MIRA INFORM REPORT

Report Date :

18.11.2006

IDENTIFICATION DETAILS

Name :	HIMATSINGKA LINENS – DIVISION OF HIMATSINGKA SEIDE LIMITED
Registered Office :	2/1, Midford Gardens, M. G. Road, Bangalore – 560001, Karnataka, India
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	23.01.1985
Com. Reg. No.:	08-6647
CIN No.: [Company Identification No.]	L1711ZKA1985PLC006647
TAN No.: [Tax Deduction & Collection Account No.]	BLRH01939A
PAN No.: [Permanent Account No.]	AAACH3507N
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacturing of Natural Silks and Silk Blended Fabrics.

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 22500000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established and reputed company having satisfactory track. Available information indicates high financial responsibility of the company. Trade relations are fair. Financial position is good. Payments are usually correct and as per commitments. The company is faring well. It can be considered good for any normal business dealings.

LOCATIONS

Registered Office :	2/1, Midford Gardens, M. G. Road, Bangalore – 560001, Karnataka, India
Tel. No.:	91-80-25584038 / 25584307 / 25586304
Fax No.:	91-80-23340117 / 25584249
E-Mail :	hslblr@giasbg01.vsnl.net.in corporate@himatsingka.co.in corporate@himatsingka.com seide@himatsingka.com
Website :	http://www.himatsingka.co.in
Office :	No. 10/24, Kumara Kurpa Road, High Grounds, Bangalore – 560001, Karnataka
Tel. No.:	91-80-22378000
Fax No.:	91-80-22378058
E-Mail :	seide@himatsingka.com
Factory 1 :	23A, KIADB Industrial Area, Veerapura Village, Doddaballapur Taluk, Bangalore District, Karnataka

DIRECTORS

Name :	Mr. N. Vaghul
Designation :	Chairman
Address :	Flat No. 3, Sudarshan Apartments, 63 Main Road, R A Puram, Chennai – 600028, Tamil Nadu, India
Date of Birth/Age :	68 years
Name :	Mr. Dinesh Himatsingka
Designation :	Managing Director
Address :	173, RMV Extension, 8^th B Main Road, Bangalore- 560080, Karnataka, India
Date of Birth/Age :	55 years
Qualification :	B.A (Hons.)
Experience :	28 years
Date of Appointment :	01.08.1985
Previous Employment	Managing Director of Bihar Mercantile Union Limited
Name :	Mr. A. K. Himatsingka
Designation :	Vice Chairman & Whole time Director
Address :	25, Ashutosh Chowdhury Avenue, Kolkata – 700019, West Bengal, India
Date of Birth/Age :	63 years
Qualification :	B. Com.
Date of Appointment :	01.04.1999
Previous Employment	Whole time Director of Bihar Mercantile Union Limited
Name :	Mr. Rajiv Khaitan
Designation :	Director
Address :	203, Salarpuria Paradise, 31, Agra Abbas Ali Road, Bangalore – 560092, Karnataka, India
Date of Birth/Age :	45 years
Qualification :	B.Com LLB
Name :	Mr. A. K. Dasgupta
Designation :	Director
Address :	IPSHITA, 10 Dreamland Society, Aloycious Soares Marg, Chembur, Mumbai – 400071, Maharashtra, India
Date of Birth/Age :	70 years
Qualification :	B.E. [Civil], PG in Concrete Technology

Name :	Mr. Aditya Himatsingka
Designation :	Executive Director
Address :	Embassy Palace, 1/17, Flat No. 303, Block A, Cunningham Road, Bangalore – 560052, Karnataka, India
Date of Birth/Age :	40 years
Qualification :	B. Com. (Hons.), Diploma in Textiles
Experience :	17 years
Date of Appointment :	01.01.1988
Name :	Mr. Dilip J. Thakkar
Designation :	Director
Address :	Little Gibbs Road, 12-B Acropolis, Mumbai – 400006, Maharashtra, India
Date of Birth/Age :	68 years
Qualification :	B. Com LLB FCA
Name :	Mr. Srikant Himatsingka
Designation :	Director
Address :	173, RMV Extension, 8^th B Main Road, Bangalore – 560080, Karnataka, India
Date of Birth/Age :	25 years
Qualification :	B.Sc[Economics]
Name :	Mr. K R S Murthy
Designation :	Additional Director
Name :	Mr. Amit Jain
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
promoters' holdings
Indian Promoters	11692003	61.16
Foreign Promoters	0	0
non promoter's holdings
Mutual Funds and UTI	1386490	7.25
Banks, Financial Institutions and Insurance Companies	405970	2.12
FIIs	1188514	6.22
others
Private Corporate Bodies	355741	1.86
Indian Public	3749246	19.61
NRIs / OCBs / Foreign Others	337436	1.77
Trust	1800	0.01
Total	19117200	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Natural Silks and Silk Blended Fabrics.

Products :

Item Code No.	Product Description
50072090	100% Natural Silk Fabrics
50079090	Silk Blended Fabrics
50050011	Spun Silk Yarn

Its product range includes

v Decorative Fabrics

v Bridal Wear

v Fashion Wear

v Spun/Silk Blended Yarn

Exports to :

U.S.A. and spun silk or blended yarn to European countries

Imports from :

China

Terms :

Selling :

L/C, Cash or Credit [30/60/90 days] terms.

Purchasing :

Cash terms

GENERAL INFORMATION

Customers :	Wholesalers and Retailers
No. of Employees :	641
Bankers :	v Canara Bank v The Hongkong & Shanghai Banking Corporation Limited v HDFC Bank Limited
Facilities :	--

Banking Relations :	Satisfactory
Auditors :	S. B. Billimoria & Company Chartered Accountants
Address:	70/3 Millers Road, Bangalore – 560052, Karnataka
Tel. No.:	91-80-22254610
Fax No.:	91-80-22203125
Associates/Subsidiaries :	v Bihar Mercantile Union Limited v Khaitan & Company v Satin Reed (America) Inc v Credit Himatsingka Limited v BMU International v 19/1, Camac Street, Kolkata - 700019, West Bengal, India - Exporters of silk fabrics. subsidiaries v ABC Trading Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10,00,00,000	Equity Shares	Rs.5/- each	Rs.500.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
97433160	Equity Shares	Rs.5/- each	Rs. 487.166 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		487.200	191.200	191.200
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		5248.900	2680.400	2586.8000
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		5736.100	2871.600	2778.000
LOAN FUNDS
1] Secured Loans		397.500	585.000	137.600
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		397.500	585.000	137.600
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		6133.600	585.000	2915.600
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		940.100	920.600	1083.500
Capital work-in-progress		200.400	164.300	1.100
INVESTMENT		1265.900	1642.600	1182.600
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	424.800	293.900	358.700
	Sundry Debtors	306.200	231.500	217.400
	Cash & Bank Balances	2921.800	147.200	115.700
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	539.600	424.600	373.100
Total Current Assets		4192.400	1097.200	1064.900
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	137.600	85.300	121.800
	Provisions	336.800	282.800	294.700
Total Current Liabilities		474.400	368.100	416.500
Net Current Assets		3718.000	729.100	648.400
MISCELLANEOUS EXPENSES		9.200	0.000	0.000
TOTAL		6133.600	3456.600	2915.600

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	1708.900	1454.600	1485.900
Profit/(Loss) Before Tax	511.700	495.800	545.200
Provision for Taxation	28.600	31.800	40.000
Profit/(Loss) After Tax	483.100	464.000	505.200
Total Expenditure	1695.200	1435.600	1475.400

QUARTERLY RESULTS

PARTICULARS	30.06.2006 (1^st Quarter)	30.09.2006 (2^nd Quarter)
Sales Turnover	377.700	469.900
Other Income	61.700	68.700
Total Income	439.400	538.600
Total Expenditure	251.900	311.000
Operating Profit	187.500	227.600
Interest	1.100	1.100
Gross Profit	186.400	226.500
Depreciation	35.300	37.300
Tax	7.000	27.000
Reported PAT	144.100	162.200

200606 Quarter 1 - The Construction of Company's Bed Lenin Project at Hassan is on Schedule. There were no pending investor complaints at the beginning of the quarter. During the quarter ended 30.06.2006, The Company received 37 Investor complaints which have been attended and no complaints remein unresolved as on 30.06.2006. Previous Year /quarters figures have been regrouped/recast wherever necessary.

200609 Quarter 2 - Expenditure Includes Consumption of Raw Material Rs 151.722 million (Increase)/Decrease in stock Rs 10.518 million Personnel Expenses Rs 57.739 million Manufacturing Expenses Rs 40.135 million Administration, Sales & Other expenditure Rs 50.837 million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended 30.09.2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 41 Complaints disposed off during the quarter 41 Complaints unresolved at the end of the quarter Nil 1. Erection of plant and machinery for bed linen project at Hassan SEZ is in progress. 2. Effective from 01.04.2006, the ICAI has issued revised AS-15 on Employee benefits. The Company is in the process of ascertaining the impact of said revised AS-15 and the necessary provision in respect of additional liability if any, will be made at the year end. 3. The Board of Directors have recommended payment of 25% (Rs 1.25 per share of Rs 5 each) Interim Dividend. 4. The Statutory Auditors have carried out a limited Review' of the financial results for the quarter / half year ended 30.09.2006. 4. Previous years / quarters figures have been regrouped / recast, wherever necessary

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.11	0.13	0.03
Long Term Debt Equity Ratio	0.06	0.03	0.00
Current Ratio	4.13	1.59	2.06
TURNOVER RATIOS
Fixed Assets	0.70	0.66	0.68
Inventory	4.23	4.26	3.97
Debtors	5.66	6.20	6.34
Interest Cover Ratio	36.05	30.87	78.10
Operating Profit Margin (%)	43.62	45.21	46.27
Profit Before Interest and Tax Margin (%)	34.59	36.84	35.48
Cash Profit Margin (%)	40.78	41.73	43.24
Adjusted Net Profit Margin (%)	31.75	33.36	32.45
Return on Capital Employed (%)	10.99	16.08	17.92
Return on Net Worth (%)	11.22	16.43	16.82

STOCK PRICES

Face Value	Rs.5/-
High	Rs.127.55/-
Low	Rs.124.00/-

LOCAL AGENCY FURTHER INFORMATION

It is in trade terms with :

v Zhejiang Silk I & E, China

v Jab Josef Anstoetz

v Robert Allen

v Nobilis

v Zimmer + Rohde

v Christian Fischbacher

v Sahco Hesslein

v Kravet

v Rubelli

v Schumacher

v Lelievre

v Andrew Martin

v Decortex

v Osborne & Little

Fixed Assets

v Land

v Leasehold Land

v Building

v Leasehold Building

v Plant and Machinery

v Furniture and Fixtures

v Office Equipment

v Vehicles

Financials: 

 USA and Western Europe, markets in which the Company mainly operates, did not show the buoyancy to the extent expected by us. As a result, the growth they achieved in their overall business was modest. The Company's core fabrics business grew by 7.8% during the year. Fabric sales this year increased to Rs.1198.78 million, as compared to Rs.1111.24 million in the previous year. However, yarn sales declined by 25.94% to Rs. 180.98 million, as compared to Rs. 244.37 million in the preceding year. The dip was a result of cut in production, rather than selling at unremunerative prices. Overall sales showed marginal increase and stands at Rs. 1379.77 million, as compared to Rs. 1355.61 million in 2003-04. 

 Although profit before tax from operations (without other income) increased marginally to Rs. 422.35 million, from Rs. 411.44 million in the previous year, the operating profit margin for the year was lower and stands at 40.51% versus 41.31% of the previous year. This fall is mainly attributed to a 12% increase in raw material prices along with the appreciation of the rupee, which impacted their sales realisation. 

 During the year, they added Rs. 422.38 million to their investible surplus bringing it up to Rs. 1701.29 million as on March 31, 2005. The surplus was invested in debt-based mutual fund schemes and bank deposits. Returns on these investments averaged 5.08% during the year. Other income, as a result of this, was Rs. 65.23 million, as against Rs. 133.74 million in the previous year. The considerable drop in their other income impacted their Profit after tax for the year, which stands at Rs. 464.03 million, as against Rs. 505.18 million in the previous year. 

 Dividend: 

 An interim dividend of 50% was distributed in November 2004. The Directors recommend a final dividend of 50% for the year. The total dividend for the year is 100%. The dividend payout is Rs. 191.17 million (Rs. 191.17 million in the previous year) and the tax on the dividend for the year is Rs. 26.19 million (Rs. 24.49 million in the previous year). 

Consolidated Financial Results: 

 Their consolidated sales revenue grew by 13% to Rs.1497.57 million as compared to Rs. 1328.35 million in the previous year. Profit before tax from operations was at Rs. 426.52 million, up 12% as compared to previous year. However, due to lower other income, the net profit was at Rs. 454.60 million as compared to Rs. 470.14 million in the previous year. 

Prospects: 

 The international market is showing signs of improvement, though recovery is still slow. They are prepared for the upswing and are positioning ourselves to meet potential increase in consumer demand. In line with this strategy, the Company has expanded capacity of the weaving division in April 2005 at a cost of Rs. 200 million. 

 Finance: 

 Cash generation during the year continued to be strong. The Company's surplus funds were invested prudently. Of the total investible surplus of Rs. 1701.29 million as on March 31, 2005, the Company has invested Rs. 554.11 million in debt schemes of mutual funds, while Rs. 122.50 million was kept in fixed deposits with banks. In accordance with the provisions of the Investor Education and Protection Fund (awareness and protection of investor) Rules, 2001, unpaid and unclaimed dividend amounting to Rs. 0.19 million for the financial years 1996-97 and 1997-98 was transferred to the Investor Education and Protection Fund. 

Personnel: 

 Industrial relations were cordial and an atmosphere of understanding prevailed throughout the year. They continue to train and motivate their workforce, to increase their contribution to the growth of the Company. 

Research and Development: 

 Research and Development continues to provide valuable support to their exports and has helped us keep pace with a dynamically changing market. They continue to give in-house research and innovation the highest priority. 

 Awards: 

 The Company was conferred the Best Managed Company (small cap category) Award by the prestigious Asiamoney magazine published from Hong Kong. They were ranked No. 1 in the following areas: 

 1. Best Annual Report2. Best Focus on Shareholder Value3. Best Operational Efficiency 

 The Company also received the 'Largest Silk Exporter' Award from the Indian Silk Export Promotion Council for the twelfth consecutive year. 

 Environment, Safety, Energy Conservation and Technology Absorption: 

 Safety and environmental protection continue to be the prime concern of the Company. Investments are continuously made in projects for reducing and treating wastes and increase energy efficiencies. 

 They regularly upgrade their effluent treatment and water recycling plants to keep pace with the technological advancements. By avoiding carcinogenic azo class dyes, they ensure eco friendly production and worker safety. Their endeavour has been to maximize efficient use of energy and ensure the safe and responsible discharge of residual wastes, while minimising any adverse environmental impact and waste generation. 

 Information under section 217(1)(e) read with Companies (Disclosure of particulars in the report of Directors) Rules, 1988 are given in the Annexure, forming part of this report. 

 Corporate Governance: 

 They comply with the Corporate Governance Code as prescribed by the Stock Exchanges and SEBI. You will find a detailed report on Corporate Governance as part of this Annual Report. The Auditors' Certificate on compliance with the mandatory recommendations on Corporate Governance is annexed to this report. 

Industry Structure and Developments :

 Their product portfolio comprises of a broad range of silk & silk-blended furnishings, apparel fabric and silk & blended yarn. To maintain their leadership position as the largest manufacturers of these products in India, they are constantly reinvesting in technology upgrades at their 100% Export Oriented Units located at Doddaballapur Industrial Area, near Bangalore. Their primary export markets include USA, the European Union (EU), South Korea, Japan and the Middle East. They sell their products through specialized distributors who operate within these key markets. 

 The principal producers of high-quality fabrics are Italy, France and Switzerland. They compete favourably with them, both in terms of aesthetics and cost effectiveness. 

 Opportunities: 

 Recognizing an opportunity to enter the dynamically growing domestic market with an exclusive range of home furnishings, they launched ten signature stores under the brand name ATMOSPHERE. This retail initiative is conducted through a wholly owned subsidiary, Himatsingka Wovens Private Limited. They aim to achieve about 20% of their fabric division's revenues from this venture. 

 They believe the phasing out of MFA quotas on textiles and clothing products from January 1, 2005, will dramatically boost world trade. They see this liberal, free trade environment as an attractive business opportunity, since it will give non-silk and blended fabrics unrestricted access to export markets. Towards this end, they have identified cotton bed linen and made ups as their current focus area. Plans to set up a new, world-class production facility dedicated to its manufacture have already been finalized. 

 Threats: 

 Globally, China has emerged as a low-cost producer of a cross-section of products. They too are dependent on China for quality raw materials. China is also the largest producer of silk fabric in the world, hitherto focusing on mass production. They believe, China is not yet geared up to enter the exclusive and high-end market in which they operate. Nevertheless, the possibility of China entering this segment over a period of time can pose a threat to us. 

Risks and Concerns: 

 The Company's risks and concerns have been discussed comprehensively under the segment, disk Management, later in this section. 

Retail Operations: 

 The Company's retail initiative is conducted through a wholly owned subsidiary, Himatsingka Wovens Private Limited under the brand name ATMOSPHERE. During the year 2004-05 Company opened six new showrooms in Hyderabad, Pune, Ahmedabad, Calcutta, North Mumbai and Gurgaon. With these additions, the Company now operates 10 showrooms across the country. The 11th showroom situated in Ludhiana will commence its operations during the first week of June 2005. 

Outlook: 

 They are witnessing improved economic growth in their main markets. Similarly, they expect robust growth in their domestic market, which is serviced through Atmosphere showrooms. They would continue to gain market share as their potential customers increasingly value the reliability, sustainability, innovation, integrity and quality behind the Himatsingka brand. And they will continue to promote these advantages as they target new customers as well as territories and take additional market share in the coming years.  

 Risk Management: 

 Risk is an essential part of any business or industrial undertaking. A comprehensive and integrated risk management framework forms the basis of all the de-risking efforts taken by the Company. Prudential norms aimed at limiting exposures are an integral part of this framework. 

 A slowdown in the global economy could affect the Company's revenues and profits. The high degree of concentration in select markets could turn risky, especially when the consumption pattern in these markets is affected by political or economic events specific to them. 

 They mainly cater to countries in Western Europe and USA, which are currently going through an economic slowdown. They, however, service the luxury end of the furnishing market, which is less susceptible to such slowdowns. 

 They sell to distributors and brands that have a global retail presence. Hence, they are not limited by the geographic fluctuations that generally mark most businesses. 

 In 2004-05, the Company earned an average realisation of $20 per metre, which was considerably higher than the average realisation per metre of silk and silk-blended fabric exported from the country. The Company may not be able to sustain these realisation levels in future. 

 The Company essentially benchmarks itself with Italian, French and Swiss producers of similar fabric. They have a cost advantage of about 20-25% over players in these countries. As long as this differential is available to us, their selling price will be more attractive to their customers than the products available from European producers. 

 The Company had a forex exposure of Rs. 1500 million in 2004-05, which includes imports and exports. Since foreign exchange rates are volatile, the Company must prudently manage its exposure at all times. 

 To minimise this risk, they have laid down a foreign exchange management policy and applied appropriate hedging strategies. The Company's chosen policy is designed to optimise results rather than maximise realisations. The Company has set up systems to continuously track and manage its exposures. The risk management team regularly seeks expert advice and stays abreast of currency movements. 

 As on March 31, 2005, the Company had invested Rs. 1580 million in plant and machinery. These assets may be subject to obsolescence due to both ageing and the continuous emergence of new technologies. 

 They continue to channel fresh investments in plant and machinery to update and modernise their older assets and embrace the latest technologies in the context of capacity enhancements. 

 An excessive exposure to a few large clients has the potential to impact the Company's revenues and increase its credit risk. 

 The Company's maximum exposure to a single client is around 6% of its turnover. The addition of new customers will enable us to further dilute this risk. 

 The Company imports its principal raw materials from China and Brazil. Any interruption in supplies, either due to a temporary shortage or transportation delays, can affect production. 

 To minimise the risk arising out of a potential delay in delivery and to mitigate the impact of an unforeseen increase in raw material prices, they keep a three-to-four month raw material inventory. 

 The effluents generated in some of the Company's production processes are harmful to the environment, if released untreated. A poor management of the environment process could invite official censure and lead to a closure of the Company's operations. 

 They conduct their operations with respect for the environment. Their continuous investments in their effluent and waste water treatment plant ensure that the effluents and waste generated are within the statutory levels. 

 In a business like ours, where specialised insights into design, manufacturing and marketing translate into value-addition, an attrition of critical skill sets will be difficult to replace immediately. 

 Various initiatives on the HR front have been implemented which have led to positive working environment in the Company. With these measures, they intend to keep their work force motivated and improve their retention levels considerably from the current attrition rate of 7%. 

 The Company's intellectual capital resides largely in its designs. If these designs are lost or pilfered, it could give someone a headstart in the market and lead to a corresponding loss in the Company's competitive edge. 

 To ensure design security, they have embarked on a few initiatives. They have prudently evolved designs from the physical to the virtual networked environment with high security features. Besides, only select personnel have access to these designs, which has minimised the loss of sensitive information. 

As Per Website Details

Company

Their silk yarns and fabrics are offered across Germany, France, England, Italy, South America, Australia and USA. For over ten years they have worked with well known furnishing and fashion houses from these countries. Today, they operate one of the largest integrated mills in the world. Located in Bangalore, India, their mill is ISO 9001 certified.

Spinning division

Himatsingka Filati, their spinning division, was established in technical collaboration with Filati Buratti of Italy. Equipped with the latest machinery, it produces a wide range of regular and fancy 100 % silk and silk blended yarns.

Weaving division

Himatsingka Seide, their weaving division, offers yarn dyed decorative, bridal and fashion fabrics. The entire operation of winding, doubling, twisting, dyeing, weaving and finishing is integrated under one roof.

Awards

• They have been awarded the first prize for being the largest exporter of silk fabrics from the Indian Silk Export Promotion Council (ISEPC) for 1997 - 98
• They have received the ISO 9001 certificate from TUV Germany for establishment of quality systems in the manufacture of natural silk fabrics and yarns
• Himatsingka Seide has been ranked among the top ten investor rewarding companies in India by the Institute of Chartered Financial Analysts of India in 1995

1SO 9001 certificate
from TUV
Germany

As a responsible organisation, they ensure a safe environment for the community around their factory. Several programmes have been initiated as part of their contribution to community Environment & Social Welfare

In 2003, HSL forayed into domestic retailing & launched “a t m o s p h e r e”, India’s first Luxury Home Furnishing Brand. ATMOSPHERE has now been established as a premium Lifestyle brand & has national presence with 11 Showrooms spread across 10 of India’s most important Cosmopolitan cities. These include Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Ludhiana, Mumbai, Kolkata, Gurgaon & Pune.

In addition to increasing its retail presence in India, Himatsingka is also aiming at entering lucrative emerging markets the world over. It is also exploring the possibilities of inorganic growth opportunities in the Home Textile Arena.

Going forward, Himatsingka has embarked on a 400 Crore Greenfield Project at the Hassan SEZ to manufacture Bed Linen products for Domestic & International Markets. The integrated manufacturing facility will be amongst the best of its kind & will have an installed capacity of 60,000 meters/day of Wider Width Cotton Fabrics & 8,000 sets/day of exquisite Made-up products.

Their engineers are trained in yarn, fabric and dyeing technologies. Apart from this, expertise in facilities engineering is available. Their designers come from reputed design schools in India. They also have experienced personnel attending to the administration of their company.

Insight into international market trends is provided through training programmes and enhanced by the presence of their design house in New York. The development of new product ideas is also aided by visiting design and technical professionals.

Their contribution to the community around the factory takes the form of welfare programmes. One such programme is the adoption and development of Veerapura village located near their mill. Several facilities have already been built for schools in the area, to promote education.

They also ensure safe surroundings for people to live and work in. Eco-friendly production
processes, not using carcinogenic Azo class dyes and running a modern effluent
treatment plant, are some of the ways through which they keep the environment pollution free.

Product

Their fabrics and yarns reflect artistry and craftsmanship. Three fabric lines - decorative, bridal and fashion - are offered by their weaving division. Yarns of both the traditional variety and interesting new blends are manufactured by Himatsingka Filati, their spinning division.

Their products reach leading distributors across Europe and USA.

Manufacturing

Their integrated yarn and fabric manufacturing operations use state-of-the-art textile equipment from the world's leading suppliers. Order processing, production monitoring and process flow are seamlessly integrated through a company-wide computer network. This helps us meet customer requirements on time.

Himatsingka Filati, their spinning division

They can spin about 400,000 kgs. of yarn each year. The power requirements are met through their captive power plant. This prevents interruptions and provides a stable supply to their micro-processor controlled machines. Luwa air-conditioning plants from Switzerland, ensure controlled temperature and humidity conditions so essential in the spinning of quality silk yarns and blends.

Their manufacturing facilities include equipment for opening, cutting, carding, combing, drawing, roving, gassing, rewinding, as well as ring frames, autoconers and two-for-one twisters.

Himatsingka Seide, their weaving division

Their vertical weaving operations handle the entire production process of yarn preparation, yarn dyeing, weaving and finishing. They have 60 weaving machines from Sulzer-Ruti and Dornier of which 30 are equipped with electronic jacquards from Staubli. The looms fitted with the jacquards handle varying repeat sizes up to 68 cms in width.

The weaving operations are integrated through the computer network for efficient process control, CAD and CIM operations. Other equipment like sample warpers and colour matching computers support the production process.

Design Studio

Each Himatsingka fabric is marked by originality in design. The fully equipped Design studio at their factory is supported by a CAD/CAM centre. Designers, artists and stylists interact with each other. Latest styles are discussed and client feedback evaluated. Sometimes, designs are created along with visiting consultants. They specialise in traditional, transitional and contemporary designs.

Every design idea undergoes quality trials and sampling across a variety of yarns and colours. Their weave technicians and full-fledged sampling staff ensure perfect fabric finish. Over the years, they have developed an entire collection of fabrics in different qualities, yarns and colours.

Brunschwig's forest design

The forest theme presented a challenge in execution. Trace the exciting evolution of this design from paper to fabric

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.45.01
UK Pound	1	Rs.84.91
Euro	1	Rs.57.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--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		45

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