MIRA INFORM REPORT

Report Date :

03.08.2012

IDENTIFICATION DETAILS

Name :	VTM LIMITED
Registered Office :	Sulakarai, Virudhunagar, Ramnad District-626003, Tamilnadu
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	27.07.1946
Com. Reg. No.:	18-003270
Capital Investment / Paid-up Capital :	Rs.40.228 Millions
CIN No.: [Company Identification No.]	L17111TN1946PLC003270
TAN No.: [Tax Deduction & Collection Account No.]	MRIV00353D
PAN No.: [Permanent Account No.]	AAACV3775E
Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.
Line of Business :	Manufacturer of Grey Fabrics.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (48)

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

Maximum Credit Limit :	USD 3800000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track record. Trade relations are reported to be fair. Business is active. Payments are reported to be regular and as per commitment. The company can be considered for normal business dealing at usual trade terms and condition.

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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long Term Loan = BBB
Rating Explanation	Having moderate degree of safety regarding timely servicing of financial obligations it carry moderate credit risk.
Date	27.06.2011

RBI DEFAILTERS’ LIST STATUS

S ubject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAILTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office / Factory :	Sulakarai, Virudhunagar, Ramnad District-426003, Tamilnadu, India
Tel. No.:	91-4562-252019 / 252907
Fax No.:	91-4562-288551
E-Mail :	securities@tmills.com
Website :	www.vtmill.com
Chairman Office :	Thiagarajar Mills Premies, Kappalur, Madurai - 625008, Tamilnadu, India
Tel. No.:	91-452-2482595 (4 Lines) / 4549-280620 / 280592 / 280919
Fax No.:	91-452-2482590/2486085
E-Mail :	office@tmills.com complianceofficer@vtmill.com

DIRECTORS

As on 31.03.2012

Name :	Mr. T Kannan
Designation :	Chairman
Name :	Mr. R M Somasundaram
Designation :	Director
Name :	Mr. L N V Subramanian
Designation :	Director
Name :	Mr. A Mariappan
Designation :	Director

KEY EXECUTIVES

Name :	Mr. S Paramashivan
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2012

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1,113,996,073	14.24
Financial Institutions / Banks	2,891,075	0.04
Insurance Companies	1,553,294,556	19.86
Foreign Institutional Investors	1,387,088,935	17.73
Sub Total	4,057,616,209	51.87
(2) Non-Institutions
Bodies Corporate	446,883,373	5.71
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Millions	695,335,006	8.89
Individual shareholders holding nominal share capital in excess of Rs.0.100 Millions	132,346,557	1.69
Any Others (Specify)	2,466,950,553	31.53
Foreign Corporate Bodies	2,413,224,203	30.85
Foreign Nationals	468,881	0.01
Trusts	4,079,287	0.05
Clearing Members	7,466,451	0.10
Non Resident Indians	41,711,731	0.53
Sub Total	3,741,515,489	47.83
Total Public shareholding (B)	7,799,131,698	99.70
Total (A)+(B)	7,799,131,698	99.70
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group
(2) Public	23,796,082	0.30
Sub Total	23,796,082	0.30
Total (A)+(B)+(C)	7,822,927,780	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Grey Fabrics.

PRODUCTION STATUS (As on 31.03.2012)

Installed Capacity: 240 Nos.

Particulars	Unit	Actual Production
Cloth (On own account)	Mtrs	138.62
Cloth (on others)	Mtrs	10.88

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· State Bank of India

· IDBI Bank Limited.

· Standard Chartered Bank

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2012	As on 31.03.2011
Loans Repayable on Demand
Form Working Capital Loans form a Bank	0.000	52.037
Total	0.000	52.037
Unsecured Loan	As on 31.03.2012	As on 31.03.2011
Other Loans and Advances
Lease Rent Advance	10.070	10.070
Security Deposit	0.116	0.116
Total	10.186	10.186
A) Cash Credit and Other facilities are secured against hypothecation of raw materials goods in process, finish goods, stores, second charges on all fixed assets. B) No loans have been guaranteed by Directors or Others.

Banking Relations :	--
Auditors :
Name :	Peri Thiagraj and Company Chartered Accountants
Address :	Madurai, Tamilnadu, India
Enterprises in which key Management Personnel have significant influence :	· Thiagarajar Mills Private Limited · Colour Yarns Limited · Thiagarajar Telekon Solutions Limited · Tamaraiselvi Finance Private Limited · Sree Devi Karumari Finances Private Limited · Sree Thiagaraja Finance Private Limited · Thirumagal Leasing Private Limited · Thiagarajar Rubbers Private Limited · Karumuttu Farms Private Limited · Kannappan Traders Private Limited · Sivakami Textile Traders Private Limited · SIMA Textile Processing Centre Limited · Sri T. Kannan (HUF) · Thiagarajar Knitters · Guruvayoorappan Investments · Avittam Investments · Thirumagal Investment · Karumuttu Investment

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs.100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4022760	Equity Shares	Rs.10/- each	Rs.40.228 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		40.228	40.228	40.200
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		923.983	880.015	786.700
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		964.211	920.243	826.900
LOAN FUNDS
1] Secured Loans		0.000	52.037	25.000
2] Unsecured Loans		10.186	10.186	10.200
TOTAL BORROWING		10.186	62.223	35.200
DEFERRED TAX LIABILITIES		66.747	84.572	61.800
TOTAL		1041.144	1067.038	923.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		529.701	596.039	475.700
Capital work-in-progress		1.813	1.813	0.000
INVESTMENT		33.696	3.625	3.600
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	150.819	220.570	201.800
	Sundry Debtors	145.168	228.146	116.200
	Cash & Bank Balances	185.905	16.521	145.600
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	55.880	55.456	34.400
Total Current Assets		537.772	520.693	498.000
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	23.927	21.516	33.432
	Other Current Liabilities	5.902	7.073	3.268
	Provisions	32.009	26.543	16.700
Total Current Liabilities		61.838	55.132	53.400
Net Current Assets		475.934	465.561	444.600
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1041.144	1067.038	923.900

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	1166.495	1317.633	788.917
		Other Income	28.215	15.585	10.597
		TOTAL (A)	1194.710	1333.218	799.514
Less	EXPENSES
		Office Expenses	877.501	828.629
		Administrative Expenses	58.203	54.390	678.640
		Advertising Expenses	126.295	122.599
			(28.743)	44.497
		TOTAL (B)	1033.256	1050.115	678.640
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) I		161.454	283.103	120.874
Less	FINANCIAL EXPENSES (D)		1.182	1.059	1.121
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		160.272	282.044	121.995
Less/ Add	DEPRECIATION/ AMORTISATION (F)		84.560	91.226	76.574
	PROFIT BEFORE TAX (E-F) (G)		75.712	190.818	45.421
Less	TAX (H)		13.009	72.155	6.627
	PROFIT AFTER TAX (G-H) (I)		62.703	118.663	38.794
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		23.756	11.383	5.600
Less	APPROPRIATIONS
		Transfer to General Reserve	49.000	81.000	18.000
		Dividend	0.000	12.666	0.000
		Tax on Dividend	18.700	12.624	15.011
	BALANCE CARRIED TO THE B/S		18.759	23.756	11.383
	EARNINGS IN FOREIGN CURRENCY		154.300	1887.721	183.173
	IMPORTS
		Stores & Spares	10.505	6.175	4.555
		Capital Goods	1.437	77.432	0.000
		Packing Materials	0.968	1.570	0.000
	TOTAL IMPORTS		12.910	85.177	4.555
	Earnings Per Share (Rs.)		15.59	29.50	9.13

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	5.25	8.90	4.85
Net Profit Margin (PBT/Sales)	(%)	6.49	14.48	5.76
Return on Total Assets (PBT/Total Assets}	(%)	7.09	17.09	4.67
Return on Investment (ROI) (PBT/Networth)		0.08	0.21	0.05
Debt Equity Ratio (Total Liability/Networth)		0.07	0.13	0.11
Current Ratio (Current Asset/Current Liability)		8.70	9.44	9.33

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	(Yes)
2]	Locality of the firm	(Yes)
3]	Constitutions of the firm	(Yes)
4]	Premises details	(No)
5]	Type of Business	(Yes)
6]	Line of Business	(Yes)
7]	Promoter’s background	(No)
8]	No. of employees	(No)
9]	Name of person contacted	(No)
10]	Designation of contact person	(No)
11]	Turnover of firm for last three years	(Yes)
12]	Profitability for last three years	(Yes)
13]	Reasons for variation <> 20%	----------------------
14]	Estimation for coming financial year	(No)
15]	Capital in the business	(Yes)
16]	Details of sister concerns	(Yes)
17]	Major suppliers	(No)
18]	Major customers	(No)
19]	Payments terms	(No)
20]	Export / Import details (if applicable)	(No)
21]	Market information	----------------------
22]	Litigations that the firm / promoter involved in	----------------------
23]	Banking Details	(Yes)
24]	Banking facility details	(Yes)
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	----------------------
27]	Financials, if provided	(Yes)
28]	Incorporation details, if applicable	(Yes)
29]	Last accounts filed at ROC	(Yes)
30]	Major Shareholders, if available	(No)
31]	PAN of Proprietor/Partner/Director, if available	(No)
32]	Passport No of Proprietor/Partner/Director, if available	(No)
33]	Voter ID No of Proprietor/Partner/Director, if available	(No)

PERFORMANCE OF THE YEAR AND FUTURE PROSPECTS

The year was quite challenging for the textile industry. After having reached record highs in early 2011, cotton prices registered a steep fall of about 40% during the first quarter of the year. This in turn set off a chain reaction in the textile markets arid pried of fabrics declined by about 30% These were the result of inconsistent pnlicies followed by the Government with regard to raw cotton exports and they did not allow free market forces lo have their play and kepi on tinkering with policies id as to influence pricing. Hopefully this syndrome is behind then and a sense of balance has returned to the markets.

The year witnessed erratic power supply position and as they write this report, the power cut in Tamil Nadu is as high as 70%. The Company had to generate its own power and / or procure from form 3^rd parties at prices 3 times over and above the TANGEDCO prices. These factors had impacted the sales as well as margins adversely.

The Directors have Initiated number of measure* lo mitigate rising cost of power and they hope that the power supply situation will get better in the coming year. The textile marker K showing positive signs and the Directors look, forward to better results in the ensuing year.

FUTURE PLANS:

The Company has turned totally debt free and has cash reserves to the tune of Rs.200.000 Millions and the Directors are considering Investment Avenue so as to maximize returns.

MANAGEMENT DISCUSSION AND ANALYSIS
 
FINANCIAL PERFORMANCE:
 
There has been marginal decrease in Sales Turnover from Rs.13.176 Millions to Rs. 11.665 Millions. The Gross Profit has gone up by 43%, as set out in the Directors’ Report.
 
INDUSTRY STRUCTURE AND DEVELOPMENTS:
Their Company has presence in the domestic and international markets. Its reputation and goodwill are ever on the increase. The opportunities being thrown up by the expanding Indian economy will be fully availed of by the 
Company though there is always the element of competition from others similarly placed. The business and exports are on the decline. The reflection of the opportunities that are groeing domestically and shrinking externally.
 
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Internal Control Systems which are already in place with regard to purchase of raw materials, stores, plant and machinery, other items and for the sale of finished products are ever being strengthened. There is a good system of Internal Audit which is reviewed by the Audit Committee periodically and suggestions given by the Committee are being implemented. 

CONTINGENT LIABILITIES

Rs. In Millions

Particular	31.03.2012	31.03.2011
Letter of Credit	55.740	11.283
Tax Demands under Disputes	0.161	7.660

The management believes, based on internal assessment and / or legal advice that the probability of an ultimate adverse decision and outflow of resources of the company is not probable and accordingly no provision for the same is considered necessary.

FIXED ASSETS

· Land

· Building

· Plant and Machinery

· Furniture and Fixtures

· Vehicles

AS PER WEBSITE DETAILS:

PROFILE:

They bring six decades of expertise to the fabric manufacturing business. Their expertise has been honed by their investments in the three pillars that form the edifice of their business: people, infrastructure and technology. This consistent investment has in turn allowed then to reap the benefits of being in tune with the evolving demands of the textile industry.

Their manufacturing unit is located at Virudhunagar, South India, a well- connected destination through rail and road. Virudhunagar is also centrally located to the cream of yarn manufacturers and thus gives them the benefit of a relentless supply of raw material for their process.

HISTORY:

Their legacy goes back to the year 1946 – an age when the textile industry in India was predominantly dormant. One of the founding principles of their company back then was to set standards in weaving. This vision was achieved by ensuring that the best of weaving technology was always available to them.

Their ability to foresee the growth of the Indian textile industry helped then expand their forte to allied businesses such as spinning.

Today, they are a well-established group with unique capabilities that allow then to cater to exotic constructions in weaving. They have also expanded their capabilities to include special weaves and combinations.

They are a part of the Thiagarajar group, one that is renowned for its ingrained presence in the textile industry. The group also has a distinct identity in different fields.

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 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.55.78
UK Pound	1	Rs.86.75
Euro	1	Rs.68.32

INFORMATION DETAILS

Report Prepared by :

NTH

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		48

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.