MIRA
INFORM REPORT
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Report Date : |
25.10.2008 |
IDENTIFICATION DETAILS
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Name : |
WELSPUN INDIA LIMITED |
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Registered
Office : |
Survey No. 76, Village
and P. O. Morai, Vapi, District Valsad – 396191, |
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Country : |
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Financials (as
on) : |
31.03.2008 |
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Date of
Incorporation : |
29.10.1997 |
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Com. Reg. No.: |
04-33271 |
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CIN No.: [Company Identification
No.] |
L17110GJ1985PLC033271 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
RKTW00055G |
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PAN No.: [Permanent Account No.] |
AAACW1259N |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on
the Stock Exchanges. |
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Line of Business
: |
Manufacturing of Cotton Terry Towels and Cotton Yarns. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit
Limit : |
USD 28000000 |
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Status : |
Good |
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Payment
Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established company having satisfactory track.
Financial position is satisfactory. Payments are usually correct and as per commitments.
The company is doing well. It can be considered good for any normal business
dealings at usual trade terms and conditions. |
LOCATIONS
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Registered
Office : |
Survey No. 76, Village
and P. O. Morai, Vapi, District Valsad, Gujarat – 396191, India |
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Tel. No.: |
91-260-2437001-4 / 2437437 |
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Fax No.: |
91-260-2437088 |
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E-Mail : |
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Website : |
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Corporate Office : |
B Wing, 9th Floor, Trade World Premises,
Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013,
Maharashtra, India |
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Tel. No.: |
91-22-5650 3000 / 5650 3333 / 2490 8000 / 66136000 |
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Fax No.: |
91-22-2490 8020 / 2490 8021 |
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E-Mail : |
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Factory 1 : |
Survey No. 76,
Village and P. O. Morai, Vapi, District Valsad, Gujarat – 396191, India |
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Tel. No.: |
91-260-2437001-4 / 2437437 |
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Fax No.: |
91-260-2437088 |
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E-Mail : |
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Factory 2 : |
Welspun City, Taluka Anjar, Kutch – 370 110, Gujarat, India |
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Tel. No.: |
91-2836-573428/9 / 279000 / 09 |
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Fax No.: |
91-2836-247070 |
DIRECTORS
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Name : |
Mr. G. R. Goenka |
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Designation : |
Chairman |
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Name : |
Mr. B. K. Goenka |
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Designation : |
Vice Chairman and Managing Director |
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Date of
Birth/Age : |
15/08/1965 |
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Qualification : |
B. Com. |
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Date of
Appointment : |
17/01/1985 |
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Name : |
Mr. R. R. Mandawewala |
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Designation : |
Joint Managing Director |
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Name : |
Mr. M. L. Mittal |
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Designation : |
Executive Director (Finance) |
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Name : |
Mr. M. G. Diwan |
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Designation : |
Director |
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Name : |
Mr. Kamal Kishore |
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Designation : |
Director – (Nominee – IFCI Limited) |
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Name : |
Mr. F. Q. Kolman |
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Designation : |
Director (Nominee – Axis Bank) |
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Name : |
Mr. P. K. Gupta |
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Designation : |
Director – Nominee – IDBI |
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Name : |
Mrs. Renuka Ramnath |
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Designation : |
Director (Nominee ICICI Venture) |
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Name : |
Mr. Bala Deshpande |
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Designation : |
Director (Nominee ICICI Venture) |
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Name : |
Mr. A. K. Dasgupta |
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Designation : |
Director |
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Name : |
Mr. S. Ravikumar |
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Designation : |
Director (Nominee – Axis Bank) |
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Name : |
Mr. Padmanabh Sinha |
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Designation : |
Director (Nominee Dunearn Investments
(Mauritius) Pte. Limited) |
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Name : |
Mr. Arun Kumar |
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Designation : |
Director (Nominee IFCI Limited) |
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Name : |
Mr. Dadi B Engineer |
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Designation : |
Director |
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Name : |
Mrs. Revathy Ashok |
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Designation : |
Director |
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Name : |
Mr. Arun Todarwal |
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Designation : |
Nominee DunearnInvestments (Mauritius Pte.
Limited |
KEY EXECUTIVES
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Name : |
Mr. D. K. Patil |
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Designation : |
Company Secretary |
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AUDIT COMMITTEE : |
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Name : |
Mr. Bala Deshpande |
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Designation : |
Director (Nominee ICICI Venture) |
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Name : |
Mr. Padmanabh Sinha |
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Designation : |
Director (Nominee Dunearn Investments (Mauritius)
Pte. Limited) |
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Name : |
Mr. Arun Kumar |
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Designation : |
Director (Nominee IFCI Limited) |
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Name : |
Mr. Dadi B Engineer |
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Designation : |
Director |
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Name : |
Mr. Arun Todarwal |
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Designation : |
Nominee DunearnInvestments (Mauritius Pte.
Limited |
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Name : |
Mr. A. K. Dasgupta |
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Designation : |
Director |
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REMUNERATION COMMITTEE: |
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Name : |
Mr. Bala Deshpande |
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Designation : |
Director (Nominee ICICI Venture) |
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Name : |
Mr. Padmanabh Sinha |
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Designation : |
Director (Nominee Dunearn Investments
(Mauritius) Pte. Limited) |
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Name : |
Mr. Arun Kumar |
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Designation : |
Director (Nominee IFCI Limited) |
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Name : |
Mr. Arun Todarwal |
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Designation : |
Nominee DunearnInvestments (Mauritius Pte.
Limited |
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Name : |
Mr. A. K. Dasgupta |
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Designation : |
Director |
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SHARE TRANSFER
AND INVESTOR GRIEVANCE COMMITTEE : |
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Name : |
Mr. A. K. Dasgupta |
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Designation : |
Director |
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Name : |
Mr. B. K. Goenka |
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Designation : |
Vice Chairman and Managing Director |
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Name : |
Mr. R. R. Mandawewala |
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Designation : |
Joint Managing Director |
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Name : |
Mr. M. L. Mittal |
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Designation : |
Director (Finance) |
BUSINESS DETAILS
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Line of Business
: |
Manufacturing of Cotton Terry Towels and Cotton Yarns. |
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Products : |
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GENERAL INFORMATION
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No. of Employees
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Around 4000 |
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Bankers : |
·
State Bank of Bikaner and Jaipur ·
State Bank of India ·
Punjab National Bank ·
Canara Bank ·
Bank of India ·
Andhra Bank ·
State Bank of Patiala ·
Oriental Bank of Commerce ·
Exim Bank Limited ·
Bank of Baroda ·
IDBI Bank |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
Price Waterhouse and Company Chartered Accountants |
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Associates : |
·
Eupec Welspun Pipe
Coatings India Limited A joint venture with the second largest pipe coating company in the
world : Eupec Pipe Coating, Germany Subject has a 50:50 which was formed in
1999 through a joint venture between WGSRL and Eupec Pipe Coatings GmbH, Germany
(2nd largest pipe coating company in the world). The state of the art plant
was set up for coating of steel pipes, mainly produced by WGSRL. The Company
is in the process of being merged with WGSRL (pending High Court approval). Eupec Welspun was founded in 1999 as a
Joint Venture with Eupec Pipe Coating GmbH of Germany. EUPEC Pipe Coatings is
recognized as one of the world's leading pipe coating specialists and have
pioneered the new generation coating systems now widely used by the pipeline
Industry.
·
Welspun Cotspin
Industries Limited ·
Welspuns Gujarat
Stahl Rohren Limited Address 1 : Village
Jolva and Vadadla, Near Dahej, Taluka Vagra, District Bharuch, Gujarat 392
130, India Tel No.: 91-2641 256281 / 256011 Fax No.: 91-2641 256285 Addrees 2 :
Welspun City, Tal. Anjar, District Kutch, Gujarat 370 110, India Fax No.: 91-2836-247070 The company with the widest range of submerged arc welded pipes,
lingtitudinal and spiral A joint venture with Vincenzo Zucchi with
international brands such as Calvin Klein, Tommy Hilfiger, Versace, etc. The company’s houses a steel pipe
manufacturing mill at Bharuch, near Dahej, Gujarat. The state-of-the-art LSAW
plant was sourced from a world-renowned supplier, Mannesman Demag, Germany.
The Spiral plant technology was sourced from Capello Tubi of Italy. WGSRL is
the second largest manufacturer of SAW pipes in India. It's products are
approved by National/International agencies. The Company has the distinction
of having supplied pipes of various dimensions to USA, China, Columbia, Iran,
Egypt, etc. The Welspun Group diversified into steel
pipes in the year 1997, by setting up a world-class plant for manufacturing
Submerged Arc Welded (SAW) pipes.
·
Welspun Syntex
Limited Address 1 :
Survey no.394(P), Village Saily, Silvassa, U.T.Dadra & Nagar Haveli,
India Tel
No.: 91-260 2640596 / 99 Fax
No.: 91-260 2640597 Address 2 :Plot
no.14/15, Dewan Industrial Estate, Palghar, District Thane, India Tel
No.: 91-952525 252662 / 772 Fax
No.: 91-952525 250749 Marketing Office - Mumbai Kamani Wadi, 1st Floor, 542, Jagannath Shankar Seth Road, Chira Bazar,
Mumbai 400 002, India Tel No.: 91-22-22085242 /
22087514 / 22087518 Fax No.: 91-22-22085305 Marketing Office
- Surat 3001/3002 3rd
Floor, Jash Tex and Yarn Market, 1-Ring Road, Surat - 395 002, India Tel No.:
91 261 2327863 / 2336125 Fax No.: 91 261 2312604 A leading manufacturer of specialty
polyester filament yarn from India. It furnishes the stylists with 200 new
colours every month. Subject has a Specialty Polyester Filament
Yarn manufacturing facility at Silvassa , Union Territory of Dadra and Nagar
Haveli and yarn processing units at Silvassa and Palghar. WSL is the largest
manufacturer of Specialty Polyster Filament Yarn in India. The product range
- Fully Drawn Yarn (Grey and Dope Dyed), Mono Filament Yarn, Air Textured
Yarn, etc - provides competitive edge in the market for achieving better
realization. Welspun Syntex Limited is an ISO 9001
company, Manufactures world-class Specialty Polyester Filament Yarn (PTY),
Polyester Air Texturised Yarn (ATY), Fully Drawn Yarn (FDY), Partially
Oriented Yarn (POY) & Mono Filament Yarn (MFY) in SD, Bright, Full Dull,
Dope Dyed and Package Dyed. WSL has a Customer base spread across 40 countries
around the Globe. ·
Welspun
Polybuttons Limited A world of art from the world leaders in
buttons ·
GloFame Cotspin
Industries Limited Cutting-edge technology and
state-of-the-art machinery for processing the cotton yarn to engineer
different thickness of it. Subject is engaged in the manufacture of
Cotton Yarn and has a world-class manufacturing facility at Vapi, Gujarat The
company's product range includes high value-added specialty yarn like PVA
yarns, Zero twist yarn and Slub yarn - catering to a niche in the
international markets. The Company is in the process of being merged with
company (pending High Court approval). ·
Welspun Zucchi
Textiles Limited Address : Survey no. 76,
Village Morai, Vapi, District Valsad, Gujarat 396 191, India Tel No.: 91-260-2437437 Fax No.: 91-260-2437088 A joint venture with Vincenzo Zucchi
that’s synonymous with internatilnal brands such as Calvin Klein, Tommy
Hilfiger, Versace. Subject has a 50:50 Joint Venture between
WIL and Vincenzo Zucchi S.p.A, Italy, was established in 1997. WZTL has a
plant to manufacture bathrobes at Vapi, Gujarat. The foreign collaborator is
the licencee of a large number of esteemed brands in readymade garments like
Ferrari, Pierre Cardin, Lacoste, Valentino, Chipie, etc. As the bathrobes are
produced from terry fabric mainly sourced from WIL (located in the same
premises), both the companies enjoy synergy of operations and expertise of
each other's management. Welspun Zucchi specializes in the manufacture
of bathrobes. It is a 50-50% Joint Venture with Zucchi of Italy. Set up as an
Export oriented unit in 1997, It has been promoted by Vincenzo Zucchi Sp.A of
Italy and Welspun India limited of India. WZTL manufactures high quality
bathrobes in various types of fabrics, patterns, colours, and sizes. The unit
exports its production to Europe, Australia, Japan, and the Middle East. ·
Welspun
Polybuttons Limited Welspun Polybuttons offer a fascinating
fashion expression. A world of art from the world leaders in buttons. ·
Welspun Trading Limited ·
Welspun Mercantile Limited ·
Good Value Polyplast Limited ·
Mertz Securities Limited ·
Refined Salts Private Limited ·
Welspun Power and Steel Limited Address : Survey no.650, PO-Versamedi, Tal.Anjar,
District Kutch. Gujarat 370 110, India Tel No.: 91-2836-279051,53,54,55,56 Fax No.: 91-2836-279050 China Office Room no 1002, Tower 1, Wanda Plaza No 93, Jian Gou Road, Chayoung District, Beijing, China Tel No.:
86-1580-111-3676 ·
Welspun Retail Limited (WRL) ·
Welspun Wintex Limited (WWL) ·
Vipuna Trading Limited (VTL) ·
Welspun Mercantile Limited (WML) ·
Welspun Logistics Limited (WLL) ·
Welspun Realty Private Limited (WRPL) ·
Welspun Foundation for Health and Knowledge
(WFHK) |
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Subsidiaries : |
·
Welspun USA Inc., USA (WUSA) Showroom and
Office Address : Suite no. 1118, Textile Building, 5th
Avenue , New York, NY 10016 , U.S.A. Tel No.: 001-212-696 5100 Fax No.: 001-212-696 2831 ·
Welspun Holdings Private Limited, Cyprus (WHPL) ·
Welspun AG (WAG) ·
Besa Developers and Infrastructure Private
Limited (BESA) ·
Welspun Mexico S.A. de C.V (WMEX) (Held through
WAG) ·
Welspun Home Textiles UK Limited (WHTUKL) (Held
through WHPL) ·
CHT Holdings Limited (CHTHL) (Held through
WHTUKL) ·
Christy Home Textiles Limited (CHTL) (Held
through CHTHL) ·
Christy UK Limited (CUKL) (Held through CHTL) ·
Christy 2004 Limited (Held through CUKL) ·
Flyspark Limited (Held through CHTL) ·
Christy USA, LLC (Held through CHTL) ·
Christy Europe GmbH (Held through CHTL) ·
ERKingsley (Textiles) Limited (ERK) (Held through
CHTL) SOREMA - Tapetes E Cortinas De Banho, S.A.
(SOREMA) (Held through WHPL) ·
Welspun Tubular LLC , USA Address : 9301, Frazier Pike, Little Rock ,
Arkansas 72205, USA Tel No.: 1-501-301-8800 /
1-501-301-8801 Delhi,
Branch Office Address : 36, Bawa Potteries Complex, (Near
Nirula's), Aruna Asaf Ali Marg, Vasant Kunj, New Delhi 110 070, India Tel No.: 91-11-26122064 |
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Joint Venture
Companies : |
·
Welspun Zucchi Textiles Limited (WZTL) ·
MEP Cotton Private Limited (MCPL) |
CAPITAL STRUCTURE
(As on 31.03.2008)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
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|
81500000 |
Equity Shares |
Rs.10/- each |
Rs.815.000 millions |
|
1100000 |
Redeemable Cumulative Preference Shares |
Rs.10/- each |
Rs.110.000 millions |
|
23500000 |
Redeemable Cumulative Preference Shares |
Rs.10/- each |
Rs.235.000 millions |
|
|
Total |
|
Rs.1160.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
73089519 |
Equity Shares |
Rs.10/- each |
Rs.730.900 millions |
|
500000 |
0% Redeemable Cumulative Preference Shares |
Rs.100/- each |
Rs.50.000 millions |
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Total |
|
Rs.780.900
millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
|
|
|
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1] Share Capital |
780.900 |
810.900 |
993.700 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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|
3] Reserves & Surplus |
4807.290 |
4616.890 |
4466.500 |
|
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
5588.190 |
5427.790 |
5460.200 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
15235.710 |
13821.080 |
7972.200 |
|
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2] Unsecured Loans |
182.720 |
120.930 |
423.100 |
|
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TOTAL BORROWING |
15418.430 |
13942.010 |
8395.300 |
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DEFERRED TAX LIABILITIES |
1104.000 |
961.310 |
0.000 |
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|
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TOTAL |
22110.620 |
20331.110 |
13855.500 |
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APPLICATION OF FUNDS |
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|
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FIXED ASSETS [Net Block] |
13706.300 |
11468.920 |
8785.100 |
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Capital work-in-progress |
1358.190 |
1301.670 |
1471.200 |
|
|
|
|
|
|
|
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Incidental Expenditure Pending Capitalisation/ Allocation |
62.780 |
41.240 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
904.750 |
1665.430 |
1057.200 |
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
2901.920
|
2366.440 |
1951.300
|
|
|
Sundry Debtors |
753.410
|
889.490 |
417.300
|
|
|
Cash & Bank Balances |
920.510
|
1639.880 |
810.100
|
|
|
Loans & Advances |
2970.850
|
1861.650 |
1411.100
|
|
Total
Current Assets |
7546.690
|
6757.460 |
4589.800 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
1432.070
|
874.740 |
1923.400
|
|
|
Provisions |
36.020
|
28.870 |
124.400
|
|
Total
Current Liabilities |
1468.090
|
903.610 |
2047.800
|
|
|
Net Current Assets |
6078.600
|
5853.850 |
2542.000
|
|
|
|
|
|
|
|
|
TOTAL |
22110.620 |
20331.110 |
13855.500 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
12409.440 |
9735.610 |
6330.800 |
|
|
Other Income |
246.660 |
379.070 |
496.600 |
|
|
Total Income |
12656.100 |
10114.680 |
6827.400 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
414.520 |
824.790 |
632.800 |
|
|
Provision for Taxation |
151.860 |
303.760 |
217.300 |
|
|
Profit/(Loss) After Tax |
262.660 |
521.030 |
415.500 |
|
|
|
|
|
|
|
|
FOB Value of Exports |
10131.140 |
8508.300 |
NA |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
522.640 |
155.200 |
NA |
|
|
Stores & Spares |
121.970 |
161.180 |
NA |
|
|
Capital Goods |
1653.940 |
2379.200 |
NA |
|
|
Packing Material |
9.670 |
33.800 |
NA |
|
Total Imports |
2308.220 |
2729.380 |
NA |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Employees’ Remuneration and Benefits |
963.370 |
804.180 |
0.000 |
|
|
Manufacturing Expenses |
8338.770 |
6398.560 |
1035.100 |
|
|
Administrative Expenses |
1418.920 |
958.340 |
797.200 |
|
|
Raw Material Consumed |
0.000 |
0.000 |
2501.400 |
|
|
Finance Expenses |
676.850 |
478.180 |
0.000 |
|
|
Excise Duty |
0.000 |
0.000 |
17.200 |
|
|
Increase/(Decrease) in Finished Goods |
0.000 |
0.000 |
(267.900) |
|
|
Employee Cost |
0.000 |
0.000 |
565.900 |
|
|
Exceptional Item |
(3.520) |
0.000 |
0.000 |
|
|
Interest |
0.000 |
0.000 |
383.500 |
|
|
Miscellaneous Expenses |
0.000 |
0.000 |
77.800 |
|
|
Power & Fuel |
0.000 |
0.000 |
598.300 |
|
|
Depreciation & Amortization |
847.190 |
650.630 |
486.100 |
|
Total Expenditure |
12241.580 |
9289.890 |
6194.600 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2008 |
|
Type |
1st
Quarter |
|
Sales
Turnover |
2843.100 |
|
Other
Income |
71.000 |
|
Total
Income |
2914.100 |
|
Total
Expenditure |
2446.800 |
|
Operating
Profit |
467.300 |
|
Interest |
204.700 |
|
Gross
Profit |
262.600 |
|
Depreciation |
231.000 |
|
Tax |
24.200 |
|
Reported
PAT |
7.400 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
2.67 |
2.05 |
1.57 |
|
Long Term Debt-Equity Ratio |
2.15 |
1.63 |
1.26 |
|
Current Ratio |
1.36 |
1.31 |
1.07 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed Assets |
0.76 |
0.76 |
0.71 |
|
Inventory |
4.47 |
4.35 |
3.9 |
|
Debtors |
14.34 |
14.32 |
16.41 |
|
Interest Cover Ratio |
1.55 |
2.57 |
2.65 |
|
Operating Profit Margin(%) |
17.16 |
21.29 |
23.73 |
|
Profit Before Interest And Tax
Margin(%) |
9.97 |
14.37 |
16.05 |
|
Cash Profit Margin(%) |
9.42 |
12.47 |
14.24 |
|
Adjusted Net Profit Margin(%) |
2.23 |
5.54 |
6.56 |
|
Return On Capital Employed(%) |
5.82 |
8.13 |
8.66 |
|
Return On Net Worth(%) |
4.83 |
9.88 |
9.81 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
Subject, the flagship company of Welspun group was incorporated
in the year 1985. Subject is the largest producer of Terry Towel in Asia and
one of the 10 leading in the world, possessing a state-of-the-art, fully
integrated terry towel unit at Vapi, Gujarat. The Company's Plant with
state-of-the-art technology, has got ISO 9002 accreditation. Being an
environment friendly manufacturing process company, it has been awarded the
OKOTEX certification.
The Company transferred the Spinning division with its assets and liabilities
to Welspun Cotton Yarn Limited. Subject continues to manufacture terry towels,
but the yarn spinning is carried out by the new company - Welspun Cotton Yarn
Limited (WCYL). The demerger involved equity swapping in the ratio of 7:3. For
every 10 shares of Subject, shareholders were issued seven shares of WIL and
three shares of WCYL.
In order to give impetus to the market share, the Company has embarked upon
direct marketing. The Company has set up a wholly owned subsidiary in the name
of Welspun USA Inc. in New York to focus on the US markets. It has started
using Eguptian Cotton Yarn and American Pima Cotton in the manufacture of
premium quality towels and above same was registered trademark user of
'Egyptian Cotton' and 'Supima'.
The company has started direct marketing by way of 100% subsidiary in USA and
has made grounds for tie-ups with the best in the market for floating the
products in the market. The company chalked out a expansion plan by setting up
a 20 looms at an capital outlay of Rs.350 millions which is under implementation
and out of which 11 looms have been installed and production has commenced.
With this expansion the capacity has been enhanced to 10800 MTPA.
The company has amalgamate Glofame Cotspin Industries Limited with itself during
May 2005. According to the scheme of amalgamation,Welspun India will issue 10
Equity Shares of Rs.10/- each for every 33 Equity Shares of Rs.10/- each held
by the shareholders of Glofame Cotspin Industries Limited The Scheme became
effective from 1st April 2004.
During 2004-05 the company has set up a new plant at Anjar, Gujarat at an
investment of Rs.5.75 Billion. This plant was set up for the new product
category bed linens with a capacity of 35 million meters per annum. Further the
company also undertook a captial expenditure for construction of a commercial
building and installation of processing equipments and Diesel Generator Sets at
Vapi at a cost of Rs.6002.8 million. The company has also commenced its
commerical production of Toweling facility in March 2005, the spinning facility
commenced its commerical production in June 2005. The bed sheeting facility has
commissioned and scheduled to commence its commercial production at full
capacity by September 2005.
The company has increased the installed capacity of Cotton Terry Towels by
12000 MTPA during 2004-05 and with this expansion the total installed capacity
of Cotton Terry Towels has increased to 23500 MTPA.
MANAGEMENT
DISCUSSION AND ANALYSIS
ECONOMIC
OVERVIEW:
The global environment in the home textile industry has been undergoing change
in view of the increasing impetus on building capacities in the east while
consolidating distribution channels in the key markets of the EU region and the
United States. There have been consistent capacity additions in the weaving and
processing of high-end home furnishing fabrics in India as well as in China.
The global distribution of high-end home furnishing fabrics has been marked by
increasing product complexity, higher service standards by manufacturers and
shorter delivery cycles. The higher dependence on suppliers for research and
development and innovation continue. Hence, investing in design and product
development expertise has become a key differentiator in the global equation
between buyers and suppliers. The global textiles and apparel trade is
reportedly worth about US$ 450 bn with US and European markets dominating
global trade in this industry which is expected to touch around US $ 700 bn by
2010. India's current share of the global textiles and apparel market is only
US$ 19 bn. India therefore stands to benefit immensely from this growth as
international brands and buyers increasingly look to low cost producing nations
to enhance and broaden their sourcing base.
SEGMENT
ANALYSIS AND REVIEW
Operating in this segment of the market tests a manufacturer's ability in
coping with the best in the class technology, global design trends and the
ability to harness talent in creating new product lines for the market. To
address these challenges the industry today is continuously investing in new
technologies and striving to shorten its delivery cycles to meet customer
demands. Expanding the products breadth and expanding the designing team, both
domestically and internationally, have been an integral part of the today's
corporate strategy in this sector. The urban home textiles market in India is
estimated to be Rs. 93000 millions and expected to grow to Rs. 200000 millions
by 2011. Out of this only 6% of the market is organized. Bed and Bath constitute
about two thirds of this market.
SWOT ANALYSIS OF
INDIAN TEXTILE INDUSTRY:
Strengths
·
Second largest textile producer in the world. Long
and deep rooted textile tradition and highest net forex earner for the
country.
·
Integrated industry across the entire chain from
fibre to garments/home textiles i.e. concept to consumer
·
Abundant skilled and technical labour force, which
are especially suited for apparels / Made Ups manufacturing.
·
Large and growing domestic market to impart
stability to export thrust.
·
Strong Cotton base - India - the 3rd Largest Cotton
Producer in the World with the largest area under cotton cultivation a clear
competitive edge.
·
Huge Domestic demand Large Consuming Class
increasing per capita consumption and growth in residential real estate.
·
Flexibility in production of small order
lots.
·
Cost of Capital near bottom end of the curve. TUF
benefits (reimbursements for exports oriented projects) make it internationally
the lowest.
Weaknesses
·
Small size and technological outdated
plants result in lack of economics of scale, low productivity and weak quality
control.
·
Poor work practices resulting in higher
labor cost component in many staple garment, in spite of low labor costs
·
With the exception of spinning, other
sectors are fragmented.
·
Rigid government labor laws and
policies lack reforms.
·
High transaction and power cost.
·
Low Investment in Brand Building.
·
Poor Ethical Standards.
·
Low logistics and infrastructure
support.
Opportunities
·
Replacement of the MFA by the WTO ended four
decades of protectionismand is likely to increase globaltrade
·
Quotas continued for China after 2005
·
Textile industry identified as a thrust area by
government for development and promotion of exports
·
Phasing out of textile manufacturing by western
countries due to high cost of production. Production
·
facilities are likely to move to developing
economies and thus they are expected to be major beneficiaries
·
Consolidation in the global retail
industry facilitating global sourcing.
·
Shift in domestic market towards
readymade garments. Per capita domestic textile consumption offers room for
growth with increasing disposable incomes.
OUTLOOK
Welspun envisions to become a fully integrated home textile Welspun (Bed and
Bath) from cotton farming to retailing by the year 2010 with the largest market
capital in India and to be among the top three home textile companies in the
world.
Welspun is the leader in terms of embracing new technologies, product
innovations, market intelligence etc. and offering competitive end-to-end
solutions to customers at globally competitive prices with effective supply
chain management.
OPPORTUNITIES:
The Welspun's strategy to enter capital intensive projects, taking advantage of
TUFS, is expected to increase the topline significantly and also reduce
dependence on the terry towels business. It will transform itself from a single
product Welspun to a diversified home textiles business. The entire project has
been appraised by premier financial institutions and is already fully funded
through a mix of equity, debt and internal accruals.
CONTINGENT LIABILITIES NOT PROVIDED FOR
|
|
(As
on 31.03.2008) Rs.
In millions |
|
Excise, Customs and Service Tax |
|
|
Alleged excess clearance of cotton yarn in Domestic Tariff Area over
and above the limit specified in para 9.9 (b) oftheEximPolicy1997-
2002.TheCompany has deposited Rs. 0.70 millionunderprotestand filed an appeal
with the Customs, Excise and Service Tax Appellate Tribunal (CESTAT),
Ahmedabad against the order passed by Commissioner (Appeals) of Central
Excise and Customs. |
18.500 |
|
Alleged
manufacture and clear anceoftexturise dyarn without payment of excise duty
and without entering into statutory. Further, there was analleged shortage of Polyester
Texturised yarnin physical stock as compared to the stock as per statutory
records. |
12.760 |
FIXED ASSETS
·
Freehold Land
·
Buildings
·
Leasehold Improvements
·
Plant and Machinery
·
Vehicles
·
Furniture and Fixtures
·
Office Equipment
·
Computer Hardware
·
Computer Software
·
Goodwilll
AS PER WEBSITE
Subject started its
activities in 1985 as Welspun Winilon Silk Mills Private Limited, a synthetic
yarn business which went on to become Welspun Polyesters (India) Limited and
finally, Welspun India Limited emerged in the year 1995.
Today, Subject is Asia's largest and amongst the top 4 Terry Towel
producers in the World, with business spread across continents and a distribution
network in 32 countries including U.S.A., U.K, Canada, Australia, Italy, Sweden
and France. 94% of the total products are exported.
Subject offers a variety
of Products like Towels in different sizes and qualities, Bed linen using state
of the art technology and the best quality of Egyptian cotton.
Subject has additionally
launched organic products utilizing the benefits of Soya, Seaweed, milk and
Bamboo. It is the preferred supplier to 14 out of top 20 retailers in the
world.
Today Subject is a US $400 million Company with manufacturing facilities
in the US , UK , India , Mexico and Portugal , which is expected to become a $1
billion Company by the year 2010.
WELSPUN INDIA TO
DE-MERGE ITS DIVISIONS
Welspun India Limited, (WIL), part of US$ 3 billion Welspun Group announced the
de-merger of its Distribution and Marketing and Investment Divisions into two
separate companies at cost basis. This will allow strategic focus on specific
tiers of the businesses and thus shall enable better business control,
flexibility on business operations and leveraging International focus of the
Group.
The Distribution and Marketing Company which will hold all the international
businesses and Welspun Retail Limited (WRL) will be known as Welspun Global
Brands Limited (WGBL) whereas the Investment Company will be known as Welspun
Investments Limited (WINV).
As a part of this de-merger, WGBl will issue fresh shares to Promoters and
shareholders of WIL in lieu of Promoters' and WIL's shareholding in WRL (which
is valued at cost basis) and thus WGBL will hold entire equity of WRL. The
current shareholders of WIL will be allotted new shares in WGBL and WINV i.e. -
shareholders of every 100 shares in WIL will be given 10 shares of WGBL and 5
shares of WINV. Post Demerger, Promoter and Non-Promoter share holding in WGBL
shall be 57.6% and 42.4% respectively.
Upon de-merger, both WGBL and WINV will automatically be listed separately on
Indian stock exchanges i.e. NSE and BSE.
The above arrangement is subject to necessary statutory and regulatory
approvals. The effective date for this de-merger is proposed to be 01.04.2009.
WELSPUN INDIA
ANNOUNCES 2007-08 RESULTS
28% Growth in top line , operational EBITDA grew by 7%
Welspun India
Limited (Welspun), the JC Penny Supplier
of the Year and winner of 4
Gold trophies at the TEXPROCIL Awards this year reported a 28%
rise in sales, at Rs. 12,409 million in FY ‘08 as compared to Rs. 9,736 million
in FY‘07. Operational EBITDA reported grew by 7% to Rs . 1688 million. The Net
Profit stands at Rs. 263 million in FY 08.
Management
Comments
Speaking on the
results, Mr. Rajesh Mandawewala Joint MD said, “The appreciating rupee,
spiraling cotton prices and fuel prices affected the Company’s performance.
Despite these challenges, it has been an eventful year to position Welspun as
one of the top home textile player in the World”, he adds.
Salient features
of the Year
·
Welspun takes pride to add bath-rugs and shower
curtains to its product portfolio with the acquisition of Sorema in December
07.
·
The additional bath-rug facility at Vapi,
Maharashtra will start production by the beginning of Q3 FY 09.
·
Strengthened Christy presence in the US market
besides consolidating its position in UK
·
The top-of-bed facility at Mexico is proceeding as
per schedule and will start commissioning fully by Q2 FY 09.
·
The manufacturing of Christy has been shifted
completely to India and is adding on to the Christy know -how.
·
The commitment towards producing nothing but the
best products is further strengthened after the Company bagged 4 Gold Trophies
from TEXPROCIL (Textile Promotion Council of India) and the ‘Supplier of the
Year’ award in Quality from Worlds largest retailer J C Penny, USA. This is in
addition to the Earth Care Award the Company received from the Times of India
and Jindal Steel Works for the sustainability of environment.
Management Outlook
The appreciating
rupee, increase in cotton and fuel prices has played a very crucial role in the
financials of Welspun. However due to the various mitigate measures which the
management has undertaken and with the rupee showing a positive slide, the
management is hopeful of improving the margins and provide the best investment
opportunity for its stakeholders.
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.49.95 |
|
UK Pound |
1 |
Rs.79.56 |
|
Euro |
1 |
Rs.63.65 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
54 |
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 |
|