MIRA INFORM REPORT

Report Date :

17.08.2011

IDENTIFICATION DETAILS

Name :	SHAKTHI KNITTING LIMITED
Registered Office :	Land Marvel, Flat No. F-1, First Floor, New No. 3, First Main Road, Indira Nagar, Adyarj, Chennai-600020, Tamilnadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	06.05.1991
Com. Reg. No.:	18-20736
Capital Investment / Paid-up Capital :	Rs.41.000 Millions
CIN No.: [Company Identification No.]	U17301TN1991PLC020736
TAN No.: [Tax Deduction & Collection Account No.]	CHES03313C
Legal Form :	A closely held Public Limited Liability Company
Line of Business :	Manufacturer and Exporter of Readymade Knitted Garments
No. of Employees :	2500 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (54)

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

Maximum Credit Limit :	USD 1400000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well – established and reputed company having satisfactory track. Trade relations are fair. Business is active. Payments are reported as usually made as per commitments. The company can be considered normal for 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.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	Land Marvel, Flat No. F-1, First Floor, New No. 3, First Main Road, Indira Nagar, Adyarj, Chennai-600020, Tamilnadu, India
Tel. No.:	91-421-2214464
Fax No.:	91-421-2210764
E-Mail :	guru@shakthiknitting.com shakthi@shakthiknitting.com
Website :	www.shakthiknitting.com
Factory :	Shakthi Centre, Nochipalayam Road, Veerapandi (Po), Tirupur - 641 605, Tamilnadu, India.
Tel. No.:	91- 421- 5511555
E-Mail :	shakthi@shakthiknitting.com

DIRECTORS

As on 30.09.2010

Name :	Mr. Siddamalai Krishnaswamy Vivekananda
Designation :	Director
Address :	41, Balaji Nagar, Kangeyam Palayam Pudur, Kangeyam Road, Tirupur-641601, Tamilnadu, India
Date of Birth/Age :	03.06.1967
Date of Appointment :	06.05.1991
Din No.:	00334787
Name :	Mr. Sundaravadively Vasanthkumar
Designation :	Managing Director
Address :	95-A, 4^th Cross, Amarjothi Gardens, Kangeyam Road, Opposite DSK Hospital Road, Tirupur-641604, Tamilnadu, India
Date of Birth/Age :	01.08.1967
Date of Appointment :	06.05.1991
Din No.:	00405757
Name :	Mr. Sankaranarayanan Sonaachalam
Designation :	Director
Address :	No. 8, J.S Garden, Phase – II, Arun Gardesn, Kangeyam Road, Nallur, Tirupur-641606, Tamilnadu, India
Date of Birth/Age :	27.05.1967
Date of Appointment :	22.01.2010
Din No.:	00486087
Name :	Mr. Chikalapat Yogesh Pai
Designation :	Director
Address :	150/151, Amarjothi A S Nagar, Kangey Road, Nallur, Tirupur-641604, Tamilnadu, India
Date of Birth/Age :	19.10.1968
Date of Appointment :	22.01.2010
Din No.:	02896131
Name :	Mr. Sundaravadivelu Pudupet Rajabather
Designation :	Director
Address :	137 Velachery Road, Guindy, Chennai-600032, Tamilnadu, India
Date of Birth/Age :	20.03.1937
Din No.:	00782035

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As On 30.09.2009

Names of Shareholders	No. of Shares
C.V Selvaraju	1500
D.P Velayutham	250
Dr. P. R. Sundravadivelu	13000
K.A Urmila	9500
P. Ravichandra	20000
P. Vijaykumar	21000
Pillaya Investments And Finance Private Limited – India	15000
R. Niranjini	15500
S. Dilipkumar	16000
S. Roopkumar	500
S. Vasanth Kumar	18000
S. K. Vivekananda	52000
V. Rameshkumar	250
V. Sudha	1000
V. Usha Amaravathi	250
V. Yasoda Devi	250
S. Kausalya	21000
V. Manjula	5000
Total	210000

List of Redeemable Cumulative Preferences Share Holders

Names of Shareholders	No. of Shares
Dr. P. R. Sundaravadivelu	85000
S. Kausalya	20000
S. Roopkumar	25000
S. Vasanth Kumar	10000
S. Dilip Kumar	10000
Kumaravel Packaging Private Limited - India	50000
Total	200000

As on 30.09.2010

Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	84.15
Other	15.85
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Readymade Knitted Garments

GENERAL INFORMATION

No. of Employees :

2500 (Approximately)

Bankers :

• IDBI Bank Limited, 115, Anna Salai, P.B. No. 805, Saidapet, Chennai-600015, Tamilnadu, India
• Ing Vysya Bank Limited, 2/3, Valipalayam, Tirupur-638601, Tamilnadu, India
• State Bank of India, Commercial Branch, 1443, Trichy Road, Coimbatore-641018, Tamilnadu, India

Facilities :

Secured Loan	As on 31.03.2010 (Rs. in Millions)	As on 31.03.2009 (Rs. in Millions)
Long term loan from banks	261.597	233.540
Short term loan from banks	593.625	584.375
Total	855.222	817.915
Unsecured Loan
From Others	13.900	92.606
Total	13.900	92.606

Banking Relations :	--
Auditors :
Name :	C. B. Joesph and Company Chartered Accountants
Address :	283, Pantheon Road, Egmore, Chennai-600008, Tamilnadu, India
Tel. No.:	91-44-28194091 / 42145501 / 30272309
Fax No.:	91-44-42145497
E-Mail :	josephm@satyam.net.in

CAPITAL STRUCTURE

As on 30.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
600000	Equity Shares	Rs.100/- each	Rs.60.000 Millions
400000	Preferences Shares	Rs.100/- each	Rs.40.000 Millions
	Total		Rs.100.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
210000	Equity Shares	Rs.100/- each	Rs.21.000 Millions
300000	Preferences Shares	Rs.100/- each	Rs.30.000 Millions
	Total		Rs.51.000 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
210000	Equity Shares	Rs.100/- each	Rs.21.000 Millions
200000	Preferences Shares	Rs.100/- each	Rs.20.000 Millions
	Total		Rs.41.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		41.000	41.000	41.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		326.205	309.041	277.408
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		367.205	350.041	318.408
LOAN FUNDS
1] Secured Loans		855.222	817.915	722.945
2] Unsecured Loans		13.900	92.606	174.598
TOTAL BORROWING		869.122	910.521	897.543
DEFERRED TAX LIABILITIES		54.788	57.716	59.862
TOTAL		1291.115	1318.278	1275.813
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		460.271	527.682	556.719
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		16.232	20.025	19.825
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	498.278	457.279	296.763
	Sundry Debtors	258.447	358.386	395.352
	Cash & Bank Balances	20.108	25.901	21.931
	Other Current Assets	42.284	43.281	42.389
	Loans & Advances	53.034	47.240	61.202
Total Current Assets		872.151	932.087	817.637
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	(110.641)	32.439	83.304
	Other Current Liabilities	162.565	122.599	34.547
	Provisions	5.615	6.478	0.517
Total Current Liabilities		57.539	161.516	118.368
Net Current Assets		814.612	770.571	699.269
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1291.115	1318.278	1275.813

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	1264.792	1262.573	1218.243
		Other Income	84.430	39.650	68.845
		TOTAL (A)	1349.222	1302.223	1287.088
Less	EXPENSES
		Manufacturing and Other Expenses	1210.150	1139.578	1141.628
		TOTAL (B)	1210.150	1139.578	1141.628
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		139.072	162.645	145.460
Less	FINANCIAL EXPENSES (D)		77.536	88.936	75.166
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		61.536	73.709	70.294
Less/ Add	DEPRECIATION/ AMORTISATION (F)		41.684	41.043	40.253
	PROFIT BEFORE TAX (E-F) (G)		19.852	32.666	30.041
Less	TAX (H)		(2.928)	(1.775)	(0.439)
	PROFIT AFTER TAX (G-H) (I)		22.780	34.441	30.480
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		144.229	112.595	82.115
Less	APPROPRIATIONS
		Transfer to General Reserve	4.800	2.400	0.000
		Provision for Proposed Preferences Shares Cumulative Dividend	1.300	0.000	0.000
		Preference Share Redemption Reserve	0.816	0.407	0.000
	BALANCE CARRIED TO THE B/S		160.093	144.229	112.595
	Earnings Per Share (Rs.)		55.56	84.00	74.34

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	1.69	2.64	2.37
Net Profit Margin (PBT/Sales)	(%)	1.57	2.59	2.47
Return on Total Assets (PBT/Total Assets}	(%)	1.49	2.24	2.19
Return on Investment (ROI) (PBT/Networth)		0.05	0.09	0.09
Debt Equity Ratio (Total Liability/Networth)		2.52	3.06	3.19
Current Ratio (Current Asset/Current Liability)		15.15	5.77	6.91

LOCAL AGENCY FURTHER INFORMATION

NOTE: The registered office of the company has been shifted from No.1. 3^rd Street, Padmanabha Nagar, Adyar, Chennai-600020, Tamilnadu, India to the present address w.e.f. 15.07.2010.

OPERATIONS

During the year, the company achieved an improved turnover of Rs. 1349.220 millions as against Rs. 1302.220 millions in the previous year. After providing for interest, depreciation and income Tax the company has earned surplus to the tune of Rs. 167.000 millions as against the surplus available for appropriation is Rs. 147.040 millions in the previous year. The company has adopted stringent measure to mitigate the pressure on business operations and profit by global economic meltdown.

FUTURE

The company is committed to achieve greater heights in future by focusing on high yield order at the international level as well as at the national level

FINANCE

The company has undertaken a restructuring of its financial mix, which has enabled in reducing the impact of rising interest cast. During the year the company has repaid Term Loan to the extent of Rs. 57.550 millions.

fixed ASSETS:

· Land

· Building

· Plant and Machinery

· Computer

· Office equipments

· Furniture and Fittings

· Vehicles

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 records 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 records 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.45.25
UK Pound	1	Rs.73.88
Euro	1	Rs.65.06

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--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	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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.