MIRA INFORM REPORT

Report Date :

16.11.2007

IDENTIFICATION DETAILS

Name :	BOMBAY RAYON FASHIONS LIMITED
Formerly Known As :	BOMBAY RAYON FASHIONS PRIVATE LIMITED
Registered Office :	D-1^st Floor, Oberoi Garden Estates, Chandivali, Farms Road, Chandivali, Andheri (East), Mumbai-400072, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	21-05-1992
Com. Reg. No.:	11-66880
CIN No.: [Company Identification No.]	U17120MH1992PLC066880
Legal Form :	A Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of textiles consisting of fabrics and garments

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 19825372
Status :	Good
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are fair. Financial position is good. Payments are usually correct and as per commitments. The company can be considered good for any normal business dealings at usual trade terms and conditions. It can be regarded as a promising business partner in a medium to long term.

LOCATIONS

Registered Office :	D-1^st Floor, Oberoi Garden Estates, Chandivali, Farms Road, Chandivali, Andheri (East), Mumbai-400072, Maharashtra, India
Tel. No.:	91-22-66955566
Fax No.:	91-22-28476992
Registrar and Transfer Agent:	Mr. Joy Varghese, Intime Spectrum Registery Limited C -13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai – 400078, Maharashtra, India
Tel. No.:	91-22-25963838 (Extension – 293)
Fax No.:	91-22-25946969
E-Mail :	varghesej@intimespectrum.com
Human Resource Department :	D 1^st Floor, Oberoi Garden, Chandivali Farms Road, Chandivali, Andheri (East), Mumbai- 400072, Maharashtra, India
Tel. No.:	91-22-66955566
Fax No.:	91-22-28476992
E-Mail :	opportunities@bombayrayon.com
Factory 1 :	Weaving of Fabrics Raj Rajeshwari Compound, Sonale Village, Bhiwandi
Factory 2 :	Weaving of Fabrics TTC Industrial Area, Navi Mumbai
Factory 3 :	Garment Manufacturing 57 / A, 3^rd Phase, Peenya Industrial Area, Bangalore - 560058
Factory 4 :	Garment Manufacturing 288, 4^th Phase, Peenya Industrial Area, Bangalore - 560058
Factory 5 :	Weaving of Fabrics 227 / 3, Khanvel Main Road, Kherdi, Silvassa
Factory 6 :	Garment Manufacturing 19^th KM 53 / 10, Madanayakanna Hialli, Madavara Post Dasunp, Bangalore – 562123
Factory 7 :	Garment Manufacturing 151, Babaasabara Palya, Mysore Road, Kengeri, Bangalore - 560058
Factory 8 :	Yarn Dyeing, Processing and Garment Manufacturing Plot Number / Survey Number 21 to 32 (P), KIADB Apparel Park, Near Railway Station, Doddaballapur – 561203 (under set up)

DIRECTORS

Name :	Mr. Janardan Agarwal
Designation :	Chairman
Name :	Mr. Aman Agarwal
Designation :	Vice Chairman
Name :	Mr. Naseer Ahmed
Designation :	Joint Vice Chairman
Name :	Mr. Prashant Agarwal
Designation :	Managing Director
Name :	Mr. Uday Mogre
Designation :	Executive Director (Corporate)
Name :	Mr. A R Mundra
Designation :	Executive Director (Finance)
Name :	Mr. Pravin P Shah
Designation :	Non Executive Director
Name :	Mr. B S Bhesania
Designation :	Non Executive Director
Name :	Mr. S B Agarwal
Designation :	Non Executive Director
Name :	Mr. John Mathew
Designation :	Nominee Director, EXIM Bank

KEY EXECUTIVES

Name :	Ms. Prachi A. Deshpande
Designation :	Deputy Company Secretary
Address	D 1^st Floor, Oberoi Garden Estates, Chandivali Farms Road, Chandivali, Andheri (East), Mumbai – 400072, Maharashtra, India
Tel. No.:	91-22-66955566
E-Mail.:	prachi.deshpande@bombayrayon.com

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter Group	2,73,59,160	43.43
Mutual Funds and UTI	4391712	6.97
Banks / Financial Institutions / Insurance Companies	621228	0.98
Foreign Institutional Investors	17064380	27.09
Non-Resident Indians	612033	10.61
Private Bodies Corporate	6685509	0.97
Indian Public	6102959	0.26
Clearing Member	163019	9.69
Total	63000000	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of textiles consisting of fabrics and garments
Products :	² Woven Fabric of Cotton ² Woven Fabric of Cotton mixed mainly or solely with Man made Fibre ² Men’s or Boys Shirting’s ² Women’s or Girls Blouses, Shirts and Shirt-Blouses
Exports to :	Europe and U.S.A.

GENERAL INFORMATION

Customers :	Wholesalers, Distributors, and Retailers
No. of Employees :	6773

Bankers :

² Jankalyan Sahkari Bank Limited

² Kalyan Janta Sahkari Bank Limited

² State Bank of India

² UTI Bank Limited

² State Bank of Patiala

² State Bank of Hyderabad

² DBS Bank Limited

² State Bank of Mysore

² Citibank N.A.

² Export Import Bank of India

Facilities :

Particulars	31.03.2007 Rs. In millions
Secured Loans
Term Loans From Banks	1686.507
Working Capital Loans From Banks	1493.497
Others Vehicles Loans: Form Banks From Others	10.186 5.440
Total	3195.630
Unsecured Loans
From Banks	138.914
Total	138.914

Banking Relations :

Satisfactory

Auditors :

V. K. Beswal and Company

Chartered Accounts

Address :

Mumbai

Associates/Subsidiaries :

BRFL Europe B. V.

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
7,00,00,000	Equity Shares	Rs 10/- each	Rs 700.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
63000000	Equity Shares	Rs 10/- each	Rs 630.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		630.000	489.797	329.636
2] Advance Money received for convertible warrants		126.270	0.000	0.000
3] Reserves & Surplus		4200.073	1043.845	129.355
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4956.343	1533.642	458.991
LOAN FUNDS
1] Secured Loans		3195.630	841.114	266.483
2] Unsecured Loans		138.914	108.751	6.059
TOTAL BORROWING		3334.544	949.865	272.542
DEFERRED TAX LIABILITIES		134.094	14.888	3.236
TOTAL		8424.981	2498.395	734.769
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3059.497	687.023	252.339
Capital work-in-progress		480.552	515.182	42.020
INVESTMENT		1357.668	100.125	1.151
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1751.138	833.539	384.004
	Sundry Debtors	1020.045	346.159	208.141
	Cash & Bank Balances	772.644	117.142	8.663
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	734.729	288.178	84.427
Total Current Assets		4278.556	1585.018	685.235
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	650.815	302.920	217.053
	Provisions	100.477	86.033	32.602
Total Current Liabilities		751.292	388.953	249.655
Net Current Assets		3527.264	1196.065	435.580
MISCELLANEOUS EXPENSES		0.000	0.000	3.679
TOTAL		8424.981	2498.395	734.769

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Sales Turnover	4893.817	1989.803
Other Income	70.970	13.729
Total Income	4964.787	2003.532	1240.963
Profit/(Loss) Before Tax	755.985	254.620	91.972
Provision for Taxation	211.850	72.818	19.351
Profit/(Loss) After Tax	544.135	181.802	72.621
Total Imports	1308.125	317.187	179.140
Total Expenditure	4623.499	1999.363	1148.991

QUARTERLY RESULTS

PARTICULARS	30.06.2007 1^st Quarter	30.09.2007 2^nd Quarter
Sales Turnover	2012.500	2246.100
Other Income	39.800	94.500
Total Income	2052.300	2340.600
Total Expenditure	1616.800	1753.700
Operating Profit	435.500	586.900
Interest	54.000	66.800
Gross Profit	381.500	520.100
Depreciation	64.500	66.100
Tax	110.500	135.300
Reported PAT	220.500	306.800

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt Equity Ratio (Total Liability / Networth)	0.67	0.61	0.59
Long Term Debt Equity Ratio	0.40	0.38	0.20
Current Ratio	1.85	2.03	1.46
TURNOVER RATIO
Fixed Assets	2.43	3.66	5.47
Inventory	3.79	3.32	5.02
Debtors	7.17	7.29	5.83
Interest Cover Ratio	6.81	4.95	4.48
Operating Profit Margin	20.22	17.25	12.79
Profit Before Interest and Tax Margin	18.09	15.79	11.04
Cash Profit Margin	13.24	10.46	8.52
Adjusted Net Profit Margin	11.11	9.00	6.77
Return on Capital Employed	16.64	19.87	28.15
Return On Net Worth	17.10	18.25	27.27

LOCAL AGENCY FURTHER INFORMATION

Directors Reports:

OPERATIONS: 

The Gross turnover of the Company for the year under review stood at Rs.4898.969 millions with an increase of 2.45 times over the previous year. The total Export Sales has increased to Rs.2134.084 millions from Rs.634.729 millions (3.36 times). The Profit Before Tax jumped to Rs.755.985 millions in comparison with Rs.254.620 millions in the previous year. After provision for Taxation, the Profit After Tax (PAT) for the year was Rs.544.135 millions as against Rs.181.802 millions for the previous year. 

 During the year the commercial production for integrated textile project commenced with the manufacturing facilities of yarn dyeing, weaving, processing and garmenting at single location. With this the total installed capacities at the end of year under review reached to 50 million meters p.a of fabric and 19.2 million pieces p.a (64,000 pieces per day) of garments. 

 The expansion plans have already been undertaken to increase the total installed capacities to 120 million meters of fabrics and 45 million pieces p.a (1,50,000 pieces per day) of garments within next financial year. 

EXPANSION PROJECT: 

  After completion of New Integrated Textile Project at Doddaballapur, Bangalore the new project for expansion has been taken to set up the following capacities:

 Fabrics : 70 million mtrs p.a 

 Garments : 25.8 million pieces p.a (86,000 pieces per day) 

 Based upon the Techno-Economic Feasibility Report prepared by Gherzi Eastern Limited, Mumbai the total cost of this expansion was estimated at Rs.3520.000 millions to be funded as under: 

 Equity Rs.1240.000 millions (Raised under GIP) 

Debt Rs.2280.000 millions 

Rs.3520.000 millions 

 The financial appraisal and syndication of Debt were done by LITI Bank Ltd by getting sanctions for Term Loans from various Bankers under Technology Upgradation Fund Scheme (TUFs) entitling the company an interest subsidy of 5% and capital subsidy of 10% on total investment in Processing Machineries. 

 The project execution work has been undertaken by finalizing the critical machineries with technologies and project will be fully on stream by end of third quarter of next financial year.

The Company has also drawn of the plan for setting up fabric weaving and new Garment Manufacturing Facilities in Maharashtra. 

 SUBSIDIARY COMPANIES: 

 BRFL Europe B.V.: 

 The wholly-owned subsidiary of the Company BRFL Europe B.V. at Netherlands set up last year, has played an important role for canvassing the business, services to customers on products and designs. 

 During the year under review, a branch office of the aforesaid subsidiary was incorporated in New York, U.S. in the name of BRFL Europe B.V. Inc. The establishment of said branch office shall enable the Company to provide services to customers at their door step which in turn would give the overseas buyers a comfort of dealing with a company having reached in their respective territory. 

 DPJ Clothing Ltd: 

 During the year under review, the Company has acquired 420 Ordinary shares constituting 70% of the total paid-up capital of DPJ Clothing Ltd, a UK based Company, for a total consideration of Pound 1.54 million. DPJ Clothing Limited is engaged in business of wholesale marketing and distribution of clothing Products. The said subsidiary is working with various retail fabric chains facilitating the outsourcing of fabrics and garment either by direct import or by import and delivery basis. 

 Bombay Rayon Retail Limited: 

With a view to expand into domestic market through retail segment, the Company has, during the year under review, incorporated a wholly-owned subsidiary in the name of 'Bombay Rayon Retail Ltd'. However, no operations had commenced during the year under review. 

As required by Section 212 of the Companies Act, 1956, the Statement of holding in subsidiary and Consolidated Accounts pursuant to Accounting Standard (AS 21) issued by the Institute of Chartered Accountant of India, including the financial accounts of the subsidiary company are forming part of the Annual Report. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

 Industry structure and development: 

 The global textile industry estimated at USO 500 billion is one of the largest contributors to global trade. India's growing 'ports of USID 20 billion make it an important player in this market. The country largely exports fabrics, apparel and made-ups to the US and EU. 

 The steady growth in the exports of value added products has resulted in an increase in India's market share and the favourable product-mix has contributed to higher realizations and better margins. Post quota phase-out, the Indian Textile Industry has gained immensely and continues to benefit over its regional peers in terms of export of value-added products. 

 Worldwide, there is a rapid change in consumer preferences in term of style and fashion preferences. More and more consumers ate shifting towards high end value added products. This has necessitated efficient service coupled with brand offerings which in turn has led to new opportunities for the textile and apparel industry. A strong brand image, world class production facilities further expansion of the existing distribution network and emphasis on retail would be the keys to maintaining market leadership by any company in the textile and clothing industry. 

 Business Overview: 

 The company is a leading manufacturer and exporter of fashion fabrics and garments. It has fully integrated operations from design to yarn dyeing to fabric processing to garment manufacturing. Vertical integration focus on designing and manufacturing high end garments enable the company to achieve higher margins. 

 With a focus on becoming a leader in high-end garment manufacturing, The Company plans to further expand its manufacturing facilities. It plans to increase the output of fabric from 50 million meters annually to approximately 120 million meters annually and garments from 18.6 million pieces annually to approximately 45 million pieces annually. The total cost for this expansion is projected to be Rs.3,520.30 million. The cost is being funded by Equity already raised and Term Loans under Technology Upgradation Fund Scheme (TUFs). 

 Opportunities and Threats:

 Opportunities: 

 As the textile industry matures, international players are now seeking manufacturers with vertically integrated product development facilities and having the ability for managing quality and costs. India is steadily being recognised in this regard and sourcing of value-added products from India continues to increase. 

 The Government of India has set a target for textile exports to grow to USD 50 billion by 2010. In continuation of its policy to support the Indian textile sector, the Government of India had allocated TUF subsidies for investments in the sector. In addition, the increase in FDI has provided huge opportunities to Indian Textile players who can source domestically and provide a one-stop solution to the global retailers who source from India. 

Fashion Risk: 

 This risk arises because the Company is in the fashion business where designs have a short shelf life. 

 BRFL has its own in-house Research and Development Department consisting of a Designing Unit and a Fabric Development Unit. There is a team of designers who come out with new ideas and designs based on current fashion trends in the domestic and the international markets. BRFL also works closely with its customers. Thus the Company has its mitigation in place. 

Outlook: 

 Easy access to raw material (India is the third largest producer of cotton and one of the largest producers of man-made fibres) and availability of low cost skilled labour make the country an ideal destination for sourcing fabrics as well as garments. With fully integrated operations, the Company intends to become a complete apparel house. Barring unforeseen circumstances, the financial and operational performance of the Company is expected to grow significantly in the next few years. Established relations with existing customers and a constant drive to increase they customer base shall enable the Company to emerge a strong player in the industry. 

Fixed Assets

• Land
• Buildings
• Plant and Machinery
• Furniture and Fixtures
• Office Equipments
• Vehicles
• Computers

History

Subject is a part of Bombay Rayon group was incorporated as Mudra Fabrics Private Limited (MFL) on 21.05.1992. On 13.10.1992 the Company was converted into a public limited company. Subsequently, on 30.09.2004, name of the company was changed to Bombay Rayon Fashions Limited (BRFL). In March 2005, with a view to consolidate business of our Group, Bombay Rayon Private Limited (BRPL) was amalgamated with the Company after the High Court of Bombay approved the Scheme of Amalgamation effective 01.04.2004 and two partnership firms of the Group, i.e, B R Exports and Garden City Clothing were taken over by BRPL and BRFL respectively. 

After the amalgamation of BRPL with BRFL all the three entities, i.e., BRPL, GCC and B R Exports have merged into their Company resulting into consolidation of businesses from fabrics, design development and garments under one corporate roof

The Company is mainly engaged in the business of manufacturing of textiles consisting of fabrics and garments. The company has its plant for weaving of fabrics at Bhiwadi, Navi Mumbai, Silvassa. Plant for Garment manufacturing at Bangalore, and Plant for Yarn Dyeing, Processing and Garment Manufacturing. 

During 2005-2006, the company came out with a maiden IPO of 1,34,75,000 Equity Shares of Rs.10/- Each, Fully paid up for cash at premium of Rs 60/- per equity shares.

The company has also become one of the largest Garment Manufacturer of designer shirts for exports with the increase in Garment capacity from 1.8 million pieces p. a to 12 million pieces p.a. The Company has already added in its customer list many well known brands/ labels from The United States of America

(USA) and European Countries

The company focuses to convert the Company into 'Complete Apparel Company' with state of the art designing and sampling set ups and entire value chain from yarn dyeing, weaving, processing and manufacturing of fabrics and garments. With the expansion capacities going on stream soon, the profile of the Company will change from a fabric company to an integrated garment manufacturing company for exports. With the completion of new project, the total Garment Manufacturing capacity will increase to 18 million pieces p.a. The plans are being drawn to increase it to 30 million pieces p.a. (1,00,000 pieces per day) within the next financial year.

During the year under review 2005-2006, a wholly - owned Subsidiary of the Company was incorporated on 05.09.2005 in Almere, Netherlands, under the name BRFL Europe B.V. 

The Company has been allotted 20.16 acres of land in the Apparel Park at Doddaballapur for setting up an integrated textile project of yarn dyeing, weaving, process house and garment manufacturing. Based on the Techno-Economic Feasibility Report prepared by Gherzi Eastern Limited, Mumbai, the total cost of the Integrated Textile Project at Doddaballapur, Bangalore at the time of Initial Public Issue was estimated at Rs.1617.2 Millions. The Company has expanded the scope of the aforesaid project in view of setting up a new Greenfield Garment facility for 7.8 Million pieces p. a at Bangalore. The total cost after the new plans has increased to Rs. 2467.200 Millions.

The New Garment Unit at Bangalore with an installed capacity for manufacturing 7.8 Million pieces of Garments per annum became operational with commencement of commercial production from 6th March 2006. The project execution is at an advanced stage and is scheduled to be fully commercially operational in the second quarter of the current year.

News and Media

India : Bombay Rayon acquires UK based DPJ Clothing
February 23, 2007

Bombay Rayon Fashions Limited, leading manufacturer of fashion fabrics and garments, has acquired UK- based DPJ Clothing Limited at a consideration of £ 1.54 million ($2.90m). With this acquisition, DPJ Clothing Ltd. has become a foreign subsidiary of Bombay Rayon Fashions Limited.

This acquisition through the purchase of 420 Ordinary Shares (70% of total capital) in DPJ Clothing was approved by the Board of Directors of Bombay Rayon Fashions.

“With this acquisition, Bombay Rayon will be able to expand its customer base in the European region for its designer garments and also get the headway for outsourcing and distributing the other related products in that region.”, said Mr. Prashant Agarwal, MD, Bombay Rayon Fashions Limited.

Bombay Rayon Group established by Mr. Janardhan Agrawal in 1986 with a modest beginning in manufacturing of fashion fabrics at present is considered amongst India’s leading manufacturers and exporters of fashion fabrics and garments with a State-of-the-art manufacturing facilities at New Mumbai, Silvassa, Sonale and Bangalore fully backed by the facilities of product development, design studio and efficient sampling infrastructure to provide the quality service to its customers in India and abroad.

DPJ Clothing Ltd is engaged in the business of wholesale marketing and distribution of clothing products and is incorporated under English Companies Act 1985 with place of business and Registered office at Birmingham.

Bombay Rayon Fashions Limited (BRFL) signed a Memorandum of Understanding (MOU) today with the Government of Maharashtra towards expanding its fabric and garment making capacities by setting up new facilities at Tarapur, Islampur, Ichalkaranji and other lesser developed areas of Maharashtra like Latur, Nanded & Osmanabad.

Presently BRFL has Fabric processing capacity of 1,50,000 meters per day and garment capacity of 1,00,000 garments per day in the State of Karnataka. However, BRFL has chosen to undertake major expansion in its capacities by setting up Greenfield Units for Yarn Dyeing, Weaving, Processing and garmenting in the State of Maharashtra.

BRFL is presently employing more than 30,000 people in its various units spread over Mumbai & Bangalore. With the addition of these capacities potential employment generation would be exceeding an additional 50,000 people.

The MOU was signed by Mr. V.K.Jairath, Principal Secretary, Department of Industries, Government of Maharashtra (GoM) and Mr. Prashant Agarwal- Managing Director , Bombay Rayon Fashions Limited in the presence of Mr. Vilasrao Deshmukh, Hon'ble Chief Minister of Maharashtra, Mr. Ashok Chavan, Hon'ble Minister of Industries, GoM, Mr. Jayantrao Patil, Hon'ble Minister of Finance , GoM, Mr. Johny Joseph, Chief Secretary , GoM , Mr. Aman Agarwal - Vice Chairman Bombay Rayon Fashions Limited and Mr. Uday Mogre - Executive Director (Corporate) Bombay Rayon Fashions Limited.

Speaking on this occasion the Chief Minister Mr. Vilasrao Deshmukh said " BRFL is a fast growing company and has grown to its present level of turnover of Rs. 1000 crores p.a. especially posting phenomenal growth in the last three years. I am happy to note that BRFL has decided to establish fabric & garment manufacturing units in the lesser developed areas of Maharashtra, thereby creating major employment opportunity for the local people"

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.39.35
UK Pound	1	Rs.80.52
Euro	1	Rs.57.56

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	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	NO
--LISTED	YES/NO	YES
--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/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

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