MIRA INFORM REPORT

Report Date :

18.12.2007

IDENTIFICATION DETAILS

Name :	GTN EXPORTS LIMITED
Registered Office :	Plot No. 29, Nagarjuna Hills, Punjagutta, Hyderabad – 500 082, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	24.07.1981
Com. Reg. No.:	01-41292
CIN No.: [Company Identification No.]	U51909AP1981PLC041292
TAN No.: [Tax Deduction & Collection Account No.]	HYDG00890B
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturers of Cotton Grey and Dyed Woven Fabrics.

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 490000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company of GTN Textile Group or Patodia Group. General financial position is satisfactory. Payments are reported as Usually correct and as per commitments. The company can be considered good for normal business dealings.

LOCATIONS

Registered Office :	Plot No. 29, Nagarjuna Hills, Punjagutta, Hyderabad – 500 082, Andhra Pradesh, India.
Tel. No.:	91-40-23351585/ 78 / 79/87
Fax No.:	91-40-2335 7820 / 23358387
Email:	patodia@hdl.vsnl.net.in hyd_1patodia@gtnindustries.com
Website:	http://www.gtntex.com http://www.gtnindustries.com
Corporate Office :	Ermathala Post, Alwaye – 683 105, Ernakulam – 683105, Kerala, India
Tel. No.:	91-484-2623715
Fax No.:	91-484-2625634
E-Mail :	patodia@hd1.vsnl.net.in
Location:	Rented
Factory :	18, K. R. Puram Road, Ganapathy, Coimbatore, Tamil Nadu, India
Tel. No.:	91-422-2562930 / 2563328 / 2566517 / 2563359
Fax No.:	91-2562496
E-Mail :	gtnengg@md3.vsnl.net.in
Contact Person:	Mr. K. B. Babu, General Manager
Location:	Owned
Branches :	Located at Mumbai, Kolkata, Cochin and Chennai.

DIRECTORS

Name :	Mr. Madanlal Patodia
Designation :	Director
Address:	7 Sambhunath Mullick Lane, Kolkata – 700 007, West Bengal, India.
Email:	hyd_1patodia@gtnindustries.com
Date of Birth:	20.09.1915
Date of Appointment:	27.07.1981
Name :	Mr. Mahendra Kumar Patodia
Designation :	Managing Director
Address:	Patodia House, Plot No. 145, Road No. 3, Banjara Hills, Hyderabad – 500 034, Andhra Pradesh, India.
Date of Birth:	25.08.1951
Date of Appointment:	24.07.1981
Email:	hyd_1patodia@gtnindustries.com
Name :	Mr. Sushil Sancheti
Designation :	Director
Address:	H No. 3-6168/4, Hyderguda, Hyderabad – 500 029, Andhra Pradesh, India.
Tel. No.:	91-40-23351585
Fax No.:	91-40-23358387
Email:	sushil@ramspg.com
Date of Birth:	30.12.1973
Date of Appointment:	02.12.2006
Name :	Ms Prachi Patodia
Designation :	Director
Address:	Plot No. 145, Road No. 3, Banjara Hills, Hyderabad – 500 034, Andhra Pradesh, India.
Email:	hyd_1patodia@gtnindustries.com
Date of Birth:	14.08.1979
Date of Appointment:	08.12.2001
Name :	Mrs. Umang Patodia
Designation :	Director
Name :	Mr. Binod Kumar Patodia
Designation :	Director
Name :	Mr. T. M. Gopalaswamy
Designation :	Director
Name :	Mr. Chandulal Dayalji Thakker
Designation :	Director
Name :	Mrs. Radha Gobind Bhuradia
Designation :	Director
Name :	Mr. B. L. Singhal
Designation :	Director
Name :	Mr. Purshottamdas Patodia
Designation :	Director
Name :	Mr. Rajendra Kumar Patodia.
Designation :	Director

KEY EXECUTIVES

Name :	Mr. E. K. Balakrishnan
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
EQUITY SHARES
GTN Textiles Limited	11
Mr. Madanla Patodia	10
Mrs. Anjana Patodia	63400
PREFERENCE SHARES
Mr. Purshottamdas Patodia	20
Mr. Binod Kumar Patodia	20
Mr. Mahendra Kumar Patodia	20
Mrs. Indira Devi Patodia	20
Mrs. Sharada Patodia.	20
Total:	63521

Equity Shares Breakup (Percentage of Total Equity):

Sr No.	Category	Percentage
1	Bodies Corporate	1.21
2	Directors or relative of directors	98.79
	Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Cotton Grey and Dyed Woven Fabrics.

Products :

Ø Trading in Engineering Goods

Ø Cotton Grey and Dyed Woven Fabrics

Products	ITC Code No.
Engineering Goods- Gate Valves, Yarn Trading	520820/520900

Exports :

Countries :

Japan and Italy

GENERAL INFORMATION

No. of Employees :	90
Bankers :	Ø IDBI Bank, Coimbatore Ø Corporation Bank, Hyderabad Ø Punjab National Bank, CMO, Bank Street, Abids, Hyderabad, India.

Banking Relations :	Satisfactory
Auditors :
Name :	Lodha and Company Chartered Accountants
Address :	6, Karim Chambers, 40, Ambalal Doshi Marg (Haman Street), Mumbai – 400 023, Maharashtra, India
Parent Company:	Ø GTN Textiles Limited
Associates/Subsidiaries :	Nil

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
149750	Equity Shares	Rs. 100/- each	Rs. 14.975 Millions
250	Preference Shares	Rs. 100/- each	Rs. 0.025 Millions
	Total:		Rs. 15.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
124231	Equity Shares	Rs. 100/- each	Rs. 12.423 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		12.423	12.423	12.423
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		109.211	79.248	66.683
4] (Accumulated Losses)		[0.347]	0.000	0.000
NETWORTH		121.287	91.671	79.106
LOAN FUNDS
1] Secured Loans		94.902	137.685	112.692
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		94.902	137.685	112.692
DEFERRED TAX LIABILITIES		4.369	7.085	6.377
TOTAL		220.558	236.441	198.175
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		53.765	58.823	58.647
Capital work-in-progress		17.251	0.650	0.493
INVESTMENT		25.859	0.407	0.006
DEFERREX TAX ASSETS		4.090	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	125.444	106.260	80.837
	Sundry Debtors	29.444	8.965	21.506
	Cash & Bank Balances	2.846	34.437	55.381
	Other Current Assets	1.217	0.999	0.142
	Loans & Advances	40.836	70.495	33.464
Total Current Assets		199.787	221.156	191.330
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	69.206	19.984	31.238
	Provisions	10.988	24.611	21.063
Total Current Liabilities		80.194	44.595	52.301
Net Current Assets		119.593	176.561	139.029
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		220.558	236.441	198.175

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		349.100	342.018	313.669
Other Income		0.930	0.003	0.000
Total Income		350.030	342.021	313.669
Profit/(Loss) Before Tax		51.004	36.397	[189.011]
Provision for Taxation		[0.392]	2.584	0.000
Profit/(Loss) After Tax		50.612	33.813	[189.011]
Export Value		334.627	27.366	NA
Expenditures :
	Raw Material Consumed	145.569	183.951
	Consumption of stores and spares parts	89.586	91.396
	Increase/(Decrease) in Finished Goods	[9.524]	[42.350]
	Salaries, Wages, Bonus, etc.	28.206	23.704
	Payment to Auditors	0.060	0.045	502.680
	Interest	12.004	8.344
	Insurance Expenses	1.106	0.871
	Power & Fuel	5.157	4.075
	Depreciation & Amortization	9.061	5.913
	Other Expenditure	17.801	29.675
Total Expenditure		299.026	305.624	502.680

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	14.45	9.88	(60.26)
Net Profit Margin (PBT/Sales)	(%)	14.61	10.64	(60.26)
Return on Total Assets (PBT/Total Assets}	(%)	18.83	12.96	(75.46)
Return on Investment (ROI) (PBT/Networth)		0.42	0.39	(2.39)
Debt Equity Ratio (Total Liability/Networth)		1.44	1.98	2.09
Current Ratio (Current Asset/Current Liability)		2.49	4.96	3.66

LOCAL AGENCY FURTHER INFORMATION

The company’s product range includes :

Ø API 6A Valve Bodies

Ø Slab castings

Ø Oemcomponents

Ø Sheave Castings

Ø Ni-hard Castings

Ø Gear and Gear boxes

Ø Non – Ferrous components

Ø Valve industry

Ø Shaft and rollers

OTHER INFORMATION:

Subject is also engaged in as manufacturers of Cotton Grey and Dyed Woven Fabrics. Subject is also engaged in as manufacturers and exporters of spice oils and oleoresins.

It was the first company to export cotton yarn from India to Japan and Italy. In 1992, it exported virtually its entire production, although it is not an EOU. The installed capacity of its plant at Alwaye, Kerala has been increased from 12000 to 38600 spindles, bringing the company’s total spindleage to 60340. In January, 1993, the company came out with its maiden public issue to modernise the existing plans, meet long-term working capital requirements and invest in the groups newly promoted company, Patspin India Limited. The company and Packworth Udyog are subsidiaries of GTN Textiles.

In 2000-01, the company has raised term loan of Rs. 228.300 millions under Technology Upgradation Fund Scheme which provides for 5% interest subsidy, for marginal increase in capacity and substantial modernisation / replacement of old machinery across the units, by availing world-class technology.

Form 8:-

Name of the Company

GTN EXPORTS LIMITED

Presented by

Mr. M. K. Patodia, Director

1. Date and description of the instrument

creating or evidencing the charge

28^th October 2002

Agreement of Hypothecation of movable assets forming part of fixed/book assets.

Packing Credit agreement (Hypothecation)

2. Amount secured by the charge /amount

owing on security of the charge

Amount in Millions

Export Packing Credit	20.000
Foreign Outward Usant Bill Purchase	20.000
Term Loan I	11.700
Term Loan II	13.500
Letter of Guarantee	7.500
Foreign Letter of Credit Specific one time (Sub Limit of TL- II)	(10.000)
Total:	72.700

3. Short Particular of the property charged. If

the property acquired is subject to change

date of acquisition of property should be

given

The hypothecation assets which expression shall include all the assets and movable property of any king belonging to them, which now or hereafter from time to time during to the continuance of this agreement shall be brought in, stored or to be in or about their premises or godowns at Coimbatore and Medchal or any other godowns to be in course of transit form one godown to another or wherever else the same may be, as security for payment of the balance due to bank by them at any time or ultimately found due on the closing of the said loan accounts.

4. Gist of the terms and conditions and extent

and operation of the charge.

Interest rate @ PLR – 2.5% - Total 8% for pre and post-shipment and PLR + 3% for Term Loans.

5. Names, address and description of the

persons entitled to charge

Punjab National Bank, CMO, Bank Street, Abids, Hyderabad.

6. Date and brief description of instrument

modifying the charge

8^th August 2005

1. Packing Credit Agreement (Hypothecation).
2. Foreign Outward Usance Bills Purchase Aggrement.

3. Hypothecation of Export Incentives to secure Overdraft facility

4. Hypothecation of Movable Assets forming part of Fixed/Block Assets.

5. General Counter Indemnity for Bank Guarantee Limit.

7. Particular of modification specifying the

terms and conditions or the extent or

operation of the charge in which

modification is made and the details of

modification

Amount in Millions

	Existing	Modification
Export Packing Credit (PC/PCFC)	35.000	59.000
FOUBP	40.000	87.000
CEILING	70.000	145.000
Letter of Guarantee	7.500	7.500
OD within FOUBP	(5.000)	(5.000)
Total:	77.500	152.500

Limit under a) and b) should not be exceed Rs. 145.000 Millions and fully interchangeable both ways:

Overall Limit enhanced from Rs. 77.500 Millions to Rs. 152.500 Millions

Terms and Conditions:

Total Working Capital Limits of Rs. 152.500 Millions are secured by way of:

First Charge on the entire Current Assets (Present and Future) of the company primary security in favour of Punjab National Bank , Bank Street, Hyderabad.

Second Charge on the entire movable fixed block assets (Present and Future) of the company (Primary and Collateral) weaving division and engineering Division in favour of Punjab National Bank , Bank Street, Hyderabad.

1. Export Packing Credit: Rs. 59.000 Millions

Constinuation of the “Running account packing credit facility”

Interest: BPLR – 3.25%, presently 7.50% p.a., subject to change from time to time as per Bank/RBI guidelines. Each draw in the PC to be adjusted in 90 days. If the company fail to export goods as envisaged within the stipulated period of 90 days for the date of advance, interest @ 14.25% p.a. from the 91^st day to be paid.

Margin: 25%

2. FOUBP LIMT OF Rs. 87.000 MILLIONS:

Sublimit Rs. 15.000 Millions for bills drawn on M/S. Angus International INC., USA

Interest: As per Bank guidelines from time to time.

USANCE: As per firm order not exceeding 90 days from the date of shipment in respect of exports and not exceeding 180 days from the date of shipment in respect of shipments to Angus International Inc., USA

Margin: NIL

Bills not paid with in 30 days form the due date will be delinked and the company to pay the amount at the prevailing exchange rate on the date of delinking.

3. OD AGAINST EXPORT INCENTIVES: Rs. 5.000 Millions (Within FOUBP Limit)

Interest: As per bank guidelines from time to time

Margin: 10%

4. LETTER OF GUARANTEE LIMIT OF Rs. 7.500 Millions

Margin: 25%

Commission: As per bank guildines from time to time.

Period: Not exceeding 9 years

In case company commits default in repayment of the above loan/advance or in repayment of interest thereon, Bank/RBI will have unqualified right to disclose the name of the company.

Name of the company

GTN EXPORTS LIMITED

Presented by

Mr. V Raghuram , Authorised Signatory

1) Date and description of instrument creating the change

28.10.2002

Agreement of hypothecation movable assets forming part fixed / block assets

Packing credit agreement (hypothecation)

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

Amount in Millions

Export Packing Credit	20.000
Foreign Outward Usance Bill Purchase	20.000
Term Loan I	11.700
Term Loan II	13.500
Letter of Guarantee	7.500
Foreign Letter of Credit Specific one time (Sub Limit of TL- II)	(10.000)
Total:	72.700

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

The assets described in the schedule (attached) hereinafter referred to as the hypothecated assets which expression shall include all the assets and movable property of any kind belonging to them which now or hereinafter from time to time during the continuance of this agreement shall be brought stored or to be in or about their premises or godowns at Coimbatore and Medchal or nay other godowns to be in course of transit from one godowns to be in course of transit from one godowns to another or wherever else the same may be , as security for payment of the balance due to bank by them at any time or ultimately found due on the closing of the said loan accounts.

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

Interest rate @ PLR -2.5% - total 8% for pre and post Shipment and PLR +3% for terms loan

Others as per annexure attached.

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

Punjab National Bank

Address: CMO , Bank Street , Hyderabad – 500 001, India

6) Date and brief description of instrument modifying the charge

Letter dated 27.05.2005 from Punjab National Bank for completely repayment of term Loans only and enhanced working capital facilities remain the same

Letter dated 08.06.2005 from Punjab National Bank for ceding of 1^st Charge on block assets.

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.

Complete repayment of

Term Loan I	Rs.12.500 millions
Term Loan II	Rs. 13.500 millions

There are no outstanding in Term Loan Accounts and the Working Capital Facilities are not changed

Punjab National Bank shall have 1^st Charge on the all current assets and 2^nd charge on the entire Block assets. the 1^st Charge on Block assets and 2^nd charge on the Current assets have been ceded in favour of Exim Bank subject to their ceding 2^nd Charge on Block assets in favour of Punjab National Bank for its present and future dues.

Corporation identity number or foreign company registrations number of the company	U51909AP1981PLC041292
Name of the company	GTN EXPORTS LIMITED
Address	Plot No. 29, Nagarjuna Hills, Punjagutta, Hyderabad – 500 082, Andhra Pradesh, India.
This Form is for	Modification of charge
Type of Charges	A charge on Immovable property, Movable Property (not being pledge), Ship
Particular of the charge holder	Punjab National Bank Address: CMO, Bank Street , Hyderabad – 500 001, Andhra Pradesh, India Email ID: jayanth@pnb.co.in
Nature or description of the instrument creating charge	Hypothecation of movable assets forming art of fixed / Block Asstes dated 1.210.2007 Packing credit agreement ( hypothecation ) dated 12.10.2007 Hypothecation of export incentives to secure overdraft facility Foreign outward Usance Bills Purchases facility ( FOUBP) dated 12.10.2007 Hypothecation of goods and book debts to secure letter of guarantee / letter of credit facility dated 12.10.2007
Date of the instrument creating charge	12.10.2007
Amount Secure by the charge	Rs. 226.500 millions
Brief of the principal terms and conditions and extent and operation of the charge	Rate of interests: In facility I – BPLR -3.25% p.a i.e 9.75% at present , subject to change as per HO guidelines from time to time up to 180 days and at BPLR upto 270 days if PC is allowed exceeding 180 days buy bank In facility II – BPLR -3.25% p.a i.e 9.75% at present , BPLR -0.25% p.a at present 12.75% (beyond 90 days and up to 180 days) subject to change as per HO guidelines from time to time In facility III – at BPLR. Terms of repayment: In facility I – Each drawl in the PC account shall be adjusted within 180 days In facility II – as per firm order to exceeding 90 days from the date of shipment in respect of all exports and not exceeding 180 days from the date of shipment in respect of shipment to Angus international Inc. USA In facility III – not to exceed 9 years (including claim period) Margin: In facility I - 20% In facility II – Nil In facility III – 10% In facility IV – 25% In facility V – 10% Extent and operation of the charge: Hypothecation of all current assets of the company viz, raw materials , consumable stores, spares, packing materials , finished goods and finished goods in transit, stocks in process , procure / manufactured by the company to be exported against confirmed orders, lying in the plant at Coimbatore and lying in the Foundary owned by Jubiliant Engineering Private limited at Coimbatore First Charge on all the current assets of the company and specific charge on goods procured under LCs. Others: Hypothecation of all current assets of the company viz, raw materials , consumable stores, spares, packing materials, packing materials , finished goods and finished goods in transit, stocks in process , procure / manufactured by the company to be exported against confirmed orders, lying in the plant at Coimbatore and lying in the Foundary owned by Jubiliant Engineering Private limited at Coimbatore. Export documents along with bill of lading / airway Bill shall be dispatched direct to the import without routing the same.
Shorts Particulars of the Property charged	Hypothecation of all current assets of the company , viz, raw materials , consumables stores, spares, packing materials, packing materials , finished goods and finished goods in transit, stocks in process , procure / manufactured by the company to be exported against confirmed orders, lying in the plant at Coimbatore and lying in the Foundary owned by Jubiliant Engineering Private limited at Coimbatore. Export documents along with bill of lading / airway Bill shall be dispatched direct to the import without routing the same.
Particulars of the present modification	Renewal cum Enhancement of fund based working capital limits from Rs. 145.000 millions to Rs.. 199.000 millions and non – Fund Based limits from Rs. 7.500 millions to Rs. 27.500 millions dated 12.10.2007

WEBSITE DETAILS:

Subject incorporated in 1990 to manufacture metallic products for exports of engineered castings and bar stocks. The Company has entered into exclusive long-term manufacturing agreement in the year 2000 with FMC Technologies, USA - One of the Leading Global Oil Field Equipment manufacturers in the world to manufacture world class Oil Field Equipment. The product range includes API 6A Valves and other critical components to cater to the needs of OIL INDUSTRY in USA, Europe and South East Asia. In a span of 5 years, subject has carved a niche as a quality manufacturer of oil field equipments ranging from Valves made out of Castings and Forgings to all temperature class and material trims, Casing Hangers, Pneumatic Actuators and Commercial Items like Flanges and Plugs. Today, the company Exports is synonymous with quality, high precision machining and customer’s satisfaction

The successful production of high quality oil field valves and allied components has opened several new global vistas. A new plant - Jubilant Engineering Limited, was commissioned to manufacture forged valves upto a pressure of 10000 PSI using state-of-the-art machinery

The company has initiated stringent Quality Assurance Programs with the American Petroleum Institute. Some of the vital systems include: 22 Nos. CNC Machines for precision machining. API 6A Monogram. API QR ISO 9001 - One of the very few in India Fully equipped Metrology and Quality Control laboratories Specialised Coating and Nitrating Plant with Electrolosis Nickel Coating g Dynamic Testing Station - Testing at 180^O C to (-) 65^O C Comprehensive Engineering Solutions using Unigraphics and PRO-E Fully equipped ERP with Intranet, WAN, RF, etc.

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.39.55
UK Pound	1	Rs.79.62
Euro	1	Rs.57.02

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	9
--PROFITABILIRY	1~10	6
--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	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		64

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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