MIRA INFORM REPORT

Report Date :

09.04.2008

IDENTIFICATION DETAILS

Name :	TARA ULTIMO PRIVATE LIMITED
Registered Office :	Plot Number 29 (P) and 30(P), Sub Plot (A), SEEPZ, SEZ, Andheri (East) Mumbai – 400096, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	16.03.2001
Com. Reg. No.:	11-131252
CIN No.: [Company Identification No.]	U52393MH2001PTC131252
TAN No.: [Tax Deduction & Collection Account No.]	MUMT07364A
Legal Form :	Private Limited Liability Company.
Line of Business :	Manufacturer of Studded Precious Metal Jewellery and also in Jewellery Designing

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 :	USD2640000
Status :	Very Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Directors are reported as experienced, respectable, resourceful businessmen. Subject is an export oriented unit. Trade relations are fair. Fabrikant H K Trading holds 1360000 equity shares in the company. Perhaps this can be an associate of Fabrikant U.S.A. who was declared bankrupt recently. Some caution is needed since subject is closely associated with bankrupt company. It can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office / Factory :	Plot Number 29 (P) and 30(P), Sub Plot A, SEEPZ, SEZ, Andheri (East) Mumbai – 400096, Maharashtra, India
Tel. No.:	91-22-24226830 / 66774444 / 66774443 / 56774444
Mobile No.:	91-9930319930
Fax No.:	91-22-66774464 / 67 / 56774464
Email:	cbcco@vsnl.com nalini@tarajewels.co.in
Websites:	www.tarajewels.co.in
Area:	45000 Sq.fts
Location:	Owned

DIRECTORS

Name :	Mr. Rajeev Vasant Sheth
Designation :	Director
Address :	37/A, Villa Ramona, Nepean Sea Road, Mumbai – 400 036, Maharashtra
Date of Birth/Age :	16.11.1958 / 52 years
Date of Appointment :	16.03.2001
Name :	Mrs. Alpana Anirudh Deo
Designation :	Director
Address :	15 / 227, Hyde Park, Shere-E-Punjab C.H.S. Mahakali Caves Road, Andheri (East), Mumbai – 400 093, Maharashtra, India
Date of Birth/Age :	20.12.1974 / 33 years
Date of Appointment :	16.03.2001
Name :	Mr. Anirudh Padmakar Deo
Designation :	Director
Address :	15 / 227, Hyde Park, Shere-E-Punjab C.H.S. Mahakali Caves Road, Andheri (East), Mumbai – 400 093, Maharashtra, India
Date of Birth/Age :	02.08.1945
Date of Appointment :	03.09.2002
Name :	Mrs. Aarti Rajeev Sheth
Designation :	Director
Address :	37/A, Villa Ramona, Napeansea road, Mumbai – 400 036, Maharashtra, India
Date of Birth/Age :	11.10.1984
Date of Appointment :	10.8.2006
Directorship in other companies:
CIN of the Company	U36900MH1986PTC041153
Name of the Company:	Tara Jewels Export Private limited
Designation :	Director
CIN of the Company	U36912MH1999PTC121669
Name of the Company:	T Two International Private Limited
Designation :	Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (as on 31.03.2007):-	No. of Shares
Mr. Rajeev Sheth	4945000
Mrs. Purnima Rajeev Sheth	5000
M/s Tara Jewels Export Private Limited	50000
Equity Shares Breakup (Percentage of Total Equity): (as on 31.03.2007):-	Percentage of Holding
Foreign Holdings (Foreign Institutional Investor(s), Foreign Companie(s), Foreign Financial Institution (s), Non-Resident Indian(s), Overseas Corporate bodies or Others)	15.35 %
Bodies Corporate	0.85 %
Directors or Relatives of Directors	83.80 %
Total	100.00 %

BUSINESS DETAILS

Line of Business :	Manufacturer of Studded Precious Metal Jewellery and also in Jewellery Designing
Products :	Rings Earrings Pendants Bracelets
Exports :
Countries :	US, Europe, Australia, Japan, Hong Kong
Imports :
Products :	Raw Materials
Countries :	Hong Kong, US
Terms :
Selling :	L/C, Credit (30- 90 days)
Purchasing :	L/C, Cash, Credit (60- 90 days)

GENERAL INFORMATION

Suppliers :	Diamond Aids Divya Jewels International Private Limited
Customers :	Wholesalers, Retailers Audin International Incorporation Matsumoto Industries Limited Tara Jewels Exports Private Limited
No. of Employees :	1200
Bankers :	Bank of Bahrain and Kuwait B.S.C. Union Bank of India Overseas Branch, SEEPZ++, Unit 007, Block No II, SEEPZ++ Complex, Marol Industrial Area, Andheri (East), Mumbai -400096, Maharashtra, India State Bank of India SEEPZ Branch, Andheri (East), Mumbai -400096, Maharashtra, India ICICI Bank Limited, Plot No. 8, Block II, Seepz ++, Seepz Branch, Andheri (East), Mumbai – 400 096, Maharashtra, India Punjab National Bank Off Shore Banking Unit, SEEPZ Branch, Andheri (East), Mumbai -400096, Maharashtra, India ING Vysya Bank Limited, Mumbai, Maharashtra, India Bank Of India Behind Seepz Service Centre, Marol Industrial Area, SEEPZ Branch, SEEPZ, Andheri (East), Mumbai -400096, Maharashtra, India State Bank Of Patiala Block 1/002, SEEPZ++, Andheri (East), Mumbai – 400096, Maharashtra , India Yes Bank Limited G -1, Ground floor, Vallecha Chambers., Plot B – 6, New Link Road, Andheri (East), Mumbai – 400 053, Maharashtra , India
Banking Relations :	Good
Auditors :
Name :	C. B. Chhajed and Company Chartered Accounts
Address :	13 Manik Apartment, Bhavani Shankar Road, Dadar, Mumbai, Maharashtra, India
Tel. No.:	91-22-24226830
Associates/Subsidiaries :	· Tara Jewels Export Private limited · T Two International Private limited · Fabrikant and Tara International (LLC ), New York · Bio Tech Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
15000000	Equity Shares	Rs 10/- each	Rs 150.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8860000	Equity Shares	Rs 10/- each	Rs 88.600 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		88.600	88.600	50.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		571.400	330.039	139.901
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		660.000	418.639	189.901
LOAN FUNDS
1] Secured Loans		1168.599	572.913	314.403
2] Unsecured Loans		0.000	0.000	1.738
TOTAL BORROWING		1168.599	572.913	316.141
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1828.599	991.552	506.042
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		243.827	239.946	227.278
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		23.224	23.224	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	114.515	568.322	339.310
	Sundry Debtors	1672.675	687.289	395.365
	Cash & Bank Balances	62.168	55.483	11.198
	Other Current Assets	0.000	32.221	0.000
	Loans & Advances	52.662	0.000	14.310
Total Current Assets		1902.020	1343.315	760.183
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	341.023	613.961	482.522
	Provisions	0.000	1.800	0.000
Total Current Liabilities		341.023	615.761	482.522
Net Current Assets		1560.997	727.554	277.661
MISCELLANEOUS EXPENSES		0.551	0.828	1.103
TOTAL		1828.599	991.552	506.042

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover [including other income]		6292.869	2838.583	2106.939
Profit/(Loss) Before Tax		271.757	108.137	50.202
Provision for Taxation		30.396	0.000	0.000
Profit/(Loss) After Tax		241.361	108.137	50.202
Export Value (F.O.B. Value)		NA	N.A.	1906.988
Import Value (C.I.F. Value)		NA	N.A.	275.141
Expenditures :
	Depreciation & Amortization	28.895	2730.446	2396.268
	Other Expenditure	5992.217	0.000	0.000
Total Expenditure		6021.112	2730.446	2396.268

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	3.83	3.81	2.38
Net Profit Margin (PBT/Sales)	(%)	4.32	3.81	2.38
Return on Total Assets (PBT/Total Assets}	(%)	12.53	11.17	9.94
Return on Investment (ROI) (PBT/Networth)		0.41	0.26	0.26
Debt Equity Ratio (Total Liability/Networth)		2.28	2.84	4.20
Current Ratio (Current Asset/Current Liability)		5.57	2.18	1.57

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject is located in a Special Economic Zone at Santacruz Electronics Export Processing Zone (SEEPZ), India and is engaged in the manufacturing of studded precious metal jewellery. The company has been promoted by Mr. Rajeev Sheth, a Technocrat and Gemmologist from USA, who was responsible for introducing the concept of wax setting for the first time in India. The company has been catering to the customers situated in the markets of US and Europe and has been successful in establishing a good customer base in these markets. These markets possess good demand potentials and company expects a sizeable amount of business from these markets. Tara group is among few Indian companies to be allotted diamonds sight by Diamond Trading Corporation (DTC).

Description of Assets

• Building
• Vehicles
• Air Conditioners
• Computers
• Electric Installations
• Furniture and Fixtures
• Office Equipments
• Plant and Machinery
• Factory Equipments

TRADE REFERENCES:

· Sterling , USA

· Zeales, USA

· Wolalmart, USA

FORM 8:-

Corporation identity number or foreign company registrations number of the company	U52393MH2001PTC131252
Name of the company	TARA ULTIMO PRIVATE LIMITED
Address	Plot Number 29 (P) and 30(P), Sub Plot (A), SEEPZ, SEZ, Andheri (East) Mumbai – 400096, Maharashtra, India
This Form is for	Modification of charge
Type of Charges	Immovable Property
Particular of the charge holder	State Bank of India Address: Seepz Branch, Andheri (East), Mumbai – 400 096, Maharashtra, India Email: sbi.03473@sbi.co.in
Nature or description of the instrument creating charge	Memorandum of deposit for creation of charge for term loan / overall limit
Date of the instrument creating charge	14.02.2007
Amount Secure by the charge	Rs. 2.120 millions
Brief of the principal terms and conditions and extent and operation of the charge	Rate of Interest : For EPC As per RBI guidelines (present effective rates are as follows ) pre shipment credit upto 180 days 2.75% below SBAR (11.00%) i.e Min 8.25% Beyond 180 Days and upto 270 days 1.50% below SBAR (11.00%) i.e min 9.50% Against incentive receivable from government covered by ECGC guarantee upto 90 days 2.75% below SBAR (11.00%) i.e min 8.25% Note in case of noon execution of the export order, cash credit Interest will be recovered the rate prevailing. Terms of repayment: As per agreement and sanction letter Margin: EPC -10% , EBN -25% for direct bills, BG -100%, lien on market value of stock on SBLC / BG for procurement of gold metal gold loan – 110% of gold lent other as per respective sanctioned letter . extent and operation of the charge: as per agreement and to the extent of shares of each lenders Others: rate of Interest , discount , commission exchange service charge etc for SBI sanction letter No. AGM / SPEEZ / 06/888 Dated 07.10.2006 ICICI Sanction letter No. CAL 705490 dated 23/08/202006, UBI sanction letter NO. OSB / SEEPZ / 734/2006 dated 12.10.2006 and amended letter No. OSB /SEEPZ /734 –A /06 dated 12.12.2006, PNB sanctioned letter No. OBU /C / TUP /san Adv dated 22.11.2006 and amended letter No. , SBP sanction letter No. dated 14.10.2006, (Other sanction letter No. as per annexure A -2)
Short particulars of the Property charged	First charge on the whole of the current assets , stock of raw materials , stock in process , semi finished goods and finished goods, stores, spares plant and machinery, book debts, and other movables both present and future furniture and fixtures m, office equipment, etc.
Particulars of the present modification	Now by this and first modification dated the said company has created mortgage on immovable property by deposit of title deeds of immovable property as described below in favour of SBI consortium as continuing security to future secure repayment of all monies including Interest , costs, (as between advocate and client) charges and expenses due owe becoming due and payable

Name of the company

TARA ULTIMO PRIVATE LIMITED

Presented By

State Bank of India, Seepz, Andheri (East), Mumbai – 96

1) Date and description of instrument creating the change

Agreement for loan for overall limit

Agreement of hypothecation of goods and assets

Letter regarding the grant of individual limits within overall limit

All the above agreement dated 27.05.2003 and executed for creating the single charge

2) Amount secured by the charge/amount owing on the securities of charge

Particulars	(Rs. in millions)
Export Packing Credit	80.000
Post Shipment Credit	40.000
Bank Guarantee	80.000
Total	200.000

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

A first charge by way of hypothecation of borrowers entire goods , movable and other assets present and future including documents of title to the goods and other assets such as book debts , outstanding moneys receivables by way of cash assistance and / or cash incentive under the cash incentive scheme or any other scheme , claims, including claims by way or refund of invoices , documents, contracts, insurance policies , guarantee , engagements, securities, investment and rights uncalled capital and all machinery present and future of such from satisfactory to the bank , raw materials, stock in process, finished goods, book debts / receivables , bank guarantee

4) Gist of the terms and conditions and extent and operation of the charge.

ROI : Exp[ort packing credit : 2.65% below SBATAR i.e 7.60% upto 180 days 0.35% above SBSTAR i.e 10.60% p.a beyond 180 days and upto 270 days

Post shipment credit: 2.50 % below SBSTAR i.e 7.75% p.a

Bank guarantee: At our standard rates.

Margin ; Raw materials 10%

Stock in process 10%

Finished goods -10%

Book debts / receivables – 25%

Bank guarantee -5%

5) Name and Address and description of the person entitled to the charge.

State Bank of India

Seepz Branch, Mumbai – 400 096, Maharashtra, India

6) Date and brief description of instrument modifying the charge

Form C.2-A – Supplemental agreement of hypothecation of goods and assets for increase in the overall limit

Form C.1-A Supplemental agreement of loan increase in the overall limit

Form C .5- Letter regarding the grant of individual limits within the overall limit.

All the above agreement are dated 20.01.2005 and executed for creating the single charge.

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

The original charge was created on 27.05.2003 for Rs. 200.000 millions now by this present and second modification by which the overall limit of Rs. 20.000 millions now increased to Rs. 320.000 millions consisting of following additional facilities:-

Nature facility	Limit (in millions)
Export Packing credit	110.000
Post Shipment Credit	60.000
Bank guarantee	150.000
Total	320.000

The goods and assets hypothecated and charged in favour of the bank by the earlier agreement shall be and stand charged in favour of the bank as a continuing security by way of first charge for the due repayment up to limit of Rs. 320.000 millions

Rate of Interest :

Export Packing credit

· As per latest circulars instruction under SBI Gold Card scheme

· At present 3.75% below SBAR i.e 6.50% with monthly rest upto 180 days

· 2.10% below SBAR i.e 8.15% beyond 180 days and upto 365 days

Post Shipment Credit:

· As per SBI Gold Card Scheme upto 365 days from the dated of shipment -3.758% below SBAR i.e 6.50%

· For over due period upto 6 months from the date of shipment – SBAR +1.85%

· Beyond 65 month from the date of shipment – SBAR +2.50%

Bank Guarantee : Commission as applicable from time to time

Margin Export Packing credit – 10%

Post Shipment Credit – 25%

Bank guarantee – 5%

Repayment – On Demand

All the terms and conditions in the agreement shall in all other respect in full force and binding on the borrower in respect of the aforesaid credit facilities.

PRESS RELEASES

Indian Diamond Company’s wary as US Customer goes Bankrupt

Some of the Indian diamond houses could find their money stuck in the US, as one of the largest importers of Indian cut and polished diamonds, Fabrikant & Sons has filed for bankruptcy protection.

The privately-owned US company purchases diamonds from India in excess of $60m annually, making it the largest buyer in the US. Fabrikant is unable to pay off its debts.

Its current assets stand at $225.9m and current debts, at $363m. According to Sanjay Kothari, chairman, Gem and Jewellery Export Promotion Council (GJEPC), of the total debts, the company will owe Indian diamond merchants close to $25m approximately.

“This is expected to slow down the business further,” he said. The US accounts for a third of the diamond and gemstone exports. This will hit diamond exports, which has been sluggish in ’06. According to GJEPC figures between April and October ‘06, the total jewellery exports from India declined 17% from the comparable period last year. Exports were to the tune of $6291.3m (Rs 287440 Millions), from last year’s $ 7609.7m (Rs 331290 Millions).

Demand declined in the US, and production was also impacted after the floods in Surat, which accounts for 55% of the diamond polishing business, in August ’06 leading to a decline in exports.

Fabrikant is expected to keep its US operations minimal until it completes its financial restructuring. This could take about a month. India’s exports generally pick up in the October-December quarter in anticipation of higher sales during Thanksgiving and Christmas. This could be affected, if the payments of diamond merchants are held up.

Fabrikant has a JV in the US, with Indian jewellery exporter Tara Jewels under the name of Fabrikant Tara International (FTL). Tara Jewels did not pay any thing to Fabrikant to acquire a 75% stake in the company. The amount that Fabrikant received as a 25% equity holder was above what it had earned last year. While Fabrikant’s owes its creditors $36m, it owes its non-bankrupt subsidiaries, including FTL, $124m.

The company had sales worth $370m, and a net loss of $12.6m in ’05-06 (ended January 31 ‘06).

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.40.02
UK Pound	1	Rs.78.77
Euro	1	Rs.39.12

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	9
--PROFITABILIRY	1~10	7
--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	NO
--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

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions