MIRA INFORM REPORT

Report Date :

15.02.2008

IDENTIFICATION DETAILS

Name :	LAKHANI SHOES AND APPARELES PRIVATE LIMITED
Registered Office :	Plot No. 127, Sector – 15, Faridabad – 121001, Haryana
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	16.11.2005
Com. Reg. No.:	35914 5916/SIA/IMO/2005 Dated 19.12.2005, SIA, Min. of Commerce and Industry, New Delhi
CIN No.: [Company Identification No.]	U19202HR2005PTC035914
IEC No.:	0506014347 dated 29.05.2006
Legal Form :	Private Limited Liability Company.
Line of Business :	Manufacturers of Sport Shoes, Sandals and Slippers

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 228036
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company and a part of Lakhani Group. Trade relations are fair. Business is active. Payments are reported as usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Plot No. 127, Sector – 15, Faridabad – 121001, Haryana, India
Tel. No.:	91-129-2236709/10/11
Mobile No.:	91-9871284109
Fax No.:	91-129-2232790
E-Mail :	ashokkalra@lakhaninfootwear.com amit@lakhanifootwear.com
Website :	http://www.lakhamishoes.com
Location :	Owned
Factory :	Plot No. 130, Sector – 24, Faridabad – 121005, Haryana, India
Tel. No.:	91-129-2236709/10/11/2232793 / 95
Fax No.:	91-129-2232790/ 2230833
E-Mail :	ashokkalra@lakhaninfootwear.com amit@lakhanifootwear.com balajiinvests@hotmail.com
Location :	Owned
Factory :	Plot No. 1, Sector – 3, Bhel Estate (Sidcul), Haridwar, Utranchal – 249410
Tel. No.:	91-9897766449 (Mr. Mathur)
Location :	Owned

DIRECTORS

Name :	Mr. Kishan Chand Lakhani
Designation :	Director
Address :	House No. 1127, Sector – 15, Faridabad – 121007, India
Qualification :	Graduate
Experience :	30 Years
Name :	Ms. Shilpa Kishan Lakhani
Designation :	Director
Address :	House No. 1127, Sector – 15, Faridabad – 121007, India
Date of Birth/Age :	31.07.1977
Qualification :	Post Graduate
Experience :	5 Years
Date of Appointment :	10.07.2006
Name :	Mr. Gunjan Lakhani
Designation :	Director
Address :	House No. 1127, Sector – 15, Faridabad – 121007, India
Qualification :	Post Graduate
Experience :	7 Years
Name :	Mr. Kamlesh Lakhani
Designation :	Director
Address :	House No. 1127, Sector – 15, Faridabad – 121007, India
Qualification :	Graduate
Experience :	25 Years
Name :	Ms. Deepti Lakhani
Designation :	Director
Address :	House No. 1127, Sector – 15, Faridabad – 121007, India
Qualification :	Post Graduate
Experience :	3 Years

BUSINESS DETAILS

Line of Business :	Manufacturers of Sport Shoes, Sandals and Slippers
Products :	Leather Sport Shoes Sandals and Slippers
Brand Names :	ADIDAS India Reebok India
Terms :
Selling :	Cash and Credit (30 days)
Purchasing :	L/C and Credit (60 days)

PRODUCTION STATUS

Particulars	Unit	Actual Production
Sports Shoes, Sandal and Slippers	P.M.	150000 Pairs

GENERAL INFORMATION

No. of Employees :

650

Bankers :

· Indian Bank Main Branch New Delhi, G – 41, Connaught Circus, New Delhi – 110001, Delhi Email : ibnnewdelhimain@vsnl.net · Bank of India NIT, Faridabad Cash Credit : Rs.310 Millions – Lakhani India Limited · Bank of India NIT, Faridabad Cash Credit : Rs.44.000 Millions – Lakhani Shoes Company Private Limited · Bank of India NIT, Faridabad Cash Credit : Rs.65.000 Millions – Mascot Footcare · Bank of India NIT, Faridabad Cash Credit : Rs.37.000 Millions – Lakhani Rubber Works.

Banking Relations :	Satisfactory
Auditors :
Name :	J. P. Jain and Company Chartered Accountants
Address :	2-L, 59 NIT, Faridabad
Associates/Subsidiaries :	Lakhani Armaan Shoes Private Limited Plot No.2, Sector 5, (Industrial) Faridabad, India Manufacturer of High Fashion Leather Shoes for Export and Leather Shoes for domestic market. Lakhani India Limited Plot No. – 266, Sector 24, Faridabad – 121005 Manufacture of Sports shoes, Leather shoes, Synthetic Sandals / Slippers, Canvas Shoes (P.U. Injected) , EVA Sandals and Slippers. Lakhani India Limited Plot No. – 119, Sector 24, Faridabad – 121005 High Fashion Leather shoes / boots/ sandals and slippers for exports. Lakhani Footwear Limited Plot No. 130, Sector 24, Faridabad – 121005 Canvas Shoes, PVC Injected Molded Footware, EVA Injected molded footwear. Lakhani Rubber Works Plot No. 234, 259, 236, 262 P Sector 24, Faridabad – 121005 Molded Rubber Components for Automobile – House, Molded rubber Product for OEMs. Lakhani Shoe Company Private Limited Plot No – A, 56 & 57, Bhiwandi Industrial Area, Rajasthan Rubber and EVA Slippers. Mascot Footcare C – 25 – 27, Phase II, Naida, Gautam Nagar, Uttar Pradesh Rubber and EVA Slippers.

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Share	Rs.10/- each	Rs.100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4500000	Equity Share	Rs.10/- each	Rs.45.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

Particulars	31.03.2007	31.03.2006
Sales Turnover (Group)	2725.00	2500.000
Export Value (Group)	95.000	57.600

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007
SHAREHOLDERS FUNDS
1] Share Capital		45.000
2] Share Application Money		0.000
3] Reserves & Surplus		12.009
4] (Accumulated Losses)		0.000
NETWORTH		57.009
LOAN FUNDS
1] Secured Loans		74.025
2] Unsecured Loans		54.101
TOTAL BORROWING		128.126
DEFERRED TAX LIABILITIES		2.337
TOTAL		187.472
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		161.591
Capital work-in-progress		0.000
INVESTMENT		0.000
DEFERREX TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	24.759
	Sundry Debtors	111.749
	Cash & Bank Balances	5.352
	Loans & Advances	36.392
	Deferred Revenue Expenditure	0.578
	Preliminary Expenses (to the extent not written off)	0.487
Total Current Assets		179.317
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	153.436
	Provisions	0.000
Total Current Liabilities		153.436
Net Current Assets		25.881
MISCELLANEOUS EXPENSES		0.000
TOTAL		187.472

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007
Sales Turnover		328.409
Other Income		4.026
Increase/ Decrease in Finished Goods/ Work in Progress		12.179
Total Income		344.614
Profit/(Loss) Before Tax		14.490
Provision for Taxation		2.481
Profit/(Loss) After Tax		12.009
Expenditures :
	Material Consumed	286.096
	Personnel Expenses	5.401
	Manufacturing Expenses	10.374
	Excise Duty	6.289
	Other Expenses	3.900
	Depreciation	6.572
	Financial Charges	4.798
	Selling and Distribution Expenses	6.693
Total Expenditure		330.123

KEY RATIOS

PARTICULARS		31.03.2007
PAT / Total Income	(%)	3.48
Net Profit Margin (PBT/Sales)	(%)	4.41
Return on Total Assets (PBT/Total Assets}	(%)	4.25
Return on Investment (ROI) (PBT/Networth)		0.25
Debt Equity Ratio (Total Liability/Networth)		4.94
Current Ratio (Current Asset/Current Liability)		1.17

LOCAL AGENCY FURTHER INFORMATION

Form 8:

Corporation identity number or foreign company registrations number of the company	U19202HR2005PTC035914
Name of the company	LAKHANI SHOES AND APPARELES PRIVATE LIMITED
Address	Plot No. 127, Sector – 15, Faridabad – 121001, Haryana, India
This Form is for	Creation of charge
Type of Charges	Hypothecation
Particular of the charge holder	Indian Bank Main Branch New Delhi, G – 41, Connaught Circus, New Delhi – 110001, Delhi Email : ibnnewdelhimain@vsnl.net
Nature or description of the instrument creating charge	Medium term loan agreement for open cash credit (Stock/Book debts), Agreement for hypothecation of god received under advance payment guarantees / LCs etc. agreement of irrevocable letter of credit IBN.
Date of the instrument creating charge	19.08.2006
Amount Secure by the charge	Rs.125.300 Millions
Brief of the principal terms and conditions and extent and operation of the charge	MTL of Rs.57.80 Millions at 11 % p.a. for a period of 60 months EM on land and building and hypothecation of machinery, furniture and vehicles margin 40 % EM and 25 % on Hypothecation. OCC of Rs.35.000 Millions at 10.50 % p.a. for a period of 12 months hypothecation on Stock and Book debts Margin 25 % IMP LC DP/DA of Rs.27.50 millions at 10 % p.a. for a period of 12 months margin 10 % guarantee of Rs.5.0 millions for a period of 12 months margin 25 % & 10 %.
Description of the property charge whether it is a charge on	Immovable Properties, Plant and Machinery, Book Debts, Stock in Trade, Furniture and Fixture and Vehicles
Particulars of the Property charged	Factory at Plot No. 1, Sector 3, Integrated Industrial Estate Bhel, Ranipur, Utranchal, Plant and Machinery Stock in Trade, Book dents etc.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.39.65
UK Pound	1	Rs.77.84
Euro	1	Rs.57.78

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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		51

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