MIRA INFORM REPORT

Report Date :

25.02.2011

IDENTIFICATION DETAILS

Name :	SHARMAN SPINNING MILLS PRIVATE LIMITED (w.e.f. 15.07.1996)

Formerly Known As :	SHARMAN AND BROTHERS POLYFABRICS PRIVATE LIMITED

Registered Office :	67- Club Road, Civil Lines, Ludhiana-141001, Punjab

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	19.04.1985

Com. Reg. No.:	16-006239

CIN No.: [Company Identification No.]	U17115PB1985PTC006239

Legal Form :	Private Limited Liability Company.

Line of Business :	Manufacturer of Wool Hosiery, Textile Yarn and Woolen Wasted Yarn.

RATING & COMMENTS

MIRA’s Rating :

Ba (49)

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

Maximum Credit Limit :	USD 1300000

Status :	Satisfactory

Payment Behaviour :	Usually Correct

Litigation :	Clear

Comments :	Subject is an established company having satisfactory track. General financial position is good. Trade relation are reported as fair. Business is active. 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

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

INFORMATION PARTED BY

Name :	Mr. Jogesh
Designation :	Accounts Manager
Contact No.:	91-161-2447538
Date :	23.02.2012

LOCATIONS

Registered Office :	67- Club Road, Civil Lines, Ludhiana-141001, Punjab, India
Tel. No.:	91-161-2447538/ 2449493/ 2449957
Fax No.:	91-161-2449957
E-Mail :	sharmanshawl@satyamn.net.in sharmanshawl@sify.com dasskhannaco@hotmail.com
Area :	1500 sq.ft. (Owned)

Factory :	B/14/2, Okhla Industrial Area-II, New Delhi, India

DIRECTORS

As on 30.09.2010

Name :	Mr. Ram Kumar Jain
Designation :	Director
Address :	27 Gole Bagh, Ludhiana-141001l, Punjab, India
Date of Birth/Age :	22.01.1933
Date of Appointment :	01.12.2010

Name :	Mrs. Ripan Jain
Designation :	Director
Address :	8 Rakh Bagh, Civil Lines, Ludhiana, Punjab, India
Date of Birth/Age :	07.03.1957
Date of Appointment :	19.04.1985

Name :	Mr. Rajan Jain
Designation :	Director
Address :	8 Rakh Bagh, Civil Lines, Ludhiana, Punjab, India
Date of Birth/Age :	16.03.1959
Date of Appointment :	19.04.1985

Name :	Mr. Aditya Jain
Designation :	Director
Address :	8 Rakh Bagh, Civil Lines, Ludhiana, Punjab, India
Date of Birth/Age :	15.11.1982
Date of Appointment :	01.10.2005

KEY EXECUTIVES

Name :	Mr. Jogesh
Designation :	Accounts Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders		No. of Shares
Rajan Jain		630015
Ram Kumar Jain		57770
Ripan Jain		630618
Santosh Jain		2500
Neena Jain		10900
Sarika Jain		10000
Aditya Jain		3000
Navneet Jain		1
Renu Jain		1
Varsha Jain		1
Anchal Jain		1
Akriti Jain		1
Naman Jain		2
Ripan Jain and Sons HUF		100
Rajan Jain and Sons HUF		100
Total		1345010

Equity Share Breakup (Percentage of Total Equity)

As on 30.09.2010

Category	Percentage
Directors or relatives of Directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Wool Hosiery, Textile Yarn and Woolen Wasted Yarn.

Products :

Product Description	ITC Code
Woolen Worsted Yarn	510710.01
Woolen Cloth	6202
Wool Waste	510320.01

Terms :

Selling :

Cash and Credit ( 30-60-90 Days)

Purchasing :

Cash and Credit ( 30-60-90 Days)

GENERAL INFORMATION

Customers :

Wholesalers, Retailers, End Users and OEM’s

No. of Employees :

Approximately 50

Bankers :

Citi Bank, Jeevan Vihar, 3 Sansad Marg, New Delhi-110001, India
State Bank of Bikaner and Jaipur, G.T.Road, Ludhiana, Punjab, India

Facilities :

Secured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
From Banks
A) Working Capital Borrowings
Citi Bank N.A (Secured by hypothecation of Stocks and book debts of the company additionally secured by Equitable mortgage of factory land and building situated at village shanewal, LDH and personally guaranteed by the directors)	0.000	0.000
B) Term Loans
Citi Bank N.A (Secured by hypothecation of plant and machinery financed by bank additionally secured by Equitable Mortgage of Factory Land and Building situated at Village Sahnewal LDH and Personally guaranteed by the directors)	157.206	150.000
State Bank of Bikaner and Jaipur (Secured by the hypothecation of machinery financed by the bank and personally guaranteed by the directors of the company) (Rs. 7.170 Millions repayable within one year (Previous year RS. 7.200 Millions)	7.171	12.725
Total	164.377	162.725

Unsecured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
Other Loans and Advances
From Banks	4.168	0.000
From Directors	128.818	138.216
From Shareholders	34.781	23.159
Total	167.767	161.375


Banking Relations :	--

Auditors :
Name :	Dass Khanna and Company Chartered Accountant
Address :	B-XX- 2815, Gurdev Nagar, Pakhowal Road, Ludhiana-141001, Punjab, India
Tel. No.:	91-161-2403029/ 2401230
Fax No.:	91-161-2409672

Associates/Subsidiaries :	Sharman Shawls Address: 67- Club Road, Civil Lines, Ludhiana-141001, Punjab, India Activity: Manufacturer of Wool Hosiery, Textile Yarn and Woolen Wasted Yarn.

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount

3000000	Equity Shares	Rs. 10/- each	Rs. 30.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

1345010	Equity Shares	Rs. 10/- each	Rs. 13.450 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		13.450	13.450	13.450
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		320.838	276.957	217.763
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		334.288	290.407	231.213
LOAN FUNDS
1] Secured Loans		164.377	162.725	92.561
2] Unsecured Loans		167.767	161.375	115.305
TOTAL BORROWING		332.144	324.100	207.866
DEFERRED TAX LIABILITIES		0.000	0.567	0.000

TOTAL		666.432	615.074	439.079

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		419.759	420.643	267.932
Capital work-in-progress		55.663	4.523	38.889

INVESTMENT		0.100	12.600	12.600
DEFERREX TAX ASSETS		7.015	0.000	0.300

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	188.939	198.453	106.955
	Sundry Debtors	21.284	24.621	20.080
	Cash & Bank Balances	32.195	28.656	16.589
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	19.745	20.860	21.936
Total Current Assets		262.163	272.590	165.560
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	53.543	66.807	28.752
	Other Current Liabilities	24.385	28.277	16.494
	Provisions	0.340	0.198	0.956
Total Current Liabilities		78.268	95.282	46.202
Net Current Assets		183.895	177.308	119.358

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		666.432	615.074	439.079

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	663.584	606.863	494.124
		Other Income
		TOTAL	663.584	606.863	494.124

Less	EXPENSES
		Office Expenses
		Administrative Expenses	502.886	453.102	374.156
		Advertising Expenses
		TOTAL	502.86	453.102	374.156

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		160.698	153.761	119.968

Less/ Add	DEPRECIATION/ AMORTISATION		94.044	62.954	46.215

	PROFIT BEFORE TAX		66.654	90.807	73.753

Less	TAX		22.917	31.535	25.430

	PROFIT AFTER TAX		43.737	59.272	48.323

	IMPORTS
		Greasyn Wool and Silk Yarn	145.976	170.840	88.175
		Capital Goods	76.111	98.023	53.823
		Machinery Parts	0.999	0.776	2.028
	TOTAL IMPORTS		223.086	269.639	144.026

	Earnings Per Share (Rs.)		32.52	--	--

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	6.59	9.77	9.78

Return on Total Assets (PBT/Total Assets}	(%)	9.77	13.10	17.01

Return on Investment (ROI) (PBT/Networth)		0.20	0.31	0.32

Debt Equity Ratio (Total Liability/Networth)		1.23	1.44	1.10

Current Ratio (Current Asset/Current Liability)		3.35	2.86	3.58

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF SUNDRY CREDITORS

(Rs. in Millions)

Particulars	31.03.2010	31.03.2009	31.03.2008
Sundry Creditors
Due to Micro and Small and Medium Enterprises	0.000	5.157	3.086
Due to Others	53.543	61.650	25.666
Total	53.543	66.807	28.752

Performance Review:

The operating and other income increase from Rs. 606.863 Millions in previous year to Rs. 663.584 Millions in current year. Profit before depreciation of the company is Rs. 160.698 Millions in current year as against Rs. 153.761 Millions in previous year. Profit after tax is Rs. 43.737 Millions in current year as against Rs. 59.272 Millions in previous year.

CONTINGENT LIABILITIES NOT PROVIDED FOR

Particulars

31.03.2010

Rs. in Millions

Estimated amount of contracts remaining to be executed on capital account (Net of Advances)

15.036

Bankers Charges Report as per Registry

This form is for	Modification of charge
Charge identification number of the modified	90180571
Corporate identity number of the company	U17115PB1985PTC006239
Name of the company	SHARMAN SPINNING MILLS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	67- Club Road, Civil Lines, Ludhiana-141001, Punjab, India
Type of charge	Immovable Property
Particular of charge holder	Citi Bank, Jeevan Vihar, 3 Sansad Marg, New Delhi-110001, India
Nature of description of the instrument creating or modifying the charge	Deed of Hypothecation of Loan Agreement
Date of instrument Creating the charge	29.03.2007
Amount secured by the charge	Rs. 8.000 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest As agreed in the agreement Terms of Repayment As agreed in the agreement Margin As agreed in the agreement Extent and Operation of the charge Equitable Mortgage on 2 properties located at Village Sahnewal, Ludhianan
Short particulars of the property charged	Equitable Mortgage on 2 properties located at Village Sahnewal, Ludhianan
Date of latest modification prior to the present modification	06.11.2003
Particulars of the present modification	Charge on additional property in addition to existing property for working capital facilitates Rs.8 million as under: - Equitable Mortgage on 2 properties located at Village Sahnewal, Ludhiana

Fixed Assets:

· Land

· Building

· Plant and Machinery

· Furniture and Fixture

· Vehicles

· Office Equipments

· Computer

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.45.97
UK Pound	1	Rs.73.54
Euro	1	Rs.62.39

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
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	5
--RESERVES	1~10	6
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		49

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.

MIRA INFORM REPORT

188.939

21.284

32.195

0.000

19.745

262.163

53.543

24.385

0.340

78.268

183.895

6.59

9.77

0.20

1.23

3.35

Unit