MIRA INFORM REPORT

Report Date :

30.08.2007

IDENTIFICATION DETAILS

Name :	BANCO PRODUCTS (INDIA) LIMITED
Registered Office :	Bil, Near Bhaili Railway Station, Padra Road, District Baroda – 391 410, Gujarat
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	16.03.1961
Com. Reg. No.:	04-1039
CIN No.: [Company Identification No.]	U51100GJ1961PTC001039
TAN No.: [Tax Deduction & Collection Account No.]	BRDB00588A
PAN No.: [Permanent Account No.]	AAACB8630L
Legal Form :	A Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers and Sellers of Auto Ancillaries such as Gaskets and Radiators.

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 3000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having satisfactory track records. Available information indicates high financial responsibility of the company. Their trade relations are reported as fair. Financial position of the company is good. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Bil, Near Bhaili Railway Station, Padra Road, District Baroda – 391 410, Gujarat, India
Tel. No.:	91-265-2330220-22/2343183/84
Fax No.:	91-265-2332433
E-Mail :	feedback@bancoindia.com mitesh@bancoindia.com
Website :	http://www.bancoindia.com
Factory:	· Bil, Near Bhaili Railway Station, Padra Road, District Vadodara – 391 410, Gujarat · At Ankhi, Taluka Jambusar, District Bharuch, Gujarat

DIRECTORS

Name :	Mr. V. K. Patel
Designation :	Chairman
Name :	Mr. A. G. Shroff
Designation :	Director
Name :	Mr. S. K. Patel
Designation :	Director
Name :	Mr. M. K. Patel
Designation :	Director
Name :	Mr. P. M. Kadakia
Designation :	Director (upto 07.06.2004)
Name :	Mr. Ram Devidayal
Designation :	Director
Name :	Mr. R. R. Biswas
Designation :	Executive Director
Name :	Mr. Mukesh Khanna
Designation :	Company Secretary
Name :	Mr. Sudhir Munjal
Designation :	Director (From 24.11.2004)

KEY EXECUTIVES

Name :	Mr. Dinesh Kavthekar
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters' Holdings	4687492	69.34
non promoter's holdings
Banks, Financial Institutions	200	--
Bodies Corporate	160098	2.37
Non residents Indians	495371	7.33
Mutual Funds and UTI	820	0.01
Public	1416915	20.95
TOTAL	6760896	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Sellers of Auto Ancillaries such as Gaskets and Radiators.

Products :

Products Description	Item Code No.
Gaskets	401693, 681290, 848410
Radiators	870891

Brand Names :

Banco Royal (gaskets) and Banco (radiators)

Imports :

Countries :

Europe, Japan and Far East countries

Terms :

Purchasing :

L/C, D/A and D/P

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Gaskets	Nos. in millions	80.000	80.000	50.276
Radiators	Nos.	375000	375000	287007
C F J S	MT	4000	4000	886.89

GENERAL INFORMATION

Customers :

The company' major customers include Original Equipment Manufacturers

v Tata Engineering and Locomotive Company Limited

v TVS Suzuki Limited

v Ashok Leyland Limited

v Mahindra & Mahindra Limited

v Maruti Udhyog Limited

v Railways

No. of Employees :

500

Bankers :

v Bank of Baroda, Baroda, Gujarat

v State Bank of India, Madame Cama Road, Mumbai – 400021, Maharashtra, India

v HDFC Bank, Baroda, Gujarat

v Centurion Bank of Punjab Limited, Gujarat.

v ICICI Bank Limited

v Standard Chartered Bank

v ABN Amro Bank

Facilities :

SECURED LOANS	Amount (in Millions)
1. Rupees Loan
[a] From Bank	147.491
2. Foreign Currency Loan
(a) From Bank	47.125
Working Capital Loan
Working Capital Borrowings from Schedule Banks	316.967
Other Loans (Vehicle Loan)
Vehicle Loan form ICICI Bank Limited
(Repayable within one year Rs. 0.816)
(Previous Year Rs. 1.179)	0.816
Interest accrued and due	0.225
TOTAL	512.625

Note:

1. Working capital loans are secured by hypothecation of stocks and book debts of Company ranking pari-passu in favour of Participating Scheduled Banks.
2. Vehicle Loan is secured by hypothecation of vehicle, financed by ICICI Bank Limited.
3. Foreign Currency Term loans from ABN Amro Bank is secured by an exclusive hypothecation charge over specific fixed assets (Machinery/Equipments /Plant) pertaining to the Capital Expenditure Programs.
4. Rupee Term Loan From Scheduled Banks are secured by first charge of plant and machinery acquired/ to be acquired for modernization and expansion of the Company are ranking pari passu between Centurion Bank of Punjab and State Bank of India also specific machinery with Standard Chartered Bank.

Banking Relations :	Good
Auditors :
Name :	Shah & Company Chartered Accountants
Address :	Mumbai
Collaboration :	Elring Klinger Germany Japan Metal Gaskets
Associates/Subsidiaries :	Banco Aluminium Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
20000000	Equity Shares	Rs. 10/- each	Rs. 200.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6760896	Equity Shares	Rs. 10/- each	Rs. 67.608 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		67.609	67.600	67.600
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		858.970	678.900	610.171
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		926.579	746.500	677.771
LOAN FUNDS
1] Secured Loans		512.625	296.800	84.409
2] Unsecured Loans		4.541	61.000	77.056
TOTAL BORROWING		517.166	357.800	161.465
DEFERRED TAX LIABILITIES		59.835	0.000	38.788
TOTAL		1503.580	1104.300	878.024
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		602.703	465.900	267.082
Capital work-in-progress		1.554	8.500	0.108
INVESTMENT		9.405	12.800	14.771
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	407.293	311.400	388.995
	Sundry Debtors	638.356	433.400	317.905
	Cash & Bank Balances	41.736	70.600	25.422
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	91.085	77.800	91.503
Total Current Assets		1178.470	893.200	823.825
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	276.687	218.300	168.061
	Provisions	11.865	57.800	59.701
Total Current Liabilities		288.552	276.100	227.762
Net Current Assets		889.918	617.100	596.063
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1503.580	1104.300	878.024

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		2602.100	1726.753	1904.300
Other Income		65.163	25.234
Increase/Decrease in Stock		41.917	[25.440]
Total Income		2709.180	1726.547	1904.300
Profit/(Loss) Before Tax		303.518	184.617	184.700
Provision for Taxation		50.933	57.513	57.600
Profit/(Loss) After Tax		252.585	127.104	127.100
Earnings in Foreign Currency :
Total Earnings		865.151	635.656
Imports :
	Raw Materials	527.958	247.073
	Stores & Spares	4.966	1.923
	Capital Goods	70.939	0.778
	Others	0.000	71.185
Total Imports		603.863	320.959
Expenditures :
	Payment to and Provision for employees	104.467	85.666
	Manufacturing Expenses	265.255	190.209
	Selling and Distribution Expenses	201.974	141.147
	Administrative Expenses	44.989	32.253	1658.700
	Raw Material Consumed	1685.813	1031.767
	Interest	42.169	20.961
	Depreciation & Amortization	60.994	39.926
	Other Expenditure	0.000	0.000
Total Expenditure		2405.661	1541.929	1658.700

QUARTERLY RESULTS

PARTICULARS	30.06.2007
Type	1st Qtr
Sales Turnover	681.200
Other Income	10.100
Total Income	691.300
Total Expenditure	588.100
Operating Profit	103.200
Interest	12.100
Gross Profit	91.100
Depreciation	17.200
Tax	8.600
Reported PAT	64.600

200706Quarter 1 -

Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (26.073) million Consumption of Raw Materials Rs 455.810 million Staff Cost Rs 31.728 million Other Expenditure Rs 126.648 million Tax Includes Provision for Current Tax Rs 8.380 million Deferred Tax Rs 0.787 million Fringe Benefit Tax Rs 0.200 million EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2007 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. Previous year figures are regrouped wherever necessary to confirm to the current period groupings. 2. The Company is engaged in Automobile Ancillary business only and therefore reporting under AS-17 is not required. 3. The Statutory Auditors have carried out a 'Limited Review' of the results for the quarter ended June 30, 2007. 4. The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors of the Company at their respective meetings held on July 28, 2007.

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt Equity Ratio	0.52	0.37	0.16
Long Term Debt Equity Ratio	0.22	0.12	0.01
Current Ratio	1.82	1.93	2.06
TURNOVER RATIOS
Fixed Assets	3.49	3.10	2.90
Inventory	8.06	5.44	4.40
Debtors	5.41	5.07	4.59
Interest Cover Ratio	8.19	9.80	23.62
Operating Profit Margin (%)	14.04	12.90	15.37
Profit Before Interest and Tax Margin (%)	11.93	10.80	13.19
Cash Profit Margin (%)	10.82	8.77	9.93
Adjusted Net Profit Margin (%)	8.72	6.67	7.74
Return on Capital Employed (%)	27.20	21.25	24.00
Return on Net Worth (%)	30.31	17.94	16.22

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.297.20/-
Low	Rs.272.00/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was incorporated in Mar.'61 as Gaskets and Oilseals, with manufacturing facilities at Ankhi and Bhaili (Gujarat), is one of the players in the gasket and radiator segments. Its products find wide applications in automobiles, oil engines, compressors, locomotives, machinery, etc. The company's OEM customers include TELCO, TVS Suzuki, Ashok Leyland, Mahindra & Mahindra, Maruti Udyog and the Railways. BPIL also enjoys a presence in the replacement market. Its products are sold under the brand names, Banco Royal (gaskets) and Banco (radiators). It has a capacity to manufacture 520 lac gaskets and 1.4 lac radiators.

Since its public issue in Sep.'86, the company has been recording a steady growth, except for a setback in 1992-93. It issued bonus shares in 1994-95. 

The Company signed an agreement with Japan Metal Gaskets Co., Japan to get the know how of Multi Layer Steel Gaskets (MLS) which is considered one of the advanced gasketing technology. For design support Elring Klinger, Germany is providing consultancy for non-retorque Cylinder Head Gasket manufacturing. 

The Company's quality system is certified with TS16949 by UL, USA.

BUSINESS

Subject is engaged in the business as manufacturers and sellers of Auto Ancillaries such as Gaskets and Radiators.

Subject is one of the leading players in the gasket and radiator segments. Its products find wide applications in automobiles, oil engines, compressors, locomotives, machinery, etc.

Its products find wide applications in automobiles, oil engines, compressors, locomotives, machinery, etc. The company’s OEM customers include TELCO, TVS Suzuki, Ashok Leyland, Mahindra & Mahindra, Maruti Udyog and the Railways. The company also enjoys a presence in the replacement market.

It’s products are sold under the brand names Banco Royal (gaskets) and Banco (radiators).

The company signed an agreement with Japan Metal Gaskets Company, Japan to get the know how of Multi Layer Steel Gaskets (MLS), which is considered one of the advanced gasketing technology. For design support Elring Klinger, Germany is providing consultancy for non-retorque Cylinder Head Gasket manufacturing.

The company’s quality system is certified with TS16949 by UL, USA.

The company's products such as gaskets are sold under the brand name "Banco Royal" and radiators are sold under the brand name "Banco".

operatons

Growing Radiator Market in Exports as well as in Domestic OEM Market, on-going investments in capacity as well as on product development, Competitive Cost Structure has resulted in to a sales growth of around 50%, compared to the Financial Year ended on 31.03.2006.

Introduction: 
Subject is in the business of manufacturing Gaskets and Radiators - both of which are considered important components in sealing and cooling applications in Automotive and industrial engines. The Company has always focused on development / improvement activities of the products which can be seen from the on going capital investment made by the Company. 

Industry Structure and Developments: 

2006-07 year was a good year for Automobile Industry in general. Except Industrial Radiators, most of the Automobile Sector has shifted to Aluminum Radiator. Gasket Market has remained more or less at the same level. Recently, slowdown has started in Automotive Sector to which the Company is major supplier. However, it is expected that the same to be of temporary nature. 

Their Operations: 

The focus at their manufacturing facilities continued to be higher productivity, shorter lead time, faster development and validation of new products, with major focus on Aluminum Radiator and exports in particular. 

Technology:
The Company's agreement with Japan Metal Gaskets Co., Japan on need base technical know how is in force. 

Internal Control and its Adequacy: 

The Company has successfully obtained renewal of TS-16949 certification and now started Lean 6-sigma implementation. Software for inter and intra department communication and follow up has been upgraded to latest version. For data security specifically in design section suitable software has been installed.

The system of internal control designed to provide reasonable maintenance of proper accounting records and the reliability of operational and financial information complying with statues, safeguarding assets from unauthorized use or losses executing transaction with proper authorization ensuring compliance of corporate policies used with a view to running business. The Company has clearly defined organization structure and lines of authority. Sufficient control is exercised through monthly, quarterly and annual business review by the management Review Committee and application of Corporate Governance. An internal audit system is in place. Normal foreseeable risks to the Company's assets are adequately covered by comprehensive insurance.  
The Company had appointed M/s K C Mehta & Co. Chartered Accountants to carry out Internal Audit of the Company's activities during the Financial Year. 

In line with well accepted practices and objectives, the planning and internal audit is oriented towards the review of operational controls in the management risk strengths and opportunities.

The Company has an Audit Committee, which reviews the Reports of Internal and External Auditors, make suggestions for improvements, follow upon the implementation of corrective actions and keeps informed the Board of its major observation from time to time. 

It is in trade terms with :-

v Snehal Printing Bureau

v Marigold Paints Private Limited

v Aashirvad Engineering Works

v Kanam Printery

v Arihant Packaging

v Desai Engineering Works

Fixed Assets:

Goodwill, Freehold Land, Buildings, Plant & Machinery, Furniture, Fixture & Office Equipments, Vehicles and Other Assets.

AS PER WEBSITE:

The company started in 1962 with the goal of supplying quality products and services for maximum client satisfaction to clients throughout the world.

They have four modern manufacturing plants based at Baroda (Vadodara), approximately 400 kilometers north from Bombay (Mumbai), with state-of-the-art facilities for Production, Design & Development and Quality Assurance. They have a dedicated and professional team working on innovative programs using advanced technology to meet tough challenges. Their quality systems are certified to ISO/TS 16949:2002.

They are working in collaboration with Elring Klinger, Germany and Japan Metal Gaskets, Japan for the Indian market.

With a personnel strength of 600 plus dedicated to produce a better product, combined with constant investments in Design and Development, Banco Products (India) Limited is at the forefront of its field.

Products:

Gaskets

Banco Products is a leading manufacturer of Gaskets in M.L.S., Graphite, Fibre Steel and Copper designs for Automotive, Agricultural vehicles, Diesel Commercial vehicles as well as for Automotive vehicles.

Radiators

Banco Products is a leading radiator manufacturer and radiator exporter in India. Banco Products manufactures high performance radiators for cars and pickups. They also manufacture Industrial radiators, air to air intercoolers, custom designed intercoolers and intercoolers cores for various Commercial vehicles and off road Industrial applications. They are also suppliers of radiators and intercoolers to all major OEMs within India and in Europe.

Compressed Fibre Jointing Sheets (CFJS)

Banco Products manufactures high quality compressed jointing sheets using non asbestos raw materials which are environmentally friendly. Banco Products exports all varieties of compressed fiber jointing sheets which cover a complete range of Automotive and Industrial applications world wide.

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.41.04
UK Pound	1	Rs.82.76
Euro	1	Rs.56.07

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--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		63

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

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