MIRA INFORM REPORT

Report No. :	356291
Report Date :	24.12.2015

IDENTIFICATION DETAILS

Name :	SARLA PERFORMANCE FIBERS LIMITED
Registered Office :	Survey No. 59/1/4, Amli Piparia Industrial Estate, Silvassa - 396230, Dadra and Nagar Haveli [U.T.]
Tel. No.:	91-22-22834116/ 40322786
Country :	India
Financials (as on) :	31.03.2015
Date of Incorporation :	23.11.1993
Com. Reg. No.:	54-000056
Capital Investment / Paid-up Capital :	Rs. 83.503 Million
CIN No.: [Company Identification No.]	L31909DN1993PLC000056
IEC No.:	0393057267
TAN No.: [Tax Deduction & Collection Account No.]	Not Available
PAN No.: [Permanent Account No.]	AABCS1322B
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing and Processing of Synthetic Yarn and also into Wind Power Generation. (Registered Activity)
No. of Employees :	157 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (52)

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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject was established in the year 1993 engaged into textiles business. The company offers polyester textures yarn, polyamide textured yarn, polyester sewing thread, covered yarn and high-tenacity yarn in raw white, black and dyed colors. For the financial year ended 2015, company has reported 8.58% revenue growth as compared to previous year revenue and it has maintain decent profitability margins at 10.05% during the year under review. The rating continues to take into account company’s favorable financial profile supported by reasonable capital structure along with healthy coverage and return indicators. The rating also takes comfort from the long standing experience of the promoter in the industry, marketing support from overseas group concerns and established as well as well diversified customer base. The rating however is constrained by company’s highly working capital intensive nature of operations, vulnerability of the margins to raw material price fluctuations and exposure to severe competition from players in the unorganized as well as organized sectors which limits the pricing power of the company. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitment. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Short term Fund based limits = A2 (Suspended)
Rating Explanation	Strong degree of safety and low credit risk.
Date	October 2015

Reason for Suspension: Absence of adequate information.

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 31-03-2015.

INFORMATION DECLINED BY

Name :	Ms. Ruti Agarwal
Designation :	Chartered Accountants/ Consultants
Contact No.:	91-22-22834116
Date :	21.12.2015

LOCATIONS

Registered Office/ Factory 1 :	Survey No. 59/1/4, Amli Piparia Industrial Estate, Silvassa - 396230, Dadra and Nagar Haveli [U.T.], India
Tel. No.:	Not Available
Fax No.:	Not Available
E-Mail :	export@sarlafibers.com neha@sarlafibers.com sknayak@sarlafibers.com investors@sarlafibers.com
Website :	http://www.sarlafibers.com
Corporate Office :	304, Arcadia, Nariman Point, Mumbai – 400021, Maharashtra, India
Tel. No.:	91-22-22834116/ 40322786
Fax No.:	91-22-22851728
Factory 2 :	Survey No. 64/2/3/4, 61/2, 62/5, 63/5, 63/7, Amli Piparia Industrial Estate, Silvassa – 396230, Dadra and Nagar Haveli [U.T.], India
Factory 3 :	Shed No. A1/48, 100 Sheds Area, GIDC, Vapi – 396195, Gujarat, India

DIRECTORS

AS ON 31.03.2015

Name :	Mr. Madhusudan Jhunjhunwala
Designation :	Chairman and Whole-time Director
Name :	Mr. Krishnakumar M. Jhunjhunwala
Designation :	Managing Director
Name :	Mr. Arun Vaid
Designation :	Director
Name :	Mr. Jigar A Shah
Designation :	Director
Name :	Mr. Parantap Dave
Designation :	Director
Name :	Mrs. Neha Jhunjhunwala
Designation :	Director
Date of Appointment :	31.03.2015

KEY EXECUTIVES

Name :	Ms. Ruti Agarwal
Designation :	Chartered Accountants/ Consultants
Name :	Mr. Mahendra Sheth
Designation :	Chief Financial Officer and Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2015

Category of Shareholder	Total No. of Shares	As a %
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	3313105	39.68
Bodies Corporate	1296649	15.53
Sub Total	4609754	55.20
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	4609754	55.20
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1320683	15.82
Financial Institutions / Banks	50	0.00
Venture Capital Funds	4000	0.05
Foreign Institutional Investors	97193	1.16
Sub Total	1421926	17.03
(2) Non-Institutions
Bodies Corporate	462558	5.54
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	850608	10.19
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	853899	10.23
Any Others (Specify)	151555	1.81
Non Resident Indians	131155	1.57
Clearing Members	20400	0.24
Sub Total	2318620	27.77
Total Public shareholding (B)	3740546	44.80
Total (A)+(B)	8350300	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	8350300	100.00

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Promoter and Promoter Group

Sl. No.	Name of the Shareholders	Details of Shares held
		No. of Shares held	As a %
1	Madhusudan Jhunjhunwala	1,94,500	2.33
2	Krishnakumar Jhunjhunwala	1,30,000	1.56
3	Kanav K Jhunjhunwala	64,700	0.77
4	Sarladevi M Jhunjhunwala	3,88,400	4.65
5	Satidham Industries Private Limited	12,72,791	15.24
6	Hindustan Cotton Co - Through its partner	21,16,479	25.35
7	Krishnakumar & Sons HUF - Through its Karta	32,500	0.39
8	Madhusudan Jhunjhunwala HUF	3,86,526	4.63
9	Sarla Estate Developers Private Limited	18,358	0.22
10	Harmony Estates Private Limited	5,500	0.07
	Total	46,09,754	55.20

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Public and holding more than 1% of the total number of shares

Sl. No.	Name of the Shareholders	No. of Shares held	Shares as %
1	Anil Kumar Goel	280000	3.35
2	Dalal & Broacha Stock Broking Private Limited	175092	2.10
3	Skandia Global Fund PLC	97193	1.16
4	HSBC Midcap Equity Fund	137028	1.64
5	HDFC Trustee Company Limited	400000	4.79
6	DSP Blackrock Dual Advantage Fund	293257	3.51
7	HDFC Small & Midcap Fund	343817	4.12
	Total	1726387	20.67

BUSINESS DETAILS

Line of Business :	Manufacturing and Processing of Synthetic Yarn and also into Wind Power Generation. (Registered Activity)
Brand Names :	--
Agencies Held :	--
Exports :	Not Divulged
Imports :	Not Divulged
Terms :
Selling :	Not Divulged
Purchasing :	Not Divulged

PRODUCTION STATUS: NOT AVAILABLE

GENERAL INFORMATION

Suppliers :

Reference:	Not Divulged
Name of the Person (Designation):	Not Divulged
Contact Number:	Not Divulged
Since how long known:	Not Divulged
Maximum limit dealt:	Not Divulged
Experience:	Not Divulged
Remark	Not Divulged

Customers :

Reference:	Not Divulged
Name of the Person (Designation):	Not Divulged
Contact Number:	Not Divulged
Since how long known:	Not Divulged
Maximum limit dealt:	Not Divulged
Experience:	Not Divulged
Remark	Not Divulged

No. of Employees :

157 (Approximately)

Bankers :

· Citibank N.A.

· Standard Chartered Bank

· DBS Bank Limited

· IndusInd Bank Limited

· Yes Bank Limited

· Bank of Bahrain and Kuwait, B.S.C.

· Allahabad Bank

· Commonwealth Bank of Australia

· First Rand Bank

· Bank International Indonesia

Bank Name:	Not Divulged
Branch:	Not Divulged
Person Name (with Designation):	Not Divulged
Contact Number:	Not Divulged
Name of Account Holder:	Not Divulged
Account Number:	Not Divulged
Account Since (Date/ Year of A/c Opening):	Not Divulged
Average Balance Maintained (Optional):	Not Divulged
Credit Facilities Enjoyed (CC/OD/Term Loan):	Not Divulged
Account Operation:	Not Divulged
Remarks:	Not Divulged

Facilities :

SECURED LOANS	31.03.2015 (Rs. In Million)	31.03.2014 (Rs. In Million)
LONG-TERM BORROWINGS
From Standard Chartered Bank - Foreign Currency Loan	37.163	87.332
From DBS Bank - Foreign Currency Loan	62.590	106.315
SHORT TERM BORROWINGS
Loans Repayable on Demand
From Banks: - Packing Credit Loan	852.685	468.052
- Foreign Bill Discounting	156.002	204.685
- Buyers Credit	0.000	2.690
- Working Capital Demand Loan	0.000	44.206
Total	1108.440	913.280

Banking Relations :	--
Financial Institution :	· SBICAP Trustee Company Limited 202, Maker Tower, 'E', Cuffe Parade, Colaba, Mumbai - 400005, Maharashtra, India
Auditors :
Name :	Sundarlal, Desai and Kanodia Chartered Accountants
Address :	Mumbai, Maharashtra, India
Memberships :	--
Collaborators :	--
Associates :	· Satidham Industries Private Limited · Hindustan Cotton Co.
Joint Ventures of Subsidiary Company :	· Savitex SA De C.V., Honduras · MRK SA De C.V., Honduras · Sarla Tekstil Filament Sanayi Ticaret A.S.
Subsidiary Companies :	· Sarla Overseas Holding Limited · SarlaFlex Inc
Step down subsidiary company :	Sarla Europe, Lda

CAPITAL STRUCTURE

AS ON 31.03.2015

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs. 10/- each	Rs. 100.000 Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8350300	Equity Shares	Rs. 10/- each	Rs. 83.503 Million

Terms/ rights attached to Equity Shares:

The company has only one class of equity shares having par value of Rs. 10. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

During the year ended 31st March 2015, the amount of per share dividend recognised as distributions to equity shareholders was Rs. 8.00 (31st March 2014 Rs. 7.50)

In the event of liquidation of the company, the holders of the equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Reconciliation of Outstanding Shares:

	31st March 2015 No. of Shares
Opening as on 1st April	69,50,300
Add: Issued during the year	14,00,000
Closing as on 31st March	83,50,300

Details of Shareholders Holding More Than 5% of the Total Share Capital

Name of the Shareholders	31st March 2015 No. of Shares
Hindustan Cotton Company - Through its partners	2,116,479
Satidham Industries Private Limited	1,272,791
HDFC Small and Midcap Fund	743,817
Sarladevi Jhunjhunwala	388,400
Madhusudan Jhunjhunwala (HUF)	386,526

FINANCIAL DATA

[all figures are in Rupees Million]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2015	31.03.2014	31.03.2013
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	83.503	69.503	69.503
(b) Reserves & Surplus	1833.408	1161.188	992.757
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	1916.911	1230.691	1062.260
(3) Non-Current Liabilities
(a) Long-term borrowings	99.753	193.647	280.706
(b) Deferred tax liabilities (Net)	143.982	150.488	139.973
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	0.000	0.000	0.000
Total Non-current Liabilities (3)	243.735	344.135	420.679
(4) Current Liabilities
(a) Short term borrowings	1008.687	719.633	678.604
(b) Trade payables	73.468	86.276	53.660
(c) Other current liabilities	245.984	221.182	196.362
(d) Short-term provisions	89.014	65.177	52.246
Total Current Liabilities (4)	1417.153	1092.268	980.872
TOTAL	3577.799	2667.094	2463.811
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	980.164	1015.098	943.294
(ii) Intangible Assets	0.000	0.000	0.000
(iii) Capital work-in-progress	0.000	8.782	97.525
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	77.972	77.972	23.813
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	525.788	96.614	36.509
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	1583.924	1198.466	1101.141
Foreign currency monetary item translation difference account	22.109	24.675	3.893
(2) Current assets
(a) Current investments	4.624	0.000	28.187
(b) Inventories	487.572	408.638	455.320
(c) Trade receivables	501.043	613.574	537.247
(d) Cash and cash equivalents	855.848	315.489	206.699
(e) Short-term loans and advances	82.538	72.819	97.581
(f) Other current assets	40.141	33.433	33.743
Total Current Assets	1971.766	1443.953	1358.777
TOTAL	3577.799	2667.094	2463.811

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015	31.03.2014	31.03.2013
	SALES
		Revenue from Operations	2669.280	2460.591	2335.398
		Other Income	114.698	103.220	7.903
		TOTAL (A)	2783.978	2563.811	2343.301
Less	EXPENSES
		Cost of Materials Consumed	1202.368	1271.859	1158.496
		Purchases of Stock-in-Trade	296.263	130.776	117.339
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(53.716)	24.077	(31.487)
		Employees benefits expense	77.829	61.919	49.413
		Other expenses	696.603	595.295	661.006
		TOTAL (B)	2219.347	2083.926	1954.767
	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		564.631	479.885	388.534
Less	FINANCIAL EXPENSES (D)		51.448	63.720	43.108
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		513.183	416.165	345.426
Less/ Add	DEPRECIATION/ AMORTISATION (F)		91.355	93.598	80.272
	PROFIT BEFORE TAX (E-F) (G)		421.828	322.567	265.154
Less	TAX (H)		125.034	99.915	70.393
	PROFIT AFTER TAX (G-H) (I)		296.794	222.652	194.761
	EARNINGS IN FOREIGN CURRENCY
		F.O.B. value of exports	1569.358	1484.717	1492.228
	IMPORTS
		Capital Goods	9.390	4.328	83.252
		Raw Materials	774.664	725.424	611.321
		Trading Goods	113.883	99.895	115.624
		Stores, packing materials and consumables	37.062	35.049	32.898
	TOTAL IMPORTS		934.999	864.696	843.095
	Earnings Per Share (Rs.)		39.24	32.03	28.02

CURRENT MATURITIES OF LONG TERM DEBT DETAILS

PARTICULARS	31.03.2015	31.03.2014	31.03.2013
Current Maturities of Long term debt	111.215	107.290	70.387
Cash Generated From Operations	66.662	345.076	269.011
Net Cash Flow from Operating Activities	(56.179)	251.136	218.251

QUARTERLY RESULTS

PARTICULARS	30.06.2015	30.09.2015
Type	1^st Quarter	2^nd Quarter
Net Sales	633.530	646.570
Total Expenditure	508.190	495.010
PBIDT (Excl OI)	125.340	151.560
Other Income	14.780	72.770
Operating Profit	140.120	224.330
Interest	12.110	11.170
Exceptional Items	0.000	0.000
PBDT	128.010	213.160
Depreciation	24.040	24.890
Profit Before Tax	103.970	188.270
Tax	33.850	49.710
Provisions and contingencies	0.000	0.000
Profit After Tax	70.120	138.560
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	70.120	108.560

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	11.12	9.05	8.34
Operating Profit Margin (PBDIT/Sales)	(%)	21.15	19.50	16.64
Return on Total Assets (PBT/Total Assets}	(%)	12.13	12.62	11.34
Return on Investment (ROI) (PBT/Networth)		0.22	0.26	0.25
Debt Equity Ratio (Total Liability/Networth)		0.64	0.83	0.97
Current Ratio (Current Asset/Current Liability)		1.39	1.32	1.39

STOCK PRICES

Face Value	Re. 1.00/-
Market Value	Rs. 75.75/-

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

DEBT EQUITY RATIO

Particulars	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Share Capital	69.503	69.503	83.503
Reserves & Surplus	992.757	1161.188	1833.408
Money received against share warrants	0.000	0.000	0.000
Share Application money pending allotment	0.000	0.000	0.000
Net worth	1062.260	1230.691	1916.911
Long-term borrowings	280.706	193.647	99.753
Short term borrowings	678.604	719.633	1008.687
CURRENT MATURITIES OF LONG-TERM DEBTS	70.387	107.290	111.215
Total borrowings	1029.697	1020.570	1219.655
Debt/Equity ratio	0.969	0.829	0.636

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	2335.398	2460.591	2669.280
		5.361	8.481

NET PROFIT MARGIN

Net Profit Margin	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	2335.398	2460.591	2669.280
Profit	194.761	222.652	296.794
	8.34%	9.05%	11.12%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check list by info agents	Available in Report (Yes/No)
1	Year of establishment	Yes
2	Constitution of the entity -Incorporation details	Yes
3	Locality of the entity	Yes
4	Premises details	No
5	Buyer visit details	--
6	Contact numbers	Yes
7	Name of the person contacted	Yes
8	Designation of contact person	Yes
9	Promoter’s background	No
10	Date of Birth of Proprietor / Partners / Directors	No
11	Pan Card No. of Proprietor / Partners	No
12	Voter Id Card No. of Proprietor / Partners	No
13	Type of business	Yes
14	Line of Business	Yes
15	Export/import details (if applicable)	No
16	No. of employees	Yes
17	Details of sister concerns	Yes
18	Major suppliers	No
19	Major customers	No
20	Banking Details	Yes
21	Banking facility details	Yes
22	Conduct of the banking account	--
23	Financials, if provided	Yes
24	Capital in the business	Yes
25	Last accounts filed at ROC, if applicable	Yes
26	Turnover of firm for last three years	Yes
27	Reasons for variation <> 20%	--
28	Estimation for coming financial year	No
29	Profitability for last three years	Yes
30	Major shareholders, if available	Yes
31	External Agency Rating, if available	Yes
32	Litigations that the firm/promoter involved in	--
33	Market information	--
34	Payments terms	No
35	Negative Reporting by Auditors in the Annual Report	No

INDEX OF CHARGES

S.NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	10587751	04/08/2015	2,850,000,000.00	SBICAP TRUSTEE COMPANY LIMITED	202, MAKER TOWER, 'E', CUFFE PARADE,, COLABA, MUM  BAI, MAHARASHTRA - 400005, INDIA	C62465547
2	10491025	28/02/2014	484,000,000.00	SBICAP TRUSTEE COMPANY LIMITED	202 MAKER TOWER 'E', CUFF PARADE, MUMBAI, MUMBAI,  MAHARASHTRA - 400005, INDIA	C03568193
3	10367968	20/06/2012	110,000,000.00	STANDARD CHARTERED BANK	NARAIN MANZIL, 23, BARAKHAMBA ROAD,, NEW DELHI, D  ELHI - 110001, INDIA	B44667467
4	10360604	11/05/2012	159,000,000.00	DBS BANK LIMITED	221, FORT HOUSE, 3RD FLOOR, D.N.ROAD, FORT, MUMBA  I, MAHARASHTRA - 400001, INDIA	B41619735
5	10281541	08/12/2011 *	90,120,600.00	STANDARD CHARTERED BANK	NARAIN MANZIL, 23,, BARAKHAMBA ROAD, DELHI, DELHI  - 110001, INDIA	B28927267

* Date of charge modification

CORPORATE OVERVIEW

Sarla Performance Fibers Limited (The Company) is engaged in the business of Specialty Yarn from Last 21 Years having with 2 Manufacturing Plants at Silvassa, UT of Dadra and Nagar Haveli and 1 Dyeing Plant at Vapi, Gujarat and Wholly Owned Subsidiaries (WOS) at British Virgin Islands (BVI) and United States of America (USA) with Group’s Corporate Office situated at Mumbai.

BUSINESS PERFORMANCE:

OPERATIONS:

During the year the sales of the Company were Rs. 2669.280 Million as against Rs. 2460.590 Million in 2013-14 registering an annual growth of 8.48%. The FOB value of exports Rs. 1569.358 Million compared to Rs 1484.714 Million.

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS OVERVIEW

Economy: As per the latest GDP growth estimates, Indian Economy grew by 7.4% in FY15 compared to 6.9% in FY14, mostly driven by improved economic fundamentals and revision of GDP methodology calculation. Even inflation showed signs of moderation, a welcome-sign wholesale price and consumer price inflation declined to 4.2% and 7.4% respectively, compared with last year’s 6.3% and 10.1%. Reduced Inflation, falling crude oil prices, stable Rupee, improved purchasing power and consumer spending, higher capital inflows supported by the government policy reforms have already put India on an accelerating growth track and improved the business outlook.

The Government envisaged GDP Growth to accelerate to 8% in FY16 driven by strengthening macroeconomic fundamentals and implementation of policy reforms recently announced reforms like auctions of coal mines and telecom, FDI hike in insurance, speedier regulatory approvals etc. will be critical growth enables to debottleneck stalled projects, improve the investment outlook and the ease of doing business in the country. Reforms currently underway such as GST implementation, Amendment on Land Acquisition Bill, Labour Reforms, etc. are expected to provide the requisite thrust for growth in the medium term.

BUSINESS OVERVIEW:

Subject is a leading exporter of Regular as well as High Tenacity Polyester and Nylon Yarns. It started operations 21 years ago as a commodity manufacturer of Man Made Fiber but transformed into a high value added yarn maker in the past decade. It has an installed capacity of 11,900 tons per annum for manufacturing yarns in Silvassa and 3200 tons per annum for a Dyeing unit at Vapi. Its state of the art 30 tons per day POY plant in Walterboro, South Carolina in the US is now fully stabilized and operating at 30% plus capacity. The company’s emphasis this year will be to focus on increased capacity utilization at its US plant, enhance the proportion of niche end user applications in India, higher value added yarns to leading global apparel brands and companies. The company exports to 45 countries.

SPFL also owns 7.25 MW of wind turbines in Gujarat and Maharashtra. Their plant load factor for the fiscal year 2015 was about 22%.

OUTLOOK:

The prospects for outsourcing of polyester/nylon yarns remain healthy. This is because of

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED 30.09.2015

(RS. IN MILLION)

Particulars	Quarter Ended		Year Ended
	30.09.2015 (Unaudited)	30.06.2015 (Unaudited)	30.09.2015 (Unaudited)
Income from Operations
Net Sales/Income from Operations	646.570	633.526	1280.096
Total Income from operations (net)	646.570	633.526	1280.096
Expenses
(a) Cost of material consumed	293.365	289.143	582.508
(b) Purchase of stock in trade	56.095	37.664	93.759
(c) Changes in inventories of finished goods, work in progress and stock in trade	(32.301)	4.113	(28.188)
(d) Employee benefit expenses	20.558	17.495	38.053
(e) Depreciation and amortization expenses	24.892	24.042	48.934
(f) Other Expenses	157.295	159.767	317.062
Total Expenses	519.904	532.224	1052.128
Profit from Operations before Other Income, Finance costs and Exceptional item	126.666	101.302	227.968
Other Income	72.767	14.776	87.543
Profit/ Loss from Ordinary Activities before Finance costs and Exceptional item	199.433	116.078	315.511
Finance costs	11.167	12.106	23.273
Profit/ Loss from Ordinary Activities after Finance costs but Exceptional item	188.266	103.972	292.238
Exceptional items	0.000	0.000	0.000
Profit/ Loss from Ordinary Activities before tax	188.266	103.972	292.238
Tax Expenses
- Current Tax	49.430	33.470	82.900
- Deferred Tax Liability/ Assets	0.278	0.379	0.657
Net Profit/ Loss from Ordinary Activities after tax	138.558	70.123	208.681
Extraordinary Items	--	--	--
Net Profit for the period	138.558	70.123	208.681
Paid- up Equity Share Capital (Face value of the share – Rs. 10)	83.503	83.503	83.503
Reserves excluding revaluation reserves as per balance sheet of Previous Accounting Year	--	--	--
Earnings per share (before extraordinary items) (of Rs. 10/- each) (not annualized)
Basic and Diluted	16.59	8.40	24.99
Earnings per share (after extraordinary items) (of Rs. 10/- each) (not annualized)
Basic and Diluted	16.59	8.40	24.99
PARTICULARS OF SHAREHOLDING
1. Public shareholding
Number of Shares	3740546	3740546	3740546
Percentage of Shareholding	44.80%	44.80%	44.80%
2. Promoters and promoter 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)	--	--	--
Non - encumbered
- Number of Shares	4609754	4609754	4609754
- Percentage of Shares (as a % of the total shareholding of promoter and promoter group)	100.00%	100.00%	100.00%
- Percentage of Shares (as a % of the total share capital of the company)	55.20%	55.20%	55.20%

NOTES:

1) The financial results were reviewed by the Audit Committee and approved by the Board of Directors of the company in their meeting held on 31st October, 2015

2) The Statutory Auditors have carried out a limited review of the results for the quarter ended 30th September, 2015, as required by Clause 41 of the listing agreement

3) Details of investor complaints – Opening Nil, Received during the quarter – 1, Resolved – 1 and Closing balance – Nil.

4) The consolidated financial results represents those of Sarla Performance Fibers Limited and its wholly owned subsidiaries, namely Sarlaflex, Inc USA (Unaudited) and Sarla Overseas Holdings Ltd., BVI (SOHL) (Unaudited). The company SOHL has commercial disputes with its JV partners in Savitex S.A. De C.V. and MRK S.A. De C.V., resulting into the matter being referred to the appropriate judicial authority in Honduras. The matter being subjudice, the financial performance of both the JVs are not taken in to consideration while preparing the Consolidated Financial Results for the quarter ended 30.09.2015 and 30.09.2014 and Financial results of Sarla Tekstil, Turkey have also not been considered as not been received, All these accounts are considered herein in Indian Currencies.

5) Previous periods figures have been regrouped / reclassified wherever necessary to conform with the current period’s presentation.

SEGMENT – WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

Particulars	Quarter Ended		Year Ended
	30.09.2015 (Unaudited)	30.06.2015 (Unaudited)	30.09.2015 (Unaudited)
1. Segment Revenue
a. Yarn	628.393	620.119	1248.512
- Within India	274.986	253.838	528.824
- Outside India	353.407	366.281	719.688
Wind Power	18.177	13.407	31.584
Total income from operations (net)	646.570	633.526	1280.096
2. Segment Results
Profit/ (loss) before tax and interest
a. Yarn	186.979	109.992	296.971
b. Wind Power	12.454	6.086	18.540
Less: Finance Costs	11.167	12.106	23.273
Total Profit Before Tax	188.266	103.972	292.238
3. Capital Employed
(Segment Assets – Segment Liabilities)
a. Yarn	1992.030	1839.083	1992.030
b. Wind Power	133.565	147.951	133.565
Total	2125.595	1987.034	2125.595

STATEMENT OF ASSETS AND LIABILITIES

Particulars		30.09.2015 (Unaudited)
A. EQUITY AND LIABILITIES
1. Shareholders Funds
a] Share Capital		83.503
b] Reserves and Surplus		2042.092
Sub-total – Shareholders’ funds		2125.595
2. Non-current Liabilities
a] Long term Borrowings		298.775
b] Deferred Tax Liabilities		144.639
c] Other current liabilities		0.000
d] Long term provisions		0.000
Sub-total - Non-current Liabilities		443.414
3. Current Liabilities
a] Short term Borrowings		893.418
b] Trade Payables		163.763
c] Other Current Liabilities		371.325
d] Short Term Provision		24.191
Sub-total - Current Liabilities		1452.697
TOTAL - EQUITY AND LIABILITIES		4021.706
B ASSETS
1. Non-current assets
a] Fixed assets		1012.099
b] Non-current investment		242.890
c] long Term loans and Advances		637.475
d] Other non-current assets		0.000
Sub-total – Non- current assets		1892.464
Foreign Currency Monetary Item Translation Difference Account		(10.846)
2. CURRENT ASSETS
	Current Investments	4.322
	Inventories	501.194
	Trade Receivables	498.653
	Cash & Bank Balances	1023.549
	Short Term loans and advances	45.972
	Other Current Assets	66.398
Sub-total – Current Assets		2140.088
TOTAL - ASSETS		4021.706

CONTINGENT LIABILITIES (AS ON 31.03.2015):

1. Letter of credit: Letter of Credit issued by Banks on behalf of the Company Rs. 194.995 Million (P.Y. Rs. 187.346 Million), these are covered by the Charge created in favour of the Company’s Bankers by way of Hypothecation of Stocks, Receivable & Machineries/Assets of the Company. Stand-by Letter of credit issued by Banks on behalf of Sarlaflex, Inc, WOS of USD 9.00 millions (P.Y. USD 8.34 million) equivalent to Rs. 563.310 Million (P.Y. Rs. 501.391 Million).

2. Guarantees: Bank Guarantees issued by Banks on behalf of the company Rs. 52.340 Million (P.Y. Rs. 43.190 Million). These are secured by the charge created in favour of the company’s bankers by way of pledge of Fixed Deposit Receipts.

3. The claim against Company not acknowledged as debt, comprises of excise duty & Custom duty disputed by company relating to issue of applicability of duty and classification of goods aggregating to Rs. 277.166 Million (P.Y. Rs. 277.166 Million).

4. Bill discounted not matured Rs. 156.001 Million (P.Y. Rs. 204.685 Million).

5. CST liability in respect of invoice amount of Rs. 210.547 Million (P.Y. Rs. 214.450 Million) for which C-Form are yet to be collected from the customers.

6. Liability of Income Tax amounting to Rs. 1.317 Million for A.Y. 2003-04 for which part relief is granted by Honb’le ITAT, Mumbai but appeal effect is not given by assessing officer.

Liability of Income Tax amounting to Rs. 5.105 Million for A.Y. 2012-13 is mainly due to mistake by AO while passing order wherein credit for Dividend Distribution Tax was not granted and for which rectification application is filed by company for granting tax credit paid before assessing officer and same is not yet rectified.

FIXED ASSETS:

· Land

· Factory Building

· Plant and Machinery

· Electrical Installations

· Office Equipment

· Computers and Software

· Vehicles

· Furniture & Fixture

· Wind Turbine Generator

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. 66.30
UK Pound	1	Rs. 98.71
Euro	1	Rs. 72.33

INFORMATION DETAILS

Information Gathered by :	DIP
Analysis Done by :	KAR
Report Prepared by :	BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		52

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.