MIRA INFORM REPORT

Report Date :

19^th June, 2006.

IDENTIFICATION DETAILS

Name :	ARVIND MILLS LIMITED
Registered Office :	Railwaypura Post, Naroda Road, Ahmedabad – 380 025, Gujarat, India.
Country:	India
Financials (as on):	31.03.2005
Date of Incorporation :	01.06.1931
Com. Reg. No.:	04-93
CIN No.: [Company Identification No.]	L17119GJ1931PLC000093
Legal Form :	It is a Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers and Marketers of Cloth (including fents, rags, etc.), Yarn, Waste, EPABX Lines and Garments].

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 56000000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is the flagship company of the Lalbhai Group manufacturing and marketing cloth, Grey Knitted Fabrics and Yarn. Though there was a marginal decrease in its turnover and profit during the financial year 2003-04 as compared to the previous year, the performance of the company has been satisfactory. Directors are respectable and renowned industrialists. Trade relations are fair. Payments are correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Railwaypura Post, Naroda Road, Ahmedabad – 380 025, Gujarat, India.
Tel. No.:	91-79-22121408 / 22203030 / 22200206
Fax No.:	91-79-22124314 / 22120267/ 22371396 / 22372342 / 22379184 / 22201608
E-Mail :	india@arvindmills.com
Website :	http://www.arvindmills.com
Factory :	v Santej, Taluka Kalol, District Mehsana - 382 721, Gujarat, India v Naroda Road, Ahmedabad - 380 025, Gujarat, India (Two Units) § Tel. No. 91-79-2212 1408/2377 002 § Fax No. 91-79-2212 4314/2212 0267/2237 1396/2237 2342/2237 9184 v Khatrej, Taluka Kalol, District Mehsana - 382 721, Gujarat, India v Khokhra, Memdabad, Ahmedabad - 380 008, Gujarat, India v Gut No. 172, Daravali Village, Taluka Mulshi, District Pune - 412 018, Maharashtra, India v 55, Whitefield Road, Mahadevapura Post, Bangalore - 560 048, Karnataka, India

DIRECTORS

Name:	Mr. Arvind N. Lalbhai
Designation:	Chairman
Age:	83 Years
Qualification:	Science Graduate
Date of Joining:	March, 1974
Other Directorship:	Ø Arvind Products Limited – Chairman Ø Atul Limited – Chairman Ø Birla VXL Limited – Director Ø JK Industries Limited – Director Ø Lokprakashan Limited – Director
Name:	Mr. Sanjay S. Lalbhai
Designation:	Managing Director
Age:	50 Years
Qualification:	Science Graduate, Master’s Degree in Business Management
Date of Joining:	March, 1977
Other Directorship:	Ø Arvind Clothing Limited – Director Ø Arvind Fashions Limited – Director Ø Arvind Brands Limited – Director Ø Arvind Products Limited – Director Ø Amtrex Hitachi Appliances Limited – Chairman Ø Anagram Wellington Asset Management Company Limited – Director Ø Anagram Housing Finance Limited – Director Ø H. K. Finechem Limited – Director Ø Amol Dicalit Limited – Director Ø Gujarat Infrastructure Limited – Director Ø Mahindra Gujarat Tractor Limited - Chairman
Name:	Mr. Jayesh K. Shah
Designation:	Director and Chief Financial Officer
Age:	43 years
Qualification:	Commerce Graduate and Chartered Accountant
Date of Joining:	01.07.1993
Name:	Mr. Rama Bijapurkar
Designation:	Director
Age:	45 years
Qualification:	B.Sc [Hons.] and MBA
Name:	Mr. Jaithirth Rao
Designation:	Director
Age:	51 years
Qualification:	Masters Degree form the University of Chicago and IIM- Ahmedabad
Name :	Mr. Deepak M Satwalekar
Designation :	Director
Name :	Mr. V. K. Pandit
Designation :	Nominated by IDBI
Name :	Mr. Balaji Swaminathan
Designation :	Nominated by ICICI Bank Limited
Name :	Mr. S. Sridhar
Designation :	Nominated by Export-Import Bank of India
Name :	Mr. C. K. Mehrotra
Designation :	Nominated by SBS

KEY EXECUTIVES

Name :	Mr. R. V. Bhimani
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
PROMOTERS HOLDING
Promoters
v Indian Promoters	70528685	33.68%
Sub Total:	70528685	33.68%
NON PROMOTERS HOLDING
Institutional Investors
a) Mutual Funds and Unit Trust of India	14282859	6.82%
b) Banks, Financial Institutions, Insurance Companies	18332941	8.76%
(Central /State Government Institutions/ Non Government Institutions)
c) Foreign Institutional Investors	53069769	25.35%
Sub Total:	85685569	40.92%
OTHERS:
Private Corporate Bodies	10653187	5.09%
Indian Public	40091783	19.15%
NRIs / OCBs	1267962	0.61%
Any Other (GDRs, Foreign Banks & IFCW)	1151255	0.55%
Sub Total:	53164187	25.39%
GRAND TOTAL:	209378441	100.00%

	No. of Shares Held	Percentage of share holding	Category
Aura Securities Private Limited	51015374	24.37%	Indian Promoters
LIC of India	12567243	6.00%	Banks, Fis, Insurance Companies
AML Employees Welfare Trust	10027624	4.79%	Indian Promoters
Fid Funds (Mauritius) Limited	9631685	4.60%	FIIs
The Prudential Assurance Company Limited	4503850	2.15%	FIIs
T Rowe Price International Inc A/C T Rowe Price New Asia Fund	4454970	2.13%	FIIs
SBIMF – Magnum Multicap Fund	4026397	1.92%	Mutual Fund
Atul Limited	3878315	1.85%	Indian Promoters
T Rowe Price International Inc A/C T Rowe Price International Inc. Emerging Markets Equity Trust	3572265	1.71%	FIIs
GMO Foreign Fund	3066205	1.46%	FIIs
T Rowe Price International Inc A/C T Rowe Price Emerging Markets Stock Fund	2666657	1.27%	FIIs
SBI MF Magnum Sector Fund Umbrella Contra	2216246	1.06%	Mutual Fund
Total Foreign Shareholding as on 31.03.2006		55488986	26.50%

BUSINESS DETAILS

Line of Business :

Manufacturers and Marketers of Cloth (including fents, rags, etc.), Yarn, Waste, EPABX Lines and Garments].

Products :

Item Code (ITC Code)	Product Description
520942.00	Denim
520832.00	Dyed Poplin/Shirting
520524.00	Cotton Yarn

PRODUCTION STATUS

The company's production capacity for the period ended 31^st March, 2005 was as under :

Particulars	Licensed Capacity	Installed Capacity
Spindles	222608	95344
Rotors	2784	7560
Stitching Machines	--	341
Knitting Machines	--	62
Looms	3878	1118
EPABX/RAX System Lines	NA	200000

GENERAL INFORMATION

No. of Employees :

Around 6000

Bankers :

˜ State Bank of Saurashtra, Ahmedabad, Gujarat

˜ State Bank of India, Ahmedabad, Gujarat

˜ Bank of Baroda, Ahmedabad, Gujarat

˜ UCO Bank, Ahmedabad, Gujarat

˜ State Bank of Patiala, Ahmedabad, Gujarat

˜ Credit Lyonnais, Ahmedabad, Gujarat

˜ Deutsche Bank, Ahmedabad, Gujarat

˜ HDFC Bank, Ahmedabad, Gujarat

˜ The Bank of Nova Scotia, Ahmedabad, Gujarat

˜ Standard Chartered Grindlays Bank, Ahmedabad, Gujarat

˜ Bank of America, Ahmedabad, Gujarat

˜ ICICI Bank Limited, Ahmedabad, Gujarat

Facilities :

Secured loans :-	As on 31.03.2005
From Banks
Cash Credit and other Facilities	5645.800
Term Loan	6238.800
Add : Funded Interest	536.200

From Financial Institutions and Others	2183.900
Add : Funded Interest & Other Financial Facilities	277.700
TOTAL	14882.400

Unsecured loans :-	As on 31.03.2005
Loan From
Banks	1814.600
Financial Institutions and Others	50.000
Add : Funded Interest & Other Financial Facilities	47.300
TOTAL	1911.900

Banking Relations :

Satisfactory

Auditors :

Sorab S. Engineer & Company

Chartered Accountants

Address :

381, Dr. D. Naoroji Road, Fort, Mumbai - 400 023, Maharashtra, India

Associates :

˜ Anup Engineering Limited

Engaged in manufacturing of equipments for chemical, petrochemical, pharmaceutical, fertiliser, dairy and allied industries.

˜ Lalbhai Realty Limited

--Engaged in real estate business

˜ Amtrex Appliances Limited

--Engaged in manufacturing of room air conditioner. It has technical collaboration with Hitachi, Japan.

˜ Arvind Intex Limited

˜ Anagram Finance Limited

˜ Arvind Polycot Limited

˜ Atul Products Limited

˜ Amtrex Appliances Limited

˜ Lalbhai Exports Limited

Subsidiaries :

˜ Asman Investments Limited

˜ Arvind Products Limited

˜ Arvind Brands Limited

˜ Arvind Clothing Limited

˜ Arvind Fashions Limited

˜ Asman Investments Limited

˜ Lifestyle Fabrics Limited

˜ Omnitalk Wireless Solutions Limited

˜ Syntel Telecom Limited

˜ Arvind Worldwide Inc. USA

˜ Arvind Worldwide (M) Inc., Mauritius

˜ Arvind Overseas (M) Limited, Mauritius

˜ Big Mill Lauffenmuhle GmbH, Germany

˜ Arvind Spinning Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
230000000	Equity Shares	Rs. 10/-	Rs. 2300.000 millions
9000000	Preference Shares	Rs.100/-	Rs. 900.000 millions
	Total		Rs. 3200.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
195378441	Equity Shares	Rs. 10/-	Rs. 1953.800 millions
6950000	6% Redeemable Cumulative Non-Convertible Preference Shares	Rs. 100/-	Rs. 660.200 millions
	Total		Rs. 2614.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital		2614.000	2648.700	2453.500
2] Reserves & Surplus		10197.500	9164.600	8195.200
NETWORTH		12811.500	11813.300	10648.700
LOAN FUNDS
1] Secured Loans		14912.300	11073.300	10938.800
2] Unsecured Loans		1911.900	2480.700	2463.200
TOTAL BORROWING		16824.200	13554.000	13402.000
TOTAL		29635.700	25367.300	24050.700
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		13816.900	14514.900	15620.300
Capital work-in-progress		1030.700	456.200	460.700
INVESTMENT		1530.200	1464.000	1324.500
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	5111.500	3803.800	3833.800
	Sundry Debtors	3191.100	2354.000	2343.500
	Cash & Bank Balances	128.700	127.000	123.300
	Loans & Advances	7585.000	4455.600	2841.900
Total Current Assets		16016.300	10740.400	9142.500
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2434.700	1734.900	2439.600
	Provisions	323.700	73.300	57.700
Total Current Liabilities		2758.400	1808.200	2497.300
Net Current Assets		13257.900	8932.200	6645.200
TOTAL		29635.700	25367.300	24050.700

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	17397.900	15647.700	16125.500
Profit/(Loss) Before Tax	1293.000	1013.000	1293.300
Provision for Taxation	19.500	45.500	0.000
Profit/(Loss) After Tax	1273.500	967.500	1293.300
Total Expenditure	16104.900	14634.700	14832.200

SUMMARISED RESULTS

PARTICULARS	31.03.2006 (Full Year)
Sales Turnover	1,5920.0
Other Income	225.2
Total Income	1,6145.2
Total Expenditure	1,1930.6
Operating Profit	4214.6
Interest	1299.8
Gross Profit	2914.8
Depreciation	1551.0
Tax	09.5
Reported PAT	1271.6
	100.0

KEY RATIOS

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Debt Equity Ratio	1.23	1.20	1.51
Long Term Debt Equity Ratio	0.86	0.90	1.19
Current Ratio	1.95	1.79	1.61
TURNOVER RATIOS
Fixed Assets	0.82	0.73	0.78
Inventory	3.82	3.86	5.20
Debtors	6.14	6.28	6.60
Interest Cover Ratio	2.08	1.74	1.78
Operating Profit Margin (%)	23.38	26.35	28.56
Profit Before Interest and Tax Margin (%)	14.62	16.15	19.01
Cash Profit Margin (%)	16.24	16.76	17.88
Adjusted Net Profit Margin (%)	7.48	6.56	8.33
Return on Capital Employed (%)	9.05	9.64	11.68
Return on Net Worth (%)	10.59	8.39	12.69

STOCK PRICES

Face Value	Rs. 10/-
High	Rs. 139.30
Low	Rs. 136.20

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 1^st June, 1931 at Ahmedabad in Gujarat having Company Registration Number 93.

Subject is the flagship company of Lalbhai Group, which was incorporated to manufacture cotton textiles.

Subject for long has been one of the leading cotton manufacturing companies in the country producing conventional suiting fabrics, shirting fabrics and sarees and had moved into denim manufacturing in 1980's.

Subject has a wide product range, which includes Suitings, Shirtings, Sarees and Dress Materials and has diversified into Denim manufacture and is the 5^th largest denim manufacturer in the world.

Subject has tie-ups with H I Lee and Cluett International, USA to manufacture denim jeans and Arrow shirts respectively.

The denim project went on stream in 1991.

Subject's recent tie-ups include its technical and marketing alliance with F M Hammerie Von-Ogensever Waltungs, Australia, the USA based Alamac Knit Fabrics and Spinners and Webexi Dict Turt, Switzerland. Other brand portfolio are Flying Machine, Ruggers, Newport, Ruf-and-Tuf, Excalibur, etc.

During 1985 the company diversified into electronics by setting up a plant to manufacture electronic telephone exchanges (EPABX). It also entered into marketing pharmaceutical products and B&W and colour television sets under the name Pyramid. Rohit Mills, a sick textile unit was merged with the company with effect from 1^st November, 1996 and renamed Asoka Cotsyn division. The company now proposes to merge Arvind Intex, a subsidiary company engaged in cotton spinning activities, in which it holds a stake of 49.89%.

The company had also ventured into production of video magnetic tape of VHS Standards in 1988. In this regard, the company had signed an agreement with Victor Company of Japan for technical assistance and licence for production and marketing of video tapes.

The company has taken over the management of Nagri Mills Company Limited and proposed to modernise the existing capacity.

The green field textile project at village Santej with a capacity of processing 34 million meters per annum had commenced commercial production with effect from 1st April, 1999. It also started operating two captive Co-generation Power plants after test runs in the 2^nd and 3^rd quarter of 1998-99.

The company commissioned its' shirtings facility at Santej during the first quarter of 2000 and the Knits facility was commissioned in the third quarter of 2000.

The company was also planning a rights issue and sale of non-core assets if lenders agree to the restructuring proposal prepared by KSA Techno Pak, an Indo-US consultant and Jardine Fleming, now Chase Jardine Fleming.

It intends to raise Rs. 1000 millions through the rights issue and Rs. 750 millions through sale of assets, mostly real estate. The money would be used to buy back debt. The restructuring proposal is strictly subject to the lenders agreeing to sell back a minimum of Rs. 5500 millions debt and the company would raise new debt to part-finance the buyback.

It has acquired a sick cotton mill Ankur Textiles. Arvind Overseas (Mauritius) Limited, a subsidiary of Arvind Mills Limited is setting up a 2.1 million pieces p. a. garment manufacturing plant which is expected to be commissioned during 2003-04. Subject has set up a new 100% subsidiary ‘Arvind Spinning Limited’ to a manufacture yarn in Mauritius for AOML. In order to overcome the debt burden the company made a Det Restructuring Programme and as per the scheme it made payment of Rs. 4630 millions to the lender who opted for Debt buyback scheme. Subsequently the total debt stands reduced to Rs. 13400 millions as on March, 2003.

OPERATIONS 

Your Directors are pleased to inform you that financial year 2004-05 has been a successful year for the Company. The Company has performed distinctively better than the previous financial year and has achieved suitable results. Sales and operating income was at Rs.16790 millions as against Rs.14350 millions in the previous financial year, a growth of 17%. This is mainly on back of higher denim and garment sales both in terms of volume and realization. Operating profit was Rs.3890 millions as against Rs.3530 millions in the previous financial year, a growth of 10%. The earnings are depressed compared to the revenues due to high cotton cost during first three quarters of the current financial year. The key developments of the year are summarized below : 

 * Operations of Mauritius subsidiary closed and shifted to India 

 * Significantly better demand for denim 

 * Higher contribution from garment business 

 * Lower cotton cost during last quarter of the year 

 * Power plants have been shifted to lower priced natural gas instead of naphtha as fuel 

The Company has registered a profit after tax at Rs.1270 millions as against Rs.970 millions in the previous financial year, a growth of 31% 

A detailed analysis of the financial results is given in the Management Discussion and Analysis Report which forms part of this report. 

The Evolution

1930 was a year the world suffered a traumatic depression. Companies across the globe began closing down. In UK and in India the textile industry in particular was in trouble. At about this time, Mahatma Gandhi championed the Swadeshi Movement and at his call, people from all India began boycotting fine and superfine fabrics, which had so far been imported from England. In the midst of this depression one family saw opportunity. The Lalbhais reasoned that the demand for fine and superfine fabrics still existed. And any Indian company that met this demand would surely prosper. The three brothers, Kasturbhai, Narottambhai and Chimanbhai decided to put up a mill to produce this superfine fabric. Next they looked around for state-of-the-art machinery that could produce such high quality fabric. Their search ended in England. The best technology of that time was acquired at a most attractive price. And a company called Arvind Mills was born.

Arvind Mills started with a share capital of Rs 2,525,000 ($55,000) in the year 1931. With the aim of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning and weaving facilities in addition to full-fledged facilities for dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after establishment were Rs 45.76 lakhs and profits were Rs 2.82 lakhs. Steadily producing high quality fabrics, year after year, Arvind took its place amongst the foremost textile units in the country.

In the mid 1980’s the textile industry faced another major crisis. With the power loom churning out vast quantities of inexpensive fabric, many large composite mills lost their markets, and were on the verge of closure. Yet that period saw Arvind at its highest level of profitability. There could be no better time, concluded the Management, for a rethink on strategy. The Arvind management coined a new word for it new strategy – Renovision. It simply meant a new way of looking at issues, of seeing more than the obvious and that became the corporate philosophy. The national focus paved way for international focus and Arvind’s markets shifted from domestic to global, a market that expected and accepted only quality goods. An in-depth analysis of the world textile market proved an eye opener. People the world over were shifting from synthetic to natural fabrics. Cottons were the largest growing segments. But where conventional wisdom pointed to popular priced segments, Renovision pointed to high quality premium niches. Thus in 1987-88 Arvind entered the export market for two sections. Denim for leisure and fashion wear. And high quality fabric for cotton shirtings and trousers. By 1991 Arvind reached 1600 million meters of Denim per year and it was the third largest producer of denim in the world.

In 1997 Arvind set up a state-of-the-art shirting, gabardine and knits facility, the largest of its kind in India, at Santej. With Arvind’s concern for environment a most modern affluent treatment facility with zero affluent discharge capability was also established.

Year 2005 is a watershed year for textiles. With the mulitifiber agreement getting phased out and the disbanding of quotas, international textile trade is poised for a quantum leap. In the domestic market too, the rationalizing of the cenvat chain and the growth of the organized retail industry is likely to make textiles and apparel see an explosive growth.

Arvind has carved out an aggressive strategy to verticalize its current operations by setting up world-scale garmenting facilities and offering a one-stop shop service, of offering garment packages, to its international and domestic customers.

With the Indian economy poised for rapid growth, Arvind brands with its international licenses of Lee, Wrangler, Arrow and Tommy Hilfiger and its own domestic brands of Flying Machine, Newport, Excalibur and Ruf & Tuf, is setting it’s vision on becoming the largest apparel brands company in India.

The company with both international and local brands is one of the leading players in the domestic ready-to-wear garment industry. It has the rights to market international brands such as Arrow, Lee, Flying Machine, etc. in India. It also owns popular brands such as Newport, Ruggers, Excalibre and Ruf & Tuf.

It tied up with H I Lee for Lee brand in Denim Jeans and with Cluett International, USA for Arrow Shirts for manufacturing and marketing in India.

The company is in trade terms with the following:

ÿ Atul Enterprises

ÿ Albaj Engineering Corporation

ÿ B. Trikamlal & Company

ÿ Climax Marketing Private Limited

ÿ Fourwent Engineering Company

ÿ Geekay Corporation

ÿ Chamunda Fabrication

ÿ Chipko Bonding Systems

ÿ Siddhi Polymers Private Limited

ÿ Archem Industries

ÿ Arjyot Chemicals Private Limited

ÿ Synergy Chlorinations Private Limited

ÿ Bhagat Engineering Works

ÿ Bhavik Industries

ÿ Shree Laxmi Engineering

ÿ Gemini Polyplast Industries

ÿ Sun Industries

ÿ Khodiyar Industries

ÿ R-Tex Enterprise

Biodata

Arvind Mills (AML). the flagship company of Lalbhai Group was incorporated in 1931 to manufacture cotton textiles. AML, for long has been one of the leading cotton manufacturing company in the country producing conventional suiting fabrics, shirting fabrics, sarees has moved into denim manufacturing in 1980's is currently the largest denim manufacturer in the world. 

The company with both international and local brands is one of the leading player in the domestic ready to wear garment industry. The company has the rights to market international brands such as Arrow, Lee, Flying Machine etc in India. The company has also owns popular brands such as Newport, Ruggers, Excalibre and Ruf & Tuf. It has tied-up with H I Lee for Lee brand in denim Jeans and with Cluett International, US, for Arrow Shirts for manufacturing and marketing in India. 

AML's recent tie-ups include its technical and marketing alliance with F M Hammerie Von-Ogensver Waltungs, Austria, the US-based Alamac Knit Fabrics & Spinners and Webexi Dict Turt, Switzerland. The denim project went on stream in 1991. Arvind Mills in 1985 has diversified into electronics by setting up a plant to manufacture electronic telephone exchanges (EPABX). It also entered into marketing pharmaceutical products and B&W and colour television sets under the name Pyramid.  

The company has also ventured into production of Video Magnetic Tape of VHS Standards in 1988. In this regard the company has signed an agreement with Victor Company of Japan for technical assistance and licence for production and marketing of video tapes. 

The company has taken over the management of Nagri Mills Co. Ltd. The company has merged Rohit Mills, a sick textile unit with it effective from Nov 1, 1996. and renamed Rohit mills as Asoka Cotsyn. The green field textile project at village Santej with a capacity of processing 34 million meters per annum has commenced commercial production with effect from 1st April, 1999. It also started operating two captive Co-generation Power plants after test runs in the 2nd and 3rd quarter of 1998-99. 

The Company commissioned its Shirtings facility at Santej during the first quarter of 2000 and the Knits facility was commissioned in the third quarter of 2000. The company intends to raise Rs 1000 millions through the rights issue and Rs 75 crore through sale of assets, mostly real estate. The money would be used to buy back debt. The restructuring proposal is strictly subject to the lenders agreeing to sell back a minimum of Rs 5500 millions debt and the company would raise new debt to part-finance the buyback. 

It has acquired a sick cotton mill Ankur Textiles. Arvind Overseas(Mauritius) Limited,a subsidiary of Arvind Mills Limited is setting up a 2.1 Million pieces p.a garment manufacturing plant which is expected to be commissioned during 2003-04. Arvind Mills has set up a new 100% subsidiary 'Arvind Spinning Ltd' to manufacture yarn in Mauritius for AOML. In order to overcome the debt burden the company made a Debt Restructuring programme and as per the scheme it made payment of Rs.4630 millions to the lenders who opted for Debt buyback scheme. Subsequently the total debt stands reduced to Rs.13400 millions as on March,2003.

As Per Web Details

Profile

The Arvind Mills was set up with the pioneering effort of the Lalbhai brothers in 1931. With the best of technology and business acumen, Arvind has become a true Indian multinational, having chosen to invest strategically, where demand has been high and quality required has been superlative. Today, The Arvind Mills Limited is the flagship company of Rs.20 billion (US$ 500 million) Lalbhai Group.

Arvind Mills has set the pace for changing global customer demands for textiles and has focused its attention on select core products. Such a focus has enabled the company to play a dominant role in the global textile arena. With its presence across the textile value chain, the company endeavors to be a one-stop shop for leading garment brands.

Forevision and Technology has brought Arvind to be one of the top three producers of Denim in the world, and on its way becoming the Global Textile Conglomerate. Arvind is already making its presence felt in Shirting’s, Knits and Khakhis fabrics apart from being all set to create ripples in the ready to wear Garments world over.

The company's fixed assets of important value include land freehold and leasehold, buildings, machinery, machinery given on lease, motor vehicles and office machinery and dead stock.

Press Releases

Arvind Mills net at Rs 36 crore

Our Bureau

AHMEDABAD: Textile major Arvind Mills Ltd has reported a net profit of Rs 36 crore on a turnover of Rs 414 crore for the third quarter of the current year. The sales have risen 19 per cent during the October-December quarter of 2004-05 as compared with Rs 349 crore in the same period last year. The net profit has jumped from Rs 19 crore in the last financial year to Rs 36 crore this year, a company press release said here on Thursday.

Arvind Mills to relocate Mauritius plant
Our Corporate Bureau
13 August 2004

Mumbai: Arvind Mills is planning to shift its existing denim and garments manufacturing facilities from Mauritius to India by December 2004, it said in a release.

The company, through its subsidiary companies, has eight million meters of denim manufacturing facility and two million pieces of jeans plant at Mauritius and the total investment was to the tune of Rs 40 crore.

The company would augment its denim manufacturing capacity to 105 million meters in the country after the plant is shifted, the release said.

The company is also setting up a 2.1 million jeans plant at Bangalore, which would be increased to about four million pieces on account of shifting of capacities from Mauritius, it added.

Arvind Mills to set up new mills
Pradeep Rane
4 May 2004

As part of its efforts to take advantage of dismantling of quota regime from January 2005, textile major Arvind Mills Ltd is planning to set up new plants in Bangalore and Ahmedabad. The company is raising its garments capacity to 14.4 million pieces by end of FY 2005.

The plan includes capacity addition in jeans, khakis and an expansion of its knitted garments factory at Ahmedabad. Arivind is taking several initiatives to capture the enormous upside expected out of WTO opportunities post 2005.

To raise its garments capacity to 14.4 million pieces by end of FY 2005, the company is plannig to set up new facilities - a 2.1 million pieces jeans factory, and a 1.5 million pieces khakis factory in Bangalore. Both these are expected to be completed by end-FY 2005. Also, the existing knitted garments factory at Ahmedabad is being expanded to 4.2-million piece capacity.

"Clearly, AML is on track with its several initiatives targeted at capturing the enormous upside expected out of the dismantling of the quota regime effective Jan-2005," says a leading securities research firm.

Also the textile reconstruction fund notified by the central government would offer AML an opportunity to further reduce interest costs. The scheme would help the company to reduce its effective interest rate for textile companies to 8-9 per cent in order to enhance its competitive edge. AML has an opportunity to get Rs6 billion of its existing borrowings refinanced under this scheme, leading to an annual saving of Rs180 million to 240 million per annum.

The company is also trying to reduce its power costs as it is seeking to shift to natural gas from high cost naphtha for its captive power plants. The company has recently entered into a 3-year agreement with one of the natural gas suppliers. Supplies are expected to commence in Q2FY05, and would yield substantial savings in fuel costs. It is estimated that annual savings on this count to be between Rs300m and 400m.

The company has reported 11 per cent YoY decline in sales to Rs3.48bn and 34 per cent drop in net profits to Rs152m in finacial year '04. In terms of positive contributors — interest charges declined 39 per cent YoY and forex gains of an estimated between Rs160 and Rs180mn were booked during the quarter.

Contacts

CORPORATE OFFICE

The Arvind Mills Limited
Naroda Road
Ahmedabad – 380025
Gujarat
India
Tel: +91-79-22203030
Fax: +91-79-22201270

e mail to : Corporate

HUMAN RESOURCES

e mail to : Arun Kaul

Subir Sinha

FINANCE

e mail to : Jayesh Shah

ACCOUNTS AND INFORMATION TECHNOLOGY

e mail to : Bhupendra Shah

LEGAL & SECRETARIAL

e mail to : Jagdish Dalal

MATERIALS

e mail to : Milan Shah

COTTON

e mail to : GP Thapak

CENTRAL UTILITIES

e mail to : Dinesh Yadav

Denim Division
The Arvind Mills Limited
Naroda Road
Ahmedabad – 380025
Gujarat
India
Tel: +91-79-22203030
Fax: +91-79-22200267

e mail to : Milind Hardikar

Shirtings Division
The Arvind Mills Limited
Santej Road
Near Khatrej
Taluka Kalol
Dist Gandhinagar - 382721
Gujarat
India
Tel:  +91-2764-281100/22
Fax: +91-2764-281027

e mail to : Pranav Dave

Khakhi Division
The Arvind Mills Limited
Santej Road
Near Khatrej
Taluka Kalol
Dist Gandhinagar - 382721
Gujarat
India
Tel:  +91-2764-281100/22
Fax: +91-2764-281177

e mail to : Vineet Talwar

Knits Division
The Arvind Mills Limited
Santej Road
Near Khatrej
Taluka Kalol
Dist Gandhinagar - 382721
Gujarat
India
Tel:  +91-2764-281100
Fax: +91-2764-281060

e mail to : Pragnesh Shah

Ankur Textiles
Outside Raipur Gate
Ahmedabad – 380022
Gujarat
India
Tel: +91-79-25461191/95
Fax: +91-79-25454182  

e mail to : PD Chavda

Brijesh Bhati

Arvind Brands Limited

Du Parc Trinity

8^th Floor,

17, M. G. Road,

Bangalore – 560001

Karnataka

India

Tel: +91-80-22973131
Fax: +91-80-25594384

e mail to : Pradeep Mukim

The Arvind Mills Limited
10th Floor,Du Parc Trinity
17 MG Road
Banglore -560001
Karnataka
India
Tel: +91-80-51123900/5
Fax: +91-80-51123909 

e mail to : V Sridhar

^ Top

MUMBAI

The Arvind Mills Limited
Neptune House, 2^nd Floor
Opp. Bandra Talkies
SV Road
Mumbai – 400050
Maharashtra
India
Tel: +91-22-26513367/68/69
Fax: +91-22-26513472

e mail to : Atul Joshi

DELHI

The Arvind Mills Limited
8 Community Centre
Saket
New Delhi– 110017
New Delhi
India
Telefax: +91-11-51664620/24

e mail to : BC Bajaj

BANGALORE

The Arvind Mills Limited
Grace Mansion
25 Infantry Road
Bangalore – 560001
Karnataka
India
Tel: +91-80-22865117/7697
Fax: +91-80-22860564

e mail to : Bangalore

KOLKATA

The Arvind Mills Limited
100, Park Street
Laxmi Nivas, 2^nd Floor
Kolkata
West Bengal
India
Telefax: +91-33-22835792

e mail to : Kolkata

USA

Arvind Worldwide (USA) Inc.
130, West 42^nd Street
Suite No. 603, 6^th floor
NY 10036
New York
USA
Tel : +001-212-768-4815
Fax: +001-212-768-7378

e mail to : Udyan (Raju) Shah

SRI LANKA

The Arvind Mills Ltd.,
Sri Lanka Liason Office
207/24, 2/2 Dharmapala Mawatha
Colombo
Sri Lanka
TeleFax: 0094-11-2678564

e mail to : Rajesh Manwani

BANGLADESH

The Arvind Mills Ltd.,
C/o Sidko Ltd.
7th. Floor, Paragon House
Mohakali Commercial area
Dhaka - 1212
Bangladesh
Tel : 8802-9881794
Fax : 8802-9883400

e mail to : Manish Khanna

Asoka Spintex Premises
Naroda Road
Ahmedabad - 380025
Gujarat
India
Tel: +91-79-22200817/3266
Fax: +91-79-22200457

e mail to : VL Mote

Neeraj Lal

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 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.45.92
UK Pound	1	Rs.84.76
Euro	1	Rs.57.95

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	7
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		55

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		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