MIRA INFORM REPORT

Report Date :

19.03.2007

IDENTIFICATION DETAILS

Name :	SHANKARA PIPES INDIA PRIVATE LIMITED
Registered Office :	No. 27, II Cross, CSI Compound, Mission Road, Bangalore – 560027, Karnataka
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	13.10.1995
Com. Reg. No.:	08-18990
CIN No.: [Company Identification No.]	U26922KA1995PTC018990
TAN No.: [Tax Deduction & Collection Account No.]	BLRS04318G
PAN No.: [Permanent Account No.]	AACCS9670B
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturers, importers, exporters & dealers in all kinds of Steel, Polymer tubs, Pipes etc

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 900000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well – established company having satisfactory track. Directors are reported as experienced, respectable & having satisfactory means of their own. Their trade relations are fair. General financial position is satisfactory. Payments are correct & as per commitments. The company can be considered normal for business dealings at usual trade terms & conditions.

LOCATIONS

Registered Office :	No. 27, II Cross, CSI Compound, Mission Road, Bangalore – 560027, Karnataka
Tel. No.:	91-80-22228212/22243251
Fax No.:	91-80-22233643
E-Mail :	shankarapipe@satyam.net.in
Area :	1500 Sq. ft
Location :	Rental (Commercial)

DIRECTORS

Name :	Mr. SuKumar Srinivas
Designation :	Managing Director
Date of Birth/Age :	18^th September, 1960
Date of Appointment :	28^th October, 1995
Name :	Mr. C Ravikumar
Designation :	Director
Date of Birth/Age :	01^st May, 1966
Date of Appointment :	15^th September, 2001
Name :	Mr. RSV Shivaprasad
Designation :	Director
Date of Birth/Age :	01^st October, 1957
Date of Appointment :	01^st October, 2002
Name :	Mr. L R Reddy
Designation :	Director
Date of Birth/Age :	15^th July, 1948
Date of Appointment :	01^st October, 2002
Name :	Mr. K G Kashinath
Designation :	Director
Date of Birth/Age :	27^th April, 1956
Date of Appointment :	01^st October, 2002
Name :	Mr. V Devanathan
Designation :	Director
Date of Birth/Age :	25^th January, 1958
Date of Appointment :	01^st October, 2002

KEY EXECUTIVES

Name :	Mr. Murali Srinivasan
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Directors & RelativeS 100%

BUSINESS DETAILS

Line of Business :

Manufacturers, importers, exporters & dealers in all kinds of Steel, Polymer tubs, Pipes etc

GENERAL INFORMATION

No. of Employees :	15
Bankers :	v Citibank, 30, M G Road, Bangalore – 560008, Karnataka v Kotak Mahindra Bank Limited, No. 36 – 38A, Nariman Bhavan, 227, Nariman Point, Mumbai – 400021
Facilities :	--

Banking Relations :	Satisfactory
Auditors :
Name :	K Y Ningoji Rao Chartered Accountant
Address :	Old No. 53, New 9, Sri Sharada Complex, 2^nd Floor, A M Road, Journalist Colony, Bangalore – 560002
Memberships :	Nil
Collaborators :	Nil
Associates/Subsidiaries :	Nil

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs. 10/- Each	Rs. 50.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4503500	Equity Shares	Rs. 10/- Each	Rs. 45.035 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		45.035	45.035	45.040
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		179.054	114.977	68.600
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		224.089	160.012	113.640
LOAN FUNDS
1] Secured Loans		338.843	117.655	110.570
2] Unsecured Loans		8.050	2.032	13.530
TOTAL BORROWING		346.893	119.687	124.100
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		570.982	279.699	237.740
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		108.772	68.944	58.800
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.060	0.060	0.060
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	223.518	199.583	121.460
	Sundry Debtors	556.329	424.057	244.450
	Cash & Bank Balances	9.841	12.995	2.830
	Other Current Assets	1.120	0.857	0.000
	Loans & Advances	39.232	17.912	21.620
Total Current Assets		830.040	655.404	390.360
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	328.511	411.280	211.510
	Provisions	39.504	33.630	0.000
Total Current Liabilities		368.015	444.910	211.510
Net Current Assets		462.025	210.494	178.850
MISCELLANEOUS EXPENSES		0.125	0.201	0.030
TOTAL		570.982	279.699	237.740

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2004
Sales Turnover	1651.650
Other Income	0.000
Total Income	1651.650
Profit/(Loss) Before Tax	62.800
Provision for Taxation	19.290
Profit/(Loss) After Tax	43.510

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	--	--	2.63
Net Profit Margin (PBT/Sales)	(%)	--	--	3.80
Return on Total Assets (PBT/Total Assets}	(%)	--	--	13.98
Return on Investment (ROI) (PBT/Networth)		--	--	0.55
Debt Equity Ratio (Total Liability/Networth)		3.19	3.52	2.95
Current Ratio (Current Asset/Current Liability)		2.25	1.47	1.84

LOCAL AGENCY FURTHER INFORMATION

Name of the company	SHANKARA PIPES INDIA PRIVATE LIMITED
Presented By	Mr. Sukumar Srinivas
1) Date and description of instrument creating the change	Regd. Simple Mortgage deed dated 02.01.2006
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 15.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	Commercial Unit No. 133/2, on the ground floor & commercial unit No. 3A, Known as “Farah Winsford” constructed on the property bearing municipal No. 133 Regd. Sale deed dated 17.11.2005 vide document No. 3740
4) Gist of the terms and conditions and extent and operation of the charge.	The loan shall be secured by first charge of the Kotak Mahindra Bank by a Registered Mortgage over the above property interest @ 9.75% as per the terms and conditions agreed with the bank
5) Name and Address and description of the person entitled to the charge.	Kotak Mahindra Bank Limited, No. 36 – 38A, Nariman Bhavan, 227, Nariman Point, Mumbai – 400021
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

Website Deails :

The Shankara Group is amongst India’s premier and largest distributors of a wide range of steel tubes and pipes. A Rs. 1500 million(US$ 35 million), ISO 9001 Company, with a legacy of 25 years of impeccable service to its customers, its operations span South and West India.

Headquartered in Bangalore, India, this professionally managed company deals primarily in,

• Precision ERW and CDW Tubes
• Closed Structurals Rectangular and Square Hollow Sections
• Galvanized and Black Mild Steel Pipes
• Boiler, Air-Heater and Seamless Tubes
• Metal Sections

Quality is the watchword at Shankara. All its products are standard ISI products and all its principals are ISO companies.

Products :

All their pipes and tubes are standard ISI products. The main principals that they represent are all ISO companies.

They deal in,

• Precision ERW and CDW Tubes
• Closed Structurals Rectangular and Square Hollow Sections (RHS & SHS)
• Galvanized and Black Mild Steel Pipes
• Boiler, Air-Heater & Seamless Tubes

Value Added Services

They have a tube cutting process and cold draw bench. This helps us supply cut-to-length deburred tubes and precision non-standard tubes, as per customer specifications.

An in house laboratory with physical, mechanical and chemical testing facilities is also available.

Distribution Network :

India's largest distribution network: Shankara's pride is its wide, effective and strong Distribution Network across Southern and Western India. Recognized as India's largest and best network for Steel Tubes, they have over 600 dealers/retailers, besides 3000 small and large consumers (actual users) in all their markets.

A large network contributes to reach, speed, cost effectiveness and availability to its consumers, besides being assured of high Quality and value added services all under one roof. This is one of Shankara's biggest strengths.

Their three key divisions channelize the process of distribution more effectively.

The Consumer Division: This division was formed to interact with the consumers directly, understand their requirements, study their applications and guide them to buy the right kind of tubes. The division helps the consumer with the correct quality for the application, selects the tubes for them, tests the tubes and only then supplies it.

The Project Division: This division keeps track of all new and upcoming projects - of all sizes - in the pipeline. They meet the project leads to ascertain requirements and guide them to pick up the right kind of tubes for their projects, keeping in mind the cost effectiveness that must come with volumes. Quality is always at the forefront with Shankara.

The Trade Division: Here their aim is to reach the small end user through their wide dealer network. They do this area wise. A city is divided into several areas and they have their own sub dealers in small towns. As a result the end user gets the benefit of high quality, availability of the best brands, lower costs (since there are no middlemen) and value added services, all within his neighbourhood.

THEIR QUALITY POLICY

"The team at Shankara is committed to provide timely and defect-free products to its customers, within budget, and as per specifications."

At Shankara QUALITY is the watchword. They are an ISO 9001 company and so are all their principals. Their tubes and pipes are ISI standard. At Shankara, a team of professionals who make sure that ISO requirements are always met with manages Quality Systems.

Some of their prestigiuos projects include:

• Ashok Leyland Limited.
• Hindustan Lever Limited.
• B.E.M.L
• ITW Signode India Limited.
• Kirloskar Toyota Limited.
• Larsen & Tourbo Limited. (E.C.C Construction Group)
• National Aeronautical Limited.
• Piaggio Greaves Limited.
• T.V.S Limited.
• The India Cements Limited.
• The Raj Bhavan, Bangalore, Govt. of Karnataka
• SAP Labs, Bangalore
• Indoor Stadium, Bangalore

• Santa Cruz Airport, Mumbai
• Amrutha Institute of Medical Science, Cochin
• Cochin Shipyard Limited., Cochin
• Infosys, Pune
• WIPRO, Chennai
• Spencors, Chennai
• Mangalore Refineries & Petro Chemicals Limited.
• International Cricket Stadium, Hydrabad
• HITEX, Hydrabad
• Indo-African Games Stadium, Hydrabad
• International Airport, Hydrabad
• National Games Stadium, Hydrabad
• Ramoji Film City, Hydrabad

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.44.17
UK Pound	1	Rs.85.58
Euro	1	Rs.58.67

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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 EXPLANATIONS

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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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