MIRA INFORM REPORT

Report Date :

12.10.2012

IDENTIFICATION DETAILS

Name :	VTX INDUSTRIES LIMITED (w.e.f. 01.05.2011)
Formerly Known As :	VIJAYESHWARI TEXTILES LIMITED
Registered Office :	2/185, Palladam Road, Puliampatti (Via), Pollachi, Coimbatore - 642002 Tamilnadu
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	05.09.1953
Com. Reg. No.:	18-000248
Capital Investment / Paid-up Capital :	Rs.181.692 Millions
CIN No.: [Company Identification No.]	L17111TZ1953PLC000248
TAN No.: [Tax Deduction & Collection Account No.]	CMBV03050F
PAN No.: [Permanent Account No.]	AAACV6388F
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.
Line of Business :	Manufacturer and Marketer of Cotton and Polyester Texturised Yarns.
No. of Employees :	Around 2000 (Approximately)

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 5500000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a established company having satisfactory track. Company performance seems good. Trade relations are reported to be fair. Business is active. Payments are reported to be usually correct and as per commitment. The company can be considered for business dealing 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

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 1 (Spinning Division) :	2/185, Palladam Road, Puliampatti (Via), Pollachi, Coimbatore - 642002 Tamilnadu, India
Tel. No.:	91-422-2214025/ 2216730
Fax No.:	91-422-2213488
E-Mail :	vijay@webindia.com longstaple@vtx.co.in secretarial@vtx.co.in info@vtx.co.in
Websites:	www.vtx.co.in
Corporate Office/ Factory 2 (Madeups Division) :	10/400 Palghat Main Road, Kuniamuthur, Coimbatore – 641 008, Tamilnadu, India
Tel. No.:	91-422-2252661
Fax No.:	91-422-2251538
Email :	investors@vtx.co.in
Factory 3 (Weaving Division):	Arakulam, Palladam, Tamilnadu, India
Factory 4 (Processing Division):	SIPCOT, Industrial Complex, Perundurai, Tamilnadu, India
Branches :	Link Intime India Private Limited (formerly known as Intime Spectrum Registry Limited) “Surya” 35 May Flower Avenue (Behind Senthil Nagar), Sowripalayam Road, Coimbatore – 641 028, Tamilnadu, India
Email :	coimbatore@linkintime.co.in
Abroad Offices :	· 230, Fifth Avenue, Suite 715, New York-100001, USA Tel. No. :+1-203-6854413 Fax No. :+1-212-6589319 · Units 4c/4d, West Point, 36-37 Warple way, London, W3 0RG, United Kingdom Tel No.: +44-208-7498070 Fax No.: +442087499299 · 2, Henderson Street, Malvern, Victoria-3144, Australia Tel No.: +61-0403-117333

DIRECTORS

(AS ON 31.03.2011)

Name	Mr. A. L. Ramchandra
Designation	Chairman and Managing Director
Name	Mrs. Jayanthi Ramchandra
Designation	Managing Director
Qualification :	Graduate in Science from the Madras University
Experience :	28 years of extensive experience in textile designing and product development.
Name	Capt. K. V. Narayanan
Designation	Director
Date of Birth/ Age :	83 years
Qualification :	Commercial Airline Pilot
Experience :	35 years as Commercial Airline Pilot in Indian Airlines
Date of Appointment :	28.04.2005
Name	Mr. Durai Ramaswamy
Designation	Director
Name	Mr. N. Balakrishnan
Designation	Director
Date of Birth/ Age :	72 years
Qualification :	M.A., B.L., Associate of Federation of Insurance Institute of India
Experience :	Served as Executive Director, Life Insurance Corporation of India from 1991 to 1996. Presently works as Management Consultant.
Date of Appointment :	26.06.1996
Name	Mr. V. Dharmaraj
Designation	Director
Qualification	BA B.L.
Name	Mr. P. Vijay Raghunath
Designation	Director
Name	Mr. K Salvaraj
Designation	Director
Name	Mr. K. Rajgopal
Designation	Executive Chairman and Managing Director (Vacated the office due to demise on 16.01.2011)

KEY EXECUTIVES

Name :	Mr. Jaison Thomas
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 30.06.2012)

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of Total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	820520	4.52
Bodies Corporate	7846674	43.19
Sub Total	8667194	47.70
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	8667194	47.70
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	1501150	8.26
Sub Total	1501150	8.26
(2) Non-Institutions
Bodies Corporate	3787765	20.85
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	2279218	12.54
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	1698990	9.35
Any Others (Specify)	234923	1.29
Non Resident Indians	182633	1.01
Clearing Members	48476	0.27
Hindu Undivided Families	2950	0.02
Market Maker	864	0.00
Sub Total	8000896	44.04
Total Public shareholding (B)	9502046	52.30
Total (A)+(B)	18169240	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	--	0.00
(2) Public	--	0.00
Sub Total	--	0.00
Total (A)+(B)+(C)	18169240	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Marketer of Cotton and Polyester Texturised Yarns.

Products :

Products Description	Item Code No.
Grey Cotton Yarn and Mercerised Cotton Yarn	5203
Mill Made Mill Made – Woven Processed / Grey Cotton and Synthetic – Blended Fabric and Made – ups	52-8-1249

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	31.03.2011
Installed capacity
Ring Spindles	53768
Looms	98
Processing	30,000 mtr/ day
Made ups	5,00,000 Pcs/ Month
Production (Including Outsourcing)
Cotton Yarn	1412324 Kgs
Grey Fabric	3916680 Mtrs
Made-ups	2975787 Mtrs

GENERAL INFORMATION

No. of Employees :

Around 2000 (Approximately)

Bankers :

· Andhra Bank

· Oriental Bank of Commerce

· Indian Overseas Bank

· UCO Bank

· United Bank of India

· Yes Bank

Facilities :

Secured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
Working capital loans from Banks	1061.766	833.949
Term loans from Banks (Repayable within one year Rs.219.758 Millions)	1606.159	1680.509
Demand Loan (Against Fixed Deposits of Rs.14.700 millions)	13.700	107.700
Interest accrued and due	45.745	15.054
Hired Purchase dues	3.132	0.630
Less : Unmatured Finance Charges	0.556	0.046
Total	2729.946	2637.796
NOTES: 1) Working capital loans from banks are secured by hypothecation of Raw Materials, Stock-in-Process and Finished Goods, and book debts and Second charge on the Fixed Assets of the Company on pari-paasu basis. 2) Term Loan From banks and institutions are secured by pari passu first charge on the fixed assets of the Company and pari passu second charge on the current assets of the Company 3) Hire Purchase Dues are secured by hypothecation of vehicles purchased. 4) Demand Loan From Banks are secured by fixed deposits with banks. 5) Term loans from banks for the previous year includes Rs.60.000 Millions of unsecured loan which has become secured loan during the current year.
Unsecured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
Fixed Deposit – From shareholders	0.168	0.168
Fixed Deposits – From Others	0.959	1.036
Less: Unclaimed Matured Deposits	1.127	1.204
Trade deposits	0.101	0.101
Total	0.101	0.101
Note : Fixed Deposits repayable within a year Rs. Nil. Unclaimed matured deposits worth Rs.1.127 millions are not surrendered for repayment.

Banking Relations :	--
Auditors :
Name :	Subbachar and Srinivasan Chartered Accountants
Address :	Coimbatore, Tamilnadu, India
Internal Auditor :
Name :	Mrs. Sasirekha Vengatesh Chartered Accountant
Address :	Coimbatore, Tamilnadu, India
Subsidiaries :	· Vijayeswari USA LLC · Vijayeswari UK Limited
Associates :	· Lakshmi Apparels and Wovens Limited · Seshraj Apparels Private limited · Seshraj Enterprises Private Limited · Coimbatore Lakshmi Investment and Finance Company Limited · KAY Arr Enterprises

CAPITAL STRUCTURE

(AS ON 31.03.2011)

Authorised Capital :

No. of Shares	Type	Value	Amount
20000000	Equity shares	Rs.10/- each	Rs.200.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
18169240	Equity shares	Rs.10/- each	Rs.181.692 millions

NOTES:

1) Of the above shares, 5064620 Equity shares of Rs.10/- each fully paid up bonus shares issued by capitalization of General Reserve.

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		181.692	181.692	181.692
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1181.955	1123.231	1097.598
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1363.647	1304.923	1279.290
LOAN FUNDS
1] Secured Loans		2729.946	2637.796	2171.684
2] Unsecured Loans		0.101	0.101	60.189
TOTAL BORROWING		2730.047	2637.897	2231.873
DEFERRED TAX LIABILITIES		38.230	26.744	17.266
TOTAL		4131.924	3969.564	3528.429
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2151.258	1307.679	916.671
Capital work-in-progress		0.000	610.191	628.511
Preoperative Expenses Pending Capitalization		0.000	113.800	11.086
INVESTMENT		0.121	73.921	205.495
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1185.021	937.956	876.518
	Sundry Debtors	445.992	370.606	440.407
	Cash & Bank Balances	52.825	234.500	43.322
	Other Current Assets	146.014	119.583	124.285
	Loans & Advances	300.218	408.621	488.083
Total Current Assets		2130.070	2071.266	1972.615
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	116.496	209.880	240.407
	Other Current Liabilities	65.571	49.112
	Provisions	29.476	14.284	42.269
Total Current Liabilities		211.543	273.276	282.676
Net Current Assets		1918.527	1797.990	1689.939
MISCELLANEOUS EXPENSES		62.018	65.983	76.727
TOTAL		4131.924	3969.564	3528.429

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	1642.208	1132.691	1182.117
		Other Income	26.406	20.423	43.946
		TOTAL (A)	1668.614	1153.114	1226.063
Less	EXPENSES
		Raw Material Consumed	488.283	309.413	394.954
		Processing and Weaving Charges	182.085	122.012	199.231
		Salaries, Wages and Bonus	180.946	88.134	105.194
		Power and Fuel	149.108	113.645	94.492
		Stores Consumed	144.686	128.929	146.875
		Lease rent on Production Facilities	7.131	20.952	17.866
		Repairs and Maintenance	24.190	27.557	23.482
		Administrative, Selling and other Expenses	178.603	153.084	188.389
		Development Expenditure	35.874	38.193	39.903
		Increase/Decrease in Stock	(107.765)	(50.988)	(24.113)
		Exceptional Item	0.000	(23.885)	17.432
		TOTAL (B)	1283.141	927.046	1203.705
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		385.473	226.068	22.358
Less	FINANCIAL EXPENSES (D)		195.169	125.599	140.872
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		190.304	100.469	(118.514)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		105.794	54.763	68.520
	PROFIT BEFORE TAX (E-F) (G)		84.510	45.706	(187.037)
Less	TAX (H)		13.116	9.478	(65.164)
	PROFIT AFTER TAX (G-H) (I)		71.394	36.228	(121.873)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		0.000	(81.938)	39.935
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	(56.304)	--
		Dividend	10.902	9.085	--
		Tax on Dividend	1.768	1.509	--
	BALANCE CARRIED TO THE B/S		58.724	0.000	(81.938)
	EARNINGS IN FOREIGN CURRENCY
		Cotton Yarn	0.000	2.747	7.688
		Grey Fabrics	42.716	2.121	5.584
		Madeups	1095.785	939.716	989.232
	TOTAL EARNINGS		1138.501	944.584	1002.504
	IMPORTS
		Raw Materials	74.561	32.433	18.917
		Stores & Spares	3.050	5.376	51.389
		Capital Goods	0.000	111.507	209.247
	TOTAL IMPORTS		77.611	149.316	279.553
	Earnings Per Share (Rs.)		3.93	1.99	(6.71)

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011	31.03.2012	30.06.2012
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter	5^th Quarter
Net Sales	412.220	493.220	664.150	350.800	490.240
Total Expenditure	280.320	358.180	521.160	335.500	326.100
PBIDT (Excl OI)	131.900	135.040	142.990	15.300	164.140
Other Income	1.820	3.490	2.820	(14.820)	4.280
Operating Profit	133.720	138.530	145.810	0.480	168.420
Interest	73.340	71.730	94.570	108.370	101.160
Exceptional Items	0.000	0.000	0.000	(223.380)	0.000
PBDT	60.380	66.800	51.240	(331.270)	67.260
Depreciation	29.150	31.250	40.920	82.720	60.530
Profit Before Tax	31.240	35.550	10.320	(413.990)	6.730
Tax	9.780	4.410	1.240	(90.030)	1.290
Provisions and contingencies	0.000	0.000	0.000	0.000	0.000
Profit After Tax	21.460	31.140	9.080	(323.950)	5.450
Extraordinary Items	0.000	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000	0.000
Net Profit	21.460	31.140	9.080	(323.950)	5.450

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.28	3.14	(9.94)
Net Profit Margin (PBT/Sales)	(%)	5.15	4.04	(15.82)
Return on Total Assets (PBT/Total Assets}	(%)	1.97	1.35	(6.47)
Return on Investment (ROI) (PBT/Networth)		0.06	0.04	(0.15)
Debt Equity Ratio (Total Liability/Networth)		2.16	2.23	1.97
Current Ratio (Current Asset/Current Liability)		10.07	7.58	6.98

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	Yes
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]	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	No

REVIEW OF OPERATIONS:

During the financial year, the turnover of the Company has increased to Rs.1644.200 Millions from Rs.1132.600 Millions in the corresponding previous financial year, registering a growth rate of 45%. The Company has posted a net profit of Rs.71.394 Millions for the financial year ended 31st March, 2011 as against Rs.36.228 Millions for the corresponding previous year, registered a growth rate of 97%. During the year, the Indian economy showed a remarkable resilience in the aftermath of global economic slowdown in previous years. The Company could secure good orders from international as well as domestic markets. The production during the year was gradually augmented after successfully completing its project expansion programme and the full utilization of the enhanced production facility shall be achieved in the financial year 2011-12, which would support to attain higher turnover and profitability in the ensuing years. The Company has taken various cost effective methods resulting in better economies of production and purchases throughout the financial year.

The Company has received good response and enquires from the international trade fairs it attended and it explores and enters into new markets in South Africa, Australia, South America and a few other European countries. It is always emphasized to broad base the existing customer relationships in US and UK markets and also to create a network of buying houses, major retail outlets and commission agents. The Company develops the brand building exercise both internationally and domestically.

MILE STONES

The Company has achieved yet another milestone by winning the “Five Star Award” awarded by Macy’s Merchandising Group for 12th year in a row in recognition of its continued outstanding service to Macy’s Merchandising Group. The Company is the only Company to achieve this mammoth feet in the entire Asian region.

FUTURE:

The future of the Company’s performance looks very promising since the project expansion programme of the Company successfully completed during the year and with increased production capacity, the Company is in a position to meet its international as well as domestic orders on time. The growth and future of Indian textile industry depends upon various factors such as availability of raw material, low-priced man power, favorable government policies etc. The revival of major economies like US and European Union also plays a significant role for the future of textiles industry.

The Company progressively enters into hospitality segment comprising hotels and hospitals both in India and aboard. The response and enquires received from hospital and hospitality customers, in various domestic textile fairs participated by Company is positive and gives a boost to increase its foothold in the domestic market.

CHANGE IN COMPANY’S NAME

The Company’ name was changed from Vijayeswari Textiles Limited to VTX Industries Limited with effect from 05.01.2011, after obtaining necessary approval from Registrar of Companies, Coimbatore. The new name reflects Company’s multi-various activities which would cater various business opportunities and growth in future.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

TEXTILE INDUSTRY

The financial year 2010-11 saw the industry revive after facing unprecedented challenges in past years due to global economic slowdown, especially in the major export markets for India. The revival was supported by recovery in domestic demand followed by pick up in export demand since third quarter of financial year 2009-10.

The textile and clothing industry is expected to register 10 percent exports growth in the financial year 2011-12. The domestic apparel industry is expected to achieve a target of US$ 25 billion for financial year 2011-12, up from

US$ 22 billion recorded in the last financial year. The Economic growth of 8-8.5 percent has significantly improved the prospects in the domestic market and the demand in both the US and Western Europe has grown substantially in recent months. The Clothing exports were down until June 2010, but have started growing from July onwards. The Cotton textiles production grew by 10.1 per cent during April-November 2010-11 as compared to 3.6 per cent during corresponding period last year.

The total textiles exports managed to grow by 11.5 percent to US$ 7.57 billion year-on-year during the April-July period of the 2010-11 fiscal, supported by a pick-up in demand in Western markets. During the same period, apparel exports declined by an annualized 6 percent to US$ 5.75 billion but things seem to have been improving since August 2010. Textile industry is one of the major contributors to the total output of the fast growing Indian industrial sector which is at present revolving around 14%. Textile sector’s contribution to GDP of India is also significant which currently amounts to 4%. It is also true that Indian textile industry is one of the major sources of foreign exchange earnings for India and contributes around 16-17% of the total export earnings.

THREATS TO THE INDUSTRY:

The reports show that the Export incentives which were scaled up in competing countries and scaled down in India, added to the challenges in global markets. Indian apparel exports have been declining for the last two consecutive fiscals and the major reasons of which are spiraling cotton prices, increasing cotton yarn prices, rising fabric prices, reduction in duty drawback rate and discontinuation of Focus Market Scheme Benefit to one of the major international markets i.e. the US effective 01st April 2011.

The mandatory excise duty of 10% as proposed by union budget for 2011-12, on branded readymade garments and made-ups, would have impact to this highly labour intensive segment. Readymade garments and made-up textiles are currently under optional excise duty regime. Due to shortage of cotton supply in the world market, the cotton prices are sky rocketing since August 2010 and consequently, the cotton yarn prices have also been increased.

THREATS TO THE COMPANY

The fluctuation in forex market poses a threat to the Company due to its large dependence on US and EU customers and the availability of raw material at a reasonable price is also one of the concerns for the Company. In order to safeguard from forex fluctuation, the Company depends upon the Forward Cover. Sudden spurt in yarn prices, non availability of raw material at reasonable prices and unfavorable government policies affecting the procurement of raw material, are also considered as possible future threats to the Company.

Due to increase in competition globally as well as domestically, there arises need to follow the austere measures in the operational side and the shift of focus would be more on striving for continuous improvement in quality aspects of the products. This would help the Company to strengthen its competitiveness in the global arena particularly against the big players in the market. The Company is slowly shifting its focus to newer international markets.

CONTINGENT LIABILITIES

Particulars	31.03.2011	31.03.2010
Letter of Credit	108.876	82.258
Bank Guarantees	4.835	4.835
Disputed Income tax Demands (Paid out of the above Rs.12.785 Millions	29.452	29.452

FIXED ASSETS:

· Land

· Leasehold Land

· Building

· Plant and Machinery

· Furniture and Fittings

· Office Equipments

· Vehicles

· Canteen Vessels

· Computer Equipments

· Wind Farm

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.52.38
UK Pound	1	Rs.84.00
Euro	1	Rs.67.99

INFORMATION DETAILS

Report Prepared by :

NIT

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.