MIRA INFORM REPORT

Report Date :

18.04.2007

IDENTIFICATION DETAILS

Name :	VEEJAY LAKSHMI ENGINEERING WORKS LIMITED
Registered Office :	Sengalipalayamnggo Colony, Post Coimbatore; 641022, Tamilnadu
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	26.08.1974
Com. Reg. No.:	000705
CIN No.: [Company Identification No.]	L29191TZ1974PLC000705
TAN No.: [Tax Deduction & Collection Account No.]	CMPV03277B
Legal Form :	Public Limited Liability company. Company’s Shares are listed on the Stock Exchange.
Line of Business :	The company is engaged in manufacturing of textile machinery and cotton yarn.

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 2200000
Status :	Satisfactory
Payment Behaviour :	Regualr
Litigation :	Celar
Comments :	Subject is well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Sengalipalayamnggo Colony, Post Coimbatore; 641022, Tamilnadu, India
Tel. No.:	91-422-460662
Fax No.:	91-422-460453
Website :	www.seekandsource.com/vjlakshmi
Works:	Engineering. Unit - 1 Sengalipalayam Coimbatore-641 022 Engineering. Unit - II Kariyampalayam Annur, Coimbatore - 641 653 Engineering. Unit - III Kariyampalayam Annur, Coimbatore - 641 653 Engineering. Unit - IV Athippalayam Road Vellamadai (P.O) Coimbatore-641 110
Wind Mills:	Kethanur Coimbatore - 638 671 Pollachi Coimbatore - 642 007 Radhapuram Tirunelveli District - 627 011

DIRECTORS

Name :	Sri V.J. Jay Aram An
Designation :	Chairman cum Managing Director
Name :	Sri N. M. Ananthapadmanabhan
Designation :	Director
Date of Birth/Age :	10.03.1935
Date of Appointment :	29.10.2001
List of Outside Directorship:	Lakshmi Automatic Loom Works Limited Veejay Lakshmi Textiles Limited
Name :	Sri B. Selvarajan
Designation :	Director
Address :
Date of Birth/Age :	13.05.1942
Qualification :	L.T.M
Experience :
Date of Appointment :	11.09.1975
List of Outside Directorship:	M/s. The Suguna Mills Pvt. Ltd M/s. Venkatalakshmi Textiles Pvt. Ltd M/s. Veejay Syntex Pvt. Ltd M/s. Veejay Lakshmi Textiles Ltd
Name :	Sri S. K. Mohandass
Designation :	Director
Name :	Sri N. Athimoolam Naidu
Designation :	Director
Date of Birth/Age :	19.04.1943
Qualification :	B.E.M.S
Experience :
Date of Appointment :	24.10.200
List of outside directorship:	M/s. Augustan Knit Wear Pvt. Ltd M/s. Augustan Textile Colours Ltd M/s. Augustan Coimbatore Knitting Company Ltd
Name :	Sri J. Vijayakumar
Designation :	Director
Name :	Sri J. Anand
Designation :	Managing Director
Name :	Sri. B. Sriram
Designation :	Director
Name :	Sri. D. Ranganathan
Designation :	Whole Time Director (Finance & Marketing)

KEY EXECUTIVES

Name :	Mr. K.S. Srinivasan
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter Holding
Promoter Holding- Indian Promoter	3066792	60.466
Non-Promoter Holding
Mutual Funds and DTI	200	0.003
Banks, Fin. Institutions, Insurance Companies	600	0.012
FIIS	187606	3.699
Others
Directors & Relatives	74140	1.462
Private Corporate Bodies	356851	7.036
Indian Public	1375090	27.112
NRI's/OCB's	10621	0.210
Total	5071900	100.00

BUSINESS DETAILS

Line of Business :

The company is engaged in manufacturing of textile machinery and cotton yarn.

Products :

Product Description	Item code No:
Textile Machinery	84.45

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Engineering Division- Textiels machinery and Engineering ancillaries		NA	NA	NA

GENERAL INFORMATION

No. of Employees :

400

Bankers :

State Bank of India

Main Branch, Bank Road, Coimbatore - 641 018

Facilities :

Secured Loan:	As at 31.03.2006
A. Technology Information , Forecasting and assessment Council (TIFAC) (Secured by hypothecation of all moveable assets of the Company which forms part of the projects funded by TIFAC)	28.046
B. Working Capital Facilities-State Bank of India Demand Loan, Cash Credit, Packing Credit and Bills Discounted (Secured by hypothecation of stock in trade and receivables and by a second charge on the fixed assets of the Company. Two Directors of the Company have given their personal guarantee for the above facilities)	101.720

UnSecured Loan:	As at 31.03.2006
Fixed Deposit	22.250
Loan From Directors	0.000

Banking Relations :	Satisfactory
Auditors :
Name :	M/s. N. R. Doraiswami & Company Chartered Accountant
Address :	Coimbatore-641 018
Memberships :	Confederation of Indian Industry
Associates/Subsidiaries :	Subsidiaries: Veejay Lakshmi Textiles Limited Associations: M/s. Veejay Sales and Services Limited M/s. Veejay Terry products Limited M/s. Veejay marketing M/s. Veejay Tool & Die Pvt. Limited M/s. Veejay Savio Lakshmi Machinery Limited (ITEMA INDIA LTD) (Upto 26.01.2006) M/s. Veejay Syntex Pvt. Ltd

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
6000000	Equity Shares	Rs.10/- each	Rs.60.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5071900	Equity Shares	Rs.10/- each	Rs.50.719 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		50.719	50.719	50.700
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		511.679	460.458	400.800
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		562.398	511.177	451.500
LOAN FUNDS
1] Secured Loans		129.767	135.392	130.700
2] Unsecured Loans		22.250	60.635	80.400
TOTAL BORROWING		152.017	196.027	211.100
DEFERRED TAX LIABILITIES		58.549	58.726	0.000
TOTAL		772.963	765.930	662.600
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		336.907	337.985	282.400
Capital work-in-progress		0.000	0.000	0.800
INVESTMENT		180.534	184.058	128.800
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	204.118	211.449	176.000
	Sundry Debtors	19.461	8.950	3.700
	Cash & Bank Balances	77.606	44.187	99.500
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	126.263	169.667	182.100
Total Current Assets		427.448	434.253	461.300
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	99.033	138.100	181.300
	Provisions	72.892	52.266	29.400
Total Current Liabilities		171.925	190.366	210.700
Net Current Assets		255.526	243.887	250.600
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		772.963	765.930	662.600

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		568.758	696.987	856.000
Increased/ Decreased in finished Goods		7.906	2.618	3.600
Other Income		23.855	10.045	(4.200)
Total Income		600.519	709.650	855.400
Profit/(Loss) Before Tax		83.200	106.800	133.200
Provision for Taxation		20.400	35.600	45.200
Profit/(Loss) After Tax		62.800	71.200	88.000
Earnings in Foreign Currency :
	Export and Service	35.723	85.273	0.000
Total Earnings		35.723	120.996	0.000
Imports :
	Raw Materials	3.936	11.641	0.000
	Stores & Spares	82.607	158.441	0.000
	Capital Goods	22.647	15.951	0.000
	Others	0.000	0.000	0.000
Total Imports		109.19	186.033	0.000
Expenditures :
	Raw Material Consumed	300.361	368.931	447.400
	Excise Duty	0.000	0.000	00.000
	Power & Fuel Cost	0.000	0.000	15.200
	Other Manufacturing Expenses	0.000	0.000	72.600
	Employee Cost	0.000	0.000	67.200
	Selling and Administration Expenses	0.000	0.000	67.600
	Miscellaneous Expenses	0.000	0.000	00.200
	Payment to and Provision for employees	81.977	87.782	0.000
	Other Expenses	84.895	95.388	0.000
	Financial charges	12.058	17.206	0.000
	Depreciation & Amortization	37.982	33.478	0.000
Total Expenditure		517.273	602.785	670.200

QUARTERLY RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	160.000	189.600	226.600
Other Income	00.900	01.200	19.200
Total Income	160.900	190.800	245.800
Total Expenditure	130.400	13.700	201.600
Operating Profit	30.500	37.100	44.200
Interest	02.200	01.200	01.300
Gross Profit	28.300	35.900	42.900
Depreciation	09.000	09.400	09.700
Tax	07.100	07.800	02.100
Reported PAT	13.400	18.500	28.100

200606: 1. The above results, which have been subjected to limited Review by the auditors, were taken on record by the Board of Directors at their meeting held on 22.07.2006. 2. During the last quarter the company received 3 complaints and they have been redressed. There was no pending complaints on 30.06.2006. 3. Previous year/quarter figures have been regrouped/rearranged wherever necessary.

200609: EPS is Basic and Diluted 1. The above results, which have been subjected to Limited Review by the Auditors, were taken on record by the Board of Directors at their meeting held on 30.10.2006. 2. During the last quarter the company has not received any complaints .There was no pending complaint as on 30.09.2006. 3. Previous year/quarter figures have been regrouped/rearranged wherever necessary. 4. The consolidated figures though not mandatory for the Half-yearly results have been provided for the information of the shares holders. The figures have been provided only for the current year.

200612: Expenditure Includes Increase/Decrease in Stock in Trade Rs (0.20) million Total Materials consumed Rs 133.10 million Staff Cost Rs 28.10 million Other Expenditure Rs 40.60 million Tax Includes Provision for Current year Taxes - Regular Rs 1.80 million - Deferred Tax Rs 3.00 million - Fringe Benefit Tax Rs 0.30 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 04 Complaints disposed off during the quarter 04 Complaints unresolved at the end of the quarter Nil 1. The above results, which have been subjected to Limited Review by the Statutory Auditors, were taken on record by the Board of Directors at their meeting held on January 18, 2007. 2. Other income includes profit on sale of investment Rs 19.20 million. 3. Previous year / quarter figures have been regrouped / rearranged wherever necessary. 4. The Consolidated figures through not mandatory for the Nine Moths period ended results, have been provided for the information of the shareholders. The figures have been provided only for the current year.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.32	0.42	0.63
Long Term Debt-Equity Ratio	0.14	0.24	0.37
Current Ratio	1.27	1.41	1.53
TURNOVER RATIOS
Fixed Assets	0.87	1.18	1.63
Inventory	2.74	3.60	4.63
Debtors	39.92	109.76	89.23
Interest Cover Ratio	6.33	7.21	6.64
Operating Profit Margin(%)	20.15	22.60	21.69
Profit Before Interest And Tax Margin(%)	13.47	17.79	18.30
Cash Profit Margin(%)	15.23	15.02	13.66
Adjusted Net Profit Margin(%)	8.54	10.22	10.27
Return On Capital Employed(%)	10.78	18.10	23.21
Return On Net Worth(%)	9.05	14.79	21.29

STOCK PRICES

Face Value	Rs.10.00
High	Rs.103.00
Low	Rs.96.10

LOCAL AGENCY FURTHER INFORMATION

Business:

The company has a market share of 70% and above for TFO in the Indian Market. More than 3000 machines has been sold of which 10% have been exported to Nepal, Indonesia, Malaysia, Philippines, Nigeria, Sudan and Egypt. The manufacturing units have acquired ISO 9002 qualification and are equipped with latest state of art sophisticated machines with CNC controls from reputed suppliers in Europe, Japan, Korea and Taiwan. The units are supported by CAD/CAM facilities, R&D Lab, Quality control lab and an efficient customer service cell.

The company entered into a joint venture with Savio Machine Tessili SpA., Pordenone Italy in March 1996 to manufacture Automatic cone winders in India. The functions of Marketing, Machinery and Spare Parts Sales and Customer Service are handled by Veejay Savio Lakshmi Private Limited (VSL).

The companies both the mills are equipped with latest machines including :

Luwa Humidification Plant - Switzerland

Blowroom - Ming Cheng, Taiwan

Cards with Chute feed system and Auto Leveller

Comber - Lakshmi Rieter E7/4

Draw Frame - RSB 851 Auto Leveller Drawing

Simplex - SKF 1600 Top Arm Type Drafting System

Spinning - A310 Sussen Top Arm

Winding - Savio Automatic Cone Winder / Espero L

The Twisting Unit consists of 14 TFO Machines and 3 Large Package TFO Machines to twist yarns of 2 ply to 21 ply for weaving and industrial purposes.

In addition to the above units, to generate power using wind energy, the company installed 4 windmills of total capacity 900 KVA in 1994 at Kethanure, near Palladam in Coimbatore district.

There was a fall in the turnover from Rs. 1375.700 millions in the previous year to Rs. 970.200 millions in the year under report due to poor offtake of the machines from the Engineering Division. The reduction in the turnover and unfavourable market prices for the cotton and yarn had very badly affected the profits and the company has closed the year with a loss of Rs. 54.700 millions as against a profit of Rs. 67.000 millions in the previous year

HISTORY

Subject was originally incorporated on 26^th August, 1974 at Coimbatore as a private limited liability company having Company Registration Number 705. It became a deemed public limited liability company on 1^st July, 1990. It was subsequently converted into a full-fledged public limited liability company by a special resolution passed on 25^th May, 1994.

In the year 1994, public issue was made at a premium of Rs. 75 per share. The shares have been listed on Mumbai, Chennai and Coimbatore Stock Exchange. At present, the company has 5 manufacturing divisions with more than 1500 Employees.

Subject was promoted by V. J. Jayaraman and his family.

It was established to produce textile machinery particularly twisting machines. The company acquired from Sitra the know-how to manufacture twisting machines. The technology was further developed by the company in-house.

During 1993-94, the company diversified into textile spinning, processing and power generation.

The textile process house at Mettupalayam was set up initially to produce/process 600 kg pd each of dyed/bleached yarn. It has installed four windmills each of 225 KVA capacity at Kethanur in Coimbatore, to facilitate its future plans. To provide a smooth transition into yarn manufacture, it acquired a running textile mill at Udumalpet producing fine count yarn. The 7696 spindles mill was modernised and spindles strength progressively increased to 11520 in 1994-95. The new mill at Mettupalayam, Tamilnadu, is working at full capacity (15360 spindles) from March, 1996.

The company obtained the ISO 9002 certification from TUV, Germany, for its engineering unit at Sengalipalayam unit and ISO 9001 certification for its engineering unit at Kariampalayam.

The company's new project to manufacture automatic cone winders for which it has entered into a joint venture with Savio Machine Tessili, Italy has commenced production. The company is concentrating on the indigenous development of the components for which order has been placed for import of laser cutting machine from Japan.

The company is also taking efforts to promote the twisting machines in Mexico, Egypt, Turkey and Indonesia. The textile units are also now concentrating more on the export market and the company aims for 100% exports in textile units. In 1999-2000, the company received a special award for exports of Textile machinery from the Federation of Indian Textile Engineering Industry.

PROFITS/DIVIDENDS

The net profit of the company for the year ending 31st March 2006 is Rs.83.200 Millions as against Rs. 106.900 Millions in the previous year. The fall in profits is due to decrease in sales turnover. To maintain continuity in payment of dividends the Directors recommend a dividend of 20% on the paid up capital of the Company, the same quantum declared for the last year. The total outflow on account of dividend, subject to approval of members in the general meeting, will be Rs.11.600 Millions, including dividend distribution tax.

OPERATIONS

The sale of both the products - Two-for-One Twisters and Automatic Cone winders are lower than the previous year. Hence, the turnover of Rs. 555.800 Millions is lower than the previous year turnover of Rs.689.700 Millions. The fall in the sale of twisting machines is due to the combination of several factors -decline in yarn exports from India, competition from Chinese manufacturers and the filament TFO manufacturers in India, who now offer machines for spun yarn also. The marketing of automatic cone winders was earlier handled by the joint venture company and their company has taken up the marketing of the winders directly from January 2005 only and is yet to stabilize. They expect the demand/sale of both the products to improve in the coming years.

The company has come out of the joint venture arrangement with Savio and has also sold to Savio, the shares held by the company in the Joint Venture Company. While the company has retained the right to continue to produce the automatic cone winders with the know-how given by the Savio, the company has agreed not to use the Trade/Brand names Savio and Espero. The Company is now selling its winders under its own brand name EXCELLO.

The revenue from windmills during the year under review is Rs.13.000 Millions as against Rs.7.300 Millions in the

previous year.

The Aluminium Die Casting division has been strengthened by installing second hand machines imported from Switzerland.

FUTURE PLANS

Many of the spinning mills are modernizing and expanding their capacities and there are also new mills being set up. The company's products -both twisters and winders- are used for post spinning operations and the company expects increase in demand for its products once these increased capacities in spinning come into production. The company has also taken steps to give thrust to its marketing activities by conducting Road Shows and Seminars in different parts of the country and the response is encouraging. The company has got export orders for aluminium components from parties who were buying earlier from the Swiss company from whom they have imported the Aluminium Die Casting machines.

FINANCE

With the internal accruals retained in the business, the borrowings have come down and the working capital limits have also been sparingly used due to comfortable liquidity position in the company The loans from directors have also been fully re paid. All these factors have resulted in reduced outflow on account of interest. The subsidiary has planned for expansion and diversification and the company may provide funds to the Wholly Owned subsidiary for financing its expansion/diversification plans. To subscribe to any additional capital requirement of the Subsidiary, the amount of Rs. 600 lakhs due from the subsidiary has been converted.as share application money.

INDUSTRY STRUCTURE AND DEVELOPMENT

The Company produces textile machinery-namely twisters and winders-which are used in the textile spinning mills for post spinning operations. The Company has also invested in wind mills. Indian textile engineering industry has played a vital role in the development of the textile industry in India. It has the capacity to produce the entire range of machinery for all sectors of the textile industry, particularly for the spinning sector. Most of the local manufacturers offer machines of proven performance and technology. Many of these machines are produced with collaborations/joint ventures with foreign manufacturers.

To support the user industry, the Government has allowed liberal import of textile machinery both new and old. The import of many machines are allowed at concessional rate of duty. There is no level playing field and the inverted duty structures place the local manufacturer in a disadvantageous position European manufacturers compete in the market with their machines produced in China. In this competitive situation, the local manufacturers have to continuously upgrade their products and manufacturing process to meet the demand of the customers.

The Company has also invested in wind mills, the power generated from which is used/adjusted for the power consumed from the State Grid by the Company and its subsidiary. Although there is good growth in the number of wind mills installed, as the State Govt. is not able to provide adequate infrastructure for evacuation of power, the wind mills are not utilized to the optimum generating capacity.

OPPORTUNITIES AND THREATS

Opportunities:

Textile industry in India is the largest export earner. With the removal of quotas for export of textile products, there will be continuous demand for machines of new technology required for modernization and also for capacity expansion.

As India is able to offer machines of proven technology at competitive prices, there will be good scope in the export market also.

Industry is having adequate capacity to meet any surge in demand

Threats:

-Competition from Imports both new and second hand machines

-Superior product technology available with the foreign manufacturers

-Govt. policies encouraging foreign manufacturers to setup facilities in India

-Concession in import duties for export related imports.

Segmentwise/Productwise Performance

There is a 19% decrease in the sales turnover of textile machinery due to decrease in the demand. The sale of twisters has decreased to 236 Nos as against 294 Nos machines in the previous year. The sale of automatic cone winders decreased to 22 Nos as against 32 Nos in the previous year. The income from wind mills has increased to Rs. 13.000 Millions as against Rs. 7.300 Millions in the previous year, due to additional investments made in the previous year.

Outlook

The spinning industry is making investments for modernization and expansion and this will increase the demand for the company's products, which are used for post spinning operations. With the capability to produce products of proven technology at competitive prices, the company will be able to maintain and improve the market share for its products.

Fixed Assets:

Land

Building

Machinery

Electrical Equipments

Diese, Patterns, Jigs and Fixture

Inspection and Testing Machinery

Vechicles

Furniture andOffice Equipments

Work- in –Progress

As Per Web Site:

The company was established in 1976, in Coimbatore, India. With an annual turnover of US$25 million. Company is the largest manufacturer of Two-for-one Twister (TFO) in India with more than 4500 installations worldwide. The company lso the only manufacturer of Automatic Cone Winders (ACW) in India.

Continuing the tradition of commitment in delivering quality products to meet customer requirements, in combination with continuous Research and development for design improvements and cutting edge technology innovation, investments are continuously undertaken in improving the production facilities with the latest advanced technology machines to obtain high productivity, quality and achieve reduction in product costs.

The company was incorporated in the Year 1974 as a private limited company by Sri V.J.Jayaraman and his family. In the year 1994, public issue was made at a premium of Rs 75 per Share. The shares have been listed on Mumbai, Chennai and Coimbatore Stock Exchanges. At present the company has 5 manufacturing divisions with more than 1500 Employees.

Veejay Textile machinery Division

1975 Engineering Unit I Sengalipalayam, Coimbatore Two-for-One-Twister

1993 Engineering Unit II Annur, Coimbatore Two-for-One-Twister

Company has a market share of 70 % and above for TFO in the Indian Market . More than 3000 machines has been sold of which 10% have been exported to Nepal, Indonesia, Malaysia, Philipines, Nigeria, Sudan and Egypt. The manufacturing units have acquired ISO 9002 qualification and are equipped with latest state of art sophisticated machines with CNC controls from reputed suppliers in Europe, Japan, Korea and Taiwan. The units are supported by CAD/CAM facilities, R&D Lab, Quality control Lab and an efficient customer service cell.

1998 Engineering Unit III Annur, Coimbatore Automatic Cone Winder

Company entered into a joint venture with Savio Machine Tessili SpA., Pordenone Italy in March 1996 to manufacture Automatic cone winders in India.Engineering Unit III was established to Assemble/ Manufacture Automatic cone winders in India.The functions of Marketing, Machinery and Spare parts Sales and Customer Service are handled by veejay Savio Lakshmi Private Limited (VSL) .

Veejay Textiles Division

1994 Spinning Mill (8,304 Spindles) Udumalpet 100% Cotton Yarn

1995 Spinning Mill (16,368 Spindles) Thekkampatti 100% Cotton Yarn

Both the mills are equipped with latest machines including

Luwa Humidification Plant - Switzerland

Blowroom - Ming Cheng, Taiwan

Cards with Chute feed system and Auto Leveller

Comber – lakshmi Rieter E7/4

Draw Frame - RSB 851 Auto Leveller Drawing

Simplex - SKF 1600 Top Arm Type Drafting System

Spinning - A310 Sussen Top Arm

Winding - Savio Automatic Cone Winder / Espero L

1995 Twisting Unit Annur, Coimbatore Twisted Yarns

The Twisting Unit consists of 14 TFO Machines and 3 Large Package TFO Machines to twist yarns of 2 Ply to 21 Ply for weaving and industrial purposes.

In addition to the above units, to generate power using wind energy, the company installed 4 windmills of total capacity 900 KVA in 1994 at Kethanur, near Palladam in Coimbatore district.

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	7
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	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		52

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