MIRA INFORM REPORT

Report Date :

02.01.2013

IDENTIFICATION DETAILS

Name :	LAKSHMI MACHINE WORKS LIMITED
Registered Office :	Perianaickenpalayam, SRK Vidyalaya Post, Coimbatore – 641020, Tamilnadu
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	14.09.1962
Com. Reg. No.:	18-000463
Capital Investment / Paid-up Capital :	Rs. 112.665 Millions
CIN No.: [Company Identification No.]	L29269TZ1962PLC000463
TAN No.: [Tax Deduction & Collection Account No.]	CMBL03078F
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing of wide range of spinning and pre-spinning machinery, weaving machineries, castings, pilot mill, metal cutting including grinding machines, payphone, granite and floriculture.
No. of Employees :	3274 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Aa (78)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 35000000
Status :	Very Good
Payment Behaviour :	Regular
Litigation :	Exists
Comments :	Subject is a well established and a reputed company having a fine track record. Financial position of the company appears to be sound. Fundamentals are strong and healthy. Directors are reported to be experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions. It can be considered as a promising business partner in medium to long run.

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 / Marketing Dept - Textile Machinery Division :	Perianaickenpalayam, SRK Vidyalaya Post, Coimbatore – 641020, Tamilnadu, India
Tel. No.:	91-422-2692371-379 / 2892371-79 / 6612263 / 6612551/ 3022255/ 6612216/ 6612207
Fax No.:	91-422-2692541 / 542 / 543/ 2892541-42
E-Mail :	lmw.cbe@rmw.sprintrpg.ems.vsnl.net.in regd.off@lmw.co.in corp.off@lmw.co.in sales@lmw.co.in exports@lmw.co.in supportcentre@lmw.co.in secretarial@lmw.co.in rajendran.r@lmw.co.in soundhar_rajhan.k@lmw.co.in
Website :	http://www.lakshmimach.com
Corporate Office :	34-A, Kamaraj Road, Coimbatore - 641 018, Tamilnadu, India
Tel. No.:	91-422-2221680/ 82-87
Fax No.:	91-422-2220912
E-Mail :	corp.off@lmw.co.in secretarial@lmw.co.in
Factory 1:	Unit I Perianaickenpalayam, Coimbatore – 641 020, Tamilnadu, India
Tel No:	91-421-3983000
Fax No.:	91-421-2333270
E mail:	Unit2@lmw.co.in
Factory 2:	Unit II Kaniyur, Coimbatore – 641 659, Tamilnadu, India
Factory 3:	Spindles and Rings Unit SF 113, Annur Road, Arasur, Coimbatore – 641 407, Tamilnadu, India
Factory 4:	Bearings Unit SIPCOT Industrial Complex, Gummudipoondi - 601 201, Tamilnadu, India
Factory 5:	wind mill division Kethanur, Palladam (TK), Coimbatore, Tamilnadu, India
Factory 6:	commercial tool room Sangothipalayam, Coimbatore - 641 407, Tamilnadu, India
Factory 7:	agro division Naranahalli Village, Doddaballapur (TK), Karnataka, India
Factory 8:	MACHINE TOOL DIVISION Arasur, Coimbatore – 641 407, Tamilnadu, India
Tel No:	91-421-3983000/ 3022537
Fax No.:	91-421-2360029/ 3022577
E mail:	Mtdsales@lmw.co.in mtd@lmw.co.in
Factory 9	FOUNDRY DIVISION Arasur, Coimbatore – 641 407, Tamilnadu, India
Tel No:	91-421-3983000/ 3022553/ 3022511
Fax No.:	91-421-2360029/ 3022577
E mail:	foundary@lmw.co.in mtd@lmw.co.in
Factory 10:	G. K. D. INSTITUTE FOR TECHNOLOGICAL RESOURCES Arasur, Coimbatore – 641 407, Tamilnadu, India
Factory 11:	Ganapathy, Coimbatore-641006, Tamilnadu, India

DIRECTORS

As on 31.03.2012

Name :	Mr. R. Venkatrangappan
Designation :	Chairman
Name :	Sri. Sanjay Jayavarthanavelu
Designation :	Managing Director
Name :	Mr. M.V. Subbiah
Designation :	Director
Experience :	He has 4 decades of experience in the field of Industrial Administration, Human Resource Development and Financial Management.
Other Directorships :	1. ICI India Limited 2. National Silk Development Corporation 3. Chennai Willington Corporate Foundation 4. Chennai Heritage
Name :	Mr. S. Pathy
Designation :	Director
Name :	Mr. R. Satagopan
Designation :	Director
Name :	Mr. Basavaraju
Designation :	Nominee Director of LIC
Experience :	He has more than 3 decades of experience in the fields of Marketing, Investments, Training and Administration
Name :	Mr. Aditya Himatsingka
Designation :	Director
Name :	Dr. Mukund Govind Rajan
Designation :	Director
Name :	Mr. R. Rajendran
Designation :	Director Finance

KEY EXECUTIVES

Name :	Mr. K. Duraisami
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2012

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	301866	2.68
Bodies Corporate	2890878	25.66
Sub Total	3192744	28.34
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3192744	28.34
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	781136	6.93
Financial Institutions / Banks	3420	0.03
Insurance Companies	1807232	16.04
Foreign Institutional Investors	419325	3.72
Sub Total	3011113	26.73
(2) Non-Institutions
Bodies Corporate	1818172	16.14
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	1556421	13.81
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	665365	5.91
Any Others (Specify)	1022689	9.08
Trusts	6765	0.06
Directors & their Relatives & Friends	4910	0.04
Foreign Nationals	240	0.00
Non Resident Indians	53612	0.48
Clearing Members	88395	0.78
Hindu Undivided Families	477247	4.24
Foreign Corporate Bodies	391520	3.48
Sub Total	5062647	44.94
Total Public shareholding (B)	8073760	71.66
Total (A)+(B)	11266504	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	11266504	0.00

BUSINESS DETAILS

Line of Business :

Manufacturing of wide range of spinning and pre-spinning machinery, weaving machineries, castings, pilot mill, metal cutting including grinding machines, payphone, granite and floriculture.

Products :

Item Code No. (ITC Code)	844520
Product Description	Textile Spinning Systems
Item Code No. (ITC Code)	845811
Product Description	Metal Cutting Numerically Controlled Machines
Item Code No. (ITC Code)	844511
Product Description	Spinning Preparatory Machines

PRODUCTION STATUS (As on 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Spinning Machinery
Spinning Preparatory Machinery	Nos.	3287	5000	2443
Yarn Making Machinery	Nos.	5084	3300	1882
Accessories and Parts	Nos.	211 Lacs	279 Lacs	--
Weaving Machinery
Weaving Preparatory Machinery	Nos.	211	--	--
Textile packaging Machinery	Tonnes	196	--	--
Pilot Mill	Spindle	28000	8000	--
Metal Cutting Including Grinding Machines	Nos.	900	900	1081
Diesel Engines	Nos.	2676	--	--
Casstings	Tonnes	15000	15000	29188

GENERAL INFORMATION

No. of Employees :	3274 (Approximately)
Bankers :	· Indian Bank · Bank of Baroda · Citibank N.A. · HDFC Bank · IDBI Bank · Standard Chartered Bank · Bank of Nova Scotia

Banking Relations :	--
Auditors 1 :
Name :	M.S. Jagannathan and Visvanathan Chartered Accountants
Address :	Coimbatore, Tamilnadu, India
Auditors 2 :
Name :	Subbachar and Srinivasan Chartered Accountants
Address :	Coimbatore, Tamilnadu, India
Joint Venture :	Rieter LMW Machinery Limited (Upto 15.8.2011)
Wholly Owned Subsidiaries :	· LMW Textile Machinery (Suzhou) Company Limited · LMW Machinery Limited [w.e.f. 16.8.2011
Other related parties-Associates :	· Eshaan Enterprises Limited · Mahalakshmi Engineering Holdings Limited · Harshini Textiles Limited · Quattro Engineering India Limited · Hermes Academy of Training Limited · Revantha Holdings Limited · Integrated Electrical Controls Limited · Sri Kamakoti Kamakshi Textiles Private Limited · Lakshmi Cargo Company Limited · Sri Lakshmi Vishnu Plastics · LCC Cargo Holdings Limited · Super Sales India Limited · Lakshmi Electrical Drives Limited · Starline Travels Limited · Lakshmi Technology and Engg. Industries Limited · Titan Paints and Chemicals Limited · Lakshmi Ring Travellers (Cbe) Limited · Venkatavaradha Agencies Limited · Lakshmi Electrical Control Systems Limited · Walzer Hotels Limited · Lakshmi Precision Tools Limited · Lakshmi Life Sciences Limited

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
25000000	Equity Shares	Rs.10/- each	Rs.250.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
11266504	Equity Shares	Rs.10/- each	Rs.112.665 millions

Reconciliation of number of shares

Particular	Numbers
Number of Equity shares at the beginning	1,12,66,504
Less : Equity Shares bought back during the year	--
Number of Equity shares at the end	1,12,66,504

Shareholders holding more than 5 percent Equity shares

Particular	No. of shares held	% of Holding
Life Insurance Corporation of India	1093481	9.71%
Voltas Limited	6,00,000	5.33%
Lakshmi Cargo Company Limited	8,23,718	7.31%
Lakshmi Technology and Engineering Industries Limited	6,67,090	5.92%
The Lakshmi Mills Company Limited	7,20,000	6.39%

Note : Aggregate number of Equity shares bought back during financial year 2010-11

The Company has issued only one class of Equity shares having a par value of Rs.10 per share. Each holder of Equity share is entitled to one vote per share. The Company declares dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval by the shareholders at the Annual General Meeting.

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		112.665	112.665	123.692
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		8872.405	8156.940	9134.056
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		8985.070	8269.605	9257.748
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		228.706	276.042	330.939
TOTAL		9213.776	8545.647	9588.687
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4975.618	4260.043	4464.134
Capital work-in-progress		103.074	104.027	1.600
INVESTMENT		1540.730	1000.730	1214.424
DEFERREX TAX ASSETS		0.000	0.000	0.000
Other Non-Current Assets		170.239	100.175	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2153.218	2511.425	1103.980
	Sundry Debtors	1292.968	1119.507	615.995
	Cash & Bank Balances	6923.456	7289.588	7273.153
	Other Current Assets	281.130	253.527	237.396
	Loans & Advances	1392.395	1571.089	1023.142
Total Current Assets		12043.167	12745.136	10253.666
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	2625.423	2670.273	1571.981
	Other Current Liabilities	6296.824	6547.799	4534.100
	Provisions	696.805	446.392	239.057
Total Current Liabilities		9619.052	9664.464	6345.138
Net Current Assets		2424.115	3080.672	3908.528
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		9213.776	8545.647	9588.687

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	21134.524	18037.477	11369.044
		Other Income	845.077	796.568	821.402
		TOTAL (A)	21979.601	18834.045	12190.446
Less	EXPENSES
		Cost of materials consumed	13051.096	11103.208
		Changes in inventories of finished goods and work-in-progress and Stock-in-Trade	58.188	(383.036)	9726.618
		Employee benefits expense	1735.024	1668.253
		Other expenses	3711.751	3013.096
		TOTAL (B)	18556.059	15401.521	9726.618
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3423.542	3432.524	2463.828
Less	FINANCIAL EXPENSES (D)		50.073	13.018	0.000
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		3373.469	3419.506	2463.828
Less/ Add	DEPRECIATION/ AMORTISATION (F)		1139.529	1041.084	958.206
	PROFIT BEFORE TAX (E-F) (G)		2233.940	2378.422	1505.622
Less	TAX (H)		863.764	718.625	458.783
	PROFIT AFTER TAX (G-H) (I)		1370.176	1659.797	1046.839
Less/ Add	Investment Fluctuation Reserve		(200.453)	25.589	607.809
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		7694.820	6572.260	5243.968
Less	APPROPRIATIONS
		Transfer to General Reserve	140.000	170.000	110.000
		Proposed Dividend	563.325	337.995	185.539
		Tax on Dividend	91.385	54.831	30.818
	BALANCE CARRIED TO THE B/S		8069.833	7694.820	6572.260
	EARNINGS IN FOREIGN CURRENCY
		Export of goods on FOB basis	3214.969	2514.138	NA
	TOTAL EARNINGS		3214.969	2514.138	NA
	IMPORTS
		Raw Materials	602.367	502.756	262.352
		Components and Spares Parts	2104.773	1766.839	1079.1
		Capital Goods	631.209	701.216	183.368
	TOTAL IMPORTS		3338.349	2970.811	1524.820
	Earnings Per Share (Rs.)		121.62	134.95	84.63

QUARTERLY RESULTS

PARTICULARS	30.06.2012	30.09.2012
Type	1^st Quarter	2^nd Quarter
Net Sales	4329.880	4696.140
Total Expenditure	3799.160	4088.150
PBIDT (Excl OI)	530.720	607.990
Other Income	194.860	121.010
Operating Profit	725.580	729.000
Interest	1.130	1.720
Exceptional Items	0.000	0.000
PBDT	724.450	727.280
Depreciation	274.420	283.340
Profit Before Tax	450.030	443.950
Tax	140.000	137.500
Provisions and contingencies	0.000	0.000
Profit After Tax	310.030	306.450
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	310.030	306.450

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	6.23	8.81	8.58
Net Profit Margin (PBT/Sales)	(%)	10.57	13.19	13.24
Return on Total Assets (PBT/Total Assets}	(%)	13.13	13.99	10.23
Return on Investment (ROI) (PBT/Networth)		0.25	0.28	0.16
Debt Equity Ratio (Total Liability/Networth)		1.07	1.17	0.68
Current Ratio (Current Asset/Current Liability)		1.25	1.32	1.62

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	No
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	Yes
23]	Banking Details	Yes
24]	Banking facility details	No
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	No
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

LITIGATIONS DETAILS

CHENNAI COURT

CASE STATUS INFORMATION SYSTEM

Case Status: Pending

Status of: Tax Cases

Case No.: 3

Year: 2012

Petitioner: The State of TN

Respondent: M/S LAKSHNI MACHINE WORKS LIMITED

Pet’s Advocate: SSC Taxes

Res’s Advocate:

Category: No Category Mentioned

Last List on: No Date mentioned

Case Updated on: February 2012

OPERATIONS

During the year, the Company has achieved a turnover of Rs.20724.919 Millions (2010 -11: Rs.17733.117 Millions) resulting in a Net Profit of Rs.2233.940 Millions before tax (2010-11: Rs.2378.422 Millions). During the year the turnover has increased by 16.87% over the previous year however the profit has decreased by 6.07%. Inspite of rise in turnover, the increase in commodity prices, power and fuel expenses and depreciation of the Indian Rupee against US Dollar has impacted profitability.

TEXTILE MACHINERY DIVISION

The Textile Machinery Division of the Company, during the year, has recorded a turnover of Rs.17532.951 Millions as against Rs.15181.321 Millions achieved during the last year, recording an increase of 15.49% over the previous year.

The buoyancy in demand for Textile Machinery experienced during 2010- 11 has slowed down in 2011-12. During the year the Indian Textile Industry was affected by external factors like the Euro Zone Crisis and concerns relating to low growth in demand from the US market. Demand generation in the domestic market too was affected by the uncertain economic environment. The high rate of inflation has eroded the disposable income and has hampered demand growth in the domestic market.

The Indian Textile Industry was also affected by volatile cotton prices; high cost of inventory carried forward, high interest rates, withdrawal of export incentives and levy of additional excise duty on readymade garments. The financial gains realised during 2010-11 were negated by the first quarter of 2011-12. Imposition of restriction on the cotton yarn export and the high cost of working capital forced many mills to dump yarn, made out of expensive cotton, in the domestic market at very low prices resulting in huge losses. Many textile units also closed/suspended operations or experienced lower capacity utilisation due to power shortage and issues relating to environmental concerns.

The uncertain and unpredictable Government policy on cotton and yarn export is posing a threat to the new entrants. It also made the existing players to defer their investment proposals for capacity expansion or modernisation. Only large integrated textile companies who have sufficient internal accruals or arrangements with banks / financial institutions were able to proceed with their investment programmes. The budget for the year 2012-13 too has failed to cheer the Indian textile industry, which has been bogged down by many issues. However, extension of relief for R and D activities and testing laboratories, exemption of expenditure on skill development in manufacturing sector, allocation of Rs.10000.000 Millions for National Skill Development Programmes and allocation of Rs.29140.000 Millions for TUF scheme were hailed as steps in the right direction.

In the current market scenario, the Company aims to strengthen the existing product lines by presenting new value added products with high level of automation. Despite stiff competition from multinational companies, the Company has retained its market position through its ability to provide comprehensive spinning solutions, prompt after-sale services and commitment to enhance the bottom line of its customers. The step to allow 100% Foreign Direct Investment in textile sector and retail sector and the commitment to establish more textile parks by the government is expected to bring moderate growth in business to this division in the coming years.

MACHINE TOOL DIVISION

Turnover of the Machine Tool Division during the year was Rs.2274.917 Millions as against Rs.1843.452 Millions recorded during the last year showing an increase of 23.40% over the previous year.

Moderation in the growth of automobile and auto ancillary industry has not affected the demand for machine tools. The emerging demand from aerospace, defence, power, railway engineering, heavy engineering, infrastructure and construction has given a new lease of life to this division. Growth of unorganised manufacturers offering low cost machine tools, continuous expansion of capacity by the organised sector and the stiff competition from overseas machine tool manufacturers are throwing a challenge to this division. Improved and sustained efforts of the Company for enhancing the technological competencies and cost competitiveness are expected to yield good results in the near future.

FOUNDRY DIVISION

Foundry division has achieved a turnover of Rs.917.007 Millions as against Rs.708.344 Millions recorded during the previous year showing an increase of 29% over the previous year. This division has exported castings worth Rs.524.770 Millions as against Rs.291.370 Millions made during the previous year. The export turnover constitutes 57% of the division’s turnover. The growth in exports is mainly on account of growing demand for locomotive castings due to the growth of railway locomotive businesses in North America and Europe.

The Company has installed additional high pressure moulding lines, which would enable this division to take up the manufacture of large volume of small weight castings.

Though the products of this division are well accepted by the global market resulting in a good order book position, shortage of power, nonavailability of trained workforce and other production constraints prevent this division from achieving full capacity utilisation.

WIND ENERGY DIVISION

During March 2012 the Company has installed five additional, high capacity Wind Energy Generators (WEG) with a total capacity of 8.85 MW at an investment of Rs.600.700 Millions.

As on 31st March, 2012 the Company has installed 28 WEGs with a total capacity of 36.80 MW. This division has generated 647 lakh units of power during 2011-12. The entire wind power generated has been captively consumed by the manufacturing units of the Company and thereby has helped to reduce the power cost.

AWARDS

During the year 2011-12 your Company has bagged the following Awards:

· Silver Shield for “Star Performer - Large Enterprise 2009-10 EEPC Regional Award” from Engineering Export Promotion Council for the highest exports.

· Apex Export Award for the year 2010-11 from Textile Machinery Manufacturers Association India for the highest exports.

· R and D Award for the new Card LC 333 and Comber LK 64 for the year 2009-10 from Textile Machinery Manufacturers Association India.

· R and D Award for the new Ring Frame LR 9 for the year 2010-11 from Textile Machinery Manufacturers Association India.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

ECONOMY OVERVIEW

The Indian Economy was estimated to sustain its growth rate like last year; however the global financial crisis along with a recession has curtailed its performance. India’s GDP is now estimated to have grown at the rate of 6.5% in 2011-12 as against the growth rate of 8.4% achieved last year. Though the economy was able to limit the adverse impact of the global slowdown, its performance is disappointing. The optimism that was prevalent at the start of the year has now turned to pessimism.

Business confidence level within the Indian economy has plunged primarily due to the continuing uncertainty in global demand outlook and also due to a weak domestic market whose consumption appetite has reduced due to a combination of high inflation and rising fuel costs. During the year 2011-12, the tight monetary policy as adopted by the RBI for taming inflation has impacted demand growth and the overall investment climate within the country. But it is also a fact that in a performance comparison, the Indian economy still remains high amongst the forerunners.

GDP growth rates can improve only if the economic environment within the country is made more conducive for Investment.

Further development of rural infrastructure and energy generation facilities is absolutely essential.

For the ensuing financial year 2012-13, a moderate GDP growth rate of 6.00%~6.50% is expected. Easing inflation has now enabled RBI to reduce the interest rates, which along with easing inflation and a prediction for a near normal monsoon is expected to boost domestic demand and consumption in rural India. Depreciation of the Indian Rupee vis-a-vis the US Dollar is expected to encourage exports and as well attract more foreign direct investments however it will also make the imports costlier

SEGMENT REVIEW

The Company has three major segmental divisions namely, the Textile Machinery Division (TMD), the Machine Tool Division (MTD), the Foundry Division (Foundry). Besides these divisions, the Company has a Wind Energy Division and an Advanced Technology Centre. All the divisions are located in and around Coimbatore, Tamilnadu, India.

Industry Overview

Indian Textile Industry is a major contributor towards the country’s economic growth and foreign trade. Infact the importance of Textiles within the Indian Economy stands next only to Agriculture. Also, the Indian Textile Industry occupies a unique position of being a totally self-reliant industry across the value chain, right from raw-materials to the finished goods. It is notable that significant value addition happens at every stage. Indian Textile Industry is comprised of 1,834 big spinning mills, 1,249 small scale spinning mills 184 exclusive weaving mills, 5 lakh power loom units and about one lakh handloom units. Abolition of trade restrictions and the easing of Multi-Fibre Agreement (MFA) since January 2005 has enabled the Indian manufacturers to export without any quantitative restrictions across the globe. This has enabled sizeable growth in Indian Textile Industry across the value chain. India has about 24% of the world’s installed spindleage and is one of the biggest exporters of yarn.

According to the National Fibre Policy Report, India requires substantial capital expenditure during the period 2011-20 to keep up with the expected demand. In this scenario, any extension of the TUF Scheme during the XII Plan Period (2012-17) will immensely benefit the Indian Textile Industry.

Outlook

Motivated by the depreciating rupee, exporters plan further expansion of capacity. Effective monetary measures taken by the RBI alongwith the prediction of a near normal monsoon is expected stimulate domestic consumption. On the other hand, the global economic slowdown seems to have little or no impact on the capex plans of well established integrated textile mills, as they are aware that investment in contemporary technology is necessary to meet their customers’ cost and quality requirements.

Industry Overview

The Indian Machine Tool Industry consists of about 450 units of which about 150 units are in the organized sector. More than 70% of the Machine Tools manufactured in India are made by about 10 major companies. The Indian Machine Tool sector is capable of manufacturing both the conventional and advanced CNC Machine Tools. Despite the growth of Machine Tool Industry in India, about 70% of the domestic demand for high end machine tools is being met by imports. This sector is poised to grow further in view of the increased demand from defence, aerospace, metro rail and heavy engineering industries in India.

MTD segment performance

This division has sold 1,261 machines during the year for a value of `22,540.30 Lakhs and has added 488 new customers to its fold.

Outlook

Emerging engineering industries like aerospace, railway engineering has created enormous opportunities for this sector. India is a global leader for low cost manufacture of engineering goods. In this regard, expertise gained by the Company over two decades in the industry enables inhouse research efforts which are adequately complemented with technology tie-ups for developing high precision machinery.

This division has launched the Moving Column VMC (JVM60) during the year. In the ensuing year the multi-tasking machine (JM300X) and 1000 mm length Turning Centre (LL25TL10) will be introduced in the market.

Industry Overview

In India more than 5,000 foundries are engaged in the manufacture of grey iron, ductile iron, SG iron, malleable steel, non ferrous and steel castings. The total installed capacity of the Foundries in India is 9.05 million tons per annum and the country meets about 10% of the global demand. It is expected that for the next five decades the Indian Foundry industry will maintain the growth momentum.

Foundry Segment performance

This division comprises of three foundry units of which two units cater to the captive requirements. The one unit which meets external demand has sold 6,957 MT of ductile iron and grey iron castings valued at Rs.917.007 Millions during the year. Out of the total castings sold by this unit about 57% accounting for Rs.524.770 Millions has been exported.

Outlook

Uninterrupted demand for high precision heavy castings, availability of world class manufacturing facilities with state of the art technology, focused approach on the customers in the domestic and export market and forging of long term supply arrangements with MNC giants would enable this division to perform well during the financial year 2012-13.

CONTINGENT LIABILITIES AND COMMITMENTS, TO THE EXTENT NOT PROVIDED FOR

Rs. In Millions

Particular	31.03.2012	31.03.2011
Bills discounted with banks	50.975	--
Letters of Credit	218.000	707.014
Bank Guarantee	203.067	86.240
Central Excise Demand	38.559	44.058
Disputed tax dues are appealed before concerned appellate authorities. The Company is advised that the cases are likely to be disposed off in favour of the Company and hence no provision is considered necessary therefor
Estimated balance of committed share subscription to wholly owned subsidiary company, LMW Textile Machinery (Suzhou) Company Limited [USD 7.50 million; (previous year USD 7.50 million)]	390.602	340.484
Estimated amount of contracts remaining to be executed on capital account not provided for	128.200	200.942

FIXED ASSETS

• Land
• Buildings
• Machinery
• Furniture and Equipments
• Vehicles

WEBSITE DETAILS

PRESS RELEASES

Lakshmi Machine May Fail to Revive Earnings as Cotton Drop Hurts

Lakshmi Machine Works Limited (LMW), an Indian maker of equipment used to make textiles, may fail to bolster its profit this year after a slide in cotton prices forced customers to postpone purchases.

Profit in the year ending March 31 may be about 1.4 billion rupees ($25.6 million), the same as last year, Finance Director R. Rajendran said in a telephone interview yesterday from the southern city of Coimbatore, where the company is based. Group profit fell 9.4 percent last year from the previous period.

The slump in the price of cotton reduced the value of stocks at Indian textile makers, leading to a slowdown in the industry last year, according to the country’s Ministry of Textiles. Cotton has fallen 38 percent in the past year on ICE Futures U.S. in New York on slowing demand in China and an increase in global supplies.

“It will take some time for our customers to recoup their losses of the past year, after which they will start placing new orders,” Rajendran said.

Lakshmi Machine rose 3.6 percent to 1,690 rupees as of 2:14 p.m. in Mumbai. The shares have climbed 14 percent this year, compared with a 13 percent gain in the BSE India Sensitive Index. (SENSEX)

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.54.83
UK Pound	1	Rs.89.23
Euro	1	Rs.72.48

INFORMATION DETAILS

Report Prepared by :

NTH

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	9
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	8
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--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		78

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.