MIRA INFORM REPORT

Report Date :

05.11.2012

IDENTIFICATION DETAILS

Name :	PRASUNA VAMSIKRISHNA SPINNING MILLS PRIVATE LIMITED
Registered Office :	NH-5, Ganapavaram (Post), Nadendla (Mandal) Guntur - 522619, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	11.02.2004
Com. Reg. No.:	01-042636
Capital Investment / Paid-up Capital :	Rs. 116.900 Millions
CIN No.: [Company Identification No.]	U18101AP2004PTC042636
TAN No.: [Tax Deduction & Collection Account No.]	HYDP03408G
PAN No.: [Permanent Account No.]	AADCP4505B
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer of Cotton Yarn.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (44)

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

Maximum Credit Limit :	USD 910000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered for 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 – 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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Long term non fund based facilities : (ICRA) BB
Rating Explanation	Have moderate risk of default regarding timely servicing of financial obligation.
Date	June 2012

RBI DEFAULTERS’ LIST STATUS

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

EPF (Employee Provident Fund) DEFAULTERS’ 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 :	NH-5, Ganapavaram (Post), Nadendla (Mandal) Guntur - 522619, Andhra Pradesh, India
Tel. No.:	91-8647-259501/ 259694/ 95
Fax No.:	91-8647-259502
E-Mail :	prasuna_vsm9@yahoo.co.in dsc_director@rediffmail.com pvk_spinning@rediffmail.com

DIRECTORS

AS ON 22.08.2011

Name :

Mr. Haribabu Kalahasti

Designation :

Managing director

Address :

4th Lane, 3/9 Pandaripuram, Near Jayaram Hospital Chilakaluripet, District Guntur - 522616, Andhra Pradesh, India

Date of Birth/Age :

09.08.1954

Date of Appointment :

11.02.2004

DIN No.:

01880153

Name :

Mr. Srinivas Pendyala

Designation :

Joint Managing director

Address :

3/9, 5th Line Pandaripuram, Chilakaluripet, District Guntur - 522616, Andhra Pradesh, India

Date of Birth/Age :

01.04.1969

Date of Appointment :

05.05.2005

DIN No.:

01881020

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U18101AP2004PTC042636	PRASUNA VAMSIKRISHNA SPINNING MILLS PRIVATE LIMITED	Managing director	05/05/2005	05/05/2005	Active	NO
2	U17200TN2012PTC083836	SRI VISHNU WEAVING PRIVATE LIMITED	Director	02/01/2012	02/01/2012	Active	NO

Name :

Mr. Lakshmi Rajyam Kalahasti

Designation :

Director

Address :

3-9, 5th Line Pandari Puram, Chilakaluripet, Guntur - 522616, Andhra Pradesh, India

Date of Birth/Age :

10.12.1961

Date of Appointment :

11.02.2004

DIN No.:

01808367

Name :

Mr. Muralikrishna Rao Penoyala

Designation :

Director

Address :

3/69, 1^st Street, Shanthi Nagar, Sm, Nagar Post, Chennai - 600062, Tamilnadu, India

Date of Birth/Age :

15.07.1944

Date of Appointment :

11.02.2004

DIN No.:

01808390

Name :

Mrs. Rathna Kumari Pendyala

Designation :

Director

Address :

3/69, 1^st Street, Shanthi Nagar, Sm, Nagar Post, Chennai - 600062, Tamilnadu, India

Date of Birth/Age :

20.02.1955

Date of Appointment :

11.02.2004

DIN No.:

02467207

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 22.08.2011

Names of Shareholders	No. of Shares
Haribabu Kalahasti	460700
Lakshmi Rajyam Kalahasti	23800
Muralikrishna Rao Penoyala	115500
Rathna Kumari Pendyala	115500
Srinivas Pendyala	353500
Haribabu Kalahasti (HUF)	100000
Total	1169000

AS ON 22.08.2011

Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Cotton Yarn.

Products :

ITC Code	Product Descriptions
52.05	Cotton Yarn

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	31.03.2011
Licensed Capacity	24000 Spindles
Installed Capacity	24000 Spindles

The Licensed and installed capacities are as per certification given by the Managing Director on which the Auditors are relied.

Particulars	Unit	Actual Production
Cotton Yarn	Qtls	19,323.73
Cotton Waste	Qtls	8,710.65
Cotton Lint	Qtls	6,597.24
Cotton Seed	Qtls	12,309.59

Note: During the year company has obtained the production of cotton lint and cotton seed through job work with outsiders.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

State Bank of India, Commercial Branch, Kannavarithata, Guntur - 522004, Andhra Pradesh, India

Facilities :

Secured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
Rupee term loans banks secured	270.503	293.311
Foreign currency loans banks secured	0.000	46.184
Other debt secured	142.154	47.841
Total	412.657	387.336
Unsecured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
Loans directors unsecured	21.100	13.600
Other debt unsecured	0.000	5.226
Total	21.100	18.826

Banking Relations :	--
Auditors :
Name :	Mastanaiah and Company Chartered Accountants
Address :	11/1, Arundelpet, Guntur - 522002, Andhra Pradesh, India
Tel No.:	91-863-2233761
Email :	auditreport@gmail.com
Income-tax PAN of auditor or auditor's firm :	AADFM5561H
Enterprise which are controlled by Key Management Personnel :	v Sri Buddhasagar Traders, Chilakaluripet v Prasuna Vamsikrishna Cotton Ginning Mills, Chilakaluripet

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
1,200,000	Equity Shares	Rs. 100/- each	Rs. 120.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1,169,000	Equity Shares	Rs. 100/- each	Rs. 116.900 Millions

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		116.900	116.900	116.900
2] Share Application Money		0.000	0.016	0.016
3] Reserves & Surplus		110.762	76.869	61.079
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		227.662	193.785	177.995
LOAN FUNDS
1] Secured Loans		412.657	387.336	434.827
2] Unsecured Loans		21.100	18.826	19.228
TOTAL BORROWING		433.757	406.162	454.055
DEFERRED TAX LIABILITIES		59.068	41.839	32.245
TOTAL		720.487	641.786	664.295
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		425.458	447.888	471.245
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	224.949	129.253	117.114
	Sundry Debtors	14.256	13.301	33.408
	Cash & Bank Balances	5.566	5.431	12.949
	Other Current Assets	0.745	0.543	0.392
	Loans & Advances	90.825	58.371	59.645
Total Current Assets		336.341	206.899	223.508
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	9.982	0.773	20.909
	Other Current Liabilities	18.980	7.918	7.701
	Provisions	12.350	4.310	1.848
Total Current Liabilities		41.312	13.001	30.458
Net Current Assets		295.029	193.898	193.050
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		720.487	641.786	664.295

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	471.227	406.106	286.354
		Other Income	2.306	1.827	1.478
		TOTAL (A)	473.533	407.933	287.832
Less	EXPENSES
		Consumption of raw material		176.452	154.424
		Purchase of finished goods		0.000	0.096
		Payments and benefits to employees		10.709	8.741
		Manufacturing, Selling and Administrative expenses		78.748	65.757
		Taxes and licenses		0.166	0.247
		Increase/ (Decrease) in stock		53.703	(23.497)
		TOTAL (B)	355.216	319.778	205.768
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		118.317	88.155	82.064
Less	FINANCIAL EXPENSES (D)		30.676	36.909	40.612
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		87.641	51.246	41.452
Less/ Add	DEPRECIATION/ AMORTISATION (F)		26.380	26.208	25.279
	PROFIT BEFORE TAX (E-F) (G)		61.261	25.038	16.173
Less	TAX (H)		26.959	9.248	8.443
	PROFIT AFTER TAX (G-H) (I)		34.302	15.790	7.730
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		76.869	61.079	53.349
Less	ADJUSTMENT FOR EMPLOYEES BENEFIT PROVISION		0.409	0.000	0.000
	BALANCE CARRIED TO THE B/S		110.762	76.869	61.079
	EARNINGS IN FOREIGN CURRENCY
		FOB value of Export	45.235	22.530	59.311
	IMPORTS
		Stores & Spares	0.337	1.618	1.361
	Earnings Per Share (Rs.) Basic		13.51	13.51	6.69
	Diluted		13.51	13.51	6.61

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	7.24	3.87	2.69
Net Profit Margin (PBT/Sales)	(%)	13.00	6.17	5.65
Return on Total Assets (PBT/Total Assets}	(%)	8.04	3.82	2.33
Return on Investment (ROI) (PBT/Networth)		0.27	0.13	0.09
Debt Equity Ratio (Total Liability/Networth)		2.09	2.16	2.72
Current Ratio (Current Asset/Current Liability)		8.14	15.91	7.34

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	Yes
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	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

REVIEW OF OPERATIONS:

The Company recorded a net turnover of Rs.471.226 Millions for the year 2010–11 as against Rs.406.106 Millions during the year 2009 - 10.The PBDIT for the year 2010–11 is Rs.118.317 Millions as against Rs.88.154 Millions for the year 2009–10.

FUTURE OUTLOOK:

The operations during the financial year 2010-11 have yielded satisfactory results, in line with the expectations of the Board of Directors. The Company has been able to achieve a turnover, well over the projected figures. Thus it has been able to strengthen its cash reserves this financial year. In order to increase the total revenues during the financial year 2011-12, it is proposed to convert some LR-6 Ring Frames to Compact Ring Frames using Suessen Compact conversion kits to realize higher margins. This conversion would be funded using the Company’s own cash reserves.

CONTINGENT LIABILITIES

i. Fixed deposits with banks includes Rs. 5.065 Millions (Previous year: Rs. 4.831 Millions) against which lien is marked for obtaining Bank guarantees and ILC from banks.

ii. Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for import of capital goods and Advance License for import of Auto Coners at a concessional rate of customs duty against submission of bank guarantee and bonds. In case of non-fulfillment of the terms and conditions as mentioned in the EPCG License and Advance License, the company is contingently liable for an amount of Rs. 0.165 Million (Previous year Rs. 0.165 Million) towards excise duty and Rs. 55.991 Millions (Previous year Rs. 60.671 Millions) towards customs duty.

FIXED ASSETS:

v Freehold Land

v Factory Buildings

v Non Factory Buildings

v Fire and Electrical Equipment

v Plant and Machinery

v Air Conditioner

v Furniture and Fixtures

v Office and Other Equipment

v Vehicles

v Computers and Peripherals

v Well and Water

v Canteen Equipment

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 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. 53.66
UK Pound	1	Rs. 86.37
Euro	1	Rs. 69.24

INFORMATION DETAILS

Report Prepared by :

BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
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	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		44

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.