MIRA INFORM REPORT

Report Date :

19.11.2011

IDENTIFICATION DETAILS

Name :	THREADS (INDIA) LIMITED
Registered Office :	D-3/A, Panki Industrial Estate, Kanpur - 208 022, Uttar Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	28.05.1983
Com. Reg. No.:	20-6119
Capital Investment / Paid-up Capital :	Rs.20.000 Millions
CIN No.: [Company Identification No.]	U17116UP1983PTC006119
TAN No.: [Tax Deduction & Collection Account No.]	KNPT00069G KNPT01161G KNPT00191C
PAN No.: [Permanent Account No.]	AAACT5205H
Legal Form :	A closely held public limited liability company
Line of Business :	Manufacturers of Synthetic Sewing Threads.
No. of Employees :	500 [Approximately]

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

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

Maximum Credit Limit :	USD 990000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a part of Lohia Group. It is a well established and a reputed company having good track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good 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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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. Arun Kapoor
Designation :	Senior Manager in Accounts

LOCATIONS

Registered Office :	D-3/A, Panki Industrial Estate, Kanpur - 208 022, Uttar Pradesh, India
Tel. No.:	91-512-2691221
Fax No.:	91-512-2691249
E-Mail :	til@lohiagroup.com til@thresadsindia.com gc.lohia@lohiagroup.com jk.lohia@lohiagroup.com
Website :	www.threadsindia.com
Area :	1000 sq ft (Owned)
Head Office/ Factory 1:	Lohia Industrial Complex, Chaubepur, Kanpur-209203, Uttar Pradesh, India.
Tel. No.:	91-5112-282001/9
Fax No.:	91-5112-282012 / 282880
Location :	Owned
Factory 2:	Plot No. S-9, Apparel Park, Phase I, Doddaballapur, Bangalore-561203, Karnataka, India
Branches:	Located At: · Ahmedabad · Bangalore · Chennai · Gurgaon · Kanpur · Kolkata · Ludhiana · Mumbai · Noida · New Delhi

DIRECTORS

As on 29.09.2010

Name :	Mr. Gopal Chandra Lohia
Designation :	Managing Director
Address :	7/153 – B, Swaroop Nagar, Kanpur – 208002, Uttar Pradesh, India.
Date of Birth/Age :	05.07.1937
Date of Appointment :	16.05.1986
DIN No.:	00203506

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U29269UP1982PTC005581	Lohia Engineering Works Private Limited	Director	06-03-82	06-03-82	Strike off	NO
2	U29263UP1981PLC005446	Lohia Starlinger Limited	Director	04-04-83	04-04-83	Active	NO
3	U17116UP1983PLC006119	Threads (India) Limited	Managing director	01-03-11	16-05-86	Active	NO
4	U17115UP1987PLC009240	Lohia Packaging Machines Limited	Director	31-12-87	31-12-87	Active	NO

Name :	Mr. Jitendra Kumar Lohia
Designation :	Director
Address :	Saket, 3 A/ 88, Azad Nagar, Kanpur – 208002, Uttar Pradesh, India.
Date of Birth/Age :	16.03.1935
Date of Appointment :	17.09.1996
DIN No.:	00203384

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U29269UP1982PTC005581	Lohia Engineering Works Private Limited	Director	02-04-85	02-04-85	Strike off	NO
2	U17116UP1983PLC006119	Threads (India) Limited	Director	17-09-96	17-09-96	Active	NO

Name :	Mr. Ajay Kumar Lohia
Designation :	Whole Time Director
Address :	7/153 – B, Swaroop Nagar, Kanpur – 208002, Uttar Pradesh, India.
Date of Birth/Age :	03.04.1965
Date of Appointment :	27.07.2002
DIN No.:	00205223

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U65191UP1996PTC020815	Shipra Finsec Private Limited	Director	09-10-96	09-10-96	Active	NO
2	U70200UP1997PTC021941	Shri Foundries and Engineering Works Private Limited	Director	13-05-97	13-05-97	Active	NO
3	U17116UP1983PLC006119	Threads (India) Limited	Whole-time director	27-07-07	27-07-02	Active	NO

KEY EXECUTIVES

Name :	Mr. Arun Kapoor
Designation :	Senior Manager in Accounts

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 29.09.2010

Names of Shareholders	No. of Shares
Jitendra Kumar Lohia	15
Gopal Chandra Lohia	1
Urmila Devi Lohia	1
Ajay Kumar Lohia	1
Shradha Lohia	1
Sumya Lohia	1
Prashant Commercial Holdings Limited, India	1999980
Total	2000000

As on 29.09.2010

Equity Share Breakup	Percentage of Holding
Category
Bodies corporate	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Synthetic Sewing Threads.

Products :

Product Description	ITC Code
Sewing Thread of Man-Made Filaments of Synthetic	54011000
Sewing Thread of Man-made staple Fibre of Synthetic	55081000
Braided Twine, Cordage, Rope and Cables	56079000

PRODUCTION STATUS (AS ON 31.03.2010)

Particulars	Unit	Licensed Capacity	Actual Production
Synthesc Sewing Thread	MT	2500	1360.453

GENERAL INFORMATION

No. of Employees :

500 [Approximately]

Bankers :

· State Bank of India, Overseas Branch, 15/54 B, Virendra Smriti Complex, Civil Lines, Kanpur-208001, Uttar Pradesh, India.

· Industrial Development Bank of India Limited, 15/54 – B, Virendra Smriti, Civil Lines, Kanpur-208001, Uttar Pradesh, India

· HDFC Bank Limited

Facilities :

Secured Loans	As on 31.03.2010 Rs. in millions	As on 31.03.2009 Rs. in millions
Working Capital Loans From Banks (Secured by hypothecation of stock in trade and stores book debts claims rights and other current assets. Both current and future assets. Further secured by second charge on the entire fixed assets. Both present and future of the company and personally guranteed by the three directors and also guranteed by Holding company, Prashant Commercial Holdings Limited)	153.116	151.468
Term Loans From State Bank of India	13.250	30.218
From IDBI Bank Limited (Secured by pari passu first charge on the entire fixed assets and secondcharge on all current assets, both present and future of the company and personally guranteed by all the three directors and also guranteed by the Holding company, Prashant Commercial Holdings Limited) (Amount repayable within a year Rs.23.150 millions)	65.600	57.500
Total	231.966	239.186

Banking Relations :	--
Auditors :
Name :	Anil Pariek and Garg Chartered Accountants
Address :	33, Anand Bazar, Swaroop Nagar, Kanpur-208002, Uttar Pradesh, India.
Holding Company:	Prashant Commercial Holdings Limited (L67120UP1983PLC006093)

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10/- each	Rs.20.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10/- each	Rs.20.000 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		20.000	20.000	20.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		229.300	191.655	179.707
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		249.300	211.655	199.707
LOAN FUNDS
1] Secured Loans		231.966	239.186	240.062
2] Unsecured Loans		0.000	0.000	3.400
TOTAL BORROWING		231.966	239.186	243.462
DEFERRED TAX LIABILITIES		13.961	16.770	17.954
TOTAL		495.227	467.611	461.123
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		209.425	225.091	189.096
Capital work-in-progress		3.149	0.470	35.362
INVESTMENT		9.450	0.019	0.019
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	148.779	135.319	132.798
	Sundry Debtors	152.370	131.363	118.094
	Cash & Bank Balances	10.386	7.953	14.827
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	21.381	16.124	18.803
Total Current Assets		332.916	290.759	284.522
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	51.893	38.108	40.709
	Other Current Liabilities	0.980	4.180	3.231
	Provisions	6.840	6.440	3.936
Total Current Liabilities		59.713	48.728	47.876
Net Current Assets		273.203	242.031	236.646
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		495.227	467.611	461.123

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	620.652	547.509	490.249
		Other Income	7.248	5.175	2.502
		TOTAL (A)	627.900	552.684	492.751
Less	EXPENSES
		Cost of Goods Sold and Manufacturing Expenses	343.762	320.607	257.144
		Payments to and Provisions for Employees	86.151	73.495	63.010
		Administrative Expenses	91.987	80.310	79.631
		Loss on Sale of Assets	8.396	0.000	0.000
		TOTAL (B)	530.296	474.412	399.785
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		97.604	78.272	92.966
Less	FINANCIAL EXPENSES (D)		17.594	23.476	21.128
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		80.010	54.796	71.838
Less/ Add	DEPRECIATION/ AMORTISATION (F)		19.986	23.703	16.588
	PROFIT BEFORE TAX (E-F) (G)		60.024	31.093	55.250
Less	TAX (H)		22.094	9.728	20.997
	PROFIT AFTER TAX (G-H) (I)		37.930	21.365	34.253
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		141.278	129.223	94.970
Add / Less	EXPENSES RELATED TO EARLIER YEARS		(0.178)	0.007	0.000
Add / Less	DEPRECIATION RELATED TO EARLIER YEARS		0.000	9.303	0.000
	BALANCE CARRIED TO THE B/S		179.030	141.278	129.223
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	84.171	63.407	51.468
		Job Work Receipts	1.396	1.412	0.000
	TOTAL EARNINGS		85.567	64.819	51.468
	IMPORTS
		Raw Materials	83.688	90.507	78.669
		Stores & Spares	0.864	0.846	0.939
		Capital Goods	8.205	3.075	2.805
	TOTAL IMPORTS		92.757	94.428	82.413
	Earnings Per Share (Rs.)		18.97	10.68	17.13

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	6.04	3.87	6.95
Net Profit Margin (PBT/Sales)	(%)	9.67	5.67	11.27
Return on Total Assets (PBT/Total Assets}	(%)	11.07	6.03	11.66
Return on Investment (ROI) (PBT/Networth)		0.24	0.15	0.28
Debt Equity Ratio (Total Liability/Networth)		1.17	1.36	1.46
Current Ratio (Current Asset/Current Liability)		5.57	5.97	5.94

LOCAL AGENCY FURTHER INFORMATION

OPERATIONS:

Performance of the company during the year can be formed quite satisfactory. The company achieved a net turnover at Rs.620.700 millions compared to previous year figure of Rs.547.500 millions, thus recording a growth of 13.04% operating profit during the year was higher at Rs.106.000 millions as against Rs.78.300 millions of last year, showing a healthy growth of 35.4%.

OUTLOOK FOR THE FUTURE:

The company has been modernizing and expanding its manufacturing facilities on a continuous basis operations at new factory at Bangalore are also stabilized. The directors are confident of the company emerging stronger and more successful in the times to come.

As reported in the past the company has been accredited ISO / TS 16949-2002 certification by Dot Norkse Veritas, Netherlands. The company has also received approved product award from Satara Technology Centre, UK.

BANKERS CHARGES REPORT AS PER REGISTRY

This form is for	Creation of charge
Corporate identity number of the company	U17116UP1983PLC006119
Name of the company	THREADS (INDIA) LIMITED
Address of the registered office or of the principal place of business in India of the company	D-3/ A, Panki Industrial Estate, Kanpur-208022, Uttar Pradesh, India.
Type of charge	Book Debts Movable Property (not being pledge)
Particular of charge holder	State Bank of India, Overseas Branch, 15/54 B, Virendra Smriti Complex, Civil Lines, Kanpur-208001, Uttar Pradesh, India.
Email	sbiobcan@sancharnet.com
Nature of description of the instrument creating or modifying the charge	Agreement of hypothecation of goods and assets dated 18th May, 2011.and arrangement letter dated 9th May, 2011.
Date of instrument Creating the charge	18.05.2011
Amount secured by the charge	Rs.30.000 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest 1% higher than the interest rate approved for regular Cash Credit Limit. Terms of Repayment Payable On Demand Margin As per arrangement letter of state bank of India dated 9th May, 2011, as amended from time to time. Extent and Operation of the charge First charge on current assets of the company namely; stocks of raw materials, stocks in process, semi finished and finished goods , stores and spares not relating to plant and machinery, bills receivable, book debts and all other movables excluding such movables as may be permitted by the Bank.
Short particulars of the property charged	I) Plot No.484, 485a, 485b, Part of Plot No. 474 and 492,493, 505, 417 and 444. All Above Situated At Village, Amiliha, Tehshil Bilhaur, Kanpur. II) Plot No. S-9 At Doddaballapur, Bangalore.

CONTINGENT LIABILITIES:

Particular	As on 31.03.2010 (Rs. in millions)	As on 31.03.2009 (Rs. in millions)
Claims against the company not acknowledged as debts	2.540	2.165
Demand of central excise department for excise duty which the company has not admitted and is under contest	0.573	0.573
Demand of textile committee for cess which the company has not admitted and is under contest.	0.447	0.447
Demand of sales tax department for sales tax which the company has not admitted and is under contest.	0.240	0.240
Demand of sales tax department for sales tax which the company has not admitted and is under contest.	3.403	2.716
In respect of counter guarantee given to bank against guarantee given by them	0.600	0.942
Custom duty payable in case of non fulfillment of export obligation under EPCG scheme	3.709	0.000
Liability for bills discounted from banks against letter of credit	6.864	4.327
Total	18.376	11.410

FIXED ASSETS

· Land

· Building

· Plant And Machinery

· Furniture

· Office Equipment

· Vehicle

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.51.35
UK Pound	1	Rs.80.97
Euro	1	Rs.69.25

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--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		50

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.