raj oil mills ltd - nse - national stock exchange of india ltd. oil mills ltd was incorporated on...

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1 | P A G E

SECTOR: EDIBLE OIL REPORTING DATE: 31ST MAY, 2016

Raj Oil Mills Ltd www.rajoilmillsltd.com

Raj Oil Mills Ltd 31st May, 2016 TABLE 1 - MARKET DATA (STANDALONE) (As on 31st May, 2016)

NSE Code - RAJOIL NSE Market Price (₹) 1.05 NSE Market Cap. (₹ Cr.) 8.32

Sector - Edible Oil Face Value (₹) 10.00 Equity (` Cr.) 74.94

52-week High/Low (₹) 2.10/0.80 Net worth (₹ Cr.) -21.79

Business Group - Indian Private TTM P/E N.A. Traded Volume (Shares) 7,029

Year of Incorporation - 1956 TTM P/BV N.A. Traded Volume (lacs) 0.07

Source - Capitaline

Corporate Office: COMPANY BACKGROUND

224 - 230, Raj Oil Mills Ltd Was Incorporated On 17th October, 2001. The Company was Promoted by

Shaukat S Tharadra. It Acquired the Running Business of Raj Oil Mills, Partnership Firm, In

2002. Raj Oil Mills, Partnership Firm, Founded in The Year 1943 By Late Haji Suleman Jamal.

The Company was Formed to Undertake the Business of Buying, Selling, Manufacturing,

Processing of Edible Oils, Edible Oil Seeds and Other Related Products. At Present, It Is

Engaged in The Business of Crushing and Oil Filtration with A Capacity of 5000 TPA and

30000 TPA Respectively.

Bellasis Road,

Mumbai - 400008, Maharashtra

Company Website:

www.rajoilmillsltd.com

TABLE 2 - PRICE PERFORMANCE

30th May,

2016

29th May,

2015

30th May,

2014

% Change CAGR for

2 years 2016 vs 2015 2015 vs 2014

Price (₹) 1.10 1.00 2.20 10.00% -54.55% -29.29%

Trading Volume (Shares)

(yearly avg.) 26,130 40,644 49,381 -35.71% -17.69% -

NSE Market Cap. (in ₹ Cr.) 8.24 7.49 15.62 10.01% -52.05% -27.37%

Source - Money Control

http://www.rajoilmillsltd.com/




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TABLE 3 - FINANCIALS

(₹ Cr.) 2015 2014 2013 % Change CAGR for 2

years 2015 vs 2014 2014 vs 2013

Net Worth -21.79 -13.29 277.21 N.A. -104.79% N.A.

Current Assets 30.80 27.21 300.58 13.19% -90.95% -67.99%

Non-Current Assets 139.50 145.11 149.56 -3.87% -2.98% -3.42%

Total Assets 170.30 172.31 450.14 -1.17% -61.72% -38.49%

Investments 52.98 53.19 95.90 -0.39% -44.54% -25.67%

Finance Cost 0.74 3.47 6.26 -78.67% -44.57% -65.62%

Long Term Liabilities 140.13 139.97 116.53 0.11% 20.11% 9.66%

Current Liabilities 51.97 45.63 56.41 13.89% -19.11% -4.02%

Turnover 62.63 67.99 127.39 -7.88% -46.63% -29.88%

Profit After Tax (PAT, ₹ Cr.) -8.50 -290.50 -20.72 N.A. N.A. N.A.

EPS (₹) -1.00 -41.00 -2.00 N.A. N.A. N.A.

Source - Money Control/Annual Report

Discussion as per Company as disclosed in Annual Report for FY 2014-15:

Other Income: Other Income of the Company decreased by 97.67% i.e. from ₹ 1,07,59,600/- in 2013-14 to ₹ 2,49,448/- in 2014-

15 as the Company had earned money which was nonrecurring in nature in the previous year.

Finance Cost: The Finance cost of the Company reduced by 78.75% i.e. from ₹ 3,46,93,734/- in 2013 – 14 to ₹ 73,70,694/- in

2014 -15 consequent on non- availability of funds from the market.

Share Capital: There was is change in the share capital of the Company in the Financial Year 2014-15 due to conversion of

39,33,330 warrants into Equity Shares of ` 10 each. therefore, share capital at the beginning of the year was `. 71.01 crore

whereas ₹ 74.94 Crore at the year end.

Short Term Borrowings: The Short term borrowings of the Company decreased from ₹ 1.33 Crore in 2013-14 to ₹ 1.19 Crore in

2014-15 as the working capital requirements of the Company shrunk due to decrease in turnover of the Company.”

The Board of Directors of the Company at their meeting held on 29th May, 2014 had approved the audited financial accounts

for the year 31st March, 2014. The Company had incurred major losses and the net-worth of the Company has been totally

eroded. Further, looking at the financial position of the Company the Board of Directors of the Company at their meeting

held on 6th June, 2014 has decided to refer the Company to the Board of BIFR and the application to the BIFR Board was

submitted on 9th June, 2014. The Board of BIFR has accepted the application of the Company and the case has been

registered u/s.15 (1) of the Sick Companies (Special Provisions) Act,1985 with Board as case no. 8/2015 vide order dated 12th

January 2015.

Further, during the year, Company has received Notices from Company Law Board (CLB) and Registrar of Companies (ROC),

Mumbai, Maharashtra, in relation to default made by the Company in repayment of principal amount and interest accrued

to the deposit holders on public deposit taken by the Company in terms of Section 58A of the Companies Act, 1956. In this

regards, prosecution has been launched against the Company, for which suitable representations and replies have been

given by the Company.




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AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The auditors have not raised any qualifications in last three years.

Auditors Opinion on Financials of 2014-15

“Opinion in our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial

statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with

the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

b) in the case of the Statement of Profit and Loss, Loss of the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date”

The Auditors have not made any qualification; however, they have Emphasised on the following Matters and mentioned

“We draw attention to the following matters in the Notes to the financial statements:

a) In the financial statement which indicates that the Company has accumulated losses and its net worth has been fully eroded,

the Company has incurred a net cash outflow during the current and previous year (s) and, the Company’s current liabilities

exceeded its current assets as at the balance sheet date. However, the financial statements of the Company have been

prepared on a going concern basis for the reasons stated in the said Note.

b) The Company is required to maintain the cost record for the manufacturing process but has not maintained the cost of

material consumed on actual consumption basis, instead accounted for the difference of inventory as “presumed to be

consumed” against production cost of unit produced, resultantly all the normal and abnormal losses (if any) are adjusted in the

production cost.

Our opinion is not modified in respect of this matter.”

Response Comment

Frequency of Qualifications The auditors have not raised any qualifications in last three years.

Have the auditors made any adverse remark in last 3

years? No

-

TABLE 4: BOARD PROFILE (As on 31st March, 2015)

Regulatory Norms Company

% of Independent Directors on the Board 50% 33.33%

% of Promoter Directors on the Board - 16.66%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - Yes

Average attendance of Directors in the Board meetings (%) - Not Disclosed

Source - Money Control/Annual Report

Composition of Board: As per Regulation 17(i)(b) of the Listing Regulations, 2015, the Company should have at least 50%

Independent Directors as the Chairman of the Board is an Executive Promoter Director. The Company currently has 33.33 % of

Independent Directors and hence, it does not meet the regulatory requirement.

Board Diversity: The Company has 6 directors out of which 5 are male and 1 is female.

Holding of position of MD/ CEO & Chairman by same person: The Company has appointed Mr. Shaukat Suleman Tharadra as

the Chairman and Managing Director of the Company. Appointment of a single person as the Chairman and Managing Director

of the Company is not a good governance practice as this may lead to concentration of power in single person.

Attendance at Board Meetings: The attendance of Directors in the Board meetings is Not disclosed.




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TABLE 5 - FINANCIAL RATIOS

Ratios 2015 2014 2013 % Change

2015 vs 2014 2014 vs 2013

Turn

ove

r

Rat

ios

Inventory Turnover 32.79 43.86 36.29 -25.25% 20.86%

Debtors Turnover 3.81 5.39 0.53 -29.20% 919.35%

Fixed asset Turnover 0.45 0.47 0.85 -4.18% -44.99%

Current Asset Turnover 2.03 2.50 0.42 -18.62% 489.58%

Ret

urn

Rat

ios Operating Profit Margin -12.12% -37.30% -14.11% N.A. N.A.

Net Profit Margin -13.57% -427.27% -16.27% N.A. N.A.

Return on Assets (ROA) -4.99% -168.59% -4.60% N.A. N.A.

Return on Equity (ROE) N.A. N.A. -7.47% N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 0.59 0.60 5.33 -0.62% -88.81%

Quick Ratio 0.56 0.56 5.27 -1.15% -89.32%

Cash Ratio 0.24 0.29 0.99 -16.04% -71.23%

Working Capital Turnover ratio N.A. N.A. 0.52 N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio N.A. N.A. 0.46 N.A. N.A.

Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales 0.18 0.16 0.09 8.56% 87.37%

Market Cap/ Net Worth N.A. N.A. 0.04 N.A. N.A.

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A.

Trading Volume (shares) (avg. of 1

year) 23,684 43,239 54,615 -45.22% -20.83%

Trading Volume (shares) (high in 1

year) 1,89,429 5,08,850 3,56,193 -62.77% 42.86%

Trading Volume (shares) (low in 1

year) 6.00 26.00 978.00 -76.92% -97.34%

Ratio - High/low trading volume 31,571.50 19,571.15 364.21 61.32% 5273.66%

Ratio - High/average trading volume 8.00 11.77 6.52 -32.04% 80.44%

Source - Money Control




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TABLE 6 (A): OWNERSHIP & MANAGEMENT RISKS

Shareholding Dec' 2015 Dec' 2014 Dec' 2013 Comments

Promoter shareholding 0.04% 0.04% 0.54% The promoter shareholding decreased

from 0.54% as on Dec 13 to 0.04% as on

Dec 15 due to revocation of pledge

0.50% of shares. 39,33,330 equity shares

have been allotted to Non-promoters at

a premium of ₹ 2 per share on

conversion of warrants.

Public - Institutional shareholding 0.01% 5.77% 6.9%

Public - Others shareholding 99.95% 94.19% 92.56%

Non Promoter Non Public

Shareholding - - -

TABLE 6 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares in last three years

Preferential issue to promoters No preferential issue of shares was made to the promoters in last three years

Preferential issue to others The Company issued 39,33,330 of face value ₹ 10 each to Mr. Abdulla Musala during

2015 through preferential offering (Convertible Warrants).

GDRs issued by the Company The Company did not issue and GDRs during last three years

Issue of ESOPs/Issue of shares

other than Preferential allotment

The Company did not issue any shares to the employees under its ESOP Scheme in last

three years.

Source - Annual Report




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Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the

future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over

a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets




7 | P A G E



Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover

Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a

Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp



8 | P A G E



Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated

by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-share stock price by

the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year


https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



9 | P A G E



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Contact Information

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Tel +91 22 4022 0322

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Research Analyst: Sudarshan Shetty


mailto:[email protected]

mailto:[email protected]

http://www.sesgovernance.com/