MIRA
INFORM REPORT
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Report Date : |
11.05.2007 |
IDENTIFICATION DETAILS
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Name : |
PIONEER EMBROIDERIES LIMITED |
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Registered Office : |
Hakoba compound, |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
25.10.1991 |
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Com. Reg. No.: |
063752 |
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CIN No.: [Company
Identification No.] |
L17291MH1991PLC063752 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMP15579E |
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PAN No.: [Permanent
Account No.] |
AAACP3869R |
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Legal Form : |
It is a public limited liability company. The company’s shares are listed on the
Stock Exchanges |
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Line of Business : |
The company is engaged in to design and manufacture embroidery fabrics and laces. |
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 2400000 |
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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 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 : |
Hakoba Compound, |
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Tel. No.: |
91-22-26906100/26997888 to 93 |
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Fax No.: |
91-22-28546819/26901358 |
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E-Mail : |
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Website : |
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Office : |
Chennai Office : Kumbhat Complex, 29 & 30, Ralan Bazar, 3rd Floor, Chennai - 600
003 4986, Baratooti Sadar Bazor, I'1 Floor, Jaipur Office Plot No. 1, Durga Vihar, Kolkata Office 14/2, 37/115, 2"JMain Road, Gangadera Layout, 2 l dFloor,Vijaya Nagar,
Bangalore-560 040. Adarsh Market - 2, Shop No. 546 & 547, Mughat Dying Lane, Near A,P. Market, Udhano, |
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Factory 1 : |
Embroidery
Plants: SARIGAM : 1637, 1638-1639, G.I.D.C. Sarigam, Dist. Valsad, NAROLI : Primer Industrial Estate, Survey No.678/1/2, Village Naroli, Dadra 8.
Nagar Haveli (U.T.) MUMBAI : Hakoba Compound, Chinnamaddampalayam, Bobbin Lace
Plants: DADRA : Ankur, Plot No. 1, Sheetal Industrial Estate, Demni, Dadra & Nagar
Haveli (U.T.) KARAD : Survey No. 150/4, Village Karad, Silvassa, Dadra & Nagar Haveli
(U.T.) |
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Mumbai Sales Office: |
Godown No.l, Rajada Chawl No.2/4, Old Hanuman 2ndCross Road, Mumbai -
400 002 |
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Tel. No.: |
91-22-6699 7888 |
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Fax No.: |
91-22-2854 6819 |
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E-Mail : |
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Website: |
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Sales and Marketing Office: |
35, |
DIRECTORS
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Name : |
Mr. Raj Kumar Sekhani |
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Designation : |
Chairman |
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Name : |
Mr. Harsh Vardhan Bassi |
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Designation : |
Executive Director |
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Name : |
Mr. Ajay Kumar Agrawal |
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Designation : |
Executive Director |
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Name : |
Mr. Mahesh Singhi |
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Designation : |
Non-Executive Director |
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Name : |
Mr. Babulal Choraria |
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Designation : |
Independent Professional Director |
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Qualification : |
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Name : |
Mr. Dev Raj Mehta |
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Designation : |
Independent Professional Director |
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Name : |
Mr. Rajeev Jagdeesh Puri |
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Designation : |
Independent Professional
Director |
KEY EXECUTIVES
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Name : |
Mr. Arvind Bajpai |
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Designation : |
Company Secretary And Compliance Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters
Holding |
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Indian Promoters: |
56,32,714 |
54.63 |
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Foreign Promoters |
Nil |
Nil |
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Persons acting in concert |
97,222 |
0.94 |
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Sub Total |
57,29,936 |
55.57 |
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Non-Promoter
Holding |
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Institutional Investors: |
— |
— |
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Mutual Funds and UTI |
900 |
0.01 |
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Banks, Financial Institutions, Insurance Companies (Central /State Govt. Institutions/Non-Govt. Institutions) |
— |
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Flls |
1,27,449 |
1.24 |
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Sub Total |
1,28,349 |
1.25 |
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Others |
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Private Corporate Bodies |
7,54,840 |
7.32 |
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Indian Public |
35,14,354 |
34.08 |
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NRIs/OCBs |
1,83,047 |
1.78 |
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Sub Total |
44,52,241 |
43.18 |
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GRAND TOTAL |
1,03,10,526 |
100.00 |
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BUSINESS DETAILS
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Line of Business : |
The company is engaged in to design and manufacture embroidery fabrics and laces. |
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Products : |
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PRODUCTION STATUS
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Particulars |
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Licensed
Capacity |
Installed
Capacity Thousand
Meters |
Actual
Production Millions
Stitches |
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Embroidery |
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-- |
4609 |
2813 |
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Bobbin Lace |
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-- |
37379 |
21308 |
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Process House |
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6000 |
6000 |
3877 |
GENERAL INFORMATION
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No. of Employees : |
2200 |
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Bankers : |
State Bank Of Union Bank Of Ing Vysya Bank Ltd. |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Bhageria Naredi & Associates Chartered Accountants |
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Associates/Subsidiaries : |
Subsidiaries: Hakoba Lifestyle Limited Grant Apparel Pvt. Ltd. Mas Embroideries Pvt. Ltd. Associates: Pioneer E-Com Fashion Ltd. Reach Industries Pvt. Ltd. Royal Embroideries Pvt. Ltd. |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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21000000 |
Equity Shares |
Rs.10/- each |
Rs.210.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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10310526 |
Equity Shares |
Rs.10/- each |
Rs.103.105
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 |
103.105 |
68.737 |
68.700 |
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2] Share Application Money |
0.000 |
0.000 |
00000 |
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3] Reserves & Surplus |
507.739 |
452.760 |
378.100 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
610.844 |
521.497 |
446.800 |
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LOAN FUNDS |
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1] Secured Loans |
724.763 |
734.140 |
501.000 |
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2] Unsecured Loans |
105.000 |
50.000 |
68.900 |
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TOTAL BORROWING |
829.763 |
784.140 |
569.900 |
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DEFERRED TAX LIABILITIES |
17.918 |
17.444 |
0.000 |
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TOTAL |
1458.525 |
1323.081 |
1016.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
614.877 |
442.059 |
481.800 |
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Capital work-in-progress |
54.811 |
177.839 |
4.200 |
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Intangible Assets |
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14.803 |
0.000 |
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INVESTMENT |
131.377 |
94.389 |
67.700 |
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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 |
305.512
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295.677 |
247.200 |
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Sundry Debtors |
310.011
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254.276 |
231.700 |
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Cash & Bank Balances |
52.961
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56.138 |
29.900 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
142.041
|
101.547 |
83.600 |
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Total
Current Assets |
810.525
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707.638 |
592.400 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
153.065
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113.647 |
116.400 |
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Provisions |
0.000
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0.000 |
14.000 |
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Total
Current Liabilities |
153.065
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113.647 |
130.400 |
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Net Current Assets |
657.460
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593.991 |
462.000 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
1.000 |
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TOTAL |
1458.525 |
1323.081 |
1016.700 |
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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 |
1300.844 |
1145.298 |
982.200 |
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Other Income |
0.091 |
1.807 |
10.900 |
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Increase/ Decrease in Stock |
16.311 |
37.961 |
20.100 |
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Total Income |
1317.246 |
1185.066 |
1013.200 |
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Profit/(Loss) Before Tax |
116.544 |
100.771 |
81.800 |
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Provision for Taxation |
9.561 |
10.601 |
8.800 |
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Profit/(Loss) After Tax |
106.983 |
90.170 |
73.000 |
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Earnings in Foreign Currency : |
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Export Earnings |
66.370 |
67.218 |
0.000 |
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Total Earnings |
66.370 |
133.588 |
0.000 |
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Imports : |
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Raw Materials |
14.240 |
13.948 |
0.000 |
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Stores & Spares |
2.844 |
0.891 |
0.000 |
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Capital Goods |
14.542 |
140.988 |
0.000 |
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Total Imports |
31.626 |
155.827 |
0.000 |
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Expenditures : |
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Operating
Expenses |
1072.979 |
951.657 |
0.000 |
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Interest |
71.554 |
60.803 |
0.000 |
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Excise Duty |
1.234 |
21.361 |
0.000 |
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Depreciation & Amortization |
55.608 |
50.475 |
0.000 |
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Raw
Materials |
0.000 |
0.000 |
448.900
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Excise
Duty |
0.000 |
0.000 |
36.400
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Power
& Fuel Cost |
0.000 |
0.000 |
24.700
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Other
Manufacturing Expenses |
0.000 |
0.000 |
165.800
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Employee
Cost |
0.000 |
0.000 |
79.400
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Selling
and Administration Expenses |
0.000 |
0.000 |
65.400
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Miscellaneous
Expenses |
0.000 |
0.000 |
08.500
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Total Expenditure |
1201.375 |
1084.296 |
829.100 |
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SUMMARISED RESULTS
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PARTICULARS |
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31.03.2007 |
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Type |
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Full
Year |
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Sales
Turnover |
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1513.000 |
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Other
Income |
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|
01.900 |
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Total
Income |
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|
1514.900 |
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Total
Expenditure |
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|
1183.400 |
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Operating
Profit |
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|
331.500 |
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Interest |
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|
99.000 |
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Gross
Profit |
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|
232.500 |
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Depreciation |
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|
69.000 |
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Tax |
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|
11.000 |
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Reported
PAT |
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|
152.500 |
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Dividend
(%) |
|
|
00.000 |
KEY RATIOS
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Debt-Equity
Ratio |
1.43 |
1.40 |
1.23 |
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Long
Term Debt-Equity Ratio |
0.86 |
0.81 |
0.71 |
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Current
Ratio |
1.62 |
1.56 |
1.59 |
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TURNOVER
RATIOS |
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Fixed
Assets |
1.63 |
1.68 |
1.74 |
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Inventory |
4.32 |
4.23 |
4.63 |
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Debtors |
4.60 |
4.72 |
5.43 |
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Interest
Cover Ratio |
2.56 |
2.56 |
2.48 |
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Operating
Profit Margin(%) |
19.03 |
18.82 |
18.74 |
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Profit
Before Interest And Tax Margin(%) |
14.75 |
14.42 |
13.96 |
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Cash
Profit Margin(%) |
12.52 |
12.26 |
12.22 |
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Adjusted
Net Profit Margin(%) |
8.24 |
7.86 |
7.43 |
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Return
On Capital Employed(%) |
13.95 |
14.25 |
15.77 |
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Return
On Net Worth(%) |
18.90 |
18.80 |
18.89 |
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STOCK PRICES
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Face Value |
Rs.10.00 |
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High |
Rs.197.90 |
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Low |
Rs.185.00 |
LOCAL AGENCY FURTHER INFORMATION
YEAR IN RETROSPECT
During the year under review, Pioneer Embroideries Limited continued to
register substantial growth in its overall
sales. Gross Sales stood at Rs. 1300.800 million, up from Rs. 1145.300
million. They achieved a growth of 13.58% compared to the previous financial
year.
Earnings before interest, depreciation, tax and amortization for the
period stood at Rs. 243.700 million this implies a margin of 18.74% on Gross
Sales. With high interest cost (Rs.71.600 million) and depreciation (Rs.55.600
million), Profit before Tax for the Company stood at Rs.116.500 million. The
Net Profit for the year, after providing for current tax, deferred tax and
Fringe Benefit Tax liability, stood at Rs. 107.000 million.
As of
A review of the performance during the year is given under the section
Management Discussion and Analysis
Report.
EXPORTS
For the Financial Year ended 31" March 2006, their Direct Export
Sales was Rs. 68.800 million. This is an increase of Rs. 3.700 millions as
compared to Rs. 65.100 million in the previous year. They boast of having
countries as
SCHEME OF AMALGAMATION
The Equity Shareholders, at the Court convened meeting held on
The appointed date of the Scheme of Amalgamation is
filing the certified true copy of the Order of respective Hon'ble High
Courts with the Registrar of Companies at
Mumbai and at Karnataka.
SUBSIDIARY COMPANY
The expansion plans of the Company include setting up an embroidery
manufacturing unit at Northern Part of the
Country. To cater to the requirements of garment manufactures and
exporters of the Northern region, Mas Embroideries Private Limited has been
acquired. It is located at Manesar, Gurgaon.. The total consideration of the
acquisition was approximately Rs. 47.500 million and it became a wholly-owned
subsidiary. The company plans to modernize the existing facilities and will
substantially increase the capacity of this plant. Mas Embroideries Private
Limited had suffered a loss of Rs. 7.600 million during the financial year
ended
During the year under review, Pune based Grant Apparel Private Limited
and Mumbai based Hakoba Lifestyle
Limited continued to be Subsidiaries.
As at
The manufacturing Activities of Grant Apparel Private Limited was
stopped since
Company has incurred a loss of Rs.3.200 million as compared to Rs.1.300
million in the previous year.
The Balance Sheet, Profit and Loss Account, Auditor's Report and
Director's Report of its Subsidiaries, Hakoba
Lifestyle Limited, Mas Embroideries Private Limited and Grant Apparel
Private Limited has been attached.
RETAIL
The retail operation is being carried out through their subsidiary
Hakoba Lifestyle Limited (HLL) under brand
'HAKOBA'. In line with HLL plan to expand its reach to customers through
ret ah outlets, it had added up 1 7 more
retail outlets throughout the country making the total retail outlets to
34 as at the end of financial year 2005-06.
Now, the brand "HAKOBA' has its presence through retail outlets in
Mumbai (12 stores), Secunderabad, Ahmedabad,
While spreading presence across the cities, HAKOBA also plans to enlarge
its product range to home furnishing and accessories. Created with a fine sense
of design, painstakingly made from carefully selected materials, HAKOBA's
apparels are crafted with a passion for detail, thus enriching the Brand
experience. The Brand is targeted at women, who are today's people, supremely
confident and conscious of the image they project. However, Hakoba also plans
to expand its brand presence from currently being the most-preferred brand for
women to also becoming the one of the favorite brands for the youngsters.
Taking forward Hakoba's roadmap of becoming global player in women's
wear, the Company has roped in Film
Stars Hema Malini and Esha Deol as Brand Ambassadors in November 2006.
FORWARD LOOKING STATEMENT
Statement made in the Management Discussion and Analysis and relating to
Company's objectives, projections,
outlook, expectations, estimates, etc., may constitute forward looking
statements within the meaning of applicable
securities, laws and regulations. These statements are based on certain
assumptions, which cannot be guaranteed by the Company. Several factors, over
which the Company may not have any direct control, could make a significant
difference to the company's expected operations. As such, actual results may
differ materially from such projections, whether expressed or implied, since it
would be beyond Company's ability to successfully
implement their growth strategy. The company undertakes no obligation or
responsibility to update forward-looking
statements and to publicly amend, modify or revise to reflect events or
circumstances after the date thereof on
the basis of any subsequent development, information or events.
The management of Pioneer Embroideries Limited (Pioneer) presents below
its analysis on the performance of
the Company during the year under review, i.e. financial year 2005-06,
overall business environment,
opportunities and threats, and the Company's business strategy to
sustain growth and leadership.
PERFORMANCE REVIEW
For FY05-06, they clocked Gross Sales stood at Rs.1300.800 Millions, up
from Rs.1145.300 Millions, which the Company had achieved in the previous
financial year, registering a growth of 13.57%.
They recorded an EBIDTA of Rs. 243.700 million for the year, up about
13.3% over previous year figure of Rs. 215.100 million.
Interest costs rose by about 17.7% to Rs 71.500 Millions, while
depreciation was higher by about 10% to Rs. 55.6 00 million.
After providing for tax to the tune of Rs 11.100 million (previous year
: Rs 10.600 million), net profit of the Company grew by about 19% to Rs 107.000
Millions. On an equity base of Rs 103.100 million, the Earnings per Share works
out to Rs 103.800 Million (previous year : Rs 0.875} and Cash Earnings per
Share is at Rs 158.200Millions (Rs 142.900 Millions in the previous year).
PERFORMANCE RATIOS
|
|
2005-06 |
2004-05 |
2003-04 |
2002-03 |
2001.02 |
2000.01 |
1999-00 |
1998-99 |
|
Long Term Debt-Equity |
0.66 |
0.80 |
0.55 |
0.71 |
0.66 |
0.52 |
0.49 |
0.53 |
|
Interest Coverage Ratio |
3.28 |
3.42 |
3.35 |
4.25 |
3.56 |
4.78 |
4.02 |
4.52 |
|
Asset Coverage Ratio – Gross |
2.22 |
1.62 |
2.67 |
1.86 |
1.75 |
2.14 |
2.79 |
2.44 |
|
Debtors Turnover Ratio |
4.20 |
4.50 |
4.26 |
6.61 |
5.33 |
5.75 |
5.23 |
6.77 |
|
Inventory Turnover (days) |
62.00 |
86.00 |
75.00 |
71.00 |
93.00 |
69.00 |
57.00 |
57.00 |
|
Earnings per share (Rs.) |
10.38 |
8.75 |
7.07 |
8.16 |
6.67 |
6.24 |
4.29 |
4.52 |
|
Cash earnings per share (Rs.) |
15.82 |
14.29 |
12.31 |
11.88 |
9.21 |
8.58 |
6.18 |
7.24 |
|
]ook Value (Rs.) |
59.24 |
75.87 |
64.87 |
55.70 |
44.78 |
36.65 |
28.37 |
22.86 |
|
Return on Average Networth (%) |
17.48 |
18.64 |
18.70 |
25.56 |
25.80 |
30.22 |
26.34 |
21.56 |
|
Return on Capital Employed (%) |
13.70, |
13.82 |
15.53 |
18.33 |
18.73 |
21.90 |
21.16 |
7.14 |
During the year under review, their Company's embroidery capacity
witnessed a substantial increase to 4600
mln. stitches, on account of acquisition of entire fixed assets of a
South Korean Company, comprising of 13
machines . Further, with the merger of Royal and Grant with the Company,
the merged entity would have enhanced capacity of around 5600 mln. stitches.
Pioneer's capacity utilization on the expanded capacity is given in the
adjoining table, although the capacity
utilization as percentage of installed capacity is approx 60%, capacity
utilization in terms of total machine shift
capacity is more than 90%. This is because the installed capacity is
calculated mathematically taking into account
the speed of the machines multiplied by no. of minutes, no. of hrs. in a
day and no. of days in a year without
considering the down time mainly on account of change of yarn, change of
fabrics, machine break down,
preventive maintainance and so on.
EXPORTS
Direct Exports during the financial year 2005-06 were at Rs. 688 lac
consisting of only 5% of the total Sales.
These were primarily to the Countries like,
market with the Korean embroidery plant now installed in one of the unit
of the company and its designs and
marketing data base as the unit used to mainly cater to the highly
demanding European market.
RETAIL L
The company continue to invest restheirces in the retail segment, being
nurtured under the Brand Hakoba under
its subsidiary company Hakoba Lifestyles Limited. As on date the company
has setup 48 exclusive Hakoba outlets across 27 cities. The company plans to
ramp up numbers of stores to 200 in couple of years time.While most of these
would be franchisee stores, there would also be a mix of company-managed and
company-owned
showrooms. The product range and price points would also enlarge, with
percentage of ready-to-wear garments
and mens' products improving. Embroidered accessories, home furnishings,
overseas stores, etc., are some of
the other plans under consideration. However, the task of establishing
the brand remains difficult, although Hakoba does have a good brand recall
across regions. Although the retail business of ready-made garments for both
men and women is huge, it is also replete with fragmentation, competition from
large number of players - small and big - and ever larger number of product
offerings. While the middle-aged customers are quick to endorse Hakoba products,
the discerning, fashion-conscious youth are looking beyond the quality aspect.
Brand loyalty in this consuming segment is difficult to achieve, as the
demanding customers are willing to try out anything, which is new and
appealing. Multiplicity of brands and outlets and a plethora of products at
various price points, force all the players, to become innovative in the choice
of fabrics, designs, styles and colors, if they need to achieve brand
preference.To address this situation partly, the Company has roped in Film
Stars Hema Malini and Esha Deal as Brand Ambassadors in November 2006.
MERGER & ACQUISITION
The Financial year 2005-06 saw the Company taking another important step
to merge Royal Embroideries Private
Limited (Group Company) and Grant Apparel Private Limited (Wholly-owned
Subsidiary) with the Company. The
Scheme of Amalgamation of Royal Embroideries Private Limited and Grant
Apparel Private Limited with Pioneer
Embroideries Limited was approved by the Equity Shareholders at their
meeting held on
was approved by the Hon'ble High Court of Bombay on
later of the dates of filing the Certified true copy of the Order of
Hon'ble High Court(s) with Registrar of Companies
at
The appointed date for the merger was
resources of the three companies, the performance in the coming years is
bound to improve.
Having approved the merger of Royal Embroideries Private Limited and
Grant Apparel Private Limited with Pioneer, the Company further plans to merge
another Company, Crystal Lace (India) Limited, based at New Bombay. The
Company's capabilities in eyeing acquisition opportunities in the embroidery
segment, successfully executing it and integrating the same with the existing
set up, in the process enhancing shareholder value to the utmost, resulted into
another acquisition of Mas Embroideries Pvt. Ltd., a manufacturer of
Embroidered Fabrics and Laces, situated at Manesar, Gurgaon.
With this acquisition, Mas Embroideries Pvt. Ltd. became a wholly-owned
subsidiary of Pioneer Embroideries Ltd.
Pioneer had earlier planned to set up an embroidery manufacturing unit
in North, to cater to the requirements
of garment manufacturers and exporters of that region. The Company
already has manufacturing bases in Western and
During the year under review, the Company is setting up Polyester Dop
Dyed Yarn Plant with installed capacity
of around 6,000 M.T. p.a., at Kala Amb, Dist. Sirmaur in Himanchal
Pradesh. The end product find application in
embroideries, furnishing, carpet, weaving etc. A part of the production
will be consumed in-house in embroidery
segment.The Total Project Cost of setting up the Polyester Dop Dyed Yarn
Plant is approx. Rs. 48 crore. The
commercial production of Dope Dyed Yarn is expected to start in Feburary
2007.
During the year under review, the Company has taken steps to expand the
capacity of braided lace segment.
The company has plans to expand the capacity by setting up 120 new
braided lace making machine at its existing
location at Karad, (U.T).
INDUSTRY OVERVIEW
Overall, Embroidery, Fabrics and Laces (EFL) business has been
consistently growing at a double-digit rate. It has received a boost mainly
because of the increasing fashion-conscious attitude of the populace,
especially in the urban and semi-urban cities. The booming middle-class, with
its expanding purchasing power and disposable
income, has been responsible for transforming clothing from being a mere
necessity to being an important way
of life.This behavioural change is unrestricted to urban areas, but cuts
across sections of society and demographic boundaries.
For embroidery players, which mainly derive their growth from
manufacturers of garments for ladies and children,
such a scenario of wider markets is definitely welcome. However, with
order sizes becoming substantially higher,
and issues like quality and timely deliveries taking centrestage, larger
players like Pioneer, in the embroidery
segment would stand to benefit more.
The new textile policy of the Indian Government has set a target of
textile and apparel export of US$50 billion
by 2010 from the present level of US$13 billion of which garment exports
will be US$25 billion (presently US$6
billion). This target itself indicates the scope in the global textile
market that exists for the Indian textile industry.
The Technology Upgradation Fund Scheme ("TUFS") continues to
facilitate the modernisation and up-gradation of the machinery by providing
interest subsidies to the sector. Weaving, processing and garment machinery covered
under TUFS have extended the facility of accelerated depreciation
The growth in embroideries is likely to ride upon the overall garment
business growth, and is estimated to be in
the range of 15-20% atleast in the coming years. Since technologically,
large Indian embroidery players are at
par with overseas companies, and given the added benefit of lower labour
cost and innovative product
development skills, it could be possible that overseas garment
manufacturers could directly get embroidery job
work done from
For larger players in the organized sector, the growth could be more as
they would not only be able to tap the
export market, they could also eat into the current share of the
unorganized sector in the domestic market.
However, increased turnover levels would not necessarily result in
corresponding higher profits, as margins would
remain under pressure due to greater competitive environment. Higher
levels of value addition would be difficult
and players would have to become more cost conscious, while remaining
proactive in their R&D initiatives to
offer newer designs based on the rapidly changing consumer tastes in the
fashion industry.
THREATS AND CONCERNS
Although the Embroidery Industry has been growing steadfastly, it still
faces the following threats,
• Rapidly changing fashion trends and preferences
• A very serious overall economic downturn and confidence erosion, in
the domestic market, could affect the
ladies garment sector as a whole and would in turn affect the embroidery
Industry, since it is still mainly
dependent on the domestic demand.
• Increased exports in future could lower overall margins, as margins on
exports are less than those on domestic
sales. Unfavorable Rupee-Dollar movement could also affect industry
margins
The Company with its continuous efforts on spearheading the marketing by
enlarging the product range is hopeful
of sustaining its business plan.
FUTURE CAPITAL COMMITMENTS
The Company's future capital expenditure is based on its reading of the
overall future potential and business
environment, and is in line with its long-term business strategy.
Apart from organic growth, Pioneer is always eyeing profitable acquisition
targets, which fit well in its overall
business strategy. These could be either in embroidery field, thus
giving additional capacities immediately, or in
related products where Pioneer could use its wholesale and retail
network to sell newer products, thus capitalizing
on its core strength of marketing to drive growth. Pioneer has already
in the past demonstrated its competence
in successfully taking over other companies/ businesses and integrating
them with its own operations.
The Company's ambition towards ascendancy is possible only through
continuous increase in capacities, either
through acquisition, mergers or expansions. In order to meet the
anticipated constraint on capacities in the near
future and value-added products, it has plans to upgrade its
manufacturing facilities at
Northern region is the main hub for the garment exports from the
country. To increase its foothold in this region,
the company has plans to substantially increase the embroidery capacity
of Mas Embroideries Private Limited.
Fixed Assets:
Land
Building
Plant and Machinery
Furniture and Machinery
Furniture and Fixture
Vehicles
Office Equipments
Computers
Electrical Installations
Bore well
Company, promoted by
Rajkumar Sekhani and Manak Chand Baid, was incorporated in Oct.'91 at
During 1996-97, to improve the bottom lines of the company and to meet the
growing demand in fashion industry, it has taken up a expansion project at Silvassa
by importing 12 computerised embroidery machines having installed capacity of
4.600 million meters p.a. The financing was done through by way of equity issue
or optional redeemable convertable preference shares to the promoters,
Directors, their friends,relatives and associates and the same was commissioned
during 1997-98.
During 1999-2000 the Crochet laces Division started
commercial production. The Company in order to consolidate its manufacturing
base in embroidery has signed a memorandum of understanding with promoters of
Salzer Textiles Limited, an Embroideries Manufacturer for taking over that
company.
The company has acquired the management control of
The company has also acquired the manufacturing base of
Fancy Corporation Limited at Borivali,Mumbai and has installed 3 latest
computerized embroidery machines in 2001-02. Out of the 4 machines three
machines were installed in 2002-03 and erection of two more machines was also
completed and the commercial production is expected in the second quarter of
the current financial year. The machines were installed at the Borivali plant.
The total cost of the expansion were Rs.265.000 million.
The expansion of bobbin lace division under 100% EOU unit at Silvassa was also
completed as per the schedule at a estimated outlay of Rs.35.000 million which
were funded through internal accruals of the company. The Brand Hakoba has also
been acquired from Fancy Corporation Ltd.
The company has expanded the installed capacity of
Embrodiery during the financial year 2003-04 by 1976470000(Nos) and with this
expansion,the total capacity has risen to 3358870000(Nos).
During April 2004,Salzer Textiles Ltd has been merged with the company and
according the scheme of merger, during May 2004,Shareholders of Salzer Textiles
Ltd have been allotted One Equity Share of Rs.10 each of Pioneer Embroideries
Ltd for every Twenty Five Shares of Rs.10 each held.
Another company J Textiles Ltd(doing job work for PEL) has
also been merged with the company and during May 2004,according to the scheme
of Amalgamation, One Equity Share of Rs.10/- each have been allotted for
every Three Equity Shares held by the shareholders in J J Textiles Ltd.
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.41.34 |
|
|
1 |
Rs.81.81 |
|
Euro |
1 |
Rs.55.74 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--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 |
|
55 |
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 |
|