MIRA INFORM REPORT

Report Date :

22.08.2011

IDENTIFICATION DETAILS

Name :	SRI PALANI MURUGAN ENTERPRISES LIMITED
Registered Office :	126, Arts College Road, Coimbatore – 641018, Tamilnadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	02.07.1997
Com. Reg. No.:	18-008012
Capital Investment / Paid-up Capital :	Rs.6.000 Millions
CIN No.: [Company Identification No.]	U17111TZ1997PLC008012
TAN No.: [Tax Deduction & Collection Account No.]	CMBS03335D
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Manufacturer, Importer and Exporter of Readymade Garments Especially T- Shirts
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (45)

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

Maximum Credit Limit :	USD 200000
Status :	Satisfactory
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. The company has incurred a loss in the current year. However, trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. 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 :	126, Arts College Road, Coimbatore-641 018, Tamil Nadu, India
Tel. No.:	91-422-4343530
Fax No.:	91-422-4343630
E-Mail :	ksdri@kgworldwide.com
Factory:	Plot No.NN2, SIPCOT Industrial Growth Centre, P. V. Palayam Post, Perundurai, Erode – 638052, Tamilnadu, India
Area :	100000 sq. ft.
Location :	Owned

DIRECTORS

(AS ON 30.09.2010)

Name :	Mr. Ashyanth Ramaswamy
Designation :	Director
Address :	193, Race Course, Coimbatore-641 018, Tamilnadu, India
Date of Birth/Age :	13.03.1978
Date of Appointment :	11.03.2002
Name :	Mr. Balakrishnan Devaraj
Designation :	Director
Address :	No.4, KG Garden, Kamaraj Road, Uppilipalayam, Coimbatore-641 015, Tamilnadu, India
Date of Birth/Age :	14.11.1956
Date of Appointment :	08.03.1998
Name :	Mr. Ramchandran Krishnan
Designation :	Director
Address :	18, KG Garden, Kamraj Road, Uppilipalayam, Coimbatore-641 015, Tamilnadu, India
Date of Birth/Age :	19.04.1952
Date of Appointment :	08.03.1998

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 30.09.2010)

Names of Shareholders	No. of Shares (Equity)
G. Ramaswamy	7200
R. Santhamani	12800
R. Annush	10000
R. Ashyanth	10000
G. Vijay Kumar	7200
G. Kannappan	7200
D. Vikram Krishna	10000
Kiruthika Vikram	22800
Saritha Vijayakumar	10000
Sanjana Vijayakumar	10000
Geetha Vijaykumar	12800
Total	120000

(AS ON 30.09.2010)

Names of Shareholders	No. of Shares (Preference)
G. Ramaswamy	16000
G. Vijay Kumar	16000
G. Kannappan	16000
Total	48000

(AS ON 30.09.2010)

Category	Percentage
Directors or relatives of directors	33.00
Other top fifty shareholders	67.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer, Importer and Exporter of Readymade Garments Especially T- Shirts

Products :

Item Code No. (ITC Code)	52 05 11.01 to 52 05.45.02
Product Description	Cotton Yarn
Item Code No. (ITC Code)	61 09 10 00
Product Description	Knitted Garments

PRODUCTION STATUS (AS ON 31.03.2010)

Particulars	Unit	Installed Capacity	Actual Production
Open End Spinning Rotors	Rotor	2800	--
Doubling Frames	Frames	12	--
Knitting machines	Nos.	5	--
Yarn	Qty	--	5250615
T-Shirts – Qty (Pcs)	Qty	--	522328
Waste Cotton	Qty	--	1246681

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· Bank of Baroda

Coimbatore Main Branch, Bank Road, Coimbatore – 641001, Tamilnadu, India

· Corporation Bank

Trichy Road Branch, Coimbatore – 641018, Tamilnadu, India

· State Bank of Travancore

Facilities :

Secured Loans :	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
From Banks
Working Capital Loan	69.002	73.569
Term Loan	136.929	142.629
Total	205.931	216.198

Unsecured Loans :	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
From Corporate	49.303	27.577
Sales tax loan under deferral scheme	9.882	11.727
Trade Deposits	--	0.100
Total	59.185	39.404

Banking Relations :	--
Auditors :
Name :	Gopalaiyer and Subramanian Chartered Accountants
Address :	Flat No, 2 Second Floor, 57, Sambandam Road East, R. S. Puram, Coimbatore-624 001, Tamilnadu, India
Associates:	· The Kadri Mills (CBE) Limited · Sharadha Terry Products Limited · KG Textiles Limited · GK Investment Limited · GRV Investments Limited · GV Investments Limited · KG Tex Limited · KG Non Wovens Limited · KGS Spincot Limited · Govindh Murugan Enterprises Limited · Shankarshana Textiles Limited
Wholly Owned Subsidiary Company :	Shri Govindvenkatesaa Textiles Limited U17111TZ2001PL009859

CAPITAL STRUCTURE

AS ON 15.09.2009

Authorised Capital :

No. of Shares	Type	Value	Amount
150000	Equity Shares	Rs.10/- Each	Rs.1.500 millions
48000	6% Cumulative Redeemable Preference Share	Rs.100/- Each	Rs.4.800 millions
	Total		Rs.6.300 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
120000	Equity Shares	Rs.10/- Each	Rs.1.200 millions
48000	6% Cumulative Redeemable Preference Share Preference Share	Rs.100/- Each	Rs.4.800 millions
	Total		Rs.6.000 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		6.000	6.000	6.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		44.052	70.528	66.001
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		50.052	76.528	72.001
LOAN FUNDS
1] Secured Loans		205.931	216.198	190.429
2] Unsecured Loans		59.185	39.404	40.637
TOTAL BORROWING		265.116	255.602	231.066
DEFERRED TAX LIABILITIES		18.404	20.200	24.100
TOTAL		333.572	352.330	327.167
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		254.807	266.817	262.978
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.605	0.605	0.605
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	40.906	52.103	30.256
	Sundry Debtors	42.088	51.846	25.155
	Cash & Bank Balances	8.352	10.569	7.931
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	16.998	12.677	25.001
Total Current Assets		108.344	127.195	88.343
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	29.746	41.656	24.040
	Other Current Liabilities	0.000	0.000	0.000
	Provisions	0.438	0.631	0.719
Total Current Liabilities		30.184	42.287	24.759
Net Current Assets		78.160	84.908	63.584
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		333.572	352.330	327.167

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	511.919	489.717	764.801
		Other Income	19.186	13.287	14.857
		TOTAL (A)	531.105	503.004	779.658
Less	EXPENSES
		Raw Material consumed	335.763	311.256	491.829
		Chemical Consumed	7.462	5.124	5.810
		Stores Consumed	5.123	17.038	8.737
		Power and Fuel	46.199	42.597	37.394
		Personnel Cost	56.078	51.643	48.165
		Repairs and Maintenance	14.901	14.552	13.721
		Other Operating Expenses	46.255	33.457	136.606
		Change in Stock	8.647	(12.692)	(0.085)
		Prior Year Expenses Written Back	(0.538)	0.000	0.000
		Prior Year expenses	1.692	0.000	0.000
		TOTAL (B)	521.582	462.975	742.177
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		9.523	40.029	37.481
Less	FINANCIAL EXPENSES (D)		23.017	25.037	21.534
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(13.494)	14.992	15.947
Less/ Add	DEPRECIATION/ AMORTISATION (F)		14.781	14.076	12.994
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		(28.275)	0.916	2.953
Less	TAX (H)		(1.799)	(3.611)	1.428
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		(26.476)	4.527	1.525
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		43.032	38.504	36.979
	BALANCE CARRIED TO THE B/S		16.556	43.032	38.504
	EARNINGS IN FOREIGN CURRENCY		65.225	86.894	40.048
	IMPORTS
		Spares & Components	0.423	1.528	1.502
		Capital Goods	0.000	0.000	0.942
	TOTAL IMPORTS		0.423	1.528	2.444
	Earnings Per Share (Rs.)		(220.63)	37.73	12.71

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(4.99)	0.90	0.20
Net Profit Margin (PBT/Sales)	(%)	(5.52)	0.19	0.39
Return on Total Assets (PBT/Total Assets}	(%)	(7.79)	0.23	4.10
Return on Investment (ROI) (PBT/Networth)		(0.56)	0.01	0.04
Debt Equity Ratio (Total Liability/Networth)		5.90	3.89	3.55
Current Ratio (Current Asset/Current Liability)		3.59	3.01	3.57

LOCAL AGENCY FURTHER INFORMATION

PERFORMANCE:

The surplus available after making necessary provision for taxes is Rs.16.556 millions as against Rs.43.032 millions in the previous year.

CONTINGENT LIABILITIES:

Particulars	31.03.2010 (Rs. In Millions)	31.03.2009 (Rs. In Millions)
Preference Dividend payable	1.440	1.152

Bankers Charges Report as per Registry

Name of the company	SRI PALANI MURUGAN ENTERPRISES LIMITED
Presented By	R. Ashyanth, Director
1) Date and description of instrument creating the change	03.08.2003. Deeds of Hypothecation Agreement pertaining to - (i) Machinery, (ii) Book- Debts, and (iii) Goods, executed by the Company in favour of Bank of Baroda (hereinafter referred to as ‘the Bank), Corporate Banking Branch, Coimbatore.
2) Amount secured by the charge/amount owing on the securities of charge	Working Capital facility of Rs.40.000 millions agreed to be provided by the Bank to the company together with interest, additional interest, commitment charges etc., thereon.
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Borrower hereby hypothecates and charges to the Bank all moveable machinery of the company including all stocks and spare parts both present and future belonging to the Borrower being and lying in the Borrowers premises or godowns of or rented by the Borrower or otherwise used in connection with the business of the Borrower (but excluding claims such as claims on Life Insurance Policies, Goodwill, Outstanding, Debts, Claims for arrears of Rent, Benefit of executor contract and share in partnership) as security for the payment to the Bank on demand of the balance due to the Bank by the Borrower on the Cash Credit/Loan Account.
4) Gist of the terms and conditions and extent and operation of the charge.	a) The charge operates as security inter-alia, for the due repayment by the Company to the Bank the working capital facility of Rs.40.000 millions together with interest, additional interest, liquidated damages, premia on -prepayment or on redemption, costs, charges, expenses and all other moneys- payable by the company to the Bank in terms of the said Deeds of Hypothecation Agreement. b) The Company shall keep the goods hypothecated in marketable and good condition at its own costs and insure the same in the joint names of the company and the Bank.
5) Name and Address and description of the person entitled to the charge.	Bank of Baroda, Corporate Banking Branch, Bank Road, Coimbatore-641 018, Tamilnadu, India
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

This form is for	Modification of charge
Charge identification number of the modified	10090592
Corporate identity number of the company	U17111TZ1997PLC008012
Name of the company	SRI PALANI MURUGAN ENTERPRISES LIMITED
Address of the registered office or of the principal place of business in India of the company	126, Arts College Road, Coimbatore-641 018, Tamil Nadu, India
Type of charge	Book Debts Movable Property Immovable Property
Particular of charge holder	Bank of Baroda, Coimbatore Main Branch, Bank Road, Coimbatore-641 001, Tamilnadu, India
Nature of description of the instrument creating or modifying the charge	Multiple banking agreement - ceding of charges
Date of instrument Creating the charge	25.05.2009
Amount secured by the charge	Rs.88.900 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest As per agreement Terms of Repayment As per agreement Margin As per agreement Extent and Operation of the charge This charge operates to secure the loan amount of Rs.241.100 millions by way of multiple banking agreement - ceeding of charges
Short particulars of the property charged	1.Hypothecation of present and future Current Assets, Book Debts, Plant and Machinery, furniture and fittings, patterns, tools, laboratory equipments, computers, office equipments, stock of raw materials, stock in progress, finished goods, semi finished goods, packing materials, outstanding monies, receivables, bills, claims etc. 2. The whole of the company's immovable block assets including land and building at
Particulars of the present modification	Multiple banking agreement - ceding of charges

FIXED ASSETS:

· Freehold Land

· Leasehold land

· Building

· Machinery

· Electrical Machinery

· Furniture

· Vehicles

· Livestock

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.45.61
UK Pound	1	Rs.75.32
Euro	1	Rs.65.68

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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.