MIRA
INFORM REPORT
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Report Date : |
15.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
ASHIMA LIMITED |
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Registered Office : |
Texcellence Complex, Khokhra Mehmedabad, Ahmedabad, Gujarat |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
17.06.1982 |
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Com. Reg. No.: |
5253 |
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CIN No.: [Company
Identification No.] |
L99999GJ1982PLC005253 |
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Legal Form : |
A closely held Public Limited Liability Company |
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Line of Business : |
Manufacturing of fabrics, denims and cotton yarns. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ca |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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Status : |
Moderate |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is an old company having moderate track. Company’s profitability is under sever
pressure. It has huge accumulated
losses. Payments are reported as slow
and delayed. The Company can be considered for any business dealings on fully safe
and secured trade terms and conditions only. |
LOCATIONS
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Registered Office : |
Texcellence Complex, Khokhra Mehmedabad, Ahmedabad, Gujarat, India |
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Tel. No.: |
91-79-2773513,
2727222 |
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Fax No.: |
91-79-2773061 /
996 |
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E-Mail : |
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Website : |
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Factory 1 : |
1B, Ashima Complex, Kalol - Kadi Highway, Village
Karannagar, Taluka Kadi, District Mehsana, North Gujarat |
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Factory 2 : |
Texcellence Complex, Near Anupam Cinema, Khokhara Mehmedabad, Ahmedabad - 380 008, Gujarat. |
DIRECTORS
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Name : |
Mr. Chintan Parikh |
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Designation : |
Director |
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Name : |
Mr. Saurabh Shah |
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Designation : |
Director |
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Name : |
Mr. Bakul Dholakia |
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Designation : |
Director |
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Name : |
Mr. Bihari Shah |
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Designation : |
Director |
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Name : |
Mr. J. R. Baxi |
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Designation : |
Director |
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Name : |
Mr. S. K. Tandon |
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Designation : |
Director |
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Name : |
Mr. Nitin Parekh |
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Designation : |
Director |
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Name : |
Mr. Hiren Mahadevia |
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Designation : |
Director |
BUSINESS DETAILS
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Line of Business : |
Manufacturing of fabrics, denims and cotton yarns. |
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Exports : |
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Products : |
100% Cotton Textiles / Yarn Dyed Fabrics, Denim, Grey Fabrics |
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Countries : |
Bangladesh, Europe, Hong Kong, Singapore, UK, USA |
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Imports : |
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Products : |
Cotton & Cotton Yarn, Dyes & Chemicals, Machinery Spares &
Consumables |
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Countries : |
China, Germany,
Greece, Indonesia, Japan, Pakistan, Singapore, Switzerland USA, Uzbekistan |
GENERAL
INFORMATION
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No. of Employees : |
2000 |
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Bankers : |
Ř State Bank of India, Ahmedabad, Gujarat Ř Bank of Baroda, Ahmedabad, Gujarat Ř Axis Bank Limited, Ahmedabad, Gujarat Ř State Bank of Saurashtra, Ahmedabad, Gujarat Ř Standard Chartered Grindlays Bank, Ahmedabad, Gujarat |
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Banking
Relations : |
- |
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Auditors : |
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Name : |
Dhirubhai Shah and Company Chartered Accountants |
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Associates/Subsidiaries : |
Ř Ashima Cottons
Private Limited Ř Ashima Textiles
Inc. |
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Group Companies : |
Ashima Ltd. |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
100000000 |
Equity Shares |
Rs. 10/- each |
Rs. 1000.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
53868800 |
Equity Shares |
Rs. 10/- each |
Rs. 538.688
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 [15 Months] |
31.12.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
538.700 |
538.700 |
538.700 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
[2060.500] |
[1844.800] |
[1195.100] |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
[1521.800] |
[1306.100] |
[656.400] |
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LOAN FUNDS |
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1] Secured Loans |
5416.100 |
5415.800 |
5087.000 |
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2] Unsecured Loans |
263.400 |
285.700 |
834.200 |
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TOTAL BORROWING |
5679.500 |
5701.500 |
5921.200 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
4157.700 |
4395.400 |
5264.800 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2837.100 |
3085.100 |
2513.900 |
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Capital work-in-progress |
0.400 |
0.000 |
7.800 |
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INVESTMENT |
368.400 |
338.500 |
558.600 |
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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 |
513.200
|
559.000 |
606.700 |
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Sundry Debtors |
139.900
|
132.100 |
1626.600 |
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Cash & Bank Balances |
56.100
|
82.100 |
150.100 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
550.800
|
572.900 |
234.400 |
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Total
Current Assets |
1260.000
|
1346.100 |
2617.800 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
352.600
|
388.100 |
454.200 |
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Provisions |
17.300
|
15.500 |
11.600 |
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Total
Current Liabilities |
369.900
|
403.600 |
465.800 |
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Net Current Assets |
890.100
|
942.500 |
2152.000 |
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MISCELLANEOUS EXPENSES |
61.700 |
29.300 |
32.500 |
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TOTAL |
4157.700 |
4395.400 |
5264.800 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 [15 Months) |
31.12.2004 |
|
|
Sales Turnover |
2361.400 |
4504.100 |
4830.300 |
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Other Income |
14.200 |
23.300 |
10.400 |
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Total Income |
2375.600 |
4527.400 |
4840.700 |
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Profit/(Loss) Before Tax |
[213.800] |
[653.900] |
[937.800] |
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Provision for Taxation |
1.900 |
[2.700] |
0.400 |
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Profit/(Loss) After Tax |
[215.700] |
[656.600] |
[938.200] |
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Expenditures : |
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Raw Materials |
1201.000 |
2681.500 |
3339.400 |
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Excise Duty |
00.000 |
15.600 |
131.400 |
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Power & Fuel Cost |
223.900 |
299.000 |
178.600 |
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Other Manufacturing Expenses |
434.900 |
579.000 |
426.700 |
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Employee Cost |
266.800 |
314.800 |
230.100 |
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Selling and Administration Expenses |
124.600 |
166.500 |
150.700 |
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Miscellaneous Expenses |
141.800 |
675.500 |
166.100 |
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Interest & Financial Charges |
31.400 |
255.100 |
823.000 |
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Depreciation |
152.700 |
203.000 |
303.500 |
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Total Expenditure |
2577.100 |
5190.000 |
5749.500 |
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QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
|
30.06.2006 |
30.09.2006 |
|
Type |
|
1st Quarter |
2nd Quarter |
|
Sales Turnover |
|
588.200
|
591.600
|
|
Other Income |
|
01.900
|
02.100
|
|
Total Income |
|
590.100
|
593.700
|
|
Total Expenditure |
|
587.900
|
596.300
|
|
Operating Profit |
|
02.200
|
-02.600
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Interest |
|
04.500
|
05.100
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Gross Profit |
|
-02.300
|
-07.700
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Depreciation |
|
42.500
|
43.000
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Tax |
|
00.300
|
00.700
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Reported PAT |
|
-45.100
|
-51.400
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KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 [15 Months) |
31.12.2004 |
|
Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
1.08 |
1.75 |
2.37 |
|
Fixed Assets |
0.73 |
0.89 |
0.99 |
|
Inventory |
4.40 |
6.18 |
7.75 |
|
Debtors |
17.36 |
4.10 |
3.00 |
|
Interest Cover Ratio |
-2.00 |
0.97 |
-0.14 |
|
Operating Profit Margin(%) |
3.81 |
10.00 |
3.91 |
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Profit Before Interest And Tax Margin(%) |
-2.66 |
5.49 |
-2.38 |
|
Cash Profit Margin(%) |
2.40 |
4.27 |
-13.14 |
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Adjusted Net Profit Margin(%) |
-4.07 |
-0.24 |
-19.42 |
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Return On Capital Employed(%) |
0.00 |
0.00 |
0.00 |
|
Return On Net Worth(%) |
0.00 |
0.00 |
0.00 |
LOCAL AGENCY
FURTHER INFORMATION
Subsidiary
Companies:
The company has two subsidiary companies in the name of Ashima Cottons
Private Limited and Ashima Textiles Inc. USA.
In terms of the approval granted by the Central Government under section 212(8)
of the Companies Act, 1956, copy of the balance sheet and profit and loss
account, report of the board of directors and the auditors' report of the
subsidiary companies have not been attached with the balance sheet of the
company. The company will make available these documents/details if and when
requested by the members of the company. It may however be noted that in terms
of accounting standard AS-21 of The Institute of Chartered Accountants of
India, consolidated financial statements have been presented which include the
financials of the subsidiary companies.
Performance of the
company:
The operational performance of the company during the year has not been
satisfactory as compared to last period both in terms of sales and operational
profitability. Unfavourable and sluggish market conditions in denim division,
appreciation of rupee, increase in furnace oil cost, one time payment to
workers of spinning division under voluntary retirement scheme, etc., have been
responsible for decline in PBDIT of the company. On a positive side, in these
inflationary times company has been able to control its variable and fixed
costs. The abolition of quotas has intensified competition from neighbouring
countries and put tremendous pressure on sales price and consequently the
margins.
The cotton prices have remained strong during the year and due to current
liquidity constraints the company could not take any long term position on
cotton procurement.
During the year under review the company has closed down its spinning
activities of shirting division and workers have been offered voluntary
retirement scheme with an approximate outflow of Rs. 1061.27 Millions.
The detailed discussion on the performance is highlighted in the management
discussion and analysis attached to this report.
MANAGEMENT
DISCUSSION AND ANALYSIS
OVERVIEW:
The textile industry has been thrown open under the new WTO regime and quota
has since been dismantled from January 2005. The effect of the same has been
that countries like India and China have directly come into competition with
each other. There is an improvement in capacity utilisations in some sectors.
At the same time, the prices have come under intense pressure. The studies have
shown that though Indian export to USA has risen by 22 per cent, the profits
are sliding as prices have dropped by about 8 to 20 per cent. It is seen that
in both European Union and US markets, Indian unit prices are lower than China.
India is suffering from several competitive disadvantages in the international
markets in terms of slow pace in technology upgradation and process automation,
lack of economies of scale in weaving and processing sector and low brand image
in textiles and garment sector.
The Indian Textile industry has to rise to meet these challenges which have
been thrown open due to dismantling of quotas and free global trade in
textiles. The advantages which Indian industry enjoys need to be converted into
opportunities. The Indian Textile industry has to fully exploit its strengths
in form of availability of low cost cotton and cheap and trained labour, wide
product range covering the entire spectrum of cotton textiles, including niche
high-value added fabrics, and ability to offer total solution across the entire
value addition chain. They have to strengthen relationships with global
retailers through their key strengths of design and fashion capabilities. This
will also help them in competing with China and other East Asian countries.
Sustained efforts towards building on its strengths should put Indian textile
industry in forefront of the global textile marketplace.
The year under review has been a tough one for the textile industry and more
particularly for the company. The denim manufacturing capacities in India
increased during the year and denim industry in general continued to face
recession due to oversupplies. The demand for major textile products like denim
fabric and yarn dyed shirting dipped during the year, leading to pricing
pressures. On the other hand, rise in furnace oil prices has made captive power
unviable and the same had adverse impact on the bottomline of the company.
Cotton prices kept fluctuating throughout the year and company could not cover
cotton for longer period. The post quota regime has thrown up new threats from
East Asian countries, which has intensified international competition, leading
to new challenges for the company.
The company's performance has not been up to the mark as compared to
projections as most of the segments have operated below par in terms of volume
and unit realisations and have been hit badly due to the global scenario in
textile industry. The major impact came from denim segment which witnessed
oversupplies in the market, coupled with sluggish market conditions in yarn
dyed and power becoming expensive for the company. The company is putting its
efforts to improve upon its performance in various areas like strengthening the
marketing set up, controlling costs, working on alternative source of power
etc. Further, the efforts of the company to restructure its finances will
enable the company to sustain its performance and grow in a longer run.
The long run perspective for the textile industry is bright, though new
domestic as well as global players will pose competition. Textile is one of the
basic necessities of life and with further support of Government of India
through its current fiscal budget, is poised to be one of the highest
contributors to national GDP at around 4% to 5%. The textile industry's
contribution to Indian exports is more than 20% and is likely to improve
further. The present uncertainties are likely to pass over a period of time and
better times are there in future.
SEGMENT ANALYSIS AND REVIEW:
The company has continued to operate only in one segment i.e. Textiles.
The different products within textiles in which company has its presence are
discussed below:
Denim: The denim segment has been one of the worst hit segments in textile
industry in year under review and its bad run which started in the middle of
previous period has continued unabated. During the year under review new denim
manufacturing capacities came up both in domestic as well as global arena. In
India denim capacities have increased to 610 mmpa against demand which is not
more than 120 mmpa. Overcapacities in denim market have resulted into very high
pressure on selling prices. On one hand lower than the expected demand growth
in India leading to higher export pressure and on the other hand excess
capacities globally, created pressure on profitability of denim producers
worldwide. The denim producers of India were no exception.
The removal of quotas has only ended up with more problems. There has been huge
capacity being built up in anticipation of major jump in demand post quotas,
which has gone the other way round. Even the cotton prices have hardened up
during the year. Though denim doesn't account for major part of business for
the company, unprecedented sluggish denim market has hit the profitability of
the company. The denim capacity utilisation dropped to 77% compared to 95% of
previous period.
The denim market is likely to remain sluggish and marginal improvement can only
be expected in near future. The company is continuously striving to explore
newer markets as a part of the overall strategy for sustained business. At the
same time, the company is also putting newer products to cater vast fashion
requirement of market.
Shirting:
The
shirting division of the company has also been facing tough times in terms of
lower capacity utilisation, lower order book position, declining export volumes
and overall downward pressure on prices.
The capacity utilisation has gone down as compared to previous period. The
share of exports in overall turnover too has gone down during the year.
The domestic market has shown some improvement in its performance and the sales
realisation has marginally improved. But for this, the operational
profitability would have further gone down.
The company has been working on new product mix and newer designs to cater to
international customers. The company has further increased its sampling
capacities to cater to growing demands of global customers. With its renewed
efforts in marketing, the company is hopeful of improvement in shirting segment
in immediate future.
Similarly, the performance of the grey fabrics too has been affected due to
sluggish market conditions leading to lower order position and resulting into
lower capacity utilisation.
Attires:
During the year under review the company as part of its strategy continued
to move out of lower value addition products and focused on higher value added
products manufactured in-house. Though the division recorded a lower turnover
as compared to previous period, there has been improvement in its PBDIT
margins.
Captive power project:
The capacity utilisation in the power division has reduced significantly
during the year. The prices of furnace oil has witnessed a significant rise of
about 23%, thereby increasing per unit generation cost. In fact, the furnace
oil price has nearly doubled in last 2 years. The company has switched to
alternative cheaper power from Torrent Power. At present, till the time its entire
power requirement is not met fully from alternative source, the company will
continue to be hit with rise in furnace oil prices. This has severely affected
PBDIT margins of the captive power project.
FINANCIAL RESULTS
AND OUTLOOK:
Financial performance:
The financial performance of the company has not been as per the
projections and has been adversely affected due to factors such as overall
sluggish market conditions, stiff competition in international market post
quota regime, pressure on prices, rise in cost of furnace oil, etc. The sales
and other income for the year under review were Rs. 2370 Millions as compared
to Rs. 3610 Millions (annualised) of previous period. The export sales too have
come down at Rs. 510.200 Millions as compared to Rs. 747.900 Millions
(annualised) of previous period. As a result of this the operating profit of
the company (PBDIT) has gone down to Rs. 96.800 Millions as compared to
Rs.366.800 Millions (annualised) of previous period. The top-line of the
company has reduced by about 34% on year-to-year basis. A major factor for the
lower top-line is that the company decided to move out of low-margin trading
business.
Raw material:
The cotton costs had hardened during the initial part of the year and
has softened during later part of the year. The company could not take much
advantage of the situation, due to liquidity problems, which otherwise would
have enabled the company to improve its operational margins.
Dyes and chemicals:
The overall cost of dyes and chemicals has gone down from Rs. 1,3710.700
Millions (annualised) in previous
period to Rs. 1,2868.900 Millions during the year under review as the company
focused on controlling these costs.
Utilities:
The cost of utilities has gone up in current year as compared to previous
period, mainly due to substantial increase in costs of furnace oil.
Other manufacturing expenses:
The other manufacturing costs have reduced as compared to previous
period, including the job work charges, due to lower volumes of production.
Interest:
In
view of ongoing comprehensive debt restructuring, provision of unpaid interest
on secured debt and certain unsecured debt has not been made. So, the actual
impact of interest costs would not be known until the
completion of debt restructuring exercise. The company expects the debt
restructuring to bring down the interest costs significantly and thus it will
have positive impact on the financials of the company.
Outlook:
Despite challenges in terms of increased competitive pressures, the textile
industry has a promising future under the free global trade in WTO regime.
The only threat which it
has brought in is the building of excess capacities. The future is for
organised large players who can provide products at most competitive prices.
The future also belongs to value added products like ready made garments and
apparels. The demand for same has been increasing both in international and
domestic markets. The company is working comprehensively to take benefit of
this situation with its renewed marketing strategy and enhanced thrust on
product development to meet the requirements of reputed brands and retail
chains.
RESOURCES AND LIQUIDITY:
The resources and liquidity
position remained tight during the year due to subdued performance of the
company. The high interest burden continues to haunt the operations of the
company and company is working to get its debts restructured which in turn will
help the company to improve its resources and liquidity position. The company
has managed its resources judiciously to ensure that operations of the company
are not adversely affected.
However, owing to liquidity
constraints, company has not been in a position to take benefit of bulk
purchases of cotton as the prices have softened in the year. The company has
undertaken debt restructuring exercise with its lenders to ease the pressures
on its resources and to lend flexibility and dynamism to its operations, since
in the current situation the company often faces problems in cash flow
management.
OPPORTUNITIES:
As there are no quota restrictions on exports, the company sees tremendous
opportunities in export markets. With a varied product portfolio, enhanced
product development capabilities and focus on development of new export
markets, the company is in a very good position to improve its performance in
the times to come.
Group Ashima is
one of India’s leading 100% cotton fabric manufacturers. It is a technology
driven vertically integrated Group with a turnover of over US$ 135 million per annum.
In a short span of 5 years, the Group has invested US$ 120 million in
start-of-the-art technology and today is one of the foremost cotton textile
players in the world.
They offer the
most comprehensive range of cotton textile products, encompassing each and
every need of the garment industry. More than two-thirds of their production of
60 million meters of woven and 2800 tones of circular knitted cotton fabrics is
meant for exports. On account of their qualitative supremacy the fabrics
command an ever-growing base of discerning customers in more than 45 countries
across the world. To meet the needs of customers seeking total solutions in
terms of packages, they also have garmenting and offer complete services to the
best labels/brands across the world. Last but not the least they have a good
quality fusible interlining fabrics to complete the basket.
In the true sense,
Group Ashima is a single window integrated vendor to meet the requirements of
the global customer sourcing 100% cotton fabrics.
Table of capacities
|
10.5 Million Meters per annum |
|
|
11.5 Million Meters per annum |
|
|
04.5 Million Meters per annum |
|
|
Piece Dyed Khaki - (Bottom Weights) |
17.5 Million Meters per annum |
|
06.0 Million Meters per annum |
|
|
15.0 Million Meters per annum |
|
|
Total
|
65 Million Meters per annum |
|
01.2 Million Pieces per annum |
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
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. 39.33 |
|
UK Pound |
1 |
Rs. 81.70 |
|
Euro |
1 |
Rs. 57.67 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
- |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
- |
|
--LIQUIDITY |
1~10 |
2 |
|
--LEVERAGE |
1~10 |
2 |
|
--RESERVES |
1~10 |
- |
|
--CREDIT LINES |
1~10 |
- |
|
--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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
17 |
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. |
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 |
|