MIRA INFORM REPORT

Report Date :

20.02.2007

IDENTIFICATION DETAILS

Name :	AVASARALA TECHNOLOGIES LIMITED
Registered Office :	No.47, 36^th Main, BTM I Stage, Dollar Scheme, Bangalore-560068, Karnataka
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	09.03.1987
Com. Reg. No.:	08-8228
CIN No.: [Company Identification No.]	U85110KA1987PLC008228
IEC No.:	788009834
TAN No.: [Tax Deduction & Collection Account No.]	BLRA00256E
PAN No.: [Permanent Account No.]	AABCA2381E
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturers and suppliers of Equipments and services to Nuclear power sector, Space sector, Factory Automation, Outsourced manufacturing, Specialty metals, Precision assembly, Health care equipments.

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 1750000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. Financial position is satisfactory. Payments are correct and as per commitment. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered/ Corporate Office :	No.47, 36^th Main, BTM I Stage, Dollar Scheme, Bangalore-560068, Karnataka, India
Tel. No.:	91-80-26683860/ 26683165
Fax No.:	91-80-26683935/ 26685734
E-Mail :	info@avasarala.com
Website :	http://www.avasarala.com
Area :	8902 Sq. ft.
Location :	Owned
Head Office/ Factory :	MSI Area, 24^th Cross, 6^th Main Road, PIPDIC Industrial Estate, Mettupalayam – 605009, Tamil Nadu
Tel. No.:	91-413-2275574
Fax No.:	91-413-2272976
Area :	21054 Sq. ft.
Location :	Owned
Factory 1 :	14/2, Raghuvanahalli, 14^th K M, Kanakapura Road, Bangalore- 500062, India
Tel. No.:	91-80-28435666/ 28435376/ 28435521/ 28435665
Fax No.:	91-80-28435207
E-Mail :	marketing@avasarala.com
Area :	69190 Sq. ft.
Location :	Owned
Factory 2 :	61A, KIADB Industrial Area, Hosur Road, Bommassandra, Bangalore-560099
Tel. No.:	91-80-7834213
Fax No.:	91-80-7835909
E-Mail :	spd@avasarala.com
Area :	12788 Sq. ft.
Location :	Owned
Factory 4 :	90A, Electronic City, Hosur Road, Bangalore-560100, Karnataka, India
Tel. No.:	91-80-28520617
Fax No.:	91-80-28520216
E-Mail :	healthcare@avasarala.com
Factory 5 :	70, Hootagalli Industrial Area, Mysore-571186, Karnataka, India
Tel. No.:	91-821-4282290
Fax No.:	91-821-4282292
E-Mail :	metals@avasarala.com
Area :	50978 Sq. ft.
Location :	Owned
Factory 6 :	999, Plaza Drive, Suite 599, Schaumburg, IL 60173, USA
Tel. No.:	1-847 9690630
Fax No.:	1-847 9690631
E-Mail :	usa@avasarala.com
Branch 1 :	House No.B32, Old DLF Colony, Sector 14, Gurgaon-122001, Haryana, India
Tel. No.:	91-124-3254971
E-Mail :	ssrajan@avasarala.com
Factory 5 :	28/A, Ganeshadatta Housing Society, Shankarnagar-1, Pune-411009, Maharashtra
Tel. No.:	91-20-24226533
Fax No.:	91-20-24226532
E-Mail :	pune@avasarala.com
Location :	Rented

DIRECTORS

Name :	Mr. Avasarala Mangaapathi Rao
Designation :	Chairman
Address :	FB 16, Transindus, Tataguni Post, Agra Village, Kanakpura Main Road, Bangalore-62, Karnataka
Date of Birth :	15.12.1932
Qualification :	M. Tech. (IIT Karhkpur)
Experience :	50 years
Date of Appointment :	09.03.1987
Name :	Mr. Thavuthikhanpet Thanigai Mani
Designation :	Managing Director
Address :	# 159, b/w 18^th and 19^th A Cross, 10^th Main, 7^th Sector, HSR layout, Bangalore-34, Karnataka
Date of Birth :	01.07.1950
Qualification :	B.E. (Mechanical)
Experience :	34 years
Date of Appointment :	09.03.1987
Name :	Mr. Madurai Srinivasa Iyengar Ravikumar
Designation :	Whole Time Director
Address :	645, 3^rd Block, Rajaji Nagar, Bangalore-560010, Karnataka
Date of Birth :	31.03.1955
Date of Appointment :	28.09.1992
Name :	Mr. Belagur Marulappa Renukaprasad
Designation :	Director
Address :	# 1269, 26^th Main, 32G Cross, 4^th T Block, Jayanagar, 4^th Block, Bangalore-11, Karnataka
Date of Birth :	06.04.1955
Qualification :	B.E. (Electronic)
Experience :	27 years
Date of Appointment :	09.03.1987
Name :	Mr. Anegondi Rajaram Hariprasad
Designation :	Whole Time Director
Address :	91, East Park Road, Malleshwaram, Bangalore-560003, Karnataka
Date of Birth :	13.01.1950
Date of Appointment :	01.07.1987
Name :	Mr. R. Narasimha Rao
Designation :	Director
Address :	Sri Ranga, 38^th/38, 3^rd Cross, K V. Layout, Jayanagar, 4^th Block, Bangalore-11
Date of Birth :	02.02.1951
Qualification :	M.E. (India Institute of Science, Bangalore)
Experience :	32 years
Name :	Mr. B.V.R. Subbu
Designation :	Director
Address :	# 1/23, Shantinikethan, New Delhi-110021
Date of Birth :	14.02.1954
Qualification :	Masters in Economics (CESP)
Experience :	30 years
Name :	Mr. K. Raghupathi
Designation :	Director
Address :	Flat No.410, Shashikiran Apartments, 18^th Cross, Malleshwaram, Bangalore-83, Karnataka
Date of Birth :	14.02.1950
Qualification :	FCA
Experience :	34 years
Name :	Mr. Rajee Ramamurthy
Designation :	Director
Address :	1696, I Floor, Eastend, A Main Road, 9^th Block, East Jayanagar, Bangalore-560069, Karnataka
Date of Birth :	10.11.1965
Experience :	05.09.2005

KEY EXECUTIVES

Name :	Mr. S. Ramakumar
Designation :	Company Secretary
Address :	D-3/248 I A, Main SFS 407, Yelahanka New Town, Bangalore-560064, Karnataka
Date of Birth/Age :	31.03.1963
Date of Appointment :	20.06.2003
Date of Ceasing :	01.06.2005

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mr. A. Manapathi Rao	361405
Mr. T. T. Mani	335868
Mr. M.S. Ravikumar	332672
Mr. B.M. Renukaprasad	345326
Mr. P.C. Govindarajan	309388
Mr. A.R. Hari Prasad	309388
Mr. D. Rahgunath	309388
Mrs. Sridevi Avasarala	180333
Mrs. Meena Mani	180314
Mr. Ravikumar Manorama	180282
Mr. B.V. Akhiila	161279
Mr. Vasantha Govindarajan	161311
Mr. Prathima Hariprasad	161279
Mrs. Vandana Raghunath	161279
Mr. K.N. Raju	3280
Mr. N. V. R. Pawar	3865
K& S Consulting Group	58000
Mr. Ashok Basavaradder	2500
Mr. R. Narasimha Rao	143829
Mrs. Rekha Rao	72322
Mr. A. Sathyanarayana	10706
Mrs. Sreedevi R. Pai	4000
Mr. J. Venkatadas	6000
Mr. Sushma Kaul	4000
Mr. Alok Gupta	3300
Mrs. Mamta H. Gupta	3300
Mrs. Bhagwantidevi Gupta	3300
Mrs. Anjali B. Gupta	3300
Mr. Anil Gupta	17517
Mr. Bistappa N.	68
Mr. K. Subramanaya	136
Mr. Chandrashekar T.J.	204
Mr. Shishir B.	204
Mr. T.V.S. Shankar	341
Mr. B.C. Srinath	68
Mr. B. Sreenivasulu	68
Mrs. Nandini Bhavani	68
Mr. M.K. Chandravathi	68
Mr. T. Dayananda Swamy	68
Mr. N. Gopinath	68
Mr. H. Ravindra	68
Mr. N. Kanaka	68
Mr. B. Nagaraju	68
Mr. K.B. Remica	68
Mr. K. Rudrachari	68
Mr. Babu Girish S.K.	68
Mr. M.S. Sampathraj	68
Mr. Shankarnarayanan P.	68
Mr. L.N. Sreenivasan	68
Mr. B.A. Sujatha	68
Mr. M.M. Thanagamma	68
Mr. U. Laxmana	68
Mr. V.S. Satishkumar	68
Mr. P. Varadaraj	68
Mrs. Dechamma	136
Mr. B. V. Anikumar	204
Mr. K. Rajesh Shenoy	204
Mr. K. Veerabhadran	204
Mr. P.S. Padmasree	204
Mr. Sanjay M. Pai	204
Mr. T. M. Sathish	204
Mr. Siddiq Usman Syed	477
Mr. H.S. Prabhakar	546
Mr. S. Kishore	3412
Mr. K.A. Sastry	3412
Mrs. Anita Raju	68
Mr. M.K. Bhavani	68
Mr. V.N. Shashikumar	68
Mr. Venkatarama Reddy	204
Mr. V. Veerakumar	68
Dr. M.N. Vijayashankar	5004
Mr. S. Visalam	546
Canbank Venture Capital Fund Limited	289090
Mr. V. Govinda Swamy	16
Mr. Raj Kaul	14
Ulco Engineering Pty Limited	12212
Mr. D. Raghunath	28

BUSINESS DETAILS

Line of Business :

Manufacturers and suppliers of Equipments and services to Nuclear power sector, Space sector, Factory Automation, Outsourced manufacturing, Specialty metals, Precision assembly, Health care equipments.

Products :

Product Description	ITC Code
Engineering	847510
Conveyor and spares	842820
Special Purpose Machinery	854389
Electron Guns	854091

Exports :

Products :

Engineering Machineries and Industrial Parts

Countries :

USA and UK

Imports :

Products :

Raw Materials and Components

Countries :

USA, UK, Japan, Germany and Singapore

Terms :

Selling :

L/C, Cash and Credit (30/60/90 days)

Purchasing :

L/C, Cash and Credit (30/60/90 days)

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Machinery to various industries		Not Applicable	Not Applicable
Electron Guns for TV Picture Tube	(No. in Millions)	4.200	2.069
Tungsten Products	(No. in Kgs.)	24000	6297
Molybdenum Wire	(No. in Kgs.)	36000	10567

GENERAL INFORMATION

Customers :

End Users

No. of Employees :

893

Bankers :

UCO Bank, Jayanagar Branch, Bangalore – 560011

IDBI Bank, Mission Road, Bangalore – 560027

State Bank of India, Industrial Finance Branch, Residency Plaza, Residency Road, Bangalore-560025, Karnataka, India

Credit Limit : Rs.596.000 millions

State Bank of Travancore, Bangalore City Branch, MM Hills Vartha Bhavan, Tippu Sultan Palace Road, Chamrajpet, Bangalore-560018, Karnataka, India

Credit Limit : Rs.220.000

Corporation Bank, Industrial Finance Branch, Indian Express Building No.1, Queen’s Road, Bangalore-560001, Karnataka, India

Credit Limit : Rs.470.000 millions

Standard Chartered Bank, M.G. Road, Bangalore, Karnataka

Credit Limit : Rs.150.000 millions

Facilities :

Secured Loans (31.03.2005 – Rs. In millions) :

Term Loan
From Banks
UCO Bank – Term Loan	3.600
ING Vysya Bank	148.088
State Bank of India – Term Loan	3.288
State Bank of India – FCNRB	12.664
From financial institutions
Industrial Development Bank of India – Rupee Loan	32.175
From Others
Canbank Venture Capital Fund Limited	10.000
From Banks
UCO Bank	133.363
State Bank of India	38.563
State Bank of India – FCNRB Loan	13.101
Bill Discounting	27.369
Total	422.213

Unsecured Loans :

Loans from Directors	5.075
Public Deposits	14.790
Loans from Others	14.542
Deferred Sales Tax	4.870
ICICI Bank	2.200
Canbank Venture Capital Fund Limited	9.000
Loans from Companies	38.111
Total	88.588

Banking Relations :

Satisfactory

Auditors :

K P Rao and Company

Chartered Accountants

Address :

25 Poornima, State Bank Road, Bangalore – 560001, Karnataka, India

Tel. No.:

91-80-25587385/ 25586814

Fax No.:

91-80-25594661

E-Mail :

kprao@vsnl.com

Sister Concerns :

Avasarala Inc., 999, Plaza Drive, Suite 599, Schaumburg, IL 60173, USA

Line of Business : Import and Sales of Conveyors, Automation, Special purpose machinery and related parts

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
4500000	Equity Shares	Rs. 10 each	Rs. 45.000 millions
150000	Preference Shares	Rs. 100 each	Rs. 15.000 millions
	Total		Rs. 60.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4166343	Equity Shares	Rs.10/- each	Rs.41.663 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		41.543	41.163	26.100
3] Reserves & Surplus		412.968	308.522	99.915
NETWORTH		454.511	349.685	126.015
LOAN FUNDS
1] Secured Loans		413.264	422.213	195.599
2] Unsecured Loans		81.752	88.589	13.425
TOTAL BORROWING		495.016	510.802	209.024
DEFERRED TAX LIABILITIES		75.526	69.603	15.338
TOTAL		1025.053	930.090	350.377
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		401.774	403.521	102.263
Capital work-in-progress		2.753	10.448	1.093
INVESTMENT		0.801	0.357	29.726
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	670.706	439.494	204.194
	Sundry Debtors	221.507	200.783	89.891
	Cash & Bank Balances	58.450	67.961	11.310
	Other Current Assets	31.509	28.426	19.098
	Loans & Advances	38.656	22.622	49.746
Total Current Assets		1020.828	759.286	374.239
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	330.986	227.205	149.228
	Provisions	70.117	16.317	7.716
Total Current Liabilities		401.103	243.522	156.944
Net Current Assets		619.725	515.764	217.295
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1025.053	930.090	350.377

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		1408.643	1019.878	270.620
Other Income		4.855	5.262	62.741
Total Income		1413.498	1025.140	333.361
Profit/(Loss) Before Tax		173.239	87.928	21.485
Provision for Taxation		59.731	13.040	5.044
Profit/(Loss) After Tax		113.508	74.888	16.441
Earnings in Foreign Currency :
	Export Earnings	83.367	42.290	4.340
	Other Earnings	NA	1.100	0.000
Total Earnings		83.367	43.390	4.340
Imports :
	Raw Materials	245.636	189.874	0.000
	Capital Goods	5.787	11.208	10.620
	Others	0.000	0.000	42.551
Total Imports		251.423	201.082	53.171
Expenditures :
	Cost of Goods Sold	480.556	495.341	162.852
	Manufacturing Expenses	457.810	135.390	47.358
	Administrative Expenses	85.141	76.346	29.697
	Salaries, Wages, Bonus, etc.	NA	NA	32.311
	Interest	NA	NA	33.748
	Depreciation & Amortization	28.515	29.453	5.912
	Other Expenditure	109.577	125.583	0.000
Total Expenditure		1161.599	862.113	311.878

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	8.03	7.30	4.93
Net Profit Margin (PBT/Sales)	(%)	12.26	8.62	6.44
Return on Total Assets (PBT/Total Assets}	(%)	12.18	7.56	4.51
Return on Investment (ROI) (PBT/Networth)		0.38	0.25	0.17
Debt Equity Ratio (Total Liability/Networth)		1.97	2.16	2.90
Current Ratio (Current Asset/Current Liability)		2.54	3.12	2.38

LOCAL AGENCY FURTHER INFORMATION

Form 8 Particular for creation or modification of charges

Name of the company

AVASARALA TECHNOLOGIES LIMITED

(Formerly known as “Avasarala Automation Limited”)

Presented By

Mr. Sridhar S., Company Secretary

1) Date and description of instrument creating the change

16.01.2006

Agreement of loan for working capital limit

Agreement of hypothecation of goods and assets

(Both the above agreements relate to single charge)

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

Rs.160.000 millions and interest, discount, commission charges, costs and expenses in terms of the agreement of loan for working capital dated 16.01.2006 and the agreement for hypothecation of goods and assets.

Cash Credit	8.000
Working capital demand loan	32.000
Letter of credit limit	30.000
Bank guarantee limit	90.000
Total	160.000

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, book debts and all other movable assets of the borrower including documents of title to the goods, outstanding moneys, receivables, including receivable by way of cash assistance and/or cash incentives under the cash incentive scheme or and other scheme claims including claims by way of refund of customs/excise duties under the duty draw back credit scheme or any other scheme , bills, invoices, documents, contracts, insurance policies, guarantees, engagements, securities, investments and rights and the present ad all future machinery belonging to or in the possession or under the control of the borrower wherever lying stored and kept and whether in possession of the borrower or of the bank or any third party whether in India or elsewhere throughout the world (including all such goods, other movable assets as ma in course of shipment, transit or delivery) excluding the stocks and book dents pertaining to FMH and SPSP project of Nuclear Power Corporation of India Limited financed exclusively ING Vysya Bank Limited, NM. G. Road, Bangalore-560001.

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

Rate of interest as may be determined by the bank from time to time.

Repayable on demand

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

State Bank of Travancore, MM Hills Vartha Bhavan, Tippu Sultan Palace Road, Chamrajpet, Bangalore-560018, Karnataka, India

6) Date and brief description of instrument modifying the charge

Not Applicable

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.

Not Applicable

History

The company incorporated with the name “Avasarala Automotion Limited” and the name has been changed to “Avasarala Technologies Limited” w.e.f 28.09.2005.

Company started in the year 1987, as a Project Consulting Organization and they marced to manufacture capital equipments to various industries, mainly with an intention of indiginsation, company is expanding manufacturing capability to exploit the opportunity. All technology is indigenous and no foreign collaboration.

The concern is in trade terms with :

• Forge Tools (Mysore) Private Limited
• Lokhotia Belting Private Limited
• Swathe Gears and Heat Treater
• VRS Engineering
• SLV Industries
• Anil Industries
• Kimberly Clark Corporation, USA
• Acultas Gmbh, Germany
• Flexlink, Singapore

Nuclear Power Corporation of India Limited, E-1, Nabhikiya Urja Bhavan, Anushakti Nagar, Mumbai-400094

Mr. U.K. Gupta, Chief Engineer

Tel. No.: 91-22-25995418

ISRO, ISRO Satellite Centre, Airport Road, Vimanapura Post, Bangalore-560017, Karnataka

Mr. Dinesh Kumar, Head- Thermal Testing Section, TSG

Tel. No.: 91-80-560017

Maruti Udyog Limited, Engine Assembly Department, PE Division, MUL, Palam, Gurgaon Road, Gurgaon-122015, Haryana

Mr. H. Sarkar, AGM

Tel. No.: 91-124-2341402/ 2341411

Mobile No.: 91-9811489023

Fixed Assets :

• Freehold and Leasehold Land
• Building
• Plant and Machinery
• Furniture and Fixtures
• Computers
• Vehicles
• Office equipments
• Jigs and fixtures
• Utilities
• Electrical installation
• Testing equipments
• Tools and equipments
• Technical know how

Website Details :

Subject was started as a project consultancy company in 1985 to lend technical expertise to the Indian machinery manufacturing industry. In a hope to capitalize the latent potential in this segment, the company forayed into manufacturing in 1986. It began indigenous design, development and fabrication of Special Purpose Process Machinery and Automation Systems for diverse client needs in the global arena.

An in-depth understanding of client needs and aligning processes to meet changing demands enabled subject to emerge as a reliable technical partner to a variety of industries.

Leveraging its capabilities as a technically versatile company, it diversified its business interests to allied areas. Today, subject has grown into a diverse corporate entity with an established lead position in niche categories including

v Engineering Design

v Process Machinery, Conveyors and Automation Systems

v Electron Guns for picture tubes and CDT

v Tungsten Rod, Wire and Powder products

v Health Care

Alliances with world leaders in different fields enabled subject to deliver high quality solutions and consistently update its processes to meet evolving demands. In Healthcare, the technical alliance with Ulco Medical helped it stay at the forefront of medical equipment manufacture.

Identifying new opportunities for growth has been one of the strong points of subject. Backed by the strength of its in-house R & D capabilities, it set up a non-sag tungsten manufacturing facility in Mysore in 1993. Today, it is the undisputed leader in the category, its products are exported to USA, Europe and other world markets.

Recognitions for the subject’s technical excellence have come from different quarters including The Government of India CSIR award in process industry category.

Subject’s commitment to customer delight is endorsed by its highly energized and motivated employees.

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.45.17
UK Pound	1	Rs.86.69
Euro	1	Rs.58.22

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	NO
--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		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

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