MIRA INFORM REPORT

Report Date :

01.11.2007

IDENTIFICATION DETAILS

Name :	AMMUNITION FACTORY KHADKI ( AFK )

Registered Office :	Kirkee, Pune – 411 003, Maharashtra

Country :	India

Date of Incorporation :	More than 150 years

TAN No.: [Tax Deduction & Collection Account No.]	PNEA06927E

PAN No.: [Permanent Account No.]	PNEIO4114F

Legal Form :	Unit of Ministry of Defence, Government of India

Line of Business :	Manufacturer, Exporter and Importer for all kinds of Guns used in defence forces and Para defence forces, Police, Sporting Ammunition

RATING & COMMENTS

MIRA’s Rating :

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

Status :	Good

Payment Behaviour :	Usually Correct

Litigation :	Clear

Comments :	Subject is a part of ministry of Defence, Government of India. Available information indicated high financial responsibility of the company. Trade relations are fair. Payments are usually correct and as per commitments. Subject can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Kirkee, Pune – 411 003, Maharashtra
Tel. No.:	91-20-25810554/ 3855/ 3856/ 3857
Fax No.:	91-20-25813208
E-Mail :	Afk.ofb@nic.in
Website :	http://ofbindia.gov.in/units/index.
Location :	Owned by Government

MANAGEMENT

Name :	Mr. Sudipta Ghosh
Designation :	DGOF and Chairman, OFB
Date of Birth/Age :	25.04.1949
Date of Appointment :	23.12.1970

Name :	Mr. B C Biswas
Designation :	Member / WV and E
Date of Birth/Age :	09.02.1948
Date of Appointment :	01.12.1972

Name :	Mr. B S Bhatia
Designation :	Member / M and C
Date of Birth/Age :	20.08.1949
Date of Appointment :	01.12.1972

Name :	Mr. A M Naik
Designation :	Member / A and E
Date of Birth/Age :	13.10.1948
Date of Appointment :	07.02.1973

Name :	Ms. Saroj Vinayek
Designation :	Addl. DGOF / OEFHQ
Date of Birth/Age :	06.10.1949
Date of Appointment :	01.01.1973

Name :	Mr. Surender Kumar
Designation :	Addl. DGOF/ AVHQ
Date of Birth/Age :	09.02.1948
Date of Appointment :	01.12.1972

Name :	Mr. Subir Mukhopadhyay
Designation :	Member/ Finance
Date of Birth/Age :	30.01.1948
Date of Appointment :	28.12.1971

Name :	Mr. Ramesh Chandra
Designation :	Member/ TS
Date of Birth/Age :	01.01.1948
Date of Appointment :	01.12.1972

Name :	Mr. Auribindo Nandi
Designation :	Member / PER
Date of Birth/Age :	15.03.1949
Date of Appointment :	21.12.1972

Name :	Mr. U N Singh
Designation :	Member / P and MM
Date of Birth/Age :	25.12.1949
Date of Appointment :	01.12.1972

Name :	Mr. K Chandran
Designation :	Sr. General Manager

BUSINESS DETAILS

Line of Business :	Manufacturer, Exporter and Importer of all kinds of Guns used in defence forces and Para defence forces, Police, Sporting Ammunition

Products :	v Civilian Arms and Ammunition v Weapons v Ammunition, Explosives, Propellants & Chemicals v Military Vehicles v Armoured Vehicles v Optical Devices v Parachutes v Support Equipment v Troop Comfort and General Stores v Material, Components and SPMs

Exports :
Products :	All Products
Countries :	v Europe v Nepal v Germany v Thailand v Malaysia v Turkey v Indonesia v Egypt v Israel v Sri Lanka v Bangladesh v USA

Imports :
Products :	All Products Raw Material
Countries :	v Germany v USA v Russia

GENERAL INFORMATION

Customers :	v Indian Army v Indian Navy v Indian Air Force v Ministry of Home Affairs

No. of Employees :	5000

Bankers :	v Reserve Bank of India v State Bank of India

LOCAL AGENCY FURTHER INFORMATION

Trade References

v Indian Army

v Indian Navy

v Indian Air Force

v Ministry of Home Affairs

WEBSITE DETAILS ATTACHED:

Subject is a family of 40 Ordnance Factories under the aegis of its corporate headquarters Ordnance Factory Board, Kolkata - possesses the unique distinction of over 200 years experience in defence production. They are engaged in production, testing, logistics, research, development and marketing of a comprehensive product range in the area of land, sea and air systems.

The patronage they receive both in India and abroad speaks of their quality of products and services. Undoubtedly, they are the force behind armed forces.

HISTORY:

The Apex Board is headed by Director General Ordnance Factories (DGOF) as Chairman and has 9 Members in the rank of Additional DGOF. Ordnance Factories are divided into 5 operating divisions, depending upon the type of the main products/technologies employed. These are :

Ammunition and Explosives (A and E)
Weapons, Vehicles and Equipments (WV and E)
Materials and Components (M and C)
Armoured Vehicle (AV)
Ordnance Equipment Group of Factories (OEF)

Each of the above group of factories is headed by a Member/Additional DGOF. The four remaining Members are responsible for staff functions, viz Personnel (Per), Finance(Fin), Planning and Material Management (P&MM), Technical Services (TS) and they operate from Kolkata.

Subject is a giant industrial setup which functions under the Department of Defence Production of the Ministry of Defence. Indian Ordnance Factories, headquartered at Kolkata, is a conglomerate of 39 Factories, 9 Training Institutes, 3 Regional Marketing Centres and 4 Regional Controller of Safety.

Today OFB along with its 39 factories spread over India provide

Geographical Spread

There are 39 Ordnance Factories geographically distributed all over the country at 24 different locations. A visual idea of how their factories and headquarters are distributed can be had from their location map.

Name of State/ Union Territory	Number of factories
Maharashtra	10
Uttar Pradesh	8
Madhya Pradesh	6
Tamil Nadu	6
West Bengal	4
Uttaranchal	2
Andhra Pradesh	1
Chandigarh	1
Orissa	1

The 40th Factory is being set up at Nalanda in Bihar.

Their Product Range

Items produced in subject are highly sophisticated and complex in nature. Also the range of products is simply astonishing. Their products, as is evident from the list below, span across a wide and exhaustive range of requirements of any armed forces.

Technology

Their products must be safe in handling, reliable and perform consistently during actual operation with equal efficiency under varying and extreme conditions of climate. The plant and technologies have been so chosen as to ensure high degree of quality and reliability and is a unique blend of old and the most modern stae-of-the-art CNC technologies. The manufacturing process covers wide spectrum of engineering - Mechanical, Electrical, Metallurgical, Chemical, Textile, Leather, Optics and Electronics.

It is their endeavour to manufacture world class products without compromising with the safety aspects of products and processes. Adherence to safety standards is given highest priority and a well laid down safety norm as well as diaster management plan exists in the organisation.

Customers

The prime customers of subjects are the Indian Armed Forces. Apart from supplying armaments to the Armed Forces, subject also meet the requirement of other customers viz. Central Paramilitary Forces and State Police Forces in respect of Arms, Ammunition, Clothings, Bullet Proof Vehicles and Mine Protected Vehicles etc. Increase in volume of Export, as an extension to its functioning remains an important objective of Ordnance Factories.

Civil Trade

Besides the above, they have a large number of customers in the civil sector - government departments, PSUs, private companies and individuals, etc. - who purchase industrial chemicals, explosives, Non Prohibited Bores (NPB) arms and ammunition, brass ingots, aluminium alloy products, steel castings and forgings, vehicles, clothing and leather goods, cables and opto-electronic instruments.

Exports

They are making vigorous marketing efforts to boost export by participating in International Exhibitions, product promotion through advertisement in the international media, interaction with visiting delegations from friendly countries, agents and the customer's representative, both in India and abroad.

They have been exporting their products by maintaining the foothold in traditional markets of Nepal, Thailand, Malaysia, Germany, Turkey and making efforts for emerging new markets like USA, Indonesia, Oman, Sri Lanka, Bangladesh, Israel and Egypt.

Arms and Ammunition, Weapon Spares, Chemicals & Explosives, Leather and Clothing items have been exported to the developing countries as well as to the developed nations world-wide.

All Units

v Headquarters

v Factories

v Ordnance Factories Institute of Learning

v Regional Marketing Centres

v Regional Controllerate of Safety

v Others

Headquarters

Factories

Ordnance Factories Institute of Learning

Regional Marketing Centres

Regional Controllerate of Safety

Others

Ordnance Factory Cell Delhi (OFCELL)

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 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. 39.37
UK Pound	1	Rs. 81.82
Euro	1	Rs. 56.83

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--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	NO
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		63

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.	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