Rating Rationale

May 29, 2014

Mumbai

Euro Leder Fashion Limited

Ratings Suspended

Total Bank Loan Facilities Rated	Rs.160 Million
Long Term Rating	Suspended
Short Term Rating	Suspended

(Refer to Annexure 1 for Facility-wise details)

CRISIL has suspended its ratings on the bank facilities of Euro Leder Fashion Ltd (ELFL). The suspension of ratings is on account of non-cooperation by ELFL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, ELFL is yet to provide adequate information to enable CRISIL to assess ELFL'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

ELFL was incorporated in 1992 as a private limited company and later reconstituted as a publicly listed company in 1994. ELFL manufactures and exports leather garments and goods. It has three manufacturing facilities in Pallavaram, Uthuramerur, and Nagagmai (all in Tamil Nadu) with a combined installed capacity of 0.2 million pieces per annum and current capacity utilisation of around 70 per cent. ELFL derives majority of its revenues through export of leather jackets predominantly to the European market. The company was set up by Mr. A R Ramanathan, who has four decades of experience in the same line of business. Mr. R M Lakshmanan (son of Mr. A R Ramanathan) currently handles ELFL's day-to-day affairs.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs.Million)	Rating	Facility	Amount (Rs.Million)	Rating
Bill Discounting	75	Suspended	Bill Discounting	75	CRISIL A4+
Packing Credit	35	Suspended	Packing Credit	35	CRISIL A4+
Proposed Long Term Bank Loan Facility	50	Suspended	Proposed Long Term Bank Loan Facility	50	CRISIL BB-/Stable
Total	160	--	Total	160	--

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Last updated: May, 2013

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May 29, 2014	http://www.crisil.com