MIRA INFORM REPORT

 

 

Report Date :

10.03.2012

 

IDENTIFICATION DETAILS

 

Name :

GOKAK TEXTILES LIMITED (w.e.f. 23.01.2007)

 

 

Formerly Known As :

ANS TEXTILES (BANGALORE) LIMITED

 

 

Registered Office :

1st Floor, 45/3, Gopalkrishna Complex, Residency Cross Road, Bangalore – 560 025, Karnataka 

 

 

Country :

India

 

 

Financials (as on) :

31.03.2011

 

 

Date of Incorporation :

27.03.2006

 

 

Com. Reg. No.:

08-038839

 

 

Capital Investment / Paid-up Capital :

Rs.64.993 millions

 

 

CIN No.:

[Company Identification No.]

L17116KA2006PLC038839

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

BLRG08492B

 

 

Legal Form :

A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturer of Cotton Yarn and Knitwear.

 

 

No. of Employees :

Not Available

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B (34)

 

RATING

STATUS

 

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Maximum Credit Limit :

USD 2603000

 

 

Status :

Moderate

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is an established company having moderate track. Trade relations are reported as fair. Business is active. Payments are reported to be slow but correct.

 

The company can be considered for business dealings with 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

(30.06.2011)

Current Rating

(30.09.2011)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

LOCATIONS

 

Registered Office :

1st Floor, 45/3, Gopalkrishna Complex, Residency Cross Road, Bangalore – 560 025, Karnataka, India

Tel. No.:

91-80-25580042/ 25580043

Fax No.:

Not Available

E-Mail :

ramanandapai@gokaktextiles.com

Website :

www.gokakmills.com

 

 

Corporate Office/ Marketing Office :

No.24, 29th Main, BTM Layout, 2nd Stage, Bangalore – 560 076, Karnataka, India

Tel. No.:

91 8026689605/06

Fax No.:

91 8026689604

E-Mail :

marketing@gokaktextiles.com

 

 

Mill :

Knitwear Unit

Gokak Falls - 591 308, District Belgaum, Karnataka, India

 

 

Factory 1 :

Knitwear Unit

Bagalkot Road, Village Marihal - 591 167, District Belgaum, Karnataka, India

 

 

Factory 2 :

Knitwear Unit

CTS No.10588/1, Behind Ramdev Hotel, Nehru Nagar, Belgaum - 590 010, Karnataka, India

 

 

Factory 3 :

D-190-B-Phase-VI, Focal Point, Ludhiana - 141 010, Punjab, India

 

 

Branch Office :

Located at:

 

v      Bangalore

v      Kolkata

v      Coimbatore

v      Kanpur

v      Chennai

v      New Delhi

 

 

Overseas Representatives/ Agencies :

Located at:

 

v      Australia

v      Brazil

v      Canada

v      Egypt

v      Jordan

v      New Zealand

v      Saudi Arabia

v      Turkey

v      UK

v      USA

 

 

DIRECTORS

 

As on 31.03.2011

 

Name :

Mr. Shapoor P. Mistry

Designation :

Chairman

Date of Birth/ Age :

06.09.1964

Qualification :

B.A. (England) – Business and Economics

Expertise in specific functional areas :

Mr. Shapoor P Mistry is the Chairman of Forbes and Company Limited, and Eureka Forbs Limited, and Managing Director of Shapoorji Pallonji and Company Limited, He is also a Director of several public limited companies. His expertise includes formulation of business plans, risk evaluation, business investment strategy and funds management and property development.

Date of Appointment :

29.11.2006

List of Public Limited Companies in which Directorship held as on 31st March, 2011 :

1. Shapoorji Pallonji and Company Limited

2. Afcons Infrastructure Limited

3. Cyrus Investments Limited

4. Eureka Forbes Limited

5. Forbes and Company Limited

6. Forvol International Services Limited

7. Shapoorji Pallonji Finance Limited

8. Shapoorji Pallonji Infrastructure Capital Company Limited

9. Shapoorji Pallonji Power Company Limited

10. The Indian Hotels Company Limited

11. United Motors (India) Limited

 

 

Name :

Mr. Pallonji S. Mistry

Designation :

Director

Date of Birth/ Age :

01.06.1929

Qualification :

Inter Arts

Expertise in specific functional areas :

Mr. Pallonji S. Mistry is the Chairman of Shapoorji Pallonji Group. He is also a Director of several public limited Companies. His expertise includes formation of business plans, risk evaluation, business investment strategy and property and infrastructure development

Date of Appointment :

01.01.2007

List of Public Limited Companies in which Directorship held as on 31st March, 2011 :

1. Shapoorji Pallonji and Company Limited

2. Afcons Infrastructure Limited

3. Cyrus Investments Limited

4. Forbes and Company Limited

5. Forvol International Services Limited

6. Shapoorji Pallonji Finance Limited

7. Shapoorji Pallonji Infrastructure Capital Company Limited

8. Shapoorji Pallonji Power Company Limited

9. United Motors (India) Limited

 

 

Name :

Mr. H.S. Bhaskar

Designation :

Executive Director and Chief Executive Officer

 

 

Name :

Mr. Ashok Barat

Designation :

Director

 

 

Name :

Mr. D.G. Prasad

Designation :

(Nominee Director, Export Import Bank of India) (upto 29.04.2011)

 

 

Name :

Mr. C.G. Shah

Designation :

Director

 

 

Name :

Mr. Ramaotar Goyal

Designation :

Director

 

 

Name :

Mr. Pradip N. Kapadia

Designation :

Director

 

 

Name :

Mr. R.N. Jha

Designation :

Director

 

 

Name :

Mr. Kaiwan Kalyaniwalla

Designation :

Director

Date of Birth/ Age :

13.08.1964

Qualification :

B.A. LLB

Expertise in specific functional areas :

Mr. Kaiwan Kalyaniwalla is a Solicitor and Advocate of the Bombay High Court and Partner of the law firm of Maneksha and Sethna in Mumbai. He is on the board of various Indian and Foreign Companies and advises private sector corporate, multinational banks, logistics and shipping companies and some of India’s largest property development companies and business houses

Date of Appointment :

24.09.2010

List of Public Limited Companies in which Directorship held as on 31st March, 2011 :

1. Allcargo Global Logistics Limited

2. Hindustan Cargo Limited

3. Great Offshore Limited

4. Raheja Universal Limited

 

 

Name :

Mr. Sanjay Sarkar

Designation :

(Nominee Director, Export Import Bank of India) (w.e.f. 29.04.2011)

 

 

KEY EXECUTIVES

 

Name :

Mr. S. Raghunathan

Designation :

Chief Financial Officer

 

 

Name :

Mr. K. Ramananda Pai

Designation :

Company Secretary

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 31.12.2011

 

Category of Shareholders

 

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Bodies Corporate

4,780,845

73.56

Sub Total

4,780,845

73.56

(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

4,780,845

73.56

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

211

-

Financial Institutions / Banks

10,129

0.16

Central Government / State Government(s)

55,171

0.85

Insurance Companies

296,057

4.56

Foreign Institutional Investors

200,635

3.09

Sub Total

562,203

8.65

(2) Non-Institutions

 

 

Bodies Corporate

253,061

3.89

Individuals

 

 

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

817,962

12.59

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

60,772

0.94

Any Others (Specify)

24,465

0.38

Trusts

350

0.01

Overseas Corporate Bodies

24,115

0.37

Sub Total

1,156,260

17.79

Total Public shareholding (B)

1,718,463

26.44

Total (A)+(B)

6,499,308

100.00

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

-

-

(1) Promoter and Promoter Group

-

-

(2) Public

-

-

Sub Total

-

-

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

6,499,308

-

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of Cotton Yarn and Knitwear.

 

 

Products :

Product Description

Item Code (ITC Code)

Cotton Yarn

5205110

Cotton Canvas

52091250

Knitted Garments

61091000

 

PRODUCTION STATUS (AS ON 31.03.2011)

 

 

Product Unit

 

Licensed Capacity

 

Installed Capacity

Actual Production

 

UOM

Capacity

Current Year

Yarn

SPINDLE

145,310

121,188

20,406

M.T.

Blended Yarn

SPINDLE

--

--

260

M.T.

Cotton Canvas

LOOMS

60

24

2,010,460

MTRS.

Terry Towel

LOOMS

--

4

107,830

PCS.

Knitted Garments

PCS.

6,000,000

4,256,000

2,852,633

--

 

Notes:

1. Installed capacity has been certified by the Management.

2. Actual production of yarn excludes internal consumption of 482.50 M.T.

 

GENERAL INFORMATION

 

No. of Employees :

Not Available

 

 

Bankers :

v      Punjab National Bank

v      Standard Chartered Bank

v      State Bank of India

v      Export Import Bank of India

v      Axis Bank Limited

v      IDBI Bank Limited

v      New India Co-operative Bank Limited

 

 

Facilities :

Secured Loans

31.03.2011

Rs. In Millions

31.03.2010

Rs. In Millions

FROM BANKS:

 

 

a) Rupee Term Loan from New India Co-operative Bank Limited under Technology Upgradation Fund Scheme (Secured by exclusive charge of hypothecation of machinery alongwith accessories / spares acquired / to be acquired under the Scheme

(Repayable within a year Rs.12.000 millions; Previous year Rs.12.000 millions)

19.575

31.575

b) Cash Credit and Packing Credit from Banks against hypothecation of all stocks including Raw Material, Stock-in-Process, Finished Goods, Stores and Book-Debts.

 

 

(i) Cash Credit and Packing Credit

810.946

211.607

(ii) Demand Loan

200.000

452.000

c) Term Loan from Export Import Bank of India under Technology Upgradation Fund Scheme.

(Secured by an exclusive and specific charge against movable fixed assets acquired under the scheme)

(Repayable within a year Rs.19.333 millions; Previous year Rs.0.170 million)

28.945

29.115

d) Long Term Working Capital Foreign Currency Loan from Export-Import Bank of India,

secured by first charge on all the movable fixed assets (whether installed or not) of the Gokak Mills Division and Campbell Knitwear Division

(Repayable within a year Rs.40.551 millions; Previous year Rs. Nil)

60.827

60.787

e) Term Loan from Export Import Bank of India under Technology Upgradation Fund Scheme(Secured by first hypothecation charge on specific moveable fixed assets acquired/to be acquired under the scheme and by equitable mortgage charge on land and building of Gokak Mills Division and Campbell Knitwear Division on a pari passu basis with State Bank of India)

(Repayable within a year Rs.38.090 millions; Previous year Rs.0.800 million)

182.632

183.432

f) Term Loan from Export Import Bank of India under Technology Upgradation Fund Scheme

(Secured by exclusive charge by way of hypothecation of the specific moveable fixed assets acquired/ to be acquired out of the loan and mortgage of immovable fixed assets of Gokak Mills Division and Campbell Knitwear Division.)

(Repayable within a year Rs.38.092 millions; Previous year Rs.9.650 millions)

220.500

196.897

g) Rupee Term Loan from State Bank of India under Technology

Upgradation Fund Scheme (Secured by first Charge on the goods and specific movable assets acquired/ to be acquired under the loan)

(Repayable within a year Rs.41.200 millions; Previous year Rs.33.600 millions)

145.023

178.623

h) Term Loan from State Bank of India under Technology Upgradation Fund Scheme (Secured by first hypothecation charge on specific moveable fixed assets acquired/ to be acquired under the scheme and by equitable mortgage charge on Land Building of Gokak Mills Division and Campbell Knitwear Division Located at Gokak Falls and Marihal respectively on a pari passu basis with Exim Bank of India.)

(Repayable within a year Rs.50.000 millions; Previous year Rs.38.400 millions)

137.172

175.572

i) Long Term Working Capital rupee loan from Export-Import Bank of India, (secured by pari passu first charge by way of hypothecation of entire moveable fixed assets of the company excluding assets exclusively charged and by way of pari passu first mortgage of the immovable fixed assets of the Gokak Mills Division and Campbell Knitwear Division.)

(Repayable within a year Rs.112.500 millions; Previous year Rs.37.500 millions)

112.500

150.000

j) Term Loan from Export Import Bank of India under Technology Upgradation Fund Scheme for setting up of mini Hydel Power Plant of 4.5 MW at Gokak Mills Division, Gokak Falls, Belgaum, Karnataka.

(Secured by Exclusive charge over the entire movable fixed assets and immovable properties of the Hydel power plant and pari Passu first mortgage of the immovable fixed assets of Gokak Mills Division and Campbell Knitwear Division.)

(Repayable within a year Rs.21.300 millions; Previous year Rs.5.756 millions)

149.100

154.856

k) Federal Bank Vehicle Loan (Secured by Vehicle)

(Repayable within a year Rs. Nil; Previous year Rs.0.900 million)

0.000

1.654

Total

2067.220

1826.118

 

Unsecured Loans

31.03.2011

Rs. In Millions

31.03.2010

Rs. In Millions

Sales Tax Deferment loan

(Amount due within a year Rs.1.925 millions; Previous year Rs.1.925 millions)

2.381

4.306

Short Term Loan (from Standard Chartered Bank)

0.000

250.000

Total

2.381

254.306

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Kalyaniwalla and Mistry

Chartered Accountants

Address :

Mumbai, Maharashtra, India

 

 

Holding Company :

Sterling Investment Corporation Private Limited

Ultimate Holding Company :

Shapoorji Pallonji and Company Limited

 

 

Fellow Subsidiaries :

v      Forbes and Company Limited

v      Forbes Doris and Naess Maritime Limited

v      Forbes Technosys Limited

v      Volkart Fleming Shipping and Services Limited

v      Eureka Forbes Limited

v      Forval International Services Limited

 

 

CAPITAL STRUCTURE

 

As on 31.03.2011

 

Authorised Capital :

No. of Shares

Type

Value

Amount

7000000

Equity Shares

Rs.10/- each

Rs.70.000 millions

 

 

 

 

 

Issued, Subscribed and Paid-up Capital :

No. of Shares

Type

Value

Amount

6499308

Equity Shares

(64,49,308 shares issued pursuant to the Scheme of Demerger for consideration other than cash)

Rs.10/- each

Rs.64.993 millions

 

 

 

 

 

Of the above

(i) 41,63,176 shares are held by Sterling Investment Corporation Private Limited, the Holding Company.

(ii) 3,07,252 shares are held by Shapoorji Pallonji and Company Limited, the Ultimate Holding Company.

(iii) 50,000 shares are held by Forbes and Company Limited, Fellow Subsidiary Company.

(iv) 1,77,218 shares are held by Cyrus Investment Limited, Fellow Subsidiary Company.

(v) 83,199 shares are held by Forbes Finance Limited, Fellow Subsidiary 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

64.993

64.993

64.993

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

585.851

492.121

532.060

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

650.844

557.114

597.053

LOAN FUNDS

 

 

 

1] Secured Loans

2067.220

1826.118

1715.962

2] Unsecured Loans

2.381

254.306

19.531

TOTAL BORROWING

2069.601

2080.424

1735.493

DEFERRED TAX LIABILITIES

57.172

58.583

197.744

 

 

 

 

TOTAL

2777.617

2696.121

2530.290

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

1785.371

1656.156

1725.747

Capital work-in-progress

12.821

229.965

210.951

 

 

 

 

INVESTMENT

0.050

0.051

0.051

DEFERRED TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
1091.421

862.379
813.123

 

Sundry Debtors
406.516

260.379
253.787

 

Cash & Bank Balances
13.633

20.955
24.507

 

Other Current Assets
0.000

0.000
0.020

 

Loans & Advances
326.464

339.221
226.667

Total Current Assets
1838.034

1482.934

1318.104

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Sundry Creditors
468.338

271.691

328.949

 

Other Current Liabilities
369.525

383.908
393.600

 

Provisions
20.796

17.386
15.080

Total Current Liabilities
858.659

672.985

737.629

Net Current Assets
979.375

809.949
580.475

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

13.066

 

 

 

 

TOTAL

2777.617

2696.121

2530.290

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2011

31.03.2010

31.03.2009

 

SALES

 

 

 

 

 

Sales (Net)

3910.332

3045.969

2620.649

 

 

Income from Services

30.680

6.761

8.375

 

 

Profit on Sale of Investment

73.352

0.000

0.000

 

 

Other Income

40.483

81.281

77.290

 

 

TOTAL                                     (A)

4054.847

3134.011

2706.314

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Materials consumed and purchase of goods

2613.698

1760.207

1617.846

 

 

Manufacturing and other expenses

1269.241

1141.129

1101.318

 

 

Inventory change

(301.598)

31.134

(74.744)

 

 

TOTAL                                     (B)

3581.341

2932.470

2644.420

 

 

 

 

 

Less

PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

473.506

201.541

61.894

 

 

 

 

 

Less

INTEREST & FINANCIAL EXPENSES                 (D)

245.762

251.548

176.408

 

 

 

 

 

 

PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                               (E)

227.744

(50.007)

(114.514)

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

135.426

129.093

124.369

 

 

 

 

 

 

PROFIT/ (LOSS) BEFORE TAX (E-F)                  (G)

92.318

(179.100)

(238.883)

 

 

 

 

 

Less

TAX                                                                  (H)

(1.412)

(139.161)

14.707

 

 

 

 

 

 

PROFIT/ (LOSS) AFTER TAX (G-H)                   (I)

93.730

(39.939)

(253.590)

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

(223.911)

(183.972)

69.618

 

 

 

 

 

 

BALANCE CARRIED TO THE B/S

(130.181)

(223.911)

(183.972)

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Export of goods calculated of F.O.B. basis 

749.912

832.522

900.712

 

 

Freight and insurance recoveries

16.826

13.689

31.092

 

TOTAL EARNINGS

766.738

846.211

931.804

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Raw Materials

16.730

16.872

98.166

 

 

Stores, Spares and Tools

14.437

20.117

17.354

 

 

Capital Goods

1.532

30.382

50.640

 

TOTAL IMPORTS

32.699

67.371

166.160

 

 

 

 

 

 

Earnings/ (Loss) Per Share (Rs.)

14.42

(6.15)

(39.02)

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2011

30.09.2011

31.12.2011

Type

1st Quarter

2nd Quarter

3rd Quarter

Net Sales

800.900

777.330

783.440

Total Expenditure

905.370

790.330

782.900

PBIDT (Excl OI)

(104.470)

(13.000)

0.540

Other Income

0.000

0.000

0.000

Operating Profit

(104.470)

(13.000)

0.540

Interest

60.110

62.660

68.940

Exceptional Items

0.000

0.000

0.000

PBDT

(164.580)

(75.660)

(68.400)

Depreciation

34.450

34.490

34.450

Profit Before Tax

(199.030)

(110.160)

(102.850)

Tax

0.000

0.000

0.000

Provisions and contingencies

0.000

0.000

0.000

Profit After Tax

(199.030)

(110.160)

(102.850)

Extraordinary Items

0.000

0.000

0.000

Prior Period Expenses

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

Net Profit

(199.030)

(110.160)

(102.850)

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2011

31.03.2010

31.03.2009

PAT / Total Income

(%)
2.31

(1.27)
(9.37)

 

 
 

 
 

Net Profit Margin

(PBT/Sales)

(%)
2.36

(5.88)
(9.12)

 

 
 

 
 

Return on Total Assets

(PBT/Total Assets}

(%)
2.55

(5.71)
(7.85)

 

 
 

 
 

Return on Investment (ROI)

(PBT/Networth)

 
0.14

(0.32)
(0.40)

 

 
 

 
 

Debt Equity Ratio

(Total Liability/Networth)

 
4.50

4.94
4.14

 

 
 

 
 

Current Ratio

(Current Asset/Current Liability)

 
2.14

2.20
1.79

 

LOCAL AGENCY FURTHER INFORMATION

 

Note:

 

The Company was incorporated under the Companies Act, 1956 under the name of ANS Textiles (Bangalore) Limited on March 27, 2006. The name was changed to Gokak Textiles Limited, with effect from 23rd January 2007. As per the scheme of arrangement under the Companies Act, 1956 the Textile Division of erstwhile Forbes Gokak Limited (now known as Forbes and Company Limited) was transferred to Subject with effect from April 1, 2007. The company is in the business of textile, manufacturing cotton yarn, blended yarn, industrial fabrics, terry towels, t-shirts, polos, undergarments, sweaters, etc

 

FINANCIAL RESULTS:

 

The Company has recorded gross income of Rs.4054.900 millions for the year ended 31st March, 2011 as compared to Rs.3134.000 millions in the year ended 31st March, 2010 and profit after tax of Rs.93.700 millions for the year as compared to net loss of Rs.39.900 millions for the year ended 31st March, 2010. The year 2010-11 witnessed a reasonable improvement in the Company’s business performance. The profit includes profit on sale of investment of Rs.73.400 millions.

 

SHARE CAPITAL AND DIVIDEND:

 

The Paid up Share Capital of the Company is Rs.65.000 millions. No dividend for the year is proposed.

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

 

Industry Structure and Developments:

 

The Indian textile industry is one of the largest and oldest sectors in the country and among the most important in the economy in terms of output, foreign exchange earnings, investment and employment. The sector employs nearly 35 million people and after agriculture, is the second-highest employer in the country. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. Its importance is underlined by the fact that it accounts for around 4% of Gross Domestic Product, 14% of industrial production, 18% of employment in the industrial sector and 17% of the country’s total exports earnings. There are various reports of lower production of cotton internationally due to natural calamities and bad weather which coupled with the announcement by Government of India allowing 55 lakh bales of cotton export right from the beginning of the season pushed the cotton prices to a record high level with high volatility. Varieties of cotton which were available between Rs.0.022 million to Rs.0.025 million in the previous season were priced between Rs.58,000/- to Rs. 64,000/- per candy at their peak. However, starting from May, 2010, yarn prices also steeply went up in line with the cotton price along with increased demand. Hence, textile industry in general started earning a reasonable profit till Government of India brought a restriction of export of cotton yarn and limiting the export to 720 million Kgs. Textile Mills and traders had valid contracts, Letter of Credits etc. on hand when this abrupt stoppage of export was announced by Government of India during the month of December, 2010 were unable to fulfill the contractual demand to various segments of exports resulting in erosion of confidence in the minds of foreign customers and international traders on the stable Government policies and the capability of spinning mills to deliver yarn. Even though the measures taken by the government appears to be short-term in nature, has a cascading effect on both immediate and future export markets due to uncertainties that may crop up and erosion of confidence. Even though most of the textile mills did well during the financial year, it is expected that the near short-term prospects of industry recovering to a healthy position appears to be bleak.

 

SEGMENT-WISE OR PRODUCT–WISE PERFORMANCE:

 

During the year, the major improvement has come in the production of Dyed yarn when compared to previous financial year. The demand for company’s dyed yarn steadily increased. Similarly, the performance of coarse count was better and hence the grey yarn production also increased proportionately to meet the demand of the market. The installation of slub equipment gave rise to improved sales realization of coarse grey yarn. One of their major product mixes in Open End (OE) category of yarn went out of the market as a result of which, their OE production moved towards finer counts when compared to previous year and hence production of OE yarn was marginally down for the entire year in terms of quantity. However, in terms of value it was substantially higher. As a result of very high yarn prices, coupled with volatility, the commodity canvas production did not find demand and hence canvas fabric production was lower for the entire financial year. Due to wide difference in prices of major inputs on the day the orders were booked and the time of actual executions of orders were made, had a great impact on the working of both Forbes Campbell Knitwear Division and Brands Division.

 

OUTLOOK:

 

The steep increase in prices of cotton and its allied products to a record level did not sustain for a long time and eventually destroyed the demand. This destruction of demand happened across the globe impacting almost all the countries who are major producers of cotton textile products. As the prospects of recovery was very slim, China’s purchase of cotton reduced upto 35% which resulted in bringing down the cotton prices unabatedly. Already due to lack of exports, Indian spinning mills have accumulated huge stocks and were also carrying reasonable amount of cotton stock at very high prices. When cotton prices started falling on a daily basis, the yarn prices also started declining at a faster pace. Even though exports were opened from 1st April, 2011, the erosion of confidence on the ability of spinning mills to supply committed quantities played a major role and most of the spinning mills started experiencing lack of demand for Indian yarns in the international market. This lack of demand for Indian yarn further gave rise to additional stock. Spinning mills in order to keep up the liquidity to maintain their commitments of payment to various stakeholders stated diluting stocks at very low prices. Demand position is still very weak and yarn prices are declining day-by-day.

 

Considering the continuous drop of both cotton and yarn prices, entire sector has to absorb huge stock losses on account of both raw material and finished goods. Apart from this, most of the spinning mills will be bringing down the production also to prevent any further escalation in stock and hence even at operational level mills are expected to make substantial losses.

 

It is expected that both cotton and yarn prices may stabilize from the new season of the cotton starting from October and hence half yearly results of most of the players in this sector in the financial year 2011-2012 may get affected.

 

CONTINGENT LIABILITIES NOT PROVIDED FOR:

 

Particulars

31.03.2011

(Rs. in millions)

(A) Bills discounted

39.154

(B) Guarantees issued by bank Corporate Guarantee to Export Import Bank of India

(on behalf of P.T. Gokak Indonesia) $ 31,00,000

--

Corporate Guarantee to Other

0.129

(C) Taxes in dispute :-

 

Entry Tax/Special Entry tax

14.458

Income tax matters

0.301

Excise Demands

116.917

(D) Labour Matters in Dispute

1.388

(E) Bonds given by Company in favour of Customs Authorities

438.122

(F) Other Demands Contested by the Company

 

Creditors Claim

0.071

Electricity Duty

0.956

 

 

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2011

            (Rs. in Millions)

Sr. No.

Particulars

Quarter III ended 31.12.2011

Quarter II ended

 

30.09.2011

Nine Months ended 31.12.2011

 

 

Unaudited

Unaudited

Unaudited

1

Net Sales/Income From Operations

776.062

772.379

2342.609

2

Other Operating Income

7.377

4.948

19.056

3

Total Income ( 1+2 )

783.439

777.327

2361.665

4

Total Expenditure

 

 

 

 

a) Increase(-)/Decrease (+) in Stock and work-in-Process

72.118

48.920

161.931

 

b) Consumption of Raw Materials

472.798

519.648

1599.162

 

c) Purchase of Trading Goods

0.000

0.000

0.459

 

d) Power and Fuel

49.901

31.298

156.893

 

e) Employees Cost

98.677

98.353

299.056

 

f) Depreciation

34.454

34.495

103.401

 

g) Other Expenditure

89.412

92.110

261.105

 

    Sub Total

817.360

824.824

2582.007

 

 

 

 

 

5

Operating Profit/(Loss) before Other Income and Interest  (3-4)

(33.921)

(47.497)

(220.342)

6

Other Income

--

--

--

7

Profit/(Loss)  before Interest & Exceptional Items (5+6)

(33.921)

(47.497)

(220.342)

8

Interest

68.929

62.659

191.697

9

Profit/(Loss)  after Interest before Exceptional Items (7-8)

(102.850)

(110.156)

(412.039)

10

Exceptional Items

--

--

--

11

Profit/(Loss) from Ordinary Activities Before Tax (9+10)

(102.850)

(110.156)

(412.039)

12

Less Provision for Taxation

 

 

 

 

Current Tax

--

--

--

 

Deferred Tax

--

--

--

 

 

 

 

 

 

Sub total

--

--

--

13

Net Profit/(Loss) after Tax For the Period (11-12)

(102.850)

(110.156)

(412.039)

14

Paid up Equity Share Capital

(Face Value of Rs.10/- each)

64.993

64.993

64.993

15

Reserves excluding Revaluation Reserve

--

--

--

16

Basic and Diluted Earnings per share of face value of Rs.10/- each

(15.82)

(16.95)

(63.40)

 

 

 

 

 

17

Public Shareholding

 

 

 

 

(a) Number of Shares

1718463

1718463

1718463

 

(b) Percentage of Shareholding

26.44%

26.44%

26.44%

18

Promoters and Promoter Group Shareholding

 

 

 

 

a)   Pledged /encumbered

 

 

 

 

- Number of shares

--

--

--

 

- Percentage of shares (as % of the total shareholding of promoters and promoter group)

--

--

--

 

- Percentage of shares (as % of the total share capital of the company)

--

--

--

 

 

 

 

 

 

b)   Non-encumbered 

 

 

 

 

- Number of Shares

4780845

4780845

4780845

 

- Percentage of shares (as % of the total shareholding of promoters and promoter group)

100.00%

100.00%

100.00%

 

- Percentage of shares (as % of the total share capital of the Company)

73.56%

73.56%

73.56%

 

Notes:

 

(a) The above results were reviewed by the Audit Committee of the Board and subsequently taken on record by the Board of Directors of the Company at their meeting held on 10th February, 2012. The statutory auditors of the company have conducted a Limited Review of these results.

             

(b) The Company operates in one segment only, namely Textiles. Sales in different geographical segments are subject to same risk and reward relationship. Accordingly, in the opinion of the management, the information relating to the segment reporting as set out under the Accounting Standard 17 is not applicable.           

                                                                         

(c) Information on Investor complaints for the Half Year ended 31st December, 2011- (Nos.): Opening Balance-Nil. New-1, Disposal-1 and Closing Balance-Nil

                                                                         

(d) The steep drop of both cotton and yarn prices has resulted in uneconomical operations and hence a lower production and a need for a provision for a stock loss.         

                                                                         

(e) The figures for the corresponding periods have been regrouped and rearranged wherever necessary, to make them comparable.

 

(f) The company has formed a wholly owned subsidiary ‘Gokak Power and Energy Limited’.

 

(g) The company has decided charge of the accounting year ending from 31st March to 30th September 2012, subject to the approval of concerned authorities.

 

FIXED ASSETS:

 

Intangible Assets

v      Computer Software

Tangible Assets

v      Leasehold Land

v      Freehold Land

v      Factory Building

v      Residential Building

v      Canal Lining

v      Plant and Machinery

v      Furniture, Fixtures and Office Equipment

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, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                              None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.50.02

UK Pound

1

Rs.79.00

Euro

1

Rs.66.17

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

3

OPERATING SCALE

1~10

4

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

4

--PROFITABILIRY

1~10

3

--LIQUIDITY

1~10

4

--LEVERAGE

1~10

4

--RESERVES

1~10

4

--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

 

34

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

-

NB

                                       New Business

-

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.