MIRA INFORM REPORT

Report Date :

23.01.2014

IDENTIFICATION DETAILS

Name :	S.K.M. TECHNOLOGIES PRIVATE LIMITED (w.e.f. 29.09.2004)
Formerly Known As :	S.M.K. TOOLS PRIVATE LIMITED
Registered Office :	No. D-5, Road No.71 DA, Kukatpally, Gandhinagar, Hyderabad – 500037, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	26.03.1997
Com. Reg. No.:	01-026728
Capital Investment / Paid-up Capital :	Rs.73.606 Millions
CIN No.: [Company Identification No.]	U28995AP1997PTC026728
PAN No.: [Permanent Account No.]	AAECS4792E
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturing precision components and assemblies for Aerospace, Nuclear, Defense and other applications.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (26)

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

Maximum Credit Limit :	USD 114000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is en established company having a moderate track record. Management of the company has failed to file its financial for the year 2013 with the government department. As per previous year financial 2012, there appears accumulated loss recorded by the company. 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 – September 30, 2013

Country Name	Previous Rating (30.06.2013)	Current Rating (30.09.2013)
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

The current downturn provides an opportunity to push ahead with reforms to accelerate growth, says the latest India Development Update report released by the World Bank. The report says that the adverse effects of rupee depreciation are likely to be offset by the gains in the exports performance due to improved external competitiveness. Since May this year, the local currency has depreciated substantially and fell to a record level of Rs 68.85 to a dollar on August, 28.

A stagflation like situation appears to have arisen as inflation jumped to an eight month high of 6.46 % for the month of September. It is up from 6.10 % in August. Growth continues to be muted with factory output plunging to 0.6 % in August. Onion prices have risen nearly 300 % from last September. Vegetables cost nearly 90 % more than they did last year. Wake up to the economic contribution of slum dwellers. They contribute more than 7.5 % to the country’s gross domestic product, according to a recent study conducted in 50 top cities.

136000 estimated number of jobs created during the second quarter of the current financial year. 50000 estimated number of additional jobs in the field of corporate social responsibility in the coming years.

The International Finance Corporation expects to come out with its rupee linked bonds issue before the end of 2013 as a part of its plan to raise $ 1 billion. The Apple iPhone 5c (Rs 41900 for 16 GB variant) and 5s (Rs 53500 for 16GB variant) has been launched in India from 1^st November.

The Land Acquisition Act to provide just and fair compensation to farmers will come into force from January 1 next year, said Rural Development Minister Jairam Ramesh. The Act replaces a 119 year old registration. The Securities and Exchange Board of India has approved the trading of currency futures on the Bombay Stock Exchange. The exchange plans to launch the currency futures platform with advanced trading technology by the end of November.

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 / Head Office :	No. D-5, Road No.71 DA, Kukatpally, Gandhinagar, Hyderabad – 500037, Andhra Pradesh, India
Tel. No.:	91-40-23420110/11/23077859/23074913/23075899
Fax No.:	91-40-23720294/23075528
E-Mail :	skm.technologies@yahoo.com
Website :	http://www.skmtechnologies.com
Branch Office :	No. 101, lake Mont Enclave, Basavanagar, Bangalore – 560037, Karnataka, India

DIRECTORS

As on 29.09.2012

Name :

Mr. Krishnarao Balusu

Designation :

Managing Director

Address :

H No. 8-3-224/7, F-59, Madhura Nagar, S R Nagar Post, Hyderabad – 500 038, Andhra Pradesh, India

Date of Birth/Age :

08.07.1947

Date of Appointment :

26.03.1997

PAN No.:

AAMOB5633Q

DIN No.:

00941619

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	Date of cessation	Company/ LLP Status	Defaulting status
1	U28995AP1997PTC026728	S.K.M. TECHNOLOGIES PRIVATE LIMITED	Managing director	26/03/1997	26/03/1997	-	Active	NO
2	U29252AP2008PLC058876	SAMUHA ENGINEERING INDUSTRIES LIMITED	Director	28/04/2008	28/04/2008	-	Active	NO

Name :

Rama Devi Balusu

Designation :

Director

Address :

H No. 8-3-224/7, F-59, Madhura Nagar, S R Nagar Post, Hyderabad – 500 038, Andhra Pradesh, India

Date of Birth/Age :

17.06.19855

Date of Appointment :

01.06.1997

PAN No.:

ABXPB8446R

DIN No.:

00942573

MAJOR SHAREHOLDERS

As on 29.09.2012

Names of Shareholders	No. of Shares
Krishnarao Balusu	5053979
Rama Devi Balusu	976275
B. Hari Kumar	315965
B. Kiran Prasad	134058
B. Tanuja	668508
B. Appaiah	98878
B Raja Babu	30250
Bose C	13750
B. Sanjay	68887
Total	7360550

Equity Share Break up (Percentage of Total Equity)

As on 29.09.2012

Category	Percentage
Directors or relatives of Directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing precision components and assemblies for Aerospace, Nuclear, Defense and other applications.

Products :

Product Description	ITC Code
Jigs/Fixtures/Parts	84663020
Aerospace Components	88039000
Precision Components	99999999

GENERAL INFORMATION

Customers :

· Moog Inc, USA

· Magellan Navigation Inc, USA

· Pratt and Whitney, USA

· Pratt and Whitney, Canada

· Medtronics, USA

· Process Conception Ingenierie, France

· Turbomeca - Safran Group, France

· General Electric Company, USA

· AERCO, USA

No. of Employees :

Not Available

Bankers :

· State Bank of India, Balanagar Branch, Balanagar, Hyderabad - 500037, Andhra Pradesh, India

· United Bank of India, Secunderabad Branch, 2-1-162, 1st Floor, Shankala Complex, M. G. Road, Secunderabad - 500003, Andhra Pradesh, India

Facilities :

SECURED LOANS	31.03.2012 Rs. In Millions	31.03.2011 Rs. In Millions
Long Term Borrowings
Term loans from banks	22.080	34.760
Short Term Borrowings
Loans repayable on demand from banks	104.609	52.264
Loans repayable on demand from others	12.478	7.307
Total	139.167	94.331

Banking Relations :	--
Auditors :
Name :	Akasam and Associates Chartered Accountants
Address :	10-1-17/1/1, Level 1 and 2, Masab Tank, Hyderabad – 500004, Andhra Pradesh, India
PAN No.:	AABFT4264G

CAPITAL STRUCTURE

As on 29.09.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
8000000	Equity Shares	Rs.10/- each	Rs.80.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7360550	Equity Shares	Rs.10/- each	Rs.73.606 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	73.606	73.606
(b) Reserves & Surplus	(44.984)	59.054
(c) Money received against share warrants	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000
Total Shareholders’ Funds (1) + (2)	28.622	132.660
(3) Non-Current Liabilities
(a) long-term borrowings	43.243	44.187
(b) Deferred tax liabilities (Net)	4.363	5.466
(c) Other long term liabilities	0.000	0.000
(d) long-term provisions	1.504	1.296
Total Non-current Liabilities (3)	49.110	50.949
(4) Current Liabilities
(a) Short term borrowings	143.915	84.211
(b) Trade payables	21.685	31.967
(c) Other current liabilities	153.616	152.511
(d) Short-term provisions	2.597	4.226
Total Current Liabilities (4)	321.813	272.915
TOTAL	399.545	456.524
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	218.883	180.194
(ii) Intangible Assets	0.460	0.000
(iii) Capital work-in-progress	0.000	67.342
(iv) Intangible assets under development	0.000	0.000
(b) Non-current Investments	0.000	0.000
(c) Deferred tax assets (net)	0.000	0.000
(d) Long-term Loan and Advances	4.335	4.132
(e) Other Non-current assets	8.782	6.625
Total Non-Current Assets	232.460	258.293
(2) Current assets
(a) Current investments	0.000	0.000
(b) Inventories	121.840	129.112
(c) Trade receivables	32.113	21.512
(d) Cash and cash equivalents	3.386	13.570
(e) Short-term loans and advances	9.746	34.037
(f) Other current assets	0.000	0.000
Total Current Assets	167.085	198.231
TOTAL	399.545	456.524

SOURCES OF FUNDS		31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		29.442
2] Share Application Money		0.000
3] Reserves & Surplus		109.844
4] (Accumulated Losses)		0.000
NETWORTH		139.286
LOAN FUNDS
1] Secured Loans		161.080
2] Unsecured Loans		19.375
TOTAL BORROWING		180.455
DEFERRED TAX LIABILITIES		2.057
TOTAL		321.798
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		130.625
Capital work-in-progress		64.521
INVESTMENT		0.000
DEFERRED TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	118.909
	Sundry Debtors	40.413
	Cash & Bank Balances	0.156
	Other Current Assets	16.946
	Loans & Advances	41.305
Total Current Assets		217.729
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	31.473
	Other Current Liabilities	54.010
	Provisions	5.594
Total Current Liabilities		91.077
Net Current Assets		126.652
MISCELLANEOUS EXPENSES		0.000
TOTAL		321.798

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	97.909	68.997	86.349
		Other Income	NA	NA	3.696
		TOTAL (A)	NA	NA	90.045
Less	EXPENSES
		Manufacturing and other expenses			33.546
		Payment and benefit employees			14.352
		Administrative and selling expenses			23.856
		Accretion / (Decretion)			(17.892)
		TOTAL (B)	NA	NA	53.862
Less	PROFIT/(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		NA	NA	36.183
Less	FINANCIAL EXPENSES (D)		NA	NA	17.491
	PROFIT/(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(78.395)	18.774	18.692
Less	DEPRECIATION/ AMORTISATION (F)		26.745	15.557	16.519
	PROFIT/(LOSS) BEFORE TAX (E-F) (G)		(105.140)	3.217	2.173
Less	TAX (H)		NA	NA	(0.161)
	PROFIT/(LOSS) AFTER TAX (G-H) (I)		NA	NA	2.334
	EARNINGS IN FOREIGN CURRENCY		30.100	19.747	NA
	Earnings Per Share (Rs.)		NA	(0.93)	0.94

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	NA	NA	1.89
Net Profit Margin (PBT/Sales)	(%)	(107.39)	4.66	1.91
Return on Total Assets (PBT/Total Assets}	(%)	(26.31)	0.83	3.36
Return on Investment (ROI) (PBT/Networth)		(3.67)	0.02	0.08
Debt Equity Ratio (Total Debt /Networth)		6.54	0.97	1.30
Current Ratio (Current Asset/Current Liability)		0.52	0.73	2.39

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	No
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	Yes
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	No
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	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

UNSECURED LOANS:

Particulars	31.03.2012 Rs. In Millions	31.03.2011 Rs. In Millions
Long Term Borrowings
Deferred payment liabilities	21.163	9.427
Short Term Borrowings
Loans repayable on demand	0.813	0.598
Loan and advances from related parties	25.843	24.042
Loan taken for vehicles	0.172	0.000
Total	47.991	34.067

CORPORATE INFORMATION:

The Company was established in the year 1986. The Company is presently manufacturing precision components and assemblies for Aerospace, Nuclear, Defense and other applications. The company is accredited with AS 9100C (based on including ISO 90001: 2008) certification from KEMA, Netherlands. Company's registered head office is located at D-5, Road NO.7, IDA Kukatpally, Gandhi Nagar, Hyderabad.

INDEX OF CHARGE:

Sr. No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10220512	17/05/2010	80,000,000.00	UNITED BANK OF INDIA	SECUNDERABAD BRANCH, 2-1-162, 1st FLOOR, SHANKALA COMPLEX, M.G.ROAD, SECUNDERABAD, Andhra Pradesh - 500003, INDIA	A86372588
2	10134293	03/12/2008	22,300,000.00	State Bank of India	SMECCC, 2nd Floor, LHO Building, Bank Street, Koti, Hyderabad, Andhra Pradesh - 500095, INDIA	A53119145
3	90134825	16/10/2004	7,000,000.00	STATE BANK OF INDIA	BALANAGAR BRANCH, HYDERABAD, Andhra Pradesh, INDIA	-
4	90136351	14/06/2011 *	250,000,000.00	State Bank of India	Balanagar Branch, Balanagar, Hyderabad, Andhra Pradesh - 500037, INDIA	B15065832
5	90136203	26/02/2003	10,000,000.00	STATE BANK OF INDIA	BALANAGAR BRANCH, HYDERABAD, Andhra Pradesh, INDIA	-
6	90136194	27/01/2003	21,500,000.00	STATE BANK OF INDIA	BALANAGAR BRANCH, HYDERABAD, Andhra Pradesh, INDIA	-
7	90135686	24/09/2004 *	1,735,000.00	STATE BANK OF INDIA	BALANAGAR BRANCH, HYDERABAD, Andhra Pradesh, INDIA	-

*Date of modification Charges

FIXED ASSETS:

· Land

· Building

· Plant and Machinery

· Computer

· Vehicles

· Furniture and Fixture

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.61.92
UK Pound	1	Rs.101.98
Euro	1	Rs.83.93

INFORMATION DETAILS

Report Prepared by :

VNT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--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
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		26

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.