MIRA
INFORM REPORT
|
Report Date : |
26.06.2012 |
IDENTIFICATION DETAILS
|
Name : |
CHESLIND TEXTILES LIMITED |
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Registered
Office : |
B Muduganapalli Bagalur, Hosur Taluk - 635103, Tamilnadu |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
26.07.1989 |
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Com. Reg. No.: |
18-005902 |
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Capital
Investment / Paid-up Capital : |
Rs. 230.939 Millions |
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CIN No.: [Company Identification
No.] |
L17111TZ1989PLC005902 |
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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 of Cotton Yarn, Knitted Fabrics etc |
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No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
B (29) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Maximum Credit Limit : |
USD 1200000 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having moderate track. There appears
some accumulated losses recorded by the company. However, trade relations are
reported to be fair. Business is active. Payments are reported to be slow but
correct. The company can be considered for business dealings with some
cautions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.09.2011) |
Current Rating (31.12.2011) |
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|
A1 |
A1 |
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Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
B Muduganapalli Bagalur, Hosur Taluk - 635103, |
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Tel. No.: |
91- 4344-255500/05 |
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Fax No.: |
91-4344-254276 |
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E-Mail : |
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Website : |
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Corporate and Marketing Office
: |
No. 147, 12th Main, 3rd Block Koramangala, |
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Tel. No.: |
91-80-25538622/ 23 |
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Fax No.: |
91-80-25538559 |
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E-Mail : |
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Sales Office : |
No.304, Krishna House, 4805/24, |
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Tel. No.: |
91-11-23276893/ 23289068 |
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Fax No.: |
91-11-23254475 |
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Plant locations : |
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DIRECTORS
AS ON 23.07.2011
|
Name : |
Mr. Ravi Jhunjhunwala |
|
Designation : |
Chairman, Promoter, Non-Executive |
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|
Name : |
Mr. Riju Jhunjhunwala |
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Designation : |
Promoter, Non-Executive |
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Name : |
Mr. Prakash Maheshwari |
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Designation : |
Promoter, Non-Executive |
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Name : |
Mr. G. B. Bagrodia |
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Designation : |
Independent, Non-Executive |
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Name : |
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Designation : |
Independent, Non-Executive |
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Name : |
Mr. A. Murali |
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Designation : |
Independent, Non-Executive |
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Name : |
Mr. T. K. Arun (TIDCO Nominee) |
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Designation : |
Independent, Non-Executive |
KEY EXECUTIVES
|
Name : |
Mr. Vinod Mehta |
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Designation : |
President and Chief Executive Officer |
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Name : |
Mr. Kamal Kishore Mittal |
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Designation : |
Senior Vice President (Marketing) |
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Name : |
Mr. V V Raju |
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Designation : |
Vice President (Operations) |
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Name : |
Mr. P.V.S. Murthy |
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Designation : |
General Manager (Finance) and Chief Finance Officer |
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Name : |
Mr. M Rajaram |
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Designation : |
General Manager (Human Resource) |
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Name : |
Mr. Ananta R Deshpande |
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Designation : |
Company Secretary |
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 |
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|
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|
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|
17320400 |
75.00 |
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|
17320400 |
75.00 |
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Total shareholding of Promoter and Promoter Group (A) |
17320400 |
75.00 |
|
(B) Public Shareholding |
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|
8300 |
0.04 |
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|
700 |
-- |
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|
9000 |
0.04 |
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|
447825 |
1.94 |
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|
3938004 |
17.05 |
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|
1003856 |
4.35 |
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|
374850 |
1.62 |
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|
2961 |
0.01 |
|
|
371789 |
1.61 |
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Trusts |
100 |
-- |
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|
5764535 |
24.96 |
|
Total Public shareholding (B) |
5773535 |
25.00 |
|
Total (A)+(B) |
23093935 |
100.00 |
|
© Shares held by Custodians and against which Depository Receipts have
been issued |
-- |
-- |
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|
-- |
-- |
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-- |
-- |
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|
-- |
-- |
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Total (A)+(B)+(C) |
23093935 |
100.00 |
(1) Indian
Bodies Corporate
Individual shareholders holding nominal
share capital up to Rs.0.100 millionBUSINESS DETAILS
|
Line of Business : |
Manufacturer of Cotton Yarn, Knitted Fabrics etc |
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Products : |
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PRODUCTION STATUS AS ON (31.03.2011)
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
|
Bagalur Unit |
|
|
|
|
Spindles |
|
64,656 |
64,656 |
|
Knitting |
|
0 |
0 |
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Doubling |
MT |
1,176 |
1,176 |
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Particulars |
Kgs (in Millions) |
Actual Production |
|
Cotton Yarn |
7.079 |
16,62.547 |
GENERAL INFORMATION
|
No. of Employees : |
Not Available |
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors 1 : |
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Name : |
K P Rao and Company Chartered Accountants |
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Address : |
“Poornima” 25, |
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Auditors 2 : |
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Name : |
M. Bhaskara Rao and Company Chartered Accountants |
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Address : |
“Kautilya”, 5-D, 5th Floor 6-3-652, Somajiguda, |
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Holding Company : |
RSWM Limited |
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Subsidiary or Joint
Venture of RSWM Limited: |
RSWM International B.V. Holland |
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Group Company : |
BSL Limited |
CAPITAL STRUCTURE
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
3,00,00,000 |
Equity Shares |
Rs. 10/- each |
Rs. 300.000 Millions |
|
10,00,000 |
Redeemable Preference Shares |
Rs. 100/- each |
Rs. 100.000 Millions |
|
|
Total |
|
Rs. 400.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
23093935 |
Equity Shares |
Rs. 10/- each |
Rs. 230.939
Millions |
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Note: 23093935 Equity Shares of Rs.10 each fully paid of
which 15257900 equity shares are held by RSWM Limited, the holding company
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 |
230.939 |
230.939 |
230.939 |
|
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
118.976 |
118.976 |
38.845 |
|
|
4] (Accumulated Losses) |
(34.806) |
(152.065) |
(39.844) |
|
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NETWORTH |
315.109 |
197.850 |
229.940 |
|
|
LOAN FUNDS |
|
|
|
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1] Secured Loans |
881.639 |
917.134 |
980.390 |
|
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2] Unsecured Loans |
120.000 |
126.294 |
74.600 |
|
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TOTAL BORROWING |
1001.639 |
1043.428 |
1054.990 |
|
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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|
|
|
|
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TOTAL |
1316.748 |
1241.278 |
1284.930 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
829.522 |
915.596 |
1010.812 |
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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INVESTMENT |
0.000 |
0.000 |
0.002 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
513.542
|
300.317 |
234.027 |
|
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Sundry Debtors |
83.261
|
37.685 |
212.221 |
|
|
Cash & Bank Balances |
20.845
|
20.066 |
25.230 |
|
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Other Current Assets |
63.190
|
59.870 |
61.747 |
|
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Export Incentives Receivables |
4.596
|
17.451 |
2.337 |
|
|
Loans & Advances |
20.944
|
24.208 |
12.582 |
|
Total
Current Assets |
706.378
|
459.597 |
548.144 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
141.485
|
62.542 |
207.790 |
|
|
Other Current Liabilities |
68.782
|
62.634 |
53.156 |
|
|
Provisions |
8.885
|
8.739 |
13.082 |
|
Total
Current Liabilities |
219.152
|
133.915 |
274.028 |
|
|
Net Current Assets |
487.226
|
325.682 |
274.116 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
1316.748 |
1241.278 |
1284.930 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
1849.726 |
1329.329 |
1167.694 |
|
|
|
Other Income |
4.678 |
2.886 |
18.347 |
|
|
|
TOTAL (A) |
1854.404 |
1332.215 |
1186.041 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Materials |
1100.715 |
681.604 |
780.440 |
|
|
|
Operating and other Expenditure |
459.550 |
407.026 |
556.338 |
|
|
|
Increase/(Decrease) in Stocks |
(24.954) |
79.641 |
(12.053) |
|
|
|
TOTAL (B) |
1535.311 |
1168.271 |
1324.725 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
319.093 |
163.944 |
(138.684) |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
108.323 |
101.472 |
98.546 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
210.770 |
62.472 |
(237.230) |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
93.512 |
90.468 |
90.952 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ LOSS
BEFORE TAX (E-F) (G) |
117.258 |
(27.996) |
(328.182) |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
0.000 |
4.094 |
9.537 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ LOSS
AFTER TAX (G-I) (J) |
117.258 |
(32.090) |
(337.719) |
|
|
|
|
|
|
|
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|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
(152.064) |
(119.974) |
217.745 |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
(34.806) |
(152.064) |
(119.974) |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Export |
1080.597 |
756.175 |
579.019 |
|
|
TOTAL EARNINGS |
1080.597 |
756.175 |
579.019 |
|
|
|
|
|
|
|
|
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|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
40.732 |
77.679 |
155.239 |
|
|
|
Stores & Spares |
11.223 |
8.835 |
12.944 |
|
|
|
Capital Goods |
Nil |
Nil |
12.153 |
|
|
TOTAL IMPORTS |
51.955 |
86.514 |
180.336 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
5.08 |
(1.39) |
(14.62) |
|
QUARTERLY /
SUMMARISED RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
31.03.2012 |
|
|
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
|
Sales Turnover |
420.600 |
314.900 |
302.800 |
476.000 |
|
Total Expenditure |
470.700 |
322.700 |
310.100 |
457.100 |
|
PBIDT (Excl
OI) |
(50.100) |
(7.800) |
(7.300) |
18.900 |
|
Other Income |
2.200 |
1.500 |
1.900 |
0.300 |
|
Operating
Profit |
(47.900) |
(6.300) |
(5.400) |
19.200 |
|
Interest |
36.600 |
35.300 |
31.700 |
31.800 |
|
Exceptional
Items |
(47.600) |
(2.300) |
(3.500) |
0.000 |
|
PBDT |
(132.100) |
(43.900) |
(40.600) |
(12.600) |
|
Depreciation |
22.100 |
22.300 |
22.400 |
20.600 |
|
Profit
Before Tax |
(154.200) |
(66.200) |
(63.000) |
(33.200) |
|
Tax |
0.000 |
0.000 |
0.000 |
0.000 |
|
Reported PAT |
(154.200) |
(66.200) |
(63.000) |
(33.200) |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
(154.200) |
(66.200) |
(63.000) |
(33.200) |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
6.32 |
(2.41) |
(28.47) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
6.34 |
(2.11) |
(28.11) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
7.63 |
(2.04) |
(21.05) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.37 |
(0.14) |
(1.43) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
3.87 |
5.95 |
5.78 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.22 |
3.43 |
2.00 |
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 |
No |
|
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 |
Yes |
OPERATIONAL
PERFORMANCE
The turnover during the year increased by 39% from Rs.1329.300 Millions,
including Rs.24.500 Millions trading turnover, during the previous year to
Rs.1849.700 Millions in the current year. The increase in turnover is primarily
due to increase in production to 7079 MT against 6241 MT in previous year and
increase in selling price. The production lines were also put on a fixed set up
and the marketing was re-oriented to get regular orders for the production as
per the fixed set up. While going for fixed set up due care was taken to have
high value added product mix in coarse and fine counts taking 100% organic
cotton products and Indian long staple cotton. During the year the export
turnover increased to Rs.1089.300 Millions from Rs.763.700 Millions in the previous
year resulting in export growth of 43%. During the year the Company earned cash
profit of Rs.210.800 Millions and net profit of Rs.117.300 Millions as against
cash profit of Rs. 62.500 Millions and net loss of Rs.32.100 Millions in the
previous year. The power situation in the state of Tamilnadu remained critical
causing regular power cuts, load shedding, peak hour restrictions and
unscheduled tripping. The Company has opted for power holiday and with this, it
explored purchasing power through Indian Energy Exchange. TNEB granted
permission for purchase of power. The production was maintained with captive
power plant though it caused extra cost of operation and with this the Company
has been able to supply the ordered quantities to its various customers in
time.
MANAGEMENT
DISCUSSION AND ANALYSIS
In continuation with various steps taken for reviving the operations of
the company during the Financial Year 2009-10, Financial Year 2010- 11 started
with great enthusiasm among all team members at CTL The activities in all areas
i.e., production, quality, HR, marketing etc started with full determination
and dedication by all team members for meeting the new challenges set for the
Financial Year 2010-11.
The power situation in Tamilnadu remained very critical and the unit is
still facing problem of 47% power cut including load shedding and peak hour
restrictions. The company has taken various steps under energy saving project
to save 10% of the total power consumption during the year. It was mainly in
the humidification plant and compressed air. The company has successfully
completed the project at a cost of Rs.12.900 Millions and saved about 9,000
units per day.
To make the company’s products more competitive in export market a
project for modernization involving Rs.7.600 Millions was taken up to improve
the quality of yarn. It paid rich dividend and company did not receive any
major complaint during the year from overseas customers to pay any claim. Production
has also increased during the year by 14% through various debottlenecking
exercises in the production process. This was achieved without increase in
power consumption.
In marketing front there was a shift in products during the year from
fine count to coarse count and the company has taken steps at the right time to
switch to organic cotton yarn. Although the main markets for organic yarn like
The Financial Year 2010-11 was very volatile for company’s raw material;
cotton. The raw material price reached to the
During the year the imported cotton price of Pima and
Looking to the situation where raw cotton was trading at very high
volatility and Government policy of restrictions on export of cotton yarn, the
company diversified its production to viscose fibre ( 10 R/F out of 64 R/Fs ).
With the help of parent company, RSWM Limited, the company got quota for
viscose fibre, which was otherwise not possible.
The company has given due attention for recruitment of manpower and
training. Various incentive schemes were introduced during the year to improve
the attendance of work force and this has resulted in low absenteeism during
the year. However, manpower will remain a crucial factor. With the improvements
all around in Indian economy manpower will be more and more scarce for this
kind of industry.
All payments of installments of term loans due during the year were made
in time. With the increase in cotton price to near about double of the previous
year there was shortage of working capital limits and the company’s bankers
supported by increasing the working capital from Rs.446.700 Millions to
Rs.574.500 Millions.
The company has planted about 400 saplings of various varieties during
the year and on various occasions. Bankers, associates and customers were also
encouraged to take part in this activity.
Certifications
All the certificates were renewed during the year on time and there is
no non compliance observed in any of the audits during the year.
The Company has following certifications:
- ISO 9001-2000
(QMS) issued by BUREAU VERITAS CERTIFICATION valid upto 22.09.2011
- Social
Accountability 8000-2008 issued by SGS Italia S.P.A, Systems and Services
Certification valid upto 06.02.2012
- Organic
Certificates GOTS issued by Control Union Certifications valid upto
23.11.2011
- Organic Certificates
OE 100 (Organic Exchange) issued by Control Union Certifications valid
upto 23.11.2011
- Oeko-Tex
(Hazardous Chemicals) issued by Testex valid upto 31.05.2011
- Flo - Cert
(Fair Trade) issued by Flo-Cert GmbH valid upto 06.04.2013
Strengths, weaknesses,
opportunities and threats:
Strengths, weaknesses, opportunities and threats for the Company’s
operations in particular are analyzed below:
Strengths:
- Diversified
product portfolio representing a wide range of cotton yarn products
including value added products like Gassed yarns, Organic and Elite yarns.
- Broad
customer profile ranging across Europe, Far East and
- Rich
experience and knowledge base acquired over the years to achieve the
desired technical and quality specifications as required by specific
customers in :
- Mixing of
various types of cotton
- Running
spinning machinery at variable speeds
- Processing of
finished yarn
- Support from
its parent Company (RSWM Limited) and LNJ Bhilwara Group.
Weaknesses:
- Scarcity of
financial resources.
- Reduced
capability for handling current assets: i.e. building up higher inventory
levels during peak cotton season; extending higher credit levels to its
customers etc.
Opportunities:
- Increased
capacities of high end shirting manufacturing in
- Immigration
of capacities by high end and renowned shirting fabric manufacturers to
- Increased
consumer demand for high end and value added shirting finished products in
the domestic market, inspite of low levels of consumer confidence worldwide.
- Growing
demand from West for 100% organic products and increasing cultivation of
organic cotton.
- Growing
demand from West for Fair Trade cotton and BCI cotton
Threats:
- Government
and Statutory policies on cotton and cotton made products like: MSP of
cotton, duty structure, export incentives, control of export of cotton
yarn etc.
- Power
supplies from the Grid can be erratic and power cuts can be unplanned.
- Availability
of skilled manpower because of possible migration to alternate sources of
employment.
- Highly
unstable market for cotton and yarn
Overall Outlook
With recovery of global recession and stabilization of working in
2010-11, the future outlook is promising.
Risks and Concerns
The Company is aware that there are always inherent risks in any
business operations. The Company comprehensively assesses these risks and
adopts prudent risk management strategies.
Market related risks:
The Company operates in a highly competitive environment with many small
and medium sized players. The cost of raw material (i.e. cotton) is a major
portion of the total costs of the Company. The prices of cotton are
unpredictable and are dependent on various factors like: production across the
globe, quality of production, stocks (quantity and quality), Government and
statutory policies, support pricing, subsidies, trading, etc. Any adverse
movement in their prices can have a negative impact on the performance of the
Company.
The budgeted sales plan for each financial year is arrived at the time
of preparation of the Annual Budget based on internal marketing objectives
coupled with available production facilities in order to maximize contribution
levels. Marketing plans are further broken up territory/country wise, mix wise
and product wise. Any change in the sales/marketing plan profile can
significantly alter the production plan, which is fine tuned on a month to
month basis in order to maximize contribution. Change in production plans
related to market situation can also affect the raw material availability and
procurement plans. Consequently, it is important to adhere to overall marketing
plans as far as possible and any major deviation will lead to sub optimal
utilization of assets and will have its consequent impact on contribution.
From this point of view, stability of markets and customers at least
during the financial cycle is an important pre-requisite.
The selling price of individual product is another market risk and
cannot be forecast easily. The selling price is dependent on the supply and
demand of the finished products (i.e. shirts) at the point-of-sale, which is
dependent on the consumer sentiments. In the event of fluctuations in selling
prices, it becomes necessary to explore alternate products and markets to
utilize the available production capacity without drop in contributions.
Raw material
procurement related risks:
Raw material procurement plans are directly derived from the variety
wise requirements generated from monthly production plans. Some varieties need
to be covered on longer time perspective, Indian long staple cotton. As
discussed earlier, the prices of raw cotton are dependent on a host of reasons,
some of which are controllable and predictable and some of which are not
controllable and unpredictable. In such a situation, it is very difficult to
predict price trends. There are compulsions to make bulk purchases of these
varieties keeping in mind the lead times and seasonal availability.
Consequently, a drop in selling prices during the business cycle for products
manufactured from such raw materials, are exposed to loss in profitability.
Forex Management:
All export and import activities are hedged as much as possible at
contracted rate at which deals are confirmed within a reasonable time. No
export order is kept open.
Energy cost:
The Company is mainly drawing power from TNEB & PEB grid power. Thus
during severe power shortages, there can be possibilities of power cuts, which
results in production stoppages. However, at Bagalur unit Company is also having
option of using power generated from 4.016 MW Wartsila Captive Power Plant, the
viability of which is linked to the HFO price movements. To optimize, the
Company has started purchasing power from Indian Energy Exchange (IEX).
Risk of Change in
Government policies
During 2010-11 Government has banned export of cotton yarn for a brief
period, therefore change in Government policies, fiscal measures and regulatory
framework may have adverse impact on the profitability of the Company. Adopting
suitable strategies depending upon the nature of change so as to retain the
market share and profit margin could minimize adverse impact of change in
Government policies and fiscal measures.
Internal Control
Systems:
- The Company
has suitable and adequate system of Internal Controls commensurating its
size and nature of operations primarily to ensure that -
- The assets
are safeguarded against loss from unauthorized use or disposition;
- The
transactions are authorized, recorded and reported correctly and
- Code of
conduct, Policies and applicable statutes are duly complied with.
As a measure of Internal Control System, which has been evolved over the
years, the Company has established a methodical system of Annual Budgeting and
Management Information System (MIS). These Controls are exercised at all stages
of operations viz., production, quality assurance, repairs and maintenance,
utilities etc. In addition, Administrative and HR activities of the Company are
also brought within this purview.
The Company has appointed Internal Auditor to examine the adequacy,
relevance and effectiveness of Internal Control Systems. The Top Management and
the Audit Committee of the Board review the findings and recommendations of the
internal auditor.
The Company is conscious of importance of systems control and so
continuously assesses the quality of integrated software package, which has
been installed at various locations that provides information to the
Management. The software package is regularly upgraded based on the needs to
suit the management reporting system to provide quicker and qualitative
information to the Management.
Continuous reporting of these systems is made to the Board and Audit
Committee for their review to upgrade, revise and to focus on determination of adequacy
of the Control Systems. The composition and role of Audit Committee can be
found in the Corporate Governance Report in the Annual Report.
STATEMENT OF
STANDALONE UNAUDITED RESULTS FOR THE QUARTER AND TWELVE MONTHS ENDED 31.03.2012
(Rs. in Millions)
|
Particular |
For the Quarter
Ended |
For the Year
Ended |
|
|
|
31.03.2012 (Unaudited) |
31.12.2011 (Unaudited) |
31.03.2012 (Unaudited) |
|
Income from Operations |
|
|
|
|
Net Sales/Income from Operations |
476.000 |
302.800 |
1518.900 |
|
Other Operating Income |
-- |
-- |
-- |
|
Total Income from
operations (net) |
476.000 |
302.800 |
1518.900 |
|
|
|
|
|
|
Expenses |
|
|
|
|
(a) Cost of materials consumed |
273.500 |
252.600 |
1124.900 |
|
(b) Purchases of stock-in-trade |
-- |
-- |
-- |
|
(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade |
50.300 |
(41.600) |
39.400 |
|
(d) Employee benefits expense |
27.900 |
26.300 |
104.300 |
|
(e) Depreciation and amortisation expenses |
20.600 |
22.400 |
87.500 |
|
(f) Power and Fuel expenses |
63.600 |
42.200 |
191.300 |
|
(g) Other expenses |
41.800 |
32.200 |
153.200 |
|
Total Expenses |
477.700 |
334.100 |
1700.600 |
|
Profit from Operations
before Other Income, Finance costs and Exceptional item |
(1.700) |
(31.300) |
(181.700) |
|
Other Income |
0.300 |
0.000 |
0.400 |
|
Profit/ Loss from
Ordinary Activities before Finance costs and Exceptional item |
(1.400) |
(31.300) |
(181.300) |
|
Finance costs |
31.800 |
31.700 |
135.500 |
|
Profit/ Loss from Ordinary
Activities after Finance costs but Exceptional item |
(33.200) |
(63.000) |
(316.800) |
|
Exceptional
item |
-- |
-- |
-- |
|
Profit/ Loss from Ordinary Activities
before tax |
(33.200) |
(63.000) |
(316.800) |
|
Tax Expenses |
-- |
-- |
-- |
|
Net Profit/ Loss from Ordinary Activities
after tax |
(33.200) |
(63.000) |
(316.800) |
|
Extraordinary
Items |
-- |
-- |
-- |
|
Net Profit for the period |
(33.200) |
(63.000) |
(316.800) |
|
Paid- up
Equity Share Capital (Face value
of the share – Rs. 10) |
230939350 |
230939350 |
230939350 |
|
Reserves
excluding revaluation reserves as per balance sheet of Previous Accounting
Year |
-- |
-- |
-- |
|
Earnings per
share (before extraordinary items) (of Rs. 10/-
each) (not annualized) -
Basic |
(1.44) |
(2.73) |
(13.72) |
|
- Diluted |
(1.44) |
(2.73) |
(13.72) |
|
Earnings per
share (after extraordinary items) (of Rs. 10/-
each) (not annualized) - Basic |
(1.44) |
(2.73) |
(13.72) |
|
- Diluted |
(1.44) |
(2.73) |
(13.72) |
|
|
|
|
|
|
PARTICULARS OF SHAREHOLDING |
|
|
|
|
1. Public
shareholding |
|
|
|
|
Number of
Shares |
5773535 |
5773535 |
5773535 |
|
Percentage of Shareholding |
25.0002 |
25.0002 |
25.0002 |
|
2. Promoters
and promoter group shareholding |
|
|
|
|
a) Pledged/Encumbered |
|
|
|
|
- Number of Shares |
7628950 |
7628950 |
7628950 |
|
- Percentage of Shares (as a % of the Total Shareholding
of promoter and promoter group) |
44.05 |
44.05 |
44.05 |
|
- Percentage of Shares (as a % of the Total Share Capital
of the Company) |
33.03 |
33.03 |
33.03 |
|
|
|
|
|
|
Non - encumbered |
|
|
|
|
- Number of
Shares |
9691450 |
9691450 |
9691450 |
|
- Percentage
of Shares (as a % of
the total shareholding of promoter and promoter
group) |
55.95 |
55.95 |
55.95 |
|
- Percentage
of Shares (as a % of
the total share capital of the company) |
41.97 |
41.97 |
41.97 |
|
|
Particulars |
Quarter Ended 31st
March 2012 |
|
B |
Investor
complaints |
|
|
|
Pending at the beginning of the quarter |
Nil |
|
|
Received during the quarter |
1 |
|
|
Disposed of during the quarter |
1 |
|
|
Remaining unresolved at the end of the quarter |
Nil |
Notes:
1. The Company has only
single reportable business segment in terms of requirements of Accounting
Standard 17
2. The Auditors
have conducted Limited Review of Financial Results for the quarter and twelve
months ended 31st March 2012. The above financial results were reviewed by the
Audit Committee and thereafter were approved and taken on record by the Board
of Directors in their meeting held on 28th April, 2012
3. The Board of
Director has decided to extend the fininancial year by 6 months to 30th Sept 2012
subject to approval of Registrar of Companies
4. Previous
year/period figures have been re-grouped wherever considered necessary.
5. Statement of Assets and Liabilities
(Rs.
in Millions)
|
Particulars |
31.03.2012 |
31.03.2011 |
|
|
A. EQUITY AND LIABILITIES |
Unaudited |
Audited |
|
|
1.
Shareholders Funds |
|
|
|
|
a] Share Capital |
230.900 |
230.900 |
|
|
b] Reserves and Surplus |
(232.600) |
84.200 |
|
|
Sub-total –
Shareholders’ funds |
(1.700) |
315.100 |
|
|
|
|
|
|
|
2. Non-current
Liabilities |
|
|
|
|
a] Long term Borrowings |
700.500 |
669.400 |
|
|
b]
Long term provisions |
7.000 |
6.500 |
|
|
Sub-total -
Non-current Liabilities |
707.500 |
675.900 |
|
|
|
|
|
|
|
3. Current Liabilities |
|
|
|
|
a] Short term Borrowings |
100.800 |
261.600 |
|
|
b] Trade Payables |
142.200 |
140.800 |
|
|
c] Other Current Liabilities |
37.800 |
81.200 |
|
|
d] Short Term Provision |
58.500 |
61.200 |
|
|
Sub-total - Current Liabilities |
339.300 |
544.900 |
|
|
|
|
|
|
|
TOTAL - EQUITY
AND LIABILITIES |
1045.100 |
1535.900 |
|
|
|
|
|
|
|
B ASSETS |
|
|
|
|
1. Non-current assets |
|
|
|
|
a] Fixed assets |
749.300 |
829.500 |
|
|
b] Non-current investment |
25.500 |
-- |
|
|
c] long Term loans and Advances |
18.500 |
17.800 |
|
|
Sub-total – Non- current assets |
793.300 |
847.300 |
|
|
|
|
|
|
|
2.
CURRENT ASSETS |
|
|
|
|
|
Inventories |
120.200
|
513.500 |
|
|
Trade Receivables |
59.700
|
83.300 |
|
|
Cash and Bank Balances |
17.000
|
20.800 |
|
|
Short Term loans and advances |
33.500
|
30.700 |
|
|
Other Current Assets |
21.400
|
40.300 |
|
Sub-total – Current Assets |
251.800
|
688.600 |
|
|
|
|
|
|
|
TOTAL - ASSETS |
1045.100 |
1535.900 |
|
CONTINGENT LIABILITIES
(Rs. in Millions)
|
Particulars |
31.03.2011 |
31.03.2010 |
|
Guarantees issued by Banks |
3.714 |
3.214 |
|
Bills Discounted with Banks |
322.381 |
109.320 |
|
Claims against the Company not acknowledged as debts |
|
|
|
i) Demand of Provident fund and ESI disputed before the
authorities |
0.645 |
2.154 |
|
ii) Excise and Service Tax |
1.583 |
1.785 |
|
iii) TNEB Electricity cess |
13.442 |
13.442 |
|
Duty on unfulfilled export obligation of EPCG licences |
Nil |
28.032 |
FIXED ASSETS:
- Land and Site Development
- Roads and Building
- Plant and Machinery
- Electric Fitting and Water
- Supply Installation
- Furniture Fixtures and Other Equipments
- Vehicles
- Computers
AS PER WEBSITE
DETAILS
PROFILE:
Subject is a Public Limited Company incorporated under the
Companies Act during 1989 as 100% EOU for manufacturing of Cotton Yarn. CTL
setup its first unit at its registered office cum spinning unit at B
Muduganapalli, Bagalur, Hosur TQ, Tamilnadu during 1993 with installed capacity
of 25000 spindles and this capacity was increased from time to time to the
present capacity of 64704 spindles. During 2002 CTL also set up a doubling unit
at Thirubuvanai,
During 2007 the company was acquired by RSWM Limited, a
premier group company of LNJ Bhilwara group. RSWM is a leading manufacturer of
synthetic and blended spun yarn, PV fabric and denim fabric. It has been one of
the largest exporters of synthetic yarn from
Subject is listed on NSE (National Stock Exchange Limited)
and BSE (Bombay Stock Exchange Limited) having about 13000 shareholders.
Backing its ventures are
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. 56.53 |
|
|
1 |
Rs. 88.09 |
|
Euro |
1 |
Rs. 70.83 |
INFORMATION DETAILS
|
Report Prepared
by : |
BVA |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
3 |
|
OPERATING SCALE |
1~10 |
3 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
3 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
4 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
29 |
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.