MIRA INFORM REPORT

Report Date :

20.10.2007

IDENTIFICATION DETAILS

Name :	BANNARI AMMAN SUGARS LIMITED
Registered Office :	252, Mettupalayam Road, Coimbatore – 641 043, Tamilnadu
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	01-12-1983
Com. Reg. No.:	18-1358
CIN No.: [Company Identification No.]	L15421T21983PLC001358
TAN No.: [Tax Deduction & Collection Account No.]	CMBB03043F
PAN No.: [Permanent Account No.]	AAACB8933G
Legal Form :	Public limited liability company. The company’s shares are listed on the stock exchange
Line of Business :	Manufacturer of Sugar, Molasses, Granite Blocks, Polished Granite Slabs, Polished Granite Tiles, Monuments, Rectified Spirit, Denatured Spirit, Denatured Spirit, Netural Spirit, Fusel Oil and Bio Compost.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 11000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. It is faring well. Financial position is good. Payments are usually correct and as per commitments. Trade relations are fair. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long run

LOCATIONS

Registered Office :	252, Mettupalayam Road, Coimbatore – 641 043, Tamilnadu, India
Tel. No.:	91-422-2450045/2451515/2302277
Fax No.:	91-422-2431199/2305599
E-Mail :	bascbe@giasmd01.vsnl.net.in / bascbe@vsnl.com
Website :	http://www.bannari.com
Factory 1 :	Ø Sugar Unit, Co-Generation & Granite Processing Alathukombai, Erode District, Tamilnadu Ø Distillery Sinnapuliyur, Erode District, Tamilnadu Ø Bio-Compost Modur, Erode District, Tamilnadu Ø Wind Mills Radhapuram, Irukkandurai And Karunkulam Villages Radhapuram Taluk Tirunelveli District Ø Sugar Unit, Co-Generation, Distillery & Bio-Compost Alaganchi, Mysore District, Karnataka

DIRECTORS

Name :	Mr. V Venkata Reddy
Designation :	Vice Chairman
Name :	Mr. B Saravanan
Designation :	Joint Managing Director
Age :	32 years
Qualification :	Commerce Graduate
Experience :	5^th July 2000
Name :	Mr. N Solairajan
Designation :	Executive President
Name :	Mr. P Dharmalingam
Designation :	Executive President (Unit I)
Name :	Mr. R Murugesan
Designation :	Vice President
Name :	Mr. V L Rajagopal
Designation :	Vice President (Unit I)
Name :	Mr. A Ramaswamy
Designation :	Vice President (Distillery Division)
Name :	Mr. K Sundaramoorthi
Designation :	Vice President (Distillery Unit)
Name :	Mr. R Ramgopal
Designation :	Assistant Vice President (Unit II)
Name :	Mr. C Palaniswamy
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Indian
Individuals/ Hindu Undivided Family	1525070	15.99
Central Government/ State Government(s)
Bodies Corporate	2931887	30.73
Public shareholding
Institutions
Mutual Funds/ UTI	137242	1.44
Financial Institutions / Banks	515	0.01
Foreign Institutional Investors	20369	0.21
Non-institutions
Bodies Corporate	1106758	11.60
Individuals
Individuals -i. Individual shareholders holding nominal share capital up to Rs 0.100 Millions	1640243	17.19
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions	2173240	22.78
Clearing Member	4376	--
Total	9539700	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Sugar, Molasses, Granite Blocks, Polished Granite Slabs, Polished Granite Tiles, Monuments, Rectified Spirit, Denatured Spirit, Denatured Spirit, Netural Spirit, Fusel Oil and Bio Compost.
Products :	Item Code No. Product Description 17019902 White Crestal Sugar 22072000 Industrial Alcohol 68022301 Granite Block and Slabs

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Tamilnadu – Sugar	Tones Per day	NA	4000
Karnataka– Sugar	Tones Per day	NA	5000
Granite Slabs	Sq. Mtr Per annum	50000	50000
Granite Tiles	Sq. Mtr Per annum	95000	10000
Monuments	Sq. Mtr Per annum	2500	2500
Tamilnadu –Industrial Alcohol	Millions Ltrs. Per annum	24	16.33
Karnataka - Industrial Alcohol	Kilo Ltrs. Per day	60	60
Tamilnadu - Power	MW Per Hour	NA	20
Karnataka- Power	MW Per Hour	NA	16 and 20
Tamilnadu - Power		NA	8750 KWH

GENERAL INFORMATION

No. of Employees :

2200

Bankers :

Ø Punjab National Bank

Ø Bank of Baroda

Ø Canara Bank

Ø The Federal Bank Limited

Ø The Karur Vysya Bank Limited

Ø Union Bank of India

Ø Indian Overseas Bank

Ø State Bank of Travancore

Ø State Bank of India

Ø The Lakshmi Vilas Bank Limited

Facilities :

SECURED LOANS	Rs. in millions
FROM BANKS
Cash Credit Loans	207.039
Packing Credit	45.285
Term Loans	789.621
FROM OTHERS Sugar Development Fund	582.961
Total	1624.906
UNSECURED LOANS
Loan under Sales tax deferral scheme	464.312
Sugar Development Fund	1.940
Total	466.252

Banking Relations :	Good
Auditors :
Name :	Ø M/s P N Raghavendra Rao & Company Chartered Accountants Ø Internal Auditors M/S Srivatsan & Gita Chartered Accountants Ø Cost Auditor Mr. M Nagarajan Cost Accountant
Associates/Subsidiaries :	Bannari Amman Spinning Mills Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10,000,000	Equity Shares	Rs. 10/- Each	Rs.100.000 millions
100,000	Redeemable Shares	Rs. 100/- each	Rs.10.000 millions
	Total		Rs. 110.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
9,539,700	Equity shares	Rs. 10/- each	Rs. 95.397 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		95.397	95.397	95.397
3] Reserves & Surplus		2715.861	2007.014	1619.233
NETWORTH		2811.258	2102.411	1714.630
LOAN FUNDS
1] Secured Loans		1624.906	2620.869	2636.700
2] Unsecured Loans		466.252	472.409	397.700
TOTAL BORROWING		2091.158	3093.278	3034.400
DEFERRED TAX LIABILITIES		518.922	501.030	423.630
TOTAL		5421.338	5696.719	5172.660
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3133.198	3311.549	2736.999
Capital work-in-progress		143.177	100.949	49.748
INVESTMENT		34.311	34.043	33.821
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1991.112	2315.092	2607.416
	Sundry Debtors	651.515	535.728	750.158
	Cash & Bank Balances	158.832	29.524	23.309
	Other Current Assets	23.119	87.820	58.968
	Loans & Advances	443.179	221.091	192.585
Total Current Assets		3267.757	3189.255	3632.436
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities and Provisions	1157.105	939.077	1280.344
Total Current Liabilities		1157.105	939.077	1280.344
Net Current Assets		2110.652	2250.178	2352.092
TOTAL		5421.338	5696.719	5172.660

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		6140.142	4695.926	5527.679
Other Income		28.381	62.123
Total Income		6168.523	4758.049	5527.679
Profit/(Loss) Before Tax		957.166	562.621	459.333
Provision for Taxation		187.417	126.557	72.358
Profit/(Loss) After Tax		769.749	436.064	386.975
Earnings in Foreign Currency :
Total Earnings		250.967	319.723	293.144
Imports :
	Stores & Spares	30.331
	Capital Goods	18.232
Total Imports		48.563	67.553	NA
Expenditures :
	Raw Materials Purchased	2396.008	1865.402
	Manufacturing and Other Expenses	2131.684	1753.288
	Excise Duty	143.405	145.192	5068.346
	Interest	109.560	111.536
	Depreciation	430.700	320.010
Total Expenditure		5211.357	4195.428	5068.346

SUMMARISED RESULTS

PARTICULARS	31.03.2007
Type	Full Year
Sales Turnover	7928.700
Other Income	53.200
Total Income	7981.900
Total Expenditure	6410.400
Operating Profit	1571.500
Interest	76.600
Gross Profit	1494.900
Depreciation	364.300
Tax	215.200
Reported PAT	947.700

QUARTERLY RESULTS

PARTICULARS	30.06.2007	30.09.2007
Type	1 Qtr.	2 Qtr.
Sales Turnover	1377.600	1392.200
Other Income	2.200	27.300
Total Income	1379.800	1419.500
Total Expenditure	1218.500	1292.800
Operating Profit	161.300	126.700
Interest	11.500	15.100
Gross Profit	149.800	111.600
Depreciation	76.000	78.000
Tax	8.800	4.500
Reported PAT	76.400	41.500

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	1.06	1.61	1.81
Long Term Debt-Equity Ratio	0.73	0.81	0.81
Current Ratio	1.37	1.11	1.07
TURNOVER RATIOS
Fixed Assets	1.31	1.14	1.34
Inventory	3.00	2.04	2.09
Debtors	10.90	7.83	9.29
Interest Cover Ratio	9.16	5.59	4.10
Operating Profit Margin(%)	23.26	19.98	17.98
Profit Before Interest And Tax Margin(%)	16.61	13.62	12.44
Cash Profit Margin(%)	18.55	15.03	12.32
Adjusted Net Profit Margin(%)	11.90	8.67	6.78
Return On Capital Employed(%)	21.28	13.78	13.80
Return On Net Worth(%)	31.33	22.85	21.12

LOCAL AGENCY FURTHER INFORMATION

Fixed Assets :

Ø Land-Free hold

Ø Land-Lease hold

Ø Buildings

Ø Plant and Machinery

Ø Furniture, Fixtures,

Ø Office and Canteen

Ø Equipments

Ø Live Stock

Ø Motor Vehicles

History

Bannari Amman Sugars Limited (BASL) was incorporated in December 1983. The company was promoted by S V Balasubramanian and K S Thirumalaiswamy to manufacture sugar in Southern India. Now, it has scattered its activities in Distillery, Granites, Co-generation of Power, Wind Mills operations.

BASL came out with a public issue in Sep' 1985, to set up a sugar plant in Alathukombai in Tamil Nadu. This plant was commissioned with initial capacity of 1250 tonnes of cane crush per day. It manufactures sugar using the conventional double sulphitation process. The company's success in its first venture, led the company to make a next step towards its way. In 1992 the company had set up a sugar mill with a daily cane crushing capacity of 2500 TCD in Alaganchi village, Mysore district in the state of Karnataka. This project was financed by rights issue of zero interest fully convertible debentures of Rs. 196.875 Millions, secured redeemable non-convertible debentures for Rs. 140 Millions issued to Citibank N.A. and term loan of Rs. 80 Millions received from ICICI Ltd. Total capacity of sugar mills in Tamil Nadu and Karnataka increased to 4000 TCD & 5000 TCD over the period. 

The company diversified its activity in several segments. As a first step, it started to manufacture Citric Acid in 1987 with annual capacity of 5,400 tonnes. Subsequently it diversified into the lucrative field of granite exports by setting up a 100% EOU in Nov' 1990, at Alathukombai to produce 50,000 sq mtr of polished granite slabs and 60,000 sq mtr of granite tiles per annum. It has acquired and taken on lease several quarries in Tamil Nadu, Karnataka, Andhra Pradesh and Rajasthan.  

In 1995, M/s Coimbatore Alcohol and Chemicals Limited (CACL) amalgamated with BASL. The company allotted 20,00,000 equity shares of Rs. 10/- each at a premium of Rs. 80/- per share to the shareholders of CACL as per the scheme of amalgamation. 

The company made its next diversification for Co-generation of power in the year 2000. It has set up a co-generation power plant with an installed capacity of 16 MW in the sugar factory in Karnataka. The company has also set up a 20 MW co-generation plant at Alathukombai in Aug' 2002 and an additional 20 MW co-generation plant at Alaganchi in Mar' 2004. Total capacity of co-generation power plant stands at 56 MW.  

During 2004-05, the company has diversified into windmill operation and commissioned 7 wind turbine generator at Radhapuram in the state of Tamil Nadu. The windmill has started its operation. 

During 2005-06, the company proposes to increase the installed capacity of the sugar unit in Karnataka from 5000 TCD to 7500 TCD.

During the year under review, in Tamilnadu sugar factory 6.86 lakh tonnes of sugarcane was crushed as against the estimated cane crush of 6 lakh tonnes. In Karnataka sugar factory 10.33 lakh tonnes of sugarcane was crushed as against estimated cane crush of 12 lakh tonnes of sugarcane. Free sugar prices continued to remain favourable throughout the year. 

Co-generation of Power 

The co-generation plant in Tamilnadu had generated 163.26 million units of power and exported 125.11 million units to the Tamilnadu Government Grid. In Karnataka sugar factory, the 16 MW co-generation plant had generated 89.58 million units of power and 20 MW co-generation plant had generated 66.70 million units of power and exported 76.04 million units and 32.39 million units respectively to Karnataka Government Grid. 

Distillery Division 

The distillery unit in Sinnapuliyur, Erode District in the State of Tamilnadu has worked for 328 days and produced 16.78 lakh B.Ltrs of Rectified Spirit and 132.31 lakh B.Ltrs of Neutral Spirit. 

The distillery in Karnataka Sugar Factory worked for 143 days and produced 11.15 lakh B.Ltrs of Rectified Spirit and 37.98 lakh B.Ltrs of Neutral Spirit. 

Granite Division 

88,574 square metres of Granite slabs, 8,655 square metres of tiles and 2651 square metres of monuments were produced. The demand and supply of the products remained steady throughout the year. 

Wind Mill 

Wind mills had generated 15.03 million units of power and exported the same to the TNEB grid. 

Prospects for the Current year 2006 - 2007 

During the current financial year, the installed capacity of the sugar unit in Karnataka will be increased from 5,000 TCD to 7500 TCD. It is estimated to crush 10 lakh tonnes of sugarcane in the sugar factory in Tamilnadu and 18 lakh tonnes of sugarcane in the sugar factory in Karnataka. It is estimated to produce 150 lakh B.Ltrs of spirit in distillery unit in Tamilnadu and 64.35 B.Ltrs of spirit in distillery unit in Karnataka. 

The sugar prices are expected to remain favourable. Increased export of granite products is expected. 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT 

INDUSTRY STRUCTURE AND DEVELOPMENTS 

World Sugar Production during 2005 - 06 is estimated at 147.8 million tonnes, which is slightly an increase from 2004 - 05 production, but about 1.56 lakh tonnes, short of projected world sugar consumption. The growth in production will be from the record harvest in Brazil and quick recovery of production in India. With the anticipated supply deficit for the season 2005 - 06 alongwith the declining stocks in China, India and the Russian Federation, World sugar prices are seen rising. 

In India, the production for the sugar year 2005 - 06 is estimated at 191 lakh tonnes and the consumption is estimated at 185 lakh tonnes. It is also estimated that in the year 2006 -- 07, the sugar production will increase further to a record level of 225 lakh tonnes. Sugar prices are expected to remain favourable due to changes in world sugar market. 

There is an overall improvement in sugar sector in India. Many sugar companies are in the process of expanding their sugar crushing and co-generation capacities. The Government of India has committed itself to promote renewable sources of energy. The progress of co-generation of power can be accelerated if problems of tariff fixation, third party' sales and timely payments are ironed out. Government of India has mandated the blending of petrol with 5% ethanol, which is being implemented in stages. 

OPPORTUNITIES 

The consumption of sugar, power, ethanol and industrial alcohol are expected to continuously increase. As an integrated sugar complex, the Company is expanding the installed cane crushing capacity at Karnataka unit from 5000 TCD to 7500 TCD which would further improve the production of industrial alcohol and power generation. The cane availability is quite encouraging due to favourable monsoon. 

RISKS & CONCERNS 

1. Sugar industry is subject to various uncertainties and adversities including shortage of rainfall, amendments in Government policies and regulations, changes in Statutory Minimum Cane Price etc., 

CONTINGENT LIABILITIES

a) The company has preferred a Writ appeal before the Division Bench of the Hon'ble High Court, Madras challenging the order pronounced in Writ Petition No.4030/2002 dated 28 - 02 - 2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 1 3 - 1 1 - 2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs. 47.639 Millions.

b) Sugar Unit - 1 at Sathyamangalam was permitted to sell 100% of the Sugar production as Free Sugar for a period of 8 years from 1985 - 86 Sugar Season. Chief Director (Sugar), Directorate of Sugar, Department of Food, New Delhi, has restricted the entitlement of Free sale Sugar Incentive to 2,75,000 quintals production per season by a subsequent notification. A writ petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar. The approximate unprovided quantum under dispute is Rs. 68.335 Millions.

c) Sugar Unit - 1 at Sathyamangalam was allowed to sell 100% of the Sugar production as Free Sugar for 8 years

from 1985 - 86 Sugar Season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the

difference in excise duty between levy and free sale sugar. In respect of incentive sugar sold by Unit-1 from 20-09-1991 to 31 - 01 -1994, the Central Excise Department has issued showcause noticesto the Company to showcause why the difference of Rs. 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company. The Company has filed Writ Petitions in Madras High Court and obtained and interim injunction against the show cause notices. The excise duty in dispute is Rs. 14.999 Millions.

d) The Entry Tax of Rs. 1 5.728 Millions on Inter-state purchase of rough blocks is disputed.

e) 38000 MTs of Raw Sugar has been imported under Advance Licensing Scheme with an obligation to export 36190.48 MTs of sugar within a period of 24 months from the date of issue of license. Out of the above obligations the company has exported 7380.48 MTs upto the year ended 31 - 03 - 2006. In case the company does not fulfill its above export obligation within the stipulated period, Rs. 8462.75 per tonne has to be paid as duty.

f) The company has received a demand for payment of excise duty for Rs. 14.843 Millions on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filled in Hon'ble High Court of Madras.

g) The company has been asked to pay Electricity Tax of 1.0 paise per unit with effect from 16th June, 2003 for the electricity consumed from own captive power generators which has been disputed by filling a Writ Petition before the Hon'bje High Court of Madras. The approximate quantum under dispute is Rs. 6.226 Millions (.

Attached Web Details :

Granite Division

A 100% Export Oriented Unit, established in the year 1991 for manufacture of Polished Granite Slabs, Tiles and Monuments. One of the most modern and well planned granite plants in India, having a reputed clientele base all over the world including USA, Germany, Belgium, Italy, Australia, Middle East and the Far East. Granite Division Has own captive granite quarries in some of the well-known Indian materials, which ensure timely delivery of the finished goods. Also exports rough Granite Blocks.

Distillery Division

DISTILLERY DIVISION The Distillery Division produces over 60,000 litres of Industrial Alcohol per day. The distillery has set up a bio-gas plant with the help of technical know-how from France, to provide an alternate source of energy. This reflects the company's growing concern for the environment and the need to find suitable alternatives.

Distillery being a down stream industry of Sugar, Bannari Amman Sugars Limited, produces over 60,000 litres of industrial alcohol and extra neutral spirit per day from sugarcane molasses. The technical know-how from France meets the strict pollution control measures to protect environment and also need to find sustainable alternative source of energy with a bio-methanisation plant.

Bio-Compost Fertilizer Unit

Let us add value to the soil. Biocompost plays a key role in maintaining soil fertility. It possesses many desirable properties and exerts beneficial efforts on the physical, chemical and biological characteristics of the soil. In addition, it improves the efficient usage of chemical fertilizers. Biocompost being used in Kenya, Philippines and America has consistently increased crop yield, while reducing the usage of chemical fertilizers.

Nutrient rich Bannari Amman Biocompost

BIO COMPOST is prepared in Bannari Amman Sugars Limited, by mixing the nutrient rich pressmud from sugar mills with Nitrogen; Phosphorous and Potassium rich Spent wash obtained from Distillery unit. In this process, decomposing beneficial bacteria and aero booster are engaged for proper and better decomposition of the above mixture.

Co-Generation

The Co-generation Plant at the Sugar Unit II with two Turbo Alternators of capacities 16 and 20 MW, exports the surplus power to the Karnataka State Electricity Board's Grid. The total Power Generation capacity at Unit II is now 36 MW. Another Co-Generation Plant for generating 20 MW electricity at the sugar Unit-1 has been installed; The Surplus power is exported to the TamilNadu State Electricity Board.

BIO-DIESEL

The Company's Bio Diesel Plant at Sathyamangalam, Tamilnadu, has commenced production of 3000 litres of Bio Diesel per Day, from multi feed stock viz Jatropha, Pungan seeds etc.

For promotion and popularization of Jatropha as a Bio Fuel Crop for afforestation of Non Forest Wastelands, the Company is providing training and all technical assistances to the farmers of Coimbatore, Erode, Karur and Dindigul districts of Tamilnadu, and has plans to plant Jatropha in more than 10,000 Acres by 2009-10.

The Company has also arranged financial assistance to the farmers under tie-up arrangements with banks.

Farmers having uncultivable/degraded land, wasteland with minimum water source, having large extent of lands in drought prone area, willing to take up long term plantation in wastelands with minimum risk, are now having opportunity to harvest money.

Aforestation of the existing wastelands in the rural India by using Jetropha Curcus may increase the rural employment opportunities and the income for the well being of the rural India as a whole and contribute to the energy security of the country.

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.39.57
UK Pound	1	Rs.81.01
Euro	1	Rs.56.35

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

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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