MIRA INFORM REPORT

Report Date :

18.11.2006

IDENTIFICATION DETAILS

Name :	LAKSHMI CARD CLOTHING MANUFACTURING COMPANY PRIVATE LIMITED
Registered Office :	Semmipalayam Kuppusway Naidupuram, Coimbatore - 641 662, Tamil Nadu, India
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	06.01.1960
Com. Reg. No.:	18-343
CIN No.: [Company Identification No.]	U17219TZ1960PTC000343
TAN No.: [Tax Deduction & Collection Account No.]	CMBL03203E
Legal Form :	Private limited liability company
Line of Business :	Manufacturer of Card Clothing and Card Room Service Machineries

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 1500000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company of LMW Group, a well- known industrial house of Coimbatore. Trade relations are fair. Financial position is good. Payments are correct and as per commitments. The company can be considered good for normal business dealing at usual trade terms and conditions.

LOCATIONS

Registered Office :	Semmipalayam Kuppusway Naidupuram, Coimbatore - 641 662, Tamil Nadu, India
Tel. No.:	91-4255-277105 to 277 107
Fax No.:	91-4255-277107
Website :	http://www.lakshmicardclothing.com
CorporateOffice :	Lakshmi Plaza, 1089, Avanashi Road, Coimbatore – 641037, India
Tel. No.:	91-422-210 205 [4 Lines]
Fax No.:	91-422-216694
E-Mail :	lakscard@md3.vsnl.net.in lccsocbe@md4.vsnl.net.in
Website :	www.lakshmicardclothing.com
Corporate Office :	Kuppuswamynaidupuram Post 641 662, Coimbatore District
Factory 1 :	Samipalayam Village, Kuppuswami Nalcker Puram, Palada Taluk, Coimbatore - 641662, INDIA
Selling Agent :	1413, Trichy Road, Coimbatore – 641014, India
Tel. No.:	91-422-2303083
Fax No.:	91-422-2301515
E-Mail :	gtulasir@voltasltd.com
Liaison Office:	191, Marshalls Road, Egmore - 600 008, Chennai, Tamil Nadu, India
Tel. No.:	91-44-2855 4990 / 2855 4369
Branches :	Ahemedabad 203, Anshi Avenue, Behind Ketav Petrol Pump, Opp. to Vandana School, Gulbai Tekra, Ahmedabad 380 015, Gujarat, India Phone - 91-79 -2646 5754 Fax - 91-79 -2646 4933 E-mail - lccsoahdad1@sancharnet.in Chandigarh "Meeting Point", S.C.O.487-488, Sector 35-C, Chandigarh 160 022 Phone - 91 172 508 7324, 260 3771 (Extn.216) Fax - 91 172 262 1404 (Direct) E-mail - lccsochn@sancharnet.in Hyderabad 302, Pragathy Enclave, Bhagya Nagar Colony Opp: Kukat Pally Housing Board, Kukat Pally Post Hyderabad 500 072 Phone - 91-40-2306 5542 Mobile - 91-98481 35542 E-mail - lccsohyd@vsnl.net Indore 305, Yesodha Apartments, 6/7, Mahaveer Nagar, Kanadia Road, Indore 452 018 (Madhya Pradesh) Phone - 91-731-503 5175 Mobile - 91-98263 95175 E-mail - lccsoind@sancharnet.in Kolhapur E/1894, F-1, Karekar Sankul, Rajarampuri 10th Lane, Kolhapur 416 008 Phone - 91-231-252 9709 Mobile - 91-98222 77791 E-mail - kpr_lccsokol@sancharnet.in Kolkata 32/3, Doctor Bagane Lane, P.O. Serampore 712 203 Dist.Hooghly (West Bengal) Phone – 91-33-2622 3142 E-mail - lccsocal@cal3.vsnl.net.in Madurai I-3 SIDCO Industrial Estate, K.Pudur, Madurai 625 007, Tamil Nadu Phone - 91-452-256 5855, 256 6756 Fax - 91-452-256 8263 E-mail - lccsomd3@sancharnet.in Nagpur Flat No.203, Sukhakarta Apartments, 15, Balraj Marg, Dhantoli, Nagpur 440 012, Maharashtra Phone - 91-712-2548340 Mobile - 91-98229-32770 E-mail - lccsongp@sancharnet.in Noida 403-C, Ocean Plaza, Sector 18, Noida 201 301 Dist.Gautam Budh Nagar, Uttar Pradesh Phone - 91-120-2511047/019 Fax - 91-120-2591498 E-mail - lccsondl@del2.vsnl.net.in

DIRECTORS

Name :	Mr. S. K. Sundaram
Designation :	Chairman
Name :	Mr. R. Santhanam
Designation :	Vice Chairman and Managing Director
Name :	Mr. S. Pathy
Designation :	Director
Name :	Mr. Ralph a. Graf
Designation :	Director
Name :	Mr. R. C. H. Reddy
Designation :	Director
Name :	Mr. S. Harishankar
Designation :	Whole Time Director
Name :	Mr. M Thangavelu
Designation :	Director
Name :	Mr. V Mohan
Designation :	Director
Name :	Mr. M Palaniswamy
Designation :	Director

KEY EXECUTIVES

Name	Mr. S. K. Sundaram
Designation	Chairman
Date of Birth	20.19.1914
Address	27, Circuit House Road, Coimbatore – 641018, India
Name	Mr. R. Santhanam
Designation	Vice Chairman and Managing Director
Date of Birth	04.03.1938
Address	Prathisht, 183, Race Course Road, Coimbatore – 641018, India

Name	Mr. S. Pathy
Designation	Director
Date of Birth	17.11.1949
Address	Rasakondalu, 27, Circuit House Road, Coimbatore – 641018, India

Name	Mr. Ralph A. Graf
Designation	Director
Date of Birth	25.09.1939
Address	Graf Sales Limited, 28, Burgstrasse CH 8750, Switzerland

Name	Mr. R. c. H. Reddy
Designation	Director
Date of Birth	01.06.1935
Address	48, Race Course Road, Coimbatore – 641018, India

Name	Mr. S. Harishankar
Designation	Whole Time Director
Date of Birth	07.05.1973
Address	Prathishta, 183, Race Course Road, Coimbatore – 641018, India

MAJOR SHAREHOLDERS

Names of Shareholders	Percentage of Holding
Directors & Promoters/Relatives	85.00
Paid-up Capital held by Foreign Company	15.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Card Clothing and Card Room Service Machineries
Product	Card Clothing v Cylinder Wires v Doffer Wires v Flat Tops v Lickerin Wires v Special Wires v Stripping Fillets C-Cleaner Mark II Carding Systems v Pre-operating Segments (POS) v Stationary Flats above Lickerin (SFL) v Stationery Flats above Doffer (SFD) v Stationery Flats above Doffer (SFD) v C-Factor System Card Room Accessories v Bare Cylinder Grinder v Metallic Wire Mounting Equipment v Motorised Traverse Wheel Grinder v Gravita-Traverse Wire Sharpener v Restore – On the Card Flats Grinding Machine v Flat End Milling Machine v Flat Mounting Machine – DAM 40 v Automatic Flat Grinding Machine v Multi Roller Mounting Machine v Flat Mounting Machine v Automatic Flat Grinding Machine Hydro Extractor RF Dryer
Exports to :	Africa, Europe, Far East Asia, Middle East
Imports from :	Europe and Japan

GENERAL INFORMATION

No. of Employees :

800

Bankers :

v Bank of Baroda, Coimbatore - 641001, Tamil Nadu, India

v Andhra Bank, Andhra Bank, Mill Road, Coimbatore, Tamil Nadu

Facilities :

The subject is enjoying the following facilities from Andhra Bank as per agreement dated 28.06.2006

Particulars	Amount (Rs. In Millions)
Fund Based
Cash Credit Hypothecation	32.500
Discounted	1.000
FBP/FBD	5.000
Bills Discounting by IDBI	0.500
Term Loan – Wind Mill	21.750
Total	60.750
Non Fund Based Limits
Letter of Credit	15.000
Guarantees	1.000
Total	16.000

It is secured against immovable properties of land admeasuring area of 40.12 Acres situated at Kuppusamy Puram, Palladam Taluk, Coimbatore, Tamil Nadu and land area: 12.06 acres situated at Nallatipalayam, Kinathukadavu, Pollachi Taluk in Coimbatore District, Tamil Nadu.

Hypothecation of plant and machinery, stocks and book debts of the company.

Banking Relations :

Good

Auditors :

M/s Subbchar & Srinivasan

Chartered Accountants

34, Kalingarayar Street, Ram Nagar, Coimbatore 641 009

M/s Rajagopalan

Chartered Accountants

65-A, Venkata Samy Road, R.S. Puram, Coimbatore – 641 002

Associates :

Ø The Lakshmi Mills Company Limited

1100, Avanashi Road, Coimbatore-641037, Tamil Nadu, India

Tel. No. 91-422-2215461/68

Fax No. 91-422-2216508

E-mail : contact@lakshmimills.com

Ø Lakshmi Machine Works Limited, Coimbatore, Tamil Nadu, India

Ø Lakshmi Automatic Lom Works

Ø Lakshmi Synthetic Machinery Manufacturers Limited

Ø Lakshmi Systems Academy

Membership :

Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
500,000	Equity Shares	Rs. 100/- each	Rs. 50.000 million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
300,000	Equity Shares	Rs. 100/- each	Rs. 30.000 million

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		30.000	30.000
3] Reserves & Surplus		370.516	318.325
NETWORTH		400.516	348.325
LOAN FUNDS
1] Secured Loans		98.673	99.175
2] Unsecured Loans		114.637	97.833
TOTAL BORROWING		213.310	197.008
DEFERRED TAX LIABILITIES		12.986	17.270
TOTAL		626.812	562.603
APPLICATION OF FUNDS
		108.201	96.740
FIXED ASSETS [Net Block]		0.000	2.884
Capital work-in-progress
INVESTMENT		87.168	53.139
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	124.357	125.447
	Sundry Debtors	151.068	122.776
	Cash & Bank Balances	207.836	176.399
	Other Current Assets	0.000	0.000
	Loans & Advances	212.867	155.762
Total Current Assets		696.128	580.384
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	110.512	81.527
	Provisions	155.518	90.814
Total Current Liabilities		266.030	172.341
Net Current Assets		430.098	408.043
MISCELLANEOUS EXPENSES		1.345	1.797
TOTAL		626.812	562.603

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005
Sales Turnover [including other income]	798.217	630.634
Profit/(Loss) Before Tax	138.735	101.989
Provision for Taxation	48.916	38.751
Profit/(Loss) After Tax	89.819	63.238
Export Value	106.155	81.940
Import Value	75.131	NA
Total Expenditure	608.696	487.318

KEY RATIOS

PARTICULARS	31.03.2005	31.03.2004
PAT / Total Income	11.25	10.03
Net Profit Margin	17.68	16.37
Return on Total Assets	10.06	8.60
Return on Investment (ROI)	22.43	18.15
Current Ratio	2.62	3.37
Quick Ratio	2.15	2.64
Debt Equity Ratio	0.53	0.57
Current Liabilities/Networth	0.66	0.49
Fixed Asset / Networth	0.27	0.28
Average Collection Days	70.28	71.94
Account Receivables Turnover	5.19	5.07
Inventory Turnover	6.31	4.97
Asset Turnover	7.25	6.44

LOCAL AGENCY FURTHER INFORMATION

Subject has entered into foreign collaboration with equity participation of 15%.

The company’s product range include :

¯ Card Clothing

Ø Cylinder Wires

Ø Doffer Wires

Ø Flat Tops

Ø Lickerin Wires

Ø Special Wires

Ø Stripping Fillets

¯ C-Cleaner Mark II Carding System

¯ Card Room Accessories

¯ Radio Frequency Dryer

¯ Hydro Extractor [Brand Name Zeneros] – It is specially designed for centrifuge of yarn cones or cheeses after dyeing

¯ R.F. Dryer [Brand Name INSTA] – It is very useful in cases where the textile materials are to be dried after dyeing, mercerising or wet processing.

The company exports Metallic Card Clothing, Flat Tops, Lickerin Wire Stripping Fillets, C-cleaners, OE-rollers, Card Room Accessories, Radio Frequency Dryers.

The company imports Steel Wire Rods, Steel Card Wire

It is in trade terms with :

> Raymonds Limited, Chinchwada, Maharashtra, India

> Tuticorin Spinning Mills Limited, Tuticorin, Tamil Nadu, India

> Dev Tharea Rag Rugs, Ghaziabad, Uttar Pradesh, India

> Precot Mills Limited, Unit STP Dyeing

> Sivasakthi Tex Processes, Tirupur, Tamil Nadu, India

The company is a part of the celebrated Indian corporate house ‘The House of Lakshmi’ which holds a prestigious position in the textile and textile machinery market. The company offers the ‘Complete Card Room Technology’.

The company is capable of manufacturing complete range of Card Clothing and Card Room Service Machineries. They have been awarded the EN-ISO 9001 certification by RW-TUV of Germany, which turns out to be the recognition of its expertise in designing, development, manufacturing and servicing in the domain of Card Clothing.

The subject company has recently launched 6 new products. In addition to the existing cardroom accessories, 4 new products have been launched. One product - CuttySharp II from Card Clothing & one more product - C-Factor Carding System has also been launched

The efforts of its R & D team backed by expertise and quality is sustained by its close association with leading Original Equipment Manufacturers like LMW an TRUMAC. This has lead to the development of sophisticated products, which have revolutionised the carding technology.

AS PER WEBSITE

Lakshmi Card Clothing is a part of the celebrated Indian corporate house "THE HOUSE OF LAKSHMI" which holds a prestigious position in the textile and textile machinery market. Lakshmi Card Clothing offers the "Complete Card Room Technology".

They are capable of manufacturing complete range of Card Clothing and Card Room Service Machineries. They have been awarded the EN - ISO 9001 : 2000 certification by RW-TUV of Germany, which turns out to be the recognition of their expertise in designing, development, manufacturing & servicing in the domain of Card Clothing.

The efforts of their R&D team backed by expertise and quality is sustained by its close association with leading Original Equipment Manufacturers (OEM) like LMW and TRUMAC. This has lead to the development of sophisticated products, which have revolutionized the carding technology.

Products

They produce a variety of products to meet the basic and comfort needs of modern spinners for carding all types of fibres to improve quality.

Products Include:

· Card Clothing

· C - Cleaner MARK II Carding System

· C - Factor Carding System

· Card Room Accessories

· Radio Frequency Dryer & Hydro Extractor

Services

Lakshmi Card Clothing has a well linked Sales and Service network. This helps us in providing excellent service and support to their customers.

They are represented by both International & National selling agents.

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.44.86
UK Pound	1	Rs.84.97
Euro	1	Rs.57.59

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--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	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		68

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