MIRA INFORM REPORT

Report Date :

01.08.2008

IDENTIFICATION DETAILS

Name :	RING PLUS AQUA LIMITED
Registered Office :	D-3,4, Sinnar Taluka Audyogik Vasahat Maryadit, Village Musalgaon, Taluka Sinnar, Nasik – 422 112, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	11.09.1986
Com. Reg. No.:	040885
CIN No.: [Company Identification No.]	U99999MH1986PLC040885
TAN No.: [Tax Deduction & Collection Account No.]	MUMR14476A
PAN No.: [Permanent Account No.]	AABCR3220M
Legal Form :	Subject is a closely held public limited liability company.
Line of Business :	Subject is engaged in manufacturing and marketing automotive ancillary products.

RATING & 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 2000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. Financial position is good. Payments are correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office / Factory :	D-3,4, Sinnar Taluka Audyogik Vasahat Maryadit, Village Musalgaon, Taluka Sinnar, Nasik – 422 112, Maharashtra, India
Tel. No.:	91-2551-240236/240172/240128/240872
Fax No.:	91-2551-240250
Website :	www.ringplusaqua.com
Factory :	A-16/17, Sinnar Taluka Co-operative Industrial Estate, Sinnar, District Nashik – 422 103, Maharashtra, India
Tel. No.:	91-2551- 240087
Fax No.:	91-2551- 240997
E-Mail :	aqua@gnpun-rpal.global.net.in
Mumbai Office :	605, Jagdamba Commercial Complex, Link Road, Malad (West), Mumbai - 400 064, Maharashtra, India
Tel. No.:	91-22-28824443/40286908
Fax No.:	91-22-40286996
E-Mail :	info@ringplusaqua.co.in

DIRECTORS

Name :	Mr. U V Rao
Designation :	Chairman
Name :	Mr. C M Bhinde
Designation :	Managing Director
Date of Appointment :	01.11.2006
Name :	Mr. N N Wagle
Designation :	Executive Director
Name :	Mr. H Jayavant
Designation :	Director
Name :	Mr. H Sunder
Designation :	Director
Name :	Mr. M R Parker
Designation :	Director
Date of Appointment :	03.05.2006
Name :	Mr. S P Karandikar
Designation :	Vice Chairman and Managing Director
Date of Appointment :	17.10.2006

KEY EXECUTIVES

Name :	Mr. S S Ajgaonkar
Designation :	DGM - Finance

BUSINESS DETAILS

Line of Business :

Subject is engaged in manufacturing and marketing automotive ancillary products.

Products :

Item Code No. (ITC Code)	Product Description
8708990	Integral Shaft Water Pump Bearings
8708990	Bearing Components
8708990	Starter Ring Gears used in Engines
8708990	Ring Blanks
8708990	Flexplate Assemblies (Flywheel Ring Gears and Flexplate assemblies)
8483500	Profile Formed Pulleys

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Bearings	Numbers	3000000	2088572
Gears	Numbers	2100000	1396281
Pulleys	Numbers	600000	72190
Flexplates	Numbers	-	67191

GENERAL INFORMATION

Suppliers :

· Supreme Heatreaters Private Limited

· Skill Precision Balls Private Limited

· Varda Enterprises

· Wezmann Engineering

· Perfect Polymers

· Ras International

· Samir Engineering

· Kraft Convertors (I) Private Limited

· Shri Bhavani Industries

· Swastik Plasto

· Carline Auto Private Limited

· Precision Engineering

No. of Employees :

Above 200

Bankers :

· The Saraswat Co-operative Bank Limited, Nikadwari Lane, Girgaon, Mumbai – 400 004, Maharashtra, India

· HDFC Bank Limited

Facilities :

Secured Loans :	As on 31.03.2007 (Rs. In Millions)
Vehicle Loans from Banks	0.099
Working Capital Loans From Banks
Foreign Bills Discounting	13.854
Total	13.953

Vehicle loan is secured by hypothecation of vehicles acquired under the loans.

Working Capital Loans are secured by hypothecation of stocks, both present and future, consisting of raw materials, finished goods, goods in process, consumables, packing materials etc. and book debts of the Company.

Non-fund based facility amount to Rs.86.200 millions is also secured by the above security and margin money by way of Fixed Deposits of Rs.9.497 millions.

Unsecured Loans :	As on 31.03.2007 (Rs. In Millions)
Sales Tax Deferment Loan	77.158
Total	77.158
Total Loan Funds – Per Balance Sheet	91.111

Banking Relations :	Good
Auditors :
Name :	· Lodha and Company Chartered Accountants · S. S. Deshpande & Associates Chartered Accountants 3, Mahek Chambers, D. Bhandarkar Marg, Mumbai – 400 004, Maharashtra.
Associates :	· EBI Culture India Limited · Hana Tissue Culture Limited · Phoenix Pistons Manufacturing Company Private Limited · Source Inde · Global Marketing Services · Rose Preci-Form Private Limited
Memberships :	· Automotive Engine Rebuilders Association, U.S.A. · Automotive Industry Action Group, U.S.A. · Automotive Parts Rebuilders Association, U.S.A. · Automotive Components Manufacturers Association, India · Nashik Industrial Manufacturers Association, Nashik, Maharashtra · Sinnar Industrial Manufacturers Association, Sinnar, Nashik, Maharashtra · Precesion Metal Forming Association, U.S.A.
Collaborators :	· Osaka Pump Company, Japan · Yoruzu Seiko Company, Japan
Subsidiaries :	R and A Logistics Inc., Mulvaney Street, Asheville, North Carolina –28803, U.S.A. Tel. No. 828 285 0495 / 800 874 8208 Fax No. 828 285 9618 / 800 874 6411 E-Mail – stephen.venture@worldnet.att.net
Holding Company :	Scissors Engineering Products Limited
Ultimate Holding Company :	Raymond Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs.100.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7606634	Equity Shares	Rs.10/- each	Rs.76.066 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		76.066	76.066	76.100
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		333.742	251.440	208.500
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		409.808	327.506	284.600
LOAN FUNDS
1] Secured Loans		13.953	0.567	57.400
2] Unsecured Loans		77.158	62.037	48.000
TOTAL BORROWING		91.111	62.604	105.400
DEFERRED TAX LIABILITIES		55.551	43.810	0.000
TOTAL		556.470	433.920	390.000
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		301.033	263.430	320.800
Capital work-in-progress		5.120	15.656	0.000
INVESTMENT		57.334	0.834	2.900
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	102.148	94.627	74.600
	Sundry Debtors	154.353	132.190	155.400
	Cash & Bank Balances	25.051	24.324	16.000
	Other Current Assets	16.666	12.082	0.000
	Loans & Advances	43.626	27.692	73.700
Total Current Assets		341.844	290.915	319.700
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	139.907	125.383	204.400
	Provisions	8.954	11.546	49.100
Total Current Liabilities		148.861	136.929	253.500
Net Current Assets		192.983	153.986	66.200
MISCELLANEOUS EXPENSES		0.000	0.014	0.100
TOTAL		556.470	433.920	390.000

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		720.478	695.567	626.700
Other Income		19.308	5.065	35.100
Total Income		739.786	700.632	661.800
Profit/(Loss) Before Tax		126.161	91.052	67.100
Provision for Taxation		53.942	38.036	25.400
Profit/(Loss) After Tax		72.219	53.016	41.700
Earnings in Foreign Currency :
	Exports on FOB basis	424.155	421.045	NA
	Dividend received	NIL	0.435	NA
	Management fees received / Accrued	0.349	0.268	NA
Total Earnings		424.504	421.748	NA
Imports :
	Raw Materials	12.715	23.003	NA
	Capital Goods	19.073	0.000	NA
	Consumables	3.045	3.913	NA
Total Imports		34.833	26.916	NA
Expenditures :
	Material Cost
	Manufacturing Expenses	141.766	138.308	103.300
	Administrative Expenses	51.319	71.598	40.300
	Raw Material Consumed	290.900	296.174	284.400
	Excise Duty	0.000	0.000	26.100
	Consumption of stores and spares parts	0.000	(18.053)	0.000
	Increase/(Decrease) in Finished Goods	0.013	0.000	(9.000)
	Employee Cost	88.502	82.881	61.100
	Finance charges	0.465	2.209	0.000
	Interest	0.000	0.000	9.000
	Power & Fuel	0.000	0.000	29.500
	Depreciation & Amortization	40.646	36.387	36.900
	Miscellaneous Expenditure Written	0.014	0.076	13.100
Total Expenditure		613.625	609.580	594.700

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	9.76	7.57	6.30
Net Profit Margin (PBT/Sales)	(%)	17.51	13.09	10.71
Return on Total Assets (PBT/Total Assets}	(%)	19.62	16.43	10.48
Return on Investment (ROI) (PBT/Networth)		0.31	0.28	0.24
Debt Equity Ratio (Total Liability/Networth)		0.59	0.61	1.26
Current Ratio (Current Asset/Current Liability)		2.30	2.12	1.26

LOCAL AGENCY FURTHER INFORMATION

Operations

The performance of Starter Gear Division remained steady during the year. The sales volume of gears increased from 1.297 millions nos. to 1.392 millions nos. The value of the gears sold was Rs.415.900 millions as compared to Rs.417.000 millions in the previous year. Export of gears was at Rs.247.852 millions as against Rs.250.567 millions in the previous year. Export to USA formed major share of the export turnover.

The sale of Sheet Metal Pulleys increased from 62654 nos. to 68430 nos. valued at Rs.10.649 millions as against Rs.10.206 millions in the previous year.

The sale of Flexplate Assembly showed an impressive growth from 25077 nos. to 68911 nos. valued at Rs.22.304 millions as against Rs.8.028 millions in the previous year.

The performance of Shaft Bearing Division improved during the year. The sales of the division increased from 1.976 millions nos. to 2.180 millions nos. valued at Rs.239.600 millions as against Rs.218.900 millions in the previous year. Export of Shaft Bearings constituted 76% of the total turnover. USA continued to be the major market for exports. During the year bearing business made substantial in roads in domestic automotive OEM market.

Export constituted 59% of the total sales for both the divisions.

The prices of steel, the major raw material for the Company’s products, showed increasing trend during second half of the year, however, global sourcing efforts have countered the negative impact to a significant extent. In addition various cost reduction initiatives resulted in increased profits.

Joint Venture

The Company has entered into Joint Venture Agreement on December 13, 2006 with AJ Rose Manufacturing Company, USA (AJ Rose), for setting up a state-of-the-art facility at Sinnar, District Nashik in the State of Maharashtra as a 50:50 joint venture for manufacture of sheet metal pulleys and such other sheet metal components like impellers, phonic rings, sensor wheels etc. at an estimated initial project cost of Rs.166 million. The project execution is proceeding as planned.

Fixed Assets

· Land (Leasehold)

· Buildings

· Plant and Machinery

· Furniture and Fittings

· Vehicles

· Computers

· Office Equipment

Profile

Subject is an ISO/TS 16949 certified company manufacturing automotive components. It was formed by the amalgamation of the two group companies, i.e. Ring Gears India Ltd. and Aqua Bearings Ltd. with effect from April 1, 1997.

The new name reflects original entities of both the merged companies along with the goodwill and reputation of the erstwhile companies. The Ring Gears India Ltd. is now the ' Starter Gear Division ' and the Aqua Bearings Ltd. is now the ' Shaft Bearing Division ' of the merged company.

The product range includes

•  Flywheel Starter Ring Gears
•  Flexplate Assemblies
•  Integral Shaft water pump bearings
•  Precision Sheet metal components

It has recently signed a joint venture with A.J. Rose Manufacturing Company, USA . This JV will manufacture Precision Sheet Metal Pulleys by the Spinning Process. Subject is a prominent auto component a manufacturer with a strong reputation for quality in the Indian as well as the global OEM auto industry.

Subject also has its own warehouse in United States from which it caters to the just in time needs of its esteemed customers from US and North America.

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.42.49
UK Pound	1	Rs.84.21
Euro	1	Rs.66.33

SCORE & 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
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--MARGINS	-5~5	6
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	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 & 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.	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