MIRA INFORM REPORT
|
Report Date : |
04.06.2013 |
IDENTIFICATION DETAILS
|
Name : |
GTN TEXTILES LIMITED |
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|
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|
Registered
Office : |
Door No. VIII/ 911, Erumathala Post, Aluva, Ernakulam - 683105, Kerala |
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Country : |
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Financials (as
on) : |
31.03.2012 |
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Date of
Incorporation : |
28.03.2005 |
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|
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|
Com. Reg. No.: |
09-018062 |
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Capital
Investment / Paid-up Capital : |
Rs. 116.405 Millions |
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|
|
|
CIN No.: [Company Identification
No.] |
L18101KL2005PLC018062 |
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|
TAN No.: [Tax Deduction &
Collection Account No.] |
CHNG00626D |
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PAN No.: [Permanent Account No.] |
AAACG8605N |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are listed on
the Stock Exchanges. |
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Line of Business
: |
Manufacturer and Exporter of Cotton Yarn. |
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|
|
|
No. of Employees
: |
902 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
B (35) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Maximum Credit Limit : |
USD 1285600 |
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|
Status : |
Moderate |
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|
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Exist |
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Comments : |
Subject is an established company having a moderate track record. It
has incurred loss from its operations during 2012. However, trade relations
are reported to be fair. Business is active. Payments are reported to be slow
but correct. The company can be considered for normal business dealings with some
caution. |
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) |
|
|
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 : BB- |
|
Rating Explanation |
Moderate risk of default. |
|
Date |
December 2012 |
|
Rating Agency Name |
CARE |
|
Rating |
Short Term Bank facilities : A4 |
|
Rating Explanation |
Minimal degree of safety and very higher credit risk. |
|
Date |
December 2012 |
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 / Factory : |
Door No. VIII/ 911, Erumathala Post, Aluva, Ernakulam - 683105, Kerala |
|
Tel. No.: |
91-484-3080100 |
|
Fax No.: |
91-484-2838585 |
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E-Mail : |
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Website : |
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Head Office / Marketing : |
3rd Floor, Palal Towers, |
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Tel. No.: |
91-484-3928300 |
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Fax No.: |
91-484-2370812/ 3928380 |
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E-Mail : |
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Corporate Office : |
43, 4th Floor, Mittal Chambers, 228 Nariman Point, Mumbai –
400021, |
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Tel. No.: |
91-22-32060265/ 32060266 |
|
Fax No.: |
91-22-22874144 |
|
E-Mail : |
DIRECTORS
As on : 31.03.2012
|
Name : |
Mr. B K Patodia |
|
Designation : |
Chairman and Managing Director |
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|
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|
Name : |
Mr. C D Thakker |
|
Designation : |
Non-Executive Non-Independent Director |
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|
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Name : |
Mr. N K Bafna |
|
Designation : |
Independent Director |
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Date of Birth/Age : |
03.07.1939 |
|
Qualification : |
B.Com, FCA, Law Graduate |
|
Date of Appointment : |
18.5.2008 |
|
Other Directorship: |
· Patspin India Limited · Prime Urban Development India Limited · National
Collateral Management Services Limited |
|
|
|
|
Name : |
Mr. B L Singhal |
|
Designation : |
Independent Director |
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|
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|
Name : |
Mr. R Rajagopalan |
|
Designation : |
Independent Director |
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|
|
|
Name : |
Mr. Prem Malik |
|
Designation : |
Independent Director |
|
Date of Birth/Age : |
03.02.1942 |
|
Qualification : |
Post Graduate, |
|
Date of Appointment : |
17.12.2005 |
|
Other Directorship : |
v Gyscoal Alloys Limited v Spentex Industries Limited v Indo Count Industries Limited v Alder Trading Company Private Limited v Smillesville Care Private Limited v CLC Textiles Park Private Limited |
KEY EXECUTIVES
|
Name : |
Mr. E K Balakrishnan |
|
Designation : |
General Manager and Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on: 31.03.2013
|
Category
of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
5,022,089 |
43.14 |
|
|
2,215,113 |
19.03 |
|
|
7,237,202 |
62.17 |
|
|
|
|
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Total shareholding of Promoter and Promoter Group (A) |
7,237,202 |
62.17 |
|
(B) Public Shareholding |
|
|
|
|
|
|
|
|
1,686 |
0.01 |
|
|
842 |
0.01 |
|
|
87,377 |
0.75 |
|
|
2,000 |
0.02 |
|
|
91,905 |
0.79 |
|
|
|
|
|
|
684,818 |
5.88 |
|
|
|
|
|
|
2,932,110 |
25.19 |
|
|
625,437 |
5.37 |
|
|
69,006 |
0.59 |
|
|
12,202 |
0.10 |
|
|
56,804 |
0.49 |
|
|
4,311,371 |
37.04 |
|
Total Public shareholding (B) |
4,403,276 |
37.83 |
|
Total (A)+(B) |
11,640,478 |
100.00 |
|
© Shares held by Custodians and against which Depository Receipts have
been issued |
-- |
-- |
|
|
-- |
-- |
|
|
-- |
-- |
|
|
-- |
-- |
|
Total (A)+(B)+(C) |
11,640,478 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturer and Exporter of Cotton Yarn. |
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Products : |
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PRODUCTION STATUS AS ON (31.03.2011)
|
Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
|
Spindles |
In Nos. |
N.A. |
58,864 |
N.A. |
|
Yarn |
Kgs. |
N.A. |
N.A. |
3.812 |
GENERAL INFORMATION
|
No. of Employees : |
902 (Approximately) |
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Bankers : |
·
Central Bank of ·
State Bank of ·
Export-Import Bank of ·
State Bank of Travancore ·
Bank of ·
Axis Bank Limited |
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Facilities : |
(Rs. In Millions)
Notes : Term Loan are secured by : 1) Term loans borrowed from Banks and Financial Institutions and total outstanding of Rs. 497.557 millions (Previous year - Rs. 616.890 millions) are secured by a first charge by way of equitable mortgage on all immovable assets both present and future and ypothecation of all the movable assets of the Company (excluding assets purchased on hire purchase basis), subject to prior charges in favour of Banks for working captital, ranking pari pasu interse. 2) In the above mentioned Term Loans from certain Banks are further secured by personal guarantee given by Chairman & Managing Director of the Company to an extent of Rs. 131.819 millions (Previous year Rs. 205.420 millions). 3) Loan from Export Import Bank outstanding of Rs. 22.500 millions (Previous year Nil) is further secured by Corporate guarantee given by Patspin India Limited to an extent of Rs. 17.500 millions (Previous year Rs. Nil). 4) Finance Lease Obligations are relating to vehicles and are secured against respective vehicles hypothecated costing Rs. 1.705 million (Previous year Rs. 1.705 millions). i) Working Capital Loans from Banks are secured by hypothecation of current assets, and further secured/ to be secured by way of second charge on all immovable assets, both present and future and on all movable assets of the company (excluding assets purchased on hire purchase basis), ranking pari passu interse, and also guaranteed by Chairman and Managing Director of the Company. ii) Non-fund based limits sanctioned by the bankers are secured by extension of first charge on the current assets of the Company and further secured/to be secured by second charge on the immovable properties of the company and personal guarantee of Chairman and Managing Director of the Company. Total amount outstanding at the end of the year is Rs. 268.320 millions (Previous year Rs. 242.000 millions). |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
M Chartered Accountants |
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Address : |
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Legal Advisors : |
Menon and Pai, |
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Associates : |
GTN Enterprises Limited,
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Joint Ventures : |
Patspin India
Limited, |
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Enterprises/Entities having
Key Management Personnel: |
·
Beekaypee
Credit Private Limited, ·
Patodia
Exports and Investments Private Limited, ·
Umang
Finance Private Limited, |
CAPITAL STRUCTURE
As on : 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
12000000 |
Equity Shares |
Rs. 10/- each |
Rs. 120.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
11640478 |
Equity Shares |
Rs. 10/- each |
Rs. 116.405 Millions |
|
|
|
|
|
Reconciliation of Number of Shares :
|
Equity Shares |
No.
of Shares |
Amount
|
|
Balance as at the beginning of the year |
11640478 |
116.405 |
|
Add: Shares issued during the year |
0.000 |
0.000 |
|
Outstanding
at the end of the period |
11640478 |
116.405 |
Details of shares held by shareholders holding more than 5% of the
aggregate Shares in the company :
As at 31.03.2012
|
Particulars |
No.
of Shares |
%
of Holding |
|
Binod Kumar Patodia |
1195580 |
10.27 |
|
Umang Patodia |
835120 |
7.17 |
|
Ankur Patodia |
732331 |
6.29 |
|
Prabha Patodia |
682418 |
5.86 |
|
Binod Kumar Patodia HUF |
1158880 |
9.96 |
|
Beekaypee Credit Private Limited |
822311 |
7.06 |
|
Patodia Exports and Investments Private
Limited, |
659750 |
5.67 |
|
Umang Finance Private Limited, |
733052 |
6.30 |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
116.405 |
116.405 |
116.405 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
205.003 |
249.261 |
211.165 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
321.408 |
365.666 |
327.570 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
617.121 |
821.384 |
923.108 |
|
|
2] Unsecured Loans |
5.812 |
3.888 |
3.070 |
|
|
TOTAL BORROWING |
622.933 |
825.272 |
926.178 |
|
|
DEFERRED TAX LIABILITIES |
36.358 |
56.912 |
47.912 |
|
|
|
|
|
|
|
|
TOTAL |
980.699 |
1247.850 |
1301.660 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
664.470 |
694.300 |
770.477 |
|
|
Capital work-in-progress |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
198.492 |
198.483 |
198.483 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
407.721
|
384.138 |
332.697 |
|
|
Trade receivable |
138.984
|
111.745 |
90.838 |
|
|
Cash & Bank Balances |
49.477
|
106.802 |
59.533 |
|
|
Other Current Assets |
2.048
|
0.734 |
19.272 |
|
|
Loans & Advances |
71.842
|
134.281 |
120.708 |
|
Total
Current Assets |
670.072
|
737.700 |
623.048 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
323.271
|
177.934 |
272.366 |
|
|
Other Current Liabilities |
218.064
|
195.862 |
17.982 |
|
|
Provisions |
11.000
|
8.837 |
0.000 |
|
Total
Current Liabilities |
552.335
|
382.633 |
290.348 |
|
|
Net Current Assets |
117.737
|
355.067 |
332.700 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
980.699 |
1247.850 |
1301.660 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Revenue from operations |
1401.211 |
1494.322 |
1230.509 |
|
|
|
Other Income |
3.857 |
18.092 |
19.698 |
|
|
|
TOTAL (A) |
1405.068 |
1512.414 |
1250.207 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of material consumed |
912.679 |
|
|
|
|
|
Purchase of stock-in-trade |
28.154 |
52.729 |
|
|
|
|
Changes in inventories of finished goods in process and stock-in-trade |
(101.351) |
4.760 |
|
|
|
|
Employee benefit expenses |
205.443 |
177.062 |
|
|
|
|
Other expenses |
266.713 |
265.447 |
|
|
|
|
TOTAL (B) |
1311.638 |
1319.936 |
1138.515 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
93.430 |
192.478 |
111.692 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
95.111 |
80.516 |
75.978 |
|
|
|
|
|
|
|
|
|
|
PROFIT
/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
(1.681) |
111.962 |
35.714 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
63.177 |
64.866 |
67.827 |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
BEFORE TAX (E-F) (G) |
(64.858) |
47.096 |
(32.113) |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
(20.600) |
9.000 |
(10.300) |
|
|
|
|
|
|
|
|
|
|
PROFIT/ (LOSS)
AFTER TAX (G-H) (I) |
(44.258) |
38.096 |
(21.813) |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
38.096 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
0.000 |
0.000 |
21.813 |
|
|
BALANCE CARRIED
TO THE B/S |
(6.162) |
38.096 |
0.000 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Agent Commission |
19.504 |
23.697 |
12.339 |
|
|
|
Foreign Travel |
1.875 |
1.181 |
0.135 |
|
|
|
Other Earnings |
3.813 |
1.446 |
2.411 |
|
|
TOTAL EARNINGS |
25.192 |
26.324 |
14.885 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
498.741 |
352.813 |
306.570 |
|
|
|
Stores & Spares |
4.440 |
3.118 |
2.541 |
|
|
|
Capital Goods |
23.043 |
0.000 |
0.845 |
|
|
TOTAL IMPORTS |
526.224 |
355.931 |
309.956 |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) Per Share (Rs.) |
(3.80) |
3.27 |
(1.87) |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 UnAudited |
30.09.2012 UnAudited |
31.12.2012 UnAudited |
31.03.2013 UnAudited |
|
Net Sales |
334.100 |
512.100 |
577.700 |
670.000 |
|
Total Expenditure |
332.300 |
499.200 |
536.000 |
609.700 |
|
PBIDT (Excl OI) |
1.800 |
12.900 |
41.700 |
60.300 |
|
Other Income |
0.700 |
0.600 |
0.700 |
1.500 |
|
Operating Profit |
2.500 |
13.500 |
42.400 |
61.800 |
|
Interest |
30.600 |
11.600 |
33.200 |
31.800 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
PBDT |
(28.100) |
1.900 |
9.200 |
30.000 |
|
Depreciation |
15.700 |
16.000 |
15.700 |
15.400 |
|
Profit Before Tax |
(43.800) |
(14.100) |
(6.500) |
14.600 |
|
Tax |
0.000 |
0.000 |
0.000 |
(14.200) |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
(43.800) |
(14.100) |
(6.500) |
28.800 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
0.000 |
|
Net Profit |
(43.800) |
(14.100) |
(6.500) |
28.800 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
(3.14) |
2.52 |
(1.74) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
(4.62) |
3.15 |
(2.61) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(4.86) |
3.29 |
(2.30) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.20) |
0.12 |
(0.10) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
1.93 |
2.26 |
2.82 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.21 |
1.92 |
2.14 |
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 |
LITIGATION DETAILS
:
|
Status of CUSTOM APPEAL 2 OF 2010 |
|
THE COMMISSIONER OF CUSTOMS Vs. M/S. GTN TEXTILES |
|
Pet’s Adv. :
SRI. THOMAS MATHEW NELLIMO |
|
Res’s Adv. :
SRI. SHAJI THOMAS PORKKATT |
|
Last Listed on :
Friday, November 12, 2010 |
|
Category :
NO CATEGORY MENTIONED |
|
Case updated on : Wednesday,
November 17, 2010 |
UNSECURED LOAN
(Rs.
In Millions)
|
Particulars |
As on 31.03.2012 |
As on 31.03.2011 |
|
Fixed deposits |
|
|
|
From public |
3.381 |
0.000 |
|
Current maturities of fixed deposits |
2.431 |
3.888 |
|
Total |
5.812 |
3.888 |
PERFORMANCE REVIEW :
The textile industry has been facing a major
challenge during the past few years in coping up with uncertainties arising from
unexpected events led by external factors far beyond its control. The spinning
sector which recovered handsomely in 2010-11 after two years of recession and
adverse working, was once again plunged into yet another crisis due to lopsided
government policies in respect of exports of cotton and cotton yarn, economic
crisis in eurozone and consequent demand recession. The Government suddenly
suspended cotton yarn exports from January to March 2011 which resulted in a
huge piling up of yarn inventory of over 500.000 million kgs with the Spinning
Mills. Eventually when this ill-timed ban was lifted in April 2011, there was a
sudden rush to liquidate the yarn stock at any price made from high-priced
cotton inventory. The above ban also resulted in international and domestic
cotton prices crashing from April 2011 and within a period of 3 months i.e by
June 2011, the domestic cotton prices declined to 32,000 per candy for the
Gujarat Shanker-6 variety from a peak of 65,000 per candy. Mills were saddled
with holding high cost raw material inventory and the yarn prices crashed due
to reasons given above, resulting in majority of the Spinning Units incurring
cash losses in FY 2011-12. Extreme volatility in the foreign exchange rates
also adversely affected the profitability.
Under the circumstances, while the company
could maintain its total revenue at Rs. 1506.500 Millions for the year as
compared to Rs. 1507.700 Millions for the previous year, there was a cash loss
of Rs. 1.170 Millions as against cash profit of Rs.112.000 Millions in the last
year. As explained earlier, unrealistically higher cotton procurement cost in
relation to subdued cotton yarn prices in the international as well as local
markets wiped out most of the operating margin. Power cost has also been higher
due to thermal surcharge levied by KSEB, besides increase in manpower cost
subsequent to settlement of long-term wage agreement. After charging
depreciation, at net level the company incurred a loss of Rs. 64.900 Millions
as compared to a profit before tax of Rs. 47.100 Millions in the previous year.
To get over the crisis which are the direct
result of lopsided government policies, the industry is persuading the
concerned ministry to offer some fiscal concessions including moratorium in
repayment of term loan installments falling due in near future. Hence, for the
current year, they have to wait and watch for the situation to return to
normalcy.
MANAGEMENT DISCUSSION AND ANALYSIS :
Industry Structure and Developments :
The importance of textile industry in the
national economy is significant because of its contribution to economic growth,
exports and employment. Exports of Textiles and clothing during 2011-12 are
estimated at around 34 billion USD, a record high, which works out to a share
of 11% in the total exports from the country of 304 billion USD. This sector
currently employs about 35.000 millions workers directly and 47.000 millions
workers in allied sectors like Agriculture.
The Indian Textile Industry which recovered
handsomely in 2010-11 after two years of recession and adverse working, was
once again plunged into yet another crisis due to lopsided government policies
in respect of exports of cotton and cotton yarn, economic crisis in Eurozone
and consequent demand recession. Broadly, the problems faced by the industry
were as under:-
1) Global cotton shortage prevailed during
2010-11, and the same resulted in an unprecedented increase in global cotton
prices from US $ 0.84 per lb in October 2010 to US $ 2.30 per lb in March 2011
on the New York Futures. The domestic cotton prices also increased from
Rs.35000 per candy (356 kg) to Rs.62500 per candy for the Gujarat Shanker-6
variety. The situation was further aggravated due to premature announcement by
Government, of cotton export of Rs. 5.500 Millions bales in 45 days.
2) The Government suddenly suspended cotton yarn
exports from January to March 2011 which resulted in a huge piling up of yarn
inventory of over 500 million kgs with the Spinning Mills. Eventually when this
ill-timed ban was lifted in April 2011, there was a sudden rush to liquidate
the yarn stock at any price made from high-priced cotton inventory.
3) The above ban also resulted in international
and domestic cotton prices crashing from April 2011 and within a period of 3
months i.e by June 2011, the domestic cotton prices declined to Rs. 0.032
Millions per candy for the Gujarat
Shanker-6 variety.
4) Holding of High Cost raw material without
corresponding increase in yarn prices led to a steep fall in profitability in
the financial year 2011-12 and majority of the Spinning Units reported cash
losses.
5) Due to unfettered and huge exports of raw
cotton from the beginning of the cotton season from October 2011, raw material of
uniform quality at right prices became scarce.
6) In its fight against inflation, the RBI had
increased the interest rates 13 times between March, 2010 and October, 2011.
Moreover, the GDP growth declined to 6.9 per cent in 2011-12. Inspite of half
per cent reduction in interest rate in April, 2012, the present interest rates
are still very high at 13.5%, which substantially added to the manufacturing
cost.
7) Extreme fluctuation in Forex market also led
to financial uncertainty. Rupee Exchange rate which was 44.39 to USD in April
2011 depreciated to 52.52 in December 2011, again appreciated to 49.20 in
February 2012 and hit all-time low of 55.03 on 21st May, 2012.
8) Confederation of Indian Textile Industry
(CITI) has appealed to the Ministry of Textiles and Finance to restructure the
massive loans availed by the industry specially under TUF Scheme and declare a
moratorium of two years as well as to provide working capital term loans due to
substantial erosion in the value of cotton and yarn inventory. The Ministry of
Textiles assigned a study to the Bank of Baroda Capitals to prepare a Flash
Report on the need for Debt Restructuring for the textile industry. This report
has already been considered by the Ministry of Textiles and forwarded to the
Ministry of Finance and RBI and it is hoped that there will be a positive
outcome in the matter.
Spinning and Weaving Capacities
Figures of world’s installed spinning and
weaving capacities are available from ITMF as of October, 2011. As at the end
of 2010, world’s total spindleage was 244 million.
Deducting 10 million spindles of closed mills,
the number of operative spindles works out to around 38 million. The number of
installed open-end rotors has marginally increased to 771 thousand in March,
2012 as compared to 749 thousand in March, 2011. It is pertinent to point out
that expansion of spinning capacity has been significant both in the organized
and small spinning sectors. To meet the rising domestic demand for cotton yarn
from the downstream value chain and also to meet higher targets for exports of
cotton yarn, the Twelfth Five Year Plan has envisaged investment of Rs.
41750.000 Millions in the spinning sector.
A major chunk of spinning capacity expansion
took place under the TUF Scheme, which was operative for a span of eight years
from 1st April, 1999 to 31st March, 2007. Further, under the modified TUF
Scheme operative from 1st April, 2007, investments during three years 2007-08
to 2009-10, increased considerably towards modernization and expansion of
spinning capacity.
The Restructured TUF Scheme has since been
announced by the Ministry of Textiles on 28th April, 2011. The Scheme was
operative from 28th April, 2011 and valid upto 31st March, 2012, the terminal
year of the Eleventh Five Year Plan. The major change in the Restructured
Scheme is a reduction in the repayment period to seven years with two years
moratorium as compared to earlier repayment period of ten years with two years
moratorium.
The number of looms in the mill sector which
remained stagnant at 71,000 for the three-year period, 2007-08 to 2009-10,
declined to Rs. 0.066 Millions during 2010-11 and 2011-12. However, the weaving
capacity in the power loom sector has increased from Rs. 2.246 Millions looms
in 2009-10 to almost 2.300 Millions looms as of December, 2011.
Production of Yarn
The total production of spun yarn which was 4193
million kgs in 2009-10 expanded to 4713 million kgs in 2010-11, showing a
creditable growth of over 12 per cent. However, total production of spun yarn
in 2011-12 is expected to be lower at 4359.000 Million kgs exhibiting a decline
of 8 per cent. Similarly, production of cotton yarn also escalated from Rs.
3079.000 Million kgs in 2009-10 to 3490 million kgs in 2010-11. For the year
2011-12, production of cotton yarn was projected at Rs. 3400.000 Million kgs.
by the Cotton Yarn Advisory Board. The final figure for 2011-12 released by the
Office of the Textile Commissioner is Rs. 3121.000 Million kgs, which shows a
decline of 11 per cent.
Exports of Cotton Yarn
In pursuance of National Fibre Policy,
Government set up in September 2010, Cotton Yarn Advisory Board (CYAB) to
advise the Government on matters pertaining to production, consumption and
exports of cotton yarn.
Exports of cotton yarn in 2011-12 are
estimated at 828 million kgs valued at 2.6 billion USD as against exports of
720 million kgs valued at 2.7 billion USD in 2010-11. This indicates that unit
value at $ 3.14 per kg in 2011-12 declined by 19 per cent as compared to $ 3.75
per kg in 2010-11. This is mainly due to depressed prices in international
markets, intensification of competition and a change in the pattern of trade.
In the wake of clear exportable surplus
arrived at by the Cotton Yarn Advisory Board, DGFT issued a notification dated
31st March, 2011, allowing free exports of cotton yarn from April, 2011
onwards, subject to registration of contracts. After protracted deliberations
at the Cotton Yarn Advisory Board meetings, the Cotton Yarn Balance Sheets for
2011-12 and 2012-13 were drawn up in terms of which exportable surplus were
arrived at 875 million kgs. for 2011-12 and Rs. 920.000 millions kgs for
2012-13. Upto 2009-10 exports of cotton yarn were operating smoothly and were
in the range of 20 to 22 per cent of the production of cotton yarn. The
slipshod manner in which Government handled exports of cotton yarn earlier has
done immense harm to the textile industry.
Cotton Scenario
For the cotton season 2009-10, Cotton Advisory
Board had estimated area under cotton at Rs. 10.310 Millions hectares and crop
at Rs. 30.500 Millions bales. The per hectare yield for the season dropped to
503 kgs as against of 524 kgs achieved in 2008-09 and 554 kgs in 2007-08. For
the cotton season the 2011-12, Cotton Advisory Board has estimated the area at
Rs. 12.191 Millions hectares and a crop of Rs. 34.700 Millions bales. Per
hectare yield in the cotton season 2011-12 works out lower at 484 kgs.
Although the cotton crop during the 2011-12
season was quite high, the Indian textile industry did not derive the advantage
of home-grown cotton on account of unprecedently higher quantum of exports of
raw cotton. While the domestic industry was denied better quality cotton at
competitive prices, the competitors like
For the cotton year 2011-12, CAB had earlier
arrived at the figure of Rs. 5.500 Millions bales of cotton as exportable
surplus. However, DGFT subsequently allowed exports of raw cotton upto Rs.
9.500 Millions bales, subject to registration of contracts. The total quantity
registered for exports was Rs. 12.000 Millions bales. In March, 2012 DGFT
banned exports of cotton once it reached the figure of 95 lakh bales. However,
due to persistent pressure from the trading community, the Group of Ministers
decided that total quantity of registered contracts at Rs. 12.000 Millions
bales be allowed for exports. As of now, exports of Rs. 11.500 Millions bales
have taken place, as per CAB.
According to Textile Exchange’s (Earlier
Organic Exchange) 2011 Report, global production of organic cotton during
2010-11 declined by 35 per cent to 151,079 metric tonnes from 241,697 metric
tonnes in 2009-10. The Report anticipates an additional decline of 5 per cent
in 2011-12. The major decline, according to the Report, has occurred in
The factor which is impending the working of
textile industry is frequent and several changes brought about by Government in
the policy for exports of raw cotton, ignoring the industry’s requirement of
minimum of two-and-half months stocks for domestic consumption. While on this,
it is pertinent to mention that
With Government’s prediction of normal monsoon
for the coming season and other favourable factors like higher cotton exports
in the current season, farmers will find it attractive to increase area under
cotton cultivation. Other encouraging factors are: growing awareness among
farmers for adoption of better technology and augmented supply of a good
quality seed. It has been observed that the performance of textile industry
hinges largely on adequate availability of quality cotton. The industry has a
potential to absorb larger cotton crop with the massive expansion of capacity.
However, Government should exercise abundant caution in deciding the policy for
exports of raw cotton, keeping overall national interest in mind.
According to ICAC, global production of cotton
in the season 2010-11 (August –July) was Rs. 25.000 million tons and
consumption Rs. 24.58 millions tons, with ending stocks getting reduced from
12.75 to 9.2 million tons. This led to massive increase in cotton prices. For
the cotton season 2011-12, global production is estimated higher by 8 per cent
at 27.10 million tons and consumption at 23.22 million tons, resulting in
higher ending stocks of 13.10 million tons.
For the cotton season 2012-13, the ICAC has
projected that world cotton production will be lower at 25.25 million tons.
The consumption will be 24.05 million tons.
Since the production will be higher than consumption, ending stocks will rise
to 14.29 millions tons.
ICAC’s price forecast (Cotlook ‘A’ Index) for
the season 2010-11 was 164 cents per pound. For 2011-12 the earlier forecast of
85 cents per pound went totally haywire and the price spurted to a steep level
of $ 1.65 per pound. For the season 2011-12, the current forecast is that it
will be significantly lower than 105 cents per pound, but it will be higher
than the ten-year average of 60 cents per pound. It is obvious that cotton
supply situation and prices will depend on future policies that may be followed
by
OUTLOOK :
Global exports of textiles and clothing in
2010 were 602 billion USD, as per WTO figures.
On the domestic front also
Above all,
Statement of Unaudited
financial results for the Quarter and
Nine
Months Ended on 31st December, 2012
Rs in Millions
|
Sr. No |
Particulars |
Standalone |
||
|
Unaudited |
Unaudited |
Unaudited |
||
|
Quarter Ended |
Year
to date |
|||
|
|
|
31.12.2012 |
30.09.2012 |
31.12.2012 |
|
1 |
Income from operations |
|
|
|
|
|
(a) Net
Sales/Income from Operations (Net of excise duty) |
565.500 |
502.200 |
1398.500 |
|
|
(b) Other Operating Income |
12.200 |
9.900 |
25.400 |
|
|
Total income from operations (net) (a) + (b) |
577.700 |
512.100 |
1423.900 |
|
2 |
Expenses (a) Cost of materials consumed |
277.000 |
225.500 |
676.100 |
|
|
(b) Purchases of stock-in-trade |
140.100 |
65.200 |
208.300 |
|
|
(c)
Changes in inventories of finished goods, work-in-progress and stock-in-trade |
(14.700) |
47.500 |
52.000 |
|
|
(d) Employee benefits expense |
55.100 |
55.900 |
162.100 |
|
|
(e) Depreciation and amortisation expense |
15.700 |
16.000 |
47.400 |
|
|
(f) Power and Fuel |
42.100 |
43.1000 |
117.800 |
|
|
(g) Other expenditure |
36.400 |
62.000 |
151.200 |
|
|
Total expenses |
551.700 |
515.200 |
1414.900 |
|
3 |
Profit before interest,
Depreciation, Other Income, and Tax (PBIDTA) |
41.700 |
12.900 |
56.400 |
|
4. |
Profit / (Loss) from
operations before other income, finance costs and exceptional items(1-2) |
26.000 |
(3.100) |
9.000 |
|
4 |
Other Income |
0.700 |
0.600 |
2.000 |
|
5 |
Profit
/ (Loss) from ordinary activities before finance costs and exceptional
items(3 + 4) |
26.700 |
(2.500) |
11.000 |
|
6 |
Finance costs |
33.200 |
11.600 |
75.400 |
|
7 |
Profit
/ (Loss) from ordinary activities after finance costs but before exceptional
items(S - 6) |
9.200 |
1.900 |
(17.000) |
|
8. |
Profit
/ Loss from ordinary activities after finance cost |
(6.500) |
(14.100) |
(64.400) |
|
9 |
Exceptional items |
-- |
-- |
-- |
|
10 |
Profit
/ (Loss) from ordinary activities before tax (7 + 8) |
(6.500) |
(14.100) |
(64.400) |
|
11 |
Tax Expense |
-- |
-- |
-- |
|
12 |
Net
Profit / (Loss) from ordinary activities after tax (9-10) |
(6.500) |
(14.100) |
(64.400) |
|
13 |
Extraordinary Items (net of tax expense) |
|
|
|
|
14 |
Net Profit / (Loss) for the period (11 -12) |
116.400 |
116.400 |
116.400 |
|
15 |
Reserve excluding
Revaluation Reserves as per balance sheet of previous accounting year |
_ |
_ |
|
|
16 |
Earnings per share (before extraordinary items) |
|
|
|
|
|
(of Rs. 10/- each) (not annualised): |
|
|
|
|
* |
(a) Basic (b) Diluted |
(0.56) |
(1.21) |
(5.53) |
|
Sr. No |
Particulars |
Quarter Ended |
Year
to date ended |
|
|
|
|
31.12.2012 |
30.09.2012 |
31.12.2012 |
|
A 1 |
PARTICULARS OF
SHAREHOLDING |
|
|
|
|
|
Public
shareholding |
|
|
|
|
|
-
Number of shares |
4403276 |
4403276 |
4403276 |
|
|
- Percentage of
shareholding |
37.83 |
37.83 |
37.83 |
|
2 |
Promoters and Promoter
Group Shareholding |
|
|
|
|
|
a) Pledged / Encumbered |
|
|
|
|
|
- Number of shares |
NIL |
NIL |
NIL |
|
|
- Percentage of shares (as
a % of the total shareholding of promoter and promoter group) |
NA |
NA |
NA |
|
|
-
Percentage of shares (as a % of the total share capital of the company) |
|
|
|
|
|
b) Non-encumbered |
|
|
|
|
|
- Number of shares |
7237202 |
7237202 |
7237202 |
|
|
-
Percentage of shares (as a % of the total shareholding of promoter and
promoter group) |
100 |
100 |
100 |
|
|
-
Percentage of shares (as a % of the total share capital of the company) |
62.17 |
62.17 |
62.17 |
|
Particulars |
Quarter ended 31.12.2012 |
|
B INVESTOR COMPLAINTS (Nos) |
|
|
Pending
at the beginning of the quarter |
NIL |
|
Received
during the quarter |
1 |
|
Disposed
of during the quarter |
1 |
|
Remaining
unresolved at the end of the quarter |
NIL |
Note :
1. The above audited results were reviewed by the Audit Committee and
approved by the Board of Directors at their meeting held on 29.01.2013. The
statutory Auditors have carried out a Limited review of these results
pursuant..
2. The company is engaged principally in Yarn
business and as such has only Single reportable Business Segment i.e. Yarn
3. The previous meeting of the board of Directors held on 22.10.2012 has
unanimously approved pledging of 7286465 equity shares being 51% of the shares
held by the company in Patspin India Limited to their lenders, Pursuant to the
Corporate debt The said pledge of shares will be done once CDR related
formalities are completed by PIL.
4. Deferred Tax asset, if any, for the current
financial year will be recognized at the end of the year.
5. Previous period / Year’s figures have been
regrouped to be in conformity with the Revised Schedule VI to the Companies
Act, 1956.
FIXED ASSETS
·
Land-Freehold
·
Buildings
·
Plant and Machinery
·
Electrical Installations
·
Furniture and Office Equipments
·
Vehicles
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No 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. 54.57 |
|
|
1 |
Rs. 86.15 |
|
Euro |
1 |
Rs. 73.64 |
INFORMATION DETAILS
|
Report Prepared
by : |
DPH / |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
3 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
2 |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
4 |
|
--RESERVES |
1~10 |
4 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
YES |
|
--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 |
|
DEFAULTER |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
35 |
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.