MIRA INFORM REPORT

Report Date :

12^TH June 2006

IDENTIFICATION DETAILS

Name :	ARTHANARI LOOM CENTRE (TEXTILE) PRIVATE LIMITED
Registered Office :	78 Sababathi Street Kalarampaty Erumapalayam PO 636015, Salem-636015, Tamilnadu
Country :	India
Financials (as on) :	31.03.2004
Date of Incorporation :	25.10.1991
Com. Reg. No.:	18-3485
CIN No.: [Company Identification No.]	U1811TZ1991PTC003485
TAN No.: [Tax Deduction & Collection Account No.]	CHEA08429B
Legal Form :	A Private limited liability company
Line of Business :	Manufacturing and sale of Cotton Fabric

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 175000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Directors are reported as experienced respectable and resourceful businessman. Their trade relations are fair. Payments are correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions

LOCATIONS

Registered Office/ Head Office/ Factory :	78 Sababathi Street Kalarampaty Erumapalayam PO 636015, Salem-636015, Tamilnadu
Tel. No.:	91-427-2469951
Fax No.:	91-427-4265896
E-Mail :	accounts@alctex.com
Website:	http://www.alctex.com

DIRECTORS

Name :	Mr. A. Alagararasan
Designation :	Managing Director
Address :	80-B, Sababarthy Street, Kalarampatty, Salem-636015, Tamilnadu
Date of Birth/Age :	15.06.1958
Date of Appointment :	25.10.1991
Name :	Mrs. A. Pushpa
Designation :	Director
Address :	80-B, Sababarthy Street, Kalarampatty, Salem-636015, Tamilnadu
Date of Birth/Age :	13.06.1968
Date of Appointment :	25.10.1991
Name :	Mr. M. Arthanari
Designation :	Director
Address :	1-51, Thoppu Street, Nangavalli, Mettur TR, Salem-636454, Tamilnadu
Date of Birth/Age :	10.03.1924
Date of Appointment :	25.10.1991

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Mr. M. Arthanari	710
Mr. A. Alagararasan	171800
Mrs. A. Pushpa	78430
Mr. R Panneerselvam	200
Mr. A Adhithya (Minor)	5300
Mr. A Aswathasree (Minor)	200

BUSINESS DETAILS

Line of Business :	Manufacturing and sale of Cotton Fabric
Products :	Cotton Fabric

GENERAL INFORMATION

Suppliers:

¶ Jayam Chemicals Traders

¶ Avisun Organics (P)Ltd

¶ Shiba Traders

¶ R K Chidanbaram & Sons

Customers:

¶ L S Mills Ltd

¶ Dinesh Fabrics

¶ Vishnu Dying & Printing Works

¶ Nahar International Ltd

No. of Employees :

600

Bankers :

¶ Syndicate Bank Bills Margin

¶ Syndicate Bank – FX Bills Margin

Facilities :

Secured loans:	31.03.2004	31.03.2003
Syndicate bank	36.260	-
Unsecured loans:
From Directors	17.509	23.236
From Share Holders : A Adthiya	0.061	0.061
Total	53.830	23.297

Banking Relations :	Good
Auditors :	R Raghunathan Chartered Accountant A-2, Rajaram Nagar, Salem-636007, Tamilnadu
Tel. No.:	91-427-2413303/ 2412281

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1500000	Equity shares	Rs.100/-	Rs. 150.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
256640	Equity shares	Rs.100/-	Rs. 25.664 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital	25.664	5.499
2] Reserves & Surplus	21.236	17.692
NETWORTH	46.900	23.191
LOAN FUNDS
1] Secured Loans	36.260	-
2] Unsecured Loans	17.571	23.297
TOTAL BORROWING	53.831	23.297
DEFERRED TAX LIABILITIES	8.906	7.885
TOTAL	109.637	54.374
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	90.446	56.302
Capital work-in-progress
INVESTMENT	-	-
DEFERREX TAX ASSETS
CURRENT ASSETS, LOANS & ADVANCES
Inventories	91.974	18.044
Debtors	86.630	49.566
Deposits	2.812	2.170
Cash at bank	0.488	1.637
Cash on hand	0.202	0.037
Prepaid expenses	0.192	0.113
Advances	0.584	0.516
Total Current Assets	182.885	72.087
Less : CURRENT LIABILITIES & PROVISIONS
Current liabilities	90.664	50.774
Provisions	73.010	23.241
Total Current Liabilities	163.674	74.015
Net Current Assets	19.190	(1.928)
MISCELLANEOUS EXPENSES	-	-
TOTAL	109.637	54.374

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2004	31.03.2003
Sales Turnover [including other income]	329.511	164.009
Profit/(Loss) Before Tax	6.237	5.292
Provision for Taxation	2.437	0.700
Profit/(Loss) After Tax	3.800	4.592

KEY RATIOS

PARTICULARS		31.03.2004	31.03.2003
PAT / Total Income	(%)	1.15	2.79
Net Profit Margin (PBT/Sales)	(%)	1.89	3.22
Return on Total Assets (PBT/Total Assets}	(%)	2.28	4.12
Return on Investment (ROI) (PBT/Networth)		4.63	4.19
Debt Equity Ratio (Total Liability/Networth)		1.11	0.97
Current Ratio (Current Asset/Current Liability)		13.37	0.97

LOCAL AGENCY FURTHER INFORMATION

Dividend:

Your Directors recommended a dividend of 1% on the paid up share capital of 256640 Equity shares of Rs. 100/- absorbing a sum of Rs. 25.664 millions. The dividend is on the entire paid up share capital including 201650 shares allotted during the course of the year on a non pro rata basis. The dividend outflow in toto is slightly higher at Rs. 0.256 millions as compared to Rs. 0.165 millions

Increase in Share capital:

During the year 201650 equity shares of Rs. 100 each were allotted to the existing shareholder at par. The directors thank them. This Inflow of cash has augmented the long term funds of the company in the years to come. The shares have been allotted ranking pari passu with the existing shares

The shares have been issued at par even though the shares price as per standared share valuation techniques was more. This was done because:

1. The allotment have been made to the existing shareholder who have stood by the company right from inception including turbulent times
2. In the competitive business environment, long tetrm funds are required to meet the challenging period ahead

Operations:

During the year the company has substantially increased its sale from Rs. 163.180 millions to Rs. 322.180 millions. This was despite the steep increase in prices of domestic cotton, manufacturing expenses and administrative expenses and administrative expenses, besides an increase provision of around Rs. 1.65 millions towards deprciation. The cash profits are higher at Rs. 10.92 millions as compared to Rs. 8.33 millions earlier year. The company is in the accrue after a few years, barring unforeseen circumstances

Fixed Assets:

¶ Land

¶ Building

¶ Plant & Machinery

¶ Furniture & Fixture

¶ Vehicle

¶ Effuent Treatment Plant – I

¶ Effuent Treatment Plant – II

¶ Capital Work in Progres

Name of the Company: Arthanari Loom Centre (Textile) Private Limited

Presented by: Mr. A. Alagararasan, Managing Director of the company

1. Date and description of instrument creating the change

Mortgage by deposit of the Title deeds (UREM) by the company on 25.2.97 in favour of the syndicate bank OVERSEAS Branch 37 White Road chennai-14 in the Syndicate Bank offered for the loan of Rs. 41.000 millions to M/s. Arthanari Looms centre Salem.

Deed of guarantee Dt. 25.2.97 offering guarantee for Rs. 41.000 millions

2. Amount secured by the charge/amount owing on the securities of charge

Rs. 41.000 millions

3. Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

Land and Building situated at 2-235, Earikarai Road, Karampatty, (p.o.) Salem-15 consisting of the survey nos. 219/2, 216/3, 220/2, 220

4. Gist of the terms and conditions and extent and operation of the charge.

Gaurantee forrepayment of the following credit facilities sanctioned to M/s. Arthanari Loom centre, 78, Sabathy Kadu, Kalarampatty, Erumpalayam, post, Salem-15

Nature of facility

Amount (Millions)

Rate of interest

PLC

6.000

13%

FUBP/LC

35.000

13%

FDBP/LC

7.500

(Sub limit)

5. Name and Address and description of the person entitled to the charge.

Syndicate Bank,

Overseas Branch,

37, White Road, Chennai - 14

6. Date and brief description of instrument modifying the charge

Letter evidencing continuation of equitable mortgage dt. 24.08.200

Deed of hypothecation of machinery dt. 24.08.2000

7. Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

Particulars	Existing Limit (Millions)	Modificed Limit (Millions)
Guarantee for loan to M/s. Arthanari Loom Centre, Salem -15
PCL	21.200	21.200
FDBP/FUBP/LC	45.000	45.000
Bank Guarantee	7.000	7.000
Import LC	32.000	32.000
OSL	38.500	38.500
Demand Loan	4.300	4.300
Facility granted to the company:
DATBD/LC	20.000	20.000
ODC	-	1.000
Total	168.000	169.000

Name of the Company Arthanari Loom Centre (Textile) Private Limited

Presented by Mr. ANZ GRINDLAYS BANK PLC’

No. 1 Haddows Road, Madras 600006

Date and description of instrument creating the change	Loan Agreement dated 15.10.96
Amount secured by the charge/amount owing on the securities of charge	Loan Amount Rs. 1.900 millions
Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Telco Benze
Gist of the terms and conditions and extent and operation of the charge.	Loan Agreement Date of Opening of Account: 15.10.96 Tenure: 24 months First Payment due: 15.310.96 Last Payment due: 1.8.98
Name and Address and description of the person entitled to the charge.	ANZ GRINDLAYS BANK PLC’ No. 1 Haddows Road, Madras 600006
Date and brief description of instrument modifying the charge	NA
Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	NA

Name of the Company: Arthanari Loom Centre (Textile) Private Limited

Presented by: Mr. A. Alagararasan, Managing Director of the company

Date and description of instrument creating the change	Vehicle Loan Cum Hypothecation Agreement dated 5.4.2004
Amount secured by the charge/amount owing on the securities of charge	Rs. 0.54 millions
Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Hypothecation of Brand New Truck Eicher 10.70 Costing Rs. 0.634 millions bearing Regn No. 30 F 0722
Gist of the terms and conditions and extent and operation of the charge.	The present Hypothecation loan of Rs. 0.54 millions shall be repayable in 23 equated monthly instalments of Rs. 0.025 each commencing from 1.5.04. The rate of interest shall be 7.50% p. a.
Name and Address and description of the person entitled to the charge.	ICICI Bank Limited Omalur Road Salem
Date and brief description of instrument modifying the charge	NA
Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	NA

Name of the Company: Arthanari Loom Centre (Textile) Private Limited

Presented by: Mr. A. Alagararasan, Managing Director of the company

1. Date and description of instrument creating the change

Mortgage by deposit of the Title deeds (UREM) by the company on 25.2.97 in favour of the syndicate bank OVERSEAS Branch 37 White Road chennai-14 in the Syndicate Bank offered for the loan of Rs. 41.000 millions to M/s. Arthanari Looms centre Salem.

Deed of guarantee Dt. 25.2.97 offering guarantee for Rs. 41.000 millions

2. Amount secured by the charge/amount owing on the securities of charge

Rs. 41.000 millions

3. Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

Land and Building situated at 2-235, Earikarai Road, Karampatty, (p.o.) Salem-15 consisting of the survey nos. 219/2, 216/3, 220/2, 220

4. Gist of the terms and conditions and extent and operation of the charge.

Gaurantee forrepayment of the following credit facilities sanctioned to M/s. Arthanari Loom centre, 78, Sabathy Kadu, Kalarampatty, Erumpalayam, post, Salem-15

Nature of facility

Amount (Millions)

Rate of interest

PLC

6.000

13%

FUBP/LC

35.000

13%

FDBP/LC

7.500

(Sub limit)

5. Name and Address and description of the person entitled to the charge.

Syndicate Bank,

Overseas Branch,

37, White Road, Chennai - 14

6. Date and brief description of instrument modifying the charge

Letter evidencing continuation of equitable mortgage dt. 24.08.200

Deed of hypothecation of machinery dt. 29.08.2000

7. Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

Particulars	Existing Limit (Millions)	Modificed Limit (Millions)
Guarantee for loan to M/s. Arthanari Loom Centre, Salem -15
PCL	21.200	21.200
FDBP/FUBP/LC	45.000	55.000
Bank Guarantee	7.000	12.000
Import LC	32.000	32.000
OSL	38.500	38.500
Demand Loan	4.300	6.800
Facility granted to the company:
DATBD/LC	20.000	20.000
ODC	1.000	1.000
Total	169.000	186.500

Name of the Company: Arthanari Loom Centre (Textile) Private Limited

Presented by: Mr. A. Alagararasan, Managing Director of the company

Date and description of instrument creating the change	Mortgage by deposit of the Title deeds (UREM) by the company on 25.2.97 in favour of the syndicate bank OVERSEAS Branch 37 White Road chennai-14 in the Syndicate Bank offered for the loan of Rs. 41.000 millions to M/s. Arthanari Looms centre Salem. Deed of guarantee Dt. 25.2.97 offering guarantee for Rs. 41.000 millions
Amount secured by the charge/amount owing on the securities of charge	Rs. 41.000 millions
Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Land and Building situated at 2-235, Earikarai Road, Karampatty, (p.o.) Salem-15 consisting of the survey nos. 219/2, 216/3, 220/2, 220
Gist of the terms and conditions and extent and operation of the charge.	Gaurantee forrepayment of the following credit facilities sanctioned to M/s. Arthanari Loom centre, 78, Sabathy Kadu, Kalarampatty, Erumpalayam, post, Salem-15
	Nature of facility	Amount (Millions)	Rate of interest
	PLC	6.000	13%
	FUBP/LC	35.000	13%
	FDBP/LC	7.500	(Sub limit)
Name and Address and description of the person entitled to the charge.	Syndicate Bank, Overseas Branch, 37, White Road, Chennai - 14
Date and brief description of instrument modifying the charge	Composite Hypothecation agreement dt. 15.10.2002 Agreement for documentary bills disconted dt. 15.10.2002
Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Removal for company for DATBD/LC-Rs. 20.000 millions & ODC Rs. 1.000 millions

Name of the Company: Arthanari Loom Centre (Textile) Private Limited

Presented by: Mr. A. Alagararasan, Managing Director of the company

1. Date and description of instrument creating the change

Mortgage by deposit of the Title deeds (UREM) by the company on 25.2.97 in favour of the syndicate bank OVERSEAS Branch 37 White Road chennai-14 in the Syndicate Bank offered for the loan of Rs. 41.000 millions to M/s. Arthanari Looms centre Salem.

Deed of guarantee Dt. 25.2.97 offering guarantee for Rs. 41.000 millions

2. Amount secured by the charge/amount owing on the securities of charge

Rs. 41.000 millions

3. Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

Land and Building situated at 2-235, Earikarai Road, Karampatty, (p.o.) Salem-15 consisting of the survey nos. 219/2, 216/3, 220/2, 220

4. Gist of the terms and conditions and extent and operation of the charge.

Gaurantee forrepayment of the following credit facilities sanctioned to M/s. Arthanari Loom centre, 78, Sabathy Kadu, Kalarampatty, Erumpalayam, post, Salem-15

Nature of facility

Amount (Millions)

Rate of interest

PLC

6.000

13%

FUBP/LC

35.000

13%

FDBP/LC

7.500

(Sub limit)

5. Name and Address and description of the person entitled to the charge.

Syndicate Bank,

Overseas Branch,

37, White Road, Chennai - 14

6. Date and brief description of instrument modifying the charge

¶ Composite Hypothecation Agreement dated 1.3.2005

¶ OMNI Bus Counter Guarantee dated 1.3.2005

¶ Comprehensive Pre Post shipment Agreement dated 1.3.2005

¶ Extension of Equitable Mortgage by redeposit of title deeds on 1.3.2005

7. Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

By the documents mentioned in the column no. 6 the terms and condition remained unaltered. The existing securities are also offered for the new limits. The overall limits decreased from Rs. 402.330 millions to Rs. 251.500 millions as detailed hereunder

Credit Facility	Existing limits (millions)	Revised limit (millions)	Rate of interest w.e.f. 1.3.2005	Margin
Guarantee for loan to M/s. Arthanari Loom Centre, Salem -15
PCL	50.000	-
FDBP/FUBP/LC	90.000	-
Bank Guarantee	20.000	-
Import LC	2.000	-
OSL	4.830	-
OSL (fresh)	6.500	-
ILC/FLC	17.000	-
FUND BASED
SODH/PLC	35.000	35.000	SODH/PLR PCL-PLR-3.50%	25%
FDB/PUBP/LC/ SUB LIMIT/ FUBD/LC/ADBC	40.000 (10.000) (5.000)	40.000 (10.000) (5.000)	PLR-3.50% upto 90 days PLR- 0.05% above 90 days	NIL
DATBD/LC	25.000	55.000	10% Fixed	NIL
CDD/ (SUB LIMIT)	--	(2.500)	PLR + 1%	NIL
TERM LOAN	80.000	80.000	--	NIL
SUB LIMIT	(72.000)	(72.000)	--	NIL
TERM LOAN	--	27.000	PLR	25%
SUB LIMIT	--	27.000	As per circular	10%
NON FUND BASED
INLAND LC	15.000	15.000	As per circular	NIL
LC (SIGHT)	2.000	2.000	As per circular	NIL
BC	2.000	2.000	As per circular	10%
Total	402.330	251.500

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.45.88
UK Pound	1	Rs.84.61
Euro	1	Rs.58.01

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO
--OTHER ADVERSE INFORMATION	YES/NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO
--LISTED	YES/NO
--OTHER MERIT FACTORS	YES/NO
TOTAL		54

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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

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