MIRA INFORM REPORT

Report Date :

16.11.2007

IDENTIFICATION DETAILS

Name :	FARIDA CLASSIC SHOES PRIVATE LIMITED
Registered Office :	151/4, Mount Poonamalle Road, Ramapuram, Chennai- 600 116, Tamilnadu
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	09.06.1981
Com. Reg. No.:	18-8805
CIN No.: [Company Identification No.]	U18209TN1981PTC008805
PAN No.:	CHEF00073D
Legal Form :	Private Limited Liability Company.
Line of Business :	Subject is engaged in as manufacturer of Leather Closed Shoes, Leather Shoe Uppers and Shoe Components and Exporter of Footwear and Footwear Components.

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 1041000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Their trade relations are reported as fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered good for any normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	151/4, Mount Poonamalle Road, Ramapuram, Chennai- 600 116, Tamilnadu, India
Tel. No.:	91-44-22523868
Fax No.:	91-44-22523870
E-Mail :	fcsl@giasmd01.vsnl.in , fcsl@farida.com , holding@farida.com
Head Office :	162, Periyar EVR High Road, Chennai-600084, Tamilnadu, India
Tel. No.:	91-44-26411220/26412189
Fax No.:	91-44-26412187
E-Mail :	fcsl@vsnl.com
Website :	http://www.farida.com
Area :	8000 sq.ft.
Location :	Owned
Factory 1 :	180A, Mount Poonamalle Road, Chennai-600116, Tamilnadu, India
Tel. No.:	91-44-2493896/2494784
Fax No.:	91-44-26412187
Area :	50000 sq.ft.
Location :	Owned
Factory 2 :	151/4, Mount Poonamalle Road, Ramapuram, Chennai-600089, Tamilnadu, India
Tel. No.:	91-44-22495518/22495503
Fax No.:	91-44-22492734
E-Mail :	fcsl@giasmd01.vsnl.in
Sales and City Office:	162, EVR Periyar High Road, Chennai- 600 084, Tamilnadu, India
Tel. No.:	91-44-26411220/ 26411279
Fax No.:	91-44-26412187/ 26412189
E-Mail :	fcsl@giasmd01.vsnl.in
Branch :	Located at : · 22 Atkinson Road, Vepery, Chennai-600007, Tamilnadu, India
Tel. No.:	91-44-25368066
Fax No.:	91-44-22492734

DIRECTORS

Name :	Mr. Rafeeque Ahmed Mecca
Designation :	Managing Director
Address :	10, Kothari Road, Nugambakkam, Chennai – 600 034, Tamilnadu, India
Date of Birth/Age :	17.09.1947
Date of Appointment :	09.06.1981
Name :	Mr. Iqbal Ahmed Mecca
Designation :	Wholetime Director
Address :	10, Kothari Road, Nugambakkam, Chennai – 600 034, Tamilnadu
Date of Birth/Age :	10.10.1969
Date of Appointment :	09.06.1981

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Mr. M. Rafeeque Ahmed	1
Farida Holdings Limited	46199

Names of Shareholders	Percentage of Holding
Bodies Corporate	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Subject is engaged in as manufacturer of Leather Closed Shoes, Leather Shoe Uppers and Shoe Components and Exporter of Footwear and Footwear Components.
Products :	þ Shoe Uppers þ Shoes þ Footwear Components
Exports to :	Germany, Japan and UK

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Shoe Uppers	Pairs	1000000	1000000	877017

GENERAL INFORMATION

No. of Employees :

920

Bankers :

State Bank of India

Leather International Branch, Kilpauk, Chennai – 600 034, Tamilnadu, India

Facilities :

Secured Loan

(Rs. In millions)

	31.03.2005
State Bank of India – Packing Credit A/c	7.636

Unsecured Loan

(Rs. In millions)

	31.03.2005
State Bank of India	2.393

Banking Relations :	Satisfactory
Auditors :
Name :	B Kalyanasundaram and Company Chartered Accountants
Address :	18 (Old No. 22), Second Cross Street, Lake Area, Nungambakkam, Chennai – 600 034, Tamilnadu, India
Tel. No.:	91-44-28275902
Holding Company :	Farida Holdings Private Limited
Associates :	Ø Farida Leather Ware Private Limited, 162 EVR Periyar Road, Chennai-600084, Tamilnadu, India -- Manufacturers and Exporters of finished leather Ø Farida Prime Tannery, 151/4, Mount Poonamalle High Road, Ramapuram, Chennai-600089, Tamilnadu, India --Tanners for the group Ø Farida Shoes Limited, 180 A, Mount Poonamalle High Road, Ramapuram, Chennai-600116, Tamilnadu, India -- Manufacturers and Exporters of Leather Shoes Ø Farida New Line Studio Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
2,00,000	Equity Shares	Rs. 100/-	Rs. 20.000 million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
46,200	Equity Shares	Rs. 100/-	Rs. 4.620 million

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	4.620	4.620	4.620
2] Reserves & Surplus	255.533	254.878	253.234
NETWORTH	260.153	259.498	257.854
LOAN FUNDS
1] Secured Loans	57.014	7.636	17.774
2] Unsecured Loans	2.517	2.394	5.439
TOTAL BORROWING	59.531	10.030	23.213
DEFERRED TAX LIABILITIES	24.126	24.852	23.934
TOTAL	343.810	294.381	305.001
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	164.266	163.340	148.111
INVESTMENTS	0.041	1.464	2.291
CURRENT ASSETS, LOANS & ADVANCES
Inventories	127.543	73.005	65.469
Sundry Debtors	9.668	29.934	27.986
Cash & Bank Balances	2.908	2.932	7.006
Other Current Assets	1.919	6.541	18.762
Loans & Advances	124.897	89.667	116.934
Total Current Assets	266.935	202.079	236.157
Less: CURRENT LIABILITIES & PROVISIONS
Current Liabilities	80.437	68.311	81.558
Provisions	6.995	4.192	0.000
Total Current Liabilities	87.432	72.503	81.558
Net Current Assets	179.504	129.577	154.599
TOTAL	343.810	294.381	305.001

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	468.479	595.183	587.059
Profit/(Loss) Before Tax	5.470	6.071	4.867
Provision for Taxation	2.076	2.827	2.852
Profit/(Loss) After Tax	3.394	3.244	2.015
Export Value	360.254	502.724	299.129
Import Value	91.788	137.301	88.719
Total Expenditure	463.009	575.110	582.192

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	0.72	0.54	0.34
Net Profit Margin (PBT/Sales)	(%)	1.16	1.02	0.83
Return on Total Assets (PBT/Total Assets}	(%)	1.27	1.65	1.26
Return on Investment (ROI) (PBT/Networth)		0.02	0.02	0.02
Debt Equity Ratio (Total Liability/Networth)		1.65	1.41	1.50
Current Ratio (Current Asset/Current Liability)		3.05	2.78	2.89

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 9^th June 1981, at Chennai in Tamilnadu as a private limited liability company having Company Registration No. 8805.

Subsequently it was converted into a deemed Public Limited Liability Company.

Again it was converted into a Private Limited Company.

Form 8

Corporation identity number (CIN) or foreign company registrations number of the company	U18209TN1981PTC008805
Name of the company	FARIDA CLASSIC SHOES PRIVATE LIMITED
Address	151/4, Mount Poonamalle Road, Ramapuram, Chennai- 600 116, Tamilnadu, India
This Form is for	Modification of charge
Type of Charges	Any interest in immovable property, book debts, movable property, stock, plant and machinery
Particular of the charge holder	Citi Bank N. A. 2, Club House Road, Anna Salai, Chennai – 600 002, Tamilnadu, India
Nature or description of the instrument creating charge	Deed of modification, memorandum of deposit of title deeds.
Date of the instrument creating charge	24.05.2007
Amount Secure by the charge	Rs. 261.000 millions
Brief of the principal terms and conditions and extent and operation of the charge	Rate of Interest: 9.50% p.a. Terms of Repayment: repayable on demand Margin: 28% on inventories and receivables. 100% margin on other assets Extent and operation of the charge: exclusive charge on the present and future current and fixed assets of the company
Description of the property charge whether it is a charge on	--
Modification charge Charge identification number of the charge to be modified	80010448
Date of instrument modifying the charge	31.01.2007
Particulars of the Property charged	Exclusive charge on all present and future current assets including inventory and receivables located anywhere. Exclusive charge on all present and future fixed assets including plant and machinery located anywhere. Exclusive charge on land and building any plant and machinery permanently fastened or embedded to the earth locate at Sy. No. 9/2, 12/2, Khanishmari No. 525, Nagavara Village, Nagavara Main Road, Opp to Mosque, CMC, Byatrayanapura, Bangalore – 560 043, Karnataka, India
Particular of the present modification	Facilities secured by exclusive charge on present and future current assets are increased from Rs. 156.000 millions to Rs. 261.000 millions

Name of the company

FARIDA CLASSIC SHOES PRIVATE LIMITED

Presented By

Mr. M. Rafeeque Ahmed, Managing Director

1) Date and description of instrument creating the

change

Agreement for Cash Credit dated 03.04.1984 – Form “K”

Agreement fro Cash Credit dated 03.04.1984 – Form “L”

2) Amount secured by the charge/amount owing on

the securities of charge

Export Packing Credit	Rs. 0.750 million
Foreign Document Bill Limit	Rs. 2.800 millions
Letter of Credit	Rs. 1.000 millions
Guarantee	Rs. 0.300 million
Total	Rs. 4.850 millions

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

Company’s entire machinery both present and future installed in the factory, mortgage of leasehold rights over the factory land and ownership rights of factory, building, all stocks, book debts and other movable assets of the company.

4) Gist of the terms and conditions and extent and

operation of the charge.

All advances 1 to 4 are repayable on demand

5) Name and Address and description of the

person entitled to the charge.

State Bank of India

Leather International Branch, MVJ Towers, 177/1, Ponamallee High Road, Kilpauk, Chennai – 600 010, Tamilnadu, India

6) Date and brief description of instrument

modifying the charge

Letter regarding the grant if individual limits within the overall limit dated 29.09.2000

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.

	Present Limit	Revised Limit
	Rs in millions
Export Packing Credit	40.000	40.000
Foreign Document Bill Limit	35.000	35.000
Letter of Credit	30.000	35.000
Guarantee	10.000	10.000
Total	115.000	120.000

Fixed Assets

* Factory Building

* Factory Dining Hall

* Plant and Machinery

* Furniture and Fittings

* Motor Car

* Jeep

* Motor Cycle

* Fax Machine

* Photo Copier

* Computers

* Guest House

* Transformers

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.39.35
UK Pound	1	Rs.80.52
Euro	1	Rs.57.56

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	9
--PROFITABILIRY	1~10	7
--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.	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