MIRA INFORM REPORT
|
Report Date : |
07.05.2007 |
IDENTIFICATION DETAILS
|
Name : |
DAYANAD TEXTILE INDUSTRIES PRIVATE LIMITED |
|
|
|
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Registered Office : |
8-A, First
Floor, Bhilwara Textile Market, Bhilwara 311 001, Rajasthan |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
18.04.1986 |
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Com. Reg. No.: |
17-3618 |
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TAN No.: [Tax Deduction & Collection Account No.] |
JDHD01929E |
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PAN No.: [Permanent Account No.] |
AABFD0104D |
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Legal Form : |
Private Limited Liability Company |
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Line of Business : |
Manufactures of cotton suiting &
shirting, school uniforms, uniforms, cotton fabrics, synthetic fabrics, dress
material, polyester cotton and viscose suiting & shirting |
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 |
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Maximum Credit Limit : |
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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
|
Registered Office : |
8-A, First
Floor, Bhilwara Textile Market, Bhilwara 311 001, |
|
Tel. No.: |
91-1482-247425 |
|
Mobile No.: |
91-9829045521
(Mr Ravi Agarwal) |
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Fax No.: |
91-1482-510971 |
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E-Mail : |
DIRECTORS
|
Name : |
Mr Brahama Nand Agarwal |
|
Designation : |
Director |
|
Address : |
A-78, R K Colony, Bhilwara, Rajasthan 311 001 |
|
Date of Birth/Age : |
02/03/1940 |
|
Date of Appointment : |
18/04/1986 |
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|
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|
Name : |
Mr Vijay Agarwal |
|
Designation : |
Director |
|
Address : |
A-78, R K Colony, Bhilwara, Rajasthan 311 001 |
|
Date of Birth/Age : |
21/01/1968 |
|
Date of Appointment : |
16/01/1993 |
KEY EXECUTIVES
|
Name : |
Ms Priya Sharma
(C.P. No. 6081) |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
List of Equity Shareholders
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Mr Brahama Nand Agarwal |
318,914 |
52.12 |
|
Ms Shobha Agarwal |
5,100 |
0.83 |
|
Ms Satyabala Mittal |
44,918 |
7.34 |
|
Mr Dwarka Prasad Gupta |
10,194 |
1.67 |
|
Mr Vijay Agarwal |
146,800 |
23.99 |
|
M/s |
30,200 |
4.94 |
|
Brahama Nand Agarwal, HUF |
200 |
0.03 |
|
Mr Ravi Agarwal |
55,574 |
9.08 |
|
Total |
611,900 |
100.00 |
|
|
|
|
|
Preferential
Shareholders |
|
|
|
Directors / Relatives of Directors |
11,250 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufactures of cotton suiting &
shirting, school uniforms, uniforms, cotton fabrics, synthetic fabrics, dress
material, polyester cotton and viscose suiting & shirting |
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Exports : |
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Countries : |
Subject does not exports and supplies in the domestic
market |
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Imports : |
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Products : |
Textile raw materials |
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Countries : |
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Terms : |
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Selling : |
Credit:
60 to 90 days |
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Purchasing : |
On
Documents against Payment |
GENERAL INFORMATION
|
Customers : |
·
Tirupati Textiles ·
Ganapati Textiles,
Chennai ·
Ajmer Shah Trading
Agency, |
|
|
|
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No. of Employees : |
Around 150 |
|
|
|
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Bankers : |
The Bank of
Rajasthan Limited, Gandhi Nagar, Bhilwara, Rajasthan |
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|
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Banking
Relations : |
Satisfactory |
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|
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Auditors : |
|
|
Name : |
Ramanand Goyal
& Company, Chartered Accountants (Mr Ramanand
Goyal, Proprietor, M. No. 70331) |
|
Address : |
C-94 Lalkothi
Scheme, Janpath, Jaipur 302 015, Rajasthan |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
650,000 |
Equity Shares |
Rs.10/- each |
Rs.6.500 millions |
|
15,000 |
Preference Shares |
Rs.100/- each |
Rs.1.500 millions |
|
|
Total |
|
Rs.8.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
611,900 |
Equity Shares |
Rs.10/- each |
Rs.6.119
millions |
|
11,250 |
Preference Shares |
Rs.100/- each |
Rs.1.125
millions |
|
|
Total |
|
Rs.7.244 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
|
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
|
7.244 |
7.244 |
|
|
2] Share Application Money |
|
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
|
8.677 |
7.663 |
|
|
4] (Accumulated Losses) |
|
0.000 |
0.000 |
|
|
NETWORTH |
|
15.921 |
14.907 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
|
17.477 |
16.689 |
|
|
2] Unsecured Loans |
|
13.444 |
7.521 |
|
|
TOTAL BORROWING |
|
30.921 |
24.210 |
|
|
DEFERRED TAX LIABILITIES |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
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TOTAL |
|
46.842 |
39.117 |
|
|
|
|
|
|
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APPLICATION OF FUNDS |
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|
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|
|
|
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FIXED ASSETS [Net Block] |
|
21.714 |
21.019 |
|
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Capital work-in-progress |
|
0.000 |
0.162 |
|
|
|
|
|
|
|
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INVESTMENT |
|
0.000 |
0.000 |
|
|
DEFERREX TAX ASSETS |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
|
20.500 |
20.291 |
|
|
Sundry Debtors |
|
11.081 |
6.460 |
|
|
Cash & Bank Balances |
|
0.620 |
1.065 |
|
|
Other Current Assets |
|
0.000 |
0.000 |
|
|
Loans & Advances |
|
1.471 |
1.536 |
|
Total
Current Assets |
|
33.672 |
29.352 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
|
8.448 |
11.384 |
|
|
Provisions |
|
0.096 |
0.032 |
|
Total
Current Liabilities |
|
8.544 |
11.416 |
|
|
Net Current Assets |
|
25.128 |
17.936 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
|
0.000 |
0.000 |
|
|
|
|
|
|
|
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TOTAL |
|
46.842 |
39.117 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
|
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
|
83.994 |
78.940 |
|
|
Other Income |
|
0.273 |
0.610 |
|
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Total Income |
|
84.267 |
79.550 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
|
1.142 |
406 |
|
|
Provision for Taxation |
|
0.128 |
0.051 |
|
|
Profit/(Loss) After Tax |
|
1.014 |
0.355 |
|
|
|
|
|
|
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Expenditures : |
|
|
|
|
|
|
Financial Charges |
|
3.107 |
2.940 |
|
|
Other Expenditure |
|
76.911 |
73.264 |
|
Total Expenditure |
|
80.018 |
76.204 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
PAT / Total Income |
(%) |
|
1.20 |
0.45 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
|
1.36 |
0.51 |
|
|
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|
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Return on Total Assets (PBT/Total Assets} |
(%) |
|
1.83 |
0.70 |
|
|
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Return on Investment (ROI) (PBT/Networth) |
|
|
6.37 |
2.38 |
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|
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|
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Debt Equity Ratio (Total Liability/Networth) |
|
|
1.94 |
1.62 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
|
3.94 |
2.57 |
LOCAL AGENCY FURTHER INFORMATION
Industry Overview
The Indian textile industry is one the largest and oldest sectors in the
country and among the most important in the economy in terms of output,
investment and employment. The sector employs nearly 35 million people and
after agriculture, is the second-highest employer in the country. Its
importance is underlined by the fact that it accounts for around 4% of Gross
Domestic Product, 14% of industrial production, 9% of excise collections, 18%
of employment in the industrial sector, and 16% of the country’s total exports
earnings. With direct linkages to the rural economy and the agriculture sector,
it has been estimated that one of every six households in the country depends
on this sector, either directly or indirectly, for its livelihood.
A strong raw material production base, a vast pool of skilled and
unskilled personnel, cheap labour, good export potential and low import content
are some of the salient features of the Indian textile industry. This is a
traditional, robust, well-established industry, enjoying considerable demand in
the domestic as well as global markets.
The global textile and clothing industry is estimated to be worth about
US$ 4,395 bn and currently global trade in textiles and clothing stands at
around US$ 360 bn. The
The Indian textile industry is valued at US$ 36 bn with exports
totalling US$ 17 bn in 2005-2006. At the global level,
·
·
·
·
In terms of spindleage, the Indian textile industry
is ranked second, after
·
Around 6% of global rotor capacity is in
·
The country has the highest loom capacity,
including handlooms, with a share of 61% in world loomage.
Cotton textiles continue to form the predominant base of the Indian
textile industry, though other types of fabric have gained share in recent
years. In 1995-96, the share of cotton and manmade fabric was 60% and 27%
respectively. More recently, cotton fabrics accounted for 46% of the total
fabric produced in 2005-06, while man-made fibres held a share of 41%. This
represents a clear shift in consumer preferences towards man-made fabric.
The fibre and yarn-specific configuration of the textile industry
includes almost all types of textile fibres, encompassing natural fibres such
as cotton, jute, silk and wool; synthetic / man-made fibres such as polyester,
viscose, nylon, acrylic and polypropylene (PP) as well as multiple blends of
such fibres and filament yarns such as partially oriented yarn (POY). The type
of yarn used is dictated by the end product being manufactured.
The Man-made textile industry comprises fibre and filament yarn
manufacturing units of cellulosic and non-cellulosic origin. The cellulosic
fibre/yarn industry is under the administrative control of the Ministry of
Textiles, while the non-cellulosic industry is under the administrative control
of the Ministry of Chemicals and Fertilisers.
It is well-established that
The industry structure is fully vertically integrated across the value
chain, extending from fibre to fabric to garments. At the same time, it is a
highly fragmented sector, and comprises small-scale, non-integrated spinning,
weaving, finishing, and apparel-making enterprises. The unorganised sector
forms the bulk of the industry, comprising handlooms, powerlooms, hosiery and
knitting, and also readymade garments, khadi and carpet manufacturing units.
The organised mill sector consists of spinning mills involved only in spinning
activities and composite mills where spinning, weaving and processing
activities are carried out under a single roof.
As in January 2006, there were 1779 cotton/man-made fibre textile mills
in the organised sector, with an installed capacity of 34.1 million spindles
and 395,000 rotors. Of these, 218 were composite mills which accounted for just
3% of total fabric production, with 97% of fabric production happening in the
unorganised segment. Cloth production in the mill sector has fallen from 1,714
million sq mtrs in 1999-2000 to a projected 1,493 million sq mtrs in 2005-06,
declining at a rate of 2% per annum. As a result, the number of sick units in
the organised segment has also been growing rapidly.
The competitiveness of composite mills has declined in comparison to the
powerlooms in the decentralised segment. Policy restrictions relating to labour
laws and the fiscal advantages enjoyed by the handloom and powerloom sectors
have been identified as two of the major constraints responsible for the
declining scenario of the mill sector.
Nonetheless, overall cloth production in the country has been growing at
3.5% per annum since 2000, with growth driven largely by the powerloom sector.
Being the largest manufacturer of fabric in the country, the powerloom sector
produces a wide variety of cloth, both grey as well as processed. According to
the Ministry of Textiles, there are 1.923 mn powerlooms in the country
distributed over 430,000 units. The sector accounts for 63% of the total cloth
production in the country and provides employment to 4.815 mn people.
Trends in
Production
Yarn and fabric production has been growing annually at 1.9% and 2.7%
respectively, since 2000. Yarn production has increased from 3,940 mn kg in
1999- 00 to 4,326 mn kg in 2004-05. Man-made yarn has driven much of this,
showing a robust growth of 4.3% in the last five years. Spun yarn production
and the cotton yarn sector have also grown, albeit less impressively, recording
growths of 2.4% and 0.6% respectively.
Trade Scenario
According to the provisional DGCI&S data, textile exports during
fiscal 2005- 06 stood at around US$17 billion, recording a 22% growth
year-on-year. Except for man-made textiles, all segments in the textile
industry, including handicraft carpets, wool and silk, have recorded a growth
in exports during 2005-06 -- the first year since the phasing out of the quota
system in the global market.
Readymade garments (RMG) is the largest export segment, accounting for a
considerable 45% of total textile exports. This segment has benefited
significantly with the termination of the Multi-Fibre Arrangement (MFA) in Jan
05. In 2005-06, total RMG exports grew by 29%, touching US$ 7.75 bn. In 2003-04
and 2004-05, the growth in RMG exports was 8.5% and 4.1% respectively. The jump
in 2005-06 exports has been largely due to the elimination of quotas.
Exports of cotton textiles -- which include yarn, fabric and made-ups --
constitute over 2/3rd of total textiles exports (excluding readymade garments).
Overall, this segment accounts for 26% of total textile exports. According to
the Ministry of Textiles, in 2005-06, total cotton textile exports Source:
Ministry of Textiles, GoI Source: Ministry of Textiles, GoI XVI were worth US$
4.5 bn, implying a growth of 27% over the exports in 2004-05, which were worth
US$ 3.5 bn.
Man-made textiles exports have witnessed a decline of 2.5% in 2005-06.
Between 1999-2000 and 2002-03, man-made textiles exports were growing at around
30% per annum. The slowdown began since 2003-04 and have been on the decline
since.
Major export destinations for
Government
Initiatives
The Government’s role in the textile industry has become more reformist
in nature. Initially, policies were drawn to provide employment with a clear
focus on promoting the small-scale industry. The scenario changed after 1995,
with policies being designed to encourage investments in installing modern
weaving machinery as well as gradually eliminating the pro-decentralised sector
policy focus. The removal of the SSI reservation for woven apparel in 2000 and
knitted apparel in 2005 were significant decisions in promoting setting up of
large-scale firms. Government schemes such as Apparel Parks for Exports (APE)
and the Textile Centres Infrastructure Development Scheme (TCIDS) now provide
incentives for establishing manufacturing units in apparel export zones.
The new Textile Policy of 2000 set the ball rolling for policy reforms
in the textile sector, dealing with removal of raw material price distortions,
cluster approach for powerlooms, pragmatic exit of idle mills, modernisation of
outdated technology etc. The year 2000 was also marked by initiatives of
setting up apparel parks; 2002 and 2003 saw a gradual reduction in excise
duties for most types of fabrics while 2004 offered the CENVAT system on an
optional basis. The Union Budget of 2005-2006 announced competitive progressive
policies, whose salient features included:
A major boost to the 1999-established Technology Upgradation Fund Scheme
for its longevity through a Rs 4.35 bn allocation with 10% capital subsidies
for the textile processing sector
·
Initiation of cluster development for handloom
sector
·
Availability of health insurance package to 0.2 mn
weavers from 0.02 mn initially
·
Reduction in customs duty from 20% to 15% for
fibres, yarns, intermediates, fabrics and garments; from 20% to 10% on textile
machinery and from 24% to 16% in excise duty for polyester oriented
yarn/polyester yarn
·
Reduction in corporate tax rate from 35% to 30%
with 10% surcharge
·
Reduction in depreciation rate on plant and
machinery from 25% to 15%
·
Inclusion of polyster texturisers under the optimal
CENVAT rate of 8%
To meet the challenges of the post-MFA setup, the Government of India
initiated a reforms process which aimed at promoting large capital investments,
pruning cumbersome procedures associated with the tax regime, etc. The Textile
Vision 2010 was born as a result of interaction between the government and the
industry which envisages around 12% annual growth in the textile industry from
US$ 36 billion now to US$ 85 billion by 2010. Additionally, Vision 2010 also
proposes the creation of an additional 12 million jobs through this initiative.
Dayanand Textile Industries Private Limited
manufactures cotton suiting & shirting, school uniforms, uniforms, cotton fabrics,
synthetic fabrics, dress material, polyester cotton and viscose suiting &
shirting.
The subject company is a Private Limited
company which was incorporated in 1984.
The subject is a manufacturer of cotton fabrics. It functions with one plant located at
Bhilwara, Rajasthan with 36 weaving looms.
The production capacity of the plant is 200,000 Meters of fabric per
month. The capacity utilisation of the
plant is 9%. The domestic market
accounts for the entire turnover. Some
of its domestic customers include
In the last two years, Dayanand Textiles
showed a growth of 6% in its revenue and expects to continue with the same
growth trend in the next two years.
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.40.78 |
|
|
1 |
Rs.81.34 |
|
Euro |
1 |
Rs.55.53 |
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 |
7 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
50 |
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 |
|