MIRA INFORM REPORT

Report Date :

01.01.2007

IDENTIFICATION DETAILS

Name :	BALAKRISHNA TYRES – UNIT OF BALKRISHNA INDUSTRIES LIMITED
Registered Office :	H-3/1 MIDC, 'A' Road, Tarapur (Boisar), Thane - 401 506, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	20.11.1961
Com. Reg. No.:	11-12185
CIN No. :	U99999MH1961PTC012185
TAN No.: (Tax Deduction & Collection Account No.)	MUMB11319A
PAN No.: (Permanent Account No.)	AAACB3333J
Legal Form :	A Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing of Paperboards, Tyres and Tubes and Synthetics.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 11500000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Available information indicates high financial responsibility of the company. Financial position is good. Payments are correct and as per commitments. The company can be considered good for normal business dealings. It can be regarded as a promising business partner in a medium to long run.

LOCATIONS

Registered Office :	H-3/1 MIDC, 'A' Road, Tarapur (Boisar), Thane - 401 506, Maharashtra, India
Tel. No.:	91-22-66663800
Fax No.:	91-22-66663898
Plant:	Paper/Paper Board & Coating Plant: Village : Ambivli, P.O. Mohone, Taluka – Kalyan, District Thane, Maharashtra, India Textile Processing Plant (Unit Nos. 1 & 2): H/3/1 MIDC “A” Road, Tarapur, Boisar, Dist. Thane, Maharashtra, India Tyre Plant: B-66, MIDC Industrial Estate, Waluj Industrial Area, Aurangabad, Maharashtra, India SP-923, RIICO, Phase III, Post Office Bhiwadi – 301 019, District Alwar, Rajasthan RIICO, Phase VIII, Chopanki, P.O. Bhiwadi, 301 109 Dist. Alwar. Rajasthan Wind Farm: Village Soda And Mada, Tehsil, Fatehgarh, District Jaisalmer, Rajasthan Mould Plant: A 298, TTC Industrial Estate Mahape, Navi Mumbai - 400701, Maharastra Plot No. TS-1, M.I.D.C, Phase No. II, Dombivali (E) 421 201 Dist. Thane
CORPORATE OFFICE :	421/422, Creative, 72 N. M. Joshi Marg, Mumbai – 400011, Maharashtra, India
Tel. No.:	91-22-66663800
Fax No.:	91-22-66663898 / 99
Email:	exports@bkt-tires.com

DIRECTORS

Name :	Mr. Ashokkumar P. Mahansaria
Designation :	Managing Director
Date of Birth/Age :	53 Years
Qualification :	Inter Science
Experience :	34 years
Date of Commencement:	01-04-1980
Last Employment:	Shree Sitaram Dyg. And Ptg. Mills Private Limited
Name :	Mr. Pawankumar D. Poddar
Designation :	Joint Managing Director
Date of Birth/Age :	52 Years
Qualification :	B.Com
Experience :	30 Years
Date of Commencement:	23-06-2001
Last Employment:	Siyaram Silk Mills Limited, Executive Director (20 Years)
Name :	Mr. Yogeshkumar A. Mahansaria
Designation :	Executive Director
Date of Birth/Age :	30 Years
Qualification :	B.com
Experience :	11 Years
Date of Commencement:	01-04-1994
Name :	Mr. Dharaprasad R. Poddar
Designation :	Chairman
Name :	Mr. Dadi S. Mulla
Designation :	Director
Name :	Mr. Subhashchandra Mantri
Designation :	Director
Name :	Sachin Nath B. Chaturvedi
Designation :	Director
Name :	Arvind M. Poddar
Designation :	Director
Name :	Khurshed m. Doongaji
Designation :	Director
Name :	Rakesh N. Garodia
Designation :	Director
Name :	Sachin Nath B. Chaturved
Designation :	Director
Name :	Rameshkumar D. Poddar
Designation :	Director
Other Personnel:
Name:	Vipul R. Shah
Designation:	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	9171176	74.08
Mutual Funds	444127	3.59
Financial Institutions	1450	0.01
Companies	367003	2.96
Public	1461554	11.81
Non Resident	47105	0.38
Foreign Institutional Investors	888065	7.17
Total	12380480	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Paperboards, Tyres and Tubes and Synthetics.

Products :

Ø Paper / Paper Boards

Ø Fabrics

Ø Tyres

Ø Tubes

Ø Tyre Flaps

Ø P L 801 - Pneumatic Forklift / Material Handling Tyres

Ø Skid Power H D

Item Code No.	Product Description
481039	Paper and Paper Boards
401100 / 401140	Pneumatic Tyres
551511	Processing of woven fabrics of synthetic staples fibres

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Paper / Paper Boards	M. Tons	33000	54000	41630
Fabrics	Meters	24.000	24.000	22067492
Tyres	Nos.	4.945	2.320	1347990
Tubes	Nos.	N.A.	N.A.	Nil
Tyre Flaps	Nos.	N.A.	0.379	41698
Wind Power Generation	KWH/Units	N.A.	5MW	5845814

GENERAL INFORMATION

No. of Employees :

300

Bankers :

v Bank of Baroda, Mumbai

v Central Bank of India, Chander Mukhi, Nariman Point, Mumbai – 400 021

v State Bank of India, Commercial Branch, Fort, Mumbai – 400 011

v State Bank of Travancore, Mumbai

v Corporation Bank

v ING Vysya Bank

Facilities :

Secured Loans	31.03.2006
From Banks:-
Cash Credit / Packing Credit	750.096
Bills Discounting	205.393
Industrial Development Bank of India Limited – Term Loan	11.000
UTI Bank Limited – Term Loan	607.273
Term Loan from :-
Financial Institutions Export Import Bank of India	2.500
Others	204.838
UNSECURED LOANS:
Fixed Deposits	81.700
Short Term Loans and Advances
Distributors' /Dealers' Deposits	0.389
From Others	100.000
Other Loans and Advances
4.5% Foreign Currency Convertible Bonds	981.420
Distributors'/Dealers' Deposits	21.241
Deferred Sales Tax under the scheme of Government of Maharashtra	3.007

Banking Relations :	Good
Auditors :	Jayantilal Thakkar & Company Chartered Accountants. Tholiya & Associates Cost Accountants. Dilip A. Jain & Associates M/s. Garg and Company Chartered Accountants Kanga & Company Advocates, Solicitors and Notary
Associates:	Ø Govind Rubber Limited - It is a market leader with 30% market share with their "INTERNATIONAL" brand of tyres and tyre tubes. Ø Siyaram's Silk Mills Limited - Engaged in manufacturing of synthetic suitings and shirtings and largest producer of P. V. Fabrics in the country. Ø S. P. Finance & Trading Limited Ø Poddar Brothers Investments Limited Ø Sanchana Trading & Finance Limited Ø Net Work Sales Limited Ø Sagar Silk Industries Limited Ø Cosmo Synthetics (India) Limited Ø Beetee Textiles Industries Limited Ø S. P. Investtrade Limited Ø Acumer Trading and Investments Limited Ø Yogesh Agencies & Investments Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
25000000	Equity Shares	Rs. 10 Each	Rs. 250.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
19331719	Equity Shares	Rs. 10 Each	Rs. 193.317 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		193.317	123.804	123.804
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		2681.702	1455.913	964.909
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		2875.019	1579.717	1088.713
LOAN FUNDS
1] Secured Loans		1781.103	1481.227	969.608
2] Unsecured Loans		1187.759	220.601	346.463
TOTAL BORROWING		2968.862	1701.828	1316.071
DEFERRED TAX LIABILITIES		374.117	331.274	251.531
TOTAL		6217.998	3612.819	2656.315
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2597.465	2195.114	1555.424
Capital work-in-progress		689.091	171.632	146.691
INVESTMENT		51.168	20.748	23.352
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1069.070	647.823	566.383
	Sundry Debtors	795.730	649.635	392.096
	Cash & Bank Balances	768.399	32.987	17.176
	Other Current Assets	3.636	0.048	0.047
	Loans & Advances	1490.110	933.017	542.018
Total Current Assets		4126.945	2263.510	1517.720
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	531.013	605.061	419.456
	Provisions	715.658	433.124	167.416
Total Current Liabilities		1246.671	1038.185	586.872
Net Current Assets		2880.274	1225.325	930.848
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		6217.998	3612.819	2656.315

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	6258.165	4933.170	3669.704
Profit/(Loss) Before Tax	1067.399	883.718	452.428
Provision for Taxation	367.850	308.943	137.416
Profit/(Loss) After Tax	699.549	574.775	315.012
Export Value	4196.010	3037.432	1942.426
Import Value	1733.996	1135.086	706.541
Total Expenditure	5190.765	4049.451	3237.274

QUARTELY RESULTS

PARTICULARS	30.06.2006 [1^st Quarterly]	30.09.2006 [2^nd Quarter]
Sales Turnover	1828.800	2103.200
Other Income	07.600	51.100
Total Income	1836.400	2154.300
Total Expenditure	1462.200	1744.500
Operating Profit	374.200	409.800
Interest	39.400	39.600
Gross Profit	334.800	370.200
Depreciation	81.600	80.700
Tax	87.200	82.000
Reported PAT	167200	191.300

200606 Quarter 1 - The above results, as reviewed by the Audit Committee, have been approved by the Board of Directors at its Meeting held on 31.07.2006. The Auditors of the Company have carried out a limited review of the results. 2. The capacity expansion programs in the Tyre Division of the Company are running as per schedule. 3. During the quarter, the Government of India has notified retrospective reduction in the rates of Incentives under Target Plus Scheme for the Financial Year 2005 -2006. However, during the quarter, the Company has not written off differential Export Incentives of Rs.66.500 Millions recognised in the previous year as many representations have been made to the Government of India by different trade organisations and Company is hopeful of its withdrawal during the year. In case no such withdrawal is made, the said amount will be written off at the year end. 4. Effective from 01.04.2006, the Institute of Chartered Accountants of India has issued revised Accounting Standard (AS-15) on 'Ernployee Benefits'. The Company is in the process of ascertaining the impact of the said revised Standard and necessary provisions in respect of additional liability, if any, under the said Standard will be made at the year end. 5. The diluted EPS has been calculated after taking into account conversion of outstanding FCCB of USD 22 million as per the provisions of Accounting Standard (AS-20) issued by the Institute of Chartered Accountants of India. 6. The details of number of investor complaints for the quarter; Beginning- NIL,Received-4, Disposed-4, Pending-NIL 7. Figures for the previous period have been Re-grouped/ Re-classified wherever necessary.

200609 Quarter 2 - Expenditure Includes (Increase)/Decrease in Stock in Trade Rs. 37.700 million Consumption of Raw Materials Rs. 1186.100 million Staff Cost Rs. 61.800 million Power & Fuel Rs. 141.400 million Other Expenditure Rs. 317.100 million Exchange Fluctuation Loss/(Gain) on Foreign Currency Rs. (13.900) million Tax Includes Provision for Current Tax Rs. 80.700 million Deferred Tax Rs. 16.200 million Fringe Benefit Tax Rs. 01.300 million EPS is Basic Status of Investor Complaints for the quarter ended 30.09.2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 04 Complaints disposed off during the quarter 04 Complaints unresolved at the end of the quarter Nil 1. The above results as reviewed by the Audit Committee have been approved by the Board of Directors at its meeting held on 27.10.2006. The Auditors of the Company have carried out a limited review of the results. 2. The Board of Directors of the Company has declared interim Dividend of Rs. 3.500 ( 35%)per Equity shares of Rs 10/- each. 3. The capacity expansion programs in the Tyre Division of the Company are running as per schedule. 4. The Government of India, during the current financial year has notified retrospective reduction into the rates of Incentives under Target Plus Scheme for the Financial Year 2005-2006. However, the Company has not written off differential Export incentives of Rs. 66.500 million recognised in the previous year as many representations have been made to the Government of India by different trade organisations and Company is still hopeful of its withdrawal during the year. In case no such withdrawal is made, the said amount will be written off at the year end. 5. Effective from 01.04.2006, the Institute of Chartered Accountant of India has issued revised Accounting Standard (AS-15) on Employees Benefits. necessary provisions in respect of additional liability, if any, under the said Standard will be made at the year end. 6. The Diluted EPS has been calculated after taking into account conversion of outstanding FCCB of USD 22 million, as per the provision of the Accounting Standard (AS-20) issued by The Institute of Chartered Accountants of India. 7. Figures for the previous period/year have been regrouped/reclassified, wherever necessary.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	1.05	1.13	1.22
Long Term Debt Equity Ratio	0.66	0.60	0.50
Current Ratio	1.35	1.04	0.93
TURNOVER RATIOS
Fixed Assets	1.67	1.66	1.59
Inventory	6.95	7.72	6.84
Debtors	8.26	9.00	8.06
Interest Cover Ratio	9.72	11.58	5.80
Operating Profit Margin (%)	24.52	25.22	20.53
Profit Before Interest and Tax Margin (%)	19.94	20.62	15.57
Cash Profit Margin (%)	16.30	16.85	13.93
Adjusted Net Profit Margin (%)	11.72	12.26	8.97
Return on Capital Employed (%)	26.07	34.02	25.26
Return on Net Worth (%)	31.41	43.08	32.28

STOCK PRICES

Face Value	Rs.10/-
High	Rs.590.00/-
Low	Rs.551.00/-

LOCAL AGENCY FURTHER INFORMATION

History:

Incorporated in 1961, Balkrishna Industries (BIL) manufactures paper besides processing synthetic textiles and tyres.  

The company embarked up on a Rs 125.000 Millions modernisation-cum-expansion of its Kalyan paper division. The capacity (30,00 tpa) was raised by 6000 tpa. The expansion was funded by the proceeds from private placement and term loans. The paper division started operating its expanded capacity in the second half of 1997.  

The company undertakes processing of cloth for other parties on a job-work basis at its plant at MIDC, Tarapur. The processing division, which started commercial production in Feb.'81, has completed its first phase of expansion-cum-modernisation. It will be the country's most modern textile processing plant for polyester viscose fabrics. The total outlay for the division's plans was Rs 120.000 Millions In 1998-99, it increased the installed capacity of tyres to 1.573 Millions nos.  

During 1999-2000, the production of the tyre division reflected an increase of 8% and the company is in the midst of implementing an expansion programme in its various divisions. 

The company has carried out modernisation, debottlenecking and cost reduction during November 2000. The upgradation process was completed fag end of the 2001. The company increase the installed capacity of Paper/Paper Boards to 42,000 Mt from 36,000 Mt at a cost of 8,500.000 Millions .3.3 MW capacity of Captive Power Plant is in the process and is likely to be commissioned in March 2002 and the cost is estimated around 40.000 Millions. 

The company spend Rs.40.000 Millions towards de-bottlenecking and enabling its to manufacture a wider range of tyres. The company is planning to introduce new designs of tyres and also improvement in process technology and product mix. During 2001-02 the company spent Rs.180.000 Millions for tyre division towards debottlenecking and for equipment to enable production of a wider product range. To achieve quality improvements for its Paper division the company completed a modernisation scheme at a capex of Rs.85.000 Millions .

During 2004-05 the company has launched Tractor Radial Tyres. The company has expanded its capacity at Bhiwadi to 42000 tpa which includes the setting up of Radial Tractor Tyre Capacities and also expanded its capacity at Waluj to 18000 tpa. Further the company has commissioned a new multi-fuel fired Boilers at Bhiwadi & Waluj and 3.2 MW Furnace Oil fired D G Set at Bhiwadi. The company has also commissioned a 5 MW Wind-Farm near Jaisalmer, Rajasthan captive usage through wheeling of Power to its Bhiwadi plant. The total capital outlay of these project is Rs.900.000 Millions. 

Further in 2004-05 the company has decided to double its Radial Tractor Tyres Capacity at Bhiwadi Plant. The company has also bought land at Chopanki near Bhiwadi Plant to set up a large warehouse to maintain stock and also setting up a new mixing plant which is scheduled to be completed by 2005-06. It is also planning to set up an additional production facilites at 10000 tpa in the 1st phase which is expected to be completed by 2005-06. Further the company is setting up a new mould plant in Dombivli, Thane Dist which is expect to commence its operations by August 2005. These project are estimated at a cost Rs.850.000 Millions. 

The company has increased the installed capacity of Tyres by 0.271 million (Nos) during 2004-05 and with this expansion the total installed capacity of Tyres has increased to 2.288 Millions (Nos). During August 2005 the company has issued bonus equity shares to its shareholders in the ratio of 1:2.

The company’s fixed assets of important value include freehold land, leasehold land, buildings and roads, plant and machinery, factory, office and other equipments, electric installations, furniture and fixtures, vehicles and air conditioners.

EPS is Basic and diluted. 1. The above results as reviewed by the Audit Committee have been approved by the Board of Directors at its meeting held on 30^th July, 2005. The Auditors of the Company have carried out a limited review ofthe results. 2. The Company's revised expansion plan under progress includes (i) Setting up of 15000 tpa Tyre production capacity at Chopanki, (ii) Doubling of Radial Tractor tyre capacity at Bhiwadi, (iii) increase in tyre production capacity at Waluj from 18000 tpa to 22500 tpa at a total capital outlay of Rs.1100.000 Millions, to be funded by the internal accruals and Term Loans. 3. The Operations at the Paper Plant are suspended since 27th July '05 due to unprecedented rain/flood. Normal operations are expected to be resumed in September'05. 4. The Board of Directors had declared Bonus Share in the ratio of one equity shares for every two equity shares held, in their meeting held on 16th May, 2005, which was approved by the Shareholders in theAnnual General Meeting held on 16^th July, 2005. The record date forthis purpose will be finalised in consultation with the Stock Exchange. 5. The details of number of investor complaints forthe quarter: Beginning-Nil, Received-3, Disposed-3, Pending-Nil. 6. Figures for the previous periods/year have been regrouped/reclassified, wherever necessary.

OPERATIONS : 

The Gross Turnover and Other Income of the Company for the year ended 31.03.2006 is higher at Rs.6386.100 Millions as compared to Rs. 5080.400 Millions in the previous year, reflecting an increase of 26%. The Gross Profit is placed at Rs. 1340.800 Millions as compared to Rs. 1099.100 Millions in the previous year, and consequently the Profit after taxes is Rs. 699.500 Millions, as against Rs.574.800 Millonss in the previous year. 

 The Company operates mainly in three different business segments namely; manufacturing of Pneumatic Tyres, Coated/un-coated Paperboards and Processing of Textile Fabrics. 

TYRE DIVISION : 

The Company is focused on the production of a wide range of 'Off Highway Tyres' with sectoral focus on Agricultural, Forestry, Industrial, Material Handling, Construction and Mining Sectors, as well as other Off the Road (OTR) usages. The Company also manufactures a wide range of tyres for 'Lawn & Garden' and 'All Terrain Vehicles' (ATV) usages. Last year, the Company had successfully launched Tractor Radial Tyres, which have been well received in the International Markets. Encouraged by the good response and increasing demand for Tractor Radial Tyres, the Company has decided to double its capacity of Tractor Radial Tyres. The Company continues to develop new sizes & ranges in all these segments, and currently has in production over 1600 Stock Keeping Units (SKUs) to meet the diverse needs and applications. 

The Company exports over 95% of its production. The major part of its production is sold under 'BKT Brand' and part of its production is sold under various outsourcing agreements and/or private Brands of the Buyers. The 'BKT Brand' enjoys an excellent reputation in the European countries, and is fast gaining recognition in the other markets where it operates. 

The Company is also supplying Tyres in the domestic market to all the major Construction Equipment manufacturers, as well as has a presence in the replacement market in the Road Construction sector. 

During the year under review, the production of Automobiles Tyres increased to 42,538 M.Tons as against 29,221 M.Tons in the previous year, reflecting an increase of 46%. The Sales and related income of the Division was higher at Rs. 5144.900 Millions as against Rs. 3694.200 Millions in the previous year, out of which Exports and Export related income stood at Rs.4902.400 Millions as against Rs. 3562.000 Millions in the previous year. 

EXPANSION AT THE TYRE DIVISION 

During the year under review, the Company has commissioned the following projects: 

At Bhiwadi / Chopanki: 

Capacity Expansion at Bhiwadi from 42,000 tpa to 45,000 tpa. 

A new modern four Roll Calendar at Bhiwadi, which has considerably improved the Calendaring quality. This Calendar will also meet the increased requirements for Chopanki tyre production. 

A Warehouse admeasuring 1,40,000 Sq.ft. at Chopanki to store Inventories of its wide product range. 

 At Waluj: 

 An Inter-mixer(320 liters capacity). With this, the Waluj plant is now selfsufficient for its mixing requirements. 

 At Dombivali: 

The Mould Shop for captive purpose - This will meet a portion of Company's requirements of Moulds. 

WEBSITE DETAILS :

Balkrishna Tyres (BKT) is one of the world’s premier manufacturer of pneumatic tyres for special applications such as -

• Agricultural Tyre
• Industrial & Construction Tyres
• ATV Tyres
• Lawn & Garden Tyres
• Earth Moving Equipments Tyres

BKT has a worldwide distribution network ensuring extensive reach and penetration.

PRODUCTS

Since one of the pillars of its philosophy is to continuously expand out range, they take great pride in the fact that they have developed a vast range of tyres, the bulk of which are exported to their overseas clients.

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.44.23
UK Pound	1	Rs.86.91
Euro	1	Rs.58.26

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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		71

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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