|
Report Date : |
24.11.2012 |
IDENTIFICATION DETAILS
|
Name : |
SPORTKING INDIA LIMITED |
|
|
|
|
Registered
Office : |
5/69, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
15.02.1989 |
|
|
|
|
Com. Reg. No.: |
55-035050 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.89.883 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L17122DL1989PLC035050 |
|
|
|
|
Legal Form : |
A Public Limited Liability company. The company’s Shares are Listed on
the Stock Exchanges. |
|
|
|
|
Line of Business
: |
Manufacture of Polyester Cotton Blended, Cotton and Mélange Yarn. |
|
|
|
|
No. of Employees
: |
3000 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (50) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 3300000 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Usually Correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an established company having satisfactory track. Trade
relations are reported as fair. Business is active. Payments are reported to
be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade
terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including
industrial deregulation, privatization of state-owned enterprises, and reduced
controls on foreign trade and investment, began in the early 1990s and has
served to accelerate the country's growth, which has averaged more than 7% per
year since 1997. India's diverse economy encompasses traditional village
farming, modern agriculture, handicrafts, a wide range of modern industries,
and a multitude of services. Slightly more than half of the work force is in
agriculture, but services are the major source of economic growth, accounting
for more than half of India's output, with only one-third of its labor force.
India has capitalized on its large educated English-speaking population to
become a major exporter of information technology services and software
workers. In 2010, the Indian economy rebounded robustly from the global
financial crisis - in large part because of strong domestic demand - and growth
exceeded 8% year-on-year in real terms. However, India's economic growth in
2011 slowed because of persistently high inflation and interest rates and
little progress on economic reforms. High international crude prices have
exacerbated the government's fuel subsidy expenditures contributing to a higher
fiscal deficit, and a worsening current account deficit. Little economic reform
took place in 2011 largely due to corruption scandals that have slowed
legislative work. India's medium-term growth outlook is positive due to a young
population and corresponding low dependency ratio, healthy savings and
investment rates, and increasing integration into the global economy. India has
many long-term challenges that it has not yet fully addressed, including
widespread poverty, inadequate physical and social infrastructure, limited
non-agricultural employment opportunities, scarce access to quality basic and
higher education, and accommodating rural-to-urban migration.
|
Source
: CIA |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office : |
5/69, Guru Mansion, 1st Floor, Padam Singh Road, Karol Bagh, New Delhi – 110005, India |
|
Tel. No.: |
Not Available |
|
Fax No.: |
Not Available |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Administrative
Office : |
178, Col. Gurdial Singh Road, Civil Lines, Ludhiana – 141001, Punjab, India |
|
|
|
|
Factory 1 : |
Village Kanech, Near Sahnewal, G.T. Road, Ludhiana – 141120, Punjab, India |
|
|
|
|
Factory 2 : |
Village Meharban, Rahon Road, Ludhiana - 141007, Punjab, India |
|
|
|
|
Factory 3: |
Village Barmalipur, Near Doraha, G.T. Road, Ludhiana - 141416, Punjab, India |
|
|
|
|
Factory 4: |
Village Jeeda, Kotkapura Road, District Bathinda - 151201,
Punjab, India |
DIRECTORS
As on: 31.03.2011
|
Name : |
Mr. Raj Kumar Avasthi |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. Munish Avasthi |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Naresh Jain |
|
Designation : |
Executive Director |
|
|
|
|
Name : |
Mr. Sunil Puri |
|
Designation : |
Director |
|
Date of Birth/Age : |
60 Years |
|
Qualification : |
B. Tech. |
|
Date of Appointment : |
26.12.2005 |
|
|
|
|
Name : |
Mr. Ajay Chaudhry |
|
Designation : |
Director |
|
Date of Birth/Age : |
57 Years |
|
Qualification : |
B.Sc., L.L.B. |
|
Date of Appointment : |
25.04.2006 |
|
|
|
|
Name : |
Dr. H. K. Bal |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Parveen K. Gupta |
|
Designation : |
Chief Financial Officer |
|
|
|
|
Name : |
Mr. Videshwar Sharma |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
NOT AVAILABLE
BUSINESS DETAILS
|
Line of Business : |
Manufacture of Polyester Cotton Blended, Cotton and
Mélange Yarn. |
||||||
|
|
|
||||||
|
Products : |
|
PRODUCTION STATUS (As on: 31.03.2011)
|
Particulars |
Unit |
Licensed
Capacity |
|
Unit-I (SIL) |
|
|
|
Acrylic/Viscose/Polyester Yarn |
Spindles |
10000 |
|
Unit-II
(Synthetics) |
|
|
|
Acrylic/Viscose/Polyester |
Spindles |
100000 |
|
Unit-III
(Processor) |
|
|
|
Fibre/Yarn Dyeing (Unit-III) |
N.A. |
N.A. |
|
Unit-IV
(Industries) |
|
|
|
Cotton Yarn |
Spindles |
300000 |
|
Fibre/Yarn Dyeing |
MT |
25200 |
|
Particulars |
Unit |
Installed Capacity* |
|
Unit-I (SIL) |
|
|
|
Acrylic/Viscose/Polyester Yarn |
Spindles |
6720 |
|
Unit-II
(Synthetics) |
|
|
|
Acrylic/Viscose/Polyester |
Spindles |
65904 |
|
Unit-III
(Processor) |
|
|
|
Fibre/Yarn Dyeing (Unit-III) |
TPD |
8.50 |
|
Unit-IV
(Industries) |
|
|
|
Cotton Yarn |
Spindles |
28800 |
Note: * Installed capacity is certified by the management being a technical matter.
|
Particulars |
Unit |
Actual Production |
|
Yarn |
MT |
20391.36 |
|
Yarn (Capitalised) |
MT |
366.20 |
|
Waste |
MT |
4472.11 |
|
Waste (Capitalised) |
MT |
155.37 |
Note: Production of yarn includes 102.60 MT of grey yarn on Job work basis and yarn processed on own account but on job work basis.
GENERAL INFORMATION
|
No. of Employees : |
3000 (Approximately) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
|
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|
Bankers : |
·
State Bank of India, SCB, Miller Ganj, Pahwa
Hospital Complex, (Mid Corporate Sales Hub), Miller Ganj, Ludhiana, Punjab,
India ·
State Bank of Patiala, Commercial Branch, Aarti
Complex, Miller Ganj, Ludhiana, Punjab, India ·
Punjab National Bank, International Banking
Branch, Industrial Area-A, Ludhiana, Punjab, India ·
Allahabad Bank, 818, Industrial Area-B, Link
Road, Ludhiana, Punjab, India ·
Central Bank of India, Mid Corporate Office, Miller
Ganj, G.T. Road, Ludhiana, Punjab, India ·
HDFC Bank Limited ·
ICICI Bank Limited ·
IndusInd Bank |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Facilities : |
(Rs.
In Millions)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Rawla and Compnay Chartered Accountants |
|
Address : |
504, Surya Kiran Building, 19, K.G. Marg, New Delhi, India |
|
|
|
|
Associate Concerns
: |
· N.R.S. Knitwear's · Sportking Knitwears · Sobhagia Clothing Company · Darling Demons · Fashionable Attire · Nagesh Classic · Sobhagia Sales Private Limited · Classic Wears Private Limited · Aradhana Fabrics Private Limited · Marvel Dyers and Processors Private Limited · N.T.M. Shawls Private Limited · Namokar Capital Services Private Limited |
CAPITAL STRUCTURE
As on: 29.09.2012
Authorised Capital : Rs.250.000
Millions
Issued, Subscribed & Paid-up Capital : Rs.118.803 Millions
As on: 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
5000000 |
Equity Shares |
Rs.10/- each |
Rs.50.000 Millions |
|
10000000 |
Redeemable Preference Shares |
Rs.10/- each |
Rs.100.000 Millions |
|
|
|
|
|
|
|
Total |
|
Rs.150.000 Millions
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
3561000 |
Equity Shares |
Rs.10/- each |
Rs.35.610
Millions |
|
|
Less : Calls in Arrears, other than from Directors |
|
Rs.1.969
Millions |
|
5624200 |
5% Redeemable Non-cumulative Preference Shares |
Rs.10/- each |
Rs.56.242
Millions |
|
|
|
|
|
|
|
Total |
|
Rs.89.883 Millions |
NOTE:
5624200, 5% Redeemable Non-cumulative Preference Shares of Rs. 10/- each are redeemable within a period of 20 years from the date of allotment.
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 |
89.883 |
66.883 |
66.883 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
759.833 |
410.466 |
317.716 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
849.716 |
477.349 |
384.599 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2885.708 |
1683.545 |
1296.285 |
|
|
2] Unsecured Loans |
10.000 |
0.000 |
0.000 |
|
|
TOTAL BORROWING |
2895.708 |
1683.545 |
1296.285 |
|
|
DEFERRED TAX LIABILITIES |
121.300 |
87.500 |
39.900 |
|
|
|
|
|
|
|
|
TOTAL |
3866.724 |
2248.394 |
1720.784 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
2039.697 |
1115.517 |
1103.843 |
|
|
Capital work-in-progress |
611.551 |
39.549 |
10.792 |
|
|
Advance Against Capital Goods |
160.512 |
37.963 |
34.349 |
|
|
|
|
|
|
|
|
INVESTMENT |
0.000 |
0.000 |
0.000 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1639.493
|
853.378 |
322.234 |
|
|
Sundry Debtors |
457.350
|
380.812 |
325.909 |
|
|
Cash & Bank Balances |
47.336
|
42.150 |
35.338 |
|
|
Other Current Assets |
0.000
|
0.000 |
0.000 |
|
|
Loans & Advances |
384.879
|
240.945 |
192.292 |
|
Total
Current Assets |
2529.058
|
1517.285 |
875.773 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
330.419
|
84.639 |
29.933 |
|
|
Other Current Liabilities |
968.048
|
338.915 |
261.140 |
|
|
Provisions |
175.627
|
38.366 |
12.900 |
|
Total
Current Liabilities |
1474.094
|
461.920 |
303.973 |
|
|
Net Current Assets |
1054.964
|
1055.365 |
571.800 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
3866.724 |
2248.394 |
1720.784 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
4104.686 |
3172.053 |
2664.754 |
|
|
|
Other Income |
72.151 |
27.070 |
(37.265) |
|
|
|
TOTAL (A) |
4176.837 |
3199.123 |
2627.489 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Raw Material Consumed |
2791.597 |
2054.251 |
1781.094 |
|
|
|
Increase(-)/Decrease(+) in stock |
(256.623) |
(19.981) |
36.792 |
|
|
|
Manufacturing Expenses |
529.248 |
481.941 |
436.746 |
|
|
|
Personnel Expenses |
190.359 |
165.320 |
126.923 |
|
|
|
Administrative & Selling Expenses |
186.181 |
110.284 |
121.779 |
|
|
|
Prior Period Expenses / Income |
0.373 |
(0.971) |
0.760 |
|
|
|
Provision for Bad & Doubtful Debts |
0.000 |
0.000 |
0.576 |
|
|
|
TOTAL (B) |
3441.135 |
2790.844 |
2504.670 |
|
|
|
|
|
|
|
|
Less |
PROFIT/
(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
735.702 |
408.279 |
122.819 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
151.432 |
137.507 |
128.277 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)
(E) |
584.270 |
270.772 |
(5.458) |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
138.956 |
127.601 |
122.943 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
BEFORE TAX (E-F) (G) |
445.314 |
143.171 |
(128.401) |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
153.700 |
51.250 |
(41.510) |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
AFTER TAX (G-H) (I) |
291.614 |
91.921 |
(86.891) |
|
|
|
|
|
|
|
|
|
Less |
Income tax relating
to Previous Years |
(0.253) |
0.043 |
0.105 |
|
|
|
|
|
|
|
|
|
Add |
Expenses relating
to Previous Year Capitalised |
0.000 |
0.871 |
0.000 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
237.810 |
146.723 |
235.381 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to Capital Redemption Reserve |
2.812 |
1.662 |
1.662 |
|
|
BALANCE CARRIED
TO THE B/S |
526.865 |
237.810 |
146.723 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Exports |
2073.497 |
1318.394 |
1080.338 |
|
|
|
Interest |
0.000 |
0.844 |
0.000 |
|
|
TOTAL EARNINGS |
2073.497 |
1319.238 |
1080.338 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
376.237 |
245.741 |
137.516 |
|
|
|
Stores & Spares |
19.157 |
13.914 |
18.220 |
|
|
|
Capital Goods |
423.240 |
17.336 |
43.632 |
|
|
|
Dyes & Chemicals |
1.145 |
4.107 |
1.501 |
|
|
TOTAL IMPORTS |
819.779 |
281.098 |
200.869 |
|
|
|
|
|
|
|
|
|
|
Earnings/ (Loss)
Per Share (Rs.) |
81.89 |
25.81 |
(24.43) |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
6.98 |
2.87 |
(3.31) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
10.85 |
4.51 |
(4.82) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
9.75 |
5.44 |
(6.49) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.52 |
0.30 |
(0.33) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
5.14 |
4.49 |
4.16 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.72 |
3.28 |
2.88 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info
Agents |
Available in Report
(Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions 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 |
No |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details (if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm / promoter involved in |
-- |
|
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 |
|
31] |
Date of Birth of Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating, if available |
No |
MANAGEMENT'S
DISCUSSION AND ANALYSIS
BUSINESS REVIEW:
The global economy kicked off a sputtering growth in FY 2010-11 with developed economies showing faint signs of revival. The main engine of global growth, the United States, moved into a recovery mode with employment coming off highs and retails sales growing month on month, albeit slightly, and consumer confidence improving. This growth was accompanied by a huge surge in world commodity prices, with the Continuous Commodity Index (CCI) surging more than 42% during the year. This rise was mainly attributed to the $600 billion of Quantitative Easing part Deux (QE2) by the Federal Bank of America which released unprecedented amounts of liquidity. This liquidity got channeled into commodities and prices soared. This also gave rise to supply side inflation and fast growing economies in Asia bore the brunt. Their economies had barely recovered from the financial crises of FY 2008-09 and raising rates at this juncture would have meant putting a spanner in the way of growth. Most Asian economies therefore held off raising interest rates till the second half of the year and then a series of quick rate hikes followed, more particularly in China and India, who have clearly indicated that they don't mind sacrificing growth at the altar of inflation control. As a result, the earnings growth is expected to be hit in the current fiscal. In anticipation, the commodities have already come off their lifetime highs.
COTTON AND YARN:
Cotton prices were buoyed by strong global fundamentals, with US Department of Agriculture (USDA) reports forecasting a 6% y/y reduction in end season stocks to 41.5 million bales (of 480 lbs). This compares with 43.9 million bales (mb) in 2009-10 and 60.5 mb in 2008-09.
Although global cotton demand dipped by around 1.3% y/y in 2010-11, import demand from China rose by 37% y/y over the same period. Both developments were mainly due to supply constraints and global price rationing following a 8% decline in China's cotton output. China traditionally accounts for 30% of global cotton production. Extremely tight global end season stocks underpinned prices; the stocks-to-use ratio at 35% will be the tightest since the 1993-94 season. In order to curtail the rise in cotton yarn prices, the Indian Government had imposed a limit of 720 mln kgs on cotton yarn to be exported in FY 2010-11.
OUTLOOK FOR COTTON
PRICES:
These high prices are not expected to sustain, in part on expectations of increased acreage, particularly in US, China and Africa. China's import demand is also expected to slow down on a combination of high market prices, stronger output and competition from synthetic fibres. China has also planned a cotton purchase-and-reserve policy in 2011 with a view to stabilising prices in the new season. Pakistan, where floods devastated cotton crops in the 2010-11 season, is another market which is likely to see a substantial increase in cotton output from previous year. Overall, the world market is expected to remain structurally tight (although better than FY 2010-11), but this will not be fully apparent until later in the season when the new crop stocks are drawn down. Global cotton production is expected to increase by about 13% from 24.5 million tonnes in cotton season 2010-11 (Oct to Sept) to 27.5 million tonnes in cotton season 2011-12. The closing stock of 2011-12 is expected to be around 10.5 million tons which is higher than last 2 years but still lower than normal closing stock levels in the past. The stock-to-use ratio is expected to improve to about 42% but will still be lower than the normal 48-52% in the past (excluding last 2 years).
In anticipation of a bumper cotton crop this year, global cotton prices as of now have already come off their previous highs. The Dec New York future is significantly lower than the current New York future. Global yarn prices are decreasing in line with the cotton prices. Overall, this year is likely to be turbulent and may have adverse impact on the operations of the Industry at large. However because of prudent cotton buying practices and conservative financial norms, Technology Upgradation Fund Scheme (TUFS): TUFS had been suspended temporarily by the government in June 2010. The Scheme has now been re-instated with a few changes; (i) Capital subsidy will now be available on looms for weaving as well. (ii) a 5% interest reimbursement may be given to the spinning units (against 4% earlier) if the unit is set up with matching downstream capacity in weaving/processing. (iii) A cap of Rs.19820.000 Millions has been put on the total subsidy which will be given for the next one year. This has been allocated between various sectors. The sunset clause of the scheme remains unchanged at March 31, 2012. All loans sanctioned till that date will be eligible for subsidy for the life of the loan. The government of India has also restored the export benefit of DEPB on cotton yarn retrospectively with effect from 1st April 2011.
In 2010-11, the cotton crop in China and Pakistan was damaged by bad weather and the lobal production fell. This led to an increase in cotton prices. The boom in prices was also fuelled by speculative trading in commodities which increased prices beyond fundamentals. India had exported 8.5 million bales of cotton in 2009-10. In September 2010, the Government of India announced a cap of 5.5 million bales of cotton for exports, around 18% of the estimated production of 31.5 million bales (of 375 lbs) in the current cotton season (CS) 2010-11. This lead to lesser availability of cotton for trade and with high import demand from China, international prices rose during the month. Prices in India also increased. The Cotlook A index rose by 133% from $1 per pound in September, 2010 to about $2.33 per pound in March, 2011 due to limited availability for exports on the back of restrictions by India coupled with robust demand from China and traditional importing countries. Indian Shankar 6 rose in tandem from Rs.0.037 Million candy in Sept 2010 to Rs.0.062 Million candy in March 2011. In line with cotton prices, cotton yarn prices also continued to remain high. This increase was in fact more than the increase in cotton prices due to pent up demand in the system where the pipeline of yarn stocks was at very low levels and also due to increased demand from a recovering global economy. Cotton yarn prices touched a high of $6.50/kg. To look at this in perspective, the average of the last 20 years was around $3/kg, with $4.5/kg being the previous all time high in cotton yarn prices. These prices have since corrected.
PRODUCTION / SALES
REVIEW
During the year, their company achieved a production of 20757 M.T. as compared to 20981 MT in the previous year, almost at equal level. The company achieved a gross turnover/operating income of Rs. 4176.800 Millions as compared to Rs. 3199.100 Millions in the previous year showing a growth of 30.56%. The exports increased to Rs. 2073.500 Millions against Rs. 1321.300 Millions in the previous year showing a growth of 56.93% owing better market penetration. The Company is recognized as 'Trading House' and has been awarded silver "Niryat Shree" Bronze Trophy for outstanding export performance in the category of textile and textile products including RMG-non-MSME for the year 2008-09.
PROFITABILITY
The company earned a gross profit of Rs. 715.400 Millions having profitability/sales ratio of 17.13 % as compared to Rs.393.600 Millions having profitability/sales ratio of 13.30 % in the previous year which have improved due to increase in prices of finished goods, prudent purchase of raw cotton, production of polyster blended dyed synthetic yarn to substitute high priced acrylic yarn, prudent forex forward contracts to ward off fluctuations in foreign exchange rates, full year in part of purchase of power from open market at low rates, etc.
The interest cost increased to Rs. 131.100 Millions as compared to Rs. 122.800 Millions in the previous year. The company earned gross cash profit of Rs. 584.300 Millions against Rs. 270.800 Millions in the previous year. After making provision of depreciation of Rs. 139.000 Millions (Previous Year Rs 127.600 Millions), Income Tax of Rs. 119.900 Millions (Previous Year Rs. 3.700 Millions), and after providing for deferred tax liability of Rs. 33.800 Millions (Previous Year Rs.47.600 Millions) there was a net profit of Rs. 291.900 Millions against previous year net profit of Rs. 92.700 Millions. After transfer of Rs. 2.800 Millions to Capital Redemption Reserve, the surplus in the Profit and Loss Appropriation Account stands at Rs. 526.900 Millions. The said profits have been invested in the business.
EXPANSION PROJECT
Further the company is also adding 61536 spindles and a dye house at Bathinda for the manufacture of polyester cotton blended / cotton / mélange yarn, the detailed project report of which has already been approved by the banks and the required term loans have also been sanctioned. The company is expected to commission 24000 spindles for the manufacture of polyester cotton yarn in the current financial year 2011-12 and balance spindles and dye house is expected to be commissioned in the FY 2012-13.
FIXED ASSETS
· Land
· Building
· Plant and Machinery
· Vehicles
· Furniture and Fixture
AS PER WEBSITE
DETAILS:
Press Release
SPORTKING PLANS MAJOR EXPANSION
PTI [Monday, December 05, 2005 03:45:24 PM]
LUDHIANA: Embarking upon a major expansion plan, Ludhiana-based Sportking Group has decided to invest Rs.1300.000 crore for enhancing its spindle & dyeing capacities and setting up a 15 MW power generation plant.
"We will invest Rs.800.000 crore on enhancing our spindling and dyeing capacity while Rs.500.000 crore will be invested on setting up a power generation plant. The investment process is expected to complete by June 2006," Sportking Managing Director Munish Avasthi told the agency.
The company has plans to install 35000 spindles with stipulated investments which will take the company's total spindle capacity to 81000. With the proposed investment, the company plans to double its in-house dyeing capacity.
SPORTKING TO INVEST 50 CR ON EXPANSION PLANS
Ludhiana, February 8
The Sportking, a Ludhiana-based textile and spinning company would invest over Rs.50.000 Millions this year to expand its production capacity. The company would also open to its new outlets in North India.
It would create direct employment opportunities for at least 500 persons besides indirect jobs, says Mr. Raj Awasthi, Chairman-cum-Managing Director of the company.
In an interview to the TNS, Mr. Awasthi said, “We are eagerly awaiting for the end of quota system by next year, and are gearing ourselves to explore the export market. Though we are skeptical about the end of quota system, as the USA and European union may adopt non-trading barriers to curb the Indian exports, yet if allowed we will divert towards exports.”
He admitted that since exports from Bangladesh, Sri Lanka, Nepal and some countries in South African countries were not constrained by quota system, the Indian manufacturers were finding it hard to increase their exports despite the competitive edge. Stiff competition and fall in dollar value had adversely affected the profit margin of exporters.
However, he said, due to growing incomes, good monsoon, and growing consciousness for branded garments, the manufacturers were finding it more attractive to sell their garments in the domestic market.
The company had so far registered an average growth rate of 12 per cent in sales during the past many years, he said. The company was expecting a substantial increase in growth rate this year.
Mr. Awasthi disclosed that the Sportking had recently tied up with the Disney Group of the USA to sell their garments under Disney’s 14 brands. Another agreement had been signed with the Warner Brothers Group to use their brand name for the domestic market. “We expect sales of our garments under these foreign brands to touch Rs 2 Millions by the end of this year. Since the Warner Group has plans to launch its own 24 cartoon network channel in India soon, we expect a major jump in sales under that brand.”
In North India, the company was selling garments under Sportking and Mentor brands in middle-income group. In comparison to high-end brands like Adidas, Nike and other brands, the company was selling its readymade garments at a lower price.
The company’s turnover had increased from around Rs.100.000 Millions to over Rs.3000.000 Millions within a decade. It was exporting garments worth Rs.100.000 Millions annually to the European and US markets.
The group had employed around 5,000 employees at its three plants in Ludhiana, one dyeing unit, yarn unit and 26 outlets spread across all the major towns in North India. The Sportking had set up exclusive showrooms in Delhi, Noida, Ludhiana, Jalandhar and Jaipur. The company had plans to open four new outlets, including one at Chandigarh by April this year, he said.
The group was currently manufacturing all sorts of readymade garments for kids, women and men, besides yarn for other manufacturers. The product range included inner thermal wear, T-shirts, trousers, track suits, pullovers, shorts, casual dresses, jackets and other garments. The company had its in-house designing team and RandD centre that worked on new designs and products.
About the problems being faced by the company Mr. Awasthi said, “We do not face any major problems, except that due to low quality of life, the professional engineers and designers do not want to stay here for long. For instance, we recruited 35 designers from NIFT institutes in Delhi, Hyderabad and other cities. Within an year all except four left the company and the city as well. ”
He lamented that despite competitive pay packages in the industry, the manufacturers at Ludhiana found it difficult to retain good professionals.
“If I could find a good team of designers, the total turnover of our garment division would have increased by ten times,” he added.
High level of pollution, traffic congestion, lack of night life and other basic amenities in the region were the main hurdles in attracting good employees to the region, he said.
Regarding the financing of its expansion project, Mr. Awasthi said,“We have no plans to enter the primary market, rather we will use internal resources and bank loans. Since we are successfully brining the cost of production down by 5 to 7 per cent every year, there is no dearth of financial sources.”
With an annual advertising budget of about Rs.10.000 Millions, the company was making efforts to strengthen its brand in the market, said Mr. Awasthi.
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 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 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.55.37 |
|
|
1 |
Rs.88.30 |
|
Euro |
1 |
Rs.71.37 |
INFORMATION DETAILS
|
Report Prepared
by : |
VRN |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
50 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.