MIRA INFORM REPORT

Report Date :

18.08.2007

IDENTIFICATION DETAILS

Name :	FAZE THREE LIMITED
Registered Office :	1-2 Shiv Smriti Chambers, 49-A Dr Annie Besant Road, Worli, Mumbai-400018, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	09.01.1985
Com. Reg. No.:	11-35032
TAN No.: [Tax Deduction & Collection Account No.]	MUMM20088F
PAN No.: [Permanent Account No.]	AAACF2212N
Legal Form :	Public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer and Exporter of Cotton Handloom Products, Made-ups, Cushion Covers etc.

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 2600000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company and has improved its performance in 2005-06. Trade relations are fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	1-2 Shiv Smriti Chambers, 49-A Dr Annie Besant Road, Worli, Mumbai-400018, Maharashtra, India
Tel. No.:	91-22-24984176/24944854
Mobile No.:	91-22-2493681/23634677
E-Mail :	info@fazethree.com
Website :	http://www.fazethree.com
Factory :	Jatal Road, Anand Nagar, Panipat-132103, Haryana Survey No. 380/1, Village Adapada, Unitary of Dadara and Nagar Havelli Survey No. 356/1-2, Village Dadra, Unitary of Dadara and Nagar Havelli Plot No. 71, GIDC, Vapi Industrial Area, Pardi, District Valsad, Gujarat, India

DIRECTORS

Name :	Mr. Ajay Anand
Designation :	Chairman and Managing Director
Name :	Mrs. Rashmi Anand
Designation :	Director
Name :	Mr. Sanjay Anand
Designation :	Director
Name :	Mr. Rajiv Rai Sachdev
Designation :	Director
Name :	Mr. Vasudeva Rao
Designation :	Director
Name :	Mr. Kishore M. Mahimkar
Designation :	Director
Name :	Mr. G G Prabhu
Designation :	Executive Director
Name :	Mr. Martin Golla
Designation :	AVP-Legal & Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Category Code	Names of Shareholders	No. of Shares	Percentage of Holding
(A)	SHAREHOLDING OF PROMOTER AND PROMOTER GROUP
1	Indian
(a)	Individuals/ Hindu Undivided Family	20393123	33.46
(b)	Bodies Corporate	12195625	20.01
	Total	32588748	53.47
	Total Shareholding of Promoter and Promoter Group (A)	32588748	53.47
(B)	PUBLIC SHAREHOLDING
1	Institutions
a	Venture Capital Funds	4250	0.01
	Sub-Total (B) (1)	4250	0.01
2	Non-Institutions
(a)	Bodies Corporate	17342994	28.46
(b)	Individuals
	i. Individual shareholders holding nominal share capital upto Rs. 0.100 million	7869839	12.91
	ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	3048737	5.00
(c)	Any other (Clearing Member)	89419	0.15
	Sub-Total (B) (2)	28350989	46.52
	Total Public Shareholding (B) = (B) (1) + (B) (2)	28355239	46.53
(C)	SHARES HELD BY CUSTODIANS AND AGAINST WHICH DEPOSITORY RECEIPTS HAVE BEEN ISSUED	0.00	0.00
	GRAND TOTAL (A + B + C)	60943987	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Cotton Handloom Products, Made-ups, Cushion Covers etc.

Products :

Item Code	Products
5514/5209	Woven Fabrics
5703	Carpets and Floor Coverings

Exports to:

Japan, Taiwan, Hong Kong, Germany, the US, etc.

GENERAL INFORMATION

No. of Employees :

200

Bankers :

Ø Canara Bank

Ø ICICI Bank

Ø Corporation Bank

Facilities :

Secured Loan	Rs in millions
From Bank
Term Loan (Secured by EMT of Land and Building and hypothecation of Plant and Machineries and other movable fixed assets in respect of the expansion/new project as prime security, collateral security by way of extension of first collateral charge on the existing fixed assets to the term loan, personal guarantee of the Managing Director and a corporate guarantee)	256.335
Other cash Credit	2.509
Packing Credit	85.498
Advance against Export Bills (Secured by hypothecation of stocks, book debts and Personal guarantee of the Managing Director and Corporate guarantee and also secured by a charge on Fixed Assets of the company at Panipat/Retail outlet At Mumbai)	59.549
Bills Discounting for Purchase of Assets (Secured against hypothecation of D. G. Set)	0.231
Other Loans (Secured against Hypothecation of Vehicles)	1.281
From Others:
Other Loan (Secured against Hypothecation of Vehicles)	0.039

Banking Relations :	Satisfactory
Auditors :
Name :	Thakur Vaidyanath Aiyar and Company Chartered Accountants
Address :	Mumbai, Maharashtra, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs. 10.00 each	Rs. 50.000 millions
3000000	Preference Shares	Rs. 10.00 each	Rs. 30.000 millions
	Total		Rs. 80.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4088000	Equity Shares	Rs. 10.00 each	Rs. 40.880 millions
294117	5% Non Cumulative optionally convertible Preference Shares	Rs. 10.00 each	Rs. 2.941 millions
Add :	132200 Equity Shares forfeited		Rs. 0.660 million
	Total		Rs. 44.481 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005 (12 Months)	31.03.2004 (15 months)
SHAREHOLDERS FUNDS
1] Share Capital		121.900	44.481	44.481
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		536.300	535.828	507.231
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		658.200	580.309	551.712
LOAN FUNDS
1] Secured Loans		488.600	405.443	178.591
2] Unsecured Loans		62.700	17.672	6.435
TOTAL BORROWING		551.300	423.115	185.026
DEFERRED TAX LIABILITIES		0.000	41.577	41.474
TOTAL		1209.500	1045.001	778.212
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		710.500	346.784	327.509
Capital work-in-progress		23.500	260.851	17.384
INVESTMENT		57.200	57.357	57.655
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	276.000	159.738	148.868
	Sundry Debtors	103.400	147.748	83.194
	Cash & Bank Balances	7.700	11.318	8.305
	Other Current Assets	0.000	11.949	11.553
	Loans & Advances	179.500	147.083	151.354
Total Current Assets		566.600	477.836	403.274
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	148.600	107.637	44.531
	Provisions	13.900	9.410	9.249
Total Current Liabilities		162.500	117.047	53.780
Net Current Assets		404.100	360.789	349.494
MISCELLANEOUS EXPENSES		14.200	19.220	26.170
TOTAL		1209.500	1045.001	778.212

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005 (12 Months)	31.03.2004 (15 months)
Sales Turnover		731.300	600.200	706.200
Other Income		71.700	46.000	67.100
Stock Adjustments		41.100	21.100	14.600
Total Income		844.100	667.300	787.900
Profit/(Loss) Before Tax		53.000	41.700	51.600
Provision for Taxation		23.100	3.400	15.100
Profit/(Loss) After Tax		29.900	38.300	36.500
Expenditures :
	Raw Materials	438.200	347.100	416.600
	Excise Duty	12.600	13.100	7.900
	Power and Fuel Cost	36.900	23.500	18.600
	Other Manufacturing Expenses	44.300	59.100	97.000
	Employee Cost	66.600	49.300	44.100
	Selling and Administration Expenses	95.300	75.800	73.600
	Miscellaneous Expenses	19.100	17.700	28.700
	Interest and Financial Charges	48.400	22.000	26.100
	Depreciation	29.700	18.000	23.700
Total Expenditure		791.100	625.60	736.300

SUMMARISED RESULTS

PARTICULARS	2007 (Full Year)
Sales Turnover	1230.000
Other Income	18.700
Total Income	1248.700
Total Expenditure	1074.400
Operating Profit	174.300
Interest	56.700
Gross Profit	117.600
Depreciation	39.200
Tax	36.700
Reported PAT	41.700

QUARTERLY RESULTS

PARTICULARS	30.06.2007 (1^st Quarter)
Sales Turnover	355.700
Other Income	0.300
Total Income	356.000
Total Expenditure	300.100
Operating Profit	55.900
Interest	16.400
Gross Profit	39.500
Depreciation	12.100
Tax	3.000
Reported PAT	24.400

200706 Quarter 1

Notes: 1.The above results have been reviewed and taken on record by the Board of the company in the meeting held on 31.07.2007. 2. During the quarter the company’s transaction has been only in the segment of Manufacturing. 3. The Auditors of the company have carried out the limited review of the above unaudited financial results in terms of clause 41 of the Listing Agreement and the said report was placed before the directors in the Board meeting. 4. Deferred Tax for the current period would be considered in the audited accounts at the end of the year. 5. There were no investors’ complaints outstanding at the beginning and at the end of the quarter. During the quarter one investor complaint was received and disposed off. 6. The current market price of the company’s equity shares being less than the conversion price in respect of the FCCB, the option embedded in the said bonds to convert them into equity shares is, at present taken to be anti-dilutive. 7. The figures have been regrouped/reclassified wherever necessary.

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005 (12 Months)	31.03.2004 (15 months)
Debt-Equity Ratio		0.81	0.56	0.36
Long Term Debt-Equity Ratio		0.47	0.31	0.17
Current Ratio		1.44	1.70	2.11
TURNOVER RATIOS
Fixed Assets		1.18	1.49	1.54
Inventory		3.36	3.89	4.38
Debtors		5.82	5.20	5.09
Interest Cover Ratio		2.10	2.90	2.98
Operating Profit Margin	(%)	17.93	13.61	14.36
Profit Before Interest And Tax Margin	(%)	13.87	1.61	11.00
Cash Profit Margin	(%)	8.15	9.38	8.52
Adjusted Net Profit Margin	(%)	4.09	6.38	5.17
Return On Capital Employed	(%)	9.48	7.70	9.21
Return On Net Worth	(%)	5.00	7.05	5.74

STOCK PRICES

Face Value	Rs. 10.00
High	Rs. 9.00
Low	Rs. 8.40

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Faze Three Exports (FTEL) was incorporated as a private limited company in January 1985, and became a deemed public limited company in Jan.'94. It was converted into a full-fledged public limited company in May '94. Ajay Anand, who promoted the company in 1984, is the chairman and managing director of FTEL.  

 In Feb.'95, FTEL came out with a Rs 126.6-Millions public issue (premium: Rs 110) to part-finance the proposed EOU to manufacture furnishing fabric, etc, at a project cost of Rs 157 Millions. The company manufactures and exports cotton handlooms, furnishing fabric and made-ups at its unit in Haryana. Its products include dhurries, cushions, furnishings, carpets, etc. FTEL exports to Japan, Taiwan, Hong Kong, Germany, the US, etc. The company took over ARR Products on 31 Mar.'94. FTEL was the recipient of gold medals for its export performance in 1991-92 and 1992-93. 

 In 1995-96, the business was adversely affected due to an earthquake in Japan, which constituted a major part of exports. The construction work at the new project site at Silvassa was completed. New machineries were installed for manufacturing bathmats, a new product item. The company is taking up new projects as part of its expansion and diversification plans into the field of home furnishing and other interior furnishing related products. The company has drawn an expansion plan for Silvassa; alongwith their joint venture partners Achter and Ebels, Germany which are pioneers in field of automotive fabrics. 

 During 1998-99, the company hived of Dadra (UT) manufacturing unit and to acquired controlling stake in V R Woodart Limited (formerly known as Veera Treatwood Limited). V R Woodart Ltd is 100 % EOU engaged in Mfg & Exporting of Rubber wood furniture. In 1999-2000, the Autofab division of the company has been hived off to the Joint Venture Company `Aunde Faze Three Autofab Ltd'. During March 2003 the name of the company was changed to Faze Three Limited. The Commercial production at Dapada Factory was commenced in April, 2002 and the expansion and modernization of the Dyeing unit at Panipat was also completed. 

 In the year 2003, the name of the company was changed to Faze Three Limited.

BUSINESS

COMPANY OPERATIONS 

The Sales and Other Income of the Company stood at Rs 782.344 millions during the financial year ended March 31st 2006 as compared to Rs. 641.049 millions as recorded during the previous year ended on 31st March 2005 recording growth of 22%. 

AWARDS & ACCOLADES 

The Company was awarded the Silver Trophy by the Handloom Export Promotion Council, Ministry of Textiles, and Government of India on August 22nd, 2006 in New Delhi by Hon'ble Minister of Textiles, Shri Shankarsinh Vaghela. 

BUSINESS OVERVIEW 

As reported in the Directors Report for year ended 31st March 2005 the Company has seen positive developments following the strategy for marketing directly and indirectly to International buyer. The Board is confident that the Company will reap the material benefits in the Current Year and in the years to come. 

The Bathmat and Dye-house Plants of the Company have become fully operational and have started contributing to the business of the Company. In order to cater to the ever expanding requirements of the International buyers and in anticipation of substantial orders expected in the near future, the Company has already undertaken the further Capex to the tune of about Rs. 360.000 Millions. 

The Board felt it necessary to take these steps in order to augment the capacity expansion to meet the projected demand. 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT 

OVERVIEW 

The Indian Textile Industry has an overwhelming presence in the economic life of the country. Apart from providing one of the basic necessities of life, the textile industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country. Currently, it contributes about 14 per cent to industrial production, 4 per cent to the GDP, and 16 per cent to the country's export earnings. It provides direct employment to about 35 million people. The Textile sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation.

ECONOMY AND BUSINESS OUTLOOK

The Minister of Textiles, Shri Shankarsinh Vaghela while addressing the Conference of Chief Ministers / Industry and Labour Ministers of major Textile Producing states, Labour unions and Industry representatives on July 25, 2006 said that Indian Textile Industry is confident of carving out a greater share in the global markets in the days to come. He further added that there is resurgence in the textile sector in the post quota period and the mood of industry is upbeat. 

Foreign firms are likely to play a key role in the future growth of the Indian textile industries with the emergence of the country as a competitive supplier in the global arena, a recent report from the US government's agriculture department said. While China has remained a preferred supplier so far, global firms are also becoming increasingly interested in India- 'both to reduce risk through diversification and because of the growing perception of India as a competitive supplier with domestic sources of fabric,' the US Department of Agriculture's Economic Research Service said in a report. Global retail giants like Wal-Mart, JC Penney, etc. are among the major companies, which have been attracted to India because of its potential to provide one-stop shopping. 

Further the Textile Ministry has favored extension of the hugely popular Technology Upgradation Fund Scheme for another two years till 2009. The extension has been proposed so that enough investment flows into the sector before China, world's largest textile exporter and India's bigger rival in the overseas market, becomes a full-fledged member of the World Trade Organization in 2008. As China is still not a full-fledged member of WTO, the US and EU have imposed quota restrictions on Chinese imports. After 2008, they would not be able to impose such sanctions. According to estimates, the Indian textile industry needs Rs 1400000.000 millions investment to achieve a targeted size of Rs 3825000.000 millions (85 billion dollars) by 2010. 

The government has so far sanctioned projects with a combined investment of about Rs 150000.000 millions under the scheme that was launched in 1999. The total subsidy payout by the government under the scheme has been Rs 27000.000 millions as against the target of Rs 24000.000 millions. The scheme was launched to address the weakness of the organized textile sector, which had fallen into decay because of fiscal regime loaded against them. 

FIXED ASSETS

Ø Land-Freehold

Ø Building

Ø Plant and Machinery

Ø Furniture and Fixtures

Ø Office Equipments

Ø Electrical Installations

Ø Vehicles

Website details attached:

"Faze Three" is a renowned manufacturer and exporter of Home Interiors to major stores & textile companies all over the world. As a rare combination, it houses the complete line of home interiors all under one roof. . Its product range includes an entire range of bedspreads, decorative cushions, tabletops, durries, throws, scatter rugs, bathmats and tufted carpets. The Company boasts of its own manufacturing facilities at prime locations and a design and research center headed by internationally acclaimed designers. "Faze Three" has been the recipient of awards from the Government of India for consistently achieving export targets in its category.

MISSION

To excel their customers’ expectations by ensuring quality, service and price. A policy of continuous improvement based on anticipation and adjustment to the emergence of new technologies, and the changing business environment. To build lasting relationships with their Customers, Suppliers and Business Partners. For an organization to be successful, success must be an on-going process, accelerating with every passing moment.

GOALS AND OBJECTIVES

Performance and success throughout the world. Aiming for height in the markets of tomorrow. Increasing competitions and global challenges. Establishing new businesses with ease and speed.

ACHIEVEMENTS

The Company has recently been awarded the QS 9000 certification for implementation and application of Quality Management Systems. The Dadra plant was commissioned in 1997. The unit shares joint venture collaboration between "Faze Three" and Aunde Achter & Ebels Gmbh (Germany). Aunde a global giant known for its line of automotive fabrics and seating systems has a dynamic worldwide presence having 55 plants in 19 countries. Aunde is one of the leading suppliers of automotive fabric to BMW, Mercedes, Ford, Volkswagen, and General Motors etc.  

The unit caters to the growing demand of the automobile industry. The state-of-the-art machinery with the technological backing of its multinational JV partners enables the automotive division of "Faze Three" to manufacture international quality fabric. The Company is currently working towards being a hub for suppliers to China and Asia Pacific.

"Faze Three’s" vision is to become an integrated manufacturer of automotive upholstery. A vertical in-house production of Air Texturized yarn to Lamination.

Good design and quality seat fabric create favorable impressions about an automobile. CAD methods are employed to perfect the designs. Various kinds of fabric are manufactured to optimize design, performance and price parameters.

Ultra modern looms, stentering and lamination machines are employed to manufacture quality fabric. All seat covers are subjected to stringent quality control tests, which are carried out in its laboratory modeled on international standards.

It is a major supplier to major OEM’s like Hyundai, GM India, Ford, Fiat, Maruti, and Daewoo. The plant is targeting to attain QS 9000 certification by September 2001.  

The unit’s design studio in Mumbai and Dadra is backed by the latest technology and accurate fabric engineering procedures to forecast customer needs and adhere to customer specifications. The studio’s ability to integrate international and domestic perspectives has given rise to a unique library of trends and designs.

The Retail outlet is situated in a discreet corner of Nepean Sea Road - Mumbai’s high profile area. It has proved to be the city’s newest home fashion destination. "AA Living" as it is called is living proof of how traditional Indian weaves, designs, fabrics and raw materials can be the inspiration for a whole host of modern, stylish and co-ordinate décor ideas. 

The parent company "Faze Three" has an exclusive team of designers for "AA Living". This ensures exclusivity in design, as they do not supply fabric to any other outlet in India.

At "AA Living" one can find an entire range of irresistible yet affordable products for the style conscious. Here bathmats complement shower curtains and bathroom ceramic sets, while a wide range of bath, hand and face towels beckon in different colours. From bathroom to bedroom, one can easily retreat at the end of a long day to a heaven of bright colours, intriguing patterns and calming neutral tones. The bedlinen varies from knit bedspreads to quilted bedspreads to create a luxurious look. Whatever the style, “AA Living" makes sure the bedroom and bathroom are places where you can relax, rest and recharge.

Floor coverings in the form of Carpets are available in a range from New Zealand Wool to Polyester, from bright vibrant colours to subdued pastels or rugs..... Works of Art you can walk on. All these boast of unique modern designs with an exclusive feel.

There are also Chenille rugs and cotton durries in dozens of designs, sizes and textures. More choice than ever at prices that are a walkover to afford. Plus new products arriving all year round.

"AA Living" is also known to stock a wide variety of gift items of brass and an exclusive range of knockdown furniture made from eco-friendly rubber wood. The furniture range consisting of an exclusive product line is already being ushered into homes all over the world.

The entire aura of the outlet helps to create a distinctive and individual look with custom-made upholstery. One could easily combine checks, stripes, floral, and plains to achieve a relaxed electric look.....in "AA Living".

V R WOODART LIMITED

V R WOODART - the vertically integrated unit for Rubber wood produce in India started its marketing activities two years ago. The parent Company Faze Three Limited is today a major exporter of Home Interiors catering to majors all over the world.

Indian rubber wood has a 20 year cycle as against 10 years in the Far East. This wood is therefore, of greater dimensional stability, dense fine grain, easily workable edges and high mechanical resistance. It also has much greater intrinsic strength with even thickness and uniformity in light colors for staining and lacquering.

Location Highlights

The plant is located in the state of Kerala, which is one of the largest untapped resources of rubber wood in the world. Cochin being a port city makes shipment for products fast, frequent and cost-effective.

About the Plant

The V R Woodart plant is a vertically integrated Company having 3 factories; one for processing and the other for finishing. The third is under construction in Tamilnadu. It is a state-of-the-art manufacturing unit backed by International standards and development facilities. A well managed work force and professionally managed team of dynamic result oriented people ensure uncompromising quality and timely deliveries of products. The unit boasts of an in-house quality control department, which assures an international standard of all its products. The plant is currently supplying products to majors in the U.S. and the U.K.

Products

Its intrinsic strength lies in having one of the finest machines for making up to 12 feet laminated boards. The machine mix allows it to manufacture products such as panel boards, S4S, Face Frames, doors along with the complete range of household and kitchen accessories.

The unit at Panipat about 90 Kms from Delhi, the capital of India, is spread over 69,000 sq. meters along with a factory at Dadra spread over 20,000 sq. mts.

The in-house manufacturing facilities backed by continuous improvement and technology upgradation have given the unit a competitive edge. The unit boasts of a large worldwide customer base in USA, Europe, Australia and Japan and is an accredited supplier to major Home Stores namely JC Penney, Marks & Spencer, Wal-Mart etc. and also to textile companies such as Mohawk, Springs, Whitley Willows and Selkon to name a few.

Outstanding creativity, innovation, uncompromising quality, value addition, fair competitive pricing, practical implementation, global perspective have contributed   to making "Faze Three" one of the known Indian exporters of home furnishings. It has been the recipient of the Silver Trophy for 3 consecutive years awarded by the Government of India for achieving the second highest sales in its category. Ultra modern looms, dyeing facilities, latest designing and development strategies are employed to produce world-class products, which are being sourced to major textile giants all over the world.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No 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. 41.57
UK Pound	1	Rs. 82.14
Euro	1	Rs. 55.74

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	4
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		43

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.	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

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