MIRA INFORM REPORT

 

 

 

Report Date :

31.12.2012

 

IDENTIFICATION DETAILS

 

Name :

SOMA TEXTILES AND INDUSTRIES LIMITED

 

 

Formerly Known As :

AUSTIN PHARMACEUTICALS LIMITED

 

 

Registered Office :

2 Red Cross Place, Kolkata-700001, West Bengal

 

 

Country :

India

 

 

Financials (as on) :

31.03.2009

 

 

Date of Incorporation :

29.03.1940

 

 

Com. Reg. No.:

10070

 

 

CIN No.:

[Company Identification No.]

L51909WB1940PLC010070

 

 

Legal Form :

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

 

 

Line of Business :

Manufacturer and exporters of premium quality combed cotton yarns, single and multifold sports and denim fabrics.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B (28)

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Maximum Credit Limit :

USD 4200000

 

 

Status :

Moderate

 

 

Payment Behaviour :

Slow

 

 

Litigation :

Clear

 

 

Comments :

Subject is an established company having moderate track. There appears to be some losses being incurred by the company. However trade relations are reported as fair. Business is active. Payments are reported to be slow.

 

The company can be considered for business dealings with some caution.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

LOCATIONS

 

Registered Office :

2 Red Cross Place, Kolkata-700001, West Bengal, India

E-Mail :

rssharma@somanyceramics.com

Website :

www.somatexiles.com

 

 

Head Office / Factory 1 :

Rakhial Road, Ahmedabad – 380 023.Gujarat, India

Tel No.:

91-79-22743285-88

Fax No.:

91-79-22745653

 

 

 

 

Factory 2 :

Rakhial Road, Ahmedabad-380023, Gujarat, India

 

 

Factory 3 :

Plot No.D-49, MIDC, Baramati-413133, District, Pune, Maharashtra, India

Tel No.:

91-2112-243716, 243856

Fax No.:

91+2112-243717

 

 

Corporate Office :

Vaswani Mansion, Dinshaw Wachha Road, Backbay Reclamation, Mumbai 400 020, Maharashtra, India

Tel No.:

91-22-22836519 / 20, 2826 076 / 77

Fax No.:

91+22-22851173

E-Mail :

investors@somatextiles.com

 

 

 

DIRECTORS

 

Name :

Mr. S K Somany

Designation :

Chairman

 

 

Name :

Mr. A K  Somany

Designation :

Managing Director

 

 

Name :

Mr. Shrikant Bhat

Designation :

Executive Director

 

 

Name :

Mr. B.L  Dhoot

Designation :

Director

 

 

Name :

Mr. B K Hurkat

Designation :

Director

 

 

Name :

Mr. B H Parghi

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr. R S Sharma

Designation :

Company Secretary

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 30.09.2009

 

Names of Shareholders

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

 (1) Indian

 

 

Individuals / Hindu Undivided Family

2,211,281

6.69

Bodies Corporate

12,444,960

37.67

Sub Total

14,656,241

44.37

 

 

 

 (2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

14,656,241

44.37

 

 

 

(B) Public Shareholding

 

 

 (1) Institutions

 

 

Mutual Funds / UTI

2,388

0.01

Insurance Companies

10,000

0.03

Foreign Institutional Investors

12,257,000

37.11

Sub Total

12,269,388

37.14

 

 

 

 (2) Non-Institutions

 

 

Bodies Corporate

1,583,242

4.79

Individuals

 

 

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

3,339,723

10.11

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

1,166,333

3.53

 

 

 

Any Others (Specify)

18,073

0.05

Non Resident Indians

18,073

0.05

Sub Total

6,107,371

18.49

Total Public shareholding (B)

18,376,759

55.63

 

 

 

Total (A)+(B)

33,033,000

100.00

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

-

-

 

 

 

Total (A)+(B)+(C)

33,033,000

-

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer and exporters of premium quality combed cotton yarns, single and multifold sports and denim fabrics.

 

 

Products :

Product Description

ITC Code

Cotton Yarn and Cotton Fabrics

5205 to 5209

Bleders Yarn and Man- made fabrics

5509 to 5514

Jeans, Trousers and Shirts

6202 to 6205

 

PRODUCTION STATUS AS ON 31.03.2009

 

Particulars

 

 

Unit

Installed Capacity

Ahmedabad Unit

 

 

 

 

Ring Spindle

 

 

Nos.

23568

Rotors

 

 

Nos.

384

Looms

 

 

Nos.

149

Garments stitching machines

 

 

Nos.

10

 

 

 

 

 

Baramati Units

 

 

 

 

Ring Spindle

 

 

Nos.

30240

 

PRODUCTION AND SALES AS ON 31.03.2009

 

Particulars

 

 

Unit

Installed Capacity

Packed Cloth

 

 

Meters

15261902

Garment

 

 

Pieces

114829

Yarn

 

 

Kgs.

5665763

Own Waste

 

 

Kgs.

2072671

 

 

GENERAL INFORMATION

 

Bankers :

v      Dena Bank Limited

v      State Bank of India Limited

SME Branch, Chandigarh Ambalal Highway, Dera Bassi- 140507, Punjab, India

 

v      State Bank of Patiala

Opposite Bus Stand, Chandigarh Ambala Road, Derabassi- 140507, Punjab, India

 

 

Facilities :

Secured Loan

31.03.2009 (Rs. In Millions)

Debentures

19.124

Term Loans

Rupee Loans

Derivatives Rupee Term Loan

 

1089.231

80.205

Working Capital Loans

 

Rupee Loans

558.703

Foreign Currency Loans

57.313

Leasehold Liability

0.381

Total

1804.957

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Pipara and Company

Chartered Accountant

Address :

104, N R House, Ashram Road, Ahmedabad-380009, Gujarat, India

 

 

Subsidiaries :

Soma Textiles FZE, Hamriya Free Zone Sarjah, UAE

 

 

CAPITAL STRUCTURE

 

 

Authorised Capital :

No. of Shares

Type

Value

Amount

50000000

Equity Share

Rs.10/- Each

Rs.500.000 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

33033000

Equity Share

Rs.10/- Each

Rs.330.330 Millions

385300

Shares forfeiture account

 

Rs.1.945 Millions

 

 

 

Rs.332.275 Millions

 

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2009

31.03.2008

31.03.2007

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

332.275

332.275

332.300

2] Share Application Money

70.000

0.000

0.000

3] Reserves & Surplus

651.360

935.077

1112.200

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

1053.635

1267.352

1444.500

LOAN FUNDS

 

 

 

1] Secured Loans

1804.957

1470.205

1346.700

2] Unsecured Loans

4.356

103.447

103.500

TOTAL BORROWING

1809.313

1573.652

1450.200

DEFERRED TAX LIABILITIES

74.992

98.792

76.400

 

 

 

 

TOTAL

2937.940

2939.796

2971.100

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

1463.419

1398.989

1440.800

Capital work-in-progress

19.003

163.481

8.400

 

 

 

 

INVESTMENT

3.442

3.443

2.200

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
511.303

605.844

542.800

 

Sundry Debtors
119.282

212.715

177.900

 

Cash & Bank Balances
85.844

59.049

686.900

 

Other Current Assets
0.000

0.000

0.000

 

Loans & Advances
914.915

791.287

285.500

Total Current Assets
1631.344

1668.895

1693.100

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
161.997

281.671

158.900

 

Provisions
34.372

33.366

38.800

Total Current Liabilities
196.369

315.037

197.700

Net Current Assets
1434.975

1353.858

1495.400

 

 

 

 

MISCELLANEOUS EXPENSES

17.101

20.025

24.300

 

 

 

 

TOTAL

2937.940

2939.796

2971.100

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2009

31.03.2008

31.03.2007

 

 

 

 

Sales Turnover

1570.738

1926.086

1885.000

Other Income

95.294

98.445

119.400

Total Income

1666.032

2024.531

2004.400

 

 

 

 

Profit/(Loss) Before Tax

(305.935)

(152.777)

92.200

Provision for Taxation

22.219

23.208

32.700

Profit/(Loss) After Tax

(283.716)

(175.985)

59.500

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Export Earnings

358.379

413.706

NA

 

 

 

 

Imports :

 

 

 

 

Raw Materials

16.256

0.000

NA

 

Stores & Spares

25.628

30.709

NA

 

Capital Goods

6.816

106.395

NA

Total Imports

48.700

137.104

NA

 

 

 

 

Expenditures :

 

 

 

 

Manufacturing and Other Expenses

1694.940

1848.913

 

Financial Costs

156.118

109.389

 

 

Depreciation

165.059

156.797

 

 

Exceptional Item

(44.150)

7.558

 

 

Extraordinary Item

0.000

54.651

 

Total Expenditure

1971.967

2177.308

92.200

 

 

 

 

Earnings Per Share (Rs.)

(8.59)

(5.33)

NA

 

QUARTERLY / SUMMARISED RESULTS

 

PARTICULARS

 

 

30.06.2009

30.09.2009

 Type

 

 1st Quarter

 2nd Quarter

Sales Turnover

 

404.100

497.400

Other Income

 

11.900

15.700

Total Income

 

416.00

513.100

Total Expenditure

 

417.600

477.900

Operating Profile

 

(1.600)

35.200

Interests

 

38.100

40.800

Gross Profit

 

(39.700)

(5.600)

Depreciation

 

40.900

41.700

Tax

 

0.000

0.000

Reported PAT

 

(80.600)

(47.300)

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2009

31.03.2008

31.03.2007

PAT / Total Income

(%)

17.03

(8.69)

2.97

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

19.48

(9.14)

4.89

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

(9.88)

(4.98)

(2.94)

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

(0.03)

(0.12)

0.06

 

 

 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 

0.19

0.25

0.14

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

8.31

5.30

8.56

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

HISTORY

 

The Ahmedabad unit of subject was taken over in 1969 and a major modernisation and expansion programme was carried out to revive it. The company was one of the first units to manufacture indigo denim in 1986. In 1994, the company commissioned its 100% export-oriented spinning unit (cap.: 30,204 spindles) at a capital outlay of Rs 740.00 Millions. The company's principal products include cotton yarn and cotton fabrics as also blended yarn and man-made fabrics. In 1995, the company replaced 20 narrow-width Ruti looms with 12 Sulzer 390 cm wide-width looms. To achieve better capacity utilisation, six Sulzer wide-width looms along with one Schlafhorst rotor spinning machine and other balancing machines were installed and commissioned in Sep.'95. This will increase the production of denim by 25%. The company plans to improve the quality of yarn for the export market, using sophisticated control equipment, while also planning to introduce stretch denim fabrics. Due to the recessionary trend experienced by the Textile industry and the depressed export market, the steep competition from the unorganised sector resulted in erosion in the profitability of the company during the year 1999-2000. To increase the production of Denim Fabrics the company has installed 20 Second hand Picanol Airjet Looms.

 

RESULTS OF OPERATIONS

 

During the year, the operations of the Company were  severally affected  due  to increase in the input cost of major  raw  materials  like cotton,  dyes and  chemicals, power and fuel and high  volatility  in  foreign exchange market which coupled with global recession lead to lack of  demand and  drop  in consumer sentiments. The Company had to exercise  caution  in giving  material  due to non availability of finance in trade  circle.  The Company had to resort to reduce its production. All these factors  affected the  Company's  operations and to overcome this distressed  situation,  the Company  has  requested the lenders to refer the matter to  Corporate  Debt Restructuring  (CDR)  Cell  and accordingly IDBI  Bank  Limited,  the  lead financial  institution referred the matter to Corporate Debt  Restructuring (CDR) Cell and the same was approved.

 

During  the year, due to the reasons mentioned above, the turnover  of  the Company  was lower by 18.45% at Rs. 1570.700 Millions as compared to  Rs.1926.100 Millions in the previous year.

 

The Company has incurred a net loss of Rs.283.700 Millions against the  previous year net loss of Rs. 176.000 Millions.

 

CORPORATE DEBT RESTRUCTURING

 

The  Company  has been granted a Restructuring Package by  Corporate  Debt Restructuring  (CDR)  Cell under the CDR Mechanism of RBI  vide  Letter  of Approval  (LOA) No. BYCDR/AG No. 1110/2008-2009 dated 26th  February,  2009 for  restructuring the Company's existing financial assistance  availed  of from  the Institutional Lenders and Working Capital Banks, and  sanctioning additional  financial  assistance to the Company in the manner and  to  the extent  set out in the LOA. Once the scheme is implemented,  the  financial distress  on  the  Company will be eased out to some  extent.  The  salient features  of  the  scheme  are injection  of  fresh  working  capital  with concession  in the bank charges, reduction in margins, fresh term loan  for completion  of pending capital projects, funding of interest, reduction  in interest  rate, moratorium and deferment of principal repayments.  The  cut off date for the restructuring was 30th September, 2008.

 

COTTON

 

It  is  quite natural for their Government to increase  the  minimum  support price  to enable the farmers to earn by selling their produce at  a  higher value.  This  would result in increased cultivation of cotton in  terms  of acreage and by using better quality seed to obtain higher yield. On the eve of  the  general  election, the Government steeply  increased  the  minimum support  price  by 40% which resulted in a sharp increase in  prices  which gradually would have to be passed on to the consumer.

 

However,  cotton  is now available at a reasonable price from the  CCI  and NAFED, both Government organizations, and positive signs of revival of  the textile industry are visible.

 

EXPORT

 

Indian  textile  products  are incompetitive in the  world  market  due  to additional   support  being  provided  to  competing  countries  by   their respective  Governments. The Indian Textile Industry has a  good  potential for further increasing export but only with the support from our Government by  way  of soft Bank loans, reduced margin money, and  timely  payment  of export incentives.

 

Exports  in terms of FOB for the year Rs. 358.400 Millions,  a decrease of 13.37%.

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

INDUSTRY STRUCTURE

 

The  Indian Textiles Industry has an overwhelming presence in the  economic life  of the country. It plays a pivotal role through its  contribution  to industrial  output,  employment generation and the export earnings  of  the country.   Currently  it  contributes  about  14  percent   to   industrial production, 4 percent to the GDP and 13.50 percent to the country's  export earnings.  It  provides direct employment to over 35  million  people.  The textile  sector  is  the  second  largest  provider  of  employment   after agriculture.

 

This sector currently faces a huge slump, caused most recently by a  global recession in demand. Half a million jobs are officially lost.

 

The industry is expecting the situation to improve after the second half in the current financial year 2009-10.

 

Opportunity and Challenges

 

In the liberalized post-quota period, India has emerged as a major sourcing destination.  As  a measure of growing interest in the Indian  textile  and cloth  sector, a number of buyers opened their sourcing/liaison offices  in India.   Favourable  conditions  provide  India  with  strong   comparative advantage  over other competing countries in the Textile industry  included availability  of  adequate  raw  material and low  labour  cost,  etc.  The revolution in organized retailing would increase the consumption of apparel and made-ups.

 

The  volatility  in the raw material prices  foreign  Exchange  fluctuation higher  interest-cost,  high power cost and delay in  disbursement  of  TUF loans  subsidies are some of the major challenges the textile  industry  is facing.

 

INDUSTRIAL RELATIONS AND HUMAN RESOURCE MANAGEMENT

 

The  Company  has cordial and harmonious relations with its  employees.  It always  recognized the manpower as its asset and that people had  been  the driving  force  for growth and expansion of the Company.  The  Company  has taken  a number of new initiatives, to improve efficiency, reduce cost  and has also laid down special emphasis on the training and development of  its employees

 

Fixed Assets

 

v      Land

v      Building

v      Plant and Machinery

v      Furniture, Fixture and Other Equipment

v      Vehicles

 

As Per Website Details

 

They are a professionally managed company headed by Managing Director Mr. Arvind Somany and guided by their Chairman Mr. S K Somany.

 

A team of highly qualified professionals manages the day to day affairs of the company.

 

They are guided by the belief “Customer First” in their practices. In that direction our corporate philosophy is – “Innovate and Produce only the Best in accordance with Consumer Preferences at Right Price and in Right Time”.

 

Their Chairman’s emphasis on Quality and Technology Up-gradation and Managing Director’s obsession with Innovation and Customer Orientation helped us not only in sailing through rough weathers of Globalisation but emerged as a strong player in this competitive environment.

 

 

 

 

 

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 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.54.44

UK Pound

1

Rs.87.00

Euro

1

Rs.69.47

 

 

INFORMATION DETAILS

 

Report Prepared by :

SDA

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

3

OPERATING SCALE

1~10

3

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

3

--PROFITABILIRY

1~10

--

--LIQUIDITY

1~10

3

--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

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

28

 

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

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

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.