MIRA INFORM REPORT

Report Date :

17.04.2007

IDENTIFICATION DETAILS

Name :	NATURAL CAPSULES LIMITED
Registered Office :	Shreshta Bhumib. V.K. Iyenkar No.102, No.87, K.R. Road, Bangalore;560004, Karnataka
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	20.09.1993
Com. Reg. No.:	014742
CIN No.: [Company Identification No.]	L24239KA1993PLC014742
TAN No.: [Tax Deduction & Collection Account No.]	BLRN00437D
Legal Form :	Public Limited Liability Company. The Company shares are listed on stock exchanges
Line of Business :	Manufacturer of Hard Gelatin Capsule shells,Hard Cellulose Shells and Pharmaceutical Dosages Forms in Capsule dosage Form.

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 450000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is well-established and reputed company having satisfactory track. Directors are reported as experience and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business at usual trade terms and conditions.

LOCATIONS

Registered Office :	102, “ Shreshta Bhumi No.87. K. R. Road, Bangalore:560 052
Tel. No.:	91-80-2667 1571 / 2667 1573
Fax No.:	91-80-26671562
E-Mail :	info@naturlacapsules.com
Website :	www.naturalcapsules.com
Factory 1 :	Plot No.7A2, KIADB Industrial area, Attibele - 562 107, Bangalore,
Factory 2 :	RS No.84, Perambai Road, Pitchaiveerampet, Pondicherry-10

DIRECTORS

Name :	Mr. Srirangam Gopalan
Designation :	Chairman
Name :	Mr. Laxminarayan Mundra
Designation :	Whole-time Director
Name :	Mr. Satyanarayan Mundra
Designation :	Whole-time Director
Name :	Mr. C. P. Rangachar
Designation :	Director
Name :	Mr. Dr. C. M. Gurumurthy
Designation :	Director
Name :	Mr. V Subramony
Designation :	Director
Name :	Mr. Sunil L. Mundra
Designation :	Managing Director
Name :	Mr. Sushi Kumar Mundra
Designation :	Director
Name :	Mr. V. Balaji Bhat
Designation :	Director

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters holding
Indian Promoters	951950	22.23
-Foreign promoters
Persons acting in concert	874161	20.41
Mutual funds & UTI	4700	0.11
Flls	197550	4.61
Private corporate bodies	311421	7.27
Indian public	1789952	41.79
NRI/OCBs	139636	3.26
Any other clearing member	13330	0.31
Grand totals	4282700	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Hard Gelatin Capsule shells,Hard Cellulose Shells and Pharmaceutical Dosages Forms in Capsule dosage Form.

Products :

Production Description	Item Code No:
9602.00	Hard Capsule Shells

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Capsules	Nos in lacs		24220	21609.60
Formulations			2700	489.43

GENERAL INFORMATION

No. of Employees :

About 200

Bankers :

M/s. State Bank cf India

Bangalore Commercial Branch

Hudson Circle

BANGALORE - 560 001

Facilities :

SECUREDLOANS:	Rs. in Millions
LONG TERM LOANS
State Bank of India
SBI Term Loan - No 30008521182	7.420
Term Loan SBI - New (IPCL)	8.527
Interest Accrued & Due on above	0.140
Total:	16.087
SHORT TERM LOANS:
Working Captial facilities from	--
Citibank NA	--
State Bank of India	1.917
Total:	18.005
UNSECUREDLOANS:
Sales Tax deferment loan	11.176
Total	11.176

Banking Relations :	Satisfactory
Auditors :
Name :	Gnanoba & Bhat Chartered Accountants
Address :	211. Commerce House 9/1. Cunningham Road BANGALORE - 560 052

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Share	Rs.10/-each	Rs.50.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4282700	Equity Share	Rs.10/-each	Rs.42.827 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		42.827	42.827	34.700
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		70.094	51.564	25.800
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		112.921	94.391	60.500
LOAN FUNDS
1] Secured Loans		18.005	18.906	22.800
2] Unsecured Loans		11.176	12.349	12.800
TOTAL BORROWING		29.181	31.255	35.600
DEFERRED TAX LIABILITIES		9.900	10.200	0.000
TOTAL		152.002	135.846	96.100
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		90.248	86.895	88.000
Capital work-in-progress		30.665	24.162	0.600
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	12.720	11.881	5.800
	Sundry Debtors	44.601	28.050	26.800
	Cash & Bank Balances	1.558	1.201	1.200
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	25.039	15.012	7.500
Total Current Assets		83.918	56.144	41.300
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	0.000	0.000	26.700
	Provisions	52.829	31.355	7.100
Total Current Liabilities		52.829	31.355	33.800
Net Current Assets		31.089	24.789	7.500
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		152.002	135.846	96.100

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		155.239	126.016	101.900
Other Income		0.000	0.000	1.700
Total Income		155.239	126.016	103.600
Profit/(Loss) Before Tax		35.784	25.302	26.200
Provision for Taxation		11.788	10.692	6.700
Profit/(Loss) After Tax		23.996	14.610	19.500
Earnings in Foreign Currency :
	Other Earnings	17.023	6.674	0.000
Total Earnings		17.023	6.674	0.000
Imports :
	Others	0.135	0.000	0.000
Total Imports		0.135	0.000	0.000
Expenditures :
	Administrative Expenses	33.353	28.056	6.900
	Raw Material Consumed	63.673	51.563	38.000
	Power and Fuel	0.000	0.000	11.500
	Other Manufacturing Expenses	0.000	0.000	2.400
	Employee Cost	11.770	10.574	6.700
	Miscellaneous Expenses	0.000	0.000	2.100
	Financial cost	1.965	2.441	0.000
	R and D Expenses W/off	0.000	0.000	0.000
	Depreciation & Amortization	8.363	7.836	0.000
Total Expenditure		119.124	100.470	67.600

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	38.900	43.700	41.600
Other Income	00.200	00.000	00.000
Total Income	39.100	43.700	41.600
Total Expenditure	27.200	30.200	31.700
Operating Profit	11.900	13.500	09.900
Interest	00.600	00.300	00.500
Gross Profit	11.300	13.200	09.400
Depreciation	02.300	02.400	02.500
Tax	03.000	04.000	01.800
Reported PAT	05.800	06.800	04.800

200606. The above results were reviewed by the Audit Committee and taken on record by th Board of Driectors in their meeting held on 28-07-2006. 2. The results are based on the basis of limited review done by the Statutory Auditors. 3. Previous year figures have been regrouped wherever necessary. 4. Capital deployed by the company for its different segement is interchangeable and hence the calculation of capital deployed for segment reporting has not been made. 5. There were no investors complaints pendng at the beginning of the quarter. the Company has received nil investors complaint during this quarter. 6. During the quarter commercial production was started on 3rd Automatic capsule Making Machine out of 5 Machine acquired earlier and the other 2 Mechines are to be commissioned during the current year in phases.

200609. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors in their meeting held on 25-10-2006. 2. The results are based on the basis of limited review done by the Statutory Auditors. 3. Previous year figures have been regrouped wherever necessary. 4. Capital deployed by the company for its different segment is interchangeable and hence the calculation of capital deployed for segment reporting has not bee made. 5. There were no investors complaints pending at the beginning of the quarter and no investor complaints were received during the year.

200612 Expenditure Includes (Increase)/Decrease in stock in Trade Rs (3.370)million Consumption of Raw Material Rs 23.051 million Staff Cost Rs 3.017 million Other expenditure Rs 8.984 million Tax Includes Provision for Deferred Tax Rs 0.255 million Income Tax Rs 1.791 million Status of Investor Complaints for the quarter ended December 31, 2006. Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 1 Complaints disposed off during the quarter 1 Complaints unresolved at the end of the quarter Nil 1. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors in their meeting held on January 29, 2007. 2. The results are based on the basis of limited review done by the Statutory Auditors. 3. Previous year figures have been regrouped wherever necessary. 4. Capital deployed by the company for its different segment is interchangeable and hence the calculation of capital deployed for segment reporting has not been made. 5. During the quarter, Company commissioned 4th Capsules Making Machine, out of the 5 used Capsule Making Machines acquired earlier.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.29	0.43	0.83
Long Term Debt-Equity Ratio	0.29	0.38	0.67
Current Ratio	1.34	1.17	1.07
TURNOVER RATIOS
Fixed Assets	1.07	0.87	0.90
Inventory	12.68	13.44	18.05
Debtors	4.30	4.34	4.63
Interest Cover Ratio	18.90	11.54	9.73
Operating Profit Margin(%)	29.62	29.86	34.68
Profit Before Interest And Tax Margin(%)	24.23	23.30	28.13
Cash Profit Margin(%)	20.77	18.84	25.34
Adjusted Net Profit Margin(%)	15.38	12.28	18.79
Return On Capital Employed(%)	28.24	24.99	31.58
Return On Net Worth(%)	23.15	18.85	38.42

STOCK PRICES

Face Value	Rs.10.00
High	Rs.26.60
Low	Rs.26.60

LOCAL AGENCY FURTHER INFORMATION

PREFORMANCE& PROSPECTS:

During the year under review, the company has earned a Net profit (before tax) of Rs.35.785 Millions as against

the corresponding Net profit of Rs.25.302 Millions in the previous year; this has enabled the company to plough back an amount of Rs. 10.574 Millions for funding the ongoing expansion at Pondicherry. The export of the company has more than doubled during the year under consideration. The directors are hopeful of expanding the domestic and export sales as in the previous year.

EXPANSION:

During the year 2004 -2005 company had acquired 5 capsules making machines to be installed at

Pondicherry. Out of these 5 machines, 3 machines are already operational and the balance machines

will be commissioned during the current year. With completion of this expansion program, the total

manufacturing installed capacity of HGCS will be 3.6 billion capsules per annum.

EXPORTS:

The company has successfully exported Gelatine capsules to mainly South east Asian countries and with second expansion being established at Pondicherry, the directors are hopeful of improving the exports. During the year under review exports growth was more than twice of last year.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

During the year under review, pharmaceutical Industry's average growth was around 10%. The pharma industry's focus on export of finished formulation has increased the demand for TSE Risk free capsules which are used for products marketed in regulated countries. Company has filed its DMF (Drug Master File) with USFDA to meet this requirement. During the year under review the Company's Gross Sales went-up by 30%. This was achieved by commissioning of2nband3r d lines of capsule machines installed out of the 5 lines acquired in 2004-05. The other two lines of machinery are expected to be installed in the . current year.

2. OPPORTUNITIES AND THREATS:

Capsules :

a) Opportunities :

1. Good export market for Gelatin capsules in South East and far East Asian countries.

2. Expansion of the existing markets for vege capsules within the country.

b) Threats :

1. Expansion of capacities by other major players.

2. Conversion of Gelatin capsules products into other dosage forms.

Formulation :

a) Opportunities :

1) Job work for exporters arid other MNC companies

2) Formulation exports by the company.

b) Threats : New GMP requirements may warrant modernization of their existing plant.

3. RISKS AND CONCERNS :

Risk of competition and exchange fluctuations may have an adverse impact on the projections.

4. OUT LOOK :

Based on the Company's performance up to the date of this report, orders on hand and expanded capacity

established at Pondicherry, company is hopeful of achieving a turnover of around Rs. 18 crores in the current year. Inspite of the constraints due to slump in demand and pressure on margins, Company is hopeful to maintain profitability by added capacity and focus on export and sale of Veg caps..

Fixed Assets:

Lease hold land

Building

Plant and Machinery

Electrical installations

Computer

Furniture and Fixture

Office Equipments

Motor Vehicles

Technical Know-how-fees

Company Profile

The companyLimited is a Public Limited Company established in the year 1993 at Bangalore and in the year 2003 at Pondicherry. The companyLimited is a well-equipped modern manufacturing plant to manufacture Hard Gelatin Capsule shells, Hard Cellulose Capsule shells and Pharmaceutical Dosage Forms in Capsule Dosage Form.

The Company meets the statutory requirements as laid down by the authorities in respect to cGMP and cGLP practices. Since its inception, The companyhas ensured to provide turnkey solutions to all its customers. NCL has evolved and strengthened its endeavors by constantly innovating through its excellent products. With a mission to enable “Technology Assisted Business Transformation”, NCL ensure to deliver the best products with a technological edge.

The main objective of the company is to manufacture and market Hard Gelatin Capsule shells and Hard Cellulose Capsule Shells (both printed and unprinted). These capsules are sold in domestic and also exported to several countries. The logical integration of NCL hard shell manufacturing to formulation was initiated in the year 1998

The company is also engaged in formulating the pharmaceutical dosage forms in Capsule dosage form, both Pharma and Neutraceutical Products. The company is fully committed to upgrade its facilities on a continuous basis to meet the requirements of National and International Standards, cGMP and cGLP practices. Natural Capsule has been serving the pharmaceutical industry over a decade, comprising of two units – one at Bangalore and other at Pondicherry.

The Pharmaceutical and Dietary supplement industries count on The companyto supply hard two-piece Gelatin and Cellulose capsules. With manufacturing sites at Bangalore and Pondicherry, they are serving customers on quick service no matter where they are located. For the past 12 years, with the greatest respect to the Customers, The companyhas dedicated itself to the production of the highest quality capsules.

Vision Statement

The companyis committed to :

Be the Global Leader for supply of Cellulose Capsules (HPMC : non-animal alternative)

Providing superior Quality two-piece hard Gelatin Capsules

Be the Best Service provider to the Customers all around

Invest in Research and Development of new capsule technologies and application

Mission Statement

The companybelieves in a mission to constantly innovate and produce products that are an outcome of responses received from the market as well as its customers. The companyassures to provide the Highest Quality products on a consistent basis both to its National and International customers. “They truly believe in Relating Technology to Nature…..”

The The companyGroup’s mission is to be an integrated enterprise of global distinction. Essential to

this mission is excellence in :

Internationally benchmarked Quality and Regulatory Systems

Customer relationship through outstanding products and services

State of the art manufacturing facilities

To understand their customer needs and adding value to their customers & products, so that they grow together

Their Focus – World Class Manufacturing

WHO-GMP Certifications; Automated statistically-controlled operations; ISO 9001 compliance; Disciplined

Quality Assurance monitoring; Clean room policies and procedures; Trained and Competent professionals and technicians, trained sales and customer service – THE COMPANYhas put in place systems and programs that ensures Customers needs. Their capsule products are known throughout the Industry for their ability of mahinability.

Their Goal – Meeting Customer Needs

The companyprovides Total Customer Satisfaction – by describing what and how they do best. It is not only the sales and technical staff focus on addressing and resolving customer needs, but also their manufacturing personnel and formulation personnel often interact directly with customers on product and process improvement programs. At Natural Capsules, they have an added advantage of having formulation unit which will continuously provide feedback on improving quality and mahinability of hard two-piece capsules.

They also use formal customer satisfaction measurement programs that provide routine opportunities for their customers to tell us what they like or, more importantly, what they don’t like about dealing with NATURAL CAPSULES.

Facilities

NCL’s world class technological knowledge & facilities provides a magnitude of solutions to suit every customer’s need whether big or small.

Lets understand them………

Manufacturing capacity of more than 3 billion capsules per anum

Isolated and dedicated Automatic Manufacturing Lines for manufacturing Hard Gelatin and Hard Cellulose

capsule shells of       sizes 00, 0el, 0, 1, 2, 3 & 4

Capability of Circular and Linear printing on capsules. Printing can be customized and can be done in two colors

Capsules are sorted online through Automatic Diametrical Sorting machines

A continuous and dedicated effort of the R & D team ensures development of innovative ideas & implementation of those ideas.

Each of the manufacturing line is housed as an independent unit to eliminate the risk of cross-contamination

Usage of Automatic machines for encapsulation in dosage form

Various types of packaging are available for Formulations of non-betalactom, neutraceutical & herbal products

About Products

NCL’s constant endeavors to research & most customer specific requirement has resulted in manufacture of a wide range of capsules. The Cellulose capsules and newly introduced variants form a part of NCl’s niche products.NCL’s facility of dedicated manufacturing lines adopt stringent procedures to manufacture Hard Gelatin Capsules. Each of this manufacturing line is housed as an independent unit to eliminate the risk of cross contamination.

NCL manufactures Hard Capsules for pharmaceutical and dietary supplement industries in sizes 00, 0el, 0, 1, 2, 3 & 4. All operations are assured through their comprehensive QA procedures to conform to Indian Pharmacopoeia and United States Pharmacopoeia standards and the specific requirements of the customers.

Two-piece capsules have long been a reliable drug delivery system. Capsules continue to offer worldwide consumer appeal because they:

are easy to swallow

mask odors

are tasteless

are aesthetically pleasing; and

are versatile

In addition, two-piece capsules are a top choice of many pharmaceutical and contract manufacturers because they:

Can be filled in-house under a company’s direct supervision and control standards

Require fewer excipients than other drug formulations

Require less initial investment in processing equipment

Are manufactured to universal standards, which allows for multi-stheircing and runnability on all types of filling equipment
Offer endless varieties of color and print options for unique identification of the product in the market place

Recent survey results reveals that pharmaceutical customers choose capsule vendors based on the following characteristics :

The Best Quality & Machinability

Adherence to Timely Delivery

Customer Service from Informative Staff

Technology transfer from Knowledgeable Source

The Gelatin capsule is the most common form of capsule for oral dosage formulations. NCL offers its High Quality Products to customers committing to :

Validated Manufacturing process based on cGMP’s

Odorless & Tasteless Capsules

Round the World Availability

Five Year Shelf Life

Preservative and Preservative-Free Capsules

Made from pure Bovine Gelatin

A Quality Assurance system has been set up to be preventive and not curative. Their capsules undergo vigorous in-process inspection checks in accordance with cGMP and ISO 9001:2000. With every delivery they provide their customers a bulletin of physico-chemical and bacteriological analyses in conformity with the requirements of Indian and United States Pharmacopoeia.

Hard Gelatin Capsule Shells

Hard Gelatin Capsules are preferred oral dosage form in pharmaceutical and nutritional applications. They are neutral in taste and easy to swallow. They manufacture two-piece hard gelatin capsules in sizes 00, 0el, 0, 1, 2, 3 & 4. NCL procures & utilize the best Pharmaceutical Grade Gelatin and edible food grade colors from the Best Manufacturers of Raw Material for manufacturing of its products.

These capsules are available in :

Clear Transparent / Clear Transparent

Colored transparent / Colored Transparent*    Opaque / Opaque

Colored Opaque / Colored Opaque

Clear Transparent / Colored opaque

Clear Transparent / Colored Transparent

Hard Cellulose Capsule Shells

The companybelieves in a mission to constantly innovate and produce products that are an outcome of responses received from the market as well as its customers. The companyassures to provide the Highest Quality products on a consistent basis both to its National and International customers. “They truly believe in Relating Technology to Nature…..”

The The companyGroup’s mission is to be an integrated enterprise of global distinction. Essential to this mission is excellence in :

Internationally benchmarked Quality and Regulatory Systems

Customer relationship through outstanding products and services

State of the art manufacturing facilities

To understand their customer needs and adding value to their customers & products, so that they grow together

BSE / TSE Free Gelatin Capsule Shells - (Click)

These Gelatin Capsules are manufactured from Gelatin derived from the bones of cattle which were born and bred in India only and are free from Bovine Spongiform Encephalopathy (BSE) and Transmissible Spongiform Encephalopathy (TSE). The bones were obtained from healthy animals slaughtered in slaughter house for human consumption and are Halal certified.

Shiny Gelatin Capsule Shells

These Gelatin Capsules are made from Pearl Pigments as coloring agents. These are available in attractive shades matching to customer needs.

SLS Free Gelatin Capsule Shells

These Gelatin Capsules are manufactured without Sodium Lauryl Sulfate as an excipient in the formulation of Gelatin Capsule Shells.

Halal Certified Gelatin Capsule Shells

These Gelatin Capsules are manufactured from Gelatin derived from cattle bones which have been obtained as per HALAL in accordance with Islamic Law.

Fortified Gelatin Capsule Shells

These Gelatin Capsules, which are usually made of completely inert material (Gelatin), are now fortified with vitamins for added nutritional value.

Sweet Gelatin Capsule Shells

These Gelatin Capsules are sweet and are highly suitable for Pediatric products in capsule dosage forms.

Fast Release Gelatin Capsule Shells

These Gelatin capsules are designed to release its contents much faster than the normal Gelatin Capsules.

Printed Gelatin / Cellulose Capsule Shells

More than any other dosage form, two piece capsules offer many unique and colorful ways to enhance the image and utility of products.

In addition to this, printing on capsules provides a unique identification system by adding information such as : 

Name of the Company or Brand logo of the company

A brand or Product name

Details of the product claim (ex. 250 mg / 500 mg etc.,)

The unique identifying feature of printed capsules helps in putting checks on cross-contamination and reducing the risk of medication errors.

The companyoffers a several types of capsule printing options:

Linear (Axial) Print : The print text appears along the lengthwise of the capsule

Circular (Spin) Print : The print text appears across the circumference of the capsule

As per the Customer requirement, NCL offers another option of using different combinations of ink colors.Only Edible inks are used at NCL for printing on capsule shells and these inks are all manufactured using pharmaceutical grade raw material.

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.41.89
UK Pound	1	Rs.84.17
Euro	1	Rs.56.93

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	7
--PROFITABILIRY	1~10	5
--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	YES
--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 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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