MIRA INFORM REPORT

Report Date :

15.03.2007

IDENTIFICATION DETAILS

Name :	BERGER PAINTS INDIA LIMITED
Registered Office :	Berger House, 129 Park Street, Kolkata – 700 017, West Bengal
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	17.12. 1923
Com. Reg. No.:	21-4793
CIN No.: [Company Identification No.]	U74224WB1923PTC004793
TAN No.: [Tax Deduction & Collection Account No.]	CALB08557D
PAN No.: [Permanent Account No.]	AABCB0976E
Legal Form :	A Public Limited Liability Company. The company’s shares are listed on the stock exchanges.
Line of Business :	Manufacturing and Marketing of Synthetic Resins and Paints, Varnishes, Enamels, etc.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 11000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having fine track. Available information indicates high financial responsibility of the company. Financial position is good. Payments are correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Berger House, 129 Park Street, Kolkata – 700 017, West Bengal, India
Tel. No.:	91-33-22299724-28/22296005/22296006/ 22296016/22003546–48
Fax No.:	91-33-22499009/22499729/22003549
E-Mail :	berger@vsnl.com
Website :	http://www.bergerpaints.com
Telex :	021-5791
Head Office :	Berger House, 129 Park Street, Kolkata – 700 017, West Bengal, India
Tel. No.:	91-33-22299724 (5 lines) / 22996005 / 22296006 / 22296016
Fax No.:	91-33-22499729 / 22499009
E-Mail :	berger@vsnl.com
Website :	http://www.bergerpaints.com
Plant 1 :	14 & 15 Swarnamoyee Road, P. O. Botanic Garden, Howrah – 711 103, West Bengal, India
Tel. No.:	91-33-2668 4706 (4 lines)
Fax No.:	91-33-2668 4709
Plant 2 :	RS No. 53-56 Pandasozhanallur, Village – Nettapakkam Commune, Pondicherry – 605 106, Tamil Nadu, India
Tel. No.:	91-431-2699574/143
Fax No.:	91-431-2699171
Plant 3 :	316-317, Kundaim Industrial Estate, Kundaim, North Goa, India
Tel. No.:	91-832-2395610/6407
Fax No.:	91-832-2395663
Plant 4:	38A, Industrial Area, Bulandshahar Road, Sikandrabad, Uttar Pradesh, India
Tel. No.:	91-5735-22384/249
Additional Units :	v Rishra Jammu, India
Depots :	Kolkata, Siliguri, Guwahati, Patna, Ranchi, Bhubaneshwar, Cuttack, Raipur, Agartala, Shillong, Mumbai, Goa, Nagpur, Pune, Aurangabad, Ahmedabad, Rajkot, Vadodara, Surat, Indore, Bhopal, Jabalpur, New Delhi, Lucknow, Ghaziabad, Dehradun, Varanasi, Bareilly, Kanpur, Haldwani, Ludhiana, Bhatinda, Jalandhar, Chandigarh, Jaipur, Jodhpur, Faridabad, Jammu, Panipat, Sahibabad, Chennai, Pondicherry, Coimbatore, Salem, Madurai, Bangalore, Mangalore, Chandigarh, Hubli, Kochi, Kozhikode, Kottayam, Thiruvananthapuram, Secunderabad, Hyderabad, Vishakhapatnam and Vijayawada.

DIRECTORS

Name :	Mr. Kuldip Singh Dhingra
Designation :	Chairman
Name :	Mr. G. S. Dhingra
Designation :	Vice Chairman
Name :	Mr. Subir Bose
Designation :	Managing Director
Name :	Mr. Anil Bhalla
Designation :	Director
Name :	Mr. K. R. Das
Designation :	Director
Name :	Mr. Gurcharan Das
Designation :	Additional Director
Name :	Mr. Naresh Gujral
Designation :	Director
Name :	Mr. Rajive Sawhney
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Subir Bose
Designation :	Managing Director
Date of Birth/Age :	56 years
Qualification :	B.Tech., PGDBA
Experience :	35 years
Date of Appointment :	9^th July, 1984
Other Directorship :	Marketing manager, Abucon Nigeria Limited
Name :	Mr. S. K. Biswas
Designation :	Senior Vice President & Company Secretary
Name :	Mr. Aniruddha Sen
Designation :	Company Secretary

SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Indian
Individuals/ Hindu Undivided Family	19802048	6.21 %
Bodies Corporate	188813428	59.21 %
Foreign
Bodies Corporate	25853760	8.11 %
Sub Total	234469236	73.53 %
Mutual Funds/ UTI	5039971	1.58 %
Financial Institutions/ Banks	266840	0.08 %
Insurance Companies	20077224	6.30 %
Foreign Institutional Investors	6862794	2.15 %
Non-institutions
Bodies Corporate	7034876	2.21 %
Individuals:-
i) Individual shareholders holding nominal share capital up to Rs. 0.1 Millions	42252836	13.25 %
ii) Individual shareholders holding nominal share capital in excess of Rs. 0.1 Millions	1994945	0.63 %
Non-Resident Individual	810948	0.25 %
Clearing Members	62704	0.02 %
Overseas Body Corporate	90	0.00 %
Sub Total	84403228	26.47 %
Total	318872464	100.00 %

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Synthetic Resins and Paints, Varnishes, Enamels, etc.

Products :

Production Description	ITC Code No.
Synthetic Enamel Ultra White Paints	320890.02
Synthetic Enamel Other Colours	320890.03
Acrylic Emulsion	320910.02

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Synthetic Resin	MT	16896	15424
Paints, Varnishes, Enamels, etc.	MT	154133	114986

GENERAL INFORMATION

Suppliers :

Anupam Colours & Chemicals Industries

Anupam Colours Private Limited

Calcutta Paper Industries

Channel Plastics (Private) Limited

Color India

Coastal Paints Limited

Evergreen Drums & Cans (Private) Limited

Fozdar Products

Deep Enterprises

Mittal Polymer

National Moulding Company Limited

Parachem Products

Piyanshu Chemicals Private Limited

Sahajnand Trading Company

Unicat Chemicals Private Limited

Marigold Paints Private Limited

Akross Synthetics Private Limited

Auro Chemicals

Alka Minerals & Chemicals

Choksy Chemicals

Gemini Paints

ICMC (Metals) Private Limited

Indian Tin Box Mfg Company Private Limited

Lintas Packaging Private Limited

A P Polyplast Private Limited

S R G Packaging

Metal Products & Engg Company

Techcon India Private Limited

No. of Employees :

1,732

Bankers :

Ø Standard Chartered Bank, 4, Netaji Subhas Road, P. O. Box 40, Kolkata – 700 001, West Bengal

Ø Bank of Baroda

Ø Central Bank of India, 33, Netaji Subhas Road, P. O. Box 40, Kolkata – 700 001, West Bengal, India

Ø Citibank, N.A.

Ø Corporation Bank, Kolkata, West Bengal, India

Ø HDFC Bank Limited

Ø Hongkong & Shanghai Banking Corporation Limited, Kolkata, West Bengal, India

Ø ICICI Bank Limited

Ø State Bank of India, Kolkata, West Bengal, India

Ø Union Bank of India, Kolkata, West Bengal, India

Ø BNP Paribas, Kolkata, West Bengal, India

Facilities :

SECURED LOANS	Rs in Millions
Loans from Banks - Cash Credit	76.201
Note: Loans from Banks - Cash Credit are secured by hypothecation of stock-in-trade and book debts.
UNSECURED LOANS
Fixed Deposits *	1.501
Short Term Loans
Banks	--
Others	350.001
Total	351.502
Includes unclaimed matured fixed deposits	1.291

Banking Relations :	Good
Auditors :
Name :	Lovelock & Lewes Chartered Accountants
Associates :	1. U. K. Paints India Private Limited 2. Asian Packaging Limited 3. Berger Becker Coatings Limited
Subsidiaries :	I. Beepee Coatings Limited II. Berger Jenson & Nicholson (Nepal) Private Limited III. Berger Auto & Industrial Coatings Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
200,000,000	Ordinary Shares	Rs.2/-	Rs.400.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount
199,341,030	Ordinary Shares	Rs.2/-	Rs. 398.682 Millions
Subscribed & Paid-up Capital :
199,289,790	Ordinary Shares	Rs.2/-	Rs. 398.580 Millions
Less :	Calls Unpaid		Rs. 0.026 Millions
	Total		Rs. 398.554 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		398.554	398.600	265.691
2] Reserves & Surplus		1897.883	1651.00	1612.039
NETWORTH		2296.437	2049.600	1877.730
LOAN FUNDS
1] Secured Loans		76.201	66.800	33.475
2] Unsecured Loans		351.502	577.300	353.674
TOTAL BORROWING		427.703	644.100	387.149
DEFERRED TAX LIABILITIES		67.860	0.000	78.675
TOTAL		2792.000	2693.700	2343.554
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1172.928	964.300	753.260
Capital work-in-progress		110.488	115.700	61.606
INVESTMENT		128.168	109.100	171.715
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1995.793	1668.300	1117.801
	Sundry Debtors	1095.091	846.500	693.575
	Cash & Bank Balances	253.353	219.700	306.034
	Loans & Advances	296.429	435.000	270.692
Total Current Assets		3640.666	3169.500	2388.102
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2011.388	1341.800	902.506
	Provisions	250.703	326.500	134.879
Total Current Liabilities		2262.091	1668.300	1037.385
Net Current Assets		1378.575	1501.200	1350.717
MISCELLANEOUS EXPENSES		1.841	3.400	6.274
TOTAL		2792.000	2693.700	2343.554

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		9798.307	8245.778	6810.043
Other Income		133.827	124.828
Total Income		9932.134	8370.606	6810.043
Profit/(Loss) Before Tax		916.433	662.781	614.216
Provision for Taxation		213.506	141.544	173.880
Profit/(Loss) After Tax		702.927	521.237	440.336
Earnings in Foreign Currency :
	Export Earnings	13.934	5.741	21.918
	Other Earnings	1.329	5.950
Total Earnings		15.263	11.691	21.918
Imports :
	Raw Materials	633.623	432.476
	Stores & Spares	1.275	0.570	270.180
	Capital Goods	36.856	33.601
Total Imports		671.754	466.647	270.180
Expenditures :
	Materials Consumed	6269.499	5296.872
	Expenses	2516.349	2160.745	6195.277
	Interest	52.771	36.382
	Depreciation	173.923	156.869
Total Expenditure		9012.542	7650.868	6195.277

QUARTERLY RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	2523.900	3197.200	3000.800
Other Income	06.800	14.300	14.700
Total Income	2530.700	3211.500	3015.500
Total Expenditure	2257.900	2871.800	2677.800
Operating Profit	272.800	339.700	337.700
Interest	11.800	19.300	25.800
Gross Profit	261.000	320.400	311.900
Depreciation	43.600	42.700	44.900
Tax	45.300	42.000	44.500
Reported PAT	172.100	235.700	222.500

200606 Quarter 1 –

Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (325.70) million Consumption of Raw Materials Rs 1908.00 million Staff Cost Rs 153.20 million Other Expenditure Rs 522.40 million Tax Includes Provision of Taxation Rs 43.00 million Fringe Benefit Tax Rs 2.30 million EPS is Basic & Diluted Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 05 Complaints disposed off during the quarter 05 Complaints unresolved at the end of the quarter Nil 1. The Company has only one business segment -Paints. 2. Previous years figures have been regrouped, wherever necessary. 3. The above results which have been subjected to a limited review by the statutory auditors of the Company, were taken on record by the Board of Directors at its meeting held on July 28, 2006.

200609 Quarter 2 –

EPS is basic and diluted. 1.The company has only one business segment-Paints. 2.There was no pending investors complaints at the beginning of the quarter. 2 complaint was received during the quarter which was resolved by the quarter end. There was no pending investors complaints at the end of the quarter. 3. Previous years figures have been regrouped, wherever necessary. 4 . The above results which have been subjected to a Limited Review by the statutory auditors of the company were taken on record by the Board of Directors at its meeting held on 24.10.2006.

200612 Quarter 3 –

EPS is Basic & Diluted 1. The company has only one business segment - Paints 2. There were no pending investors complaints at the beginning of the quarter, No complaints were received during the quarter, which were resolved by the quarter end. There were no pending investors complaints at the end of the quarter. 3. The Company has allotted and issued 119577174 equity shares of Rs.2/- each as Bonus shares to the Members on record as on 13.10.2006 in the ratio of 3 equity shares for every 5 Equity shares held. As a Result, the paid up Capital of the company stands increased from Rs. 398590580 to 637744928 with effect from 24.10.2006. 4. Figures for the previous periods have been regrouped, wherever necessary. 5. The above results, which have been subjected to limited review by the statutory auditors of the company, were taken on record by the Board of directors at its meeting held on 31st January, 2007.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.25	0.26	0.22
Long Term Debt-Equity Ratio	0.01	0.24	0.16
Current Ratio	1.34	1.87	1.85
TURNOVER RATIOS
Fixed Assets	5.43	5.63	5.52
Inventory	6.10	6.80	7.14
Debtors	11.51	12.31	11.74
Interest Cover Ratio	14.95	17.53	20.62
Operating Profit Margin(%)	10.34	9.07	10.19
Profit Before Interest And Tax Margin(%)	8.79	7.42	8.38
Cash Profit Margin(%)	7.85	7.16	7.52
Adjusted Net Profit Margin(%)	6.29	5.50	5.72
Return On Capital Employed(%)	36.50	28.60	30.19
Return On Net Worth(%)	32.58	26.78	25.02

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.37.90/-
Low	Rs.36.70/-

LOCAL AGENCY FURTHER INFORMATION

History

Berger Paints (I) (BPIL) was incorporated on 17 Dec.'23 as Hadfields (India), Hadfields was purchased by British Paints (Holdings) on 12 Dec.'47 and the name was changed to British Paints (I). Celanese Corporation, US, acquired a controlling interest in British Paints in 1965 and later sold its interest to Berger, Jenson and Nicholson, UK. The name was changed to Berger Paints India Limited on 31 Dec.'83. It now belongs to the Dingra group. The company offers a whole range of decorative and industrial paints. Its products include Luxol Hi-Gloss Synthetic enamel, Viton Auto-Refinish, etc. It has collaborations with Teodur, Holland; Herberts, Stoillack & Vianova, Valspar Corporation, US; etc. 

The subsidiaries of BPIL are Beepee Coatings Private Limited, Berger Jenson & Nicholson (Nepal) Private Limited, Berger Paints (Cyprus) Limited and Berger Paints Overseas Limited 

BPIL came out with a Rs 57.4 Millions public issue at a premium of Rs 35 in Jan.'89. It commenced production from May'97 at Pondicherry with an installed capacity of 18000 tpa to manufacture Paints, Enamels, Varnishes and 6000 tpa to manufacture Synthetic Resins, and augmentation of the Company's existing Powder manufacturing capacities at the plant in Howrah. The company has also came up with an Rights issue in the ratio of 1:1.

During 1998-99, Rajdoot Paints has been amalgamated with the company and the company also issued bonus shares in ratio of 1:1. During 1999-00, the company has acquired 100% share in Jenson & Nocholson (Nepal) Private Limited, Also it has entered into technical licence agreement with Nippon Paint Co Limited, Japan. With this association the company will be able to develop and increase the market share for its products. 

During 2000-01 the company entered into Joint Venture Agreement with ICI India (ICI) for taking over the entire Motor & Industrial business of ICI and its factory at Rishra. The joint venture company viz. Berger Auto & Industrial Coating took over the business from ICI on May 2001. 

The company has declared Bonus Issue of Equity Shares in the ratio of One Bonus Share for every Two Equity shares held in the company and these shares were allotted on 12.04.2004. Further in September 2004 the company has sub-divided its equity share face value from Rs.10/- per share to Rs.2/- per share. 

The company has merged Berger Auto & Industrial Coatings Limited (BAICL), a wholly owned subsidiary of the company with itself with effect from 1st April 2004. 

In the year 2004-05 the company has commenced its commercial production of the new solvent-based paints plant at Jammu. Further a powder coating plant is now under construction. 

In 2005-2006, the Power coating plant which was under construction in 2004-2005 started commercial production at the new 2,400 MTPA in Jammu. The resin manufacturing plant at Jammu is at an approval stage. The company has decided to set up an exclusive automotive paint plant at Rewari in Haryana. The land for the purpose has been acquired and is likely to be completed in early 2007. 

Fixed Assets

Ø Land :

Freehold

Leasehold

Ø Buildings :

Freehold

Leasehold

Ø Plant and Machinery

Ø Furniture and Fittings

Ø Equipment

Ø Motor Cars and

Ø Other Vehicles

Trade Terms with :

• Alka Minerals & Chemicals
• A P Polyplasts
• Alpha Minerals
• Anupam Colours & Chemicals Industries
• Anupam Colours Private Limited
• Ashok Tin Works
• Auro Chemicals
• Colour India
• Coastal Paints Limited
• Classic Enterprises
• Choksey Chemicals
• Dua Metal Krafts
• Deep Enterprises
• Gemini Paints
• Mittal Polymers
• Metal Containers
• Narchem Industries
• National Moulding Company Limited
• Parachem Products
• Ravi Chemicals
• Sudarshan Minerals
• Soham Packaging
• Tin Box Company
• Shree Balaji Creations
• Dhariyal Chemicals

Operational & Financial Performance 

For the first time in its history, the Company crossed the landmark consolidated net sales figure of Rs.10,000 millions. The consolidated sales, net of excise, were Rs.10,224 millions registering a 19.5% growth over that for the previous year. It may be recalled that the Company already held the position of second largest paint company in volume terms. Now, with Rs.10220 Millions of consolidated net sales, the Company has become the second largest paint company in India in value terms as well. Consolidated net profit after tax grew by 35% to Rs.744 millions. 

 During the financial year ended 31st March, 2006, the Company, on a stand-alone basis, achieved sales of Rs.11,175 millions as against Rs.9,476 millions in the previous year registering a growth of 18%. The Profit before Depreciation, Interest and Exceptional Item was Rs.1,146 millions as against Rs.913 millions in the previous year, recording an improvement of 25.5%. The Profit before Tax at Rs.916 millions and the Profit after Tax at Rs.703 millions during the year under review showed improvements of 38% and 35% respectively. 

The year 2005-06 saw another period of steady growth for the Company in Retail, Automotive & Industrial and Powder businesses - buoyed by the vigorous growth in the overall manufacturing and construction sectors. Prices of raw materials, particularly those related to crude oil, continued on an upward spiral. On the other hand, prices of the Company's products came under pressure from competition. In order to counter this, the Company concentrated on improved product mix and quality, better realization and management of costs. These efforts enabled the Company to ensure that the impact on profitability was kept to a minimum. 

Helped by the steady growth in housing, construction and infrastructure sectors, the demand for both solvent and water based products in Decorative paints continued to be strong. The Company's efforts of developing new products, keeping in view specific needs of the discerning Indian market, were received well by the consumers. These include Bison Wall Putty, Weathercoat Long Life - exterior emulsion with elastic film that allows it to bridge hairline cracks, Weathercoat Tile Protector and Illusions Exterior. Illusions Exterior paints are exterior textured/designer finishes with special formulations, which permit various designs to be developed through special application techniques. The Company also launched Galaxy - a new do-it-theself paint kit for children's rooms. 

During the year, the Company launched the Lewis Berger range of premium products. In the 18th century, a colour chemist then living in London, by the name of Lewis Berger, developed a method for manufacturing prussian blue using a secret process that every designer and householder coveted. The Company's brand - Lewis Berger - reflects the Company's legacy and heritage as well as its growing commitment towards quality, aesthetics and innovation. It is targeted at quality conscious consumers looking for lifestyle products. The launch involved a complete overhaul of all products and services, which are touched by a consumer. A complete 360 degree marketing effort was undertaken to drive home the change from a value for money pedestal to a lifestyle oriented platform and thereby give the brand a premium look and feel. The changes include aesthetically and functionally improved containers, improved and strengthened cartons, overhauling of more than 4000 dealer signboards, merchandising of 1000 plus shops, installation of automatic printing machines at the factories, implementation of stricter quality control norms and communicating these changes to the consumers through a clutter breaking television and press advertisement where the consumer is asked to unleash the power of his imagination by visualizing the Taj Mahal, painted with an array of colours. All the products in the Lewis Berger range have been classified into three categories : Precious, Exclusive and Select, depending on the price point with Precious being at the highest range. All Precious range containers carry a warranty of 5 to 7 years. The new brand has been received well by the market. 

Berger Home Decor has been refurbished as Lewis Berger Home Painting, with higher degree of facilitation for consumers. This is being extended to many more centers in India.  

The automotive paint segment registered good growth, boosted by increase in automotive production and aggressive development of new customers. 

The growth in the Protective Coatings segments was satisfactory and the Business was able to improve its product mix significantly. 

Projects 

During the year under review, the Company started commercial production at the new 2,400 MTPA powder coating plant at Jammu. The resin manufacturing plant at Jammu is at an approval stage. 

The Company has decided to set up an exclusive automotive paint plant at Rewari in Haryana. The land for the purpose has been acquired. Subject to obtaining necessary approvals, it is likely to be completed in early 2007. 

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.43.13
UK Pound	1	Rs.85.36
Euro	1	Rs.57.64

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	6
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		62

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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