MIRA INFORM REPORT

Report Date :

21.08.2007

IDENTIFICATION DETAILS

Name :	DHANUKA LABORATORIES LIMITED
Formerly Known As :	DHANUKA LABORATORIES PRIVATE LIMITED
Registered Office :	861-862, Joshi Road, Karol Bagh, New Delhi – 110005
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	24.02.1993
Com. Reg. No.:	55-52285
CIN No.: [Company Identification No.]	U74999DL1993PLC052285
TAN No.: [Tax Deduction & Collection Account No.]	DELD04043E
PAN No.: [Permanent Account No.]	AAACD2877R
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturers and Exporters of Pharma Bulk Drugs and Intermediates.

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 390000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having satisfactory fine track. Trade relations are fair. Payments are correct and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as promising business partner in a medium to long run.

LOCATIONS

Registered Office :	861-862, Joshi Road, Karol Bagh, New Delhi – 110005, India.
Tel. No.:	91-11-23518981/ 23518982/ 23518983
Fax No.:	91-11-23516750 / 23518981
E-Mail :	dhanuka@bol.net.in dhanuka@vsnl.com manishdhanuka@dhanuka.com
Website :	http://www.dhanuka.com
Location :	Commercial
Head Office / Corporate Office :	Dhanuka Group, Dhanuka House, 861-862, Joshi Road, Karol Bagh, New Delhi- 110 005, India
Tel. No.:	91-11-23519461 to 63/23518982/23518983/ 23518925/ 27534112 / 23518981/2/3
Fax No.:	91-11-23518981/ 23516750
E-Mail :	dhanuka@bol.net.in
Factory/ Warehouse :	7KM, Old Manesar Road, Village, Mohammed Pur, District – Gurgaon, Haryana, India.
Tel. No.:	91-124-2371884/ 2372715
Fax No.:	91-124-2371931
E-Mail :	dhanuka@vsnl.com / dhanukaggn@sify.com
Area :	3000 sq. meters - Owned Industrial

DIRECTORS

Name :	Mr. Arun Kumar Dhanuka
Designation :	Director
Address :	4/31 – B, Rajpur Road, Civil Lines, Delhi - 110054
Date of Appointment :	30.12.1994
Name :	Ms. Pushpa Dhanuka
Designation :	Director
Address :	4/31 – B, Rajpur Road, Civil Lines, Delhi - 110054
Date of Appointment :	21.09.1996
Name :	Mr. Manish Dhanuka
Designation :	Managing Director
Address :	4/31 – B, Rajpur Road, Civil Lines, Delhi - 110054
Date of Appointment :	30.12.1994
Name :	Ms. Seema Dhanuka
Designation :	Director
Address :	4/31 – B, Rajpur Road, Civil Lines, Delhi - 110054
Date of Appointment :	21.09.1996
Name :	Mr. Mahendra Kumar Dhanuka
Designation :	Director
Address :	95-B, E-2, Lane, Estern Avenue, Sainik Farms, New Delhi - 110062
Date of Appointment :	02.03.1999
Name :	Mr. Rahul Kumar Dhanuka
Designation :	Director
Address :	95-B, E-2, Lane, Estern Avenue, Sainik Farms, New Delhi - 110062
Date of Appointment :	02.03.1999
Name :	Mr. Harsh Kumar Dhanuka
Designation :	Director
Address :	95-B, E-2, Lane, Estern Avenue, Sainik Farms, New Delhi - 110062
Date of Appointment :	24.10.2001
Name :	Ms. Urmila Dhanuka
Designation :	Director
Address :	95-B, E-2, Lane, Estern Avenue, Sainik Farms, New Delhi - 110062
Date of Appointment :	24.10.2001

KEY EXECUTIVES

Name :	Mr. Mridul Dhanuka
Designation :	Vice – President [Technical]

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Dhanuka Kumar Arun	13550
Dhanuka Manish	5440
Dhanuka lal Late Gobind	410
Dhanuka Mamta	9190
Dhanuka Seema	3700
Arun Kumar Dhanuka – HUF	1000
Duke Impex Private Limited	9850
Growth Advertising and Marketing Private Limited	9750
Cosmo Components Private Limited	10200
Late Gobind Lal Dhanuka – HUF	10200
Liberty Sales Private Limited	12250
Dhanuka Pushpa	27300
Manish Dhanuka – HUF	3850
Exclusive Leasing and Finance Limited	12700
Hindon Mercantile Limited	15800
Delco Investment Company Limited	2700
M K Farmers Investments Limited	7500
Gupta Dass Ghanshyam	1000
Khowala Reema	1000
Dhanuka Rahul	4000
Agarwal Gopal Ram	4250
Dhanuka Kumar Mahendra	3250
Shree Krishna Khetan	4000
Zoom Leasing and Finance Company Limited	19800
Dhanuka Megha	1700
Shirewala Vimal	10
Dhanuka Versha	4400
Dhanuka Mahendra HUF	7000
R G Agarwal HUF	25800
Vinaj Khetan	4500
Sikkum Agro Industrial Limited	2000
Rahul Dhanuka HUF	15000
Yasaki Export Private Limited	15000
Rakesh Impex Private Limited	16000
Rasu Traders Private Limited	15000
A R Builores private Limited	15000
Smit Advertisers Private limited	16000
Kanika Advertisers Private limited	15000
Stir Cement Products Private Limited	15000
Suraj Advertisers Private Limited	15000
Unnati Steel Private Limited	15000
Sauagar Impex Private Limited	14000
T S Computers Private Limited	14000
T S Packing Private Limited	14000
Pushpanjali Export Private Limited	10000
Lotus Plantation Private Limited	10000

BUSINESS DETAILS

Line of Business :	Manufacturers and Exporters of Pharma Bulk Drugs and Intermediates.
Products :	· Cephalexin Monohydrate (IP/BP) · Cefadroxil (IP/UBP) · Cefaclor (USP) · Cefixime Trihydrate · Cefdinir · Cefuroxime Proxetil · 7-Amino Desacetoxy Cephalosporanic Acid · Simvastatin (USP) · Caldan 4G · Caldan 50 SP · Sheathmar · Nukil · Kasu-B · Vitavax · Dimilin · Plantvax · Targa Super · Dhanusan · Dhanvan · Triumphcard · Superkiller · Dhanuvit · Dhanzyme Liquid and Granules · Dhanulux
Exports :
Countries :	Singapore, Thailand, Hongkong, Bangladesh, Pakistan, Iron, Dubai, Jordan and China
Imports :
Countries :	China, Germany, Hongkong [Occasionally] and Japan
Terms :
Selling :	Cash or L/C or Credit upto 30/ 60 days terms
Purchasing :	L/C or Credit upto 30/ 60 days terms

GENERAL INFORMATION

Suppliers :	Ø Alembic Limited, Baroda, Gujarat Ø Dauralla Organics Limited, New Delhi, India Ø Relaince Silicon Limited, Mumbai Ø DSM Gist BV, Holland.
Customers :	Wholesaler and Manufacturer Some of its major customers are as under: Ø Rajasthan Drugs & Pharmaceuticals Limited, India Ø RPG Life Sciences Limited, Ankleshwar, Gujarat Ø Goa Antibiotics Limited, India Ø Cadila Healthcare Limited, Ahmedabad, Gujarat
No. of Employees :	Around 250
Bankers :	Ø Centurion Bank of Punjab Limited – Gurudwara Road, Karol Bagh Ø ICICI Bank – Sector 14, Gurgaon, Haryana Ø Corporation Bank – Industrial Finance Branch, Karol Bagh Ø Indus IND Bank Limited – Nehru Place Branch, New Delhi Ø State bank of Hyderabad, Scope Complex., Lodhi Road, New Delhi
Financial Institution :	Haryana Financial Corporation, 17.18 and 19 Sector – 17A, Chandigarh
Facilities :	C/C and L/C facility from all Banks.

Banking Relations :	Good
Auditors :
Name :	Uttar Pradesh office: Gupta Garg and Agarwal Chartered Accountants 307, Ocean Plaza, Sector 18, Noida- 201 301, India Tel. No. : 91-120-2510511/ 2514217 Fax No. : 91-120-2514217 E- Mail : gganoida@hotmail.com Delhi Office: G-55 Royal Palace, Laxmi Nagar, Delhi- 110 092, India Tel. No. : 91-11-22202455/ 22215914
Affiliates :	Ø Dhanuka Pesticides Limited, India Ø Northern Minerals Limited, India [Both merged since 2006 and now running in name of Dhanuka Agritech Limited]
Group Company :	Ø Growth Advertising and Marketing Private Limited Ø Liberty Sales Private Limited Ø Cosmo Components Private Limited Ø Duke Impex Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
500000	Equity Shares	Rs. 100/- Each	Rs. 50.000 million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
439000	Equity Shares	Rs. 100/- Each	Rs. 43.900 million

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		43.900	43.900	23.900
2] Reserves & Surplus		55.560	41.231	29.165
NETWORTH		99.460	85.131	53.065
LOAN FUNDS
1] Secured Loans		98.144	70.326	72.518
2] Unsecured Loans		74.305	69.694	70.667
TOTAL BORROWING		172.449	140.020	143.185
DEFERRED TAX LIABILITIES		16.273	17.123	12.642
TOTAL		288.182	242.274	208.892
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		93.909	92.516	77.514
Capital Work in Progress		6.285	0.000	0.000
INVESTMENTS		1.000	0.001	0.001
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	101.999	85.174	57.219
	Sundry Debtors	136.174	116.171	128.355
	Cash & Bank Balances	11.759	11.373	18.351
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	63.652	48.591	27.753
Total Current Assets		313.584	261.309	231.678
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	118.752	109.527	99.629
	Provisions	8.313	3.100	2.200
Total Current Liabilities		127.065	112.627	101.829
Net Current Assets		186.519	148.682	129.849
MISCELLANEOUS EXPENSES		0.469	1.075	1.528
TOTAL		288.182	242.274	208.892

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		586.048	582.598	539.783
Other Income		113.860	26.588
Total Income		699.908	609.186	539.783
Profit/(Loss) Before Tax		20.241	19.955	15.000
Provision for Taxation		5.913	7.889	8.557
Profit/(Loss) After Tax		14.328	12.066	6.443
Earnings in Foreign Currency :
Total Earnings		NA	201.026	162.101
Imports :
Total Imports		NA	229.599	220.981
Expenditures :
	Raw Material Consumed	472.877	480.212
	Manufacturing Expenses	54.828	59.869
	Personnel Expenses	13.645	10.850	521.091
	Financial Expenses	19.414	18.393
	Administrative Expenses	4.289	3.591
	Selling and Distribution Expenses	9.450	11.840
	Depreciation	5.163	4.475
Total Expenditure		579.666	589.230	521.091

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	2.05	1.98	1.19
Net Profit Margin (PBT/Sales)	(%)	3.45	3.43	2.78
Return on Total Assets (PBT/Total Assets}	(%)	4.97	5.64	4.85
Return on Investment (ROI) (PBT/Networth)		0.20	0.23	0.218
Debt Equity Ratio (Total Liability/Networth)		3.01	2.96	4.62
Current Ratio (Current Asset/Current Liability)		2.47	2.32	2.28

LOCAL AGENCY FURTHER INFORMATION

Fixed Assets

v Air conditioner

v Building

v Cellular Phone

v Computer

v Electric and Instruments

v Fore Fighting Equipments

v Furniture and Fixture

v Lab Equipments

v Land

v Office Equipments

v Plant and machinery

v Steel Structure

v Vehicles

v Commercial Vehicles

v Effluent Treatment Plant

About Group

The Dhanuka Group is a manufacturer/ formulator of a wide range of popular pesticides in Ecs, Granules, Wettables and Dust Formulations of Insecticides, Fungicides, Weedicides, PGR, Growth Stimulant and Wetting Agents. The group has emerge as a leading and growing Indian group in pesticides business with conventional as well as diversified interests.

Northern Minerals Limited (NML), a flagship company of Dhanuka Group, was acquired as sick unit in 1980 with a meager sales turnover of 17 million INR, is today a unit of over 900 million INR.

They have countrywide distribution network of distributors, preferred dealers and retailers (over 8000), supported by our branch offices in all major states and by our own marketing/ development staff, techno-commercially qualified and trained and based on all India network.

The Group has 23 branches, nearly 750 permanent employees of which 235 in marketing organization. In addition, approximately 450-500 Technical Trainees are also supporting marketing and customer service areas, especially right use technology to the growers and vendors.

Group Companies

Name of the Company : Dhanuka Pesticides Limited

Legal Status : Public Limited Company

Date of Incorporation : 13^th February, 1985

Line of Business : The Company is manufacturing technical grade pesticides namely

Fenvalerate and Cypermethrin.

Production Unit : Vill, Atta, Sohna Mandkola Road, Tehsil Nuh, District Gurgaon,

Haryana, India

Technical Tie-up : E. I. DuPont De Nemours and Company Inc., USA

Takeda Chemicals Industries Limited, Japan for Cartap Hydrochloride

and Validamycin

Mitsui Chemicals Inc., Japan for Etofenprox

Hokko Chemicals Industries Company Limited, Japan for

Kasugamycin.

Name of the Company : Northon Minerals Limited

Legal Status : Closely Held Public Limited Company

Date of Incorporation : 4^th August, 1960

Production Unit : Daultabad Road, Gurgaon- 122 001, Haryana, India

Name of the Company : Rajasthan Insecticides and Fertilizer Company Private Limited

Legal Status : Private Limited Company

Date of Incorporation : 17^th April, 1985

Porduction Unit : A 64-65, Industrial Area, Mandideep, District Raisen, Madhya Pradesh,

India

About Company : In the year 1992 Group acquired another sick unit namely Rajasthan

Insecticides and Fertilizers Company Private Limited, mainly to make

dust formulations. This unit has crossed 10,000 MTs production in the

3^rd year itself.

In 1984 their Group established a R and D unit maned Dhanuka

Agricultural Research Centre, to carry out in-house field research in

process development. It is recoginsed by Ministry of Science and

Technology, Government of India.

Cartap and Etofenprox were already in India market for over five years

without making any imprint. Dhanuka in the first year itself sold 1635

MT of Cartap Granules (Caldan4G), which in the third years has

crossed the mark of 4050 MT. Etofenprox (NUKIL 10 EC) in the first

year was 87 KL. Similarly Validamycin (Sheathmar 3L), a new molocule

in the first year itself touch the mark of 60 KL.Kasugamycin (Kasu-B)

is launched in the market in the year 2000 only.

On the hand Northern Minerals Limited joined hands technically with

Uniroyal Chemical Company Inc., USA in the year 1999 to formulate

and market Carboxin (Vitavax 75 WP), Oxycarboxin (Plantvax 20 EC)

and Diflubenzuron (Dimilin 25 WP). We are in advance negotiation

stage for further MOUs with few other MNCs.

Awards and Recognition

Ø Institute of Trade and Industrial Development Award for Quality Excellence in 1992. the prestigious awards was presented to Mr. R. G. Agarwal, the Managing Director, Northern Minerals Limited by Mr. Pranab Mukherjee, Honerable Minister of Commerce, Government of India, on the occasion of the National Seminar on Quality Consciousness, organized by the institute of 18^th December, 1993.

Ø Institute of Trade and Industrial Development Swatantrata Swarn Jayanti Udyog Vibhushan Award for Excellence in Industrial Performance was conferred on Mr. R. G. Agarwal on 27^th January, 1999.

Ø Indira Gandhi Priyadarshani Award-1992, was presented to Mr. M. K. Dhanuka, Managing Directo, Dhanuka Pesticides Limited for outstanding achievements and contribution on 76^th Birth Anniversary of Smt. Indira Gandhi by Mr. K. C. Pant, Chairman, Planning Commission on 18^th November, 1992 at New Delhi.

Ø Yuva Ratan Award-1992, was presented to Mr. M. K. Dhanuka, Managing Director, Dhanuka Pesticides Limited by All India Youth Congress on 6^th October, 1992 at New Delhi.

Ø Udyog Ratan Award was conferred upon Mr. M. K. Dhanuka, Managing Director, Dhanuka Pesticides Limited at the time of the conference on Econimic Development by Institute of Economic Studies.

Ø A award was conferred upon Mr. M. K. Dhanuka, Managing Director, Dhanuka Pesticides Limited by Lions Club for rendering invaluable support and co-operation of lionistic activities during 1998-99.

Ø Mr. R. G. Agarwal has been nominated for ITID Rajat Jayanti Udyog Award, 2000.

Name of the company

DHANUKA LABORATORIES PRIVATE LIMITED

Presented By

DHANUKA LABORATORIES PRIVATE LIMITED

1) Date and description of instrument creating the change

Loan agreement deed of hypothecation general condition dated 04.11.1997 and additional loan agreement, deed of hypothecation general condition dated 04.01.2000 and deed of hypothecation dated 11.06.2002 executed by DHANUKA LABORATORIES PRIVATE LIMITED charge registered on 15.01.1998, 14.01.2000 and 04.07.2002

2) Amount secured by the charge/amount owing on the securities of charge

Rs. 12.700 millions

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

Registered charge on plot of land measuring 2 Kanals having Khewal Khata no. 243/347-348. Killa No. 41/17/2 (2-0) and land measuring 01 Kanals 04 Matias Having khewat No. 41/17/3 ()1-4 total land measuring 3 Kanals 4 Matias and land measuring 1 Kanals 3 matias bearing Killa No. 17-31-2 (0-8). 3/2 (0-15) all land situated at Village Mohmadpur Jharsa, Tehsil and Distt, Gurgaon with factory building constructed thereon and machinery installed therein described in Schedule VI and I to the loan agreement, deed of Hypothecation, General condition dated 04.11.97 , 04.01.2000 and 11.06.2002 goodwill and other present and future assets as detailed in the said indentures.

4) Gist of the terms and conditions and extent and operation of the charge.

The principal sum of Rs. 25.335 millions to be repaid as per schedule of repayment of the aforesaid loan agreement, deed of hypothecation, general condition dated 04.11.1997 , 04.01.2000 and 11.06.2002 along with interest as mentioned in the said indenture.

5) Name and Address and description of the person entitled to the charge.

Haryana Financial Corporation 17.18 and 19 Sector – 17A, Chandigarh

6) Date and brief description of instrument modifying the charge

Tripartite agreement dated 28.10.2002 between Haryana financial corporation, DHANUKA LABORATORIES PRIVATE LIMITED and State bank of Hyderabad and Indian oversea Bank, evidencing extension of second charge in favour of consortium of banks viz. State Bank of Hyderabad and Indian Overseas Bank.

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

Limits granted by consortium of Banks viz. State Bank of Hyderabad and India Overseas Bank together with interest is now also secured by extension of second charge on all present and future fixed assets of the company situated at 7 KM Stone, Old Master Road, Village Mohammedpur, Gurgaon.

	Fund Based	Non-Fund Based	Total
SBH	198.00	500.00	698.00
IOB	132.00	300.00	432.00
Total	330.00	800.00	1130.00

Name of the company

DHANUKA LABORATORIES LIMITED

Presented By

Company and State bank of Hyderabad

1) Date and description of instrument creating the change

Hypothecation agreement for goods and assets dated 09.08.2004

2) Amount secured by the charge/amount owing on the securities of charge

Rs. 5.300 millions

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

All present and Future goods, consumable spares, stores book debts and all other movable assets of the borrower including documents of title to the goods. Outstanding, monies, receivables including receivable by way of cash incentive / cash assistance under the cash incentive scheme or any way of refund of excise / custom duties under the duty draw back credit scheme or any other schema bills, invoice investments and right and the present machinery listed in the schedule hereunto and all future machinery belonging to or in the possession or under the control of the Borrower or of the bank or of any thirds party whether in India or wherever else thought the world (including all such goods, other movable assets as may be in course of shipment transit or delivery ) (hereinafter referred to as the said god and assets) shall stand hypothecated to the Bank by way of first charge.

4) Gist of the terms and conditions and extent and operation of the charge.

Rate of interest @ 12.75 % p.a. or as may be determined by the Bank from time to time.

Repayable in 7 Quarterly installments of Rs. 0.753 millions each w.e.f. 30.09.2004

5) Name and Address and description of the person entitled to the charge.

State bank of Hyderabad

Scope Complex.,

Lodhi Road, New Delhi

6) Date and brief description of instrument modifying the charge

No instrument was executed. Letter evidencing deposit of title deeds to create equitable mortgage dated 16.02.2005

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

Term Loan of Rs. 5.300 millions together with interest, costs and expenses etc. shall now be also secured by equitable mortgage by first charge by deposit of title deeds in respect of the company’s immovable property bearing Musttil No. 41, Killa NO. 17/3/1/2 (0-8), Killa No 17/3/2 (0-15), consisting of an Area of 1 Kannal and 3 Mahammadpur, Kharsa, Tehsil and Distt. Gurgaon together with all building and structure thereon or to be thereon.

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.41.57
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	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING 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