MIRA
INFORM REPORT
|
Report Date : |
13.11.2008 |
IDENTIFICATION
DETAILS
|
Name : |
ABHISHEK INDUSTRIES LIMITED |
|
|
|
|
Registered Office : |
Trident Complex,
Raikot Road, Raikut Road, Barnala – 148 101, Punjab |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.03.2008 |
|
|
|
|
Date of Incorporation : |
18.04.1990 |
|
|
|
|
Com. Reg. No.: |
16-10307 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L99999PB1990PLC010307 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
JLDA00951G /
JLDA01343G |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AABCA4139J |
|
|
|
|
Legal Form : |
Public Limited
Company. The company’s shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturer of
Terry Towels, Cotton Yarn and Paper. |
RATING &
COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
``26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
Maximum Credit Limit : |
USD 22000000 |
|
|
|
|
Status : |
Moderate |
|
|
|
|
Payment Behaviour : |
Slow by average
30 days |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an
established company having moderate track. Its payments are slow by average
30 days. Profit margin is low. The company can be
considered for small to mediocre business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered
Office : |
Trident Complex,
Raikot Road, Raikut Road, Barnala – 148 101, Punjab, India |
|
Tel. No.: |
91-1679-244700/244701/02 |
|
Fax No.: |
91-1679-244708 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate
Office : |
E-212, Kitchlu Nagar,
Ludhiana – 141001, Punjab, India |
|
Tel. No.: |
91-161-5039999/5038888 |
|
Fax No.: |
91-161-5039900/5038800 |
|
E-Mail : |
|
|
|
|
|
Factory : |
Mansa Road, Dhaula Barnala, District Sangrur – 148 101, Punjab, India |
DIRECTORS
|
Name : |
Mr. Rajinder
Gupta |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. S. K. Tuteja |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Ms. Pallavi
Shroff |
|
Designation : |
Director |
|
|
|
|
Name : |
Ms. Ramni Nirula |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Rajiv Dewan |
|
Designation : |
Director |
|
|
|
|
Name : |
Ms. Ravneet Kaur |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ajay Relan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Anurag Verma |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Pawan Jain |
|
Designation : |
Company Sectary |
|
|
|
|
Name : |
Mr. Arun Goyal |
|
Designation : |
Chief Financial
Officer |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders (As on 30.06.2008):- |
No. of Shares |
Percentage of
Holding |
|
(A)
Shareholding of Promoter and Promoter Group |
|
|
|
(1)
Indian |
|
|
|
Individuals / Hindu Undivided Family |
588266 |
0.30 |
|
Bodies Corporate |
31621608 |
16.29 |
|
Financial Institutions / banks |
7715596 |
3.97 |
|
Any Other (Trust) (Specify) |
83417903 |
42.96 |
|
|
|
|
|
(B) Public Shareholding |
|
|
|
(1) Institutions |
|
|
|
Mutual Funds/UTI |
42065 |
0.02 |
|
Financial
Institutions / Banks |
1499466 |
0.77 |
|
Insurance Companies |
292 |
0.00 |
|
Foreign Institutional Investors |
22594560 |
11.64 |
|
|
|
|
|
(2)
Non Institutions |
|
|
|
Bodies Corporate |
5437154 |
2.80 |
|
Individuals – Individual shareholders holding nominal
share capital up to Rs. 0.100 million |
35322319 |
18.19 |
|
Individual shareholders holding nominal share capital in
excess of Rs. 0.100 million |
5859076 |
3.01 |
|
Any Other (Specify) (Share in Transit) |
96370 |
0.05 |
|
Total |
194194675 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer of
Terry Towels, Cotton Yarn and Paper |
||||||||
|
|
|
||||||||
|
Products : |
v
Sulphuric
Acid v
Cotton Yarn v
Terry Towels v
Writing and
Printing Paper Generic Names Of Principal Products :-
|
PRODUCTION STATUS (As on 31.03.2008):-
a) Actual
Production
|
Particulars |
|
Unit |
Actual
Production |
|
Cotton Yarn |
|
MT |
42244 |
|
Processed Yarn |
|
MT |
5024 |
|
Towel |
|
MT |
24616 |
|
Paper |
|
MT |
40832 |
|
Sulphuric Acid |
|
MT |
68437 |
b) Installed Capacity
|
Particulars |
|
Unit |
Installed
Capacity |
|
Cotton Spindles |
|
Nos. |
125952 |
|
Rotors |
|
Nos. |
1920 |
|
Processed Yarn |
|
TPA |
6825 |
|
Towel |
|
LOOMS |
282 |
|
Paper |
|
TPA |
40500 |
|
Sulphuric Acid |
|
TPA |
100000 |
GENERAL
INFORMATION
|
No. of
Employees : |
8000 |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Bankers : |
v
Corporation
Bank v
ICICI Bank
Limited v
Canara Bank v
State Bank
of Patiala v
Punjab
National Bank v
State Bank of
India, Specialised Commercial Branch, Civil Lines, Ludhiana – 141 001,
Punjab, India |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Facilities : |
Term loans Term loans from
banks and financial institutions are secured by way of equitable mortgage created
or to be created on all the present and future immovable properties of the
Company and hypothecation of all the movable properties (save and except book
debts) including movable machinery spares, tools and accessories, etc.,
present and future, subject to prior charges created and/or to be created in
favour of the Company’s bankers on stocks of raw materials, semi finished and
finished goods, consumable stores and other movable, as may be required for
working capital requirements in the ordinary course of business. The
mortgages and charges referred to above rank pari-passu. (Amount due within
one year Rs 1440.5 million; Previous Year Rs 1037.9 million) Cash credits/working capital loans Cash
credit/working capital loans are secured by hypothecation of raw materials,
semi finished and finished goods, stock-in-process, consumable stores and
book debts, present and future, of the Company. The limits are further
secured by way of second pari passu charge on the fixed assets of the
Company. Vehicles loans Vehicle loans are
secured by hypothecation of vehicles acquired against such loans. (Amount due
within one year Rs 7.4 million; Previous Year Rs 5.8 million).
|
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Banking
Relations : |
Satisfactory |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Auditors : |
|
||||||||||||||||||||
|
Name 1 : |
Statutory Auditors Deloitte Haskins
and Sells Chartered
Accountants |
||||||||||||||||||||
|
Address: |
One Okhla
Institutional Area, New Delhi – 110025, India |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Name 2 : |
Internal
Auditors KPMG Chartered Accountants |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Name 3 : |
Cost Auditors Ramanath Iyer and Company Chartered Accountants |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Name 4 : |
Tax Auditors S C Vasudeva and Company Chartered Accountants |
||||||||||||||||||||
|
|
|
||||||||||||||||||||
|
Associates/Subsidiaries : |
US Subsidiary ·
Abhishek
Industries Inc., 444 NE Ravenna Blvd, Ste 402, Seattle, WA 98115, USA Europe Subsidiary ·
Abhishek
Europe SA, Place Pury 3 C/O Cabinet Beguin D’expertise Ficale CBEF SA 2001
Neuchatel, Switzerland ·
Abhishek
Industries SA, Switzerland Other subsidiary
·
Abhishek
Global Ventures Limited ·
Madhuraj
Agrotech Limited ·
Praneel
Innovations Limited ·
Lotus
Integrated Texpark Limited ·
Trident
Cotton Limited |
CAPITAL STRUCTURE
(As on 31.03.2008):-
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
500000000 |
Equity Shares |
Rs. 10/- each |
Rs. 5000.000 millions |
|
100000000 |
Preference Shares |
Rs. 10/- each |
Rs. 1000.000 millions |
|
|
Total |
|
Rs. 6000.000 millions |
Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
194194675 |
Equity Shares |
Rs. 10/- each |
Rs. 1941.900 millions |
|
|
|
|
|
|
Notes: |
|
|
|
|
|
Of the above
shares :- |
|
|
|
34629630 |
Equity shares of Rs10 each have been allotted on July 28, 1999 to the
Shareholders of the erstwhile Abhishek Spinfab Corporation Limited on
amalgamation with the Company vide Order dated May 13, 1999 of the Hon’ble
High Court for the States of Punjab and Haryana at Chandigarh, without
payment being received in cash |
|
|
|
|
|
|
|
|
93697545 |
Equity shares of Rs10 each have been allotted on March 28, 2002 to the
Shareholders of the erstwhile Varinder Agro Chemicals Limited on amalgamation
with the Company vide Order dated January 3, 2002 of the Hon’ble High Court
for the States of Punjab and Haryana at Chandigarh, without payment being
received in cash. |
|
|
|
|
|
Rs. 1941.900
millions |
|
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
1941.900 |
1941.900 |
1941.900 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2450.500 |
2052.600 |
1577.200 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
4392.400 |
3994.500 |
3519.100 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
12828.100 |
9877.600 |
6879.300 |
|
|
2] Unsecured Loans |
27.800 |
21.500 |
15.700 |
|
|
TOTAL BORROWING |
12855.900 |
9899.100 |
6895.000 |
|
|
DEFERRED TAX LIABILITIES |
644.600 |
673.100 |
563.200 |
|
|
Equity Warrants |
60.000 |
|
|
|
|
|
|
|
|
|
|
TOTAL |
17952.900 |
14566.700 |
11043.300 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
8072.000 |
7725.800 |
6467.100 |
|
|
Capital work-in-progress |
6338.600 |
3011.200 |
1209.300 |
|
|
|
|
|
|
|
|
INVESTMENT |
757.500 |
457.600 |
503.900 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2252.100
|
2341.900
|
1778.100
|
|
|
Sundry Debtors |
386.600
|
299.000
|
289.400
|
|
|
Cash & Bank Balances |
397.600
|
532.200
|
287.200
|
|
|
Other Current Assets |
0.000
|
0.000
|
0.000
|
|
|
Loans & Advances |
1576.300
|
1086.300
|
489.500
|
|
Total
Current Assets |
4612.600
|
4259.400
|
3641.400
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
1699.900
|
846.800
|
326.000
|
|
|
Provisions |
127.900
|
40.500
|
96.100
|
|
Total
Current Liabilities |
1827.800
|
887.300
|
778.400
|
|
|
Net Current Assets |
2784.800
|
3372.100
|
2863.000
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
17952.900 |
14566.700 |
11043.300 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
10486.700 |
8165.900 |
7314.200 |
|
|
Other Income |
438.100 |
268.900 |
66.700 |
|
|
Total Income |
10924.800 |
8434.800 |
7380.900 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
481.100 |
614.100 |
631.200 |
|
|
Provision for Taxation |
81.600 |
204.700 |
205.200 |
|
|
Profit/(Loss) After Tax |
399.500 |
409.400 |
426.000 |
|
|
|
|
|
|
|
|
Export Value |
5192.800 |
4352.200 |
NA |
|
|
|
|
|
|
|
|
Import Value |
2300.400 |
720.600 |
na |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Goods Sold |
5314.300 |
3703.100 |
NA |
|
|
Manufacturing Expenses |
1578.000 |
1351.400 |
NA |
|
|
Administrative Expenses |
316.300 |
339.000 |
NA |
|
|
Personal Expenses |
1230.300 |
2018.400 |
NA |
|
|
Salaries, Wages, Bonus, etc. |
NA |
NA |
568.600 |
|
|
Interest |
NA |
NA |
239.900 |
|
|
Power & Fuel |
NA |
NA |
643.300 |
|
|
Selling Expenses |
2012.200 |
571.500 |
NA |
|
|
Increase/(Decrease) Work in Process and
Finished Goods |
[7.300] |
[162.000] |
NA |
|
|
Increase/(Decrease) excise duty on Finished
Goods |
[0.100] |
[0.700] |
NA |
|
|
Depreciation & Amortization |
NA |
NA |
623.700 |
|
|
Other Expenditure |
NA |
NA |
4674.200 |
|
Total Expenditure |
10443.700 |
7820.700 |
6749.700 |
|
QUARTERLY RESULTS
|
Year |
|
30.06.2008 |
30.09.2008 |
|
|
|
|
|
|
Type
|
|
1st
Quarter |
2nd
Quarter |
|
|
|
|
|
|
Sales Turnover |
|
2957.500 |
3310.500 |
|
Other Income |
|
24.600 |
17.000 |
|
Total Income |
|
2982.100 |
3327.500 |
|
Total Expenditure |
|
2880.300 |
3321.100 |
|
Operating Profit |
|
101.800 |
6.400 |
|
Interest |
|
141.500 |
157.400 |
|
Gross Profit |
|
-39.700 |
-151.000 |
|
Depreciation |
|
232.200 |
243.600 |
|
Tax |
|
1.600 |
-153.600 |
|
Reported PAT |
|
-207.900 |
-241.000 |
KEY RATIOS
|
Year |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
2.71 |
2.24 |
1.73 |
|
Long Term Debt-Equity Ratio |
2.14 |
1.69 |
1.28 |
|
Current Ratio |
1.00 |
1.12 |
1.21 |
|
|
|
|
|
|
TURNOVER RATIOS |
|||
|
|
|||
|
Fixed Assets |
0.84 |
0.75 |
0.83 |
|
Inventory |
4.65 |
3.87 |
4.03 |
|
Debtors |
31.16 |
25.34 |
23.34 |
|
Interest Cover Ratio |
1.80 |
2.61 |
3.83 |
|
Operating Profit Margin(%) |
16.08 |
21.49 |
20.96 |
|
Profit Before Interest And Tax Margin(%) |
7.99 |
11.92 |
12.86 |
|
Cash Profit Margin(%) |
10.99 |
14.48 |
15.60 |
|
Adjusted Net Profit Margin(%) |
2.90 |
4.90 |
7.50 |
|
Return On Capital Employed(%) |
5.48 |
8.19 |
10.69 |
|
Return On Net Worth(%) |
7.39 |
10.90 |
16.98 |
LOCAL AGENCY
FURTHER INFORMATION
History:
Subject is a part
of Trident Group was promoted by Rajinder Gupta. The company is engaged in
manufacturing of Terry Towels, Cotton Yarn and Paper. The company is one of the
largest manufacturer of Terry Towels in India with an installed capacity of 100
million pieces per annum(including the capacity of the ongoing expansion
project which will be on stream by March 2004). The company exports Terry
Towels to USA. Wall Mart is one of the company's prestigious clients.
The company's Yarn plant which produces both cotton and acrylic yarn is located
at Sanghera, Punjab. This unit was financed by the public issue in Oct. 1992.
Its products are used in hosiery products, textiles, fabrics, etc. The company
has an agreement with Sagatex International, UK, for marketing and exporting
its cotton production upto 50%.
The company's Second Unit i.e. Unit II has an installed capacity of 43392
Spindles for manufacture of dyed cotton, melange, acrylic and blended yarn
besides carded and combed cotton yarn. The Unit II project which has been
divided into parts the first phase of 36288 Spindles has started commercial
production from 1st July, 1999. The cost of project amounts to Rs 950 Millions
which was financed by term loans, rights issue and internal accruals.
During 1999-2000, the company got the status of Government Recognised Trading
House and the quality of the products was well accepted in the international
market.
During 2002, Varinder Agro was merged with company. The shareholders of
Varinder Agro were allotted 70 equity shares in the company for every 24 shares
held.
Corporate
overview:
The Company operates in three main business segments viz.
Yarn, Terry Towel, Paper and Chemical and has captive power plant to cater to
needs of it's business segments, As on March 31,2008, the Company is having
following manufacturing capacities installed and operational.
Textile:
Yarn 1,25,952 spindles Yarn processing 6,825 tpa Open end yarn 1,920 Rotors
Terry towels 282 looms Paper and chemicals: Writing and printing paper 40,500
tpa Sulphuric acid 1,00,000 tpa Caustic soda 110 tpd Energy: Cogeneration of
power 50 MW Steam 338 tph
Results of operations:
Financial
review:
The net sales of the Company for the year increased to
Rs.10486.7 million as compared to Rs 8165.9 million in the previous financial
year, registering a growth of 28 percent. The operating profit for the year has
registered a marginal growth in absolute terms from Rs 1794,1 million in the
previous year to Rs 1818.1 million in the current year but the net profit
margin could not be sustained due to foreign exchange fluctuations and increase
in raw material costs.
Earning per share was Rs 2.06 and Cash earning per share was Rs 6.32 during the
current year. Total paid up capital of the Company remained unchanged at Rs
1941.9 million. During the year, the Company has issued warrants convertible
into equity shares within 18 months from the date of allotment. However, as on
the date, no warrant has been converted into equity shares of the Company. The
Company has also introduced Employee Stock Options Scheme during the year and
has implemented 'Abnishek Employee Stock Options flan, 2007 in accordance with
SEBI guidelines and approval of members. More details on convertible warrants
and stock options are provided elsewhere in this annual report Analysis of
other relevant figures of balance sheet and profit of loss account is given in
'management discussion and analysis report' forming part of annual report.
Performance review:
A detailed discussion on performance of operations of the
Company is given elsewhere in this annual report under 'management discussion
and analysis report'.
Exports:
Export sales accounted for 50% of net sales. During the year,
export sales increased by 19% from Rs 4352.2 million in the previous year to Rs
5192.8 million in the current year.
Expansions / modernisation:
The Company has recently completed its integrated state
of the art Paper modernisation cum expansion project successfully. Under this project,
the Company has added modern and hi-tech Paper and pulp machine. Post
completion of project, the paper manufacturing capacity of Company has
increased to 175000 tpa whereas pulping facility has increased to 125000 tpa. A
captive power plant of 20 MW has also been installed under this project.
Company's terry towel expansion plan consisting of addition of 60 new looms and
replacement of existing 24 looms and modernisation cum balancing of textile
facilities is at an advance stage of implementation. The Company has completed
work for balancing of textile facilities and has installed the looms as
envisaged under the project out of which 14 looms have already been made
operational during the financial year 2007-8. Remaining looms are in process of
stabilisation and the Company expects to start commercial operation on these
looms in the end of second quarter of financial year 2008-9. This project
involves a capital outlay of Rs 2130 million.
During the year, the Board of directors of the Company had approved revision in
scope of Yarn Expansion Programme of the Company. As per revised expansion
plan, the Company is setting up 1,00,800 spindles at Budni, Madhya Pradesh
which involves a total capital outlay of Rs 3737 million, This project shall be
implemented in a phased manner and is scheduled to be fully operational during
the second quarter of financial year 2009-10. This would be Company's first
manufacturing venture outside the State of Punjab.
Subsidiaries:
During the year, the Company has acquired 50,000 fully paid up
equity shares of Rs 10/- each of Abhishek Global Ventures Limited (AGVL),
consequent to which AGVL has become a wholly owned subsidiary of the Company.
Further, the Company had been allotted 10000000 fully paid-up equity shares of
Rs 10/-each of Lotus Integrated Texpark Limited (LITL), a Special Purpose
Vehicle incorporated for establishment of textile park under the Scheme of
Integrated Textile Park (SITP). Upon allotment of shares, the Company's holding
in LITL became 75.47% and the LITL had become a subsidiary of the Company.
However, LITL had made further allotment to other participant entrepreneurs of
textile park on March 31, 2008 consequent to which the shareholding of the
Company in LITL diluted to 47.50% and it ceased to be a subsidiary of the
Company from that date.
The Company continues to hold two foreign subsidiaries - Abhishek Industries
Inc, a wholly owned subsidiary in USA, and Abhishek Europe SA, a subsidiary in
Europe. The Ministry of Corporate Affairs, Government of India, vide its letter
no. 47/110/2008-CL-IH dated 03/03/2008 has granted exemption to the Company
from attaching balance sheet, profit and loss accounts, etc., of the aforesaid
subsidiary Companies to the accounts of the Company for the financial year
2007-8. The Annual accounts of the subsidiary companies along with the reports
of the Directors and Auditors thereon and all related detailed information are
open for inspection by any investor including investor of subsidiary companies
at the head office of the Company and of the subsidiary companies concerned.
The Company will make available these documents to investors including
investors of subsidiary companies upon receipt of request from them. The
investors, if they desire, may write to the Company to obtain a copy of the
financials of the subsidiary companies.
A statement giving information on the financials of subsidiaries for the year
ended March 31, 2008 and the consolidated financial statements prepared by the
Company in accordance with Accounting Standard are given in the Annual Report
for the reference of the members.
MANAGEMENT'S
DISCUSSION AND ANALYSIS:
The members of the company management team monitor real time
performance enabling the Company to identify business opportunities and
potential risks in their occurrence cycle and defining strategy proactively.
Through this report, the management shall look at the future; explore the
different frontiers, identify the trends and present arguments on how they
should gear up for the threats and advantages. This comprehensive report
analyses the impact of the business environment on the Company's performance
and should be read in conjunction with the audited financial statements and
notes for the year ended March 31, 2008 and the audited financial statements
and notes for the year ended March 31, 2007.
This discussion contains certain forward-looking statements based on current
expectations, which entail various risk and uncertainties that could cause the actual
results to differ materially from those reflected in them. These risk and
uncertainties are substantially unchanged from those presented in the Annual
Report for the year ended March 31,2007.
Business organisation:
The Company primarily operates in textiles, papers and
chemicals segment The Company over a period of time, has added 50 MW capacities
for power generation. The Energy segment of the Company is presently catering
the power need of all three businesses of the Company.
The Company has manufacturing set up based in Barnala, Punjab and the Corporate
office is located at Ludhiana, Punjab. As a geographical de-risking strategy,
the Company is setting up a new yarn project at Budni, Madhya Pradesh. This is
the first manufacturing venture of the Company outside the state of Punjab.
The Company is looked as a recognised player in sectors it operates in and is
respected for its professional ethics, state of art technology, innovative
concepts, quality management and achievements.
Textile
industry overview:
Textiles sector has been identified as one of the priority
sectors having high growth potential and higher multiplier effects for
employment generation. Textile and clothing industry plays a dominant role in
the country's economy. As of March 2008, it has a total market size of USD 52
billion and accounts for 26 percent of the manufacturing sector, 20 percent of
industrial production and 18 percent of industrial employment. It contributes
16 percent to gross export earnings and 4 percent to national GDP. The industry
provides direct employment to about 35 million people.
Besides, another 50 million people are engaged in allied
activities. India has overtaken the US to become the world's 2nd largest cotton
producing country, after China, as per a study by International Service for the
Acquisition of Agri-biotech Application. BT cotton was a major factor
contributing to higher rate of production, from 15.8 million bales in 2001-2 to
31 million bales in 2007-8.
India accounts for:
·
61 per cent of
the global loomage.
·
22 per cent of
the global spindleage.
·
12 per cent of
the world's production of textile fibres and yarn.
·
25 per cent
share in the total world trade of cotton yarn.
However, year 2007-8 was a tough year for textile spinning. The dollar has been
unfavorable and the appreciation of the rupee has put pressure on prices.
Prices of cotton have been on a rising curve ever since. 3.7 million spindles
have been added in India in the last 2 years. Punjab based cotton has seen a
rise from Rs 48.5 per kg to Rs 57.5 per kg. The cotton production world wide
has depleted by 1.25 mtpa in 2007-8 and also area under cotton cultivation,
especially in the US is reducing considerably.
Cotton markets have seen a volatility trend and realisations
have also come down.
The outlook for textile industry in India is very optimistic. It is expected
that Indian textile industry would continue to grow at an impressive rate. It
is being modernised by an exclusive scheme, which has set aside USD 5 billion
for investment towards improvement of machinery.
The projected value of the Indian textile industry is
estimated to grow from USD 47 billion in 2005-06 to USD 115 billion by the year
2012, comprising domestic market of USD 60 billion and exports of USD 55 billion.
Thus, the projected growth rate is 16 percent per annum
during these years.
High growth trajectory for textiles and
apparel industry:
The Indian domestic and export markets for textile and apparel
are expected to grow at 6.5 percent and 12 percent CAGR respectively. Driven by
favourable demographic factors, rise in disposable incomes and a shift towards
branded apparel, the domestic textile and apparel market is slated to grow at
6.5 percent CAGR. A 12 percent CAGR is expected in exports, with international
retailers looking at India as the best alternative to China for sourcing of
apparel. The expected sourcing market size in 2008 is USD 22-25 billion and is
projected to grow to USD 35-37 billion in 2011. This is largely attributed to
the end of the Multi-Fibre Agreement, which has triggered growth in the quantum
of sourcing of the top global retailers from India. India has several
advantages in terms of abundant supply of cotton and human-made fibre, mature
and well-established production base, cheap and skilled labour and good design
capabilities. Besides this, government incentives to exporters and entry of
foreign retailers into the Indian market would also act as a fillip to retail
sourcing from India.
Abhishek's
yarn division move:
The Company is one of the
largest spinning unit in India with a total capacity of 125952 spindles at one
single location.
During the year, value added products like Eli-Twist yarn, core spun yarn,
modal yarns, melange yarns, soft touch yarns have been added to the existing
product basket.
The Company is focused to manufacture higher percentage of value added products
and is continuously widening its product mix. The emphasis is being laid on
lean manufacturing and total quality management. The Company has built globally
competitive capacities and is further expanding the same - a unit comprising of
1,00,800 spindles is being set up in Budni, Madhya Pradesh. The Company has
adapted latest state of the art technology and is continuously enhancing its
customer relationship. Yarn associates' meet had been organized during the year
where business plan and plan for introducing 32 new value added product was
shared to set targets for individual markets.
Strengths and opportunities:
Technology:
With the technological advantage and knowledge expertise, the yarn
division is open to flexibility, change and innovation.
Projected growth of textile industry: The projected value of the Indian textile
industry is estimated to grow from USD 47 billion in the year 2005-6, to USD
115 billion by the year 2012. This gives a great futuristic hope for companies
like them who have implemented process and technology of global standards and
are ready to meet future demands.
Access to raw materials: Cotton is sourced locally, helping in lean
manufacturing. In a nutshell, the Company has really established synergies
between raw material sourcing, manufacturing facilities and markets.
Challenges and threats:
Increased
competition: The increase in capacity in the yarn
spinning industry in recent time and globalisation momentum have led to
manifold increase in competition internationally as well as domestic.
Cotton sourcing: Cotton sourcing is
creating challenges day after day as the demand is increasing drastically and
sourcing opportunities are getting limited. Seeing the inflationary trends in
the market related to cotton and other such commodities, the raw material cost
is posing a possible threat for manufacturers.
Capital expenditure:
The Company is setting up 100800 spindles at Budni, Madhya
Pradesh which involves a total capital outlay of Rs 3737 million. This project
shall be implemented in a phased manner and is scheduled to be fully
operational during the second quarter of financial year 2009-10.
Abhishek's terry towel division
move:
The Company is one of the World's largest Terry towel
manufacturers. As a value added segment having a continuous growth momentum,
the terry towel business is the most important source of export earnings and
international recognition for the Company.
Abhishek's towel division has been able to stay green inspite of the rupee
appreciation and has also meticulously worked on strategy, improved product mix
and optimised the utilisation of assets. It has been successful in the
optimisation of raw material cost and major input cost.
During the year, the Company has added new products like cotton bamboo towel
and texture towels in its product basket. 14 new looms have been installed and
made operational during the year 2007-8 making total capacity of division to
282 looms. The Company is further expanding/modernising its manufacturing
capacities with an objective to attain increase in volume with lower overhead,
better quality and replacement of old technology with world class
technology.
The Company has in this year embarked on another ambitious journey in search of
better value creation for the business and to ensure sustainability of the
enterprise. The Terry towel division is implementing 'Viable Vision' in its
business, based on the Theory of Constraint methodology. The viable vision will
enable the Company to unlock substantial value and go a long way in helping it
strengthens its image as a reliable supplier of quality home textile
products.
Strengths
and opportunities:
Technology:
The Company has installed modern and hi tech paper and pulp
machine.
Environmental
friendly:
The Company has already been complying with the CREP
environmental norms and saves 5,000 trees per day as compared to 100% wood pulp
based units.
Also the Company has adopted ECF technology.
Proximity to raw material:
Agro residues are sourced locally leading to saving in
logistics cost.
Capacity enhancement:
The Company has expanded its manufacturing capacity which
would enable it to widen its product basket.
Better realisation:
Excise duty on paper has been cut from 12 percent to 8
percent, giving manufacturing companies a better realisation benefit.
Challenges and threats:
Competition:
The recent past has seen capacity expansion by a number of players
in the segment, a sign of tough competition ahead.
Crop pattern:
Movement for changes in crop
pattern and environment factor may lead to raw material scarcity
Capital expenditure:
The Company has recently completed its integrated state of
the art Paper modernisation cum expansion project successfully. Under this
project, the Company has added modern and hi-tech Paper and pulp machine. Post
completion of project, the paper manufacturing capacity of Company has
increased to 1,75,000 tpa whereas pulping facility has increased to 1,25,000
tpa. A captive power plant of 20 MW has also been installed under this project.
This project involves capital outlay of Rs 8250 million.
Chemical industry overview:
The chemical industry is a USD 2.4 trillion global
enterprise with the EU and US chemical companies being the world's top
producers. The US chemical industry is the worlds largest, accounting for over
26 percent of the global chemical production with an output of USD 450 billion
a year.
The chemical industry is an important constituent of the Indian economy too.
Its size is estimated at around USD 35 billion. The Indian chemical sector
involves total investment of approximately USD 60 billion and generates
employment for about 1 million people. This sector accounts for 13-14 percent
of the total exports and 8-9 percent of the total imports of India. A
substantial proportion of these exports go to the US, Europe and other
developed nations. In terms of volume, it is the 12th largest in the world and
third largest in Asia. Currently, the per capita consumption of chemical
products in India is about one tenth of the world's average.
Abhishek's
chemical division move:
Subject has a current capacity of 1,00,000 tonnes per annum
of sulphuric acid and with the changing industrial needs, the Company has
ventured into specialised product markets also. Battery Grade sulphuric acid is
the premium quality product to cater to these markets. Commercial Grade is also
manufactured keeping in view the larger market share.
Leading battery manufacturers and other high-end consumers comprise the
clientele for these products.
The chemical manufactured by Subject has the following applications:
·
Catalyst and
dehydrating agent in many organic chemical manufacturing and petrochemical
processes.
·
Manufacturing
of detergents.
·
Manufacturing
of titanium dioxide (a widely used white pigment), and other dyes and pigments.
·
Manufacturing
of fertilizers mainly phosphates and also zinc, ammonium and potassium
sulphate.
·
Manufacturing
process for a range of plastics.
The Company is the leading
producer of sulphuric acid in North India. It has captured around 66 percent of
the market share. 75 percent of the product is sold locally in Punjab and the
remaining 25 percent in Haryana and Delhi.
Power sector overview:
India is a developing and fast-growing economy and faces a
great challenge to meet its energy needs in a responsible and sustainable
manner. India's task is to provide energy to over 0.6 million human
settlements, spread over 0.3 million square km of territory, with a population
of over 1 billion which is still growing, but expected to stabilise at around
1.6 billion during the next 40 years. India intends to provide a reliable
energy supply through a diverse and sustainable fuel mix that addresses major
national players. These include security concerns, commercial exploitation of
renewable power potential, eradication of energy poverty, ensuring availability
and affordability of energy supply and preparing the nation for imminent energy
transition.
The 11th plan of Government has set a target for an additional 107,00 MW power
generation capacity, consisting of 500 MW of biomass projects and 1,200 MW of
bagasse cogeneration projects by 2012. Based on Government's plans, by 2012, a
capacity addition of 22,900 MW has been identified for the private sector out
of total target of around 107,000 MW. The opportunities in generation are now
very encouraging on account of emerging power trading environment, the policy
of open access on transmission and distribution networks and reforms in the
power sector, which is leading to improvement in the financial health of the sector.
All new private sector generation projects in the country would need to be set
up based on International Competitive Bidding.
The power industry is expected to grow at 27 percent in terms of sales JFM 08.
The operating profit of the industry is expected to grow at 28 percent and net
profit at 12 percent compared with same period of the previous year.
India is the third largest producer of coal after US and China. The Power
sector accounts for 84 percent of India's Coal consumption. India imports coal
mainly from Indonesia, South Africa, Australia and China.
Region wise installed generation capacity (MW) of power utilities in India
(including allocated shares in joint central sector utilities):
Abhishek's
energy division move:
At the company, keeping in view the increasing requirements
of the continuously expanding operations, captive power is generated to meet
the demands of the industry. The power generated internally aids in
uninterrupted supply of power for the production processes, ensuring enhanced
efficiency, round-the-clock production, and cost saving.
The main outputs are steam and power that meet the requirements for operations
of production plants.
The major highlight of the year has been operationalisation of a 20 MW captive
power plant. At present the Company is generating 50 MW of power and 338 tph of
steam which shall be used by textile and paper divisions of the Company
Internal
control system and their adequacy:
At the company, the internal control system encompasses the
policies, processes, tasks, behaviours and other aspects of the Company that
taken together facilitates effective and efficient operation, quality of
internal and external reporting, compliance with applicable laws and
regulations.
The Company's objectives, its internal organisation and the environment in
which it operates are continually evolving and, as a result, the risks it faces
are continually changing. In order to make its internal control effective and
sound, the Company thoroughly and regularly evaluate the nature and extent of
the risks to which the Company is exposed.
The operation and monitoring of the system of internal control has been taken
by individuals who collectively possesses the necessary skills, technical
knowledge, objectivity and understanding of the Company and the industries and
markets in which it operates. The Company also outsources management auditors
to periodically check the adequacy of its systems and processes so as to make
it more responsive in this volatile environment.
The qualified, experienced and independent Audit Committee of the Board of
Directors regularly reviews plans, significant audit findings, internal control
adequacy, compliance with accounting standards and other legal requirements relating
to financial statements.
Outlook:
The Company is pretty optimistic in its outlook. It has
established state of the art manufacturing processes, systems coupled with
appropriate human capital with right credentials and is continuously making
investment for expanding/ modernising its capacities, which makes its outlook
pretty optimistic.
Contingent Liability not provided for:-
|
Particulars |
31.03.2008 (Rs. In
millions) |
|
Claims (excluding claims by employees where amounts
are not ascertainable) not acknowledged as debt: |
|
|
Sales tax |
0.300 |
|
Service Tax |
--- |
|
Excise duty |
5.000 |
|
Income Tax |
5.300 |
|
Others |
2.400 |
FIXED ASSETS:-
·
Land
·
Buildings
·
Plant and
Machinery
·
Furniture and
Fixtures
·
Vehicles
·
Computers
Form 8:
Bankers Charges Report as per Registry
|
This form is for |
Creation of
charge |
|
Corporate
identity number of the company |
L99999PB1990PLC010307 |
|
Name of the
company |
|
|
Address of the registered
office or of the principal place of
business in India of the company |
Trident Complex,
Raikot Road, Barnala – 148101, Sangrur, Punjab, India |
|
Type of charge |
Book Debts,
Others as per Annexure A |
|
Particular of
charge holder |
State Bank of
India, Specialised Commercial Branch, Civil Lines, Ludhiana – 141 001,
Punjab, India |
|
Nature of
description of the instrument creating or modifying the charge |
|
|
Date of
instrument Creating the charge |
12.12.2006 |
|
Amount secured by
the charge |
Rs. 2250.000
Millions |
|
Brief particulars
of the principal terms an conditions and extent and operation of the charge |
Rate of Interest 1.75% below SBAR present.
Effective rate minium 9.25% p.a. with monthly rests Letter of Credit
and Bank Guarantee commission as per extent instructions of the member banks
FEDAI rules Terms of repayment As and when
demanded. Margin Raw Material –
25% Book Debts – 40% Extent operation of the charge 100% |
|
Short particulars
of the property charged |
|
WEBSITE DETAILS:-
Media Release:-
Abhishek Industries
has been awarded the Silver Trophy for the year 2007 - 08
Abhishek Industries has
been awarded the Silver Trophy for the year 2007 - 08 by the Cotton Textiles
Export Promotion Council (TEXPROCIL).
Trident Group
launches second Trident Homescapes retail store in Ludhiana
Ludhiana, May 04,
2008 - Having enthralled the international market with quality and elegance of
its products, the city-based Trident Group launched its retail store under the
brand name Trident Homescapes
at WestEnd Mall in the city on Sunday,
May 04, 2008.
Abhishek Industries
Limited has been awarded the coveted SAP ACE (Award for Customer Excellence) -
2007
Abhishek Industries
Limited has been bestowed the coveted SAP ACE (Award for Customer Excellence) -
2007 award for Best Textiles and Apparel Sector Implementation in the category
of Midsize Enterprises.
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.48.79 |
|
UK Pound |
1 |
Rs.75.41 |
|
Euro |
1 |
Rs.61.48 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
4 |
|
--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 |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
36 |
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 |
|