MIRA
INFORM REPORT
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Report Date : |
19.03.2008 |
IDENTIFICATION
DETAILS
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Name : |
SUPER SPINNING MILLS LIMITED |
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Registered Office : |
Elgi Towers, P. B. 7113, 737 – D, Green Fields Puliakulam Road, Coimbatore 641 045, Tamilnadu |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
06.06.1962 |
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Com. Reg. No.: |
001200 |
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CIN No.: [Company
Identification No.] |
L17111TZ1962PLC001200 |
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Legal Form : |
Subject is a public limited liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Spinning of Cotton Fiber including Blended Cotton |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 5000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having fine
track. Trade relations are
fair. Business is active. Fundamentals are strong and healthy. General financial position is
satisfactory. Payments are reported
as usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
Elgi Towers, P. B. 7113, 737 – D, Green Fields Puliakulam Road, Coimbatore 641 045, Tamilnadu, India |
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Tel. No.: |
91-422-2311711 / 2314511 |
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Fax No.: |
91-422-2311611 / 2315111 |
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E-Mail : |
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Website : |
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A Unit: |
Kirikera, Hindupur - 515 211, Anantapur District, Andhra Pradesh, India |
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Tel. No.: |
91-8556-220522 / 220194 |
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Fax No.: |
91-8556-220997. |
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E-Mail : |
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B Unit : |
Kotnur, Hindupur - 515 213, Anantapur, Andra Pradesh, India |
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Tel. No.: |
91-8556-20182/20187 |
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Fax No.: |
91-8556-20858 |
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E-Mail : |
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C Unit : |
D.- Gudalur, Dindigul - 624 620, Tamilnadu, India |
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Tel. No.: |
91-4551-225310/22530 |
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Fax No.: |
91-4551-225229 |
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E-Mail : |
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D Unit : |
Udumalpet, Tamilnadu |
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Super Sara : |
Beerapalli, Andhra Pradesh |
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Garment Units: |
New Tirupur, Thekkalur, Tamilnadu |
DIRECTORS
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Name : |
Mr. L G Ramamurthi |
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Designation : |
Director |
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Date of Birth/Age : |
77 Years |
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Date of
Appointment: |
01.04.1993 |
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Name : |
Mr. Sumanth Ramamurthi |
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Designation : |
Managing Director |
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Date of Birth/Age : |
49 Years |
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Qualification: |
BS ELECL Engg. [17] |
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Date of
Appointment: |
01.04.1992 |
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Name : |
Mr. K R Seethapathy |
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Designation : |
Executive Director |
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Name : |
Mr. S Jeyaraman |
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Designation : |
Director |
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Name : |
Mr. C R Ramamurthy |
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Designation : |
Director |
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Name : |
Mr. C S K Prabhu |
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Designation : |
Director |
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Name : |
Mr. D Sarath Chandran |
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Designation : |
Director |
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Name : |
Mr. Sudarsan Varadaraj |
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Designation : |
Director |
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Name : |
Mr. Vidyaprakash D |
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Designation : |
Director |
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Name : |
Mr. B Vijayakumar |
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Designation : |
Director |
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Name : |
Mr. Vijay Venkataswamy |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. C Soundara Rajan |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
[As on 31.03.2007]
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters
Holding |
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Indian Promoters |
21882224 |
39.79 |
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Non Promoter
Holdings |
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Mutual Funds and Axis |
4400 |
0.01 |
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Banks, Financial Institutions, Insurance Companies |
529740 |
0.96 |
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FIIs |
1513500 |
2.75 |
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Others |
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Private Corporate Bodies |
4940080 |
8.98 |
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Indian Public |
25434363 |
46.24 |
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NRIs/OCBs |
695693 |
1.27 |
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Total |
55000000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Spinning of Cotton Fiber including Blended Cotton |
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Products : |
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Exports : |
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Countries : |
Ř South Korea Ř Italy Ř Germany Ř Spain Ř Portugal Ř Poland Ř Turkey Ř France Ř Japan Ř Hong Kong Ř Malaysia Ř China Ř UAE |
PRODUCTION STATUS
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Particulars |
Unit |
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Installed Capacity |
Actual Production |
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Yarn and Dyed |
KGs |
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178080 Spindles |
206.57 |
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Yarn |
KGs |
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1200 rotors |
-- |
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Garments |
PCS |
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556 Machines |
17.05 |
GENERAL
INFORMATION
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No. of Employees : |
About 1800 |
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Bankers : |
Ř
Union Bank of India Ř
State Bank of India Ř
Citibank N A Ř
The Bank of Nova Scotia Ř
Andhra Bank Ř
IDBI Bank Ř
ICICI Bank Ř Standard Chartered Bank |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Reddy, Goud and Janardhan Chartered Accountants |
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Associates : |
Ř Precot Mills Limited Ř Meridian Industries Limited Ř Elgi Electric and Industries Limited Ř Elgi Equipments Limited Ř Elgi Tyre and Tread Limited Ř L. G. Balakrishnan & Brothers Limited Ř Elgi Ultra Industries Limited |
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Group Companies : |
Ř Elgi Electric
and Industries Limited Ř Elgi Building
Products Limited Ř Ellargi and
Company Ř Elgi Ultra
Industries Limited Ř Elgi Equipments
Limited Ř Rayalseema
Technologies Limited Ř Elgitread
(India) Limited Ř Elgi Software
and Technologies Limited Ř Sara Elgi
Envirotech Limited Ř Sara Elgi
Arteriors Limited Ř Sara Elgi
Industrial Research and Development Limited Ř Magna Electro
Casting Limited Ř Precot Meridian
Limited Ř Meridian
Industries Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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100000000 |
Equity Shares |
Re. 1/- each |
Rs. 100.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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55000000 |
Equity Shares |
Re. 1/- each
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Rs. 55.000
Millions |
(Of the above 27,50,000 equity shares of Rs.10 each were issued as fully
paid up bonus shares by Capitalisation of Reserves)
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
55.000 |
55.000 |
55.000 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1206.669 |
1096.133 |
922.500 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1261.669 |
1151.133 |
977.500 |
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LOAN FUNDS |
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1] Secured Loans |
2596.126 |
2204.765 |
1528.400 |
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2] Unsecured Loans |
9.428 |
21.030 |
87.800 |
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TOTAL BORROWING |
2605.554 |
2225.795 |
1616.200 |
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DEFERRED TAX LIABILITIES |
251.997 |
247.696 |
0.000 |
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TOTAL |
4119.220 |
3624.624 |
2593.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1954.986 |
1578.183 |
1311.300 |
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Capital work-in-progress |
289.593 |
4.914 |
21.400 |
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INVESTMENT |
251.508 |
251.708 |
246.700 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
904.885
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1186.932 |
803.700 |
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Sundry Debtors |
237.564
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188.756 |
195.500 |
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Cash & Bank Balances |
49.756
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16.091 |
18.400 |
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Other Current Assets |
34.005
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24.698 |
0.000 |
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Loans & Advances |
1264.551
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1057.795 |
930.200 |
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Total
Current Assets |
2490.761
|
2474.272 |
1947.800 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
876.561
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698.921 |
780.900 |
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Provisions |
0.000
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0.000 |
170.000 |
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Total
Current Liabilities |
876.561
|
698.921 |
950.900 |
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Net Current Assets |
1614.200
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1775.351 |
996.900 |
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MISCELLANEOUS EXPENSES |
8.933 |
14.468 |
17.400 |
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TOTAL |
4119.220 |
3624.624 |
2593.700 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
3941.929 |
3631.652 |
3675.200 |
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Other Income |
18.732 |
21.014 |
48.300 |
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Total Income |
3960.661 |
3652.666 |
3723.500 |
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Profit/(Loss) Before Tax |
222.422 |
336.239 |
137.000 |
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Provision for Taxation |
78.201 |
112.050 |
24.700 |
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Profit/(Loss) After Tax |
144.221 |
224.189 |
112.300 |
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Earnings in Foreign Currency : |
1308.493 |
1383.300 |
NA |
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Expenditures : |
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Selling Expenses |
173.596 |
173.580 |
297.800 |
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Administrative Expenses |
128.500 |
110.736 |
430.100 |
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Raw Material Consumed |
1778.632 |
1484.624 |
1941.800 |
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Purchases made for re-sale |
32.285 |
194.628 |
28.000 |
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Increase/(Decrease) in Finished Goods |
[27.272] |
[104.953] |
63.900 |
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Salaries, Wages, Bonus, etc. |
341.472 |
301.773 |
229.700 |
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Repairs |
94.779 |
92.399 |
0.000 |
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Processing Charges |
424.148 |
335.620 |
0.000 |
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Interest |
145.651 |
124.455 |
132.800 |
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Stores |
115.222 |
98.604 |
0.000 |
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Power & Fuel |
301.169 |
303.886 |
288.800 |
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Depreciation |
230.057 |
201.075 |
173.600 |
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Total Expenditure |
3738.239 |
3316.427 |
3586.500 |
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QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
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Sales Turnover |
913.900
|
1026.200
|
912.800
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Other Income |
3.100
|
36.900
|
41.800
|
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Total Income |
917.000
|
1063.100
|
954.600
|
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Total Expenditure |
779.100
|
930.600
|
863.300
|
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Operating Profit |
137.900
|
132.500
|
91.300
|
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Interest |
50.900
|
54.200
|
50.600
|
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Gross Profit |
87.000
|
78.300
|
40.700
|
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Depreciation |
61.700
|
60.400
|
58.600
|
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Tax |
7.200
|
4.900
|
-08.500
|
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Reported PAT |
16.000
|
8.700
|
-04.200
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KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
2.00 |
1.80 |
1.78 |
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Long Term Debt-Equity Ratio |
1.19 |
0.94 |
0.85 |
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Current Ratio |
1.23 |
1.18 |
1.12 |
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Fixed Assets |
1.12 |
1.21 |
1.42 |
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Inventory |
3.77 |
3.65 |
3.43 |
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Debtors |
18.49 |
18.90 |
21.17 |
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Interest Cover Ratio |
2.33 |
3.54 |
2.03 |
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Operating Profit Margin(%) |
15.65 |
18.43 |
12.06 |
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Profit Before Interest And Tax Margin(%) |
9.81 |
12.89 |
7.34 |
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Cash Profit Margin(%) |
9.46 |
11.70 |
7.78 |
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Adjusted Net Profit Margin(%) |
3.62 |
6.16 |
3.06 |
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Return On Capital Employed(%) |
10.71 |
15.76 |
10.45 |
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Return On Net Worth(%) |
11.83 |
21.03 |
12.02 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets
Ř Land
Ř Buildings
Ř Plant and
Machinery
Ř Office Furniture
and Fittings
Ř Motor Vehicles
Ř Capital Work
in-progress
Operations
Sales of manufactured goods registered a growth of 14%. Due to more
remunerative yarn prices, domestic sales grew from Rs.1844.900 Millions to Rs.
2383.700 Millions recording a growth of 29% compared to the previous year. As a
result there was a slight drop in export sales of yarn during the year under
review.
Despite the increase in turnover of the company, the profit before tax has
declined significantly to Rs.222.400 Millions compared to the previous year.
The increase in cotton prices coupled with a sharp increase in the interest
rates and the additional depreciation on account of modernization/new projects,
had an adverse impact on the profits of the company.
Industry Conditions
The Indian textile industry exploited the opportunity of
quotafree era very well and is well placed amongst the regional players in the
international markets. India's market share is growing steadily in exports due
to better product-mix and value added products resulting in better realizations
and margins. Considering the continued economic growth and emerging favorable
trends in international markets, the textile industry is poised for a steady
growth.
As a measure to strengthen further and to encourage the Textile sectors growth,
the Govt. of India has further extended TUF subsidies and other promotional
supports.
Opportunities, Risks and Concerns
Sourcing of value-added products by international players in
India is steadily increasing, resulting in a high expectation of cost effective
quality products. While growth opportunities are promising for the industry,
competition from the dominant player China and other low-cost countries are
constant threats. This coupled with the strong appreciation of Indian Rupee
vis-a-vis the US Dollar, rising labour and skilled human resource costs and
hardening interest rates will further put pressure on margins.
Company outlook
The company has recognized the changing trends and will
fully make use of the emerging opportunities and strive constantly to enhance
its market share and image as a global player. The company has identified
garments sector as a thrust area for manufacture of value added products to
reputed international players across the globe.
Despite the promising opportunities for the Textile sector on a long-term
scenario, there is a trend of slackness in the market, which coupled with the
Rupee appreciation, will put pressure on the performance of the company during
the current year. However, the company is taking concerted efforts to face
these challenges and to contain its costs in all spheres of activities.
Expansion of Spinning Capacity
During the current year, the company has commenced the
production in its new plant at Beerapalli Village, Hindupur, Andhra Pradesh
with a capacity of 30,576 spindles. The company has also acquired a mill having
a capacity of 11,424 spindles at Udumalpet, Coimbatore District, Tamilnadu. As
a result of these expansions, the overall installed capacity of the company has
increased over 1,77,080 spindles.
Sara Apparels and Fashions
For cost optimization and administrative convenience, the
location of the Garment Division has been consolidated in two places. There was
an overall improvement in production and sales during the last financial year.
The operations of this division are fully equipped to face the emerging
customer needs and demand and challenges in this industry. The company has
become a preferred vendor for reputed international and domestic brands.
Recognition and Reward
The Directors are glad to inform that Super B unit has won
the First prize from ABK - ACTS DOSOKAI, Tamilnadu Centre for implementation of
good Total Productive Maintenance (TPM) practices.
Similarly Super
'C' unit has bagged '5S' certificate of merit from ABK - AOTS DOSOKAI,
Tamilnadu Centre through AOTS - N Damotharan Trophy.
Foreign Exchange earnings
The company has
generated foreign exchange earnings of Rs.1308.500 Millions through Exports,
The foreign exchange utilized during the year amounting to Rs.444.800 Millions
towards purchase of raw material, machinery, spares, etc., resulting to a
positive inflow of Rs.863.700 Millions.
NOTES FORMING PART OF ACCOUNTS
|
|
31.3.2007 [Rs. In Millions] |
|
1. Estimated amount of contracts remaining to
be executed on
capital account and not provided for |
350.188 |
|
2.
Contingent Liabilities: |
|
|
Letters of
Credit |
27.483 |
|
Bank Guarantees |
1.350 |
|
Bills discounted
with Company's Bankers |
71.684 |
|
Disputed Demands
from Income Tax Authorities |
149.813 |
|
Disputed Excise
Duty Liability |
6.132 |
|
Disputed Sales
Tax Liability |
14.990 |
|
Corporate
Guarantees to banks |
95.000 |
3. Term Loans from
Financial Institutions and from Banks (Including Foreign Currency Loans) to the
extent of Rs. 223.750 Millions
(Previous Year Rs. 270.000 Millions) and Rs. 1530.906 Millions (Previous
Year Rs. 801.750 Millions) respectively, are secured by:
(i) Pari-passu
first charge created on all present and future moveable and immoveable assets
of the Company subject to exclusive charges created on specific fixed assets in
favour of specified lenders.
(ii) A charge
created on all current assets of the company subject to a prior charge on such
current assets created in favour of the Company's Working Capital Bankers.
4. Working Capital
Borrowings from Banks to the extent of Rs. 841.470 Millions (Previous Year Rs.
1133.015 Millions) are secured by:
(i) Hypothecation
of Company's Inventories and Book Debts,
(ii) Second Charge
created on the Fixed Assets of the Company.
5. (i) None of the persons selling goods and
materials and / or rendering services have claimed themselves to be a
small-scale industrial undertaking.
(ii) In the
absence of necessary information with the Company relating to the registration
status of
suppliers under
the Micro, Small and Medium Enterprises Development Act, 2006, the information
required under the said Act could not be compiled and disclosed.
6. Plant and
Machineries in the Fixed Assets Schedule include a sum of Rs. 11.622 Millions
adjusted on account of Exchange Fluctuation gain (Previous Year - Nil).
7. In the opinion
of the Board, the Current Assets, Loans & Advances and other Receivables
have at least the value as stated in the Balance Sheet, if realized in the
ordinary course of business.
8. Loans and
Advances includes amount due from Companies in which the Directors are
interested amounting to Rs. 294.854 Millions (Previous Year Rs.191.143
Millions)
9. Borrowing Costs
capitalised during the year Rs. 15.712 Millions (Previous Year Rs. Nil).
10. Prior Period
Expenses represents:
Debits relating to
earlier years Rs. 0.418 Million
Credits relating
to earlier years Rs.[0.074] Million
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Total Rs. 0.344 Million
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11. Details of
Directors' Remuneration Salary,
House Rent
Allowance & Contribution to PF &
Super Annuation
Fund Rs.
27.146 Millions
Profit Share
(Commission) Rs.
10.796 Millions
--------------------------
Total Rs. 37.942
Millions
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CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 40.62 |
|
UK Pound |
1 |
Rs. 81.29 |
|
Euro |
1 |
Rs. 64.09 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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 |
|