MIRA INFORM REPORT

Report Date :

18.01.2007

IDENTIFICATION DETAILS

Name :	COSMO FILMS LIMITED
Registered Office :	30, Community Centre, Saket, New Delhi – 110 017, India
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	07.10.1976
Com. Reg. No.:	11-8355
CIN No.: [Company Identification No.]	U92114DL1976PLC008355
TAN No.: (Tax Deduction & Collection Account No.)	NSKC01059C
Legal Form :	It is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of Plastic Films, Packing & Packaging, Printing Industry Services and BOPP Film.

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 5000000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company engaged in the business of manufacturing and marketing Biaxiall Oriented Polypropylene Film and Synthetic Paper. During the financial year 2004-2005, there has been slight decline in the company’s sales and profits. The company’s expansion projects have been completed as per schedule and within the budgeted cost. Trade relations are reported as fair. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered/ Head Office :	30, Community Centre, Saket, New Delhi – 110 017, India
Tel. No.:	91-11-2686 3968 / 2686 3969 / 2668105
Fax No.:	91-11-2686 2969 / 2685 3166 / 26868093
E-Mail :	ashok@dl.cosmo.sprintsmx.ems.vsnl.net.in mgredp@cosmofilms.com mm.rao@gndel-cfldel.global.net.in skmittal@gndel-cfldel.global.net.in
Website :	http://www.cosmo-india.com http://www.cosmofilms.com
Corporate Office :	30, Community Centre, Saket, New Delhi – 110 017, India
Tel. No.:	91-11-2686 3968 / 2686 3969
Fax No.:	91-11-2686 2969 / 2685 3166
E-Mail :	ashok@dl.cosmo.sprintsmx.ems.vsnl.net.in
Plants :	J-4, MIDC Industrial Area, Chikalthana, Aurangabad – 431 210, Maharashtra Tel. No. : 91-240-2485080 Fax No. : 91-240-2485581 E-mail :- cflchk@cosmofilms.com B-14/9, MIDC Industrial Area, Waluj, Aurangabad – 431 136, Maharashtra Tel. No. : 91-240-2554612 / 13 Fax No. : 91-240-2554416 E-mail :- gopi@cosmofilms.com Vermardi Road, Village Navi Hithardi, near Inox, Off. N.H. Road, Taluka-Karjan, Vadodara-391240 Tel No :- 91-2666-232960/231635 Fax No :- 91-2666-232961 E-mail :- gks@cosmofilms.com Plot No. 359-B, Baska Village, Taluka-Halol, Panchmahals, Gujarat, India Tel No :- 91-2676-247021/247128 Fax No :- 91-2676-247041 Cosmo International (US) Inc. 24, Middleneck Road, Suite # 2H, Roslyn, New York, 11576 USA Phone : +516-869-8629 Fax : +516-869-0303 Cell : +917-834-211 Mr. Bittu Wallia E-mail : cosmofilmsusa@hotmail.com
Branches :	30, Community Centre, Saket, New Delhi – 110 017, India Tel. No. 91-11-2686 3968 / 2686 3969 Fax No. 91-11-2686 2969 Contact Person : Mr. B. Suresh Flat No. 7, 3^rd Floor, 148,North Usman Road, T. Nagar, Chennai- 600017, Tamilnadu, India Tel No :- 91-44-28143998 / 28143636 Fax No :- 91-44-17141247 E-mails:- kcp@cosmofilms.com 1405/B, 14^th Floor, Babu Khan Estate, Basheer Bagh, Hyderabad – 550001, Andhra Pradesh, India Tel. No. 91-40-2359 7620 / Fax No. 91-40-2323 2387 Contact Person : Mr. P. K. Gupta 303, 3^rd Floor, Gokul Arcade A, Subhash Road, Vile Parle (East), Mumbai, Maharashtra, India Tel. No. 91-22-2826 1195 Fax No. 91-22-2826 1201 Contact Person : Mr. P. K. Gupta

DIRECTORS

Name :	Mr. Ashok Jaipuria
Designation :	Chairman and Managing Director
Date of Birth/Age :	52 years
Qualification :	Degree in Associates of Arts in Business Administration & Diploma in Marketing Science
Experience :	34 years
Date of Appointment :	02.04.1980
Name :	Mr. B V Bhargava
Designation :	Director
Qualification :	M Com, LLB
Other Directorship :	Former Managing Director of ICICI Limited
Name :	Mr. H K Agarwal
Designation :	Director
Qualification :	B E and MBA (IIM), Management Consultant
Name :	Mr. Mahendra Sanghvi
Designation :	Director
Qualification :	A Polymer Scientist,
Other Directorship :	Promoter and Managing Director of Shaily Engineering Plastics, Baroda
Name :	Dr. Surinder Kapur
Designation :	Director
Qualification :	Ph.D. in Mechanical Engineering
Other Directorship :	Managing Director of Sona Koyo Steering Systems
Name :	Mr. Rajeev Gupta
Designation :	Director
Qualification :	B E and MBA
Other Directorship :	Joint Managing Director of DSP Merrill Lynch Limited Managing Director – Carlyle India Advisors Private Limited

KEY EXECUTIVES

Name :	Mr. S K Mittal
Designation :	Executive Director, C A and CEO
Date of Birth/Age :	53 years
Qualification :	B. Com, ACA
Experience :	29 years
Date of Appointment :	15.03.1996
Other Directorship :	General Manager of Samtel Color Limited
Name :	Ms. Vimal Bhandari
Designation :	Director
Qualification :	Chartered Accountant
Other Directorship :	Country Manager – India, AEGON International N. V.
Name :	Mr. Hasmukh Shah
Designation :	Industry Management (Polymer)
Name :	Mr. R Mukherjee
Designation :	President
Date of Birth/Age :	56 years
Qualification :	Mechanical Engineering
Experience :	31 years
Date of Appointment :	01.11.1997
Other Directorship :	Senior General Manager of Philips India
Name :	Mr. A G Deshpande
Designation :	Vice President – Operations
Name :	Mr. Janardhan Gupta
Designation :	General Manager – Commercial
Name :	Mr. S D Gosavi
Designation :	Dy. General Manager – Manufacturing
Name :	Mr. S C Maity
Designation :	Dy. General Manager – Manufacturing
Name :	Mr. Mr. Sanjay Chincholikar
Designation :	General Manager – Projects and Domestic Marketing
Name :	Mr. P C Garg
Designation :	Dy. General Manager – Commercial
Name :	Mr. H L Paranjpe
Designation :	Director
Qualification :	M. Sc. (Chemical Engineering), University of Birmingham, UK Polymer Technologist
Name :	Mr. Badri Agarwal
Designation :	Director
Qualification :	C A, Corporate Director – Bharti Enterprises Limited
Name :	Mr. Avinash Kulkarni
Designation :	General Manager – Manufacturing

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	8509817	43.78
Institutional Investors	3302488	16.98
Private Corporate Bodies	1551012	7.98
Others	6076759	31.26
Total	19440076	100.00

As on 30.09.2006

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters Indian Promoters	8485717	43.65
Institutional Investors
Mutual Funds and UTI	758924	3.90
Bank, Financial Institution, Insurance Companies (Central/State Government / Non-Government)	30400	0.16
Fll’s	4400	0.02

BUSINESS DETAILS

Line of Business :

Manufacturer of Plastic Films, Packing & Packaging, Printing Industry Services and BOPP Film.

Products :

Item Code No.	3920.99
Product Description	Biaxially Oriented Poly / Propylene Films / Synthetic Paper

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Biaxially Oriented Polypropylene (BOPP) Film & Synthetic paper	MT	77000	71000	56773
Thermal Lamination Machines	Qty.(Units)	100	NA	15

GENERAL INFORMATION

No. of Employees :

Around 250

Bankers and Financial Institutions :

Ø Union Bank of India, 26 / 28-D, Connaught Place, Delhi - 110 001

Ø Canara Bank, 6, Bhagwandas Road, Delhi - 110 001

Ø State Bank of India, 11, Parliament Street, Delhi - 110 001, Indian

Ø International Financial Corporation, Washinton

Ø Rabo Bank

Ø ING Vysya Bank Limited

Ø HDFC Bank Limited

Ø Bank of Maharashtra

Ø Export Import Bank of India

Ø Bank of Bahrain and Kuwait

Ø Industrial Development Bank of India

Ø ICICI Bank

Ø Cooperative Centrale Raiffeisen – Boerenleenbank B. A.

Ø Landesbank Baden – Wurttemberg

Facilities :

Secured loans

(Rs. in millions)

	31.03.2006
From Financial Institutions
Foreign Currency Term Loans/Corporate Loan (a)	101.441
From International Finance Corporation
Foreign Currency ECB (b)	167.512
From Bank
Foreign Currency ECB (c)	329.441
Rupee Term Loan (c)	201.250
Foreign Currency Term Loans (d)	178.680
Foreign Currency Buyers Credit Loans (e)	0.000
Foreign Currency Demand Loans (f)	111.675
Cash Credit/Working Capital Demand Loans (f)	612.661
Overdraft Facility	2.657
Total	1705.317

Notes:

(a) Secured interse on pari-passu basis by way of mortgage of immovable properties both present and future and hypothecation of all

movable properties except those on which charge has been created in favour of company's bankers for working capital requirements.

The loans are additionally secured by personal guarantee of managing director.

(b) Secured by first pari-passu charge by way of mortagage of immovable assets and hypothecation of all movable assets both present

and future and second pari passu charge on receivables and inventories charged for short term debts incurred in ordinary course of

business.

(c) Secured by first pari-passu charge over the entire fixed assets of the company.

(d) Secured by hypothecation of raw materials, work-in-progress,stores and spares, finished goods, book debts and second charge on fixed assets secured to financial institutions and personal guarantee of managing director.

(e) Secured by hypothecation of stocks and book debts on pari-passu basis.

(f) Secured against pledge of the fixed deposits of the company.

Unsecured Loans

(Figures Rupees in millions)

Particulars	31.03.2005
Fixed Deposit	0.112
Short Term Loans and Advances from Banks	0.000
Other Loans and Advances from Banks	79.599
Total	79.711

Banking Relations :	Satisfactory
Auditors :	B.K. Shroff & Company Chartered Accountants
Associates/Subsidiaries :	Ø Cosmo Plantgene Limited Hybrid Seeds Ø Cosmo Ferrites Limited Soft Ferrites Ø Gujarat Propack Limited Subsidiaries Ø Cosmo International Limited Ø Cosmo International Inc, US
Membership :	Confederation of Indian Industry

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
19440076	Equity Shares	Rs. 10/- each	Rs. 194.401 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	194.401	194.401	169.734
2] Reserves & Surplus	1128.905	1089.615	963.919
NETWORTH	1323.306	1284.016	1133.653
LOAN FUNDS
1] Secured Loans	1705.317	1820.365	1892.118
2] Unsecured Loans	79.711	117.434	278.669
TOTAL BORROWING	1785.028	1937.799	2170.787
DEFERRED TAX LIABILITIES	346.355	372.703	398.289
TOTAL	3454.689	3594.518	3702.729
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	2025.802	2167.499	2425.077
Capital work-in-progress	84.064	26.120	49.433
INVESTMENTS	67.684	469.414	463.728
CURRENT ASSETS, LOANS & ADVANCES
Inventories	743.610	576.381	397.136
Sundry Debtors	760.460	583.736	450.806
Cash & Bank Balances	48.084	25.795	113.281
Loans & Advances	244.065	167.691	301.094
Total Current Assets	1796.219	1353.603	1262.317
Less: CURRENT LIABILITIES & PROVISIONS
Current Liabilities	377.237	336.001	355.338
Provisions	143.316	88.432	145.666
Total Current Liabilities	520.553	424.433	501.004
Net Current Assets	1275.666	929.170	761.313
MISCELLANEOUS EXPENSES	1.473	2.315	3.178
TOTAL	3454.689	3594.518	3702.729

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	4396.689	4001.830	3234.311
Profit/(Loss) Before Tax	167.090	88.183	388.060
Provision for Taxation	38.483	17.634	72.951
Profit/(Loss) After Tax	128.607	105.817	315.109
Export Value	1706.346	1394.157	1065.345
Import Value	657.274	526.314	691.599
Total Expenditure	3926.048	3913.338	2846.251

SUMMARISED RESULTS

PARTICULARS	30.06.2006 (1^st Qtr)	30.09.2006 (2^nd Qtr)
Sales Turnover	1252.800	1346.700
Other Income	6.100	8.100
Total Income	1258.900	1354.800
Total Expenditure	1096.800	1174.200
Operating Profit	162.100	180.600
Interest	35.500	43.900
Gross Profit	126.600	136.700
Depreciation	62.000	64.700
Tax	8.900	23.800
Reported PAT	61.300	47.500

Notes :

2006-06 Quarter 1 :

Expenditure Includes Purchases / Raw Materials Consumption Rs 737.00 million Power, Water and Fuel Rs 101.70 million Staff Costs Rs 72.20 million Other Costs Rs 181.00 million (Increase) / Decrease in Stock Rs 4.90 million Tax Includes Provision for Income Tax Rs 7.90 million Fringe Benefit Tax Rs 1.00 million Deferred Tax Rs (5.60) million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 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. FOB value of Exports sales during the quarter was Rs 606.10 million (Previous year Rs 335.10 million). 2. Extrusion Coating Line 3 has been commissioned in Export Oriented Unit at Aurangabad. The expansion projects of Extrusion Coating Line 4 and BOPP Capacity enhancement by 30000 MT per annum are progressing as per schedule. 3. Other costs include Rs 8.20 million due to Exchange rate fluctuation. 4. The impact of foreign exchange fluctuation on the amounts outstanding in assets and liabilities as on June 30, 2006 has not been considered. The same will be considered at the year end. If considered, the profit before Tax would have been lower by Rs 0.50 million.

2006-09 Quarter 2 :

Expenditure Includes Raw Materials consumption/purchases Rs 849.00 million Power, Water and Fuel Rs 107.10 million Staff Costs Rs 52.20 million Other Costs Rs 185.60 million (Increase) / Decrease in Stock Rs (19.70) million Tax Includes Provision for Income Tax Rs 22.90 million Fringe Benefit Tax Rs 0.90 million Deferred Tax Rs 0.70 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 18 Complaints disposed off during the quarter 18 Complaints unresolved at the end of the quarter Nil 1. Exports during half year ended September 2006 are Rs 1282.70 million. (Previous period Rs 692.60 million) 2. Extrusion Coating line IV has been commissioned. 3. In light of higher value addition in specialty films the Company is reviewing its plans for capacity expansion in commodity films. 4. The impact of foreign exchange fluctuations on the amounts outstanding in assets and liabilities as on September 30, 2006 has not been considered. The same is being accounted at the year end. If considered, the profit before tax would have been higher by Rs 4.70 million.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	1.43	1.70	1.87
Long Term Debt Equity Ratio	0.95	1.30	1.62
Current Ratio	1.08	0.99	1.12
TURNOVER RATIOS
Fixed Assets	1.13	1.10	0.99
Inventory	6.97	8.81	8.76
Debtors	6.84	8.29	7.45
Interest Cover Ratio	2.27	1.84	5.25
Operating Profit Margin (%)	13.11	13.60	22.67
Profit Before Interest and Tax Margin (%)	6.50	4.96	3.88
Cash Profit Margin (%)	9.40	11.30	17.92
Adjusted Net Profit Margin (%)	2.80	2.66	9.14
Return on Capital Employed (%)	9.45	6.52	16.19
Return on Net Worth (%)	9.86	9.45	30.56

STOCK PRICES

Face Value	Rs. 10.00
High	Rs. 88.40
Low	Rs. 87.00

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 7^th October, 1976 at New Delhi having Company Registration Number 8355.

The company is a part of well diversified group with interest in plastics, chemicals and agro industries. Mr. Ashok Jaipuria promoted this group. Within a decade, he promoted three companies.

The company was promoted by Mr. Ashok Jaipuria (son of the late Mr. Sitaram Jaipuria, former CMD of Swadeshi Polytex) is the pioneer in the manufacture of biaxially-oriented polypropylene (BOPP) film which is widely used in the consumer product industry for packaging. The company went public four years after its incorporation in 1976.

The company, the first ISO 9002 certified BOPP manufacturing company operates two plants at Chikalthana and Waluj, both in Aurangabad district of Maharashtra with a combined production capacity of 23100 MTPA of BOPP and Synthetic paper. The company has taken up another expansion project of 10000 MTPA at the existing location at Waluj. The company started exporting its products from 1994.

The company is continuously scaling up its capacity in line with the demand and it has set up a second plant (with an installed capacity of 2000 tpa) for manufacture of BOPP film at the Waluj Industrial area in the Aurangabad district. Later the combined installed capacity was increased to 10800 MTPA through an expansion plan. In 1996-97 the company has undertaken a debottlenecking programme (revamping of line III) thus increasing the installed capacity to 13200 MTPA. And again in 1997-98 the installed capacity was increased to 14100 MT.

The company is in the process of acquiring land at Nashik, Maharashtra for setting up a new unit with an installed capacity of 17000 MTPA of BOPP film. The company has plans to manufacture electrical-grade BOPP film in collaboration with General Electric, USA. The company has won the Best BOPP Exporter Award from PLEXCONCIL for the year 1998-99

The company acquired 76.51% stake in Gujarat Propack (GPP) at a price of Rs. 29.25 per share. The deal translates into an Enterprise Valuation of around Rs. 870 millions. In line with the take over the company shall make an open offer to acquire a further 20% shareholding from public at the acquisition price of Rs. 29.25 per share.

Gujarat Propack was established in 1986 and is the second largest player in the Indian BOPP films industry with over 27% market share. GPP has an excellent track in developing specialized products for high-end packaging applications and has an impressive customer profile which includes Hindustan Lever, Nestle India, ITC, Britania and Godfrey Phillips India among others. GPP has total of three manufacturing lines and two plants located at Baroda with a capacity of 13000 MTPA.

During the year 2002, Gurarat Propack Limited merged with the company in the ratio of 2:1 equity shares held.

The company had issued Bonus Shares in the Ratio of 1:1 to its shareholders and the allotment was completed in 28.03.2003. The company has increased BOPP’s installed capacity by 25500 MT and consequently the total capacity has now stood at 48600 MT.

INDUSTRY ANALYSIS

Cosmo Films is in the business of manufacture and sales of BOPP films. World OPP films market has been growing steadily in past several years. Growth in Asian region has been the highest.

Indian domestic BOPP market has been growing @ 12 to 15% per annum. Since per capita BOPP consumption in India is much lower as compared to Western and other Asian countries, potential for demand growth is quite high. In view of growth potential, Cosmo as well as other BOPP manufacturers have expanded capacities.

Since the present size of domestic market is quite small they have been focusing more to expand their business in export market.

They have already achieved full capacity utilization of their latest production line commissioned in March 2004. They are continuously working with various FMCG and other end user companies for development of new applications of BOPP to expand the market size. Cosmo is one of the lowest cost BOPP producers in the world and can expand its customer base by providing cost effective innovative packaging solutions to its customers.

OPERATIONS & FINANCIAL PERFORMANCE

Preparation of Accounts

The financial statements have been prepared in compliance with the requirements of Provision of Companies Act, 1956 and the Generally Accepted Accounting Principles (GAAP) of India.

Sales

Net sales during the financial year were Rs. 4219.900 millions (previous year Rs. 3907.300 millions). Exports have grown from Rs. 1394.200 millions to Rs. 1706.300 millions a growth of 22%. This Growth has been achieved despite over capacity in international markets.

Raw

Major Raw Materials used for production are Homopolymer, Copolymer, EVA and certain additives. The ratio of raw materials cost to net sales was 63.81% in 2005-06. (Previous Year 62.30%).

The company is sourcing its raw material requirements from overseas as well as domestic suppliers.

Research & Developments

There is a continuous thrust on the research & development activity. As a policy, the Company charges off revenue expenditure on Research & Development in the Profit and Loss account of the year in which it is incurred. Rs. 29.000 millions (approx) have been spent on R & D during the last year.

Provision for Tax

During the year company has made a provision of Rs. 59.200 millions (previous year Rs. 8.000 millions) towards income tax. Further an amount of Rs. 5.600 millions has been provide as Fringe Benefit Tax. Besides, Rs. 26.300 millions written back from deferred tax liability.

Profit after Tax (PAT)

Company has earned PAT of Rs. 128.600 millions during FY 2006-06 as against Rs. 105.800 millions in previous year. The company is continuing its efforts on cost reduction and improvement in product mix and market diversification.

DIVIDEND

Equity dividend of Rs. 4.00 per share (Previous Year Rs. 3.50 per share) has been recommended by the Board of Directors for the year ended 31 ''March, 2006 amounting to Rs. 77.760 millions (Previous Year Rs. 68.040 millions) on equity share capital.

DEPOSITORY SYSTEM

The company shares have been notified for compulsory trading in demat form by SEBI w.e.f. June 202000. Members have the option of holding their shares in clemat form through any of the depositories by opening account with the authorized depository participants.

OPERATIONS

Worldwide over capacity in the industry continued to effect operating margins. Due to internal cost cutting measures, increase in export sales, significant improvement in quality and operational efficiencies, net profit after tax has increased to Rs. 125.600 millions during the year as compared to net profit of Rs. 105.800 millions in the previous year.

EXPORTS

Efforts towards exports have been further accelerated. Exports have grown to a level of Rs. 1706.300 millions during the year as compared to Rs. 1394.200 millions during the previous year. Cosmo maintains its position of largest BOPP film exporter from India.

OUTLOOK / EXPANSION PROJECTS

Gas supply agreement has been entered into with GSPL for Vadodara unit. BOPP film capacity enhancement of 30000 MT at Vadodara is being planned to cater to growing needs of customers. Metalizer with additional capacity of 4000 MT and two extrusion coating lines with additional capacity of 8000 MT are being considered.

Fixed Assets:

The company’s fixed assets of important value include Land (Freehold and Leasehold), Buildings, Plant & Machinery & Know-how, Development, Furniture, Fixture & Fittings, Factory & Office Equipment and Vehicles.

As Per Web Details

Profile

Cosmo Films was started in 1980 to manufacture Bi-axially Oriented Polypropylene Films (BOPP) for the first time in India. Since inception they have maintained market leadership in the Indian market and also Continues to be largest BOPP film exporter from the Country.

Their current capacity is 68000 MT per annum.  Including 8000 MT of Thermal lamination film.

Apart from ISO 9000, they have also got accredited with American Institute of Baking (AIB) and British Retail Consortium (BRC) Certification for Safety and Hygiene of Food related products.

At their Waluj campus, they have their own Captive Power Plant of 8 MW capacity which ensures good quality uninterrupted power supply for their production at an economical cost.

Over a period of time, they have earned respect from their customers for being one of the most innovative and quality conscious BOPP suppliers in the world. They have been able to do this because they constantly innovate; not just with their products and processes but also with their organization and their business practices.

Their core values are their major driving force. They truly believe in customer orientation, transparency, innovation and fair business practices with all their business associates.

They are associated with leading FMCG Brands for providing cost-effective innovative packaging solutions to enhance their value.

In a recent survey by "FORBES" Cosmo has been recognized one of the best 200 companies out of 19000 listed companies with revenue of less than 1 Billion US$ outside US.

Mission

Ø They will seek global market leadership  

Ø Development and growth in oriented films will be their focus

Ø They will continue to create a winning culture; operating in the highest standards of ethics and values

Ø They will strive for excellence in customer service, quality and R & D 

Policies

Ø To develop, manufacture and supply products and services of a quality that will meet or exceed the expectations of their customers within India and abroad

Ø To improve upon its products and services on continual basis by taking advantage of on-going developments in technology.

Ø To improve productivity, timeliness and responsiveness in all aspects of their operations so as to ensure competitiveness and profitability

Ø To involve and develop their employees so that they are qualified and committed to ensure customer satisfaction

Ø This policy shall be implemented by maintaining a Quality Management system in conformance with ISO 9000 international standard

Ø This policy shall ensure that they will continue to be a competitive and successful enterprise

Environmental Policy

Ø Their Policy, which applies to all parts of their organization operating from the Waluj, Chikalthana, Karjan & Baska sites is:

Ø To comply with all the applicable environmental legislations and regulations

Ø To continuously improve their environmental performance to prevent air, water and soil pollution

Ø To continuously reduce waste generated

Ø To continuously reduce the consumption of resources such as water, energy and materials.

Ø To establish and maintain an Environmental Management System according to ISO-14001 (1996)

Ø To train and involve all employees of CFL, towards achieving the objectives derived from this policy

Product Safety and Hygiene Policy

They, Cosmo Films Limited are India's premier export oriented enterprise engaged in the manufacturing of BOPP film to be used for food packaging & other applications.

They are committed to quality in all respects meeting customer requirements and closely monitoring cost.

They shall strive to achieve this through their world-class facilities, dedicated and trained personnel & continuous improvement programmes.

As an important link in the total food chain, they accept their responsibility in processing, monitoring raw material into hygienic and safe products for food packaging.

Being the industry leader they are committed to preserving environment and ecological balance of the surroundings and ensure that they surpass the applicable and statutory environmental standards.

This policy shall be revietheyd periodically for continuing suitability.

Energy Policy

Cosmo shall strive for continuous energy economy through

Ø Formulation of overall energy strategy and targets.

Ø Promoting awareness among employees to encourage participation.

Ø Improved capacity utilization.

Ø Up gradation of process, technology and equipments.

Ø Maximize recovery of waste heat.

Ø Monitor and control energy use through effective energy management system.

Ø Benchmarking performance against best, globally.

Ø Training of employees in the field of energy management.

Awards and Recognition

PFFCASTAR 2005

Awarded to Cosmo films Limited

Recognition of Excellence for Thermal Lamination BOPP/BOPET Film in the Category of Product Development & New Structures Presented at Mumbai on 24th November 2005

ISO 9001: 2000 :- ( Registration Certificate)

The Quality Management System of Cosmo Films Limited has been assessed & found to comply with the requirements of ISO 9001 : 2000

The Quality management System is applicable to design, development, manufacturing of BOPP films by biaxial orientation process & its marketing for various applications

ISO 14001 :- (Registration Certificate)

The Management Systems of Cosmo Films Limited have been assessed by International Certification Limited and found to comply with the requirements of ISO 14001.

Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of

India, duly recognize their center as a premier research laboratory. This is the only center of this nature in

the entire Indian BOPP film industry.

ISO 9001 certified: Joins the elite group of few BOPP film manufacturers in the world.

1998-99: Best BOPP film exporter by Plexconcil. Certificate of export recognition by Government of

Maharashtra

1998: "Highly Recommended" recognition by Montell for innovative product development

1995: Award for best in house R&D efforts from Government of India.

Indiastar, 1994: Excellence in packaging from Indian Institute of Packaging.

Got accredited with American Institute of Baking (AIB) Certification for Safety and Hygiene of Food

related products.

Got best BOPP Exporter award for 1998-99, 1999-2000, 2000-2001.

Cosmo Films Listed in top 19 Indian companies by "Forbes Magazine".

Awarded in Recognition of Excellence for Exicusion Coatable BOPP Film by Paper, Film & Foil

converters' Association.

Global Presence

Their customers are spread all across the globe. It is only due to their valued clientele that they take pride in having a global presence.

HR Approch

Human Resource is the most precious resources for the prosperity of the organization. This is the key resource which differentiate one organization with other. They in Cosmo have fundamental belief in the potential of Human beings.

"Growth & excellence thru People" is their motto.

They have been constantly innovating HR processes to create the climate in company, where every employee is striving from within to excel individually and collectively and thereby contributing in creating world class Business Institution.

As on date they have approximately 400 employees at all over business location. These employees are exposed to various technical, behavioral and managerial training programs to upgrade there skills. Scientific performance appraisal system to ensure constant development of employees as well as fare reward and recognition is in place.

Job rotation and multi-skilling processes are carried out through structured job evaluation and job classification. Business operations are managed by empowered, competent team of professional with structural review mechanism and best corporate governance practices.

Core Values of the company are:

Ø Transparency

Ø Customer Orientation

Ø Innovation

Ø Cost Consciousness

Ø Housekeeping

Ø Fair Business Practices

ISO CERTIFICATION

Presently, they are one among the only few ISO 9001 certified BOPP film manufacturers in the world. The company has been certified by NQA QSR.

Excellent Scoring by The American Institute of Baking for safety and Hygiene of food related products.

IT

They believe Information Technology is strategic tool for excellent customer service and sustainable business growth.

The company has following IT facilities:

Ø In all the plants Enterprise Resource planning (ERP) Package implemented to process the business processes.

Ø Web base application for Customer order management system using XML technology

Ø Web base application for Supplier order Management system using XML technology

Ø Facility is also built into system to exchange the Customer Invoices and Supplier Order in XML format

Ø Company has its on Web server and e-mail facility to communicate effectively.

Ø It has well developed and informative web site which is kept updated for the benefit of the information to the customer, supplier and their business associates.

Press Releases

Cosmo Films Limited, a leading player in BOPP flexible packaging industry has posted a net profit after tax to the tune of Rs. 4.100 millions for the first quarter ending 30^th June 2005 as against Rs. 23.500 millions in the corresponding quarter of previous year.

The decrease in performance has come due to overcapacity in the BOPP Industry – both globally and domestically. Pressures on margins have continued during this quarter. Volatility in raw material and crude oil prices have also affected the operating margins during the quarter. Continuous efforts are on for reducing the operating costs and improving the product mix for better realizations.

Despite over-capacity, company’s export sales have increased to Rs. 335.100 millions as compared to Rs. 265.600 millions during the corresponding quarter of last year.

The company is focusing on the growth of Thermal films worldwide.

The second line for Thermal films has been commissioned as per schedule in the EOU division. A MOU has been signed for distribution of Thermal films in the USA with an experienced and leading company. Major successes have been achieved in several countries and we know believe that we are poised for break through in the largest market in the world for Thermal films – The USA. Order for two more such lines has been placed and the same will be commissioned before March 2006.

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.44.34
UK Pound	1	Rs.87.61
Euro	1	Rs.57.61

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	4
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		52

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