MIRA
INFORM REPORT
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Report Date : |
30.04.2011 |
IDENTIFICATION DETAILS
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Name : |
GARDEN SILK MILLS LIMITED (w.e.f. 09.06.1987) |
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Formerly Known as: |
VARELI WEAVES PRIVATE LIMITED |
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Registered Office : |
Garden Silk Mills Complex, Sahara Gate, Surat–395 010, |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
23.07.1979 |
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Com. Reg. No.: |
04-3463 |
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CIN No.: [Company
Identification No.] |
L17111GJ1979PLC003463 |
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Legal Form : |
A public limited liability company. The company's shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturing of Polyester yarns. |
RATING & COMMENTS
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MIRA’s Rating : |
A (64) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 19611612 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and a reputed company having fine track.
Trade relations are reported as fair. Business is active. Payments are
reported to be regular and as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
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Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INFORMATION PARTED BY
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Name : |
Mr. Bipin Modi |
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Designation : |
Director – Finance |
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Contact No.: |
91-261-3071399 |
LOCATIONS
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Registered Office : |
Garden Silk Mills Complex, Sahara Gate, |
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Tel. No.: |
91-261-2611197 - 98 / 2611513 / 2611615 / 2647119/2347117 |
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Fax No.: |
91-261-2611029 /2611502 – 503/23 |
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E-Mail : |
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Website : |
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Area : |
3000sq.fts |
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Location : |
Owned |
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Corporate Office : |
Manek Mahal, 90, Veer Nariman road, Churchgate, Mumbai 400020 |
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Tel. No.: |
91-22-22873117/19 |
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Fax No.: |
91-22-22048112 |
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Factory 1 : |
Vareli Complex, Village Vareli, Taluka Palsana. District
Surat-394327, |
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Tel. No.: |
91-2622-271241-47 |
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Location : |
Owned |
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Factory 2 : |
Village Jolva, Taluka Palsana, District Surat-394305, |
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Tel. No.: |
91-2622-271287-89 |
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Location : |
Owned |
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Registrar and
Transfer Agent : |
MCS Limited, Nilam Apartment, 88, Sampatrao Colony,
Alkapuri, |
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Tel No.: |
91-265- 2339397/ 2314757 |
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Fax No.: |
91-265- 2341639 |
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Email : |
DIRECTORS
AS ON 31.08.2010
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Name : |
Mr. Praful Amichand Shah |
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Designation : |
Chairman and Managing Director |
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Address : |
Rampura Tunki, |
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Date of Birth/Age : |
14.12.1938 |
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Date of Appointment : |
23.07.1979 |
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Name : |
Mr. Alok Shah |
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Designation : |
Executive Director |
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Address : |
Rampura Tunki, |
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Date of Birth/Age : |
14.12.1938 |
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Date of Appointment : |
23.07.1979 |
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Name : |
Mrs. Shilpa P. Shah |
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Designation : |
Executive Director |
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Address : |
Rampura Tunki, |
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Date of Birth/Age : |
28.03.1944 |
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Date of Appointment : |
23.07.1979 |
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Name : |
Mr. Sanjay S. Shah |
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Designation : |
Executive Director |
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Address : |
Rampura Tunki, |
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Date of Birth/Age : |
19.02.1956 |
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Date of Appointment : |
19.02.1990 |
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Name : |
Mr. Suhail P Shah |
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Designation : |
Director |
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Address : |
Rampura Tunki, |
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Date of Birth/Age : |
01.09.1974 |
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Date of Appointment : |
30.10.2006 |
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Name : |
Mr. Rajen P. Shah |
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Designation : |
Director |
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Address : |
13/A-266, Ami
Bunglow, |
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Date of Birth/Age : |
12.04.1951 |
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Date of Appointment : |
19.02.1990 |
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Name : |
Mr. Arunchandra N. Jariwala |
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Designation : |
Director |
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Address : |
901, Shree Apartments, Makkai Pool, Nanpura, |
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Date of Birth/Age : |
05.08.1931 |
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Date of Appointment : |
18.07.1988 |
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Name : |
Mr. Mandanlal Lankapati |
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Designation : |
Director |
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Address : |
97, |
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Date of Birth/Age : |
29.04.1931 |
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Date of Appointment : |
16.09.2002 |
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Name : |
Mr. Jitendra Purshottamdas Shah |
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Designation : |
Director |
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Address : |
28, Amrapalas Bunglow, |
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Date of Birth/Age : |
12.06.1933 |
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Date of Appointment : |
12.07.1987 |
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Name : |
Mr. Yatish Parekh |
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Designation : |
Director |
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Address : |
Sunayam Bunglow No.2, Adarsh Society, Athwalines, |
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Date of Birth/Age : |
30.11.1951 |
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Date of Appointment : |
19.10.2001 |
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Name : |
Mr. Sunil Sheth |
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Designation : |
Director |
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Address : |
601, Leela |
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Date of Birth/Age : |
27.02.1952 |
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Date of Appointment : |
22.04.2002 |
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Name : |
Anjan Mukherjee |
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Designation : |
Nominee of LIC of |
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Address : |
LIC of |
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Date of Birth/Age : |
01.12.1948 |
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Date of Appointment : |
08.01.2007 |
KEY EXECUTIVES
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Name : |
Mr. Kamlesh B. Vyas |
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Designation : |
Company Secretary |
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Address : |
201, |
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Date of Birth/Age : |
27.05.1960 |
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Date of Appointment : |
21.11.1996 |
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Name : |
Mr. Parthv S Shah |
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Designation : |
Key Executive |
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Name : |
Mrs. Sujata V Parsai |
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Designation : |
Key Executive |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2010
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A)
Shareholding of Promoter and Promoter Group |
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7,576,525 |
19.85 |
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14,331,220 |
37.55 |
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21,907,745 |
57.40 |
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Total
shareholding of Promoter and Promoter Group (A) |
21,907,745 |
57.40 |
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(B)
Public Shareholding |
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13,800 |
0.04 |
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8,839 |
0.02 |
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6,265 |
0.02 |
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162,561 |
0.43 |
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162,561 |
0.43 |
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191,465 |
0.50 |
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4,277,729 |
11.21 |
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5,776,247 |
15.13 |
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2,322,776 |
6.09 |
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3,690,573 |
9.67 |
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3,621,109 |
9.49 |
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68,944 |
0.18 |
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520 |
- |
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16,067,325 |
42.10 |
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Total
Public shareholding (B) |
16,258,790 |
42.60 |
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Total
(A)+(B) |
38,166,535 |
100.00 |
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(C) Shares
held by Custodians and against which Depository Receipts have been issued |
- |
- |
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- |
- |
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124,025 |
- |
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124,025 |
- |
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Total
(A)+(B)+(C) |
38,290,560 |
- |
(1) Indian
Individuals / Hindu Undivided Family
Foreign Financial InstitutionsBUSINESS DETAILS
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Line of Business : |
Manufacturing of Polyester yarns. |
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Products : |
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Brand Names : |
‘GARDEN’ and ‘VARELI’ |
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Imports : |
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Products : |
Raw Material |
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Countries : |
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Terms : |
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Selling : |
L/C, Cash, Credit (30 days, 60 days, 90 days) |
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Purchasing : |
L/C, Cash, Credit (30 days, 60 days, 90 days) |
PRODUCTION STATUS as on 31.03.2010
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Particulars |
Unit |
Production Capacity |
Installed Capacity |
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Polyester Chips/ Melt |
MT (Per Annum) |
358758 |
416000 |
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Polyester Filament Yarn |
MT (Per Annum) |
127520 |
162450 |
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Looms |
NO. |
-- |
1220 |
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Fabrics # |
Mtrs. In
Millions |
352.10 |
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Licensed Capacity *
- Delicensed Vide Notifi cation No. 477(E) dt. 27th July,1991
- # Additional capacity of 47250 TPA commenced production from 15th April, 2009
Note: The installed capacity is as certified by a Director and being a technical matter is accepted by the
Auditors without verification.
- # Including Fabrics procured from other manufacturers on job work 14.18 lac mtrs. (Previous Year 1.80 lac mtrs.)
GENERAL INFORMATION
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Customers : |
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No. of Employees : |
500 (In Office) (Approximately) |
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Bankers : |
v
Bank of v
Allahabad Bank, v
State Bank of Saurashtra, v
Bank of v
State Bank of v Corporation Bank v
Union Bank of v
Landes Bank Baden-Wurttemberg |
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Facilities : |
Notes : 1. Working capital borrowings from banks are secured by hypothecation of stock of raw materials, work-in-progress, finished goods, chemicals, stores and spares, stock in transit in respect of imported consignment, if any and book debts of the Company. These loans are further secured by second charge on all the immovable properties of the Company. 2. Term Loans from Financial Institutions and Banks are secured by first mortgage on pari passu basis on all immovable properties (except those specifically excluded by lenders, of Rupee Term Loans as per Note 3 below), both present and future and first charge by way of hypothecation of all movables (except book debts) both present and future subject to prior charges created/to be created in favour of Bankers for working capital borrowings. 3. Of the Rupee Term Loans from banks : i) Loans from Bank of India to the extent of Rs.75.631 Millions (Previous Year : Rs.1000.000 Millions) are secured by hypothecation of specific machinery of Fully Drawn Yarn (FDY) Project at Jolwa, ii) Loans from Corporation Bank to the extent of Rs.6,256.89 Millions (Previous Year: Rs.447.38 Millions) are secured by hypothecation of movable fixed assets of Gas Turbine Power Project at Jolwa, Specific Continuous Polymerisation Projects and Specific POY Projects under implementation at Jolwa, iii) Loans from Bank of India to the extent of Rs.243.001 Millions (Previous Year: Rs.299.318 Millions) are secured by hypothecation of specifi c Building and machinery of Texturising plant and Draw Twisting plant at Jolwa. iv) Term loans from ICICI Bank, Kotak Mahindra Prime Limited and Axis Bank Limited aggregating to Rs.11.556 Millions (Previous Year: Rs.10.315 Millions) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements, v) Housing Loans of Rs.6.865 Millions (Previous Year : Rs.17.983 Millions) from erstwhile Bank of Punjab Limited and loan of Rs.91.195 Millions (Previous Year : Rs.96.042 Millions) from ICICI Bank are secured by hypothecation of residential flats at Mumbai. vi) Loans from Bank of India to the extent of Rs.262.500 Millions (Previous Year : Rs.3,000.00 Millions) are secured by first Charge on stock-in-trade of Art and Artifacts and third charge on the Fixed Assets of the Company. vii) Loans from Union Bank of viii) Loans from Bank of Baroda to the extent of Rs.494.207 Millions (Previous Year : Rs.Nil) are secured by hypothecation of specifi c machinery of FDY Project and Draw Warper under commissioning at Jolwa. 4. Of the Foreign Currency Loans from banks: Loans to the extent of Rs.243.377 Millions (Previous Year : Rs.3,235.99 Millions) from Landes bank Baden-Wurttemberg, are secured by hypothecation of specific imported machinery of Direct Spinning Project at Jolwa.
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
M/s. Natvarlal Vepari and Company Chartered Accountants |
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Address : |
Nanpura, |
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Associates: |
Surat Textile Mills Limited |
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Partnership Firm: |
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CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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60000000 |
Equity shares |
Rs. 10/- each |
Rs. 600.000 millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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38290560 |
Equity shares |
Rs. 10/- each |
Rs. 382.906 millions |
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Note:
Of the above equity share
(a) 2590000 equity shares of rs.10 each issued as fully paid bonus shares by capitalization from general reserve.
(b) 10308150 equity shares allotted pursuant to the schemes of amalgamation sanctioned by the Hon’ble High Court of Gujarat
(c) 2200000 equity shares of rs.10 each fully paid up issued on conversion of fully paid up 12.5% secured redeemable convertible debentures in terms of prospectus dated 5th August, 1987
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
30.06.2008 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
382.906 |
382.900 |
382.900 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
4519.997 |
3968.300 |
3539.700 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
4902.903 |
4351.200 |
3922.600 |
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LOAN FUNDS |
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1] Secured Loans |
9485.736 |
8380.900 |
6798.700 |
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2] Unsecured Loans |
793.456 |
658.800 |
1222.800 |
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TOTAL BORROWING |
10279.192 |
9039.700 |
8021.500 |
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DEFERRED TAX LIABILITIES |
1175.877 |
1036.500 |
947.800 |
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TOTAL |
16357.972 |
14427.400 |
12891.900 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
9475.686 |
8504.600 |
6848.100 |
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Capital work-in-progress |
1950.478 |
1383.800 |
1035.300 |
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INVESTMENT |
766.096 |
515.800 |
781.800 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
34.600 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
3653.620
|
2175.500
|
1857.600 |
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Sundry Debtors |
1268.688
|
674.700
|
1079.000 |
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Cash & Bank Balances |
348.063
|
728.800
|
761.700 |
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Other Current Assets |
0.000
|
0.000
|
0.000 |
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Loans & Advances |
2202.867
|
2028.300
|
1543.600 |
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Total
Current Assets |
7473.238
|
5607.300
|
5241.900 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Sundry Creditors |
984.443
|
589.097
|
723.973 |
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Other Current Liabilities |
1763.502
|
609.403
|
23.644 |
|
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Provisions |
560.256
|
387.600
|
306.883 |
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Total
Current Liabilities |
3308.201
|
1586.100
|
1054.500 |
|
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Net Current Assets |
4165.037
|
4021.200
|
4187.400 |
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MISCELLANEOUS EXPENSES |
0.675 |
2.000 |
4.700 |
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|
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TOTAL |
16357.972 |
14427.400 |
12891.900 |
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PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
30.06.2008 |
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SALES |
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|
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Income |
25148.941 |
13316.083 |
16762.770 |
|
|
|
Other Income |
64.142 |
70.566 |
138.479 |
|
|
|
TOTAL (A) |
25213.083 |
13386.649 |
16901.249 |
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|
|
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Less |
EXPENSES |
|
|
|
|
|
|
|
Consumption of Raw Material |
19280.492 |
9299.089 |
12324.283 |
|
|
|
Administrative Expenses |
140.882 |
109.962 |
444.702 |
|
|
|
Advertising Expenses |
4002.497 |
2438.286 |
2744.688 |
|
|
|
Increased / (Decreased) In stock |
(599.013) |
(78.794) |
(444.031) |
|
|
|
TOTAL (B) |
22824.858 |
11768.543 |
15069.942 |
|
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Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
2388.225 |
1618.106 |
1831.607 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
731.698 |
469.815 |
570.201 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1656.527 |
1148.291 |
1261.406 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/ AMORTISATION (F) |
725.639 |
448.360 |
574.012 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
930.888 |
699.931 |
687.394 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
298.841 |
204.090 |
287.357 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
632.047 |
495.847 |
400.037 |
|
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|
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Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1300.234 |
785.084 |
585.244 |
|
|
|
|
|
|
|
|
|
Add |
TRANSFERRED
FROM DEBENTURE REDEMPTION RESERVE |
0.000 |
112.500 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
47.500 |
26.000 |
20.500 |
|
|
|
Debenture Redemption Reserve |
0.000 |
0.000 |
112.500 |
|
|
|
Proposed Dividend |
68.923 |
57.436 |
57.436 |
|
|
|
Tax on Dividend |
11.448 |
9.761 |
9.761 |
|
|
BALANCE CARRIED
TO THE B/S |
1804.410 |
1300.234 |
785.084 |
|
|
|
|
|
|
|
|
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EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
1586.191 |
247.984 |
273.671 |
|
|
TOTAL EARNINGS |
1586.191 |
247.984 |
273.671 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
3388.562 |
755.831 |
219.093 |
|
|
|
Stores & Spares |
120.303 |
92.463 |
44.605 |
|
|
|
Capital Goods |
633.990 |
1761.185 |
45.495 |
|
|
|
Others |
0.000 |
0.000 |
12.131 |
|
|
TOTAL IMPORTS |
4142.855 |
2609.479 |
321.324 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
16.51 |
12.95 |
-- |
|
Expected Sales (2010-2011) : Rs.30000.000 Millions
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
6453.260 |
8871.840 |
7918.300 |
|
Total Expenditure |
8008.930 |
8172.910 |
7126.300 |
|
PBIDT (Excl
OI) |
444.350 |
998.930 |
792.000 |
|
Other Income |
11.920 |
17.490 |
9.730 |
|
Operating
Profit |
456.270 |
716.420 |
801.730 |
|
Interest |
205.450 |
195.450 |
221.190 |
|
Exceptional
Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
250.820 |
520.970 |
580.540 |
|
Depreciation |
185.100 |
193.680 |
194.810 |
|
Profit
Before Tax |
65.720 |
327.290 |
385.730 |
|
Tax |
(0.140) |
74.610 |
133.360 |
|
Reported PAT |
65.860 |
252.680 |
252.370 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
65.860 |
252.680 |
252.370 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
30.06.2008 |
|
PAT / Total Income |
(%) |
2.51
|
3.70
|
2.37 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
3.70
|
5.26
|
4.10 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
5.49
|
4.96
|
5.68 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.04
|
0.16
|
0.18 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.77
|
2.44
|
2.31 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.26
|
3.53
|
4.97 |
LOCAL AGENCY FURTHER INFORMATION
Review of operations:
Gross sales for the year ended 31st March, 2010 increased to Rs.26623.300 Millions as compared to Rs.18636.400 Millions in the corresponding 12 months period of 2008-09, registering a growth of about 43%.
Polyester chip sales increased substantially during the year from Rs.7844.500 Millions to Rs.13560.400 Millions whereas yarn sales were higher at Rs.11325.500 Millions as compared to Rs.9118.400 Millions in the corresponding 12 months of the previous year. The FOB value of goods exported by the Company during the 12 months period ended 31.03.2010 increased to Rs.1586.200 Millions as compared to Rs.400.000 Millions in the corresponding period of 2008-09.
The Earnings before Interest, Depreciation and Tax (EBIDTA) rose by 18.77% to Rs.2388.200 Millions compared to Rs.2010.900 Millions in the previous year. The Profit before Tax also grew by 18.55% to Rs.930.900 Millions in the financial year 2009-10.
The Company achieved higher production of chips/polymer melt at 358758 MT during the financial year 2009-10 as compared to 231758 MT in the corresponding period of 2008-09. The increase in chip/polymer production was the main reason for the increase in profits for the year. The increase in output more than off set the reduction in chip margins which followed increased competition from new entrants.
With the enhancement in POY/FDY manufacturing capacity, the yarn production during the year, was higher at 127520 MT compared to 94703 MT in the 12 months period of 2008-09. The higher yarn production was the second most important reason for profit increase. During the year the Company increased its emphasis on specialty yarns and broadened the geographical distribution of its products.
Fabric production increased from 318.41 lac meters to 352.10 lac meters in the year. The Company increased its presence in the kidswear segment by introducing many new georgette and chiffon varieties for this segment. The Company also increased its sales of embroidered sarees and dress materials and institutional sales.
In the last year fabric development has been geared towards jaquard and dobbies. In line with the market the Company has made a shift from traditional dress materials and sarees to shirtings, fabric for garmenters and interlining fabric.
The Government of India partially rolled back the stimulus package, by raising the excise duty on polyester from 4% to 8% in July 2009 and increased it by another 2% on polyester and feedstock alike in the Union Budget 2010-11, thus bringing them at a uniform rate of 10%. The higher excise duty will enable the Company to substantially reduce its accumulated cenvat balance and hence improve financial liquidity.
The Company has closed down its activity of the finance division during the year and therefore the present business activity falls within a single primary business segment viz. 'Textiles'.
Expansion Program:
To expand its product portfolio and to maintain its leadership in domestic market, the Company has over a period successfully enhanced its chips and yarn manufacturing capacity with an emphasis on specialty products.
In January 2009 after the successful expansion of Continuous Polymerization (CP) capacity to 416,000 TPA the Company successfully added POY and FDY capacity of 47,250 TPA in April 2009. The fruits of this expansion are visible in the results of the year under review. Moreover, the Company has successfully commissioned a project involving further enhancement of polyester chips capacity by 300 tonnes per day (TPD) at its plant at Village Jolwa, Taluka Palsana, Dist. Surat which commenced commercial production during April, 2010. The chips to be produced will be specialty chips that will cater to the needs of not just the textile industry but also the fast growing fi lm and packaging industry.
During the year, the Company undertook expansion involving increase in POY capacity by about 144 TPD and
FDY capacity of about 112 TPD at Jolwa. These projects are expected to be commissioned in a phased manner during January-June, 2011. These new plants will markedly increase production of specialty products. To cater to the growing needs of the sized-yarn sector the Company has initiated a draw-warping expansion project which will further enhance draw-warping capacity by 35 TPD. This project is expected to be on-stream by October, 2010.
To meet the captive power requirement for these projects, the Company is also putting up a coal based thermal power project of 18 MW at Jolwa which is expected to commence power generation before March, 2011.
Their expansion projects over the year are aligned with their objective of maintaining above-industry-average growth and will consolidate their position as a global leader in specialized polyester products. These initiatives will improve their economies of scale, their technological capabilities and strengthen their position in a very competitive market.
Review of the
Economic Scenario:
The global economy continues to recover amidst ongoing
policy support and the improving financial conditions of consumers and
businesses alike. The recovery has been almost as synchronized and
unanticipated as was the downward phase of the Great Recession. The recovery
process is led by emerging market economies, especially those in
The global economy however continues to face several
challenges. The likely exit from expansionary monetary and fiscal policies in
2011 may be the biggest risk facing the global recovery. Developed nations are
facing high levels of unemployment (around 10% in the
On the back of 15.1% growth by the manufacturing sector, the Indian economy expanded by 9.0% in the first three months of 2010. In the current fiscal the government projects the economy will grow by 8.5% (vs 7.4% in 2009-10).
Inflation in food products, measured by the Wholesale Price Index (WPI), rose to 16.8% in 2009-10 from10% in 2008-09. With the wholesale price-based inflation still above 9.5%, the RBI may further tighten money supply, which will result in higher interest rates. With the unclear prospects for the monsoon, high inflation and the policy responses it may bring, are possibly the biggest hurdles to the economic growth.
Industry Review:
Globally synthetic fibres, led by polyester (polyester
staple fibre and polyester filament yarn) have been growing rapidly owing to a
growing demand for fiber and the continuing replacement of natural fibres in a
world short of agricultural acreage. The proportion of synthetics in total
fibre consumption worldwide has risen from 47% to 57% in the last 15 years
while cotton has reduced from 42% to 36%. Moreover the percentage of polyester
in global synthetics market has gone up from 58% to 79% in this period (source
Oerlikon: Fibre Year 2010). In
(Including PFY) outside of
The demand for polyester filament yarn in
In the year 2009-10 the growth in the Indian PFY industry
was positive, despite a severe shortage of PTA raw material owing to delayed
start-up of a large new Indian PTA plant. It is expected that the recent
start-up of this plant will result in healthy growth of the industry in the
remaining months of the year. The recent successful start-up of the IOC MEG
plant will also significantly reduce the import dependency of MEG in
In the years ahead relatively easier availability of raw materials, growing local and international demand and improved cost competitiveness of Indian manufacturer’s vis-ŕ-vis their global competitors should permit strong growth in the PFY industry.
The general weaving/fabric processing segment of the PFY industry suffered production losses due to labour shortage. The market seems to be consolidating from its super fragmented nature. Very small weavers who traditionally were job workers are shutting shop, and medium large scale weavers are augmenting capacity particularly in automatic looms.
Opportunities,
Strengths and Outlook:
When oil prices were at $147 and costs of polyester raw materials were at a peak, and when the economy was in the grip of a severe slowdown, the Company has shown robust profitability reestablishing its credentials as a relatively lowrisk company. During the financial crisis Indian consumers skewed their spending toward value-products like PFY textiles.
The growth of the rural market has played a major role in the resilient growth of PFY in good times and bad. It is expected that rural markets will play an increasingly important role in the economy which offers a major opportunity for growth in the polyester industry. The price of cotton has gone up considerably putting it out of reach of many consumers thus improving the competitive positioning of PFY.
Per capita consumption of polyester in
The Company occupies a leadership position in the
manufacturer of Polyester Filament Yarn (PFY)-based textiles in
The Company is considered to be a market leader in quality and enjoys a solid reputation with its customers who give it a price-premium across its product range. Its market position gives it the ability to grow fast and profitably. Its specialty range allows it to differentiate itself in the market and will enable it to successfully withstand competitive pressures in times to come. The specialty market is growing and so is the need for quality, providing a great opportunity for the Company’s growth.
The Company is expected to increase its exports
substantially this financial year. While
Garden is an integrated player in the polyester chain whose products stem from chips to POY to processed yarn, preparatory yarn, to finished, dyed and printed fabric. This integration helps insulate it from the vagaries of the market and gives it leading information on which to base decisions across the chain.
The introduction of GST will be beneficial to the Company’s performance as it will create a level playing fi eld vis-a-vis its some of competitors who presently have central sales tax exemptions.
The general economic expansion is expected to contribute further to the upbeat trend. The Company plans to exploit this opportunity through a disciplined policy of long-term investment thereby achieving higher returns and enhancing shareholder value. The Company will especially address opportunities to leverage domains of market leadership.
Finance and
Investment:
The Company, during the year, has successfully mobilized additional resources to fund its long-term and project-related financial requirements. The capex program of the Company is being funded by a combination of internal accruals and long-term borrowings from banks. The Company has spent an aggregate amount of Rs.1864.900 Millions on ongoing projects until year-ended 31st March, 2010.
The Company availed term loans of Rs. 1955.300 Millions during the year to part-finance the capital expenditure program. The working capital requirements are met through borrowings from a consortium of banks, and placement of Commercial Papers and availing buyers credit from raw material suppliers.
The Company repaid long-term loans of Rs.1246.700 Millions (including prepayment of Rs. 14.700 Millions to a foreign bank) to the banks and institutions towards its term loan obligations for the year 2009-10.
The Company continues to maintain adequate liquidity to meet unanticipated expenditures and accordingly invests surplus funds available in rated debt mutual funds and fixed deposits of reputed banks. As in the past, the Company enjoyed the confidence of its bankers and has been able to avail various banking facilities at favourable terms. Interest cost has gone up during the year largely on account of additional borrowings for the new projects which commenced during the year. The Company with better working capital management maintained lower interest costs inspite of higher working capital utilization during the year as compared to previous year.
Banks have switched over to the system of Base Rate from 1st July, 2010. It is expected that the Base Rate system will enhance transparency in lending rates. The switchover to base rate system will not have major impact on the Company.
Form 8:
|
Corporate
identity number of the company |
L17111GJ1979PLC003463 |
|
Name of the
company |
GARDEN SILK MILLS
LIMITED |
|
Address of the
registered office or of the principal place of business in |
Garden Mills
Complex, |
|
This form is for |
Creation of
charge |
|
Type of charge |
Movable Property |
|
Particular of
charge holder |
Bank of |
|
Nature of
instrument creating charge |
Hypothecation
Agreement |
|
Date of
instrument Creating the charge |
13/12/2010 |
|
Amount secured by
the charge |
Rs.900.000
Millions |
|
Brief of the principal
terms an conditions and extent and operation of the charge |
Rate of Interest 2.50% over Bank
Rate for Cash Credit 2.00% over Bank
Rate for Corporate Loan III Terms of
Repayment Cash Credit -
Repayable on demand Corporate Loan
III - Repayable as per schedule Margin 25% on imported
Yarn 30% on other
current assets Extent and
Operation of the charge (1) 1st Charge on
all current assets of the borrowers (2) Borrowers
shall not without the prior written permission of the Bank create any mortgage,
charge, lien or encumbrance upon or over hypothecated assets (3) Borrowers at
their own cost to insure the hypothecated assets against such risks as the
Bank shall require |
|
Short particulars
of the property charged |
All its stocks of
raw materials, semi finished and finished goods, both present and future, All
present and future book-debts, outstanding monies. Receivables, claims,
bills. in action, contracts, engagements and securities of the Borrower Subject to
agreed/exclusive prior charge on movable machinery/vehicles etc availed by
borrowers all movable machineries, vehicles both present and future |
Trade References:
- Vishwraj Rubber Industries, Ahmedabad
- Honest Trading Company Private Limited,
Fixed Assets
- Building
- Plant and
Machinery
- Furniture and
Equipments
- Vehicles.
Web Side Details
Profile
Priding
itself as the country's premier fabric engineer, design maker and a leading
polyester yarn manufacturer, Garden Silk Mills Ltd. represents an 80-year creed
of creativity in textiles.
Creatively
led, technologically driven
Garden's
range of high fashion fabric centres on fine filament and micro filament
polyester fabrics - georgettes, chiffons, failles, jacquards - both dyed and printed,
for ladies blouses, skirts, dresses as well as sarees. Also manufactured, is an
exclusive range of printed pure silk chiffon, cotton and viscose. Garden's
ability to anticipate demand trends is supported by a large and talented pool
of designers who continuously develop new fabrics and 2,000 new print ideas
each year.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.44.38 |
|
|
1 |
Rs.73.88 |
|
Euro |
1 |
Rs.65.83 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
7 |
|
--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 |
|
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
64 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.