MIRA INFORM REPORT

Report Date :

10.11.2006

IDENTIFICATION DETAILS

Name :	EASTERN COALFIELDS LIMITED
Registered Office :	Sanctoria, P O Dishergarh District, Burdwan – 713333, West Bengal
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	01.11.1975
Com. Reg. No.:	21-30295
CIN No.: [Company Identification No.]	U99999WB1975PTC030295
TAN No.: [Tax Deduction & Collection Account No.]	CALE01860F
PAN No.: [Permanent Account No.]	S-0409-D-S
Legal Form :	Subject is a subsidiary of Coal India Limited and ultimately owned by Government of India.
Line of Business :	The company is engaged in the business of Mining and Agglomeration of Hard Coal.

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small

Maximum Credit Limit :
Status :	Moderate
Payment Behaviour :	Slow but delayed
Litigation :	Clear
Comments :	Subject is a Government of India company having huge accumulated losses. Its financial position can be regarded as poor. Its payments are reported as slow due to bureaucratic lethargy. Since it is a Government of India Company, lenders and creditors can feel confident for their exposures.

LOCATIONS

Registered Office :	Sanctoria, P O Dishergarh District, Burdwan – 713333, West Bengal, India
Tel. No.:	91-341-2520414
Fax No.:	91-341-2202113
E-Mail :	eclcos17@rediffmail.com
Website :	http://coalindia.nic.in

DIRECTORS

Name :	Mr. A. Kalam
Designation :	Chairman and Managing Director
Name :	Mr. S R Thakur
Designation :	Director
Name :	Mr. M L Sethia
Designation :	Director
Name :	Mr. Sabyasachi Sen
Designation :	Director
Name :	Mr. A K Sen
Designation :	Director
Name :	Mr. R P Ritolia
Designation :	Director
Name :	Mr. R K Singh
Designation :	Director
Name :	Mr. Deepak Chakravarti
Designation :	Director
Name :	Mr. D K Verma
Designation :	Director
Name :	Mrs. Aruna Makhan
Designation :	Director
Name :	Mr. M Viswanathan
Designation :	Company Secretary
Name :	Mr. P Roy
Designation :	Chief General Manager – Finance
Name :	Mr. A.K.Sinha
Designation :	Director (Finance)
Name :	Mr. U.S.Upadhyay
Designation :	Director (Technical) Operation
Name :	Mr. A.K.Paul
Designation :	Director (Technical) P&P
Name :	Mr. A. Chattopadhyay
Designation :	Director (Personnel)
Part Time Directors :
Dr. Sabyasachi Sen, IAS	Principal Secretary, Commerce  & Industries Govt. of W/Bengal “Writers Building” Kolkata.
Mr. Sukumar Das	Land Reforms Commissioner & Principal Secretary, Land & Land Reforms Deptt., Govt. of W/Bengal, Kolkata – 1
Mr. P.R. Mandal	Advisor (Projects) Ministry of Coal, Govt. of India, “ Shastri Bhawan” New Delhi.
Mr. S. Bhattacharya	Director (Finance) Coal India Limited 10, N.S. Road, Kolkata – 1
Mr. H.K.Padhee	Chief Operating Manager Eastern Railways 17, N.S. Road, Kolkata – 1
Mr. R.K. Sen	Director (Technical), Damodar Valley Corpn. “DVC Towers”, VIP Road, Kolkata – 54
Special Director appointed by BIFR :
Mrs. Aruna Makhan	Director, 10 (First Floor), Hemkunt Colony, New Delhi-110048

BUSINESS DETAILS

Line of Business :

The company is engaged in the business of Mining and Agglomeration of Hard Coal.

GENERAL INFORMATION

Bankers :

Not Available

Banking Relations :	--
Auditors :	Saha Ganguli and Associates Chartered Accountants West Bengal
Associates/Subsidiaries :	Coal India Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
2500000000	Equity Shares	Rs. 10/- each	Rs. 25000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2218450000	Equity Shares	Rs. 10/- each	Rs. 22184.500 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		22184.500	22184.500	22184.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		0.054	0.054	[44629.100]
4] (Accumulated Losses)		[56183.383]	[47892.962]	0.000
NETWORTH		[33998.829]	[25708.408]	[22444.600]
LOAN FUNDS
1] Secured Loans		0.000	0.000	6.000
2] Unsecured Loans		6808.406	7086.445	9381.800
TOTAL BORROWING		6808.406	7086.445	9387.800
DEFERRED TAX LIABILITIES
TOTAL		[27190.423]	[18621.963]	[13056.800]
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		13060.310	15029.195	15745.600
Capital work-in-progress		425.279	439.049	739.500
INVESTMENT		4.100	4.100	0.800
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3092.784	2604.080	2512.900
	Sundry Debtors	3211.157	6843.377	10773.500
	Cash & Bank Balances	8526.453	6287.046	4888.500
	Other Current Assets	183.112	177.817	0.000
	Loans & Advances	955.808	1146.214	1077.600
Total Current Assets		15969.314	17058.534	19252.500
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	56649.426	51152.841	49027.300
	Provisions			1.400
Total Current Liabilities		56649.426	51152.841	49028.700
Net Current Assets		[40680.112]	[34094.307]	[29776.200]
MISCELLANEOUS EXPENSES		--	--	233.500
TOTAL		[27190.423]	[18621.963]	[13056.800]

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	33674.051	30672.755	37362.500
Profit/(Loss) Before Tax	[1498.411]	[3263.757]	[3387.800]
Provision for Taxation	--	--	--
Profit/(Loss) After Tax	[1498.411]	[3263.757]	[3387.800]
Total Expenditure	40164.113	36387.506	39638.100

KEY RATIOS

PARTICULARS		31.03.2005	31.03.2004	31.03.2003
PAT / Total Income	(%)	[4.45]	[10.64]	[9.07]
Net Profit Margin (PBT/Sales)	(%)	[4.45]	[10.64]	[9.07]
Return on Total Assets (PBT/Total Assets}	(%)	[5.16]	[10.17]	[9.68]
Return on Investment (ROI) (PBT/Networth)		[0.04]	[0.13]	[0.15]
Debt Equity Ratio (Total Liability/Networth)		[1.87]	[2.27]	[2.60]
Current Ratio (Current Asset/Current Liability)		0.28	0.33	0.39

LOCAL AGENCY FURTHER INFORMATION

Financial Result

The Gross Sales turnover during the year under review was Rs. 38941.7 millions compared to Rs. 34757.4 millions during the year 2003-04, resulting in an increase of 12.04 % over last year. The loss for the year 2004-05 is Rs. 6792 millions compared to loss of Rs. 3263.800 millions of 2003-04 resulting an increase in loss by Rs. 3528.2 millions. This is mainly due to the arrear and Wages arising out of the NCWA VII negation and shortfall in Production in spite of gain due to increase in Coal Sale Price with effect from 16.06.2004.

History

Raniganj Coalfield, which falls under E.C.L. is the birth place of coal mining in the Country.  In 1774, first mining operation in the Country was started in this Coalfield by Sumner & Heatly. In 1820, first Coal Company M/s. Alexander & Company was established.  In 1835, first Indian Enterprise i.e. M/s. Carr & Tagore Company was formed.  In 1843, the first joint stock Coal Company i.e. M/s. Bengal Coal Company was formed.  Since then, underground coal mining operation had been continuing in Raniganj Coalfields by numerous small owners. Raniganj Coalfield remained the principal producer of coal in India  in 19th Century and considerable period of the 20th Century.

Nationalisation And After

In In 1973, all Non-Coking Coal Mines were nationalized and brought under Eastern Division of Coal Mines Authority Limited.  In 1975 Eastern Coalfields Limited, a Subsidiary of Coal India Limited (C.I.L) was formed and inherited all the private sector coal mines of Raniganj Coalfields

Geographic Location & Area

ECL’s total command area is 1620 Sq.Kms.  It is situated in two States – West Bengal and Jharkhand.  Area of Raniganj Coalfield is 1530 Sq. Kms spreading over Burdwan, Birbhum, Bankura and Purulia Districts in West Bengal and Dhanbad District in Jharkhand.  Saherjuri Coalfield in Deoghar District of Jharkhand is having an area of 10 Sq.Kms is being worked as SP Mines Area under ECL.  Hura Coalfields in Godda District of Jharkhand is also under ECL having an area of 80 Sq.Kms. ECL’s largest opencast mine Rajmahal is being operated here.  Heart of Raniganj Coalfield is however, in Burdwan District bounded by Ajoy River in North and Damodar River in South.  Kasta Coalfields is located on the North of Ajoy while Mejia and Parbelia are on South of Damodar River.  In Dhanbad Distgrict, Mugma field lies on the west of Barakar River. Formation of coal seems has occurred mainly in two sequence at ECL – Raniganj measures & Barakar measures.  Raniganj measures covers the entire coalfield of Raniganj – Pandaveswar, Kajora, Jhanjra Bankola, Kenda, Sonepur, Kunustoria, Satgram, Sripur, Sodepur & Partly at Salanpur Areas.  Barakar measures covers two areas Salanpur & Mugma Areas, SP Mines & Rajmahal  Areas are mainly related to Barakar measure & Talchair series).

Mines & Manpower

At present ECL has 107 operating mines out of which 88 are underground mines and remaining 19  are opencast mines. The existing manpower in Eastern Coalfields Limited as on 1.12.2005  is 102964, out of which  female employees are 8383 (8.14%).

Coal Reserve

The Total Coal Reserve in ECL upto 600 metre depth   is 38.73 billion tonnes out of which 22.62 billion in the State of West Bengal and 15.91 Billion tonne is in the state of Jharkhand.  Total proven reserve in the State of West Bengal is 11.38 billion tonne and 3.94 billion tonne in the state of Jharkhand.

Best Quality Non-Coking Coal

The Raniganj measures coal has special characteristic containing the best type of non-coking coal reserves in the Country with average ash percentage of less than 20%.  The main features are high volatile content, long flame, quick ignition and high heat value.  All the heat intensive industries like Glass, Ceramic, Fertilizers Refractories, Forging & are useful for modern Power Houses.  Other Industries also prefer Raniganj Coal.  The entire Export of Coal from the Country is being done from Raniganj Coalfield.  Barakar measures coals are low moisture, high fixed carbon, low sulphur & are suitable for modern Power Houses & other small scale industries.  Talchar series coals are high moisture, high ash, low UHV, low sulphur & are suitable for Modern Power Houses  & other small scale industries.

Consumers

ECL caters to the need of about 969 consumers, out of which 78 nos. of consumers are in Core/New Core Sectors including Power Utility, Captive Power, Cement units, Sponge Iron Units, Steel Plants, Steel Captive Plants, Aluminum Plants, Paper and Central PSUs and 891  consumers in the non-core sector. During 2005-06 till Nov.’05, 90% of total coal produced and 89% of total dispatch quantity in ECL was being supplied to Power Plants in the Country.  Balance coal  goes to various units of Cement, Sponge Iron, other core/new core sectors, Glass, Refractories, Ceramics, Forging, E-Marketing consumers, Small and tiny consumers through NCCF the State Agency.

In 2005-06, ECL successfully implemented  E-Marketing, the objectives being to facilitate creation of a large number of outlets across the Country for all sectors of consumers enabling them to buy their requirement through simple transparent and consumer friendly system. Out of MOC’s/CIL’s approved quantity of 10 million tonnes for E-marketing for the year 2005-06, ECL’s  share is 1.3 million tonnes out of which ECL’s booking upto Nov. ’05 is 0.79 million tonnes.

ECL has long term linkages to take care of increased production in the coming years.

Achievements

The total coal production of ECL at the time of nationalization was around 21 million tonnes, of which over 19 million tonnes was from underground mines and the rest from manual quarries. Immediately after nationalization, efforts were made to improve production level with addition of inputs by way of both short-term and long term investment resulting into increase  in production.  However, due to suspension of operation of number of  mines/ units on the ground of  exhaustion of coal reserves in working seams, on safety ground as well as being uneconomic and problem of land acquisition for depillaring with caving as well as gradual reduction of loader strength production from underground mines could not be sustained and got reduced considerably to 9.45 million tonnes in 04-05.  In order to sustain and augment the underground production a road map has been formulated envisaging mechanization of manual mines by way of introduction of SDL/LHD in loading operation covering more mines wherever practically feasible.

Apart from this, for augmentation of underground production three mines have been identified for introduction of Mass production technology by way of deployment Continuous Miner with shuttle Car on risk/gain sharing basis.  At the first instance Continuous Miners Package will be introduced at Jhanjra Project on risk/gain sharing basis, Contract agreement between M/s. Joy Mining Machinery Limited and ECL have already been signed in this direction.  In addition to this, High Power PSLW set is also proposed to be introduced at R-VI seam of Jhanjra for mechanized production from Longwall operation.

Special Achievements

ECL achieved the following during the month of November 2005:

Highest Coal production of 28.64 LT in November 2005 surpassing the production during same month in any of the years since its inception.  Earlier highest production 27.01 LT, was in November 1988.

Highest OB removal of 41.34 lakh cu.m during the month of November 2005 surpassing the OB removal during same month in any of the years since its inception.  Earlier highest OB removal 38.01 lakh cu.m  was in November 2004.

Highest dispatch of 24.06 LT in November 2005 surpassing the dispatch during same month in any of the years since its inception. Earlier best Despatch 22.71 LT was in November 2002.

ECL achieved the following during the period of April-November 2005.

Highest Coal production of 174.58 LT during April-November 2005 surpassing the production during same period in any of the years since its inception. Earlier highest production of 174.57 LT was during April-November 1996.

Highest OB removal of 265.26 lakh cu.m during the period April-November 2005 surpassing the OB removal during same period in any of the years since its inception. Earlier highest OB removal was 242.34 lakh cu.m during April-November 2004.

Accepting The Challenge

In order to meet the growing demand of coal of the consumers, Eastern Coalfields Limited intends to increase coal production from both Opencast and Underground Mines from the existing coal production of 27.253 Mt. tonnes (2004-05) to 46.00 million tonnes in XI Plan (2011-12). Target for 2005-06 Coal 32.44 million tonnes and OB removal 50.50 million cu.m. In addition to mechanization of manual mines by way of introduction of SDL/LHD, introduction of Continuous Miners in 3 mines & Introduction of high power PSLW at Jhanjra,  Eight number of new Underground Projects have been taken up for implementation during X Plan period and seven number of underground projects have proposed to be taken up in XI Plan period to replace and augment the existing underground production.  Out of 8 number of Projects identified in X Plan, 5 number of projects are already under execution, two new projects have already started contributing production since 2002-03 and 3 number of Projects awaiting approval. With the above measure, the expected underground production in 2011-12 will be 13.16 million tonnes.

For achieving the Opencast production envisaged in X and XI Plan period Project Report in respect of Rajmahal Expansion Projects ( 17 MTY), Chuperbhita OCP (4 MTY), Hura-C OCP (3 MTY) have already been formulated and awaiting Government approval.  PR for enhancement of Capacity of Khottadih OCP from existing 0.60 MTY to 1.00 MTY has already been formulated and awaiting approval.  In addition, Capacity of Sonepur Bazari OCP from existing level of 3 MTY to 8 MTY and capacity of Chitra OCP from existing 1.20 MTY to 2.00 MTY is also proposed to be taken up, the PR of these OCPs are under formulation.

Further, 17 number of small OC patches are also proposed to be worked by outsourcing of HEMM which are not economically viable to work departmentally.  Out of 17 Opencast patches, 8 number of patches have already in operation which has produced 2.05 million tonnes in 2004-05. With these measures, the expected Opencast production will be 32.84 million tonnes by 2011-12.

Transportation of coal from quarry face to surface/CHP by DGR Company, rationalization of manpower, improving the availability and utilization of equipment specially HEMM are the other steps taken for improvement.

NO DEARTH OF ECL COAL FOR WEST BENGAL POWER HOUSE

The West Bengal Power House will be having sufficient stock of coal at their end if they increase their capacity to unload coal rakes at their end which is only six rakes per day for Kolaghat TPS as well as other TPs so that coal inventory can be built up by them out of coal supplies from ECL and other linked sources. ECL is willing to supply additional quantity of coa beyond the linkage to the power house of West Bengal even if this means lesser supply to up country power stations.

This was evident when West Bengal Power Secretary, approached Secretary, Ministry of Coal, Govt. of India and ECL obliged immediately by pushing more coal rakes to WB Power House including Kolaghat, Santaldih and Bandel even from the collieries not traditionally supplying coal to power house of WBPDCL.

To ensure that sufficient coal stock is available at all the power stations of West Bengal, the following factors are to be considered immediately, feels ECL sources.

Faster unloading facility at Power houses end of West Bengal

Facilitate movement from large stock of coal at Rajmahal Project of ECL

Proper understanding between E. Rly and S.E. Rly so that there is no conflict of interest for Coal rake movement from Mecheda siding for down country power stations of West Bengal served by E. Rly.

Cooperation from West Bengal Govt. for moving large stock of coal from Salanpur Area of ECL as presently the local villagers are not allowing coal transportation fro the mines of Salanpur Area to the railway siding until the existing roads of PWD are repaired by ECL. The District authorities are aware of this problem and the same needs to be redressed immediately to augment transportation of coal from Salanpur Area of ECL to the Power House situated in the State of West Bengal.

The problem of wet coal has been, however, caused by unprecedented rainfall of 400 mm recorded in the ECL coalfield in the last week of Sept 06 which has not only submerged the coal stocks at the pit head and sidings but also the number of coal faces have been drowned by such heavy rain fall. Even the empty wagons have accumulated rainwater out of this unprecedented rainfall causing the coal loaded therein to become sticky and consequent unloading problem at the power house end. However, with the respite from the rain for the present, ECL sources feel the problem of stickly coal can be avoided and coal supply will be in full swing to the power houses of West Bengal as per their requirement taking into account the above factors.

ECL TURNS AROUND

Eastern coalfields limited has made a profit of around rs. 3574.0 millions for the year 2005-06 against last year loss of rs. 6792.0 millions. This is the first time since its inception, company is making profit from its operations.

This is possible only due to the positive growth in coal production of 14.17%, which is the highest growth made by any subsidiaries of Coal India Limited during the current year compared to last year, said Shri D. Chakravarti, Chairman-cum-Mg. Director, ECL.

During 2005-06, ecl surpassed all the previous in terms of production, ob removal, despatch, productivity, capacity utilisation and profit.

Parameters	2005-06	Previous Highest
Coal	31.114 million tonnes	30.13 million tonnes in 1988-89
OBR	44.873 million cu.m.	39.70 million cu.m. in 2004-05
Despatch	28.177 million tonnes	28.04 million tonnesin 1996-97
Productivity	1.15 tonnes.	1.09 tonnes in 2003-04
Capacity Utilisation	86.55%	81.08% in 2004-05
Profit	Rs. 3574 Millions	1546.8 Millions in 1995-96

The performance of the company during 2005-06 is noteworthy because the company is a sick company under BIFR and trying to emerge back to black.

Steps Taken By The Company For Its Revival:

Sanction of Revival Plan

BIFR has sanctioned the Revival Plan of ECL during November’2004. Controller General of Accounts also recommended the same during December’2004. The newly formed Board for Reconstruction of Public Sector Enterprises (BRPSE) had recommended the Revival Plan of ECL during August’2005 and Committee of Secretaries under the Chairmanship of Cabinet Secretary heard ECL Revival Plan during January’2006 and recommended the same to the Government. It is understood CCEA note has been circulated amongst various Ministries on the revival plan of ECL.

Augmentation of UG Production

 For augmenting the underground production, on 20^th October’2005 ECL entered into an agreement with M/s Joy Mining Machinery, U.K. on risk/gain sharing basis for supply of one Continuous Miner package for Jhanjra Project. This will provide a guaranteed production of 0.42 million tonnes per annum.

For introduction of 2 more Continuous Miners, one at Sarpi and the other at Khottadih projects, tender is being issued.

For introduction of Power Support Longwall at Jhanjra, a global tender has already been floated during February’2006 on risk/gain sharing basis for a guaranteed production of 1.7 million tonnes of coal per annum.

Company is introducing intermediate technology like SDLs/LHDs in other underground mines, which are amenable for mechanization.

Augmentation of OC Production

CCEA has approved the Project Report for Rajmahal Expansion from 10.5 million tonnes to 17 million tonnes, during January’2006.

Global tender for Rajmahal Expansion has been floated during March’2006.

To cater to the NTPC coal requirement for its Farakka and Kahalgaon thermal Projects, 2 more Greenfield projects at Rajmahal field are envisaged i.e. one at Chuperbhita for 4 million tonnes per annum and the other at Hura – ‘C’ for 3 million tonnes per annum. These projects will cater to the need of NTPC coal requirement of 23 million tonnes per annum from 2011-12 onwards.

Company has also floated a global tender on risk/gain sharing basis for Highwall mining, which is being introduced for the first time in India, for a production of 3.2 million tonnes during October’2005.

Sonepur Bazari OC project at Raniganj Coalfield is being expanded from 3 million tonnes to 8 million tonnes per annum.

Chitra OC project is being expanded from 1.22 million tonnes to 2 million tonnes per annum.

Company is also working on some small isolated outsourced patches to eliminate illegal mining and also to augment coal production. This is as per BIFR sanctioned revival plan.

These efforts will enable the Company to achieve a coal production of 43.74 million tonnes during 2009-10 and 46.91 million tonnes during 2012-13.

Capital Investment

Company proposes to invest around Rs. 29560 millions from 2003-04 to 2012-13 for augmentation of production. Entire investment will be met through internal resources.

Other Measures

To make the coal easily available  to  the  consumers,  Company started e-marketing during the current year. Till February’2006 company sold 1.466 millions tonnes under e-marketing.

Company is fully confident to achieve its production commitment to make its networth positive and make ECL one of the model Companies of Coal India Limited.

This achievement is possible only with the full co-operation of Govt. of West Bengal, Govt. of Jharkhand, Stakeholders of the Company and active participation of employees.

Company contributed Rs. 7090 millions to the exchequer of Governments of West Bengal, Rs. 1200 millions to Jharkhand and Rs. 280 millions to Central Govt. by way of Cess, Royalty, Sales Tax and other duties.

OPERATIONAL   STATISTICS

Year Ending 31^st March	2004	2005
1 (A) Productionof Raw Coal : ( Million tonne)
Underground	9.91	9.45
Opencast	18.09	17.80
Total :	28.00	27.25
(B) Overburden Removal ( Million Cu.Mts)	35.96	39.70
2. Offtake (Raw Coal) :
( Million tonne)
Loco	0.00	0.00
Power	24.14	24.11
Cement	0.11	0.13
Fertilizer	0.00	0.00
Colliery Consumption	0.52	0.50
Others	2.66	2.43
Total :	27.43	27.17
3. Manpower	110132	105692
4. Productivity (O.M.S)
Underground	0.45	0.43
Opencast	5.30	5.30
Overall :	1.09	1.07

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.44.75
UK Pound	1	Rs.85.14
Euro	1	Rs.57.55

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	2
--LEVERAGE	1~10	3
--RESERVES	1~10	-
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		28

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	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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