVs are
critical, safety and high value-added. BFL enjoys the privilege of strong
relationship with global OEMs spread across automotive and industrial sectors.
The Company has
successfully expanded its relationships across various geographies, notably in
Brazil and Japan. This has been achieved on the back of BFL’s deep engagement
with global OEMs and its ability to by supply critical and technologically
differentiated products.
The Company has
transformed its industrial business from serving just one or two product
categories to limited customers, to a separate business vertical with a dynamic
product offering across customers, geographies and segments.
Similar to the
domestic business, BFL has a limited exposure to the passenger vehicles through
exports. However, with the industry moving towards better fuel efficiency and
stringent emission norms through the use of lighter engines, they will require
high-performance parts. BFL is making significant progress with substantial
efforts aimed towards this space. It is confident of achieving success in
increasing its exposure to this segment in the coming years.
SUBSIDIARIES
Global subsidiaries
BFL’s global
subsidiaries help contribute to the development of the entire Group. These
subsidiaries allow the Company to:
·
Increase customer penetration and proximity to the
customer,
·
Cross fertilisation of best practices and exchange
of technology,
·
Enhance the ability to cater to the customers through
a dual-shore based model which will reduce the customer’s dependency on the no.
of suppliers for different components.
Following a good
year in CY 2011, all the global subsidiaries of the Company focused on cost
reductions, right sizing of organisation and new market development. However,
global markets have been extremely volatile in second half of CY 2012 resulting
in lackluster performance of the subsidiaries.
Europe: Performance of European subsidiaries was
adversely affected in CY 2012 on backdrop of lower demand in the underlying
markets. The subsidiaries have focused on improvement in productivity, lean
organisation and cost reduction. As a result of these initiatives, European
subsidiaries have been able to achieve profitability during these uncertain
market conditions. These companies
continue to develop new products, increasing share of business with
Customers and focus of improvement in operational performance
USA: In November 2012, US subsidiary of the
Company – Bharat Forge America Inc. (BFA) closed its manufacturing operations
due to sustained losses. Most of the existing business of BFA was transferred
to India thereby protecting the business within the Group. Subsequently all
assets of BFA were sold in US in May 2013 for $ 11.25 Million. Loss for CY 2012
due to such discontinued business was Rs.168.000 Million.
China: Performance of Joint Venture in China was
adversely affected by drop in underlying market in China. The drop in market
was severe especially in commercial vehicle market (drop of 30 percent over
last year) and construction market (drop of 70 percent over last year). As a
result, the capacity utilisation of Joint Venture Company was far below
break-even level resulting in higher losses in CY 2012.
Indian subsidiaries
BFL has been
foraying into the capital goods and infrastructure business segments (both
offer major growth opportunities) through investments in JVs and subsidiaries.
Alstom Bharat Forge Power Limited (ABFPL) and
Kalyani Alstom Power Limited (KAPL)
India’s Planning
Commission projects that the country needs at least 35-40 GW of additional
generation capacity annually to reach the necessary installed capacity of 800
GW by 2030. Alstom Bharat Forge Power Limited (ABFPL) and Kalyani Alstom Power
Limited (KAPL) are two JV companies of BFL with Alstom. These JVs design,
engineer and manufacture state-of the- art power equipment, including turbines,
generators, heat exchangers range for power plant units of 300 MW to 800 MW.
ABFPL has been awarded two prestigious orders by NTPC Limited. The first one, a
2X660 MW supercritical Turbine Generator Islands is set to be installed at
Solapur in Maharashtra, while a 3X660 MW supercritical turbine generator
islands is going to be installed at Nabinagar in Bihar. Both of these projects,
together constituting robust orders of Rs.38000.000 Million, are being
implemented and all key design and engineering milestones for these have been
met.
BF Infrastructure Limited (BFIL)
BFL’s wholly-owned
subsidiary, BFIL, endeavors to be a key contributor in India’s infrastructure
growth through a niche and dominant role in a few important segments including
power. The Company possesses a host of key enablers, including a talent pool
with nearly 1,500 man-years of proven project experience. It is currently
setting up a 450 MW (3X150 MW) coal based thermal power plant at Haldia, West
Bengal, for India Power Corporation (Haldia) Limited on EPC basis at a cost of
Rs.18850.000 Million. After suffering from initial delays due to land related
problems, the project is under implementation now. It is expected to be
completed with all the three turbines proposed to be commissioned in the next
financial year.
BF-NTPC Energy Systems
BFL’s JV with
NTPC, namely BF-NTPC Energy Systems Limited, has identified critical shortages
in the domestic availability of products, such as high-pressure piping, special
castings, valves and pumps, which retard timely completion of the country’s
power plants. Due to current depressed market conditions in the power sector,
BF-NTPC Energy Systems Limited has decided to put the project on hold and
revisit it once demand in the sector revives.
David Brown Bharat Forge Gear Systems India Limited
David Brown Bharat
Forge Gear Systems India Limited is a JV company located in Pune and serves
India’s industrial market. It supplies both newly build gearboxes and
comprehensive aftermarket services to sectors, such as power, mining, defense,
wind, rail and steel. In the first phase, the JV has established service centre
in Hosur, Karnataka and will set up a manufacturing facility in the second
phase once the demand in the capital goods/power sector revives.
FINANCIAL REVIEW
Total income FY13
witnessed a decline in total income by about 13.5 percent from Rs. 37474.000
Million in FY12 to Rs. 32429.000 Million in FY13. The decline was largely due
to a continued slump in automotive demand and drop in component sales to the
industrial sectors both in India and overseas markets.
The demand for
India’s industrial segment was impacted by global slowdown across markets. In
India, the industrial sales were primarily impacted due to weak investment
sentiments and a slowdown in industrial activities. Rest of the markets faced
declining demand from various infrastructural activities.
Income
Domestic sales
decreased by 18.9 percent on the back of 27 percent decline in volumes in the
MandHCV segment and order declines in the industrial sector in India.
Export sales declined
by 8.5 percent on back of slump in demand across auto and industrial segments
across all major geographies. Export realisation improved during the year on
back of rupee depreciation against major currencies and also increase in supply
of machined components.
Other Operating
income (Export Incentive) declined during the year due to reduction in
incentive rates. Other income increased 49.2 percent from Rs.614.000 Million to
Rs. 916.000 Million. Overall, total income reduced 13.54 percent from Rs.37474.000
Million to Rs. 32429.000 Million.
Expenditure
Raw Material as
percent of total income decreased from 43.6 percent in FY12 to 41.9 percent in
FY13 on improved
Machining and
higher realisation per tonne. Manufacturing cost as percent of total income
increased from 17.2 percent to 18.4 percent due to increase in Power cost which
increased from Rs.6.76 per Kwh in FY12 to Rs. 7.74 Kwh in FY13.
Salary cost
increased from 6.8 percent to 7.9 percent on primarily on account of sudden
drop in demand which had an impact on total income. Other expenditure remained
more or less flat at 6.4 percent on a YoY basis.
EBITDA %
marginally declined by 60 bps from 26.1 percent to 25.5 percent despite a more
than a 10 percent decline in top line on back of measures taken towards the end
of the fiscal to reduce cost in line with the lower demand environment.
Depreciation and
Interest Cost increased from 9.2 percent to 11.6 percent on back of new
machining lines getting commissioned in the fiscal and replacement of US$ 39.9
Million Zero Coupons FCCB with an ECB of similar amount.
OUTLOOK
Economic
uncertainties, along with a decline in automotive and industrial sectors in its
primary markets, namely India, the US and the Eurozone nations, adversely
impacted BFL’s performance in FY13. Despite the Company’s recovery initiatives
through cost control and increased productivity, the domestic as well as export
outlook for the first two quarters of FY14 remain sluggish.
FIXED ASSETS:
œ
Land, Free hold
œ
Land, lease hold
œ
Buildings
œ
Plant and Machinery
œ
Railway Sidings
œ
Electrical Installations
œ
Factory Equipments
œ
Engineering Instruments
œ
Furniture and Fittings
œ
Office Equipments
œ
Vehicles and Aircrafts
œ
Leased assets ( Plant and Machinery)
œ
Leased assets (Power line)
STATEMENT OF STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE
QUARTER AND NINE MONTHS ENDED 31ST MARCH, 2014
|
|
|
Quarter Ended |
Year
Ended |
|
|
|
|
31.03.2014 |
31.12.2013 |
31.03.2014 |
|
1 |
Income from operations |
|
|
|
|
|
--Within India |
4354.700 |
3619.800 |
16073.200 |
|
|
--Outside
India |
5078.800 |
4797.300 |
18482.100 |
|
|
Total sales |
9433.500 |
8417.100 |
34555.300 |
|
|
Less : Excise duty |
396.300 |
330.900 |
1501.600 |
|
|
Total net sales (net of excise duty) |
9037.200 |
8086.200 |
33053.700 |
|
|
b) Other operating income |
268.000 |
234.600 |
939.000 |
|
|
Total income from operations (net) (a + b) |
9305.200 |
8320.800 |
33992.700 |
|
2 |
Expenses: |
|
|
|
|
|
Cost of materials consumed |
4090.400 |
3401.400 |
14105.500 |
|
|
Changes in inventories of finished goods, work-in-progress and stock-in-trade |
(237.100) |
(205.700) |
(367.500) |
|
|
Project Cost |
-- |
-- |
-- |
|
|
Employee benefits expense |
689.600 |
697.100 |
2788.500 |
|
|
Depreciation, amortisation and obsolescence1991.700 |
598.100 |
616.600 |
2453.100 |
|
|
Manufacturing expenses |
1719.500 |
1600.900 |
6125.100 |
|
|
Other expenses |
739.700 |
682.300 |
2704.400 |
|
|
Total expenses |
7600.200 |
6792.600 |
27809.100 |
|
3 |
Profit from operations before other income, finance costs and exceptional items (1-2) |
1705.000 |
1528.200 |
6183.600 |
|
4 |
Other income |
326.000 |
253.900 |
1147.000 |
|
5 |
Profit from ordinary activities before finance costs and exceptional items (3+4) |
2031.000 |
1782.100 |
7330.600 |
|
6 |
Finance costs |
348.500 |
399.400 |
1495.700 |
|
7 |
Profit from ordinary activities after finance costs but before exceptional items (5-6) |
1682.500 |
1382.700 |
5834.900 |
|
8 |
Exceptional items |
123.500 |
-- |
123.500 |
|
9 |
Profit from
ordinary activities before tax (7+8) |
1806.000 |
1382.700 |
5958.400 |
|
10 |
Taxes expenses |
|
|
|
|
|
(a) Tax expenses for the period / year |
616.200 |
443.000 |
1965.700 |
|
|
(b) Adjustment of tax relating to earlier periods / year |
-- |
-- |
(6.600) |
|
11 |
Net profit after tax from ordinary activities (9-10) |
1189.800 |
939.700 |
3999.300 |
|
12 |
Extraordinary items |
-- |
-- |
-- |
|
13 |
Net profit after tax
for the period (11+12) |
1189.800 |
939.700 |
3999.300 |
|
14 |
Paid-up equity share capital (face value of share: Rs. 2 each) |
465.700 |
465.700 |
465.700 |
|
15 |
Reserves excluding revaluation reserve Earnings per share (Not annualised): |
|
|
|
|
16 |
Basic EPS before extraordinary items (Rs.) |
5.11 |
4.04 |
17.18 |
|
|
Diluted EPS before extraordinary items (Rs.) |
5.11 |
4.04 |
17.18 |
|
17 |
Debt Equity Ratio ** ( also see note 6) |
-- |
-- |
0.35 |
|
18 |
Debt Service Coverage Ratio *** (also see note 6) |
-- |
-- |
1.48 |
|
19 |
Debt Service Coverage Ratio *** (also see note 6) |
-- |
-- |
6.62 |
|
|
Additional Information : |
|
|
|
|
|
Profit before tax, before exchange gain / (loss) & exceptional items |
1709.600 |
1412.500 |
5724.300 |
SELECT INFORMATION FOR THE QUARTER AND NINE MONTHS ENDED
31ST MARCH, 2014
|
A |
PARTICULARS OF
SHAREHOLDING |
|
|
|
|
|
1 |
Public shareholding |
|
|
|
|
|
|
a. |
Number of shares |
123967196 |
123967196 |
123967196 |
|
|
b. |
Percentage of shareholding |
53.25% |
53.25% |
53.25% |
|
2 |
Promoters and promoter group shareholding |
|
|
|
|
|
|
a. |
Pledged/Encumbered |
|
|
|
|
|
Number of shares |
-- |
-- |
-- |
|
|
|
|
Percentage of shares (as a % of the total shareholding of promoter and
promoter group) |
-- |
-- |
-- |
|
|
|
Percentage of shares (as a % of the total share capital of the
Company) |
-- |
-- |
-- |
|
|
b. |
Non-encumbered |
|
|
|
|
|
Number of shares |
108817920 |
108817920 |
108817920 |
|
|
|
|
Percentage of shares (as a % of the total shareholding of promoter and
promoter group) |
100.00% |
100.00% |
100.00% |
|
|
|
Percentage of shares (as a % of the total share capital of the
Company) |
46.74% |
46.74% |
46.74% |
|
B |
INVESTOR COMPLAINTS |
Quarter Ended 31.03.2014 |
|
|
Pending at the beginning of the quarter |
Nil |
|
|
Received during the quarter |
Nil |
|
|
Disposed of during the quarter |
Nil |
|
|
Remaining unresolved at the end of the quarter |
Nil |
1.
STANDALONE
STATEMENT OF ASSETS AND LIABILITIES
|
Particular |
31.03.2014 (Rs.
In Millions) |
|
EQUITY AND LIABILITIES |
|
|
Shareholders’
funds |
|
|
(a) Share capital |
465.700 |
|
(b) Reserves and surplus |
26467.400 |
|
Sub-total
- Shareholders' funds |
26933.100 |
|
|
|
|
Non-current
liabilities |
|
|
(a) Long-term borrowings |
13599.900 |
|
(b) Deferred Tax Liabilities (Net) |
1791.000 |
|
(c) Other Long Term Liability |
4.600 |
|
(d) Long Term Provision |
303.300 |
|
Sub-total
- Non-current liabilities |
15698.800 |
|
|
|
|
Current
liabilities |
|
|
(a) Short -term borrowings |
1070.100 |
|
(b) Trade payables |
5625.000 |
|
(c) Other Current Liability |
6616.500 |
|
(d) Short-term provision |
1041.500 |
|
Sub-total
- Current liabilities |
14353.100 |
|
|
|
|
TOTAL
- EQUITY AND LIABILITIES |
56985.000 |
|
|
|
|
ASSETS |
|
|
Non-current
assets |
|
|
(a) Fixed assets |
21568.400 |
|
(b) Non-current investment |
5703.500 |
|
(c) Long-term loans and advances |
1516.900 |
|
(d) Other non-current assets |
261.400 |
|
Sub-total
- Non-current assets Current assets |
29050.200 |
|
Current assets |
|
|
(a) Current Investment |
7705.400 |
|
(b) Inventories |
5084.100 |
|
(c) Trade receivables |
5252.100 |
|
(d) Cash and cash equivalents |
2516.600 |
|
(e) Short-term loans and advances |
3465.800 |
|
(f) Other current assets |
3910.800 |
|
Sub-total
- Current assets |
27934.800 |
|
|
|
|
TOTAL
- ASSETS |
56985.000 |
NOTE:
2. The above results have been reviewed by the Audit Committee and approved by
the Board of Directors of the Company at their respective meetings held on May
27, 2014.
3. Directors recommend a final dividend of Rs.2.50
per equity share of Rs.2/- each
(125%), subject to approval of shareholders at the ensuing Annual General
Meeting.
4. Exceptional items represent:
(i) Provision for diminution in
value of investment in Bharat Forge Infrastructure Limited (BFIL) Considering
the losses and uncertainties in the business activity carried out by BFIL, the
Company has as a matter of prudence tested the investments in BFIL for
impairment / diminution. Accordingly the Company has provided an amount of Rs. 308.100 millions towards diminution in the
carrying cost of its investments during the quarter in the standalone financial
statements.
(ii) Sale of land
During the
quarter, the Company has sold land at one of the location resulting into
surplus amounting
to Rs.431.600
millions and is included in standalone and consolidated financial statements.
(iii) Disposal of Investment in FAW Bharat Forge
(Changchun) Company Limited. During the year, Bharat Forge Hong Kong Limited,
one of the indirect subsidiary in the group, divested its 51.85% stake in
Chinese JV operation (FAW Bharat Forge (Changchun) Company Limited to its Joint
Venture partner, China FAW Corporation Limited, for USD 282.08 lacs (Rs.1793.840 millions) the transaction was
completed on November 12, 2013 with effect from October 31, 2013. Profit
(including reversal of foreign currency translation reserve) pretax amounting
to Rs.605.440 millions (Tax
effect: Rs Nil), on divestment of stake has been recorded in the consolidated
financial statements.
5. The figures for the quarter ended March 31, 2014 represent the derived
figures between the audited figures in respect of the financial year ended
March 31, 2014 and the published year-to-date figures up to December 31, 2013,
being the date of the end of third quarter of the financial year, which were
subjected to a limited review.
6. Previous year/ period's figures are regrouped/ restated wherever
necessary to make them comparable with those of current period. As per the
requirements of AS-24 “Discontinuing operations" the prior year numbers
have been restated with respect to Bharat Forge America Inc. and FAW Bharat
Forge (Changchun) Company Limited.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is or
was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.60.18 |
|
|
1 |
Rs.103.14 |
|
Euro |
1 |
Rs.81.87 |
INFORMATION DETAILS
|
Information
Gathered by : |
NYA |
|
|
|
|
Analysis Done by
: |
SUM |
|
|
|
|
Report Prepared
by : |
ANK |
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 |
YES |
|
--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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
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 |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.