MIRA INFORM REPORT

 

 

 

 

Report Date :

23.05.2014

 

IDENTIFICATION DETAILS

 

Name :

ARVIND LIMITED (w.e.f. 14.07.2008)

 

 

Formerly Known As :

ARVIND MILLS LIMITED

 

 

Registered Office :

Naroda Road, Railwaypura Post, Ahmadabad – 380025, Gujarat

 

 

Country :

India

 

 

Financials (as on) :

31.03.2013

 

 

Date of Incorporation :

01.06.1931

 

 

Com. Reg. No.:

04-000093

 

 

Capital Investment / Paid-up Capital :

Rs.2580.400 Millions

 

 

CIN No.:

[Company Identification No.]

L17119GJ1931PLC000093

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

AHMT00462A

 

 

Legal Form :

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

 

 

Line of Business :

Manufacturing of cotton shirting, denim, knits and bottom weights, fabrics, jeans, and garments.

 

 

No. of Employees :

Not Available

 

 

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 31, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

INDIAN ECONOMIC OVERVIEW

 

US investment bank Goldman Sachs has upgraded its outlook on Indian markets as it expects positive impact of the election cycle.

 

India’s economy may grow 4.7 % in the current financial year, lower than the official estimate of 4.9 %, Fitch Rating said. The global rating agency expects the economy to pick up in the next two financial years.

 

Global ratings agency Standard & Poor said increasing focus by India Inc on lowering debt is likely to improve their credit profiles.

 

Singapore (1.1 million Indian tourists in 2012), Thailand (one million), the United Arab Emirates ().98 million) and Malaysia ().82 million) emerged as the preferred holidays hotspots for Indians. The total figure is expected to increase to 1.93 million by 2017, according to the latest Eurmonitor international report.

 

There is a $29.34 bn outward foreign direct investment by domestic companies between April and January of 2013/14 which has seen some signs of recovery according to a Care Ratings report.

 

There are 264 number of new companies being set up every day on average during 2014. Most of them are registered in Mumbai. India had 1.38 million registered companies at the end of January, 2014.

 

Twitter like messaging service Weibo Corporation has filed to raise $ 500 million via a US initial public offering. Alibaba, which owns a stake in Weibo is expected to raise about $ 15 billion New York this year in the highest profile Internet IPO since Facebook’s in 2012.

 

Bharti Airtel has raised Rs.2,453.2 crore (350 million Swiss Francs) by selling six-year bonds at a coupon rate of three per cent and maturing in 2020. This is the largest ever bond offering by an Indian company in Swiss Francs. Bharat Petroleum Corporation raised 175 million Swiss Francs by selling five year bonds at 2.98 % coupon rate in February.

 

Indian Oil Corporation plans to invest Rs.7650 crore in setting up a petrochemical complex at its almost complete Paradip refinery in Odhisha in three to four years. The company board is set to consider the setting up of a 700000 tonne per annum polypropylene plant at an estimated cost at Rs.3150 crore.

 

Global chief information officers at gathering in Bangalore in April to meet Indian startups at an event called Tech50 Watchout for Little Eye Labs-Facebook type deals in the making.

 

 

EXTERNAL AGENCY RATING

 

Rating Agency Name

CARE

Rating

Long term bank facilities: A

Rating Explanation

Adequate credit quality and average credit risk.

Date

21 October 2013

 

 

Rating Agency Name

CARE

Rating

Short term bank facilities: A1

Rating Explanation

Very strong degree of safety and lowest credit risk.

Date

21 October 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/ Corporate Office/ Secretarial Department:

Naroda Road, Railwaypura Post, Ahmadabad – 380025, Gujarat, India

Tel. No.:

91-79-22121408 / 22203030 / 22200206 / 22208000 / 30138000/ 30138108-9

Fax No.:

91-79-22124314 / 22120267 / 22371396 / 22372342 / 22379184 / 22201608 /  22201270 / 30138680/ 30138668

E-Mail :

india@arvindmills.com

investor@arvind.com

rv.bhimani@arvind.in

feedback@arvind.com

Website :

http://www.arvind.com

 

 

Factory 1 :

Lifestyle Fabrics–Denim, Naroda Road, Ahmedabad - 380025, Gujarat, India

Tel. No.:

91-79-30138000 / 30138181

Fax No.:

91-79-30138671

E-Mail :

subir.mukherjee@arvind.in

 

 

Factory 2 :

Lifestyle Fabrics–Shirting, Khakis and Knitwear, Santej, PO Khatrej, Taluka Kalol, Dist. Gandhinagar-382721, Gujarat, India

Tel. No.:

91-2764-395560

Fax No.:

91-2764-395040

E-Mail :

pranav.dave@arvind.in

 

 

Factory 3 :

Lifestyle Apparel–Knits, Santej, PO Khatrej, Taluka Kalol, District Gandhinagar - 382721 , Gujarat, India

Tel. No.:

91-2764-395410

E-Mail :

nitin.seth@arvind.in

 

 

Factory 4 :

Lifestyle Apparel–Shirts, No. 23/1, Sonnenahalli Villege, Sitaram Palya Cross, ITPL Road, Brook field, Mahadevpura Post, Bangalore - 560048, India

Tel. No.:

91-80-33717000

E-Mail :

ashish.kumar@arvindexports.com

 

 

Factory 5 :

Lifestyle Apparel–Jeans, 26/2, 27/2 Kenchenahaili, Mysore Road, Near Bangalore University, Bangalore-560059, India

Tel. No.:

91-80-33719000

E-Mail :

ashish.kumar@arvindexports.com

 

 

Factory 6 :

Arvind Intex, Rajpur Road, Gomtipur, Ahmedabad - 380021, Gujarat, India

 

 

Factory 7 :

Ankur Textiles, Outside Raipur Gate, Ahmedabad - 380022, Gujarat, India

Tel. No.:

91-79-30137200 / 30137231

Fax No.:

91-79-30137231

E-Mail :

brijesh.bhati@arvind.in

 

 

Factory 8 :

Arvind Polycot, Khatrej, Taluka Kalol, Dist. Gandhinagar- 382721, Gujarat, India

 

 

Factory 9 :

Arvind Cotspin, D-64, MIDC, Gokul Shirgaon, Tal. Karveer, Kolhapur - 416234, Maharashtra, India

 

 

Factory 10 :

Lifestyle Fabrics – Voiles, Ankur Textiles, Outside Raipur Gate, Ahmedabad - 380 022, Gujarat, India

Tel. No.:

91-79-30137200/30137231

Fax No.:

91-79-30137350

E-Mail :

Brijesh.bhati@arvind.in

 

 

Factory 11 :

Lifestyle Apparel–Shirts, No. 23/1, Sonnenahalli Village, Sitarampalya Cross, ITPL Road, Brookfield, Mahadevpura Post, Bangalore - 560 048, Karnataka, India

Tel. No.:

91-80-33717000

E-Mail :

Ashish.kumar@arvindexports.com

 

 

Branch Office 1 :

Mumbai

Neptune House, 2nd Floor, Opposite Bandra Talkies, SV Road, Mumbai – 400050, Maharashtra, India

Tel. No.:

91-22-26513367/68/69

Fax No.:

91-22-26513472

 

 

Branch Office 2 :

Delhi

8 Community Centre, Saket, New Delhi– 110017, India

TeleFax :

91-11-51664620/24

 

 

Branch Office 3 :

Bangalore

Grace Mansion, 25 Infantry Road, Bangalore – 560001, Karnataka, India

Tel. No.:

91-80-22865117/7697

Fax No.:

91-80-22860564

 

 

Branch Office 4 :

Kolkata

100, Park Street, Laxmi Nivas, 2nd Floor, Kolkata , West Bengal, India

TeleFax :

91-33-22835792

 

 

Branch Office 5 :

International Offices

USA

Arvind Worldwide (USA) Inc., 130, West 42nd Street, Suite No. 603, 6th Floor, NY 10036, New York, USA

Tel. No.:

001-212-768-4815

Fax No.:

001-212-768-7378

 

 

Branch Office 6 :

Sri Lanka

Sri Lanka Liason Office, 207/24, 2/2 Dharmapala Mawatha, Colombo, Sri Lanka

TeleFax :

0094-11-2678564

 

 

Branch Office 7 :

Bangladesh

C/o Sidko Limited

7th Floor, Paragon House , Mohakali Commercial Area, Dhaka – 1212, Bangladesh

Tel. No.:

8802-9881794

Fax No.:

8802-9883400

 

 

Branch Office 8 :

Sharda Trust

Asoka Spintex Premises, Naroda Road, Ahmedabad – 380025, Gujarat, India

Tel. No.:

91-79-22200817/3266

Fax No.:

 91-79-22200457

 

 

Garment Export Division  :

10th Floor, Du Parc Trinity, 17 MG Road, Bangalore -560001, Karnataka, India

 

 

Overseas Office 1 :

Arvind Worldwide Inc.

130, West, 42nd Street, Suite 603, 6th Floor, New York, New York -10036, USA

Tel No.:

+(212)768-4815

E mail:

raju@arvindusa.com

 

 

Overseas Office 2 :

Arvind Limited

Unit : 1705, 17th Floor, Rendy Centre, 682-684, Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong

Tel. No.:

852 66271025

Fax No.:

963 27820090

E-Mail :

arvindmills@netvigator.com

 

 

Overseas Office 3:

Arvind Limited

Plot No.221 Bir Uttam Mir Shawkat Road, (Gulshan – Tejgaon Link Road) Tejgaon I/A, Dhaka – 1208, Bangladesh

Tel No.:

880-2-9887123 / 124

E-Mail :

p.anilkumar@arvind.com

 

 

 

DIRECTORS

 

AS ON 31.03.2013

 

Name:

Mr. Sanjay S. Lalbhai

Designation:

Chairman and Managing Director

Qualification:

Science Graduate, Master’s Degree in Business Management

 

 

Name:
Mr. Jayesh K. Shah

Designation:

Director and Chief Financial Officer

Qualification:

Commerce Graduate Chartered Accountant

 

 

 

Name :

Mr.Punit S. Lalbhai

 

Designation :

Executive Director

 

 

 

 

Name :

Mr.Kulin S. Lalbhai

 

Designation :

Executive Director

 

 

 

 

Name :

Mr. Sudhir Mehta

 

Designation :

Director

 

 

 

 

Name :

Dr. Bakul Dholakia

 

Designation :

Director

 

 

 

 

Name :

Mr. Munesh Khanna

 

Designation :

Director

Qualification :

Chartered Accountant

 

 

 

 

Name :

Ms. Renuka Ramnath

 

Designation :

Director

 

 

 

 

Name :

Mr. Prabhakar Dalal

 

Designation :

Nominated by Export-Import Bank of India

 

 

KEY EXECUTIVES

 

Name :

Mr. R.V. Bhimani

Designation :

Company Secretary

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

AS ON 31.12.2013

 

Category of Shareholder

No. of Shares

% of No. of Shares

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

2345458

0.91

Bodies Corporate

110763265

43.00

Sub Total

113108723

43.91

(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

113108723

43.91

(B) Public Shareholding

 

 

(1) Institutions

 

 

Mutual Funds / UTI

30129426

11.70

Financial Institutions / Banks

162117

0.06

Central Government / State Government(s)

500

0.00

Insurance Companies

16733171

6.50

Foreign Institutional Investors

49426435

19.19

Any Others (Specify)

1113

0.00

Foreign Bank/IFCW

1113

0.00

Sub Total

96452762

37.44

(2) Non-Institutions

 

 

Bodies Corporate

7116665

2.76

Individuals

 

 

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

30880055

11.99

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

8301436

3.22

Any Others (Specify)

1747656

0.68

NRIs/OCBs

1407635

0.55

Trusts

1619

0.00

Clearing Members

338402

0.13

Sub Total

48045812

18.65

Total Public shareholding (B)

144498574

56.09

Total (A)+(B)

257607297

100.00

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

0

0.00

(1) Promoter and Promoter Group

0

0.00

(2) Public

435772

0.00

Sub Total

435772

0.00

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

258043069

0.00

 

 

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing of cotton shirting, denim, knits and bottom weights, fabrics, jeans, and garments.

 

 

Products :

Product Description

Item code No.

Denim

52094200

Woven Fabrics of Cotton weighting not more than 200g/m2

52080000

Mens/ Boys Trousers/ Pants and Shorts

62034200

Mens/ Boys Shirts

62052000

 

 

PRODUCTION STATUS (AS ON 31.03.2011)

 

Particulars

 

Installed Capacity

Spindles

72872

Rotors

5472

Knitting Machines

116

Looms

1162

EPBAX / RAX System Lines

200000

Garments (Pcs.)

13120000

 

Note:

  1. The company is exempt from the licensing provisions of the Industrial (Development and Regulation) Act, 1951
  2. Installed Capacity is as certified by the management and relied upon by the auditors, being a technical matter.

 

Particulars

Unit

Actual Production

(Quantity in millions)

Cloth *

Meters

138.200

Cloth **

Kgs.

3.200

Yarn ***

Kgs.

0.100

EPBAX

Lines

0.200

Garments ****

Nos.

12.900

Yarn @

Kgs.

0.800

Grey @

Meters

0.600

Grey @

Kgs.

(443310.000)

 

*Net of internal consumption of 9.500 Millions (3.900 Millions) Meters

**Net of internal consumption of 1.00 Millions (2.500 Millions) Kgs

***Net of internal consumption of 6.900 Millions (6.800 Millions) Kgs

****Includes Garments produced outside the company by job workers, Net of Internal Consumption of (7478) Pcs.

 @ Semi Processed Goods meant for sale

 

Note:

Quantity of cloth shown in opening stock, production and closing stock is packed cloth only and does not include loose finished cloth lying in folding/ stamping department.

 

 

GENERAL INFORMATION

 

No. of Employees :

Not Available

 

 

Bankers :

·         State Bank of India

·         Bank of Baroda

·         UCO Bank

·         State Bank of Patiala

·         HDFC Bank Limited

·         Standard Chartered Bank

·         ICICI Bank Limited

·         Export-Import Bank of India

·         Axis Bank Limited

·         State Bank of Hyderabad

·         IDBI Bank Limited

·         Canara Bank

 

 

Facilities :

Secured Loan

31.03.2013

(Rs. in Millions)

31.03.2012

(Rs. in Millions)

Long-term Borrowings

 

 

Term Loans :

 

 

From Banks

7850.200

6034.600

From Financial Institutions and Others

1595.000

1013.100

Short-term borrowings

 

 

Working Capital Loans repayable on demand from Bank

9635.500

8559.600

 

 

 

Total

9635.500

8559.600

 

Borrowings

 

 

31.03.2013

(Rs. in Millions)

31.03.2012

(Rs. in Millions)

At Amortized Cost

11035.800

8743.200

At Original Cost

11035.800

8743.200

 

Nature of Security:

 

Term Loans of Rs.10978.800 Millions

 

i  Loans amounting to Rs.10612.700 Millions are secured by (a) first charge on all the Immovable Properties, Movable Properties, Intangible Properties and General Assets of the Company presently relating to the Textile Plants and all Immovable Properties, Movable Properties, Intangible Properties and General Assets acquired by the Company at any time after execution of and during the continuance of the Indenture of Mortgage; (b) additional charge by way of mortgage on Immovable Properties at villages Jethlaj, Karoli, Vadsar, Moti Bhoyan, Santej and Khatrej; (c) charge on the Company’s Trademarks and (d) Secured by second charge on all the Company’s Current Assets both present and future relating to the Textile Plants. Out of these Rs.8374.700 Millions are additionally secured by first charge on Movable Fixed Assets of Jeans and Shirts Garment divisions at Bangalore. The Company is in the process of creating security in respect of loans amounting to Rs.727.600 Millions.

 

ii  Loans amounting to Rs.342.200 Millions are secured by first charge on all the Fixed Assets of Intex, Cotspin, Bottom Weight and Ankur divisions of the Company and second charge on the entire Current Assets both present and future relating these divisions.

 

iii Loan of Rs.13.400 Millions is secured by first charge on Company’s Immovable Property situated at Ramnagar, Bangalore.

 

iv Loans of Rs.10.500 Millions are secured by hypothecation of related vehicles. “Textile Plants” means all immovable properties, and all movable properties of the Company, including movable machinery, machinery spares, tools and accessories, but excluding Investments and excluding current assets charged in favour of the Working Capital Lenders, at the following textile plants of the Company:

 

a)   Naroda Road, District Ahmedabad

b)   Village Santej at Taluka Kalol, District Mehsana

c)   Village Khatrej at Taluka Kalol, District Mehsana

d)   Asoka Spintex Division at Naroda Road, District Ahmedabad

 

Rate of Interest and Terms of Repayment

 

Particulars

(Rs. in Millions)

Range of Interest (%)

Terms of Repayment from Balance sheet date

From Banks

 

 

 

Rupee Loans

8569.100

11% to 13%

Repayable in quarterly installments ranging between

8 to 24 with moratorium period in some of the loans

Foreign Currency Loans

585.600

LIBOR+3.40%

Repayable in 8 equal half yearly installments starting from September 2015

From Financial Institutions and Others

Rupee Loans

1573.900

11% to 12.30%

Repayable in equal quarterly installments ranging

between 12 to 24

Rupee Loans

13.400

15.25%

Repayable in 25 monthly installments

Foreign Currency Loans

226.300

LIBOR+ 3.75%

Repayable in 14 equal quarterly installments

Kotak Mahindra Prime Limited - Hire

Purchase Loan

10.500

8% to 10%

Monthly payment of Equated Monthly Installments

beginning from the month subsequent to taking the

loans

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

Sorab S. Engineer and Company

Chartered Accountants

Address :

Ismail Building 381, Dr. D. Naoroji Road Fort, Mumbai-400 001, Maharashtra, India

 

 

Subsidiary Companies:

·         Asman Investment Limited

·         The Anup Engineering Limited

·         Arvind Lifestyle Brands Limited

·         Arvind Accel Limited

·         Syntel Telecom Limited

·         Arvind Infrastructure Limited

·         Arvind Brands and Retail Limited

·         Arvind Envisol Private Limited

·         Arvind Worldwide Inc., USA

·         Arvind Worldwide (M) Inc., Mauritius

·         Arvind Overseas (M) Limited, Mauritius

·         Arvind Spinning Limited, Mauritius

·         Arvind Textile Mills Limited, Bangladesh

·         Arvind Spinning Park Private Limited

·         Arvind Hebbal Homes Private Limited

 

·          

Joint Venture

·         Arya Omnitalk Wireless Solutions Private Limited

·         Tommy Hilfiger Arvind Fashions Private Limited

·         Arya Omnitalk Radio Trunking Services Private Limited

·         Arudrama Developers Private Limited

 

 

Joint Venture Subsidiary

Company:

·         Arvind PD Composites Private Limited

·         Arvind Goodhill Suit Manufacturing Private Limited

·         Arvind Niloy Exports Private Limited, Bangladesh

·         Arvind OG Nonwovens Private Limited

 

 

Limited Liability Partnership:

·         Arvind Bsafal Homes LLP

·         Ahmedabad East Infrastructure LLP

·         Arvind and Smart Value Homes LLP

 

 

Company under the control

of Key Managerial Personnel:

·         Aura Securities Private Limited

·         Amplus Capital Advisors Private Limited

 

 

CAPITAL STRUCTURE

 

AS ON 31.03.2013

 

Authorised Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

565000000

Equity Shares

Rs.10/- each

Rs. 5650.00 Millions

10000000

Preference Shares

Rs.100/- each

Rs. 1000.000 Millions

 

 

 

 

 

Total

 

Rs. 6650.000 Millions

 

Issued Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

258043969

Equity Shares

Rs.10/- each

Rs. 2580.400 Millions

 

 

 

 

 

Subscribed & Paid-up Capital :

 

No. of Shares

Type

Value

Amount

 

 

 

 

258043069

Equity Shares

Rs.10/- each

Rs. 2580.400 Millions

 

 

 

 

 

Total

 

Rs. 2580.400 Millions

 

 

Reconciliation of Number of Equity Shares

 

 

31.03.2013

 

No. of Shares

Rs. in Millions

Balance at the beginning of the year

254,400,041

2546.300

Add :

 

 

Shares alloted persuant to exercise of Employee Stock Option Plan

-

-

Shares alloted to the shareholders of Amalgamated Company

3410,528

34.100

Balance at the end of the year

258,043,069

2580.400

 

Rights, Preferences and Restrictions attached to Shares

 

Equity Shares:

 

The Company has one class of shares referred to as equity shares having a par value of Rs.10 each. Each shareholder is entitled to one vote per share held. The dividend 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.

 

Details of Shares held by Shareholders holding more than 5% of the aggregate shares in the Company

 

Particulars

31.03.2013

Aura Securities Private Limited

9,57,90,590

37.12%

Life Insurance Corporation of India

1,65,85,134

6.43%

 

Shares reserved for issue under options

 

Refer note 36 for details of shares to be issued under options

 

Shares allotted as fully paid up pursuant to contract without payment being received in cash (during 5 years immediately preceding March 31, 2013) 34,10,528 Equity Shares of Rs.10 each were issued during the year to the erstwhile shareholders of Arvind Products Limited pursuant to the Scheme of  Amalgamation without payment being received in cash.

 

Proposed Dividend

 

The final dividend proposed for the year is as follows:

 

Particulars

31.03.20123

On Equity Shares of Rs.10/- each

 

Dividend per Equity Share (Rs.)

1.65

Percentage of Dividend Proposed

16.50%

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2013

31.03.2012

31.03.2011

I.        EQUITY AND LIABILITIES

 

 

 

(1)Shareholders' Funds

 

 

 

(a) Share Capital

2580.400

2580.400

2544.000

(b) Reserves & Surplus

20414.700

17579.600

15411.100

(c) Money received against share warrants

0.000

0.000

0.000

 

 

 

 

(2) Share Application money pending allotment

0.000

0.000

0.000

Total Shareholders’ Funds (1) + (2)

22995.100

20160.000

17955.100

 

 

 

 

(3) Non-Current Liabilities

 

 

 

(a) long-term borrowings

9471.000

7073.500

7937.800

(b) Deferred tax liabilities (Net)

128.200

128.200

128.200

(c) Other long term liabilities

0.000

0.000

0.000

(d) long-term provisions

119.800

495.100

71.800

Total Non-current Liabilities (3)

9719.000

7696.800

8137.800

 

 

 

 

(4) Current Liabilities

 

 

 

(a) Short term borrowings

10155.400

8959.500

8058.900

(b) Trade payables

6644.800

5983.200

6040.400

(c) Other current liabilities

2453.300

2462.600

2355.300

(d) Short-term provisions

869.600

945.700

44.500

Total Current Liabilities (4)

20123.100

18351.000

16499.100

 

 

 

 

TOTAL

52837.200

46207.800

42592.000

 

 

 

 

II.      ASSETS

 

 

 

(1) Non-current assets

 

 

 

(a) Fixed Assets

 

 

 

(i) Tangible assets

23340.700

22626.100

19780.500

(ii) Intangible Assets

55.900

64.500

69.400

(iii) Capital work-in-progress

2003.200

1791.000

807.800

(iv) Intangible assets under development

0.000

0.000

0.000

(b) Non-current Investments

4928.600

3371.100

3263.400

(c) Deferred tax assets (net)

0.000

0.000

0.000

(d)  Long-term Loan and Advances

2359.300

1892.100

1523.000

(e) Other Non-current assets

5.400

20.400

91.200

Total Non-Current Assets

32693.100

29765.200

25535.300

 

 

 

 

(2) Current assets

 

 

 

(a) Current investments

0.000

0.000

0.000

(b) Inventories

8779.600

7284.200

6991.600

(c) Trade receivables

4424.200

4055.500

5636.300

(d) Cash and cash equivalents

1506.000

393.700

290.900

(e) Short-term loans and advances

2502.400

2147.500

2876.300

(f) Other current assets

2931.900

2561.700

1261.600

Total Current Assets

20144.100

16442.600

17056.700

 

 

 

 

TOTAL

52837.200

46207.800

42592.000

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

 

31.03.2013

31.03.2012

31.03.2011

 

SALES

 

 

 

 

 

Income

37802.900

34941.200

26832.600

 

 

Other Income

934.600

1358.100

520.700

 

 

TOTAL                                     (A)

38737.500

36299.300

27353.300

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Cost of materials and accessories consumed

16412.200

15687.600

 

 

Purchases of Stock in Trade

844.400

374.000

 

 

 

Project Expenses

280.700

136.000

 

 

 

Changes in inventories of finished goods, work-in-progress and stock-in-trade

(1660.100)

35.700

22971.400

 

 

Employee benefits expense

4422.200

3605.100

 

 

 

Other expenses

11636.600

10090.400

 

 

 

Extraordinary Items

0.000

(2518.000)

 

 

 

TOTAL                                     (B)

31936.000

27410.800

22971.400

 

 

 

 

 

Less

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

6801.500

8888.500

4381.900

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

2684.400

2702.500

1872.300

 

 

 

 

 

 

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

4117.100

6186.000

2509.600

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

1504.900

1305.100

1161.600

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

2612.200

4880.900

1348.000

 

 

 

 

 

Less

TAX                                                                  (I)

0.000

538.600

0.000

 

 

 

 

 

 

PROFIT AFTER TAX (G-I)                                  (J)

2612.200

4342.300

1348.000

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

7996.700

4501.200

3144.200

 

 

 

 

 

Add

Profit of Amalgamated Company

0.000

16.200

0.000

 

 

 

 

 

Less

Amount transferred to Statement of

Profit and Loss on account of Amalgamation

0.000

563.100

0.000

 

 

 

 

 

Add

Transfer from Debenture Redemption

Reserve

0.000

0.000

9.000

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

200.000

0.000

0.000

 

 

Proposed Dividend on Equity Shares

425.800

258.000

0.000

 

 

Tax on Dividend

72.400

41.900

0.000

 

BALANCE CARRIED TO THE B/S

9910.700

7996.700

4501.200

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Export of Goods on FOB basis

14449.400

14871.000

11343.800

 

 

Better Cotton Grant

25.200

24.500

3.000

 

TOTAL EARNINGS

14474.600

14895.500

11346.800

 

 

 

 

 

 

IMPORTS

 

 

 

 

 

Capital Goods

929.100

1577.200

485.800

 

 

Dyes and Chemicals, Stores and Spare Parts

2870.500

612.700

665.400

 

 

Raw Materials and Accessories

738.700

1233.700

552.200

 

TOTAL IMPORTS

4538.300

3423.600

1703.400

 

 

 

 

 

 

Earnings Per Share (Rs.)

 

 

 

 

- Basic

10.12

16.83

5.64

 

- Diluted

10.12

16.83

5.63

 

 

QUARTERLY RESULTS

 

PARTICULARS

30.06.2013

 

30.09.2013

31.12.2013

Type

1st Quarter

2nd Quarter

3rd Quarter

Net Sales

10932.700

11928.900

12080.000

Total Expenditure

9067.000

9871.300

1,0057.000

PBIDT (Excl OI)

1865.700

2057.600

2023.000

Other Income

244.200

199.100

174.200

Operating Profit

2109.900

2256.700

2197.200

Interest

710.600

762.200

705.600

Exceptional Items

(117.500)

(40.100)

0.000

PBDT

1281.800

1454.400

1491.600

Depreciation

376.400

402.600

402.900

Profit Before Tax

905.400

1051.800

1088.700

Tax

111.900

119.000

150.000

Provisions and contingencies

0.000

0.000

0.000

Profit After Tax

793.500

932.800

938.700

Other Adjustments

0.000

0.000

0.000

Net Profit

793.500

932.800

938.700

 

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2013

31.03.2012

31.03.2011

PAT / Total Income

(%)

6.74

11.96

4.93

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
6.91

13.97

5.02

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
5.69

11.89

3.50

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.11

0.24

0.08

 

 
 

 

 

Debt Equity Ratio

(Total Debt /Networth)

 
0.85

0.80

0.89

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
1.00

0.90

1.03

 

 

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

 

DEBT EQUITY RATIO

 

Particular

31.03.2011

31.03.2012

31.03.2013

 

(INR in Mlns.)

(INR in Mlns.)

(INR in Mlns.)

Share Capital

2,544.000

2,580.400

2,580.400

Reserves & Surplus

15,411.100

17,579.600

20,414.700

Net worth

17,955.100

20,160.000

22,995.100

 

 

 

 

long-term borrowings

7,937.800

7,073.500

9,471.000

Short term borrowings

8,058.900

8,959.500

10,155.400

Total borrowings

15,996.700

16,033.000

19,626.400

Debt/Equity ratio

0.891

0.795

0.854

 

 

 

 

YEAR ON YEAR GROWTH

 

Year on Year Growth

31.03.2011

31.03.2012

31.03.2013

 

(INR in Mlns)

(INR in Mlns)

(INR in Mlns)

Sales

26,832.600

34,941.200

37,802.900

 

 

30.219

8.190

 

 

 

 

NET PROFIT MARGIN

 

Net Profit Margin

31.03.2011

31.03.2012

31.03.2013

 

(INR)

(INR)

(INR)

Sales

26,832.600

34,941.200

37,802.900

Profit

1,348.000

4,342.300

2,612.200

 

5.02%

12.43%

6.91%

 

 

 

 

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

No

9]

Name of person contacted

No

10]

Designation of contact person

No

11]

Turnover of firm for last three years

Yes

12]

Profitability for last three years

Yes

13]

Reasons for variation <> 20%

--

14]

Estimation for coming financial year

No

15]

Capital in the business

Yes

16]

Details of sister concerns

Yes

17]

Major suppliers

No

18]

Major customers

No

19]

Payments terms

No

20]

Export / Import details (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

 

HIGH COURT OF GUJARAT

 

CIVIL APPLICATION No. 10439 of 2012

 

In SPECIAL CIVIL APPLICATION/ 936/ 2011 ( PENDING )

 

Status : PENDING

( Converted from : CAST/10655/2012 )

CCIN No : 001003201210439

 

 

Last Listing Date:

02/07/2013

 

Coram

·                       HONOURABLE MR.JUSTICE ANANT S. DAVE

 

 

 

S.NO.

Name of the Petitioner

Advocate On Record

1

GUJARAT ELECTRICITY REGULATION COMMISSION

MR BD KARIA for: Petitioner(s) 1

S.NO.

Name of the Respondant

Advocate On Record

1

ARVIND LTD

MR AMAR N BHATT for :Respondent(s) 1

 

 

 

Presented On

: 12/09/2012

Registered On

: 12/09/2012

 

 

Bench Category

: SINGLE BENCH

District

: AHMEDABAD

 

 

Case Originated From

: THROUGH ADVOCATE

Listed

: 12 times

 

 

StageName

: NOTICE AND ADJOURNED MATTERS

 

 

 

Classification
  • SJ - CIVIL MISC. APPLICATION - CODE OF CIVIL PROCEDURE, 1908 - REVIEW / MODIFICATION / DIRECTION / EXTENSION OF TIME / CLARIFICATION

Act
  • CIVIL PROCEDURE CODE, 1908

 

Office Details

 

S. No.

Filing Date

Document Name

Advocate Name

Court Fee on Document

Document Details

1

12/09/2012

APPLICATION

MR BD KARIA ADVOCATE
for PETITIONER(s) 1

20

MR BD KARIA:1

Court Proceeding

 

S. No.

Notified Date

CourtCode

Board Sr. No.

Stage

Action

Coram

1

11/12/2012

15

-

ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE Z.K.SAIYED

2

09/01/2013

15

12

ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE Z.K.SAIYED

3

22/01/2013

15

10

URGENT ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE Z.K.SAIYED

4

11/02/2013

15

11

URGENT ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE Z.K.SAIYED

5

27/02/2013

15

-

URGENT ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE Z.K.SAIYED

6

20/03/2013

15

-

URGENT ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE RAJESH H.SHUKLA

7

05/04/2013

15

13

URGENT ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE RAJESH H.SHUKLA

8

30/04/2013

15

15

URGENT ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE RAJESH H.SHUKLA

9

10/05/2013

15

32

URGENT ADMISSION - CA

NEXT DATE

·                       HONOURABLE MR.JUSTICE RAJESH H.SHUKLA

10

17/06/2013

8

12

NOTICE AND ADJOURNED MATTERS

NEXT DATE

·                       HONOURABLE MR.JUSTICE ANANT S. DAVE

·                       HONOURABLE MR.JUSTICE RAJESH H.SHUKLA

11

02/07/2013

8

5

NOTICE AND ADJOURNED MATTERS

undefined

·                       HONOURABLE MR.JUSTICE ANANT S. DAVE

 

NOTE: MATTER CONVERTED TO: MCA/1962/2013

 

 

UNSECURED LOAN

 

PARTICULARS

31.03.2013

(Rs. in Millions)

31.03.2012

(Rs. in Millions)

Long-term Borrowings

 

 

From Financial Institutions

25.800

25.800

Short-term borrowings

 

 

Under Buyer’s Credit Arrangemen

498.700

380.700

Intercorporate Deposits

 

 

From Related Parties

2.600

4.200

From Others

18.600

15.000

Total

545.700

425.700

 

INDEX OF CHARGES

 

S.NO.

CHARGE ID

DATE OF CHARGE CREATION/MODIFICATION

CHARGE AMOUNT SECURED

CHARGE HOLDER

ADDRESS

SERVICE REQUEST NUMBER (SRN)

1

10453218

06/09/2013

1,350,000,000.00

AXIS TRUSTEE SERVICES LIMITED

AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND,  PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA

B86723749

2

10429849

14/05/2013

750,000,000.00

AXIS TRUSTEE SERVICES LIMITED

AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND,  PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA

B76623339

3

10419190

22/03/2013

1,350,000,000.00

STATE BANK OF INDIA

MID CORPORATE GROUP, COMMERCIAL BRANCH, "PARAMSID
DHI"COMPLEX,NR.MAHAKANT BLDG.,ELLISBRIDGE, AHMEDABAD, GUJARAT - 380006, INDIA

B73026858

4

10419216

22/03/2013

1,000,000,000.00

STATE BANK OF INDIA

MID CORPORATE GROUP, COMMERCIAL BRANCH, "PARAMSID
DHI"COMPLEX,NR.MAHAKANT BLDG.,ELLISBRIDGE, AHMEDABAD, GUJARAT - 380006, INDIA

B73034290

5

10393746

29/11/2012

1,000,000,000.00

AXIS TRUSTEE SERVICES LIMITED

AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND,  PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA

B64792104

6

10388441

30/10/2012

250,000,000.00

ICICI BANK LIMITED

ZONAL HOUSE, 9TH FLOOR, JMC HOUSE, OPP. PARIMAL G
ARDEN, AMBAWADI,, AHMEDABAD, GUJARAT - 380006, INDIA

B62762398

7

10381413

17/10/2012

800,000,000.00

AXIS TRUSTEE SERVICES LIMITED

AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND,  PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA

B60039781

8

10376483

17/09/2012

550,000,000.00

AXIS TRUSTEE SERVICES LIMITED

AXIS HOUSE, 2ND FLR, BOMBAY DYEING MILLS COMPOUND,  PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA

B58096124

9

10377372

28/08/2012

1,000,000,000.00

STATE BANK OF INDIA

MID CORPORATE GROUP, COMMERCIAL BRANCH, "PARAMSID
DHI", NR.MAHAKANT BLDG.,ELLISBRIDGE, AHMEDABAD, GUJARAT - 380006, INDIA

B58435439

10

10363118

08/06/2012

535,000,000.00

STATE BANK OF INDIA

MID CORPORATE GROUP, COMMERCIAL BRANCH, 1ST FLOOR,  "PARAMSIDDHI", NR. MAHAKANT BLDG., ELLSBRIDGE,
AHMEDABAD, GUJARAT - 380006, INDIA

B42681239

 

* Date of charge modification

 

 

COMPANY BACKGROUND

 

Subject is one of the India’s leading vertically integrated textile companies with the presence of almost eight decades in this industry. It is among the largest denim manufacturers in the world. It also manufactures a range of cotton shirting, denim, knits and bottom weights (Khakis) fabrics and Jeans and Shirts Garments. Arvind, through its subsidiary company Arvind Lifestyle Brands Limited, is marketing in India the branded apparel under various brands and is also licensee in India for various international brands. The brands portfolio of the company includes International brands like Arrow, US Polo, Izod, Elle, Cherokee etc. It also operates apparel Value Retail stores MEGAMART. It also operates the specialty retail stores under the licensing arrangement with international brands of Debanhams and Next. Arvind also has the presence in Telecom business directly and through joint venture companies. Recently Arvind has made foray in to Technical Textiles on its own and in joint venture with leading global players.

 

OPERATIONS

 

The macroeconomic environment posed many challenges for the company during the year. On domestic front, stagnant economy, high inflation and higher interest rates dampened the consumer sentiments. On global front Euro Zone continued to be in turmoil. On the top of challenging macroeconomic scenario, Their company witnessed unprecedented event of strike at two of its manufacturing plants in the month of June, 2012 leading to loss of production. It is heartening to note that despite such a challenging environment, Their Company has closed the financial year 2012-13 with 8% growth in sales and 7% growth in Operating Earnings before Interest, Depreciation and Taxes. (Operating EBITDA). PAT (excluding Exceptional Income) has shown a growth of 11% compared to the previous year.

 

The growth in revenue was mainly led by woven fabric division which registered growth of 28% in volume and 30% in revenue. The Operational Excellence Drive to improve the productivity has resulted into higher operating margins for woven business. While denim fabric volume was lower by 7% on account of loss of production during strike period, it has maintained its profitability under highly competitive market scenario. Denim Business continues with its strategy of improving product and customer mix so as to achieve higher contribution per meter.

 

FINANCE

 

The Company has repaid the installments of Term Loans amounting to Rs.1950.000 Millions during the current year.

 

The Company has also made fresh borrowings of Rs.4340.000 Millions for funding capital expenditure and other requirements. Long Term Debt of the Company stands to Rs.11040.000 Millions as on 31st March, 2013.

 

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

OVERVIEW OF THE ECONOMY

 

The year 2012-13 in India was in many ways that of a stagnant economy – low GDP growth, steadily low industrial output, high inflation, high interest rates, depreciated currency and conservative policy reforms. However, that can still be construed as good news on two fronts: (a) It did not decline much further beyond the FY2011-12 levels and (b) that sets a low statistical base for things looking to revive in FY2013-14.

 

The year saw the GDP growth decline to near-5% level, the headline CPI rate stayed above 10% for good part the year, IIP growth flattened and overall sentiments weak in the business society as well as among consumers. The conflicting challenges of managing large fiscal deficits while trying to boost economic growth have seen the government and the RBI looking to push for several reforms, though there is still some way to go before those reforms are effectively implemented.

 

Going forward, the expectation for FY2013-14 is that of gradual revival. While some elements of economic pressures would continue to persist, the larger picture points to an improvement over the past year. A major change though, either positive or negative, is seen as unlikely within a year, especially given that the general elections are scheduled for the next year. The year is expected to be characterized by a gradual revival in the industrial output, with stable activity in the agri-sector and services. Inflation is likely to ease gradually, but the trade-off in balancing between growth and inflation could see a cautious growth oriented monetary environment.

 

Some improvement can be expected in the CAD and the continued flows of foreign capital is expected to keep the Rupee largely stable in mid-fifties – assuming that geo-political tensions do not deteriorate and global economic conditions remain where they are, with the recovery process also being cautious. Overall, it is expected that growth will bottom in H1 2013 as domestic and foreign headwinds ease and that GDP growth could average between 5-5.5% this year before picking up to 7%+ in 2014. However, apart from the immediate sentiments being moderate for the next year or two, the long-term India growth story – built on the rising Indian middle-class that will be both younger and richer in the years to come – continues to remain extremely strong. This is visible in the unabated commitment of several large Indian and multi-national corporations to not only sustain but aggressively build position of strength in the Indian markets.

 

The company also strongly believes in the long-term India growth and consumption story and is taking calculated steps to create strong businesses that would see a major pivoting once an economic upturn comes around. During the current moderate growth phase however, the strategy is to follow a cautious growth approach that strengthens the businesses fundamentally while also exploiting the current value creation opportunities.

 

INDIAN TEXTILE INDUSTRY

 

The Indian textile industry is one of the leading textile industries in the world, steadily improving in its capabilities and competitiveness vis-à-vis the other global economies. It chiefly consists of ginning, spinning, weaving and processing industries and plays a major role in the country’s economy. It contributes nearly 14% of the total industrial production of the country, nearly 4% percent to the country’s GDP and accounts for about 17% of its total foreign exchange earnings through textile exports. Further, it is also the second largest employer in the country, only after agriculture, currently employing more than 35 million Indians directly and almost twice as many through the allied industries.

 

The industry operates in several segments, including cotton textiles, silk textiles, woollen textiles, jute and coir, man-made textiles and readymade garments. The total Indian textile industry size, including readymade garments, was estimated to be Rs.4.9 lakh Crores (nearly USD 90 Bn) in 2012, projected to grow over the next 10 years at a CAGR of 9-10%, to reach Rs.10 lakh Crores (nearly USD 200 billion) by 2020. This constitutes of 65% domestic market and 35% exports and the mix is expected to largely remain the same given the balance of strong domestic consumption growth and increasing global competitiveness.

 

The industry saw low exports growth in 2012, due to weaker international demand partly compensated by a weak Indian Rupee. However, over the next 3-5 years, India’s share of global textile exports is poised to increase from current 4% to around 7%, driven by the improving competitiveness vis-à-vis other major exporters like China and Turkey.

 

The US and the EU nations account for almost two-thirds of India’s textile exports. The other major destinations are Bangladesh, Turkey, Japan, South Korea, Canada, Saudi Arabia and UAE. In order to keep the textile industry competitive and world class, there is a periodic need for installing new machinery, adopting latest technology and improving availability of accessories. Overall, going forward, the exports market is expected to continue growing at 10% CAGR for the next decade.

 

 

THE TECHNICAL TEXTILES SEGMENT

 

Globally, the technical textiles segment is an immense opportunity, with the worldwide industry size estimated at USD 130 Bn. The size of this segment in India is currently pegged at Rs.70,000 Cr (nearly USD 13 Bn), contributing nearly 15% to the total domestic textile market. This segment is characterized by world-class manufacturing capabilities technology skill-sets and is expected to show strong growth in India.

 

COTTON

 

For the current cotton season (Oct’12 – Sep’13), the Cotton Advisory Board has estimated the domestic acreage at 11.600 Millions hectares leading to a production of 33.000 Millions bales, as against 35.300 Millions bales from 12.200 Millions hectares in 2011-12. This coupled with high exports demand for cotton as well as yarn and low opening stock of cotton is expected to put pressure on the price of domestic cotton and yarn.

 

Cotton yarn spread continues to remain high with robust demand in domestic as well as overseas market. Certain international trends in cotton have given a boost to cotton exports and making cotton fibre and yarn more expensive in the domestic market. Higher cotton prices in China have prompted the Chinese textile players to import yarn (3% duty on yarn import compared to 40% duty on cotton import based on decided quota).

 

Turkey has removed duty on Indian cotton yarn imports and Turkey being the gateway to Europe, would lead to increased exports of yarn from India. Also, with power shortage in Pakistan and Bangladesh, certain global demand is shifting to India. Provisional data as available with DGFT shows that the current cotton season registered a whopping 51% YoY (Oct-Feb) increase in registration of contract for export of cotton yarn. Exports of cotton bales was at all time high during last season and had also impacted closing stock which is lowest point compared to last four years’ stock.

 

TEXTILE OUTLOOK

 

In the mid-long term, the Indian textile industry is expected to grow strongly with growth being balanced from both domestic consumption as well as exports demand. In the near-term, domestic demand would depend on the macro-economic factors that are expected to gradually revive in FY2013-14. On exports front, there are both positive and negative factors. Positive factors include the weak currency and decreasing cost competitiveness of China that are likely to give positive impetus to the Indian exports. At the same time, factors like slowdown and uncertainty in the global markets, volatile foreign exchange rates and increase in cotton and yarn prices are likely to negatively affect growth and profitability for the textile exports.

 

The company is looking to take a cautious growth approach in the textiles business – protecting margins through moving into more premium and differentiated space, as well as operational measures like greater share of in-house spinning by leveraging the central and state government support on investments and gradual addition of capacities depending on demand upturn. For garmenting, the focus is on strategically increasing share of vertical business with the global as well as Indian brands, providing both enhanced business growth as well as demand security for the fabric manufacturing businesses. The company is also looking to tactically leverage Bangladesh for greater competitiveness in the global supply chain, through partnership routes. Lastly, the company is looking to place selective large bets in the technical textiles segment to create breakthrough growth opportunities for the future.

 

INDIAN APPAREL RETAIL MARKET

 

The Indian consumption growth story needs no explanation. Despite the slow recent economic growth translating into weak consumer sentiments and demand trends, the larger story of growth of organized retail in India is expected to continue to gain momentum, with the additional boost of Ecommerce retailing (commonly known as E-tailing). The total size of India’s retail market is pegged at USD 490 Bn in 2012 (Source: Technopak), of which organized retail has a low share of ~7% at USD 34 Bn, while e-Tailing is currently a nascent model at ~0.1% or USD 0.6 Bn.

 

The overall retail market expected to grow at 10-12% over the next decade, with an expected market size of USD 1440 Bn by 2021 (source: Technopak). The more important trend though, is that while the share of organized retail in total retail has grown over the last 4-5 years from ~5% in 2007 to reach ~7% by 2012, it is expected that the combined growth of brick-and-mortal retailing and e-tailing is expected to take this share to ~20% by 2021.

 

That would translate into a compounded annual growth rate of over 25% over a decade!

 

Apparel as a category constitutes the largest share of organized retailing at ~30%, driven by factors like higher brand preference in apparel compared to categories like ‘Food and Grocery’ where fresh availability is a more primary consumer need. Apparel is also a category that is more promptly being adopted by the internet buyer, compared to other large retail categories. Hence both trends put together, apparel is expected to be a large part of the India organized retail opportunity in 2021, both in the brick and format as well as in e-tailing.

 

In the shorter term, organized apparel retail witnessed some impact of softened consumer sentiments during the last year, reflecting in slower like-to-like (LTL) sales growth in the apparel stores and the overall industry growth of 4-5% in value terms over FY12-13. However, the gradual revival expected in the economy in FY13-14, along with some major policy reforms in this sector, will facilitate improved profitability of the existing brands as well as promote entry of new brands that will further expand the market. Three specific drivers of recovery in apparel demand in FY13-14 include (a) Restoration of zero excise duty on readymade garments and made ups announced in the Union Budget 2013-14 (b) Faster clearance of investment proposal of foreign branded retail and (c) Expected revival in the overall economy in FY13-14 that will open up the unspent demand for apparels.

 

Across the various apparel segments, menswear will continue to be the largest segment, contributing to ~35% of the total apparel market, while kidswear is expected to grow faster due to new brand offerings in this hitherto unexploited market segment.

 

The company operates in the branded apparel space through a diverse portfolio of owned and licensed international brands that have seen strong growth momentum in the past. The strategy has been to create several large and high-growth ‘Power brands’ (like Arrow, US Polo, Tommy Hilfiger and Flying Machine) and The company has seen with experience that these brands start to yield very healthy bottomlines and returns once they reach a critical size. With many other strong growth brands in the portfolio (including those acquired recently) like Gant, Nautica, Elle, Billabong, Ed Hardy, Hanes and Wonderbra, the Arvind approach would be to gradually make these brands the next set of ‘Power brands’, providing significant topline growth as well as healthy bottomlines. While menswear market, being the largest and most attractive branded apparel space, would continue to be dominant in the Arvind portfolio, other important and attractive segments like women, kids and innerwear are also being emphasized to grow their share of the business portfolio and align it with the market growth trends.

 

The company operates in the retail space through its MegaMart brand of stores that have undergone a major transformation in business model over the last year to be repositioned as a value format and the strategy has also started to deliver the expected results in terms of improved profitability. The company has also launched its own brand of ‘Arvind Stores’ to target the attractive domestic market for fabric retail and custom clothing. With continued improvements in the existing formats and the addition of specialty store formats like Debenhams and Next, Arvind will be looking to become a leading apparel retail player in India and also strive to bring newer formats to the Indian consumer and offer them differentiated products and retail experience.

 

RESULT REVIEW

 

The macroeconomic environment posed many challenges for the company during the year. On domestic front, stagnant economy, high inflation and higher interest rates dampened the consumer sentiments. On global from Euro zone continued to be in turmoil. On the top of challenging macroeconomic scenario, Their company witnessed unprecedented event of strike at its Naroda plant in the month of June 2012 leading to loss of production. It is heartening to note that despite such a challenging environment, Their Company has closed the financial year 2012-13 with 8% growth in sales and 7% growth in Operating Earnings before Interest Depreciation and Taxes. (Operating EBITDA). PAT (excluding Exceptional Income) has shown a growth of 11% compared to the previous year.

 

BUSINESS REVIEW AND DEVELOPMENTS

 

DENIM

 

The performance of Denim Division was impacted on account of Strike by the workmen. Due to Strike, there was a loss of Production of 4.3 Mn Mtrs which resulted into 7% reduction in volume for the year. It is highly satisfying to note that Denim Division could maintain profitability despite there being addition in Denim Capacities by about 250 Mn Mtrs in India which made the markets highly competitive. Denim Business continues with its strategy of improving Product and Customer Mix so as to achieve higher Contribution per meter.

 

WOVEN FABRICS

 

During the Year, Company expanded the Capacity of Woven Fabrics by 12 Mn Mtrs. On account of this expansion, the Woven Business has seen growth of 28% in volume and 29% in revenue. It is heartening to note that there is significant increase in businesses with the large global as well as local customers like GAP, Levis etc. Further, the Operational Excellence Drive to improve the productivity has resulted into higher Operating Margins for Woven business.

 

OUTLOOK

 

The Company is witnessing strong demand in the international markets especially for Wovens. However domestic retail market is sluggish which is likely to keep growth in the Brands and Retail business slow. The sluggish retail demand may affect the growth of MegaMart. At the same time the brands like Arrow, US Polo and Tommy Hilfiger continue to show lot of promise for growth. The newer brands added during the last year are also expected to grow strongly, though on a smaller base, and would provide additional growth to the business.

 

Under the above scenario, the Company is expecting overall revenue growth of over 20% for FY2013-14, on account of volume growth in both Textiles and Brands and Retail. The Textiles business may achieve growth in the 12-15% range, whereas Brands and Retail business is expected to grow strongly at 25%+.

 

The company expects that the overall margins for the coming year will be maintained. Margins for the Textiles businesses may improve marginally due to improved pricing and greater scale and operational efficiency, while margins for the Brands and Retail businesses may fall slightly due to higher investments in marketing and distribution for the newly acquired brands.

 

The Strategic Help Alliance for Relief to Distressed Area (SHARDA) Trust and Narottam Lalbhai Rural Development Fund (NLRDF) are the company’s arms for carrying out the CSR Programmes. SHARDA and NLRDF have been active in improving the quality of life of the urban poor and rural poor. During 2012-13, a definitive step has been taken by launching a study for collecting information of the workforce and their family members to design programmes for them.

 

 

SHARDA TRUST’S PROGRAMMES

 

Arvind Limited established SHARDA (Strategic Help Alliance for Relief to Distressed Areas) Trust in 1995 with a purpose of helping the urban poor by upgrading their quality of life. Besides improving infrastructure facilities in distressed areas, providing healthcare facilities and helping the people upgrade their skills to get well paying jobs, SHARDA trust is now focussing on providing quality education to students studying in Municipal Schools since 2006. These educational facilities are being provided by means of an association with local Government, the Ahmedabad Municipal School Board.

 

SHARDA Trust is working with about 1000 students from class V-XII through ‘Gyanda Education Programme’. Education programme includes organised academic support as well as grooming students on social, cultural and personal aspects. Year 2012-13 was especially important for Trust as the first batch is completing class XII. These students will now be going for higher and professional education and subsequently start earning which will ensure that it is the last generation in poverty for them, a cherished dream that the Trust and the students have shared together. Most encouraging incidents are of those few parents whose one child (all girls) is studying with us in Municipal School and the other child (all boys) is in private school. After noticing the progress of their girls, the parents decided to withdraw their children from private school and got them admitted in Municipal School to be part of Gyanda Education programme. They consider this as huge recognition of Trust’s efforts for bringing a small but strong social change. Gyanda’s total enrolment is poised to reach about 1500 students by 2015-16 as Their conversion from primary to secondary has improved. The Trust does plans to initiate new Gyanda Centres.

 

Beside school education, Trust conducted Basic Computer Familiarization Programme for 250 children, housewives, working women and working and non-working men. In addition, about 100 youth were trained for Basic English Programme. The Trust organised two ‘Yoga Shibirs’ for the wellbeing of people in community around Their Naroda premises during 2012-13. This was conducted by Swami Adhyatmanandji of the Sivananda Ashram, Ahmedabad. Both the camps were attended by about 300 people in each camp.

 

Towards end of 2012, the Trust initiated ambitious plan to collect comprehensive information about Arvind’s workers and their family members related to education, health, housing and contact information and thereby plan welfare and capacity building initiatives to enhance quality of life. For doing so, a Workers’ Information System was designed with provisions for generating intended reports. All the information was collected online. As of March 2013, first set of study with over 7000 workers has been completed in Ahmedabad region and based on the findings suggested initiatives were presented to the top management. 2013-14 will witness initiation of activities in Ahmedabad region and expanding the scope of study to Santej and Bangalore regions to cover complete workforce.

 

These activities and programmes have opened up avenues for expansion of the Trust’s initiatives and for undertaking newer initiatives.

 

NLRDF’s Programmes

 

Established in 1978 as Public Charitable Trust, NLRDF is the rural CSR arm of Arvind Limited. NLRDF directly intervenes at the village level with the strategy of linking the government programmes with the rural poor and thereby increasing the efficiency and the effectiveness of the delivery process.

 

The year mainly witnessed programmes for skill upgrading for livelihood promotion, economic empowerment of widows and programme for HIV/AIDS awareness and prevention.

 

Specifically, 75 youngsters from BPL families received training for mason work and tool kit for same was given to them to ensure earnings. NLRDF trained 144 Female Sex Workers and their family members in different skill up-gradation initiatives. Out of which, 111 women received a two months training for Cutting and Tailoring. They got sewing machines at token cost to ensure earnings. Other 33 women were trained for applying Mehandi.

 

NLRDF’s entrepreneurship programmes for widows have its operations in 20 districts of Gujarat. It has trained about 11000 widows in last 6 years.

 

During 2012-13, more than 3000 widows were trained. Each one of them received a kit of their choice worth about Rs.5000 for their livelihood. Newly acquired confidence to step out of their houses which they could not think of earlier is the noticeable outcome from this programme. Few selected needy and working widow entrepreneurs are being financially supported for the expansion of their current business.

 

Another programme worth mentioning is on HIV/AIDs control. Intervention includes providing services like Behaviour Change Communication, Counseling, STD treatment and creating enabling environment and referral and linkages to core population. This has brought significant change in their practice and behaviour. A workshop on ‘Awareness on HIV/AIDS-prevention and control’ was also organized for industrial workers in Ahmedabad which was attended by about 500 people.

 

Under Mamta Taruni Programme, 860 non-school going adolescent girls from 18 villages were identified. They are trained for nutrition awareness, personal hygiene, health care etc. A state level programme on the occasion of International Women Day 2013 was celebrated on 8th March 2013 at Khedbrahma. Around 2500 women from surrounding villages participated in this one day event and experts shared with them information on their legal rights, education etc.

 

Subject, through SHARDA and NLRDF aspires to help the poor in urban and rural settings through its programmes and believes that programmes of social renewal with a business approach will bring lasting change in society.

 

 

CONTINGENT LIABILITIES

(Rs. in Millions)

CONTINGENT LIABILITIES (to the extent not provided for)

 

31.03.2013

31.03.2012

Bills Discounted

1175.900

1114.000

Claims against the Company not acknowledged as debts

78.200

85.500

Guarantees given by the Banks on behalf of the Company

694.800

590.000

Guarantees given by the Company to Banks on behalf of Subsidiaries/Joint Ventures

3989.900

3558.300

Disputed Demands in respect of

 

 

Excise/Custom Duty

288.500

308.300

Sales Tax

203.700

203.700

Income Tax

190.400

181.100

Service Tax

8.400

11.900

 

 

FIXED ASSETS

 

Tangible Assets

 

·         Leasehold Land

·         Own Assets

·         Freehold Land

·         Building

·         Plant and Machinery

·         Furniture and Fixtures

·         Office Equipments

·         Leasehold Improvements

·         Vehicles

 

Intangible Assets

 

·         Own Assets

 

·         Patent and Technical Knowhow

·         Computer Software

 

 

UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 31ST DECEMBER 2013

 

(Rs. in millions)

Sr.

Particular

Quarter Ended

Nin Month Ended

No.

 

 

31.12.2013

30.09.2013

31.12.2013

 

 

(Unaudited)

(Unaudited)

(Unaudited)

1

Income from Operations

 

 

 

 

Net Sales

12123.800

12378.700

35544.800

 

Other Operating Income

(43.800)

(449.800)

(603.200)

 

Net Sales/Income from Operations

12080.000

11928.900

34941.600

 

 

 

 

 

2

Expenditure

 

 

 

 

Cost of Material Consumed  

5337.800

5312.400

15507.800

 

Purchase of Stock In Trade

191.900

198.900

584.300

 

Project Expenses

19.900

12.600

57.700

 

Change in Inventories of Finished Goods, Work-In-Progress and Stock In Trade

(186.700)

(314.000)

(749.400)

 

Employee Benefits Expenses

1284.300

1314.600

3831.200

 

Depreciation and Amortization Expenses

402.900

402.600

1181.900

 

Power and Fuel

1025.600

1001.500

3021.400

 

Stores Consumption

947.400

909.000

2709.200

 

Other Expenses

1430.500

1336.400

3906.800

 

Foreign Exchange Loss / (Gain)

(28.100)

99.900

91.900

 

f) Total

10425.500

10273.900

30142.800

 

 

 

 

 

3

Profit From Operations before Other Income, Interest and Exceptional Items (1-2)

1654.500

1655.000

4798.800

 

 

 

 

 

4

Other Income

146.100

199.100

589.400

 

 

 

 

 

5

Profit Before Interest and Exceptional Items (3+4)

1800.600

1854.100

5388.200

 

 

 

 

 

6

Interest

705.600

762.200

2178.400

 

 

 

 

 

7

Profit After Interest but before Exceptional Items (5-6)

1095.000

1091.900

3209.800

 

 

 

 

 

8

Exceptional Items

(6.300)

(40.100)

(163.900)

 

 

 

 

 

9

Profit from Ordinary Activities before Tax (7+8)

1088.700

1051.800

3045.900

 

 

 

 

 

10

Tax Expense

150.000

119.000

380.900

 

 

 

 

 

11

Net Profit from Ordinary Activities after Tax (9-10)

938.700

932.800

2665.000

 

 

 

 

 

12

Extraordinary Item (net of expense)

0.000

0.000

0.000

 

 

 

 

 

13

Net Profit for the period (11-12)

938.700

932.800

2665.000

 

 

 

 

 

14

Paid-up Equity Share Capital (Face Value of Rs.10/- Each)

2580.400

2580.400

2580.400

 

 

 

 

 

15

Reserves Excluding Revaluation Reserve

-

-

-

 

 

 

 

 

16

Basic and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised

 

 

 

 

a) Basic and diluted EPS before extraordinary items

3.64

3.61

10.33

 

b) Basic and diluted EPS after extraordinary items

3.64

3.61

10.33

 

 

 

 

 

17

Public Shareholding

 

 

 

 

-Number of Shares

144934346

144642549

144934346

 

- Percentage of Shareholding

56.16%

50.05%

56.16%

 

 

 

 

 

18

Promoters and Promoter Group Shareholding

 

 

 

 

a) Pledged/Encumbered

 

 

 

 

- Number of Shares

455000.000

455000.000

455000.000

 

- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)

0.40%

0.40%

0.40%

 

- Percentage of Shares (as a % of the Total Share Capital of the Company)

0.18%

0.18%

0.18%

 

 

 

 

 

 

b) Non Encumbered

 

 

 

 

- Number of Shares

112653723.000

112945520.000

112653723.000

 

- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)

99.60

99.60

99.60

 

- Percentage of Shares (as a % of the Total Share Capital of the Company)

43.66

43.77

43.66

 

 

Particulars

3 Months ended on March 31, 2013

Pending at the beginning of the quarter

Nil

Received during the quarter

23

Disposed of during the quarter

23

Remaining unresolved at the end of the quarter

Nil

 

 

NOTES

 

1.       The limited review of above unaudited financial results as required under Clause 41 of listing agreement has been carried out by statutory auditors.

 

2.       The above results were reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting held on January 30, 2014.

 

3.       Other Income for the quarter includes profit on sale of land held for sale/fixed assets of Rs.3.800 Millions (quarter ended September 30, 2013 profit of Rs.9.900 Millions, quarter ended December 31, 2012 profit of Rs.67.500 Millions and year ended March 31, 2013 profit of Rs.422.500 Millions).

 

4.       Exceptional Item for the quarter/period represents Retrenchment Compensation paid to workers retired under Voluntary Retirement Scheme.

 

5.       Figures of the previous quarter/year have been regrouped wherever necessary.

 

 

SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

 

 (Rs. In Millions)

Sl.

No.

 

 

Particulars

 

Quarter Ended

Nine Months Ended

 

31.12.2013

30.09.2013

31.12.2013

 

(Unaudited)

(Unaudited)

(Unaudited)

1

 

Segment Revenue

 

 

 

 

 

 

 

 

 

 

 

Textiles

11805.100

11703.700

34271.400

 

 

Brand and Retail

187.600

142.200

455.600

 

 

Real Estate

0.000

0.000

0.000

 

 

Others

160.300

136.400

432.000

 

 

 

12153.000

11982.300

35159.000

 

 

Add: Other Unallocable Income

0.000

0.000

0.000

 

 

 

 

 

 

 

 

Less : Inter Segment Revenue (Net of Excise)

73.000

53.400

217.400

 

 

 

 

 

 

 

 

Net Sales / Income from Operation

12080.000

11928.900

34941.600

 

 

 

 

 

 

2

 

Segment Results

 

 

 

 

 

 

 

 

 

 

 

Textiles

1867.000

1779.400

5141.600

 

 

Brand and Retail

(29.000)

(13.900)

(28.900)

 

 

Real Estate

(0.800)

(1.000)

(7.000)

 

 

Others

10.100

05.900

14.100

 

 

Total

1847.300

1770.400

5119.800

 

 

 

 

 

 

 

 

Less :Interest

705.600

762.200

2178.400

 

 

Less : Other Unallocable Expenses

53.000

(43.600)

(104.500)

 

 

 

 

 

 

 

 

Profit Before Extraordinary Items and Tax 

1088.700

1051.800

3045.900

 

 

 

 

 

 

3

 

Capital Employed

 

 

 

 

 

 

 

 

 

 

 

Textiles

30172.700

30493.200

30172.700

 

 

Brand and Retail

594.300

599.500

594.300

 

 

Real Estate

62.200

77.400

62.200

 

 

Others

383.700

380.100

383.700

 

 

Unallocable

19584.400

18024.700

19584.400

 

 

Total Capital Employed In Company

50797.300

49574.900

50797.300

 

NOTE: The Company has considered “Real Estate” as a reportable business segment from the first quarter. Hence the figures of previous periods are regrouped.

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

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

 

2]         Court Declaration :

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

 

3]         Asset Declaration :

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

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                              None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

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

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

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

 

8]         Affiliation with Government :

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

 

9]         Compensation Package :

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

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

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

 

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

 

 

CONTRAVENTION

 

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

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.60.95

UK Pound

1

Rs.101.37

Euro

1

Rs.84.89

 

 

INFORMATION DETAILS

 

Report Prepared by :

TPT

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

6

OPERATING SCALE

1~10

8

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

8

--LIQUIDITY

1~10

7

--LEVERAGE

1~10

7

--RESERVES

1~10

7

--CREDIT LINES

1~10

7

--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

 

65

 

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

 

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

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

 

 

RATING EXPLANATIONS

 

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

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

 

Unlimited

71-85

Aa

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

 

Large

56-70

A

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

 

Fairly Large

41-55

Ba

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

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

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

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

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

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