MIRA INFORM REPORT

Report Date :

09.08.2008

IDENTIFICATION DETAILS

Name :	MIDFIELD INDUSTRIES LIMITED
Formerly Known As :	MIDFIELD STEELS PRIVATE LIMITED
Registered Office :	Plot No. 6, Phase – IV, Extn. IDA, Jeedimeta, Hyderabad – 500 055, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	08.06.1990
Com. Reg. No.:	01-11353
CIN No.: [Company Identification No.]	U27109AP1990PLC011353
TAN No.: [Tax Deduction & Collection Account No.]	HYDM00906D
PAN No.: [Permanent Account No.]	AAACM9490M
Legal Form :	A closely held public limited liability company.
Line of Business :	Manufacturer of High Tensile Steel Strapping and Seals.

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 660000
Status :	Good
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. Financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions. Nothing adverse reported.

LOCATIONS

Registered Office :	Plot No. 6, Phase – IV, Extn. IDA, Jeedimeta, Hyderabad – 500 055, Andhra Pradesh, India
Tel. No.:	91-40-23098502 / 6512 / 6469
Fax No.:	91-40-23096493
E-Mail :	strappings@midfieldsteels.com
Website :	http://www.midfieldsteels.com

DIRECTORS

Name :	MR. M Madhu Mohan Reddy
Designation :	Managing Director
Address :	Plot No. 99/A, MLA Colony, Road No. 12, Banjara Hills, Hyderabad – 500 073, Andhra Pradesh, India
Date of Birth/Age :	09.08.1957
Date of Appointment :	01.07.1998
Name :	Mr. M Ashok Sagar
Designation :	Director
Address :	38/B, RTC Officers Colony, Champapet, Hyderabad – 500 060, Andhra Pradesh, India
Date of Birth/Age :	15.05.1957
Date of Appointment :	21.07.1998
Name :	Mr. A Narasimman
Designation :	Director
Address :	Plot No. 13, Lepakshi Colony, West Maredpally, Secunderabad – 500 026, Andhra Pradesh, India
Date of Birth/Age :	29.07.1964
Date of Appointment :	21.07.1998
Name :	Mr. M Sai Babu Rao
Designation :	Whole Time Director
Address :	Plot No. 79, Sainathapuram, Dr. A S Rao Nagar, Hyderabad – 500 762, Andhra Pradesh, India
Date of Birth/Age :	21.06.1962
Date of Appointment :	25.08.2005
Name :	Mr. Ashok Kumar Kolla
Designation :	Director
Address :	Plot No. 84, ARD No. 11, Site – I, Film Nagar, Hyderabad – 500 034, Andhra Pradesh, India
Date of Birth/Age :	01.06.1959
Date of Appointment :	29.09.2007
Name :	Mr. Rajaraju Kothapalli
Designation :	Director
Address :	MIG II A, 287, Vinayak Nagar, Pedagantyada, Gajuwaka, Visakhapatnam – 530 044, Andhra Pradesh, India
Date of Birth/Age :	15.09.1971
Date of Appointment :	29.09.2007

KEY EXECUTIVES

Name :	Mr. G P Mallikarjunudu
Designation :	Vice President Commercial
Name :	Mr. M Laxminarayana
Designation :	Finance Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 30.09.2005)

Names of Shareholders	No. of Shares
M Madhu Mohan Reddy	1022069
M Supraja	381701
P Chiranjeevi Rao	152113
A Vakula	14722
M Pramod Kumar Reddy	205111
M Pradeep Kumar Reddy	147667
P Vijayalaxmi	100040
M Indiramma	200667
M Ashok Sagar	41000
D Padmaja	50000
P Ramchakravarthy	70000
J Janaradhan Reddy	96000
A Bhaskar Reddy	125000
M Laxminarayana	51500
J Ramachandra Reddy	109000
A Varada Reddy	133000
K Venkataramma Reddy	113000

Equity shares Breakup (percentage of total equity)

(As on 30.09.2007)

Category	Percentage
Directors or relatives of Director	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of High Tensile Steel Strapping and Seals.

Products :

ITC Code	Product Description
72124000	Steel Strapping
83099030	Seals
72091630	C R Coils
48239018	Angle Board

· Steel Strappings

· Seals

· Manual Tools

o Tensioners

o Sealers

o Accessories

· Pneumatic Packaging Tools

· Paper Products

o Angle Boards

o U-Profiles

· Pet Strap

· Pneumatic Nailing Machines

· Industry Specific Solutions

Exports :

Countries :

· Asia

· Middle East

· Europe

· United States

· Australia

Imports :

Countries :

· Unites States

· Switzerland

GENERAL INFORMATION

No. of Employees :	About 150
Bankers :	· Axis Bank Limited Begumpet, Hyderabad – 500 016, Andhra Pradesh, India · State Bank of India Jeedimetla I.A. branch, Hyderabad – 500 055, Andhra Pradesh, India

Banking Relations :	Satisfactory
Auditors :
Name :	Sampath and Ramesh Chartered Accountants
Address :	101A, Sidhartha Harini Apartments, Desides DBR Mills, Lower Tank Bund Road, Hyderabad – 500 080, Andhra Pradesh, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
9500000	Equity Shares	Rs.10/- each	Rs.95.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6870000	Equity Shares	Rs.10/- each	Rs.68.700 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		68.700	41.000	34.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		62.529	49.617	29.791
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		131.229	90.617	63.791
LOAN FUNDS
1] Secured Loans		187.800	138.921	72.100
2] Unsecured Loans		9.352	9.175	2.288
TOTAL BORROWING		197.152	148.096	74.388
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		328.381	238.713	138.179
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		56.018	57.168	61.048
Capital work-in-progress		0.000	0.000	0.085
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		2.126	1.944	1.679
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	89.775	83.015	53.159
	Sundry Debtors	214.329	124.845	72.798
	Cash & Bank Balances	12.264	8.717	8.909
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	48.347	17.233	12.228
Total Current Assets		364.715	233.810	147.094
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	70.857	42.170	70.661
	Provisions	23.621	12.039	1.066
Total Current Liabilities		94.478	54.209	71.727
Net Current Assets		270.237	179.601	75.367
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		328.381	238.713	138.179

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		532.556	415.777	257.343
Other Income		0.871	0.636	0.616
Total Income		533.427	416.413	257.959
Profit/(Loss) Before Tax		37.994	30.324	8.459
Provision for Taxation		13.587	11.026	0.265
Profit/(Loss) After Tax		24.407	19.298	8.194
Earnings in Foreign Currency :
	Sale of Goods Manufactured	38.621	49.537	28.416
Expenditures :
	Raw Material Consumed	349.610	310.209	188.556
	Consumption of stores and spares parts	0.000	0.000	11.211
	Increase/(Decrease) in Finished Goods	12.269	(22.689)	4.949
	Salaries, Wages, Bonus, etc.	10.079	9.665	8.028
	Managerial Remuneration	1.187	1.009	0.811
	Payment to Auditors	0.050	0.050	0.040
	Interest	26.386	18.018	4.719
	Power & Fuel	11.250	8.972	5.890
	Depreciation & Amortization	8.027	8.705	2.445
	Other Expenditure	76.575	52.150	22.851
Total Expenditure		495.433	386.089	249.500

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	4.58	4.63	3.18
Net Profit Margin (PBT/Sales)	(%)	7.13	7.29	3.29
Return on Total Assets (PBT/Total Assets}	(%)	9.03	10.42	4.06
Return on Investment (ROI) (PBT/Networth)		0.29	0.33	0.13
Debt Equity Ratio (Total Liability/Networth)		2.22	2.23	2.29
Current Ratio (Current Asset/Current Liability)		3.86	4.31	2.05

LOCAL AGENCY FURTHER INFORMATION

Form No. 8

Name of the company

MIDFIELD INDUSTRIES LIMITED

Presented By

M Madhu Mohan Reddy

Managing Director

1) Date and description of instrument creating the change

Deed of Hypothecation of Stocks dated 28.01.1999

Assignment of book debts dated 28.01.1999

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

Rs.13.500 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

Hypothecation of raw material, work-in-process, finished goods, consumables and book debts.

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

The charge is created for repayment of working capital and term loan facilities along with interest thereon @ 16% p.a. inclusive of interest tax.

Repayment on Demand

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

State Bank of India

Jeedimetla I.A. branch, Hyderabad – 500 055, Andhra Pradesh, India

6) Date and brief description of instrument modifying the charge

General Agreement for the grant of medium term advances to small scale industries and hypothecation of movables, book debts and other assets, Dated 10.03.2004

Ancillary agreement for medium term loan agreeing to mortgage immovables, dated 10.03.2004.

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.

Change in the limits as follows : (Rs. In Millions)

Limit	Existing	Revised
Working Capital	56.000	56.000
Term Loan	9.750	13.750
Total	65.750	69.750

Corporate identity number of the company	U27109AP1990PLC011353
Name of the company	MIDFIELD INDUSTRIES LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No. 6, Phase – IV, Extn. IDA, Jeedimeta, Hyderabad – 500 055, Andhra Pradesh, India
This form is for	Modification of charge
Type of charge	· Immovable property · Movable property (not being pledge)
Particular of charge holder	Axis Bank Limited Begumpet, Hyderabad – 500 016, Andhra Pradesh, India
Nature of instrument creating charge	Supplementary Agreement of Hypothecation for Stocks, Book Debts, Receivables, Movable Assets etc
Date of instrument Creating the charge	27.03.2008
Amount secured by the charge	Rs.2000.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	· Rate of Interest Interest BPLR – 1.75% i.e. pa at present monthly rests As per extant bank/ RBI Guidelines, presently as under Demand Bills: 10.25% (BPLR – 4.50%) Usance Bils: Upto 90 days: 10.25% (BPLR – 3.50%) Beyond 90 days and upto 6 months: 15.25% (BPLR + 0.50%) · Terms of repayment Repayable on Demand · Margin Stocks: 20% Book Debts (Covered Period – 120 days): 25% · Extent and operation of the charge Limit: CC (Hyp) The limit shall be released only to the extent of Rs.80.000 millions till march 2008 and the remaining limit shall be released from april 2008 subject to availability of DP
Particulars of the property charged	Primary:- First charge on the entire current Assets, present and future of the company on pari passu basis with State Bank of India Collateral: Extension of first charge on the entire (both movable and immovable) fixed assets (other than vehicles purchased under hire purchase arrangement) of the company, present and future on pari passu basis Personal guarantee of the following Mr. M Madhu Mohan Reddy Managing Director Mr. M Ashok Sagar Director Mrs. M Supraja
Particulars of the present modification	The existing facility have been increased from Rs.150.000 millions to Rs.200.000 millions with increased of Rs.50.000 millions By Ways of fund based: cash credit have been increased by Rs.55.000 millions, Export packing have been increased Rs.12.500 millions, foreign bills discounting increased to Rs.12.500 millions, By of non Fund Based: Letter of credit have been increased by Rs.15.000 millions, LER (Sub Limit inder LC) Rs.0.250 millions

Web Details

Services

The Company offer complete survey, field engineering with regard to identifying the appropriate, economical and competitive packaging solutions for the customers, based on which, they design, develop the most suitable packaging system for the Customer. Under Operation Contracts, they undertake the customer’s total packaging activities under the responsibility of Midfield and provide the services with Men, Material, Equipments and Resources, for total packaging needs of customers.

Since the major activity of packaging is the responsibility, this enables customer to focus more on their core business.

They do provide after-sales-service for all of the Packaging tools and Machines.

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.42.20
UK Pound	1	Rs.81.48
Euro	1	Rs.64.27

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		46

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