MIRA INFORM REPORT

Report Date :

15.03.2011

IDENTIFICATION DETAILS

Name :	VARSHA FASHIONS PRIVATE LIMITED
Registered Office :	Block No. 96, Varsha House, At and P.O. Paldi- Kanklaj, Neark Naklang Mahadev, Piplej Dholka Road, Taluka Dascroi, Ahmedabad-382445, Gujarat
Country :	India
Financials (as on) :	31.03.2009
Date of Incorporation :	02.08.1995
Com. Reg. No.:	04-026970
CIN No.: [Company Identification No.]	U65910GJ1995PTC026970
TAN No.: [Tax Deduction & Collection Account No.]	AHMV00462A
Legal Form :	Private Limited Liability Company.
Line of Business :	Manufacturer, Trader and Exporter of different kinds of Sarees.

RATING & COMMENTS

MIRA’s Rating :

Ba (43)

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

Maximum Credit Limit :	USD 240000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered for normal 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

INFORMATION PARTED BY

Name :	Mr. Paresh Patel
Designation :	General Manager
Contact No.:	91-9327419004
Date :	24.02.2011

LOCATIONS

Registered Office/ Factory :	Block No. 96, Varsha House, At and P.O. Paldi- Kanklaj, Neark Naklang Mahadev, Piplej Dholka Road, Taluka Dascroi, Ahmedabad-382445, Gujarat, India
Tel. No.:	91-2718-304500/ 1/ 288349 91-79-32951007
Mobile No.:	91-9327419004 (Mr. Paresh Patel)
Fax No.:	91-2718-304511 91-79-32951007
E-Mail :	varsha.no@gmail.com naveenrmandovara@yahoo.co.in
Website :	http://www.varshafashion.com
Area :	4 Acre (Owned)

DIRECTORS

As on 30.09.2010

Name :	Mr. Navinchandra Kapadia
Designation :	Director
Address :	GIMITI, Near Three Gate, Khambhat, India
Date of Birth/Age :	72 Years
Qualification :	Under Graduate
Experience :	35 Years
Date of Appointment :	02.08.1995
DIN No.:	01122773
Name :	Mr. Dhiren Navinchandra Kapadia
Designation :	Director
Address :	GIMITI, Near Three Gate, Khambhat, India
Date of Birth/Age :	48 Years
Qualification :	B.com
Experience :	25 Years
Date of Appointment :	02.08.1995
DIN No.:	01122835
Name :	Mr. Jignesh Kapadia
Designation :	Director
Address :	GIMITI, Near Three Gate, Khambhat, India
Date of Birth/Age :	43 Years
Qualification :	Under Graduate
Experience :	25 Years
Date of Appointment :	02.08.1995
DIN No.:	01122876
Name :	Mr. Sureshchandra Ratilal Kapadia
Designation :	Director
Address :	GIMITI, Near Three Gate, Khambhat, India
Date of Birth/Age :	60 Years
Qualification :	Bsc., LLB
Experience :	35 Years
Date of Appointment :	02.08.1995
DIN No.:	01122907

KEY EXECUTIVES

Name :	Mr. Paresh Patel
Designation :	General Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders	No. of Shares
Sureschandra R Kapadia	100
Dhirenkumar N Kapadia	100
Jigneshkumar N Kapadia	100
Navinchandra R Kapadia	15000
Sureshchandra R Kapadia	14900
Dhirenkumar N Kapadia	14900
Jigneshkumar N Kapadia	13900
Navinchandra R Kapadia HUF	1000
Sureshchandra R Kapadia HUF	1000
Dhirenkumar N Kapadia HUF	600
Jigneshkumar N Kapadia HUF	600
Hardayveenaben N Kapadia	11000
Bhavnamen S Kapadia	11000
Shefaliben D Kapadia	4000
Jaxaben J Kapadia	4000
Varshaben N Kapadia	200
Binita S Kapadia	1000
Devanshi S Kapadia	1000
Dharmendra N Kapadia	200
Nagindas R Kapadia	200
Parimanlaben N Kapadia	200
Khusbu S Kapadia	5000
Total	100000

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, Trader and Exporter of different kinds of Sarees.
Products :	· Art Silk Saree · Pure Silk Saree
Exports :
Products :	Sarees
Countries :	USA UK Malaysia Dubai
Terms :
Selling :	Cash and Credit
Purchasing :	Cash and Credit (30 Days) (In Some cases payment against orders)

GENERAL INFORMATION

No. of Employees :

200 Approximately

Bankers :

• HDFC Bank Limited, Navarangpura, Ahmedabad, Gujarat, India
• HDFC Bank Limited, HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai-400013, Maharashtra, India
• Bank of India, Taluka Deskroi, Ahmedabad, Gujarat, India
• State Bank of India, Gambay Branch, Gambay, Maharashtra, India
• The AHD District Co operative Bank Limited

Facilities :

Secured Loans	31.03.2009 Rs. in Millions	31.03.2008 Rs. in Millions
HDFC Bank Ahmedabad (Against hypothecation of stock of raw material and finished goods and book debts)	15.489	12.009
HDFC Bank Ahmedabad	0.018	2.486
HDFC Ban Term Loan	12.544	7.998
HDFC Bank Ahmedabad Car Loan (Agaisnt Hypothecation of Inova Car)	0.279	0.580
The ADH District Co-Operative Bank Limited (Overdraft against fix deposit)	0.000	0.210
Total	28.330	23.283

Banking Relations :	--
Auditors :
Name :	Balkrishna T Thakkkar and Company Chartered Accountant
Address :	602, ‘Saffron’ Near Bank of Baroda, Ambawadi, Ahmedabad-380015, Gujarat, India

CAPITAL STRUCTURE

As on 31.03.2009

Authorised Capital :

No. of Shares	Type	Value	Amount
100000	Equity Shares	Rs. 10/- each	Rs. 1.000 Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value		Amount
100000	Equity Shares	Rs. 10/- each	Rs. 1.000 Million

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2009	31.03.2008	31.03.2007
SHAREHOLDERS FUNDS
1] Share Capital		1.000	1.000	1.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		59.455	48.050	42.024
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		60.455	49.050	43.024
LOAN FUNDS
1] Secured Loans		28.330	23.283	8.169
2] Unsecured Loans		100.755	124.076	131.685
TOTAL BORROWING		129.085	147.359	139.854
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		189.540	196.409	182.878
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		48.192	41.007	17.471
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	98.671	90.980	90.816
	Sundry Debtors	131.184	118.788	93.370
	Cash & Bank Balances	1.431	1.800	1.693
	Other Current Assets	0.804	0.913	11.167
	Loans & Advances	8.485	7.770	6.440
Total Current Assets		240.575	220.251	203.486
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	77.706	3.719	15.625
	Other Current Liabilities	14.522	54.994	16.835
	Provisions	6.999	6.136	5.619
Total Current Liabilities		99.227	64.849	38.079
Net Current Assets		141.348	155.402	165.407
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		189.540	196.409	182.878

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2009	31.03.2008	31.03.2007
	SALES
		Income	399.416	274.139	192.537
		Other Income	6.421	1.680	NA
		TOTAL	405.837	275.819	NA
Less	EXPENSES
		Office Expenses
		Administrative Expenses	379.650	261.657	NA
		Advertising Expenses
		TOTAL	379.650	261.657	NA
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		26.187	14.162	8.460
Less/ Add	DEPRECIATION/ AMORTISATION		8.082	4.957	1.627
	PROFIT BEFORE TAX		18.105	9.205	6.833
Less	TAX		6.700	3.179	2.570
	PROFIT AFTER TAX		11.405	6.026	4.263
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		48.050	42.024	37.761
	BALANCE CARRIED TO THE B/S		59.455	48.050	42.024
	Earnings Per Share (Rs.)		114.05	60.25	--

KEY RATIOS

PARTICULARS		31.03.2009	31.03.2008	31.03.2007
PAT / Total Income	(%)	2.81	2.18	NA
Net Profit Margin (PBT/Sales)	(%)	4.53	3.36	3.55
Return on Total Assets (PBT/Total Assets}	(%)	6.27	3.52	3.09
Return on Investment (ROI) (PBT/Networth)		0.30	0.19	0.16
Debt Equity Ratio (Total Liability/Networth)		3.78	4.33	4.14
Current Ratio (Current Asset/Current Liability)		2.42	3.40	5.34

LOCAL AGENCY FURTHER INFORMATION

Trade References:

· Nalli Group- South India

· Hoshiyar Singh Sureshchandra, New Delhi

Note:

The Registered office of the company has been shifted from C 27, G.I.D.C. Kausari, Khambat, Gujarat, India to present address w.e.f. 30.09.2005

Operations:

The turnover has increased considerably as compared to the previous year. The turnover amounted to Rs. 399.400 Millions (Previous year Rs. 274.100 Millions). Net Profit after tax was Rs. 11.405 Millions as against Rs. 6.025 Millions of previous year. Though the turnover increased in rupee term however turnover in terms of quantity has being increased basis due to fact that raw material price and selling price have being reduce during the year. This performance has improved the EPS and CEPS reflecting the intrinsic financial strength of the company.

Bankers Charges Report as per Registry

This form is for	Creation of charge
Corporate identity number of the company	U65910GJ1995PTC026970
Name of the company	VARSHA FASHIONS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	Block No. 96, Varsha House, At and P.O. Paldi- Kanklaj, Neark Naklang Mahadev, Piplej Dholka Road, Taluka Dascroi, Ahmedabad-382445, Gujarat, India
Type of charge	Movable Property
Particular of charge holder	HDFC Bank Limited, HDFC Bank House, Senapati Bapat Marg, Lower Parel, Mumbai-400013, Maharashtra, India
Nature of description of the instrument creating or modifying the charge	Memorandum Relating to Hypothecation of Machinery
Date of instrument Creating the charge	20.01.2009
Amount secured by the charge	Rs. 8.100 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest Interest at the rate as may be communicated by the Bank from time to time. Terms of Repayment On Demand Margin Company shall at all times during the continuance of this security maintain the said debts of a sufficient amount to provide the margin of security as may from time to time advised by the bank. Extent and Operation of the charge Hypothecation by way of first charge on company’s movable plant and machinery, to secure as a continuing security
Short particulars of the property charged	Hypothecation of all the movable plant and machinery both present and future.

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.45.15
UK Pound	1	Rs.72.59
Euro	1	Rs.62.95

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	4
--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		43

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.