MIRA
INFORM REPORT
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Report Date : |
20.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
S KUMARS NATIONWIDE LIMITED |
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Formerly Known As : |
S. KUMARS SYNFABS LIMITED |
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Registered Office : |
"Avadh" Avadhesh Parisar, Shree Ram Mills Premises,
G. K. Marg, Worli, Mumbai - 400 018, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
28.09.1990 |
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Com. Reg. No.: |
58361 |
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CIN No.: [Company
Identification No.] |
L17120MH1990PLC058361 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMS17736F |
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PAN No.: [Permanent
Account No.] |
AAACS0767K |
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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 : |
Manufacturing and Selling of
cotton woven and blended fabrics. |
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 24000000 |
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Status : |
Improving |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject has improved its performance during the year 2006-07.
Companies financial position is improving. Trade relations are fair. Payments
are however reported as slow but correct. The concern can be considered normal for business dealings at usual
trade terms and conditions, with slight caution initially, in view of
accumulated losses. |
LOCATIONS
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Registered Office : |
"Avadh" Avadhesh Parisar, Shree Ram Mills Premises, G. K. Marg, Worli, Mumbai - 400 018. |
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Tel. No.: |
91-22-24930180 / 24933184 /
22818432 / 22818694 / 2496 5700/ 01 / 03 / 2493 3184 |
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Fax No.: |
91-22-24950402 / 24931685 /
22818619 |
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E Mail : |
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Website : |
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Factory : |
Menswear and Home Textiles Complex
3B, Industrial Area No. 2, Agra
Bombay Road, Dewas, Madhya Pradesh |
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Factory : |
Worsted Fabrics Complex
Thandavapura, Nanjangud Taluka,
Mysore District, Karnataka |
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Factory : |
Spinning and Weaving Complex
Chamunda Standard Mills,
Balgarh, Dewas, Madhya Pradesh |
DIRECTORS
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Name : |
Dr. A. C. Shah |
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Designation : |
Chairman |
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Name : |
Mr. Nitin S. Kasliwal |
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Designation : |
Vice Chairman and Managing Director |
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Name : |
Mr. Anil Channa |
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Designation : |
Deputy Managing Director |
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Name : |
Mr. A. K. Choudhary |
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Designation : |
Director (Nominee oflFCI) |
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Name : |
Mr. M. H. Kulkarni |
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Designation : |
Director (Nominee oflDBI) |
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Name : |
Mr. Vijay Kalantri |
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Designation : |
Director |
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Name : |
Mrs. Jyoti N. Kasliwal |
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Designation : |
Director |
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Name : |
Mr. Martin Henry |
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Designation : |
Director |
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Name : |
Mr. Dara D. Avari |
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Designation : |
Director |
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Name : |
Mr. Col. S. K. Raje |
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Designation : |
Director |
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Name : |
Mr. Govind Mirchandani |
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Designation : |
Executive Director |
KEY EXECUTIVES
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Name : |
Mr. L. N. Somani |
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Designation : |
Company Secretary |
BUSINESS DETAILS
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Line of Business : |
Manufacturing and Selling of cotton woven and blended fabrics. |
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Products : |
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Exports : |
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Countries : |
UK, Europe, East Africa, Syria
and Latin America |
PRODUCTION STATUS
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Particulars |
Unit |
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Actual
Production |
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Fabrics |
Mtrs |
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973.08 |
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Yarn |
Kgs |
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19.32 |
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Ready Made Garments |
Pcs |
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33.56 |
Installed Capacity
i) Spinning: 51,524 Spindles (Previous Year 51,524 Spindles)
ii) Weaving: 26.659 Millions mtrs (Previous Year 26.659 millions mtrs.)
p.a. (As certified by the Management, being a technical matter)
iii) Processing & Finishing: 7.500 Millions mtrs. p.a. (Worsted
Fabrics) (Previous Year 7.500 Millions mtrs. p.a.)
iv) Apparels: 1.14 Millions nos. p.a. (Ready-to-wear Garments) (Previous
Year - Nil)
GENERAL
INFORMATION
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Suppliers : |
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Customers : |
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No. of Employees : |
4000 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
Messrs Haribhakti and Company Chartered Accountants |
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Solicitor : |
Messrs Little and Company |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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28,00,00,000 |
Equity Shares |
Rs. 10/- each |
Rs. 2800.000 Millions |
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1,80,00,000 |
Preference Shares |
Rs. 100/- each |
Rs. 1800.000 Millions |
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Total |
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Rs. 4600.000
Millions |
Issued, Subscribed Capital :
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No. of Shares |
Type |
Value |
Amount |
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19,27,03,316 |
Equity Shares |
Rs. 10/- each |
Rs. 1927.033
Millions |
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36,15,660 |
6% Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs. 361.566
Millions |
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1,35,28,518 |
0.01% Redeemable Preference Shares |
Rs. 100/- each |
Rs. 1352.852
Millions |
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Rs. 3641.451 Millions |
Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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19,27,03,316 |
Equity Shares |
Rs. 10/- each |
Rs. 1927.033
Millions |
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35,73,160 |
6% Cumulative Redeemable Preference Shares |
Rs. 100/- each |
Rs. 357.316
Millions |
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Less : Repaid |
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Rs. 20.000
Millions |
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1,35,28,518 |
0.01% Redeemable Preference Shares |
Rs. 100/- each |
Rs. 1352.852
Millions |
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Total |
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Rs. 3617.201 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 (6 months) |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
3617.201 |
2399.155 |
1904.024 |
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2] Amount to be converted into Shares |
200.000 |
1888.536 |
1355.211 |
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3] Reserves & Surplus |
4219.153 |
1954.829 |
1975.343 |
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4] (Accumulated Losses) |
[1981.779] |
[3036.493] |
(4034.251) |
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NETWORTH |
6054.575 |
3206.027 |
1200.327 |
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LOAN FUNDS |
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1] Secured Loans |
8710.592 |
9787.120 |
8504.618 |
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2] Unsecured Loans |
3218.952 |
905.581 |
3091.382 |
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TOTAL BORROWING |
11929.544 |
10692.701 |
11596.000 |
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DEFERRED TAX LIABILITIES |
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TOTAL |
17984.119 |
13898.728 |
12796.327 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2832.336 |
3029.288 |
3423.562 |
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Capital work-in-progress |
2958.605 |
798.469 |
694.553 |
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INVESTMENT |
13.828 |
78.823 |
68.823 |
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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 |
5036.535
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3799.132 |
3406.942
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Sundry Debtors |
6087.004
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4908.303 |
4068.772
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Cash & Bank Balances |
145.156
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177.133 |
79.973
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Other Current Assets |
0.000
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0.000 |
0.000
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Loans & Advances |
2569.763
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2318.163 |
2071.719
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Total
Current Assets |
13838.458
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11202.731 |
9627.406 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1436.076
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1113.385 |
1046.731
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Provisions |
232.414
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119.172 |
14.321
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Total
Current Liabilities |
1668.490
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1232.557 |
1061.052 |
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Net Current Assets |
12169.968
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9970.174 |
8566.354
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MISCELLANEOUS EXPENSES |
9.382 |
21.974 |
43.035 |
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TOTAL |
17984.119 |
13898.728 |
12796.327 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 (6 months) |
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Sales Turnover |
12295.398 |
8897.266 |
3400.793 |
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Other Income |
99.017 |
60.795 |
0.000 |
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Total Income |
12394.415 |
8958.061 |
3400.793 |
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Profit/(Loss) Before Tax |
1344.943 |
551.965 |
91.494 |
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Provision for Taxation |
270.229 |
[445.793] |
-- |
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Profit/(Loss) After Tax |
1074.714 |
997.758 |
91.494 |
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Earnings in Foreign Currency : |
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Export Earnings |
330.388 |
187.504 |
139.315 |
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Imports : |
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Raw Materials |
80.642 |
43.571 |
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Stores & Spares |
15.686 |
9.866 |
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Capital Goods |
13.874 |
0.000 |
43.316 |
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Others |
243.047 |
25.080 |
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Total Imports |
353.249 |
78.517 |
43.316 |
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Expenditures : |
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Raw materials
consumed/ Fabric purchases |
8868.358 |
6407.142 |
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Manufacturing
expenses |
490.987 |
438.444 |
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Payment to &
for employees |
301.615 |
222.195 |
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Increase/(decrease) in stock |
[864.513] |
[179.018] |
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Administrative
expenses |
301.314 |
182.265 |
3309.534 |
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Selling and distribution
expenses |
798.458 |
361.672 |
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Misc Expenditure
and Restructured Financial Cost written off |
105.263 |
113.550 |
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Interest and
Financial Charges |
609.239 |
450.661 |
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Depreciation/Amortisation |
438.751 |
409.185 |
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Total Expenditure |
11049.472 |
8406.096 |
3309.534 |
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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 |
3788.500 |
3911.000 |
4530.700 |
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Other Income |
5.100 |
22.800 |
15.700 |
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Total Income |
3793.600 |
3933.800 |
4546.400 |
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Total Expenditure |
3030.400 |
3111.700 |
3532.800 |
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Operating Profit |
763.200 |
822.100 |
1013.600 |
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Interest |
167.400 |
219.900 |
252.800 |
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Gross Profit |
595.800 |
602.200 |
760.800 |
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Depreciation |
113.000 |
113.200 |
114.000 |
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Tax |
56.200 |
56.900 |
74.800 |
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Reported PAT |
426.600 |
432.100 |
572.000 |
KEY RATIOS
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 (6 months) |
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Debt Equity Ratio |
3.29 |
27.33 |
12.17 |
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Long Term Debt Equity Ratio |
2.14 |
18.04 |
9.03 |
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Current Ratio |
1.94 |
1.59 |
1.79 |
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TURNOVER RATIOS |
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Fixed Assets |
2.01 |
1.50 |
0.96 |
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Inventory |
2.78 |
2.47 |
2.08 |
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Debtors |
2.24 |
1.98 |
1.76 |
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Interest Cover Ratio |
2.79 |
2.17 |
4.21 |
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Operating Profit Margin (%) |
18.63 |
16.14 |
9.55 |
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Profit Before Interest and Tax
Margin (%) |
15.06 |
11.54 |
3.48 |
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Cash Profit Margin (%) |
12.31 |
10.21 |
8.72 |
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Adjusted Net Profit Margin (%) |
8.74 |
5.61 |
2.66 |
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Return on Capital Employed (%) |
10.74 |
6.82 |
1.68 |
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Return on Net Worth (%) |
22.99 |
14.96 |
7.05 |
LOCAL AGENCY
FURTHER INFORMATION
YEAR
IN RETROSPECT
The company's upward trend in sales turnover and profitability has continued
consistently in the last three years. This is as a result of major initiatives
taken by the company to ensure turnaround and growth. The prevailing optimistic
textile industry scenario helped the company in consolidating the gains.
Through a combination of a revised product mix in the consumer textiles segment
and robust sales in the luxury textiles, the management achieved better profit
margins. The company hopes to wipe out its losses in the next two years thanks
to the corporate debt restructuring programme and the rebuilding of our
strategic. The company has already entered the profit zone since 2004- 2005.
The company is leaving no stone unturned in its effort to emerge as a branded,
retailing and distribution combine. The results evidence strong performance
through the year.
The company has spread its wings in every product category, price segment and
consumer level with well-known brands like Reid & Taylor for suiting, Carmichael
House for Home Textiles, Belmonte for mid-price fabric and fashion apparel, in
addition to S. Kumars.
Consumer Textiles: This division is continuously posting a steady growth and
can easily be considered as the number one player in the organized sector with
about 35% market share. In Uniform segment, especially school uniforms, S.
Kumars enjoys an unparalleled recall and is synonymous with value for
money.
Luxury Textiles: The company's facility at Mysore for the manufacture of
worsted fabrics is at par with the best in the world and the products are of
highest possible quality available. The product has captured over 15% of the
market share in this segment.
Ready to wear (RTW): As more and more Indian consumers are looking forward to
Ready-to-Wear products, the company has planned substantial growth in the
garments and apparel business. A broad range of consumers in the Indian market
are targeted: 'Reid & Taylor' brand in the premium segment and a newly
introduced 'Belmonte' brand in the mid-price segment. Choosing of brand
ambassadors has been done very carefully - Amitabh Bachchan for 'Reid &
Taylor' and Shahrukh Khan for 'Belmonte'.
Home Textiles: In 2006, the company introduced 'Carmichael House' with brand
ambassador Sushmita Sen (leading actress and one-time Miss Universe) for home
linen products, bath accessories and furnishing in the domestic market. The
company expects this division to grow and offer better profitability by finding
support in the domestic middle and high-end segment.
The company's exports which showed a lethargic trend in the
previous two years rose to Rs.330.300 Millions in 2006-07 (previous year
Rs.187.500 Millions) owing in no small measure to the overall growth in global
textile trade. The performance would have been better but for capacity
constraints and better margins in the domestic market. However, when we
consummate our expansion plans in High Value Fine Cotton (HVFC), Home Textiles
and Garments categories, exports will form substantial percentage of company's
total sales in the coming three years. The post-quota era has opened up the
international market for exports of ready-made garments, shifting significant
capacity to India. The company has streamlined its exports development
portfolio on an organized basis and has set up a dedicated garmenting capacity
in Bangalore for exports under its 'Total Wardrobe Solutions' business.
Presently the unit manufactures shirts and trousers. Suits will be added later.
Apparels add a lot of value to textiles and as our brand image is good, we
should be able to cash in on the increase in interest in this segment.
CURRENT BUSINESS OUTLOOK AND PLANS
The company plans to continue its focus on the domestic market due to better
profitability through strong branding, distribution and retail. The domestic
market is slated for growth because of increase in purchasing power and a
growing middle class ready to spend on themselves. The company has entered into
a license agreement with U.K. based Austin Reed group to introduce Stephens
Brothers, a formalwear brand in the super premium segment. The current buoyant
trend is expected to continue this year.
The company is going on a retail overdrive with plans to launch multiple
apparel, consumer and home textile brands over the next two years. Apparels and
fabrics are currently retailed under the Reid & Taylor brand in the premium
segment and the flagship S. Kumars brand in the economy segment. The company is
trying to straddle various price segments in the fabric, apparel and home
textile markets.
Exclusive international brands introduced by the company into the retail sector
through its subsidiary and associate concern Brandhouse Retails Limited include
Dunhill, Escada and Stephens Brothers. The aim is to make a Total Wardrobe
Solution available to the customers under one roof.
PROPOSED
DEMERGER OF SUBSIDIARY COMPANY
Brandhouse Retails Limited (BHRL), a 100% subsidiary of the company, started
functioning from June 2004, primarily for carrying out retail sales of products
of various brands viz. 'Reid & Taylor', 'Carmichael House', 'Belmonte'
which are manufactured by the company. BHRL also retails men's fashion
accessories and has tailoring facilities in some of the retail stores. BHRL has
established exclusive stores for these brands in various parts of the country.
Part of these stores is franchisee and part company-owned. Plans for opening
stores for foreign premium luxury brands like Escada (already 2 shops opened),
Dunhill, Stephens Brothers, etc. are in the pipeline. BHRL has planned to
establish extensive network of exclusive retail outlets for the company brands
in the next three years.
In order to further its business plans, BHRL would need requisite funding,
primarily equity type funds including strategic investment by private equity
players. Retail business has higher valuation multiples than textiles
manufacturing. Since BHRL is a 100% subsidiary and is not listed, the company
was unable to get any higher valuations normally associated with retail
business. A demerger of the retail business from the wholly-owned subsidiary
into a separate company was therefore suggested and considered by the company's
Board.
As an initial step, as advised by our investment bankers and solicitors, the
retail business of BHRL has been acquired by SKNL at book value at cut-off date
31.12.2006. The acquisition was done as a precursor to the subsequent demerger
of the retail business into a separate company, in order to facilitate listing
of the resulting company. The Swap ratio as determined by two reputed
independent accounting firms is arrived at 5:1, i.e. for every 5 shares of
SKNL, its shareholders will get 1 share of the resulting company BHRL.
Necessary approval for the demerger proposal from the secured lenders of the
company has been obtained at the CDR Empowered Group meeting on 7th May 2007.
On receipt of approval / NOC from the relevant Stock Exchanges, the company
will approach the High Court for sanctioning the Scheme of Arrangement for the
demerger. A meeting of the members of the company will be called for approving
the Scheme. The demerger will take place from the appointed date, i.e. 1st
January 2007, when the High Court approval is received and filed with the
ROC.
MANAGEMENT
DISCUSSION AND ANALYSIS
Industry Structure and
Developments:
The Indian economy has not only entered a new phase of high growth path, but
has also emerged as one of the global economic superpowers. In a report on India's
consumer market published on May 3rd, the consultants at McKinsey have argued
that assuming annual growth averages 7.3% over two decades - a reasonable bet -
India may overtake Germany as the world's fifth-biggest consumer market by
2025. It predicts the middle class will expand from 50 Millions to 580
Millions, leaving only a fifth of Indians in the bottom household-income
bracket. Businesses across all industries will see growth. The opportunities
will be greatest among the more affluent by 2025, consumption will be dominated
by the middle class to the tune of 59%, and the rich accounting for 20%.
According to a study by CRISIL for CITI (Confederation for Indian Textile
Industry), the domestic household market growth will be driven by a rise in penetration
of organized retail, favorable demographics and rising consumption and income
levels. In order to achieve the desired growth, the production output of the
textile industry would need to double by 2012 from the current level. To
achieve this target, it calls for an investment to the tune of Rs.1940000
Millions during 2007-2012. Consequently, the industry could generate additional
employment for 14 million persons.
The very strong growth of the economy has also created conditions for a rapid
increase in the domestic consumption of textile products with some professional
estimate putting a growth quantum of almost Rs.650000 Millions in the next
three years (2008-10) period.
Opportunities / Threats /
Challenges:
Even in the post-quota regime, India's contribution is quite low to a large
international market. Developed markets are looking at India as the alternative
to China for textiles and apparel imports.
India, as a country, has some clear advantages in terms of resources, which
makes it compete internationally. The country is the third largest cotton
producer and cotton, of various staples, is available in abundance. Skilled and
cheaper manpower coupled with an established textile industry are other
advantages. These factors make India and its products competitive.
The Government of India has embarked on a series of initiatives that will
further boost the performance of the Indian textile and apparel industry. The
government's textile-friendly policies include dereservation of a substantial
portion of the industry thereby creating a level playing field between the
organized and the unorganized sector, fiscal reforms to boost production,
extension of Technology Upgradation Fund scheme with enhanced funds allocation
and creation of Special Economic Zones.
The Indian apparel industry needs to expand, innovate and become a big player
to achieve the economies of scale. Strategy should involve value creation by
innovation in design, installation of latest production procedures and concerted
marketing efforts.
It has been the company's endeavour to be present in all product categories in
the textile segment and bring the best in this segment to the Indian customers.
In line with the trend, growth and diversification have been the two key focus
areas at the company this year. Today, our company is the only Indian textile
major to operate in all fiber categories (natural, man-made and blended), all
product categories (fabric, apparel and home textiles) and offers products
catering to all segments of the Indian society. These continue to be our
company's inherent strengths, giving us a competitive edge. Moreover, the
company has strategically positioned itself as a strong domestic player. The
growing domestic demand has provided the company a large market base and given
the opportunity to push and establish its brands. The domestic market has also
permitted the company to enjoy greater margins as compared to low / poor
margins on exports and has also sheltered the company from any adverse effects
of dollar depreciation with the rupee.
Business Review: Product-wise
Performance:
The company has a strong presence in the textile industry with well-established
brands. It aims to be amongst the top three players in every chosen area of
operation. The company has organized its business into Strategic Business
Units, which are:
Consumer Textiles (Blended and Uniform fabrics)
Home Textiles (Total Home Expression)
Luxury Textiles (Worsted and Natural fiber suitings)
Ready-to-Wear (Total Wardrobe Solutions)Group Company(Associate company)
Brand house (International Retail Experience)
A brief review of these SBUs is given
hereunder:
Blended and Uniform fabrics: The manufacturing facilities are located at Dewas.
Some part of the production is outsourced. The workwear polyester / viscose
fabrics are used by industries, hospitals, navy, schools and offices. The
division also caters to the premium blended fabrics for daily wear under the
`S.Kumars' brand.
The company has a market share of 8% in the Blended Suiting business and 35% in
the Workwear and Uniform fabrics business of the organized sector. The company
has undertaken strengthening of the design department to introduce more market
friendly designs.
The company has also undertaken measures with the objective of improving the
productivity and operational efficiencies. There is a consumer shift towards
branded fabrics. A new brand BELMONTE for the middle segment has been
successfully launched.
Total Home Expression:
This division has two manufacturing facilities both located at Dewas, which
produce Grey Cotton Sheeting fabric for the domestic market. Home textiles like
Cotton jacquard and Damask fabrics used for home furnishings are exported. The
performance of the unit will be enhanced by value addition and product mix
change.
The division has planned an entry in the Made Ups business with its new brand
Carmichael House wherein it uses own fabrics as well as outsourced fabrics,
which are not possible to manufacture in-house. India has a clear advantage in
Made Ups exports to US and Europe in the post-quota period as Grey fabric (wide
width) is abundantly available, as well as processing facilities and sewing
capabilities.
Worsted Fabrics:
This division has a state-of-the-art manufacturing facility near Mysore.
Capacity utilization was maintained at 90%. The division manufactures
wool-polyester blended and 100% worsted fabrics (fine and superfine varieties)
under the 'Reid & Taylor' brand. The worsted fabrics already have a market
share of 15% in India.
Operating margins continued to remain fairly healthy. The thrust on retail
outlets will enhance value realization.
Total Wardrobe Solutions (Ready to
Wear):
The manufacturing activity is partly outsourced. Ready to Wear garments include
shirts, trousers, casuals, ties for the men's segment. Suits will be added. The
company has launched its premium range of ready to wear garments under the
brand 'Reid & Taylor'. We are the only garment company to offer Total Wardrobe
Solutions.
Brandhouse Retails Limited:
This entity was established as a result of our company's initiative in the
Retail Sector. Strong retail presence is key for the future. Its core activity
is retailing of textiles and apparel fashion wear and fashion accessories. The
portfolio includes setting up of exclusive stores for ourcompany's brands as
well as international brands through licensee / franchisee arrangements. A
number of stores are being opened during the year.
Growth prospects:
Each of the divisions has significant growth potential. The company has
formulated specific growth-oriented strategies for each SBU in the coming year.
The company is currently implementing establishment of High Value Fine Cotton
shirtings project and setting up a new Home Textiles plant at Jhagadia, near
Bharuch in Gujarat State. Expansion of capacity in the luxury suitings (worsted
suitings) and focused growth in Ready-to-Wear garments business targetted at a
broad range of consumers in the Indian market are other initiatives that will
ensure substantial growth in sales turnover and profitability of the company.
Additionally, a strong retail network of company - owned exclusive stores,
franchisee stores, multi-brand outlets (MBOs) and large format stores spread
throughout the country planned by the company's associate concern Brandhouse
Retails Limited will provide extensive visibility to the various brands of the
company.
Financial Performance:
The company is implementing its business strategies to achieve its long term
goals. It is also taking several measures for improved operational efficiencies
of its plants and increased productivity per employee. A substantial portion of
the growth plans is being financed through equity related investments (FCCBs
and Promoters contribution) thereby improving the debt equity ratio as well as
strengthening the cashflow of the company. In fact, the incremental earnings
arising out of the growth plans will strengthen servicing of debt.
- In view of the brought forward
unabsorbed losses and depreciation, the Management is of the opinion that
there is no tax liability anticipated. However, considering the provisions
of Section 115 JB of the Income Tax Act, 1961 the Company has made the
provision of Rs. 103.500 Millions towards the same.
- The Company is engaged in manufacturing
(in house and outsourced) fabrics, ready to wear garments and home
textiles. Considering the overall nature, the management is of the opinion
that the entire operation of the Company fall under one segment i.e.
Textiles and as such there are no separate reportable segments for the
purpose of disclosures as required under AS-17 Segment Reporting.
- The Company has, for acquisition of a
Home textile designing and distribution company in USA remitted Rs.26.862
Millions (equivalent to USD 6.00 lacs) to Sansar Holdings Inc against
proposed investment of USD 20 lacs. The amount remitted is shown under
Schedule "F" as Loans and Advances, pending completion of
formalities. The balance amount has been shown as Capital Commitment.
- Based on the internal estimates and
assessments and expert technical valuation, the management is of the
opinion that there is no impairment in relation to its assets and hence no
provision is considered necessary.
FIXED ASSETS
- Land
- Freehold Land
- Leasehold
Land
- Building
- Plant &
Machinery
- Office
Equipments
- Computer
- Furniture
& Fixtures
- Vehicles
- Intangible
Assets
- System
Development
AS PER WEBSITE
History
S. KUMARS GROUP
The S. Kumars Group was founded in 1948 by two brothers,
Abhayakumar and Shambukumar Kasliwal. The group was initially engaged in the
trading of textiles and ventured into manufacturing in the year 1975. The year
1990 saw the inception of the SKNL group. Since then SKNL has been the flagship
brand, leading the way for its various businesses. It has been a forerunner in
the textiles industry for the last five decades and is regarded as one of the
most reputed business houses in the country.
The Group
has interests in predominantly three areas: textile, real estate and power. The
Group's power project is under construction and its large real estate assets
are currently under development.
From a
modest turnover of Rs.5 million in 1948, the group has come a long way, setting
standards of excellence, acquiring many "firsts" to its credit and
achieving a number of "milestones" on its way, in reaching a turnover
of Rs.10 billion.
In 1990 all
the textile businesses of the group were consolidated under S.Kumars nationwide
LimitedThe group further acquired new capacities and plants under this entity.
Milestone
1948
S. Kumars Group was founded in
1948 by Shri Abhayakumar Kasliwal and Shri. Shambhukumar Kasliwal by
establishing textile distribution network and subsequently commencing textile
manufacturing activities.
1990
The company was incorporated as a
private limited company on 28th
September, under the Companies Act, 1956 and has become a deemed Public
Company under Section 43 A (I) w.e.f. 28th Feb 1991.
The company has become a
simplicitor public Company, vide special Resolution Passed on 7th
July 1992 and fresh certificate of change of name as issued on 28th
September 1993. It is engaged in the business of trading in synthetic/blended
fabrics.
With a view to meet the growing
demand for its product, S. Kumars Synfabs Limited has acquired shuttleless
looms and other plant from S. Kumar Enterprises (Synfabs) Limited and installed
further shuttleless looms and other equipment at Dewas and setting up texturising
and twisting plant at Pithampur in Madhya Pradesh.
S. Kumars Synfabs Limited was
promoted keeping in mind the S. Kumars Group overall corporate strategy and
given objectives of segregating the export business from the local business.
S. Kumars Synfabs Limited is
promoted by the group with the intention of making it the flagship company of
the group's synthetic textile business.
S. Kumars Synfabs Limited was
promoted by S. Kumar Enterprises (Synfabs) Limited and commenced its business
in September.
1992
The Group has also established its
presence in the Middle East and the U.K./European markets. The Group exported
goods worth Rs.150.000 millions in the year.
S. Kumars Group is among the early
business houses that ushered in the widespread use of Polyester and polyester
blends in apparel fabric in India, introduced 100% Polyester sarees and used
Acrylic fibre in everyday Suitings and Shirtings. It was also among the first
Textile Groups to take up systematic textile marketing by establishing a
widespread network of dealers and retailers, and regularly advertising its
products. It was amongst the first to establish India as a source of fashion
blended fabric in the United Kingdom.
The rights issue of 19,54,000
equity shares of Rs. 10/- each at a premium of Rs. 25/- aggregating to Rs.
68.390 millions, has been fully subscribed and the allotments have been made on
12th October.
1993
The Public Issue of 38,50,000
Equity Shares of Rs.10/- each at a premium of Rs.26/- per share aggregating
Rs.138.600 millions and issue of 1,66,000 Zero interest Zero dividend
Convertible Preference Shares (CPS) of face value of Rs.100/- each at par
aggregating Rs.16.600 millions has been oversubscribed.
1994
The company has privately placed
1.000 million Non Convertible Debentures of Rs.100/- each aggregating to
Rs.100.000 millions, with the Industrial Development Bank of India and the Unit
Trust of India to complete the means of finance of the expansion project
undertaken by the company.
1997
The company has acquired from
Standard Industries Limited, a spinning- cum-weaving unit situated near Dewas
in M.P. The unit has an installed capacity of 38,564 Spindles and 64 Sulzer
double width shuttleless weaving machines.
The company is setting up a state-of-the-art
Worsted mill near Mysore in Karnataka
1998
The company has entered into a
technical and marketing collaboration with Reid & Taylor of Scotland for
manufacturing and marketing of exclusive worsted suitings.
1999
The company has signed an
agreement with National Securities Depository Limited (NSDL) for joining the
Depository System, which facilitates scripless trading.
The company has, introduced a
novel concept in distribution called "Direct to Retail" - DTR.
The company has successfully
privately placed 76.200 millions equity shares of Rs.10/- each, partly paid up
with a premium of Rs.5.09/- During the year, the company has also placed 33.300
millions equity shares at a premium of Rs.5.09.
2000
S Kumars Synfabs, the Rs 6000.000
millions synthetic-textiles company has decided to extend its Reid & Taylor
brand to ready-to-wear segment.
Rs 6000.000 millions textile major
S Kumars Synfab has signed Bollywood sensation Hrithik Roshan to be their new
brand ambassador for an undisclosed sum to mark their entry into the readymade
apparel market.
Chennai high court has, through an
interim injunction, prevented S Kumars from using the brand name `Cinnamon'
S. Kumars Synfabs Limited has
appointed Andersen Consulting to review its product portfolio in different
market segments and maximise the company's strengths in marketing brand
building and brand creation.
2001
S Kumar's Synfabs, has been forced
to launch a new ready-to-wear brand,
promotes Shree Maheshwar Hydel
Power project in Madhya Pradesh has secured a $132.60 million (about Rs
6100.000 millions) loan from the Power Finance Corporation (PFC)
2002
Mr Vijay Kalantri appointed as an
Additional Director
Mr. G A Nayak appointed by UTI as Nominee
Director and Mr. R K M Prasad has been appointed by IFCI Limited, as Nominee
Director on the Board of the company vice Mr. Kamal Kishore. 2002
The Board of Directors of S
Kumars.Com Limited held on January 24, 2002 Mr Vijay Kalantri has been appointed
as an Additional Director of the company.
2003
Downgraded by ICRA `LBB' for its
Rs 50 cr non-convertible debenture (NCDs) under rated `LD', indicating default.
Shri Sanjeev Ghai has been
appointed by IFCI Limited, as Nominee Director on the board of the company vice
Shri R K M Prasad with effect from August 18, 2003
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 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.39.87 |
|
UK Pound |
1 |
Rs.77.79 |
|
Euro |
1 |
Rs.58.59 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
3 |
|
--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 |
|
50 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
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 |
|