MIRA INFORM REPORT

 

 

Report Date :

02.04.2012

 

IDENTIFICATION DETAILS

 

Name :

SANGAM (INDIA) LIMITED

 

 

Formerly Known As :

Arun Synthetics Private Limited

 

 

Registered Office :

Opposite Higher Secondary School, Industrial Estate, Pur Road, Bhilwara - 311 001, Rajasthan

 

 

Country :

India

 

 

Financials (as on) :

31.03.2011

 

 

Date of Incorporation :

29.12.1984

 

 

Com. Reg. No.:

17-003173

 

 

Capital Investment / Paid-up Capital :

Rs.394.216 Millions

 

 

CIN No.:

[Company Identification No.]

L17118RJ1984PLC003173

 

 

Legal Form :

Public Limited Liability Company. Companies Share are listed on the stock Exchange.

 

 

Line of Business :

Manufacturer of synthetic suiting with an installed capacity of 59.3 lac mtr pa. Sangam (India) markets its products under the brand name Sangam and has a network of selling agents and dealers throughout the country.

 

 

No. of Employees :

6500 (Approximately)

 

 

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 9500000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having satisfactory track. The company is doing well. Trade relations are reported as fair. Business is active. Payments are reported to be 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)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOCATIONS

 

Registered Office :

Opposite Higher Secondary School, Industrial Estate, Pur Road, Bhilwara - 311 001, Rajasthan, India

Tel. No.:

91-1482-241840/242229,

Fax No.:

91-1482-242386

E-Mail :

secretarial@sangamgroup.com

info@sangamgroup.com

Website :

www.sangamgroup.com

 

 

Corporate Office :

B/ 306-309, Dynasty Business Park, A.K. Road, Opp. Sangam Cinema, Andheri (E), Mumbai – 400 069, Maharashtra, India

Tel. No.:

91-22-28227861/4

Fax No.:

91-22-28227865

 

 

SPINNING UNIT-I

Village Biliya, Chittorgarh Road, Bhilwara - 311 001, Rajasthan, India

 

 

SPINNING UNIT-II

91 K.M. Stone, N.H.-79, Village Sareri, District Bhilwara - 311 024, Rajasthan, India

 

 

Weaving, Flock and

Processing Unit :

Village Atun, Chittorgarh Road, Bhilwara - 311 001, Rajasthan, India

 

 

DENIM

Village Biliya, Chittorgarh Road, Bhilwara - 311 001, Rajasthan, India

 

 

DIRECTORS

 

As on 31.03.2011

 

Name :

Mr. R P Soni

Designation :

Chairman

 

 

Name :

Mr. S N Modani

Designation :

Managing Director

 

 

Name :

Mr. V K Sodani

Designation :

Executive Director

 

 

Name :

Mr. Ram Avatar Jaju

Designation :

Director

 

 

Name :

Mr. A Karati

Designation :

Director

 

 

Name :

Mr. T. K. Mukhopadhyay

Designation :

Additional Director

 

 

KEY EXECUTIVES

 

Name :

Mr. G.C. Jain

Designation :

President

 

 

Name :

Mr. S.M. Gupta

Designation :

President (Works)

 

 

Name :

Mr. Atul Rastogi

Designation :

President (Works)

 

 

Name :

Mr. Anil Jain

Designation :

Jt. President (Finance) and Company Secretary

 

 

Name :

Mr. Anil Sharma

Designation :

Vice President (Works)

 

 

Name :

Mr. Sanjeev Joshi

Designation :

President (Domestic Marketing)

 

 

Name :

Mr. S.K. Bhandari

Designation :

Senior Vice President (Comm.)

 

 

Name :

Mr. R.S. Ladha

Designation :

Senior Vice President (Purchase)

 

 

Name :

Mr. L.L Soni

Designation :

Vice President (Comm.)

 

 

Name :

Mr. Lalit Jain

Designation :

Vice President (Accounts)

 

 

Name :

Mr. P.R. Khator

Designation :

Vice President (Comm.)

 

 

Name :

Mr S. K. Baghela

Designation :

Vice President (Personnel)

 

 

Name :

Mr. Shivesh Gupta

Designation :

Vice President (Work)

 

 

Name :

Mr. Manoj Gupta

Designation :

Vice President (Works)

 

 

Name :

Mr. Chirag Bhatt

Designation :

Vice President (Denim)

 

 

Name :

Mr. A. S. Choudhary

Designation :

Vice President (Technocal)

 

 

Name :

Mr. M. Bhanu Pratao

Designation :

Vice President (TPP.)

 

 

Name :

Mr. N. K. Kavadia

Designation :

Vice President (Commercial)

 

 

Name :

Mr. M. S. Shkhawat

Designation :

Vice President (IT.)

 

 

Name :

Mr. V. K. Bhatt

Designation :

Vice President (R and D)

 

 

Name :

Mr. Dilip Kumar Jain

Designation :

Vice President (Liaisoning)

 

 

Name :

Mr. R. M. Sinduria

Designation :

Vice President (Commercial)

 

 

Name :

Mr. S. K. Jain

Designation :

Vice President (Work)

 

 

Name :

Mr. B. B. Singh

Designation :

Vice President (Engineering)

 

 

Name :

Mr. J. M. Garg

Designation :

Vice President ( Export Marketing)

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 31.12.2011

 

Category of Shareholder                                               

 

Total No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

3,169,433

8.04

Bodies Corporate

11,303,045

28.95

Sub Total

14,472,478

36.99

(2) Foreign

 

 

Total Shareholding of Promoter and Promoter Group (A)

14,472,478

36.99

(B) Public Shareholding

 

 

(1) Institutions

 

 

Insurance Companies

2,066,444

5.24

Sub Total

2,066,444

5.24

(2) Non-Institutions

 

 

Bodies Corporate

16,688,660

42.33

 

 

 

Individuals

 

 

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

3,982,341

10.10

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

1759,750

4.46

 

 

 

Any Others (Specify)

34,486

0.86

Non Resident Indians

287,015

0.81

Clearing Members

7,214

0.02

            Trusts

14,151

0.04

Sub Total

22,522,266

57.76

Total Public Shareholding (B)

24,588,710

63.01

Total (A) + (B)

39,061,188

100.00

 

 

 

(C) Shares held by Custodians and agains which Depository Receipts have been issued 

 

 

(1) Promoter and Promoter Group

--

--

(2) Public

--

--

Sub Total

--

--

 

 

 

Total (A) + (B) + (C) 

39,061,188

100.00

 

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of synthetic suitings with an installed capacity of 59.3 lac mtr pa. Sangam (India) markets its products under the brand name Sangam and has a network of selling agents and dealers throughout the country.

 

 

Products :

Product Description

ITC Code

Yarn

5509

Cotton Yarn

5205

Synthetic Fabrics

5515

 

 

Brand Names :
  • Sangam
  • Sangam Yarns
  • Anmol
  • Laurel

 

PRODUCTION STATUS

 

Actual Production

Particulars

Unit

31.03.2011

SPINDLES

NOS

193920

ROTORS

NOS

2464

LOOMS

NOS

270

Processing of Fabric

MTRS.

28800000

Manufacturing of Flock Fabric

MTRS.

7500000

Manufacturing of Textile Fabric

KGS.

337500

 

 

Installed Capacity

Particulars

Unit

31.03.2011

Fabric

MTRS.

34899319

P/V Yarn

KGS.

37842293

Cotton Yarn

KGS.

12255495

Waste

KGS.

3063401

Synthetic Fabric (Job Processing)

MTRS.

28358779

Flock Fabric

MTRS.

3064318

Textile Flock

KGS.

283320

 

 

GENERAL INFORMATION

 

No. of Employees :

6500 (Approximately)

 

 

Bankers :
  • State Bank of India
  • State Bank of Patiala
  • Bank of Baroda
  • State Bank of Hyderabad
  • Corporation Bank
  • Central Bank of India
  • IDBI Bank Limited
  • Oriental Bank of Commerce
  • State Bank of Bikaner and Jaipur
  • Dena Bank
  • Exim Bank

 

 

Facilities :

(Rs. In Millions)

Secured Loan

As on

31.03.2011

As on

31.03.2010

Term Loans From Banks

 

 

Rupee Loans

4322.841

4590.640

Foreign Currency Loans

31.711

55.297

Working Capital Loans From Banks

 

 

Rupee Loans

2324.309

2055.090

Foreign Currency Loans

36.331

0.000

Car Hire Purchase Loan from others (against Hypothecation of Cars)

14.476

6.832

Total

6729.668

6707.859

1. Except as stated below at Note No.4 & 6 all Rupee and Foreign Currency Term Loans from banks except car hire purchase loan are secured by a joint equitable mortgage by deposit of title deeds in respect of immovable properties and first hypothecation of the entire moveable properties of the company, both present and future (save and except book debts) subject to prior charges created/to be created in favour of bankers for securing working capital borrowing, ranking pari—passu with the charges created/to be created in favour of other participating institutions and banks. The above Term Loans are further secured by personal guarantee of two directors of the company.

 

2. Except as stated below at Note No.4 & 5, Borrowings from Banks for working capital are secured by hypothecation of inventories and charge on book debts both present and future and second charge on all the immovable and movable fixed assets of the company. The above borrowing are further secured by personal guarantee of two directors of the company.

 

3. Car hire purchase loans are secured by hypothecation of respective vehicle(s).

 

4. Rupee Term Loan from Banks includes a loan of Rs.20 Millions (Previous year Rs46.700 Millions) from a Bank which is secured by way of exclusive charge on all the fixed assets of wind power plant of the company installed at Jaiselmer (Rajasthan). The said term loan is further secured by personal guarantee of two directors of the company.

 

5. Working capital loans from banks includes a short term loan of Rs.110.900 Millions from Kotak Mahindra Bank ltd. Which is secured by pledge of 6,000 cotton Bales.

 

6. Rupee Term loan from Bank includes a short term loan of Rs.60 Millions from IDBI Bank Ltd. Which is secured by escrow account of toll collection and subservient charges on the movable fixed assets and current assets and further secured by personal guarantee of two directors of the company.

 

Unsecured Loan

As on

31.03.2011

As on

31.03.2010

Loan From Corporate Bodies

200.000

218.060

Loan from Banks (Guaranteed by two directors of the company)

250.000

0.000

Total

450.000

218.060

 

 

 

Banking Relations :

 

 

 

Auditors :

 

Name :
  • R Kabra and Co., Mumbai, Maharashtra, India

      Chartered Accountants

 

  • BL Chordia and Co., Bhilwara, Rajasthan, India

      Chartered Accountants 

 

 

Associates :
  • Sangam Infratech Limited
  • Marigold Investments Private Limited.
  • Sangam Business Credit Limited
  • Sangam Suitings Private Limited
  • Mahalaxmi TMT Private Limited

 

 

Joint Venture :
  • Keti Sangam Infrastructure (India) Limited.
  • PKSS Infrastructure Private Limited
  • Kalyan Sangam Infratech Limited

 

 

CAPITAL STRUCTURE

 

As on 31.03.2011

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

64000000

Equity Shares

Rs.10/- each

Rs.640.000 Millions

18500000

Preference Shares

Rs.10/- each

Rs.185.000 Millions

 

 

 

Rs.825.000 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

39421559

Equity Shares

Rs.10/- each

Rs.394.216 Millions

 

 

 

 

 

Note

 

Out of above Shares 8,20,900 Equity Shares of Rs.10/— each at a premium of Rs.20/— per share and 12,50,062 Equity shares of Rs.10/— each at par were issued pursuant to scheme of amalgamations in earlier years without payment being received in cash.

 

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

394.216

394.216

394.215

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

2001.605

1504.433

1378.877

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

2395.821

1898.649

1773.092

LOAN FUNDS

 

 

 

1] Secured Loans

6729.668

6707.859

6661.661

2] Unsecured Loans

450.000

218.060

266.425

TOTAL BORROWING

7179.668

6925.919

6928.086

DEFERRED TAX LIABILITIES

494.753

343.905

253.374

 

 

 

 

TOTAL

10070.242

9168.473

8954.552

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

5385.923

5644.090

6110.642

Capital work-in-progress

202.025

125.741

53.008

 

 

 

 

INVESTMENT

78.474

78.474

60.414

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
2380.231

1770.016
1428.653

 

Sundry Debtors
1593.789

1305.602
1185.945

 

Cash & Bank Balances
94.305

69.165
84.481

 

Other Current Assets
0.000

0.000
0.000

 

Loans & Advances
1199.119

689.345
534.038

Total Current Assets
5267.444

3834.128

3233.117

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
479.336

290.674

332.848

 

Other Current Liabilities
315.563

177.317

175.641

 

Provisions
68.725

45.969

0.000

Total Current Liabilities
863.624

513.960

508.489

Net Current Assets
4403.820

3320.168
2724.628

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

5.860

 

 

 

 

TOTAL

10070.242

9168.473

8954.552

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2011

31.03.2010

31.03.2009

 

SALES

 

 

 

 

 

Income

11715.248

8522.479

7482.699

 

 

Other Income

1.373

7.982

5.747

 

 

TOTAL                                    

11716.621

8530.461

7488.446

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Increase /(Decrease) in Stock 

(431.533)

(11.279)

91.524

 

 

Materials

6993.216

4976.586

4603.657

 

 

Payment to and Provisions for Employees

675.858

575.081

488.014

 

 

Operations and Other Expenses

3003.143

2093.970

2035.353

 

 

TOTAL                                    

10240.684

7634.358

7218.548

 

 

 

 

 

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION

1475.937

896.103

269.898

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                    

640.024

630.748

590.502

 

Provision for Doubtful Debts/Advances

3.000

3.000

1.000

 

 

 

 

 

 

PROFIT / (LOSS) BEFORE TAX

832.913

262.355

(321.604)

 

 

 

 

 

Less

TAX                                                                 

267.015

90.830

(161.760)

 

 

 

 

 

 

PROFIT / (LOSS) AFTER TAX

565.898

171.525

(159.844)

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

370.080

344.524

504.368

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

300.000

100.000

0.000

 

 

Dividend

59.132

39.422

0.000

 

 

Tax on Dividend

9.593

6.547

0.000

 

BALANCE CARRIED TO THE B/S

567.253

37.010

344.524

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Export Earnings

2492.079

1896.480

1746.704

 

TOTAL EARNINGS

2492.079

1896.480

1746.704

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

128.799

58.732

61.870

 

 

Stores & Spares

39.080

36.651

25.643

 

 

Capital Goods

49.325

30.392

14.286

 

TOTAL IMPORTS

217.204

125.775

101.799

 

 

 

 

 

 

Earnings Per Share (Rs.)

14.36

4.35

(4.05)

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2011

Unaudited

30.09.2011

Unaudited

31.12.2011

Unaudited

Type

1st Quarter

2nd Quarter

3rd Quarter

 Net Sales

3375.600

3756.400

3079.200

 Total Expenditure

3004.200

3362.300

2812.100

 PBIDT (Excl OI)

371.400

394.100

267.100

 Other Income

8.300

(7.800)

0.800

 Operating Profit

379.700

386.300

267.900

 Interest

115.700

124.400

121.100

 Exceptional Items

0.000

0.000

0.000

 PBDT

264.000

261.900

146.800

 Depreciation

163.200

165.800

174.200

 Profit Before Tax

100.800

96.100

(27.400)

 Tax

32.400

35.800

(9.000)

Provisions and Contingencies

0.000

0.000

0.000

 Reported PAT

68.400

60.300

(18.400)

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

68.400

60.300

(18.400)

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2011

31.03.2010

31.03.2009

PAT / Total Income

(%)
4.83

2.01

(2.13)

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
7.11

3.08

(4.30)

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
7.82

2.77

(3.44)

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.35

0.14

(0.18)

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
3.36

3.92

5.73

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
6.10

7.46

6.36

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

ECONOMIC OVERVIEW

The global economy’s inability to gain traction stems from the on-going uncertainty. The on-going

European and U.S. sovereign debt issues have had a significant downside impact on the banking system and broader financial markets across the globe. Despite a higher inflation trajectory and turbulences such as the massive Japanese earthquake and tsunami, and social unrest across the Middle East, the global economy is expected to remain strong through 2013. According to the World Bank, global GDP after expanding 3.8 per cent in 2010, is projected to slow to 3.2 per cent in 2011 before firming to a 3.6 per cent in 2012 and 2013.

 

Meanwhile, in India, the economy is estimated to have grown 8.5 per cent in 2010-11 despite increased challenges such as a high inflation rate - averaging more than 9% compared to the previous year’s average of 3.8% and rising costs of fund during the year. The Reserve Bank of India increased its key short-term lending rate, or Repo Rate, seven times from 5 per cent to 6.75 per cent to check the runaway increase in food prices. As per the revised estimates released by the Central Statistical Organisation (CSO), India’s GDP at factor cost at constant prices registered an increase of 8.5 per cent in the year 2010-11, a shade lower than the advance estimates of 8.6 per cent.

 

The growth in India continues to driven by rising income levels that have increased discretionary expenses in both rural and urban India. While GDP growth has hit a soft patch - falling to a five-quarter low of 7.8% during January-April 2011, due to rising prices of food and commodities, India is expected to maintain the growth momentum as consumption and investments continue. The government in July pared its growth projection for 2011-12 to 8.6 per cent, down from 9 per cent. Further, RBI has forecast 8 per cent GDP growth in 2011-12, while most international agencies including the IMF, Fitch and Goldman Sachs have cut their India growth outlook to 7.7-8.2 per cent range.

 

OPERATIONAL RESULTS

The company’s performance witnessed significant improvement during the financial year. Turnover increased from Rs.8522.500 Millions to Rs.11715.200 Millions, Net Profit grew to Rs.565.900 Millions compared Rs.171.500 Millions in the previous financial year ended 31 March 2010. Exports have increased from Rs.1896.500 Millions to Rs.2492.100 Millions on FOB value basis.

 

EXPANSION AND DIVERSIFICATION

The Company is executing a capex plan of Rs.1800 Millions in which the denim fabric capacity is being doubled. Apart from increasing the open Ended Yarn capacity for captive consumption in manufacture of denim fabric. The company is also adding 7296 spindles, 6 Nos. Knitting achines and 3 Nos. Texturising Machines. The capex is being funded by Rupee Term Loans of Rs.1350 Millions and balance from internal accruals

 

 

MANAGEMENT DISCUSSION AND ANALYSIS (Cont.)

 

Company overview

Subject is the largest player in the dyed poly viscose (PV) yarn market in India. At Bhilwara in Rajasthan, the company operates its state-of-the-art facilities to produce synthetic and blended dyed/grey spun yarn, cotton yarn and fabrics (synthetics blended, denim, knitted and flock fabrics). I t also has facilities for fabric processing.

 

Financial performance

High volumes growth and better realisation across different product segments helped the company post robust growth. For the year ended March 31, 2011, the company posted a robust 37.46 per cent rise in net sales at Rs 11715.200 Millions compared to Rs.8522.500 Millions in the previous fiscal year. Net profit surged during the period by 229.78 per cent to Rs.565.900 Millions compared to Rs.171.600 Millions in the previous year. Despite increased output costs and a volatile currency market, the company improved its E BIDTA margins to 16.56 per cent from 15.11 per cent last year as robust demand helped it pass on cost increases to customers.

 

Yarn Division

  • Locations: Biliya and Sareri, Rajasthan
  • Products: PV Yarn, PV-dyed yarn and cotton yarn
  • Capacities: 96864 spindles in Biliya and 97056 in Sareri
  • Contributes 64 per cent to the company’s total revenue.

 

Rationale for presence

Subject is the largest player in the Indian PV yarn market, commanding a share of ~25%, and is the largest producer of blended dyed yarn in the country in a single location. Besides, it is a market leader in certain counts (2/15s count and 2/18s) where it is a price setter. And it is positioned to make the most of PV yarn’s increasing presence in both Indian and global textile industry. The company started as a fabric manufacturer in 1984. I t entered yarn manufacturing in 1995 as a backward integration move. Today, the company

 

Performance

Total yarn division accounted for 64.07% of the company’s revenues in 2010-11. The company’s total yarn production increased by 7.61 per cent, from 46554 tonnes in 2009-10 to 50098 tonnes in 2010-11. The PV yarns (including dyed) accounted for 75.54 per cent of the total production in 2010- 11 as against 79.75 per cent in 2009-10. The production of manmade 􀃀 bre yarns increased from 37126 tonnes in 2009-10 to 37842 tonnes in 2010-11. Cotton yarns accounted for 24.46 per cent of the company’s total production in 2010- 11 as against 20.25 per cent in 2009-10. Its total production increased by 30.00 per cent, from 9428 tonnes in 2009-10 to 12256 tonnes in 2010-11.

 

STRENGTHS

 

·         Product range

Subject has emerged as a preferred PV yarn supplier to top textile companies across the world, thanks to its ability to deliver large quantities with virtually any shade of colour. I t has a colour bank of more than 5000 shades. The company produces 6-50 counts of yarns. Its product range also offers single ply, double ply, grindle, roving grindle, core spun, slub and other fancy yarns, making it a one-stop shop for its clients. Besides its regular varieties, the company has partnered various brands in introducing new varieties of man-made fibres, thereby adding considerable value to the products.

 

·         Quality

The company caters to a number highly quality conscious clientele in both domestic and international markets. To ensure production of superior quality yarns, Subject has employed latest technology across its units, uses good grades of raw materials has appointed qualified quality personnel to monitor the production process, backed by efficient tests in the labs.

 

The company procures quality raw materials from the best companies to ensure lower process losses and longer fibres. Sangam’s units are equipped with world-class and advanced quality testing equipment like Wuster tester, evenness tester and hairyness tester – all of them ensure that the yarn produced is free of neps and other faults like low strength, colour-fading, low fire strength, unevenness in colour, etc. Owing to its ability to offer consistent quality, the company’s yarns command a premium at key markets. All its units are ISO 9001:2000 certified.

 

·         Research and development

The company has evolved from a product manufacturer into a solutions provider in yarns, owing to its enormous product knowledge and its ability to keep pace with the latest trends in the global industry. Textile is a dynamic industry where the constant need of comfort, affordability and durability keeps evolving. This makes product cycles short and replacement cycles shorter. Sangam has research teams in its units constantly trying to develop new and value-added products and introduce colour shades to suit the end use of its customers. The units are equipped with worldclass labs, complete with advanced equipment and qualified professionals to ensure fast turnaround of new products.

 

·         Technology

Sangam has two yarn-production units and both are equipped with latest machineries to ensure better capacity utilisation, greater flexibility, better quality and lower downtime, leading to greater efficiencies and lower production costs. New technology is a more of a necessity for the company than a comfort, due to its drive to constantly innovate and experiment.

 

·         Raw material management

Sangam procures polyester from Reliance Industries Limited and viscose from Grasim Industries’ unit at Nagda. The procurement process is initiated with the proper production planning based on the expected delivery schedules for each month.

 

Cost control

Subject makes yarns used in ‘affordable’ fabrics and garments. Therefore, it’s necessary to keep its costs under control. I t has a real-time cost control system. The company has taken various measures to increase plant utilization as well as the speed and efficiency of machines, reduce waste, rationalize labour force, and optimize energy use, among others, to stay competitive and protect its margins.

 

·         Marketing and selling

The company has stepped up its branding initiatives in the fabric space. I t recently launched its suiting fabric under the brand ‘Sangam Suitings’ instead of selling it as a plain vanilla product. They believe that the branding strategy will help the company command better realisations and establish its presence in the highly competitive fabric space in India. During the year, the company has entered into an endorsement agreement with Bollywood Star Suniel Shetty and youth-icon Cricketer Virat Kohli as brand ambassadors to promote its ‘ready to stitch suiting and shirting across the country under its brand Sangam Suiting’s.

 

FABRICS DIVISION

 

(A) P/v Fabric

• Location: Atun, Rajasthan

• Products: PV fabrics, and processed fabrics

• Capacity: PV fabrics – 18 mn metres p.a. and processed fabrics – 28 mn metres p.a.

• Contributed 16 per cent to the total revenues of the

 

·         Rationale for presence

Subject started as fabric manufacturer and it has now once again scaling up in this segment with a big push in denim and branded fabric space. The company mainly produces blended fabrics and denim, which have greater affordability and lower maintenance compared to cotton.

 

·         Performance

The company’s total fabrics production stood at 34.89 mn metres as against 28.46 mn metres in 2009-10.

 

 

STRENGTHS

 

·         Product range

The company has emerged as a preferred supplier of fabrics on account of its colours, blends, textures and finishes. The company mainly manufactures woven fabrics, which are mainly used for suiting and trousers, and denim. I t has the ability to blend various yarns to ensure the right texture, style and, above all, the right value-for-money products.

 

·         Quality

Quality is of paramount importance for the company’s products. The company’s fabrics are manufactured as per the quality requirements of its clients or with reference to the current trends. I t has employed strict quality checks through its quality control department. Major tests are colour fastness test, light fastness test, rubbing fastness test, pilling test, residual shrinkage test, checking of cloth construction parameters and the comparison of the finished fabric with the customer’s specifications.

 

·         Research and development

The R and D department in fabrics division ensures production of comfortable fabrics that are wearable, affordable and yet attractive to the prospective customers. The company has a fully equipped lab and well-qualified and experienced employees to ensure frequent product variations and introductions.

 

Technology

The company employs the best of its class machineries to ensure efficient and better quality of finished products. It has computerized design facility in its machines, enabling wider range of design executed with precision, ensuring wider choices and lower wastage.

 

·         Raw material management

The company considers each of its units as a profit centre. Therefore, all inter-unit sales are made on market prices. The fabric divisions largely acquire top class raw materials like polyester yarns, viscose yarn, cotton yarn and blended yarns from sister-units. But the purchasing is institutionalized and fabric divisions are free to acquire raw materials from other manufacturers if they get better price coupled with the same quality. The unit is proximate to its major raw material sources, ensuring uninterrupted supply at competitive prices.

 

·         Marketing and selling

The company’s fabrics division accounted for 36 per cent of the company’s total revenue for 2010-11 – 14 per cent from PV fabric; 12 per cent from denim, and 10% from flocks and processed fabrics (used for home furnishing).

 

The company largely sells its finished woven fabrics to the big garment companies in India and abroad for suiting and trousers. Sangam also has a retail presence, supplying its fabrics to over 100 dealers and 1,000 retail shops under its brands ‘Sangam’ and ‘Anmol’ across the country.

 

It has signed film actor Suniel Shetty and cricketer Virat Kohli as Brand Ambassadors for its premium suiting fabrics range, branded Sangam Suitings. It launched a TV campaign to promote the range with the first commercial aired on January 8, 2011.

 

(B) Denim Fabric

• Unit: Biliya, Rajasthan

• Products: denim fabric

• Capacity: 16 mn meters

• Contributed 12 per cent to the total revenues of the company.

 

The company ventured into denim in 2009 on account of increasing demand for the fabric. It is the only company in Bhilwara, Rajasthan to produce denims, resulting in a vast potential in terms of growth in the coming years. The company has doubled its denim fabric capacity to 16 mn meters in 2010-11 for Rs.350 Millions and its Rs.1800 Millions capex plan in the current fiscal is towards doubling this to 32 mn meters, along with adding capacities for texturised yarn and open-eneded yarn. Consequently, revenue contribution from denim is expected to increase to 22% in 2012-13 from 12% in 2010-11. With the entire yarn requirement for its denim fabric division being met through in-house production of cotton yarn, it enjoys the benefits of backward integration.

 

(C) Home Furnishings Division

• Location: Atun, Rajasthan

• Products: woven and processed fabrics

• Capacity: Woven fabrics – 7.5 mn metres p.a.

• Contributed 2.25 per cent to the total revenues of the company.

 

 

Fixed Assets:

 

  • Lease Hold
  • Free Hold
  • Factory Building
  • Office Building
  • Plant and Machinery
  • Wind Power Machines
  • Electric Installation
  • Water Supply Installation
  • Furniture and Fixture
  • Vehicle
  • Office Equipment
  • Computer

 

 

 

 

 

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.51.16

UK Pound

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

5

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

6

--LEVERAGE

1~10

6

--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

NO

--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

-

 

 

 

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.