Slide 1

Slide 2 A Profile of SPINCO THE PONDICHERRY CO-OPERATIVE SPINNING MILLS LIMITED THIRUBHUVANAI, PUDUCHERRY (AN ISO 9001-2008 UNIT) Slide 3 site plan of spinco Slide 4 SPINCO A registered co-operative spinning mill under Pondicherry Co-operative Societies Act 1972 on 28-12-1979 Established in 1984 Area of operation shall be confined to entire Puducherry region Product : 100 % Cotton yarn from 30s to 80s count Total capacity : 35,160 spindles Total Employees Strength : 671 The prime objective of the mills is production and sale of yarn to the Pondicherry State Weavers Coop. Society and others The first and last election was held on 20-9-2003 The last General Body Meeting was held on 6-10-2010 Slide 5 Membership (As on 31-3-2012) PARTICULAR S MEMBERSHIPNO. OF MEMBER SHARE CAPITAL (Rs. In Lakhs) A Handloom Weavers Coop. Societies 13 4.45 BOther coop. Societies 534.88 CIndividuals6142.30 DGovernment of Puducherry 13859.70 Total 6813871.33 Slide 6 ORGANISATION CHART ADMINISTRATOR Administrator MANAGING DIRECTOR MANAGER (FINANCE & BUSINESS) ADMINISTRATIVE MANAGER FACTORY MANAGER 1) Office Establishment 2) Mill Operatives 3) Stationery 4) Statutory 5) Despatch 6) Security 7) Vehicle Section 8) Time Office 9) Canteen 10) Quarters 1) Marketing 2) Purchase 3) Accounts & Audit 1) Production & Man Management 2) Machinery Maintenance 3) Electrical Department 4) Stores & Material Management 5) Laboratory 6) Labour welfare 7) Requisition for Raw Material Slide 7 Categories of Administrative & Technical Staff Sl. No. Name of the PostsApproved strengt h Existing strength Administrative Staff 1Managing Director11 (Additional Duty) 2Administrative manager11 3Manager (Finance & Business)11 (Additional Duty) 4Office Superintendent-Gr-I11 5Office Superintendent-Gr-II44 6Senior Assistant88 7Junior Assistant1110 8Driver-Gr-I22 9Driver-Gr-II22 10Peon42 Technical Staff 1Factory Manager1Vacant 2Deputy Factory Manager22 3Executive Engineer11 4Assistant Manager22 5Production Officer33 6Shift Supervisor44 7Lab Assistant44 8Lab Attender32 9Godown Assistant11 TOTAL5651 Slide 8 Sl. No. Name of the CategoryStrength 1 Machine Operatives 498 2Maintenance Operatives53 3Jobbers 22 4Fitters 14 5Electricians 8 1Non-Operatives 25 TOTAL 620 CATEGORIES OF MILL OPERATIVES Slide 9 WELFARE MEASURES In addition to statutory contribution to EPF, ESI and GRATUITY in respect of all employees of the mills, the management of the mills has been providing following additional welfare measures to the employees. 1. Food allowance @ Rs.11/- per day is calculated and paid to all along with wages/salary. This subsidized canteen facility is provided to all employee of the mills. Annual expenditure under this head is around Rs.40 lakhs 2. Free Uniform, kerchief, chapels and stitching charges Approximate Annual expenditure under this head is Rs.15 lakhs 3. Medical allowance is given to the employees who are not covered under ESI (50% of (basic Pay + DA)) as on 1st January of each year is granted as fixed medical allowance for that year and equally divided into 12 months and paid along with pay in each month Approximate Annual expenditure under this head is Rs.2.6 lakhs. 4. Half Kg. sweet pockets are given to all employees three times in a year Annual expenditure Rs.1.25 lakhs. 5. Group Insurance (EDLIS) Scheme is extended to all employees of the mills Annual expenditure is Rs.2.00 lakhs. 6. Workers are provided with two sets of normal uniform and three sets of in plant uniform. 7. Marriage Gift of Rs.2000/- is granted on the occasion of workers marriage and workers daughter marriage and Rs.5000 is granted as marriage advance recoverable in 50 installments. 8. Jaggery 250 grams per month is given to all the employees of the mills Annual expenditure under this head is Rs.0.75 lakhs Approximate total welfare expenditure of the is Rs.75 lakhs. 9. Bonus is paid @ 44% subject to a maximum of Rs.11,000/- and exgratia of Rs.3,500/- Slide 10 DETAILS OF SHARE CAPITAL AND GRANT IN AID RECEIVED FROM GOVERNMENT AND UTILISATION Authorised Share Capital is 5000 lakhs: SL NO Financial Year Amount of Share Capital TotalGrant in Aid Receive d Purpose of Utilization 1.1980-8100.10--For commencement of society 2.1981-8263.0063.10--For Administration purpose 3.1982-83222.00285.10--Purchase of machinery and Working Capital 4.1983-8465.90351.00--Purchase of machinery and Working Capital 5.1984-8520.00371.00--Purchase of machinery and Working Capital 6.1985-86---371.00-- 7.1986-87--371.00-- 8.1987-88--371.00-- 9.1988-89--371.00-- 10.1989-90--371.00-- 11.1990-91--371.00-- 12.1991-92--371.00-- 13.1992-93--371.00-- 14.1993-94--371.00-- 15.1994-9528.00399.00--For business activities -- 2 -- Slide 11 16.1995-96125.50524.50--Business expansion 17.1996-9775.00599.50--Business expansion 18.1997-98--599.50-- 19.1998-99--599.50-- 20.1999-200075.00674.50--Working Capital 21.2000-200137.50712.00--Working Capital 22.2001-2002--712.00127.50Working Capital 23.2002-2003100.00812.00--Wage revision with effect from 01-01-2001 arrear wages purpose 24.2003-200475.00887.00--Working Capital 25.2004-200575.00962.0050.00Working Capital 26.2005-2006175.001137.0004.00Working Capital 27.2006-2007175.001312.00--Working Capital 28.2007-2008175.00 220.00 1707.00--Working Capital Re payment of NCDC Loan with interest 29.2008-2009186.73 23.97 1917.70--Re payment of NCDC Loan with interest Working Capital 30.2009-2010385.002302.70--Re payment of NCDC Loan with interest 31.2010-2011802.003104.70--Re payment of NCDC Loan with interest 32.2011-2012415.003519.70--Re payment of NCDC Loan with interest 32.2011-2012340.003859.70--Re payment of NCDC Loan with interest Slide 12 PRESENT WORKING CONDITION OF SPINCO Sl. No. Component2005-062006-072007-082008-092009-10 After Modernizati on 2010-11 After Modernization 2011-12 After Modernisation 1Raw material1484.571274.301459.0941494.041773.902401.311789.82 2Raw material consumed29.30 lac kg. 24.65 lac kg. 24.50 lac kg. 20.48 lac kg. 24.89 lac kg. 21.99 lac kg. 14.81 lac kg 2Salaries & Wages667.72661.29625.66663.84759.06697.13728.95 3Power350.66309.32308.31258.24326.62328.08211.61 4Stores including packing material & other cost 310.97310.12383.16377.18414.28457.37328.73 5Sales turnover2652.162327.762465.202282.563127.823390.342463.01 Yarn sales in Kgs.2358815195364822148391808047217476317610801445064 6Gross profit before interest, depreciation and tax - 92.00- 65.03-352.92- 626.29- 219.47- 158.20-9807.57 7Interest paid79.18122.84177.35270.34278.60260.43383.95 8Depreciation91.2089.2688.28113.42159.88150.13130.00 9Other income25.9846.81142.16107.68119.3413.875.16 10Net Profit / Loss-236.40- 230.32- 479.58 * -902.37 - 538.61- 554.89-1435.36 11Accumulated Loss1611.16- 1841.48- 2321.07- 3223.44- 3762.05- 4316.94- 5752.30 Abnormal Power Cut and Modernization carried out in phased manner. Some of the machines were dismantled for civil work hence loss of production caused Interest loss suffered during the modernization year 2008-09 on the borrowed funds from NCDC & PSC Bank is Rs.270.34 lakhs and lower utilization In 2011-12, loss due to want of working capital Mill declared lay-off frequently and frequent market fluctuation. Rs in lakhs Slide 13 PERFORMANCE OF THE MILLS COMPARED WITH SITRA STANDARD AS ON 31-3- 2011 Sl. No DescriptionSPINCOSITRA standard Rs. in lakhs Percentage to sales 1Yarn Sales3390.34100 2Wages & Salary697.1320.567.0 3Raw material cost2401.3170.8257.0 4Electricity consumption charges328.089.6815.5 5Stores (Spares & Packing material) and Repaid and maintenance 76.192.254.0 6Interest and Depreciation410.5612.119.0 7Administrative expenses381.1811.245.0 Total126.6697.5 Profit Margin(-) 26.66(+) 2.5 Slide 14 FINANCIAL RESULTS Performance Chart Production in Lakh Kgs. per year Sales Value in Lakh Rupees Slide 15 FINANCIAL RESULTS DETAILS OF DUES PAYABLE AS ON 31-3-2012 Sl.No.D E S C R I P T I O NAmount Rs. in lakhs 1Cotton payments741.79 2PSC Bank M.T. Loan & Cash Credit Loan755.53 3Gratuity amount payable to LIC (pending from 2005)716.00 4Electricity charges400.72 5EPF & ESI Mills contribution and LIC recovery payable139.54 6Yarn brokerage45.53 7Marketing Society - Fixed Deposit42.44 8Machinery Stores & Spares payment payable5.35 9Others27.31 TOTAL2874.21 Slide 16 MONTHLY COST ANALYSIS Sl. No. DESCRIPTION Targeted 40s converted production 9500 Kgs. Expected production 40s converted 8074 Kgs. 1Actual 44s count production 82326996.8 2Actual production per month 246960209902 3Raw material requirement per month 290541246944 4Cost of raw material per Kg. Rs.108.20 5Raw material cost per month Rs.3,14,36,555/-Rs.2,67,19,322/- 6Stores & Spares and packing material Rs. 9,72,405/-Rs. 8,26,875/- 7Salary and Wages + EPF & ESI Rs.1,06,43,957/-Rs. 97,43,957/- 8Others ( Brokerage, Canteen, Hank yarn obligation, Security payments and Establishment & Contingencies) Rs. 14,87,821/-Rs. 12,87,821/- 9P.S.C. Bank interestRs. 8,87,668/- 10Power Bill per monthRs. 42,00,000/-Rs. 35,00,000/- 11Total Expenditure (6+7+8+9+10)Rs.1,81,91,851/-Rs.1,62,46,321/- 12Total cost (5+11)Rs.4,96,28,406/-Rs.4,29,65,643/- 13Yarn rate per Kg.- Actual / SellingRs.194/- / 175/-Rs.197.60 / 175/- 14Total yarn sales valueRs.4,32,18,000/-Rs.3,67,50,000/- 15Other income By Waste salesRs. 17,28,720/-Rs.14,70,000/- 16TOTAL INCOME = (14 + 15)Rs.4,49,46,720/-Rs.3,82,20,000/- 17LOSS (16 12)(-) Rs.46,81,686/-(-) Rs.47,45,643/- Slide 17 Causes for working on Loss High Establishment Cost Low Productivity Under utilization of machines Market Fluctuations Slide 18 Causes for working on Loss ParticularsSITRA Norms Our Mill 2010-11 Excess Solution Establishment Cost on Sales value 7%20.50%13.50%Maximum utilization at 95% (subject to absenteeism of Mill Operatives) Increase the turnover Productivity HOK (Operative hours required to produce 100 Kgs. of 40s yarn) 15 Man Hrs. 29.0 Man Hrs. 14 Man Hrs. Adopting higher work assignment Raw Material cost57%70.82%13.82%Need of working capital to reduce cotton price Market fluctuation-- The textile sector has been passing through a difficult phase especially for the past 8 to 9 months. The unprecedented rise in the prices of cotton, without commensurate increase in the prices of yarn has put the entire sector in the distressed conditions. Slide 19 Performance Chart Profit / Loss Rupees in lakhs In 2001 wage revision was effected and in 2008 abnormal power cut prevails and interest loss suffered during this modernization year 2008-09 on the borrowed funds from NCDC & PSC Bank is Rs.295.76 lakhs and lower utilization due to absenteeism and in 2011-12, loss due to want of working capital Mill declared lay-off frequently And frequent market fluctuation. Slide 20 Performance comparison to the Industry Standards Based on Key Performance Indicators Standard Norms (SITRA) Industria l average Before modernizat ion Our Mills performanc e After modern ization 2010-11 Reason 1.Ring Frame Utilization % 9592.6085.0070.00Due to frequent labour unrest demanding wage revision and regular abnormal absenteeism 2. Production - Grams/Spindles / 8hrs / Adj40s 10595.6088.5093.70Still 20% old machine is working - Production 80 grms due to less spindle speed 3. HOK (Operatives hours required to produce 100 Kgs. of 40s yarn) 1519.8029.00 Existing work load arrived during 2006 4. OHS (Operative required for 1000 spindles) 1.962.323.40 Existing work load arrived during 2006 5. Absenteeism % 7.009.7420.00 Health problem, Age factor, some other seasonal work 6. Salary and wages % on manufacturing cost 7.0012.0028.7020.60Less production, turn over and less work assignment Slide 21 PROPOSAL OR REVIVALS OF MILLS/ECONOMIALLY VIABLE FUNCTION To achieve higher productivity 105 g/ spindle/8 hours In modernized Ring Frames 105 g to be achieved (18144 spindles) In the machines commissioned in 1994 95 g (10080 spindles) In the machines commissioned in 1984 80 g (to be replaced 7000 spindles) To improve machine utilization at 95% levelAction to be taken to reduce the absenteeism after introduction of VRS. By engaging Badhlie system on contract basis Optimum Labour Productivity by engaging 392 Operatives per day New higher work assignment VRS package Settlement of Pending Wage revision between trade union and management Higher work assignment by implementing SITRA recommendations Implementing V.R.S. packages surplus 106 persons identified by SITRA To reduce raw material cost by cash purchase (maintaining minimum 15 days stock level Working capital required minimum of Rs.10 crores for purchasing of raw material on cash and carry basis Excess land available may be utilized for some other Govt. purpose By means long term leas to Govt. Department and Corporation etc. Adopt Action PlanInstead of 440 workers, 371 workers to be engaged in line with revised work assignment with adopting production linked wages at par with production Slide 22 Process Flow with workers complimentary with SITRA standard Operatives required per day Process flowSPINCO (2006 settlement SITRAExcess Cotton bales-- Mixing7 *10( - ) 3 Bale Plucker Blow Room33-- Carding99-- Drawing/Comber15 -- Speed Frame3627(+) 9 Spinning210120(+) 90 Cone Winding75 *84( - ) 9 Packing8 *10( - ) 2 Non productivity7565(+) 10 Total438343(+) 95 * According to production out put in put Man engagement change Slide 23 PROJECT IN PIPELINE Modernization of SPINCO Loan applied from M/s. NCDC for modernization programme Rs.32.13 Crores Details of the project cost (Rs. In Lakhs) Civil Work- 20.00 Plant and Machinery-2616.00 Misc. Fixed Assets- 114.00 Provision for Contingency- 130.00 Margin Money for W.C.- 283.00 ---------- Total3213.00 ----------- Slide 24 Pattern of loan sanctioned by NCDC to Govt. of Puducherry for assisting SPINCO Pattern of loan assistance sanctioned by NCDC Rs.25.63 Crores to Govt. of Puducherry for modernization of SPINCO As against loan applied for Rs.32.13 Crores, (Rs.in Lakhs) By way of Term Loan - 1180.00 By way of Investment loan- 885.00 By way of subsidy- 497.63 ---------------- Total - 2562.63 Society contribution- 387.37 -------------- Approved Total Project Cost 2950.00 -------------- NCDC sanctioned amount so far (for modernisation) 2225.00 Working Capital 700.00 Yet to be sanctioned from NCDC: Investment Loan (for modernisation) 337.00 Working Capital Loan 300.00 Slide 25 Terms of loan from NCDC Term loan is repayable in 8 years with moratorium of 2 years Investment loan repayable in 8 years without moratorium Rate of interest.. 8.5 % (with effect from 12-9-2006) For delayed service of installment.. (effective rate + 1%) Penal rate of interest at 2.5% above the normal rate for default Current interest rate 10.75% (w.e.f. June 2007) Slide 26 DETAILS OF LOAN PSC Bank Loans: Medium Term Loan.. Rs.5.00 Crores @ 13% interest Cash Credit Loan.. Rs.2.00 Crores @ 13% interest ----------- Total.. Rs.7.00 Crores ---------- NCDC Loans: (Rs. in Crores) Name of Loan Amount availed Remitted Balance Working Capital Loan 7.00 7.00 -- Investment Loan 8.85 5.52 3.33 Term Loan 8.42 3.29 5.13 Subsidy 4.98 -- -- Interest -- -- -- --------- -------- -------- Total 29.25 15.81 8.46 --------- -------- -------- Slide 27 ACHIEVEMENTS AND CREDIT PAST PERFORMANCE AWARDS AWARDAWARDED BYYEAR OF AWARD Best performance shieldThe Government of Puducherry1987-88 Outstanding performance in raising the net profitAIFCOSPIN, Mumbai1989-90 Outstanding performance in raising the machine productivityAIFCOSPIN, Mumbai1989-90 Best performance awarded in raising the net profitAIFCOSPIN, Mumbai1989-90 Outstanding performance in raising the Profitability NetAIFCOSPIN, Mumbai1990-91 Outstanding performance in raising the Profitability cash Gain AIFCOSPIN, Mumbai1990-91 Outstanding performance in raising the Machine ProductivityAIFCOSPIN, Mumbai1990-91 Outstanding performance in raising the Labour ProductivityAIFCOSPIN, Mumbai1990-91 Best Work Cultural AwardAIFCOSPIN, Mumbai1993-94 Energy Conservation AwardGovt. of Puducherry2008 Energy Conservation AwardGovt. of Puducherry2009 Slide 28 CLASSIFICATION OF SOCIETIES 2005-2006 } 2006-2007 } 2007-2008 } B Class 2008-2009 } FAM 2009-2010 Under progress FAM 2010-2011 Auditor appointed Slide 29 BEFORE MODERNAIZATION AFTER MODERNIZATION Slide 30 Slide 31 Slide 32 MODERNIZED Slide 33 Slide 34 Slide 35 Slide 36 Address to Contact: The Pondicherry Coop. Spinning Mills Ltd., Puducherry-Villupuram National High Way, Thirubuvanai, PUDUCHERRY 605 102. Fax:.. 0413 2640156 Phone:.. 0413 2640146 / 2640166 Slide 37 Thank You Madam