MIRA INFORM REPORT

Report Date :

30.03.2012

IDENTIFICATION DETAILS

Name :	DONEAR INDUSTRIES LIMITED
Registered Office :	210, Key-Tuo Industrial Estate, Kondivita Lane, Near MIDC, Andheri (E), Mumbai-400059, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	01.01.1987
Com. Reg. No.:	042076
Capital Investment / Paid-up Capital :	Rs.104.000 Millions
CIN No.: [Company Identification No.]	U99999MH1987PLC042076
TAN No.: [Tax Deduction & Collection Account No.]	MUMM07028A
PAN No.: [Permanent Account No.]	AAACD1688C
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of plain and pattern woven, yarn and piece dyed suiting, trouser and shirting fabrics, from cotton, wool, viscose, polyester and blends.
No. of Employees :	Not Available

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

Maximum Credit Limit :	USD 2531116
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Profitability of the company appears to be low. However, trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. 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.

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

LOCATIONS

Registered Office :	210, Key-Tuo Industrial Estate, Kondivita Lane, Near MIDC, Andheri (E), Mumbai-400059, Maharashtra, India
Tel No.:	91-22-30813591
Fax No.:	91-22-28370041
E-Mail :	vinay.sawant@donear.com info@donear.com
Factory 1 :	Balaji Industries, Dokmandi, Village Amli, Silvassa, Dadra and Nagar Haveli
Factory 2 :	Laxmi Lab, Government Industrial Estate, Masat, Silvassa, Dadra and Nagar Haveli
Factory 3 :	Balaji Textiles, Dokmandi, Village Amli, Silvassa, Dadra and Nagar Haveli
Factory 4 :	Umbergaon Unit, GIDC, Umbergaon, District Valsad, Gujarat, India
Factory 5 :	Balaji Fabrics, Revenue Block No. 194 and 195, Kadodara Bardoli Road, Village Jolwa, Taluka Palsana, District Surat, Gujarat, India

DIRECTORS

As on 31.03.2011

Name :	Mr. Vishwanath L. Agarwal
Designation :	Chairman
Name :	Mr. Rajendra V. Agarwal
Designation :	Managing Director
Name :	Mr. Ajay V. Agarwal
Designation :	Wholetime Director
Name :	Mr. Ramesh D. Tainwala
Designation :	Director
Name :	Mr. Durga Prasad C. Agarwal
Designation :	Director
Name :	Mr. Santhkumar B. Agarwal
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Sreedhar H.
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.12.2011

Names of Shareholders		No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	30709942	59.06
Bodies Corporate	8,254,000	15.87
Sub Total	38963942	74.93
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	38963942	74.93
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	234,409	0.45
Foreign Institutional Investors	8,274,551	15.91
Sub Total	8,508,960	16.36
(2) Non-Institutions
Bodies Corporate	453929	0.87
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	2732398	5.25
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	1235520	2.38
Any Others (Specify)	105251	0.20
Clearing Members	80859	0.16
Non Resident Indians	24392	0.05
Sub Total	4527098	8.71
Total Public shareholding (B)	13036058	25.07
Total (A)+(B)	52,000,000	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of plain and pattern woven, yarn and piece dyed suiting, trouser
and shirting fabrics, from cotton, wool, viscose, polyester and blends.

Products :

Product Description	Item Code
Man Made Fabrics	5514-22

PRODUCTION STATUS as on 31.03.2011

Particulars	Unit	Installed Capacity	Actual Production
Fabrics	Mtrs.	246 Looms	17,527,963
	(Mtrs.)	(246 Looms)	(15,141,799)
Yarn Dyeing Twisting & Sizing	Kgs.	2,000,000	1,601,054
	(Kgs.)	(2,000,000)	(1,609,473)
Fabric Processing	Mtrs.	36,000,000	28,428,989
	(Mtrs.)	(24,000,000)	(21,847,415)
Fabric Packing Job	Mtrs.	N.A	51,043
	(Mtrs.)	(N.A)	(57,588)

GENERAL INFORMATION

Bankers :

• State Bank of Hyderabad, Nariman Point Branch, Mittal Tower, Nariman Point, Mumbai-400021, Maharashtra, India

• Dena Bank, Industrial Finance Branch, Dena Bank Building 2, 1^st Floor, 17, Horniman Circle, Fort, Mumbai-400023, Maharashtra, India

• State Bank of India, Commercial Branch, N.G.N. Vaidya Marg, Bank Street, 17 Horniman Circle, Fort, Mumbai-400023, Maharashtra, India

Facilities :

Secured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Term Loan from Banks
Indian Rupee	947.443	1063.077
Interest accrued and due on above	1.728	5.719
Working capital loan from banks
Cash credit	298.442	316.944
Working capital demand loans	725.622	462.057
Export packing credit loan	58.760	50.000
Interest accrued and due on above	2.157	1.223
Total	2034.152	1899.020
Unsecured Loan
From directors	288.965	206.405
From body corporate	41.573	41.192
Total	330.538	247.597

Banking Relations :	--
Auditors :
Name :	M.L. Bhuwania and Company Chartered Accountant
Address :	F-11, 3rd floor, Manek Mahal, 90, Veer Nariman Road, Churchgate, Mumbai - 400 020, Maharashtra, India

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
100,000,000	Equity Shares	Rs.2/- each	Rs.200.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
52,000,000	Equity Shares	Rs.2/- each	Rs.104.000 Millions

Note:

Of the above shares 45,500,000 of Rs.2/- each have been allotted as fully paid up bonus shares by capitalisation of General Reserves in previous years.

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		104.000	104.000	104.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		528.779	523.501	735.760
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		632.779	627.501	839.760
LOAN FUNDS
1] Secured Loans		2034.152	1899.020	1836.453
2] Unsecured Loans		330.538	247.597	36.983
TOTAL BORROWING		2364.690	2146.617	1873.436
DEFERRED TAX LIABILITIES		0.000	0.000	30.002
TOTAL		2997.469	2774.118	2743.198
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1206.662	1436.122	1494.952
Capital work-in-progress		206.661	115.092	275.266
INVESTMENT		8.990	8.990	4.010
DEFERREX TAX ASSETS		61.623	27.077	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1090.989	769.496	584.206
	Sundry Debtors	740.736	664.836	530.784
	Cash & Bank Balances	39.553	33.724	30.779
	Other Current Assets	124.387	111.305	135.284
	Loans & Advances	220.529	196.608	230.018
Total Current Assets		2216.194	1775.969	1511.071
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	263.729	165.740	224.871
	Other Current Liabilities	359.679	347.397	212.613
	Provisions	79.253	75.995	104.617
Total Current Liabilities		702.661	589.132	542.101
Net Current Assets		1513.533	1186.837	968.970
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2997.469	2774.118	2743.198

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	3102.881	2428.367	1863.043
		Other Income	28.330	25.967	6.711
		TOTAL (A)	3131.211	2454.334	1869.754
Less	EXPENSES
		Cost of material	1416.718	1181.513	1027.279
		Operating and other expenses	1257.582	1029.079	756.911
		TOTAL (B)	2674.300	2210.592	1784.190
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		456.911	243.742	85.564
Less	FINANCIAL EXPENSES (D)		143.911	123.144	83.053
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		313.000	120.598	2.511
Less/ Add	DEPRECIATION/ AMORTISATION (F)		311.894	359.485	200.134
	PROFIT BEFORE TAX (E-F) (G)		1.106	(238.887)	(197.623)
Less	TAX (H)		(34.390)	(56.946)	27.382
	PROFIT AFTER TAX (G-H) (I)		35.496	(181.941)	(225.005)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		173.890	386.150	641.574
Less	APPROPRIATIONS
		Proposed Final Dividend	26.000	26.000	26.000
		Tax on Dividend	4.218	4.318	4.419
		Transferred to General Reserve	3.550	0.000	0.000
	BALANCE CARRIED TO THE B/S		175.618	173.891	386.150
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	210.990	174.128	156.172
	IMPORTS
		Raw Materials	2.426	14.749	43.153
		Stores & Spares	26.568	18.738	16.332
		Capital Goods	33.672	45.479	28.068
	TOTAL IMPORTS		62.666	78.966	87.553
	Earnings Per Share (Rs.)		0.68	(3.50)	(4.33)

QUARTERLY RESULTS (UNAUDITED)

PARTICULARS	30.06.2011 (Rs. In Millions)	30.09.2011 (Rs. In Millions)	31.12.2011 (Rs. In Millions)
	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	801.350	1092.210	879.170
Total Expenditure	696.400	984.030	770.950
PBIDT (Excl OI)	104.950	108.180	108.220
Other Income	1.020	11.440	4.480
Operating Profit	105.970	119.620	112.700
Interest	42.610	56.020	49.590
Exceptional Items	0.000	0.000	0.000
PBDT	63.360	63.600	63.110
Depreciation	61.620	62.590	62.840
Profit Before Tax	1.740	1.010	0.270
Tax	(6.110)	(5.190)	(5.890)
Provisions and Contingencies	0.000	0.000	0.000
Profit After Tax	7.850	6.200	6.160
Extraordinary Items	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000
Other Adjustment	0.000	0.000	0.000
Net Profit	7.850	6.200	6.160

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	0.01	(7.41)	(12.03)
Net Profit Margin (PBT/Sales)	(%)	0.03	(9.84)	(10.61)
Return on Total Assets (PBT/Total Assets}	(%)	0.03	(7.44)	(6.57)
Return on Investment (ROI) (PBT/Networth)		0.00	(0.38)	(0.23)
Debt Equity Ratio (Total Liability/Networth)		4.84	4.35	2.88
Current Ratio (Current Asset/Current Liability)		3.15	3.01	2.79

LOCAL AGENCY FURTHER INFORMATION

MANAGEMENT DISCUSSION AND ANALYSIS:

Industrial Structure and developments:

The Indian Textile industry occupies a significant position in the global textile market. Currently, India is the 2nd largest hub for textiles outsourcing, next to China. The government of India, in continuation to support the textile industry, has reinstated TUF policy with effect from 28th Apr.,2011. The government has allowed an overall subsidy of Rs.19720.000 millions in the current TUF scheme which is expected to leverage an investment of Rs. 469000.000 millions. The Indian textile industry contributes about 14 percent to Industrial Production, 4 percent to GDP and 17 percent to the export earnings. It is also one of the highest employment provider segment employing 35 million people after the agricultural segment in the Country.

Therefore the growth and development of this industry has a significant bearing on the overall development of the Indian economy. Also the Vision Statement for the textile industry for the 11th Five Year Plan (2007-2012) sees India securing a 7 percent share in the global textiles trade by 2012.

The overall performance of the company was satisfactory. There has been good growth in the topline of the company in the current year and also recorded a positive result.

Opportunities and Threat

India is becoming more and more important destination as a global sourcing hub. India is a more preferred destination for the quality conscious international buyers. Consolidation in the retail industry and presence of very large retailers has facilitated global sourcing with India becoming a major beneficiary of the same. It has been observed that the low cost of production in India provides a competitive edge to the Indian industry then its peers in the international market.

The more preference of the customers towards garments is a good opportunity for your company with the Surat facilities producing fabric consumed for the readymade garment sector. Surat facility has been set up targeting the RMG segment. They have set up good sampling facilities which is a must to cater to the RMG segment. The facility has a unique proposition of producing fabric in small quantities which gives them an upper edge over their competitors. The innovations by the design and development team are very well accepted in the RMG segment. The presence of complete chain of manufacturing cycle starting from yarn dyeing to supply of finish fabric with LA finish gives them an advantage to supply quality fabric in shorter production cycles.

The company faces threat from the unorganised segment which is abundantly present in India.

Segment Wise or Product Wise Performance

The Company has one reportable segment i.e. Textiles (Manufacture of Man made Fabrics).

Outlook

There are clear signs of recovery of the Indian textile industry which is very encouraging and the company is very bullish as regard to its performance in the future. Also India offers an attractive combination of a large domestic market, and a base for low cost production. The Company has gained a strong position in cotton based products, especially in the readymade garments, which is expected to be the key driver of growth for the industry.

Discussion on Financial Performance with respect to Operational Performance.

The company reported a turnover of Rs. 3131.211 Millions during the year 2010-11 against a turnover of Rs. 2454.103 Millions in the previous year recording a growth of 28% over the previous year. The company has recorded a net profit of Rs. 35.496 Millions in the current year. The operations at Surat facility has stabilised and the retail business has done well in the year 2010-11. They are currently operating around 225 stores in our retail chain which is doing well.

FIXED ASSETS:

• Freehold Land
• Factory Land and Building
• Office Premises
• Residential Building
• Plant and Machinery
• Electrical Installation
• Furniture and Fixtures
• Computer
• Vehicle
• Air Conditioner
• Office Equipments

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.51.14
UK Pound	1	Rs.81.41
Euro	1	Rs.68.22

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	4
--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	NO
--LISTED	YES/NO	YES
--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.