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Company Information

Home » Market » Company Information

Himatsingka Seide Ltd.

Mar 01
157.05 +1.75 (+ 1.13 %)
VOLUME : 14717
Prev. Close 155.30
Open Price 158.40
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
Mar 01
156.80 +1.30 (+ 0.84 %)
VOLUME : 197456
Prev. Close 155.50
Open Price 156.60
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
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Market Cap. ( ₹ ) 1543.81 Cr. P/BV 1.14 Book Value ( ₹ ) 138.13
52 Week High/Low ( ₹ ) 179/43 FV/ML 5/1 P/E(X) 116.54
Bookclosure 29/09/2020 TTM EPS ( ₹ ) -16.23 Div Yield (%) 0.32
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2018-03 

Note 16.1 : Deferred revenue arising from government grant

The Company has received government grants in the form of import duty exemption and subsidy on purchase of capital goods and purchase of raw materials to be used for production of goods for exports, based on the terms of the respective schemes. The Company recognises such grants in statement of profit or loss on a systematic basis over the period in which the related expenses (the related costs for which the grants are intended to compensate) are incurred and charged to the income statement. The Company has presented such amortisation of deferred income as a deduction from the related expenses.

Note 17.1: The weighted average effective interest rate on the bank loans is 5.51 % per annum (6.91% as at 31 March 2017). Note 17.2: Working capital limits are secured against present and future inventory and trade receivables on pari-passu basis. Information about the Company's exposure to interest rate, currency and liquidity risk are disclosed in note 34.

The interest income earned on financial assets that are not designated as at fair value through profit or loss pertains to interest income earned on account of discounting of the rental deposits.

Note 28.1 : The above amounts have been arrived at based on the notice of demand or the assessment orders, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows including interest and other consequential payments, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future appeals before the judiciary. The Company doesn't expect any reimbursements in respect of the above contingent liabilities.

Note 28.2 : These claims relate to demands resulting from disallowances of deductions claimed and other adjustments, which are being contested by the Company. These cases are pending at various forums with respective authorities. Outflows, if any, arising out of the claims would depend upon the outcome of the decision of the appellate authority and the Company's right for future appeals before judiciary. The Company doesn't expect any reimbursements in respect of the above contingent liabilities.

Note 28.3 : These claims relate to demands arising from difference pertaining to transfer price assessed in terms of Customs Valuation Rules, 1988.

b. As Lessee :

The Company has taken office premises, accommodations and vehicles under operating lease (cancellable lease). Such leases are generally with the option of renewal against increased rent and premature termination. Lease payments are renegotiated at the time of renewal.

Lease rental expense under cancellable operating leases during the year was Rs, 280.59 lacs (previous year: Rs, 183.32 lacs).

The Company is obligated under non-cancelable operating leases for land, building and plant and machinery. Lease rental expense under non-cancellable operating leases during the year was Rs, 381.17 lacs (previous year: Rs, 323.68 lacs).

During the year, the Company completed the construction of integrated ultra-fine count cotton yarn spinning facility and commenced the commercial production on 5 February 2018. Expenses capitalized on initial recognition of the resulting PPE, include the costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Note 31 : Segment Reporting

The Managing Director and Chief Executive Officer of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. The Company is structured into a single segment of Home Textiles value chain, and accordingly the CODM evaluates the Company's performance and allocates resources based on an analysis of various performance indicators by the products portfolio and segment information has been presented accordingly.

The geographical information analyses the Company's revenue from external customer and non-current assets of its single reportable segment by the Company's country of domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on the geographical location of the customer and segment assets which have been based on the geographical location of the assets.

Revenue from major customers.

Customers contributing 10% or more of Company's revenue (2 customers amounting to Rs, 117,305.93 Lacs in 2017-18 and 2 customers amounting to Rs, 106,471.72 Lacs in 2016-17.)

b) All non -current assets other than financial instruments, deferred tax assets of the Company are located in India.

Note 34: Financial instruments

Note 34.1 : Categories of financial instruments:

Accounting classification and fair value

The following table shows the carrying amount and fair value of financial assets and financial liabilities including their levels in fair value hierarchy:

Fair value hierarchy

The section explains the judgment and estimates made in determining the fair values of the financial instruments that are:

a) recognised and measured at fair value

b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Indian Accounting Standard. Lacs)

* Current maturities of long term borrowings aggregating Rs, 8,876.24 lacs and Rs, 5,414.22 lacs as at 31 March 2018 and 31 March 2017 respectively, form part of other financial liabilities.

Investment in equity shares of subsidiaries are not appearing as financial asset in the table above being investment in subsidiaries accounted under Ind AS 27, Separate Financial Statements which is scoped out under Ind AS 109.

Fair Value Hierarchy

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes investment in equity, preference securities, mutual funds and debentures that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unquoted equity securities.

Fair Valuation Method

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

Financial Assets:

The Company has not disclosed the fair values for loans, trade receivables, cash and cash equivalents including other bank balances, unbilled revenue and other financial assets because their carrying amounts are a reasonable approximation of their fair value.

Current Investments : Fair value of quoted mutual funds units is based on quoted market price at the reporting date.

Financial Liabilities:

Borrowings: It includes loans taken from banks and financial institution, cash credit and bill discounting facilities. Borrowings are classified and subsequently measured in the financial statements at amortized cost. Considering that the interest rate on loans is reset on yearly basis, the carrying amount of the loan would be a reasonable approximation of its fair value.

Trade payables and other financial liabilities: Fair values of trade payables and other financial liabilities are measured at carrying value, as most of them are settled within a short period and so their fair values are assumed almost equal to the carrying values.

Note 34.2 : Financial risk management:

The Company's activities expose to financial risks: credit risk, liquidity risk and market risk.

Risk management framework

The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company's Audit Committee oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal auditor. Internal Audit function includes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

i. Credit risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. Bank deposits includes an amount of Rs, 2,895.32 lacs held with a bank having high quality credit rating which is individually in excess of 10% or more of the Company's total bank deposits for the year ended 31 March 2018. None of the other financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs, 107,998.97 lacs and Rs, 92,138.52 lacs as at 31 March 2018, and 31 March 2017, respectively, being the total of the carrying amount of balances with banks, bank deposits, current investments, trade receivables and other financial assets excluding cash in hand and equity investments.

Geographical concentration of trade receivables is allocated based on the location of the customers.

ii. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.The Company believes that the working capital and its cash and cash equivalent are sufficient to meet its short and medium term requirements."

Management monitors rolling forecast of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried out by the Management of the Company in accordance with practice and limits set by the Company. In addition, the Company's liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

A) Financing arrangement

The Company maintains the following line of credit:

(a) Terms loans taken from bank aggregating to Rs, 62,413.49 Lacs repayable in various quarterly and yearly instalments with interest rate ranging from 4.80% to 9.95% per annum. Term Loan from financial institutions aggregating to Rs, 62,036.04 Lacs with interest rate ranging from 9.95% - 11.55% per annum. These are secured by first pari passu charge on the entire movable and immovable fixed assets of the Company, present and future.

(b) Working capital loans from banks carry an effective interest rate of 5.51% per annum., computed on a monthly basis on the actual amount utilized, and are repayable on demand. These are secured by pari passu charge by way of hypothecation of stock and book debts of the Company and second pari passu charge on the movable (other than those exclusively charged) and immovable fixed assets of the Company.

(c) The Company has taken receivable bill discounting facility from banks which are payable within 120 days from date of bill discounted.

The table below provides details regarding the contractual maturities of significant financial liabilities as at 31 March 2018 and 31 March 2017. The amounts are gross and undiscounted contractual cash flow and includes contractual interest payment and exclude netting arrangements:

* Includes current matures of long term borrowings (Refer note 19) and current borrowings (Refer note 17)

# Excludes current matures of long term borrowings

As disclosed in note 14, the Company has secured bank loan that contains loan covenants. A future breach of covenants may require the Company to repay the loan earlier than indicated in the above table. Except for these financial liabilities, it is not expected that cash flows included in maturity analysis could occur significantly earlier.

iii. Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices w ill affect the Company's income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

a) Foreign currency risk:

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional currency of the Company. The functional currency of the Company is '. The currencies in which these transactions are primarily denominated are USD, GBP etc.

Management monitors the movement in foreign currency and the Company's exposure in each of the foreign currency. Based on the analysis and study of movement in foreign currency, the Company decides to exchange its foreign currency. A significant portion of the Company's revenues are in foreign currencies, while a significant portion of its costs are in Indian rupees. As result, if the value of the Indian rupee appreciates relative to foreign currencies, the Company's revenues measured in Indian rupees m ay decrease. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and m ay continue to fluctuate substantially in the future. Consequently, the Company uses derivative and non-derivative financial instruments, such as foreign exchange forward contracts to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions and recognised assets and liabilities. All hedging activities are carried out in accordance with the Company's internal risk management policies, as approved by the Board of Directors, and in accordance with the applicable regulations where the Company operates.

Interest rate risk

Interest rate risk primarily arises from floating rate borrowing, including various revolving and other lines of credit. The Company's investments are primarily in short-term investments, which do not expose it to significant interest rate risk. The Company's borrowings comprises of term loan, working capital loan and bill discounting which carries variable rate of interest, which expose it to interest rate risk.

Note 34.3: Capital management

The Company's policy is to maintain a stable and strong capital base structure with a focus on total equity so as to uphold investor, creditor and market confidence and to sustain future development and growth of the business. The Company monitors the return on capital as well as the level of dividends on its equity shares. The Company's objective when managing capital is to maintain an optimal structure so as to maximize shareholder value and safeguard its ability to continue as a going concern.

The Company monitors capital using a ratio of 'adjusted net debt'to 'equity'. For the purpose of Company's capital management, adjusted net debt is defined as aggregate on non-current borrowing, current borrowing and current maturities of long-term borrowings less cash and cash equivalents, deposits and current investments and total equity includes issued capital and all other equity reserves.

Note 35: Related party disclosures

Note 35.1: Name of related parties and description of relationship

Subsidiaries (including step subsidiaries) Himatsingka Wovens Private Limited

Himatsingka Holdings North America, Inc. ( formerly known as Himatsingka America , Inc.)

Himatsingka America, Inc. (Merged entity of DWI Holdings, Inc. and Divatex Home Fashions, Inc.)

Himatsingka Singapore Pte Ltd Himatsingka Europe Limited Giuseppe Bellora S.r.l.

Twill & Oxford LLC

Associates Himatsingka Energy Private Limited

Key management personnel D.K. Himatsingka - Executive Chairman (w.e.f. 21 May 2016)

Shrikant Himatsingka - Managing Director & Chief Executive Officer (w.e.f. 21 May 2016) V.Vasudevan-Executive Director (w.e.f. 21 May 2016)

Sangeeta Kulkarni-Independent Director (w.e.f. 21 May 2016)

Rajiv Khaitan - Independent Director

Dr.K.R.S Murthy - Independent Director

Berjis M Desai - Independent Director (up to 23 May 2017)

K.P. Rangaraj-Chief Financial officer (w.e.f. 2 August 2017)

Ashutosh Halbe-Interim Chief Financial Officer (from 5 July 2017 to 2 August 2017)

K.P. Pradeep-Chief Financial officer (up to 7 January 2017)

Ashok Sharma-Company Secretary

Aditya Himatsingka - Executive Director (up to 23 May 2017)

Entities over which key management Bihar Mercantile Union Limited (BMU) personnel or relatives of such personnel VSJ investments Pvt Ltd (formerly known as Credit Himatsingka Private Limited [CHPL]) are able to exercise significant influence Khaitan & Co LLP

Jacaranda Design LLC

1. On 25 May 2018, the board of directors recommended a final dividend of Rs, 2.50 per equity share (total dividend of Rs, 2,461.43 lacs (excluding dividend distribution tax )) be p aid to the shareholders for financial year 2018-2019, which need to be approved by shareholders at the Annual General Meeting.

2. Subsequent to the year end, the Board of Directors of the Company vide their meeting dated 25 May 2018 has approved the Scheme of arrangement between Himatsingka Wovens Private Limited ("HWPL"), Himatsingka Seide Limited and their respective shareholders in which retail business of HWPL will be demerged into the Company.

Note 42 : Approval of Financial Statements

The financial statements were approved by the board of directors on 25 May 2018.