MIRA INFORM REPORT

Report Date :

07.11.2006

IDENTIFICATION DETAILS

Name :	SRI RANGANATHAR INDUSTRIES PRIVATE LIMITED
Registered Office :	12/45, Thadagam Road, Edayapalayam Post, Coimbatore - 641 025, Tamilnadu
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	26.11.1997
Com. Reg. No.:	18-8193
CIN No.: [Company Identification No.]	U29199TZ1997PTC008193
TAN No.: [Tax Deduction & Collection Account No.]	CMBS03146D
Legal Form :	Private Limited Liability company
Line of Business :	The company is a Manufacturer of Castings, Valves, etc., for various Industrial Applications. The company imports Capital Goods, Raw materials and Spares for own use

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 1750000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Directors are reported as experienced, respectable and resourceful industrialist. Their trade relations are fair. General financial position is good. Payments are usually correct and as per commitments. The company can be considered good for any normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office/ Factory :	12/45, Thadagam Road, Edayapalayam Post, Coimbatore - 641 025, Tamilnadu, India
Tel. No. :	91-422-2400141/2401433/2403433
Fax No.:	91-422-2400773/2405390
E-Mail :	sri@md3.vsnl.net.in
Website :	http://www.sriindia.net
Area :	20000 sq. ft.
Location :	owned
Factory 2 :	Unit II 7/79, Arasur Village, Thennampalayam, Coimbatore - 641107, Tamilnadu, India
Tel. No.:	91-422-688828/968/804
Fax No.:	91-422-689715/400773/405390
Windmills :	Tirunelveli District

DIRECTORS

Name :	Mr. V. Narayanasamy
Designation :	Chairman and Managing Director
Address :	No. 8, Ramalinga Nagar, I Cross, K. K. Pudur, Coimbatore – 641038, Tamilnadu, India
Date of Birth/Age :	15.12.1949
Date of Appointment :	26.11.1997
Experience :	33 years
Previous Employment :	Sri Ranganathar Industries
Name :	Smt. R. Prabhadevi
Designation :	Director
Address :	No. 8, Ramalinga Nagar, I Cross, K. K. Pudur, Coimbatore – 641038, Tamilnadu, India
Date of Birth/Age :	08.06.1960
Date of Appointment :	01.10.1998
Name :	Ms. N. Vinaya
Designation :	Director
Address :	No. 8, Ramalinga Nagar, I Cross, K. K. Pudur, Coimbatore – 641038, Tamilnadu, India
Date of Birth/Age :	02.09.1981
Date of Appointment :	04.02.2000
Name :	Mr. J. Elangoven
Designation :	Technical Director
Address :	2/126 – A, Teachers Colony, Chinniampalayam, Coimbatore – 641062, Tamilnadu, India
Date of Birth/Age :	15.05.1964
Date of Appointment :	23.08.2001

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Mr. V. Narayanasamy	873000
Smt. R. Prabhadevi	6000
Mr. N. Hari Krishna	58500
Mr. N. Vinaya	59500
Mr. J. Elangoven	2000
TOTAL	999000

BUSINESS DETAILS

Line of Business :	The company is Manufacturer of Castings, Valves, etc., for various Industrial Applications. The company imports Capital Goods, Raw materials and Spares for own use
Products :	Item Code No. Product Description 73259909 Castings & Valves
Exports to :	U.S.A., Italy, France, UK, Japan, Germany etc.
Imports from :	U.S.A

PRODUCTION STATUS

Particulars	Unit	Actual Production
SS Machined Castings	MT	347.31
NAS Machined Castings	MT	1438.21
ASM Machined Castings	MT	2.85
SS Rough Castings	MT	272.06
NAS Rough Castings	MT	241.53
ASM Rough Castings	MT	96.70
Industrial Valves	Nos.	14893

GENERAL INFORMATION

No. of Employees :	459 persons -- 26 persons as office staff, 325 persons in factory and 108 persons others
Bankers :	The Bank of Nova Scotia Classic Towers, 1547, Trichy Road, Coimbatore - 641 018, Tamilnadu, India Phone No. : 91-422-303404 State Bank of India Commercial Branch, Trichy Road, Coimbatore - 641018, Tamilnadu, India Standard Chartered Bank 19, Rajaji Salai, Chennai – 600001, Tamilnadu, India

Facilities :

	As on 31.03.2005 [Rs. in Millions]
SECURED LOANS
State Bank of India
Open Cash Credit	3.246
FCNR (B) Loan (Secured by hypothecation of specific machinery)	19.110
State Bank of Travancore
FCNR [B] Loan [Secured by hypothecation of specific machinery]	50.802
From Others
Hp- Finance from ICICI Bank Limited (Hire Purchase of Vehicle assets less interest pertaining to future period)	0.474
HP-Finance From ICICI Bank Limited (Hire Purchase of Vehicle assets less interest pertaining to future period)	0.968
Total	101.957

Banking Relations :	Satisfactory
Auditors :	T. V. Subramaniam & Associates Chartered Accountants Coimbatore, Tamilnadu, India
Associates :	Sri Ranganathar Valves Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1000000	Equity Shares	Rs. 10 /- each	Rs. 10.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
999000	Equity Shares	Rs. 10 /- each	Rs. 9.990 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital		9.990	8.830	8.830
3] Reserves & Surplus		435.805	345.189	287.400
NETWORTH		445.795	354.019	296.230
LOAN FUNDS
1] Secured Loans		73.633	59.289	101.958
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		73.633	59.289	101.958
DEFERRED TAX LIABILITIES		98.550	73.191	55.811
TOTAL		617.978	486.499	453.999
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		502.837	384.777	361.755
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	21.995	20.120	35.340
	Sundry Debtors	125.746	103.391	92.108
	Cash & Bank Balances	11.881	17.474	4.643
	Loans & Advances	59.744	56.403	36.052
Total Current Assets		219.366	197.388	168.143
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities and Provisions	104.225	95.666	75.899
Total Current Liabilities		104.225	95.666	75.899
Net Current Assets		115.141	101.722	92.244
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		617.978	486.499	453.999

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	722.238	555.853	416.478
Profit/(Loss) Before Tax	145.459	94.765	89.860
Provision for Taxation	47.855	28.443	7.300
Profit/(Loss) After Tax	97.604	66.322	82.560
Export Value	582.434	455.105	339.577
Import Value	83.899	35.751	31.663
Total Expenditure	537.498	425.191	303.270

KEY RATIOS

PARTICULARS		31.03.2005	31.03.2004	31.03.2003
PAT / Total Income	(%)	13.51	11.93	19.823
Net Profit Margin (PBT/Sales)	(%)	20.14	17.04	21.738
Return on Total Assets (PBT/Total Assets}	(%)	20.14	16.27	16.957
Return on Investment (ROI) (PBT/Networth)		0.32	0.26	0.303
Debt Equity Ratio (Total Liability/Networth)		0.39	0.43	0.600
Current Ratio (Current Asset/Current Liability)		2.10	2.06	2.215

LOCAL AGENCY FURTHER INFORMATION

Dividend :

An interim dividend of 70% on the paid up equity capital of the company was paid during the financial year 2004-05. This amounted to Rs. 6.988 millions inclusive of tax on the dividend. The directors do not recommend any further dividend and the above interim dividend is being treated as final.

Review of Operations

The total sales rose to Rs. 721.900 millions from Rs. 565.300 millions during the previous year, thus registering a growth of 28%. The profit before Interest Depreciation and tax was higher at Rs. 184.700 millions as against Rs. 130.700 millions during the previous year. After providing for higher depreciation of Rs. 35.200 millions on account of additional machinery, as against Rs. 28.600 millions in the previous year, the net profit was Rs. 145.500 millions as against Rs. 94.800 millions during the previous year.

The company continue to have the appreciation of its global customers for its quality and timely deliveries, as evident from the fact that significant part of its sales have been from repeat orders. All its plants continue to be certified for ISO standards and possess well known global product certifications such as PED – QMS, API – 6D, AD Merkblatt Wo, etc.

Capital Investment

The company made capital investment of Rs. 185.600 millions during the year out of which an amount of Rs. 95.600 millions was spent on building and machinery for doubling the production capacity at Unit I. The remaining amount of Rs. 90 millions was spent on installing 3 windmills having an installed capacity of 1800 KWH. The power generated from these windmills would be predominantly consumed for the company’s captive consumption. The above capital expenditure was financed by State Bank of Travancore.

Outlook for the current year :

The expansion of Unit I which was completed during the end of the last financial year has become fully operational during this year. Further the company proposes to install state of the art imported machinery during the current year which would make it more competitive and enable to improve its product range. Additional windmills with an installed capacity of 3200 KWH are proposed to be installed during the year. Once these windmills are commissioned the entire requirement for its production activities would be met by captive wind power generation. The surplus power could be sold. These measures are expected to substantially increase the company’s turnover and profitability. The company is considering expanding its product range and also diversifying in to new area at appropriate time.

Contingent Liabilities :

[Amount in Millions]

	2004-05	2003-04
Guarantee Issued by Banks	1.987	1.987
Demand of Sales tax penalty before authorities	0.089	0.123
5% Tax on windmill power generation not provided for	0.000	1.039

Liabilities regarding small scale undertakings have been determined to the extent such parties have been identified on the basis of information available with the company.

Generic Names of Principal Products/Services of the company are :

v Stainless Steel Castings

v Carbon Steel Casting

v Non Alloy Steel Castings

The company is Importer of Stainless Steel Melting Scraps

The company is Exporter of Castings and Valves.

The company is in trade terms with :

v Kasturi Machine Builders, Coimbatore, Tamilnadu, India

The company is an ISO 9001 company.

Fixed Assets :

Ø Land

Ø Building

Ø Plant and Machinery

Ø Office Equipment

Ø Furniture and Fixtures

Ø Electrical Equipment

Ø Motor Vehicles

Ø Computer and Accessories

Ø Tools and Equipments

Ø Buildings in progress

Form 8 Particular for creation or modification of charges

Corporation identity number or foreign company registrations number of the company	U29199TZ1997PTC008193
Name of the company	SRI RANGANATHAR INDUSTRIES PRIVATE LIMITED
Address	12/45, Thadagam Road, Edayapalayam Post, Coimbatore - 641 025, Tamilnadu
This Form is for	Modification of charge
Type of Charges	Equitable mortgage or mortgage of property by depositing the title deeds
Particular of the charge holder	State Bank of India Commercial Branch, Trichy Road, Coimbatore - 641018, Tamilnadu, India E-mail : sbiifbcbe@vsnl.com
Amount Secure by the charge	Rs. 293.000 millions
Brief of the principal terms and conditions and extent and operation of the charge	The loan is secured by Equitable Mortgage on the above mentioned properties of Unit II of the company
Description of the property charge whether it is a charge on	Immovable Properties
Modification charge Charge identification number of the charge to be modified	90008782
Brief Description of the instrument modifying the charge	Memorandum of deposit for creation of charge for term loan / overall limit
Date of instrument modifying the charge	04.07.2006
Particulars of the Property charged	8.53 acres of land situated in Chinnakkampalayam Village, Dharapuram Taluk, Erode District
Particulars of the present modification	Offer of additional security

Name of the company	SRI RANGANATHAR INDUSTRIES PRIVATE LIMITED
Presented By	Mr. V. Narayanasamy, CMD
1) Date and description of instrument creating the change	FCNR [B] Term Loan Agreement of Loan for overall working capital limit both dated 13.10.2004 Memorandum of deposit of title deeds on 13.10.2004
2) Amount secured by the charge/amount owing on the securities of charge	USD 1.83 million equivalent to Rs. 84 millions of Term Loan and Rs. 36 millions of working capital facilities
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Immovable, movable properties etc. at SF Nos. 364/1, 366/1, 364/5 at 12/45 Thadagam Road, Edayarpalayam, Coimbatore 641025 and 3 wind mills at Sy. Nos. 230, 231 & 233/1 Danakarkulam Village, Radhapuram Taluk, Tirunelveli District belonging to the company
4) Gist of the terms and conditions and extent and operation of the charge.	The loan is secured by first charge on the above mentioned property
5) Name and Address and description of the person entitled to the charge.	State Bank of Travancore Oppanakara Street Branch, Coimbatore
6) Date and brief description of instrument modifying the charge	Nil
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Nil

Corporation identity number or foreign company registrations number of the company	U29199TZ1997PTC008193
Name of the company	SRI RANGANATHAR INDUSTRIES PRIVATE LIMITED
Address	12/45, Thadagam Road, Edayapalayam Post, Coimbatore - 641 025, Tamilnadu
This Form is for	Creation of charge
Type of Charges	Hypothecation
Particular of the charge holder	Standard Chartered Bank 19, Rajaji Salai, Chennai – 600001, Tamilnadu, India E-mail : sankara.raman@in.standardchartered.com
Nature or description of the instrument creating charge	Unattested Memorandum of Hypothecation
Date of the instrument creating charge	06.09.2006
Amount Secure by the charge	Rs. 97.500 millions
Brief of the principal terms and conditions and extent and operation of the charge	Term Loan with exclusive first charge in favour of the bank. Interest at the rate as negotiated with and agreed by the bank. Repayment : 18 equal quarterly instalments with the first of such instalments payable at the end of 3^rd quarter from the date of first draw down.
Description of the property charge whether it is a charge on	Plant and machinery
Particulars of the Property charged	Wind mills for captive consumption 2 Numbers, 1250 KW Suzlon make Wind Turbine Generators whether now lying in or about or shall hereafter during the continuance of this security be brought into or installed / to be installed at Devarkulam Site, Tirunelveli District, Tamilnadu, India

AS PER WEBSITE

Profile
Established in the year 1983, Sri Ranganathar Industries Private Limited made its humble beginning as a small scale industry. Since then it has steadily grown to become one of the South India's premier companies engaged in the manufacturing and export of quality machined steel castings and industrial valves. Presently, it has graduated to a Medium Scale Industry with a total investment of USD 10.00 million. The company with its focus on providing quality products and service has also emerged as the market leader in the Steel Foundry Industry.

Quality Assurance

They, at Sri Ranganathar Private Limited, are fully aware that the success of any company is based on the quality of its products. This realization has helped the company identify a few core areas on the basis of which it has established its quality policy. Their quality policy is based on the following;

• Achieving total customer satisfaction through cost - effective and reliable products
• Improvement in Products, Process and People
• Earning quality reputation and market leadership.

Apart from this their strict adherence on manufacturing only quality products has resulted in the receiving a lot of certifications from various organizations as well as winning a lot of awards at both national and regional awards. Some of the certifications and the awards that they have received over the years are:

• ISO 9001 - 2000 Certified for Quality Systems by RW TUV, Germany.
• AD-MERKBLATT WO/TRD-100 by RW TUV, Germany
• CE Marketing Certified as per PED 97/23/EC/ Module H by RW TUV, Germany
• API 6D Monogram, API spec Q1, API spec 6D by API - USA (License for Manufacture of pipe line valves)
• PED Base material approval for specific grades as per annex of section 4.3 at PED/97/23/EC by RWTUV - Germany
• Approved Steel Casting Manufacturer for Marine Application by 3 international agencies -DNV- Norway. BV - France & Lloyds - UK
• Well known foundry as per Indian Boiler Regulations by Indian Boiler Regulation
• The company has been continuously receiving both national as well as regional awards for exports since 1996. We have been also regularly receiving of Indian Government's Prosperous Award Regional Trophy For Top Exports

Infrastructure
They have a world class infrastructure equipped with all the latest equipments and machinery. Their two manufacturing units spread over an area of 1,65,000 sq. ft has its foundry with an in-house pattern shop, a full fledged fettling / dressing facility with the latest fettling machines that include an in- house stainless steel shot blaster, as well as a back up sub-contractor facility. Apart from that they also have their own chemical laboratory where they conduct various quality control checks like: sand testing, mechanical testing, metallography, radiography etc

The Company is equipped with full pledged CNC Machine Shop, backed up by hydro-test equipments.

Separate manufacturing bays fitted with assembly & testing facilities for each type of Industrial Valves.

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.44.45
UK Pound	1	Rs. 84.83
Euro	1	Rs. 57.12

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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		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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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

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