MIRA INFORM REPORT

Report Date :

11.12.2008

IDENTIFICATION DETAILS

Name :	AKSH OPTIFIBRE LIMITED
Registered Office :	F-1080, RIICO Industrial Area ( Phase-III), Bhiwadi – 301 019, Rajasthan
Country :	India
Financials (as on) :	30.09.2007 (18 months)
Date of Incorporation :	19.03.1986
Com. Reg. No.:	016132
CIN No.: [Company Identification No.]	L24305RJ1986PLC016132
TAN No.: [Tax Deduction & Collection Account No.]	JPRA01280G
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of Optical Fibres

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 7450810
Status :	Satisfactory
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. Nothing adverse reported. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	F-1080, RIICO Industrial Area ( Phase-III), Bhiwadi – 301 019, Rajasthan
Tel. No.:	91-1493-221954 / 221955 / 221636 / 223536
Mobile No.:	91-9812076758
Fax No.:	91-1493-221636
E-Mail :	aksh@akshoptifibre.com csl@akshoptifibre.com
Website :	http://www.akshoptifibre.com
Corporate Office :	Enkay Towers, Udyog Vihar-V, Gurgaon – 122 016, Haryana, India.
Tel. No.:	91-124-2397101 / 2397103
Fax No.:	91-124-2450141
E-Mail :	aksh@akshoptifibre.com
Website:	www.akshoptifibre.com
Plant 1 :	F-1075-81, RIICO Industrial Area (Phase III), Bhiwadi – 301 019, Rajasthan, India
Tel No:	91-1493-221333 / 220763 / 220388 / 220718
Fax No:	91-1493-221955 / 223536
Plant 2 :	A-315 (B), RIICO Industrial Area (Phase I), Bhiwadi – 301 019, Rajasthan, India
Tel./Fax No.:	91-1493-221955 / 223536
Plant 3 :	A-58-59, RIICO Industrial Area, Shri Khatushyamji Industrial Complex, Ringus, Sikkar, Rajasthan, India

DIRECTORS

Name :	Dr. Kailash S. Choudhari
Designation :	Managing Director
Name :	Mr. P. F. Sundesha
Designation :	Director
Name :	Mr. Sanjay Kalra
Designation :	Director
Name :	Mr. D. K. Mathur
Designation :	Director
Name:	Mr. Narendra kumbhat
Designation:	Directors
Name :	Mr. B. R. Rakhecha
Designation :	Executive Director
Name :	Mr. Deepak Gupta
Designation :	Company Secretary

KEY EXECUTIVES

Name :	Mrs. Seema Narang
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

( As on 30.09.2007 )

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	8832501	20.56
Fls/Banks/MF/UTI	14900	0.03
Corporate Bodies	5545090	12.91
Directors and their relatives	9490540	22.09
FII’s/NRIs/OCBs	751028	1.75
Trusts	462620	1.08
Public	16383970	38.13
Foreign National	1481675	3.45
Total	42962324	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Optical Fibres.
Products :	ITC CODE	Product Description
	085447000	Optical Fibre Cable
	090011000	Optical Fibre
	000391690	Fibre Reinforced Plastic Rods

PRODUCTION STATUS

Installed Capacity	Unit	(30.09.2007)
Metal free Optical Fibre Cable Duct Type, Armoured and Aerial	Kms	79896
Proof Cable	Km/per annum	75000
Optical Fibre	Km/per annum	800000
Fibre Reinforced Plastic Rod	Km/per annum	500000
Production
Optical Fibre Cables	Kms	33288.66
Fibre Reinforced Plastic Rod	Kms	349711.14
Optical Fibre	Kms	260923.80

GENERAL INFORMATION

No. of Employees :	170
Bankers :	v Union Bank of India, 26/28 – D, Connaught Place, New Delhi v ICICI Bank Limited, New Delhi v Chinatrust Commercial Bank, New Delhi v Punjab National Bank, New Delhi
Facilities:	Particulars	30.09.2007 (Rs. In Millions)
	SECURED LOAN: Working Capital Facilities from Banks Cash Credit Facilities FCNR (B) / WTCL 9.50% Secured Non Convertible Debentures NOTE: A) Working Capital facilities from Union Bank of India are secured by way of first pari-passu charge on raw material, stock in process, finished goods, consumable and others stock and book debts (hereinafter referred as “Current Assets” both present and future. These facilities are further secured by way of second pari passu on the Fixed Assets of the Company and Personal Gurantee of Managing Director B) Working Capital from Punjab National Bank are secured by way of first pari-passu charge on Current assets both present and future. These facilities are further secured by way of second pari passu charge on the Fixed Assets of the Company and Personal Gurantee of Managing Director C) Working Capital facilities from ICICI Bank Limited are secured by way of first pari-passu charge on the current assets. These facilities are further secured by way of second pari-passu charge on the fixed assets of the Company to the extent of Rs.38.500 Millions. Non fund based facility (Revolving letter of credit facility) is also secured by way of first pari passu charge on the fixed assets of the Company. The above facilities are further secured by personal guarantee of Managing director.	161.227 --
	Total	161.227
	UNSECURED LOAN: Foreign Currency Convertible Bonds Loan from Managing Director Inter Corporate Deposits Short Term Loan from Bank # # Managing Director of the Company has provided his personal guarantee and pledge of part of equity shares held by him as collateral security for the loan.	312.892 32.500 408.156 25.000
	Total	778.548
Banking Relations :	Satisfactory
Auditors :	P. C. Bindal & Company
	Chartered Accountants
Address :	101, Sita Ram Mansion, 718/21, Joshi Road, Karol Bagh, New Delhi – 110 005, India
Associates/Subsidiaries :	v APAKSH Broadband Limited ( Subsidiary Company of erstwhile Aksh Broadband Limited) v Aksh Networks Limited ( Related to erstwhile Aksh Broadband Limited)

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
60000000	Equity Shares	Rs. 5 each	Rs. 300.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
42962324	Equity Shares	Rs. 5 each	Rs. 214.812 Millions

Issued, Subscribed and Paid up Capital includes:

a) 9,505,860 Equity Shares of Rs.5/- each issued as fully paid up Bonus Shares by capitalization of Securities Premium and Reserves

b) 1,660,942 Equity Shares of Rs.5/- each issued as fully paid up to Shareholders of Telecords India Private Limited pursuant to Scheme of Arrangement

c) 714,032 Equity Shares of Rs.5/- each fully paid up issued at premium of Rs.57/- per share, upon conversion of Foreign Currency Convertible Bonds (FCCBs.)

d) 20,210,400 Equity Shares of Rs.5/- each issued to Shareholders of erstwhile Aksh Broadband Limited as fully paid up pursuant to Scheme of Amalgamation.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.09.2007 (18 months)	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		214.811	110.189	110.200
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1275.351	591.415	487.100
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1490.162	701.604	597.300
LOAN FUNDS
1] Secured Loans		161.277	162.329	332.300
2] Unsecured Loans		778.548	30.000	05.000
TOTAL BORROWING		939.825	192.329	337.300
DEFERRED TAX LIABILITIES		125.393	74.679	0.000
TOTAL		2555.380	968.612	934.600
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1053.652	598.084	653.000
Capital work-in-progress		28.039	12.498	03.100
INVESTMENT		881.532	105.782	106.300
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	289.126	109.802	152.700
	Sundry Debtors	521.861	196.758	89.900
	Cash & Bank Balances	50.114	69.040	10.900
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	205.396	49.390	131.000
Total Current Assets		1066.497	424.990	384.500
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	436.891	112.251	212.000
	Provisions	37.449	61.800	04.300
Total Current Liabilities		474.340	174.051	216.300
Net Current Assets		592.157	250.939	168.200
MISCELLANEOUS EXPENSES		0.000	1.309	04.000
TOTAL		2555.380	968.612	934.600

PROFIT & LOSS ACCOUNT

PARTICULARS		30.09.2007 (18 months)	31.03.2006	31.03.2005
Sales Turnover		1183.000	1027.980	382.700
Other Income		0.000	0.000	04.500
Total Income		1183.000	1027.980	387.200
Profit/(Loss) Before Tax		14.062	222.804	(02.800)
Provision for Taxation		7.397	74.523	(22.800)
Profit/(Loss) After Tax		6.665	148.281	(321.400)
Expenditures :
	Raw Materials	122.353	36.001	193.600
	Depreciation	108.864	56.225	49.200
	Power and Fuel Cost	0.000	0.000	11.300
	Other Manufacturing Expenses	824.417	651.436	20.600
	Employee Cost	0.000	0.000	21.100
	Selling and Administration Expenses	111.995	58.837	40.300
	Increase/(Decrease) in Finished Goods	0.000	0.000	31.300
	Miscellaneous Expenses	1.309	2.676	40.200
Total Expenditure		1168.938	805.175	407.600

SUMMARISED RESULTS

PARTICULARS	30.09.2008
Type	Full Year
Sales Turnover	1492.300
Other Income	29.000
Total Income	1521.300
Total Expenditure	1651.000
Operating Profit	(129.700)
Interest	67.200
Gross Profit	(196.900)
Depreciation	123.400
Tax	(83.400)
Reported PAT	(208.200)
Dividend	0.000

KEY RATIOS

PARTICULARS		30.09.2007 (18 months)	31.03.2006	31.03.2005
PAT / Total Income	(%)	0.56	14.42	(83.00)
Net Profit Margin (PBT/Sales)	(%)	1.18	21.67	(0.73)
Return on Total Assets (PBT/Total Assets}	(%)	0.46	19.52	(0.26)
Return on Investment (ROI) (PBT/Networth)		0.09	0.31	0.00
Debt Equity Ratio (Total Liability/Networth)		0.31	0.24	0.36
Current Ratio (Current Asset/Current Liability)		2.24	2.44	1.77

LOCAL AGENCY FURTHER INFORMATION

BIODATA:

Subject originally promoted by Chodhari and Navani family with Dr Kailash S Choudhari as the sole promoter, was established as a private limited company on March 1986 in the name of Aksh India Private Limited and was converted into public limited company on March 1994 and subsequently changed its name to property reflect the core activities of the company.

Subject originally used to manufacture and export PVC and PE Insulated Speciality Cables and later on diversified into Optical Fibre Cables.

Subject manufactures largest capacity of Optical Fibre Cables in India and is one of the few manufacturers who have integrated their operations backwards in production of Fibre and Perform. All the plants are ISO-9002 certified by underwriters Laboratories, U.S. for drawing and insulating of nonferrous wire. The company is one of the few which has capabilities of manufacturing Proof Cable which used to manufacture bullet proof articles. In addition to domestic market, the comp-any exports cables to western markets like U.K., Indonesia and Thailand.

During the year 2000, the company has entered into a scheme of merger with Telecords (India) Private lImited., as a major step towards backward integration for manufacturing FRP rods, one of the principal raw material use to manufactre optical fibre cables and hence will be the only one in India that manufactures FRP rods as well as optical fibre.

The company has initiated steps to build an additional state-of-the-art facility to manufacture FRP Rods, Optical Fibre and Proof Cable at Khatushyamji – Ringus and has acquired 1,88,720 Sq.mtrs., of land with its installed capacity from 120,000 to 30,000 km per annum. The company believes that its capacity to manufacture FRP rods will be the highest in the world.

The company is planning top expand their current capacities of optical fibre cables to 2,10,000 ckm. Fibre capacity to 53,00,000 ikm and FRP capacity to 10,00,000 km by March 2002.

Subject is in the process of incorporating two wholly-owned subsidiaries which will be up and running within 15 months. Of these, one subsidiary will telecom offer solutions to bandwidth owners and the other will deliver convergence solutions (addressing the fibre-to-home domain) through services like voice telephony, fast Internet downloads and video-on-demand.

OPERATIONAL REVIEW:

During the period the Company has achieved a turnover of Rs. 1274.802 millions as compared to a turnover of Rs. 1131.608 millions during the previous year. The turnover was lower primarily due to delay in finalization of tenders by the Telecom companies. Net Profit after Tax (PAT) during the year under review was Rs. 6.666 millions

SCHEME OF AMALGAMATION:

During the period the company has under the provisions of Sections 391 to 394 of the Companies Act, 1956, and with the approvals of the shareholders and creditors as also of the Hon'ble High Court of Judicature at Rajasthan and Delhi, has merged and acquired, through the Scheme of Amalgamation (the Scheme) the undertaking of Aksh Broadband Limited into itself. The shareholders of erstwhile subject, they allotted equity shares in the ratio of 7:2 shares in the Company, in terms of the Scheme and are listed on the Stock Exchanges. The successful implementation of the Scheme of Amalgamation has resulted in enhancement of shareholder value. 

EQUITY SHARE CAPITAL:

During the year, the Company has allotted 714032 equity shares of Rs. 5/- each at a price of Rs. 62/- per share upon part conversion of FCCBs

The Company, during the year, has issued 2,02,10,400 equity shares of Rs.5/- each to the shareholders of erstwhile Aksh Broadband limited (ABL) consequent upon the amalgamation of ABL with the Company. 

 Accordingly, the Authorised Share Capital of the Company was increased from Rs. 250.000 millions to Rs. 300.000 millions. 

SUBSIDIARIES:

During the period, APAKSH Broadband Limited became a subsidiary of the Company consequent to merger of Aksh Broadband Limited with the Company. 

The Statement pursuant to Sec. 212 of the Companies Act, 1956 and the Audited Statements of Accounts along with the Report of the Board of Directors and Auditors' Reportthereon on the Subsidiary Company have not been annexed as the same have not been made available by the subsidiary Company, The Company has made necessary application to the Ministry of Corporate Affairs seeking dispensation from the compliance of Sec.212(1) with respect to attachment of audited statements of Accounts along with the Report of the Board of Directors and Auditors' Report thereon. 

MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL STATEMENTS AND OPERATIONAL RESULTS :

Statements in the Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results may defer materially from those expressed or implied. Important factors, which could make a difference to the Company's operation include economics conditions affecting, demand/supply and price conditions in the domestic and overseas markets in which the Company operates, dependence on certain customers, change in Government regulations, and other statutes and incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information and events. 

 INDUSTRY STRUCTURE AND DEVELOPMENTS :

The telecom industry globally is building high capacity networks, as service providers are setting up new forms of valuable traffic. Wire line is optimized to provide high-speed data applications as against wireless, which has limitations in terms of bandwidth and spectrum, when it comes to high-speed data. The global trend clearly shows that to support high speed broadband networks, and to provide platform for network management services for large firms, and also for new offerings like Triple play, Ethernet leased-lines, bandwidth-on-demand etc., new optical transmission networks are required.

India is now one of the fastest growing telecom markets having achieved significant growth in teledensity predominantly in urban & semi-urban segments. The New Policy Framework has focused on creating an environment, which enables continued attraction of investment in the sector and allows creation of communication infrastructure by leveraging on technological development.

The key demand drivers for Optical Fibre & Cables in India are - Growth in Broadband usage, aggressive Network expansion through Telecom Companies namely BSNL and MTNL. Government of India has a target of reaching 20.000 million Broadband subscribers by 2010 by adding 0.500 Million Broadband connections per month from Jan.2008 to Dec.2010. Telecom players are providing value added services requiring high quality network and higher bandwidth. The growing e-commerce market which includes trading in goods and services, financial settlement systems, travel, distribution and electronic processing of bills would also require very high bandwidth to accommodate the large amount of data being transferred for these applications. Plans announced by other major telecom players to offer IPTV services would further fuel up the demand for Optical Fibre Networks.Besides the above, there are good prospects for exports from India, especially to emerging markets.

The Company has signed agreements with Mahanagar Telephone Nigam limited (MTNL), the incumbent telecom service provider in Mumbai & Delhi, to provide value added services such as Voice Over Internet Protocol (VOID) and Internet Protocol Television (IPTV) on the Broadband Network of MTNL.The services of VOIP have been commercialty launched in Delhi and Mumbai and that of IPTV in Delhi 

OPPORTUNITY, THREATS & BUSINESS OUTLOOK :

The Company has carried out Research and development in the area whereby the required bandwidth for access network application can be achieved by developing higher fibre count 48F/96F/144F Ribbon cables got approval and supplied to BSNL India. 

The Company has developed a new Air Blown Fibre Cables upto 12 Fibre count in 1.6mm to 2.0mm diameter, which can be used in existing micro ducts and supplied huge quantity to European Countries. The Company has developed an All Purpose Optical Fibre Cable upto 12F count, having very high tensile strength, high flexibility, low weight and being cost effective, this cable can be installed in all the applications like Aerial, Burial and Duct.

The Company has also developed higher count double layer Optical Fibre Cable and supplied to European Countries. 

The increase in FTTH demand is due to customer "pull" tied to the desire for enhanced video, voice and data services, known as triple play. During the period 2007-2012 cabled fibre demand is projected to grow by 9% per year by volume. 

IPTV technology is gaining tremendous industry momentum and aggressive deployment among service providers worldwide and in India. According to a study done by ABI Research, total subscribers for IPTV may exceed 120 million by 2010 with Asia Pacific constituting roughly 47 per cent of the total subscribers worldwide. China and India are seen as major markets.

With average revenue per user for fixed line telephony service falling every year, telecoms want to provide additional value-added services to their customers. Operators and content providers are coming together to deliver value added services, but the industry is still evolving standards in India. State owned telecos viz. MTNL and BSNL are the forerunners in IPTV segment. 

FIXED ASSETS:

• Freehold Land
• Leasehold Land
• Factory Buildings
• Residential Buildings
• Plant and Machinery
• Telecom Networking Equipments and Accessories
• Testing Instruments
• Air Conditioners
• Furniture and Fixtures
• Office Equipments
• Data Processing System
• Electric Fittings
• Vehicles
• Fork Lift
• Intangible Assets - Software

Trade References:

v Bharat Sanchar Nigam Limited

v Shin-Etsu, Japan

v Kiran Udyog

v Punj Llyod

v Reliance Petroleum Limited

v Spectranet

v Bharti

v Technology Parks

WEBSITE DETAILS ATTACHED:

Subject was incorporated in the year 1986 as Private Limited Company. It was converted into a Public Limited Company on 13th March, 1994.

The company diversified into the manufacture of Optic Fibre Cables in September 1994, by setting up a plant amidst pastoral environment at Bhiwadi, Rajasthan that is at a distance of about 70 Km from New Delhi. The project was setup with a state of art computerized machinery supplied by the Rosendahl (Austria), an affiliate of Alcatel under their guarantee for producing cables of highest quality with annual capacity of 6500 CKM.

In order to protect itself from raw material shortages, subject, in 1995, set up a 150,000 fibre kilometre (fkm) facility for manufacture of optical fibres from quartz 'Preforms'. Nokia of Finland supplied the equipment. This was the first stage of backward integration for them. With this set-up subject was among the first companies in India to set up its own fibre optic-manufacturing units. In 1999- 2000 it changed focus to exclusively manufacturing optic fibre and optic fibre cables and hived off the copper division and acquired CMI Limited's Optic Fibre division, a move that enhanced its capacities from 33,222 ckm in '98-99 to 50,358 ckm.

Subject has two plants at Bhiwadi and one at Jaitpura, Rajasthan manufacturing FRP rods, with capacity of I.2 lac. Subject has also recently commissioned a fibre tower and has increased capacity of FRP manufacturing, from 1.2 lac to 3 lac km per annum, at Ringus. Both the plants at Bhiwadi are ISO-9002 certified by Underwriters

Laboratories for manufacture of premises cable .

Currently subject has an in-house capacity to manufacture 150,000 fkm. This has been increased by 6,50,000 fkm by commissioning of the 1st tower under the old project.

In the Financial Year (FY) 2001, Subject manufactured 92,379 fkm out of its installed capacity of 150,000 fkm. It

bought 107,480 fkm from outside sources, through its long-term contracts for sourcing of fibre from Korea and

Japan since 1999.

Subject raised Rs. 358.10 million through a public issue in August 2000, to finance the expansion of optic fibre

capacity from 150,000 fkm to 1.45 million fkm per annum; optic fibre cables from 50,358 ckm to 81,000 ckm; and

for creating capacity to manufacture preforms for 1.08 million fkm per annum.

Recently Subject has taken a step further for backward integration by merger with Telecords (I) Private Limited for the

manufacture of Fibre Reinforced Plastic (FRP) rods.

Subject produces variety of cables such as SingleMode & MultiMode Cables, Duct Cables, Armoured & Aerial Cables, Indoor and Outdoor Cables. The Company has also the facilities or producing ribbon Fibre Optic Cables.

subject has recently developed a new cost-effective concept called "Fibre-to-Home", through which they expect to

revolutionise the IT and telecom industry completely. It's a concept that would bring wireless Voice, Audio, Video

and Internet direct to home.

v 1986 : Incorporated as a Private Limited Company.

v 1994 : Converted into a Public Limited Company

v 1994 : Diversified into the manufacture of Optic Fibre Cables (OFC) by setting up a plant at Bhiwadi (Plant-I). Annual capacity - 6500 Cable Kilometers (CKM).

v 1995 : Integrated backwards into manufacture of Optical Fibre with Annual

capacity of 150,000 Fibre Kilometres (FKM).

v 1998 : ISO 9002 accreditation by United Laboratories (UL), USA

v 1999 : Turnover OFC manufacturing capacity to 33,000 CKM

v 1999 : Took over the Optical Fibre Cable plant of CMI Limited, Plant-II, Capacity increased to 50,000 CKM.

v 2000 : Came with an IPO and got listed on BSE, NSE and JSE.

v 2000 : Merged Telecords (India) Private Limited manufacture of FRP rods with Plant at JaitPura (Plant -IV).

v 2001 : Enhanced the production capacity of Fibre to 1.45 million FKM, by commissioning a dual

Fibre Drawing Tower

v 2001: Started a plant for Fibre Reinforced Plastic (FRP) rods at Ringus (Plant-III) with capacity of 0.3 million KM.

v 2002 : Increased capacity at Ringus plant to 0.8 million KMs

v 2003 : Added capability to manufacture Ribbon cable and special access cable FTTH

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. 49.12
UK Pound	1	Rs. 72.59
Euro	1	Rs. 63.52

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	YES
--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

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