MIRA
INFORM REPORT
|
Report Date : |
02.04.2012 |
IDENTIFICATION DETAILS
|
Name : |
PATSPIN INDIA LIMITED |
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Registered
Office : |
3rd Floor, Palal Tower, Ravipuram, M |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
20.09.1991 |
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Com. Reg. No.: |
09-006194 |
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Capital
Investment / Paid-up Capital : |
Rs.379.200 Millions |
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CIN No.: [Company Identification
No.] |
L18101KL1991PLC006194 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
CHNP00626D CHNP00292F |
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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
: |
Manufacturers and Exporter of Cotton Yarn and Cotton Fabrics |
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No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
B (36) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Maximum Credit Limit : |
USD 2120000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. The company
has been successful in wiping off the accumulated losses of the previous
year. The company has achieved a good turnover and profit on the current
year. Trade relations are reported as fair. Business is active. Payments are
reported to be slow but correct. The company can be considered for business dealings with slight
cautions. |
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) |
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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 |
LOCATIONS
|
Registered Office : |
3rd Floor, Palal Tower, Ravipuram, M |
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Mobile No.: |
91-484-2371822/2366495/2354708 |
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Fax No.: |
91-484-2311007/2370512/2370812 |
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E-Mail : |
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Website : |
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Corporate Office : |
43, Mittal Chambers, 228, Nariman Point, Mumbai – 400021, |
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Tel. No.: |
91-22-22021003/22028246 |
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Fax No.: |
91-22-22874144 |
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Factory 1 : |
5/345, Patodia Nagar, |
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Factory 2 : |
S. F. No. 190 and 191, |
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Secretarial Office : |
5th Floor, Palal Towers, Ravipuram, |
DIRECTORS
As on 31.03.2011
|
Name : |
Mr. B. K. Patodia |
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Designation : |
Chairman |
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Name : |
Mr. N K Bafna |
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Designation : |
Director |
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Name : |
Mr. B L Singhal |
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Designation : |
Director |
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Name : |
Mr. R Rajagopalan |
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Designation : |
Director |
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Name : |
Mr. Rajen K Mariwala |
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Designation : |
Director – Nominee of ITOCHU Corporation |
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Name : |
Mr. Yoichi Ikezoe |
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Designation : |
Director – Nominee of ITOCHU Corporation |
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Name : |
Mr. Keisuke Oba |
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Designation : |
Alternate to yoshikazu Ono |
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Name : |
Mr. T Pius Joseph |
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Designation : |
Director – Nominee of KSIDC |
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Name : |
Mr. Umang Patodia |
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Managing Director |
KEY EXECUTIVES
|
Name : |
Abhilash N A |
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Designation : |
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 |
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80,350 |
0.26 |
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17,016,568 |
55.03 |
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17,096,918 |
55.29 |
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3,000,000 |
9.70 |
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3,000,000 |
9.70 |
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Total
shareholding of Promoter and Promoter Group (A) |
20,096,918 |
65.00 |
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(B) Public Shareholding |
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2,600 |
0.01 |
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4,700 |
0.02 |
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1,100 |
- |
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8,400 |
0.03 |
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1,235,920 |
4.00 |
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5,956,606 |
19.26 |
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3,221,127 |
10.42 |
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401,029 |
1.30 |
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251,209 |
0.81 |
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149,820 |
0.48 |
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10,814,682 |
34.98 |
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Total Public
shareholding (B) |
10,823,082 |
35.00 |
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Total (A)+(B) |
30,920,000 |
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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- |
- |
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- |
- |
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Total
(A)+(B)+(C) |
30,920,000 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs. 1 lakhBUSINESS DETAILS
|
Line of Business : |
Manufacturers and Exporter of Cotton Yarn and Cotton Fabrics |
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Products : |
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PRODUCTION STATUS
As on 31.03.2011
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Particulars |
Unit |
Installed
Capacity |
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Spinning |
(in spindles) |
111,024 |
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Knitting |
(in tons) |
1,008 |
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Particulars |
Unit |
Actual
Production |
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Yarn |
(Lac Kgs.) |
153.87* |
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Knitted Fabric |
(Tons) |
233.61 |
* includes captive consumption for fabrics 2.31 lacs Kgs
(Previous year 1.60 lacs Kgs)
GENERAL INFORMATION
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No. of Employees : |
Not Available |
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Bankers : |
·
Central Bank of ·
State Bank of ·
Export – Import Bank of · State Bank of Travancore · IDBI Bank Limited · The Karur Vysya Bank Limited · Oriental Bank of commerce · Canara Bank ·
Bank of |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
M. S. Jagannathan and Visvanathan Chartered Accountants |
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Address : |
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Legal Advisors : |
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Name : |
Menon and Pai |
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Address : |
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Associates: |
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Enterprises/Entities
having common Key Management Personnel : |
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CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
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|
400000000 |
Equity Shares |
Rs.10/- each |
Rs.400.000 Millions |
|
2500000 |
Preference Shares |
Rs.100/- each |
Rs.250.000 Millions |
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|
Rs.650.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
|
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|
30920000 |
Equity Shares |
Rs.10/- each |
Rs.309.200
Millions |
|
700000 |
Preference Shares |
Rs.100/- each |
Rs.70.000
Millions |
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|
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|
Rs.379.200 Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
379.200 |
354.200 |
309.200 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
149.916 |
146.828 |
146.828 |
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4] (Accumulated Losses) |
0.000 |
(250.361) |
(209.732) |
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NETWORTH |
529.116 |
250.667 |
246.296 |
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LOAN FUNDS |
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1] Secured Loans |
2922.833 |
2884.768 |
2795.653 |
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2] Unsecured Loans |
49.450 |
2.500 |
0.000 |
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TOTAL BORROWING |
2972.283 |
2887.268 |
2795.653 |
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DEFERRED TAX LIABILITIES |
181.098 |
45.335 |
65.769 |
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TOTAL |
3682.497 |
3183.270 |
3107.718 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
2323.567 |
2443.724 |
2618.598 |
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Capital work-in-progress |
0.000 |
0.416 |
0.356 |
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INVESTMENT |
0.032 |
0.032 |
0.032 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
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Inventories |
1179.043
|
602.107 |
509.517 |
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Sundry Debtors |
163.210
|
159.826 |
83.859 |
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Cash & Bank Balances |
65.591
|
107.718 |
63.077 |
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Other Current Assets |
2.364
|
10.635 |
0.668 |
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Loans & Advances |
242.329
|
213.875 |
265.509 |
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Total
Current Assets |
1652.537
|
1094.161 |
922.630 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
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Sundry Creditors |
238.993
|
272.328 |
349.660 |
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Other Current Liabilities |
54.646
|
82.735 |
84.238 |
|
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Provisions |
0.000
|
0.000 |
0.000 |
|
Total
Current Liabilities |
293.639
|
355.063 |
433.898 |
|
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Net Current Assets |
1358.898
|
739.098 |
488.732 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
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TOTAL |
3682.497 |
3183.270 |
3107.718 |
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PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
4234.421 |
3019.759 |
2225.565 |
|
|
|
Other Operating Income |
0.000 |
9.980 |
0.000 |
|
|
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Other Income |
2.080 |
5.681 |
0.007 |
|
|
|
TOTAL (A) |
4236.501 |
3035.420 |
2225.572 |
|
|
|
|
|
|
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Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials |
2873.338 |
1910.469 |
1537.515 |
|
|
|
Personnel Expenses |
165.886 |
138.762 |
138.362 |
|
|
|
Manufacturing Expenses |
370.542 |
348.352 |
297.426 |
|
|
|
Sales and Distribution Expenses |
128.337 |
97.464 |
105.728 |
|
|
|
Other Expenses |
38.781 |
87.062 |
200.240 |
|
|
|
|
|
|
2279.271 |
|
|
|
Increase/ Decrease in Stock |
(125.952) |
108.233 |
(106.016) |
|
|
|
TOTAL (B) |
3450.932 |
2690.342 |
2173.255 |
|
|
|
|
|
|
|
|
Less |
PROFIT/(LOSS)
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
785.569 |
345.078 |
52.317 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
197.840 |
206.170 |
226.969 |
|
|
|
|
|
|
|
|
|
|
PROFIT/(LOSS)
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
587.729 |
138.908 |
(174.652) |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
198.517 |
199.971 |
187.207 |
|
|
|
|
|
|
|
|
|
|
PROFIT/(LOSS)
BEFORE TAX (E-F) (G) |
389.212 |
(61.063) |
(361.859) |
|
|
|
|
|
|
|
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|
Less |
TAX (H) |
135.763 |
(20.434) |
(101.517) |
|
|
|
|
|
|
|
|
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|
PROFIT/(LOSS)
AFTER TAX (G-H) (I) |
253.449 |
(40.629) |
(260.342) |
|
|
|
|
|
|
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|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
(250.361) |
(209.732) |
0.000 |
|
|
|
|
|
|
|
|
|
|
Transfer
to General Reserves |
0.000 |
0.000 |
50.610 |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
3.088 |
(250.361) |
(209.732) |
|
|
|
|
|
|
|
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|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Exports |
2134.242 |
1383.455 |
1548.671 |
|
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TOTAL EARNINGS |
2134.242 |
1383.455 |
1548.671 |
|
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|
|
|
|
|
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IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
426.929 |
802.606 |
186.097 |
|
|
|
Stores & Spares |
7.882 |
9.241 |
9.502 |
|
|
|
Capital Goods |
7.118 |
0.000 |
114.079 |
|
|
TOTAL IMPORTS |
441.929 |
811.847 |
309.678 |
|
|
|
|
|
|
|
|
|
|
Earnings/loss Per
Share (Rs.) |
8.20 |
(1.31) |
(8.42) |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
|
Net Sales |
1104.200 |
1132.300 |
899.000 |
|
Total Expenditure |
982.600 |
1068.300 |
937.400 |
|
PBIDT (Excl OI) |
121.600 |
64.000 |
(38.400) |
|
Other Income |
0.000 |
0.000 |
0.000 |
|
Operating Profit |
121.600 |
64.000 |
(38.400) |
|
Interest |
57.300 |
59.900 |
66.200 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
64.300 |
4.100 |
(104.600) |
|
Depreciation |
49.300 |
50.400 |
50.600 |
|
Profit Before Tax |
15.000 |
(46.300) |
(155.200) |
|
Tax |
0.700 |
0.000 |
0.000 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
14.300 |
(46.300) |
(155.200) |
|
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 |
14.300 |
(46.300) |
(155.200) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
5.98
|
(1.34) |
(11.70) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
9.19
|
(2.02) |
(16.26) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
9.79
|
(1.73) |
(10.22) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.74
|
(0.12) |
(1.47) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
6.19
|
6.47 |
13.11 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
5.63
|
3.08 |
2.13 |
LOCAL AGENCY FURTHER INFORMATION
PERFORMANCE REVIEW
Performance of the company during the current year has
significantly improved showing a healthy growth in its top line. Post global
financial crisis which had impacted the textile industry during 2008-09, most
of the economies across the world have recovered faster than anticipated,
giving the much needed impetus to the lagging demand.
The total revenues for the year have improved to Rs.4234.400 millions from
Rs.3025.400 millions. While operating profit more than doubled to Rs.785.500
millions from Rs.345.000 millions, the cash profit quadruplicated to Rs.587.700
millions as against previous year’s Rs.138.900 millions. As a result, Profit
before Tax stood at Rs.389.200 millions as against a loss of Rs.61.100 millions
in the previous year. The year witnessed unprecedented increase in cotton
prices as a result of shortfall in crop in several major cotton growing
countries. However, due to pro active management action, judicious and timely
procurement of cotton could contain the raw material cost within reasonable
level. As a result, the company could substantially benefit from increase in
yarn prices which remained high during the year in tandem with cotton prices.
During the year, both the plants of the company at Tamilnadu
and Kerala were effectively utilized inspite of power and labour shortages. The
company had undertaken substantial expansion by more than doubling its
capacities to 11.100 millions spindles during fiscal 2008-09, which helped
output growth leading to smart recovery in the current year.
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE
& DEVELOPMENTS
The textile industry plays a pivotal role in the Indian
economy in terms of industrial production, employment and exports. Its
contribution to forex earnings of the country was 11 per cent in 2010-11. This
sector currently employs about 35 million workers directly and 47 million
workers in allied sectors like Agriculture.
Working of Indian textile industry which had undergone a very
difficult phase for almost two years from 2007-08 on account of adverse factors
like financial turmoil in industrialized countries leading to economic
slowdown, unprecedented hike in Minimum Support Prices of Raw cotton and
massive exports of raw cotton, recovered remarkably from the third quarter of
2009-10. The markets became buoyant on account of strong domestic demand arising
from favourable demographic factor and rapid changes in the lifestyle of
consumers. Although currently there is a temporary slowdown in demand both in
the domestic and international markets, the overall sentiment is positive and
optimistic for the sustained growth in demand in the period ahead. Another
favourable factor is that in the coming cotton season, Indian cotton crop is
expected to be higher and prices are forecasted to be relatively lower than the
current levels. The cumulative impact of all these favourable factors augurs
well for the improved working of textile industry.
The factors which impact working of textile industry are:
(1) The average prices of cotton during October, 2010 -
March, 2011 reached historic high with escalation of around 85 percent over the
corresponding period of last year. This is the primary reason for an increase
in the cost of production of cotton yarn. Although from mid-April 2011 cotton
prices have shown a softening trend, cotton prices in the period ahead will generally
remain at higher level than what was prevailing prior to 2010-11 cotton season.
(2) Frequent and several changes brought about by Government
in the policy for exports of cotton yarn from April, 2010 onwards, impeding the
hitherto smooth flow of exports.
(3) Increase of two to three per cent in the cost of
borrowings.
The focus of monetary policy followed by Reserve Bank of
India (RBI) has been to tackle the inflationary pressures in the economy.
Consequently, RBI has been escalating the rates of interest from time to time.
In fact, during the last one year, the Reserve Bank of
(4) Fluctuations in Rupee Exchange Rate
The Rupee exchange rate which was Rs.44.47 to US Dollar in
April, 2010 and Rs.47 in July 2010, strengthened to Rs.45 in March, 2011. Any
fluctuation in the exchange rate impact export realizations. It is pertinent to
mention that despite the above mentioned adverse factors, there has been
improvement in the working of textile industry primarily due to strong domestic
as well as international demand.
Spinning and Weaving
Capacities
Figures of world’s installed spinning and weaving capacities
are available upto end December, 2009. As of 2009, world’s total spindleage was
227 million, with
In addition, mills have placed huge orders for spindles with
machinery manufacturers. This will lead to expansion and modernization of
spinning sector. Thus, it will be in a position to cater to the rising domestic
demand from the downstream value chain and also cater to higher export demand
for cotton yarn.
A major chunk of spinning capacity expansion took place under
the TUF Scheme, which was operative for a span of eight years from 1st April,
1999 to 31st March, 2007. Further, under the modified TUF Scheme operative from
1st April, 2007, investments during three years 2007-08 to 2009-10, increased
considerably towards modernization and expansion of spinning capacity.
The Restructured TUF Scheme has since been announced by the
Ministry of Textiles on 28th April, 2011. The Scheme will be operative from
28th April, 2011 to 31st March, 2012, the terminal year of the Eleventh Five
Year Plan. The major change in the Restructured Scheme is a reduction in the
repayment period to seven years with two years moratorium as compared to
earlier repayment period of ten years with two years moratorium.
The number of looms in the mill sector continues to remain
stagnant at 71,000 for the last five years. However, the weaving capacity in
the power loom sector has increased from 220.500 millions looms in 2008-09 to
227.000 millions looms as of October, 2010.
Production of Yarn
The total production of spun yarn which had marginally
declined from 4003 million kgs in 2007-08 to 3912 million kgs in 2008-09 rose
to 4193 million kgs in 2009-10. For the year 2010-11, the production is
projected at 4650 million kgs, showing a rise of 11 percent. Similarly,
production of cotton yarn had also escalated from 2896 million kgs in 2008-09
to 3079 million kgs in 2009-10. For the year 2010-11, production of cotton yarn
is projected at 3510 million kgs. This shows a rise of 14 percent. For the year
2011-12, the Textile Commissioner has projected the production of cotton yarn
at 3931 million kgs. However, the Industry Associations have projected the
production at around 4000 million kgs. With the continuing modernization and
expansion in capacity, production of cotton yarn will continue to expand in
coming years.
Exports of Cotton
Yarn
In pursuance of National Fibre Policy, Government set up in
September 2010, Cotton Yarn Advisory Board (CYAB) to advise the Government on
matters pertaining to production, consumption and availability of cotton yarn.
There were four meetings of CYAB during the year .
After protracted deliberations at the Board meetings, the
Cotton Yarn Balance Sheet for 2010-11 was drawn up in terms of which exportable
surplus was arrived at 720 million kgs. Although some of the stakeholders like
AEPC, Tirupur Exporters Association did not agree to this figure, the Ministry
of Textiles went ahead and fixed the export ceiling at 720 million kgs for
2010-11. Subsequently, DGFT issued notification restricting exports of cotton
yarn from 1st December, 2010, under the licensing procedure. Subsequently,
several changes were made in the procedure for exports of yarn. Consequent to
the procedural wrangles, exports of cotton yarn came to a grinding halt from
mid-January, 2011 upto end March, 2011. As a result, stocks of cotton yarn
piled up with mills, affecting the financial viability of the spinning
industry.
The detailed figures of exports of textiles and clothing are
published by the Director General of Commercial Intelligence & Statistics
(DGCIS). The latest detailed figures published by DGCIS are available only up
to September, 2010. Hence, no authentic figures of exports of cotton yarn for
the full year 2010-11 are available but one could safely assume that exports
would have more or less reached the ceiling of 720 million kgs.
For the year, 2011-12 also, there was no consensus amongst
various stakeholders on the figure of ceiling for cotton yarn exports. However,
the Textile Commissioner has recommended to the Government of India a ceiling
of 845 million kgs. The representatives of textile industry have recorded their
dissent to this figure. The industry has represented to Government that in view
of ongoing modernization and expansion of capacity, there is no need to
restrict cotton yarn exports which should be allowed freely from 1st April,
2011.
Upto 2009-10 exports of cotton yarn were operating smoothly
and were in the range of 20 to 22 percent of the production of cotton yarn. The
slipshod manner in which Government has handled exports of cotton yarn has done
immense harm to the textile industry. Fortunately, DGFT has since notified that
exports of cotton yarn will be free from 1st April, 2011, subject, of course,
to registration of contracts with Offices of DGFT.
Cotton Scenario
For the cotton season 2009-10, Cotton Advisory Board has
estimated area under cotton at 103.10 lakh hectares and crop 295 lakh bales.
The per hectare yield for the season dropped to 486 kgs as against 524 kgs
achieved in 2008-09 and 567 kgs in 2007-08 For the cotton season 2010-11,
Cotton Advisory Board has estimated the area at 111.61 lakh hectares and a crop
of 312 lakh bales per hectare yield in the cotton season 2011-12 works out
lower at 475 kgs.
Earlier, the CAB had estimated the crop at 329 lakh bales.
However, due to unseasonal rains and extreme cold wave, the crop was damaged in
Gujarat,
For the cotton year 2010-11 CAB had arrived at the figure of
55 lakh bales of cotton as exportable surplus. The full quantity has since been
exported. The cotton trade has been clamouring for additional exports in spite
of the fact that closing stock is the lowest in the last seven years. The
textile industry has been persistently pleading that every cotton year, exports
should be allowed only from January after the exportable surplus is determined
in December, after providing for two-and-half months stocks for the user
industry. It is heartening to note that the Commerce and Industry Minister has
made a categorical statement that there was no scope for additional exports of
cotton in the current season and therefore further exports of cotton can be
considered only in the new cotton season.
Production of organic cotton at global level has been continually
rising. The global production of organic cotton in 2009-10 reached the level of
242000 metric tons, registering a growth of 15 percent over 2008-09.
With Government’s prediction of normal monsoon for the coming
season and other favourable factors like higher cotton prices in the current
season, farmers will find it attractive to increase area under cotton
cultivation. Other encouraging factors are: growing awareness among farmers for
adoption of better technology and augmented supply of a good quality seed. The
area under cotton cultivation for the season 2011-12 is expected to rise to 120
lakh hectares and preliminary estimates are that cotton production in the next
season will be around 350 lakh bales, subject to normal monsoon and favourable
agro-climatic conditions. Even globally also, cotton production in the coming
year is projected to be higher than current year, according to International
Cotton Advisory Committee (ICAC).
It has been observed that the performance of textile industry
hinges largely on adequate availability of quality cotton. The industry has the
potential to absorb larger cotton crop with the expansion of capacity. However,
Government should exercise abundant caution in deciding policy for exports of
raw cotton, keeping overall national interest in mind. According to ICAC,
global production of cotton in the season 2009-10 (August –July) was 22 million
tons and consumption was 25 million tons. Since consumption was higher than
production, ending stocks declined to 8.6 million tons, as against 12.75
million tons in 2008-09. This led to massive increase in cotton prices. For the
cotton season 2010-11, global production is estimated higher by 13 percent at
24.8 million tons and consumption at 25.1 million tons, with lower ending
stocks of 8.4 million tons.
For the cotton season 2011-12, the ICAC has projected that
world cotton production will rise again by 11 percent to 27.6 million tons. The
consumption will be higher at 25.8 million tons as compared to the previous
season. Since the production will be higher than consumption, ending stocks
will rise to 10.1 million tons. The world ending stocks-to-use ratio, forecast
to reach an all-time low of 33 percent this season, could rebound to 39 percent
in 2011-12. This would be lower than the 10-year average of 49 percent
prevailing before 2009-10.
ICAC’s price forecast (Cotlook ‘A’ Index) for the season
2009-10 was 78 cents per pound. For 2010-11 the earlier forecast of 85 cents
per pound went totally haywire and the price spurted to a steep level of $ 1.65
per pound. For the season 2011-12, the current forecast is that it will be
significantly lower than $ 1.65 per pound, but it will be higher than the
ten-year average of 60 cents per pound. It is the considered opinion of cotton
experts that for a couple of years, cotton prices might remain at higher level
and they will start moderating only after supply imbalance is corrected.
OUTLOOK
The Indian Spinning Industry has tremendous potential for
healthy growth on a sustained basis provided market forces of demand and supply
are allowed to operate unhindered. Government’s recent measures for regulating
export of cotton yarn are not in consonance with the tenets of liberalization
and globalization. Confederation of Indian Textile Industry (CITI), The Cotton
Textiles Export Promotion Council (Texprocil) and other concerned organizations
have been pleading with the Government not to tinker with the healthy growth of
the spinning industry and one can only hope that Government will realize the
importance of the same. Fortunately for the spinning industry, the domestic
demand continues to be strong and with the revival of export market, prospects
for the spinning industry are highly promising and positive.
Fixed Assets:
· Land Freehold
· Buildings Plant and Machinery
· Wind Turbine
· Electrical Installations
· Furniture
· Office Equipments
·
Vehicles
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 |
4 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
3 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
36 |
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.