MIRA INFORM REPORT

Report Date :

12.04.2014

IDENTIFICATION DETAILS

Name :	PRECOT MERIDIAN LIMITED (w.e.f. 28.12.2006)
Formerly Known As :	PRECOT MILLS LIMITED
Registered Office :	“SUPREM”, Post Box No.7161, 737 Green Fields, Puliakulam Road, Coimbatore – 641 045, Tamilnadu
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	02.06.1962
Com. Reg. No.:	18-001183
Capital Investment / Paid-up Capital :	Rs.80.000 millions
CIN No.: [Company Identification No.]	L17111TZ1962PLC001183
TAN No.: [Tax Deduction & Collection Account No.]	CMBP03135G
PAN No.: [Permanent Account No.]	AABCP3038K
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is engaged in manufacturing and selling textile products.
No. of Employees :	Information declined by the management.

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 5590000
Status :	Satisfactory
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track record. General financial position of the company is satisfactory. Trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered normal for business dealings at usual trade terms and conditions. Note: Not traded on BSE for last 30 days.

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 – December 1, 2013

Country Name	Previous Rating (30.09.2013)	Current Rating (01.12.2013)
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

India’s current account deficit for the fiscal third quarter ended September 2013 narrowed to $4.2 billion or 0.9 % of the gross domestic product from $31.9 billion or 6.5 % of GDP a year earlier, thanks to a pick-up in exports and moderation in gold imports. Manufacturing activity and new orders in India showed their strongest growth in a year in February. The news comes as a relief after data showed Asia’s third largest economy grew by a slower-than-expected 4.7 % annually in the three months through December. The HSBC Manufacturing Purchasing Managers’ Index which gauges the business activity of India’s factories but not its’ utilities, rose to 52.5 in February, its highest in a year from 51.4 in January. Overall new orders for factory goods which rose to a one-year high of 54.9 contributed to the surge. China has emerged as India’s biggest trading partner in the current financial year replacing the United Arab Emirates and pushing it to the third spot. India-China trade has reached $49.5 billion with a 8.7 % share in India’s total trade. The US comes second at $46 billion with 8.1 % share during the first nine months of the current financial year.

The Reserve Bank of India has granted an additional nine months to the public to exchange currency notes printed before 2005 including Rs 500 and Rs 1,000 denominations, pushing the deadline to January 1, 2015. A day before dates for the Lok Sabha polls were announced, the government decided to hike interest rates on fixed deposit schemes offered by post offices up to 0.2 per cent. The new rates will be effective April, 1. The Supreme Court will resume hearing on March, 11 Nokia’s appeal against a ruling over transferring ownership of its local mobile phones plant which is the subject of a tax dispute to Microsoft Corp.

In the last days of the current Government, another scam has surfaced. The defence ministry has ordered a probe into Hindustan Aeronautics Limited’s contracts from Britain’s Rolls-Royce Holdings worth at least $ 1.2 billion. The Central Bureau of Investigation will look into allegations that over $80 million was paid in kickbacks in a deal signed in 2011. India has asked Boeing Co. to find a solution for problems with state-owned Air India’s 787 Dreamliners. The aircraft has experienced a series of malfunctions since its debut in 2011.

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Long Term Bank Facilities: BBB-
Rating Explanation	Moderate degree of safety it carry moderate credit risk.
Date	November 18, 2013

Rating Agency Name	CARE
Rating	Short Term Bank Facilities: A3
Rating Explanation	Moderate degree of safety it carry higher credit risk.
Date	November 18, 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.

INFORMATION DECLINED

Management non-cooperative

(Tel. No.: 91-422-4321100)

LOCATIONS

Registered Office :	“SUPREM”, Post Box No.7161, 737 Green Fields, Puliakulam Road, Coimbatore – 641 045, Tamilnadu, India
Tel. No.:	91-422-4321100
Fax No.:	91-422-4321200
E-Mail :	secretary@precot.com Yarn – Domestic : sales@precot.com Yarn – Exports: exports@precot.com Fabric : wvg@precot.com Investors : secretary@precot.com Careers : hr@precot.com
Website :	http://www.precot.com
PLANT LOCATIONS:
Spinning Units :	Located at: Kanjikode, Palakkad, Kerala, India Kodigenahalli, Hindupur, Andhra Pradesh, India Nanjegoundanpudur, Pollachi, Tamilnadu, India Chandrapuram, Walayar, Kerala, India
Dyeing Unit :	Located at: Gowribidnur, Kolar, Karnataka, India
Non-woven Unit :	Located at: Hassan, Karnataka, India
Marketing Office :	Located at: · Bangalore
Depot :	Located at: · Tirupur · Mumbai · Delhi · Kolkata

DIRECTORS

AS ON 31.03.2013

Name :	Mr. D. Sarath Chandran
Designation :	Chairman
Qualification :	B. Sc. (Hons), MBA
Name :	Mr. Ashwin Chandran
Designation :	Managing Director
Qualification :	B. Sc. (Hons), MBA
Name :	Mr. Prashanth Chandran
Designation :	Executive Director
Qualification :	B. Engg.
Name :	Mr. Jairam Varadaraj
Designation :	Director
Name :	Mr. A Ramkrishna
Designation :	Director
Date of Birth/Age :	69 Years
Qualification :	B. Sc., FCA
Expertise :	Chartered Accountant
Director of Company since:	1998
Directorship :	Suprem Textiles Processing Limited Multiflora Processing (CBE) Limited Precot Meridian Energy Limited Cotton Sourcing Company Limited
Name :	Mr. C N Srivatsan
Designation :	Director
Date of Birth/Age :	56 Years
Qualification :	Chartered Accountant
Expertise :	25 years as management consultant
Director of Company since:	2004
Directorship :	Kar Mobiles Limited Rane Engine Valve Limited
Name :	Mr. Sumanth Ramamurthi
Designation :	Director
Qualification :	BS Electrical Engineer
Name :	Mr. Suresh Jagannathan
Designation :	Director
Name :	Mr. Vijay Mohan
Designation :	Director
Date of Birth/Age :	65 years
Qualification :	B E (Mech), MMS
Expertise :	38 years in the automobile industry
Director of Company since:	1989
Directorship :	Pricol Limited Pricol Castings Limited Pricol Holdings Limited Pricol Packaging Limited Pricol Properties Limited Pricol Technologies Limited Xenos Automotive Limited Pricol Medical Systems Limited Pricol Components Limited
Name :	Mr. Vijay Venkataswamy
Designation :	Director
Qualification :	MBA
Name :	Mr. K Ajit Kumar (Nominee of EXIM Bank)
Designation :	Director

KEY EXECUTIVES

Name :	Mr. M R Siva Shankar
Designation :	Head - Finance and Accounts
Name :	Mr. C Murugesh
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2013

	Category of Shareholders	No. of Shares	Percentage of Holding
(A)	SHAREHOLDING OF PROMOTER AND PROMOTER GROUP
(1)	Indian
(a)	Individuals/Hindu Undivided Family	7332137	61.1011
	Sub-Total (A)(1)	7332137	61.1011
(2)	Foreign
	Sub-Total (A)(2)	0	0.00
	Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)	7332137	61.1011
(B)	PUBLIC SHAREHOLDING
(1)	INSTITUTIONS
(a)	Mutual Funds/UTI	237887	1.9824
(b)	Financial Institutions/ Banks	1125	0.0094
(c)	Foreign Institutional Investors	249	0.0021
	Sub-Total (B)(1)	239261	1.9938
(2)	NON-INSTITUTIONS
(a)	Bodies Corporate	425547	3.5462
(b)	Individual
(b)	Individual shareholders holding nominal share capital up to Rs.0.100 million	2685550	22.3796
	Individual shareholders holding nominal share capital in excess of Rs.0.100 million	1242265	10.3522
(c)	Any Other (Total)
	Clearing Member	6471	0.0539
	Market Maker	202	0.0017
	Non Resident Indians (Repat)	14922	0.1244
	Non Resident Indians (Non-Repat)	4804	0.0400
	Hindu Undivided Family	48841	0.4070
	Sub-Total (B)(2)	4428602	36.9050
	Total Public Shareholding (B)= (B)(1)+(B)(2)	4667863	38.8989
	TOTAL (A)+(B)	12000000	100.00
(C)	SHARES HELD BY CUSTODIANS AND AGAINST WHICH DEPOSITORY RECEIPTS HAVE BEEN ISSUED	0	0.00
	GRAND TOTAL (A)+(B)+(C)	12000000	100.00

BUSINESS DETAILS

Line of Business :	Subject is engaged in manufacturing and selling textile products.
Products :	Combed Cotton Yarns Polyester Sewing Threads Slub Yarns Organic Yarns Compact Yarns Elitwist Yarns Polyester Cotton Blends Garment Products

PRODUCTION STATUS (AS ON 31.03.2011):

Particulars	Unit	Licensed Capacity	Installed Capacity
Spindles	Nos.	NA	218208
Rotors	Nos.	NA	1632
Looms	Nos.	NA	117

GENERAL INFORMATION

No. of Employees :

Information declined by the Management.

Bankers :

• ICICI Bank Limited, Green Field, Coimbatore, India
• State Bank of India
• Export Import Bank of India
• Yes Bank
• IDBI Bank
• Corporation Bank
• Andhra Bank

Facilities :

Secured Loans	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Term loans from Banks
- Rupee Loan	2111.367	1114.384
- Foreign Currency Loan	129.849	220.830
SHORT TERM BORROWINGS
Working Capital Loans
From Banks
- Rupee Loan	956.241	613.998
- Foreign Currency Loan	392.452	299.408
Total	3589.909	2248.620

Notes:

Long Term Borrowings

1. a) Term loan from SBI, ICICI, Andhra Bank, Export Import Bank of India and IDBI Bank are secured by way of pari passu first charge on entire movable and immovable assets of the company and pari passu second charge on current assets of the company.

b) Term loan from Yes Bank is secured by way of pari passu first charge on entire movable fixed assets.

c) Term loan from IDBI Bank, Dubai Branch is secured by way of exclusive first charge on the windmills and related equipments, systems and assets located at Eragampatti and Manurpalayam Village in Tirupur district.

2. The loans are repayable in monthly/ quarterly/ half-yearly instalments.

3. In respect of the above, Rupee Term Loans carry interest ranging from 7.5% p.a. to 13.65% p.a. and Foreign Currency Term Loans carry interest ranging from 1.6% p.a. to 3% p.a. plus applicable LIBOR.

4. Term loan from ICICI Bank for Rs.1200.000 millions is secured by way of exclusive first charge on the assets of Technical Textile unit at Hassan, Karnataka.

Short Term Borrowings

1. Working capital loans from SBI, Andhra Bank, Corporation Bank, IDBI, ICICI, Yes Bank and The South Indian Bank are secured by way of pari passu first charge on current assets of the company and pari passu second charge on entire immovable assets of the company.

2. In respect of the above, working capital rupee loans carry interest ranging from 9.75% p.a. to 15.25% p.a. and working capital foreign currency loan, buyers credit and foreign currency loans carry interest ranging from 1.4% p.a. to 4.25% p.a. plus applicable LIBOR.

Banking Relations :	--
Auditors 1 :
Name :	Haribhakti and Company Chartered Accountants
Auditors 2 :
Name :	K S G Subramanyam and Company Chartered Accountants
Subsidiary Companies :	Suprem Textiles Processing Limited Multiflora Processing (CBE) Limited Precot Meridian Energy Limited Benwood Corporation Sdn Bhd
Other Related Parties :	Suprem Associates (Partnership Firm)

CAPITAL STRUCTURE

AS ON 20.09.2013

Authorised Capital :

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

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
12000000	Equity Shares	Rs.10/- each	Rs.120.000 millions

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
9000000	Equity Shares	Rs.10/- each	Rs.90.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8000000	Equity Shares	Rs.10/- each	Rs.80.000 millions

i) Terms/rights attached to equity shares:

The company has only one class of issued shares referred to as equity shares having a par value of Rs.10 each. Each holder of equity shares is entitled to one vote per share. The dividend (except in case of interim dividend) proposed by the Board of Directors, if any, is subject to the approval of shareholders in the Annual General Meeting.

ii) The reconciliation of the number of shares outstanding is set out below:

Particulars	As at 31.03.2013
	Number	Amount (Rs. in Millions)
Equity Shares
Equity Shares at the beginning of the year	7475000	74.750
Add: Shares Issued during the year	525000	5.250
Equity Shares at the end of the year	8000000	80.000

The Company had allotted 525000 Convertible Share Warrants of Rs.98 each on 16.3.2012 to its Directors on a preferential basis. As per the terms of issue, the warrant holders paid an amount equivalent to 25% of the total consideration on the date of allotment of warrants. On 30.06.2012, the warrant holders exercised their option to take equity shares against the warrants held by them, consequent to which 525,000 equity shares of Rs.10/- each has been allotted at a premium of Rs.88/- per share, in accordance with the provisions of Section 81(1A) of the Companies Act, 1956 and SEBI (ICDR) Regulations, 2009. The lock-in of shares acquired by exercise of warrants shall be subject to SEBI (ICDR) Regulations 2009.

iii) The details of Shareholders holding more than 5% of Shares:

Name of Shareholder	As at 31.03.2013
	No. of Shares Held	% of holding
Equity Shares
D Sarath Chandran	1893080	23.67%
Ashwin Chandran	1538305	19.23%
Prashanth Chandran	1314595	16.43%

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital	80.000	74.750	69.500
(b) Reserves & Surplus	1317.511	1103.603	1585.466
(c) Money received against share warrants	0.000	12.863	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	1397.511	1191.216	1654.966
(3) Non-Current Liabilities
(a) Long-term borrowings	2245.353	1344.653	1015.081
(b) Deferred tax liabilities (Net)	104.222	0.000	194.932
(c) Other long term liabilities	0.000	0.000	0.000
(d) Long-term provisions	18.323	9.211	0.000
Total Non-current Liabilities (3)	2367.898	1353.864	1210.013
(4) Current Liabilities
(a) Short term borrowings	1748.693	1313.406	2541.230
(b) Trade payables	263.304	288.810	324.520
(c) Other current liabilities	658.605	487.369	515.235
(d) Short-term provisions	23.720	61.269	152.287
Total Current Liabilities (4)	2694.322	2150.854	3533.272
TOTAL	6459.731	4695.934	6398.251
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	2078.885	2305.385	2174.403
(ii) Intangible Assets	4.380	5.103	6.854
(iii) Capital work-in-progress	1644.302	121.619	26.799
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	259.498	309.198	336.485
(c) Deferred tax assets (net)	0.000	27.580	0.000
(d) Long-term Loan and Advances	151.936	112.236	79.944
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	4139.001	2881.121	2624.485
(2) Current assets
(a) Current investments	0.000	0.000	10.002
(b) Inventories	1486.688	1321.741	3153.901
(c) Trade receivables	436.954	307.840	390.570
(d) Cash and cash equivalents	103.571	55.593	71.301
(e) Short-term loans and advances	57.914	54.720	104.268
(f) Other current assets	235.603	74.919	43.724
Total Current Assets	2320.730	1814.813	3773.766
TOTAL	6459.731	4695.934	6398.251

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from Operations	6671.715	5940.404	5778.460
		Other Income	75.490	86.176	31.781
		TOTAL (A)	6747.205	6026.580	5810.241
Less	EXPENSES
		Cost of materials consumed	3404.471	3945.739	3439.105
		Changes in inventories of finished goods and work-in-progress	80.583	265.999	(456.172)
		Employee benefits expense	643.806	542.309	516.172
		Other expenses	1782.195	1412.103	1455.864
		TOTAL (B)	5911.055	6166.150	4954.969
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		836.150	(139.570)	855.272
Less	FINANCIAL EXPENSES (D)		261.186	287.186	145.614
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		574.964	(426.756)	709.658
Less/ Add	DEPRECIATION/ AMORTISATION (F)		303.224	299.091	269.565
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		271.740	(725.847)	440.093
Less	TAX (H)		64.872	(197.513)	114.075
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		206.868	(528.334)	326.018
	EARNINGS IN FOREIGN CURRENCY
		Export of Goods – FOB Value	1678.722	1480.646	1173.671
		Dividend on Foreign Subsidiary	19.284	37.857	2.414
	TOTAL EARNINGS		1698.006	1518.503	1176.085
	IMPORTS
		Raw Materials	30.934	14.196	3.130
		Components and Spares	27.520	23.545	37.093
		Capital Goods	937.750	186.641	7.100
	TOTAL IMPORTS		996.204	224.382	47.323
	Earnings/ (Loss) Per Share (Rs.)		26.29	(75.76)	46.91

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	3.07	(8.77)	5.61
Net Profit Margin (PBT/Sales)	(%)	4.07	(12.22)	7.62
Return on Total Assets (PBT/Total Assets}	(%)	5.96	(17.13)	7.29
Return on Investment (ROI) (PBT/Networth)		0.19	(0.61)	0.27
Debt Equity Ratio (Total Debt/Networth)		2.86	2.23	2.15
Current Ratio (Current Asset/Current Liability)		0.86	0.84	1.07

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns.)	(INR in Mlns.)	(INR in Mlns.)
Share Capital	69.500	74.750	80.000
Reserves & Surplus	1585.466	1103.603	1317.511
Money received against share warrants	0.000	12.863	0.000
Net worth	1654.966	1191.216	1397.511
long-term borrowings	1015.081	1344.653	2245.353
Short term borrowings	2541.230	1313.406	1748.693
Total borrowings	3,556.311	2,658.059	3,994.046
Debt/Equity ratio	2.149	2.231	2.858

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	5778.460	5940.404	6671.715
		2.803	12.311

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	5778.460	5940.404	6671.715
Profit	326.018	(528.334)	206.868
	5.64%	(8.89%)	3.10%

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 Loans	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Deferred payment liabilities
- Sales Tax Deferral loan	4.137	9.439
SHORT TERM BORROWINGS
From Bank
- Rupee Loan	400.000	400.000
Total	404.137	409.439

Notes:

Short Term Borrowings

Unsecured short term loan from Axis Bank carries interest at 11% p.a. for which the company has extended a corporate guarantee.

ECONOMIC OVERVIEW AND INDUSTRY REVIEW

During the fiscal year their country could not achieve the targeted economic growth of 7.6%. Global economic slowdown, high inflation, rising interest rates, lack of satisfactory capital inflows have cumulatively led to a decline in the growth rate to 5%. High inflation was a cause of worry with wholesale price index hovering over 7%.

For the textile industry, it was a year of recovery and consolidation after the huge losses it had suffered in the previous year on account of highly volatile cotton prices. Raw Material prices remained relatively stable during the year and the demand for textile products improved from the second quarter and continued through the third and fourth quarters. Chinese demand for yarn was strong throughout the year which resulted in yarn exports from India crossing 1000 million kgs during the financial year. Despite pricing pressure, demand for fabrics, apparels and made-ups also remained stable in both, the export and domestic markets.

REVIEW OF OPERATIONS

In line with the industry trend, the financial performance of the company saw considerable improvement in the year compared to the historic loss during the previous year. Power shortage in Tamilnadu continued to affect the company resulting in a higher reliance on self generated power at a very high cost. Andhra Pradesh and Kerala also faced power shortages which forced the company to procure traded power at rates higher than the Electricity Board rates. Apart from power, other input costs such as salaries and wages, spares, consumables and freight went up significantly. Financial costs were also high as the RBI continued its policy of increasing interest rates. The company was able to partly offset these cost increases through higher realization in yarn prices and improved operational efficiencies.

As the shareholders are aware, the performance of the yarn dyed shirting fabrics business has continued to be unsatisfactory. The Board therefore took a decision to exit this business and sought the approval of the shareholders. The shareholders gave their approval through a postal ballot and accordingly the company is in the process of exiting this business. This will be completed in the FY 2013-14.

The turnover of the company has increased by around 12% over the previous year in value terms, resulting in a profit from operations of 500.000 millions as against a loss of 510.000 millions in the previous year.

During the year the company has incurred 110.000 millions as capital expenditure towards modernisation of existing plant and machinery.

TECHNICAL TEXTILES

As mentioned in the previous Directors report, the company is setting up a greenfield technical textile plant with state-of-the-art technology in the Textile Special Economic Zone at Hassan in the State of Karnataka. Trial production was taken in May 2013 and commercial production will commence in July 2013. The plant is anticipated to attain its full capacity utilization by the end of the current fiscal year and the products manufactured will be in compliance with international health standards. The total capital expenditure for the project is expected to be 1750.000 millions.

PREFERENTIAL ALLOTMENT OF EQUITY SHARES AND CONVERTIBLE SHARE WARRANTS

During the year, the company has received 38.600 millions from the promoters towards the balance payment of convertible share warrants and they have exercised their rights to convert 525000 convertible share warrants to 525000 equity shares at a price of 98 per share. The company has raised totally 102.900 millions from the preferential issue. The funds have been utilized for working capital requirements. There is no outstanding warrant as on 31.03.2013.

POSTAL BALLOT

During the year, two ordinary resolutions were passed through postal ballot under section 293(1)(a) of the companies act, 1956 with requisite majority to dispose of the two undertakings engaged in manufacture of yarn dyed shirting fabrics.

OUTLOOK FOR THE CURRENT YEAR

The cotton season 2012-13 opened with prices at around 34,000 per candy, and as the season progressed it increased to 39,000 in March 2013. Since then cotton prices have been stable around this level. Yarn prices which peaked in March 2013 have since then shown signs of weakness. The overall demand for yarns and fabrics, in both, export and domestic markets, are currently sluggish and there is a lack of confidence in the entire supply chain. With the financial turmoil in the Euro zone continuing and the US economy limping back to recovery, a quick turnaround in export demand looks unlikely. Their domestic economy continues to struggle with high inflation and slow growth, factors which are strongly affecting demand for textiles and other consumer goods.

The Government anticipates that their country's economy would improve from the second half of 2013 through its proposed economic reforms and RBI's supportive interest rate cuts.

The company's exit from the fabric business will see an improvement in the bottom line. As has been the practice of the company, it continues to be prudent in its expenditure and will focus on maximizing its capacity utilization and efficiency.

SUBSIDIARY COMPANIES

The Company has four subsidiaries namely 1.Benwood Corporation Sdn Bhd 2. Suprem Textile Processing Limited 3. Multiflora Processing (CBE) Limited and 4. Precot Meridian Energy Limited.

During the year Benwood Corporation Sdn Bhd, a subsidiary incorporated in Malaysia, has ceased its operations and going ahead with the winding up process which is anticipated to be completed in FY 2013-14.

CONTINGENT LIABILITIES IN RESPECT OF:

Particulars	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
Bills discounted	275.243	290.413
Guarantees	21.301	12.339
Letters of credit outstanding	122.580	938.931

STATEMENT OF STANDALONE UNAUDITED RESULTS FOR THE QUARTER AND NINE MONTHS PERIOD ENDED 31.12.2013

(Rs. in Millions)

Sr. No.	Particulars	Quarter ended		Nine months ended
		31.12.2013	30.09.2013	31.12.2013
		Unaudited	Unaudited	Unaudited
	Part I
1	Income from operations
	(a) Net sales / income from operation (net of excise duty)	1768.300	1963.000	5315.200
	(b) Other operating income	43.600	45.100	128.700
	Total income from operations (net)	1811.900	2008.100	5443.900
2	Expenses
	(a) Cost of materials consumed	1104.400	948.700	3086.900
	(b) Purchase of stock in trade	0.000	0.000	0.000
	(c) Changes in inventories of finished goods, work-in-progress and stock in trade	(124.400)	90.200	(233.400)
	(d) Employee benefits expense	180.100	186.800	527.000
	(e) Depreciation and amortisation expenses	107.400	105.400	287.200
	f) Power and fuel	226.500	191.300	642.900
	g) Other expenses	252.100	266.500	738.700
	Total expenses	1746.100	1788.900	5049.300
3	Profit / (loss) from operations before other income, finance costs and exceptional Items (1-2)	65.800	219.200	394.600
4	Other income	3.200	10.500	21.900
5	Profit / (loss) from ordinary activities before finance costs and exceptional items(3+4)	69.000	229.700	416.500
6	Finance costs	84.300	80.000	231.400
7	Profit / (loss) from ordinary activities after finance costs but before exceptional Items (5-6)	(15.300)	149.700	185.100
8	Exceptional items	--	--	--
9	Profit / (loss) from ordinary activities before tax (7+8)	(15.300)	149.700	185.100
10	Tax expenses
	- Current Tax	(3.300)	34.500	42.800
	- Deferred Tax	(26.200)	(43.400)	(59.000)
	- MAT Credit	3.300	(34.500)	(42.800)
11	Net profit / (loss) from ordinary activities after tax (9-10)	10.900	193.100	244.100
12	Extraordinary item (net of tax expense )	--	--	14.500
13	Net profit / (loss) for the period (11-12)	10.900	193.100	258.600
14	Paid-up equity share capital (Face value Rs.10 per share)	120.000	80.000	120.000
15	Reserve excluding revaluation reserves as per balance sheet of previous accounting year	--	--	--
16	Earnings Per Share (EPS) (Basic and Diluted) (before & after extraordinary items) (of Rs.10/- each (not annualised)
	- Basic	0.91	16.09	20.34
	- Diluted	0.91	16.09	21.55
Part Il
A	Particulars of shareholding
1	Public shareholding
	- Number of shares	4667863	3111907	4667863
	- Percentage of shareholding	38.90	38.90	38.90
2	Promoters and promoters group shareholding
	a. Pledged / encumbered
	- Number of shares	--	--	--
	- Percentage of shares (as a % of the total shareholding of Promoter and Promoter group)	--	--	--
	- Percentage of shares (as a % of the total share capital of the company)	--	--	--
	b. Non - encumbered:
	- Number of shares	7332137	4888093	7332137
	- Percentage of shares (as a % of the total shareholding of promoter and promoter group)	100	100	100
	- Percentage of shares (as a % of the total share capital of the company)	61.10	61.10	61.10

B	Investor complaints	Quarter ended 31.12.2013
	Pending at the beginning of the quarter	Nil
	Received during the quarter	7
	Disposed of during the quarter	7
	Remaining unresolved at the end of the quarter	Nil

Notes:

1. The operations of the company primarily relate to one business segment viz, Textiles
2. Figures for the earlier periods have been regrouped/ reclassified to correspond to the figures for the current period.
3. The Company has obtained an approval from the shareholders under section 293(1) (a) of the Company Act 1956 to dispose-off the weaving and processing divisions. Effect is being given in the financial statements as and when disposal happens and has been shown under extraordinary items.
4. The above results have been subjected to a limited review by the Statutory Auditors, reviewed by the Audit Committee and approved by the Board of Directors.

FIXED ASSETS:

Tangible Assets

· Land

· Building

· Plant and Equipment

· Vehicles

· Office Furniture

· Computer

Intangible Assets

· ERP Expenditure and Software

WEBISTE DETAILS:

PROFILE

Subject, a manufacturer of Yarn and Fabrics, was established in the year 1962 by Mr. V.N. Ramachandran and Mr. N. Damotharan, technocrats in the field of textile technology. Subject has been in the field of yarn and fabric production for nearly five decades and has gained extensive expertise and knowledge across various verticals. Products manufactured include cotton yarn, sewing threads, fabrics and garments. Subject is a leading player in the textile industry, with an annual turnover of Rs.6000.000 millions.

Brief history and key milestones

Subject started its first production in 1964 with an initial capacity of 12,096 spindles at Kanjikode, Kerala. Subject now has units in the four southern states of India viz., Tamilnadu, Kerala, Andhra Pradesh and Karnataka with the total spinning capacity of 2,25,000 spindles, 1728 rotors and 117 looms.

KEY MILESTONES

· From an initial capacity of 12,096 Spindles at Kanjikode, Kerala (A-Unit) in 1964, now the capacity of the unit is 57,600 spindles.

· In 1983, the second unit (B-Unit) was set up at Hindupur, Andhra Pradesh with an initial capacity of 28,800 Spindles and the current capacity is 69,120 spindles.

· In 1992, the third unit (C-Unit) was set up at Walayar, Kerala as a 100% Export Oriented Unit with a capacity of 12,096 Spindles and the current capacity is 25,344 spindles.

· In 1995, an OE Unit (D Unit) was set up at Walayar adjacent to its third Unit with a capacity of 1344 Rotors.

· In 1998, a yarn dyeing Unit (K Unit) was set up at Kolar, Karnataka to manufacture polyester sewing threads and its capacity is 7 tons per day.

· In 2001, a modern weaving plant at Sethumadai near Pollachi was set up to manufacture yarn-dyed fabrics.

· In January 2004, yarn dyeing operations were started at Perundurai, which caters to the needs of the Sethumadai unit.

· In 2006, Meridian Industries merged with Precot Mills and the name was changed to Precot Meridian Limited, and the current capacity is 66,154 spindles.

· Subject is looking towards green power generation and has invested in 17 Windmills. These windmills cater 50% of the power requirements of units located in Tamilnadu.

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 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.60.27
UK Pound	1	Rs.101.10
Euro	1	Rs.83.74

INFORMATION DETAILS

Information Gathered by :	PDT
Analysis Done by :	DIV
Report Prepared by :	SMN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--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	YES
--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
--	NB	New Business	--

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.