MIRA INFORM REPORT

Report Date :

26.04.2007

IDENTIFICATION DETAILS

Name :	LEELA SCOTTISH LACE PRIVATE LIMITED
Registered Office :	Leela Baug, Andheri Kurla Road, Marol, Andheri (East), Mumbai - 400 059, Maharashtra, India
Country :	India
Financials (as on) :	31.03.2004
Date of Incorporation :	13.03.1964
Com. Reg. No.:	11-143496
CIN No.: [Company Identification No.]	U17122MH2003PTC143496
TAN No.: [Tax Deduction & Collection Account No.]	CHEL02038B
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer, Importer and Exporter of Readymade Garments for Men, Women and Children.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 11200000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. Directors are reported as experienced, respectable and having satisfactory means of their own. Financial position is good. Payments are reported as correct and as per commitments. The company can be considered good for any normal business dealings.

LOCATIONS

Registered Office :	Leela Baug, Andheri Kurla Road, Marol, Andheri (East), Mumbai - 400 059, Maharashtra, India
Tel. No.:	91-22-28384420 / 21 / 22 / 28363636 / 28342994
Fax No.:	91-22-28365747 / 28365748
Email :	leelabom@bom3.vsnl.net.in
Corporate Office :	A8 & 9, Guindy Industrial Estate, Chennai – 600 032, Tamilnadu, India.
Tel. No.:	91-44-22346604 / 22346360 / 22343126 / 22346604 / 22343539
Factory :	Ø Plot No. 22 SP, Thiru Vi Ka Industrial Estate, Guindy, Chennai – 600 032, Tamilnadu, India Tel No.: 91-44-28384420/ 28342994 Fax No.: 91-44-28365747/ 48 Ø 498, Stage 3, Phase 4, Peenya, Bangalore – 560 056, Karnataka, India Tel No.: 91-80-28362410 / 28362415 / 28361309 / 28361308 / 28365160 Ø Yeshwantpur Bangalore Ø Block No. 9, Kinfra, kakkand, Emakulam, Karla Ø B-11, Ambattur Industrial Estate, Chennai Ø 41, Ambattur Industrial Estate, Chennai
Branches :	103, Haudin Road, Bangalore – 560 042, Karnataka Tel. No. 91-80-25592346 498, Stage 3, Phase 4, Peenya, Bangalore – 560 056, Karnataka Tel No. 91-80-28362410 / 28362415 /28361309 / 28361308 / 28365160 102/9, Stafford, Haudin Road, Bangalore – 560 001, Karnataka Tel No. 91-80-25593638 26/1A, Mysore Road, Bangalore – 560 059, Karnataka Tel No. 91-80-28605160 10/6SP, 3^rd Main Road, Ambattur Industrial Estate, Chennai – 600 058, Tamilnadu Tel No. 91-44-26259547 B-34, Nelson Court, 117, Nelson Manickkam Road, Aminjikarai, Chennai, Tamilnadu Tel No. 91-44-23741679 B-7 & 8, Industrial Estate, Ambattur Industrial Estate, Chennai – 600 058, Tamilnadu Tel. No. 91-44-26244462 B-7, Industrial Estate, Ambattur Industrial Estate, Chennai – 600 058, Tamilnadu Tel No. 91-44-26253612 C25, Nelson Manickkam Road, Aminjikarai, Chennai, Tamilnadu Tel No. 91-44-23740643 10/7, 3^rd Main Road, South Phase, Ambattur Industrial Estate, Chennai – 600 058, Tamilnadu Tel No. 91-44-26510363 / 26253194 / 26258478 B 11, Ambattur Industrial Estate, Chennai – 600 058, Tamilnadu Tel No. 91-44-26251110 / 26251845 / 26253591 Victoria Garden, 20, Inner Ring Road, Koyambedu, Chennai – 600 107, Tamilnadu Tel No. 91-44-24753237

DIRECTORS

Name :	Mr. C. K. P. Nair
Designation :	Chairman
Address :	Leela Baug, Andheri Kurla Road, Andheri (E), Mumbai – 400059
Date of Birth/Age :	01.04.1923
Date of Appointment :	13.03.1964
Name :	Mr. Dinesh Nair
Designation :	Managing Director
Address :	Leela Baug, Andheri Kurla Road, Andheri (E), Mumbai – 400059
Date of Birth/Age :	24.12.1955
Date of Appointment :	01.07.1979
Name :	Mrs. Madhu Nair
Designation :	Director
Address :	Leela Baug, Andheri Kurla Road, Andheri (E), Mumbai – 400059
Date of Birth/Age :	01.11.1961
Date of Appointment :	11.07.2000
Name :	Mrs. Lakshmi Nair
Designation :	Director
Address :	Leela Baug, Andheri Kurla Road, Andheri (E), Mumbai – 400059
Date of Birth/Age :	25.05.1955
Date of Appointment :	11.07.2000
Name :	Mr. Vivek Nair
Designation :	Director
Address :	Leela Baug, Andheri Kurla Road, Andheri (E), Mumbai – 400059
Date of Birth/Age :	03.01.1952
Date of Appointment :	18.06.1976
Name :	Mrs. P. V. Leela Amma Nair
Designation :	Director
Address :	Leela Baug, Andheri Kurla Road, Andheri (E), Mumbai – 400059
Date of Birth/Age :	13.06.1931
Date of Appointment :	14.08.1985
Name :	Mr. Venu Krishnan
Designation :	Director
Address :	303, Anmol Apartment, Andheri Kurla Road, Andheri (E), Mumbai – 400059
Date of Birth/Age :	18.07.1954
Date of Appointment :	01.10.1996
Name :	Mr. Hemant S Toprani
Designation :	Company Secretary
Address :	E / 704, Charkop Mahavir Darshan, Co. Operative Housing Society Limited, Charkop, Sector II, Near Ekvira Police Station, Kandivali (W), Mumbai – 400067
Date of Birth/Age :	08.11.1963
Date of Appointment :	27.01.1998

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Equity Shares
Mr. C. K. P. Nair	1266432
Leela Krishnan Nair	2028800
Mr. Dinesh Nair	1360072
Mr. Vivek Nair	1360000
VKN Investments Private Limited	1536064
Madhu Nair	320000
Lakshmi Nair	173312
LVK Investments Private Limited	160120
Total	8204800
	No. of Preference Shares
Narendra Mehta	1
S. Venkatachalam	1
Tropicate Textile Private Limited	2300000
Leela Lace international Limited	460000
Total	2760002

BUSINESS DETAILS

Line of Business :

Manufacturer, Importer and Exporter of Readymade Garments for Men, Women and Children.

Products :

ITC Code No	Product Description
264104	Readymade Garments

Exports to :

Europe and USA

PRODUCTION STATUS

Particulars	Unit	Actual Production
Readymade Garments	Pcs.	8559884

GENERAL INFORMATION

No. of Employees :

Around 1243

Bankers :

Central Bank of India

J. B. Nagar Branch, Andheri (East), Mumbai

Industrial Development Bank of India Limited

IDBI Towers, Cuffe Parade, Colaba, Mumbai - 400005

Facility :

Secured Loan	Rs. In Millions
From Financial Institutions	23.021
From Bank
Working Capital Facility	404.471
Term Loan	238.010
From Others	727.279
Total	1392.781

Banking Relations :	Good
Auditors :	N. S. Shetty & Company Chartered Accountants 28/1, Mittal Industrial Estate, Andheri-Kurla Road, Marol, Andheri (East), Mumbai – 400059, Maharashtra, India
Associates :	Ø Leela International Limited Ø Leela Fashions Private Limited Ø LVK Investments Private Limited Ø Beacon Fabrics Private Limited Ø Tropicate Textiles Private Limited Ø Season Apparels Private Limited Ø Wondercraft Apparels Private Limited Ø Leela Soft Private Limited Ø Aushim Soft Private Limited Ø Leela Housing Private Limited Ø Elegant Eateries Private Limited Ø Vibgyor Leasing Private Limited Ø Oceanic Hotels Private Limited Ø Splendour Realtors Private Limited Ø Leela Capital and Finance Limited Ø Scientific Packaging Industries
Subsidiaries :	Ø Leela Industries Limited Ø Hotel Leela Venture Limited Ø Standard Precious Alloy Industries Private Limited Ø Chemtec Water Conditioners Private Limited Ø VKN Investments Private Limited Ø PSPL Polymers Private Limited Ø Zantho Pharmaceuticals Private Limited Ø Armcess Engineers Private Limited Ø Design Creations Mumbai Private Limited Ø Mumbai International Convention and Exhibition Centre Limited Ø Arnin Group Hotel Limited Ø Vision Hotels and Resorts Limited Ø Leela Lace HK Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10,000,000	Equity Shares	Rs. 10/-each	Rs. 100.000 Millions
4,000,000	Redeemable Preference shares	Rs. 100/- each	Rs. 400.000 Millions
	Total		Rs. 500.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8,204,800	Equity Shares	Rs. 10/-	Rs. 82.048 millions
2,760,002	Redeemable Preference shares	Rs. 100/- each	Rs. 276.000 millions
	Total		Rs. 358.048 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2004	31.03.2003	31.03.2002
SHAREHOLDERS FUNDS
1] Share Capital		358.048	131.998	157.498
2] Reserves & Surplus		2444.182	2346.576	2241.339
NETWORTH		2802.230	2478.574	2398.837
LOAN FUNDS
1] Secured Loans		1392.781	1325.579	1351.506
2] Unsecured Loans		586.671	597.821	604.213
TOTAL BORROWING		1979.452	1923.400	1955.719
DEFERRED TAX LIABILITIES		65.781	61.165	0.000
TOTAL		4847.463	4463.139	4354.556
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1402.213	1351.720	1330.926
Capital work-in-progress		35.504	--	--
INVESTMENT		2259.178	2260.170	1961.054
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	539.868	409.865	322.967
	Sundry Debtors	392.457	299.153	526.478
	Cash & Bank Balances	56.580	90.969	109.307
	Loans & Advances	1103.359	950.333	863.550
Total Current Assets		2092.264	1750.320	1822.302
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	678.252	903.840	765.242
	Provisions	267.466	--	--
Total Current Liabilities		945.718	903.840	765.242
Net Current Assets		1146.546	846.480	1057.060
MISCELLANEOUS EXPENSES		4.022	4.769	5.516
TOTAL		4847.463	4463.139	4354.556

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2004	31.03.2003	31.03.2002
Sales Turnover [including other income]	2644.943	2398.391	1856.488
Profit/(Loss) Before Tax	122.900	196.691	207.371
Provision for Taxation	6.715	20.852	47.499
Profit/(Loss) After Tax	116.185	175.839	159.872
Export Value	2324.122	2148.957	1568.421
Import Value	798.180	660.449	382.578
Total Expenditure	2522.043	2201.699	1649.116

KEY RATIOS

PARTICULARS		31.03.2004	31.03.2003	31.03.2002
PAT / Total Income	(%)	4.39	7.33	8.61
Net Profit Margin (PBT/Sales)	(%)	4.65	8.20	11.17
Return on Total Assets (PBT/Total Assets}	(%)	3.52	3.67	4.05
Return on Investment (ROI) (PBT/Networth)		0.04	0.08	0.08
Debt Equity Ratio (Total Liability/Networth)		1.04	2.16	2.13
Current Ratio (Current Asset/Current Liability)		2.21	1.93	2.38

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS

Ø Freehold Land

Ø Building

Ø Plant and Machinery

Ø Electrical Installations

Ø Furniture and Fixture

Ø Office Equipments

Ø Vehicles

HISTORY

The company was incorporated on 13^th March, 1964 at Mumbai in Maharashtra having Company Registration Number 12871.

The Registered Office of the company was transferred from Mumbai in Maharashtra to Chennai in Tamilnadu with effect from 30^th May, 2003 and a new Company Registration Number 50994 of Chennai ROC was obtained.

The Registered office of the company again transferred to Mumbai w.e.f. 11^th December, 2003 and a new Company Registered No. 11-143496 of Mumbai ROC was obtained.

It was converted into on Private Limited Liability Company w.e.f. 06.06.2003.

OPERATIONS

The company has performed better during the year under review, by increase in exports of readymade garments aggregating to Rs. 2313.000 Millions in comparison with the exports of Rs. 2149.000 millions in the precious year. the profit before tax (PBT) is decreased in comparison with the previous years PBT of Rs. 196.600 millions to Rs. 122.900 millions. The export Oriented Units set up in Chennai and Bangalore has resulted in the increase of the export performance of the Company during the year under review.

The profit before tax has decreased, as the operational cost increased during the year under review, with the commercial operations in the units. The directors expect to reduce the operating cost with the increased strength of production and good export orders in the forthcoming years.

The company remained a net foreign exchange earner. The directors are confident of achieving better growth in the coming years.

REGISTERED OFFICE

The shifting of the Registered Office form the State of Tamil Nadu to the State of Maharashtra received an approval form the Members in the Extraordinary General Meeting held on 10^th October, 2003 and received confirmation from the Company Law Board, Southern Region Bench, Chennai on 28^th November, 2003.

Its' product range include the following :

Ø Knitted Garments

Ø Laces

Ø Liner Sets

Ø Mosquito Nets

Subject is a Government Recognised Export House.

Name of the company	LEELA SCOTTISH LACE PRIVATE LIMITED
Presented By	Mr. Hemant D. Toprani
1) Date and description of instrument creating the change	Deed of Hypothecation was executed on 4^th August, 2004 by the Company in favour of Industrial Development Bank of India, (IDBI) Hereinafter referred to as “the Lender” A certified copy of the said Deed of Hypothecation in enclosed.
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 200.000 Millions i.e. Rs. 120.500 Millions under the Corporate loan scheme and Rs. 79.500 Millions under the Technology Up gradation Fund Scheme agreed to be lent and advanced by IDBI together with interest, additional interest, liquidate damages, commitment charges, premia on prepayment or on redemption, costs, charge, expenses and all other moneys payable by the Company to IDBI in terms to two separate Loan Agreements each dated the company of the one Part and the lender of the other Part.
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	The Whole of the movable properties of the company more particularly situate at he following location of the company Yeshwantpur Bangalore Block No. 9, Kinfra, kakkand, Emakulam, Karla B-11, Ambattur Industrial Estate, Chennai 41, Ambattur Industrial Estate, Chennai including its movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future whether installed or not and whether now lying loose or in cases or which are nor lying or stored in or about or shall hereafter from time to time during the continuance of the security of these presents be brought into or upon or be stored or be in or about all the company’s factories, premises and godwons ore whether else the same may be or be held by any party to the order or disposition of the company’s or in the course of transit or on high seas or order, or delivery, however and whosesoever in the possession of the Borrower and either by way of the substitution or addition
4) Gist of the terms and conditions and extent and operation of the charge.	The charge operates as security inter alia, for the due repayment by the company to IDBI of the loans aggregating Rs. 200.000 Millions together and all other money payable by the company to IDBI in terms of the said Loan Agreement. The said loans shall be repayable in 54 equal monthly installments commencing form June 1, 2005 Interest @ 11 % p.a. shall be payable monthly on the outstanding principal amount. Such interest shall be paid on the first day of each English claender month. The charge in favour of IDBI under the said Deed of Hypothecation is subject to the charge (a) created and to be created by the company in favour of its bankers on the company stocks of raw material, semi finished and finished goods and consumable stores and book debts and such other movable as may be specifically permitted to secure its working capital requirements in the ordinal course of business. The company has undertaken to keep the goods hypothecated in marketable and good condition at its own costs and to insure the same in the joint names of the company and the Lenders. All the goods hypothecated and all realizations and insurance proceeds thereof and all documents in respects of the said security are to be kept distinguishable and held as the exclusive property of the lenders. The security created under the said Deed of Hypothecation is to be a continuing security.
5) Name and Address and description of the person entitled to the charge.	Industrial Development Bank of India Limited IDBI Towers, Cuffe Parade, Colaba, Mumbai - 400005
6) Date and brief description of instrument modifying the charge	Amendatory deed of hypothecation dated March 02, 2005 executed by the company in favour of the Lender stating, inter alia, that the charge already created by Deed of Hypothecation dated 04.08.2004 shall also include the movable properties of the company situated at Chennai and Bangalore as security for the due repayment of the loan of Rs. 200.000 Millions together with interest, compound interest, additional interest, liquidated damages, premia on prepayment or in redemption, costs, charges, expenses and other monies payable by the Company to IDBI under the separate Loan Agreement dated July 30, 2004.
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	The deed of hypothecated dated 04.08.2004 has been modified / amended by the Amendatory deed of hypothecation dated March 02, 2005 to include within its purview of chrge the movable assets of the Company situate at eh place more particularly described in the Annexure. All the movable properties of the company, present and future situate at the place more particulars described in the Annexure shall continue to be charged to the Lender as security for the loan. All the terms and conditions contained in the deed of hypothecation, except to the extent modified to include the movable properties situate at Chennai and Bangalore, shall continue to the Valid and be in force.

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.40.78
UK Pound	1	Rs.81.79
Euro	1	Rs.55.66

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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		72

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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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