MIRA INFORM REPORT

Report Date :

04.07.2008

IDENTIFICATION DETAILS

Name :	ARTHANARI LOOM CENTRE (TEXTILE) PRIVATE LIMITED
Registered Office :	78, Sababathi Street, Kalarampaty, Erumapalayam, PO 636015, Salem – 636015, Tamilnadu
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	25.10.1991
Com. Reg. No.:	18 – 3485
CIN No.: [Company Identification No.]	U18101TZ1991PTC003485
TAN No.: [Tax Deduction & Collection Account No.]	CHEA08429B
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturing and Sale of Cotton 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 744670
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Directors are reported as experienced respectable and resourceful businessman. Their trade relations are fair. Payments are correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions

INFORMATION PARTED BY

Name :	Mr. Saraeanan
Designation :	Accountant
Date :	26.06.2008

LOCATIONS

Registered Office :	78, Sababathi Street, Kalarampaty, Erumapalayam Post, Salem – 636015, Tamilnadu, India
Tel. No.:	91-427-2469951
Mobile No.:	91-9894037190
Fax No.:	91-427-2465896
E-Mail :	accounts@alctex.com office@alctex.com sbi.07201@sbi.co.in
Website :	http://www.alctex.com
Area :	4000 Sq. ft.
Location :	Owned
Factory :	5/127, Erumapalayam Main Road, Erumapalayam Post, Salem – 636015, Tamilnadu, India
Area :	10 acres
Location :	Owned

DIRECTORS

Name :	Mr. A. Alagarasan
Designation :	Managing Director
Address :	80 – B, Sababathy Street, Kalarampatty, Salem – 636 015, Tamilnadu, India
Date of Birth/Age :	15.06.1958
Qualification :	B.Com
Date of Appointment :	25.10.1991
Name :	Mrs. A. Pushpa
Designation :	Director
Address :	80 – B, Sababathy Street, Kalarampatty, Salem – 636 015, Tamilnadu, India
Date of Birth/Age :	13.06.1968
Qualification :	B.Com
Date of Appointment :	25.10.1991
Name :	Mr. M. Arthanari
Designation :	Director
Address :	1 – 51, Thoppu Street, Mangavalli, Mattur Jr., Salem – 636 454, Tamilnadu, India
Date of Birth/Age :	10.03.1924
Date of Appointment :	25.10.1991

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 29.09.2004

Names of Shareholders	No. of Shares
Mr. M. Arthanari	710
Mr. A. Alagararasan	171800
Mrs. A. Pushpa	78430
Mr. R Panneerselvam	200
Mr. A Adhithya (Minor)	5300
Mr. A Aswathasree (Minor)	200

Equity share breakup (Percentage of total equity)

As on 31.03.2007

Sr. No.	Category	Percentage
1.	Directors or relatives of directors.	100.00
	Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturing and Sale of Cotton Fabrics.
Products :	v Chambray Fabrics v Organic Exchange Fab v Satin Weave Fab v Dobby Weave Fabrics v Oxfored Weave Fab v Twill Weave Fab v Organic Cotton Fabric v Plain Weave Fabric v Wrinklefree Fabric
Exports :
Products :	Cotton Fabric
Countries :	v Sri Lanka v Bangladesh v Hong Kong v Nepal
Imports :
Products :	Machinery
Countries :	v Tokyo v Belgium
Terms :
Selling :	L/C
Purchasing :	L/C, Cash

GENERAL INFORMATION

Suppliers :	v Jayam Chemicals Traders v Avisun Organics (Private) Limited v Shiba Traders v R K Chidanbaram and Sons
Customers :	v L S Mills Limited v Dinesh Fabrics v Vishnu Dying and Printing Works v Nahar International Limited
No. of Employees :	Total :1000 ( Office : 100, Factory : 900)
Bankers :	v State Bank of India Siruthozhil Branch, 68, Cherry Road, Salem – 636 007, Tamilnadu, India v Syndicate Bank Overseas Branch, 37, Whites Road, Chennai – 600018, Tamilnadu, India v ICICI Bank
Facilities :	CC

Banking Relations :	Good
Auditors :
Name :	v R Raghunathan Chartered Accountant A-2, Rajaram Nagar, Salem-636007, Tamilnadu v J S C V and Company Chartered Accountants No. 25, LIC Colony, Salem – Omalur Main Road, Salem – 636004, Tamilnadu, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1,500,000	Equity shares	Rs. 100/- each	Rs. 150.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1,322,800	Equity shares	Rs. 100/- each	Rs. 132.280 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		132.280	132.280
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		16.654	17.040
4] (Accumulated Losses)		0.000	0.000
NETWORTH		148.934	149.320
LOAN FUNDS
1] Secured Loans		222.714	177.551
2] Unsecured Loans		23.718	2.690
TOTAL BORROWING		246.432	180.241
DEFERRED TAX LIABILITIES		33.760	20.254
TOTAL		429.126	349.815
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		293.773	279.844
Capital work-in-progress		0.000	0.000
INVESTMENT		0.013	0.013
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	137.593	82.316
	Sundry Debtors	45.017	98.443
	Cash & Bank Balances	3.781	1.541
	Other Current Assets	11.400	6.836
	Loans & Advances	27.885	20.993
Total Current Assets		225.676	210.129
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	88.418	139.907
	Provisions	1.918	0.263
Total Current Liabilities		90.336	140.170
Net Current Assets		135.340	69.959
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		429.126	349.816

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006
Sales Turnover		518.105	474.590
Other Income		6.752	5.304
Total Income		524.857	479.894
Profit/(Loss) Before Tax		14.778	3.129
Provision for Taxation		1.658	0.004
Profit/(Loss) After Tax		13.120	3.125
Earnings in Foreign Currency :
	Export Earnings	10.882	48.879
Total Earnings		10.882	48.879
Imports :
	CIF Value	54.311	26.679
Total Imports		54.311	26.679
Expenditures :
	Financial Charges	27.517	18.417
	Depreciation & Amortization	25.810	27.168
	Other Expenditure	456.752	431.180
Total Expenditure		510.079	476.765

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006
PAT / Total Income	(%)	2.50	0.65
Net Profit Margin (PBT/Sales)	(%)	2.85	0.66
Return on Total Assets (PBT/Total Assets}	(%)	2.81	0.65
Return on Investment (ROI) (PBT/Networth)		0.10	0.02
Debt Equity Ratio (Total Liability/Networth)		0.61	0.94
Current Ratio (Current Asset/Current Liability)		2.50	1.50

LOCAL AGENCY FURTHER INFORMATION

Trade References

v Cotton Mill – Kandhagara

v Cotton Mill - Samdamdam

Form 8

This form is for	Modification of charge
Charge Identification (ID) number of the charge to be modified	10002651
Corporation identity number (CIN) or foreign company registrations number of the company	U18101TZ1991PTC003485
Name of the company	ARTHANARI LOOM CENTRE (TEXTILE) PRIVATE LIMITED
Address	78, Sababathi Street, Kalarampaty, Erumapalayam, PO 636015, Salem – 636015, Tamilnadu, India
Type of Charges	v Immovable property v Book debts v Movable property (not being pledge)
Particular of the charge holder	Name : State Bank of India Address : Siruthozhil Branch, 68, Cherry Road City : Salem State : Tamilnadu ISO country code : IN Pin code : 636007 e-mail ID : sbi.07201@sbi.co.in
Nature or description of the instrument creating or modifying the charge	Form C.10 Memorandum of deposit by way of mortgage by deposit of title deeds Form C.2- A Supplemental agreement of hypothecation of goods and assets for increase in the overall limit. Form C.5 Letter regarding the grant of individual limits within the overall limit. Form C.3 A Supplemental agreement of pledge of goods and assets for increase in the overall limit. 5. Form C.1 A Supplemental agreement of loan for increase in the overall limit.
Date of the instrument creating charge	11.01.2008
Amount Secure by the charge	Rs. 382.000 millions
Brief particulars of the principal terms and conditions and extent and operation of the charge	Rate of Interest Cash Credit : SBAR WCDL : SBAR EPC/ FDBN : 2.75% below SBAR (present effective rate 10%) Term loan – IV: 1% above SBAR Terms of repayment Term loan IV – Repayable in 72 monthly installments commencing from April 2008 with a moratorium period of 3 months for the earlier limits the terms and conditions remains same. Margin Raw materials, stores/ spares/ consumables, stocks in process, finished goods, Book debts/ Receivables (cover period 90 days) – 25% Letter of credit – 15% Bank Guarantee – 20% (100% for disputed liability) Term loan IV – 25.71% Extent and operation of the charge The charge operates as continuing security till the repayment of loan amount with interest and other charges.
Short particulars of the Property charged	Hypothecation of Raw materials, Semi Finished goods, Finished goods, stores, spares, consumables, Book debts and receivables of the company.. Hypothecation of machinery purchased out of term loan and extension of equitable mortgage by deposit of title deeds on the land and building properties of the company situated at Salem.
Whether any of the property or interest therein under reference is not registered in the name of the company	No
Date of latest modification prior to the present modification	12.03.2007
Particulars of the present modification	The total limit of the company has been enhanced from Rs. 304.000 millions to Rs. 382.000 millions by availing Term loan IV – Rs. 78.000 millions under Rs. 78.000 millions under TUF scheme.

Form 8

Name of the company

ARTHANARI LOOM CENTRE (TEXTILE) PRIVATE LIMITED

Presented By

Mr. A. Alagararasan, Managing Director

1) Date and description of instrument creating the change

a) Mortgage by deposit of the Title deeds (UREM) by the company on 25.2.1997 in favour of the Syndicate Bank Overseas Branch 37 White Road chennai-14 in the Syndicate Bank offered for the loan of Rs. 41.000 millions to M/s. Arthanari Looms centre Salem.

b) Deed of guarantee Dt. 25.2.97 offering guarantee for Rs. 41.000 millions

2) Amount secured by the charge/amount owing on the securities of charge

Rs. 41.000 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

Land and Building situated at 2-235, Earikarai Road, Karampatty, (p.o.) Salem-15 consisting of the survey nos. 219/2, 216/3, 220/2, 220

4) Gist of the terms and conditions and extent and operation of the charge.

Gaurantee for repayment of the following credit facilities sanctioned to M/s. Arthanari Loom centre, 78, Sabathy Kadu, Kalarampatty, Erumpalayam, post, Salem-15 consisting of the survey No. 219/2, 216/3, 220/2, 220.

Nature of Facility	Amount (Millions)	Rate of Interest
PLC	6.000	13%
FUBP/LC	35.000	13%
FDBP/LC	7.500	(Sub limit)

5) Name and Address and description of the

person entitled to the charge.

Syndicate Bank,

Overseas Branch,

37, White Road, Chennai - 14

6) Date and brief description of instrument

modifying the charge

v Composite Hypothecation Agreement dated 1.3.2005

v OMNI Bus Counter Guarantee dated 1.3.2005

v Comprehensive Pre Post shipment Agreement dated 1.3.2005

v Extension of Equitable Mortgage by redeposit of title deeds on 1.3.2005

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.

Credit Facility	Existing limits (millions)	Revised limit (millions)	Rate of interest w.e.f. 1.3.2005	Margin
Guarantee for loan to M/s. Arthanari Loom Centre, Salem -15
PCL	50.000	-
FDBP/FUBP/LC	90.000	-
Bank Guarantee	20.000	-
Import LC	2.000	-
OSL	4.830	-
OSL (fresh)	6.500	-
ILC/FLC	17.000	-
FUND BASED
SODH/PLC	35.000	35.000	SODH/PLR PCL-PLR-3.50%	25%
FDB/PUBP/LC/ SUB LIMIT/ FUBD/LC/ADBC	40.000 (10.000) (5.000)	40.000 (10.000) (5.000)	PLR-3.50% upto 90 days PLR- 0.05% above 90 days	NIL
DATBD/LC	25.000	55.000	10% Fixed	NIL
CDD/ (SUB LIMIT)	--	(2.500)	PLR + 1%	NIL
TERM LOAN	80.000	80.000	--	NIL
SUB LIMIT	(72.000)	(72.000)	--	NIL
TERM LOAN	--	27.000	PLR	25%
SUB LIMIT	--	27.000	As per circular	10%
NON FUND BASED
INLAND LC	15.000	15.000	As per circular	NIL
LC (SIGHT)	2.000	2.000	As per circular	NIL
BC	2.000	2.000	As per circular	10%
Total	402.330	251.500

Fixed Assets:

v Land

v Building

v Plant and Machinery

v Furniture and Fixture

v Vehicle

v Effuent Treatment Plant – I

v Effuent Treatment Plant – II

v Capital Work in Progres

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 :

The 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.

The 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. 43.21
UK Pound	1	Rs. 85.72
Euro	1	Rs. 67.92

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	YES
--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.	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, they 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