MIRA INFORM REPORT

Report Date :

22.04.2011

IDENTIFICATION DETAILS

Name :	ARVIND LIMITED
Formerly Known As :	ARVIND MILLS LIMITED
Registered Office :	Naroda Road, Railwaypura Post, Ahmedabad – 380025, Gujarat
Country:	India
Financials (as on):	31.03.2010
Date of Incorporation :	01.06.1931
Com. Reg. No.:	04-93
CIN No.: [Company Identification No.]	L17119GJ1931PLC000093
TAN No.: [Tax Deduction & Collection Account No.]	AHMT00462A
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing and Marketing of Denim Fabric, Shirting Fabric, Shirts, Knitted Fabric and Garments.

RATING & COMMENTS

MIRA’s Rating :

Ba (52)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 57000000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is the flagship company of Lalbhai Group. It is a well established and reputed company having satisfactory track. General financial position is satisfactory. Directors are reported to be experienced and respectable businessmen. Their trade relations are fair. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered/ Corporate Office:	Naroda Road, Railwaypura Post, Ahmedabad – 380025, Gujarat, India
Tel. No.:	91-79-22121408/ 22203030/ 22200206/22208000
Fax No.:	91-79-22124314/ 22120267/ 22371396/ 22372342/ 22379184/ 22201608/ 22201270
E-Mail :	india@arvindmills.com investor@arvind.com rv.bhimani@arvind.in feedback@arvind.com
Website :	http://www.arvindmills.com
Factory :	· Santej, Taluka Kalol, District Mehsana - 382 721, Gujarat, India · Naroda Road, Ahmedabad - 380 025, Gujarat, India (Two Units) Tel. No. 91-79-22121408/ 2377002 Fax No. 91-79-22124314/ 22120267/ 22371396/ 22372342/ 22379184 · Khatrej, Taluka Kalol, District Mehsana – 382721, Gujarat, India · Khokhra, Memdabad, Ahmedabad – 380008, Gujarat, India · Gut No. 172, Daravali Village, Taluka Mulshi, District Pune – 412018, Maharashtra, India · 55, Whitefield Road, Mahadevapura Post, Bangalore – 560048, Karnataka, India
Branch Office :	MUMBAI Neptune House, 2^nd Floor, Opp. Bandra Talkies, SV Road, Mumbai – 400050, Maharashtra, India Tel: 91-22-26513367/68/69 Fax: 91-22-26513472 DELHI 8 Community Centre, Saket, New Delhi– 110017, India Telefax: 91-11-51664620/24 BANGALORE Grace Mansion, 25 Infantry Road, Bangalore – 560001, Karnataka India Tel: 91-80-22865117/7697 Fax: 91-80-22860564 KOLKATA 100, Park Street, Laxmi Nivas, 2^ndFloor, Kolkata , West Bengal, India Telefax: 91-33-22835792 International Offices USA Arvind Worldwide (USA) Inc., 130, West 42^nd Street, Suite No. 603, 6^th floor, NY 10036, New York, USA Tel : 001-212-768-4815 Fax: 001-212-768-7378 SRI LANKA Sri Lanka Liason Office 207/24, 2/2 Dharmapala Mawatha, Colombo, Sri Lanka TeleFax: 0094-11-2678564 BANGLADESH C/o Sidko Limited. 7th. Floor, Paragon House , Mohakali Commercial area, Dhaka - 1212 Bangladesh Tel : 8802-9881794 Fax : 8802-9883400 Sharda Trust Asoka Spintex Premises, Naroda Road, Ahmedabad – 380025, Gujarat India Tel: 91-79-22200817/3266 Fax: 91-79-22200457
Other Division :	Santej Road, Near Khatrej, Taluka Kalol, Dist Gandhinagar - 382721 Gujarat , India Tel:  91-2764-281100/22 Fax: 91-2764-281027 Khakhi Division Santej Road, Near Khatrej, Taluka Kalol, Dist Gandhinagar - 382721 Gujarat , India Tel:  91-2764-281100/22 Fax: 91-2764-281177 Knits Division Santej Road, Near Khatrej, Taluka Kalol, Dist Gandhinagar - 382721 Gujarat , India Tel:  91-2764-281100 Fax: 91-2764-281060 Ankur Textiles Outside Raipur Gate, Ahmedabad – 380022, Gujarat , India Tel: 91-79-25461191/ 95 Fax: 91-79-25454182   Arvind Brands Limited Du Parc Trinity 8^th Floor, 17, M. G. Road,Bangalore – 560001, Karnataka, India Tel: 91-80-22973131 Fax: 91-80-25594384 Denim Division Naroda Road, Ahmedabad – 380025, Gujarat, India Tel:  91-79-22203030 Fax: 91-79-22200267
Garment Export Division :	10th Floor, Du Parc Trinity, 17 MG Road, Bangalore -560001, Karnataka, India
Tel No.:	91-80-251123900/5
Fax No.:	91-80-251123909
Locations and Sites:	Located at: · Ahmedabad, Gujarat · Gandhinagar, Gujarat · Bangalore, Karnataka
Overseas offices 1:	Arvind Worldwide Inc. 130, West, 42^nd Street, Suite 603, 6^th Floor, New York, NY-10036, USA
Tel No.:	+12127684815
Fax No.:	+12127687378
E mail:	raju@arvindusa.com
Overseas offices:	Arvind Denim Lab 584, Broadway New York, Suite 801, New York 10012
Tel No.:	+12124314256
E mail:	viresh@arvinddenmlab.com
Overseas offices:	Paragon House 5, Mohakhali Commercial Area, Dhaka 1212, Bangladesh
Tel No.:	+880228827122/ 9881794
Fax No.:	+ 88029883400

DIRECTORS

As On 25.09.2009

Name:	Mr. Sanjay S. Lalbhai
Designation:	Chairman and Managing Director
Age:	52 Years
Qualification:	Science Graduate, Master’s Degree in Business Management
Date of Joining:	March, 1977
Other Directorship:	Ø Arvind Spinning Limited, Mauritius Ø Arvind Clothing Limited – Director Ø Arvind Fashions Limited – Director Ø Arvind Brands Limited – Director Ø Arvind Products Limited – Director Ø Amtrex Hitachi Appliances Limited – Chairman Ø Anagram Wellington Asset Management Company Limited – Director Ø Anagram Housing Finance Limited – Director Ø H. K. Finechem Limited – Director Ø Amol Dicalit Limited – Director Ø Gujarat Infrastructure Limited – Director Ø Mahindra Gujarat Tractor Limited - Chairman
Name:	Mr. Jayesh K. Shah
Designation:	Director Chief Financial Officer
Age:	45 years
Qualification:	Commerce Graduate Chartered Accountant
Date of Joining:	01.07.1993
Other Directorship:	Ø Asman Investments Limited Ø Lifestyle Fabrics Limited Ø Arvind Spinning Limited, Mauritius Ø Arya Omnitalk Wireless Solutions Limited Ø Anagram Stockbroking Limited Ø Anagram Comtrade Limited Ø Anagram Securities Limited Ø Dropadi Finance Limited Ø e-Infochips Limited Ø Firenze Properties & Investments Private Limited Ø Arvind Murjani Brands Private Limited
Name :	Mr. Sudhir Mehta
Designation :	Director
Name :	Mr. Tarun Sheth
Designation :	Director
Name:	Mr. Mukesh Khanna
Designation:	Non Executive and Independent Director
Qualification :	Chartered Accountant
Experience :	21 years
Other Directorship:	Ø Anagram Securities Limited Ø Indofil Organic Industries Limited Ø Caption Investments & Trading Company Private Limited
Profile :	Mr. Munesh Khanna is a Non-executive and Independent Director of the Company. He is a Chartered Accountant from ICAI. He has 21 years of experience in Investment Banking from across the Industrial spectrum in India in the areas of M and A, Financial Restructuring and Resource Raising. He has also an extensive experience in the Energy, Utilities and Telecom Sectors. Prior to joining Halcyon Resources and Mgt. Consulting Private Limited, he was the MD and Head of Investment Banking in DSP Merrill Lynch. He was the Country Head and MD of Rothschild India and Partner- Country Head of Arthur Andersen Corporate Finance. He has advised Indian Lenders on the Restructuring of the Dabhol Power Project and LNG facility for a total value of US$ 1.9 billion. AXA on its joint venture with Bharati Group, Air Deccan on rising funds US$ 40m through Private Equity, IPO and many other significant transactions. He was also a Member of CII and a member of the Executive Committee of ‘FICCI’ and Co - Chairman of the Finance and Capital Market committee of FICCI.
Name:	Mr. G. M. Yaswadkar
Designation:	Director (Nominated by IDBI Bank Limited”)
Name:	Mr. R W Khanna
Designation:	Nominated by Export – Import Bank of India
Name:	Mr. Arvind N. Lalbhai
Designation:	Chairman
Age:	84 Years
Qualification:	Science Graduate
Date of Joining:	March, 1974
Other Directorship:	Ø Arvind Products Limited – Chairman Ø Atul Limited – Chairman Ø Birla VXL Limited – Director Ø JK Industries Limited – Director Ø Lokprakashan Limited – Director
Name :	Mr. K M Jayarao
Designation :	Nominee by ICICI Bank Limited
Name :	Mr. S. R. Rao
Designation :	Director (Nominee by Export Import Bank of India)

KEY EXECUTIVES

Name :	Mr. R V Bhimani
Designation :	Company Secretary
Address :	Secretarial Department, Naroda Road, Ahmedabad – 380 025, Gujarat, India
Tel. No.:	91-79-22203030/ 22200206
Fax No. :	91-79-22201608
Email :	investor@arvind.com

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 31.03.2011)

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	3,322,988	1.31
Bodies Corporate	107,433,594	42.23
Sub Total	110,756,582	43.54
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	110,756,582	43.54
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	17,635,964	6.93
Financial Institutions / Banks	1,622,478	0.64
Insurance Companies	19,22,071	7.56
Foreign Institutional Investors	18,539,558	7.29
Any Others (Specify)	1,213	-
Foreign Bank/IFCW	1,213	-
Sub Total	57,019,284	22.41
(2) Non-Institutions
Bodies Corporate	13,119,508	5.16
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	54,753,448	21.52
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	16,247,994	6.39
Any Others (Specify)	1,925,133	0.76
NRIs/OCBs	1,925,133	0.76
Sub Total	86,046,083	33.82
Total Public shareholding (B)	143,065,367	56.24
Total (A)+(B)	253,821,949	99.77
(C) Shares held by Custodians and against which Depository Receipts have been issued	578,092	0.23
Total (A)+(B)+(C)	254,400,041	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Denim Fabric, Shirting Fabric, Shirts, Knitted Fabric and Garments.

Products :

Item Code (ITC Code)	Product Description
520942.00	Denim
520832.00	Dyed Poplin/Shirting
520524.00	Cotton Yarn
52080000	Woven Fabric of Cotton weighing not more than 200 g/m2
62034200	Mens/ Boys Trousers/ Pants and Shorts
62052000	Mens/ Boys Shirts

Brand Name :

v Newport

v Flying Machine

v Excalibre

v Ruf and Tuf

PRODUCTION STATUS

As on 31.03.2009

Particulars	Unit	Actual Production (Quantity in millions)
Cloth	Meters	91.300
Cloth	Kgs.	1.300
Yarn	Kgs.	1.400
EPBAX	Lines	0.200
Garments	Nos.	17.400
Yarn @	Kgs.	0.600
Grey @	Meters	0.200
Grey @	Kgs.	[429570.000]

Particulars	Installed Capacity
Spindles	106776
Rotors	8112
Stitching Machines	678
Knitting Machines	116
Looms	1012
EPBAX / RAX System Lines	200000
Garments (Pcs.)	12340000

GENERAL INFORMATION

No. of Employees :

Around 6000

Bankers :

v State Bank of Saurashtra, Ahmedabad, Gujarat v State Bank of India, Ahmedabad, Gujarat v Bank of Baroda, Ahmedabad, Gujarat v UCO Bank, Ahmedabad, Gujarat v State Bank of Patiala, Ahmedabad, Gujarat v Credit Lyonnais, Ahmedabad, Gujarat v Deutsche Bank, Ahmedabad, Gujarat v HDFC Bank, Ahmedabad, Gujarat v The Bank of Nova Scotia, Ahmedabad, Gujarat v Standard Chartered Grindlays Bank, Ahmedabad, Gujarat v Bank of America, Ahmedabad, Gujarat v ICICI Bank Limited, Ahmedabad, Gujarat v Calyon Bank v Export Import Bank of India v Axis Bank Limited v ABN Amro Bank NV v State Bank of Hyderabad v Canara Bank

Banking Relations :	Satisfactory
Auditors :	Sorab S. Engineer and Company Chartered Accountants
Address :	381, Dr. D. Naoroji Road, Fort, Mumbai - 400 023, Maharashtra, India
Associates :	v Anup Engineering Limited Engaged in manufacturing of equipments for chemical, petrochemical, pharmaceutical, fertilizer, dairy allied industries. v Lalbhai Realty Limited Engaged in real estate business v Amtrex Appliances Limited Engaged in manufacturing of room air conditioner. It has technical collaboration with Hitachi, Japan. v Arvind Intex Limited v Anagram Finance Limited v Arvind Polycot Limited v Atul Products Limited v Amtrex Appliances Limited v Lalbhai Exports Limited
Subsidiaries :	v Asman Investments Limited v Arvind Products Limited v Arvind Brands Limited v Arvind Clothing Limited v Arvind Fashions Limited v Asman Investments Limited v Lifestyle Fabrics Limited v Omnitalk Wireless Solutions Limited v Syntel Telecom Limited v Arvind Worldwide Inc. USA v Arvind Worldwide (M) Inc., Mauritius v Arvind Overseas (M) Limited, Mauritius v Big Mill Lauffenmuhle GmbH, Germany v Arvind Spinning Limited, Mauritius v Arvind Rtail Limited v Arvind Textiole Mills Limited, Bangladesh v Arvind Lifestyle Brand Limited v Arvind Accel Limited v Syntel Telecom Limited
Joint Ventures :	v Arya Omnitalk Wireless Solutions Limited v Arvind Murjani Brands Private Limited v VF Arvind Branda Private Limited v Diesel Fashion India Arvind Private Limited

CAPITAL STRUCTURE

(As on 25.09.2009)

Authorised Capital: Rs. 4500.000 Millions

Paid up Capital: Rs. 2600.980 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

OURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		2319.800	2387.800	2519.800
2] Share Application Money		0.000	0.000	0.000
3] Equity Share Warrants		75.700	213.200	213.200
4] Reserves and Surplus		11804.500	9404.700	11970.500
5] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		14200.000	12005.700	14703.500
LOAN FUNDS
1] Secured Loans		17287.300	19177.700	17704.700
2] Unsecured Loans		1418.500	1030.400	1309.700
TOTAL BORROWING		18705.800	20208.100	19014.400
DEFERRED TAX LIABILITIES		128.200	128.200	128.200
Non Convertible Debentures		0.000	31.300	44.700
TOTAL		33034.000	32373.300	33890.800
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		19181.100	20422.900	20362.100
Capital work-in-progress		468.600	815.800	1161.400
INVESTMENT		3002.900	1000.600	1049.900
DEFERREX TAX ASSETS		0.000	0.000	0.000
Foreign Currency Monetary Item Transaction Difference in Account		0.000	67.700	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	4320.000	5814.700	5753.400
	Sundry Debtors	4241.600	3508.400	2617.700
	Cash & Bank Balances	431.400	268.300	163.200
	Other Current Assets	0.000	549.000	732.600
	Loans & Advances	5807.000	5784.700	5444.500
Total Current Assets		14800.000	15925.100	14711.400
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	4344.800	4632.900	3270.900
	Other Current Liabilities	0.000	0.000	0.000
	Provisions	73.800	1326.600	218.100
Total Current Liabilities		4418.600	5959.500	3489.000
Net Current Assets		10381.400	9965.600	11222.400
MISCELLANEOUS EXPENSES		0.000	100.700	95.000
TOTAL		33034.000	32373.300	33890.800

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	23167.500	23449.900	22903.300
		Other Income	696.800	519.100	159.100
		TOTAL (A)	23864.300	23969.000	23062.400
Less	EXPENSES
		Manufacturing Expenses	3783.000	5970.700	5608.000
		Administrative Expenses	924.800	1571.600	1490.000
		Other Expenses	15177.500	13793.600	13082.800
		Increase/(Decrease) in Finished Goods	187.800	(348.600)	(94.900)
		TOTAL (B)	20073.100	20987.300	20085.900
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3791.200	2981.700	2976.500
Less	FINANCIAL EXPENSES (D)		2133.200	1220.500	1366.400
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1658.000	1761.200	1610.100
Less/ Add	DEPRECIATION/ AMORTISATION (F)		1138.000	2221.300	1314.000
	PROFIT BEFORE TAX (E-F) (G)		520.000	(460.100)	296.100
Less	TAX (I)		0.000	18.600	22.500
	PROFIT AFTER TAX (G-I) (J)		520.000	(478.700)	273.600
	ADJUSTED BELOW NET PROFIT		(4.300)	(896.900)	(13.400)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		2823.400	4349.200	4250.000
Less	APPROPRIATIONS		194.900	150.200	161.000
	BALANCE CARRIED TO THE B/S		3144.200	2823.400	4349.200
	Earnings Per Share (Rs.)		2.20	(2.28)	1.17

QUARTERLY RESULTS (UNAUDITED)

PARTICULARS	30.06.2010 (Rs. In Millions)	30.09.2010 (Rs. In Millions)	31.12.2010 (Rs. In Millions)
	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	5777.000	6502.400	6402.100
Total Expenditure	4844.000	5631.000	5600.800
PBIDT (Excl OI)	933.000	871.400	801.300
Other Income	93.900	186.100	287.400
Operating Profit	1026.900	1057.500	1088.700
Interest	536.200	476.700	499.200
Exceptional Items	0.000	0.000	0.000
PBDT	490.700	580.800	589.500
Depreciation	300.400	298.000	275.300
Profit Before Tax	190.300	282.800	314.200
Tax	0.000	0.000	0.000
Provisions and Contingencies	0.000	0.000	0.000
Profit After Tax	190.300	282.800	314.200
Extraordinary Items	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000
Other Adjustment	0.000	0.000	0.000
Net Profit	190.300	282.800	314.200

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	2.18	(1.99)	1.19
Net Profit Margin (PBT/Sales)	(%)	2.24	(1.96)	1.29
Return on Total Assets (PBT/Total Assets}	(%)	1.53	(1.27)	0.83
Return on Investment (ROI) (PBT/Networth)		0.04	(0.02)	0.02
Debt Equity Ratio (Total Liability/Networth)		1.63	2.18	1.53
Current Ratio (Current Asset/Current Liability)		3.35	2.67	4.22

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject is the largest cotton textiles manufacturer and exporter in India. They are the leading player in the branded garments in the domestic market. The company's principal business consists of manufacturing and marketing of Denim Fabric, Shirting Fabric, Shrits, Knitted Fabric and Garments. The company having the rights to market international brands such as Lee, wrangler, Arrow and Tommy Hilfiger in India. The company has also owns popular brands such as Newport, Flying Machine, Excalibre and Ruf and Tuf. They are having their production facilities at Ahmedabad, Mehsana, Gandhinagar in Gujarat, Pune in Maharashtra and Bangalore in Karnataka. 

Subject was incorporated in the year 1931 as Arvind Mills Limited by three brothers Kasturbhai, Narottambhai and Chimanbhai. In the year 1934, they established themselves amongst the foremost textile units in the country. They are first company to bring globally accepted fabrics such as Denim, yarn dyed shriting fabrics and wrinkle free gabardines to India in the year 1986. 

In the year 1987, they started retail outlets for 'Arrow' brand and became the first company to bring international shrit brand 'Arrow' to India. The company joint venture includes their technical and marketing alliance with F M Hammerie Von-Ogensver Waltungs, Austria, the US based Alamac Knit Fabrics and Spinners and Webexi Dict Turt, Switzerland. Company in 1985 has diversified into electronics by setting up a plant to manufacture electronic telephone exchanges (EPABX). They also entered into marketing pharmaceutical products and BandW and colour television sets under the name Pyramid. 

During the year 2001-02, the compnay increased the number of Spindles and Stitching Machines by 2036 Nos and 38 Nos respectively. In the next year, they further increased the number of Stitching machines by 7 Nos. During the year 2003-04, the company expanded their shirts manufacturing capacity from 2.4 million pieces to 4.8 million pieces per annum. During the same year, their subsidiary company, Arvind Spinning Limited commenced their operation. 

In March 2005, the company commenced their operations of producing Jeans Pant in Bangalore with the installed capacity of 4 million Pcs per annum. During the year 2005-06, new Denim collection was launched which was aimed at the Super Premium brands of the USA, Europe, Japan and Korea. The response to this collection was good and they have opened new venues for the Denim division. 

The company demerged and transfered the Garments Business Division of their 100% subsidiary company, Arvind Brands Limited and amalgamate Arvind Fashions Limited, a 100% subsidiary of Arvind Brands Limited with them with effect from April 1, 2006. Also The Company has a joint venture company namely Arvind Murjani Brand Private Limited, through which they hold license to sell Tommy Hilfiger brand apparel in India. 

The operations of Arvind Brands Limited and their subsidiaries were merged with the Company with effect from April 1, 2006. The wholesale branded apparel business of Arvind Fashions Limited has been sold to VF Arvind Brands Private Limited with effect from August 31, 2006.  

In March 2008, the company signed a exclusive license agreement with The Philips-Van Heusen Corporation for designing, distribution and reatiling of IZOD brand apparels in India. From May 2008, the company name was changed from Arvind Mills Limited to Company.

OPERATIONS 

The Directors are pleased to report that during the year 2009-10, the Company has achieved all round improvement in the operations as a result of higher volumes following robust demand across all the product segments, lower energy cost as result of availability of gas for powergeneration and favourable exchange rate.
 
During the year the Company implemented the Scheme of de-merger of its Branded and Retail businesses in to 2 separate wholly owned subsidiary companies; Arvind Lifestyle Brands Limited (ALBL) and Arvind Retail Limited (ARL) respectively. Hence the results for the year 2009-10 are not strictly comparable with the previous year. After adjusting the figures of previous year for demerger, during the year 2009-10, the company has achieved Revenue growth of 23% at Rs. 23167.500 millions.
 
The company has registered a Net Profit after Extra-ordinary Items of Rs.520.000 millions compared to Net Loss of Rs. 478.700 millions in the previous financial year.
 
A detailed analysis of the financial results is given in the Management Discussion and Analysis Report which forms part of this report.

FINANCE 

During the year, the Company has repaid the installments of Term Loans amounting to Rs. 1210.000 millions falling due during the current year. The Company has also made fresh borrowings of Rs. 310.000 millions for funding capital expenditure and other requirements. Long Term Debt including lease of the Company stands to Rs. 9901.300 millions as on 31.03.2010
 
As reported in the last year, the Company has worked out the reschedulement plan for certain long term debts, amounting to Rs. 9040.000 millions. The Company implemented the said reschedulement plan during the year by way of execution of legal agreements. Post implementation, the maturity of term debts covered by the reschedulement plan stand extended till March 2017 with lower repayments in next 2 years i.e. 2009-10 and 2010-11 which will improve the liquidity position of the Company.

SUBSIDIARIES 

A detailed discussion on subsidiary companies and their performance during the year is contained in the Management Discussion and Analysis Report which forms part of this Report.
 
Pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India the Company has prepared Consolidated Financial Statements of the Company and its subsidiaries are included in the Annual Report.
 
In view of the closure of business, the accounts of Arvind Overseas (Mauritius) Limited and Arvind Spinning Limited have not been prepared on the going on concern basis. Arvind Textile Mills Limited has not commenced its business. Hence, the accounts of these subsidiary companies have not been consolidated with accounts of the company as per the provisions of the Accounting Standard 21 relating to consolidation of accounts.

CORPORATE GOVERNANCE 

The Company is committed to the tenets of good Corporate Governance and has taken adequate steps to ensure that the requirements of Corporate Governance as laid down in Clause 49 of the Listing Agreement are complied with.
 
A separate report on Corporate Governance and a Management Discussion and Analysis Report are being published as a part of the Annual Report of the Company.
 
The Auditors of the Company have certified that conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement are complied by the Company and their Certificate is annexed to the Report on Corporate Governance.
 

MANAGEMENT DISCUSSION AND ANALYSIS: 

OVERVIEW: 

Although volatile and uneven, the Indian economy recovered in 2009-10. Specifically the latter half of 2009-10 saw a significant improvement with the positive turnaround of the industrial and external trade segments of 
the Indian economy. On the back of this, the Indian textile industry which was hit hard by the global financial recession is also set to witness a recovery in 2010.
 
Currently the Indian textile and apparel market is US$62 billion out of which US$ 22 billion is contributed by exports and the rest US$40 billion is by the domestic market. According to the textile ministry, Indian textile market is expected to reach US$115 billion by 2012. In this span of three years, the domestic market is expected to reach US$ 60 billion and India's share of global textile exports is expected to increase from 4% to 7%.
 
The key drivers of growth for this industry will be the rise  in export demand and improved liquidity conditions which will ensure a stable to growing domestic demand for textile products. The downside risk arises from the volatility in the global markets which threatens the exchange rate stability and the building inflationary pressures in the domestic economy which might adversely impact the textile industry. The cotton prices also remain the cause of concern. Moreover although the demand fundamentals re main strong, spending by consumers may remain value driven leading to pressure on margins.

Subsidiaries:

Arvind Lifestyle Brands Limited and Arvind Retail Limited:
 
As mentioned earlier during the year the Company implemented the Scheme of de-merger of its Branded and Retail businesses in to 2 separate wholly owned subsidiary companies; Arvind Lifestyle Brands Limited (ALBL) and Arvind Retail Limited (ARL) respectively.
 
Arvind Lifestyle Brands Limited.
 
The Branded Apparel business registered another good year with sales of Rs. 2530.000 millions and a growth of 35% in a year when market conditions were still grappling with the after effects of a global economic crisis.
 
Arrow continued it market dominance in premium segment and was rightly showered with recognition round the year. Arrow won the Best Iconic Brand award from Pantaloon, one of the leading retail chain; it was also awarded the 'Superbrands' status by Super brands Council of India-an award based on consumer preferences and expert opinion. Arrow has also enhanced its target market by including Sportswear and Women's wear categories.
 
During the year the Company successfully launched and positioned US Polo Association brand in departmental stores which dominated the market from day 1 of its introduction. As a testimony to its success USPA won the best 'Debutant Iconic brand award' from the Pantaloon group.
 
Yet another addition to the array of premium brands, brand IZOD was launched in March 2010.
 
Flying Machine continued to excite the Indian youth with fashion designs and be among the top 5 denim brands in India.
 
Arvind Retail Limited.
 
The retail business had another good year with sales of Rs.3020.000 millions and a growth of 33%.
 
Mega-Mart made rapid progress in the current year to emerge as the  leading Value Retail player in the country. Currently Mega-Mart is operating with a retail space of 4.5. lakh sq.ft. with 120 small format stores and 4 large format stores. The focus on improvement of operational efficiency resulted in the large format business becoming profitable.
 
Mega-Mart will continue to aggressively expand in next year with the addition of both small format and large format stores.

Arvind Products Limited

Backed by improved performance of Khaki Business, the Arvind  Products Limited registered revenue growth of 23% and operating profit grew by 27%. This has been best ever performance in the recent times. Due to high depreciation charge, the PBT was negative. The deferred tax liability provided earlier, was required to be written back resulting in Net Profit of Rs. 4 cr.

Anup Engineering Limited

Anup Engineering Limited is engaged in engineering and fabrication business listed on Ahmedabad Stock Exchange. The Company's revenue grew by 13% and operating profits grew by 27% and Profit after tax grew by 22%.

Outlook

On backdrop of resurgence in demand from US and European markets, growing domestic market, favourable exchange rate, lower energy cost and expansion in capacities in both Denim fabric and cotton woven fabric through outsourcing route, the company expects growth in both, revenue as well as operating margins in next year. The Company's plan for unlocking the value from its surplus land is progressing well. The Company is expecting to realize about Rs. 750.000 millions by way of sale of land in year 2010-11 which will lead to reduction in long term borrowing and consequent reduction in interest and finance cost.
 
With the fresh tremors in the European markets, any forecast is subject to unplanned surprises. Further both exchange rates andcotton prices, key profit drivers for the Company continue to be volatile and thereby making it difficult to predict its impact on the business.
 
With 200 Million meters of capacity, the Company is one of the largest players in the world. Through product differentiation and Cost competitiveness the Company has been able to service some of the best 
customers in the world. In the recent past, the Company has re-entered the domestic retail market segment by expanding its distribution and offering unique functional fabrics to the consumer at affordable prices. While its fabrics and garments business will continue to grow by 10%-12% in next 3-5 years, the major growth driver would be brands and retail business. Further Company is entering the segment of Technical Textile/Advance Material and which is expected to contribute significantly to the revenue of the Company in next 3-5 years. The cash realized by unlocking the value of surplus land will go to reduce the long-term debt over and above the normal repayments, which will reduce the financial leverage and also help in improving ROCE.
 

TRADE REFERENCE:

v Atul Enterprises

v Albaj Engineering Corporation

v B. Trikamlal and Company

v Climax Marketing Private Limited

v Fourwent Engineering Company

v Geekay Corporation

v Chamunda Fabrication

v Chipko Bonding Systems

v Siddhi Polymers Private Limited

v Archem Industries

v Arjyot Chemicals Private Limited

v Synergy Chlorinations Private Limited

v Bhagat Engineering Works

v Bhavik Industries

v Shree Laxmi Engineering

v Gemini Polyplast Industries

v Sun Industries

v Khodiyar Industries

v R-Tex Enterprise

FIXED ASSETS:

v Freehold leasehold

v Buildings

v Machinery

v Machinery given on lease

v Motor vehicles office machinery dead stock

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31.12.2010

(Rs. In Millions)

Particulars	Quarter ended 31.12.2010	Quarter ended 30.06.2010
	Unaudited	Unaudited
1 (a) Net Sales/ Income from Operations	6339.800	5696.500
(b) Other Operating Income	141.200	80.500
(c) Total (a+b)	6481.000	5777.000
2. Expenditures
(a) (Increase) in Stock in trade and work in progress	(417.700)	(303.400)
(b) Consumption of Raw Material and Accessories	3290.900	2704.400
(c) Purchase of traded goods	90.700	82.500
(d) Employee Cost	671.800	669.900
(e) Power and Fuel	613.300	554.100
(f) Stores and Spares	460.400	441.600
(g) Depreciation	275.300	300.400
(h) Other Expenses	891.400	694.900
(i) Total	5876.100	5144.400
3. Profit form Operations before other Income, Internet and Exceptional Items (1-2)	604.900	632.600
4. Other Income	123.000	93.900
5. Profit before Interest and Exceptional Items ( 3+4)	728.700	726.500
6. Interest and Finance Cost (net)	414.500	536.200
7. Profit/ Loss after Internet but before Exceptional Items ( 5-6)	314.200	190.300
8. Add/ Less : Exceptional Items	0.000	0.000
9. Profit/ Loss From Ordinary Activities before tax ( 7+ 8)	314.200	190.300
10. Tax Expenses:
- Current Tax	53.600	53.900
-MAT Credit Entitlement	(53.600)	(53.900)
11. Net Profit / Loss From Ordinary Activities after Tax ( 9-10)	314.200	190.300
12. Extra Ordinary Items (Net)	0.000	0.000
13. Net Profit / Loss For the Period ( 11-12)	314.200	190.300
14. Paid-up Equity Shares capital (Face value Rs. 10/- per share)	2544.000	2319.800
15. Reserves excluding revaluation reserve as per balance sheet of previous years
16. Earning per share (EPS) (Rs.) (Not Annualised)
- Basis	1.32	0.82
-Diluted	1.48	0.75
17. Public Shareholding
-No. of Sahres	143589959	142187459
- Percentage of Shareholding	56.44%	61.29%
18. Promoters and Promoter group shareholding
a) Pledged/ Encumbered
- Number of shares	515000	42215000
- Percentage of shares (as % of the total shareholding of promoter and promoter gropup)	0.45%	47.02%
-Promoter of shares (as a % of the total share capital of the company)	0.20%	18.20%
b) Non-encumbered
- Number of shares	110295082	47575082
- Percentage of shares (as a % of the total shareholding of Promoter and promoters group)	99.54%	52.98%
- Percentage of shares (as a % of the total share capital of ht company)	43.36%	20.51%

SEGMENTWISE REVENUE RESULTS AND CAPITAL EMPLOYED

(Rs. in Millions)

Particulars	Quarter ended 30.06.2010
	Unaudited
1. Segment Revenue (Net Sales/ Income From Operations)
(a) Textiles	5586.300
(b) Others	190.700
Total	5777.000
Add: Other Unallocable Income	0.000
Less: Inter Segment Sales	0.000
Net Sales/ Income From Operations	5777.000
2. Segment Result (Profit and loss) Before interest and tax)
(a) Textiles	749.600
(b) Others	9.300
Total	758.900
Less:
(a) Interest and Finance Charges (Net)	536.200
(b) Other Unallocable expenditure (net off un-allocable income)	32.400
Profit/ Loss Before Extra ordinary Items and Tax	190.300
3. Capital Employed (Segment Assets – Segment Liability)
(a) Textiles	21843.200
(b) Others	503.400
(c) Unallocable	9931.400
Total Capital Employed in Company	32278.000

AS PER WEB DETAILS

PROFILE

The Subject was set up with the pioneering effort of the Lalbhai brothers in 1931. With the best of technology business acumen, Arvind has become a true Indian multinational, having chosen to invest strategically, where demhas been high quality required has been superlative. Today, The Subject is the flagship company of Rs.20 billion (US$ 500 million) Lalbhai Group.

Subject has set the pace for changing global customer demands for textiles has focused its attention on select core products. Such a focus has enabled the company to play a dominant role in the global textile arena. With its presence across the textile value chain, the company endeavors to be a one-stop shop for leading garment brands.

Forevision Technology has brought Arvind to be one of the top three producers of Denim in the world, on its way becoming the Global Textile Conglomerate. Arvind is already making its presence felt in Shirting’s, Knits Khakhis fabrics apart from being all set to create ripples in the ready to wear garments world over.

The Lalbhais –A Historical Perspective

The Lalbhais can trace their descent from Seth Shantidas (c.1590-1659), who was a dominant figure in the business and civic life of the city.   He enjoyed the patronage of the Moghul emperors to whom he was a trusted jeweler. Shantidas was amongst the prominent financers of his time as well. He played an influential role amongst the Jain community of his time, and it was because of his influence at the Moghul court that Shah Jehan confirmed the rights of the Jains over the ancient shrines  of Shetrunjaya. His grandson, Khushalchand, (1680-1748) too occupied a place of prominence in the business and social life of the city. He  saved the city of Ahmedabad from the marauding Maratha army in 1725 by paying a ransom of Rs. 0.500 Million on behalf of the whole city. For this act the grateful “mahajans”  promised in perpetuity, a small amount collected as town duties on goods entering the city to Khushalchand and his family, and the title of Nagarsheth was bestowed upon him .

The current surname, Lalbhai, is derived from Lalbhai Dalpatbhai the great great great grandson of Khushalchand. Lalbhai was born around the time when the first textile factory in the city went into production. The first manufacturing company of the Lalbhai family, Saraspur Manufacturing Company was established in 1897. It started with producing cotton yarn. During the intensifying Swadeshi movement the second company Raipur Mills was established in 1905. Due to untimely death Lalbhai Dalpatbhai the reins of his businesses were handed over to his young sons including a seventeen year old Kasturbhai Lalbhai. Kasturbhai started the first large scale textile mill under the name of Asoka Mills in 1920 with a capital of Rs.1.200 Millions at a time when the largest mills in the region were built with not more than Rs. 0.500 Million.  1930-31 saw the resurgence of second Swadeshi movement coinciding with the great depression. While different entrepreneurs reacted to the situation differently Kasturbhai saw this as the decade of prosperity and growth and established the flagship Arvind Limited in 1931 with an authorized capital of Rs. 2.525 Millions. Kasturbhai had also floated mills for families of his three sisters under the name of Aruna Mills in 1928 and Nutan Mills in 1931 and Ahmedabad New Cotton Mills in 1938.

With the expansion Kasturbhai came to occupy the position of the biggest textile magnate in the country. Few groups could claim to have made such great strides during one of the worst periods in India’s industrial history.

After a continuously successful period of four decades in the pre-independence era, the group entered into other fields such as dyes, pharmaceuticals, chemicals, etc. The first diversification started in 1939 with Anil Starch Limited. Atul Products Limited was established in 1952 for manufacturing textile-related chemicals and dyestuff. Atul formed  joint ventures with Ciba-Geigy called Cibatul, with American Cynamid called Cynamid of India and with ICI of UK called Atic Industries.  As time progressed the JV partners separated amicably and these companies exist in India today as full representatives of these global giants.

With the retirement of Kasturbhai and his younger brother Narottambhai from active business, the role of the patriarch fell on the shoulders of Arvindbhai. He along with his brother Niranjanbhai and his cousins Ashokbhai, Ajaybhai, Chinubhai and Vijaysinhbhai looked into the running of the te1tile mills, Siddharthbhai headed Atul Products, and Shrenikbhai, Anilstarch. The group took over a sick company called Ahmedabad Laxmi Cotton Mills Company Limited and merged with Arvind Limited and the unit was renamed as Ankur Textiles. The unit currently under Arvind Products Limited is today the country largest organized player in the voiles market.

The group also invested in Anup Engineering Limited engaged in fabrication and set up Amol Dicalite in collaboration with General Refractories Limited, U.S.A for manufacturing filter aids and perlite products.

With the third generation of Lalbhais retiring from business Sanjay, Sunil and Samveg Lalbhai, the fourth generation of Lalbhais, now oversee all the businesses.

Apart from the field of business the Lalbhais over generations have contributed to education, social and religious causes. Their contribution to education starting from Gujarat Vernacular Society in late 1800’s to the formation of Ahmedabad Education Society, (1936), which governs 11 leading colleges and 6 schools, and 4 other educational programs. Kasturbhai Lalbhai played a key role in establishing the Physical Research Laboratory (1948), ATIRA(1947) and the famed IIM Ahmedabad (1961). The Lalbhai family has been closely associated with the Jain trust called Anandji Kalyanji Trust which is involved in propagating and maintaining Jain temples in western India.  Shri Kasturbhai Lalbhai headed the trust for 50 years, followed by Shrenik Lalbhai for 30 years, and now, Samveg Lalbhai  heads the trust.  Sanjay Lalbhai heads  Sharda Trust – Arvind’s CSR vehicle.  Arvind is committed to upgrading the standard of municipal schools in Ahmedabad and work towards building a pool of bright employable youth.

The Lalbhai Group has made significant monetary and management contributions to the following Institutions:

EDUCATION – PROFESSIONAL, CULTURAL, AND RESEARCH BODIES

• Ahmedabad Education Society
• Lalbhai Dalpatbhai Institute of Indology
• Ahmedabad Textile Industries Research Association  (ATIRA)
• L.D. Engineering College
• L.D. Arts College
• Indian Institute of Management, Ahmedabad
• Gujarat University
• Mohinaba Kanya Vidyalay
• Rachana School
• Lalbhai Dalpatbhai Municipal School
• Lalbhai Dalpatbhai Bharatiya Sanskriti Vidya Mandir
• Consumer Education and Research Center

HUMAN DEVELOPMENT

• Sharda Trust
• Narottam Lalbhai Rural Development Foundation
• Chandraprasad Desai Memorial Foundation
• Blindmen’s Association
• Sankat Nivarn Samhiti

MEDICAL CARE AND RESEARCH

• Gujarat Cancer Society
• Jiuraj Hospital
• Shaardaben Chimanbhai Minicipal Hospital
• Sharda School of Mentally Retarded Children
• Sudhir Chimanbhai Rehabilitation Center

Transformation:

History has been witness to the Arvind Group’s commitment to excellence, innovation, perseverance and undying attention to customer and societal needs. As an organization, Arvind has successfully integrated diverse businesses, services and products, unified by a common vision - of enriching lifestyles.

Founded in 1931, Arvind lost no time in establishing its position as one of India’s leading super-fine fabric manufacturers for the domestic market. And yet, Arvind has always felt the pulse of the market; welcoming change and reinventing itself for the challenges of a dynamic society and marketplace.

This policy of change has fetched them well deserved results. Arvind’s adoption of new-age fabrics has seen the Company emerge as one of the largest denim manufacturers in the world, while also bringing them global recognition for the manufacture of shirting, khakhi and knitted fabrics.

A large and growing presence in the manufacture of ready-made garments - jeans, shirts and knits – has further seen Arvind’s rise as a one-stop solution provider for leading global and domestic apparel brands.

Finally, the Company’s direction and rapid growth in the branded apparel and retail business along with a more recent involvement in the growing of organic cotton, has consolidated its presence through the apparel value chain.

Arvind’s expertise is end to end; they apply exacting standards of innovation, design and service through the journey; from its origin as a fiber of cotton in a farmer’s field, all the way to its culmination as a satisfying shopping experience. And that, in fact is the feather in the cap

BOARD OF DIRECTORS:

CHAIRMAN AND MANAGING DIRECTOR

MR. SANJAY S. LALBHAI

He is a Chairman and Managing Director of the Company. He is a Science Graduate with a Master's degree in Business Management. He has been associated with the Company for more than 28 years. He also holds directorships in Arvind Spinning Limited, Mauritius, Amol Decalite Limited, Mahindra Gujarat Tractor Limited, Torrent Pharmaceuticals Limited, Arvind Worldwide Inc., USA, Arvind Worldwide (M) Inc. and Arvind Overseas (M) Limited.

DIRECTOR AND CHIEF FINANCIAL OFFICER

MR. JAYESH K. SHAH

He is a Wholetime Director with designation of Director and Chief Financial Officer of the Company. He is a Commerce Graduate and Chartered Accountant and has been with the company for more than 22 years. He has a distinguished academic career and extensive administrative, financial, regulatory and managerial expertise. He also holds directorships in various companies. 

OTHER DIRECTORS

MR. SUDHIR MEHTA

He is a Non-executive and Independent Director of the Company. He is a Science Graduate from Gujarat University He was instrumental in the growth and progress of Torrent Pharmaceuticals Limited, the flagship Company of the Torrent Group. He systematically expanded the power business of Torrent Group by acquiring significant stakes in the Torrent Power AEC Limited, and Torrent Power SEC Limited, and Torrent Power Generation Limited now merged with Torrent Power Limited and one among the few successful independent power projects in India. He has managed strategic alliance with leading international giants from U.K., Germany, France and USA. He is an Executive Chairman of Torrent Power Limited, Chairman of Torrent Pharmaceuticals Limited and Torrent Private Limited and a Director of The Torrent Power Transmission Private Limited.

Dr. Bakul H. Dholakia

Dr. Dholakia is a Doctorate in Economics. He has 41 years of professional experience including 33 years at IIM, Ahmedabad and served as the Dean from 1998 to 2001 and as the Director of the Institute for a period of five years from 2002 to 2007. He has been a consultant to various national and international organizations. He was awarded many awards including Padma Shri by the Government of India in recognition of his distinguished services in the field of education in 2007, Bharat Asmita National Award for his contribution to management education and teaching by the Hon’be Chief Justice of India in 2008 etc.. Dr. Dholakia is the author of 12 books including The Sources of Economic Growth in India, Principles of Macroeconomics. Currently, Dr. Dholakia is leading the educational initiatives of Adani Group.

MR. MUNESH KHANNA

He is a Non-executive and Independent Director of the Company. He is a Chartered Accountant from Institute of Chartered Accountants of India. He has 21 years of experience in Investment Banking from across the Industrial spectrum in India in the areas of M and A, Financial Restructuring and Resource Raising. In addition, he has also an extensive experience in the Energy, Utilities and Telecom sectors.

Prior to joining Halcyon Resources and Manage ment Consulting Private Limited, he was the Managing Director and Head of Investment Banking in DSP Merrill Lynch. Prior to this he was the Country Head and Managing Director of Rothschild India and Partner- Country Head of Arthur Andersen Corporate Finance. He has advised Indian Lenders on the Restructuring of the Dabhol Power Project and LNG facility for a total value of US$ 1.9 billion. AXA on its joint venture with Bharati Group, Air Deccan on raising funds US$ 40m through Private Equity and IPO and many other significant transactions.

He is a member of the Young President Organisation (YPO). He was also a Member of CII and a member of the Executive Committee of Federation of Indian Chambers of Commerce and Industry ('FICCI') and Co - Chairman of the Finance and Capital Market committee of FICCI.

MR. G.M.YADWADKAR (NOMINEE OF IDBI)

He is a Nominee Director of IDBI. He is a General Manager of IDBI, Ahmedabad. He is also on the board of Ecoboard Inds. Limited, Pune, SJK Steel Plant Limited, Hyderabad, Gujarat Alkalies and Chemicals Limited, Vadodara and Gujarat Industrial and Technical Consultancy Organization Limited,

Mr. R. W. Khanna (Nominee of Exim Bank)

Mr. R. W. Khanna is a Nominee Director of Exim Bank. He is the Chief General Manager, heading the Corporate Finance Group at the Export-Import Bank of India, Mumbai. Resource raising, Treasury, Accounting, Payments and related functions are handled by the group. 

He joined the Exim Bank in the Project Finance Group  and has been in charge of the Exim Bank's Overseas Offices in Abidjan (Ivory Coast) and subsequently Chennai and Pune. 

He has experience spanning over three decades in varied assignments including production, marketing, project execution, project marketing, finance, banking etc. He is a Bachelor of Engineering and has done a full time Masters Programme in Management from IIM, Bangalore.  

He is also on the Board of Choksi Tube Company Limited and GHCL Limited.

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.44.30
UK Pound	1	Rs.72.92
Euro	1	Rs.64.69

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		52

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.