MIRA INFORM REPORT

Report Date :

20.09.2007

IDENTIFICATION DETAILS

Name :	TEXMACO LIMITED
Registered Office :	Belgharia, Kolkata – 700 056, West Bengal
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	04.08.1939
Com. Reg. No.:	9800
CIN No.: [Company Identification No.]	L99999WB1939PLC009800
TAN No.: [Tax Deduction & Collection Account No.]	CALT02779A
Legal Form :	It is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers of Textile Machinery, tools, Steel Ingots and Castings, Chemical Plant and Boilers.

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 6526000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Belgharia, Kolkata – 700 056, West Bengal, India
Tel. No.:	91-33-25391631 / 1202 / 1613 / 1201 / 1713/ 5392448
Fax No.:	91-33-25392448
E-Mail :	texsvpcom@texmaco.in
Website :	http://www.texmacoindia.com
Corporate Office :	Birla Building, 9 /1, R. N. Mukherjee Road, Kolkata - 700 001, West Bengal
Tel. No.:	91-33-2204379
Fax No.:	91-33-2205833
Factory 1 :	Engineering Works v Belgharia, Kolkata, West Bengal, India v Agarpara, West Bengal, India v Sodepur, West Bengal, India v Panihati, West Bengal, India
Regional Offices:	Located at :- v Mumbai, Maharashtra, India v Coimbatore, Tamilnadu, India v Chennai, Tamilnadu, India v New Delhi, India

DIRECTORS

Name :	Dr. K. K. Birla
Designation :	Chairman
Name :	Mr. Saroj Kumar Poddar
Designation :	Executive Vice Chairman
Date of Birth/Age :	60 years
Qualification :	B.Com. (Hons.)
Experience :	37 years
Date of Appointment :	01.01.2006
Previous Employment :	Poddar Heritage Investments Limited
Name :	Shri B. P. Bajoria
Designation :	Director
Name :	Shri H. C. Gandhi
Designation :	Director
Name :	Shri A. C. Chakrabortti
Designation :	Director
Name :	Shri B. Rai
Designation :	Director
Name :	Shri Manish Gupta
Designation :	Director
Name :	Dr. H. Sadhak
Designation :	Director
Name :	Mr. S. Dhasarathy
Designation :	Director
Name :	Shri A. K. Nanda
Designation :	Whole time Director

KEY EXECUTIVES

Name :	Shri Ramesh Maheshwari
Designation :	President and Chief Executive Officer
Date of Birth/Age :	73 years
Qualification :	M. Com. LLB
Experience :	50 years
Date of Appointment :	01.02.1962
Previous Employment :	F & C Osler (India) Limited and Sitster Concerns
Name :	Shri A. K. Vijay
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	5424890	52.54
Banks, Insurance Cos., and Fl's	543223	5.26
Mutual Funds and U.T.I	1010292	9.78
Corporate Bodies	1894063	18.34
NRI/OCB	145012	1.41
Indian Public	1293649	12.53
Others	14631	0.14
Total	10325760	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Textile Machinery, tools, Steel Ingots and Castings, Chemical Plant and Boilers.

Products :

The Generic Names of Principal Products/Services of the Company is:-

Product Description	Wagons
ITC Code	8606

Product Description	Steel Castings
ITC Code	8607

Product Description	Structurals
ITC Code	7308

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Ring frames, doublers and worsted ring frames	Nos.	1035	1173	--
Carding Engines	Nos.	180	300	--
Draw Frames	Nos.	410	410	--
Speed frames	Nos.	--	--	--
Steel Castings & Ingots (including Draft Gear 4000 sets)	MT	9600	9600	13498
Power Tilller/ Reaper	Nos.	--	--	273
Wagons	MT	38400/39000	60000	49645
Water tube boilers and package boilers	Nos.	36	36	2
Sugar mill machinery (complete plant 1200 tons Crushing Capacity)	Nos.	2	2	190 MT
Structurals	MT	20400	20400	2880
Points & Crossings	Sets	--	2000	--
Site Fabrication and Erection	MT	--	--	3231
Pressure Vessels, Heat exch. & Chemical Machineries	MT	1500	1500	627
Diesel Road Rollers	Nos.	400	400	--
Diesel-Powered Forklift Trucks (above 8 tons capacity)	Nos.

GENERAL INFORMATION

Suppliers :

v Bright Engineering Industry

v Bhola Trading

v FABCO

v Laxminarayan Engineering works

v Lalbaba Industrial Corporation

v Main Engineering Concern

v Mamoni Industries

v P.D Engineering Concern

v Rajendranath Kundu and Sons

v Saket Enterprises

v Spares and Equipments

v S.S Enterprises

v Star Electric

v Sas Industries

v Weldmen Synergic Private Limited

No. of Employees :

4000

Bankers :

State Bank of India

Facilities :

Secured Loans (Rs. In millions):

From Banks : Secured by hypothecation of Finished Goods and part of Raw Materials, Stock-in-Process, Stores, Book Debts, etc. and second charge on Fixed Assets Cash Credit Accounts / WCDL / FCNR (B)	135.310
Term Loans : Secured by first equitable mortgage/charge on the immovable/movable properties both present and future of Belgharia, Agarpara and Sodepur Units of the Company created/to be created except exclusive first charge by way of hypothecation in favour of the respective Financial Institutions on the Plant & Machinery acquired/ to be acquired under their Equipment Finance Scheme and Working Capital loan From Industrial Development Bank of India	4.500
Secured by Letter of Credit opened by the Buyer from State Bank of India	69.810
Project Loans :
From State Bank of India	178.444
From Landesbank Wutterberg, Germany	66.019
Loan from Others - Secured by Bank Guarantee under Subsidised Industrial Housing Scheme	0.168
Total	454.251

Unsecured Loans (Rs. In millions):

From Body Corporates	1.574
Fixed Deposit from employees/ex-employees	2.419
Advance against sale of land	75.000
Total	78.993

Banking Relations :	Satisfactory
Auditors :
Name :	K. N. Gutgutia and Company Chartered Accountants
Address :
Subsidiaries :	v High Quality Steels Limited v Shree Export House Limited v Macfarlane and Company Limited v Texmaco Machines Private Limited v Neora Hydro Limited - 50% Joint Venture.

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1,40,00,000	Equity Shares	Rs.10/- each	Rs.140.000 millions
40,000	Preference Shares	Rs.100/- each	Rs.4.000 millions
60,000	Shares	Rs.100/- each	Rs.6.000 millions
	Total		Rs.150.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1,03,25,760	Equity Shares	Rs.10/- each	Rs.103.257 millions
Add :	Forfeited Shares		Rs.0.001 million
	Total		Rs.103.258 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		103.258	103.258	103.258
2] Reserves & Surplus		1528.150	1298.336	1152.679
NETWORTH		1631.408	1401.594	1255.937
LOAN FUNDS
1] Secured Loans		454.251	533.070	382.624
2] Unsecured Loans		78.993	83.168	110.986
TOTAL BORROWING		533.244	616.238	493.61
DEFERRED TAX LIABILITIES		22.452	15.632	18.294
TOTAL		2187.104	2033.464	1767.841
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1191.122	750.120	762.300
Capital work-in-progress		0.000	179.626	0.596
INVESTMENT		521.213	550.187	470.062
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	919.754	361.086	613.932
	Sundry Debtors	1222.154	636.090	555.665
	Cash & Bank Balances	70.967	177.225	316.189
	Other Current Assets	8.662	7.950	9.068
	Loans & Advances	688.485	1102.827	406.196
Total Current Assets		2910.022	2285.178	1901.05
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2382.624	1560.695	1267.422
	Provisions	80.270	192.317	119.067
Total Current Liabilities		2462.894	1753.012	1386.489
Net Current Assets		447.128	532.166	514.561
MISCELLANEOUS EXPENSES		17.641	21.365	20.322
TOTAL		2187.104	2033.464	1767.841

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		3739.566	3115.327	2279.683
Other Income		32.025	25.930	22.606
Total Income		3771.591	3141.257	2302.289
Profit/(Loss) Before Tax		431.354	287.316	190.462
Provision for Taxation		139.120	90.615	15.190
Profit/(Loss) After Tax		292.234	196.701	175.272
Total Export		38.879	95.717	134.567
Imports :
	Raw Materials	157.493	21.294	0.000
	Stores & Spares	544.965	109.404	177.938
Total Imports		702.458	130.698	177.938
Total Expenditure		3340.237	2853.941	2111.827

QUARTLY RESULTS

PARTICULARS	30.06.2007
Type	1^st Quarter
Sales Turnover	1429.900
Other Income	3.000
Total Income	1432.900
Total Expenditure	1244.600
Operating Profit	188.300
Interest	7.400
Gross Profit	180.900
Depreciation	15.600
Tax	51.900
Reported PAT	113.700

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.42	0.47	0.61
Long Term Debt-Equity Ratio	0.13	0.25	0.42
Current Ratio	1.03	1.13	1.19
TURNOVER RATIOS
Fixed Assets	2.91	2.87	2.28
Inventory	7.43	8.04	5.36
Debtors	4.69	6.58	6.09
Interest Cover Ratio	5.20	4.42	3.23
Operating Profit Margin(%)	12.12	10.34	9.51
Profit Before Interest And Tax Margin(%)	11.02	9.25	8.20
Cash Profit Margin(%)	7.08	5.94	6.47
Adjusted Net Profit Margin(%)	5.98	4.85	5.16
Return On Capital Employed(%)	27.31	21.28	16.47
Return On Net Worth(%)	20.84	16.24	16.50

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated in the year 1939 at Kolkata in West Bengal having Company Registration Number 9800.

The hard times of company began in 1987-88 when the company started incurring losses. The losses started accumulating, as a result the BIFR declared the company as a sick unit. ICICI worked out a rehabilitation package for the company.

In 1994-95, the company managed to come out of the red, and wrote-off a part of its term loans by transferring the cement division to the Zuari Agro Chemical division. During the same year Subject earned foreign exchange worth Rs. 236.700 millions of which export of goods accounted for Rs. 66.700 millions. Company is negotiating a joint venture in collaboration with Hawa Machinery, Japan, which has been supplying technology to the company for the past five years.

In 1998-99, the company bagged a prestigious order from Noell Stahl-und Maschinenbau GmbH, Germany for supply of hydraulic gates and allied equipments to Kali Gandaki H E P project in Nepal, which progressed satisfactorily and is nearing completion.

BUSINESS

The company is engaged in the business of manufacturing of Ring frames, Doublers and Worsted Ring Frames, Carding Engines, Draw Frames, Speed Frames, Combers & Lap Formers, Steel Castings and Ingots, Wagons, Water Tube Boilers and Package Boilers, Sugar Mill Machinery, Structurals, Points and Crossings, Pressure Vessels, Heat Exchangers and Chemical Machineries, Diesel Road Rollers, Diesel Powered for Klift Trucks and Miscellaneous.

The company manufactured and import substitute – cotton spinning machinery. That set the company rolling on the growth path. After that, the company began putting in the market, railway wagons, industrial boilers, road rollers, hydraulic steel structures, pressure vessels and heat exchangers. Besides, it is engaged in textiles, shipping and cement.

The company import technology from :

Howa Machinery Limited, Japan

High Speed Comber, Model “KZ 3”, and Super Lap Former Model

“DY. NO.5”

Combstion Systems Limited, UK

FBC Water Tube Boiler

The company’s fixed assets of important value include land, buildings, roads, railway siding, plant & machinery, electrical machinery, office and ancillary equipments, furniture & fittings, and vehicles.

Financial Result

During the year under review, there has been a steady improvement in the Company's working. The Gross Turnover registered an increase of 21% at Rs.4761.300 millions compared to Rs.3921.700 millions in the previous year. The turnover for the year does not include the value of free-supply inputs including steel and components of over Rs.1932.000 millions provided to the Company by Indian Railways and other clients for some large value contracts. The compound annual growth of the Company's turnover has been more than 37% over last 5 years, which marks a significant turn-around. 

There was a commendable all-round improvement in the Company's operations during the year. The gross profit (PBDT) increased by 46.5% at Rs.483.700 millions against Rs.330.100 millions, and profit before tax (PBT) by 50% at Rs.431.400 millions against Rs.287.300 millions in the previous year. The net profit at Rs.284.800 millions was higher by 50% compared to Rs.190.100 millions in the previous year. The Tax liability for the year has increased to Rs.139.100 millions from Rs.90.500 millions in the previous year. The Company had Tax set-offs available in the previous years, which had reduced the tax burden. However, full tax liability has been provided in the current year. The Deferred Tax Liability for the year has been created in the Profit and Loss Account in accordance with the Accounting Standard 22 'Accounting for taxes on Income', issued by the Institute of Chartered Accountants of India. 

In view of the sustained improvement in the working results as mentioned above, Directors are pleased to recommend a dividend of 40% on the equity capital of the Company. 

HEAVY ENGINEERING DIVISION

ROLLING STOCK

The Company achieved a record turnout of 2843 wagons (VUs) during the year as against 2124 VUs in the previous year, an increase of approx 34%. This was despite the late release of orders by the Indian Railways for 2006-07 RSP in September'06. Besides, the performance was affected owing to continued shortage of free-supply items by the Railways, viz. wheelsets, bogies, and couplers. Fortunately, the Railways have decided to remove bogies and couplers from the list of free supply items in their wagon procurement programme for the current year. It would enable the sourcing and procurement of these critical items directly by the Industry as per their wagon production plan. 

It bears special mention that in view of the excellent performance of the Company in face of all odds, it was awarded an additional order by the Railways for 368 wagons (VUs) in February'07 (within 4 months of original order placement) by diverting it from other non-performing units. The Company has also earned the distinction of being the sole recipient in April'07 of further 30% quantity of the original order in exercise of the option clause under the contract. 

The Railways have announced a massive programme for building a modern wagon fleet with high axle load, better payload-tare ratio using light construction materials, such as Stainless Steel, Aluminium, etc. They have floated the largest ever tender for over 10,000 wagons (VUs) for 2007-08, which include a large percentage of new design BOXNHL and BCNHL wagons with Huck Bolt construction (in place of rivets), special imported couplers and high capacity draft gears. Meanwhile, the Company has received orders from the Railways for BOXNLW and BOXNAL wagons to be made of Stainless Steel and Aluminium, respectively. 

The Company also enjoys a dominant position in the non-railway segment of commodity-specific special purpose wagons. The demand for these wagons is growing fast in the wake of the new policy initiatives of the Ministry of Railways to promote Public Private Partnership (PPP) in freight movement.

The current order book of the Company in this segment comprises 2655 wagons (VUs), which includes substantial orders for Container Flat rakes and wagons for bulk transportation of Alumina, Caustic Soda, Food Grain, Cement, Iron Ore, Coal, etc. The Company earned commendation for its outstanding performance in execution of 3 prestigious orders for 393 nos.

MGR wagons valued Rs.88.58 crore from National Thermal Power Corporation, Government of India. These were all delivered within March, 2007, including wagons of which the contractual delivery was due up to March, 2008.

Rail sector has indeed thrown up an exciting opportunity for gearing up production of new generation wagons to meet the emerging requirement for the multi-billion Dedicated Freight Corridor planned by the Ministry of Railways. The Company is therefore vigorously pursuing its in-house R&D, as also exploring possibilities of joining hands with world leaders in rail wagons and services. 

HYDRO-MECHANICAL EQUIPMENT & STRUCTURALS

The Division consolidated its position by bagging during the year the single largest order in India for Hydro-mechanical Equipment valued at over Rs.3000 millions for Subansiri 2000MW H.E Project of NHPC in Assam and Arunachal Pradesh. It does the Company proud to be associated with this major Project of the Government of India. 

The year 2006-07 marked the successful completion of the prestigious contracts for Hydro-mechanical Equipment executed by the Company for 900 MW Purulia Pumped Storage Project of WBSEB in West Bengal and 1020 MW Tala H.E. Project in Bhutan. 

The work on 510 MW Teesta Stage V H.E. Project (Sikkim) is nearing completion. The progress on the Hydro Mechanical packages of Parbati H. E.

Project in Himachal Pradesh, Sewa H. E. Project in Jammu and Kashmir, Teesta Low Dam H.E.

Project in West Bengal is satisfactory. 

With continuing thrust of the Government of India on development of Hydel Power, Texmaco is fully geared up to make its significant contribution in the years to come with its expertise in design, manufacturing, and erection in the field of Hydro-Mechanical equipment. 

The Division is poised to grow at a faster pace with a healthy order book of approx. Rs.4500 millions and the rich business potential going by the projections in the 11th and 12th 5-year Plans of the Government of India. 

PROCESS EQUIPMENT DIVISION

The performance of the Division was sluggish during the year. However, it did well in the specialised manufacture of Cryogenic Vessels of which 22 out of 28 Nos. were delivered during the year. Three numbers of Horten Spheres for Indian Space Research Organisation (ISRO) have also been supplied, and the erection is in progress. The order for Boiler of 120 TPH capacity was successfully executed, and another order for High Pressure Boiler of 90 TPH at 67 kg/cm2g pressure is under execution. The Division has an order book of approx. Rs. 400 million, and the performance is expected to improve during the current year. 

STEEL FOUNDRY DIVISION: 

The steel foundry continued to scale new height by achieving a record turnover of Rs.1305. 000 millions during the current year, which was up by 26% compared to the previous year. It maintained its leadership through highest share of the supplies to the Rail Sector, and reliability for timely delivery and assured quality. The production in the old foundry has reached a near optimum level. It is, therefore, proposed to modernize and refurbish it to sustain high production level, besides achieving incremental production. 

The new State-of-Art foundry of the company has commenced commercial production during the year. The initial level of production currently is about 300 tons per month on single shift basis. The foundry is equipped with highly sophisticated, fully automatic sand plant and moulding line, sourced from the world renowned Kunkel Wagner of Germany. This is the first of its kind for production of Railway steel castings in India to meet the most exacting standards of American Rail Roads. Not unexpectedly, some teething problems have continued to surface, which are being resolved through excellent service support from the German suppliers. The operations would fully stabilize shortly so as to step up the production to its rated capacity of 15,000 tons / year.

The castings produced in the high pressure moulding system have been judged by experts deputed by the foreign buyers as far superior in dimensional tolerances, surface finish, sharpness of contours, and weight stability even compared to those produced by similar system overseas. 

Besides, in response to enquiries from the US market, the company has completed development of CMS crossing of which 3 nos. have already been dispatched to US after buyers' inspection and acceptance. There are other promising enquiries for Non-Railway industrial castings required for the mining sector in the Australian market, which would also be developed shortly. 

Looking to the huge potential for exports, the company has engaged the services of a highly qualified and experienced German expatriate to optimize trouble-free production and enforce strict quality control for international market. 

AGRO MACHINERY: 

The Agro Machinery Division improved its market share during the year. It is in the process of strengthening the Distributor/ Dealer network for rural marketing in Eastern India, and has also initiated action to explore the Southern market. The outlook of the Division is promising in the coming years. 

MINI HYDEL POWER: 

The Company's 3 MW Mini Hydel Power Project on river Neora in Darjeeling District in the Joint Venture 'Neora Hydro Ltd' (NHL)was commissioned successfully in June'06. The total generation during the year 2006-07 was 3.055 million units. However, the recorded evacuation at Chalsa Sub-Station of WBSEB was 2.777 million units after transmission losses and internal consumption. The Power Purchase Agreement with WBSEB has been signed on 24.11.2006 which will be operative for 10 years. The tariff has been fixed at the maximum cap of Rs.3.60 per unit for a period of 5 years as per the notification of WBERC. Unfortunately, the project is still facing problems on account of inadequate water discharge from Neora river during the lean / semi-lean season (October to May). Besides, there are some technical problems in the smooth evacuation of power from NHL compatible with Chalsa Grid Voltage. The matter has been taken up with WBSEB for smooth evacuation of power during forthcoming peak season to enable generation and sale of full power. The company's application for subsidy of Rs.25.000 million from WBIDC under the State Subsidy Scheme for Mini Power Project has been processed, and the formal sanction letter is expected shortly. 

NEW PROJECTS: 

Coaches: 

The Company had participated in a tender floated by the Railway Board for 81 EMU Coaches (9 rakes of 9 Coaches each, comprising 3 B motor coaches, 2 D trailers, and 4 C trailers). Railway Board have placed a trial order for 1 EMU rake valued at Rs.67.000 million on 18.04.07. It is proposed to take up the manufacture of EMU Coaches at AW for which the planning is under way.

Further, leading multi-nationals have participated in a bid for 340 Metro Coaches for the Delhi Metro Rail Corporation, opened on November 24, 2006.

The Company is in active discussion to join hands with either of them for indigenous development of Metro Coaches at the Company's Belgharia Works. 

EXPORTS: 

The Company in its new State of Art Foundry has started development of samples for testing and trials for the overseas buyers, and the initial results are very encouraging. It is expected that the export will start by the end of second quarter of the current year after necessary approval of sample castings by Testing and Inspection Authorities of the buyers. In Hydro Mechanical Equipments and Wagon Divisions, the Company has successfully executed during the year certain prestigious deemed export contracts received against stiff global competition. The exports of the Company during the year, including deemed exports, were approx. Rs.1830 millions. Efforts are continuing for development of new export markets.

REAL ESTATE: 

The decision of the Hon'ble Supreme Court of India on the legal issues relating to Birla Mills Land at Delhi is still awaited. The matter is expected to come up for hearing in the near future. The development plans of the property will be undertaken thereafter.

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.39.87
UK Pound	1	Rs.80.11
Euro	1	Rs.56.19

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		59

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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