MIRA INFORM REPORT

Report Date :

23.03.2007

IDENTIFICATION DETAILS

Name :	WEST COAST PAPER MILLS LIMITED
Registered Office :	Bangur Nagar, Dandeli – 581 325, Uttara Kannada District, Karnataka
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	18.08.1970
Com. Reg. No.:	1936
CIN No.: [Company Identification No.]	U02101KA1970PLC001936
TAN No.: [Tax Deduction & Collection Account No.]	BLRT03385E
PAN No.: [Permanent Account No.]	AAACT4179N
Legal Form :	A Closely held Public Limited Liability Company
Line of Business :	Manufacturers of Writing, Printing and Packaging Paper.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 7250000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. 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 Office :	Bangur Nagar, Dandeli – 581 325, Uttara Kannada District, Karnataka, India.
Tel. No.:	91-838-2331391-395 ( 5 Lines)
Fax No.:	91-838-2331225
E-Mail :	1. info@westcoastpaper.com 2. sales@westcoastpaper.com 3. co.sec@westcoastpaper.com
Website :	http://www.westcoastpaper.com
Corporate Office :	Chandrakiran 4th Floor, 10-A, Kasturba Road, Bangalore - 560 001
Tel. No.:	91-80- 22231828 to 1835, & 080-4112001 to2006
Fax No.:	91-80 -22241916 / 22231838
E-Mail :	liaison.ho@westcoastpaper.com
Zonal Offices :	Ø Shreeniwas House, Hazarimal Somani Marg, Mumbai – 400 001, Maharashtra Tel. No. 91-22-22070041 / 22079101 / 22070958 Ø 12/13, Kanakasri Nagar, Off. Cathedral Road, Chennai - 600 086, Tamilnadu Ø Vishnu Bhawan, 5, Ansari Road, Daryaganj, New Delhi - 110 002 Ø 3, Pretoria Street, 2^nd Floor, Kolkata - 700 071, West Bengal, Kolkata
Location :
Factory 1 :	Paper & Paper Board and Duplex Board: Bangur Nagar, Dandeli – 581 325, Uttara Kannada District, Karnataka
Tel. No.:	91-8383-2289691 / 95
Fax No.:	91-8383-289225
Factory 2 :	Telecom Cable Plant Sudarshan Telecom, Plot No. 386/387 KIADB, Electronic City Hebbal, Industrial Area, Mysore – 570 016, Karnataka
Branches :	Dendali North, Kanora District, Karnataka Also Located at : Mumbai Chennai Kolkata New Delhi Mysore
Cable Unit :	Sudarshan Telecom Cable Unit : Sudarshan Telecom, Plot No.386/387 KIADB, Electronic City Hebbal, Industrial Area, Mysore - 570 016
Tel. No.:	91-821-2404060
Fax No.:	91-821-2404061 / 2404062
E-Mail :	sales@sudarshantelecom.com
Website :	www.sudarshantelecom.com

DIRECTORS

Name :	Mr. S. K. Bangur
Designation :	Chairman
Name :	Mrs. Shashi Devi Bangur
Designation :	Director
Name :	Mr. V. N. Somani
Designation :	Director
Name :	Mr. P. N. Kapadia
Designation :	Director
Name :	Lt. Gen. (Retd.) K. S. Brar
Designation :	Director
Name :	Mr. Bodhiswar Rai
Designation :	Director
Name :	Mr. C. K. Somani
Designation :	Director
Name :	Mr. K. L. Chandak
Designation :	Executive Director
Age :	57 years
Qualification :	B.Com., F.C.A.
Experience :	31 years
Date of Appointment :	18.12.1971
Name :	Mr. R. N. Modi
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Ratan Navlakha
Designation :	Company Secretary
	Management
	Paper and Duplex Board Division, Dandeli :-
Name :	Mr. V. D. Bajaj
Designation :	President (Corporate)
Name :	Mr. B. S. Mundra
Designation :	President (Technical)
Name :	Mr. J. S. Sanwal
Designation :	Joint President (Operations)
Name :	Mr. B. N. Asopa
Designation :	Vice President (Commercial)
Name :	Mr. Ratan Navlakha
Designation :	Vice President (Finance)
	Telecom Cable Division, Mysore, Karnataka :-
Name :	Mr. V. Bangur
Designation :	Chief Executive Officer
Name :	Mr. A. Tanwani
Designation :	Vice President (Works)

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	4626179	51.74
Mutual Funds & UTI	320	--
Banks, Financial Institutions and Insurance Companies	430676	4.82
Private Corporate Bodies	1191673	13.33
Indian Public	2662952	29.78
NRIs/OCBs	26470	0.30
Foreign Nationals	2410	0.03
Total	8940680	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Writing, Printing and Packaging Paper.

Products :

Generic Names of the Principal Products / Services of the Company are:-

Item Code No. (ITC Code)	Product Description
480200.00	Uncoated Paper and Paper Boards used for writing and printing
480500.00	Other Uncoated Paper and Paper Boards and Paper Boards in Sheets or Rolls
900100.00	Optical Fibre Cables

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Paper/Paper Board & Multilayer Board	M.T.	163750	176221
Optical Fibre Cables	Km	83500	6303
JFTC	Ckm.	1542000	512170
Wind Mills	M.W / Kwh	1.75	1966941

GENERAL INFORMATION

No. of Employees :

About 1500

Bankers :

Ø Central Bank of India, Uttara Kannada District, Karnataka

Ø Oriental Bank of Commerce, Uttara Kannada District, Karnataka

Ø State Bank of Mysore, Uttara Kannada District, Karnataka

Ø Syndicate Bank, Uttara Kannada District, Karnataka

Facilities :

Secured Loans (Rs. In millions) :

Working Capital Facilities from Banks	347.255
Term Loans
ICICI Bank Limited	223.000
IDBI Bank Limited	1.000
Bank of Baroda	98.195
Total	669.500

Unsecured Loans :

Trade Deposits	0.200
Interest Accrued and due on Trade Deposits	1.200
Interest free loan sales tax Deferral Scheme	8720.930
Total	871.142

Banking Relations :	Satisfactory
Auditors :
Name :	Ø Baltliboi & Purohit Chartered Accountants cost auditors Ø Mr. S. Sankaranarayanan Chartered Accountants
Associates/Subsidiaries :	Associates v Fort Gloster Industries Limited, Kolkata, West Bengal v Shree Digvijay Cement Company Limited v Digvijay Investments Limited v Crest Cables Limited v Speciality Coatings & Laminations Limited v Digvijay Finlease Limited Subsidiaries v Speciality Coatings & Laminations Limited, Gurgaon, Haryana (SPCL) v Wescom International Fze, Sharjah, UAE (Wescom)

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
30000000	Equity Shares	Rs.10/- each	Rs.300.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8940680	Equity Shares	Rs.10/- each	Rs.89.407 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		89.407	89.407	89.400
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1724.631	1557.256	1403.600
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1814.038	1646.663	1493.000
LOAN FUNDS
1] Secured Loans		669.500	1106.671	1019.600
2] Unsecured Loans		871.142	998.595	739.000
TOTAL BORROWING		1540.642	2105.266	1758.600
DEFERRED TAX LIABILITIES		410.312	437.872	0.000
Present Value of Lease		118.111	186.936	0.000
TOTAL		3883.103	4376.737	3251.600
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2273.830	2374.339	2680.200
Capital work-in-progress		1.073	59.859	8.800
ASSETS TAKEN ON LEASE [Net Block]		118.111	186.936	0.000
INVESTMENT		460.464	447.499	492.600
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1121.467	1381.019	958.100
	Sundry Debtors	384.056	399.630	400.900
	Cash & Bank Balances	145.936	59.155	58.400
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	439.683	444.528	301.900
Total Current Assets		2091.142	2284.332	1719.300
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1061.517	976.228	1548.400
	Provisions			100.900
Total Current Liabilities		1061.517	976.228	1649.300
Net Current Assets		1029.625	1308.104	70.000
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3883.103	4376.737	3251.600

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		5951.515	5498.964	4918.400
Other Income		158.685	45.752	72.100
Total Income		6110.200	5544.716	4990.500
Profit/(Loss) Before Tax		322.734	375.645	436.800
Provision for Taxation		2.440	69.035	152.400
Profit/(Loss) After Tax		320.294	306.610	284.400
Total Earnings		214.979	346.290	NA
Imports :
	Raw Materials	375.017	192.482	NA
	Stores & Spares	38.459	68.284	NA
	Capital Goods	33.399	22.407	NA
Total Imports		446.875	283.173	NA
Expenditures :
	Cost of Goods Sold
	Manufacturing Expenses	1732.283	1662.684	919.000
	Administrative Expenses	360.602	335.854	303.200
	Raw Material Consumed	2009.079	1761.309	1351.600
	Miscellaneous Expenses	NA	NA	70.900
	Salaries, Wages, Bonus, etc.	NA	NA	457.500
	Payment to Auditors	450.994	438.239	NA
	Interest	94.728	86.088	NA
	Insurance Expenses	NA	NA	32.000
	Power & Fuel	NA	NA	627.000
	Depreciation & Amortization	369.508	189.236	168.900
	Other Expenditure	770.272	695.661	623.600
Total Expenditure		5787.466	5169.071	4553.700

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Sales Turnover	1280.300	1409.000	1348.400
Other Income	5.500	13.400	22.400
Total Income	1285.800	1422.400	1370.800
Total Expenditure	1046.800	1174.600	1119.800
Operating Profit	239.000	247.800	251.000
Interest	17.100	13.000	14.600
Gross Profit	221.900	234.800	236.400
Depreciation	52.500	52.500	52.500
Tax	19.800	21.100	21.300
Reported PAT	149.600	161.200	162.600

200606 Quarter 1

Notes:

EPS is basic and diluted. 1. The Board of Directors have recommended payment of Dividend @ Rs. 15 per share for 2005-06. 2. The Company has changed method of calculating depreciation for Duplex Board machines from Straight Line to Written Down Value method due to technical obsolescence and consequently extra depreciation of Rs. 1780.06 lakhs (including Rs. 1556.52 lakhs for earlier years) has been provided in Audited Accounts for 2005-06. This has resulted into variation under the heads viz., Depreciation, Taxes and Net Profit as compared financial results for the said year. 3. Provision for Deferred Tax will be made in the audited accounts. 4. Number of Investor Complaints at the beginning of the quarter - 1; Number of Complaints received during the quarter - 7; Number of Complaints disposed off during the quarter - 7; Number of Complaints at the end of the quarter - 1. 5. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting held on 28th July, 2006.

200609 Quarter 2

Notes:

EPS is Basic & Diluted Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter 01 Complaints Received during the quarter 05 Complaints disposed off during the quarter 05 Complaints unresolved at the end of the quarter 01 1.The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting held on October 31, 2006. 2.Provision for deferred tax will be made in the audited accounts.

200612 Quarter 3

Notes

Expenditure Includes (Increase)/Decrease in stock Rs 7.821 million Consumption of Raw Materials Rs 488.260 million Staff Cost Rs 107.822 million Other Expenditure Rs 515.903 million Tax Indicates Provision for Current Tax (including Fringe Benefit Tax) EPS is Basic & Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter 01 Complaints Received during the quarter 01 Complaints disposed off during the quarter 02 Complaints unresolved at the end of the quarter Nil 1. Provision for Deferred Tax will be made in the audited accounts. 2. The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting held on January 31, 2007.

KEY RATIOS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Debt-Equity Ratio	1.14	1.29	1.11
Long Term Debt-Equity Ratio	0.90	0.96	0.74
Current Ratio	1.17	0.98	0.81
TURNOVER RATIOS
Fixed Assets	1.32	1.19	1.21
Inventory	4.85	4.56	5.20
Debtors	15.49	13.33	12.22
Interest Cover Ratio	3.47	5.36	14.65
Operating Profit Margin(%)	11.50	12.20	12.97
Profit Before Interest And Tax Margin(%)	5.41	8.66	9.53
Cash Profit Margin(%)	10.04	9.30	9.22
Adjusted Net Profit Margin(%)	3.95	5.75	5.78
Return On Capital Employed(%)	8.86	12.84	15.45
Return On Net Worth(%)	13.84	19.53	19.78

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.(0.01)
Low	Rs.(0.01)

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 25^th March, 1955 at Dandeli in Karnataka State having Company Registration Number 1936.

The company, belonging to the Bangur group, is managed by Chairman S. K. Bangur. The company came out with a Rs. 533 millions right issue at a premium of Rs. 30/- in October, 1991 to part finance a modernisation / renovation programme for technology upgradation, diversification and energy conservataion.

BUSINESS

The company is engaged in manufacturing and selling of uncoated paper and paperboards used for writing and printing, paperboards sheets or rolls and optical fibre cables.

The company’s paper mill – the product mix includes writing, printing and packing paper was commissioned with an installed capacity of 18000 tonnes p.a. at Dandeli in the Uttar Kannada district of Karnataka in 1959. Today it has an installed capacity of 1,57,750 tonnes p.a. The country is presently engaged in rasing this installed capacity to 1,63,750 tpa by the end of 2002-03.

It has diversified into the production of OFC in 1996 and JFTC in 2001 through Sudarshan Telecom, its Mysore based division. The OFC plant’s installed capacity is being raised to 42000 KM p.a. at cost of Rs. 122.500 millions while the JFTC plant possesses and annual installed capacity of 1.542 millions CKM.

The company set up six windmills with an installed capacity of 1.75 MW in TN and the majority of this power purchased by TNEB. Expansion, Modernisation and Diversification Programme for the Paper Division at Dandeli has been taken up with a cost of Rs. 214.500 millions (of which 65% had been completed by the end of 2001-02). In 2000-2001 the company has been accredited with ISO 9001 Certification from Det Norske Veritas, The Netherlands.

During last quarter of 2001-02 the new 33000 TPA Duplex Board Machine was commissioned by the company and the company looks forward to increase the market share in the duplex board segment in the near future. The company is taking necessary steps for setting up 1250 sugar mill with co-generation plant of 7.5 MW at Kesoralli village, Haliyal Taluka. The total project cost is Rs. 480 millions and is expected to be commissioned for the sugar season 2004.

Performance

The performance of the Company during the year under review has been satisfactory compared to previous year

due to increase in the production, sales, profitability, apart from process efficiencies. The stabilisation in the working of rebuilt paper machine No.I, coupled with reduced downtime contributed to increased production and sales. Further, the higher sales realisation, VAT set off on inputs and performance efficiency not only contributed in absorbing the increase in the input costs, but also added to the bottom line of the Company. But for the hike in the rates of raw materials (wood), petroleum products, chemicals and dyes and adverse exchange rate fluctuation, the working results would have looked still brighter.

The Company had taken effective anticipatory measures to cut the costs by commissioning various equipments at an outlay of Rs.214.5 millions the partial benefits of the same were derived during the year itself, which enabled it

in containing the increase in cost of production. Apart from the prudent and timely investment in plant and equipments yielding the envisaged increase in production, discreet management of working capital has also brought in the desired results.

The interest charges are inclusive of foreign exchange rate difference of Rs. 14.9 millions due to Rupee depreciation; otherwise the net interest is lower by Rs.12 millions due to better management of working capital, which has contributed to reduction in the borrowing by Rs.683.9 millions.

Overcoming the increase in the input costs, the Company has posted the highest ever gross profit of Rs.692.2 millions as against Rs.564.9 millions in the previous year i.e., increased by Rs.127.3 millions – 23 per cent. However, the net profit increased by four per cent from Rs. 306.6 millions to Rs.320.3 Millions, i.e., by Rs.13.7 Million due to higher provision of depreciation by Rs.178 millions for Duplex Board Division.

The working of Cable Division was, however, affected, even though there was increase in the production and sale

of JFT Cable, due to drop in the production of OF Cable coupled with lower sales realisation.

Divisionwise performance

Paper and duplex board division

The production of paper, paperboard and duplex board increased from 1,73,070 MT in 2004-05 to 1,76,221 MT in 2005-06. The plant is now being operated at rated capacity.

Correspondingly with the increase in production, the sale of paper, paperboard and duplex board have improved from 1,68,315 MT worth Rs. 4965.7 millions in 2004-05 to 1,80,397 MT valued at Rs.5553.5 millions in 2005-06 (both inclusive of excise duty), an increase of Rs.587.8 millions by 12 per cent.

Current year's prospects

Production of paper, paperboard and duplex board in the first three months of current year was 43589 MT as against 43753 MT in the previous year. The production of OFC cable in the first three months increased from 1023 KM in 2005-06 to 1637 KM in 2006-07, whereas JFT Cable production declined from 99038 CKtn in 2005-06 to 85370 CKm in the same period of 2006-07.

However, barring unforeseen circumstances, the bottom line of the Company during the current year is likely to improve further due to the following factors:-

The Government of India has reduced excise duty from 16 per cent to 12 per cent ad valorem on paper and paperboard, with effect from 1st March 2006 in order to encourage capacity addition.

The sale prices of paper and duplex board have been increased during the current year which has been absorbed by the market.

The commissioning of 15.5 MW turbine and other equipments i.e., Disc Filters, Blow Heat Recovery and Steam Condensate Recovery System for digesters are giving the desired benefits and same will be reflected for the full year in 2006-07 as against partial benefit in the previous year.

Cable division - Mysore

Optical Fibre Cable :

The production and sales during the year under review were 6303 KMs and 6593 KMs, as against 8090 KMs and 7774 Kms, respectively, in the previous year. The sale in terms of value amounted to Rs.154.4 millions as against Rs.177.6 millions (both inclusive of excise duty) during the previous year.

J. F.T.C. PLANT:

The production and sales during the year under review were 512170 CKm and 525502 CKm as against 275846 CKms and 264438 CKms, respectively, in the previous year.

The sale in terms of value amounted to Rs.355.4 millions as against Rs.184.9 millions (both inclusive of excise duty) in the

same period of preceding year.

Expansion programme

In the present era of globalisation along with projected and sustainable growth of the Industry, development-cuminduction of energy efficient technology is the need of the day. The development that meets the needs of the present without compromising ability, needs and expectations of future generation shall become the viable bench mark for a sustained growth. Constant efforts are to be made with efficient fiber and energy management system to further strengthen and usher in the realm of sustainable operations of the industry.

The survival and healthy growth of the Indian Paper Industry solely depends on matching with the global capacities, operational efficiency and stringent quality standards. The robustness and optimal size of the production processes shall be the primary determinant for modernisation and expansion programme. The growth in paper and paperboard companies is more or less directly proportional to the country's GDP even with the advent of modern world of electronic communication.

With this vision and looking to the availability of raw material in future, the Company has embarked upon an expansion and modernization programme with an outlay of Rs. 11000 millions for increased production facilities in its existing mills at Dandeli with main emphasis on technology up-gradation, improvement in quality, reduction in cost of production and manufacturing of value added products. The capacity of the plant shall be increased from present production by 1,26,000 TPA.

A technical team of the Company has visited a few European countries to see the facilities in the world-class pulp and paper manufacturing firms to get the updated technical information on new technologies adopted by them as well as their present operational performance.

The similar technologies for pulping and paper making are also being adopted by us which makes the above expansion programme a viable proposal because of reduction in cost and increase in volume of production. This has become the guiding force to take a suitable action in the selection of equipments.

The Detailed Project Report (DPR) and Rapid Environmental Impact Assessment study (REIA) Report are under

preparation by a consultant and on receipt of the same applications will be submitted to the State Government and other authorities for all the requisite clearances to implement the project. As per the present status, the Company is in the process of finalising the orders for main equipments by December, 2006 and the entire expansion programme will be implemented within a period of next three years.

The programme will be funded by term loans of Rs.72500 millions from banks and institutions and Equity / Internal accruals of Rs.3750 Millions, totaling to Rs.11000 Millions.

The expansion programme envisaged by the Company broadly consists of installation of the following:

Pulp Mill

1 No. chipper with around 80-100 TPH capacity alongwith mechanized feeding, efficient chip screening, conveying system etc. to meet additional chips requirement

2 Nos. chip silos with the overall storage capacity of around 16 hours chips requirement • State-of-the-art technology based 800 TPD BD unbleach pulp capacity cooking system which will reduce specific steam, power consumption and variation in pulp quality

725 TPD BD bleached pulp capacity brown stock washing, screening and ECF sequence/ozone bleaching system alongwith oxygen delignification facility to meet CREP requirement with enhanced production capacity and manufacturing a good quality pulp

Chemical Recovery

One street of falling film evaporator with a capacity of around 210 TPH water evaporation to process additional black liquor generated

1 No. chemical recovery boiler with a capacity of 1000 TPD black liquor solids firing in addition to the existing 500 TPD boiler

Complete causticising section including green liquor clarifler, slaker, causticiser, white liquor clarifler, mud washers etc. will be replaced with the state-of-the-art technology and latest equipment requiring less space as well as less handling of material

1 No. 165 TPD Rotary Lime Kiln and suitable Mud Filter in addition to the existing rotary lime kiln.

Producer gas plant to replace partially the furnace oil as fuel for existing as well as proposed Rotary Lime Kiln

Paper Machine

A paper machine with a capacity of around 1,20,000 TPA comprising: DCS based Stock Preparation

State-of-the-art paper machine » Modern converting equipments » 250 TPD copier cutters - 2 Nos » Mechanised handling of paper in Converting, Finishing House and Paper Godown area • Rebuild PM V - Duplex Board Machine with addition of 2 Nos. coaters, additional dryers etc. to achieve a quality product with an enhanced capacity of 6000 TPA

Utilities

Power plant comprising 100-120 TPH capacity Boiler and 25 to 30 MW capacity steam turbine.

Effluent Treatment Plant (ETP)

Upgradation of ETP section including new equipments like cooling tower, clarifler, solids waste handling quipments etc., to meet additional requirement for enhanced production and treating total effluent from the mills.

Projects commissioned

During the year under review, the Company commissioned the following equipments with an investment of Rs.214.5 Millions:-

15.5 MW turbo generator set

Disc filters for duplex board machines

Drum chipper for wood chipping

Blow heat recovery and steam condensate recovery system for digesters

The Company is deriving the desired benefits on commissioning of the above equipments. Full benefits of the same will be reflected in the current year's working as the equipments were in operation for part of the year in 2005-06.

Coal Fired Boiler

The Company has placed order for 80 TPH FBC Boiler No.III and the same is expected to be commissioned by March 2007. This will further reduce power and fuel cost.

ISO 9001 certification

The Company has been certified to ISO 9001 (2000) Quality Management System international certificate by Det

Norske Veritas, The Netherlands, effective from November 2003. This certificate is valid up to November 2006.

The conformance of departmental processes to ISO 9001 (2000) QMS international standard is due for re-assessment by Det Norske Veritas in November 2006 to validate and grant further continuance of the certificate up to November 2009. The necessary documentation, training and internal audits are being geared up for the recertification audits scheduled in November 2006.

ISO 14001 (2004) EMS

Certification

The Company has been certified the ISO 14001 (2004) Environmental Management System international certificate effective from 22nd January 2006 for a period of three years. The various departmental processes to meet conformity to this international standard are being maintained and internally assessed at regular intervals to evaluate effectiveness and sustainability.

OHSAS 18001 (1999) Certification

The Company has embarked upon preparatory phase for getting certified to Occupational Health and Safety Assessment Series (OHSAS) 18001 (1999) certificate. The preparatory work has been initiated for department-wise documentation, training and auditing in conformity with the requirements of this international standard. The necessary expertise and hands-on training has been planned and being carried out in collaboration with Det Norske Veritas (DNV) Certification Body.

The Company shall offer implementation of OHSAS 18001 (1999) system to DNV for pre-assessment in August 2007 and based on their findings, the final certification audit shall be planned.

Rama Newsprint Et Papers Limited

The Company holds 36.32 per eent of the equity share capital of Rama Newsprint and Papers Limited (RNPL)with an investment of Rs.454.1 million (market value Rs.796.8 millions as on 31.3.2006). The voting rights held by the Company are S4.93 per cent, including the voting rights acquired as per the share holders agreement dated 6.9.2003 with Vashu Group (Shri Vashu J. Ramsinghani and persons acting in concert).

The working results of RNPL for the year ended 31.3.2006 indicated a profit before depreciation and tax of Rs.263.9 Million (previous year Rs. 182.2 Millions) and net loss was of Rs.58.8 millions only (previous year Rs.259.1 Millions). These figures are without considering remission in principal amount of Rs.2.8 Million (previous year Rs.252.2 Millions) and interest/lease charges of Rs. Nil (previous year Rs.214.2 Millions).

The Hon'ble High Court of Gujarat, vide its Order dated 5th May 2006, has confirmed the special resolution passed by the shareholders of RNPL for reduction in the share capital of the Company. Pursuant to the above confirmation order, the share capital of RNPL stands reduced in the following manner:-

Rs.7.50 of every equity share of Rs. 10 each fully paid up stands cancelled and simultaneously thereafter,

Four (4) numbers of fully paid equity shares of Rs.2.50 each are consolidated from 23,26,32,129 shares of Rs.10 each into 5,81,58,032 shares of Rs.10 each are consolidated into one (1) equity share of Rs.10 each fully paid (after cancellation of one fractional equity share), resulting in the issued, subscribed and paid up equity sharecapital of RNPL of Rs.232,63,21,290 consisting of 23,26,32,129 equity shares of Rs.10 each has been reduced/consolidated into Rs.58,15,80,320 consisting of 5,81,58,032 equity shares of Rs.10 each fully paid.

The Record Date fixed was Friday, the 28th July 2006 to finalise the list of shareholders entitled to receive equity shares of the Company consequent to the reduction in the share capital of RNPL as mentioned above.

Subsidiaries

Speciality Coatings Laminations Limited (SPCL), Gurgaon (Haryana):

The Company has sold 6,10,000 equity shares of Speciality Coatings ft Laminations Limited on 2nd March 2006 and from that day it is no longer subsidiary of the Company.

Bharat Sugar Mills Limited

The Company has sold its entire shareholding of 50,000 shares of Bharat Sugar Mills Limited., on 1 1th July 2005 and since then it is no longer the subsidiary of the Company.

The company is in trade terms with :-

v R. R. Industrial Network

v Asha Electricals

v Matal Crafts

v Microfinish Pumps Private Limited

v Microfinish Valves Limited

v Expert Engineering Enterprises

v Fibreglass & Insin. Ser. Private Limited

v Omega Engineers

v OSM Engineering

v Precifab Engineers

v Supreme Packers

v Tejas Engineers

v Universal Gasket

v Wood Designer

v Sameera Enterprise

The company’s fixed assets of important value include land (freehold and leasehold), factory buildings, non-factory buildings, roads and drainage, effluent treatment plant, construction machinery and equipment, water treatment plant, electric installations, fire fighting equipments, furniture, fittings and air conditioners, typewriters and addressing machine, trucks, vehicles and accessories, plant and machinery.

The company employs around 2852 persons in its’ set up comprising of 2068 persons in factory and 784 persons in office.

Website Details :

The Company was promoted by Shree Digvijay Cement Company Limited, Sikka, Gujarat State in 1955 and located at Dandeli in Karnataka. The mill location was opted as the most suitable and advantageous, Dandeli being situated in the heart of thick forests on the bank of river Kali. The prospects of continued supply of forest-based raw materials on the assurance of the then State Government of Karnataka, perennial availability of water, assured power supply, vicinity of rail and road linkages were the major factors that weighed in favour of Dandeli.

Originally the plant was designed to manufacture 18,000 MT per year of writing, printing and packaging paper. The trial production started in November 1958 and commercial production from May 1959. The Company was granted licence in December 1964 for 45,000 MT/P.A. capacity and the balancing equipments programme was completed in 1972 to increase the production to 45,000 MT/P.A. The company also implemented the Crash programme in 1974 to increase production capacity to 60,000 MT/P.A. against the licence issued in July 1972 for 60000 MT.

The license capacity was re-endorsed for 69,000 MT/P.A. in November 1991 on the basis of actual production. The Paper Industry has been de-licensed from July 1997.

The production capacity has increased to 1,19,750 TPA after successful completion of modernization/expansion programme in 1998-99. This programme included rebuilding of paper machine no. III [by adding trinip press, dryers and calendar stack, size press, colour kitchen and process automation] and balancing of pulp mill, power house and other sections of the mill and also setting up of 75 TPD Duplex Board Mill (PM V). After commissioning of 100 TPD duplex machine (PM IV) & rebuilding of PM II production capacity has further increased to 1,57,750 TPD in 2001-02 & 1,63,750 MT in 2003-04 on rebuilding of PM I and higher production of PM IV (Duplex Board).

The performance of the company during the last 5 years period was as under:

Sl. No.	Year Ended 31st March	Production in M.T. (Paper & Board)	Net Sales with Excise Duty.	Gross Profit [Rs. in Millions]
1	2002	1,20,293	414.10	493.400
2	2003	1,51,477	454.57	622.400
3	2004	1,63,714	491.84	605.700
4	2005	1,73,070	533.35	564.800
5	2006	1,76,221	606.84	692.200

The company has an impressive track record of production and productivity for which 13 Awards have been conferred on it by the National Productivity Council [Government of India and other organizations, the last being conferred in December, 1996 by Chemical & Allied Products, Export Promotion Council, Kolkata.

The company has an excellent track record of timely repayment of loans/lease rentals to financial institutions and leasing companies and has maintained such a record even in the recession period to which this industry has been subjected many a time. This has been highly appreciated by the financial institutions & lessors.

In 1964 the company promoted The Andhra Pradesh Paper Mill Limited., to take over Andhra Paper Mills owned by Government of Andhra Pradesh. The company provided technical assistance to the APPM for increasing its capacity from 21,000 MT per annum to 71,000 MT per annum. Its installed capacity has since gone up to 1,53,500 MT per annum after merger of coastal papers

VARIOUS REGISTRATION DATES
Date of Incorporation	25-03-1955
Date of Commencement of business.	05-05-1955
Commencement of trial production	17-11-1958
Commencement of commercial Production	16-5-1959

VARIOUS REGISTRATION NOS
Corporate Identification No	U02101 KA1970 PLC 001936
Excise Licence No.	320404 0001
ECC No	AAA - CT-4179 NXM - 002
Sales tax	KST - 4010107 - 1 Dt.1-10-1957 CST - 4015107 - 4 Dt.2-12-1957 TIN - 29380045781
Income tax	PAN - AAA CT 4179 N.

TECHNICAL PROCESS:

The mill is based on conventional kraft process using wood as the main raw material. Bamboo and wood are chipped in Chippers and fed to digesters for cooking in which cooking chemicals are added. After cooking the pulp is washed, screened, cleaned, bleached and stored. The company has two old streams of Brown Stock Washers and of bleach plants. 96-95% of chemicals used for cooking process are recovered in the recovery plant and in the process of this recovery substantial steam is also generated.

The pulp is refined in the Stock Preparation section and treated with sizing chemicals, dyes and loading materials before being transferred to the Paper Machine section for manufacturing paper. The company has three machines, which are of standard design consisting of wire part, press part and dryer section. Paper M/c. III has been re-built in 1993 and has twin wire system known as Papriformer machine. PM II has been rebuilt in 2000 and PM I is rebuilt in 2004. The Paper M/c. No. II is MG machine whereas PM I & III are MF machines. The company has fully equipped finishing and converting sections for rewinding, cutting and packing of the paper in reels or sheets.

The company has also PM IV & V to manufacture multilayer board (Duplex Board). The PM V was commissioned in 1996 whereas PM IV was commissioned in 2002. These machines uses recycled fiber and are therefore Eco-friendly. However some quantity of mill made pulp is also used in top layer to improve the quality and to reduce the cost.

The company has gone for process automation and installed Basis weight and moisture control system and ash control system on machines. Caliper control is also provided for PM III machine. The FBC boilers have also been provided with computer for process control. The Chemical Recovery Boiler, Evaporators, Rotary Limekin, Clo2 plant and pulp Wash plan are being operated though DCS/PLC Control system

PRODUCTION & MARKETING:

The company manufactures writing, printing & wrapping papers and its share in the country's total production is 3%. The company also manufactures paper as per the specification of the end users including industrial users. The end use of paper/paper board is for diaries, calendars, multicolor printing, ledger books, cheque printing, share certificate and other permanent records railway tickets, boarding passes, soap wrapping, coating base paper, continuous stationary, cyclostyling, photo copying etc.

The company has experienced personnel and no problem in the marketing of its products. The entire sale of paper is made through various paper dealers spread over the country.

MODERNISATION /EXPANSION & DIVERSIFICATION - PAPER DIVISION:

The company took up modernization expansion and diversification programme in two phases and both phases have been completed at an investment of Rs.1281.5 millions in 1994. This programme in first phase included re-building of Paper M/c.No. III for increasing speed and product diversification including high value items apart from balancing various sections i.e., Pulp mill, Recovery & Power House. The second phase of the programme included Duplex Board Mill (75 TPD PM- IV), Power block 16.8 MW (HSD and F.Oil based), Wash plant apart from normal capital expenditure for the mill. The Company is eligible for sales tax deferment for a period of 12 years from August 1994 up to overall ceiling of Rs.890 millions.

It has further completed expansion & diversification programme of Rs.2301.4 millions which includes

v 100 TPD duplex board machine (PM IV)

v 500 TPD Chemical Recovery Boiler

v 100 TPD Falling Film Evaporator

v 18.50 MW Power plants

v Rebuilding of PM I & II

v 350 TPD Washing plant

v 135 TPD Rotary Lime Kiln Plant

v 4 TPD Clo2 plant with beaching facility

v Various other equipments.

The Company is further taking up Mega expansion programme to increase the production capacity from 1,63,750 TPA to 3,20,000 TPA with an investment outlay of Rs.1100 Millions. The project is expected to be completed by March 2009.

The production capacity has gone up to 1,63,750 TPA after rebuilding of PM I in Feb.2004 and commissioning of PM IV (Duplex board) in 2002 as against 1,19,750 TPA prior to the programme. The scheme has been approved by the State Government for grant of incentives and concessions, including sales tax deferment for a total period of 12 years.

PROFITABILITY:

The details of turnover, profitability for last 5 years are as under:

YEAR	TURNOVER	Gross Profit	Net Profit (Rs. In Millions)
2001 - 02	414.10	49.34	318.600
2002 -03	454.57	62.24	360.400
2003 - 04	491.84	60.57	284.400
2004 - 05	533.35	56.48	306.600
2005 - 06	606.84	69.22	320.300

EXPORTS [Year Wise]:

The Company has exported 7028 MT of paper, paperboard & duplex board earning foreign exchange of Rs.215 millions in the accounting year 2005-06. The export details of the last 5 years are as under

YEAR	QUANTITY (MT)	Rs /Millions FOB Value
2001 - 02	2776	77.162
2002 -03	8555	240.400
2003 - 04	10595	277.000
2004 - 05	11719	339.800
2005 – 06	7028	215.000

OUTSTANDING ACHIEVEMENTS OF THE COMPANY:

The Company has been a pioneer in various fields, which has immensely benefited the entire paper industry. It has been the first in the following –

v To install a Drum Chipper in India supplied by Pallmann Germany.

v To install Disc Refiners in India

v To install Rotary Lime Kiln to reburn lime sludge among paper mills in India.

v To establish and use sulphamic acid as a protective agent in conventional bleaching.

v To install twin-wire Papriformer paper machine in India and Asia and seventh in the World.

v To use synthetic wire on paper machine in India.

v To install a 500 TPD Chemical Recovery Boiler - the largest of its kind in India.

v To install FBC coal-fired boiler in India.

v To eliminate bamboo from furnish and use 100 % wood for pulp making.

v 100% self sufficient on power front.

OTHER DIVISIONS:

CABLE DIVISION:

The Company has set up a plant for manufacturing of Optical Fiber Cables at Mysore. The commercial production was started in 96-97. The installed capacity has now increased to 83500 KM. The Company is also diversified to produce Jelly Filled Telecommunication Cables (JFTC) and has setup production facility to manufacture 15,42,000 CKM capacity in the existing location at Mysore. .

WIND MILLS:

The Company has set up a plant for manufacturing of Optical Fiber Cables at Mysore. The commercial production was started in 96-97. The installed capacity has now increased to 83500 KM. The Company is also diversified to produce Jelly Filled Telecommunication Cables (JFTC) and has setup production facility to manufacture 15,42,000 CKM capacity in the existing location at Mysore. .

ACQUISITIONS:

The Company acquired a running Coating Plant, Speciality Coatings & Laminations Limited., near Gurgaon (Haryana), in May, 1996 - with a capacity of 500 MT per month which has been increased to 2000 MT p.m. in the year 2004-05.

The company has acquired 33.85% equity of Rama Newsprint & Papers Limited (RNPL) Barbodhan (Gujarat) from ICICI Bank Limited and ICICI Equity fund for Rs.39.38 millions in Sept. 2003. The present holding is 35%. The capacity of RNPL is 1,32,000 MT/p.a. The acquisition has been completed in January 2004.

PRODUCTION & MARKETING:

The company manufactures writing, printing & wrapping papers and its share in the country's total production is 4%. The company also manufactures paper as per the specification of the end users including industrial users. The end use of paper / paper board is for diaries, calendars, multicolour printing, ledger books, cheque printing, share certificate and other permanent records, railway tickets, boarding passes, corrugated and packaging and core make [ for Textile Industry], tube making, soap wrapping, coating base paper, continuous stationary, cyclostyling, photo copying etc.

The company has experienced no problem in the marketing of its products. The entire sale of paper is made through various paper dealers spread over the country.

TECHNICAL PROCESS:

The mill is based on conventional kraft process using wood as the main raw material. Wood is chipped in Chippers and fed to digesters for cooking in which cooking chemicals are added. After cooking the pulp the washed, screened, cleaned, bleached and stored. The company has two streams of Brown Stock Washers and of bleach plants. 91% and above of spent chemicals are recovered in the recovery plant and in the process of this recovery substantial steam is also generated.

The pulp is refined in the Stock preparation section and treated with sizing chemicals, dyes and loading materials before transferring to the Paper Machine section for manufacturing paper. The company has three machines which are of standard design consisting of wire part, press part and dryer section. Paper M/c. III has been re-built in 1993 and has twin wire system known as Papriformer machine. PM II has been rebuilt in 2000 & PM I was rebuilt in 2004. The Paper M/c. No. II is MG machine whereas PM I & III are MF machines. The company has fully equipped finishing and converting section for rewinding, cutting and packing of the paper in reels or sheets.

The company also has Paper M/c Nos.IV & V for manufacture of multi-layer board (Duplex Board). The Paper M/c No.V was commissioned in 1996 and the Paper M/c No.IV, in 2002. These machines use recycled fibre and are therefore eco-friendly. However, some quantity of mill made pulp is also used for top layer of the duplex board to improve the quality and reduce the cost.

The company has gone for process automation and installed Basis Weight and Moisture Controller on PM I & III and CD Profiler / Digital Control Drive on PM III. The FBC boiler has also been provided with computer for process control. The Chemical Recovery Boiler, Evaporators, Rotary Limekin, Clo2 Plant & Pulp Wash Plant are being operated through DCS/PLC Control system.

Products

The Company manufactures a wide range of Paper & Boards on four machines presently and the Product Range includes :

PAPER MACHINE

DECKLE

GSM

OUTPUT

Machine I	300-310 cms (118.11" - 122.04")	80 TO 200	White/Natural shade wood-free varieties
			Azurelaid
			Maplitho ptg. SS
			Sudarshan Super Print/Board
			MF Cover Paper TDL
			MF Cover Paper / Board
			Sudarshan Cheque paper
			Sudarshan MICR Cheque Paper
			Sudarshan Parchment Paper
			Sudarshan Account Book
			MF Base Paper (for coating)

Machine II	310-320 cms (122.04" - 125.98")	100-300	Wood-free Monoglazed varieties
			MG Poster ( White, N.S.& Coloured)
			MG Cover Paper (White, N.S & Coloured)
			MG Pulp Board (White, N.S. & Coloured)
			MF Cover Paper H.L.
			MG Plain Kraft
			Sudarshan Greeting

Machine III	300-310 CMS (118.11" - 122.04")	54 to 80	White/Natural shade wood-free varieties
			Creamwove
			Maplitho Ptg. Dlx
			Maplitho Ptg. SS
			MF Cover Paper HL
			Maplitho Base (for coating)

Machine IV

240-256 CMS (94.488" - 100.78")

200-500

LWC and HWC Grey Black and White Back Boards, Coated Folding Box Boards, Coloured Board, Art Board, Vergin Coated Boards, ETC.

Machine V	240-250 CMS (94.48" - 98.42")	200-500	Duplex Board - LWC
			Duplex Board Dlx

Further to the above the Company has a subsidiary company named SPECIALITY COATING & LAMINATIONS LIMITED, (100% subsidiary of the Company, located near Delhi), where the following coated paper and boards are manufactured:

v One side coated wood free paper / board (chromopaper / board)

v Two side coated wood free paper / board

v Fluorescent coated wood free paper / board

v Mat finish / High gloss coated wood free paper / board

PRODUCT RANGE FOR EXPORT :

v Woodfree Writing & Printing Paper

v Woodfree Offset Paper

v Bristol Board - White & Color

v Security Paper

v Super Print (H.B.) Papers & Boards

v Accounts Book Paper

v Duplex - LWC, HWC

v Duplex white back and colour

Their Paper & Boards are at par with international quality standards and are regularly being exported to various countries like Egypt, Iran, Jordan, Muscat, U.A.E., Singapore, Hong Kong, Malaysia, Mauritius, Myanmar, Tanzania, Kenya, Ethiopia and have been well accepted.

EXPORTS [Year Wise] :

YEAR	QUANTITY (MT)	VALUE (Rs. in Lakhs)
1998 - 99	902	232.38
1999 - 2000	3857	964
2000 - 2001	2372	766.52
2001 - 2002	2776	771.62

OTHER DIVISIONS : OPTICAL FIBRE CABLE

Sudarshan Telecom :

The Optical Fibre Cable Unit, namely SUDARSHAN TELECOM is situated at Mysore in Karnataka. It has an annual capacity of about 6600 kmc of cable and is equipped with state of the art plant to produce Armoured & Aerial types of optical Fibre Cables, besides the underground duct burial type cables with fibre count upto 40 fibres. It has technology transfer arrangement with the world leaders in the field viz. M/s Sumitomo Electric Industries of Japan and M/s John Royale & Sons of USA. It manufactures cables based on stranded loose tube design. Department of Telecomunications (DOT) is the biggest buyer at the moment and the unit is ready to cater to the requirement of Basic Services Operators for Optical Fibre Cables. DOT has type approved Fibre, 12 Fibre & 24 Fibre cables of the unit for use in its network. The Unit has obtained approval of Railways for supply of its Armoured type of Cable and has implemented ISO 9000 Certification.

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.43.39
UK Pound	1	Rs.85.16
Euro	1	Rs.57.60

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	9
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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		60

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