MIRA
INFORM REPORT
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Report Date : |
12.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
EURO LEDER FASHIONS LIMITED |
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Registered Office : |
99, GST Road, Pallavaram, Chennai – 600 043, Tamil Nadu |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
05.02.1992 |
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Com. Reg. No.: |
22134 |
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CIN No.: [Company
Identification No.] |
L18209TN1992PLC022134 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHEE03229C |
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Legal Form : |
Public Limited Liability Company. The company shares are listed on
stock exchange. |
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Line of Business : |
Manufacturer of
Leather Garment. |
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 183088 |
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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. Trade relations are reported as fair. Business is active.
Payments are reported as 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 : |
99, GST Road, Pallavaram, Chennai – 600 043, Tamil Nadu, India |
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Tel. No.: |
91-44-22642923 / 22643437 |
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Fax No.: |
91-44-22643043 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. A R Ramanathan |
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Designation : |
Managing Director |
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Name : |
Mr. R M Lakshmanan |
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Designation : |
Director |
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Name : |
Mr. A R Arunachalam |
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Designation : |
Director |
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Name : |
Mr. P S Nathan |
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Designation : |
Director |
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Name : |
Mr. S Narayan |
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Designation : |
Director |
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Name : |
Mr. S Jambunath |
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Designation : |
Director |
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Name : |
Mrs. N Meenakshi Sundaram |
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Designation : |
Director |
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 |
1116000 |
24.95% |
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Persons acting in concert |
830600 |
18.57% |
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Non Promoter
Holding |
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Mutual Funds and UTI |
18900 |
0.42% |
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Others |
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Private Corporate Bodies |
30981 |
0.69% |
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Indian Public |
2423114 |
54.16% |
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NRIs / OCBs |
54005 |
1.21% |
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Total |
4473600 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of
Leather Garment. |
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Products : |
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PRODUCTION STATUS (as 31.03.2007):-
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Particulars |
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Unit |
Licensed
Capacity & Installed
Capacity |
Actual
Production |
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Leather Garments |
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Nos |
75000 |
101231 |
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Leather Goods |
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Nos |
200000 |
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GENERAL
INFORMATION
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Bankers : |
· Canara Bank , Overseas Branch · ICICI Bank Limited, Nungambakkam |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
M/s N Venkatesan Associates Chartered Accountants |
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Address : |
20 (Old No. 8) Dr. Natesan Salai, Ashok Nagar, Chennai – 600 043,
Tamil Nadu, India |
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Tel. No.: |
91-44-24896897 |
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Associates/Subsidiaries : |
Nil |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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5000000 |
Equity Shares |
Rs. 10/- each |
Rs. 50.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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4473600 |
Equity Shares |
Rs. 10/- each |
Rs. 44.736
millions |
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Less: |
Call in Arrear |
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Rs.10.747
millions |
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Total |
Rs.33.989 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
33.989 |
33.981 |
33.900 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
11.783 |
9.268 |
7.300 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
45.772 |
43.249 |
41.200 |
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LOAN FUNDS |
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1] Secured Loans |
4.208 |
4.757 |
12.500 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
4.208 |
4.757 |
12.500 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
49.980 |
48.006 |
53.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
10.988 |
11.200 |
10.000 |
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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INVESTMENT |
0.104 |
0.103 |
0.100 |
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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 |
7.854
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9.457 |
3.000 |
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Sundry Debtors |
7.096
|
0.441 |
23.200 |
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Cash & Bank Balances |
5.127
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1.387 |
2.600 |
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Other Current Assets |
0.000
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0.000 |
0.000 |
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Loans & Advances |
34.845
|
33.460 |
22.700 |
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Total
Current Assets |
54.922
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44.745 |
51.500 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
16.034
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8.042 |
7.900 |
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Provisions |
0.000
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0.000 |
0.000 |
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Total
Current Liabilities |
16.034
|
8.042 |
7.900 |
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Net Current Assets |
38.888
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36.703 |
43.600 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
49.980 |
48.006 |
53.700 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
244.730 |
183.278 |
171.600 |
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Other Income |
0.254 |
0.004 |
15.200 |
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Total Income |
244.984 |
183.282 |
186.800 |
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Profit/(Loss) Before Tax |
3.913 |
3.172 |
3.100 |
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Provision for Taxation |
1.398 |
1.170 |
1.100 |
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Profit/(Loss) After Tax |
2.515 |
2.002 |
2.000 |
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Export Value |
202.940 |
154.555 |
NA |
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Expenditures : |
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Selling and Administrative Expenses |
0.000 |
0.000 |
21.800 |
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Raw Material Consumed |
191.813 |
153.281 |
135.000 |
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Increase/(Decrease) in Finished Goods |
2.781 |
[3.861] |
0.400 |
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Interest |
3.164 |
2.152 |
2.400 |
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Power & Fuel |
0.520 |
0.180 |
0.300 |
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Depreciation & Amortization |
0.439 |
0.394 |
0.300 |
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Employee Cost |
4.536 |
3.546 |
1.600 |
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Miscellaneous expenses |
0.000 |
0.000 |
2.300 |
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Other Expenditure |
37.816 |
24.417 |
20.400 |
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Total Expenditure |
241.069 |
192.107 |
184.500 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
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Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
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Sales Turnover |
34.100 |
49.600 |
44.200 |
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Other Income |
1.100 |
3.200 |
5.000 |
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Total Income |
35.200 |
52.800 |
49.200 |
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Total Expenditure |
34.200 |
51.600 |
48.100 |
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Operating Profit |
1.000 |
1.200 |
1.100 |
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Interest |
0.800 |
0.700 |
0.700 |
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Gross Profit |
0.200 |
0.500 |
0.400 |
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Depreciation |
0.100 |
0.100 |
0.100 |
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Tax |
0.000 |
0.000 |
0.000 |
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Reported PAT |
0.100 |
0.400 |
0.300 |
KEY RATIOS
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PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
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PAT / Total
Income |
(%) |
1.02
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1.09 |
1.07 |
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Net Profit Margin (PBT/Sales) |
(%) |
1.59
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1.73 |
1.80 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
5.94
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5.67 |
5.04 |
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Return on Investment (ROI) (PBT/Networth) |
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0.08
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0.07 |
0.07 |
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Debt Equity Ratio (Total Liability/Networth) |
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0.44
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0.30 |
0.50 |
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Current Ratio (Current Asset/Current Liability) |
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3.43
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5.56 |
6.51 |
LOCAL AGENCY
FURTHER INFORMATION
DIRECTOR REPORT:
PERFORMANCE:
The Company has achieved a record turnover of Rs.227.435
millions in 2006-2007 and earned a profit of Rs.3.913 millions before tax. The
profit after tax has been Rs.2.515 millions.
PROSPECTS:
The Value of US$ and Euro against the Rupee having gone down
appreciably in the past few months has resulted in lower realization from
exports. This is likely to affect the bottom line of the Company in the Current
Year the Order position is healthy and the Company should register a modest
improvement in its performance in the current year.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT:
They herewith submit Management Discussion and Analysis
Report on the business of the Company for the year ended 31st March,2007. In
this they have attempted to include discussion on all the specified matters to
the extent relevant or within limits that in their opinion are imposed by the
Company's own competitive position.
COMPANY AND INDUSTRY STRUCTURE:
The Company manufactures leather garments exclusively for
export and has its factory at Pallavaram, Chennai. This unit is self sufficient
to perform its duties and functions. The Commitment of the Company towards
quality and customer orientation reflects in its well Established
clientele.
The industry continued to suffer this year due to a demand supply imbalance and
rising input costs. However despite theses factors, the Company has vigorously
channellised its efforts at increasing its productivity and turnover and this
strategy has paid off by way of a modest increase in the turnover during the
year.
REVIEW OF OPERATIONS:
A summary of major performance indicators is given below,
while the detailed and physical performance may be viewed from the Balance
Sheet and Profit and Loss account and the annexures thereto.
2006-2007 2005-2006
SALES Rs.220.109
millions Rs.169.711
millions
EXPORTS Rs.220.109
millions Rs.169.711millions
The Company has adopted a time-bound policy in
the short term, to balance production to level which could avoid built up
inventory and has taken special measures to bring down stocks to optimum
levels. However, in spite of the operating gains the margins have been under
strain for the following reasons:
1. Increase in major input costs particularly the cost of leather.
2. Globally leather garments have registered a decline in realization and
this affected India also.
3. Average price realization per garment fell to
Rs.0.002 millions. During the year, Buyer's domination was pronounced and their
buyers abroad bargained hard in view of the raising Indian Rupee against the
Euro and, U.S. Dollars.
4. Freight rates and selling expenses rose appreciably, further pushing
the costs these factors constitute the threats faced by the company.
OUTLOOK:
The outlook of the industry appears to be challenging due to strong
competition in price and quality and a large rise in input cost and the rising
Indian rupees against the USD and Euro.
There are signs of a modest improvement in which may go up depending on the
resurgence of the economy, besides cyclical improvement. The Company has orders
in hand worth Rs.20.000 millions. The Company's strength lies in the quality of
its products and the promising looks continued patronage of its buyers. However
the realization per garment is likely to be low. The peak season is due to
start shortly.
FIXED ASSETS:-
· Land
· Land Development
· Plant and Machinery
· Furnitures and Fixtures
· Computer
· Motor Car
WEBSITE DETAILS:
The
company is a reputed leather garment manufacturer of India. It has an annual
sales of US $ 20 million. Subject has diversified interest in fields such as
construction, finance, agriculture and farming. The firm has been listed in the
Mumbai stock exchange for the past decade. The Leather division has been in
operation for more than 30 years in the international market especially Europe.
Its factory, equipped with the latest state-of-art PFAFF machines with the
conveyor system of manufacturing, is located in Chennai alias Madras in
southern India. This manufacturing system ensures consistency of quality over a
large number of garments. The factory has producing capacity of nearly more
than 35,000 garments per month. Euro Leder's inherent strength lies in its dedicated
team of professionals including designers, leather technologists and management
professionals. This team is ably backed by a skilled workforce which is nearly
500 in strength..
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.39.68 |
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UK Pound |
1 |
Rs.77.67 |
|
Euro |
1 |
Rs.57.81 |
SCORE & RATING
EXPLANATIONS
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SCORE FACTORS |
RANGE |
POINTS |
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HISTORY |
1~10 |
6 |
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PAID-UP CAPITAL |
1~10 |
5 |
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OPERATING SCALE |
1~10 |
5 |
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FINANCIAL CONDITION |
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--BUSINESS SCALE |
1~10 |
6 |
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--PROFITABILIRY |
1~10 |
4 |
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--LIQUIDITY |
1~10 |
6 |
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--LEVERAGE |
1~10 |
6 |
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--RESERVES |
1~10 |
5 |
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--CREDIT LINES |
1~10 |
5 |
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--MARGINS |
-5~5 |
---- |
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DEMERIT POINTS |
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--BANK CHARGES |
YES/NO |
YES |
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--LITIGATION |
YES/NO |
NO |
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--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
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MERIT POINTS |
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--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
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--EXPORT ACTIVITIES |
YES/NO |
YES |
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--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
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--OTHER MERIT FACTORS |
YES/NO |
YES |
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TOTAL |
|
48 |
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 |
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