MIRA INFORM REPORT

Report Date :

18.08.2008

IDENTIFICATION DETAILS

Correct Name :	WEBEL SL ENERGY SYSTEMS LIMITED
Registered Office :	Plot No. 1, Block GP, Sector 5, Salt Lake Electronics Complex, Kolkata - 700 091, West Bengal
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	08.02.1990
Com. Reg. No.:	21-48350
CIN No.: [Company Identification No.]	L29307WB1990PLC048350
TAN No.: [Tax Deduction & Collection Account No.]	CALW01118F
Legal Form :	Public Limited Liability Company. The company's shares are listed on Stock Exchange
Line of Business :	Manufacturing, Supplying and Distributing of solar photovoltaic cells, modules, PV systems and components.

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 :	USD 1080965
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. The company has improved its performance in 2004-05 and also in current year. Financial position is satisfactory. 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 :	Plot No. 1, Block GP, Sector 5, Salt Lake Electronics Complex, Kolkata - 700 091, West Bengal, India
Tel. No.:	91-33-23578840 / 23371739 / 23573754 / 23577378
Fax No.:	91-33-23578094 / 23573258 / 23570030
E-Mail :	1. websol@webelsolar.com 2. ibiswas@cal2.vsnl.net.in 3. info@webelsolar.com
Website :	http://www.webelsolar.com
Factory :	Plot No. N1, Block GP, Sector 5, Salt Lake Electronics Complex, Kolkata - 700 091, West Bengal, India
Tel. No.:	91-33-23578840 / 23371739 / 23573754
Fax No.:	91-33-23578094 / 23573258

DIRECTORS

Name :	Mr. I. Biswas
Designation :	Chairman
Name :	Mr. S. L. Agarwal
Designation :	Managing Director
Name :	Mr. Franco Traverso
Designation :	Director
Name :	Mr. J. N. Maiti
Designation :	Director
Name :	Mr. R. K. Poddar
Designation :	Director
Name :	Mr. D. K. Basu
Designation :	Director
Name :	Mr. S. K. Pal
Designation :	Director
Name :	Mr. D. Chakraborty
Designation :	Nominee Director (IDBI)
Name :	Mr. S. Vasanthi
Designation :	Director
Name :	Mr. S. P. Bangar
Designation :	Director
Name :	Mr. Freddy Goh
Designation :	Director
Name :	Mr. O P Agarwal
Designation :	Director
Name :	Mr. P K Roy
Designation :	Additional Director
Name :	Mr. J Tiwari
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (As on 31.03.2008)	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Indian
Individuals/Hindu Undivided Family	111226	1.437
Bodies Corporate	2669230	34.493
Public shareholding
Institutions
Mutual Funds/UTI	653516	8.445
Financial Institutions/Banks	410020	5.298
Foreign Institutional Investors (SEBI Registered)	993519	12.839
Non-institutions
Bodies Corporate	488674	6.315
Individuals – i. Individual shareholders holding nominal share capital up to Rs. 0.100 Millions	1071702	13.849
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions	240646	3.110
Other	1100000	14.215
TOTAL	7738533	100.001

BUSINESS DETAILS

Line of Business :

Manufacturing, Supplying and Distributing of solar photovoltaic cells, modules, PV systems and components.

Products :

Item Code No. (ITC Code)	8541.00
Product Description	Solar Photovoltaic Cells, Modules and systems

Exports :

Countries :

South Africa, Singapore, Indonesia, Sri Lanka, Bangladesh and Greece

Imports :

Countries :

Europe

Terms :

Purchasing :

L/C, D/A and D/P

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Solar Photovoltaic Cells, Modules and Systems	KW	10000.00	6328.23

GENERAL INFORMATION

No. of Employees :

100

Bankers :

Ø Allahabad Bank

Ø The Federal Bank Limited

Ø Citibank N.A.

Ø Yes Bank Limited

Facilities :

Particulars	As on 31.03.2007 [Rupees in Millions]
SECURED LOAN
Term Loans from Banks	50.000
Export Packing Credits from Banks	235.225
Cash Credits from Banks	30.246
Total	315.471
UNSECURED LOANS
From Joint Stock Companies	10.765
Total	10.765

Banking Relations :

Good

Auditors :

Name :

Agarwal Sanganeria and Company

Chartered Accountants

Associates/Subsidiaries :

v Webel Communication Industries Limited

v Webel Information Limited

v Webel Nicco Electronics Private Limited

v Webel Power Electronics Private Limited

v Webel Power Electronics Limited

v Webel Sen Capacitors Limited

v Webel Toolsind Limited

CAPITAL STRUCTURE

(As on 31.03.2007):-

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
6513200	Equity Shares	Rs. 10/- each	Rs.65.132 Millions
	Total		Rs. 65.132 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		65.132	65.132	65.132
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		151.061	74.152	17.469
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		216.193	139.284	82.601
LOAN FUNDS
1] Secured Loans		315.471	208.844	105.287
2] Unsecured Loans		10.765	24.384	4.595
TOTAL BORROWING		326.236	233.228	109.882
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		542.429	372.512	192.483
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		164.388	166.401	155.940
Capital work-in-progress		6.109	1.875	5.808
INVESTMENT		0.000	13.501	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	408.951	276.967	105.900
	Sundry Debtors	29.167	31.195	7.392
	Cash & Bank Balances	25.279	9.221	25.386
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	273.460	64.330	34.923
Total Current Assets		736.857	381.713	173.601
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	364.925	190.978	69.800
	Provisions	0.000	0.000	73.142
Total Current Liabilities		364.925	190.978	142.942
Net Current Assets		371.932	190.735	30.659
MISCELLANEOUS EXPENSES		0.000	0.000	0.076
TOTAL		542.429	372.512	192.483

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		1067.834	681.811	566.300
Other Income		10.074	0.879	1.800
Total Income		1077.908	682.690	568.100
Profit/(Loss) Before Tax		141.362	83.455	35.200
Provision for Taxation		57.026	19.345	13.100
Profit/(Loss) After Tax		84.336	64.110	22.100
Export Value		1037.371	650.116	527.284
Import Value		873.325	599.560	389.025
Expenditures :
	Administrative Expenses	40.930	46.648	38.900
	Raw Material Consumed	926.801	475.470	383.800
	Consumption of stores and spares parts	22.732	18.302	0.000
	Increase/(Decrease) in Finished Goods	[131.957]	1.194	30.200
	Salaries, Wages, Bonus, etc.	12.160	10.329	8.700
	Managerial Remuneration	7.051	4.145	0.000
	Excise Duty	1.508	0.363	11.500
	Power & Fuel	10.305	9.810	8.200
	Interest	35.272	21.684	24.400
	Depreciation & Amortization	11.744	11.290	9.900
	Miscellaneous Expenses	0.000	0.000	17..300
Total Expenditure		936.546	599.235	532.900

SUMMARISED RESULTS

PARTICULARS	31.03.2008
Type	Full Year
Sales Turnover	1006.300
Other Income	20.300
Total Income	1026.600
Total Expenditure	880.100
Operating Profit	146.500
Interest	52.500
Gross Profit	94.000
Depreciation	13.000
Tax	0.800
Reported PAT	52.800
Dividend (%)	100.000

QUARTERLY RESULTS

PARTICULARS	30.06.2008
Type	1^st Quarter
Sales Turnover	260.400
Other Income	9.600
Total Income	270.000
Total Expenditure	214.600
Operating Profit	55.400
Interest	15.700
Gross Profit	39.700
Depreciation	5.000
Tax	3.900
Reported PAT	30.800

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	1.57	1.55	1.44
Long Term Debt-Equity Ratio	0.28	0.26	0.36
Current Ratio	1.10	0.90	0.79
Fixed Assets	4.37	2.95	2.72
Inventory	3.11	3.56	5.13
Debtors	35.36	35.33	58.99
Interest Cover Ratio	4.24	3.70	2.63
Operating Profit Margin(%)	18.42	17.82	13.07
Profit Before Interest And Tax Margin(%)	17.33	16.16	11.32
Cash Profit Margin(%)	8.99	11.06	6.15
Adjusted Net Profit Margin(%)	7.89	9.40	4.40
Return On Capital Employed(%)	40.44	39.02	35.03
Return On Net Worth(%)	47.43	57.77	33.09

LOCAL AGENCY FURTHER INFORMATION

TRADE REFERENCES:

Ø Helios Technology, Italy

FIXED ASSETS:-

· Leasehold Land,

· Buildings,

· Plant & Machinery,

· Furniture & Fixture,

· Computer,

· Office Equipment

· Motor Vehicles.

Contingent Liabilities:

a) Outstanding Bank Guarantees Rs. 5.000 Millions

b) Outstanding letters of Credit Rs. 92.728 Millions

c) Bills discounted with banks Rs. 177.072 Millions

d) The Company's product, namely, Solar Photovoltaic Modules carry a warranty of 25 years as per International

Standards. A fair estimate of future liability that may arise on this account is not ascertainable. The same shall be accounted for as and when any claim occurs.

e) Demands against the company not acknowledged as debts Rs. 63.339 Millions

CURRENT OPERATIONS: 

During the year, the Company crossed the 1000 Millions mark in the turnover due to its higher capacity utilisation in the existing facilities and better margins due to prices in the international and domestic markets. Correspondingly, the Company's financial performance improved, which was reflected in a rise in the turnover to Rs. 12.099 Millions and the net profit to Rs. 0.843 Million during the year.

MANAGEMENT'S DISCUSSION AND ANALYSIS: 

Industry structure and developments: 

The demand for energy enjoys a linear relationship with the growth of an economy. Over the last few years, this demand has witnessed a structural shift towards renewable forms due to rising fuel prices, increasing concerns around environmental impact as well as energy security. 

Governments across the world have evinced their support to renewable energy through favourable policies such as fixed tariffs for electricity generated from renewable sources Renewable Portfolio Standards (RPS), tax incentives, investment grants and carbon credits, among others. 

Solar energy is one of the fastest growing renewable energy sources in the world with the solar photovoltaic market recording a CAGR of 35-40%. The global photovoltaic solar industry annually generates around USD 10 billion in revenues.

Global photovoltaic installations grew 19.50% from 1,460 MW in 2005 to 1,744 MW in 2006 compared with the annual solar installation demand of a mere 21 MW in 1985. Though cumulative solar energy production accounts for 1% of the total global energy market, the figure is projected to touch 8% by 2030, driven by attractive government incentives for producers and consumers. 

The global solar energy industry is characterised by robust demand from the US, Germany and Japan supported by government subsidies. The growing emphasis on the Kyoto Protocol and rising allocation towards renewable resources by developed countries are expected to sustain the 35% CAGR in the photovoltaic industry over the next five years. 

Specific global markets: 

Ø Germany: Continued to retain its position as the largest PV market. The Feed-in Law regulation in Germany permits customers to receive preferential tariffs for solar electricity depending on the nature and size of the installation. Nearly 968 MW of PV was installed in Germany in 2006 with over 90% of it in grid-tied applications (rest was off-grid or standalone systems).

Ø The US: Continued to be another large solar photovoltaic market; the country's solar photovoltaic market growing over 33% from 105 MW in 2005 to 140 MW in 2006. The US formulated an attractive Million Solar Roofs Initiative that envisages the installation of solar energy systems in one million US buildings by 2010, which is expected to drive demand for solar energy products over the next few years. 

Ø Japan: The second largest market for solar photovoltaics. Around 50% of the world's solar cell production is manufactured in Japan. Globally, Japan and the US comprise the largest exporters of PV cells and modules. Japan leads the world in thin film PV with the highest capacity of operational manufacturing plants. An increasing thrust on solar energy leads one to envisage that by 2010, solar energy would be the most preferred household option in that country.

Ø Australia: A focus on solar energy has largely been through research-based technological developments with projects carried out at the University of New South Wales and Australia National University. The national target for harnessing energy from renewable sources stands at 2% of the country's primary energy demand over the next couple of years. 

Ø India: An important element of India's power policy is aimed at meeting the power needs of remote areas in an environmentally sustainable way. India's focus on renewable energy is reflected in the fact that it is among the first countries in the world to establish a dedicated ministry, the Ministry of Non-renewable Energy Sources (MNES), for developing and promoting non-conventional energy sources. Certain other forms of renewable energy sources (such as wind energy, small-hydro and biomass) have already established a strong presence in the country in response to the favourable policy and incentives extended to participants. During FY06, about 37 MW of aggregate solar cell capacity and 65 MW of PV modules were produced in India, while over 55 MW of PV modules were exported. From 1999 to 2006, the annual PV module production increased from about 11 MW to above 65 MW. The primary PV systems used in India comprised home lighting systems/solar home systems, street lighting systems, standalone PV power plants and solar PV water pumping systems. 

Capacity growth:  Solar photovoltaic installations registered growth across all the major markets in 2006. During the year, homes and buildings in Germany reported the largest PV installations (57%) in the world, followed by Japan and the US, adding 20% and 7% of the world's PV installations. The rest was shared by Australia, New Zealand and Africa, among others (as shown in the diagram below). Globally, all scenarios anticipate a rapid increase in polysilicon capacity and a return to faster industry growth rates. Global solar installations are expected to surge to 3.2-3.9 GW by the end of 2010. 

Production growth:  Global solar cell production increased from 1,656 MW in 2005 to 2,204 MW in 2006. Japanese producers lost ground over the 12 months, dropping from 46% of the global share to 39%. However, Japan emerged as the largest net exporter of PV cells and modules in 2006, overtaking the US. During the year, China also emerged as an important solar cell manufacturer, fuelled by the new Renewable Energy Law targeting 5,000 MW from renewable energy sources by 2010 and a massive 30,000 MW by 2020. Polysilicon production rose 16% in 2006, which, when combined with aggressive PV industry procurement, allowed a marginally higher market growth rate than what was projected 12 months ago. Polysilicon supply issues are, however, expected to constrain cell production through 2007. The total market for commercial solar cell production equipment is expected to grow from USD 1.2 billion in 2006 to USD 4.5 billion in 2010. The top PV cell manufacturers in 2006 comprised 72% of total shipments. 

Costs and realisations: 

On an average, solar energy prices declined annually by 4% across 15 years on account of a progressive increase in conversion efficiencies and competitiveness derived through economies of scale. Presently, solar electricity prices stand at 30 cents/kWh, which is two to five times the average residential electricity tariff (a precise calculation depends upon the location of the solar installation and local electricity tariff rates). 

A residential solar energy system typically costs about USD 8-10 per W. Where government incentive programmes exist, together with lower prices secured through volume purchases, installed costs are as low as USD 3-4 per W - or some 10-12 cents per KWh can be achieved. Without incentive programs, solar energy costs (in an average sunny climate) range between 22-40 cents/kWh for very large PV systems. 

With respect to industry pricing, 2006 was a year of transition. In the first six months, prices rose through the PV chain in most markets. However, by the midyear, customer response led to declines in Europe. The resilience of the solar energy industry can be reflected from the fact that players mobilised nearly USD 4 billion in 2006, higher by over 120% over the previous year.

Studies indicate that Japan's spending on solar energy averaged USD 115 million per year from 1996 to 2006 and that rebates covered 10% of installation cost. Sources also claim that Japan's government support for solar energy has caused a 75% drop in solar prices (partially due to major advancements in technology and installation methods), that solar power usage has increased by a multiple of 35 and that Japan wants half of all new homes built in 2010 to be based on solar energy. 

Raw material management: 

The principal raw material for the manufacture of solar cell is crystalline silicon (solar grade silicon). Bulk silicon is separated into multiple categories according to crystallinity and crystal size in the resulting ingot, ribbon or wafer. Mono-crystalline silicon is often manufactured using single-crystal wafer cells. It tends to be expensive because it is cut from cylindrical ingots and does not completely cover a square solar cell module without a substantial waste of refined silicon. Hence, most mono-crystalline silicon panels have uncovered gaps at the corners of four cells. Poly or multicrystalline silicon is made from cast square ingots or large blocks of molten silicon carefully cooled and solidified. These cells are less expensive to produce compared with their mono-crystalline equivalent. 

Approximately 45% of the cost of a silicon cell solar module is driven by the cost of the silicon wafer, while 35% by the materials required to assemble the module. The shortage of solar grade polysilicon is driving the shortage of solar grade wafers. However, the introduction of new polysilicon production capacity through 2009 should see the demand-supply gap contract. While polysilicon supply will increase over the medium-term, it is expected that the price of the resource, currently hovering at USD 200 per kg, will decline only gradually over this period as demand remains strong. Tight polysilicon supply is proving to be the major constraint in the growth of the solar power industry.

The Kyoto Protocol - fuelling demand for solar products: 

Ø In December 1997, more than 160 nations met in Kyoto (Japan) to negotiate the binding limitations on greenhouse gases for developed nations, pursuant to the objectives of the UN Framework Convention on Climate Change of 1992. The outcome of the meeting was the Kyoto Protocol, in which the developed nations agreed to limit their greenhouse gas emissions relative to the levels emitted in 1990. The US agreed to reduce emissions from 1990 levels by 7% during 2008 to 2012.

Ø As of December 2006, a total of 169 countries and other government entities had ratified the agreement (representing over 61.6% of emissions from Annex I countries), the notable exceptions being the US and Australia. Countries like India and China, which ratified the protocol, are not required to reduce carbon emissions under the present agreement.

Webel-SL's presence Identity: Subject is the largest and fastest growing manufacturer of solar photovoltaic cells and modules in India. The Company registered a turnover growth of 56.61% to Rs.1067.800 Millions in 2006-7. Its post-tax profit increased 31.54% to Rs 84.300 Millions during the same period. The Company reported 95% of its turnover from exports in 2006-7. Its products were certified by ISPRA, IEC, UL-TUV and PV-GAP- all reputed international certifying agencies. 

Capacity growth: Webel-SL increased its installed capacity from 1 MW to 10 MW within nine years in response to increasing technology absorption capabilities and favourable market conditions. Going forward, it expects to enhance the capacity from 10 MW to 42 MW in 2007-08 to 72 MW in 2009-10 and 102 MW by 2010-11. 

Product portfolio: 

Webel-SL's wide product basket comprises modules applicable for various commercial and industrial applications. The Company is one of the few in the world to leverage its optimal mix of manual and automated equipment to make a range from small to high wattages; in doing so, it enjoys the benefit of maximised resource utilisation. In one of the significant quality achievements in 2006-7, the Company received certification for 100% of its products. The Company manufactured only 4' and 5' cell variants earlier and moved on to widen its product mix to 6' and 8' cell types covering the range from 75 W peak to 150 W peak. A substantial percentage of the Company's existing installed capacity of 10 MW is focused on the growing 8' cell market, while the remaining on the 6' cells. Solar panels made by Webel-SL carry a warranty of 25 years. In a country like Germany, the installation of rooftop solar panels is recouped within seven years, its use translating into earning potential thereafter. 

Marketing:  
In a scenario where demand exceeded supply, the Company extended its presence to 20 countries in 2006-7 to de-risk from regulatory changes in any geography. Among the significant changes, the country's exposure to the US markets increased in 2006-7 as compared to the previous year. However, the Company reduced its European markets exposure in 2006-7, following a decline in end-product realisations in that continent. Asia emerged as a significant market for Webel-SL with the continent's exposure increasing substantially in 2006-7, primarily driven by rising exports of solar cells and wafers to China and Korea.

Product Profile:

Modules	Launch	Major Customers	Applications
10W	1995	USA, Africa, South East Asia, India	Parking meters, lanterns, highway telephone booths, etc.
50W	1995	USA, Africa, South East Asia, India	Home lighting systems, water pumping systems, rooftop power plants
90W	1999	USA, Africa, South East Asia, India, Germany, Australia, Austria	Recreation vehicles
120W	2002	USA, Africa, South East Asia, India, Germany, Australia, Austria	Recreation vehicles
140W	2005	USA, Germany, Australia,	Grid connected power Austria plants, rooftop applications
160W	2004	USA, Germany, Australia,	Grid connected power Austria plants, rooftop applications
180W	2005	USA, Germany, Australia	Grid connected power Austria plants
250W	2004	USA, Germany, Australia,	Grid connected power Austria plants

Outlook: 
The future of photovoltaic modules is promising as solar energy, along with other renewable energy sources, is seen as the next hi-tech growth industry. According to Solar Energy Products, the annual demand for photovoltaic (PV) modules is expected to more than treble from the 2005 levels to 531 MW by 2010, with aggregate industry revenues of USD 18.6 billion. 

WEBSITE DETAILS:-

Company Profile:-

The company is a leading producer of Solar Photovotaic Cells and Modules in India. It is one of the fastest growing companies within the solar photovoltaic industry in India with a 30 per cent annual growth rate and a 5 MW manufacturing facility for cells and modules.

The solar cells are being produced at the company's state-of-the-art integrated production facility in Kolkata with automated processes and a unique captive technology. In this integrated production system, the company produces high efficiency photovotaic cells and modules using mono-crystalline silicon wafers. A high standard of quality is maintained throughout the entire process of making cells to modules.

The company has established the reputation for making highly reliable photovoltaic modules for various domestic and commercial applications. All Webel Solar's modules are suitable for grid-connected and stand-alone power plants of high performance and reliability.

The company quality commitment extends from a first-rate product to a number of intangibles, confidence - inducing international quality certifications like UL, ISPRA and ISO 9000, which contribute to a smooth - and extended - customer experience.

The company delivers a price-competitive product that can be afforded by its buyers across a number of countries.

The company helps its international customers manages their onward production and delivery logistics through a timely dispatch of supplies.

The company periodic dispatch schedule replenishes customer stocks at regular intervals and helps them rationalise their inventory cost.

The company is organisationally equipped to supply customers with different denomination products of varying quantities within a single batch

At the company, no order is too small and no customer request is too insignificant. The company responds with speed and sensitivity to even the smallest of orders.

The proof of the company's customer commitment is reflected in the numbers. Nearly 80 percent of the company's turnover is derived from repeat customers.

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. 42.82
UK Pound	1	Rs. 80.01
Euro	1	Rs. 63.83

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	YES
--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.	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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