MIRA INFORM REPORT

 

 

Report No. :

324385

Report Date :

27.05.2015

 

IDENTIFICATION DETAILS

 

Name :

BHUTAN FERRO ALLOYS LTD.

 

 

Registered Office :

Flat No. – 8&12, Samdraupling House  Pekhel Lam,  Post Box Number 211,  Phuentsholing

 

 

Country :

Bhutan

 

 

Financials (as on) :

15.07.2013

 

 

Date of Incorporation :

April, 1995

 

 

Legal Form :

Limited

 

 

Line of Business :

Manufactures of Ferro Silicon, Micro Silicon, Ferro Silicon Aluminum.

 

 

No. of Employee :

235 Nos.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No complaints

 

 

Litigation :

Clear

 

 

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 – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Bhutan

B1

B1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

BHUTAN ECONOMIC OVERVIEW

 

Bhutan's economy, small and less developed, is based largely on hydropower, agriculture, and forestry, which provide the main livelihood for more than half of the population. Because rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive, industrial production is primarily of the cottage industry type. The economy is closely aligned with India's through strong trade and monetary links and is dependent on India for financial assistance and migrant laborers for development projects, especially for road construction. Multilateral development organizations administer most educational, social, and environment programs, and take into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment. Bhutan’s largest export - hydropower to India - could spur sustainable growth in the coming years if Bhutan resolves chronic delays in construction. Bhutan currently taps only 5% of its 30,000-megawatt hydropower potential and is behind schedule in building 12 new hydropower dams with a combined capacity of 10,000 megawatts by 2020 in accordance with a deal signed in 2008 with India. The high volume of imported materials to build hydropower plants has expanded Bhutan's trade and current account deficits. However, Bhutan and India in April 2014 agreed to begin four additional hydropower projects, which would generate 2,120 megawatts in total. A declining GDP growth rate in each of the past three years in the absence of new hydropower facilities has constrained Bhutan’s ability to institute economic reforms. Bhutan inked a pact in December 2014 to expand duty-free trade with Bangladesh, the only trade partner with which Bhutan enjoys a surplus.

 

Source : CIA

 

 

Company name and address

 

BHUTAN FERRO  ALLOYS  LTD.

 

Flat No. – 8&12, Samdraupling House
Pekhel Lam,

Post Box Number 211,

Phuentsholing, Bhutan

 

Email contact@bhutanferroalloys.com
Telephone No. 00-975-5-252246, 252417/252415
Fax No: 00-975-5-252282/252712

 

 

Year Established

 

April, 1995

 

 

Incorporation. No.

 

69221/46/47

 

 

Legal Status

 

Limited

 

 

Name of Director

 

Sl.No.

Name

Designation

1.

Tobgay Dorji

Director

2.

Desho Sonan Tasherine

Director

3.

Lam Dorji

Director

4.

Y. Chung

Director

5.

D. K. Dorji

Director

6.

C. Chunge

Director

 

 

Major Shareholders

 

Bhutan Government, Tashi Group, Marubeni Corporation

 

 

Auditors

 

Y. Lam & Associates, Bhutan

 

 

Staff

 

235 nos.

                       

                       

Bankers

 

Bank of Bhutan, Phuntsholing, Bhutan

 

 

Business

 

Bhutan Ferro Alloys Limited (BFAL) is a joint venture of the Royal Government of Bhutan, Marubeni Corporation and Tashi Commercial Corporation, the largest private Company in Bhutan. In addition to the main promoters, the financial institutions, corporate bodies and general public also hold Company’s shares.

BFAL was established in the year 1990 as per the Companies act of Bhutan. The Company commenced its commercial production in April 1995. BFAL, which is now running for about 10 years, has excellent track record in terms of consistent production, quality product and customer service. The industrial site, which is about 15 Kilometers from the main commercial town of Phuentsholing, Bhutan, consists of 28.5 MVA Sub-merged Electric arc furnace, Bag House Filter, Power distribution arrangement, Plunging system for MgFeSi, Utilities, water system and various other facilities of the international standard.

The state of the art production facility uses high quality of raw materials. Gas Coke and Electrode Paste from China, other reductants such as Low Ash Coal, Charcoal and Low Ash Metallurgical Coke are being procured from India. The Company has its own captive mines to procure Quartzite for its plant. Wood chips, abundantly available in Bhutan are also being used as one of the reductants.

The Plant gets an uninterrupted power supply of 66Kv from the sub-station of the Royal Government of Bhutan, which is being stepped down to 22 KV/11 KV for the main furnace and the auxiliaries.

The Plant has an installed capacity to produce 18000 tons of Ferro Silicon. However, it has been consistently producing quality grade of Ferro Silicon about 21000 tons per year. In addition to FeSi, the plant is producing about 2400 tons of Magnesium Ferro Silicon, a value added product for the SG Iron castings. The Plant is also producing about 4200 ton of Silica Fume per year under the brand name of “ Micro Silica”, a technical collaboration with Elkem Asa Material, Norway.

Most of the above products are being sold to the Indian market, but some quantities of Ferro silicon and Micro silica are being sold to the Japanese, US, Singaporean and Chinese markets. Steps have been taken to market Magnesium Ferro Silicon to the international market.

In order to consolidate its position as one of the major Ferro alloys producers, the Company has already finalized the order for procuring an 18 MVA smelting furnace to produce other Silicon and manganese alloys. The proposed expansion will be commissioned sometime during end of 2005.

 

Products

Standard Grade

 

 

Ferro Silicon

Si 45-50% /60-65%/ 70-75%/ 75-80%

Al 1.50% / 2% (max)

C 0.15% ( max)

S 0.05% (max)

P 0.05% ( max)

 

 

Magnesium Ferro Silicon

Si 44-50%

Mg. 8-10%/ 6-8%/ 5-7%

Ca 0.8-1.2%

Al 1%/ 1.2%

Re 0.8-1%

 

 

Micro Silica

LOI

3.5%

SiO2

85%

Fe2O3.

1.5%

Al2O3

1%

MgO

1.5%

Moisture

1%

Bulk density

 

Undensified

200-350 kg/M3

Densified

500-650 kg/M3

 

Import       

 

India, U.S.A., Japan, Singapore, China,



Financial statement

 

Balance Sheet

                                     (Amount in Nu Mln.)

Particular
July 15, 2013
July 15, 2012

Sources of Funds

Share Capital

2.62

0.59

Reserves & Surplus

13.56

3.40

Unsecured Loans

2.67

4.30

Deferred Tax Liability (Net)

0.01

0.01

Total Liabilities

18.86

8.30

Application Of Funds

Gross Block

1.28

0.88

Less:  Depreciation

0.43

0.24

Net Block

0.85

0.64

Current Assets, Loan and Advances

Inventories

30.24

22.01

Sundry Debtors

10.84

9.63

Cash And Bank Balances

0.14

0.82

Loans and Advances

2.49

1.31

 

43.71

33.77

Less : Current Liabilities & Provisions

Current Liabilities

23.56

25.09

Provisions

2.18

1.06

 

25.74

26.15

Net Current Assets

17.97

7.62

Miscellaneous Expenditure

0.04

0.04

Total Assets

18.86

8.30

 

 

Key Financial Ratio

 

Particulars
July 15, 2013
July 15, 2012

PAT / Total Income (%)

                       2.17

                     3.89

Net Profit Margin

(PBT/ Total Income) (%)

3.33

5.30

Return on Total Assets

(PBT/Total Assets} (%)

7.13

11.32

Return on Investment (ROI)

(PBT/Net worth)

0.20

0.98

Debt Equity Ratio

(Total Liability/Net worth)

1.76

7.63

Current Ratio

(Current Asset/Current Liability)

                       1.70

                     1.29

 

Remarks

 

Trading Terms –            Purchase          -           L/C – 30 days     ;  Credit – 30 days

                                    Sales                -           L/C – 30 days    ;  Credit – 30 days

                                   

Well established, respectable and reputed concern, payments are reported to be correct and regular at usal trade terms and condition for normal business engasement.

 

 

Information denied

 

Mr. Kencho (Commercial Department) informed the given address is Head Office of the subject company and he

Denied to provide any other information.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.84

UK Pound

1

Rs.98.38

Euro

1

Rs.69.64

 

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

Report Prepared by :

ANK

 

 

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 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%)

 

 

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.