MIRA INFORM REPORT

Report Date :

12.12.2008

IDENTIFICATION DETAILS

Name :	QUALITY FOILS (INDIA) PRIVATE LIMITED
Registered Office :	3 Industrial Development Colony, Hisar – 125 005, Haryana
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	08.05.1990
Com. Reg. No.:	05-030929
CIN No.: [Company Identification No.]	U27107hr1990ptc030929
Legal Form :	Private Limited Liability Company
Line of Business :	manufacturers of Cold Rolled Stainless Steel Coils

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 370000
Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Trade relations are fair. Business is active. Payments are reported as usually made as per commitments. The company can be considered good for normal business dealings.

LOCATIONS

Registered Office / Works :	3 Industrial Development Colony, Hisar – 125 005, Haryana
Tel. No.:	91-1662-220327 / 220328/220329
Fax No.:	91-1662-220330
E-Mail :	contactus@qualityfoils.com go_kukreja@rediffmail.com
Website :	www.qualityfoils.com
Branches :	R -32, 1^st Floor, South Extn., - II, New Delhi – 110 049, India
Tel. No.:	91-11-26254767/26258086
Fax No.:	91-11-26252633

DIRECTORS

Name :	Mr. Kudip Bhargava
Designation :	Director
Address :	Anand Bhavan Opposite Jat College Hisar – 125 001, Haryana, India
Date of Birth/Age :	22.04.1953
Date of Appointment :	08.05.1990
Name :	Mr. Jagdeep Bhargava
Designation :	Director
Address :	Anand Bhavan Opposite Jat College Hisar – 125 001, Haryana, India
Date of Birth/Age :	01.05.1955
Date of Appointment :	08.05.1990
Name :	Mr. Sumant Bhatnagar
Designation :	Director
Address :	427 –P, Urban Estate – II, Hisar - 125 001, Haryana, India
Date of Birth/Age :	22.01.1952
Date of Appointment :	01.11.2001
Name :	Mrs. Tejasvi Bhargava
Designation :	Director
Address :	Anand Bhavan Opposite Jat College Hisar – 125 001, Haryana, India
Date of Birth/Age :	15.11.1979
Date of Appointment :	29.09.2003
Name :	Mr. Yashvir Singh
Designation :	Director
Address :	520-B, Krishna Nagar, Hisar – 125 001, Haryana, India
Date of Birth/Age :	10.01.1971
Date of Appointment :	01.05.2004
Name :	Mr. Aftab Ahmed
Designation :	Director
Address :	814/21A, Faridabad, Haryana, India
Date of Appointment :	10.02.2004

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mr. Kuldip Bhargava	27280
Mr. Jagdeep Bhargarva	7440
Mr. Krishna Bhargava	4900
Mr. Anshu Bhargava	4730
Mrs. Anuraddha bHargava	3240
Mrs. Tejasvi Bhargava	6990
Mrs. Tapasvi Bhargava	4510
Mr. Sudhanshu Bhargava	4670
Mr. Raghuvar Bhargava	4910
Mr. Jagdeep Bhargava (HUF)	5790
Mr. A P Bhargava (HUF)	7490
Mr. Kuldip Bhargava (HUF)	8670
Others	27880
Total	118500

AS ON 30.09.2008

Equity Share Breakup		Percentage of Holding
Category
Bodies corporate		16.00
Directors or relatives of directors		77.00
Others		7.00
	Total	100.00

BUSINESS DETAILS

Line of Business :

manufacturers of Cold Rolled Stainless Steel Coils

Item Code No. (Itc Code )	Product Description
7220.20	Cold Rolled Stainless Steel Strips

PRODUCTION STATUS (As on 31.03.2008):-

Installed Capacity & Production

	31.03.2008
Installed Capacity	10000.000 MT
Actual Production	4849.012 MT
Raw Material Consumed	4960.658 MT
Job Work Production	206.948 MT

Notes:

· Licensed capacity is not applicable in view of the company’s production having been de-licensed

· Installed Capacity is as certified by the management

Quantitative Statement of Finished Goods

Stock at Close

Manufactured Goods: Qty Amount

(MT) (Rs. In Millions)

· C.R. Strips – S.S. 75.936 11.961

· C.R. Strips – Brass 0.755 0.123

GENERAL INFORMATION

Bankers :

· State bank of India, SPl. Commercial Branch, Delhi Road, Hisar – 125 005, Haryana, India

· ICICI Bank

Facilities :

Secured Loans	31.03.2008 (Rs. In Millions)
Terms Loans
State Bank of India
Rupee Term Loan	11.405
(Secured by mortgage of land and Building and hypothecation of machinery)
State Bank of India	0.404
(Secured by hypothecation of vehicle)
ICICI Bank	0.679
(Secured by hypothecation of Vehicle)
Working Capital Loan from Bank	54.447
(Secured by hypothecation of stock, Book Debts and Other current assets)
Total	66.935

Unsecured Loans	31.03.2008 (Rs. In Millions)
Loans from Shareholders	57.218
Loans from Body Corporate	14.468
Total	71.686

Banking Relations :

----

Auditors :

Name :

Mr. Pradeep Kumar Jain

Chartered Accountants

Head Office :

6 Green Park, Hisar – 125 001, Haryana, India

Tel. No.:

91-1662-230229/324379

Branch Office :

I-59, South City –I, Gurgaon -122 001, Haryana, India

Tel. No.:

91-124-3258490

Mobile No.:

91-9811053732

Associates/Subsidiaries :

· Quality Stainless Private Limited

· Shinning Steels Private Limited

· The East Punjab Manufacturing Company

· Argentum Fashions Private Limited

CAPITAL STRUCTURE

AS ON 30.09.2008:-

Authorised Capital :

No. of Shares	Type	Value	Amount
200000	Equity Shares	Rs. 100/- Each	Rs. 20.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
118500	Equity Shares	Rs. 100/- Each	Rs. 11.850 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		11.850	11.850	9.900
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		61.967	55.350	36.106
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		73.817	67.200	46.006
LOAN FUNDS
1] Secured Loans		66.935	114.566	51.901
2] Unsecured Loans		71.685	38.049	39.891
TOTAL BORROWING		138.620	152.615	91.792
DEFERRED TAX LIABILITIES		11.308	10.514	9.182
TOTAL		223.745	230.329	146.980
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		77.124	78.617	66.820
Capital work-in-progress		2.048	0.039	1.335
INVESTMENT		5.609	0.725	0.290
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	101.688	198.628	95.543
	Sundry Debtors	100.305	84.964	90.217
	Cash & Bank Balances	9.444	10.727	3.182
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	25.769	24.700	18.733
Total Current Assets		237.206	319.019	207.675
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	92.989	161.457	124.737
	Provisions	5.253	6.614	4.403
Total Current Liabilities		98.242	168.071	129.140
Net Current Assets		138.964	150.948	78.535
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		223.745	230.329	146.980

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		946.333	1107.137	610.529
Other Income		7.052	0.106	3.074
Total Income		953.385	1107.243	613.603
Profit/(Loss) Before Tax		9.804	15.127	9.440
Provision for Taxation		3.187	5.632	2.805
Profit/(Loss) After Tax		6.617	9.495	6.635
Export Value		82.736	102.887	NA
Import Value		12.605	NA	NA
Expenditures :
	Financial Charges	23.820	29.903	11.166
	Excise Duty	134.637	153.376	85.096
	Personnel	9.650	8.877	7.743
	Manufacturing Expenses	762.702	884.199	487.937
	Administrative Expenses	7.502	10.262	8.384
	Depreciation & Amortization	5.270	5.499	3.837
Total Expenditure		943.581	1092.116	604.163

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	0.69	0.86	1.08
Net Profit Margin (PBT/Sales)	(%)	1.04	1.37	1.55
Return on Total Assets (PBT/Total Assets}	(%)	3.04	3.79	3.42
Return on Investment (ROI) (PBT/Networth)		0.13	0.23	0.21
Debt Equity Ratio (Total Liability/Networth)		3.21	4.77	4.80
Current Ratio (Current Asset/Current Liability)		2.41	1.89	1.61

LOCAL AGENCY FURTHER INFORMATION

Operations Results:-

Total Production of CRSS strips (inclusive of job production) during the year was 5055.960 MT against 5809.611 MT during the previous year. The total income was Rs. 953.384 millions during the years as compared to Rs. 1107.243 millions during the previous year and gross profit (before interest and depreciation) during the year was Rs. 38.893 millions against Rs. 50.528 millions during the previous year.

FIXED ASSETS:-

· Land

· Building

· Plant and Machinery

· Electrical

· Office Equipments

· Furniture and Fixtures

· Vehicles

· Generators

FORM 8

Corporate identity number of the company	U27107hr1990ptc030929
Name of the company	QUALITY FOILS (INDIA) PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	3 Industrial Development Colony, Hisar – 125 005, Haryana
This form is for	Modification of charge
Type of charge	· Hypothecation · Equitable mortgage or mortgage of property by depositing the title deeds · Others
Particular of charge holder	State Bank of India, Specialised Commercial Branch, Delhi Road, Hisar – 125 005, Haryana, India E-Mail: contactus@qualitygroup.in
Amount secured by the charge	Rs. 91.800 millions
Brief of the principal terms an conditions and extent and operation of the charge	First charge over the entire assets and goods of the company, movable and immovable - Rate of interest – cc (Hypothecation/BD domestic) 0.25% above SBAR , present effective rate 11 % p.a Term loan – I 0.25% above SBAR, present effective rate 11% p.a . Term Loan –II 0.75% below SBAR, present effective rate 10.00% p.a cc (EPC) as per RBI guidelines, EEP (Lc/Non) as per RBI guidelines.
Description of the property charged indicating whether it is a charged on	· Immovable properties · Stock in trade · Plant and Machinery · Book Debts
Particulars of the property charged (Including location of the property)	Factory Land and building situated at Behind 3 IDC Hisar measuring 21062 Sq.fts (2340 Sq.yds) Kharsa No. 119/19 (2268.75 Sq.yds) Factory Land and Building situated behind 3 I D C at Khasra No. 5475 /1(1-17), 5478/2 (7-3) measuring 2435.65 Sq.yds Factory Land and Building situated at 5 I D C Hisar Measuring 2435.65 Sq.yds Flat Situated at R – 32 First Floor South Extension part - ii new Delhi measuring 144 Sq.yds Plot at Faridabad Plot No. 26 Block – B, Lakadpur Faridabad (322.50 Sq.yds)
Charge identification number of the charge to be modified	80006613
Brief description of the instrument modifying the charge under section 135	· Form – C 1 A Agreement of loan for overall limit Form – C 2 A Agreement of loan for overall limit Form C 2A · Agreement of hypothecation of goods and assets Form C 3 A Agreement of pledge of goods.
Date of instrument modifying the charge	19.06.2006
Particulars of the present modification	First charge modified from Rs. 71.800 millions to Rs. 91.800 millions over the Fixed assets of the company.

Corporate identity number of the company	U27107hr1990ptc030929
Name of the company	QUALITY FOILS (INDIA) PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	3 Industrial Development Colony, Hisar – 125 005, Haryana
This form is for	Modification of charge
Type of charge	· Immovable property · Movable Property (not being pledge) · Others
Particular of charge holder	State bank of India, Spl. Commercial Branch, Delhi Road, Hisar – 125 005, Haryana, India E-Mail: contactus@qualityfoils.com
Nature of instrument creating charge	Form C – 2A Supplemental Agreement of hypothecation, Form C 5 Letter of grant of limits.
Date of instrument Creating the charge	23.09.2006
Amount secured by the charge	Rs. 170.900 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate on interest : CC (hypo) : 0.50% above SBAR , present rate of interest 11.50% p.a CC (EPC):As per RbI guidelines. FBP (non IC): As per RBI guidelines. Terms of Repayment: In case of Term Loans : Monthly Installments Margin: Stock : 25% Book Debts: 25% Letter of Credit : 15% Extent and Operation of charge: 1^st Charge on entire assets of the company.
Short particulars of the property charged (Including location of the property)	Factory land and Building situated at behind 3 IDC Hisar measuring 21062 Sq.fts, Khasra No. 119/19 Factory Land and Building situated at Behind 3 IDC Hisar Measuring 36374 Sq.fts Khasra No. 5475 /1)(1-17) 5478/2(7-3) Factory Land and Building situated at 5 IDC Hisar measuring 2435.65 Sq.yds Flat situated at R – 32, First Floor south extn., part -iI, New Delhi – measuring 144 Sq.yds. Plot No. 26 Block B lakarpur, Faridabad measuring 322.50 Sq.yds.
Particulars of the present modification	First charge modified from Rs. 91.800 millions to Rs. 170.900 millions over the entire assets of the company.

WEBSITE DETAILS:-

The company is a Cold-rolling plant for Stainless and Mild Steel set-up in 1982 at Hisar, Haryana started with a precision Four Hi-Mill to process 510 mm wide strips, and soon grew manifold in capacity by adopting state-of-the-art technology in the shape of another mill to roll wider material. The huge production capacity enabled the company to carve a place for itself as the major supplier of raw-material to the stainless and tubing industry in the country.

With quality as the attitude, a team of professional engineers cater to the customers' needs. The two Cold-rolling mills with associated processing strength and modern testing and measuring discipline offer a complete package.

They are one of the leading manufacturers of Cold Rolled Stainless Steel coils producing approx. 800 MT of material per month.

Since their inception in 1978, they are contributing approximately 80% of production to the Tube manufacturing industry. Apart from the two Modern Cold Rolling Mills their factory is equipped with Three Annealing Lines and Three Pickling Lines applying the latest technology. Two fine C.R. Slitters have been set up to cater to the needs of Specific Widths anywhere between 25mm to 700mm.

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.48.52
UK Pound	1	Rs.72.62
Euro	1	Rs.63.76

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	6
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--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	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		48

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