October 25, 2013

Mumbai

LAXMI COTSPIN LIMITED

Ratings Suspended

Total Bank Loan Facilities Rated	Rs.377.5 Million
Long-Term Rating	Suspended
Short-Term Rating	Suspended

(Refer to Annexure 1 for details on facilities)

CRISIL has suspended its ratings on the bank facilities of LAXMI COTSPIN Ltd (LCSL). The suspension of ratings is on account of non-cooperation by LCSLwith CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, LCSL is yet to provide adequate information to enable CRISIL to assess LCSL’s ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria ‘Information Availability Risk in Credit Ratings’.

About the Company

LCSL is a joint venture (JV) between Rajuri Steel Pvt Ltd, Kalika Steel Alloys Pvt Ltd, and Gujarat Tea Traders Pvt Ltd. The JV was set up in 2005 as Mauli Cotspin Pvt Ltd; the name was changed to Laxmi Cotspin Pvt Ltd in 2007. In February 2011, the company was reconstituted as a closely held public limited company and its name was changed to the current one. LCSL has a ring spinning facility with 16,800 spindles (production capacity: 3 million kg per annum) and a ginning facility (production capacity: 33.5 million kg per annum). LCSL manufactures 100 per cent combed cotton warp and hosiery yarns in counts of 30s, 36s, and 40s. These yarns are used in the manufacturing of grey cloth and knitted fabric. The company has capacity utilisation of 80 per cent for its spinning unit and 35 per cent for its ginning unit.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs. Million)	Rating	Facility	Amount (Rs. Million)	Rating
Bank Guarantee	30	Suspended	Bank Guarantee	30	CRISIL A4
Cash Credit	107.5	Suspended	Cash Credit	107.5	CRISIL B-/Stable
Term Loan	240	Suspended	Term Loan	240	CRISIL B-/Stable
Total	377.5	--	Total	377.5	--

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Tanuja Abhinandan Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1818 Mobile: +91- 98192 48980 Email:tanuja.abhinandan@crisil.com Jyoti Parmar Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1835 E-mail: jyoti.parmar@crisil.com	Vasudevan R Director - CRISIL Ratings Tel: +91-44-6656 3100 Email:vasudevan.r@crisil.com	Timings: 10.00 am to 7.00 pm Toll free number: 1800 267 1301 Email:CRISILratingdesk@crisil.com

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Last updated: May, 2013

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October 25, 2013	http://www.crisil.com