MIRA INFORM REPORT

Report Date :

30^th January, 2007

IDENTIFICATION DETAILS

Name :	IFB INDUSTRIES LIMITED
Registered Office :	14, Taratolla Road, Kolkata – 700 088, West Bengal
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	12.11.1974
Com. Reg. No.:	21-29637
CIN No.: [Company Identification No.]	U99999WB1974PTC029637
TAN No.: [Tax Deduction & Collection Account No.]	CALI00026F
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers and Marketers of Press Tools & Dies (including Fine Blanking Tools), Fine Blanked Components, Fine Blanked Components (Heavier), Heat Treated & Phosphated Components, Metal Forming Machines, Press Tools, Dies, Fine Blanking & Cold Forging Tools, Fine Blanking Components (Automobile), FHP Motors, Pumps, Tea, Washing Machines, Dryers, Microwave Owens and Dish Washers.

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	--
Status :	Poor
Payment Behaviour :	Slow & Delayed
Litigation :	Exist
Comments :	Subject is a well established company engaged in manufacturing and marketing of Press Tools and Dines, Fine Blankets Components heat treated and Phosphated Components, motors and home appliances, but it continues to incur heavy losses. Due to adverse business and financial condition, The company’s payments are reported as slow and delayed. The company may be considered for business dealings only against safe and secured trade terms and conditions.

LOCATIONS

Registered Office/ Factory :	14, Taratolla Road, Kolkata – 700 088, West Bengal, India
Tel. No.:	91-33-24014917-23
Fax No.:	91-33-24014182 / 4579
E-Mail :	1. ifbi_corporate@ifbglobal.com 2. ifb@cal2.vsnl.net.in
Website :	http://www.ifbglobal.com
Corporate Office :	Plot No. IND-5, Sector – I, East Calcutta Township, Kolkata – 700 078, West Bengal
Tel. No.:	91-33-24428286/87/89/90/91
Fax No.:	91-33-24427779/1003
E-Mail :	ifbi_corporate@ifbglobal.com ifb@cal2.vsnl.net.in
Factory 1 :	JL-71, P. O. Bishnupur, Gangarampur, District South 24 Parganas, West Bengal L1, Verna Electronic City, Verna, Salcete, Goa - 403 722 Tel. No. 91-832-2783303-05/07 Fax No. 91-832-2783306 E-Mail: verna/ifb@ifbglobal.com 62, 64 & 66,Corlim Industrial Estate, Corlim Ilhas, Goa - 403 110 E-3, New Industrial Area II, Mandideep - 462 046, Dist. Raisen, Bhopal, Madhya Pradesh 16/17, Visweswariah Industrial Estates, Whitefield Road, Doddannekundi Industrial Area, Phase I, Bangalore - 560 048, Karnataka

DIRECTORS

Name :	Mr. Bijon Nag
Designation :	Executive Chairman
Name :	Mr. B. P. Mukhtieh
Designation :	Director (Nominee of IDB I)
Name :	Mr. Somen Bal
Designation :	Director
Name :	Dr. Rathindra Nath Mitra
Designation :	Director
Name :	Mr. Radharaman Bhattarcharya
Designation :	Director
Name :	Mr. R. Muralidhar
Designation :	Director
Name :	Mr. K. M. Unnikrishnan
Designation :	Director

KEY EXECUTIVES

Name :	Mr. G. Ray Chowdhury
Designation :	Company Secretary
AUDIT COMIITTEE
Name :	Mr. B. P. Muktieh
Designation :	Chairman
Name :	Mr. Somen Bal
Designation :	Member
Name :	Mr. Radharaman Bhattacharya
Designation :	Member
Name :	Mr. R. Muralidhar
Designation :	Member

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters Group	6930776	43.80
Mutual Funds and Unit Trust of India	42863	0.27
Banks, Financial Institutions & Insurance Companies	549492	3.47
Foreign Institutional Investors	1412300	8.93
Bodies Corporate	1786431	11.29
NRI’s/OCBs	52381	0.33
In Transit in Depository System	18195	0.11
General Public	5031009	31.80
TOTAL	15823447	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Marketers of Press Tools & Dies (including Fine Blanking Tools), Fine Blanked Components, Fine Blanked Components (Heavier), Heat Treated & Phosphated Components, Metal Forming Machines, Press Tools, Dies, Fine Blanking & Cold Forging Tools, Fine Blanking Components (Automobile), FHP Motors, Pumps, Tea, Washing Machines, Dryers, Microwave Owens and Dish Washers.

Products :

Item Code No. (ITC Code)	4501100
Product Description	Washing Machine
Item Code No. (ITC Code)	7089900
Product Description	Fine Blanked Components
Item Code No. (ITC Code)	4622900
Product Description	Machine Tools
Item Code No. (ITC Code)	5169000
Product Description	Microwave Oven

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Press Tools & Dies	Rs.’000 Nos.	6000 85	6000 85	12164 41
Fine Blanked Components (Heavier)	MT	1500	1500	1411
Fine Blanked Components (Auto Products)	MT	2000	2000	1819
Heat Treated & Phosphated Components	MT	450	450	522
Motors	Nos.	NA	100000	85933
Home Appliances	Nos.	400000	225000	87567

GENERAL INFORMATION

No. of Employees :

776

Bankers :

v State Bank of India

v Bank of Maharashtra

v United Bank of India

v State Bank of Mysore

v Allahabad Bank

v Canara Bank

v State Bank of Bikaner & Jaipur

v Chinatrust Commercial Bank

Facilities :

SECURED LOANS	31.03.2006
Term Loans :-
Domestic Financial Institutions/Banks	3074.858
Working Capital Facilities	918.485
UNSECURED LOANS
Financial Institutions	433.034
Others	28.980

Banking Relations :	Moderate
Auditors :	Deloitte Haskins & Sells Chartered Accountants
Associates/Subsidiaries :	v IFB Agro Industries Limited v IFB Finance Limited v IFB Securities Limited v IFB Venture Capital Finance Limited v Travel Systems Private Limited v CPL Projects Limited SUBSIDIARIES v Elisha Investments Private Limited v European Fine Blanking Limited, U.K. v Crestwood Enterprises Limited v New Star Traders Limited v Gate Pacific Pte. Limited v Sebastopol Corporation N.V. v Hanway Stationery Limited v Hanway Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
35000000	Equity Shares	Rs. 10/- each	Rs.350.000 millions
30000000	Cumulative Convertible Preference Shares	Rs. 10/- each	Rs. 300.000 millions
30000000	Cumulative Redeemable Preference Shares	Rs. 10/- each	Rs. 300.000 millions
	Total		Rs. 950.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
15823447	Equity Shares	Rs. 10/- each	Rs. 158.234 millions
Add :	Forfeited Shares		Rs. 7.625 millions
16000000	5% Cumulative Redeemable Preference Shares	Rs. 10/- each	Rs. 160.000 millions
	Total		Rs. 325.859 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		325.859	152.359	141.059
2] Reserves & Surplus		1647.847	1622.328	1266.298
3] (Accumulated Losses)		[5465.287]	(5327.299)	(4983.312)
NETWORTH		[3491.581]	(3552.612)	(3575.955)
LOAN FUNDS
1] Secured Loans		4269.117	4619.556	4986.239
2] Unsecured Loans		462.014	551.223	561.754
TOTAL BORROWING		4731.131	5170.779	5547.993
TOTAL		1239.550	1618.167	1972.038
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1094.534	1390.086	1695.006
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.002	0.002	0.002
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	287.432	343.183	195.942
	Sundry Debtors	187.303	215.921	226.951
	Cash & Bank Balances	213.623	233.403	213.307
	Loans & Advances	102.006	97.625	85.288
Total Current Assets		790.364	890.132	721.488
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities & Provisions	645.350	662.053	444.458
Total Current Liabilities		645.350	662.053	444.458
Net Current Assets		145.014	228.079	277.030
TOTAL		1239.550	1618.167	1972.038

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	2652.387	2405.070	2028.370
Profit/(Loss) Before Tax	[131.152]	(343.987)	(856.425)
Provision for Taxation	6.836	--	--
Profit/(Loss) After Tax	[137.988]	(343.987)	(856.425)
Export Value	11.873	7.101	18.570
Import Value	325.171	435.023	218.152
Total Expenditure	2890.843	3229.824	2881.848

QUARTERLY RESULT

PARTICULARS	30.06.2006 [1^st Qtr.]	30.09.2006 [2^nd Qtr.]
Sales Turnover	598.000	795.400
Other Income	24.400	275.100
Total Income	622.400	1070.500
Operating Profit	8.400	178.300
Interest	0.000	0.000
Gross Profit	8.400	178.300
Depreciation	38.200	30.400
Tax	1.100	2.700
Reported PAT	[30.900]	145.200

Notes

2006-06 Quarter 1

1. The above financial results have been reviewed by the Audit Committee and were taken on record by the Board of Directors of the Company at their meeting held on 31^st July, 2006. Limited review of these results under clause 41 of the listing agreement has been completed by the auditors. 2. The Hon'ble Board for Industrial & Financial Reconstruction (BIFR) has declared the Company as sick under Section 3(1)(0) of the Sick Industrial Companies (Special Provisions) Act, 1985. 3. In view of Hon'ble BIFR direction to the Company for submission of draft rehabilitation scheme considering 30^th September, 2005 as the cut off date, interest amounting to Rs. 36.600 millions on loans yet to be settled has not been considered in the above results. 4. The Institute of Chartered Accountants of India has issued a revised Accounting standard on employees benefits effective from 1^st day of April, 2006. The liabilities for defined plan are being reviewed in terms of the requirement of the said accounting standard and accordingly necessary adjustments will be carried out by the end of the current financial year. 5. During the period under review, 14,50,000 equity shares were allotted to Promoter Group. 6. In terms of the amended Clause 41 of the listing agreement, details of number of investor complaints for the quarter ended 30^th June, 2006 are as follows beginning - nil, received -nil, disposed off- nil and pending -nil. 7. Previous period figures have been re-arranged/re-grouped wherever necessary. On behalf of the Board of Directors

2006-09 Quarter 2

1 The above financial results have been reviewed by the Audit Committee and were taken on record by the Board of Directors of the Company at their meeting held on 31^st October, 2006. Limited Review of these results under Clause 41 of the Listing agreement has been completed by the Auditors, 2. The Hon'ble Board for Industrial & Financial Reconstruction (BIER) has declared the company as sick Under Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985. 3. In view of Hon'ble BIFR direction to the Company for submission of draft rehabi6taticn scheme considering 30^th September, 2006 as the cut off date, interest amounting to Rs. 31.600 millions for the quarter ended 30^th September, 2006 (Rs. 68.200 millions for the half year ended 30^th September, 2006) on loans yet to be settled have not been consider in the above results. 4. The Institute of Chartered Accountants of India has issued a revised Accounting standard on employees benefits effective from 1st day of April, 2006. The liabilities for defense plan are being reviewed in terms of the requirement of the said accounting stancarc and accordingly necessary adjustments will be carried out by the end of the aLrrent financial year. 5 In terms of the amended Clauses 41 of the listing agreement, details of number of investor complaints for the quarter ended 30^th September, 2006 are as follows: beginning-nil, received -nil, disposed off - nil and pending - nil. 6 The exceptional items represent interest waiver on full and final settlement of debts as per memorandum of settlements with lenders. 7 Previous period figures have been re-arranged / re-grouped wherever necessary.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.00	0.00	0.00
Long Term Debt Equity Ratio	0.00	0.00	0.00
Current Ratio	0.53	0.51	0.46
TURNOVER RATIOS
Fixed Assets Ratio	0.78	0.77	0.59
Inventory	9.01	10.31	10.45
Debtors	14.09	12.55	10.10
Interest Cover Ratio	[0.90]	(0.35)	(0.42)
Operating Profit Margin (%)	2.46	(0.25)	(1.70)
Profit Before Interest and Tax Margin (%)	[3.99]	(7.74)	(12.06)
Cash Profit Margin (%)	[2.21]	(22.38)	(30.41)
Adjusted Net Profit Margin (%)	[8.66]	(29.87)	(40.76)
Return on Capital Employed (%)	0.00	0.00	0.00
Return on Net Worth (%)	0.00	0.00	0.00

STOCK PRICES

Face Value	Rs.10/-
High	Rs.21.80/-
Low	Rs.20.75/-

LOCAL AGENCY FURTHER INFORMATION

History:

Incorporated in 1974 at Kolkata as Indian Fine Blank by Bijon Nag in collaboration with Heinrich Schmid, Switzerland, to manufacture fine blanking tools, blanked components and sub-assemblies, IFB Industries has today a second fine blanking factory at Bangalore and an ultra modern plant under subsidiary European Fine Blanking at Wrexham, Wales, UK. It has two joint venture subsidiaries -- RHW India and RHW Autoliv India, in collaboration with RHW, Germany and Electrolux, Sweden, to manufacture automotive seat recliners / seating systems and safety equipment.  

The launch of fully automatic washing machines in 1990 in collaboration with Bosch, Germany, signaled IFB's entry into the white goods sector. Expansion of capacity at the Goa plant and the acquisition of Microwin Electronics, at Bhopal ensures expansion in product volume and range. The FHP motor factory at Bangalore (1992) in collaboration with Siemens (Germany) is now envisaging growth in the automotive sector also. 

The international business division has grown into a recognized Export House dealing in not only IFB's own products but also third-party exports. It recently acquired a microwave oven plant at Bhopal which is being upgraded for increased production of better microwave ovens and to start a new line in dish-washers. An additional line is being set up at the Goa plant for washing machines. A new line for clothes dryers is also being established. The company has technical tie-up with Asko Cylinda, Sweden, for the manufacture of dish washers and with E Mail, Australia, for the manufacture of clothes dryers. 

During 1995-96, it launched its three new produces viz. Microwave Oven, Dish Washer and Clothes Dryer at Bhopal and Goa plant. With further expansion in its washing machine division at Goa, new model "Executive" of 4 kgs capacity and "Supremo" of 5.5 Kgs has been introduced. 

In the year under report i.e. 1999-2000, the company launched the state of the art `Senator' model which sustained and improved the company's position at the top segment with increased market share. 

The company has been referred to BIFR as the net worth of the company has been fully eroded. The Bangalore Unit and Kolkata Unit have been certified ISO 9001 & ISO 9002 respectively. 

During the financial year 2003-04, Engineering factories at Kolkata & Bangalore have been certified as QS9000 by DNV.

REVIEW OF OPERATION

The positive impact of strategies initiated during the last couple of years along-with revival of Indian economy has helped the Home Appliances and Engineering Divisions to achieve growth in sales. Market penetration, increased focus on manufacturing efficiency and productivity supported by signs of industrial revival played a key role in the growth. Further, the product range was extended in home appliance and engineering business. 

Despite the fact that the washing machine segment has under performed compared to the other durable segments mainly due to its declining position in the consumers' list of aspirations, the company maintained strong presence and leadership in the fully automatic front loading segment. While a growth in production and sales in washing machines and dryers were recorded, the sale of microwave oven had increased substantially. During the year the new economy model washing machine 'DIVA' and high end model DIGITAL 7 kg were launched. However, the margin in washing machine sale reduced due to raw material price increase and increased sale of economy segment washing machines. Due to financial constraints the Company could not make adequate advertisement and marketing expenses leading to lower sales in higher end washing machines. 

Due to growth in the automobile sector the company could improve the business of fine blanking segment as compared to last year. Despite an overall 15% growth in the automobile sector there has been a severe price war among the competitors leading to a lower margin on fine blanking components supplied by the company to its customers. The company has already ventured in other areas and has become regular vendor to customers like BSNL, Defense Factories, etc. 

During the year, the company has suffered a loss of Rs. 131.100 millions as against previous year's reported figure of Rs. 344 millions. Loss for the year under report reduced due to substantial reduction in interest cost and booking of gain on interest waiver consequent to debt settlement. 

The company has technical collaboration with the following :

v Heinrich Schmid, Switzerland

v Bosch, Germany – Washing Machine

v Asko, Sweden – Dishwasher

v Siemens, Germany – Motor Appliances

v Email, Australia – Clothes Dryer

v Sampo, Taiwan – Microwave Oven

The company is in trade terms with: -

Ø AVP Cement Products

Ø AM Engineering

Ø AMI Plastics

Ø Asia Trade Combine

Ø AP Industries

Ø Bhadra Metal Products

Ø Bindu Tools Limited

Ø Classic Engineering Industries

Ø Creative Engineering Systems

Ø C-G PPI Adhesive Products Private Limited

Ø Chemisynth

Ø Delux Industries

Ø Disha Precision Private Limited

Ø Dutta and Das Gupta

Ø Elecchem Technik Private Limited

Ø Elegant Forms India Private Limited

Ø Friction Technologies

Ø Friends Trading

Ø Hindustan Small Industries

Ø Hitech Polymers Industries

Ø Harness Cable Connectors Private Limited

Ø Rajshree Engineering

Ø Rajesh Tools & Instruments

Ø Saket Hardware Industries

Ø Star Enterprises

Ø Strident Polymers India Private Limited

Ø Supreme Electrical

Ø Tera Atto Appliances Private Limited

Ø Tek Electromechanical Private Limited

Ø Thuse Electronics

Ø Welfix Cables and Cords

Ø Ashwini Tools & Components

Ø Beeline Engineers

Ø Bharath Press Components

Ø S. S. Enterprises

Ø Shree Shreeshaila Enterprises

Ø Springs India

Ø Sri Durga Industries

Ø Sri Guru Analytical Laboratory

Ø Sri Vinayaka Engineers

Ø Stat Coat Systems

Ø Stup Schule & Somappa Limited

Ø Sun Beam Tools

Ø Universal Grinders

Ø Apex Engineering Company

Ø Apex Die Casters

Ø Good Will Plastics

Ø Gujarat Polymers

Ø Maruthi Automats

Ø M. R. Engineers

Ø Sun Beam Tools

Ø A Engineering Company

Ø A. M. Engineering

Ø Raju Plastics

Ø R S CNC

Ø Set Right Electrical Services

Ø Set Right Electrical Works

Ø Shree Guru Raghavendra Enterprises

Ø Calcutta Stripwire Industries

Fixed assets

v Freehold Land

v Leasehold Land

v Buildings

v Plant & Machinery

v Furniture & Fixtures

v Motor Vehicle

WEBSITE DETAILS

Beliefs and Policies

Vision

IFB will be synonymous with Innovation & Technology in its chosen fields of business activities.

IFB will excel in Quality & Services to be in consonance with Global Standards.

Mission

Continuously maximizing company's wealth by manufacturing and marketing best quality engineering products that go into daily life.

Quality Policy

To supply products that will consistently exceed customer's expectations and to become a preferred supplier due to excellence in Quality and Service.

To maintain an environment that will foster teamwork and provide for continuous improvement thereby achieving Total Quality in all activities of the organization.

HR Policy

Provide employees an environment of respect, integrity, achievement and fun for performing excellently, learning continuously and growing ambitiously along with the company in order to serve the customer and community.

Environmental Policy

Provide employees an environment of respect, integrity, achievement and fun for performing excellently, learning continuously and growing ambitiously along with the company in order to serve the customer and community.

IFB shall adhere to the rules & principles with respect to environmental considerations when fulfilling its main objectives of developing, producing and selling products & systems.

IFB shall implement its business decision in an Environmentally responsible and caring manner relative to its Employees, Customers and Communities.

Laws and directives from local government authorities shall be considered as minimum requirements.

Environment activities of IFB shall be proactive and aimed at pollution prevention and continual improvement on environmental performance.

Products & Manufacturing processes shall be energy efficient and their environmental impact shall be reduced without compromising the safe function of the product.

IFB shall ensure that their employees are appropriately trained and motivated to apply this policy in the daily work in line with Environmental Management Programmed.

Commitment

The product is backed up by a strong team of Engineering and Product Development. Product specifications are reviewed and upgraded from time to time based on customer feedback.

The Company is committed to provide their customers full Satisfaction consistently by providing high quality products at competitive prices.

Appliance is manufactured using environment friendly process and components.

The Quality System of the company is certified as per ISO 9001-2000, Quality System Standard by TUV Suddeutschland India Private Limited

Aesthetics and features of the product are constantly upgraded through a team of innovative engineers from various sections in the Company.

Statutory and safety compliance is given utmost priority in designing and manufacturing of the product.

R and D Activities

Their R&D is constantly focused at creating new designs and features to meet customer need and expectations. They believe in offering wide product range to customers so that product is affordable (available) at different income level.

All new products are rigorously tested for desired global Performance level and specially Indian conditions before product launch.

Their R&D is equipped with state-of-art CAD station with latest design software for 3D modeling and stress analysis, in-house endurance testing, test rigs for accelerated endurance testing and well equipped wash care laboratory. The product is continuously upgraded and improved based on customer feedback.

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.44.17
UK Pound	1	Rs.86.66
Euro	1	Rs.57.25

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	2
OPERATING SCALE	1~10	1
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	--
--LIQUIDITY	1~10	2
--LEVERAGE	1~10	2
--RESERVES	1~10	--
--CREDIT LINES	1~10	1
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--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		17

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		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

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