MIRA
INFORM REPORT
|
Report Date : |
24.07.2013 |
IDENTIFICATION DETAILS
|
Name : |
WELSPUN INDIA LIMITED |
|
|
|
|
Registered
Office : |
Welspun City, Village Versamedi, Taluka Anjar – 370110, Gujarat |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2012 |
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|
|
|
Date of
Incorporation : |
17.01.1985 |
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|
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|
Com. Reg. No.: |
04-033271 |
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|
|
|
Capital
Investment / Paid-up Capital : |
Rs. 890.120 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L17110GJ1985PLC033271 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
RKTW00055G |
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|
|
|
PAN No.: [Permanent Account No.] |
AAACW1259N |
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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 wide range of home textile products, mainly terry towels, bed linen
products and rugs. |
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|
|
|
No. of Employees
: |
10878 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (52) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 37200000 |
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|
Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Exist |
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Comments : |
Subject is a part of Welspun Group. It is a well established and
reputed company having good track record. Company has performed well during
2012. Financially company seems to be strong. Fundamental of the company appears to be healthy. Subject gets good
supports from its group companies. The rating also takes into consideration the experienced management
and leading position of the company in home textile segment with
well-diversified portfolio. Trade relations are reported to be trustworthy. Business is active.
Payments are regular and as per commitments. The company can be considered for good business dealings at usual
trade terms and condition. |
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 – March 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
Long term Bank facilities : (CARE) A |
|
Rating Explanation |
Adequate degree of safety and low credit
risk. |
|
Date |
April 2013 |
|
Rating Agency Name |
CARE |
|
Rating |
Short term Bank facilities : (CARE) A1 |
|
Rating Explanation |
Very strong degree of safety and lowest
credit risk. |
|
Date |
April 2013 |
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/ Plant I : |
Welspun City, Village Versamedi, Taluka Anjar – 370110, Gujarat, India
|
|
Tel. No.: |
91-2836-573428/ 9 / 279000 / 09/ 661111 / 279051 |
|
Fax No.: |
91-2836-247070/ 279010 / 279050 |
|
E-Mail : |
|
|
Website : |
www.welspun.com |
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|
|
|
Corporate Office : |
Welspun House, 6th Floor, Kamala Mills
Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400013, |
|
Tel. No.: |
91-22-66136000/ 24908000 |
|
Fax No.: |
91-22-24908020/ 24908021 |
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E-Mail : |
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Plant II : |
Survey No. 76 Village and P.O. Morai, Vapi District Valsad, Gujarat – 396194, India |
|
Tel. No.: |
91-260-2437437 |
|
Fax No.: |
91-260-2437088 |
|
Email : |
DIRECTORS
AS ON 31.03.2012
|
Name : |
Mr. B. K. Goenka |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. R. R. Mandawewala |
|
Designation : |
Managing Director |
|
|
|
|
Name : |
Mr. Dadi B. Engineer |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ram Gopal Sharma |
|
Designation : |
Director |
|
Date of
Birth/Age : |
72 Years |
|
Qualification : |
MA (Econ), B.Com and Fellow of Insurance Institute of India |
|
|
|
|
Name : |
Mr. A. K. Dasgupta |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Ajay Sharma |
|
Designation : |
Nominee – IDBI Bank |
KEY EXECUTIVES
|
Name : |
Mr. Shashikant Thorat |
|
Designation : |
Company Secretary |
|
|
|
|
Audit Committee : |
·
Mr. Ram Gopal Sharma ·
Mr. Dadi B. Engineer ·
Mr. A. K. Dasgupta |
|
|
|
|
Remuneration Committee: |
·
Mr. A. K. Dasgupta ·
Mr. Dadi B. Engineer ·
Mr. Ram Gopal Sharma |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.06.2013
|
Category of Shareholder |
No. of Shares |
Percentage of
Holdings |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
344401 |
0.34 |
|
|
68087016 |
68.07 |
|
|
68431417 |
68.41 |
|
|
|
|
|
Total shareholding of Promoter and Promoter Group (A) |
68431417 |
68.41 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
2739519 |
2.74 |
|
|
14166080 |
14.16 |
|
|
64243 |
0.06 |
|
|
16969842 |
16.97 |
|
|
|
|
|
|
3975197 |
3.97 |
|
|
|
|
|
|
5990073 |
5.99 |
|
|
4132806 |
4.13 |
|
|
527680 |
0.53 |
|
|
61214 |
0.06 |
|
|
325690 |
0.33 |
|
|
140246 |
0.14 |
|
|
330 |
0.00 |
|
|
200 |
0.00 |
|
|
14625756 |
14.62 |
|
Total Public shareholding (B) |
31595598 |
31.59 |
|
Total (A)+(B) |
100027015 |
100.00 |
|
(C) Shares held by Custodians and against which Depository
Receipts have been issued |
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
|
0 |
0.00 |
|
Total (A)+(B)+(C) |
100027015 |
0.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer
of wide range of home textile products, mainly terry towels, bed linen
products and rugs. |
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|
Products : |
|
PRODUCTION STATUS (AS ON 31.03.2012)
|
Particulars |
Unit |
Actual
Production |
|
Towels |
M.T. |
41477.85 |
|
Bed Sheets |
Million Mtrs |
37.33 |
|
Cotton Yarn |
M.T. |
33507.06 |
|
Rugs |
M.T. |
4808.99 |
GENERAL INFORMATION
|
No. of Employees : |
10878 (Approximately) |
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Bankers : |
· State Bank of Bikaner and Jaipur · State Bank of India · Punjab National Bank · Andhra Bank · Canara Bank · Exim Bank Limited · Bank of India · State Bank of Patiala · Bank of Baroda · Oriental Bank of Commerce · IDBI Bank Limited · State Bank of Hyderabad · State Bank of Travancore · Indian Overseas Bank · Corporation Bank · United Bank of India · ICICI Bank Limited · Central Bank of India |
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Facilities : |
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Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
Price Waterhouse Chartered Accountants |
|
|
|
|
Associate Company : |
Welspun
Captive Power Generation Limited (WCPGL) |
|
|
|
|
Joint Venture Company : |
Welspun
Zucchi Textiles Limited (WZTL) |
|
|
|
|
Subsidiaries : |
· Welspun AG (WAG) · Besa Developers and Infrastructure Private Limited (BESA) · Welspun Mexico S.A. de C.V (WMEX) · Welspun Sorema Europe, S.A. (SOREMA) (Up to February 29, 2012) · Welspun Retail Limited (WRL) · CHT Holdings Limited (CHTHL) (Held through WHTUKL) · Welspun USA Inc., USA (WUSA) · Welspun Decorative Hospitality LLC (WDHL) · Welspun Holdings Private Limited, Cyprus (WHPL) · Kojo Canada Inc. (Held through WDHL) · Welspun Mauritius Enterprises Limited (WMEL) · Novelty Home Textiles SA de CV (Held through WMEL) · Welspun Home Textiles UK Limited (WHTUKL) (Held through WHPL) · Christy Home Textiles Limited (CHTL) (Held through CHTHL) · Welspun UK Limited (WUKL) (Held through CHTL) · Christy 2004 Limited (Held through WUKL) · Christy Europe GmbH (CEG) (Held through CHTL) · Christy UK Limited (CUKL) (Held through CHTL) · ER Kingsley (Textiles) Limited (ERK) (Held through CHTL) · SOREMA Welspun Distribution and Logistics, S. A, Portugal (Held through SOREMA) · SOREMA Welspun Espana S. L. U. (Held through SOREMA) · SOREMA Welspun Benelux B. V. Holland (Held through SOREMA) · SOREMA Welspun Deutschland GmbH, Germany (Held through SOREMA) |
|
|
|
|
Enterprises
over which Key Management Personnel or relatives of such personnel exercise
significant influence or control and with whom transactions have taken place
during the year : |
·
Welspun Global Brands Limited (WGBL) ·
Welspun Investments and Commercials Limited (WICL) ·
Welspun Corp Limited (WCL) (Formerly known as Gujarat Stahl
Rohren Limited (WGSRL) ·
Welspun Power and Steel Limited (WPSL) ·
Welspun Wintex Limited (WWL) ·
Welspun Mercantile Limited (WML) ·
Krishiraj Trading Limited (KTL) ·
Welspun Logistics Limited (WLL) ·
Welspun Syntex Limited (WSL) ·
Welspun Realty Private Limited (WRPL) ·
Vipuna Trading Limited (VTL) ·
MertzSecurities Limited (MSL) ·
Welspun Polybuttons Limited (WPBL) ·
Wel-treat Enviro Management Organisation Limited (WEMO) ·
Remi Metals Gujarat Limited (RMGL) ·
Welspun Maxsteel Limited (WMSL) ·
Welspun Projects Limited (WPL) ·
Methodical Investment and Trading Company Private Limited
(MITCPL) ·
Welspun FinTrade Limited (WFTL) ·
Welspun Finance Limited (WFL) ·
Welspun Urja Gujarat Private Limited (WUGPL) ·
Welspun Foundation for Health and Knowledge (WFHK) |
CAPITAL STRUCTURE
AFTER 31.12.2012
Authorised Capital : Rs. 1555.000 Millions
Issued, Subscribed & Paid-up Capital : Rs. 1000.270 Millions
AS ON 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
155,500,000 |
Equity Shares |
Rs. 10/- each |
Rs. 1555.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
89,012,269 |
Equity Shares |
Rs. 10/- each |
Rs. 890.120
Millions |
|
|
|
|
|
(a)
Reconciliation of number of shares
|
Equity
Shares : |
31.03.2012 |
|
|
|
Number of Shares |
Amount (Rs. millions) |
|
Balance as at the beginning of the
year |
88,976,269 |
889.760 |
|
Add : Shares issued to Qualified
Institutional Buyers (QIB) |
-- |
-- |
|
Add : Shares issued to Employees under Employee Stock
Option Scheme |
36,000 |
0.360 |
|
Balance as at the end of the year |
89,012,269 |
890.120 |
|
Preference
Shares : |
31.03.2012 |
|
|
|
Number of Shares |
Amount (Rs. millions) |
|
Balance as at the beginning of the
year |
500,000 |
50.000 |
|
Less: Shares redeemed during the
year |
(500,000) |
(50.000) |
|
Balance as at the end of the year |
-- |
-- |
(b)
Details of shares held by shareholders holding more than 5% of the aggregate
shares in the Company
|
Equity
Shares : |
31.03.2012 |
|
|
|
Number of Shares |
% of holdings |
|
Welspun Fintrade Limited |
17,409,268 |
19.56 |
|
Welspun Mercantile Limited |
9,519,294 |
10.69 |
|
Dunearn Investment Mauritius Pte
Limited |
9,079,463 |
10.20 |
|
Welspun Wintex Limited |
7,179,577 |
8.07 |
|
Krishiraj Trading Limited |
6,590,765 |
7.40 |
|
IFCI Limited |
6,034,069 |
6.78 |
# Less than 5%
(c) Rights, preferences and restrictions
attached to shares Equity Shares:
The company has one
class of equity shares having a par value of Rs.10 per share. Each shareholder
is eligible for one vote per share held. The dividend, in case proposed by the
Board of Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting, except in case of interim dividend. In the
event of liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential amounts,
in proportion to their shareholding.
Preference
Shares:
0%
Redeemable Preference Shares of Rs.100 each fully paid up issued pursuant to
High Court order were redeemable at par on or after repayment of all outstanding
term liabilities and preference shares held by banks and financial institutions
as on April 1, 2000 alongwith interest and dividend thereon.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
|
31.03.2012 |
31.03.2011 |
|
I.
EQUITY
AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
|
890.120 |
939.760 |
|
(b) Share Suspense Account |
|
104.750 |
0.000 |
|
(c) Reserves & Surplus |
|
8317.260 |
5682.690 |
|
(d) Money
received against share warrants |
|
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application money pending allotment |
|
0.000 |
0.000 |
|
Total
Shareholders’ Funds (1) + (2) |
|
9312.130 |
6622.450 |
|
|
|
|
|
|
(3) Non-Current
Liabilities |
|
|
|
|
(a) long-term borrowings |
|
9566.480 |
10076.900 |
|
(b) Deferred tax liabilities (Net) |
|
2161.990 |
1878.730 |
|
(c) Other long term liabilities |
|
16.500 |
19.500 |
|
(d) long-term provisions |
|
33.010 |
53.630 |
|
Total Non-current Liabilities (3) |
|
11777.980 |
12028.760 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
|
4917.510 |
4632.180 |
|
(b) Trade payables |
|
2637.150 |
1998.620 |
|
(c) Other current
liabilities |
|
3375.460 |
2991.550 |
|
(d) Short-term provisions |
|
83.030 |
58.720 |
|
Total Current Liabilities (4) |
|
11013.150 |
9681.070 |
|
|
|
|
|
|
TOTAL |
|
32103.260 |
28332.280 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
|
15551.080 |
15268.880 |
|
(ii) Intangible Assets |
|
14.740 |
19.570 |
|
(iii) Capital
work-in-progress |
|
1198.420 |
550.170 |
|
(iv) Intangible
assets under development |
|
0.000 |
0.000 |
|
(b) Non-current Investments |
|
852.070 |
190.470 |
|
(c) Deferred tax assets (net) |
|
0.000 |
0.000 |
|
(d) Long-term Loan and Advances |
|
3482.910 |
1558.410 |
|
(e) Other Non-current assets |
|
752.800 |
1703.130 |
|
Total Non-Current Assets |
|
21852.020 |
19290.630 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
|
1197.290 |
875.410 |
|
(b) Inventories |
|
4547.340 |
4527.320 |
|
(c) Trade receivables |
|
2059.790 |
1330.430 |
|
(d) Cash and cash
equivalents |
|
919.190 |
372.830 |
|
(e) Short-term loans and
advances |
|
761.030 |
1218.430 |
|
(f) Other current assets |
|
766.600 |
717.230 |
|
Total Current Assets |
|
10251.240 |
9041.650 |
|
|
|
|
|
|
TOTAL |
|
32103.260 |
28332.280 |
|
SOURCES OF FUNDS |
|
|
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
|
|
780.900 |
|
|
2] Share Application Money |
|
|
0.000 |
|
|
3] Reserves & Surplus |
|
|
5397.960 |
|
|
4] (Accumulated Losses) |
|
|
0.000 |
|
|
5] Share Suspense Account |
|
|
0.000 |
|
|
NETWORTH |
|
|
6178.860 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
|
|
16163.590 |
|
|
2] Unsecured Loans |
|
|
417.380 |
|
|
TOTAL BORROWING |
|
|
16580.970 |
|
|
DEFERRED TAX LIABILITIES |
|
|
1562.090 |
|
|
|
|
|
|
|
|
TOTAL |
|
|
24321.920 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
|
|
15068.530 |
|
|
Capital work-in-progress |
|
|
239.820 |
|
|
|
|
|
|
|
|
INVESTMENT |
|
|
929.440 |
|
|
DEFERRED TAX ASSETS |
|
|
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
|
|
3544.270
|
|
|
Sundry Debtors |
|
|
1733.530
|
|
|
Cash & Bank Balances |
|
|
830.120
|
|
|
Other Current Assets |
|
|
623.780
|
|
|
Loans & Advances |
|
|
3411.260
|
|
Total
Current Assets |
|
|
10142.960 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
|
|
1773.050 |
|
|
Other Current Liabilities |
|
|
139.180
|
|
|
Provisions |
|
|
146.600
|
|
Total
Current Liabilities |
|
|
2058.830
|
|
|
Net Current Assets |
|
|
8084.130
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
|
|
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
|
|
24321.920 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Revenue from operations |
25904.890 |
20491.860 |
18235.410 |
|
|
|
Other Income |
380.940 |
401.540 |
577.300 |
|
|
|
TOTAL |
26285.830 |
20893.400 |
18812.710 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of material consumed |
13541.490 |
|
15174.850 |
|
|
|
Purchase of stock in trade |
153.460 |
31.930 |
|
|
|
|
Changes in inventory of finished goods, work in progress and stock in
trade |
240.180 |
(851.770) |
|
|
|
|
Employees Benefit Expenses |
1541.650 |
1478.580 |
|
|
|
|
Other Expenses |
5931.790 |
5090.160 |
|
|
|
|
TOTAL |
21408.570 |
17659.910 |
15174.850 |
|
|
|
|
|
|
|
|
Less |
PROFIT/
(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION |
4877.260 |
3233.490 |
3637.860 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES |
1438.510 |
1069.690 |
870.050 |
|
|
|
|
|
|
|
|
|
|
PROFIT/
(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION |
3438.750 |
2163.800 |
2767.810 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
1187.430 |
1135.130 |
1063.250 |
|
|
|
|
|
|
|
|
|
|
PROVISION FOR DIMINUTION IN VALUE OF
INVESTMENTS [Exceptional Items] |
81.790 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
|
PROVISION FOR DIMINUTION IN VALUE OF
INVESTMENTS [Extraordinary Items] |
0.000 |
739.120 |
0.000 |
|
|
|
|
|
|
|
|
|
|
PROVISION FOR DOUBTFUL LOANS AND ADVANCES
[Extraordinary Items] |
284.350 |
937.910 |
0.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
BEFORE TAX |
1885.180 |
(648.360) |
1704.560 |
|
|
|
|
|
|
|
|
|
Less |
TAX |
714.080 |
349.480 |
554.500 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
AFTER TAX |
1171.100 |
(997.840) |
1150.060 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS YEARS’
BALANCE BROUGHT FORWARD |
2030.140 |
3046.180 |
2001.650 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Equity Shareholders |
0.000 |
0.000 |
73.090 |
|
|
|
Preference Shareholders |
50.000 |
0.000 |
17.410 |
|
|
|
Final Dividend for Previous Year |
0.000 |
15.600 |
0.000 |
|
|
|
Tax on Final Dividend |
0.000 |
2.600 |
15.030 |
|
|
BALANCE CARRIED
TO THE B/S |
3151.240 |
2030.140 |
3046.180 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Revenue
from Exports on FOB basis |
0.000 |
8.690 |
|
|
|
|
Interest
Income |
0.000 |
6.630 |
|
|
|
TOTAL EARNINGS |
0.000 |
15.320 |
1044.380 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
735.550 |
802.450 |
1801.810 |
|
|
|
Stores and Spares and Dyes and Chemicals |
245.630 |
175.480 |
143.790 |
|
|
|
Capital Goods |
1248.670 |
1248.160 |
149.020 |
|
|
|
Packing Material |
28.000 |
13.150 |
114.260 |
|
|
|
Others |
90.980 |
8.690 |
0.000 |
|
|
TOTAL IMPORTS |
2348.830 |
2247.930 |
2208.880 |
|
|
|
|
|
|
|
|
|
|
Earnings/ (Loss)
Per Share (Rs.) |
|
|
|
|
|
|
Basic and diluted after Extraordinary
Items |
11.77 |
(11.33) |
N.A. |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 |
30.09.2012 |
31.12.2012 |
31.03.2013 |
|
|
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
|
Sales Turnover |
7459.300 |
7989.800 |
7654.400 |
7326.000 |
|
Total Expenditure |
6200.800 |
6830.500 |
6485.300 |
6420.600 |
|
PBIDT (Excl OI) |
1258.600 |
1159.200 |
1169.100 |
905.400 |
|
Other Income |
169.100 |
115.300 |
64.400 |
143.000 |
|
Operating Profit |
1427.600 |
1274.500 |
1233.600 |
1048.400 |
|
Interest |
363.100 |
333.400 |
332.700 |
355.200 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
1064.600 |
941.100 |
900.900 |
693.200 |
|
Depreciation |
318.700 |
324.700 |
338.500 |
346.200 |
|
Profit Before Tax |
745.900 |
616.400 |
562.400 |
347.000 |
|
Tax |
246.900 |
220.400 |
182.800 |
(176.300) |
|
Provisions and Contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Reported PAT |
499.000 |
396.000 |
379.600 |
523.300 |
|
Extraordinary Items |
(113.700) |
66.200 |
(51.300) |
15.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
385.300 |
462.200 |
328.300 |
538.300 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
4.46
|
(4.78)
|
6.11
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
7.28
|
(3.16)
|
9.35
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
6.27
|
(2.34)
|
6.76
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.20
|
(0.10)
|
0.28
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
1.56
|
2.22
|
2.68
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.93
|
0.93
|
4.93
|
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 |
Yes |
|
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 |
Yes |
|
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 |
|
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 |
Yes |
LITIGATIONS DETAILS
HIGH COURT OF GUJARAT
LETTERS PATENT APPEAL No. 512 of 2007
In SPECIAL CIVIL APPLICATION/ 19753/ 2006 ( DISPOSED ) On :
30/11/2006
Status : PENDING CCIN No : 001014200700512
Next Listing Date : 12/08/2013
|
Coram |
· HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI · HONOURABLE MR.JUSTICE A.G.URAIZEE |
Not Before : |
· HONOURABLE MR. JUSTICE B.J.SHETHNA · HONOURABLE MR.JUSTICE C.K.BUCH · HONOURABLE MR.JUSTICE DN PATEL · HONOURABLE MR.JUSTICE K.M.THAKER · HONOURABLE MR.JUSTICE RAJESH H.SHUKLA |
|
S.NO. |
Name of the
Petitioner |
Advocate On Record |
|
1
|
UNION OF INDIA |
(MR RM CHHAYA) for: Appellant(s) |
1|
S.NO. |
Name of the
Respondant |
Advocate On Record |
|
1 |
WELSPUN INDIA LIMITED UIIUR SUBRAMANYA RAO |
M/S TRIVEDI & GUPTA for :Respondent(s) |
|
Presented On |
: 06/03/2007 |
Registered On |
: 06/03/2007 |
|
Bench Category |
: DIVISION BENCH |
District |
: VALSAD |
|
Case Originated
From |
: THROUGH ADVOCATE |
Listed |
: 60 times |
|
StageName |
: FOR FINAL HEARING |
||
|
Act |
LETTERS PATENT, 1865 |
||
OFFICE DETAILS
|
S. No. |
Filing Date |
Document Name |
Advocate Name |
Court Fee on
Document |
Document Details |
|
1 |
10/08/2010 |
APPEARANCE NOTE |
MR PS CHAMPANERI ADVOCATE |
- |
MR PS CHAMPANERI:1-3 |
|
2 |
08/10/2010 |
APPEARANCE NOTE |
(MR RM CHHAYA) ADVOCATE |
- |
(MR RM CHHAYA):1 |
COURT PROCEEDINGS
|
S. No. |
Notified Date |
Court Code |
Board Sr. No. |
Stage |
Action |
Coram |
|
1 |
29/11/2012 |
6 |
26 |
FOR FINAL HEARING |
NEXT DATE |
HONOURABLE MR.JUSTICE JAYANT PATEL HONOURABLE MR.JUSTICE MOHINDER PAL |
|
2 |
24/12/2012 |
5 |
24 |
FOR FINAL HEARING |
NEXT DATE |
HONOURABLE MR.JUSTICE JAYANT PATEL HONOURABLE MR.JUSTICE MOHINDER PAL |
|
3 |
22/02/2013 |
4 |
51 |
FOR FINAL HEARING |
NEXT DATE |
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI HONOURABLE MR.JUSTICE R.D.KOTHARI |
|
4 |
15/03/2013 |
3 |
- |
FOR FINAL HEARING |
NEXT DATE |
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI HONOURABLE MR.JUSTICE R.D.KOTHARI |
|
5 |
22/03/2013 |
3 |
- |
FOR FINAL HEARING |
NEXT DATE |
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI HONOURABLE MR.JUSTICE R.D.KOTHARI |
|
6 |
10/05/2013 |
3 |
7 |
FOR FINAL HEARING |
NEXT DATE |
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI |
|
7 |
27/06/2013 |
2 |
29 |
FOR FINAL HEARING |
NEXT DATE |
HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI HONOURABLE MR.JUSTICE A.G.URAIZEE |
|
8 |
12/08/2013 |
2 |
- |
FOR FINAL HEARING |
undefined |
HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI HONOURABLE MR.JUSTICE A.G.URAIZEE |
AVAILABLE ORDERS
|
S. No. |
Case Details |
Judge Name |
Order Date |
CAV |
Judgement |
View |
Download |
|
1 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE THE CHIEF JUSTICE Y.R.MEENA HONOURABLE MR.JUSTICE J.C.UPADHYAYA |
24/04/2008 |
N |
N |
View |
Download |
|
2 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE THE CHIEF JUSTICE MR. S.J.MUKHOPADHAYA HONOURABLE MR.JUSTICE AKIL KURESHI |
11/05/2010 |
N |
N |
View |
Download |
|
3 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE MR.JUSTICE JAYANT PATEL HONOURABLE MR.JUSTICE MOHINDER PAL |
29/11/2012 |
N |
N |
View |
Download |
|
4 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE MS. JUSTICE R.M.DOSHIT HONOURABLE MR.JUSTICE SHARAD D.DAVE |
25/07/2008 |
N |
N |
View |
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|
5 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE THE CHIEF JUSTICE Y.R.MEENA HONOURABLE MR.JUSTICE ANANT S. DAVE |
10/04/2007 |
N |
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|
6 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI HONOURABLE MR.JUSTICE R.D.KOTHARI |
15/03/2013 |
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|
7 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE THE CHIEF JUSTICE Y.R.MEENA HONOURABLE MR.JUSTICE J.C.UPADHYAYA |
27/02/2008 |
N |
N |
View |
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|
8 |
LETTERS PATENT APPEAL/512/2007 |
HONOURABLE THE CHIEF JUSTICE Y.R.MEENA HONOURABLE MR.JUSTICE J.C.UPADHYAYA |
02/04/2008 |
N |
N |
View |
Download |
UNSECURED LOANS
|
Unsecured Loans |
31.03.2012 |
31.03.2011 |
|
|
(Rs. In Millions) |
|
|
LONG-TERM
BORROWINGS |
|
|
|
Inter-Corporate
Loan from Welspun Investments and Commercials Limited |
0.000 |
80.000 |
|
SHORT-TERM
BORROWINGS |
|
|
|
Working
Capital Loans from Banks |
396.770 |
745.700 |
|
Total |
396.770 |
825.700 |
GENERAL INFORMATION:
Subject is a leading manufacturer of wide range of
home textile products, mainly terry towels, bed linen products and rugs. The
company is a public limited company and is listed on the Bombay Stock Exchange (BSE)
and the National Stock Exchange (NSE).
FINANCIAL HIGHLIGHTS
During the year, the Company registered a growth of 26.43% in Revenue from Operations' 48.31% in PBIDT and 110.91% in PBT (before exceptional items).
With steady improvement in western economies and correction in the raw material prices' the Company's business witnessed remarkable growth. The Board anticipates this trend to continue during the next financial year.
Mexican operations of the Company' undertaken for decorative bedding through an indirect subsidiary formed under its Swiss subsidiary' have been wound up due to non-conducive atmosphere for the company's business. In view of the aforesaid closure' the company's subsidiaries of Mexico and Switzerland have been decided to be wound up.
SCHEME OF ARRANGEMENT
On November 26'2012' the Honourable High Court of Gujarat at Ahmedabad has passed an order ("Order") approving the Composite Scheme of Arrangement between the Company' Welspun Global Brands Limited and Welspun Retail Limited. The Order has become effective from December 7'2012. Pursuant to the Order:
i) Welspun Global Brands Limited ("WGBL") has been amalgamated as a going concern with the Company;
ii) Post the aforesaid transfer' the Marketing Business Undertaking of the Company along with investments in subsidiary Companies viz. Welspun USA Inc' Welspun Holdings Private Limited and Welspun Mauritius Enterprises Limited (i.e. WGBL Undertaking) has been transferred to Welspun Retail Limited; and
iii) The name of Welspun Retail Limited sanctioned to be changed to Welspun Global Brands Limited (formal change of name certificate from Registrar of Companies is being obtained).
MANAGEMENT
DISCUSSION AND ANALYSIS
WELSPUN
INDIA BUSINESS OVERVIEW
Subject is
a part of the US$ 3.5 billion Welspun Group is the second largest home textile
player in the world and the largest home textile company in Asia. With
manufacturing facilities in India and a distribution network in 32 countries,
it is the largest exporter of home textile products from India. Supplier to 14
of the Top 30 global retailers, the company has marquee clients like Wal-Mart,
J C Penny, Target and Macy's to name a few.
The
financial year 2011-12 (FY12) has been a transitional year for Welspun's
textile business. The most significant step was the consolidation of textile
business under a single umbrella, which has re-created a unified stronger
entity where 'Welspun Global Brands Limited' the group's textile marketing arm
has merged with Welspun India Limited and simultaneously transferred the same
to its subsidiary, Welspun Retail Limited to transform into a textile
powerhouse. This simplified structure provides WIL and its stakeholder's better
control on all manufacturing and branding activities and presents an
opportunity for the company to increase its market share globally. The company
now has an increased presence in newer markets like Canada, South Africa,
Kenya, Australia, Japan, China, Korea and Russia. This entry into newer markets
has helped it in diversifying the geographical risks so that the Company is not
adversely affected by any one market where it operates. The company also exited
all the non-performing international manufacturing and marketing entities,
thereby ensuring stronger and sustainable business growth and financial
performance. The exit cost and losses are appearing as one-time losses in the
financial numbers of FY12.
Additionally,
WIL has also taken steps to pare down the retail network in India by reducing Wel
home chain of stores. Going forward, preference will be given to shop-in-shop
concept rather than setting up own retail outlets.
Further,
seeing the tremendous potential in the Advanced Textiles market, the company
forayed into this segment starting with the Non- Woven category. WIL has put up
a new plant which has started production in October 2012. In a short span of
time, it is already certified with J&J, Covadian, Rocklin and Reckitt
Benckiser. Some of the specialized products that the company is currently
manufacturing in Advanced Textiles are top end baby care wipes, hygiene wipes,
filtration cloth and automotive nonwovens. WIL is well placed with high end
global scale capacity, skilled workforce, product knowledge expertise and
coordinated marketing approach to capitalise on the technical textile growth.
WIL is thus well placed to strengthen its position as a global player. The
company is confident that all the above steps will reflect positively in the
financial performance for FY13.
GLOBAL ECONOMIC
OVERVIEW
The global
economic environment was challenging in FY12. The recovery in the developed
economies that seemed to be shaping well at the start of 2011 lost steam
towards the fag-end of the year. The momentum loss was on account of the
protracted debt crisis in the euro area and as fiscal fragilities dampened
business and consumer confidence. However, contrary to fears that came to the
fore time and again during FY12, global growth did not stall.
Global
manufacturing slowed sharply during FY12 and Euro area periphery saw a
significant decline in activity driven by financial difficulties evident in a
sharp increase in sovereign rate spreads. Activity disappointed in other
economies too, notably the United States and United Kingdom. Spillovers from
advanced economies and homegrown difficulties affected emerging markets and
developing economies, resulting in a slowdown in growth in these economies.
These spillovers lowered commodity prices and weighed on activity in many
commodity exporters. The result of these developments was that growth was
weaker than projected, in significant part because of the continuing intensity
of the Euro area crisis. Other causes of disappointing growth included weak
financial institutions and inadequate policies in key advanced economies.
Furthermore, a significant part of the lower growth in emerging market and
developing economies related to domestic factors, notably constraints on the
sustainability of the high pace of growth in these economies and building
financial imbalances.
Even in
the first half of FY13, growth prospects, both in developed economies and
emerging economies have continued to remain weak. In this period, the
International Monetary Fund (IMF) has revised its global growth projections for
both these groups downwards. Weaker growth prospects largely reflect the impact
of sovereign debt overhang and banking fragilities in the euro area coupled
with fiscal multipliers impacting growth with on-going fiscal consolidation.
Euro area risks have affected business confidence and caused world trade to
decelerate. Consequently, several emerging economies face weaker external
demand on top of an already slowing domestic demand. Further downside risks to
global growth stem from a possible "fiscal cliff" leading to sudden
and sharp fiscal consolidation in the US.
Thus far
in 2012, the US economy has grown at a relatively slow rate around 2.1%. In
2013, the US economy is expected to grow at a similar rate.
In Europe,
the euro area crisis has deepened in spite of policy action aimed at resolving
it and new interventions have been necessary to prevent matters from
deteriorating rapidly. Banks, insurers, and firms have swept spare liquidity
from the periphery to the core of the euro area, causing sovereign spreads in weaker
European economies to hit record highs. The UK economy, while not part of the
Euro zone, has nevertheless been in the doldrums since the financial crisis of
2008. While technically out of recession, unemployment has grown and consumer
confidence remains depressed. Negative growth in property prices has made
consumers cautious of debt despite very low interest rates. As a result savings
rates have increased while wage growth has lagged behind inflation.
There is
considerable uncertainty around the outlook of the global economy-whether it is
just hitting another bout of turbulence on the path of a slow and bumpy
recovery or whether the current slowdown has a more lasting component. The
answer depends on what policy actions various government policymakers come up
with to deal with the major short-term economic challenges in their respective
countries and the impact of these policies. The Euro crisis while still severe,
has shown signs of stabilizing. While there are no signs of growth returning
outside of Germany, there is hope that the bottom of the curve has been reached
in the Eurozone.
INDIA
ECONOMIC OVERVIEW
India was
also adversely affected by the global economic environment in FY12. Though
India outperformed most of its peers in terms of growth, its potential and
actual growth slowed. Growth decelerated in FY12 to 6.5% after two years of
relatively good performance (8.4% in FY10 and FY11) and dropped to below the
economy's potential. The drop in growth was a result of combination of domestic
and global factors. Global macroeconomic and financial uncertainty, weak
external demand, elevated level of prices, widening twin deficits and falling
investment combined to adversely impact growth. The investment climate worsened
due to structural impediments, policy uncertainty, inflation persistence and
rising interest rates.
Economic
indicators suggest that the slowdown has continued in the first half of FY13
with slack industrial activity and sub-par services sector performance.
Inflation has stayed sticky at around 7.5 per cent in FY13 so far. Non-food
manufacturing inflation has not softened in spite of the negative output gap
that has emerged as a result of slowing growth. Fiscal imbalances, past
exchange rate depreciation and feeble supply response have impacted inflation.
However,
hopes of a growth revival have increased in recent months. Since the second
week of September 2012, the government has announced a number of policy
measures towards fiscal consolidation by reducing fuel subsidies and clearing
stake sales in public enterprises. It has also taken several other reform
measures including those related to FDI, infrastructure investment and overseas
borrowings. While these measures have helped improve sentiments, their impact
on growth will be felt with a lag, particularly after the substantive
implementation of the initiatives relating to FDI and infrastructure. The
improved prospects for Rabi crop, following the reduction in monsoon deficit
with late rains are also expected to contribute to improving growth and
inflation outlook, even though the recovery may take some time to set in.
Though inflation is likely to remain sticky in near months, some relief may
follow as demand-side inflationary pressures ebb after a period of high wage
and cost push inflation. Expectations of a decline in inflation have also
raised hopes of a reduction in interest rates, which could further improve
growth.
GLOBAL
TEXTILE INDUSTRY AND TRADE
The textile
and apparel trade was estimated to be ~US$ 650 billion in 2011. This is
approximately 4% of the total global trade of all commodities estimated at~ US$
15 trillion.
The
current global textile and apparel industry evolved in two parts as distinct supplier
and consumption hubs. This has resulted in high level of trade between the two
hubs. During the last 10 years, textile production has gradually shifted from
developed countries like the US and UK towards low cost emerging market
countries in Asia that have favorable conditions conducive to textile and
apparel production. Mature economies have now emerged as major consuming hubs
while developing economies are still in the primary stages of consumption.
In the
period 1995 to 2010, textile and apparel trade grew at a modest CAGR of 5% per
annum. During 1995 to 2000, trade growth remained muted at 3% CAGR. However, it
accelerated to 7% during 2000 to 2005 and then fell in the subsequent five
years to 4% CAGR. Global demand is expected to continue growing at mid- single
digit growth rates in the period till year 2020. This growth is expected to be
driven more by emerging market economies in the next few years as demand growth
from developed nations is expected to slow down.
In the
last few years, several new countries like Bangladesh and Vietnam have emerged
as strong textile and apparel suppliers and have shown spectacular growth in
exports. As Figure 6 shows, the growth rate in export of textiles and apparels
developed countries like the US, UK, Italy, France has been much lower than the
growth rate in emerging market countries like Bangladesh, Vietnam, India and
China.
Over the
last couple of years, labor costs across the globe have risen in the textile industry.
This along with raw material price fluctuations has led to some uncertainty in
the industry. In response to this, unit value prices have already started
seeing an upward trend, and global competitors have been forced to look for
strategic advantages.
GLOBAL
HOME TEXTILES MARKET
In 2011,
the global home textiles market was estimated at around US$70 billion of which
cotton made-ups account for 50% (~US$35 billion). Both these markets have been
growing at a CAGR of 6% over the last 5 years.
The home
textiles market is evolving very fast. The market is moving from the developed
countries to fast-growing developing economies. Growth in population and
disposal incomes is the primary driver of consumption in home textiles. Hence,
there has been an increase in demand from countries like China, India, Brazil
and Russia.
India's
share in the global home textiles trade is around 7% and $3 billion
specifically in cotton made-ups. Around 2/3rd of India's exports are into the
US and EU, according to the Confederation of Indian Textile Industry
Home
Textiles Market in the US
In 2011,
the home textiles market in the US was approximately US$23.1 billion, down by
2% from 2010. Bedding accounts for 51.4% of the total market while bath
accounts for 25.3%. The remaining 23.3% market is split between window and
kitchen and dining.
The major
global sourcing destinations for home textiles are India, China and Pakistan.
Last year, there has been a revival of Turkey and other European countries as
important sourcing destinations in addition to the growing strength of other
low cost countries like Bangladesh, Vietnam, Philippines and Indonesia.
Sheets
Market Share by Country in USA
India's
share in sheets in US has gone up primarily because of its ability to manufacture
superior quality sheets at comparatively lower costs than China and Pakistan.
However, with the emergence of blended fabric for sheets and its growing
popularity, there are certain challenges and threats to the sheets business
from India.
Top of Bed
Market Share by Country in USA
In top of bed (basic and decorative bedding), China is a dominant player followed by Pakistan. India's share in TOB is lower because of the popularity of polyester fabric used in manufacturing TOB.
As is apparent from the above graph,
India, China and Pakistan have over 80% of the home textile market share in the
US. India has been slowly gaining share given political instability in Pakistan
and rising labor costs in China.
BUSINESS
ENVIRONMENT IN MAJOR MARKETS
Business
Environment-USA
Trends for
consumer spending look positive. Since, home textiles fall under discretionary
spending there are hopes of seeing higher purchases in this category as
consumers release the pent-up demand for these products.
The US
economy is also seeing a marked change in the demographic patterns. By 2015,
one-third of the population will consist of baby boomers with focus shifting to
health and healthcare. In addition to this, by 2015, nearly 50% of its
population below 25 years will be of Hispanic origins. These are important
trends to watch in the home textiles business as they may affect the tastes and
preferences of the consumers and hence, the retailers with whom home textile
manufacturers works with.
Business
Environment – UK
Increase
in commodity prices and depressed consumer demand have applied a squeeze on
margins right through the supply chain. With sales lower, retailers have looked
for higher margins to protect profit. Producers have not passed on the full
impact of commodity and labor cost increases.
Importers
and middle men have been cut out as retailers go direct to suppliers to
increase margins. Better supply chain technology has enabled retailers to do
this with the full service importers losing turnover or moving to a sales agent
role to survive.
Retailers
who are not big enough to buy direct are finding it difficult to compete on
price. They still depend upon importers and have reduced quality in an attempt
to preserve margin. Fabric thread counts have been under downward pressure in
the small independent sector while supermarkets and large category stores
maintain quality through their larger buying power. This has undermined the
value equation for many retailers with the supermarkets gaining market share.
The branded
market in the UK remains steady where strong differentiation on product and
design resonates with the consumer. Discounted activity on a high-low price
strategy has lost leverage with the consumer. The over use of the discount
model has led to a savvy consumer who, with the help of the internet, is now
much better at determining value for money. Discounting still works but it
increasingly needs to be genuine.
Business
Environment-Europe
The Euro zone
remains depressed with contraction of sales volumes especially in the PUGS
(Portugal, Italy, Ireland, Greece and Spain). Germany is an exception with
strong employment and robust economic performance. Unlike the US where
retailers have significant scale, the European market is more regional with a
higher number of relatively smaller retailers. Lower sales volumes and higher
commodity prices have put relentless pressure on margins and quality. As a
result, European buyers are very price driven and less quality conscious in
terms of light and thread count. They tend to buy from medium sized low cost
producers. Many buy through agents and have not moved to direct sourcing on the
scale that UK retailers have. It is expected that there will be further opportunity
to develop direct sourcing relationships with producers in Asia.
INDIAN
TEXTILE INDUSTRY
India is
the second largest producer of cotton, textiles and garments, and the only
major textile exporting country with a cotton surplus. Indian textile industry
contributes ~ 12% of India's exports and 4% towards GDP with presence across
the value chain. Employment in the Indian textile and apparel sector stands at
45 million and with an additional employment of 60 million in allied sectors;
total employment stands at 105 million.
India is
among the very few countries which have a presence across the entire supply
chain, from natural and synthetic fibers right up to finished goods
manufacturing. It has presence in organized mill sector as well as decentralized
sectors like handloom, power loom, silk, etc.
The total
Indian textiles and apparel market is estimated at ~US$ 58 billion (apparel
retail contributes ~ US$ 40 billion, technical textiles contributes""
US$ 14 billion and home textiles contributes ~ US$4 billion). The current
domestic textile and apparel market is expected to grow at 9% annually to reach
US$ 141 billion by 2021. Indian textile and apparel market size (domestic + exports)
is projected to reach US$223 billion by 2021
INDIA'S
SHARE IN GLOBAL TEXTILE EXPORTS
Textile exports play an important role in overall exports from India. The Indian textiles and clothing industry is one of the largest contributors to the country's exports. India's share in the world textile and clothing market is small, but rising steadily. India's share in the global textile and apparel markets is around 4% and 3% respectively. The export basket of the Indian textiles industry consists of a wide range of items: readymade garments, cotton textiles, handloom textiles, man-made fibre textiles, wool and woolen goods, silk, jute and handicrafts, including carpets. In the global exports of textiles, India ranked as the third largest exporter, trailing EU-27 and China. India's share in global textile exports has seen a steady increase from 2.21% to 4.02% between 1990 and 2010
INDIA
EXPORT-IMPORT SCENARIO
Indian
textile and clothing exports have come a long way in the last decade or so,
doubling the exports value in this duration. Indian textile & apparel as an
export category has outperformed several large textile producers of past
including Germany, Italy, USA, Turkey, etc.
The
reasons for high growth of textile and apparel exports from India are the
country's strong raw material base, design and skill heritage, manufacturing
capacities that are flexible for small orders, manpower cost competitiveness
and government's incentive schemes for export promotion.
The USA
and the EU account for about two-third of India's textiles exports. Although
India exports textiles to more than 100 countries, they are heavily skewed in
terms of export destinations. The top 10 destinations for India's readymade
garments exports account for nearly 80% of India's RMG exports. Even among the
leading 10 export markets, the US accounts for the largest chunk. The exports
have grown from US$ 19 billion in FY07 to US$ 34 billion in FY12 at a CAGR of
12% as shown in the figure 13 below. India's textile exports declined in FY09
mainly due to fall in demand owing to the global slowdown. However, during FY10,
exports recovered and recorded an increase of 5%. With a relatively recovering
economy, exports of textiles rose sharply by 23% in FY11. Subsequently, during
FY12, textile exports recorded healthy growth of 26% over exports in FY11.
India also
imports textile and apparel goods to the tune of US$ 4 billion, which comprises
mainly of products like high end woolen / worsted fabrics, coated and
performance fabrics, other technical textile and specialty products, fine
cotton yarn dyed fabrics, premium and super premium garment categories, etc.
The main reason of imports is unavailability of these products. In recent years
even some inexpensive commodity articles like raw silk, other fibers, basic
fabrics and garments have also made in-roads from suppliers like China.
CHALLENGES
FACED BY THE INDIAN TEXTILE INDUSTRY
The Indian
textile industry has not performed to its full potential in spite of its
importance in the Indian economy. It faces several challenges in aspects of production,
marketing, and support infrastructure. The technology used in manufacturing of
textile and apparel in India considerably lags behind that of developed
nations. The industry also suffers due to general infrastructure related
issues.
The key
challenges faced by the industry are:
Manufacturing:
Ř Low value addition
Ř Low Productivity
Ř Low pace of modernization
Ř Economies of scale not adequate
Ř High fragmentation
Marketing:
Ř Limited markets
Ř Sluggish demand in traditional
markets
Ř Higher growth of competitors
Ř Weak brand positioning of India
Support
Infrastructure:
Ř Not up to date infrastructure
Ř High transaction costs
Ř Unreliability in transit times
INDIAN
TEXTILE INDUSTRY OUTLOOK-WELL POISED FOR STRONG GROWTH
As manufacturing
becomes more and more expensive in the developed economies, manufacturers have
shifted based to lower-cost countries like India, Bangladesh, Vietnam, Pakistan
etc. The primary benefit to these manufacturers has come in terms of
significantly lower cost of labor ensuring cheaper products which in turn could
fuel demand, as well as favourable overall conditions for textile
manufacturing. Among the major exporting countries, India is well poised to
increase its market share.
India -
"Net Exporter" of cotton
Of all the
major textile supplying countries, India is a major "Net Exporter" of
cotton as the indicated in table 2. Other major suppliers like China, Pakistan
and Turkey have higher cotton imports than exports, and while Brazil does have
higher exports than imports, the exports are not as high as those of India.
This puts India at an advantage against other major exporters in terms of raw
material availability and costs.
De-Risking
from China and Pakistan
With
China's rising per capita income and transition to a developed country,
domestic consumption has increased. This is expected to impact China's ability
to export. Further, China's concentration on high end industries is increasing
and focus on textiles has reduced compared to previous decades. China is also
facing problems related to power generation due to environmental concerns.
Textile, being a high energy consuming industry, has been impacted by this
issue. China's low labor cost advantage has also suffered as labor costs have
been rising between 10-20% every year in the last few years. A fast ageing
population and one child policy would cause wage inflation to rise at an even
brisker pace which is averaging about 18% p.a. Currency appreciation has also
made Chinese exports less competitive. Customers are also concerned about the
geopolitical situation in Pakistan. These factors have forced importers from
China and Pakistan to look at alternative locations such as India.
Proposed
FTA with EU
The
proposed India-EU FTA, to be known as the Bilateral Trade and Investment
Agreement (BTIA), is in the final stages of discussion and an agreement is
expected soon. The agreement is expected to boost bilateral trade and stimulate
the flow of capital, technology and personnel between the two regions. It
proposes removal of duties on about 90% of bilaterally traded goods during the
next ten-year period. If the FTA is signed, then the import duty of 9.6% per
garment and 5% on other textile items is expected to end. This will make Indian
exports more competitive against other key exporters like China and Bangladesh
and further open up the European market for Indian exporters.
WELSPUN
OPERATIONS OVERVIEW
WIL, along
with its subsidiaries manufactures and markets bed and bath linen products-bed
sheets, pillow cases, comforters, quilts, mattress pads, pillows, to bath rugs,
towels and bath robes. Majority of these products are presented and sold in the
key markets like USA, Canada, UK, Europe and Japan through Welspun USA Inc. and
Welspun UK Limited., sales arms of WIL based in the US and UK respectively.
Over 90%
of WIL's production is exported to various countries globally. WIL has
subsidiaries based out of New York in USA and Manchester in UK to look after
its North American and European businesses respectively.
Over the
years, WIL has moved from being a US centric player to becoming a global player
in the home textiles category. WIL has an increased presence in newer markets
like Canada, South Africa, Australia, Japan and Russia. This entry into newer
markets has helped WIL in diversifying the geographical risks so that the
Company is not adversely affected by any one market where it operates.
Currently, nearly 70% of WIL revenues come from the US markets. This is
significantly lower now compared to the nearly 90% of business coming from the
US nearly a decade ago.
In
addition to sales through its subsidiaries, WIL continues to look at brand
licensing opportunities while maintaining its owned brand portfolio. Currently,
WIL's owned brand portfolio includes Christy, Welhome, Spaces Home and Beyond
and Pure Opulence-to name a few. The Company's licensed brand portfolio
includes Simmons and Beautyrest brands in the US primarily for the sheets
category and Agent Provocateur and English Heritage in the UK.
In
addition to this, WIL also has presence in retail through owned brands like
Christy in the UK and Spaces Home and Beyond in India. WIL operates through a
mode of concessionaire stores in both locations. In addition to the
concessionaires, Christy also has its own outlet stores. The retail channel
helps WIL understand its customers better and enables WIL to deliver to the
consumer's specific needs. This feedback coupled with market research is shared
with the product development team to provide innovative products and solutions
for the customers. WIL aims to reach out to consumers through numerous
channels. Hence, WIL also has a small presence in catalog and online sales
through Christy in the UK.
Asa service oriented
organization, WIL also provides Supply Chain Management (SCM) and distribution
services to the key customers in the US through the warehouses in Ohio and also
in UK to a limited extent through their warehousing operations there.
Three
years ago, WIL also entered the hospitality segment as it provided with ample
newer opportunities. WIL has seen some traction lately and sees this business
growing exponentially over the next three to four years. WIL remains focused on
the core hospitality products like rugs and sheets, while not so much on the
decorative hospitality products.
FUTURE
OUTLOOK
Welspun's
DNA has always been strong and aggressive growth. In these challenging times,
the company's strategy has been stringent cost controls, aggressive foray into
new markets, and consolidation and streamlining of operations to maximize the
ROI.
In FY13,
the company's aim is to improve its profits through continued cost control. WIL
also aims to improve its revenues to become the leader in home textile manufacturing
in the world in the next couple of years. This growth will come not only from
innovations in its existing product categories but through improved sales in
new categories like top of bed products and technical textiles. WIL is
developing products focused on non-US markets, so that the company can further
reduce its dependence on the US markets.
WIL is
also looking at further streamlining its operations and reviewing the internal
systems and processes to improve efficiency and provide better customer
service. The company is leveraging IT to streamline its supply chain. In this
year, WIL is also foraying into advanced textiles and is looking at launching
its patent pending products in the global market.
The
proposed India-EU FTA is expected to boost India's as well as WIL's textile
exports to the EU. With the removal of import duties on textiles, Indian
exporters including WIL will become more competitive against China and
Bangladesh. In view of the expected increase in demand on account of the likely
New Free Trade Agreement of Eurozone, Subject is proposing Capital Expenditure
of Rs. 18 Billion towards integration projects, modernisation and expansion in
India. The Company has also decided to invest a part in advanced textile as it
is entering segments like Hometech, Mobiltech, Clothtech, Indutech, Meditech
and Personal Care.
Welspun
believes that the various steps taken by it to restructure the business will
start yielding results in FY13.
Welspun
expects to continue delivering value to its customers and other stakeholders
by:
Ř Focusing on innovation that delivers
higher quality products at lower costs
Ř Adopting a solutions based approach
to customer needs and gearing up to become a consumer-centric organization
Ř Ongoing commitment towards
maintaining market share in existing markets and growing in newer markets
Ř Looking at alternative channels to
boost growth by leveraging hospitality, e-commerce, retail, etc. across various
geographies that WIL is present in
Ř Continuing to focus on developing
robust internal systems and processes to reduce response time further
Ř Leveraging favourable government
policies for textiles and proposed Europe FTA
The
Company is well placed to benefit from the steadying growth in US, which is one
of the largest markets for Welspun. The capacity closure in developed nations
has certainly improved overall supply capability of major textile-exporting
countries, including India. Welspun is well placed to leverage its India
location, which is cotton surplus. The Company is well poised to sweat its
assets, with operations at high utilization rates of about 90% in towels and
sheets.
CONTINGENT
LIABILITIES
(Rs. in millions)
|
Description |
31.03.2012 |
31.03.2011 |
|
Excise,
Customs and Service Tax Matters |
677.480 |
492.280 |
|
Stamp
Duty Matter |
4.460 |
4.460 |
|
Sales
Tax |
36.440 |
10.610 |
|
Corporate
Guarantees |
8891.900 |
8738.520 |
|
Bank
Guarantees |
166.890 |
220.160 |
|
Claims
against Company not acknowledged as debts |
5.510 |
7.850 |
|
Note: The Company
has issued corporate guarantee aggregating Rs. 8,891.900 million (March 31,
2011: Rs. 8,738.520 million) on behalf of Welspun Retail Limited (WRL),
Welspun USA Inc. ('WUSA'), Welspun Home Textiles UK limited ('WHTL'), Welspun
Captive Power Generation Limited (WCPGL) and CHT Holdings Limited ('CHTHL'). |
||
FIXED ASSETS
Ř Freehold Land
Ř Buildings
Ř Leasehold
Improvements
Ř Plant and
Machinery
Ř
Vehicles
Ř
Furniture and Fixtures
Ř
Office Equipments
Ř
Computers
Ř
Computer Software
Ř
Goodwill
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. 59.69 |
|
|
1 |
Rs. 91.66 |
|
Euro |
1 |
Rs.78.69 |
INFORMATION DETAILS
|
Report Prepared
by : |
NTH |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
|
DEFAULTERS |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
52 |
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.