MIRA INFORM REPORT

Report Date :

03.11.2012

IDENTIFICATION DETAILS

Name :	SWAMY COTTON MILL TIRUPUR PRIVATE LIMITED
Registered Office :	SF No. 407/2, Peerchankadu, Vellanchettipalayam, Mangalam, District Coimbatore-641663, Tamilnadu
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	01.04.2005
Com. Reg. No.:	18-011697
Capital Investment / Paid-up Capital :	Rs. 60.000 Millions
CIN No.: [Company Identification No.]	U17111TZ2005PTC011697
TAN No.: [Tax Deduction & Collection Account No.]	CMBS07845F
PAN No.: [Permanent Account No.]	AAICS9165P
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of All types of Woven Garments.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (29)

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

Maximum Credit Limit :	USD 380000
Status :	Moderate
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Profitability of the company appears to be low. However trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for small 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 – 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.

LOCATIONS

Registered Office :	SF No. 407/2, Peerchankadu, Vellanchettipalayam, Mangalam, District Coimbatore-641663, Tamilnadu, India
Tel. No.:	91-421-2344042/ 2344996/ 2345192
Fax No.:	91-421-2345750
E-Mail :	swamy_mills@swamycottonmill.co.in info@swmycottonmill.co.in
Website :	http://www.swammycottonmill.co.in

DIRECTORS

AS ON 30.09.2011

Name :	Mr. Chinnaiah Gounder Easwaran
Designation :	Director
Address :	5/99B, Peerchankadu Vellanche, Tipalayam Mangalam-641663, Tamilnadu, India
Date of Birth/Age :	04.01.1956
Date of Appointment :	01.04.2005
DIN No.:	01984677
Name :	Mr. Vasuki Easwaran
Designation :	Director
Address :	5/99B, Peerchankadu Vellanche, Tipalayam Mangalam-641663, Tamilnadu, India
Date of Birth/Age :	13.07.1965
Date of Appointment :	01.04.2005
DIN No.:	01274001
Name :	Mr. Manojkumar Easwaran
Designation :	Additional Director
Address :	5/99B, Peerchankadu Vellanche, Tipalayam Mangalam-641663, Tamilnadu, India
Date of Birth/Age :	08.04.1987
Date of Appointment :	01.11.2010
DIN No.:	01984707

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U17111TZ2005PTC011697	SWAMY COTTON MILL TIRUPUR PRIVATE LIMITED	Whole-time director	30/09/2011	01/11/2010	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2011

Names of Shareholders	No. of Shares
Chinnaiah Gounder Easwaran	360000
Vasuki Easwaran	120000
Manojkumar Easwaran	45000
A Chinnian Govnder	12000
Easwaran Kalaivani	45000
C Deivathal	12000
P Natraja Gounder	6000
TOTAL	600000

AS ON 30.09.2011

Equity Shares Break Up	Percentage of Holding
Directors or relatives of Directors	100.00
TOTAL	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of All types of Woven Garments
Products :	· Fabric Venture – Weaves · Bedford Cord – Plain · Poplins – Oxford · Cambric – Twill · Sheeting – Gabardine · Satin Bed Linen- Mat · Percol – Broke Twill · Interlinigs – Drill · Flannelette – Herring Bone · Canvas- Crepe

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• State Bank of Travancore, Tirupur Branch, Good Shed Road, Tirupur -641601, Tamilnadu, India
• ICICI Bank Limited

Facilities :

Secured Loan	Rs. In Millions 31.03.2011	Rs. In Millions 31.03.2010
Rupee term loans secured
Rupee term loans banks secured	112.832	108.488
Working capital loans secured
Working capital loans banks secured	217.243	145.148
Loans taken for fixed assets secured
Loans taken for vehicles secured	1.188	1.704
TOTAL	331.263	255.340
Unsecured Loan	Rs. In Millions 31.03.2011	Rs. In Millions 31.03.2010
Loans directors unsecured	64.485	17.464
TOTAL	64.485	17.464

Banking Relations :	--
Auditors :
Name :	N Rajan And Associates Chartered Accountant
Address :	Amarjothi House, 157, Kumaran Road, Tirupur-641601, Tamilnadu, India
PAN No.:	AAFFN8571L

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
600000	Equity Shares	Rs.100/- each	Rs. 60.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
600000	Equity Shares	Rs.100/- each	Rs. 60.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		60.000	60.000	30.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		36.873	29.845	27.255
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		96.873	89.845	57.255
LOAN FUNDS
1] Secured Loans		331.263	255.340	249.812
2] Unsecured Loans		64.485	17.464	61.349
TOTAL BORROWING		395.748	272.804	311.161
DEFERRED TAX LIABILITIES		0.000	0.453	0.000
TOTAL		492.621	363.102	368.416
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		187.259	163.256	178.051
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	224.158	152.489	113.206
	Sundry Debtors	101.658	48.984	92.970
	Cash & Bank Balances	0.922	1.329	0.347
	Other Current Assets	7.064	6.223	8.176
	Loans & Advances	11.500	14.985	19.182
Total Current Assets		345.302	224.010	233.881
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	37.549	20.276	43.516
	Other Current Liabilities	0.313	0.265
	Provisions	2.078	3.623	0.000
Total Current Liabilities		39.940	24.164	43.516
Net Current Assets		305.362	199.846	190.365
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		492.621	363.102	368.416

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	461.677	421.456	337.309
		Other Income	NA	NA	NA
		TOTAL (A)	NA	NA	NA
Less	EXPENSES
		Office Expenses	NA	NA	NA
		Administrative Expenses
		Advertising Expenses
		TOTAL (B)	NA	NA	NA
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		49.168	52.056	48.444
Less	FINANCIAL EXPENSES (D)		26.956	27.314	18.714
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		22.212	24.742	29.730
Less/ Add	DEPRECIATION/ AMORTISATION (F)		15.360	20.661	22.953
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		6.852	4.081	6.777
Less	TAX (H)		1.340	1.492	0.823
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		5.512	2.589	5.954
	Earnings Per Share (Rs.)		9.19	--	--

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
Net Profit Margin (PBT/Sales)	(%)	1.48	0.97	2.01
Return on Total Assets (PBT/Total Assets}	(%)	1.27	1.05	1.65
Return on Investment (ROI) (PBT/Networth)		0.07	0.04	0.12
Debt Equity Ratio (Total Liability/Networth)		4.50	3.31	6.19
Current Ratio (Current Asset/Current Liability)		8.65	9.27	5.37

LOCAL AGENCY FURTHER INFORMATION

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	No
10]	Designation of contact person	No
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	No
15]	Capital in the business	Yes
16]	Details of sister concerns	No
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
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

OVERVIEW

a) The remunerative prices and good demand for yarn. Both in the domestic and international markets for most of the year enabled the company to maintain the profit margins despite the steep rise in raw materials costs. However the ban on exports of cotton yarn from December 2010 resulted in the company having to hold stocks of exports yarn by the end of the financial year.

b) However, the continued shortage of power in Tamilnadu has affected utilization levels and increased energy costs.

c) The prevalent acute shortage of labour has also affected the performance of their Tamilnadu units. Not with standing these external factors the company’s performance in the year 2010-11 was commendable and the company achieved the highest profit figures of the company’s history.

d) During the year, the company had taken measures to improve the performance of the weaving division, as a result of which, there were significant improvement in the divisions efficiency. The turnover of the division increased, however the higher yarn costs negated the effects of improved efficiency levels. The company is optimistic of improved performance of this division during the current financial year.

e) The company’s turnover of Rs. 461.600 Millions during the year, registered a significant growth of 10% over the previous year due to better capacity utilization and increased sales realization. This coupled with improvement operational efficiencies enhanced the PBIT to Rs. 6.900 Millions for the year, as against the corresponding figure of Rs. 4.100 Millions in the previous year.

PROSPECTS FOR THE CURRENT YEAR

· There was a lot of optimism at the start of the year about the growth prospects for the textile industry.

· As the government opened up exports of cotton yarn from April 2011 there were expectations of maintaining the healthy margins seen during 2010/11. However the huge stocks of cotton yarn that was held by exporters coupled with a slowdown in demand saw domestic and international cotton prices fell sharply by over 25% from the peak levels seen during march 2011.

· As a result of this, the prices of cotton stocks held by the company are higher than current market prices. If this trend were to continue, it will adversely affect the operating margins in cotton yarn. Since the closure of dyeing units in Triupur, the demand for yarn in that region has been affected. Similarly the imposition of central excise duty on branded garments has also affected the hosiery cotton yarn market.

· But the acute shortage of power is anticipated to continue in Tamilnadu.

· In order to mitigate the impact of acute labour and power shortages and to take advantage of technology advancements.

FINANCE

1. The company has been availing working capital limits and term loans for creation of assets from Allahabad Bank and State Bank of Travancore and the outstanding secured loan as on 31.03.2011 to the secured creditors stood at Rs.330.073. Millions.

2. The company has fully repaid credit limits for acquiring vehicles from ICICI Bank Limited during the year.

3. The company has, during the financial year, availed financial year assistance for purchasing vehicles (Jeep, Nissan Micra, Jeep II) from Kotak Mahindra Prime Limited (an NBFC) and the amount due to them stood at Rs.1.189 Millions as on 31.03.2011.

FORM 8

Corporate identity number of the company	U17111TZ2005PTC011697
Name of the company	SWAMY COTTON MILL TIRUPUR PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	SF No. 407/2, Peerchankadu, Vellanchettipalayam, Mangalam, District Coimbatore-641663, Tamilnadu, India
This form is for	Modification of charge
Charge identification number of the charge to be modified	10034383
Type of charge	· Immovable property · Book debts · Movable property (not being pledge) · Others
Particular of charge holder	State Bank of Travancore, Tirupur Branch, Good Shed Road, Tirupur -641601, Tamilnadu, India
Nature of instrument creating charge	01 Letter regarding the grant of individual limits within the overall working capital limit - C and I 12 02 Working capital demand loan cum FCNR (B) loan agreement - FCNR (B) - 2 03 Supplemental Agreement of loan for increase in the overall working capital limits C and I 8 04 Supplemental Agreement of hypothecation of goods and assets C and I - 9 05 Memorandum of Extension of equitable Mortgage
Date of instrument Creating the charge	20.01.2011
Amount secured by the charge	Rs. 191.500 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest CC of Rs.120.000 Millions and ADHOC CC of Rs.30.000 Millions - 4.5% above BR presently 12.5% p a monthly rests Terms of repayment Working Capital Limits - repayable on demand TLs as per repayment schedules agreed upon with the bank Margin CC - RM, SIP, FG, Receivables ( cover period of 90 days) - 25% LC - 20% FLC - Nil TLs - 25% and BG - 15 to 100% in case of disputed liabilities Extent and operation of the charge TL- I Charge on Fixed Assets Viz., EM of land and Building and hypothecation of machinery and equipment, fixtures etc., proposed to be constructed/installed with TL. II pari-passu charge on the entire current assets of the Company and EM on the landed prop. of the aggregate area of 21.86Acres, for the WC. CC- I Charge on the entire current assets of the Company (Existing and Future) on pari-passu basis with Allahabad Bank and Extension of excl. I Charge over the Fixed Assets available for TL. LC-Dox of title covered under LC
Short particulars of the property charged (Including location of the property)	TL- I Charge on Fixed Assets Viz., EM of land and Building and hypothecation of machinery and equipment, fixtures etc., proposed to be constructed/installed with TL. Pari-passu charge on the entire current assets of the Company and EM on the landed prop. Of the aggregate area of 21.86 Acres, for the WC. CC- I Charge on the entire current assets of the Company (Existing and Future) on pari-passu basis with Allahabad Bank and Extn of excl. I Charge over the Fixed Assets available for TL. LC-Dox of title covered under LC second charge over the fixed assets of the company ( first charge is shared by SBT and Allahabad Bank) 1.71 acres in SF No 407/15, 408/1E, 1F, 1G, 1D, 1C and 407/14 situated at Peerchankadu, Semmandampalayam Village Sulur TK Tirupur registered in the name of the company
Date of instrument modifying the charge	13.01.2010
Particulars of the present modification	The overall credit limits stand modified to Rs.19150.000 Millions in view of the sanction of adhoc CC WCDL of Rs.30.000 Millions, enhancement of CC to Rs.120.000 Millions and reduction of BG to Rs.150.000 Millions and EM extended on the immovable properties belonging to the company in favour of the bank for the due repayment of the entire dues together with interest, cost expenses and other dues from the bank. Other terms and conditions remain same and unchanged.

FIXED ASSETS

· Building

· Computer

· Furniture and Fittings

· Land

· Machinery

· Plant and Machinery

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 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. 53.66
UK Pound	1	Rs. 86.37
Euro	1	Rs. 69.24

INFORMATION DETAILS

Report Prepared by :

DPT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		29

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	-

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.