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 Amount %
Mrs. Neeta Gauba 3,613,600 34.03
Mr. C.P.Gauba 2,661,800 25.06
Mr. Sahil Gauba 1,400,000 13.18
Mr. Vipul Gauba 1,385,000 13.04
C.P. Gauba (HUF) 735,800 6.93
J.G. Electros (P) Ltd. 216,200 2.04
Monarch Tapes 188,000 1.77
Mr. Pradeep Sethi 108,100 1.02
Mr. Satish Arora 94,000 0.89
Mr. P.K.Sethi 94,000 0.89
Solo Apparels (P) Ltd. 60,000 0.56
Bulls & Bears (P) Ltd. 40,000 0.38
V & S Industries (P) Ltd. 23,500 0.22
Sub Total 10620000 100
SIDBI Venture Capital 30000000
Grand Total 40620000
LIST OF DIRECTORS

Mr. Chander Prakash Gauba Promoter Director

Mrs. Neeta Gauba Promoter Director
Mr. Sahil Gauba Promoter Director
Mr. Ravindra Kumar Professional Director
Mr. Ajay Kumar Kapur Nominee Director, SVCL
Mr. S. M. Karambelkar Nominee Director, SIDBI
Mr. Ashwini Sharma 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 pre-
eminent 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 pre-
shipment 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 Years of

Terms: association
Credit of how
many days
GARMENT DIVISION
LITTLE WOOD RETAILS - UK 60 days DA 15 years
DEBENHAMS PLC - UK 90 days DA 3 years
30 days 5 years
KELLWOOD -USA -shipment
POMODORO - EUROPE 90 days DA 10 years
NEXT- EUROPE Trade Card 7 years
IC COMPANY- EUROPE 45 days DA 6 years
PHILIPS VEN HUASEN - USA Trade Card 7 years
CWC (COLD WATER CREEK) - USA Sight LC 3 years
GH BASS- USA (PVH) Trade Card 7 years
DYEING DIVISION
GOKAL DAS IMAGES (P) LTD 30 days LC 5 years
PEARL GLOBAL LTD 30 days LC 5 years
TCNS LTD. 90 days LC 5 years
TEXPORT INDUSTRIES (P) LTD 45 days 5years
VIKRAM OVERSEAS 45 days 3 years

DETAILS OF RAW MATERIAL

Name of supplier Payment Terms:

SPENTEX INDUSTRIES LIMITED 15 days

GPI TEXTILES LTD 15 days
SRI NAGALAKSHMI MILLS 60 days
SATISH & CO 60 days
AR FABRIC 45 days
ALPS INDUSTRIES 45 days
STITCH SHELL 60 days
AARTI INTERNATIONAL LTD 15 days
WADHWA BROTHERS 60 days
GURARA AGENCIES 60 days
UNI DYECHEM 60 days
VEXEANT DYEAUX INDIA (P) LTD. 60 days