MIRA INFORM REPORT

Report Date :

08.02.2008

IDENTIFICATION DETAILS

Name :	SUNSHIELD CHEMICALS LIMITED
Registered Office :	Yudhishthir, 1^st floor, Ganesh Peth Lane, Dadar [West], Mumbai 400028, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	19.11.1986
Com. Reg. No.:	041612
CIN No.: [Company Identification No.]	U99999MH1986PLC041612
TAN No.: [Tax Deduction & Collection Account No.]	MUMS38695G
PAN No.: [Permanent Account No.]	AAFCS8219K
Legal Form :	A Closely held Public Limited Liability Company
Line of Business :	Manufacturer and Exporter of various Antioxidants and Speciality Surfactants

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 300000
Status :	Sick Unit
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is a Sick Unit and is been referred to BIFR. Its financial position is poor and has huge accumulated losses. Payments are reported as slow and delayed. The Company can be considered for any business dealings on safe and secured trade terms and conditions.

LOCATIONS

Registered Office :	Yudhishthir, 1^st floor, Ganesh Peth Lane, Dadar [West], Mumbai 400028, Maharashtra, India
Tel. No.:	91-22-24301454 / 24301057 / 24308261
Fax No.:	91-22-24307094
E-Mail :	satish.kelkar@sunshield.in
Website :	www.subshield.in
Administrative Office :	N. K. M. International House, 178, Backbay Reclamation, Babubhai Chinai Marg, Mumbai 400020, Maharashtra, India
Tel. No.:	91-22-22838293 / 22838294 / 22838294
Fax No.:	91-22-22838291
Factory /R & D Centre:	Pali-Khopoli Road, Village Rasal, Taluka Sudhagad, District Raigad, Maharashtra, India
Tel. No.:	91-2142-242226 / 242046 / 242117

DIRECTORS

Name :	Mr. Amit C. Choksey
Designation :	Chairman
Name :	Mr. Ashok R. Datar
Designation :	Director
Name :	Mr. Bipin V. Jhaveri
Designation :	Director
Name :	Mr. Kaushik C. Shanghvi
Designation :	Director
Name :	Mr. Manubhai G. Patel
Designation :	Director
Name :	Mr. Sandeep H. Junnarkar
Designation :	Director
Name :	Mr. Shreerang R. Belgaonkar
Designation :	Director
Name :	Mr. Satish M. Kelkar
Designation :	Vice Chairman and Managing Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	4641717	63.13
Directors and Their Relatives	2500	0.03
Financial Institutions, Banks	14131	0.19
Mutual Funds, AXIS Bank	700	0.01
Other Corporate Bodies	370453	5.04
Public	2323559	31.60
Total	7353060	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of various Antioxidants and Speciality Surfactants
Products :	Plastic / Polymers / Rubber / Latex Lubes, Oil Wire Enamels Paints, Coatings, Insulation Enamels, Inks Glass Fibre Cosmetics & Toiletries Agro Chemicals

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Auxiliary Chemicals	MT	23000	4475.56

GENERAL INFORMATION

Suppliers :

Ø Dimple Drums & Barrels Private Limited

Ø R. V. Dalvi & Associates

Ø P. P. Maheshwari & Brothers

Bankers :

Ø Bank of Baroda

Ø The Saraswat Co-operative Bank Limited

Ø State Bank of India

Facilities :

Particulars	As on 31.03.2007 [Rupees in Millions]
SECURED LOAN
Long Term Loan from Scheduled Banks	80.299
Short Term Loans for Working Capital Facilities :
From Scheduled Banks	55.605
From NBFC against Bills Factored	8.084
Total	143.988
UNSECURED LOAN
[a] Employees Contribution for Residential Quarters	0.199
[b] Interest free sales tax deferral loans :
I] 1983 Scheme	3.137
Ii] 1988 Scheme	51.224
Iii] Deferred Sales Tax – 1993 Scheme	12.971
Iv] Interest Accrued and due	1.846
[c] Unsecured Loans from a Director and an Associate Co.	37.250
Total	106.627

Banking Relations :	--
Auditors :
Name :	Tembey and Mhatre Chartered Accountants
Associates/Subsidiaries :	Ø Aeonian Investments Company.Limited Ø Abhiraj Trading & Investments Private Limited Ø Apcotex Industries Limited Ø Amisha Credit & Capital Private Limited Ø Apco Enterprises Limited Ø Bnuvantray Investment & Trading Company Private Limited Ø Balasesh Leafin Limited Ø Mazda Colours Limited Ø Cons Holdings Limited Ø Cybele Paradise Private Limited Ø Dhumravama Trading and Investments Private Limited Ø Acquamarine Investments & Trading Company. Private. Limited. Ø Gauriputra Trading & Investments Company. Private. Limited Ø Joshimath Trading & Investments Private Limited Ø Laxmanjhula Trading & Investments Private Limited Ø Mustang Investments Private Limited Ø Choksey Chemicals Private Limited Ø HMP Minerals Private Limited Ø Hindustan Mineral Products Limited Ø Apcosoft Private Limited Ø Nurture Finance Limited Ø Priyam Investment Consultants Limited Ø Standard Chartered Asset Mgmt. Company. Private. Limited. Ø Belt Trading and Investments Private Limited Ø Dhuraketu Investments & Trading Company. Private Limited. Ø Forest Hills Trading and Investments Private Limited. Ø Haridwar Trading and Investments Private Limited. Ø Propycon Trading & Investments Private Limited. Ø Saldhar Investments & Trading Company Private Limited Ø Samuel Dracup & Sons (India) Private Limited Ø Shyamal Finvest (India) Limited Ø Titan Trading & Agencies Limited Ø Trivikram Investments & Trading Company Limited
Solicitors :	Junnarkar and Associates

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
15000000	Equity Shares	Rs. 10/- each	Rs. 150.000 Millions
5000000	7% Non Cumulative Redeemable Preference Shares	Rs. 10/- each	Rs. 50.000 Millions
	Total		Rs. 200.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7353060	Equity Shares	Rs. 10/- each	Rs. 73.530 Millions
5000000	7% Non Cumulative Redeemable Preference Shares	Rs. 10/- each	Rs. 50.000 Millions
	Less : Redeemed during the year		Rs. 50.000 Millions
	Total		Rs. 73.530 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		73.530	86.765	46.800
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		90.915	22.082	[35.500]
4] (Accumulated Losses)		[87.317]	[59.190]	0.000
NETWORTH		77.128	49.657	11.300
LOAN FUNDS
1] Secured Loans		143.988	158.338	89.500
2] Unsecured Loans		106.628	69.392	62.700
TOTAL BORROWING		250.616	227.730	152.200
DEFERRED TAX LIABILITIES
TOTAL		327.744	277.387	163.500
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		221.622	192.999	115.400
Capital work-in-progress		0.000	0.000	0.500
INVESTMENT		0.025	0.025	0.000
DEFERREX TAX ASSETS		11.669	7.011
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	49.361	44.824	30.400
	Sundry Debtors	69.542	64.148	35.700
	Cash & Bank Balances	5.560	1.648	2.600
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	27.091	14.344	19.700
Total Current Assets		151.554	124.964	88.400
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	57.126	48.528	43.100
Total Current Liabilities		57.126	48.528	43.100
Net Current Assets		94.428	76.436	45.300
MISCELLANEOUS EXPENSES		0.000	0.916	2.300
TOTAL		327.744	277.387	163.500

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		334.738	273.318	200.500
Other Income		2.323	0.126	0.800
Total Income		337.061	273.444	201.300
Profit/(Loss) Before Tax		[27.403]	7.723	[8.500]
Provision for Taxation		4.149	4.075	19.800
Profit/(Loss) After Tax		[23.254]	3.648	[11.300]
Earning in Foreign Currency		NA	90.644	NA
Total Imports		NA	62.979	NA
Expenditures :
	Manufacturing and Other Expenses	319.363	248.382	20.100
	Loss on sale of asset	0.552	0.071	0.000
	Increase/(Decrease) in Finished Goods	5.394	[4.912]	0.000
	Deferred Revenue Expenses Written Off	0.917	1.364	0.000
	Depreciation & Amortization	11.910	9.244	8.500
	Interest	26.328	11.572	11.700
	Other Expenditure	0.000	0.000	169.500
Total Expenditure		364.464	265.721	209.800

QUARTERLY RESULTS

PARTICULARS	30.06.2007	30.09.2007	31.12.2007
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Sales Turnover	97.900	93.300	117.400
Other Income	0.400	0.500	2.600
Total Income	98.300	93.800	120.000
Total Expediture	89.500	83.100	108.900
Operating Profit	8.800	10.700	11.100
Interest	7.100	8.500	5.800
Gross Profit	1.700	2.200	5.300
Depreciation	3.600	3.700	3.700
Tax	0.100	0.100	0.100
Reported PAT	-2.000	-1.600	1.500

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	3.77	6.23	9.94
Long Term Debt-Equity Ratio	3.77	6.23	9.15
Current Ratio	2.74	2.35	1.60
Fixed Assets	1.48	1.61	1.13
Inventory	7.91	8.16	7.06
Debtors	5.59	6.16	6.39
Interest Cover Ratio	-0.04	1.66	0.38
Operating Profit Margin(%)	2.89	9.24	6.43
Profit Before Interest And Tax Margin(%)	-0.29	6.25	2.19
Cash Profit Margin(%)	-3.03	4.17	-1.00
Adjusted Net Profit Margin(%)	-6.22	1.17	-5.24
Return On Capital Employed(%)	0.00	7.73	0.00
Return On Net Worth(%)	0.00	11.96	0.00

LOCAL AGENCY FURTHER INFORMATION

Note :

Action taken under Section 23[1] of Sick Industrial Companies [Special Provision] Act, 1985

The company continues to be potentially sick under section 23[1] of the Act. The Company had carried out the necessary formalities required under the Act in the year 2005-2006. The Company is of the view that no fresh intimation to the concerned authorities needs to be given under the Act.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Industry Structure & Development:-

The Company produces Ethylene Oxide (EO) based derivatives called Ethylene Oxide Condensates (EOC). For EOC industry, EO is a vital input. EO is a product manufactured by Petrochemical complexes manufacturing MEG - one of the key inputs of Polyester fiber. Major use of EO, is for captive consumption to manufacture MEG for Polyester fiber.

Based on the captive requirements and market conditions for MEG, petrochemical complexes allocate EO to EOC industry. Prices of EO for EOC industry in India, continued to rule high during the year under review. The industry however, could not fully absorb these increases and had to sacrifice its operating margins.

Further high crude oil prices continued during the year affecting adversely prices of other petrochemical feed stocks and down line products, required by EOC industry.

Against this, reduced import duties on EOC made imports of EOC more economical for the user industries.

Under the circumstances, the Company had no other alternative but to continue to shift its business to Niche Specialty Surfactants, Esters, Amides and a range of Antioxidants for diverse user industries like Lubricants, Plastics / Polymers, Rubber / Latex, Agro, Pesticides, Ink, Coatings, Resins etc.

Product-wise performances Value Vs Volume:

During the year, value and volume sales of the Company's products registered growth of 22.0% and 18.6% respectively, over these of the previous year.

Job Processing, Income earned by the Company is from processing of WFC and certain specialty products and registered a negative growth of 36.5% in terms of quantity processed and 16.5% in terms of job income, over the previous year. Negative growth was due to build up of the stocks at the customer's, end and stoppage of customers' factory production in July,, 05 for more than a year and restarting of operations post mid half of 2006, which adversely affected quantities of WFC available for processing.

Operating and Financial Performance of the Company during the year 06-07:-

(The Company is operating in only one Segment)

1. Domestic sales registered a growth of 15% and exports registered a growth of 47% during the year under review.

2. There was uncertainty in the business of one of the important products of the Company during the last nine months of the year with exports of the material registering lower growth than what was planned.

3. Cost of Material consumption was higher by about 4% than what was in the previous year. This was on account of price rise in raw materials which could not be passed on to the selling prices.

4. Due to lower growth and increased fixed overheads that could not be brought down in short

period, operating margins came down sharply and resulted in a cash loss of over Rs.14.600 Millions as compared to a cash profit of Rs.18.300 Millions in the previous year.

5. Though in the early phase of the year, good export sales of the product referred to in 2 above could be registered, dispatches for the product were affected from July, 06 onwards

a. On account of change of applicable Law in United States in respect of wood used for pallets in containers used for exporting the goods and

b. Overstocking of the material at the Customer's end from alternate sources. Pressures of lesser demand continued till the.end of the year.

This resulted in the lower utilization of the newly created capacities and operating with disproportionately higher cost structures in terms of interest and other overheads.

6. Margins were severely affected and the operations resulted in cash loss as above.

7. The Company had, during the financial year 2005-06, taken up project to increase production capacities of certain Specialty Chemicals to meet increased demand from overseas customers. The Company had also planned for backward integration for some of the input materials and to increase the production capacity for Antioxidants and Surfactant. To raise resources to implement the said plan, the Company also made a Right Issue of equity shares during the year 06-07 in the proportion of 1:1. The Company has however kept in abeyance backward integration in terms of setting up capacity for the manufacture of input material that goes in the manufacture of one of the key products.

Fixed Assets:

Ø Land

Ø Building

Ø Plant and Machinery

Ø Furniture and Fixtures

Ø Vehicles

Ø R & D Centre

Ø Capital Work in Progress

CONTINGENT LIABILITIES:

[Rs. In Millions]

Estimated amount of contracts remained to be executed on capital accounts	4.792
Contingent Liability:
1) For Counter-Guarantees issued for Bank Guarantees and Letters of Credit issued	25.442
2] Claims not acknowledged as debts	3.706
3] Show cause cum demand notices issued by various authorities of Central Excise Dept. for which the Company has preferred appeals.	11.615

NOTES ON ACCOUNTS

1. Previous year's figures have been regrouped or reclassified wherever necessary to conform to current years' figures.

2. a) The Company came out with a Rights Issue of 36,76,530 Equity Shares of Rs.10/- each, issued at a premium of Rs.20/- per share in November, 2006. The paid-up Equity Share Capital of the Company stand increased from 36,76,530 Equity Shares of Rs.10/- each amounting to Rs.367.653 Millions to 7.353 Millions Equity Shares of Rs.10/- each amounting to Rs.73.530 Millions.

b) The Company on 14th December, 2006, redeemed 50,00,000 7% Non Cumulative Redeemable Preference Shares of Rs.10/- each as per one of the objects of the Rights Issue disclosed in the Letter of Offer dt.10th October, 2006.

c) The Issued and Paid-up Capital of the Company includes 1,38,600 Equity Shares of Rs.10/- each,, issued by way of capitalization of Reserves in 1991.

d) Reflects various special Capital Incentive Grants received under Sales Tax Deferral Schemes.

3. a) The term loans from Bank of Baroda and The Saraswat Co-operative Bank Limited have been secured by way of first charge ranking pari passu in the form of equitable mortgage created on the Company's immovable assets and hypothecation of the Company's movable assets situated at Village Rasal, Tal. Sudhagad, Dist. Raigad, Maharashtra State, including movable machinery, spares tools and accessories, present and future and second charge on stock of raw materials, semi-finished goods and finished goods, consumable stores and such other movables by way of hypothecation.

b) The working capital facilities from consortium Banks namely Bank of Baroda, State Bank of India, The Saraswat Co-operative Bank Limited (SACO) and packing credit facilities from Bank of Baroda and SACO are secured by way of pari passu first charge on Company's stock of Raw Materials, Semi Finished Goods and Finished Goods, consumable stores and such other movable and book debts (excluding specified and marked supply bills discounted with SACO separately for which independent exclusive security is created in favour of the bank) present and

future and pari passu second charge in the form of equitable mortgage on the Company's Fixed assets, present and future, situated at Village Rasal, Tal. Sudhagad, Dist. Raigad, Maharashtra State.

c) As per the terms & conditions set out in the restructuring of facilities, the Consortium of Bankers have reserved right to claim recompensation of differential interest. Bank of Baroda, the leader of the consortium has vide their letter dt.22.12.06 has requested the Company to submit the time schedule for the payment of differential interest of Rs.3.706 Millions computed upto 30th September, 2006. In view of the accumulated losses over the years and loss during the period under review, the management does not recognize the possibility of a sustainable claim of differential interest raised / to be raised by banks. Hence no provision is made in the accounts though the same is disclosed under the contingent liabilities as claims not acknowledged as debts. '

4. The Company has obtained Bills Factoring facility from Global Trade Finance Ltd., a registered Non Banking Finance Company against bills raised on approved domestic and export customers.

5. The Management has reviewed the element of impairment of all of its fixed assets and no impairment has been identified.

6. Amounts repayable out of Long Term Loans (Secured & Unsecured), within one year (April 2007 to March 2008) are Rs.44.758 Millions (previous year ended 31st March, 2006, Rs.28.491 Millions).

7. a) The Company has availed of sales tax deferral incentives for industries located in backward area under the schemes of the Government of Maharashtra (GOM) called "1983 Scheme", "1988 Scheme", "1993 Scheme". Over the period of years it has aggregated sales tax deferral of Rs.103.580 Millions (previous year Rs.100.260 Millions. After repayments of Rs. NIL ( a sum of Rs.12.991 Millions was due on 30th April, 2006 but remained unpaid due to negative cash flow) made during the year ended 31st March, 2007 (previous year Rs.10.327 Millions) the said outstanding Sales Tax deferral is Rs 80.492 Millions (Previous Year Rs.77.173 Millions).

As per statutory option available to the Company, it has opted to convert the said amount of sales tax deferral under the scheme as an interest free unsecured loan. The formalities for such conversion with respect to part of 1993 scheme-are in Progress with GOM.

b) GOM has issued notification No. STR-12.02/CR-102 /Taxationl dated 16.11.2002 (herein after referred to "the said notification") which provides a basis of discounting Sales Tax Deferral. Relying on the said notification and the repayments made, the Present Value of the Sales Tax Deferral outstanding as on 31st March, 2007 is computed as Rs.67.332 Millions (previous year Rs.59.235 Millions).

c) As per the requirement of Accounting Standard - AS 29, the Company has provided for entire sales tax deferred during the year ended 31st March, 2007 amounting to Rs.0.493 Millions (previous year Rs.1.335 Millions).

d) With respect to Sales Tax Deferral prior to 01.04.2004 (refer Accounting Policy 15 k) 3.(i) of Schedule 22), the provision has been made for the year ended 31st March, 2007 for the incremental present value of Rs.4.777 Millions - (previous year Rs.5.638 Millions) and is appearing in Profit & Loss Appropriation Account.

e] A sum of Rs.129.912 Millions which was due for repayment on 30th April, 2006 towards Sales Tax Deferred under "1983 Scheme" and "1988 Scheme" is remained unpaid till date due to adverse cash flow during the year under review. As per the Agreement signed with Government of Maharashtra, for converting Sales Tax Deferral into interest-free Sales Tax Deferral Loan, interest @15.50% amounting to Rs.1.845 Millions has been provided in the accounts for the period of default i.e. from May'2006 till March'2007 and is appearing in Profit & Loss Account under "Interest to Others".

8. The estimated amount of Excise duty & Education Cess liability on Finished Goods lying at the factory as on 31^st March, 2007 is Rs.0.956 Millions (Previous year Rs. 1.160 Millions). The same has been included in the valuation of Finished Products stock.

AS PER WEBSITE DETAILS:

PROFILE:

Subject was incorporated in 1986, as private limited company and then became public.

Promoters have been in the business of Speciality Chemicals for over 35 years. Mr. Satish Kelkar, the Managing Director, along with his close friends and relatives, started the business. This family business was later turned into a listed company and in April 2005, Mr. Amit C. Choksey, from the family of founder promoters of Asian Paints, and Chairman of Mazda Colours, a prime Pthalocyanine blue & green manufacturer co- promoted, Sunshield’s business in the field of Antioxidants and Specialities for prime global customers.

Spread over more than 7.5 acres of land , Sunshield has its modern plant situated at Rasal, around 100 km from Mumbai, and just 60 km from the JNPT sea port convenient for making exports and imports.

Speciality Chemicals: With close inter user co-ordination, the company has developed many niche speciality products with unique applications for MNCs and large Indian corporate. It has a wide range of surfactants based on ethylene oxide condensates, propylene oxide condensates ,esters, amides and their blends that find application as emulsifiers and dispersants for agrochemicals, emulsifiers for textile auxiliaries; as mineral oil emulsifiers for coning oils, orchard or tree spray oils; as viscosity builders in the manufacture of toilet cleaning preparations; as anti foaming agents for paints and lubricants; in metal treatment as cleaning and corrosion inhibitors and many more.

Antioxidants: Sunshield manufactures a range of aminic and phenolic antioxidants for lubes, plastics, rubber, latex and related tyre industry.

Contract Operation: Solid Waste Handling- Sunshield develops customised process to responsibly handle waste and recover / seperate the valuable components and economically dispose the final waste.

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 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. 39.48
UK Pound	1	Rs. 77.44
Euro	1	Rs. 57.75

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	2
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	1
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	1
--CREDIT LINES	1~10	-
--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	NO
TOTAL		21

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