MIRA INFORM REPORT

 

 

Report Date :

13.02.2008

 

IDENTIFICATION DETAILS

 

Name :

ARO GRANITE INDUSTRIES LIMITED

 

 

Registered Office :

S-16 2nd Floor, Green Park Extension, New Delhi - 110016

 

 

Country :

India

 

 

Financials (as on) :

31.03.2007

 

 

Date of Incorporation :

03.05.1988

 

 

Com. Reg. No.:

55-31510

 

 

CIN No.:

[Company Identification No.]

U74899DL1988PLC031510

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

CHEA11854D

 

 

Legal Form :

Public Limited Liability Company. Company’s shares are listed on the stock exchanges.

 

 

Line of Business :

Manufacturer of Granite Tiles and Granite Slabs

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

USD 2800000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

 

 

LOCATIONS

 

Registered Office :

S-16 2nd Floor, Green Park Extension, New Delhi - 110016, New Delhi, India

Tel. No.:

91-11-46082325

Fax No.:

91-11-26520983

E-Mail :

arotile@giasbg01.vsnl.net.in

Website :

http://www.arotile.com

 

 

Head Office :

BB-13, Greater Kailash Enclave – II, New Delhi – 110048, India

Tel. No.:

91-11-2621 8660 / 2644 3025 / 2644 3026

Fax No.:

91-11-2621 8661

 

 

Administration Office and Unit 1 :

103, SIPCOT Industrial Complex, Hosur – 635126, Tamil Nadu, India

Tel. No.:

91-4344-276860/2 / 278460

Fax No.:

91-4344-276460

 

 

Unit 2 :

Koneripalli Village, VIA - Shoolagiri, Taluk - Hosur, District – Krishnagiri - 635117, Tamil Nadu, India

Tel. No.:

91-4344-252384

 

 

DIRECTORS

 

Name :

Mr Sunil K Arora

Designation :

Managing Director

Age : 

48 Years

Qualification :

B. Sc.

Experience :

20 Years

 

 

Name :

Mr Dinesh Chandra Kothari

Designation :

Director

 

 

Name :

Mr Amit Khanna

Designation :

Director

 

 

Name :

Mr Kasturi Lal Arora

Designation :

Director

 

 

Name :

Mr Sundareshwara G Sastry

Designation :

Director

 

 

Name :

Mrs Sujata Arora

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr Sabyasachi Panigrahi

Designation :

Company Secretary

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

Names of Shareholders

No. of Shares

Percentage of Holding

 

 

 

Directors and Relatives

2415282

34.406

Non-Resident Individuals / OCB’s

630264

08.978

Private Corporate Bodies

1450692

20.665

General Public

2523762

35.951

Total

7020000

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer of Granite Tiles and Granite Slabs

 

 

Products :

Item Code No.

Product Description

680223

Granite Tiles

 

 

Exports :

 

Products :

All Products

Countries :

United States of America, Singapore, Canada, Japan and Germany

 

 

Imports :

 

Products :

Diamond Tools and Spares

Countries :

Italy, Japan and Germany

 

 

 

PRODUCTION STATUS

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

UNIT-1 Granite Tiles

Sq. Meter

180000

180000

168899

UNIT-2 Granite Slabs

Sq. Meter

295000

295000

302316

 

 

GENERAL INFORMATION

 

No. of Employees :

About 2000

 

 

Bankers :

*      Bank of Baroda

*      ICICI Bank Limited

 

 

Facilities :

SECURED LOANS

31.03.2007

31.03.2006

 

Rs in Millions

a) Term Loan from the ICICI Bank Limited

(Secured by way of First charge on land, building, plant & machinery, spares, tools, accessories and other moveables of Unit II both present and future) and second charge on the fixed assets of Unit I of the company both present and future

4.500

22.500

 

 

 

b) Term Loan from the ICICI Bank Limited

Secured by 1st pari pasu charge on all the immovable and movable assets including all movable machinery and movable fixed assets both present and future of unit II of the company located at village: Koneripalli, via: Shoolagiri, Taluka: Hosur, Tamilnadu, India and also secured by personal guarantee of Promoter / Managing Director Mr. Sunil K Arora

90.692

0.000

 

 

 

c) BOB CC A/c

17.691

4.705

 

 

 

d) Packing Credit

74.484

36.288

 

 

 

e) Foreign Bills Discounted from Bank

(Secured by way of first charge on land, building, plant & machinery, spares, tools, accessories and other moveables of Unit I both present and future. Also Secured by hypothecation of Stock, Pledge of Government

Securities, ECGC, and Book Debts of both the Units of the Company. Second Charge on fixed assets of the Unit-ll and also secured by personal guarantees of

Promoters/Directors Mr. Sunil K Arora & Mr. Prem Arora)

 

214.956

183.577

 

 

 

f) Sales Tax Term Loan

(Charge on assets of the Company

pertaining to Unit - I)

2.225

2.284

Total

404.549

249.355

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Alok Mittal and Associates

Chartered Accountants

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

1,10,20,000

Equity Shares

Rs 10/- each

Rs 110.200 Millions

40,000

10% Convertible Cumulative Preference Shares

Rs 100/- each

Rs 4.000 Millions

 

Total

 

Rs 114.200 Millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

70,20,000

Equity Shares

Rs 10/- each

Rs 70.200 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

70.200

70.200

70.200

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

621.464

485.800

418.400

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

691.664

556.000

488.600

LOAN FUNDS

 

 

 

1] Secured Loans

404.549

249.400

226.400

2] Unsecured Loans

0.000

0.000

0.000

TOTAL BORROWING

404.549

249.400

226.400

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

1096.213

805.400

715.000

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

327.463

345.000

365.500

Capital work-in-progress

344.779

42.000

30.300

 

 

 

 

INVESTMENT

0.186

0.200

0.000

DEFERREX TAX ASSETS

(34.189)

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
309.034
201.100

185.700

 

Sundry Debtors
328.055
262.800

227.100

 

Cash & Bank Balances
37.954
4.000

3.800

 

Other Current Assets
63.231
0.000

0.000

 

Loans & Advances
26.302
64.200

46.500

Total Current Assets
764.576

532.100

463.100

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
290.434
104.300

134.600

 

Provisions
18.850
12.200

11.900

Total Current Liabilities
309.284
116.500

146.500

Net Current Assets
455.292
415.600

316.600

 

 

 

 

MISCELLANEOUS EXPENSES

2.682

2.600

2.600

 

 

 

 

TOTAL

1096.213

805.400

715.000

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2007

31.03.2006

31.03.2005

Sales Turnover

1045.215

781.910

747.500

Other Income

1.636

8.039

0.000

Total Income

1046.851

789.949

747.500

 

 

 

 

Profit/(Loss) Before Tax

150.291

84.344

129.600

Provision for Taxation

1.773

4.972

14.500

Profit/(Loss) After Tax

152.064

79.372

115.100

 

 

 

 

Earnings in Foreign Currency :

 

 

 

 

Export Earnings

1037.997

755.647

724.099

Total Earnings

 

 

724.099

 

 

 

 

Imports :

 

 

 

 

Raw Materials

67.778

23.687

198.228

 

Consumables

108.012

113.972

NA

 

Stores & Spares

1.454

28.187

NA

 

Overseas Business Traveling

3.577

1.957

NA

 

Others

1.337

1.188

NA

Total Imports

182.158

168.991

198.228

 

 

 

 

Expenditures :

 

 

 

 

Cost of Goods Sold

 

 

 

 

Manufacturing Expenses

282.217

204.484

NA

 

Administrative Expenses

34.449

28.327

NA

 

Raw Material Consumed

465.803

374.270

NA

 

Selling and Distribution Cost

2.674

5.963

NA

 

Financial Expenses

29.024

23.697

NA

 

Loss on sale of assets

0.108

1.329

NA

 

Salaries, Wages, Bonus, etc.

58.692

44.182

NA

 

Depreciation & Amortization

23.592

23.351

NA

Total Expenditure

896.559

705.603

NA

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2007

30.09.2007

31.12.2007

Type

1st Quarter

2nd Quarter

3rd Quarter

 Sales Turnover

246.700

243.800

249.900

 Other Income

0.000

0.000

0.000

 Total Income

246.700

243.800

249.900

 Total Expenditure

195.700

194.400

202.900

 Interest

51.000

49.400

47.000

 Gross Profit

8.100

4.800

8.100

 Depreciation

42.900

44.600

38.900

 Tax

5.600

6.300

9.000

 Reported PAT

0.400

6.000

4.200

 

36.900

32.300

25.700

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2007

31.03.2006

31.03.2005

Debt-Equity Ratio

 

0.52

0.46

0.41

Long Term Debt-Equity Ratio

 

0.10

0.06

0.12

Current Ratio

 

1.31

1.48

1.67

TURNOVER RATIOS

 

 
 

 

Fixed Assets

 

2.17

1.64

1.83

Inventory

 

4.10

4.04

4.54

Debtors

 

3.54

3.19

3.59

Interest Cover Ratio

 

6.18

4.56

7.20

Operating Profit Margin(%)

 

19.41

16.81

22.86

Profit Before Interest And Tax Margin(%)

 

17.15

13.81

20.39

Cash Profit Margin(%)

 

16.81

13.15

18.06

Adjusted Net Profit Margin(%)

 

14.55

10.15

15.59

Return On Capital Employed(%)

 

18.91

14.26

24.41

Return On Net Worth(%)

 

24.38

15.20

26.34

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Corporate Preview 

 

 

In conformity with its dedication to excellence, subject has installed the most sophisticated environment friendly granite processing machinery line from Italy.

 

Complimenting its state-of-the-art equipment, is the ingrained obsession for quality, which has got subject the ISO 9000 certification from RWTUV, Germany for Quality Management Systems.

 

Promoted by two technocrat industrialists Mr. Sunil K. Arora and Mr. Prem Arora, subject started its operations in the year 1991 with the manufacture of Polished / Flamed Granite Tiles with an installed capacity of 1,80,000 Sq. Mtrs.


This 100% Export Oriented Unit is ideally located at Hosur, which is just 35 Kms. away from Bangalore - the Granite Hub of India. The strategic & geographical location of the plant ensures close proximity and direct access to quarries in South India which are known for the finest and widest range of Granites.


In its quest for perfection, subject ensured that all the key personnel manning the processing machines are technically qualified and fully trained to operate the state-of-the-art machinery. A strict 100% inspection system is adopted at all stages of manufacturing process.

 

Over the years subject has earned a high degree of credibility with its broad clientele base as the most reliable and consistent supplier of premium Indian Granites.


The customer network of subject spans the globe and is currently meeting the granite needs of USA, Canada, Europe, Japan, Far East and South Pacific Countries.


Total Customer Satisfaction is the driving force at Aro Granites. Quality commitments and strict adherence to delivery schedules is the essence of its success and its growth.


Continuous in-house training programmes in various disciplines like TPM, 7 QC Tools, Quality of Life, Positive Mental Attitude, etc, help in achieving the organizational growth in the right direction.


The Unit II of subject manufacturing GRANITE SLABS is equipped with a processing line from some of the world's leading manufacturers making it, one of the finest slab manufacturing plants comparable to the best in the world and has an installed capacity og 1,68,000 Sq. Mtrs. The slab plant is ideally located near Hosur, just 55 kms, away from Bangalore.

 

WORKING RESULTS 


The year under consideration was ended on a positive note for the Company. During the year the Company reached a milestone by achieving a turnover of Rs. 1045.200 millions that is 33.67% more than the turnover of previous year (Rs. 781.900 millions). During the year the Company posted a net profit of Rs. 152.100 millions which is 91.58% higher than the net profit of previous year. There was an improvement in the availability of Raw Material in the domestic market and the Company also imported rough granite blocks from Saudi Arabia, Norway, Brazil and Finland etc. to augment the supply of raw materials to meet its requirements. 


The expansion programme undertaken by the Company is on the verge of Completion. Two new Gang-saws added to the existing gang-saw unit for manufacture of random granite slabs and the new tiling plant will be operational by end of the first quarter of the current financial year.

 
During the year, the Company for the sixth time has received Special Export Award from CAPEXIL for the year 2005-06. Also the ISO 14000 'Environment Management System' is under implementation. 

 

Management Discussion and Analysis 


Granite Industry - Structure & Developments 


India is one among the world's leading granite exporting countries and close competitor to China and Italy, which are the leaders. Granite Exports during the year 2005-07 crossed record level of Rs.40000 millions for the first time of which value added products like slabs, tiles, etc. accounted for 80% while the rest is from the Raw Blocks.

 

The market potential is abundant and there are excellent prospects for the Indian Granite Industry to get its due share in the world market. The professional and realistic approach towards solving the practical problems and careful planning of facilities by the Industry and Government can make India the leading exporter of the world market. The Industry shall have challenging years ahead but the potential for growth is beyond any reasonable doubt. 
 
Outlook 
 
Over the past few years, demand for Indian Granite, both in the domestic and foreign markets, has spurted. There is significant increase in demand for value-added products like Slabs, Tiles, Kitchen Tops & Countertops. Americans now prefer Indian Granite in place of Italian Marble. Various market Research Reports indicate that American Interior Designers and builders simply love the colour and Texture of the Indian Granite. The market is also observing a shift of the manufacturing facilities from Europe to places where the raw material and labor is available at cheaper rates. On this count, India, China and Brazil score over others. 


Opportunities & Threats for the Indian Granite Industry 


The factors contributing to the robust growth of the industry are as follows: 


Globally Granite Countertops and Table Tops are gradually becoming a necessity rather than a luxury, resulting in exponential increase in Granite Slab demand.

 

Increase in demand for Indian Granite in Europe and South American markets. 


Boom in Indian construction and infrastructure sector is also creating a growing demand in domestic market for slabs and tiles. 


Spurt in demand from China arising out of construction activity for Beijing Olympics (2008). 


The Italian processing industry used to source rough granite blocks from India, process and ship them to USA. However, with the Euro coming into picture, the ultimate buyers now prefer to source directly and this has given fillip to the granite processing industry in India. 


Importing exclusive Blocks from countries like Saudi Arabia, Norway, Finland, & Brazil, converting them into value added products and re-exporting to various countries across the globe is another opportunity for Indian Granite Exporters, since customers in various countries prefer to buy small quantities of these colours along with other Indian Granite. Also cheaper cost of processing / labour is an added advantage for India. 


With the Government support, the Indian Granite Industry is going to become the hub for sourcing the world requirements. The major competitor is China. However, China specializes mainly in black granites. 


The major threat areas include:


Non-availability of good quality Rough Blocks in requisite quantity for the Indian Processors. 


Use of old technology at the quarry sites. 


Stiff competition for Rough Blocks as well as finished products from countries like China and Italy. 


Quality of roads / transportation system and frequent port congestions are affecting the deliveries.

 
Product wise Performance 


India's Export of Granite during the last two years is as follows :-

    

(Rs. in millions) 

 

2005-06

2006-07

% Growth 

Total Export of Granite Products

 -3,600

-4,000

-11% 

ARO's export of Granite Products(Slabs and Tiles)

78.19

104.52

 -34% 

 

 Internal Control Systems & their adequacy 


The Company has finest manufacturing plants comparable to the best in the world, equipped with state-of-the-art machinery. A strict 100% inspection system is adopted right from selection of Rough Blocks to final inspection.

The Company maintains best quality standards to meet the ever-changing expectations of buyers worldwide, be it in terms of product quality or delivery. The Company is concentrating on continual improvement through implementation of ISO 9001:2000 Quality Standards and also Total Productive Maintenance (TPM) activities thereby achieving higher productivity & reduced costs. 


To meet the increasing demand, the Company is expanding its capacity for Slabs by 33% and Tiles by 200% by setting up New Tiling Plant and the expansion is expected to be completed by end of the first quarter of the current financial year.

 
Discussion on financial performance with respect to operational performance 


During the year the company achieved a turnover of Rs. 1045.200 millions, recording a 33% growth over the previous year's turnover, which was Rs. 781.900 millions. The increase in the turnover also resulted in the increase in the profitability of the Company. The Company posted a net profit of Rs. 152.100 millions, an increase of 91.58% over the previous year's net profit which was Rs. 79.400 millions. During the year the Company has not only overcome the problems of the previous year on various fronts, but also has been able to achieve some remarkable results. The domestic raw material situation has improved and the company has started importing rough granite blocks to bridge the raw material gap. The EPS has gone up from Rs. 11.31 to Rs. 21.66. The Board has recommended a dividend of 20% for the Equity Shareholders of the Company subject to the approval of the Members in the Annual General Meeting. 


Material Developments in Human Resources / Industrial Relations front, including number of people employed 


The key personnel manning the processing machines are technically qualified and fully trained to operate the state-of-the-art machinery. Continuous in-house training programmes are conducted in various disciplines, which help in achieving the organizational growth in the right direction. The company maintains cordial Industrial Relations with its employees & takes all possible care for their welfare. 

 

Fixed Assets

 

Granite Tiles 

 

The Tiles Unit of subject has an installed capacity of 1,80,000 Sq. mtrs and is equipped with a processing line from some of the world's leading manufacturers. A strict 100% inspection system is adopted during all stages of manufacturing process.


subject also offers Granite Tiles to customer's specific requirement.


Infrastructure

 

Production Process 

·         2 Numbers with 45 Blades in each Machine

·         2 Numbers with 32 Blades in each Machine

·         4 Diamond Roller

A.      Flaming

B.      Polishing

·         16 Head Machine with 6 Abrasives in each head

·         17 Head Machine with 6 Abrasives in each head

 

About Granite 

 

 

Natural Stone Geology:

 

Granite, coarse- or medium-grained intrusive igneous rock that is rich in quartz and feldspar; it is the most common plutonic rock of the Earth's crust, formed by the cooling of magma .

 

Because of its use as paving block and as a building stone, the quarrying of granite was, at one time, a major industrial activity. Except for tombstones, however, for which there is a continuing demand, the present production of granite is geared to the fluctuating market for curbing in highway construction and veneer used in the facing of large industrial and commercial buildings.


Granite may occur in dikes or sills (tabular bodies injected in fissures and inserted between other rocks), but more characteristically it forms irregular masses of extremely variable size, ranging from less than eight kilometres (five miles) in maximum dimension to larger masses (batholiths) that are often hundreds or thousands of square kilometres in area.

 

 

Press Releases

 

Indian Retail Market for Granite


Hosur, Tamil Nadu, 05.02.2008 : Aro Granite Industries Ltd. (AGIL) in the board meeting has decided to enter the growing Indian retail market for Granite.


The company with its in-depth product knowledge, state of the art facility for processing of granite slabs and tiles and ability to source a vast variety of granite from India and the International markets is poised to take the logical route of tapping into the India growth story.


The retail rollout would involve setting up of first of a kind branded model showroom for granite and on improvising on the model based on market feedback and to ramp up the total outlets to 25 outlets over a period of 5 years. Each outlet would be a complete fabrication unit delivering top quality finished, ready to install, customized products to the customer. To cater to this retail market entry the production capacity and facilities will also be increased accordingly.


About Aro Granite Industries Limited


Aro Granite Industries Ltd. is engaged in the manufacture of Modular Granite Tiles and Granite Random Slabs. It is a 100% Export Oriented Unit and exports its entire production to North America, Europe and the Far East. The Company is certified ISO 9001:2000 Quality Management Systems by RWTUV, Germany.


National Stock Exchange (NSE) Listing


Hosur, Tamil Nadu, 20-04-2007 : Aro Granite Industries Ltd. (AGIL) has gotten acceptance from NSE for listing on its exchange from 24th April 2007 (in addition to the existing listing on BSE). The symbol for the company on NSE shall be AROGRANITE


The shares shall be traded in the normal market segment (Rolling Settlement) in compulsory demat for all investors.


This step has been taken by the company to provide it's investors with greater ease of access to the company's stock. With the stock listed on NSE along with BSE, investing in the company's stock shall be available to a large number of additional investors who had limited acess to any one exchange.


With this listing, AGIL becomes the first 100% EOU granite processing company to be listed on the National Stock Exchange of India.


The company's shares closed at Rs. 104.30 on the BSE at the end of of closing on 20th April 2007.


About Aro Granite Industries Limited


Subject is engaged in the manufacture of Modular Granite Tiles and Granite Random Slabs. It is a 100% Export Oriented Unit and exports its entire production to North America, Europe and the Far East. The Company is certified ISO 9001:2000 Quality Management Systems by RWTUV, Germany.

 

Hosur, Tamil Nadu, 31.07.06:

 

To capitalize on the growing global demand for Granite Slabs and Tiles and the Company’s order book, Aro Granite Industries Ltd. (AGIL) has embarked on a major expansion plan for the financial year 2006-07.

 

The Company is poised to partake in the worldwide growth in Infrastructure projects, housing and reconstruction activities. With expanded capacities, assurance of raw material and most importantly commitment to quality, AGIL shall be at the forefront of being one of the most respected names in the Industry.

 

The Company’s Tile processing capacity shall be enhanced by 200% and slabs processing capacity shall be increased by 32%, effectively almost doubling the Company’s manufacturing capacity (see table for details). This would also bring the capacity close to the 1 million Sq. Mt. mark, (from the current 475,000 Sq. Mt.) making the Company one of the few Companies in India to achieve this level.

 

Expanded Capacity

All figures in Sq. Mt. / annum

 

Current capacity

Proposed Addition

Expanded Capacity

% Increase

Tile Plant –
Unit I

180,000

NIL

180,000

 

Tile Plant –
Unit II

 

 360,000

360,000

 

Total Tiling Capacity

180,000

360,000

540,000

200%

 

Gang Saw Plant – Unit II

295,000

95,000

390,000

32.2%

 

Total Company Capacity

475,000

455,000

930,000

95.8%

 

The total funds requirement of INR 340 million for this expansion, have already been arranged through a term loan sanctioned by ICICI Bank to the tune of INR 240 million and the balance INR 100 million has been raised through internal accruals. Due to the favourable cash flow position of the Company, raising additional equity for this expansion has not been considered. The management of the Company believes that this approach for financing the capital requirement is consistent with the Company’s philosophy of maximizing shareholder wealth.

The expansion is expected to be completed by December 2006 and the new plant commissioned by January 2007.

 

 

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.40.70

UK Pound

1

Rs.77.98

Euro

1

Rs.59.02

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

--

--BUSINESS SCALE

1~10

9

--PROFITABILIRY

1~10

6

--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

 

66

 

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