About The Company

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Ms Ritika Choudhary d/o Mr. Madan Lal, a student of BBA from__________ collage has worked as a management trainee with the company , M/s V&S International (P) Ltd. from ______ to_______ . She was found to be a dedicated and hard working person and showed keen interest in grasping knowledge of all the departments of the company. For V&S International (P) Ltd.

Authorised Signatory

Dated: 3 January, 2007

ABOUT THE COMPANY M/s V&S International (P) Ltd. was incorporated on 14/8/1992. The main line of activity is manufacturing and export of Garments & Made ups (woven and knitted). The company is promoted by Mr. C.P.Gauba and Mrs. Neeta Gauba. In the year 2001, the promoters adopted backward integration and set up a knitting and dying unit in the name of V&S Texnits (P) Ltd. This company started with a production level of 5 tons per day and has successfully implemented two expansion programs and brought up its production level to 20 tons per day. This company was enjoying credit facilities from Standard Chartered Bank and State Bank of India. The promoters also undertook substantial expansion in V&S International in 2003-04 by setting up two new units in Gurgaon and IMT Manesar. This expansion was financed by HSIDC and SIDBI. However, the working capital facilities were continued to be availed from Indian Overseas Bank. During the year 2005, the promoters purchased a company, namely Manu Creations (P) ltd. for setting up yet another unit for garment manufacturing. Financial assistance for Manu Creations was availed from Union Bank of India. After having implemented the expansion in various units, V & S invited SIDBI Venture Capital Ltd. to become strategic partner in potential growth of the group. SVCL invested Rs. 30 Crores in the form of Preferential Share Capital (convertible into equity share capital on a pre valuation basis). Compliance of the terms of SVCL, required the amalgamation of V&S Texnits (P) Ltd and Manu Creations (P) Ltd. with V&S International (P) Ltd. The amalgamation scheme had been approved by the H’nble High Court of Delhi in May’2007 w.e.f. 1.4.2006 and being implemented by the company. CAPITAL STRUCTURE Shareholding pattern and list of full name of directors (Promoter directors and Independents directors), List of Share holders Name of Share Holder Mrs. Neeta Gauba Mr. C.P.Gauba Mr. Sahil Gauba Mr. Vipul Gauba C.P. Gauba (HUF) J.G. Electros (P) Ltd. Monarch Tapes Mr. Pradeep Sethi Mr. Satish Arora Mr. P.K.Sethi Solo Apparels (P) Ltd. Bulls & Bears (P) Ltd. V & S Industries (P) Ltd. Sub Total SIDBI Venture Capital Grand Total

Amount 3,613,600 2,661,800 1,400,000 1,385,000 735,800 216,200 188,000 108,100 94,000 94,000 60,000 40,000 23,500 10620000 30000000 40620000

% 34.03 25.06 13.18 13.04 6.93 2.04 1.77 1.02 0.89 0.89 0.56 0.38 0.22 100

LIST OF DIRECTORS Mr. Chander Prakash Gauba Mrs. Neeta Gauba Mr. Sahil Gauba Mr. Ravindra Kumar Mr. Ajay Kumar Kapur Mr. S. M. Karambelkar Mr. Ashwini Sharma

Promoter Director Promoter Director Promoter Director Professional Director Nominee Director, SVCL Nominee Director, SIDBI Nominee Director, HSIDC

WRITE UP ABOUT THE INDUSTRY INFORMATION IN WHICH COMPANY IS OPERATING The phasing out of the quotas in 2005, instinctively led to intensified investment in the textile industry for expansion and mordernisation of the existing plant as also for setting up new projects. The industry was gearing up to get voluminous orders. However, the forceful competition from China did not let Indian exporters enjoy the fruits of abolition of quotas. The pricing of garments manufactured in China was much lower than those manufactured in India. Eventually Chinese manufacturers could also not sustain on such low realisations due increase in power cost and labour cost. Presently cost variance between Chinese Garments and Indian garments is not significant, as a result India becomes the preferential market. While we have started to get good orders now, the rupee appreciation has definitely squeezed the margins for us as well as other exporters. In view of the same we have changed our locational sales mix from 60:40 to 40:60 for sales between American and European market. On the whole India caters to only 8-10% of the worldwide garment industry, hence there are no major competitors. Moreover garments manufactured in Northern India are majorly on value addition basis, while Southern India caters to basic garment manufacturing. MANUFACTURING PROCESS: FOR DYEING UNIT The flow chart involving various stages of the dyeing process is as under: Grey Fabric Store (Inspection and storage as per Quality Norms) Lot Making (Machine wise dyeing Batch) Soft Flow Dyeing Machine (Dyeing of Fabric) Hydro Squeezer (to remove excess water from fabric) Relax Dryer (Drying of Fabric under relaxed stage with residual shrinkage control) Compactor (Shrinkage control along with dimensional stability) Fabric Checking (Defect Identification – Quality Control) Dispatch

The rolls of fabric are taken to the dyeing section where they are fed into dyeing machines. Dyeing/ processing takes place in a closed loop under relaxed conditions (necessary due to the delicate nature of knitted fabric). Each cycle for dyeing takes approximately 6-8 hours and each cycle for bleaching takes approximately 4-5 hours. The dyed/-bleached fabric is then fed through a detwister and hydro Squeezer, which reduces the moister contents in the fabric, by 65%-80%. This can be varied by adjusting the speed and pressure of hydro extracting rollers. Thereafter, the fabric is fed in shrink dryer which dries the fabric in a relaxed manner so as to minimize shrinkage. With compacting machine a clean and smooth finish is being given to the fabric through steaming the fabric by way of overfeed mechanism, which control the ultimate shrinkage. FOR KNITTING UNIT Knitting is the process of transforming endless yarn package to a stable multi dimensional structure, widely known as knitted fabric. Knitting is very much unlike the process of weaving which includes considerable pre-weaving preparation process of raw material used in weaving yarn. The raw material used in manufacturing of knitted fabric is yarn which being manufactured by spinning units. Different types of yarn like combed, carded, gas mercerized dyed, synthetic, blended etc can be used in the knitting process. The quality of knitted fabric may be described in terms of: -Weight per unit per area of fabric i.e. GSM -Touch, Feel and Visual appearance -Extensibility -Drape etc. Knitted fabric can be widely classified into two categories viz. single jersey and double jersey. There are several derivatives of the two basic structures of the knitted fabric. Yarn can be knitted either on circular knitting machines or on flat knitting machines to produce knitted fabric. Fabrics produced on circular knitting machines are being used for manufacturing of Ready-made Garments. Fabric produced on flat knitting machines is used to make accessories of garments like collars and cuffs etc. The knitting process can be segmented in the following zones: Creel: This an arrangement to stack yarn packages, which are further, knitted into fabric. Feeding Zone: This is an arrangement to ensure accurate feeding rate of yarn as per quality requirement. This is done by virtue of positive feeder, which may be equivalent for the accumulator in weaving technology. Knitting Zone: This is where the true inter- linking of loops occur with the help of needle movements in pre defined profile. Successive loop formations are added along the length of the fabric knitted in circular knitting. The fabric is constructed in tubular manner. Take-Up Zone: This zone is nothing but an arrangement on the machine to facilitate accurate winding of the fabric formed in the knitting zone to create a bale/ roll of fabric which is the final output of the process. All the above four zones are the integral part of the circular knitting machine. Semi skilled workers are entrusted into creeling, drawing-in, running, observation and doffing of bales/ rolls. Skilled and trained persons look after the intrinsic setting and running parameters.

FOR READY MADE GARMENTS The production process of the proposed unit can be divided into two major sections. i) Processing of Grey fabric ii) Garments Manufacturing Section Processing of Grey Fabric After we receive grey fabric, we check it for knitting defects and dead cotton contents etc. The quality-approved fabric is then sent to processing mills for printing, Dyeing & Bleaching as per the requirements of the buyer. These mills are situated at Faridabad /Gurgaon etc. Garment Manufacturing Section The Garment Manufacturing section starts after we receive processed fabric, which can be categorised into 3-sub section: a) Cutting Section b) Sewing Section c) Finishing Section a) Cutting Section The fabric will be spread out in layers on the Cutting Tables. Upto 150 t0 200 Layers would be spread on the Tables. Thereafter the pattern on the basis of which the garment is to the stitched will be placed on the fabric. The cutting of the fabric will be undertaken by automated Straight Knife Cutting Machine, which has the capability to cut upto 300 layers at a time. Also it improves accuracy in cutting and precise fitting of garments for all sizes. b) Sewing Section i) Automated Plain Stitches This section has been balanced perfectly with multi purpose Sewing Machine as well as specialised machines with a high level of automation. The basic Multi Purpose Sewing Machines would be equipped with Electronic Motors which perform certain functions automatically at a very high speed resulting in error free production, savings in other raw material consumption’s and time saving for operators. All these three would contribute significantly to overall high standard of quality and low production cost of the garments. The basic machines would be equipped with Automatic Back Tacking function that would ensure stitches of any component of the garment is firmly secured at both ends. This in turn will eliminate the possibility of loose stitches. These machines are also equipped with proper needle positioning to make sure considerable reduction in handling time for the operator coupled with Thread Trimming Device which would cut the thread at the end of each operation to reduce thread wastage and give a neat finish to the garment. ii) Button Hole and Button Stitch Buttons holes and button stitching on the garments will be done on specialised automatic Button Hole and Button Stitch machine to give proper shape of button hole and proper attachment of button at a very high speed. iii) Special Purpose Machines Overlock Machines and Flatlock machines will join sleeves and seaming sides, in one operation. These machines sew parts of a garment together and simultaneously cut waste fabric. This gives smooth finish to stitched edges of garment for better comfort in wearing.

c) Finishing Section - Pressing & Packing The Garments will be ironed using steam irons installed with and integrated Boiler System. Garments would thereafter be placed in polythene bags and sorted sizewise and Design wise as per specification given by buyer. For export consignment garments are packed in carton boxes according to the instruction given on buyer’s purchase order to reduce their handling and distribution cost.

d) Quality Control Quality checks have been built at various stages of the production process Quality Control process began at the stage of receiving of yarn from Spinning Mills, thereafter, quality of fabric produced by our knitting section would be checked for knitting defects. Only quality- approved fabric is sent to store from where it would be issued to cutting section. In addition to this there will be a 100 inspection of garment before finishing process starts. After the garments are pressed, the Finishing Section will make a final inspection to confirm measurement and finishing of garment before sent for final packing. While arriving at the manpower requirement provision has been made for quality control inspectors at each stage. NOTE ON MANAGEMENT OF THE COMPANY The company is headed by the promoter director, Mr. C.P.Gauba who is overall incharge of all the departments viz. - Sales & Marketing - Production - Quality Control - Accounts & Finance - Personnel & Administration The woven garments division of the company is headed by Mr. Sudhir Makhija, who is assisted by Mrs. Amita Sharma. The knitted garments division is collectively handled by Mr. Sandeep Bali (GM) and Mr. Rajeev Nayyar and Mr. Arjun Mitra. Each of these three persons has independent charge of different production centers. They are also responsible for sales promotion of the company's products. The above named division heads are assisted in the sales and marketing activities by a team of professionally qualified merchandisers who interact with the international clients from the stage of procuring orders, pricing of the products, getting the samples approved, coordinating with various departments during bulk production and ensuring timely dispatch of the goods. The Purchase/ Procurement department is headed by Mr.Raj Bhatt, who is overall incharge of all purchases including fabric and asseccories. The Production department is taken care of, by Mr.Pradeep Sethi for garment division and Mr. Sukhwinder Singh (Gm-Technical) for the dyeing division, who have been associated with the company since inception. Duties are further delegated to various production managers who have thorough knowledge of various aspects involved in the production process in of the respective products handled by them. The Quality control department headed by Brig.S.K.Mehendiratta supersedes the production department and finished products have to undergo stringent quality parameters before being finally dispatched to the overseas buyer. While the Financial controller cum Director of the company is Mr. Ravindra Kumar, the Accounts department is exclusively handled by a team of professionally qualified personnel including Mr.Sanjay Gupta (CA), Ms. Shikha Narula (ICWA) and Mr. Rajesh Gupta (CA). The legal and statutory compliance of the company are taken care of by a qualified company secretary, Mr. Kapil Dev Taneja NOTE ON PRESENT SCENARIO & FUTURE PROSPECTS OF THE TEXTILE INDUSTRY

The textiles and clothing sector is the largest employer after agriculture and its importance in India’s economy is recognised for its contribution to industrial production and export earnings. India’s Textile exports have registered strong growth in the post quota period. From US$ 14 billion in 2004-05 to US$ 17 billion in 2005-06, recording a growth of 21.77%. The momentum has sustained in 2006-07 the textiles exports during April - October 2006, are up by 6.47% in dollar terms and 11.43% in Rupee terms over exports during the corresponding period of the previous year. To encourage up-gradation of textiles sector and to give a fillip to exports of textile products, the government has introduced schemes in various sectors of the textile industry. One of the main objectives of the New Textile Policy (NTxP-2000), announced in November 2000, was to facilitate the textiles industry to attain and sustain a preeminent global standing in the manufacture and exports of clothing. The policy endeavors to achieve the target of textiles and apparel exports of US $ 50 billion by 2010, of which the share of garments will be US $ 25 billion. Subsequent to the announcement of NTxP-2000, woven segment of readymade garment, hosiery and knitwear sub-sectors were de-reserved from the ambit of SSI. The investment requirement of the clothing sector by 2012 will be Rs.21800 crores and will create incremental employment for a 56.40 lacs workforce, of which 28.25 lacs will be semi skilled and 11.30 lacs unskilled. It is estimated that nearly 30 lacs people are working in the readymade garment sector itself. Every industry has its own ups and downs. Textile industry is no exception. One of the major concern in present times being the fluctuation of currency rates. India’s exports of Textile have been adversely affected due to the appreciation in the value of the Indian Rupee vis-à-vis US Dollar in the recent months. But the Government has provided several relief measures, which include increase in duty entitlement and Duty draw back rates, exemption from service tax on certain services, reduction in interest rates of preshipment and post shipment credit and faster clearance of arrears to terminal excise duties and Central sales Tax. Another proposal for increase in working hours of labor, from 8 to 10, is under active consideration. India is increasingly being looked upon as a major supplier of high quality fashion apparels. Today many leading fashion labels are being associated with Indian Products. Indian apparels have come to be appreciated in major markets internationally. M/s V&S International (P) Ltd. is also one of the manufacturers of such high fashioned garments. Distinct styles, designs, embellishments, and customized specifications are incorporated in our range, which make our products readily acceptable to the overseas buyers. Our clientele consists of reputed brands like LITTLE WOOD, VAN HEUSEN, DEBHNAMS, IZOD, CWC, MARKS & SPENCERS, NEXT, CARRFOUR and KELLWOOD. We have been consistently catering to their requirements for more than a decade. In the expansion program, undertaken during the last two financial years, company has set up four new establishments. It is now concentrating on shifting operations from various smaller units of the company to these four units, Company shall henceforth be in a position to enjoy the pecuniary economies of scales wherein procurement cost, administrative cost, logistics cost etc. are reduced and production is also increased. While the government is making all efforts to promote the textile industry, we at V&S make all endeavors to make our presence felt in this promising industry.

LIST OF MAJOR CUSTOMERS Name of customer

Payment Terms: Credit of how many days

Years of association

60 days DA 90 days DA 30 days -shipment 90 days DA Trade Card 45 days DA Trade Card Sight LC Trade Card

15 years 3 years 5 years

GARMENT DIVISION LITTLE WOOD RETAILS - UK DEBENHAMS PLC - UK KELLWOOD -USA POMODORO - EUROPE NEXT- EUROPE IC COMPANY- EUROPE PHILIPS VEN HUASEN - USA CWC (COLD WATER CREEK) - USA

GH BASS- USA (PVH)

10 years 7 years 6 years 7 years 3 years 7 years

DYEING DIVISION 30 days LC 30 days LC PEARL GLOBAL LTD 90 days LC TCNS LTD. TEXPORT INDUSTRIES (P) LTD 45 days 45 days VIKRAM OVERSEAS GOKAL DAS IMAGES (P) LTD

5 years 5 years 5 years 5years 3 years

DETAILS OF RAW MATERIAL Name of supplier SPENTEX INDUSTRIES LIMITED GPI TEXTILES LTD SRI NAGALAKSHMI MILLS SATISH & CO AR FABRIC ALPS INDUSTRIES STITCH SHELL AARTI INTERNATIONAL LTD WADHWA BROTHERS GURARA AGENCIES UNI DYECHEM VEXEANT DYEAUX INDIA (P) LTD.

Payment Terms: 15 days 15 days 60 days 60 days 45 days 45 days 60 days 15 days 60 days 60 days 60 days 60 days