MIRA INFORM REPORT

Report Date :

14.02.2008

IDENTIFICATION DETAILS

Name :	PRATIBHA SYNTEX LIMITED
Formerly Known As :	PRATIBHA SYNTEX PRIVATE LIMITED
Registered Office :	301, Acme Plaza, 3^rd Floor, Andheri-Kurla Road, Opposite Sangam Cinema, Mumbai – 400 059, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	08.10.1982
Com. Reg. No.:	11-5565
CIN No.: [Company Identification No.]	U17111MH1982PLC118017
TAN No.: [Tax Deduction & Collection Account No.]	BPLP01476G
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturing and Export of Cotton Yarn, Synthetic Yarn, Fabrics and Knitting 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 4834232
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Directors are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are fair. Profit margin is low. The company can be considered normal for business dealings at usual trade terms and conditions

INFORMATION PARTED BY

Name :	Mr. Subhash Jha
Designation :	Export Manager/ Yarn Div.
Contact No.:	-
Date :	14.02.2008

LOCATIONS

Registered Office :	301, Acme Plaza, 3^rd Floor, Andheri-Kurla Road, Opposite Sangam Cinema, Mumbai – 400 059, Maharashtra, India
Tel. No.:	91-22-256921428/28361464/ 28314850/ 28314853/66921428/283145850
Fax No.:	91-22-28361464
E-Mail :	mumbai@pratibhasyntex.com
Website :	http://www.pratibhasyntex.com
Location :	Rented
Factory/ Manufacturing Unit :	Plot No. 4, Industrial Growth Centre, Kheda – 454 774, Pitampur, District Dhar, Madhya Pradesh, India
Tel. No.:	91-7292-404362-64/ 404362-3/ 404357
Fax No.:	91-7292-256340-1
E-Mail :	info@pratibhasyntex.com
Area :	70 acres approx
Location :	Leased
Branches :	Delhi Office D-10/3, Okhla Industrial Area, Phase-I, New Delhi-110020, India
Tel. No.:	91-11-41616465, 26816790,32449714
Fax No.:	91-11-41616480
E-Mail :	delhi@pratibhasyntex.com
Location :	Rented
Branches :	Indore Office 301, Apollo Avenue, 30B, Old Palasia, Indore-1
Tel. No.:	2562228-9
Fax No.:	91-731-2562227
E-Mail :	info@pratibhasyntex.com
Location :	Owned

DIRECTORS

Name :	Mr. Shiv Kumar Chaudhary
Designation :	Chairman and Managing Director
Name :	Mr. Snehkar Bansal
Designation :	Whole time Director
Name :	Mr. Ram Kishan Sharma
Designation :	Director
Name :	Mr. S. Ananth Krishnan
Designation :	Nominee (IDBI)
Name :	Mr. Sanjay Sarkar
Designation :	Nominee (EXIM)
Designation :	Mr. Aditya Goyal
Address :	Whole time Director
Name :	Mr. Shreyaskar Chaudhary
Designation :	Vice Chairman and Joint Managing Director
Name :	Mr. N S Nirban
Designation :	Executive Director

KEY EXECUTIVES

Name :	Mr. N K Joshi
Designation :	Company Secretary

BUSINESS DETAILS

Line of Business :	Manufacturing and Export of Cotton Yarn, Synthetic Yarn, Fabrics and Knitting Fabrics.
Products :	· Yarn · Fabrics · Knitting Fabrics · Dried Fabrics · Knitted Garments
Exports :
Products :	Cotton Yarn Garment
Countries :	USA UK Germany Canada South Africa Far East Middle East Korea

GENERAL INFORMATION

Suppliers :	· Blow Room – Crosrol, UK · Crosrol, UK · Comber - Toyoda, Japan · Toyoda, Japan - Draw Frame · Knitting - Fukuhara (Monarch), Japanterrot, Germany · Speed Frame - Texmaco Howa, India · Ring Frame - Toyoda, Japan · Auto Coner - Murata, Japan · Yarn Conditioning - Xorella, Switzerland
No. of Employees :	Around 3000
Bankers :	State Bank of India Mumbai Main Branch, India Canada Bank Nawab Bazar Branch

Banking Relations :	Satisfactory
Auditors :	Kanji R. Agrawal and Company Chartered Accountants
Address :	Mumbai, Maharashtra

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
45000000	Equity Shares	Rs.10/- each	Rs.450.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
17017611	Equity Shares	Rs.10/- each	Rs.170.176 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		170.176	170.200	140.200
2] Share Application Money		102.100	0.000	0.000
3] Reserves & Surplus		936.282	746.100	755.400
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1208.558	916.300	895.600
LOAN FUNDS
1] Secured Loans		2342.709	1811.900	1691.100
2] Unsecured Loans		138.295	88.200	84.000
TOTAL BORROWING		2481.004	1900.100	1775.100
DEFERRED TAX LIABILITIES		153.226	0.000	0.000
TOTAL		3842.788	2816.400	2670.700
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1877.593	1913.800	1938.900
Capital work-in-progress		737.076	76.700	35.300
INVESTMENT		16.548	16.600	12.900
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	971.722	662.200	471.100
	Sundry Debtors	303.066	245.600	240.400
	Cash & Bank Balances	54.172	68.000	28.000
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	361.225	332.800	270.600
Total Current Assets		1690.185	1308.600	1010.100
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	460.916	469.800	304.600
	Provisions	17.698	29.500	21.900
Total Current Liabilities		478.614	499.300	326.500
Net Current Assets		1211.571	809.300	683.600
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3842.788	2816.400	2670.700

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		3847.514	3447.900	3023.600
Other Income		124.910	29.300	36.800
Total Income		3972.424	3477.200	3060.400
Profit/(Loss) Before Tax		215.871	159.000	66.900
Provision for Taxation		25.685	15.100	5.300
Profit/(Loss) After Tax		190.186	143.900	61.600
Expenditures :
	Manufacturing Expenses	2278.266	336.600	250.000
	Administrative Expenses	540.181	206.900	178.800
	Raw Material Consumed	257.227	2046.800	1893.600
	Miscellaneous Expenses	304.378	3.100	0.700
	Salaries, Wages, Bonus, etc.	217.545	187.600	169.400
	Interest	0.000	187.500	163.600
	Power & Fuel	0.000	179.400	148.700
	Depreciation & Amortization	158.956	155.700	151.200
	Other Expenditure	0.000	14.600	37.500
Total Expenditure		3756.553	3318.200	2993.500

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	4.79	4.14	2.01
Net Profit Margin (PBT/Sales)	(%)	5.61	4.61	2.21
Return on Total Assets (PBT/Total Assets}	(%)	6.05	4.93	0.02
Return on Investment (ROI) (PBT/Networth)		0.18	0.17	0.07
Debt Equity Ratio (Total Liability/Networth)		2.45	2.62	2.35
Current Ratio (Current Asset/Current Liability)		3.53	2.62	3.09

LOCAL AGENCY FURTHER INFORMATION

• Operational Performance 

The operations of the Company for the year under review have been satisfactory. The Company recorded turnover of Rs.3447.864 millions and Profit before Tax of Rs.158.946 millions, an increase of 14.03% and 137.70% respectively over the previous year. The Company's exports including incentives increased to Rs.2356.567 millions from Rs.2159.340 millions in the previous year, an increase of 11.13% over the previous year. 

• Expansions 

In the post quota regime, state-of-the-art capacity is the name of the game for globally recognised companies like Subject. The Company has reinforced its commitment to the global textile market by making a significant investment of Rs.3490 millions in different segments of textile such as Terry Towel (Home Textile), Open End Spinning; expansion in existing Knitting, Dyeing and Garment facilities and Gas Based Power Project to cater existing and proposed requirements of power. The essential resources for implementing the expansion plan have been tied up by way of Term Loans of Rs.2330 millions all under Technological Upgradation Fund Scheme (TUFS) and remaining fund is proposed to be resourced through Initial Public Offer (IPO) and Accruals. 

The 'Bhoomi Poojan' ceremony for all the above new Projects has been performed on the auspicious clay of Ram Navami on 7th April 2006, and civil construction work has been commenced. 

To be globally competitive, the Company has taken initiatives to expand and optimise its existing capacities. The Company has always believed that textile industry in India holds enormous promise that can be realised only with substantial investment in world class plants for providing the good quality. 

• Further Issue of Capital 

During the period under review, the Company had allotted 30,00,000 equity shares of Rs.10/- each for cash at par aggregating to Rs.30 millions to the promoters and their associates on preferential basis in pursuance of the special resolution passed by the shareholders in its extra-ordinary general meeting held on 24th August 2005. With issue of these equity shares, the paid up capital of the Company has increased to Rs.170.176 millions comprising of 1, 70, 17,611 equity shares of Rs.10/-each. 

Website Details:

Origin and Growth

Subject launched its operations in the year 1997. India's first vertical manufacturing set up, subject made its foray into organic farming in the year 1999. In the following year, the company adopted forward integration into Knitting-Dyeing-Garments in 2000. Today, Subject is proud to be an Integrated Textile Company having a turnover of Rs.3120 millions and interests in raw cotton, cotton yarn, synthetic yarn, knitted fabric and garments. It enjoys the unique distinction of being the largest organic cotton producer in India.

Achievements

Subject has an enviable record and unmatched position in the industry. It is the only process certified plant in the Indian sub continent, for producing organic cotton as per the guidelines of North American Draft Organic Fiber Standards, and the entire procedure is certified by SKAL, Netherlands.

Subject exports its products to many countries which mainly include USA, UK, Austria, Egypt, France, and Switzerland. A list of prestigious awards establishes its excellence in exports

Awards

• Niryat Shree Puraskar Presented By Indian Council For Small and Medium Exporters
• Export Performance Award For 1993-94 By Canara Bank, Bangalore
• Niryat Shree Award For 1997-98 By Federation Of Indian Export Organizations
• Niryat Shiromani Puraskar By Indian Council Of Small And Medium Exporters (Icsme).
• Raj Bhawan Aizawl Shield Presented By His Excellency The Governor Of Mizoram- Shri Amolak Rattan Kohli
  Best Performance Award For 1998 -99 By Concor, Icd, Pithampur
• Sanjivani Kosh Award By State Bank Of Indore For Social Work
• Icmf's Award For Excellence For 2002-03
• Udyog Ratna By Phd Chamber Of Commerce And Industry Centenary Celebrations

Certification

• Subject is certified for Oeko-Tex Standard 100 that sets yardsticks for yarns, fabrics and textile products of all kinds.
• Subject is proud to possess WRAP certification which it has got by complying to stringent principles of Workplace Regulations.
• Subject has been awarded ISO 9001 certification, which confirms that subject products enjoy a worldwide recognition.

Infrastructure

• Organic Cotton

The organic cotton cultivation project by subject is named Vasudha- Hindi for The Earth. The Project has its roots in village Karhi, about 80 kms from Indore city in the Indian state of Madhya Pradesh. It is spread over 22000 acres of farmland. 2100 farmers are associated with the project. Experts like agricultural scientists, technical consultants and extension supervisors regularly monitor farming activities and guide the farmers on complete waste management, recycling and adopting better farming practices. They train the farmers on preparing natural fertilizers, human and animal health care and pest management besides undertaking various activities for their welfare.

• Yarns Division-

Having a well equipped yarn manufacturing unit at Pithampur (M.P, India), subject boasts of an installed production capacity of 48,048 spindles operating round the clock. Yielding 12,875 tons of yarn per annum- the elaborate facility is instrumental in fulfilling clients' needs all over the world.

• Knits Division-

Fabric Division- Subject infrastructure matches world class standards. The elaborate set up houses hi-tech machinery like fabric lab testing equipments, circular knitting machines, flat knitting machines and dye house equipments. It has knitting and dyeing capacity of 4725 tons per annum and 4025 tons per annum respectively.

Garments Division- Subject is a name to reckon with in the manufacture of high quality garments. It manufactures underwear, sportswear, leisurewear, high street fashion wear; and loungewear for women, men, kids and infants. Subject garments meet world class standards in equipments, processes, quality assurance, delivery, and training and of course, fast changing trends and fashion. The garments section boasts of impressive production capacity. In the casual wear, 2.5 million pcs are produced per annum; whereas in the undergarments, 8 million pcs are produced per annum.

• Resources

Team- Subject has an impressive team comprising 3000 employees. It has 1500 vendors and 200 customers. There are over 25000 indirect employees.

Training- is an on going process at Subject. There is an in-house training department which conducts comprehensive programme covering Executives and Workers. Subject also has an association with professional training organizations and renowned consultants. It has an exclusive tie up with Sitro for spinning and knitting, and a regular management development programme for the senior and middle management.

Staff Accommodation- Subject makes available for its employees well furnished residential houses that are equipped with all the basic amenities.

• Utilities

Power generation: The Company generates 4 MW of power.

Management

Guiding the subject ship with its acuity of vision and strategic direction is the company's top management team that perfectly characterizes the thought:

Organic:

• About Vasudha

When they heal the Earth they heal represents the spirit, the reason and the relevance of the Vasudha Project-the massive organic farming programme run by subject. The project aims to grow clean and eco-friendly cotton to produce a clean cotton garment, spread environmental sensibilities amongst people, generate direct/ indirect employment and ensure the farmers' welfare.

• Project Overview

Vasudha is Hindi for The Earth. The Project has its roots in village Karhi, about 80 kms from Indore city in the Indian state of Madhya Pradesh. The project has grown multifold since its inception. In the year 1998, when it began, it covered the land area of 4000 acres. Today it is covers a total 22000 acres of farmland. Experts like agricultural scientists, technical consultants and extension supervisors regularly monitor farming activities and guide the farmers on complete waste management, recycling and adopting better farming practices. They train the farmers on preparing natural fertilizers, human and animal health care and pest management.

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.39.68
UK Pound	1	Rs.77.67
Euro	1	Rs.57.81

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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