MIRA INFORM REPORT

Report Date :

24.04.2008

IDENTIFICATION DETAILS

Name :	GALA PRECISION TECHNOLOGY LIMITED
Formerly Known As :	GALA EQUIPMENTS PRIVATE LIMITED
Registered Office :	116 Naryaan Dhuru Styreet, Ground Floor, Transfer to Balapur, Mumbai – 400 003, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	09.06.1989
Com. Reg. No.:	11-52116
CIN No.: [Company Identification No.]	U99999MH1989PLC052116
TAN No.: [Tax Deduction and Collection Account No.]	MUMG08261B
PAN No.: [Permanent Account No.]	AAACG1777F
Legal Form :	A closely held Public Limited Liability Company
Line of Business :	Manufacturers of Precision Auto Components

RATING and COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 1030000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track records. Available information indicates high financial responsibility of the company. Trade relations are fair. Payments are correct and as per commitments. The company can be considered good for any normal business dealings. It can be considered for any normal business dealings. It can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office :	116 Narayan Dhuru Styreet, Ground Floor, Transfer to Balapur, Mumbai – 400 003, Maharashtra, India
Tel. No.:	91-22-25821232
E-Mail :	kirti.gala@galaprecision.com s.girithar@galaprecision.com
Website :	www.galaprecision.com
Corporate Office :	A-59, Road No. 10, Wagle Industrial Estate, Thane - 400 604, India.
Tel. No.:	91-22-2582-1232 / 2582-0252
Fax No.:	91-22-2582-0771
E-Mail :	pmc@galaprecision.com
Factory :	Wada Plant Plot No. 295, Village Vadavali at Post Met, Masurne Road, Bhiwandi – Wada Highway, Taluka Wada, Thane – 421 312, India. Tel No: 91-2526-220154 / 2526-220155 Fax No. 91-2526-220577 Email: mfs@galaprecision.com China Plant No.4 Workshop,  1669 Hu Hang Road,  Fengxian District, Shanghai, China  Email: china@galaprecision.com

DIRECTORS

Name :	Mr. Uday Prasad
Designation :	Director
Address :	Room No. 6, Savitri Smruti, Pandit Malaviya Roadram Nagar, Dombivali (East), Thane – 421 201, India
Date of Birth/Age :	29.04.1968
Date of Appointment :	25.10.2005
Name :	Mr. Manoj Advani
Designation :	Director
Address :	A 19/15 , Maitri Park, Vn Purav Marg, Chembur, Mumbai – 400 071, Maharashtra, India
Date of Birth/Age :	08.06.1963
Date of Appointment :	25.10.2005
Directorship in other companies:
CIN of the Company	U15499AP2005PTC047082]
Name of the Company:	Terrafirma Agroprocessing (India )Private Limited
Designation:	Director
CIN of the Company	U65993MH2005PTC155967
Name of the Company:	IVF Holding Private Limited
Designation:	Director
CIN of the Company	U92120MH2005PTC156817
Name of the Company:	City Sound and Music Private Limited
Designation:	Director
Name :	Mr Harshi V Gala
Designation :	Director
Address :	161-162, Tarangan I Shahid Mangal Pande Road, Opposite Nitin Casting, Thane – 400 606, Maharashtra, India
Date of Appointment :	14.02.1995
PAN No.:	AAUPG8506B
Tel No.:	91-22-25336512 / 25362607
Name :	Mr. Vishanji K Gala
Designation :	Director
Address :	161-162, Tarangan I Shahid Mangal Pande Road, Opposite Nitin Casting, Thane – 400 606, Maharashtra, India
Date of Appointment :	09.06.1989
PAN No.:	ADTPG2708D
Tel No.:	91-22-25336512 / 25362607
Name :	Mr. Vishanji T Gala
Designation :	Director
Address :	161-162, Tarangan I Shahid Mangal Pande Road, Opposite Nitin Casting, Thane – 400 606, Maharashtra, India
Date of Appointment :	15.05.1995
PAN No.:	AAJPG6853C
Tel No.:	91-22-25336512 / 25362607
Name :	Mr. Narendra Kumar Sanjay Arte
Designation :	Director
Address :	501 Ashoka Khar West, Mumbai – 400 052, Maharashtra, India
Date of Appointment :	15.07.2005
PAN No.:	AAHPA4337M
Tel No.:	91-22-56954888
Name :	Mr. Kirit Gala
Designation :	Managing Director

KEY EXECUTIVES

Name :	Mr. Manjunath Rao
Designation :	Chief operating Officer – Mass Finishing Solutions
Name :	Mr. Gaurang Desai
Designation :	Chief operating Offcier – North East Asia
Name :	Mr. Balkishan Jalan
Designation :	Chief financial Officer
Name :	Mr. Nayna Gala
Designation :	Chief Development Officer
Name :	Mr. Satish Kotwani
Designation :	Vice president – Marketing
Name :	Mrs. Darshana Mandewal
Designation :	Vice President -Human Resources and Organization Development.
Name :	Mr. V H Gala
Designation :	Chairman

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (30.09.2005)		No. of Shares
Mr. Kiran Chheda		4500
Mr. Rashmikant B Shah		1000
Mr. Shailesh B Shah		1000
Mr. Jugal Labhshanker Mehta		1000
Mr. R Ravindran		1000
Mr. Arvind Devji Gala		1000
Mr. Kirit V Gala (HUF)		53400
Mr. V Parvathi		200
Mr. Urmil Dhiraj Shah`	`	2000
Mr. Piyush M Shah		1000
Mr. Dipen Bheda		1000
Mr. Sudhir T Gosdar		1000
Mr. Anmol Jain		2000
Mr. Pratik Dhiraj Gala		1000
Mr. Smeet Gala		8000
Mrs. Saloni Gala		8000
Mr. Talakshi Hirji Gala		1000
IVF (Mauritius) PCC		230611
India Value Fund Trustee		47233
Mrs. Manjula Vinod Shethia		3500
Mrs. Manjulaben Keshavlal		2000
Mrs. Meeta Kirit Nagda		2000
Mrs. Mita S Nagda		1000
Mr. Nanchand N Shah		22000
Mr. Sudhir T Gosdar		1000
Mrs. Nayna Gala		50000
Mr. Nemchand D Nagda		2000
Mr. Nirmalal L Gada		1000
Mr. Panbhai H Shah		2000
Mr. Paresh D Gala		2000
Mrs. Prabha T Gala		1000
Mr. Pradeep V Gada		2000
Mr. Premji D Pasad		5000
Mrs. Priti D Patil		1000
Mrs. Rita Samir Shah		5000
Mrs. Sakerben Vallabhaji Gada		3000
Mr. Samir H Shah		5000
Mr. Sanjay V Nagda		2000
Mr. Rajesh Ravilal Shah		1000
Mr. Tarachand R Gosar		2000
Mrs. Usha Mahindra Gaga		1000
Mrs. Varsha A Gosar		1000
Mrs. Vijayaben P Gosar		1000
Mr. Vishanji H Gala (HUF)		77800
Mr. Manoj Gangar		2000

Equity Shares Breakup (Percentage of Total Equity): (as on 31.03.2007):-

Sr No.	Category	Percentage
1	Venture Capital	2.00
2	Foreign holdings (Foreign institutional investors ) foreign companies foreign financial institutions , non residents or Overseas corporate bodies or others	11.00
3	Directors or relative of directors	87.00
	Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturers of Precision Auto Components
Products:	Standard Finishing Machine · Vibro Benz Vibratory Finishing Systems · Centrifugal Finishing system – Technology Series. · Trough Vibrators · Spiral Vibrators Compressors Valves · Valve Plates and Asemblies · Reeds and Retainers · Plate Valve Assembly

GENERAL INFORMATION

No. of Employees :	250
Bankers :	· State Bank of India Address: Wagle Industrial Estate, Thane (West), Thane – 400 601, Maharashtra, India · Citi Bank NA Citigroup Centre, Bandra Kurla Complex, Bandra (East), Mumbai – 400 015, Maharashtra, India
Banking Relations :	Good
Auditors :
Name :	BSR and Company Chartered Accountants
Address :	KPMG House, Kamla Mills Compound, 448, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, Maharashtra, India
Associates/Subsidiaries :	· Terrafirma Agroprocessing (India )Private Limited [CIN : U15499AP2005PTC047082] · IVF Holding Private Limited [CIN: U65993MH2005PTC155967] · City Sound and Music Private Limited [CIN: U92120MH2005PTC156817]

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
3000000	Equity Shares	Rs. 10/- each	Rs. 30.000 millions

Issued, Subscribed and Paid-up Capital :

No. of Shares	Type	Value	Amount
2611732	Equity Shares	Rs. 10/- each	Rs.26.117 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		26.117	26.117	17.782
2] Share Application Money		0.000	0.000	0.000
3] Reserves and Surplus		231.305	202.501	60.953
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		257.421	228.618	78.735
LOAN FUNDS
1] Secured Loans		296.426	243.584	169.804
2] Unsecured Loans		106.050	49.408	70.382
TOTAL BORROWING		402.476	292.992	240.186
DEFERRED TAX LIABILITIES		42.096	28.296	26.038
TOTAL		701.993	549.906	344.959
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		438.772	310.296	178.322
Capital work-in-progress		4.883	53.091	18.929
INVESTMENT		13.605	0.086	0.086
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS and ADVANCES
	Inventories	135.660	86.199	56.450
	Sundry Debtors	194.358	158.816	143.408
	Cash and Bank Balances	5.126	11.790	2.978
	Other Current Assets	0.000	0.000	0.000
	Loans and Advances	33.470	28.569	32.649
Total Current Assets		368.614	285.374	235.485
Less : CURRENT LIABILITIES and PROVISIONS
	Current Liabilities	115.138	96.413	66.347
	Provisions	8.743	2.528	21.516
Total Current Liabilities		123.881	98.941	87.863
Net Current Assets		244.733	186.433	147.622
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		701.993	549.906	344.959

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006
Sales Turnover		570.969	402.509
Other Income		11.189	8.714
Total Income		582.158	411.223
Profit/(Loss) Before Tax		49.574	3.933
Provision for Taxation		0.000	0.000
Profit/(Loss) After Tax		49.574	3.933
Export Value		200.960	92.736
Expenditures :
	Increase/(Decrease) in Finished Goods	29.309	13.768
	Salaries, Wages, Bonus, etc.	86.261	75.720
	Payment to Auditors	0.847	0.635
	Interest	34.666	20.144
	Insurance Expenses	2.082	1.651
	Depreciation and Amortization	32.060	23.213
	Other Expenditure	98.094	115.270
Total Expenditure		283.319	250.401

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	8.51	0.95	NA
Net Profit Margin (PBT/Sales)	(%)	8.68	0.97	NA
Return on Total Assets (PBT/Total Assets}	(%)	6.00	0.61	NA
Return on Investment (ROI) (PBT/Networth)		0.19	0.02	NA
Debt Equity Ratio (Total Liability/Networth)		2.04	1.71	4.17
Current Ratio (Current Asset/Current Liability)		2.97	2.88	2.68

LOCAL AGENCY FURTHER INFORMATION

Name of the company	GALA PRECISION TECHNOLOGY LIMITED
Presented By	Mr. Vishanji H Gala
1) Date and description of instrument creating the change	Term Loan agreement dated 30.12.2005 executed by M/s Gala Precision Technology Limited (hereinafter referred to ass “the company”) in favour of Citibank NA (Hereinafter referred to as the “Lender”)
2) Amount secured by the charge/amount owing on the securities of charge	Term Loan facilities of Rs. 7.000 millions
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	The whole of movable assets including plant and machinery , office equipments, Furnitures and fixtures , computer air conditioner, etc both present and future belonging to or pertaining to the company located at A – 59 Wagle Estate Thane together with all benefits , advantages and legal incidence thereof. Property including land and building located at A – 59 , Wagle Estate, Thane
4) Gist of the terms and conditions and extent and operation of the charge.	In consideration of the lender having agreed to lend advance to the company, credit facilities under agreement and declaration by the company interalia as follows: Covenant by the company to repay the facility at (2) above and pay Interest and all other monies in the manner set out in the agreement between the company and the lender and to comply with the terms and conditions of said agreement. The said movable assets (including plant and machinery ) by way of first charge and equitable mortgage in favour of the lender will rank first pari passu with the existing charges created / to be charged with the repayment of the term loan along with all Interest , liquidated , damages, premia on prepayment or on redemption, costs, charges, and other expenses payable by the company to the lender in respect thereof. The company to keep the said goods and property in marketable and good condition and also insured as provided therein. Power of entry power to take charge and / or possession of seize, recover, receive, appoint and sell contract, dispatch for realisation or otherwise dispose of or deal with all or any part of the said goods and property , etc as provided therein.
5) Name and Address and description of the person entitled to the charge.	Citi Bank NA Citigroup Centre, Bandra Kurla Complex Bandra (East), Mumbai – 400 015, Maharashtra, India
6) Date and brief description of instrument modifying the charge	NA
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.	NA

Corporation identity number or foreign company registrations number of the company	U99999MH1989PTC052116
Name of the company	GALA EQUIPMENTS PRIVATE LIMITED
Address	116 Naryan Dhuru Street Ground Floor , Transfer to Balapur , Mumbai – 400 003, Maharashtra, India
This Form is for	Modification of charge
Type of Charges	· Book debts · Movable property
Particular of the charge holder	State Bank of India Address: Wagle Industrial Estate Branch, Thane – 400 601, Maharashtra, India Email: kamalax_sarafhotmail.com
Nature or description of the instrument creating charge	· Supplemental agreement of loan for increase in the overall limit · Supplemental agreement of hypothecation of goods and assets for increase in the overall limit · Letter regarding the grant of individual limit within the overall limit
Date of the instrument creating charge	28.03.2007
Amount Secure by the charge	Rs. 390.300 millions
Brief of the principal terms and conditions and extent and operation of the charge	Rate of Interest : As per agreement letter No. AGM /CPC /LSL / 7254/7 7.03.2007 Terms of Repayment: As per repayment schedule commencing from April 2008 Margin: Raw material (indigenous and Imported) : 25% Stocks in Process : 40% Finished goods : 33.33% Book debts (Domestic) :40% Book debts / receivables (Overseas ): 35% Letter of credit : 15% Bank guarantee : 15% EPC : 10% Margin on fresh Term Loan : 38.59%
Short particulars of the Property charged	All present and future including documents of title to the goods and other assets such as book debts, outstanding moneys, receivables including receivables by way of cash assistance and / or cash incentives under the cash incentives.
Particulars of the present modification	Now by the present modification dated 28.03.2007 the limit increased from Rs. 347.400 millions to Rs. 390.300 millions.

WEBSITE DETAILS;

The company is a TS 16949:2002 certified organization with engineering competency at their crux.

Three decades of hardcore expertise forms our backbone in designing and manufacturing of high technology precision engineering components viz. Compressor Valves, Disc/ Belleville Springs and Precision Auto Components. There has been a growth of 50% in three of the four product lines mentioned above.

The company also designs and manufactures mass finishing systems for a wide variety of finishing applications on the automotive and general engineering horizons.

They are working towards Business Excellence while catering to the needs of some of the most advanced countries in niche segments. As first foot forward for the same, strategic initiatives like domestic and international acquisitions and world-class plants in India and China are being implemented for Precision Metal Components in automotive and compressor applications.

Subject has carved its name deep onto the international scene over the last five years, with clientele spanning across continents from Japan to Europe to America. Additionally, the equity funding by India Value Fund (formerly GW Capital), an US based private equity fund, has put the company in a unique position to aggressively invest in marketing, R and D and operations to become a leading player in Precision Metal Components business.

Products

Centrifugal Finishing System - Technology Series

· Suitable for heavy deburring and fine finishing

· For improving surface roughness (Ra) value upto 0.05 microns

· Suitable for high precision components

· Difference components can be processed in individual barrels simultaneously

Vibro-Benz Vibratory Finishing System

The basic machine comprises of a metallic bowl which is lined inside with polyurathane. The bowl is loaded with pre-formed cutting media and components. In the centre of the bowl special heavy duty vibratory motor having eccentric weights on both ends of the shaft is mounted to generate powerful spiral motion. This creates a continuous relative motion between media and components, and required finishing result are achieved. Special compounds are also added to achieve better and faster results.

These machines can further be customised using a whole range of accessories to suit various production need. Various levels of automation can be incorporated to give a completely integrated automated mass finsihing system.

Trough Vibrators

· Designed to handle long, large and heavy components

· Open type robust machine design

  Spiral Vibrators

· 100% automatic separation of part and media

· Suitable for light and delicate parts

· Supports single piece flow concept

CMT REPORT (Corruption, Money Laundering and 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.39.95
UK Pound	1	Rs.79.46
Euro	1	Rs.63.80

SCORE and RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	---
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	YES
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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 and 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 and favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	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