MIRA
INFORM REPORT
|
Report Date : |
11.01.2008 |
IDENTIFICATION
DETAILS
|
Name : |
ARVIND MILLS
LIMITED |
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|
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Registered
Office : |
Railwaypura Post, Naroda Road, Ahmedabad –
380 025, Gujarat |
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Country: |
India |
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Financials (as
on): |
31.03.2007 |
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Date of
Incorporation : |
01.06.1931 |
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Com. Reg. No.: |
04-93 |
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CIN No.: [Company
Identification No.] |
L17119GJ1931PLC000093 |
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TAN No.: [Tax Deduction & Collection Account No.] |
AHMT00462A |
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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 : |
Manufacturers
Marketers of Cloth (including fents, rags, etc.), Yarn, Waste, EPABX Lines
Garments. |
RATING &
COMMENTS
|
MIRA’s Rating
: |
Ba |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable
to meet normal commitments. |
Satisfactory |
|
Maximum Credit
Limit : |
USD 60000000 |
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|
Status : |
Satisfactory |
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Payment
Behaviour : |
Usually Correct |
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Litigation : |
Clear |
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Comments : |
Subject is the
flagship company of the Lalbhai Group manufacturing marketing cloth, Grey Knitted
Fabrics Yarn. Directors are
respectable renowned industrialists. Trade relations are fair. Payments are
correct as per commitments. The company can
be considered normal for business
dealings at usual trade terms conditions. |
LOCATIONS
|
Registered
Office : |
Railwaypura Post, Naroda Road, Ahmedabad –
380 025, Gujarat, India. |
|
Tel. No.: |
91-79-22121408 /
22203030 / 22200206 |
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Fax No.: |
91-79-22124314 /
22120267/ 22371396 / 22372342 / 22379184 / 22201608 |
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E-Mail : |
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Website : |
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Corporate
Office : |
Railwaypura Post, Naroda Road, Ahmedabad –
380 025, Gujarat, India. |
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Tel. No.: |
91-79-22203030 |
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Fax No.: |
91-79-22201270 |
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Factory : |
v Santej, Taluka Kalol, District Mehsana -
382 721, Gujarat, India v Naroda Road, Ahmedabad - 380 025, Gujarat,
India (Two Units) Tel. No. 91-79-2212 1408/2377 002 Fax No. 91-79-2212
4314/2212 0267/2237 1396/2237 2342/2237
9184 v Khatrej, Taluka Kalol, District Mehsana -
382 721, Gujarat, India v Khokhra, Memdabad, Ahmedabad - 380 008,
Gujarat, India v Gut No. 172, Daravali Village, Taluka
Mulshi, District Pune - 412 018, Maharashtra, India v
55,
Whitefield Road, Mahadevapura Post, Bangalore - 560 048, Karnataka,
India |
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Branch Office
: |
MUMBAI Neptune House, 2nd Floor, Opp. Bandra Talkies, SV Road, Mumbai
– 400050, Maharashtra, India DELHI 8 Community Centre, Saket, New Delhi– 110017, India BANGALORE Grace Mansion, 25 Infantry Road, Bangalore – 560001, Karnataka KOLKATA 100, Park Street, Laxmi Nivas, 2nd Floor, Kolkata , West
Bengal, India
USA Arvind Worldwide (USA) Inc., 130, West 42nd Street, Suite
No. 603, 6th floor, NY 10036, New York, USA SRI LANKA Sri Lanka Liason Office BANGLADESH C/o Sidko Limited.
Asoka Spintex Premises, Naroda Road,
Ahmedabad – 380025, Gujarat |
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Other Division
: |
Santej Road, Near Khatrej, Taluka Kalol, Dist Gandhinagar - 382721 Khakhi
Division Knits Division Santej Road, Near Khatrej, Taluka Kalol, Dist Gandhinagar - 382721 Ankur Textiles Arvind
Brands Limited Du Parc Trinity 8th Floor, 17, M. G. Road,Bangalore – 560001, Karnataka, India Tel: 91-80-22973131 Denim Division Tel: 91-79-22203030 |
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Garment Export
Division : |
10th Floor, Du Parc Trinity, 17 MG Road, Bangalore -560001, Karnataka,
India |
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Tel No.: |
91-80-251123900/5 |
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Fax No.: |
91-80-251123909 |
International
Offices
DIRECTORS
|
Name: |
Mr. Arvind N. Lalbhai |
|
Designation: |
Chairman |
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Age: |
84 Years |
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Qualification: |
Science Graduate |
|
Date of
Joining: |
March, 1974 |
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Other
Directorship: |
Ø
Arvind Products Limited – Chairman Ø
Atul Limited – Chairman Ø
Birla VXL Limited – Director Ø
JK Industries Limited – Director Ø
Lokprakashan Limited – Director |
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|
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Name: |
Mr. Sanjay S. Lalbhai
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|
Designation: |
Managing Director |
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Age: |
51 Years |
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Qualification: |
Science Graduate, Master’s Degree in Business Management |
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Date of
Joining: |
March, 1977 |
|
Other
Directorship: |
Ø
Arvind Clothing Limited – Director Ø
Arvind Fashions Limited – Director Ø
Arvind Brands Limited – Director Ø
Arvind Products Limited – Director Ø
Amtrex Hitachi Appliances Limited – Chairman Ø
Anagram Wellington Asset Management Company Limited – Director Ø
Anagram Housing Finance Limited – Director Ø
H. K. Finechem Limited – Director Ø
Amol Dicalit Limited – Director Ø
Gujarat Infrastructure Limited – Director Ø
Mahindra Gujarat Tractor Limited - Chairman |
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|
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Name: |
Mr. Jayesh K. Shah
|
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Designation: |
Director Chief Financial Officer |
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Age: |
44 years |
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Qualification: |
Commerce Graduate Chartered Accountant |
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Date of
Joining: |
01.07.1993 |
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Name: |
Mr. Jaithirth Rao
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Designation: |
Director |
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Age: |
52 years |
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Qualification: |
Masters Degree form the University of Chicago IIM- Ahmedabad |
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Name : |
Mr. Deepak M Satwalekar |
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Designation : |
Director |
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Name : |
Mr. V. K. Pandit |
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Designation : |
Nominated by IDBI |
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Name : |
Mr. K M Jaya Rao |
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Designation : |
Nominee by ICICI Bank Limited |
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Name : |
Mr. Sudhir Mehta |
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Designation : |
Director |
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Name : |
Mr. Tarun Sheth |
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Designation : |
Director |
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Name : |
Mr. S. R. Rao |
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Designation : |
Nominee by Export Import Bank of India |
KEY EXECUTIVES
|
Name : |
Mr. R V Bhimani |
|
Designation : |
Company Secretary |
|
Address : |
Secretarial Department, Naroda Road, Ahmedabad – 380 025, Gujarat,
India |
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Tel. No.: |
91-79-22203030/ 22200206 |
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Fax No. : |
91-79-22201608 |
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Email : |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.12.2007
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Shareholding
of Promoter Promoter Group |
|
|
Indian
|
|
|
|
Individuals / Hindu Undivided Family |
257088 |
0.12 |
|
Central Government/ State Government(s) |
-- |
-- |
|
Bodies Corporate |
70624264 |
33.73 |
|
Financial Institutions/Banks |
-- |
-- |
|
Any Other
(specify) |
-- |
-- |
|
Sub - Total (A)(1) |
70881352 |
33.85 |
|
Foreign |
|
|
|
Individuals (Non-Resident Induviduals/ Foreign Individuals) |
-- |
-- |
|
Bodies Corporate |
-- |
-- |
|
Institutions |
-- |
-- |
|
Any Other (specify) |
-- |
-- |
|
Sub - Total (A)(2) |
-- |
-- |
|
Total Shareholding of Promoter Promoter Group
(A)=A(1)+(2) |
70881352 |
33.85 |
|
Public shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds / UTI |
4664504 |
2.23 |
|
Financial Institutions/Banks |
1710385 |
0.82 |
|
Central Government/ State Government(s) |
-- |
-- |
|
Venture Capital Funds |
-- |
-- |
|
Insurance Companies |
19420071 |
9.28 |
|
Foreign Institutional Investors |
26760398 |
12.78 |
|
Foreign Venture Capital Investors |
-- |
-- |
|
Any Other(specify)Foreign Banks/IFCW |
1213 |
0.00 |
|
Sub - Total (B)(1) |
52556571 |
25.10 |
|
Non-Institutions |
|
|
|
Bodies Corporate |
17605728 |
8.41 |
|
Individuals - |
|
|
|
Individual shareholders holding nominal share capital up to Rs.0.100
million. |
46518200 |
22.22 |
|
Individual shareholders holding nominal share capital in excess of Rs.
0.100 million. |
19568664 |
9.35 |
|
Any Other (specify) NRIs/OCBs |
1515434 |
0.72 |
|
Sub - Total (B)(2) |
85208026 |
40.70 |
|
Total Public Shareholding (B) = (B)(1) + (B)(2) |
137764597 |
65.80 |
|
Total (A) + (B) |
208645949 |
99.65 |
|
Shares held by Custodians against which Depository Receipts have been
issued. |
731592 |
0.35 |
|
GROUND TOTAL (A)+(B)+(C) |
209377541 |
100.00 |
Statement showing
shareholding of persons belonging to the category "Promoters and Promoter
Group" as on 31.12.2007
|
Name of the
Shareholder |
No of Shares |
Shares as a
percentage of total number of shares {i.e., Grand Total (A)+(B)+(C) indicated
in Statement at para (I)(a) above} |
|
Aura Securities Pvt.Ltd. |
51015274 |
24.37 |
|
AML Employees' Welfare Trust |
10027624 |
4.79 |
|
Atul Limited |
4127471 |
1.97 |
|
Amazon Investments Limited |
1830358 |
0.87 |
|
Aeon Investments Limited |
1126200 |
0.54 |
|
Agrimore Limited |
636000 |
0.30 |
|
Anshuman Holdings Private Limited |
400000 |
0.19 |
|
Acropolis Investments Limited |
325000 |
0.16 |
|
Anubhav Invts.Limited |
303000 |
0.14 |
|
Anagram Securities Limited |
300000 |
0.14 |
|
Anukul Investments Limited |
173092 |
0.08 |
|
Samvegbhai Arvindbhai Lalbhai |
172404 |
0.08 |
|
Adore Investments Limited |
130995 |
0.06 |
|
Anagram Stockbroking Limited |
125000 |
0.06 |
|
Amardeep Holdings Private Limited |
94250 |
0.05 |
|
Anamikaben Samvegbhai Lalbhai |
35636 |
0.02 |
|
Hansaben Niranjanbhai Lalbhai |
25085 |
0.01 |
|
Ajax Investments Limited |
10000 |
0.00 |
|
Maniniben Niranjanbhai |
5402 |
0.00 |
|
0.00Swati S Lalbhai |
5337 |
0.00 |
|
Arvind Narottambhai Lalbhai |
4735 |
0.00 |
|
Punit Sanjaybhai |
3714 |
0.00 |
|
Snehal Samvegbhai Lalbhai |
3050 |
0.00 |
|
Vimlaben S Lalbhai |
970 |
0.00 |
|
Shrenikbhai Kasturbhai Lalbhai |
414 |
0.00 |
|
Sanjaybhai Shrenikbhai Lalbhai |
152 |
0.00 |
|
Sanjaybhai Shrenikbhai Lalbhai |
100 |
0.00 |
|
Jayshreeben Sanjaybhai Lalbhai |
77 |
0.00 |
|
Kalpanaben Shripalbhai Morakhia |
12 |
0.00 |
|
Total |
70881352 |
33.85 |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturers
Marketers of Cloth (including fents, rags, etc.), Yarn, Waste, EPABX Lines
Garments]. |
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Products : |
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PRODUCTION STATUS
|
Particulars |
|
|
Unit |
Actual
Production (Quantity
in crores) |
|
Cloth |
|
|
Meters |
10.78 |
|
Cloth |
|
|
Kgs. |
0.15 |
|
Yarn |
|
|
Kgs. |
0.43 |
|
EPBAX |
|
|
Lines |
0.01 |
|
Garments |
|
|
Nos. |
1.34 |
|
Yarn @ |
|
|
Kgs. |
0.16 |
|
Grey @ |
|
|
Meters |
0.06 |
|
Grey @ |
|
|
Kgs. |
0.01 |
|
Particulars |
|
|
|
Installed
Capacity |
|
Spindles |
|
|
|
106776 |
|
Rotors |
|
|
|
7824 |
|
Stitching Machines |
|
|
|
678 |
|
Knitting Machines |
|
|
|
105 |
|
Looms |
|
|
|
1040 |
|
EPBAX / RAX System Lines |
|
|
|
200000 |
|
Garments (Pcs.) |
|
|
|
8620000 |
GENERAL
INFORMATION
|
No. of
Employees : |
Around 6000 |
|
|
|
|
Bankers : |
v State Bank of Saurashtra, Ahmedabad,
Gujarat v State Bank of India, Ahmedabad, Gujarat v Bank of Baroda, Ahmedabad, Gujarat v UCO Bank, Ahmedabad, Gujarat v State Bank of Patiala, Ahmedabad, Gujarat v Credit Lyonnais, Ahmedabad, Gujarat v Deutsche Bank, Ahmedabad, Gujarat v HDFC Bank, Ahmedabad, Gujarat v The Bank of Nova Scotia, Ahmedabad,
Gujarat v Standard Chartered Grindlays Bank,
Ahmedabad, Gujarat v Bank of America, Ahmedabad, Gujarat v ICICI Bank Limited, Ahmedabad, Gujarat v Calyon Bank v Export Import Bank of India v Axis Bank v ABN Amro Bank NV |
|
|
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors : |
Sorab S. Engineer
Company Chartered
Accountants |
|
Address : |
381, Dr. D.
Naoroji Road, Fort, Mumbai - 400 023, Maharashtra, India |
|
|
|
|
Associates : |
v Anup Engineering Limited Engaged in manufacturing of equipments for
chemical, petrochemical,
pharmaceutical, fertilizer, dairy allied industries. v Lalbhai Realty Limited Engaged in real estate
business v Amtrex Appliances Limited Engaged in manufacturing of room air conditioner. It has technical collaboration with
Hitachi, Japan. v Arvind Intex Limited v Anagram Finance Limited v Arvind Polycot Limited v Atul Products Limited v Amtrex Appliances Limited v Lalbhai Exports Limited |
|
|
|
|
Subsidiaries : |
+
Asman
Investments Limited +
Arvind
Products Limited +
Arvind
Brands Limited +
Arvind
Clothing Limited +
Arvind
Fashions Limited +
Asman
Investments Limited +
Lifestyle
Fabrics Limited +
Omnitalk
Wireless Solutions Limited +
Syntel
Telecom Limited +
Arvind
Worldwide Inc. USA +
Arvind
Worldwide (M) Inc., Mauritius +
Arvind
Overseas (M) Limited, Mauritius +
Big Mill
Lauffenmuhle GmbH, Germany +
Arvind
Spinning Limited |
|
|
|
|
Joint Ventures
: |
1. Arya Omnitalk Wireless Solutions Limited 2. Arvind Murjani Brands Private Limited 3. VF Arvind Branda Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
230000000 |
Equity Shares |
Rs. 10/- each |
Rs. 2300.000 millions |
|
9000000 |
Preference Shares
|
Rs.100/- each |
Rs.
900.000 millions |
|
|
Total |
|
Rs. 3200.000 millions |
As on 31.03.2007
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
209380000 |
Equity Shares |
Rs. 10/- each |
Rs. 2093.800 millions |
|
4620000 |
Preference Shares |
Rs. 100/- each |
Rs. 462.000 millions |
|
|
Total |
|
Rs. 2555.800 millions |
As on 31.03.2006
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
265480000 |
Equity Shares |
Rs. 10/- |
Rs. 2654.800millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
2555.800 |
2654.800 |
2614.000 |
|
|
2] Reserves &
Surplus |
11314.500 |
12664.700 |
10197.500 |
|
NETWORTH
|
13870.300 |
15319.500 |
12811.500 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
17670.700 |
16883.800 |
14912.300 |
|
|
2] Unsecured
Loans |
1615.700 |
1529.900 |
1911.900 |
|
TOTAL BORROWING
|
19286.400 |
18413.700 |
16824.200 |
|
|
DEFERRED TAX LIABILITIES |
128.200 |
0.000 |
0.000 |
|
Non Convertible Debentures
|
56.700 |
0.000 |
0.000 |
|
|
|
|
|
|
|
TOTAL
|
33341.600 |
33733.200 |
29635.700 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
20448.900 |
13096.000 |
13816.900 |
|
Capital work-in-progress
|
714.500 |
795.900 |
1030.700 |
|
|
|
|
|
|
|
INVESTMENT
|
480.500 |
3481.000 |
1530.200 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
6450.100
|
4792.600
|
5111.500
|
|
|
Sundry Debtors
|
2048.500
|
3682.800
|
3191.100
|
|
|
Cash & Bank Balances
|
223.100
|
95.900
|
128.700
|
|
|
Other Current Assets
|
549.500
|
0.000
|
0.000
|
|
|
Loans & Advances
|
6959.800
|
12286.400
|
7585.000
|
Total Current Assets
|
16231.000
|
20857.700
|
16016.300
|
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
4089.900
|
4046.500
|
2434.700
|
|
|
Provisions
|
443.400
|
450.900
|
323.700
|
Total Current Liabilities
|
4533.300
|
4497.400
|
2758.400
|
|
Net Current Assets
|
11697.700
|
16360.300
|
13257.900
|
|
|
|
|
|
|
|
TOTAL
|
33341.600 |
33733.200 |
29635.700 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Sales Turnover |
18449.100 |
15886.900 |
17397.900 |
|
Other Income |
162.500 |
119.800 |
0.000 |
|
Total Income |
18611.600 |
16006.700 |
17397.900 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
277.100 |
1363.800 |
1293.000 |
Provision for Taxation
|
24.400 |
92.200 |
19.500 |
Profit/(Loss) After Tax
|
252.700 |
1271.600 |
1273.500 |
|
|
|
|
|
Total Expenditure
|
18334.500 |
14642.900 |
16104.900 |
QUARTERLY RESULTS
|
PARTICULARS |
|
30.09.2007 |
30.06.2007 |
|
Type
|
|
2nd Quarter |
1st Quarter |
|
Sales Turnover |
|
5637.400 |
5103.300 |
|
Other Income |
|
16.500 |
134.300 |
|
Total Income |
|
5653.900 |
5237.600 |
|
Total Expenditure |
|
4854.300 |
4382.000 |
|
Operating Profit |
|
799.600 |
855.600 |
|
Interest |
|
337.100 |
438.100 |
|
Gross Profit |
|
462.500 |
417.500 |
|
Depreciation |
|
350.900 |
354.500 |
|
Tax |
|
6.600 |
4.800 |
|
Reported PAT |
|
105.000 |
58.200 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
1.30 |
1.25 |
1.23 |
|
Long Term Debt Equity Ratio |
0.48 |
0.84 |
0.86 |
|
Current Ratio |
1.13 |
1.94 |
1.95 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
0.88 |
0.75 |
0.82 |
|
Inventory |
3.28 |
3.28 |
3.82 |
|
Debtors |
6.44 |
4.72 |
6.14 |
|
Interest Cover Ratio |
1.18 |
2.02 |
2.08 |
|
Operating Profit Margin (%) |
17.42 |
26.18 |
23.38 |
|
Profit Before Interest Tax Margin (%) |
9.65 |
16.63 |
14.62 |
|
Cash Profit Margin (%) |
9.14 |
17.39 |
16.24 |
|
Adjusted Net Profit Margin (%) |
1.37 |
7.83 |
7.48 |
|
Return on Capital Employed (%) |
5.34 |
8.52 |
9.05 |
|
Return on Net Worth (%) |
1.81 |
9.17 |
10.59 |
LOCAL AGENCY FURTHER
INFORMATION
The company was
incorporated on 1st June, 1931 at Ahmedabad in Gujarat having
Company Registration Number 93.
Subject is the
flagship company of Lalbhai Group, which was incorporated to manufacture cotton
textiles.
Subject for long
has been one of the leading cotton manufacturing companies in the country
producing conventional suiting fabrics, shirting fabrics sarees had moved into
denim manufacturing in 1980's.
Subject has a wide
product range, which includes Suitings, Shirtings, Sarees Dress Materials has
diversified into Denim manufacture is the 5th largest denim
manufacturer in the world.
Subject has tie-ups
with H I Lee Cluett International, USA to manufacture denim jeans Arrow shirts
respectively.
The denim project
went on stream in 1991.
Subject's recent
tie-ups include its technical marketing alliance with F M Hammerie
Von-Ogensever Waltungs, Australia, the USA based Alamac Knit Fabrics Spinners
Webexi Dict Turt, Switzerland. Other
brportfolio are Flying Machine, Ruggers, Newport, Ruf-and-Tuf, Excalibur, etc.
During 1985 the
company diversified into electronics by setting up a plant to manufacture
electronic telephone exchanges (EPABX). It also entered into marketing
pharmaceutical products B&W colour television sets under the name
Pyramid. Rohit Mills, a sick textile
unit was merged with the company with effect from 1st November, 1996
renamed Asoka Cotsyn division. The
company now proposes to merge Arvind Intex, a subsidiary company engaged in
cotton spinning activities, in which it holds a stake of 49.89%.
The company had
also ventured into production of video magnetic tape of VHS Standards in
1988. In this regard, the company had
signed an agreement with Victor Company of Japan for technical assistance
licence for production marketing of videotapes.
The company has
taken over the management of Nagri Mills Company Limited proposed to modernize
the existing capacity.
The green field
textile project at village Santej with a capacity of processing 34 million
meters per annum had commenced commercial production with effect from 1st
April, 1999. It also started operating two captive Co-generation Power plants
after test runs in the 2nd 3rd quarter of 1998-99.
The company
commissioned its' shirtings facility at Santej during the first quarter of 2000
the Knits facility was commissioned in the third quarter of 2000.
The company was
also planning a rights issue sale of non-core assets if lenders agree to the restructuring
proposal prepared by KSA Techno Pak, an Indo-US consultant Jardine Fleming, now
Chase Jardine Fleming.
It intends to raise
Rs. 1000 millions through the rights issue Rs. 750 millions through sale of
assets, mostly real estate. The money would be used to buy back debt. The
restructuring proposal is strictly subject to the lenders agreeing to sell back
a minimum of Rs. 5500 millions debt the company would raise new debt to
part-finance the buyback.
HISTORY
Arvind Mills (AML). the flagship company of Lalbhai Group
was incorporated in 1931 to manufacture cotton textiles. AML, for long has been
one of the leading cotton manufacturing company in the country producing
conventional suiting fabrics, shirting fabrics, sarees has moved into denim manufacturing
in 1980's is currently the largest denim manufacturer in the world.
The company with both international local brands is one of the leading player
in the domestic ready to wear garment industry. The company has the rights to
market international brands such as Arrow, Lee, Flying Machine etc in India.
The company has also owns popular brands such as Newport, Ruggers, Excalibre
Ruf & Tuf. It has tied-up with H I Lee for Lee brin denim Jeans with Cluett
International, US, for Arrow Shirts for manufacturing marketing in India.
Subject's recent tie-ups include its technical marketing alliance with F M
Hammerie Von-Ogensver Waltungs, Austria, the US-based Alamac Knit Fabrics &
Spinners Webexi Dict Turt, Switzerland. The denim project went on stream in
1991. Subjectin 1985 has diversified into electronics by setting up a plant to
manufacture electronic telephone exchanges (EPABX). It also entered into
marketing pharmaceutical products B&W colour television sets under the name
Pyramid.
The company has taken over the management of Nagri Mills Co. Limited. The
company has merged Rohit Mills, a sick textile unit with it effective from Nov
1, 1996. renamed Rohit mills as Asoka Cotsyn. The green field textile project
at village Santej with a capacity of processing 34 million meters per annum has
commenced commercial production with effect from 1st April, 1999. It also
started operating two captive Co-generation Power plants after test runs in the
2nd 3rd quarter of 1998-99.
The Company commissioned its Shirtings facility at Santej during the first
quarter of 2000 the Knits facility was commissioned in the third quarter of
2000. The company intends to raise Rs 1000 million through the rights issue Rs
750 million through sale of assets, mostly real estate. The money would be used
to buy back debt. The restructuring proposal is strictly subject to the lenders
agreeing to sell back a minimum of Rs 5500 million debt the company would raise new debt to part-finance the
buyback.
It has acquired a sick cotton mill Ankur Textiles. Arvind Overseas (Mauritius)
Limited, a subsidiary of subject is setting up a 2.1 Million pieces p. a
garment manufacturing plant which is expected to be commissioned during
2003-04. Subject has set up a new 100% subsidiary 'Arvind Spinning Limited' to
manufacture yarn in Mauritius for AOML. In order to overcome the debt burden
the company made a Debt Restructuring programme as per the scheme it made
payment of Rs.4630 million to the lenders who opted for Debt buyback scheme.
Subsequently the total debt stands reduced to Rs.1340 million as on March,
2003.
In 2004-05 the company has wound-up the business of Arvind Overseas (Mauritius)
Limited Arvind Spinning Limited based at Mauritius. Further these plants are
moved to India. Asman Investments Limited Lifestyle Fabrics do not have any
significant operating business. The company has planned to acquire the entire
stake of Arvind Brands Limited, which was held by ICICI Ventures make its a
wholly owned subsidiary. The value of the 53.4% stake has been fixed at Rs.1060
million s this acquisition will be completed by the end of first quarter of the
succeeding year.
The company has set up a Textile Park at Santej with 102 looms being installed
as part of the Phase I. Further the Park has a capacity of supplying around
18.5 million meters of fabric per annum. The company has planned to expits
denim operations through a new plant with a capacity of 10 million meters per
annum. The process of de-bottlenecking certain production processes of Shirting
Fabric setting up the out sourcing model has been as per schedule.
During 2004-05 the company has enhanced its installed capacity of Spindles,
Rotors, Stitching Machines, Knitting Machines Garments by 11696 Nos, 264 Nos,
144 Nos, 1 Nos 1000000 Pcs. With this expansion the total installed capacity of
Spindles, Rotors, Stitching Machines, Knitting Machines Garments has increased
to 107040 Nos, 7824 Nos, 485 Nos, 63 Nos 2000000 Pcs.
OPERATIONS
Directors are pleased to inform you that the company has been successfully able to steer through financial year 2006-07, which was a very challenging period. The company operated at lower utilization levels compared to previous financial year the impact is visible in the operating profits of the company.
The operations of Arvind Brands Limited its subsidiaries were merged with the
Company with effect from 1st April, 2006 hence the figures of current year are
not strictly comparable with the previous financial year.
Sales operating income at Rs.18449.100 millions were up by 16% compared to Rs.15886.900 millions in the previous financial year, a growth of 16%. This was mainly due to addition of turnover of Arvind Brands. Operating profit of the company was Rs. 3050.800 millions compared to Rs.4148.300 millions in the previous financial year, a drop of 26%. This was mainly due to addition of Arvind Brands operations which have so far not been profitable as well as sharp drop in denim volume realisations. There was one time extraordinary profit due to sale of business to VF Arvind Brands Private Limited amounting to Rs.1001.200 millions a write-off of CENVAT balance amounting to Rs.58.300 millions resulting in net profit of Rs.942.900 millions. The Key developments of the year under review are summarized below:
* Merger of Arvind Brands Limited its subsidiaries with the Company with effect
from 1st April, 2006;
* Wholesale branded apparel business of erstwhile Arvind Fashions Limited has
been sold to VF Arvind Brands
Private Limited with effect from 31st August, 2006 for a total consideration of Rs.1816.500 millions, after making
necessary provisions for claims other contingent liabilities, the company made one time profit of
Rs.1001.200 millions;
* With the denim manufacturing capacity in India going up by almost 100%, the prices volumes in domestic
market are under severe pressure;
* The cotton cost for the second consecutive year remained low the company has also benefited from the low
cost inventory it had accumulated.
The company has registered a Net Profit after Extra-ordinary Items of Rs.1195.600 millions compared to Rs.1271.600 millions in the previous financial year, a drop of 6%.
A detailed analysis of the financial results is given in the Management Discussion Analysis Report which forms part of this report.
FINANCE
During the year, Company has repaid the installments of Term Loans
amounting to Rs. 1420 millions falling
during the current year. The Company has also made fresh borrowings of
Rs. 2360 millions for funding capital expenditure other requirements. Long Term
Debt including lease of the Company stands to Rs. 12690 millions as on 31st
March 2007.
SUBSIDIARIES
A detailed discussion on subsidiary companies their performance during
the year is contained in the Management Discussion Analysis Report which forms
part of this Report.
Pursuant to Accounting Standard AS-21 issued by the Institute of Chartered
Accountants of India the Company has prepared Consolidated Financial Statements
of the Company its subsidiaries are included in the Annual Report.
In view of the closure of business disposal of the business undertaking, the
accounts of Arvind Overseas (Mauritius) Limited, Arvind Spinning Limited
Lifestyle Fabrics Limited, have not been prepared on the going on concern
basis. Aakar Foundationwear Limited Arvind Textile Mills Limited have not
commenced their businesses. The accounts of Joint Venture Company VF Arvind
Brands Private Limited have not been considered for consolidation as the same
are under preparation being the first year of operation. Hence, the accounts of
these subsidiary companies VF Arvind Brands Private Limited have not been
consolidated with accounts of the Company as per the provisions of the Accounting
Standard 21 relating to consolidation of accounts.
CORPORATE GOVERNANCE
The Company is committed to the tenets of good Corporate Governance has
taken adequate steps to ensure that the requirements of Corporate Governance as
laid down in Clause 49 of the Listing Agreement are complied with.
A separate report on Corporate Governance a Management Discussion Analysis
Report are being published as a part of the Annual Report of the Company.
The Auditors of the Company have certified that conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement are complied
by the Company their Certificate is annexed to the Report on Corporate
Governance.
FINANCIAL PERFORMANCE
REVIEW
The analysis comparison of the financials shall bring forth the positives in
growth in denim volumes in the first half of the year sudden drop in
realizations in the second half of the year, a detailed analysis follows:
Sales & Operating Income
The Revenue numbers show a decline of 4% over the last year primarily due to
lower volume of denim off take significant drop in prices during second half of
the current year. In spite of the decline in both volume realization, the Denim
constituted 60% of the total where as shirting garments contributed 19% 12%
respectively. The shirting knits business continue to be stable. With the 4
Million pieces jeans manufacturing capacity in Bangalore becoming operational
share of garments in overall sales will go up in the coming year.
The 19% drop in raw material cost as compared to last year was both on account
of lower volume of denim as well an impact of low cost of cotton through the
year.
Business Review
Developments
Denim
For the time being, denim continues to be the mainstay of Company.
Company pioneered the denim market in India has been the undisputed market leader for the last two decades. Even during a slowdown of dembetween 1997-2000, it continued to leverage opportunities in the domestic market. However, the current supply glut in the domestic denim domestic market has dragged down the entire company's financial performance. The situation is not expected to improve in the near term.
The stated strategy of Company is to defocus from the domestic mass market
focus on mid premium brands in the US EU. After careful deliberation
consultation with key customers, it is reorganizing its marketing set up. A
European product marketing initiative, headed by a European CEO marketing head,
has been set up in Italy during the current financial year. The initial
response to this new organization has been very encouraging. A design studio in
SOHO, New York was also started in the previous financial year. The response to
this too, has been very positive. Breakthroughs have been accomplished with customers
who have never previously considered Company for selection. Encouraged by the
European experience, a new marketing organization for the US is also being
created. A new CEO has been finalized for the US he will take charge in the
first quarter of 2007-08. An amount of Rs.40 millions has been debited on
account of initial setup management fee for the European operations.
The cotton cost for the first half of the next financial year will be low
because of inventory purchased in the previous cotton season. The new cotton
season is expected to open higher than the current inventory holding levels
margins could be impacted in the second half. There are no other supply side
factors that are significantly impacting the margins.
The outlook on denim in the near term continues to be negative. Positive impact
from the European team's efforts will be reflected only in the third quarter of
2007-2008. The new US team's efforts are only expected to fructify in the final
quarter of 2007-2008.
Branded Apparel Retail
The branded apparel business of Company consists of:
* Its own brands of Excalibur, Flying Machine, Newport Ruf and Tuf
* The substantially long period license brof Arrow
* 50% interest in Arvind Murjani Brands Private Limited that holds the perpetual license for apparel
accessories of Tommy Hilfiger brin India
* Megamart, once the channel for disposing of surplus, which has been successfully repositioned. Continued
thrust towards selling private labels through this channel has resulted in the turnover reaching Rs.1000 millions
in the current financial year.
During the current year, the comparable revenues excluding figure of VF license
brhas grown by 18% age. Company currently has 122 EBO's across various brands
is planning to take number to 193 in the financial year 2007-2008. The Megamart
channel has currently 55 company owned franchisee stores. This will be
increased to 100 stores in the next two years.
Company's future strategy in the branded apparel business is to build a strong
portfolio of brands, both owned and
licensed. This will span multiple channels price points, with each
brappropriating sharp differentiated consumer propositions. 'Arrow' will be the
lead brin the Premium segment with the positioning of best-in class style for
the premium consumer. Excalibur will address the young executives' need for
dressing solutions. Flying Machine is being positioned on the platform of
'Youth Expression' with the vision to grow it into an iconic youth brand.
Newport is clearly positioned as a 'campus wear' brfor college students seeking
'Affordable Fashion'. Brands in mass premium channels will be sold across
exclusive outlets, department stores, cash carry, multibrfactory outlets. Ruff
n Tuff will be the lead brin the mass segment will be largely merchandised
through the emerging channel of Hypermarkets.
Company's share in the mass segment will be further increased by offering private label solutions to Hypermarkets.
On the retail front, Company wishes to focus primarily on branded apparel
retail. The strategy is to reposition Megamart as a place to 'shop smart feel
smart'. It will offer not just big brands at discount, but even greater value
through private brands that leverage Arvind's 'fabric to fashion' expertise.
The Megamart consumer experience will be quite superior to other discount
formats. As part of this strategy, there is an aggressive expansion plan to
open large format Megamarts in the top 15 cities. These stores will be 50,000
sq ft + as compared to the current size of 5000 sq ft. Rapid expansion of
current format Megamarts to Tier 2 Tier 3 towns has been initiated from April,
2007.
Garment Operations
The garment business now contributes to 15% of the Company's turnover. The
turnover has increased by 17% compared to the previous financial year's figure.
The growth is on account of both, better productivity in shirt operations the
addition of jeans garment operations.
The current financial year saw significant strides being made in jeans
manufacturing operations. The jeans plant capacity was doubled to 8 million
pieces during the current financial year. The order book for jeans is full the
Company is exploring organic inorganic avenues to expthe business.
The knits operation was stable during the year has benefited from better fabric
productivity. The year also saw initiation of dialogue with one of the largest
sportswear brin the world for a long term growth strategy. The Company hopes to
do larger volumes of business with this customer in 2007-2008. If the relationship
fructifies in the direction envisaged, the knits operations could witness
substantial growth.
Shirt operations are operating at optimum capacity utilization productivity has
increased significantly. The Company is looking at methods to increase the
capacity through third party tie ups or joint ventures.
Shirting
The shirting business continues to be stable. The business has suffered
few temporary reverses due to the sluggish post-festival retail season. The
Company is focused on offering only value added mid premium products in the
shirting sphere. It has made significant investments to move towards this goal.
This includes a state-of-the art printing facility that will allow it to enter
the women's top wear segment. The Company is also creating a dedicated ammonia
finishing plant through third party investment. A first of its kind in India,
this facility will allow significant upgradation of its product mix.
The outlook for shirting is stable. The Company is of the opinion that
thecurrent selling prices are sustainable near term realizations are not likely
to witness any significant downturn.
Telecom
The telecom division of Company comprises of two operations a) manufacturing
and marketing of EPABX machines under the
brSYNTEL b) providing Public Mobile Radio Trunking Services (PMRTS) in certain
service areas under the brOMNITALK. Arvind has license to operate PMRTS in 9
cities.
An agreement with Arya group which also has license for PMRTS in another 9
cities had created a 50:50 joint venture company Arya Omnitalk Wireless
Solutions Private Limited, which manages the PMRTS business of both Arya group
as well as Arvind's. Due to restrictions by DoT policy the license the licenses
were held by the respective companies not transferred.
With the liberalized policy guidelines, it is possible to transfer the licenses. Hence company is proposing to demerge the PMRTS assets into a 100% subsidiary subsequently combine the license of both the group in one entity.
SUBSIDIARIES
Arvind Products Limited
The Company returned its first full year of significant profitability. The
performance of the Company improved primarily on back of significant turnaround
in the Khakis business of the Company. The Company earned a net profit of Rs.70
millions in the current financial year compared to a loss of Rs. 70 millions in
the previous year. The operating profit of the Company rose by 26% to Rs.610
millions compared to Rs. 480 millions in the previous financial year. The
Company is expected to return similar performance in 2007-08.
OUTLOOK
The Company maintains a cautious outlook on its near term revenue earnings. Its
efforts are focused towards rapidly growing the downstream business of garment
packages, branded apparel retail. The impact of these efforts will be visible
in the medium to long term. Substantial investments have been made in resources
people to create an effective front end for fabric operations as well as
develop the ability to deliver differentiated products. These initiatives are
likely to yield results in the second half of the financial year 2007-2008. The
caution on outlook is also influenced by an expected cost push on account of
cotton prices, energy cost revenue impact on account of rupee appreciation.
OVERVIEW
2006-2007 has been a challenging year for Company. It has made significant
progress towards its stated goal of becoming a truly integrated organization
that spans textile to retail. However, there have been temporary set backs
caused by a slowdown in the denim products group.
Company has launched various initiatives set in motion structural
organizational changes that will help it address immediate issues as well as
speed it on its way to long-term goals. These cover product mix, customer
structure, marketing design infrastructure, brpositioning production base.
OPERATING ENVIRONMENT
Company operates across multiple products businesses in diverse markets
environments. These include the Indian retail market for its brands, the Indian
intermediary market for fabrics the global market for the fabrics apparel
business. While its performance in most of these markets is satisfactory, the
Indian intermediary market for the denim products group is suffering from a
supply glut.
Indian Intermediary Market
The estimated demin the domestic market is growing at an impressive rate of
over 25%1. However, supply far exceeds this demand, leading to tremendous
pressure on prices volume. The denim production capacity in India was
approximately 230 million metres per annum at the end of 2005.
This is estimated to have increased to about 550 million metres per annum by the end of 2006-20071. This increase will initially focus on the domestic intermediary market before the necessary expertise is created to service the demanding export-oriented business.
The situation is compounded by the fact that the Bangladesh market, which has
traditionally been a first choice for export, is also experiencing a supply
boom. Denim production capacity in Bangladesh is projected to increase from
around 40 million metres per annum at the end of 2005, to 160 million metres
per annum by the end of 2007.
Company's shirting product group is also facing a challenge in the domestic
intermediary market. Fabric retail is under tremendous pressure as markets
rapidly shift towards ready-to-wear clothing. The proliferation of large-format
retail stores is further contributing to the slowdown in demfor fabric.
Export Market
WTO estimates for 2004 put world exports of textile clothing at 566
billion, more than 6% of total world exports. The clothing sector takes
thelion's share with 322 billion .The export market for various product groups
continues to be stable offers opportunities for the business to grow.
The import of cotton apparel into the US grew by an estimated 6% for the calendar year 2006. In the same period, the export of cotton apparel from India to the US grew by an estimated 14%, imports from China grew by 31% imports from Mexico fell by 15% 2.
The primary objective for Indian apparel manufacturers is to
replace the space being vacated by Mexico, Honduras, Guatemala other countries
in South Latin America. Further, in the total export basket of cotton apparels
from Asean Sub Saharan countries, the markets for Indian fabric have grown by
an estimated 20% 2, demonstrating a positive rapid shifting of sourcing base.
The growth in apparel exports from the region will help strengthen the
relationship that Company enjoys with major American brands to create larger
business volumes.
The total textile apparel import into the European Union (EU) for 2006 has
grown by an estimated 3% by value over 2005, while volume has dropped by an
estimated 8%. This indicates an increase in prices. Imports from India during
the same period grew by 15% in value terms 9% in volume terms, indicating an
improvement in price realization. Interestingly, the data indicates that
imports from China in the same period grew by 11% in value terms only 4% by
volume 3.
For the time being, denim continues to be the mainstay of Company, both in terms of revenue earning. The international denim market is estimated to be about 6 billion square metres.. While most of the production is based out of Asia, the main consuming markets are the Americas the European Union. While capacity in Asia is rapidly increasing as stated earlier, manufacturing units in the EU Americas are fast becoming unviable closing down.
In the near future, the revenue earnings composition of Company is set to shift
in favour of the retail apparel businesses.
Business logic dictates that where apparel manufacturing is viable, the fabric
business will follow. With the apparel manufacturing base decisively shifting
to Asia, even remaining capacity in EU America will turn unviable or remain
with niche players operating in specific segments.
Indian Retail Market
The Indian retail market is the most promising of all market spaces Company
operates in. It is present through the branded apparel business as well as through
sale of fabric to apparel manufacturers. It also supplies, on a small scale,
ready-to-wear garments for store labels to large format retail stores.
Recent research has decisively indicated tremendous growth in the organized retail
sector in India. This sector is currently estimated at around Rs.160000
millions with an approximate growth rate of 30%. Organized retail, which is
currently only about 3%-4% of the annual retail spend in India, is expected to
rapidly gain share grow to approximately 1 lakh crores by year 2010.4
The growth in organized retail in India is relevant to Company in many ways. In
the international market, 58% of the organized retail spend is on grocery only
22% is on apparel. In India, however, apparel accounts for roughly 39%.5 That
would put the estimated market size of apparel sold through organized retail at
Rs.390000 millions in 2010. Even if Company manages to capture only 5% of
market share, this would translate into revenues of almost Rs.20000 millions,
giving a CAGR of 60% for its branded apparel retail business.
RESULT REVIEW
Revenue of Company, for the year ended 31st March, 2007, was Rs.18450
millions. This represents an increase of 16% over the revenue of Rs.15890
millions for the previous financial year.6 The operating profit for the year
ended 31st March, 2007 stood at Rs. 3210 millions as against Rs.4270 millions
in the previous financial year, representing a drop of 25%. There is an
extraordinary profit on account of sale of stake in VF Arvind Brands Private
Limited after providing for few non-recurring expenses the net amount is Rs.
940 millions. The profit after tax extra ordinary items stood at Rs.1200
millions compared to Rs.1270 millions in the previous financial year,
representing a drop of 6%.
Sales Operating Income
Business revenue from the textile apparel business are lower compared to
previous year primarily due to lower denim volumes a sharp reduction in
realization. Revenues from all other product groups have remained stable or
moved upwards. Further, with the merger of the branded apparel business with
Company, sales to Arvind Brands are now treated as internal sales knocked
off.
The revenue of Arvind Brands for the year ended 31st March, 2007 was at Rs.3470
millions. The previous financial year figures include sales from VF licensed
brands. If such sales were excluded from both the years, revenue growth would
be 18%.
The Evolution
1930 was a year the world suffered a traumatic depression. Companies across the
globe began closing down. In UK in India the textile industry in particular was
in trouble. At about this time, Mahatma Gandhi championed the Swadeshi Movement
at his call, people from all India began boycotting fine superfine fabrics,
which had so far been imported from England. In the midst of this depression
one family saw opportunity. The Lalbhais reasoned that the demfor fine
superfine fabrics still existed. any Indian company that met this demwould
surely prosper. The three brothers, Kasturbhai, Narottambhai Chimanbhai decided
to put up a mill to produce this superfine fabric. Next they looked around for
state-of-the-art machinery that could produce such high quality fabric. Their
search ended in England. The best technology of that time was acquired at a most
attractive price. a company called Subjectwas born.
Subjectstarted with a share capital of Rs 2,525,000 ($55,000) in the year 1931.
With the aim of manufacturing the high-end superfine fabrics Arvind invested in
very sophisticated technology. With 52,560 ring spindles, 2552 doubling
spindles 1122 looms it was one of the few companies in those days to start
along with spinning weaving facilities in addition to full-fledged facilities
for dyeing, bleaching, finishing mercerizing. The sales in the year 1934, three
years after establishment were Rs 4.576 million s profits were Rs 0.282 million
s. Steadily producing high quality fabrics, year after year, Arvind took its
place amongst the foremost textile units in the country.
In the mid 1980’s the textile industry faced another major crisis. With the
power loom churning out vast quantities of inexpensive fabric, many large
composite mills lost their markets, were on the verge of closure. Yet that
period saw Arvind at its highest level of profitability. There could be no
better time, concluded the Management, for a rethink on strategy. The Arvind
management coined a new word for it new strategy – Renovision. It simply meant
a new way of looking at issues, of seeing more than the obvious that became the
corporate philosophy. The national focus paved way for international focus
Arvind’s markets shifted from domestic to global, a market that expected
accepted only quality goods. An in-depth analysis of the world textile market
proved an eye opener. People the world over were shifting from synthetic to
natural fabrics. Cottons were the largest growing segments. But where
conventional wisdom pointed to popular priced segments, Renovision pointed to
high quality premium niches. Thus in 1987-88 Arvind entered the export market
for two sections. Denim for leisure fashion wear. high quality fabric for
cotton shirtings trousers. By 1991 Arvind reached 1600 million meters of Denim
per year it was the third largest producer of denim in the world.
In 1997 Arvind set up a state-of-the-art shirting, gabardine knits facility,
the largest of its kind in India, at Santej. With Arvind’s concern for
environment a most modern affluent treatment facility with zero affluent
discharge capability was also established.
Year 2005 is a watershed year for textiles. With the mulitifiber agreement
getting phased out the disbanding of quotas, international textile trade is
poised for a quantum leap. In the domestic market too, the rationalizing of the
cenvat chain the growth of the organized retail industry is likely to make
textiles apparel see an explosive growth.
Arvind has carved out an aggressive strategy to verticalize its current
operations by setting up world-scale garmenting facilities offering a one-stop
shop service, of offering garment packages, to its international domestic
customers.
With the Indian economy poised for rapid growth, Arvind brands with its
international licenses of Lee, Wrangler, Arrow Tommy Hilfiger its own domestic
brands of Flying Machine, Newport, Excalibur Ruf and Tuf, is setting it’s vision on becoming the largest apparel
brands company in India.
The company with
both international local brands is one of the leading players in the domestic
ready-to-wear garment industry. It has
the rights to market international brands such as Arrow, Lee, Flying Machine,
etc. in India. It also owns popular
brands such as Newport, Ruggers, Excalibre Ruf and Tuf.
It tied up with H I Lee for Lee brin Denim Jeans with Cluett
International, USA for Arrow Shirts for manufacturing marketing in India.
The company is in
trade terms with the following:
v
Atul
Enterprises
v
Albaj
Engineering Corporation
v
B. Trikamlal
and Company
v
Climax
Marketing Private Limited
v
Fourwent
Engineering Company
v
Geekay
Corporation
v
Chamunda
Fabrication
v
Chipko Bonding
Systems
v
Siddhi
Polymers Private Limited
v
Archem
Industries
v
Arjyot
Chemicals Private Limited
v
Synergy
Chlorinations Private Limited
v
Bhagat
Engineering Works
v
Bhavik
Industries
v
Shree Laxmi
Engineering
v
Gemini
Polyplast Industries
v
Sun Industries
v
Khodiyar
Industries
v
R-Tex
Enterprise
As Per Web Details
Profile
The
Subjectwas set up with the pioneering effort of the Lalbhai brothers in 1931.
With the best of technology business acumen, Arvind has become a true Indian
multinational, having chosen to invest strategically, where demhas been high
quality required has been superlative. Today, The Subject is the flagship
company of Rs.20 billion (US$ 500 million) Lalbhai Group.
Subjecthas set the pace for changing global customer demands for textiles has
focused its attention on select core products. Such a focus has enabled the
company to play a dominant role in the global textile arena. With its presence
across the textile value chain, the company endeavors to be a one-stop shop for
leading garment brands.
Forevision Technology has brought Arvind to be one of the top three producers
of Denim in the world, on its way becoming the Global Textile Conglomerate.
Arvind is already making its presence felt in Shirting’s, Knits Khakhis fabrics
apart from being all set to create ripples in the ready to wear Garments world over.
The company's fixed
assets of important value include lfreehold leasehold, buildings, machinery,
machinery given on lease, motor vehicles office machinery dead stock.
Press
Releases
Arvind
Mills net at Rs 360 million
Bureau
AHMEDABAD:
Textile major Subject has reported a net profit of Rs 360 million on a turnover of Rs 414 million for the third quarter of the current year.
The sales have risen 19 per cent during the October-December quarter of 2004-05
as compared with Rs 3490 million in the
same period last year. The net profit has jumped from Rs 190 million in the last financial year to Rs 360 million this year, a company press release said here
on Thursday.
Arvind Mills to
relocate Mauritius plant
Their Corporate Bureau
13 August 2004
Mumbai: Arvind
Mills is planning to shift its existing denim garments manufacturing facilities
from Mauritius to India by December 2004, it said in a release.
The company,
through its subsidiary companies, has eight million meters of denim
manufacturing facility two million pieces of jeans plant at Mauritius the total
investment was to the tune of Rs 400 million.
The company would
augment its denim manufacturing capacity to 105 million meters in the country
after the plant is shifted, the release said.
The company is also
setting up a 2.1 million jeans plant at Bangalore,
which would be increased to about four million pieces on account of shifting of
capacities from Mauritius, it added.
Arvind Mills to
set up new mills
Pradeep Rane
4 May 2004
As part of its
efforts to take advantage of dismantling of quota regime from January 2005,
textile major Subject is planning to set up new plants in Bangalore Ahmedabad.
The company is raising its garments capacity to 14.4 million pieces by end of
FY 2005.
The plan includes
capacity addition in jeans, khakis an expansion of its knitted garments factory
at Ahmedabad. Arivind is taking several initiatives to capture the enormous
upside expected out of WTO opportunities post 2005.
To raise its garments
capacity to 14.4 million pieces by end of FY 2005, the company is plannig to
set up new facilities - a 2.1 million pieces jeans factory, a 1.5 million
pieces khakis factory in Bangalore. Both these are expected to be completed by
end-FY 2005. Also, the existing knitted garments factory at Ahmedabad is being
expanded to 4.2-million piece capacity.
"Clearly, AML
is on track with its several initiatives targeted at capturing the enormous
upside expected out of the dismantling of the quota regime effective
Jan-2005," says a leading securities research firm.
Also the textile reconstruction fund
notified by the central government would offer AML an opportunity to further
reduce interest costs. The scheme would help the company to reduce its
effective interest rate for textile companies to 8-9 per cent in order to
enhance its competitive edge. AML has an opportunity to get Rs6 billion of its
existing borrowings refinanced under this scheme, leading to an annual saving of
Rs180 million to 240 million per annum.
The company is also
trying to reduce its power costs as it is seeking to shift to natural gas from
high cost naphtha for its captive power plants. The company has recently
entered into a 3-year agreement with one of the natural gas suppliers. Supplies
are expected to commence in Q2FY05, would yield substantial savings in fuel
costs. It is estimated that annual savings on this count to be between Rs300m
400m.
The company has
reported 11 per cent YoY decline in sales to Rs3.48bn 34 per cent drop in
net profits to Rs152m in financial year '04. In terms of positive contributors
— interest charges declined 39 per cent YoY forex gains of an estimated between
Rs160 Rs180mn were booked during the quarter.
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
reasonable 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 governance. These factors often have
been predictive 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 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
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.29 |
|
UK Pound |
1 |
Rs.77.02 |
|
Euro |
1 |
Rs.58.16 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
55 |
This score serves as a reference to assess SC’s credit risk
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 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 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
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 principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest 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 |
|