MIRA
INFORM REPORT
|
Report Date : |
10.07.2012 |
IDENTIFICATION DETAILS
|
Name : |
GTN TEXTILES LIMITED |
|
|
|
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Registered
Office : |
Door No VIII/ 911 Erumathala Post, Aluva Ernakulam - 683105, Kerala |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
28.03.2005 |
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Com. Reg. No.: |
09-018062 |
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|
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Capital
Investment / Paid-up Capital : |
Rs. 116.405 Millions |
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|
|
|
CIN No.: [Company Identification
No.] |
L18101KL2005PLC018062 |
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|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHNG00626D |
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PAN No.: [Permanent Account No.] |
AAACG8605N |
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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
: |
Manufacturer and Exporter of Cotton Yarn. |
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|
|
No. of Employees
: |
943 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (43) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 1400000 |
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|
|
Status : |
Satisfactory |
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|
|
Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having satisfactory track. Trade
relations are reported to be fair. Business is active. Payments are reported
to be usually correct and as per commitment. The company can be considered for normal 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 (30.09.2011) |
Current Rating (31.12.2011) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office : |
Door No VIII/ 911 Erumathala Post, Aluva Ernakulam - 683105, |
|
Tel. No.: |
91-484-3080100 |
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Fax No.: |
91-484-2838585 |
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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.: |
91-22-32060265/ 32060266 |
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Fax No.: |
91-22-22874144 |
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E-Mail : |
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|
Marketing/ Head Office : |
3rd Floor, Palal Towers, |
|
Tel. No.: |
91-484-3928300 |
|
Fax No.: |
91-484-2370812/ 3928380 |
|
E-Mail : |
DIRECTORS
AS ON 31.03.2011
|
Name : |
Mr. B K Patodia |
|
Designation : |
Chairman and Managing Director |
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|
|
|
Name : |
Mr. N K Bafna |
|
Designation : |
Independent Director |
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Date of Birth/Age : |
03.07.1939 |
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Qualification : |
B.Com, FCA, Law Graduate |
|
Date of Appointment : |
18.5.2008 |
|
Other Directorship: |
v Patspin India Limited v Prime Urban Development India Limited v National Collateral Management Services Limited |
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|
|
|
Name : |
Mr. C D Thakker |
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Designation : |
Non-Executive Non-Independent Director |
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|
|
Name : |
Mr. B L Singhal |
|
Designation : |
Independent Director |
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|
Name : |
Mr. R Rajagopalan |
|
Designation : |
Independent Director |
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|
Name : |
Mr. Prem Malik |
|
Designation : |
Independent Director |
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Date of Birth/Age : |
03.02.1942 |
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Qualification : |
Post Graduate, |
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Date of Appointment : |
17.12.2005 |
|
Other Directorship : |
v Gyscoal Alloys Limited v Spentex Industries Limited v Indo Count Industries Limited v Alder Trading Company Private Limited v Smillesville Care Private Limited v CLC Textiles Park Private Limited |
KEY EXECUTIVES
|
Name : |
Mr. E K Balakrishnan |
|
Designation : |
General Manager and Company Secretary |
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|
|
|
Name : |
Mr. P C Seksaria |
|
Designation : |
Chief Executive |
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|
|
|
Name : |
Mr. A K Warerkar |
|
Designation : |
Chief Financial Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.03.2012
|
Category
of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
5,022,089 |
43.14 |
|
|
2,215,113 |
19.03 |
|
|
7,237,202 |
62.17 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
7,237,202 |
62.17 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
1,686 |
0.01 |
|
|
842 |
0.01 |
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|
87,377 |
0.75 |
|
|
2,000 |
0.02 |
|
|
91,905 |
0.79 |
|
|
|
|
|
|
748,642 |
6.43 |
|
|
|
|
|
|
2,923,424 |
25.11 |
|
|
580,331 |
4.99 |
|
|
58,974 |
0.51 |
|
|
50,135 |
0.43 |
|
|
8,839 |
0.08 |
|
|
4,311,371 |
37.04 |
|
Total Public shareholding (B) |
4,403,276 |
37.83 |
|
Total (A)+(B) |
11,640,478 |
100.00 |
|
© Shares held by Custodians and against which Depository Receipts have
been issued |
-- |
-- |
|
|
-- |
-- |
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|
-- |
-- |
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|
-- |
-- |
|
Total (A)+(B)+(C) |
11,640,478 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 millionBUSINESS DETAILS
|
Line of Business : |
Manufacturer and Exporter of Cotton Yarn. |
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Products : |
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PRODUCTION STATUS AS ON (31.03.2011)
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Spindles |
In Nos. |
N.A. |
58,864 |
N.A. |
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Yarn |
Kgs. |
N.A. |
N.A. |
3.812 |
GENERAL INFORMATION
|
No. of Employees : |
943 (Approximately) |
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Bankers : |
v
Central Bank of v
State Bank of v
Export-Import Bank of v
State Bank of Travancore v
Bank of v
Axis Bank Limited |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
M Chartered Accountants |
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Address : |
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Joint Ventures : |
Patspin India
Limited |
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|
|
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Associates : |
GTN Enterprises
Limited |
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|
Enterprises/Entities
having common Key Management Personnel : |
v
Yarn
Syndicate Limited v
Purav
Trading Company |
CAPITAL STRUCTURE
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1,20,00,000 |
Equity Shares |
Rs. 10/- each |
Rs. 120.000 Millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1,16,40,478 |
Equity Shares |
Rs. 10/- each |
Rs. 116.405
Millions |
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|
|
|
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Note: Out of the above,1,15,40,378 Equity shares of Rs.10 each, issued for consideration other than cash, in pursuance of the Scheme of Arrangement
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 |
116.405 |
116.405 |
116.405 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
249.261 |
211.165 |
232.978 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
365.666 |
327.570 |
349.383 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
963.411 |
923.108 |
1069.653 |
|
|
2] Unsecured Loans |
3.888 |
3.070 |
3.821 |
|
|
TOTAL BORROWING |
967.299 |
926.178 |
1073.474 |
|
|
DEFERRED TAX LIABILITIES |
56.912 |
47.912 |
58.212 |
|
|
|
|
|
|
|
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TOTAL |
1389.877 |
1301.660 |
1481.069 |
|
|
|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
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FIXED ASSETS [Net Block] |
694.298 |
770.477 |
836.328 |
|
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Capital work-in-progress |
0.000 |
0.000 |
0.404 |
|
|
|
|
|
|
|
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INVESTMENT |
198.483 |
198.483 |
198.483 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
384.137
|
332.697 |
373.512 |
|
|
Sundry Debtors |
111.745
|
90.838 |
77.058 |
|
|
Cash & Bank Balances |
106.802
|
59.533 |
36.006 |
|
|
Other Current Assets |
0.734
|
19.272 |
0.042 |
|
|
Loans & Advances |
135.827
|
120.708 |
65.488 |
|
Total
Current Assets |
739.245
|
623.048 |
552.106 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
220.310
|
272.366 |
89.622 |
|
|
Other Current Liabilities |
21.839
|
17.982 |
19.968 |
|
|
Provisions |
0.000
|
0.000 |
0.000 |
|
Total
Current Liabilities |
242.149
|
290.348 |
109.590 |
|
|
Net Current Assets |
497.096
|
332.700 |
442.516 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
3.338 |
|
|
|
|
|
|
|
|
TOTAL |
1389.877 |
1301.660 |
1481.069 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
1489.268 |
1230.509 |
981.860 |
|
|
|
Other Operating Income |
0.000 |
19.244 |
0.000 |
|
|
|
Other Income |
0.349 |
0.454 |
0.416 |
|
|
|
TOTAL (A) |
1489.617 |
1250.207 |
982.276 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of Materials |
856.426 |
641.147 |
545.203 |
|
|
|
Personnel Expenses |
177.062 |
148.346 |
138.119 |
|
|
|
Manufacturing Expenses |
182.618 |
158.209 |
178.866 |
|
|
|
Sales and Distribution Expenses |
45.010 |
33.537 |
35.821 |
|
|
|
Other Expenses |
37.061 |
55.272 |
102.086 |
|
|
|
Amortisation of Miscellaneous Expenditure |
0.000 |
3.338 |
2.158 |
|
|
|
Increase/(Decrease) in stocks |
4.761 |
98.666 |
(28.293) |
|
|
|
TOTAL (B) |
1302.938 |
1138.515 |
973.960 |
|
|
|
|
|
|
|
|
Less |
PROFIT/
LOSS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
186.679 |
111.692 |
8.316 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
74.717 |
75.978 |
74.324 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
LOSS BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
111.962 |
35.714 |
(66.008) |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
64.866 |
67.827 |
68.604 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ LOSS
BEFORE TAX (E-F) (G) |
47.096 |
(32.113) |
(134.612) |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
9.000 |
(10.300) |
(31.200) |
|
|
|
|
|
|
|
|
|
|
PROFIT/ LOSS
AFTER TAX (G-H) (I) |
38.096 |
(21.813) |
(103.412) |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
0.000 |
0.000 |
38.732 |
|
|
|
|
|
|
|
|
|
Add |
Transferred to/(from) General Reserve |
0.000 |
21.813 |
64.680 |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
38.096 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Export |
839.722 |
573.176 |
649.179 |
|
|
TOTAL EARNINGS |
839.722 |
573.176 |
649.179 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
352.813 |
306.570 |
369.857 |
|
|
|
Stores & Spares |
3.118 |
2.541 |
2.698 |
|
|
|
Capital Goods |
0.000 |
0.845 |
4.034 |
|
|
TOTAL IMPORTS |
355.931 |
309.956 |
376.589 |
|
|
|
|
|
|
|
|
|
|
Earnings/ Loss
Per Share (Rs.) |
3.27 |
(1.87) |
(8.88) |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
31.03.2012 |
|
|
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
|
Sales Turnover |
365.100 |
326.200 |
334.100 |
370.200 |
|
Total Expenditure |
330.700 |
294.400 |
312.000 |
373.000 |
|
PBIDT (Excl
OI) |
34.400 |
31.800 |
22.100 |
(2.800) |
|
Other Income |
0.000 |
0.000 |
0.100 |
0.500 |
|
Operating
Profit |
34.400 |
31.800 |
22.200 |
(2.300) |
|
Interest |
19.800 |
18.700 |
21.000 |
28.200 |
|
Exceptional
Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
14.600 |
13.100 |
1.200 |
(30.500) |
|
Depreciation |
15.700 |
15.800 |
15.900 |
15.900 |
|
Profit Before
Tax |
(1.100) |
(2.700) |
(14.700) |
(46.400) |
|
Tax |
0.000 |
0.000 |
0.000 |
(20.600) |
|
Reported PAT |
(1.100) |
(2.700) |
(14.700) |
0.000 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
(25.800) |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
(1.100) |
(2.700) |
(14.700) |
(25.800) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
2.56 |
(1.74) |
(10.53) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
3.16 |
(2.61) |
(13.71) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
3.29 |
(2.30) |
(9.70) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.13 |
(0.10) |
(0.39) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
3.31 |
3.71 |
3.39 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.05 |
2.15 |
5.04 |
LOCAL AGENCY FURTHER INFORMATION
|
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1. Year of Establishment |
Yes |
|
2. Locality of the firm |
Yes |
|
3. Constructions of the firm |
Yes |
|
4. Premises details |
No |
|
5. Type of Business |
Yes |
|
6. Line of Business |
Yes |
|
7. Promoter’s background |
Yes |
|
8. No. of Employees |
Yes |
|
9. Name of person contacted |
No |
|
10. Designation of contact person |
No |
|
11. Turnover of firm for last three years |
Yes |
|
12. Profitability for last three years |
Yes |
|
13. Reasons for variation <> 20% |
-- |
|
14. Estimation for coming financial year |
No |
|
15. Capital in the business |
Yes |
|
16. Details of sister concerns |
Yes |
|
17. Major suppliers |
No |
|
18. Major customers |
No |
|
19. Payments terms |
No |
|
20. Export / Import details |
No |
|
21. Market information |
-- |
|
22. Litigations that the firm / promoter involved |
-- |
|
23. Banking Details |
Yes |
|
24. Banking facility details |
Yes |
|
25. Conduct of the banking account |
-- |
|
26. Buyer visit details |
-- |
|
27. Financials, if provided |
Yes |
|
28. Incorporation details, if applicable |
Yes |
|
29. Last accounts filed at ROC |
Yes |
|
30. Major Shareholders, if available |
No |
PERFORMANCE REVIEW
Performance of the Company during the year has been impressive, led by
strong demand from international as well as domestic markets. The Company’s
business was adversely affected during 2008-09 global financial crisis.
However, as reported in the previous Directors’ Report, the Company witnessed
upswing in consumer demand for textile products from second half of Fiscal
2009-10. This was possible as many of the global economies progressed
commendably, sooner than expected, leading to revival of textile industry.
Total revenues of the company for the year increased to Rs.1489.300 Millions
from Rs.1230.500 Millions. Operating Profit and Cash Profit improved to
Rs.186.700 Millions and Rs.112.000 Millions from Rs.111.700 Millions and
Rs.35.700 Millions respectively in the previous year. At net level, there was a
remarkable turn around with Profit before Tax at Rs.47.100 Millions as against
a loss of Rs.32.100 Millions in the previous year. The year was marked with
excessive volatility in cotton prices which peaked to historical high owing to
shortfall in crop in many of the cotton growing countries. However, your
management’s core competency in procurement of cotton helped the Company in
judicious and timely buying of raw material. As a result, while the cotton cost
could be averaged out, margins could be improved through yarn prices which remained
higher in line with cotton prices. The performance could have been still better
but for loss of production during negotiation of long term work load and wages
agreement which was concluded with workmen during January 2011.
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 per cent 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 2.205 Millions looms in 2008-09 to 2.270 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 per cent. 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 per cent. 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 under review.
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 per cent 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 10.310 Millions hectares and crop 29.5 Millions 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 11.161 Millions hectares and a crop of 31.2
Millions bales per hectare yield in the cotton season 2011-12 works out lower
at 475 kgs.
Earlier, the CAB had estimated the crop at 32.9 Millions 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 5.5
Millions 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
2,42,000 metric tons, registering a growth of 15 per cent 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 12.0 Millions
hectares and preliminary estimates are that cotton production in the next
season will be around 35.0 Millions 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 per cent 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 per cent 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 per cent this season, could rebound to 39 per cent in
2011-12. This would be lower than the 10-year average of 49 per cent 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.
OPPORTUNITIES AND
THREATS
The health of textile units is primarily dependent on adequate
availability of quality cottons at competitive prices. With the augmented
supply of quality seed and larger production of hybrids and Bt. cottons,
production of cotton in the coming season 2011-12 is forecast to be
comfortable.
It may be stated that Duty Drawback is not incentive but only refund of
indirect taxes suffered by export products. Denial of this legitimate due is
totally unjustified. Further, remission of duties suffered by exported products
is totally WTO-compliant. Withdrawal of Duty Drawback runs counter to the
well-accepted Government Policy of not exporting taxes. One can only hope that
Government will restore the Duty Drawback for cotton yarn.
SEGMENT-WISE OR
PRODUCT-WISE PERFORMANCE
The Company is engaged in the business of manufacture and export of
cotton yarn and accordingly this is the only Single Reportable Segment.
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.
STATEMENT OF STANDALONE AUDITED FINANCIAL RESULTS FOR THE QUARTER AND
YEAR ENDED 31.03.2012
(Rs. in Millions)
|
Particular |
Quarter Ended |
Year Ended |
|
|
|
31.03.2012 (Audited) |
31.12.2011 (Unaudited) |
31.03.2012 (Audited) |
|
Income from Operations |
|
|
|
|
Net Sales/Income from Operations |
360.800 |
313.400 |
1357.900 |
|
Other Operating Income |
9.400 |
21.900 |
43.300 |
|
Total Income from
operations (net) |
370.200 |
335.300 |
1401.200 |
|
|
|
|
|
|
Expenses |
|
|
|
|
(a) Cost of Materials Consumed |
215.800 |
217.400 |
912.700 |
|
(b) Purchase of stock-in-trade |
19.500 |
0.000 |
28.200 |
|
(c) changes in inventories of finished goods, work in progress and stock-in-trade |
21.500 |
(43.300) |
(101.400) |
|
(d) Employee benefit expenses |
52.900 |
52.000 |
205.400 |
|
(e) Depreciation and amortization expenses |
15.900 |
15.900 |
63.200 |
|
(f) Power and Fuel |
32.700 |
33.100 |
125.500 |
|
(g) Other Expense |
30.600 |
52.600 |
141.300 |
|
Total Expenses |
388.900 |
327.700 |
1374.900 |
|
Profit from Operations
before Other Income, Finance costs and Exceptional item and Tax |
(2.800) |
23.500 |
89.500 |
|
Profit from Operations
before Other Income, Finance costs and Exceptional item |
(18.700) |
7.600 |
26.300 |
|
Other Income |
0.500 |
1.600 |
3.900 |
|
Profit/ Loss from
Ordinary Activities before Finance costs and Exceptional item |
(18.200) |
9.200 |
30.200 |
|
Finance costs |
28.200 |
23.900 |
95.100 |
|
Profit/ Loss after
Interest but Depreciation and Exceptional item |
(30.500) |
1.200 |
(1.700) |
|
Profit/ Loss from
Ordinary Activities after Finance costs but Exceptional item |
(46.400) |
(14.700) |
(64.900) |
|
Exceptional item |
-- |
-- |
-- |
|
Profit/ Loss from Ordinary Activities
before tax |
(46.400) |
(14.700) |
(64.900) |
|
Tax Expenses |
|
|
|
|
- Current Tax |
0.000 |
0.000 |
0.000 |
|
- MAT Credit
Entitlement |
0.000 |
0.000 |
0.000 |
|
- Deferred Tax
Liability/ Assets |
(20.600) |
0.000 |
(20.600) |
|
Net Profit/ Loss from Ordinary Activities
after tax |
(25.800) |
(14.700) |
(44.300) |
|
Extraordinary
Items |
-- |
-- |
-- |
|
Net Profit for the period |
(25.800) |
(14.700) |
(44.300) |
|
Paid- up Equity
Share Capital (Face value
of the share – Rs. 10) |
116.400 |
116.400 |
116.400 |
|
Reserves
excluding revaluation reserves as per balance sheet of Previous Accounting
Year |
-- |
-- |
205.000 |
|
Earnings per
share (before extraordinary items) (of Rs. 10/-
each) (not annualized) |
(2.22) |
(1.26) |
(3.81) |
|
|
|
|
|
|
PARTICULARS OF SHAREHOLDING |
|
|
|
|
1. Public
shareholding |
|
|
|
|
Number of
Shares |
4403276 |
4403276 |
4403276 |
|
Percentage of Shareholding |
37.83 |
37.83 |
37.83 |
|
2. Promoters
and promoter group shareholding |
|
|
|
|
a)
Pledged/Encumbered |
|
|
|
|
- Number of Shares |
Nil |
Nil |
Nil |
|
- Percentage of Shares (as a % of the Total Shareholding
of promoter and promoter group) |
N.A. |
N.A. |
N.A. |
|
- Percentage of Shares (as a % of the Total Share Capital
of the Company) |
N.A. |
N.A. |
N.A. |
|
|
|
|
|
|
Non - encumbered |
|
|
|
|
- Number of
Shares |
7237202 |
7237202 |
7237202 |
|
- Percentage
of Shares (as a % of the
total shareholding of promoter and promoter
group) |
100 |
100 |
100 |
|
- Percentage
of Shares (as a % of
the total share capital of the company) |
62.17 |
62.17 |
62.17 |
|
|
Particulars |
Quarter Ended 31st
March 2012 |
|
B |
Investor
complaints |
|
|
|
Pending at the beginning of the quarter |
Nil |
|
|
Received during the quarter |
2 |
|
|
Disposed of during the quarter |
2 |
|
|
Remaining unresolved at the end of the quarter |
Nil |
STANDALONE STATEMENT OF ASSETS AND LIABILITIES
(Rs. in Millions)
|
Particulars |
31.03.2012 |
|
|
A. EQUITY AND LIABILITIES |
Audited |
|
|
1.
Shareholders Funds |
|
|
|
a] Share Capital |
116.400 |
|
|
b] Reserves and Surplus |
205.000 |
|
|
Sub-total – Shareholders’
funds |
321.400 |
|
|
|
|
|
|
2. Non-current
Liabilities |
|
|
|
a] Long term Borrowings |
368.200 |
|
|
b] Deferred Tax Liabilities |
36.400 |
|
|
c] Other
Long term liabilities |
-- |
|
|
d] Long term provisions |
-- |
|
|
Sub-total -
Non-current Liabilities |
404.600 |
|
|
|
|
|
|
3. Current Liabilities |
|
|
|
a] Short term Borrowings |
254.700 |
|
|
b] Trade Payables |
323.300 |
|
|
c] Other Current Liabilities |
218.000 |
|
|
d] Short Term Provision |
11.000 |
|
|
Sub-total - Current
Liabilities |
807.000 |
|
|
|
|
|
|
TOTAL - EQUITY
AND LIABILITIES |
1533.000 |
|
|
|
|
|
|
B ASSETS |
|
|
|
1. Non-current assets |
|
|
|
a] Fixed assets |
664.500 |
|
|
b] Non-current investment |
198.500 |
|
|
c] long Term loans and Advances |
9.700 |
|
|
d] Other non-current assets |
-- |
|
|
Sub-total – Non- current assets |
872.700 |
|
|
|
|
|
|
2.
CURRENT ASSETS |
|
|
|
|
Current Investments |
--
|
|
|
Inventories |
407.700
|
|
|
Trade Receivables |
139.000
|
|
|
Cash & Bank Balances |
49.500
|
|
|
Short Term loans and advances |
62.100
|
|
|
Other Current Assets |
2.000
|
|
Sub-total – Current Assets |
660.300
|
|
|
|
|
|
|
TOTAL - ASSETS |
1533.000 |
|
Note:
1. The audited results were reviewed by the
Audit Committee and approved by the Board of Directors at their meeting held on
23rd May, 2012.
2. The company is engaged principally in Yarn business
and as such has only Single reportable Business Segment i.e. Yarn
3. The figures of last quarter are the
balancing figures between audited figures in respect of the full financial year
and the published year to date figures upto third quarter of the current
financial year.
4. Previous period / Year’s figures have been
regrouped to be in conformity with the Revised Schedule VI to the Companies
Act, 1956.
FIXED ASSETS
v
Land-Freehold
v
Buildings
v
Plant and Machinery
v
Electrical Installations
v
Furniture and Office Equipments
v
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. 56.02 |
|
|
1 |
Rs. 86.78 |
|
Euro |
1 |
Rs. 68.83 |
INFORMATION DETAILS
|
Report Prepared by
: |
BVA |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
43 |
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 |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.