MIRA INFORM REPORT

 

 

Report Date :

18.06.2011

 

IDENTIFICATION DETAILS

 

Name :

GRABAL ALOK IMPEX LIMITED

 

 

Registered Office :

249/1, Village Vasona, Silvassa-396230, Dadar Nagar Haveli

 

 

Country :

India

 

 

Financials (as on) :

31.03.2010

 

 

Date of Incorporation :

17.12.1993

 

 

Com. Reg. No.:

11-000352

 

 

Capital Investment / Paid-up Capital :

Rs.224.850 Millions

 

 

CIN No.:

[Company Identification No.]

L51900DN1993PLC000352

 

 

Legal Form :

Public Limited Liability Company.  The company’s shares are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturer of Embroidered Fabrics and Laces.

 

 

No. of Employees :

Information denied by the management.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba (51)

 

RATING

STATUS

 

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 5600000

 

 

Status :

Good

 

 

Payment Behaviour :

Usually correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having fine track. General financial position is good. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct 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.

 

 

INFORMATION DECLINED BY

 

Management non co-operative

 

LOCATIONS

 

Registered Office/ Factory 1 :

249/1, Village Vasona, Silvassa-396230, Dadar Nagar Haveli, India

Tel. No.:

91-260-3950555

Fax No.:

91-260-2699495

E-Mail :

sanjay_b@grabalalok.com

premkumar@alokind.com

 

 

Factory 2 :

A-317, T.T.C. Industrial Area, MIDC, Village Mahape, Nave Mumbai, Maharashtra, India

Tel. No.:

91-22-65162723/24/25

 

 

New Delhi Office:

F-2/9, Okhla Industrial Area, Phase I, New Delhi-110020, India

 

 

DIRECTORS

 

As on 31.03.2010

 

Name :

Mr. Ashok B. Jiwrajka

Designation :

Director

Address :

Flat No. 301, 3rd Floor, Krishnakunj, Shivaji Park Road No.5, Mahim, Mumbai- 400 016

Date of Birth/Age :

57 years

Qualification :

Commerce Graduate

Experience :

29 Years

 

 

Name :

Mr. Dilip B. Jiwrajka

Designation :

Director

Address :

Flat No. 6, 6th Floor, ‘Bay View’, Worli, Khan Abdul Gaffar Khan Road, Worli, Mumbai-400 018

Date of Birth/Age :

51 Years

Qualification :

Science Graduate with Diploma in Business Entrepreneurship & Management

Experience :

23 Years

 

 

Name :

Mr. Surendra B. Jiwrajka

Designation :

Director

Address :

Flat No. 901, Palm Beach Apartments, 67-A Pochkhanwala Road, Worli Sea Face, Worli, Mumbai- 400 025

Date of Birth/Age :

49 Years

Qualification :

Commerce Graduate

Experience :

20 Years

 

 

Name :

Mr. Chandrakumar Bubna

Designation :

Director

Address :

124/5, Krishna Kunj, Sainik Farm, Central Avenue,

New Delhi- 110048

Date of Birth/Age :

54 Years

Qualification :

Commerce Graduate

 

 

Name :

Mr. S. K. Bhoan

Designation :

Director

Address :

401, Jhulelal, 16th Road, Khar (W), Mumbai- 400 052

Date of Birth/Age :

58 Years

Qualification :

B.E (Textiles)

 

 

Name :

Mr. Erich Grabher

Designation :

Director

Address :

P.A Box No. 173, A-6890, Lustenau, Austria

Date of Birth/Age :

61 Years

 

 

Name :

Mr. Indru Vaswani

Designation :

Director

Address :

Silver Arch Apartments, Flat No. 605, 22 Feroz Shah Road, New Delhi-110001

Date of Birth/Age :

55 Years

Qualification :

Commerce Graduate

 

 

Name :

Mr. Suresh Rajani

Designation :

Director

Address :

23, Jaya Shree Building, Worli Sea Face, Mumbai- 400 025

Date of Birth/Age :

48 Years

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 31.03.2011

 

Names of Shareholders

Total No. of Shares

Total Shareholding as a % of total No. of Shares

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

925,500

4.12

Bodies Corporate

8,997,234

40.01

Sub Total

9,922,734

44.13

(2) Foreign

 

 

Bodies Corporate

787,500

3.50

Sub Total

787,500

3.50

Total shareholding of Promoter and Promoter Group (A)

10,710,234

47.63

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

914,000

4.06

Foreign Institutional Investors

1,295,529

5.76

Sub Total

2,209,529

9.83

(2) Non-Institutions

 

 

Bodies Corporate

1,392,092

6.19

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs.0.100 Million

837,422

3.72

Individual shareholders holding nominal share capital in excess of Rs.0.100 Million

4,276,437

19.02

Any Others (Specify)

3,059,286

13.61

Clearing Members

9,471

0.04

Market Maker

8,192

0.04

Hindu Undivided Families

266,671

1.19

Non Resident Indians

78,255

0.35

Foreign Corporate Bodies

2,696,697

11.99

Sub Total

9,565,237

42.54

Total Public shareholding (B)

11,774,766

52.37

Total (A)+(B)

22,485,000

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of Embroidered Fabrics and Laces.

 

 

Products :

Product Description

Item Code

Tulles and other net fabrics, not including woven, knitted or crocheted fabrics, lace in the piece, in strips or in mortifs.

5804

Hand-woven tapestries of the type goblins, flaunders, aubusson, beauvals and  the like and needle-worked tapestries (for example petit point, cross stitch) whether or not made up.

5805

Embroidery in the piece, in stripes or in mortifs.

5810

Woven fabrics of metal thread and woven fabrics of metallised yarn of heading no.56.05 of a kind used in apparel, as furnishing fabrics or for similar purposes not elsewhere specified or included.

5809

 

PRODUCTION STATUS (AS ON 31.03.2010)

 

Installed Capacity

126 Nos.

 

 

Particulars

Unit

Actual Production

Lakhs

Embroidered Fabric and Laces

Mtrs.

166.32

 

Notes:

 

1 Actual production is on double shift basis during the year.

2 The above excludes a 34.58 lakhs metres (Previous Year 6.40 lakh metres) processed for the outside parties on job work basis.

 

GENERAL INFORMATION

 

No. of Employees :

Information denied by the management.

 

 

Bankers :
  • State Bank of India, Backbay Reclamation Branch, Raheja Chambers,   Free Press Journal Marg, Nariman Point, Mumbai- 400 020, Maharashtra, India   
  • Syndicate Bank, 26 A, Sir P.M Road, Fort, Mumbai-400 001, Maharashtra, India

 

 

Facilities :

Secured Loan

As on 31.03.2010

(Rs. in Millions)

As on 31.03.2009

(Rs. in Millions)

From Financial Institution (Rupee Loans)

Under Overseas Investment Finance Scheme

125.308

267.857

From Banks

 

 

Project Loans

1370.562

1567.576

Other Loans

252.553

352.624

From Banks on Cash Credit Accounts, Working capital demand loans etc.

119.774

315.840

From Financial Institution Working capital demand loans etc.

390.460

210.000

Total

2258.657

2713.897

 

 

 

Unsecured Loan

 

 

Nil (Previous Year 66), 2.50% Foreign Currency Convertible Bonds (FCCBs) of USD 25000 each

0.000

84.068

200, 1.00% Foreign Currency Convertible Bonds (FCCBs) of USD 100000 each

902.800

1019.000

Total

902.800

1103.068

 

Note:

 

  1. Term Loan from Financial Institution under the Overseas Investment Finance (OIF) Scheme of Rs.125.000 Millions  (Previous Year Rs.Rs.267.857 Millions ) is secured by (i) residual charge created/ to be created on entire movable and current assets of the Company, both present and future, (ii) pledge created / to be created on company’s subsidiary’s shareholding in Grabal Alok (UK) Limited., (iii) personal guarantees of three Promoter Directors of the Company (iv) Term loan of Rs.35.714 Millions  (Previous Year Rs. 107.143 Millions ) is further secured by pledge on Promoter’s investment in the Company and (v) Term loan of Rs.89.285 Millions  (Previous Year Rs. 160.714 Millions) is further secured by pledge on Promoter’s investment in the Company and promoter’s and company’s investment in Alok Industries Limited  to the extent of Rs.275.000 Millions .

 

  1. Term Loan from banks aggregating to Rs.1000.729 Millions  (Previous Year Rs. 1027.636 Millions) are secured by (i) exclusive charges created and/or loans to be created on movable assets of the company other than movable assets in respect of which charge has been created/ to be created as stated.

 

  1. Term Loans from banks aggregating to Rs.357.407 Millions  (Previous Year Rs.539.940 Millions ) are secured by (i) charges created / to be created ranking pari passu on all fixed assets of the Company, both present and future excluding mortgage in favour of debentures holders (Refer Note 1 above) (ii) a charge created / to be created on all current assets of the Company subject to a prior charge on such current assets created / to be created in favour of the Company’s bankers for working capital facilities and (iii) personal guarantees of three promoter directors of the Company.

 

  1. Other Term Loan from Bank aggregating to Rs.252.573 Millions (Previous Year Rs.352.624 Millions) is secured by subservient charge on current assets and other moveable assets of the Company both present and future.

 

  1. Loan from Banks on cash credit accounts, working capital demand loans etc. are secured by (i) a charge by way of hypothecation created / to be created on the current assets of the Company, both present and future (ii) a charge by way of mortgage created / to be created on all fixed assets, present and future, subject to a prior charge on the said fixed assets created / to be created in favour of the Company’s debenture holders / term lenders and (iii) personal guarantees of three Promoter Directors of the Company.

 

  1. Loan from Financial Institution towards working capital demand loans of Rs.390.091 Millions (Previous Year Rs.210.000 Millions) is secured by subservient charge on current assets, and moveable fixed assets of the company and pledge of equity shares of the Company held by promoter directors having market value of Rs. 50.000 Millions  as collateral security and is further secured by pledge on Promoter’s investment in the Company and promoter’s and company’s investment in Alok Industries Limited  to the extent of Rs.275.000 Millions .

 

 

 

Banking Relations :

Satisfactory

 

 

Statutory Auditors:

 

Name :

Gandhi and Parekh

Address :

6, Saraswati Darshan, Opposite New Era Cinema S.V Road, Malad (W), Mumbai- 400 064, Maharashtra, India

Tel. No.: 

91-22-28895246/47

Fax No.: 

91-22-28808769

 

 

Internal Auditors:

 

Name :

N.T Jain and Company

Address :

Jai Hind Bldg No. 1A, 2nd Floor, Block No.3, Dr. A.M Road, Mumbai-400 002, Maharashtra, India

Tel. No.: 

91-22-22050616

Fax No.: 

91-22-22086084

 

 

Subsidiaries :

Grabal Alok International Limited

 

 

Associates:
  1. Alok Apparels Private Limited
  2. Alok Aurangabad Infratex Private Limited
  3. Alok H and  A Limited
  4. Alok Denims (India) Private Limited
  5. Alok Finance Private Limited
  6. Alok Retail (India) Limited
  7. Alok Inc.
  8. Alok International Inc.
  9. Alok European Retail S.R.O
  10. Alok Industries International Limited
  11. Alok Industries Limited.
  12. Alok Infrastructure Limited
  13. Alok Knit Exports Limited
  14. Alok Land Holdings Private Limited
  15. Alok New City Infratex Private Limited
  16. Alok Realtors Private Limited
  17. Alok Textile Traders
  18. Alspun Infrastructure Limited
  19. Ashford Infotech Private Limited
  20. Ashok B. Jiwrajka (HUF)
  21. Ashok Realtors Private Limited
  22. Alok HB Hotels Private Limited
  23. Kesham Developers and  Infotech Private  Limited
  24. Alok HB Properties Private Limited
  25. Aurangabad Textiles and  Apparel Parks Limited
  26. Buds Clothing Company
  27. D. Surendra and  Company
  28. Dilip B. Jiwrajka (HUF)
  29. Gogri Properties Private Limited
  30. Grabal Alok (UK) Limited
  31. Green Park Enterprises
  32. Alspun Infrastructure Limited
  33. Jiwrajka Associates Private Limited
  34. Jiwrajka Investment Private Limited
  35. Mileta, a. s.
  36. New City of Bombay Mfg. Mills Limited
  37. Niraj Realtors and  Shares Private Limited
  38. Nirvan Exports
  39. Nirvan Holdings Private Limited
  40. Pramatex Enterprises
  41. Pramita Creation Private Limited
  42. Surendra B. Jiwrajka (HUF)
  43. Nirvan Builders Private Limited
  44. Springdale Investment and  Technologies Private  Limited
  45. Triumphant Victory Holdings Limited

 

 

CAPITAL STRUCTURE

 

As on 31.03.2010

 

Authorised Capital :

No. of Shares

Type

Value

Amount

100000000

Equity Shares

Rs.10/- each

Rs.1000.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

22485000

Equity Shares

Rs.10/- each

Rs.224.850 Millions

 

Note:

 

Of the above, below mentioned shares were issued during the year 6,50,000 (Previous Year 2,00,000) in previous year equity shares of Rs. 10/- each were issued on conversion of 2.50% Foreign Currency Convertible Bonds (FCCBs) of USD 25000 each at premium aggregating to Rs.21.937 Millions  (previous year 6.750 Millions)

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2010

31.03.2009

31.03.2008

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

224.850

218.350

216.350

2] Share Warrants

0.000

0.000

14.935

3] Share Application Money

0.000

0.000

0.000

4] Reserves & Surplus

1186.662

1089.536

1089.165

5] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

1411.512

1307.886

1320.450

LOAN FUNDS

 

 

 

1] Secured Loans

2258.657

2713.897

2915.398

2] Unsecured Loans

902.800

1103.068

872.800

TOTAL BORROWING

3161.457

3816.965

3788.198

DEFERRED TAX LIABILITIES

165.536

126.135

84.580

 

 

 

 

TOTAL

4738.505

5250.986

5193.228

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

1598.197

1663.171

1148.461

Capital work-in-progress

0.542

33.309

412.426

 

 

 

 

INVESTMENT

539.553

1441.108

1666.037

DEFERREX TAX ASSETS

0.000

0.000

0.000

FOREIGN CURRENCY MONETARY ITEM TRANSLATION ACCOUNT

0.000

79.247

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
381.352

377.689

442.351

 

Sundry Debtors
452.211

424.397

165.741

 

Cash & Bank Balances
2355.568

1336.439

1439.846

 

Other Current Assets
0.000

0.000

0.000

 

Loans & Advances
293.272

268.255

146.111

Total Current Assets
3482.403

2406.780

2194.049

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
818.679

325.767

178.418

 

Other Current Liabilities
17.088

23.296

25.958

 

Provisions
46.423

23.566

23.369

Total Current Liabilities
882.190

372.629

227.745

Net Current Assets
2600.213

2034.151

1966.304

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

4738.505

5250.986

5193.228

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2010

31.03.2009

31.03.2008

 

SALES

 

 

 

 

 

Sales/ Job Work Charges

2435.204

1401.701

1177.284

 

 

Other Income

15.093

51.946

50.746

 

 

TOTAL                                     (A)

2450.297

1453.647

1228.030

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Purchase of Traded Goods

562.544

102.605

0.000

 

 

Raw Material Consumed

670.039

412.647

535.193

 

 

Payments to and Provisions for Employees

99.467

76.888

67.561

 

 

Operational and Other Expenses

453.732

283.675

328.465

 

 

Decrease in Stocks of Finished Goods and Process Stock

30.365

45.973

(85.466)

 

 

TOTAL                                     (B)

1816.147

921.788

845.753

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

634.150

531.859

382.277

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

220.461

212.663

91.256

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

413.689

319.196

291.021

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

159.034

118.017

107.417

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

254.655

201.179

183.604

 

 

 

 

 

Less

TAX                                                                  (H)

92.629

61.647

47.637

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

162.026

139.532

135.967

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

244.050

124.713

84.001

Less/ Add

Excess provision for Dividend of earlier year [including tax on dividend Rs. 0.035 Millions , (previous year Rs.1.174 Millions )

0.000

(0.242)

7.994

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

0.000

0.000

83.000

 

 

Proposed Dividend on Equity Shares

17.988

17.468

17.308

 

 

Corporate Dividend Tax thereon

2.988

2.969

2.941

 

BALANCE CARRIED TO THE B/S

385.100

244.050

124.713

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Export Earnings

1099.385

737.003

NA

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

7.282

2.877

 

 

Components and Spare Parts

10.819

7.382

NA

 

 

Capital Goods

80.495

88.722

 

 

 

Garment

587.971

102.605

 

 

TOTAL IMPORTS

686.567

201.586

NA

 

 

 

 

 

 

Earnings Per Share (Rs.) Basic

7.40

6.40

6.36

 

Earnings Per Share (Rs.) Diluted

6.22

6.40

1.62

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2010

30.09.2010

31.12.2010

31.03.2011

Type

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Net Sales

596.690

754.800

550.460

461.610

Total Expenditure

439.290

588.430

437.760

362.140

PBIDT (Excl OI)

157.400

166.370

112.700

99.470

Other Income

0.300

1.360

5.170

0.590

Operating Profit

157.710

167.730

117.860

100.060

Interest

47.120

44.710

8.200

8.740

PBDT

110.590

123.020

109.670

91.320

Depreciation

40.230

41.840

42.530

42.310

Profit Before Tax

70.360

81.180

67.140

49.020

Tax

23.910

21.480

16.820

10.520

Profit After Tax

46.440

59.690

50.320

38.500

Net Profit

46.440

59.690

50.320

38.500

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2010

31.03.2009

31.03.2008

PAT / Total Income

(%)
6.61

9.60

11.07

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
10.46

14.35

15.60

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
5.01

4.94

5.49

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.18

0.15

0.14

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
2.86

3.20

3.04

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
3.95

6.46

9.63

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Details of Sundry Creditors:

 

 

Particulars

 

31.03.2010

(Rs. in millions)

31.03.2009

(Rs. in millions)

31.03.2008

(Rs. in millions)

Sundry Creditors

 

 

 

Total Outstandings due to micro enterprises and small enterprises

247.744

0.000

0.000

Total Outstandings due to Creditors other than

micro enterprises and small enterprises

570.935

325.767

178.418

Total

818.679

325.767

178.418

 

 

Performance

 

During the year, the Company recorded sales of Rs. 2435.204 Millions and profit before tax of Rs. 254.655 Millions, which reflect a year-on-year increase of 73.73% and 26.58%, respectively. The Company’s exports (including incentives) grew 40.75% over the previous year’s figures to reach Rs. 1134.731 Millions (Rs. 806.193 Millions in 2008-09).

 

Company Performance: Highlights

 

In 2009-10, Grabal Alok Impex Limited (‘Grabal Alok’ or ‘the Company’) grew its topline, expanded export sales and improved both pre-tax and post-tax earnings. The stand-alone financial performance of Grabal Alok Impex Limited for the year ended 31 March 2010 is highlighted below.

 

  • Net Sales for 2009-10 was at Rs. 2435.204 Millions, which represents a year-on-year growth of 73.73% (2008-09 sales: Rs. 1401.701 Millions).

 

  • Export Sales increased by 40.75% over 2009-10 levels to reach Rs. 1134.731 Millions.

 

  • Earnings before Interest, Depreciation, Taxes and Amortisation (EBIDTA) for the year stood at Rs. 634.150 Millions an increase of 19.23% over the previous year (Rs. 531.859 Millions). The three-year CAGR for EBIDTA was at 28.80%.

 

  • Earnings before Interest and Taxes (EBIT) for the year – at Rs. 475.116 Millions – represented 14.81% growth over 2008-09 (Rs. 413.842 Millions).

 

  • Profit before Tax (PBT) grew by 26.58% over 2008-09 to reach Rs. 254.655 Millions (for 2008-09: Rs. 139.532 Millions).

 

  • Profit after Taxes (PAT) was at Rs. 162.026 Millions, representing a growth of 16.12% over 2008-09 (Rs. 201.179 Millions).

 

  • Earning per share (EPS) was Rs. 7.40 during 2009-10 (the previous year’s EPS was Rs. 6.40) – a growth of 15.63% and a 3-year CAGR of 7.53%.

 

  • Return on Net Worth (RONW) for the year was 10.27% vis-ŕ-vis 9.73% of the previous year (9.73%).

 

  • Book Value per Share was Rs. 62.78 – a 4.81% year-on-year growth over 2008-09 (Rs. 59.90 as on 31 March 2009).

 

Economic Overview

 

The World Economy

 

Global economies recovered faster that expected from the recessionary trends of 2008 and 2009. Massive amounts of funds pumped in by governments and central banks, along with fiscal and monetary measures calculated to boost consumer demand and spending have helped most economies to arrest downturns; in some cases, especially in Asia, economies are firmly back on a growth path. According to the International Monetary Fund (IMF), the world economy expanded at an annualised rate of over 5% during the first quarter of 2010; mainly driven by robust Asian growth (Chart A). More importantly, the growth indicators seemed more broad-based, with greater private demand, increasing industrial production, higher consumer confidence and lower unemployment levels in advanced economies. There are, however, concerns of fiscal stability in some economies, notably in Europe, where the growth outlook remains clouded by concerns about the sustainability of sovereign debt in some of the economies1.

 

India

 

The Indian economy grew by 7.4% in 2008-09. India’s growth rate was the second largest among major countries in the world, surpassed only by China with a GDP growth rate of 8.7%. The strong performance of the economy has continued into the first quarter of 2010-11, backed by better industrial production and greater consumer demand. The Index of Industrial Production (IIP) released on 12 July 2010 for May 2010 reflected 11.5% growth compared to the same month of the previous year – the eight consecutive months in which a double digit growth has been witnessed. Monsoon performance in 2010-11 has been better than last year; this is expected to reflect in terms of greater agricultural output and increased consumer spends by agro-based families. Based on these factors, India’s GDP growth estimates have been revised upwards from 8.0% to 8.5%, with an upside bias. Inflationary pressures, however, continue to be worrisome. The Wholesale Price Index (WPI) inflation has been in double digits since February 2010 and headline inflation, as measured by year-on-year variation in WPI, rose to 10.6% in June 2010. To combat inflation, Reserve Bank of India has increased, with immediate effect, the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points from 5.5% to 5.75%; simultaneously, the reverse repo rate has been increased by 50 basis points, from 4% to 4.5%2.

 

Industry Outlook: Textile and Clothing

 

Global textile and apparel trade’ has grown around 6% annually in the last two decades to reach a total of US$ 510 billion. By 2015, at a compounded annual growth rate (CAGR) of 5%, it is expected to grow upto US$ 800 billion. The Indian domestic market continues to see increased demand. In 2009, the total Indian apparel market was estimated to be around US$ 33 billion. The industry has grown 15% annually during the past five years and is expected to reach a market size of US$ 50 billion during the next five years. The growth expectations are based on four factors: (a) an improving economy; (b) the increase in more nuclear families with greater spending power and disposable income; (c) the breadth and depth of penetration of organised retail in Indian markets, especially into Tier 2 and Tier 3 cities; and (d) the increased demand from the hospitality and healthcare sectors. Indian textile exports have been improving after the slowdown of 2008 and 2009. During April 2009 – January 2010, textile exports amounted to US$ 17.37 billion; consequently, the share of textiles as part of India’s total merchandise exports has increased from 11.03% to 12.36%. US imports of textile and apparel have recovered in 2010 after declining in 2009; EU markets, however, are still to recover fully. Over the past few years, there have been two growing trends by global buyers of textiles and apparel. First, to consolidate their purchases with a few chosen suppliers instead of buying from many small vendors, in order to reduce supply chain costs as well as ensure volume and quality. Today, Indian suppliers, with global sized textile units, best manufacturing and technology practices and design capabilities, can meet the demand from global buyers – not just as low cost vendors but as preferred suppliers. Second, global brands are trying to de-risk their buying from one country and spread it over more than one nation. Here again, Indian suppliers, who currently have a relatively low share of the world textile business, tend to benefit. With the Chinese renminbi also appreciating, there is pricing pressure on Chinese products; there are, therefore, opportunities for Indian exports to grow further. Government of India has also been proactive in introducing many initiatives for the growth of the industry. Some of the initiatives include: (a) formalising a National Fibre Policy for raw material development in India; (b) the Skill Development Mission that is expected to train 30 lakh workers over five years; and (c) initiatives to encourage growth of Indian textile exports into new markets in Japan, South Asia, Australia, Latin America and South Africa.

 

For the Indian textile industry, cotton is still the major input material, consisting of approximately 56% of the total fibres and yarn consumed. Hence, the price and availability of cotton has a significant effect on the profitability and efficiency of textile manufacturers. Although India is a ‘cotton surplus’ country, global acreage under cotton has been shrinking. With demand for cotton now picking up, prices of Indian cotton have also been increasing; the average prices of cotton yarn rose by 15 % year-on year till May 20103.

 

Export Sales

 

Subject export sales for 2009-10 grew 40.75% over the previous year to reach Rs. 1134.731 Millions  (Rs. 806.193 Millions  in 2008-09). Although export sales in absolute numbers have increased substantially in 2009-10, exports have decreased as ‘share of business’ vis-ŕ-vis total sales: from 57.52% in 2008- 09 to 46.60% in 2009-10 (Chart E). The decreased share of business can be attributed to the following: (a) a strong domestic demand; and (b) a lower offtake from the countries to which subject exports its products – mainly on account of the effects of the economic slowdown of 2008 and 2009. Subject exports most of its products to the Middle East and Africa – and these economies are now returning to economic growth and increased consumer spends. Hence, it is expected that export sales in 2010-11 will increase, both in value terms as well as a percentage to the overall sales portfolio.

 

Future Prospects

 

The International Monetary Fund (IMF), in its July 2010 World Economic Outlook, has raised the global growth projection for 2010 to 4.6% from its earlier figure of 4.2% – thanks to faster than expected economic recovery in Asian countries. Among the Western economies, though the Euro zone still looks sluggish, there has been positive growth and consumption indicators in the US, where three straight quarters of GDP growth point to a definite ‘coming out’ from recessionary trends. India’s economy has posted strong growth numbers during the first quarter of 2010-11 and is expected to grow GDP by 8.5% or thereabouts in the current financial year. Consumer spending has been going up and given a normal monsoon, which is indicated, rural consumer demand is also expected to grow. India’s large population, a growing number of households with spending power, retail penetration and growth inhospitality and healthcare are all expected to spur demand for textiles and apparel. These represent opportunities for subject as well. The Company is well poised to capitalise on the growth trends, given its large capacity, sourcing advantages and market reach and reputation – not only in India but in its overseas markets as well. On the retail front, Grabal Alok (UK) Limited operations have started to turn around. The store refurbishment and rebranding program is showing positive results – in fact, in some of these rebranded stores, sales have increased by as much as 50% over previous figures. Also, the optimising of operational costs and increasing efficiencies have meant that the ‘middle line’ has now shrunk: and that is reflected in a positive PBT during the first quarter of 2010-11. Given that the UK economy is now starting to recover from the recessionary effects that it suffered from over the past two years, the prospects of GAUKL and its retail brand are positive in the near-term future.

 

 

 

 

CONTINGENT LIABILITIES IN RESPECT OF

 

PARTICULAR

31.03.2010

(Rs. in millions)

31.03.2009

(Rs. in millions)

Bank Guarantees issued by bankers

40.907

39.264

Corporate Guarantees Given to Banks on behalf of associates in

connection with credit facilities availed( Term Loan of USD 70,00,000)

315.980

2256.847

Irrecoverable undertaking of currency movement on Loan of USD

3.5 Million taken by an associate Company (GBP 6.891 Million)

0.000

502.085

 

Fixed Assets:

 

  • Land Leasehold
  • Land Freehold
  • Factory Building
  • Plant and Machinery
  • Electrical Installation
  • Office Premises
  • Computer and Peripherals
  • Office Equipments
  • Furniture and Fixtures
  • Vehicles
  • Tools and Equipments

 

 

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31ST MARCH 2011

 

Rs. in Millions

Particular

4th Quarter Ended

Year Ended

 

31.03.2011

{3 Months Provisional}

31.03.2011

{12 Months Provisional}

 

 

 

Net Sales / Income from operations

461.612

2363.555

Other Operating Income

0.593

7.422

Total Income

462.205

2370.977

Expenditure

 

 

(Increase) / Decrease in stock in trade and work in progress

(0.831)

(10.563)

Consumption of raw materials

234.477

1350.113

Employees cost

33.207

123.402

Other expenditure

95.281

408.466

Profit Before Interest and Depreciation

100.071

499.559

Depreciation

42.308

166.903

Interest

8.743

64.976

Profit (+)/Loss(-) from Ordinary Activities before tax

49.020

267.680

Provision for tax Current

5.506

81.264

MAT Credit

--

--

Deferred

5.016

(8.529)

Fringe Benefit Tax

--

--

Net Profit (+)/Loss(-) from Ordinary Activities after tax

38.498

194.945

Extra ordinary items (Net of tax)

--

--

Net Profit (+) / Loss (-) for the year period

38.498

194.945

Paid up equity share capital (Face value of Rs.10/- per share)

224.850

224.850

Reserves excluding revaluation reserves as per balance sheet of previous accounting year

1186.662

1186.662

Earning per share (EPS)

 

 

 (a) Basic and diluted EPS before Extraordinary items

for the period, for the year to date and for the

previous year (not to be annualised)

1.71

8.67

(a) Basic and diluted EPS before Extraordinary items

for the period, for the year to date and for the

previous year (not to be annualised)

0.73

4.16

Public shareholding

 

 

          Number of shares

11774766

11774766

          Percentage of shareholding

52.37

52.37

Promoters and Promoters group Shareholding-

 

 

a) Pledged /Encumbered

 

 

Number of shares

3147900

3147900

Percentage of shares (as a % of total shareholding of the promoter and promoter group)

29.39

29.39

Percentage of shares (as a % of total share capital of the company)

14.00

14.00

b) Non  Encumbered

 

 

Number of shares

7562334

7562334

Percentage of shares (as a % of total shareholding of the promoter and promoter group)

70.61

70.61

Percentage of shares (as a % of total share capital of the company)

33.63

33.63

 

Note:

 

  1. The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors of the Company at their meeting held on 30 April 2011. The same are subject to Limited Review by the statutory auditors of the Company.

 

  1. Export Sales for the quarter was Rs. 284.335 Millions, a marginal decrease of 13.01% over the corresponding quarter of the previous year (Rs. 326.855 Millions). Total Sales have decreased by 34.26% over the corresponding quarter of the previous year to reach Rs. 461.612 Millions.

 

  1. No. of investor complaints at the beginning of the quarter were NIL, received during the quarter were NIL, disposed off during the quarter were NIL and lying unsolved at the end of the quarter were NIL.

 

  1. The entire operations of the Company relate to only one segment viz., textiles. The risk and returns are generally perceived by the management to be the same for all units and thus treated as one segment.

 

  1. The figures of previous quarter/year have been reclassified/ regrouped wherever necessary to correspond with those of the current quarter/year.

 

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.44.93

UK Pound

1

Rs.72.43

Euro

1

Rs.63.62

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

6

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

6

--LEVERAGE

1~10

5

--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

 

51

 

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

-

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.