MIRA INFORM REPORT

Report Date :

16.02.2013

IDENTIFICATION DETAILS

Name :	P A S COTTON MILLS PRIVATE LIMITED
Registered Office :	No.1101-B Cotton Market, Post Box – 102, Rajapalayam, Virudunagar – 626117, Tamilnadu
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	24.11.2005
Com. Reg. No.:	18-058104
Capital Investment / Paid-up Capital :	Rs.60.000 Millions
CIN No.: [Company Identification No.]	U17111TN2005PTC058104
PAN No.: [Permanent Account No.]	AADCP7468H
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturing of Cotton Yarn.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ca (13)

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having a moderate track record. There appear some accumulated losses and external borrowings recorded by the company. The financial position of the company is vulnerable. It has recorded very minimal profits. However, business is active. Payment terms are slow but delayed. The company can be considered for business dealings on a safe and secured 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	Short Term Rating: D
Rating Explanation	Default
Date	March, 2012

Rating Agency Name	ICRA
Rating	Long Term Rating: D
Rating Explanation	Default
Date	March, 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 :	No.1101-B Cotton Market, Post Box – 102, Rajapalayam, Virudunagar – 626117, Tamilnadu, India
Tel. No.:	91-4563-261009/ 325888
Fax No.:	91-4563-263897/ 263899
E-Mail :	rajuspg@rediffmail.com rajuspg@sancharnet.in shekharauditor@gmail.com pascotton@sancharnet.in

DIRECTORS

(AS ON 28.09.2012)

Name :	Mr. Percholli Krishnama Raja Arjuna Raja
Designation :	Managing Director
Address :	154-A, Madasamy Koil ST Rajapalayam, Virudhnagar – 626117, Tamilnadu, India
Date of Birth/Age :	05.04.1936
Date of Appointment :	24.11.2005
DIN No.:	00190216
Name :	Mr. Pakalapadi Deva Raja Subramania Raja
Designation :	Whole-time director
Address :	154-A, Madasamy Koil ST Rajapalayam, Virudhnagar – 626117, Tamilnadu, India
Date of Birth/Age :	18.10.1955
Date of Appointment :	24.11.2005
DIN No.:	00190252
Name :	Mr. Kottumukkalur Bala Raja Balarama Raja
Designation :	Director
Address :	154-A, Madasamy Koil ST Rajapalayam, Virudhnagar – 626117, Tamilnadu, India
Date of Birth/Age :	26.05.1955
Date of Appointment :	24.11.2005
DIN No.:	00190280

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 28.09.2012)

Names of Shareholders	No. of Shares
Percholli Krishnama Raja Arjuna Raja	323750
Pakalapadi Deva Raja Subramania Raja	323750
Kottumukkalur Bala Raja Balarama Raja	323750
P S Vignesh Raju	2514375
K B Abinanthan	2514375
Total	6000000

(AS ON 30.09.2012)

Equity Shares Break – up

Category	Percentage
Directors or relatives of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Cotton Yarn.

Products :

Products Description	Item Code No.
Cotton Yarn	5205

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· State Bank of India

Commercial Branch, Sankarankoil Road, Rajapalayam – 626117, Tamilnadu, India

Facilities :

Secured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
Rupee Term Loans Banks	236.342	274.343
Working Capital Loans Banks	50.696	55.590
Interest Accrued Due Other Debt	2.920	3.143
Total	289.958	333.076

Banking Relations :	--
Auditors :
Name :	Narayanasamy and Associates Chartered Accountant
Address :	73D, Kamaraj Nagar, Rajapalayam - 626117,Virudhunagar District, Tamilnadu, India
PAN No.:	AADFN4690A
Associates :	· Raju Spinning Mills Private Limited · Sri Raju Cotton Mills

CAPITAL STRUCTURE

(AS ON 28.09.2012)

Authorised Capital :

No. of Shares	Type	Value	Amount
6000000	Equity Shares	Rs.10/- each	Rs.60.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6000000	Equity Shares	Rs.10/- each	Rs.60.000 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		60.000	60.000	35.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(17.792)	(18.854)	(17.890)
NETWORTH		42.208	41.146	17.110
LOAN FUNDS
1] Secured Loans		289.958	333.076	346.473
2] Unsecured Loans		91.646	91.844	94.285
TOTAL BORROWING		381.604	424.920	440.758
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		423.812	466.066	457.868
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		363.950	392.194	405.885
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		7.444	8.159	9.196
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	56.157	28.193	12.971
	Sundry Debtors	6.404	18.333	15.362
	Cash & Bank Balances	4.310	3.337	6.489
	Other Current Assets	14.731	13.640	18.665
	Loans & Advances	7.978	7.274	10.755
Total Current Assets		89.580	70.777	64.242
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	36.486	4.994	21.604
	Other Current Liabilities	0.000	0.000	0.000
	Provisions	0.769	0.246	0.110
Total Current Liabilities		37.255	5.240	21.714
Net Current Assets		52.325	65.537	42.528
MISCELLANEOUS EXPENSES		0.093	0.176	0.259
TOTAL		423.812	466.066	457.868

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		TOTAL (A)	201.163	177.284	145.981
Less	EXPENSES
		TOTAL (B)	126.900	111.657	100.891
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		74.263	65.627	45.090
Less	FINANCIAL EXPENSES (D)		43.656	44.862	44.880
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		30.607	20.765	0.210
Less/ Add	DEPRECIATION/ AMORTISATION (F)		28.426	20.659	19.358
	PROFIT BEFORE TAX (E-F) (G)		2.181	0.106	(19.148)
Less	TAX (H)		1.119	1.070	(6.440)
	PROFIT AFTER TAX (G-H) (I)		1.062	(0.964)	(12.708)
	Earnings Per Share (Rs.)		0.18	(0.16)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	0.53	(0.54)	(8.71)
Return on Total Assets (PBT/Total Assets}	(%)	0.48	0.02	(4.07)
Return on Investment (ROI) (PBT/Networth)		0.05	0.00	(1.12)
Debt Equity Ratio (Total Debt/Networth)		9.04	10.33	25.76
Current Ratio (Current Asset/Current Liability)		2.40	13.51	2.96

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	No
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

UNSECURED LOANS

Particulars	31.03.2011	31.03.2010
	(Rs. In Millions)
Loans Directors	1.060	1.060
Deposits Related Parties	90.586	90.784
Total	91.646	91.844

PERFORMANCE REVIEW

The year's earnings before interest, depreciation and taxation (EBIDTA) has increased by Rs.8.635 Millions from the previous year levels. Though cotton prices rallied to record heights, there was parity between cotton and yam prices. Higher interest outflow and production of finer counts were the reasons for lower profits than the expected levels. The directors are planning to go for coarse count product mix to improve the sales and profitability in the coming years. Power cuts were managed with private power purchase. The director’s ore confident of better performance in the years to come.

OUTLOOK FOR THE FUTURE

The demand for yarn started dwindling from April 2011 and during the months of June and July 201 1 it has almost come to standstill sending panic waves across the industry. Though there is some respite in the yarn movement, the prices are not in parity with going cotton prices resulting in slender margins. The directors plan to go for coarser count product mix from the ensuing cotton season. The directors expect the situation to improve in the coming months

FIXED ASSETS:

· Land

· Building

· Plant and Machinery

· Furniture and Fixtures

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.53.99
UK Pound	1	Rs.83.72
Euro	1	Rs.72.09

INFORMATION DETAILS

Report Prepared by :

NIT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	2
PAID-UP CAPITAL	1~10	2
OPERATING SCALE	1~10	2
FINANCIAL CONDITION		0
--BUSINESS SCALE	1~10	2
--PROFITABILIRY	1~10	1
--LIQUIDITY	1~10	1
--LEVERAGE	1~10	1
--RESERVES	1~10	--
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		13

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.