MIRA INFORM REPORT

Report Date :

04.09.2013

IDENTIFICATION DETAILS

Name :	PRASUNA VAMSIKRISHNA SPINNING MILLS PRIVATE LIMITED
Registered Office :	NH-5, Ganapavaram (Post), Nadendla (Mandal) Guntur - 522619, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	11.02.2004
Com. Reg. No.:	01-042636
Capital Investment / Paid-up Capital :	Rs.116.900 Millions
CIN No.: [Company Identification No.]	U18101AP2004PTC042636
TAN No.: [Tax Deduction & Collection Account No.]	HYDP03408G
PAN No.: [Permanent Account No.]	AADCP4505B
Legal Form :	Private Limited Liability Company
Line of Business :	Subject is primarily engaged in production of cotton yarn in medium and finer counts range.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (43)

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

Maximum Credit Limit :	USD 694000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track record. Financial of the company appears to be decent. Trade relations are fair. Business is active. Payment terms are usually correct. The company can be considered for business dealing 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 – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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

We are living in a world where volatility and uncertainty have become the New Normal. We saw a change of government in countries like Tunisia, Egypt, Libya and Vietnam. Once powerful countries in Europe are now fighting for bankruptcy. We have taken growth in the developing part of the world for granted but economic growth in China and India has begun to slow. Companies that were synonymous with their product categories just a few years ago are now no longer in existence. Kodak, the inventor of the digital camera had to wind up its operations, HMV, the British entertainment retailing company and Borders, once the second largest bookstore have shut down due to their inability to evolve their business models with the changing time. Readers’ Digest, Thomson Register are no more !

There is another megatrend happening. The World order is changing as economic power shifts from West to East. According to McKinsey study, it took Britain more than 100 years to double its economic output per person during its industrial revolution and the US later took more than 50 years to do the same. More than a century later, China and India have doubled their GDP per capital in 12 and 18 years respectively. By 2020, emerging Asia will become the world’s largest consuming block, overtaking North America.

The years after the outbreak of the global financial crisis, the world economy continues to remain fragile. The Indian economy demonstrated remarkable resilience in the initial years of the contagion but finally lost ground last year. GDP growth slowed down. Currency has been weakening. There is a marked deceleration in agriculture, industry and services. Dampening sentiment led to a cut-back in investment as well as private consumption expenditure.  Inflation remained at high levels fuelled by the pressure from the food and fuel sectors. The large fiscal and current account deficit s continued to cause grave concern. It is imperative that India regains its growth trajectory of 8-9 % sooner than later. This is crucially important given the need to create gainful livelihood opportunities for the millions living in poverty as also the large contingent of young people joining the job market every year.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Term Loan Facilities BB
Rating Explanation	Inadequate credit quality and high credit risk
Date	May 2013

Rating Agency Name	ICRA
Rating	ST – Fund based facilities (Sub Limit) A4
Rating Explanation	Minimal degree of safety and high credit risk
Date	May 2013

RBI DEFAULTERS’ LIST STATUS

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

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

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

DIRECTORS

As on: 24.09.2012

Name :

Mr. Haribabu Kalahasti

Designation :

Managing director

Address :

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

Date of Birth/Age :

09.08.1954

Date of Appointment :

11.02.2004

DIN No.:

01880153

Name :

Mr. Srinivas Pendyala

Designation :

Managing director

Address :

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

Date of Birth/Age :

01.04.1969

Date of Appointment :

05.05.2005

DIN No.:

01881020

Other Directorship:

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

Name :

Mr. Lakshmi Rajyam Kalahasti

Designation :

Director

Address :

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

Date of Birth/Age :

10.12.1961

Date of Appointment :

11.02.2004

DIN No.:

01808367

Name :

Mr. Muralikrishna Rao Penoyala

Designation :

Director

Address :

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

Date of Birth/Age :

15.07.1944

Date of Appointment :

11.02.2004

DIN No.:

01808390

Name :

Mrs. Rathna Kumari Pendyala

Designation :

Director

Address :

33/69, 1^st Street, Shanthi Nagar, Sm, Nagar Post, Chennai - 600062, Tamilnadu, India

Date of Birth/Age :

20.02.1955

Date of Appointment :

11.02.2004

DIN No.:

02467207

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 24.09.2012

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

As on: 24.09.2012

Equity Share Break up (Percentage of Total Equity)

Category	Percentage
Directors or relatives of Directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Subject is primarily engaged in production of cotton yarn in medium and finer counts range.

Products :

ITC Code	Product Descriptions
52.05	Cotton Yarn

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	31.03.2011
Licensed Capacity	24000 Spindles
Installed Capacity	24000 Spindles

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

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

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

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

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

Facilities :

Secured Loan	31.03.2012 [Rs. in Millions]	31.03.2011 [Rs. in Millions]
Long Term Borrowing
Rupee term loans from banks	185.100	235.300
Short Term Borrowing
Loans repayable on demand from bank	66.917	140.925
Total	252.017	376.225

Banking Relations :	--
Auditors :
Name :	Mastanaiah and Company Chartered Accountants
Address :	11/1, Arundelpet, Guntur - 522002, Andhra Pradesh, India
Tel. No.:	91-863-2233761
E-Mail :	auditreport@gmail.com
PAN No. :	ABLPC7377A
Enterprise which are controlled by Key Management Personnel :	v Sri Buddhasagar Traders, Chilakaluripet v Prasuna Vamsikrishna Cotton Ginning Mills, Chilakaluripet

CAPITAL STRUCTURE

As on: 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
1200000	Equity Shares	Rs.100/- each	Rs.120.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1169000	Equity Shares	Rs.10/- each	Rs.116.900 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	116.900	116.900
(b) Reserves & Surplus	124.103	110.762
(c) Money received against share warrants	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000
Total Shareholders’ Funds (1) + (2)	241.003	227.662
(3) Non-Current Liabilities
(a) long-term borrowings	211.300	256.400
(b) Deferred tax liabilities (Net)	56.512	59.069
(c) Other long term liabilities	0.000	0.000
(d) long-term provisions	1.723	0.697
Total Non-current Liabilities (3)	269.535	316.166
(4) Current Liabilities
(a) Short term borrowings	66.917	140.925
(b) Trade payables	7.597	11.226
(c) Other current liabilities	50.144	44.752
(d) Short-term provisions	6.807	8.720
Total Current Liabilities (4)	131.465	205.623
TOTAL	642.003	749.451
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	412.577	424.605
(ii) Intangible Assets	0.163	0.000
(iii) Capital work-in-progress	5.721	0.854
(iv) Intangible assets under development	0.000	0.000
(b) Non-current Investments	0.003	0.000
(c) Deferred tax assets (net)	0.000	0.000
(d) Long-term Loan and Advances	9.063	6.342
(e) Other Non-current assets	27.885	30.475
Total Non-Current Assets	455.412	462.276
(2) Current assets
(a) Current investments	0.000	0.000
(b) Inventories	125.551	224.949
(c) Trade receivables	19.156	14.256
(d) Cash and cash equivalents	0.218	0.500
(e) Short-term loans and advances	9.963	10.370
(f) Other current assets	31.703	37.100
Total Current Assets	186.591	287.175
TOTAL	642.003	749.451

SOURCES OF FUNDS		31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		116.900
2] Share Application Money		0.016
3] Reserves & Surplus		76.869
4] (Accumulated Losses)		0.000
NETWORTH		193.785
LOAN FUNDS
1] Secured Loans		387.336
2] Unsecured Loans		18.826
TOTAL BORROWING		406.162
DEFERRED TAX LIABILITIES		41.839
TOTAL		641.786
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		447.888
Capital work-in-progress		0.000
INVESTMENT		0.000
DEFERREX TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	129.253
	Sundry Debtors	13.301
	Cash & Bank Balances	5.431
	Other Current Assets	0.543
	Loans & Advances	58.371
Total Current Assets		206.899
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	0.772
	Other Current Liabilities	7.919
	Provisions	4.310
Total Current Liabilities		13.001
Net Current Assets		193.898
MISCELLANEOUS EXPENSES		0.000
TOTAL		641.786

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	526.376	471.227	406.106
		Other Income	1.758	2.306	1.826
		TOTAL	528.134	473.533	407.932
Less	EXPENSES
		Office Expenses
		Administrative Expenses
		Advertising Expenses
		TOTAL	450.533	355.216	319.778
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		77.601	118.317	88.154
Less	FINANCIAL EXPENSES		37.516	30.676	36.909
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		40.085	87.641	51.245
Less/ Add	DEPRECIATION/ AMORTISATION		27.018	26.379	26.208
	PROFIT BEFORE TAX		13.067	61.262	25.037
Less	TAX		(0.274)	18.754	9.247
	PROFIT AFTER TAX		13.341	42.508	15.790
	EARNINGS IN FOREIGN CURRENCY
		FOB value of Export	214.794	45.235	22.530
	TOTAL EARNINGS		214.794	45.235	22.530
	IMPORTS
		Stores & Spares	NA	0.337	1.618
	TOTAL IMPORTS		NA	0.337	1.618
	Earnings Per Share (Rs.)		11.41	29.34	13.51

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	2.53	8.97	3.87
Net Profit Margin (PBT/Sales)	(%)	2.48	13.00	6.16
Return on Total Assets (PBT/Total Assets}	(%)	2.05	8.18	3.82
Return on Investment (ROI) (PBT/Networth)		0.05	0.27	0.13
Debt Equity Ratio (Total Debt /Networth)		1.15	1.74	2.09
Current Ratio (Current Asset/Current Liability)		1.42	1.40	15.91

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	----------------------
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	----------------------
22]	Litigations that the firm / promoter involved in	----------------------
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	----------------------
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

UNSECURED LOAN:

Particulars	31.03.2012 [Rs. in Millions]	31.03.2011 [Rs. in Millions]
Long Term Borrowing
Loan and advance from related parties	26.200	21.100
Total	26.200	21.100

INDEX CHARGES:

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	90128807	12/01/2013 *	449,400,000.00	State Bank of India	Specialised Commercial Branch, Kannavarithota, Guntur, Andhra Pradesh - 522004, INDIA	B67467266
2	90262660	25/07/2005 *	148,500,000.00	STATE BANK OF INDIA	COMMERCIAL BRANCH, KANNAVARITOTHA, GUNTUR, Andhra Pradesh, INDIA	-

* Date of charge modification

REVIEW OF OPERATIONS:

The Company recorded a net turnover of Rs.526.376 millions for the year 2011-12 as against Rs.471.226 millions during the year 2010-11.The PBDIT for the year 2011-12 is Rs.77.601 millions as against Rs.118.317 millions for the year 2010-11.

FUTURE OUTLOOK:

The financial year 2011-12 has been one of the worst for the textile industry globally. Unprecedented fluctuations in the cotton prices resulted in a massive erosion of the cotton inventory value. Coupled with this, was the continuous decline in yarn demand globally, resulting is very low yarn prices. In spite of these upheavals, by judicious use of resources, spinning viable counts and proper sales planning, the company could post a modest profit and operate viably. Thus it has been able to protect its reserves this financial year.

FIXED ASSETS:

v Freehold Land

v Factory Buildings

v Non Factory Buildings

v Fire and Electrical Equipment

v Plant and Machinery

v Air Conditioner

v Furniture and Fixtures

v Office and Other Equipment

v Vehicles

v Computers and Peripherals

v Well and Water

v Canteen Equipment

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.66.89
UK Pound	1	Rs.103.95
Euro	1	Rs.88.09

INFORMATION DETAILS

Report Prepared by :

ANK

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	4
--RESERVES	1~10	5
--CREDIT LINES	1~10	4
--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
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		43

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

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.