MIRA
INFORM REPORT
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Report Date : |
24.04.2007 |
IDENTIFICATION DETAILS
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Name : |
SURYAVANSHI
SPINNING MILLS LIMITED |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
27.12.1978 |
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Com. Reg. No.: |
01-2390 |
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CIN No.: [Company Identification No.] |
U18100AP1978PLC002390 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDS00050B |
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Legal Form : |
Public Limited
Liability Company. The Company’s shares are listed on the Stock Exchanges |
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Line of Business : |
Manufacturers of
Cotton Yarn |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED
CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable
to meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 1250000 |
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Status : |
Satisfactory |
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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 experienced 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 : |
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Tel. No.: |
91-40-27843333/
27898982 |
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Fax No.: |
91-40-27815135 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. B. N. Agarwal |
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Designation : |
Chairman and
Managing Director |
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Name : |
Mr. R. Surender
Reddy |
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Designation : |
Director |
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Name : |
Mr. B. N. Rathi |
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Designation : |
Director |
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Name : |
Mr. Akkineni
Nageswara Rao |
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Designation : |
Director |
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Name : |
Mr. A. U. Katra |
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Designation : |
Nominee (IDBI) |
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Name : |
Mr. Rajendra
Kumar Agarwal |
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Designation : |
Joint Managing
Director |
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Name : |
Mr. J. K. Agarwal |
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Designation : |
Executive Director |
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Name : |
Mr. D. K. Agarwal |
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Designation : |
Director |
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Name : |
Mr. C. Narsi
Reddy |
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Designation : |
Director |
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Name : |
Mr. S. V.
Jagannath |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. B.R.S. Reddy |
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Designation : |
Company Secretary |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers of
Cotton Yarn |
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Products : |
Yarn, Waste and
Garments |
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Exports to : |
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GENERAL INFORMATION
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No. of Employees : |
1440 |
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Auditors : |
Brahmayya &
Company Chartered
Accountants |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
15000000 |
Equity Shares |
Rs.10/- each |
Rs.150.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
7153787 |
Equity Shares |
Rs.10/- each |
Rs.71.538 millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
|
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 |
71.500 |
56.500 |
56.500 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
297.300 |
135.900 |
122.300 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
368.800 |
192.400 |
178.800 |
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LOAN FUNDS |
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1] Secured Loans |
677.400 |
817.800 |
910.400 |
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2] Unsecured Loans |
28.100 |
25.600 |
17.100 |
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TOTAL BORROWING |
705.500 |
843.400 |
927.500 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1074.300 |
1035.800 |
1106.300 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
640.600 |
720.400 |
758.800 |
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Capital work-in-progress |
29.000 |
9.200 |
0.000 |
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INVESTMENT |
0.300 |
0.300 |
4.000 |
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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 |
193.500
|
170.200 |
278.700 |
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Sundry Debtors |
334.800
|
196.400 |
146.200 |
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Cash & Bank Balances |
33.100
|
22.600 |
15.500 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
339.500
|
299.600 |
165.800 |
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Total Current Assets |
900.900
|
688.800 |
606.200 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
489.500
|
387.000 |
269.300 |
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Provisions |
9.800
|
0.000 |
0.000 |
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Total Current Liabilities |
499.300
|
387.000 |
269.300 |
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Net Current Assets |
401.600
|
301.800 |
336.900 |
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MISCELLANEOUS EXPENSES |
2.800 |
4.100 |
6.600 |
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TOTAL |
1074.300 |
1035.800 |
1106.300 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other income] |
2335.400 |
1949.300 |
1971.500 |
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Profit/(Loss)
Before Tax |
102.800 |
19.700 |
(17.600) |
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Provision for
Taxation |
24.400 |
1.200 |
1.900 |
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Profit/(Loss)
After Tax |
78.400 |
18.500 |
(19.500) |
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Export Value |
986.900 |
NA |
NA |
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Total Expenditure |
2232.6 |
1929.600 |
1989.100 |
QUARTERLY /
SUMMARISED RESULTS
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PARTICULARS |
30.06.2006 |
30.09.2006 |
31.12.2006 |
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Sales Turnover |
606.800 |
458.300 |
531.400 |
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Other Income |
0.800 |
0.700 |
0.900 |
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Total Income |
607.600 |
459.000 |
532.300 |
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Total Expenditure |
552.900 |
401.400 |
481.700 |
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Operating Profit |
54.700 |
57.600 |
50.600 |
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Interest |
17.900 |
18.800 |
18.800 |
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Gross Profit |
36.800 |
38.800 |
31.800 |
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Depreciation |
16.300 |
16.300 |
17.300 |
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Tax |
2.400 |
2.700 |
1.900 |
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Reported PAT |
14.400 |
18.300 |
9.800 |
200606 Quarter 1
Notes
Expenditure Includes (Increase)/Decrease in Stock in Trade
Rs (3.40)million Consumption of Raw Materials Rs 433.90 million Staff Cost Rs
20.90 million Power & Fuel Rs 53.10 million Other Expenditure Rs 48.40
million Tax Includes Provision for Current Tax Rs 2.30 million Deferred
Taxation Net Rs 3.70 million Fringe Benefit Tax Rs 0.10 million EPS is Basic
& Diluted Status of Investor Complaints for the quarter ended June 30, 2006
Complaints Pending at the beginning of the quarter Nil Complaints Received during
the quarter 26 Complaints disposed off during the quarter 26 Complaints
unresolved at the end of the quarter Nil 1. The above Unaudited Financial
Results, reviewed by the Audit Committee, were approved and taken on record by
the Board of Directors at its meeting held on
200609 Quarter 2
Notes:
Expenditure Includes (Increase)/Decrease in Stock in Trade
Rs (3.10)million Consumption of Raw Materials Rs 305.00 million Staff Cost Rs
20.30 million Power & Fuel Rs 49.30 million Other Expenditure Rs 29.90
million Tax Includes Provision for Current Tax Rs 2.50 million Deferred Tax Rs
1.50 million Fringe Benefit Tax Rs 0.20 million EPS is Basic & Diluted
Status of Investor Complaints for the quarter ended September 30, 2006
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 23 Complaints disposed off during the quarter 23 Complaints
unresolved at the end of the quarter Nil 1. The above Unaudited Financial
Results, reviewed by the Audit Committee, were approved and taken on record by
the Board of Directors at its meeting held on
200612 Quarter 3
Notes
Expenditure Includes (Increase)/Decrease in Stock in Trade
Rs (14.90)million Consumption of Raw Materials Rs 382.30 million Staff Cost Rs
21.80 million Power & Fuel Rs 46.60 million Other Expenditure Rs 45.90
million Tax Includes Provision for Current Tax Rs 1.60 million Deferred Tax Rs
2.80 million Fringe Benefit Tax Rs 0.30 million EPS is Basic & Diluted
Status of Investor Complaints for the quarter ended December 31, 2006
Complaints Pending at the beginning of the quarter Nil Complaints Received
during the quarter 51 Complaints disposed off during the quarter 51 Complaints
unresolved at the end of the quarter Nil 1. The above Unaudited Financial
Results, reviewed by the Audit Committee, were approved and taken on record by
the Board of Directors at its meeting held on
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity Ratio |
2.92 |
5.78 |
5.79 |
|
Long Term
Debt-Equity Ratio |
1.94 |
3.87 |
4.01 |
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Current Ratio |
1.13 |
1.04 |
1.03 |
|
TURNOVER RATIOS |
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Fixed Assets |
1.81 |
1.48 |
1.60 |
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Inventory |
12.75 |
8.50 |
7.32 |
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Debtors |
8.73 |
11.14 |
15.31 |
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Interest Cover
Ratio |
2.57 |
1.50 |
0.77 |
|
Operating Profit
Margin(%) |
9.88 |
9.67 |
6.60 |
|
Profit Before
Interest And Tax Margin(%) |
7.26 |
6.51 |
3.63 |
|
Cash Profit
Margin(%) |
6.01 |
5.21 |
1.81 |
|
Adjusted Net
Profit Margin(%) |
3.38 |
2.04 |
-1.16 |
|
Return On Capital
Employed(%) |
15.88 |
11.76 |
0.00 |
|
Return On Net
Worth(%) |
27.19 |
22.15 |
0.00 |
STOCK PRICES
|
Face Value |
Rs.10.00/- |
|
High |
Rs.61.00/- |
|
Low |
Rs.55.00/- |
LOCAL AGENCY FURTHER INFORMATION
Promoted by L N Agarwal and B N Agarwal & Associates, in
Dec.1978, subject manufactured high count cotton yarn for hosiery and for weaving
up to 1992-93. Later, it diversified into the production of lower count blended
yarn such as millange and polyester viscose yarn. The end-user segments are
hosiery, garments and textiles. Other group companies are Suryavanshi Cotton
Mills and Suryalata Spinning Mills.
Subject came out with a rights-cum-public issue in Aug.1994. The rights issue
(premium: Rs.30) aggregating Rs.60.400 millions and the Rs 67.600 millions
public issue (premium: Rs.60) financed for the expansion made to the spindleage
at the Rajna unit by installing 10,080 spindles; and by modernising the Bhongir
unit in AP. The cost of the project was Rs 178.700 millions. The above
expansion and modernisation were completed in the same year successfully.
In 1997-98 the spinning division of Aliabad unit was awarded ISO 9002 from
KPMG.
The modernisation project under TUF which was flagged off in the year 2000 has
been completed. The expenditure incurred till the year 2001 was Rs.130.074
millions out of estimated cost of Rs.160.000 millions.
OPERATIONS:
During the year under review, the company achieved a Net Turnover of
Rs.2332.500 Millions as against Rs.1939.800 Millions of the previous year. The
Gross Profit of the Company was Rs.229.100 millions as against Rs.162.900
millions and earned a net profit after tax of Rs.78.400 millions as against the
net profit after tax of Rs.18.600 millions during the previous year. The
Company registered growth of 20.24% in Turnover, 40.63% in Gross Profit and
320.96% in Net Profit over the previous year. The production during the year
was 15.073 millions kgs as against 15.005 millions kgs in the previous year.
The Company's performance for the year to come is expected to be
satisfactory.
EXPORTS:
The dismantling
of quotas have given exports a boost. The Export performance of the Company has
been encouraging in line with the Industry.
During the year under review the Company achieved export turnover of
Rs.1025.900 millions including Raw Cotton Exports of Rs.232.600 millions as
against the export turnover of Rs.483.100 millions and Raw Cotton Exports of
Rs.66 millions respectively in the previous year.
The company has not only maintained its growth in exports of Cotton Yarn and
Garments but also considerably increased its raw cotton exports. These exports
have helped to establish the brand in the International Markets.
PREFERENTIAL ALLOTMENT OF SHARES:
During the year under review, the Company raised Rs.131.087 millions through
allotment of 1506747 Equity Shares of Rs.10/- at the rate of Rs.87/-(including
premium of Rs.77/-) per share to the financial institutions and strategic
investors. The above funds were utilized to repay the high cost debts and to
augment long term capital expenditure. Consequent upon the allotment of shares,
the paid up capital of the Company stands increased to Rs.71.500 millions and
the share premium has gone up from Rs.147.300 millions to Rs.263.300
millions.
FUTURE OUTLOOK:
The future of the textile industry, is encouraging. The Raw Cotton production
within the countries is at comfortable level of 27.500 millions Bales per
annum. There has been a substantial increase in cotton yarn production with
increased capacities put into production, machinery manufacturers order books
are full and waiting periods are more than one year.
The Government has identified the Textile Sector as a priority one, for job
creation and also enhanced allocation to the Technology Upgradation Fund from
Rs.4.4 billion to 5.4 billion. Given the potential in the global scenario,
holds for the textile industry the measures are likely to help Textile
companies become more competent and attract sizable orders from the
The removal of Quota system has opened flood gates for export of garments from
The company with well established market net-work is expected to benefit as a
part of country's textile progress.
INDUSTRY STRUCTURE, DEVELOPMENTS
AND PRODUCT WISE PERFORMANCE:
The Company has two Units at Bhongir and Aliabad in Andhra Pradesh and one Unit
at Rajna in Madhya Pradesh. The Company manufactures Cotton Yarns, Blended
Yarns, Polyester Viscose Yarn and Ready made Garments.
TEXTILE INDUSTRY:
The Industry is labour intensive and therefore has immense potential for
employment generation. The textile industry is the only industry in the country
that is completely self-reliant in the entire value chain from raw materials to
the highest value-added products like made ups and garments.
The mill sector (spinning), recorded a significant growth during the last
decade and as of January 2006 there are 1779 Cotton/Man-made fibre mills.
Spinning is the industry's most technologically advanced segment and is made up
of mostly medium and large-scale factories.
The Government of India by considering high potential growth in the textile
industry, has given pride of place in Union Budget 2006-07 and announced
several measures to promote the textile industry.
The Government has also identified the Textile Sector as a priority one for job
creation. Given the latent opportunities present in the global scenario, the
measures are likely to help Textile companies become more competent and attract
sizable orders from the
YARN:
The Company continues to focus on production of high value added yarns like
combed yarns, which in turn have contributed to the enhanced profitability. The
Company is continuing the process of modernizing the Spinning Divisions to
improve the quality of its products to meet the changing requirements of the
garment manufacturers, and also the international market in the constantly
changing market scenario.
The Company continuous exports of value added yarns and ready-made garments to
various markets including U.S.A,
In the domestic market also, the Company has improved its supplies to the
high-end quality market with improved realizations. The Company is reasonably
confident of maintaining its progress in this direction.
PRODUCT WISE PERFORMANCE:
The
Production in the Spinning Units during the year 2005-06 was 15.073 millions
kgs as against 15.005 millions kgs during the previous year. We sold 15.223
millions kgs of yarn during 2005-06 as against 15.206 millions kgs in the
previous year.
READYMADE GARMENTS:
Ready-made garments are widely acknowledged as the prime growth driven for
The recent reports further states that the Garment Sector has been a Star
Performer during April - December 2005 notching up the impressive 34%
growth.
PRODUCT WISE PERFORMANCE:
The Sales of Garment Division during the year 2005-06 was 1.631 millions pieces
as against 0.266 millions pieces during the previous year.
OPPORTUNITIES, THREATS, RISKS AND
CONCERNS:
The maximum benefit out of the removal of quotas is being reaped by the Garment
segment. The extended restrictions on imports from
Cotton, the main Raw Material, being an agricultural commodity is subject to
the vagaries of monsoon and quality of Indian cotton, still much to be
improved.
Opening up of the textile industry globally brings within its fold intense
competition within and international markets like
The other risks and concerns for Indian Textiles Industry are the inflexible
Labour Policies and shortage of skilled labour, shortage of quality power at
competitive rates. Indian Textiles Industry continues to be plagued by poor
infrastructure facilities. It also has to content with long delivery schedules
from machinery manufacturers, severally affecting its expansion plans.
The Company has continued to focus on production of high value added yarns like
combed yarns which in turn have contributed to enhanced profitability. The
Company has been able to maintain excellent quality standards for Yarn. In
fact, in terms of many productivity parameters, the Company has been ranked
among the best. The Company on its part has also modernized its machinery to
improve the quality of its products to meet the changing requirements of the
garment manufacturers and also the international market in the constantly
changing market scenario.
The Company has been exporting a variety of high value added yarns, Raw Cotton
and Ready-made Garments to various markets like
The Company believes that the ensuing competition in the emerging market place
will have to be met squarely only by developing production systems based on
cost efficiency, high productivity, modern technology, quality assurance and
timely deliveries. The Company is aware that design and fashion capabilities
are key strength that will be required to reinforce its relationship with
global players and score over main competitors like Chinese companies.
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
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.41.29 |
|
|
1 |
Rs.82.30 |
|
Euro |
1 |
Rs.56.20 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
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 |
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 |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|