MIRA INFORM REPORT

Report Date :

24.01.2007

IDENTIFICATION DETAILS

Correct Name :	KENNAMETAL INDIA LIMITED
Formerly Known As :	KENNAMETAL WIDIA INDIA LIMITED
Registered Office :	8 / 9^th Mile, Tumkur Road, Post Bag 7300, Bangalore – 560 073, Karnataka, India
Country :	India
Financials (as on) :	30.06.2006
Date of Incorporation :	21.09.1964
Com. Reg. No.:	08-1546
TAN No.: [Tax Deduction & Collection Account No.]	BLRK05838A
PAN No.: [Permanent Account No.]	AACCK4472B
Legal Form :	It is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing of Hard Metal Products.

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 :	USD6000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed Multi-National Company having fine track. Available information indicates high financial responsibility of the company. Financial position of the company is good. Business is active. Payments are always correct and as per commitment. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	8 / 9^th Mile, Tumkur Road, Post Bag 7300, Bangalore – 560 073, Karnataka, India
Tel. No.:	91 – 80 – 2839 4321 / 2839 4322 / 2839 4323 / 2839 4324
Fax No.:	91 – 80 – 2839 4708 / 2839 0129 / 2839 4325 / 28397572
E-Mail :	widia@vsnl.com
Website :	http://www.widiaindia.com
Factory 1 :	Patancheru Plant § 34/35 KM, Sangareddy Road, P.O. Muthangi, District Medak - 502 300, Andhra Pradesh Tel. No. : 91-8452-242617 / 242678 / 242617 / 242700 Fax No. : 91-8452-242680 / 242616 E Mail : wilptn@hd2.dot.net.in Bangalore Plant 8 / 9^th Mile, Tumkur Road, Post Bag 7300, Bangalore – 560 073, Karnataka Tel. No. : 91–80–28394321 / 28394322 / 28394323 / 28394324 Fax No. : 91 – 80 – 28394708 / 28390129 / 28394325 E-Mail : widia@vsnl.com Website : http://www.widiaindia.com
Branches :	Located at : Bangalore, Baroda, Bhopal, Mumbai, Kolkata, Chandigarh, Hyderabad, Jamshedpur, Kanpur, Nagpur, New Delhi, Pune, Ranchi and Chennai
Overseas Office :	Located at Malaysia

DIRECTORS

Name :	Mr. M. N. Bhagwat
Designation :	Chairman
Name :	Mr. Kumar Kanetkar
Designation :	Managing Director
Date of Birth/Age :	45 years
Qualification :	B. Com, ACA
Experience :	26 years
Previous Employment :	Tata Consultancy Services- VP and Head Products Business, Manufacturing Practice
Name :	Mr. Rakesh Makhija
Designation :	Director
Name :	Mr. Stanley B. Duzy Jr.
Designation :	Director
Name :	Mr. Philip H. Weihl
Designation :	Director
Name :	Mr. E. B. Desai
Designation :	Director
Name :	Mr. James P McRickard
Designation :	Director
Name :	Mr. Frank P Simpkins
Designation :	Director
Name :	Mr. Bernard C McConnell
Designation :	Director
Name :	Mr Mo Heshmati
Designation :	Director
Name :	Mr Ulrich Krenzer
Designation :	Director

KEY EXECUTIVES

Name :	Mr. B. Anjani Kumar
Designation :	Vice President and CFO
Date of Birth/Age :	52 years
Qualification :	B. Com, B.G.L., ACA
Experience :	28 years
Previous Employment and Designation :	Tecumseh Products- VP-Finance and CFO
Name :	Mr. Gopalji Mehrotra
Designation :	Vice President-Human Resources
Name :	Mr. N. Khorana
Designation :	Vice President-Engineered Products Group Business
Name :	Mr. Praful S. Shende
Designation :	Vice President-Machine Tools Business
Name :	Mr. Rupert B. Watson
Designation :	Vice President-Manufacturing
Name :	Mr. D. Sarathy
Designation :	General Manager-Research, Development and Engineering
Name :	Mr. S. Ramprasad
Designation :	Company Secretary
Name :	Mr Rajashekara Melanta
Designation :	Vice President – Human Resources
Name :	Mr Sumit Tandon
Designation :	Vice President – Engineered Products Group and Energy Business

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	19376013	88.16
OCB’s /NRI	48300	0.22
UTI and Mutual Funds	224464	1.02
Nationalised Banks	2560	0.01
Bodies Corporate	142503	0.65
Public	2178010	9.91
Foreign National	6240	0.003
Trust-Custodian (Special Court A/c. Harshad Mehta Group)	150	0.00
Total	21978240	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Hard Metal Products.

Products :

Item Code No. (ITC Code)	Product Description
82 09	Tungsten Carbide Tips / Inserts
82 07	Interchangeable Tools
84 59	Machine Tools

PRODUCTION STATUS

Particulars	Licensed Capacity	Installed Capacity	Actual Production
Hard metal and hard metal products	240.00 MT	210.00 MT	7923.197 Nos.
			21164 Kgs
Mining tools (Nos)	50000	400000	57239
Special Purpose Machines
Ø Special purpose machines including accessories	200	75	71
Ø Jigs and fixtures (Rs.)	10,000	60,000	57,622

GENERAL INFORMATION

No. of Employees :

Over 1600

Bankers :

Ø Central Bank of India, Kempegowda Road,

Bangalore – 560 009, Karnataka

Ø Corporation Bank, Industrial Finance Branch, No. 1,

Queen’s Road, Bangalore – 560 001, Karnataka

Ø Standard Chartered Bank Limited, Raheja Towers,

26, M. G. Road, Bangalore – 560 001, Karnataka

Ø HDFC Bank Limited

Ø ICICI Bank Limited

Facilities :

Secured Loans

(Figures Rupees in millions)

Loans	As on 30.06.2004
Bank Borrowing (secured by way of hypothecation of inventories and book debts and further secured by second charge on the fixed assets.)	7.331
Finance Leases (secured against assets acquired under lease arrangements)	38.662

Banking Relations :	Good
Auditors :	Price Waterhouse and Company Chartered Accountant
Address :	Mittal Tower, 10^th Floor, “C’ Wing, 47/6, M. G. Road, Bangalore-560001, Karnataka, India
Subsidiaries :	Ø Kennametal South Africa (Pvt) Ltd, South Africa Ø Widia Nederland B.V. Netherlands Ø Kennametal France S.A.S., France Ø Rogers ToolWorks Inc., USA Ø Kennametal (Malaysia) Sdn. Bhd. Malaysia Ø Kennametal Carbide Ø Kennametal Hardpoint (Shanghai) Ltd., China Ø Kennametal (Singapore) Pte. Ltd., Singapore Ø Kennametal Japan Ltd., Japan Ø Hanita Metal Works Ltd., Isarel Ø Kennametal Korea Ltd., Korea Ø Kennametal Australia Pty. Ltd., Australia Ø Kennametal (Thailand) Co. Ltd., Thailand Ø Kennametal Hertel Kesici, Turkey Ø Kennametal GmbH Co. KG, Germany Ø Kennametal Hertel GmbH Co. Kg, Germany Ø Kennametal GmbH Co. KG, Germany Ø Kemmer Prazision Ø Kennametal UK Ø GreenfieldIndustriesIllinois, USA Ø Valenite Inc. USA
Holding Companies :	Ø Metruit A.G. Zug, Switzerland Ø Kennametal Inc, USA – Ultimate Holding Company with effect from 30^th August, 2002 Enterprises Hilding directly or indirectly substantial interest in Metruit A.G. Zug Ø Widia GmbH, Germany Ø KHHolding (DE) GmbH, Germany Ø Kennametal Widia Holdings Inc., USA Ø Kennametal Holdings Europe Inc., USA

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
21,978,240	Equity Shares	Rs 10/- each	Rs. 219.782 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
21,978,240	Equity Shares	Rs 10/- each	Rs. 219.782 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.06.2006 (12 months)	30.06.2005 (12 months)	30.06.2004 (12 months)
SHAREHOLDERS FUNDS
1] Share Capital		219.782	219.800	219.800
2] Reserves & Surplus		1326.093	1639.300	1216.600
NETWORTH		1545.875	1859.100	1436.400
LOAN FUNDS
1] Secured Loans		19.724	29.800	46.000
2] Unsecured Loans		1.417	0.700	0.700
TOTAL BORROWING		21.141	30.500	46.700
TOTAL		1567.016	1889.600	1483.100
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		685.337	607.200	474.200
Capital work-in-progress		54.666	103.600	21.000
INVESTMENT		257.535	623.100	464.200
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	384.782	426.300	471.800
	Sundry Debtors	756.628	581.700	402.400
	Cash & Bank Balances	109.015	171.200	61.600
	Other Current Assets	36.492	0.000	0.000
	Loans & Advances	124.927	241.700	381.400
Total Current Assets		1411.844	1420.900	1317.200
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	737.887	651.600	573.500
	Provisions	104.479	213.600	220.000
Total Current Liabilities		842.366	865.200	793.500
Net Current Assets		569.478	555.700	523.700
TOTAL		1567.016	1889.600	1483.100

PROFIT & LOSS ACCOUNT

PARTICULARS	30.06.2006 (12 months)	30.06.2005 (12 months)	30.06.2004 (12 months)
Sales Turnover [including other income]	3336.666	3290.400	2775.700
Profit/(Loss) Before Tax	682.705	724.300	295.100
Provision for Taxation	244.124	226.400	46.700
Profit/(Loss) After Tax	438.581	497.900	248.400
Total Expenditure	2691.678	2570.000	2480.600

QUARTERLY

PARTICULARS	30.09.2006 1^st Qtr
Sales Turnover	84.79
Other Income	5.64
Total Income	90.43
Total Expenditure	74.38
Operating Profit	16.05
Interest	0.13
Gross Profit	15.92
Depreciation	3.15
Tax	5.48
Reported PAT	8.30

200609 Quarter 1 --------------- Notes; 1. The un-audited financial results for the quarter ended Septmeber 30, 2006 and Limited Review report of the Statutory auditors thereon were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on October 31, 2006. 2. During the quarter ended September 30, 2006 three investor complaints were received and redressed. There were no complaints pending both at the beginning and end of the quarter. 3. Previous year's figures have been regrouped wherever necessary to conform to current year's classification.

KEY RATIOS

PARTICULARS	30.06.2006 (12 months)	30.06.2005 (12 months)	30.06.2004 (12 months)
Debt Equity Ratio	0.01	0.02	0.11
Long Term Debt Equity Ratio	0.01	0.02	0.10
Current Ratio	1.63	1.64	1.98
TURNOVER RATIOS
Fixed Assets	2.24	2.18	1.79
Inventory	8.95	6.96	5.24
Debtors	5.43	6.35	5.33
Interest Cover Ratio	83.27	59.95	17.19
Operating Profit Margin (%)	22.49	23.85	17.52
Profit Before Interest and Tax Margin (%)	19.03	20.54	13.63
Cash Profit Margin (%)	15.53	17.19	14.66
Adjusted Net Profit Margin (%)	12.08	13.88	10.77
Return on Capital Employed (%)	40.01	38.04	23.87
Return on Net Worth (%)	25.76	26.31	20.90

STOCK PRICES

Face Value	Rs.10/-
High	Rs.461.50
Low	Rs.493.50

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 21^st September, 1964 at Bangalore in Karnataka having Company Registration No. 1546.

The company was promoted by Meturit, Switzerland, associates of the Fried Krupp Widia Fabrik, unit of Krupp Group, Germany and Sak Industries, Switzerland. The company’s collaborator Meturit, Switzerland holds 51% stake. The company manufactures hard metal products, mining tools, special-purpose machines, metal castings, formings, jigs and fixtures.

It exports its products to Japan, Germany and the south-east Asian countries.

The company's wholly owned subsidiary Widaroc (India) was merged with the company with effect from Jan'95. It has also introduced several new state of the art products. Some of them are, new generation milling cutters, new special solid carbide tools, new generation coated inserts, warming forging tools for bearing industry, cold forgings dies for big auto components, etc. 

During 1999-2000, the company sub-divided its equity share face value of Rs 100 each into 10 equity shares of Rs 10 each. It has also allotted bonus shares in the ratio of 1:1. The company is planning to upgrade the Oil Well Rock Roller Bits in the current year. 

 The company is planning to sell its Mining and Construction Tools business for a cash consideration of Rs.649 millions to Sandvik Smith A.B/ its subsidiary. This plan is subject to the approval of shareholders.

Company Profile

In the area of exports, the growth was achieved due to increased sales to Germany and Japan and part of the South-East Asian region. There was a significant increase in the export of tool holders. The cement milling inserts introduced were well in the market and also contributed to the increased export sales. The range of mining tools was also widened. In 1995, the export sales grew by nearly 30 % to reach Rs. 186.200 millions. The company’s wholly owned subsidiary Widaroc (India) has been merged with the company with effect from January, 1995.

It has also introduced several new state of the art products. Some of them are, new generation milling cutters, new special solid carbide tools, new generation coated inserts, warming forging tools for bearing industry, cold forging dies for big auto components, etc.

During the year 2000, the company sub-divided its equity share face value of Rs. 100/- each into 10 equity shares of Rs. 10/- each. It has also allotted bonus shares in the ratio of 1:1. The company is planning to upgrade the Oil Well Rock Roller Bits in the current year.

The company is a subsidiary of Widia GmbH of Germany, which is now part of Milacron of USA and is a largest producer of tungsten carbide tools in India. They are used as cutting inserts in a diverse range of machine tools and drilling equipment. The company has a market share of 43% in the domestic market. The main user of these tools in the automobile, capital goods, mining and construction industry. The automobile sector itself accounts for around 45% of the aggregate demand in terms of value.

The company receives good technical support from its parent company, Widia GmbH Essen, Germany. Milacron is one of the leading players in hard cutting materials. Globally there are very few suppliers for critical ores used in manufacture of carbide tools. As a result, manufacturers are vulnerable to demand supply mismatches and currency fluctuations on the raw materials procurement front. However, the inherent risks are partly mitigated by exports to the Milacron group worldwide, which procures 10% of the company’s sales. The company also benefits from the strong R&D capabilities of its parent in developing newer products.

Biodata

Kenmetal Widia India Ltd.(formerly Widia India Ltd), promoted by Meturit, Switzerland, associates of the Fried Krupp Widia Fabrik unit of Krupp group, Germany, and Sak Industries, Switzerland. The company's collaborator Meturit, Switzerland, holds 51% stake. The company incorporated in 1964 manufactures hard metal products, mining tools, special-purpose machines, metal castings, formings, jigs and fixtures. It exports its products to Japan, Germany and the south-east Asian countries. The company received the ISO 9001 certification in 1992. In 1994, the company was taken over by Cincinnati Milacron, US. 

The company's wholly owned subsidiary Widaroc (India) was merged with the company with effect from Jan'95.It has also introduced several new state of the art products. Some of them are, new generation milling cutters, new special solid carbide tools, new generation coated inserts, warming forging tools for bearing industry, cold forgings dies for big auto components, etc. 

During 1999-2000, the company sub-divided its equity share face value of Rs 100 each into 10 equity shares of Rs 10 each. It has also allotted bonus shares in the ratio of 1:1. The company is planning to upgrade the Oil Well Rock Roller Bits in the current year. 

The company is planning to sell its Mining and Construction Tools business for a cash consideration of Rs.6490 millions to Sandvik Smith A.B/ its subsidiary. This plan is subject to the approval of shareholders.

In the year 2005, the name of the company was changed from Kennametal Widia India Ltd to Kennametal India Limited. 

 During 2004-05, the company has installed the Hard metal and hard metal products with the capacity of 210 MT and the company expanded its installed the capacity of Special purpose machines including accessories by 50 Nos. The installed capacity of Special purpose machines including accessories has increased to 125 Nos.

Dividend

During the year, the Board of Directors declared and paid an Interim Dividend of Rs. 30/- per equity share

on 21,978,240 equity shares of Rs. 10/- each. The Board of Directors have decided to treat the same as final dividend and therefore no additional dividend is recommended for the year 2005-2006.

Operating Results

On the back of the previous year of exceptional growth in sales, the sales and other income of your Company grew further by 16% during the year under review, i.e. from Rs. 2,880 million to Rs. 3,336 million.

During the year under review, raw material prices were at levels significantly higher than in the previous year. With the market forces limiting the selling prices, the high levels of raw material prices had an impact on margins. As a result, the profit before tax and exceptional items was marginally lower at Rs.645

million as against the previous year Rs. 664 million.

Change of Name

Consequent to the approval of the Members in the 40th Annual General Meeting held on October 28,2005, the name of the Company was changed from Kennametal Widia India Limited to Kennametal India Limited with effect from December 23, 2005.

Fixed Asstes

• Land
• Building
• Plant and Machinery

Ø Finance Lease

Ø Computer Hardware

Ø Others

• Furniture and Fixtures

Ø Furniture and Fixtures

Ø Lease Hold Improvements

• Office Equipments
• Vehicles

RESEARCH & DEVELOPMENT (R &D) 

The research and development focus is on material development, primarily on hard metal, coatings and tool engineering. There is an increased thrust to tailor an appropriate product range to suit the growing SME segment both for the CNC lathes and Machining Center applications. R&D efforts are continuing towards product development to meet the enhanced productivity needs of the Indian manufacturing industry, product and hey processes rationalization and continuous product up gradation. 

The Company will continue to worn in close co-ordination with Kennametal in the USA and Europe to bring the state-of-the-art technology to India. 

MANAGEMENT DISCUSSION & ANALYSIS REPORT 

 The information and opinion in this section consists of certain forward-looking statements, which the management believes to be true to the best of its knowledge at the time of its presentation. The management shall not be liable for any, loss, which may arise as a result of any action taken on the basis of the information contained herein. the information contained herein may not be disclosed, reproduced, or used in whole or in part for any purpose or furnished to any other persons) without the express prior written permission of the Company. 

 The following discussion and analysis should be read in conjunction with the Company's financial statements: 

 INDUSTRY STRUCTURE AND DEVELOPMENTS/ OPPORTUNITIES & THREATS 

 The Company is a leading manufacturer of hard metal, hard metal products and machine tools and caters to the needs of auto and auto related industries, defence, general engineering, etc., and seeks to provide total manufacturing solutions to its customers. 

 The year witnessed a robust growth of 8.8% in the manufacturing sector, which is the highest growth rate in the last 8 years. In most of the industries served by your Company, the growth rate was in the range of 20 to 25%. 

 The manufacturing sector in India has made tremendous strides, especially in the last few years to compete in the global markets and also in India against global competition. The focused approach on quality, cost and delivery (QCD) has enabled the sector to become a potential global manufacturing hub in many key areas of interest to the Company. Besides exploiting market growth, the Company has expanded its product portfolio through its own R&D efforts and through imports from the parent Company to improve its market share. 

 The Company had initiated several Lean manufacturing initiatives last year to strengthen its ability to meet the expectations of customers on QCD. During the year under review, Lean programs were continued with an increased focus in the Company's manufacturing units. Lean initiatives are also being implemented across the organization to include several non-manufacturing functions in their scope. These efforts have enabled the Company to achieve higher output, improved productivity and reduced inventory. 

 The Company has upgraded its erstwhile ERP package and the upgrade became functional in December 2004. The full benefits of this upgrade would be utilized from the coming fiscal year onwards. The new system has enabled the Company to integrate its accounting systems and management information services with Kennametal Inc., the parent organization, and derive the full benefits of its Global Information Technology functions. 

 The served industry is cyclical in nature, which in the past has not only impacted growth rates but also led to stagnation. The annual monsoon also has a significant impact on the Indian economy, which in turn affects the manufacturing sector. Today however, by and large, the Industry is better equipped to address these threats. The Company's increased focus on QCD through Lean and TPM, excellence in technology and value added services would help us to maintain its leadership position. 

 The main threat faced by the Company in the coming year is from higher raw material costs. This threat is being addressed by the Company through its unrelenting focus on lean, cost control and customer satisfaction. 

 SEGMENT WISE PERFORMANCE: 

 The business of your Company is organized and managed in two segments. 

 (a) Hard metal and hard metal products 

 (b) Machine Tools 

 The segmentation is based on the nature of products and services provided by each segment representing a strategic business that offers different products and services, serving different markets and also in line with the business risks attached to the respective segments. 

 Apart from the above two primary business segments, the secondary segmental reporting is on the basis of the geographical locations of the customers, viz., domestic and international. Common allocable costs are allotted to each segment to the extent of services utilized and activities involved. The details of segment wise results are given as part of the annual accounts. 

 COMPANY OUTLOOK 

 The macro economic outlook for the country is positive and the current high growth rates are expected to be sustained in the near-term. The monsoon, though late in arriving, is expected to be normal and the inflation seems to be under control. The only major concern for the economy is of high and rising oil prices and it is hoped that the Government will appropriately manage its impact. Another requirement is that the Government continues with its economic reforms, which will further spur the economy. 

 The favorable macro economic outlook and also sustained demand growth of the served industry augurs generally well for the Company both in near and medium term and focus will be on recovering raw material cost increases, meeting customer expectations and engineering their competitive edge. There continue to be concerns however, about the sustainability of the economy's growth, in the absence of a very significant upgrade of the infrastructure in the country, without further loss of time.

Press Releases

Kennametal Widia to double sales in 3-5 years

Our Bureau

Bangalore , Feb. 2

THE world's second largest metals company, Kennametal Inc, expects its Indian subsidiary, Kennametal Widia India Ltd, to "double" its sales in three to five years, Kennametal's Chairman, Chief Executive officer, Mr Markos I. Tambakeras said.

Kennametal will also invest Rs 500 millions over the next 12-18 months in its Indian arm to add to shop floor capabilities, increase marketing reach and IT infrastructure, he added.

Currently, India accounts for Kennametal's 2.5 per cent of global sales. Kennametal sees its revenue-mix shift in favour of Asia going forward as the region is likely to contribute 20 per cent to the company's top line, from the current level of 10 per cent. North America, which currently contributes 50 per cent of Kennametal's sales, is likely to dip to 40 per cent, while Europe is likely to gain 10 per cent from the present 40 per cent share, Mr Tambakeras said.

India and China, "the twin pillar strategy" in Asia for Kennametal, are likely to drive the growth of the company in the region, Mr Tambakeras said. The growth of Indian operations are likely to be fuelled by the manufacturing sector, which has shown strong signs of recovery and as exports pick up with Kennametal Widia is expected to operate as a sourcing hub for some of the products for Kennametal's global requirements.

"Relative cost structure is very important," Mr Tambakeras said, adding that the cost advantage on using India as a sourcing hub would help the parent's business model.

Kennametal also plans to increase engineering capabilities in its Indian subsidiary and set up shared services enterprise here to deal with integrated purchasing of raw materials and supplies and other back-office functions for the company's global operations. The company also plans to augment its development engineering processes in India as more research projects are shipped in.

Kennametal Inc had invested Rs 500 millions in the Indian outfit over last 16 months, since it bought out Widia and initiated an integration process that saw some rightsizing of the company's workforce in India.

For the last quarter ending December in the current financial year, Kennametal Widia India reported a net loss of Rs 20.1 millions as it took a charge of Rs 133.7 millions towards voluntary separation. However, the company expects to report positive net profit for the current financial year as its net earnings for the first six months stands at Rs 46.00 millions.

The company is in trade terms with :

Ø Srinivasa Advanced Engineering

Ø Tool Engineering Corporation

The company has been accredited with ISO 9001 Certification.

The company’s fixed assets of important value include land (freehold and leasehold), buildings, plant & machinery, furniture & fixtures, office equipments and vehicles.

Memberships

Ø Confederation of India Industry

This profit was realized along with other significant achievements such as :

Ø Launch of Kennametal University to bring the sciences of metalworking and other manufacturing processes into India for the benefit of Indian manufacturing.

Ø Consolidation of Metal forming business, now called Engineered Products Group (EPG) into Bangalore.

Ø Up-gradation of facilities and infrastructure in Bangalore.

Ø Historically the highest levels of investments in terms of time and money in the training and development of the company’s most important asset-its people.

Ø The highest level of investments in projects for environment, health and safety for the employees.

Ø Machine tools business winning the largest single order in the history of the company, worth Rs. 180 millions.

Ø Moving by 50 places to 245^th position in the list of 500 largest companies in India by market capitalization.

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.44.24
UK Pound	1	Rs.86.95
Euro	1	Rs.57.33

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	YES
--LISTED	YES/NO	YES
--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

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