MIRA INFORM REPORT

Report Date :

19.02.2011

Note:

Given address could not be confirmed.

IDENTIFICATION DETAILS

Name :	SOUNDARARAJA MILLS LIMITED (w.e.f. 07.10.1967)
Formerly Known As :	SOUNDARARAJA MILLS PRIVATE LIMITED
Registered Office :	Soundararaja Buildings, G.T. N. Salai, Dindigul-624005, Tamilnadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	11.06.1937
Com. Reg. No.:	181-14821
CIN No.: [Company Identification No.]	U17111TZ1937PLC014821
TAN No.: [Tax Deduction & Collection Account No.]	CHES00305E/ CHES16772A
PAN No.: [Permanent Account No.]	AAACS8799R
Legal Form :	A Closely held Public Limited Liability Company.
Line of Business :	Manufacturers and Exporters of Synthetic and Cotton Yarn.

RATING & COMMENTS

MIRA’s Rating :

A (57)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 2800000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an old and well established company having fine track. General financial position is good. Trade relations are reported as fair. Business is active. Payments are reported to be 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

INFORMATION DECLINED BY

Management Non Co-operative.

LOCATIONS

Registered/ Administrative Office :	Soundararaja Buildings, G.T. N. Salai, Dindigul-624005, Tamilnadu, India
Tel. No.:	91-451-2430104 / 2430105
Fax No.:	91-451-2430593
E-Mail :	srmaccounts@soundararaja.com soundaraja@satyam.net.in
Website :	http://www.soundararaja.com
Factory 1 :	Soudararaja Mills Road, Dindigul - 624 003, Tamilnadu, India
Tel. No.:	91-451-2470067
Fax No.:	91-451-2471407
Factory 2 :	Kamarajar Salai, Nedungadu - 609603, Pondicherry State, India
Tel. No.:	91-4368-261293/ 261284
Fax No.:	91-4368-261519

DIRECTORS

As on 16.09.2010

Name :	Mr. Ranjit Soundarajan
Designation :	Chairman and Managing Director
Address :	Lakshmi Soundara, G.T. N. Salai, Dindigul-624005, Tamilnadu, India
Date of Birth/Age :	16.07.1963
Date of Appointment :	01.07.1985
Name :	Mrs. Sangeetha Soundarajan
Designation :	Executive Director
Address :	Lakshmi Soundara, G.T. N. Salai, Dindigul-624005, Tamilnadu, India
Date of Appointment :	18.02.2008
Name :	Mr. Narayanaraja Muralidharan
Designation :	Director
Address :	SRM Staff Quarter, SR Mills Road, Dingigul-624003, Tamilnadu, India
Date of Birth/Age :	09.05.1959
Date of Appointment :	30.04.2006
Name :	Mr. Ramchandran Sridharan
Designation :	Director
Address :	93, New agraharam, Palani Road, Dindigul-624001, Tamilnadu, India
Date of Birth/Age :	04.12.1942
Date of Appointment :	30.04.2006
Name :	Mr. Rajagopal Ramakrishnan Arvind
Designation :	Director
Address :	No. A 34, Vivekananda Nagar, Dindigul-624001, Tamilnadu, India
Date of Birth/Age :	27.10.1969
Date of Appointment :	30.04.2006
Name :	Mr. V Athinarayanasamy
Designation :	Executive Director
Address :	Old-17, New-25, Krishnarao, Second St. Dindigul-624001, Tamilandu, India
Date of Appointment :	24.06.2010
Name :	Mr. Kiran Ranjit Soundarajan
Designation :	Director
Address :	Lakshmi Soundara’ G.T.N. Salai, Dindigul-624005, Tamilnadu, India
Date of Appointment :	24.06.2010
Name :	Mr. D Saketh Ramasamy
Designation :	Director
Address :	Door No. A/.21, Vivekanandhar Nagarl, Dindugal-624001, Tamilnadu, India
Date of Appointment :	05.06.1991
Date of Ceasing:	24.06.2010

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 16.09.2010

Names of Shareholders	No. of Shares
Soundarajan N.	16387
Soundarajan N. HUF – II	4685
Saroja Soundarajan	115709
Ranjit Soundarajan	449931
Kiran R Solundarajan	33748
Yashwant R Soundarajan	33751
Vijayashree	20580
Sujatha Samasekar	20580
Nithyarjuna Traders Private Limited	20580
Sasha Traders Private Limited	20646
Soundararaja Sasha Industries Limited	20646
K and Y Enterprises Private Limited	200
D Saketh Ramasamy	135995
Priya R.	9564
Jayalakshmi V	19000
Indra R	22559
Dhanalkshmir R	4660
Balasubramanian D R	1820
Sujatha D	4112
Sudha D	500
Alamelu Achil.Sl.	500
Deivarayan Chetiar Rm. M. Ar. Pr. M	540
Ghanambal Achi. St. S	1066
Govindarajulu Naidu D.	1280

Equity Share Breakup (Percentage of Total Equity)

As on 30.09.2010

Category	Percentage
Bodies corporate	18.00
Directors or relatives of Directors	71.00
Others	11.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Exporters of Synthetic and Cotton Yarn.

Products :

Product Description	ITC Code
Cotton Yarn	52.06
Synthetic Yarn	55.09 and 55.10

PRODUCTION STATUS AS ON 31.03.2010

Particulars	Unit	Actual Production
Cotton Yarn	Kgs.	2447016.06
Polyester cotton yarn	Kgs	1197061.71
Fibre Yarn	Kgs.	2265719.25
Waste	Kgs	1429292.70

GENERAL INFORMATION

No. of Employees :

Not Divulged by the Management

Bankers :

• Corporation Bank, Industrial Finance Branch, Trichy Road, Coimbatore-641018, Tamilnadu, India
• State Bank of India, Dindigul
• The Lakshmi Vilas Bank Limited, Dindigul
• IDBI Bank Limited, Madurai
• Indian Overseas Bank, Dindigul

Facilities :

Secured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
From Banks
Working Capital Loan form Banks	136.253	753.269
Term Loan from Banks	838.873	1548.279
Total	975.126	2301.548
Unsecured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
Fixed Deposits	68.540	123.145
Trade Deposit	0.100	0.100
Total	68.640	123.245

Banking Relations :	--
Auditors :
Name :	Mr. G. Muralidharan Chartered Accountant
Address :	1 and 2 Veerapathran Street, Timber Leaves Apartmnet, Nungambakkam, Chennai-600034, Tamilnadu, India

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
3000000	Equity Shares	Rs. 10/- each	Rs. 30.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
969336	Equity Shares	Rs. 10/- each	Rs. 9.693 Millions

Of the above 390000 Equity Shares of Rs. 10/- each have been allotted as fully paid up by way of Bonsu shares by capitalization of reserve.

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		9.693	9.693	9.693
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		703.936	546.645	643.531
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		713.629	556.338	653.224
LOAN FUNDS
1] Secured Loans		975.126	2301.548	2596.069
2] Unsecured Loans		68.640	123.245	173.680
TOTAL BORROWING		1043.766	2424.793	2769.749
DEFERRED TAX LIABILITIES		76.500	276.500	276.500
TOTAL		1833.895	3257.631	3699.473
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		903.276	2392.772	2677.181
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.459	0.800	0.800
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	719.689	717.843	896.187
	Sundry Debtors	97.541	108.833	173.274
	Cash & Bank Balances	20.603	26.862	36.592
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	186.138	251.908	287.698
Total Current Assets		1023.971	1105.446	1393.751
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	0.000	0.000	0.000
	Other Current Liabilities	91.547	218.838	349.911
	Provisions	2.264	22.549	22.348
Total Current Liabilities		93.811	241.387	372.259
Net Current Assets		930.160	864.059	1021.492
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1833.895	3257.631	3699.473

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	1055.570	1818.634	2221.154
		Other Income	34.554	371.825	263.442
		Wind Energy Generation	113.831	131.270	86.593
		TOTAL (A)	1203.955	2321.729	2571.189
Less	EXPENSES
		Raw Material Consumed	562.468	987.801	1384.985
		Salaries, Wages, Bonus and Gratuity	120.961	172.359	203.647
		Power and Fuel	155.909	259.778	318.476
		Stores Consumed	30.242	44.778	66.816
		Lease Rentals Repairs	29.180	35.342	96.103
		Administrative and Selling Expenses	49.960	114.109	158.032
		Bad Debts written off	10.507	0.000	0.000
		Inventory Adjustments	15.254	291.881	[149.810]
		TOTAL (B)	974.481	1906.048	2078.249
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		229.474	415.681	492.940
Less	FINANCIAL EXPENSES (D)		274.057	348.550	313.812
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		[44.583]	67.131	179.128
Less/ Add	DEPRECIATION/ AMORTISATION (F)		60.343	163.726	173.417
	PROFIT BEFORE TAX (E-F) (G)		[104.926]	[96.595]	5.711
Less	TAX (I)		121.071	0.290	1.250
	PROFIT AFTER TAX (G-I) (J)		[302.283]	[96.885]	4.461
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		[76.286]	20.599	16.138
	BALANCE CARRIED TO THE B/S		[225.997]	[76.286]	20.599
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	56.023	161.549	498.890
	TOTAL EARNINGS		56.023	161.549	498.890
	IMPORTS
		Raw Materials	0.000	5.533	15.003
		Stores & Spares	0.854	1.560	2.923
	TOTAL IMPORTS		0.854	7.093	17.926
	Earnings Per Share (Rs.)		[108.24]	[99.95]	4.60

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	[28.11]	[4.17]	0.17
Net Profit Margin (PBT/Sales)	(%)	[9.94]	[5.31]	0.26
Return on Total Assets (PBT/Total Assets}	(%)	[5.44]	[2.76]	0.14
Return on Investment (ROI) (PBT/Networth)		[0.15]	[0.17]	0.01
Debt Equity Ratio (Total Liability/Networth)		1.59	4.79	4.81
Current Ratio (Current Asset/Current Liability)		10.92	4.58	3.74

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF SUNDRY CREDITORS

(Rs.in Millions)

Particulars	31.03.2010	31.03.2009	31.03.2008
Sundry Creditors	0.000	0.000	0.000

Note:

The Registered office of the company has been shifted from No. 8, Old No. 36A, B M Avenue, Chennai-28, Tamilnadu, India to present address w.e.f. 05.09.2008

Review of Operations:

The company has achieved an operating Profit of Rs. 229.474 Millions during the year as compared to last year of Rs. 415.681 Millions.

The company’s performance was severely impacted and could report lower turnover, lower profit because of the following reasons.:-

1) The Global economic melt down has had a very severe impact on the Textile Industry in India.

2) The regular increase in interest rates affected the financial results severely. Inspite of all these adverse factors, the company s above to withstand in the market due to strategic policies adopted by the management.

3) Due to frequent power cuts and also as a result of shortage of labour force, the production has comedown.

Exports:

The Exports targets could not be achieved because of economic recession in Europe and also non- availability of quality cotton to the requirement of export requirements.

Energy Division:

A Strategic decision has been taken to strengthen the core activity by value addition and integration in to polyester based industrial textiles. The wind mills were sold in the financial year 2009-10.

Outlook for the current year:

The outlook for the current year is very encouraging because of repayment of loans to banks through the sale of wind assets and now performing units.

CONTINGENT LIABILITIES

Particulars	31.03.2010 Rs. in Millions
Bank Guarantees	0.000
Letter of Credit	12.133
Liability for Income Tax (under Dispute)	26.000

Bankers Charges Report as per Registry

Corporate identity number of the company	U17111TZ1937PLC014821
Name of the company	SOUNDARARAJA MILLS LIMITED
Address of the registered office or of the principal place of business in India of the company	Soundararaja Buildings, G.T. N. Salai, Dindigul-624005, Tamilnadu, India
This form is for	Modification of Charge
Charge identification number of the charge to be modified	10023962
Type of charge	Book Debts Movable Property
Particular of charge holder	Corporation Bank, Industrial Finance Branch, Trichy Road, Coimbatore-641018, Tamilnadu, India
Nature of instrument creating charge	Bank Letter
Date of instrument Creating the charge	05.02.2010
Amount secured by the charge	Rs. 70.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest Repayment of Term Loans of Rs. 150.000 Millions forming part of existing total credit facilities of Rs. 131.500 Millions and for present limit of Rs. 70.000 Millions terms remains as per Bank’s original sanction. Terms of Repayment Repayment of Term Loans of Rs. 150.000 Millions forming part of existing total credit facilities of Rs. 131.500 Millions and for present limit of Rs. 70.000 Millions terms remains as per Bank’s original sanction Margin Repayment of Term Loans of Rs. 150.000 Millions forming part of existing total credit facilities of Rs. 131.500 Millions and for present limit of Rs. 70.000 Millions terms remains as per Bank’s original sanction Extent and Operation of the charge Modified credit facilities of Rs. 70.000 Millions (Existing Rs. 131.500 Millions) are secured:- Primarily by way of hypothecation of entire current assets both present and future along with the other working capital bankers. Collaterally secured by way of second charge on entire fixed assets including its movable assets both present and future along with the other term loan lenders.
Short particulars of the property charged	Entire current assets and entire fixed assets including its movable assets.
Date of instrument modifying the charge	27.05.2009
Particulars of the present modification	Modification is for reduction of existing credit limits Rs. 131.500 Millions to Rs. 70.000 Millions as follows:- Cash Credit Rs. 50.000 Millions (Existing) Letter of Credit (Import and Inland) Rs. 20.000 Millions (Existing) Term Loans Rs. Nil (Since Rs. 61.500 Millions repaid) Thus the total limit stands at Rs. 70.000 Millions

Fixed Assets:

· Land

· Building

· Plant and Machinery

· Electrical Machinery

· Furniture and Fittings

· Vehicles

· Live Stock

AS PER WEBSITE

Profile:

Soundararaja Mills, Pioneers in the field of Textiles came into existence in the year 1937. Late Sri.G.T.Narayanaswamy Naidu laid the foundation of the mill with a great passion to produce Quality Yarn. From the beginning, they focused to produce fine quality yarn and made every effort to achieve this objective. Today they are the market leader and active worldwide exporter of Synthetic and cotton yarn. 

The success over the years further strengthens the slogan - "Soundararaja In pursuit of Excellence". Further, the Govt. of India has recognized them as a "Star Export House”. The expertise and quality workmanship has won them a notable place in the world of business. They are also into markets that go beyond the borders of INDIA.

The Group Comprises of four independent production centers with an aggregate capacity of 1,40,000  Ring, Twisting and Airjet Spindles. While the company has grown significantly through the years, the core values of serving the customers both ethically and responsibly has remained the same.

Testing Facilities:

Quality is the way of life at Soundaraja, no compromise will be made in quality and nothing is left to chance. In conformity with industry norm worldwide the mill has established well equipped quality Assurance Lab for testing Cotton and Yarn. Each unit is equipped with Ultra Modern Scanning instruments such as Uster Fibroglow 380, Uster Unevenness Tester Model UT - 4, Uster Classimat Model IV, Premier Compusorter Model V and Mesdan Splicing Strength Tester.     

Process followed

· The team spares no pain in the selection of quality raw cotton available in the market

· Manual Segregation of contamination from bale cotton before issue to process

· In Blowroom, they are processing through Sieger contamination control system

· Everyday production is analyzed for any defects on both Weaving and Knitting Yarn

· All yarn are cleared by SIRO clearer fitted in most advanced Muratec 21C Autoconer

· All the cones are checked in Ultra Violet Lamp

· In house container stuffing facility available for Dye Cones

· Carton Packing as well as Pallet Packing is done based on customers needs

· They Establish the Quality overseas and in domestic markets by continuous modernization & improving production

· Good work practices and the dedication of the H.R personnel further ensures the same

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.45.18
UK Pound	1	Rs.73.04
Euro	1	Rs.61.43

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	7
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		57

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.