New Raj Rayon Industries Ltd - NSE · 2016. 6. 8. · Raj Rayon Industries Ltd was incorporated on...

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STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SECTOR: TEXTILE REPORTING DATE: 31ST MAY, 2016

Raj Rayon Industries Limited www.rajrayon.com

Raj Rayon Industries Ltd 31st May, 2016 TABLE 1 - MARKET DATA (STANDALONE) (As on 31st May, 2016)

NSE Code - RAJRAYON NSE Market Price (₹) 0.35 NSE Market Cap. (₹ Cr.) 13.86

Sector - Textiles Face Value (₹) 1.00 Equity (₹ Cr.) 34.65

52-week High/Low (₹) 0.65/0.35 Net worth (₹ Cr.) -9.92

Business Group - Indian Private TTM P/E N.A. Traded Volume (Shares) 7,000

Year of Incorporation - 1993 TTM P/BV N.A. Traded Volume (lacs) 0.02

Source - Capitaline

Corporate Office: COMPANY BACKGROUND

Survey No 177/1/3, Raj Rayon Industries Ltd is engaged in the manufacture and sale of polyester texturised

yarn (PTY), partially oriented yarn (POY) and fully drawn yarn (FDY).

The company is having four manufacturing plants located at Silvassa, India in the Union

Territory of Dadra and Nagar Haveli. They export their products to Brazil, Chile, Colombia,

Egypt, Guatemala, Iran, Mexico, Morocco, Peru, Poland, Spain, Syria, Thailand, and

Vietnam.

Raj Rayon Industries Ltd was incorporated on August 17, 1993 as a public limited

company with the name Raj Rayon Ltd. In the year 1994, the company started their

manufacturing activities by installing one texturising machine with a manufacturing

capacity of 600 TPA at Silvassa. In April 1995, they made their public issue.

Village Surangi Silvassa, Dadra & Nagar Haveli, Silvassa, Union Territory - 396230

Company Website:

www.rajrayon.com

TABLE 2 - PRICE PERFORMANCE

30th May, 2016

29th May, 2015

30th May, 2014

% Change CAGR for 2 years 2016 vs 2015 2015 vs 2014

Price (₹) 0.35 0.55 0.55 -36.36% 0.00% -20.23%

Trading Volume (Shares) (yearly avg.)

43,670 39,399 33,586 10.84% 17.31% -

NSE Market Cap. (in ₹ Cr.) 12.13 19.05 14.65 -36.33% 30.03% -9.01%

Source - Money Control, price figures are adjusted to corporate action of stock split/bonus issue/stock merger

The Company in the Extraordinary General Meeting held on 11th February, 2013 got approval for the subdivision/split of the face

value from ₹ 10 to ₹ 1 each.

TABLE 3 - FINANCIALS

(₹ Cr.) 2015 2014 2013 % Change CAGR for 2

years 2015 vs 2014 2014 vs 2013

Net Worth -9.92 65.04 152.80 -115.25% -57.43% N.A.

Current Assets 285.42 227.78 345.72 25.31% -34.11% -9.14%

Non-Current Assets 438.14 433.59 349.84 1.05% 23.94% 11.91%

Total Assets 723.56 661.37 695.56 9.40% -4.92% 1.99%

Investments 34.00 74.37 24.29 -54.28% 206.18% 18.31%

Finance Cost 71.09 48.74 33.86 45.86% 43.95% 44.90%

Long Term Liabilities 534.17 515.86 220.40 3.55% 134.06% 55.68%

Current Liabilities 199.31 80.48 322.37 147.65% -75.03% -21.37%

Turnover 183.58 470.11 713.36 -60.95% -34.10% -49.27%

Profit After Tax (PAT,₹ Cr.) -74.86 -87.76 3.71 N.A. -24.65 N.A.

EPS (₹) -3.00 -3.00 0.14 N.A. -22.42 N.A.

Source - Money Control/Annual Report

http://www.rajrayon.com/




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AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Auditors have not raised any qualifications in their report. However, they have

emphasised on the following matter which can be read in detail in their report on Page 36 of the Annual Report

Emphasising on the following Matter the Auditors have said,

“We draw attention to Note 2 of the accompanying financial statements in respect of contingency related to compensation

payable in lieu of bank sacrifice, the outcome of which is materially uncertain and cannot be determined currently. Our opinion is

not qualified in respect of this matter.”

“Our opinion is not qualified in respect of this matter”

Management Response:

“The Directors refer to the Auditors’ observation in the Auditors’ Report and provide their explanation as under:

i) In respect of Note 2 of the Financial Statement regarding amount payable towards recompense: The recompense payable is

contingent on various factors including improved performance of the Company (Borrowers) and many other conditions, the

outcome of which currently is materially uncertain and cannot be determine.

ii) In respect of Auditors observation in Financial Statements regarding cash losses incurred by the Company: It is clarified that

the cash losses were primarily attributable to the lower volumes due to prevailing uncertain economic conditions, lower sales

volume coupled with increase in depreciation and interest/finance cost.”

Response Comment

Frequency of Qualifications - No qualifications are raised by the Auditors in last three years.

Have the auditors made any adverse remark in last 3 years?

No -

TABLE 4: BOARD PROFILE (As on 31st March, 2015)

Regulatory

Norms Company

% of Independent Directors on the Board 50% 50%

% of Promoter Directors on the Board - 50%

Number of Women Directors on the Board Atleast 1 1

Classification of Chairman of the Board - Non-Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - No

Average attendance of Directors in the Board meetings (%) - 91.67%

Source - Money Control/Annual Report

Composition of Board: As per Regulation 17(i)(b) of the Listing Regulations, 2015, the Company should have at least 50%

Independent Directors as the Chairman of the Board is a Promoter Director. The Company as on 31st March, 2015 has 50% of

Independent Directors and hence, it meets the regulatory requirements.

Board Diversity: The Company has 4 directors out of which 3 are male and 1 is female.


https://www1.nseindia.com/annual_reports/AR_7557_RAJRAYON_2014_2015_07092015122930.zip



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TABLE 5 - FINANCIAL RATIOS

Ratios 2015 2014 2013 % Change

2015 vs 2014 2014 vs 2013

Turn

ove

r

Rat

ios

Inventory Turnover 2.26 27.41 5.46 -91.76% 402.15%

Debtors Turnover 1.28 2.79 3.98 -54.22% -29.79%

Fixed asset Turnover 0.42 1.08 2.04 -61.36% -46.83%

Current Asset Turnover 0.64 2.06 2.06 -68.84% 0.02%

Ret

urn

Rat

ios

Operating Profit Margin -58.74% -27.14% 0.83% N.A. -3370.68%

Net Profit Margin -40.78% -18.67% 0.52% N.A. -3689.48%

Return on Assets (ROA) -10.35% -13.27% 0.53% N.A. -2587.78%

Return on Equity (ROE) N.A. -134.93% 2.43% N.A. -5657.32%

Return on Capital Employed (ROCE)

N.A. N.A. 10.83% N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 1.43 2.83 1.07 -49.40% 163.91%

Quick Ratio 1.02 2.62 0.67 -60.86% 292.34%

Cash Ratio 0.30 0.53 0.11 -42.15% 374.70%

Working Capital Turnover ratio 2.13 3.19 30.55 -33.20% -89.55%

Solv

ency

Rat

ios Debt to equity ratio N.A. 8.36 2.14 N.A. 291.03%

Interest Coverage Ratio N.A. N.A. 1.17 N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales 0.08 0.03 0.02 156.08% 51.74%

Market Cap/ Net Worth N.A. 0.21 0.09 N.A. 134.93%

Market Cap/PAT N.A. N.A. 3.74 N.A. N.A.

Market Cap/EBITDA 70.88 N.A. 34.30 N.A. N.A.

Trading Volume (shares) (avg. of 1 year)

41,517 43,593 29,775 -4.76% 46.41%

Trading Volume (shares) (high in 1 year)

10,63,601 4,24,961 8,62,558 150.28% -50.73%

Trading Volume (shares) (low in 1 year)

1.00

3.00

1.00

-66.67% 200.00%

Ratio - High/low trading volume 10,63,601 1,41,653 8,62,558 650.85% -83.58%

Ratio - High/average trading volume

25.62 9.75 28.97 162.79% -66.35%

Source - Money Control




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TABLE 6 (A): OWNERSHIP & MANAGEMENT RISKS

Shareholding Dec' 2015 Dec' 2014 Dec' 2013 Comments

Promoter shareholding 34.07% 37.81% 37.81% The Company issued 8.00 Crore equity

shares of face value ` 1 to Promoter

and Non-promoter under preferential

issue of shares during the period from

Dec' 2014 to Dec' 2015. The promoter

shareholding decreased from 37.81% to

34.07% as on Dec' 2014 to Dec' 2015

due Preferential issue. The promoters

have pledged 37.81% of their

shareholding.

Public - Institutional shareholding

0.41% 0.53% 0.62%

Public - Others shareholding 65.52% 61.66% 61.57%

Non Promoter Non Public Shareholding

- - -

TABLE 6 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters None

Preferential issue to promoters 8.00 Crore Equity shares have been allotted to Promoter and non-promoter

category. Preferential issue to others

GDRs issued by the Company The Company did not issue and GDRs for last 3 years

Issue of ESOPs/Issue of shares other than Preferential allotment

The Company does not have any ESOP Scheme.

Source - Annual Report




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Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the

future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over

a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets




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Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover

Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a

Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp



7 | P A G E



Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated

by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-share stock price by

the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year


https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



8 | P A G E



DISCLAIMER

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New Raj Rayon Industries Ltd - NSE · 2016. 6. 8. · Raj Rayon Industries Ltd was incorporated on...

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