MIRA INFORM REPORT

Report Date :

15.02.2013

IDENTIFICATION DETAILS

Name :	LMW MACHINERY LIMITED [w.e.f.02.09.2011]
Formerly Known As :	RIETER LMW MACHINERY LIMITED
Registered Office :	Perianaickenpalayam, Coimbatore– 641020, Tamilnadu, India
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	31.05.1993
Com. Reg. No.:	18-004443
Capital Investment / Paid-up Capital :	Rs. 250.000 Millions
CIN No.: [Company Identification No.]	U29199TZ1993PLC004443
TAN No.: [Tax Deduction & Collection Account No.]	CMBR03716G
PAN No.: [Permanent Account No.]	AABCR0309M
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of Ring Frame Assemblies and Related Parts.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

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

Status :	Good
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having a good track record. There appears some dip in the turnover and profits during 2012. However, trade relations are reported as decent. Business is active. Payment terms are usually correct and as per commitments. The company can be considered for business dealings 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

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 / Head Office :	Perianaickenpalayam, Coimbatore– 641020, Tamilnadu, India
Tel. No.:	91-422-2692371/ 79/ 6612255/ 2635100/ 3022255/ 3022216/ 3022569
Fax No.:	91-422-2360215/ 2692541/ 2692702/ 2692542/ 2692543
E-Mail :	sec@lmwml.com rlmcbe@eth.net regd.off@lmw.co.in sales@lmw.co.in sundaram.t@lmw.co.in rajendran.r@lmw.co.in
Website :	www.lmw.co.in www.lakshmimach.com
Unit – II :	Kaniyur, Coimbatore – 641658, Tamilnadu, India
Tel. No.:	91-421-3983000
Fax No.:	91-421-2333270
E-Mail :	unit2@lmw.co.in
Machine Tool Division and Foundry Division :	Arasur – 641407, Tamilnadu, India
Tel. No.:	91-422-3021300/ 3022537/ 3022553/ 3022511
Fax No.:	91-422-2360029/ 3022577
E-Mail :	mtd_marketing@lmw.co.in mtd@lmw.co.in
Corporate Office :	34A, Kamaraj Road, Coimbatore – 641018, Tamilnadu, India
Tel. No.:	91-422-3028100
Fax No.:	91-422-2220912
Overseas Offices :	Representative Offices Ø Bangladesh Ø Thailand Ø Indonesia Ø Vietnam Ø Kenya Agent Offices Ø Bangladesh Ø Thailand Ø Turkey Ø Iran Ø Pakistan

DIRECTORS

AS ON 30.07.2012

Name :

Mr. Rangappa Naidu Rajendran

Designation :

Nominee director

Address :

Angalamman Kovil, Thottam, Palayaputhur, S.R.K.V Post, Coimbatore – 641020, Tamilnadu, India

Date of Birth/Age :

21.03.1945

Qualification :

B.Com, ACA

Date of Appointment :

30.07.2012

DIN No.:

00005505

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	L29269TZ1962PLC000463	LAKSHMI MACHINE WORKS LIMITED	Whole-time director	10/08/2011	02/02/2011	Active	NO
2	U29199TZ1993PLC004443	LMW MACHINERY LIMITED	Nominee director	30/07/2012	16/08/2011	Active	NO

Name :

Mr. Kalyanasundara Venkat Raman

Designation :

Nominee director

Address :

79-A, Temple Street, Krishna Colony, Singanallur Post, Coimbatore – 641005, Tamilnadu, India

Date of Birth/Age :

09.07.1945

Date of Appointment :

30.07.2012

Qualification :

BSc., LL.B.,ACS

DIN No.:

00004297

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	U45201TN1990PLC019812	SHRI RAMALINGA BUILDERS LIMITED	Director	25/09/2006	10/02/2006	Active	NO
2	U29199TZ1993PLC004443	LMW MACHINERY LIMITED	Nominee director	30/07/2012	17/08/2011	Active	NO

Name :

Mr. Shiekh Khadershah Najmulhussain

Designation :

Nominee director

Address :

No. 31, D Jayavarthanavelu Nagar, Peelamedu, Coimbatore – 641004, Tamilnadu, India

Date of Birth/Age :

20.01.1943

Date of Appointment :

30.07.2012

Qualification :

BE., MBA

DIN No.:

02723029

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	U29199TZ2009PLC015340	QUATTRO ENGINEERING INDIA LIMITED	Director	06/09/2010	31/07/2009	Active	NO
2	U80302TZ2009PLC015650	HERMES ACADEMY OF TRAINING LIMITED	Director	02/12/2009	02/12/2009	Active	NO
3	U29199TZ1993PLC004443	LMW MACHINERY LIMITED	Nominee director	30/07/2012	17/08/2011	Active	NO

KEY EXECUTIVES

Name :	Mr. R Ravi
Designation :	Secretary
Address :	No. 5, 2^nd Cross, Ramalinga Nagar, K.K. Pudur, Coimbatore – 641038, Tamilnadu, India
Date of Birth/Age :	23.09.1968
Date of Appointment :	17.08.2011
PAN No.:	AFVPR0802D

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.07.2012

Names of Shareholders	No. of Shares
Lakshmi Machine Works Limited, India	24998400
R. Venkatrangappan	200
Sanjay Jayavarthanavelu	200
R Rajendran	200
J Rajyalakshmi	300
Lalithadevi Sanjay Jayavarthanavelu	300
Uttara Ravi	200
Nethra J.S. Kumar	200
Total	25000000

AS ON 30.07.2012

Equity Share Breakup	Percentage of Holding
Category
Bodies corporate	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Ring Frame Assemblies and Related Parts.

Products :

ITC Code	Product Descriptions
84482000	Ring Frame Assemblies
84452013	Ring Frame Machines
84483290	Ring Frame spares

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Ring Frame Assembly	Sections	22000	22000	18716
Head and Foot stock	Sets	--	--	509

GENERAL INFORMATION

No. of Employees :	Not Available
Bankers :	Indian Bank, Coimbatore Main Branch, 31, Variety Hall Road, Coimbatore - 641001, Tamilnadu, India

Banking Relations :	--
Auditors :
Name :	S. Krishnamoorthy and Company Chartered Accountants
Address :	Kanapathy Towers, III Floor 1391/A-1, Sathy Road Ganapathy P O Coimbatore – 641006, Tamilnadu, India
Income-tax PAN of auditor or auditor's firm :	AALFS4188C
Holding company :	Lakshmi Machine Works Limited [L29269TZ1962PLC000463]
Others :	Maschinenfabrik Rieter AG

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
25,000,000	Equity Shares	Rs. 10/- each	Rs. 250.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
25,000,000	Equity Shares	Rs. 10/- each	Rs. 250.000 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		250.000	250.000	250.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		258.802	196.044	87.241
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		508.802	446.044	337.241
LOAN FUNDS
1] Secured Loans		0.000	0.000	108.307
2] Unsecured Loans		0.000	262.312	244.028
TOTAL BORROWING		0.000	262.312	352.335
DEFERRED TAX LIABILITIES		18.511	18.032	0.000
TOTAL		527.313	726.388	689.576
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		311.913	362.979	407.901
Capital work-in-progress		0.000	1.324	1.841
INVESTMENT		0.000	0.000	0.000
DEFERRED TAX ASSETS		0.000	0.000	41.668
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	211.803	394.700	179.308
	Sundry Debtors	118.359	87.519	44.491
	Cash & Bank Balances	64.797	41.384	47.833
	Other Current Assets	10.087	18.247	27.279
	Loans & Advances	89.029	88.583	56.471
Total Current Assets		494.075	630.433	355.382
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	262.022	248.591	108.871
	Other Current Liabilities	1.842	1.333	8.345
	Provisions	14.811	18.424	0.000
Total Current Liabilities		278.675	268.348	117.216
Net Current Assets		215.400	362.085	238.166
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		527.313	726.388	689.576

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	1376.425	1734.894	634.916
		Other Income	32.464	25.500	18.229
		TOTAL (A)	1408.889	1760.394	653.145
Less	EXPENSES
		Cost of materials consumed	915.746	1295.852
		Changes in inventories of finished goods, work-in-progress and stock-in-trade	91.880	(81.410)
		Employee benefit expense	108.384	107.433
		Other expenses	143.045	189.988
		TOTAL (B)	1259.055	1511.863	613.926
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		149.834	248.531	39.219
Less	FINANCIAL EXPENSES (D)		5.708	19.791	14.329
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		144.126	228.740	24.890
Less/ Add	DEPRECIATION/ AMORTISATION (F)		49.265	59.217	59.972
	PROFIT BEFORE TAX (E-F) (G)		94.861	169.523	(35.082)
Less	TAX (H)		32.103	60.720	(11.355)
	PROFIT AFTER TAX (G-H) (I)		62.758	108.803	(23.727)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		21.755	(87.048)	(63.321)
	BALANCE CARRIED TO THE B/S		84.513	21.755	(87.048)
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	985.482	1734.411	634.916
	IMPORTS
		Raw Materials	76.363	274.058	68.339
		Stores & Spares	3.780	11.207	6.148
		Capital Goods	0.996	2.752	0.454
	TOTAL IMPORTS		81.139	288.017	74.941
	Earnings Per Share (Rs.)		2.51	4.35	(0.95)

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	4.45	6.18	(3.63)
Net Profit Margin (PBT/Sales)	(%)	6.89	9.77	(5.53)
Return on Total Assets (PBT/Total Assets}	(%)	11.77	18.16	(4.60)
Return on Investment (ROI) (PBT/Networth)		0.19	0.38	(0.10)
Debt Equity Ratio (Total Debt/Networth)		0.00	0.59	1.04
Current Ratio (Current Asset/Current Liability)		1.77	2.35	3.03

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	No

UNSECURED LOANS

Unsecured Loans	31.03.2012	31.03.2011
	(Rs. In Millions)
Loans and Advance from Related Parties	0.000	262.312
Total	0.000	262.312

OPERATIONS:

The Company achieved a turnover of Rs.1367.425 Millions during the year Compared to Rs.1734.894 Millions in the previous year resulting in a net profit of Rs.62.758 Millions (Previous year profit Rs.108.803 Millions).This profit could be possible only because of the efficient planning and cost reduction methods adopted by the Company.

PERFORMANCE:

After taking over the Management of the Company by Lakshmi Machine Works Limited, the Company has taken necessary steps for manufacture of Complete Ring Frame in collaboration and assistance with Lakshmi Machine Works Limited. During this period the Company has produced Ring Frame for Export. Till 30th of June, 2011, the Company was supplying Ring Frame Section Assemblies to Rieter Machine Works Limited.

FUTURE OUTLOOK

At present the Textile Industry is experiencing recessionary conditions not only in India, but also in Global Market. The Company is taking steps to explore the possibilities for exports and also for the domestic market. The Company has also planned to manufacture parts and Components for spinning machinery, so that the full capacity can be utilised.

CONTINGENT LIABILITIES:

(Rs. in millions)

Particulars	31.03.2012	31.03.2011
Claims against company not acknowledged as debt	129.260	129.260
Guarantees	10.000	10.000
Total contingent liabilities	139.260	139.260

FIXED ASSETS

Ø Buildings

Ø Factory

Ø Plant and Machinery

Ø Imported second hand machines

Ø Tool Holders

Ø Jigs and Fixtures

Ø Electrical Installations

Ø Furniture and Fittings

Ø Office Equipment

Ø Computers

Ø Vehicles

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. 53.87
UK Pound	1	Rs. 83.59
Euro	1	Rs. 72.38

INFORMATION DETAILS

Report Prepared by :

BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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		50

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.