MIRA
INFORM REPORT
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Report Date : |
18.10.2008 |
IDENTIFICATION
DETAILS
|
Name : |
CHARMINAR NONWOVENS LIMITED |
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Registered Office : |
G-1, Anushka Towers, A.C.Guards, Hyderabad – 500004, Andhra Pradesh. |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
11.02.1987 |
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Com. Reg. No.: |
01-7159 |
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CIN No.: [Company Identification No.] |
U17100AP1987PLC007159 |
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TAN No.: [Tax Deduction & Collection Account No.] |
HYDC00017D |
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Legal Form : |
Closely held public limited liability company. |
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Line of Business : |
Manufacturer of Nonwoven Fabrics |
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/normal. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Slow |
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Litigation : |
Clear |
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Comments : |
Subject is an old and established company having moderate track.
Company’s profitability is under severe pressure. It has some accumulated losses.
Payments are reported as slow but correct. The company can be considered
normal for small business dealings at usual trade terms and conditions, with
slightly caution initially. |
INFORMATION PARTED
BY
|
Name : |
Mr. Venkat Rao |
LOCATIONS
|
Registered Office : |
G-1, Anushka Towers, A.C.Guards, Hyderabad – 500004, Andhra Pradesh,
India. |
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Corporate Office : |
6-2-9, Flat No. G-4, Anushka Towers, Lakdi-Ka-Pool, Hyderabad – 500
004, Andhra Pradesh, India |
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Tel. No.: |
91-40-23390345/ 17855/ 94102 |
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Fax No.: |
91-40-23325988/ 23317855 |
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E-Mail : |
charm@charminarnonwovens.com ,
charminarnw@eth.net , charm@chqminarnonwovens.com |
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Website : |
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Location: |
Rented |
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Head Office : |
10-1-1200, UNI Building,
A. C. Guards, Masabtank, Hyderabad – 500 004, Andhra Pradesh, India |
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Tel. No.: |
91-40-23390345/23317855 |
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Fax No.: |
91-40-23325988 |
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E-Mail : |
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Factory 1 : |
Bonthapalli,
Jinnaram Mandal, Medak District – 502 313, Andhra Pradesh |
DIRECTORS
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Name : |
Dr. S. Krishna Murthy |
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Designation : |
Chairman |
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Address : |
B-27, Gulmohar Park, New Delhi – 110 049, India |
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Date of Birth : |
30.12.1926 |
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Date of Appointment : |
31.07.1992 |
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Name : |
Mr. P V Rao |
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Designation : |
Managing Director |
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Address : |
8-2-674/6/2/A/2, Road No. 13, Banjara Hills, Hyderabad – 500 004,
Andhra Pradesh, India |
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Date of Birth : |
14.06.1955 |
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Date of Appointment : |
15.06.1988 |
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Name : |
Mr. P Nagabhusanam Naidu |
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Designation : |
Director |
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Address : |
Kaikaram Ungutur Mandal, Kainaran, West Godavari District, Andhra
Pradesh, India |
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Date of Birth : |
07.07.1949 |
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Date of Appointment : |
31.07.1992 |
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Name : |
Mr. C H Ram Mohan Rao |
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Designation : |
Director |
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Address : |
101, Ravi Plaza, R R Peta, Seetha Rana Raju Centre, Lalru, West
Godavari, Andhra Pradesh – 500 002, India |
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Date of Birth : |
26.06.1956 |
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Date of Appointment : |
08.04.2005 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Equity Share
Break-up [As on 31.03.2007] |
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Percentage of
Holding |
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Public Financial companies |
|
22.00 |
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Foreign Holdings |
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20.00 |
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Directors or relatives of the Directors |
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52.00 |
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Other top fifty shareholders |
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6.00 |
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Total |
|
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturer of Nonwoven Fabrics |
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Products with ITC Code : |
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GENERAL
INFORMATION
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Customers : |
v
End Users v
Back
Converters |
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No. of Employees : |
Around 12 |
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Bankers : |
v
Industrial Credit
and Investment Corporation of India Limited (ICICI) 163, Backbay
Reclamation, Mumbai – 400 020, Maharashtra, India v State Bank of
India C and I Division, Main Branch, Hyderabad 500001 v
Central Bank of India |
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Facilities : |
Secured Loans and
Terms Loans (Rs. in
millions)
1] Contingent Liabilities not provided for Rs. Nil (previous year Rs.
Nil). 2] Term Loan form IFCI / ICICI are secured by deposit of Title Deeds
with IFCI and Joint Equitable Mortgage to the said Financial Institutions on
immovable properties both present and future and hypothecation of all movable
assets, subject to prior charge to the company’s bankers for working
capital. 3] The Term Loan from the aforesaid Financial Institutions will rank
pari passu among themselves for which an Agreement is yet to be executed. 4] The Term Loan are guaranteed by Three Promoters (of whom one is a
Managing Director) in their personal capacity. Working Capital limi of Rs. 6.500 millions (previous year Rs. 6.500
millions) from State Bank of India are secured by hypothecation of Raw
Material, Consumable Stores, Work-in-process, Finished Goods, Book debts,
etc. The above limits are also secured by second Charge on the fixed assets
and guaranteed by two directors in their personal capacities,\. In additions
to the above, the said limits are collaterally secured by equitable mortgage
of land property of the managing director. |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
A Ramachandra and Company Chartered Accountants |
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Address : |
3-6-369/A/11, 1str Floor, Street No. 1, Himayat Nagar, Hyderabad – 500
029, Andhra Pradesh, India |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2000000 |
Equity Shares |
Rs. 10/- each |
Rs. 20.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1473000 |
Equity Shares |
Rs. 10/-
each |
Rs. 14.730 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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|
SHAREHOLDERS FUNDS |
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|
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1] Share Capital |
14.730 |
14.730 |
14.730 |
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2] Share Application Money |
13.955 |
13.955 |
13.955 |
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3] Reserves & Surplus |
1.807 |
0.000 |
0.000 |
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4] (Accumulated Losses) |
[98.812] |
(88.354) |
(85.850) |
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NETWORTH |
[68.320] |
(59.669) |
(57.165) |
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LOAN FUNDS |
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1] Secured Loans |
70.358 |
75.575 |
76.706 |
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2] Unsecured Loans |
8.732 |
1.010 |
0.000 |
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TOTAL BORROWING |
79.090 |
76.585 |
76.706 |
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DEFERRED TAX LIABILITIES |
0.148 |
0.287 |
0.000 |
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TOTAL |
10.918 |
17.203 |
19.541 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
14.280 |
16.215 |
18.098 |
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.545
|
7.703
|
8.468 |
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Sundry Debtors |
1.263
|
4.650
|
3.160 |
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Cash & Bank Balances |
0.006
|
0.034
|
0.029 |
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Loans & Advances |
1.070
|
1.190
|
2.540 |
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Total
Current Assets |
2.884
|
13.577 |
14.197 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
6.246
|
12.589
|
12.754 |
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Provisions |
0.000
|
0.000
|
0.000 |
|
Total
Current Liabilities |
6.246
|
12.589 |
12.754 |
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Net Current Assets |
[3.362]
|
0.988
|
1.443 |
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TOTAL |
10.918 |
17.203 |
19.541 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
4.899 |
11.791 |
10.371 |
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Other Income |
0.031 |
0.826 |
0.055 |
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Total Income |
4.930 |
12.617 |
10.426 |
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Profit/(Loss) Before Tax |
[10.496] |
[2.451] |
(5.795) |
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Provision for Taxation |
0.016 |
0.053 |
0.000 |
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Profit/(Loss) After Tax |
[10.512] |
[2.504] |
(5.795) |
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Expenditures : |
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Increase / Decrease in Finished Goods |
0.529 |
0.000 |
0.316 |
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Salaries, Wages and Bonus |
1.578 |
2.103 |
2.462 |
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Managerial Remuneration |
0.600 |
0.600 |
0.600 |
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Payments of Auditors |
0.055 |
0.057 |
0.057 |
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Power and Fuel |
0.603 |
0.673 |
0.000 |
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Insurance Expenses |
0.104 |
0.137 |
0.162 |
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Other Expenditure |
8.784 |
3.052 |
5.088 |
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Raw Material Consumed |
1.204 |
5.447 |
4.493 |
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Interest |
0.033 |
0.886 |
0.893 |
|
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Depreciation & Amortization |
1.936 |
2.113 |
2.148 |
|
Total Expenditure |
15.426 |
15.068 |
16.221 |
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KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
PAT / Total Income |
(%) |
[213.22]
|
[19.84]
|
(55.57) |
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Net Profit Margin (PBT/Sales) |
(%) |
[214.24]
|
(20.78)
|
(55.57) |
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Return on Total Assets (PBT/Total Assets} |
(%) |
[61.15]
|
(8.22)
|
(17.94) |
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Return on Investment (ROI) (PBT/Networth) |
|
[0.15]
|
(0.04)
|
(0.10) |
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Debt Equity Ratio (Total Liability/Networth) |
|
1.24
|
(0.50)
|
(0.56) |
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Current Ratio (Current Asset/Current Liability) |
|
0.46
|
1.08
|
1.11 |
LOCAL AGENCY
FURTHER INFORMATION
The Company’s Fixed Assets of important valued includes:
- Freehold Land
- Buildings
- Plant and
Machinery
- Electrical
Installations
- Furniture and
Fixtures
- Office
Equipments
- Vehicles
Form 8
Bankers Charges
Report as per Registry
|
Name of the
company |
Charminar Nonwovens Limited |
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Presented By |
Mr. P V Rao, Managing Director |
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1. Date and
description of the instrument creating or evidencing the charge
|
31.08.1988. Deed
of Hypothecation executed by the company in favour of Industrial Finance
Corporation of India (IFCI), and the Industrial Credit and Investment
Corporation of India Limited (ICICI) (hereinafter collectively referred to as
“the Lenders”). A certified copy of the said deed of hypothecation is
enclosed. |
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2. Amount secured
by the charge /amount owing on security of the charge |
The Term Loan of
Rs. 10.000 millions. Agreed to be lent
and advanced by ICICI to the company together with interest, additional
interest, liquidated damages, commitment charges, premia on prepayment or on
redemption, costs, charges, expensed and all other moneys payable by the
company to ICICI in terms of Loan agreement dated 31.08.1988 between the
company of the one part and the lenders of the other part. |
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3. Short
Particular of the property charged. If the property acquired is subject to
change date of acquisition of property should be
given
|
The whole of the
movable properties of the company including its movable plant and machinery,
machinery, spares, tools and accessories and other movables, both present and
future (save and expect book debts) whether installed or not and whether now
lying loose or in cases or which are now lying or stored in or about or shall
hereafter from time to time during the continuance of the security be brought
into or upon or be stored in or about the company’s factories, premises and
godowns or wherever else the same may be held by any party to the order or
disposition of the company or in the course of transit or on high seas or on
order, or delivery, however and wherever in the possession of the company and
either by way of substitution or addition. |
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4. Gist of the
terms and conditions and extent and operation of the charge. |
A] The charge operates
as security, inter alia, for the due repayment by the company to ICICI of its
Term Loan of Rs. 10.000 millions, together with interest, additional
interest, liquidated damages, commitment charges, premia on prepayment or on
redemption, costs, charges, expenses and all other moneys payable by the said
loan agreement. B] The charges in
favour of ICICI under the sid deed of hypothecation is subject to the
charge(s) created and pr to be created by the company in favour of its
bankers on the company’s stocks of raw materials, semi-finished and finished
goods and consumables stores and book debts and such other movables as may be
specifically permitted to secure its working capital requirements in the
ordinary course of business. C] The company
has undertake to keep the goods hypothecated in marketable and good
conditions at its own costs and insure the same in the joint names of the
company and the Lenders. D] All the goods
hypothecated and all the realization and insurance proceeds thereof and all documents
in respect of the said security are to be kept distinguishable and held as
the exclusive property of the Lenders. E] The security
created under the said deed of hypothecation is to be a continuing
security. |
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5. Names, address
and description of the persons entitled to charge |
Industrial Credit
and Investment Corporation of India Limited (ICICI) 163, Backbay
Reclamation, Mumbai – 400 020, Maharashtra, India |
|
6. Date and brief
description of instrument modifying the charge |
NA |
|
7. Particular of modification specifying the terms and conditions or the
extent or operation of the charge in
which modification is made and
the details of modification |
NA |
|
Name of the company |
Charminar Nonwovens Limited |
|
Presented
By |
S. Ramakrishnan General Manager
and Secretary |
|
1) Date and description of instrument creating the change |
16.02.1990. Deed of hypothecation executed by the
Company in favour of State Bank of India |
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2) Amount secured by the charge/amount owing on the securities of charge |
Credit limits for
Guarantees/Letters of Credit of Rs. 0.500 Millions agreed to be lent and
advanced by SBI to the Company together with interest payable by the Company to SBI. |
|
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given |
The whole of the
company’s stocks of raw materials, stores and spares whether raw or in
process of manufactured therefrom which now or hereafter from time to time
during this security shall be brought into stores or be in or about the
company’s godowns or premises at Bonthapally, Jinnaram Mandal, Medak
District, Andhra Pradesh or wherever else the same may be stand hypothecated
to the Bank and its assigns way of first charge. |
|
4) Gist of the terms and conditions and extent and operation of the charge. |
[a] the charge
operates as security, interalia, for the due repayment by the company to SBI
of its Cash Credit of Rs. 0.500 Million, together with interest payable by
the Company to SBI. [b] The company
has undertaken to keep the goods hypothecated in marketable and good
condition at its own costs and to insure the same in the joint names of the
company and the Lenders. |
|
5) Name and Address and description of the person entitled to the charge. |
State Bank of India C and I Division, Main Branch, Hyderabad 500001 |
|
6) Date and brief description of instrument modifying the charge |
By a deed of hypothecation
dated 13.02.1991 modification to the charge was done and a form 8 was filed
in 14.03.1991. 27.01.1992 Deed
of hypothecation executed by the company in favour of State Bank of
India. A certified copy of the said
deed of hypothecation. |
|
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification. |
1] The Cash
credit limit for Guarantee/Letter of Credit has been increased from Rs. 0.500
Million to Rs. 1.500 Millions 2] the interest
rate has been increased from 17% p.a. to minimum of 21.75% p.a. |
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.48.68 |
|
UK Pound |
1 |
Rs.84.37 |
|
Euro |
1 |
Rs.65.70 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
2 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
-- |
|
--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 |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--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 |
|