MIRA
INFORM REPORT
|
Report Date : |
02.04.2012 |
IDENTIFICATION DETAILS
|
Name : |
D C M LIMITED DCM TEXTILES - A DIVISION OF D C M LIMITED |
|
|
|
|
Registered
Office : |
|
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
26.03.1889 |
|
|
|
|
Com. Reg. No.: |
55-00004 |
|
|
|
|
Capital Investment
/ Paid-up Capital : |
Rs.173.790 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L74899DL1889PLC000004 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
DELD00282C |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchange. |
|
|
|
|
Line of Business
: |
The business segment comprise the following: Textiles – Yarn
manufacturing IT Services – IT
Infrastructure services and software development. Real Estate –
Development at the Company’s real estate site at Bara Hindu Rao / Kishan
Ganj, |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (50) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 6300000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Usually correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well established and reputed company having fine track.
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.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered / Corporate / Branch Office : |
Vikrant Tower, 4 Rajendra Place, New Delhi – 110008, India |
|
Tel. No.: |
91-11-41539177-80 |
|
Fax No.: |
91-11-25765214 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Plant and Administration Office : |
Post BoxNo.59, Near Mela Ground, Hisar-125001, Haryana, India |
|
Tel. No.: |
91-1662-259801 to 259804 |
|
Fax No.: |
91-1662-259805/ 259160 |
|
E-Mail : |
|
|
|
|
|
Marketing Office
: |
Located at : ·
Hisar |
DIRECTORS
As on 31.03.2011
|
Name : |
Dr. Surendra Nath Pandey |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Naresh Kumar Jain |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Jitendra Tuli |
|
Designation : |
Director |
|
|
|
|
Name : |
Prof. J. S. Sodhi |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sudhin Roy Chowdhury |
|
Designation : |
Director (Nominee - LIC) |
KEY EXECUTIVES
|
Name : |
Mr. Bhabagrahi Pradhan |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2011
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
19,237 |
0.11 |
|
|
7,731,793 |
44.49 |
|
|
7,751,030 |
44.60 |
|
|
|
|
|
Total
shareholding of Promoter and Promoter Group (A) |
7,751,030 |
44.60 |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
67,533 |
0.39 |
|
|
8,850 |
0.05 |
|
|
2,964 |
0.02 |
|
|
1,716,482 |
9.88 |
|
|
10,000 |
0.06 |
|
|
1,805,829 |
10.39 |
|
|
|
|
|
|
2,194,624 |
12.63 |
|
|
|
|
|
|
4,042,390 |
23.26 |
|
|
1,486,175 |
8.55 |
|
|
98,989 |
0.57 |
|
|
2,372 |
0.01 |
|
|
96,617 |
0.56 |
|
|
7,822,178 |
45.01 |
|
Total Public
shareholding (B) |
9,628,007 |
55.40 |
|
Total (A)+(B) |
17,379,037 |
100.00 |
|
(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
Total
(A)+(B)+(C) |
17,379,037 |
- |
BUSINESS DETAILS
|
Line of Business : |
The business segment comprise the following: Textiles – Yarn
manufacturing IT Services – IT
Infrastructure services and software development. Real Estate – Development
at the Company’s real estate site at Bara Hindu Rao / Kishan Ganj, Delhi. |
||||||||
|
|
|
||||||||
|
Products : |
|
PRODUCTION STATUS AS ON 31.03.2011
|
Particulars |
Unit |
Licensed Capacity@ |
Installed # Capacity |
|
Textiles - yarn |
Spindles Nos. |
– |
74,436 |
|
Particulars |
Unit |
Actual
Production* |
|
Textiles - yarn |
M.T. |
15,441 |
Notes:
@ Licensed capacity
is no more applicable to the textile industry.
# Installed
capacity is as certified by the officials of the Company and relied upon by the
Auditors, being a technical matter.
* Varies based on production mix and specification.
GENERAL INFORMATION
|
No. of Employees : |
Not Available |
||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||
|
Bankers : |
·
Punjab National Bank ·
State Bank of Bikaner and Jaipur |
||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||
|
Facilities : |
Notes: Secured Loans
1. Debentures Nil (Previous year: 3,717,971) - aggregating Rs.
Nil (Previous year Rs. 89.434 Millions) Part-B of Rs. 135 each being the
non-convertible portion of 16% Secured Partly Convertible Debentures,
as restructured in terms of the Scheme of Restructuring and Arrangement
approved by the Hon’ble Delhi High Court vide its order dated October
29, 2003 under Section 391 – 394 of the Companies Act, 1956 and subsequent modification
thereto vide Delhi High Court order
dated April 28, 2011, redeemable, with interest, over a period of seven
years. In respect of such debentures aggregating Rs. 20.925 Millions
(Previous year Rs. 18.144 Millions) an amount equivalent thereto representing
amounts due but not claimed by concerned debenture holders has been deposited
in a designated current account maintained with a schedule bank for this
purpose. The unclaimed amount in respect of matured debentures has been
included under the head “Unclaimed matured debentures including interest
thereon”. 2. Banks Cash credit,
overdrafts, working capital demand loans and term loans include: – cash
credit/overdraft and working capital demand loan facilities aggregating Rs.
12,00.177 Millions (Previous year Rs. 8,12.571 Millions) and other non-fund
based facilities from a bank, are secured by way of hypothecation of stocks /
stores and book debts, both present and future. These are further secured by
equitable mortgage of immovable assets, both present and future, and first
charge, ranking pari-passu, by way of hypothecation of existing as well as
future block of movable assets pertaining to the Textile Division at Hissar. – working
capital demand loans aggregating Rs. 4,75.000 Millions (Previous year Rs.
1,00.000 Million) from banks are secured by way of pledge of cotton stocks,
pertaining to the Textile Division at Hissar. – cash credit
facilities relating to IT Division, aggregating Rs. 45.778 Millions (Previous
year Rs. 43.962 Millions) and other non-fund based facilities from a bank,
are secured by way of first charge/hypothecation of raw materials,
stock-in-progress, finished goods, stores, spares, book debts and other
assets of the Division (both present and future), and by way of first charge on
office property at Hyderabad. The above facility is further secured by way of
first charge created / to be created on other fixed assets of the Division. – term loans
aggregating Rs. 4,55.785 Millions (Previous year Rs. 4,32.498 Millions) are
secured by first charge by way of hypothecation, ranking pari-passu with the
charge created for availing cash credit, overdraft and working capital demand
loan facilities described above, on existing as well as future block of
movable assets and an equitable mortgage, by deposit of title deeds, of all
the immovable assets, both present and future, pertaining to the Textile
Division at Hissar (due within a year Rs. 83.475 Millions, Previous year Rs.
64.350 Millions). – Corporate loan
of Rs. 2,288.82 Millions (Previous year Rs. Nil) secured by first charge by
way of hypothecation, ranking pari-passu with the charge created for availing
cash credit, overdraft and working capital demand loan facilities and term
loans described above, on existing as well as future block of movable assets
and an equitable mortgage, by deposit of title deeds, of all the immovable
assets, both present and future, pertaining to the Textile Division at Hissar
(due within a year Rs. 83.600 Millions, Previous year Rs. Nil). 3. Others - Long term – Rs. 1,000.00
Millions (Previous year: Rs. 2,00.000 Millions) secured by registered
mortgage of farm house land situated at Rajokri, New Delhi, admeasuring 2.50
acres, owned by a promoter group company and is also guaranteed by the Chief
Financial and Operating Officer of the Company (due within a year: Rs.
1,00.000 Millions, Previous year: Rs. 1,00.000 Millions). – Rs. 6.311
Millions (Previous year: Rs. 6.922 Millions) relate to assets purchased under
hire purchase/financing arrangements with banks and are secured by way of
hypothecation of the specified assets (due within a year: Rs. 2.388 Millions,
Previous year: Rs. 2.588 Millions). 4. Others - Short term – Rs. 1,00.000
Million (Previous year: Rs. 1,00.000 Million) secured by pledge of 2,000,000
equity shares of DCM Engineering Limited on a margin of 100% over the
outstanding loan amount. Unsecured Loans – Fixed deposits aggregating Rs. Nil (Previous year Rs. 0.055
Million), guaranteed by the Chief Executive Officer of the Company. |
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
A.F Ferguson and Company Chartered Accountants |
|
Address : |
New Delhi, India |
|
|
|
|
Subsidiaries
(enterprises where control exists) : |
·
DCM Finance and Leasing Limited (DFL) ·
DCM Textiles Limited (DTL) ·
DCM Engineering Limited (DEL) ·
DCM Tools and Dies Limited (DTDL) ·
DCM Realty Investment and Consulting Limited
(DRICL) |
|
|
|
|
Joint venture : |
Purearth Infrastructure Limited (PIL) |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
60000000 |
Ordinary shares |
Rs.10/- each |
Rs.600.000 Millions |
|
320000 |
6th Cumulative redeemable preference shares |
Rs.25/- each |
Rs.8.000 Millions |
|
3680000 |
Preference shares |
Rs.25/- each |
Rs.92.000 Millions |
|
1000000 |
Cumulative convertible preference shares |
Rs.100/- each |
Rs.100.000 Millions |
|
|
TOTAL |
|
Rs.800.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
17379037 |
Ordinary shares |
Rs.10/- each |
Rs.173.790 Millions |
|
|
Less : Calls in arrear |
|
Rs.0.031 Million |
|
|
TOTAL |
|
Rs.173.759
Millions |
Notes:
1. Of the issued, subscribed
and paid-up capital, before giving effect to the Scheme of Arrangement dated
April 16, 1990 (whereby the share capital was reduced to Rs.57.550 Millions
from Rs.23,02,03,020 ), 1,40,90,577 ordinary shares of Rs.10 each represented
bonus shares issued by capitalisation of profits/ reserves.
2. 11,623,961
ordinary shares of Rs.10 each have been issued on July 31, 1993 on conversion
of the convertible portion (Part A) of 16 % Partly Convertible Debentures.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
173.759 |
173.759 |
173.759 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
1411.004 |
1203.872 |
692.619 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
(145.707) |
|
|
NETWORTH |
1584.763 |
1377.631 |
720.671 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2611.933 |
1784.863 |
1806.101 |
|
|
2] Unsecured Loans |
44.292 |
45.257 |
123.017 |
|
|
TOTAL BORROWING |
2656.225 |
1830.120 |
1929.118 |
|
|
DEFERRED TAX LIABILITIES |
41.228 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
4282.216 |
3207.751 |
2649.789 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
768.799 |
694.888 |
748.748 |
|
|
Capital work-in-progress |
79.140 |
112.364 |
47.015 |
|
|
|
|
|
|
|
|
INVESTMENT |
702.034 |
680.332 |
658.350 |
|
|
DEFERREX TAX ASSETS |
0.000 |
56.631 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1640.901
|
897.145 |
532.066 |
|
|
Sundry Debtors |
1485.551
|
1316.831 |
1768.657 |
|
|
Cash & Bank Balances |
102.059
|
94.009 |
132.569 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
686.033
|
562.272 |
318.175 |
|
Total
Current Assets |
3914.544
|
2870.257 |
2751.467 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
729.380
|
676.640 |
714.566 |
|
|
Other Current Liabilities |
84.826
|
277.150 |
701.636 |
|
|
Provisions |
368.095
|
252.931 |
139.589 |
|
Total
Current Liabilities |
1182.301
|
1206.721 |
1555.791 |
|
|
Net Current Assets |
2732.243
|
1663.536 |
1195.676 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
4282.216 |
3207.751 |
2649.789 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
3109.054 |
2385.671 |
2138.571 |
|
|
|
Other Income |
48.495 |
77.290 |
136.823 |
|
|
|
TOTAL (A) |
3157.549 |
2462.961 |
2275.394 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Manufacturing and other expenses |
2538.033 |
2185.580 |
2046.746 |
|
|
|
Exceptional Items |
0.000 |
(466.631) |
0.000 |
|
|
|
TOTAL (B) |
2538.033 |
1718.949 |
2046.746 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
619.516 |
744.012 |
228.648 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
137.333 |
77.217 |
75.121 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
482.183 |
666.795 |
153.527 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
95.729 |
78.363 |
82.230 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
386.454 |
588.432 |
71.297 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
128.826 |
(68.528) |
10.548 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H)
(I) |
257.628 |
656.960 |
60.749 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
754.080 |
(145.707) |
(206.456) |
|
|
|
DEBENTURE
REDEMPTION RESERVE WRITTEN BACK |
57.602 |
242.827 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
26.000 |
0.000 |
0.000 |
|
|
|
Proposed Dividend |
43.448 |
0.000 |
0.000 |
|
|
|
Corporate Dividend Tax |
7.048 |
0.000 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
992.814 |
754.080 |
(145.707) |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB basis |
1408.848 |
594.950 |
596.219 |
|
|
|
Software / Services export |
4.630 |
3.601 |
2.661 |
|
|
|
Overseas offices income |
346.808 |
359.639 |
305.412 |
|
|
|
Other earnings |
0.000 |
0.000 |
0.153 |
|
|
TOTAL EARNINGS |
1760.286 |
958.190 |
904.445 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
0.000 |
2.447 |
0.000 |
|
|
|
Components & Spares parts |
1.705 |
0.832 |
0.405 |
|
|
|
Capital Goods |
41.356 |
0.000 |
0.000 |
|
|
TOTAL IMPORTS |
43.061 |
3.279 |
0.405 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
14.82 |
37.81 |
3.50 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 1st Quarter |
30.09.2011 2nd Quarter |
31.12.2011 3rd Quarter |
|
|
UnAudited |
UnAudited |
UnAudited |
|
Net Sales |
951.800 |
791.300 |
938.600 |
|
Total Expenditure |
1200.000 |
753.700 |
765.000 |
|
PBIDT (Excl OI) |
(248.200) |
37.600 |
173.600 |
|
Other Income |
46.900 |
1.500 |
2.200 |
|
Operating Profit |
(201.300) |
39.100 |
175.800 |
|
Interest |
61.900 |
52.800 |
41.000 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
(263.200) |
(13.700) |
134.800 |
|
Depreciation |
23.400 |
25.800 |
24.700 |
|
Profit Before Tax |
(286.600) |
(39.500) |
110.100 |
|
Tax |
(104.300) |
(20.000) |
38.600 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
(182.300) |
(19.500) |
71.500 |
|
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 |
(182.300) |
(19.500) |
71.500 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
8.16
|
26.67 |
2.67 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
12.43
|
24.66 |
3.33 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
8.25
|
16.51 |
2.04 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
24.39
|
0.43 |
0.09 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
2.42
|
2.20 |
4.84 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.31
|
2.38 |
1.77 |
LOCAL AGENCY FURTHER INFORMATION
OPERATIONS OVERVIEW
Textile Division
The Textile Division of the company is located
at Hisar in Haryana. It is an ISO9001 certified unit with a cotton yarn
capacity of 74436 spindles. During the year, the turnover of the division has
increased to Rs. 2718.300 Millions from Rs. 20.225 Millions last year recording
a growth of 34.4% (approx). The division has performed well because of strong
cotton yarn prices, operational efficiency and control of operational cost
during the financial year.
The restrictions imposed by the Government of
India on export of cotton yarn in the last quarter of the financial year, has
hampered the volume growth of the division.
Besides expanding its export market by
introducing value added products the Division is also focusing to broaden the
domestic customer base by developing direct customers. During the year, the
division has initiated modernization projects of its plant to enhance
efficiency and add further value to its products.
IT Division
The domestic operations have shown a healthy
growth due to maturity of business associations and flow of recurring orders
from large domestic IT players. The division is an established player in data
center management business with specialization in managing different systems,
storage devices and databases. This is expected to open future opportunities
for the division in providing specialized data center services to the fast
growing small and medium enterprises in domestic market.
However, the Operating Profit of the division
was adversely affected because the US onsite business of the division has
underperformed during the year on account of extraordinary employee payouts,
payment against past settlements, exceptional attritions and lower fresh order
booking since order of major customers is put on hold.
MANAGEMENT DISCUSSION AND ANALYSIS
TEXTILE DIVISION
Industry Structure and Developments
The Indian Textile industry occupies an
important place in the economy of the country because of its contribution to
the industrial output, employment generation and foreign exchange earnings.
India at this juncture, with large cotton
availability and good scope to increase the yield of cotton per hectare, has
the additional advantage of skilled labour and management. Because of these
factors, one can safely conclude that the growth of cotton production in India
will intensify in the coming years.
However, level of competitiveness and growth
of textile industry hinges more on Government policies than on operational
factors of the textile industry. For instance, restriction on export of cotton
yarn and suspension of Technology Upgradation Fund (TUF) subsidy have serious
potentials to impact the growth of the textile industry.
Outlook
The Indian Textile Industry is one of the
matured and leading textile industries in the world. The textiles sector is a
major contributor to the Indian economy in terms of gross domestic product,
industrial production and the country’s total export earnings. India earns
about 27 per cent of its total foreign exchange through textiles exports.
Besides, the Indian Textile industry contributes 14 per cent of the total
industrial production of the country. This sector provides employment to over
35 million people directly and it is expected that the textile industry will
generate new jobs during the ensuing years.
Although the outlook for the textile industry
in buoyant, increased cost of raw material, more dependence on exports and
stagnation/weak exports market are some of the reasons which may affect the
textile industry. The globalization has also intensified the competition.
Financial and Operational Performance
The Textile division of the company has
performed well during the year as cotton yarn prices jumped up considerably due
to picking up of demand. However, due to restrictions imposed by Government of
India on exports during the last quarter the capacity utilization during the
year was affected adversely.
Manpower Development
The knowledge, competency and skills of the
employees are being continuously developed to support them to become effective
leaders in their domain. Training of the employees is a continuous and
integrated process. Training is imparted according to the competency of each
employee. Training and mentoring programs are designed accordingly. The company
believes in investing today in training to create tomorrow’s leader. The
process of TQM drive is in full swing, so as to promote the culture of
excellence.
IT DIVISION
Industry Overview
The Indian information technology (IT)
industry has played a key role in putting India on the global map and is
estimated to become a US $ 225 billion industry by 2020. The Industry, which is
still on the path of recovery from a global meltdown, earns 80 to 85 percent of
its export income from software services and back office operations from the US
and European markets. The industry has witnessed a turnaround in current fiscal
2010-11 by posting a double-digit growth largely due to renewed investments by
global companies across verticals such as IT infrastructure, software and back
office services. The industry’s annual growth had plunged to 6 percent in
2009-10 after recording a sound 25 percent increase during the previous four
years. It is estimated that the export revenues will cross US $ 59 billion in
FY2011 and shall constitute 26 percent out of total exports from India. Within
exports, IT Services segment was the fastest growing segment, growing by 22.7
per cent over FY 2010, and aggregating export revenues of US $33.5 billion,
accounting for 57 per cent of total exports.
The year started on a positive note, with the
major Indian IT companies posting good profits, contrary to earlier indications
of a drop in revenues. The industry players gave a positive outlook on the
hiring scenario in the country, as well as in other offshore centers. As the
year progressed, core markets like the US along with emerging verticals and
geographic segments, witnessed a significant increase in demand, resulting in a
5.5 per cent jump in the overall industry revenues.
However, one of the adverse impacts of the
global recession was the rise in protectionist sentiments across major markets
like the US and Europe. In August, the US House of representatives passed a
Bill that affected a steep hike in visa fees for skilled workers. The move was
aimed at raising US $ 600 million to beef up security along the US-Mexico
border, but would also result in US $ 200 million additional visa costs for the
Indian companies every year. Earlier in the year, US announced that tax
benefits would be taken away from American companies that ship jobs overseas.
Though the US, which is the largest
contributor to the Indian IT sector’s revenues, saw demand returning, the slowdown
in Europe continued. Currency fluctuation and a significant drop in new orders
from the European region, the second largest market for the Indian IT players,
added to the woes of the IT companies. According to NASSCOM, forex fluctuation
has dented India’s competitiveness and “steps need to be taken to address
India’s increased risk perception”.
Opportunities and Outlook
In 2011, technologies such as cloud computing
and smart phones made the critical transition from early adopter status to the
first stage of mainstream acceptance.
As a result, the IT industry will revolve more
and more around the build-out and adoption of mobility, cloud-based application
and service delivery, value generating overlays of social business and
pervasive analytics. In addition to creating new markets and opportunities,
this restructuring will overthrow nearly every assumption about who the
industry leaders are and how they establish the mainstream leadership. The
platform transition will be fueled by another solid year of recovery in IT
spending. IDC forecast worldwide IT spending will be $1.6 trillion, an increase
of 5.7% over 2010.
Meanwhile, social business software has gained
significant momentum in enterprises over the past 18 months and this trend is
expected to continue. IDC forecasts a compound annual growth rate of 38%
through 2014. In a sure sign that social business has hit the mainstream, IDC
expects 2011 to be a year of consolidation as the major software vendors
acquire social software providers to jump-start or increase their social
business footprint.
What really distinguishes the year ahead is
that these disruptive technologies are finally being integrated with each other
– cloud with mobile, mobile with social networking, social networking with
‘big-data’ and real time analytics. As a result, these once emerging
technologies can no longer be invested in, or managed, as sandbox efforts
around the edges of the market. Instead, they are rapidly becoming the market
itself. This is throwing up a lot of challenges and opportunities, especially
for companies’ like theirs.
The growth of these technologies will make the
IT Infrastructure more complex. How the complexity evolves will need to be seen
as the model matures. However as the complexity increases, the need for
services of the type DCM provides shall also increase. The Division is keeping
an eye on the type of models its customers are wanting and willing to use, and
will build skills accordingly.
Outsourcing of work to low cost developing
nations is growing rapidly in spite of the constant challenges it faces from
the government and lawmakers of developed countries. Last 6 years have seen
India become the Outsourcing hub of the world and trend seems to be continuing.
Within the areas of IT services growth, the IT
division’s expertise lies in doing Systems’ Administration. This expertise is
very specific niche area and few companies specialize here. This niche would be
about 0.5-1% of the overall IT services market. In this market they have
painstakingly built a positioning in the mind of customers for Unix and Storage
services so that they can demand a premium.
The Division’s domain expertise includes a
diverse knowledge of systems and technologies. Enterprises can benefit by
leveraging on the Division’s robust global delivery model, proven
methodologies, standardized tools and mature processes for enterprise
infrastructure management services (IMS). DCM offers focused solutions in core
infrastructure areas and leverages its proven IT infrastructure tools and
methodologies to design solutions that are closely aligned to the client’s
business strategy.
Financial and Operations Overview:
The India centric operations have shown a
healthy growth, during the year. Customer associations with most large IT Service
providers have matured and recurring orders are now being received. However the
Overseas operations under performed on account of premature order closures and
attrition. In addition, the direct costs increased disproportionately thereby
adversely affecting margins. Corrective steps to balance costs and improve the
sales effort have already been initiated and should start yielding positive
results in the current year.
The division has also established itself in
data center management business with specialization in managing different
systems, storage devices and databases. This is expected to open future
opportunities for the division in providing specialized data center services to
the fast growing small and medium enterprises in India.
Contingent liabilities
not provided for: As on 31.03.2011
Claims not acknowledged as debts: *
– Income–tax matters Rs. 4.122 Millions
– Sales tax matters Rs. Nil
– Service tax Rs. 0.484 Million
– Customs duty Rs. 12.55
Millions
– Employees’ claims (to the extent ascertained) Rs. 4.452 Millions
– Property tax Rs. 80.062
Millions
– Others Rs. 23.686 Millions
– Uncalled liability on shares partly paid Rs. Nil
* All the above
matters are subject to legal proceedings in the ordinary course of business.
The legal proceedings, when ultimately concluded will not, in the opinion of
management, have a material effect on the results of operations or financial
position of the Company.
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.51.16 |
|
|
1 |
Rs.81.80 |
|
Euro |
1 |
Rs.68.34 |
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 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
50 |
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.