MIRA
INFORM REPORT
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Report Date : |
27.07.2007 |
IDENTIFICATION DETAILS
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Name : |
VIRUDHUNAGAR TEXTILE MILLS LIMITED |
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Registered Office : |
Sulakarai, Virudhunagar, Kamarajar District – 626 003,
Tamil Nadu, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
27.07.1946 |
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Com. Reg. No.: |
003270 |
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CIN No.: [Company
Identification No.] |
U17111TN1946PLC003270 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MRIV00353D |
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PAN No.: [Permanent
Account No.] |
AAACV3775E |
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Legal Form : |
Closely Held Public Limited Liability Company |
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Line of Business : |
The company is engaged in weaving and manufacturing of cotton and cotton mixture fabrics. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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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 2962400 |
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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 reputed company having satisfactory
track. Directors are reported as experience and respectable businessmen.
Trade relations are reported as fair. Business is active. Payments are
usually correct and as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
LOCATIONS
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Registered Office/Factory: |
Sulakarai, Virudhunagar, Kamarajar District – 626 003, Tamil
Nadu, |
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Tel. No.: |
91 – 4562 – 88591 - 4 |
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Fax No.: |
91 - 4562 – 88551 |
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E-Mail : |
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Website : |
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Area: |
100,000sq.fts |
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Location: |
Owned |
DIRECTORS
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Name : |
Mr. T. Kannan |
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Designation : |
Chairman |
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Name : |
Mr. M. Ananthakrishnan |
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Designation : |
Director |
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Name : |
Mr. R. M. Somasundaram |
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Designation : |
Director |
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Name : |
Mr. L. N. V. Subramanian |
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Designation : |
Director |
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Name : |
Mr. A. Mariappan |
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Designation : |
Director |
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Name : |
Mr. K. Subramanian |
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Designation : |
Director |
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KEY EXECUTIVES
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Name : |
Mr. S. Paramasivam |
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Designation : |
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
The company’s shares are listed on the stock exchanges.
BUSINESS DETAILS
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Line of Business : |
Subejct is engaged in weaving and manufacturing of cotton
and cotton mixture fabrics |
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Exports : |
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Countries : |
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Imports : |
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Products : |
Machinery and Spares |
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Countries : |
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Terms : |
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Selling : |
L/C |
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Purchasing : |
L/C and Credit (90 days) |
GENERAL INFORMATION
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Suppliers : |
©
Picnao NV., ©
©
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No. of Employees : |
591 |
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Bankers : |
©
Canara Bank, © Canara Bank, Virudhunagar, Tamilnadu ©
ABN-Amro Bank NV., |
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Facilities : |
The company enjoys some facilities from its bankers. |
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Banking Relations
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Good |
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Auditors : |
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Name : |
Peri Thiagraj & Company Chartered Accountants |
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Associates/Subsidiaries : |
Subsidiaries - © Colour Yarn Limited Engaged in Bleaching and Dyeing of Yarn Sister Concern - © Thigarajar Mills Limited, Kappalur/Madurai, Tamilnadu ©
Thirumagal Finance Limited, © Sree Thiagarajar Finance Limited, Virudhunagar, Tamilnadu |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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10000000 |
Equity Shares |
Rs.10/- each |
Rs.100.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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4022800 |
Equity Shares |
Rs.10/- each |
Rs.40.228
millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
40.200 |
40.200 |
40.200 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
700.400 |
701.100 |
656.600 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
740.600 |
741.300 |
696.800 |
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LOAN FUNDS |
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1] Secured Loans |
174.700 |
105.000 |
140.000 |
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2] Unsecured Loans |
10.400 |
00.400 |
00.500 |
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TOTAL BORROWING |
185.100 |
105.400 |
140.500 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
925.700 |
846.700 |
837.300 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
691.600 |
521.000 |
439.700 |
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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INVESTMENT |
15.700 |
166.200 |
04.900 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
197.800
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147.300 |
214.000 |
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Sundry Debtors |
60.400
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61.900 |
26.200 |
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Cash & Bank Balances |
48.800
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34.900 |
209.300 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
50.600
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42.000 |
63.300 |
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Total
Current Assets |
357.600
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286.100 |
512.800 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
144.100
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106.700 |
94.600 |
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Provisions |
10.700
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28.300 |
25.500 |
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Total
Current Liabilities |
154.800
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135.000 |
120.100 |
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Net Current Assets |
202.800
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151.100 |
392.700 |
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MISCELLANEOUS EXPENSES |
15.600 |
08.400 |
0.000 |
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TOTAL |
925.700 |
846.700 |
837.300 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover |
971.300 |
1094.600 |
1070.500 |
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Other Income |
37.500 |
62.200 |
70.600 |
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Total Income |
1008.800 |
1156.800 |
1141.100 |
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Profit/(Loss) Before Tax |
25.500 |
104.100 |
81.300 |
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Provision for Taxation |
17.900 |
34.500 |
26.400 |
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Profit/(Loss) After Tax |
07.600 |
69.600 |
54.900 |
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Expenditures : |
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Administrative Expenses |
62.600 |
59.300 |
49.000 |
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Raw Material Consumed |
605.600 |
653.000 |
653.700 |
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Excise Duty |
09.300 |
0.000 |
32.000 |
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Manufacturing Expenses |
148.300 |
169.00 |
113.100 |
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Interest |
04.700 |
04.700 |
04.500 |
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Power & Fuel |
57.800 |
60.500 |
57.600 |
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Depreciation & Amortization |
89.900 |
86.300 |
64.800 |
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Total Expenditure |
978.200 |
1032.800 |
974.700 |
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KEY RATIOS
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PARTICULARS |
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31.03.2006 |
31.03.2005 |
31.03.2004 |
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Debt Equity Ratio |
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0.20
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0.17 |
0.18 |
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Long Term Debt Equity Ratio |
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0.19
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0.17 |
0.18 |
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Current Ratio |
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2.19
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3.13 |
4.86 |
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Turnover ratios |
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Fixed Assets |
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0.87
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1.19 |
1.41 |
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Inventory |
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5.63
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6.06 |
4.98 |
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Debtors |
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15.88
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24.85 |
37.11 |
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Interest Covers Ratio |
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3.96
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23.15 |
19.07 |
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Operating Profit Margin (%) |
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11.17
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17.82 |
14.07 |
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Profit Before Interest And Tax Margin (%) |
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1.91
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9.94 |
8.01 |
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Cash Profit Margin (%) |
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9.69
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14.24 |
11.18 |
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Adjusted Net Profit Margin (%) |
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0.43
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6.36 |
5.13 |
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Return On Capital Employed (%) |
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2.14
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13.07 |
10.78 |
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Return On Woth (%) |
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0.57
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9.75 |
8.13 |
STOCK PRICES
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Face Value |
Rs.10.00 |
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High |
Rs.63.50 |
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Low |
Rs.63.50 |
LOCAL AGENCY FURTHER INFORMATION
Fixed assets -
© Land, Building
© Plant & Machinery
© Installation, Furniture
© Fitting and Vehicles.
Company Details:
The company has installed 289 looms to manufacture a range of grey fabrics from 90 cm width to 330 cm width. Some of the varieties produced by the company are cambric, voile, poplin, pin point oxford, satin, chambray, dirll, oxford weave, grey sheeting, etc. The mill is equipped with state of the art machineries like 60 air-jet weaving machines, besides 174 Lakshmi Ruti C looms of various widths. During the year 1994-95, the company issued bonus shares in the ratio 5:1.
In the year 2000-01, 28 Shuttle Looms have been replaced looms at a cost of Rs. 85.500 millions and this was financed through internal accruals. To make it more competitive in both International and Domestic markets, the company has proposed to modernise its plant and machinery under TUFS at an estimated cost of Rs. 100.000 millions. The modernisation scheme if implemented will yield a high value in its product mixture.
Since all the looms in the company are utilised wholly for meeting export, the company has become a 100% Export Oriented Unit.
Generic Name of the principal products of the company is “Cloth”.
HISTORY
The company was incorporated on 27th July, 1946 at Virudhunagar in Tamil Nadu having Company Registration No. 3270.
The company was promoted by K.T. Chettiar in 1947. The company’s plant is located in Virudhunagar. Even though it is not designated as an export oriented mill, 90-93 % of the production is exported. The company has only one subsidiary Colour Yarn Limited.
Directors Reports:
PERFORMANCE
OF THE YEAR AND FUTURE PROSPECTS:
During the year under review the Company had ordered 48 Airjet Looms which were
planned to be installed during September, 2005. There was unexpected delay in
the project and the installation could be commissioned only during February,
2006. In anticipation of this new capacity, the Company stopped all shuttle
looms and also discontinued production of fabric by outside vendors. As
adverted to in the last years report the DEPB rates on exports were slashed by
the Government of India from 7% to 2.8% on grey fabric and from 11% to 4.4% on
Made-Ups. These factors resulted in the fall in sales turnover and
profitability.
The Directors are confident that with the new installation it will be possible
to achieve higher turnover and profitability during the current year.
During the year under report the Company has spent Rs.61.100 millions towards
acquisition of windmills. Together with existing windmills the wind generation
capacity goes upto 2.45 MW and this is expected to meet about 40% of the
Company's energy requirements. The Company has also spent Rs.0.1640 millions
towards modernisation of Plant & Machinery.
NEW
PROJECT:
In order to have value addition to their products and to
enter into more lucrative market segments the Directors have decided to invest
in a state-of-the-art continuous process dyeing plant (as part of the SIMA
Textile Processing Centre coming up at Cuddalore) at an estimated cost of
Rs.750.000 millions. Their Company has already paid an amount of Rs.12.400
millions towards purchase of land and work is expected to commence any time now
on receipt of certain regulatory clearances. Their Directors hope to be able to
report substantial progress on this venture in the next report to you.
MANAGEMENT
DISCUSSION AND ANALYSIS:
Financial Performance:
There has been a reduction in the Turnover and the net
profit of the Company. The reasons for the same are set out in the Directors
Report. As stated therein the set back is only temporary on account of
unexpected delay in commissioning of the new looms in replacement of the old.
However the new looms commissioned, in the opinion of the Directors go a long
way in re-establishing the Company's profitable performance as in earlier
years.
Industry Structure and
Developments:
The Company has become a major player in the international fabrics market and
its reputation and goodwill are ever on the increase. The opportunities thrown
up by the ushering of complete free trade from the beginning of year 2005 will
be fully availed of by the Company though there is always the element of
competition from other cloth producing nations.
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 records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.40.54 |
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1 |
Rs.82.02 |
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Euro |
1 |
Rs.55.31 |
SCORE & RATING EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
9 |
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PAID-UP CAPITAL |
1~10 |
7 |
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OPERATING SCALE |
1~10 |
7 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
9 |
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--PROFITABILIRY |
1~10 |
6 |
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--LIQUIDITY |
1~10 |
8 |
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--LEVERAGE |
1~10 |
8 |
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--RESERVES |
1~10 |
7 |
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--CREDIT LINES |
1~10 |
7 |
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--MARGINS |
-5~5 |
- |
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DEMERIT POINTS |
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
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--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
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MERIT POINTS |
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
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--EXPORT ACTIVITIES |
YES/NO |
YES |
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--AFFILIATION |
YES/NO |
YES |
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--LISTED |
YES/NO |
YES |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
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68 |
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
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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