MIRA INFORM REPORT

Report Date :

20.12.2012

IDENTIFICATION DETAILS

Name :	SKM ENTERPRISES PRIVATE LIMITED (w.e.f. 26.03.2003)
Formerly Known As :	MANTRA SECURITIES PRIVATE LIMITED
Registered Office :	12 SKM House, 6^th Khetwadi, Charni Road, Mumbai - 400004, Maharashtra
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	09.01.1984
Com. Reg. No.:	11-031790
Capital Investment / Paid-up Capital :	Rs.10.663 Millions
CIN No.: [Company Identification No.]	U24110MH1984PTC031790
Legal Form :	Private Limited Liability Company
Line of Business :	Trader of Ferrous and Non – Ferrous and Supplier of Electronic and Electrical Products, Stainless Steel Wires and Cables
No. of Employees :	17 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (33)

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

Maximum Credit Limit :	USD 140000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having a moderate track record. There appears some dip in the sales turnover and profits of the company during 2012. The profitability of the company appears to be low. There appear huge external borrowings recorded by the company. However, trade relations are reported as fair. Business is active. Payment terms are reported to be slow. 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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION PARTED BY

Name :	Mr. Dipak
Designation :	Accountant
Contact No.:	91-22-66363145
Date :	17.12.2012

LOCATIONS

Registered Office :	12 SKM House, 6^th Khetwadi, Charni Road, Mumbai - 400004, Maharashtra, India
Tel. No.:	91-22-66363145 / 66362034 / 66374900 / 66276800
Fax No.:	91-22-66374900
E-Mail :	info@skmsteels.com skment12@yahoo.co.in
Website :	www.skmenterprise.co.in
Location :	Owned
Warehouse :	Located at: Katamboli, Panvel, Mumbai, Maharashtra, India Bhiwandi, Mumbai, Maharashtra, India

DIRECTORS

As on 28.09.2012

Name :	Mr. Chirag Shantilal Shah
Designation :	Director
Address :	704, Gokul Apartments, 14^th Khetwadi, Back Road, Mumbai – 400004, Maharashtra, India
Date of Birth/Age :	19.03.1977
Date of Appointment :	31.10.2001
DIN No.:	00081637
Name :	Mr. Kirtilal Moolchand Shah
Designation :	Director
Address :	Flat No. 1001, 10^th Floor, Garden View, B J Mehta Marg, Mumbai – 400006, Maharashtra, India
Date of Birth/Age :	01.03.1949
Date of Appointment :	09.01.1984
DIN No.:	00105703
Name :	Mr. Dinesh Poonamchand Shah
Designation :	Director
Address :	13, Kshatriya Bhavan, 1^st Floor, Room No.5,13, Sadashiv Lane, Mumbai – 400004, Maharashtra, India
Date of Birth/Age :	01.03.1949
Date of Appointment :	01.10.1998
DIN No.:	00085626
Name :	Mr. Sevantilal Raichand Shah
Designation :	Director
Address :	802-A, Aditya Tower, Old Sadanand Wadi, BP Road, Mumbai – 400004, Maharashtra, India
Date of Birth/Age :	21.07.1950
Date of Appointment :	01.101998
DIN No.:	00086026
Name :	Mr. Shailesh Ramniklal Shah
Designation :	Director
Address :	28-30, Fakir Mahal, Room No.17, 4^th Floor, Khetwadi Back Road, Mumbai – 400004, Maharashtra, India
Date of Birth/Age :	03.12.1973
Date of Appointment :	01.08.2003
DIN No.:	00106058

KEY EXECUTIVES

Name :	Mr. Dipak
Designation :	Accountant

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 28.09.2012

Names of Shareholders	No. of Shares
Kirtilal Moolchand Shah	94030
Veenaben Kirtilal Shah	97000
Amit Kirtilal Shah	94500
Kirtilal Moolchand Shah (HUF )	96270
Ruchita Amit Shah	360180
Anju Kalpesh Chowdhary	80000
Amit Kirtilal Shah (HUF)	98000
Sejal Chirag Shah	50000
Rupak Developers Private Limited, India	25000
K K S S Builders Private Limited, India	31250
Shagun Tremix Private Limited, India	10000
Chirag Shantilal Shah	30000
Sushmadevi V Saraf	10
Vinod V Saraf	10
Total	1066250

As on 28.09.2012

Equity Share Break up (Percentage of Total Equity)

Category	Percentage
Bodies corporate	6.81
Directors or relatives of Directors	93.19
Total	100.00

BUSINESS DETAILS

Line of Business :

Trader of Ferrous and Non – Ferrous and Supplier of Electronic and Electrical Products, Stainless Steel Wires and Cables

Products :

ITC Code	Product Descriptions
72193590	S S Sheet
72171010	M S Wire
7221	S S Wire Roda

Terms :

Selling :

L/C / Cash / Credit

Purchasing :

L/C / Cash / Credit (60 Days)

GENERAL INFORMATION

Suppliers :

Jindal Stainless Limited

Customers :

End Users

No. of Employees :

17 (Approximately)

Bankers :

• Bank of India (1984)

Address: C P Tank Branch, Chansdaramji Girls High School, Building 95, Vithalbhai Patel Road, Mumbai 400004, Maharashtra, India

Facility : Cash Credit Rs.30.000 Millions

Tel. No.: 91-22-28312317 / 23885257

Banker’s Experience: The contacted person (Bank of India) has denied to part details to us.

• ICICI Bank

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2012	As on 31.03.2011
From Bank of India
Cash Credit Facility	44.784	32.887
Channel Financing from Bank of India	0.000	25.000
Total	44.784	57.887
Unsecured Loan	As on 31.03.2012	As on 31.03.2011
From Bank	0.334	0.000
From Directors	5.800	33.296
From Shareholder	0.000	20.000
From Others	9.000	0.000
Intercorporate Deposits	10.000	0.000
Total	25.134	53.296

Banking Relations :	--
Auditors 1 :
Name :	M C Doshi and Company Chartered Accountants
Address :	307 Vaishali Apartments, 30/31, Parekh Street, Prarthana Samaj, Mumbai – 400004, Maharashtra, India
Tel. No.:	91-22-67437416 / 17
Fax No.:	91-22-23824232
E-Mail :	rmd@mcdoshi.pcm
PAN.:	AAUFM8321L
Auditors 2 :
Name :	R.A. Singh and Associates Chartered Accountants
Address :	25, Sai Baba Shopping Centre, Keshavrao Kadam Marg, Mumbai Central, Mumbai – 400008, Maharashtra, India
PAN.:	AABPC9170C
Other Related Parties :	Bharat Steel Yard SKM Steels Limited K.M. Shah and Two Others

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10 /- each	Rs.20.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1066250	Equity Shares	Rs.10 /- each	Rs.10.663 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		10.663	10.663	10.662
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		24.442	22.594	16.458
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		35.105	33.257	27.120
LOAN FUNDS
1] Secured Loans		44.784	57.887	68.213
2] Unsecured Loans		25.134	53.296	45.371
TOTAL BORROWING		69.918	111.183	113.584
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		105.023	144.440	140.704
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		0.431	0.560	0.551
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.010	0.006	0.005
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	21.221	74.788	95.011
	Sundry Debtors	79.306	174.915	319.481
	Cash & Bank Balances	0.383	0.116	5.475
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	15.069	3.858	7.042
Total Current Assets		115.979	253.677	427.009
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	11.045	105.307	283.192
	Other Current Liabilities	0.077	2.432	2.451
	Provisions	0.275	2.064	1.218
Total Current Liabilities		11.397	109.803	286.861
Net Current Assets		104.582	143.874	140.148
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		105.023	144.440	140.704

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	458.756	851.469	719.848
		Other Income	13.574	0.515	3.246
		TOTAL (A)	472.330	851.984	723.094
Less	EXPENSES
		Purchase of Stock –in-trade	375.855	794.779
		Changes in Inventories of Stock – in – Trade	53.568	20.222	706.445
		Employee Benefits Expenses	2.707	3.050
		Other Expenses	22.756	8.659
		TOTAL (B)	454.886	826.710	706.445
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		17.444	25.274	16.649
Less	FINANCIAL EXPENSES (D)		15.008	15.929	10.652
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		2.436	9.345	5.997
Less/ Add	DEPRECIATION/ AMORTISATION (F)		0.114	0.139	0.131
	PROFIT BEFORE TAX (E-F) (G)		2.322	9.206	5.866
Less	TAX (H)		0.474	3.071	1.958
	PROFIT AFTER TAX (G-H) (I)		1.848	6.135	3.908
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		17.956	11.821	7.913
	BALANCE CARRIED TO THE B/S		19.804	17.956	11.821
	IMPORTS
		Goods for Resale	17.975	77.617	44.960
	TOTAL IMPORTS		17.975	77.617	44.960
	Earnings Per Share (Rs.)		1.73	5.75	3.66

Expected Sales (2012-13) : Rs.1000.000 Millions

The above information has been parted by Mr. Dipak

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	0.39	0.72	0.54
Net Profit Margin (PBT/Sales)	(%)	0.51	1.08	0.81
Return on Total Assets (PBT/Total Assets}	(%)	1.99	3.62	1.37
Return on Investment (ROI) (PBT/Networth)		0.07	0.28	0.21
Debt Equity Ratio (Total Liability/Networth)		2.32	6.64	14.76
Current Ratio (Current Asset/Current Liability)		10.18	2.31	1.48

LOCAL AGENCY FURTHER INFORMATION

Note:

1. Experience of the Bank with the Company : Mentioned on Page No.6.
2. Asset classification as on 31.03.2012 : Mentioned on Page No.8
3. Associate Concurrence : Yes (Mentioned on Page No.7.)
4. Payment Condition : L/C / Cash / Credit (60 Days)

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	----------------------
14]	Estimation for coming financial year	Yes
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	Yes
18]	Major customers	No
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	No
21]	Market information	----------------------
22]	Litigations that the firm / promoter involved in	----------------------
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	----------------------
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

OPERATIONS

Sales and Other Income decreased to Rs.472.330 Millions against Rs. 851.984 Millions resulting into a fall of 44.57%. Gross Profit decreased to Rs.2.436 Millions against Rs. 9.345 Millions of the last year registering into a fall of 73.92%. Decrease in gross profit was on account of decreased volume of business and lower margins compared to last year.

TRADE REFERENCES

· Jindal Stainless Limited

FIXED ASSETS:

• Freehold Land
• Computer
• Scoter
• Furniture and Fixtures
• Air conditioner
• Office Equipment
• Weight Scales

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 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 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.54.74
UK Pound	1	Rs.89.02
Euro	1	Rs.72.48

INFORMATION DETAILS

Information Gathered by :	PJA
Report Prepared by :	NTH

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		33

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.