MIRA INFORM REPORT

Report Date :

25.07.2011

IDENTIFICATION DETAILS

Name :	GOKALDAS IMAGES PRIVATE LIMITED
Registered Office :	7 and 12, Industrial Suburb, II Stage, Yeshwanthpur, Tumkur Road, Bangalore – 560022, Karnataka
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	01.02.1995
Com. Reg. No.:	08-017081
Capital Investment / Paid-up Capital :	Rs.133.084 Millions
CIN No.: [Company Identification No.]	U18101KA1995PTC017081
Legal Form :	Private Limited Liability Company.
Line of Business :	Manufacturer, Importer and Exporter of Cotton Readymade Garments and Knitted Garments.
No. of Employees :	9000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (32)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 1100000
Status :	Moderate
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is a well established company having moderate track. There appears huge losses recorded by the company in the current year i.e. 2009-10. However, trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some caution.

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 PARTED BY

Name :	Mr. S. Ravi Kumar
Designation :	Accounts Manager
Contact No.:	91-9343785954
Date :	23.07.2011

LOCATIONS

Registered Office :	7 and 12, Industrial Suburb, II Stage, Yeshwanthpur, Tumkur Road, Bangalore – 560022, Karnataka, India
Tel. No.:	91-80-22964154/ 22964164/5/23377059/ 23377060/ 22964100 / 22964101
Mobile No.:	91-9343785954 (Mr. S. Ravi Kumar)
Fax No.:	91-80-22964164 / 22964165/ 22964100/ 01/ 02
E-Mail :	pmvenkat@gokaldas.com ravis@gokaldas.com
Website :	http://www.gokaldas.com
Location :	Owned
Factory :	(They have 9 Factories) English Blazer Division: # 67, Kadirenahalli Main Road, Subramanyapur Post, Bangalore – 560 022, Karnataka Tel. 91-80-26666181/191 Fax. 91-80-26666190 Designer Suit Division: 18A, Industrial Suburb, 2^nd Stage, Yeshwantpur, Tumkur Road, Bangalore – 560 022, Karnataka Tel. 91-80-23377059 Fax. 91-80-23377056 Indian Connection Division & Contour Apparels Division: 135/5, Industrial Suburb, 2^nd Stage, Yeshwantpur, Tumkur Road, Bangalore - 560 022, Karnataka Tel. 91-80-23377059 Fax. 91-80-23377056 At Rajaji Nagar, Bangalore - – 560 010, Karnataka, India

DIRECTORS

(AS ON 30.09.2010)

Name :	Mr. Jagadish Naraindas Hinduja
Designation :	Chairman
Address :	203, Pooja, Sankey Road, Upper Palace, Orchards, Bangalore – 560080, Karnataka, India
Date of Birth/Age :	31.03.1945
Date of Appointment :	01.02.1995
Name :	Mrs. Pushpa J Hinduja
Designation :	Director
Address :	203, Pooja, Sankey Road, Upper Palace, Orchards, Bangalore – 560080, Karnataka, India
Date of Birth/Age :	07.07.1945
Date of Appointment :	01.02.1995
Name :	Mr. Sumir J Hinduja
Designation :	Managing Director
Address :	203, Pooja, Sankey Road, Upper Palace, Orchards, Bangalore – 560080, Karnataka, India
Date of Birth/Age :	05.12.1968
Date of Appointment :	01.02.1995
Name :	Mr. Munish J Hinduja
Designation :	Director
Address :	203, Pooja, Sankey Road, Upper Palace, Orchards, Bangalore – 560080, Karnataka, India
Date of Birth/Age :	02.05.1972
Date of Appointment :	01.02.1995
Name :	Mr. Rajesh Adhikary
Designation :	Director
Address :	201-2, 2^nd A Wing, CTS 586 – II, Raheja Sherwood, Off W. E. Highway Goregaon East, Mumbai – 400063, Maharashtra, India
Date of Birth/Age :	18.11.1969
Date of Appointment :	21.04.2009

KEY EXECUTIVES

Name :	Mr. S. Ravi Kumar
Designation :	Accounts Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 30.09.2010)

Names of Shareholders	No. of Shares (Equity)
Jagadish Naraindas Hinduja	2405928
Pushpa J Hinduja	4319137
Sumir J Hinduja	2099970
Prakash Makhija	3757
Neeraj Varma	7
Sunil V Raheja	3757
Mohini V Raheja	3756
IL and FS Trust Company Limited A/C IL and FS Private Equity Trust – Leverage India Fund Address: IL @ FS Financial Centre, C 22, G Block, Bandra Kurla Complex, Bandra East, Mumbai 400051, Maharashtra, India	100
Makhija Beju	6
Total	8836418
Names of Shareholders	No. of Shares (Preference)
IL and FS Trust Company Limited A/C IL and FS Private Equity Trust – Leverage India Fund Address: IL @ FS Financial Centre, C 22, G Block, Bandra Kurla Complex, Bandra East, Mumbai 400051, Maharashtra, India	4300
Trustees IVC Employees Welfare Trust Address: IL @ FS Financial Centre, C 22, G Block, Bandra Kurla Complex, Bandra East, Mumbai 400051, Maharashtra, India	86
Arun Saha, Vibhav Kapoor Trustees, IL and FS Employees Welfare Trust Address: IL @ FS Financial Centre, C 22, G Block, Bandra Kurla Complex, Bandra East, Mumbai 400051, Maharashtra, India	86
Total	4472

(AS ON 30.09.2010)

Category	Percentage
Directors or relatives of directors	99.99
Other	0.01
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer, Importer and Exporter of Cotton Readymade Garments and Knitted Garments.

Products :

Woven Garments and Knitted Garments

Products Description	Item Code No.
Cotton Garments	6103.19,22,32,442
Woollen Garments	6103.11,21,31,41
Knitted Garments	6109.10,90

Brand Name :

PVH and Stun Craft.

Exports :

Products :

· Readymade Garments

· Knitted Garments

Countries :

· USA

· UK

· Canada

Imports :

Products :

Fabrics, Accessories and Machinery

Countries :

· China

· Hong Kong

· Pakistan

Terms :

Selling :

L/C, Credit, CAD

Purchasing :

L/C, Credit, Advance TT

GENERAL INFORMATION

Customers :

Wholesalers, Retailers and End Users.

· Ann Taylor

· Armani Exchange

· H and M

· J C Penney

· Jockey

· Levis

· Nautica

· Nike

· Geoffery Beene

· Esprit

· Calvin Klein

· Ashworth

· Reebok

No. of Employees :

9000 (Approximately)

Bankers :

· Export Import Bank of India,

Centre 1, Floor 21, World Trade Centre, Cuffe Parade, Mumbai -400005, Maharashtra, India

· State Bank of India,

Overseas Branch, St Marks Road, LHO Compound, Bangalore -560001, Karnataka, India

· HDFC Bank, M G Branch, India

· Canara Bank, Avani Road Branch, Bangalore

Facilities :

SECURED LOAN	31.03.2010	31.03.2009
	(Rs. In Millions)
Term Loans Under TUFS	67.391	81.578
Others Term Loans	356.835	353.604
Working Capital Loans	3762.607	1692.108
From Others	0.893	1.857
Total	4187.726	2129.147
UNSECURED LOAN	31.03.2010	31.03.2009
	(Rs. In Millions)
Shirt Terms loans from Banks – repayable with in one year	45.000	0.000
From Directors	20.833	0.000
Total	65.833	0.000

Banking Relations :	--
Auditors :
Name :	B K Ramadhyani and Company Chartered Accountant
Address :	4B, Chitapur Bhavan, No. 68, 8^th Main, 15^th Cross, Malleswaram, Bengalore 560055, Karnataka, India
Associates/Subsidiaries :	· Gokaldas Images (USA) Inc. Suite 2704/05,1400 Broadway, New York, HY – 10018 Tel. 001-212-7303950 Fax. 001-212-7303970 · Jeans Wash Company Daddapallapur, Bangalore, Karnataka, India

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
10528000	Equity Shares (with 100 equity shares with differential voting rights of Rs.10/- each)	Rs.10/- each	Rs.105.280 millions
4472	0.001% Compulsorily Convertible Preference Shares of Rs.10000/- each	Rs.10000/- each	Rs.44.720 millions
	Total		Rs.150.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8836418	Equity Shares (Precious year 8,836,418 Equity Shares of Rs.10 each comprising of 8,836,318 allotted as filly paid up for consideration other than cash and 100 Equity Shares with Differential voting rights allotted for cash)	Rs.10/- each	Rs.88.364 Millions
4472	0.001% Compulsorily Convertible Preference Shares of Rs.10000/ each fully paid.	Rs.10000/- each	Rs.44.720 millions
	Total		Rs.133.084 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		133.084	133.084	133.084
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		149.319	1111.205	1044.853
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		282.403	1244.289	1177.937
LOAN FUNDS
1] Secured Loans		4187.726	2129.147	1432.074
2] Unsecured Loans		65.833	0.000	0.000
TOTAL BORROWING		4253.559	2129.147	1432.074
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		4535.962	3373.436	2610.011
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		553.917	613.824	691.635
Capital work-in-progress		0.000	150.000	0.000
INVESTMENT		83.163	83.163	31.466
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1113.609	1315.705	1172.751
	Sundry Debtors	1415.512	536.768	248.994
	Cash & Bank Balances	70.051	130.977	79.959
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	1886.362	867.056	766.099
Total Current Assets		4485.534	2850.506	2267.803
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	304.224	64.932	315.220
	Other Current Liabilities	174.933	143.968	29.230
	Provisions	114.093	123.072	45.679
Total Current Liabilities		593.250	331.972	390.129
Net Current Assets		3892.284	2518.534	1877.674
MISCELLANEOUS EXPENSES		6.598	7.915	9.236
TOTAL		4535.962	3373.436	2610.011

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		TOTAL (A)	4077.600	4454.000	4417.900
Less	EXPENSES
		TOTAL (B)	4533.000	4051.600	4041.600
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(455.400)	402.400	376.300
Less	FINANCIAL EXPENSES (D)		427.200	239.000	167.400
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(882.600)	163.400	208.900
Less/ Add	DEPRECIATION/ AMORTISATION (F)		78.300	87.200	100.600
	PROFIT BEFORE TAX (E-F) (G)		(960.900)	76.200	108.300
Less	TAX (H)		1.000	9.800	2.900
	PROFIT AFTER TAX (G-H) (I)		(961.900)	66.400	105.400
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1085.700	1019.400	914.000
Less	APPROPRIATIONS
		Transfer to General Reserve	123.800	1085.800	1019.400
	Earnings Per Share (Rs.)		(108.85)	7.51	--

Particulars	31.03.2011
Sales Turnover (Approximately)	4400.000

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(23.59)	1.49	2.38
Return on Total Assets (PBT/Total Assets}	(%)	(19.07)	2.20	3.65
Return on Investment (ROI) (PBT/Networth)		(3.40)	0.06	0.09
Debt Equity Ratio (Total Liability/Networth)		17.16	1.97	1.54
Current Ratio (Current Asset/Current Liability)		7.56	8.58	5.81

LOCAL AGENCY FURTHER INFORMATION

REVIEW OF OPERATIONS

The operational margins of the company were significantly impacted due to the above factors resulting Into non-commensurate debt along-with Inadequate operational cash flows

· On account of recession, clients put pressure on prices and margins leading to delay / postponement of big ticket orders during the post recession months.

· Low capacity utilization on account of delay / postponement of big ticket orders.

· GIL did not wish to scout for alternate customers in a risk ridden environment which led to lower capacity utilization.

· Substantial increase in raw material prices without commensurate rise in sales realization.

· Credit risk due to recessionary market conditions impacted the financial position of many customers to pick and choose of orders.

CURRENT YEAR’S OUTLOOK:

During the current year the company expects its order book to be strong when compared to its previous year as the outlook in the US market seems to be recovering in the Retail sector. However, the pressure on the margins still exists. The company plans to adopt the most efficient methods of productivity and marketing efforts to have the margins improved.

TRADE REFERENCE:

· Gokaldas Exports – Bangalore

· Gokaldas Intimate Ware – Bangalore

FORM 8

Corporate identity number of the company	U18101KA1995PTC017081
Name of the company	GOKALDAS IMAGES PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	7 and 12 Industrial Suburb, II Stage, Yeshwanthpur, Tumkur Road, Bangalore -560022, Karnataka, India pmvenkat@gokaldas.com
This form is for	Creation of charge
Type of charge	· Book Debts · Movable property (not being pledge) · Floating Charge
Particular of charge holder	Export Import Bank of India, Centre 1, Floor 21, World Trade Centre, Cuffe Parade, Mumbai 400005, Maharashtra, India Email: eximbro@blr.vsnl.net.in
Nature of instrument creating charge	Joint Deed of Hypothecation (JDOH) dated 10.06.2011 executed by Gokaldas Images Private Limited ("The Borrower)" in favour of Export Import Bank of India ("Exim Bank") and other CDR Lenders creating security by way of a pari passu first charge on the entire moveable fixed assets and pari passu 2nd charge on the current assets of the Borrower, both present and future, for the WCTL Term Loan of Rs.55.400 Millions granted to the Borrower.
Date of instrument Creating the charge	10.06.2011
Amount secured by the charge	Rs.55.400 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest 8% Terms of repayment Repayable in 16 Quarterly Installments commencing from March 31,2012. Margin Nil Extent and operation of the charge Pari passu 1st charge over the borrower's fixed assets and 2nd pari passu charge over the borrower's current assets, both present and future. The charge created under the aforesaid JDOH shall rank first pari passu charge with all the term lenders and second pari passu charge with the working capital lenders in accordance with the priority of charges as mentioned in JDOH.
Short particulars of the property charged (Including location of the property)	The whole of the movable fixed asset of the Borrower including its movable plant and machinery, machinery spares, tools and accessories and other movables both present and future whether installed or not The whole of the Borrower's stocks of raw materials, semi-finished and finished goods, consumable stores, book debts, receivables and consumable stores and all other movable assets of the Borrower The description of current assets and moveable fixed assets.

FIXED ASSETS:

· Goodwill

· Land

· Leasehold Premises

· Building

· Plant and Machinery

· Office Equipments

· Furniture and Fixtures

· Vehicles

· Electrical Installations

· Computers

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.44.38
UK Pound	1	Rs.72.34
Euro	1	Rs.63.87

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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		32

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.