MIRA
INFORM REPORT
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Report Date : |
19.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
KARAN WOO SIN LIMITED |
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Registered Office : |
Survey No. 321, Kallakal Village, Gajwel, Medak District 500001,
Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
18.06.1992 |
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Com. Reg. No.: |
01-14389 |
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CIN No.: [Company
Identification No.] |
L18100AP1992PLC014389 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDK00455A |
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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 : |
Manufacturer of Socks |
RATING &
COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Maximum Credit Limit : |
USD 260000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. Financial position is moderate. Payments are reported as slow and delayed. Trade relations are fair. The company can be considered for moderate business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office/Works : |
Survey No. 321, Kallakal Village, Gajwel, Medak District 500001,
Andhra Pradesh, India |
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Mobile No.: |
91-9966239524 |
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E-Mail : |
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Website : |
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Head Quarters : |
Suite H, 5th Floor,
Surya Towers, SP Road, Secunderbad – 500003, Andhra Pradesh, India |
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Tel No. ; |
91-40-27848700/27818165 |
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Fax No. : |
91-40-27842566 |
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E-mail: |
DIRECTORS
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Name : |
Mr. Anil Agarwal |
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Designation : |
Director |
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Qualification: |
Chartered Accountant |
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Name : |
Mr. Percy H. Italia |
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Designation : |
Director |
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Qualification: |
Chartered Accountant |
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Name : |
Mr. A.G. Ravindranath Reddy |
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Designation : |
Director |
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Name : |
Mr. Sri Kishan Badruka |
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Designation : |
Director |
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Experience : |
25 Years |
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Name : |
Mr. Rakesh Garg |
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Designation : |
Director |
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Qualification: |
Chartered Accountant |
KEY EXECUTIVES
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Name : |
Mr. N. C. Reddy |
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Designation : |
Factory Manager |
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Name : |
Mr. Rajendra Pagdi |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Rishabh Agarwal |
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Designation : |
Operations Incharge |
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Name : |
Mr. A. Rajendran |
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Designation : |
Technical Manager |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders [As on 31.03.2008] |
No. of Shares |
Percentage of
Holding |
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Promoters |
3373849 |
40.97 |
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Persons acting in Concert |
250247 |
3.04 |
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Banks, Financial Institutions, Insurance Companies, Mutual Funds (Central/State Gov. Institutions/ Non-Government Institutions) |
12500 |
0.15 |
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Private Corporate Bodies |
1288410 |
15.65 |
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Indian Public |
3247909 |
39.44 |
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NRIs/OCBs |
62085 |
0.75 |
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Total |
8235000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Socks |
PRODUCTION STATUS [As on 31.03.2008]
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Particulars |
Unit |
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Installed
Capacity |
Actual
Production |
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Socks |
Deca pair |
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442000 |
107847 |
GENERAL
INFORMATION
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Bankers : |
State Bank Of India Commercial Branch, Secunderabad - 500 003. |
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Facilities : |
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Banking
Relations : |
Unknown |
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Auditors : |
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Name : |
Niranjan and Narayan Chartered Accountants |
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Address : |
Himayatnagar, Hyderabad - 500 029. |
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Associates/Subsidiaries : |
·
Zarish Properties Private Limited ·
Continental Monetary Fund Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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11000000 |
Equity Shares |
Rs. 10/- each |
Rs. 110.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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8235000 |
Equity Shares |
Rs. 10/-
each |
Rs. 82.350
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
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31.03.2008 |
31.03.2007 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
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82.350 |
82.350 |
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2] Share Application Money |
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0.000 |
2.264 |
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3] Reserves & Surplus |
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2.248 |
0.000 |
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4] (Accumulated Losses) |
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[32.476] |
[32.670] |
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NETWORTH |
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52.122 |
51.944 |
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LOAN FUNDS |
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1] Secured Loans |
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17.856 |
16.020 |
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2] Unsecured Loans |
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3.239 |
3.522 |
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TOTAL BORROWING |
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21.095 |
19.542 |
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DEFERRED TAX LIABILITIES |
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0.000 |
0.000 |
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TOTAL |
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73.217 |
71.486 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
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33.685 |
36.408 |
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Capital work-in-progress |
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3.852 |
3.181 |
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INVESTMENT |
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0.100 |
0.000 |
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DEFERREX TAX ASSETS |
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0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
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20.725 |
20.620 |
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Sundry Debtors |
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18.033 |
15.129 |
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Cash & Bank Balances |
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7.013 |
2.904 |
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Other Current Assets |
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0.000 |
0.000 |
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Loans & Advances |
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4.643 |
4.580 |
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Total
Current Assets |
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50.414 |
43.233 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
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14.834 |
11.336 |
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Provisions |
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0.000 |
0.000 |
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Total
Current Liabilities |
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14.834 |
11.336 |
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Net Current Assets |
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35.580 |
31.897 |
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MISCELLANEOUS EXPENSES |
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0.000 |
0.000 |
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TOTAL |
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73.217 |
71.486 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
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31.03.2008 |
31.03.2007 |
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Sales Turnover |
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40.544 |
39.650 |
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Other Income |
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0.307 |
0.303 |
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Total Income |
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40.851 |
39.953 |
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Profit/(Loss) Before Tax |
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0.613 |
0.349 |
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Provision for Taxation |
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0.419 |
0.161 |
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Profit/(Loss) After Tax |
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0.194 |
0.188 |
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Earnings in Foreign Currency : |
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40.253 |
39.651 |
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Total Imports |
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0.484 |
0.441 |
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Expenditures : |
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Manufacturing Expenses |
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0.865 |
1.193 |
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Raw Material Consumed |
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16.590 |
16.629 |
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Purchases made for re-sale |
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0.025 |
0.000 |
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Power and Fuel |
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2.535 |
2.914 |
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Payments to Employees |
|
6.685 |
4.998 |
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Selling Expenses |
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7.134 |
6.668 |
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Excise Duty |
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0.140 |
0.004 |
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Interest on term loans |
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1.346 |
1.374 |
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Depreciation |
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3.145 |
3.113 |
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Repairs and Maintenance |
|
0.670 |
1.088 |
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Increase/Decrease in stocks |
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1.103 |
1.623 |
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Total Expenditure |
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40.238 |
39.604 |
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KEY RATIOS
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PARTICULARS |
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31.03.2008 |
31.03.2007 |
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PAT / Total Income |
(%) |
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0.47 |
0.47 |
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Net Profit Margin (PBT/Sales) |
(%) |
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1.52 |
0.88 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
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0.73 |
0.44 |
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Return on Investment (ROI) (PBT/Networth) |
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0.01 |
0.006 |
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Debt Equity Ratio (Total Liability/Networth) |
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0.69 |
0.59 |
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Current Ratio (Current Asset/Current Liability) |
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3.39 |
3.82 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets
·
Land Freehold
·
Buildings
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Plant and Machinery
·
Office Equipments
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Furniture and Fixtures
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Vehicles
·
Electrical Installation
REVIEW OF
OPERATIONS
The Company has moved
further in its efforts to offer its products directly to large retailers in
Europe. The company continues to maintain high quality standards.
MANAGEMENT DISCUSSION
AND ANALYSIS
Industry structure
and Developments
The industry is
witnessing large scale dismantling of capacities in the high cost economies.
The shortfall is being partly met by producers in China, the Indian
sub-continent and Eastern Europe. However, the yawning gap will become more
evident in a couple of years.
Opportunities and
threats
The current
scenario makes a compelling reason for existing players to ramp up capacities
at a feverish pitch. However, capital funding to SMEs is not looked upon with
much interest by Commercial banks and SMEs in the textile sector have not
succeeded in attracting long term capital under the Textile Up gradation Fund
either. However, the company is drawing up alternative capital funding program.
Segment wise
Product wise performance
Having successfully
established itself as a dependable supplier of high end articles, the company
needs to ramp up capacity quickly to benefit from the current scenario of
supply shortfall in this segment. The company is making all efforts to increase
capacity by 100% and is working on a comprehensive plan to increase its
footprint in Europe.
Outlook
The current
outlook is bright. The Company's products have found acceptance with a larger
number of importers spread all over Europe. The focus continues to be to increase
production and to enlarge the market for high value products.
AS PER WEBSITE DETAILS
PROFILE
The Company was incorporated in July, 1992 as a public limited company.
The company’s shares are listed on the Bombay Stock Exchange.
The company produces a broad variety of socks on its 200 needles, 168 needles
and 144 needles knitting machines for men, women and children to meet different
market requirements.
Superfine, long staple and virgin cotton yarn is used by the company to produce
high quality dress socks for men, which are much sought after in Europe due to
their high quality, perfect finishing and competitive prices.
KARAN WOO-SIN’s success in producing high quality socks at competitive prices
has become possible due to a combination of factors.
India is a natural producer of high quality cotton. Cotton yarn in abundant
quantities and at competitive prices is thus available to the company. India’s
large labour force has been maximized by the company in this labour-intensive
industry.
Subject is equipped with the best equipment that one can see anywhere in the
world. All this coupled with the company’s relentless pursuit for
perfection in its products and the keen desire to render the highest quality
service to its customers has made Karan.
Karan Woo-Sin has been producing high quality dress socks for men since the
last seven years. The company’s products have been very well accepted in
the quality conscious markets. Karan Woo-Sin produces socks for the major
brands in Europe. The customers in Europe look at KARAN as a reliable
source of supply and for development of new articles.
PRODUCTS
The Company specializes in the production of high quality formal socks for men
primarily made with cotton in the true Italian style.
The company also produces medical socks, no leg socks, socks for women and
casual wear socks for men. The consumer in Europe is aware of the traditional
Italian quality but now does not find these at the market at affordable
prices. The Indian consumer has not experienced traditional Italian
quality. The company aims at fulfilling both, the needs of the European, and
the Indian consumer.
A major quantity of the socks produced worldwide and especially in China,
Turkey, East Europe and most of India are made on single cylinder knitting
machines using soft cotton yarn. Most of the socks are piece dyed and
machine linked. These socks do not fit the feet well, look coarse, and hold the
leg very tight.
KARAN’s Socks are produced using high count mercerized and dyed cotton yarn on
double cylinder sock knitting machines. All the socks produced by the
company are hand linked which ensures smooth lines and comfort. This is
the true traditional Italian style. These socks afford the wearer the elegance
and ease.
Production of these kinds of socks requires know-how and skilled workmen at
every stage of production, the use of state-of-the-art knitting machines and
the use of high quality processed cotton yarn which has undergone quality
mercerizing, gassing and dyeing
BOARD OF DIRECTORS
Mr. Anil Agarwal: Chartered Accountant by profession, he is the CEO of
the company. Apart from his experience with sock production in India and Italy,
he is proficient in company law, managements, marketing and PR.
Mr. Percy H. Italia: Chartered Accountant by profession, he is a senior
practicing member of the Institute of Chartered Accountant of India, member of
the international audit committee of Nexia International, headquartered in
England. He is an expert in international finance, financial audit, and
accounting systems.
Mr. A. G. Ravindranath Reddy: He has had substantial experience as
practicing company secretary, has intimate knowledge of Indian industry, and is
familiar with commercial laws and their implementation.
Mr. Sri Kishan Badruka: Hailing from a prominent and well-respected
family in Hyderabad, he has had over 25 years of experience in business and
industry. He is also familiar with the management of institutes of higher
learning and management in Hyderabad. He also has good contacts in trade and
industry in India.
Mr. Rakesh Garg: A Chartered Accountant and Company Secretary by
training, he is familiar with fund raising in India and abroad as well as
management of infrastructure companies.
Mr. Anil Agarwal is a qualified Chartered Accountant. Mr. Agarwal hails from a
family of businessmen engaged in the textile industry. In fact, his family
started the first textile weaving factory in the erstwhile state of the Nizam.
He was the financial consultant to the company when it was incorporated by the
original promoter-Mr. Anil Gupta. He and his associates brought the controlling
interest in the company from Mr. Gupta when the collaboration with Woo-Sin
Trading Company broke down in the early nineties.
Under Mr. Agarwal’s leadership, the company has succeeded to produce a perfect
product, built a strong technical team and is now poised to take a long leap
into retail marketing, which alone can produce noteworthy financial results.
Mr. Rajendra Pagdi has over 25 years of experience in the corporate
world. He has worked with Country Club, Hyderabad and was part of the
core team which promoted the concept of private clubs run on commercial
lines. He was also associated with ICFAI as a consultant. He is excited
with the possibility of setting up a warehouse and distribution network for
their products in Europe. This has so far not been attempted by any
Indian organization big or small. He sees huge possibilities to financially
exploit such a system once put in place and working efficiently. Mr.Pagdi is
responsible for all commercial and legal compliances apart from liaising with
banks and government departments. He has also the task of laying down
accounting and reporting systems, tax planning and the proposed foreign
investments.
Mr. Rishabh Agarwal is a young man of 28 years and a graduate in
Economics from the Brigham Young University, U.S.A. He has been working
with the company since the last five years and is responsible for all
operations which include production, planning, quality control, raw material
planning, employee training, logistics and customer relations.
He has understood the manufacturing process completely and had the opportunity
to visit and study several leading socks and garments producers in
Europe. He exudes confidence in his workmen and his products. He is
sure that the high quality of the company products will be maintained even when
capacity utilization is ramped up.
Mr. N. C. Reddy hails from the village in which the company’s unit is
located. He has good personal relationship with all the government
officials and elected representatives. He is a respected resident of the
town. Mr. Reddy has been working for the company since its inception in
1992 and has been an important member of the core team always. All local
issues concerning labour, construction, maintenance, welfare of employees and
emergencies are taken care of by Mr. Reddy.
Mr. Rajendran is a trained mechanical engineer. He has worked with the
company since his graduation in 1997. He was trained to be a technician by Mr.
Kim and Mr. Tonon. He is one of the finest technicians that can be found
anywhere. He understands socks knitting very well and can duplicate any
sock produced in the world. He is responsible for production, training and for
developing new styles. He is proud of the products that the company produces
and would like their product to be more widely distributed all over the globe.
OWNERSHIP
The Company is owned and controlled by Mr. Anil Agarwal and Mr.
Percy H Italia
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. 49.68 |
|
UK Pound |
1 |
Rs. 74.64 |
|
Euro |
1 |
Rs. 62.58 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
3 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
3 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
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|
--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 |
|
29 |
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 |
|