MIRA INFORM REPORT

Report Date :

15.03.2012

IDENTIFICATION DETAILS

Name :	VF BRANDS INDIA PRIVATE LIMITED
Formerly Known As :	VF ARVIND BRANDS PRIVATE LIMITED
Registered Office :	The Arvind Mill Premises, Naroda Road, Ahmedabad-380 025, Gujarat
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	05.04.2006
Com. Reg. No.:	04-48076
Capital Investment / Paid-up Capital :	Rs.136.667 Millions
CIN No.: [Company Identification No.]	U17110GJ2006PTC048076
PAN No.: [Permanent Account No.]	AACCV2727L
Legal Form :	Private Limited Liability Company
Line of Business :	Trader of Readymade Garments for Branded Cloths.
No. of Employees :	200 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (29)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears huge accumulated losses recorded by the company. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some cautions.

NOTES :

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

INFORMATION PARTED BY

Name :	Mr. V Shah
Designation :	Finance manager
Contact No.:	91-79-30138311
Date :	12.03.2012

Name :	Mr. Santhil R. Kumar
Designation :	Sr. Finance Manager
Contact No.:	91-9845872969
Date :	12.03.2012

LOCATIONS

Registered Office :	The Arvind Mill Premises, Naroda Road, Ahmedabad-380 025, Gujarat, India
Tel. No.:	91- 79-22203030
Mobile No.:	91-9845872969 (Mr. Santhil R. Kumar)
Fax No.:	91-79-22201270 / 22200267
E-Mail :	Santhil_r@vfc.com lipi_jha@vfc.com
Location :	Owned
Corporate Office :	Laurel Block B, 8^th Floor, Bagmane Tech Park, CV Raman Nagar, Bangalore- 560 093, Karnataka, India
Tel. No.:	91-80-30790100 / 200 / 201
Fax No.:	91-80-30790111
Area :	1 Lac Sq. ft.
Location :	Rented

DIRECTORS

As on 30.09.2011

Name :	Mr. Kanchan Kumar Pant
Designation :	Directors
Address :	P -1, Golden Enclave, Airport road, Bangalore-560 017, Karnataka, India
Date of Birth/Age :	01.09.1964
Date of Appointment :	17.12.2007
DIN No.:	00219582
Name :	Mr. Aidan O Meara
Designation :	Directors
Address :	Beukenlan 39, B3080, Tervuren, Belgium
Date of Birth/Age :	28.12.1962
Date of Appointment :	04.10.2007
DIN No.:	00675215
Name :	Mr. Candace S. Cummings
Designation :	Directors
Address :	5401, Eastern Shores Drives, Greens Boro- 27455, United States of America
Date of Birth/Age :	11.04.1947
Date of Appointment :	04.10.2007
DIN No.:	00768140
Name :	Mr. Karuppan Veerappan
Designation :	Directors
Address :	Flat No. 504, Mayur Garden No.15 , 2^nd Cross Venugopal Swamy Ext Koramangala, Bangalore-560 047, Karnataka, India
Date of Birth/Age :	27.05.1967
Date of Appointment :	12.07.2006
DIN No.:	00496966
Name :	Mr. Jagdish Dalal
Designation :	Directors
Address :	5 B, Malay Society Opposite Hunel Sumel Flats, Near Manik Bagh Hall, Ambawadi, Ahmedabad- 380 015, Gujarat, India
Date of Birth/Age :	04.06.1961
Date of Appointment :	05.04.2006
DIN No.:	00009785

KEY EXECUTIVES

Name :	Mr. V Shah
Designation :	Finance manager
Name :	Mr. Santhil R.
Designation :	Sr. Finance Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Names of Shareholders	No. of Shares
VF Mauritius Limited, Mauritius	8200000
Arvind Limited, India	5466680
Total	13666680

As on 05.03.2012

Names of Allottee	No. of Allotted
VF Mauritius Limited, Mauritius	5869011
Total	5869011

As on 30.09.2011

Equity Share Break up (Percentage of Total Equity)

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	60.00
Bodies corporate	40.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Trader of Readymade Garments for Branded Cloths.

Products :

Product Description	ITC Code
Readymade Garment	620000

Agencies Held :

• Lee Cooper
• Wrangler

Exports :

Products :

Readymade Garments

Terms :

Selling :

Cash / Credit

Purchasing :

Cash / Credit

PRODUCTION STATUS (As On 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Ready Made Garments –Tops	Numbers	NA	NA	13,299
Ready Made Garments -Bottoms	Numbers	NA	NA	674,232

Note:

i) The Company is exempt from the licensing provisions of the Industries (Development Regulation) Act, 1951.

ii) As the company’s production activity is carried out by the job workers, installed capacity is not applicable. Company has discontinued the manufacturing operation since November 2010.

iii) Production quantity 687,531 (2010: 1,808,421) numbers produced through job workers.

GENERAL INFORMATION

Customers :

Wholesalers, Retailers and End Users

No. of Employees :

200 (Approximately)

Bankers :

HSBC Bank, MG Road, Bangalore, Karnataka, India

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2011	As on 31.03.2010
Rupee term loans others secured	0.000	4.986
Total	0.000	4.986
(i)Represents principal portion of minimum lease payments payable for assets acquired on finance lease (ii) Secured by hypothecation of assets taken on finance lease
Unsecured Loan	As on 31.03.2011	As on 31.03.2010
Rupee term loans banks unsecured	997.000	920.000
Interest accrued due other debt unsecured	4.938	3.216
Total	1001.938	923.216
Covered by a corporate guarantee by VF Corporation, USA (the ultimate holding company) in favour of the bank

Banking Relations :	--
Auditors :
Name :	Price Waterhouse Chartered Accountant
Address :	The Millenia, 5th Floor, Dower D, 192 Murphy Road, Ulsoor, Bangalore – 560008, Karnataka, India
PAN.:	AAEFP5579P
Ultimate Holding Company:	VF Corporation, USA
Parties to the Joint venture (JV) Agreement :	VF Mauritius Limited, Mauritius Arvind Limited, India ( CIN No.: L17119GJ1931PLC000093)
Fellow Subsidiaries:	The H.D.Lee Company, Inc., United State Wrangler Apparel Corporate, United State Nautica Apparel, Inc., United State Jansport Inc., United State VF Asia Limited, Hong Kong VF International SAGL VF Services, United States Arvind Products Limited, India Arvind Polycot Limited , India VF Europe BVBA, Belgium

CAPITAL STRUCTURE

As on 30.09.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
25000000	Equity Shares	Rs.10/- each	Rs.250.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
13666680	Equity Shares	Rs.10/- each	Rs.136.667 Millions

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
14000000	Equity Shares	Rs.10/- each	Rs.140.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
13666680	Equity Shares	Rs.10/- each	Rs.136.667 Millions

Note:

Of the above 8200000 (2010: 8200000) Equity shares are held by VF Mauritius Limited and 5466680 (2010: 5466680) Equity shares are held by Arvind Limited

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		136.667	136.667	136.667
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1449.860	1449.860	1449.860
4] (Accumulated Losses)		(1637.374)	(1745.018)	(1659.972)
NETWORTH		(50.847)	(158.491)	(73.445)
LOAN FUNDS
1] Secured Loans		0.000	4.986	38.688
2] Unsecured Loans		1001.938	923.216	1184.251
TOTAL BORROWING		1001.938	928.202	1222.939
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		951.091	769.711	1149.494
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		776.945	984.751	1196.397
Capital work-in-progress		1.526	2.147	9.742
INVESTMENT		0.035	0.035	0.035
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	498.100	371.389	341.708
	Sundry Debtors	630.684	483.769	374.913
	Cash & Bank Balances	14.269	27.116	47.956
	Other Current Assets	0.000	0.000	70.234
	Loans & Advances	96.218	72.215	81.476
Total Current Assets		1239.271	954.489	916.287
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	717.156	1005.274
	Other Current Liabilities	247.525	73.729	873.077
	Provisions	102.005	92.708	99.890
Total Current Liabilities		1066.686	1171.711	972.967
Net Current Assets		172.585	(217.222)	(56.680)
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		951.091	769.711	1149.494

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	2837.897	1866.180	1660.234
		Other Income	222.996	105.899	36.839
		TOTAL (A)	3060.893	1972.079	1697.073
Less	EXPENSES
		Materials Consumed	2650.506	873.935	971.916
		Manufacturing and Other Expenses		796.793	1218.054
		TOTAL (B)	2650.506	1670.728	2189.970
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		410.387	301.351	(492.897)
Less	FINANCIAL EXPENSES (D)		84.029	149.539	154.476
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		326.358	151.812	(647.373)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		218.714	236.858	226.771
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		107.644	(85.046)	(874.144)
Less	TAX (I)		0.000	0.000	3.434
	PROFIT / (LOSS) AFTER TAX (G-I) (J)		107.644	(85.046)	(877.578)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(1745.018)	(1659.972)	(782.394)
	BALANCE CARRIED TO THE B/S		(1637.374)	(1745.018)	(1659.972)
	TOTAL EARNINGS		4.348	3.071	8.046
	IMPORTS
		Raw Materials	NA	18.463	15.984
		Trading Goods	NA	5.855	101.637
	TOTAL IMPORTS		NA	24.318	117.621
	Earnings Per Share (Rs.)		7.88	(6.22)	(64.21)`

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	3.52	(4.31)	(51.71)
Net Profit Margin (PBT/Sales)	(%)	3.79	(4.56)	(52.65)
Return on Total Assets (PBT/Total Assets}	(%)	5.34	(4.39)	(41.38)
Return on Investment (ROI) (PBT/Networth)		(2.12)	0.54	11.90
Debt Equity Ratio (Total Liability/Networth)		(40.68)	(13.25)	(29.13)
Current Ratio (Current Asset/Current Liability)		1.16	0.81	0.94

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF CURRENT LIABILITIES

Rs. In Millions

Particular	31.03.2011	31.03.2010	31.03.2009
Creditors due small micro enterprises	6.013	0.230	NA
Creditors due others	711.143	1005.044	NA
Total	717.156	1005.274	NA

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	Yes
5) Type of Business	Yes
6) Line of Business•	Yes
7) Promoter’s background	--
8) No. of employees	Yes
9) Name of person contacted	Yes
10) Designation of contact person	Yes
11) Turnover of firm for last two years	Yes
12) Profitability for last three years	No
13) Reasons for variation <> 20%	No
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	Yes
20) Export / Import details (if applicable)	Yes
21) Market information	--
22) Litigations that the firm / promoter	--
23) Banking Details	Yes
24) Banking facility details	No
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	No
28) Incorporation details, if applicable	--
29) Last accounts filed at ROC	--
30) Major Shareholders, if available	--

OPERATIONS

The Company has completed an impressive year of performance showing continued grow thin earning in the financial year.

Net Sales during the financial year was Rs.2 837.897 Millions (FY 2009-2010: Rs.1866.180 Millions) an increase of 52.06% over the precious year.

The Company launched the brand Vans in India by opening two exclusive stores through Franchi see model during the financial year

The operating profit before interest and depreciation stands at Rs.410.387 Millions as against the previous year figure of operating profit before interest and depreciation of Rs.301.351 Millions

The entire portfolio of other brands namely Lee, Wrangler showed growth both interims of volume as well as value. The Company is planning to make significant investment in Exclusive Brand Out lets in view of rapid growth in the branded garment business.

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.49.90
UK Pound	1	Rs.78.15
Euro	1	Rs.65.09

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	5
--CREDIT LINES	1~10	2
--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	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		29

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.