MIRA INFORM REPORT

Report Date :

10.10.2007

IDENTIFICATION DETAILS

Name :	CINEMAX INDIA LIMITED
Registered Office :	805, 8^th Floor, 349 Business point, Western Express Highway, Andheri (East), Mumbai – 400 069, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	22.05.2002
Com. Reg. No.:	135964
CIN No.: [Company Identification No.]	L92142MH2002PLC135964
TAN No.: [Tax Deduction & Collection Account No.]	MUMC10889E
PAN No.: [Permanent Account No.]	AACCC1775F
Legal Form :	A Closely held Public Limited Liability Company
Line of Business :	To carry on the business of building, owning and operating Multiplexes.

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 5335712
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well – established and reputed company having satisfactory track records. 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 :	805, 8^th Floor, 349 Business Point, Wester express Highway, Andheri (East), Mumbai – 400 069, Maharashtra
Tel. No.:	91-22-6710 1991 / 93 /94 /95 / 5693 77 77 / 2684 56 67
Fax No.:	91-22-2684 5337 / 6677 8321 / 2684 53 73
E-Mail :	investor@cinemax.co.in
Website :	www.cinemax.co.in

DIRECTORS

Name :	Mr. Rasesh Kanakia
Designation :	Chairman
Date of Birth/Age :	45 years
Name :	Mr. Himanshu Kanakia
Designation :	Managing Director
Date of Birth/Age :	42 years
Name :	Mr. Pravin Ghatalia
Designation :	Independent Director
Name :	Mr. Girish Dave
Designation :	Independent Director
Name :	Mr Kranti sinha
Designation :	Director
Name :	Mrs. Hiral Kanakia
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Amit D shah
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Clearing members	135	0.24%
Corporate bodies (Promoter Group Companies)	2	0.00%
Foreign Institutional Investors	11	0.02%
Mutual Funds	10	0.02%
Nationalised Banks	4	0.01%
Non Nationalised Banks	4	0.01%
Non Resident Indians	304	0.54%
Other bodies corporate	761	1.34%
Promoters	6	0.01%
Public	55380	97.81%
Relatives of Directors	4	0.01%

BUSINESS DETAILS

Line of Business :	To carry on the business of building, owning and operating Multiplexes.
Products :	Exhibition of Films

GENERAL INFORMATION

Bankers :

· The Jammu and Kashmir Bank Limited

· HDFC Bank Limited

· Axis Bank

· State Bank of India

· Bank of India

Facilities :

SECURED LOAN	31.03.2007
From Bank	(Rs in millions)
Term loans:
From banks	376.495
Cash credit from bank	99.281
Hire purchase loans	5.639
Other loans	50.282
From others	22.982

UNSECURED LOAN	31.03.2007
Short term loans	(Rs in millions)
Directors	0.228

Banking Relations :	Satisfactory
Auditors :
Name :	RSM and company Chartered Accountants
Associates/Subsidiaries :	· Vista Entertainment Private Limited · Growel Entertainment Private Limited · Nikmo Finance Private Limited · Kanakia Construction Private Limited · Kanakia Properties Private Limited · Kanakia Finance And Investment Private Limited · Kanakia Housing Private Limited · Kanakia Gruhnirman Private Limited · Evergreen Home Makers Private Limited · Kanakia Management Services · Vrusti Builders Private Limited · Gupta Infrastructure (I) Private Limited · Shrenik Investments And Finance Private Limited · Kanakia Hotels And Resort Private Limited · Indocon Developers Private Limited · Kanakia Hospitality Private Limited · Supreme Real Estate Developers Private Limited · Kanakia Medical Services Private Limited · Centaur Mercantile Private Limited · Ashish Land And Property Developers Private Limited · Evergreen Financial Services · Cine Cafe Services · Niyati Real Estate Developers Private Limited · Vrutant Real Estate Developers Private Limited · R and H Amusements And Games Private Limited · Vrusti Real Estate Developers Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
40000000	Equity shares	Rs.10/- each	Rs.400.000 millions
250000	Preference shares	Rs.10/- each	Rs.2.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
28000000	Equity shares	Rs.10/- each	Rs. 280 .000 millions
170160	Preference shares	Rs. 10/- each	Rs.1.701 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		281.701	60.000	60.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1052.227	127.203	37.500
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1333.928	187.203	97.500
LOAN FUNDS
1] Secured Loans		554.680	425.430	224.400
2] Unsecured Loans		0.228	6.694	77.500
TOTAL BORROWING		554.908	432.124	301.900
DEFERRED TAX LIABILITIES		38.582	9.229	0.000
TOTAL		1927.418	628.556	399.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		563.380	183.377	197.600
Capital work-in-progress		512.678	125.542	34.100
Goodwill		15.267	0.000	0.000
INVESTMENT		658.658	60.083	18.200
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	9.885	157.104	68.500
	Sundry Debtors	72.588	31.759	0.000
	Cash & Bank Balances	165.181	21.054	152.500
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	148.695	260.575	79.800
Total Current Assets		396.349	470.492	300.800
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	199.347	190.858	143.200
	Provisions	19.567	20.258	8.500
Total Current Liabilities		218.914	211.116	151.700
Net Current Assets		177.435	259.376	149.100
MISCELLANEOUS EXPENSES		0.000	0.178	0.400
TOTAL		1927.418	628.556	399.400

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		689.845	423.621	153.600
Other Income		20.720	14.976	1.100
Total Income		710.565	438.597	154.700
Profit/(Loss) Before Tax		102.593	121.256	47.000
Provision for Taxation		29.939	31.578	8.500
Profit/(Loss) After Tax		72.654	89.678	38.500
CIF value of import		22.294	4.838	0.000
Expenditures :
	Power and fuel cost	0.000	0.000	7.900
	Operating Expenses	359.646	265.928	0.000
	Employees Remuneration and Benefits	53.017	10.253	5.300
	Selling and administration expenses	0.000	0.000	14.200
	Administrative, Advertising and Marketing	110.588	29.296	0.000
	Interest and financial charge	39.099	24.489	3.500
	Depreciation	36.723	9.415	24.700
	Miscellaneous Expenses			3.500
	Amortization of Goodwill	3.816	0.000	0.000
	Other manufacturing Expenses	0.000	0.000	48.600
Total Expenditure		602.889	339.381	107.700

QUARTERLY RESULTS

Year	30.06.2007
Type	1st Quarter
Sales Turnover	156.700
Other Income	11.000
Total Income	167.700
Total Expenditure	121.700
Operating Profit	46.000
Interest	7.000
Gross Profit	39.000
Depreciation	11.800
Tax	6.300
Reported PAT	18.300

KEY RATIOS

Year	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.65	2.58	2.79
Long Term Debt-Equity Ratio	0.48	2.21	2.79
Current Ratio	1.17	1.60	1.85
TURNOVER RATIOS
Fixed Assets	1.55	1.95	0.76
Inventory	8.34	3.76	2.38
Debtors	13.34	26.64	1024.00
Interest Cover Ratio	3.58	5.75	14.43
Operating Profit Margin(%)	25.70	31.66	48.96
Profit Before Interest And Tax Margin(%)	20.43	34.63	32.88
Cash Profit Margin(%)	15.71	18.20	41.15
Adjusted Net Profit Margin(%)	10.44	21.18	25.07
Return On Capital Employed(%)	11.35	28.82	17.04
Return On Net Worth(%)	9.56	63.01	49.20

STOCK PRICES

Face Value	Rs.10.00
High	Rs.131.90
Low	Rs.126.20

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

The Company was incorporated on May 22, 2002 as Cineline Entertainment (India) Private Limited to primarily carry on the business of building, owning, and operating Multiplexes, Theatres and entertainment centres. The Company name was changed to Cinemax Cinemas (India) Private Limited on December 23, 2005. Subsequently, the company has converted into public limited and the name was changed to Cinemax India Limited 

The Company has carried out a restructuring exercise, wherein seven group companies i.e. Rupam Private Limited, Hariyash Theatres Private Limited, Kanakia Shelters Private Limited, Kanakia Creators Private Limited, Vrushti Theatres Private Limited, Cineline Cinemas (India) Private Limited, and Cineline Multiplex Theatres (India) Private Limited were merged with Cinemax India Limited with effect from April 1, 2006. The restructuring exercise was done with a view to consolidate the Theatres and Multiplexes operated by through various subsidiaries under the brand name of CINEMAX and also to facilitate cost effective regulatory compliance. 

Currently, the company having three wholly owned subsidiaries namely Vista Entertainment Private Limited, Growel Entertainment Private Limited and Nikmo Finance Private Limited 

The company is one of the largest Exhibition theatre chains in India operating 10 properties with 33 screens and 9,316 seats. 

January 2007, the company has entered into capital market. The company has issued 89,20,000 Equity shares to the public. Issue price is Rs.155/- per share. 

DIRECTOR REPORTS:

Management and discussion Analysis:

The Indian economy has been doing phenomenally well for the past few years and all Industry forecasts predict that it will continue to do so in the future. The economy grew at a blistering rate of 9.2% in 2006-07, exceeding expectations on all accounts. India's overall macroeconomic fundamentals are robust, particularly with tangible progress in recent years towards fiscal consolidation and a strong balance of payments position. With an upsurge in investments in the country, the outlook for the future is distinctly upbeat. In fact, economists predict that India will become the fastest growing country out of 34 developed and emerging markets and the world's third largest economy trailing USA and China by 2020. 

This fast paced growth is leading to the emergence of a larger and richer consumer market. The consumption pattern is also undergoing a change with expenditure on healthcare, transport, communication and recreation going up substantially. All this bodes well for the entertainment industry. 

Industry Scenario 

Overview
The Entertainment and Media (E and M) Industry is one of India's fastest growing sectors and is expected to outgrow the country's economy for the next five years. According to the PwC-FICCI Indian Entertainment and Media Industry Report 2006, the Indian entertainment industry was valued at over Rs. 435 billion in 2006 and is expected to grow at a Compounded Annual Growth Rate (CAGR) of around 18% to reach Rs. 850 billion by 2010. 

Specifically, the Indian film industry, the largest in the world in terms of number of films released per year (over 1000) is valued at around Rs. 85 billion as of today. It accounts for over 19% of the total revenues of the EandM industry. Over the next five years, it is estimated to grow at a rate of around 20% on an overall basis to reach Rs. 153 billion, with domestic box office revenues accounting for Rs. 102 billion. 

Industry segments 

On the whole, the Indian film industry is extremely fragmented. It has three segments- film production, film distribution and film exhibition.

Despite a rising trend towards corporatization, film production continues to be highly disorganized. Film distribution is largely dominated by a few players. Film exhibition is the least developed of all the segments. 

Film Exhibition 

Most of the 12,000 plus movie theatres in India are single screen and family owned. The screen density in their country is 12 screens per million people, way below the figure of 117 screens per million in USA and more than 40 screens per million in the European countries. According to a UNESCO study, India needs 20,000 screens to cater to the entire cinema viewing population. 

Also, despite the higher number of tickets sold in India, the total reported box office revenue is significantly lower here as compared to USA.

This is because ticket prices are much lower in India with the average being just Rs. 17. The average ticket price in a multiplex is about Rs. 100 but multiplexes currently constitute just 4% of the total number of cinema halls in the country. An increase in the number of multiplexes should result in an increase in film exhibition revenues. Thus, the opening of new multiplexes represents a significant growth opportunity for the industry. 

Multiplexes 
Multiplexes are a relatively new phenomenon. The first multiplex to open in India was in 1997. 10 years on, multiplexes contribute about 40% of the overall box office collections for certain movies, clearly proving beyond doubt the point that they have become key outlets for cinema exhibition. As of now, they account for 4% of all the cinema screens in the country.

However, with the multiplex bandwagon about to steamroll into Tier II and Tier III cities, this figure is going to increase significantly. State governments are also doing their bit by announcing tax holidays for multiplexes, thereby stimulating investments and helping projects achieve a faster breakeven. 

It is the retail boom in the country which is driving the multiplex story.

The organized retail market in the country is expected to grow from its current share of 3% of the total retail market to 8-9% by 2010. The number of malls is expected to go up to 600 in the coming 3 years. Mall developers all over the country are wooing multiplexes to occupy their top floors as anchor tenants which would ensure additional footfalls. (Multiplexes increase footfalls by 40-50%). 

Considering the above, the opportunity in the film exhibition industry especially the multiplex business is huge. Cinemax with its experience and expertise is well positioned to seize this opportunity and establish itself as the market leader in this space. 

Business Overview 

Subject is a family entertainment company primarily focused on film exhibition and gaming businesses with limited interest in mall development. The company is one of the largest film exhibition theatre chains in India and currently operates 13 properties with 39 screens and 11028 seats. It is also Mumbai's largest theatre chain with 10 properties and 31 screens. 

Cinemax has the highest first week collection amongst all theatre chains in Mumbai. In fact, it accounts for 25-30% of the box office collection in Mumbai from multiplexes. (The Mumbai territory accounts for 15% of the total box office collection in the country.) 

Cinemax is part of the Kanakia Group, which has a track record of over 20 years in real estate development. The Group has developed over 5 million square feet of residential and commercial real estate. Cinemax owns and controls all the movie exhibition businesses of the Kanakia Group. 

 Business segments 

Subject operates under three distinct business segments, film exhibition, gaming and mall development. 

Film Exhibition 

India is on the verge of a multiplex boom. The growing consumerism with the development of retail malls that have multiplexes as their anchor tenants, entertainment tax sops offered by several state governments and increasing corporatization of the film industry are all factors responsible for this.

They believe that they are in the right place at the right time to exploit this opportunity. 

The Company's primary business consists of setting up, operating and managing a film theatre chain that is a combination of high-end multiplexes and budget retrofit single screens. The Company believes in providing customer satisfaction through process enhancements and constant innovation in services and facilities such as high comfort recliner seating arrangements in the Red Lounge', massage chairs, swing chairs, karaoke facilities, open terrace cafes etc. 

 Having established itself with 11028 seats housed in 39 screens across 13 properties, the Company plans to expand its operations on a pan India basis to 77 locations, aggregating to over 75,000 seats housed in 299 screens by the end of 2010. This massive rollout is to be based on a lease model rather than the ownership model adopted by the company so far. 

Gaming 
With the country's economy doing phenomenally well in recent years, the population's disposable income has been rising steadily. People are constantly looking for new, interesting and entertaining avenues to spend this wealth. The unprecedented success of malls and multiplexes in recent times is testimony to this fact. Keeping this in mind, the Company recently forayed into the gaming business, which is currently operational under the brand name - Giggles- The Gaming Zone' at Eternity Mall, Thane. 

The game parlor is spread over 13,000 square feet and offers around 55 state-of-the-art games. With this business, the Company intends to target those customers who are looking to do something different, something fun at the malls. Given the fact that within two and half months of operation, the parlor reported revenues worth Rs. 2 million, the Company expects this business to generate reasonable additional revenues in the future. Going forward, the Company plans to expand its gaming initiative by opening several more Giggles gaming zones across the country. 

Mall Development 

The Company has developed over 200,000 square feet of mall area at Eternity Mall, Thane and over 100,000 square feet of mall area at Eternity Mall, Nagpur. It intends to construct an additional 30,000 square feet at the mall in Thane. Except for the above, currently the Company does not intend to undertake any further mall developments. 

 Revenue Mix:

a. Film Exhibition 

The revenue mix comprises of ticket sales, food and beverages (FandB) revenue, parking revenue and advertising. Out of the above, ticket sales offer the maximum revenue, but the gross margin in FandB and advertising is much higher than the revenue from ticket sales. 

 b. Gaming 

 The revenue in this segment is on a per game basis for a particular period. 

c. Mall Development

The revenue mix comprises of sale of area or lease rent. During the year, the Company has sold out most of the portion of Eternity Mall, Thane.

Eternity Mall, Nagpur will be fully leased out after retaining the area of the multiplex. 

Outlook 

Considering the retail boom and the multiplex rollout that the country will witness in the coming years, it is safe to say that the future of the company looks very promising. There appears to be little that can impede Cinemax from achieving its plan to establish a pan India presence in a cost effective manner and to build the Cinemax brand around the country. The Company's proposed expansion plan of having 77 locations by 2010 is a reflection of the immense opportunities that lie ahead. 

SUBSIDIARIES 
The Company has three subsidiaries, namely, Vista Entertainment Private Limited, Growel Entertainment Private Limited and Nikmo Finance Private Limited. Nikmo Finance Private Limited is a subsidiary of Growel  

Entertainment Private Limited 

The multiplex at Versova, Mumbai is operated under Vista Entertainment Private Limited. At the aforesaid Multiplex, various innovative and luxurious concepts have been introduced. These include recliner seats, a Karaoke counter, massage chairs. 

The multiplex at Kandivali - East, Mumbai is operated under Nikmo Finance Private Limited. This multiplex has one of largest foyer areas and one of the largest auditoriums in terms of seating capacity in a single auditorium. As per the Listing Agreement with the Stock Exchanges, consolidated financial statements have been annexed with the financial results of the Company. 

AMALGAMATION 

The Company had carried out a restructuring exercise, wherein seven of their group companies i.e. Rupam Private Limited, Hariyash Theatres Private Limited, Kanakia Shelters Private Limited, Kanakia Creators Private Limited, Vrushti Theatres Private Limited, Cineline Cinemas (India) Private Limited, and Cineline Multiplex Theatres (India) Private Limited were merged with us with effect from April 1, 2006. The High Court of Bombay sanctioned the Scheme of Amalgamation on March 24, 2006. The restructuring exercise was done with a view to consolidate the Theatres and Multiplexes operated by the Group through various subsidiaries under the brand name of CINEMAX. 

FIXED ASSETS:

· Land – Freehold

· Leasehold improvements

· Theatre building

· Plant and machinery

· Theatre Equipment and Fittings

· Furniture and fixture

· Office equipment

· Computers

· Motor car

· Theatre Furniture and Fittings

OTHER INFORMATION:

The company has changed its name during the period from Cinemax Cinemas (India) Private Limited to Cinemax India Limited with effect from 27.07.2006.

WEBSITE DETAILS:

PRIVACY POLICY 

The privacy is important to cinemax.co.in. This information helps them improve the movie going experience with better content, services and opportunities. This policy tells you about the information gathering and dissemination that they conduct. As they continue to grow, this policy may change, so please check back periodically for updates.

THE INFORMATION THEY COLLECT

They ask their users to register when they use the cinemax.co.in site and services (collectively, the "Service"). Through their online registration process, they collect a variety of information about the user, which may include, among other things, name of the person registering, location, gender, phone number, email address, user name and password. Cinemax.co.in may also request and collect other information from time to time.

They automatically track information related to use of the Service. This information may include, among other things, URL tracking information, what browser the user is using, the user's IP address, pages and ads viewed by a user and selections or other actions taken on the Service. They may track usage through cookies. A cookie is a small data file written to a user's hard drive. Cookies may be used to, among other things, allow automated log-in and may contain information such as a Login ID or other information about preferences or Internet use. Third party advertisers that they work with may also place cookies on browsers of users of their Service.

They also collect information about the movie preferences. For example, they may collect, among other things, information such as what movies tickets purchase to or what theatres you attend. They may save information sent or posted to the Service. For example, they may save messages posted in their chat rooms or other message areas or feedback left for other users. They may collect correspondence, such as emails or letters, sent to them. They may collect user responses to online polls, ads, surveys, electronic newsletters and questionnaires.

DELETION OF INFORMATION AND RECORDS

While cinemax.co.in may track and store information, cinemax.co.in shall not be obligated to do so and may delete any information and records, in whole or in part, at any time.

WHAT THEY USE THE INFORMATION FOR

They use the demographic information to enhance the user experience by, among other things, delivering you content that is relevant to the interests. They may use the contact information to provide them to notify of new services or special deals that their partners or they are offering, to distribute movie related information to you or to conduct surveys or other similar activities. When you register with them, you may choose to opt-out of receiving these notices or mailings from cinemax.co.in at the time of registration.

Cinemax.co.in does not sell or rent personal information about its customers to any third parties at this time. Cinemax.co.in does, however, perform statistical analyses of customer usage in order to measure interest in, and use of, the various parts of the Company's web site, and the Company may share that information with current and prospective advertisers, and other interested third parties. This information is aggregated data only (such as statistics), and contains no personally identifiable information whatsoever.

· Cinemax.co.in Strives to protect the personally identifiable information of the users.

· cinemax.co.in May disclose the personally identifiable information only on:

· Expressed authorization of the user to do so

· The provision of the requested service demands so

· Requirements to comply with the governing law

· Opportunity to add value to the user

However, cinemax.co.in may share aggregated statistical information about the use of the cinemax.co.in web site with partners and associates for the purpose of research and analysis. Even in these cases, cinemax.co.in will strive to protect the individual users' personally identifiable information.

Cinemax.co.in may sell, share or transfer personally identifiable information about its customers with any successor in interest (e.g. if the Company is sold to a third party). Additionally, in certain cases, cinemax.co.in may be required to disclose the personally identifiable information when the law requires it, or in response to any demand by law enforcement authorities in connection with a criminal investigation, or civil or administrative authorities in connection with a pending civil case or administrative investigation.

Cinemax.co.in users should also be aware that if they voluntarily disclose personal information in any chat areas or bulletin boards within the cinemax.co.in web site, that information might be collected and disseminated by third-parties, and result in, among other things, unsolicited inquiries, messages, and offers from third parties. This third-party conduct is out of the control of the Company.

SECURITY
Cinemax.co.in has implemented security measures to protect against the loss, misuse and alteration of the information under their control. They protect the secure areas of their Site with a firewall. Although cinemax.co.in has implemented adequate security measures, the site has contracted Verisign to provide an extra assurance of security. Although, the site is completely virus-free, the User is advised to employ virus scans for extra security, as cinemax.co.in is not liable for any virus picked up at the time of transmission.

CHOICE/OPT-OUT
Cinemax.co.in allows users the option to opt-out of receiving communications from us and their partners at registration.

GENERAL INFORMATION

Cinemax.co.in tries its best to collect data from the most authentic source. However, at any stage, cinemax.co.in is not liable for any loss, monetary or otherwise, resulting from the usage of their data.

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.39.43
UK Pound	1	Rs.80.44
Euro	1	Rs.55.66

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	9
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	---
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		69

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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